Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2016shares | |
Entity Registrant Name | TOOTSIE ROLL INDUSTRIES INC |
Entity Central Index Key | 98,677 |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2016 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q1 |
Common Stock | |
Entity Common Stock, Shares Outstanding | 38,282,506 |
Class B Common Stock | |
Entity Common Stock, Shares Outstanding | 24,244,622 |
CONSOLIDATED STATEMENTS OF Fina
CONSOLIDATED STATEMENTS OF Financial Position - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
CURRENT ASSETS: | |||
Cash & cash equivalents | $ 95,057 | $ 126,145 | $ 85,430 |
Restricted cash | 414 | 395 | |
Investments | 38,750 | 42,155 | 52,530 |
Trade accounts receivable, less allowances of $2,224, $2,225 & $1,976 | 40,448 | 51,010 | 41,511 |
Other receivables | 2,693 | 2,772 | 3,965 |
Inventories: | |||
Finished goods & work-in-process | 39,315 | 35,032 | 52,591 |
Raw material & supplies | 29,721 | 27,231 | 28,262 |
Prepaid expenses | 5,724 | 5,935 | 6,198 |
Deferred income taxes | 3,152 | 3,131 | 7,094 |
Total current assets | 255,274 | 293,806 | 277,581 |
PROPERTY, PLANT & EQUIPMENT, at cost: | |||
Land | 22,223 | 22,188 | 22,251 |
Buildings | 114,581 | 114,562 | 113,199 |
Machinery & equipment | 355,611 | 357,627 | 350,497 |
Construction in progress | 13,492 | 5,158 | 3,645 |
Property, plant and equipment, gross | 505,907 | 499,535 | 489,592 |
Less-accumulated depreciation | 317,869 | 314,949 | 302,877 |
Net property, plant and equipment | 188,038 | 184,586 | 186,715 |
OTHER ASSETS: | |||
Goodwill | 73,237 | 73,237 | 73,237 |
Trademarks | 175,024 | 175,024 | 175,024 |
Investments | 176,483 | 152,930 | 156,053 |
Split dollar officer life insurance | 26,042 | 26,042 | 33,632 |
Prepaid expenses | 2,041 | 3,050 | 5,889 |
Restricted cash | 1,225 | ||
Deferred income taxes | 310 | 308 | 1,575 |
Total other assets | 453,137 | 430,591 | 446,635 |
Total assets | 896,449 | 908,983 | 910,931 |
CURRENT LIABILITIES: | |||
Accounts payable | 12,933 | 11,322 | 14,432 |
Bank loan | 489 | 231 | 179 |
Dividends payable | 144 | 5,486 | 130 |
Accrued liabilities | 43,273 | 50,117 | 43,551 |
Postretirement health care benefits | 328 | 448 | 328 |
Income taxes payable | 1,935 | 4,436 | 2,807 |
Deferred compensation | 668 | 22 | 14,284 |
Total current liabilities | 59,770 | 72,062 | 75,711 |
NONCURRENT LIABILITIES: | |||
Deferred income taxes | 48,240 | 47,594 | 51,844 |
Bank loans | 364 | 383 | 484 |
Postretirement health care benefits | 11,052 | 10,952 | 12,154 |
Industrial development bonds | 7,500 | 7,500 | 7,500 |
Liability for uncertain tax positions | 4,983 | 5,101 | 8,453 |
Deferred compensation and other liabilities | 67,051 | 66,843 | 66,678 |
Total noncurrent liabilities | 139,190 | 138,373 | 147,113 |
TOOTSIE ROLL INDUSTRIES, INC. SHAREHOLDERS' EQUITY: | |||
Capital in excess of par value | 668,864 | 622,882 | 650,724 |
Retained earnings | 2,972 | 52,349 | 11,922 |
Accumulated other comprehensive loss | (16,101) | (17,364) | (15,758) |
Treasury stock (at cost)- 83, 80 & 80 shares, respectively | (1,992) | (1,992) | (1,992) |
Total Tootsie Roll Industries, Inc. shareholders' equity | 697,164 | 698,183 | 687,831 |
Noncontrolling interests | 325 | 365 | 276 |
Total equity | 697,489 | 698,548 | 688,107 |
Total liabilities and shareholders' equity | 896,449 | 908,983 | 910,931 |
Common Stock | |||
TOOTSIE ROLL INDUSTRIES, INC. SHAREHOLDERS' EQUITY: | |||
Common stock, $.69-4/9 par value- 120,000 shares authorized; 38,283, 37,382 & 38,257, respectively, issued. Class B common stock, $.69-4/9 par value- 40,000 shares authorized; 24,245, 23,542 & 23,571, respectively, issued | 26,585 | 25,960 | 26,567 |
Class B Common Stock | |||
TOOTSIE ROLL INDUSTRIES, INC. SHAREHOLDERS' EQUITY: | |||
Common stock, $.69-4/9 par value- 120,000 shares authorized; 38,283, 37,382 & 38,257, respectively, issued. Class B common stock, $.69-4/9 par value- 40,000 shares authorized; 24,245, 23,542 & 23,571, respectively, issued | $ 16,836 | $ 16,348 | $ 16,368 |
CONSOLIDATED STATEMENTS OF Fin3
CONSOLIDATED STATEMENTS OF Financial Position (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
Trade accounts receivable, allowances | $ 2,224 | $ 2,225 | $ 1,976 |
Treasury stock, shares | 83,000 | 80,000 | 80,000 |
Common Stock | |||
Common stock, par value (in dollars per share) | $ 0.6944 | $ 0.6944 | $ 0.6944 |
Common stock, shares authorized | 120,000,000 | 120,000,000 | 120,000,000 |
Common stock, shares issued | 38,283,000 | 37,382,000 | 38,257,000 |
Class B Common Stock | |||
Common stock, par value (in dollars per share) | $ 0.6944 | $ 0.6944 | $ 0.6944 |
Common stock, shares authorized | 40,000,000 | 40,000,000 | 40,000,000 |
Common stock, shares issued | 24,245,000 | 23,542,000 | 23,571,000 |
CONSOLIDATED STATEMENTS OF Earn
CONSOLIDATED STATEMENTS OF Earnings and Retained Earnings - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
CONSOLIDATED STATEMENTS OF Earnings and Retained Earnings | |||
Net product sales | $ 103,362 | $ 105,477 | |
Rental and royalty revenue | 1,033 | 844 | |
Total revenue | 104,395 | 106,321 | |
Product cost of goods sold | 65,824 | 67,145 | |
Rental and royalty cost | 302 | 228 | |
Total costs | 66,126 | 67,373 | |
Product gross margin | 37,538 | 38,332 | |
Rental and royalty gross margin | 731 | 616 | |
Total gross margin | 38,269 | 38,948 | |
Selling, marketing and administrative expenses | 24,053 | 25,984 | |
Earnings from operations | 14,216 | 12,964 | |
Other income (loss), net | (35) | 473 | |
Earnings before income taxes | 14,181 | 13,437 | |
Provision for income taxes | 4,325 | 4,334 | |
Net earnings | 9,856 | 9,103 | |
Less: Net earnings (loss) attributable to noncontrolling interests | (40) | (51) | |
Net earnings attributable to Tootsie Roll Industries, Inc. | $ 9,896 | $ 9,154 | |
Net earnings attributable to Tootsie Roll Industries, Inc. per share (in dollars per share) | $ 0.16 | $ 0.14 | |
Dividends per share (in dollars per share) | $ 0.09 | $ 0.08 | |
Average number of shares outstanding (in shares) | 62,499 | 63,645 | |
Retained earnings at beginning of period | $ 52,349 | $ 64,927 | |
Net earnings attributable to Tootsie Roll Industries, Inc. | 9,896 | 9,154 | |
Cash dividends | (5,457) | (4,800) | |
Stock dividends | [1] | (53,816) | (57,359) |
Retained earnings at end of period | $ 2,972 | $ 11,922 | |
[1] | Does not include 3% stock dividend to shareholders of record on 3/8/16 and 3/10/15. |
CONSOLIDATED STATEMENTS OF Ear5
CONSOLIDATED STATEMENTS OF Earnings and Retained Earnings (Parenthetical) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CONSOLIDATED STATEMENTS OF Earnings and Retained Earnings | ||
Stock dividends (as a percent) | 3.00% | 3.00% |
CONSOLIDATED STATEMENTS OF Comp
CONSOLIDATED STATEMENTS OF Comprehensive Earnings - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CONSOLIDATED STATEMENTS OF Comprehensive Earnings | ||
Net earnings | $ 9,856 | $ 9,103 |
Other comprehensive income (loss), before tax: | ||
Foreign currency translation adjustments | 205 | (1,159) |
Pension and postretirement reclassification adjustment: | ||
Less: reclassification adjustment for (gains) losses to net earnings | (411) | (363) |
Unrealized gains (losses) on postretirement and pension benefits | (411) | (363) |
Investments: | ||
Unrealized gains (losses) for the period on investments | 490 | 371 |
Less: reclassification adjustment for (gains) losses to net earnings | 4 | |
Unrealized gains (losses) on investments | 494 | 371 |
Derivatives: | ||
Unrealized gains (losses) for the period on derivatives | 961 | (3,037) |
Less: reclassification adjustment for (gains) losses to net earnings | 613 | 675 |
Unrealized gains (losses) on derivatives | 1,574 | (2,362) |
Total other comprehensive income (loss), before tax | 1,862 | (3,513) |
Income tax benefit (expense) related to items of other comprehensive income | (599) | 853 |
Total comprehensive earnings | 11,119 | 6,443 |
Comprehensive earnings (loss) attributable to noncontrolling interests | (40) | (51) |
Total comprehensive earnings attributable to Tootsie Roll Industries, Inc. | $ 11,159 | $ 6,494 |
CONSOLIDATED STATEMENTS OF Cash
CONSOLIDATED STATEMENTS OF Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net earnings | $ 9,856 | $ 9,103 |
Adjustments to reconcile net earnings to net cash used in operating activities: | ||
Depreciation and amortization | 5,152 | 5,050 |
Deferred income taxes | 671 | 132 |
Amortization of marketable security premiums | 748 | 791 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 10,627 | 1,450 |
Other receivables | 109 | (404) |
Inventories | (6,706) | (10,847) |
Prepaid expenses and other assets | 1,353 | 888 |
Accounts payable and accrued liabilities | (4,406) | (968) |
Income taxes payable | (2,619) | 1,909 |
Postretirement health care benefits | (312) | (192) |
Deferred compensation and other liabilities | 507 | 109 |
Net cash from operating activities | 14,980 | 7,021 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Restricted cash | 1 | 175 |
Capital expenditures | (8,376) | (2,418) |
Purchases of trading securities | (2,485) | (2,573) |
Sales of trading securities | 613 | 501 |
Purchase of available for sale securities | (23,348) | (9,107) |
Sale and maturity of available for sale securities | 4,871 | 6,622 |
Net cash used in investing activities | (28,724) | (6,800) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Shares purchased and retired | (6,576) | (4,544) |
Dividends paid in cash | (10,943) | (9,613) |
