x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
Large accelerated filer x | Accelerated filer o | |
Non-accelerated filer o | Smaller reporting company o |
Item | Page | ||
PART I - FINANCIAL INFORMATION | |||
1. | |||
2. | |||
4. | |||
PART II - OTHER INFORMATION | |||
6. | |||
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(Restated) | |||||||
SALES | $ | 386,686 | $ | 393,719 | |||
Costs and Expenses | |||||||
Cost of sales | 304,619 | 266,018 | |||||
Selling and general expenses | 15,491 | 16,099 | |||||
Other operating expense (income), net (Note 18) | 3,537 | (3,503 | ) | ||||
323,647 | 278,614 | ||||||
Equity in income of New Zealand joint venture | — | 258 | |||||
OPERATING INCOME | 63,039 | 115,363 | |||||
Interest expense | (12,969 | ) | (7,717 | ) | |||
Interest and miscellaneous (expense) income, net | (1,015 | ) | 57 | ||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 49,055 | 107,703 | |||||
Income tax expense | (7,712 | ) | (4,445 | ) | |||
INCOME FROM CONTINUING OPERATIONS | 41,343 | 103,258 | |||||
DISCONTINUED OPERATIONS, NET (Note 2) | |||||||
Income from discontinued operations, net of income tax expense of $0 and $22,273 | — | 44,477 | |||||
NET INCOME | 41,343 | 147,735 | |||||
Less: Net loss attributable to noncontrolling interest | (83 | ) | — | ||||
NET INCOME ATTRIBUTABLE TO RAYONIER INC. | 41,426 | 147,735 | |||||
OTHER COMPREHENSIVE INCOME | |||||||
Foreign currency translation adjustment | 17,803 | 975 | |||||
New Zealand joint venture cash flow hedges, net of income tax expense of $501 and $0 | 1,711 | 554 | |||||
Amortization of pension and postretirement plans, net of income tax expense of $931 and $2,204 | 2,097 | 4,969 | |||||
Total other comprehensive income | 21,611 | 6,498 | |||||
COMPREHENSIVE INCOME | 62,954 | 154,233 | |||||
Less: Comprehensive income attributable to noncontrolling interest | 5,425 | — | |||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC. | $ | 57,529 | $ | 154,233 | |||
EARNINGS PER COMMON SHARE (Note 4) | |||||||
BASIC EARNINGS PER SHARE ATTRIBUTABLE TO RAYONIER INC. | |||||||
Continuing Operations | $ | 0.33 | $ | 0.83 | |||
Discontinued Operations | — | 0.36 | |||||
Net Income | $ | 0.33 | $ | 1.19 | |||
DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO RAYONIER INC. | |||||||
Continuing Operations | $ | 0.32 | $ | 0.79 | |||
Discontinued Operations | — | 0.34 | |||||
Net Income | $ | 0.32 | $ | 1.13 |
March 31, 2014 | December 31, 2013 | ||||||
(Restated) | |||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 156,071 | $ | 199,644 | |||
Accounts receivable, less allowance for doubtful accounts of $777 and $673 | 111,697 | 94,956 | |||||
Inventory | |||||||
Finished goods | 124,075 | 115,270 | |||||
Work in progress | 2,533 | 3,555 | |||||
Raw materials | 12,943 | 17,661 | |||||
Manufacturing and maintenance supplies | 2,377 | 2,332 | |||||
Total inventory | 141,928 | 138,818 | |||||
Deferred tax assets | 31,580 | 39,100 | |||||
Prepaid and other current assets | 54,577 | 46,576 | |||||
Total current assets | 495,853 | 519,094 | |||||
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION | 2,067,549 | 2,049,378 | |||||
PROPERTY, PLANT AND EQUIPMENT | |||||||
Land | 20,620 | 20,138 | |||||
Buildings | 188,913 | 180,573 | |||||
Machinery and equipment | 1,756,924 | 1,760,641 | |||||
Construction in progress | 32,560 | 19,795 | |||||
Total property, plant and equipment, gross | 1,999,017 | 1,981,147 | |||||
Less — accumulated depreciation | (1,137,048 | ) | (1,120,326 | ) | |||
Total property, plant and equipment, net | 861,969 | 860,821 | |||||
OTHER ASSETS | 217,458 | 256,208 | |||||
TOTAL ASSETS | $ | 3,642,829 | $ | 3,685,501 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable | $ | 86,282 | $ | 69,293 | |||
Current maturities of long-term debt | 114,319 | 112,500 | |||||
Accrued taxes | 11,374 | 8,551 | |||||
Accrued payroll and benefits | 19,261 | 24,948 | |||||
Accrued interest | 13,857 | 9,531 | |||||
Accrued customer incentives | 10,082 | 9,580 | |||||
Other current liabilities | 35,870 | 34,874 | |||||
Current liabilities for dispositions and discontinued operations (Note 13) | 6,446 | 6,835 | |||||
Total current liabilities | 297,491 | 276,112 | |||||
LONG-TERM DEBT | 1,393,887 | 1,461,724 | |||||
NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS (Note 13) | 67,456 | 69,543 | |||||
PENSION AND OTHER POSTRETIREMENT BENEFITS (Note 15) | 95,098 | 95,654 | |||||
OTHER NON-CURRENT LIABILITIES | 31,254 | 27,225 | |||||
COMMITMENTS AND CONTINGENCIES (Notes 12 and 14) | |||||||
SHAREHOLDERS’ EQUITY | |||||||
Common Shares, 480,000,000 shares authorized, 126,451,505 and 126,257,870 shares issued and outstanding | 694,236 | 692,100 | |||||
Retained earnings | 994,624 | 1,015,209 | |||||
Accumulated other comprehensive loss | (30,037 | ) | (46,139 | ) | |||
TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY | 1,658,823 | 1,661,170 | |||||
Noncontrolling interest | 98,820 | 94,073 | |||||
TOTAL SHAREHOLDERS’ EQUITY | 1,757,643 | 1,755,243 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 3,642,829 | $ | 3,685,501 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(Restated) | |||||||
OPERATING ACTIVITIES | |||||||
Net income | $ | 41,343 | $ | 147,735 | |||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 48,728 | 35,992 | |||||
Non-cash cost of real estate sold | 978 | 633 | |||||
Stock-based incentive compensation expense | 3,103 | 3,280 | |||||
Deferred income taxes | 5,596 | 1,832 | |||||
Tax benefit of AFMC for CBPC exchange | — | (18,761 | ) | ||||
Amortization of losses from pension and postretirement plans | 3,028 | 6,279 | |||||
Gain on sale of discontinued operations, net | — | (42,670 | ) | ||||
Gain on foreign currency forward contracts | — | (1,881 | ) | ||||
Other | (287 | ) | (4,656 | ) | |||
Changes in operating assets and liabilities: | |||||||
Receivables | (15,950 | ) | (8,778 | ) | |||
Inventories | (950 | ) | 11,197 | ||||
Accounts payable | 13,929 | 15,386 | |||||
Income tax receivable/payable | 1,319 | 15,915 | |||||
All other operating activities | 935 | 99 | |||||
Payment to exchange AFMC for CBPC | — | (70,311 | ) | ||||
Expenditures for dispositions and discontinued operations | (2,498 | ) | (1,631 | ) | |||
CASH PROVIDED BY OPERATING ACTIVITIES | 99,274 | 89,660 | |||||
INVESTING ACTIVITIES | |||||||
Capital expenditures | (36,755 | ) | (32,664 | ) | |||
Purchase of timberlands | (10,637 | ) | (1,560 | ) | |||
Jesup mill cellulose specialties expansion (gross purchases of $0 and $57,693, net of purchases on account of $0 and $20,959) | — | (36,734 | ) | ||||
Proceeds from disposition of Wood Products business | — | 83,741 | |||||
Change in restricted cash | 45,312 | 9,908 | |||||
Other | 1,592 | 1,790 | |||||
CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES | (488 | ) | 24,481 | ||||
FINANCING ACTIVITIES | |||||||
Issuance of debt | 31,819 | 100,000 | |||||
Repayment of debt | (110,000 | ) | (170,000 | ) | |||
Dividends paid | (62,545 | ) | (57,744 | ) | |||
Proceeds from the issuance of common shares | 2,027 | 4,091 | |||||
Excess tax (deficiencies) benefits on stock-based compensation | (1,240 | ) | 6,191 | ||||
Repurchase of common shares | (1,754 | ) | (11,241 | ) | |||
Other | (679 | ) | — | ||||
CASH USED FOR FINANCING ACTIVITIES | (142,372 | ) | (128,703 | ) | |||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 13 | (17 | ) | ||||
CASH AND CASH EQUIVALENTS | |||||||
Change in cash and cash equivalents | (43,573 | ) | (14,579 | ) | |||
Balance, beginning of year | 199,644 | 280,596 | |||||
Balance, end of period | $ | 156,071 | $ | 266,017 | |||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||||||
Cash paid during the period: | |||||||
Interest | $ | 8,990 | $ | 3,562 | |||
Income taxes | $ | 7,134 | $ | 70,403 | |||
Non-cash investing activity: | |||||||
Capital assets purchased on account | $ | 17,891 | $ | 49,094 |
1. | BASIS OF PRESENTATION |
2. | SALE OF WOOD PRODUCTS BUSINESS |
Three Months Ended | |||
March 31, 2013 | |||
Sales | $ | 16,968 | |
Income from discontinued operations, net | $ | 44,477 |
3. | RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS |
Consolidated Statements of Income and Comprehensive Income for the Three Months Ended March 31, 2014 | ||||||||||||
As Previously Reported | Restatement | As Restated | ||||||||||
Operating Income | $ | 65,008 | $ | (1,969 | ) | $ | 63,039 | |||||
Income Tax Expense | (7,732 | ) | 20 | (7,712 | ) | |||||||
Income from Continuing Operations | 43,292 | (1,949 | ) | 41,343 | ||||||||
Net Income | 43,292 | (1,949 | ) | 41,343 | ||||||||
