x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
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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
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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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Index to Financial Statement Schedules
|
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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.
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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 bylaws relating to the number, term and election of our directors, the filling of board vacancies, the calling of special meetings of stockholders and director and officer indemnification provisions.
|
•
|
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
|
•
|
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. 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
|
|
330,000 metric tons of cellulose specialties or commodity products
245,000 metric tons of commodity products
|
|
Owned
|
|
Fernandina Beach, Florida
|
|
155,000 metric tons of cellulose specialties or commodity products
|
|
Owned
|
|
Jesup, Georgia
|
|
Research Facility
|
|
Owned
|
|
|
|
|
|
|
Wood Chipping Facilities
|
Offerman, Georgia
|
|
800,000 short green tons of wood chips
|
|
Owned
|
|
Collins, Georgia
|
|
750,000 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 (a)
|
|
250,000 short green tons of wood chips
|
|
Owned
|
|
|
|
|
|
|
Corporate and Other
|
Jacksonville, Florida
|
|
Corporate Headquarters
|
|
Leased
|
(a)
|
The Jarratt, Virginia wood chipping facility was closed during 2015.
|
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
|
||||||
2015
|
|
|
|
|
|
||||||
Fourth Quarter
|
$
|
11.91
|
|
|
$
|
6.12
|
|
|
$
|
0.07
|
|
Third Quarter
|
16.26
|
|
|
6.01
|
|
|
0.07
|
|
|||
Second Quarter
|
19.35
|
|
|
14.90
|
|
|
0.07
|
|
|||
First Quarter
|
23.77
|
|
|
14.88
|
|
|
0.07
|
|
|||
|
|
|
|
|
|
||||||
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
|
|
|
—
|
|
Period
|
Total Number of Shares Purchased (a)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
|
|||||
September 27 to October 31
|
863
|
|
|
$
|
7.45
|
|
|
—
|
|
|
—
|
|
November 1 to November 28
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
November 29 to December 31
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
863
|
|
|
|
|
—
|
|
|
|
(a)
|
Repurchased to satisfy the minimum tax withholding requirements related to the vesting of restricted stock under the Rayonier Advanced Materials Incentive Stock Plan.
|
|
6/27/2014
|
|
12/31/2014
|
|
12/31/2015
|
Rayonier Advanced Materials
|
$100
|
|
$61
|
|
$27
|
S&P Small Cap 600
|
$100
|
|
$103
|
|
$101
|
S&P 500 Materials Index
|
$100
|
|
$99
|
|
$91
|
Item 6.
|
Selected Financial Data
|
(millions of dollars except per share amounts)
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Statement of Income Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
941
|
|
|
$
|
958
|
|
|
$
|
1,047
|
|
|
$
|
1,095
|
|
|
$
|
1,021
|
|
Gross margin
|
202
|
|
|
224
|
|
|
333
|
|
|
380
|
|
|
323
|
|
|||||
Operating income
|
120
|
|
|
63
|
|
|
289
|
|
|
342
|
|
|
283
|
|
|||||
Net income
|
55
|
|
|
32
|
|
|
220
|
|
|
242
|
|
|
214
|
|
|||||
Diluted earnings per share of common stock (a)
|
1.30
|
|
|
0.75
|
|
|
5.21
|
|
|
5.74
|
|
|
5.07
|
|
|||||
Dividends declared per share of common stock
|
0.28
|
|
|
0.14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
1,288
|
|
|
$
|
1,304
|
|
|
$
|
1,120
|
|
|
$
|
921
|
|
|
$
|
665
|
|
Property, plant and equipment, net
|
804
|
|
|
843
|
|
|
846
|
|
|
681
|
|
|
433
|
|
|||||
Total debt
|
868
|
|
|
945
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stockholders’ (deficit) equity
|
(17
|
)
|
|
(62
|
)
|
|
968
|
|
|
725
|
|
|
474
|
|
|||||
Statement of Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash provided by operating activities
|
$
|
202
|
|
|
$
|
188
|
|
|
$
|
258
|
|
|
$
|
305
|
|
|
$
|
258
|
|
Cash used for investing activities
|
(78
|
)
|
|
(90
|
)
|
|
(251
|
)
|
|
(305
|
)
|
|
(131
|
)
|
|||||
Cash used for financing activities
|
(89
|
)
|
|
(31
|
)
|
|
(7
|
)
|
|
—
|
|
|
(127
|
)
|
|||||
Capital expenditures
|
(78
|
)
|
|
(75
|
)
|
|
(96
|
)
|
|
(105
|
)
|
|
(97
|
)
|
|||||
Other Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
EBITDA (b)
|
$
|
209
|
|
|
$
|
149
|
|
|
$
|
363
|
|
|
$
|
402
|
|
|
$
|
339
|
|
(a)
|
In conjunction with the Separation, 42,176,565 shares of our common stock were distributed to Rayonier shareholders on June 27, 2014. For comparative purposes, this amount has been assumed to be outstanding as of the beginning of each period prior to the Separation in the calculation of Basic Earnings Per Share.
|
(b)
|
Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”)
is defined by SEC rule as earnings before interest, taxes, depreciation and amortization.
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
27 percent
of the per metric ton cost of sales. We consume approximately
1.5 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
14 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
5 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
|
Annual Pension Expense
|
|
Projected Benefit
Obligation
|
50 bp decrease in discount rate
|
+ 2.3 million
|
|
+ 26.8 million
|
50 bp increase in discount rate
|
- 2.1 million
|
|
- 24.2 million
|
50 bp decrease in long-term return on assets
|
+ 1.4 million
|
|
|
50 bp increase in long-term return on assets
|
- 1.4 million
|
|
|
Financial Information (in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Net Sales
|
|
|
|
|
|
||||||
Cellulose specialties
|
$
|
767
|
|
|
$
|
844
|
|
|
$
|
930
|
|
Commodity products and other
|
174
|
|
|
114
|
|
|
117
|
|
|||
Total Net Sales
|
941
|
|
|
958
|
|
|
1,047
|
|
|||
|
|
|
|
|
|
||||||
Cost of Sales
|
739
|
|
|
734
|
|
|
714
|
|
|||
Gross Margin
|
202
|
|
|
224
|
|
|
333
|
|
|||
Selling, general and administrative expenses
|
48
|
|
|
40
|
|
|
36
|
|
|||
Other operating expense, net
|
34
|
|
|
121
|
|
|
8
|
|
|||
Operating Income
|
120
|
|
|
63
|
|
|
289
|
|
|||
Interest expense, net
|
37
|
|
|
22
|
|
|
—
|
|
|||
Income Before Income Taxes
|
83
|
|
|
41
|
|
|
289
|
|
|||
Income Tax Expense
|
28
|
|
|
9
|
|
|
69
|
|
|||
Net Income
|
$
|
55
|
|
|
$
|
32
|
|
|
$
|
220
|
|
|
|
|
|
|
|
||||||
Other Data
|
|
|
|
|
|
||||||
Average Sales Prices ($ per metric ton)
|
|
|
|
|
|
||||||
Cellulose specialties
|
$
|
1,641
|
|
|
$
|
1,762
|
|
|
$
|
1,913
|
|
Commodity products
|
671
|
|
|
692
|
|
|
684
|
|
|||
Sales Volumes (thousands of metric tons)
|
|
|
|
|
|
||||||
Cellulose specialties
|
467
|
|
|
479
|
|
|
486
|
|
|||
Commodity products
|
247
|
|
|
148
|
|
|
157
|
|
|||
|
|
|
|
|
|
||||||
Gross Margin %
|
21.5
|
%
|
|
23.4
|
%
|
|
31.8
|
%
|
|||
Operating Margin %
|
12.8
|
%
|
|
6.6
|
%
|
|
27.6
|
%
|
|||
Effective Tax Rate %
|
33.3
|
%
|
|
21.8
|
%
|
|
23.9
|
%
|
Operating Income (in millions)
|
|
Gross Margin Changes Attributable to (a):
|
|
|
|
|
|||||||||||||||||
|
2014
|
Price
|
|
Volume/ Sales Mix
|
|
Cost
|
|
SG&A and other
|
|
2015
|
|||||||||||||
Operating Income
|
$
|
63
|
|
|
$
|
(62
|
)
|
|
$
|
13
|
|
|
$
|
28
|
|
|
$
|
78
|
|
|
$
|
120
|
|
Operating Margin %
|
6.6
|
%
|
|
(6.5
|
)%
|
|
1.4
|
%
|
|
3.0
|
%
|
|
8.3
|
%
|
|
12.8
|
%
|
(a)
|
Computed based on contribution margin.
|
Operating Income (in millions)
|
|
Gross Margin Changes Attributable to (a):
|
|
|
|
|
|||||||||||||||||
|
2013
|
Price
|
|
Volume/ Sales Mix
|
|
Cost
|
|
SG&A and other
|
|
2014
|
|||||||||||||
Operating Income
|
$
|
289
|
|
|
$
|
(73
|
)
|
|
$
|
(6
|
)
|
|
$
|
(30
|
)
|
|
$
|
(117
|
)
|
|
$
|
63
|
|
Operating Margin %
|
27.6
|
%
|
|
(5.4
|
)%
|
|
(0.3
|
)%
|
|
(3.1
|
)%
|
|
(12.2
|
)%
|
|
6.6
|
%
|
(a)
|
Computed based on contribution margin.
