(Mark One) | |
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2014 | |
OR | |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
Delaware (State or other jurisdiction of incorporation or organization) | 27-2301797 (I.R.S. Employer Identification No.) |
5619 Denver Tech Center Parkway, Suite 1000 Greenwood Village, Colorado (Address of principal executive offices) | 80111 (Zip Code) |
Large accelerated filer x | Accelerated filer ¨ | Non-accelerated filer ¨ (Do not check if a smaller reporting company) | Smaller reporting company ¨ |
PAGE | |
ARO | Asset Retirement Obligation. |
ASC | Accounting Standards Codification. |
ASP | Average Selling Price. |
Assay | The analysis of the proportions of metals in ore, or the testing of an ore or mineral for composition, purity, weight, or other properties of commercial interest. |
ASU | Accounting Standards Update. |
Bastnasite | Bastnasite is a mixed-lanthanide fluoro-carbonate mineral (Ln F CO3) that currently provides the bulk of the world's supply of the light REEs. Bastnasite and monazite are the two most common sources of REEs. Bastnasite is found in carbonatites, igneous carbonate rocks that melt at unusually low temperatures. |
Board | Molycorp's Board of Directors. |
Bonded magnet | Bonded neodymium-magnets are prepared by melt spinning a thin ribbon of the NdFeB alloy. The ribbon contains randomly oriented Nd2Fe14B nano-scale grains. This ribbon is then pulverized into particles, mixed with a polymer and either compression or injection molded into bonded magnets. Bonded magnets offer less flux than sintered magnets, but can be net-shape formed into intricately shaped parts and do not suffer significant eddy current losses. |
Cerium | Cerium (Ce) is a soft, silvery, ductile metal which easily oxidizes in air. Cerium is the most abundant of the REEs, and is found in a number of minerals, including monazite and bastnasite. Cerium has two relatively stable oxidation states, enabling both the storage of oxygen and its widespread use in catalytic converters. Cerium is widely used in the glass polish industry and in many other applications. |
CHP | Combined Heat and Power. |
Concentrate | Concentrate is a mineral processing product that generally describes the material that is produced after crushing and grinding ore, effecting significant separation of gangue (waste) minerals from the desired metal and/or metal minerals, and discarding the waste minerals. The resulting “concentrate” of minerals typically has an order of magnitude higher content of minerals than the beginning ore material. |
Cut-off grade | Cut-off grade is the lowest grade of mineralized material that qualifies as ore in a given deposit. The grade above which minerals are considered economically mineable considering the following parameters: estimates over the relevant period of mining costs, ore treatment costs, general and administrative costs, refining costs, royalty expenses, by-product credits, process and refining recovery rates and price. |
Didymium | Didymium is a natural and unseparated combination of neodymium and praseodymium, which is approximately 75% neodymium and 25% praseodymium, depending on the ore. |
Dysprosium | Dysprosium (Dy) is a REE with a metallic silver lust. A few percent of Dy is often added to high-power NdFeB magnets to increase their resistance to demagnetization. A minor use of dysprosium is in the magnetostrictive alloy, based on DyTbFe, called terfenol-D. |
Europium | Europium (Eu) is a REE with luminescent properties. Excitation of the europium atom, by absorption of energy, results in a visible emission. Almost all practical uses of europium utilize this luminescent behavior. |
Exchange Act | U.S. Securities Exchange Act of 1934, as amended. |
FASB | Financial Accounting Standards Board. |
GAAP | Accounting principles generally accepted in the United States. |
Gadolinium | Gadolinium (Gd) is a REE that absorbs neutrons and therefore is used for shielding and controlling neutron radiography and in nuclear reactors. Because of its paramagnetic properties, solutions of organic gadolinium complexes and gadolinium compounds are popular intravenous contrast enhancing agents for medical Magnetic Resonance Imaging contrast agents in (MRI). Gadolinium is sometimes added to samarium cobalt magnets to make their magnetic properties less temperature dependent. |
Gallium | Gallium is a rare metal not found in nature, but it is easily obtained by smelting. Very pure gallium metal has a brilliant silvery color and its solid metal fractures conchoidally like glass. Almost all gallium is used for microelectronics. |
Grade | The average REE content, as determined by assay of a metric ton of ore. |
Indium | Indium is a rare, very soft, malleable and easily fusible post-transition metal that is chemically similar to gallium and thallium, and shows intermediate properties between these two. Indium's current primary application is to form transparent electrodes from indium tin oxide (ITO) in liquid crystal displays and touchscreens, and this use largely determines its global mining production. It is widely used in thin-films to form lubricated layers. It is also used for making particularly low melting point alloys, and is a component in some lead-free solders. |
Lanthanum | Lanthanum (La) is the first member of the Lanthanide series. Lanthanum is a strategically important REE due to its use in fluid bed cracking catalysts, or FCCs, which are used in the production of transportation and aircraft fuel. Lanthanum is also used in fuel cells, batteries, and many other products. |
LED | Light-emitting diode. |
LREC | Light rare earth concentrate (purified and unseparated). |
MD&A | Management's Discussion of Financial Condition and Results of Operations. |
Mill | A processing plant that produces a concentrate of the valuable minerals contained in an ore. |
Mineralization | The process or processes by which a mineral or minerals are introduced into a rock, resulting in a valuable or potentially valuable deposit. |
Molycorp Canada | Molycorp Minerals Canada ULC (formerly Neo Material Technologies Inc.). |
Mountain Pass | The Molycorp Minerals, LLC rare earth minerals mining and processing facility located in Mountain Pass, California. |
Molycorp Silmet | Molycorp Silmet AS - Sillamäe, Estonia. |
MMA | Molycorp Metals and Alloys, Inc. - Tolleson, Arizona. |
Monazite | Monazite is a reddish-brown phosphate mineral. Monazite minerals are typically accompanied by concentrations of uranium and thorium. This has historically limited the processing of monazite, however this mineral is becoming more attractive because it typically has slightly elevated concentrations of mid-to heavy rare earths as compared to rare earth-containing minerals such as bastnasite. |
mt | Metric Ton = 2,205 pounds. |
Niobium | Niobium is a rare, soft, grey, ductile transition metal found in the mineral pyrochlore, the main commercial source for niobium, and columbite. Niobium is used mostly in alloys, the largest part in special steel such as that used in gas pipelines. Although alloys contain only a maximum of 0.1% of niobium, that small percentage improves the strength of the steel. The temperature stability of niobium-containing superalloys is important for its use in jet and rocket engines. Niobium also is used in various superconducting materials, among other applications. |
NdFeB | Neodymium-iron-boron alloy. |
NdPr | Neodymium/Praseodymium. |
Nd2O3 | Neodymium(III) oxide or neodymium sesquioxide is the chemical compound composed of neodymium and oxygen. |
Neodymium | Neodymium (Nd) is a REE used in a wide variety of applications, particularly as a key constituent of NdFeB permanent magnets and as an additive to capacitor dielectrics. NdFeB magnets have a relatively high power/weight ratio, and are used in a large variety of motors, generators, sensors and computer hard disk drives. Capacitors containing neodymium are found in cellular telephones, computers and nearly all other electronic devices. A minor application of neodymium is in lasers. |
Neo PowdersTM | NdFeB magnet powders. |
Ore | That part of a mineral deposit which could be economically and legally extracted or produced at the time of reserve determination. |
Overburden | In surface mining, overburden is the material that overlays an ore deposit. Overburden is removed prior to mining. |
Praseodymium | Praseodymium (Pr) is a REE that generally comprises about 4% of the lanthanide content of bastnasite and is used in several applications, including in NdFeB magnetic materials and as a coloring pigment in photographic filters, airport signal lenses, and welder's glasses. |
Probable reserves | Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation. |
Proven reserves | Reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling; and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well established. |
REE | Rare earth element. |
Recovery | The percentage of contained metal actually extracted from ore in the course of processing such ore. |
REO | Rare earth oxide. |
Reserves | That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. Same definition as 'ore'. |
Rhenium | Rhenium is a silvery-white, heavy, third-row transition metal. With an estimated average concentration of 1 part per billion (ppb), rhenium is one of the rarest elements in the Earth's crust. The free element has the third-highest melting point and highest boiling point of any element. Rhenium resembles manganese chemically and is obtained as a by-product of molybdenum and copper ore's extraction and refinement. Nickel-based superalloys of rhenium are used in the combustion chambers, turbine blades, and exhaust nozzles of jet engines. These alloys contain up to 6% rhenium, making jet engine construction the largest single use for the element, with the chemical industry's catalytic uses being next-most important. |
Samarium | Samarium (Sm) is a REE predominantly used to produce samarium-cobalt magnets. Although these magnets are slightly less powerful than NdFeB magnets at room temperature, samarium cobalt magnets can be used over a wider range of temperatures and are less susceptible to corrosion. |
SEC | U.S. Securities and Exchange Commission. |
SEG | Samarium, europium, gadolinium. |
Sintered magnet | Sintered NdFeB-magnets are prepared by the raw materials being melted in a furnace, cast into a mold and cooled to form ingots. The ingots are pulverized and milled to tiny particles, which then undergo a process of liquid-phase sintering whereby the powder is magnetically aligned into dense blocks which are then heat-treated, cut to shape, surface treated and magnetized. |
Tantalum | Tantalum is a rare, hard, blue-gray, lustrous transition metal that is highly corrosion resistant. It is part of the refractory metals group, which are widely used as minor component in alloys. The chemical inertness of tantalum makes it a valuable substance for laboratory equipment and a substitute for platinum, but its main use today is in tantalum capacitors in electronic equipment such as mobile phones, DVD players, video game systems and computers. |
