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1. THE COMPANY
Royal Gold, Inc. ("Royal Gold", the "Company", "we", "us", or "our"), together with its subsidiaries, is engaged in the business of acquiring and managing precious metals royalties, metal streams, and similar interests. Royalties are non-operating interests in mining projects that provide the right to revenue or metals produced from the project after deducting specified costs, if any. A metal stream is a purchase agreement that provides, in exchange for an upfront deposit payment, the right to purchase all or a portion of one or more metals produced from a mine, at a price determined for the life of the transaction by the purchase agreement. We may use the term "royalty interest" in these notes to the consolidated financial statements to refer to royalties, gold, silver or other metal stream interests, and other similar interests.
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Summary of Significant Accounting Policies
Use of Estimates
The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ significantly from those estimates.
Our most critical accounting estimates relate to our assumptions regarding future gold, silver, nickel, copper and other metal prices and the estimates of reserves, production and recoveries of third-party mine operators. We rely on reserve estimates reported by the operators on the properties in which we have royalty interests. These estimates and the underlying assumptions affect the potential impairments of long-lived assets and the ability to realize income tax benefits associated with deferred tax assets. These estimates and assumptions also affect the rate at which we recognize revenue or charge depreciation, depletion and amortization to earnings. On an ongoing basis, management evaluates these estimates and assumptions; however, actual amounts could differ from these estimates and assumptions. Differences between estimates and actual amounts could differ significantly and are recorded in the period that the actual amounts are known.
Basis of Consolidation
The consolidated financial statements include the accounts of Royal Gold, Inc. and its wholly-owned subsidiaries. All intercompany accounts, transactions, income and expenses, and profits or losses have been eliminated on consolidation.
Cash and Equivalents
Cash and equivalents consist of all cash balances and highly liquid investments with an original maturity of three months or less. Cash and equivalents are primarily held in cash deposit accounts and United States treasury bills with maturities less than 90 days.
Royalty and Stream Interests
Royalty and stream interests include acquired royalty and stream interests in production, development and exploration stage properties. The costs of acquired royalty and stream interests are capitalized as tangible assets as such interests do not meet the definition of a financial asset under Accounting Standards Codification ("ASC") guidance.
Acquisition costs of production stage royalty and stream interests are depleted using the units of production method over the life of the mineral property (as royalty payments are recognized or sales occur under stream interests), which is estimated using proven and probable reserves as provided by the operator. Acquisition costs of royalty and stream interests on development stage mineral properties, which are not yet in production, are not amortized until the property begins production. Acquisition costs of royalty interests on exploration stage mineral properties, where there are no proven and probable reserves, are not amortized. At such time as the associated exploration stage mineral interests are converted to proven and probable reserves, the cost basis is amortized over the remaining life of the mineral property, using proven and probable reserves. The carrying values of exploration stage mineral interests are evaluated for impairment at such time as information becomes available indicating that the costs may not be recoverable from future production. Exploration costs are charged to operations when incurred.
Available-for-Sale Securities
Investments in securities that management does not have the intent to sell in the near term and that have readily determinable fair values are classified as available-for-sale securities. Unrealized gains and losses on these investments are recorded in accumulated other comprehensive income as a separate component of stockholders' equity, except that declines in market value judged to be other than temporary are recognized in determining net income. When investments are sold, the realized gains and losses on these investments, determined using the specific identification method, are included in determining net income.
The Company's policy for determining whether declines in fair value of available-for-sale securities are other than temporary includes a quarterly analysis of the investments and a review by management of all investments for which the cost exceeds the fair value. Any temporary declines in fair value are recorded as a charge to other comprehensive income. This evaluation considers a number of factors including, but not limited to, the length of time and extent to which the fair value has been less than cost, the financial condition and near term prospects of the issuer, and management's ability and intent to hold the securities until fair value recovers. If such impairment is determined by the Company to be other-than-temporary, the investment's cost basis is written down to fair value and recorded in net income during the period the Company determines such impairment to be other-than-temporary. The new cost basis is not changed for subsequent recoveries in fair value. Refer to Note 5 for further discussion on our available-for-sale securities.
Asset Impairment
We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts of an asset or group of assets may not be recoverable. The recoverability of the carrying value of royalty interests in production and development stage mineral properties is evaluated based upon estimated future undiscounted net cash flows from each royalty interest property using estimates of proven and probable reserves and other relevant information received from the operator. We evaluate the recoverability of the carrying value of royalty interests in exploration stage mineral properties in the event of significant decreases in the price of gold, silver, copper, nickel and other metals, and whenever new information regarding the mineral properties is obtained from the operator indicating that production will not likely occur in the future, thus affecting the future recoverability of our royalty interests. Impairments in the carrying value of each property are measured and recorded to the extent that the carrying value in each property exceeds its estimated fair value, which is generally calculated using estimated future discounted cash flows.
Our estimates of gold, silver, copper, nickel and other metal prices, operator's estimates of proven and probable reserves related to our royalty interests, and operator's estimates of operating, capital and reclamation costs are subject to certain risks and uncertainties which may affect the recoverability of our investment in these royalty interests in mineral properties. Although we have made our best assessment of these factors based on current conditions, it is possible that changes could occur, which could adversely affect the net cash flows expected to be generated from these royalty interests.
Revenue
Revenue is recognized in accordance with the guidance of ASC 605 and based upon amounts contractually due pursuant to the underlying royalty or stream agreement. Specifically, revenue is recognized in accordance with the terms of the underlying royalty or stream agreements subject to (i) the pervasive evidence of the existence of the arrangements; (ii) the risks and rewards having been transferred; (iii) the royalty or stream being fixed or determinable; and (iv) the collectability being reasonably assured. For royalty payments received in-kind, revenue is recorded at the average spot price of gold for the period in which the royalty was earned. For our streaming agreements, we sell most of the delivered gold within three weeks of receipt and recognize revenue when the metal received is sold.
Gold Sales
Gold received under our metal streaming agreements is sold primarily in the spot market or under average rate gold forward contracts. For our gold sold in the spot market, the sales price is fixed at the delivery date based on the gold spot price, while the sales price for our gold sold under average rate gold forward contracts is determined by the average gold price under the term of the contract, typically 15 consecutive trading days shortly after the receipt and purchase of the gold. Revenue from gold sales is recognized on the date of the settlement, which is also the date that title to the gold passes to the purchaser.
Cost of Sales
Cost of sales is specific to our streaming agreement for Mt. Milligan and is the result of the Company's purchases of gold for a cash payment of the lesser of $435 per ounce, or the prevailing market price of gold when purchased.
Production taxes
Certain royalty payments are subject to production taxes (or mining proceeds taxes), which are recognized at the time of revenue recognition. Production taxes are not income taxes and are included within the costs and expenses section in the Company's consolidated statements of operations and comprehensive income.
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with the guidance of ASC 718. The Company recognizes all share-based payments to employees, including grants of employee stock options, stock-settled stock appreciation rights ("SSARs"), restricted stock and performance stock, in its financial statements based upon their fair values.
Operating Segments and Geographical Information
The Company manages its business under a single operating segment, consisting of the acquisition and management of royalty and stream interests. Royal Gold's revenue and long-lived assets (royalty and stream interests, net) are geographically distributed as shown in the following table.
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Revenue | Royalty and Stream Interests, net |
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Fiscal Year Ended June 30, |
Fiscal Year Ended June 30, |
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2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||
Canada |
34 | % | 24 | % | 24 | % | 53 | % | 52 | % | 43 | % | |||||||
Chile |
21 | % | 29 | % | 25 | % | 31 | % | 30 | % | 35 | % | |||||||
Mexico |
18 | % | 19 | % | 20 | % | 7 | % | 7 | % | 9 | % | |||||||
United States |
15 | % | 17 | % | 18 | % | 3 | % | 4 | % | 5 | % | |||||||
Australia |
4 | % | 4 | % | 5 | % | 3 | % | 3 | % | 3 | % | |||||||
Africa |
3 | % | 3 | % | 4 | % | 1 | % | 1 | % | 1 | % | |||||||
Other |
5 | % | 4 | % | 4 | % | 2 | % | 3 | % | 4 | % |
Income Taxes
The Company accounts for income taxes in accordance with the guidance of Accounting Standards Codification Topic 740. The Company's annual tax rate is based on income, statutory tax rates in effect and tax planning opportunities available to us in the various jurisdictions in which the Company operates. Significant judgment is required in determining the annual tax expense, current tax assets and liabilities, deferred tax assets and liabilities, and our future taxable income, both as a whole and in various tax jurisdictions, for purposes of assessing our ability to realize future benefit from our deferred tax assets. Actual income taxes could vary from these estimates due to future changes in income tax law, significant changes in the jurisdictions in which we operate or unpredicted results from the final determination of each year's liability by taxing authorities.
The Company's deferred income taxes reflect the impact of temporary differences between the reported amounts of assets and liabilities for financial reporting purposes and such amounts measured by tax laws and regulations. In evaluating the realizability of the deferred tax assets, management considers both positive and negative evidence that may exist, such as earnings history, reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies in each tax jurisdiction. A valuation allowance may be established to reduce our deferred tax assets to the amount that is considered more likely than not to be realized through the generation of future taxable income and other tax planning strategies.
The Company has asserted the indefinite reinvestment of certain foreign subsidiary earnings as determined by management's judgment about and intentions concerning the future operations of the Company. As a result, the Company does not record a U.S. deferred tax liability for the excess of the book basis over the tax basis of its investments in foreign corporations to the extent that the basis difference results from earnings that meet the indefinite reversal criteria. Refer to Note 12 for further discussion on our assertion.
The Company's operations may involve dealing with uncertainties and judgments in the application of complex tax regulations in multiple jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from federal, state, and international tax audits. The Company recognizes potential liabilities and records tax liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on its estimate of whether, and the extent to which, additional taxes will be due. The Company adjusts these reserves in light of changing facts and circumstances, such as the progress of a tax audit; however, due to the complexity of some of these uncertainties, the ultimate resolution could result in a payment that is materially different from our current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period which they are determined. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense.
Comprehensive Income
In addition to net income, comprehensive income includes changes in equity during a period associated with cumulative unrealized changes in the fair value of marketable securities held for sale, net of tax effects.
Earnings per Share
Basic earnings per share is computed by dividing net income available to Royal Gold common stockholders by the weighted average number of outstanding common shares for the period, considering the effect of participating securities, and include the outstanding exchangeable shares. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts that may require issuance of common shares were converted. Diluted earnings per share is computed by dividing net income available to common stockholders by the diluted weighted average number of common shares outstanding, including outstanding exchangeable shares, during each fiscal year.
Reclassification
Certain amounts in the prior period financial statements have been reclassified for comparative purposes to conform with the presentation in the current period financial statements.
Recently Issued Accounting Standards
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Updated ("ASU") 2014-09, which establishes a comprehensive new revenue recognition model designed to depict the transfer of good or services to a customer in an amount that reflects the consideration the entity expects to receive in exchange for those goods and services. In doing so, companies may need to use more judgment and make more estimates than under current revenue recognition guidance. The ASU allows for the use of either the full or modified retrospective transition method, and the standard will be effective for us in the first quarter of our fiscal year 2018; early adoption is not permitted. We are currently evaluating the impact of this new standard on our consolidated financial statements, as well as which transition method we intend to use.
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3. ACQUISITIONS
Phoenix Gold Project Stream Acquisition
On February 11, 2014, the Company, through its wholly-owned subsidiary RGLD Gold AG ("RGLD Gold"), entered into a $75 million Purchase and Sale Agreement (the "Agreement") for a gold stream transaction with Rubicon Minerals Corporation ("Rubicon"). Pursuant to the Agreement, the $75 million payment deposit from RGLD Gold is to be used by Rubicon to help pay a significant portion of the construction costs of the Phoenix Gold Project located in Ontario, Canada, which is currently in the development stage.
