Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 19, 2016 | Jun. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | KAPSTONE PAPER & PACKAGING CORP | ||
Entity Central Index Key | 1,325,281 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,975,704,919 | ||
Entity Common Stock, Shares Outstanding | 96,372,155 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 6,821 | $ 28,467 |
Trade accounts receivable (Includes $345,372 at December 31, 2015, and $225,577 at December 31, 2014, associated with the securitization facility) | 363,869 | 228,740 |
Other receivables | 18,732 | 12,833 |
Inventories | 335,903 | 238,329 |
Prepaid expenses and other current assets | 28,932 | 7,172 |
Total current assets | 754,257 | 515,541 |
Plant, property and equipment, net | 1,406,146 | 1,386,670 |
Other assets | 12,532 | 10,135 |
Intangible assets, net | 344,583 | 110,077 |
Goodwill | 704,592 | 533,851 |
Total assets | 3,222,110 | 2,556,274 |
Current liabilities: | ||
Short-term borrowings | 6,400 | |
Dividend payable | 9,862 | 9,911 |
Accounts payable | 196,491 | 149,600 |
Accrued expenses | 73,138 | 48,340 |
Accrued compensation costs | 64,149 | 62,491 |
Accrued income taxes | 15 | 6,477 |
Total current liabilities | 350,055 | 276,819 |
Other liabilities: | ||
Long-term debt (Includes $265,614 at December 31, 2015, and $167,000 at December 31, 2014, associated with the securitization facility) | 1,543,748 | 1,046,063 |
Pension and postretirement benefits | 40,510 | 32,800 |
Deferred income taxes | 418,479 | 414,283 |
Other liabilities | 24,038 | 8,182 |
Total other liabilities | $ 2,026,775 | $ 1,501,328 |
Stockholders' equity: | ||
Preferred stock $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding | ||
Common stock-$0.0001 par value; 175,000,000 shares authorized; 96,327,506 shares issued and outstanding (excluding 40,000 treasury shares) at December 31, 2015 and 96,046,554 shares issued and outstanding (excluding 40,000 treasury shares) at December 31, 2014 | $ 10 | $ 10 |
Additional paid-in-capital | 266,220 | 255,505 |
Retained earnings | 642,306 | 574,601 |
Accumulated other comprehensive loss | (63,256) | (51,989) |
Total stockholders' equity | 845,280 | 778,127 |
Total liabilities and stockholders' equity | $ 3,222,110 | $ 2,556,274 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Trade receivables with securitization facility | $ 345,372 | $ 225,577 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 175,000,000 | 175,000,000 |
Common stock, shares issued | 96,327,506 | 96,046,554 |
Common stock, shares outstanding | 96,327,506 | 96,046,554 |
Treasury shares, shares outstanding | 40,000 | 40,000 |
Receivables Credit Facility | ||
Trade receivables with securitization facility | $ 345,400 | |
Long term debt portion associated with securitization facility | $ 265,614 | $ 167,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements of Comprehensive Income | |||
Net sales | $ 2,789,345 | $ 2,300,920 | $ 1,748,162 |
Cost of sales, excluding depreciation and amortization | 1,982,686 | 1,551,531 | 1,186,930 |
Depreciation and amortization | 162,179 | 136,548 | 95,435 |
Freight and distribution expenses | 234,469 | 175,901 | 135,972 |
Selling, general, and administrative expenses | 210,844 | 137,009 | 110,612 |
Other operating income | 675 | ||
Operating income | 199,167 | 299,931 | 219,888 |
Foreign exchange loss / (gain) | 2,556 | 1,222 | (232) |
Loss on debt extinguishment | 1,218 | 5,617 | |
Interest expense, net | 33,759 | 32,491 | 25,130 |
Income before provision for income taxes | 161,634 | 260,601 | 194,990 |
Provision for income taxes | 55,248 | 88,686 | 67,652 |
Net income | 106,386 | 171,915 | 127,338 |
Other comprehensive income, net of tax | |||
Net actuarial gain/(loss) | (13,182) | (59,645) | 10,491 |
Pension and postretirement plan reclassification adjustments: | |||
Amortization (accretion) of prior service costs | 1,413 | 128 | (43) |
Amortization (accretion) of net (gain) / loss | 502 | (7) | 189 |
Other comprehensive income/(loss), net of tax | (11,267) | (59,524) | 10,637 |
Total comprehensive income | $ 95,119 | $ 112,391 | $ 137,975 |
Weighted average number of shares outstanding: | |||
Basic (in shares) | 96,257,749 | 95,900,179 | 95,258,756 |
Diluted (in shares) | 97,635,539 | 97,459,184 | 96,739,482 |
Net income per share: | |||
Basic (in dollars per share) | $ 1.11 | $ 1.79 | $ 1.34 |
Diluted (in dollars per share) | 1.09 | 1.76 | $ 1.32 |
Dividends declared per common share | $ 0.40 | $ 0.10 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock, net of Treasury Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at Dec. 31, 2012 | $ 10 | $ 236,029 | $ 285,011 | $ (3,102) | $ 517,948 |
Balance (in shares) at Dec. 31, 2012 | 94,910,120 | ||||
Changes in Stockholders' Equity | |||||
Stock-based compensation expense | 5,203 | 5,203 | |||
Payment of withholding taxes on vested restricted stock awards and options exercised | (860) | (860) | |||
Payment of withholding taxes on vested restricted stock awards and options exercised (in shares) | 127,952 | ||||
Exercise of stock options | 1,934 | 1,934 | |||
Exercise of stock options (in shares) | 602,900 | ||||
Excess tax benefit from stock-based compensation | 3,531 | 3,531 | |||
Employee Stock Purchase Plan | 349 | 349 | |||
Employee Stock Purchase Plan (in shares) | 25,240 | ||||
Net income | 127,338 | 127,338 | |||
Pension and postretirement plan liability adjustments, net of tax of $6,852, $34,3461 and $6,281 in 2015, 2014 and 2013, respectively | 10,637 | 10,637 | |||
Balance at Dec. 31, 2013 | $ 10 | 246,186 | 412,349 | 7,535 | 666,080 |
Balance (in shares) at Dec. 31, 2013 | 95,666,212 | ||||
Changes in Stockholders' Equity | |||||
Stock-based compensation expense | 6,956 | 6,956 | |||
Payment of withholding taxes on vested restricted stock awards and options exercised | (1,755) | (1,755) | |||
Payment of withholding taxes on vested restricted stock awards and options exercised (in shares) | 176,724 | ||||
Exercise of stock options | 869 | 869 | |||
Exercise of stock options (in shares) | 183,130 | ||||
Excess tax benefit from stock-based compensation | 2,649 | 2,649 | |||
Employee Stock Purchase Plan | 600 | 600 | |||
Employee Stock Purchase Plan (in shares) | 20,488 | ||||
Dividends declared | (9,663) | (9,663) | |||
Net income | 171,915 | 171,915 | |||
Pension and postretirement plan liability adjustments, net of tax of $6,852, $34,3461 and $6,281 in 2015, 2014 and 2013, respectively | (59,524) | (59,524) | |||
Balance at Dec. 31, 2014 | $ 10 | 255,505 | 574,601 | (51,989) | $ 778,127 |
Balance (in shares) at Dec. 31, 2014 | 96,046,554 | 96,046,554 | |||
Changes in Stockholders' Equity | |||||
Stock-based compensation expense | 9,835 | $ 9,835 | |||
Payment of withholding taxes on vested restricted stock awards and options exercised | (2,508) | (2,508) | |||
Payment of withholding taxes on vested restricted stock awards and options exercised (in shares) | 155,283 | ||||
Exercise of stock options | 896 | 896 | |||
Exercise of stock options (in shares) | 91,256 | ||||
Excess tax benefit from stock-based compensation | 1,649 | 1,649 | |||
Employee Stock Purchase Plan | 843 | 843 | |||
Employee Stock Purchase Plan (in shares) | 34,413 | ||||
Dividends declared | (38,681) | (38,681) | |||
Net income | 106,386 | 106,386 | |||
Pension and postretirement plan liability adjustments, net of tax of $6,852, $34,3461 and $6,281 in 2015, 2014 and 2013, respectively | (11,267) | (11,267) | |||
Balance at Dec. 31, 2015 | $ 10 | $ 266,220 | $ 642,306 | $ (63,256) | $ 845,280 |
Balance (in shares) at Dec. 31, 2015 | 96,327,506 | 96,327,506 |
Consolidated Statements of Cha6
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements of Changes in Stockholders' Equity | |||
Pension and postretirement plan liability adjustments, tax | $ 6,852 | $ 34,346 | $ 6,281 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities | |||
Net income | $ 106,386 | $ 171,915 | $ 127,338 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 162,179 | 136,548 | 95,435 |
Stock-based compensation expense | 9,835 | 6,956 | 5,203 |
Pension and postretirement | (11,182) | (11,523) | (3,908) |
Excess tax benefit from stock-based compensation | (1,649) | (2,649) | (3,531) |
Amortization of debt issuance costs | 5,546 | 5,696 | 4,489 |
Loss on debt extinguishment | 1,218 | 5,617 | |
Loss on disposal of fixed assets | 951 | 4,252 | 1,012 |
Deferred income taxes | 11,042 | 2,455 | 59,865 |
Inventory Step Up | 5,800 | ||
Contingent consideration expense | 3,700 | ||
Changes in assets and liabilities: | |||
Trade accounts receivable, net | 8,960 | 3,649 | (11,133) |
Other receivables | (1,596) | (1,434) | 6,374 |
Inventories | (13,086) | (22,973) | 2,934 |
Prepaid expenses and other current assets | (13,375) | (767) | 9,488 |
Other assets | 478 | (1,433) | (382) |
Accounts payable | (13,352) | (5,705) | (6,191) |
Accrued expenses and other liabilities | 16,155 | 6,072 | (3,364) |
Accrued compensation costs | (7,120) | 7,620 | 15,065 |
Accrued income taxes | (8,433) | 8,902 | |
Net cash provided by operating activities | 262,457 | 313,198 | 298,694 |
Investing activities | |||
Capital expenditures | (126,756) | (137,232) | (96,706) |
Net cash used in investing activities | (743,802) | (137,232) | (634,945) |
Financing activities | |||
Proceeds from revolving credit facility | 350,000 | 97,900 | 321,613 |
Repayments on revolving credit facility | (343,600) | (97,900) | (385,113) |
Proceeds from receivables credit facility | 134,701 | 175,000 | |
Repayments on receivables credit facility | (36,088) | (8,000) | |
Proceeds from long-term debt | 519,763 | 1,275,000 | |
Repayments on long-term debt | (116,438) | (328,525) | (356,550) |
Redemption of Longview senior notes | (507,520) | ||
Cash dividend paid | (38,729) | (223) | |
Payment of loan amendment and debt issuance costs | (10,790) | (1,081) | (19,654) |
Proceeds from other current borrowings | 6,615 | 6,300 | 5,115 |
Repayments on other current borrowings | (6,615) | (6,300) | (5,115) |
Payment of withholding taxes on stock awards | (2,508) | (1,755) | (860) |
Proceeds from exercises of stock options | 896 | 869 | 1,934 |
Proceeds from shares issued to ESPP | 843 | 600 | 349 |
Excess tax benefit from stock-based compensation | 1,649 | 2,649 | 3,531 |
Net cash provided by financing activities | 459,699 | (160,466) | 332,730 |
Net increase (decrease) in cash and cash equivalents | (21,646) | 15,500 | (3,521) |
Cash and cash equivalents-beginning of period | 28,467 | 12,967 | 16,488 |
Cash and cash equivalents-end of period | 6,821 | $ 28,467 | 12,967 |
Longview | |||
Investing activities | |||
Payment to acquire business, net of cash acquired | $ (538,239) | ||
Victory Acquisition | |||
Investing activities | |||
Payment to acquire business, net of cash acquired | (617,046) | ||
Capital expenditures | $ (5,500) |
Description of Business and Bas
Description of Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2015 | |
Description of Business and Basis of Presentation | |
Description of Business and Basis of Presentation | 1. Description of Business and Basis of Presentation KapStone Paper and Packaging Corporation, or the "Company," produces and sells a variety of containerboard, corrugated products and specialty paper products in the United States and globally. The Company was incorporated on April 15, 2005 in Delaware. On June 1, 2015, the Company acquired 100 percent of the partnership interests in Victory Packaging, L.P. and its subsidiaries ("Victory"), and on July 18, 2013, the Company acquired 100 percent of the stock of Longview Fibre Paper and Packaging, Inc. ("Longview"). As a result of the Victory and Longview acquisitions, the accompanying consolidated financial statements are not comparative. The accompanying consolidated financial statements include the results of Victory and Longview since the date of the respective acquisitions (see Note 3—"Victory Acquisition" and Note 4—"Longview Acquisition"). Due to the recent adoption of ASU 2015-17, "Balance Sheet Classification of Deferred Taxes" $2.0 million was reclassified in 2014 from net current deferred income tax liability to net non-current deferred income tax liability to conform to current presentation. Principles of Consolidation —The consolidated financial statements have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. Use of Estimates —The preparation of financial statements and related disclosures requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on management's best knowledge of current events and actions that the Company may undertake in the future, actual results may be different from the estimates. Recently Adopted Accounting Pronouncements —During November 2015, the FASB issued ASU 2015-17, "Balance Sheet Classification of Deferred Taxes", which simplifies the presentation of deferred income taxes. This ASU requires that deferred tax assets and liabilities be classified as non-current in a statement of financial position. We early adopted ASU 2015-17 effective December 31, 2015 and applied it on a retrospective basis. In May 2015, the FASB issued ASU 2015-07, "Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)". This guidance impacts reporting entities that measure an investment's fair value using the net asset value per share (or an equivalent) practical expedient. The amendments in ASU No. 2015-07 eliminate the requirement to classify the investment within the fair value hierarchy. In addition, the requirement to make specific disclosures for all investments eligible to be assessed at fair value with the net asset value per share practical expedient has been removed. Instead, such disclosures are restricted only to investments that the entity has decided to measure using the practical expedient. For public entities, the amendments are effective for fiscal years beginning after December 15, 2015, and the interim periods within, and are applied retrospectively to all periods offered. Early application is permitted. The Company has adopted this ASU for its fiscal year ending December 31, 2015, and has retrospectively eliminated investments in which fair value is assessed through the net asset value per share practical expedient from the fair value hierarchy for all periods presented. See Note 10—"Pension and Postretirement Benefits". In September 2015, the FASB issued ASU 2015-16, "Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments", which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The ASU is effective for public business entities for fiscal years beginning after 15 December 2015, and interim periods within those fiscal years. Early adoption is permitted. The Company has adopted this ASU for its fiscal year ending December 31, 2015. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Significant Accounting Policies | |
