Delaware | 001-34827 | 27-2301797 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
5619 Denver Tech Center Parkway, Suite 1000, Greenwood Village, CO | 80111 | |||
(Address of principal executive offices) | (Zip Code) |
Item 8.01. | Other Events. |
• | condensed consolidating balance sheets as of September 30, 2012 and as of December 31, 2011; |
• | condensed consolidating statements of operations and comprehensive income for the three and nine months ended September 30, 2012 and 2011; and |
• | condensed consolidating statements of cash flows for the nine months ended September 30, 2012 and 2011. |
• | condensed consolidating balance sheets as of December 31, 2011 and 2010; |
• | condensed consolidating statements of operations and comprehensive income for the years ended December 31, 2011, 2010 and 2009; and |
• | condensed consolidating statements of cash flows for the the years ended December 31, 2011, 2010 and 2009. |
MOLYCORP, INC. | ||
By: | /s/ Michael F. Doolan | |
Name: | Michael F. Doolan | |
Title: | Chief Financial Officer | |
Date: November 21, 2012 |
September 30, 2012 | December 31, 2011 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 436,025 | $ | 418,855 | |||
Trade accounts receivable, net (Note 4) | 88,471 | 70,679 | |||||
Inventory (Note 5) | 281,133 | 111,943 | |||||
Deferred charges (Note 15) | 12,517 | 7,318 | |||||
Deferred tax assets (Note 15) | 17,402 | — | |||||
Income tax receivable | 38,933 | 10,514 | |||||
Prepaid expenses and other current assets | 48,711 | 19,735 | |||||
Total current assets | 923,192 | 639,044 | |||||
Non-current assets: | |||||||
Deposits (Note 6) | 23,287 | 23,286 | |||||
Property, plant and equipment, net (Note 7) | 1,363,444 | 561,628 | |||||
Inventory (Note 5) | 9,601 | 4,362 | |||||
Intangible assets, net (Note 9) | 479,173 | 3,072 | |||||
Investments | 68,006 | 20,000 | |||||
Deferred tax assets (Note 15) | 10,298 | — | |||||
Goodwill (Note 11) | 505,003 | 3,432 | |||||
Other non-current assets | 5,322 | 301 | |||||
Total non-current assets | 2,464,134 | 616,081 | |||||
Total assets | $ | 3,387,326 | $ | 1,255,125 | |||
September 30, 2012 | December 31, 2011 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Trade accounts payable | $ | 230,255 | $ | 161,587 | |||
Accrued expenses (Note 12) | 66,289 | 12,898 | |||||
Income tax payable | 25,601 | — | |||||
Deferred tax liabilities (Note 15) | 128 | 1,356 | |||||
Debt and capital lease obligations (Note 14) | 32,935 | 1,516 | |||||
Other current liabilities | 2,096 | 1,266 | |||||
Total current liabilities | 357,304 | 178,623 | |||||
Non-current liabilities: | |||||||
Asset retirement obligation (Note 13) | 20,727 | 15,145 | |||||
Deferred tax liabilities (Note 15) | 189,894 | 18,899 | |||||
Debt and capital lease obligations (Note 14) | 1,183,528 | 196,545 | |||||
Derivative liability (Note 25) | 8,846 | — | |||||
Pension liabilities | 2,855 | — | |||||
Other non-current liabilities | 3,020 | 683 | |||||
Total non-current liabilities | 1,408,870 | 231,272 | |||||
Total liabilities | $ | 1,766,174 | $ | 409,895 | |||
Commitments and contingencies (Note 19) | |||||||
Stockholders’ equity: | |||||||
Common stock, $0.001 par value; 350,000,000 shares authorized at September 30, 2012 (Note 16) | 138 | 84 | |||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized at September 30, 2012 (Note 16) | 2 | 2 | |||||
Additional paid-in capital | 1,686,226 | 838,547 | |||||
Accumulated other comprehensive loss | (9,646 | ) | (8,481 | ) | |||
(Deficit) retained earnings | (74,898 | ) | 15,078 | ||||
Total Molycorp stockholders’ equity | 1,601,822 | 845,230 | |||||
Noncontrolling interests | 19,330 | — | |||||
Total stockholders’ equity | 1,621,152 | 845,230 | |||||
Total liabilities and stockholders’ equity | $ | 3,387,326 | $ | 1,255,125 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30 | September 30 | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Sales | $ | 205,604 | $ | 138,050 | $ | 394,651 | $ | 263,927 | |||||||
Costs of sales: | |||||||||||||||
Costs excluding depreciation and amortization | (184,128 | ) | (50,602 | ) | (337,769 | ) | (105,670 | ) | |||||||
Depreciation and amortization | (10,612 | ) | (5,056 | ) | (19,065 | ) | (9,588 | ) | |||||||
Gross profit | 10,864 | 82,392 | 37,817 | 148,669 | |||||||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative | (31,468 | ) | (12,182 | ) | (78,721 | ) | (31,465 | ) | |||||||
Corporate development | (1,073 | ) | (573 | ) | (19,379 | ) | (3,889 | ) | |||||||
Depreciation, amortization and accretion | (9,723 | ) | (544 | ) | (12,361 | ) | (1,384 | ) | |||||||
Research and development | (8,929 | ) | (2,148 | ) | (18,628 | ) | (5,165 | ) | |||||||
Operating (loss) income | (40,329 | ) | 66,945 | (91,272 | ) | 106,766 | |||||||||
Other (expense) income: | |||||||||||||||
Other expense | (57 | ) | (117 | ) | (37,615 | ) | (152 | ) | |||||||
Foreign exchange gains (losses), net | 1,910 | (2,000 | ) | 724 | (1,850 | ) | |||||||||
Interest expense, net | (5,269 | ) | (671 | ) | (14,989 | ) | (461 | ) | |||||||
(3,416 | ) | (2,788 | ) | (51,880 | ) | (2,463 | ) | ||||||||
(Loss) income before income taxes and equity earnings | (43,745 | ) | 64,157 | (143,152 | ) | 104,303 | |||||||||
Income tax benefit (expense) | 28,956 | (19,056 | ) | 58,442 | (12,643 | ) | |||||||||
Equity in results of affiliates | (662 | ) | — | (1,146 | ) | — | |||||||||
Net (loss) income | (15,451 | ) | 45,101 | (85,856 | ) | 91,660 | |||||||||
Net (income) loss attributable to noncontrolling interest | (3,440 | ) | 255 | (4,120 | ) | (713 | ) | ||||||||
Net (loss) income attributable to Molycorp stockholders | $ | (18,891 | ) | $ | 45,356 | $ | (89,976 | ) | $ | 90,947 | |||||
Net (loss) income | $ | (15,451 | ) | $ | 45,101 | $ | (85,856 | ) | $ | 91,660 | |||||
Other comprehensive income: | |||||||||||||||
Foreign currency translation adjustments | 526 | (5,564 | ) | (1,165 | ) | (4,240 | ) | ||||||||
Comprehensive (loss) income | $ | (14,925 | ) | $ | 39,537 | $ | (87,021 | ) | $ | 87,420 | |||||
Comprehensive (loss) income attributable to: | |||||||||||||||
Molycorp stockholders | (11,485 | ) | 40,346 | (82,901 | ) | 87,130 | |||||||||
Noncontrolling interest | (3,440 | ) | (809 | ) | (4,120 | ) | 290 | ||||||||
$ | (14,925 | ) | $ | 39,537 | $ | (87,021 | ) | $ | 87,420 | ||||||
(Loss) income per share of common stock (Note 17): | |||||||||||||||
Basic | $ | (0.19 | ) | $ | 0.51 | $ | (0.97 | ) | $ | 1.01 | |||||
Diluted | $ | (0.19 | ) | $ | 0.49 | $ | (0.97 | ) | $ | 1.00 |
Common Stock | Series A Mandatory Convertible Preferred Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total Molycorp Stockholders' Equity | Non controlling interests | Total Stockholders' Equity | ||||||||||||||||||||||||||||||
Shares | $ | Shares | $ | ||||||||||||||||||||||||||||||||||
Balance at December 31, 2011 | 83,896,043 | $ | 84 | 2,070,000 | $ | 2 | $ | 838,547 | $ | (8,481 | ) | $ | 15,078 | $ | 845,230 | $ | — | $ | 845,230 | ||||||||||||||||||
Stock-based compensation (Note 18) | (601 | ) | — | — | — | 3,764 | — | — | 3,764 | — | 3,764 | ||||||||||||||||||||||||||
Issuance of shares for investment from Molymet, net of stock issuance costs (Note 16) | 12,500,000 | 12 | — | — | 390,081 | — | — | 390,093 | — | 390,093 | |||||||||||||||||||||||||||
Issuance of shares for interest in Molycorp Canada (Note 16) | 13,862,286 | 14 | — | — | 284,130 | — | — | 284,144 | 15,761 | 299,905 | |||||||||||||||||||||||||||
Component of convertible debt (Note 14) | — | — | — | — | 71,801 | — | — | 71,801 | — | 71,801 | |||||||||||||||||||||||||||
Deferred taxes on component of convertible debt | — | — | — | — | (27,106 | ) | — | — | (27,106 | ) | — | (27,106 | ) | ||||||||||||||||||||||||
Issuance of shares for conversion of Debentures (Note 14) | 99,723 | — | — | — | 1,421 | — | — | 1,421 | — | 1,421 | |||||||||||||||||||||||||||
Issuance of Primary Shares (Note 16) | 13,800,000 | 14 | — | — | 132,116 | — | — | 132,130 | — | 132,130 | |||||||||||||||||||||||||||
Issuance of Borrowed Shares (Note 16) | 13,800,000 | 14 | — | — | 11 | — | — | 25 | — | 25 | |||||||||||||||||||||||||||
Net (loss) income | — | — | — | — | — | — | (89,976 | ) | (89,976 | ) | 4,120 | (85,856 | ) | ||||||||||||||||||||||||
Preferred dividends | — | — | — | — | (8,539 | ) | — | — | (8,539 | ) | — | (8,539 | ) | ||||||||||||||||||||||||
Distribution to noncontrolling interests | — | — | — | — | — | — | — | — | (551 | ) | (551 | ) | |||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (1,165 | ) | — | (1,165 | ) | — | (1,165 | ) | ||||||||||||||||||||||||
Balance at September 30, 2012 | 137,957,451 | $ | 138 | 2,070,000 | $ | 2 | $ | 1,686,226 | $ | (9,646 | ) | $ | (74,898 | ) | $ | 1,601,822 | $ | 19,330 | $ | 1,621,152 |
Common Stock | Series A Mandatory Convertible Preferred Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total Molycorp Stockholders' Equity | Non controlling interests | Total Stockholders' Equity | ||||||||||||||||||||||||||||||
Shares | $ | Shares | $ | ||||||||||||||||||||||||||||||||||
Balance at December 31, 2010 | 82,291,200 | $ | 82 | — | $ | — | $ | 539,866 | $ | — | $ | (93,435 | ) | $ | 446,513 | $ | — | $ | 446,513 | ||||||||||||||||||
Sale of Series A mandatory convertible preferred stock at $100.00 per share, net of underwriting fees and other offering costs | — | — | 2,070,000 | 2 | 199,640 | — | — | 199,642 | — | 199,642 | |||||||||||||||||||||||||||
Stock-based compensation | 11,570 | — | — | — | 4,042 | — | — | 4,042 | — | 4,042 | |||||||||||||||||||||||||||
Issuance of shares for interest in Molycorp Silmet | 1,593,419 | 2 | — | — | 72,653 | — | — | 72,655 | 8,820 | 81,475 | |||||||||||||||||||||||||||
Component of convertible debt | — | — | — | — | 36,227 | — | — | 36,227 | — | 36,227 | |||||||||||||||||||||||||||
Deferred taxes on component of convertible debt | — | — | — | — | 13,437 | — | — | 13,437 | — | 13,437 | |||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 90,947 | 90,947 | 713 | 91,660 | |||||||||||||||||||||||||||
Preferred dividends | — | — | — | — | — | — | (6,167 | ) | (6,167 | ) | — | (6,167 | ) | ||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (3,817 | ) | — | (3,817 | ) | (423 | ) | (4,240 | ) | |||||||||||||||||||||||
Balance at September 30, 2011 | 83,896,189 | $ | 84 | 2,070,000 | $ | 2 | $ | 865,865 | $ | (3,817 | ) | $ | (8,655 | ) | $ | 853,479 | $ | 9,110 | $ | 862,589 |
Nine months ended | |||||||
September 30, 2012 | September 30, 2011 | ||||||
Cash flows from operating activities: | |||||||
Net (loss) income | $ | (85,856 | ) | $ | 91,660 | ||
Adjustments to reconcile net (loss) income to net cash from operating activities: | |||||||
Depreciation, amortization and accretion | 31,426 | 10,972 | |||||
Deferred income tax benefit | (35,179 | ) | (4,544 | ) | |||
Inventory write-downs | 41,082 | 1,585 | |||||
Release of inventory step-up value | 26,428 | 10,200 | |||||
Stock-based compensation expense | 3,179 | 4,042 | |||||
Amortization of debt discount | 1,257 | 1,037 | |||||
Allowance for doubtful accounts | 2,500 | — | |||||
Other operating adjustments | 56 | 2,461 | |||||
Net change in operating assets and liabilities (Note 22) | (32,081 | ) | (88,689 | ) | |||
Net cash (used in) provided by operating activities | (47,188 | ) | 28,724 | ||||
Cash flows from investing activities: | |||||||
Cash paid in connection with acquisitions, net of cash acquired | (591,011 | ) | (20,021 | ) | |||
Investment in joint venture | (28,130 | ) | — | ||||
Deposits | (516 | ) | 2,946 | ||||
Cash paid to acquire non-marketable securities | — | (20,000 | ) | ||||
Capital expenditures | (644,683 | ) | (160,917 | ) | |||
Other investing activities | 4,953 | 19 | |||||
Net cash used in investing activities | (1,259,387 | ) | (197,973 | ) | |||
Cash flows from financing activities: | |||||||
Capital contributions | 390,225 | — | |||||
Repayments of short-term borrowings—related party | — | (2,343 | ) | ||||
Repayments of debt | (228,431 | ) | (5,447 | ) | |||
Net proceeds from sale of preferred stock | — | 199,642 | |||||
Net proceeds from sale of common stock | 132,471 | — | |||||
Issuance of 10% Senior Secured Notes | 635,373 | — | |||||
Issuance of 6.00% Convertible Notes | 395,712 | — | |||||
Issuance of 3.25% Convertible Notes | — | 223,100 | |||||
Payments of preferred dividends | (8,539 | ) | (6,167 | ) | |||
Proceeds from debt | 9,456 | 6,337 | |||||
Other financing activities | (3,331 | ) | — | ||||
Net cash provided by financing activities | 1,322,936 | 415,122 | |||||
Effect of exchange rate changes on cash | 809 | (348 | ) | ||||
Net change in cash and cash equivalents | 17,170 | 245,525 | |||||
Cash and cash equivalents at beginning of the period | 418,855 | 316,430 | |||||
Cash and cash equivalents at end of period | $ | 436,025 | $ | 561,955 |
(1) | Basis of Presentation |
(2) | Capital Requirements |
(3) | Segment Information |
Three months ended September 30, 2012 (In thousands) | Resources | Chemicals and Oxides | Magnetic Materials and Alloys | Rare Metals | Eliminations(a) | Corporate and other(b) | Total Molycorp, Inc. | |||||||||||||||||||||
Sales: | ||||||||||||||||||||||||||||
External | $ | 17,150 | $ | 87,820 | $ | 74,789 | $ | 25,845 | $ | — | $ | 205,604 | ||||||||||||||||
Intersegment | 3,745 | 11,559 | — | — | (15,304 | ) | — | |||||||||||||||||||||
Total sales | $ | 20,895 | $ | 99,379 | $ | 74,789 | $ | 25,845 | $ | (15,304 | ) | $ | 205,604 | |||||||||||||||
Depreciation, amortization and accretion | $ | (4,035 | ) | $ | (5,685 | ) | $ | (8,857 | ) | $ | (1,715 | ) | $ | — | $ | (43 | ) | $ | (20,335 | ) | ||||||||
Operating (loss) income | $ | (23,966 | ) | $ | 2,149 | $ | 1,419 | $ | (3,774 | ) | $ | 369 | $ | (16,526 | ) | $ | (40,329 | ) | ||||||||||
(Loss) income before income taxes and equity earnings | $ | (25,506 | ) | $ | 1,201 | $ | 1,215 | $ | (3,812 | ) | $ | 369 | $ | (17,212 | ) | $ | (43,745 | ) | ||||||||||
Total assets at September 30, 2012 (d) | $ | 1,686,524 | $ | 565,673 | $ | 536,299 | $ | 79,996 | $ | (161,201 | ) | $ | 178,465 | $ | 2,885,756 | |||||||||||||
Capital expenditures (c) | $ | 187,611 | $ | 2,597 | $ | 1,432 | $ | 2,837 | $ | — | $ | 1,387 | $ | 195,864 |
Nine months ended September 30, 2012 (In thousands) | Resources | Chemicals and Oxides | Magnetic Materials and Alloys | Rare Metals | Eliminations(a) | Corporate and other(b) | Total Molycorp, Inc. | |||||||||||||||||||||
Sales: | ||||||||||||||||||||||||||||
External | $ | 78,162 | $ | 134,158 | $ | 125,277 | $ | 57,054 | $ | — | $ | 394,651 | ||||||||||||||||
Intersegment | 5,977 | 15,496 | — | — | (21,473 | ) | — | |||||||||||||||||||||
Total sales | $ | 84,139 | $ | 149,654 | $ | 125,277 | $ | 57,054 | $ | (21,473 | ) | $ | 394,651 | |||||||||||||||
Depreciation, amortization and accretion | $ | (8,743 | ) | $ | (7,419 | ) | $ | (10,810 | ) | $ | (4,358 | ) | $ | — | $ | (96 | ) | $ | (31,426 | ) | ||||||||
Operating (loss) income | $ | (23,594 | ) | $ | (21,863 | ) | $ | (1,544 | ) | $ | (1,947 | ) | $ | 24,480 | $ | (66,804 | ) | $ | (91,272 | ) | ||||||||
(Loss) income before income taxes and equity earnings | $ | (25,044 | ) | $ | (23,663 | ) | $ | (2,381 | ) | $ | (2,998 | ) | $ | 24,480 | $ | (113,546 | ) | $ | (143,152 | ) | ||||||||
Capital expenditures (c) | $ | 675,836 | $ | 6,615 | $ | 1,612 | $ | 6,955 | $ | — | $ | 1,733 | $ | 692,751 |
(a) | The net elimination in operating results includes cost of sales elimination of $15,673 for three months ended September 30, 2012, and $45,952 for the nine months ended September 30, 2012. The cost of sales elimination consists of the intercompany gross profits as well as elimination of lower of cost or market adjustments related to intercompany inventory. The $161,201 of total assets elimination is comprised of $159,009 of intercompany investments and $2,192 of intercompany accounts receivable and profits in inventory. |
(b) | Corporate loss before income taxes and equity earnings includes business development costs, personnel and related costs, including stock-based compensation expense, accounting and legal fees, occupancy expense, information technology costs and interest expense. Other consists of nominal expenses incurred by the sales office in Tokyo, Japan. Total corporate assets is comprised primarily of cash and cash equivalents. |
(c) | On an accrual basis excluding capitalized interest. |
(d) | Excludes goodwill of $501.6 million arising on the Molycorp Canada acquisition which has not been allocated to its operating segments. |
Three months ended September 30, 2011 (In thousands) | Resources | Chemicals and Oxides | Magnetic Materials and Alloys | Rare Metals | Eliminations(e) | Corporate and other(b) | Total Molycorp, Inc. | |||||||||||||||||||||
Sales: | ||||||||||||||||||||||||||||
External | $ | 94,342 | $ | 15,927 | $ | 14,449 | $ | 13,332 | $ | — | $ | 138,050 | ||||||||||||||||
Intersegment | 30,535 | 6,652 | — | — | (37,187 | ) | — | |||||||||||||||||||||
Total sales | $ | 124,877 | $ | 22,579 | $ | 14,449 | $ | 13,332 | $ | (37,187 | ) | $ | 138,050 | |||||||||||||||
Depreciation, amortization and accretion | $ | (2,715 | ) | $ | (1,627 | ) | $ | 128 | $ | (1,386 | ) | $ | — | $ | — | $ | (5,600 | ) | ||||||||||
Operating income (loss) | $ | 101,727 | $ | 2,682 | $ | 610 | $ | (3,148 | ) | $ | (22,329 | ) | $ | (12,597 | ) | $ | 66,945 | |||||||||||
Income (loss) before income taxes | $ | 101,606 | $ | 1,559 | $ | 614 | $ | (4,121 | ) | $ | (22,329 | ) | $ | (13,172 | ) | $ | 64,157 | |||||||||||
Total assets at September 30, 2011 | $ | 632,098 | $ | 52,955 | $ | 33,032 | $ | 69,361 | $ | (154,710 | ) | $ | 552,706 | $ | 1,185,442 | |||||||||||||
Capital expenditures (c) | $ | 106,162 | $ | 2,300 | $ | — | $ | — | $ | — | $ | — | $ | 108,462 |
(e) | The total assets elimination of $154,710 is comprised of $102,357 of intercompany investments and $52,353 of intercompany accounts receivable and profits in inventory. |
Nine months ended September 30, 2011 (In thousands) | Resources | Chemicals and Oxides | Magnetic Materials and Alloys | Rare Metals | Eliminations | Corporate and other(b) | Total Molycorp, Inc. | |||||||||||||||||||||
Sales: | ||||||||||||||||||||||||||||
External | $ | 180,951 | $ | 31,419 | $ | 24,699 | $ | 26,858 | $ | — | $ | 263,927 | ||||||||||||||||
Intersegment | 46,482 | 10,290 | — | — | (56,772 | ) | — | |||||||||||||||||||||
Total sales | $ | 227,433 | $ | 41,709 | $ | 24,699 | $ | 26,858 | $ | (56,772 | ) | $ | 263,927 | |||||||||||||||
Depreciation, amortization and accretion | $ | (7,538 | ) | $ | (1,707 | ) | $ | (271 | ) | $ | (1,456 | ) | $ | — | $ | — | $ | (10,972 | ) | |||||||||
Operating income (loss) | $ | 163,392 | $ | 10,333 | $ | (586 | ) | $ | (175 | ) | $ | (31,514 | ) | $ | (34,684 | ) | $ | 106,766 | ||||||||||
Income (loss) before income taxes | $ | 163,234 | $ | 9,232 | $ | (580 | ) | $ | (1,124 | ) | $ | (31,514 | ) | $ | (34,945 | ) | $ | 104,303 | ||||||||||
Capital expenditures (c) | $ | 218,128 | $ | 4,672 | $ | — | $ | — | $ | — | $ | — | $ | 222,800 |
(4) | Trade Accounts Receivable |
(5) | Inventory |
September 30, 2012 | December 31, 2011 | ||||||
Current: | |||||||
Concentrate stockpiles | $ | 5,666 | $ | 3,704 | |||
Raw materials | 93,909 | 44,770 | |||||
Work in process | 60,754 | 16,602 | |||||
Finished goods | 114,671 | 45,045 | |||||
Materials and supplies | 6,133 | 1,822 | |||||
Total current | $ | 281,133 | $ | 111,943 | |||
Long-term: | |||||||
Concentrate stockpiles | $ | 1,322 | $ | 1,144 | |||
Raw materials | 8,279 | 3,186 | |||||
Finished goods | — | 32 | |||||
Total long-term | $ | 9,601 | $ | 4,362 |
(6) | Deposits |
(7) | Property, Plant and Equipment, net |
September 30, 2012 | December 31, 2011 | ||||||
Land | $ | 12,292 | $ | 11,059 | |||
Land improvements | 63,268 | 15,748 | |||||
Buildings and improvements | 112,182 | 23,677 | |||||
Plant and equipment | 157,970 | 68,441 | |||||
Vehicles | 2,526 | 1,235 | |||||
Computer software | 5,067 | 3,002 | |||||
Furniture and fixtures | 733 | 464 | |||||
Construction in progress (a) | 1,006,632 | 436,547 | |||||
Capital Leases | 15,658 | — | |||||
Mineral properties | 24,399 | 24,692 | |||||
Property, plant and equipment at cost | 1,400,727 | 584,865 | |||||
Less accumulated depreciation | (37,283 | ) | (23,237 | ) | |||
Property, plant and equipment, net | $ | 1,363,444 | $ | 561,628 |
(a) | Represents costs incurred for Project Phoenix Phase 1 and Project Phoenix Phase 2 and all other capital projects. See Note 2. |
(8) | Mineral Properties and Development Costs |
(9) | Intangible Assets |
September 30, 2012 | December 31, 2011 | ||||||
Customer relationships | $ | 350,925 | $ | 2,153 | |||
Rare earth quotas | 80,300 | — | |||||
Patents | 39,753 | — | |||||
Trade name | 16,586 | 786 | |||||
Land use rights | 3,420 | — | |||||
Other | 4,419 | 516 | |||||
Gross carrying amount | 495,403 | 3,455 | |||||
Less accumulated amortization | (16,230 | ) | (383 | ) | |||
Net carrying amount | $ | 479,173 | $ | 3,072 |
(10) | Investments |
(11) | Acquisitions |
June 11, 2012 | |||
Purchase consideration: | |||
Cash consideration | $ | 908,181 | |
Fair value of Molycorp common stock and Exchangeable Shares issued | 284,144 | ||
Total purchase consideration | $ | 1,192,325 | |
Estimated fair values of the assets and liabilities acquired: | |||
Cash and cash equivalents | $ | 317,169 | |
Accounts receivable | 101,470 | ||
Inventory | 250,989 | ||
Prepaid expenses and other current assets | 26,893 | ||
Property, plant and equipment | 70,391 | ||
Investments | 21,019 | ||
Intangibles | 491,786 | ||
Goodwill | 501,571 | ||
Other non-current assets | 22,859 | ||
Accounts payable and accrued expenses | (138,576 | ) | |
Debt - current | (255,056 | ) | |
Other current liabilities | (29,939 | ) | |
Deferred tax liabilities | (158,177 | ) | |
Long-term debt | (281 | ) | |
Other non-current liabilities | (14,032 | ) | |
Non-controlling interests | (15,761 | ) | |
Total purchase consideration | $ | 1,192,325 |
(In thousands, except per share amounts) | Sales | Net Income (Loss) | Net Income (Loss) Attributable To Molycorp | EPS Basic | ||||||||||||
Actual July 1, 2012 to September 30, 2012 (acquiree) | $ | 162,764 | $ | 1,118 | $ | (2,322 | ) | $ | (0.02 | ) | ||||||
Actual June 11, 2012 to September 30, 2012 (acquiree) | $ | 206,397 | $ | 1,165 | $ | (2,955 | ) | $ | (0.03 | ) | ||||||
Unaudited pro forma January 1, 2012 to September 30, 2012 (combined entity) | $ | 729,469 | $ | (74,229 | ) | $ | (82,056 | ) | $ | (0.77 | ) | |||||
Unaudited pro forma July 1, 2011 to September 30, 2011 (combined entity) | $ | 385,889 | $ | 108,386 | $ | 105,947 | $ | 0.94 | ||||||||
Unaudited pro forma January 1, 2011 to September 30, 2011 (combined entity) | $ | 860,707 | $ | 200,951 | $ | 192,300 | $ | 1.69 |
(In thousands) | Three Months Ended September 30, 2012 | Nine Months Ended September 30, 2012 | |||||
Corporate development | |||||||
Legal, accounting and advisory fees | $ | 465 | $ | 16,498 | |||
Other expenses: | |||||||
Contingent forward contract loss | $ | — | $ | 37,589 | |||
Interest expense: | |||||||
Bridge loan fee | $ | — | $ | 7,937 |
Effective acquisition date for financial reporting purposes: | Molycorp Silmet April 1, 2011 | MMA April 15, 2011 | ||||||
Purchase consideration: | ||||||||
Cash consideration | $ | 9,021 | $ | 17,500 | ||||
Fair value of Molycorp common stock issued | 72,653 | — | ||||||
Total purchase consideration | $ | 81,674 | $ | 17,500 | ||||
Fair values of the assets and liabilities acquired: | ||||||||
Cash | $ | 105 | $ | 6,395 | ||||
Accounts receivable and other current assets | 8,626 | 5,474 | ||||||
Inventory | 37,404 | 11,327 | ||||||
Property, plant and equipment, net | 63,393 | 4,512 | ||||||
Intangible assets subject to amortization | 2,669 | — | ||||||
Goodwill | 1,455 | 1,977 | ||||||
Liabilities | (19,974 | ) | (8,989 | ) | ||||
Deferred tax liabilities | — | (3,196 | ) | |||||
Long-term debt | (3,184 | ) | — | |||||
Noncontrolling interest | (8,820 | ) | — | |||||
Total purchase consideration | $ | 81,674 | $ | 17,500 |
(In thousands, except per share amounts) | Sales | Net Income | Net Income Attributable To Molycorp | EPS Basic | ||||||||||||
Unaudited pro forma January 1, 2011 to September 30, 2011 (combined entity) | $ | 297,400 | $ | 104,170 | $ | 103,457 | $ | 1.17 |
(12) | Accrued Expenses |
September 30, 2012 | December 31, 2011 | ||||||
Defined contribution plan | $ | 1,928 | $ | 1,088 | |||
Professional fees | 4,456 | — | |||||
Accrued payroll and related benefits | 8,246 | 3,024 | |||||
Sales and use tax | 9,412 | 1,367 | |||||
Bonus accrual | 3,683 | 4,845 | |||||
Interest payable | 27,733 | 345 | |||||
Advance from customer | 2,898 | — | |||||
Other accrued expenses | 7,933 | 2,229 | |||||
Total accrued expenses | $ | 66,289 | $ | 12,898 |
(13) | Asset Retirement Obligation |
Nine Months Ended September 30, 2012 | Year Ended December 31, 2011 | ||||||
Balance at beginning of period | $ | 15,541 | $ | 12,471 | |||
Obligations settled | (1,487 | ) | (1,030 | ) | |||
Accretion expense | 897 | 955 | |||||
Revisions in estimated cash flows | 7,872 | 2,508 | |||||
Gain on settlement | — | 637 | |||||
Balance at end of period | $ | 22,823 | $ | 15,541 |
(14) | Debt and Capital Lease Obligations |
September 30, 2012 | |||||||
Current | Non-Current | ||||||
10% Senior Secured Notes, net of discount, due June 2020 | $ | — | $ | 635,802 | |||
3.25% Convertible Notes, net of discount, due June 2016 | — | 196,699 | |||||
5.00% Debentures, net of discount | — | 2,774 | |||||
6.00% Convertible Notes, net of discount, due June 2017 | — | 328,494 | |||||
Bank loans with a weighted average rate of 4.00% due November 2012 - September 2017 | 32,693 | 4,435 | |||||
Total debt | 32,693 | 1,168,204 | |||||
Capital lease obligations | 242 | 15,324 | |||||
Total debt and capital lease obligations | $ | 32,935 | $ | 1,183,528 |
December 31, 2011 | |||||||
Current | Non-Current | ||||||
3.25% Convertible Notes, net of discount, due June 2016 | $ | — | $ | 190,877 | |||
Bank loans 2.69% - 3.88% due February 2012 - September 2017 | 1,516 | 5,668 | |||||
Total debt | $ | 1,516 | $ | 196,545 |
(15) | Income Taxes |
(16) | Stockholders’ Equity |
(17) | (Loss) Earnings per Share |
Three Months Ended | ||||||||
(In thousands, except share and per share amounts) | September 30, 2012 | September 30, 2011 | ||||||
Net (loss) income attributable to Molycorp stockholders | $ | (18,891 | ) | $ | 45,356 | |||
Dividends on Convertible Preferred Stock | (2,846 | ) | (2,846 | ) | ||||
(Loss) income attributable to common stockholders | (21,737 | ) | 42,510 | |||||
Weighted average common shares outstanding—basic | 117,086,022 | 83,847,119 | ||||||
Basic (loss) earnings per share | $ | (0.19 | ) | $ | 0.51 | |||
(Loss) income attributable to common stockholders | (21,737 | ) | 42,510 | |||||
Effect of dilutive 3.25% Convertible Notes | — | 404 | ||||||
(Loss) income attributable to common stockholders adjusted for effect of dilution | (21,737 | ) | 42,914 | |||||
Weighted average common shares outstanding—diluted | 117,086,022 | 87,069,256 | ||||||
Diluted (loss) earnings per share | $ | (0.19 | ) | $ | 0.49 |
Nine Months Ended | ||||||||
(In thousands, except share and per share amounts) | September 30, 2012 | September 30, 2011 | ||||||
Net (loss) income attributable to Molycorp stockholders | $ | (89,976 | ) | $ | 90,947 | |||
Dividends on Convertible Preferred Stock | (8,539 | ) | (7,116 | ) | ||||
(Loss) income attributable to common stockholders | (98,515 | ) | 83,831 | |||||
Weighted average common shares outstanding—basic | 101,147,638 | 83,321,816 | ||||||
Basic (loss) earnings per share | $ | (0.97 | ) | $ | 1.01 | |||
(Loss) income attributable to common stockholders | (98,515 | ) | 83,831 | |||||
Effect of dilutive 3.25% Convertible Notes | — | 413 | ||||||
(Loss) income attributable to common stockholders adjusted for effect of dilution | (98,515 | ) | 84,244 | |||||
Weighted average common shares outstanding—diluted | 101,147,638 | 84,596,676 | ||||||
