ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-3594554
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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601 W. Riverside Avenue, Suite 1100
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Spokane, Washington
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99201
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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 ($0.0001 par value per share)
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New York Stock Exchange
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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PAGE
NUMBER
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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 Risks
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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 Accounting Fees and Services
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PART IV
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ITEM 15.
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Exhibits, Financial Statement Schedules
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ITEM 16.
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Form 10-K Summary
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SIGNATURES
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•
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competitive pricing pressures for our products, including as a result of increased capacity as additional manufacturing facilities are operated by our competitors;
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•
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the loss of, changes in prices in regards to, or reduction in orders from a significant customer;
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•
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changes in customer product preferences and competitors' product offerings;
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•
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our ability to successfully implement our operational efficiencies and cost savings strategies;
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•
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our ability to execute on our expansion strategies, including on-time completion of our planned new tissue manufacturing operations in Shelby, North Carolina;
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•
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customer acceptance and timing and quantity of purchases of our tissue products, including the existence of sufficient demand for and the quality of tissue produced by our expanded Shelby, North Carolina operations when they are completed;
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•
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changes in the U.S. and international economies and in general economic conditions in the regions and industries in which we operate;
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•
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labor disruptions;
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•
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changes in transportation costs and disruptions in transportation services;
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•
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changes in the cost and availability of wood fiber and wood pulp;
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•
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manufacturing or operating disruptions, including IT system and IT system implementation failures, equipment malfunction and damage to our manufacturing facilities;
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•
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changes in costs for and availability of packaging supplies, chemicals, energy and maintenance and repairs;
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•
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cyclical industry conditions;
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•
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changes in expenses and required contributions associated with our pension plans;
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•
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environmental liabilities or expenditures;
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•
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cyber-security risks;
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•
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reliance on a limited number of third-party suppliers for raw materials;
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•
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our inability to service our debt obligations;
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•
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restrictions on our business from debt covenants and terms; and
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•
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changes in laws, regulations or industry standards affecting our business.
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ITEM 1.
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Business
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CONTRACT
EXPIRATION
DATE
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DIVISION AND LOCATION
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UNION
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APPROXIMATE
NUMBER OF HOURLY
EMPLOYEES
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August 31, 2017
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Consumer Products Division & Pulp & Paperboard Division -
Lewiston, Idaho |
United Steel Workers (USW)
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950
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August 31, 2017
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Consumer Products Division & Pulp & Paperboard Division -
Lewiston, Idaho |
International Brotherhood of Electrical Workers (IBEW)
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60
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CONTRACT
EXPIRATION
DATE
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DIVISION AND LOCATION
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UNION
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APPROXIMATE
NUMBER OF HOURLY
EMPLOYEES
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|
May 31, 2018
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Pulp & Paperboard Division -
Lewiston, Idaho, No. 4 Power Boiler Unit |
International Association of Machinists (IAM)
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40
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ITEM 1A.
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Risk Factors
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•
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undergo a change in control;
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•
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sell assets;
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•
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pay dividends and make other distributions;
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•
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make investments and other restricted payments;
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•
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redeem or repurchase our capital stock;
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•
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incur additional debt and issue preferred stock;
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•
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create liens;
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•
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consolidate, merge, or sell substantially all of our assets;
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•
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enter into certain transactions with our affiliates;
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•
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engage in new lines of business; and
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•
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enter into sale and lease-back transactions.
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•
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a classified Board of Directors with three-year staggered terms;
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•
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the ability of our Board of Directors to issue shares of preferred stock and to determine the price and other terms, including preferences and voting rights, of those shares without stockholder approval;
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•
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stockholder action can only be taken at a special or regular meeting and not by written consent;
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•
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advance notice procedures for nominating candidates to our Board of Directors or presenting matters at stockholder meetings;
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•
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removal of directors only for cause;
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•
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allowing only our Board of Directors to fill vacancies on our Board of Directors; and
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•
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supermajority voting requirements to amend our bylaws and certain provisions of our certificate of incorporation.
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USE
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LEASED OR OWNED
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CAPACITY
1
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PRODUCTION
1
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||||
CONSUMER PRODUCTS
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Tissue Manufacturing Facilities:
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Ladysmith, Wisconsin
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Tissue
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Owned
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56,000
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tons
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50,000
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tons
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Las Vegas, Nevada
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TAD tissue
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Owned
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38,000
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tons
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34,000
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tons
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Lewiston, Idaho
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Tissue
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Owned
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190,000
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tons
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190,000
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tons
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Neenah, Wisconsin
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Tissue
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Owned
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54,000
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tons
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53,000
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tons
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Shelby, North Carolina
2
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TAD tissue
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Owned/Leased
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77,000
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tons
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76,000
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tons
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415,000
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tons
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403,000
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tons
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Tissue Converting Facilities:
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Elwood, Illinois
2
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Tissue converting
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Owned/Leased
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73,000
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tons
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64,000
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tons
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Las Vegas, Nevada
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Tissue converting
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Owned
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64,000
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tons
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61,000
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tons
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Lewiston, Idaho
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Tissue converting
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Owned
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90,000
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tons
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81,000
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tons
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Neenah, Wisconsin
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Tissue converting
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Owned
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70,000
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tons
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55,000
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tons
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Oklahoma City, Oklahoma
4
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Tissue converting
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Leased
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—
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tons
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2,000
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tons
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Shelby, North Carolina
2
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Tissue converting
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Owned/Leased
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73,000
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tons
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72,000
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tons
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370,000
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tons
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335,000
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tons
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PULP AND PAPERBOARD
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Pulp Mills:
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Cypress Bend, Arkansas
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Pulp
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Owned
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318,000
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tons
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302,000
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|
tons
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Lewiston, Idaho
3
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Pulp
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Owned
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590,000
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tons
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505,000
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tons
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|
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908,000
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tons
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807,000
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tons
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Bleached Paperboard Mills:
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Cypress Bend, Arkansas
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Paperboard
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Owned
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360,000
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tons
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337,000
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tons
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Lewiston, Idaho
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Paperboard
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Owned
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465,000
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tons
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457,000
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|
tons
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|
|
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825,000
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tons
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794,000
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tons
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Sheeted Paperboard Facilities:
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Mendon, Michigan
2
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Paperboard sheeting
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Owned/Leased
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50,000
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tons
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40,000
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tons
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Wilkes-Barre, Pennsylvania
2
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Paperboard sheeting
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Owned/Leased
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40,000
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|
tons
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23,000
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tons
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Dallas, Texas
2
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Paperboard sheeting
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Owned/Leased
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36,000
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tons
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20,000
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|
tons
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Richmond, Virginia
2
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Paperboard sheeting
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Owned/Leased
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35,000
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tons
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23,000
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|
tons
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Hagerstown, Indiana
2
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Paperboard sheeting
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Owned/Leased
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32,000
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tons
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25,000
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|
tons
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|
|
|
|
|
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193,000
|
|
tons
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131,000
|
|
tons
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|
|
|
|
|
|
|
|
|
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||
Columbia City, Oregon
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Chip shipment
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Leased
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N/A
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N/A
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||
Clarkston, Washington
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Wood chipping
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Owned
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N/A
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N/A
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||
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|
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||
CORPORATE
|
|
|
|
|
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||
Alpharetta, Georgia
|
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Operations and administration
|
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Leased
|
|
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N/A
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|
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N/A
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||
Spokane, Washington
|
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Corporate headquarters
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Leased
|
|
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N/A
|
|
|
N/A
|
1
|
Production amounts are approximations for full year
2017
. Annual capacity is an estimate based on assumptions and judgments concerning, among other things, both market demand and product mix, which change from time-to-time.
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2
|
The buildings located at these facilities are leased by Clearwater Paper or a subsidiary, and the operating equipment located within the buildings are owned by Clearwater Paper or a subsidiary.
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3
|
In 2017, we completed the installation of our continuous pulp digester. Given this digester was only in-service for approximately the last three months of the year, production figures do not reflect what we anticipate full annual production to be once the digester has been in-service for a full annual period. We anticipate it to be at full production by the end of the first quarter of 2018.
|
4
|
On March 31, 2017 we closed our Oklahoma City converting facility. As of December 31, 2017, the facility is subleased.
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ITEM 3.
|
|
Legal Proceedings
|
|
|
Common Stock Price
|
||||||
|
|
High
|
|
Low
|
||||
Year Ended December 31, 2017:
|
|
|
|
|
||||
Fourth Quarter
|
|
$
|
50.45
|
|
|
$
|
42.20
|
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Third Quarter
|
|
50.10
|
|
|
44.05
|
|
||
Second Quarter
|
|
57.40
|
|
|
43.60
|
|
||
First Quarter
|
|
67.45
|
|
|
51.75
|
|
||
Year Ended December 31, 2016:
|
|
|
|
|
||||
Fourth Quarter
|
|
$
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68.40
|
|
|
$
|
50.30
|
|
Third Quarter
|
|
69.75
|
|
|
59.18
|
|
||
Second Quarter
|
|
66.65
|
|
|
47.55
|
|
||
First Quarter
|
|
49.58
|
|
|
32.00
|
|
(In thousands, except net
earnings (loss) per share amounts)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Net sales
|
|
$
|
1,730,408
|
|
|
$
|
1,734,763
|
|
|
$
|
1,752,401
|
|
|
$
|
1,967,139
|
|
|
$
|
1,889,830
|
|
Income from operations
|
|
72,328
|
|
|
111,317
|
|
|
123,670
|
|
|
79,811
|
|
|
99,328
|
|
|||||
Net earnings (loss)
1
|
|
97,339
|
|
|
49,554
|
|
|
55,983
|
|
|
(2,315
|
)
|
|
106,955
|
|
|||||
Working capital
2
|
|
33,537
|
|
|
79,975
|
|
|
199,010
|
|
|
302,069
|
|
|
374,416
|
|
|||||
Long-term debt, net of current portion
|
|
570,524
|
|
|
569,755
|
|
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568,987
|
|
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568,221
|
|
|
640,410
|
|
|||||
Stockholders’ equity
|
|
575,434
|
|
|
469,873
|
|
|
474,866
|
|
|
497,537
|
|
|
605,094
|
|
|||||
Capital expenditures
|
|
198,685
|
|
|
155,677
|
|
|
134,104
|
|
|
99,600
|
|
|
86,508
|
|
|||||
Property, plant and equipment, net
|
|
1,050,982
|
|
|
945,328
|
|
|
866,538
|
|
|
810,987
|
|
|
884,698
|
|
|||||
Total assets
|
|
1,802,252
|
|
|
1,684,342
|
|
|
1,527,369
|
|
|
1,579,149
|
|
|
1,735,235
|
|
|||||
Net earnings (loss) per basic common
share
1
|
|
$
|
5.91
|
|
|
$
|
2.91
|
|
|
$
|
2.98
|
|
|
$
|
(0.11
|
)
|
|
$
|
4.84
|
|
Average basic common shares
outstanding
|
|
16,464
|
|
|
17,001
|
|
|
18,762
|
|
|
20,130
|
|
|
22,081
|
|
|||||
Net earnings (loss) per diluted common
share
1
|
|
$
|
5.88
|
|
|
$
|
2.90
|
|
|
$
|
2.97
|
|
|
$
|
(0.11
|
)
|
|
$
|
4.80
|
|
Average diluted common shares
outstanding
|
|
16,556
|
|
|
17,106
|
|
|
18,820
|
|
|
20,130
|
|
|
22,264
|
|
1
|
Net earnings and net earnings per basic and diluted common share for the twelve months ended December 31, 2017 reflect a $70 million tax benefit resulting from the remeasurement of the company's net deferred tax liabilities following passage of the Tax Cuts and Jobs Act signed into law on December 22, 2017.
|
2
|
Working capital is defined as our current assets less our current liabilities, as presented on our Consolidated Balance Sheets.
|
ITEM 7.
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Years Ended December 31,
|
|||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
(Dollars in thousands)
|
|
Cost
3
|
|
Percentage of Sales
|
|
Cost
3
|
|
Percentage of Sales
|
|
Cost
|
|
Percentage of Sales
|
|||||||||
Wages and benefits
|
|
$
|
277,902
|
|
|
16.1
|
%
|
|
$
|
297,277
|
|
|
17.1
|
%
|
|
$
|
291,736
|
|
|
16.6
|
%
|
Transportation
1
|
|
200,177
|
|
|
11.6
|
|
|
182,145
|
|
|
10.5
|
|
|
184,824
|
|
|
10.5
|
|
|||
Purchased pulp
|
|
193,358
|
|
|
11.2
|
|
|
196,848
|
|
|
11.3
|
|
|
186,065
|
|
|
10.6
|
|
|||
Chemicals
|
|
165,328
|
|
|
9.6
|
|
|
166,954
|
|
|
9.6
|
|
|
179,812
|
|
|
10.3
|
|
|||
Chips, sawdust and logs
|
|
135,802
|
|
|
7.8
|
|
|
148,583
|
|
|
8.6
|
|
|
147,498
|
|
|
8.4
|
|
|||
Depreciation
|
|
91,312
|
|
|
5.3
|
|
|
80,652
|
|
|
4.6
|
|
|
76,379
|
|
|
4.4
|
|
|||
Packaging supplies
|
|
88,245
|
|
|
5.1
|
|
|
86,273
|
|
|
5.0
|
|
|
90,696
|
|
|
5.2
|
|
|||
Maintenance and repairs
2
|
|
88,221
|
|
|
5.1
|
|
|
95,800
|
|
|
5.5
|
|
|
90,709
|
|
|
5.2
|
|
|||
Energy
|
|
87,287
|
|
|
5.0
|
|
|
87,163
|
|
|
5.0
|
|
|
100,322
|
|
|
5.7
|
|
|||
|
|
1,327,632
|
|
|
76.7
|
|
|
1,341,695
|
|
|
77.3
|
|
|
1,348,041
|
|
|
76.9
|
|
|||
Other operating costs
|
|
201,989
|
|
|
11.7
|
|
|
153,932
|
|
|
8.9
|
|
|
164,808
|
|
|
9.4
|
|
|||
Total cost of sales
|
|
$
|
1,529,621
|
|
|
88.4
|
%
|
|
$
|
1,495,627
|
|
|
86.2
|
%
|
|
$
|
1,512,849
|
|
|
86.3
|
%
|
1
|
Includes internal and external transportation costs.
|
2
|
Excluding related labor costs.
|
3
|
Costs for Manchester are included from the December 16, 2016 acquisition date forward.