Significant Accounting Policies | 2. Significant Accounting Policies Revenue Recognition —Revenue is recognized when the customer takes title and assumes the risks and rewards of ownership, when the price is fixed and determinable and when collectability is reasonably assured. Sales with terms f.o.b. (free on board) shipping point are recognized at the time of shipment. For sales transactions with terms f.o.b. destination, revenue is recorded when the product is delivered to the customer's site and when title and risk of loss are transferred. Sales on consignment are recognized in revenue at the earlier of the month that the goods are consumed or after a period of time subsequent to receipt by the customer as specified by contract terms, provided all other revenue recognition criteria is met. Incentive rebates are typically paid in cash and are netted against revenue on an accrual basis as qualifying purchases are made by the customer to earn and thereby retain the rebate. During 2015, 2014, and 2013, customer rebates totaled $32.7 million, $28.3 million and $26.2 million, respectively. Freight charged to customers is recognized in net sales. Cost of Sales —Cost of sales includes material, labor and overhead costs, but excludes depreciation and amortization. Proceeds received from the sale of by-products generated from the paper and packaging manufacturing process are reflected as a reduction to cost of sales. Income from sales of by-products is derived primarily from the sale of tall oil, hardwood, turpentine and waste bales to third parties. During 2015, 2014 and 2013, cost of sales was reduced by $36.1 million, $35.8 million and $32.3 million, respectively for these by-product sales. Freight and Distribution Expenses —Freight and distribution includes shipping and handling costs for product sold to customers and is excluded from cost of sales. Planned Maintenance Outage Costs —The Company recognizes the cost of maintenance activities in the period in which they occur under the direct expense method in accordance with ASC 360, Property, Plant and Equipment . The Company performs planned maintenance outages at its paper mills. Costs of approximately $37.4 million, $36.1 million and $24.9 million related to planned maintenance outages are included in cost of sales for the years ended December 31, 2015, 2014 and 2013, respectively. Net Income per Common Share —Basic net income per share is based on the weighted average number of common shares outstanding during the period. Diluted income per share reflects the potential dilution assuming common shares were issued for the exercise of outstanding in-the-money stock options and unvested restricted stock awards and assuming the proceeds thereof were used to purchase common shares at the average market price during the period such awards were outstanding and inclusion of such shares is dilutive to net income per share. Concentrations of Risk —Financial instruments that potentially expose the Company to concentrations of credit and market risk consist primarily of cash and cash equivalents and trade accounts receivable from sales of product to third parties. When excess cash and cash equivalents are invested they are placed in investment grade commercial paper. No customer accounted for more than 10 percent of consolidated net sales in 2015, 2014 and 2013. In order to mitigate credit risk, the Company obtains letters of credit for certain export customers. For the years ended December 31, 2015, 2014 and 2013, net sales to US based customers were 82 percent, 80 percent and 80 percent, respectively, of consolidated net sales. Net sales to foreign based customers during 2015, 2014 and 2013 were 18 percent, 20 percent and 20 percent, respectively, of consolidated net sales. See Note 16—"Segment Information". The Company establishes its allowance for doubtful accounts based upon factors mainly surrounding the credit risks of specific customers and other related information. Once an account is deemed uncollectible, it is written off. At December 31, 2015, 2014 and 2013 changes to the allowance for doubtful accounts are summarized as follows ($000's): Year ended: Balance at beginning of year Acquisition Charged to Expense Write-offs Balance at end of year December 31, 2015 $ $ $ $ ) $ December 31, 2014 $ $ — $ $ ) $ December 31, 2013 $ $ — $ $ ) $ Foreign Currency Transactions —The Company invoices certain European customers in Euros and Mexican customers in Pesos. Outstanding amounts for such transactions are translated into U.S. dollars at the year-end rate of exchange and statements of comprehensive income items are remeasured at the weighted average exchange rates for the period. Gains and losses arising from these transactions are included in foreign exchange gains / (losses) within the Consolidated Statements of Comprehensive Income. Cash and Cash Equivalents —Cash equivalents include all highly liquid investments with maturities of three months or less when purchased. Fair value of Financial Instruments —The Company's cash and cash equivalents, trade accounts receivables and accounts payables are financial assets and liabilities with carrying values that approximate fair value. The Company's variable rate term loans and short-term borrowing are financial liabilities with fair values that approximate their carrying value of $1.6 billion. See Note 9—"Short-term Borrowings and Long-term debt". Inventories —Inventories are valued at the lower of cost or market; whereby cost includes all direct and indirect materials, labor and manufacturing overhead, less by-product recoveries. Costs of raw materials, work-in-process, and finished goods are determined using the first-in, first-out method for the legacy KapStone locations. Replacement parts and other supplies are stated using the average cost method. Purchases and sales of inventory with the same counterparty that are entered into in contemplation of one another are combined and recorded as exchanges of inventory measured at the book value of the item exchanged. In conjunction with the Longview acquisition, KapStone acquired Longview's inventories which were stated at fair value. Cost for the Longview inventories is determined on a last-in, first-out method except for replacement parts and supplies inventories, which are valued using the average cost method. In conjunction with the Victory Acquisition, KapStone acquired Victory's inventories which were stated at fair value as of the acquisition date. The cost for the Victory inventories is stated at the lower cost or market and is determined under the first-in, first-out method. Plant, Property, and Equipment, net —Plant, property, and equipment are stated at cost less accumulated depreciation. Property, plant, and equipment acquired in acquisitions were recorded at fair value on the date of acquisition. Depreciation is computed using the straight-line method over the assets' estimated useful lives. The range of estimated useful lives is as follows: Years Land improvements 3 - 25 Buildings 11 - 40 Machinery and equipment 3 - 30 Furniture and office equipment 5 - 10 Computer hardware and software 3 - 5 The Company accounts for costs incurred for the development of software for internal use in accordance with ASC 350 Intangibles—Goodwill and Other . This standard requires the capitalization of certain costs incurred in connection with developing or obtaining internal use software. Goodwill and Intangible Assets —Goodwill is the excess of purchase price over the fair value of the net assets of businesses acquired. On an annual basis and in accordance with ASC 350, Intangibles—Goodwill and Other , the Company evaluates goodwill using a quantitative or qualitative assessment to determine whether it is more likely than not that fair value of any reporting unit is less than it carrying amount. If the Company determines that the fair value of the reporting unit may be less than its carrying amount, the Company evaluates goodwill using a two-step impairment test. Otherwise, the Company concludes that no impairment is indicated and does not perform the two-step impairment test. If the qualitative assessment concludes that the two-step impairment test is necessary, the first step is to compare the book value of the reporting unit, including goodwill, with its fair value. A reporting unit is an operating segment or one level below an operating segment (referred to as a "component"). A component is considered a reporting unit for purposes of goodwill testing if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component. The Company has identified three reporting units. The fair value is estimated based on a market approach and a discounted cash flow analysis, also known as the income approach, and is reconciled back to the current market capitalization for the Company to ensure that the implied control premium is reasonable. A discounted cash flow analysis requires the Company to make various judgmental assumptions, including assumptions about future cash flows, growth rates and discount rates. The assumptions about future cash flows and growth rates are based on the forecast and long-term business plans of each reporting unit. Discount rate assumptions are considered Level 3 inputs in the fair value hierarchy defined in ASC 820, Fair Value Measurements and Discounts . Management also considers market-multiple information to corroborate the fair value conclusions reached using the discounted cash flow analysis. If necessary, the second step of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. The Company's goodwill impairment analysis is performed annually at the beginning of the fourth quarter and did not result in an impairment charge for any periods presented. Intangible assets acquired in a business combination or asset purchase are initially valued at the fair market value using generally accepted valuation methods appropriate for the type of the intangible asset. Definite-lived intangible assets are amortized over their estimated useful lives and are reviewed for impairment if indicators of impairment arise. The evaluation of the impairment is based upon a comparison of the carrying amount of the intangible asset to the estimated future undiscounted cash flows expected to be generated by the asset. If the estimated undiscounted future cash flows are less than the carrying amount of the assets, the asset is considered to be impaired. If impaired, the intangible asset is written down to estimated fair market value. Pension and Postretirement Benefits —The Company provides pension and postretirement benefits to certain employees and accounts for these benefits in accordance with ASC 715, Compensation—Retirement Benefits . For financial reporting purposes, long-term assumptions are developed through consultations with actuaries. Such assumptions include the expected long-term rate of return on plan assets, discount rates, health care trend rates and mortality rates. The discount rate for the current year is based on long-term high quality bond rates. The amount of unrecognized actuarial gains and losses recognized in the current year's operations is based on amortizing the unrecognized gains or losses for each plan that exceed the larger of 10% of the projected benefit obligation or the fair value of plan assets, also known as the corridor. The amount of unrecognized gain or loss that exceeds the corridor is amortized over the average future service of the plan participants. While we believe that our assumptions are appropriate, significant differences in our actual experience or significant changes in our assumptions may materially affect our pension and other postretirement benefit obligations and our future expense. Income Taxes —The Company accounts for income taxes under the liability method in accordance with ASC 740, Income Taxes . Accordingly, deferred income taxes are provided for the future tax consequences attributable to differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. Deferred tax assets and liabilities are measured using tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is established when necessary to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company recognizes the benefit of tax positions when it is more likely than not to be sustained on its technical merits. The Company records interest and penalties on unrecognized tax benefits in the provision for income taxes. Amortization of Debt Issuance Costs —The Company capitalizes costs incurred in connection with borrowings or establishment of credit facilities. These costs are amortized over the life of the borrowing or life of the credit facility using the effective interest method. For the years ended December 31, 2015, 2014 and 2013, $5.5 million, $5.7 million and $4.5 million, respectively, of debt issuance costs have been amortized and recognized within interest expense, net. In December 2015 and 2014, the Company recorded losses on debt extinguishment of $1.2 million and $5.6 million, respectively, due to voluntary prepayments totaling $103.5 million and $325.0 million, respectively, on the term loans under the Company's senior secured credit facility. Stock Based Compensation Expense —The Company accounts for employee stock and stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation. Accordingly, compensation expense for the fair value of stock options, as determined on the date of grant, is recorded on an accelerated basis over the awards' vesting periods. The compensation expense for the fair value of restricted stock units, as determined on the date of grant, is recorded on a straight-line basis over the awards' vesting periods. Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from the original estimate. Segment Information —Prior to the acquisition of Victory on June 1, 2015, we manufactured and sold packaging products and reported the Company's consolidated results as one segment. In connection with the acquisition, we began reporting in two segments: Paper and Packaging and Distribution. These segments represent distinct businesses that are managed separately because of differing products and services. Each of these businesses requires distinct operating and marketing strategies. The Paper and Packaging segment produces containerboard, corrugated products and specialty paper which are sold to customers who convert our products into end-market finished products or internally to corrugating plants that produce a wide variety of products ranging from basic corrugated shipping containers to specialized packaging. The Distribution segment, which operates under the Victory and Golden State Container trade names, provides its customers comprehensive packaging solutions and services and distributes primarily corrugated packaging materials, as well as other specialty packaging materials, such as plastics, wood, void fill, tapes and stretch wraps. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09 "Revenue from Contracts with Customers". The guidance in this update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The guidance in this update supersedes the revenue recognition requirements in Accounting Standards Codification ("ASC") Topic 605, "Revenue Recognition", and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, this update supersedes some cost guidance included in Subtopic 605-35, "Revenue Recognition—Construction-Type and Production-Type Contracts". For a public entity, the amendments are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. In July 2015, the FASB approved a one-year deferral of the effective date for its new revenue standard for public and nonpublic entities reporting under GAAP. The standard will be effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods therein. Additionally the FASB approved the option to early adopt up to the original effective date (fiscal years beginning after December 15, 2016). We are currently evaluating the impact that the adoption of ASU 2014-09 will have on our financial condition, results of operations and disclosures. In April 2015, the FASB issued ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs", which changes the presentation of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. It is effective for annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. The Company does not expect the adoption of this standard to have a material impact on its consolidated balance sheets. In August 2015, the FASB issued ASU 2015-15, "Interest—Imputation of Interest" which relates to the presentation of debt issuance costs. This standard clarifies the guidance set forth in FASB ASU 2015-03, which required that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the debt liability rather than as an asset. The new pronouncement clarifies that debt issuance costs related to line-of-credit arrangements could continue to be presented as an asset and be subsequently amortized over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the arrangement. The Company does not expect the adoption of this standard to have a material impact on its consolidated balance sheets. |
Victory Acquisition
Victory Acquisition | 12 Months Ended |
Dec. 31, 2015 | |
Victory Acquisition | |
Victory Acquisition | |
Victory Acquisition | 3. Victory Acquisition On June 1, 2015, the Company purchased 100 percent of the partnership interests in Victory for $615.0 million in cash and $2.0 million for working capital adjustments. Of the purchase price, $40.0 million was placed into escrow to fund certain limited indemnity obligations of Victory. Victory, headquartered in Houston, TX, is a North American distributor of packaging materials. The Company will also be obligated to pay up to an additional $25.0 million of contingent consideration to the former owners of Victory if certain financial performance criteria are satisfied during the thirty month period following the closing. The Company used a present value analysis to determine the fair value of the contingent consideration of $9.6 million as of June 1, 2015 and $13.3 million as of December 31, 2015. The contingent consideration is included in other non-current liabilities on the Company's Consolidated Balance Sheets and its fair value is categorized as Level 3 within the fair value hierarchy. This analysis considers, among other items, the financial forecasts of future operating results of Victory, the probability of reaching the forecast, and the associated discount rate. The $3.7 million increase in the contingent consideration from June 1, 2015 to December 31, 2015 is included in selling, general and administrative expenses on the Consolidated Statement of Comprehensive Income. The acquisition was financed by borrowings under a Second Amended and Restated Credit Agreement dated June 1, 2015 as amended from time to time, the Credit Agreement, which provides for a senior secured credit facility (the "Credit Facility") in an initial aggregate principal amount of $1.915 billion, consisting of a Term Loan A-1 in the aggregate amount of $940.0 million, a Term Loan A-2 in the aggregate amount of $475.0 million, and a $500.0 million revolving credit facility ("Revolver"), which includes an accordion feature that provides for, subject to certain terms and conditions, up to $600.0 million of additional commitments. A portion of the funds borrowed under the Credit Facility were used to pay $10.6 million of debt issuance costs. See Note 9, "Short-term Borrowings and Long-term Debt", for more information on the Credit Agreement and Credit Facility. The Victory acquisition represented an opportunity to acquire a distributor of packaging products with a strong historical growth track record and meaningful expected synergies with the Company's paper mills and corrugated products manufacturing plants. Transaction fees and expenses for the Victory acquisition related to due diligence, advisory and legal services have been expensed as incurred. These costs were $2.9 million for the year ended December 31, 2015 and were recorded as selling, general and administrative expenses in the Consolidated Statements of Comprehensive Income. The Victory acquisition was accounted for in accordance with the provisions of ASC 805, Business Combinations, and the accompanying consolidated financial statements include the results of Victory since June 1, 2015. The Company used third-party appraisals to assist in determining the fair market value for acquired tangible and intangible assets and a contingent earnout arrangement. Changes to these allocations may occur as additional information becomes available. The appraisal process for determining the fair value of the acquired assets included a valuation of the acquired assets with a consideration of the three traditional valuation approaches to fair value: cost, market and income. A cost valuation approach was used for equipment and the income valuation approach was used for intangible assets. The excess of the purchase price paid at the time of the acquisition over the aggregate estimated fair value of net assets acquired was allocated to goodwill. The current purchase price allocation is as follows: Purchase price $ Working capital adjustments ​ ​ ​ ​ ​ Cash paid $ Fair value of contingent consideration ​ ​ ​ ​ ​ Total acquisition consideration $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table summarizes the allocation of the Victory acquisition consideration to the fair value of the assets acquired and liabilities assumed at the date of acquisition, as well as adjustments made during 2015 (referred to as "measurement period adjustments"): Amounts Recognized at Acquisition Date(1) Mesurement Period Adjustments(2) Amounts Recognized as of Acquisition Date (as Adjusted) Trade accounts receivable $ $ ) $ Other receivables Inventories ) Prepaid expenses and other current assets Plant, property and equipment ) Other assets Intangible assets Accounts payable ) ) Accrued expenses ) ) ) Accrued compensation costs ) ) Other noncurrent liabilities ) ) Goodwill ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total acquisition consideration $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Preliminary allocation of Victory acquisition consideration to the fair value of the assets acquired and liabilities assumed at the date of acquisition. (2) The measurement period adjustments include the following: • Property, plant and equipment were adjusted downward by $0.8 million as accounting policies were aligned across the Company. • Trade accounts receivable and inventory were adjusted by $0.4 million and $0.3 million, respectively, resulting from minor adjustments to management estimates. • Certain prepaid expenses and liability amounts have been reclassified to conform to the Company's accounting policies. The acquisition of Victory resulted in the recognition of $170.7 million of goodwill. Goodwill represents expected synergies with the Company's existing operations by transferring 115,000 tons of corrugated products currently being produced by Victory's existing suppliers to the Company's paper mills and corrugated products manufacturing plants. All of the goodwill recognized from the transaction is deductible for tax purposes. The following table summarizes the acquired identified intangible assets and their respective fair values and estimated useful lives at the date of acquisition: Estimated Useful Life in Years Fair Value Customer relationships 14 $ Definite-lived trademarks 10 - 25 Favorable / unfavorable leases 6 Non-compete agreements 3 - 5 ​ ​ ​ ​ ​ ​ ​ Total fair value of intangible assets $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The customer relationships were valued using the excess earnings method under the income approach. This method reflects the present value of the projected cash flows that are expected to be generated by the customer relationships, less charges representing the contribution of other assets to those cash flows, and an appropriate discount rate to reflect the time value and risk associated with the cash flows. The discount rate applied to the customer relationships' cash flow reflects the risk of the cash flows of the business plus a premium for the risk inherent in intangible assets. The Company utilized a discount rate of 15.0 percent in the valuation of the customer relationships. The 14 year term for customer relationships reflects the period of time at which the present value of cash flows are expected to approximate 90% of the initial value. The fair value of the acquired identified intangible assets is amortized on a straight-line basis over the remaining useful life. The estimated amortization expense for the next five years is as follows: 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Since the June 1, 2015 acquisition date, the Company's consolidated statement of comprehensive income for the year ended December 31, 2015 includes $582.9 million of net sales and $20.7 million of operating income from the Victory operations. The following unaudited pro forma consolidated results of operations assume that the acquisition of Victory occurred as of January 1, 2014. The unaudited pro forma consolidated results include the accounting effects of the business combination, including the application of the Company's accounting policies, amortization of intangible assets and depreciation of equipment related to fair value adjustments, interest expense on acquisition related debt, elimination of intercompany sales and income tax effects of the adjustments. The pro forma adjustments are directly attributable to the Victory acquisition, factually supportable and are expected to have a continuing impact on the Company's combined results. Unaudited pro forma data is based on historical information and does not necessarily reflect the actual results that would have occurred, nor is it indicative of future results of operations. Years Ended December 31, (unaudited) 2015 2014 Net sales $ $ Net income $ $ Net income per share—diluted $ $ |
Longview Acquisition
Longview Acquisition | 12 Months Ended |
Dec. 31, 2015 | |
Longview | |
Longview Acquisition | |
Longview Acquisition | 4. Longview Acquisition On July 18, 2013, the Company acquired 100 percent of the stock of Longview for $1.025 billion plus $41.5 million of working capital adjustments. Longview is a leading manufacturer of high quality containerboard, kraft papers, and corrugated products. Longview's operations include a paper mill located in Longview, Washington equipped with five paper machines which have the capacity to produce 1.3 million tons of containerboard and kraft paper annually. Longview also owns seven corrugated products manufacturing plants located in the Pacific Northwest. The excess of the purchase price over the aggregate estimated fair value of net assets acquired was allocated to goodwill. The goodwill is not deductible for income tax purposes. The following unaudited pro forma consolidated results of operations assume that the acquisition of Longview occurred as of January 1, 2012. The unaudited pro forma consolidated results includes the accounting effects of the business combination, including the application of the Company's accounting policies, amortization of intangible assets and depreciation of property, plant and equipment related to fair value adjustments, interest expense on acquisition related debt, elimination of intercompany sales and income tax effects of the adjustments. The pro forma adjustments are directly attributable to the Longview acquisition, factually supportable and are expected to have a continuing impact on the Company's combined results. Unaudited pro forma data is based on historical information and does not necessarily reflect the actual results that would have occurred, nor is it indicative of future results of operations. Year Ended December 31, 2013 (unaudited) Net sales $ Net income $ |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2015 | |