|
|
As of December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash and cash equivalents (a)
|
$
|
101
|
|
|
$
|
66
|
|
|
$
|
—
|
|
Availability under the Revolving Credit Facility (b)
|
236
|
|
|
222
|
|
|
—
|
|
|||
Total debt (c)
|
868
|
|
|
945
|
|
|
—
|
|
|||
Stockholders’ (deficit) equity
|
(17
|
)
|
|
(62
|
)
|
|
968
|
|
|||
Total capitalization (total debt plus equity)
|
851
|
|
|
883
|
|
|
968
|
|
|||
Debt to capital ratio
|
102
|
%
|
|
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 standby letters of credit of approximately
$14 million
, and $28 million at
December 31, 2015
, and
2014
, respectively. See
Note 17
—
Guarantees
for additional information.
|
(c)
|
See
Note 6
—
Debt
for additional information.
|
Cash Provided by (Used for):
|
2015
|
|
2014
|
|
2013
|
||||||
Operating activities
|
$
|
202
|
|
|
$
|
188
|
|
|
$
|
258
|
|
Investing activities
|
(77
|
)
|
|
(90
|
)
|
|
(251
|
)
|
|||
Financing activities
|
(89
|
)
|
|
(31
|
)
|
|
(7
|
)
|
Net Income to EBITDA Reconciliation
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Net Income
|
$
|
55
|
|
|
$
|
32
|
|
|
$
|
220
|
|
|
$
|
242
|
|
|
$
|
214
|
|
Depreciation and amortization
|
89
|
|
|
86
|
|
|
74
|
|
|
61
|
|
|
56
|
|
|||||
Interest expense, net
|
37
|
|
|
22
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||||
Income tax expense
|
28
|
|
|
9
|
|
|
69
|
|
|
100
|
|
|
69
|
|
|||||
EBITDA
|
209
|
|
|
149
|
|
|
363
|
|
|
402
|
|
|
339
|
|
|||||
Non-cash impairment charge
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
One-time separation and legal costs
|
2
|
|
|
26
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|||||
Insurance recovery
|
(1
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Environmental reserve adjustments
|
—
|
|
|
95
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Pro Forma EBITDA
|
238
|
|
|
267
|
|
|
369
|
|
|
402
|
|
|
339
|
|
Cash Flow from Operations to Adjusted Free Cash Flow Reconciliation
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Cash flow from operations
|
$
|
202
|
|
|
$
|
188
|
|
|
$
|
258
|
|
|
$
|
305
|
|
|
$
|
258
|
|
Capital expenditures (a)
|
(78
|
)
|
|
(75
|
)
|
|
(96
|
)
|
|
(105
|
)
|
|
(97
|
)
|
|||||
Tax benefit due to exchange of AFMC for CBPC
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(12
|
)
|
|
(21
|
)
|
|||||
Adjusted Free Cash Flow
|
$
|
124
|
|
|
$
|
113
|
|
|
$
|
143
|
|
|
$
|
188
|
|
|
$
|
140
|
|
(a)
|
Capital expenditures exclude strategic capital expenditures which are deemed discretionary by management. There was no strategic capital for the
twelve
months ended
December 31, 2015
. 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
|
||||||||||||||||
2016
|
|
2017-2018
|
|
2019-2020
|
|
Thereafter
|
|||||||||||||
Long-term debt, including current maturities
|
$
|
868
|
|
|
$
|
8
|
|
|
$
|
21
|
|
|
$
|
41
|
|
|
$
|
798
|
|
Interest payments on long-term debt (a)
|
289
|
|
|
37
|
|
|
74
|
|
|
72
|
|
|
106
|
|
|||||
Purchase obligations (b)
|
64
|
|
|
17
|
|
|
20
|
|
|
8
|
|
|
19
|
|
|||||
Purchase orders (c)
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Postretirement obligations
|
15
|
|
|
1
|
|
|
3
|
|
|
3
|
|
|
8
|
|
|||||
Operating leases — PP&E, offices (d)
|
4
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|||||
Total contractual cash obligations
|
$
|
1,245
|
|
|
$
|
69
|
|
|
$
|
120
|
|
|
$
|
125
|
|
|
$
|
931
|
|
(a)
|
Projected interest payments for variable-rate debt were calculated based on outstanding principal amounts and interest rates as of
December 31, 2015
.
|
(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)
|
2015
|
|
2014
|
|
2013
|
||||||
Boiler MACT (a)
|
$
|
18
|
|
|
$
|
17
|
|
|
$
|
—
|
|
Jesup plant consent order (b)
|
—
|
|
|
1
|
|
|
18
|
|
|||
Cellulose specialties expansion project (c)
|
—
|
|
|
—
|
|
|
19
|
|
|||
Other (d)
|
—
|
|
|
2
|
|
|
8
|
|
|||
Total
|
$
|
18
|
|
|
$
|
20
|
|
|
$
|
45
|
|
(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 capital cost of compliance with this new requirement to be approximately $15 million next year.
|
(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 26, 2016
|
|
|
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 26, 2016
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net Sales
|
$
|
941,384
|
|
|
$
|
957,689
|
|
|
$
|
1,046,603
|
|
Cost of Sales
|
738,930
|
|
|
733,942
|
|
|
714,038
|
|
|||
Gross Margin
|
202,454
|
|
|
223,747
|
|
|
332,565
|
|
|||
|
|
|
|
|
|
||||||
Selling, general and administrative expenses
|
47,662
|
|
|
39,969
|
|
|
35,778
|
|
|||
Other operating expense, net (Note 11)
|
35,269
|
|
|
120,823
|
|
|
8,164
|
|
|||
Operating Income
|
119,523
|
|
|
62,955
|
|
|
288,623
|
|
|||
Interest expense
|
36,869
|
|
|
22,378
|
|
|
—
|
|
|||
Interest and miscellaneous expense (income), net
|
(210
|
)
|
|
106
|
|
|
(292
|
)
|
|||
Income Before Income Taxes
|
82,864
|
|
|
40,471
|
|
|
288,915
|
|
|||
Income tax expense (Note 12)
|
27,607
|
|
|
8,816
|
|
|
69,148
|
|
|||
Net Income
|
$
|
55,257
|
|
|
$
|
31,655
|
|
|
$
|
219,767
|
|
|
|
|
|
|
|
||||||
Earnings Per Share of Common Stock (Note 10)
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
1.31
|
|
|
$
|
0.75
|
|
|
$
|
5.21
|
|
Diluted earnings per share
|
$
|
1.30
|
|
|
$
|
0.75
|
|
|
$
|
5.21
|
|
|
|
|
|
|
|
||||||
Dividends Declared Per Share
|
$
|
0.28
|
|
|
$
|
0.14
|
|
|
$
|
—
|
|
Comprehensive Income:
|
|
|
|
|
|
||||||
Net Income
|
$
|
55,257
|
|
|
$
|
31,655
|
|
|
$
|
219,767
|
|
Other Comprehensive Income (Loss) (Note 8)
|
|
|
|
|
|
||||||
Net (loss) gain from pension and postretirement plans, net of income tax benefit (expense) of $3,313, $15,944 and ($14,353)
|
(6,176
|
)
|
|
(28,326
|
)
|
|
24,971
|
|
|||
Total other comprehensive income (loss)
|
(6,176
|
)
|
|
(28,326
|
)
|
|
24,971
|
|
|||
Comprehensive Income
|
$
|
49,081
|
|
|
$
|
3,329
|
|
|
$
|
244,738
|
|
|
2015
|
|
2014
|
||||
Assets
|
|||||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
101,303
|
|
|
$
|
65,977
|
|
Accounts receivable, less allowance for doubtful accounts of $151 and $151
|
68,892
|
|
|
69,263
|
|
||
Inventory (Note 5)
|
125,409
|
|
|
140,209
|
|
||
Prepaid and other current assets
|
32,437
|
|
|
36,267
|
|
||
Total current assets
|
328,041
|
|
|
311,716
|
|
||
Property, Plant and Equipment, Net (Note 4)
|
803,838
|
|
|
843,375
|
|
||
Deferred Tax Assets (Note 12)
|
97,420
|
|
|
86,822
|
|
||
Other Assets
|
59,178
|
|
|
61,967
|
|
||
Total Assets
|
$
|
1,288,477
|
|
|
$
|
1,303,880
|
|
Liabilities and Stockholders’ Deficit
|
|||||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
44,992
|
|
|
$
|
64,697
|
|
Accrued customer incentives and prepayments
|
34,685
|
|
|
12,743
|
|
||
Accrued payroll and benefits
|
20,743
|
|
|
23,124
|
|
||
Current maturities of long-term debt (Note 6)
|
8,226
|
|
|
8,400
|
|
||
Other current liabilities
|
11,052
|
|
|
15,240
|
|
||
Current liabilities for disposed operations (Note 13)
|
12,034
|
|
|
7,241
|
|
||
Total current liabilities
|
131,732
|
|
|
131,445
|
|
||
Long-Term Debt (Note 6)
|
859,693