Repayment of bank loans | (612) | (52) |
Proceeds from bank loans | 809 | |
Net cash used in financing activities | (17,322) | (14,209) |
Effect of exchange rate changes on cash | (22) | (690) |
Decrease in cash and cash equivalents | (31,088) | (14,678) |
Cash and cash equivalents at beginning of year | 126,145 | 100,108 |
Cash and cash equivalents at end of year | 95,057 | 85,430 |
Supplemental cash flow information: | ||
Income taxes paid, net | 6,352 | 2,410 |
Interest paid | 1 | 11 |
Stock dividend issued | $ 61,671 | $ 57,230 |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Significant Accounting Policies | |
Significant Accounting Policies | Note 1 — Significant Accounting Policies General Information Foregoing data has been prepared from the unaudited financial records of Tootsie Roll Industries, Inc. (the Company) and in the opinion of management all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the interim period have been reflected. Certain amounts previously reported have been reclassified to conform to the current year presentation. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company’s 2015 Annual Report on Form 10-K. Results of operations for the period ended March 31, 2016 are not necessarily indicative of results to be expected for the year to end December 31, 2016 because of the seasonal nature of the Company’s operations. Historically, the third quarter has been the Company’s largest sales quarter due to pre-Halloween sales. Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09 that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the new guidance to determine the impact it may have on the consolidated financial statements. In August 2014, the FASB issued ASU 2014-15 which provides guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. This guidance will be effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company does not expect the adoption of this guidance to have a significant impact on the consolidated financial statements. In November 2015, the FASB issued ASU 2015-17 which requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in the standard. This standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is permitted and the standard may be applied either retrospectively or on a prospective basis to all deferred tax assets and liabilities. The Company is currently evaluating the new guidance to determine the impact it may have on the consolidated financial statements. In January 2016, the FASB issued ASU 2016-01 which modifies certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. This standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. The Company is currently evaluating the new guidance to determine the impact it may have on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 which amends existing guidance to require lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. This ASU also provides clarifications surrounding the presentation of the effects of leases in the income statement and statement of cash flows. This guidance will be effective for the Company on January 1, 2019. The Company is currently evaluating this new guidance to determine the impact it will have on its consolidated financial statements. In April 2016, the FASB issued ASU 2016-10, which contains amendments to the new revenue recognition standard on identifying performance obligations and accounting for licenses of intellectual property. The amendments related to identifying performance obligations clarify when a promised good or service is separately identifiable and allows entities to disregard items that are immaterial in the context of a contract. The licensing implementation amendments clarify how an entity should evaluate the nature of its promise in granting a license of intellectual property, which will determine whether revenue is recognized over time or at a point in time. This new standard has the same effective date and transition requirements as ASU 2014-09. The Company is currently evaluating this new guidance to determine the impact it will have on its consolidated financial statements. |
Average Shares Outstanding
Average Shares Outstanding | 3 Months Ended |
Mar. 31, 2016 | |
Average Shares Outstanding | |
Average Shares Outstanding | Note 2 — Average Shares Outstanding The average number of shares outstanding for year to date ended March 31, 2016 reflect stock purchases of 214 shares for $6,576 and a 3% stock dividend distributed on April 8, 2016. The average number of shares outstanding for year to date ended March 31, 2015 reflect stock purchases of 143 shares for $4,544 and a 3% stock dividend distributed on April 10, 2015. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Taxes | |