Inventories | |
Inventories | 5. Inventories Inventories consist of the following at December 31, 2015 and 2014, respectively: December 31, 2015 2014 Raw materials $ $ Work in process Finished goods Replacement parts and supplies ​ ​ ​ ​ ​ ​ ​ ​ Inventory at FIFO costs LIFO inventory reserves ) ​ ​ ​ ​ ​ ​ ​ ​ Inventories $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2015 and 2014, finished goods inventory included inventory consigned to third parties totaling $13.6 million and $11.9 million, respectively. At December 31, 2015, finished goods inventory included $83.2 million related to Victory. Victory's inventory is stated at the lower cost or market. Cost is determined under the first-in, first-out method. |
Plant, Property and Equipment,
Plant, Property and Equipment, net | 12 Months Ended |
Dec. 31, 2015 | |
Plant, Property and Equipment, net | |
Plant, Property and Equipment, net | 6. Plant, Property and Equipment, net Plant, property and equipment, net consist of the following at December 31, 2015 and 2014, respectively: December 31, 2015 2014 Land and land improvements $ $ Buildings and leasehold improvements Machinery and equipment Construction-in-process ​ ​ ​ ​ ​ ​ ​ ​ Less accumulated depreciation and amortization ​ ​ ​ ​ ​ ​ ​ ​ Plant, property, and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation expense for the years ended December 31, 2015, 2014, and 2013, was $136.9 million, $122.9 million, and $86.1 million, respectively. The increase in depreciation expense for the year ended December 31, 2015 was primarily due to $5.5 million of capital spending, $6.5 million of accelerated depreciation mainly for two boilers taken out of service due to modernizing the Longview paper mill and $2.0 million from the Victory acquisition. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 7. Goodwill and Other Intangible Assets The following table shows changes in goodwill for the years 2015 and 2014: Paper and Packaging Distribution Total Goodwill Balances at December 31, 2013 $ $ — $ Longview acquisition — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at December 31, 2014 $ $ — $ Victory acquisition — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at December 31, 2015 $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table shows changes in other intangible assets for the years 2015 and 2014: Intangible Assets, Net Balances at December 31, 2013 $ Amortization expense ) ​ ​ ​ ​ ​ Balances at December 31, 2014 $ Victory acquisition Other Amortization expense ) ​ ​ ​ ​ ​ Balances at December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Intangible assets other than goodwill include the following: December 31, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-lived trademarks $ $ ) $ $ $ ) $ Customer lists and relationships ) ) Lease, contracts and other ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization expense for the years ended December 31, 2015, 2014, and 2013, was $25.3 million, $13.7 million, and $9.3 million, respectively. The increase in amortization expense for the year ended December 31, 2015 was primarily due to $11.1 million from the Victory acquisition. Estimated amortization expense for the next five years, beginning with 2016, is as follows: $32.5 million, $29.3 million, $29.3 million, $29.2 million, and $28.7 million. At December 31, 2015, the weighted average remaining useful life for trademarks is 21.3 years; customer relationships is 12 years; other contractual agreements is 6 years; and for intangible assets in total is 13 years. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Expenses | |
Accrued Expenses | 8. Accrued Expenses Accrued expenses consist of the following at December 31, 2015 and 2014, respectively: December 31, 2015 2014 Real and property taxes $ $ Energy costs Capital spending Customer rebates Worker's compensation Current postretirement obligation Freight Other accruals ​ ​ ​ ​ ​ ​ ​ ​ Accrued expenses $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Short-term Borrowings and Long-
Short-term Borrowings and Long-term Debt | 12 Months Ended |
Dec. 31, 2015 | |
Short-term Borrowings and Long-term Debt | |
Short-term Borrowings and Long-term Debt | 9. Short-term Borrowings and Long-term Debt Long-term debt consists of the following at December 31, 2015 and 2014, respectively: December 31, 2015 2014 Term loan A-1 under Credit Agreement with interest payable monthly at LIBOR of 0.4239% plus 1.75% at December 31, 2015 $ $ Term loan A-2 under Credit Agreement with interest payable monthly at LIBOR of 0.4239% plus 1.875% at December 31, 2015 Receivable Credit Facility with interest payable monthly at LIBOR of 0.4295% plus 0.75% at December 31, 2015 ​ ​ ​ ​ ​ ​ ​ ​ Total long-term debt Less unamortized debt issuance costs ) ) ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt, net of debt issuance costs $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest paid was $28.1 million, $27.6 million, and $20.5 million, in 2015, 2014 and 2013, respectively. The principal portion of the total long-term debt at December 31, 2015 becomes due as follows: 2016 $ — 2017 2018 2019 2020 2021 2022 ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Second Amended and Restated Credit Agreement In conjunction with the Victory acquisition, the Company entered into the Second Amended and Restated Credit Agreement (as amended from time to time, the "Credit Agreement") by and among KapStone Kraft Paper Corporation, as Borrower, the Company and certain subsidiaries of Borrower from time to time party thereto, as Guarantors, the lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer. The Credit Agreement, which provides for a senior secured credit facility (the "Credit Facility") in an initial aggregate principal amount of $1.915 billion, consisting of a Term Loan A-1 in the aggregate amount of $940.0 million, a Term Loan A-2 in the aggregate amount of $475.0 million, and a $500.0 million revolving credit facility (including a $75.0 million letter of credit sub-facility and a $45.0 million swing line loan sub-facility, the "Revolver"). The Credit Facility also includes an "accordion" feature that allows the Company, subject to certain terms and conditions, to increase the commitments under the Credit Facility. The aggregate amount of such increases is not limited if the Company maintains a pro forma total leverage ratio equal to or less than 2.5 to 1.0 after giving effect to any increase. To the extent the pro forma total leverage ratio of the Company is greater than 2.5 to 1.0 after giving effect to any increase, the aggregate amount of such increases is limited to $600.0 million. The incremental borrowings from the Credit Agreement, consisting of proceeds from Term Loan A-1, Term Loan A-2, and $115.0 million of borrowings under the Revolver were used to finance the Company's acquisition of Victory and pay certain transaction fees and expenses. On February 8, 2016, the Company entered into the First Amendment ("First Amendment") to the Credit Agreement. The First Amendment modifies, among other things, the financial covenant in the Credit Agreement related to maintenance of a maximum total leverage ratio by increasing the permitted total leverage ratio for fiscal quarters ending on or prior to June 30, 2018, and it modifies certain defined terms used in the calculation of the financial covenants in a manner favorable to the Company. The First Amendment also modifies the pricing grid applicable to interest rates and the unused commitment fee under the Credit Agreement in order to provide for an additional pricing level applicable based on the total leverage ratio of the Company. Depending on the type of borrowing, the applicable interest rate under the Credit Facility is calculated at a per annum rate equal to (a) LIBOR plus an applicable margin[,which is currently 1.75% for Term Loan A-1 Eurodollar loans, 1.875% for Term Loan A-2 Eurodollar loans and 1.75% for Revolver Eurodollar loans] or (b) the base rate that is calculated as (i) the greatest of (x) the prime rate, (y) the federal funds effective rate plus 0.50% or (z) a daily rate equal to one month LIBOR plus 1% plus (ii) an applicable margin, [which is currently 0.75% for Term Loan A-1 Eurodollar loans, 0.875% for Term Loan A-2 Eurodollar loans and 0.75% for Revolver base rate loans]. The unused portion of the Revolver is subject to an unused fee that is calculated at a per annum rate (the "Unused Fee Rate"). The applicable margin for borrowings under the Credit Facility and the Unused Fee Rate will be determined by reference to the pricing grid based on the Company's total leverage ratio. Under such pricing grid, the applicable margins for Term Loan A-1 and Revolver range from 1.00% to 2.00% for Eurodollar loans and from 0.00% to 1.00% for base rate loans, and the Unused Fee Rate range from 0.20% to 0.325%. The applicable margins for Term Loan A-2 will range from 1.125% to 2.125% for Eurodollar loans and from 0.125% to 1.25% for base rate loans. The Company incurred approximately $10.6 million of debt issuance costs associated with the Credit Agreement, which are being amortized using the effective interest method. Receivables Credit Facility Under our accounts receivable securitization program (the "Securitization Program"), certain of KapStone's subsidiaries sell, on an ongoing basis without recourse, certain trade receivables (the "Receivables") and related assets to KapStone Receivables, LLC, a Delaware limited liability company and wholly owned, bankruptcy remote subsidiary of the Company ("KAR"), pursuant to a Receivables Sale Agreement dated as of September 26, 2014 (the "Receivables Sale Agreement") among the Company, as servicer, KapStone Kraft Paper Corporation, KapStone Container Corporation, KapStone Charleston Kraft LLC and Longview Fibre Paper and Packaging, Inc., as Originators (the "Originators"),, and KAR, as buyer. KAR, in turn, sells the interests in the Receivables and related assets to certain financial institutions pursuant to a Receivables Purchase Agreement (the "Receivables Purchase Agreement") among KAR, as seller, the financial institutions from time to time party thereto as purchasers (the "Purchasers"), the Company, as servicer, and (iii) Wells Fargo Bank, N.A., as administrative agent. Pursuant to the Securitization Program, (i) the Originators will sell or contribute certain of their respective Receivables and certain related assets to KAR, a portion of the purchase price of which will be paid from the proceeds of subordinated debt advanced by the Originators to KAR, (ii) the Purchasers have committed to purchase undivided interests in the Receivables in the aggregate principal amount of up to $175.0 million, which interests shall be secured by the Receivables (the "Receivables Credit Facility"), (iii) the Company will service and administer the Receivables on behalf of KAR and (iv) the Company will provide a performance guaranty to KAR in respect of the obligations of the Originators under the Receivables Sale Agreement, including without limitation, obligations to pay purchase price credits and indemnity obligations. The Purchasers receive yield on their investments based on a spread over the LIBOR rate for each day that their investments in the Receivables are outstanding, as well as a fee calculated on the unused portion of their commitments. In June, 2015, the parties entered into (i) Amendment No. 1 to Receivables Purchase Agreement as of June 10, 2015 (the "Amendment to Receivables Purchase Agreement") amending its Receivables Purchase Agreement and (ii) Amendment No. 1 to Receivables Sale Agreement (the "Amendment to Receivables Sale Agreement" and, together with the Amendment to Receivables Purchase Agreement, the "Amendments") as of June 10, 2015 amending its Receivables Sale Agreement. Pursuant to the Amendments: • Victory was added as an "Originator" under the Receivables Sale Agreement; • the principal amount of undivided interests in the receivables the financial institutions that are parties to the Receivables Purchase Agreement (the "Purchasers") are committed to purchase was increased from up to $175.0 million to up to $275.0 million; and • the "Facility Termination Date" (as defined in the Receivables Purchase Agreement) was extended from September 26, 2015 to June 8, 2016 (the date by which the Purchasers commitment to purchase receivables will terminate). KAR is considered a wholly-owned, bankruptcy-remote variable interest entity ("VIE"). The Company has the authority to direct the activities of the VIE and, as a result, we have concluded that we maintain control of the VIE, are the primary beneficiary (as defined by accounting guidance) and, therefore, consolidate the account balances of KAR. As of December 31, 2015, $345.4 million of our receivables were sold to KAR. KAR in turn assigns a collateral interest in these receivables to a financial institution under a one-year facility (the "Receivables Credit Facility") for proceeds up to $275.0 million. The assets of KAR are not available to us until all obligations of KAR are