Net Income Attributable to Rayonier Inc. | 43,375 | (1,949 | ) | 41,426 | ||||||||
Basic Earnings Per Share Attributable to Rayonier Inc. | ||||||||||||
Continuing Operations | $ | 0.34 | (0.01 | ) | $ | 0.33 | ||||||
Discontinued Operations | — | — | — | |||||||||
Net Income | $ | 0.34 | $ | (0.01 | ) | $ | 0.33 | |||||
Diluted Earnings Per Share Attributable to Rayonier Inc. | ||||||||||||
Continuing Operations | $ | 0.34 | (0.02 | ) | $ | 0.32 | ||||||
Discontinued Operations | — | — | — | |||||||||
Net Income | $ | 0.34 | $ | (0.02 | ) | $ | 0.32 |
Consolidated Balance Sheet as of March 31, 2014 | ||||||||||||
As Previously Reported | Restatement | As Restated | ||||||||||
Prepaid and Other Current Assets | $ | 54,557 | $ | 20 | $ | 54,577 | ||||||
Timber and Timberlands, Net of Depletion and Amortization | 2,069,518 | (1,969 | ) | 2,067,549 | ||||||||
Retained earnings | 996,573 | (1,949 | ) | 994,624 |
4. | EARNINGS PER COMMON SHARE |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(Restated) | |||||||
Income from continuing operations | $ | 41,343 | $ | 103,258 | |||
Less: Loss from continuing operations attributable to noncontrolling interest | (83 | ) | — | ||||
Income from continuing operations attributable to Rayonier Inc. | $ | 41,426 | $ | 103,258 | |||
Income from discontinued operations attributable to Rayonier Inc. | $ | — | $ | 44,477 | |||
Net income attributable to Rayonier Inc. | $ | 41,426 | $ | 147,735 | |||
Shares used for determining basic earnings per common share | 126,344,987 | 124,479,865 | |||||
Dilutive effect of: | |||||||
Stock options | 286,535 | 533,031 | |||||
Performance and restricted shares | 83,850 | 448,440 | |||||
Assumed conversion of Senior Exchangeable Notes (a) | 1,063,538 | 2,115,959 | |||||
Assumed conversion of warrants (a) (b) | 645,583 | 2,859,593 | |||||
Shares used for determining diluted earnings per common share | 128,424,493 | 130,436,888 | |||||
Basic earnings per common share attributable to Rayonier Inc.: | |||||||
Continuing operations | $ | 0.33 | $ | 0.83 | |||
Discontinued operations | — | 0.36 | |||||
Net income | $ | 0.33 | $ | 1.19 | |||
Diluted earnings per common share attributable to Rayonier Inc.: | |||||||
Continuing operations | $ | 0.32 | $ | 0.79 | |||
Discontinued operations | — | 0.34 | |||||
Net income | $ | 0.32 | $ | 1.13 |
Three Months Ended March 31, | |||||
2014 | 2013 | ||||
Anti-dilutive shares excluded from the computations of diluted earnings per share: | |||||
Stock options, performance and restricted shares | 731,046 | 220,701 | |||
Assumed conversion of exchangeable note hedges (a) | 1,063,538 | 2,115,959 | |||
Total | 1,794,584 | 2,336,660 |
5. | INCOME TAXES |
Three Months Ended March 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(Restated) | (Restated) | ||||||||||||
Income tax expense at federal statutory rate | $ | 17 | 35.0 | % | $ | 38 | 35.0 | % | |||||
REIT income not subject to tax | (7 | ) | (14.2 | ) | (11 | ) | (10.1 | ) | |||||
Manufacturing deduction | (1 | ) | (2.2 | ) | (2 | ) | (2.2 | ) | |||||
Other | — | (0.1 | ) | — | 0.7 | ||||||||
Income tax expense before discrete items | 9 | 18.5 | % | 25 | 23.4 | % | |||||||
Exchange of AFMC for CBPC | — | — | (19 | ) | (17.5 | ) | |||||||
Other | (1 | ) | (2.8 | ) | (2 | ) | (1.8 | ) | |||||
Income tax expense as reported | $ | 8 | 15.7 | % | $ | 4 | 4.1 | % | |||||
6. | RESTRICTED DEPOSITS |
7. | JOINT VENTURE INVESTMENT |
Three Months Ended March 31, 2014 | |||
Sales | $ | 37,764 | |
Net Loss | (734 | ) |
Three Months Ended March 31, 2013 | |||
Sales | $ | 428,245 | |
Net Income | $ | 146,280 |
8. | SHAREHOLDERS’ EQUITY |
Rayonier Inc. Shareholders Equity | ||||||||||||||||||||||
Common Shares | Retained Earnings (Restated) | Accumulated Other Comprehensive Income/(Loss) | Non-controlling Interest | Total Shareholders’ Equity (Restated) | ||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balance, December 31, 2012 | 123,332,444 | $ | 670,749 | $ | 876,634 | $ | (109,379 | ) | $ | — | $ | 1,438,004 | ||||||||||
Net income | — | — | 371,896 | — | 1,902 | 373,798 | ||||||||||||||||
Dividends ($1.86 per share) | — | — | (233,321 | ) | — | — | (233,321 | ) | ||||||||||||||
Issuance of shares under incentive stock plans | 1,001,426 | 10,101 | — | — | — | 10,101 | ||||||||||||||||
Stock-based compensation | — | 11,710 | — | — | — | 11,710 | ||||||||||||||||
Excess tax benefit on stock-based compensation | — | 8,413 | — | — | — | 8,413 | ||||||||||||||||
Repurchase of common shares | (211,221 | ) | (11,326 | ) | — | — | — | (11,326 | ) | |||||||||||||
Equity portion of convertible debt (Note 15) | — | 2,453 | — | — | — | 2,453 | ||||||||||||||||
Settlement of warrants (Note 15) | 2,135,221 | — | — | — | — | — | ||||||||||||||||
Net gain from pension and postretirement plans | — | — | — | 61,869 | — | 61,869 | ||||||||||||||||
Acquisition of noncontrolling interest | — | — | — | — | 96,336 | 96,336 | ||||||||||||||||
Noncontrolling interest redemption of shares | — | — | — | — | (713 | ) | (713 | ) | ||||||||||||||
Foreign currency translation adjustment | — | — | — | (1,915 | ) | (3,795 | ) | (5,710 | ) | |||||||||||||
Joint venture cash flow hedges | — | — | — | 3,286 | 343 | 3,629 | ||||||||||||||||
Balance, December 31, 2013 | 126,257,870 | $ | 692,100 | $ | 1,015,209 | $ | (46,139 | ) | $ | 94,073 | $ | 1,755,243 | ||||||||||
Net income (loss) | — | — | 41,426 | — | (83 | ) | 41,343 | |||||||||||||||
Dividends ($0.49 per share) | — | — | (62,011 | ) | — | — | (62,011 | ) | ||||||||||||||
Issuance of shares under incentive stock plans | 235,843 | 2,027 | — | — | — | 2,027 | ||||||||||||||||
Stock-based compensation | — | 3,103 | — | — | — | 3,103 | ||||||||||||||||
Excess tax deficiency on stock-based compensation | — | (1,240 | ) | — | — | — | (1,240 | ) | ||||||||||||||
Repurchase of common shares | (42,208 | ) | (1,754 | ) | — | — | — | (1,754 | ) | |||||||||||||
Amortization of pension and postretirement plans | — | — | — | 2,097 | — | 2,097 | ||||||||||||||||
Noncontrolling interest redemption of shares | — | — | — | — | (679 | ) | (679 | ) | ||||||||||||||
Foreign currency translation adjustment | — | — | — | 12,893 | 4,910 | 17,803 | ||||||||||||||||
Joint venture cash flow hedges | — | — | — | 1,112 | 599 | 1,711 | ||||||||||||||||
Balance, March 31, 2014 | 126,451,505 | $ | 694,236 | $ | 994,624 | $ | (30,037 | ) | $ | 98,820 | $ | 1,757,643 |
9. | SEGMENT AND GEOGRAPHICAL INFORMATION |
March 31, | December 31, | ||||||
2014 | 2013 | ||||||
ASSETS | (Restated) | ||||||
Forest Resources | $ | 2,187,498 | $ | 2,162,913 | |||
Real Estate | 113,376 | 149,001 | |||||
Performance Fibers | 1,095,574 | 1,078,645 | |||||
Other Operations | 35,121 | 37,334 | |||||
Corporate and other | 211,260 | 257,608 | |||||
Total | $ | 3,642,829 | $ | 3,685,501 |
Three Months Ended March 31, | |||||||
SALES | 2014 | 2013 | |||||
Forest Resources (a) | $ | 104,678 | $ | 57,102 | |||
Real Estate | 5,530 | 24,297 | |||||
Performance Fibers | 241,768 | 284,188 | |||||
Other Operations | 37,417 | 28,227 | |||||
Intersegment Eliminations | (2,707 | ) | (95 | ) | |||
Total | $ | 386,686 | $ | 393,719 |
(a) | First quarter 2014 included $38 million in sales from the consolidation of the New Zealand JV. See Note 7 — Joint Venture Investment. |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
OPERATING INCOME | (Restated) | ||||||
Forest Resources | $ | 25,546 | $ | 13,255 | |||
Real Estate | 725 | 16,842 | |||||
Performance Fibers | 48,980 | 91,670 | |||||
Other Operations | 184 | 165 | |||||
Corporate and other (a) | (12,396 | ) | (6,569 | ) | |||
Total | $ | 63,039 | $ | 115,363 |
(a) | First quarter 2014 included $3.3 million of separation costs related to the planned separation of the Performance Fibers business from the Forest Resources and Real Estate businesses. |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
DEPRECIATION, DEPLETION AND AMORTIZATION | (Restated) | ||||||
Forest Resources (a) | 26,887 | $ | 16,444 | ||||
Real Estate | 910 | 4,177 | |||||
Performance Fibers | 20,649 | 15,153 | |||||
Corporate and other | 282 | 218 | |||||
Total | $ | 48,728 | $ | 35,992 |
(a) | 2014 included an increase of approximately $7 million in depletion expenses related to the consolidation of the New Zealand JV. See Note 7 — Joint Venture Investment. |
10. | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES |
Three Months Ended | |||||
Income Statement Location | March 31, 2014 | ||||
Derivatives designated as cash flow hedges: | |||||
Foreign currency exchange contracts | Other comprehensive income (loss) | $ | 1,487 | ||