Terbium | Terbium (Tb) is a REE used primarily as a phosphor, either in fluorescent lamps or x-ray screens. It can replace dysprosium in NdFeB magnets but usually does not because of its cost. A minor use of terbium is in the magnetostrictive alloy, based on DyTbFe, called terfenol-D. |
Ton | 2,000 pounds. |
Yttrium | Yttrium (Y), although not a lanthanide series element, is often considered to be a REE and its behavior is similar to heavy REEs. It is predominantly utilized in lighting applications and ceramics. Other uses include resonators, lasers, microwave communication devices and other electronic devices. |
Zirconium oxide | Zirconium oxide is a white amorphous powder that is insoluble in water and highly refractory, used as a pigment for paints, a catalyst, and an abrasive. |
June 30, 2014 | December 31, 2013 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 156,372 | $ | 314,317 | |||
Trade accounts receivable, net | 47,031 | 61,757 | |||||
Inventory (Note 4) | 182,022 | 171,783 | |||||
Prepaid expenses and other current assets | 33,867 | 29,210 | |||||
Total current assets | 419,292 | 577,067 | |||||
Non-current assets: | |||||||
Deposits | 25,698 | 25,997 | |||||
Property, plant and equipment, net (Note 5) | 1,743,494 | 1,762,874 | |||||
Inventory (Note 4) | 25,934 | 25,329 | |||||
Intangible assets, net | 318,954 | 330,867 | |||||
Investments | 46,303 | 48,875 | |||||
Goodwill | 228,750 | 228,750 | |||||
Other non-current assets | 22,821 | 7,043 | |||||
Total non-current assets | 2,411,954 | 2,429,735 | |||||
Total assets | $ | 2,831,246 | $ | 3,006,802 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Trade accounts payable | $ | 63,082 | $ | 84,449 | |||
Accrued expenses | 47,005 | 48,501 | |||||
Debt and capital lease obligations (Note 6) | 14,230 | 16,362 | |||||
Other current liabilities | 4,386 | 4,063 | |||||
Total current liabilities | 128,703 | 153,375 | |||||
Non-current liabilities: | |||||||
Asset retirement obligation | 16,523 | 16,966 | |||||
Deferred tax liabilities | 78,424 | 85,481 | |||||
Debt and capital lease obligations (Note 6) | 1,378,669 | 1,363,916 | |||||
Other non-current liabilities | 10,256 | 10,002 | |||||
Total non-current liabilities | 1,483,872 | 1,476,365 | |||||
Total liabilities | $ | 1,612,575 | $ | 1,629,740 | |||
Commitments and contingencies (Note 11) | |||||||
Stockholders’ equity: | |||||||
Common stock, $0.001 par value; 700,000,000 shares authorized at June 30, 2014 and 350,000,000 at December 31, 2013 (Note 8) | 245 | 241 | |||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized at December 31, 2013 (Note 8) | — | 2 | |||||
Additional paid-in capital | 2,207,938 | 2,194,405 | |||||
Accumulated other comprehensive loss | (7,412 | ) | (6,451 | ) | |||
Accumulated deficit | (1,010,435 | ) | (840,474 | ) | |||
Total Molycorp stockholders’ equity | 1,190,336 | 1,347,723 | |||||
Noncontrolling interests | 28,335 | 29,339 | |||||
Total stockholders’ equity | 1,218,671 | 1,377,062 | |||||
Total liabilities and stockholders’ equity | $ | 2,831,246 | $ | 3,006,802 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenues | $ | 116,907 | $ | 136,112 | $ | 235,432 | $ | 281,511 | |||||||
Costs of sales: | |||||||||||||||
Costs excluding depreciation and amortization | (113,399 | ) | (135,724 | ) | (238,872 | ) | (271,255 | ) | |||||||
Depreciation and amortization | (20,079 | ) | (18,424 | ) | (36,226 | ) | (32,596 | ) | |||||||
Gross loss | (16,571 | ) | (18,036 | ) | (39,666 | ) | (22,340 | ) | |||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative | (20,424 | ) | (26,059 | ) | (38,379 | ) | (52,610 | ) | |||||||
Depreciation, amortization and accretion | (7,257 | ) | (8,278 | ) | (14,459 | ) | (16,488 | ) | |||||||
Research and development | (4,483 | ) | (6,506 | ) | (7,249 | ) | (12,911 | ) | |||||||
Operating loss | (48,735 | ) | (58,879 | ) | (99,753 | ) | (104,349 | ) | |||||||
Other expenses: | |||||||||||||||
Other income | 296 | 2,813 | 770 | 2,360 | |||||||||||
Interest expense, net of capitalized interest | (41,285 | ) | (14,869 | ) | (76,925 | ) | (26,518 | ) | |||||||
Loss before income taxes and equity earnings | (89,724 | ) | (70,935 | ) | (175,908 | ) | (128,507 | ) | |||||||
Income tax benefit | 7,427 | 3,530 | 9,334 | 26,021 | |||||||||||
Equity in loss of affiliates | (1,553 | ) | (3,284 | ) | (3,275 | ) | (6,356 | ) | |||||||
Net loss | (83,850 | ) | (70,689 | ) | (169,849 | ) | (108,842 | ) | |||||||
Net income attributable to noncontrolling interests | (49 | ) | (486 | ) | (112 | ) | (1,304 | ) | |||||||
Net loss attributable to Molycorp stockholders | $ | (83,899 | ) | $ | (71,175 | ) | $ | (169,961 | ) | $ | (110,146 | ) | |||
Net loss | $ | (83,850 | ) | $ | (70,689 | ) | $ | (169,849 | ) | $ | (108,842 | ) | |||
Other comprehensive (loss) income: | |||||||||||||||
Foreign currency translation adjustments | (109 | ) | 662 | (961 | ) | (2,632 | ) | ||||||||
Comprehensive loss | $ | (83,959 | ) | $ | (70,027 | ) | $ | (170,810 | ) | $ | (111,474 | ) | |||
Comprehensive loss attributable to: | |||||||||||||||
Molycorp stockholders | (83,910 | ) | (69,541 | ) | (170,698 | ) | (110,170 | ) | |||||||
Noncontrolling interest | (49 | ) | (486 | ) | (112 | ) | (1,304 | ) | |||||||
$ | (83,959 | ) | $ | (70,027 | ) | $ | (170,810 | ) | $ | (111,474 | ) | ||||
Loss per share of common stock (Note 9): | |||||||||||||||
Net loss attributable to Molycorp stockholders | $ | (83,899 | ) | $ | (71,175 | ) | $ | (169,961 | ) | $ | (110,146 | ) | |||
Dividends on Convertible Preferred Stock | — | (2,846 | ) | (2,846 | ) | (5,693 | ) | ||||||||
Loss attributable to common stockholders | $ | (83,899 | ) | $ | (74,021 | ) | $ | (172,807 | ) | $ | (115,839 | ) | |||
Weighted average common shares outstanding—basic | 224,223,506 | 168,075,012 | 222,806,917 | 160,735,323 | |||||||||||
Basic loss per share: | $ | (0.37 | ) | $ | (0.44 | ) | $ | (0.78 | ) | $ | (0.72 | ) | |||
Weighted average common shares outstanding—diluted | 224,223,506 | 168,075,012 | 222,806,917 | 160,735,323 | |||||||||||
Diluted loss per share: | $ | (0.37 | ) | $ | (0.44 | ) | $ | (0.78 | ) | $ | (0.72 | ) |
Common Stock | Series A Mandatory Convertible Preferred Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated deficit | Total Molycorp Stockholders' Equity | Non controlling interests | Total Stockholders' Equity | |||||||||||||||||||||
Shares | $ | Shares | $ | |||||||||||||||||||||||||
Balance at December 31, 2013 | 240,380,094 | $ | 241 | 2,070,000 | $ | 2 | $ | 2,194,405 | $ | (6,451 | ) | $ | (840,474 | ) | $ | 1,347,723 | $ | 29,339 | $ | 1,377,062 | ||||||||
Stock-based compensation | 189,188 | — | — | — | 1,570 | — | — | 1,570 | — | 1,570 | ||||||||||||||||||
Conversion of Series A Mandatory Convertible Preferred Stock (Note 8) | 4,140,000 | 4 | (2,070,000 | ) | (2 | ) | (2 | ) | — | — | — | — | — | |||||||||||||||
Conversion of Exchangeable Shares | 21,313 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||
Issuance of shares for conversion of Debentures | 2,518 | — | — | — | 12 | — | — | 12 | — | 12 | ||||||||||||||||||
Share-lending arrangements (Note 8) | — | — | — | — | 15,062 | — | — | 15,062 | — | 15,062 | ||||||||||||||||||
Net (loss) income | — | — | — | — | — | — | (169,961 | ) | (169,961 | ) | 112 | (169,849 | ) | |||||||||||||||
Preferred dividends | — | — | — | — | (2,846 | ) | — | — | (2,846 | ) | — | (2,846 | ) | |||||||||||||||
Distribution to noncontrolling interests | — | — | — | — | — | — | — | — | (1,135 | ) | (1,135 | ) | ||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (961 | ) | — | (961 | ) | — | (961 | ) | |||||||||||||||
Other | — | — | — | — | (263 | ) | — | — | (263 | ) | 19 | (244 | ) | |||||||||||||||
Balance at June 30, 2014 | 244,733,113 | $ | 245 | — | $ | — | $ | 2,207,938 | $ | (7,412 | ) | $ | (1,010,435 | ) | $ | 1,190,336 | $ | 28,335 | $ | 1,218,671 |
Common Stock | Series A Mandatory Convertible Preferred Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated deficit | Total Molycorp Stockholders' Equity | Non controlling interests | Total Stockholders' Equity | |||||||||||||||||||||
Shares | $ | Shares | $ | |||||||||||||||||||||||||
Balance at December 31, 2012 | 138,773,538 | $ | 139 | 2,070,000 | $ | 2 | $ | 1,691,429 | $ | (9,433 | ) | $ | (466,091 | ) | $ | 1,216,046 | $ | 35,212 | $ | 1,251,258 | ||||||||
Stock-based compensation | 1,156 | — | — | — | 794 | — | — | 794 | — | 794 | ||||||||||||||||||
Component of 5.50% convertible debt | — | — | — | — | 21,815 | — | — | 21,815 | — | 21,815 | ||||||||||||||||||
Deferred taxes on component of convertible debt | — | — | — | — | (8,508 | ) | — | — | (8,508 | ) | — | (8,508 | ) | |||||||||||||||
Conversion of Exchangeable Shares | 13,483 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||
Issuance of shares for conversion of Debentures | 2,358 | — | — | — | 49 | — | — | 49 | — | 49 | ||||||||||||||||||
Issuance of Primary Shares | 43,125,000 | 43 | — | — | 248,097 | — | — | 248,140 | — | 248,140 | ||||||||||||||||||
Issuance of Borrowed Shares | 6,666,666 | 7 | — | — | — | — | — | 7 | — | 7 | ||||||||||||||||||
Net (loss) income | — | — | — | — | — | — | (110,146 | ) | (110,146 | ) | 1,304 | (108,842 | ) | |||||||||||||||
Preferred dividends | — | — | — | — | (5,693 | ) | — | — | (5,693 | ) | — | (5,693 | ) | |||||||||||||||
Distribution to noncontrolling interests | — | — | — | — | — | — | — | — | (1,946 | ) | (1,946 | ) | ||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (2,632 | ) | — | (2,632 | ) | — | (2,632 | ) | |||||||||||||||
Balance at June 30, 2013 | 188,582,201 | $ | 189 | 2,070,000 | $ | 2 | $ | 1,947,983 | $ | (12,065 | ) | $ | (576,237 | ) | $ | 1,359,872 | $ | 34,570 | $ | 1,394,442 |
Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (169,849 | ) | $ | (108,842 | ) | |
Adjustments to reconcile net loss to net cash from operating activities: | |||||||
Depreciation, amortization and accretion | 50,685 | 49,399 | |||||
Deferred income tax benefit | (14,712 | ) | (29,496 | ) | |||
Inventory write-downs | 36,863 | 47,958 | |||||
Release of inventory step-up value | 719 | 3,499 | |||||
Stock-based compensation | 2,288 | 794 | |||||
Equity in results of affiliates | 3,275 | 6,356 | |||||
Other operating adjustments | 4,396 | (846 | ) | ||||
Net change in operating assets and liabilities (Note 14) | (31,913 | ) | (42,863 | ) | |||
Net cash used in operating activities | (118,248 | ) | (74,041 | ) | |||
Cash flows from investing activities: | |||||||
Investment in joint ventures | (703 | ) | (3,423 | ) | |||
Capital expenditures | (44,687 | ) | (264,726 | ) | |||
Recovery from insurance claims | 12,900 | — | |||||
Other investing activities | 395 | (224 | ) | ||||
Net cash used in investing activities | (32,095 | ) | (268,373 | ) | |||
Cash flows from financing activities: | |||||||
Repayments of debt | (3,079 | ) | (27,283 | ) | |||
Net proceeds from sale of common stock | — | 248,150 | |||||
Issuance of 5.50% Convertible Notes | — | 165,600 | |||||
Payments of preferred dividends | (2,846 | ) | (5,693 | ) | |||
Dividend paid to noncontrolling interests | (1,135 | ) | (1,946 | ) | |||
Other financing activities | 164 | (360 | ) | ||||
Net cash (used in) provided by financing activities | (6,896 | ) | 378,468 | ||||