Income Taxes | Note 3 — Income Taxes The Company is subject to taxation in the U.S. and various state and foreign jurisdictions. The Company remains subject to examination by U.S. federal and state and foreign tax authorities for the years 2013 through 2014. With few exceptions, the Company is no longer subject to examination by tax authorities for the year 2012 and prior. The consolidated effective tax rates were 30.5% and 32.3% in first quarter 2016 and 2015, respectively. The lower effective tax rate in first quarter 2016 compared to first quarter 2015 reflects the effective settlement of certain income tax audits during first quarter 2016. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | Note 4 — Fair Value Measurements Current accounting guidance defines fair value as the price that would be received on the sale of an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Guidance requires disclosure of the extent to which fair value is used to measure financial assets and liabilities, the inputs utilized in calculating valuation measurements, and the effect of the measurement of significant unobservable inputs on earnings, or changes in net assets, as of the measurement date. Guidance establishes a three-level valuation hierarchy based upon the transparency of inputs utilized in the measurement and valuation of financial assets or liabilities as of the measurement date. Level 1 inputs include quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, commodity rates and yield curves. Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participants would use in pricing the asset or liability. The use of observable and unobservable inputs is reflected in the hierarchy assessment disclosed in the table below. As of March 31, 2016, December 31, 2015 and March 31, 2015, the Company held certain financial assets that are required to be measured at fair value on a recurring basis. These included derivative hedging instruments related to the purchase of certain raw materials and foreign currencies, investments in trading securities and available for sale securities. The Company’s available for sale and trading securities principally consist of corporate and municipal bonds that are publicly traded. The following table presents information about the Company’s financial assets and liabilities measured at fair value as of March 31, 2016, December 31, 2015 and March 31, 2015 and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value: Estimated Fair Value March 31, 2016 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and cash equivalents $ $ $ - $ - Available for sale securities - Foreign currency forward contracts - - Commodity futures contracts - - Trading securities - - Total assets measured at fair value $ $ $ $ - Estimated Fair Value December 31, 2015 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and cash equivalents $ $ $ - $ - Available for sale securities - Foreign currency forward contracts - - Commodity futures contracts, net - - Trading securities - - Total assets measured at fair value $ $ $ $ - Estimated Fair Value March 31, 2015 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and cash equivalents $ $ $ - $ - Available for sale securities - Foreign currency forward contracts - - Commodity futures contracts - - Trading securities - - Total assets measured at fair value $ $ $ $ - The fair value of the Company’s industrial revenue development bonds at March 31, 2016, December 31, 2015 and March 31, 2015 were valued using Level 2 inputs which approximates the carrying value of $7,500 for the respective periods. Interest rates on these bonds are reset weekly based on current market conditions. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities | |
Derivative Instruments and Hedging Activities | Note 5 — Derivative Instruments and Hedging Activities The Company uses derivative instruments, including foreign currency forward contracts, commodity futures contracts and commodity option contracts, to manage its exposures to foreign exchange and commodity prices. Commodity futures contracts and most commodity option contracts are intended and effective as hedges of market price risks associated with the anticipated purchase of certain raw materials (primarily sugar). Foreign currency forward contracts are intended and effective as hedges of the Company’s exposure to the variability of cash flows, primarily related to the foreign exchange rate changes of products manufactured in Canada and sold in the United States. The Company does not engage in trading or other speculative use of derivative instruments. The Company recognizes all derivative instruments as either assets or liabilities at fair value in the Condensed Consolidated Statement of Financial Position. Derivative assets are recorded in other receivables and derivative liabilities are recorded in