Delaware | 1-34474 | 13-3070826 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
One South Wacker Drive Suite 1000 Chicago, Illinois (Address of Principal Executive Offices) | 60606 (Zip Code) |
(312) 696-3101 | |
(Registrant's telephone number, including area code) | |
2511 Garden Road; Building A, Suite 200; Monterey, California; 93940 | |
(Former Name or Former Address, if Changed Since Last Report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit Number | Description | |||
99.1 | Sebree's audited carve-out financial statements as of December 31, 2012, 2011 and 2010 and for the fiscal years ended December 31, 2012 and 2011 | |||
99.2 | Sebree's audited carve-out financial statements as of December 31, 2011, 2010, 2009 and 2008 and for the fiscal years ended December 31, 2011, 2010 and 2009 | |||
99.3 | Sebree's unaudited interim carve-out financial statements as of March 31, 2013 and December 31, 2012 and for the three month periods ended March 31, 2013 and 2012 | |||
99.4 | Pro forma financial statements as of March 31, 2013 and for the three month periods ended March 31, 2013 and year ended December 31, 2012 |
Century Aluminum Company | ||||
Date: | August 15, 2013 | By: | /s/ Jesse E. Gary | |
Jesse E. Gary | ||||
Executive Vice President, General Counsel and Secretary |
Page | ||
Carve-Out Financial Statements | ||
Carve-Out Statements of Operations | ||
Carve-Out Statements of Comprehensive Income (Loss) | ||
Carve-Out Balance Sheets | ||
Carve-Out Statements of Cash Flows | ||
Carve-Out Statements of Changes in Invested Equity | ||
Notes to the Carve-Out Financial Statements | ||
Note 1 | Business and Summary of Significant Accounting Policies | |
Note 2 | Other Expenses (Income) – Net | |
Note 3 | Income Taxes | |
Note 4 | Restricted Cash | |
Note 5 | Inventories | |
Note 6 | Property, Plant and Equipment | |
Note 7 | Accrued Liabilities and Other Payables | |
Note 8 | Asset Retirement Obligations | |
Note 9 | Post Retirement Benefits | |
Note 10 | Financial Risk Management and Financial Instruments | |
Note 11 | Related Party Transactions | |
Note 12 | Commitments and Contingencies | |
Note 13 | Subsequent Events |
Years Ended December 31, | |||||||
(in thousands of US dollars) | Notes | 2012 | 2011 | ||||
Sales and operating revenues | $ | 483,085 | $ | 528,272 | |||
Costs and expenses | |||||||
Cost of sales and operating expenses, excluding impairment charge, depreciation and amortization and accretion expense shown below: | 460,118 | 420,562 | |||||
Impairment charge | 6 | 219,549 | − | ||||
Depreciation and amortization | 6 | 32,929 | 29,423 | ||||
Accretion expense | 8 | 3,582 | 3,520 | ||||
Selling and administrative expenses | |||||||
− third parties | 7,177 | 5,158 | |||||
− related parties | 1, 11 | 5,691 | 8,215 | ||||
Research and development expenses – related parties | 11 | 2,751 | 2,235 | ||||
Other expenses (income) – net | |||||||
– third parties | 2 | 2,323 | 4,124 | ||||
– related parties | 2, 11 | 15 | (29) | ||||
734,135 | 473,208 | ||||||
Income (loss) before income taxes | (251,050) | 55,064 | |||||
Income tax expense (benefit) | 3 | (49,357) | 22,643 | ||||
Net income (loss) | $ | (201,693 | ) | $ | 32,421 |
Years Ended December 31, | |||||||
(in thousands of US dollars) | Notes | 2012 | 2011 | ||||
Net income (loss) | $ | (201,693 | ) | $ | 32,421 | ||
Other comprehensive income (loss): | |||||||
Net actuarial gains (losses) on post retirement benefit plans – net of tax of ($79) and $3,752, respectively | 9 | 123 | (5,892) | ||||
Other comprehensive income (loss) – net of tax | 123 | (5,892) | |||||
Total comprehensive income (loss) | $ | (201,570 | ) | $ | 26,529 |
At December 31, | ||||||||||
(in thousands of US dollars) | Notes | 2012 | 2011 | 2010 | ||||||
ASSETS | ||||||||||
Current assets | ||||||||||
Cash | $ | 161 | $ | 130 | $ | 151 | ||||
Restricted cash | 4, 12 | – | 15,969 | 15,080 | ||||||
Trade receivables – net of allowance for doubtful accounts of nil at 2012 and 2011 and ($139) at 2010 | ||||||||||
– third parties | 3,879 | 1,250 | 713 | |||||||
– related parties | 11 | 23 | − | 101 | ||||||
Inventories | 5 | 80,314 | 80,168 | 66,104 | ||||||
Prepaid expenses and other current assets | 347 | 266 | 552 | |||||||
Deferred income tax assets | 3 | – | 2,070 | 9,933 | ||||||
Total current assets | 84,724 | 99,853 | 92,634 | |||||||
Non-current assets | ||||||||||
Restricted cash | 4, 12 | – | – | 11,037 | ||||||
Property, plant and equipment – net | 6 | 83,261 | 310,479 | 300,597 | ||||||
Other assets | 380 | 238 | 253 | |||||||
Total assets | 168,365 | 410,570 | 404,521 | |||||||
LIABILITIES AND INVESTED EQUITY | ||||||||||
Current liabilities | ||||||||||
Trade payables | ||||||||||
– third parties | 5,485 | 4,803 | 4,316 | |||||||
– related parties | 11 | 6,344 | 11,660 | 6,999 | ||||||
Accrued liabilities and other payables | 7 | 29,260 | 27,462 | 24,830 | ||||||
Deferred supplier incentives | 12 | – | 9,985 | 30,521 | ||||||
Asset retirement obligations | 8 | 2,986 | 2,209 | 1,623 | ||||||
Post retirement benefits | 9 | 523 | 511 | 1,072 | ||||||
Total current liabilities | 44,598 | 56,630 | 69,361 | |||||||
Non-current liabilities | ||||||||||
Deferred supplier incentives | 12 | – | – | 5,184 | ||||||
Asset retirement obligations | 8 | 74,541 | 70,636 | 66,615 | ||||||
Post retirement benefits | 9 | 25,718 | 29,383 | 19,506 | ||||||
Deferred income tax liabilities | 3 | – | 47,083 | 61,466 | ||||||
Total liabilities | 144,857 | 203,732 | 222,132 | |||||||
Commitments and contingencies | 12 | |||||||||
Invested equity | ||||||||||
Owner’s net investment | 39,966 | 223,419 | 193,078 | |||||||
Accumulated other comprehensive loss | (16,458) | (16,581) | (10,689) | |||||||
Total invested equity | 23,508 | 206,838 | 182,389 | |||||||
Total liabilities and invested equity | $ | 168,365 | $ | 410,570 | $ | 404,521 |
Years Ended December 31, | ||||||
(in thousands of US dollars) | 2012 | 2011 | ||||
OPERATING ACTIVITIES | ||||||
Net income (loss) | $ | (201,693 | ) | $ | 32,421 | |
Adjustments to determine net cash provided by (used in) operating activities: | ||||||
Impairment charge | 219,549 | − | ||||
Depreciation and amortization | 32,929 | 29,423 | ||||
Accretion expense | 3,582 | 3,520 | ||||
Amortization of deferred supplier incentives | (9,985) | (29,970) | ||||
General corporate expenses allocated by the Owner | 5,691 | 8,215 | ||||
Net losses on derivative financial instruments allocated by the Owner | 44 | 2,368 | ||||
Settlement of take-or-pay purchase contract allocated by the Owner | 1,583 | − | ||||
Bad debt expense − net | 860 | 689 | ||||
Retirement and write-off of property, plant and equipment | 983 | 3,328 | ||||
Changes in: | ||||||
Trade receivables | ||||||
– third parties | (2,629) | (537) | ||||
– related parties | (23) | 101 | ||||
Inventories | (146) | (14,064) | ||||
Prepaid expenses and other current assets | (81) | 286 | ||||
Trade payables | ||||||
– third parties | (502) | 390 | ||||
– related parties | (5,316) | 4,661 | ||||
Accrued liabilities and other payables | 1,756 | 2,641 | ||||
Net change in deferred income tax assets and liabilities | (45,013) | (6,520) | ||||
Net change in other assets | (142) | 15 | ||||
Net change in post retirement benefits | (3,530) | 3,424 | ||||
Receipt of deferred supplier incentives | − | 4,250 | ||||
Settlement of liabilities related to asset retirement obligations | (1,850) | (1,713) | ||||
Net cash provided by (used in) operating activities | (3,933) | 42,928 | ||||
INVESTING ACTIVITIES | ||||||
Purchases of property, plant and equipment | (22,067) | (39,745) | ||||
Escrow of restricted cash | − | (4,250) | ||||
Release of restricted cash | 15,969 | 14,398 | ||||
Net cash provided by (used in) investing activities | (6,098) | (29,597) | ||||
FINANCING ACTIVITIES | ||||||
Net cash transfers (to) from the Owner | 10,062 | (13,352) | ||||
Net cash provided by (used in) financing activities | 10,062 | (13,352) | ||||
Net increase (decrease) in cash | 31 | (21) | ||||
Cash – beginning of year | 130 | 151 | ||||
Cash – end of year | $ | 161 | $ | 130 | ||
Supplemental disclosure of non-cash investing information: | ||||||
Net changes to property, plant and equipment due to changes in asset retirement obligations | $ | 2,950 | $ | 2,800 |
(in thousands of US dollars) | Owner’s Net Investment | Accumulated Other Comprehensive Loss | Total Invested Equity | ||||||
Balance at December 31, 2010 | $ | 193,078 | $ | (10,689 | ) | $ | 182,389 | ||
Net income (loss) – Year ended December 31, 2011 | 32,421 | 32,421 | |||||||
Other comprehensive income (loss): | |||||||||
Net actuarial gains (losses) on post retirement benefit plans – net of tax of $3,752 | (5,892) | (5,892) | |||||||
Net transfers (to) from the Owner | (2,080) | (2,080) | |||||||
Balance at December 31, 2011 | 223,419 | (16,581) | 206,838 | ||||||
Net income (loss) – Year ended December 31, 2012 | (201,693) | (201,693) | |||||||
Other comprehensive income (loss): | |||||||||
Net actuarial gains (losses) on post retirement benefit plans – net of tax of ($79) | 123 | 123 | |||||||
Net transfers (to) from the Owner | 18,240 | 18,240 | |||||||
Balance at December 31, 2012 | $ | 39,966 | $ | (16,458 | ) | $ | 23,508 |
Years Ended December 31, | ||
2012 | 2011 | |
General corporate expenses allocated by the Owner | 5,691 | 8,215 |
Years Ended December 31, | ||
2012 | 2011 | |
Net losses on derivative financial instruments allocated by the Owner | 44 | 2,368 |
• | the significant risks and rewards of ownership of the product have been transferred to the buyer; |
• | neither continuing managerial involvement to the degree usually associated with ownership, nor effective control over the goods sold, has been retained; |
• | the amount of revenue can be measured reliably; |
• | it is probable that the economic benefits associated with the sale will flow to the sales office; and |
• | the costs incurred or to be incurred in respect of the sale can be measured reliably. |
Years Ended December 31, | |||||||
Notes | 2012 | 2011 | |||||
THIRD PARTIES | |||||||
Bad debt expense –net(A) | $ | 860 | $ | 689 | |||
Retirement and write-off of property, plant and equipment | 6 | 983 | 3,328 | ||||
Other – net | 480 | 107 | |||||
$ | 2,323 | $ | 4,124 | ||||
RELATED PARTIES | |||||||
Other – net | $ | 15 | $ | (29 | ) |
(A) | Represents Sebree’s proportional share of bad debt expense related to the sales office’s trade receivables balances due from third party customers. See Note 1 – Business and Summary of Significant Accounting Policies – Revenue Recognition and Sales Office Operations; and Allowance for Doubtful Accounts and Bad Debt Expense. |
Years Ended December 31, | ||||||
2012 | 2011 | |||||
Effective statutory income tax rate | 38.9% | 38.9% | ||||
Income (loss) before income taxes | $ | (251,050 | ) | $ | 55,064 | |
Income tax expense (benefit) at the effective statutory income tax rate | (97,658 | ) | 21,420 | |||
Differences attributable to: | ||||||
Increase in valuation allowance | 47,536 | — | ||||
Non-deductible expenses (non-taxable income) − net | 50 | (68 | ) | |||
Statutory tax rate differences on items allocated by the Owner | 725 | 1,298 | ||||
Other – net | (10 | ) | (7 | ) | ||
Income tax expense (benefit) | $ | (49,357 | ) | $ | 22,643 |
At December 31, | ||||||
2012 | 2011 | |||||
Current | $ | 549 | $ | 29,590 | ||
Deferred | (49,906) | (6,947) | ||||
Income tax expense (benefit) | $ | (49,357 | ) | $ | 22,643 |
At December 31, | |||||||||
2012 | 2011 | 2010 | |||||||
Deferred income tax assets arising from: | |||||||||
Property, plant and equipment | $ | 4,005 | $ | — | $ | — | |||
Accounting provisions not currently deductible for tax | 3,394 | 1,240 | 2,888 | ||||||
Asset retirement obligations | 29,930 | 28,338 | 26,545 | ||||||
Deferred supplier incentives | — | — | 4,071 | ||||||
Post retirement benefits | 10,207 | 11,629 | 8,005 | ||||||
47,536 | 41,207 | 41,509 | |||||||
Deferred income tax liabilities arising from: | |||||||||
Property, plant and equipment | — | (86,220 | ) | (93,042 | ) | ||||
Less: valuation allowance | 47,536 | — | — | ||||||
Net deferred income tax liabilities | $ | — | $ | (45,013 | ) | $ | (51,533 | ) | |
As shown in the carve-out balance sheets at year end: | |||||||||
Deferred income tax assets – current | $ | — | $ | 2,070 | $ | 9,933 | |||
Deferred income tax liabilities – non-current | — | (47,083 | ) | (61,466 | ) | ||||
Net deferred income tax liabilities | $ | — | $ | (45,013 | ) | $ | (51,533 | ) |
4. | RESTRICTED CASH |
At December 31, | |||||||||
2012 | 2011 | 2010 | |||||||
Raw materials and purchased components | $ | 35,441 | $ | 39,836 | $ | 32,494 | |||
Consumable stores | 13,544 | 13,510 | 12,650 | ||||||
Work in progress | 9,400 | 8,765 | 6,128 | ||||||
Finished goods | 21,929 | 18,057 | 14,832 | ||||||
$ | 80,314 | $ | 80,168 | $ | 66,104 |
At December 31, | |||||||||
2012 | 2011 | 2010 | |||||||
Cost (excluding Construction work in progress): | |||||||||
Land and property rights | $ | 17,164 | $ | 17,175 | $ | 17,175 | |||
Buildings | 129,593 | 128,543 | 122,102 | ||||||
Machinery and equipment | 289,922 | 269,429 | 234,902 | ||||||
436,679 | 415,147 | 374,179 | |||||||
Accumulated depreciation and amortization and impairment | (362,681) | (113,473) | (86,284) | ||||||
73,998 | 301,674 | 287,895 | |||||||
Construction work in progress | 9,263 | 8,805 | 12,702 | ||||||
Property, plant and equipment – net | $ | 83,261 | $ | 310,479 | $ | 300,597 |
At December 31, | |||||||||
2012 | 2011 | 2010 | |||||||
Accrued electric power expense | $ | 13,138 | $ | 12,432 | $ | 11,280 | |||
Accrued payroll and employment benefits | 5,891 | 7,144 | 7,158 | ||||||
Accrued inventory purchases | 4,021 | 4,043 | 2,539 | ||||||
Taxes payable other than income | 3,513 | 743 | 691 | ||||||
Accrued freight expense | 729 | 984 | 959 | ||||||
Accruals for capital expenditures | 365 | 323 | 332 | ||||||
Other | 1,603 | 1,793 | 1,871 | ||||||
$ | 29,260 | $ | 27,462 | $ | 24,830 |
Years Ended December 31, | |||||||||
2012 | 2011 | 2010 | |||||||
Balance at the beginning of the year | $ | 72,845 | $ | 68,238 | $ | — | |||
Liabilities incurred | 1,816 | 1,430 | — | ||||||
Liabilities settled | (1,850 | ) | (1,713 | ) | — | ||||
Accretion expense | 3,582 | 3,520 | — | ||||||
Revisions due to changes in estimated future cash flows | 1,134 | 1,370 | — | ||||||
Balance at the end of the year | $ | 77,527 | $ | 72,845 | $ | 68,238 | |||
As shown in the carve-out balance sheets at year end: | |||||||||
Current | 2,986 | 2,209 | 1,623 | ||||||
Non-current | 74,541 | 70,636 | 66,615 | ||||||
$ | 77,527 | $ | 72,845 | $ | 68,238 |
Amounts | |||
For the Years Ending December 31, | |||
2013 | $ | 3,558 | |
2014 | 3,731 | ||
2015 | 3,995 | ||
2016 | 4,278 | ||
2017 | 4,630 | ||
2018 through 2022, in the aggregate | 27,121 |
Years Ended December 31, | ||||||
2012 | 2011 | |||||
Projected benefit obligation at the beginning of the year | $ | 74,665 | $ | 64,977 | ||
Current service cost | 1,223 | 1,017 | ||||
Interest cost | 3,136 | 3,246 | ||||
Benefits paid | (3,488) | (3,258) | ||||
Experience (gains) losses | 1,003 | (27) | ||||
Changes in actuarial assumptions | 5,957 | 8,710 | ||||
Projected benefit obligation at the end of the year | $ | 82,496 | $ | 74,665 |
Years Ended December 31, | ||||||
2012 | 2011 | |||||
Plan assets at the beginning of the year | $ | 50,475 | $ | 51,198 | ||
Expected return on assets | 2,999 | 3,335 | ||||
Benefits paid | (3,488) | (3,258) | ||||
Employer contributions | 6,401 | 2,494 | ||||
Actuarial gains (losses) | 5,313 | (3,294) | ||||
Plan assets at the end of the year | $ | 61,700 | $ | 50,475 |
At December 31, | |||||||||
2012 | 2011 | 2010 | |||||||
Equities(A) | $ | 33,273 | $ | 27,292 | $ | 31,558 | |||
Corporate bonds | 18,424 | 12,977 | 7,982 | ||||||
Government debt securities | 6,121 | 6,744 | 8,724 | ||||||
Real estate | 3,301 | 2,542 | 1,879 | ||||||
Other | 581 | 920 | 1,055 | ||||||
Plan assets at the end of the year | $ | 61,700 | $ | 50,475 | $ | 51,198 |
Target | At December 31, | |||
Asset category | Allocation Range | 2012 | 2011 | 2010 |
Equities | 43−63% | 53.9% | 54.1% | 61.6% |
Fixed income | 26−44% | 39.8% | 39.1% | 32.6% |
Real estate | 0−10% | 5.4% | 5.0% | 3.7% |
Other | 0−10% | 0.9% | 1.8% | 2.1% |
• | Level 1 fair value measurements represent exchange-traded securities which are valued at quoted prices (unadjusted) in active markets for identical assets that we have the ability to access as of the reporting date. |
• | Level 2 fair value measurements are determined using input prices that are directly observable for the asset or are indirectly observable through corroboration with observable market data. Level 2 fair values are determined using standard valuation methods such as discounted cash flow models. |
• | Level 3 fair value measurements are determined using unobservable inputs, such as pricing models for the asset, due to little or no market activity for the asset. Level 3 fair values are determined on the basis of cash flow models or real estate appraisals. |
At December 31, 2012 | Level 1 | Level 2 | Level 3 | Total | ||||||||
Equities | $ | 30,703 | $ | — | $ | 2,570 | $ | 33,273 | ||||
Fixed income | — | 24,545 | — | 24,545 | ||||||||
Real estate | 306 | — | 2,995 | 3,301 | ||||||||
Other | — | 581 | — | 581 | ||||||||
