x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2015
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o
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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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62-1612879
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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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100 North Point Center East, Suite 600
Alpharetta, Georgia
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30022
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common stock, par value $0.10 per share
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New York Stock Exchange
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Page
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Part I.
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Part II.
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Item 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures about Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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Part III.
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions and Director Independence
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Item 14.
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Principal Accountant Fees and Services
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Part IV.
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Item 15.
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Exhibits and Financial Statement Schedules
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Signatures
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Glossary of Terms
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Name
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Age
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Position
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Frédéric P. Villoutreix
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51
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Chairman of the Board and Chief Executive Officer
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Allison Aden
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54
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Executive Vice President, Finance and Chief Financial Officer
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Michel Fievez
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58
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Executive Vice President, Engineered Papers
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Greerson McMullen
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53
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General Counsel and Secretary
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Don Meltzer
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61
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Executive Vice President, Advanced Materials & Structures
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Robert Cardin
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52
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Corporate Controller
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•
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Foreign countries can impose significant import, export, excise and income tax and other regulatory restrictions on our business, including limitations on repatriation of profits and proceeds of liquidated assets. While we attempt to manage our operations and international movements of cash from and amongst our foreign subsidiaries in a tax-efficient manner, unanticipated international movement of funds due to unexpected changes in our business or changes in tax and associated regulatory schemes could result in a material adverse impact on our financial condition, results of operations and cash flows;
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We are exposed to global as well as regional macroeconomic and microeconomic factors, which can affect demand and pricing for our products, including: unsettled political and economic conditions, including as they relate to Brazil, Russia and the Ukraine; expropriation; import and export tariffs; regulatory controls and restrictions; and inflationary and deflationary economies. These factors together with risks inherent in international operations, including risks associated with any non-compliance with the U.S. Foreign Corrupt Practices Act, the 2013 Brazilian Clean Companies Act, the U.K. Bribery Act of 2010, the 2013 Russian Law on Preventing Corruption and other non-U.S. anti-bribery law compliance, could adversely affect our financial condition, results of operations and cash flows;
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We participate in two joint ventures and have one manufacturing facility in China. One joint venture sells our products primarily to Chinese tobacco companies. The second joint venture has built a new reconstituted tobacco mill in China, which began operations in September 2014. Operations in China entail a number of risks including international and domestic political risks, the need to obtain operating and other permits from the government, adverse changes in the policies or in our relations with government-owned or run customers and any ability to operate within an evolving legal and economic system. There are also risks inherent with 50% joint ventures, such as a lack of an ability to control, and visibility with respect to, operations, customer relations and compliance practice, among others. Our operations are located in many countries around the World and operate, to a degree, in a decentralized manner. There are inherent control and fraud risks in such a structure; and
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Changes or increases in international trade sanctions or quotas may restrict or prohibit us from transacting business with established customers or securing new ones, including as to Russia and the Ukraine.
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demonstrating to customers that the restructuring activities will not result in adverse changes in service standards or business focus;
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consolidating administrative infrastructure and manufacturing operations while maintaining adequate controls throughout the execution of the restructuring;
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preserving distribution, sales and other important relationships and resolving potential conflicts that may arise;
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estimating, managing and minimizing the cost of the restructuring activities;
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minimizing the diversion of management attention from ongoing business activities;
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maintaining employee morale, retaining key employees, maintaining reasonable collective bargaining agreements and avoiding strikes, work stoppages or other forms of labor unrest while implementing restructuring programs that often include reductions in the workforce;
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securing government approval of such plans, where necessary, and managing the litigation and associated liabilities that often are associated with restructuring actions;
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incurring costs associated with delays in restructuring activities caused by labor negotiations and/or governmental approvals;
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coordinating and combining operations, which may be subject to additional constraints imposed by collective bargaining agreements and local laws and regulations; and
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achieving the anticipated levels of net cost savings and efficiency as a result of the restructuring activities.
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High
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Low
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2016
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First Quarter (through February 25, 2016)
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$
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42.16
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$
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29.57
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2015
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Fourth Quarter
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$
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43.47
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$
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34.07
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Third Quarter
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41.00
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32.50
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Second Quarter
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46.60
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38.05
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First Quarter
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47.50
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38.50
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2014
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Fourth Quarter
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$
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44.38
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$
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35.48
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Third Quarter
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44.87
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40.82
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Second Quarter
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44.34
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38.88
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First Quarter
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51.23
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41.29
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Issuer Purchases of Equity Securities
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Period
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Total
Number of
Shares
Purchased
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Average
Price
Paid per
Share
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Total Number of Shares
Purchased as Part of
Publicly Announced
Programs
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Approximate Dollar Value of Shares that May Yet be Purchased Under the Programs
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(# shares)
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($ in millions)
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($ in millions)
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First Quarter 2015
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63,220
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$
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46.30
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—
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$
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—
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$
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—
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Second Quarter 2015
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145
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46.00
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—
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—
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—
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Third Quarter 2015
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—
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—
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—
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—
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—
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Fourth Quarter 2015
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October 2015
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—
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—
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—
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—
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—
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November 2015
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—
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—
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—
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—
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—
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December 2015
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—
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—
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—
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—
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—
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Total 2015
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63,365
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$
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46.30
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—
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$
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—
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$
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—
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For the Years Ended December 31,
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2015
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2014
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2013
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2012
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2011
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Results of Operations
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Net Sales
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$
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764.1
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$
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794.3
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$
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772.8
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$
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778.5
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$
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788.3
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Cost of products sold
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539.7
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575.5
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520.1
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519.0
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545.3
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Gross Profit
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224.4
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218.8
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252.7
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259.5
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243.0
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Nonmanufacturing expenses
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106.8
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99.6
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86.5
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86.4
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88.0
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Provision for losses on business tax credits
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—
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—
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—
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—
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15.9
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Restructuring & impairment expense
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14.6
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13.1
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41.3
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21.4
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14.0
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Operating Profit
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103.0
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106.1
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124.9
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151.7
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125.1
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Income from Continuing Operations
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90.5
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89.7
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78.5
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104.1
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92.1
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(Loss) income from Discontinued Operations
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(0.8
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—
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(2.4
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(24.3
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0.5
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Net Income
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$
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89.7
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$
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89.7
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$
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76.1
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$
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79.8
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$
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92.6
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Net Income (Loss) Per Share- Basic:
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Income from continuing operations
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$
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2.97
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$
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2.94
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$
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2.51
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$
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3.33
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$
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2.73
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(Loss) income from discontinued operations
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(0.02
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—
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(0.08
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)
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(0.79
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)
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0.02
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Net income per share - Basic
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$
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2.95
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$
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2.94
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$
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2.43
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$
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2.54
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$
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2.75
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Net Income (Loss) Per Share - Diluted:
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Income from continuing operations
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$
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2.96
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$
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2.93
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$
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2.49
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$
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3.29
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$
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2.71
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(Loss) income from discontinued operations
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(0.02
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)
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—
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(0.07
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)
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(0.78
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)
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0.02
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|||||
Net income per share - Diluted
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$
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2.94
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$
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2.93
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$
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2.42
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$
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2.51
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$
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2.73
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Cash Dividends Declared and Paid Per Share
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$
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1.54
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$
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1.46
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$
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1.26
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$
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0.45
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$
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0.30
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EBITDA from Continuing Operations
(1)
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$
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162.8
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$
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162.5
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$
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171.7
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$
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195.4
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$
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163.3
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Adjusted EBITDA from Continuing Operations
(1)
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$
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177.4
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$
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177.7
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$
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213.0
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$
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216.8
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$
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193.2
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Percent of Net Sales
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Gross Profit
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29.4
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%
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27.5
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%
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32.7
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%
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33.3
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%
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30.8
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%
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|||||
Nonmanufacturing expenses
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14.0
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%
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12.5
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%
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11.2
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%
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11.1
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%
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11.2
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%
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|||||
Financial Position
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Capital spending
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$
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24.2
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$
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35.1
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$
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29.1
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$
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27.2
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$
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60.9
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Depreciation and amortization
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41.0
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45.1
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37.3
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38.5
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42.1
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|||||
Total Assets
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1,290.0
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1,185.0
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1,224.1
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885.7
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841.9
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|||||
Total Debt
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571.5
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437.9
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382.7
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155.0
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146.0
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|||||
Total debt to capital ratio
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55.0
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%
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47.2
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%
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43.7
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%
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23.2
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%
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23.5
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%
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(1)
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Earnings before interest, taxes, depreciation and amortization ("EBITDA") from Continuing Operations is a non-GAAP financial measure that is calculated by adding interest expense, income tax provision and depreciation and amortization expense to income from continuing operations, reduced by amortization of deferred revenue. Adjusted EBITDA from Continuing Operations is a non-GAAP financial measure that is calculated by adding provision for losses on business tax credits, restructuring and impairment expense and start-up expenses from our CTS joint venture in China to EBITDA from continuing operations. The Company believes investors' understanding of the Company's performance is enhanced by disclosing these non-GAAP financial measures as a reasonable basis for comparison of the Company's ongoing results of operations. However, non-GAAP financial measures should not be considered in isolation or as a substitute for financial information derived in accordance with GAAP. Reconciliations to income from continuing operations are as follows ($ in millions):
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For the Years Ended December 31,
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||||||||||||||||||
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2015
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2014
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2013
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|
2012
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|
2011
|
||||||||||
Income from Continuing Operations
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$
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90.5
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$
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89.7
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$
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78.5
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$
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104.1
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$
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92.1
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|
Plus: Interest expense
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9.7
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7.2
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2.9
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3.3
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2.3
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|||||
Plus: Income tax provision
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21.6
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20.5
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53.0
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|
49.5
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|
|
32.8
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|||||
Plus: Depreciation and amortization
|
41.0
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|
|
45.1
|
|
|
37.3
|
|
|
38.5
|
|
|
42.1
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|
|||||
Less: Amortization of deferred revenue
|
—
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|
|
—
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|
|
—
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|
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—
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(6.0
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)
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|||||
EBITDA from Continuing Operations
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162.8
|
|
|
162.5
|
|
|
171.7
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|
|
195.4
|
|
|
163.3
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|
|||||
Plus: Provision for losses on business tax credits
|
—
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|
|
—
|
|
|
—
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|
|
—
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|
|
15.9
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|
|||||
Plus: Restructuring and impairment expense
|
14.6
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|
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13.1
|
|
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41.3
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|
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21.4
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|
|
14.0
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|
|||||
Plus: CTS start-up expenses
|
—
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|
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2.1
|
|
|
—
|
|
|
—
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|
|
—
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|||||
Adjusted EBITDA from Continuing Operations
|
$
|
177.4
|
|
|
$
|
177.7
|
|
|
$
|
213.0
|
|
|
$
|
216.8
|
|
|
$
|
193.2
|
|
•
|
Summary
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•
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Recent Developments
|
•
|
Critical Accounting Policies and Estimates
|
•
|
Recent Accounting Pronouncements
|
•
|
Results of Operations
|
•
|
Liquidity and Capital Resources
|
•
|
Other Factors Affecting Liquidity and Capital Resources
|
•
|
Contractual Obligations
|
•
|
Outlook
|
•
|
Forward-Looking Statements
|
2016-2018
|
$
|
1.7
|
|
2022-2033
|
0.4
|
|
|
2016-2034
|
9.7
|
|
|
Indefinite
|
4.9
|
|
|
|
16.7
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2015
(1)
|
|
2014
|
|
2013
(2)
|
||||||
|
($ in millions, except per share amounts)
|
||||||||||
Net Sales
|
$
|
764.1
|
|
|
$
|
794.3
|
|
|
$
|
772.8
|
|
Cost of products sold
|
539.7
|
|
|
575.5
|
|
|
520.1
|
|
|||
Gross Profit
|
224.4
|
|
|
218.8
|
|
|
252.7
|
|
|||
Selling expense
|
22.2
|
|
|
22.0
|
|
|
20.9
|
|
|||
Research expense
|
14.0
|
|
|
15.7
|
|
|
15.3
|
|
|||
General expense
|
70.6
|
|
|
61.9
|
|
|
50.3
|
|
|||
Total nonmanufacturing expenses
|
106.8
|
|
|
99.6
|
|
|
86.5
|
|
|||
Restructuring and impairment expense
|
14.6
|
|
|
13.1
|
|
|
41.3
|
|
|||
Operating Profit
|
103.0
|
|
|
106.1
|
|
|
124.9
|
|
|||
Interest expense
|
9.7
|
|
|
7.2
|
|
|
2.9
|
|
|||
Other income (expense), net
|
12.2
|
|
|
9.3
|
|
|
5.7
|
|
|||
Income from Continuing Operations before Income Taxes and Income from Equity Affiliates
|
105.5
|
|
|
108.2
|
|
|
127.7
|
|
|||
Provision for income taxes
|
21.6
|
|
|
20.5
|
|
|
53.0
|
|
|||
Income from equity affiliates, net of income taxes
|
6.6
|
|
|
2.0
|
|
|
3.8
|
|
|||
Income from Continuing Operations
|
90.5
|
|
|
89.7
|
|
|
78.5
|
|
|||
(Loss) income from Discontinued Operations
|
(0.8
|
)
|
|
—
|
|
|
(2.4
|
)
|
|||
Net Income
|
$
|
89.7
|
|
|
$
|
89.7
|
|
|
$
|
76.1
|
|
|
|
|
|
|
|
||||||
Net Income (Loss) Per Share - Basic:
|
|
|
|
|
|
||||||
Income per share from continuing operations
|
$
|
2.97
|
|
|
$
|
2.94
|
|
|
$
|
2.51
|
|
(Loss) income per share from discontinued operations
|
(0.02
|
)
|
|
—
|
|
|
(0.08
|
)
|
|||
Net income per share - basic
|
$
|
2.95
|
|
|
$
|
2.94
|
|
|
$
|
2.43
|
|
|
|
|
|
|
|
||||||
Net Income (Loss) Per Share - Diluted:
|
|
|
|
|
|
||||||
Income per share from continuing operations
|
$
|
2.96
|
|
|
$
|
2.93
|
|
|
$
|
2.49
|
|
(Loss) income per share from discontinued operations
|
(0.02
|
)
|
|
—
|
|
|
(0.07
|
)
|
|||
Net Income per share - diluted
|
$
|
2.94
|
|
|
$
|
2.93
|
|
|
$
|
2.42
|
|
|
2015
|
|
2014
|
|
Change
|
|
Percent Change
|
|||||||
Engineered Papers
|
$
|
583.9
|
|
|
$
|
666.9
|
|
|
$
|
(83.0
|
)
|
|
(12.4
|
)%
|
Advanced Materials & Structures
|
180.2
|
|
|
127.4
|
|
|
52.8
|
|
|
41.4
|
|
|||
Total
|
$
|
764.1
|
|
|
$
|
794.3
|
|
|
$
|
(30.2
|
)
|
|
(3.8
|
)%
|
|
Amount
|
|
Percent
|
|||
Changes in currency exchange rates
|
$
|
(73.6
|
)
|
|
(9.3
|
)%
|
Changes in product mix and selling prices and sales volumes
|
(9.2
|
)
|
|
(1.2
|
)
|
|
Changes in royalties
|
(1.5
|
)
|
|
(0.2
|
)
|
|
Incremental AMS segment revenue from acquisitions
|
53.8
|
|
|
6.8
|
|
|
Changes in freight and discounts, returns & allowances
|
0.3
|
|
|
0.1
|
|
|
Total
|
$
|
(30.2
|
)
|
|
(3.8
|
)%
|
|
|
|
|
|
|
Percent Change
|
|
Percent of Net Sales
|
||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
|
2015
|
|
2014
|
||||||||||
Net Sales
|
$
|
764.1
|
|
|
$
|
794.3
|
|
|
$
|
(30.2
|
)
|
|
(3.8
|
)%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cost of products sold
|
539.7
|
|
|
575.5
|
|
|
(35.8
|
)
|
|
(6.2
|
)
|
|
70.6
|
|
|
72.5
|
|
|||
Gross Profit
|
$
|
224.4
|
|
|
$
|
218.8
|
|
|
$
|
5.6
|
|
|
2.6
|
%
|
|
29.4
|
%
|
|
27.5
|
%
|
|
|
|
|
|
|
Percent Change
|
|
Percent of Net Sales
|
||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
|
2015
|
|
2014
|
||||||||||
Selling expense
|
$
|
22.2
|
|
|
$
|
22.0
|
|
|
$
|
0.2
|
|
|
0.9
|
%
|
|
2.9
|
%
|
|
2.8
|
%
|
Research expense
|
14.0
|
|
|
15.7
|
|
|
(1.7
|
)
|
|
(10.8
|
)
|
|
1.8
|
|
|
2.0
|
|
|||
General expense
|
70.6
|
|
|
61.9
|
|
|
8.7
|
|
|
14.1
|
|
|
9.2
|
|
|
7.8
|
|
|||
Nonmanufacturing expenses
|
$
|
106.8
|
|
|
$
|
99.6
|
|
|
$
|
7.2
|
|
|
7.2
|
%
|
|
13.9
|
%
|
|
12.6
|
%
|
|
|
|
|
|
Percent Change
|
|
Return on Net Sales
|
|||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
|
2015
|
|
2014
|
||||||||||
Engineered Papers
|
$
|
121.5
|
|
|
$
|
124.5
|
|
|
$
|
(3.0
|
)
|
|
(2.4
|
)%
|
|
20.8
|
%
|
|
18.7
|
%
|
Advanced Materials & Structures
|
16.7
|
|
|
10.2
|
|
|
6.5
|
|
|
63.7
|
|
|
9.3
|
|
|
8.0
|
|
|||
Unallocated expenses
|
(35.2
|
)
|
|
(28.6
|
)
|
|
(6.6
|
)
|
|
23.1
|
|
|
|
|
|
|||||
Total
|
$
|
103.0
|
|
|
$
|
106.1
|
|
|
$
|
(3.1
|
)
|
|
(2.9
|
)%
|
|
13.5
|
%
|
|
13.4
|
%
|
|
2014
|
|
2013
|
|
Change
|
|
Percent Change
|
|||||||
Engineered Papers
|
$
|
666.9
|
|
|
$
|
768.6
|
|
|
$
|
(101.7
|
)
|
|
(13.2
|
)%
|
Advanced Materials & Structures
|
127.4
|
|
|
4.2
|
|
|
123.2
|
|
|
N.M.