|
|
|
936,416
|
|
||
Non-Current Liabilities for Disposed Operations (Note 13)
|
145,350
|
|
|
149,488
|
|
||
Pension and Other Postretirement Benefits (Note 15)
|
162,084
|
|
|
141,338
|
|
||
Other Non-Current Liabilities
|
6,757
|
|
|
7,605
|
|
||
Commitments and Contingencies
|
|
|
|
||||
Stockholders’ Deficit (Note 9)
|
|
|
|
||||
Preferred stock, 10,000,000 shares authorized at $0.01 par value, 0 issued and outstanding as of 2015 and 2014
|
—
|
|
|
—
|
|
||
Common stock, 140,000,000 shares authorized at $0.01 par value, 42,872,435 and 42,616,319 issued and outstanding, as of 2015 and 2014, respectively
|
429
|
|
|
426
|
|
||
Additional paid-in capital
|
70,213
|
|
|
62,082
|
|
||
Accumulated earnings (deficit)
|
21,839
|
|
|
(21,476
|
)
|
||
Accumulated other comprehensive loss (Note 8)
|
(109,620
|
)
|
|
(103,444
|
)
|
||
Total Stockholders’ Deficit
|
(17,139
|
)
|
|
(62,412
|
)
|
||
Total Liabilities and Stockholders’ Deficit
|
$
|
1,288,477
|
|
|
$
|
1,303,880
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
55,257
|
|
|
$
|
31,655
|
|
|
$
|
219,767
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
89,189
|
|
|
85,607
|
|
|
74,386
|
|
|||
Stock-based incentive compensation expense
|
9,992
|
|
|
8,738
|
|
|
6,230
|
|
|||
Amortization of capitalized debt costs
|
2,116
|
|
|
1,007
|
|
|
—
|
|
|||
Deferred income taxes
|
(9,757
|
)
|
|
(33,672
|
)
|
|
(31,161
|
)
|
|||
Increase in liabilities for disposed operations
|
6,930
|
|
|
88,548
|
|
|
—
|
|
|||
Impairment charges
|
28,462
|
|
|
7,184
|
|
|
—
|
|
|||
Amortization of losses and prior service costs from pension and postretirement plans
|
14,702
|
|
|
9,113
|
|
|
8,398
|
|
|||
Loss from sale/disposal of property, plant and equipment
|
1,364
|
|
|
2,123
|
|
|
2,390
|
|
|||
Other
|
398
|
|
|
(177
|
)
|
|
(636
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables
|
696
|
|
|
1,710
|
|
|
6,380
|
|
|||
Inventories
|
14,800
|
|
|
(11,503
|
)
|
|
(11,715
|
)
|
|||
Accounts payable
|
(19,789
|
)
|
|
(4,365
|
)
|
|
(2,763
|
)
|
|||
Accrued liabilities
|
15,466
|
|
|
12,877
|
|
|
(1,077
|
)
|
|||
All other operating activities
|
(1,893
|
)
|
|
(5,434
|
)
|
|
(12,161
|
)
|
|||
Expenditures for disposed operations
|
(6,275
|
)
|
|
(5,659
|
)
|
|
—
|
|
|||
Cash Provided by Operating Activities
|
201,658
|
|
|
187,752
|
|
|
258,038
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Capital expenditures
|
(77,424
|
)
|
|
(74,791
|
)
|
|
(96,008
|
)
|
|||
Purchase of timber deeds
|
—
|
|
|
(12,692
|
)
|
|
—
|
|
|||
Purchase of land
|
—
|
|
|
(1,528
|
)
|
|
—
|
|
|||
Jesup plant cellulose specialties expansion
|
—
|
|
|
—
|
|
|
(141,143
|
)
|
|||
Other
|
—
|
|
|
(1,450
|
)
|
|
(13,516
|
)
|
|||
Cash Used for Investing Activities
|
(77,424
|
)
|
|
(90,461
|
)
|
|
(250,667
|
)
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Issuance of debt
|
—
|
|
|
1,025,000
|
|
|
—
|
|
|||
Repayment of debt
|
(77,100
|
)
|
|
(79,200
|
)
|
|
—
|
|
|||
Dividends paid
|
(11,816
|
)
|
|
(5,926
|
)
|
|
—
|
|
|||
Proceeds from the issuance of common stock
|
8
|
|
|
649
|
|
|
—
|
|
|||
Excess tax benefits on stock-based compensation
|
—
|
|
|
266
|
|
|
—
|
|
|||
Debt issuance costs
|
—
|
|
|
(15,432
|
)
|
|
—
|
|
|||
Common stock repurchased
|
—
|
|
|
(92
|
)
|
|
—
|
|
|||
Net payments to Rayonier
|
—
|
|
|
(956,579
|
)
|
|
(7,371
|
)
|
|||
Cash Used for Financing Activities
|
(88,908
|
)
|
|
(31,314
|
)
|
|
(7,371
|
)
|
|||
|
|
|
|
|
|
||||||
Cash and Cash Equivalents
|
|
|
|
|
|
||||||
Change in cash and cash equivalents
|
35,326
|
|
|
65,977
|
|
|
—
|
|
|||
Balance, beginning of year
|
65,977
|
|
|
—
|
|
|
—
|
|
|||
Balance, end of year
|
$
|
101,303
|
|
|
$
|
65,977
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Supplemental Disclosures of Cash Flow Information
|
|
|
|
|
|
||||||
Cash paid during the period:
|
|
|
|
|
|
||||||
Interest
|
$
|
38,189
|
|
|
$
|
19,567
|
|
|
$
|
—
|
|
Income taxes
|
$
|
31,667
|
|
|
$
|
34,588
|
|
|
$
|
—
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Capital assets purchased on account
|
$
|
16,720
|
|
|
$
|
16,637
|
|
|
$
|
14,106
|
|
|
Sales by Product Line
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cellulose specialties
|
$
|
766,940
|
|
|
$
|
843,473
|
|
|
$
|
929,931
|
|
Commodity products and other
|
174,444
|
|
|
114,216
|
|
|
116,672
|
|
|||
Total sales
|
$
|
941,384
|
|
|
$
|
957,689
|
|
|
$
|
1,046,603
|
|
|
Sales by Destination (a)
|
||||||||||||||||
|
2015
|
|
%
|
|
2014
|
|
%
|
|
2013
|
|
%
|
||||||
United States
|
$
|
398,739
|
|
|
42
|
|
$
|
422,648
|
|
|
44
|
|
$
|
437,048
|
|
|
42
|
China
|
256,979
|
|
|
27
|
|
255,954
|
|
|
27
|
|
281,407
|
|
|
27
|
|||
Japan
|
132,480
|
|
|
14
|
|
138,961
|
|
|
14
|
|
150,306
|
|
|
14
|
|||
Europe
|
91,847
|
|
|
10
|
|
93,957
|
|
|
10
|
|
79,138
|
|
|
7
|
|||
Latin America
|
8,176
|
|
|
1
|
|
5,510
|
|
|
1
|
|
60,477
|
|
|
6
|
|||
Other Asia
|
25,373
|
|
|
3
|
|
33,250
|
|
|
3
|
|
29,097
|
|
|
3
|
|||
All other
|
27,790
|
|
|
3
|
|
7,409
|
|
|
1
|
|
9,130
|
|
|
1
|
|||
Total sales
|
$
|
941,384
|
|
|
100
|
|
$
|
957,689
|
|
|
100
|
|
$
|
1,046,603
|
|
|
100
|
(a)
|
All sales to foreign countries are denominated in U.S. dollars.
|
|
Percentage of Sales
|
||||
|
2015
|
|
2014
|
|
2013
|
Eastman Chemical Company
|
28%
|
|
31%
|
|
21%
|
Nantong Cellulose Fibers, Co., Ltd.
|
18%
|
|
18%
|
|
19%
|
Daicel Corporation
|
13%
|
|
15%
|
|
13%
|
Celanese Acetate, LLC
|
0%
|
|
0%
|
|
14%
|
|
2015
|
|
2014
|
||||
Land and land improvements
|
$
|
15,426
|
|
|
$
|
15,411
|
|
Buildings
|
181,707
|
|
|
180,304
|
|
||
Machinery and equipment
|
1,764,477
|
|
|
1,777,299
|
|
||
Construction in progress
|
65,197
|
|
|
37,630
|
|
||
Total property, plant and equipment, gross
|
2,026,807
|
|
|
2,010,644
|
|
||
Accumulated depreciation
|
(1,222,969
|
)
|
|
(1,167,269
|
)
|
||
Total property, plant and equipment, net
|
$
|
803,838
|
|
|
$
|
843,375
|
|
|
2015
|
|
2014
|
||||
Finished goods
|
$
|
103,866
|
|
|
$
|
120,221
|
|
Work-in-progress
|
2,344
|
|
|
2,418
|
|
||
Raw materials
|
16,593
|
|
|
14,670
|
|
||
Manufacturing and maintenance supplies
|
2,606
|
|
|
2,900
|
|
||
Total inventory
|
$
|
125,409
|
|
|
$
|
140,209
|
|
|
2015
|
|
2014
|
||||
Term A-1 Loan Facility borrowings maturing through June 2019 bearing interest at LIBOR plus 1.5%, interest rate of 1.92% at December 31, 2015 (a)
|
$
|
55,763
|
|
|
$
|
106,973
|
|
Term A-2 Loan Facility borrowings maturing through June 2021 bearing interest at LIBOR plus 1.08% (after consideration of 0.67% patronage benefit), interest rate of 1.50% at December 31, 2015 (b)
|
262,156
|
|
|
287,843
|
|
||
Senior Notes due 2024 at a fixed interest rate of 5.50%
|
550,000
|
|
|
550,000
|
|
||
Total debt
|
867,919
|
|
|
944,816
|
|
||
Less: Current maturities of long-term debt
|
(8,226
|
)
|
|
(8,400
|
)
|
||
Long-term debt
|
$
|
859,693
|
|
|
$
|
936,416
|
|
(a)
|
The Term A-1 Loan includes an unamortized issue discount of approximately
$0.2 million
at
December 31, 2015
. The face amount of the liability is
$56.0 million
.