$ | 31,009 | $ | 25,126 | $ | 5,565 | $ | 61,700 |
At December 31, 2011 | Level 1 | Level 2 | Level 3 | Total | ||||||||
Equities | $ | 25,665 | $ | — | $ | 1,627 | $ | 27,292 | ||||
Fixed income | — | 19,721 | — | 19,721 | ||||||||
Real estate | — | — | 2,542 | 2,542 | ||||||||
Other | — | 920 | — | 920 | ||||||||
$ | 25,665 | $ | 20,641 | $ | 4,169 | $ | 50,475 |
At December 31, 2010 | Level 1 | Level 2 | Level 3 | Total | ||||||||
Equities | $ | 30,821 | $ | — | $ | 737 | $ | 31,558 | ||||
Fixed income | — | 16,706 | — | 16,706 | ||||||||
Real estate | — | — | 1,879 | 1,879 | ||||||||
Other | — | 1,055 | — | 1,055 | ||||||||
$ | 30,821 | $ | 17,761 | $ | 2,616 | $ | 51,198 |
Years Ended December 31, | ||||||
2012 | 2011 | |||||
Balance at the beginning of the year | $ | 4,169 | $ | 2,616 | ||
Purchases/capital calls | 1,811 | 1,307 | ||||
Sales/distributions | (749) | (326) | ||||
Unrealized gains | 334 | 572 | ||||
Balance at the end of the year | $ | 5,565 | $ | 4,169 |
At December 31, | |||||||||
2012 | 2011 | 2010 | |||||||
Projected benefit obligation | $ | 82,496 | $ | 74,665 | $ | 64,977 | |||
Less: Plan assets | 61,700 | 50,475 | 51,198 | ||||||
Included in: Post retirement benefits – non-current | $ | 20,796 | $ | 24,190 | $ | 13,779 |
Years Ended December 31, | ||||||
2012 | 2011 | |||||
Current service cost | $ | 1,223 | $ | 1,017 | ||
Interest cost | 3,136 | 3,246 | ||||
Expected return on assets | (2,999) | (3,335) | ||||
Amortization of actuarial losses | 2,648 | 1,611 | ||||
Net periodic benefit cost | 4,008 | 2,539 |
Amounts | |||
For the Years Ending December 31, | |||
2013 | $ | 520 | |
2014 | 304 | ||
2015 | 323 | ||
2016 | 378 | ||
2017 | 447 | ||
2018 through 2022, in the aggregate | 1,960 |
Years Ended December 31, | ||||||
2012 | 2011 | |||||
Accumulated benefit obligation at the beginning of the year | $ | 5,704 | $ | 6,799 | ||
Current service cost | 165 | 222 | ||||
Interest cost | 229 | 336 | ||||
Benefits paid | (1,521) | (1,072) | ||||
Experience (gains) losses | 611 | (286) | ||||
Changes in actuarial assumptions | 254 | (298) | ||||
Employee contributions | 3 | 3 | ||||
Accumulated benefit obligation at the end of the year | $ | 5,445 | $ | 5,704 |
Years Ended December 31, | ||||||
2012 | 2011 | |||||
Current service cost | $ | 165 | $ | 222 | ||
Interest cost | 229 | 336 | ||||
Amortization of actuarial losses | 66 | 138 | ||||
Net periodic benefit cost | $ | 460 | $ | 696 |
At December 31, | |||||||||
2012 | 2011 | 2010 | |||||||
Included in Post retirement benefits: | |||||||||
– current | $ | 523 | $ | 511 | $ | 1,072 | |||
– non-current | 4,922 | 5,193 | 5,727 | ||||||
$ | 5,445 | $ | 5,704 | $ | 6,799 |
Pension Plan | Other Benefit Plan | ||||||||||||
At December 31, | 2012 | 2011 | 2010 | 2012 | 2011 | 2010 | |||||||
Discount rate | 4.1 | % | 4.3 | % | 5.3 | % | 3.9 | % | 4.2 | % | 5.3 | % | |
Inflation | 2.4 | % | 2.2 | % | 2.3 | % | 2.4 | % | 2.2 | % | 2.3 | % |
Pension Plan | Other Benefit Plan | ||||||||
Years Ended December 31, | 2012 | 2011 | 2012 | 2011 | |||||
Discount rate | 4.3 | % | 5.3 | % | 4.2 | % | 5.3 | % | |
Expected return on plan assets | 5.6 | % | 6.6 | % | N/A | N/A |
Other Benefit Plan | ||
1% Increase | 1% Decrease | |
Sensitivity analysis: | ||
Effect on current service and interest costs | 4 | (4) |
Effect on accumulated benefit obligation | 54 | (57) |
At December 31, | |||||||||
2012 | 2011 | 2010 | |||||||
Net actuarial losses: | |||||||||
Pension Plan | $ | 25,478 | $ | 26,479 | $ | 16,113 | |||
Other Benefit Plan | 1,458 | 659 | 1,381 | ||||||
Net actuarial losses | 26,936 | 27,138 | 17,494 | ||||||
Less: income tax effect | (10,478) | (10,557) | (6,805) | ||||||
Net actuarial losses after tax | $ | 16,458 | $ | 16,581 | $ | 10,689 |
Years Ended December 31, | |||||||
Notes | 2012 | 2011 | |||||
Purchases of inventories(A) | $ | 139,374 | $ | 147,102 | |||
Cost of sales and operating expenses | |||||||
Net losses on derivative financial instruments allocated by the Owner(B) | 1 | 44 | 2,368 | ||||
Settlement of take-or-pay purchase contract allocated by the Owner | 1 | 1,583 | − | ||||
$ | 1,627 | $ | 2,368 | ||||
Selling and administrative expenses | |||||||
General corporate expenses allocated by the Owner | 1 | 5,691 | 8,215 | ||||
Research and development expenses | 1 | 2,751 | 2,235 | ||||
Other expenses (income) – net | |||||||
Other – net | 2 | 15 | (29) |
(A) | Purchases of inventories (raw materials) from the Owner are included in both Cost of sales and operating expenses and Inventories. |
(B) | Consists of both realized and unrealized gains and losses on derivative financial instruments. |
At December 31, | |||||||||
2012 | 2011 | 2010 | |||||||
Trade receivables | $ | 23 | $ | — | $ | 101 | |||
Trade payables(A) | 6,344 | 11,660 | 6,999 |
(A) | Trade payables due to the Owner arise from the purchase of raw materials from the Owner and research and development expenses directly charged by the Owner. |
Years Ended December 31, | ||||||
2012 | 2011 | |||||
Cost of sales and operating expenses (as a reduction of energy costs) | $ | (9,985 | ) | $ | (29,970 | ) |
Years Ended December 31, | ||||||
2012 | 2011 | |||||
Total operating lease expense | $ | 597 | $ | 442 |
For the Year Ending December 31, | Amounts | ||
2013 | $ | 48 | |
2014 | 48 | ||
2015 | 48 | ||
2016 | 23 | ||
2017 | 3 | ||
$ | 170 |
Page | ||
Carve-Out Financial Statements | ||
Carve-Out Statements of Operations | ||
Carve-Out Statements of Comprehensive Income (Loss) | ||
Carve-Out Balance Sheets | ||
Carve-Out Statements of Cash Flows | ||
Carve-Out Statements of Changes in Invested Equity | ||
Notes to the Carve-Out Financial Statements | ||
Note 1 | Business and Summary of Significant Accounting Policies | |
Note 2 | Other Expenses (Income) – Net | |
Note 3 | Income Taxes | |
Note 4 | Restricted Cash | |
Note 5 | Inventories | |
Note 6 | Property, Plant and Equipment | |
Note 7 | Accrued Liabilities and Other Payables | |
Note 8 | Asset Retirement Obligations | |
Note 9 | Post Retirement Benefits | |
Note 10 | Financial Risk Management and Financial Instruments | |
Note 11 | Related Party Transactions | |
Note 12 | Commitments and Contingencies |
Years Ended December 31, | ||||||||||
(in thousands of US dollars) | Notes | 2011 | 2010 | 2009 | ||||||
Sales and operating revenues | ||||||||||
– third parties | $ | 528,272 | $ | 467,057 | $ | 375,078 | ||||
– related parties | 11 | – | – | 175 | ||||||
528,272 | 467,057 | 375,253 | ||||||||
Costs and expenses | ||||||||||
Cost of sales and operating expenses, excluding depreciation and amortization and accretion expense shown below: | 420,562 | 367,745 | 343,377 | |||||||
Depreciation and amortization | 6 | 29,423 | 29,024 | 26,811 | ||||||
Accretion expense | 8 | 3,520 | 3,208 | 3,336 | ||||||
Selling and administrative expenses | ||||||||||
− third parties | 5,158 | 3,141 | 4,150 | |||||||
− related parties | 11 | 8,215 | 7,936 | 7,023 | ||||||
Research and development expenses – related parties | 11 | 2,235 | 2,436 | 2,106 | ||||||
Other expenses (income) – net | ||||||||||
– third parties | 2 | 4,124 | (313) | 1,125 | ||||||
– related parties | 2, 11 | (29) | (44) | − | ||||||
473,208 | 413,133 | 387,928 | ||||||||
Income (loss) before income taxes | 55,064 | 53,924 | (12,675) | |||||||
Income tax expense (benefit) | 3 | 22,643 | 21,631 | (4,789) | ||||||
Net income (loss) | $ | 32,421 | $ | 32,293 | $ | (7,886 | ) |
Years Ended December 31, | ||||||||||
(in thousands of US dollars) | Notes | 2011 | 2010 | 2009 | ||||||
Net income (loss) | $ | 32,421 | $ | 32,293 | $ | (7,886 | ) | |||
Other comprehensive income (loss): | ||||||||||
Actuarial gains (losses) on post retirement benefit plans – net of tax of $3,752, $1,252 and $(1,165), respectively | 9 | (5,892) | (1,968) | 1,832 | ||||||
Other comprehensive income (loss) – net of tax | (5,892) | (1,968) | 1,832 | |||||||
Total comprehensive income (loss) | $ | 26,529 | $ | 30,325 | $ | (6,054 | ) |
At December 31, | |||||||||||||||
(in thousands of US dollars) | Notes | 2011 | 2010 | 2009 | 2008 | ||||||||||
ASSETS | |||||||||||||||
Current assets | |||||||||||||||
Cash and cash equivalents | $ | 130 | $ | 151 | $ | 72 | $ | 116 | |||||||
Restricted cash | 4, 12 | 15,969 | 15,080 | 18,466 | – | ||||||||||
Trade receivables – net of allowance for doubtful accounts of nil at 2011, ($139) at 2010 and 2009, and nil at 2008 | |||||||||||||||
– third parties | 1,250 | 713 | 1,001 | 912 | |||||||||||
– related parties | 11 | − | 101 | 62 | 8 | ||||||||||
Inventories | 5 | 80,168 | 66,104 | 54,431 | 58,014 | ||||||||||
Prepaid expenses and other current assets | 266 | 552 | 688 | 1,277 | |||||||||||
