XML 62 R15.htm IDEA: XBRL DOCUMENT
v2.4.1.9

Investments | 3 Months Ended
--- | ---
Mar. 31, 2015
Equity Method Investments and Joint Ventures [Abstract] |
Investments | In August 2007 and December 2008, the Company made an aggregate investment of $7.5 million in kaléo, a privately held specialty pharmaceutical company. The mission of kaléo is to set a new standard in life-saving personal medical products designed to enable superior treatment outcomes, improved cost effectiveness and intuitive patient administration. Tredegar’s ownership interest on a fully diluted basis is approximately 20%, and the investment is accounted for under the fair value method. At the time of the initial investment, the Company elected the fair value option over the equity method of accounting since its investment objectives were similar to those of venture capitalists, which typically do not have controlling financial interests. The estimated fair value of the investment in kaléo (also the carrying value, which is included in “Other assets and deferred charges” in the consolidated balance sheet) was $39.1 million at March 31, 2015 and December 31, 2014. The fair value estimates are based upon significant unobservable (Level 3) inputs since there is no secondary market for our ownership interest. Accordingly, until the next round of financing or other significant financial transaction, value estimates will primarily be based on assumptions relating to meeting product development and commercialization milestones, corresponding cash flow projections (projections of sales, costs, expenses, capital expenditures and working capital investment) and discounting of these factors for the high degree of risk. Adjustments to the estimated fair value of the Company’s investment in kaléo will be made in the period during which changes can be quantified. The Company did not recognize an unrealized gain or loss on its investment in kaléo in the first three months of 2015 and 2014. In the first quarter of 2014, the weighted average cost of capital used to discount cash flow projections was decreased to reflect lower product risk after the U.S. Food and Drug Administration's approval of kaléo's naloxone auto-injector for emergency treatment of known or suspected opioid overdoses and reduced funding risk subsequent to kaléo securing new debt financing, both of which occurred in April 2014. The favorable impact of a lower weighted average cost of capital used to discount cash flow projections in the first quarter of 2014 was offset by adjustments to the amount and timing of the projected receipt of royalty and milestone payments from commercial sales of kaléo's licensed epinephrine auto-injector for treatment of allergic reactions. The fair market valuation of the Company’s interest in kaléo is sensitive to changes in the weighted average cost of capital used to discount cash flow projections for the high degree of risk associated with meeting development and commercialization milestones as anticipated. The weighted average cost of capital used in the fair market valuation of Tredegar’s interest in kaléo was 45% at March 31, 2015 and December 31, 2014. At March 31, 2015, the effect of a 500 basis point decrease in the weighted average cost of capital assumption would have increased the fair value of the interest in kaléo by approximately $7 million, and a 500 basis point increase in the weighted average cost of capital assumption would have decreased the fair value of the interest by approximately $5 million. Had the Company not elected to account for its investment under the fair value method, it would have been required to use the equity method of accounting. The condensed balance sheets for kaléo at March 31, 2015 and December 31, 2014 and condensed statement of operations for the three months ended March 31, 2015 and 2014, as reported to the Company by kaléo, are provided below:
(In Thousands) | March 31, 2015 |  | December 31, 2014 |  |  | March 31, 2015 |  | December 31, 2014
Assets: |  |  |  |  | Liabilities & Equity: |  |  |
Cash & short-term investments | $ | 106,922 |  |  | $ | 117,589 |  |  |  |  |  |
Restricted cash | 11,192 |  |  | 14,498 |  |  | Other current liabilities | $ | 8,808 |  |  | $ | 8,123 |
Other current assets | 21,540 |  |  | 17,916 |  |  | Other noncurrent liabilities | 1,183 |  |  | 1,247 |
Property & equipment | 10,207 |  |  | 10,824 |  |  | Long term debt, net of discount | 149,471 |  |  | 149,471 |
Patents | 2,708 |  |  | 2,702 |  |  | Redeemable preferred stock | 23,186 |  |  | 22,946 |
Other long-term assets | 2,757 |  |  | 2,857 |  |  | Equity | (27,322 | ) |  | (15,401 | )
Total assets | $ | 155,326 |  |  | $ | 166,386 |  |  | Total liabilities & equity | $ | 155,326 |  |  | $ | 166,386 |
| Three Months Ended March 31,
| 2015 |  | 2014
Revenues & Expenses: |  |  |
Revenues | $ | 4,850 |  |  | $ | 2,558 |
Cost of goods sold | (2,330 | ) |  | — |
Expenses and other, net (a) | (14,384 | ) |  | (8,316 | )
Income tax benefit (expense) | (4 | ) |  | 2,239 |
Net income (loss) | $ | (11,868 | ) |  | $ | (3,519 | )
(a) “Expenses and other, net” includes selling, general and administrative expense, research and development expense, interest expense and other income (expense), net. The Company’s investment in the Harbinger Fund had a carrying value (included in “Other assets and deferred charges”) of $1.8 million at March 31, 2015 and December 31, 2014, respectively. The carrying value at March 31, 2015 reflected Tredegar’s cost basis in its investment in the Harbinger Fund, net of total withdrawal proceeds received and unrealized losses. The Company recorded unrealized losses of $0.2 million in the first three months of 2014, (none in the first three months of 2015) on its investment in the Harbinger Fund (included in “Other income (expense), net” in the consolidated statements of income) as a result of a reduction in the value of the investment that is not expected to be temporary. There were no withdrawal proceeds in the first three months of 2015 and 2014. The timing and amount of future installments of withdrawal proceeds, which commenced in August 2010, were not known as of March 31, 2015. Gains on the Company’s investment in the Harbinger Fund will be recognized when the amounts expected to be collected from any withdrawal from the investment are known, which will likely be when cash in excess of the remaining carrying value is received. Losses will be recognized when management believes it is probable that future withdrawal proceeds will not exceed the remaining carrying value. Tredegar has investment property in Alleghany and Bath Counties, Virginia. The carrying value in this investment property (included in “Other assets and deferred charges” on the consolidated balance sheets) was $2.6 million at March 31, 2015 and December 31, 2014.

X
- Details
Name: | us-gaap_EquityMethodInvestmentsAndJointVenturesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for investments and other noncurrent assets. + References No definition available. + Details
Name: | us-gaap_InvestmentsAndOtherNoncurrentAssetsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration