Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 02, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | RAYONIER ADVANCED MATERIALS INC. | |
Trading Symbol | RYAM | |
Entity Central Index Key | 1,597,672 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 51,868,409 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 25, 2017 | |
Income Statement [Abstract] | ||
Net Sales | $ 521,992 | $ 201,415 |
Cost of Sales | (441,640) | (164,046) |
Gross Margin | 80,352 | 37,369 |
Selling, general and administrative expenses | (23,192) | (9,363) |
Duties | (8,327) | 0 |
Other operating expense, net | (2,576) | (925) |
Operating Income | 46,257 | 27,081 |
Interest expense | (14,994) | (8,828) |
Interest income and other, net | 842 | 481 |
Other components of net periodic benefit costs | 2,194 | (1,116) |
Income Before Income Taxes | 34,299 | 17,618 |
Income tax expense (Note 13) | (9,844) | (7,976) |
Net Income Attributable to Rayonier Advanced Materials Inc. | 24,455 | 9,642 |
Mandatory convertible stock dividends | (3,403) | (3,176) |
Net Income Available to Rayonier Advanced Materials Inc. Common Stockholders | $ 21,052 | $ 6,466 |
Earnings Per Share of Common Stock (Note 10) | ||
Basic earnings per share (in dollars per share) | $ 0.41 | $ 0.15 |
Diluted earnings per share (in dollars per share) | 0.38 | 0.15 |
Dividends Declared Per Common Share (in dollars per share) | $ 0.07 | $ 0.07 |
Comprehensive Income: | ||
Net Income | $ 24,455 | $ 9,642 |
Other Comprehensive Income, net of tax (Note 9) | ||
Foreign currency translation adjustments | 7,749 | 0 |
Unrealized gain on derivative instruments | 1,272 | 0 |
Net gain from pension and postretirement plans | 2,397 | 2,030 |
Total other comprehensive income | 11,418 | 2,030 |
Comprehensive Income | $ 35,873 | $ 11,672 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 89,076 | $ 96,235 |
Accounts receivable, net (Note 2) | 180,270 | 181,298 |
Inventory (Note 3) | 358,149 | 302,086 |
Prepaid and other current assets | 77,415 | 66,918 |
Total current assets | 704,910 | 646,537 |
Property, Plant and Equipment (net of accumulated depreciation of $1,344,626 for 2018 and $1,309,192 for 2017) | 1,408,984 | 1,407,762 |
Deferred Tax Assets | 392,638 | 402,846 |
Intangible Assets, net | 57,717 | 59,869 |
Other Assets | 129,800 | 125,597 |
Total Assets | 2,694,049 | 2,642,611 |
Current Liabilities | ||
Accounts payable | 194,389 | 157,925 |
Accrued and other current liabilities (Note 4) | 123,039 | 127,040 |
Current maturities of long-term debt (Note 5) | 11,274 | 9,425 |
Current liabilities for disposed operations (Note 6) | 13,453 | 13,181 |
Total current liabilities | 342,155 | 307,571 |
Long-Term Debt (Note 5) | 1,226,381 | 1,232,179 |
Non-Current Liabilities for Disposed Operations (Note 6) | 149,144 | 150,905 |
Pension and Other Postretirement Benefits | 208,278 | 212,810 |
Deferred Tax Liabilities | 33,274 | 32,607 |
Other Non-Current Liabilities | 12,823 | 12,783 |
Commitments and Contingencies | ||
Stockholders’ Equity | ||
Preferred stock, 10,000,000 shares authorized at $0.01 par value, 1,725,000 issued and outstanding as of March 31, 2018 and December 31, 2017, aggregate liquidation preference $172,500 | 17 | 17 |
Common stock, 140,000,000 shares authorized at $0.01 par value, 51,856,185 and 51,717,142 issued and outstanding, as of March 31, 2018 and December 31, 2017, respectively | 519 | 517 |
Additional paid-in capital | 391,902 | 392,353 |
Retained earnings | 394,289 | 377,020 |
Accumulated other comprehensive loss (Note 9) | (64,733) | (76,151) |
Total Stockholders’ Equity | 721,994 | 693,756 |
Total Liabilities and Stockholders’ Equity | $ 2,694,049 | $ 2,642,611 |
Condensed Consolidated Balance4
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accumulated deprecation | $ 1,344,626 | $ 1,309,192 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares issued (in shares) | 1,725,000 | 1,725,000 |
Preferred stock, shares outstanding (in shares) | 1,725,000 | 1,725,000 |
Preferred stock, aggregate liquidation preference | $ 172,500 | $ 172,500 |
Common stock, shares authorized (in shares) | 140,000,000 | 140,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 51,856,185 | 51,717,142 |
Common stock, shares outstanding (in shares) | 51,856,185 | 51,717,142 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 25, 2017 | |
Operating Activities | ||
Net Income | $ 24,455 | $ 9,642 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 36,742 | 21,533 |
Stock-based incentive compensation expense | 2,480 | 2,274 |
Amortization of capitalized debt costs, discount and premium | 254 | 469 |
Deferred income tax | 8,680 | 5,127 |
Net periodic benefit cost of pension and postretirement plans | 1,647 | 2,536 |
Gain on foreign currency exchange | (4,020) | 0 |
Other | 1,566 | 779 |
Changes in operating assets and liabilities: | ||
Receivables | 2,662 | (12,956) |
Inventories | (55,433) | (3,227) |
Accounts payable | 33,809 | 12,734 |
Accrued liabilities | (5,139) | (8,293) |
All other operating activities | (10,543) | 8,243 |
Contributions to pension and other postretirement benefit plans | (2,870) | (553) |
Expenditures for disposed operations | (1,774) | (562) |
Cash Provided by Operating Activities | 32,516 | 37,746 |
Investing Activities | ||
Capital expenditures | (29,002) | (13,537) |
Cash Used for Investing Activities | (29,002) | (13,537) |
Financing Activities | ||
Repayment of debt | (1,661) | (2,165) |
Dividends paid on common stock | (3,938) | 0 |
Dividends paid on preferred stock | (3,450) | (3,450) |
Proceeds from the issuance of common stock | 121 | 0 |
Common stock repurchased | 3,050 | 141 |
Cash Used for Financing Activities | (11,978) | (5,756) |
Cash and Cash Equivalents | ||
Change in cash and cash equivalents | (8,464) | 18,453 |
Net effect of foreign exchange on cash and cash equivalents | 1,305 | 0 |
Balance, beginning of year | 96,235 | 326,655 |
Balance, end of period | $ 89,076 | $ 345,108 |
Basis of Presentation and New A
Basis of Presentation and New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and New Accounting Pronouncements | Basis of Presentation and New Accounting Pronouncements Basis of Presentation The unaudited condensed consolidated financial statements and notes thereto of Rayonier Advanced Materials Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, these financial statements and notes reflect all adjustments (all of which are normal recurring adjustments) necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. These statements and notes should be read in conjunction with the financial statements and supplementary data included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 , as filed with the SEC. New Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases. The update requires entities to recognize assets and liabilities arising from finance and operating leases and to classify those finance and operating lease payments in the financing or operating sections, respectively, of the statement of cash flows. It is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company is evaluating the impact of this standard on its consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Tax Effects from AOCI . This guidance permits the reclassification of certain pension or other post employment benefit dangling debits and credits (“dangles”) from Accumulated Other Comprehensive Income (“AOCI”) to retained earnings. The applicable dangles are those recorded as a result of H.R.1, passed on December 22, 2017 (the "Tax Cuts and Jobs Act"), which reduced the U.S. federal tax rate applicable to the Company. The ASU is effective for fiscal years beginning after December 15, 2018 with early adoption permitted. The Company has approximately $22 million in applicable dangling debits recorded in AOCI and has not yet determined whether or not it will reclassify this amount. Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , as amended and/or clarified by ASU Nos. 2016-08, 2016-10, 2016-12, and 2016-20, a comprehensive new revenue recognition standard. The core principle is that a company should recognize revenue when it transfers control of goods or services to customers for an amount that reflects the consideration to which the company expects to be entitled to in exchange for those goods or services. The Company adopted the standard on a modified retrospective basis in the first quarter of 2018, generally recognizing revenue when it transfers control at a point in time. The adoption did not have a material impact to the individual financial statement line items on the Company’s consolidated financial statements because the new standard is not materially different than its previous revenue recognition practices. The following is a discussion of our revenue recognition policy effective January 1, 2018. Accounting Policy Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied. The majority of the Company's contracts have a single performance obligation to transfer products. Accordingly, the Company recognizes revenue when title and risk of loss have been transferred to the customer. Generally, title passes upon delivery to the customer at the agreed upon location. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products and is generally based upon contractual arrangements with customers or published indices. The Company sells its products both directly to customers and through distributors and agents typically under agreements with payment terms less than 90 days. The Company has elected to account for shipping and handling as activities to fulfill the promise to transfer the goods. As such, shipping and handling costs incurred are recorded in cost of sales. The Company has elected to exclude from net sales any value add, sales and other taxes which it collects concurrent with revenue-producing activities. These accounting policy elections are consistent with the manner in which the Company historically recorded shipping and handling fees and taxes. Contract Estimates The nature of certain of the Company's contracts gives rise to variable consideration, which may be constrained, including volume-based rebates to certain customers. The Company issues rebates to customers when they purchase a certain volume level, primarily retrospective volume-based rebates, which are applied retroactively to prior purchases. The Company estimates the level of volumes based on anticipated purchases at the beginning of the period and records a rebate accrual for each purchase toward the requisite rebate volume. These estimated rebates are included in the transaction price of the Company's contracts with customers as a reduction to net sales and are included in accrued customer incentives and prepayments in the consolidated balance sheets (see Note 4 - Accrued and Other Current Liabilities ). This methodology is consistent with the manner in which the Company historically estimated and recorded volume-based rebates. The majority of the Company's revenue is derived from contracts (i) with an original expected length of one year or less and (ii) for which it recognizes revenue at the amount in which it has the right to invoice as product is delivered. The Company has elected the practical expedient not to disclose the value of remaining performance obligations associated with these types of contracts. The Company has certain contracts which contain performance obligations which are not significant in the context of the contract with the customer. The Company has elected the practical expedient not to assess whether these promised goods or services are performance obligations. Contract Balances Contract liabilities primarily relate to prepayments received from the Company's customers before revenue is recognized and volume rebates payable to customers. These amounts are included in accrued customer incentives and prepayments in the consolidated balance sheets (see Note 4 - Accrued and Other Current Liabilities ). The Company does not have any material contract assets as of March 31, 2018. Disaggregated Revenue In general, the Company's product-lines within its segments are aligned according to the nature and economic characteristics of its products and customer relationships and provide meaningful disaggregation of each business segment's results of operations. Disaggregation of net sales by business segment and product-line are included in Note 14 - Segment Information . Recently Adopted Accounting Pronouncements In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments . The update was issued to reduce diversity in practice regarding the presentation of eight specific types of cash receipts and cash payments in the statement of cash flows. The update is effective for fiscal years beginning after December 15, 2017. The Company adopted the update as of January 1, 2018. The adoption did not have a material impact on the Company’s consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits. The update was issued to improve the presentation of net periodic pension and post retirement benefit cost. The Company adopted the provisions of this guidance in the first quarter of 2018 using the retrospective method. As a result of this update, the Company presented the components of periodic pension and post retirement costs, other than service costs, separately outside of operating income in “Other components of net periodic benefit costs” on the condensed consolidated statement of income. The Company presented the service costs component of net periodic benefit cost in cost of sales and selling, general and administrative expense, which correlates with the related employee compensation costs arising from services rendered during the period. Also in accordance with the new guidance, only the service cost component of the net periodic benefit cost are eligible for capitalization in assets. The update resulted in a change to previously reported amounts, with an increase in operating income of $1 million for the first quarter of 2017 , which was offset by a corresponding increase in other components of net periodic benefits costs of $1 million , reflecting the impact of presenting interest cost, expected return on plan assets, amortization of prior service costs and actuarial gains and losses components in non-operating income. The adoption of this guidance had no impact on previously reported earnings or net income. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation. The update provides guidance on how to account for changes to the terms or conditions of stock compensation awards. It is effective for fiscal years beginning after December 15, 2017. The Company adopted the update as of January 1, 2018. The adoption did not have a material impact on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The update provides guidance to better align the financial reporting for hedging activities with the economic objectives of those activities. For public business entities, it is effective for fiscal years beginning after December 15, 2018, with early adoption, including adoption in an interim period, permitted. The update requires a modified retrospective transition method which will result in the recognition of a cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the date of adoption. The Company elected to early adopt the new guidance as of January 1, 2018. The adoption did not have a material impact on the Company’s consolidated financial statements. Subsequent Events Events and transactions subsequent to the balance sheet date have been evaluated for potential recognition and disclosure through May 10, 2018 , the date these financial statements were available to be issued. The following subsequent events warranting disclosure were identified. On April 10, 2018, the Company’s board of directors declared a second quarter cash dividend of $2.00 per share of mandatory convertible preferred stock. The dividend will be paid on May 15, 2018 to mandatory convertible preferred stockholders of record as of May 1, 2018. |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable As of March 31, 2018 and December 31, 2017 , the Company’s accounts receivable included the following: March 31, 2018 December 31, 2017 Accounts receivable, trade $ 142,944 $ 134,523 Accounts receivable, other (a) 38,137 47,368 Allowance for doubtful accounts (811 ) (593 ) Total accounts receivable, net $ 180,270 $ 181,298 (a) Accounts receivable, other consists primarily of value added/consumption taxes, grants receivable and accrued billings due from government agencies. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory As of March 31, 2018 and December 31, 2017 , the Company’s inventory included the following: March 31, 2018 December 31, 2017 Finished goods $ 213,809 $ 190,140 Work-in-progress 18,826 18,889 Raw materials 114,808 82,940 Manufacturing and maintenance supplies 10,706 10,117 Total inventory $ 358,149 $ 302,086 |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued and Other Current Liabilities | Accrued and Other Current Liabilities As of March 31, 2018 and December 31, 2017 , the Company’s accrued and other liabilities included the following: March 31, 2018 December 31, 2017 Accrued customer incentives and prepayments $ 44,311 $ 53,522 Accrued payroll and benefits 40,585 48,431 Accrued interest 10,323 3,188 Other current liabilities 27,820 21,899 Total accrued and other liabilities $ 123,039 $ 127,040 |
Debt and Capital Leases
Debt and Capital Leases | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt and Capital Leases | Debt and Capital Leases As of March 31, 2018 and December 31, 2017 , the Company’s debt and capital leases include the following: March 31, 2018 December 31, 2017 U.S. Revolver of $100 million maturing in November 2022, $92 million available after taking into account outstanding letters of credit, bearing interest at LIBOR plus 2.25% at March 31, 2018 $ — $ — Multi-currency Revolver of $150 million maturing in November 2022, $125 million available after taking into account outstanding letters of credit, bearing interest at LIBOR plus 2.25% at March 31, 2018 — — Term A-1 Loan Facility borrowings maturing through November 2022 bearing interest at LIBOR plus 2.25%, interest rate of 4.12% at March 31, 2018 180,000 180,000 Term A-2 Loan Facility borrowings maturing through November 2024 bearing interest at LIBOR plus 2.00 (after consideration of 0.50% patronage benefit), interest rate of 4.37% at March 31, 2018 448,875 450,000 Senior Notes due 2024 at a fixed interest rate of 5.50% 506,412 506,412 Canadian dollar, fixed interest rate term loans with rates ranging from 5.50% to 6.86% and maturity dates ranging from March 2020 through April 2028, secured by certain assets of the Temiscaming plant 98,039 100,881 Other loans 6,018 5,946 Capital Lease obligation 3,340 3,409 Total principal payments due 1,242,684 1,246,648 Less: debt premium, original issue discount and issuance costs (5,029 ) (5,044 ) Total debt 1,237,655 1,241,604 Less: Current maturities of long-term debt (11,274 ) (9,425 ) Long-term debt $ 1,226,381 $ 1,232,179 During the three months ended March 31, 2018 , the Company made $1 million in principal repayments on the term loan facilities. As of March 31, 2018 , debt and capital lease payments due during the next five years and thereafter are as follows: Capital Lease Minimum Lease Payments Less: Interest Net Present Value Debt Principal Payments Remaining 2018 $ 386 $ 170 $ 216 $ 6,912 2019 515 209 306 18,137 2020 515 187 328 23,227 2021 515 163 352 14,555 2022 515 138 377 208,737 Thereafter 2,018 257 1,761 967,776 Total principal payments $ 4,464 $ 1,124 $ 3,340 $ 1,239,344 |
Liabilities for Disposed Operat
Liabilities for Disposed Operations | 3 Months Ended |
Mar. 31, 2018 | |
Environmental Remediation Obligations [Abstract] | |
Liabilities for Disposed Operations | Liabilities for Disposed Operations An analysis of the liabilities for disposed operations for the three months ended March 31, 2018 is as follows: Balance, December 31, 2017 $ 164,086 Expenditures charged to liabilities (1,774 ) Increase to liabilities 285 Balance, March 31, 2018 162,597 Less: Current portion (13,453 ) Non-current portion $ 149,144 In addition to the estimated liabilities, the Company is subject to the risk of reasonably possible additional liabilities in excess of the established reserves due to potential changes in circumstances and future events, including, without limitation, changes to current laws and regulations; changes in governmental agency personnel, direction, philosophy and/or enforcement policies; developments in remediation technologies; increases in the cost of remediation, operation, maintenance and monitoring of its disposed operations sites; changes in the volume, nature or extent of contamination to be remediated or monitoring to be undertaken; the outcome of negotiations with governmental agencies and non-governmental parties; and changes in accounting rules or interpretations. Based on information available as of March 31, 2018 , the Company estimates this exposure could range up to approximately $67 million , although no assurances can be given that this amount will not be exceeded given the factors described above. These potential additional costs are attributable to several sites and other applicable liabilities. Further, this estimate excludes reasonably possible liabilities which are not currently estimable primarily due to the factors discussed above. Subject to the previous paragraph, the Company believes established liabilities are sufficient for probable costs expected to be incurred over the next 20 years with respect to its disposed operations. However, no assurances are given they will be sufficient for the reasons described above, and additional liabilities could have a material adverse effect on the Company’s financial position, results of operations and cash flows. |
Derivatives Instruments