Diluted (loss) earnings per share | $ | (0.97 | ) | $ | 1.00 |
(18) | Stock-Based Compensation |
PBRSUs | Number of Shares | Weighted Average Grant-Date Fair Value | |||||
Unvested at January 1, 2012 | — | — | |||||
Granted | 46,036 | $ | 30.30 | ||||
Forfeited | (460 | ) | 30.33 | ||||
Vested | — | — | |||||
Unvested at September 30, 2012 | 45,576 | $ | 30.30 |
RSUs | Number of Shares | Weighted Average Grant-Date Fair Value | |||||
Unvested at January 1, 2012 | 78,544 | $ | 56.55 | ||||
Granted | 235,474 | $ | 24.36 | ||||
Forfeited | (4,135 | ) | 39.26 | ||||
Vested* | (24,764 | ) | $ | 26.67 | |||
Unvested at September 30, 2012 | 285,119 | $ | 32.81 |
* | Represents deferral and conversion of a portion of fees payable to certain non-employee directors of the Company, and deferral and conversion of a portion of the 2011 annual cash bonuses paid to certain executive officers and other employees of the Company. |
RSAs | Number of Shares | Weighted Average Grant-Date Fair Value | |||||
Unvested at January 1, 2012 | 48,924 | $ | 40.20 | ||||
Granted | — | — | |||||
Forfeited | (601 | ) | $ | 48.87 | |||
Vested | — | — | |||||
Unvested at September 30, 2012 | 48,323 | $ | 40.09 |
September 30, 2012 | |||||||
Stock Options | Number of Shares | Weighted Average Exercise Price | |||||
Outstanding at January 1, 2012 | 52,819 | $ | 48.87 | ||||
Granted | — | — | |||||
Exercised | — | — | |||||
Forfeited and expired | — | — | |||||
Outstanding at September 30, 2012 | 52,819 | $ | 48.87 | ||||
Options exercisable at September 30, 2012 | 17,606 | $ | 48.87 |
(19) | Commitments and Contingencies |
(a) | Future Operating Lease Commitments |
(In thousands) | Total | Less Than 1 Year | 1 - 3 Years | 4 - 5 Years | More Than 5 Years | ||||||||||||||
Operating lease obligations | $ | 9,826 | $ | 1,417 | $ | 5,929 | $ | 1,110 | $ | 1,370 |
(b) | Purchase Commitments |
(In thousands) | Total | Less Than 1 Year | 1 - 3 Years | 4 - 5 Years | More Than 5 Years | ||||||||||||||
Purchase obligations and other commitment | $ | 287,819 | $ | 284,534 | $ | 1,798 | $ | 538 | $ | 949 |
(c) | Potential Environmental Obligations |
(d) | Labor Contract |
(e) | Reclamation Surety Bonds |
(f) | Purported Class Action, Derivative Lawsuits and Investigation |
(20) | Concentrations |
(a) | Products |
Three Months Ended September 30, 2012 | Nine Months Ended September 30, 2012 | |||
Didymium, Neodymium and Praseodymium products | nm | 10 | % |
Three Months Ended September 30, 2011 | Nine Months Ended September 30, 2011 | ||||
Lanthanum products | 29 | % | 25 | % | |
Cerium products | nm | 12 | % | ||
Didymium, Neodymium and Praseodymium products | 36 | % | 29 | % |
Three Months Ended September 30, 2012 | Nine Months Ended September 30, 2012 | |||
Cerium products | 16 | % | 11 | % |
Didymium products | 12 | % | nm |
(b) | Customers |
(21) | Related-Party Transactions |
(22) | Net Change in Operating Assets and Liabilities |
Nine Months Ended | |||||||
(In thousands) | September 30, 2012 | September 30, 2011 | |||||
Decrease (increase) in operating assets: | |||||||
Accounts receivable | $ | 88,997 | $ | (42,250 | ) | ||
Inventory | 13,202 | (39,408 | ) | ||||
Prepaid expenses and other assets | 7,174 | (1,596 | ) | ||||
Increase (decrease) in operating liabilities: | |||||||
Accounts payable | (43,223 | ) | (7,099 | ) | |||
Income tax payable | (39,483 | ) | — | ||||
Interest payable | (9,704 | ) | — | ||||
Asset retirement obligation | — | (581 | ) | ||||
Accrued expenses | (49,044 | ) | 2,245 | ||||
$ | (32,081 | ) | $ | (88,689 | ) |
(23) | Supplemental Cash Flow Information |
Nine Months Ended | |||||||
(In thousands) | September 30, 2012 | September 30, 2011 | |||||
Non-cash financing activities and investing activities: | |||||||
Change in accrued capital expenditures | $ | 48,182 | $ | 61,783 | |||
Fixed assets additions under capital lease | $ | 15,658 | $ | — |
(24) | Research and Development |
(25) | Derivative Instruments |
(26) | Pension |
Pension Plan and PBP | For the period from June 12, 2012 to September 30, 2012 | |||
Components of net periodic benefit cost: | ||||
Service Cost | $ | — | ||
Interest cost | 90 | |||
Expected return on assets | (67 | ) | ||
Amortization of transition obligation/(asset) | — | |||
Amortization of prior service cost | (1 | ) | ||
Amortization of actuarial loss | 55 | |||
Net periodic benefit cost | $ | 77 |
(27) | Recent Accounting Pronouncements |
(28) | Subsequent Events |
(29) | Subsidiary Guarantor Financial Information |
(1) | any sale, exchange, transfer or other disposition of a majority of the capital stock of (including by way of consolidation or merger) such guarantor by Molycorp or any restricted subsidiary to any person or persons, as a result of which such guarantor is no longer a direct or indirect subsidiary of Molycorp; |
(2) | any sale, exchange, transfer or other disposition of all or substantially all assets of such guarantor that results in such guarantor having no assets; |
(3) | the designation by Molycorp of such guarantor as an unrestricted subsidiary; or |
(4) | defeasance or discharge of the Senior Notes; |
At September 30, 2012 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Condensed Consolidating Balance Sheets | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 175,400 | $ | 3,830 | $ | 256,795 | $ | — | $ | 436,025 | |||||||||
Trade accounts receivable, net | — | 13,644 | 74,827 | — | 88,471 | ||||||||||||||
Inventory | — | 48,335 | 232,798 | — | 281,133 | ||||||||||||||
Deferred charges | — | 4,589 | 7,928 | — | 12,517 | ||||||||||||||
Deferred tax assets | — | 2,049 | 15,353 | — | 17,402 | ||||||||||||||
Income tax receivable | — | 38,933 | — | — | 38,933 | ||||||||||||||
Prepaid expenses and other current assets | — | 20,867 | 27,844 | — | 48,711 | ||||||||||||||
Total current assets | 175,400 | 132,247 | 615,545 | — | 923,192 | ||||||||||||||
Non-current assets: | |||||||||||||||||||
Deposits | 1,752 | 21,362 | 173 | — | 23,287 | ||||||||||||||
Property, plant and equipment, net | — | 1,223,557 | 139,887 | — | 1,363,444 | ||||||||||||||
Inventory | — | 9,601 | — | — | 9,601 | ||||||||||||||
Intangible assets, net | — | 524 | 478,649 | — | 479,173 | ||||||||||||||
Investments | — | 46,900 | 21,106 | — | 68,006 | ||||||||||||||
Deferred tax assets | — | 21,002 | (10,704 | ) | — | 10,298 | |||||||||||||
Goodwill | — | 1,977 | 503,026 | — | 505,003 | ||||||||||||||
Investments in consolidated subsidiaries | 932,310 | 95,131 | — | (1,027,441 | ) | — | |||||||||||||
Intercompany accounts receivable | 1,680,993 | 156,646 | — | (1,837,639 | ) | — |
Other non-current assets | — | 817 | 4,505 | — | 5,322 | ||||||||||||||
Total non-current assets | 2,615,055 | 1,577,517 | 1,136,642 | (2,865,080 | ) | 2,464,134 | |||||||||||||
Total assets | $ | 2,790,455 | $ | 1,709,764 | $ | 1,752,187 | $ | (2,865,080 | ) | $ | 3,387,326 | ||||||||
Current liabilities: | |||||||||||||||||||
Trade accounts payable | $ | — | $ | 185,097 | $ | 45,158 | $ | — | $ | 230,255 | |||||||||
Accrued expenses | 27,733 | 8,030 | 30,526 | — | 66,289 | ||||||||||||||
Income tax payable | — | 63 | 25,538 | — | 25,601 | ||||||||||||||
Deferred tax liabilities | — | — | 128 | — | 128 | ||||||||||||||
Debt and capital lease obligations | — | 242 | 32,693 | — | 32,935 | ||||||||||||||
Other current liabilities | — | 2,096 | — | — | 2,096 | ||||||||||||||
Total current liabilities | 27,733 | 195,528 | 134,043 | — | 357,304 | ||||||||||||||
Non-current liabilities: | |||||||||||||||||||
Asset retirement obligation | — | 20,727 | — | — | 20,727 | ||||||||||||||
Deferred tax liabilities | (94 | ) | 43,997 | 145,991 | — | 189,894 | |||||||||||||
Debt and capital lease obligations | 1,160,994 | 15,324 | 7,210 | — | 1,183,528 | ||||||||||||||
Derivative liability | — | — | 8,846 | — | 8,846 | ||||||||||||||
Pension liabilities | — | — | 2,855 | — | 2,855 | ||||||||||||||
Intercompany accounts payable | — | 1,351,099 | 486,540 | (1,837,639 | ) | — | |||||||||||||
Other non-current liabilities | — | 1,061 | 1,959 | — | 3,020 | ||||||||||||||
Total non-current liabilities | 1,160,900 | 1,432,208 | 653,401 | (1,837,639 | ) | 1,408,870 | |||||||||||||
Total liabilities | $ | 1,188,633 | $ | 1,627,736 | $ | 787,444 | $ | (1,837,639 | ) | $ | 1,766,174 | ||||||||
Stockholders’ equity: | |||||||||||||||||||
Common stock | 138 | — | — | — | 138 | ||||||||||||||
Preferred stock | 2 | — | — | — | 2 | ||||||||||||||
Additional paid-in capital | 1,686,226 | 149,857 | 947,376 | (1,097,233 | ) | 1,686,226 | |||||||||||||
Accumulated other comprehensive loss | (9,646 | ) | — | (9,646 | ) | 9,646 | (9,646 | ) | |||||||||||
(Deficit) retained earnings | (74,898 | ) | (67,829 | ) | 7,683 | 60,146 | (74,898 | ) | |||||||||||
Total Molycorp stockholders’ equity | 1,601,822 | 82,028 | 945,413 | (1,027,441 | ) | 1,601,822 | |||||||||||||
Noncontrolling interests | — | — | 19,330 | — | 19,330 | ||||||||||||||
Total stockholders’ equity | 1,601,822 | 82,028 | 964,743 | (1,027,441 | ) | 1,621,152 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 2,790,455 | $ | 1,709,764 | $ | 1,752,187 | $ | (2,865,080 | ) | $ | 3,387,326 |
At December 31, 2011 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Condensed Consolidating Balance Sheets | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 407,446 | $ | 10,758 | $ | 651 | $ | — | $ | 418,855 | |||||||||
Trade accounts receivable, net | — | 58,619 | 12,060 | — | 70,679 | ||||||||||||||
Inventory | — | 52,246 | 59,697 | — | 111,943 | ||||||||||||||
Deferred charges | — | 7,318 | — | — | 7,318 | ||||||||||||||
Prepaid income taxes | — | 10,514 | — | — | 10,514 |
Prepaid expenses and other current assets | — | 17,845 | 1,890 | — | 19,735 | ||||||||||||||
Total current assets | 407,446 | 157,300 | 74,298 | — | 639,044 | ||||||||||||||
Non-current assets: | |||||||||||||||||||
Deposits | 1,751 | 21,362 | 173 | — | 23,286 | ||||||||||||||
Property, plant and equipment, net | — | 500,612 | 61,016 | — | 561,628 | ||||||||||||||
Inventory | — | 4,362 | — | — | 4,362 | ||||||||||||||
Intangible assets, net | — | 573 | 2,499 | — | 3,072 | ||||||||||||||
Investments | — | 20,000 | — | — | 20,000 | ||||||||||||||
Goodwill | — | 1,977 | 1,455 | — | 3,432 | ||||||||||||||
Investments in consolidated subsidiaries | 150,510 | 118,879 | — | (269,389 | ) | — | |||||||||||||
Intercompany accounts receivable | 476,711 | 25,870 | — | (502,581 | ) | — | |||||||||||||
Other non-current assets | — | 301 | — | — | 301 | ||||||||||||||
Total non-current assets | 628,972 | 693,936 | 65,143 | (771,970 | ) | 616,081 | |||||||||||||
Total assets | $ | 1,036,418 | $ | 851,236 | $ | 139,441 | $ | (771,970 | ) | $ | 1,255,125 | ||||||||
Current liabilities: | |||||||||||||||||||
Trade accounts payable | $ | — | $ | 139,408 | $ | 22,179 | $ | — | $ | 161,587 | |||||||||
Accrued expenses | 311 | 11,072 | 1,515 | — | 12,898 | ||||||||||||||
Deferred tax liabilities | — | 1,356 | — | — | 1,356 | ||||||||||||||
Debt | — | — | 1,516 | — | 1,516 | ||||||||||||||
Short-term borrowings-related party | — | 870 | — | — | 870 | ||||||||||||||
Current portion of asset retirement obligation | — | 396 | — | — | 396 | ||||||||||||||
Total current liabilities | 311 | 153,102 | 25,210 | — | 178,623 | ||||||||||||||
Non-current liabilities: | |||||||||||||||||||
Asset retirement obligation | — | 15,145 | — | — | 15,145 | ||||||||||||||
Deferred tax liabilities | — | 18,899 | — | — | 18,899 | ||||||||||||||
Debt | 190,877 | — | 5,668 | — | 196,545 | ||||||||||||||
Intercompany accounts payable | — | 489,180 | 13,401 | (502,581 | ) | — | |||||||||||||
Other non-current liabilities | — | 683 | — | — | 683 | ||||||||||||||
Total non-current liabilities | 190,877 | 523,907 | 19,069 | (502,581 | ) | 231,272 | |||||||||||||
Total liabilities | $ | 191,188 | $ | 677,009 | $ | 44,279 | $ | (502,581 | ) | $ | 409,895 | ||||||||
Stockholders’ equity: | |||||||||||||||||||
Common stock | 84 | — | — | — | 84 | ||||||||||||||
Preferred stock | 2 | — | — | — | 2 | ||||||||||||||
Additional paid-in capital | 838,547 | 149,857 | 91,158 | (241,015 | ) | 838,547 | |||||||||||||
Accumulated other comprehensive loss | (8,481 | ) | — | (8,481 | ) | 8,481 | (8,481 | ) | |||||||||||
Retained earnings | 15,078 | 24,370 | 12,485 | (36,855 | ) | 15,078 | |||||||||||||
Total stockholders’ equity | 845,230 | 174,227 | 95,162 | (269,389 | ) | 845,230 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 1,036,418 | $ | 851,236 | $ | 139,441 | $ | (771,970 | ) | $ | 1,255,125 |
Three Months Ended September 30, 2012 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Condensed Consolidating Statements of Operations and Comprehensive Income | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Sales | $ | — | $ | 26,103 | $ | 192,060 | $ | (12,559 | ) | $ | 205,604 | ||||||||
Costs of sales: | |||||||||||||||||||
Costs excluding depreciation and amortization | — | (38,919 | ) | (157,768 | ) | 12,559 | (184,128 | ) | |||||||||||
Depreciation and amortization | — | (3,375 | ) | (7,237 | ) | — | (10,612 | ) | |||||||||||
Gross (loss) profit | — | (16,191 | ) | 27,055 | — | 10,864 | |||||||||||||
Operating expenses: | |||||||||||||||||||
Selling, general and administrative | (29 | ) | (20,147 | ) | (11,292 | ) | — | (31,468 | ) | ||||||||||
Corporate development | — | (1,073 | ) | — | — | (1,073 | ) | ||||||||||||
Depreciation, amortization and accretion | — | (742 | ) | (8,981 | ) | — | (9,723 | ) | |||||||||||
Research and development | — | (2,497 | ) | (6,432 | ) | — | (8,929 | ) | |||||||||||
Operating (loss) income | (29 | ) | (40,650 | ) | 350 | — | (40,329 | ) | |||||||||||
Other (expense) income: | |||||||||||||||||||
Other (expense) income | — | (68 | ) | 11 | — | (57 | ) | ||||||||||||
Foreign exchange (losses) gains, net | — | (3 | ) | 1,913 | — | 1,910 | |||||||||||||
Interest expense, net | (2,920 | ) | (1,076 | ) | (1,273 | ) | — | (5,269 | ) | ||||||||||
Interest income (expense) from intercompany notes | 453 | (324 | ) | (129 | ) | — | — | ||||||||||||
Equity earnings from consolidated subsidiaries | (16,395 | ) | 4,090 | — | 12,305 | — | |||||||||||||
(18,862 | ) | 2,619 | 522 | 12,305 | (3,416 | ) | |||||||||||||
Loss before income taxes and equity earnings | (18,891 | ) | (38,031 | ) | 872 | 12,305 | (43,745 | ) | |||||||||||
Income tax (expense) benefit | — | 23,537 | 5,419 | — | 28,956 | ||||||||||||||
Equity in results of affiliates | — | (682 | ) | 20 | — | (662 | ) | ||||||||||||
Net (loss) income | (18,891 | ) | (15,176 | ) | 6,311 | 12,305 | (15,451 | ) | |||||||||||
Net income attributable to noncontrolling interest | — | — | (3,440 | ) | — | (3,440 | ) | ||||||||||||
Net (loss) income attributable to Molycorp stockholders | $ | (18,891 | ) | $ | (15,176 | ) | $ | 2,871 | $ | 12,305 | $ | (18,891 | ) | ||||||
Net (loss) income | $ | (18,891 | ) | $ | (15,176 | ) | $ | 6,311 | $ | 12,305 | $ | (15,451 | ) | ||||||
Other comprehensive income: | |||||||||||||||||||
Foreign currency translation adjustments | — | — | 526 | — | 526 | ||||||||||||||
Comprehensive (loss) income | $ | (18,891 | ) | $ | (15,176 | ) | $ | 6,837 | $ | 12,305 | $ | (14,925 | ) | ||||||
Comprehensive (loss) income attributable to: | |||||||||||||||||||
Molycorp stockholders | (18,891 | ) | (15,176 | ) | 10,277 | 12,305 | (11,485 | ) | |||||||||||
Noncontrolling interest | — | — | (3,440 | ) | — | (3,440 | ) | ||||||||||||
$ | (18,891 | ) | $ | (15,176 | ) | $ | 6,837 | $ | 12,305 | $ | (14,925 | ) |
Nine Months Ended September 30, 2012 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Condensed Consolidating Statements of Operations and Comprehensive Income | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Sales | $ | — | $ | 121,172 | $ | 293,794 | $ | (20,315 | ) | $ | 394,651 | ||||||||
Costs of sales: | |||||||||||||||||||
Costs excluding depreciation and amortization | — | (105,185 | ) | (252,899 | ) | 20,315 | (337,769 | ) | |||||||||||
Depreciation and amortization | — | (7,539 | ) | (11,526 | ) | — | (19,065 | ) | |||||||||||
Gross profit | — | 8,448 | 29,369 | — | 37,817 | ||||||||||||||
Operating expenses: | |||||||||||||||||||
Selling, general and administrative | 45 | (62,746 | ) | (16,020 | ) | — | (78,721 | ) | |||||||||||
Corporate development | (46 | ) | (19,333 | ) | — | — | (19,379 | ) | |||||||||||
Depreciation, amortization and accretion | — | (1,441 | ) | (10,920 | ) | — | (12,361 | ) | |||||||||||
Research and development | — | (10,584 | ) | (8,044 | ) | — | (18,628 | ) | |||||||||||
Operating (loss) income | (1 | ) | (85,656 | ) | (5,615 | ) | — | (91,272 | ) | ||||||||||
Other (expense) income: | |||||||||||||||||||
Other expense | — | (37,562 | ) | (53 | ) | — | (37,615 | ) | |||||||||||
Foreign exchange (losses) gains, net | — | (5 | ) | 729 | — | 724 | |||||||||||||
Interest expense, net | (12,602 | ) | (194 | ) | (2,193 | ) | — | (14,989 | ) | ||||||||||
Interest income (expense) from intercompany notes | 1,326 | (967 | ) | (359 | ) | — | — | ||||||||||||
Equity earnings from consolidated subsidiaries | (78,699 | ) | (18,302 | ) | — | 97,001 | — | ||||||||||||
(89,975 | ) | (57,030 | ) | (1,876 | ) | 97,001 | (51,880 | ) | |||||||||||
Loss before income taxes and equity earnings | (89,976 | ) | (142,686 | ) | (7,491 | ) | 97,001 | (143,152 | ) | ||||||||||
Income tax benefit | — | 51,962 | 6,480 | — | 58,442 | ||||||||||||||
Equity in results of affiliates | — | (1,475 | ) | 329 | — | (1,146 | ) | ||||||||||||
Net loss | (89,976 | ) | (92,199 | ) | (682 | ) | 97,001 | (85,856 | ) | ||||||||||
Net income attributable to noncontrolling interest | — | — | (4,120 | ) | — | (4,120 | ) | ||||||||||||
Net loss attributable to Molycorp stockholders | $ | (89,976 | ) | $ | (92,199 | ) | $ | (4,802 | ) | $ | 97,001 | $ | (89,976 | ) | |||||
Net loss | $ | (89,976 | ) | $ | (92,199 | ) | $ | (682 | ) | $ | 97,001 | $ | (85,856 | ) | |||||
Other comprehensive income: | |||||||||||||||||||
Foreign currency translation adjustments | — | — | (1,165 | ) | — | (1,165 | ) | ||||||||||||
Comprehensive loss | $ | (89,976 | ) | $ | (92,199 | ) | $ | (1,847 | ) | $ | 97,001 | $ | (87,021 | ) | |||||
Comprehensive loss attributable to: | |||||||||||||||||||
Molycorp stockholders | (89,976 | ) | (92,199 | ) | 2,273 | 97,001 | (82,901 | ) | |||||||||||
Noncontrolling interest | — | — | (4,120 | ) | — | (4,120 | ) | ||||||||||||
$ | (89,976 | ) | $ | (92,199 | ) | $ | (1,847 | ) | $ | 97,001 | $ | (87,021 | ) |
Three Months Ended September 30, 2011 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Condensed Consolidating Statements of Operations and Comprehensive Income | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Sales | $ | — | $ | 139,326 | $ | 35,910 | $ | (37,186 | ) | $ | 138,050 | ||||||||
Costs of sales: | |||||||||||||||||||
Costs excluding depreciation and amortization | — | (62,259 | ) | (25,529 | ) | 37,186 | (50,602 | ) | |||||||||||
Depreciation and amortization | — | (2,440 | ) | (2,616 | ) | — | (5,056 | ) | |||||||||||
Gross profit | — | 74,627 | 7,765 | — | 82,392 | ||||||||||||||
Operating expenses: | |||||||||||||||||||
Selling, general and administrative | (592 | ) | (11,374 | ) | (216 | ) | — | (12,182 | ) | ||||||||||
Corporate development | — | (573 | ) | — | — | (573 | ) | ||||||||||||
Depreciation, amortization and accretion | — | (148 | ) | (396 | ) | — | (544 | ) | |||||||||||
Research and development | — | (2,148 | ) | — | — | (2,148 | ) | ||||||||||||
Operating (loss) income | (592 | ) | 60,384 | 7,153 | — | 66,945 | |||||||||||||
Other (expense) income: | |||||||||||||||||||
Other expense | — | (117 | ) | — | — | (117 | ) | ||||||||||||
Foreign exchange losses, net | — | — | (2,000 | ) | — | (2,000 | ) | ||||||||||||
Interest expense, net | (599 | ) | (11 | ) | (61 | ) | — | (671 | ) | ||||||||||
Interest income (expense) from intercompany notes | 61 | (24 | ) | (37 | ) | — | — | ||||||||||||
Equity earnings from consolidated subsidiaries | 46,486 | 5,309 | — | (51,795 | ) | — | |||||||||||||
45,948 | 5,157 | (2,098 | ) | (51,795 | ) | (2,788 | ) | ||||||||||||
Income (loss) before income taxes | 45,356 | 65,541 | 5,055 | (51,795 | ) | 64,157 | |||||||||||||
Income tax expense | — | (19,055 | ) | (1 | ) | — | (19,056 | ) | |||||||||||
Net income (loss) | 45,356 | 46,486 | 5,054 | (51,795 | ) | 45,101 | |||||||||||||
Net income attributable to noncontrolling interest | — | — | 255 | — | 255 | ||||||||||||||
Net income (loss) attributable to Molycorp stockholders | $ | 45,356 | $ | 46,486 | $ | 5,309 | $ | (51,795 | ) | $ | 45,356 | ||||||||
Net income (loss) | $ | 45,356 | $ | 46,486 | $ | 5,054 | $ | (51,795 | ) | $ | 45,101 | ||||||||
Other comprehensive income: | |||||||||||||||||||
Foreign currency translation adjustments | — | — | (5,564 | ) | — | (5,564 | ) | ||||||||||||
Comprehensive income (loss) | $ | 45,356 | $ | 46,486 | $ | (510 | ) | $ | (51,795 | ) | $ | 39,537 | |||||||
Comprehensive income (loss) attributable to: | |||||||||||||||||||
Molycorp stockholders | 45,356 | 46,486 | 299 | (51,795 | ) | 40,346 | |||||||||||||
Noncontrolling interest | — | — | (809 | ) | — | (809 | ) | ||||||||||||
$ | 45,356 | $ | 46,486 | $ | (510 | ) | $ | (51,795 | ) | $ | 39,537 |
Nine Months Ended September 30, 2011 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Condensed Consolidating Statements of Operations and Comprehensive Income | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Sales | $ | — | $ | 252,132 | $ | 68,568 | $ | (56,773 | ) | $ | 263,927 | ||||||||
Costs of sales: | |||||||||||||||||||
Costs excluding depreciation and amortization | — | (115,622 | ) | (46,821 | ) | 56,773 | (105,670 | ) | |||||||||||
Depreciation and amortization | — | (6,820 | ) | (2,768 | ) | — | (9,588 | ) | |||||||||||
Gross profit | — | 129,690 | 18,979 | — | 148,669 | ||||||||||||||
Operating expenses: | |||||||||||||||||||
Selling, general and administrative | (3,903 | ) | (25,784 | ) | (1,778 | ) | — | (31,465 | ) | ||||||||||
Corporate development | — | (3,889 | ) | — | — | (3,889 | ) | ||||||||||||
Depreciation, amortization and accretion | — | (988 | ) | (396 | ) | — | (1,384 | ) | |||||||||||
Research and development | — | (5,165 | ) | — | — | (5,165 | ) | ||||||||||||
Operating loss | (3,903 | ) | 93,864 | 16,805 | — | 106,766 | |||||||||||||
Other (expense) income: | |||||||||||||||||||
Other expense | — | (152 | ) | — | — | (152 | ) | ||||||||||||
Foreign exchange losses, net | — | — | (1,850 | ) | — | (1,850 | ) | ||||||||||||
Interest expense, net | (295 | ) | (3 | ) | (163 | ) | — | (461 | ) | ||||||||||
Interest income (expense) from intercompany notes | 61 | (24 | ) | (37 | ) | — | — | ||||||||||||
Equity earnings from consolidated subsidiaries | 95,084 | 14,041 | — | (109,125 | ) | — | |||||||||||||
94,850 | 13,862 | (2,050 | ) | (109,125 | ) | (2,463 | ) | ||||||||||||
Income before income taxes | 90,947 | 107,726 | 14,755 | (109,125 | ) | 104,303 | |||||||||||||
Income tax expense | — | (12,642 | ) | (1 | ) | — | (12,643 | ) | |||||||||||
Net income | 90,947 | 95,084 | 14,754 | (109,125 | ) | 91,660 | |||||||||||||
Net income attributable to noncontrolling interest | — | — | (713 | ) | — | (713 | ) | ||||||||||||
Net income attributable to Molycorp stockholders | $ | 90,947 | $ | 95,084 | $ | 14,041 | $ | (109,125 | ) | $ | 90,947 | ||||||||
Net income | $ | 90,947 | $ | 95,084 | $ | 14,754 | $ | (109,125 | ) | $ | 91,660 | ||||||||
Other comprehensive income: | |||||||||||||||||||
Foreign currency translation adjustments | — | — | (4,240 | ) | — | (4,240 | ) | ||||||||||||
Comprehensive income | $ | 90,947 | $ | 95,084 | $ | 10,514 | $ | (109,125 | ) | $ | 87,420 | ||||||||
Comprehensive income attributable to: | |||||||||||||||||||
Molycorp stockholders | 90,947 | 95,084 | 10,224 | (109,125 | ) | 87,130 | |||||||||||||
Noncontrolling interest | — | — | 290 | — | 290 | ||||||||||||||
$ | 90,947 | $ | 95,084 | $ | 10,514 | $ | (109,125 | ) | $ | 87,420 |
Nine Months Ended September 30, 2012 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Condensed Consolidating Statements of Cash Flows | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Net cash (used in) provided by operating activities | 17,094 | (95,576 | ) | 31,294 | — | (47,188 | ) | ||||||||||||
Cash flows from investing activities: | |||||||||||||||||||
Cash paid in connection with acquisitions, net of cash acquired | — | — | (591,011 | ) | — | (591,011 | ) | ||||||||||||
Loans to subsidiaries | (683,063 | ) | — | — | 683,063 | — | |||||||||||||
Net intercompany advances and repayments | (792,709 | ) | 680,966 | 111,743 | — | — | |||||||||||||
Repayments from subsidiaries | 34,327 | — | — | (34,327 | ) | — | |||||||||||||
Investment in subsidiaries | (350,000 | ) | — | — | 350,000 | — | |||||||||||||
Notes receivable to non-guarantor | — | (227,512 | ) | — | 227,512 | — | |||||||||||||
Repayments of notes receivable from non-guarantor | — | 100,000 | — | (100,000 | ) | — | |||||||||||||
Investment in joint venture | (28,130 | ) | — | — | (28,130 | ) | |||||||||||||
Deposits | — | (516 | ) | — | — | (516 | ) | ||||||||||||
Capital expenditures | — | (628,407 | ) | (16,276 | ) | — | (644,683 | ) | |||||||||||
Other investing activities | — | — | 4,953 | — | 4,953 | ||||||||||||||
Net cash (used in) provided by investing activities | (1,791,445 | ) | (103,599 | ) | (490,591 | ) | 1,126,248 | (1,259,387 | ) | ||||||||||
Cash flows provided from financing activities: | |||||||||||||||||||
Capital contributions from stockholder | 390,225 | — | — | — | 390,225 | ||||||||||||||
Capital contribution from Parent | — | — | 350,000 | (350,000 | ) | — | |||||||||||||
Repayments of debt | — | (870 | ) | (227,561 | ) | — | (228,431 | ) | |||||||||||
Net proceeds from sale of common stock | 132,471 | — | — | — | 132,471 | ||||||||||||||
Issuance of 10% Senior Secured Notes | 635,373 | — | — | — | 635,373 | ||||||||||||||
Issuance of 6.00% Convertible Notes | 395,712 | — | — | — | 395,712 | ||||||||||||||
Payments of preferred dividends | (8,539 | ) | — | — | — | (8,539 | ) | ||||||||||||
Proceeds from debt | — | — | 9,456 | — | 9,456 | ||||||||||||||
Borrowings from parent | — | 227,512 | 455,551 | (683,063 | ) | — | |||||||||||||
Repayments to parent | — | (34,327 | ) | — | 34,327 | — | |||||||||||||
Notes receivable from guarantor | — | — | 227,512 | (227,512 | ) | — | |||||||||||||
Repayments of notes receivable from guarantor | — | — | (100,000 | ) | 100,000 | — | |||||||||||||
Other financing activities | (2,937 | ) | (68 | ) | (326 | ) | — | (3,331 | ) | ||||||||||
Net cash provided by (used in) financing activities | 1,542,305 | 192,247 | 714,632 | (1,126,248 | ) | 1,322,936 | |||||||||||||
Effect of exchange rate changes on cash | — | — | 809 | — | 809 | ||||||||||||||
Net change in cash and cash equivalents | (232,046 | ) | (6,928 | ) | 256,144 | — | 17,170 | ||||||||||||
Cash and cash equivalents at beginning of the period | 407,446 | 10,758 | 651 | — | 418,855 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 175,400 | $ | 3,830 | $ | 256,795 | $ | — | $ | 436,025 |
Nine Months Ended September 30, 2011 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Condensed Consolidating Statements of Cash Flows | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Net cash (used in) provided by operating activities | (1,957 | ) | 28,085 | 2,596 | — | 28,724 | |||||||||||||
Cash flows from investing activities: | |||||||||||||||||||
Cash paid in connection with acquisitions, net of cash acquired | — | (20,126 | ) | 105 | — | (20,021 | ) | ||||||||||||
Cash paid to acquire non-marketable securities | — | (20,000 | ) | — | — | (20,000 | ) | ||||||||||||
Loans to subsidiaries | (20,161 | ) | — | — | 20,161 | — | |||||||||||||
Net intercompany advances and repayments | (179,699 | ) | 180,374 | (675 | ) | — | — | ||||||||||||
Deposits | 16,449 | (13,503 | ) | — | — | 2,946 | |||||||||||||
Capital expenditures | — | (157,037 | ) | (3,880 | ) | — | (160,917 | ) | |||||||||||
Other investing activities | — | — | 19 | — | 19 | ||||||||||||||