satisfied in the event of bankruptcy or insolvency proceedings. As of December 31, 2015, the Company had $265.6 million of outstanding borrowings under its $275 million Receivables Credit Facility at an interest rate of 1.18 percent. The Company included the Receivables Credit Facility in Long-term debt on the Consolidated Balance Sheets based on management's intent to continue to refinance this agreement until the maturity of the Term loan A-l which is June 1, 2020. The Company also has the ability to refinance this short-term obligation on a long-term basis using its Revolving Credit Facility. There are no additional requirements as to when borrowings under the Revolver would need to be repaid other than the maturity date of June 1, 2020. The Company incurred approximately $0.2 million of debt issuance costs associated with the Amendment, which is being amortized using the effective interest method. Revolver As of December 31, 2015, the Company had $6.4 million outstanding under the Revolver with current availability of $476.5 million. Debt Covenants Our Credit Agreement governing our Credit Facility contains, among other provisions, covenants with which we must comply. The covenants limit our ability to, among other things, incur indebtedness, create additional liens on our assets, make investments, engage in mergers and acquisitions and sell any assets outside the normal course of business. As of December 31, 2015, the Company was in compliance with all applicable covenants in the Credit Agreement. Fair Value of Debt As of December 31, 2015, the fair value of the Company's debt approximates the carrying value of $1.6 billion as the variable interest rates re-price frequently at current market rates. The debt was valued using Level 2 inputs in the fair value hierarchy which are significant observable inputs including quoted prices for debt of similar terms and maturities. As of December 31, 2015 and 2014 our weighted-average cost of borrowings was 2.05 percent and 1.98 percent, respectively. Other Current Borrowing In 2015 and 2014, the Company entered into financing agreements of $6.6 million and $6.3 million, respectively, at an annual interest rates of approximately 1.70 percent for its annual property insurance premiums. 2015 agreement required the Company to pay three quarterly payments through the term of the financing agreement ending on December 31, 2015. |
Pension and Postretirement Bene
Pension and Postretirement Benefits | 12 Months Ended |
Dec. 31, 2015 | |
Pension and Postretirement Benefits | |
Pension and Postretirement Benefits | 10. Pension and Postretirement Benefits The Company and its subsidiaries has a defined benefit retirement plan ("Plan") for certain eligible employees. The Plan provides benefits based on years of credited service and stated dollar level multipliers for each year of service. We also sponsor postretirement plans which provide certain medical and life insurance benefits ("other benefits") to qualifying union employees. The liabilities for the benefit obligation for the eligible union groups are based on the collective bargaining agreements currently in effect. Current and future negotiations on collective bargaining agreements could have an effect on these liabilities. The changes in benefit obligations and Plan assets at December 31, 2015 and 2014 were: Pension Benefits Other Benefits 2015 2014 2015 2014 Change in Benefit Obligation Benefit obligation at beginning of year $ $ $ $ Service cost Interest cost Actuarial loss (gain) ) ) ) Participant contributions — — Benefits paid ) ) ) ) Plan amendment — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Benefit obligation at end of year $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in Plan Assets Fair value of plan assets at beginning of year $ $ $ — $ — Actual return on plan assets ) — — Employer contributions Participant contributions — — Benefits paid ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets at end of year $ $ $ — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The funded status and amounts recognized in our consolidated balance sheets at December 31, 2015 and 2014 were: Pension Benefits Other Benefits 2015 2014 2015 2014 Funded Status at End of Year $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts Recognized in Consolidated Balance Sheets: Accrued expenses $ — $ — $ ) $ ) Pension and postretirement benefits ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts Recognized in Accumulated Other Comprehensive Income / (Loss)—(Pre-tax) Total net actuarial (gain) loss $ $ $ ) $ ) Prior service cost ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-Average Discount Rate Assumption used to Determine Projected Benefit Obligations at December 31, 2015 and 2014 % % % % The accumulated benefit obligation for the defined Plan was $626.1 million and $699.2 million at December 31, 2015 and 2014, respectively. The change in our Plan funded status in 2015 is primarily due to a higher discount rate applied to the pension obligations as well as changes in mortality assumptions. In 2015, we considered the new mortality tables from the Society of Actuaries and evaluated our mortality experience to establish mortality assumptions. Based on our experience and in consultation with our actuaries, we utilized a base RP-2014 with MP-2015 projection scale. In 2014, we utilized the RP-2014 mortality tables with MP-2014 projection scale. Components of pension benefit and other postretirement benefit (income) / costs were: Pension Benefits Other Benefits 2015 2014 2013 2015 2014 2013 Service cost $ $ $ $ $ $ Interest cost Expected return on plan assets ) ) ) — — — Amortization of prior service cost (benefit) ) ) ) Amortization of net loss (gain) — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Benefit (income)/cost—Company plans ) ) ) Pension benefit cost—multi-employer plan — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total benefit (income)/cost $ ) $ ) $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective in 2015, Longview salaried personnel received a 401(k) contribution, under the Contribution Plan, rather than a cash balance plan contribution which was included in net pension benefit for the year ended December 31, 2014. Weighted-Average actuarial assumptions used to determine benefit costs were: Pension Benefits Other Benefits 2015 2014 2013 2015 2014 2013 Discount rate % % % % % % Long-term rate of return on plan assets % % % — — — The Company assumed health care cost trend rates for its postretirement benefits plans were as follows: Plans 2016 Health care cost trend rate assumed for next year % Rate to which the cost trend rate is assumed to decline (the ultimate rate) % Year the rate reaches the ultimate trend rate The effect of a one percentage point increase or decrease in the assumed health care cost trend rates at December 31, 2015 is summarized below: Change in Health Care Minus 1% Plus 1% Service and interest cost $ ) $ Accumulated benefit obligation $ ) $ Other changes in Plan assets and benefit obligations recognized in accumulated other comprehensive (income) loss were: Pension Benefits Other Benefits 2015 2014 2015 2014 Net actuarial (gain) loss $ $ $ ) $ ) Plan amendment — — — Amortization of prior service (cost) benefit ) ) ) Amortization of net gain (loss) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized before tax $ $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net expense during 2016 are as follows: Pension Benefits Other Benefits Prior service cost (benefit) $ $ ) Net actuarial loss / (gain) $ $ ) For pension plans, accumulated actuarial gains and losses in excess of 10 percent of the accumulated benefit obligation are amortized over the average future service period of approximately 9 years. As of December 31, 2015 and 2014, $(63.3) million and $(52.0) million, respectively, were included net of tax in accumulated other comprehensive income (loss). Plan Assets The fair value of Plan assets, summarized by level within the fair value hierarchy as of December 31, 2015 was as follows: Level 1 Level 2 Level 3 Total Cash and cash equivalents $ $ — $ — $ Equity securities: Common stock — — Domestic equity mutual funds — — International equity mutual funds — — U.S. large cap collective funds — — Fixed income: Bond Funds — — Corporate bonds and notes: Short-term — — Mid-term — — Long-term — — U.S. Government securities: Short-term — — Mid-term — — Long-term — — Limited partnership investments — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets measured at Net Asset Value Hedge funds: Fixed income funds Equity funds ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets at fair value $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The table below presents a summary of changes in the fair value of the Plans' level three assets as of December 31, 2015: Year ended December 31, 2015 Limited Partnership Investments Total Balance, beginning of year $ $ Transfers into Level 3 — — Transfers out of Level 3 — — Total gains or (losses): Included in changes in net assets Included in other comprehensive income — — Purchases, issuances, sales, and settlements: Purchases Issuances — — Sales ) ) Settlements — — ​ ​ ​ ​ ​ ​ ​ ​ Balance, end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The amount of total gains or losses for the year included in changes in net assets attributed to the change in unrealized gains or losses relating to assets still held at the reporting date $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The fair value of Plan assets, summarized by level within the fair value hierarchy as of December 31, 2014 was as follows: Level 1 Level 2 Level 3 Total Cash and cash equivalents $ $ — $ — $ Equity securities: Common stock — — Balance mutual funds — — International equity mutual funds — — U.S. large cap collective funds — — Fixed income: Corporate bonds and notes: Short-term — — Mid-term — — Long-term — — U.S. Government securities: Short-term — — Mid-term — — Long-term — — Limited partnership investments — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets measured at Net Asset Value Hedge funds: Fixed income funds Equity funds ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Level 1 assets are valued based on quoted prices in active markets for identical securities. Level 2 assets are valued based on other significant observable inputs including quoted prices for similar securities, yield curves, indices, etc. Level 2 assets listed above consist primarily of commingled equity investments where values are based on the net asset value of the underlying investments held, individual fixed income securities where values are based on quoted prices of similar securities and observable market data, and commingled fixed income investments where values are based on the net asset value of the underlying investments held. Level 3 assets are valued based on unobservable inputs. Quoted market prices are not available for certain investments, including real estate and limited partnership investments. These investments are recorded at their estimated fair market value; therefore, the reported value may differ from the value that would have been used had a quoted market price existed. Investments of this nature are valued by the Company based on the nature of each investment and the information available to management at the valuation date. Limited Partnership investments generally have limited liquidity and are made through long-term partnerships or joint ventures that invest in pools of capital invested in primarily non-publicly traded entities. Underlying investments include venture capital, buyout, and special situations investing. Private equity management firms typically acquire and then reorganize private companies to create increased long-term value. Valuation is based on statements received from the investment managers, transaction data, analysis of and judgments about underlying investments and other third-party information deemed reliable for the purposes of developing an estimate of fair market value. Hedge funds are privately owned institutional investment funds that generally have moderate liquidity. Hedge funds seek specified levels of return, regardless of market conditions, and generally have a low correlation to public equity and debt markets. Hedge funds often invest substantially in financial market instruments (socks, bonds, commodities, currencies, derivatives, etc.) using a broad range of trading activities to manage portfolio risks. Plan holdings in hedge funds are valued using the net asset value ("NAV") provided by the administrator of the fund and reviewed by the Company. The NAV is based on the value of the underlying assets owned by the fund, minus liabilities and divided by the number of shares or units outstanding. These assets are reported at NAV as a practical expediency. For the year ended December 31, 2015, the Plan held hedge funds with restrictions on redemption for the first year after funds are invested, and funds restricting investment redemption to a 25% gate in any given quarter. The Company believes that the reported amounts for these investments are a reasonable estimate of their fair value at December 31, 2015. However, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value at the reporting date. To develop the expected long-term rate of return on plan assets assumption for the Plan, the Company considers the current asset allocation strategy, the historical investment performance, and the expectations for future returns of each asset class. The Company's Plan weighted-average asset allocations and target asset allocations at December 31, 2015 and 2014, by asset category were as follows: 2015 2014 Target Allocation Fixed income % % % Equity securities % % % Cash % % — % Other % % — % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company's investment strategy reflects the expectation that debt securities will outperform equity securities over