Pursuant to the Agreement, the $75 million payment deposit to Rubicon is prepayment of the purchase price for refined gold and is payable in five installments. The first installment of $10 million was made in conjunction with execution of definitive documents on February 11, 2014. The second installment of $20 million was paid on March 20, 2014, while the third, fourth and fifth installments of $15 million each are payable upon satisfaction of certain conditions precedent.
Upon commencement of production at the Phoenix Gold Project, RGLD Gold will purchase and Rubicon will sell 6.30% of any gold produced from the Phoenix Gold Project until 135,000 ounces have been delivered, and 3.15% thereafter. For each delivery of gold, RGLD Gold will pay a purchase price per ounce of 25% of the spot price of gold at the time of delivery. In the event that RGLD Gold's interests are subordinated to more than $50 million of senior debt, RGLD Gold's per ounce purchase price will be reduced by 5.4% times the amount of the senior debt outstanding and drawn in excess of $50 million, divided by $50 million.
The Phoenix Gold Project gold stream acquisition has been accounted for as an asset acquisition. The $30 million paid as part of the aggregate pre-production commitment of $75 million, plus direct transaction costs, have been recorded as a development stage stream interest within Royalty and stream interests, net on our consolidated balance sheets.
Goldrush Royalty Acquisition
On January 7, 2014, Royal Gold acquired a 1.0% net revenue royalty on the southern end of Barrick Gold Corporation's ("Barrick") Goldrush deposit in Nevada from a private landowner for total consideration of $8.0 million, of which $1.0 million was paid at closing and the remaining $7.0 million will be paid in seven annual installments. Goldrush is located approximately four miles from the Cortez mine. The acquisition has been recorded as an exploration stage royalty interest within Royalty and stream interests, net on our consolidated balance sheets.
NVR1 Royalty at Cortez
On January 2, 2014, Royal Gold, through a wholly-owned subsidiary, increased its ownership interest in the limited partnership that owns the 1.25% net value royalty ("NVR1") covering certain portions of the Pipeline Complex at Barrick's Cortez gold mine in Nevada. As a result of the transaction, the NVR1 royalty rate attributable to our interest increased from 0.39% to 1.014% on production from all of the lands covered by the NVR1 royalty excluding production from the mining claims comprising the Crossroad deposit (the "Crossroad Claims"), and from zero to 0.618% on production from the Crossroad Claims. Total consideration for the transaction was approximately $11.5 million. Refer to Note 17 for a discussion of certain related party interests in this transaction.
El Morro Royalty Acquisition
In August 2013, Royal Gold, through a wholly-owned Chilean subsidiary, acquired a 70% interest in a 2.0% net smelter return ("NSR") royalty on certain portions of the El Morro copper gold project in Chile ("El Morro"), from Xstrata Copper Chile S.A., for $35 million. Goldcorp Inc. holds 70% ownership of the El Morro project and is the operator, with the remaining 30% held by New Gold Inc.
The acquisition of the El Morro royalty interest has been accounted for as an asset acquisition. The total purchase price of $35 million, plus direct transaction costs, has been recorded as a development stage royalty interest within Royalty and stream interests, net on our consolidated balance sheets.
Mt. Milligan II and III Gold Stream Acquisitions
On December 14, 2011, Royal Gold and one of its wholly-owned subsidiaries entered into an Amended and Restated Purchase and Sale Agreement with Thompson Creek Metals Company Inc. ("Thompson Creek") and one of its wholly-owned subsidiaries. Among other things, Royal Gold agreed to purchase an additional 15% of the payable ounces of gold from the Mt. Milligan copper-gold project in exchange for payment advances totaling $270 million, of which $112 million was paid on December 19, 2011, and, when production is reached, cash payments for each payable ounce of gold delivered to Royal Gold.
On August 8, 2012, Royal Gold entered into an amendment to its purchase and sale agreement with Thompson Creek whereby Royal Gold, among other things, agreed to purchase an additional 12.25% of the payable gold from the Mt. Milligan copper-gold project in exchange for a total of $200 million, of which $75 million was paid shortly after closing, and, when production is reached, cash payments for each payable ounce of gold delivered to Royal Gold (the "Milligan III Acquisition"). Under the Milligan III Acquisition, Royal Gold increased its aggregate pre-production commitment in the Mt. Milligan project from $581.5 million to $781.5 million and agreed to purchase a total of 52.25% of the payable ounces of gold produced from the Mt. Milligan project at a cash purchase price equal to the lesser of $435, with no inflation adjustment, or the prevailing market price for each payable ounce of gold (regardless of the number of payable ounces delivered to Royal Gold). As of June 30, 2014, the Company has paid the entire aggregate pre-production commitment of $781.5 million.
The Mt. Milligan acquisitions have been accounted for as an asset acquisition. The aggregate pre-production commitment of $781.5 million, plus direct transaction costs, is recorded as a production stage stream interest within Royalty and stream interests, net on our consolidated balance sheets.
Acquisition of Royalty Options on the Kerr-Sulphurets-Mitchell Project and Investment in Seabridge Gold, Inc.
On June 16, 2011, the Company, through its wholly-owned subsidiary RG Exchangeco Inc., ("RG Exchangeco") entered into a Subscription Agreement and an Option Agreement with Seabridge Gold, Inc. ("Seabridge") to (i) make a $30.7 million (C$30 million) initial equity investment in the common shares of Seabridge, (ii) acquire an option to purchase a 1.25% net smelter return royalty (the "Initial Royalty") on all of the gold and silver production from the Kerr-Sulphurets-Mitchell project (the "Project") in northwest British Columbia, (iii) acquire an option to make a second equity investment in the common shares of Seabridge of up to C$18 million and (iv) acquire a second option to increase the Initial Royalty to a 2.00% net smelter return royalty (the "Increased Royalty").
Pursuant to the Subscription Agreement, on June 29, 2011, the Company purchased 1,019,000 common shares of Seabridge (the "Initial Shares") in a private placement for $30.7 million (C$30 million) at a per share price equal to $30.14 (C$29.4), which represented a premium of 15% to the volume weighted average trading price of the Seabridge common shares on the Toronto Stock Exchange ("TSX") for the five trading day period that ended June 14, 2011.
Pursuant to the Option Agreement (as amended by the Amending Agreement dated October 28, 2011, the "Option Agreement"), by having held the Initial Shares for more than 270 days from the date they were acquired, the Company obtained the right to purchase the Initial Royalty for C$100 million, payable in three installments over a 540 day period, subject to currency rate adjustments. As of June 30, 2014, the Company continues to hold the Initial Shares but has not exercised its option to acquire the Initial Royalty.
On December 13, 2012, RG Exchangeco exercised its option to make a second equity investment in the common shares of Seabridge and purchased 1,004,491 common shares of Seabridge (the "Additional Shares") at a 15% premium to the volume weighted-average trading price of the Seabridge common shares on the TSX for a five day trading period that ended December 11, 2012, for $18.3 million (C$18.0 million). Effective December 13, 2012, the Company entered into a Second Amending Agreement (the "Seabridge Amendment") to the Option Agreement to, among other things, remove the 270 day minimum holding period applicable to the Additional Shares.
Upon the Company's purchase of the Additional Shares, the Company obtained the right, under the Option Agreement, as amended by the Seabridge Amendment, to purchase the Increased Royalty for C$60 million, payable in three installments over a 540 day period. Accordingly, the Company now holds the right to purchase either a 1.25% NSR royalty on all of the gold and silver production from the Project for C$100 million, or a 2.0% NSR royalty for C$160 million. Royal Gold sold the Additional Shares in a private transaction to an unrelated party for $14.6 million (C$14.4 million) on December 13, 2012.
The options to purchase the Initial Royalty and the Increased Royalty will remain exercisable by the Company for 60 days following the Company's satisfaction that, among other items, the Project has received all material approvals and permits and that Seabridge has demonstrated that it has sufficient funding for construction of and commencement of commercial production from the Project.
The investment in Initial Shares was accounted for as a purchase of securities and the investment in the Project was accounted for as an asset purchase. As such, the Company has recorded the Initial Shares as an investment in Available-for-sale securities on the consolidated balance sheets; refer to Note 5 for further detail on our investment in available-for-sale securities. The 15% premium on the Initial Shares and Additional Shares, which represented the value of the option to acquire the Initial Royalty and Increased Royalty, plus direct acquisition costs, has been recorded within Other assets on the consolidated balance sheets. The purchase and same day sale of the Additional Shares resulted in a realized loss on trading securities of approximately $1.3 million during our fiscal year ended June 30, 2013, which is recorded within Interest and other expense on our consolidated statements of operations and comprehensive income.
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4. ROYALTY AND STREAM INTERESTS, NET
The following summarizes the Company's royalty and stream interests as of June 30, 2014 and 2013:
As of June 30, 2014 (Amounts in thousands): |
Cost | Accumulated Depletion |
Net | |||||||
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Production stage royalty interests: |
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Andacollo |
$ | 272,998 | $ | (56,147 | ) | $ | 216,851 | |||
Voisey's Bay |
150,138 | (67,377 | ) | 82,761 | ||||||
Peñasquito |
99,172 | (17,801 | ) | 81,371 | ||||||
LasCruces |
57,230 | (16,917 | ) | 40,313 | ||||||
Dolores |
55,820 | (11,109 | ) | 44,711 | ||||||
Mulatos |
48,092 | (28,548 | ) | 19,544 | ||||||
Wolverine |
45,158 | (12,689 | ) | 32,469 | ||||||
Canadian Malartic |
38,800 | (10,038 | ) | 28,762 | ||||||
Holt |
34,612 | (10,474 | ) | 24,138 | ||||||
Gwalia Deeps |
31,070 | (10,549 | ) | 20,521 | ||||||
Inata |
24,871 | (12,161 | ) | 12,710 | ||||||
Ruby Hill |
24,335 | (13,403 | ) | 10,932 | ||||||
Leeville |
18,322 | (15,917 | ) | 2,405 | ||||||
Robinson |
17,825 | (11,887 | ) | 5,938 | ||||||
Cortez |
10,630 | (9,772 | ) | 858 | ||||||
Other |
192,703 | (130,130 | ) | 62,573 | ||||||
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1,121,776 | (434,919 | ) | 686,857 | ||||||
Production stage stream interests: |
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Mt. Milligan |
783,046 | (7,741 | ) | 775,305 | ||||||
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Production stage royalty and stream interests |
1,904,822 | (442,660 | ) | 1,462,162 | ||||||
Development stage royalty interests: |
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Pascua-Lama |
372,105 | — | 372,105 | |||||||
El Morro |
35,139 | — | 35,139 | |||||||
Other |
34,349 | — | 34,349 | |||||||
Development stage stream interests: |
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Phoenix Gold |
30,620 | — | 30,620 | |||||||
Other |
10,483 | — | 10,483 | |||||||
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Development stage royalty and stream interests |
482,696 | — | 482,696 | |||||||
Exploration stage royalty interests |
164,209 |
— |
164,209 |
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Total royalty and stream interests |
$ | 2,551,727 | $ | (442,660 | ) | $ | 2,109,067 | |||
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As of June 30, 2013 (Amounts in thousands): |
Cost | Accumulated Depletion |
Net | |||||||
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Production stage royalty interests: |
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Andacollo |
$ | 272,998 | $ | (44,317 | ) | $ | 228,681 | |||
Voisey's Bay |
150,138 | (51,881 | ) | 98,257 | ||||||
Peñasquito |
99,172 | (12,393 | ) | 86,779 | ||||||
Las Cruces |
57,230 | (11,713 | ) | 45,517 | ||||||
Mulatos |
48,092 | (24,545 | ) | 23,547 | ||||||
Wolverine |
45,158 | (7,891 | ) | 37,267 | ||||||
Dolores |
44,878 | (8,186 | ) | 36,692 | ||||||
Canadian Malartic |
38,800 | (6,320 | ) | 32,480 | ||||||
Holt |
34,612 | (6,564 | ) | 28,048 | ||||||
Gwalia Deeps |
31,070 | (7,194 | ) | 23,876 | ||||||
Inata |
24,871 | (9,303 | ) | 15,568 | ||||||
Ruby Hill |
24,335 | (3,054 | ) | 21,281 | ||||||
Leeville |
18,322 | (15,484 | ) | 2,838 | ||||||
Robinson |
17,825 | (11,224 | ) | 6,601 | ||||||
Cortez |
10,630 | (9,716 | ) | 914 | ||||||
Other |
190,702 | (121,654 | ) | 69,048 | ||||||
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1,108,833 | (351,439 | ) | 757,394 | ||||||
Development stage royalty interests: |
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Pascua-Lama |
372,105 | — | 372,105 | |||||||
Other |
32,934 | — | 32,934 | |||||||
Development stage stream interests: |
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Mt. Milligan |
770,093 | — | 770,093 | |||||||
Other |
10,418 | — | 10,418 | |||||||
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Development stage royalty and stream interests |
1,185,550 | — | 1,185,550 | |||||||
Exploration stage royalty interests |
177,324 |
— |
177,324 |
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Total royalty and stream interests |
$ | 2,471,707 | $ | (351,439 | ) | $ | 2,120,268 | |||
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5. AVAILABLE-FOR-SALE SECURITIES
The Company's available-for-sale securities as of June 30, 2014 and 2013 consist of the following:
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As of June 30, 2014 | ||||||||||||
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(Amounts in thousands) Unrealized |
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Cost Basis | Gain | Loss | Fair Value | |||||||||
Non-current: |
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Seabridge |
$ | 9,565 | — | — | $ | 9,565 | |||||||
Other |
203 | — | (160 | ) | 43 | ||||||||
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$ | 9,768 | $ | — | $ | (160 | ) | $ | 9,608 | ||||
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As of June 30, 2013 | ||||||||||||
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(Amounts in thousands) Unrealized |
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Cost Basis | Gain | Loss | Fair Value | |||||||||
Non-current: |
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Seabridge |
$ | 14,064 | — | (4,509 | ) | $ | 9,555 | ||||||
Other |
203 | — | (63 | ) | 140 | ||||||||
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$ | 14,267 | $ | — | $ | (4,572 | ) | $ | 9,695 | ||||
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The most significant available-for-sale security is the investment in Seabridge common stock, acquired in June 2011 and discussed in greater detail within Note 3 of our notes to consolidated financial statements. Based on our quarterly impairment analysis, the Company determined that the impairment of its investment in Seabridge common stock is other-than-temporary. As a result of the impairment, the Company recognized a loss on available-for-sale securities of $4.5 million during the fourth quarter of our fiscal year ended June 30, 2014. The Company also recognized a loss on available-for-sale securities related to our investment in Seabridge common stock of $12.1 million during the third quarter of our fiscal year ended June 30, 2013. The recognized losses have been reclassified out of comprehensive income in the respective periods. The Company will continue to evaluate its investment in Seabridge common stock considering additional facts and circumstances as they arise, including, but not limited to, the progress of development of Seabridge's KSM project.
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6. DEBT
The Company's debt as of June 30, 2014 and 2013 consists of the following:
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As of June 30, 2014 |
As of June 30, 2013 |
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Non-current | Non-current | |||||
|
(Amounts in thousands) |
||||||
Convertible notes due 2019, net |
$ | 311,860 | $ | 302,263 | |||
| | | | | | | |
Total debt |
$ | 311,860 | $ | 302,263 | |||
| | | | | | | |
| | | | | | | |
Convertible Senior Notes Due 2019
In June 2012, the Company completed an offering of $370 million aggregate principal amount of 2.875% convertible senior notes due 2019 ("2019 Notes"). The 2019 Notes bear interest at the rate of 2.875% per annum, and the Company is required to make semi-annual interest payments on the outstanding principal balance of the 2019 Notes on June 15 and December 15 of each year, beginning December 15, 2012. The 2019 Notes mature on June 15, 2019. Interest expense recognized on the 2019 Notes for the fiscal years ended June 30, 2014 and 2013 was approximately $21.4 million and $20.7 million, respectively, and included the contractual coupon interest, the accretion of the debt discount and amortization of the debt issuance costs. During the fiscal year ended June 30, 2014 and 2013, the Company made $10.6 million and $10.5 million, respectively, in interest payments on our 2019 Notes.
Revolving credit facility
The Company maintains a $450 million revolving credit facility. Borrowings under the revolving credit facility bear interest at a floating rate of LIBOR plus a margin of 1.25% to 3.0%, based on Royal Gold's leverage ratio. As of June 30, 2014, the interest rate on borrowings under the revolving credit facility was LIBOR plus 1.25%. Royal Gold may repay any borrowings under the revolving credit facility at any time without premium or penalty. As of June 30, 2014, and during our fiscal year 2014, Royal Gold had no amounts outstanding under the revolving credit facility.
Royal Gold amended and restated its revolving credit facility on January 29, 2014. Key modifications to the revolving credit facility include, among other items: (1) an increase in the maximum availability from $350 million to $450 million; (2) an extension of the final maturity from May 2017 to January 2019; (3) an increase of the accordion feature from $50 million to $150 million which allows the Company to increase availability under the revolving credit facility at its option, subject to satisfaction of certain conditions, to $600 million; (4) a reduction in the commitment fee from 0.375% to 0.25%; (5) a reduction in the drawn interest rate from LIBOR + 1.75% to LIBOR + 1.25%; (6) removal of the secured debt ratio, and (7) maintaining the leverage ratio (as defined therein) less than or equal to 3.5 to 1.0, with an increase to 4.0 to 1.0 for the two quarters following the completion of a material permitted acquisition, as defined. At June 30, 2014, the Company was in compliance with each financial covenant.
|
7. REVENUE
Revenue is comprised of the following:
|
Fiscal Years Ended June 30, | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
|
2014 | 2013 | 2012 | |||||||
|
(Amounts in thousands) |
|||||||||
Royalty interests |
$ | 209,953 | $ | 289,224 | $ | 263,054 | ||||
Stream interests |
27,209 | — | — | |||||||
| | | | | | | | | | |
Total revenue |
$ | 237,162 | $ | 289,224 | $ | 263,054 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
|
8. STOCK-BASED COMPENSATION
In November 2004, the Company adopted the Omnibus Long-Term Incentive Plan ("2004 Plan"). Under the 2004 Plan, 2,600,000 shares of common stock have been authorized for future grants to officers, directors, key employees and other persons. The 2004 Plan provides for the grant of stock options, unrestricted stock, restricted stock, dividend equivalent rights, SSARs and cash awards. Any of these awards may, but need not, be made as performance incentives. Stock options granted under the 2004 Plan may be non-qualified stock options or incentive stock options.
The Company recognized stock-based compensation expense as follows:
|
For the Fiscal Years Ended June 30, |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
|
2014 | 2013 | 2012 | |||||||
|
(Amounts in thousands) |
|||||||||
Stock options |
$ | 468 | $ | 456 | $ | 446 | ||||
Stock appreciation rights |
1,305 | 1,107 | 1,219 | |||||||
Restricted stock |
3,110 | 3,240 | 2,757 | |||||||
Performance stock |
(2,303 | ) | 898 | 2,085 | ||||||
| | | | | | | | | | |
Total stock-based compensation expense |
$ | 2,580 | $ | 5,701 | $ | 6,507 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
Stock-based compensation expense is included within general and administrative expense in the consolidated statements of operations and comprehensive income.
Stock Options and Stock Appreciation Rights
Stock option and SSARs awards are granted with an exercise price equal to the closing market price of the Company's stock at the date of grant. Stock option and SSARs awards granted to officers, key employees and other persons vest based on one to three years of continuous service. Stock option and SSARs awards have 10 year contractual terms.
To determine stock-based compensation expense for stock options and SSARs, the fair value of each stock option and SSAR is estimated on the date of grant using the Black-Scholes-Merton ("Black-Scholes") option pricing model for all periods presented. The Black-Scholes model requires key assumptions in order to determine fair value. Those key assumptions during the fiscal year 2014, 2013 and 2012 grants are noted in the following table:
|
Stock Options | SSARs | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||
Weighted-average expected volatility |
43.6 | % | 43.1 | % | 45.1 | % | 41.3 | % | 43.7 | % | 45.3 | % | |||||||
Weighted-average expected life in years |
5.5 | 5.5 | 5.7 | 4.8 | 6.4 | 6.1 | |||||||||||||
Weighted-average dividend yield |
1.00 | % | 0.86 | % | 0.76 | % | 1.00 | % | 0.90 | % | 0.76 | % | |||||||
Weighted-average risk free interest rate |
1.7 | % | 0.8 | % | 1.1 | % | 1.5 | % | 1.0 | % | 1.2 | % |
The Company's expected volatility is based on the historical volatility of the Company's stock over the expected option term. The Company's expected option term is determined by historical exercise patterns along with other known employee or company information at the time of grant. The risk free interest rate is based on the zero-coupon U.S. Treasury bond at the time of grant with a term approximate to the expected option term.
Stock Options
A summary of stock option activity under the 2004 Plan for the fiscal year ended June 30, 2014, is presented below.
|
Number of Shares |
Weighted- Average Exercise Price |
Weighted- Average Remaining Contractual Life (Years) |
Aggregate Intrinsic Value (in thousands) |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Outstanding at July 1, 2013 |
119,313 | $ | 46.12 | ||||||||||
Granted |
24,775 | $ | 59.99 | ||||||||||
Exercised |
(34,495 | ) | $ | 32.48 | |||||||||
Forfeited |
(8,200 | ) | $ | 68.11 | |||||||||
| | | | | | | | | | | | | |
Outstanding at June 30, 2014 |
101,393 | $ | 52.37 | 6.4 | $ | 2,410 | |||||||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Exercisable at June 30, 2014 |
63,531 | $ | 45.16 | 5.1 | $ | 1,967 | |||||||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
The weighted-average grant date fair value of options granted during the fiscal years ended June 30, 2014, 2013 and 2012, was $22.78, $26.76 and $27.23, respectively. The total intrinsic value of options exercised during the fiscal years ended June 30, 2014, 2013 and 2012, were $1.1 million, $4.1 million, and $8.7 million, respectively.
As of June 30, 2014, there was approximately $0.5 million of total unrecognized stock-based compensation expense related to non-vested stock options granted under the 2004 Plan, which is expected to be recognized over a weighted-average period of 1.8 years.
SSARs
A summary of SSARs activity under the 2004 Plan for the fiscal year ended June 30, 2014, is presented below.
|
Number of Shares |
Weighted- Average Exercise Price |
Weighted- Average Remaining Contractual Life (Years) |
Aggregate Intrinsic Value (in thousands) |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Outstanding at July 1, 2013 |
162,284 | $ | 58.28 | ||||||||||
Granted |
84,125 | $ | 62.13 | ||||||||||
Exercised |
(1,614 | ) | $ | 32.52 | |||||||||
Forfeited |
(15,739 | ) | $ | 61.28 | |||||||||
| | | | | | | | | | | | | |
Outstanding at June 30, 2014 |
229,056 | $ | 59.67 | 7.5 | $ | 3,770 | |||||||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Exercisable at June 30, 2014 |
108,586 | $ | 53.42 | 6.1 | $ | 2,466 | |||||||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
The weighted-average grant date fair value of SSARs granted during the fiscal years ended June 30, 2014, 2013 and 2012 was $21.15, $29.78 and $28.04, respectively. The total intrinsic value of SSARs exercised during the fiscal years ended June 30, 2014, 2013 and 2012, were $0.1 million, $3.5 million, and $0, respectively.
As of June 30, 2014, there was approximately $1.6 million of total unrecognized stock-based compensation expense related to non-vested SSARs granted under the 2004 Plan, which is expected to be recognized over a weighted-average period of 1.8 years.
Other Stock-based Compensation
Performance Shares
During fiscal 2014, officers and certain employees were granted 71,700 shares of restricted common stock that can be earned only if a single pre-defined performance goal is met within five years of the date of grant ("Performance Shares"). If the performance goal is not earned by the end of this five year period, the Performance Shares will be forfeited. Vesting of Performance Shares is subject to certain performance measures being met and can be based on an interim earn out of 25%, 50%, 75% or 100%. For Performance Shares granted during fiscal year 2014, there is a single pre-defined performance goal, which is growth of adjusted free cash flow on a per share, trailing twelve month basis.
The Company measures the fair value of the Performance Shares based upon the market price of our common stock as of the date of grant. In accordance with ASC 718, the measurement date for the Performance Shares will be determined at such time that the performance goals are attained or that it is probable they will be attained. At such time that it is probable that a performance condition will be achieved, compensation expense will be measured by the number of shares that will ultimately be earned based on the grant date market price of our common stock. For shares that were previously estimated to be probable of vesting and are no longer deemed to be probable of vesting, compensation expense is reversed during the period in which it is determined they are no longer probable of vesting. Interim recognition of compensation expense will be made at such time as management can reasonably estimate the number of shares that will be earned.
A summary of the status of the Company's non-vested Performance Shares for the fiscal year ended June 30, 2014, is presented below:
|
Number of Shares |
Weighted- Average Grant Date Fair Value |
|||||
---|---|---|---|---|---|---|---|
Non-vested at July 1, 2013 |
107,850 | $ | 66.20 | ||||
Granted |
71,700 | $ | 61.39 | ||||
Vested |
— | $ | — | ||||
Forfeited |
— | $ | — | ||||
| | | | | | | |
Non-vested at June 30, 2014 |
179,550 | $ | 64.28 | ||||
| | | | | | | |
| | | | | | | |
As of June 30, 2014, total unrecognized stock-based compensation expense related to Performance Shares was approximately $0.7 million, which is expected to be recognized over the average remaining vesting period of 3.5 years.
Restricted Stock
As defined in the 2004 Plan, officers, non-executive directors and certain employees may be granted shares of restricted stock that vest on continued service alone ("Restricted Stock"). During fiscal 2014, officers and certain employees were granted 46,200 shares of Restricted Stock. Restricted Stock awards granted to officers and certain employees vest over three years beginning after a two-year holding period from the date of grant with one-third of the shares vesting in years three, four and five, respectively. Also during fiscal year 2014, our non-executive directors were granted 19,950 shares of Restricted Stock. The non-executive directors' shares of Restricted Stock vest 50% immediately and 50% one year after the date of grant.
Shares of Restricted Stock represent issued and outstanding shares of common stock, with dividend and voting rights. The Company measures the fair value of the Restricted Stock based upon the market price of our common stock as of the date of grant. Restricted Stock is amortized over the applicable vesting period using the straight-line method. Unvested shares of Restricted Stock are subject to forfeiture upon termination of employment or service with the Company.
A summary of the status of the Company's non-vested Restricted Stock for the fiscal year ended June 30, 2014, is presented below:
|
Number of Shares |
Weighted- Average Grant Date Fair Value |
|||||
---|---|---|---|---|---|---|---|
Non-vested at July 1, 2013 |
194,706 | $ | 52.15 | ||||
Granted |
66,150 | $ | 61.32 | ||||
Vested |
(71,707 | ) | $ | 44.95 | |||
Forfeited |
(12,058 | ) | $ | 58.63 | |||
| | | | | | | |
Non-vested at June 30, 2014 |
177,091 | $ | 58.06 | ||||
| | | | | | | |
| | | | | | | |
As of June 30, 2014, total unrecognized stock-based compensation expense related to Restricted Stock was approximately $5.3 million, which is expected to be recognized over the weighted-average vesting period of 3.2 years.
|
9. STOCKHOLDERS' EQUITY
Preferred Stock
The Company has 10,000,000 authorized and unissued shares of $.01 par value Preferred Stock as of June 30, 2014 and 2013.
Common Stock Issuances
Fiscal Year 2014
During the fiscal year ended June 30, 2014, options to purchase 34,495 shares were exercised, resulting in proceeds of approximately $1.1 million.
Fiscal Year 2013
During the fiscal year ended June 30, 2013, options to purchase 65,341 shares were exercised, resulting in proceeds of approximately $1.9 million.
On October 15, 2012, we sold 5,250,000 shares of our common stock, at a price of $90.00 per share, resulting in proceeds of $472.5 million before expenses.
Exchangeable Shares
In connection with the acquisition of International Royalty Corporation ("IRC") in February 2010, certain holders of IRC common stock received exchangeable shares of RG Exchangeco for each share of IRC common stock held. The exchangeable shares are convertible at any time, at the option of the holder, into shares of Royal Gold common stock on a one-for-one basis, and entitle holders to dividends and other rights economically equivalent to holders of Royal Gold common stock.
Stockholders' Rights Plan
On September 10, 2007, the Company entered into the First Amended and Restated Rights Agreement, dated September 10, 2007 (the "Rights Agreement"). The Rights Agreement expires on September 10, 2017. The Rights Agreement was approved by the Company's board of directors (the "Board").
The Rights Agreement is intended to deter coercive or abusive tender offers and market accumulations. The Rights Agreement is designed to encourage an acquirer to negotiate with the Board and to enhance the Board's ability to act in the best interests of all the Company's stockholders.
Under the Rights Agreement, each stockholder of the Company holds one preferred stock purchase right (a "Right") for each share of Company common stock held. The Rights generally become exercisable only in the event that an acquiring party accumulates 15 percent or more of the Company's outstanding shares of common stock. If this were to occur, subject to certain exceptions, each Right (except for the Rights held by the acquiring party) would allow its holders to purchase one one-thousandth of a newly issued share of Series A junior participating preferred stock of Royal Gold or the Company's common stock with a value equal to twice the exercise price of the Right, initially set at $175 under the terms and conditions set forth in the Rights Agreement.
|
10. RESTRUCTURING ON ROYALTY AND STREAM INTERESTS
The Company owns an NSR royalty on the Relief Canyon property located in Nevada. From November 2010 to October 2011, the Company was involved in managing this interest in bankruptcy proceedings of the former owner of the Relief Canyon project. On August 24, 2011, the Company entered into an Amended and Restated Net Smelter Return Royalty Agreement with the former property owner, pursuant to which the royalty rate was reduced from 4% to 2%, and the ten mile area of interest was eliminated. The Company elected to amend the royalty agreement in order to enhance project economics and the probability of recognizing royalty revenue. As a result of the amendment to the Relief Canyon royalty agreement, the Company recorded a restructuring charge of approximately $1.3 million during the fiscal year ended June 30, 2012, which was based on the Company's estimate of fair value. There were no additional impairments on our Relief Canyon royalty during the fiscal years ended June 30, 2014 and 2013. The Company's carrying value for the Relief Canyon royalty interest was approximately $1.2 million as of June 30, 2014 and 2013.
|
11. EARNINGS PER SHARE ("EPS")
Basic earnings per common share were computed using the weighted average number of shares of common stock outstanding during the period, considering the effect of participating securities. Unvested stock-based compensation awards that contain non-forfeitable rights to dividends or dividend equivalents are considered participating securities and are included in the computation of earnings per share pursuant to the two-class method. The Company's unvested restricted stock awards contain non-forfeitable dividend rights and participate equally with common stock with respect to dividends issued or declared. The Company's unexercised stock options, unexercised SSARs and unvested performance stock do not contain rights to dividends. Under the two-class method, the earnings used to determine basic earnings per common share are reduced by an amount allocated to participating securities. Use of the two-class method has an immaterial impact on the calculation of basic and diluted earnings per common share.
The following table summarizes the effects of dilutive securities on diluted EPS for the period:
|
Fiscal Years Ended June 30, | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
|
2014 | 2013 | 2012 | |||||||
|
(in thousands, except per share data) |
|||||||||
Net income available to Royal Gold common stockholders |
$ | 62,641 | $ | 69,153 | $ | 92,476 | ||||
| | | | | | | | | | |
Weighted-average shares for basic EPS |
64,909,149 | 63,250,247 | 57,220,040 | |||||||
Effect of other dilutive securities |
117,107 | 179,575 | 243,810 | |||||||
| | | | | | | | | | |
Weighted-average shares for diluted EPS |
65,026,256 | 63,429,822 | 57,463,850 | |||||||
| | | | | | | | | | |
| | | | | | | | | | |
Basic earnings per share |
$ | 0.96 | $ | 1.09 | $ | 1.61 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
Diluted earnings per share |
$ | 0.96 | $ | 1.09 | $ | 1.61 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
The calculation of weighted average shares includes all of the Company's outstanding stock: common stock and exchangeable shares. Exchangeable shares are the equivalent of common shares in that they have the same dividend rights and share equitably in undistributed earnings and are exchangeable on a one-for-one basis for shares of our common stock. With respect to the 2019 Notes as discussed in Note 6, the Company intends to settle the principal amount of 2019 Notes in cash. As a result, there will be no impact to diluted earnings per share unless the share price of the Company's common stock exceeds the conversion price of $105.31.
|
12. INCOME TAXES
For financial reporting purposes, income before income taxes includes the following components:
|
Fiscal Years Ended June 30, | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
|
2014 | 2013 | 2012 | |||||||
|
(Amounts in thousands) |
|||||||||
United States |
$ | 17,033 | $ | 65,851 | $ | 110,189 | ||||
Foreign |
65,894 | 71,317 | 42,830 | |||||||
| | | | | | | | | | |
|
$ | 82,927 | $ | 137,168 | $ | 153,019 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
The Company's Income tax expense consisted of:
|
Fiscal Years Ended June 30, | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
|
2014 | 2013 | 2012 | |||||||
|
(Amounts in thousands) |
|||||||||
Current: |
||||||||||
Federal |
$ | (3,663 | ) | $ | 30,061 | $ | 35,556 | |||
State |
334 | 368 | 310 | |||||||
Foreign |
30,950 | 44,749 | 17,273 | |||||||
| | | | | | | | | | |
|
$ | 27,621 | $ | 75,178 | $ | 53,139 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
Deferred and others: |
||||||||||
Federal |
$ | (4,122 | ) | $ | (4,341 | ) | $ | 77 | ||
State |
(26 | ) | (27 | ) | — | |||||
Foreign |
(4,018 | ) | (7,051 | ) | 1,494 | |||||
| | | | | | | | | | |
|
$ | (8,166 | ) | $ | (11,419 | ) | $ | 1,571 | ||
| | | | | | | | | | |
Total income tax expense |
$ | 19,455 | $ | 63,759 | $ | 54,710 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
The provision for income taxes for the fiscal years ended June 30, 2014, 2013 and 2012, differs from the amount of income tax determined by applying the applicable United States statutory federal income tax rate to pre-tax income (net of non-controlling interest in income of consolidated subsidiary and loss from equity investment) from operations as a result of the following differences:
|
Fiscal Years Ended June 30, | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
|
2014 | 2013 | 2012 | |||||||
|
(Amounts in thousands) |
|||||||||
Total expense computed by applying federal rates |
$ | 29,024 | $ | 48,009 | $ | 53,557 | ||||
State and provincial income taxes, net of federal benefit |
334 | 368 | 310 | |||||||
Adjustments of valuation allowance |
— | — | (1,007 | ) | ||||||
Excess depletion |
(1,114 | ) | (1,395 | ) | (1,416 | ) | ||||
Estimates for uncertain tax positions |
(7,386 | ) | 1,868 | 551 | ||||||
Statutory tax attributable to non-controlling interest |
(293 | ) | (1,236 | ) | (2,042 | ) | ||||
Effect of foreign earnings |
1,141 | 4,223 | 511 | |||||||
Effect of foreign earnings indefinitely reinvested |
(1,700 | ) | — | — | ||||||
Effect of recognized loss on available-for-sale securities |
562 | 4,239 | — | |||||||
Unrealized foreign exchange gains |
(367 | ) | 1,146 | (546 | ) | |||||
Changes in estimates and corrected errors of prior year tax |
(594 | ) | 4,979 | 1,075 | ||||||
Other |
(152 | ) | 1,558 | 3,717 | ||||||
| | | | | | | | | | |
|
$ | 19,455 | $ | 63,759 | $ | 54,710 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
The effective tax rate includes the impact of certain undistributed foreign subsidiary earnings for which we have not provided U.S. taxes because we plan to reinvest such earnings indefinitely outside the United States. The Company has the ability and intent to indefinitely reinvest these foreign earnings based on revenue and cash projections of our other investments, current cash on hand, and availability under our revolving credit facility. At June 30, 2014, the relevant foreign subsidiary had an accumulated earnings deficit due to costs incurred prior to earning income in fiscal 2014. No deferred tax has been provided on the difference between the tax basis in the stock of the consolidated subsidiary and the amount of the subsidiary's net equity determined for financial reporting purposes.