Foreign currency option contracts | Other comprehensive income (loss) | 725 | |||
Derivatives not designated as hedging instruments: | |||||
Foreign currency exchange contracts | Other operating expense (income) | 25 | |||
Foreign currency option contracts | Other operating expense (income) | 7 | |||
Interest rate swaps | Interest and miscellaneous (expense) income, net | (1,134 | ) | ||
Fuel hedge contracts | Cost of sales | 317 |
Notional Amount (a) | |||||||
March 31, 2014 | December 31, 2013 | ||||||
Derivatives designated as cash flow hedges: | |||||||
Foreign currency exchange contracts | $ | 37,064 | $ | 32,300 | |||
Foreign currency option contracts | 37,500 | 38,000 | |||||
Derivatives not designated as hedging instruments: | |||||||
Foreign currency exchange contracts | $ | — | $ | 1,950 | |||
Foreign currency option contracts | — | 4,000 | |||||
Interest rate swaps | 179,066 | 183,851 | |||||
Fuel hedge contracts | 25 | 38 |
(a) | All notional amounts are stated in thousands of dollars except fuel contracts which are denominated in thousands of barrels. |
Location on Balance Sheet | Fair Value Assets (Liabilities) (a) | ||||||||
March 31, 2014 | December 31, 2013 | ||||||||
Derivatives designated as cash flow hedges: | |||||||||
Foreign currency exchange contracts | Prepaid and other current assets | $ | 2,616 | $ | 915 | ||||
Other current liabilities | (84 | ) | — | ||||||
Foreign currency option contracts | Prepaid and other current assets | 1,333 | 673 | ||||||
Other current liabilities | (90 | ) | (214 | ) | |||||
Derivatives not designated as hedging instruments: | |||||||||
Foreign currency exchange contracts | Prepaid and other current assets | $ | — | $ | 25 | ||||
Foreign currency option contracts | Prepaid and other current assets | — | 8 | ||||||
Interest rate swaps | Other non-current liabilities | (5,145 | ) | (4,659 | ) | ||||
Fuel hedge contracts | Prepaid and other current assets | — | 160 | ||||||
Other current liabilities | (159 | ) | — | ||||||
Total derivative contracts: | |||||||||
Prepaid and other current assets | $ | 3,949 | $ | 1,781 | |||||
Other current liabilities | (333 | ) | (214 | ) | |||||
Other non-current liabilities | (5,145 | ) | (4,659 | ) | |||||
Total derivative liabilities | $ | (5,478 | ) | $ | (4,873 | ) |
(a) | See Note 11 — Fair Value Measurements for further information on the fair value of our derivatives including their classification within the fair value hierarchy. |
11. | FAIR VALUE MEASUREMENTS |
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||||
Asset (liability) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||||||
Level 1 | Level 2 | Level 1 | Level 2 | ||||||||||||||||||||
Cash and cash equivalents | $ | 156,071 | $ | 156,071 | $ | — | $ | 199,644 | $ | 199,644 | $ | — | |||||||||||
Restricted cash (a) | 23,633 | 23,633 | — | 68,944 | 68,944 | — | |||||||||||||||||
Current maturities of long-term debt | (114,319 | ) | — | (122,187 | ) | (112,500 | ) | — | (119,614 | ) | |||||||||||||
Long-term debt | (1,393,887 | ) | — | (1,451,984 | ) | (1,461,724 | ) | — | (1,489,810 | ) | |||||||||||||
Interest rate swaps (b) | (5,145 | ) | — | (5,145 | ) | (4,659 | ) | — | (4,659 | ) | |||||||||||||
Foreign currency exchange contracts (b) | 2,532 | — | 2,532 | 940 | — | 940 | |||||||||||||||||
Foreign currency option contracts (b) | 1,243 | — | 1,243 | 467 | — | 467 | |||||||||||||||||
Fuel contracts (b) | (159 | ) | — | (159 | ) | 160 | — | 160 |
(a) | Restricted cash is recorded in “Other Assets” and represents the proceeds from LKE sales deposited with a third-party intermediary. |
(b) | See Note 10 — Derivative Financial Instruments and Hedging Activities for information regarding the Balance Sheet classification of the Company’s derivative financial instruments. |
12. | GUARANTEES |
Financial Commitments | Maximum Potential Payment | Carrying Amount of Associated Liability | ||||||
Standby letters of credit (a) | $ | 17,355 | $ | 15,000 | ||||
Guarantees (b) | 2,254 | 43 | ||||||
Surety bonds (c) | 5,498 | 1,099 | ||||||
Total financial commitments | $ | 25,107 | $ | 16,142 |
(a) | Approximately $15 million of the standby letters of credit serve as credit support for industrial revenue bonds. The remaining letters of credit support various insurance related agreements, primarily workers’ compensation and pollution liability policy requirements. These letters of credit will expire at various dates during 2014 and will be renewed as required. |
(b) | In conjunction with a timberland sale and note monetization in the first quarter of 2004, the Company issued a make-whole agreement pursuant to which it guaranteed $2.3 million of obligations of a special-purpose entity that was established to complete the monetization. At March 31, 2014, the Company has a de minimus liability to reflect the fair market value of its obligation to perform under the make-whole agreement. |
(c) | Rayonier issues surety bonds primarily to secure timber harvesting obligations in the State of Washington and to provide collateral for the Company’s workers’ compensation self-insurance program in that state. These surety bonds expire at various dates during 2014 and 2015 and are expected to be renewed as required. |
13. | LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS |
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Balance, beginning of period | $ | 76,378 | $ | 81,695 | ||||
Expenditures charged to liabilities | (2,498 | ) | (8,570 | ) | ||||
Increase to liabilities | 22 | 3,253 | ||||||
Balance, end of period | 73,902 | 76,378 | ||||||
Less: Current portion | (6,446 | ) | (6,835 | ) | ||||
Non-current portion | $ | 67,456 | $ | 69,543 |
14. | CONTINGENCIES |
15. | EMPLOYEE BENEFIT PLANS |
Pension | Postretirement | ||||||||||||||
Three Months Ended March 31, | Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Components of Net Periodic Benefit Cost | |||||||||||||||
Service cost | $ | 1,624 | $ | 2,419 | $ | 179 | $ | 249 | |||||||
Interest cost | 4,683 | 4,834 | 206 | 240 | |||||||||||
Expected return on plan assets | (6,658 | ) | (7,424 | ) | — | — | |||||||||
Amortization of prior service cost | 292 | 388 | 4 | 6 | |||||||||||
Amortization of losses | 2,737 | 5,727 | 129 | 218 | |||||||||||
Amortization of negative plan amendment | — | — | (134 | ) | — | ||||||||||
Net periodic benefit cost | $ | 2,678 | $ | 5,944 | $ | 384 | $ | 713 | |||||||
16. | DEBT |
17. | ACCUMULATED OTHER COMPREHENSIVE LOSS |
Foreign currency translation gains | New Zealand joint venture cash flow hedges | Unrecognized components of employee benefit plans | Total | ||||||||||||
Balance as of December 31, 2013 | $ | 36,914 | $ | (342 | ) | $ | (82,711 | ) | $ | (46,139 | ) | ||||
Other comprehensive income before reclassifications | 12,893 | 1,604 | — | 14,497 | |||||||||||
Amounts reclassified from accumulated other comprehensive income | — | (492 | ) | 2,097 | (a) | 1,605 | |||||||||
Net other comprehensive income | 12,893 | 1,112 | 2,097 | 16,102 | |||||||||||
Balance as of March 31, 2014 | $ | 49,807 | $ | 770 | $ | (80,614 | ) | $ | (30,037 | ) |
(a) | This accumulated other comprehensive income component is included in the computation of net periodic pension cost. See Note 15 — Employee Benefit Plans for additional information. |
Details about accumulated other comprehensive income components | Amount reclassified from accumulated other comprehensive income | Affected line item in the income statement | ||||
Realized gain on foreign currency exchange contracts | $ | (872 | ) | Other operating (income) expense, net | ||
Realized gain on foreign currency option contracts | (107 | ) | Other operating (income) expense, net | |||
Noncontrolling interest | 343 | Comprehensive income (loss) attributable to noncontrolling interest | ||||
Income tax expense | 144 | Income tax expense | ||||
Net gain reclassified from accumulated other comprehensive income | $ | (492 | ) |
18. | OTHER OPERATING (EXPENSE) INCOME, NET |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Lease income, primarily from hunting leases | $ | 3,036 | $ | 2,462 | |||
Other non-timber income | 552 | 474 | |||||
Foreign currency loss | (1,490 | ) | (184 | ) | |||
Loss on sale or disposal of property, plant & equipment | (532 | ) | (429 | ) | |||
(Loss) gain on foreign currency exchange contracts | (32 | ) | 1,881 | ||||
Separation costs related to Rayonier Advanced Materials Inc. | (3,318 | ) | (86 | ) | |||
Miscellaneous expense, net | (1,753 | ) | (615 | ) | |||
Total | $ | (3,537 | ) | $ | 3,503 |
19. | CONSOLIDATING FINANCIAL STATEMENTS |
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended March 31, 2014 | |||||||||||||||||||||||