|
(b)
|
The Term A-2 Loan includes an unamortized issue discount of approximately
$0.6 million
at
December 31, 2015
. The face amount of the liability is
$262.8 million
.
|
2016
|
$
|
8,400
|
|
2017
|
9,775
|
|
|
2018
|
11,150
|
|
|
2019
|
38,225
|
|
|
2020
|
2,900
|
|
|
Thereafter
|
798,250
|
|
|
Total principal payments
|
$
|
868,700
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||||||||||
Asset (liability)
|
|
|
Level 1
|
|
Level 2
|
|
|
|
Level 1
|
|
Level 2
|
||||||||||||
Cash and cash equivalents
|
$
|
101,303
|
|
|
$
|
101,303
|
|
|
$
|
—
|
|
|
$
|
65,977
|
|
|
$
|
65,977
|
|
|
$
|
—
|
|
Current maturities of long-term debt
|
(8,226
|
)
|
|
—
|
|
|
(8,400
|
)
|
|
(8,400
|
)
|
|
—
|
|
|
(8,400
|
)
|
||||||
Fixed-rate long-term debt
|
(550,000
|
)
|
|
—
|
|
|
(435,171
|
)
|
|
(550,000
|
)
|
|
—
|
|
|
(453,063
|
)
|
||||||
Variable-rate long-term debt
|
(309,693
|
)
|
|
—
|
|
|
(310,300
|
)
|
|
(386,416
|
)
|
|
—
|
|
|
(387,400
|
)
|
Unrecognized components of employee benefit plans, net of tax
|
2015
|
|
2014
|
|
2013
|
||||||
Balance, January 1
|
$
|
(103,444
|
)
|
|
$
|
(39,699
|
)
|
|
$
|
(64,670
|
)
|
Amounts reclassified from accumulated other comprehensive loss (a)
|
9,427
|
|
|
5,804
|
|
|
5,269
|
|
|||
Other comprehensive loss before reclassifications
|
(15,603
|
)
|
|
(34,130
|
)
|
|
19,702
|
|
|||
Net other comprehensive income (loss)
|
(6,176
|
)
|
|
(28,326
|
)
|
|
24,971
|
|
|||
Net transfer from Rayonier (b)
|
—
|
|
|
(35,419
|
)
|
|
—
|
|
|||
Balance, December 31
|
$
|
(109,620
|
)
|
|
$
|
(103,444
|
)
|
|
$
|
(39,699
|
)
|
(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, 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
|
)
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
55,257
|
|
|
—
|
|
|
—
|
|
|
55,257
|
|
||||||
Net loss from pension and postretirement plans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,176
|
)
|
|
(6,176
|
)
|
||||||
Reclassification to additional paid-in capital
|
—
|
|
|
—
|
|
|
864
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
864
|
|
||||||
Issuance of common stock under incentive stock plans
|
258,176
|
|
|
3
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
9,832
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,832
|
|
||||||
Excess tax benefit on stock-based compensation
|
—
|
|
|
—
|
|
|
(2,558
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,558
|
)
|
||||||
Repurchase of common stock
|
(2,060
|
)
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
||||||
Dividends ($0.28 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,942
|
)
|
|
—
|
|
|
—
|
|
|
(11,942
|
)
|
||||||
Balance, December 31, 2015
|
42,872,435
|
|
|
$
|
429
|
|
|
$
|
70,213
|
|
|
$
|
21,839
|
|
|
$
|
—
|
|
|
$
|
(109,620
|
)
|
|
$
|
(17,139
|
)
|
|
2014
|
|
2013
|
||||
Allocation of costs from Rayonier (a)
|
$
|
(35,279
|
)
|
|
$
|
(67,781
|
)
|
Cash receipts received by Rayonier on Company’s behalf
|
472,780
|
|
|
1,073,275
|
|
||
Cash disbursements made by Rayonier on Company’s behalf
|
(484,318
|
)
|
|
(1,006,635
|
)
|
||
Net distribution to Rayonier on Separation
|
(906,200
|
)
|
|
—
|
|
||
Net liabilities from transfer of assets and liabilities with Rayonier (b)
|
(83,911
|
)
|
|
—
|
|
||
Net transfers to Rayonier
|
(1,036,928
|
)
|
|
(1,141
|
)
|
||
Non-cash adjustments:
|
|
|
|
||||
Stock-based compensation
|
(3,562
|
)
|
|
(6,230
|
)
|
||
Net liabilities from transfer of assets and liabilities with Rayonier (b)
|
83,911
|
|
|
—
|
|
||
Net payments to Rayonier per the Condensed Consolidated Statements of Cash Flows, prior to Separation
|
$
|
(956,579
|
)
|
|
$
|
(7,371
|
)
|
(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
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net income
|
$
|
55,257
|
|
|
$
|
31,655
|
|
|
$
|
219,767
|
|
|
|
|
|
|
|
||||||
Shares used for determining basic earnings per share of common stock
|
42,194,891
|
|
|
42,166,629
|
|
|
42,176,565
|
|
|||
Dilutive effect of:
|
|
|
|
|
|
||||||
Stock options
|
—
|
|
|
47,073
|
|
|
—
|
|
|||
Performance and restricted shares
|
27,968
|
|
|
25,980
|
|
|
—
|
|
|||
Shares used for determining diluted earnings per share of common stock
|
42,222,859
|
|
|
42,239,682
|
|
|
42,176,565
|
|
|||
Basic earnings per share (not in thousands)
|
$
|
1.31
|
|
|
$
|
0.75
|
|
|
$
|
5.21
|
|
Diluted earnings per share (not in thousands)
|
$
|
1.30
|
|
|
$
|
0.75
|
|
|
$
|
5.21
|
|
|
2015
|
|
2014
|
|
2013
|
|||
Stock options
|
447,524
|
|
|
229,001
|
|
|
—
|
|
Restricted stock
|
220,348
|
|
|
6,282
|
|
|
—
|
|
Performance shares
|
3,379
|
|
|
—
|
|
|
—
|
|
Total
|
671,251
|
|
|
235,283
|
|
|
—
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Increase in environmental liabilities for disposed operations (a)
|
$
|
6,930
|
|
|
$
|
70,129
|
|
|
$
|
—
|
|
One-time separation and legal costs
|
(802
|
)
|
|
25,680
|
|
|
6,033
|
|
|||
Increase to environmental liabilities for disposed operations resulting from separation from Rayonier (b)
|
—
|
|
|
18,419
|
|
|
—
|
|
|||
Non-cash impairment charge (c)
|
28,462
|
|
|
7,184
|
|
|
—
|
|
|||
Loss on sale or disposal of property, plant and equipment
|
998
|
|
|
2,123
|
|
|
2,390
|
|
|||
Insurance settlement
|
(1,000
|
)
|
|
(2,881
|
)
|
|
—
|
|
|||
Miscellaneous expense (income)
|
681
|
|
|
169
|
|
|
(259
|
)
|
|||
Total
|
$
|
35,269
|
|
|
$
|
120,823
|
|
|
$
|
8,164
|
|
(a)
|
The increase in environmental liabilities for disposed operations in
2015
and
2014
of
$6.9 million
and
$70.1 million
, respectively, reflects an increase to the estimates for the assessment, remediation and long-term monitoring and maintenance of the Company’s disposed operations sites over the next
20 years
. 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)
|
In light of the persistent imbalance of supply and demand in the cellulose specialties markets, on July 30, 2015, the Company announced a strategic asset repositioning at its Jesup, Georgia plant to better align its production assets to current market conditions, improve efficiency and restore commodity production throughput to approach historical levels. This repositioning resulted in the abandonment of certain long-lived assets, primarily at the Jesup plant. As a result, the abandoned assets were written down to salvage value and a
$28.5 million
pre-tax, non-cash impairment charge was recorded during the second quarter of 2015. The abandonment led management to conduct an impairment analysis on all long-lived assets being held and used on a combined plant level. Based on the impairment analysis performed, management concluded the assets were recoverable.
|
|
2015
|
|
2014
|
|
2013
|
||||||
Current
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
37,561
|
|
|
$
|
42,183
|
|
|
$
|
95,997
|
|
State and other
|
(197
|
)
|
|
305
|
|
|
4,312
|
|
|||
|
37,364
|
|
|
42,488
|
|
|
100,309
|
|
|||
Deferred
|
|
|
|
|
|
||||||
Federal
|
(11,073
|
)
|
|
(34,301
|
)
|
|
(31,051
|
)
|
|||
State and other
|
1,316
|
|
|
(641
|
)
|
|
(110
|
)
|
|||
|
(9,757
|
)
|
|
(34,942
|
)
|
|
(31,161
|
)
|
|||
Changes in valuation allowance
|
—
|
|
|
1,270
|
|
|
—
|
|
|||
Total
|
$
|
27,607
|
|
|
$
|
8,816
|
|
|
$
|
69,148
|
|
|
2015
|
|
2014
|
|
2013
|
|||
U.S. federal statutory income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Domestic manufacturing production deduction (a)
|
(4.2
|
)
|
|
(14.4
|
)
|
|
(3.4
|
)
|
CBPC reserve reversal
|
—
|
|
|
(11.8
|
)
|
|
—
|
|
State credits
|
(0.9
|
)
|
|
(2.9
|
)
|
|
—
|
|
AFMC for CBPC exchange
|
—
|
|
|
—
|
|
|
(6.5
|
)
|
Nondeductible executive compensation
|
1.2
|
|
|
2.4
|
|
|
—
|
|
Research credit adjustment
|
—
|
|
|
2.4
|
|
|
(1.0
|
)
|
Adjustment to prior tax returns
|
—
|
|
|
2.7
|
|
|
—
|
|
Change in valuation allowance
|
—
|
|
|
3.1
|
|
|
—
|
|
Nondeductible transaction costs
|
—
|
|
|
4.0
|
|
|
—
|
|
Change in state rate
|
1.4
|
|
|
—
|
|
|
—
|
|
Other
|
0.8
|
|
|
1.3
|
|
|
(0.2
|
)
|
Income tax rate as reported
|
33.3
|
%
|
|
21.8
|
%
|
|
23.9
|
%
|
(a)
|
The impact of the manufacturing deduction on the effective tax rate is greater in periods that include expenses that reduce pre-tax income but are not currently deductible for income tax purposes.