During the quarter ended September 30, 2013 as a result of continued review of the June 30, 2012 tax return and financial statement impacts of the return results, the Company recorded a $1.7 million income tax benefit resulting from an identified error. Additionally, during the quarter ended June 30, 2014, the Company recorded a $2.6 million income tax expense as a result of continued review of prior year's tax accounts. In accordance with applicable U.S. GAAP, management quantitatively and qualitatively evaluated the materiality of these errors and determined them to be immaterial to the fiscal year 2014 or prior year consolidated financial statements.
The tax effects of temporary differences and carryforwards, which give rise to our deferred tax assets and liabilities at June 30, 2014 and 2013, are as follows:
|
2014 | 2013 | |||||
---|---|---|---|---|---|---|---|
|
(Amounts in thousands) |
||||||
Deferred tax assets: |
|||||||
Stock-based compensation |
$ | 3,511 | $ | 3,853 | |||
Net operating losses |
19,322 | 25,943 | |||||
Other |
7,068 | 4,460 | |||||
| | | | | | | |
Total deferred tax assets |
29,901 | 34,256 | |||||
Valuation allowance |
(4,933 | ) | (4,606 | ) | |||
| | | | | | | |
Net deferred tax assets |
$ | 24,968 | $ | 29,650 | |||
| | | | | | | |
Deferred tax liabilities: |
|||||||
Mineral property basis |
$ | (158,301 | ) | $ | (165,936 | ) | |
Unrealized foreign exchange gains |
(3,072 | ) | (3,684 | ) | |||
2019 Notes |
(20,002 | ) | (23,281 | ) | |||
Other |
(2,239 | ) | (3,561 | ) | |||
| | | | | | | |
Total deferred tax liabilities |
(183,614 | ) | (196,462 | ) | |||
| | | | | | | |
Total net deferred taxes |
$ | (158,646 | ) | $ | (166,812 | ) | |
| | | | | | | |
| | | | | | | |
The Company reviews the measurement of its deferred tax assets at each balance sheet date. All available evidence, both positive and negative, is considered in determining whether, based upon the weight of the evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. As of June 30, 2014 and 2013, the Company had $4.9 million and $4.6 million of valuation allowances recorded, respectively. The valuation allowance remaining at June 30, 2014 is primarily attributable to deferred tax asset generated by the recognized loss on available-for-sale securities and the tax basis difference as a result of unrealized losses on foreign exchange.
At June 30, 2014 and 2013, the Company had $77 million and $108 million of net operating loss carry forwards, respectively. The decrease in the net operating loss carry forwards is attributable to utilization of net operating losses in non-U.S. subsidiaries. The majority of the tax loss carry forwards are in jurisdictions that allow a twenty year carry forward period. As a result, these losses do not begin to expire until the 2025 tax year, and the Company anticipates the losses will be fully utilized.
As of June 30, 2014 and 2013, the Company had $13.7 million and $21.2 million of total gross unrecognized tax benefits, respectively. If recognized, these unrecognized tax benefits would positively impact the Company's effective income tax rate. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:
|
2014 | 2013 | 2012 | |||||||
---|---|---|---|---|---|---|---|---|---|---|
|
(Amounts in thousands) |
|
||||||||
Total gross unrecognized tax benefits at beginning of year |
$ | 21,166 | $ | 19,469 | $ | 18,836 | ||||
Additions / Reductions for tax positions of current year |
(1,052 | ) | 2,638 | 2,051 | ||||||
Reductions due to settlements with taxing authorities |
(296 | ) | (941 | ) | — | |||||
Reductions due to lapse of statute of limitations |
(6,093 | ) | — | (1,418 | ) | |||||
| | | | | | | | | | |
Total amount of gross unrecognized tax benefits at end of year |
$ | 13,725 | $ | 21,166 | $ | 19,469 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. Federal, state and local, and non-U.S. income tax examinations by tax authorities for fiscal years before 2009. As a result of (i) statute of limitations that will begin to expire within the next 12 months in various jurisdictions, (ii) possible settlements of audit-related issues with taxing authorities in various jurisdictions with respect to which none of the issues are individually significant, and (iii) and additional accrual of exposure and interest on existing items the Company believes that it is reasonably possible that the total amount of its net unrecognized income tax benefits will not decrease in the next 12 months.
The Company's continuing practice is to recognize interest and/or penalties related to unrecognized tax benefits as part of its income tax expense. At June 30, 2014 and 2013, the amount of accrued income-tax-related interest and penalties was $5.4 million and $4.3 million, respectively.
|
13. SUPPLEMENTAL CASH FLOW INFORMATION
The Company's supplemental cash flow information for the fiscal years ending June 30, 2014, 2013 and 2012 is as follows:
|
2014 | 2013 | 2012 | |||||||
---|---|---|---|---|---|---|---|---|---|---|
|
(Amounts in thousands) |
|||||||||
Cash paid during the period for: |
||||||||||
Interest |
$ | 10,638 | $ | 10,490 | $ | 4,590 | ||||
Income taxes, net of refunds |
$ | 27,322 | $ | 48,809 | $ | 58,520 | ||||
Non-cash investing and financing activities: |
||||||||||
Dividends declared |
$ | 54,049 | $ | 47,997 | $ | 32,357 |
|
14. FAIR VALUE MEASUREMENTS
ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below:
Level 1: Quoted prices for identical instruments in active markets;
Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and
Level 3: Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
The following table sets forth the Company's financial assets measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy.
|
At June 30, 2014 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
Fair Value | ||||||||||||||
|
Carrying Amount |
|||||||||||||||
|
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets (In thousands): |
||||||||||||||||
United States treasury bills(1) |
$ | 499,992 | $ | 499,992 | $ | 499,992 | $ | — | $ | — | ||||||
Marketable equity securities(2) |
$ | 9,608 | $ | 9,608 | $ | 9,608 | $ | — | $ | — | ||||||
| | | | | | | | | | | | | | | | |
Total assets |
$ | 509,600 | $ | 509,600 | $ | — | $ | — | ||||||||
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Liabilities (In thousands): |
||||||||||||||||
Debt(3) |
$ | 388,860 | $ | 394,050 | $ | 394,050 | $ | — | $ | — | ||||||
| | | | | | | | | | | | | | | | |
Total liabilities |
$ | 394,050 | $ | 394,050 | $ | — | $ | — | ||||||||
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
The Company invests primarily in United States treasury bills with maturities of 90 days or less, which are classified within Level 1 of the fair value hierarchy. The Company's marketable equity securities classified within Level 1 of the fair value hierarchy are valued using quoted market prices in active markets. The fair value of the Level 1 marketable equity securities is calculated as the quoted market price of the marketable equity security multiplied by the quantity of shares held by the Company. The Company's debt classified within Level 1 of the fair value hierarchy is valued using quoted prices in an active market.
As of June 30, 2014, the Company also had assets that, under certain conditions, are subject to measurement at fair value on a non-recurring basis like those associated with royalty interests in mineral properties, intangible assets and other long-lived assets. For these assets, measurement at fair value in periods subsequent to their initial recognition is applicable if any of these assets are determined to be impaired. None of these assets were written down to fair value during the fiscal year ended June 30, 2014. If recognition of these assets at their fair value becomes necessary, such measurements will be determined utilizing Level 3 inputs.
|
15. MAJOR SOURCES OF REVENUE
Operators that contributed greater than 10% of the Company's total revenue for any of fiscal years 2014, 2013 or 2012 were as follows (revenue amounts in thousands):
|
Fiscal Year 2014 | Fiscal Year 2013 | Fiscal Year 2012 | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Operator |
Revenue | Percentage of total revenue |
Revenue | Percentage of total revenue |
Revenue | Percentage of total revenue |
|||||||||||||
Teck |
$ | 48,777 | 20.6 | % | $ | 82,272 | 28.4 | % | $ | 64,075 | 24.4 | % | |||||||
Goldcorp, Inc. |
32,339 | 13.6 | % | 32,461 | 11.2 | % | 31,407 | 11.9 | % | ||||||||||
Thompson Creek |
27,209 | 11.5 | % | N/A | N/A | N/A | N/A | ||||||||||||
Vale Newfoundland & Labrador Limited |
25,128 | 10.6 | % | 32,517 | 11.2 | % | 36,030 | 13.7 | % |
|
16. COMMITMENTS AND CONTINGENCIES
Phoenix Gold Project Stream Acquisition
As of June 30, 2014, the Company has a remaining commitment of $45 million as part of its Phoenix Gold Project stream acquisition in February 2014 (Note 3).
Mt. Milligan Gold Stream Acquisition
The Company's final commitment payment of $12.9 million to Thompson Creek as part of the Mt. Milligan gold stream acquisition was made in September 2013. The Company has no remaining commitment payments to Thompson Creek as part of the Mt. Milligan gold stream.
Tulsequah Chief Gold and Silver Stream Acquisition
As of June 30, 2014, the Company has a remaining commitment of $45 million as part of its Tulsequah Chief gold and silver stream acquisition in December 2011, as amended in July 2014, payment of which is subject to satisfaction of certain conditions precedent.
Voisey's Bay
The Company owns a royalty on the Voisey's Bay mine in Newfoundland and Labrador owned by Vale Newfoundland & Labrador Limited ("VNL"). The royalty is owned by the Labrador Nickel Royalty Limited Partnership ("LNRLP"), in which the Company's wholly-owned indirect subsidiary, Canadian Minerals Partnership, is the general partner and 89.99% owner. The remaining interests in LNRLP are owned by Altius Investments Ltd. (10%), a company unrelated to Royal Gold, and the Company's wholly-owned indirect subsidiary, Voisey's Bay Holding Corporation (0.01%).
On October 16, 2009, LNRLP filed a claim in the Supreme Court of Newfoundland and Labrador Trial Division against Vale Inco Limited, now known as Vale Canada Limited ("Vale Canada") and its wholly-owned subsidiaries, Vale Inco Atlantic Sales Limited and VNL, related to the calculation of the NSR on the sale of concentrates, including nickel concentrates, from the Voisey's Bay mine to Vale Canada. The claim asserts that Vale Canada is incorrectly calculating the NSR and requests an order in respect of the correct calculation of future payments. The claim also requests specific damages for underpayment of past royalties to the date of the claim in an amount not less than $29 million, together with additional damages until the date of trial, interest, costs and other damages. The litigation is in the discovery phase.
|
17. RELATED PARTY
Crescent Valley Partners, L.P. ("CVP") was formed as a limited partnership in April 1992. CVP owns the NVR1 royalty on production of minerals from a portion of Cortez. Denver Mining Finance Company ("DMFC"), our wholly-owned subsidiary, is the general partner and held an aggregate 31.633% limited partner interest as of December 31, 2013.