Deferred income tax assets | 3 | 2,070 | 9,933 | 8,051 | 9,087 | ||||||||||
Total current assets | 99,853 | 92,634 | 82,771 | 69,414 | |||||||||||
Non-current assets | |||||||||||||||
Restricted cash | 4, 12 | – | 11,037 | 24,731 | – | ||||||||||
Property, plant and equipment – net | 6 | 310,479 | 300,597 | 322,145 | 332,501 | ||||||||||
Other assets | 238 | 253 | 397 | 416 | |||||||||||
Total assets | $ | 410,570 | $ | 404,521 | $ | 430,044 | $ | 402,331 | |||||||
LIABILITIES AND INVESTED EQUITY | |||||||||||||||
Current liabilities | |||||||||||||||
Trade payables | |||||||||||||||
– third parties | $ | 4,803 | $ | 4,316 | $ | 3,544 | $ | 7,548 | |||||||
– related parties | 11 | 11,660 | 6,999 | 8,766 | 14,302 | ||||||||||
Accrued liabilities and other payables | 7 | 27,462 | 24,830 | 25,726 | 27,013 | ||||||||||
Deferred supplier incentives | 12 | 9,985 | 30,521 | 31,365 | – | ||||||||||
Asset retirement obligations | 8 | 2,209 | 1,623 | 2,409 | 2,087 | ||||||||||
Post retirement benefits | 9 | 511 | 1,072 | 817 | 287 | ||||||||||
Total current liabilities | 56,630 | 69,361 | 72,627 | 51,237 | |||||||||||
Non-current liabilities | |||||||||||||||
Deferred supplier incentives | 12 | – | 5,184 | 35,145 | – | ||||||||||
Asset retirement obligations | 8 | 70,636 | 66,615 | 66,025 | 63,760 | ||||||||||
Post retirement benefits | 9 | 29,383 | 19,506 | 21,203 | 21,257 | ||||||||||
Deferred income tax liabilities | 3 | 47,083 | 61,466 | 59,686 | 70,366 | ||||||||||
Total liabilities | 203,732 | 222,132 | 254,686 | 206,620 | |||||||||||
Commitments and contingencies | 12 | ||||||||||||||
Invested equity | |||||||||||||||
Owner’s net investment | 223,419 | 193,078 | 184,079 | 206,264 | |||||||||||
Accumulated other comprehensive income (loss) | (16,581) | (10,689) | (8,721) | (10,553) | |||||||||||
Total invested equity | 206,838 | 182,389 | 175,358 | 195,711 | |||||||||||
Total liabilities and invested equity | $ | 410,570 | $ | 404,521 | $ | 430,044 | $ | 402,331 |
Years Ended December 31, | |||||||||
(in thousands of US dollars) | 2011 | 2010 | 2009 | ||||||
OPERATING ACTIVITIES | |||||||||
Net income (loss) | $ | 32,421 | $ | 32,293 | $ | (7,886 | ) | ||
Adjustments to determine net cash provided by (used in) operating activities: | |||||||||
Depreciation and amortization | 29,423 | 29,024 | 26,811 | ||||||
Accretion expense | 3,520 | 3,208 | 3,336 | ||||||
Amortization of deferred supplier incentives | (29,970) | (30,805) | (14,229) | ||||||
General corporate expenses allocated by the Owner | 8,215 | 7,936 | 7,023 | ||||||
Net (gains) losses on derivative financial instruments allocated by the Owner | 2,368 | (3,696) | 76 | ||||||
Bad debt expense (recoveries) − net | 689 | (816) | 812 | ||||||
Retirement and write-off of property, plant and equipment | 3,328 | 1,107 | 772 | ||||||
Changes in: | |||||||||
Trade receivables | |||||||||
– third parties | (1,226) | 1,104 | (901) | ||||||
– related parties | 101 | (39) | (54) | ||||||
Inventories | (14,064) | (11,673) | 3,583 | ||||||
Prepaid expenses and other current assets | 286 | 136 | 589 | ||||||
Trade payables | |||||||||
– third parties | 487 | 772 | (4,004) | ||||||
– related parties | 4,661 | (1,767) | (5,536) | ||||||
Accrued liabilities and other payables | 2,544 | 228 | 1,167 | ||||||
Net change in deferred income tax assets and liabilities | (6,520) | (102) | (9,644) | ||||||
Net change in other assets | 15 | 144 | 19 | ||||||
Net change in post retirement benefits | 3,424 | (3,410) | 2,308 | ||||||
Receipt of deferred supplier incentives | 4,250 | – | 80,739 | ||||||
Settlement of liabilities related to asset retirement obligations | (1,713) | (2,297) | (1,726) | ||||||
Net cash provided by (used in) operating activities | 42,239 | 21,347 | 83,255 | ||||||
INVESTING ACTIVITIES | |||||||||
Purchases of property, plant and equipment | (39,745) | (10,814) | (18,704) | ||||||
Escrow of restricted cash | (4,250) | − | (46,772) | ||||||
Release of restricted cash | 14,398 | 17,080 | 3,575 | ||||||
Net cash provided by (used in) investing activities | (29,597) | 6,266 | (61,901) | ||||||
FINANCING ACTIVITIES | |||||||||
Net cash transfers (to) from the Owner | (12,663) | (27,534) | (21,398) | ||||||
Net cash provided by (used in) financing activities | (12,663) | (27,533) | (21,398) | ||||||
Net increase (decrease) in cash and cash equivalents | (21) | 79 | (44) | ||||||
Cash and cash equivalents – beginning of year | 151 | 72 | 116 | ||||||
Cash and cash equivalents – end of year | $ | 130 | $ | 151 | $ | 72 | |||
Supplemental disclosure of non-cash investing information: | |||||||||
Net changes to property, plant and equipment due to changes in asset retirement obligations | $ | 2,800 | $ | (1,107 | ) | $ | 977 |
(in thousands of US dollars) | Owner’s Net Investment | Accumulated Other Comprehensive Income (Loss) | Total Invested Equity | ||||||
Balance at December 31, 2008 | $ | 206,264 | $ | (10,553 | ) | $ | 195,711 | ||
Net income (loss) – Year ended December 31, 2009 | (7,886) | (7,886) | |||||||
Other comprehensive income (loss): | |||||||||
Actuarial gains (losses) on post retirement benefit plans – net of tax of $(1,165) | 1,832 | 1,832 | |||||||
Net transfers (to) from the Owner | (14,299) | (14,299) | |||||||
Balance at December 31, 2009 | 184,079 | (8,721) | 175,358 | ||||||
Net income (loss) – Year ended December 31, 2010 | 32,293 | 32,293 | |||||||
Other comprehensive income (loss): | |||||||||
Actuarial gains (losses) on post retirement benefit plans – net of tax of $1,252 | (1,968) | (1,968) | |||||||
Net transfers (to) from the Owner | (23,294) | (23,294) | |||||||
Balance at December 31, 2010 | 193,078 | (10,689) | 182,389 | ||||||
Net income (loss) – Year ended December 31, 2011 | 32,421 | 32,421 | |||||||
Other comprehensive income (loss): | |||||||||
Actuarial gains (losses) on post retirement benefit plans – net of tax of $3,752 | (5,892) | (5,892) | |||||||
Net transfers (to) from the Owner | (2,080) | (2,080) | |||||||
Balance at December 31, 2011 | $ | 223,419 | $ | (16,581 | ) | $ | 206,838 |
Years Ended December 31, | |||||||||
2011 | 2010 | 2009 | |||||||
General corporate expenses allocated by the Owner | $ | 8,215 | $ | 7,936 | $ | 7,023 |
Years Ended December 31, | |||||||||
2011 | 2010 | 2009 | |||||||
Net (gains) losses on derivative financial instruments allocated by the Owner | $ | 2,368 | $ | (3,696 | ) | $ | 76 |
• | the significant risks and rewards of ownership of the product have been transferred to the buyer; |
• | neither continuing managerial involvement to the degree usually associated with ownership, nor effective control over the goods sold, has been retained; |
• | the amount of revenue can be measured reliably; |
• | it is probable that the economic benefits associated with the sale will flow to the sales office; and |
• | the costs incurred or to be incurred in respect of the sale can be measured reliably. |
Years Ended December 31, | ||||||||||
Notes | 2011 | 2010 | 2009 | |||||||
THIRD PARTIES | ||||||||||
Write-off of property, plant and equipment | 6 | $ | 3,328 | $ | 1,107 | $ | 772 | |||
Bad debt expense (recoveries)(A) | 689 | (816) | 812 | |||||||
Other – net | 107 | (604) | (459) | |||||||
$ | 4,124 | $ | (313 | ) | $ | 1,125 | ||||
RELATED PARTIES | ||||||||||
Other – net | $ | (29 | ) | $ | (44 | ) | $ | — |
(A) | Primarily Sebree’s proportional share of bad debt expense (recoveries) from the sales office. See Note 1 – Business and Summary of Significant Accounting Policies – Revenue Recognition and Sales Office Operations. |
Years Ended December 31, | |||||||||
2011 | 2010 | 2009 | |||||||
Effective statutory income tax rate | 38.9% | 38.9% | 38.9% | ||||||
Income (loss) before income taxes | $ | 55,064 | $ | 53,924 | $ | (12,675 | ) | ||
Income tax expense (benefit) at the effective statutory income tax rate | 21,420 | 20,976 | (4,930) | ||||||
Differences attributable to: | |||||||||
Non-deductible expenses (non-taxable income) − net | (68) | 39 | 26 | ||||||
Statutory tax rate differences on: | |||||||||
General corporate expenses allocated by the Owner | 883 | 989 | 774 | ||||||
Net (gains) losses on derivative financial instruments allocated by the Owner | 415 | (367) | (652) | ||||||
Other – net | (7) | (6) | (7) | ||||||
Income tax expense (benefit) | $ | 22,643 | $ | 21,631 | $ | (4,789 | ) |
Years Ended December 31, | |||||||||
2011 | 2010 | 2009 | |||||||
Current | $ | 29,590 | $ | 24,640 | $ | 3,935 | |||
Deferred | (6,947) | (3,009) | (8,724) | ||||||
Income tax expense (benefit) | $ | 22,643 | $ | 21,631 | $ | (4,789 | ) |
At December 31, | |||||||||||||||
2011 | 2010 | 2009 | 2008 | ||||||||||||
Assets | |||||||||||||||