|
(Dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Income tax (benefit) provision
|
$
|
(56,385
|
)
|
|
$
|
31,112
|
|
|
$
|
36,505
|
|
Effective tax rate
|
(137.7
|
)%
|
|
38.6
|
%
|
|
39.5
|
%
|
|
|
Years Ended December 31,
|
||||||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
||||||||||
Net sales
|
|
$
|
1,730,408
|
|
|
100.0
|
%
|
|
$
|
1,734,763
|
|
|
100.0
|
%
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
||||||
Cost of sales
|
|
(1,529,621
|
)
|
|
88.4
|
|
|
(1,495,627
|
)
|
|
86.2
|
|
||
Selling, general and administrative expenses
|
|
(128,459
|
)
|
|
7.4
|
|
|
(127,819
|
)
|
|
7.4
|
|
||
Total operating costs and expenses
|
|
(1,658,080
|
)
|
|
95.8
|
|
|
(1,623,446
|
)
|
|
93.6
|
|
||
Income from operations
|
|
72,328
|
|
|
4.2
|
|
|
111,317
|
|
|
6.4
|
|
||
Interest expense, net
|
|
(31,374
|
)
|
|
1.8
|
|
|
(30,651
|
)
|
|
1.8
|
|
||
Earnings before income taxes
|
|
40,954
|
|
|
2.4
|
|
|
80,666
|
|
|
4.6
|
|
||
Income tax benefit (provision)
|
|
56,385
|
|
|
3.3
|
|
|
(31,112
|
)
|
|
1.8
|
|
||
Net earnings
|
|
$
|
97,339
|
|
|
5.6
|
%
|
|
$
|
49,554
|
|
|
2.9
|
%
|
|
Years Ended December 31,
|
||||||
(Dollars in thousands - except per ton amounts)
|
2017
|
|
2016
|
||||
Net sales
|
$
|
941,907
|
|
|
$
|
988,380
|
|
Operating income
|
28,616
|
|
|
67,916
|
|
||
Percent of net sales
|
3.0
|
%
|
|
6.9
|
%
|
||
|
|
|
|
||||
Shipments (short tons)
|
|
|
|
||||
Non-retail
|
55,562
|
|
|
81,952
|
|
||
Retail
|
309,067
|
|
|
314,042
|
|
||
Total tissue tons
|
364,629
|
|
|
395,994
|
|
||
Converted products cases (in thousands)
|
51,221
|
|
|
52,875
|
|
||
|
|
|
|
||||
Sales price (per short ton)
|
|
|
|
||||
Non-retail
|
$
|
1,440
|
|
|
$
|
1,480
|
|
Retail
|
2,775
|
|
|
2,757
|
|
||
Total tissue
|
$
|
2,572
|
|
|
$
|
2,493
|
|
|
Years Ended December 31,
|
||||||
(Dollars in thousands - except per ton amounts)
|
2017
|
|
2016
|
||||
Net sales
|
$
|
788,501
|
|
|
$
|
746,383
|
|
Operating income
|
98,508
|
|
|
112,732
|
|
||
Percent of net sales
|
12.5
|
%
|
|
15.1
|
%
|
||
|
|
|
|
||||
Paperboard shipments (short tons)
|
828,201
|
|
|
796,158
|
|
||
Paperboard sales price (per short ton)
|
$
|
952
|
|
|
$
|
937
|
|
|
|
Years Ended December 31,
|
||||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||||||||
Net sales
|
|
$
|
1,734,763
|
|
|
100.0
|
%
|
|
$
|
1,752,401
|
|
|
100.0
|
%
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
||||||
Cost of sales
|
|
(1,495,627
|
)
|
|
86.2
|
|
|
(1,512,849
|
)
|
|
86.3
|
|
||
Selling, general and administrative expenses
|
|
(127,819
|
)
|
|
7.4
|
|
|
(115,882
|
)
|
|
6.6
|
|
||
Total operating costs and expenses
|
|
(1,623,446
|
)
|
|
93.6
|
|
|
(1,628,731
|
)
|
|
92.9
|
|
||
Income from operations
|
|
111,317
|
|
|
6.4
|
|
|
123,670
|
|
|
7.1
|
|
||
Interest expense, net
|
|
(30,651
|
)
|
|
1.8
|
|
|
(31,182
|
)
|
|
1.8
|
|
||
Earnings before income taxes
|
|
80,666
|
|
|
4.6
|
|
|
92,488
|
|
|
5.3
|
|
||
Income tax provision
|
|
(31,112
|
)
|
|
1.8
|
|
|
(36,505
|
)
|
|
2.1
|
|
||
Net earnings
|
|
$
|
49,554
|
|
|
2.9
|
%
|
|
$
|
55,983
|
|
|
3.2
|
%
|
|
Years Ended December 31,
|
||||||
(Dollars in thousands - except per ton amounts)
|
2016
|
|
2015
|
||||
Net sales
|
$
|
988,380
|
|
|
$
|
959,894
|
|
Operating income
|
67,916
|
|
|
55,704
|
|
||
Percent of net sales
|
6.9
|
%
|
|
5.8
|
%
|
||
|
|
|
|
||||
Shipments (short tons)
|
|
|
|
||||
Non-retail
|
81,952
|
|
|
90,178
|
|
||
Retail
|
314,042
|
|
|
292,438
|
|
||
Total tissue tons
|
395,994
|
|
|
382,616
|
|
||
Converted products cases (in thousands)
|
52,875
|
|
|
52,149
|
|
||
|
|
|
|
||||
Sales price (per short ton)
|
|
|
|
||||
Non-retail
|
$
|
1,480
|
|
|
$
|
1,469
|
|
Retail
|
2,757
|
|
|
2,825
|
|
||
Total tissue
|
$
|
2,493
|
|
|
$
|
2,505
|
|
|
Years Ended December 31,
|
||||||
(Dollars in thousands - except per ton amounts)
|
2016
|
|
2015
|
||||
Net sales
|
$
|
746,383
|
|
|
$
|
792,507
|
|
Operating income
|
112,732
|
|
|
120,861
|
|
||
Percent of net sales
|
15.1
|
%
|
|
15.3
|
%
|
||
|
|
|
|
||||
Paperboard shipments (short tons)
|
796,158
|
|
|
796,733
|
|
||
Paperboard sales price (per short ton)
|
$
|
937
|
|
|
$
|
990
|
|
▪
|
EBITDA and Adjusted EBITDA do not reflect our cash expenditures for capital assets;
|
▪
|
EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital requirements;
|
▪
|
EBITDA and Adjusted EBITDA do not include cash pension payments;
|
▪
|
EBITDA and Adjusted EBITDA exclude certain tax payments that may represent a reduction in cash available to us;
|
▪
|
EBITDA and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
|
▪
|
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash requirements for such replacements; and
|
▪
|
other companies, including other companies in our industry, may calculate these measures differently than we do, limiting their usefulness as a comparative measure.
|
|
|
Years Ended December 31,
|
||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net earnings
|
|
$
|
97,339
|
|
|
$
|
49,554
|
|
|
$
|
55,983
|
|
Interest expense, net
1
|
|
31,374
|
|
|
30,651
|
|
|
31,182
|
|
|||
Income tax (benefit) provision
|
|
(56,385
|
)
|
|
31,112
|
|
|
36,505
|
|
|||
Depreciation and amortization expense
2
|
|
104,990
|
|
|
91,090
|
|
|
84,732
|
|
|||
EBITDA
|
|
$
|
177,318
|
|
|
$
|
202,407
|
|
|
$
|
208,402
|
|
Directors' equity-based compensation (benefit) expense
|
|
(2,833
|
)
|
|
4,779
|
|
|
(4,073
|
)
|
|||
Costs associated with Oklahoma City facility closure
3
|
|
11,055
|
|
|
318
|
|
|
—
|
|
|||
Reorganization related expenses associated with SG&A cost control measures
|
|
2,263
|
|
|
—
|
|
|
—
|
|
|||
Costs associated with Long Island facility closure
|
|
1,443
|
|
|
1,891
|
|
|
2,463
|
|
|||
Manchester Industries acquisition related expenses
|
|
220
|
|
|
2,665
|
|
|
—
|
|
|||
Write-off of assets as a result of Warehouse Automation project
|
|
41
|
|
|
—
|
|
|
—
|
|
|||
Reorganization related expense
|
|
—
|
|
|
—
|
|
|
1,470
|
|
|||
Pension settlement expense
|
|
—
|
|
|
3,482
|
|
|
—
|
|
|||
Costs associated with Neenah paper machines shutdown
|
|
—
|
|
|
1,049
|
|
|
—
|
|
|||
Gain associated with the sale of the specialty mills, net
|
|
—
|
|
|
(1,755
|
)
|
|
(1,267
|
)
|
|||
Legal expenses and settlement costs
|
|
—
|
|
|
—
|
|
|
1,972
|
|
|||
Costs associated with labor agreement
|
|
—
|
|
|
—
|
|
|
1,730
|
|
|||
Adjusted EBITDA
|
|
$
|
189,507
|
|
|
$
|
214,836
|
|
|
$
|
210,697
|
|
1
|
Interest expense, net for the year ended December 31, 2016 includes debt retirement costs of $0.4 million.
|
2
|
Depreciation and amortization expense for the years ended
December 31, 2017
and 2016 includes $3.7 million and $1.3 million, respectively, of accelerated depreciation associated with the Oklahoma City facility closure.
|
3
|
Costs associated with the Oklahoma City facility closure for the twelve months ended December 31, 2017 include $4.3 million of loss on the write-down of assets to their held for sale value and $3.2 million of expenses associated with the execution of a sublease for the facility.
|
|
Years Ended December 31,
|
||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
GAAP income tax benefit (provision)
|
$
|
56,385
|
|
|
$
|
(31,112
|
)
|
|
$
|
(36,505
|
)
|
Adjustments, tax impact:
|
|
|
|
|
|
||||||
Federal tax rate change
1
|
(70,055
|
)
|
|
—
|
|
|
—
|
|
|||
Directors' equity-based compensation benefit (expense)
|
952
|
|
|
(1,693
|
)
|
|
1,288
|
|
|||
Costs associated with Oklahoma City facility closure
|
(4,977
|
)
|
|
(589
|
)
|
|
—
|
|
|||
Reorganization related expenses associated with SG&A cost control measures
|
(757
|
)
|
|
—
|
|
|
—
|
|
|||
Costs associated with Long Island facility closure
|
(686
|
)
|
|
(672
|
)
|
|
(780
|
)
|
|||
Accelerated depreciation of assets as a result of warehouse automation project
|
(121
|
)
|
|
—
|
|
|
—
|
|
|||
Manchester Industries acquisition related expenses
|
(74
|
)
|
|
(465
|
)
|
|
—
|
|
|||
Write-off of assets as a result of warehouse automation project
|
(14
|
)
|
|
—
|
|
|
—
|
|
|||
Reorganization related expenses
|
—
|
|
|
—
|
|
|
(470
|
)
|
|||
Costs associated with Neenah paper machines shutdown
|
—
|
|
|
(371
|
)
|
|
—
|
|
|||
Pension settlement expense
|
—
|
|
|
(1,242
|
)
|
|
—
|
|
|||
Gain associated with the sale of the specialty mills
|
—
|
|
|
626
|
|
|
395
|
|
|||
Discrete tax items related to foreign tax credits
|
—
|
|
|
—
|
|
|
1,309
|
|
|||
Legal expenses and settlement costs
|
—
|
|
|
—
|
|
|
(626
|
)
|
|||
Costs associated with labor agreement
|
—
|
|
|
—
|
|
|
(533
|
)
|
|||
Adjusted income tax provision
|
$
|
(19,347
|
)
|
|
$
|
(35,518
|
)
|
|
$
|
(35,922
|
)
|
1
|
The benefit in 2017 is primarily due to the remeasurement of deferred tax liabilities as a result of the Act signed into law on December 22, 2017. The resulting net tax benefit is excluded from our adjusted non-GAAP earnings.
|
|
|
Years Ended December 31,
|
||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash flows from operating activities
|
|
$
|
177,670
|
|
|
$
|
172,751
|
|
|
$
|
159,675
|
|
Net cash flows from investing activities
|
|
(198,797
|
)
|
|
(222,506
|
)
|
|
(78,548
|
)
|
|||
Net cash flows from financing activities
|
|
13,864
|
|
|
67,146
|
|
|
(102,848
|
)
|
|
|
Payments Due by Period
|
||||||||||||||||||
(In thousands)
|
|
Total
|
|
Less
Than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than
5 Years
|
||||||||||
Revolving lines of credit
|
|
$
|
155,000
|
|
|
$
|
155,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term debt
1
|
|
575,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
575,000
|
|
|||||
Interest on long-term debt
1
|
|
189,000
|
|
|
28,500
|
|
|
57,000
|
|
|
57,000
|
|
|
46,500
|
|
|||||
Capital leases
2
|
|
37,540
|
|
|
2,649
|
|
|
5,359
|
|
|
5,353
|
|
|
24,179
|
|
|||||
Operating leases
2
|
|
75,340
|
|
|
12,074
|
|
|
18,500
|
|
|
15,180
|
|
|
29,586
|
|
|||||
Purchase obligations
3
|
|
329,875
|
|
|
280,947
|
|
|
40,019
|
|
|
3,552
|
|
|
5,357
|
|
|||||
Other obligations
4,5
|
|
169,477
|
|
|
97,469
|
|
|
16,377
|
|
|
10,824
|
|
|
44,807
|
|
|||||
Total
|
|
$
|
1,531,232
|
|
|
$
|
576,639
|
|
|
$
|
137,255
|
|
|
$
|
91,909
|
|
|
$
|
725,429
|
|
1
|
Included above are the principal and interest payments that were due, as of December 31, 2017, on our 2013 and 2014 Notes. For more information regarding specific terms of our long-term debt, see Note 10, “Debt,” in the notes to the consolidated financial statements.
|
2
|
These amounts represent our minimum capital lease payments, including amounts representing interest, and our minimum operating lease payments. See Note 17, “Commitments and Contingencies,” in the notes to the consolidated financial statements.
|
3
|
Purchase obligations consist primarily of contracts for the purchase of raw materials (primarily pulp) from third parties, trade accounts payable as of
December 31, 2017
, contracts for outside wood chipping and contracts with natural gas and electricity providers.
|
4
|
Included in other obligations are accrued liabilities and accounts payable (other than trade accounts payable) as of
December 31, 2017
, liabilities associated with supplemental pension and deferred compensation arrangements, and estimated payments on postretirement employee benefit plans.
|
5
|
Total excludes $2.8 million of unrecognized tax benefits due to the uncertainty of timing of payment. See Note 8, “Income Taxes,” in the notes to the consolidated financial statements.
|
|
|
Expected Maturity Date
|
||||||||||||||||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed rate
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
575,000
|
|
|
$
|
575,000
|
|
Average interest rate
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
4.957
|
%
|
|
4.957
|
%
|
|||||||
Fair value at December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
569,250
|
|
ITEM 8.
|
|
Financial Statements and Supplementary Data
|
|
PAGE
NUMBER
|
Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Balance Sheets at December 31, 2017 and 2016
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2017, 2016
and 2015
|
|
Notes to Consolidated Financial Statements
|
|
Reports of Independent Registered Public Accounting Firm
|
|
|
|
Financial Statement Schedules:
|
|
All schedules have been omitted because the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements, including the notes thereto.