On January 2, 2014, Royal Gold, through its wholly-owned subsidiary, DMFC, increased its ownership interest in the NVR1 royalty by acquiring all or a portion of the limited partnership interests of nine limited partners in CVP, aggregating 49.465% of the outstanding limited partnership interests, for approximately $11.5 million. The limited partners from whom DMFC acquired limited partnership interests included our former Chairman of the Board of Directors, who sold 3.0% out of his total 3.063% interest; one former member of our Board of Directors, who sold his entire 24.5% interest; and another former member of our Board of Directors, who sold his entire 8.0% interest. As a result of the transaction, DMFC now holds 81.098% of the outstanding limited partnership interests in CVP, equating to a 1.014% net value royalty on production from all of the lands covered by the NVR1 Royalty excluding production from the mining claims comprising the Crossroad Claims at Cortez, and a 0.618% net value royalty on production from the Crossroad Claims. The Crossroad Claims are part of the Pipeline Complex.
CVP receives its royalty from the Cortez Joint Venture in-kind. The Company, as well as certain other limited partners, sell their pro-rata shares of such gold immediately and receive distributions in cash, while CVP holds gold for certain other limited partners. Such gold inventories, which totaled 7,708 and 9,742 ounces of gold as of June 30, 2014 and June 30, 2013, respectively, are held by a third party refinery in Utah for the account of the limited partners of CVP. The inventories are carried at historical cost and are classified within Other assets on the Company's consolidated balance sheets. The carrying value of the gold in inventory was approximately $5.0 million and $6.1 million as of June 30, 2014 and June 30, 2013, respectively, while the fair value of such ounces was approximately $10.1 million and $11.6 million as of June 30, 2014 and June 30, 2013, respectively. None of the gold currently held in inventory as of June 30, 2014 and 2013, is attributed to Royal Gold, as the gold allocated to Royal Gold's CVP partnership interest is typically sold within five days of receipt.
|
18. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following is a summary of selected quarterly financial information (unaudited). Some amounts in the below table may not sum-up in total as a result of rounding.
|
Revenue | Operating income |
Net income attributable to Royal Gold stockholders |
Basic earnings per share |
Diluted earnings per share |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
(Amounts in thousands except per share data) |
|||||||||||||||
Fiscal year 2014 quarter-ended: |
||||||||||||||||
September 30 |
$ | 56,487 | $ | 25,738 | $ | 15,195 | $ | 0.23 | $ | 0.23 | ||||||
December 31 |
52,785 | 22,916 | 10,667 | 0.16 | 0.16 | |||||||||||
March 31 |
57,748 | 28,614 | 20,143 | 0.31 | 0.31 | |||||||||||
June 30 |
70,142 | 31,452 | 16,636 | 0.26 | 0.26 | |||||||||||
| | | | | | | | | | | | | | | | |
|
$ | 237,162 | $ | 108,720 | $ | 62,641 | $ | 0.96 | $ | 0.96 | ||||||
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Fiscal year 2013 quarter-ended: |
||||||||||||||||
September 30 |
$ | 77,862 | $ | 47,646 | $ | 24,771 | $ | 0.42 | $ | 0.41 | ||||||
December 31 |
79,870 | 50,665 | 27,217 | 0.42 | 0.42 | |||||||||||
March 31 |
74,166 | 42,932 | 6,464 | 0.10 | 0.10 | |||||||||||
June 30 |
57,326 | 29,924 | 10,701 | 0.16 | 0.16 | |||||||||||
| | | | | | | | | | | | | | | | |
|
$ | 289,224 | $ | 171,167 | $ | 69,153 | $ | 1.09 | $ | 1.09 | ||||||
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
|
Use of Estimates
The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ significantly from those estimates.
Our most critical accounting estimates relate to our assumptions regarding future gold, silver, nickel, copper and other metal prices and the estimates of reserves, production and recoveries of third-party mine operators. We rely on reserve estimates reported by the operators on the properties in which we have royalty interests. These estimates and the underlying assumptions affect the potential impairments of long-lived assets and the ability to realize income tax benefits associated with deferred tax assets. These estimates and assumptions also affect the rate at which we recognize revenue or charge depreciation, depletion and amortization to earnings. On an ongoing basis, management evaluates these estimates and assumptions; however, actual amounts could differ from these estimates and assumptions. Differences between estimates and actual amounts could differ significantly and are recorded in the period that the actual amounts are known.
Basis of Consolidation
The consolidated financial statements include the accounts of Royal Gold, Inc. and its wholly-owned subsidiaries. All intercompany accounts, transactions, income and expenses, and profits or losses have been eliminated on consolidation.
Cash and Equivalents
Cash and equivalents consist of all cash balances and highly liquid investments with an original maturity of three months or less. Cash and equivalents are primarily held in cash deposit accounts and United States treasury bills with maturities less than 90 days.
Royalty and Stream Interests
Royalty and stream interests include acquired royalty and stream interests in production, development and exploration stage properties. The costs of acquired royalty and stream interests are capitalized as tangible assets as such interests do not meet the definition of a financial asset under Accounting Standards Codification ("ASC") guidance.
Acquisition costs of production stage royalty and stream interests are depleted using the units of production method over the life of the mineral property (as royalty payments are recognized or sales occur under stream interests), which is estimated using proven and probable reserves as provided by the operator. Acquisition costs of royalty and stream interests on development stage mineral properties, which are not yet in production, are not amortized until the property begins production. Acquisition costs of royalty interests on exploration stage mineral properties, where there are no proven and probable reserves, are not amortized. At such time as the associated exploration stage mineral interests are converted to proven and probable reserves, the cost basis is amortized over the remaining life of the mineral property, using proven and probable reserves. The carrying values of exploration stage mineral interests are evaluated for impairment at such time as information becomes available indicating that the costs may not be recoverable from future production. Exploration costs are charged to operations when incurred.
Available-for-Sale Securities
Investments in securities that management does not have the intent to sell in the near term and that have readily determinable fair values are classified as available-for-sale securities. Unrealized gains and losses on these investments are recorded in accumulated other comprehensive income as a separate component of stockholders' equity, except that declines in market value judged to be other than temporary are recognized in determining net income. When investments are sold, the realized gains and losses on these investments, determined using the specific identification method, are included in determining net income.
The Company's policy for determining whether declines in fair value of available-for-sale securities are other than temporary includes a quarterly analysis of the investments and a review by management of all investments for which the cost exceeds the fair value. Any temporary declines in fair value are recorded as a charge to other comprehensive income. This evaluation considers a number of factors including, but not limited to, the length of time and extent to which the fair value has been less than cost, the financial condition and near term prospects of the issuer, and management's ability and intent to hold the securities until fair value recovers. If such impairment is determined by the Company to be other-than-temporary, the investment's cost basis is written down to fair value and recorded in net income during the period the Company determines such impairment to be other-than-temporary. The new cost basis is not changed for subsequent recoveries in fair value. Refer to Note 5 for further discussion on our available-for-sale securities.
Asset Impairment
We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts of an asset or group of assets may not be recoverable. The recoverability of the carrying value of royalty interests in production and development stage mineral properties is evaluated based upon estimated future undiscounted net cash flows from each royalty interest property using estimates of proven and probable reserves and other relevant information received from the operator. We evaluate the recoverability of the carrying value of royalty interests in exploration stage mineral properties in the event of significant decreases in the price of gold, silver, copper, nickel and other metals, and whenever new information regarding the mineral properties is obtained from the operator indicating that production will not likely occur in the future, thus affecting the future recoverability of our royalty interests. Impairments in the carrying value of each property are measured and recorded to the extent that the carrying value in each property exceeds its estimated fair value, which is generally calculated using estimated future discounted cash flows.
Our estimates of gold, silver, copper, nickel and other metal prices, operator's estimates of proven and probable reserves related to our royalty interests, and operator's estimates of operating, capital and reclamation costs are subject to certain risks and uncertainties which may affect the recoverability of our investment in these royalty interests in mineral properties. Although we have made our best assessment of these factors based on current conditions, it is possible that changes could occur, which could adversely affect the net cash flows expected to be generated from these royalty interests.
Revenue
Revenue is recognized in accordance with the guidance of ASC 605 and based upon amounts contractually due pursuant to the underlying royalty or stream agreement. Specifically, revenue is recognized in accordance with the terms of the underlying royalty or stream agreements subject to (i) the pervasive evidence of the existence of the arrangements; (ii) the risks and rewards having been transferred; (iii) the royalty or stream being fixed or determinable; and (iv) the collectability being reasonably assured. For royalty payments received in-kind, revenue is recorded at the average spot price of gold for the period in which the royalty was earned. For our streaming agreements, we sell most of the delivered gold within three weeks of receipt and recognize revenue when the metal received is sold.
Gold Sales
Gold received under our metal streaming agreements is sold primarily in the spot market or under average rate gold forward contracts. For our gold sold in the spot market, the sales price is fixed at the delivery date based on the gold spot price, while the sales price for our gold sold under average rate gold forward contracts is determined by the average gold price under the term of the contract, typically 15 consecutive trading days shortly after the receipt and purchase of the gold. Revenue from gold sales is recognized on the date of the settlement, which is also the date that title to the gold passes to the purchaser.
Cost of Sales
Cost of sales is specific to our streaming agreement for Mt. Milligan and is the result of the Company's purchases of gold for a cash payment of the lesser of $435 per ounce, or the prevailing market price of gold when purchased.
Production taxes
Certain royalty payments are subject to production taxes (or mining proceeds taxes), which are recognized at the time of revenue recognition. Production taxes are not income taxes and are included within the costs and expenses section in the Company's consolidated statements of operations and comprehensive income.
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with the guidance of ASC 718. The Company recognizes all share-based payments to employees, including grants of employee stock options, stock-settled stock appreciation rights ("SSARs"), restricted stock and performance stock, in its financial statements based upon their fair values.
Operating Segments and Geographical Information
The Company manages its business under a single operating segment, consisting of the acquisition and management of royalty and stream interests. Royal Gold's revenue and long-lived assets (royalty and stream interests, net) are geographically distributed as shown in the following table.
|
Revenue | Royalty and Stream Interests, net |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Fiscal Year Ended June 30, |
Fiscal Year Ended June 30, |
|||||||||||||||||
|
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||
Canada |
34 | % | 24 | % | 24 | % | 53 | % | 52 | % | 43 | % | |||||||
Chile |
21 | % | 29 | % | 25 | % | 31 | % | 30 | % | 35 | % | |||||||
Mexico |
18 | % | 19 | % | 20 | % | 7 | % | 7 | % | 9 | % | |||||||
United States |
15 | % | 17 | % | 18 | % | 3 | % | 4 | % | 5 | % | |||||||
Australia |
4 | % | 4 | % | 5 | % | 3 | % | 3 | % | 3 | % | |||||||
Africa |
3 | % | 3 | % | 4 | % | 1 | % | 1 | % | 1 | % | |||||||
Other |
5 | % | 4 | % | 4 | % | 2 | % | 3 | % | 4 | % |
Income Taxes
The Company accounts for income taxes in accordance with the guidance of Accounting Standards Codification Topic 740. The Company's annual tax rate is based on income, statutory tax rates in effect and tax planning opportunities available to us in the various jurisdictions in which the Company operates. Significant judgment is required in determining the annual tax expense, current tax assets and liabilities, deferred tax assets and liabilities, and our future taxable income, both as a whole and in various tax jurisdictions, for purposes of assessing our ability to realize future benefit from our deferred tax assets. Actual income taxes could vary from these estimates due to future changes in income tax law, significant changes in the jurisdictions in which we operate or unpredicted results from the final determination of each year's liability by taxing authorities.