Derivatives Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives Instruments | Derivative Instruments The Company’s earnings and cash flows are subject to fluctuations due to changes in interest rates and foreign currency exchange rates. The Company allows for the use of derivative financial instruments to manage interest rate and foreign currency exchange rate exposure, but does not allow derivatives to be used for speculative purposes. All derivative instruments are recognized on the consolidated balance sheets at their fair value and are either designated as a hedge of a forecasted transaction or undesignated. Changes in the fair value of a derivative designated as a hedge are recorded in other comprehensive income until earnings are affected by the hedged transaction, and are then reported in current earnings. Changes in the fair value of undesignated derivative instruments and the ineffective portion of designated derivative instruments are reported in current earnings. Interest Rate Risk The Company’s primary debt obligations utilize variable-rate LIBOR, exposing the Company to variability in interest payments due to changes in interest rates. The Company entered into interest rate swap agreements to reduce the volatility of financing costs, achieve a desired proportion of fixed-rate versus floating-rate debt and to hedge the variability in cash flows attributable to interest rate risks caused by changes in the LIBOR benchmark. The Company designated the swaps as cash flow hedges and is assessing their effectiveness using the hypothetical derivative method in conjunction with regression. Effective gains and losses, deferred to accumulated other comprehensive loss, are reclassified into earnings over the life of the associated hedge. Foreign Currency Exchange Rate Risk Foreign currency fluctuations affect investments in foreign subsidiaries and foreign currency cash flows related to third party purchases, product shipments, and foreign-denominated debt. The Company is also exposed to the translation of foreign currency earnings to the U.S. dollar. Management uses foreign currency forward contracts to selectively hedge its foreign currency cash flow exposure and manage risk associated with changes in currency exchange rates. The Company’s principal foreign currency exposure is to the Canadian dollar, and to a lesser extent, the euro. The notional amounts and maturity dates of outstanding derivative instruments as of March 31, 2018 are presented below. The Company did not use any derivative instruments during the three months ended March 25, 2017 . Maturity Date Notional Amount Interest Rate Swaps December 29, 2020 $ 200,000 Foreign Exchange Forward Contracts Monthly through June 2018 $ 147,634 The fair values of derivative instruments included in the consolidated balance sheet as of March 31, 2018 and December 31, 2017 are provided in the below table. See Note 8 — Fair Value Measurements for additional information related to the Company’s derivatives. Balance Sheet Location March 31, 2018 December 31, 2017 Assets: Derivatives designated as hedging instruments: Interest rate swaps Other current assets $ 389 $ — Interest rate swaps Other assets 2,248 749 Derivatives not designated as hedging instruments: Foreign exchange forward contracts Other current assets — 427 Liabilities: Derivatives designated as hedging instruments: Foreign exchange forward contracts Other current liabilities (224 ) — Derivatives not designated as hedging instruments: Foreign exchange forward contracts Other current liabilities (30 ) — Total derivatives $ 2,383 $ 1,176 The effects of derivative instruments designated as cash flow hedges, the related changes in AOCL and the gains and losses in income for the three months ended March 31, 2018 were as follows: Derivatives in Cash Flow Hedging Relationships Gain (Loss) Recognized in OCI on Derivative Gain (Loss) Reclassified from AOCL into Income Interest rate swaps $ 1,712 Interest Expense $ (176 ) Foreign currency contracts $ (224 ) Cost of Sales $ — The effects of derivative instruments not designated as hedging instruments on the statement of income for the three months ended March 31, 2018 were as follows: Derivatives Not Designated as Hedging Instruments Location of Gain (Loss) Recognized in Income on Derivative Gains (Losses) Foreign exchange forward contracts Other operating income (expense), net $ (3,129 ) The after-tax amounts of unrealized gains (losses) in AOCL related to hedge derivatives at March 31, 2018 and December 31, 2017 are presented below: March 31, 2018 December 31, 2017 Interest rate cash flow hedges $ 2,057 $ 619 Foreign currency cash flow hedges (166 ) — The amount of future reclassifications from AOCL will fluctuate with movements in the underlying markets. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following table presents the carrying amount, estimated fair values and categorization under the fair value hierarchy for financial instruments held by the Company at March 31, 2018 and December 31, 2017 , using market information and what management believes to be appropriate valuation methodologies: March 31, 2018 December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value Assets: Level 1 Level 2 Level 1 Level 2 Cash and cash equivalents $ 89,076 $ 89,076 $ — $ 96,235 $ 96,235 $ — Interest rate swaps (a) 2,637 — 2,637 749 — 749 Foreign currency forward contracts (a) — — — 427 — 427 Liabilities (b): Foreign currency forward contracts (a) 254 — 254 — — — Fixed-rate long-term debt 603,530 — 603,275 606,529 — 611,308 Variable-rate long-term debt 630,786 — 634,894 631,666 — 635,946 (a) These items represent derivative instruments. (b) Liabilities exclude capital lease obligation. The Company uses the following methods and assumptions in estimating the fair value of its financial instruments: Cash and cash equivalents — The carrying amount is equal to fair market value. Derivative instruments — The fair value is calculated based on standard valuation models using quoted prices and market observable data of similar instruments. The interest rate derivatives are based on the LIBOR swap rate, which is observable at commonly quoted intervals for the full term of the swap and therefore is considered Level 2. The foreign currency derivatives are contracts to buy foreign currency at a fixed rate on a specified future date. The foreign exchange rate is observable for the full term of the swap and is therefore considered Level 2. See Note 7 — Derivative Instruments for additional information related to the derivative instruments. Debt — The fair value of fixed rate debt is based upon quoted market prices for debt with similar terms and maturities. The variable rate debt adjusts with changes in the market rate, therefore the carrying value approximates fair value. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss was comprised of the following: Three Months Ended March 31, 2018 March 25, 2017 Unrecognized components of employee benefit plans, net of tax: Balance, beginning of year $ (81,638 ) $ (110,080 ) Other comprehensive gain (loss) before reclassifications — — Income tax on other comprehensive loss — — Reclassifications to earnings: (a) Amortization of losses 2,969 2,996 Amortization of prior service costs 143 190 Amortization of negative plan amendment (38 ) (38 ) Income tax on reclassifications (677 ) (1,118 ) Net comprehensive gain (loss) on employee benefit plans, net of tax 2,397 2,030 Balance, end of quarter (79,241 ) (108,050 ) Unrealized gain on derivative instruments, net of tax: Balance, beginning of year 619 — Other comprehensive income before reclassifications 1,488 — Income tax on other comprehensive income (353 ) — Reclassifications to earnings: (b) Interest rate contracts 176 — Foreign exchange contracts — — Income tax on reclassifications (39 ) — Net comprehensive gain on derivative instruments, net of tax 1,272 — Balance, end of quarter 1,891 — Foreign currency translation adjustments: Balance, beginning of year 4,868 — Foreign currency translation adjustment 7,749 — Balance, end of quarter 12,617 — Accumulated other comprehensive loss, end of quarter $ (64,733 ) $ (108,050 ) (a) The AOCL components for defined benefit pension and post-retirement plans are included in the computation of net periodic pension cost. See Note 12 — Employee Benefit Plans for additional information. (b) Reclassifications of interest rate contracts are recorded in interest expense, and reclassifications of foreign currency exchange contracts are recorded in other operating income. Additional details about the reclassifications related to derivative instruments are included in Note 7 — Derivative Instruments . |
Earnings Per Share of Common St
Earnings Per Share of Common Stock | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share of Common Stock | Earnings Per Share of Common Stock The following table provides details of the calculations of basic and diluted earnings per share: Three Months Ended March 31, 2018 March 25, 2017 Net income $ 24,455 $ 9,642 Preferred Stock dividends (3,403 ) (3,176 ) Net income available for common stockholders $ 21,052 $ 6,466 Shares used for determining basic earnings per share of common stock 51,127,726 42,348,148 Dilutive effect of: Stock options 5,669 — Performance and restricted stock 1,472,839 748,212 Preferred stock 11,371,718 — Shares used for determining diluted earnings per share of common stock 63,977,952 43,096,360 Basic earnings per share (not in thousands) $ 0.41 $ 0.15 Diluted earnings per share (not in thousands) $ 0.38 $ 0.15 Anti-dilutive instruments excluded from the computation of diluted earnings per share: Three Months Ended March 31, 2018 March 25, 2017 Stock options 288,464 386,164 Performance and restricted stock 363 245,536 Preferred stock — 13,198,148 Total anti-dilutive instruments 288,827 13,829,848 |
Incentive Stock Plans
Incentive Stock Plans | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Incentive Stock Plans | Incentive Stock Plans The Company’s total stock based compensation cost for the three months ended March 31, 2018 and March 25, 2017 was $2 million and $2 million , respectively. The Company made new grants of restricted stock units and performance-based stock units to certain employees during the first three months of 2018 . The 2018 restricted stock unit awards vest over three years. The 2018 performance-based stock unit awards are measured against an internal return on invested capital target and a synergy target set in connection with the 2017 acquisition of Tembec, Inc. Depending on performance against the targets, the awards will pay out in common stock amounts between 0 and 200 percent of the performance-based stock units awarded. The total number of common stock awards granted will be adjusted up or down 25 percent , for certain participants, based on stock price performance relative to a peer group over the term of the plan, which could result in a final common stock issuance of 0 to 250 percent of the performance-based stock units awarded. In March 2018 , the performance-based share units granted in 2015 were settled at an average of 152 percent of the performance-based stock units awarded, resulting in the issuance of approximately 288,703 shares of common stock. The following table summarizes the activity on the Company’s incentive stock awards for the three months ended March 31, 2018 : Stock Options Restricted Stock and Stock Units Performance-Based Stock Units Options Weighted Average Exercise Price Awards Weighted Average Grant Date Fair Value Awards Weighted Average Grant Date Fair Value Outstanding at January 1, 2018 373,058 $ 32.25 848,371 $ 12.47 1,080,067 $ 11.58 Granted — — 221,092 20.39 446,654 22.77 Forfeited — — (4,307 ) 11.17 (3,646 ) 11.43 Exercised or settled (7,293 ) 17.34 (153,919 ) 19.23 (190,320 ) 17.50 Expired or cancelled (40,976 ) 27.56 — — — — Outstanding at March 31, 2018 324,789 $ 33.20 911,237 $ 10.97 1,332,755 $ 14.65 |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The Company has defined benefit pension and other postretirement plans covering certain union and non-union employees, primarily in the U.S., Canada and France. The defined benefit pension plans are closed to new participants. Employee defined benefit plan liabilities are calculated using actuarial estimates and management assumptions. These estimates are based on historical information, along with certain assumptions about future events. The net periodic benefit costs from defined benefit plans that have been recorded are shown in the following table: Pension Postretirement Three Months Ended Three Months Ended March 31, 2018 March 25, 2017 March 31, 2018 March 25, 2017 Service cost $ 3,099 $ 1,184 $ 742 $ 236 Interest cost 8,255 3,318 335 198 Expected return on plan assets (13,858 ) (5,548 ) — — Amortization of prior service cost 143 190 — — Amortization of losses 2,912 2,913 57 83 Amortization of negative plan amendment — — (38 ) (38 ) Total net periodic benefit cost $ 551 $ 2,057 $ 1,096 $ 479 Service cost is included in cost of sales and selling, general and administrative expenses in the statements of income, as appropriate. Interest cost, expected return on plan assets, amortization of prior service cost, amortization of losses and amortization of negative plan amendment are included in other components of net periodic benefit costs on the condensed consolidated statement of income. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective tax rate for the three months ended March 31, 2018 and March 25, 2017 was 28.7 percent and 45.3 percent , respectively. The rate in 2018 differs materially from 2017 due to the U.S. passing of “H.R. 1” (the “Tax Act”), which included, among other material changes, a federal rate reduction from 35 percent to 21 percent . The 2018 effective tax rate differs from the federal statutory rate of 21 percent primarily due to differences in statutory rates from foreign operations, which increased the effective tax rate by 3.9 percent , the U.S. inclusion of Global Intangible Low-Taxed Income (“GILTI”) (an increase of 1.3 percent ), nondeductible executive compensation (an increase of 1.7 percent ), and nondeductible foreign losses (an increase of 1.5 percent ), partially offset by a return to accrual adjustment related to nondeductible deal costs recognized in 2017 (an decrease of 1.4 percent ). The Company has the option to either treat taxes due on future GILTI income as a current period expense when incurred (the “period cost method”) or factor in such amounts in the Company’s measurement of its deferred taxes (the “deferred method”). As of the quarter ended March 31, 2018, the Company has not made a policy decision regarding how to record taxes on GILTI. Due to significant complexity of the Tax Act, the Company has not completed all accounting for the income tax effects of certain elements of the Tax Act. Where possible, the Company made reasonable estimates of certain effects and therefore recorded provisional adjustments to the income tax expense on December 31, 2017. Implementation guidance from the Internal Revenue Service, clarifications of state tax law, and completion of the Company’s 2017 tax return filings could all impact these estimates. There have been no material changes to the balance of unrecognized tax benefits reported at December 31, 2017. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company has currently divided its operations into five reportable segments: High Purity Cellulose, Forest Products, Pulp, Paper and Corporate. The Corporate operations consist primarily of senior management, accounting, information systems, human resources, treasury, tax and legal administrative functions that provide support services to the operating business units. The Company does not currently allocate the cost of maintaining these support functions to its operating units. The Company evaluates the performance of its segments based on operating income. Intersegment sales consist primarily of wood chips sales from Forest Products to High Purity Cellulose, Pulp and Paper segments and high-yield pulp sales from Pulp to Paper. Intersegment sales prices are at rates that approximate market. Net sales, disaggregated by product-line, was comprised of the following for the three months ended : March 31, 2018 March 25, 2017 High Purity Cellulose Cellulose Specialties $ 209,127 $ 156,899 Commodity Products 42,747 42,086 Other sales (a) 30,509 2,430 Total High Purity Cellulose 282,383 201,415 Forest Products Lumber 78,380 — Other sales (b) 20,806 — Total Forest Products 99,186 — Pulp High-yield pulp 85,155 — Paper Paperboard 47,791 — Newsprint 27,516 — Total Paper 75,307 — Eliminations (20,039 ) — Total net sales $ 521,992 $ 201,415 (a) Other sales include sales of electricity, resins, lignin and other by-products to third-parties (b) Other sales include sales of logs, wood chips, and other by-products to other segments and third-parties Operating income by segment was comprised of the following for the three months ended : March 31, 2018 March 25, 2017 High Purity Cellulose $ 21,311 $ 34,496 Forest Products 10,637 — Pulp 22,711 — Paper 2,926 — Corporate (11,328 ) (7,415 ) Total operating income $ 46,257 $ 27,081 Identifiable assets by segment were as follows: March 31, 2018 December 31, 2017 High Purity Cellulose $ 1,699,763 $ 1,671,107 Forest Products 193,065 154,258 Pulp 88,115 83,081 Paper 248,000 245,746 Corporate 465,106 488,419 Total identifiable assets $ 2,694,049 $ 2,642,611 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments The following table includes the material additions of energy purchase contracts to the contractual financial obligations presented in Note 20 - Commitments and Contingencies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 , as filed with the SEC. The future minimum payments under these energy purchase obligations are presented as of March 31, 2018 . The payment amounts are estimates and may vary based on changes in actual price and volumes terms. Purchase Obligations 2018 $ 16,755 2019 1,696 2020 1,696 2021 — 2022 — Thereafter — Total $ 20,147 Contingencies The Company is engaged in various legal and regulatory actions and proceedings, and has been named as a defendant in various lawsuits and claims arising in the ordinary course of its business. While the Company has procured reasonable and customary insurance covering risks normally occurring in connection with its businesses, the Company has in certain cases retained some risk through the operation of self-insurance, primarily in the areas of workers’ compensation, property insurance and general liability. These other lawsuits and claims, either individually or in aggregate, are not expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows. As of March 31, 2018 , collective bargaining agreements covering approximately 650 unionized employees had expired. In all cases, the parties have continued to work under the terms of the expired contracts while negotiations continue. While there can be no assurances, the Company expects to reach agreements with its unions. However, a work stoppage could have a material adverse effect on its business, results of operations and financial condition. Guarantees and Other The Company provides financial guarantees as required by creditors, insurance programs and various governmental agencies. As of March 31, 2018 , the Company had $64 million of various standby letters of credit, primarily for financial assurance relating to environmental remediation, credit support for natural gas and electricity purchases, and guarantees related to foreign retirement plan obligations. These standby letters of credit represent a contingent liability. The Company would only be liable upon its default on the related payment obligations. The letters of credit have various expiration dates and will be renewed as required. The Company had surety bonds of $85 million as of March 31, 2018 , primarily to comply with financial assurance requirements relating to environmental remediation and post closure care, to provide collateral for the Company’s workers’ compensation program, and to guarantee taxes and duties for products shipped internationally. These surety bonds expire at various dates and are expected to be renewed annually as required. LignoTech Florida, a venture in which the Company owns 45 percent and its venture partner Borregaard ASA owns 55 percent , entered into a construction contract to build its lignin manufacturing facility, which is expected to begin operations in mid-2018. The Company is a guarantor under the contract and is jointly and severally liable for payment of costs incurred to construct the facility. In the event of default, the Company expects it would only be liable for its proportional share as a result of an agreement with its venture partner. The remaining guarantee related to LignoTech Florida at March 31, 2018 was $31 million . The Company has not recorded any liabilities for these financial guarantees in its consolidated balance sheets, either because the Company has recorded the underlying liability associated with the guarantee or the guarantee is dependent on the Company’s own performance and, therefore, is not subject to the measurement requirements or because the Company has calculated the estimated fair value of the guarantee and determined it to be immaterial based upon the current facts and circumstances that would trigger a payment obligation. It is not possible to determine the maximum potential amount of the liability under these potential obligations due to the unique set of facts and circumstances likely to be involved with each provision. |
Supplemental Disclosures of Cas
Supplemental Disclosures of Cash Flows Information | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosures of Cash Flows Information | Supplemental Disclosures of Cash Flows Information Supplemental disclosures of cash flows information was comprised of the following for the three months ended: March 31, 2018 March 25, 2017 Cash paid (received) during the period: Interest $ 7,678 $ 1,775 Income taxes 6,567 11 Non-cash investing and financing activities: Capital assets purchased on account $ 14,053 $ 4,780 Capital lease obligation 3,340 3,611 |
Basis of Presentation and New22
Basis of Presentation and New Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements and notes thereto of Rayonier Advanced Materials Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, these financial statements and notes reflect all adjustments (all of which are normal recurring adjustments) necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. These statements and notes should be read in conjunction with the financial statements and supplementary data included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 , as filed with the SEC. |
New or Recently Adopted Accounting Pronouncements | New Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases. The update requires entities to recognize assets and liabilities arising from finance and operating leases and to classify those finance and operating lease payments in the financing or operating sections, respectively, of the statement of cash flows. It is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company is evaluating the impact of this standard on its consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Tax Effects from AOCI . This guidance permits the reclassification of certain pension or other post employment benefit dangling debits and credits (“dangles”) from Accumulated Other Comprehensive Income (“AOCI”) to retained earnings. The applicable dangles are those recorded as a result of H.R.1, passed on December 22, 2017 (the "Tax Cuts and Jobs Act"), which reduced the U.S. federal tax rate applicable to the Company. The ASU is effective for fiscal years beginning after December 15, 2018 with early adoption permitted. The Company has approximately $22 million in applicable dangling debits recorded in AOCI and has not yet determined whether or not it will reclassify this amount. Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , as amended and/or clarified by ASU Nos. 2016-08, 2016-10, 2016-12, and 2016-20, a comprehensive new revenue recognition standard. The core principle is that a company should recognize revenue when it transfers control of goods or services to customers for an amount that reflects the consideration to which the company expects to be entitled to in exchange for those goods or services. The Company adopted the standard on a modified retrospective basis in the first quarter of 2018, generally recognizing revenue when it transfers control at a point in time. The adoption did not have a material impact to the individual financial statement line items on the Company’s consolidated financial statements because the new standard is not materially different than its previous revenue recognition practices. The following is a discussion of our revenue recognition policy effective January 1, 2018. Accounting Policy Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied. The majority of the Company's contracts have a single performance obligation to transfer products. Accordingly, the Company recognizes revenue when title and risk of loss have been transferred to the customer. Generally, title passes upon delivery to the customer at the agreed upon location. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products and is generally based upon contractual arrangements with customers or published indices. The Company sells its products both directly to customers and through distributors and agents typically under agreements with payment terms less than 90 days. The Company has elected to account for shipping and handling as activities to fulfill the promise to transfer the goods. As such, shipping and handling costs incurred are recorded in cost of sales. The Company has elected to exclude from net sales any value add, sales and other taxes which it collects concurrent with revenue-producing activities. These accounting policy elections are consistent with the manner in which the Company historically recorded shipping and handling fees and taxes. Contract Estimates The nature of certain of the Company's contracts gives rise to variable consideration, which may be constrained, including volume-based rebates to certain customers. The Company issues rebates to customers when they purchase a certain volume level, primarily retrospective volume-based rebates, which are applied retroactively to prior purchases. The Company estimates the level of volumes based on anticipated purchases at the beginning of the period and records a rebate accrual for each purchase toward the requisite rebate volume. These estimated rebates are included in the transaction price of the Company's contracts with customers as a reduction to net sales and are included in accrued customer incentives and prepayments in the consolidated balance sheets (see Note 4 - Accrued and Other Current Liabilities ). This methodology is consistent with the manner in which the Company historically estimated and recorded volume-based rebates. The majority of the Company's revenue is derived from contracts (i) with an original expected length of one year or less and (ii) for which it recognizes revenue at the amount in which it has the right to invoice as product is delivered. The Company has elected the practical expedient not to disclose the value of remaining performance obligations associated with these types of contracts. The Company has certain contracts which contain performance obligations which are not significant in the context of the contract with the customer. The Company has elected the practical expedient not to assess whether these promised goods or services are performance obligations. Contract Balances Contract liabilities primarily relate to prepayments received from the Company's customers before revenue is recognized and volume rebates payable to customers. These amounts are included in accrued customer incentives and prepayments in the consolidated balance sheets (see Note 4 - Accrued and Other Current Liabilities ). The Company does not have any material contract assets as of March 31, 2018. Disaggregated Revenue In general, the Company's product-lines within its segments are aligned according to the nature and economic characteristics of its products and customer relationships and provide meaningful disaggregation of each business segment's results of operations. Disaggregation of net sales by business segment and product-line are included in Note 14 - Segment Information . Recently Adopted Accounting Pronouncements In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments . The update was issued to reduce diversity in practice regarding the presentation of eight specific types of cash receipts and cash payments in the statement of cash flows. The update is effective for fiscal years beginning after December 15, 2017. The Company adopted the update as of January 1, 2018. The adoption did not have a material impact on the Company’s consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits. The update was issued to improve the presentation of net periodic pension and post retirement benefit cost. The Company adopted the provisions of this guidance in the first quarter of 2018 using the retrospective method. As a result of this update, the Company presented the components of periodic pension and post retirement costs, other than service costs, separately outside of operating income in “Other components of net periodic benefit costs” on the condensed consolidated statement of income. The Company presented the service costs component of net periodic benefit cost in cost of sales and selling, general and administrative expense, which correlates with the related employee compensation costs arising from services rendered during the period. Also in accordance with the new guidance, only the service cost component of the net periodic benefit cost are eligible for capitalization in assets. The update resulted in a change to previously reported amounts, with an increase in operating income of $1 million for the first quarter of 2017 , which was offset by a corresponding increase in other components of net periodic benefits costs of $1 million , reflecting the impact of presenting interest cost, expected return on plan assets, amortization of prior service costs and actuarial gains and losses components in non-operating income. The adoption of this guidance had no impact on previously reported earnings or net income. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation. The update provides guidance on how to account for changes to the terms or conditions of stock compensation awards. It is effective for fiscal years beginning after December 15, 2017. The Company adopted the update as of January 1, 2018. The adoption did not have a material impact on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The update provides guidance to better align the financial reporting for hedging activities with the economic objectives of those activities. For public business entities, it is effective for fiscal years beginning after December 15, 2018, with early adoption, including adoption in an interim period, permitted. The update requires a modified retrospective transition method which will result in the recognition of a cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the date of adoption. The Company elected to early adopt the new guidance as of January 1, 2018. The adoption did not have a material impact on the Company’s consolidated financial statements. |
Fair Value Measurements | The Company uses the following methods and assumptions in estimating the fair value of its financial instruments: Cash and cash equivalents — The carrying amount is equal to fair market value. Derivative instruments — The fair value is calculated based on standard valuation models using quoted prices and market observable data of similar instruments. The interest rate derivatives are based on the LIBOR swap rate, which is observable at commonly quoted intervals for the full term of the swap and therefore is considered Level 2. The foreign currency derivatives are contracts to buy foreign currency at a fixed rate on a specified future date. The foreign exchange rate is observable for the full term of the swap and is therefore considered Level 2. See Note 7 — Derivative Instruments for additional information related to the derivative instruments. Debt — The fair value of fixed rate debt is based upon quoted market prices for debt with similar terms and maturities. The variable rate debt adjusts with changes in the market rate, therefore the carrying value approximates fair value. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | As of March 31, 2018 and December 31, 2017 , the Company’s accounts receivable included the following: March 31, 2018 December 31, 2017 Accounts receivable, trade $ 142,944 $ 134,523 Accounts receivable, other (a) 38,137 47,368 Allowance for doubtful accounts (811 ) (593 ) Total accounts receivable, net $ 180,270 $ 181,298 (a) Accounts receivable, other consists primarily of value added/consumption taxes, grants receivable and accrued billings due from government agencies. |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | As of March 31, 2018 and December 31, 2017 , the Company’s inventory included the following: March 31, 2018 December 31, 2017 Finished goods $ 213,809 $ 190,140 Work-in-progress 18,826 18,889 Raw materials 114,808 82,940 Manufacturing and maintenance supplies 10,706 10,117 Total inventory $ 358,149 $ 302,086 |
Accrued and Other Current Lia25
Accrued and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued and Other Current Liabilities | As of March 31, 2018 and December 31, 2017 , the Company’s accrued and other liabilities included the following: March 31, 2018 December 31, 2017 Accrued customer incentives and prepayments $ 44,311 $ 53,522 Accrued payroll and benefits 40,585 48,431 Accrued interest 10,323 3,188 Other current liabilities 27,820 21,899 Total accrued and other liabilities $ 123,039 $ 127,040 |
Debt and Capital Leases (Tables
Debt and Capital Leases (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | As of March 31, 2018 and December 31, 2017 , the Company’s debt and capital leases include the following: March 31, 2018 December 31, 2017 U.S. Revolver of $100 million maturing in November 2022, $92 million available after taking into account outstanding letters of credit, bearing interest at LIBOR plus 2.25% at March 31, 2018 $ — $ — Multi-currency Revolver of $150 million maturing in November 2022, $125 million available after taking into account outstanding letters of credit, bearing interest at LIBOR plus 2.25% at March 31, 2018 — — Term A-1 Loan Facility borrowings maturing through November 2022 bearing interest at LIBOR plus 2.25%, interest rate of 4.12% at March 31, 2018 180,000 180,000 Term A-2 Loan Facility borrowings maturing through November 2024 bearing interest at LIBOR plus 2.00 (after consideration of 0.50% patronage benefit), interest rate of 4.37% at March 31, 2018 448,875 450,000 Senior Notes due 2024 at a fixed interest rate of 5.50% 506,412 506,412 Canadian dollar, fixed interest rate term loans with rates ranging from 5.50% to 6.86% and maturity dates ranging from March 2020 through April 2028, secured by certain assets of the Temiscaming plant 98,039 100,881 Other loans 6,018 5,946 Capital Lease obligation 3,340 3,409 Total principal payments due 1,242,684 1,246,648 Less: debt premium, original issue discount and issuance costs (5,029 ) (5,044 ) Total debt 1,237,655 1,241,604 Less: Current maturities of long-term debt (11,274 ) (9,425 ) Long-term debt $ 1,226,381 $ 1,232,179 |
Schedule of Maturities of Long-term Debt | As of March 31, 2018 , debt and capital lease payments due during the next five years and thereafter are as follows: Capital Lease Minimum Lease Payments Less: Interest Net Present Value Debt Principal Payments Remaining 2018 $ 386 $ 170 $ 216 $ 6,912 2019 515 209 306 18,137 2020 515 187 328 23,227 2021 515 163 352 14,555 2022 515 138 377 208,737 Thereafter 2,018 257 1,761 967,776 Total principal payments $ 4,464 $ 1,124 $ 3,340 $ 1,239,344 |