Effect of exchange rate changes on cash | (706 | ) | 318 | ||||
Net change in cash and cash equivalents | (157,945 | ) | 36,372 | ||||
Cash and cash equivalents at beginning of the period | 314,317 | 227,790 | |||||
Cash and cash equivalents at end of period | $ | 156,372 | $ | 264,162 |
Non-cash financing activities and investing activities: | |||||||
Change in accrued capital expenditures | $ | (15,400 | ) | $ | (108,861 | ) |
(1) | Basis of Presentation |
1. | Retrospectively to each prior reporting period presented. |
2. | Retrospectively with the cumulative effect of initially applying this update recognized at the date of initial application. If an entity elects this transition method, it also should provide the additional disclosures in reporting periods that include the date of initial application of: |
i. | The amount by which each financial statement line item is affected in the current reporting period by the application of this update as compared to the guidance that was in effect before the change. |
ii. | An explanation of the reasons for significant changes. |
(2) | Liquidity and Capital Requirements |
(3) | Segment Information |
Three months ended June 30, 2014 | Resources | Chemicals and Oxides | Magnetic Materials and Alloys | Rare Metals | Corporate and other (a) | Eliminations(b) | Total Molycorp, Inc. | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||
External | $ | 2,331 | $ | 45,437 | $ | 53,195 | $ | 15,944 | $ | — | $ | 116,907 | |||||||||||||||
Inter-segment | 7,706 | 3,195 | 1,165 | — | (12,066 | ) | — | ||||||||||||||||||||
Total revenues | $ | 10,037 | $ | 48,632 | $ | 54,360 | $ | 15,944 | $ | (12,066 | ) | $ | 116,907 | ||||||||||||||
OIBDA | $ | (30,298 | ) | $ | 4,836 | $ | 11,812 | $ | 740 | ||||||||||||||||||
Depreciation, amortization and accretion | (17,009 | ) | (3,908 | ) | (4,261 | ) | (2,101 | ) | |||||||||||||||||||
Operating (loss) income | $ | (47,307 | ) | $ | 928 | $ | 7,551 | $ | (1,361 | ) | $ | (9,083 | ) | $ | 537 | $ | (48,735 | ) | |||||||||
Other income | 296 | ||||||||||||||||||||||||||
Interest expense, net of capitalized interest | (41,285 | ) | |||||||||||||||||||||||||
Loss before income taxes and equity earnings | $ | (89,724 | ) |
Three months ended June 30, 2013 | Resources | Chemicals and Oxides | Magnetic Materials and Alloys | Rare Metals | Corporate and other (a) | Eliminations(b) | Total Molycorp, Inc. | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||
External | $ | 10,922 | $ | 34,789 | $ | 66,114 | $ | 24,287 | $ | — | $ | 136,112 | |||||||||||||||
Inter-segment | 6,665 | 6,692 | — | — | (13,357 | ) | — | ||||||||||||||||||||
Total revenues | $ | 17,587 | $ | 41,481 | $ | 66,114 | $ | 24,287 | $ | (13,357 | ) | $ | 136,112 | ||||||||||||||
OIBDA | $ | (28,775 | ) | $ | (9,585 | ) | $ | 18,060 | $ | (695 | ) | ||||||||||||||||
Depreciation, amortization and accretion | (11,629 | ) | (5,589 | ) | (7,422 | ) | (2,005 | ) | |||||||||||||||||||
Operating (loss) income | $ | (40,404 | ) | $ | (15,174 | ) | $ | 10,638 | $ | (2,700 | ) | $ | (9,953 | ) | $ | (1,286 | ) | $ | (58,879 | ) | |||||||
Other income | 2,813 | ||||||||||||||||||||||||||
Interest expense, net of capitalized interest | (14,869 | ) | |||||||||||||||||||||||||
Loss before income taxes and equity earnings | $ | (70,935 | ) |
a. | Includes business development costs, personnel costs, stock-based compensation, accounting and legal fees, occupancy expense, information technology costs and interest expense. |
b. | Consist of inter-segment sales and gross profits eliminations as well as eliminations of lower of cost or market adjustments related to inter-segment inventory. |
Six months ended June 30, 2014 | Resources | Chemicals and Oxides | Magnetic Materials and Alloys | Rare Metals | Corporate and other (a) | Eliminations(b) | Total Molycorp, Inc. | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||
External | $ | 5,442 | $ | 85,707 | $ | 107,915 | $ | 36,368 | $ | — | $ | 235,432 | |||||||||||||||
Inter-segment | 20,159 | 9,481 | 2,383 | — | (32,023 | ) | — | ||||||||||||||||||||
Total revenues | $ | 25,601 | $ | 95,188 | $ | 110,298 | $ | 36,368 | $ | (32,023 | ) | $ | 235,432 | ||||||||||||||
OIBDA | $ | (66,742 | ) | $ | 8,136 | $ | 25,489 | $ | 671 | ||||||||||||||||||
Depreciation, amortization and accretion | (30,101 | ) | (7,781 | ) | (8,498 | ) | (4,194 | ) | |||||||||||||||||||
Operating (loss) income | $ | (96,843 | ) | $ | 355 | $ | 16,991 | $ | (3,523 | ) | $ | (16,196 | ) | $ | (537 | ) | $ | (99,753 | ) | ||||||||
Other income | 770 | ||||||||||||||||||||||||||
Interest expense, net of capitalized interest | (76,925 | ) | |||||||||||||||||||||||||
Loss before income taxes and equity earnings | $ | (175,908 | ) |
Six months ended June 30, 2013 | Resources | Chemicals and Oxides | Magnetic Materials and Alloys | Rare Metals | Corporate and other (a) | Eliminations(b) | Total Molycorp, Inc. | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||
External | $ | 25,580 | $ | 84,389 | $ | 120,792 | $ | 50,750 | $ | — | $ | 281,511 | |||||||||||||||
Inter-segment | 9,310 | 21,302 | — | — | (30,612 | ) | — | ||||||||||||||||||||
Total revenues | $ | 34,890 | $ | 105,691 | $ | 120,792 | $ | 50,750 | $ | (30,612 | ) | $ | 281,511 | ||||||||||||||
OIBDA | $ | (59,847 | ) | $ | (7,353 | ) | $ | 30,302 | $ | 4,859 | |||||||||||||||||
Depreciation, amortization and accretion | (20,682 | ) | (11,127 | ) | (12,901 | ) | (4,258 | ) | |||||||||||||||||||
Operating (loss) income | $ | (80,529 | ) | $ | (18,480 | ) | $ | 17,401 | $ | 601 | $ | (21,518 | ) | $ | (1,824 | ) | $ | (104,349 | ) | ||||||||
Other income | 2,360 | ||||||||||||||||||||||||||
Interest expense, net of capitalized interest | (26,518 | ) | |||||||||||||||||||||||||
Loss before income taxes and equity earnings | $ | (128,507 | ) |
(4) | Inventory |
June 30, 2014 | December 31, 2013 | ||||||
(In thousands) | |||||||
Current: | |||||||
Concentrate stockpiles | $ | 90 | $ | 24 | |||
Raw materials | 49,293 | 42,627 | |||||
Work in process | 39,250 | 41,962 | |||||
Finished goods | 70,817 | 65,662 | |||||
Materials and supplies | 22,572 | 21,508 | |||||
Total current | $ | 182,022 | $ | 171,783 | |||
Long-term: | |||||||
Concentrate stockpiles | $ | — | $ | 4 | |||
Raw materials | 25,934 | 25,325 | |||||
Total long-term | $ | 25,934 | $ | 25,329 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
(In thousands) | |||||||||||||||
Abnormal production costs expensed in the period (a) | $ | 17,562 | $ | 25,518 | $ | 42,546 | $ | 47,494 | |||||||
Write-down to the lower of cost or market (b) | 19,359 | 21,374 | 35,520 | 41,100 | |||||||||||
Write-downs of stockpile inventory (c) | 132 | 4,458 | 1,342 | 6,858 | |||||||||||
Total | $ | 37,053 | $ | 51,350 | $ | 79,408 | $ | 95,452 |
(a) | Relates to production costs that would have been inventoriable had we been operating at normal production levels. In all periods presented, the majority of these production costs related to the Resources segment. |
(b) | Due to the decline in some rare earths prices and low inventory turnover. |
(c) | Adjustments of the estimated REO content in the stockpile at the Resources segment. |
(5) | Property, Plant and Equipment, net |
June 30, 2014 | December 31, 2013 | ||||||
(In thousands) | |||||||
Land | $ | 12,785 | $ | 12,822 | |||
Land improvements | 304,372 | 327,029 | |||||
Buildings and improvements | 572,269 | 418,510 | |||||
Plant and equipment | 475,980 | 288,603 | |||||
Vehicles | 2,969 | 2,986 | |||||
Computer software | 12,449 | 12,424 | |||||
Furniture and fixtures | 1,044 | 1,044 | |||||
Construction in progress (a) | 453,744 | 755,107 | |||||
Natural gas delivery facility under capital lease | 15,658 | 15,658 | |||||
Mining equipment under capital lease | 9,496 | 7,370 | |||||
Mineral properties | 23,798 | 23,999 | |||||
Property, plant and equipment at cost | 1,884,564 | 1,865,552 | |||||
Less accumulated depreciation | (141,070 | ) | (102,678 | ) | |||
Property, plant and equipment, net | $ | 1,743,494 | $ | 1,762,874 |
(a) | Primarily related to expenditures at the Mountain Pass facility. |
(6) | Debt and Capital Lease Obligations |
June 30, 2014 | December 31, 2013 | ||||||||||||||
Current | Non-Current | Current | Non-Current | ||||||||||||
(In thousands) | |||||||||||||||
Bank loans due May 2014 - September 2017 | $ | 11,378 | $ | 1,943 | $ | 14,128 | $ | 2,699 | |||||||
3.25% Convertible Notes, net of discount, due June 2016 | — | 211,406 | — | 207,028 | |||||||||||
6.00% Convertible Notes, net of discount, due September 2017 | — | 354,606 | — | 346,708 | |||||||||||
5.00% Debentures, net of discount, due December 2017 | — | 2,209 | — | 2,493 | |||||||||||
5.50% Convertible Notes, net of discount, due February 2018 | — | 150,760 | — | 148,198 | |||||||||||
10% Senior Notes, net of discount, due June 2020 | — | 638,148 | — | 637,435 | |||||||||||
Total debt | 11,378 | 1,359,072 | 14,128 | 1,344,561 | |||||||||||
Capital lease obligations | 2,852 | 19,597 | 2,234 | 19,355 | |||||||||||
Total debt and capital lease obligations | $ | 14,230 | $ | 1,378,669 | $ | 16,362 | $ | 1,363,916 |
June 30, 2014 | ||
Debt maturities, excluding capital leases | (In thousands) | |
Remainder of 2014 | 10,648 | |
2015 | 1,431 | |
2016 | 230,814 | |
2017 | 416,621 | |
2018 | 172,500 | |
Thereafter | 650,000 | |
Total | 1,482,014 |
3.25% Convertible Notes | 6.00% Convertible Notes | 5.50% Convertible Notes | 10% Senior Notes | ||||||||||||||||||||||||
June 30, 2014 | December 31, 2013 | June 30, 2014 | December 31, 2013 | June 30, 2014 | December 31, 2013 | June 30, 2014 | December 31, 2013 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Principal amount | $ | 230,000 | $ | 230,000 | $ | 414,000 | $ | 414,000 | $ | 172,500 | 172,500 | $ | 650,000 | $ | 650,000 | ||||||||||||
Unamortized debt discount | (18,594 | ) | (22,972 | ) | (59,394 | ) | (67,292 | ) | (21,740 | ) | (24,302 | ) | (11,852 | ) | (12,565 | ) | |||||||||||
Net carrying amount | $ | 211,406 | $ | 207,028 | $ | 354,606 | $ | 346,708 | $ | 150,760 | 148,198 | $ | 638,148 | $ | 637,435 | ||||||||||||
Interest cost (a) | |||||||||||||||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
$ | 4,070 | $ | 3,931 | $ | 10,275 | $ | 9,909 | $ | 3,676 | $ | 3,576 | $ | 16,645 | $ | 16,610 | ||||||||||||
Six Months Ended June 30, | |||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
$ | 8,128 | $ | 7,851 | $ | 20,425 | $ | 19,722 | $ | 7,335 | $ | 5,873 | $ | 33,284 | $ | 33,215 |
• | Leasehold interests in real property; |
• | Certain capital leases that constitute permitted liens; |
• | Certain motor vehicles; |
• | Assets owned by foreign subsidiaries or, subject to certain limitations, MMA; |
• | Assets with a fair market value of less than $15.0 million as to which the board of directors determine in good faith (and certify to the collateral agent) that the costs of obtaining or perfecting such security interest are excessive in |
• | Cash collateral for letters of credit or hedging obligations (up to 105% of the underlying obligations); |
• | Certain deposit accounts; |
• | The equity interests of immaterial subsidiaries and, subject to certain limitations, MMA; |