Net cash used in investing activities | (183,411 | ) | (30,292 | ) | (4,431 | ) | 20,161 | (197,973 | ) | ||||||||||
Cash flows provided from financing activities: | |||||||||||||||||||
Repayments of short-term borrowings—related party | — | (2,343 | ) | — | — | (2,343 | ) | ||||||||||||
Repayments of debt | — | — | (5,447 | ) | — | (5,447 | ) | ||||||||||||
Net borrowing from parent | — | 8,124 | 12,037 | (20,161 | ) | — | |||||||||||||
Net proceeds from sale of preferred stock | 199,642 | — | — | — | 199,642 | ||||||||||||||
Net proceeds from sale of Convertible Notes | 223,100 | — | — | — | 223,100 | ||||||||||||||
Payments of preferred dividends | (6,167 | ) | — | — | — | (6,167 | ) | ||||||||||||
Proceeds from debt | — | — | 6,337 | — | 6,337 | ||||||||||||||
Net cash provided by financing activities | 416,575 | 5,781 | 12,927 | (20,161 | ) | 415,122 | |||||||||||||
Effect of exchange rate changes on cash | — | — | (348 | ) | — | (348 | ) | ||||||||||||
Net change in cash and cash equivalents | 231,207 | 3,574 | 10,744 | — | 245,525 | ||||||||||||||
Cash and cash equivalents at beginning of the period | 316,430 | — | — | — | 316,430 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 547,637 | $ | 3,574 | $ | 10,744 | $ | — | $ | 561,955 |
• | develop innovative rare earth technologies and products vital to green energy, high-tech, defense and industrial applications; |
• | be commercially sustainable, globally competitive, profitable and environmentally superior; |
• | act as a responsible steward of our rare earth resources; and |
• | use our technology to improve the daily lives of people throughout the world. |
Prices (USD/Kg)* | |||||||||
Rare Earth Oxides | October 2009 | December 2011 | Change | ||||||
Lanthanum | 4.65 | 51 | 997 | % | |||||
Cerium | 3.75 | 43 | 1,033 | % | |||||
Praseodymium | 14 | 165 | 1,079 | % | |||||
Neodymium | 14.25 | 195 | 1,268 | % | |||||
Samarium | 4.5 | 79 | 1,644 | % | |||||
Europium | 480 | 3,790 | 690 | % | |||||
Gadolinium | 5.25 | 103 | 1,852 | % | |||||
Terbium | 350 | 2,810 | 703 | % | |||||
Dysprosium | 107.5 | 1,410 | 1,212 | % | |||||
Yttrium | 10.25 | 91 | 783 | % |
* | Average FOB China from Metal-Pages.com |
Year Ended December 31, | ||||||||
2011 | 2010 | |||||||
Rare earth products: | ||||||||
Lanthanum products | $ | 91,702 | $ | 13,758 | ||||
Cerium products | $ | 59,825 | $ | 10,143 | ||||
Didymium products | $ | 101,410 | $ | 9,020 | ||||
Neodymium products | $ | 27,426 | $ | 18 | ||||
Praseodymium products | $ | 7,557 | $ | 171 | ||||
Other rare earth products | $ | 5,108 | $ | 2,047 | ||||
Rare metals | $ | 46,280 | — | |||||
Rare earth alloy products | $ | 48,388 | — | |||||
Other non-rare earth products | $ | 9,135 | — |
• | the U.S. dollar (the Company’s reporting currency) against the functional currency of Molycorp Sillamäe (the euro) when we translate Molycorp Sillamäe’s financial statements into U.S. dollars for inclusion in our consolidated financial statements; |
• | the U.S. dollar against the Japanese Yen as it pertains to our investment in the joint venture with Mitsubishi and Daido; and |
• | the euro relative to a small portion of our purchases of equipment, for which we have entered into foreign currency forward contracts to hedge against such foreign currency risk. |
Year Ended December 31 | ||||||||||||
(In thousands) | 2011 | 2010 | Change | |||||||||
Sales | $ | 396,831 | $ | 35,157 | $ | 361,674 | ||||||
Cost of goods sold | (177,890 | ) | (37,591 | ) | (140,299 | ) | ||||||
Selling, general and administrative expenses (Includes stock-based compensation of $4,508 in 2011 and $28,739 in 2010) | (64,387 | ) | (47,513 | ) | (16,874 | ) | ||||||
Depreciation and amortization expense | (733 | ) | (319 | ) | (414 | ) | ||||||
Accretion expense | (955 | ) | (912 | ) | (43 | ) | ||||||
Operating income (loss) | 152,866 | (51,178 | ) | 204,044 | ||||||||
Other (expense) income: | ||||||||||||
Other (expense) income | (153 | ) | 155 | (308 | ) | |||||||
Foreign currency transaction losses, net | (5,415 | ) | — | (5,415 | ) | |||||||
Interest expense, net | (388 | ) | 249 | (637 | ) | |||||||
Income (loss) before income taxes | 146,910 | (50,774 | ) | 197,684 | ||||||||
Provision for income taxes | (28,576 | ) | — | (28,576 | ) | |||||||
Net income (loss) | $ | 118,334 | $ | (50,774 | ) | 169,108 |
Year ended December 31, 2011 (In thousands) | Resources | Chemicals and Oxides | Magnetic Materials and Alloys | Rare Metals | Eliminations(a) | Corporate and other(b) | Total Molycorp, Inc. | |||||||||||||||||||||
Sales: | ||||||||||||||||||||||||||||
External | $ | 253,563 | $ | 40,216 | $ | 56,772 | $ | 46,280 | $ | — | $ | 396,831 | ||||||||||||||||
Intersegment | 55,155 | 13,902 | — | — | (69,057 | ) | — | |||||||||||||||||||||
Total sales | $ | 308,718 | $ | 54,118 | $ | 56,772 | $ | 46,280 | $ | (69,057 | ) | $ | 396,831 | |||||||||||||||
Depreciation, amortization and accretion (d) | $ | (10,010 | ) | $ | (1,958 | ) | $ | (236 | ) | $ | (2,449 | ) | $ | — | $ | (31 | ) | $ | (14,684 | ) | ||||||||
Operating (loss) income | $ | 218,549 | $ | 8,700 | $ | 2,331 | $ | 2,131 | $ | (27,443 | ) | $ | (51,402 | ) | $ | 152,866 | ||||||||||||
(Loss) income before income taxes | $ | 218,391 | $ | 5,785 | $ | 2,336 | $ | (634 | ) | $ | (27,443 | ) | $ | (51,525 | ) | $ | 146,910 | |||||||||||
Total assets at December 31, 2011 | $ | 824,712 | $ | 46,368 | $ | 30,061 | $ | 71,634 | $ | (143,729 | ) | $ | 426,079 | $ | 1,255,125 | |||||||||||||
Capital expenditures (c) | $ | 401,047 | $ | 8,170 | $ | — | $ | — | $ | — | $ | — | $ | 409,217 |
(a) | The net elimination in operating results includes elimination of intercompany gross profits as well as elimination of lower of cost or market adjustments related to intercompany inventory. The total assets elimination is comprised of intercompany investments and intercompany accounts receivable and profits in inventory. |
(b) | Corporate loss before income taxes includes business development costs, personnel and related costs, including stock-based compensation expense, accounting and legal fees, occupancy expense, information technology costs and interest expense. Other consists of nominal expenses incurred by the sales office in Tokyo, Japan. Total corporate assets is comprised primarily of cash and cash equivalents. |
(c) | On an accrual basis excluding capitalized interest |
(d) | Includes depreciation in cost of goods sold |
Year Ended December 31, | ||||||||
Resources | 2011 | 2010 | ||||||
Lanthanum products | $ | 94,112 | $ | 13,758 | ||||
Cerium products | $ | 67,405 | $ | 10,143 | ||||
Didymium products | $ | 116,979 | $ | 9,020 | ||||
Neodymium products | $ | 19,092 | $ | 18 | ||||
Praseodymium products | $ | 5,580 | $ | 171 | ||||
Other rare earth products | $ | 5,550 | $ | 2,047 |
Chemicals and Oxides | April 1, 2011 through December 31, 2011 | ||
Rare earth products: | |||
Lanthanum products | $ | 10,043 | |
Cerium products | $ | 20,492 | |
Neodymium products | $ | 15,204 | |
Praseodymium products | $ | 7,411 | |
Other products | $ | 968 |
Magnetic Materials and Alloys | April 15, 2011 through December 31, 2011 | ||
Rare earth alloys: | |||
Neodymium alloys | $ | 44,432 | |
Samarium alloys | $ | 3,956 | |
Other products | $ | 8,384 |
Rare Metals | April 1, 2011 through December 31, 2011 | ||
Tantalum | $ | 23,426 | |
Niobium | $ | 22,854 |
Year Ended December 31, | ||||||
Resources | 2011 | 2010 | ||||
Lanthanum products | 1,422 | 857 | ||||
Cerium products | 1,246 | 215 | ||||
Didymium products | 394 | 224 |
Chemicals and Oxides | April 1, 2011 through December 31, 2011 | |
Rare earth products: | ||
Lanthanum products | 556 | |
Cerium products | 439 | |
Neodymium products | 196 | |
Praseodymium products | 77 | |
Other products | 44 | |
Other products | 489 |
Magnetic Materials and Alloy | April 15, 2011 through December 31, 2011 | |
Rare earth alloys: | ||
Neodymium alloys | 311 | |
Samarium alloys | 91 | |
Other products | 55 |
Rare Metals | April 1, 2011 through December 31, 2011 | |
Tantalum | 100 | |
Niobium | 394 |
Year Ended December 31, | ||||||||||||
(In thousands) | 2010 | 2009 | Change | |||||||||
Sales | $ | 35,157 | $ | 7,093 | $ | 28,064 | ||||||
Cost of goods sold | (37,591 | ) | (21,785 | ) | (15,806 | ) | ||||||
Selling, general and administrative expenses (Includes stock-based compensation of $28,739 in 2010 and $241 in 2009) | (47,513 | ) | (12,685 | ) | (34,828 | ) | ||||||
Depreciation and amortization expense | (319 | ) | (191 | ) | (128 | ) | ||||||
Accretion expense | (912 | ) | (1,006 | ) | 94 | |||||||
Operating loss | (51,178 | ) | (28,574 | ) | (22,604 | ) | ||||||
Other income (expense): | ||||||||||||
Other income | 155 | 181 | (26 | ) | ||||||||
Interest (expense) income | 249 | (194 | ) | 443 | ||||||||
Net loss | $ | (50,774 | ) | $ | (28,587 | ) | $ | (22,187 | ) |
Year Ended December 31, | ||||||||
Molycorp Mountain Pass | 2010 | 2009 | ||||||
Lanthanum products | $ | 13,758 | $ | 6,529 | ||||
Cerium products | $ | 10,143 | $ | 167 | ||||
Didymium products | $ | 9,020 | — | |||||
Other rare earth products | $ | 2,236 | $ | 397 |
Year Ended December 31, | ||||||
Molycorp Mountain Pass | 2010 | 2009 | ||||
Lanthanum products | 857 | 1,579 | ||||
Cerium products | 215 | — | ||||
Didymium oxide | 224 | 524 |
Payments Due by Period | ||||||||||||||||||||
Contractual Obligations | Total | Less Than 1 Year | 1 - 3 Years | 4 - 5 Years | More Than 5 Years | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Operating lease obligations(1) | $ | 2,984 | $ | 962 | $ | 1,574 | $ | 448 | $ | — | ||||||||||
Purchase obligations and other commitments(2) | 294,252 | 279,205 | 15,047 | — | — | |||||||||||||||
Employee obligations(3) | 4,993 | 4,953 | 40 | — | — | |||||||||||||||
Asset retirement obligations(4) | 31,778 | 346 | 6,919 | 567 | 23,946 | |||||||||||||||
Debt, excluding interest | 237,511 | 1,960 | 4,302 | 231,249 | — | |||||||||||||||
Total | $ | 571,518 | $ | 287,426 | $ | 27,882 | $ | 232,264 | $ | 23,946 |
(1) | Represents all operating lease payments for office space, land and office equipment. |
(2) | Represents contractual commitments for the purchase of materials and services from vendors. Amount includes $2.4 million of potential environmental obligations related to defects in pond liners. |
(3) | Represents primarily payments due to employees for awards under our annual incentive plan. |
(4) | Under applicable environmental laws and regulations, we are subject to reclamation and remediation obligations resulting from our operations. The amounts presented above represent our estimated future undiscounted cash flows required to satisfy the obligations currently known to us. |
• | significant underperformance relative to expected operating results; |
• | significant changes in the way assets are used; |
• | underutilization of our tangible assets; |
• | discontinuance of certain products by us or by our customers; |
• | a decrease in estimated mineral reserves; and |
• | significant negative industry or economic trends. |
• | the satisfaction of the closing conditions necessary to complete Molymet’s investment in us, including our receipt of necessary government regulatory approvals; |
• | our ability to secure additional capital to implement our business plans; |
• | our ability to complete Project Phoenix Phase 1, as well as Project Phoenix Phase 2, and reach full planned production rates for rare earth oxides and other planned downstream products; |
• | the final costs of Project Phoenix Phase 1, including the accelerated start-up of our Molycorp Mountain Pass facility, and Project Phoenix Phase 2, which may differ from estimated costs; |
• | uncertainties associated with our reserve estimates and non-reserve deposit information; |
• | uncertainties regarding the results of our exploratory drilling programs; |
• | uncertainties regarding global supply and demand for rare earth materials; |
• | our ability to successfully integrate recently acquired businesses; |
• | our ability to enter into additional definitive agreements with our customers and our ability to maintain customer relationships; |
• | completion of the formation of the proposed sintered NdFeB rare earth magnet joint venture, which remains subject to the satisfaction of customary closing conditions; |
• | the proposed sintered NdFeB rare earth magnet joint venture’s ability to successfully manufacture magnets within its expected timeframe; |
• | our ability to maintain appropriate relations with unions and employees; |
• | our ability to successfully implement our “mine-to-magnets” strategy; |
• | commercial acceptance of our new products, such as XSORBX® |
• | environmental laws, regulations and permits affecting our business, directly and indirectly, including, among others, those relating to mine reclamation and restoration, climate change, emissions to the air and water and human exposure to hazardous substances used, released or disposed of by us; and |
• | uncertainties associated with unanticipated geological conditions related to mining. |
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
December 31, 2011 | December 31, 2010 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 418,855 | $ | 316,430 | ||||
Trade accounts receivable | 70,679 | 16,421 | ||||||
Inventory (Note 4e) | 111,943 | 18,822 | ||||||
Deferred charges (Note 4p) | 7,318 | — | ||||||
Prepaid income taxes | 10,514 | — | ||||||
Prepaid expenses and other assets | 19,735 | 1,759 | ||||||
Total current assets | 639,044 | 353,432 | ||||||
Non-current assets: | ||||||||
Deposits | 23,286 | 26,200 | ||||||
Property, plant and equipment, net (Note 4g) | 561,628 | 93,966 | ||||||
Inventory (Note 4e) | 4,362 | 5,212 | ||||||
Intangible asset, net (Note 4j) | 3,072 | 639 | ||||||
Investments (Note 4l) | 20,000 | — | ||||||
Goodwill (Note 5) | 3,432 | — | ||||||
Other assets | 301 | 111 | ||||||
Total non-current assets | 616,081 | 126,128 | ||||||
Total assets | $ | 1,255,125 | $ | 479,560 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 161,587 | $ | 13,009 | ||||
Accrued expenses (Note 4m) | 12,898 | 4,225 | ||||||
Deferred tax liabilities (Note 4p) | 1,356 | — | ||||||
Debt (Note 4o) | 1,516 | — | ||||||
Short-term borrowing—related party (Note 10) | 870 | 3,085 | ||||||
Current portion of asset retirement obligation (Note 4n) | 396 | 393 | ||||||
Total current liabilities | 178,623 | 20,712 | ||||||
Non-current liabilities: | ||||||||
Asset retirement obligation (Note 4n) | 15,145 | 12,078 | ||||||
Deferred tax liabilities (Note 4p) | 18,899 | — | ||||||
Debt (Note 4o) | 196,545 | — | ||||||
Other non-current liabilities | 683 | 257 | ||||||
Total non-current liabilities | 231,272 | 12,335 | ||||||
Total liabilities | 409,895 | 33,047 | ||||||
Commitments and contingencies (Note 7) | ||||||||
Stockholders’ equity: | ||||||||
Common stock, $0.001 par value; 350,000,000 shares authorized at December 31, 2011 (Note 4q) | 84 | 82 | ||||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized at December 31, 2011 (Note 4q) | 2 | — | ||||||
Additional paid-in capital | 838,547 | 539,866 | ||||||
Accumulated other comprehensive loss | (8,481 | ) | — | |||||
Surplus (deficit) accumulated during the development stage | 15,078 | (93,435 | ) | |||||
Total stockholders’ equity | 845,230 | 446,513 | ||||||
Total liabilities and stockholders’ equity | $ | 1,255,125 | $ | 479,560 |
Year Ended December 31 | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Sales | $ | 396,831 | $ | 35,157 | $ | 7,093 | ||||||
Operating costs and expenses: | ||||||||||||
Cost of goods sold | (177,890 | ) | (37,591 | ) | (21,785 | ) | ||||||
Selling, general and administrative (Includes stock-based compensation of $4,508 in 2011, $28,739 in 2010 and $241 in 2009) | (64,387 | ) | (47,513 | ) | (12,685 | ) | ||||||
Depreciation and amortization | (733 | ) | (319 | ) | (191 | ) | ||||||
Accretion expense | (955 | ) | (912 | ) | (1,006 | ) | ||||||
Operating income (loss) | 152,866 | (51,178 | ) | (28,574 | ) | |||||||
Other income (expense): | ||||||||||||
Other income | (153 | ) | 155 | 181 | ||||||||
Foreign currency transaction losses, net | (5,415 | ) | — | — | ||||||||
Interest (expense) income, net | (388 | ) | 249 | (194 | ) | |||||||
(5,956 | ) | 404 | (13 | ) | ||||||||
Income (loss) before income taxes | 146,910 | (50,774 | ) | (28,587 | ) | |||||||
Income tax expense | (28,576 | ) | — | — | ||||||||
Net income (loss) | 118,334 | (50,774 | ) | (28,587 | ) | |||||||
Net income attributable to noncontrolling interest | (808 | ) | — | — | ||||||||
Net income (loss) attributable to Molycorp stockholders | $ | 117,526 | $ | (50,774 | ) | $ | (28,587 | ) | ||||
Net income (loss) | $ | 118,334 | $ | (50,774 | ) | $ | (28,587 | ) | ||||
Other comprehensive income: | ||||||||||||
Foreign currency translation adjustments | (8,481 | ) | — | — | ||||||||
Comprehensive income (loss) | $ | 109,853 | $ | (50,774 | ) | $ | (28,587 | ) | ||||
Comprehensive income (loss) attributable to: | ||||||||||||
Molycorp stockholders | $ | 109,468 | $ | (50,774 | ) | $ | (28,587 | ) | ||||
Noncontrolling interest | 385 | — | — | |||||||||
$ | 109,853 | $ | (50,774 | ) | $ | (28,587 | ) | |||||
Weighted average shares outstanding (Common shares)(1) | ||||||||||||
Basic | 83,454,221 | 62,332,054 | 39,526,568 | |||||||||
Diluted | 85,220,017 | 62,332,054 | 39,526,568 | |||||||||
Income (loss) per share of common stock (Note 4r): | ||||||||||||
Basic | $ | 1.29 | $ | (0.81 | ) | $ | (0.72 | ) | ||||
Diluted | $ | 1.27 | $ | (0.81 | ) | $ | (0.72 | ) |
(1) | Weighted average shares outstanding include the retroactive treatment of exchange ratios for conversion of Class A common shares and Class B common shares to common stock in conjunction with the initial public offering. |
Class A Common Stock | Common Stock | Series A Mandatory Convertible Preferred Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Surplus (Deficit) Accumulated During the Development Stage | Total Molycorp Stockholders | Noncontrolling interest | Total Equity | |||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2008 | 38,829,225 | $ | 39 | — | $ | — | — | $ | — | $ | 92,111 | $ | — | $ | (14,074 | ) | $ | 78,076 | $ | — | $ | 78,076 | |||||||||||||||||||||||
Issuance of shares for cash on various dates at $4.68 per share | 3,844,858 | 4 | — | — | — | — | 18,000 | — | — | 18,004 | — | 18,004 | |||||||||||||||||||||||||||||||||
Conversion of short term borrowings from member plus related accrued interest in common shares on November 15, 2009 at $2.96 per share based on a contractual price | 2,303,033 | 2 | — | — | — | — | 6,829 | — | — | 6,831 | — | 6,831 | |||||||||||||||||||||||||||||||||
Exercise of employee options on September 4, 2009 at $2.37 per share (Note 8) | 21,069 | — | — | — | — | — | 50 | — | — | 50 | — | 50 | |||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | 241 | — | — | 241 | — | 241 | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | (28,587 | ) | (28,587 | ) | — | (28,587 | ) | ||||||||||||||||||||||||||||||
Balance at December 31, 2009 | 44,998,185 | $ | 45 | — | $ | — | — | $ | — | $ | 117,231 | $ | — | $ | (42,661 | ) | $ | 74,615 | $ | — | $ | 74,615 | |||||||||||||||||||||||
Issuance of shares for cash on various dates at $2.60 per share | 5,767,670 | 6 | — | — | — | — | 14,994 | — | — | 15,000 | — | 15,000 | |||||||||||||||||||||||||||||||||
Exercise of employee options on February 1, 2010 at $2.37 per share (Note 8) | 126,405 | — | — | — | — | — | 300 | — | — | 300 | — | 300 | |||||||||||||||||||||||||||||||||
Conversion of Class A common stock to common stock in conjunction with the initial public offering on August 3, 2010 (Note 4q) | (50,892,260 | ) | (51 | ) | 50,892,260 | 51 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Sale of shares of common stock at $14.00 per share in initial public offering on August 3, 2010, net of underwriting fees and other offering costs of $29.2 million (Note 4q) | — | — | 29,128,700 | 29 | — | — | 378,604 | — | — | 378,633 | — | 378,633 | |||||||||||||||||||||||||||||||||
Conversion of Class B common stock to common stock in conjunction with the initial public offering on August 3, 2010 (Note 4q) | — | — | 2,232,740 | 2 | — | — | 28,661 | — | — | 28,663 | — | 28,663 | |||||||||||||||||||||||||||||||||
Stock-based compensation (Note 8) | — | — | 37,500 | — | — | — | 76 | — | — | 76 | — | 76 | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | (50,774 | ) | (50,774 | ) | — | (50,774 | ) | ||||||||||||||||||||||||||||||
Balance at December 31, 2010 | — | $ | — | 82,291,200 | $ | 82 | — | $ | — | $ | 539,866 | $ | — | $ | (93,435 | ) | $ | 446,513 | $ | — | $ | 446,513 |
Class A Common Stock | Common Stock | Series A Mandatory Convertible Preferred Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Surplus (Deficit) Accumulated During the Development Stage | Total Molycorp Stockholders | Noncontrolling interest | Total Equity | |||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Sale of Series A mandatory convertible preferred stock on February 16, 2011 at $100.00 per share, net of underwriting fees and other offering costs | — | — | — | — | 2,070,000 | 2 | 199,640 | — | — | 199,642 | — | 199,642 | |||||||||||||||||||||||||||||||||
Stock-based compensation (Note 8) | — | — | 11,424 | — | — | — | 4,671 | — | — | 4,671 | — | 4,671 | |||||||||||||||||||||||||||||||||
Issuance of shares for interest in Molycorp Sillamäe on April 1, 2011 at $45.60 per share (Note 4q) | — | — | 1,593,419 | 2 | — | — | 72,653 | — | — | 72,655 | 8,820 | 81,475 | |||||||||||||||||||||||||||||||||
Component of convertible debt | — | — | — | — | — | — | 36,227 | — | — | 36,227 | — | 36,227 | |||||||||||||||||||||||||||||||||
Deferred taxes on component of convertible debt | — | — | — | — | — | — | (14,138 | ) | — | — | (14,138 | ) | — | (14,138 | ) | ||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | 117,526 | 117,526 | 808 | 118,334 | |||||||||||||||||||||||||||||||||
Preferred dividends | — | — | — | — | — | — | — | — | (9,013 | ) | (9,013 | ) | — | (9,013 | ) | ||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | — | (8,058 | ) | — | (8,058 | ) | (423 | ) | (8,481 | ) | |||||||||||||||||||||||||||||
Acquisition of noncontrolling interest | — | — | — | — | — | — | (372 | ) | (423 | ) | — | (795 | ) | (9,205 | ) | (10,000 | ) | ||||||||||||||||||||||||||||
Balance at December 31, 2011 | — | $ | — | 83,896,043 | $ | 84 | 2,070,000 | $ | 2 | $ | 838,547 | $ | (8,481 | ) | $ | 15,078 | $ | 845,230 | $ | — | $ | 845,230 |
Year Ended December 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income (loss) | $ | 118,334 | $ | (50,774 | ) | $ | (28,587 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation and amortization | 14,272 | 6,015 | 3,896 | |||||||||
Amortization of convertible notes | 674 | — | — | |||||||||
Accretion of asset retirement obligation | 955 | 912 | 1,006 | |||||||||
Deferred income tax expense | 2,924 | — | — | |||||||||
Non-cash inventory write-downs | 3,776 | 3,473 | 9,035 | |||||||||
Non-cash share-based compensation expense | 4,671 | 28,739 | 241 | |||||||||
Impairment of fixed assets | — | 3,114 | — | |||||||||
Foreign currency transaction losses, net | 5,415 | — | — | |||||||||
Loss on disposal of fixed assets | 1,296 | — | — | |||||||||
Other operating adjustments | 637 | (59 | ) | 2 | ||||||||
Net change in operating assets and liabilities (Note 13) | (109,989 | ) | (20,137 | ) | (7,964 | ) | ||||||
Net cash provided by (used in) operating activities | 42,965 | (28,717 | ) | (22,371 | ) | |||||||
Cash flows from investing activities: | ||||||||||||
Acquisition of the Mountain Pass facility | — | — | — | |||||||||
Cash paid in connection with acquisitions, net of cash acquired | (30,023 | ) | — | — | ||||||||
Proceeds from sale of investment in joint venture | — | — | 9,700 | |||||||||
Cash paid to acquire non-marketable securities | (20,000 | ) | — | — | ||||||||
Deposits | 2,897 | (26,200 | ) | — | ||||||||
Capital expenditures | (302,180 | ) | (33,129 | ) | (7,285 | ) | ||||||
Other assets | (119 | ) | (111 | ) | — | |||||||
Proceeds from sale of assets | 35 | 9 | 5 | |||||||||
Net cash used in investing activities | (349,390 | ) | (59,431 | ) | 2,420 | |||||||
Cash flows provided by financing activities: | ||||||||||||
Capital contributions from original stockholders | — | 15,000 | 18,004 | |||||||||
Repayments of short-term borrowings—related party | (3,150 | ) | (1,107 | ) | — | |||||||
Repayments of debt | (4,428 | ) | — | — | ||||||||
Net proceeds from sale of common stock in conjunction with the initial public offering | — | 378,633 | — | |||||||||
Net proceeds from sale of preferred stock | 199,642 | — | — | |||||||||
Net proceeds from sale of convertible notes | 223,100 | — | — | |||||||||
Payments of financing costs | — | (185 | ) | — | ||||||||
Payments of preferred dividends | (9,015 | ) | — | — | ||||||||
Proceeds from exercise of options | — | 300 | 50 | |||||||||
Proceeds from short-term borrowings—related party | — | 5,008 | 6,637 | |||||||||
Proceeds from debt | 5,131 | — | — | |||||||||
Net cash provided by financing activities | 411,280 | 397,649 | 24,691 | |||||||||
Effect of exchange rate changes on cash | (2,430 | ) | — | — | ||||||||
Net change in cash and cash equivalents | 102,425 | 309,501 | 4,740 | |||||||||
Cash and cash equivalents at beginning of the period | 316,430 | 6,929 | 2,189 | |||||||||
Cash and cash equivalents at end of period | $ | 418,855 | $ | 316,430 | $ | 6,929 |
(1) | Company Background |
• | clean-energy technologies such as hybrid and electric vehicles, wind turbines and compact fluorescent lighting; |
• | high-technology applications including cell phones, personal digital assistant devices, digital music players, hard disk drives used in computers, computing devices, “ear bud” speakers and microphones, as well as fiber optics, lasers and optical temperature sensors; |
• | critical defense applications such as guidance and control systems, communications, global positioning systems, radar and sonar; and |
• | advanced water treatment applications, including those for industrial, military, homeland security, domestic and foreign aid use. |
(2) | Basis of Presentation |
(3) | Capital Requirements and Liquidity |
(4) | Summary of Significant Accounting Policies |
(a) | Use of Estimates |
(b) | Sales and Cost of Goods Sold |
(c) | Cash and Cash Equivalents |
(d) | Trade Accounts Receivable |
(e) | Inventories |
December 31, 2011 | December 31, 2010 | |||||||
Current: | ||||||||
Concentrate stockpiles | $ | 3,704 | $ | 4,206 | ||||
Raw materials | 44,770 | 400 | ||||||
Work in process | 16,602 | 3,582 | ||||||
Finished goods | 45,045 | 9,307 | ||||||
Materials and supplies | 1,822 | 1,327 | ||||||
Total current | $ | 111,943 | $ | 18,822 | ||||
Long-term: | ||||||||
Concentrate stockpiles | $ | 1,144 | $ | 5,108 | ||||
Raw materials | 3,186 | — | ||||||
Finished goods | 32 | 104 | ||||||
Total long-term | $ | 4,362 | $ | 5,212 |
(f) | Deposits |
(g) | Property, Plant and Equipment, net |
December 31, 2011 | December 31, 2010 | |||||||
Land | $ | 11,059 | $ | 800 | ||||
Land improvements (15 years) | 15,748 | 15,415 | ||||||
Buildings and improvements (4 to 27 years) | 23,677 | 6,892 | ||||||
Plant and equipment (2 to 12 years) | 68,441 | 19,560 | ||||||
Vehicles (7 years) | 1,235 | 1,049 | ||||||
Computer software (5 years) | 3,002 | 1,563 | ||||||
Furniture and fixtures (5 years) | 464 | 170 | ||||||
Construction in progress | 436,547 | 34,809 | ||||||
Mineral properties | 24,692 | 23,968 | ||||||
Property, plant and equipment at cost | 584,865 | 104,226 | ||||||
Less accumulated depreciation | (23,237 | ) | (10,260 | ) | ||||
Property, plant and equipment, net | $ | 561,628 | $ | 93,966 |
(h) | Mineral Properties and Development Costs |
(i) | Research and Development |
(j) | Intangible Asset |
December 31, 2011 | December 31, 2010 | |||||||
Trade name | $ | 786 | $ | 786 | ||||
Customer relationships | 2,153 | — | ||||||