Liabilities for Disposed Oper27
Liabilities for Disposed Operations (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Environmental Remediation Obligations [Abstract] | |
Schedule of Liabilities for Disposed Operations | An analysis of the liabilities for disposed operations for the three months ended March 31, 2018 is as follows: Balance, December 31, 2017 $ 164,086 Expenditures charged to liabilities (1,774 ) Increase to liabilities 285 Balance, March 31, 2018 162,597 Less: Current portion (13,453 ) Non-current portion $ 149,144 |
Derivatives Instruments (Tables
Derivatives Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The notional amounts and maturity dates of outstanding derivative instruments as of March 31, 2018 are presented below. The Company did not use any derivative instruments during the three months ended March 25, 2017 . Maturity Date Notional Amount Interest Rate Swaps December 29, 2020 $ 200,000 Foreign Exchange Forward Contracts Monthly through June 2018 $ 147,634 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair values of derivative instruments included in the consolidated balance sheet as of March 31, 2018 and December 31, 2017 are provided in the below table. See Note 8 — Fair Value Measurements for additional information related to the Company’s derivatives. Balance Sheet Location March 31, 2018 December 31, 2017 Assets: Derivatives designated as hedging instruments: Interest rate swaps Other current assets $ 389 $ — Interest rate swaps Other assets 2,248 749 Derivatives not designated as hedging instruments: Foreign exchange forward contracts Other current assets — 427 Liabilities: Derivatives designated as hedging instruments: Foreign exchange forward contracts Other current liabilities (224 ) — Derivatives not designated as hedging instruments: Foreign exchange forward contracts Other current liabilities (30 ) — Total derivatives $ 2,383 $ 1,176 |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The effects of derivative instruments designated as cash flow hedges, the related changes in AOCL and the gains and losses in income for the three months ended March 31, 2018 were as follows: Derivatives in Cash Flow Hedging Relationships Gain (Loss) Recognized in OCI on Derivative Gain (Loss) Reclassified from AOCL into Income Interest rate swaps $ 1,712 Interest Expense $ (176 ) Foreign currency contracts $ (224 ) Cost of Sales $ — |
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The effects of derivative instruments not designated as hedging instruments on the statement of income for the three months ended March 31, 2018 were as follows: Derivatives Not Designated as Hedging Instruments Location of Gain (Loss) Recognized in Income on Derivative Gains (Losses) Foreign exchange forward contracts Other operating income (expense), net $ (3,129 ) |
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The after-tax amounts of unrealized gains (losses) in AOCL related to hedge derivatives at March 31, 2018 and December 31, 2017 are presented below: March 31, 2018 December 31, 2017 Interest rate cash flow hedges $ 2,057 $ 619 Foreign currency cash flow hedges (166 ) — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | The following table presents the carrying amount, estimated fair values and categorization under the fair value hierarchy for financial instruments held by the Company at March 31, 2018 and December 31, 2017 , using market information and what management believes to be appropriate valuation methodologies: March 31, 2018 December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value Assets: Level 1 Level 2 Level 1 Level 2 Cash and cash equivalents $ 89,076 $ 89,076 $ — $ 96,235 $ 96,235 $ — Interest rate swaps (a) 2,637 — 2,637 749 — 749 Foreign currency forward contracts (a) — — — 427 — 427 Liabilities (b): Foreign currency forward contracts (a) 254 — 254 — — — Fixed-rate long-term debt 603,530 — 603,275 606,529 — 611,308 Variable-rate long-term debt 630,786 — 634,894 631,666 — 635,946 (a) These items represent derivative instruments. (b) Liabilities exclude capital lease obligation. |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss was comprised of the following: Three Months Ended March 31, 2018 March 25, 2017 Unrecognized components of employee benefit plans, net of tax: Balance, beginning of year $ (81,638 ) $ (110,080 ) Other comprehensive gain (loss) before reclassifications — — Income tax on other comprehensive loss — — Reclassifications to earnings: (a) Amortization of losses 2,969 2,996 Amortization of prior service costs 143 190 Amortization of negative plan amendment (38 ) (38 ) Income tax on reclassifications (677 ) (1,118 ) Net comprehensive gain (loss) on employee benefit plans, net of tax 2,397 2,030 Balance, end of quarter (79,241 ) (108,050 ) Unrealized gain on derivative instruments, net of tax: Balance, beginning of year 619 — Other comprehensive income before reclassifications 1,488 — Income tax on other comprehensive income (353 ) — Reclassifications to earnings: (b) Interest rate contracts 176 — Foreign exchange contracts — — Income tax on reclassifications (39 ) — Net comprehensive gain on derivative instruments, net of tax 1,272 — Balance, end of quarter 1,891 — Foreign currency translation adjustments: Balance, beginning of year 4,868 — Foreign currency translation adjustment 7,749 — Balance, end of quarter 12,617 — Accumulated other comprehensive loss, end of quarter $ (64,733 ) $ (108,050 ) (a) The AOCL components for defined benefit pension and post-retirement plans are included in the computation of net periodic pension cost. See Note 12 — Employee Benefit Plans for additional information. (b) Reclassifications of interest rate contracts are recorded in interest expense, and reclassifications of foreign currency exchange contracts are recorded in other operating income. Additional details about the reclassifications related to derivative instruments are included in Note 7 — Derivative Instruments . |
Earnings Per Share of Common 31
Earnings Per Share of Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table provides details of the calculations of basic and diluted earnings per share: Three Months Ended March 31, 2018 March 25, 2017 Net income $ 24,455 $ 9,642 Preferred Stock dividends (3,403 ) (3,176 ) Net income available for common stockholders $ 21,052 $ 6,466 Shares used for determining basic earnings per share of common stock 51,127,726 42,348,148 Dilutive effect of: Stock options 5,669 — Performance and restricted stock 1,472,839 748,212 Preferred stock 11,371,718 — Shares used for determining diluted earnings per share of common stock 63,977,952 43,096,360 Basic earnings per share (not in thousands) $ 0.41 $ 0.15 Diluted earnings per share (not in thousands) $ 0.38 $ 0.15 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Anti-dilutive instruments excluded from the computation of diluted earnings per share: Three Months Ended March 31, 2018 March 25, 2017 Stock options 288,464 386,164 Performance and restricted stock 363 245,536 Preferred stock — 13,198,148 Total anti-dilutive instruments 288,827 13,829,848 |
Incentive Stock Plans (Tables)
Incentive Stock Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Activity for Incentive Stock Awards | The following table summarizes the activity on the Company’s incentive stock awards for the three months ended March 31, 2018 : Stock Options Restricted Stock and Stock Units Performance-Based Stock Units Options Weighted Average Exercise Price Awards Weighted Average Grant Date Fair Value Awards Weighted Average Grant Date Fair Value Outstanding at January 1, 2018 373,058 $ 32.25 848,371 $ 12.47 1,080,067 $ 11.58 Granted — — 221,092 20.39 446,654 22.77 Forfeited — — (4,307 ) 11.17 (3,646 ) 11.43 Exercised or settled (7,293 ) 17.34 (153,919 ) 19.23 (190,320 ) 17.50 Expired or cancelled (40,976 ) 27.56 — — — — Outstanding at March 31, 2018 324,789 $ 33.20 911,237 $ 10.97 1,332,755 $ 14.65 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Schedule of Net Pension and Postretirement Benefit Costs | The net periodic benefit costs from defined benefit plans that have been recorded are shown in the following table: Pension Postretirement Three Months Ended Three Months Ended March 31, 2018 March 25, 2017 March 31, 2018 March 25, 2017 Service cost $ 3,099 $ 1,184 $ 742 $ 236 Interest cost 8,255 3,318 335 198 Expected return on plan assets (13,858 ) (5,548 ) — — Amortization of prior service cost 143 190 — — Amortization of losses 2,912 2,913 57 83 Amortization of negative plan amendment — — (38 ) (38 ) Total net periodic benefit cost $ 551 $ 2,057 $ 1,096 $ 479 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Net sales, disaggregated by product-line, was comprised of the following for the three months ended : March 31, 2018 March 25, 2017 High Purity Cellulose Cellulose Specialties $ 209,127 $ 156,899 Commodity Products 42,747 42,086 Other sales (a) 30,509 2,430 Total High Purity Cellulose 282,383 201,415 Forest Products Lumber 78,380 — Other sales (b) 20,806 — Total Forest Products 99,186 — Pulp High-yield pulp 85,155 — Paper Paperboard 47,791 — Newsprint 27,516 — Total Paper 75,307 — Eliminations (20,039 ) — Total net sales $ 521,992 $ 201,415 (a) Other sales include sales of electricity, resins, lignin and other by-products to third-parties (b) Other sales include sales of logs, wood chips, and other by-products to other segments and third-parties Operating income by segment was comprised of the following for the three months ended : March 31, 2018 March 25, 2017 High Purity Cellulose $ 21,311 $ 34,496 Forest Products 10,637 — Pulp 22,711 — Paper 2,926 — Corporate (11,328 ) (7,415 ) Total operating income $ 46,257 $ 27,081 Identifiable assets by segment were as follows: March 31, 2018 December 31, 2017 High Purity Cellulose $ 1,699,763 $ 1,671,107 Forest Products 193,065 154,258 Pulp 88,115 83,081 Paper 248,000 245,746 Corporate 465,106 488,419 Total identifiable assets $ 2,694,049 $ 2,642,611 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase Obligations | The payment amounts are estimates and may vary based on changes in actual price and volumes terms. Purchase Obligations 2018 $ 16,755 2019 1,696 2020 1,696 2021 — 2022 — Thereafter — Total $ 20,147 |
Supplemental Disclosures of C36
Supplemental Disclosures of Cash Flows Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Supplemental disclosures of cash flows information was comprised of the following for the three months ended: March 31, 2018 March 25, 2017 Cash paid (received) during the period: Interest $ 7,678 $ 1,775 Income taxes 6,567 11 Non-cash investing and financing activities: Capital assets purchased on account $ 14,053 $ 4,780 Capital lease obligation 3,340 3,611 |
Basis of Presentation and New37
Basis of Presentation and New Accounting Pronouncements (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 10, 2018 | Mar. 31, 2018 | Mar. 25, 2017 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | $ 46,257 | $ 27,081 | ||
Other components of net periodic benefit costs | $ (2,194) | $ 1,116 | ||
Common stock dividend declared (in dollars per share) | $ 0.07 | $ 0.07 | ||
Subsequent Event | Convertible Preferred Stock | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Convertible preferred stock dividend declared (in dollars per share) | $ 2 | |||
Accounting Standards Update 2017-07 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | $ 1,000 | |||
Other components of net periodic benefit costs | 1,000 | |||
Unrecognized components of employee benefit plans, net of tax | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Reclassification of tax effects from AOCI | $ 677 | $ 1,118 | ||
