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Condensed Consolidating Financial Statements

6 Months Ended

Jun. 30, 2015

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Statements

17. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Our 5.375% Notes issued by P. H. Glatfelter Company (the “Parent”) are fully and unconditionally guaranteed, on a joint and several basis, by certain of our 100%-owned domestic subsidiaries, PHG Tea Leaves, Inc., Mollanvick, Inc., and Glatfelter Holdings, LLC. The guarantees are subject to certain customary release provisions including i) the designation of such subsidiary as an unrestricted or excluded subsidiary; (ii) in connection with any sale or disposition of the capital stock of the subsidiary guarantor; and (iii) upon our exercise of our legal defeasance option or our covenant defeasance option, all of which are more fully described in the Indenture dated as of October 3, 2012 among us, the Guarantors and US Bank National Association, as Trustee, relating to the 5.375% Notes.

The following presents the condensed consolidating statements of income, including comprehensive income for the three months and six months ended June 30, 2015 and 2014, the condensed consolidating balance sheets as of June 30, 2015 and December 31, 2014 and the condensed consolidating cash flows for the six months ended June 30, 2015 and 2014. These financial statements reflect the Parent, the guarantor subsidiaries (on a combined basis), the non-guarantor subsidiaries (on a combined basis) and elimination entries necessary to combine such entities on a consolidated basis. Our presentation of the Guarantors’ statement of income for the three months and six months ended June 30, 2014 has been restated to correctly apply the equity method of accounting to reflect the Guarantors’ equity interests in certain Non Guarantors. Such changes are reflected under the caption “Equity in earnings of subsidiaries” in the accompanying condensed consolidating statements of income. The correction had no impact on any financial information of the Parent Company, the Non Guarantors or on the condensed consolidating balance sheet or the statement of cash flows.

Condensed Consolidating Statement of Income for the

three months ended June 30, 2015

In thousands		Parent Company				Guarantors				Non Guarantors				Adjustments/ Eliminations				Consolidated
Net sales		$	212,920			$	—			$	197,883			$	—			$	410,803
Energy and related sales, net			715				—				—				—				715
Total revenues			213,635				—				197,883				—				411,518
Costs of products sold			213,316				—				165,369				—				378,685
Gross profit			319				—				32,514				—				32,833
Selling, general and administrative expenses			15,661				15				13,461				—				29,137
Gains on dispositions of plant, equipment and timberlands, net			(51	)			—				(60	)			—				(111	)
Operating income (loss)			(15,291	)			(15	)			19,113				—				3,807
Other non-operating income (expense)
Interest expense			(4,608	)			—				(6,370	)			6,626				(4,352	)
Interest income			169				6,498				36				(6,626	)			77
Equity in earnings of subsidiaries			17,879				11,761				—				(29,640	)			—
Other, net			(745	)			(20	)			980				—				215
Total other non-operating income (expense)			12,695				18,239				(5,354	)			(29,640	)			(4,060	)
Income (loss) before income taxes			(2,596	)			18,224				13,759				(29,640	)			(253	)
Income tax provision (benefit)			(5,444	)			445				1,898				—				(3,101	)
Net income			2,848				17,779				11,861				(29,640	)			2,848
Other comprehensive income (loss)			17,087				13,680				(9,958	)			(3,722	)			17,087
Comprehensive income		$	19,935			$	31,459			$	1,903			$	(33,362	)		$	19,935