• | Voting stock of foreign subsidiaries in excess of 65.0% of the voting stock; and |
• | Other pledges of stock of a guarantor to the extent that Rule 3-16 of Regulation S-X under the Securities Act would require the filing of separate financial statements of such guarantor. |
June 30, 2014 | ||
Capital Leases | (In thousands) | |
Remainder of 2014 | 3,834 | |
2015 | 7,667 | |
2016 | 7,667 | |
2017 | 6,550 | |
2018 | 5,160 | |
Thereafter | 17,789 | |
Total | 48,667 |
(7) | Income Taxes |
(8) | Stockholders’ Equity |
Increase to balance sheet captions: | As of June 30, 2014 | ||
Other non-current assets | $ | 16,381 | |
Property, plant and equipment, net | 3,378 | ||
Additional paid-in capital | 15,062 |
Increase to statements of operations and comprehensive loss captions: | Three Months Ended June 30, 2014 | Six Months Ended June 30, 2014 | |||||
Interest expense, net of capitalized interest | $ | 4,933 | $ | 4,933 | |||
Income tax benefit | 9,630 | 9,630 |
2012 Borrowed Shares | 2013 Borrowed Shares | Total | |||||||||
(In thousands) | |||||||||||
Fair value | $ | 7,957 | $ | 4,450 | $ | 12,407 | |||||
Unamortized issuance cost | 11,546 | 4,835 | 16,381 |
Three Months Ended June 30, 2014 | Six Months Ended June 30, 2014 | ||||||
(In thousands) | |||||||
Interest cost expensed | $ | 4,933 | $ | 4,933 | |||
Interest cost capitalized | 3,378 | 3,378 |
Foreign currency translation adjustments | Postretirement benefit liability | Accumulated other comprehensive loss | |||||||||
(In thousands) | |||||||||||
Balance at December 31, 2013 | $ | (6,638 | ) | $ | 187 | $ | (6,451 | ) | |||
Change in other comprehensive loss before reclassifications | (961 | ) | — | (961 | ) | ||||||
Net income (loss) reclassified from AOCI | — | — | — | ||||||||
Balance at June 30, 2014 | $ | (7,599 | ) | $ | 187 | $ | (7,412 | ) |
Foreign currency translation adjustments | Postretirement benefit liability | Accumulated other comprehensive loss | |||||||||
(In thousands) | |||||||||||
Balance at December 31, 2012 | $ | (8,261 | ) | $ | (1,172 | ) | $ | (9,433 | ) | ||
Change in other comprehensive loss before reclassifications | (2,632 | ) | — | (2,632 | ) | ||||||
Net income (loss) reclassified from AOCI | — | — | — | ||||||||
Balance at June 30, 2013 | $ | (10,893 | ) | $ | (1,172 | ) | $ | (12,065 | ) |
(9) | Loss per Share |
(10) | Stock-Based Compensation |
PBRSUs | Number of Shares | Weighted Average Grant-Date Price | ||||
Unvested at December 31, 2013 | 697,797 | $ | 7.45 | |||
Granted | 744,540 | $ | 4.99 | |||
Forfeited | (4,343 | ) | 5.88 | |||
Vested | — | — | ||||
Unvested at June 30, 2014 | 1,437,994 | $ | 6.18 |
RSUs | Number of Shares | Weighted Average Grant-Date Price | ||||
Unvested at December 31, 2013 | 1,076,385 | $ | 9.81 | |||
Granted | 932,052 | $ | 4.41 | |||
Forfeited | (54,775 | ) | $ | 8.95 | ||
Vested | (49,913 | ) | $ | 31.91 | ||
Unvested at June 30, 2014 | 1,903,749 | $ | 6.61 |
(11) | Commitments and Contingencies |
(a) | Future Operating Lease Commitments |
Total | Less Than 1 Year | 1 - 3 Years | 4 - 5 Years | More Than 5 Years | |||||||||||||||
(In thousands) | |||||||||||||||||||
Operating lease obligations | $ | 6,491 | $ | 2,400 | $ | 2,621 | $ | 602 | $ | 868 |
(b) | Purchase Commitments |
Total | Less Than 1 Year | 1 - 3 Years | 4 - 5 Years | More Than 5 Years | |||||||||||||||
(In thousands) | |||||||||||||||||||
Purchase obligations and other commitment | $ | 142,252 | $ | 142,252 | $ | — | $ | — | $ | — |
(c) | Labor Contract |
(d) | Reclamation Surety Bonds |
(e) | Purported Class Action and Derivative Lawsuits |
(12) | Concentrations |
(13) | Related-Party Transactions |
(14) | Net Change in Operating Assets and Liabilities |
Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Decrease (increase) in operating assets: | |||||||
Trade accounts receivable | $ | 14,708 | $ | 1,205 | |||
Inventory | (48,213 | ) | 23,176 | ||||
Prepaid expenses and other current assets | (5,764 | ) | 519 | ||||
Increase (decrease) in operating liabilities: | |||||||
Trade accounts payable | (6,070 | ) | (21,167 | ) | |||
Income tax payable | 684 | 494 | |||||
Interest payable | 15,552 | (27,689 | ) | ||||
Asset retirement obligation | (1,196 | ) | (2,013 | ) | |||
Accrued expenses | (1,614 | ) | (17,388 | ) | |||
$ | (31,913 | ) | $ | (42,863 | ) |
(15) | Fair Value of Financial Instruments |
• | Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
• | Level 2 - Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. |
• | Level 3 - Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable. |
June 30, 2014 | ||||||||||||||
Quoted Prices in Active Markets for Identical Assets/Liabilities | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||
(In thousands) | ||||||||||||||
Assets: | ||||||||||||||
Cash equivalents | $ | 42,377 | — | — | $ | 42,377 | ||||||||
Liabilities: | ||||||||||||||
Derivative liability | — | — | $ | 6,303 | $ | 6,303 |
December 31, 2013 | ||||||||||||||
Quoted Prices in Active Markets for Identical Assets/Liabilities | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||
(In thousands) | ||||||||||||||
Assets: | ||||||||||||||
Cash equivalents | $ | 179,052 | — | — | $ | 179,052 | ||||||||
Liabilities: | ||||||||||||||
Derivative liability | — | — | $ | 6,089 | $ | 6,089 |
June 30, 2014 | December 31, 2013 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Long-term debt | |||||||||||||||
3.25% Convertible Notes due June 2016 | $ | 211,406 | $ | 173,650 | $ | 207,028 | $ | 161,771 | |||||||
6.00% Convertible Notes due September 2017 | 354,606 | 269,618 | 346,708 | 312,570 | |||||||||||
5.50% Convertible Notes due February 2018 | 150,760 | 112,125 | 148,198 | 164,015 | |||||||||||
10% Senior Notes due June 2020 | 638,148 | 603,558 | 637,435 | 646,750 | |||||||||||
Total long-term debt | $ | 1,354,920 | $ | 1,158,951 | $ | 1,339,369 | $ | 1,285,106 |
(16) | 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; |
June 30, 2014 | |||||||||||||||||||
(In thousands) | |||||||||||||||||||
Condensed Consolidating Balance Sheets | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 36,680 | $ | 6,072 | $ | 113,620 | $ | — | $ | 156,372 | |||||||||
Trade accounts receivable, net | — | 3,841 | 43,190 | — | 47,031 | ||||||||||||||
Inventory | — | 35,407 | 146,615 | — | 182,022 | ||||||||||||||
Prepaid expenses and other current assets | — | 17,861 | 16,006 | — | 33,867 | ||||||||||||||
Total current assets | 36,680 | 63,181 | 319,431 | — | 419,292 | ||||||||||||||
Non-current assets: | |||||||||||||||||||
Deposits | 1,755 | 23,943 | — | — | 25,698 | ||||||||||||||
Property, plant and equipment, net | — | 1,606,889 | 136,605 | — | 1,743,494 | ||||||||||||||
Inventory | — | 25,934 | — | — | 25,934 | ||||||||||||||
Intangible assets, net | — | 409 | 318,545 | — | 318,954 | ||||||||||||||
Investments | — | 30,836 | 15,467 | — | 46,303 | ||||||||||||||
Goodwill | — | — | 228,750 | — | 228,750 | ||||||||||||||
Investments in consolidated subsidiaries | 409,155 | 120,163 | — | (529,318 | ) | — | |||||||||||||
Intercompany accounts receivable | 2,099,444 | — | 24,085 | (2,123,529 | ) | — | |||||||||||||
Other non-current assets | 16,380 | 651 | 5,790 | — | 22,821 | ||||||||||||||
Total non-current assets | 2,526,734 | 1,808,825 | 729,242 | (2,652,847 | ) | 2,411,954 | |||||||||||||
Total assets | $ | 2,563,414 | $ | 1,872,006 | $ | 1,048,673 | $ | (2,652,847 | ) | $ | 2,831,246 | ||||||||
Current liabilities: | |||||||||||||||||||
Trade accounts payable | $ | — | $ | 32,202 | $ | 30,880 | $ | — | $ | 63,082 | |||||||||
Accrued expenses | 18,158 | 11,766 | 17,081 | — | 47,005 | ||||||||||||||
Debt and capital lease obligations | — | 2,852 | 11,378 | — | 14,230 | ||||||||||||||
Other current liabilities | — | 441 | 3,945 | — | 4,386 | ||||||||||||||
Total current liabilities | 18,158 | 47,261 | 63,284 | — | 128,703 | ||||||||||||||
Non-current liabilities: | |||||||||||||||||||
Asset retirement obligation | — | 16,523 | — | — | 16,523 | ||||||||||||||
Deferred tax liabilities | — | — | 78,424 | — | 78,424 | ||||||||||||||
Debt and capital lease obligations | 1,354,920 | 19,597 | 4,152 | — | 1,378,669 | ||||||||||||||
Intercompany accounts payable | — | 2,123,529 | — | (2,123,529 | ) | — | |||||||||||||
Other non-current liabilities | — | 1,401 | 8,855 | — | 10,256 | ||||||||||||||
Total non-current liabilities | 1,354,920 | 2,161,050 | 91,431 | (2,123,529 | ) | 1,483,872 | |||||||||||||
Total liabilities | $ | 1,373,078 | $ | 2,208,311 | $ | 154,715 | $ | (2,123,529 | ) | $ | 1,612,575 | ||||||||
Stockholders’ equity: | |||||||||||||||||||
Common stock | 245 | — | — | — | 245 | ||||||||||||||
Additional paid-in capital | 2,207,938 | 149,857 | 1,315,426 | (1,465,283 | ) | 2,207,938 | |||||||||||||
Accumulated other comprehensive loss | (7,412 | ) | — | (7,412 | ) | 7,412 | (7,412 | ) | |||||||||||
Accumulated deficit | (1,010,435 | ) | (486,162 | ) | (442,391 | ) | 928,553 | (1,010,435 | ) | ||||||||||
Total Molycorp stockholders’ equity | 1,190,336 | (336,305 | ) | 865,623 | (529,318 | ) | 1,190,336 | ||||||||||||
Noncontrolling interests | — | — | 28,335 | — | 28,335 | ||||||||||||||
Total stockholders’ equity | 1,190,336 | (336,305 | ) | 893,958 | (529,318 | ) | 1,218,671 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 2,563,414 | $ | 1,872,006 | $ | 1,048,673 | $ | (2,652,847 | ) | $ | 2,831,246 |
December 31, 2013 | |||||||||||||||||||
(In thousands) | |||||||||||||||||||
Condensed Consolidating Balance Sheets | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 169,145 | $ | 6,467 | $ | 138,705 | $ | — | $ | 314,317 | |||||||||
Trade accounts receivable, net | — | 4,990 | 56,767 | — | 61,757 | ||||||||||||||
Inventory | — | 32,307 | 139,476 | — | 171,783 | ||||||||||||||
Prepaid expenses and other current assets | — | 15,833 | 13,377 | — | 29,210 | ||||||||||||||
Total current assets | 169,145 | 59,597 | 348,325 | — | 577,067 | ||||||||||||||
Non-current assets: | |||||||||||||||||||
Deposits | 1,754 | 24,243 | — | — | 25,997 | ||||||||||||||
Property, plant and equipment, net | — | 1,620,851 | 142,023 | — | 1,762,874 | ||||||||||||||
Inventory | — | 25,329 | — | — | 25,329 | ||||||||||||||
Intangible assets, net | — | 442 | 330,425 | — | 330,867 | ||||||||||||||
Investments | — | 34,134 | 14,741 | — | 48,875 | ||||||||||||||
Goodwill | — | — | 228,750 | — | 228,750 | ||||||||||||||
Investments in consolidated subsidiaries | 532,767 | 121,849 | — | (654,616 | ) | — | |||||||||||||
Intercompany accounts receivable | 2,001,583 | — | — | (2,001,583 | ) | — | |||||||||||||
Other non-current assets | — | 771 | 6,272 | — | 7,043 | ||||||||||||||
Total non-current assets | 2,536,104 | 1,827,619 | 722,211 | (2,656,199 | ) | 2,429,735 | |||||||||||||
Total assets | $ | 2,705,249 | $ | 1,887,216 | $ | 1,070,536 | $ | (2,656,199 | ) | $ | 3,006,802 | ||||||||
Current liabilities: | |||||||||||||||||||
Trade accounts payable | $ | — | $ | 49,702 | $ | 34,747 | $ | — | $ | 84,449 | |||||||||
Accrued expenses | 18,158 | 13,782 | 16,561 | — | 48,501 | ||||||||||||||
Debt and capital lease obligations | — | 2,234 | 14,128 | — | 16,362 | ||||||||||||||
Other current liabilities | — | 617 | 3,446 | — | 4,063 | ||||||||||||||