|
|
|||
Total
|
$
|
794.3
|
|
|
$
|
772.8
|
|
|
$
|
21.5
|
|
|
2.8
|
%
|
|
Amount
|
|
Percent
|
|||
Changes in mix of products sold and selling prices
|
$
|
(28.1
|
)
|
|
(3.6
|
)%
|
Changes due to sales volume
|
(71.5
|
)
|
|
(9.2
|
)
|
|
AMS segment revenue
|
123.2
|
|
|
15.9
|
|
|
Changes in currency exchange rates
|
(2.1
|
)
|
|
(0.3
|
)
|
|
Total
|
$
|
21.5
|
|
|
2.8
|
%
|
|
|
|
|
|
Percent Change
|
|
Percent of Net Sales
|
|||||||||||||
|
2014
|
|
2013
|
|
Change
|
|
|
2014
|
|
2013
|
||||||||||
Net Sales
|
$
|
794.3
|
|
|
$
|
772.8
|
|
|
$
|
21.5
|
|
|
2.8
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cost of products sold
|
575.5
|
|
|
520.1
|
|
|
55.4
|
|
|
10.7
|
|
|
72.5
|
|
|
67.3
|
|
|||
Gross Profit
|
$
|
218.8
|
|
|
$
|
252.7
|
|
|
$
|
(33.9
|
)
|
|
(13.4
|
)%
|
|
27.5
|
%
|
|
32.7
|
%
|
|
|
|
|
|
Percent Change
|
|
Percent of Net Sales
|
|||||||||||||
|
2014
|
|
2013
|
|
Change
|
|
|
2014
|
|
2013
|
||||||||||
Selling expense
|
$
|
22.0
|
|
|
$
|
20.9
|
|
|
$
|
1.1
|
|
|
5.3
|
%
|
|
2.8
|
%
|
|
2.7
|
%
|
Research expense
|
15.7
|
|
|
15.3
|
|
|
0.4
|
|
|
2.6
|
|
|
2.0
|
|
|
2.0
|
|
|||
General expense
|
61.9
|
|
|
50.3
|
|
|
11.6
|
|
|
23.1
|
|
|
7.8
|
|
|
6.5
|
|
|||
Nonmanufacturing expenses
|
$
|
99.6
|
|
|
$
|
86.5
|
|
|
$
|
13.1
|
|
|
15.1
|
%
|
|
12.6
|
%
|
|
11.2
|
%
|
|
|
|
|
|
Percent Change
|
|
Return on Net Sales
|
|||||||||||||
|
2014
|
|
2013
|
|
Change
|
|
|
2014
|
|
2013
|
||||||||||
Engineered Papers
|
124.5
|
|
|
148.9
|
|
|
(24.4
|
)
|
|
(16.4
|
)
|
|
18.7
|
|
|
19.4
|
|
|||
Advanced Materials & Structures
|
10.2
|
|
|
(1.1
|
)
|
|
11.3
|
|
|
N.M.
|
|
|
8.0
|
|
|
N.M.
|
|
|||
Unallocated expenses
|
(28.6
|
)
|
|
(22.9
|
)
|
|
(5.7
|
)
|
|
24.9
|
|
|
|
|
|
|||||
Total
|
$
|
106.1
|
|
|
$
|
124.9
|
|
|
$
|
(18.8
|
)
|
|
(15.1
|
)%
|
|
13.4
|
%
|
|
16.2
|
%
|
•
|
Reinvesting capital in our businesses through a disciplined approach to meet global demand for value-adding solutions;
|
•
|
Returning at least one-third of annual free cash flow to stockholders via dividends and share repurchase programs; and
|
•
|
Retaining flexibility to execute growth opportunities in current and adjacent industries.
|
Cash Flows from Operating Activities
($ in millions)
|
For the Years Ended December 31,
|
||||||||||
2015
|
|
2014
|
|
2013
|
|||||||
Net Income
|
$
|
89.7
|
|
|
$
|
89.7
|
|
|
$
|
76.1
|
|
Less: (Loss) income from discontinued operations
|
(0.8
|
)
|
|
—
|
|
|
(2.4
|
)
|
|||
Income from continuing operations
|
90.5
|
|
|
89.7
|
|
|
78.5
|
|
|||
Non-cash items included in net income:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
41.0
|
|
|
45.1
|
|
|
37.3
|
|
|||
Impairment
|
6.7
|
|
|
—
|
|
|
37.2
|
|
|||
Deferred income tax provision (benefit)
|
(6.7
|
)
|
|
3.3
|
|
|
17.3
|
|
|||
Pension and other postretirement benefits
|
4.2
|
|
|
1.2
|
|
|
1.1
|
|
|||
Stock-based compensation
|
3.5
|
|
|
5.9
|
|
|
3.2
|
|
|||
Income from equity affiliates
|
(6.6
|
)
|
|
(2.0
|
)
|
|
(3.8
|
)
|
|||
Gain on sale of intangible assets
|
(4.3
|
)
|
|
—
|
|
|
—
|
|
|||
Excess tax benefits of stock-based awards
|
(0.5
|
)
|
|
(0.6
|
)
|
|
(0.5
|
)
|
|||
Cash dividends received from equity affiliates
|
3.9
|
|
|
4.4
|
|
|
3.7
|
|
|||
Other items
|
0.1
|
|
|
0.8
|
|
|
1.0
|
|
|||
Net changes in operating working capital
|
12.8
|
|
|
18.6
|
|
|
0.8
|
|
|||
Net cash provided (used) by operating activities of:
|
|
|
|
|
|
||||||
Continuing operations
|
144.6
|
|
|
166.4
|
|
|
175.8
|
|
|||
Discontinued operations
|
0.1
|
|
|
(0.5
|
)
|
|
2.3
|
|
|||
Cash Provided by Operations
|
$
|
144.7
|
|
|
$
|
165.9
|
|
|
$
|
178.1
|
|
Operating Working Capital
($ in millions)
|
For the Years Ended December 31,
|
||||||||||
2015
|
|
2014
|
|
2013
|
|||||||
Changes in operating working capital
|
|
|
|
|
|
||||||
Accounts receivable
|
$
|
(18.0
|
)
|
|
$
|
13.3
|
|
|
$
|
4.4
|
|
Inventories
|
1.3
|
|
|
14.9
|
|
|
(1.0
|
)
|
|||
Prepaid expenses
|
1.1
|
|
|
(0.6
|
)
|
|
0.1
|
|
|||
Accounts payable
|
6.5
|
|
|
3.1
|
|
|
(1.5
|
)
|
|||
Accrued expenses
|
3.7
|
|
|
(8.0
|
)
|
|
3.4
|
|
|||
Accrued income taxes
|
18.2
|
|
|
(4.1
|
)
|
|
(4.6
|
)
|
|||
Net changes in operating working capital
|
$
|
12.8
|
|
|
$
|
18.6
|
|
|
$
|
0.8
|
|
Cash Flows from Investing Activities
($ in millions)
|
For the Years Ended December 31,
|
||||||||||
2015
|
|
2014
|
|
2013
|
|||||||
Capital spending
|
$
|
(24.2
|
)
|
|
$
|
(35.1
|
)
|
|
$
|
(29.1
|
)
|
Capitalized software costs
|
(0.9
|
)
|
|
(1.0
|
)
|
|
(0.5
|
)
|
|||
Acquisitions, net of cash acquired
|
(280.6
|
)
|
|
(32.6
|
)
|
|
(229.7
|
)
|
|||
Investment in equity affiliates
|
—
|
|
|
(8.8
|
)
|
|
—
|
|
|||
Other
|
(8.0
|
)
|
|
3.0
|
|
|
5.6
|
|
|||
Cash Used for Investing
|
$
|
(313.7
|
)
|
|
$
|
(74.5
|
)
|
|
$
|
(253.7
|
)
|
Cash Flows from Financing Activities
($ in millions)
|
For the Years Ended December 31,
|
||||||||||
2015
|
|
2014
|
|
2013
|
|||||||
Cash dividends paid to SWM stockholders
|
$
|
(46.9
|
)
|
|
$
|
(44.5
|
)
|
|
$
|
(39.5
|
)
|
Net proceeds from borrowings
|
149.1
|
|
|
57.3
|
|
|
227.5
|
|
|||
Payments for debt issuance costs
|
(7.4
|
)
|
|
—
|
|
|
—
|
|
|||
Purchases of common stock
|
(2.9
|
)
|
|
(52.5
|
)
|
|
(1.7
|
)
|
|||
Proceeds from exercises of stock options
|
—
|
|
|
—
|
|
|
0.5
|
|
|||
Excess tax benefits of stock-based awards
|
0.5
|
|
|
0.6
|
|
|
0.5
|
|
|||
Cash (Used in) Provided by Financing
|
$
|
92.4
|
|
|
$
|
(39.1
|
)
|
|
$
|
187.3
|
|
Debt Instruments and Related Covenants
($ in millions)
|
For the Years Ended December 31,
|
||||||||||
2015
|
|
2014
|
|
2013
|
|||||||
Changes in short-term debt
|
$
|
(0.4
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
—
|
|
Proceeds from issuances of long-term debt
|
488.2
|
|
|
228.3
|
|
|
455.6
|
|
|||
Payments on long-term debt
|
(338.7
|
)
|
|
(170.6
|
)
|
|
(228.1
|
)
|
|||
Net (payments on) proceeds from borrowings
|
$
|
149.1
|
|
|
$
|
57.3
|
|
|
$
|
227.5
|
|
|
Payments due for the years ended
|
||||||||||||||||||||||||||
Contractual Obligations
|
Total
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
||||||||||||||
Current debt
(1)
|
$
|
5.0
|
|
|
$
|
5.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term debt
(2)
|
575.2
|
|
|
—
|
|
|
4.9
|
|
|
5.4
|
|
|
5.1
|
|
|
322.9
|
|
|
236.9
|
|
|||||||
Debt interest
(3)
|
89.2
|
|
|
14.0
|
|
|
13.9
|
|
|
13.8
|
|
|
13.0
|
|
|
12.7
|
|
|
21.8
|
|
|||||||
Restructuring obligations
(4)
|
7.7
|
|
|
5.9
|
|
|
0.6
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Minimum operating lease
payments
(5)
|
29.4
|
|
|
4.5
|
|
|
3.6
|
|
|
2.7
|
|
|
2.7
|
|
|
2.7
|
|
|
13.2
|
|
|||||||
Purchase obligations - raw
materials
(6)
|
26.9
|
|
|
14.6
|
|
|
2.3
|
|
|
1.7
|
|
|
1.7
|
|
|
1.7
|
|
|
4.9
|
|
|||||||
Purchase obligations - energy
(7)
|
79.4
|
|
|
25.9
|
|
|
17.8
|
|
|
9.4
|
|
|
7.7
|
|
|
5.5
|
|
|
13.1
|
|
|||||||
Other long-term liabilities
(8) (9) (10) (11)
|
3.2
|
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
$
|
816.0
|
|
|
$
|
73.1
|
|
|
$
|
43.1
|
|
|
$
|
34.2
|
|
|
$
|
30.2
|
|
|
$
|
345.5
|
|
|
$
|
289.9
|
|
(1)
|
Current debt includes borrowings against bank overdraft facilities; see Note
12
, Debt, of the Notes to Consolidated Financial Statements.
|
(2)
|
See additional information regarding long-term debt in Note
12
, Debt, of the Notes to Consolidated Financial Statements.
|
(3)
|
The amounts reflected in debt interest are based upon the short-term and long-term scheduled principal maturities and interest rates in effect as of December 31, 2015. Where specific maturities are not stated, such as for an overdraft line-of-credit, a repayment date coinciding with the end of the year was used for purposes of these calculations. Since our debt is largely variable interest rate debt, applicable market interest rates were assumed to be the same as at December 31, 2015 for purposes of these calculations. With respect to our variable-rate debt outstanding at December 31, 2015, a 100 basis point increase in interest rates would increase our debt interest obligation by $5.8 million in 2016. For more information regarding our outstanding debt and associated interest rates, see Note
12
, Debt, of the Notes to Consolidated Financial Statements.
|
(4)
|
Restructuring obligations are more fully discussed in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, Recent Developments and Note
11
, Restructuring and Impairment Activities, of the Notes to Consolidated Financial Statements.
|
(5)
|
Minimum operating lease payments relate to our future minimum obligations under non-cancelable operating leases having an initial or remaining term in excess of one year as of December 31, 2015.
|
(6)
|
Purchase obligations for raw materials include our calcium carbonate purchase agreement at our mill in Quimperlé, France, in which a vendor operates an on-site calcium carbonate plant and our mill has minimum purchase quantities. See Note
18
, Commitments and Contingencies, of the Notes to Consolidated Financial Statements for additional information.
|
(7)
|
Purchase obligations for energy include obligations under agreements with (1) an energy cogeneration supplier at our mills in Quimperlé, France and Spay, France, to supply steam for which our mills have minimum purchase commitments, (2) a natural gas supplier to supply and distribute 100% of the natural gas needs of our Quimperlé, France mill and (3) an energy supplier to supply a constant supply of electricity for our Pirahy mill in Brazil. See Note
18
, Commitments and Contingencies, of the Notes to Consolidated Financial Statements for additional information.
|
(8)
|
Other long-term liabilities exclude
$0.9 million
of unrecognized tax benefits associated with uncertain tax positions for which there is no contractual obligation. We had no other long-term liabilities as defined for purposes of this disclosure by the SEC as of December 31, 2015.
|
(9)
|
Other long-term liabilities do not include any amounts for our pension obligations. The pension obligations are funded by our separate pension trusts, which held
$125.1 million
in assets at December 31, 2015. The combined projected benefit obligation ("PBO") of our U.S. and French pension plans was underfunded by
$30.5 million
and
$30.6 million
as of December 31, 2015 and 2014, respectively. We make contributions to our pension trusts based on many factors including regulatory guidelines, investment returns of the trusts and availability of cash for pension contributions versus other priorities. We were not required to make contributions to our U.S. and French pension plans during 2015. We expect 2016 funding to be in compliance with the Pension Protection Act of 2006. For information regarding our long-term pension obligations and trust assets, see Note
16
, Postretirement and Other Benefits, of the Notes to Consolidated Financial Statements.
|
(10)
|
Other long-term liabilities do not include any amounts for our postretirement healthcare and life insurance benefits. Such payments are dependent upon our retirees incurring costs and filing claims; therefore, future payments are uncertain. Our net payments under these plans were approximately
$0.6 million
and
$0.4 million
in the years ended December 31, 2015 and 2014, respectively. Based on this past experience, we currently expect our share of the net payments to be less than $1.0 million during 2016 for these benefits. For more information regarding our retiree healthcare and life insurance benefit obligations, see Note
16
, Postretirement and Other Benefits, of the Notes to Consolidated Financial Statements.
|
(11)
|
Other long-term liabilities relate to contractual commitments for capital projects, primarily construction of a new DelStar facility in China.
|
•
|
Changes in sales or production volumes, pricing or manufacturing costs of reconstituted tobacco products, cigarette paper (including for lower ignition propensity cigarettes), filtration-related products due to changing customer demands, new technologies such as e-cigarettes, inventory adjustments and rebalancings, competition or otherwise;
|
•
|
Loss of one or more significant customers, or changes in their cigarette blending approaches;
|
•
|
New reports as to the effect of smoking on human health or the environment;
|
•
|
Risks associated with the implementation of our strategic growth initiatives, including diversification, and the Company's understanding of, and entry into, new industries and technologies;
|
•
|
Changes in the source and intensity of competition in our market segments, including risk from lower cost virgin tobacco leaf or other, cheaper, cigarette filters;
|
•
|
Our ability to attract and retain key personnel, due to our prior restructuring actions, the tobacco industry in which we operate or otherwise;
|
•
|
Weather conditions, including potential impacts, if any, from climate change, known and unknown, seasonality factors that affect the demand and price for virgin tobacco leaf and natural disasters or unusual weather events;
|
•
|
Increases in commodity prices and lack of availability of such commodities, including energy, wood pulp and resins, could impact the profitability of our products;
|
•
|
Increases in operating costs due to inflation or otherwise, such as labor expense, compensation and benefits costs, including costs related to the comprehensive health care reform law enacted in the U.S. in 2010;
|
•
|
Employee retention and labor shortages;
|
•
|
Changes in employment, wage and hour laws and regulations in the U.S., France and elsewhere, including loi de Securisation de l'emploi, unionization rules and regulations by the National Labor relations Board, equal pay initiatives, additional anti-discrimination rules or tests and different interpretations of exemptions from overtime laws;
|
•
|
Labor disruptions, strikes, stoppages, or other disruptions at our facilities;
|
•
|
Existing and future governmental regulation and the enforcement thereof, including regulation relating to the tobacco industry, taxation and the environment;
|
•
|
Changes in general economic, financial and credit conditions in the U.S., Europe and elsewhere, including the impact thereof on currency (including any weakening of the euro and Real) and on interest rates;
|
•
|
Changes in the manner in which we finance our debt and future capital needs, including potential acquisitions;
|
•
|
The success of, and costs associated with, our current or future restructuring initiatives, including the granting of any needed governmental approvals and the occurrence of work stoppages or other labor disruptions;
|
•
|
Changes in the discount rates, revenue growth, cash flow growth rates or other assumptions used by the Company in its assessment for impairment of assets and adverse economic conditions or other factors that would result in significant impairment charges;
|
•
|
The failure of one or more material suppliers, including energy, resin and pulp suppliers, to supply materials as needed to maintain our product plans and cost structure;
|
•
|
International conflicts and disputes (for example, relating to Russia and to the Ukraine), including their impact on our sales and the adoption of new LIP regulations;
|
•
|
The pace and extent of further international adoption of LIP cigarette standards and the nature of standards so adopted;
|
•
|
Risks associated with our 50%-owned, non-U.S. joint ventures relating to control and decision-making, compliance, transparency and customer relations, among others;
|
•
|
A failure in our risk management and/or currency or interest rate swaps and hedging programs, including the failures of any insurance company or counterparty;
|
•
|
The number, type, outcomes (by judgment or settlement) and costs of legal, tax, regulatory or administrative proceedings, litigation and/or amnesty programs, including those in Brazil;
|
•
|
The outcome and cost of LIP intellectual property litigation and European Patent Office opposition proceedings and the risk of eventual loss of our technological advantages including expiration of patents and ongoing protection of our proprietary trade secrets, or emergence of new disruptive technologies;
|
•
|
Risks associated with acquisitions or other strategic transactions, including acquired liabilities and restrictions, retaining customers from businesses acquired, achieving any expected results or synergies from acquired businesses, complying with new regulatory frameworks, difficulties in integrating acquired businesses or implementing strategic transactions generally and risks associated with international acquisition transactions, including in countries where we do not currently have a material presence;
|
•
|
Risks associated with dispositions, including post-closing claims being made against us, disruption to our other businesses during a sale process or thereafter, credit risks associated with any buyer of such disposed assets and our ability to collect funds due from any such buyer;
|
•
|
Risks associated with our global asset realignment initiatives, including: changes in law, treaties, interpretations or regulatory determinations; audits made by applicable regulatory authorities and our auditor; and our ability to operate our business in a manner consistent with the regulatory requirements for such realignment;
|
•
|
Increased taxation on tobacco-related products;
|
•
|
Costs and timing of implementation of any upgrades to our information technology systems;
|
•
|
Failure by us to comply with any privacy or data security laws or to protect against theft of customer, employee and corporate sensitive information; and
|
•
|
Other factors described elsewhere in this document and from time to time in documents that we file with the SEC.
|
|
Page
|
Consolidated Financial Statements
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net Sales
|
$
|
764.1
|
|
|
$
|
794.3
|
|
|
$
|
772.8
|
|
Cost of products sold
|
539.7
|
|
|
575.5
|
|
|
520.1
|
|
|||
Gross Profit
|
224.4
|
|
|
218.8
|
|
|
252.7
|
|
|||
|
|
|
|
|
|
||||||
Selling expense
|
22.2
|
|
|
22.0
|
|
|
20.9
|
|
|||
Research expense
|
14.0
|
|
|
15.7
|
|
|
15.3
|
|
|||
General expense
|
70.6
|
|
|
61.9
|
|
|
50.3
|
|
|||
Total nonmanufacturing expenses
|
106.8
|
|
|
99.6
|
|
|
86.5
|
|
|||
|
|
|
|
|
|
||||||
Restructuring and impairment expense
|
14.6
|
|
|
13.1
|
|
|
41.3
|
|
|||
Operating Profit
|
103.0
|
|
|
106.1
|
|
|
124.9
|
|
|||
Interest expense
|
9.7
|
|
|
7.2
|
|
|
2.9
|
|
|||
Other income, net
|
12.2
|
|
|
9.3
|
|
|
5.7
|
|
|||
Income from Continuing Operations before Income Taxes and Income from Equity Affiliates
|
105.5
|
|
|
108.2
|
|
|
127.7
|
|
|||
|
|
|
|
|
|
||||||
Provision for income taxes
|
21.6
|
|
|
20.5
|
|
|
53.0
|
|
|||
Income from equity affiliates, net of income taxes
|
6.6
|
|
|
2.0
|
|
|
3.8
|
|
|||
Income from Continuing Operations
|
90.5
|
|
|
89.7
|
|
|
78.5
|
|
|||
Loss from Discontinued Operations
|
(0.8
|
)
|
|
—
|
|
|
(2.4
|
)
|
|||
Net Income
|
$
|
89.7
|
|
|
$
|
89.7
|
|
|
$
|
76.1
|
|
|
|
|
|
|
|
||||||
Net Income (Loss) per Share - Basic:
|
|
|
|
|
|
||||||
Income per share from continuing operations
|
$
|
2.97
|
|
|
$
|
2.94
|
|
|
$
|
2.51
|
|
Loss per share from discontinued operations
|
(0.02
|
)
|
|
—
|
|
|
(0.08
|
)
|
|||
Net income per share – basic
|
$
|
2.95
|
|
|
$
|
2.94
|
|
|
$
|
2.43
|
|
|
|
|
|
|
|
||||||
Net Income (Loss) per Share – Diluted:
|
|
|
|
|
|
|
|
||||
Income per share from continuing operations
|
$
|
2.96
|
|
|
$
|
2.93
|
|
|
$
|
2.49
|
|
Loss per share from discontinued operations
|
(0.02
|
)
|
|
—
|
|
|
(0.07
|
)
|
|||
Net income per share – diluted
|
$
|
2.94
|
|
|
$
|
2.93
|
|
|
$
|
2.42
|
|
|
|
|
|
|
|
||||||
Weighted Average Shares Outstanding:
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Basic
|
30,251,400
|
|
|
30,238,000
|
|
|
31,056,700
|
|
|||
|
|
|
|
|
|
||||||
Diluted
|
30,374,300
|
|
|
30,356,500
|
|
|
31,238,300
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net Income
|
$
|
89.7
|
|
|
$
|
89.7
|
|
|
$
|
76.1
|
|
Other Comprehensive Income (Loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(54.4
|
)
|
|
(63.0
|
)
|
|
5.1
|
|
|||
Less: Reclassification adjustment for realized translation adjustments
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|||
|
|
|
|
|
|
||||||
Unrealized (losses) gains on derivative instruments
|
(24.9
|
)
|
|
(4.8
|
)
|
|
(7.1
|
)
|
|||
Less: Reclassification adjustment for losses (gains) on derivative instruments included in net income
|
11.6
|
|
|
4.6
|
|
|
0.4
|
|
|||
|
|
|
|
|
|
||||||
Net gain (loss) from postretirement benefit plans
|
(0.8
|
)
|
|
(9.8
|
)
|
|
8.4
|
|
|||
Less: Amortization of postretirement benefit plans' costs included in net periodic benefit cost
|
3.6
|
|
|
1.5
|
|
|
4.7
|
|
|||
Other Comprehensive Income (Loss)
|
(64.9
|
)
|
|
(71.5
|
)
|
|
10.4
|
|
|||
Comprehensive Income
|
$
|
24.8
|
|
|
$
|
18.2
|
|
|
$
|
86.5
|
|
|
December 31,
2015 |
|
December 31,
2014 |
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
186.5
|
|
|
$
|
290.3
|
|
Accounts receivable, net
|
119.4
|
|
|
93.9
|
|
||
Inventories
|
112.4
|
|
|
108.4
|
|
||
Income taxes receivable
|
—
|
|
|
11.5
|
|
||
Current deferred income tax benefits
|
—
|
|
|
9.2
|
|
||
Assets held for sale
|
21.9
|
|
|
—
|
|
||
Other current assets
|
4.6
|
|
|
6.1
|
|
||
Total Current Assets
|
444.8
|
|
|
519.4
|
|
||
|
|
|
|
||||
Property, Plant and Equipment, net
|
308.1
|
|
|
362.0
|
|
||
Deferred income tax benefits
|
0.1
|
|
|
—
|
|
||
Investment in Equity Affiliates
|
67.5
|
|
|
67.8
|
|
||
Goodwill
|
233.3
|
|
|
126.1
|
|
||
Intangible Assets
|
213.9
|
|
|
89.3
|
|
||
Other Assets
|
22.3
|
|
|
20.4
|
|
||
Total Assets
|
$
|
1,290.0
|
|
|
$
|
1,185.0
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
||
Current debt
|
$
|
3.3
|
|
|
$
|
2.3
|
|
Accounts payable
|
49.0
|
|
|
44.8
|
|
||
Income taxes payable
|
5.3
|
|
|
—
|
|
||
Accrued expenses
|
85.5
|
|
|
76.4
|
|
||
Total Current Liabilities
|
143.1
|
|
|
123.5
|
|
||
|
|
|
|
||||
Long-Term Debt
|
568.2
|
|
|
435.6
|
|
||
Pension and Other Postretirement Benefits
|
33.5
|
|
|
34.1
|
|
||
Deferred Income Tax Liabilities
|
45.3
|
|
|
71.4
|
|
||
Other Liabilities
|
32.0
|
|
|
31.4
|
|
||
Total Liabilities
|
822.1
|
|
|
696.0
|
|
||
Stockholders' Equity:
|
|
|
|
|
|
||
Preferred stock, $0.10 par value per share; 10,000,000 shares authorized; none issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.10 par value per share; 100,000,000 shares authorized; 30,474,149 and 30,465,522 shares issued and outstanding at December 31, 2015 and 2014, respectively
|
3.0
|
|
|
3.0
|
|
||
Additional paid-in-capital
|
53.7
|
|
|
49.8
|
|
||
Retained earnings
|
552.6
|
|
|
512.7
|
|
||
Accumulated other comprehensive loss
|
(141.4
|
)
|
|
(76.5
|
)
|
||
Total Stockholders' Equity
|
467.9
|
|
|
489.0
|
|
||
Total Liabilities and Stockholders' Equity
|
$
|
1,290.0
|
|
|
$
|
1,185.0
|
|
|
Common Stock Issued
|
|
|
|
Treasury Stock
|
|
|
|
|
|
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Additional