|
|
2015
|
|
2014
|
||||
Gross deferred tax assets:
|
|
|
|
||||
Pension, postretirement and other employee benefits
|
$
|
70,180
|
|
|
$
|
67,104
|
|
State tax credit carryforwards (a)
|
16,498
|
|
|
15,740
|
|
||
Environmental liabilities
|
55,945
|
|
|
56,508
|
|
||
Capitalized costs
|
14,088
|
|
|
14,042
|
|
||
State net operating losses (a)
|
3,204
|
|
|
4,892
|
|
||
Total gross deferred tax assets
|
159,915
|
|
|
158,286
|
|
||
Less: Valuation allowance
|
(19,702
|
)
|
|
(20,517
|
)
|
||
Total deferred tax assets after valuation allowance
|
140,213
|
|
|
137,769
|
|
||
Gross deferred tax liabilities:
|
|
|
|
||||
Accelerated depreciation
|
(41,006
|
)
|
|
(49,917
|
)
|
||
Other
|
(1,787
|
)
|
|
(1,030
|
)
|
||
Total gross deferred tax liabilities
|
(42,793
|
)
|
|
(50,947
|
)
|
||
Net deferred tax asset (b)
|
$
|
97,420
|
|
|
$
|
86,822
|
|
(a)
|
The following relates to tax credit carryforwards and net operating losses as of
December 31, 2015
:
|
|
Gross Amount
|
|
Tax Effected
|
|
Valuation Allowance
|
|
Expiration
|
||||||
State tax credit carryforwards
|
$
|
16,498
|
|
|
$
|
16,498
|
|
|
$
|
16,498
|
|
|
2018 - 2025
|
State net operating losses
|
85,014
|
|
|
3,204
|
|
|
3,204
|
|
|
2016 - 2033
|
(b)
|
The Company elected to early adopt ASU 2015-17,
Balance Sheet Presentation of Deferred Taxes,
as of
December 31, 2015
. The effect of this accounting change on prior periods was a reclassification to non-current assets of
$8.3 million
in deferred tax assets previously classified as current assets. See
Note 1
—
Basis of Presentation and New Accounting Pronouncements
for more information.
|
|
2015
|
|
2014
|
|
2013
|
||||||
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
|
2009, 2011 - 2015
|
State of Florida
|
2009, 2011 - 2015
|
|
Liabilities Assumed at Separation
|
|
Expenditures
|
|
Increase to Liabilities
|
|
December 31, 2014 Liability
|
|
Expenditures
|
|
Increase (Decrease) to Liabilities
|
|
December 31, 2015 Liability
|
||||||||||||||
Augusta, Georgia
|
$
|
10,838
|
|
|
$
|
(691
|
)
|
|
$
|
12,060
|
|
|
$
|
22,207
|
|
|
$
|
(1,187
|
)
|
|
$
|
1,861
|
|
|
$
|
22,881
|
|
Spartanburg, South Carolina
|
10,902
|
|
|
(710
|
)
|
|
8,792
|
|
|
18,984
|
|
|
(933
|
)
|
|
(575
|
)
|
|
17,476
|
|
|||||||
Baldwin, Florida
|
10,172
|
|
|
(640
|
)
|
|
14,996
|
|
|
24,528
|
|
|
(838
|
)
|
|
3,270
|
|
|
26,960
|
|
|||||||
Other SWP sites
|
27,471
|
|
|
(2,190
|
)
|
|
12,116
|
|
|
37,397
|
|
|
(1,731
|
)
|
|
226
|
|
|
35,892
|
|
|||||||
Total SWP
|
59,383
|
|
|
(4,231
|
)
|
|
47,964
|
|
|
103,116
|
|
|
(4,689
|
)
|
|
4,782
|
|
|
103,209
|
|
|||||||
Port Angeles, Washington
|
8,100
|
|
|
(1,109
|
)
|
|
32,922
|
|
|
39,913
|
|
|
(1,040
|
)
|
|
532
|
|
|
39,405
|
|
|||||||
All other sites
|
6,357
|
|
|
(319
|
)
|
|
7,662
|
|
|
13,700
|
|
|
(546
|
)
|
|
1,616
|
|
|
14,770
|
|
|||||||
Total
|
$
|
73,840
|
|
|
$
|
(5,659
|
)
|
|
$
|
88,548
|
|
|
$
|
156,729
|
|
|
$
|
(6,275
|
)
|
|
$
|
6,930
|
|
|
$
|
157,384
|
|
Less: Current portion
|
|
|
|
|
|
|
(7,241
|
)
|
|
|
|
|
|
(12,034
|
)
|
||||||||||||
Non-Current portion
|
|
|
|
|
|
|
|
$
|
149,488
|
|
|
|
|
|
|
$
|
145,350
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Selling, general and administrative expenses
|
$
|
8,124
|
|
|
$
|
7,763
|
|
|
$
|
5,006
|
|
Cost of sales
|
1,868
|
|
|
975
|
|
|
1,224
|
|
|||
Total stock-based compensation expense
|
$
|
9,992
|
|
|
$
|
8,738
|
|
|
$
|
6,230
|
|
|
2014
|
|
2013
|
||||
Expected volatility
|
40.1
|
%
|
|
39.0
|
%
|
||
Dividend yield
|
4.2
|
%
|
|
3.4
|
%
|
||
Risk-free rate
|
2.2
|
%
|
|
1.0
|
%
|
||
Expected life (in years)
|
6.3
|
|
|
6.3
|
|
||
Fair value per share of options granted
|
$
|
9.31
|
|
|
$
|
14.00
|
|
Fair value of options granted
|
$
|
90
|
|
|
$
|
703
|
|
|
Stock Options
|
|||||||||||
|
Options
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term (in years)
|
|
Aggregate Intrinsic Value
|
|||||
Outstanding at January 1, 2015
|
466,015
|
|
|
$
|
31.73
|
|
|
|
|
|
||
Forfeited
|
(7,750
|
)
|
|
38.56
|
|
|
|
|
|
|||
Exercised
|
(460
|
)
|
|
17.34
|
|
|
|
|
|
|||
Expired
|
(16,190
|
)
|
|
30.36
|
|
|
|
|
|
|||
Outstanding at December 31, 2015
|
441,615
|
|
|
$
|
31.67
|
|
|
5.0
|
|
$
|
—
|
|
Options vested and expected to vest
|
441,615
|
|
|
$
|
31.67
|
|
|
5.0
|
|
$
|
—
|
|
Options exercisable at December 31, 2015
|
371,845
|
|
|
$
|
30.34
|
|
|
4.4
|
|
$
|
—
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Intrinsic value of options exercised (a)
|
$
|
—
|
|
|
$
|
320
|
|
|
$
|
772
|
|
Fair value of options vested
|
$
|
717
|
|
|
$
|
90
|
|
|
$
|
593
|
|
(a)
|
Intrinsic value of stock options exercised is based on the market price of the Company’s stock at
December 31, 2015
and
2014
, and of Rayonier's stock at
December 31, 2013
.
|
|
2015
|
|
2014
|
|
2013
|
||||||
Restricted shares granted
|
277,298
|
|
|
172,894
|
|
|
10,200
|
|
|||
Weighted average price of restricted shares granted
|
$
|
20.83
|
|
|
$
|
41.51
|
|
|
$
|
56.00
|
|
Intrinsic value of restricted stock outstanding (a)
|
$
|
3,763
|
|
|
$
|
3,235
|
|
|
$
|
666
|
|
Fair value of restricted stock vested
|
$
|
690
|
|
|
$
|
100
|
|
|
$
|
27
|
|
(a)
|
Intrinsic value of restricted stock outstanding is based on the market price of the Company’s stock at
December 31, 2015
and
2014
, and of Rayonier’s stock at
December 31, 2013
.
|
|
Restricted Stock
|
|||||
|
Awards
|
|
Weighted Average Grant Date Fair Value
|
|||
Outstanding at January 1, 2015
|
145,085
|
|
|
$
|
41.66
|
|
Granted
|
277,298
|
|
|
20.83
|
|
|
Forfeited
|
(19,350
|
)
|
|
25.07
|
|
|
Vested
|
(18,650
|
)
|
|
37.00
|
|
|
Outstanding at December 31, 2015
|
384,383
|
|
|
$
|
28.41
|
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
Performance-Based Stock Units
|
|
Performance-Based Stock Units
|
|
Performance-Based Restricted Stock
|
|
Performance-Based Stock Units
|
||||||||
Common shares of stock reserved for performance shares
|
422,920
|
|
|
95,952
|
|
|
286,737
|
|
|
52,900
|
|
||||
Weighted average fair value of performance share units granted
|
$
|
17.51
|
|
|
$
|
42.27
|
|
|
$
|
40.41
|
|
|
$
|
58.99
|
|
Intrinsic value of outstanding performance
share units (a)
|
$
|
2,070
|
|
|
$
|
1,070
|
|
|
$
|
3,197
|
|
|
$
|
3,618
|
|
Fair value of performance shares vested
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
962
|
|
Cash used to pay the minimum withholding tax requirements in lieu of receiving common shares
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,199
|
|
(a)
|
Intrinsic value of outstanding performance share units is based on the market price of the Company’s stock at
December 31, 2015
and
2014
, and of Rayonier’s stock at
December 31, 2013
.