Condensed Consolidating Statement of Income for the

three months ended June 30, 2014

In thousands		Parent Company				Guarantors				Non Guarantors				Adjustments/ Eliminations				Consolidated
Net sales		$	217,864			$	4			$	227,478			$	(5	)		$	445,341
Energy and related sales, net			790				—				—				—				790
Total revenues			218,654				4				227,478				(5	)			446,131
Costs of products sold			215,756				4				188,939				(5	)			404,694
Gross profit			2,898				—				38,539				—				41,437
Selling, general and administrative expenses			16,555				143				15,616				—				32,314
Gains on dispositions of plant, equipment and timberlands, net			(162	)			(1,316	)			(4	)			—				(1,482	)
Operating income (loss)			(13,495	)			1,173				22,927				—				10,605
Other non-operating income (expense)
Interest expense			(4,756	)			—				(2,815	)			2,809				(4,762	)
Interest income			164				2,656				41				(2,809	)			52
Equity in earnings of subsidiaries			19,021				15,482				—				(34,503	)			—
Other, net			(338	)			11				389				(1	)			61
Total other non-operating income (expense)			14,091				18,149				(2,385	)			(34,504	)			(4,649	)
Income before income taxes			596				19,322				20,542				(34,504	)			5,956
Income tax provision (benefit)			(4,073	)			715				4,645				—				1,287
Net income			4,669				18,607				15,897				(34,504	)			4,669
Other comprehensive income (loss)			3,026				(550	)			1,098				(548	)			3,026
Comprehensive income		$	7,695			$	18,057			$	16,995			$	(35,052	)		$	7,695

Condensed Consolidating Statement of Income for the

six months ended June 30, 2015

In thousands		Parent Company				Guarantors				Non Guarantors				Adjustments/ Eliminations				Consolidated
Net sales		$	432,796			$	—			$	395,476			$	—			$	828,272
Energy and related sales, net			2,783				—				—				—				2,783
Total revenues			435,579				—				395,476				—				831,055
Costs of products sold			415,835				—				330,279				—				746,114
Gross profit			19,744				—				65,197				—				84,941
Selling, general and administrative expenses			32,843				205				27,361				—				60,409
Gains on dispositions of plant, equipment and timberlands, net			(1,522	)			(1,183	)			(60	)			—				(2,765	)
Operating income (loss)			(11,577	)			978				37,896				—				27,297
Other non-operating income (expense)
Interest expense			(9,425	)			—				(12,764	)			13,329				(8,860	)
Interest income			332				13,097				41				(13,328	)			142
Equity in earnings of subsidiaries			34,242				21,236				—				(55,478	)			—
Other, net			(1,460	)			(146	)			1,635				(1	)			28
Total other non-operating income (expense)			23,689				34,187				(11,088	)			(55,478	)			(8,690	)
Income before income taxes			12,112				35,165				26,808				(55,478	)			18,607
Income tax provision (benefit)			(4,661	)			1,349				5,146				—				1,834
Net income			16,773				33,816				21,662				(55,478	)			16,773
Other comprehensive income (loss)			(18,198	)			(24,870	)			28,890				(4,020	)			(18,198	)
Comprehensive income (loss)		$	(1,425	)		$	8,946			$	50,552			$	(59,498	)		$	(1,425	)

Condensed Consolidating Statement of Income for the

six months ended June 30, 2014

In thousands		Parent Company				Guarantors				Non Guarantors				Adjustments/ Eliminations				Consolidated
Net sales		$	443,695			$	21			$	457,367			$	(21	)		$	901,062
Energy and related sales, net			6,052				—				—				—				6,052
Total revenues			449,747				21				457,367				(21	)			907,114
Costs of products sold			432,472				21				378,165				(21	)			810,637
Gross profit			17,275				—				79,202				—				96,477
Selling, general and administrative expenses			34,347				156				31,362				—				65,865
Gains on dispositions of plant, equipment and timberlands, net			(974	)			(1,317	)			—				—				(2,291	)
Operating income (loss)			(16,098	)			1,161				47,840				—				32,903
Other non-operating income (expense)
Interest expense			(9,494	)			—				(5,545	)			5,465				(9,574	)
Interest income			316				5,214				48				(5,465	)			113
Equity in earnings of subsidiaries			41,520				35,944				—				(77,464	)			—
Other, net			(1,220	)			21				1,471				—				272
Total other non-operating income (expense)			31,122				41,179				(4,026	)			(77,464	)			(9,189	)
Income before income taxes			15,024				42,340				43,814				(77,464	)			23,714
Income tax provision (benefit)			(4,293	)			1,628				7,062				—				4,397
Net income			19,317				40,712				36,752				(77,464	)			19,317
Other comprehensive income (loss)			5,991				(549	)			1,983				(1,434	)			5,991
Comprehensive income		$	25,308			$	40,163			$	38,735			$	(78,898	)		$	25,308