Unrecognized components of employee benefit plans, net of tax | Scenario, Forecast | New Accounting Pronouncement, Early Adoption, Effect | Accounting Standards Update 2018-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Reclassification of tax effects from AOCI | $ 22,000 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful accounts | $ (811) | $ (593) |
Total accounts receivable, net | 180,270 | 181,298 |
Accounts receivable, trade | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable, gross | 142,944 | 134,523 |
Accounts receivable, other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable, gross | $ 38,137 | $ 47,368 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 213,809 | $ 190,140 |
Work-in-progress | 18,826 | 18,889 |
Raw materials | 114,808 | 82,940 |
Manufacturing and maintenance supplies | 10,706 | 10,117 |
Total inventory | $ 358,149 | $ 302,086 |
Accrued and Other Current Lia40
Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accrued customer incentives and prepayments | $ 44,311 | $ 53,522 |
Accrued payroll and benefits | 40,585 | 48,431 |
Accrued interest | 10,323 | 3,188 |
Other current liabilities | 27,820 | 21,899 |
Total accrued and other liabilities | $ 123,039 | $ 127,040 |
Debt and Capital Leases - Summa
Debt and Capital Leases - Summary of Debt (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Debt, gross | $ 1,239,344,000 | |
Capital Lease obligation | 3,340,000 | $ 3,409,000 |
Total principal payments due | 1,242,684,000 | 1,246,648,000 |
Less: debt premium, original issue discount and issuance costs | (5,029,000) | (5,044,000) |
Total debt | 1,237,655,000 | 1,241,604,000 |
Less: Current maturities of long-term debt | (11,274,000) | (9,425,000) |
Long-term debt | 1,226,381,000 | 1,232,179,000 |
Credit Facility | U.S. Revolver of $100 million maturing in November 2022, $92 million available after taking into account outstanding letters of credit, bearing interest at LIBOR plus 2.25% at March 31, 2018 | ||
Debt Instrument [Line Items] | ||
Borrowing capacity | 100,000,000 | |
Borrowing capacity after outstanding letters of credit | 92,000,000 | |
Debt, gross | $ 0 | 0 |
Credit Facility | U.S. Revolver of $100 million maturing in November 2022, $92 million available after taking into account outstanding letters of credit, bearing interest at LIBOR plus 2.25% at March 31, 2018 | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread | 2.25% | |
Credit Facility | Multi-currency Revolver of $150 million maturing in November 2022, $125 million available after taking into account outstanding letters of credit, bearing interest at LIBOR plus 2.25% at March 31, 2018 | ||
Debt Instrument [Line Items] | ||
Borrowing capacity | $ 150,000,000 | |
Borrowing capacity after outstanding letters of credit | 125,000,000 | |
Debt, gross | $ 0 | 0 |
Credit Facility | Multi-currency Revolver of $150 million maturing in November 2022, $125 million available after taking into account outstanding letters of credit, bearing interest at LIBOR plus 2.25% at March 31, 2018 | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread | 2.25% | |
Term Loan Facility | Term A-1 Loan Facility borrowings maturing through November 2022 bearing interest at LIBOR plus 2.25%, interest rate of 4.12% at March 31, 2018 | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.12% | |
Debt, gross | $ 180,000,000 | 180,000,000 |
Term Loan Facility | Term A-1 Loan Facility borrowings maturing through November 2022 bearing interest at LIBOR plus 2.25%, interest rate of 4.12% at March 31, 2018 | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread | 2.25% | |
Term Loan Facility | Term A-2 Loan Facility borrowings maturing through November 2024 bearing interest at LIBOR plus 2.00 (after consideration of 0.50% patronage benefit), interest rate of 4.37% at March 31, 2018 | ||
Debt Instrument [Line Items] | ||
Patronage benefit | 0.50% | |
Interest rate | 4.37% | |
Debt, gross | $ 448,875,000 | 450,000,000 |
Term Loan Facility | Term A-2 Loan Facility borrowings maturing through November 2024 bearing interest at LIBOR plus 2.00 (after consideration of 0.50% patronage benefit), interest rate of 4.37% at March 31, 2018 | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread after patronage benefit | 2.00% | |
Senior Notes | Senior Notes due 2024 at a fixed interest rate of 5.50% | ||
Debt Instrument [Line Items] | ||
Fixed interest rate | 5.50% | |
Debt, gross | $ 506,412,000 | 506,412,000 |
Loans | Canadian dollar, fixed interest rate term loans with rates ranging from 5.50% to 6.86% and maturity dates ranging from March 2020 through April 2028, secured by certain assets of the Temiscaming plant | ||
Debt Instrument [Line Items] | ||
Debt, gross | 98,039,000 | 100,881,000 |
Loans | Other loans | ||
Debt Instrument [Line Items] | ||
Debt, gross | $ 6,018,000 | $ 5,946,000 |
Minimum | Loans | Canadian dollar, fixed interest rate term loans with rates ranging from 5.50% to 6.86% and maturity dates ranging from March 2020 through April 2028, secured by certain assets of the Temiscaming plant | ||
Debt Instrument [Line Items] | ||
Fixed interest rate | 5.50% | |
Maximum | Loans | Canadian dollar, fixed interest rate term loans with rates ranging from 5.50% to 6.86% and maturity dates ranging from March 2020 through April 2028, secured by certain assets of the Temiscaming plant | ||
Debt Instrument [Line Items] | ||
Fixed interest rate | 6.86% |
Debt and Capital Leases - Narra
Debt and Capital Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 25, 2017 | |
Debt Instrument [Line Items] | ||
Principal repayments | $ 1,661 | $ 2,165 |
Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Principal repayments | $ 1,000 |
Debt and Capital Leases - Sched
Debt and Capital Leases - Schedule of Maturities of Long-term Debt (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Minimum Lease Payments | |
Remaining 2,018 | $ 386 |
2,019 | 515 |
2,020 | 515 |
2,021 | 515 |
2,022 | 515 |
Thereafter | 2,018 |
Total principal payments | 4,464 |
Less: Interest | |
Remaining 2,018 | 170 |
2,019 | 209 |
2,020 | 187 |
2,021 | 163 |
2,022 | 138 |
Thereafter | 257 |
Total principal payments | 1,124 |
Net Present Value | |
Remaining 2,018 | 216 |
2,019 | 306 |
2,020 | 328 |
2,021 | 352 |
2,022 | 377 |
Thereafter | 1,761 |
Total principal payments | 3,340 |
Debt Principal Payments | |
Remaining 2,018 | 6,912 |
2,019 | 18,137 |
2,020 | 23,227 |
2,021 | 14,555 |
2,022 | 208,737 |
Thereafter | 967,776 |
Total principal payments | $ 1,239,344 |
Liabilities for Disposed Oper44
Liabilities for Disposed Operations - Analysis of Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Accrual for Environmental Loss Contingencies [Roll Forward] | ||
Balance, December 31, 2017 | $ 164,086 | |
Expenditures charged to liabilities | (1,774) | |
Increase to liabilities | 285 | |
Balance, March 31, 2018 | 162,597 | |
Less: Current portion | (13,453) | $ (13,181) |
Non-current portion | $ 149,144 | $ 150,905 |
Liabilities for Disposed Oper45
Liabilities for Disposed Operations - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Environmental Remediation Obligations [Abstract] | |
Loss exposure in excess of accrual, high estimate | $ 67 |
Probable costs expected to be incurred, term | 20 years |
Derivatives Instruments - Nota
Derivatives Instruments - Notational Amounts and Maturity Dates of Derivative Instruments (Details) | Mar. 31, 2018USD ($) |
Interest Rate Swaps | |
Derivative [Line Items] | |
Notional Amount | $ 200,000,000 |
Foreign Exchange Forward Contracts | |
Derivative [Line Items] | |
Notional Amount | $ 147,633,531 |
Derivatives Instruments - Fair
Derivatives Instruments - Fair Value of Derivative Instruments Included in Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Total derivatives | $ 2,383 | $ 1,176 |
Interest Rate Swaps | Derivatives designated as hedging instruments | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 389 | 0 |
Interest Rate Swaps | Derivatives designated as hedging instruments | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 2,248 | 749 |
Foreign Exchange Forward Contracts | Derivatives designated as hedging instruments | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liabilities | (224) | 0 |
Foreign Exchange Forward Contracts | Derivatives not designated as hedging instruments | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 427 |
Foreign Exchange Forward Contracts | Derivatives not designated as hedging instruments | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liabilities | $ (30) | $ 0 |
Derivatives Instruments - Deriv
Derivatives Instruments - Derivative Instruments Classified as Cash Flow Hedges (Details) - Cash Flow Hedging $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Interest Rate Swaps | |
Derivative [Line Items] | |
Gain (Loss) Recognized in OCI on Derivative | $ 1,712 |
Gain (Loss) Reclassified from AOCL into Income | (176) |
Foreign Exchange Forward Contracts | |
Derivative [Line Items] | |
Gain (Loss) Recognized in OCI on Derivative | (224) |
Gain (Loss) Reclassified from AOCL into Income | $ 0 |
Derivatives Instruments - Der49
Derivatives Instruments - Derivative Instruments Not Designated as Hedging Instruments (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Other operating income (expense), net | Foreign Exchange Forward Contracts | |
Derivative [Line Items] | |
Gain (Loss) Recognized in Income on Derivative | $ (3,129) |
Derivatives Instruments - After
Derivatives Instruments - After-tax Amounts of Unrealized Gain in AOCL Related to Hedge Derivatives (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 25, 2017 | Dec. 31, 2016 |
Derivative [Line Items] | ||||
Stockholder's equity | $ 721,994 | $ 693,756 | ||
Unrealized gain on derivative | ||||
Derivative [Line Items] | ||||
Stockholder's equity | 1,891 | 619 | $ 0 | $ 0 |
Cash Flow Hedging | Unrealized gain on derivative | Interest Rate Swaps | ||||
Derivative [Line Items] | ||||
Stockholder's equity | 2,057 | 619 | ||
Cash Flow Hedging | Unrealized gain on derivative | Foreign Exchange Forward Contracts | ||||
Derivative [Line Items] | ||||
Stockholder's equity | $ (166) | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 89,076 | $ 96,235 |
Fixed-rate long-term debt | 603,530 | 606,529 |
Variable-rate long-term debt | 630,786 | 631,666 |
Fair Value | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 89,076 | 96,235 |
Fixed-rate long-term debt | 0 | 0 |
Variable-rate long-term debt | 0 | 0 |
Fair Value | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Fixed-rate long-term debt | 603,275 | 611,308 |
Variable-rate long-term debt | 634,894 | 635,946 |
Interest Rate Swaps | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 2,637 | 749 |
Interest Rate Swaps | Fair Value | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 0 |
Interest Rate Swaps | Fair Value | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 2,637 | 749 |
Foreign Exchange Forward Contracts | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 427 |
Derivative liabilities | 254 | 0 |
Foreign Exchange Forward Contracts | Fair Value | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liabilities | 0 | 0 |
Foreign Exchange Forward Contracts | Fair Value | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 427 |
Derivative liabilities | $ 254 | $ 0 |
Accumulated Other Comprehensi52
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 25, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance, beginning of year | $ 693,756 | |
Total other comprehensive income | 11,418 | $ 2,030 |
Balance, end of quarter | 721,994 | |