Paid-In
Capital
|
|
Shares
|
|
Amount
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
|
Total
|
||||||||||||||
Balance, December 31, 2012
|
31,209,866
|
|
|
$
|
3.1
|
|
|
$
|
41.0
|
|
|
8,760
|
|
|
$
|
(0.3
|
)
|
|
$
|
483.4
|
|
|
$
|
(15.4
|
)
|
|
$
|
511.8
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
76.1
|
|
|
|
|
76.1
|
|
||||||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
10.4
|
|
|
10.4
|
|
||||||||||||
Dividends declared ($1.26 per share)
|
|
|
|
|
|
|
|
|
|
|
(39.5
|
)
|
|
|
|
(39.5
|
)
|
||||||||||||
Restricted stock issuances, net
|
226,461
|
|
|
|
|
(0.2
|
)
|
|
(5,000
|
)
|
|
0.2
|
|
|
|
|
|
|
—
|
|
|||||||||
Stock-based employee compensation expense
|
|
|
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
3.2
|
|
||||||||||||
Excess tax benefits of stock-based employee compensation
|
|
|
|
|
0.5
|
|
|
|
|
|
|
|
|
|
|
0.5
|
|
||||||||||||
Stock issued to directors as compensation
|
1,318
|
|
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
0.1
|
|
|||||||||||
Issuance of shares for options exercised
|
33,000
|
|
|
|
|
0.5
|
|
|
|
|
|
|
|
|
|
|
0.5
|
|
|||||||||||
Share reissuance and cancellation to fulfill stock split
|
(47,218
|
)
|
|
—
|
|
|
(1.8
|
)
|
|
(47,218
|
)
|
|
1.8
|
|
|
|
|
|
|
—
|
|
||||||||
Purchases of treasury stock
|
|
|
|
|
|
|
43,458
|
|
|
(1.7
|
)
|
|
|
|
|
|
(1.7
|
)
|
|||||||||||
Balance, December 31, 2013
|
31,423,427
|
|
|
$
|
3.1
|
|
|
$
|
43.3
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
520.0
|
|
|
$
|
(5.0
|
)
|
|
$
|
561.4
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
89.7
|
|
|
|
|
89.7
|
|
||||||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
(71.5
|
)
|
|
(71.5
|
)
|
||||||||||||
Dividends declared ($1.46 per share)
|
|
|
|
|
|
|
|
|
|
|
(44.5
|
)
|
|
|
|
(44.5
|
)
|
||||||||||||
Restricted stock issuances, net
|
201,005
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||
Stock-based employee compensation expense
|
|
|
|
|
5.8
|
|
|
|
|
|
|
|
|
|
|
5.8
|
|
||||||||||||
Excess tax benefits of stock-based employee compensation
|
|
|
|
|
0.6
|
|
|
|
|
|
|
|
|
|
|
0.6
|
|
||||||||||||
Stock issued to directors as compensation
|
2,902
|
|
|
—
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
0.1
|
|
||||||||||
Purchases and cancellation of common stock
|
(1,161,812
|
)
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
(52.5
|
)
|
|
|
|
(52.6
|
)
|
||||||||||
Balance, December 31, 2014
|
30,465,522
|
|
|
$
|
3.0
|
|
|
$
|
49.8
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
512.7
|
|
|
$
|
(76.5
|
)
|
|
$
|
489.0
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
89.7
|
|
|
|
|
89.7
|
|
||||||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
(64.9
|
)
|
|
(64.9
|
)
|
||||||||||||
Dividends declared ($1.54 per share)
|
|
|
|
|
|
|
|
|
|
|
(46.9
|
)
|
|
|
|
(46.9
|
)
|
||||||||||||
Restricted stock issuances, net
|
68,264
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||
Stock-based employee compensation expense
|
|
|
|
|
3.3
|
|
|
|
|
|
|
|
|
|
|
3.3
|
|
||||||||||||
Excess tax benefits of stock-based employee compensation
|
|
|
|
|
0.5
|
|
|
|
|
|
|
|
|
|
|
0.5
|
|
||||||||||||
Stock issued to directors as compensation
|
3,728
|
|
|
—
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
0.1
|
|
||||||||||
Purchases and cancellation of common stock
|
(63,365
|
)
|
|
—
|
|
|
|
|
|
|
|
|
(2.9
|
)
|
|
|
|
(2.9
|
)
|
||||||||||
Balance, December 31, 2015
|
30,474,149
|
|
|
$
|
3.0
|
|
|
$
|
53.7
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
552.6
|
|
|
$
|
(141.4
|
)
|
|
$
|
467.9
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Operations
|
|
|
|
|
|
||||||
Net income
|
$
|
89.7
|
|
|
$
|
89.7
|
|
|
$
|
76.1
|
|
Less: Loss from discontinued operations
|
(0.8
|
)
|
|
—
|
|
|
(2.4
|
)
|
|||
Income from continuing operations
|
90.5
|
|
|
89.7
|
|
|
78.5
|
|
|||
Non-cash items included in net income:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
41.0
|
|
|
45.1
|
|
|
37.3
|
|
|||
Impairment
|
6.7
|
|
|
—
|
|
|
37.2
|
|
|||
Deferred income tax (benefit) provision
|
(6.7
|
)
|
|
3.3
|
|
|
17.3
|
|
|||
Pension and other postretirement benefits
|
4.2
|
|
|
1.2
|
|
|
1.1
|
|
|||
Stock-based compensation
|
3.5
|
|
|
5.9
|
|
|
3.2
|
|
|||
Income from equity affiliates
|
(6.6
|
)
|
|
(2.0
|
)
|
|
(3.8
|
)
|
|||
Gain on sale of intangible assets
|
(4.3
|
)
|
|
—
|
|
|
—
|
|
|||
Excess tax benefits of stock-based awards
|
(0.5
|
)
|
|
(0.6
|
)
|
|
(0.5
|
)
|
|||
Cash dividends received from equity affiliates
|
3.9
|
|
|
4.4
|
|
|
3.7
|
|
|||
Other items
|
0.1
|
|
|
0.8
|
|
|
1.0
|
|
|||
Changes in operating working capital:
|
|
|
|
|
|
||||||
Accounts receivable
|
(18.0
|
)
|
|
13.3
|
|
|
4.4
|
|
|||
Inventories
|
1.3
|
|
|
14.9
|
|
|
(1.0
|
)
|
|||
Prepaid expenses
|
1.1
|
|
|
(0.6
|
)
|
|
0.1
|
|
|||
Accounts payable
|
6.5
|
|
|
3.1
|
|
|
(1.5
|
)
|
|||
Accrued expenses
|
3.7
|
|
|
(8.0
|
)
|
|
3.4
|
|
|||
Accrued income taxes
|
18.2
|
|
|
(4.1
|
)
|
|
(4.6
|
)
|
|||
Net changes in operating working capital
|
12.8
|
|
|
18.6
|
|
|
0.8
|
|
|||
Net cash provided (used) by operating activities of:
|
|
|
|
|
|
||||||
- Continuing operations
|
144.6
|
|
|
166.4
|
|
|
175.8
|
|
|||
- Discontinued operations
|
0.1
|
|
|
(0.5
|
)
|
|
2.3
|
|
|||
Cash Provided by Operations
|
144.7
|
|
|
165.9
|
|
|
178.1
|
|
|||
Investing
|
|
|
|
|
|
||||||
Capital spending
|
(24.2
|
)
|
|
(35.1
|
)
|
|
(29.1
|
)
|
|||
Capitalized software costs
|
(0.9
|
)
|
|
(1.0
|
)
|
|
(0.5
|
)
|
|||
Acquisitions, net of cash acquired
|
(280.6
|
)
|
|
(32.6
|
)
|
|
(229.7
|
)
|
|||
Investment in equity affiliates
|
—
|
|
|
(8.8
|
)
|
|
—
|
|
|||
Other investing
|
(8.0
|
)
|
|
3.0
|
|
|
5.6
|
|
|||
Cash Used for Investing
|
(313.7
|
)
|
|
(74.5
|
)
|
|
(253.7
|
)
|
|||
Financing
|
|
|
|
|
|
||||||
Cash dividends paid to SWM stockholders
|
(46.9
|
)
|
|
(44.5
|
)
|
|
(39.5
|
)
|
|||
Changes in short-term debt
|
(0.4
|
)
|
|
(0.4
|
)
|
|
—
|
|
|||
Proceeds from issuances of long-term debt
|
488.2
|
|
|
228.3
|
|
|
455.6
|
|
|||
Payments on long-term debt
|
(338.7
|
)
|
|
(170.6
|
)
|
|
(228.1
|
)
|
|||
Payments for debt issuance costs
|
(7.4
|
)
|
|
—
|
|
|
—
|
|
|||
Purchases of common stock
|
(2.9
|
)
|
|
(52.5
|
)
|
|
(1.7
|
)
|
|||
Excess tax benefits of stock-based awards
|
0.5
|
|
|
0.6
|
|
|
0.5
|
|
|||
Proceeds from exercise of stock options
|
—
|
|
|
—
|
|
|
0.5
|
|
|||
Cash Provided by (Used in) Financing
|
92.4
|
|
|
(39.1
|
)
|
|
187.3
|
|
|||
Effect of Exchange Rate Changes on Cash and Cash Equivalents
|
(27.2
|
)
|
|
(34.0
|
)
|
|
9.1
|
|
|||
(Decrease) Increase in Cash and Cash Equivalents
|
(103.8
|
)
|
|
18.3
|
|
|
120.8
|
|
|||
Cash and Cash Equivalents at beginning of period
|
290.3
|
|
|
272.0
|
|
|
151.2
|
|
|||
Cash and Cash Equivalents at end of period
|
$
|
186.5
|
|
|
$
|
290.3
|
|
|
$
|
272.0
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Accumulated pension and OPEB liability adjustments, net of income tax impact of $21.9 million and $21.0 million at December 31, 2015 and 2014, respectively
|
$
|
(35.6
|
)
|
|
$
|
(38.4
|
)
|
Accumulated unrealized loss on derivative instruments, net of income tax impact of $0.3 million and $0 at December 31, 2015 and 2014, respectively
|
(21.6
|
)
|
|
(8.3
|
)
|
||
Accumulated unrealized foreign currency translation adjustments
|
(84.2
|
)
|
|
(29.8
|
)
|
||
Accumulated other comprehensive loss
|
$
|
(141.4
|
)
|
|
$
|
(76.5
|
)
|
|
For the Years Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||||||||||||||
|
Pre-tax
|
|
Tax
|
|
Net of
Tax
|
|
Pre-tax
|
|
Tax
|
|
Net of
Tax
|
|
Pre-tax
|
|
Tax
|
|
Net of
Tax
|
||||||||||||||||||
Pension and OPEB liability adjustments
|
$
|
1.9
|
|
|
$
|
0.9
|
|
|
$
|
2.8
|
|
|
$
|
(12.7
|
)
|
|
$
|
4.4
|
|
|
$
|
(8.3
|
)
|
|
$
|
19.8
|
|
|
$
|
(6.7
|
)
|
|
$
|
13.1
|
|
Unrealized loss on derivative instruments
|
(13.6
|
)
|
|
0.3
|
|
|
(13.3
|
)
|
|
(0.4
|
)
|
|
0.2
|
|
|
(0.2
|
)
|
|
(4.9
|
)
|
|
(1.8
|
)
|
|
(6.7
|
)
|
|||||||||
Unrealized foreign currency translation adjustments
|
(54.4
|
)
|
|
—
|
|
|
(54.4
|
)
|
|
(63.0
|
)
|
|
—
|
|
|
(63.0
|
)
|
|
4.0
|
|
|
—
|
|
|
4.0
|
|
|||||||||
Total
|
$
|
(66.1
|
)
|
|
$
|
1.2
|
|
|
$
|
(64.9
|
)
|
|
$
|
(76.1
|
)
|
|
$
|
4.6
|
|
|
$
|
(71.5
|
)
|
|
$
|
18.9
|
|
|
$
|
(8.5
|
)
|
|
$
|
10.4
|
|
|
Preliminary Fair Value as of October 28, 2015
|
||
Cash and cash equivalents
|
$
|
2.7
|
|
Accounts receivable
|
16.0
|
|
|
Inventory
|
16.3
|
|
|
Other current assets
|
0.1
|
|
|
Property, plant and equipment
|
15.9
|
|
|
Other noncurrent assets
|
0.1
|
|
|
Identifiable intangible assets
|
131.0
|
|
|
Total Assets
|
182.1
|
|
|
|
|
||
Accounts payable
|
4.6
|
|
|
Accrued expenses
|
4.3
|
|
|
|
|
||
Net assets acquired
|
173.2
|
|
|
|
|
||
Goodwill
|
109.5
|
|
|
|
|
||
Cash paid
|
$
|
282.7
|
|
|
Preliminary Fair Value as of October 28, 2015
|
|
Weighted-Average Amortization Period (Years)
|
||
Amortizable intangible assets:
|
|
|
|
||
Customer relationships
|
115.3
|
|
|
15
|
|
Non-competition agreements
|
1.7
|
|
|
4
|
|
Indefinite-lived intangible assets:
|
|
|
|
||
Trade names
|
14.0
|
|
|
Indefinite
|
|
Total
|
$
|
131.0
|
|
|
15
|
|
|
Net Sales
|
|
Income from Continuing Operations
|
||||
Actual from October 28, 2015 - December 31, 2015
|
|
$
|
22.3
|
|
|
$
|
0.9
|
|
|
|
|
|
|
||||
2015 Supplemental Pro Forma from January 1, 2015 - December 31, 2015
|
|
859.7
|
|
|
90.2
|
|
||
|
|
|
|
|
||||
2014 Supplemental Pro Forma from January 1, 2014 - December 31, 2014
|
|
896.2
|
|
|
90.7
|
|
|
Fair Value as Acquisition Date
|
||
Accounts receivable
|
$
|
3.5
|
|
Inventory
|
3.2
|
|
|
Other current assets
|
0.2
|
|
|
Property, plant and equipment
|
9.3
|
|
|
Identifiable intangible assets
|
11.6
|
|
|
Total Assets
|
27.8
|
|
|
|
|
||
Accounts payable
|
1.4
|
|
|
Accrued expenses
|
1.4
|
|
|
|
|
||
Net assets acquired
|
25.0
|
|
|
|
|
||
Goodwill
|
5.6
|
|
|
|
|
||
Cash paid
|
$
|
30.6
|
|
|
Fair Value as of December 31, 2014
|
|
Weighted-Average Amortization Period (Years)
|
||
Amortizable intangible assets:
|
|
|
|
||
Customer relationships
|
$
|
7.1
|
|
|
14
|
Developed Technology
|
2.1
|
|
|
20
|
|
Patents
|
1.5
|
|
|
17
|
|
Customer contracts
|
0.9
|
|
|
2
|
|
Total
|
$
|
11.6
|
|
|
15
|
|
|
Net Sales
|
|
(Loss) Income from Continuing Operations
|
||
Actual from December 19, 2014 - December 31, 2014
|
|
0.2
|
|
|
(0.4
|
)
|
|
|
|
|
|
||
2014 Supplemental Pro Forma from January 1, 2014 - December 31, 2014
|
|
823.6
|
|
|
92.4
|
|
|
|
|
|
|
||
2013 Supplemental Pro Forma from January 1, 2013 - December 31, 2013
|
|
904.3
|
|
|
86.4
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
Assets of discontinued operations:
|
|
|
|
||||
Current assets
|
$
|
1.1
|
|
|
$
|
1.6
|
|
Other assets
|
2.6
|
|
|
2.3
|
|
||
|
|
|
|
||||
Liabilities of discontinued operations:
|
|
|
|
|
|
||
Current liabilities
|
0.2
|
|
|
0.1
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7.1
|
|
Restructuring and impairment expense
|
—
|
|
|
—
|
|
|
1.4
|
|
|||
Other income (expense)
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|||
Loss from discontinued operations before income taxes
|
(0.7
|
)
|
|
—
|
|
|
(2.6
|
)
|
|||
Income tax (provision) benefit
|
(0.1
|
)
|
|
—
|
|
|
0.2
|
|
|||
Loss from discontinued operations
|
(0.8
|
)
|
|
—
|
|
|
(2.4
|
)
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Trade receivables
|
$
|
97.7
|
|
|
$
|
69.8
|
|
Business tax credits, including VAT
|
3.7
|
|
|
4.2
|
|
||
Hedge contracts receivable
|
0.8
|
|
|
0.4
|
|
||
Other receivables
|
17.6
|
|
|
19.8
|
|
||
Less allowance for doubtful accounts and sales discounts
|
(0.4
|
)
|
|
(0.3
|
)
|
||
Total accounts receivable
|
$
|
119.4
|
|
|
$
|
93.9
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Land and improvements
|
$
|
11.5
|
|
|
$
|
19.3
|
|
Buildings and improvements (20 to 40 years or remaining life of relevant lease)
|
117.5
|
|
|
131.3
|
|
||
Machinery and equipment (5 to 20 years)
|
513.0
|
|
|
540.6
|
|
||
Construction in progress
|
20.8
|
|
|
42.1
|
|
||
Gross Property, Plant and Equipment
|
662.8
|
|
|
733.3
|
|
||
Less: Accumulated Depreciation
|
354.7
|
|
|
371.3
|
|
||
Property, Plant and Equipment, net
|
$
|
308.1
|
|
|
$
|
362.0
|
|
|
Engineered Papers
|
|
Advanced Materials & Structures
|
|
Total
|
||||||
Goodwill as of December 31, 2013
|
$
|
6.0
|
|
|
$
|
115.1
|
|
|
$
|
121.1
|
|
Goodwill acquired during the year
|
—
|
|
|
5.6
|
|
|
5.6
|
|
|||
Foreign currency translation adjustments
|
(0.7
|
)
|
|
0.1
|
|
|
(0.6
|
)
|
|||
Goodwill as of December 31, 2014
|
5.3
|
|
|
120.8
|
|
|
126.1
|
|
|||
Goodwill acquired during the year
|
—
|
|
|
109.5
|
|
|
109.5
|
|
|||
Foreign currency translation adjustments
|
(0.5
|
)
|
|
(1.8
|
)
|
|
(2.3
|
)
|
|||
Goodwill as of December 31, 2015
|
$
|
4.8
|
|
|
$
|
228.5
|
|
|
$
|
233.3
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization*
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization*
|
|
Net
Carrying
Amount
|
||||||||||||
Amortized intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Engineered Papers
|
|||||||||||||||||||||||
Customer-related intangibles
|
$
|
10.0
|
|
|
$
|
10.0
|
|
|
$
|
—
|
|
|
$
|
10.0
|
|
|
$
|
10.0
|
|
|
$
|
—
|
|
Advanced Materials & Structures
|
|||||||||||||||||||||||
Customer Relationships
|
167.7
|
|
|
6.4
|
|
|
161.3
|
|
|
52.4
|
|
|
2.1
|
|
|
50.3
|
|
||||||
Developed Technology
|
16.0
|
|
|
2.4
|
|
|
13.6
|
|
|
16.0
|
|
|
1.2
|
|
|
14.8
|
|
||||||
Customer Contracts
|
0.9
|
|
|
0.5
|
|
|
0.4
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
||||||
Non-Compete Agreements
|
1.7
|
|
|
0.1
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Patents
|
1.5
|
|
|
0.1
|
|
|
1.4
|
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
||||||
Total
|
$
|
197.8
|
|
|
$
|
19.5
|
|
|
$
|
178.3
|
|
|
$
|
80.8
|
|
|
$
|
13.3
|
|
|
$
|
67.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unamortized intangible assets (Advanced Materials & Structures)
|
|
|
|
|
|||||||||||||||||||
Trade names
|
$
|
35.6
|
|
|
|
|
|
|
$
|
21.8
|
|
|
|
|
|
For the year ended December 31,
|
Estimated Amortization Expense
|
||
2016
|
$
|
12.3
|
|
2017
|
11.9
|
|
|
2018
|
11.9
|
|
|
2019
|
11.8
|
|
|
2020
|
11.5
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Capitalized software costs, net of accumulated amortization
|
$
|
2.5
|
|
|
$
|
3.8
|
|
Business tax credits, including VAT and ICMS (net of $9.9 million and $11.7 million reserve as of December 31, 2015 and 2014, respectively)
|
2.6
|
|
|
2.5
|
|
||
Grantor trust assets
|
9.6
|
|
|
10.3
|
|
||
Other assets
|
7.6
|
|
|
3.8
|
|
||
Total
|
$
|
22.3
|
|
|
$
|
20.4
|
|
|
2015
|
|
2014
|
||||
Balance at beginning of year
|
$
|
8.7
|
|
|
$
|
4.7
|
|
Accruals for announced programs
|
8.0
|
|
|
11.2
|
|
||
Cash payments
|
(8.3
|
)
|
|
(6.3
|
)
|
||
Exchange rate impacts
|
(0.7
|
)
|
|
(0.9
|
)
|
||
Balance at end of period
|
$
|
7.7
|
|
|
$
|
8.7
|
|
|
December 31,
2015 |
|
December 31,
2014 |
||||
Term Loan A-1
|
$
|
60.0
|
|
|
$
|
—
|
|
Term Loan A-2
|
249.4
|
|
|
—
|
|
||
Revolving Credit Agreement - U.S. dollar borrowings
|
197.0
|
|
|
354.0
|
|
||
Revolving Credit Agreement - euro borrowings
|
62.4
|
|
|
71.1
|
|
||
French Employee Profit Sharing
|
11.4
|
|
|
14.6
|
|
||
Bank Overdrafts
|
—
|
|
|
0.4
|
|
||
Total Debt
|
580.2
|
|
|
440.1
|
|
||
Less: Debt issuance costs
|
(8.7
|
)
|
|
(2.2
|
)
|
||
Less: Current debt
|
(3.3
|
)
|
|
(2.3
|
)
|
||
Long-Term Debt
|
$
|
568.2
|
|
|
$
|
435.6
|
|
2016
|
$
|
5.0
|
|
2017
|
4.9
|
|
|
2018
|
5.4
|
|
|
2019
|
5.1
|
|
|
2020
|
322.9
|
|
|
Thereafter
|
236.9
|
|
|
Total
|
$
|
580.2
|
|
2016
|
$
|
1.7
|
|
2017
|
1.7
|
|
|
2018
|
1.7
|
|
|
2019
|
1.7
|
|
|
2020
|
1.4
|
|
|
Thereafter
|
0.5
|
|
|
Total
|
$
|
8.7
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
||||
Derivatives designated as hedges:
|
|
|
|
|
|
|
|
||||
Foreign exchange contracts
|
Accounts Receivable
|
|
$
|
0.7
|
|
|
Accrued Expenses
|
|
$
|
10.8
|
|
Foreign exchange contracts
|
Other Assets
|
|
—
|
|
|
Other Liabilities
|
|
7.0
|
|
||
Interest rate contracts
|
Other Assets
|
|
—
|
|
|
Other Liabilities
|
|
0.6
|
|
||
Total derivatives designated as hedges
|
|
|
$
|
0.7
|
|
|
|
|
$
|
18.4
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
||||
Derivatives designated as hedges:
|
|
|
|
|
|
|
|
||||
Foreign exchange contracts
|
Accounts Receivable
|
|
$
|
0.4
|
|
|
Accrued Expenses
|
|
$
|
4.8
|
|
Foreign exchange contracts
|
Other Assets
|
|
—
|
|
|
Other Liabilities
|
|
4.0
|
|
||
Interest rate contracts
|
Other Assets
|
|
—
|
|
|
Other Liabilities
|
|
0.5
|
|
||
Total derivatives designated as hedges
|
|
|
$
|
0.4
|
|
|
|
|
$
|
9.3
|
|
Derivatives Designated as Cash Flow Hedging Relationships
|
Unrealized (Loss) Gain Recognized in AOCI on Derivatives, Net of Tax for the Year Ended December 31,
|
|
Location of Reclassification
|
(Loss) Gain Reclassified
from AOCI, Net of Tax
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
Foreign exchange contracts
|
$
|
(24.4
|
)
|
|
$
|
(4.1
|
)
|
|
$
|
(7.4
|
)
|
|
Net Sales
|
$
|
(11.1
|
)
|
|
$
|
(4.6
|
)
|
|
$
|
(0.4
|
)
|
Interest rate contracts
|
(0.5
|
)
|
|
(0.7
|
)
|
|
0.3
|
|
|
Interest Expense
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
(24.9
|
)
|
|
$
|
(4.8
|
)
|
|
$
|
(7.1
|
)
|
|
Total
|
$
|
(11.6
|
)
|
|
$
|
(4.6
|
)
|
|
$
|
(0.4
|
)
|
Derivatives Not Designated as Cash Flow Hedging Instruments
|
Amount of Gain / (Loss) Recognized in Other Income / Expense
|
|||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Interest rate contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange contracts
|
|
(1.5
|
)
|
|
(0.7
|
)
|
|
(0.1
|
)
|
|||
Total
|
|
$
|
(1.5
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(0.1
|
)
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Accrued salaries, wages and employee benefits
|
$
|
38.3
|
|
|
$
|
26.9
|
|
Other accrued expenses
|
47.2
|
|
|
49.5
|
|
||
Total
|
$
|
85.5
|
|
|
$
|
76.4
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
$
|
41.6
|
|
|
$
|
31.0
|
|
|
$
|
57.7
|
|
Foreign
|
63.9
|
|
|
77.2
|
|
|
70.0
|
|
|||
Total
|
$
|
105.5
|
|
|
$
|
108.2
|
|
|
$
|
127.7
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Current income taxes:
|
|
|
|
|
|
||||||
U.S. Federal
|
$
|
13.0
|
|
|
$
|
6.6
|
|
|
$
|
13.6
|
|
U.S. State
|
1.1
|
|
|
0.6
|
|
|
0.9
|
|
|||
Foreign
|
14.2
|
|
|
10.0
|
|
|
21.2
|
|
|||
|
28.3
|
|
|
17.2
|
|
|
35.7
|
|
|||
Deferred income taxes:
|
|
|
|
|
|
||||||
U.S. Federal
|
(5.8
|
)
|
|
3.0
|
|
|
(0.2
|
)
|
|||
U.S. State
|
0.1
|
|
|
(0.8
|
)
|
|
—
|
|
|||
Foreign
|
(1.0
|
)
|
|
1.1
|
|
|
17.5
|
|
|||
|
(6.7
|
)
|
|
3.3
|
|
|
17.3
|
|
|||
Total
|
$
|
21.6
|
|
|
$
|
20.5
|
|
|
$
|
53.0
|
|
|
For the Years Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|||||||||
Tax provision at U.S. statutory rate
|
$
|
36.9
|
|
|
35.0
|
%
|
|
$
|
37.9
|
|
|
35.0
|
%
|
|
$
|
44.7
|
|
|
35.0
|
%
|
Foreign income tax rate differential
|
(16.2
|
)
|
|
(15.4
|
)
|
|
(15.4
|
)
|
|
(14.2
|
)
|
|
9.0
|
|
|
7.0
|
|
|||
Domestic production deduction
|
(1.5
|
)
|
|
(1.4
|
)
|
|
(1.0
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|||
Adjustments to valuation allowances
|
1.4
|
|
|
1.3
|
|
|
0.4
|
|
|
0.4
|
|
|
1.2
|
|
|
0.9
|
|
|||
Other, net
|
1.0
|
|
|
1.0
|
|
|
(1.4
|
)
|
|
(1.4
|
)
|
|
(1.9
|
)
|
|
(1.4
|
)
|
|||
Provision for income taxes
|
$
|
21.6
|
|
|
20.5
|
%
|
|
$
|
20.5
|
|
|
18.9
|
%
|
|
$
|
53.0
|
|
|
41.5
|
%
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Deferred Tax Assets
|
|
|
|
||||
Receivable allowances
|
$
|
3.4
|
|
|
$
|
4.4
|
|
Reserves and accruals
|
3.9
|
|
|
4.5
|
|
||
Inventory and other assets
|
1.7
|
|
|
0.6
|
|
||
Postretirement and other employee benefits
|
20.6
|
|
|
19.6
|
|
||
Derivatives
|
5.5
|
|
|
2.2
|
|
||
Net operating loss and tax credit carryforwards
|
25.9
|
|
|
26.6
|
|
||
Investment in subsidiaries
|
1.0
|
|
|
—
|
|
||
Other
|
0.8
|
|
|
—
|
|
||
|
$
|
62.8
|
|
|
$
|
57.9
|
|
Less: Valuation allowance
|
(33.8
|
)
|
|
(37.2
|
)
|
||
Net deferred income tax assets
|
$
|
29.0
|
|
|
$
|
20.7
|
|
|
|
|
|
||||
Deferred Tax Liabilities
|
|
|
|
||||
Net fixed assets and intangibles
|
$
|
(72.7
|
)
|
|
$
|
(81.6
|
)
|
Other
|
(1.5
|
)
|
|
(1.3
|
)
|
||
Net deferred income tax liabilities
|
$
|
(74.2
|
)
|
|
$
|
(82.9
|
)
|
|
|
|
|
||||
Total net deferred income tax liabilities
|
$
|
(45.2
|
)
|
|
$
|
(62.2
|
)
|
|
2015
|
|
2014
|
||||
2016-2018
|
$
|
1.7
|
|
|
$
|
5.5
|
|
2022-2033
|
0.4
|
|
|
0.7
|
|
||
2016-2034
|
9.7
|
|
|
12.2
|
|
||
Indefinite
|
4.9
|
|
|
8.2
|
|
||
|
16.7
|
|
|
26.6
|
|
|
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Uncertain tax position balance at beginning of year
|
$
|
1.8
|
|
|
$
|
1.8
|
|
|
$
|
1.8
|
|
Increases related to current year tax positions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Decrease related to expiration of statute of limitations
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|||
Uncertain tax position balance at end of year
|
$
|
0.9
|
|
|
$
|
1.8
|
|
|
$
|
1.8
|
|
|
Pension Benefits
|
|
OPEB Benefits
|
||||||||||||||||||||
|
United States
|
|
France
|
|
United States
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||
Change in Projected Benefit Obligation, or PBO:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
PBO at beginning of year
|
$
|
132.4
|
|
|
$
|
121.6
|
|
|
$
|
37.3
|
|
|
$
|
37.7
|
|
|
$
|
1.8
|
|
|
$
|
2.8
|
|
Service cost
|
—
|
|
|
—
|
|
|
1.3
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
||||||
Interest cost
|
5.0
|
|
|
5.6
|
|
|
0.4
|
|
|
0.8
|
|
|
0.1
|
|
|
0.1
|
|
||||||
Actuarial (gain) loss
|
(6.5
|
)
|
|
14.6
|
|
|
(0.6
|
)
|
|
4.4
|
|
|
0.4
|
|
|
(0.1
|
)
|
||||||
Participant contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.2
|
|
||||||
Plan amendment
|
—
|
|
|
(2.1
|
)
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
||||||
Gross benefits paid
|
(7.5
|
)
|
|
(7.3
|
)
|
|
(2.5
|
)
|
|
(1.7
|
)
|
|
(0.7
|
)
|
|
(0.6
|
)
|
||||||
Currency translation effect
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
|
(5.2
|
)
|
|
—
|
|
|
—
|
|
||||||
PBO at end of year
|
$
|
123.4
|
|
|
$
|
132.4
|
|
|
$
|
32.2
|
|
|
$
|
37.3
|
|
|
$
|
1.7
|
|
|
$
|
1.8
|
|
Change in Plan Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value of plan assets at beginning of year
|
128.9
|
|
|
126.0
|
|
|
10.2
|
|
|
12.3
|
|
|
—
|
|
|
—
|
|
||||||
Actual return on plan assets
|
(4.7
|
)
|
|
12.3
|
|
|
0.5
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
||||||
Employer contributions
|
—
|
|
|
—
|
|
|
1.3
|
|
|
1.0
|
|
|
0.6
|
|
|
0.4
|
|
||||||
Participant contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.2
|
|
||||||
Plan amendment
|
—
|
|
|
(2.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Gross benefits paid
|
(7.5
|
)
|
|
(7.3
|
)
|
|
(2.6
|
)
|
|
(2.2
|
)
|
|
(0.7
|
)
|
|
(0.6
|
)
|
||||||
Currency translation effect
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
(1.4
|
)
|
|
—
|
|
|
—
|
|
||||||
Fair value of plan assets at end of year
|
$
|
116.7
|
|
|
$
|
128.9
|
|
|
$
|
8.4
|
|
|
$
|
10.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded status at end of year
|
$
|
(6.7
|
)
|
|
$
|
(3.5
|
)
|
|
$
|
(23.8
|
)
|
|
$
|
(27.1
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
(1.8
|
)
|
|
United States
|
|
France
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
PBO
|
$
|
123.4
|
|
|
$
|
132.4
|
|
|
$
|
32.2
|
|
|
$
|
37.3
|
|
ABO
|
123.4
|
|
|
132.4
|
|
|
28.3
|
|
|
32.2
|
|
||||
Fair value of plan assets
|
116.7
|
|
|
128.9
|
|
|
8.4
|
|
|
10.2
|
|
|
Pension Benefits
|
|
OPEB Benefits
|
||||||||
|
United States
|
|
France
|
|
United States
|
||||||
Accumulated loss
|
$
|
42.1
|
|
|
$
|
16.9
|
|
|
$
|
0.9
|
|
Prior service credit
|
—
|
|
|
(4.5
|
)
|
|
(0.4
|
)
|
|||
Accumulated other comprehensive loss (income)
|
$
|
42.1
|
|
|
$
|
12.4
|
|
|
$
|
0.5
|
|
|
Pension Benefits
|
|
OPEB Benefits
|
||||||||
|
United States
|
|
France
|
|
United States
|
||||||
Amortization of accumulated loss
|
$
|
(3.9
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(0.3
|
)
|
Amortization of prior service credit
|
—
|
|
|
0.3
|
|
|
0.1
|
|
|||
Total
|
$
|
(3.9
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(0.2
|
)
|
|
Pension Benefits
|
|
OPEB Benefits
|
||||||||||||||
|
United States
|
|
France
|
|
United States
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||
Discount rate
|
4.40
|
%
|
|
3.94
|
%
|
|
1.43
|
%
|
|
1.17
|
%
|
|
4.29
|
%
|
|
3.82
|
%
|
Rate of compensation increase
|
—
|
%
|
|
—
|
%
|
|
1.90
|
%
|
|
1.90
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|
U.S. Pension Benefits
|
|
French Pension Benefits
|
|
U.S. OPEB Benefits
|
||||||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.3
|
|
|
$
|
1.3
|
|
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Interest cost
|
5.0
|
|
|
5.6
|
|
|
5.1
|
|
|
0.4
|
|
|
0.8
|
|
|
0.8
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|||||||||
Expected return on plan assets
|
(7.0
|
)
|
|
(7.4
|
)
|
|
(7.1
|
)
|
|
(0.3
|
)
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Amortizations and other
|
5.1
|
|
|
4.2
|
|
|
6.7
|
|
|
0.2
|
|
|
0.7
|
|
|
0.5
|
|
|
(0.2
|
)
|
|
(0.5
|
)
|
|
(0.7
|
)
|
|||||||||
Curtailment benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.7
|
)
|
|
(3.2
|
)
|
|||||||||
Net periodic benefit cost
|
$
|
3.1
|
|
|
$
|
2.4
|
|
|
$
|
4.7
|
|
|
$
|
1.6
|
|
|
$
|
2.4
|
|
|
$
|
2.2
|
|
|
$
|
(0.1
|
)
|
|
$
|
(3.1
|
)
|
|
$
|
(3.7
|
)
|
|
Pension Benefits
|
|
OPEB Benefits
|
|||||||||||||||||||||||
|
United States
|
|
France
|
|
United States
|
|||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
|||||||||
Discount rate
|
3.94
|
%
|
|
4.78
|
%
|
|
4.00
|
%
|
|
1.43
|
%
|
|
1.17
|
%
|
|
2.38
|
%
|
|
3.82
|
%
|
|
4.02
|
%
|
|
3.25
|
%
|
Expected long-term rate of return on plan assets
|
6.06
|
%
|
|
6.48
|
%
|
|
6.50
|
%
|
|
3.00
|
%
|
|
3.00
|
%
|
|
3.25
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Rate of compensation increase
|
—
|
|
|
—
|
|
|
—
|
|
|
1.90
|
%
|
|
1.90
|
%
|
|
2.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|
United States
|
|
France
|
|||||||||||
|
2016 Target
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||
Asset Category
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
|
12
|
%
|
|
11
|
%
|
Equity securities*
|
|
|
|
|
|
|
|
|
|
|||||
Domestic Large Cap
|
8
|
|
|
7
|
|
|
5
|
|
|
20
|
|
|
17
|
|
Domestic Small Cap
|
3
|
|
|
4
|
|
|
4
|
|
|
|
|
|
||
International
|
18
|
|
|
19
|
|
|
17
|
|
|
|
|
|
||
Fixed income securities
|
68
|
|
|
69
|
|
|
68
|
|
|
66
|
|
|
71
|
|
Alternative investments**
|
2
|
|
|
—
|
|
|
5
|
|
|
2
|
|
|
1
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
*
|
None of the Company's pension plan assets are targeted for investment in SWM stock, except that it is possible that one or more mutual funds held by the plan could hold shares of SWM.