Other | 516 | — | ||||||
Gross carrying amount | 3,455 | 786 | ||||||
Less accumulated amortization | (383 | ) | (147 | ) | ||||
Net carrying amount | $ | 3,072 | $ | 639 |
2012 | $ | 265 | |
2013 | 261 | ||
2014 | 260 | ||
2015 | 260 | ||
2016 | 260 | ||
Thereafter | 1,766 | ||
Total | $ | 3,072 |
(k) | Investments in Joint Ventures |
(l) | Investments in non-marketable securities |
(m) | Accrued Expenses |
December 31, 2011 | December 31, 2010 | |||||||
Defined contribution plan | $ | 1,088 | $ | 1,199 | ||||
Accrued payroll and related benefits | 3,024 | 1,185 | ||||||
Accrued tolling fees | — | 404 | ||||||
Sales and use tax | 1,367 | 532 | ||||||
Accrued bonus | 4,845 | 554 | ||||||
Interest payable | 345 | 9 | ||||||
Other accrued expenses | 2,229 | 342 | ||||||
Total accrued expenses | $ | 12,898 | $ | 4,225 |
(n) | Asset Retirement Obligation |
Year Ended December 31, 2011 | Year Ended December 31, 2010 | |||||||
Balance at beginning of period | $ | 12,471 | $ | 14,202 | ||||
Obligations settled | (1,030 | ) | (632 | ) | ||||
Accretion expense | 955 | 912 | ||||||
Revisions in estimated cash flows | 2,508 | (1,939 | ) | |||||
Loss (Gain) on settlement | 637 | (72 | ) | |||||
Balance at end of period | $ | 15,541 | $ | 12,471 |
(o) | Debt |
December 31, 2011 | ||||||||
Current | Non-Current | |||||||
Notes 3.25%, net of discount, due June 2016 | $ | — | $ | 190,877 | ||||
Bank loans 2.69% - 3.88% due February 2012 - September 2017 | 1,516 | 5,668 | ||||||
Total debt | $ | 1,516 | $ | 196,545 |
(p) | Income Taxes |
Year Ended December 31, 2011 | |||
Current | |||
Federal | $ | 18,721 | |
State | 6,952 | ||
Total current | 25,673 | ||
Deferred | |||
Federal | 3,687 | ||
State | (784 | ) | |
Total deferred | 2,903 | ||
Total tax provision | $ | 28,576 |
December 31, 2011 | December 31, 2010 | December 31, 2009 | ||||||||||
United States | $ | 141,801 | $ | (50,774 | ) | $ | (28,587 | ) | ||||
Foreign | 5,109 | — | — | |||||||||
Total | $ | 146,910 | $ | (50,774 | ) | $ | (28,587 | ) |
Year Ended December 31, 2011 | |||
Federal tax computed at the statutory rate | $ | 51,419 | |
State taxes, net of federal benefit | 5,255 | ||
Change In valuation allowance | (22,730 | ) | |
Federal tax credits | (2,627 | ) | |
Domestic production activities deduction | (2,493 | ) | |
Foreign income tax rate differential | (1,735 | ) | |
Other items, net | 1,487 | ||
Income tax expense | $ | 28,576 |
December 31, 2011 | December 31, 2010 | |||||||
Deferred tax assets: | ||||||||
Current: | ||||||||
Inventory | $ | — | $ | 1,133 | ||||
Other | 806 | 106 | ||||||
Total current | 806 | 1,239 | ||||||
Non-current: | ||||||||
Asset retirement obligation | 419 | 656 | ||||||
Mineral resources | 16,975 | 16,516 | ||||||
Employee stock compensation benefits | 835 | — | ||||||
Net operating losses | 852 | 6,750 | ||||||
Other | 116 | 62 | ||||||
Total non-current | 19,197 | 23,984 | ||||||
Deferred tax liabilities: | ||||||||
Current | — | — | ||||||
Inventory | 1,849 | — | ||||||
Other | 313 | — | ||||||
Total current | 2,162 | — | ||||||
Non-current: | ||||||||
Development costs | 217 | 96 | ||||||
Property, plant and equipment | 3,647 | 2,397 | ||||||
Section 174 costs | 20,094 | — | ||||||
Convertible debt (Notes) | 14,138 | |||||||
Other | — | — | ||||||
Total non-current | 38,096 | 2,493 | ||||||
Net deferred taxes, before valuation allowance | (20,255 | ) | 22,730 | |||||
Valuation allowance | — | (22,730 | ) | |||||
Total deferred tax | $ | (20,255 | ) | $ | — |
Year Ended December 31, 2011 | |||
Balance, beginning of year | $ | — | |
Tax position related to current year: | |||
Additions | 519 | ||
Tax positions related to prior years: | |||
Additions | — | ||
Settlements | — | ||
Statute of limitations closures | — | ||
Balance, end of year | $ | 519 |
(q) | Stockholders’ Equity |
(r) | Earnings (loss) per Share |
(In thousands, except share and per share amounts) | Year Ended December 31, 2011 | ||
Net income attributable to Molycorp stockholders | $ | 117,526 | |
Cumulative undeclared and paid dividends on preferred stock | (9,962 | ) | |
Net income attributable to common stockholders | 107,564 | ||
Weighted average common shares outstanding—basic | 83,454,221 | ||
Basic earnings per share | $ | 1.29 | |
Net income attributable to common stockholders | $ | 107,564 | |
Effect of dilutive Notes | 413 | ||
Income attributable to common stockholders, adjusted for the effect of dilutive Notes | 107,977 | ||
Weighted average common shares outstanding—dilutive | 85,220,017 | ||
Dilutive earnings per share | $ | 1.27 |
(s) | Comprehensive Income (Loss) |
(t) | Foreign Currency |
(5) | Acquisitions |
Effective acquisition date for financial reporting purposes: | Molycorp Sillamäe April 1, 2011 | Molycorp Tolleson April 15, 2011 | ||||||
Purchase consideration: | ||||||||
Cash consideration | $ | 9,021 | $ | 17,500 | ||||
Fair value of common stock | 72,653 | — | ||||||
Total purchase consideration | $ | 81,674 | $ | 17,500 | ||||
The fair values of the assets and liabilities acquired: | ||||||||
Cash | $ | 105 | $ | 6,395 | ||||
Accounts receivable and other current assets | 8,626 | 5,474 | ||||||
Inventory | 37,404 | 11,327 | ||||||
Property and equipment, net | 63,393 | 4,512 | ||||||
Intangible assets subject to amortization | 2,669 | — | ||||||
Goodwill | 1,455 | 1,977 | ||||||
Liabilities | (19,974 | ) | (8,989 | ) | ||||
Deferred tax liabilities | — | (3,196 | ) | |||||
Long-term debt | (3,184 | ) | — | |||||
Noncontrolling interest | (8,820 | ) | — | |||||
Total purchase consideration | $ | 81,674 | $ | 17,500 |
(In thousands, except per share amounts) | Revenue | Net Income (loss) | Net Income (loss) Attributable To Molycorp | EPS Basic | ||||||||||||
Actual April 1, 2011 to December 31, 2011 (Molycorp Sillamäe) | $ | 86,496 | $ | 13,571 | $ | 12,763 | $ | 0.15 | ||||||||
Actual April 1, 2011 to December 31, 2011 (Molycorp Tolleson) | $ | 56,772 | $ | 7,877 | $ | 7,877 | $ | 0.09 | ||||||||
Unaudited pro forma January 1, 2011 to December 31, 2011 (combined entity) | $ | 430,305 | $ | 105,397 | $ | 104,590 | $ | 1.13 | ||||||||
Unaudited pro forma January 1, 2010 to December 31, 2010 (combined entity) | $ | 85,549 | $ | (30,920 | ) | $ | (31,329 | ) | $ | (0.50 | ) |
Net income attributable to Molycorp, Inc. | $ | 117,526 | |
Decrease in equity for purchase of Molycorp Sillamäe’s minority shares | (10,000 | ) | |
Change from net income attributable to Molycorp, Inc. and transfer to the noncontrolling interest | $ | 107,526 |
(7) | Commitments and Contingencies |
(a) | Future Operating Lease Commitments |
(b) | Plant Modernization and Expansion Commitments |
(c) | Potential Environmental Obligations |
(d) | Labor Contract |
(e) | Reclamation Surety Bonds |
(f) | Licenses and Permits |
(8) | Stock-Based Compensation |
Year ended December 31, | ||||||||||
2011 | 2010 | 2009 | ||||||||
Risk-free interest rate | 2.21 | % | n/a | 0.6 | % | |||||
Expected term | 6.0 years | n/a | 0.8 years | * | ||||||
Volatility | 60.1 | % | n/a | 145.5 | % | |||||
Expected dividend yield | none | n/a | none |
2011 | 2010 | 2009 | ||||||||||||||||||||||
Number of Shares | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | *Number of Shares | Weighted Average Exercise Price | |||||||||||||||||||
Outstanding at beginning of year | — | $ | — | 126,405 | $ | 2.37 | — | $ | — | |||||||||||||||
Granted | 52,819 | $ | 48.87 | — | $ | — | 147,474 | $ | 2.37 | |||||||||||||||
Exercised | — | $ | — | (126,405 | ) | $ | 2.37 | (21,069 | ) | $ | 2.37 | |||||||||||||
Forfeited and expired | — | $ | — | — | $ | — | — | $ | — | |||||||||||||||
Outstanding at end of year | 52,819 | $ | 48.87 | — | $ | — | 126,405 | $ | 2.37 | |||||||||||||||
Options exercisable at year-end | — | $ | — | — | $ | — | 126,405 | $ | 2.37 | |||||||||||||||
Weighted-average fair value of options granted | $ | 27.78 | $ | — | $ | 63.41 | ||||||||||||||||||
Cash received from exercise of options (in millions) | $ | — | $ | 0.3 | $ | 0.1 | ||||||||||||||||||
Total intrinsic value of options exercised (in millions) | $ | — | $ | 14.3 | $ | 2.4 |
RSAs | Number of Shares | Weighted Average Grant-Date Fair Value | |||||
Unvested at January 1, 2011 | 37,500 | $ | 36.51 | ||||
Granted | 11,717 | $ | 52.12 | ||||
Forfeited | (293 | ) | $ | 48.87 | |||
Vested | — | $ | — | ||||
Unvested at December 31, 2011 | 48,924 | $ | 40.20 |
RSUs | Number of Shares | Weighted Average Grant-Date Fair Value | |||||
Unvested at January 1, 2011 | — | $ | — | ||||
Granted | 80,256 | $ | 56.43 | ||||
Forfeited | — | $ | — | ||||
Vested* | (1,712 | ) | $ | 50.69 | |||
Unvested at December 31, 2011 | 78,544 | $ | 56.55 |
(9) | Concentrations |
(a) | Limited Number of Products |
2011 | 2010 | 2009 | |||||||
Lanthanum products | 23 | % | 39 | % | 92 | % | |||
Cerium products | 11 | % | 29 | % | 2 | % | |||
Didymium products | 26 | % | 26 | % | n/a |
(b) | Limited Number of Customers |
Year Ended December 31, 2010 | |||
Mitsubishi Unimetals USA | $ | 8,479 | |
W.R. Grace & Co.—Conn. | $ | 7,438 | |
Chuden Rare Earth Co. Ltd. | $ | 5,389 | |
Shin-Etsu Chemical Co. | $ | 4,020 |
(c) | Geographic Locations |
(10) | Related-Party Transactions |
Year ended December 31, 2011 (In thousands) | Resources | Chemicals and Oxides | Magnetic Materials and Alloys | Rare Metals | Eliminations(a) | Corporate and other(b) | Total Molycorp, Inc. | |||||||||||||||||||||
Sales: | ||||||||||||||||||||||||||||
External | $ | 253,563 | $ | 40,216 | $ | 56,772 | $ | 46,280 | $ | — | $ | 396,831 | ||||||||||||||||
Intersegment | 55,155 | 13,902 | — | — | (69,057 | ) | — | |||||||||||||||||||||
Total sales | $ | 308,718 | $ | 54,118 | $ | 56,772 | $ | 46,280 | $ | (69,057 | ) | 396,831 | ||||||||||||||||
Depreciation, amortization and accretion (d) | $ | (10,010 | ) | $ | (1,958 | ) | $ | (236 | ) | $ | (2,449 | ) | $ | — | $ | (31 | ) | $ | (14,684 | ) | ||||||||
Operating (loss) income | $ | 218,549 | $ | 8,700 | $ | 2,331 | $ | 2,131 | $ | (27,443 | ) | $ | (51,402 | ) | $ | 152,866 | ||||||||||||
(Loss) income before income taxes | $ | 218,391 | $ | 5,785 | $ | 2,336 | $ | (634 | ) | $ | (27,443 | ) | $ | (51,525 | ) | $ | 146,910 | |||||||||||
Total assets at December 31, 2011 | $ | 824,712 | $ | 46,368 | $ | 30,061 | $ | 71,634 | $ | (143,729 | ) | $ | 426,079 | $ | 1,255,125 | |||||||||||||
Capital expenditures (c) | $ | 401,047 | $ | 8,170 | $ | — | $ | — | $ | — | $ | — | $ | 409,217 |
(a) | The net elimination in operating results includes elimination of intercompany gross profits as well as elimination of lower of cost or market adjustments related to intercompany inventory. The total assets elimination is comprised of intercompany investments and intercompany accounts receivable and profits in inventory. |
(b) | Corporate loss before income taxes includes business development costs, personnel and related costs, including stock-based compensation expense, accounting and legal fees, occupancy expense, information technology costs and interest expense. Other consists of nominal expenses incurred by the sales office in Tokyo, Japan. Total corporate assets is comprised primarily of cash and cash equivalents. |
(c) | On an accrual basis excluding capitalized interest |
(d) | Includes depreciation in cost of goods sold |
(12) | Derivative Instruments |
Entity | Currency purchased forward | Currency sold forward | Maturity dates | |||||
Molycorp Minerals, LLC | € | 0.5 | USD 0.6 | January 2012 | ||||
Molycorp Minerals, LLC | € | 1.4 | USD 1.9 | February 2012 | ||||
Molycorp Minerals, LLC | € | 0.5 | USD 0.6 | March 2012 |
(13) | Net Change in Operating Assets and Liabilities |
Year Ended December 31, | ||||||||||||
(In thousands) | 2011 | 2010 | 2009 | |||||||||
Decrease (increase) in operating assets: | ||||||||||||
Accounts receivable | $ | (52,805 | ) | $ | (15,200 | ) | $ | 125 | ||||
Inventory | (54,343 | ) | (6,872 | ) | (13,557 | ) | ||||||
Prepaid expenses and other assets | (6,363 | ) | 251 | 360 | ||||||||
Increase (decrease) in operating liabilities: | ||||||||||||
Accounts payable | 16,233 | 3,797 | (254 | ) | ||||||||
Prepaid income taxes | (17,832 | ) | — | — | ||||||||
Asset retirement obligation | (1,030 | ) | (632 | ) | (387 | ) | ||||||
Accrued expenses | 6,151 | (1,481 | ) | 5,749 | ||||||||
$ | (109,989 | ) | $ | (20,137 | ) | $ | (7,964 | ) |
Year Ended December 31, | ||||||||||||
(In thousands) | 2011 | 2010 | 2009 | |||||||||
Net cash paid for: | ||||||||||||
Income taxes | $ | 43,505 | $ | — | $ | — | ||||||
Interest | $ | 4,192 | $ | — | $ | — | ||||||
Non-cash financing activities and investing activities: | ||||||||||||
Conversion of short-term borrowings from member plus accrued interest, into common shares | $ | — | $ | — | $ | 6,831 | ||||||
Change in accrued capital expenditures | $ | 112,606 | $ | 5,510 | $ | (150 | ) |
(15) | Unaudited Supplementary Data |
2011 | ||||||||||||||||
Three Months Ended | ||||||||||||||||
March 31 | June 30 | September 30(2) | December 31 | |||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||
Sales | $ | 26,261 | $ | 99,615 | $ | 138,050 | $ | 132,905 | ||||||||
Cost of goods sold | (16,677 | ) | (42,923 | ) | (55,657 | ) | (62,633 | ) | ||||||||
Selling, general and administrative expense (Includes stock-based compensation of $2,899 in March, $412 in June, $611 in September and $586 in December) | (11,238 | ) | (14,229 | ) | (14,901 | ) | (24,019 | ) | ||||||||
Depreciation and amortization expense | (83 | ) | (283 | ) | (305 | ) | (62 | ) | ||||||||
Accretion expense | (234 | ) | (240 | ) | (240 | ) | (241 | ) | ||||||||
Operating income (loss) | (1,971 | ) | 41,940 | 66,947 | 45,950 | |||||||||||
Other income (expense): | ||||||||||||||||
Other income (expense) | (168 | ) | 133 | (117 | ) | (1 | ) | |||||||||
Foreign currency transaction losses, net | — | — | (2,000 | ) | (3,415 | ) | ||||||||||
Interest income (expense), net | 140 | 70 | (671 | ) | 73 | |||||||||||
Income (loss) before income taxes | (1,999 | ) | 42,143 | 64,159 | 42,607 | |||||||||||
Income tax (expense) benefit | (199 | ) | 6,612 | (19,056 | ) | (15,933 | ) | |||||||||
Net income (loss) | (2,198 | ) | 48,755 | 45,103 | 26,674 | |||||||||||
Net loss (income) attributable to noncontrolling interest | — | (968 | ) | 255 | (95 | ) | ||||||||||
Net income (loss) attributable to Molycorp stockholders | $ | (2,198 | ) | $ | 47,787 | $ | 45,358 | $ | 26,579 | |||||||
Weighted average shares outstanding (Common shares)(1) | ||||||||||||||||
Basic | 82,253,700 | 83,847,119 | 83,847,119 | 83,847,119 | ||||||||||||
Diluted | 82,253,700 | 84,413,499 | 87,069,256 | 87,069,711 | ||||||||||||
Income (loss) per share of common stock: | ||||||||||||||||
Basic | $ | (0.04 | ) | $ | 0.52 | $ | 0.50 | $ | 0.27 | |||||||
Diluted | $ | (0.04 | ) | $ | 0.52 | $ | 0.48 | $ | 0.26 |
2010 | ||||||||||||||||
Three Months Ended | ||||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||
Sales | $ | 3,018 | $ | 1,904 | $ | 8,533 | $ | 21,702 | ||||||||
Cost of goods sold | (5,950 | ) | (5,576 | ) | (7,742 | ) | (18,323 | ) | ||||||||
Selling, general and administrative expense (Includes stock-based compensation of $0 in March, $15,133 in June, $6,527 in September and $7,079 in December) | (4,480 | ) | (19,387 | ) | (10,644 | ) | (13,002 | ) | ||||||||
Depreciation and amortization expense | (95 | ) | (61 | ) | (83 | ) | (80 | ) | ||||||||
Accretion expense | (263 | ) | (216 | ) | (216 | ) | (217 | ) | ||||||||
Operating loss | (7,770 | ) | (23,336 | ) | (10,152 | ) | (9,920 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Other income | 21 | 45 | 14 | 75 | ||||||||||||
Interest income (expense), net of capitalized amount | — | — | (7 | ) | 256 | |||||||||||
Net loss | $ | (7,749 | ) | $ | (23,291 | ) | $ | (10,145 | ) | $ | (9,589 | ) | ||||
Weighted average shares outstanding (Common shares)(1) | ||||||||||||||||
Basic | 48,155,533 | 49,666,732 | 69,550,649 | 81,509,452 | ||||||||||||
Diluted | 48,155,533 | 49,666,732 | 69,550,649 | 81,509,452 | ||||||||||||
Loss per share of common stock: | ||||||||||||||||
Basic | $ | (0.16 | ) | $ | (0.47 | ) | $ | (0.15 | ) | $ | (0.12 | ) | ||||
Diluted | $ | (0.16 | ) | $ | (0.47 | ) | $ | (0.15 | ) | $ | (0.12 | ) |
(1) | Weighted average shares outstanding include the retroactive treatment of exchange ratios for conversion of Class A common stock and Class B common stock to common stock in conjunction with the initial public offering. |
(2) | During the fourth quarter of 2011, we identified an error in the elimination of intercompany sales in the third quarter of 2011. We have concluded that this error is not material to our previously issued consolidated financial statements for the third quarter of 2011, or to our consolidated financial statements for the 9 months ended September 30, 2011 or the fourth quarter of 2011. We revised our previously reported results for the third quarter of 2011 to correct this error in the appropriate quarterly period. This revision resulted in an increase to cost of sales of $5.1 million, a decrease in operating income of $5.1 million and a decrease in net income of $3.3 million, net of income tax benefit in the third quarter of 2011 of $1.8 million for the three months ended September 30, 2011. For the nine months ended September 30, 2011, this revision resulted in an increase to cost of sales of $5.1 million, a decrease in operating income of $5.1 million and a decrease in net income of $3.3 million, net of income tax benefit of $1.8 million We will appropriately revise the results in the quarterly filing on Form 10-Q for the three and nine months ended September 30, 2011, when next presented in the third quarter of 2012. |
(16) | Subsequent Events - Unaudited |
June 11, 2012 | |||
Purchase consideration: | |||
Cash consideration | $ | 908,181 | |
Fair value of Molycorp common stock and Exchangeable Shares issued | 284,144 | ||
Total purchase consideration | $ | 1,192,325 | |
Estimated fair values of the assets and liabilities acquired: | |||
Cash and cash equivalents | $ | 317,169 | |
Accounts receivable | 101,470 | ||
Inventory | 250,989 | ||
Prepaid expenses and other current assets | 26,893 | ||
Property, plant and equipment | 70,391 | ||
Investments | 21,019 | ||
Intangibles | 491,786 | ||
Goodwill | 501,571 | ||
Other non-current assets | 22,859 | ||
Accounts payable and accrued expenses | (138,576 | ) | |
Debt - current | (255,056 | ) | |
Other current liabilities | (29,939 | ) | |
Deferred tax liabilities | (158,177 | ) | |
Long-term debt | (281 | ) | |
Other non-current liabilities | (14,032 | ) | |
Non-controlling interests | (15,761 | ) | |
Total purchase consideration | $ | 1,192,325 |
(In thousands, except per share amounts) | Sales | Net Income (Loss)) | Net Income (Loss) Attributable To Molycorp | EPS Basic | ||||||||||||
Unaudited pro forma January 1, 2011 to December 31, 2011 (combined entity) | $ | 1,196,876 | $ | 241,897 | $ | 231,766 | $ | 2.03 |
(17) | Subsidiary Guarantor Financial Information |
(1) | any sale, exchange, transfer or other disposition of a majority of the capital stock of (including by way of consolidation or merger) such guarantor by Molycorp or any restricted subsidiary to any person or persons, as a result of which such guarantor is no longer a direct or indirect subsidiary of Molycorp; |
(2) | any sale, exchange, transfer or other disposition of all or substantially all assets of such guarantor that results in such guarantor having no assets; |
(3) | the designation by Molycorp of such guarantor as an unrestricted subsidiary; or |
(4) | defeasance or discharge of the Senior Notes; |
At December 31, 2011 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Condensed Consolidating Balance Sheets | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 407,446 | $ | 10,758 | $ | 651 | $ | — | $ | 418,855 | |||||||||
Trade accounts receivable, net | — | 58,619 | 12,060 | — | 70,679 | ||||||||||||||
Inventory | — | 52,246 | 59,697 | — | 111,943 | ||||||||||||||
Deferred charges | — | 7,318 | — | — | 7,318 | ||||||||||||||
Prepaid income taxes | — | 10,514 | — | — | 10,514 | ||||||||||||||
Prepaid expenses and other current assets | — | 17,845 | 1,890 | — | 19,735 | ||||||||||||||
Total current assets | 407,446 | 157,300 | 74,298 | — | 639,044 | ||||||||||||||
Non-current assets: | |||||||||||||||||||
Deposits | 1,751 | 21,362 | 173 | — | 23,286 | ||||||||||||||
Property, plant and equipment, net | — | 500,612 | 61,016 | — | 561,628 | ||||||||||||||
Inventory | — | 4,362 | — | — | 4,362 | ||||||||||||||
Intangible assets, net | — | 573 | 2,499 | — | 3,072 | ||||||||||||||
Investments | — | 20,000 | — | — | 20,000 | ||||||||||||||
Goodwill | — | 1,977 | 1,455 | — | 3,432 | ||||||||||||||
Investments in consolidated subsidiaries | 150,510 | 118,879 | — | (269,389 | ) | — | |||||||||||||
Intercompany accounts receivable | 476,711 | 25,870 | — | (502,581 | ) | — | |||||||||||||
Other non-current assets | — | 301 | — | — | 301 | ||||||||||||||
Total non-current assets | 628,972 | 693,936 | 65,143 | (771,970 | ) | 616,081 | |||||||||||||
Total assets | $ | 1,036,418 | $ | 851,236 | $ | 139,441 | $ | (771,970 | ) | $ | 1,255,125 | ||||||||
Current liabilities: | |||||||||||||||||||
Trade accounts payable | $ | — | $ | 139,408 | $ | 22,179 | $ | — | $ | 161,587 | |||||||||
Accrued expenses | 311 | 11,072 | 1,515 | — | 12,898 | ||||||||||||||
Deferred tax liabilities | — | 1,356 | — | — | 1,356 | ||||||||||||||
Debt | — | — | 1,516 | — | 1,516 | ||||||||||||||
Short-term borrowings-related party | — | 870 | — | — | 870 | ||||||||||||||
Current portion of asset retirement obligation | — | 396 | — | — | 396 | ||||||||||||||
Total current liabilities | 311 | 153,102 | 25,210 | — | 178,623 | ||||||||||||||
Non-current liabilities: | |||||||||||||||||||
Asset retirement obligation | — | 15,145 | — | — | 15,145 | ||||||||||||||
Deferred tax liabilities | — | 18,899 | — | — | 18,899 | ||||||||||||||
Debt | 190,877 | — | 5,668 | — | 196,545 | ||||||||||||||
Intercompany accounts payable | — | 489,180 | 13,401 | (502,581 | ) | — | |||||||||||||
Other non-current liabilities | — | 683 | — | — | 683 | ||||||||||||||
Total non-current liabilities | 190,877 | 523,907 | 19,069 | (502,581 | ) | 231,272 | |||||||||||||
Total liabilities | $ | 191,188 | $ | 677,009 | $ | 44,279 | $ | (502,581 | ) | $ | 409,895 | ||||||||
Stockholders’ equity: |
Common stock | 84 | — | — | — | 84 | ||||||||||||||
Preferred stock | 2 | — | — | — | 2 | ||||||||||||||
Additional paid-in capital | 838,547 | 149,857 | 91,158 | (241,015 | ) | 838,547 | |||||||||||||
Accumulated other comprehensive loss | (8,481 | ) | — | (8,481 | ) | 8,481 | (8,481 | ) | |||||||||||
Retained earnings | 15,078 | 24,370 | 12,485 | (36,855 | ) | 15,078 | |||||||||||||
Total stockholders’ equity | 845,230 | 174,227 | 95,162 | (269,389 | ) | 845,230 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 1,036,418 | $ | 851,236 | $ | 139,441 | $ | (771,970 | ) | $ | 1,255,125 |
At December 31, 2010 | |||||||||||||||
(in thousands) | |||||||||||||||
Condensed Consolidating Balance Sheets | Parent | Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | |||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 316,430 | $ | — | $ | — | $ | 316,430 | |||||||
Trade accounts receivable, net | — | 16,421 | — | 16,421 | |||||||||||
Inventory | — | 18,822 | — | 18,822 | |||||||||||
Prepaid expenses and other current assets | — | 1,759 | — | 1,759 | |||||||||||
Total current assets | 316,430 | 37,002 | — | 353,432 | |||||||||||
Non-current assets: | |||||||||||||||
Deposits | 18,200 | 8,000 | — | 26,200 | |||||||||||
Property, plant and equipment, net | — | 93,966 | — | 93,966 | |||||||||||
Inventory | — | 5,212 | — | 5,212 | |||||||||||
Intangible assets, net | — | 639 | — | 639 | |||||||||||
Investments in consolidated subsidiary | 39,097 | — | (39,097 | ) | — | ||||||||||
Intercompany accounts receivable | 72,893 | 107 | (73,000 | ) | — | ||||||||||
Other non-current assets | — | 111 | — | 111 | |||||||||||
Total non-current assets | 130,190 | 108,035 | (112,097 | ) | 126,128 | ||||||||||
Total assets | $ | 446,620 | $ | 145,037 | $ | (112,097 | ) | $ | 479,560 | ||||||
Current liabilities: | |||||||||||||||
Trade accounts payable | $ | — | $ | 13,009 | $ | — | $ | 13,009 | |||||||
Accrued expenses | — | 4,225 | — | 4,225 | |||||||||||
Short-term borrowing - related party | — | 3,085 | — | 3,085 | |||||||||||
Other current liabilities | — | 393 | — | 393 | |||||||||||
Total current liabilities | — | 20,712 | — | 20,712 | |||||||||||
Non-current liabilities: | |||||||||||||||
Asset retirement obligation | — | 12,078 | — | 12,078 | |||||||||||
Intercompany accounts payable | 107 | 72,893 | (73,000 | ) | — | ||||||||||
Other non-current liabilities | — | 257 | — | 257 | |||||||||||
Total non-current liabilities | 107 | 85,228 | (73,000 | ) | 12,335 | ||||||||||
Total liabilities | $ | 107 | $ | 105,940 | $ | (73,000 | ) | $ | 33,047 | ||||||
Stockholders’ equity: | |||||||||||||||
Common stock | 82 | — | — | 82 | |||||||||||
Additional paid-in capital | 539,866 | 132,335 | (132,335 | ) | 539,866 | ||||||||||
Deficit | (93,435 | ) | (93,238 | ) | 93,238 | (93,435 | ) | ||||||||
Total stockholders’ equity | 446,513 | 39,097 | (39,097 | ) | 446,513 | ||||||||||
Total liabilities and stockholders’ equity | $ | 446,620 | $ | 145,037 | $ | (112,097 | ) | $ | 479,560 |
Year Ended December 31, 2011 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Condensed Consolidating Statements of Operations and Comprehensive Income | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Sales | $ | — | $ | 365,490 | $ | 100,398 | $ | (69,057 | ) | $ | 396,831 | ||||||||
Operating costs and expenses: | |||||||||||||||||||
Cost of goods sold | — | (168,362 | ) | (78,585 | ) | 69,057 | (177,890 | ) | |||||||||||
Selling, general and administrative | (7 | ) | (61,926 | ) | (2,454 | ) | — | (64,387 | ) | ||||||||||
Depreciation and amortization | — | (423 | ) | (310 | ) | — | (733 | ) | |||||||||||
Accretion expense | — | (955 | ) | — | — | (955 | ) | ||||||||||||
Operating (loss) income | (7 | ) | 133,824 | 19,049 | — | 152,866 | |||||||||||||
Other (expense) income: | |||||||||||||||||||
Other expense | — | (153 | ) | — | — | (153 | ) | ||||||||||||
Foreign exchange losses, net | — | — | (5,415 | ) | — | (5,415 | ) | ||||||||||||
Interest expense, net | (499 | ) | 248 | (137 | ) | — | (388 | ) | |||||||||||
Interest income (expense) from intercompany notes | 424 | (296 | ) | (128 | ) | — | — | ||||||||||||
Equity earnings from consolidated subsidiaries | 117,608 | 12,485 | — | (130,093 | ) | — | |||||||||||||
117,533 | 12,284 | (5,680 | ) | (130,093 | ) | (5,956 | ) | ||||||||||||
Income before income taxes | 117,526 | 146,108 | 13,369 | (130,093 | ) | 146,910 | |||||||||||||
Income tax expense | — | (28,500 | ) | (76 | ) | — | (28,576 | ) | |||||||||||
Net income | 117,526 | 117,608 | 13,293 | (130,093 | ) | 118,334 | |||||||||||||
Net income attributable to noncontrolling interest | — | — | (808 | ) | — | (808 | ) | ||||||||||||
Net income attributable to Molycorp stockholders | $ | 117,526 | $ | 117,608 | $ | 12,485 | $ | (130,093 | ) | $ | 117,526 | ||||||||
Net income | $ | 117,526 | $ | 117,608 | $ | 13,293 | $ | (130,093 | ) | $ | 118,334 | ||||||||
Other comprehensive income: | |||||||||||||||||||
Foreign currency translation adjustments | — | — | (8,481 | ) | — | (8,481 | ) | ||||||||||||
Comprehensive income (loss) | $ | 117,526 | $ | 117,608 | $ | 4,812 | $ | (130,093 | ) | $ | 109,853 | ||||||||
Comprehensive income (loss) attributable to: | |||||||||||||||||||
Molycorp stockholders | 117,526 | 117,608 | 4,427 | (130,093 | ) | 109,468 | |||||||||||||
Noncontrolling interest | — | — | 385 | — | 385 | ||||||||||||||
$ | 117,526 | $ | 117,608 | $ | 4,812 | $ | (130,093 | ) | $ | 109,853 |
Year Ended December 31, 2010 | |||||||||||||||
(in thousands) | |||||||||||||||
Condensed Consolidating Statements of Operations | Parent | Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | |||||||||||