the long term. Assets are invested in a prudent manner to maintain the security of funds while maximizing returns within the Company's Investment Policy guidelines. The strategy is implemented utilizing assets from the categories listed. The investment goals are to provide a total return that, over the long term, increases the ratio of Plan assets to liabilities subject to an acceptable level of risk. This is accomplished through diversification of assets in accordance with the Investment Policy guidelines. Investment risk is mitigated by periodic rebalancing between asset classes as necessitated by changes in market conditions within the Investment Policy guidelines. The Company currently does not anticipate making any contributions in 2016. This estimate is based on current tax laws, plan asset performance, and liability assumptions, which are subject to change. The Company anticipates making contributions to the postretirement plans in 2016 as claims are submitted. The following table presents estimated future gross benefit payments for the Company's Plans: Pension Benefits Other Benefits 2016 $ $ 2017 2018 2019 2020 Succeeding 5 years Postretirement Benefits Other Than Pensions The Company provides postretirement health care insurance benefits through an indemnity plan and a health maintenance organization plan for certain salary and non-salary Longview employees and their dependents. Individual benefits generally continue until age 65. Effective for the majority of union employees active on June 1, 2010, the Company amended the plan such that postretirement health care insurance benefits terminated on December 31, 2013. The Company does not pre-fund these benefits, and, accordingly, there are no postretirement plan assets. The postretirement plan also includes a retiree contribution requirement for certain salaried and certain hourly employees. The retiree contribution amount is adjusted annually. Multiemployer Pension Plan In conjunction with each of the Longview and USC acquisitions, the Company assumed participation in the GCIU-Employer Retirement Fund (formerly IP&GCU—Employer Retirement Fund) (the "GCIU Fund") for hourly employees at four plant locations. The GCIU Fund is a multiemployer defined benefit retirement plan established for employers and unions in the newspaper, commercial printing, printing specialties and paper products industries that have entered into collective bargaining agreements wherein provisions are made for contributions to be made by the employers to provide retirement benefits to eligible employees or their beneficiaries. The risks of participating in the multiemployer plan are different from single-employer plans. Unlike single employer plans, assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other plan participants. All contributions to this plan are made solely by participating employers. As such, if a participating employer stops contributing to the plan, the Company may be liable for the related unfunded obligations. If the Company chooses to stop participating in the multiemployer plan, the Company may be required to pay the plan an amount based on the unfunded status of the plan. For more information related to the plan, the U.S. Department of Labor makes IRS filings and actuarial reports available to the public. The contribution schedule for the multiemployer plan is determined by the collective bargaining agreements between participating employers and participating unions. The Company does not determine the actuarial present value of accumulated plan benefits, as net assets available for benefits allocable to the individual participating employers are determined by reference to the multiemployer plan's funding status as a whole. The Company makes contributions to the multiemployer plan in accordance with its contribution schedule, including employer surcharges and additional contributions resulting from the multiemployer plan's adoption of a rehabilitation plan effective November 1, 2009. The multiemployer plan has a fiscal year end of December 31, which may impact financial information available as of December 31, 2015. The contributions made by the Company were less than 4.2 percent of the total employers' contributions to the multiemployer plan for the plan year ended December 31, 2014, the most recent date for which information was available. Contributions by the Company for the period Ended December 31, Pension Protection Act Zone Status Expiration Date of Collective- Bargaining Agreement FIP / RP Status Pending / Implemented Federal EIN Surcharge Imposed Pension Fund 2015 2014 2013 2015 2014 2013 GCIU- Employer Retirement Fund 91-6024903 Critical Critical Critical Implemented $ $ $ Yes Varies 6/16/2018 thru 9/27/2019 According to the audited financial statements of the multiemployer plan, the net assets available for benefits were $1,140.6 million and $1,150.0 million as of December 31, 2014 and 2013, respectively. An independent actuarial valuation calculated the actuarial present value of accumulated plan benefits to be $1,653 million and $1,655 million as of January 1, 2014 and 2013, respectively. At December 31, 2015, the Company's estimated withdrawal liability is $46.8 million and would only be incurred if the Company withdrew from the multiemployer pension plan. In accordance with ASC 715, Compensation—Retirement Benefits , this potential liability is not recognized in the Company's Consolidated Balance Sheets. Defined Contribution Plan We offer a 401(k) Defined Contribution Plan ("Contribution Plan") to eligible employees. The Company's monthly contributions are based on the matching of certain employee contributions or based on a union negotiated formula. The expense related to this plan was $22.3 million, $15.1 million and $12.3 million for the years ended December 31, 2015, 2014, and 2013, respectively, for the Company contributions to the Contribution Plan. The amount for the year ended December 31, 2015 includes $0.9 million attributable to Victory. Effective in 2015, Longview salaried personnel received a 401(k) contribution, under the Contribution Plan, rather than a cash balance plan contribution which was included in net pension benefit for the year ended December 31, 2014. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | 11. Income taxes The Company's U.S. federal statutory tax rates were 35.0 percent for each of 2015, 2014 and 2013. The Company's effective income tax rates for the years ended December 31, 2015, 2014 and 2013 were 34.2 percent, 34.0 percent and 34.7 percent, respectively. The Company's provision for income taxes for the years ended December 31, 2015, 2014 and 2013 consists of the following: Years Ended December 31, 2015 2014 2013 Income before provision for income taxes: United States $ $ $ Foreign — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for income taxes: Current: US federal $ $ $ State and local Foreign — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred: US federal State and local Foreign — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total United States Foreign — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total provision for income taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, 2015, 2014 and 2013, substantially all income was earned in the United States. For the year ended December 31, 2015, foreign earnings include results from Victory's operations in Mexico, which was acquired June 1, 2015. Income taxes paid, net of refunds, were $65.5 million, $77.5 million and $4.0 million in 2015, 2014 and 2013, respectively. The Company's effective income tax rate differs from the statutory federal income tax rate as follows: Years Ended December 31, 2015 2014 2013 Statutory income tax rate % % % State income taxes, net of federal income tax benefit % % % Domestic manufacturing deduction )% )% )% Changes in uncertain tax positions % )% )% Other )% — % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective income tax rate % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The tax effects of the temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2015 and 2014, for the Company are as follows: Years Ended December 31, 2015 2014 Deferred tax assets resulting from: Accrued compensation costs $ $ Pension and postretirement benefits Stock based compensation State tax credit and net operating loss carry-forwards Other ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ Valuation allowance — — ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities resulting from: Depreciable assets ) ) Goodwill and intangible assets ) ) Other ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax liabilities $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which provides that an entity shall initially recognize the financial statement effects of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. The term more likely than not means a likelihood of more than 50 percent. When measuring the tax benefit to be recorded, in concluding a tax position meets the more-likely-than-not recognition threshold we consider the amounts and probabilities of the possible outcomes that could be realized upon settlement using the facts, circumstances and information available at the reporting date. If these cumulative probabilities exceed 50 percent the tax benefit is recognized. The Company has $8.0 million of state tax net operating loss carry-forwards, which are available to reduce future taxable income in various state jurisdictions and expire between 2016 and 2030. The Company has $3.1 million of state tax credit carry-forwards, which expires between 2016 and 2034. Total unrecognized tax benefits as of December 31, 2015 and December 31, 2014 were $0.5 million. Unrecognized tax benefits and related accrued interest and penalties are included in other liabilities in the accompanying Consolidated Balance Sheets. The Company does not expect a material change in its unrecognized tax benefits within the next twelve months. In the normal course of business, the Company is subject to examination by taxing authorities. The Company's open federal tax years are 2013 and 2014. The Company has open tax years for state income tax filings generally starting in 2012. |
Stockholder's equity
Stockholder's equity | 12 Months Ended |
Dec. 31, 2015 | |
Stockholder's equity | |
Stockholder's equity | 12. Stockholder's equity Employee Stock Purchase Plan In December 2009, the Company established the KapStone Paper and Packaging Corporation Employee Stock Purchase Plan ("ESPP"), effective January 1, 2010. The ESPP allows for employees to purchase shares of Company stock at a five percent discount from market price. A total of 1,000,000 shares were reserved for future purchases under the ESPP (amount reflects the stock split announced in December 2013). A total of 34,413 shares and 20,488 shares were issued under the ESPP for the years ended December 31, 2015 and 2014, respectively. Common Stock Reserved for Issuance At December 31, 2015, approximately 5.0 million shares of common stock were reserved for issuance, including 4.2 million shares for stock awards and 0.8 million shares for the ESPP. Cash Dividends For the year ended December 31, 2015, we paid $38.7 million of dividends to shareholders. On December 10, 2015, the board of directors approved a quarterly cash dividend $0.10 per share, which was paid on January 12, 2016, to shareholders of record as of December 30, 2015. Stock Split On December 11, 2013, the board of directors declared a two-for-one stock split in the form of a stock dividend on the Company's common stock (the "stock split"). To implement the stock split, one share of common stock for each then-outstanding share of common stock was distributed on January 7, 2014 to all shareholders of record as of the close of business on December 23, 2013. The consolidated financial statements and related footnotes for all periods presented reflect the stock split. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Stock-Based Compensation | |