accrued liabilities. The Company uses either hedge accounting or mark-to-market accounting for its derivative instruments. Derivatives that qualify for hedge accounting are designated as cash flow hedges by formally documenting the hedge relationships, including identification of the hedging instruments, the hedged items and other critical terms, as well as the Company’s risk management objectives and strategies for undertaking the hedge transaction. Changes in the fair value of the Company’s cash flow hedges are recorded in accumulated other comprehensive loss, net of tax, and are reclassified to earnings in the periods in which earnings are affected by the hedged item. Substantially all amounts reported in accumulated other comprehensive loss for commodity derivatives are expected to be reclassified to cost of goods sold. Substantially all amounts reported in accumulated other comprehensive loss for foreign currency derivatives are expected to be reclassified to other income, net. The following table summarizes the Company’s outstanding derivative contracts and their effects on its Condensed Consolidated Statements of Financial Position at March 31, 2016, December 31, 2015 and March 31, 2015: March 31, 2016 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency forward contracts $ $ - $ Commodity futures contracts Total derivatives $ $ December 31, 2015 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency forward contracts $ $ - $ Commodity futures contracts Total derivatives $ $ March 31, 2015 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency forward contracts $ $ - $ Commodity futures contracts Total derivatives $ $ The effects of derivative instruments on the Company’s Condensed Consolidated Statements of Earnings and Retained Earnings and the Condensed Consolidated Statements of Comprehensive Earnings for periods ended March 31, 2016 and March 31, 2015 are as follows: For Quarter Ended March 31, 2016 Gain (Loss) Gain (Loss) on Amount Excluded Gain(Loss) Reclassified from from Effectiveness Recognized Accumulated OCI Testing Recognized in OCI into Earnings in Earnings Foreign currency forward contracts $ $ $ - Commodity futures contracts - Total $ $ $ - For Quarter Ended March 31, 2015 Gain (Loss) Gain (Loss) on Amount Excluded Gain(Loss) Reclassified from from Effectiveness Recognized Accumulated OCI Testing Recognized in OCI into Earnings in Earnings Foreign currency forward contracts $ $ $ - Commodity futures contracts - Total $ $ $ - |
Pension Plans
Pension Plans | 3 Months Ended |
Mar. 31, 2016 | |
Pension Plans | |
Pension Plans | Note 6 — Pension Plans During 2015 and 2016, the Company received updated notices that the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union Pension Plan (Plan), a multi-employer defined benefit pension plan for certain Company union employees, is in “critical and declining status”, as defined by the Pension Protection Act (PPA) and the Pension Benefit Guaranty Corporation (PBGC), and that the Plan is projected to become insolvent in 14 years. The Company has been advised that its withdrawal liability would have been $61,000 if it had withdrawn from the Plan during 2015. Should the Company actually withdraw from the Plan at a future date, a withdrawal liability, which could be higher than the above discussed amounts, could be payable to the Plan. The Company is currently unable to determine the ultimate outcome of the above discussed matter and therefore is unable to determine the effects on its consolidated financial statements, but the ultimate outcome or the effects of any modifications to the current rehabilitation plan could be material to its consolidated results of operations or cash flows in one or more future periods. See also the Company’s Condensed Consolidated Financial Statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations incorporated into the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Earnings (Loss) | 3 Months Ended |
Mar. 31, 2016 | |
Accumulated Other Comprehensive Earnings (Loss) | |
Accumulated Other Comprehensive Earnings (Loss) | Note 7 — Accumulated Other Comprehensive Earnings (Loss) Accumulated Other Comprehensive Earnings (Loss) consists of the following components: Accumulated Foreign Foreign Postretirement Other Currency Currency Commodity and Pension Comprehensive Translation Investments Derivatives Derivatives Benefits Earnings (Loss) Balance at December 31, 2015 $ $ $ $ $ $ Other comprehensive earnings (loss) before reclassifications - Reclassifications from accumulated other comprehensive loss - Other comprehensive earnings (loss) net of tax Balance at March 31, 2016 $ $ $ $ $ $ Accumulated Foreign Foreign Postretirement Other Currency Currency Commodity and Pension Comprehensive Translation Investments