|
|
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, 2015
|
47,977
|
|
|
$
|
42.27
|
|
|
143,369
|
|
|
$
|
40.52
|
|
Granted
|
214,403
|
|
|
17.51
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(2,943
|
)
|
|
17.74
|
|
|
(1,671
|
)
|
|
19.84
|
|
||
Canceled (a)
|
(47,977
|
)
|
|
42.27
|
|
|
—
|
|
|
—
|
|
||
Outstanding at December 31, 2015
|
211,460
|
|
|
$
|
17.51
|
|
|
141,698
|
|
|
$
|
40.76
|
|
(a)
|
During the first quarter of 2015, performance shares granted in 2012 were canceled as the Company did not meet the performance criteria for payout on these shares. The cancellation of these shares resulted in an excess tax deficit of
$2.5 million
.
|
|
2015
|
|
2014
|
||
Expected volatility
|
17.3
|
%
|
|
16.9
|
%
|
Risk-free rate
|
1.0
|
%
|
|
0.7
|
%
|
|
Pension
|
|
Postretirement
|
||||||||||||
Change in Projected Benefit Obligation
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Projected benefit obligation at beginning of year
|
$
|
409,356
|
|
|
$
|
173,077
|
|
|
$
|
26,568
|
|
|
$
|
17,178
|
|
Service cost
|
5,977
|
|
|
4,099
|
|
|
1,006
|
|
|
798
|
|
||||
Interest cost
|
15,228
|
|
|
11,379
|
|
|
919
|
|
|
916
|
|
||||
Actuarial loss (gain)
|
(7,073
|
)
|
|
45,171
|
|
|
(2,049
|
)
|
|
4,417
|
|
||||
Plan amendments (a)
|
—
|
|
|
—
|
|
|
1,321
|
|
|
—
|
|
||||
Employee contributions
|
—
|
|
|
—
|
|
|
361
|
|
|
—
|
|
||||
Benefits paid
|
(18,455
|
)
|
|
(13,468
|
)
|
|
(1,167
|
)
|
|
(1,309
|
)
|
||||
Assumption of balance from parent at spin
|
—
|
|
|
189,098
|
|
|
—
|
|
|
4,568
|
|
||||
Projected benefit obligation at end of year
|
$
|
405,033
|
|
|
$
|
409,356
|
|
|
$
|
26,959
|
|
|
$
|
26,568
|
|
Change in Plan Assets
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
291,087
|
|
|
$
|
170,218
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
(6,627
|
)
|
|
13,359
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
2,312
|
|
|
1,056
|
|
|
806
|
|
|
1,309
|
|
||||
Employee contributions
|
—
|
|
|
—
|
|
|
361
|
|
|
—
|
|
||||
Benefits paid
|
(18,455
|
)
|
|
(13,468
|
)
|
|
(1,167
|
)
|
|
(1,309
|
)
|
||||
Other expense
|
(2,162
|
)
|
|
(1,175
|
)
|
|
—
|
|
|
—
|
|
||||
Assumption of balance from parent at spin
|
—
|
|
|
121,097
|
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets at end of year
|
$
|
266,155
|
|
|
$
|
291,087
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded Status at End of Year:
|
|
|
|
|
|
|
|
||||||||
Net accrued benefit cost
|
$
|
(138,878
|
)
|
|
$
|
(118,269
|
)
|
|
$
|
(26,959
|
)
|
|
$
|
(26,568
|
)
|
(a)
|
During
2015
, the Fernandina postretirement medical plan was amended as a result of the Company’s negotiations with the plant’s unions. The amendment changed the plan from a fully insured health maintenance organization plan to a self-funded high deductible plan and added benefits for plan retiree spouses. The plan was also remeasured at the amendment date. The impact of the plan amendment and the remeasurement was a net increase in the projected benefit obligation of
$1.3 million
.
|
|
Pension
|
|
Postretirement
|
||||||||||||
Amounts recognized in the Consolidated Balance Sheets consist of:
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Non-current assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
(2,268
|
)
|
|
(2,036
|
)
|
|
(1,485
|
)
|
|
(1,463
|
)
|
||||
Non-current liabilities
|
(136,610
|
)
|
|
(116,233
|
)
|
|
(25,474
|
)
|
|
(25,105
|
)
|
||||
Net amount recognized
|
$
|
(138,878
|
)
|
|
$
|
(118,269
|
)
|
|
$
|
(26,959
|
)
|
|
$
|
(26,568
|
)
|
|
Pension
|
|
Postretirement
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
Net (losses) gains
|
$
|
(24,950
|
)
|
|
$
|
(49,577
|
)
|
|
$
|
25,411
|
|
|
$
|
759
|
|
|
$
|
(3,807
|
)
|
|
$
|
5,616
|
|
|
Pension
|
|
Postretirement
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
Amortization of losses
|
$
|
13,434
|
|
|
$
|
7,620
|
|
|
$
|
6,494
|
|
|
$
|
676
|
|
|
$
|
597
|
|
|
$
|
549
|
|
Amortization of prior service (credit) cost
|
750
|
|
|
1,161
|
|
|
1,292
|
|
|
(158
|
)
|
|
(265
|
)
|
|
(39
|
)
|
|
Pension
|
|
Postretirement
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Prior service cost
|
$
|
(3,776
|
)
|
|
$
|
(4,527
|
)
|
|
$
|
27
|
|
|
$
|
(32
|
)
|
Net losses
|
(161,519
|
)
|
|
(150,003
|
)
|
|
(8,585
|
)
|
|
(11,298
|
)
|
||||
Plan amendment
|
—
|
|
|
—
|
|
|
1,797
|
|
|
3,293
|
|
||||
Deferred income tax benefit
|
59,975
|
|
|
56,206
|
|
|
2,461
|
|
|
2,917
|
|
||||
AOCI
|
$
|
(105,320
|
)
|
|
$
|
(98,324
|
)
|
|
$
|
(4,300
|
)
|
|
$
|
(5,120
|
)
|
|
2015
|
|
2014
|
||||
Projected benefit obligation
|
$
|
431,992
|
|
|
$
|
435,219
|
|
Accumulated benefit obligation
|
417,397
|
|
|
394,263
|
|
||
Fair value of plan assets
|
266,155
|
|
|
291,087
|
|
|
Pension
|
|
Postretirement
|
||||||||||||||||||||
Components of Net Periodic Benefit Cost
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
Service cost
|
$
|
5,977
|
|
|
$
|
4,099
|
|
|
$
|
2,790
|
|
|
$
|
1,006
|
|
|
$
|
798
|
|
|
$
|
941
|
|
Interest cost
|
15,228
|
|
|
11,379
|
|
|
6,900
|
|
|
919
|
|
|
916
|
|
|
741
|
|
||||||
Expected return on plan assets
|
(23,234
|
)
|
|
(18,333
|
)
|
|
(12,515
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service (credit) cost
|
750
|
|
|
1,161
|
|
|
1,292
|
|
|
(158
|
)
|
|
(265
|
)
|
|
(39
|
)
|
||||||
Amortization of losses
|
13,434
|
|
|
7,620
|
|
|
6,494
|
|
|
676
|
|
|
597
|
|
|
549
|
|
||||||
Net periodic benefit cost (a)
|
$
|
12,155
|
|
|
$
|
5,926
|
|
|
$
|
4,961
|
|
|
$
|
2,443
|
|
|
$
|
2,046
|
|
|
$
|
2,192
|
|
(a)
|
A portion of the net periodic benefit cost is recorded in cost of goods sold in the Consolidated Statements of Income.