|
|
|
|
For The Years Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net sales
|
|
$
|
1,730,408
|
|
|
$
|
1,734,763
|
|
|
$
|
1,752,401
|
|
Costs and expenses:
|
|
|
|
|
|
|
||||||
Cost of sales
|
|
(1,529,621
|
)
|
|
(1,495,627
|
)
|
|
(1,512,849
|
)
|
|||
Selling, general and administrative expenses
|
|
(128,459
|
)
|
|
(127,819
|
)
|
|
(115,882
|
)
|
|||
Total operating costs and expenses
|
|
(1,658,080
|
)
|
|
(1,623,446
|
)
|
|
(1,628,731
|
)
|
|||
Income from operations
|
|
72,328
|
|
|
111,317
|
|
|
123,670
|
|
|||
Interest expense, net
|
|
(31,374
|
)
|
|
(30,651
|
)
|
|
(31,182
|
)
|
|||
Earnings before income taxes
|
|
40,954
|
|
|
80,666
|
|
|
92,488
|
|
|||
Income tax benefit (provision)
|
|
56,385
|
|
|
(31,112
|
)
|
|
(36,505
|
)
|
|||
Net earnings
|
|
$
|
97,339
|
|
|
$
|
49,554
|
|
|
$
|
55,983
|
|
Net earnings per common share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
5.91
|
|
|
$
|
2.91
|
|
|
$
|
2.98
|
|
Diluted
|
|
5.88
|
|
|
2.90
|
|
|
2.97
|
|
|
|
For The Years Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net earnings
|
|
$
|
97,339
|
|
|
$
|
49,554
|
|
|
$
|
55,983
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
||||||
Defined benefit pension and other postretirement employee benefits:
|
|
|
|
|
|
|
||||||
Net gain arising during the period, net of tax
of $2,409, $248, and $5,814 |
|
6,745
|
|
|
379
|
|
|
8,944
|
|
|||
Amortization of actuarial loss included in net periodic cost,
net of tax of $1,305, $1,576, and $4,972 |
|
1,951
|
|
|
2,321
|
|
|
7,647
|
|
|||
Amortization of prior service credit included in net
periodic cost, net of tax of $(601), $(669), and $(829) |
|
(926
|
)
|
|
(1,021
|
)
|
|
(1,276
|
)
|
|||
Settlement, net of tax of $-, $1,366, and $-
|
|
—
|
|
|
2,116
|
|
|
—
|
|
|||
Other comprehensive income, net of tax
|
|
7,770
|
|
|
3,795
|
|
|
15,315
|
|
|||
Comprehensive income
|
|
$
|
105,109
|
|
|
$
|
53,349
|
|
|
$
|
71,298
|
|
|
|
At December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
15,738
|
|
|
$
|
23,001
|
|
Receivables, net
|
|
142,065
|
|
|
147,074
|
|
||
Taxes receivable
|
|
20,282
|
|
|
9,709
|
|
||
Inventories
|
|
266,043
|
|
|
258,029
|
|
||
Other current assets
|
|
8,661
|
|
|
8,682
|
|
||
Total current assets
|
|
452,789
|
|
|
446,495
|
|
||
Property, plant and equipment, net
|
|
1,050,982
|
|
|
945,328
|
|
||
Goodwill
|
|
244,161
|
|
|
244,283
|
|
||
Intangible assets, net
|
|
32,542
|
|
|
40,485
|
|
||
Other assets, net
|
|
21,778
|
|
|
7,751
|
|
||
TOTAL ASSETS
|
|
$
|
1,802,252
|
|
|
$
|
1,684,342
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Borrowings under revolving credit facilities
|
|
$
|
155,000
|
|
|
$
|
135,000
|
|
Accounts payable and accrued liabilities
|
|
256,621
|
|
|
223,699
|
|
||
Current liability for pensions and other postretirement employee benefits
|
|
7,631
|
|
|
7,821
|
|
||
Total current liabilities
|
|
419,252
|
|
|
366,520
|
|
||
Long-term debt
|
|
570,524
|
|
|
569,755
|
|
||
Liability for pensions and other postretirement employee benefits
|
|
72,469
|
|
|
81,812
|
|
||
Other long-term obligations
|
|
43,275
|
|
|
41,776
|
|
||
Accrued taxes
|
|
2,770
|
|
|
2,434
|
|
||
Deferred tax liabilities
|
|
118,528
|
|
|
152,172
|
|
||
TOTAL LIABILITIES
|
|
1,226,818
|
|
|
1,214,469
|
|
||
Stockholders’ equity:
|
|
|
|
|
||||
Preferred stock, par value $0.0001 per share, 5,000,000 authorized shares,
no shares issued
|
|
—
|
|
|
—
|
|
||
Common stock, par value $0.0001 per share, 100,000,000 authorized
shares-16,447,898 and 24,223,191 shares issued
|
|
2
|
|
|
2
|
|
||
Additional paid-in capital
|
|
1,161
|
|
|
347,080
|
|
||
Retained earnings
|
|
618,254
|
|
|
569,861
|
|
||
Treasury stock, at cost, common shares – 0 and 7,736,255 shares
|
|
—
|
|
|
(395,317
|
)
|
||
Accumulated other comprehensive loss, net of tax
|
|
(43,983
|
)
|
|
(51,753
|
)
|
||
Total stockholders’ equity
|
|
575,434
|
|
|
469,873
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
$
|
1,802,252
|
|
|
$
|
1,684,342
|
|
(in thousands)
|
For The Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net earnings
|
$
|
97,339
|
|
|
$
|
49,554
|
|
|
$
|
55,983
|
|
Adjustments to reconcile net earnings to net cash flows from
operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
104,990
|
|
|
91,090
|
|
|
84,732
|
|
|||
Equity-based compensation expense
|
3,620
|
|
|
12,385
|
|
|
4,557
|
|
|||
Deferred taxes
|
(40,589
|
)
|
|
18,327
|
|
|
16,081
|
|
|||
Employee benefit plans
|
(4,371
|
)
|
|
(1,979
|
)
|
|
3,011
|
|
|||
Deferred issuance costs on debt
|
1,199
|
|
|
1,242
|
|
|
928
|
|
|||
Disposal of plant and equipment, net
|
4,053
|
|
|
1,381
|
|
|
1,492
|
|
|||
Other non-cash activity
|
1,750
|
|
|
758
|
|
|
(1,020
|
)
|
|||
Changes in working capital, net of acquisition
|
21,761
|
|
|
(3,462
|
)
|
|
14,841
|
|
|||
Change in taxes receivable, net
|
(10,573
|
)
|
|
5,142
|
|
|
(13,596
|
)
|
|||
Excess tax benefits from equity-based payment arrangements
|
—
|
|
|
(312
|
)
|
|
(1,433
|
)
|
|||
Funding of qualified pension plans
|
—
|
|
|
—
|
|
|
(3,179
|
)
|
|||
Other, net
|
(1,509
|
)
|
|
(1,375
|
)
|
|
(2,722
|
)
|
|||
Net cash flows from operating activities
|
177,670
|
|
|
172,751
|
|
|
159,675
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Change in short-term investments, net
|
—
|
|
|
250
|
|
|
49,750
|
|
|||
Additions to property, plant and equipment
|
(199,748
|
)
|
|
(155,349
|
)
|
|
(128,902
|
)
|
|||
Acquisition of Manchester Industries, net of cash acquired
|
—
|
|
|
(67,443
|
)
|
|
—
|
|
|||
Proceeds from sale of assets
|
951
|
|
|
36
|
|
|
604
|
|
|||
Net cash flows from investing activities
|
(198,797
|
)
|
|
(222,506
|
)
|
|
(78,548
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Purchase of treasury stock
|
(4,875
|
)
|
|
(65,327
|
)
|
|
(99,990
|
)
|
|||
Borrowings on revolving credit facilities
|
298,308
|
|
|
1,273,959
|
|
|
—
|
|
|||
Repayments of borrowings on revolving credit facilities'
|
(278,308
|
)
|
|
(1,138,959
|
)
|
|
—
|
|
|||
Payments for debt issuance costs
|
—
|
|
|
(1,906
|
)
|
|
—
|
|
|||
Payment of tax withholdings on equity-based payment arrangements
|
(1,127
|
)
|
|
(933
|
)
|
|
(4,152
|
)
|
|||
Excess tax benefits from equity-based payment arrangements
|
—
|
|
|
312
|
|
|
1,433
|
|
|||
Other, net
|
(134
|
)
|
|
—
|
|
|
(139
|
)
|
|||
Net cash flows from financing activities
|
13,864
|
|
|
67,146
|
|
|
(102,848
|
)
|
|||
(Decrease) increase in cash and cash equivalents
|
(7,263
|
)
|
|
17,391
|
|
|
(21,721
|
)
|
|||
Cash and cash equivalents at beginning of period
|
23,001
|
|
|
5,610
|
|
|
27,331
|
|
|||
Cash and cash equivalents at end of period
|
$
|
15,738
|
|
|
$
|
23,001
|
|
|
$
|
5,610
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
Cash paid for interest, net of amounts capitalized
|
$
|
28,085
|
|
|
$
|
26,690
|
|
|
$
|
28,195
|
|
Cash paid for income taxes
|
2,684
|
|
|
17,655
|
|
|
35,849
|
|
|||
Cash received from income tax refunds
|
7,638
|
|
|
11,289
|
|
|
2,533
|
|
|||
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Changes in accrued property, plant and equipment
|
$
|
(1,063
|
)
|
|
$
|
328
|
|
|
$
|
5,202
|
|
Other changes to property, plant and equipment, net
|
4,241
|
|
|
—
|
|
|
—
|
|
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Retained
Earnings
|
|
Treasury Stock
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Stockholders'
Equity
|
|||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||
Balance at December 31, 2014
|
|
24,056
|
|
|
$
|
2
|
|
|
$
|
334,074
|
|
|
$
|
464,324
|
|
|
(4,498
|
)
|
|
$
|
(230,000
|
)
|
|
$
|
(70,863
|
)
|
|
$
|
497,537
|
|
|
Net earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55,983
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55,983
|
|
|||||||
Performance share, restricted stock unit, and stock option awards
|
|
137
|
|
|
—
|
|
|
6,021
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,021
|
|
|||||||
Pension and OPEB, net
of tax of $9,957
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,315
|
|
|
15,315
|
|
|||||||
Purchase of treasury
stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,882
|
)
|
|
(99,990
|
)
|
|
—
|
|
|
(99,990
|
)
|
|||||||
Balance at December 31, 2015
|
|
24,193
|
|
|
$
|
2
|
|
|
$
|
340,095
|
|
|
$
|
520,307
|
|
|
(6,380
|
)
|
|
$
|
(329,990
|
)
|
|
$
|
(55,548
|
)
|
|
$
|
474,866
|
|
|
Net earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49,554
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49,554
|
|
|||||||
Performance share, restricted stock unit, and stock option awards
|
|
30
|
|
|
—
|
|
|
6,985
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,985
|
|
|||||||
Pension and OPEB, net
of tax of $2,521
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,795
|
|
|
3,795
|
|
|||||||
Purchase of treasury
stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,356
|
)
|
|
(65,327
|
)
|
|
—
|
|
|
(65,327
|
)
|
|||||||
Balance at December 31, 2016
|
|
24,223
|
|
|
$
|
2
|
|
|
$
|
347,080
|
|
|
$
|
569,861
|
|
|
(7,736
|
)
|
|
$
|
(395,317
|
)
|
|
$
|
(51,753
|
)
|
24,223,000
|
|
$
|
469,873
|
|
Net earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
97,339
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
97,339
|
|
|||||||
Performance share, restricted stock unit, and stock option awards
|
|
46
|
|
|
—
|
|
|
5,327
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,327
|
|
|||||||
Pension and OPEB,
net of tax of $3,113 |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,770
|
|
|
7,770
|
|
|||||||
Purchase of treasury stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(85
|
)
|
|
(4,875
|
)
|
|
—
|
|
|
(4,875
|
)
|
|||||||
Retirement of treasury
stock
|
|
(7,821
|
)
|
|
—
|
|
|
(351,246
|
)
|
|
(48,946
|
)
|
|
7,821
|
|
|
400,192
|
|
|
—
|
|
|
—
|
|
|||||||
Balance at December 31, 2017
|
|
16,448
|
|
|
$
|
2
|
|
|
$
|
1,161
|
|
|
$
|
618,254
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(43,983
|
)
|
|
$
|
575,434
|
|
(in thousands)
|
Amount
|
|
|
Current assets
|
$
|
22,046
|
|
Property, plant and equipment
|
6,967
|
|
|
Goodwill
|
35,074
|
|
|
Intangible assets
|
25,472
|
|
|
Assets acquired
|
89,559
|
|
|
Current liabilities
|
5,403
|
|
|
Deferred tax liabilities
|
12,491
|
|
|
Liabilities assumed
|
17,894
|
|
|
Net assets acquired
|
$
|
71,665
|
|
|
|
December 31,
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Pulp, paperboard and tissue products
|
|
$
|
165,281
|
|
|
$
|
154,460
|
|
Materials and supplies
|
|
85,987
|
|
|
82,005
|
|
||
Logs, pulpwood, chips and sawdust
|
|
14,775
|
|
|
21,564
|
|
||
|
|
$
|
266,043
|
|
|
$
|
258,029
|
|
|
|
December 31,
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Machinery and equipment
|
|
$
|
2,124,701
|
|
|
$
|
2,000,512
|
|
Buildings and improvements
|
|
340,042
|
|
|
328,251
|
|
||
Land improvements
|
|
49,908
|
|
|
47,844
|
|
||
Office and other equipment
|
|
46,467
|
|
|
40,051
|
|
||
Land
|
|
11,726
|
|
|
7,266
|
|
||
Construction in progress
|
|
114,424
|
|
|
103,429
|
|
||
|
|
$
|
2,687,268
|
|
|
$
|
2,527,353
|
|
Less accumulated depreciation and amortization
|
|
(1,636,286
|
)
|
|
(1,582,025
|
)
|
||
|
|
$
|
1,050,982
|
|
|
$
|
945,328
|
|
|
|
December 31, 2017
|
||||||||||||
(Dollars in thousands, lives in years)
|
|
Weighted Average Useful Life
|
|
Historical
Cost
|
|
Accumulated
Amortization
|
|
Net
Balance
|
||||||
Customer relationships
|
|
9.3
|
|
$
|
62,401
|
|
|
$
|
(34,061
|
)
|
|
$
|
28,340
|
|
Trade names and trademarks
|
|
7.4
|
|
6,786
|
|
|
(3,000
|
)
|
|
3,786
|
|
|||
Non-compete agreements
|
|
5.0
|
|
574
|
|
|
(574
|
)
|
|
—
|
|
|||
Other intangibles
|
|
6.0
|
|
572
|
|
|
(156
|
)
|
|
416
|
|
|||
Total intangible assets
|
|
|
|
$
|
70,333
|
|
|
$
|
(37,791
|
)
|
|
$
|
32,542
|
|
|
|
December 31, 2016
|
||||||||||||
(Dollars in thousands, lives in years)
|
|
Weighted Average Useful Life
|
|
Historical
Cost
|
|
Accumulated
Amortization
|
|
Net
Balance
|
||||||
Customer relationships
|
|
9.3
|
|
$
|
62,401
|
|
|
$
|
(27,364
|
)
|
|
$
|
35,037
|
|
Trade names and trademarks
|
|
7.4
|
|
6,786
|
|
|
(1,972
|
)
|
|
4,814
|
|
|||
Non-compete agreements
|
|
5.0
|
|
574
|
|
|
(512
|
)
|
|
62
|
|
|||
Other Intangibles
|
|
6.0
|
|
572
|
|
|
—
|
|
|
572
|
|
|||
Total intangible assets
|
|
|
|
$
|
70,333
|
|
|
$
|
(29,848
|
)
|
|
$
|
40,485
|
|
Years ending December 31,
|
Amount
|
||
2018
|
$
|
7,801
|
|
2019
|
7,801
|
|
|
2020
|
3,246
|
|
|
2021
|
2,917
|
|
|
2022
|
2,217
|
|
|
Thereafter
|
8,560
|
|
|
Total
|
$
|
32,542
|
|
|
|
For The Years Ended December 31,
|
||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
|
$
|
40,954
|
|
|
$
|
80,666
|
|
|
$
|
92,488
|
|
|
|
For The Years Ended December 31,
|
||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
(16,729
|
)
|
|
$
|
7,434
|
|
|
$
|
15,579
|
|
State
|
|
933
|
|
|
5,351
|
|
|
4,855
|
|
|||
Foreign
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||
Total current
|
|
(15,796
|
)
|
|
12,785
|
|
|
20,424
|
|
|||
Deferred
|
|
|
|
|
|
|
||||||
Federal
|
|
(36,810
|
)
|
|
15,573
|
|
|
13,006
|
|
|||
State
|
|
(3,779
|
)
|
|
2,754
|
|
|
3,075
|
|
|||
Total deferred
|
|
(40,589
|
)
|
|
18,327
|
|
|
16,081
|
|
|||
Income tax (benefit) provision
|
|
$
|
(56,385
|
)
|
|
$
|
31,112
|
|
|
$
|
36,505
|
|
|
|
For The Years Ended December 31,
|
||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Tax at the statutory rate
|
|
$
|
14,334
|
|
|
$
|
28,233
|
|
|
$
|
32,371
|
|
Federal rate change
|
|
(70,055
|
)
|
|
—
|
|
|
—
|
|
|||
State and local taxes, net of federal income tax impact
|
|
(1,201
|
)
|
|
3,046
|
|
|
3,753
|
|
|||
Federal credits and net operating losses
|
|
(3,158
|
)
|
|
(2,850
|
)
|
|
3,593
|
|
|||
Stock compensation
|
|
2,207
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
|
1,488
|
|
|
2,683
|
|
|
(3,212
|
)
|
|||
Income tax provision
|
|
$
|
(56,385
|
)
|
|
$
|
31,112
|
|
|
$
|
36,505
|
|
(In thousands)
|
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Employee benefits
|
|
$
|
3,940
|
|
|
$
|
6,255
|
|
Postretirement employee benefits
|
|
17,132
|
|
|
27,370
|
|
||
Incentive compensation
|
|
5,194
|
|
|
11,356
|
|
||
Inventories
|
|
7,959
|
|
|
8,859
|
|
||
Pensions
|
|
2,516
|
|
|
8,338
|
|
||
State credit carryforwards
|
|
11,752
|
|
|
8,369
|
|
||
State net operating losses
|
|
3,088
|
|
|
1,462
|
|
||
Other
|
|
1,949
|
|
|
3,774
|
|
||
Total deferred tax assets
|
|
$
|
53,530
|
|
|
$
|
75,783
|
|
Valuation allowance
|
|
(3,733
|
)
|
|
(4,407
|
)
|
||
Deferred tax assets, net of valuation allowance
|
|
$
|
49,797
|
|
|
$
|
71,376
|
|
Deferred tax liabilities:
|
|
|
|
|
||||
Plant and equipment
|
|
$
|
(153,885
|
)
|
|
$
|
(206,502
|
)
|
Intangible assets
|
|
(7,577
|
)
|
|
(14,136
|
)
|
||
Total deferred tax liabilities
|
|
(161,462
|
)
|
|
(220,638
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(111,665
|
)
|
|
$
|
(149,262
|
)
|
(In thousands)
|
|
2017
|
|
2016
|
||||
Non-current deferred tax assets
1
|
|
6,863
|
|
|
2,910
|
|
||
Non-current deferred tax liabilities
|
|
(118,528
|
)
|
|
(152,172
|
)
|
||
Net non-current deferred tax liabilities
|
|
(111,665
|
)
|
|
(149,262
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(111,665
|
)
|
|
$
|
(149,262
|
)
|
1
|
Included in "Other assets, net" on our accompanying December 31, 2017 and 2016 Consolidated Balance Sheets.