Total current liabilities | 18,158 | 66,335 | 68,882 | — | 153,375 | ||||||||||||||
Non-current liabilities: | |||||||||||||||||||
Asset retirement obligation | — | 16,966 | — | — | 16,966 | ||||||||||||||
Deferred tax liabilities | — | — | 85,481 | — | 85,481 | ||||||||||||||
Debt and capital lease obligations | 1,339,368 | 19,355 | 5,193 | — | 1,363,916 | ||||||||||||||
Intercompany accounts payable | — | 1,999,562 | 2,021 | (2,001,583 | ) | — | |||||||||||||
Other non-current liabilities | — | 1,393 | 8,609 | — | 10,002 | ||||||||||||||
Total non-current liabilities | 1,339,368 | 2,037,276 | 101,304 | (2,001,583 | ) | 1,476,365 | |||||||||||||
Total liabilities | $ | 1,357,526 | $ | 2,103,611 | $ | 170,186 | $ | (2,001,583 | ) | $ | 1,629,740 | ||||||||
Stockholders’ equity: | |||||||||||||||||||
Common stock | 241 | — | — | — | 241 | ||||||||||||||
Preferred stock | 2 | — | — | — | 2 | ||||||||||||||
Additional paid-in capital | 2,194,405 | 149,857 | 1,315,426 | (1,465,283 | ) | 2,194,405 | |||||||||||||
Accumulated other comprehensive loss | (6,451 | ) | — | (6,451 | ) | 6,451 | (6,451 | ) | |||||||||||
Accumulated deficit | (840,474 | ) | (366,252 | ) | (437,964 | ) | 804,216 | (840,474 | ) | ||||||||||
Total Molycorp stockholders’ equity | 1,347,723 | (216,395 | ) | 871,011 | (654,616 | ) | 1,347,723 | ||||||||||||
Noncontrolling interests | — | — | 29,339 | — | 29,339 | ||||||||||||||
Total stockholders’ equity | 1,347,723 | (216,395 | ) | 900,350 | (654,616 | ) | 1,377,062 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 2,705,249 | $ | 1,887,216 | $ | 1,070,536 | $ | (2,656,199 | ) | $ | 3,006,802 |
Three Months Ended June 30, 2014 | |||||||||||||||||||
(In thousands) | |||||||||||||||||||
Condensed Consolidating Statements of Operations and Comprehensive Income | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Revenues | $ | — | $ | 12,009 | $ | 113,319 | $ | (8,421 | ) | $ | 116,907 | ||||||||
Costs of sales: | |||||||||||||||||||
Costs excluding depreciation and amortization | — | (38,490 | ) | (83,330 | ) | 8,421 | (113,399 | ) | |||||||||||
Depreciation and amortization | — | (16,031 | ) | (4,048 | ) | — | (20,079 | ) | |||||||||||
Gross (loss) profit | — | (42,512 | ) | 25,941 | — | (16,571 | ) | ||||||||||||
Operating expenses: | |||||||||||||||||||
Selling, general and administrative | (153 | ) | (10,437 | ) | (9,834 | ) | — | (20,424 | ) | ||||||||||
Depreciation, amortization and accretion | — | (1,057 | ) | (6,200 | ) | — | (7,257 | ) | |||||||||||
Research and development | — | (100 | ) | (4,383 | ) | — | (4,483 | ) | |||||||||||
Operating (loss) income | (153 | ) | (54,106 | ) | 5,524 | — | (48,735 | ) | |||||||||||
Other (expense) income: | |||||||||||||||||||
Other income (expense) | 15,149 | 196 | (15,049 | ) | — | 296 | |||||||||||||
Interest expense, net of capitalized interest | (39,658 | ) | (1,190 | ) | (437 | ) | — | (41,285 | ) | ||||||||||
Interest income (expense) from intercompany notes | 10,434 | (510 | ) | (9,924 | ) | — | — | ||||||||||||
Equity loss from consolidated subsidiaries | (79,301 | ) | (2,009 | ) | — | 81,310 | — | ||||||||||||
Loss before income taxes and equity earnings | (93,529 | ) | (57,619 | ) | (19,886 | ) | 81,310 | (89,724 | ) | ||||||||||
Income tax benefit (expense) | 9,630 | — | (2,203 | ) | — | 7,427 | |||||||||||||
Equity in (loss) income of affiliates | — | (1,592 | ) | 39 | — | (1,553 | ) | ||||||||||||
Net loss | (83,899 | ) | (59,211 | ) | (22,050 | ) | 81,310 | (83,850 | ) | ||||||||||
Net income attributable to noncontrolling interest | — | — | (49 | ) | — | (49 | ) | ||||||||||||
Net loss attributable to Molycorp stockholders | $ | (83,899 | ) | $ | (59,211 | ) | $ | (22,099 | ) | $ | 81,310 | $ | (83,899 | ) | |||||
Net loss | $ | (83,899 | ) | $ | (59,211 | ) | $ | (22,050 | ) | $ | 81,310 | $ | (83,850 | ) | |||||
Other comprehensive loss: | |||||||||||||||||||
Foreign currency translation adjustments | — | — | (109 | ) | — | (109 | ) | ||||||||||||
Comprehensive loss | $ | (83,899 | ) | $ | (59,211 | ) | $ | (22,159 | ) | $ | 81,310 | $ | (83,959 | ) | |||||
Comprehensive loss attributable to: | |||||||||||||||||||
Molycorp stockholders | (83,899 | ) | (59,211 | ) | (22,110 | ) | 81,310 | (83,910 | ) | ||||||||||
Noncontrolling interest | — | — | (49 | ) | — | (49 | ) | ||||||||||||
$ | (83,899 | ) | $ | (59,211 | ) | $ | (22,159 | ) | $ | 81,310 | $ | (83,959 | ) |
Six Months Ended June 30, 2014 | |||||||||||||||||||
(In thousands) | |||||||||||||||||||
Condensed Consolidating Statements of Operations and Comprehensive Income | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Revenues | $ | — | $ | 29,239 | $ | 227,051 | $ | (20,858 | ) | $ | 235,432 | ||||||||
Costs of sales: | |||||||||||||||||||
Costs excluding depreciation and amortization | — | (91,869 | ) | (167,861 | ) | 20,858 | (238,872 | ) | |||||||||||
Depreciation and amortization | — | (28,158 | ) | (8,068 | ) | — | (36,226 | ) | |||||||||||
Gross (loss) profit | — | (90,788 | ) | 51,122 | — | (39,666 | ) | ||||||||||||
Operating expenses: | |||||||||||||||||||
Selling, general and administrative | (393 | ) | (18,595 | ) | (19,391 | ) | — | (38,379 | ) | ||||||||||
Depreciation, amortization and accretion | — | (2,102 | ) | (12,357 | ) | — | (14,459 | ) | |||||||||||
Research and development | — | (243 | ) | (7,006 | ) | — | (7,249 | ) | |||||||||||
Operating (loss) income | (393 | ) | (111,728 | ) | 12,368 | — | (99,753 | ) | |||||||||||
Other (expense) income: | |||||||||||||||||||
Other (expense) income | (3,122 | ) | 212 | 3,680 | — | 770 | |||||||||||||
Interest expense, net of capitalized interest | (74,214 | ) | (2,395 | ) | (316 | ) | — | (76,925 | ) | ||||||||||
Interest income (expense) from intercompany notes | 20,789 | (1,014 | ) | (19,775 | ) | — | — | ||||||||||||
Equity loss from consolidated subsidiaries | (122,651 | ) | (1,686 | ) | — | 124,337 | — | ||||||||||||
Loss before income taxes and equity earnings | (179,591 | ) | (116,611 | ) | (4,043 | ) | 124,337 | (175,908 | ) | ||||||||||
Income tax benefit (expense) | 9,630 | — | (296 | ) | — | 9,334 | |||||||||||||
Equity in (loss) income of affiliates | — | (3,299 | ) | 24 | — | (3,275 | ) | ||||||||||||
Net loss | (169,961 | ) | (119,910 | ) | (4,315 | ) | 124,337 | (169,849 | ) | ||||||||||
Net income attributable to noncontrolling interest | — | — | (112 | ) | — | (112 | ) | ||||||||||||
Net loss attributable to Molycorp stockholders | $ | (169,961 | ) | $ | (119,910 | ) | $ | (4,427 | ) | $ | 124,337 | $ | (169,961 | ) | |||||
Net loss | $ | (169,961 | ) | $ | (119,910 | ) | $ | (4,315 | ) | $ | 124,337 | $ | (169,849 | ) | |||||
Other comprehensive loss: | |||||||||||||||||||
Foreign currency translation adjustments | — | — | (961 | ) | — | (961 | ) | ||||||||||||
Comprehensive loss | $ | (169,961 | ) | $ | (119,910 | ) | $ | (5,276 | ) | $ | 124,337 | $ | (170,810 | ) | |||||
Comprehensive loss attributable to: | |||||||||||||||||||
Molycorp stockholders | (169,961 | ) | (119,910 | ) | (5,164 | ) | 124,337 | (170,698 | ) | ||||||||||
Noncontrolling interest | — | — | (112 | ) | — | (112 | ) | ||||||||||||
$ | (169,961 | ) | $ | (119,910 | ) | $ | (5,276 | ) | $ | 124,337 | $ | (170,810 | ) |
Three Months Ended June 30, 2013 | |||||||||||||||||||
(In thousands) | |||||||||||||||||||
Condensed Consolidating Statements of Operations and Comprehensive Income | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Revenues | $ | — | $ | 27,168 | $ | 120,976 | $ | (12,032 | ) | $ | 136,112 | ||||||||
Costs of sales: | |||||||||||||||||||
Costs excluding depreciation and amortization | — | (46,363 | ) | (101,393 | ) | 12,032 | (135,724 | ) | |||||||||||
Depreciation and amortization | — | (11,757 | ) | (6,667 | ) | — | (18,424 | ) | |||||||||||
Gross (loss) profit | — | (30,952 | ) | 12,916 | — | (18,036 | ) | ||||||||||||
Operating expenses: | |||||||||||||||||||
Selling, general and administrative | — | (16,488 | ) | (9,571 | ) | — | (26,059 | ) | |||||||||||
Depreciation, amortization and accretion | — | 48 | (8,326 | ) | — | (8,278 | ) | ||||||||||||
Research and development | — | (1,431 | ) | (5,075 | ) | — | (6,506 | ) | |||||||||||
Operating loss | — | (48,823 | ) | (10,056 | ) | — | (58,879 | ) | |||||||||||
Other (expense) income: | |||||||||||||||||||
Other income | — | 244 | 2,569 | — | 2,813 | ||||||||||||||
Interest (expense) income, net of capitalized interest | (14,745 | ) | (2,236 | ) | 2,112 | — | (14,869 | ) | |||||||||||
Interest income (expense) from intercompany notes | 8,592 | 1,237 | (9,829 | ) | — | — | |||||||||||||
Equity loss from consolidated subsidiaries | (65,022 | ) | (7,487 | ) | — | 72,509 | — | ||||||||||||
Loss before income taxes and equity earnings | (71,175 | ) | (57,065 | ) | (15,204 | ) | 72,509 | (70,935 | ) | ||||||||||
Income tax (loss) benefit | — | (11,198 | ) | 14,728 | — | 3,530 | |||||||||||||
Equity in loss of affiliates | — | (8,012 | ) | 4,728 | — | (3,284 | ) | ||||||||||||
Net loss | (71,175 | ) | (76,275 | ) | 4,252 | 72,509 | (70,689 | ) | |||||||||||
Net income attributable to noncontrolling interest | — | — | (486 | ) | — | (486 | ) | ||||||||||||
Net loss attributable to Molycorp stockholders | $ | (71,175 | ) | $ | (76,275 | ) | $ | 3,766 | $ | 72,509 | $ | (71,175 | ) | ||||||
Net loss | $ | (71,175 | ) | $ | (76,275 | ) | $ | 4,252 | $ | 72,509 | $ | (70,689 | ) | ||||||
Other comprehensive (loss) income: | |||||||||||||||||||
Foreign currency translation adjustments | — | — | 662 | — | 662 | ||||||||||||||
Comprehensive loss | $ | (71,175 | ) | $ | (76,275 | ) | $ | 4,914 | $ | 72,509 | $ | (70,027 | ) | ||||||
Comprehensive loss attributable to: | |||||||||||||||||||
Molycorp stockholders | (71,175 | ) | (76,275 | ) | 5,400 | 72,509 | (69,541 | ) | |||||||||||
Noncontrolling interest | — | — | (486 | ) | — | (486 | ) | ||||||||||||
$ | (71,175 | ) | $ | (76,275 | ) | $ | 4,914 | $ | 72,509 | $ | (70,027 | ) |
Six Months Ended June 30, 2013 | |||||||||||||||||||
(In thousands) | |||||||||||||||||||
Condensed Consolidating Statements of Operations and Comprehensive Loss | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Revenues | $ | — | $ | 48,777 | $ | 255,124 | $ | (22,390 | ) | $ | 281,511 | ||||||||
Costs of sales: | |||||||||||||||||||
Costs excluding depreciation and amortization | — | (91,692 | ) | (201,953 | ) | 22,390 | (271,255 | ) | |||||||||||
Depreciation and amortization | — | (19,187 | ) | (13,409 | ) | — | (32,596 | ) | |||||||||||
Gross (loss) profit | — | (62,102 | ) | 39,762 | — | (22,340 | ) | ||||||||||||
Operating expenses: | |||||||||||||||||||
Selling, general and administrative | — | (33,504 | ) | (19,106 | ) | — | (52,610 | ) | |||||||||||
Depreciation, amortization and accretion | — | (1,661 | ) | (14,827 | ) | — | (16,488 | ) | |||||||||||
Research and development | — | (3,391 | ) | (9,520 | ) | — | (12,911 | ) | |||||||||||
Operating loss | — | (100,658 | ) | (3,691 | ) | — | (104,349 | ) | |||||||||||
Other (expense) income: | |||||||||||||||||||
Other income | — | 243 | 2,117 | — | 2,360 | ||||||||||||||
Interest (expense) income, net | (25,885 | ) | (4,295 | ) | 3,662 | — | (26,518 | ) | |||||||||||