Sales | $ | — | $ | 35,157 | $ | — | $ | 35,157 | |||||||
Operating costs and expenses: | |||||||||||||||
Cost of goods sold | — | (37,591 | ) | — | (37,591 | ) | |||||||||
Selling, general and administrative | (436 | ) | (47,077 | ) | — | (47,513 | ) | ||||||||
Depreciation and amortization | — | (319 | ) | — | (319 | ) | |||||||||
Accretion | — | (912 | ) | — | (912 | ) | |||||||||
Operating loss | (436 | ) | (50,742 | ) | — | (51,178 | ) | ||||||||
Other (expense) income: | |||||||||||||||
Other income | — | 155 | — | 155 | |||||||||||
Interest income, net | 249 | — | — | 249 | |||||||||||
Equity earnings from consolidated subsidiaries | (50,587 | ) | — | 50,587 | — | ||||||||||
$ | (50,338 | ) | $ | 155 | $ | 50,587 | $ | 404 | |||||||
Net loss | $ | (50,774 | ) | $ | (50,587 | ) | $ | 50,587 | $ | (50,774 | ) |
Year Ended December 31, 2009 | |||||||||||||||
(in thousands) | |||||||||||||||
Condensed Consolidating Statements of Operations | Parent | Guarantor Subsidiaries | Eliminations | Molycorp, LLC consolidated (a) | |||||||||||
Sales | $ | — | $ | 7,093 | $ | — | $ | 7,093 | |||||||
Operating costs and expenses: | |||||||||||||||
Cost of goods sold | — | (21,785 | ) | — | (21,785 | ) | |||||||||
Selling, general and administrative | — | (12,685 | ) | — | (12,685 | ) | |||||||||
Depreciation and amortization | — | (191 | ) | — | (191 | ) | |||||||||
Accretion expense | — | (1,006 | ) | — | (1,006 | ) | |||||||||
Operating loss | — | (28,574 | ) | — | (28,574 | ) | |||||||||
Other (expense) income: | |||||||||||||||
Other income | — | 181 | — | 181 | |||||||||||
Interest expense, net | — | (194 | ) | — | (194 | ) | |||||||||
Equity earnings from consolidated subsidiary | (28,587 | ) | — | 28,587 | — | ||||||||||
$ | (28,587 | ) | $ | (13 | ) | $ | 28,587 | $ | (13 | ) | |||||
Net loss | $ | (28,587 | ) | $ | (28,587 | ) | $ | 28,587 | $ | (28,587 | ) |
Year Ended December 31, 2011 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Condensed Consolidating Statements of Cash Flows | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Net cash provided by (used in) operating activities | 903 | 44,211 | (2,149 | ) | — | 42,965 | |||||||||||||
Cash flows from investing activities: | |||||||||||||||||||
Cash paid in connection with acquisitions, net of cash acquired | — | (30,128 | ) | 105 | — | (30,023 | ) | ||||||||||||
Cash paid to acquire non-marketable securities | — | (20,000 | ) | — | — | (20,000 | ) | ||||||||||||
Loans to subsidiaries | (49,430 | ) | — | — | 49,430 | — | |||||||||||||
Net intercompany advances and repayments | (290,633 | ) | 290,001 | 632 | — | — | |||||||||||||
Deposits | 16,449 | (13,552 | ) | — | — | 2,897 | |||||||||||||
Capital expenditures | — | (294,010 | ) | (8,170 | ) | — | (302,180 | ) | |||||||||||
Other investing activities | — | 16 | (100 | ) | — | (84 | ) | ||||||||||||
Net cash provided by (used in) investing activities | (323,614 | ) | (67,673 | ) | (7,533 | ) | 49,430 | (349,390 | ) | ||||||||||
Cash flows provided from financing activities: | |||||||||||||||||||
Repayments of short-term borrowings—related party | — | (3,150 | ) | — | — | (3,150 | ) | ||||||||||||
Repayments of debt | — | — | (4,428 | ) | — | (4,428 | ) | ||||||||||||
Net proceeds from sale of preferred stock | 199,642 | — | — | — | 199,642 | ||||||||||||||
Net proceeds from sale of Convertible Notes | 223,100 | — | — | — | 223,100 | ||||||||||||||
Payments of preferred dividends | (9,015 | ) | — | — | — | (9,015 | ) | ||||||||||||
Proceeds from debt | — | — | 5,131 | — | 5,131 | ||||||||||||||
Net borrowings from parent | — | 37,370 | 12,060 | (49,430 | ) | — | |||||||||||||
Net cash provided by financing activities | 413,727 | 34,220 | 12,763 | (49,430 | ) | 411,280 | |||||||||||||
Effect of exchange rate changes on cash | — | — | (2,430 | ) | — | (2,430 | ) | ||||||||||||
Net change in cash and cash equivalents | 91,016 | 10,758 | 651 | — | 102,425 | ||||||||||||||
Cash and cash equivalents at beginning of the period | 316,430 | — | — | — | 316,430 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 407,446 | $ | 10,758 | $ | 651 | $ | — | $ | 418,855 |
Year Ended December 31, 2010 | |||||||||||||||
(in thousands) | |||||||||||||||
Condensed Consolidating Statements of Cash Flows | Parent | Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | |||||||||||
Net cash (used in) provided by operating activities | (187 | ) | (28,530 | ) | — | (28,717 | ) | ||||||||
Cash flows from investing activities: | |||||||||||||||
Investment in consolidated subsidiary | (15,000 | ) | — | 15,000 | — | ||||||||||
Deposits | (18,200 | ) | (8,000 | ) | — | (26,200 | ) | ||||||||
Capital expenditures | — | (33,129 | ) | — | (33,129 | ) | |||||||||
Net intercompany advances and repayments | (43,931 | ) | 43,931 | — | — | ||||||||||
Other investing activities | — | (102 | ) | — | (102 | ) | |||||||||
Net cash used in investing activities | (77,131 | ) | 2,700 | 15,000 | (59,431 | ) | |||||||||
Cash flows provided from financing activities: | |||||||||||||||
Capital contributions from original stockholders | 15,000 | — | — | 15,000 | |||||||||||
Capital contributions from parent company | — | 15,000 | (15,000 | ) | — | ||||||||||
Repayments of short-term borrowings—related party | — | (1,107 | ) | — | (1,107 | ) | |||||||||
Net proceeds from sale of common stock in conjunction with initial public offering | 378,633 | — | — | 378,633 | |||||||||||
Proceeds from exercise of options | 300 | — | — | 300 | |||||||||||
Proceeds from short-term borrowings—related party | — | 5,008 | — | 5,008 | |||||||||||
Other financing activities | (185 | ) | — | — | (185 | ) | |||||||||
Net cash provided by financing activities | 393,748 | 18,901 | (15,000 | ) | 397,649 | ||||||||||
Net change in cash and cash equivalents | 316,430 | (6,929 | ) | — | 309,501 | ||||||||||
Cash and cash equivalents at beginning of the period | — | 6,929 | — | 6,929 | |||||||||||
Cash and cash equivalents at end of period | $ | 316,430 | $ | — | $ | — | $ | 316,430 |
Year Ended December 31, 2009 | |||||||||||||||
(in thousands) | |||||||||||||||
Condensed Consolidating Statements of Cash Flows | Parent | Guarantor Subsidiaries | Eliminations | Molycorp, LLC consolidated (a) | |||||||||||
Net cash used in operating activities | — | (22,371 | ) | — | (22,371 | ) | |||||||||
Cash flows from investing activities: | |||||||||||||||
Investment in consolidated subsidiary | (10,000 | ) | — | 10,000 | — | ||||||||||
Proceeds from sale of investment in joint venture | — | 9,700 | — | 9,700 | |||||||||||
Capital expenditures | — | (7,285 | ) | — | (7,285 | ) | |||||||||
Proceeds from sale of assets | — | 5 | — | 5 | |||||||||||
Net cash (used in) provided by investing activities | (10,000 | ) | 2,420 | 10,000 | 2,420 | ||||||||||
Cash flows provided from financing activities: | |||||||||||||||
Capital contributions from original stockholders | 10,000 | 8,004 | — | 18,004 | |||||||||||
Capital contributions from parent company | — | 10,000 | (10,000 | ) | — | ||||||||||
Proceeds from exercise of options | — | 50 | — | 50 | |||||||||||
Proceeds from short-term borrowings—related party | — | 6,637 | — | 6,637 | |||||||||||
Net cash provided by financing activities | 10,000 | 24,691 | (10,000 | ) | 24,691 | ||||||||||
Net change in cash and cash equivalents | — | 4,740 | — | 4,740 | |||||||||||
Cash and cash equivalents at beginning of the period | — | 2,189 | — | 2,189 | |||||||||||
Cash and cash equivalents at end of period | $ | — | $ | 6,929 | $ | — | $ | 6,929 |
For the Year Ended December 31, 2011 | |||||||||||||||
Pro Forma Condensed Consolidated Statement of Operations (Unaudited) | Molycorp, Inc. | Neo Material Technologies Inc. | Pro Forma Adjustments | Pro Forma | |||||||||||
(In thousands, except share and per share amounts) | |||||||||||||||
Sales | $ | 396,831 | 800,045 | — | 1,196,876 | ||||||||||
Cost of sales | (177,890 | ) | (439,990 | ) | (1,211 | ) | (2) | (619,091 | ) | ||||||
Gross profit | 218,941 | 360,055 | (1,211 | ) | 577,785 | ||||||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative | (64,387 | ) | (81,558 | ) | — | (145,945 | ) | ||||||||
Depreciation, amortization and accretion | (1,688 | ) | (3,507 | ) | (47,285 | ) | (2) | (52,480 | ) | ||||||
Operating income | 152,866 | 274,990 | (48,496 | ) | 379,360 | ||||||||||
Other (expense) income: | |||||||||||||||
Other expense | (153 | ) | (6,732 | ) | — | (6,885 | ) | ||||||||
Foreign exchange (losses) gains, net | (5,415 | ) | 2,757 | — | (2,658 | ) | |||||||||
Interest expense, net | (388 | ) | (12,234 | ) | (66,300 | ) | (4) | (78,922 | ) | ||||||
(5,956 | ) | (16,209 | ) | (66,300 | ) | (88,465 | ) | ||||||||
Income before income taxes and equity earnings | 146,910 | 258,781 | (114,796 | ) | 290,895 | ||||||||||
Income tax (expense) benefit | (28,576 | ) | (66,650 | ) | 40,179 | (5) | (55,047 | ) | |||||||
Equity in results of affiliates | — | 5,323 | — | 5,323 | |||||||||||
Net income | 118,334 | 197,454 | (74,617 | ) | 241,171 | ||||||||||
Net income attributable to noncontrolling interests | (808 | ) | (9,323 | ) | — | (10,131 | ) | ||||||||
Net income attributable to Molycorp stockholders | $ | 117,526 | $ | 188,131 | $ | (74,617 | ) | $ | 231,040 | ||||||
Net income attributable to Molycorp stockholders | $ | 117,526 | $ | 188,131 | $ | (74,617 | ) | $ | 231,040 | ||||||
Preferred stock dividend | (9,962 | ) | — | — | (9,962 | ) | |||||||||
Net income attributable to common stockholders | $ | 107,564 | $ | 188,131 | $ | (74,617 | ) | $ | 221,078 | ||||||
Weighted average common shares outstanding - basic | 83,454,221 | (6) | 109,499,647 | ||||||||||||
Basic earnings per share | $ | 1.29 | $ | 2.02 | |||||||||||
Net income attributable to common stockholders, adjusted for the effect of dilutive 3.25% Convertible Notes | $ | 107,977 | $ | 221,492 | |||||||||||
Weighted average common shares outstanding - diluted | 85,220,017 | (6) | 111,265,443 | ||||||||||||
Diluted earnings per share | $ | 1.27 | $ | 1.99 | |||||||||||
For the Nine Months Ended September 30, 2012 | |||||||||||||||
Pro Forma Condensed Consolidated Statement of Operations (Unaudited) | Molycorp, Inc. | Neo Material Technologies Inc. | Pro Forma Adjustments | Pro Forma | |||||||||||
(In thousands, except share and per share amounts) | |||||||||||||||
Sales | $ | 394,651 | $ | 340,650 | $ | (5,832 | ) | (1) | $ | 729,469 | |||||
Cost of sales | (356,834 | ) | (248,311 | ) | 3,174 | (1) | (602,513 | ) | |||||||
(542 | ) | (2) | |||||||||||||
Gross profit | 37,817 | 92,339 | (3,200 | ) | 126,956 | ||||||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative | (97,349 | ) | (54,869 | ) | 24,103 | (3) | (128,115 | ) | |||||||
Corporate development | (19,379 | ) | (29,591 | ) | 45,535 | (3) | (3,435 | ) | |||||||
Depreciation, amortization and accretion | (12,361 | ) | (1,488 | ) | (21,149 | ) | (2) | (34,998 | ) | ||||||
Operating (loss) income | (91,272 | ) | 6,391 | 45,289 | (39,592 | ) | |||||||||
Other (expense) income: | |||||||||||||||
Other expense | (37,615 | ) | (2,587 | ) | 37,589 | (3) | (2,613 | ) | |||||||
Foreign exchange gains (losses), net | 724 | (319 | ) | — | 405 | ||||||||||
Interest expense, net | (14,989 | ) | (8,653 | ) | (18,674 | ) | (3)(4) | (42,316 | ) | ||||||
(51,880 | ) | (11,559 | ) | 18,915 | (44,524 | ) | |||||||||
Loss before income taxes and equity earnings | (143,152 | ) | (5,168 | ) | 64,204 | (84,116 | ) | ||||||||
Income tax benefit (expense) | 58,442 | (27,194 | ) | (22,471 | ) | (5) | 8,777 | ||||||||
Equity in results of affiliates | (1,146 | ) | 1,930 | — | 784 | ||||||||||
Net loss | (85,856 | ) | (30,432 | ) | 41,733 | (74,555 | ) | ||||||||
Net income attributable to noncontrolling interests | (4,120 | ) | (3,707 | ) | — | (7,827 | ) | ||||||||
Net loss attributable to Molycorp stockholders | $ | (89,976 | ) | $ | (34,139 | ) | $ | 41,733 | $ | (82,382 | ) | ||||
Net loss attributable to Molycorp stockholders | $ | (89,976 | ) | $ | (34,139 | ) | $ | 41,733 | $ | (82,382 | ) | ||||
Preferred stock dividend | (8,539 | ) | — | — | (8,539 | ) | |||||||||
Net loss attributable to common stockholders | $ | (98,515 | ) | $ | (34,139 | ) | $ | 41,733 | $ | (90,921 | ) | ||||
Weighted average common shares outstanding - basic | 101,147,638 | (6) | 124,109,128 | ||||||||||||
Basic earnings per share | $ | (0.97 | ) | $ | (0.73 | ) | |||||||||
Net loss attributable to common stockholders | $ | (98,515 | ) | $ | (90,921 | ) | |||||||||
Weighted average common shares outstanding - diluted | 101,147,638 | (6) | 124,109,128 | ||||||||||||
Diluted earnings per share | $ | (0.97 | ) | $ | (0.73 | ) | |||||||||
(1) | Represents adjustments to eliminate the effect of sales and the related cost of sales that occurred during the second quarter of 2012, but prior to the business combination between the Company and Molycorp Canada. No sales occurred between the Company and Molycorp Canada in 2011. |
(2) | Represents adjustments to reflect the net incremental depreciation and amortization expense of $0.5 million and $21.1 million for the nine months ended September 30, 2012 and $1.2 million and $47.3 million for the twelve months ended December 31, 2011, respectively, as a result of the preliminary allocation of the purchase price to certain depreciable and amortizable assets with useful lives ranging from two to thirty years. The preliminary purchase price allocation is reflected in Molycorp's Quarterly Report on Form 10-Q for September 30, 2012. |
(3) | Represents $115.2 million of adjustments, as detailed in the next table, for nonrecurring legal, accounting, compensation, bridge loan fees, and realized losses on a forward contract to purchase Canadian dollars. The forward contract was entered into to manage the foreign currency exposure with respect to the Company's acquisition of Molycorp Canada. |
For the Nine Months Ended September 30, 2012 | |||
Selling, General and Administrative: | |||
Stock-based and change in control expenses | $ | 24,103 | |
Corporate development: | |||
Legal, accounting and advisory fees | 45,535 | ||
Other expenses: | |||
Contingent forward contract loss | 37,589 | ||
Interest expense: | |||
Bridge loan fees | 7,937 | ||
$ | 115,164 |
(4) | Represents the estimated net increase in interest expense based on the 10.0% rate for the Senior Notes issued by Molycorp in connection with the Acquisition. The components of the unaudited pro forma adjustment to interest expense include the following: |
For the Year Ended December 31, 2011 | For the Nine Months Ended September 30, 2012 | ||||||
Interest on new debt instruments | $ | (65,000 | ) | $ | (25,961 | ) | |
Nonrecurring fees on bridge financing | — | 7,937 | |||||
Amortization of deferred financing costs | (1,300 | ) | (650 | ) | |||
Total | $ | (66,300 | ) | $ | (18,674 | ) |
(5) | Represents the tax effect of unaudited pro forma adjustments using the Molycorp federal, state and international statutory tax rates based on the applicable tax jurisdictions. |
(6) | The weighted average shares outstanding have been adjusted to reflect the approximately 13.5 million shares resulting from the acquisition and the issuance of approximately 12.5 million shares in the Molymet private placement that closed in March, 2012, as detailed below: |
For the Year Ended December 31, 2011 | For the Nine Months Ended September 30, 2012 | ||||||
Basic earnings per share | |||||||
Weighted average number of Molycorp shares outstanding | 83,454,221 | 101,147,638 | |||||
Adjustment for share issuance to Molymet | 12,500,000 | 11,941,566 | |||||
Adjustment for share issuance to Molycorp Canada predecessor shareholders | 13,545,426 | 11,019,924 | |||||
Pro forma weighted averaged number of shares outstanding | 109,499,647 | 124,109,128 | |||||
Pro forma adjusted net earnings | $ | 221,078 | $ | (90,921 | ) | ||
Pro forma basic earnings per share | $ | 2.02 | $ | (0.73 | ) | ||
Diluted earnings per share | |||||||
Pro forma weighted average number of shares outstanding | 109,499,647 | 124,109,128 | |||||
Dilutive impact of 3.25% convertible notes | 1,765,796 | — | |||||
Pro forma weighted average number of shares outstanding - diluted | 111,265,443 | 124,109,128 | |||||
Pro forma adjusted net earnings | $ | 221,078 | $ | (90,921 | ) | ||
Dilutive impact of 3.25% convertible notes | 414 | — | |||||
Pro forma adjusted net earnings | 221,492 | (90,921 | ) | ||||
Pro forma diluted earnings per share | $ | 1.99 | $ | (0.73 | ) |
Unaudited Supplementary Data
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Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information [Text Block] | Unaudited Supplementary Data The following is a summary of the selected quarterly financial information (unaudited):
We revised our previously reported third quarter of 2011 basic and diluted earnings per share in the fourth quarter of 2011 to reflect the adjustments described in the note above, in the appropriate quarterly period. These adjustments resulted in a net decrease to basic and diluted earnings per share in the amounts of $0.04 for the three months ended September 30, 2011. For the nine months ended September 30, 2011, these adjustments resulted in a net decrease to basic and diluted earnings per share in the amounts of $0.04 and $0.03, respectively. We will appropriately revise the third quarter of 2011 earnings per share in our quarterly filing on Form 10-Q for the three and nine months ended September 30, 2011, when next presented in the third quarter of 2012. |
Commitments and Contingencies Commitments and Contingencies (Tables)
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Sep. 30, 2012
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum rental payments for operating leases |
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Schedule of minimum payments for purchase obligations |
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Acquisitions (Tables)
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Sep. 30, 2012
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarizes the purchase prices and opening balance sheets for the acquisitions |
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Summary of actual and pro forma information |
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Schedule of Business Acquisitions, Transaction Costs by Type [Table Text Block] |
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Schedule of Effect of Transaction With Noncontrolling Interest On Equity Attributable To Parent [Table Text Block] |
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Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Details 6) (Details) (USD $)
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3 Months Ended | 9 Months Ended | 12 Months Ended | 43 Months Ended | |||||||
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Sep. 30, 2012
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Dec. 31, 2011
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Sep. 30, 2011
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Jun. 30, 2011
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Mar. 31, 2011
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Sep. 30, 2012
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Sep. 30, 2011
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Dec. 31, 2011
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Dec. 31, 2010
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Dec. 31, 2009
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Dec. 31, 2011
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Summary of Significant Accounting Policies [Abstract] | |||||||||||
Federal tax rate | 35.00% | ||||||||||
Net income since corporate reorganization | $ 75,400,000 | $ 75,400,000 | $ 75,400,000 | ||||||||
Nondeductible expense share based compensation cost | 31,100,000 | 31,100,000 | 31,100,000 | ||||||||
Deferred Tax Assets, Net | 162,300,000 | 20,255,000 | 162,300,000 | 20,255,000 | 20,255,000 | ||||||
Deferred Charges and Accrued Income Taxes | 7,300,000 | 7,300,000 | 7,300,000 | ||||||||
Valuation Allowance Percentage | 100.00% | 100.00% | |||||||||
Federal | 18,721,000 | ||||||||||
State | 6,952,000 | ||||||||||
Total current | 25,673,000 | ||||||||||
Federal | 3,687,000 | ||||||||||
State | (784,000) | ||||||||||
Total deferred | 2,903,000 | ||||||||||
Income Tax Expense (Benefit) | (28,956,000) | 15,933,000 | 19,056,000 | (6,612,000) | 199,000 | (58,442,000) | 12,643,000 | 28,576,000 | 0 | 0 | 28,576,000 |
United States | 141,801,000 | (50,774,000) | (28,587,000) | ||||||||
Foreign | 5,109,000 | ||||||||||
(Loss) income before income taxes and equity earnings | (43,745,000) | 64,157,000 | (143,152,000) | 104,303,000 | 146,910,000 | (50,774,000) | (28,587,000) | ||||
Federal tax computed at the statutory rate | 51,419,000 | ||||||||||
State tax, net of federal benefit | 5,255,000 | ||||||||||
Change In valuation allowance | (22,730,000) | ||||||||||
Federal tax credits | 2,627,000 | ||||||||||
Domestic production activities deduction | 2,493,000 | ||||||||||
Foreign income tax rate differential | (1,735,000) | ||||||||||
Other item, net | 1,487,000 | ||||||||||
Inventory | 1,133,000 | ||||||||||
Other | 806,000 | 806,000 | 106,000 | 806,000 | |||||||
Total current | 806,000 | 806,000 | 1,239,000 | 806,000 | |||||||
Asset retirement obligation | 419,000 | 419,000 | 656,000 | 419,000 | |||||||
Mineral resources | 16,975,000 | 16,975,000 | 16,516,000 | 16,975,000 | |||||||
Employee stock compensation | 835,000 | 835,000 | 835,000 | ||||||||
Net operating losses | 852,000 | 852,000 | 6,750,000 | 852,000 | |||||||
Other | 116,000 | 116,000 | 62,000 | 116,000 | |||||||
Total non-current | 19,197,000 | 19,197,000 | 23,984,000 | 19,197,000 | |||||||
Inventory | 1,849,000 | 1,849,000 | 1,849,000 | ||||||||
Other | 313,000 | 313,000 | 313,000 | ||||||||
Total current | 2,162,000 | 2,162,000 | 2,162,000 | ||||||||
Development costs | 217,000 | 217,000 | 96,000 | 217,000 | |||||||
Property, plant and equipment | 3,647,000 | 3,647,000 | 2,397,000 | 3,647,000 | |||||||
Section 174 costs | 20,094,000 | 20,094,000 | 20,094,000 | ||||||||
Convertible debt (Notes) | 14,138,000 | 14,138,000 | 14,138,000 | ||||||||
Total non-current | 38,096,000 | 38,096,000 | 2,493,000 | 38,096,000 | |||||||
Net deferred taxes, before valuation allowance | (20,255,000) | (20,255,000) | (22,730,000) | (20,255,000) | |||||||
Total deferred tax | (22,730,000) | ||||||||||
Additions | 519,000 | ||||||||||
Balance, end of year | $ 519,000 | $ 519,000 | $ 519,000 |
Concentrations (Tables)
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
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Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of percent of revenue, by product, accounting for more than 10% of sales | Percentages of the Resources segment's sales by product that accounted for more than 10% of consolidated sales for the three and nine months ended September 30, 2012 and 2011, respectively, were approximately as follows:
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Schedules of Concentration of Risk, by Risk Factor | For the three months ended September 30, 2012, sales by product from the Chemicals and Oxides segment that accounted for more than 10% of consolidated sales were approximately as follows:
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Schedules of Concentration of Risk by Customer Risk Factor [Table Text Block] |
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Investments (Details)
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1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | |||||||||||||||
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Sep. 30, 2011
USD ($)
|
Sep. 30, 2012
USD ($)
|
Sep. 30, 2011
USD ($)
|
Sep. 30, 2012
USD ($)
|
Sep. 30, 2011
USD ($)
|
Dec. 31, 2011
USD ($)
|
Dec. 31, 2010
USD ($)
|
Dec. 31, 2009
USD ($)
|
Jan. 31, 2012
Intermetallics Japan
USD ($)
|
Jan. 31, 2012
Intermetallics Japan
JPY (¥)
|
Sep. 30, 2012
Intermetallics Japan
USD ($)
|
Sep. 30, 2012
Intermetallics Japan
USD ($)
|
Sep. 30, 2012
Intermetallics Japan
JPY (¥)
|
Nov. 28, 2011
Intermetallics Japan
|
Nov. 28, 2011
Intermetallics Japan
Molycorp
|
Nov. 28, 2011
Intermetallics Japan
Daido
|
Nov. 28, 2011
Intermetallics Japan
Mitsubishi
|
Jun. 30, 2012
Keli
USD ($)
|
Jun. 12, 2012
Keli
USD ($)
|
Jun. 12, 2012
TMT
USD ($)
|
Jun. 12, 2012
Ingal Stade
USD ($)
|
Jun. 12, 2012
Atlantic Metals
USD ($)
|
Jun. 12, 2012
Vive
USD ($)
|
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Intermetallics Japan - IMJ | |||||||||||||||||||||||
Investment in Boulder Wind Power's Series B convertible preferred stock | $ 20,000,000 | $ 0 | $ 20,000,000 | $ 20,000,000 | $ 0 | $ 0 | |||||||||||||||||
Capital contribution ratio (as a percent) | 30.00% | 30.00% | 35.50% | 34.50% | |||||||||||||||||||
Capital contribution | 2,500,000,000 | ||||||||||||||||||||||
Payments to acquire interest in JV | 28,130,000 | 0 | 32,700,000 | 2,500,000,000 | 27,700,000 | 2,200,000,000 | |||||||||||||||||
Ownership in Subsidiary (as a percent) | 25.00% | 33.00% | 50.00% | 19.50% | 7.00% | ||||||||||||||||||
Fair Value of the Equity Investment of a Business Acquisition | 12,200,000 | 1,600,000 | 4,900,000 | 1,400,000 | 900,000 | ||||||||||||||||||
Gain / (Loss) from the entity's proportional ownership in joint venture | $ (662,000) | $ 0 | $ (1,146,000) | $ 0 | $ (200,000) | $ (800,000) | $ 300,000 |
Property, Plant and Equipment, net (Tables)
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9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of property, plant and equipment |
|
Net Change in Operating Assets and Liabilities
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Change in Operating Assets and Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Change in Operating Assets and Liabilities | Net Change in Operating Assets and Liabilities Net change in operating assets and liabilities, net of the effects of acquisitions and dispositions, consists of the following:
Net cash provided by (used in) operating activities related to changes in operating assets and liabilities, net of the effects of acquisitions and dispositions, consist of the following:
|
Acquisitions (Details)
|
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | 12 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
USD ($)
|
Sep. 30, 2012
USD ($)
|
Dec. 31, 2011
USD ($)
|
Sep. 30, 2011
USD ($)
|
Jun. 30, 2011
USD ($)
|
Mar. 31, 2011
USD ($)
|
Dec. 31, 2010
USD ($)
|
Sep. 30, 2010
USD ($)
|
Jun. 30, 2010
USD ($)
|
Mar. 31, 2010
USD ($)
|
Sep. 30, 2012
USD ($)
|
Sep. 30, 2011
USD ($)
|
Dec. 31, 2011
USD ($)
|
Dec. 31, 2010
USD ($)
|
Dec. 31, 2009
USD ($)
|
Jun. 12, 2012
USD ($)
|
Mar. 28, 2012
CAD
|
Oct. 31, 2011
Molycorp Sillamae
USD ($)
|
Apr. 30, 2011
Molycorp Sillamae
|
Dec. 31, 2011
Molycorp Sillamae
USD ($)
|
Dec. 31, 2011
Molycorp Sillamae
USD ($)
metrictonne
|
Oct. 24, 2011
Molycorp Sillamae
USD ($)
|
Apr. 02, 2011
Molycorp Sillamae
USD ($)
|
Apr. 30, 2011
Molycorp Sillamae
AS Silmet Grupp
USD ($)
|
Apr. 02, 2011
Molycorp Sillamae
AS Silmet Grupp
|
Dec. 31, 2010
Molycorp Sillamae
AS Silmet Grupp
|
Apr. 02, 2011
Molycorp Sillamae
Treibacher Industrie AG
USD ($)
|
Dec. 31, 2011
Molycorp Tolleson
USD ($)
|
Dec. 31, 2011
Molycorp Tolleson
USD ($)
|
Dec. 31, 2010
Molycorp Tolleson
USD ($)
|
Apr. 14, 2011
Molycorp Tolleson
USD ($)
|
Apr. 30, 2011
Molycorp Tolleson
Santoku
|
Oct. 31, 2011
Molycorp Silmet
USD ($)
|
Sep. 30, 2012
Molycorp Silmet
Mg
|
Sep. 30, 2011
Molycorp Silmet
USD ($)
|
Oct. 24, 2011
Molycorp Silmet
USD ($)
|
Apr. 02, 2011
Molycorp Silmet
USD ($)
|
Apr. 30, 2011
Molycorp Silmet
AS Silmet Grupp
USD ($)
|
Mar. 31, 2012
Molycorp Silmet
AS Silmet Grupp
|
Apr. 02, 2011
Molycorp Silmet
AS Silmet Grupp
|
Apr. 02, 2011
Molycorp Silmet
Treibacher Industries AG
USD ($)
|
Sep. 30, 2012
MMA
USD ($)
|
Apr. 16, 2011
MMA
USD ($)
|
Apr. 30, 2011
MMA
Santoku
|
Sep. 30, 2012
Molycorp Canada
USD ($)
|
Sep. 30, 2012
Molycorp Canada
USD ($)
|
Jun. 12, 2012
Molycorp Canada
USD ($)
|
Jun. 12, 2012
Molycorp Canada
CAD
|
Dec. 31, 2011
Molycorp Sillamäe and Molycorp Tolleson [Member]
USD ($)
|
Dec. 31, 2010
Molycorp Sillamäe and Molycorp Tolleson [Member]
USD ($)
|
Jun. 30, 2012
MCP Exchangeco Inc.
|
Jun. 30, 2012
MCP Exchangeco Inc.
Molycorp Canada
|
Jun. 12, 2012
MCP Exchangeco Inc.
Molycorp Canada
|
Jun. 30, 2012
Molycorp
|
Jun. 30, 2012
Molycorp
Molycorp Canada
|
Jun. 12, 2012
Molycorp
Molycorp Canada
|
Dec. 31, 2011
Customer relationships
|
Dec. 31, 2011
Customer relationships
Molycorp Sillamae
|
Sep. 30, 2012
Customer relationships
Molycorp Silmet
|
Sep. 30, 2012
Customer relationships
Molycorp Canada
|
Jun. 12, 2012
Customer relationships
Molycorp Canada
USD ($)
|
Sep. 30, 2012
Rare Earth Quotas
Molycorp Canada
|
Jun. 12, 2012
Rare Earth Quotas
Molycorp Canada
USD ($)
|
Sep. 30, 2012
Patents
Molycorp Canada
|
Jun. 12, 2012
Patents
Molycorp Canada
USD ($)
|
Dec. 31, 2011
Trade name
|
Sep. 30, 2012
Trade name
Molycorp Canada
|
Jun. 12, 2012
Trade name
Molycorp Canada
USD ($)
|
Sep. 30, 2012
Other
Molycorp Canada
|
Jun. 12, 2012
Other
Molycorp Canada
USD ($)
|
Sep. 30, 2012
Secured Debt
10% Senior Securied Notes, net of discount, due June 2020
|
||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (loss) income attributable to Molycorp stockholders | $ (18,891,000) | $ 26,579,000 | $ 45,356,000 | $ 47,787,000 | $ (2,198,000) | $ (9,589,000) | $ (10,145,000) | $ (23,291,000) | $ (7,749,000) | $ (89,976,000) | $ 90,947,000 | $ 117,526,000 | $ (50,774,000) | $ (28,587,000) | $ 117,526,000 | $ 12,763,000 | $ 7,877,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of Transaction with Noncontrolling Interest on Equity Attributable to Parent Decrease in Equity for Purchase of Minority Interest | 10,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from External Customers | 205,604,000 | 138,050,000 | 394,651,000 | 263,927,000 | 396,831,000 | 86,496,000 | 56,772,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Transaction Costs [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate development: Legal, accounting and advisory fees | 1,073,000 | 573,000 | 19,379,000 | 3,889,000 | 465,000 | 16,498,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other expenses: Contingent forward contracts | 11.30 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense: Bridge loan fee | 0.4242 | 0.4242 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest acquired (as a percent) | 9.977% | 90.023% | 80.00% | 80.00% | 10.023% | 9.977% | 90.023% | 80.00% | 10.023% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase consideration: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash consideration | 10,000,000 | 9,021,000 | 9,000,000 | 17,500,000 | 10,000,000 | 9,021,000 | 9,000,000 | 17,500,000 | 908,181,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of Molycorp common stock issued | 284,100,000 | 72,653,000 | 72,653,000 | 0 | 284,144,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total purchase consideration | 81,674,000 | 17,500,000 | 81,674,000 | 17,500,000 | 1,192,325,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notional amount of derivatives | 870,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The fair values of the assets and liabilities acquired: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalent | 105,000 | 6,395,000 | 105,000 | 6,395,000 | 317,169,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts receivable | 101,470,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts receivable and other current assets | 8,626,000 | 5,474,000 | 8,626,000 | 5,474,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | 37,404,000 | 11,327,000 | 37,404,000 | 11,327,000 | 250,989,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 26,893,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, plant and equipment | 63,393,000 | 4,512,000 | 63,393,000 | 4,512,000 | 70,391,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | 21,019,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangibles | 2,669,000 | 2,669,000 | 0 | 491,786,000 | 348,100,000 | 80,300,000 | 39,800,000 | 15,800,000 | 7,800,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | 1,455,000 | 1,977,000 | 1,455,000 | 1,977,000 | 501,571,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other non-current assets | 22,859,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts payable and accrued expenses | (138,576,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt - current | (255,056,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other current liabilities | (29,939,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities | (19,974,000) | (8,989,000) | (19,974,000) | (8,989,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred tax liabilities | (3,196,000) | 0 | (3,196,000) | (158,177,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt | (3,184,000) | (3,184,000) | 0 | (281,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other non-current liabilities | (14,032,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interest | (8,820,000) | (8,820,000) | 0 | (15,761,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total purchase consideration | 81,674,000 | 17,500,000 | 81,674,000 | 17,500,000 | 1,192,325,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of trade receivable acquired | 101,500,000 | 101,500,000 | 5,000,000 | 4,900,000 | 5,000,000 | 4,900,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average useful life (in years) | 15 years | 11 years | 2 years | 10 years | 12 years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited proforma | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales | 162,764,000 | 206,397,000 | 385,889,000 | 729,469,000 | 860,707,000 | 1,196,876,000 | 297,400,000 | 430,305,000 | 85,549,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income (Loss) | 1,118,000 | 1,165,000 | 108,386,000 | (74,229,000) | 200,951,000 | 241,897,000 | 104,170,000 | 105,397,000 | (30,920,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income (Loss) Attributable To Molycorp | (2,322,000) | (2,955,000) | 105,947,000 | (82,056,000) | 192,300,000 | 231,766,000 | 103,457,000 | 104,590,000 | (31,329,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EPS Basic (in dollars per share) | $ (0.02) | $ (0.03) | $ 0.94 | $ (0.77) | $ 1.69 | $ 2.03 | $ 1.17 | $ 1.13 | $ (0.50) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other actual and pro forma information | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intercompany sales | 0 | 0 | 0 | 0 | 0 | 13,900,000 | 19,600,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-recurring acquisition related costs | 2,100,000 | 1,500,000 | 600,000 | 1,800,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase price variance capitalized | 1,100,000 | 2,900,000 | 1,100,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited Pro forma intercompany sales | 69,100,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pro forma intercompany earnings | 28,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intercompany earnings | 8,400,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intercompany costs | 5,600,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finite-Lived Assets, Useful Life, Minimum | 2 years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finite-Lived Assets, Useful Life, Maximum | 30 years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 10.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DIrect Transaction Expenses Excluded from Nonrecurring Expense | 115,200,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other disclosures | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued to acquire the entity (in shares) | 1,593,419 | 1,593,419 | 507,203 | 507,203 | 13,545,426 | 13,545,426 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Period of marketing and distribution agreement (in years) | 5 years | 5 years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustments to Additional Paid in Capital | 400,000 | 400,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of consecutive trading days considered for calculation of closing price | 20 days | 20 days | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contractual value of shares issued to acquire the entity | 80,000,000 | 80,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Increase in rare earth production capacity (in mt) | 3,000 | 3,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Period of rare earth products purchase and supply agreement (in years) | 2 years | 2 years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discount percentage deducted from common stock price | 23.00% | 23.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finite-Lived Intangible Assets, Average Useful Life | 15 years | 15 years | 15 years | 12 years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Cost of Acquired Entity, Contingent Forward Contract Loss | 0 | 37,589,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Cost of Acquired Entity, Bridge Loan Fee | 0 | 7,937,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recognized Transaction Costs | 500,000 | 62,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | (15,451,000) | 26,674,000 | 45,101,000 | 48,755,000 | (2,198,000) | (85,856,000) | 91,660,000 | 118,334,000 | (50,774,000) | (28,587,000) | [1] | 13,571,000 | 7,877,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic (loss) earnings per share | $ (0.19) | $ 0.27 | $ 0.51 | $ 0.52 | $ (0.04) | $ (0.12) | $ (0.15) | $ (0.47) | $ (0.16) | $ (0.97) | $ 1.01 | $ 1.29 | $ (0.81) | $ (0.72) | $ 0.15 | $ 0.09 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of Transaction with Noncontrolling Interest on Equity Attributable to Parent Change from Net Income Attributable to Parent and Transfer to Noncontrolling Interest | $ 107,526,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Trade Accounts Receivable (Details) (USD $)
In Millions, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Receivables [Abstract] | ||
Allowance for doubtful accounts | $ 2.6 | $ 0 |
Commitments and Contingencies (Details 2) (USD $)
|
12 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2012
|
Dec. 31, 2011
Potential Environmental Obligations
onsite_evaportion_pond
|
Dec. 31, 2011
Mountain Pass facility
|
Dec. 31, 2011
Mountain Pass facility
Potential Environmental Obligations
liner
|
Dec. 31, 2011
Mountain Pass facility
Minimum
|
Dec. 31, 2011
Mountain Pass facility
Maximum
|
|
Commitments and Contingencies Disclosure [Abstract] | ||||||
Unrecorded Unconditional Purchase Obligation Due in Years One to Three | $ 1,798,000 | |||||
Plant Modernization and Expansion Commitments | ||||||
Unrecorded Unconditional Purchase Obligation, Due in Next Twelve Months | 284,534,000 | 269,900,000 | ||||
Potential Environmental Obligations | ||||||
Number of liner defects | 3 | 3 | ||||
Remediation costs, low estimate | 2,400,000 | 2,400,000 | ||||
Remediation costs, high estimate | 4,600,000 | 4,600,000 | ||||
Unrecorded Unconditional Purchase Obligation Balance on Second and Third Anniversaries | 15,000,000 | |||||
Contract Termination Charges | $ 9,700,000 | $ 12,500,000 |
Supplemental Cash Flow Information (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
|
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Supplemental Cash Flow Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of supplemental cash flow information | 2
|
Property, Plant and Equipment, net (Details) (USD $)
|
3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Dec. 31, 2011
|
Dec. 31, 2010
|
||||||
Property, plant and equipment | |||||||||||
Plant modernization and other capital costs | $ 218,100,000 | $ 108,500,000 | $ 728,200,000 | $ 222,800,000 | $ 416,800,000 | $ 38,600,000 | |||||
Capitalized interest related to plant modernization and other capitalized costs | 22,200,000 | 3,100,000 | 35,500,000 | 3,800,000 | |||||||
Capital expenditure on accrual basis | 185,500,000 | 102,200,000 | 664,100,000 | 208,200,000 | |||||||
Property, plant and equipment at cost | 1,400,727,000 | 1,400,727,000 | 584,865,000 | 104,226,000 | |||||||
Less accumulated depreciation | (37,283,000) | (37,283,000) | (23,237,000) | (10,260,000) | |||||||
Property, plant and equipment, net | 1,363,444,000 | 1,363,444,000 | 561,628,000 | 93,966,000 | |||||||
Land
|
|||||||||||
Property, plant and equipment | |||||||||||
Property, plant and equipment at cost | 12,292,000 | 12,292,000 | 11,059,000 | 800,000 | |||||||
Land improvements
|
|||||||||||
Property, plant and equipment | |||||||||||
Property, plant and equipment at cost | 63,268,000 | 63,268,000 | 15,748,000 | 15,415,000 | |||||||
Buildings and improvements
|
|||||||||||
Property, plant and equipment | |||||||||||
Property, plant and equipment at cost | 112,182,000 | 112,182,000 | 23,677,000 | 6,892,000 | |||||||
Plant and equipment
|
|||||||||||
Property, plant and equipment | |||||||||||
Property, plant and equipment at cost | 157,970,000 | 157,970,000 | 68,441,000 | 19,560,000 | |||||||
Vehicles
|
|||||||||||
Property, plant and equipment | |||||||||||
Property, plant and equipment at cost | 2,526,000 | 2,526,000 | 1,235,000 | 1,049,000 | |||||||
Computer software
|
|||||||||||
Property, plant and equipment | |||||||||||
Property, plant and equipment at cost | 5,067,000 | 5,067,000 | 3,002,000 | 1,563,000 | |||||||
Furniture and fixtures
|
|||||||||||
Property, plant and equipment | |||||||||||
Property, plant and equipment at cost | 733,000 | 733,000 | 464,000 | 170,000 | |||||||
Construction in progress
|
|||||||||||
Property, plant and equipment | |||||||||||
Property, plant and equipment at cost | 1,006,632,000 | [1] | 1,006,632,000 | [1] | 436,547,000 | [1] | 34,809,000 | ||||
Capital Leases
|
|||||||||||
Property, plant and equipment | |||||||||||
Property, plant and equipment at cost | 15,658,000 | 15,658,000 | 0 | ||||||||
Mineral properties
|
|||||||||||
Property, plant and equipment | |||||||||||
Property, plant and equipment at cost | $ 24,399,000 | $ 24,399,000 | $ 24,692,000 | $ 23,968,000 | |||||||
|
Earnings per Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Dec. 31, 2011
|
Sep. 30, 2011
|
Jun. 30, 2011
|
Mar. 31, 2011
|
Dec. 31, 2010
|
Sep. 30, 2010
|
Jun. 30, 2010
|
Mar. 31, 2010
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
||||||
Retained Earnings Adjustments [Line Items] | |||||||||||||||||||
Net (loss) income attributable to Molycorp stockholders | $ (18,891) | $ 26,579 | $ 45,356 | $ 47,787 | $ (2,198) | $ (9,589) | $ (10,145) | $ (23,291) | $ (7,749) | $ (89,976) | $ 90,947 | $ 117,526 | $ (50,774) | $ (28,587) | |||||
Cummulative undeclared and paid dividends on preferred stock | (2,846) | (2,846) | (8,539) | (7,116) | (9,962) | ||||||||||||||
(Loss) Income attributable to common stockholders | (21,737) | 42,510 | (98,515) | 83,831 | 107,564 | ||||||||||||||
Weighted average common shares outstanding - basic | 117,086,022 | 83,847,119 | [1] | 83,847,119 | 83,847,119 | [1] | 82,253,700 | [1] | 81,509,452 | 69,550,649 | 49,666,732 | 48,155,533 | 101,147,638 | 83,321,816 | 83,454,221 | 62,332,054 | 39,526,568 | ||
Basic (loss) earnings per share | $ (0.19) | $ 0.27 | $ 0.51 | $ 0.52 | $ (0.04) | $ (0.12) | $ (0.15) | $ (0.47) | $ (0.16) | $ (0.97) | $ 1.01 | $ 1.29 | $ (0.81) | $ (0.72) | |||||
Dilutive Securities, Effect on Basic Earnings Per Share, Other | 0 | 404 | 0 | 413 | |||||||||||||||
(Loss) income attributable to common stockholders adjusted for effect of dilution | $ (21,737) | $ 42,914 | $ (98,515) | $ 84,244 | $ 107,977 | ||||||||||||||
Weighted average common shares outstanding - diluted | 117,086,022 | 87,069,711 | [1] | 87,069,256 | 84,413,499 | [1] | 82,253,700 | [1] | 81,509,452 | 69,550,649 | 49,666,732 | 48,155,533 | 101,147,638 | 84,596,676 | 85,220,017 | 62,332,054 | 39,526,568 | ||
Diluted (loss) earnings per share | $ (0.19) | $ 0.26 | $ 0.49 | $ 0.52 | $ (0.04) | $ (0.12) | $ (0.15) | $ (0.47) | $ (0.16) | $ (0.97) | $ 1.00 | $ 1.27 | $ (0.81) | $ (0.72) | |||||
Convertible Debt | 3.25% Convertible Notes
|
|||||||||||||||||||
Retained Earnings Adjustments [Line Items] | |||||||||||||||||||
Interest rate | 3.25% | 3.25% | |||||||||||||||||
Convertible Debt | 6.00% Convertible Notes
|
|||||||||||||||||||
Retained Earnings Adjustments [Line Items] | |||||||||||||||||||
Interest rate | 6.00% | 6.00% | |||||||||||||||||
|
Accrued Expenses (Details) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
---|---|---|---|
Accrued Expenses | |||
Defined contribution plan | $ 1,928 | $ 1,088 | $ 1,199 |
Professional fees | 4,456 | 0 | |
Accrued payroll and related benefits | 8,246 | 3,024 | 1,185 |
Sales and use tax | 9,412 | 1,367 | 532 |
Bonus accrual | 3,683 | 4,845 | 554 |
Interest payable | 27,733 | 345 | 9 |
Advance from customer | 2,898 | 0 | |
Other accrued expenses | 7,933 | 2,229 | 342 |
Total accrued expenses | $ 66,289 | $ 12,898 | $ 4,225 |
Intangible Assets (Details) (USD $)
|
Sep. 30, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
---|---|---|---|
Intangible Assets | |||
Gross carrying amount | $ 495,403,000 | $ 3,455,000 | $ 786,000 |
Less accumulated amortization | (16,230,000) | (383,000) | (147,000) |
Net carrying amount | 479,173,000 | 3,072,000 | 639,000 |
Customer relationships
|
|||
Intangible Assets | |||
Gross carrying amount | 350,925,000 | 2,153,000 | 0 |
Rare earth quotas
|
|||
Intangible Assets | |||
Gross carrying amount | 80,300,000 | 0 | |
Patents
|
|||
Intangible Assets | |||
Gross carrying amount | 39,753,000 | 0 | |
Trade name
|
|||
Intangible Assets | |||
Gross carrying amount | 16,586,000 | 786,000 | 786,000 |
Land use rights
|
|||
Intangible Assets | |||
Gross carrying amount | 3,420,000 | 0 | |
Other
|
|||
Intangible Assets | |||
Gross carrying amount | 4,419,000 | 516,000 | 0 |
Molycorp Canada
|
|||
Intangible Assets | |||
Intangibles acquired in Molycorp Canada acquisition | $ 476,400,000 |
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Details 7) (Details) (USD $)
|
3 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | |||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Dec. 31, 2011
|
Sep. 30, 2011
|
Jun. 30, 2011
|
Mar. 31, 2011
|
Dec. 31, 2010
|
Sep. 30, 2010
|
Jun. 30, 2010
|
Mar. 31, 2010
|
Sep. 30, 2012
|
Dec. 31, 2011
|
Sep. 30, 2011
|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
Jun. 12, 2012
|
Feb. 28, 2011
Series A Mandatory Convertible Preferred Stock
|
Sep. 30, 2012
Series A Mandatory Convertible Preferred Stock
|
Sep. 30, 2012
Series A Mandatory Convertible Preferred Stock
|
Dec. 31, 2011
Series A Mandatory Convertible Preferred Stock
|
Feb. 16, 2011
Series A Mandatory Convertible Preferred Stock
|
Sep. 30, 2012
Common Stock
|
Sep. 30, 2012
Common Stock
|
Dec. 31, 2010
Common Stock
|
Dec. 31, 2011
Common Stock
|
Dec. 31, 2010
Common Class A
|
Dec. 31, 2009
Common Class A
|
Dec. 31, 2008
Common Class A
|
Dec. 31, 2010
Incentive Shares
Common Stock
|
Sep. 30, 2012
Restricted Stock
|
Dec. 31, 2011
Restricted Stock
|
Dec. 31, 2010
Restricted Stock
|
Nov. 04, 2010
Restricted Stock
|
Dec. 31, 2011
Minimum
Series A Mandatory Convertible Preferred Stock
|
Dec. 31, 2011
Maximum
Series A Mandatory Convertible Preferred Stock
|
Oct. 31, 2011
Molycorp Sillamae
|
Dec. 31, 2011
Molycorp Sillamae
|
Oct. 24, 2011
Molycorp Sillamae
|
Apr. 02, 2011
Molycorp Sillamae
|
Apr. 30, 2011
AS Silmet Grupp
Molycorp Sillamae
|
Apr. 02, 2011
AS Silmet Grupp
Molycorp Sillamae
|
Dec. 31, 2010
AS Silmet Grupp
Molycorp Sillamae
|
||||||
Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||
Loss from Translation of Intercompany Balances Included in Foreign Currency Transaction and Translation Adjustment | $ 2,700,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Shares outstanding | 2,070,000 | 2,070,000 | 2,070,000 | 137,957,451 | 137,957,451 | 82,291,200 | 83,896,043 | 44,998,185 | 38,829,225 | ||||||||||||||||||||||||||||||||||||||
Capital contributions | 390,225,000 | 0 | 0 | 15,000,000 | 18,004,000 | 15,000,000 | |||||||||||||||||||||||||||||||||||||||||
Stock issued during the period, shares | 99,723 | 13,800,000 | 5,767,670 | 3,844,858 | |||||||||||||||||||||||||||||||||||||||||||
Issuance of shares for conversion of convertible securities, shares | 50,892,260 | 50,892,260 | 2,232,740 | ||||||||||||||||||||||||||||||||||||||||||||
Proceeds from Issuance Initial Public Offering | 0 | 378,633,000 | 0 | 378,600,000 | |||||||||||||||||||||||||||||||||||||||||||
Exchange shares issued | 29,128,700 | ||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock issued | 37,500 | ||||||||||||||||||||||||||||||||||||||||||||||
Fair value of restricted stock | $ 40.09 | $ 40.20 | $ 36.51 | $ 36.51 | |||||||||||||||||||||||||||||||||||||||||||
Dividend rate (as a percent) | 5.50% | 5.50% | |||||||||||||||||||||||||||||||||||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||||||||||||||||
Preferred Stock, Shares Issued | 1,800,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Mandatory Convertible Preferred Stock Price Per Share | $ 100 | ||||||||||||||||||||||||||||||||||||||||||||||
Underwriter option to purchase additional shares | 270,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Convertible Preferred Stock, Shares Issued upon Conversion | 1.6667 | 2.0000 | |||||||||||||||||||||||||||||||||||||||||||||
Net proceeds from sale of preferred stock | 0 | 199,642,000 | 199,642,000 | 0 | 0 | 199,600,000 | |||||||||||||||||||||||||||||||||||||||||
Payments of preferred dividends | 8,539,000 | 6,167,000 | 9,015,000 | 0 | 0 | 2,800,000 | 8,500,000 | 9,000,000 | |||||||||||||||||||||||||||||||||||||||
Interest acquired (as a percent) | 9.977% | 90.023% | 80.00% | 80.00% | |||||||||||||||||||||||||||||||||||||||||||
Common stock issued to acquire the entity (in shares) | 1,593,419 | ||||||||||||||||||||||||||||||||||||||||||||||
Fair value of Molycorp common stock issued | 284,100,000 | 72,653,000 | |||||||||||||||||||||||||||||||||||||||||||||
Cash consideration | 10,000,000 | 9,021,000 | |||||||||||||||||||||||||||||||||||||||||||||
Adjustments to Additional Paid in Capital | 400,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | 526,000 | (5,564,000) | (1,165,000) | 8,500,000 | (4,240,000) | (8,481,000) | 0 | 0 | |||||||||||||||||||||||||||||||||||||||
Net (loss) income attributable to Molycorp stockholders | (18,891,000) | 26,579,000 | 45,356,000 | 47,787,000 | (2,198,000) | (9,589,000) | (10,145,000) | (23,291,000) | (7,749,000) | (89,976,000) | 90,947,000 | 117,526,000 | (50,774,000) | (28,587,000) | 117,526,000 | 12,763,000 | |||||||||||||||||||||||||||||||
Cummulative undeclared and paid dividends on preferred stock | (2,846,000) | (2,846,000) | (8,539,000) | (7,116,000) | (9,962,000) | ||||||||||||||||||||||||||||||||||||||||||
(Loss) Income attributable to common stockholders | (21,737,000) | 42,510,000 | (98,515,000) | 83,831,000 | 107,564,000 | ||||||||||||||||||||||||||||||||||||||||||
Weighted average common shares outstanding - basic | 117,086,022 | 83,847,119 | [1] | 83,847,119 | 83,847,119 | [1] | 82,253,700 | [1] | 81,509,452 | 69,550,649 | 49,666,732 | 48,155,533 | 101,147,638 | 83,321,816 | 83,454,221 | 62,332,054 | 39,526,568 | ||||||||||||||||||||||||||||||
Basic (loss) earnings per share | $ (0.19) | $ 0.27 | $ 0.51 | $ 0.52 | $ (0.04) | $ (0.12) | $ (0.15) | $ (0.47) | $ (0.16) | $ (0.97) | $ 1.01 | $ 1.29 | $ (0.81) | $ (0.72) | $ 0.15 | ||||||||||||||||||||||||||||||||
Effect of dilutive Notes | 413,000 | ||||||||||||||||||||||||||||||||||||||||||||||
(Loss) income attributable to common stockholders adjusted for effect of dilution | $ (21,737,000) | $ 42,914,000 | $ (98,515,000) | $ 84,244,000 | $ 107,977,000 | ||||||||||||||||||||||||||||||||||||||||||
Weighted average common shares outstanding - diluted | 117,086,022 | 87,069,711 | [1] | 87,069,256 | 84,413,499 | [1] | 82,253,700 | [1] | 81,509,452 | 69,550,649 | 49,666,732 | 48,155,533 | 101,147,638 | 84,596,676 | 85,220,017 | 62,332,054 | 39,526,568 | ||||||||||||||||||||||||||||||
Diluted (loss) earnings per share | $ (0.19) | $ 0.26 | $ 0.49 | $ 0.52 | $ (0.04) | $ (0.12) | $ (0.15) | $ (0.47) | $ (0.16) | $ (0.97) | $ 1.00 | $ 1.27 | $ (0.81) | $ (0.72) | |||||||||||||||||||||||||||||||||
|
Debt and Capital Lease Obligations
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
|
