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Condensed Consolidating Financial Statements

3 Months Ended

Mar. 31, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Statements

15. 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., Glatfelter Composite Fibers N. A., Inc. (“CFNA”), Glatfelter Advance Materials N.A., Inc. (“GAMNA”), 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 and the First Supplemental Indenture dated as of October 27, 2015, among us, the Guarantors and US Bank National Association, as Trustee, relating to the 5.375% Notes.

The following presents our condensed consolidating statements of income, including comprehensive income and cash flows for the three months ended March 31, 2016 and 2015 and our condensed consolidating balance sheets as of March 31, 2016 and December 31, 2015. The condensed consolidating financial statements set forth below include the addition of CFNA and GAMNA as guarantors during 2015 and all prior periods have been restated to retroactively reflect this change.

Condensed Consolidating Statement of Income for the Three months ended March 31, 2016

In thousands		Parent Company				Guarantors				Non Guarantors				Adjustments/ Eliminations				Consolidated
Net sales		$	217,888			$	18,646			$	184,466			$	(18,782	)		$	402,218
Energy and related sales, net			666				—				—				—				666
Total revenues			218,554				18,646				184,466				(18,782	)			402,884
Costs of products sold			191,959				18,050				153,814				(18,782	)			345,041
Gross profit			26,595				596				30,652				—				57,843
Selling, general and administrative expenses			18,445				(185	)			13,598				—				31,858
Loss on dispositions of plant, equipment and timberlands, net			2				—				22				—				24
Operating income			8,148				781				17,032				—				25,961
Other non-operating income (expense)
Interest expense			(4,415	)			—				(787	)			1,086				(4,116	)
Interest income			181				992				4				(1,086	)			91
Equity in earnings of subsidiaries			12,872				11,754				—				(24,626	)			—
Other, net			(542	)			20				(178	)			—				(700	)
Total other non-operating income (expense)			8,096				12,766				(961	)			(24,626	)			(4,725	)
Income before income taxes			16,244				13,547				16,071				(24,626	)			21,236
Income tax provision			76				675				4,317				—				5,068
Net income			16,168				12,872				11,754				(24,626	)			16,168
Other comprehensive income			15,742				13,553				13,117				(26,670	)			15,742
Comprehensive income		$	31,910			$	26,425			$	24,871			$	(51,296	)		$	31,910

Condensed Consolidating Statement of Income for the Three months ended March 31, 2015

In thousands		Parent Company				Guarantors				Non Guarantors				Adjustments/ Eliminations				Consolidated
Net sales		$	219,876			$	20,150			$	198,098			$	(20,655	)		$	417,469
Energy and related sales, net			2,068				—				—				—				2,068
Total revenues			221,944				20,150				198,098				(20,655	)			419,537
Costs of products sold			203,682				19,334				165,068				(20,655	)			367,429
Gross profit			18,262				816				33,030				—				52,108
Selling, general and administrative expenses			17,182				497				13,593				—				31,272
Gains on dispositions of plant, equipment and timberlands, net			(1,471	)			(1,183	)			—				—				(2,654	)
Operating income			2,551				1,502				19,437				—				23,490
Other non-operating income (expense)
Interest expense			(4,817	)			—				(6,394	)			6,703				(4,508	)
Interest income			163				6,599				5				(6,702	)			65
Equity in earnings of subsidiaries			17,084				10,194				—				(27,278	)			—
Other, net			(715	)			(130	)			659				(1	)			(187	)
Total other non-operating income (expense)			11,715				16,663				(5,730	)			(27,278	)			(4,630	)
Income before income taxes			14,266				18,165				13,707				(27,278	)			18,860
Income tax provision			341				1,081				3,513				—				4,935
Net income			13,925				17,084				10,194				(27,278	)			13,925
Other comprehensive income (loss)			(35,285	)			(38,550	)			38,848				(298	)			(35,285	)
Comprehensive income (loss)		$	(21,360	)		$	(21,466	)		$	49,042			$	(27,576	)		$	(21,360	)

Condensed Consolidating Balance Sheet as of March 31, 2016

In thousands		Parent Company				Guarantors				Non Guarantors				Adjustments/ Eliminations				Consolidated
Assets
Cash and cash equivalents		$	29,155			$	5,995			$	35,112			$	—			$	70,262
Other current assets			199,170				247,480				257,534				(245,790	)			458,394
Plant, equipment and timberlands, net			305,347				14,782				415,794				—				735,923
Investments in subsidiaries			780,955				532,528				—				(1,313,483	)			—
Other assets			109,815				—				147,046				—				256,861
Total assets		$	1,424,442			$	800,785			$	855,486			$	(1,559,273	)		$	1,521,440
Liabilities and Shareholders’ Equity
Current liabilities		$	369,019			$	19,391			$	146,722			$	(245,789	)		$	289,343
Long-term debt			247,228				—				109,167				—				356,395
Deferred income taxes			31,118				125				50,397				—				81,640
Other long-term liabilities			86,905				314				16,672				—				103,891
Total liabilities			734,270				19,830				322,958				(245,789	)			831,269
Shareholders’ equity			690,172				780,955				532,528				(1,313,484	)			690,171
Total liabilities and shareholders’ equity		$	1,424,442			$	800,785			$	855,486			$	(1,559,273	)		$	1,521,440