|
(In thousands)
|
|
Gross
Unrecognized
Tax Benefits,
Excluding
Interest and
Penalties
|
|
Interest
and
Penalties
|
|
Total Gross
Unrecognized
Tax Benefits
|
||||||
Balance at December 31, 2015
|
|
$
|
4,227
|
|
|
$
|
221
|
|
|
$
|
4,448
|
|
Change in prior year tax positions
|
|
619
|
|
|
36
|
|
|
655
|
|
|||
Reductions as a result of a lapse of the applicable statute of limitations
|
|
(234
|
)
|
|
(20
|
)
|
|
(254
|
)
|
|||
Change in current year tax positions
|
|
291
|
|
|
—
|
|
|
291
|
|
|||
Balance at December 31, 2016
|
|
$
|
4,903
|
|
|
$
|
237
|
|
|
$
|
5,140
|
|
Change in prior year tax positions
|
|
(1,149
|
)
|
|
48
|
|
|
(1,101
|
)
|
|||
Change in current year tax positions
|
|
320
|
|
|
—
|
|
|
320
|
|
|||
Balance at December 31, 2017
|
|
$
|
4,074
|
|
|
$
|
285
|
|
|
$
|
4,359
|
|
|
|
December 31,
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Trade accounts payable
|
|
$
|
169,293
|
|
|
$
|
128,106
|
|
Accrued wages, salaries and employee benefits
|
|
41,979
|
|
|
49,871
|
|
||
Accrued interest
|
|
12,723
|
|
|
12,149
|
|
||
Accrued discounts and allowances
|
|
7,283
|
|
|
10,291
|
|
||
Accrued taxes other than income taxes payable
|
|
6,907
|
|
|
6,946
|
|
||
Accrued utilities
|
|
6,759
|
|
|
6,712
|
|
||
Other
|
|
11,677
|
|
|
9,624
|
|
||
|
|
$
|
256,621
|
|
|
$
|
223,699
|
|
|
|
December 31,
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Long-term lease obligations, net of current portion
|
|
$
|
26,460
|
|
|
$
|
23,152
|
|
Deferred proceeds
|
|
5,576
|
|
|
9,013
|
|
||
Deferred compensation
|
|
5,023
|
|
|
7,219
|
|
||
Other
|
|
6,216
|
|
|
2,392
|
|
||
|
|
$
|
43,275
|
|
|
$
|
41,776
|
|
(In thousands)
|
Pension and Other Post Retirement Employee Benefit Plan Adjustments
|
||
Balance at December 31, 2015
|
$
|
(55,548
|
)
|
Other comprehensive income before reclassifications
2
|
2,495
|
|
|
Amounts reclassified from accumulated other comprehensive loss
|
1,300
|
|
|
Other comprehensive income, net of tax
1
|
3,795
|
|
|
Balance at December 31, 2016
|
$
|
(51,753
|
)
|
Other comprehensive income before reclassifications
|
6,745
|
|
|
Amounts reclassified from accumulated other comprehensive loss
|
1,025
|
|
|
Other comprehensive income, net of tax
1
|
7,770
|
|
|
Balance at December 31, 2017
|
$
|
(43,983
|
)
|
1
|
For the year ended
December 31, 2017
, net periodic costs associated with our pension and other postretirement employee benefit, or OPEB, plans included in other comprehensive loss and reclassified from accumulated other comprehensive loss, or AOCL, included
$9.2 million
of net gain on plan assets,
$3.3 million
of actuarial loss amortization, and
$1.5 million
of prior service credit amortization, less total tax of
$3.1 million
. For the year ended
December 31, 2016
, net periodic costs associated with our pension and OPEB plans included in other comprehensive income and reclassified from AOCL included
$0.6 million
of net gain on plan assets,
$3.9 million
of actuarial loss amortization, and
$1.7 million
of prior service credit amortization, less total tax of
$1.2 million
. These accumulated other comprehensive loss components are included in the computation of net periodic pension and OPEB costs in Note 13, “Savings, Pension and Other Postretirement Employee Benefit Plans.”
|
2
|
Included in "Other comprehensive income before reclassifications" above for the twelve months ended
December 31, 2016
is settlement expense of
$3.5 million
associated with the remeasurement of our salaried pension plan, which is discussed further in Note 13, “Savings, Pension and Other Postretirement Employee Benefit Plans.” The settlement expense is net of tax totaling
$1.4 million
.
|
|
|
Pension Benefit Plans
|
|
Other Postretirement
Employee Benefit Plans
|
||||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Benefit obligation at beginning of year
|
|
$
|
304,388
|
|
|
$
|
318,444
|
|
|
$
|
69,163
|
|
|
$
|
71,672
|
|
Service cost
|
|
2,069
|
|
|
1,562
|
|
|
163
|
|
|
249
|
|
||||
Interest cost
|
|
13,149
|
|
|
14,072
|
|
|
2,745
|
|
|
3,075
|
|
||||
Plan settlements
|
|
—
|
|
|
(10,629
|
)
|
|
—
|
|
|
—
|
|
||||
Actuarial losses (gains)
|
|
19,130
|
|
|
6,225
|
|
|
(1,254
|
)
|
|
816
|
|
||||
Benefits paid
|
|
(20,922
|
)
|
|
(25,286
|
)
|
|
(5,689
|
)
|
|
(6,649
|
)
|
||||
Benefit obligation at end of year
|
|
317,814
|
|
|
304,388
|
|
|
65,128
|
|
|
69,163
|
|
||||
Fair value of plan assets at beginning of year
|
|
285,638
|
|
|
294,076
|
|
|
20
|
|
|
20
|
|
||||
Actual return on plan assets
|
|
45,796
|
|
|
27,056
|
|
|
—
|
|
|
—
|
|
||||
Employer contribution
|
|
454
|
|
|
421
|
|
|
5,689
|
|
|
6,649
|
|
||||
Plan settlements
|
|
—
|
|
|
(10,629
|
)
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
|
(20,922
|
)
|
|
(25,286
|
)
|
|
(5,689
|
)
|
|
(6,649
|
)
|
||||
Fair value of plan assets at end of year
|
|
310,966
|
|
|
285,638
|
|
|
20
|
|
|
20
|
|
||||
Funded status at end of year
|
|
$
|
(6,848
|
)
|
|
$
|
(18,750
|
)
|
|
$
|
(65,108
|
)
|
|
$
|
(69,143
|
)
|
|
|
Pension Benefit Plans
|
|
Other Postretirement
Employee Benefit Plans
|
||||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Non-current assets
|
|
$
|
8,144
|
|
|
$
|
1,740
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
|
(441
|
)
|
|
(397
|
)
|
|
(7,190
|
)
|
|
(7,424
|
)
|
||||
Non-current liabilities
|
|
(14,551
|
)
|
|
(20,093
|
)
|
|
(57,918
|
)
|
|
(61,719
|
)
|
||||
Net amount recognized
|
|
$
|
(6,848
|
)
|
|
$
|
(18,750
|
)
|
|
$
|
(65,108
|
)
|
|
$
|
(69,143
|
)
|
|
|
Pension Benefit Plans
|
|
Other Postretirement
Employee Benefit Plans
|
||||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net loss (gain)
|
|
$
|
99,865
|
|
|
$
|
117,640
|
|
|
$
|
(15,541
|
)
|
|
$
|
(20,906
|
)
|
Prior service cost (credit)
|
|
—
|
|
|
8
|
|
|
(1,676
|
)
|
|
(3,211
|
)
|
||||
Net amount recognized
|
|
$
|
99,865
|
|
|
$
|
117,648
|
|
|
$
|
(17,217
|
)
|
|
$
|
(24,117
|
)
|
(In thousands)
|
|
2017
|
|
2016
|
||||
Projected benefit obligation
|
|
$
|
178,452
|
|
|
$
|
170,716
|
|
Accumulated benefit obligation
|
|
178,452
|
|
|
170,716
|
|
||
Fair value of plan assets
|
|
163,460
|
|
|
150,226
|
|
|
|
Pension Benefit Plans
|
|
Other Postretirement
Employee Benefit Plans
|
||||||||||||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Service cost
|
|
$
|
2,069
|
|
|
$
|
1,562
|
|
|
$
|
1,244
|
|
|
$
|
163
|
|
|
$
|
249
|
|
|
$
|
363
|
|
Interest cost
|
|
13,149
|
|
|
14,072
|
|
|
13,931
|
|
|
2,745
|
|
|
3,075
|
|
|
3,881
|
|
||||||
Expected return on plan assets
|
|
(18,765
|
)
|
|
(19,389
|
)
|
|
(20,117
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Amortization of prior service cost (credit)
|
|
8
|
|
|
22
|
|
|
73
|
|
|
(1,535
|
)
|
|
(1,712
|
)
|
|
(2,178
|
)
|
||||||
Amortization of actuarial loss (gain)
|
|
9,874
|
|
|
11,463
|
|
|
12,619
|
|
|
(6,618
|
)
|
|
(7,566
|
)
|
|
—
|
|
||||||
Settlement
|
|
—
|
|
|
3,482
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic cost
|
|
$
|
6,335
|
|
|
$
|
11,212
|
|
|
$
|
7,750
|
|
|
$
|
(5,246
|
)
|
|
$
|
(5,955
|
)
|
|
$
|
2,065
|
|
|
|
Pension Benefit Plans
|
|
Other Postretirement
Employee Benefit Plans
|
||||||||||||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Net (gain) loss
|
|
$
|
(7,901
|
)
|
|
$
|
(1,445
|
)
|
|
$
|
15,942
|
|
|
$
|
(1,253
|
)
|
|
$
|
818
|
|
|
$
|
(30,700
|
)
|
Amortization of prior service (cost) credit
|
|
(8
|
)
|
|
(22
|
)
|
|
(73
|
)
|
|
1,535
|
|
|
1,712
|
|
|
2,178
|
|
||||||
Amortization of actuarial (loss) gain
|
|
(9,874
|
)
|
|
(11,463
|
)
|
|
(12,619
|
)
|
|
6,618
|
|
|
7,566
|
|
|
—
|
|
||||||
Settlement
|
|
—
|
|
|
(3,482
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total recognized in other comprehensive
(income) loss
|
|
$
|
(17,783
|
)
|
|
$
|
(16,412
|
)
|
|
$
|
3,250
|
|
|
$
|
6,900
|
|
|
$
|
10,096
|
|
|
$
|
(28,522
|
)
|
Total recognized in net periodic cost and
other comprehensive (income) loss
|
|
$
|
(11,448
|
)
|
|
$
|
(5,200
|
)
|
|
$
|
11,000
|
|
|
$
|
1,654
|
|
|
$
|
4,141
|
|
|
$
|
(26,457
|
)
|
|
|
Pension Benefit Plans
|
|
Other Postretirement
Employee Benefit Plans
|
||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||
Discount rate
|
|
3.90
|
%
|
|
4.45
|
%
|
|
4.70
|
%
|
|
3.95
|
%
|
|
4.30
|
%
|
|
4.50
|
%
|
|
|
Pension Benefit Plans
|
|
Other Postretirement
Employee Benefit Plans
|
||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||
Discount rate
|
|
4.45
|
%
|
|
4.70
|
%
|
|
4.25
|
%
|
|
4.30
|
%
|
|
4.50
|
%
|
|
4.15
|
%
|
Expected return on plan assets
|
|
6.75
|
|
|
6.75
|
|
|
7.00
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(In thousands)
|
|
1% Increase
|
|
|
1% Decrease
|
|
||
Effect on total of service and interest cost components
|
|
$
|
193
|
|
|
$
|
(168
|
)
|
Effect on postretirement employee benefit obligation
|
|
4,150
|
|
|
(3,614
|
)
|
Level 1
|
|
Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the plans have the ability to access.
|
|
|
|
Level 2
|
|
Inputs to the valuation methodology include:
|
|
|
▪
Quoted prices for similar assets or liabilities in active markets;
▪
Quoted prices for identical or similar assets or liabilities in inactive markets;
▪
Inputs other than quoted prices that are observable for the asset or liability; and
▪
Inputs that are derived principally from or corroborated by observable market data by correlation or other means
|
|
|
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.
|
|
|
|
Level 3
|
|
Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
|
|
December 31, 2017
|
||||||||||
(In thousands)
|
|
Level 1
|
|
Investments measured at net asset value
|
|
Total
|
||||||
Cash and cash equivalents
|
|
$
|
2,010
|
|
|
$
|
—
|
|
|
$
|
2,010
|
|
Common and collective trust:
|
|
|
|
|
|
|
||||||
Collective investment funds
|
|
—
|
|
|
308,956
|
|
|
308,956
|
|
|||
Total investments at fair value
|
|
$
|
2,010
|
|
|
$
|
308,956
|
|
|
$
|
310,966
|
|
|
|
December 31, 2016
|
||||||||||
(In thousands)
|
|
Level 1
|
|
Investments measured at net asset value
|
|
Total
|
||||||
Cash and cash equivalents
|
|
$
|
2,002
|
|
|
$
|
—
|
|
|
$
|
2,002
|
|
Common and collective trusts:
|
|
|
|
|
|
|
||||||
Collective investment funds
|
|
—
|
|
|
283,636
|
|
|
283,636
|
|
|||
Total investments at fair value
|
|
$
|
2,002
|
|
|
$
|
283,636
|
|
|
$
|
285,638
|
|
▪
|
Assets are diversified among various asset classes, such as domestic equities, international equities, fixed income and cash. The long-term asset allocation ranges are as follows:
|
Domestic equities
|
|
|
14%-22%
|
|
International equities, including emerging markets
|
|
|
13%-22%
|
|
Corporate bonds
|
|
|
50%-70%
|
|
Liquid reserves
|
|
|
0%-5%
|
|
•
|
Assets were managed by professional investment managers and could be invested in separately managed accounts or commingled funds.
|
▪
|
Assets were not invested in securities rated below BBB- by S&P or Baa3 by Moody’s.
|
(In thousands)
|
|
Pension Benefit Plans
|
|
Other
Postretirement
Employee
Benefit Plans
|
||
2018
|
|
20,210
|
|
|
7,210
|
|
2019
|
|
20,372
|
|
|
6,700
|
|
2020
|
|
20,338
|
|
|
6,224
|
|
2021
|
|
20,278
|
|
|
5,182
|
|
2022
|
|
20,257
|
|
|
4,639
|
|
2023-2027
|
|
99,994
|
|
|
18,702
|
|
▪
|
Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.
|
▪
|
If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. In 2013, two large employers withdrew from PIUMPF and in 2015, the largest employer in PIUMPF also withdrew. Additional employers have continued to withdraw, or announced plans to withdraw, from the fund in 2016 and 2017, including the second largest remaining employer at the beginning of 2018. We believe that we are now the largest contributing employer.
|
▪
|
Further withdrawals by contributing employers could cause a “mass withdrawal” from, or effectively a termination of, PIUMPF, or alternatively we could elect to withdraw.
|
▪
|
Under applicable federal law, any employer contributing to a multiemployer pension plan that completely ceases participating in the plan while it is underfunded is subject to an assessment of such employer's allocable share of the aggregate unfunded vested benefits of the plan. In certain circumstances, an employer can also be assessed a withdrawal liability for a partial withdrawal from a multiemployer pension plan. Based on our records as of December 31, 2017, as well as information provided by PIUMPF and reviewed by our actuarial consultant, we estimate the aggregate pre-tax liability that we would have incurred if we had completely withdrawn from PIUMPF in 2017 would have been in excess of
$78 million
. However, the exact amount of potential exposure could be higher or lower than the estimate, depending on, among other things, the nature and timing of any triggering events and the funded status of PIUMPF at that time. A withdrawal liability is recorded for accounting purposes when withdrawal is probable and the amount of the withdrawal obligation is reasonably estimable.
|
Pension
Fund
|
|
EIN
|
|
Plan
Number
|
|
PPA Zone Status
1
|
|
FIP/RP Status Pending/
Implemented
|
|
Contributions
(in thousands)
|
|
Surcharge
Imposed
|
|
Expiration
Date
of Collective
Bargaining
Agreement
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2015
|
|
|||||||||||||||||
IAM NPF
|
|
51-6031295
|
|
002
|
|
Green
|
|
Green
|
|
N/A
|
|
$
|
333
|
|
|
$
|
335
|
|
|
$
|
329
|
|
|
No
|
|
5/31/2018
|
PIUMPF
|
|
11-6166763
|
|
001
|
|
Red
|
|
Red
|
|
Implemented
|
|
5,815
|
|
|
5,679
|
|
|
5,631
|
|
|
No
|
|
8/31/2017
|
|||
|
|
|
|
|
|
|
|
|
Total Contributions:
|
|
$
|
6,148
|
|
|
$
|
6,014
|
|
|
$
|
5,960
|
|
|
|
|
|
1
|
PIUMPF has been certified as in "Critical and Declining Status" for 2017 and 2016, under the provisions of the Multiemployer Pension Plan Reform Act of 2014.
|
|
|
December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Basic average common shares outstanding
1
|
|
16,464,286
|
|
|
17,000,599
|
|
|
18,762,451
|
|
|||
Incremental shares due to:
|
|
|
|
|
|
|
||||||
Restricted stock units
|
|
21,522
|
|
|
21,668
|
|
|
33,128
|
|
|||
Performance shares
|
|
45,252
|
|
|
76,525
|
|
|
24,717
|
|
|||
Stock options
|
|
24,866
|
|
|
7,648
|
|
|
—
|
|
|||
Diluted average common shares outstanding
|
|
16,555,926
|
|
|
17,106,440
|
|
|
18,820,296
|
|
|||
Basic net earnings per common share
|
|
$
|
5.91
|
|
|
$
|
2.91
|
|
|
$
|
2.98
|
|
Diluted net earnings per common share
|
|
5.88
|
|
|
2.90
|
|
|
2.97
|
|
|||
Anti-dilutive shares excluded from calculation
|
|
499,348
|
|
|
220,037
|
|
|
331,168
|
|
1
|
Basic average common shares outstanding include restricted stock awards that are fully vested, but are deferred for future issuance. See Note 15, "Equity-Based Compensation Plans" for further discussion.
|
(In thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Restricted stock units
|
|
$
|
1,618
|
|
|
$
|
1,381
|
|
|
$
|
2,116
|
|
Performance shares
|
|
2,283
|
|
|
3,311
|
|
|
4,408
|
|
|||
Stock options
|
|
2,552
|
|
|
2,913
|
|
|
2,106
|
|
|||
Total employee equity-based compensation
|
|
$
|
6,453
|
|
|
$
|
7,605
|
|
|
$
|
8,630
|
|
Related tax benefit
|
|
$
|
2,149
|
|
|
$
|
2,767
|
|
|
$
|
3,193
|
|
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||||||||
Unvested shares outstanding at
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
January 1
|
|
54,460
|
|
|
$
|
47.16
|
|
|
46,029
|
|
|
$
|
60.17
|
|
|
93,254
|
|
|
$
|
47.95
|
|
Granted
|
|
66,774
|
|
|
56.45
|
|
|
44,627
|
|
|
39.10
|
|
|
23,148
|
|
|
62.02
|
|
|||
Vested
|
|
(17,531
|
)
|
|
62.75
|
|
|
(29,338
|
)
|
|
55.16
|
|
|
(65,217
|
)
|
|
43.86
|
|
|||
Forfeited
|
|
(9,232
|
)
|
|
53.52
|
|
|
(6,858
|
)
|
|
47.80
|
|
|
(5,156
|
)
|
|
58.58
|
|
|||
Unvested shares outstanding at
December 31
|
|
94,471
|
|
|
50.22
|
|
|
54,460
|
|
|
47.16
|
|
|
46,029
|
|
|
60.17
|
|
|||
Aggregate intrinsic value (in
thousands)
|
|
|
|
$
|
4,289
|
|
|
|
|
$
|
3,570
|
|
|
|
|
$
|
2,096
|
|
Closing price of stock on date of grant
|
$
|
56.75
|
|
Risk free rate
|
1.42
|
%
|
|
Measurement period
|
3 years
|
|
|
Volatility
|
35
|
%
|
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||||||||
Outstanding share awards at
January 1
|
|
175,683
|
|
|
$
|
62.26
|
|
|
92,563
|
|
|
$
|
84.18
|
|
|
300,864
|
|
|
$
|
59.77
|
|
Granted
|
|
33,907
|
|
|
58.58
|
|
|
93,397
|
|
|
39.70
|
|
|
47,513
|
|
|
62.05
|
|
|||
Settled
|
|
(87,491
|
)
|
|
84.65
|
|
|
—
|
|
|
—
|
|
|
(245,525
|
)
|
|
50.43
|
|
|||
Forfeited
|
|
(4,847
|
)
|
|
47.61
|
|
|
(10,277
|
)
|
|
54.55
|
|
|
(10,289
|
)
|
|
73.61
|
|
|||
Outstanding share awards at
December 31
|
|
117,252
|
|
|
45.10
|
|
|
175,683
|
|
|
62.26
|
|
|
92,563
|
|
|
84.18
|
|
|||
Aggregate intrinsic value (in
thousands)
|
|
|
|
$
|
5,323
|
|
|
|
|
$
|
11,516
|
|
|
|
|
$
|
4,214
|
|
Volatility
|
30
|
%
|
Risk-free interest rate
|
2.05
|
%
|
Expected life-years
|
6.0
|
|
|
|
Shares
|
|
Weighted Average Exercise Price
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Contractual Life (Years)
|
|
Aggregate Intrinsic Value
|
||||||||
Outstanding options at
December 31, 2014 |
|
150,580
|
|
|
$
|
66.84
|
|
|
|
|
|
|
$
|
258
|
|
|||
Granted
|
|
142,542
|
|
|
61.93
|
|
|
$
|
20.82
|
|
|
|
|
|
||||
Forfeited
|
|
(15,429
|
)
|
|
64.12
|
|
|
|
|
|
|
|
||||||
Outstanding options at
December 31, 2015 |
|
277,693
|
|
|
$
|
64.47
|
|
|
|
|
|
|
$
|
—
|
|
|||
Granted
|
|
280,191
|
|
|
38.86
|
|
|
14.42
|
|
|
|
|
|
|||||
Forfeited
|
|
(30,830
|
)
|
|
47.79
|
|
|
|
|
|
|
|
||||||
Outstanding options at
December 31, 2016
|
|
527,054
|
|
|
$
|
51.83
|
|
|
|
|
|
|
$
|
7,232
|
|
|||
Granted
|
|
158,484
|
|
|
56.45
|
|
|
18.82
|
|
|
|
|
|
|||||
Forfeited
|
|
(22,306
|
)
|
|
50.74
|
|
|
|
|
|
|
|
||||||
Expired
|
|
(5,913
|
)
|
|
66.97
|
|
|
|
|
|
|
|
||||||
Outstanding options at
December 31, 2017
|
2,017
|
|
657,319
|
|
|
$
|
52.84
|
|
|
|
|
7.4
|
|
$
|
—
|
|
|
|
Shares
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Life (Years)
|
|
Aggregate Intrinsic Value
|
|||||
Exercisable options at January 1, 2017
|
|
137,860
|
|
|
$
|
66.85
|
|
|
|
|
|
||
Expired
|
|
(5,913
|
)
|
|
66.97
|
|
|
|
|
|
|||
Exercisable options at December 31, 2017
|
|
131,947
|
|
|
$
|
66.85
|
|
|
6.0
|
|
$
|
—
|
|
|
|
December 31,
|
||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||
(In thousands)
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Cash and cash equivalents (Level 1)
|
|
$
|
15,738
|
|
|
$
|
15,738
|
|
|
$
|
23,001
|
|
|
$
|
23,001
|
|
Borrowings under revolving credit facilities (Level 2)
|
|
155,000
|
|
|
154,882
|
|
|
135,000
|
|
|
135,000
|
|
||||
Long-term debt (Level 2)
|
|
575,000
|
|
|
569,250
|
|
|
575,000
|
|
|
567,875
|
|
(In thousands)
|
|
Capital
|
|
Operating
|
||||
2018
|
|
$
|
2,649
|
|
|
$
|
12,074
|
|
2019
|
|
2,697
|
|
|
9,692
|
|
||
2020
|
|
2,662
|
|
|
8,808
|
|
||
2021
|
|
2,710
|
|
|
7,764
|
|
||
2022
|
|
2,643
|
|
|
7,416
|
|
||
Thereafter
|
|
24,179
|
|
|
29,586
|
|
||
Total future minimum lease payments
|
|
$
|
37,540
|
|
|
$
|
75,340
|
|
Less interest portion
|
|
(15,442
|
)
|
|
|
|||
Present value of future minimum lease payments
|
|
$
|
22,098
|
|
|
|
(In thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Segment net sales:
|
|
|
|
|
|
|
||||||
Consumer Products
|
|
$
|
941,907
|
|
|
$
|
988,380
|
|
|
$
|
959,894
|
|
Pulp and Paperboard
|
|
788,501
|
|
|
746,383
|
|
|
792,507
|
|
|||
Total segment net sales
|
|
$
|
1,730,408
|
|
|
$
|
1,734,763
|
|
|
$
|
1,752,401
|
|
Operating income:
|
|
|
|
|
|
|
||||||
Consumer Products
1
|
|
$
|
28,616
|
|
|
$
|
67,916
|
|
|
$
|
55,704
|
|
Pulp and Paperboard
|
|
98,508
|
|
|
112,732
|
|
|
120,861
|
|
|||
|
|
127,124
|
|
|
180,648
|
|
|
176,565
|
|
|||
Corporate
2
|
|
(54,796
|
)
|
|
(69,331
|
)
|
|
(52,895
|
)
|
|||
Income from operations
|
|
$
|
72,328
|
|
|
$
|
111,317
|
|
|
$
|
123,670
|
|
Depreciation and amortization:
|
|
|
|
|
|
|
||||||
Consumer Products
3
|
|
$
|
65,007
|
|
|
$
|
59,375
|
|
|
$
|
54,595
|
|
Pulp and Paperboard
|
|
34,474
|
|
|
26,741
|
|
|
27,204
|
|
|||
Corporate
|
|
5,509
|
|
|
4,974
|
|
|
2,933
|
|
|||
Total depreciation and amortization
|
|
$
|
104,990
|
|
|
$
|
91,090
|
|
|
$
|
84,732
|
|
Assets:
|
|
|
|
|
|
|
||||||
Consumer Products
|
|
$
|
1,069,876
|
|
|
$
|
1,031,563
|
|
|
$
|
1,046,170
|
|
Pulp and Paperboard
|
|
645,353
|
|
|
586,687
|
|
|
423,694
|
|
|||
|
|
1,715,229
|
|
|
1,618,250
|
|
|
1,469,864
|
|
|||
Corporate
|
|
87,023
|
|
|
66,092
|
|
|
57,505
|
|
|||
Total assets
|
|
$
|
1,802,252
|
|
|
$
|
1,684,342
|
|
|
$
|
1,527,369
|
|
Capital expenditures:
|
|
|
|
|
|
|
||||||
Consumer Products
|
|
$
|
112,597
|
|
|
$
|
47,079
|
|
|
$
|
55,594
|
|
Pulp and Paperboard
|
|
74,616
|
|
|
104,113
|
|
|
67,929
|
|
|||
|
|
187,213
|
|
|
151,192
|
|
|
123,523
|
|
|||
Corporate
|
|
11,472
|
|
|
4,485
|
|
|
10,581
|
|
|||
Total capital expenditures
|
|
$
|
198,685
|
|
|
$
|
155,677
|
|
|
$
|
134,104
|
|
1
|
Included in Consumer Products operating income are costs associated with the March 31, 2017 Oklahoma City facility closure. For the twelve months ended December 31, 2017, these costs include
$4.3 million
of loss on the write-down of assets to their held for sale value and
$3.2 million
of expenses associated with the execution of a sublease for the facility. For the
twelve months ended
December 31, 2016
and 2015, Consumer Products operating income includes gains on divested assets of
$1.8 million
and
$1.3 million
, respectively.
|
2
|
Corporate expenses for 2016 include
$2.7 million
of expenses associated with the acquisition of Manchester Industries. Operating results subsequent to the acquisition of Manchester are included in the Pulp and Paperboard segment. Corporate expenses for 2016 also include a
$3.5 million
settlement accounting charge associated with a pension lump sum buyout for term-vested participants.
|
3
|
Depreciation and amortization expense for the Consumer Products segment for the twelve months ended
December 31, 2017
and 2016 includes accelerated depreciation of
$3.7 million
and
$1.3 million
, respectively, associated with the Oklahoma City facility closure.
|
(In thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
|
$
|
1,650,066
|
|
|
$
|
1,663,231
|
|
|
$
|
1,653,208
|
|
Japan
|
|
48,604
|
|
|
44,970
|
|
|
59,463
|
|
|||
Canada
|
|
12,106
|
|
|
6,831
|
|
|
6,896
|
|
|||
Korea
|
|
7,124
|
|
|
5,260
|
|
|
10,016
|
|
|||
Australia
|
|
4,255
|
|
|
4,790
|
|
|
5,578
|
|
|||
Other foreign countries
|
|
8,253
|
|
|
9,681
|
|
|
17,240
|
|
|||
Total net sales
|
|
$
|
1,730,408
|
|
|
$
|
1,734,763
|
|
|
$
|
1,752,401
|
|
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
(In thousands—
except per-share
amounts)
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||||||||||
Net sales
|
|
$
|
437,525
|
|
|
$
|
437,204
|
|
|
$
|
429,663
|
|
|
$
|
436,671
|
|
|
$
|
426,504
|
|
|
$
|
435,320
|
|
|
$
|
436,716
|
|
|
$
|
425,568
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cost of sales
|
|
(387,030
|
)
|
|
(368,647
|
)
|
|
(380,733
|
)
|
|
(361,851
|
)
|
|
(386,581
|
)
|
|
(396,605
|
)
|
|
(375,277
|
)
|
|
(368,524
|
)
|
||||||||
Selling, general and
administrative
expenses
|
|
(29,937
|
)
|
|
(30,795
|
)
|
|
(29,265
|
)
|
|
(34,655
|
)
|
|
(34,472
|
)
|
|
(29,435
|
)
|
|
(34,785
|
)
|
|
(32,934
|
)
|
||||||||
Total operating
costs and
expenses
|
|
(416,967
|
)
|
|
(399,442
|
)
|
|
(409,998
|
)
|
|
(396,506
|
)
|
|
(421,053
|
)
|
|
(426,040
|
)
|
|
(410,062
|
)
|
|
(401,458
|
)
|
||||||||
Income from
operations
|
|
20,558
|
|
|
37,762
|
|
|
19,665
|
|
|
40,165
|
|
|
5,451
|
|
|
9,280
|
|
|
26,654
|
|
|
24,110
|
|
||||||||
Net earnings
|
|
$
|
7,515
|
|
|
$
|
18,446
|
|
|
$
|
8,037
|
|
|
$
|
20,864
|
|
|
$
|
863
|
|
|
$
|
901
|
|
|
$
|
80,924
|
|
|
$
|
9,343
|
|
Net earnings
per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
|
$
|
0.46
|
|
|
$
|
1.05
|
|
|
$
|
0.49
|
|
|
$
|
1.22
|
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
4.92
|
|
|
$
|
0.56
|
|
Diluted
|
|
0.45
|
|
|
1.05
|
|
|
0.48
|
|
|
1.21
|
|
|
0.05
|
|
|
0.05
|
|
|
4.88
|
|
|
0.56
|
|
(In thousands)
|
Issuer
|
|
Guarantor
Subsidiaries |
|
Eliminations
|
|
Total
|
||||||||
Net sales
|
$
|
1,707,283
|
|
|
$
|
242,222
|
|
|
$
|
(219,097
|
)
|
|
$
|
1,730,408
|
|
Cost and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
(1,524,925
|
)
|
|
(219,931
|
)
|
|
215,235
|
|
|
(1,529,621
|
)
|
||||
Selling, general and administrative expenses
|
(97,989
|
)
|
|
(30,470
|
)
|
|
—
|
|
|
(128,459
|
)
|
||||
Total operating costs and expenses
|
(1,622,914
|
)
|
|
(250,401
|
)
|
|
215,235
|
|
|
(1,658,080
|
)
|
||||
Income (loss) from operations
|
84,369
|
|
|
(8,179
|
)
|
|
(3,862
|
)
|
|
72,328
|
|
||||
Interest expense, net
|
(30,820
|
)
|
|
(554
|
)
|
|
—
|
|
|
(31,374
|
)
|
||||
Earnings (loss) before income taxes
|
53,549
|
|
|
(8,733
|
)
|
|
(3,862
|
)
|
|
40,954
|
|
||||
Income tax benefit
|
34,250
|
|
|
20,644
|
|
|
1,491
|
|
|
56,385
|
|
||||
Equity in earnings of subsidiary
|
11,911
|
|
|
—
|
|
|
(11,911
|
)
|
|
—
|
|
||||
Net earnings
|
$
|
99,710
|
|
|
$
|
11,911
|
|
|
$
|
(14,282
|
)
|
|
$
|
97,339
|
|
Other comprehensive income, net of tax
|
7,770
|
|
|
—
|
|
|
—
|
|
|
7,770
|
|
||||
Comprehensive income
|
$
|
107,480
|
|
|
$
|
11,911
|
|
|
$
|
(14,282
|
)
|
|
$
|
105,109
|
|
(In thousands)
|
Issuer
|
|
Guarantor
Subsidiaries |
|
Eliminations
|
|
Total
|
||||||||
Net sales
|
$
|
1,685,327
|
|
|
$
|
287,952
|
|
|
$
|
(238,516
|
)
|
|
$
|
1,734,763
|
|
Cost and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
(1,468,691
|
)
|
|
(263,577
|
)
|
|
236,641
|
|
|
(1,495,627
|
)
|
||||
Selling, general and administrative expenses
|
(113,766
|
)
|
|
(14,053
|
)
|
|
—
|
|
|
(127,819
|
)
|
||||
Total operating costs and expenses
|
(1,582,457
|
)
|
|
(277,630
|
)
|
|
236,641
|
|
|
(1,623,446
|
)
|
||||
Income from operations
|
102,870
|
|
|
10,322
|
|
|
(1,875
|
)
|
|
111,317
|
|
||||
Interest expense, net
|
(30,462
|
)
|
|
(189
|
)
|
|
—
|
|
|
(30,651
|
)
|
||||
Earnings before income taxes
|
72,408
|
|
|
10,133
|
|
|
(1,875
|
)
|
|
80,666
|
|
||||
Income tax provision
|
(26,966
|
)
|
|
(4,802
|
)
|
|
656
|
|
|
(31,112
|
)
|
||||
Equity in earnings of subsidiary
|
5,331
|
|
|
—
|
|
|
(5,331
|
)
|
|
—
|
|
||||
Net earnings
|
$
|
50,773
|
|
|
$
|
5,331
|
|
|
$
|
(6,550
|
)
|
|
$
|
49,554
|
|
Other comprehensive income, net of tax
|
3,795
|
|
|
—
|
|
|
—
|
|
|
3,795
|
|
||||
Comprehensive income
|
$
|
54,568
|
|
|
$
|
5,331
|
|
|
$
|
(6,550
|
)
|
|
$
|
53,349
|
|
(In thousands)
|
Issuer
|
|
Guarantor
Subsidiaries |
|
Eliminations
|
|
Total
|
||||||||
Net sales
|
$
|
1,683,890
|
|
|
$
|
291,270
|
|
|
$
|
(222,759
|
)
|
|
$
|
1,752,401
|
|
Cost and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
(1,458,121
|
)
|
|
(277,487
|
)
|
|
222,759
|
|
|
(1,512,849
|
)
|
||||
Selling, general and administrative expenses
|
(108,414
|
)
|
|
(7,468
|
)
|
|
—
|
|
|
(115,882
|
)
|
||||
Total operating costs and expenses
|
(1,566,535
|
)
|
|
(284,955
|
)
|
|
222,759
|
|
|
(1,628,731
|
)
|
||||
Income from operations
|
117,355
|
|
|
6,315
|
|
|
—
|
|
|
123,670
|
|
||||
Interest expense, net
|
(31,067
|
)
|
|
(115
|
)
|
|
—
|
|
|
(31,182
|
)
|
||||
Earnings before income taxes
|
86,288
|
|
|
6,200
|
|
|
—
|
|
|
92,488
|
|
||||
Income tax provision
|
(32,371
|
)
|
|
(3,724
|
)
|
|
(410
|
)
|
|
(36,505
|
)
|
||||
Equity in earnings of subsidiary
|
2,476
|
|
|
—
|
|
|
(2,476
|
)
|
|
—
|
|
||||
Net earnings
|
$
|
56,393
|
|
|
$
|
2,476
|
|
|
$
|
(2,886
|
)
|
|
$
|
55,983
|
|
Other comprehensive income, net of tax
|
15,315
|
|
|
—
|
|
|
—
|
|
|
15,315
|
|
||||
Comprehensive income
|
$
|
71,708
|
|
|
$
|
2,476
|
|
|
$
|
(2,886
|
)
|
|
$
|
71,298
|
|
(In thousands)
|
Issuer
|
|
Guarantor
Subsidiaries
|
Eliminations
|
|
Total
|
||||||||
ASSETS
|
|
|
|
|
|
|
||||||||
Current assets:
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
15,738
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
15,738
|
|
Receivables, net
|
125,001
|
|
|
17,064
|
|
—
|
|
|
142,065
|
|
||||
Taxes receivable
|
20,242
|
|
|
40
|
|
—
|
|
|
20,282
|
|
||||
Inventories
|
228,311
|
|
|
41,594
|
|
(3,862
|
)
|
|
266,043
|
|
||||
Other current assets
|
8,587
|
|
|
74
|
|
—
|
|
|
8,661
|
|
||||
Total current assets
|
397,879
|
|
|
58,772
|
|
(3,862
|
)
|
|
452,789
|
|
||||
Property, plant and equipment, net
|
936,659
|
|
|
114,323
|
|
—
|
|
|
1,050,982
|
|
||||
Goodwill
|
244,161
|
|
|
—
|
|
—
|
|
|
244,161
|
|
||||
Intangible assets, net
|
2,089
|
|
|
30,453
|
|
—
|
|
|
32,542
|
|
||||
Intercompany receivable (payable)
|
(2,807
|
)
|
|
(1,055
|
)
|
3,862
|
|
|
—
|
|
||||
Investment in subsidiary
|
157,000
|
|
|
—
|
|
(157,000
|
)
|
|
—
|
|
||||
Other assets, net
|
21,413
|
|
|
2,696
|
|
(2,331
|
)
|
|
21,778
|
|
||||
TOTAL ASSETS
|
$
|
1,756,394
|
|
|
$
|
205,189
|
|
$
|
(159,331
|
)
|
|
$
|
1,802,252
|
|
LIABILITIES AND STOCKHOLDERS’
EQUITY
|
|
|
|
|
|
|
||||||||
Current liabilities:
|
|
|
|
|
|
|
||||||||
Borrowings under revolving credit facilities
|
$
|
155,000
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
155,000
|
|
Accounts payable and accrued liabilities
|
235,439
|
|
|
21,182
|
|
—
|
|
|
256,621
|
|
||||
Current liability for pensions and other
postretirement employee benefits
|
7,631
|
|
|
—
|
|
—
|
|
|
7,631
|
|
||||
Total current liabilities
|
398,070
|
|
|
21,182
|
|
—
|
|
|
419,252
|
|
||||
Long-term debt
|
570,524
|
|
|
—
|
|
—
|
|
|
570,524
|
|
||||
Liability for pensions and other
postretirement employee benefits
|
72,469
|
|
|
—
|
|
—
|
|
|
72,469
|
|
||||
Other long-term obligations
|
43,275
|
|
|
—
|
|
—
|
|
|
43,275
|
|
||||
Accrued taxes
|
1,928
|
|
|
842
|
|
—
|
|
|
2,770
|
|
||||
Deferred tax liabilities
|
94,694
|
|
|
26,165
|
|
(2,331
|
)
|
|
118,528
|
|
||||
TOTAL LIABILITES
|
1,180,960
|
|
|
48,189
|
|
(2,331
|
)
|
|
1,226,818
|
|
||||
Accumulated other comprehensive loss, net of tax
|
(43,983
|
)
|
|
—
|
|
—
|
|
|
(43,983
|
)
|
||||
Stockholders’ equity excluding
accumulated other comprehensive loss |
619,417
|
|
|
157,000
|
|
(157,000
|
)
|
|
619,417
|
|
||||
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY
|
$
|
1,756,394
|
|
|
$
|
205,189
|
|
$
|
(159,331
|
)
|
|
$
|
1,802,252
|
|
(In thousands)
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Current assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
19,586
|
|
|
$
|
3,415
|
|
|
$
|
—
|
|
|
$
|
23,001
|
|
Receivables, net
|
130,098
|
|
|
27,252
|
|
|
(10,276
|
)
|
|
147,074
|
|
||||
Taxes receivable
|
15,143
|
|
|
35
|
|
|
(5,469
|
)
|
|
9,709
|
|
||||
Inventories
|
208,472
|
|
|
51,432
|
|
|
(1,875
|
)
|
|
258,029
|
|
||||
Other current assets
|
8,161
|
|
|
521
|
|
|
—
|
|
|
8,682
|
|
||||
Total current assets
|
381,460
|
|
|
82,655
|
|
|
(17,620
|
)
|
|
446,495
|
|
||||
Property, plant and equipment, net
|
802,064
|
|
|
143,264
|
|
|
—
|
|
|
945,328
|
|
||||
Goodwill
|
244,283
|
|
|
—
|
|
|
—
|
|
|
244,283
|
|
||||
Intangible assets, net
|
3,135
|
|
|
37,350
|
|
|
—
|
|
|
40,485
|
|
||||
Intercompany receivable (payable)
|
30,034
|
|
|
(31,909
|
)
|
|
1,875
|
|
|
—
|
|
||||
Investment in subsidiary
|
145,089
|
|
|
—
|
|
|
(145,089
|
)
|
|
—
|
|
||||
Other assets, net
|
8,433
|
|
|
2,853
|
|
|
(3,535
|
)
|
|
7,751
|
|
||||
TOTAL ASSETS
|
$
|
1,614,498
|
|
|
$
|
234,213
|
|
|
$
|
(164,369
|
)
|
|
$
|
1,684,342
|
|
LIABILITIES AND STOCKHOLDERS’
EQUITY
|
|
|
|
|
|
|
|
||||||||
Current liabilities:
|
|
|
|
|
|
|
|
||||||||
Borrowings under revolving credit facilities
|
$
|
135,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
135,000
|
|
Accounts payable and accrued liabilities
|
202,187
|
|
|
37,257
|
|
|
(15,745
|
)
|
|
223,699
|
|
||||
Current liability for pensions and
other postretirement employee benefits
|
7,821
|
|
|
—
|
|
|
—
|
|
|
7,821
|
|
||||
Total current liabilities
|
345,008
|
|
|
37,257
|
|
|
(15,745
|
)
|
|
366,520
|
|
||||
Long-term debt
|
569,755
|
|
|
—
|
|
|
—
|
|
|
569,755
|
|
||||
Liability for pensions and other
postretirement employee benefits
|
81,812
|
|
|
—
|
|
|
—
|
|
|
81,812
|
|
||||
Other long-term obligations
|
41,424
|
|
|
352
|
|
|
—
|
|
|
41,776
|
|
||||
Accrued taxes
|
1,614
|
|
|
820
|
|
|
—
|
|
|
2,434
|
|
||||
Deferred tax liabilities
|
105,012
|
|
|
50,695
|
|
|
(3,535
|
)
|
|
152,172
|
|
||||
TOTAL LIABILITIES
|
1,144,625
|
|
|
89,124
|
|
|
(19,280
|
)
|
|
1,214,469
|
|
||||
Accumulated other comprehensive loss, net of tax
|
(51,753
|
)
|
|
—
|
|
|
—
|
|
|
(51,753
|
)
|
||||
Stockholders’ equity excluding
accumulated other comprehensive loss
|
521,626
|
|
|
145,089
|
|
|
(145,089
|
)
|
|
521,626
|
|
||||
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY
|
$
|
1,614,498
|
|
|
$
|
234,213
|
|
|
$
|
(164,369
|
)
|
|
$
|
1,684,342
|
|
(In thousands)
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||
CASH FLOWS FROM OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
$
|
99,710
|
|
|
$
|
11,911
|
|
|
$
|
(14,282
|
)
|
|
$
|
97,339
|
|
Adjustments to reconcile net earnings to
net cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
76,862
|
|
|
28,128
|
|
|
—
|
|
|
104,990
|
|
||||
Equity-based compensation expense
|
3,620
|
|
|
—
|
|
|
—
|
|
|
3,620
|
|
||||
Deferred taxes
|
(16,957
|
)
|
|
(23,632
|
)
|
|
—
|
|
|
(40,589
|
)
|
||||
Employee benefit plans
|
(4,371
|
)
|
|
—
|
|
|
—
|
|
|
(4,371
|
)
|
||||
Deferred issuance costs on debt
|
1,199
|
|
|
—
|
|
|
—
|
|
|
1,199
|
|
||||
Disposal of plant and equipment, net
|
512
|
|
|
3,541
|
|
|
—
|
|
|
4,053
|
|
||||
Other non-cash activity
|
1,750
|
|
|
—
|
|
|
—
|
|
|
1,750
|
|
||||
Changes in working capital
|
8,776
|
|
|
5,529
|
|
|
7,456
|
|
|
21,761
|
|
||||
Change in taxes receivable, net
|
(5,099
|
)
|
|
(5
|
)
|
|
(5,469
|
)
|
|
(10,573
|
)
|
||||
Other, net
|
1,585
|
|
|
(3,094
|
)
|
|
—
|
|
|
(1,509
|
)
|
||||
Net cash flows from operating activities
|
167,587
|
|
|
22,378
|
|
|
(12,295
|
)
|
|
177,670
|
|
||||
CASH FLOWS FROM INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Additions to property, plant and equipment
|
(193,864
|
)
|
|
(5,884
|
)
|
|
—
|
|
|
(199,748
|
)
|
||||
Proceeds from sale of assets
|
283
|
|
|
668
|
|
|
—
|
|
|
951
|
|
||||
Net cash flows from investing activities
|
(193,581
|
)
|
|
(5,216
|
)
|
|
—
|
|
|
(198,797
|
)
|
||||
CASH FLOWS FROM FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Purchase of treasury stock
|
(4,875
|
)
|
|
—
|
|
|
—
|
|
|
(4,875
|
)
|
||||
Borrowings on revolving credit facilities
|
298,308
|
|
|
—
|
|
|
—
|
|
|
298,308
|
|
||||
Repayments of borrowings on revolving credit facilities'
|
(278,308
|
)
|
|
—
|
|
|
—
|
|
|
(278,308
|
)
|
||||
Investment from (to) parent
|
8,282
|
|
|
(20,577
|
)
|
|
12,295
|
|
|
—
|
|
||||
Payment of tax withholdings on equity-
based payment arrangements
|
(1,127
|
)
|
|
—
|
|
|
—
|
|
|
(1,127
|
)
|
||||
Other, net
|
(134
|
)
|
|
—
|
|
|
—
|
|
|
(134
|
)
|
||||
Net cash flows from financing activities
|
22,146
|
|
|
(20,577
|
)
|
|
12,295
|
|
|
13,864
|
|
||||
Decrease in cash and cash equivalents
|
(3,848
|
)
|
|
(3,415
|
)
|
|
—
|
|
|
(7,263
|
)
|
||||
Cash and cash equivalents at beginning of period
|
19,586
|
|
|
3,415
|
|
|
—
|
|
|
23,001
|
|
||||
Cash and cash equivalents at end of period
|
$
|
15,738
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,738
|
|
(In thousands)
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||
CASH FLOWS FROM OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
$
|
50,773
|
|
|
$
|
5,331
|
|
|
$
|
(6,550
|
)
|
|
$
|
49,554
|
|
Adjustments to reconcile net earnings to net cash
flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
68,496
|
|
|
22,594
|
|
|
—
|
|
|
91,090
|
|
||||
Equity-based compensation expense
|
12,385
|
|
|
—
|
|
|
—
|
|
|
12,385
|
|
||||
Deferred taxes
|
18,860
|
|
|
605
|
|
|
(1,138
|
)
|
|
18,327
|
|
||||
Employee benefit plans
|
(1,979
|
)
|
|
—
|
|
|
—
|
|
|
(1,979
|
)
|
||||
Deferred issuance costs on debt
|
1,242
|
|
|
—
|
|
|
—
|
|
|
1,242
|
|
||||
Disposal of plant and equipment, net
|
781
|
|
|
600
|
|
|
—
|
|
|
1,381
|
|
||||
Other non-cash activity
|
740
|
|
|
18
|
|
|
—
|
|
|
758
|
|
||||
Changes in working capital, net of acquisition
|
(642
|
)
|
|
774
|
|
|
(3,594
|
)
|
|
(3,462
|
)
|
||||
Change in taxes receivable, net
|
1,078
|
|
|
(1,405
|
)
|
|
5,469
|
|
|
5,142
|
|
||||
Excess tax benefits from equity-based payment arrangements
|
(312
|
)
|
|
—
|
|
|
—
|
|
|
(312
|
)
|
||||
Other, net
|
(1,592
|
)
|
|
(921
|
)
|
|
1,138
|
|
|
(1,375
|
)
|
||||
Net cash flows from operating activities
|
149,830
|
|
|
27,596
|
|
|
(4,675
|
)
|
|
172,751
|
|
||||
CASH FLOWS FROM INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Change in short-term investments, net
|
250
|
|
|
—
|
|
|
—
|
|
|
250
|
|
||||
Additions to property, plant and equipment
|
(145,579
|
)
|
|
(9,770
|
)
|
|
—
|
|
|
(155,349
|
)
|
||||
Acquisition of Manchester Industries, net of cash acquired
|
(67,443
|
)
|
|
—
|
|
|
—
|
|
|
(67,443
|
)
|
||||
Proceeds from the sale of assets
|
—
|
|
|
36
|
|
|
—
|
|
|
36
|
|
||||
Net cash flows from investing activities
|
(212,772
|
)
|
|
(9,734
|
)
|
|
—
|
|
|
(222,506
|
)
|
||||
CASH FLOWS FROM FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Purchase of treasury stock
|
(65,327
|
)
|
|
—
|
|
|
—
|
|
|
(65,327
|
)
|
||||
Borrowings on revolving credit facilities
|
1,273,959
|
|
|
—
|
|
|
—
|
|
|
1,273,959
|
|
||||
Repayments of borrowings on revolving credit facilities'
|
(1,138,959
|
)
|
|
—
|
|
|
—
|
|
|
(1,138,959
|
)
|
||||
Investment from (to) parent
|
9,772
|
|
|
(14,447
|
)
|
|
4,675
|
|
|
—
|
|
||||
Payments for debt issuance costs
|
(1,906
|
)
|
|
—
|
|
|
—
|
|
|
(1,906
|
)
|
||||
Payment of tax withholdings on
equity-based payment arrangements
|
(933
|
)
|
|
—
|
|
|
—
|
|
|
(933
|
)
|
||||
Excess tax benefits from equity-based payment arrangements
|
312
|
|
|
—
|
|
|
—
|
|
|
312
|
|
||||
Net cash flows from financing activities
|
76,918
|
|
|
(14,447
|
)
|
|
4,675
|
|
|
67,146
|
|
||||
Increase in cash and cash equivalents
|
13,976
|
|
|
3,415
|
|
|
—
|
|
|
17,391
|
|
||||
Cash and cash equivalents at beginning of period
|
5,610
|
|
|
—
|
|
|
—
|
|
|
5,610
|
|
||||
Cash and cash equivalents at end of period
|
$
|
19,586
|
|
|
$
|
3,415
|
|
|
$
|
—
|
|
|
$
|
23,001
|
|
(In thousands)
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||
CASH FLOWS FROM OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
$
|
56,393
|
|
|
$
|
2,476
|
|
|
$
|
(2,886
|
)
|
|
$
|
55,983
|
|
Adjustments to reconcile net earnings to net cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
65,078
|
|
|
19,654
|
|
|
—
|
|
|
84,732
|
|
||||
Equity-based compensation expense
|
4,557
|
|
|
—
|
|
|
—
|
|
|
4,557
|
|
||||
Deferred taxes
|
9,944
|
|
|
3,178
|
|
|
2,959
|
|
|
16,081
|
|
||||
Employee benefit plans
|
3,011
|
|
|
—
|
|
|
—
|
|
|
3,011
|
|
||||
Deferred issuance costs on debt
|
928
|
|
|
—
|
|
|
—
|
|
|
928
|
|
||||
Disposal of plant and equipment, net
|
1,587
|
|
|
(95
|
)
|
|
—
|
|
|
1,492
|
|
||||
Other non-cash activities
|
(1,028
|
)
|
|
8
|
|
|
—
|
|
|
(1,020
|
)
|
||||
Changes in working capital, net
|
11,809
|
|
|
3,032
|
|
|
—
|
|
|
14,841
|
|
||||
Change in taxes receivable, net
|
(9,461
|
)
|
|
(14,388
|
)
|
|
10,253
|
|
|
(13,596
|
)
|
||||
Excess tax benefits from equity-based
payment arrangements
|
(1,433
|
)
|
|
—
|
|
|
—
|
|
|
(1,433
|
)
|
||||
Funding of qualified pension plans
|
(3,179
|
)
|
|
—
|
|
|
—
|
|
|
(3,179
|
)
|
||||
Other, net
|
(1,591
|
)
|
|
(1,131
|
)
|
|
—
|
|
|
(2,722
|
)
|
||||
Net cash flows from operating activities
|
136,615
|
|
|
12,734
|
|
|
10,326
|
|
|
159,675
|
|
||||
CASH FLOWS FROM INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Change in short-term investments, net
|
49,750
|
|
|
—
|
|
|
—
|
|
|
49,750
|
|
||||
Additions to property, plant and equipment
|
(121,720
|
)
|
|
(7,182
|
)
|
|
—
|
|
|
(128,902
|
)
|
||||
Proceeds from sale of assets
|
—
|
|
|
604
|
|
|
—
|
|
|
604
|
|
||||
Net cash flows from investing activities
|
(71,970
|
)
|
|
(6,578
|
)
|
|
—
|
|
|
(78,548
|
)
|
||||
CASH FLOWS FROM FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Purchase of treasury stock
|
(99,990
|
)
|
|
—
|
|
|
—
|
|
|
(99,990
|
)
|
||||
Investment from (to) parent
|
16,482
|
|
|
(6,156
|
)
|
|
(10,326
|
)
|
|
—
|
|
||||
Payment of tax withholdings on
equity-based payment arrangements
|
(4,152
|
)
|
|
—
|
|
|
—
|
|
|
(4,152
|
)
|
||||
Excess tax benefits from equity-based
payment arrangements
|
1,433
|
|
|
—
|
|
|
—
|
|
|
1,433
|
|
||||
Other, net
|
(139
|
)
|
|
—
|
|
|
—
|
|
|
(139
|
)
|
||||
Net cash flows from financing activities
|
(86,366
|
)
|
|
(6,156
|
)
|
|
(10,326
|
)
|
|
(102,848
|
)
|
||||
Decrease in cash and cash equivalents
|
(21,721
|
)
|
|
—
|
|
|
—
|
|
|
(21,721
|
)
|
||||
Cash and cash equivalents at beginning of period
|
27,331
|
|
|
—
|
|
|
—
|
|
|
27,331
|
|
||||
Cash and cash equivalents at end of period
|
$
|
5,610
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,610
|
|
ITEM 9.
|
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
ITEM 9B.
|
|
Other Information
|
ITEM 10.
|
|
Directors, Executive Officers and Corporate Governance
|
ITEM 11.
|
|
Executive Compensation
|
Plan Category
|
|
Number Of Securities
To Be Issued Upon
Exercise Of
Outstanding Options,
Warrants And Rights
1
|
|
Weighted Average
Exercise Price Of
Outstanding Options,
Warrants And Rights
2
|
|
Number of Securities
Remaining Available
For Future Issuance
Under Equity
Compensation Plans
|
||||
Equity compensation plans
approved by security holders
|
|
1,024,183
|
|
|
$
|
52.84
|
|
|
3,639,058
|
|
Equity compensation plans not
approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
1,024,183
|
|
|
$
|
52.84
|
|
|
3,639,058
|
|
1
|
Includes
234,504
performance shares,
657,319
stock options, and
132,360
restricted stock units, or RSUs, which are the maximum number of shares that could be awarded under the performance share, stock option, and RSU programs, not including future dividend equivalents, if any are paid.
|
2
|
Performance shares and RSUs do not have exercise prices. During
2017
,
124,617
stock option awards vested with a weighted average exercise price of
$61.95
.
|
ITEM 13.
|
|
Certain Relationships and Related Transactions, and Director Independence
|
ITEM 14.
|
|
Principal Accounting Fees and Services
|
ITEM 15.
|
|
Exhibits, Financial Statement Schedules
|
|
|
|
EXHIBIT
NUMBER
|
|
DESCRIPTION
|
|
|
|
3.1*
|
|
|
|
|
|
3.2*
|
|
|
|
|
|
4.1*
|
|
|
|
|
|
4.2*
|
|
|
|
|
|
4.3*
|
|
|
|
|
|
4.4*
|
|
|
|
|
|
10.1*
|
|
|
|
|
|
10.1(i)*
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
10.2(i)*
|
|
|
|
|
|
10.3*
1
|
|
|
|
|
|
10.4*
1
|
|
|
|
|
|
10.5*
1
|
|
|
|
|
|
10.5(i)*
1
|
|
|
|
|
|
10.5(ii)*
1
|
|
|
|
|
|
10.6*
1
|
|
|
|
|
|
10.6(i)*
1
|
|
|
|
|
|
10.6(ii)*
1
|
|
|
|
|
|
10.6(iii)*
1
|
|
|
|
|
|
10.7*
1
|
|
|
|
|
|
10.7(i)*
1
|
|
|
|
|
10.7(ii)*
1
|
|
|
|
|
|
10.7(iii)*
1
|
|
|
|
|
|
10.7(iv)*
1
|
|
|
|
|
|
10.7(v)*
1
|
|
|
|
|
|
10.7(vi)*
1
|
|
|
|
|
|
10.7(vii)*
1
|
|
|
|
|
|
10.7(viii)*
1
|
|
|
|
|
|
10.7(ix)*
1
|
|
|
|
|
|
10.7(x)
1
|
|
|
|
|
|
10.8*
1
|
|
|
|
|
|
10.8(i)*
1
|
|
|
|
|
|
10.8(ii)*
1
|
|
|
|
|
|
10.8(iii)*
1
|
|
|
|
|
10.8(iv)*
1
|
|
|
|
|
|
10.8(v)
1
|
|
|
|
|
|
10.9*
1
|
|
|
|
|
|
10.9(i)*
1
|
|
|
|
|
|
10.10*
1
|
|
|
|
|
|
10.11*
1
|
|
|
|
|
|
10.12*
1
|
|
|
|
|
|
10.13*
1
|
|
|
|
|
|
10.13(i)*
1
|
|
|
|
|
|
10.14*
1
|
|
|
|
|
|
10.15*
1
|
|
|
|
|
|
(12)
|
|
|
|
|
|
(21)
|
|
|
|
|
|
(23)
|
|
|
|
|
|
(24)
|
|
|
|
|
|
(31)
|
|
|
|
|
|
(32)
|
|
|
|
|
101
|
|
Pursuant to Rule 405 of Regulation S-T, the following financial information from the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2017, is formatted in XBRL interactive data files: (i) Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015; (ii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016 and 2015; (iii) Consolidated Balance Sheets at December 31, 2017 and 2016, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015, (v) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2017, 2016 and 2015 and (vi) Notes to Consolidated Financial Statements.
|
*
|
Incorporated by reference.
|
1
|
|
Management contract or compensatory plan, contract or arrangement.
|
ITEM 16.
|
|
Form 10-K Summary
|
|
|
|
CLEARWATER PAPER CORPORATION
|
|
|
||
|
|
|
(Registrant)
|
|
|
|
|
|
By
|
|
/
S
/ Linda K. Massman
|
|
|
|
Linda K. Massman
President, Chief Executive Officer and Director (Principal Executive Officer)
|
*By
|
|
/
S
/ Michael S. Gadd
|
|
|
Michael S. Gadd
(Attorney-in-fact)
|
(a)
|
“
Cause
” means the occurrence of any one or more of the following: (i) the Employee’s conviction of any felony or any crime involving fraud, dishonesty or moral turpitude; (ii) the Employee’s participation in a fraud or act of dishonesty against the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation that results in material harm to the business of the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation; (iii) the Employee’s intentional, material violation of any contract between the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation and the Employee, or any statutory duty the Employee owes the Corporation, its Affiliates or any successor to the Corporation, in either case that the Employee does not correct within 30 days after written notice thereof has been provided to the Employee, (iv) the commission of an act by the Employee that could (either alone or with other acts) be considered harassment or discrimination on the basis of gender, race, age, religion, sexual orientation or other protected category; or (v) the commission by the Employee of an alcohol or drug offense in violation of the Corporation’s, or a Subsidiary’s or an Affiliate’s Substance Abuse Policy for salaried employees.
|
(b)
|
“
Disability
” means a condition pursuant to which the Employee is-
|
(i)
|
unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or
|
(ii)
|
by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Corporation.
|
(c)
|
“
Double Trigger Event
” means the Employee’s Service with the Corporation or a Subsidiary or an Affiliate is involuntarily terminated without Cause or voluntarily terminated for Good Reason within one month prior to or 24 months following the effective date of a Change of Control.
|
(d)
|
“
Good Reason
” means that one or more of the following are undertaken by the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation without the Employee’s written consent: (i) the assignment to the Employee of any duties or responsibilities that results in a material diminution in the Employee’s position or function as in effect immediately prior to the effective date of a Change of Control; provided, however, that a change in the Employee’s title or reporting relationships shall not provide the basis for a voluntary termination with Good Reason; (ii) a 10% or greater reduction, other than in connection with an across-the-board reduction applicable to other similarly situated employees, by the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation in the Employee’s base salary and/or target bonus, and/or target long-term incentive opportunity, all as in effect on the effective date of the Change of Control or as increased thereafter; (iii) any failure by the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation to continue in effect (or substantially replace in the aggregate) any material benefit plan or program in which the Employee was participating immediately prior to the effective date of the Change of Control (hereinafter referred to as “Benefit Plans”), or the taking of any action by the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation that would adversely affect the Employee’s participation in or reduce the Employee’s benefits under the Benefit Plan; provided, however, that no voluntary termination of Service with Good Reason shall be deemed to have occurred if the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation provide for the Employee’s participation in benefit plans and programs that, taken as a whole, are comparable to the Benefit Plans; (iv) a relocation of the Employee’s business office to a location more than 50 miles from the location at which the Employee performs duties as of the effective date of the Change of Control, except for required travel by the Employee on the Corporation’s, its Subsidiaries’ or Affiliates’ or any successor to the Corporation’s business; or (v) a material breach by the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation concerning the terms and conditions of the Employee’s employment.
|
(e)
|
“
Retirement
” means the Employee’s termination of Service on or after the earlier of his or her (A) attainment of age 65 or (B) attainment of age 55 and completion of 10 years of Service.
|
(f)
|
“
Service
” shall have the meaning given such term under the Plan, except that as used in this Agreement the term “Service” shall be limited to employment and shall exclude service performed as an Outside Director or as a Consultant.