Rayonier Inc. (Parent Guarantor) | ROC (Subsidiary Guarantor) | Rayonier TRS Holdings Inc. (Issuer) | Non- guarantors | Consolidating Adjustments | Total Consolidated | ||||||||||||||||||
(Restated) | (Restated) | (Restated) | (Restated) | (Restated) | |||||||||||||||||||
SALES | $ | — | $ | — | $ | — | $ | 386,686 | $ | — | $ | 386,686 | |||||||||||
Costs and Expenses | |||||||||||||||||||||||
Cost of sales | — | — | — | 304,619 | — | 304,619 | |||||||||||||||||
Selling and general expenses | — | 2,150 | — | 13,341 | — | 15,491 | |||||||||||||||||
Other operating expense, net | — | 2,375 | — | 1,162 | — | 3,537 | |||||||||||||||||
— | 4,525 | — | 319,122 | — | 323,647 | ||||||||||||||||||
OPERATING (LOSS) INCOME | — | (4,525 | ) | — | 67,564 | — | 63,039 | ||||||||||||||||
Interest expense | (3,193 | ) | (243 | ) | (6,690 | ) | (2,843 | ) | — | (12,969 | ) | ||||||||||||
Interest and miscellaneous income (expense), net | 2,698 | 814 | (1,047 | ) | (3,480 | ) | — | (1,015 | ) | ||||||||||||||
Equity in income from subsidiaries | 41,921 | 46,478 | 31,110 | — | (119,509 | ) | — | ||||||||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 41,426 | 42,524 | 23,373 | 61,241 | (119,509 | ) | 49,055 | ||||||||||||||||
Income tax (expense) benefit | — | (603 | ) | 2,824 | (9,933 | ) | — | (7,712 | ) | ||||||||||||||
NET INCOME | 41,426 | 41,921 | 26,197 | 51,308 | (119,509 | ) | 41,343 | ||||||||||||||||
Less: Net loss attributable to noncontrolling interest | — | — | — | (83 | ) | — | (83 | ) | |||||||||||||||
NET INCOME ATTRIBUTABLE TO RAYONIER INC. | 41,426 | 41,921 | 26,197 | 51,391 | (119,509 | ) | 41,426 | ||||||||||||||||
OTHER COMPREHENSIVE INCOME | |||||||||||||||||||||||
Foreign currency translation adjustment | 12,894 | 12,893 | 766 | 17,795 | (26,545 | ) | 17,803 | ||||||||||||||||
New Zealand joint venture cash flow hedges | 1,112 | 1,112 | 1,112 | 1,711 | (3,336 | ) | 1,711 | ||||||||||||||||
Amortization of pension and postretirement plans, net of income tax | 2,097 | 2,097 | 1,620 | 1,620 | (5,337 | ) | 2,097 | ||||||||||||||||
Total other comprehensive income | 16,103 | 16,102 | 3,498 | 21,126 | (35,218 | ) | 21,611 | ||||||||||||||||
COMPREHENSIVE INCOME | 57,529 | 58,023 | 29,695 | 72,434 | (154,727 | ) | 62,954 | ||||||||||||||||
Less: Comprehensive income attributable to noncontrolling interest | — | — | — | 5,425 | — | 5,425 | |||||||||||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC. | $ | 57,529 | $ | 58,023 | $ | 29,695 | $ | 67,009 | $ | (154,727 | ) | $ | 57,529 | ||||||||||
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended March 31, 2013 | |||||||||||||||||||||||
Rayonier Inc. (Parent Guarantor) | ROC (Subsidiary Guarantor) | Rayonier TRS Holdings Inc. (Issuer) | Non- guarantors | Consolidating Adjustments | Total Consolidated | ||||||||||||||||||
SALES | $ | — | $ | — | $ | — | $ | 393,719 | $ | — | $ | 393,719 | |||||||||||
Costs and Expenses | |||||||||||||||||||||||
Cost of sales | — | — | — | 266,018 | — | 266,018 | |||||||||||||||||
Selling and general expenses | — | 2,401 | — | 13,698 | — | 16,099 | |||||||||||||||||
Other operating (income) expense, net | (1,881 | ) | 523 | — | (2,145 | ) | — | (3,503 | ) | ||||||||||||||
(1,881 | ) | 2,924 | — | 277,571 | — | 278,614 | |||||||||||||||||
Equity in income of New Zealand joint venture | — | — | — | 258 | — | 258 | |||||||||||||||||
OPERATING INCOME (LOSS) | 1,881 | (2,924 | ) | — | 116,406 | — | 115,363 | ||||||||||||||||
Interest (expense) income | (3,275 | ) | (252 | ) | (6,618 | ) | 2,428 | — | (7,717 | ) | |||||||||||||
Interest and miscellaneous income (expense), net | 2,419 | 529 | (751 | ) | (2,140 | ) | — | 57 | |||||||||||||||
Equity in income from subsidiaries | 146,710 | 148,765 | 123,469 | — | (418,944 | ) | — | ||||||||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 147,735 | 146,118 | 116,100 | 116,694 | (418,944 | ) | 107,703 | ||||||||||||||||
Income tax benefit (expense) | — | 592 | 2,690 | (7,727 | ) | — | (4,445 | ) | |||||||||||||||
INCOME FROM CONTINUING OPERATIONS | 147,735 | 146,710 | 118,790 | 108,967 | (418,944 | ) | 103,258 | ||||||||||||||||
DISCONTINUED OPERATIONS, NET | |||||||||||||||||||||||
Income from discontinued operations, net of income tax | — | — | — | 44,477 | — | 44,477 | |||||||||||||||||
NET INCOME | 147,735 | 146,710 | 118,790 | 153,444 | (418,944 | ) | 147,735 | ||||||||||||||||
OTHER COMPREHENSIVE INCOME | |||||||||||||||||||||||
Foreign currency translation adjustment | 975 | 975 | 240 | 975 | (2,190 | ) | 975 | ||||||||||||||||
New Zealand joint venture cash flow hedges | 554 | 554 | — | 554 | (1,108 | ) | 554 | ||||||||||||||||
Amortization of pension and postretirement plans, net of income tax | 4,969 | 4,969 | 4,012 | — | (8,981 | ) | 4,969 | ||||||||||||||||
Total other comprehensive income | 6,498 | 6,498 | 4,252 | 1,529 | (12,279 | ) | 6,498 | ||||||||||||||||
COMPREHENSIVE INCOME | $ | 154,233 | $ | 153,208 | $ | 123,042 | $ | 154,973 | $ | (431,223 | ) | $ | 154,233 | ||||||||||
CONDENSED CONSOLIDATING BALANCE SHEETS As of March 31, 2014 | |||||||||||||||||||||||
Rayonier Inc. (Parent Guarantor) | ROC (Subsidiary Guarantor) | Rayonier TRS Holdings Inc. (Issuer) | Non- guarantors | Consolidating Adjustments | Total Consolidated | ||||||||||||||||||
(Restated) | (Restated) | (Restated) | (Restated) | (Restated) | |||||||||||||||||||
ASSETS | |||||||||||||||||||||||
CURRENT ASSETS | |||||||||||||||||||||||
Cash and cash equivalents | $ | 93,840 | $ | 4,494 | $ | (178 | ) | $ | 57,915 | $ | — | $ | 156,071 | ||||||||||
Accounts receivable, less allowance for doubtful accounts | — | 10 | 689 | 110,998 | — | 111,697 | |||||||||||||||||
Inventory | — | — | — | 141,928 | — | 141,928 | |||||||||||||||||
Deferred tax assets | — | — | 646 | 30,934 | — | 31,580 | |||||||||||||||||
Prepaid and other current assets | — | 6,582 | 3 | 47,992 | — | 54,577 | |||||||||||||||||
Total current assets | 93,840 | 11,086 | 1,160 | 389,767 | — | 495,853 | |||||||||||||||||
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION | — | — | — | 2,067,549 | — | 2,067,549 | |||||||||||||||||
NET PROPERTY, PLANT AND EQUIPMENT | — | 2,698 | — | 859,271 | — | 861,969 | |||||||||||||||||
INVESTMENT IN SUBSIDIARIES | 1,675,347 | 1,851,260 | 1,170,755 | — | (4,697,362 | ) | — | ||||||||||||||||
INTERCOMPANY NOTES RECEIVABLE | 216,844 | — | 20,866 | — | (237,710 | ) | — | ||||||||||||||||
OTHER ASSETS | 3,569 | 32,705 | 3,496 | 177,688 | — | 217,458 | |||||||||||||||||
TOTAL ASSETS | $ | 1,989,600 | $ | 1,897,749 | $ | 1,196,277 | $ | 3,494,275 | $ | (4,935,072 | ) | $ | 3,642,829 | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||
CURRENT LIABILITIES | |||||||||||||||||||||||
Accounts payable | $ | — | $ | 1,054 | $ | 2,102 | $ | 83,126 | $ | — | $ | 86,282 | |||||||||||
Current maturities of long-term debt | — | — | 112,500 | 1,819 | — | 114,319 | |||||||||||||||||
Accrued taxes | — | 14 | — | 11,360 | — | 11,374 | |||||||||||||||||
Accrued payroll and benefits | — | 8,038 | — | 11,223 | — | 19,261 | |||||||||||||||||
Accrued interest | 5,777 | 669 | 3,723 | 25,112 | (21,424 | ) | 13,857 | ||||||||||||||||
Accrued customer incentives | — | — | — | 10,082 | — | 10,082 | |||||||||||||||||
Other current liabilities | — | 9,058 | — | 26,812 | — | 35,870 | |||||||||||||||||
Current liabilities for dispositions and discontinued operations | — | — | — | 6,446 | — | 6,446 | |||||||||||||||||
Total current liabilities | 5,777 | 18,833 | 118,325 | 175,980 | (21,424 | ) | 297,491 | ||||||||||||||||
LONG-TERM DEBT | 325,000 | — | 768,228 | 300,659 | — | 1,393,887 | |||||||||||||||||
NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS | — | — | — | 67,456 | — | 67,456 | |||||||||||||||||
PENSION AND OTHER POSTRETIREMENT BENEFITS | — | 91,807 | — | 3,291 | — | 95,098 | |||||||||||||||||
OTHER NON-CURRENT LIABILITIES | — | 13,763 | — | 17,491 | — | 31,254 | |||||||||||||||||
INTERCOMPANY PAYABLE | — | 97,999 | — | 151,938 | (249,937 | ) | — | ||||||||||||||||
TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY | 1,658,823 | 1,675,347 | 309,724 | 2,678,640 | (4,663,711 | ) | 1,658,823 | ||||||||||||||||
Noncontrolling interest | — | — | — | 98,820 | — | 98,820 | |||||||||||||||||
TOTAL SHAREHOLDERS’ EQUITY | 1,658,823 | 1,675,347 | 309,724 | 2,777,460 | (4,663,711 | ) | 1,757,643 | ||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 1,989,600 | $ | 1,897,749 | $ | 1,196,277 | $ | 3,494,275 | $ | (4,935,072 | ) | $ | 3,642,829 |
CONDENSED CONSOLIDATING BALANCE SHEETS As of December 31, 2013 | |||||||||||||||||||||||