|
**
|
Investments in this category under the U.S. pension plan only may include hedge funds, and may include real estate under the French pension plan.
|
Level 1
|
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
|
Level 2
|
Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly;
|
Level 3
|
Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
|
|
United States
|
|
France
|
||||||||||||||||||||||||
Plan Asset Category
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
||||||||||||||
Cash equivalents
|
$
|
1.2
|
|
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Domestic Large Cap
|
8.0
|
|
|
—
|
|
|
8.0
|
|
|
—
|
|
|
1.7
|
|
|
1.7
|
|
|
—
|
|
|||||||
Domestic Small Cap
|
5.3
|
|
|
—
|
|
|
5.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
International
|
21.6
|
|
|
—
|
|
|
21.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Fixed income securities
|
80.3
|
|
|
—
|
|
|
80.3
|
|
|
—
|
|
|
5.5
|
|
|
—
|
|
|
5.5
|
|
|||||||
Alternative investments*
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|||||||
Total
|
$
|
116.7
|
|
|
$
|
1.2
|
|
|
$
|
115.2
|
|
|
$
|
0.3
|
|
|
$
|
8.4
|
|
|
$
|
2.7
|
|
|
$
|
5.7
|
|
|
United States
|
|
France
|
||||||||||||||||||||||||
Plan Asset Category
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
||||||||||||||
Cash equivalents
|
$
|
1.1
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Domestic Large Cap
|
7.2
|
|
|
—
|
|
|
7.2
|
|
|
—
|
|
|
1.7
|
|
|
1.7
|
|
|
—
|
|
|||||||
Domestic Small Cap
|
5.5
|
|
|
—
|
|
|
5.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
International
|
21.3
|
|
|
—
|
|
|
21.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Fixed income securities
|
87.0
|
|
|
—
|
|
|
87.0
|
|
|
—
|
|
|
7.3
|
|
|
—
|
|
|
7.3
|
|
|||||||
Alternative investments*
|
6.8
|
|
|
—
|
|
|
—
|
|
|
6.8
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||||||
Total
|
$
|
128.9
|
|
|
$
|
1.1
|
|
|
$
|
121.0
|
|
|
$
|
6.8
|
|
|
$
|
10.2
|
|
|
$
|
2.8
|
|
|
$
|
7.4
|
|
U.S.
Level 3 Asset Reconciliation
|
Alternative
Investments
Total
|
||
Beginning balance, January 1, 2013
|
$
|
6.4
|
|
Realized and unrealized gains
|
0.5
|
|
|
Purchases
|
—
|
|
|
Sales
|
(0.1
|
)
|
|
Ending balance, December 31, 2014
|
$
|
6.8
|
|
Realized and unrealized gains
|
0.1
|
|
|
Purchases
|
0.5
|
|
|
Sales
|
(7.1
|
)
|
|
Ending balance, December 31, 2015
|
$
|
0.3
|
|
|
United States
|
|
France
|
||||||||
|
Pension
Benefits
|
|
Healthcare
and Life
Insurance
Benefits
|
|
Pension
Benefits
|
||||||
2016
|
$
|
8.2
|
|
|
$
|
0.3
|
|
|
$
|
2.9
|
|
2017
|
8.2
|
|
|
0.2
|
|
|
3.5
|
|
|||
2018
|
8.4
|
|
|
0.1
|
|
|
0.7
|
|
|||
2019
|
8.4
|
|
|
0.1
|
|
|
2.1
|
|
|||
2020
|
8.4
|
|
|
0.1
|
|
|
1.5
|
|
|||
2021 - 2025
|
41.0
|
|
|
0.4
|
|
|
6.6
|
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
# of Shares
|
|
Weighted Average Fair Value at Date of Grant
|
|
# of Shares
|
|
Weighted Average Fair Value at Date of Grant
|
|
# of Shares
|
|
Weighted Average Fair Value at Date of Grant
|
|||||||||
Nonvested restricted shares outstanding at January 1
|
366,363
|
|
|
$
|
38.24
|
|
|
318,561
|
|
|
$
|
35.82
|
|
|
433,382
|
|
|
$
|
18.94
|
|
Granted
|
107,346
|
|
|
45.34
|
|
|
201,680
|
|
|
39.55
|
|
|
274,172
|
|
|
36.47
|
|
|||
Forfeited
|
(39,322
|
)
|
|
40.93
|
|
|
(675
|
)
|
|
48.68
|
|
|
(42,711
|
)
|
|
33.71
|
|
|||
Vested
|
(236,713
|
)
|
|
36.57
|
|
|
(153,203
|
)
|
|
34.89
|
|
|
(346,282
|
)
|
|
15.33
|
|
|||
Nonvested restricted shares outstanding at December 31
|
197,674
|
|
|
$
|
43.56
|
|
|
366,363
|
|
|
$
|
38.24
|
|
|
318,561
|
|
|
$
|
35.82
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Numerator (basic and diluted):
|
|
|
|
|
|
||||||
Net income
|
$
|
89.7
|
|
|
$
|
89.7
|
|
|
$
|
76.1
|
|
Less: Dividends paid to participating securities
|
(0.2
|
)
|
|
(0.3
|
)
|
|
(0.2
|
)
|
|||
Less: Undistributed earnings available to participating securities
|
(0.3
|
)
|
|
(0.5
|
)
|
|
(0.4
|
)
|
|||
Undistributed and distributed earnings available to common stockholders
|
$
|
89.2
|
|
|
$
|
88.9
|
|
|
$
|
75.5
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Average number of common shares outstanding
|
30,251.4
|
|
|
30,238.0
|
|
|
31,056.7
|
|
|||
Effect of dilutive stock-based compensation
|
122.9
|
|
|
118.5
|
|
|
181.6
|
|
|||
Average number of common and potential common shares outstanding
|
30,374.3
|
|
|
30,356.5
|
|
|
31,238.3
|
|
2016
|
$
|
4.5
|
|
2017
|
3.6
|
|
|
2018
|
2.7
|
|
|
2019
|
2.7
|
|
|
2020
|
2.7
|
|
|
Thereafter
|
13.2
|
|
|
Total
|
$
|
29.4
|
|
($ in millions)
|
Net Sales
|
|||||||||||||||||||
|
For the Years Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
Engineered Papers
|
$
|
583.9
|
|
|
76.4
|
%
|
|
$
|
666.9
|
|
|
84.0
|
%
|
|
$
|
768.6
|
|
|
99.5
|
%
|
Advanced Materials & Structures
|
180.2
|
|
|
23.6
|
|
|
127.4
|
|
|
16.0
|
|
|
4.2
|
|
|
0.5
|
|
|||
Total Consolidated
|
$
|
764.1
|
|
|
100.0
|
%
|
|
$
|
794.3
|
|
|
100.0
|
%
|
|
$
|
772.8
|
|
|
100.0
|
%
|
($ in millions)
|
Operating Profit
|
|||||||||||||||||||
|
For the Years Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
Engineered Papers
|
$
|
121.5
|
|
|
118.0
|
%
|
|
$
|
124.5
|
|
|
117.3
|
%
|
|
$
|
148.9
|
|
|
119.2
|
%
|
Advanced Materials & Structures
|
16.7
|
|
|
16.2
|
|
|
10.2
|
|
|
9.6
|
|
|
(1.1
|
)
|
|
(0.9
|
)
|
|||
Unallocated
|
(35.2
|
)
|
|
(34.2
|
)
|
|
(28.6
|
)
|
|
(26.9
|
)
|
|
(22.9
|
)
|
|
(18.3
|
)
|
|||
Total Consolidated
|
$
|
103.0
|
|
|
100.0
|
%
|
|
$
|
106.1
|
|
|
100.0
|
%
|
|
$
|
124.9
|
|
|
100.0
|
%
|
($ in millions)
|
Segment Assets
|
||||||||||
|
December 31, 2015
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||
Engineered Papers
|
$
|
507.3
|
|
|
$
|
611.9
|
|
|
$
|
873.8
|
|
Advanced Materials & Structures
|
648.4
|
|
|
320.1
|
|
|
286.3
|
|
|||
Unallocated
|
134.3
|
|
|
253.0
|
|
|
64.0
|
|
|||
Consolidated
|
$
|
1,290.0
|
|
|
$
|
1,185.0
|
|
|
$
|
1,224.1
|
|
($ in millions)
|
Capital Spending
|
Depreciation
|
|||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
Engineered Papers
|
$
|
12.5
|
|
|
$
|
26.1
|
|
|
$
|
28.4
|
|
|
$
|
25.6
|
|
|
$
|
31.0
|
|
|
$
|
30.5
|
|
Advanced Materials & Structures
|
11.2
|
|
|
8.7
|
|
|
0.7
|
|
|
5.5
|
|
|
3.9
|
|
|
0.1
|
|
||||||
Unallocated
|
0.5
|
|
|
0.3
|
|
|
—
|
|
|
(0.4
|
)
|
|
0.4
|
|
|
0.5
|
|
||||||
Consolidated
|
$
|
24.2
|
|
|
$
|
35.1
|
|
|
$
|
29.1
|
|
|
$
|
30.7
|
|
|
$
|
35.3
|
|
|
$
|
31.1
|
|
|
Long-Lived Assets
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
$
|
87.5
|
|
|
$
|
75.5
|
|
|
$
|
86.8
|
|
France
|
163.5
|
|
|
187.2
|
|
|
210.2
|
|
|||
The Philippines
|
—
|
|
|
30.8
|
|
|
31.5
|
|
|||
Brazil
|
20.1
|
|
|
27.8
|
|
|
35.1
|
|
|||
Poland
|
23.6
|
|
|
29.0
|
|
|
32.8
|
|
|||
Other foreign countries
|
15.9
|
|
|
15.5
|
|
|
3.6
|
|
|||
Consolidated
|
$
|
310.6
|
|
|
$
|
365.8
|
|
|
$
|
400.0
|
|
|
Net Sales
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
$
|
310.7
|
|
|
$
|
263.7
|
|
|
$
|
223.1
|
|
Europe and the former Commonwealth of Independent States
|
261.2
|
|
|
304.6
|
|
|
343.0
|
|
|||
Asia/Pacific (including China)
|
118.5
|
|
|
125.3
|
|
|
113.6
|
|
|||
Latin America
|
34.6
|
|
|
54.9
|
|
|
49.6
|
|
|||
Other foreign countries
|
39.1
|
|
|
45.8
|
|
|
43.5
|
|
|||
Consolidated
|
$
|
764.1
|
|
|
$
|
794.3
|
|
|
$
|
772.8
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Allowance for doubtful accounts
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
0.3
|
|
|
$
|
0.4
|
|
|
$
|
0.7
|
|
Bad debt expense
|
0.2
|
|
|
0.3
|
|
|
—
|
|
|||
Write-offs and discounts
|
(0.1
|
)
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|||
Currency translation
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||
Ending balance
|
$
|
0.4
|
|
|
$
|
0.3
|
|
|
$
|
0.4
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Interest paid
|
$
|
7.8
|
|
|
$
|
6.0
|
|
|
$
|
2.5
|
|
Income taxes paid
|
9.3
|
|
|
17.6
|
|
|
69.8
|
|
|||
|
|
|
|
|
|
||||||
|
At December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Capital spending in accounts payable and accrued liabilities
|
$
|
2.6
|
|
|
$
|
2.5
|
|
|
$
|
3.6
|
|
|
2015
|
||||||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Year
|
||||||||||
Net Sales
|
$
|
188.0
|
|
|
$
|
181.9
|
|
|
$
|
184.4
|
|
|
$
|
209.8
|
|
|
$
|
764.1
|
|
Gross Profit
|
51.4
|
|
|
54.8
|
|
|
52.4
|
|
|
65.8
|
|
|
224.4
|
|
|||||
Restructuring and Impairment Expense
|
4.0
|
|
|
5.2
|
|
|
1.3
|
|
|
4.1
|
|
|
14.6
|
|
|||||
Operating Profit (loss)
|
22.5
|
|
|
24.0
|
|
|
31.8
|
|
|
24.7
|
|
|
103.0
|
|
|||||
Income (loss) from continuing operations
|
18.8
|
|
|
24.5
|
|
|
25.6
|
|
|
21.6
|
|
|
90.5
|
|
|||||
(Loss) income from discontinued operations
|
—
|
|
|
(1.1
|
)
|
|
0.2
|
|
|
0.1
|
|
|
(0.8
|
)
|
|||||
Net Income (loss)
|
$
|
18.8
|
|
|
$
|
23.4
|
|
|
$
|
25.8
|
|
|
$
|
21.7
|
|
|
$
|
89.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Income (Loss) Per Share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) per share from continuing operations - basic
|
$
|
0.62
|
|
|
$
|
0.80
|
|
|
$
|
0.84
|
|
|
$
|
0.71
|
|
|
$
|
2.97
|
|
(Loss) income per share from discontinued operations - basic
|
—
|
|
|
(0.04
|
)
|
|
0.01
|
|
|
0.01
|
|
|
(0.02
|
)
|
|||||
Net Income (loss) per Share - Basic
|
$
|
0.62
|
|
|
$
|
0.76
|
|
|
$
|
0.85
|
|
|
$
|
0.72
|
|
|
$
|
2.95
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) per share from continuing operations - diluted
|
$
|
0.61
|
|
|
$
|
0.80
|
|
|
$
|
0.84
|
|
|
$
|
0.71
|
|
|
$
|
2.96
|
|
(Loss) income per share from discontinued operations - diluted
|
—
|
|
|
(0.04
|
)
|
|
0.01
|
|
|
0.01
|
|
|
(0.02
|
)
|
|||||
Net Income (loss) per Share - Diluted
|
$
|
0.61
|
|
|
$
|
0.76
|
|
|
$
|
0.85
|
|
|
$
|
0.72
|
|
|
$
|
2.94
|
|
|
2014
|
||||||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Year
|
||||||||||
Net Sales
|
$
|
204.7
|
|
|
$
|
203.6
|
|
|
$
|
204.3
|
|
|
$
|
181.7
|
|
|
$
|
794.3
|
|
Gross Profit
|
57.6
|
|
|
59.2
|
|
|
52.9
|
|
|
49.1
|
|
|
218.8
|
|
|||||
Restructuring and Impairment Expense
|
0.1
|
|
|
3.2
|
|
|
3.3
|
|
|
6.5
|
|
|
13.1
|
|
|||||
Operating Profit
|
33.1
|
|
|
30.5
|
|
|
25.2
|
|
|
17.3
|
|
|
106.1
|
|
|||||
Income from continuing operations
|
23.2
|
|
|
25.0
|
|
|
23.1
|
|
|
18.4
|
|
|
89.7
|
|
|||||
Loss from discontinued operations
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.1
|
|
|
—
|
|
|||||
Net Income
|
$
|
23.2
|
|
|
$
|
25.0
|
|
|
$
|
23.0
|
|
|
$
|
18.5
|
|
|
$
|
89.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Income Per Share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income per share from continuing operations - basic
|
$
|
0.75
|
|
|
$
|
0.82
|
|
|
$
|
0.76
|
|
|
$
|
0.61
|
|
|
$
|
2.94
|
|
Loss per share from discontinued operations - basic
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net Income per Share - Basic
|
$
|
0.75
|
|
|
$
|
0.82
|
|
|
$
|
0.76
|
|
|
$
|
0.61
|
|
|
$
|
2.94
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income per share from continuing operations - diluted
|
$
|
0.75
|
|
|
$
|
0.81
|
|
|
$
|
0.76
|
|
|
$
|
0.61
|
|
|
$
|
2.93
|
|
Loss per share from discontinued operations - diluted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net Income per Share - Diluted
|
$
|
0.75
|
|
|
$
|
0.81
|
|
|
$
|
0.76
|
|
|
$
|
0.61
|
|
|
$
|
2.93
|
|
Plan Category
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
|
|
Equity compensation plans approved by stockholders:
|
|
|
|
Outside Directors Stock Plan
(1)
|
|
122,069
|
|
Long-term Incentive Plan
(2)
|
|
4,998,000
|
|
Total approved by stockholders
|
|
5,120,069
|
|
Equity compensation plans not approved by stockholders:
|
|
—
|
|
Grand Total
|
|
5,120,069
|
|
(a)
|
The consolidated financial statements and financial statement schedules filed as part of this report are listed in the Index to the Consolidated Financial Statements set forth in Part II, Item 8.
|
Exhibit
Number
|
|
Exhibit
|
2.1
|
|
Agreement and Plan of Merger, dated as of November 18, 2013, by and among Schweitzer-Mauduit International, Inc., DelStar, Inc., SWM Acquisition Corp. I, SWM Acquisition Corp. II, certain security holders of DelStar, Inc. listed on the signature pages thereto and American Capital, Ltd. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed December 13, 2013).***
|
2.2
|
|
Equity Interest Purchase Agreement, dated as of September 17, 2015, by and among Schweitzer-Mauduit International, Inc., SWM-Argotec, LLC, Argotec Intermediate Holdings Two LLC, Argotec
Intermediate Holdings LLC, Argotec LLC, Argotec Holdings LLC and certain equity holders of
Argotec Holdings LLC listed on the signature pages thereto (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on September 21, 2015).***
|
3.1
|
|
Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 10-Q for the quarter ended September 30, 2009).
|
3.2
|
|
Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on December 16, 2014).
|
4.1
|
|
Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Form 10-Q for the quarter ended September 30, 2000).
|
10.2
|
|
Schweitzer-Mauduit International, Inc. 2015 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities Exchange
Commission on April 29, 2015).
|
10.3
|
|
Employment Agreement, dated September 14, 2015, between Schweitzer-Mauduit International, Inc.
and Michel Fievez, Executive Vice President, Paper and Reconstituted Tobacco Paper (incorporated
by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on September 16, 2015).
|
10.4
|
|
Outside Directors' Stock Plan (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2009).**
|
10.5
|
|
Annual Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the Quarter ended June 30, 2014).**
|
10.6
|
|
Equity Participation Plan (incorporated by reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K for the year ended December 31, 2000).**
|
10.7
|
|
Long-Term Incentive Plan (incorporated by reference to Exhibit 10.7 to the Company's Annual Report on Form 10-K for the year ended December 31, 2008).**
|
10.8.1
|
|
Deferred Compensation Plan (incorporated by reference to Exhibit 10.8.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2000).**
|
10.8.2
|
|
Deferred Compensation Plan for Non-Employee Directors (incorporated by reference to Exhibit 10.8.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2000).**
|
10.9
|
|
Restricted Stock Plan (incorporated by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K for the year ended December 2011).**
|
10.10
|
|
Supplemental Benefit Plan (incorporated by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K for the year ended December 2008).**
|
10.11.1
|
|
Executive Severance Plan (incorporated by reference to Exhibit 10.11 to the Company's Annual Report on Form 10-K for the year ended December 2008).**
|
10.11.2
|
|
2012 Executive Severance Plan (incorporated by reference to Exhibit 10.11.2 to the Company's Annual Report on Form 10-K for the year ended December 2011).**
|
Exhibit
Number
|
|
Exhibit
|
10.11.3
|
|
2012 Executive Severance Plan Participation Agreement (incorporated by reference to Exhibit 10.11.3 to the Company's Annual Report on Form 10-K for the year ended December 2011).**
|
10.12
|
|
Agreement for the Supply of Natural Gas, dated October 5, 2006, by and among Papeteries de Mauduit S.A.S. and ENI S.p.A. (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2006).
|
10.13
|
|
Deferred Compensation Plan No. 2 for Non-Employee Directors. (incorporated by reference to Exhibit 10.13 to the Company's Annual Report on Form 10-K for the year ended December 2013).**
|
10.14
|
|
Deferred Compensation Plan No. 2. (incorporated by reference to Exhibit 10.14 to the Company's Annual Report on Form 10-K for the year ended December 2013).**
|
*10.15
|
|
Summary of Non-Management Director Compensation.**
|
*10.16.1
|
|
Restricted Stock Award Agreement (2015 Long-Term Incentive Plan - Cliff Vesting Shares)
|
*10.16.2
|
|
Restricted Stock Award Agreement (2015 LTIP I & II - Service-Based Shares Grant 1)
|
*10.16.3
|
|
Restricted Stock Award Agreement (2015 LTIP I & II - Service-Based Shares Grant 2)
|
*10.16.4
|
|
Performance Award Agreement (2015 Long-Term Incentive plan - Performance Shares)
|
*10.16.5
|
|
Performance Award Agreement (2015 Long-Term Incentive plan - Performance Shares with Cliff Vesting)
|
10.17
|
|
Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.19 to the Company's Annual Report on Form 10-K for the year ended December 31, 2004).**
|
10.18
|
|
Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.20 to the Company's Annual Report on Form 10-K for the year ended December 31, 2004).**
|
10.19
|
|
Stock Option Agreement (incorporated by reference to Exhibit 10.21 to the Company's Annual Report on Form 10-K for the year ended December 31, 2004).**
|
10.20.1
|
|
Restricted Stock Agreement (Restricted Stock Plan - Cliff Vesting Shares) (incorporated by reference to Exhibit 10.20.1 to the Company's Annual Report on Form 10-K for the year ended December 2013).**
|
10.20.2
|
|
Restricted Stock Agreement (French Participants - Cliff Vesting) (incorporated by reference to Exhibit 10.20.2 to the Company's Annual Report on Form 10-K for the year ended December 2013).**
|
10.20.3
|
|
Restricted Stock Agreement (Restricted Stock Plan - Performance Share Award) (incorporated by reference to Exhibit 10.20.3 to the Company's Annual Report on Form 10-K for the year ended December 2013).**
|
10.20.4
|
|
Restricted Stock Agreement (French Participants - Performance Shares) (incorporated by reference to Exhibit 10.20.4 to the Company's Annual Report on Form 10-K for the year ended December 2013).**
|
10.21
|
|
Amended and Restated Credit Agreement, dated as of December 11, 2013, with JPMorgan Chase Bank, N.A., as administrative agent, the lenders party thereto, J.P. Morgan Securities LLC, Fifth Third Bank, Merrill Lynch, Pierce, Fenner & Smith Incorporated and SunTrust Robinson Humphrey, Inc. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 13, 2013).
|
10.22
|
|
Second Amended and Restated Credit Agreement, dated as of October 28, 2015 with JPMorgan Chase Bank, N.A., as administrative agent, the lenders party thereto, J.P. Morgan Securities LLC, Fifth Third Bank, Merrill Lynch Pierce, Fenner & Smith Inc., SunTrust Robinson Humphrey, Inc. and AgFirst Farm Credit Bank, as joint lead arrangers and joint bookrunners, and Fifth Third Bank,
Merrill Lynch Pierce Fenner & Smith, Inc., SunTrust Bank and AgFirst Farm Credit Bank, as Co-
Syndication Agents (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 28, 2015).
|
*21
|
|
Subsidiaries of the Company.
|
*23
|
|
Consent of Independent Registered Public Accounting Firm.
|
*24
|
|
Powers of Attorney.
|
Exhibit
Number
|
|
Exhibit
|
*31.1
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15(d)-14(a) of the Securities Exchange Act of 1934, as amended.
|
*31.2
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15(d)-14(a) of the Securities Exchange Act of 1934, as amended.
|
*32
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ‡
|
99.2
|
|
Indemnification Agreement (incorporated by reference by Exhibit 99.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2009).
|
101
|
|
The following materials from the Company's Annual Report on Form 10-K for the year ended December 31, 2015, formatted in Extensible Business Reporting Language ("XBRL"): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income (Loss), (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Changes in Stockholders' Equity, (v) the Consolidated Statements of Cash Flow, and (vi) Notes to Consolidated Financial Statements (furnished herewith).
|
*
|
Filed herewith.
|
**
|
Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(b) of Form 10-K
|
***
|
Schedules omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish a supplemental copy of any omitted schedule to the SEC upon request.
|
‡
|
These Section 906 certifications are not being incorporated by reference into the Form 10-K filing or otherwise deemed to be filed with the SEC.
|
|
|
Schweitzer-Mauduit International, Inc.
|
|
|
|
By:
|
|
Dated:
|
February 26, 2016
|
|
/s/ Frédéric P. Villoutreix
|
|
|
|
Frédéric P. Villoutreix
|
|
|
|
Chairman of the Board and
|
|
|
|
Chief Executive Officer
|
|
|
|
(principal executive officer)
|
Name
|
|
Position
|
|
Date
|
|
|
|
|
|
/s/ Frédéric P. Villoutreix
|
|
Chairman of the Board and
|
|
February 26, 2016
|
Frédéric P. Villoutreix
|
|
Chief Executive Officer (principal executive officer)
|
|
|
|
|
|
|
|
/s/ Allison Aden
|
|
Executive Vice President, Finance and
|
|
February 26, 2016
|
Allison Aden
|
|
Chief Financial Officer (principal financial officer)
|
|
|
|
|
|
|
|
/s/ Robert Cardin
|
|
Corporate Controller
|
|
February 26, 2016
|
Robert Cardin
|
|
(principal accounting officer)
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 26, 2016
|
Claire L. Arnold
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 26, 2016
|
K.C. Caldabaugh
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 26, 2016
|
William A. Finn
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 26, 2016
|
Heinrich Fischer
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 26, 2016
|
John D. Rogers
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 26, 2016
|
Anderson D. Warlick
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 26, 2016
|
Jeffrey Keenan
|
|
|
|
|
|
|
|
|
|
*By:
|
|
|
|
|
|
|
|
|
|
/s/ Greerson McMullen
|
|
|
|
February 26, 2016
|
Greerson McMullen
|
|
|
|
|
Attorney-In-Fact
|
|
|
|
|
•
|
"Banded cigarette paper"
is a type of paper, used to produce lower ignition propensity cigarettes, by applying bands to the paper during the papermaking process.
|
•
|
"Extruded netting"
is a type of plastic mesh that can be used for support netting in a variety of filtration-type products.
|
•
|
"Flax"
is a cellulose fiber from a flax plant used as a raw material in the production of certain cigarette papers.
|
•
|
"Lower ignition propensity cigarette paper"
includes banded and print banded cigarette paper, both of which contain bands, which increase the likelihood that an unattended cigarette will self-extinguish.
|
•
|
"Net debt to EBITDA ratio"
is a financial measurement used in bank covenants where "
Net Debt
" is defined as consolidated total debt minus unrestricted domestic cash and cash equivalents and 65% of non-domestic unrestricted domestic cash and cash equivalents, in excess of $15 million, and "
EBITDA"
is defined as net income plus the sum of interest expense, income tax expense, depreciation and amortization, non-cash restructuring and impairment charges less amortization of deferred revenue and interest in the earnings of equity affiliates to the extent such earnings are not distributed to the Company.
|
•
|
"Total debt to capital ratio"
is total debt divided by the sum of total debt and total stockholders' equity.
|
•
|
"Net debt to equity ratio"
is total debt less cash and cash equivalents, divided by stockholders' equity.
|
•
|
"Net debt to EBITDA ratio" is total debt less cash and cash equivalents divided by EBITDA.
|
•
|
"Net operating working capital"
is accounts receivable, inventory, income taxes receivable and prepaid expense, less accounts payable, accrued expenses and income taxes payable.