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt and Capital Lease Obligations On August 22, 2012, the Company issued of $360.0 million aggregate principal amount of its 6.00% Convertible Senior Notes due 2017 (the “6.00% Convertible Notes”). On August 28, 2012, the underwriters of the 6.00% Convertible Notes exercised their option to purchase an additional $54.0 million aggregate principal amount of the 6.00% Convertible Notes. Total net proceeds from the issuance of the 6.00% Convertible Notes were $395.7 million, after deducting the underwriting discounts and commissions. Certain of the Company's directors, officers and other related parties purchased $6.4 million of the aggregate principal amount of the 6.00% Convertible Notes, for which the Company did not pay any underwriting discounts and commissions. The 6.00% Convertible Notes are Molycorp's senior unsecured obligations with interest payable semi-annually in arrears on March 1 and September 1 of each year, commencing on March 1, 2013. The 6.00% Convertible Notes will mature on September 1, 2017, unless earlier repurchased, redeemed or converted in accordance with their terms, and will be convertible at any time prior to the second scheduled trading day immediately preceding the maturity date into shares of common stock, cash, or a combination thereof, at Molycorp's election. The conversion rate will initially be 83.333 shares of common stock per $1,000 principal amount of 6.00% Convertible Notes (equivalent to an initial conversion price of approximately $12 per share of common stock), subject to customary adjustments. Molycorp will have the right to redeem the 6.00% Convertible Notes on or after September 1, 2015 if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which Molycorp provides notice of redemption at a redemption price equal to 100% of the principal amount of the 6.00% Convertible Notes to be redeemed, plus accrued and unpaid interest. The 6.00% Convertible Notes rank equal in right of payment to existing and future liabilities that are not expressly subordinated to the 6.00% Convertible Notes, and rank effectively junior to Molycorp's existing and future secured indebtedness. The Company separately accounts for the liability and equity components of convertible debt instruments, such as the 6.00% Convertible Notes, that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer's economic interest cost. The additional discount on the liability component is amortized to interest cost over the term of the 6.00% Convertible Notes. The effective interest rate on the liability component is 4.6%. The equity component of the 6.00% Convertible Notes is included in the additional paid-in capital section of stockholders' equity on the condensed consolidated balance sheet as of September 30, 2012, and the value of the equity component is treated as original issue discount for purposes of accounting for the debt component of the 6.00% Convertible Notes. As of September 30, 2012, Molycorp recognized a liability component related to the 6.00% Convertible Notes of $328.5 million, which includes a cumulative accretion of $1.5 million related to both the underwriting discounts and the additional discount on the liability component, and an equity component of $68.7 million. The amount of interest costs recognized for the three months ended September 30, 2012 relating to both the contractual interest coupon and amortization of the discount on the liability component was $3.8 million, which was substantially capitalized. Transaction costs related to the issuance of the 6.00% Convertible Notes have been allocated to the liability and equity components in proportion to the allocation of proceeds to the components, and accounted for as debt issuance costs (recognized as interest expense over the life of the 6.00% Convertible Notes using the effective interest method) and equity issuance costs (charged against equity), respectively. Concurrently with, and in order to facilitate the offering of the 6.00% Convertible Notes, the Company entered into a share lending agreement with Morgan Stanley Capital Services LLC (“MSCS”), an affiliate of Morgan Stanley & Co. LLC, under which it agreed to loan to MSCS up to a total of 13,800,000 shares of its common stock (the “Borrowed Shares”)during a period beginning on the date the Company entered into the share lending agreement and ending on or about the maturity date of the 6.00% Convertible Notes, or, if earlier, on or about the date as of which all of the 6.00% Convertible Notes cease to be outstanding as a result of redemption, repurchase, conversion or other acquisition for value. MSCS may terminate all or any portion of the Borrowed Shares at any time, and the Company and MSCS may terminate any or all of the outstanding Borrowed Shares upon a default by the other party under the share lending agreement, including certain breaches by MSCS of its representations and warranties, covenants or agreements under the share lending agreement, or the bankruptcy of Molycorp or MSCS. The Company issued a total of 13,800,000 Borrowed Shares between August 22, 2012 and August 23, 2012 and received no proceeds, but only a nominal lending fee from MSCS for the use of these loaned shares, which represented the fair value assigned to it. For corporate law purposes, the Borrowed Shares are issued and outstanding. However, under the share lending agreement, MSCS has agreed: to pay to Molycorp an amount equal to cash dividends, if any, that Molycorp pays on the Borrowed Shares; to pay or deliver, as the case may be, to the Company any other distribution, other than in a liquidation or a reorganization in bankruptcy, that the Company makes on the Borrowed Shares; and not to vote on the Borrowed Shares on any matter submitted to a vote of Molycorp's stockholders. In view of the contractual undertakings of MSCS in the share lending agreement, which have the effect of substantially eliminating the economic dilution that otherwise would result from the issuance of the Borrowed Shares, the Borrowed Shares will not be considered outstanding for the purpose of computing and reporting Molycorp's earnings per share. On May 25, 2012, Molycorp issued $650.0 million aggregate principal amount of senior secured notes due 2020 (the "Senior Notes") in an offering exempt from the registration requirements of the Securities Act. Total net proceeds from the issuance of the Senior Notes were $635.4 million after deducting the initial purchasers' discounts. The Senior Notes bear interest at the rate of 10% per year payable on June 1 and December 1 of each year beginning on December 1, 2012. At any time and from time to time prior to June 1, 2016, the Company may redeem any of the Senior Notes at a price equal to 100% of the principal amount thereof plus an applicable make-whole premium and accrued and unpaid interest. At any time and from time to time from and after June 1, 2016, Molycorp may redeem the Senior Notes, in whole or in part, at a redemption price for the Senior Notes plus accrued and unpaid interest, initially at 105% of the principal amount thereof, but gradually declining to 100% of the principal amount thereof. In addition, at any time and from time to time prior to June 1, 2015, the Company may redeem up to 35% of the aggregate principal amount of the Senior Notes with the net cash proceeds of one or more permitted sales of Molycorp’s capital stock at a redemption price (expressed as a percentage of principal amount) of 110% plus accrued and unpaid interest. Upon the occurrence of a change of control, Molycorp will be required to offer to repurchase all of the Senior Notes. The Senior Notes are senior secured obligations of Molycorp and are guaranteed by certain of Molycorp’s domestic subsidiaries ("Guarantors"). The Senior Notes are secured by first-priority security interest on substantially all of the property and assets of the Company and the Guarantors, subject to a number of exceptions as described in the indenture governing the Senior Notes. A substantial portion of the net proceeds from the offering of the Senior Notes was used to fund the cash consideration the Company paid for Molycorp Canada, with the remainder used for general corporate purposes. The Company, the Guarantors and the initial purchasers of the Senior Notes agreed that the Company and the Guarantor will file an exchange offer registration statement with the SEC within 180 days of the May 25, 2012 issuance date, and use their respective commercially reasonable efforts to have it declared effective at the earliest possible time and in any event within 270 days following the issuance date. As a result of the Molycorp Canada acquisition, the Company assumed $230.0 million principal amount of subordinated unsecured convertible debentures of the predecessor of Molycorp Canada due December 2017 (the “Debentures”) maturing on December 31, 2017. The Debentures bear interest at 5.00% per annum and are convertible at $13.80 per share of Molycorp Canada's predecessor company. As required under the change of control provisions contained in the original underlying indenture, holders of the Debentures had the option to either require the Company to repurchase the Debentures at par plus accrued interest, convert the Debentures into common shares of Molycorp Canada's predecessor company, including a number of additional “make-whole” shares, or hold the Debentures to maturity. In August 2012, holders of $9.4 million aggregate principal amount of Debentures elected to convert, while holders of $217.9 million aggregate principal amount of Debentures elected to early redeem their Debentures for cash plus accrued interest. Under the term of the indenture governing the Debentures, as amended at the time of the Molycorp Canada acquisition, the holders of the Debenture that converted received, at their election and in lieu of receiving shares of Molycorp Canada's predecessor company, the same cash and/or share consideration that was paid to Molycorp Canada's former shareholders in connection with the acquisition of Molycorp Canada, subject to the same pro-ration calculation, as if such holders had converted immediately prior to the acquisition. As a result of the conversion, a total of $8.0 million, including accrued interest, was paid in cash with the remainder converted into 99,723 shares of Molycorp common stock. Total interest cost related to the Debentures for the period from June 12, 2012 to September 30, 2012 was $0.6 million, inclusive of the interest accrued and paid upon the August 2012 repurchase. As of September 30, 2012, $2.7 million principal amount of the Debentures was outstanding. Additional short-term indebtedness was assumed as part of the acquisition of Molycorp Canada totaling $31.5 million, at September 30, 2012, which relates to various bank loans maturing between July 2012 and December 2012 with a weighted average interest rate of approximately 4.22%. On September 1, 2010, Molycorp and Kern River entered into a firm Transportation Service Agreement ("TSA") under which Kern River agreed to construct and operate facilities necessary to provide natural gas transportation services to the Mountain Pass facility. Under the terms of the TSA, Molycorp agreed to pay Kern River for the cost attributable to the design, permitting, and construction of the delivery facilities through a transportation service charge of approximately $0.4 million per month for ten years. This charge includes reimbursement to Kern River for construction of the delivery facilities and installation, as well as reimbursement and compensation for transportation services. The term of the TSA commenced on June 1, 2012, the date on which Kern River deemed the TSA facilities ready to provide service. The Company accounted for the TSA as a capital lease under the relevant accounting guidance. The following tables provide a summary of the current and non-current portions of the debt outstanding at September 30, 2012 and December 31, 2011 (in thousands):
Scheduled minimum debt repayments are $31.7 million for the remainder of 2012, $1.4 million in 2013, $1.4 million in 2014, $1.3 million in 2015, $230.7 million in 2016, $417.3 million in 2017 and $650.0 million thereafter. |
Asset Retirement Obligation (Tables)
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Sep. 30, 2012
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Asset Retirement Obligation Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of activity in asset retirement obligation |
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Summary of Significant Accounting Policies (Policies)
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Sep. 30, 2012
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Use of Estimates |
The preparation of the financial statements, in accordance with generally accepted accounting principles in the United States of America (“GAAP”), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on the Company’s historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ significantly from these estimates under different assumptions and conditions. Significant estimates made by management in the accompanying financial statements include the collectability of accounts receivable, the recoverability of inventory, the useful lives and recoverability of long-lived assets such as property, plant and equipment, intangible assets and investments, the fair values of assets acquired and liabilities assumed, including business combinations, and the adequacy of the Company’s asset retirement obligations. |
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Sales and Cost of Goods Sold |
Sales are recognized when persuasive evidence of an arrangement exists, the risks and rewards of ownership have been transferred to the customer, which is generally when title passes, the selling price is fixed or determinable, and collection is reasonably assured. Title generally passes upon shipment of product from the Company’s production facilities. Prices are generally set at the time of, or prior to, shipment. Transportation and distribution costs are incurred only on sales for which the Company is responsible for delivering the product. Cost of goods sold includes the cost of production as well as write downs to the extent of inventory costs in excess of market values. Primary production costs include labor, raw materials, supplies, maintenance costs, depreciation, and plant overhead. |
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Cash and Cash Equivalents |
Cash and cash equivalents consist of cash and liquid investments with an original maturity of three months or less. At December 31, 2011 and 2010, cash and cash equivalents included of $423.4 million and $316.4 million, respectively, of funds held in money market accounts. |
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Trade Accounts Receivable |
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company reviews the need for an allowance for doubtful accounts on a quarterly basis. As of December 31, 2011 and 2010, an allowance for doubtful accounts was not required. |
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Inventories |
Inventories consist of raw materials, work in process (“WIP”), finished goods, stockpiles of bastnasite concentrate, and materials and supplies. Inventory cost is determined using the lower of weighted average cost or estimated net realizable value. Inventory expected to be sold in the next 12 months is classified as a current asset in the consolidated balance sheets. During the fourth quarter of 2011, the Company purchased certain chemical products that will be used at the Molycorp Mountain Pass facility. These chemicals have an estimated useful life of approximately 20 years due to recycling and reuse in the new plant following completion of Project Phoenix Phase 1; accordingly, these chemicals have been classified as long-term raw materials in the consolidated balance sheet as of December 31, 2011. Molycorp evaluates its production levels and costs to determine if any should be deemed abnormal, and therefore excluded from inventory costs. For the years ended December 31, 2011, 2010 and 2009, Molycorp determined that approximately $4.3 million, $11.0 million, and $2.5 million, respectively, of production costs would have been allocated to additional tons produced, assuming Molycorp had been operating at normal production rates. As a result, these costs were excluded from inventory and instead expensed during the applicable periods. The assessment of normal production levels is judgmental and is unique to each quarter. Molycorp models normal production levels and evaluates historical ranges of production in assessing what is deemed to be normal. Write-downs to estimated net realizable value are charged to cost of goods sold. Many factors influence the market prices for REOs and, in the absence of established prices contained in customer contracts, management uses an independent pricing source to evaluate market prices for REOs at the end of each quarter. For the years ended December 31, 2011, 2010 and 2009 the Company recognized write-downs of $2.8 million, $2.5 million, and $9.0 million, respectively, as a result of production costs in excess of certain REO market prices. In addition, during the year ended December 31, 2011 and in the fourth quarter of 2010 Molycorp recognized a $2.3 million and $1.7 million write-down of WIP inventory based on estimated REO quantities, respectively. Also in the fourth quarter of 2010, a $1.0 million write-down of bastnasite stockpile inventory was recognized based on estimated REO quantities. The level within the fair value hierarchy in which the write-downs of inventory are included is the significant other observable inputs—Level 2. The Company evaluates the carrying value of materials and supply inventories each quarter giving consideration to slow-moving items, obsolescence, excessive levels, and other factors and recognizes related write-downs as necessary. At December 31, 2011 and 2010, inventory consisted of the following (in thousands):
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Deposits |
The Company had $23.3 million and $26.2 million in deposits reported as Non-current assets on the Consolidated Balance Sheets as of December 31, 2011 and 2010, respectively. The $23.3 million deposits as of December 31, 2011 consisted of $20.6 million under the escrow arrangement for the Company’s facilities agreement with Kern River Gas Transmission Company, $1.5 million related to the Company’s construction insurance program, and $1.2 million related primarily to other restricted cash requirements. During the second quarter of 2011, the Company collected an $18.2 million deposit which was no longer required to secure surety bonds obtained for the California state and regional agencies relating to the Molycorp Mountain Pass facility closure and reclamation obligations. The $26.2 million deposits as of December 31, 2010 consisted of $18.2 million collateral used to secure surety bonds obtained for the California state and regional agencies relating to our Molycorp Mountain Pass facility closure and reclamation obligations, and $8.0 million under the escrow arrangement for the Company’s facilities agreement with Kern River Gas Transmission Company. |
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Property, Plant and Equipment, net |
Property, plant and equipment associated with the acquisitions of the Molycorp Mountain Pass facility, Molycorp Sillamäe and Molycorp Tolleson were recorded at estimated fair value as of the acquisition date. Expenditures for new property, plant and equipment and improvements that extend the useful life or functionality of the asset are capitalized. The Company capitalized $416.8 million and $38.6 million in plant modernization and other capital costs for the years ended December 31, 2011 and 2010, respectively. These amounts include capitalized interest of $7.5 million in 2011 and $0.1 million in 2010. Depreciation on plant and equipment is calculated using the straight-line method over the estimated useful lives of the assets. Depreciation expense for the years ended December 31, 2011, 2010 and 2009, was $14.0 million, $6.0 million and $3.9 million, respectively. Maintenance costs are expensed as incurred. Mineral properties at December 31, 2011 and 2010, represent the purchase price allocated to mineral resources associated with the Molycorp Mountain Pass facility and mineral property development costs (see Note 4(h) below). At December 31, 2011 and 2010, property, plant and equipment and related useful lives were as follows (in thousands):
In accordance with Accounting Standard Codification (“ASC”) 360, Property Plant and Equipment, long-lived assets such as property, plant, and equipment, mineral properties and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. There were no events or changes in circumstances indicating that the carrying amount of the Company’s long-lived assets as of December 31, 2011 may not be recoverable. Molycorp recognized a $3.1 million, net of depreciation, impairment expense associated with the mill and crusher, including the associated asset retirement cost, which was included in cost of goods sold in the consolidated statement of operations for the year ended December 31, 2010, as a result of managements’ decision to replace rather than refurbish these assets. |
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Mineral Properties and Development Costs |
Mineral properties and development costs, which are referred to collectively as mineral properties, include acquisition costs, drilling costs, and the cost of other development work, all of which are capitalized. The Company depletes mineral properties using the units of production method over estimated proven and probable reserves. Molycorp’s proven and probable reserves are based on extensive drilling, sampling, mine modeling, and mineral recovery from which economic feasibility has been determined. The proven and probable reserves are estimated based on information available at the time the reserves are calculated. Proven and probable reserves are based on estimates, and no assurance can be given that the indicated levels of recovery of REOs will be realized or that production costs and estimated future development costs will not exceed the net realizable value of the products. Reserve estimates may require revisions based on actual production experience. Market price fluctuations of REOs, as well as increased production costs or reduced recovery rates, could render proven and probable reserves containing relatively lower grades of mineralization uneconomic to exploit and might result in a reduction of reserves. |
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Research and Development |
The Company has invested significant resources to improve the efficiency of its REO processing operations and the development of new applications for individual REEs. For the years ended December 31, 2011, 2010 and 2009, the Company spent $8.3 million, $2.5 million and $1.5 million, respectively, on research and development. These costs are recognized under the “Selling, general and administrative” line on the consolidated statements of operations and consist primarily of salaries, outside labor, material and equipment. |
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Intangible Assets |
The Company acquired its trade name in connection with the Molycorp Mountain Pass facility acquisition. Amortization on the trade name is provided using the straight-line method based on an estimated useful life of 12 years. In connection with the acquisition of Molycorp Sillamäe, the Company acquired certain customer relationships, which are amortized using the straight-line method based on an estimated useful life of 15 years. At December 31, 2011 and December 31, 2010, amortizable intangible assets consisted of the following (in thousands):
Amortization expense for the years ended December 30, 2011, 2010 and 2009 was $236,795, $65,000 and $65,000, respectively. Amortization expense for the next five years and thereafter is expected to be as follows (in thousands):
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Investment in Joint Ventures |
In connection with the Molycorp Mountain Pass facility acquisition, the Company acquired a one-third interest in a joint venture with Sumitomo Metals Industries, Ltd. of Japan (“Sumitomo Metals”) called Sumikin Molycorp (“SMO”). The Company sold its interest in the joint venture to Sumitomo Metals on July 9, 2009 for cash consideration of $9.7 million and recognized no gain. |
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Investments in non-marketable securities |
The Company accounts for investments in non-marketable equity securities for which it does not have the ability to exercise significant influence over the investee’s operations and financial policies under the cost method of accounting. Cost method investments are carried at cost and are subject to other-than-temporary impairment assessments. On September 13, 2011, the Company invested $20.0 million into Boulder Wind Power, Inc. Series B convertible preferred stock, which is accounted for at cost. As of December 31, 2011, the fair value of this investment was not estimated as there were no identified events or changes in circumstances that may have had a significant adverse effect on the fair value of the investment. |
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Asset Retirement Obligation |
The Company accounts for reclamation costs, along with other costs related to the closure of the Molycorp Mountain Pass facility, in accordance with ASC 410-20, Asset Retirement Obligations. This standard requires the Company to recognize asset retirement obligations at estimated fair value in the period in which the obligation is incurred. The Company recognized an asset retirement obligation and corresponding asset retirement cost of $13.3 million in connection with the Molycorp Mountain Pass facility acquisition. The liability was initially measured at fair value and is subsequently adjusted for accretion expense and changes in the amount or timing of the estimated cash flows. The asset retirement cost was capitalized as part of the carrying amount of the related long-lived assets and is being depreciated over the assets’ remaining useful lives. In connection with an updated asset retirement obligation analysis prepared as of June 30, 2010, the Company determined that its asset retirement obligation was overstated by approximately $2.5 million as a result of not reducing its prior estimate for costs of soil remediation performed prior to the Company’s acquisition of the Molycorp Mountain Pass facility. Because the depreciation of the overstated asset retirement costs and accretion of the asset retirement obligation had an immaterial impact on the Company’s net loss for all periods previously presented and cumulatively since inception, the Company reduced its asset retirement cost asset and asset retirement obligation by approximately $2.5 million effective April 1, 2010. On November 4, 2010, the Board approved an expanded budget which accelerated the removal of the crusher and milling facility, which resulted in a $0.6 million increase in the asset retirement obligation. During 2011, the Company increased the asset retirement obligation by $2.5 million in connection with the construction of buildings and other infrastructures related to Project Phoenix Phase 1 and Project Phoenix Phase 2. Depreciation expense associated with the asset retirement cost was $1.0 million, $1.1 million and $1.2 million for the years ended December 31, 2011, 2010 and 2009, respectively. The following table presents the activity in the Company’s asset retirement obligation (in thousands):
The Company is required to provide the applicable governmental agencies with financial assurances relating to its closure and reclamation obligations. As of December 31, 2011 and 2010, the Company had financial assurance requirements of $27.6 million which were satisfied with surety bonds placed with the California state and regional agencies. |
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Debt |
On June 15, 2011, the Company completed the issuance and sale of $230.0 million aggregate principal amount (net proceeds of $223.1 million after deducting the initial purchasers’ discounts and commissions) of its 3.25% Convertible Notes due 2016 (the “Notes”) in an offering exempt from the registration requirements of the Securities Act of 1933 (the “Securities Act”). The Notes were offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The Notes are senior unsecured obligations of the Company and bear interest at a rate of 3.25% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, commencing on December 15, 2011. The Notes are convertible at any time into shares of Molycorp’s common stock, cash, or a combination thereof, at Molycorp’s election. The initial conversion rate is 14.0056 shares of Molycorp common stock per $1,000 principal amount of the Notes (equivalent to an initial conversion price of approximately $71.40 per share of Molycorp’s common stock), subject to customary adjustments. The Notes mature on June 15, 2016, unless repurchased or converted in accordance with their terms. Molycorp does not have the right to redeem the Notes prior to maturity. The Company separately accounts for the liability and equity components of convertible debt instruments, such as the Notes, that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost. The equity component of the Notes is included in the additional paid-in capital section of stockholders’ equity on the consolidated balance sheet as of December 31, 2011, and the value of the equity component is treated as original issue discount for purposes of accounting for the debt component of the Notes. As of December 31, 2011, Molycorp recognized a liability component related to the Notes of $190.9 million, which includes accretion of $4.1 million of the original issue discount ($3.4 million capitalized and $0.7 million expensed), and an equity component of $36.2 million. Transaction costs related to the issuance of the Notes have been allocated to the liability and equity components in proportion to the allocation of proceeds to the components, and accounted for as debt issuance costs (recognized as interest expense over the life of the Notes using the effective interest method) and equity issuance costs (charged against equity), respectively. Total interest cost related to the Notes in 2011 was $8.1 million of which $7.4 million was capitalized at December 31, 2011. Additional debt was assumed as part of the Molycorp Sillamäe acquisition. The following table provides a summary of the current and non-current portions of the debt outstanding as of December 31, 2011 (in thousands):
Scheduled minimum debt repayments in thousands are $1,516 in 2012, $1,495 in 2013, $1,495 in 2014, $1,420 in 2015, $230,803 in 2016 and $455 thereafter. |
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Income Taxes |
We are a Subchapter C corporation and, therefore, are subject to federal and state income taxes on our taxable income, whereas prior to our Corporate Reorganization, we operated entirely within limited liability companies, which were not directly liable for the payment of federal or state income taxes and our taxable income or loss was included in the state and federal tax returns of Molycorp, LLC’s members. We account for income taxes in accordance with Accounting Standard Codification 740, Income Taxes. This guidance requires that deferred tax assets and liabilities be recognized for the tax effect of temporary differences between the financial statement and tax basis of recorded assets and liabilities at enacted statutory tax rates. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The recoverability of deferred tax assets is based on both our historical and anticipated earnings levels, and is reviewed each reporting period to determine if any additional valuation allowance is necessary when it is more likely than not that amounts will not be recovered. As of December 31, 2011, the Company’s net income of $75.4 million since the Corporate Reorganization included $31.1 million in certain stock based compensation expense, which is a permanent difference between its income for financial reporting and tax purposes. Other permanent differences include legal and due diligence fees related to the acquisitions that were completed in April 2011, as well as costs related to the registration of common stock sold by certain stockholders in secondary offerings completed during the first and second quarters of 2011. Molycorp had net deferred income tax liabilities of $20.3 million, as of December 31, 2011. Prior to the second quarter of 2011, Molycorp had a history of losses and, as a result, it recognized a full valuation allowance against its net deferred tax assets. As of December 31, 2011, Molycorp determined that it, more likely than not, will realize its deferred tax assets and we have concluded that no valuation allowance is required. In making this determination, management analyzed, among other things, the Company’s recent history of earnings and cash flows, forecasts of future earnings, and the nature and timing of future deductions and benefits represented by the deferred tax assets and liabilities. We have undistributed earnings of our foreign subsidiary at December 31, 2011, for which deferred taxes have not been provided. Such earnings are considered indefinitely invested in the foreign subsidiary. If such earnings were repatriated, additional tax expense may result, although the calculation of such additional taxes is not practicable. The net tax effect of the elimination in consolidation of intercompany balances and transactions resulted in a deferred charge and income tax payable of $7.3 million. Income tax expense for the year ended December 31, 2010 and December 31, 2009 was zero, as a 100% valuation allowance was required for the period after our Corporate Reorganization and for the period prior, the taxable income and losses of Molycorp, LLC were reported on the income tax returns of its members. Income tax expense consisted of the following for the year ended December 31, 2011 (in thousands):
The components of earnings before income taxes, by tax jurisdiction, are as follows for the years ended December 31, 2011, 2010 and 2009 (in thousands):
A reconciliation of the statutory federal income tax rate of 35% to Molycorp’s effective income tax rate is as follows for the year ended December 31, 2011 (in thousands):
The tax effect of temporary differences and net operating losses which give rise to deferred tax assets and liabilities consist of the following as of December 31, 2011 and 2010 (in thousands):
The Company’s liability for uncertain tax positions totaled $0.5 million and zero at December 31, 2011 and 2010, respectively. These amounts also include the related accrued interest and penalties associated with the uncertain tax positions, if applicable. The Company does not expect that the liability for uncertain tax positions will change significantly during the twelve months ended December 31, 2012; however, actual changes in the liability for uncertain tax positions could be different than currently expected. A rollforward of the liability for uncertain tax positions follows (in thousands):
The Company operates and accordingly files income tax returns in the U.S. federal jurisdiction, and various state jurisdictions and foreign jurisdiction. With few exceptions, the Company is no longer subject to U.S. federal, state and non-U.S. income tax examinations by tax authorities for years prior to 2008. The Company did not recognize accrued interest and penalties related to uncertain tax positions in income tax expense for the years ended December 31, 2011 and 2010, respectively. |
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Stockholders' Equity |
As of December 31, 2011 and 2010, the Company had 83,896,043 and 82,291,200 shares of common stock outstanding, respectively. For the year ended December 31, 2010, the Company received contributions from its stockholders totaling $15.0 million in exchange for 5,767,670 shares of Class A common stock prior to the completion of its initial public offering (“IPO”) of common stock. At the time of the IPO, an aggregate of 50,892,260 shares of Class A common stock were automatically converted into an aggregate of 50,892,260 shares of common stock. The Company also received net proceeds of $378.6 million after underwriter discounts and commissions and offering expenses paid by Molycorp, Inc. in exchange for the issuance of 29,128,700 shares of common stock. An additional 2,232,740 common shares were issued upon conversion of shares of Class B common stock held by certain employees and independent directors pursuant to incentive awards effective November 1, 2009. Also, On November 4, 2010, the Compensation Committee of the Board approved the grant of 37,500 shares of restricted stock with a fair value of 36.51 per share, with a three-year vesting period, to certain executive officers and a director of the Company. On February 16, 2011, Molycorp completed a public offering of its 5.50% Series A Mandatory Convertible Preferred Stock (“Convertible Preferred Stock”), $0.001 par value per share. In connection with this offering, the Company issued 1,800,000 shares of Convertible Preferred Stock for $100.00 per share. In addition, Molycorp granted the underwriters an option to purchase up to 270,000 additional shares of Convertible Preferred Stock to cover over-allotments. The underwriters exercised their option to purchase the additional shares of Convertible Preferred Stock on March 16, 2011. Each share of the Convertible Preferred Stock will automatically convert on March 1, 2014 into between 1.6667 and 2.0000 shares of Molycorp’s common stock, subject to anti-dilution adjustments. At any time prior to March 1, 2014, holders may elect to convert each share of the Convertible Preferred Stock into shares of common stock at the minimum conversion rate of 1.6667 shares of common stock per share of Convertible Preferred Stock, subject to anti-dilution adjustments. Dividends on the Convertible Preferred Stock are payable on a cumulative basis when, as and if declared by the Board or an authorized committee of such Board, at an annual rate of 5.50% on the liquidation preference of $100.00 per share. The Company may pay declared dividends in cash, common stock or any combination of cash and common stock, subject to certain limitations, on March 1, June 1, September 1 and December 1 of each year, starting on June 1, 2011 and to, and including, March 1, 2014. The Convertible Preferred Stock is not redeemable. Molycorp received net proceeds from the Convertible Preferred Stock offering totaling $199.6 million after underwriter discounts and commissions and offering expenses paid by Molycorp. During 2011, the Company declared and paid aggregate cash dividends of $9.0 million on the Convertible Preferred Stock. On April 1, 2011, Molycorp acquired 80% of the outstanding shares of Molycorp Sillamäe (representing a 90.023% controlling interest) from AS Silmet Grupp in exchange for 1,593,419 shares of Molycorp common stock, which had a fair value of approximately $72.7 million based on the closing price of the Company’s common stock on the acquisition date, net of an estimated discount that a market participant would require, given that the issuance of the shares Molycorp transferred in consideration to AS Silmet Grupp was not registered under the Securities Act, and such shares were subject to certain lock up provisions, which limited AS Silmet Grupp’s ability to sell these shares. On October 24, 2011, the Company acquired the remaining 9.977% ownership interest in Molycorp Sillamäe for $10.0 million in cash, which resulted in an adjustment to Additional Paid-In Capital Equity of $0.4 million for the difference between the consideration paid and the carrying value of the noncontrolling interest on October 24, 2011. |
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Earnings (loss) per Share |
Basic earnings per share is computed by dividing the Company’s net income attributed to common stockholders by the weighted average number of shares of common stock outstanding during the period. For the year ended December 31, 2011, the cumulative undeclared and paid dividends on the Convertible Preferred Stock were subtracted from the net income in the period for the purpose of computing the basic earnings per share.
Diluted earnings per share reflect the dilutive impact of potential common stock and unvested restricted shares of common stock in the weighted average number of common shares outstanding during the period, if dilutive. For this purpose, the “treasury stock method” and “if-converted method,” as applicable, are used. Under the treasury stock method, assumed proceeds upon the exercise of stock options are considered to be used to purchase common stock at the average market price of the shares during the period. Also under the treasury stock method, fixed awards and nonvested shares, such as restricted stock, are deemed options for purposes of computing diluted earnings per share. As of December 31, 2011 and December 31, 2010, all potential common stock under the treasury stock method were antidilutive in nature; consequently, the Company does not have any adjustments between earnings per share and diluted earnings per share related to stock options and restricted stock awards. In applying the if-converted method, conversion is not assumed for purposes of computing diluted earnings per share if the effect would be antidilutive. Convertible preferred stock (such as the Convertible Preferred Stock) is antidilutive whenever the amount of the dividend declared in or accumulated for the current period including the deemed dividend in the period from a beneficial conversion feature per common share obtainable on conversion exceeds basic earnings per share. The Convertible Preferred Stock was antidilutive as of December 31, 2011. Also under the if-converted method, convertible debt (such as the Notes) is antidilutive whenever its interest including any deemed interest from a beneficial conversion feature and nondiscretionary adjustments, net of tax, per common share obtainable on conversion exceeds basic earnings per share. As of December 31, 2011, the Notes were dilutive under the if-converted method; therefore, the shares of common stock obtainable on the assumed conversion of the Notes, the interest expense and the amortization of discount on the Notes were included in the computation of diluted earnings per share. |
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Comprehensive Income (Loss) |
In the second quarter of 2011, the Company early adopted the Accounting Standards Update (ASU) 2011-5 as issued by the Financial Accounting Standards Board in June 2011. As a result of this update, the Company elected to present comprehensive income in two separate, but consecutive statements. No retroactive application of this update was necessary as the Company did not have any items entering into the determination of comprehensive income (loss) other than net income (loss) for all periods prior to the second quarter of 2011. In addition to Net income (loss), Comprehensive income (loss) includes changes in equity for the year ended December 31, 2011 due to foreign currency translation adjustments. A loss of approximately $2.7 million from the translation of intercompany balances is included in the aggregate net foreign currency translation adjustment of $8.5 million for the period from April 1, 2011 to December 31, 2011. |
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Foreign Currency |
The reporting currency of the Company is the U.S. dollar. The functional currency of Molycorp, Inc., Molycorp Minerals, LLC and Molycorp Tolleson is also the U.S. dollar, whereas the functional currency of Molycorp Sillamäe is the euro. Assets and liabilities of Molycorp Sillamäe are translated at the spot rate in effect at the applicable reporting date; the results of operations of Molycorp Sillamäe are translated at actual exchange rates for significant transactions or at the average exchange rates in effect during the applicable period. The resulting unrealized cumulative translation adjustment, net of applicable income taxes, is recorded as a component of accumulated other comprehensive income (loss) in the consolidated statement of stockholders’ equity. Cash flows from the operations of Molycorp Sillamäe are translated at actual exchange rates for significant transactions or at the average rate for the applicable period. The effect of exchange rates on cash balances held in foreign currencies are separately reported in the Company’s consolidated statement of cash flows. Transactions denominated in currencies other than the applicable functional currency are recorded based on exchange rates at the time such transactions occur. Changes in exchange rates associated with amounts recorded in the Company’s consolidated balance sheet related to these non-functional currency transactions result in transaction gains and losses that are reflected in the Other income (expense) section of the consolidated statement of operations as unrealized (based on the applicable period end exchange rates) or realized upon settlement of the transactions. |
Deposits (Details) (USD $)
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Sep. 30, 2012
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Dec. 31, 2011
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Dec. 31, 2010
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Deposits [Line Items] | |||
Deposits | $ 23,287,000 | $ 23,286,000 | $ 26,200,000 |
Escrow Deposit | 20,600,000 | 8,000,000 | |
Deposits related to construction insurance program | 1,500,000 | 1,500,000 | |
Other restricted cash requirements related to deposits | 1,200,000 | 1,200,000 | |
Kern River Gas Transmission Company
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Deposits [Line Items] | |||
Escrow Deposit | $ 20,600,000 |
Pension (Details) (Pension Plan, USD $)
In Thousands, unless otherwise specified |
1 Months Ended |
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Jun. 30, 2012
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Pension Plan
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Components of net periodic benefit cost: | |
Service Cost | $ 0 |
Interest cost | 90 |
Expected return on assets | (67) |
Amortization of transition obligations/(asset) | 0 |
Amortization of prior service cost | (1) |
Amortization of actuarial loss | 55 |
Net periodic benefit cost | $ 77 |
Pension
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9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
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Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension | Pension In accordance with the terms of the Arrangement Agreement, Molycorp maintained the terms of the benefit plan for Molycorp Canada’s current and former employees. Molycorp Canada's predecessor company had a defined benefit pension plan (“Pension Plan”), which covered all hourly employees employed as of September 30, 1995, and all hourly employees subsequently hired by Molycorp Canada's predecessor company up to 2003 at its former U.S. manufacturing facility in Anderson, Indiana. A December 31 measurement date is used for the Pension Plan. Molycorp paid $0.2 million as of September 30, 2012 of the estimated total contributions to the Pension Plan for 2012 of $0.2 million. Molycorp also maintained the terms of Molycorp Canada postretirement medical and life insurance benefits plan for certain employees from the Anderson, Indiana manufacturing facility. The measurement date for this postretirement benefit plan (“PBP”) is December 31. The actuarial valuation for funding purposes of the Pension Plan and PBP is January 1 of each year. The components of the net periodic pension expense for the period from June 12, 2012 to September 30, 2012 for the Pension Plan and PBP are set forth below (in thousands):
Employee Benefit Plans The Company maintains a defined contribution plan for all employees working at two of our domestic locations: Molycorp Mountain Pass, California and Greenwood Village, Colorado. On September 1, 2011, the Company amended the eligibility requirement from a completed 90 days of services with the Company to eligibility commencing on the first of the month following hire date. The Company currently makes a non-elective contribution equal to 4% of compensation for each employee who performed at least 1000 hours of service and is employed on the last day of the year. In addition, the Company currently matches 100% of the first 3% contributed and 50% of the next 2% contributed by each eligible employee as well as an additional contribution of up to 4% which can be made at the Company’s discretion. Employees vest in Company contributions after three years of service. Expenses related to this plan totaled $1.6 million, $1.2 million and $1.0 million for the years ended December 31, 2011, 2010 and 2009, respectively. Additionally, accrued expenses at December 31, 2011 and 2010 included $1.1 million and $1.2 million related to this plan, respectively. On April, 1 2009, the Company established the Management Incentive Plan (“MIP”), which is a nonqualified deferred compensation plan for the purpose of providing deferred compensation benefits for certain members of management. Under the MIP, participants can defer their base salary and other compensation that is supplemental to his or her base salary and is dependent upon achievement of individual or Company performance goals. It is intended that the MIP constitute an unfunded plan for purposes of the Employee Retirement Income Securities Act of 1974, as amended. The amount of compensation or awards deferred is deemed to be invested in a hypothetical investment as of the date of deferral. During the year ended December 31, 2011 and 2010, the Company funded discretionary contributions to the MIP totaling $271,000 and $47,000, respectively. In addition, total accrued amount including employee deferrals, discretionary contributions and related earnings was approximately $528,000 and $171,000 as of December 31, 2011 and 2010, respectively. On November 4, 2010, the Compensation Committee established an annual incentive (“bonus plan”) for all employees that is discretionary in nature. The bonus plan is performance based and includes both qualitative and quantitative criteria. For the year ended December 31, 2011 and 2010, the Company accrued $4.8 million $0.6 million, respectively. Effective January 1, 2012, eligible employees at Molycorp Tolleson have transitioned to the Company’s defined contribution plan. |
Earnings per Share (Tables)
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Sep. 30, 2012
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share, basic and diluted |
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Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Details 3) (Details) (USD $)
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1 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | |||
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Sep. 30, 2011
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Sep. 30, 2012
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Sep. 30, 2011
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Dec. 31, 2011
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Dec. 31, 2010
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Dec. 31, 2009
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Jul. 31, 2009
Intermetallics Japan
Sumikin Molycorp
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Investment [Line Items] | |||||||
Proceeds from sale of joint venture | $ 0 | $ 0 | $ 9,700,000 | $ 9,700,000 | |||
Payments to Acquire Other Investments | 20,000,000 | 0 | 20,000,000 | 20,000,000 | 0 | 0 | |
Other Postretirement Benefits Payable | 1,928,000 | 1,088,000 | 1,199,000 | ||||
Accrued payroll and related benefits | 8,246,000 | 3,024,000 | 1,185,000 | ||||
Accrued Tolling Fees | 0 | 404,000 | |||||
Sales and use tax | 9,412,000 | 1,367,000 | 532,000 | ||||
Accrued Bonuses, Current | 3,683,000 | 4,845,000 | 554,000 | ||||
Interest Payable, Current | 27,733,000 | 345,000 | 9,000 | ||||
Other accrued expenses | 7,933,000 | 2,229,000 | 342,000 | ||||
Total accrued expenses | $ 66,289,000 | $ 12,898,000 | $ 4,225,000 |
Subsequent Events Subsequent Events (Tables)
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Sep. 30, 2012
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Subsequent Events [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarizes the purchase prices and opening balance sheets for the acquisitions |
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Summary of actual and pro forma information |
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Intangible Assets (Tables)
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9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
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Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of amortizable intangible assets |
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Company Background
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Company Background [Abstract] | |||||||||||||||||||||
Company Background |
Molycorp, Inc. was formed on March 4, 2010 for the purpose of continuing the business of Molycorp, LLC in corporate form. On April 15, 2010, the members of Molycorp, LLC contributed either (a) all of their member interests in Molycorp, LLC or (b) all of their equity interest in entities that held member interests in Molycorp, LLC (and no other assets or liabilities) to Molycorp, Inc. in exchange for Molycorp, Inc. Class A common stock. Accordingly, Molycorp, LLC and its wholly-owned subsidiary, Molycorp Minerals, LLC (“Molycorp Minerals”) became subsidiaries of Molycorp, Inc. (the “Corporate Reorganization”). On June 15, 2010, Molycorp LLC was merged with and into Molycorp Minerals. Molycorp, Inc., together with its consolidated subsidiaries, is referred to herein as the “Company” or “Molycorp.” The Company acquired the Mountain Pass, California rare earth deposit and associated assets (the “Molycorp Mountain Pass facility”) and assumed certain liabilities from Chevron Mining, Inc. (“Chevron”) on September 30, 2008. The Molycorp Mountain Pass facility is located in San Bernardino County, California and is the largest rare earth oxide producer outside of China. Rare earth elements (“REEs”) are a group of specialty elements with unique properties that make them critical to many existing and emerging applications including:
The REE group includes 17 elements, namely the 15 lanthanide elements, which are lanthanum, cerium, praseodymium, promethium (which does not occur naturally), neodymium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium, and two elements that have similar chemical properties to the lanthanide elements—yttrium and scandium. The oxides produced from processing REEs are collectively referred to as rare earth oxides (“REOs”). Bastnasite is a mineral that contains REEs. Operations at the Molycorp Mountain Pass facility began in 1952 under Molybdenum Corporation of America (“MCA”). MCA was purchased by Union Oil of California (“Unocal”) in 1977. In 2002, mining operations were suspended at the Molycorp Mountain Pass facility primarily due to softening prices for REOs and a lack of additional tailings disposal capacity. Chevron Corporation purchased Unocal in 2005. Prior to the acquisition, operations at the Molycorp Mountain Pass facility had been suspended with the exception of a pilot processing project to recover neodymium from lanthanum stockpiles produced prior to Chevron’s ownership of Mountain Pass. The neodymium from lanthanum (“NFL”) pilot processing project was undertaken to improve the facility’s REE processing techniques. From June 12, 2008 (Inception) through March 31, 2010, revenue was generated primarily from the sale of products associated with the NFL pilot processing project, which concluded in February 2010. In April 2010, the Company commenced the second pilot processing campaign to recover cerium, lanthanum, didymium (a combination of neodymium and praseodymium) and samarium/europium/gadolinium concentrate from bastnasite concentrate stockpiles. On April 1, 2011, Molycorp completed the acquisition of a 90.023% controlling stake in AS Silmet located in Sillamäe, Estonia (now known as Molycorp Silmet AS or Molycorp Sillamäe), one of only two rare earth processing facilities in Europe. On October 24, 2011, the Company acquired the remaining 9.977% ownership interest in Molycorp Sillamäe for $10.0 million in cash (see Note 5). On April 15, 2011, Molycorp completed the acquisition of Santoku America, Inc. based in Tolleson, Arizona (now known as Molycorp Metals and Alloys, Inc. or Molycorp Tolleson), the only producer of rare earth alloys in the United States (see Note 5). On August 22, 2011, Molycorp opened an office in Tokyo, Japan to provide customer support as well as consulting and technical services to its customers in Japan. Total capital invested for the opening of the office in Tokyo was $0.7 million as of December 31, 2011. |
Subsidiary Guarantor Financial Information (Tables)
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Sep. 30, 2012
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Condensed Balance Sheet |
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Schedule of Condensed Income Statement and Comprehensive Income |
(a) Molycorp Minerals, LLC, a Delaware limited liability company formerly known as Rare Earth Acquisitions LLC, was formed on June 12, 2008 to purchase the Mountain Pass, California rare earth deposit and associated assets from Chevron Mining Inc., a subsidiary of Chevron Corporation. Molycorp, LLC, which became the parent of Molycorp Minerals, LLC, was formed on September 9, 2009 as a Delaware limited liability company. Molycorp, Inc. was formed on March 4, 2010 as a new Delaware corporation and was not, prior to the date of the consummation of its initial public offering, conducting any material activities. The members of Molycorp, LLC contributed either (a) all of their member interests in Molycorp, LLC or (b) all of their equity interests in entities that hold member interests in Molycorp, LLC (and no other assets or liabilities) to Molycorp, Inc. in exchange for shares of Molycorp, Inc. Class A common stock. Additionally, all of the holders of profits interests in Molycorp Minerals, LLC, which were represented by incentive shares, contributed all of their incentive shares to Molycorp, Inc. in exchange for shares of Molycorp, Inc. Class B common stock. Accordingly, Molycorp, LLC and Molycorp Minerals, LLC became subsidiaries of Molycorp, Inc., which we refer to as the “Corporate Reorganization”. Following the Corporate Reorganization, Molycorp, LLC was merged with and into Molycorp Minerals, LLC. Immediately prior to the consummation of Molycorp, Inc.'s initial public offering, all of the shares of Class A common stock and Class B common stock were converted into shares of common stock. |
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Schedule of Condensed Cash Flow Statement |
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