Rayonier Inc. (Parent Guarantor) | ROC (Subsidiary Guarantor) | Rayonier TRS Holdings Inc. (Issuer) | Non- guarantors | Consolidating Adjustments | Total Consolidated | ||||||||||||||||||
ASSETS | |||||||||||||||||||||||
CURRENT ASSETS | |||||||||||||||||||||||
Cash and cash equivalents | $ | 130,181 | $ | 304 | $ | 10,719 | $ | 58,440 | $ | — | $ | 199,644 | |||||||||||
Accounts receivable, less allowance for doubtful accounts | — | 10 | 2,300 | 92,646 | — | 94,956 | |||||||||||||||||
Inventory | — | — | — | 138,818 | — | 138,818 | |||||||||||||||||
Deferred tax assets | — | — | 681 | 38,419 | — | 39,100 | |||||||||||||||||
Prepaid and other current assets | — | 2,363 | 6 | 44,207 | — | 46,576 | |||||||||||||||||
Total current assets | 130,181 | 2,677 | 13,706 | 372,530 | — | 519,094 | |||||||||||||||||
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION | — | — | — | 2,049,378 | — | 2,049,378 | |||||||||||||||||
NET PROPERTY, PLANT AND EQUIPMENT | — | 2,612 | — | 858,209 | — | 860,821 | |||||||||||||||||
INVESTMENT IN SUBSIDIARIES | 1,627,315 | 1,837,760 | 1,148,221 | — | (4,613,296 | ) | — | ||||||||||||||||
INTERCOMPANY NOTES RECEIVABLE | 228,032 | — | 20,659 | — | (248,691 | ) | — | ||||||||||||||||
OTHER ASSETS | 3,689 | 32,519 | 3,739 | 216,261 | — | 256,208 | |||||||||||||||||
TOTAL ASSETS | $ | 1,989,217 | $ | 1,875,568 | $ | 1,186,325 | $ | 3,496,378 | $ | (4,861,987 | ) | $ | 3,685,501 | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||
CURRENT LIABILITIES | |||||||||||||||||||||||
Accounts payable | $ | — | $ | 1,522 | $ | 1,564 | $ | 66,207 | $ | — | $ | 69,293 | |||||||||||
Current maturities of long-term debt | — | — | 112,500 | — | — | 112,500 | |||||||||||||||||
Accrued taxes | — | 4,855 | — | 3,696 | — | 8,551 | |||||||||||||||||
Accrued payroll and benefits | — | 11,382 | — | 13,566 | — | 24,948 | |||||||||||||||||
Accrued interest | 3,047 | 538 | 2,742 | 22,816 | (19,612 | ) | 9,531 | ||||||||||||||||
Accrued customer incentives | — | — | — | 9,580 | — | 9,580 | |||||||||||||||||
Other current liabilities | — | 8,765 | — | 26,109 | — | 34,874 | |||||||||||||||||
Current liabilities for dispositions and discontinued operations | — | — | — | 6,835 | — | 6,835 | |||||||||||||||||
Total current liabilities | 3,047 | 27,062 | 116,806 | 148,809 | (19,612 | ) | 276,112 | ||||||||||||||||
LONG-TERM DEBT | 325,000 | — | 847,749 | 288,975 | — | 1,461,724 | |||||||||||||||||
NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS | — | — | — | 69,543 | — | 69,543 | |||||||||||||||||
PENSION AND OTHER POSTRETIREMENT BENEFITS | — | 91,471 | — | 4,183 | — | 95,654 | |||||||||||||||||
OTHER NON-CURRENT LIABILITIES | — | 11,493 | — | 15,732 | — | 27,225 | |||||||||||||||||
INTERCOMPANY PAYABLE | — | 118,227 | — | 125,921 | (244,148 | ) | — | ||||||||||||||||
TOTAL SHAREHOLDERS’ EQUITY | 1,661,170 | 1,627,315 | 221,770 | 2,843,215 | (4,598,227 | ) | 1,755,243 | ||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 1,989,217 | $ | 1,875,568 | $ | 1,186,325 | $ | 3,496,378 | $ | (4,861,987 | ) | $ | 3,685,501 |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 2014 | |||||||||||||||||||||||
Rayonier Inc. (Parent Guarantor) | ROC (Subsidiary Guarantor) | Rayonier TRS Holdings Inc. (Issuer) | Non- guarantors | Consolidating Adjustments | Total Consolidated | ||||||||||||||||||
CASH PROVIDED BY OPERATING ACTIVITIES | $ | 25,931 | $ | 32,794 | $ | — | $ | 67,759 | $ | (27,210 | ) | $ | 99,274 | ||||||||||
INVESTING ACTIVITIES | |||||||||||||||||||||||
Capital expenditures | — | (170 | ) | — | (36,585 | ) | — | (36,755 | ) | ||||||||||||||
Purchase of timberlands | — | — | — | (10,637 | ) | — | (10,637 | ) | |||||||||||||||
Change in restricted cash | — | — | — | 45,312 | — | 45,312 | |||||||||||||||||
Investment in Subsidiaries | — | — | 69,103 | — | (69,103 | ) | — | ||||||||||||||||
Other | — | — | — | 1,592 | — | 1,592 | |||||||||||||||||
CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES | — | (170 | ) | 69,103 | (318 | ) | (69,103 | ) | (488 | ) | |||||||||||||
FINANCING ACTIVITIES | |||||||||||||||||||||||
Issuance of debt | — | — | 30,000 | 1,819 | — | 31,819 | |||||||||||||||||
Repayment of debt | — | — | (110,000 | ) | — | — | (110,000 | ) | |||||||||||||||
Dividends paid | (62,545 | ) | — | — | — | — | (62,545 | ) | |||||||||||||||
Proceeds from the issuance of common shares | 2,027 | — | — | — | — | 2,027 | |||||||||||||||||
Excess tax deficiencies on stock-based compensation | — | — | — | (1,240 | ) | — | (1,240 | ) | |||||||||||||||
Repurchase of common shares | (1,754 | ) | — | — | — | — | (1,754 | ) | |||||||||||||||
Intercompany distributions | — | (28,434 | ) | — | (67,879 | ) | 96,313 | — | |||||||||||||||
Other | — | — | — | (679 | ) | — | (679 | ) | |||||||||||||||
CASH USED FOR FINANCING ACTIVITIES | (62,272 | ) | (28,434 | ) | (80,000 | ) | (67,979 | ) | 96,313 | (142,372 | ) | ||||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | — | — | — | 13 | — | 13 | |||||||||||||||||
CASH AND CASH EQUIVALENTS | |||||||||||||||||||||||
Change in cash and cash equivalents | (36,341 | ) | 4,190 | (10,897 | ) | (525 | ) | — | (43,573 | ) | |||||||||||||
Balance, beginning of year | 130,181 | 304 | 10,719 | 58,440 | — | 199,644 | |||||||||||||||||
Balance, end of period | $ | 93,840 | $ | 4,494 | $ | (178 | ) | $ | 57,915 | $ | — | $ | 156,071 |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 2013 | |||||||||||||||||||||||
Rayonier Inc. (Parent Guarantor) | ROC (Subsidiary Guarantor) | Rayonier TRS Holdings Inc. (Issuer) | Non- guarantors | Consolidating Adjustments | Total Consolidated | ||||||||||||||||||
CASH PROVIDED BY OPERATING ACTIVITIES | $ | 13,984 | $ | 22,259 | $ | — | $ | 58,980 | $ | (5,563 | ) | $ | 89,660 | ||||||||||
INVESTING ACTIVITIES | |||||||||||||||||||||||
Capital expenditures | — | (89 | ) | — | (32,575 | ) | — | (32,664 | ) | ||||||||||||||
Purchase of timberlands | — | — | — | (1,560 | ) | — | (1,560 | ) | |||||||||||||||
Jesup mill cellulose specialties expansion | — | — | — | (36,734 | ) | — | (36,734 | ) | |||||||||||||||
Proceeds from disposition of Wood Products business | — | — | — | 83,741 | — | 83,741 | |||||||||||||||||
Change in restricted cash | — | — | — | 9,908 | — | 9,908 | |||||||||||||||||
Investment in Subsidiaries | — | — | 32,391 | — | (32,391 | ) | — | ||||||||||||||||
Other | — | — | — | 1,790 | — | 1,790 | |||||||||||||||||
CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES | — | (89 | ) | 32,391 | 24,570 | (32,391 | ) | 24,481 | |||||||||||||||
FINANCING ACTIVITIES | |||||||||||||||||||||||
Issuance of debt | 100,000 | — | — | — | — | 100,000 | |||||||||||||||||
Repayment of debt | (150,000 | ) | — | (20,000 | ) | — | — | (170,000 | ) | ||||||||||||||
Dividends paid | (57,744 | ) | — | — | — | — | (57,744 | ) | |||||||||||||||
Proceeds from the issuance of common shares | 4,091 | — | — | — | — | 4,091 | |||||||||||||||||
Excess tax benefits on stock-based compensation | — | — | — | 6,191 | — | 6,191 | |||||||||||||||||
Repurchase of common shares | (11,241 | ) | — | — | — | — | (11,241 | ) | |||||||||||||||
Intercompany distributions | — | (5,206 | ) | — | (32,748 | ) | 37,954 | — | |||||||||||||||
CASH USED FOR FINANCING ACTIVITIES | (114,894 | ) | (5,206 | ) | (20,000 | ) | (26,557 | ) | 37,954 | (128,703 | ) | ||||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | — | — | — | (17 | ) | — | (17 | ) | |||||||||||||||
CASH AND CASH EQUIVALENTS | |||||||||||||||||||||||
Change in cash and cash equivalents | (100,910 | ) | 16,964 | 12,391 | 56,976 | — | (14,579 | ) | |||||||||||||||
Balance, beginning of year | 252,888 | 3,966 | 19,358 | 4,384 | — | 280,596 | |||||||||||||||||
Balance, end of period | $ | 151,978 | $ | 20,930 | $ | 31,749 | $ | 61,360 | $ | — | $ | 266,017 |
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended March 31, 2014 | |||||||||||||||||||
Rayonier Inc. (Parent Issuer) | Subsidiary Guarantors | Non- guarantors | Consolidating Adjustments | Total Consolidated | |||||||||||||||
(Restated) | (Restated) | (Restated) | (Restated) | (Restated) | |||||||||||||||
SALES | $ | — | $ | — | $ | 386,686 | $ | — | $ | 386,686 | |||||||||
Costs and Expenses | |||||||||||||||||||
Cost of sales | — | — | 304,619 | — | 304,619 | ||||||||||||||
Selling and general expenses | — | 2,150 | 13,341 | — | 15,491 | ||||||||||||||
Other operating expense, net | — | 2,375 | 1,162 | — | 3,537 | ||||||||||||||
— | 4,525 | 319,122 | — | 323,647 | |||||||||||||||
OPERATING (LOSS) INCOME | — | (4,525 | ) | 67,564 | — | 63,039 | |||||||||||||
Interest expense | (3,193 | ) | (6,933 | ) | (2,843 | ) | — | (12,969 | ) | ||||||||||