|
•
|
"Nonwovens"
are a fabric-like material made from long fibers, bonded together by chemical, mechanical, heat or solvent treatment. The term is used to denote fabrics, such as felt, which are neither woven nor knitted.
|
•
|
"Operating profit return on assets"
is operating profit divided by average total assets.
|
•
|
"Polyurethane"
is a polymer composed of organic units joined by carbamate (urethane) links.
|
•
|
"Print banded cigarette paper"
is a type of paper, used to produce lower ignition propensity cigarettes, with bands added to the paper during a printing process, subsequent to the papermaking process.
|
•
|
"Reconstituted tobacco"
is produced in two forms: leaf, or reconstituted tobacco leaf, and wrapper and binder products. Reconstituted tobacco leaf is blended with virgin tobacco as a design aid to achieve certain attributes of finished cigarettes. Wrapper and binder are reconstituted tobacco products used by manufacturers of cigars.
|
•
|
"Restructuring expense"
represents expenses incurred in connection with activities intended to significantly change the size or nature of the business operations, including significantly reduced utilization of operating equipment, exit of a product or market or a significant workforce reduction and charges to reduce property, plant and equipment to its fair value.
|
•
|
"Reverse osmosis"
is a water purification technology that uses a semipermeable membrane to remove larger particles from drinking water.
|
•
|
"Start-up costs"
are costs incurred prior to generation of income producing activities in the case of a new plant, or costs incurred in excess of expected ongoing normal costs in the case of a new or rebuilt machine. Start-up costs can include excess variable costs such as raw materials, utilities and labor and unabsorbed fixed costs.
|
•
|
"Thermoplastics"
are a plastic material, polymer, that becomes pliable or moldable above a specific temperature and solidifies upon cooling.
|
•
|
"Tobacco paper"
includes cigarette paper which wraps the column of tobacco within a cigarette and has varying properties such as basis weight, porosity, opacity, tensile strength, texture and burn rate, as well as plug wrap paper which wraps the outer layer of a cigarette filter and is used to hold the filter materials in a cylindrical form, and tipping paper which joins the filter element to the tobacco-filled column of the cigarette and is both printable and glueable at high speeds.
|
Function
|
|
Amount Paid
|
|
Form of Payment
|
|
|
|
|
|
Annual Stock Retainer
|
|
$80,000 annually
|
|
Payable in quarterly increments in shares of company common stock at its fair market value
|
|
|
|
|
|
Annual Cash Retainer
|
|
$60,000 annually
|
|
Payable in cash in quarterly increments
|
|
|
|
|
|
Audit Committee Members Meeting Fee
|
|
$15,000 annually
|
|
Payable in cash in quarterly increments
|
|
|
|
|
|
Audit Committee Chair Meeting Fee
|
|
$30,000 annually
|
|
Payable in cash in quarterly increments
|
|
|
|
|
|
Compensation Committee Members Meeting Fee
|
|
$10,000 annually
|
|
Payable in cash in quarterly increments
|
|
|
|
|
|
Compensation Committee Chair Meeting Fee
|
|
$20,000 annually
|
|
Payable in cash in quarterly increments
|
|
|
|
|
|
Nominating & Governance Committee Members Meeting Fee
|
|
$10,000 annually
|
|
Payable in cash in quarterly increments
|
|
|
|
|
|
Nominating & Governance Committee Chair Meeting Fee
|
|
$15,000 annually
|
|
Payable in cash in quarterly increments
|
|
|
|
|
|
Lead-Non Management Director Fee
|
|
$20,000 annually
|
|
Payable in cash in quarterly increments
|
|
|
|
|
|
Meeting Travel Expenses
|
|
Reasonable and actual
|
|
Cash reimbursement
|
(a)
|
This Agreement shall not confer upon Grantee any right to continuation of employment by the Company, nor shall this Agreement interfere in any way with the Company’s right to terminate his or her employment at any time.
|
(b)
|
Subject to the terms of the Plan, the Committee may terminate, amend, or modify the Plan or this Agreement; provided, however, that no such termination, amendment, or modification of the Plan or this Agreement may materially impair the Grantee’s rights under this Agreement without Grantee’s consent.
|
(c)
|
This Agreement shall be subject to all applicable laws, rules, and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.
|
(d)
|
To the extent not preempted by Federal law, this Agreement shall be governed by, and construed in accordance with the laws of the State of Delaware.
|
(a)
|
This Agreement shall not confer upon Grantee any right to continuation of employment by the Company, nor shall this Agreement interfere in any way with the Company’s right to terminate his or her employment at any time.
|
(b)
|
Subject to the terms of the Plan, the Committee may terminate, amend, or modify the Plan or this Agreement; provided, however, that no such termination, amendment, or modification of the Plan or this Agreement may materially impair the Grantee’s rights under this Agreement without Grantee’s consent.
|
(c)
|
This Agreement shall be subject to all applicable laws, rules, and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.
|
(d)
|
To the extent not preempted by Federal law, this Agreement shall be governed by, and construed in accordance with the laws of the State of Delaware.
|
(a)
|
This Agreement shall not confer upon Grantee any right to continuation of employment by the Company, nor shall this Agreement interfere in any way with the Company’s right to terminate his or her employment at any time.
|
(b)
|
Subject to the terms of the Plan, the Committee may terminate, amend, or modify the Plan or this Agreement; provided, however, that no such termination, amendment, or modification of the Plan or this Agreement may materially impair the Grantee’s rights under this Agreement without Grantee’s consent.
|
(c)
|
This Agreement shall be subject to all applicable laws, rules, and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.
|
(d)
|
To the extent not preempted by Federal law, this Agreement shall be governed by, and construed in accordance with the laws of the State of Delaware.
|
(A)
|
for Restricted Stock that has been issued, all restrictions on the grant or transferability of the Restricted Stock issued pursuant to this Agreement shall immediately lapse and the shares of Restricted Stock subject to this Agreement shall vest;
|
(B)
|
for an award opportunity for which the Performance Period has been completed, but for which the Restricted Stock has not yet been issued, all restrictions on the grant or transferability of the Restricted Stock issued pursuant to this Agreement shall lapse immediately upon the issuance thereof and such shares of Restricted Stock shall then be deemed vested (with the number of shares of Restricted Stock
|
(C)
|
for an award opportunity for which the Performance Period has not been completed, for the circumstances described in clauses (i) death, (ii) Disability and (iv)
a CIC Qualifying Termination, the amount of the Restricted Stock issued shall be determined by the Committee on a pro rata basis based on the number of completed months served during the Performance Period and based on target performance, with the number of shares vesting pursuant to this clause (C) determined by dividing the target award value by the Stock Price, with the Restricted Stock issued pursuant to this clause (C), if any, to be issued to the Grantee (as evidenced by the appropriate entry on the books of the Company or a duly authorized transfer agent of the Company) within sixty days following such termination event;
|
(D)
|
for an award opportunity for which the Performance Period has not been completed for the circumstance described in clause (iii) Retirement, the amount of Restricted Stock issued shall be determined by the Committee on a pro rata basis based on the number of completed months served during the Performance Period and based on actual performance during the Performance Period in accordance with the Committee’s normal procedures once the Performance Period is completed (with the number of shares of Restricted Stock issued being calculated by dividing the actual value of award opportunity based on the results of the Performance Period by the Stock Price, and
|
(E)
|
for an award opportunity for which the Performance Period has not been completed in the event of a Without Cause Termination, the award shall be automatically and immediately forfeited by the Grantee.
|
(a)
|
This Agreement shall not confer upon Grantee any right to continuation of employment by the Company, nor shall this Agreement interfere in any way with the Company’s right to terminate his or her employment at any time.
|
(b)
|
Subject to the terms of the Plan, the Committee may terminate, amend, or modify the Plan or this Agreement; provided, however, that no such termination, amendment, or modification of the Plan or this Agreement may materially impair the Grantee’s rights under this Agreement without Grantee’s consent.
|
(c)
|
This Agreement shall be subject to all applicable laws, rules, and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.
|
(d)
|
To the extent not preempted by Federal law, this Agreement shall be governed by, and construed in accordance with the laws of the State of Delaware.
|
Achievement Level Attained(1)
|
Required Performance Levels
|
Percentage Award Earned(2)
|
Threshold
|
[_______________]
|
[___]%
|
Target
|
[_______________]
|
[___]%
|
Outstanding
|
[_______________]
|
[___]%
|
Maximum
|
[_______________]
|
[___]%
|
|
|
|
(a)
|
This Agreement shall not confer upon Grantee any right to continuation of employment by the Company, nor shall this Agreement interfere in any way with the Company’s right to terminate his or her employment at any time.
|
(b)
|
Subject to the terms of the Plan, the Committee may terminate, amend, or modify the Plan or this Agreement; provided, however, that no such termination, amendment, or modification of the Plan or this Agreement may materially impair the Grantee’s rights under this Agreement without Grantee’s consent.
|
(c)
|
This Agreement shall be subject to all applicable laws, rules, and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.
|
(d)
|
To the extent not preempted by Federal law, this Agreement shall be governed by, and construed in accordance with the laws of the State of Delaware.
|
Achievement Level Attained(1)
|
Required Performance Levels
|
Percentage Award Earned(2)
|
Threshold
|
[_______________]
|
[___]%
|
Target
|
[_______________]
|
[___]%
|
Outstanding
|
[_______________]
|
[___]%
|
Maximum
|
[_______________]
|
[___]%
|
|
|
|
The subsidiaries of the Company at December 31, 2015 were as follows:
|
||||
Name
|
|
Jurisdiction of
Incorporation or Organization |
|
Percentage of
Voting Power |
Schweitzer-Mauduit Canada, BCULC.
|
|
British Columbia (Canada)
|
|
100%
|
Schweitzer-Mauduit International China, Limited
|
|
Hong Kong, China
|
|
100%
|
China Tobacco Mauduit (Jiangmen) Paper
Industry Company Ltd. (1)
|
|
People’s Republic of China
|
|
50%
|
China Tobacco - Schweitzer (Yunnan) Reconstituted Tobacco Co. Ltd. (2)
|
|
People’s Republic of China
|
|
50%
|
DelStar Technologies (Shanghai) Trading Corp. Ltd.
|
|
People’s Republic of China
|
|
100%
|
DelStar Technologies (Suzhou) Co. Ltd.
|
|
People’s Republic of China
|
|
100%
|
Schweitzer-Mauduit Spain, S.L.
|
|
Luxembourg
|
|
100%
|
Schweitzer-Mauduit do Brasil Indústria e Comércio de Papel Ltda.
|
|
Brazil
|
|
100%
|
SWM Acquisition Corp. I
|
|
Delaware
|
|
100%
|
DelStar, Inc.
|
|
Delaware
|
|
100%
|
DelStar Holding Corp.
|
|
Delaware
|
|
100%
|
Coretec Tubing Corp.
|
|
Delaware
|
|
100%
|
U.S. Netting, Inc.
|
|
Delaware
|
|
100%
|
DelStar Technologies, Inc.
|
|
Delaware
|
|
100%
|
DelStar Air, Inc.
|
|
Delaware
|
|
100%
|
DelStar Electrostatic, Inc.
|
|
Delaware
|
|
100%
|
Schweitzer-Mauduit Holding S.A.S.
|
|
France
|
|
100%
|
Schweitzer-Mauduit Industries S.A.S.
|
|
France
|
|
100%
|
Schweitzer-Mauduit France S.A.S.
|
|
France
|
|
100%
|
Schweitzer-Mauduit Developpements S.A.S.
|
|
France
|
|
100%
|
LTR Industries S.A.S.
|
|
France
|
|
100%
|
Papeteries de Saint-Girons S.A.S.
|
|
France
|
|
100%
|
Papeteries de Malaucène S.A.S
|
|
France
|
|
100%
|
Malaucène Industries S.N.C.
|
|
France
|
|
100%
|
SWM Services S.A.S.
|
|
France
|
|
100%
|
PDM Industries S.A.S.
|
|
France
|
|
100%
|
SWM HoldCo 1 S.à.R.L.
|
|
Luxembourg
|
|
100%
|
SWM HoldCo 2 S.à.R.L.
|
|
Luxembourg
|
|
100%
|
SWM HoldCo 3 S.à.R.L.
|
|
Luxembourg
|
|
100%
|
SWM Luxembourg S.à.R.L.
|
|
Luxembourg
|
|
100%
|
SWM GP Luxembourg S.à.R.L.
|
|
Luxembourg
|
|
100%
|
SWM LP Luxembourg SCSp
|
|
Luxembourg
|
|
100%
|
SWM South S.à.R.L.
|
|
Luxembourg
|
|
100%
|
Name
|
|
Jurisdiction of
Incorporation or Organization |
|
Percentage of
Voting Power |
PDM Philippines Industries, Inc.
|
|
Philippines
|
|
100%
|
Luna Rio Landholding Corporation
|
|
Philippines
|
|
100%
|
Schweitzer-Mauduit RTL Philippines, Inc.
|
|
Philippines
|
|
100%
|
SWM Poland Sp. zo.o.
|
|
Poland
|
|
100%
|
SWM Poland GP Sp zo.o.
|
|
Poland
|
|
100%
|
Ipopema 94 Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych
|
|
Poland
|
|
100%
|
DelStar Poland
|
|
Poland
|
|
100%
|
SWM RUS LLC
|
|
Russia
|
|
100%
|
DelStar International, Limited
|
|
United Kingdom
|
|
100%
|
SWM Argotec, LLC
|
|
Delaware
|
|
100%
|
Argotec Intermediate Holdings LLC
|
|
Delaware
|
|
100%
|
Argotec LLC
|
|
Delaware
|
|
100%
|
Argotec Asia Pacific Limited
|
|
Singapore
|
|
100%
|
Argotec Deutschland
|
|
Germany
|
|
100%
|
Argotec International Sales Corporation
|
|
Delaware
|
|
100%
|
Argotec Stevens, LLC
|
|
Delaware
|
|
100%
|
(1)
|
Joint venture to produce tobacco-related papers in China.
|
(2)
|
Joint venture to produce reconstituted tobacco in China.
|
Dated this 25th day of February 2016
|
|
/s/ Claire L. Arnold
|
|
|
Claire L. Arnold
|
Dated this 25th day of February 2016
|
|
/s/ K.C. Caldabaugh
|
|
|
K.C. Caldabaugh
|
Dated this 25th day of February 2016
|
|
/s/ William A. Finn
|
|
|
William A. Finn
|
Dated this 25th day of February 2016
|
|
/s/ Frédéric P. Villoutreix
|
|
|
Frédéric P. Villoutreix
|
Dated this 25th day of February 2016
|
|
/s/ John D. Rogers
|
|
|
John D. Rogers
|
Dated this 25th day of February 2016
|
|
/s/ Anderson D. Warlick
|
|
|
Anderson D. Warlick
|
Dated this 25th day of February 2016
|
|
/s/ Heinrich Fischer
|
|
|
Heinrich Fischer
|
Dated this 25th day of February 2016
|
|
/s/ Jeffrey Keenan
|
|
|
Jeffrey Keenan
|
1.
|
I have reviewed this annual report on Form 10-K of Schweitzer-Mauduit International, Inc. (the “Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
|
/s/ Frédéric P. Villoutreix
|
|
Frédéric P. Villoutreix
Chairman of the Board and
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Schweitzer-Mauduit International, Inc. (the “Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
|
/s/ Allison Aden
|
|
Allison Aden
Executive Vice President, Finance and
Chief Financial Officer
|
By:
|
/s/ Frédéric P. Villoutreix
|
|
By:
|
/s/ Allison Aden
|
|
Frédéric P. Villoutreix
Chairman of the Board and
Chief Executive Officer
|
|
|
Allison Aden
Executive Vice President, Finance and
Chief Financial Officer
|
|
|
|
|
|
|
February 26, 2016
|
|
|
February 26, 2016
|