|
(g)
|
“
Vesting Date
” means each date on which a portion of the Award vests and becomes nonforfeitable. Thirty three percent (33%) of the Award shall vest on [the first trading day following the end of the first calendar year of the Vesting Period] [the first anniversary of the Grant Date] [the March 1
st
immediately following (or occurring on) the first anniversary of the Grant Date], thirty three percent (33%) of the Award shall vest on [the first trading day following the end of the second calendar year of the Vesting Period] [the second anniversary of the Grant Date] [the March 1
st
immediately following (or occurring on) the second anniversary of the Grant Date], and thirty four percent (34%) of the Award shall vest on [the first trading day following the end of the third calendar year of the Vesting Period] [the third anniversary of the Grant Date] [the March 1
st
immediately following (or occurring on) the third anniversary of the Grant Date], in each case provided that the Employee remains in continuous Service through such Vesting Date.
|
(h)
|
“
Vesting Period
” means the period [beginning on January 1st of the calendar year that [includes] [follows] the Grant Date (the “Vesting Start Date”) and ending on the first trading day following the end of the period of three consecutive calendar years that begins on the Vesting Start Date] [beginning on the Grant Date and ending on the third anniversary of the Grant Date] [beginning on the Grant Date and ending on the March 1
st
immediately following (or occurring on) the third anniversary of the Grant Date].
|
(a)
|
The Employee engages in, whether as an owner, consultant, employee or otherwise, activities competitive with that of Clearwater Paper in any state, province or like geography where Clearwater Paper does business;
|
(b)
|
Other than on behalf of Clearwater Paper, the Employee solicits for employment, offers or causes to be offered employment, either on a full-time, part-time or consulting basis, to any
|
(c)
|
The Employee breaches any of the Employee’s obligations under any confidentiality or nondisclosure agreement with Clearwater Paper.
|
(a)
|
The provisions of Sections 5 and 8 requiring payment after a Double Trigger Event or otherwise upon an Employee’s termination of Service shall be construed to require that the Employee “separate from service” with Clearwater and its Affiliates within the meaning of Treasury Regulation Section 1.409A-1(h) as a condition to the Employee receiving such payment.
|
(b)
|
If the Employee is entitled to receive a payment subject to Section 409A of the Code after a Double Trigger Event or otherwise upon a termination of Service, and the Corporation determines in good faith that the Employee is a “specified employee” as defined in Section 409A as of the date his Service terminates, then such payment shall be deferred and paid 6 months and 1 day following the date of the Employee’s termination of Service (or if earlier, payment shall be made within 60 days after the date of the Employee’s death).
|
(a)
|
“
Cause
” means the occurrence of any one or more of the following: (i) the Employee’s conviction of any felony or any crime involving fraud, dishonesty or moral turpitude; (ii) the Employee’s participation in a fraud or act of dishonesty against the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation that results in material harm to the business of the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation; (iii) the Employee’s intentional, material violation of any contract between the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation and the Employee, or any statutory duty the Employee owes the Corporation, its Affiliates or any successor to the Corporation, in either case that the Employee does not correct within 30 days after written notice thereof has been provided to the Employee, (iv) the commission of an act by the Employee that could (either alone or with other acts) be considered harassment or discrimination on the basis of gender, race, age, religion, sexual orientation or other protected category; or (v) the commission by the Employee of an alcohol or drug offense in violation of the Corporation’s, or a Subsidiary’s or an Affiliate’s Substance Abuse Policy for salaried employees.
|
(b)
|
“
Disability
” means a condition pursuant to which the Employee is-
|
(i)
|
unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or
|
(ii)
|
by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Corporation.
|
(c)
|
“
Double Trigger Event
” means the Employee’s Service with the Corporation or a Subsidiary or an Affiliate is involuntarily terminated without Cause or voluntarily terminated for Good Reason within one month prior to or 24 months following the effective date of a Change of Control.
|
(d)
|
“
Good Reason
” means that one or more of the following are undertaken by the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation without the Employee’s written consent: (i) the assignment to the Employee of any duties or responsibilities that results in a material diminution in the Employee’s position or function as in effect immediately prior to the effective date of a Change of Control; provided, however, that a change in the Employee’s title or reporting relationships shall not provide the basis for a voluntary termination with Good Reason; (ii) a 10% or greater reduction, other than in connection with an across-the-board reduction applicable to other similarly situated employees, by the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation in the Employee’s base salary and/or target bonus, and/or target long-term incentive opportunity, all as in effect on the effective date of the Change of Control or as increased thereafter; (iii) any failure by the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation to continue in effect (or substantially replace in the aggregate) any material benefit plan or program in which the Employee was participating immediately prior to the effective date of the Change of Control (hereinafter referred to as “
Benefit Plans
”), or the taking of any action by the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation that would adversely affect the Employee’s participation in or reduce the Employee’s benefits under the Benefit Plan; provided, however, that no voluntary termination of Service with Good Reason shall be deemed to have occurred if the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation provide for the Employee’s participation in benefit plans and programs that, taken as a whole, are comparable to the Benefit Plans; (iv) a relocation of the Employee’s business office to a location more than 50 miles from the location at which the Employee performs duties as of the effective date of the Change of Control, except for required travel by the Employee on the Corporation’s, its Subsidiaries’ or Affiliates’ or any successor to the Corporation’s business; or (v) a material breach by the Corporation, its Subsidiaries or Affiliates or any successor to the Corporation concerning the terms and conditions of the Employee’s employment.
|
(e)
|
“
Purchase Price
” means the Exercise Price times the number of whole shares with respect to which this Option is exercised.
|
(f)
|
“
Retirement
” means the Employee’s termination of Service on or after the earlier f his or her (A) attainment of age 65 or (B) attainment of age 55 and completion of 10 years of Service.
|
(g)
|
“
Vesting Date
” means each date on which a portion of the Option vests and becomes nonforfeitable in accordance with Section 3(a).
|
(h)
|
“
Vesting Period
” means the period [beginning on January 1st of the calendar year that [includes] [follows] the Grant Date (the “Vesting Start Date”) and ending on the first trading day following the end of the period of three consecutive calendar years that begins on the Vesting Start Date] [beginning on the Grant Date and ending on the third anniversary of the Grant Date] [beginning on the Grant Date and ending on the March 1
st
immediately following (or occurring on) the third anniversary of the Grant Date].
|
(a)
|
General Vesting
. Subject to the conditions stated in this Agreement, the Option shall be subject to vesting in three annual installments during the Vesting Period, i.e., the Option shall become exercisable for 33% of the number of shares specified in Section 1 on [the first trading day following the end of the first calendar year of the Vesting Period] [the first anniversary of the Grant Date] [the March 1
st
immediately following (or occurring on) the first anniversary of the Grant Date], for an additional 33% of the number of shares specified in Section 1 on [the first trading day following the end of the second calendar year of the Vesting Period] [the second anniversary of the Grant Date] [the March 1
st
immediately following (or occurring on) the second anniversary of the Grant Date], and for the remaining 34% of the number of shares specified in Section 1 on [the first trading day following the end of the third calendar year of the Vesting Period] [the third anniversary of the Grant Date] [the March 1
st
immediately following (or occurring on) the third anniversary of the Grant Date]. Except as set forth in Section 3(b), Section 3(c), Section 3(d) and Section 3(e), the Option may not be exercised, and shall not become vested, with respect to any of the underlying shares unless and until the Employee remains in continuous Service through the applicable Vesting Date.
|
(b)
|
Death
. If the Employee’s Service with the Corporation or a Subsidiary or an Affiliate terminates during the Vesting Period because of the Employee’s death, the Employee’s beneficiary or representative may exercise the Option in accordance with Section 4(a) with respect to the number of shares specified in Section 1 attributable to the portion of the Option that was previously vested, and a prorated number of the shares specified in Section 1 attributable to the portion of the Option scheduled to vest at the next annual Vesting Date following the Employee’s termination of Service. The prorated number of shares will be determined by multiplying the total number of shares attributable to the portion of the Option scheduled to vest at such Vesting Date by a fraction, the numerator of which is the number of completed full months the Employee is employed (including disability) [during the calendar year in which the Employee terminates Service] [from the previous annual Vesting Date (or the Grant Date if the Employee’s Service terminates within 12 months of the Grant Date) to the date of termination of Service], and the denominator of which is 12.
|
(c)
|
Disability
. If the Employee’s Service with the Corporation or a Subsidiary or an Affiliate terminates during the Vesting Period because of the Employee’s Disability, the Employee may exercise the Option in accordance with Section 4(b) with respect to the number of shares specified in Section 1 attributable to the portion of the Option that was previously vested, and a prorated number of the shares specified in Section 1 attributable to the portion of the Option scheduled to vest at the next annual Vesting Date following the Employee’s termination of Service. The prorated number of shares will be determined by multiplying the total number of shares attributable to the portion of the Option scheduled to vest at such Vesting Date by a fraction, the numerator of which is the number of completed full months the Employee is employed (including disability) [during the calendar year in which the Employee terminates
|
(d)
|
Double Trigger Event
. Subject to Section 12 of the Plan, if a Double Trigger Event occurs prior to the first annual Vesting Date scheduled for the Award, the Option will become exercisable in accordance with Section 4(c) with respect to a prorated number of the shares specified in Section 1, determined by multiplying such number of shares by a fraction, the numerator of which is the number of full months the Employee is employed (including disability) [during the calendar year in which the Double Trigger Event occurs] [from the Grant Date to the date of the Double Trigger Event], and the denominator of which is twelve. If a Double Trigger Event occurs on or after the first annual Vesting Date scheduled for the Award, the Option, to the extent not previously vested, shall become immediately vested in full and exercisable in accordance with Section 4(c).
|
(e)
|
Retirement
. If the Employee’s Service with the Corporation or a Subsidiary or an Affiliate terminates during the Vesting Period because of the Employee’s Retirement, the Employee may exercise the Option in accordance with Section 4(a) with respect to the number of shares specified in Section 1 attributable to the portion of the Option that was previously vested, and a prorated number of the shares specified in Section 1 attributable to the portion of the Option scheduled to vest at the next annual Vesting Date following the Employee’s termination of Service. The prorated number of shares will be determined by multiplying the total number of shares attributable to the portion of the Option scheduled to vest at such Vesting Date by a fraction, the numerator of which is the number of completed full months the Employee is employed (including disability) [during the calendar year in which the Employee terminates Service] [from the previous annual Vesting Date (or the Grant Date if the Employee’s Service terminates within 12 months of the Grant Date) to the date of termination of Service], and the denominator of which is 12.
|
(a)
|
If the termination of Employee’s Service is caused by the Employee’s death, the vested portion of this Option may be exercised by Employee’s executors or administrators (or by any person or persons who shall have acquired this Option directly from Employee by bequest or inheritance) at any time after the date of such termination and on or before the date that is five years after the date of such termination or, if earlier, the Expiration Date.
|
(b)
|
If the termination of Employee’s Service is caused by Disability, the vested portion of this Option may be exercised at any time after the date of such termination and on or before the date that is five years after the date of such termination or, if earlier, the Expiration Date.
|
(c)
|
If the termination of Employee’s Service is in connection with a Double Trigger Event, then subject to Section 12 of the Plan, the vested portion of this Option may be exercised at any time after the date of such termination and on or before the Expiration Date.
|
(d)
|
If the termination of Employee’s Service is caused by Retirement, the vested portion of this Option may be exercised at any time after the date of such termination and on or before the Expiration Date.
|
(e)
|
If the termination of Employee’s Service is for any reason other than death, Disability, Retirement, Cause or a Double Trigger Event, this Option, to the extent that it was vested under Section 3 at the date of such termination and had not previously been exercised, may be exercised at any time on or before the date that is 90 days after the date of such termination or, if earlier, the Expiration Date. If the termination of Employee’s Service is for Cause, this Option shall be immediately cancelled and cease to be exercisable (including with respect to any vested portion of the Option) at the time of such termination.
|
(a)
|
The Employee engages in, whether as an owner, consultant, employee or otherwise, activities competitive with that of Clearwater Paper in any state, province or like geography where Clearwater Paper does business;
|
(b)
|
Other than on behalf of Clearwater Paper, the Employee solicits for employment, offers or causes to be offered employment, either on a full-time, part-time or consulting basis, to any person who is employed by Clearwater Paper and with whom the Employee had regular contact during the course of his or her employment by Clearwater Paper; or
|
(c)
|
The Employee breaches any of the Employee’s obligations under any confidentiality or nondisclosure agreement with Clearwater Paper.
|
(a)
|
In United States dollars delivered at the time of exercise; or
|
(b)
|
If the Committee has established a broker-assisted cashless exercise program, payment may be made all or in part by delivery (in a manner approved by the Committee) of an irrevocable direction to a securities broker to sell Shares and to deliver all or part of the sale proceeds to the Corporation in payment of the Purchase Price.
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Earnings before income taxes
|
|
$
|
40,954
|
|
|
$
|
80,666
|
|
|
$
|
92,488
|
|
|
$
|
16,241
|
|
|
$
|
38,234
|
|
Add: Fixed charges
|
|
44,256
|
|
|
41,396
|
|
|
40,021
|
|
|
72,407
|
|
|
69,390
|
|
|||||
Subtract: Capitalized interest
|
|
(4,633
|
)
|
|
(2,343
|
)
|
|
(396
|
)
|
|
—
|
|
|
—
|
|
|||||
Earnings available for fixed charges
|
|
$
|
80,577
|
|
|
$
|
119,719
|
|
|
$
|
132,113
|
|
|
$
|
88,648
|
|
|
$
|
107,624
|
|
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net
1
|
|
$
|
31,374
|
|
|
$
|
30,651
|
|
|
$
|
31,182
|
|
|
$
|
63,570
|
|
|
$
|
61,094
|
|
Rental expense factor
2
|
|
8,249
|
|
|
8,402
|
|
|
8,443
|
|
|
8,837
|
|
|
8,296
|
|
|||||
Capitalized interest
|
|
4,633
|
|
|
2,343
|
|
|
396
|
|
|
—
|
|
|
—
|
|
|||||
Total fixed charges
|
|
$
|
44,256
|
|
|
$
|
41,396
|
|
|
$
|
40,021
|
|
|
$
|
72,407
|
|
|
$
|
69,390
|
|
Ratio of earnings to fixed charges
|
|
1.8
|
|
|
2.9
|
|
|
3.3
|
|
|
1.2
|
|
|
1.6
|
|
1
|
Interest expense, net for the years ended December 31, 2016, 2014 and 2013 includes debt retirement costs of $0.4 million, $24.4 million and $17.1 million, respectively.
|
2
|
“Rental expense factor” is the portion of rental expense estimated to be representative of the interest factor within rental expense.
|
|
|
|
|
|
Entity
|
|
Jurisdiction of
Incorporation or
formation
|
|
Name Under Which Entity Conducts Business
|
Cellu Tissue Holdings, Inc.
|
|
Delaware
|
|
Clearwater Paper Group
|
|
|
|
||
Cellu Tissue Corporation – Neenah
|
|
Delaware
|
|
Clearwater Paper – Neenah
|
|
|
|
||
Cellu Tissue Corporation – Oklahoma City
|
|
Delaware
|
|
Clearwater Paper – Oklahoma City
|
|
|
|
||
Cellu Tissue – CityForest, LLC
|
|
Minnesota
|
|
Clearwater Paper – Ladysmith
|
|
|
|
|
|
Clearwater Fiber, LLC
|
|
Delaware
|
|
None
|
|
|
|
|
|
Manchester Industries Inc. of Virginia
|
|
Virginia
|
|
None
|
|
|
|
|
|
Truly Brands, LLC
|
|
Delaware
|
|
None
|
1.
|
I have reviewed this report on Form 10-K of Clearwater Paper Corporation;
|
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(s) 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(s) 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.
|
|
|
|
|
|
Date: February 20, 2018
|
|
|
|
/S/ LINDA K. MASSMAN
|
|
|
|
|
Linda K. Massman
|
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-K of Clearwater Paper Corporation;
|
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(s) 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(s) 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.
|
|
|
|
|
|
Date: February 20, 2018
|
|
|
|
/S/ JOHN D. HERTZ
|
|
|
|
|
John D. Hertz
|
|
|
|
|
Senior Vice President, Finance and Chief Financial Officer
|
(1)
|
the Annual Report of the Company on Form 10-K for the period ended
December 31, 2017
, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/S/ LINDA K. MASSMAN
|
Linda K. Massman
|
President and Chief Executive Officer
|
February 20, 2018
|
(1)
|
the Annual Report of the Company on Form 10-K for the period ended
December 31, 2017
, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/S/ JOHN D. HERTZ
|
John D. Hertz
|
Senior Vice President, Finance and Chief Financial Officer
|
February 20, 2018
|