Interest income (expense) from intercompany notes | 18,244 | 2,881 | (21,125 | ) | — | — | |||||||||||||
Equity loss from consolidated subsidiaries | (108,389 | ) | (6,409 | ) | — | 114,798 | — | ||||||||||||
Loss before income taxes and equity earnings | (116,030 | ) | (108,238 | ) | (19,037 | ) | 114,798 | (128,507 | ) | ||||||||||
Income tax benefit | 5,884 | 8,252 | 11,885 | — | 26,021 | ||||||||||||||
Equity in loss of affiliates | — | (10,010 | ) | 3,654 | — | (6,356 | ) | ||||||||||||
Net loss | (110,146 | ) | (109,996 | ) | (3,498 | ) | 114,798 | (108,842 | ) | ||||||||||
Net income attributable to noncontrolling interest | — | — | (1,304 | ) | — | (1,304 | ) | ||||||||||||
Net loss attributable to Molycorp stockholders | $ | (110,146 | ) | $ | (109,996 | ) | $ | (4,802 | ) | $ | 114,798 | $ | (110,146 | ) | |||||
Net loss | $ | (110,146 | ) | $ | (109,996 | ) | $ | (3,498 | ) | $ | 114,798 | $ | (108,842 | ) | |||||
Other comprehensive loss: | |||||||||||||||||||
Foreign currency translation adjustments | — | — | (2,632 | ) | — | (2,632 | ) | ||||||||||||
Comprehensive loss | $ | (110,146 | ) | $ | (109,996 | ) | $ | (6,130 | ) | $ | 114,798 | $ | (111,474 | ) | |||||
Comprehensive loss attributable to: | |||||||||||||||||||
Molycorp stockholders | (110,146 | ) | (109,996 | ) | (4,826 | ) | 114,798 | (110,170 | ) | ||||||||||
Noncontrolling interest | — | — | (1,304 | ) | — | (1,304 | ) | ||||||||||||
$ | (110,146 | ) | $ | (109,996 | ) | $ | (6,130 | ) | $ | 114,798 | $ | (111,474 | ) |
Six Months Ended June 30, 2014 | |||||||||||||||||||
(In thousands) | |||||||||||||||||||
Condensed Consolidating Statements of Cash Flows | Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Molycorp, Inc. consolidated | ||||||||||||||
Net cash used in operating activities | $ | (36,253 | ) | $ | (71,050 | ) | $ | (10,945 | ) | $ | — | $ | (118,248 | ) | |||||
Cash flows from investing activities: | |||||||||||||||||||
Intercompany advances made | (141,366 | ) | — | — | 141,366 | — | |||||||||||||
Repayments from non-guarantor | 48,000 | — | — | (48,000 | ) | — | |||||||||||||
Investment in joint ventures | — | — | (703 | ) | — | (703 | ) | ||||||||||||
Capital expenditures | — | (40,928 | ) | (3,759 | ) | — | (44,687 | ) | |||||||||||
Recovery from insurance claims | — | 12,900 | — | — | 12,900 | ||||||||||||||
Other investing activities | — | — | 395 | — | 395 | ||||||||||||||
Net cash used in investing activities | (93,366 | ) | (28,028 | ) | (4,067 | ) | 93,366 | (32,095 | ) | ||||||||||
Cash flows from financing activities: | |||||||||||||||||||
Repayments of debt | — | — | (3,079 | ) | — | (3,079 | ) | ||||||||||||
Payments of preferred dividends | (2,846 | ) | — | — | — | (2,846 | ) | ||||||||||||
Dividend paid to noncontrolling interests | — | — | (1,135 | ) | — | (1,135 | ) | ||||||||||||
Repayments to parent | — | — | (48,000 | ) | 48,000 | — | |||||||||||||
Intercompany advances owed | — | 97,822 | 43,544 | (141,366 | ) | — | |||||||||||||
Other financing activities | — | 861 | (697 | ) | — | 164 | |||||||||||||
Net cash (used in) provided by financing activities | (2,846 | ) | 98,683 | (9,367 | ) | (93,366 | ) | (6,896 | ) | ||||||||||
Effect of exchange rate changes on cash | — | — | (706 | ) | — | (706 | ) | ||||||||||||
Net change in cash and cash equivalents | (132,465 | ) | (395 | ) | (25,085 | ) | — | (157,945 | ) | ||||||||||
Cash and cash equivalents at beginning of the period | 169,145 | 6,467 | 138,705 | — | 314,317 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 36,680 | $ | 6,072 | $ | 113,620 | $ | — | $ | 156,372 |
Six Months Ended June 30, 2013 | |||||||||||||||||||
(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 | $ | (1,972 | ) | $ | (93,855 | ) | $ | 21,786 | $ | — | $ | (74,041 | ) | ||||||
Cash flows from investing activities: | |||||||||||||||||||
Loans to guarantor | — | — | (40,000 | ) | 40,000 | — | |||||||||||||
Intercompany advances made | (318,835 | ) | — | — | 318,835 | — | |||||||||||||
Loans to non-guarantor | — | (1,300 | ) | — | 1,300 | — | |||||||||||||
Repayments from non-guarantor | 10,000 | — | — | (10,000 | ) | — | |||||||||||||
Investment in joint ventures | — | (3,423 | ) | — | — | (3,423 | ) | ||||||||||||
Capital expenditures | — | (255,989 | ) | (8,737 | ) | — | (264,726 | ) | |||||||||||
Other investing activities | — | — | (224 | ) | — | (224 | ) | ||||||||||||
Net cash used in investing activities | (308,835 | ) | (260,712 | ) | (48,961 | ) | 350,135 | (268,373 | ) | ||||||||||
Cash flows from financing activities: | |||||||||||||||||||
Repayments of debt | — | — | (27,283 | ) | — | (27,283 | ) | ||||||||||||
Net proceeds from sale of common stock | 248,150 | — | — | — | 248,150 | ||||||||||||||
Issuance of 5.50% Convertible Notes | 165,600 | — | — | — | 165,600 | ||||||||||||||
Payments of preferred dividends | (5,693 | ) | — | — | — | (5,693 | ) | ||||||||||||
Dividend paid to noncontrolling interests | — | — | (1,946 | ) | — | (1,946 | ) | ||||||||||||
Borrowings from non-guarantor | — | 40,000 | — | (40,000 | ) | — | |||||||||||||
Borrowing from guarantor | — | — | 1,300 | (1,300 | ) | — | |||||||||||||
Repayments to parent | — | — | (10,000 | ) | 10,000 | — | |||||||||||||
Intercompany advances owed | — | 303,659 | 15,176 | (318,835 | ) | — | |||||||||||||
Other financing activities | — | (360 | ) | — | — | (360 | ) | ||||||||||||
Net cash provided by (used in) financing activities | 408,057 | 343,299 | (22,753 | ) | (350,135 | ) | 378,468 | ||||||||||||
Effect of exchange rate changes on cash | — | — | 318 | — | 318 | ||||||||||||||
Net change in cash and cash equivalents | 97,250 | (11,268 | ) | (49,610 | ) | — | 36,372 | ||||||||||||
Cash and cash equivalents at beginning of the period | 16,560 | 18,020 | 193,210 | — | 227,790 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 113,810 | $ | 6,752 | $ | 143,600 | $ | — | $ | 264,162 |
(17) | Subsequent Events |
• | the need to secure additional capital to implement our business plans, and our ability to successfully secure any such capital; |
• | our ability to optimize our Mountain Pass facility to produce rare earths and other planned downstream products at planned production rates and cash production costs, including the impact of any unanticipated process interruptions; |
• | the success of our cost mitigation efforts in connection with our modernization and expansion efforts at the Mountain Pass facility, which if unsuccessful, might cause our costs to exceed budget; |
• | the final costs of our planned capital projects which may differ from estimated costs, including unanticipated costs related to optimization of our Mountain Pass facility; |
• | market conditions, including prices and demand for our products; |
• | our ability to control our working capital needs; |
• | our ability to service our debt; |
• | risks and uncertainties associated with intangible assets, including any future goodwill impairment charges; |
• | our ability to protect our intellectual property, and our ability to defend against any claims of infringement of intellectual property rights of third parties; |
• | risks associated with doing business globally, including foreign exchange rate fluctuations and our ability to repatriate cash generated from our global operations; |
• | our ability to develop internal and external sources of demand for our products; |
• | the development and commercialization of new products; |
• | unexpected actions of domestic and foreign governments, including changes to China's export quota system, production quotas system and other regulatory mechanisms for the rare earths industry; |
• | various events which could disrupt operations, including natural events and other risks; |
• | uncertainties associated with our reserve estimates and non-reserve deposit information, including estimated mine life and annual production; |
• | uncertainties related to feasibility studies that provide estimates of expected or anticipated costs, expenditures and economic returns, REO prices, production costs and other expenses for operations, which are subject to fluctuation; |
• | risks and liabilities related to the dangers involved in the mining and processing of minerals and the manufacture of mineral products; |
• | uncertainties regarding global supply and demand for rare earths materials; |
• | uncertainties regarding the results of our exploratory drilling programs; |
• | our ability to enter into additional definitive agreements with our customers and our ability to maintain customer relationships; |
• | uncertainties related to Molycorp Canada's competitive position in the manufacture of NdFeB powders resulting from the expiration of certain key patents; |
• | our sintered NdFeB rare earths magnet joint venture's ability to successfully manufacture magnets within its expected timeframe; |
• | our ability to remediate the material weaknesses in our internal control over financial reporting, and our ability to maintain sufficient internal controls in the future, which could affect our ability to ensure timely and reliable financial reports; |
• | our ability to successfully integrate other acquired businesses; |
• | our ability to maintain appropriate relations with unions and employees; |
• | our ability to successfully implement our vertical integration strategy; |
• | 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; |
• | our ability to obtain and renew permits required for the operation of our manufacturing facilities; |
• | uncertainties associated with unanticipated geological conditions related to mining; and |
• | the outcome of the stockholder class action litigation and derivative litigation, including any actions taken by government agencies in connection therewith. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Operating loss | $ | (48,735 | ) | $ | (58,879 | ) | $ | (99,753 | ) | $ | (104,349 | ) | |||
Add back: | |||||||||||||||
Depreciation and amortization included in costs of sales | 20,079 | 18,424 | 36,226 | 32,596 | |||||||||||
Depreciation, amortization and accretion | 7,257 | 8,278 | 14,459 | 16,488 | |||||||||||
OIBDA | (21,399 | ) | (32,177 | ) | (49,068 | ) | (55,265 | ) | |||||||
Add back: | |||||||||||||||
Stock-based compensation | 1,466 | 1,037 | 2,288 | 794 | |||||||||||
Inventory write-downs (Mountain Pass) | 16,593 | 14,330 | 32,286 | 33,535 | |||||||||||
Impact of purchase accounting on cost of inventory sold | 142 | 1,002 | 719 | 3,499 | |||||||||||
Water removal | 1,239 | 4,964 | 9,341 | 8,698 | |||||||||||
Adjusted OIBDA | $ | (1,959 | ) | $ | (10,844 | ) | $ | (4,434 | ) | $ | (8,739 | ) |
Resources | |||||||||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||
2014 | 2013 | Variance | 2014 | 2013 | Variance | ||||||||||||||||||||||||
(In thousands, except volume and ASP) | |||||||||||||||||||||||||||||
Gross revenues | $ | 10,037 | $ | 17,587 | $ | (7,550 | ) | (43 | )% | $ | 25,601 | $ | 34,890 | $ | (9,289 | ) | (27 | )% | |||||||||||
Sales volume (mt) | 974 | 1,049 | (75 | ) | (7 | )% | 1,962 | 1,812 | 150 | 8 | % | ||||||||||||||||||
ASP per kilogram | $ | 10.30 | $ | 16.77 | $ | (6.47 | ) | (39 | )% | $ | 13.05 | $ | 19.25 | $ | (6.20 | ) | (32 | )% | |||||||||||
