MAXXAM Posts Its 2013 Audited Financial Statements

HOUSTON--()--MAXXAM Inc. (OTCBB:MAXX) has posted its audited financial statements for the year ended December 31, 2013. Attached hereto are the financial statements described below of the Company as of December 31, 2013, together with certain other information. These financial statements, the related notes and other miscellaneous information have been posted through the pink sheets financial reports service at www.otcmarkets.com, stock symbol “MAXX,” under the tab labeled “Filings and Disclosure.”

The follow exhibits are attached:

  • Exhibit I – Consolidated Balance Sheets
  • Exhibit II – Consolidated Statements of Income
  • Exhibit III – Consolidated Statements of Cash Flows
  • Exhibit IV – Consolidated Statements Of Changes In Stockholders' Equity
  • Exhibit V – Shares Outstanding Report
  • Exhibit VI – Miscellaneous Information
           

Exhibit I

 

MAXXAM INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(In millions of dollars)
 
December 31, December 31,
2013 2012
 
Assets
Current assets:
Cash and cash equivalents $ 8.9 $ 7.5
Marketable securities and other short-term investments 26.7 26.9
Deferred income taxes 1.5 1.1
Prepaid expenses and other current assets 0.7 0.5
Restricted cash   0.1           0.1  
Total current assets 37.9 36.1
Property and equipment, net of accumulated depreciation of $65.1

and $60.2, respectively

85.1 91.7
Real estate inventory 41.2 43.0
Deferred financing costs 1.6 1.8
Investment in PM Texas LLC 9.2 9.7
Other long-term assets and investments 0.5 0.8
Restricted cash   1.6     1.6  
Total assets $ 177.1   $ 184.7  
 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 0.5 $ 0.8
Short-term borrowings and current maturities of long-term debt 3.7 3.5
Accrued interest 0.5 0.5
Deferred income 1.3 1.5
Accrued compensation and related benefits 1.6 0.6
Other accrued liabilities   4.0     4.0  
Total current liabilities 11.6 10.9
Long-term debt, less current maturities 96.1 99.7
Accrued pension liability 11.1 19.2
Other noncurrent liabilities 5.6 7.5
Losses in excess of investment in FireRock, LLC   -     2.9  
Total liabilities   124.4     140.2  
Commitments and contingencies
Stockholders’ equity:
Class A preferred stock 0.3 0.3
Common stock 5.2 5.2
Additional paid in capital 225.6 225.6
Retained earnings 4.9 3.6
Accumulated other comprehensive loss (12.6 ) (19.6 )
Treasury stock, at cost   (170.7 )   (170.6 )
Total stockholders’ equity   52.7     44.5  
Total liabilities and stockholders’ equity $ 177.1   $ 184.7  
 
           

Exhibit II

 
MAXXAM INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In millions of dollars)
 
Years Ended
December 31,
2013 2012
 
 
Sales:
Leased properties $ 12.7 $ 12.5
Lot sales 2.0 1.8
Other real estate sales 2.9 -
Realty operations 2.9 2.1
Other   0.4     1.1  
Total sales   20.9     17.5  
 
Cost of sales and operations:
Leased properties - -
Lot sales 0.8 1.2
Other real estate sales 2.1 -
Realty operations 2.3 1.5
Selling, general and administrative expenses 11.9 12.3
Depreciation 5.4 3.5
Gain on sale of a portion of the Contingent Real Estate (4.1 ) -
Reversal of net investment in the Palco Debtors   -     (485.8 )
Total costs and expenses   18.4     (467.3 )
 
Operating income (loss):
Real estate 4.6 5.1
Racing 3.5 (0.8 )
Corporate (5.6 ) (5.3 )
Forest Products   -     485.8  
Total operating income   2.5     484.8  
 
Other income (expense):
Equity income (losses) from joint ventures 4.2 (1.7 )
Investment, interest and other income (expense), net 2.6 1.3
Interest expense (7.7 ) (8.0 )
Amortization of deferred financing costs   (0.2 )   (0.3 )
Income from continuing operations before income taxes 1.4 476.1
Provision for income taxes   (0.1 )   (8.7 )
Net income $ 1.3   $ 467.4  
 
           

Exhibit III

 
MAXXAM INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of dollars)
 
Years Ended December 31,
2013 2012
 
Cash flows from operating activities:
Net income $ 1.3 $ 467.4
Adjustments to reconcile net income to net cash used for

operating activities:

Reversal of net investment in the Palco Debtors - (485.8 )
Depreciation 5.4 3.5
Gain on sale of a portion of the Contingent Real Estate (4.1 ) -
Equity income from FireRock joint venture asset sale (6.0 ) -
Non-cash stock-based compensation expense 0.1 -
Amortization of deferred financing costs 0.2 0.3
Equity losses from joint venture operations 1.8 1.7
Deferred taxes - 11.0
Increase (decrease) in cash resulting from changes in:
Real estate inventory 1.8 1.0
Prepaid expenses and other assets (0.3 ) 0.2
Accounts payable (0.3 ) 0.1
Deferred revenue related to mineral lease (1.3 ) 2.8
Other accrued liabilities 0.5 (2.8 )
Long-term assets and long-term liabilities (0.6 ) (2.7 )
Other   -     (0.5 )
Net cash used for operating activities   (1.5 )   (3.8 )
 
Cash flows from investing activities:
Proceeds from sale of a portion of the Contingent Real Estate 4.7 -
Sales of marketable securities and other investments 12.1 0.5
Purchases of marketable securities and other investments (12.1 ) (14.7 )
Net decrease in restricted cash - 5.1
Distributions from FireRock joint venture 2.3 -
Investment in joint ventures (0.5 ) (0.5 )
Capital expenditures   (0.1 )   -  
Net cash provided by (used for) investing activities   6.4     (9.6 )
 
Cash flows from financing activities:
Principal payments on long-term debt (3.4 ) (3.1 )
Treasury stock purchases   (0.1 )   (0.5 )
Net cash used for financing activities   (3.5 )   (3.6 )
 
Net increase (decrease) in cash and cash equivalents 1.4 (17.0 )
Cash and cash equivalents at beginning of the year   7.5     24.5  
Cash and cash equivalents at end of the year $ 8.9   $ 7.5  
 

Exhibit IV

 
MAXXAM INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In millions)
                           

Class A
Preferred
Stock

   

Common
Stock

   

Additional
Paid in
Capital

   

Retained
Earnings

   

Accumulated
Other
Comprehensive
Income (Loss)

   

Treasury
Stock

    Total
Balance at December 31, 2011 $ 0.3 $ 5.2 $ 225.6 $ (463.8 ) $ (19.3 ) $ (170.1 ) $ (422.1 )
Comprehensive Income:
Net income - - - 467.4 - - 467.4
Other comprehensive loss - - - - (0.3 ) - (0.3 )

Treasury stock purchases

      -       -       -       -         -         (0.5 )       (0.5 )
Balance at December 31, 2012 $ 0.3 $ 5.2 $ 225.6 $ 3.6 $ (19.6 ) $ (170.6 ) $ 44.5
Comprehensive Income: -
Net income - - - 1.3 - - 1.3
Other comprehensive income - - - - 7.0 - 7.0

Treasury stock purchases

      -       -       -       -         -         (0.1 )       (0.1 )
Balance at December 31, 2013     $ 0.3     $ 5.2     $ 225.6     $ 4.9       $ (12.6 )     $ (170.7 )     $ 52.7  
 

Exhibit V

 
MAXXAM INC.
SHARES OUTSTANDING REPORT
     
December 31,
2013 2012
 
Preferred Stock
Par value $ 125.00 $ 125.00
Liquidation value $ 187.50 $ 187.50
Shares authorized 10,000 10,000
Shares issued 2,675 2,675
Shares outstanding 2,664 2,664
 
Common Stock
Par value $ 125.00 $ 125.00
Shares authorized 52,000 52,000
Shares issued 41,853 41,853
Shares outstanding 18,124 18,179
 