Interest and miscellaneous income (expense), net | 2,698 | (233 | ) | (3,480 | ) | — | (1,015 | ) | |||||||||||
Equity in income from subsidiaries | 41,921 | 51,391 | — | (93,312 | ) | — | |||||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 41,426 | 39,700 | 61,241 | (93,312 | ) | 49,055 | |||||||||||||
Income tax benefit (expense) | — | 2,221 | (9,933 | ) | — | (7,712 | ) | ||||||||||||
NET INCOME | 41,426 | 41,921 | 51,308 | (93,312 | ) | 41,343 | |||||||||||||
Less: Net loss attributable to noncontrolling interest | — | — | (83 | ) | — | (83 | ) | ||||||||||||
NET INCOME ATTRIBUTABLE TO RAYONIER INC. | 41,426 | 41,921 | 51,391 | (93,312 | ) | 41,426 | |||||||||||||
OTHER COMPREHENSIVE INCOME | |||||||||||||||||||
Foreign currency translation adjustment | 12,894 | 12,892 | 17,795 | (25,778 | ) | 17,803 | |||||||||||||
New Zealand joint venture cash flow hedges | 1,112 | 1,112 | 1,711 | (2,224 | ) | 1,711 | |||||||||||||
Amortization of pension and postretirement plans, net of income tax | 2,097 | 2,097 | 1,620 | (3,717 | ) | 2,097 | |||||||||||||
Total other comprehensive income | 16,103 | 16,101 | 21,126 | (31,719 | ) | 21,611 | |||||||||||||
COMPREHENSIVE INCOME | 57,529 | 58,022 | 72,434 | (125,031 | ) | 62,954 | |||||||||||||
Less: Comprehensive income attributable to noncontrolling interest | — | — | 5,425 | — | 5,425 | ||||||||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC. | $ | 57,529 | $ | 58,022 | $ | 67,009 | $ | (125,031 | ) | $ | 57,529 |
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended March 31, 2013 | |||||||||||||||||||
Rayonier Inc. (Parent Issuer) | Subsidiary Guarantors | Non- guarantors | Consolidating Adjustments | Total Consolidated | |||||||||||||||
SALES | $ | — | $ | — | $ | 393,719 | $ | — | $ | 393,719 | |||||||||
Costs and Expenses | |||||||||||||||||||
Cost of sales | — | — | 266,018 | — | 266,018 | ||||||||||||||
Selling and general expenses | — | 2,401 | 13,698 | — | 16,099 | ||||||||||||||
Other operating (income) expense, net | (1,881 | ) | 523 | (2,145 | ) | — | (3,503 | ) | |||||||||||
(1,881 | ) | 2,924 | 277,571 | — | 278,614 | ||||||||||||||
Equity in income of New Zealand joint venture | — | — | 258 | — | 258 | ||||||||||||||
OPERATING INCOME (LOSS) | 1,881 | (2,924 | ) | 116,406 | — | 115,363 | |||||||||||||
Interest (expense) income | (3,275 | ) | (6,870 | ) | 2,428 | — | (7,717 | ) | |||||||||||
Interest and miscellaneous income (expense), net | 2,419 | (222 | ) | (2,140 | ) | — | 57 | ||||||||||||
Equity in income from subsidiaries | 146,710 | 153,444 | — | (300,154 | ) | — | |||||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 147,735 | 143,428 | 116,694 | (300,154 | ) | 107,703 | |||||||||||||
Income tax benefit (expense) | — | 3,282 | (7,727 | ) | — | (4,445 | ) | ||||||||||||
INCOME FROM CONTINUING OPERATIONS | 147,735 | 146,710 | 108,967 | (300,154 | ) | 103,258 | |||||||||||||
DISCONTINUED OPERATIONS, NET | |||||||||||||||||||
Income from discontinued operations, net of income taxes | — | — | 44,477 | — | 44,477 | ||||||||||||||
NET INCOME | 147,735 | 146,710 | 153,444 | (300,154 | ) | 147,735 | |||||||||||||
OTHER COMPREHENSIVE INCOME | |||||||||||||||||||
Foreign currency translation adjustment | 975 | 975 | 975 | (1,950 | ) | 975 | |||||||||||||
New Zealand joint venture cash flow hedges | 554 | 554 | 554 | (1,108 | ) | 554 | |||||||||||||
Amortization of pension and postretirement plans, net of income tax | 4,969 | 4,969 | — | (4,969 | ) | 4,969 | |||||||||||||
Total other comprehensive income | 6,498 | 6,498 | 1,529 | (8,027 | ) | 6,498 | |||||||||||||
COMPREHENSIVE INCOME | $ | 154,233 | $ | 153,208 | $ | 154,973 | $ | (308,181 | ) | $ | 154,233 |
CONDENSED CONSOLIDATING BALANCE SHEETS As of March 31, 2014 | |||||||||||||||||||
Rayonier Inc. (Parent Issuer) | Subsidiary Guarantors | Non- guarantors | Consolidating Adjustments | Total Consolidated | |||||||||||||||
(Restated) | (Restated) | (Restated) | (Restated) | (Restated) | |||||||||||||||
ASSETS | |||||||||||||||||||
CURRENT ASSETS | |||||||||||||||||||
Cash and cash equivalents | $ | 93,840 | $ | 4,316 | $ | 57,915 | $ | — | $ | 156,071 | |||||||||
Accounts receivable, less allowance for doubtful accounts | — | 699 | 110,998 | — | 111,697 | ||||||||||||||
Inventory | — | — | 141,928 | — | 141,928 | ||||||||||||||
Deferred tax asset | — | 646 | 30,934 | — | 31,580 | ||||||||||||||
Prepaid and other current assets | — | 6,585 | 47,992 | — | 54,577 | ||||||||||||||
Total current assets | 93,840 | 12,246 | 389,767 | — | 495,853 | ||||||||||||||
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION | — | — | 2,067,549 | — | 2,067,549 | ||||||||||||||
NET PROPERTY, PLANT AND EQUIPMENT | — | 2,698 | 859,271 | — | 861,969 | ||||||||||||||
INVESTMENT IN SUBSIDIARIES | 1,675,347 | 2,712,291 | — | (4,387,638 | ) | — | |||||||||||||
INTERCOMPANY NOTES RECEIVABLE | 216,844 | 20,866 | — | (237,710 | ) | — | |||||||||||||
OTHER ASSETS | 3,569 | 36,201 | 177,688 | — | 217,458 | ||||||||||||||
TOTAL ASSETS | $ | 1,989,600 | $ | 2,784,302 | $ | 3,494,275 | $ | (4,625,348 | ) | $ | 3,642,829 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||
CURRENT LIABILITIES | |||||||||||||||||||
Accounts payable | $ | — | $ | 3,156 | $ | 83,126 | $ | — | $ | 86,282 | |||||||||
Current maturities of long-term debt | — | 112,500 | 1,819 | — | 114,319 | ||||||||||||||
Accrued taxes | — | 14 | 11,360 | — | 11,374 | ||||||||||||||
Accrued payroll and benefits | — | 8,038 | 11,223 | — | 19,261 | ||||||||||||||
Accrued interest | 5,777 | 4,392 | 25,112 | (21,424 | ) | 13,857 | |||||||||||||
Accrued customer incentives | — | — | 10,082 | — | 10,082 | ||||||||||||||
Other current liabilities | — | 9,058 | 26,812 | — | 35,870 | ||||||||||||||
Current liabilities for dispositions and discontinued operations | — | — | 6,446 | — | 6,446 | ||||||||||||||
Total current liabilities | 5,777 | 137,158 | 175,980 | (21,424 | ) | 297,491 | |||||||||||||
LONG-TERM DEBT | 325,000 | 768,228 | 300,659 | — | 1,393,887 | ||||||||||||||
NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS | — | — | 67,456 | — | 67,456 | ||||||||||||||
PENSION AND OTHER POSTRETIREMENT BENEFITS | — | 91,807 | 3,291 | — | 95,098 | ||||||||||||||
OTHER NON-CURRENT LIABILITIES | — | 13,763 | 17,491 | — | 31,254 | ||||||||||||||
INTERCOMPANY PAYABLE | — | 97,999 | 151,938 | (249,937 | ) | — | |||||||||||||
TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY | 1,658,823 | 1,675,347 | 2,678,640 | (4,353,987 | ) | 1,658,823 | |||||||||||||
Noncontrolling interest | — | — | 98,820 | — | 98,820 | ||||||||||||||
TOTAL SHAREHOLDERS’ EQUITY | 1,658,823 | 1,675,347 | 2,777,460 | (4,353,987 | ) | 1,757,643 | |||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 1,989,600 | $ | 2,784,302 | $ | 3,494,275 | $ | (4,625,348 | ) | $ | 3,642,829 |
CONDENSED CONSOLIDATING BALANCE SHEETS As of December 31, 2013 | |||||||||||||||||||
Rayonier Inc. (Parent Issuer) | Subsidiary Guarantors | Non- guarantors | Consolidating Adjustments | Total Consolidated | |||||||||||||||
ASSETS | |||||||||||||||||||
CURRENT ASSETS | |||||||||||||||||||
Cash and cash equivalents | $ | 130,181 | $ | 11,023 | $ | 58,440 | $ | — | $ | 199,644 | |||||||||
Accounts receivable, less allowance for doubtful accounts | — | 2,310 | 92,646 | — | 94,956 | ||||||||||||||
Inventory | — | — | 138,818 | — | 138,818 | ||||||||||||||
Deferred tax assets | — | 681 | 38,419 | — | 39,100 | ||||||||||||||
Prepaid and other current assets | — | 2,369 | 44,207 | — | 46,576 | ||||||||||||||
Total current assets | 130,181 | 16,383 | 372,530 | — | 519,094 | ||||||||||||||
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION | — | — | 2,049,378 | — | 2,049,378 | ||||||||||||||
NET PROPERTY, PLANT AND EQUIPMENT | — | 2,612 | 858,209 | — | 860,821 | ||||||||||||||
INVESTMENT IN SUBSIDIARIES | 1,627,315 | 2,764,211 | — | (4,391,526 | ) | — | |||||||||||||
INTERCOMPANY NOTES RECEIVABLE | 228,032 | 20,659 | — | (248,691 | ) | — | |||||||||||||
OTHER ASSETS | 3,689 | 36,258 | 216,261 | — | 256,208 | ||||||||||||||
TOTAL ASSETS | $ | 1,989,217 | $ | 2,840,123 | $ | 3,496,378 | $ | (4,640,217 | ) | $ | 3,685,501 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||
CURRENT LIABILITIES | |||||||||||||||||||
Accounts payable | $ | — | $ | 3,086 | $ | 66,207 | $ | — | $ | 69,293 | |||||||||
Current maturities of long-term debt | — | 112,500 | — | — | 112,500 | ||||||||||||||
Accrued taxes | — | 4,855 | 3,696 | — | 8,551 | ||||||||||||||
Accrued payroll and benefits | — | 11,382 | 13,566 | — | 24,948 | ||||||||||||||
Accrued interest | 3,047 | 3,280 | 22,816 | (19,612 | ) | 9,531 | |||||||||||||
Accrued customer incentives | — | — | 9,580 | — | 9,580 | ||||||||||||||
Other current liabilities | — | 8,765 | 26,109 | — | 34,874 | ||||||||||||||
Current liabilities for dispositions and discontinued operations | — | — | 6,835 | — | 6,835 | ||||||||||||||
Total current liabilities | 3,047 | 143,868 | 148,809 | (19,612 | ) | 276,112 | |||||||||||||
LONG-TERM DEBT | 325,000 | 847,749 | 288,975 | — | 1,461,724 | ||||||||||||||
NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS | — | — | 69,543 | — | 69,543 | ||||||||||||||
PENSION AND OTHER POSTRETIREMENT BENEFITS | — | 91,471 | 4,183 | — | 95,654 | ||||||||||||||
OTHER NON-CURRENT LIABILITIES | — | 11,493 | 15,732 | — | 27,225 | ||||||||||||||
INTERCOMPANY PAYABLE | — | 118,227 | 125,921 | (244,148 | ) | — | |||||||||||||
TOTAL SHAREHOLDERS’ EQUITY | 1,661,170 | 1,627,315 | 2,843,215 | (4,376,457 | ) | 1,755,243 | |||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 1,989,217 | $ | 2,840,123 | $ | 3,496,378 | $ | (4,640,217 | ) | $ | 3,685,501 |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 2014 | |||||||||||||||||||
Rayonier Inc. (Parent Issuer) | Subsidiary Guarantors | Non- guarantors | Consolidating Adjustments | Total Consolidated | |||||||||||||||
CASH PROVIDED BY OPERATING ACTIVITIES | $ | 25,931 | $ | 32,794 | $ | 67,759 | $ | (27,210 | ) | $ | 99,274 | ||||||||
INVESTING ACTIVITIES | |||||||||||||||||||
Capital expenditures | — | (170 | ) | (36,585 | ) | — | (36,755 | ) | |||||||||||
Purchase of timberlands | — | — | (10,637 | ) | — | (10,637 | ) | ||||||||||||
Change in restricted cash | — | — | 45,312 | — | 45,312 | ||||||||||||||
Investment in Subsidiaries | — | 69,103 | — | (69,103 | ) | — | |||||||||||||
Other | — | — | 1,592 | — | 1,592 | ||||||||||||||
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES | — | 68,933 | (318 | ) | (69,103 | ) | (488 | ) | |||||||||||
FINANCING ACTIVITIES | |||||||||||||||||||
Issuance of debt | — | 30,000 | 1,819 | — | 31,819 | ||||||||||||||
Repayment of debt | — | (110,000 | ) | — | — | (110,000 | ) | ||||||||||||
Dividends paid | (62,545 | ) | — | — | — | (62,545 | ) | ||||||||||||
Proceeds from the issuance of common shares | 2,027 | — | — | — | 2,027 | ||||||||||||||
Excess tax deficiencies on stock-based compensation | — | — | (1,240 | ) | — | (1,240 | ) | ||||||||||||
Repurchase of common shares | (1,754 | ) | — | — | — | (1,754 | ) | ||||||||||||
Intercompany distributions | — | (28,434 | ) | (67,879 | ) | 96,313 | — | ||||||||||||
Other | — | — | (679 | ) | — | (679 | ) | ||||||||||||
CASH USED FOR FINANCING ACTIVITIES | (62,272 | ) | (108,434 | ) | (67,979 | ) | 96,313 | (142,372 | ) | ||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | — | — | 13 | — | 13 | ||||||||||||||
CASH AND CASH EQUIVALENTS | |||||||||||||||||||
Change in cash and cash equivalents | (36,341 | ) | (6,707 | ) | (525 | ) | — | (43,573 | ) | ||||||||||
Balance, beginning of year | 130,181 | 11,023 | 58,440 | — | 199,644 | ||||||||||||||
Balance, end of period | $ | 93,840 | $ | 4,316 | $ | 57,915 | $ | — | $ | 156,071 |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 2013 | |||||||||||||||||||
Rayonier Inc. (Parent Issuer) | Subsidiary Guarantors | Non- guarantors | Consolidating Adjustments | Total Consolidated | |||||||||||||||
CASH PROVIDED BY OPERATING ACTIVITIES | $ | 13,984 | $ | 22,259 | $ | 58,980 | $ | (5,563 | ) | $ | 89,660 | ||||||||
INVESTING ACTIVITIES | |||||||||||||||||||
Capital expenditures | — | (89 | ) | (32,575 | ) | — | (32,664 | ) | |||||||||||
Purchase of timberlands | — | — | (1,560 | ) | — | (1,560 | ) | ||||||||||||
Jesup mill cellulose specialties expansion | — | — | (36,734 | ) | — | (36,734 | ) | ||||||||||||
Proceeds from disposition of Wood Products business | — | — | 83,741 | — | 83,741 | ||||||||||||||
Change in restricted cash | — | — | 9,908 | — | 9,908 | ||||||||||||||
Investment in Subsidiaries | — | 32,391 | — | (32,391 | ) | — | |||||||||||||
Other | — | — | 1,790 | — | 1,790 | ||||||||||||||
CASH PROVIDED BY INVESTING ACTIVITIES | — | 32,302 | 24,570 | (32,391 | ) | 24,481 | |||||||||||||
FINANCING ACTIVITIES | |||||||||||||||||||
Issuance of debt | 100,000 | — | — | — | 100,000 | ||||||||||||||
Repayment of debt | (150,000 | ) | (20,000 | ) | — | — | (170,000 | ) | |||||||||||
Dividends paid | (57,744 | ) | — | — | — | (57,744 | ) | ||||||||||||
Proceeds from the issuance of common shares | 4,091 | — | — | — | 4,091 | ||||||||||||||
Excess tax benefits on stock-based compensation | — | — | 6,191 | — | 6,191 | ||||||||||||||
Repurchase of common shares | (11,241 | ) | — | — | — | (11,241 | ) | ||||||||||||
Intercompany distributions | — | (5,206 | ) | (32,748 | ) | 37,954 | — | ||||||||||||
CASH USED FOR FINANCING ACTIVITIES | (114,894 | ) | (25,206 | ) | (26,557 | ) | 37,954 | (128,703 | ) | ||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | — | — | (17 | ) | — | (17 | ) | ||||||||||||
CASH AND CASH EQUIVALENTS | |||||||||||||||||||
Change in cash and cash equivalents | (100,910 | ) | 29,355 | 56,976 | — | (14,579 | ) | ||||||||||||
Balance, beginning of year | 252,888 | 23,324 | 4,384 | — | 280,596 | ||||||||||||||
Balance, end of period | $ | 151,978 | $ | 52,679 | $ | 61,360 | $ | — | $ | 266,017 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended March 31, | |||||||
Financial Information (in millions) | 2014 | 2013 | |||||
(Restated) | |||||||
Sales | |||||||
Forest Resources | |||||||
Atlantic | $ | 22 | $ | 17 | |||
Gulf States | 12 | 12 | |||||
Northern | 33 | 25 | |||||
New Zealand | 38 | 3 | |||||
Total Forest Resources | 105 | 57 | |||||
Real Estate | |||||||
Development | — | 1 | |||||
Rural | 5 | 3 | |||||
Non-Strategic Timberlands | 1 | 20 | |||||
Total Real Estate | 6 | 24 | |||||
Performance Fibers | |||||||
Cellulose specialties | 206 | 247 | |||||
Viscose/other | 26 | — | |||||
Absorbent materials | 10 | 37 | |||||
Total Performance Fibers | 242 | 284 | |||||
Other Operations | 34 | 29 | |||||
Total Sales | $ | 387 | $ | 394 | |||
Operating Income (Loss) | |||||||
Forest Resources | $ | 26 | $ | 13 | |||
Real Estate | 1 | 17 | |||||
Performance Fibers | 49 | 92 | |||||
Other Operations | — | — | |||||
Corporate and other | (13 | ) | (7 | ) | |||
Operating Income | 63 | 115 | |||||
Interest Expense, Interest Income and Other | (14 | ) | (8 | ) | |||
Income Tax Expense | (8 | ) | (4 | ) | |||
Income from Continuing Operations | $ | 41 | $ | 103 | |||
Discontinued Operations, Net | — | 45 | |||||
Net Income | $ | 41 | $ | 148 | |||
Less: Net income attributable to noncontrolling interest | — | — | |||||
Net Income Attributable to Rayonier Inc. | $ | 41 | $ | 148 | |||
Diluted Earnings Per Share Attributable to Rayonier Inc. | |||||||
Continuing Operations | $ | 0.32 | $ | 0.79 | |||
Discontinued Operations | — | 0.34 | |||||
Net Income | $ | 0.32 | $ | 1.13 |
Sales (in millions) | 2013 | Changes Attributable to: | 2014 | ||||||||||||
Three Months Ended March 31, | Price | Volume/ Mix/Other | |||||||||||||
Atlantic | $ | 17 | $ | 4 | $ | 1 | $ | 22 | |||||||
Gulf States | 12 | — | — | 12 | |||||||||||
Northern | 25 | 3 | 5 | 33 | |||||||||||
New Zealand (a) | 3 | — | 35 | 38 | |||||||||||
Total Sales | $ | 57 | $ | 7 | $ | 41 | $ | 105 |
(a) | First quarter 2014 included $38 million of sales from the consolidation of the New Zealand joint venture (“New Zealand JV”), whereas first quarter 2013 was accounted for on the equity method. |
Operating Income (in millions) | 2013 | Changes Attributable to: | 2014 | ||||||||||||||||
Three Months Ended March 31, | Price | Volume/ Mix | Cost/Other | ||||||||||||||||
(Restated) | (Restated) | ||||||||||||||||||
Atlantic | $ | 5 | $ | 4 | $ | — | $ | (1 | ) | $ | 8 | ||||||||
Gulf States | 2 | — | — | 1 | 3 | ||||||||||||||
Northern | 5 | 3 | 6 | (2 | ) | 12 | |||||||||||||
New Zealand (a) | 1 | — | — | 2 | 3 | ||||||||||||||
Total Operating Income | $ | 13 | $ | 7 | $ | 6 | $ | — | $ | 26 |
(a) | First quarter 2014 included $2 million of operating income from the consolidation of the New Zealand JV. |
Sales (in millions) | 2013 | Changes Attributable to: | 2014 | ||||||||||||
Three Months Ended March 31, | Price | Volume/Mix | |||||||||||||
Development | $ | 1 | $ | — | $ | (1 | ) | $ | — | ||||||
Rural | 3 | 1 | 1 | 5 | |||||||||||
Non-Strategic Timberlands | 20 | (1 | ) | (18 | ) | 1 | |||||||||
Total Sales | $ | 24 | $ | — | $ | (18 | ) | $ | 6 |
Operating Income (in millions) | 2013 | Changes Attributable to: | 2014 | ||||||||||||
Three Months Ended March 31, | Price | Volume/Mix | |||||||||||||
(Restated) | (Restated) | ||||||||||||||