Depreciation, amortization and accretion (a) | $ | 17,009 | $ | 11,629 | $ | 5,380 | $ | 30,101 | $ | 20,682 | $ | 9,419 | |||||||||||||||||
Operating loss | (47,307 | ) | (40,404 | ) | (6,903 | ) | (96,843 | ) | (80,529 | ) | (16,314 | ) | |||||||||||||||||
OIBDA(b) | $ | (30,298 | ) | $ | (28,775 | ) | $ | (1,523 | ) | $ | (66,742 | ) | $ | (59,847 | ) | $ | (6,895 | ) | |||||||||||
(a) Related to production and other operating expense. | |||||||||||||||||||||||||||||
(b) See definition in the previous page. |
Chemicals and Oxides | |||||||||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||
2014 | 2013 | Variance | 2014 | 2013 | Variance | ||||||||||||||||||||||||
(In thousands, except volume and ASP) | |||||||||||||||||||||||||||||
Gross revenues | $ | 48,632 | $ | 41,481 | $ | 7,151 | 17 | % | $ | 95,188 | $ | 105,691 | $ | (10,503 | ) | (10 | )% | ||||||||||||
Sales volume (mt) | 1,582 | 1,266 | 316 | 25 | % | 3,508 | 3,132 | 376 | 12 | % | |||||||||||||||||||
ASP per kilogram | $ | 30.74 | $ | 32.76 | $ | (2.02 | ) | (6 | )% | $ | 27.14 | $ | 33.74 | $ | (6.60 | ) | (20 | )% | |||||||||||
Depreciation and amortization(a) | $ | 3,908 | $ | 5,589 | $ | (1,681 | ) | $ | 7,781 | $ | 11,127 | $ | (3,346 | ) | |||||||||||||||
Operating income (loss) | 928 | (15,174 | ) | 16,102 | 355 | (18,480 | ) | 18,835 | |||||||||||||||||||||
OIBDA | $ | 4,836 | $ | (9,585 | ) | $ | 14,421 | $ | 8,136 | $ | (7,353 | ) | $ | 15,489 | |||||||||||||||
(a) Related to production and other operating expense. |
Magnetic Materials and Alloys | |||||||||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||
2014 | 2013 | Variance | 2014 | 2013 | Variance | ||||||||||||||||||||||||
(In thousands, except volume and ASP) | |||||||||||||||||||||||||||||
Gross revenues | $ | 54,360 | $ | 66,114 | $ | (11,754 | ) | (18 | )% | $ | 110,298 | $ | 120,792 | $ | (10,494 | ) | (9 | )% | |||||||||||
Sales volume (mt) | 1,383 | 1,485 | (102 | ) | (7 | )% | 2,757 | 2,748 | 9 | — | % | ||||||||||||||||||
ASP per kilogram | $ | 39.31 | $ | 44.52 | $ | (5.21 | ) | (12 | )% | $ | 40.01 | $ | 43.96 | $ | (3.95 | ) | (9 | )% | |||||||||||
Depreciation and amortization(a) | $ | 4,261 | $ | 7,422 | $ | (3,161 | ) | $ | 8,498 | $ | 12,901 | $ | (4,403 | ) | |||||||||||||||
Operating income | 7,551 | 10,638 | (3,087 | ) | 16,991 | 17,401 | (410 | ) | |||||||||||||||||||||
OIBDA | $ | 11,812 | $ | 18,060 | $ | (6,248 | ) | $ | 25,489 | $ | 30,302 | $ | (4,813 | ) | |||||||||||||||
(a) Related to production and other operating expense. |
Rare Metals | |||||||||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||
2014 | 2013 | Variance | 2014 | 2013 | Variance | ||||||||||||||||||||||||
(In thousands, except volume and ASP) | |||||||||||||||||||||||||||||
Gross revenues | $ | 15,944 | $ | 24,287 | $ | (8,343 | ) | (34 | )% | $ | 36,368 | $ | 50,750 | $ | (14,382 | ) | (28 | )% | |||||||||||
Sales volume (mt) | 79 | 92 | (13 | ) | (14 | )% | 180 | 173 | 7 | 4 | % | ||||||||||||||||||
ASP per kilogram | $ | 201.81 | $ | 264.00 | $ | (62.19 | ) | (24 | )% | $ | 201.70 | $ | 293.35 | $ | (91.65 | ) | (31 | )% | |||||||||||
Depreciation and amortization(a) | $ | 2,101 | $ | 2,005 | $ | 96 | $ | 4,194 | $ | 4,258 | $ | (64 | ) | ||||||||||||||||
Operating (loss) income | (1,361 | ) | (2,700 | ) | 1,339 | (3,523 | ) | 601 | (4,124 | ) | |||||||||||||||||||
OIBDA | $ | 740 | $ | (695 | ) | $ | 1,435 | $ | 671 | $ | 4,859 | $ | (4,188 | ) | |||||||||||||||
(a) Related to production and other operating expense. |
Cash and Cash Equivalents by Country | (In thousands) | |||
China (including Hong Kong) | $ | 46,613 | ||
Barbados | 8,282 | |||
Canada | 15,920 | |||
Estonia | 5,678 | |||
Japan | 11,470 | |||
Germany | 4,418 | |||
United Kingdom | 2,835 | |||
Thailand | 2,332 | |||
Other | 2,206 | |||
Total cash and cash equivalents in foreign countries | 99,754 | |||
United States | 56,618 | |||
Total cash and cash equivalents | $ | 156,372 |
Payments Due by Period | |||||||||||||||||||
Total | Less Than 1 Year | 1 - 3 Years | 4 - 5 Years | More Than 5 Years | |||||||||||||||
(In thousands) | |||||||||||||||||||
Operating lease obligations (1) | $ | 6,491 | $ | 2,400 | $ | 2,621 | $ | 602 | $ | 868 | |||||||||
Purchase obligations and other commitments (2) | 142,252 | 142,252 | — | — | — | ||||||||||||||
Employee obligations (3) | 2,071 | 2,071 | — | — | — | ||||||||||||||
Asset retirement obligations (4) | 33,340 | 257 | 3,672 | 4,184 | 25,227 | ||||||||||||||
Long-term debt | 1,482,014 | 10,648 | 648,866 | 822,500 | — | ||||||||||||||
Fixed interest on long-term debt | 535,326 | 107,038 | 293,540 | 134,748 | — | ||||||||||||||
Capital lease obligations | 48,667 | 7,667 | 20,670 | 10,165 | 10,165 | ||||||||||||||
Total | $ | 2,250,161 | $ | 272,333 | $ | 969,369 | $ | 972,199 | $ | 36,260 |
(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. |
(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. The discount rates we used to recognize these obligations in the balance sheets range from 5.12% to 10%, depending on the timing of when these obligations arose or were updated. |
1. | Retrospectively to each prior reporting period presented. |
2. | Retrospectively with the cumulative effect of initially applying this update recognized at the date of initial application. If an entity elects this transition method it also should provide the additional disclosures in reporting periods that include the date of initial application of: |
i. | The amount by which each financial statement line item is affected in the current reporting period by the application of this update as compared to the guidance that was in effect before the change. |
ii. | An explanation of the reasons for significant changes. |
MOLYCORP, INC. | ||
August 6, 2014 | By: | /s/ Geoffrey R. Bedford |
Geoffrey R. Bedford President and Chief Executive Officer (Principal Executive Officer) | ||
August 6, 2014 | By: | /s/ Michael F. Doolan |
Michael F. Doolan Chief Financial Officer (Principal Financial Officer) |
3.1 | Amended and Restated Certificate of Incorporation of Molycorp, Inc., as amended. | ||
3.2 | Bylaws of Molycorp, Inc. (incorporated by reference to Exhibit 3.2 to Molycorp, Inc.'s Current Report on Form 8-K (File No. 001-34827) filed with the Securities and Exchange Commission on August 6, 2010). | ||
10.1 | Employment Agreement, dated June 27, 2014, by and between Molycorp, Inc. and Michael F. Doolan. | ||
10.2 | Employment Agreement, dated June 27, 2014, by and between Molycorp, Inc. and Kevin W. Johnson. | ||
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
32.1 | Certification pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
95.1 | Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. | ||
101.INS | XBRL Instance Document | ||
101.SCH | XBRL Taxonomy Extension Schema Document | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
Class | Name | Address |
Class II | Mark A. Smith | 5619 Denver Tech Center Parkway, Suite 1000, Greenwood Village, Colorado 80111 |
Class III | Ross R. Bhappu | 5619 Denver Tech Center Parkway, Suite 1000, Greenwood Village, Colorado 80111 |
Class II | Brian T. Dolan | 5619 Denver Tech Center Parkway, Suite 1000, Greenwood Village, Colorado 80111 |
Class I | Charles R. Henry | 5619 Denver Tech Center Parkway, Suite 1000, Greenwood Village, Colorado 80111 |
Class III | Mark S. Kristoff | 5619 Denver Tech Center Parkway, Suite 1000, Greenwood Village, Colorado 80111 |
Class III | Alec Machiels | 5619 Denver Tech Center Parkway, Suite 1000, Greenwood Village, Colorado 80111 |
Class I | Russell D. Ball | 5619 Denver Tech Center Parkway, Suite 1000, Greenwood Village, Colorado 80111 |
Class I | Jack E. Thompson | 5619 Denver Tech Center Parkway, Suite 1000, Greenwood Village, Colorado 80111 |
Title: | Executive Vice President and General Counsel |
Title: | Executive Vice President and General Counsel |
Stock Price on Effective Date | |||||||||||||||
Effective date | $5 | $10 | $20 | $30 | $40 | $50 | $60 | $75 | $85 | $100 | $125 | $150 | $200 | $250 | $300 |
February 16, 2011 | 1.7215 | 1.8571 | 1.863 | 1.8032 | 1.7453 | 1.7063 | 1.6825 | 1.6645 | 1.6591 | 1.6561 | 1.6563 | 1.8581 | 1.6813 | 1.6632 | 1.6642 |
March 1, 2012 | 1.8561 | 1.9368 | 1.9345 | 1.8704 | 1.7985 | 1.7432 | 1.7071 | 1.6786 | 1.6697 | 1.6638 | 1.6619 | 1.6826 | 1.6642 | 1.865 | 1.6655 |
March 1, 2013 | 1.9448 | 1.9724 | 1.9817 | 1.9477 | 1.8711 | 1.7906 | 1.7322 | 1.687 | 1.6745 | 1.6673 | 1.6653 | 1.6653 | 1.6658 | 1.686 | 1.6682 |
March 1, 2014 | 2.0000 | 2.0000 | 2.0000 | 2.0000 | 2.0000 | 2.0000 | 1.6667 | 1.6667 | 1.6667 | 1.6667 | 1.6667 | 1.6667 | 1.6667 | 1.6667 | 1.6667 |
* | The Corporation is not required to issue Common Stock until the original Mandatory Convertible Preferred Stock Certificate(s) (or evidence of loss, theft or destruction thereof) to be converted are received by the Corporation or the Conversion and Dividend Disbursing Agent. |
** | Address where Common Stock and any other payments or certificates shall be sent by the Corporation. |
Amount of Decrease in Number of Shares Represented by this Global Preferred Share | Amount of Increase in Number of Shares Represented by this Global Preferred Share | Number of Shares Represented by this Global Preferred Share following Decrease or Increase | Signature of Authorized Officer of Transfer Agent and Registrar |
By: /s/ Kevin W. Johnson |
Name: Kevin W. Johnson |
Title: Executive Vice President and General Counsel |
By: | /s/ Geoffrey R. Bedford | /s/ Michael F. Doolan | |
Name: Geoffrey R. Bedford | Name: Michael F. Doolan | ||
Title: President and CEO | |||
Date: June 27, 2014 | Date: June 27, 2014 |
i. | the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of voting securities of Molycorp, Inc. where such acquisition causes such Person to own more than 50% of the combined voting power of the then outstanding voting securities of Molycorp, Inc. entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not be deemed to result in a Change of Control: (A) any acquisition directly from Molycorp, Inc. that is approved by the Incumbent Board (as defined in subsection (ii) below), (B) any acquisition by Molycorp, Inc., (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Molycorp, Inc. or any corporation controlled by Molycorp, Inc. or (D) any acquisition by any corporation pursuant to a transaction that complies with clauses (A), (B) and (C) of subsection (iii) below; provided, further, that if any Person’s beneficial ownership of the Outstanding Company Voting Securities exceeds 50% as a result of a transaction described in clause (A) or (B) above, and such Person subsequently acquires beneficial ownership of additional voting securities of Molycorp, Inc., such subsequent acquisition shall be treated as an acquisition that causes such Person to own more than 50% of the Outstanding Company Voting Securities; and provided, further, that if at least a majority of the members of the Incumbent Board determines in good faith that a Person has acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the Outstanding Company Voting Securities inadvertently, and such Person divests as promptly as practicable a sufficient number of shares so that such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) less than or equal to 50% of the Outstanding Company Voting Securities, then no Change of Control shall have occurred as a result of such Person’s acquisition; |
