x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended March 31, 2017
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ____________ to ____________
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Delaware
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36-4277050
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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|
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1955 West Field Court, Lake Forest, Illinois
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60045
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(Address of Prinicpal Executive Offices)
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(Zip Code)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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PART I
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 1.
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FINANCIAL STATEMENTS
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Three Months Ended March 31
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||||||
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2017
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|
2016
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|
||||
Statements of Income:
|
|
|
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|
||||
Net sales
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$
|
1,536.5
|
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$
|
1,401.0
|
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Cost of sales
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(1,198.0
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)
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(1,102.0
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)
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Gross profit
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338.5
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299.0
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Selling, general, and administrative expenses
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(128.4
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)
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(114.3
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)
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Other expense, net
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(7.0
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)
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(3.9
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)
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Income from operations
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203.1
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|
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180.8
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Interest expense, net
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(24.0
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)
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(21.6
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)
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Income before taxes
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179.1
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|
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159.2
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Income tax provision
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(61.7
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)
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(55.5
|
)
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Net income
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$
|
117.4
|
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$
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103.7
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Net income per common share:
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||||
Basic
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$
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1.25
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$
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1.09
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Diluted
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$
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1.24
|
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$
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1.09
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Dividends declared per common share
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$
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0.63
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$
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0.55
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Statements of Comprehensive Income:
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|
||||
Net income
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$
|
117.4
|
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$
|
103.7
|
|
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Other comprehensive income, net of tax:
|
|
|
|
|
||||
Foreign currency translation adjustment
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(0.2
|
)
|
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—
|
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Reclassification adjustments to cash flow hedges included in net income, net of tax of $0.5 million and $0.5 million
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0.9
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0.9
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Amortization of pension and postretirement plans actuarial loss and prior service cost, net of tax of $1.2 million and $1.0 million
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2.2
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1.6
|
|
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Other comprehensive income
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2.9
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|
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2.5
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Comprehensive income
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$
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120.3
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$
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106.2
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March 31,
2017 |
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December 31,
2016 |
||||
ASSETS
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Current assets:
|
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||||
Cash and cash equivalents
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$
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254.0
|
|
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$
|
239.3
|
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Accounts receivable, net of allowance for doubtful accounts and customer deductions of $10.4 million and $10.1 million as of March 31, 2017, and December 31, 2016, respectively
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733.3
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689.2
|
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Inventories
|
744.5
|
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723.6
|
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||
Prepaid expenses and other current assets
|
47.3
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30.3
|
|
||
Federal and state income taxes receivable
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—
|
|
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13.9
|
|
||
Total current assets
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1,779.1
|
|
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1,696.3
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|
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Property, plant, and equipment, net
|
2,887.2
|
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2,895.7
|
|
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Goodwill
|
737.1
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|
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737.9
|
|
||
Intangible assets, net
|
358.8
|
|
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367.1
|
|
||
Other long-term assets
|
81.2
|
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80.0
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Total assets
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$
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5,843.4
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$
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5,777.0
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
|
|
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|
||||
Current maturities of long-term debt
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$
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156.5
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$
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25.8
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Capital lease obligations
|
1.3
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1.3
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Accounts payable
|
367.3
|
|
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323.8
|
|
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Dividends payable
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60.0
|
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59.9
|
|
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Federal and state income taxes payable
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24.8
|
|
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—
|
|
||
Accrued liabilities
|
147.1
|
|
|
201.2
|
|
||
Accrued interest
|
19.0
|
|
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13.4
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Total current liabilities
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776.0
|
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625.4
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Long-term liabilities:
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Long-term debt
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2,458.4
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2,620.0
|
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||
Capital lease obligations
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20.0
|
|
|
20.3
|
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Deferred income taxes
|
349.3
|
|
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334.7
|
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Compensation and benefits
|
355.2
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357.2
|
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Other long-term liabilities
|
59.8
|
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59.6
|
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Total long-term liabilities
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3,242.7
|
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3,391.8
|
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Commitments and contingent liabilities
|
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Stockholders' equity:
|
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|
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Common stock, par value $0.01 per share, 300.0 million shares authorized, 94.2 million and 94.2 million shares issued as of March 31, 2017, and December 31, 2016, respectively
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0.9
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0.9
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Additional paid in capital
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456.0
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451.4
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Retained earnings
|
1,504.5
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1,447.1
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Accumulated other comprehensive loss
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(136.7
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)
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(139.6
|
)
|
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Total stockholders' equity
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1,824.7
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1,759.8
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Total liabilities and stockholders' equity
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$
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5,843.4
|
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$
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5,777.0
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Three Months Ended March 31
|
||||||
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2017
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2016
|
||||
Cash Flows from Operating Activities:
|
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|
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Net income
|
$
|
117.4
|
|
|
$
|
103.7
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
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|
||||
Depreciation, depletion, and amortization of intangibles
|
92.5
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88.7
|
|
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Amortization of deferred financing costs
|
2.0
|
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|
1.9
|
|
||
Share-based compensation expense
|
4.6
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5.6
|
|
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Deferred income tax provision
|
12.2
|
|
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8.1
|
|
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Pension and postretirement benefits expense, net of contributions
|
1.1
|
|
|
6.4
|
|
||
Excess tax benefits from stock based awards
|
0.3
|
|
|
—
|
|
||
Other, net
|
(1.8
|
)
|
|
2.1
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
(Increase) decrease in assets —
|
|
|
|
||||
Accounts receivable
|
(44.1
|
)
|
|
5.1
|
|
||
Inventories
|
(20.9
|
)
|
|
(15.7
|
)
|
||
Prepaid expenses and other current assets
|
(15.4
|
)
|
|
(13.9
|
)
|
||
Increase (decrease) in liabilities —
|
|
|
|
||||
Accounts payable
|
25.6
|
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|
0.3
|
|
||
Accrued liabilities
|
(48.5
|
)
|
|
(43.5
|
)
|
||
Federal and state income taxes payable / receivable
|
39.1
|
|
|
42.2
|
|
||
Net cash provided by operating activities
|
164.1
|
|
|
191.0
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
||||
Additions to property, plant, and equipment
|
(57.8
|
)
|
|
(52.9
|
)
|
||
Additions to other long term assets
|
(2.9
|
)
|
|
(2.9
|
)
|
||
Proceeds from disposals
|
1.7
|
|
|
—
|
|
||
Other, net
|
1.2
|
|
|
0.3
|
|
||
Net cash used for investing activities
|
(57.8
|
)
|
|
(55.5
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
||||
Repayments of debt and capital lease obligations
|
(31.7
|
)
|
|
(1.9
|
)
|
||
Common stock dividends paid
|
(59.4
|
)
|
|
(53.1
|
)
|
||
Repurchases of common stock
|
—
|
|
|
(100.3
|
)
|
||
Shares withheld to cover employee restricted stock taxes
|
(0.5
|
)
|
|
(2.1
|
)
|
||
Net cash used for financing activities
|
(91.6
|
)
|
|
(157.4
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
14.7
|
|
|
(21.9
|
)
|
||
Cash and cash equivalents, beginning of period
|
239.3
|
|
|
184.2
|
|
||
Cash and cash equivalents, end of period
|
$
|
254.0
|
|
|
$
|
162.3
|
|
|
12/31/16 Allocation
|
|
Adjustments
|
|
Revised Allocation
|
||||||
Goodwill
|
$
|
157.3
|
|
|
$
|
(1.1
|
)
|
|
$
|
156.2
|
|
Other intangible assets
|
94.4
|
|
|
|
|
94.4
|
|
||||
Property, plant and equipment
|
95.3
|
|
|
|
|
95.3
|
|
||||
Other net assets
|
38.6
|
|
|
|
|
38.6
|
|
||||
Net assets acquired
|
$
|
385.6
|
|
|
$
|
(1.1
|
)
|
|
$
|
384.5
|
|
|
Three Months Ended March 31
|
|
||||||
|
2017
|
|
2016
|
|
||||
Numerator:
|
|
|
|
|
||||
Net income
|
$
|
117.4
|
|
|
$
|
103.7
|
|
|
Less: distributed and undistributed earnings allocated to participating securities
|
(1.0
|
)
|
|
(1.1
|
)
|
|
||
Net income attributable to common shareholders
|
$
|
116.4
|
|
|
$
|
102.6
|
|
|
Denominator:
|
|
|
|
|
||||
Weighted average basic common shares outstanding
|
93.4
|
|
|
94.1
|
|
|
||
Effect of dilutive securities
|
0.2
|
|
|
0.1
|
|
|
||
Weighted average diluted common shares outstanding
|
93.6
|
|
|
94.2
|
|
|
||
Basic income per common share
|
$
|
1.25
|
|
|
$
|
1.09
|
|
|
Diluted income per common share
|
$
|
1.24
|
|
|
$
|
1.09
|
|
|
|
Three Months Ended March 31
|
|
||||||
|
2017
|
|
2016
|
|
||||
Hexacomb working capital adjustment (a)
|
$
|
2.3
|
|
|
$
|
—
|
|
|
DeRidder mill incident (b)
|
(5.0
|
)
|
|
—
|
|
|
||
Asset disposals and write-offs
|
(2.3
|
)
|
|
(1.8
|
)
|
|
||
Integration-related, facilities closure and other costs (c)
|
(0.8
|
)
|
|
(2.0
|
)
|
|
||
Other
|
(1.2
|
)
|
|
(0.1
|
)
|
|
||
Total
|
$
|
(7.0
|
)
|
|
$
|
(3.9
|
)
|
|
(a)
|
The three months ended March 31, 2017 include
$2.3 million
of income related to a working capital adjustment from the April 2015 sale of our Hexacomb corrugated manufacturing operations in Europe and Mexico.
|
(b)
|
The three months ended March 31, 2017 include
$5.0 million
of costs for the property damage and business interruption insurance deductible corresponding to the Februrary 2017 explosion at our DeRidder, LA mill.
|
(c)
|
The three months ended March 31, 2017 include
$0.8 million
of charges consisting of closure costs related to corrugated products facilities, integration costs related to the TimBar Corporation and Columbus Container, Inc. acquisitions, and costs related to a lump sum settlement payment of a multiemployer pension plan withdrawal liability for one of our corrugated products facilities.
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Raw materials
|
$
|
282.2
|
|
|
$
|
271.9
|
|
Work in process
|
13.7
|
|
|
12.9
|
|
||
Finished goods
|
212.8
|
|
|
206.5
|
|
||
Supplies and materials
|
235.8
|
|
|
232.3
|
|
||
Inventories
|
$
|
744.5
|
|
|
$
|
723.6
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Land and land improvements
|
$
|
154.1
|
|
|
$
|
149.7
|
|
Buildings
|
723.7
|
|
|
717.1
|
|
||
Machinery and equipment
|
4,987.7
|
|
|
4,951.4
|
|
||
Construction in progress
|
133.3
|
|
|
125.4
|
|
||
Other
|
66.2
|
|
|
66.7
|
|
||
Property, plant, and equipment, at cost
|
6,065.0
|
|
|
6,010.3
|
|
||
Less accumulated depreciation
|
(3,177.8
|
)
|
|
(3,114.6
|
)
|
||
Property, plant, and equipment, net
|
$
|
2,887.2
|
|
|
$
|
2,895.7
|
|
|
Goodwill
|
||
Balance at January 1, 2017
|
$
|
737.9
|
|
Acquisition adjustments (a)(b)
|
(0.8
|
)
|
|
Balance at March 31, 2017
|
$
|
737.1
|
|
(a)
|
During the quarter ended March 31, 2017, the Company received
$1.1 million
from the seller related to a working capital adjustment. This adjustment was recorded as a decrease to the goodwill balance for the Company's August 2016 acquisition of TimBar Corporation.
|
(b)
|
During the quarter ended March 31, 2017, the Company recorded a
$0.3 million
opening balance sheet adjustment to increase the goodwill balance for the Company's November 2016 acquisition of Columbus Container, Inc.
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||
|
Weighted Average Remaining Useful Life (in Years)
|
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Weighted Average Remaining Useful Life (in Years)
|
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
||||||||
Customer relationships
|
12.9
|
|
$
|
424.5
|
|
|
$
|
86.8
|
|
|
13.1
|
|
$
|
424.5
|
|
|
$
|
79.8
|
|
Trademarks and trade names
|
10.7
|
|
27.7
|
|
|
9.3
|
|
|
10.5
|
|
27.7
|
|
|
8.1
|
|
||||
Other
|
4.3
|
|
4.2
|
|
|
1.5
|
|
|
4.3
|
|
4.2
|
|
|
1.4
|
|
||||
Total intangible assets (excluding goodwill)
|
12.7
|
|
$
|
456.4
|
|
|
$
|
97.6
|
|
|
12.9
|
|
$
|
456.4
|
|
|
$
|
89.3
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Compensation and benefits
|
$
|
73.6
|
|
|
$
|
120.4
|
|
Medical insurance and workers’ compensation
|
28.8
|
|
|
28.8
|
|
||
Franchise, property, and sales and use taxes
|
15.5
|
|
|
16.7
|
|
||
Customer volume discounts and rebates
|
14.7
|
|
|
18.9
|
|
||
Environmental liabilities and asset retirement obligations
|
5.9
|
|
|
6.4
|
|
||
Severance, retention, and relocation
|
3.3
|
|
|
3.0
|
|
||
Other
|
5.3
|
|
|
7.0
|
|
||
Total
|
$
|
147.1
|
|
|
$
|
201.2
|
|
|
Pension Plans
|
|
||||||
|
Three Months Ended March 31
|
|
||||||
|
2017
|
|
2016
|
|
||||
Service cost
|
$
|
6.1
|
|
|
$
|
6.1
|
|
|
Interest cost
|
10.4
|
|
|
10.2
|
|
|
||
Expected return on plan assets
|
(13.5
|
)
|
|
(12.4
|
)
|
|
||
Net amortization of unrecognized amounts
|
|
|
|
|
||||
Prior service cost
|
1.5
|
|
|
1.4
|
|
|
||
Actuarial loss
|
1.9
|
|
|
1.4
|
|
|
||
Net periodic benefit cost
|
$
|
6.4
|
|
|
$
|
6.7
|
|
|
|
Postretirement Plans
|
|
||||||
|
Three Months Ended March 31
|
|
||||||
|
2017
|
|
2016
|
|
||||
Service cost
|
$
|
0.1
|
|
|
$
|
0.2
|
|
|
Interest cost
|
0.1
|
|
|
0.2
|
|
|
||
Amortization of actuarial (income) loss
|
—
|
|
|
(0.2
|
)
|
|
||
Net periodic benefit cost
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
|
Restricted Stock
|
|
Performance Units
|
||||||||||
|
Shares
|
|
Weighted Average Grant- Date Fair Value
|
|
Shares
|
|
Weighted Average Grant- Date Fair Value
|
||||||
Outstanding at January 1, 2017
|
786,079
|
|
|
$
|
63.44
|
|
|
232,088
|
|
|
$
|
62.68
|
|
Granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Vested
|
(18,950
|
)
|
|
67.64
|
|
|
—
|
|
|
—
|
|
||
Forfeitures
|
(2,153
|
)
|
|
64.59
|
|
|
—
|
|
|
—
|
|
||
Outstanding at March 31, 2017
|
764,976
|
|
|
$
|
63.33
|
|
|
232,088
|
|
|
$
|
62.68
|
|
|
Three Months Ended March 31
|
|
||||||
|
2017
|
|
2016
|
|
||||
Restricted stock
|
$
|
3.4
|
|
|
$
|
4.9
|
|
|
Performance units
|
1.2
|
|
|
0.7
|
|
|
||
Total share-based compensation expense
|
4.6
|
|
|
5.6
|
|
|
||
Income tax benefit
|
(1.8
|
)
|
|
(2.2
|
)
|
|
||
Share-based compensation expense, net of tax benefit
|
$
|
2.8
|
|
|
$
|
3.4
|
|
|
|
March 31, 2017
|
||||
|
Unrecognized Compensation Expense
|
|
Remaining Weighted Average Recognition Period (in years)
|
||
Restricted stock
|
$
|
23.7
|
|
|
2.6
|
Performance units
|
7.2
|
|
|
2.7
|
|
Total unrecognized share-based compensation expense
|
$
|
30.9
|
|
|
2.6
|
|
|
Unrealized Loss On Treasury Locks, Net
|
|
Unrealized Loss on Foreign Exchange Contracts
|
|
Unfunded Employee Benefit Obligations
|
|
Total
|
||||||||
Balance at January 1, 2017
|
|
$
|
(17.8
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
(121.4
|
)
|
|
$
|
(139.6
|
)
|
Amounts reclassified from AOCI, net of tax
|
|
0.9
|
|
(a)
|
(0.2
|
)
|
|
2.2
|
|
(b)
|
2.9
|
|
||||
Balance at March 31, 2017
|
|
$
|
(16.9
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
(119.2
|
)
|
|
$
|
(136.7
|
)
|
(a)
|
This AOCI component is included in interest expense, net. Amount relates to the amortization of the effective portion of treasury lock derivative instruments recorded in AOCI. The net amount of settlement gains or losses on derivative instruments included in AOCI to be amortized over the next 12 months is a net loss of
$5.7 million
(
$3.5 million
after tax). For a discussion of treasury lock derivative instrument activity, see Note 13, Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our
2016
Annual Report on Form 10-K.