Accounting provisions not currently deductible for tax | $ | 1,240 | $ | 2,888 | $ | 2,449 | $ | 8,707 | |||||||
Asset retirement obligations | 28,338 | 26,545 | 26,622 | 25,614 | |||||||||||
Deferred supplier incentives | − | 4,071 | 9,476 | – | |||||||||||
Post retirement benefits | 11,629 | 8,005 | 8,566 | 8,381 | |||||||||||
$ | 41,207 | $ | 41,509 | $ | 47,113 | $ | 42,702 | ||||||||
Liabilities | |||||||||||||||
Property, plant and equipment | $ | (86,220 | ) | $ | (93,042 | ) | $ | (98,642 | ) | $ | (103,437 | ) | |||
Other | − | – | (106) | (544) | |||||||||||
(86,220) | (93,042) | (98,748) | (103,981) | ||||||||||||
Net deferred income tax liabilities | $ | (45,013 | ) | $ | (51,533 | ) | $ | (51,635 | ) | $ | (61,279 | ) | |||
As shown in the carve-out balance sheets at year end: | |||||||||||||||
Deferred income tax assets – current | $ | 2,070 | $ | 9,933 | $ | 8,051 | $ | 9,087 | |||||||
Deferred income tax liabilities – non-current | (47,083) | (61,466) | (59,686) | (70,366) | |||||||||||
Net deferred income tax liabilities | $ | (45,013 | ) | $ | (51,533 | ) | $ | (51,635 | ) | $ | (61,279 | ) |
4. | RESTRICTED CASH |
At December 31, | ||||||||||||
2011 | 2010 | 2009 | 2008 | |||||||||
Raw materials and purchased components | $ | 39,836 | $ | 32,494 | $ | 26,333 | $ | 27,791 | ||||
Consumable stores | 13,510 | 12,650 | 13,109 | 15,185 | ||||||||
Work in progress | 8,765 | 6,128 | 5,989 | 7,395 | ||||||||
Finished goods | 18,057 | 14,832 | 9,000 | 7,643 | ||||||||
$ | 80,168 | $ | 66,104 | $ | 54,431 | $ | 58,014 |
At December 31, | ||||||||||||
2011 | 2010 | 2009 | 2008 | |||||||||
Cost (excluding Construction work in progress): | ||||||||||||
Land and property rights | $ | 17,175 | $ | 17,175 | $ | 17,152 | $ | 17,152 | ||||
Buildings | 128,543 | 122,102 | 120,449 | 119,750 | ||||||||
Machinery and equipment | 269,429 | 234,902 | 216,586 | 205,350 | ||||||||
415,147 | 374,179 | 354,187 | 342,252 | |||||||||
Accumulated depreciation and amortization | (113,473) | (86,284) | (57,920) | (31,373) | ||||||||
301,674 | 287,895 | 296,267 | 310,879 | |||||||||
Construction work in progress | 8,805 | 12,702 | 25,878 | 21,622 | ||||||||
Property, plant and equipment – net | $ | 310,479 | $ | 300,597 | $ | 322,145 | $ | 332,501 |
At December 31, | ||||||||||||
2011 | 2010 | 2009 | 2008 | |||||||||
Accrued electric power expense | $ | 12,432 | $ | 11,280 | $ | 11,300 | $ | 9,020 | ||||
Accrued payroll and employment benefits | 7,144 | 7,158 | 6,330 | 9,171 | ||||||||
Accrued inventory purchases | 4,043 | 2,539 | 2,781 | 3,818 | ||||||||
Accrued freight expense | 984 | 959 | 960 | 809 | ||||||||
Taxes payable other than income | 743 | 691 | 609 | 827 | ||||||||
Accruals for capital expenditures | 323 | 332 | 1,305 | 1,798 | ||||||||
Other | 1,793 | 1,871 | 2,441 | 1,570 | ||||||||
$ | 27,462 | $ | 24,830 | $ | 25,726 | $ | 27,013 |
Years Ended December 31, | ||||||||||||
2011 | 2010 | 2009 | 2008 | |||||||||
Balance at the beginning of the year | $ | 68,238 | $ | 68,434 | $ | 65,847 | ||||||
Liabilities incurred | 1,430 | 1,634 | 1,616 | |||||||||
Liabilities settled | (1,713) | (2,297) | (1,726) | |||||||||
Accretion expense | 3,520 | 3,208 | 3,336 | |||||||||
Revisions due to changes in estimated future cash flows | 1,370 | (2,741) | (639) | |||||||||
Balance at the end of the year | $ | 72,845 | $ | 68,238 | $ | 68,434 | $ | 65,847 | ||||
As shown in the carve-out balance sheets at year end: | ||||||||||||
Current | 2,209 | 1,623 | 2,409 | 2,087 | ||||||||
Non-current | 70,636 | 66,615 | 66,025 | 63,760 | ||||||||
$ | 72,845 | $ | 68,238 | $ | 68,434 | $ | 65,847 |
Amounts | |||||
For the Years Ending December 31, | |||||
2012 | $ | 3,193 | |||
2013 | 3,332 | ||||
2014 | 3,539 | ||||
2015 | 3,781 | ||||
2016 | 4,067 | ||||
2017 through 2021, in the aggregate | 24,716 |
Years Ended December 31, | |||||||||
2011 | 2010 | 2009 | |||||||
Projected benefit obligation at the beginning of the year | $ | 64,977 | $ | 56,761 | $ | 52,416 | |||
Current service cost | 1,017 | 981 | 896 | ||||||
Interest cost | 3,246 | 3,258 | 3,193 | ||||||
Benefits paid | (3,258) | (2,866) | (2,340) | ||||||
Curtailment and settlement gains (losses)(A) | – | – | 449 | ||||||
Experience (gains) losses | (27) | 579 | (1,663) | ||||||
Changes in actuarial assumptions | 8,710 | 6,264 | 3,810 | ||||||
Projected benefit obligation at the end of the year | $ | 74,665 | $ | 64,977 | $ | 56,761 |
(A) | As a result of poor market conditions, management was required to engage in cost saving initiatives that resulted in the termination of 87 employees during 2009. The reduction in headcount resulted in total curtailment losses of $600 (Pension Plan: $449 and Other Benefit Plan: $151). |
Years Ended December 31, | |||||||||
2011 | 2010 | 2009 | |||||||
Plan assets at the beginning of the year | $ | 51,198 | $ | 41,940 | $ | 35,548 | |||
Expected return on assets | 3,335 | 2,861 | 2,140 | ||||||
Benefits paid | (3,258) | (2,866) | (2,340) | ||||||
Employer contributions | 2,494 | 7,182 | 1,301 | ||||||
Actuarial gains (losses) | (3,294) | 2,081 | 5,291 | ||||||
Plan assets at the end of the year | $ | 50,475 | $ | 51,198 | $ | 41,940 |
At December 31, | ||||||||||||
2011 | 2010 | 2009 | 2008 | |||||||||
Equities(A) | $ | 27,292 | $ | 31,558 | $ | 24,199 | $ | 19,480 | ||||
Corporate bonds | 12,977 | 7,982 | 8,346 | 6,647 | ||||||||
Government debt securities | 6,744 | 8,724 | 6,082 | 7,536 | ||||||||
Real estate | 2,542 | 1,879 | 1,468 | 1,244 | ||||||||
Other | 920 | 1,055 | 1,845 | 641 | ||||||||
Plan assets at the end of the year | $ | 50,475 | $ | 51,198 | $ | 41,940 | $ | 35,548 |
At December 31, | |||||
Asset categories | Range | 2011 | 2010 | 2009 | 2008 |
Equities | 43−63% | 54.1% | 61.6% | 57.7% | 54.8% |
Fixed income | 26−44% | 39.1% | 32.6% | 34.4% | 39.9% |
Real estate | 0−10% | 5.0% | 3.7% | 3.5% | 3.5% |
Other | 0−10% | 1.8% | 2.1% | 4.4% | 1.8% |
• | Level 1 fair value measurements represent exchange-traded securities which are valued at quoted prices (unadjusted) in active markets for identical assets that we have the ability to access as of the reporting date. |
• | Level 2 fair value measurements are determined using input prices that are directly observable for the asset or liability or are indirectly observable through corroboration with observable market data. Level 2 fair values are determined using standard valuation methods such as discounted cash flow models. |
• | Level 3 fair value measurements are determined using unobservable inputs, such as pricing models for the asset or liability, due to little or no market activity for the asset or liability. Level 3 fair values are determined on the basis of cash flow models or real estate appraisals. |
At December 31, 2011 | Level 1 | Level 2 | Level 3 | Total | ||||||||
Equities | $ | 25,665 | $ | — | $ | 1,627 | $ | 27,292 | ||||
Fixed income | − | 19,721 | − | 19,721 | ||||||||
Real estate | − | − | 2,542 | 2,542 | ||||||||
Other | − | 920 | − | 920 | ||||||||
$ | 25,665 | $ | 20,641 | $ | 4,169 | $ | 50,475 |
At December 31, 2010 | Level 1 | Level 2 | Level 3 | Total | ||||||||
Equities | $ | 30,821 | $ | — | $ | 737 | $ | 31,558 | ||||
Fixed income | − | 16,706 | − | 16,706 | ||||||||
Real estate | − | − | 1,879 | 1,879 | ||||||||
Other | − | 1,055 | − | 1,055 | ||||||||
30,821 | 17,761 | 2,616 | 51,198 |
At December 31, 2009 | Level 1 | Level 2 | Level 3 | Total | ||||||||
Equities | $ | 23,458 | $ | — | $ | 741 | $ | 24,199 | ||||
Fixed income | − | 14,428 | − | 14,428 | ||||||||
Real estate | − | − | 1,468 | 1,468 | ||||||||
Other | − | 1,845 | − | 1,845 | ||||||||
$ | 23,458 | $ | 16,273 | $ | 2,209 | $ | 41,940 |
Years Ended December 31, | |||||||||
2011 | 2010 | 2009 | |||||||
Balance at the beginning of the year | $ | 2,616 | $ | 2,209 | $ | 1,808 | |||
Purchases/capital calls | 1,307 | 589 | 977 | ||||||
Sales/distributions | (326) | (404) | (34) | ||||||
Unrealized gains (losses) | 572 | 222 | (542) | ||||||
Balance at the end of the year | $ | 4,169 | $ | 2,616 | $ | 2,209 |
At December 31, | ||||||||||||
2011 | 2010 | 2009 | 2008 | |||||||||
Projected benefit obligation | $ | 74,665 | $ | 64,977 | $ | 56,761 | $ | 52,416 | ||||
Less: Plan assets | 50,475 | 51,198 | 41,940 | 35,548 | ||||||||
Included in: Post retirement benefits – non-current | $ | 24,190 | $ | 13,779 | $ | 14,821 | $ | 16,868 |
Years Ended December 31, | |||||||||
2011 | 2010 | 2009 | |||||||
Current service cost | $ | 1,017 | $ | 981 | $ | 896 | |||
Interest cost | 3,246 | 3,258 | 3,193 | ||||||
Expected return on assets | (3,335) | (2,861) | (2,140) | ||||||
Curtailment and settlement charges | – | – | 449 | ||||||
Amortization of actuarial losses | 1,611 | 1,261 | 1,751 | ||||||
Net periodic benefit cost | $ | 2,539 | $ | 2,639 | $ | 4,149 |
Amounts | |||||
For the Years Ending December 31, | |||||
2012 | $ | 511 | |||
2013 | 362 | ||||
2014 | 436 | ||||
2015 | 549 | ||||
2016 | 653 | ||||
2017 through 2021, in the aggregate | 3,270 |
Years Ended December 31, | |||||||||
2011 | 2010 | 2009 | |||||||
Accumulated benefit obligation at the beginning of the year | $ | 6,799 | $ | 7,199 | $ | 4,676 | |||
Current service cost | 222 | 179 | 190 | ||||||
Interest cost | 336 | 353 | 411 | ||||||
Benefits paid | (1,072) | (817) | (287) | ||||||
Experience (gains) losses | (286) | (934) | 1,603 | ||||||
Changes in actuarial assumptions | (298) | 819 | 271 | ||||||
Employee contributions | 3 | – | 25 | ||||||
Prior service costs | – | – | 159 | ||||||
Curtailment and settlement charges | – | – | 151 | ||||||
Accumulated benefit obligation at the end of the year | $ | 5,704 | $ | 6,799 | $ | 7,199 |
Years Ended December 31, | |||||||||
2011 | 2010 | 2009 | |||||||
Current service cost | $ | 222 | $ | 179 | $ | 190 | |||
Interest cost | 336 | 353 | 411 | ||||||
Curtailment and settlement charges(A) | – | – | 151 | ||||||
Amortization: | |||||||||
Actuarial (gains) losses | 138 | 166 | (24) | ||||||
Prior service costs | – | – | 159 | ||||||
Net periodic benefit cost | $ | 696 | $ | 698 | $ | 887 |
(A) | As described above, as a result of poor market conditions, management was required to engage in cost saving initiatives that resulted in the termination of 87 employees during 2009. The reduction in headcount resulted in total curtailment losses of $600 (Pension Plan: $449 and Other Benefit Plan: $151). |
At December 31, | |||||||||||||
2011 | 2010 | 2009 | 2008 | ||||||||||
Included in Post retirement benefits: | |||||||||||||
– current | $ | 511 | $ | 1,072 | $ | 817 | $ | 287 | |||||
– non-current | 5,193 | 5,727 | 6,382 | 4,389 | |||||||||
$ | 5,704 | $ | 6,799 | $ | 7,199 | $ | 4,676 |
Pension Plan | Other Benefit Plan | |||||||||||||||
At December 31, | 2011 | 2010 | 2009 | 2008 | 2011 | 2010 | 2009 | 2008 | ||||||||
Discount rate | 4.3 | % | 5.3 | % | 6.0 | % | 6.1 | % | 4.2 | % | 5.3 | % | 5.8 | % | 6.1 | % |
Inflation | 2.2 | % | 2.3 | % | 2.5 | % | 1.5 | % | 2.2 | % | 2.3 | % | 2.5 | % | 1.5 | % |
Pension Plan | Other Benefit Plan | |||||||||||
Years Ended December 31, | 2011 | 2010 | 2009 | 2011 | 2010 | 2009 | ||||||
Discount rate | 5.3 | % | 6.0 | % | 6.1 | % | 5.3 | % | 5.8 | % | 6.1 | % |
Expected return on plan assets | 6.6 | % | 6.9 | % | 5.9 | % | N/A | N/A | N/A |
Other Benefit Plan | ||||||
1% Increase | 1% Decrease | |||||
Sensitivity analysis | ||||||
Effect on current service and interest costs | $ | 10 | $ | (10 | ) | |
Effect on accumulated benefit obligation | 106 | (109) |
At December 31, | |||||||||||||
2011 | 2010 | 2009 | 2008 | ||||||||||
Net actuarial losses (gains): | |||||||||||||
Pension Plan | $ | 26,479 | $ | 16,113 | $ | 12,612 | $ | 17,507 | |||||
Other Benefit Plan | 659 | 1,381 | 1,662 | (236) | |||||||||
Net actuarial losses | 27,138 | 17,494 | 14,274 | 17,271 | |||||||||
Less: income tax effect | (10,557) | (6,805) | (5,553) | (6,718) | |||||||||
Net actuarial losses after tax | $ | 16,581 | $ | 10,689 | $ | 8,721 | $ | 10,553 |
Years Ended December 31, | ||||||||||
Notes | 2011 | 2010 | 2009 | |||||||
Sales and operating revenues | $ | — | $ | — | $ | 175 | ||||
Purchases of inventories(A) | 147,102 | 116,795 | 97,277 | |||||||
Derivative financial instruments(B) | ||||||||||
Net (gains) losses on derivative financial instruments allocated by the Owner | 1 | 2,368 | (3,696) | 76 | ||||||
Selling and administrative expenses | ||||||||||
General corporate expenses allocated by the Owner | 1 | 8,215 | 7,936 | 7,023 | ||||||
Research and development expenses | 1 | 2,235 | 2,436 | 2,106 | ||||||
Other expenses (income) – net | ||||||||||
Other – net | 2 | (29) | (44) | − |
(A) | Purchases of inventories (raw materials) from the Owner are included in both Cost of sales and operating expenses and Inventories. |
(B) | Consists of both realized and unrealized (gains) losses on derivative financial instruments which are included in Cost of sales and operating expenses. |
At December 31, | ||||||||||||
2011 | 2010 | 2009 | 2008 | |||||||||
Trade receivables | $ | — | $ | 101 | $ | 62 | $ | 8 | ||||
Trade payables(A) | 11,660 | 6,999 | 8,766 | 14,302 |
(A) | Trade payables due to the Owner arise from the purchase of raw materials from the Owner and amounts directly charged by the Owner for research and development expenses. |
Years Ended December 31, | |||||||||
2011 | 2010 | 2009 | |||||||
Cost of sales and operating expenses (as a reduction of energy costs)(A) | $ | (29,970 | ) | $ | (30,805 | ) | $ | (18,006 | ) |
(A) | The amount for the year ended December 31, 2009 includes $3,777 which was received and recognized immediately and $14,229 representing amortization of the deferred supplier incentives as described above. |
Years Ended December 31, | |||||||||
2011 | 2010 | 2009 | |||||||
Total operating lease expense | $ | 442 | $ | 347 | $ | 288 |
For the Year Ending December 31, | Amounts | ||
2012 | $ | 5 | |
2013 | 1 | ||
2014 | − | ||
2015 | − | ||
2016 | − | ||
$ | 6 |
Page | ||
Unaudited Interim Carve-Out Financial Statements | ||
Unaudited Interim Carve-Out Statements of Operations | ||
Unaudited Interim Carve-Out Statements of Comprehensive Income (Loss) | ||
Unaudited Interim Carve-Out Balance Sheets | ||
Unaudited Interim Carve-Out Statements of Cash Flows | ||
Unaudited Interim Carve-Out Statement of Changes in Invested Equity | ||
Notes to the Unaudited Interim Carve-Out Financial Statements | ||
Note 1 | Business and Basis of Presentation | |
Note 2 | Other Expenses (Income) – Net | |
Note 3 | Income Taxes | |
Note 4 | Inventories | |
Note 5 | Property, Plant and Equipment | |
Note 6 | Accrued Liabilities and Other Payables | |
Note 7 | Asset Retirement Obligations | |
Note 8 | Post Retirement Benefits | |
Note 9 | Related Party Transactions | |
Note 10 | Commitments and Contingencies | |
Note 11 | Changes in Accumulated Other Comprehensive Loss |
Three Months Ended March 31, | |||||||
(in thousands of US dollars) | Notes | 2013 | 2012 | ||||
Sales and operating revenues | $ | 126,424 | $ | 120,403 | |||
Costs and expenses | |||||||
Cost of sales and operating expenses, excluding impairment charge, depreciation and amortization and accretion expense shown below: | 116,469 | 108,236 | |||||
Impairment charge | 5 | 13,675 | − | ||||
Depreciation and amortization | 5 | 2,811 | 8,204 | ||||
Accretion expense | 7 | 833 | 839 | ||||
Selling and administrative expenses | |||||||
− third parties | 1,682 | 2,172 | |||||
− related parties | 9 | 1,532 | 1,423 | ||||
Research and development expenses – related parties | 9 | 664 | 892 | ||||
Other expenses (income) – net | |||||||
– third parties | 2 | (156) | 463 | ||||
– related parties | 2, 9 | – | (15) | ||||
137,510 | 122,214 | ||||||
Loss before income taxes | (11,086) | (1,811) | |||||
Income tax benefit | 3 | (333) | (555) | ||||
Net loss | $ | (10,753 | ) | $ | (1,256 | ) |
Three Months Ended March 31, | |||||||
(in thousands of US dollars) | Notes | 2013 | 2012 | ||||
Net loss | $ | (10,753 | ) | $ | (1,256 | ) | |
Other comprehensive income: | |||||||
Net actuarial gains on post retirement benefit plans – net of tax of ($1,509) and ($1,563), respectively | 11 | 2,371 | 2,454 | ||||
Other comprehensive income – net of tax | 2,371 | 2,454 | |||||
Total comprehensive income (loss) | $ | (8,382 | ) | $ | 1,198 |
(in thousands of US dollars) | Notes | At March 31, 2013 | At December 31, 2012 | ||||
ASSETS | |||||||
Current assets | |||||||
Cash | $ | 165 | $ | 161 | |||
Trade receivables | |||||||
– third parties | 1,442 | 3,879 | |||||
– related parties | 9 | – | 23 | ||||
Inventories | 4 | 81,745 | 80,314 | ||||
Prepaid expenses and other current assets | 1,547 | 347 | |||||
Total current assets | 84,899 | 84,724 | |||||
Non-current assets | |||||||
Property, plant and equipment – net | 5 | 69,178 | 83,261 | ||||
Other assets | 358 | 380 | |||||
Total assets | $ | 154,435 | $ | 168,365 | |||
LIABILITIES AND INVESTED EQUITY | |||||||
Current liabilities | |||||||
Trade payables | |||||||
– third parties | $ | 4,485 | $ | 5,485 | |||
– related parties | 9 | 17,192 | 6,344 | ||||
Accrued liabilities and other payables | 6 | 27,839 | 29,260 | ||||
Asset retirement obligations | 7 | 2,826 | 2,986 | ||||
Post retirement benefits | 8 | 466 | 523 | ||||
Total current liabilities | 52,808 | 44,598 | |||||
Non-current liabilities | |||||||
Asset retirement obligations | 7 | 75,304 | 74,541 | ||||
Post retirement benefits | 8 | 22,722 | 25,718 | ||||