Unrecognized components of employee benefit plans, net of tax | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance, beginning of year | (81,638) | (110,080) |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Income tax on other comprehensive income (loss) | 0 | 0 |
Income tax on reclassifications | (677) | (1,118) |
Total other comprehensive income | 2,397 | 2,030 |
Balance, end of quarter | (79,241) | (108,050) |
Amortization of losses | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Reclassifications to earnings | 2,969 | 2,996 |
Amortization of prior service costs | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Reclassifications to earnings | 143 | 190 |
Amortization of negative plan amendment | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Reclassifications to earnings | (38) | (38) |
Unrealized gain on derivative instruments, net of tax | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance, beginning of year | 619 | 0 |
Other comprehensive income (loss) before reclassifications | 1,488 | 0 |
Income tax on other comprehensive income (loss) | (353) | 0 |
Income tax on reclassifications | (39) | 0 |
Total other comprehensive income | 1,272 | 0 |
Balance, end of quarter | 1,891 | 0 |
Foreign currency translation adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance, beginning of year | 4,868 | 0 |
Total other comprehensive income | 7,749 | 0 |
Balance, end of quarter | 12,617 | 0 |
Accumulated other comprehensive loss | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance, end of quarter | (64,733) | (108,050) |
Interest Rate Swaps | Unrealized gain on derivative instruments, net of tax | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Reclassifications to earnings | 176 | 0 |
Foreign Exchange Forward Contracts | Unrealized gain on derivative instruments, net of tax | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Reclassifications to earnings | $ 0 | $ 0 |
Earnings Per Share of Common 53
Earnings Per Share of Common Stock - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 25, 2017 | |
Earnings Per Share [Abstract] | ||
Net income | $ 24,455 | $ 9,642 |
Preferred Stock dividends | (3,403) | (3,176) |
Net Income Available to Rayonier Advanced Materials Inc. Common Stockholders | $ 21,052 | $ 6,466 |
Shares used for determining basic earnings per share of common stock (in shares) | 51,127,726 | 42,348,148 |
Dilutive effect of: | ||
Stock options (in shares) | 5,669 | 0 |
Performance and restricted shares (in shares) | 1,472,839 | 748,212 |
Preferred Stock (in shares) | 11,371,718 | 0 |
Shares used for determining diluted earnings per share of common stock (in shares) | 63,977,952 | 43,096,360 |
Basic earnings per share (in dollars per share) | $ 0.41 | $ 0.15 |
Diluted earnings per share (in dollars per share) | $ 0.38 | $ 0.15 |
Earnings Per Share of Common 54
Earnings Per Share of Common Stock - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 25, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive instruments | 288,827 | 13,829,848 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive instruments | 288,464 | 386,164 |
Performance and restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive instruments | 363 | 245,536 |
Preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive instruments | 0 | 13,198,148 |
Incentive Stock Plans - Narrati
Incentive Stock Plans - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2018 | Mar. 25, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation cost | $ 2,480 | $ 2,274 | |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Performance-Based Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total number of performance shares adjusted (up or down) | 25.00% | ||
Settlement percentage | 152.00% | ||
Shares issued (in shares) | 288,703 | ||
Performance-Based Stock Units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Target payout percentage | 0.00% | ||
Final payout range | 0.00% | ||
Performance-Based Stock Units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Target payout percentage | 200.00% | ||
Final payout range | 250.00% |
Incentive Stock Plans - Schedul
Incentive Stock Plans - Schedule of Outstanding Awards (Details) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Stock Options, Options | |
Ending Balance (in shares) | shares | 324,789 |
Stock Options | |
Stock Options, Options | |
Beginning Balance (in shares) | shares | 373,058 |
Granted (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Exercised or settled (in shares) | shares | (7,293) |
Expired or cancelled (in shares) | shares | (40,976) |
Stock Options, Weighted Average Exercise Price | |
Beginning balance (in dollars per share) | $ / shares | $ 32.25 |
Granted (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Exercised or settled (in dollars per share) | $ / shares | 17.34 |
Expired or cancelled (in dollars per share) | $ / shares | 27.56 |
Ending balance (in dollars per share) | $ / shares | $ 33.20 |
Restricted Stock and Stock Units | |
Awards Other than Options, Awards | |
Beginning Balance (in shares) | shares | 848,371 |
Granted (in shares) | shares | 221,092 |
Forfeited (in shares) | shares | (4,307) |
Exercised or settled (in shares) | shares | (153,919) |
Expired or cancelled (in shares) | shares | 0 |
Ending Balance (in shares) | shares | 911,237 |
Awards Other than Options, Weighted Average Grant Date Fair Value | |
Beginning balances (in dollars per share) | $ / shares | $ 12.47 |
Granted (in dollars per share) | $ / shares | 20.39 |
Forfeited (in dollars per share) | $ / shares | 11.17 |
Exercised or settled (in dollars per share) | $ / shares | 19.23 |
Expired or cancelled (in dollars per share) | $ / shares | 0 |
Ending balances (in dollars per share) | $ / shares | $ 10.97 |
Performance-Based Stock Units | |
Awards Other than Options, Awards | |
Beginning Balance (in shares) | shares | 1,080,067 |
Granted (in shares) | shares | 446,654 |
Forfeited (in shares) | shares | (3,646) |
Exercised or settled (in shares) | shares | (190,320) |
Expired or cancelled (in shares) | shares | 0 |
Ending Balance (in shares) | shares | 1,332,755 |
Awards Other than Options, Weighted Average Grant Date Fair Value | |
Beginning balances (in dollars per share) | $ / shares | $ 11.58 |
Granted (in dollars per share) | $ / shares | 22.77 |
Forfeited (in dollars per share) | $ / shares | 11.43 |
Exercised or settled (in dollars per share) | $ / shares | 17.50 |
Expired or cancelled (in dollars per share) | $ / shares | 0 |
Ending balances (in dollars per share) | $ / shares | $ 14.65 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 25, 2017 | |
Pension | ||
Components of Net Periodic Benefit Cost | ||
Service cost | $ 3,099 | $ 1,184 |
Interest cost | 8,255 | 3,318 |
Expected return on plan assets | (13,858) | (5,548) |
Amortization of prior service cost | 143 | 190 |
Amortization of losses | 2,912 | 2,913 |
Amortization of negative plan amendment | 0 | 0 |
Total net periodic benefit cost | 551 | 2,057 |
Postretirement | ||
Components of Net Periodic Benefit Cost | ||
Service cost | 742 | 236 |
Interest cost | 335 | 198 |
Expected return on plan assets | 0 | 0 |
Amortization of prior service cost | 0 | 0 |
Amortization of losses | 57 | 83 |
Amortization of negative plan amendment | (38) | (38) |
Total net periodic benefit cost | $ 1,096 | $ 479 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 25, 2017 | |
Income Tax Disclosure [Abstract] | ||
Effective rate | 28.70% | 45.30% |
Federal statutory rate | 21.00% | |
Difference from statutory rate, differences in statutory rates from foreign operations | 3.90% | |
Difference from statutory rate, U.S. inclusion of Global Intangible Low-Taxed Income | 1.30% | |
Difference from statutory rate, nondeductible executive compensation | 1.70% | |
Difference from statutory rate, nondeductible foreign losses | 1.50% | |
Difference from statutory rate, nondeductible deal costs | 1.40% |
Segment Information - Segment
Segment Information - Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)segment | Mar. 25, 2017USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | segment | 5 | ||
Net sales | $ 521,992 | $ 201,415 | |
Operating income | 46,257 | 27,081 | |
Identifiable assets | 2,694,049 | $ 2,642,611 | |
Operating Segments | High Purity Cellulose | |||
Segment Reporting Information [Line Items] | |||
Net sales | 282,383 | 201,415 | |
Operating income | 21,311 | 34,496 | |
Identifiable assets | 1,699,763 | 1,671,107 | |
Operating Segments | Forest Products | |||
Segment Reporting Information [Line Items] | |||
Net sales | 99,186 | 0 | |
Operating income | 10,637 | 0 | |
Identifiable assets | 193,065 | 154,258 | |
Operating Segments | Pulp | |||
Segment Reporting Information [Line Items] | |||
Operating income | 22,711 | 0 | |
Identifiable assets | 88,115 | 83,081 | |
Operating Segments | Paper | |||
Segment Reporting Information [Line Items] | |||
Net sales | 75,307 | 0 | |
Operating income | 2,926 | 0 | |
Identifiable assets | 248,000 | 245,746 | |
Operating Segments | Corporate | |||
Segment Reporting Information [Line Items] | |||
Operating income | (11,328) | (7,415) | |
Identifiable assets | 465,106 | $ 488,419 | |
Eliminations | |||
Segment Reporting Information [Line Items] | |||
Net sales | (20,039) | 0 | |
Cellulose Specialties | Operating Segments | High Purity Cellulose | |||
Segment Reporting Information [Line Items] | |||
Net sales | 209,127 | 156,899 | |
Commodity Products | Operating Segments | High Purity Cellulose | |||
Segment Reporting Information [Line Items] | |||
Net sales | 42,747 | 42,086 | |
Other sales | Operating Segments | High Purity Cellulose | |||
Segment Reporting Information [Line Items] | |||
Net sales | 30,509 | 2,430 | |
Other sales | Operating Segments | Forest Products | |||
Segment Reporting Information [Line Items] | |||
Net sales | 20,806 | 0 | |
Lumber | Operating Segments | Forest Products | |||
Segment Reporting Information [Line Items] | |||
Net sales | 78,380 | 0 | |
High-yield pulp | Operating Segments | Pulp | |||
Segment Reporting Information [Line Items] | |||
Net sales | 85,155 | 0 | |
Paperboard | Operating Segments | Paper | |||
Segment Reporting Information [Line Items] | |||
Net sales | 47,791 | 0 | |
Newsprint | Operating Segments | Paper | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ 27,516 | $ 0 |
Commitments and Contingencies60
Commitments and Contingencies (Details) $ in Millions | Mar. 31, 2018USD ($)employee |
LignoTech Florida | |
Guarantor Obligations [Line Items] | |
Ownership percentage | 45.00% |
Borregaard ASA | LignoTech Florida | |
Guarantor Obligations [Line Items] | |
Ownership percentage | 55.00% |
Financial Standby Letter of Credit | |
Guarantor Obligations [Line Items] | |
Guarantees | $ 64 |
Surety Bonds | |
Guarantor Obligations [Line Items] | |
Guarantees | 85 |
Contract Guarantee | |
Guarantor Obligations [Line Items] | |
Guarantees | $ 31 |
Unionized Employees Concentration Risk | |
Guarantor Obligations [Line Items] | |
Number of employees | employee | 650 |
Commitments and Contingencies -
Commitments and Contingencies - Purchase Obligations (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 16,755 |
2,019 | 1,696 |
2,020 | 1,696 |
2,021 | 0 |
2,022 | 0 |
Thereafter | 0 |
Total | $ 20,147 |
Supplemental Disclosures of C62
Supplemental Disclosures of Cash Flows Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 25, 2017 | |
Cash paid (received) during the period: | ||
Interest | $ 7,678 | $ 1,775 |
Income taxes | 6,567 | 11 |
Non-cash investing and financing activities: | ||
Capital assets purchased on account | 14,053 | 4,780 |
Capital lease obligation | $ 3,340 | $ 3,611 |