Derivatives Derivatives Benefits Earnings (Loss) Balance at December 31, 2014 $ $ $ $ $ $ Other comprehensive earnings (loss) before reclassifications - Reclassifications from accumulated other comprehensive loss - - Other comprehensive earnings (loss) net of tax Balance at March 31, 2015 $ $ $ $ $ $ The amounts reclassified from accumulated other comprehensive income (loss) consisted of the following: Details about Accumulated Other Quarter Ended Comprehensive Income Components March 31, 2016 March 31, 2015 Location of (Gain) Loss Recognized in Earnings Investments $ $ - Other income, net Foreign currency derivatives Other income, net Commodity derivatives Product cost of goods sold Postretirement and pension benefits Selling, marketing and administrative expenses Postretirement and pension benefits Product cost of goods sold Total before tax Tax (expense) benefit Net of tax $ $ |
Restricted Cash
Restricted Cash | 3 Months Ended |
Mar. 31, 2016 | |
Restricted Cash | |
Restricted Cash | Note 8 — Restricted Cash Restricted cash comprises certain cash deposits of the Company’s majority-owned Spanish companies with international banks that are pledged as collateral for letters of credit and bank borrowings. |
Bank Loans
Bank Loans | 3 Months Ended |
Mar. 31, 2016 | |
Bank Loans | |
Bank Loans | Note 9 — Bank Loans Long term bank loans comprise borrowings by the Company’s majority-owned Spanish companies which are held by international banks. The average weighted interest rate at March 31, 2016 and March 31, 2015 was 2.2 % and 2.5% , respectively, and maturity dates range from 2 to 3 years for both periods. Short term bank loans also relate to the Company’s majority-owned Spanish companies. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Measurements | |
Schedule of financial assets and liabilities measured at fair value | Estimated Fair Value March 31, 2016 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and cash equivalents $ $ $ - $ - Available for sale securities - Foreign currency forward contracts - - Commodity futures contracts - - Trading securities - - Total assets measured at fair value $ $ $ $ - Estimated Fair Value December 31, 2015 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and cash equivalents $ $ $ - $ - Available for sale securities - Foreign currency forward contracts - - Commodity futures contracts, net - - Trading securities - - Total assets measured at fair value $ $ $ $ - Estimated Fair Value March 31, 2015 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and cash equivalents $ $ $ - $ - Available for sale securities - Foreign currency forward contracts - - Commodity futures contracts - - Trading securities - - Total assets measured at fair value $ $ $ $ - |
Derivative Instruments and He18
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities | |
Summary of the Company's outstanding derivative contracts and their effects on the Condensed Consolidated Statements of Financial Position | March 31, 2016 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency forward contracts $ $ - $ Commodity futures contracts Total derivatives $ $ December 31, 2015 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency forward contracts $ $ - $ Commodity futures contracts Total derivatives $ $ March 31, 2015 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency forward contracts $ $ - $ Commodity futures contracts Total derivatives $ $ |
Effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Retained Earnings, and the Condensed Consolidated Statement of Comprehensive Earnings | For Quarter Ended March 31, 2016 Gain (Loss) Gain (Loss) on Amount Excluded Gain(Loss) Reclassified from from Effectiveness Recognized Accumulated OCI Testing Recognized in OCI into Earnings in Earnings Foreign currency forward contracts $ $ $ - Commodity futures contracts - Total $ $ $ - For Quarter Ended March 31, 2015 Gain (Loss) Gain (Loss) on Amount Excluded Gain(Loss) Reclassified from from Effectiveness Recognized Accumulated OCI Testing Recognized in OCI into Earnings in Earnings Foreign currency forward contracts $ $ $ - Commodity futures contracts - Total $ $ $ - |
Accumulated Other Comprehensi19
Accumulated Other Comprehensive Earnings (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accumulated Other Comprehensive Earnings (Loss) | |