Condensed Consolidating Balance Sheet as of December 31, 2015

In thousands		Parent Company				Guarantors				Non Guarantors				Adjustments/ Eliminations				Consolidated
Assets
Cash and cash equivalents		$	59,130			$	465			$	45,709			$	—			$	105,304
Other current assets			199,690				238,515				239,367				(230,509	)			447,063
Plant, equipment and timberlands, net			286,334				1,114				411,416				—				698,864
Investments in subsidiaries			737,450				507,116				—				(1,244,566	)			—
Other assets			106,586				—				142,599				—				249,185
Total assets		$	1,389,190			$	747,210			$	839,091			$	(1,475,075	)		$	1,500,416
Liabilities and Shareholders’ Equity
Current liabilities		$	363,037			$	9,725			$	162,081			$	(230,523	)		$	304,320
Long-term debt			247,075				—				106,221				—				353,296
Deferred income taxes			28,561				(79	)			47,976				—				76,458
Other long-term liabilities			87,270				—				15,825				—				103,095
Total liabilities			725,943				9,646				332,103				(230,523	)			837,169
Shareholders’ equity			663,247				737,564				506,988				(1,244,552	)			663,247
Total liabilities and shareholders’ equity		$	1,389,190			$	747,210			$	839,091			$	(1,475,075	)		$	1,500,416

Condensed Consolidating Statement of Cash Flows for the Three months ended March 31, 2016

In thousands		Parent Company				Guarantors				Non Guarantors				Adjustments/ Eliminations				Consolidated
Net cash provided (used) by Operating activities		$	10,563			$	(74	)		$	952			$	—			$	11,441
Investing activities
Expenditures for purchases of plant, equipment and timberlands			(22,297	)			(13,686	)			(7,311	)			—				(43,294	)
Proceeds from disposal plant, equipment and timberlands, net			21				—				12				—				33
Repayments from intercompany loans			—				4,000				—				(4,000	)			—
Advances of intercompany loans			—				(3,210	)			—				3,210				—
Intercompany capital contributed			(17,000	)			(500	)			—				17,500				—
Other			(300	)			—				—				—				(300	)
Total investing activities			(39,576	)			(13,396	)			(7,299	)			16,710				(43,561	)
Financing activities
Net repayments of indebtedness			—				—				(1,926	)			—				(1,926	)
Payments of borrowing costs			(51	)			—				—				—				(51	)
Payment of dividends to shareholders			(5,231	)			—				—				—				(5,231	)
Repayments of intercompany loans			—				—				(4,000	)			4,000				—
Borrowings of intercompany loans			3,210				—				—				(3,210	)			—
Intercompany capital (returned) received			—				17,000				500				(17,500	)			—
Proceeds from government grants			1,861				2,000				—				—				3,861
Payments related to share-based compensation awards and other			(751	)			—				—				—				(751	)
Total financing activities			(962	)			19,000				(5,426	)			(16,710	)			(4,098	)
Effect of exchange rate on cash			—				—				1,176				—				1,176
Net increase (decrease) in cash			(29,975	)			5,530				(10,597	)			—				(35,042	)
Cash at the beginning of period			59,130				465				45,709				—				105,304
Cash at the end of period		$	29,155			$	5,995			$	35,112			$	—			$	70,262

Condensed Consolidating Statement of Cash Flows for the Three months ended March 31, 2015

In thousands		Parent Company				Guarantors				Non Guarantors				Adjustments/ Eliminations				Consolidated
Net cash provided (used) by Operating activities		$	(975	)		$	(3	)		$	3,133			$	—			$	2,155
Investing activities
Expenditures for purchases of plant, equipment and timberlands			(14,513	)			—				(7,236	)			—				(21,749	)
Proceeds from disposal plant, equipment and timberlands, net			1,513				1,213				—				—				2,726
Repayments from intercompany loans			—				31,556				—				(31,556	)			—
Advances of intercompany loans			—				(30,690	)			—				30,690				—
Other			(1,600	)			—				—				—				(1,600	)
Total investing activities			(14,600	)			2,079				(7,236	)			(866	)			(20,623	)
Financing activities
Payments of borrowing costs			(1,008	)			—				—				—				(1,008	)
Payment of dividends to shareholders			(4,774	)			—				—				—				(4,774	)
Repayments of intercompany loans			—				—				(31,556	)			31,556				—
Borrowings of intercompany loans			30,690				—				—				(30,690	)			—
Payments related to share-based compensation awards and other			(1,408	)			—				—				—				(1,408	)
Total financing activities			23,500				—				(31,556	)			866				(7,190	)
Effect of exchange rate on cash			—				—				(2,609	)			—				(2,609	)
Net increase (decrease) in cash			7,925				2,076				(38,268	)			—				(28,267	)
Cash at the beginning of period			42,208				509				57,120				—				99,837
Cash at the end of period		$	50,133			$	2,585			$	18,852			$	—			$	71,570

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- References

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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.

+ References

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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