The Company's deferred income taxes reflect the impact of temporary differences between the reported amounts of assets and liabilities for financial reporting purposes and such amounts measured by tax laws and regulations. In evaluating the realizability of the deferred tax assets, management considers both positive and negative evidence that may exist, such as earnings history, reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies in each tax jurisdiction. A valuation allowance may be established to reduce our deferred tax assets to the amount that is considered more likely than not to be realized through the generation of future taxable income and other tax planning strategies.
The Company has asserted the indefinite reinvestment of certain foreign subsidiary earnings as determined by management's judgment about and intentions concerning the future operations of the Company. As a result, the Company does not record a U.S. deferred tax liability for the excess of the book basis over the tax basis of its investments in foreign corporations to the extent that the basis difference results from earnings that meet the indefinite reversal criteria. Refer to Note 12 for further discussion on our assertion.
The Company's operations may involve dealing with uncertainties and judgments in the application of complex tax regulations in multiple jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from federal, state, and international tax audits. The Company recognizes potential liabilities and records tax liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on its estimate of whether, and the extent to which, additional taxes will be due. The Company adjusts these reserves in light of changing facts and circumstances, such as the progress of a tax audit; however, due to the complexity of some of these uncertainties, the ultimate resolution could result in a payment that is materially different from our current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period which they are determined. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense.
Comprehensive Income
In addition to net income, comprehensive income includes changes in equity during a period associated with cumulative unrealized changes in the fair value of marketable securities held for sale, net of tax effects.
Earnings per Share
Basic earnings per share is computed by dividing net income available to Royal Gold common stockholders by the weighted average number of outstanding common shares for the period, considering the effect of participating securities, and include the outstanding exchangeable shares. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts that may require issuance of common shares were converted. Diluted earnings per share is computed by dividing net income available to common stockholders by the diluted weighted average number of common shares outstanding, including outstanding exchangeable shares, during each fiscal year.
Reclassification
Certain amounts in the prior period financial statements have been reclassified for comparative purposes to conform with the presentation in the current period financial statements.
|
|
Revenue | Royalty and Stream Interests, net |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Fiscal Year Ended June 30, |
Fiscal Year Ended June 30, |
|||||||||||||||||
|
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||
Canada |
34 | % | 24 | % | 24 | % | 53 | % | 52 | % | 43 | % | |||||||
Chile |
21 | % | 29 | % | 25 | % | 31 | % | 30 | % | 35 | % | |||||||
Mexico |
18 | % | 19 | % | 20 | % | 7 | % | 7 | % | 9 | % | |||||||
United States |
15 | % | 17 | % | 18 | % | 3 | % | 4 | % | 5 | % | |||||||
Australia |
4 | % | 4 | % | 5 | % | 3 | % | 3 | % | 3 | % | |||||||
Africa |
3 | % | 3 | % | 4 | % | 1 | % | 1 | % | 1 | % | |||||||
Other |
5 | % | 4 | % | 4 | % | 2 | % | 3 | % | 4 | % |
|
As of June 30, 2014 (Amounts in thousands): |
Cost | Accumulated Depletion |
Net | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Production stage royalty interests: |
||||||||||
Andacollo |
$ | 272,998 | $ | (56,147 | ) | $ | 216,851 | |||
Voisey's Bay |
150,138 | (67,377 | ) | 82,761 | ||||||
Peñasquito |
99,172 | (17,801 | ) | 81,371 | ||||||
LasCruces |
57,230 | (16,917 | ) | 40,313 | ||||||
Dolores |
55,820 | (11,109 | ) | 44,711 | ||||||
Mulatos |
48,092 | (28,548 | ) | 19,544 | ||||||
Wolverine |
45,158 | (12,689 | ) | 32,469 | ||||||
Canadian Malartic |
38,800 | (10,038 | ) | 28,762 | ||||||
Holt |
34,612 | (10,474 | ) | 24,138 | ||||||
Gwalia Deeps |
31,070 | (10,549 | ) | 20,521 | ||||||
Inata |
24,871 | (12,161 | ) | 12,710 | ||||||
Ruby Hill |
24,335 | (13,403 | ) | 10,932 | ||||||
Leeville |
18,322 | (15,917 | ) | 2,405 | ||||||
Robinson |
17,825 | (11,887 | ) | 5,938 | ||||||
Cortez |
10,630 | (9,772 | ) | 858 | ||||||
Other |
192,703 | (130,130 | ) | 62,573 | ||||||
| | | | | | | | | | |
|
1,121,776 | (434,919 | ) | 686,857 | ||||||
Production stage stream interests: |
||||||||||
Mt. Milligan |
783,046 | (7,741 | ) | 775,305 | ||||||
| | | | | | | | | | |
Production stage royalty and stream interests |
1,904,822 | (442,660 | ) | 1,462,162 | ||||||
Development stage royalty interests: |
||||||||||
Pascua-Lama |
372,105 | — | 372,105 | |||||||
El Morro |
35,139 | — | 35,139 | |||||||
Other |
34,349 | — | 34,349 | |||||||
Development stage stream interests: |
||||||||||
Phoenix Gold |
30,620 | — | 30,620 | |||||||
Other |
10,483 | — | 10,483 | |||||||
| | | | | | | | | | |
Development stage royalty and stream interests |
482,696 | — | 482,696 | |||||||
Exploration stage royalty interests |
164,209 |
— |
164,209 |
|||||||
| | | | | | | | | | |
Total royalty and stream interests |
$ | 2,551,727 | $ | (442,660 | ) | $ | 2,109,067 | |||
| | | | | | | | | | |
| | | | | | | | | | |
As of June 30, 2013 (Amounts in thousands): |
Cost | Accumulated Depletion |
Net | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Production stage royalty interests: |
||||||||||
Andacollo |
$ | 272,998 | $ | (44,317 | ) | $ | 228,681 | |||
Voisey's Bay |
150,138 | (51,881 | ) | 98,257 | ||||||
Peñasquito |
99,172 | (12,393 | ) | 86,779 | ||||||
Las Cruces |
57,230 | (11,713 | ) | 45,517 | ||||||
Mulatos |
48,092 | (24,545 | ) | 23,547 | ||||||
Wolverine |
45,158 | (7,891 | ) | 37,267 | ||||||
Dolores |
44,878 | (8,186 | ) | 36,692 | ||||||
Canadian Malartic |
38,800 | (6,320 | ) | 32,480 | ||||||
Holt |
34,612 | (6,564 | ) | 28,048 | ||||||
Gwalia Deeps |
31,070 | (7,194 | ) | 23,876 | ||||||
Inata |
24,871 | (9,303 | ) | 15,568 | ||||||
Ruby Hill |
24,335 | (3,054 | ) | 21,281 | ||||||
Leeville |
18,322 | (15,484 | ) | 2,838 | ||||||
Robinson |
17,825 | (11,224 | ) | 6,601 | ||||||
Cortez |
10,630 | (9,716 | ) | 914 | ||||||
Other |
190,702 | (121,654 | ) | 69,048 | ||||||
| | | | | | | | | | |
|
1,108,833 | (351,439 | ) | 757,394 | ||||||
Development stage royalty interests: |
||||||||||
Pascua-Lama |
372,105 | — | 372,105 | |||||||
Other |
32,934 | — | 32,934 | |||||||
Development stage stream interests: |
||||||||||
Mt. Milligan |
770,093 | — | 770,093 | |||||||
Other |
10,418 | — | 10,418 | |||||||
| | | | | | | | | | |
Development stage royalty and stream interests |
1,185,550 | — | 1,185,550 | |||||||
Exploration stage royalty interests |
177,324 |
— |
177,324 |
|||||||
| | | | | | | | | | |
Total royalty and stream interests |
$ | 2,471,707 | $ | (351,439 | ) | $ | 2,120,268 | |||
| | | | | | | | | | |
| | | | | | | | | | |
|
|
As of June 30, 2014 | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
(Amounts in thousands) Unrealized |
|
||||||||||
|
Cost Basis | Gain | Loss | Fair Value | |||||||||
Non-current: |
|||||||||||||
Seabridge |
$ | 9,565 | — | — | $ | 9,565 | |||||||
Other |
203 | — | (160 | ) | 43 | ||||||||
| | | | | | | | | | | | | |
|
$ | 9,768 | $ | — | $ | (160 | ) | $ | 9,608 | ||||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
|
As of June 30, 2013 | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
(Amounts in thousands) Unrealized |
|
||||||||||
|
Cost Basis | Gain | Loss | Fair Value | |||||||||
Non-current: |
|||||||||||||
Seabridge |
$ | 14,064 | — | (4,509 | ) | $ | 9,555 | ||||||
Other |
203 | — | (63 | ) | 140 | ||||||||
| | | | | | | | | | | | | |
|
$ | 14,267 | $ | — | $ | (4,572 | ) | $ | 9,695 | ||||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
|
|
As of June 30, 2014 |
As of June 30, 2013 |
|||||
---|---|---|---|---|---|---|---|
|
Non-current | Non-current | |||||
|
(Amounts in thousands) |
||||||
Convertible notes due 2019, net |
$ | 311,860 | $ | 302,263 | |||
| | | | | | | |
Total debt |
$ | 311,860 | $ | 302,263 | |||
| | | | | | | |
| | | | | | | |
|
|
Fiscal Years Ended June 30, | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
|
2014 | 2013 | 2012 | |||||||
|
(Amounts in thousands) |
|||||||||
Royalty interests |
$ | 209,953 | $ | 289,224 | $ | 263,054 | ||||
Stream interests |
27,209 | — | — | |||||||
| | | | | | | | | | |
Total revenue |
$ | 237,162 | $ | 289,224 | $ | 263,054 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
|
|
For the Fiscal Years Ended June 30, |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
|
2014 | 2013 | 2012 | |||||||
|
(Amounts in thousands) |
|||||||||
Stock options |
$ | 468 | $ | 456 | $ | 446 | ||||
Stock appreciation rights |
1,305 | 1,107 | 1,219 | |||||||
Restricted stock |
3,110 | 3,240 | 2,757 | |||||||
Performance stock |
(2,303 | ) | 898 | 2,085 | ||||||
| | | | | | | | | | |
Total stock-based compensation expense |
$ | 2,580 | $ | 5,701 | $ | 6,507 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
|
Stock Options | SSARs | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||
Weighted-average expected volatility |
43.6 | % | 43.1 | % | 45.1 | % | 41.3 | % | 43.7 | % | 45.3 | % | |||||||
Weighted-average expected life in years |
5.5 | 5.5 | 5.7 | 4.8 | 6.4 | 6.1 | |||||||||||||
Weighted-average dividend yield |
1.00 | % | 0.86 | % | 0.76 | % | 1.00 | % | 0.90 | % | 0.76 | % | |||||||
Weighted-average risk free interest rate |
1.7 | % | 0.8 | % | 1.1 | % | 1.5 | % | 1.0 | % | 1.2 | % |
|
Number of Shares |
Weighted- Average Exercise Price |