Total Operating Income | $ | 17 | $ | — | $ | (16 | ) | $ | 1 |
Sales (in millions) | 2013 | Changes Attributable to: | 2014 | ||||||||||||
Three Months Ended March 31, | Price | Volume/ Mix | |||||||||||||
Cellulose specialties | $ | 247 | $ | (6 | ) | $ | (35 | ) | $ | 206 | |||||
Viscose/other | — | — | 26 | 26 | |||||||||||
Absorbent materials | 37 | — | (27 | ) | 10 | ||||||||||
Total Sales | $ | 284 | $ | (6 | ) | $ | (36 | ) | $ | 242 |
Operating Income (in millions) | 2013 | Changes Attributable to: | 2014 | ||||||||||||||||||||
Cellulose Specialties | Cost/Mix/Other | ||||||||||||||||||||||
Three Months Ended March 31, | Price | Volume | Cost/Mix | ||||||||||||||||||||
Total Operating Income | $ | 92 | $ | (6 | ) | $ | (14 | ) | $ | (6 | ) | $ | (17 | ) | $ | 49 |
March 31, | December 31, | ||||||
2014 | 2013 | ||||||
(Restated) | |||||||
Cash and cash equivalents (a) | $ | 156 | $ | 200 | |||
Total debt | 1,508 | 1,574 | |||||
Shareholders’ equity | 1,758 | 1,755 | |||||
Total capitalization (total debt plus equity) | 3,266 | 3,329 | |||||
Debt to capital ratio | 46 | % | 47 | % |
(a) | Cash and cash equivalents consisted primarily of time deposits with original maturities of 90 days or less and money market accounts. |
2014 | 2013 | ||||||
Cash provided by (used for): | |||||||
Operating activities | $ | 99 | $ | 90 | |||
Investing activities | — | 24 | |||||
Financing activities | (142 | ) | (129 | ) |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(Restated) | |||||||
Net Income to EBITDA Reconciliation | |||||||
Net Income | $ | 41 | $ | 148 | |||
Interest, net | 14 | 8 | |||||
Income tax expense, continuing operations | 8 | 4 | |||||
Income tax expense, discontinued operations | — | 22 | |||||
Depreciation, depletion and amortization | 49 | 36 | |||||
Depreciation, depletion and amortization from discontinued operations | — | 1 | |||||
EBITDA | $ | 112 | $ | 219 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
EBITDA by Segment | |||||||
Forest Resources | $ | 53 | $ | 30 | |||
Real Estate | 2 | 21 | |||||
Performance Fibers | 70 | 107 | |||||
Other Operations | — | — | |||||
Corporate and other | (13 | ) | 61 | ||||
EBITDA | $ | 112 | $ | 219 |
Forest Resources | Real Estate | Performance Fibers | Other Operations | Corporate and Other | Total | ||||||||||||||||||
(Restated) | (Restated) | (Restated) | |||||||||||||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||||||||
Operating Income | $ | 26 | $ | 1 | $ | 49 | $ | — | $ | (13 | ) | $ | 63 | ||||||||||
Add: Depreciation, depletion and amortization | 27 | 1 | 21 | — | — | 49 | |||||||||||||||||
EBITDA | $ | 53 | $ | 2 | $ | 70 | $ | — | $ | (13 | ) | $ | 112 | ||||||||||
Three Months Ended March 31, 2013 | |||||||||||||||||||||||
Operating Income | $ | 13 | $ | 17 | $ | 92 | $ | — | $ | (7 | ) | $ | 115 | ||||||||||
Add: Depreciation, depletion and amortization | 17 | 4 | 15 | — | — | 36 | |||||||||||||||||
Add: Income from discontinued operations | — | — | — | — | 67 | 67 | |||||||||||||||||
Add: Depreciation, depletion and amortization from discontinued operations | — | — | — | — | 1 | 1 | |||||||||||||||||
EBITDA | $ | 30 | $ | 21 | $ | 107 | $ | — | $ | 61 | $ | 219 | |||||||||||
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Cash provided by operating activities | $ | 99 | $ | 90 | |||
Capital expenditures (a) | (37 | ) | (33 | ) | |||
Change in committed cash | 5 | 1 | |||||
Excess tax (deficiencies) benefits on stock-based compensation | (1 | ) | 6 | ||||
Other | 6 | 3 | |||||
CAD | 72 | 67 | |||||
Mandatory debt repayments | — | — | |||||
Adjusted CAD | $ | 72 | $ | 67 |
Cash (used for) provided by investing activities | $ | — | $ | 24 | |||
Cash used for financing activities | $ | (142 | ) | $ | (129 | ) |
(a) | Capital expenditures exclude strategic capital. Strategic capital totaled $11 million for timberland acquisitions for the three months ended March 31, 2014. Strategic capital totaled $58 million for the CSE and $2 million for timberland acquisitions for the three months ended March 31, 2013. |
Three Months Ended March 31, | ||||||
2014 | 2013 | |||||
Forest Resources — in thousands of short green tons | ||||||
Atlantic | 836 | 868 | ||||
Gulf States | 438 | 410 | ||||
Northern | 543 | 455 | ||||
New Zealand | 459 | — | ||||
Total | 2,276 | 1,733 | ||||
Real Estate — in acres | ||||||
Development | 27 | 86 | ||||
Rural | 1,733 | 1,175 | ||||
Non-Strategic Timberlands | 362 | 5,575 | ||||
Total | 2,122 | 6,836 | ||||
Performance Fibers — in thousands of metric tons | ||||||
Cellulose specialties | 113 | 132 | ||||
Viscose/other | 34 | — | ||||
Absorbent materials | 16 | 56 | ||||
Total | 163 | 188 |
Item 4. | CONTROLS AND PROCEDURES |
• | enhancing senior finance management supervision and review of the depletion rate estimates and coordination with the Company’s technical and operations personnel as to volumes of merchantable timber included in the calculation of depletion expense, |
• | instituting more formal procedures around the review and approval of changes to the estimate of merchantable timber inventory and its effect on the calculation of depletion expense, and |
• | implementing controls over user access and changes to system data used in the depletion rate estimates. |
31.1 | Chief Executive Officer’s Certification Pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith | |
31.2 | Chief Financial Officer’s Certification Pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith | |
32 | Certification of Periodic Financial Reports Under Section 906 of the Sarbanes-Oxley Act of 2002 | Furnished herewith | |
101 | The following financial information from our Quarterly Report on Form 10-Q/A for the fiscal quarter ended March 31, 2014, formatted in Extensible Business Reporting Language (“XBRL”), includes: (i) the Consolidated Statements of Income and Comprehensive Income for the Three Months Ended March 31, 2014 and 2013; (ii) the Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013; (iii) the Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2014 and 2013; and (iv) the Notes to Consolidated Financial Statements | Filed herewith |
RAYONIER INC. | ||
(Registrant) | ||
By: | /S/ H. EDWIN KIKER | |
H. Edwin Kiker Senior Vice President and Chief Financial Officer (Duly Authorized Officer, Principal Financial Officer and Principal Accounting Officer) |
1. | I have reviewed this quarterly report on Form 10-Q/A of Rayonier Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/S/ DAVID L. NUNES | |
David L. Nunes President and Chief Executive Officer, Rayonier Inc. |
1. | I have reviewed this quarterly report on Form 10-Q/A of Rayonier Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ H. EDWIN KIKER | |
H. Edwin Kiker Senior Vice President and Chief Financial Officer, Rayonier Inc. |
1. | The quarterly report on Form 10-Q/A of Rayonier Inc. (the "Company") for the period ended March 31, 2014 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ DAVID L. NUNES | /s/ H. EDWIN KIKER | |
David L. Nunes | H. Edwin Kiker | |
President and Chief Executive Officer, Rayonier Inc. | Senior Vice President and Chief Financial Officer, Rayonier Inc. |
EMPLOYEE BENEFIT PLANS (Tables)
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2014
|
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Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | The net pension and postretirement benefit costs that have been recorded are shown in the following tables:
|
RESTRICTED DEPOSITS (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2014
|
Dec. 31, 2013
|
|
Restricted Cash and Investments [Abstract] | ||
Maximum Time Period Proceeds From LKE Sale Maintained with Third Party Intermediary | 180 days | |
Restricted Cash and Cash Equivalents | $ 23.6 | $ 68.9 |
EARNINGS PER COMMON SHARE Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details)
|
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2014
|
Mar. 31, 2013
|
|||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Anti-dilutive shares excluded from the computations of diluted earnings per share | 1,794,584 | 2,336,660 | ||||
Stock options, performance and restricted shares [Member]
|
||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Anti-dilutive shares excluded from the computations of diluted earnings per share | 731,046 | 220,701 | ||||
Assumed conversion of exchangable note hedges [Member]
|
||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Anti-dilutive shares excluded from the computations of diluted earnings per share | 1,063,538 | [1] | 2,115,959 | [1] | ||
|
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