|
(b)
|
These AOCI components are included in the computation of net pension and postretirement benefit costs. See Note
11
,
Employee Benefit Plans and Other Postretirement Benefits
, for additional information.
|
|
|
Sales, net
|
|
Operating Income (Loss)
|
|
||||||||||||
Three Months Ended March 31, 2017
|
|
Trade
|
|
Inter-segment
|
|
Total
|
|
|
|||||||||
Packaging
|
|
$
|
1,251.3
|
|
|
$
|
5.7
|
|
|
$
|
1,257.0
|
|
|
$
|
190.8
|
|
(a)
|
Paper
|
|
259.2
|
|
|
—
|
|
|
259.2
|
|
|
29.8
|
|
|
||||
Corporate and Other
|
|
26.0
|
|
|
28.2
|
|
|
54.2
|
|
|
(17.5
|
)
|
(a)
|
||||
Intersegment eliminations
|
|
—
|
|
|
(33.9
|
)
|
|
(33.9
|
)
|
|
—
|
|
|
||||
|
|
$
|
1,536.5
|
|
|
$
|
—
|
|
|
$
|
1,536.5
|
|
|
203.1
|
|
|
|
Interest expense, net
|
|
|
|
|
|
|
|
(24.0
|
)
|
|
|||||||
Income before taxes
|
|
|
|
|
|
|
|
$
|
179.1
|
|
|
|
|
Sales, net
|
|
Operating Income (Loss)
|
|
||||||||||||
Three Months Ended March 31, 2016
|
|
Trade
|
|
Inter-segment
|
|
Total
|
|
|
|||||||||
Packaging
|
|
$
|
1,093.8
|
|
|
$
|
1.7
|
|
|
$
|
1,095.5
|
|
|
$
|
161.5
|
|
(b)
|
Paper
|
|
280.5
|
|
|
—
|
|
|
280.5
|
|
|
36.1
|
|
(b)
|
||||
Corporate and Other
|
|
26.7
|
|
|
36.0
|
|
|
62.7
|
|
|
(16.8
|
)
|
|
||||
Intersegment eliminations
|
|
—
|
|
|
(37.7
|
)
|
|
(37.7
|
)
|
|
—
|
|
|
||||
|
|
$
|
1,401.0
|
|
|
$
|
—
|
|
|
$
|
1,401.0
|
|
|
180.8
|
|
|
|
Interest expense, net
|
|
|
|
|
|
|
|
(21.6
|
)
|
|
|||||||
Income before taxes
|
|
|
|
|
|
|
|
$
|
159.2
|
|
|
(a)
|
The three months ended March 31, 2017 include the following:
|
1.
|
$0.8 million
of charges consisting of closure costs related to corrugated products facilities, integration costs related to the TimBar Corporation and Columbus Container, Inc. acquisitions, and costs related to a lump sum settlement payment of a multiemployer pension plan withdrawal liability for one of our corrugated products facilities.
|
2.
|
$5.0 million
of costs for the property damage and business interruption insurance deductible corresponding to the February 2017 explosion at our DeRidder, LA mill.
|
3.
|
$2.3 million
of income related to a working capital adjustment from the April 2015 sale of our Hexacomb corrugated manufacturing operations in Europe and Mexico.
|
(b)
|
The three months ended March 31, 2016 include charges of
$2.8 million
for facilities closure costs recorded within "Other expense, net" and "Cost of sales" as appropriate.
|
Item 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended March 31
|
|
||||||
|
2017
|
|
2016
|
|
||||
Earnings per diluted share, as reported
|
$
|
1.24
|
|
|
$
|
1.09
|
|
|
Special items:
|
|
|
|
|
||||
DeRidder mill incident
|
0.03
|
|
|
—
|
|
|
||
Integration-related, facilities closure and other costs
|
0.01
|
|
|
0.02
|
|
|
||
Hexacomb working capital adjustment
|
(0.01
|
)
|
|
—
|
|
|
||
Total special items
|
0.03
|
|
|
0.02
|
|
|
||
Earnings per diluted share, excluding special items
|
$
|
1.27
|
|
|
$
|
1.11
|
|
|
|
Three Months Ended March 31
|
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Packaging
|
$
|
1,257.0
|
|
|
$
|
1,095.5
|
|
|
$
|
161.5
|
|
Paper
|
259.2
|
|
|
280.5
|
|
|
(21.3
|
)
|
|||
Corporate and Other
|
54.2
|
|
|
62.7
|
|
|
(8.5
|
)
|
|||
Intersegment eliminations
|
(33.9
|
)
|
|
(37.7
|
)
|
|
3.8
|
|
|||
Net sales
|
$
|
1,536.5
|
|
|
$
|
1,401.0
|
|
|
$
|
135.5
|
|
|
|
|
|
|
|
||||||
Packaging
|
$
|
190.8
|
|
|
$
|
161.5
|
|
|
$
|
29.3
|
|
Paper
|
29.8
|
|
|
36.1
|
|
|
(6.3
|
)
|
|||
Corporate and Other
|
(17.5
|
)
|
|
(16.8
|
)
|
|
(0.7
|
)
|
|||
Income from operations
|
$
|
203.1
|
|
|
$
|
180.8
|
|
|
$
|
22.3
|
|
Interest expense, net
|
(24.0
|
)
|
|
(21.6
|
)
|
|
(2.4
|
)
|
|||
Income before taxes
|
179.1
|
|
|
159.2
|
|
|
19.9
|
|
|||
Income tax provision
|
(61.7
|
)
|
|
(55.5
|
)
|
|
(6.2
|
)
|
|||
Net income
|
$
|
117.4
|
|
|
$
|
103.7
|
|
|
$
|
13.7
|
|
Non-GAAP Measures (a)
|
|
|
|
|
|
||||||
Net income excluding special items
|
$
|
119.6
|
|
|
$
|
105.6
|
|
|
$
|
14.0
|
|
Consolidated EBITDA
|
295.6
|
|
|
269.5
|
|
|
26.1
|
|
|||
Consolidated EBITDA excluding special items
|
299.1
|
|
|
272.2
|
|
|
26.9
|
|
|||
Packaging EBITDA
|
268.0
|
|
|
234.8
|
|
|
33.2
|
|
|||
Packaging EBITDA excluding special items
|
272.2
|
|
|
236.7
|
|
|
35.5
|
|
|||
Paper EBITDA
|
43.8
|
|
|
50.3
|
|
|
(6.5
|
)
|
|||
Paper EBITDA excluding special items
|
43.8
|
|
|
51.1
|
|
|
(7.3
|
)
|
(a)
|
See "Reconciliations of Non-GAAP Financial Measures to Reported Amounts" included in this Item 2 for a reconciliation of non-GAAP measures to the most comparable GAAP measure.
|
|
Three Months Ended March 31
|
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Net cash provided by (used for):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
164.1
|
|
|
$
|
191.0
|
|
|
$
|
(26.9
|
)
|
Investing activities
|
(57.8
|
)
|
|
(55.5
|
)
|
|
(2.3
|
)
|
|||
Financing activities
|
(91.6
|
)
|
|
(157.4
|
)
|
|
65.8
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
14.7
|
|
|
$
|
(21.9
|
)
|
|
$
|
36.6
|
|
|
Three Months Ended March 31
|
||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||
|
Income
before
Taxes
|
Income Taxes
|
Net
Income
|
|
Income
before Taxes
|
Income Taxes
|
Net
Income
|
||||||||||||
As reported in accordance with GAAP
|
$
|
179.1
|
|
$
|
(61.7
|
)
|
$
|
117.4
|
|
|
$
|
159.2
|
|
$
|
(55.5
|
)
|
$
|
103.7
|
|
Special items:
|
|
|
|
|
|
|
|
||||||||||||
DeRidder mill incident (a)
|
5.0
|
|
(1.9
|
)
|
3.1
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Integration-related, facilities closure and other (a)(b)
|
0.8
|
|
(0.3
|
)
|
0.5
|
|
|
2.8
|
|
(0.9
|
)
|
1.9
|
|
||||||
Hexacomb working capital adjustment (a)
|
(2.3
|
)
|
0.9
|
|
(1.4
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Total special items
|
3.5
|
|
(1.3
|
)
|
2.2
|
|
|
2.8
|
|
(0.9
|
)
|
1.9
|
|
||||||
Excluding special items
|
$
|
182.6
|
|
$
|
(63.0
|
)
|
$
|
119.6
|
|
|
$
|
162.0
|
|
$
|
(56.4
|
)
|
$
|
105.6
|
|
(a)
|
The three months ended March 31, 2017 include the following:
|
1.
|
$0.8 million of charges consisting of closure costs related to corrugated products facilities, integration costs related to the TimBar Corporation and Columbus Container, Inc. acquisitions, and costs related to a lump sum settlement payment of a multiemployer pension plan withdrawal liability for one of our corrugated products facilities.
|
2.
|
$5.0 million of costs for the property damage and business interruption insurance deductible corresponding to the February 2017 explosion at our DeRidder, LA mill.
|
3.
|
$2.3 million of income related to a working capital adjustment from the April 2015 sale of our Hexacomb corrugated manufacturing operations in Europe and Mexico.
|
(b)
|
The three months ended March 31, 2016 include $2.8 million of facilities closure costs.
|
|
Three Months Ended March 31
|
|
||||||
|
2017
|
|
2016
|
|
||||
Net income
|
$
|
117.4
|
|
|
$
|
103.7
|
|
|
Interest expense, net
|
24.0
|
|
|
21.6
|
|
|
||
Income tax provision
|
61.7
|
|
|
55.5
|
|
|
||
Depreciation, amortization, and depletion
|
92.5
|
|
|
88.7
|
|
|
||
EBITDA
|
$
|
295.6
|
|
|
$
|
269.5
|
|
|
Special items:
|
|
|
|
|
||||
DeRidder mill incident
|
5.0
|
|
|
—
|
|
|
||
Integration-related, facilities closure and other costs
|
0.8
|
|
|
2.7
|
|
|
||
Hexacomb working capital adjustment
|
(2.3
|
)
|
|
—
|
|
|
||
EBITDA excluding special items
|
$
|
299.1
|
|
|
$
|
272.2
|
|
|
|
Three Months Ended March 31
|
|
||||||
|
2017
|
|
2016
|
|
||||
Packaging
|
|
|
|
|
||||
Segment income
|
$
|
190.8
|
|
|
$
|
161.5
|
|
|
Depreciation, amortization, and depletion
|
77.2
|
|
|
73.3
|
|
|
||
EBITDA
|
268.0
|
|
|
234.8
|
|
|
||
DeRidder mill incident
|
5.0
|
|
|
—
|
|
|
||
Integration-related, facilities closure and other
|
0.8
|
|
|
1.9
|
|
|
||
Hexacomb working capital adjustment
|
(1.6
|
)
|
|
—
|
|
|
||
EBITDA excluding special items
|
$
|
272.2
|
|
|
$
|
236.7
|
|
|
|
|
|
|
|
||||
Paper
|
|
|
|
|
||||
Segment income
|
$
|
29.8
|
|
|
$
|
36.1
|
|
|
Depreciation, amortization, and depletion
|
14.0
|
|
|
14.2
|
|
|
||
EBITDA
|
43.8
|
|
|
50.3
|
|
|
||
Integration-related, facilities closure and other
|
—
|
|
|
0.8
|
|
|
||
EBITDA excluding special items
|
$
|
43.8
|
|
|
$
|
51.1
|
|
|
|
|
|
|
|
||||
Corporate and Other
|
|
|
|
|
||||
Segment loss
|
$
|
(17.5
|
)
|
|
$
|
(16.8
|
)
|
|
Depreciation, amortization, and depletion
|
1.3
|
|
|
1.2
|
|
|
||
EBITDA
|
(16.2
|
)
|
|
(15.6
|
)
|
|
||
Hexacomb working capital adjustment
|
(0.7
|
)
|
|
—
|
|
|
||
EBITDA excluding special items
|
$
|
(16.9
|
)
|
|
$
|
(15.6
|
)
|
|
|
|
|
|
|
||||
EBITDA excluding special items
|
$
|
299.1
|
|
|
$
|
272.2
|
|
|
•
|
the impact of general economic conditions;
|
•
|
the impact of acquired businesses and risks and uncertainties regarding operation, expected benefits and integration of such businesses;
|
•
|
containerboard, corrugated products, and white paper general industry conditions, including competition, product demand, product pricing, and input costs;
|
•
|
fluctuations in wood fiber and recycled fiber costs;
|
•
|
fluctuations in purchased energy costs;
|
•
|
the possibility of unplanned outages or interruptions at our principal facilities;
|
•
|
the timing and amount of insurance recoveries relating to the DeRidder incident; and
|
•
|
legislative or regulatory actions or requirements, particularly concerning environmental or tax matters.
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 4.
|
CONTROLS AND PROCEDURES
|
Item 1.
|
LEGAL PROCEEDINGS
|
Item 1A.
|
RISK FACTORS
|
Item 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Issuer Purchases of Equity Securities
|
|
||||||||||||||
Period
|
|
Total
Number of Shares Purchased (a) |
|
Average Price Paid Per Share
|
|
Total Number
of Shares Purchased as Part of Publicly Announced Plans or Programs |
|
Approximate
Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
(in millions)
|
|
||||||
January 1-31, 2017
|
|
5,203
|
|
|
$
|
89.45
|
|
|
—
|
|
|
$
|
193.0
|
|
|
February 1-28, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
193.0
|
|
|
||
March 1-31, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
193.0
|
|
|
||
Total
|
|
5,203
|
|
|
$
|
89.45
|
|
|
—
|
|
|
$
|
193.0
|
|
|
(a)
|
All shares were withheld from employees to cover income and payroll taxes on equity awards that vested during the period.
|
Item 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
Item 4.
|
MINE SAFETY DISCLOSURES
|
Item 5.
|
OTHER INFORMATION
|
Item 6.
|
EXHIBITS
|
Exhibit
Number |
|
Description
|
31.1
|
|
Certification of Chief Executive Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. †
|
31.2
|
|
Certification of Chief Financial Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. †
|
32
|
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. §1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. †
|
101
|
|
The following financial information from Packaging Corporation of America’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Income and Comprehensive Income for the three ended March 31, 2017 and 2016, (ii) Consolidated Balance Sheets at March 31, 2017 and December 31, 2016, (iii) Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016, and (iv) the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements. †
|
†
|
Filed herewith.
|
|
|
Packaging Corporation of America
|
|
|
|
|
|
/s/ M
ARK
W. K
OWLZAN
|
|
|
Mark W. Kowlzan
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
|
/s/ R
OBERT
P. M
UNDY
|
|
|
Robert P. Mundy
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
/s/ Mark W. Kowlzan
|
|
|
Mark W. Kowlzan
Chairman and Chief Executive Officer
|
|
|
/s/ Robert P. Mundy
|
|
|
Robert P. Mundy
Senior Vice President and Chief Financial Officer
|
|
|
/s/ Mark W. Kowlzan
|
|
|
Mark W. Kowlzan
|
|
|
Chairman and Chief Executive Officer
|
|
|
/s/ Robert P. Mundy
|
|
|
Robert P. Mundy
|
|
|
Senior Vice President and Chief Financial Officer
|