Total liabilities | 150,834 | 144,857 | |||||
Commitments and contingencies | 10 | ||||||
Invested equity | |||||||
Owner’s net investment | 17,688 | 39,966 | |||||
Accumulated other comprehensive loss | (14,087) | (16,458) | |||||
Total invested equity | 3,601 | 23,508 | |||||
Total liabilities and invested equity | $ | 154,435 | $ | 168,365 |
Three Months Ended March 31, | ||||||
(in thousands of US dollars) | 2013 | 2012 | ||||
OPERATING ACTIVITIES | ||||||
Net loss | $ | (10,753 | ) | $ | (1,256 | ) |
Adjustments to determine net cash provided by (used in) operating activities: | ||||||
Impairment charge | 13,675 | – | ||||
Depreciation and amortization | 2,811 | 8,204 | ||||
Accretion expense | 833 | 839 | ||||
Amortization of deferred supplier incentives | – | (3,761) | ||||
General corporate expenses allocated by the Owner | 1,532 | 1,423 | ||||
Net (gains) losses on derivative financial instruments allocated by the Owner | 133 | (579) | ||||
Bad debt expense (recoveries) − net | (123) | 470 | ||||
Retirement and write-off of property, plant and equipment | 59 | 11 | ||||
Changes in: | ||||||
Trade receivables | ||||||
– third parties | 2,437 | 362 | ||||
– related parties | 23 | – | ||||
Inventories | (1,431) | (9,214) | ||||
Prepaid expenses and other current assets | (1,200) | (1,077) | ||||
Trade payables | ||||||
– third parties | 223 | (902) | ||||
– related parties | 10,848 | 9,010 | ||||
Accrued liabilities and other payables | (1,508) | (166) | ||||
Net change in deferred income tax assets and liabilities | – | 691 | ||||
Net change in other assets | 22 | 63 | ||||
Net change in post retirement benefits | (682) | (5,507) | ||||
Settlement of liabilities related to asset retirement obligations | (745) | (290) | ||||
Net cash provided by (used in) operating activities | 16,154 | (1,679) | ||||
INVESTING ACTIVITIES | ||||||
Purchases of property, plant and equipment | (3,083) | (5,378) | ||||
Release of restricted cash | – | 8,241 | ||||
Net cash provided by (used in) investing activities | (3,083) | 2,863 | ||||
FINANCING ACTIVITIES | ||||||
Net cash transfers (to) from the Owner | (13,067) | (1,136) | ||||
Net cash provided by (used in) financing activities | (13,067) | (1,136) | ||||
Net increase in cash | 4 | 48 | ||||
Cash – beginning of period | 161 | 130 | ||||
Cash – end of period | $ | 165 | $ | 178 | ||
Supplemental disclosure of non-cash investing information: | ||||||
Net changes to property, plant and equipment due to changes in asset retirement obligations | $ | 515 | $ | 204 |
(in thousands of US dollars) | Owner’s Net Investment | Accumulated Other Comprehensive Loss | Total Invested Equity | ||||||
Balance at December 31, 2012 | $ | 39,966 | $ | (16,458 | ) | $ | 23,508 | ||
Net loss – Three months ended March 31, 2013 | (10,753) | (10,753) | |||||||
Other comprehensive income: | |||||||||
Net actuarial gains on post retirement benefit plans – net of tax of $(1,509) | 2,371 | 2,371 | |||||||
Net transfers (to) from the Owner | (11,525) | (11,525) | |||||||
Balance at March 31, 2013 | $ | 17,688 | $ | (14,087 | ) | $ | 3,601 |
Three Months Ended March 31, | ||||||
2013 | 2012 | |||||
General corporate expenses allocated by the Owner | $ | 1,532 | $ | 1,423 |
Three Months Ended March 31, | ||||||
2013 | 2012 | |||||
Net (gains) losses on derivative financial instruments allocated by the Owner | $ | 133 | $ | (579 | ) |
Three Months Ended March 31, | |||||||
Notes | 2013 | 2012 | |||||
THIRD PARTIES | |||||||
Bad debt expense (recoveries) –net | $ | (123 | ) | $ | 470 | ||
Retirement and write-off of property, plant and equipment | 5 | 59 | 11 | ||||
Other – net | (92) | (18) | |||||
$ | (156 | ) | $ | 463 | |||
RELATED PARTIES | |||||||
Other – net | $ | — | $ | (15 | ) |
Three Months Ended March 31, | ||||||
2013 | 2012 | |||||
Effective statutory income tax rate | 38.9% | 38.9% | ||||
Loss before income taxes | $ | (11,086 | ) | $ | (1,811 | ) |
Income tax benefit at the effective statutory income tax rate | (4,312) | (704) | ||||
Differences attributable to: | ||||||
Increase in valuation allowance | 3,961 | – | ||||
Non-deductible expenses − net | 13 | 13 | ||||
Statutory tax rate differences on items allocated by the Owner | 3 | 138 | ||||
Other – net | 2 | (2) | ||||
Income tax benefit | $ | (333 | ) | $ | (555 | ) |
Three Months Ended March 31, | ||||||
2013 | 2012 | |||||
Current expense | $ | 1,850 | $ | 2,448 | ||
Deferred benefit | (2,183) | (3,003) | ||||
Income tax benefit | $ | (333 | ) | $ | (555 | ) |
At March 31, 2013 | At December 31, 2012 | |||||
Raw materials and purchased components | $ | 38,126 | $ | 35,441 | ||
Consumable stores | 13,527 | 13,544 | ||||
Work in progress | 9,099 | 9,400 | ||||
Finished goods | 20,993 | 21,929 | ||||
$ | 81,745 | $ | 80,314 |
At March 31, 2013 | At December 31, 2012 | |||||
Cost (excluding Construction work in progress): | ||||||
Land and property rights | $ | 17,164 | $ | 17,164 | ||
Buildings | 129,637 | 129,593 | ||||
Machinery and equipment | 293,133 | 289,922 | ||||
439,934 | 436,679 | |||||
Accumulated depreciation and amortization and impairment | (378,928) | (362,681) | ||||
61,006 | 73,998 | |||||
Construction work in progress | 8,172 | 9,263 | ||||
Property, plant and equipment – net | $ | 69,178 | $ | 83,261 |
At March 31, 2013 | At December 31, 2012 | |||||
Accrued electric power expense | $ | 12,946 | $ | 13,138 | ||
Accrued payroll and employment benefits | 4,705 | 5,891 | ||||
Accrued inventory purchases | 3,117 | 4,021 | ||||
Taxes payable other than income | 3,679 | 3,513 | ||||
Accrued freight expense | 876 | 729 | ||||
Accruals for capital expenditures | 452 | 365 | ||||
Other | 2,064 | 1,603 | ||||
$ | 27,839 | $ | 29,260 |
Three Months Ended March 31, 2013 | |||
Balance at the beginning of the period | $ | 77,527 | |
Liabilities incurred | 515 | ||
Liabilities settled | (745) | ||
Accretion expense | 833 | ||
Balance at the end of the period | $ | 78,130 |
At March 31, 2013 | At December 31, 2012 | |||||
As shown in the carve-out balance sheet at period end: | ||||||
Current | $ | 2,826 | $ | 2,986 | ||
Non-current | 75,304 | 74,541 | ||||
$ | 78,130 | $ | 77,527 |
Three Months Ended March 31, | ||||||
2013 | 2012 | |||||
Current service cost | $ | 335 | $ | 306 | ||
Interest cost | 828 | 784 | ||||
Expected return on assets | (847) | (750) | ||||
Amortization of actuarial losses | 637 | 662 | ||||
Net periodic benefit cost | $ | 953 | $ | 1,002 |
Three Months Ended March 31, | ||||||
2013 | 2012 | |||||
Current service cost | $ | 38 | $ | 41 | ||
Interest cost | 51 | 57 | ||||
Amortization of actuarial losses | 37 | 17 | ||||
Net periodic benefit cost | $ | 126 | $ | 115 |
Three Months Ended March 31, | |||||||
Notes | 2013 | 2012 | |||||
Purchases of inventories(A) | $ | 37,357 | $ | 39,378 | |||
Cost of sales and operating expenses | |||||||
Net (gains) losses on derivative financial instruments allocated by the Owner(B) | 1 | 133 | (579) | ||||
Selling and administrative expenses | |||||||
General corporate expenses allocated by the Owner | 1 | 1,532 | 1,423 | ||||
Research and development expenses | 664 | 892 | |||||
Other expenses (income) – net | |||||||
Other – net | 2 | $ | — | $ | (15 | ) |
(A) | Purchases of inventories (raw materials) from the Owner are included in both Cost of sales and operating expenses and Inventories. |
(B) | Consists of both realized and unrealized gains and losses on derivative financial instruments. |
At March 31, 2013 | At December 31, 2012 | |||||
Trade receivables | $ | — | $ | 23 | ||
Trade payables(A) | 17,192 | 6,344 |
(A) | Trade payables due to the Owner arise from the purchase of raw materials from the Owner. |
Three Months Ended March 31, | ||||||
2013 | 2012 | |||||
Cost of sales and operating expenses (as a reduction of energy costs) | $ | — | $ | (3,761 | ) |
For the Year Ending December 31, | Amounts | ||
2013 (remainder of year) | $ | 56,102 | |
2014 | 6,233 | ||
$ | 62,335 |
Three Months Ended March 31, | ||||||
2013 | 2012 | |||||
Total operating lease expense | $ | 84 | $ | 162 |
For the Year Ending December 31, | Amounts | ||
2013 (remainder of year) | $ | 36 | |
2014 | 48 | ||
2015 | 48 | ||
2016 | 23 | ||
2017 | 3 | ||
$ | 158 |
Three Months Ended March 31, | ||||||
2013 | 2012 | |||||
Balance at beginning of period | $ | (16,458 | ) | $ | (16,581 | ) |
Other comprehensive income: | ||||||
Actuarial gains | 3,206 | 3,338 | ||||
Income tax expense | (1,247) | (1,299) | ||||
Other comprehensive income before reclassifications – net of tax | 1,959 | 2,039 | ||||
Amounts reclassified from Accumulated other comprehensive loss: | ||||||
Amortization of actuarial losses(A) | 674 | 679 | ||||