Treasury Stock
Class A Preferred Stock 11 11
Common Stock 23,729 23,674

Exhibit VI

MISCELLANEOUS INFORMATION

Director and Executive Officer Compensation

The following table sets forth the compensation for 2013 and 2012, as computed for Internal Revenue Service purposes, of (a) Charles E. Hurwitz, the Chairman of the Board and Chief Executive Officer of MAXXAM Inc. (the “Company”), and (b) the Company’s other directors and executive officers as a group (8 persons):

                             
Person/Group Year Salary Bonus Other Total
Charles E. Hurwitz 2012 225,000(1) 178,130 42,145 445,275
2013 365,000(2) -0-(3) 36,187 401,187

Other directors and executive
officers as a group

2012 1,065,000 436,600 269,523 1,771,123
2013 1,065,000 606,250 155,083 1,826,333
 

(1) In March 2012, a Board committee approved a change in the composition of Mr. Hurwitz’s 2012 base compensation from $795,000 in cash to $295,000 in cash plus options with tandem stock appreciation rights (“SARs”) in respect of the other $500,000 (the “2012 Base Compensation Exchange”). Mr. Hurwitz was inadvertently paid only $225,000 in cash during 2012; this oversight was corrected in May 2013.

(2) In December 2012, a committee of the Company’s Board of Directors (the “Board”) extended into 2013 the 2012 CEO Base Compensation Change (the “2013 Base Compensation Exchange”) described in footnote (1).

(3) In December 2013, a Board committee awarded Mr. Hurwitz a $500,000 bonus, which was paid in January 2014.

Company Securities Transactions

The following table sets forth a list of transactions in Company securities during 2013 and through the date of issuance of the Company’s December 31, 2013 audited financial statements (the “2013 Financial Statements”) between the Company and (a) Charles E. Hurwitz, (b) affiliates and family members of Charles E. Hurwitz, and (c) the Company’s other directors and executive officers.

     
Person/Group       Transaction
Charles E. Hurwitz:
 
-- February 18, 2014

-- The Delaware Court of Chancery approves the settlement of the Arbiter Litigation described in Note 9 to

the 2013 Financial Statements. As part of the settlement, Mr. Hurwitz agreed, among other things, to (a)
release 1,370 options with tandem SARs granted to him as part of the 2012 CEO Base Compensation Exchange
described above and 1,282 options with tandem SARs granted to him as part of the 2013 CEO Base
Compensation Exchange described above, and (b) waive any right to proceed against the Company with respect
        to the $1,000,000 in base compensation covered by such released options.
 
Affiliates and Family
Members of Charles E.
Hurwitz:
 
None        
 
Other Directors and
Executive Officers:
 

-- March 6, 2013

-- The Board extends into 2013 the 2012 Director Base Fee Exchange (as defined below), resulting in the

 

grant to each of the Company’s five outside directors (Messrs. Robert J. Cruikshank, J. Kent Friedman,

Ezra G. Levin, Stanley D. Rosenberg and Michael J. Rosenthal) of 65 options with tandem SARs (325 in the

aggregate) at an exercise price of $700.00 (the then-current Common Stock trading price). The term “2012

Director Base Fee Exchange” refers to the March 2012 approval by the Board of a change in the composition

of the Company’s outside directors’ 2012 base fee from $50,000 in cash to $20,000 in cash plus options

with tandem SARs in respect of the other $30,000.

 
-- February 10, 2014

-- Pursuant to a December 2008 amendment to the deferred fee agreement between the Company and Mr. Levin,

the Company pays Mr. Levin an aggregate of approximately $41,458 in respect of phantom shares of the

Company’s Common Stock previously granted to Mr. Levin in lieu of directors’ fees (based on the closing

price of the Common Stock for the preceding ten business days).

 

Contacts

MAXXAM Inc.
Emily Madison, (713) 975-7600

Sharing

Contacts

MAXXAM Inc.
Emily Madison, (713) 975-7600