Condensed Consolidating Balance Sheet as of

June 30, 2015

In thousands		Parent Company				Guarantors				Non Guarantors				Adjustments/ Eliminations				Consolidated
Assets
Cash and cash equivalents		$	34,316			$	308			$	31,138			$	—			$	65,762
Other current assets			233,505				217,912				284,051				(245,597	)			489,871
Plant, equipment and timberlands, net			278,537				961				414,421				—				693,919
Investments in subsidiaries			723,851				400,722				—				(1,124,573	)			—
Other assets			129,829				95,693				151,541				(96,178	)			280,885
Total assets		$	1,400,038			$	715,596			$	881,151			$	(1,466,348	)		$	1,530,437
Liabilities and Shareholders’ Equity
Current liabilities		$	359,940			$	1,939			$	178,455			$	(251,953	)		$	288,381
Long-term debt			250,000				—				659,770				(526,623	)			383,147
Deferred income taxes			50,564				(452	)			51,305				1,020				102,437
Other long-term liabilities			100,609				—				107,279				(90,341	)			117,547
Total liabilities			761,113				1,487				996,809				(867,897	)			891,512
Shareholders’ equity			638,925				714,109				(115,658	)			(598,451	)			638,925
Total liabilities and shareholders’ equity		$	1,400,038			$	715,596			$	881,151			$	(1,466,348	)		$	1,530,437

Condensed Consolidating Balance Sheet as of

December 31, 2014

In thousands		Parent Company				Guarantors				Non Guarantors				Adjustments/ Eliminations				Consolidated
Assets
Cash and cash equivalents		$	42,208			$	514			$	57,115			$	—			$	99,837
Other current assets			218,544				420,451				263,567				(427,777	)			474,785
Plant, equipment and timberlands, net			255,255				991				441,362				—				697,608
Investments in subsidiaries			824,480				399,931				—				(1,224,411	)			—
Other assets			121,125				—				186,129				(17,980	)			289,274
Total assets		$	1,461,612			$	821,887			$	948,173			$	(1,670,168	)		$	1,561,504
Liabilities and Shareholders’ Equity
Current liabilities		$	403,662			$	3,394			$	307,737			$	(435,062	)		$	279,731
Long-term debt			250,000				—				721,457				(572,579	)			398,878
Deferred income taxes			46,483				(453	)			70,275				(12,289	)			104,016
Other long-term liabilities			112,358				—				11,633				5,779				129,770
Total liabilities			812,503				2,941				1,111,102				(1,014,151	)			912,395
Shareholders’ equity			649,109				818,946				(162,929	)			(656,017	)			649,109
Total liabilities and shareholders’ equity		$	1,461,612			$	821,887			$	948,173			$	(1,670,168	)		$	1,561,504

Condensed Consolidating Statement of Cash Flows for the

six months ended June 30, 2015

In thousands		Parent Company				Guarantors				Non Guarantors				Adjustments/ Eliminations				Consolidated
Net cash provided (used) by
Operating activities		$	(4,343	)		$	(684	)		$	30,540			$	—			$	25,513
Investing activities
Expenditures for purchases of plant, equipment and timberlands			(30,241	)			—				(14,334	)			—				(44,575	)
Proceeds from disposal plant, equipment and timberlands, net			1,581				1,213				257				—				3,051
Repayments from intercompany loans			—				48,855				—				(48,855	)			—
Advances of intercompany loans			—				(38,690	)			—				38,690				—
Intercompany capital (contributed) returned			10,500				(300	)			—				(10,200	)			—
Other			(1,600	)			—				—				—				(1,600	)
Total investing activities			(19,760	)			11,078				(14,077	)			(20,365	)			(43,124	)
Financing activities
Net repayments of indebtedness			—				—				(1,492	)			—				(1,492	)
Payments of borrowing costs			(1,329	)			—				—				—				(1,329	)
Payment of dividends to shareholders			(9,992	)			—				—				—				(9,992	)
Repayments of intercompany loans			(9,158	)			—				(39,697	)			48,855				—
Borrowings of intercompany loans			38,690				—				—				(38,690	)			—
Intercompany capital received (returned)			—				(10,600	)			400				10,200				—
Payments related to share-based compensation awards and other			(2,000	)			—				—				—				(2,000	)
Total financing activities			16,211				(10,600	)			(40,789	)			20,365				(14,813	)
Effect of exchange rate on cash			—				—				(1,651	)			—				(1,651	)
Net (decrease) increase in cash			(7,892	)			(206	)			(25,977	)			—				(34,075	)
Cash at the beginning of period			42,208				514				57,115				—				99,837
Cash at the end of period		$	34,316			$	308			$	31,138			$	—			$	65,762

Condensed Consolidating Statement of Cash Flows for the

six months ended June 30, 2014

In thousands		Parent Company				Guarantors				Non Guarantors				Adjustments/ Eliminations				Consolidated
Net cash provided (used) by
Operating activities		$	(15,054	)		$	1,773			$	(8,085	)		$				$	(21,366	)
Investing activities
Expenditures for purchases of plant, equipment and timberlands			(15,963	)			—				(14,193	)			—				(30,156	)
Proceeds from disposal plant, equipment and timberlands, net			1,000				1,355				5				—				2,360
Advances of intercompany loans			—				(3,450	)			—				3,450				—
Other			(100	)			—				—				—				(100	)
Total investing activities			(15,063	)			(2,095	)			(14,188	)			3,450				(27,896	)
Financing activities
Net proceeds from indebtedness			—				—				(25,425	)			—				(25,425	)
Payment of dividends to shareholders			(9,164	)			—				—				—				(9,164	)
Repurchases of common stock			(9,158	)			—				—				—				(9,158	)
Borrowings of intercompany loans			3,450				—				—				(3,450	)			—
Payments related to share-based compensation awards and other			(1,816	)			—				—				—				(1,816	)
Total financing activities			(16,688	)			—				(25,425	)			(3,450	)			(45,563	)
Effect of exchange rate on cash			—				—				(41	)			—				(41	)
Net decrease in cash			(46,805	)			(322	)			(47,739	)			—				(94,866	)
Cash at the beginning of period			56,216				501				66,165				—				122,882
Cash at the end of period		$	9,411			$	179			$	18,426			$	—			$	28,016

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X

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef



-Publisher FASB



-Name Accounting Standards Codification



-Topic 810



-SubTopic 10



-Section 45



-Paragraph 11



-URI http://asc.fasb.org/extlink&oid=51664549&loc=d3e5283-111683



Reference 2: http://www.xbrl.org/2003/role/presentationRef



-Publisher FASB



-Name Accounting Standards Codification



-Topic 235



-SubTopic 10



-Section S99



-Paragraph 3



-Subparagraph (SX 210.12-04)



-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e24072-122690



Reference 3: http://www.xbrl.org/2003/role/presentationRef



-Publisher SEC



-Name Regulation S-X (SX)



-Number 210



-Section 04



-Paragraph c



-Article 5



Reference 4: http://www.xbrl.org/2003/role/presentationRef



-Publisher SEC



-Name Regulation S-X (SX)



-Number 210



-Section 06



-Article 9



Reference 5: http://www.xbrl.org/2003/role/presentationRef



-Publisher SEC



-Name Regulation S-X (SX)



-Number 210



-Section 05



-Paragraph c



-Article 7

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