Stock-Based Compensation | 13. Stock-Based Compensation Share-Based Plan On May 15, 2014, stockholders of the Company approved the 2014 Incentive Plan ("2014 Plan"). Under the 2014 Plan, awards may be granted to employees, officers and directors of, and consultants and advisors to, the Company. The maximum number of shares was increased to 8,500,000 shares of our common stock which will initially be available for all awards, subject to adjustment in the event of certain corporate transactions described in the 2014 Plan. As of December 31, 2015, approximately 4.2 million shares were reserved for granting additional stock options, restricted stock awards or stock appreciation rights. If any award is forfeited or expires without being exercised, or if restricted stock is repurchased by the Company, the common shares subject to the award shall be available for additional grants under the 2014 Plan. The number of shares available under the 2014 Plan is subject to adjustment in the event of any stock split, stock dividend, recapitalization, spin-off or other similar action. Awards may be granted to employees, officers and directors of, and consultants or advisors to, the Company. Options intended to qualify, under the standards set forth in certain federal tax rules, as incentive stock options ("ISOs") may be granted only to employees while actually employed by the Company. Non-employee directors, consultants and advisors are not entitled to receive ISOs. Option awards granted under the 2014 Plan are exercisable for a period fixed by the administrator, but no longer than 10 years from the date of grant, at an exercise price which is not less than the fair market value of the shares on the date of the grant. The compensation committee of the board of directors approves all stock awards. The Company accounts for stock awards in accordance with ASC 718, Compensation—Stock Compensation , which requires that the cost resulting from all share-based payment transactions be recognized as compensation cost over the vesting period based on the fair value of the instrument on the date of grant. Total non-cash stock-based compensation expense related to stock options and restricted stock for the years ended December 31, 2015, 2014 and 2013 is as follows: Years Ended December 31, 2015 2014 2013 Stock option compensation expense $ $ $ Restricted stock unit compensation expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stock-based compensation expense $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total unrecognized stock-based compensation cost related to the stock options and restricted stock as of December 31, 2015 and 2014 is as follows: December 31, 2015 2014 Unrecognized stock option compensation expense $ $ Unrecognized restricted stock unit compensation expense ​ ​ ​ ​ ​ ​ ​ ​ Total unrecognized stock-based compensation expense $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2015, total unrecognized compensation cost related to non-vested stock options and restricted stock units is expected to be recognized over a weighted average period of 2.1 years and 2.0 years, respectively. In accordance with ASC 781, the Company recognized excess tax benefits of $1.6 million, $2.6 million and $3.5 million for the years ended December 31, 2015, 2014 and 2013, respectively. Stock Options In 2015, 2014, and 2013 the Company granted stock options for 668,362, 454,161 and 604,296 common shares, respectively, to executive officers, directors and employees as compensation for service. The Company's outstanding stock options vest as follows: 50 percent after two years and the remaining 50 percent after three years. Stock options granted in 2015, 2014, and 2013 have a contractual term of ten years. The stock options are subject to forfeiture should these employees terminate their employment with the Company for certain reasons prior to vesting in their awards, or the occurrence of certain other events such as termination with cause. The exercise price of these stock options is based on closing market price of our common stock on the date of grant. Compensation expense is recorded on an accelerated basis over the awards' vesting periods. In December 2013, the board of directors approved a two-for-one stock split. In accordance with the Company's Amended and Restated 2008 Incentive Plan, the compensation committee of the board of directors selected to increase the number of unexercised stock options. The increase in the number of options did not result in any incremental fair value or compensation cost. A summary of information related to stock options is as follows (amounts restated for the 2013 stock split): Options Weighted Average Exercise Price Weighted Average Remaining Life (Years) Intrinsic Value (dollars in thousands) Outstanding at December 31, 2012 $ Granted Exercised ) Lapsed (forfeited or cancelled) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2013 Granted Exercised ) Lapsed (forfeited or cancelled) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2014 Granted Exercised ) Lapsed (forfeited or cancelled) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at December 31, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The total intrinsic value of options exercised during 2015, 2014 and 2013 was $2.0 million, $4.5 million and $10.5 million, respectively. The weighted average fair value of the Company stock options granted in 2015, 2014 and 2013 was $9.45, $10.39 and $5.58, respectively. The fair value of awards granted in 2015, 2014 and 2013 was $6.3 million, $4.7 million and $3.4 million, respectively. The fair value was calculated using the Black-Scholes option-pricing model based on the market price at the grant date and the weighted average assumptions specific to the underlying options. Beginning in 2013, the expected life used by the Company is based on the historical average life of stock option awards. The expected volatility assumption is based on the volatility of the Company's common stock from the same time period as the expected term of the stock options. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term similar to the expected life of the stock options. Cash proceeds from the exercise of stock options during 2015, 2014, and 2013 totaled $0.9 million, $0.9 million and $1.9 million, respectively. The assumptions utilized for determining the fair value of stock options awarded during the years 2015, 2014 and 2013 are as follows: December 31, 2015 2014 2013 KapStone Stock Options Black-Scholes assumptions (weighted average): Expected volatility % % % Expected life (years) Risk-free interest rate % % % Expected dividend yield % — % — % Restricted Stock In 2015, 2014 and 2013, the Company granted restricted stock units of 214,051, 161,418 and 233,544 to executive officers, directors, and employees as compensation for service. These are restricted as to transferability until they vest three years from the grant date. These restricted shares are subject to forfeiture should these employees terminate their employment with the Company for certain reasons prior to vesting in their awards, or the occurrence of certain other events. The value of these restricted shares is based on the closing market price of the Company's common stock on the date of grant and compensation expense is recorded on a straight-line basis over the awards' vesting periods. The following table summarizes non-vested restricted stock amounts and activity (amounts in 2013and 2012 are restated for the stock split): Units Weighted Average Grant Price Outstanding at December 31, 2012 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2013 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2014 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The fair value of awards granted in 2015, 2014 and 2013 was $6.5 million, $4.9 million and $3.4 million, respectively. The fair value of awards vested in 2015, 2014 and 2013 was $2.5 million, $2.2 million and $1.0 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | 14. Commitments and Contingencies Commercial Commitments The Company's commercial commitments as of December 31, 2015 represent commitments not recorded on the balance sheet, but potentially triggered by future events, and primarily consist of letters of credit to provide security for certain transactions and operating leases as requested by third parties. The Company had $17.1 million and $4.3 million of these commitments as of December 31, 2015 and 2014, respectively, with all expiring in 2016 if not renewed. No amounts have been drawn under these letters of credit. Legal claims We are from time to time subject to various administrative and legal investigations, claims and proceedings incidental to our business, including environmental and safety matters, labor and employments matters, personal injury claims, contractual, commercial and other disputes and taxes. We establish reserves for claims and proceedings when it is probable that liabilities exist and where reasonable estimates can be made. We also maintain insurance that may limit our financial exposure for defense costs, as well as liability, if any, for claims covered by the insurance (subject also to deductibles and self-insurance amounts). While any investigation, claim or proceeding has an element of uncertainty, and we cannot predict or assure the outcome of any claim or proceeding involving the Company, we believe the outcome of any of any pending or threatened claim or proceeding (other than those that cannot be assessed due to their preliminary nature), or all of them combined, will not have a material adverse effect on our results of operations, cash flows or financial condition. The Company's subsidiary, Longview, is a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") with respect to the Lower Duwamish Waterway Superfund Site in the State of Washington (the "Site"). The U.S. Environmental Protection Agency ("EPA") asserts that the Site is contaminated as a result of discharges from various businesses and government entities located along the Lower Duwamish Waterway, including a corrugated converting plant owned and operated by Longview. In November 2014, the EPA issued a Record of Decision ("ROD") for the Site. The ROD includes a selected remedy for the Site. In the ROD, EPA states that the total estimated net present value costs (discounted at 2.3%) for the selected remedy are $342 million. Neither the Company nor Longview has received a specific monetary demand regarding its potential liability for the Site. In addition, Longview is a participant in a non-judicial allocation process with respect to the Site. Pursuant to the non-judicial allocation process, Longview and other participating parties will seek to allocate certain costs, including but not limited to the costs necessary to perform the work under the ROD. The non-judicial allocation process is not scheduled to be completed until 2019. Based upon the information available to the Company at this time, the Company cannot reasonably estimate its potential liability for this Site. Operating Leases The Company leases space for twelve of its corrugated products manufacturing plants with the majority of space leased through 2032 and approximately 60 of its distribution warehouses. The twelve corrugated products manufacturing plants' leases include a provision for a one percent rent increase beginning in 2020. Future minimum rentals under non-cancellable leases The following represents the Company's future minimum rental payments due under non-cancellable operating leases that have initial or remaining lease terms in excess of one year as of the following years: Years Ended December 31, 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company's rental expense under operating leases amounted to $36.0 million, $16.9 million and $14.9 million for the years ended December 31, 2015, 2014 and 2013, respectively. The increase in rental expense for the year ended December 31, 2015 reflects the inclusion of more than 60 distribution and fulfillment centers assumed with the Victory acquisition on June 1, 2015 including $2.2 million paid to related parties in 2015. These leases with related parties were terminated in January 2016. Purchase Obligations In conjunction with the 2008 Charleston Kraft Division acquisition, the Company entered into a 15-year fiber supply agreement. Pursuant to the agreement, expiring in 2023, the Company's North Charleston mill will purchase approximately 25 percent of its pine pulpwood and 60 percent of its saw timber requirements. The purchases are based on market prices and are accounted for as raw materials. The Company's North Charleston mill purchased approximately $39.1 million, $40.0 million and $35.6 million of materials in accordance with the agreement for years ended December 31, 2015, 2014 and 2013, respectively. The Company has committed to purchase $30.4 million of natural gas through 2018. These purchases are accounted for under the normal purchase normal sale rules. The Company can resell the natural gas committed over its requirements on the open market, and has entered into a contract to do so, should it become necessary. Limited Partnership Investments The Pension Plan invests in various limited partnership investments in accordance with their stated investment policies. As of December 31, 2015, the plan had unfunded commitments to contribute capital to limited partnerships totaling $3.5 million. Union Contract Status and Work Stoppage The union contract covering approximately 600 employees at the Longview paper mill expired in June 2014. From July 2014 through early June 2015 the Company negotiated a new contract with the union but could not agree on terms. On June 12, 2015, the union provided a "10 Day Notice," which made it possible for union employees to go out on legal strike at any time after June 22, 2015. On August 27, 2015, KapStone received a notice of a work stoppage at the Longview mill from the union. The work stoppage lasted 12 days with a production loss of approximately 29,000 tons. During the 12 day work stoppage, the Company performed certain maintenance work and thereafter commenced operating certain paper machines prior to the union workers return to work. There has been no additional work stoppage since September 7, 2015. The Longview paper mill continues to operate without an executed agreement with the union. The union contract covering approximately 540 employees at the North Charleston paper mill expired in June 2015 and continues to operate without an executed agreement with the union. |
Net Income per Share
Net Income per Share | 12 Months Ended |
Dec. 31, 2015 | |
Net Income per Share | |
Net Income per Share | 15. Net income per share The Company's basic and diluted net income per share is calculated as follows: Years Ended December 31, 2015 2014 2013 Net income $ $ $ Weighted-average number of common shares for basic net income per share Incremental effect of dilutive common stock equivalents: Unexercised stock options Unvested restricted stock awards ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average number of shares for diluted net income per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per share—basic $ $ $ Net income per share—diluted $ $ $ A total of 972,801 and 355,132 weighted average unexercised stock options were outstanding at December 31, 2015, and 2014, respectively, but were not included in the computation of diluted net income per share because the awards were anti-dilutive. Shares and earnings per share amounts for 2013 have been restated to reflect the 2013 stock split. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Information | |