Schedule of accumulated other comprehensive earnings (loss): | Accumulated Foreign Foreign Postretirement Other Currency Currency Commodity and Pension Comprehensive Translation Investments Derivatives Derivatives Benefits Earnings (Loss) Balance at December 31, 2015 $ $ $ $ $ $ Other comprehensive earnings (loss) before reclassifications - Reclassifications from accumulated other comprehensive loss - Other comprehensive earnings (loss) net of tax Balance at March 31, 2016 $ $ $ $ $ $ Accumulated Foreign Foreign Postretirement Other Currency Currency Commodity and Pension Comprehensive Translation Investments Derivatives Derivatives Benefits Earnings (Loss) Balance at December 31, 2014 $ $ $ $ $ $ Other comprehensive earnings (loss) before reclassifications - Reclassifications from accumulated other comprehensive loss - - Other comprehensive earnings (loss) net of tax Balance at March 31, 2015 $ $ $ $ $ $ |
Amount reclassified from accumulated other comprehensive income | Details about Accumulated Other Quarter Ended Comprehensive Income Components March 31, 2016 March 31, 2015 Location of (Gain) Loss Recognized in Earnings Investments $ $ - Other income, net Foreign currency derivatives Other income, net Commodity derivatives Product cost of goods sold Postretirement and pension benefits Selling, marketing and administrative expenses Postretirement and pension benefits Product cost of goods sold Total before tax Tax (expense) benefit Net of tax $ $ |
Average Shares Outstanding (Det
Average Shares Outstanding (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Average Shares Outstanding | ||
Stock purchases (in shares) | 214 | 143 |
Purchase of common shares | $ 6,576 | $ 4,544 |
Stock dividends (as a percent) | 3.00% | 3.00% |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Effective income tax rate differs from the statutory rate | ||
Effective income tax rate (as a percent) | 30.50% | 32.30% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair value measured on a recurring basis - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
Fair value measurements | |||
Cash and cash equivalents | $ 95,057 | $ 126,145 | $ 85,430 |
Available for sale securities | 152,724 | 134,501 | 133,412 |
Trading securities | 62,509 | 60,584 | 75,171 |
Total assets measured at fair value | 309,509 | 318,875 | 288,976 |
Foreign currency forward contracts | |||
Fair value measurements | |||
Derivative instruments, net | (1,350) | (2,626) | (3,328) |
Commodity futures contracts | |||
Fair value measurements | |||
Derivative instruments, net | 569 | 271 | (1,709) |
Level 1 | |||
Fair value measurements | |||
Cash and cash equivalents | 95,057 | 126,145 | 85,430 |
Available for sale securities | 2,441 | 2,430 | 2,461 |
Trading securities | 62,509 | 60,584 | 75,171 |
Total assets measured at fair value | 160,576 | 189,430 | 161,353 |
Level 1 | Commodity futures contracts | |||
Fair value measurements | |||
Derivative instruments, net | 569 | 271 | (1,709) |
Level 2 | |||
Fair value measurements | |||
Available for sale securities | 150,283 | 132,071 | 130,951 |
Total assets measured at fair value | 148,933 | 129,445 | 127,623 |
Level 2 | Foreign currency forward contracts | |||
Fair value measurements | |||
Derivative instruments, net | $ (1,350) | $ (2,626) | $ (3,328) |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
Fair value on a recurring basis | |||
Industrial revenue development bonds, carrying amount, approximates fair value | $ 7,500 | $ 7,500 | $ 7,500 |
Cost Basis | Level 2 | |||
Fair value on a recurring basis | |||
Industrial revenue development bonds, carrying amount, approximates fair value | 7,500 | 7,500 | 7,500 |
Estimated Fair Value | Level 2 | |||
Fair value on a recurring basis | |||
Industrial revenue development bonds, carrying amount, approximates fair value | $ 7,500 | $ 7,500 | $ 7,500 |
Derivative Instruments and He24
Derivative Instruments and Hedging Activities (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
Derivative contracts | |||
Assets | $ 648 | $ 484 | $ 31 |
Liabilities | (1,429) | (2,839) | (5,068) |
Derivatives designated as hedging instruments: | Foreign currency forward contracts | |||
Derivative contracts | |||
Notional Amounts | 12,339 | 15,668 | 23,443 |
Liabilities | (1,350) | (2,626) | (3,328) |
Derivatives designated as hedging instruments: | Commodity futures contracts | |||
Derivative contracts | |||
Notional Amounts | 12,029 | 13,202 | 15,966 |
Assets | 648 | 484 | 31 |
Liabilities | $ (79) | $ (213) | $ (1,740) |
Derivative Instruments and He25
Derivative Instruments and Hedging Activities - OCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Effect of derivative instruments on earnings | ||
Gain (Loss) Recognized in OCI | $ 961 | $ (3,037) |
Gain (Loss) Reclassified from Accumulated OCI into Earnings | 9,896 | 9,154 |
Reclassified from Accumulated OCI into Earnings | ||
Effect of derivative instruments on earnings | ||
Gain (Loss) Reclassified from Accumulated OCI into Earnings | (613) | (675) |
Foreign currency forward contracts | ||
Effect of derivative instruments on earnings | ||
Gain (Loss) Recognized in OCI | 670 | (1,903) |
Foreign currency forward contracts | Reclassified from Accumulated OCI into Earnings | ||
Effect of derivative instruments on earnings | ||
Gain (Loss) Reclassified from Accumulated OCI into Earnings | (606) | (513) |
Commodity futures contracts | ||
Effect of derivative instruments on earnings | ||
Gain (Loss) Recognized in OCI | 291 | (1,134) |
Commodity futures contracts | Reclassified from Accumulated OCI into Earnings | ||
Effect of derivative instruments on earnings | ||
Gain (Loss) Reclassified from Accumulated OCI into Earnings | $ (7) | $ (162) |
Pension Plans (Details)
Pension Plans (Details) - Multi-employer defined benefit pension plan | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Pension Plans | |
Estimated liability upon withdrawal from plan | $ 61,000 |
Insolvent period | 14 years |
Accumulated Other Comprehensi27
Accumulated Other Comprehensive Earnings (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | $ 698,183 | |
Balance at the end of the period | 697,164 | $ 687,831 |
AOCI from Derivatives | Foreign currency forward contracts | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | (1,675) | (1,236) |
Other comprehensive earnings (loss) before reclassifications | 427 | (1,214) |
Reclassifications from accumulated other comprehensive loss | 387 | 327 |
Other comprehensive earnings (loss) net of tax | 814 | (887) |
Balance at the end of the period | (861) | (2,123) |
AOCI from Derivatives | Commodity futures contracts | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | 173 | (470) |
Other comprehensive earnings (loss) before reclassifications | 187 | (722) |
Reclassifications from accumulated other comprehensive loss | 4 | 103 |
Other comprehensive earnings (loss) net of tax | 191 | (619) |
Balance at the end of the period | 364 | (1,089) |
Investments | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | (605) | (332) |
Other comprehensive earnings (loss) before reclassifications | 312 | 237 |
Reclassifications from accumulated other comprehensive loss | 3 | |
Other comprehensive earnings (loss) net of tax | 315 | 237 |
Balance at the end of the period | (290) | (95) |
Postretirement and Pension Benefits | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | 6,387 | 6,439 |
Reclassifications from accumulated other comprehensive loss | (262) | (232) |
Other comprehensive earnings (loss) net of tax | (262) | (232) |
Balance at the end of the period | 6,125 | 6,207 |
Foreign Currency Translation | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | (21,644) | (17,499) |
Other comprehensive earnings (loss) before reclassifications | 205 | (1,159) |
Other comprehensive earnings (loss) net of tax | 205 | (1,159) |
Balance at the end of the period | (21,439) | (18,658) |
Accumulated Other Comprehensive Earnings ( Loss ) | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | (17,364) | (13,098) |
Other comprehensive earnings (loss) before reclassifications | 1,131 | (2,858) |
Reclassifications from accumulated other comprehensive loss | 132 | 198 |
Other comprehensive earnings (loss) net of tax | 1,263 | (2,660) |
Balance at the end of the period | $ (16,101) | $ (15,758) |
Accumulated Other Comprehensi28
Accumulated Other Comprehensive Earnings (Loss) - Reclassification from AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Other income, net | $ 35 | $ (473) |
Product cost of goods sold | 65,824 | 67,145 |
Selling, marketing and administrative expenses | 24,053 | 25,984 |
Tax expense (benefit) | 4,325 | 4,334 |
Net earnings | (9,856) | (9,103) |
Reclassified from Accumulated OCI into Earnings | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Total before tax | 206 | 312 |
Tax expense (benefit) | (74) | (114) |
Net earnings | 132 | 198 |
AOCI from Derivatives | Foreign currency forward contracts | Reclassified from Accumulated OCI into Earnings | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Other income, net | 606 | 513 |
AOCI from Derivatives | Commodity futures contracts | Reclassified from Accumulated OCI into Earnings | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Product cost of goods sold | 7 | 162 |
Investments | Reclassified from Accumulated OCI into Earnings | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Other income, net | 4 | |
Postretirement and Pension Benefits | Reclassified from Accumulated OCI into Earnings | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Product cost of goods sold | (201) | (178) |
Selling, marketing and administrative expenses | $ (210) | $ (185) |
Bank Loans (Details)
Bank Loans (Details) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Minimum | ||
Bank Loans | ||
Maturity period | 2 years | 2 years |
Maximum | ||
Bank Loans | ||
Maturity period | 3 years | 3 years |
Spanish Companies | ||
Bank Loans | ||
Average weighted interest rate (as a percent) | 2.20% | 2.50% |