ii. | individuals who, as of the Effective Date, constituted the Board of Directors of Molycorp, Inc. (the “Incumbent Board” as modified by this subsection (ii)) cease for any reason to constitute at least a majority of the Board of Directors of Molycorp, Inc.; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by Molycorp, Inc.’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (either by specific vote or by approval of the proxy statement of Molycorp, Inc. in which such person is |
iii. | the consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of Molycorp, Inc. or the acquisition of assets of another corporation or other transaction (“Business Combination”) excluding, however, such a Business Combination pursuant to which (A) the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that as a result of such transaction owns Molycorp, Inc. or all or substantially all of Molycorp, Inc.’s assets either directly or through one or more subsidiaries), (B) no Person (excluding any employee benefit plan (or related trust) of Molycorp, Inc., Molycorp, Inc. or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, more than 50% of the combined voting power of the then outstanding securities entitled to vote generally in the election of directors of the entity resulting from such Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Directors of Molycorp, Inc., providing for such Business Combination; or |
iv. | approval by the stockholders of Molycorp, Inc. of a complete liquidation or dissolution of Molycorp, Inc. except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of subsection (iii) above. |
1. | 66.6667% of the first $3,500 of pretax monthly earnings plus 50% of the next $15,334 of pretax monthly earnings, less 100% of direct deductible sources of income; |
2. | if the monthly benefit is taxable, 85% of pretax monthly earnings, less 100% of direct and indirect deductible sources of income; or |
3. | $10,000, the maximum monthly benefit. |
• | Providing for an additional monthly benefit of $6,650 |
1. | Employee Life Insurance |
2. | Dependent Life Insurance |
3. | Extended Health Care |
4. | Direct Drugs – Plan 3 |
5. | Vision Care |
6. | Professional Services |
7. | Dental Care |
By: | /s/ Geoffrey R. Bedford | /s/ Kevin W. Johnson | |
Name: Geoffrey R. Bedford | Name: Kevin W. Johnson | ||
Title: President and CEO | |||
Date: June 27, 2014 | Date: June 27, 2014 |
i. | the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of voting securities of the Employer where such acquisition causes such Person to own more than 50% of the combined voting power of the then outstanding voting securities of the Employer entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not be deemed to result in a Change of Control: (A) any acquisition directly from the Employer that is approved by the Incumbent Board (as defined in subsection (ii) below), (B) any acquisition by the Employer, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Employer or any corporation controlled by the Employer or (D) any acquisition by any corporation pursuant to a transaction that complies with clauses (A), (B) and (C) of subsection (iii) below; provided, further, that if any Person’s beneficial ownership of the Outstanding Company Voting Securities exceeds 50% as a result of a transaction described in clause (A) or (B) above, and such Person subsequently acquires beneficial ownership of additional voting securities of the Employer, such subsequent acquisition shall be treated as an acquisition that causes such Person to own more than 50% of the Outstanding Company Voting Securities; and provided, further, that if at least a majority of the members of the Incumbent Board determines in good faith that a Person has acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the Outstanding Company Voting Securities inadvertently, and such Person divests as promptly as practicable a sufficient number of shares so that such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) less than or equal to 50% of the Outstanding Company Voting Securities, then no Change of Control shall have occurred as a result of such Person’s acquisition; |
ii. | individuals who, as of the Effective Date, constituted the Board (the “Incumbent Board” as modified by this subsection (ii)) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Employer’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (either by specific vote or by approval of the proxy statement of the Employer in which such person is named as a nominee for |
iii. | the consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Employer or the acquisition of assets of another corporation or other transaction (“Business Combination”) excluding, however, such a Business Combination pursuant to which (A) the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that as a result of such transaction owns the Employer or all or substantially all of the Employer’s assets either directly or through one or more subsidiaries), (B) no Person (excluding any employee benefit plan (or related trust) of the Employer, the Employer or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, more than 50% of the combined voting power of the then outstanding securities entitled to vote generally in the election of directors of the entity resulting from such Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or |
iv. | approval by the stockholders of the Employer of a complete liquidation or dissolution of the Employer except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of subsection (iii) above. |
1. | PPO (Preferred Provider Organization) or HDHP (High-Deductible Health Plan) Medical Plan |
2. | Dental Plan |
3. | Vision Plan |
4. | Flexible Spending Account (FSA) |
5. | Basic Life Insurance - 2x annual earnings to a maximum of $300,000 with option to purchase additional amounts |
6. | Accidental Death and Dismemberment Insurance - 2x annual earnings to a maximum of $300,000 with option to purchase additional amounts |
7. | Short Term and Long Term Disability Insurance |
8. | Business Travel Accident Insurance |
9. | Employee Assistance Program (EAP) |
10. | Molycorp Minerals LLC 401(k) Plan |
1. | I have reviewed this quarterly report on Form 10-Q of Molycorp, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Geoffrey R. Bedford | |
Geoffrey R. Bedford President and Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Molycorp, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Michael F. Doolan | |
Michael F. Doolan Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
/s/ Geoffrey R. Bedford | |
Geoffrey R. Bedford President and Chief Executive Officer (Principal Executive Officer) | |
August 6, 2014 | |
/s/ Michael F. Doolan | |
Michael F. Doolan Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | |
August 6, 2014 |
Three Months Ended June 30, 2014 | ||||
(A) | Total number of alleged violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard under Section 104 of the Mine Act for which the Company received a citation from MSHA | 15 | ||
(B) | Total number of orders issued under Section 104(b) of the Mine Act | — | ||
(C) | Total number of citations and orders for alleged unwarrantable failure by the Company to comply with mandatory health or safety standards under Section 104(d) of the Mine Act | — | ||
(D) | Total number of alleged flagrant violations under Section 110(b)(2) of the Mine Act | — | ||
(E) | Total number of imminent danger orders issued under Section 107(a) of the Mine Act | — | ||
(F) | Total dollar value of proposed assessments from MSHA under the Mine Act | $ | 30,251 | |
(G) | Total number of mining-related fatalities | — | ||
(H) | Received notice from MSHA of a pattern of violations under Section 104(e) of the Mine Act | No | ||
(I) | Received notice from MSHA of the potential to have a pattern of violations under Section 104(e) of the Mine Act | No | ||
(J) | Total number of Legal Actions pending as of the last day of the Reporting Period (1) | 8 | ||
(K) | Total number of Legal Actions instituted during the Reporting Period | 2 | ||
(L) | Total number of Legal Actions resolved during the Reporting Period | — |
(1) | As of June 30, 2014, three legal actions are Section 111 Complaints for Compensation, one legal action is a Section 105(c) Complaint for Discharge, Discrimination or Interference, and four legal actions are penalty assessment contests. |
Fair Value of Financial Instruments Liability Carrying and Fair Value (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2014
|
Dec. 31, 2013
|
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total long-term debt, carrying value | $ 1,482,014 | |
Carrying Value
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total long-term debt, carrying value | 1,354,920 | 1,339,369 |
Fair Value
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total long-term debt, fair value | 1,158,951 | 1,285,106 |
Convertible Debt | 3.25% Convertible Notes, net of discount, due June 2016 | Carrying Value
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total long-term debt, carrying value | 211,406 | 207,028 |
Convertible Debt | 6.00% Convertible Notes, net of discount, due September 2017 | Carrying Value
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total long-term debt, carrying value | 354,606 | 346,708 |
Convertible Debt | 5.50% Convertible Notes, net of discount, due February 2018 | Carrying Value
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total long-term debt, carrying value | 150,760 | 148,198 |
Senior Notes | 10% Senior Notes, net of discount, due June 2020 | Carrying Value
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total long-term debt, carrying value | 638,148 | 637,435 |
Level 1 | Convertible Debt | 3.25% Convertible Notes, net of discount, due June 2016 | Fair Value
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total long-term debt, fair value | 173,650 | 161,771 |
Level 1 | Convertible Debt | 6.00% Convertible Notes, net of discount, due September 2017 | Fair Value
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total long-term debt, fair value | 269,618 | 312,570 |
Level 1 | Convertible Debt | 5.50% Convertible Notes, net of discount, due February 2018 | Fair Value
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total long-term debt, fair value | 112,125 | 164,015 |
Level 1 | Senior Notes | 10% Senior Notes, net of discount, due June 2020 | Fair Value
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total long-term debt, fair value | $ 603,558 | $ 646,750 |
Commitments and Contingencies Purchase Commitments (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2014
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Purchase Obligation | $ 142,252 |
Purchase Obligation, Due in Next Twelve Months | 142,252 |
Purchase Obligation, Due in Second and Third Year | 0 |
Purchase Obligation, Due in Fourth and Fifth Year | 0 |
Purchase Obligation, Due after Fifth Year | $ 0 |
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