Income tax expense(B) | (262) | (264) | ||||
Amounts reclassified from Accumulated other comprehensive loss – net of tax | 412 | 415 | ||||
Other comprehensive income – net of tax | 2,371 | 2,454 | ||||
Balance at end of period | $ | (14,087 | ) | $ | (14,127 | ) |
(A) | Amounts included in the computation of net periodic benefit cost for the Pension Plan and Other Benefit Plan. See Note 8 – Post Retirement Benefits. |
(B) | Amounts included in Income tax expense (benefit) in Sebree’s carve-out statements of operations. |
Page | ||
Pro forma Financial Information | ||
Unaudited Pro forma Financial Statements | ||
Unaudited Pro forma Consolidated Statements of Operations for the year ended December 31, 2012 | ||
Unaudited Pro forma Consolidated Statements of Operations for the three months ended March 31, 2013 | ||
Unaudited Pro forma Consolidated Balance Sheets as of March 31, 2013 | ||
Notes to the Unaudited Pro forma Financial Statements | ||
Notes to the Unaudited Pro forma Consolidated Statements of Operations for the year ended December 31, 2012 | ||
Notes to the Unaudited Pro forma Consolidated Statements of Operations for the three months ended March 31, 2013 | ||
Notes to the Unaudited Pro forma Consolidated Balance Sheets as of March 31, 2013 |
Century | Sebree | Pro Forma | Pro Forma | |||||||||||||
Historical | Historical | Adjustments | As Adjusted | |||||||||||||
NET SALES: | ||||||||||||||||
Third-party customers | $ | 719,812 | $ | — | $ | 483,085 | (1) | $ | 1,202,897 | |||||||
Related parties | 552,299 | 483,085 | (483,085 | ) | (1) | 552,299 | ||||||||||
1,272,111 | 483,085 | — | 1,755,196 | |||||||||||||
Cost of goods sold | 1,225,769 | 496,629 | (27,274 | ) | (2) | 1,695,124 | ||||||||||
Gross profit (loss) | 46,342 | (13,544 | ) | 27,274 | 60,072 | |||||||||||
Impairment charge | — | 219,549 | — | 219,549 | ||||||||||||
Other operating expenses | 18,253 | 2,751 | — | 21,004 | ||||||||||||
Selling, general and administrative expenses | 35,363 | 12,868 | (550 | ) | (3) | 47,681 | ||||||||||
Operating income (loss) | (7,274 | ) | (248,712 | ) | 27,824 | (228,162 | ) | |||||||||
Interest expense – third party - net | (23,537 | ) | — | — | (23,537 | ) | ||||||||||
Interest income – related parties | 62 | — | — | 62 | ||||||||||||
Net loss on forward contracts | (4,150 | ) | — | — | (4,150 | ) | ||||||||||
Other income (expense) — third party | 5,576 | (2,323 | ) | (15 | ) | (1) | 3,238 | |||||||||
Other income (expense) — related party | — | (15 | ) | 15 | (1) | — | ||||||||||
Income (loss) before income taxes and equity in earnings of joint ventures | (29,323 | ) | (251,050 | ) | 27,824 | (252,549 | ) | |||||||||
Income tax (expense) benefit | (8,910 | ) | 49,357 | (51,026 | ) | (4) | (10,579 | ) | ||||||||
Income (loss) before equity in earnings of joint ventures | (38,233 | ) | (201,693 | ) | (23,202 | ) | (263,128 | ) | ||||||||
Equity in earnings of joint ventures | 2,623 | — | — | 2,623 | ||||||||||||
Net income (loss) | $ | (35,610 | ) | $ | (201,693 | ) | $ | (23,202 | ) | $ | (260,505 | ) | ||||
Net income (loss) allocated to common shareholders | $ | (35,610 | ) | $ | (260,505 | ) | ||||||||||
EARNINGS (LOSS) PER COMMON SHARE: | ||||||||||||||||
Basic | $ | (0.40 | ) | $ | (2.94 | ) | ||||||||||
Diluted | $ | (0.40 | ) | $ | (2.94 | ) | ||||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||||
Basic | 88,534 | 88,534 | ||||||||||||||
Diluted | 88,534 | 88,534 | ||||||||||||||
DIVIDENDS PER COMMON SHARE | $ | — | $ | — |
Century | Sebree | Pro Forma | Pro Forma | |||||||||||||
Historical | Historical | Adjustments | As Adjusted | |||||||||||||
NET SALES: | ||||||||||||||||
Third-party customers | $ | 188,514 | $ | — | $ | 126,424 | (1) | $ | 314,938 | |||||||
Related parties | 132,760 | 126,424 | (126,424 | ) | (1) | 132,760 | ||||||||||
321,274 | 126,424 | — | 447,698 | |||||||||||||
Cost of goods sold | 303,692 | 116,469 | (1,397 | ) | (2) | 418,764 | ||||||||||
Gross profit (loss) | 17,582 | 9,955 | 1,397 | 28,934 | ||||||||||||
Impairment charge | — | 13,675 | — | 13,675 | ||||||||||||
Other operating expenses | 1,096 | 4,308 | — | 5,404 | ||||||||||||
Selling, general and administrative expenses | 16,299 | 3,214 | (250 | ) | (3) | 19,263 | ||||||||||
Operating income (loss) | 187 | (11,242 | ) | 1,647 | (9,408 | ) | ||||||||||
Interest expense – third party - net | (5,945 | ) | — | — | (5,945 | ) | ||||||||||
Net loss on forward contracts | 15,507 | — | — | 15,507 | ||||||||||||
Other income (expense) — third party | 70 | 156 | — | 226 | ||||||||||||
Income (loss) before income taxes and equity in earnings of joint ventures | 9,819 | (11,086 | ) | 1,647 | 380 | |||||||||||
Income tax (expense) benefit | (2,517 | ) | 333 | (432 | ) | (4) | (2,616 | ) | ||||||||
Income (loss) before equity in earnings of joint ventures | 7,302 | (10,753 | ) | 1,215 | (2,236 | ) | ||||||||||
Equity in earnings of joint ventures | 951 | — | — | 951 | ||||||||||||
Net income (loss) | $ | 8,253 | $ | (10,753 | ) | $ | 1,215 | $ | (1,285 | ) | ||||||
Net income (loss) allocated to common shareholders | $ | 7,567 | $ | (1,285 | ) | |||||||||||
EARNINGS (LOSS) PER COMMON SHARE: | ||||||||||||||||
Basic | $ | 0.09 | $ | (0.01 | ) | |||||||||||
Diluted | $ | 0.09 | $ | (0.01 | ) | |||||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||||
Basic | 88,555 | 88,555 | ||||||||||||||
Diluted | 89,020 | 88,555 | ||||||||||||||
DIVIDENDS PER COMMON SHARE | $ | — | $ | — |
Century | Pro Forma | Pro Forma | |||||||||||
Historical | Adjustments | As Adjusted | |||||||||||
ASSETS | |||||||||||||
Current Assets: | |||||||||||||
Cash and cash equivalents | $ | 195,471 | $ | (47,373 | ) | (1 | ) | $ | 148,098 | ||||
Restricted cash | 258 | — | 258 | ||||||||||
Accounts receivable – net | 52,312 | — | 52,312 | ||||||||||
Due from affiliates | 43,561 | — | 43,561 | ||||||||||
Inventories | 156,815 | 58,497 | (1 | ) | 215,312 | ||||||||
Prepaid and other current assets | 41,163 | 363 | (1 | ) | 41,526 | ||||||||
Deferred taxes - current portion | 19,726 | — | 19,726 | ||||||||||
Total current assets | 509,306 | 11,487 | 520,793 | ||||||||||
Property, Plant and Equipment – net | 1,180,770 | 55,520 | (1 | ) | 1,236,290 | ||||||||
Other assets | 101,039 | — | 101,039 | ||||||||||
Total | $ | 1,791,115 | $ | 67,006 | $ | 1,858,121 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||
LIABILITIES: | |||||||||||||
Accounts payable, trade | $ | 75,796 | $ | — | $ | 75,796 | |||||||
Due to affiliates | 50,210 | — | 50,210 | ||||||||||
Accrued and other current liabilities | 49,001 | 40,610 | (1 | ) | 89,611 | ||||||||
Accrued employee benefits costs - current portion | 18,668 | 3,512 | (1 | ) | 22,180 | ||||||||
Industrial revenue bonds | 7,815 | — | 7,815 | ||||||||||
Total current liabilities | 201,490 | 44,122 | 245,611 | ||||||||||
Senior notes payable | 250,861 | 250,861 | |||||||||||
Accrued pension benefits costs – less current portion | 67,322 | 5,039 | (1 | ) | 72,361 | ||||||||
Accrued postretirement benefits costs - less current portion | 143,794 | 6,544 | (1 | ) | 150,338 | ||||||||
Other liabilities | 25,278 | 8,003 | (1 | ) | 33,281 | ||||||||
Deferred Taxes– Less current portion | 110,361 | 1,257 | (2 | ) | 111,618 | ||||||||
Total noncurrent liabilities | 597,616 | 20,843 | 618,459 | ||||||||||
SHAREHOLDERS’ EQUITY: | |||||||||||||
Series A Preferred stock (one cent par value, 5,000,000 shares authorized; 80,084 shares issued and outstanding) | 1 | — | 1 | ||||||||||
Common stock (one cent par value, 195,000,000 shares authorized; 93,382,730 shares issued and 88,596,209 outstanding) | 934 | — | 934 | ||||||||||
Additional paid-in capital | 2,507,671 | — | 2,507,671 | ||||||||||
Treasury stock, at cost | (49,924 | ) | — | (49,924 | ) | ||||||||
Accumulated other comprehensive loss | (150,297 | ) | — | (150,297 | ) | ||||||||
Accumulated deficit | (1,316,376 | ) | 2,042 | (1 | ) | (1,314,334 | ) | ||||||
Total shareholders’ equity | 992,009 | 2,042 | 994,051 | ||||||||||
Total | $ | 1,791,115 | $ | 67,006 | $ | 1,858,121 |
Preliminary consideration: | |||
Purchase price | $ | 65,000 | |
Other credits and working capital adjustments | (13,627 | ) | |
Other post retirement benefits credit | (4,000 | ) | |
Adjusted consideration | $ | 47,373 | |
The Company funded the acquisition with cash. | |||
Preliminary allocation of purchase price: | |||
Inventory | $ | 58,497 | |
Other current assets | 363 | ||
Property, plant and equipment | 55,520 | ||
Current liabilities | (44,122 | ) | |
Noncurrent liabilities | (20,843 | ) | |
Preliminary allocation of fair market value of net assets | $ | 49,415 | |
Preliminary bargain purchase gain | $ | 2,042 |