Weighted- Average Remaining Contractual Life (Years) |
Aggregate Intrinsic Value (in thousands) |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Outstanding at July 1, 2013 |
119,313 | $ | 46.12 | ||||||||||
Granted |
24,775 | $ | 59.99 | ||||||||||
Exercised |
(34,495 | ) | $ | 32.48 | |||||||||
Forfeited |
(8,200 | ) | $ | 68.11 | |||||||||
| | | | | | | | | | | | | |
Outstanding at June 30, 2014 |
101,393 | $ | 52.37 | 6.4 | $ | 2,410 | |||||||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Exercisable at June 30, 2014 |
63,531 | $ | 45.16 | 5.1 | $ | 1,967 | |||||||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
|
Number of Shares |
Weighted- Average Exercise Price |
Weighted- Average Remaining Contractual Life (Years) |
Aggregate Intrinsic Value (in thousands) |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Outstanding at July 1, 2013 |
162,284 | $ | 58.28 | ||||||||||
Granted |
84,125 | $ | 62.13 | ||||||||||
Exercised |
(1,614 | ) | $ | 32.52 | |||||||||
Forfeited |
(15,739 | ) | $ | 61.28 | |||||||||
| | | | | | | | | | | | | |
Outstanding at June 30, 2014 |
229,056 | $ | 59.67 | 7.5 | $ | 3,770 | |||||||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Exercisable at June 30, 2014 |
108,586 | $ | 53.42 | 6.1 | $ | 2,466 | |||||||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
|
Number of Shares |
Weighted- Average Grant Date Fair Value |
|||||
---|---|---|---|---|---|---|---|
Non-vested at July 1, 2013 |
107,850 | $ | 66.20 | ||||
Granted |
71,700 | $ | 61.39 | ||||
Vested |
— | $ | — | ||||
Forfeited |
— | $ | — | ||||
| | | | | | | |
Non-vested at June 30, 2014 |
179,550 | $ | 64.28 | ||||
| | | | | | | |
| | | | | | | |
|
Number of Shares |
Weighted- Average Grant Date Fair Value |
|||||
---|---|---|---|---|---|---|---|
Non-vested at July 1, 2013 |
194,706 | $ | 52.15 | ||||
Granted |
66,150 | $ | 61.32 | ||||
Vested |
(71,707 | ) | $ | 44.95 | |||
Forfeited |
(12,058 | ) | $ | 58.63 | |||
| | | | | | | |
Non-vested at June 30, 2014 |
177,091 | $ | 58.06 | ||||
| | | | | | | |
| | | | | | | |
|
|
Fiscal Years Ended June 30, | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
|
2014 | 2013 | 2012 | |||||||
|
(in thousands, except per share data) |
|||||||||
Net income available to Royal Gold common stockholders |
$ | 62,641 | $ | 69,153 | $ | 92,476 | ||||
| | | | | | | | | | |
Weighted-average shares for basic EPS |
64,909,149 | 63,250,247 | 57,220,040 | |||||||
Effect of other dilutive securities |
117,107 | 179,575 | 243,810 | |||||||
| | | | | | | | | | |
Weighted-average shares for diluted EPS |
65,026,256 | 63,429,822 | 57,463,850 | |||||||
| | | | | | | | | | |
| | | | | | | | | | |
Basic earnings per share |
$ | 0.96 | $ | 1.09 | $ | 1.61 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
Diluted earnings per share |
$ | 0.96 | $ | 1.09 | $ | 1.61 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
|
|
Fiscal Years Ended June 30, | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
|
2014 | 2013 | 2012 | |||||||
|
(Amounts in thousands) |
|||||||||
United States |
$ | 17,033 | $ | 65,851 | $ | 110,189 | ||||
Foreign |
65,894 | 71,317 | 42,830 | |||||||
| | | | | | | | | | |
|
$ | 82,927 | $ | 137,168 | $ | 153,019 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
|
Fiscal Years Ended June 30, | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
|
2014 | 2013 | 2012 | |||||||
|
(Amounts in thousands) |
|||||||||
Current: |
||||||||||
Federal |
$ | (3,663 | ) | $ | 30,061 | $ | 35,556 | |||
State |
334 | 368 | 310 | |||||||
Foreign |
30,950 | 44,749 | 17,273 | |||||||
| | | | | | | | | | |
|
$ | 27,621 | $ | 75,178 | $ | 53,139 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
Deferred and others: |
||||||||||
Federal |
$ | (4,122 | ) | $ | (4,341 | ) | $ | 77 | ||
State |
(26 | ) | (27 | ) | — | |||||
Foreign |
(4,018 | ) | (7,051 | ) | 1,494 | |||||
| | | | | | | | | | |
|
$ | (8,166 | ) | $ | (11,419 | ) | $ | 1,571 | ||
| | | | | | | | | | |
Total income tax expense |
$ | 19,455 | $ | 63,759 | $ | 54,710 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
|
Fiscal Years Ended June 30, | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
|
2014 | 2013 | 2012 | |||||||
|
(Amounts in thousands) |
|||||||||
Total expense computed by applying federal rates |
$ | 29,024 | $ | 48,009 | $ | 53,557 | ||||
State and provincial income taxes, net of federal benefit |
334 | 368 | 310 | |||||||
Adjustments of valuation allowance |
— | — | (1,007 | ) | ||||||
Excess depletion |
(1,114 | ) | (1,395 | ) | (1,416 | ) | ||||
Estimates for uncertain tax positions |
(7,386 | ) | 1,868 | 551 | ||||||
Statutory tax attributable to non-controlling interest |
(293 | ) | (1,236 | ) | (2,042 | ) | ||||
Effect of foreign earnings |
1,141 | 4,223 | 511 | |||||||
Effect of foreign earnings indefinitely reinvested |
(1,700 | ) | — | — | ||||||
Effect of recognized loss on available-for-sale securities |
562 | 4,239 | — | |||||||
Unrealized foreign exchange gains |
(367 | ) | 1,146 | (546 | ) | |||||
Changes in estimates and corrected errors of prior year tax |
(594 | ) | 4,979 | 1,075 | ||||||
Other |
(152 | ) | 1,558 | 3,717 | ||||||
| | | | | | | | | | |
|
$ | 19,455 | $ | 63,759 | $ | 54,710 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
|
2014 | 2013 | |||||
---|---|---|---|---|---|---|---|
|
(Amounts in thousands) |
||||||
Deferred tax assets: |
|||||||
Stock-based compensation |
$ | 3,511 | $ | 3,853 | |||
Net operating losses |
19,322 | 25,943 | |||||
Other |
7,068 | 4,460 | |||||
| | | | | | | |
Total deferred tax assets |
29,901 | 34,256 | |||||
Valuation allowance |
(4,933 | ) | (4,606 | ) | |||
| | | | | | | |
Net deferred tax assets |
$ | 24,968 | $ | 29,650 | |||
| | | | | | | |
Deferred tax liabilities: |
|||||||
Mineral property basis |
$ | (158,301 | ) | $ | (165,936 | ) | |
Unrealized foreign exchange gains |
(3,072 | ) | (3,684 | ) | |||
2019 Notes |
(20,002 | ) | (23,281 | ) | |||
Other |
(2,239 | ) | (3,561 | ) | |||
| | | | | | | |
Total deferred tax liabilities |
(183,614 | ) | (196,462 | ) | |||
| | | | | | | |
Total net deferred taxes |
$ | (158,646 | ) | $ | (166,812 | ) | |
| | | | | | | |
| | | | | | | |
|
2014 | 2013 | 2012 | |||||||
---|---|---|---|---|---|---|---|---|---|---|
|
(Amounts in thousands) |
|
||||||||
Total gross unrecognized tax benefits at beginning of year |
$ | 21,166 | $ | 19,469 | $ | 18,836 | ||||
Additions / Reductions for tax positions of current year |
(1,052 | ) | 2,638 | 2,051 | ||||||
Reductions due to settlements with taxing authorities |
(296 | ) | (941 | ) | — | |||||
Reductions due to lapse of statute of limitations |
(6,093 | ) | — | (1,418 | ) | |||||
| | | | | | | | | | |
Total amount of gross unrecognized tax benefits at end of year |
$ | 13,725 | $ | 21,166 | $ | 19,469 | ||||
| | | | | | | | | | |
| | | | | | | | | | |
|
|
2014 | 2013 | 2012 | |||||||
---|---|---|---|---|---|---|---|---|---|---|
|
(Amounts in thousands) |
|||||||||
Cash paid during the period for: |
||||||||||
Interest |
$ | 10,638 | $ | 10,490 | $ | 4,590 | ||||
Income taxes, net of refunds |
$ | 27,322 | $ | 48,809 | $ | 58,520 | ||||
Non-cash investing and financing activities: |
||||||||||
Dividends declared |
$ | 54,049 | $ | 47,997 | $ | 32,357 |
|
|
At June 30, 2014 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
Fair Value | ||||||||||||||
|
Carrying Amount |
|||||||||||||||
|
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets (In thousands): |
||||||||||||||||
United States treasury bills(1) |
$ | 499,992 | $ | 499,992 | $ | 499,992 | $ | — | $ | — | ||||||
Marketable equity securities(2) |
$ | 9,608 | $ | 9,608 | $ | 9,608 | $ | — | $ | — | ||||||
| | | | | | | | | | | | | | | | |
Total assets |
$ | 509,600 | $ | 509,600 | $ | — | $ | — | ||||||||
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Liabilities (In thousands): |
||||||||||||||||
Debt(3) |
$ | 388,860 | $ | 394,050 | $ | 394,050 | $ | — | $ | — | ||||||
| | | | | | | | | | | | | | | | |
Total liabilities |
$ | 394,050 | $ | 394,050 | $ | — | $ | — | ||||||||
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
|
Operators that contributed greater than 10% of the Company's total revenue for any of fiscal years 2014, 2013 or 2012 were as follows (revenue amounts in thousands):
|
Fiscal Year 2014 | Fiscal Year 2013 | Fiscal Year 2012 | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Operator |
Revenue | Percentage of total revenue |
Revenue | Percentage of total revenue |
Revenue | Percentage of total revenue |
|||||||||||||
Teck |
$ | 48,777 | 20.6 | % | $ | 82,272 | 28.4 | % | $ | 64,075 | 24.4 | % | |||||||
Goldcorp, Inc. |
32,339 | 13.6 | % | 32,461 | 11.2 | % | 31,407 | 11.9 | % | ||||||||||
Thompson Creek |
27,209 | 11.5 | % | N/A | N/A | N/A | N/A | ||||||||||||
Vale Newfoundland & Labrador Limited |
25,128 | 10.6 | % | 32,517 | 11.2 | % | 36,030 | 13.7 | % |
|
|
Revenue | Operating income |
Net income attributable to Royal Gold stockholders |
Basic earnings per share |
Diluted earnings per share |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
(Amounts in thousands except per share data) |
|||||||||||||||
Fiscal year 2014 quarter-ended: |
||||||||||||||||
September 30 |
$ | 56,487 | $ | 25,738 | $ | 15,195 | $ | 0.23 | $ | 0.23 | ||||||
December 31 |
52,785 | 22,916 | 10,667 | 0.16 | 0.16 | |||||||||||
March 31 |
57,748 | 28,614 | 20,143 | 0.31 | 0.31 | |||||||||||
June 30 |
70,142 | 31,452 | 16,636 | 0.26 | 0.26 | |||||||||||
| | | | | | | | | | | | | | | | |
|
$ | 237,162 | $ | 108,720 | $ | 62,641 | $ | 0.96 | $ | 0.96 | ||||||
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Fiscal year 2013 quarter-ended: |
||||||||||||||||
September 30 |
$ | 77,862 | $ | 47,646 | $ | 24,771 | $ | 0.42 | $ | 0.41 | ||||||
December 31 |
79,870 | 50,665 | 27,217 | 0.42 | 0.42 | |||||||||||
March 31 |
74,166 | 42,932 | 6,464 | 0.10 | 0.10 | |||||||||||
June 30 |
57,326 | 29,924 | 10,701 | 0.16 | 0.16 | |||||||||||
| | | | | | | | | | | | | | | | |
|
$ | 289,224 | $ | 171,167 | $ | 69,153 | $ | 1.09 | $ | 1.09 | ||||||
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