|
|
Pension
|
|
Postretirement
|
||||
Amortization of loss
|
$
|
10,881
|
|
|
$
|
524
|
|
Amortization of prior service cost
|
761
|
|
|
(139
|
)
|
||
Total amortization of AOCI loss
|
$
|
11,642
|
|
|
$
|
385
|
|
|
Pension
|
|
Postretirement
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||
Assumptions used to determine benefit obligations at December 31:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.03
|
%
|
|
3.71
|
%
|
|
4.60
|
%
|
|
3.98
|
%
|
|
3.65
|
%
|
|
4.60
|
%
|
Rate of compensation increase
|
4.45
|
%
|
|
4.50
|
%
|
|
4.60
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
Assumptions used to determine net periodic benefit cost for years ended December 31:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.71
|
%
|
|
4.04
|
%
|
|
3.70
|
%
|
|
3.65
|
%
|
|
4.00
|
%
|
|
3.60
|
%
|
Expected long-term return on plan assets
|
8.50
|
%
|
|
8.50
|
%
|
|
8.50
|
%
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
Rate of compensation increase
|
4.45
|
%
|
|
4.50
|
%
|
|
4.60
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
|
Postretirement
|
||||
|
2015
|
|
2014
|
||
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
|
2019
|
|
|
2018
|
|
|
1 Percent
|
||||||
Effect on:
|
Increase
|
|
Decrease
|
||||
Total of service and interest cost components
|
$
|
209
|
|
|
$
|
(203
|
)
|
Accumulated postretirement benefit obligation
|
2,245
|
|
|
(1,193
|
)
|
|
Percentage of Plan Assets
|
|
Target Allocation Range
|
||||
Asset Category
|
2015
|
|
2014
|
|
|||
Domestic equity securities
|
41
|
%
|
|
41
|
%
|
|
35-45%
|
International equity securities
|
24
|
%
|
|
23
|
%
|
|
20-30%
|
Domestic fixed income securities
|
27
|
%
|
|
28
|
%
|
|
25-29%
|
International fixed income securities
|
5
|
%
|
|
5
|
%
|
|
3-7%
|
Real estate fund
|
3
|
%
|
|
3
|
%
|
|
2-4%
|
Total
|
100
|
%
|
|
100
|
%
|
|
|
|
Fair Value at December 31, 2015
|
|
Fair Value at December 31, 2014
|
||||||||||||||||||||
Asset Category
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||||||||
Domestic equity securities
|
$
|
23,689
|
|
|
$
|
85,011
|
|
|
$
|
108,700
|
|
|
$
|
23,476
|
|
|
$
|
94,163
|
|
|
$
|
117,639
|
|
International equity securities
|
28,773
|
|
|
33,390
|
|
|
62,163
|
|
|
33,496
|
|
|
33,425
|
|
|
66,921
|
|
||||||
Domestic fixed income securities
|
—
|
|
|
70,903
|
|
|
70,903
|
|
|
—
|
|
|
79,193
|
|
|
79,193
|
|
||||||
International fixed income securities
|
12,343
|
|
|
—
|
|
|
12,343
|
|
|
12,767
|
|
|
—
|
|
|
12,767
|
|
||||||
Real estate fund
|
9,077
|
|
|
—
|
|
|
9,077
|
|
|
9,387
|
|
|
—
|
|
|
9,387
|
|
||||||
Short-term investments
|
—
|
|
|
2,969
|
|
|
2,969
|
|
|
1,038
|
|
|
4,142
|
|
|
5,180
|
|
||||||
Total
|
$
|
73,882
|
|
|
$
|
192,273
|
|
|
$
|
266,155
|
|
|
$
|
80,164
|
|
|
$
|
210,923
|
|
|
$
|
291,087
|
|
|
Pension Benefits
|
|
Postretirement Benefits
|
||||
2016
|
$
|
20,253
|
|
|
$
|
1,454
|
|
2017
|
21,024
|
|
|
1,553
|
|
||
2018
|
21,750
|
|
|
1,677
|
|
||
2019
|
22,428
|
|
|
1,626
|
|
||
2020
|
22,986
|
|
|
1,577
|
|
||
2021 — 2025
|
121,403
|
|
|
7,491
|
|
Financial Commitments
|
Maximum Potential Payment
|
||
Standby letters of credit (a)
|
$
|
14,216
|
|
Surety bonds (b)
|
56,201
|
|
|
Total financial commitments
|
$
|
70,417
|
|
(a)
|
The letters of credit primarily provide credit support for surety bonds issued to comply with financial assurance requirements relating to environmental remediation of disposed sites. The letters of credit will expire during
2016
and will be renewed as required.
|
(b)
|
Rayonier Advanced Materials purchases surety bonds primarily to comply with financial assurance 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 2016 and
2019
. They are expected to be renewed annually as required.
|
|
Operating Leases (a)
|
|
Purchase Obligations (b)
|
||||
2016
|
$
|
1,273
|
|
|
$
|
16,573
|
|
2017
|
1,140
|
|
|
14,771
|
|
||
2018
|
720
|
|
|
5,490
|
|
||
2019
|
448
|
|
|
3,826
|
|
||
2020
|
400
|
|
|
3,826
|
|
||
Thereafter
|
431
|
|
|
19,856
|
|
||
Total
|
$
|
4,412
|
|
|
$
|
64,342
|
|
(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.
|
|
Quarter Ended
|
|
Total Year
|
||||||||||||||||
|
March 28
|
|
June 27
|
|
September 26
|
|
December 31
|
|
|||||||||||
2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
221,348
|
|
|
$
|
220,892
|
|
|
$
|
257,590
|
|
|
$
|
241,554
|
|
|
$
|
941,384
|
|
Gross Margin
|
36,872
|
|
|
45,021
|
|
|
70,169
|
|
|
50,392
|
|
|
202,454
|
|
|||||
Operating Income
|
23,946
|
|
|
8,585
|
|
|
57,962
|
|
|
29,030
|
|
|
119,523
|
|
|||||
Net Income (Loss)
|
10,521
|
|
|
(312
|
)
|
|
32,291
|
|
|
12,757
|
|
|
55,257
|
|
|||||
Basic earnings per share
|
0.25
|
|
|
(0.01
|
)
|
|
0.77
|
|
|
0.30
|
|
|
1.31
|
|
|||||
Diluted earnings per share
|
0.25
|
|
|
(0.01
|
)
|
|
0.76
|
|
|
0.30
|
|
|
1.30
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Quarter Ended
|
|
|
||||||||||||||||
|
March 31
|
|
June 28
|
|
September 27
|
|
December 31
|
|
Total Year
|
||||||||||
2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Net 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 (Loss)
|
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
|
|
(a)
|
In conjunction with the Separation,
42,176,565
shares of the Company’s common stock were distributed to Rayonier shareholders. For comparative purposes, and to provide a more meaningful calculation of weighted-average shares outstanding, this amount has been assumed 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, 2015
|
$
|
151
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
151
|
|
Year ended December 31, 2014
|
140
|
|
|
11
|
|
|
—
|
|
|
151
|
|
||||
Year ended December 31, 2013
|
140
|
|
|
—
|
|
|
—
|
|
|
140
|
|
||||
Deferred tax asset valuation allowance:
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2015
|
$
|
20,517
|
|
|
$
|
—
|
|
|
$
|
(815
|
)
|
|
$
|
19,702
|
|
Year ended December 31, 2014
|
24,588
|
|
|
—
|
|
|
(4,071
|
)
|
|
20,517
|
|
||||
Year ended December 31, 2013
|
1,201
|
|
|
23,387
|
|
(a)
|
—
|
|
|
24,588
|
|
||||
Self-insurance liabilities (b):
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2015
|
$
|
1,947
|
|
|
$
|
(734
|
)
|
(c)
|
$
|
(624
|
)
|
|
$
|
589
|
|
Year ended December 31, 2014
|
—
|
|
|
2,361
|
|
|
(414
|
)
|
|
1,947
|
|
||||
Year ended December 31, 2013
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(a)
|
The increase in the valuation allowance during 2013 was primarily related to Georgia investment tax credits earned on the CSE project.
|
(b)
|
Prior to the Separation, self-insurance liabilities were recorded by Rayonier. As a result, the Company did not record self-insurance liabilities until the Separation on June 27, 2014.
|
(c)
|
The decrease in the self-insurance liabilities is due to an adjustment based on the annual actuarial review.
|
|
|
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/ PAUL G. BOYNTON
|
|
Chairman of the Board, President and Chief Executive Officer
|
|
February 26, 2016
|
|
Paul G. Boynton
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
|
|
/s/ FRANK A. RUPERTO
|
|
Chief Financial Officer and Senior Vice President, Finance and Strategy
|
|
February 26, 2016
|
|
Frank A. Ruperto
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
|
/s/ JOHN P. CARR
|
|
Chief Accounting Officer and Vice President, Controller
|
|
February 26, 2016
|
|
John P. Carr
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Lead Director
|
|
|
|
C. David Brown, II
|
|
|
|
|
|
*
|
|
Director
|
|
|
|
Charles E. Adair
|
|
|
|
|
|
*
|
|
Director
|
|
|
|
DeLyle W. Bloomquist
|
|
|
|
|
|
*
|
|
Director
|
|
|
|
Mark E. Gaumond
|
|
|
|
|
|
*
|
|
Director
|
|
|
|
James F. Kirsch
|
|
|
|
|
|
*
|
|
Director
|
|
|
|
Lisa M. Palumbo
|
|
|
|
|
|
*
|
|
Director
|
|
|
|
Thomas I. Morgan
|
|
|
|
|
|
*
|
|
Director
|
|
|
|
Ronald Townsend
|
|
|
|
|
|
|
|
|
|
|
*By:
|
/s/ F
RANK
A. R
UPERTO
|
|
|
|
|
|
Frank A. Ruperto
(Attorney-In-Fact)
|
|
|
|
February 26, 2016
|
•
|
The ROIC performance will be calculated and payout levels will be determined per the following table for the program. The interpolative table for 2017 and 2018 will be published at the time the objective is communicated.
|
ROIC Level for 2016
|
Award (Expressed as a Percent of Target)
|
|
|
|
|
Left blank intentionally.
|
|
|
|
|
|
|
|
•
|
Payment, if any, will be made in RYAM stock, and may be reduced, to the extent allowed under applicable regulations, by the number of shares of stock equal in value to the amount needed to cover associated tax liabilities.
|
•
|
Dividend equivalents and interest will be paid in cash on the number of RYAM shares of stock earned under the Program.
|
•
|
Dividend equivalents and interest will be calculated by taking the dividends paid on one share of RYAM stock during the performance period times the number of shares of stock awarded at the end of the period. Interest on such dividends will be earned at a rate equal to the prime rate as reported in the Wall Street Journal, adjusted and compounded annually; from the date such cash dividends were paid by the Company.
|
•
|
Total Awards will be valued on March 1 following the end of the three year performance period using the average of the closing price of the ten trading days preceding this date. Awards, including dividends and interest, will be distributed to participants as soon as practicable following the valuation date.
|
•
|
Target awards will be prorated in cases of retirement, death, or disability in accordance with Plan provisions.
|
•
|
The following will be excluded from the ROIC calculation:
|
◦
|
Additional impact of accounting expense associated with the plan
|
◦
|
Unusual non-recurring income and expense items defined as below.
|
▪
|
business acquisition costs
|
▪
|
environmental liability adjustments in excess of LRP amounts
|
▪
|
restructuring and impairment charges
|
▪
|
bond repurchases gains or losses
|
▪
|
financing issuance costs
|
▪
|
changes in accounting methods or principals different than those
assumed in the LRP
|
◦
|
Results of material business acquisitions not included in the calculation of the target ROIC amounts above will be excluded in the year of the acquisition but included in the calculations for the remaining years of the program
|
TSR Ranking
|
Modifier
|
Below the 25
th
percentile
|
Results are reduced by 25%
|
Greater than or equal to the 25
th
percentile but less than the 75
th
percentile
|
Results are not modified
|
Greater than or equal to the 75
th
percentile
|
Results are increased by 25%
|
ARTICLE I.
|
DEFINITIONS 2
|
Section 1.1.
|
Definitions 2
|
ARTICLE II.
|
ELIGIBILITY 3
|
Section 2.1.
|
Eligibility for Participation 4
|
Section 2.2.
|
Circumstances in Which No Severance Will be Paid 4
|
Section 2.3
|
Separation Agreement as a Condition to Severance 5
|
ARTICLE III.
|
SEVERANCE 5
|
Section 3.1.
|
Cash Severance 6
|
Section 3.2.
|
Outplacement, Medical Benefits and Severance 6
|
Section 3.3.
|
Equity 6
|
Section 3.4
|
Severance Benefits (Table A) 6
|
Section 3.5.
|
Death 7
|
ARTICLE IV.
|
CONTRIBUTIONS 7
|
Section 4.1.
|
Company Contributions 7
|
ARTICLE V.
|
ADMINISTRATION 7
|
Section 5.1.
|
Fiduciaries 7
|
Section 5.2.
|
Appointment of Plan Administrator 7
|
Section 5.3.
|
Plan Administrator’s Responsibilities 7
|
Section 5.4.
|
Action by the Company 8
|
Section 5.5.
|
Compensation 8
|
Section 5.6.
|
Claims Procedure 8
|
ARTICLE VI.
|
AMENDMENT AND TERMINATION OF THIS PLAN 10
|
Section 6.1.
|
Right to Amend 10
|
Section 6.2.
|
Right to Terminate 10
|
ARTICLE VII.
|
PARTICIPATING EMPLOYERS 10
|
Section 7.1.
|
Right to Participate 10
|
Section 7.2.
|
Termination of Participation 10
|
ARTICLE VIII.
|
MISCELLANEOUS 11
|
Section 8.1.
|
Non-Guarantee of Employment or Other Benefits 11
|
Section 8.2.
|
Temporary Leave of Absence 11
|
Section 8.3.
|
Nonalienation of Benefits 11
|
Section 8.4.
|
Applicable Law 11
|
Section 8.5.
|
No Representations Contrary to this Plan 11
|
Section 8.6.
|
Tax Consequences and Code Section 409A Omnibus Provision
11
|
Section 8.7.
|
Required ERISA Information 12
|
ARTICLE I.
|
DEFINITIONS
|
(i)
|
A willful and material act of embezzlement, theft, fraud or misappropriation of Company property;
|
(ii)
|
A willful breach of any fiduciary duty owed by the Executive to the Company;
|
(iii)
|
A willful failure or refusal to comply with laws or regulations applicable to the Company and its business, which failure or refusal has had or with the passage of time could have, a material adverse impact on the Company;
|
(iv)
|
A willful failure or refusal to comply with the material policies of the Company;
|
(v)
|
Gross incompetence or gross negligence in the performance of executive’s job duties, or a willful failure to perform executive’s duties in a manner consistent with commercially reasonable standards of conduct or care;
|
(vi)
|
A material act of insubordination or dishonesty;
|
(vii)
|
An act that would constitute a felony or any other crime the penalty for conviction of which could include incarceration for a term of ninety days or more.
|
Eligible
Executive Tier |
Cash Severance (excluding any Terminal Bonus)
|
Medical Benefits Coverage
Period |
Months of Outplacement Services
|
Tier I
|
2 x
Salary & Target Bonus |
18 months
|
12 months
|
Tier II
|
1.5 x
Salary & Target Bonus |
18 months
|
12 months
|
Tier III
|
1.0 x
Salary & Target Bonus |
12 months
|
12 months
|
Tier IV
|
9/12ths x
Salary & Target Bonus |
9 months
|
12 months
|
Name of Plan:
|
Rayonier Advanced Materials Inc. Severance Pay Plan for Salaried Executives
|
Name of Plan Sponsor:
|
Rayonier Advanced Materials Inc.
1301 Riverplace Boulevard – Suite 2300 Jacksonville, Florida 32207
|
Plan Sponsor’s Identification
Number |
46-4559529
|
Type of Welfare Plan:
|
Severance Pay Plan (top hat)
|
Type of Administration
|
Internally administered by the Company through the Plan Administrator
|
Plan Administrator:
|
Senior Vice President, Human Resources Rayonier Advanced Materials Inc.
1301 Riverplace Boulevard – Suite 2300 Jacksonville, Florida 32207
|
Agent for Service of
Legal Process: |
Legal Process may be served on the Plan Administrator or the Company.
|
Plan Number:
|
5__
|
Plan Year:
|
The period beginning on January 1 and ending on December 31.
|
•
|
Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites, all documents governing this Plan and a copy of the latest annual report (Form 5500 series), if any, filed by this Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Executive Benefits Security Administration
|
•
|
Obtain copies of documents governing the operation of this Plan and copies of the latest annual report, if any, upon written request to the Plan Administrator. The Plan Administrator may make a reasonable charge for the copies.
|
•
|
Receive a summary of this Plan’s annual financial report, if any.
|
|
For the Years Ended December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
$
|
82,864
|
|
|
$
|
40,471
|
|
|
$
|
288,915
|
|
|
$
|
342,489
|
|
|
$
|
283,052
|
|
Add:
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
|
38,311
|
|
|
22,697
|
|
|
6,302
|
|
|
7,470
|
|
|
1,119
|
|
|||||
Amortization of capitalized interest
|
1,111
|
|
|
1,037
|
|
|
1,208
|
|
|
190
|
|
|
60
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capitalized interest
|
(1,281
|
)
|
|
(117
|
)
|
|
(6,144
|
)
|
|
(7,178
|
)
|
|
(903
|
)
|
|||||
Earnings as defined
|
$
|
121,005
|
|
|
$
|
64,088
|
|
|
$
|
290,281
|
|
|
$
|
342,971
|
|
|
$
|
283,328
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense and amortization of debt expense
|
$
|
36,869
|
|
|
$
|
22,378
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Capitalized interest
|
1,281
|
|
|
117
|
|
|
6,144
|
|
|
7,178
|
|
|
903
|
|
|||||
Interest factor attributable to rental expense
|
161
|
|
|
202
|
|
|
158
|
|
|
292
|
|
|
216
|
|
|||||
Total Fixed Charges
|
$
|
38,311
|
|
|
$
|
22,697
|
|
|
$
|
6,302
|
|
|
$
|
7,470
|
|
|
$
|
1,119
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
3.16
|
|
|
2.82
|
|
|
46.06
|
|
|
45.91
|
|
|
253.20
|
|
Name of Subsidiary
|
State of Incorporation
|
Rayonier A.M. Products Inc.
|
Delaware
|
Rayonier Performance Fibers, LLC
|
Delaware
|
Dated:
|
January 26, 2016
|
|
/s/ CHARLES E. ADAIR
|
|
|
|
Charles E. Adair
|
Dated:
|
January 21, 2016
|
|
/s/ DE LYLE W. BLOOMQUIST
|
|
|
|
De Lyle W. Bloomquist
|
Dated:
|
January 21, 2016
|
|
/s/ C. DAVID BROWN, II
|
|
|
|
C. David Brown, II
|
Dated:
|
January 18, 2016
|
|
/s/ MARK E. GAUMOND
|
|
|
|
Mark E. Gaumond
|
Dated:
|
January 20, 2016
|
|
/s/ JAMES F. KIRSCH
|
|
|
|
James F. Kirsch
|
Dated:
|
January 22, 2016
|
|
/s/ THOMAS I. MORGAN
|
|
|
|
Thomas I. Morgan
|
Dated:
|
January 23, 2016
|
|
/s/ LISA M. PALUMBO
|
|
|
|
Lisa M. Palumbo
|
Dated:
|
January 28, 2016
|
|
/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.
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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):
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a.
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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
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b.
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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.
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/s/ F
RANK
A. R
UPERTO
|
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Frank A. Ruperto
Chief Financial Officer and
Senior Vice President, Finance and Strategy
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|
Rayonier Advanced Materials Inc.
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1.
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The annual report on Form 10-K of Rayonier Advanced Materials Inc. (the "Company") for the period ended
December 31, 2015
(the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ P
AUL
G. B
OYNTON
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/s/ F
RANK
A. R
UPERTO
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Paul G. Boynton
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Frank A. Ruperto
|
Chairman, President and Chief Executive Officer
Rayonier Advanced Materials Inc.
|
|
Chief Financial Officer and
Senior Vice President, Finance and Strategy
Rayonier Advanced Materials Inc.
|