Segment Information | 16. Segment Information Prior to the acquisition of Victory on June 1, 2015, the Company manufactured and sold packaging products and reported the Company's consolidated results as one segment. In connection with the acquisition, we began reporting in two segments: Paper and Packaging and Distribution. These segments represent distinct businesses that are managed separately because of differing products and services. Each of these businesses requires distinct operating and marketing strategies. Paper and Packaging: This segment manufactures and sells a wide variety of container board, corrugated products, and specialty paper for industrial and consumer markets. Distribution: Through Victory, a North American distributor of packaging materials, with its more than 60 distribution centers located in the United States, Mexico and Canada, the Company provides packaging materials and related products to a wide variety of customers. Each segment's profits and losses are measured on operating profits before interest expense and interest income. An analysis of operations by segment is as follows: Net Sales Year Ended December 31, 2015 Trade Inter- segment Total Operating Income (Loss) Depreciation and Amortization Capital Expenditures Assets Paper and Packaging: Containerboard / Corrugated products $ $ $ Specialty paper — Other — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Paper and Packaging $ $ $ $ $ $ $ Distribution(a) — Corporate — — — ) Intersegment eliminations — ) ) — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ — $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Sales Year Ended December 31, 2014 Trade Inter- segment Total Operating Income (Loss) Depreciation and Amortization Capital Expenditures Assets Paper and Packaging: Containerboard / Corrugated products $ $ — $ Specialty paper — Other — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Paper and Packaging $ $ — $ $ $ $ $ Distribution(a) — — — — — — — Corporate — — — ) Intersegment eliminations — — — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ — $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Sales Year Ended December 31, 2013 Trade Inter- segment Total Operating Income (Loss) Depreciation and Amortization Capital Expenditures Assets Paper and Packaging: Containerboard / Corrugated products $ $ — $ Specialty paper — Other — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Paper and Packaging $ $ — $ $ $ $ $ Distribution(a) — — — — — — — Corporate — — — ) Intersegment eliminations — — — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ — $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Results for the year ended December 31, 2015 includes Victory for the period June 1 through December 31, 2015 and is included in the Distribution segment. Years Ended December 31, Net sales by location: 2015 2014 2013 To customers located in the United States $ $ $ Foreign and export sales to foreign based customers ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ No foreign country accounted for more than 10 percent of consolidated net sales in 2015, 2014, or 2013. Substantially all long-lived assets are located within the United States. |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information (Unaudited) | |
Quarterly Financial Information (Unaudited) | 17. Quarterly Financial Information (Unaudited) The following tables set forth the historical unaudited quarterly financial data for 2015 and 2014. The information for each of these periods has been prepared on the same basis as the audited consolidated financial statements and, in our opinion, reflects all adjustments consisting only of normal recurring adjustments necessary to present fairly our financial results. Operating results for previous periods do not necessarily indicate results that may be achieved in any future period. Quarters Ended March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 Fiscal 2015: Net sales(1) $ $ $ $ Gross profit(1) $ $ $ $ Operating income $ $ $ $ Net income(2) $ $ $ $ Net income per share: Basic $ $ $ $ Diluted $ $ $ $ (1) Results of the Victory acquisition are included above since June 1, 2015. (2) Gross profit is defined as net sales less cost of sales, depreciation and amortization, freight, and distribution expenses. Gross profit includes planned maintenance outage costs of $8.6 million, $11.1 million, $4.4 million and $13.3 million in the quarters ended March 31, June 30, September 30 and December 31, 2015, respectively. (3) Net income includes a loss on debt extinguishment of $0.6 million for each of the quarters ended September 30 and December 31, 2015. Quarters Ended March 31, 2014 June 30, 2014 September 30, 201 4 December 31, 201 4 Fiscal 2014: Net sales $ $ $ $ Gross profit(1) $ $ $ $ Operating income $ $ $ $ Net income(2) $ $ $ $ Net income per share: Basic $ $ $ $ Diluted $ $ $ $ (1) Gross profit is defined as net sales less cost of sales, depreciation and amortization, freight, and distribution expenses. Gross profit includes planned maintenance outage costs of $14.8 million, $5.2 million, $ 5.2 million, and $10.9 million in the quarters ended March 31, June 30, September 30 and December 31, 2014, respectively. (2) Net income includes a loss on debt extinguishment of $3.0 million and $2.6 million for the quarters ended September 30 and December 31, 2014, respectively. |
Significant Accounting Polici25
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Significant Accounting Policies | |
Revenue Recognition | Revenue Recognition —Revenue is recognized when the customer takes title and assumes the risks and rewards of ownership, when the price is fixed and determinable and when collectability is reasonably assured. Sales with terms f.o.b. (free on board) shipping point are recognized at the time of shipment. For sales transactions with terms f.o.b. destination, revenue is recorded when the product is delivered to the customer's site and when title and risk of loss are transferred. Sales on consignment are recognized in revenue at the earlier of the month that the goods are consumed or after a period of time subsequent to receipt by the customer as specified by contract terms, provided all other revenue recognition criteria is met. Incentive rebates are typically paid in cash and are netted against revenue on an accrual basis as qualifying purchases are made by the customer to earn and thereby retain the rebate. During 2015, 2014, and 2013, customer rebates totaled $32.7 million, $28.3 million and $26.2 million, respectively. Freight charged to customers is recognized in net sales. |
Cost of Sales | Cost of Sales —Cost of sales includes material, labor and overhead costs, but excludes depreciation and amortization. Proceeds received from the sale of by-products generated from the paper and packaging manufacturing process are reflected as a reduction to cost of sales. Income from sales of by-products is derived primarily from the sale of tall oil, hardwood, turpentine and waste bales to third parties. During 2015, 2014 and 2013, cost of sales was reduced by $36.1 million, $35.8 million and $32.3 million, respectively for these by-product sales. |
Freight and distribution expenses | Freight and Distribution Expenses —Freight and distribution includes shipping and handling costs for product sold to customers and is excluded from cost of sales. |
Planned Maintenance Outage Costs | Planned Maintenance Outage Costs —The Company recognizes the cost of maintenance activities in the period in which they occur under the direct expense method in accordance with ASC 360, Property, Plant and Equipment . The Company performs planned maintenance outages at its paper mills. Costs of approximately $37.4 million, $36.1 million and $24.9 million related to planned maintenance outages are included in cost of sales for the years ended December 31, 2015, 2014 and 2013, respectively. |
Net Income per Common Share | Net Income per Common Share —Basic net income per share is based on the weighted average number of common shares outstanding during the period. Diluted income per share reflects the potential dilution assuming common shares were issued for the exercise of outstanding in-the-money stock options and unvested restricted stock awards and assuming the proceeds thereof were used to purchase common shares at the average market price during the period such awards were outstanding and inclusion of such shares is dilutive to net income per share. |
Concentrations of Risk | Concentrations of Risk —Financial instruments that potentially expose the Company to concentrations of credit and market risk consist primarily of cash and cash equivalents and trade accounts receivable from sales of product to third parties. When excess cash and cash equivalents are invested they are placed in investment grade commercial paper. No customer accounted for more than 10 percent of consolidated net sales in 2015, 2014 and 2013. In order to mitigate credit risk, the Company obtains letters of credit for certain export customers. For the years ended December 31, 2015, 2014 and 2013, net sales to US based customers were 82 percent, 80 percent and 80 percent, respectively, of consolidated net sales. Net sales to foreign based customers during 2015, 2014 and 2013 were 18 percent, 20 percent and 20 percent, respectively, of consolidated net sales. See Note 16—"Segment Information". The Company establishes its allowance for doubtful accounts based upon factors mainly surrounding the credit risks of specific customers and other related information. Once an account is deemed uncollectible, it is written off. At December 31, 2015, 2014 and 2013 changes to the allowance for doubtful accounts are summarized as follows ($000's): Year ended: Balance at beginning of year Acquisition Charged to Expense Write-offs Balance at end of year December 31, 2015 $ $ $ $ ) $ December 31, 2014 $ $ — $ $ ) $ December 31, 2013 $ $ — $ $ ) $ |
Foreign Currency Transactions | Foreign Currency Transactions —The Company invoices certain European customers in Euros and Mexican customers in Pesos. Outstanding amounts for such transactions are translated into U.S. dollars at the year-end rate of exchange and statements of comprehensive income items are remeasured at the weighted average exchange rates for the period. Gains and losses arising from these transactions are included in foreign exchange gains / (losses) within the Consolidated Statements of Comprehensive Income. |
Cash and Cash Equivalents | Cash and Cash Equivalents —Cash equivalents include all highly liquid investments with maturities of three months or less when purchased. |
Fair value of Financial Instruments | Fair value of Financial Instruments —The Company's cash and cash equivalents, trade accounts receivables and accounts payables are financial assets and liabilities with carrying values that approximate fair value. The Company's variable rate term loans and short-term borrowing are financial liabilities with fair values that approximate their carrying value of $1.6 billion. See Note 9—"Short-term Borrowings and Long-term debt". |
Inventories | Inventories —Inventories are valued at the lower of cost or market; whereby cost includes all direct and indirect materials, labor and manufacturing overhead, less by-product recoveries. Costs of raw materials, work-in-process, and finished goods are determined using the first-in, first-out method for the legacy KapStone locations. Replacement parts and other supplies are stated using the average cost method. Purchases and sales of inventory with the same counterparty that are entered into in contemplation of one another are combined and recorded as exchanges of inventory measured at the book value of the item exchanged. In conjunction with the Longview acquisition, KapStone acquired Longview's inventories which were stated at fair value. Cost for the Longview inventories is determined on a last-in, first-out method except for replacement parts and supplies inventories, which are valued using the average cost method. In conjunction with the Victory Acquisition, KapStone acquired Victory's inventories which were stated at fair value as of the acquisition date. The cost for the Victory inventories is stated at the lower cost or market and is determined under the first-in, first-out method. |
Plant, Property, and Equipment, net | Plant, Property, and Equipment, net —Plant, property, and equipment are stated at cost less accumulated depreciation. Property, plant, and equipment acquired in acquisitions were recorded at fair value on the date of acquisition. Depreciation is computed using the straight-line method over the assets' estimated useful lives. The range of estimated useful lives is as follows: Years Land improvements 3 - 25 Buildings 11 - 40 Machinery and equipment 3 - 30 Furniture and office equipment 5 - 10 Computer hardware and software 3 - 5 The Company accounts for costs incurred for the development of software for internal use in accordance with ASC 350 Intangibles—Goodwill and Other . This standard requires the capitalization of certain costs incurred in connection with developing or obtaining internal use software. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets —Goodwill is the excess of purchase price over the fair value of the net assets of businesses acquired. On an annual basis and in accordance with ASC 350, Intangibles—Goodwill and Other , the Company evaluates goodwill using a quantitative or qualitative assessment to determine whether it is more likely than not that fair value of any reporting unit is less than it carrying amount. If the Company determines that the fair value of the reporting unit may be less than its carrying amount, the Company evaluates goodwill using a two-step impairment test. Otherwise, the Company concludes that no impairment is indicated and does not perform the two-step impairment test. If the qualitative assessment concludes that the two-step impairment test is necessary, the first step is to compare the book value of the reporting unit, including goodwill, with its fair value. A reporting unit is an operating segment or one level below an operating segment (referred to as a "component"). A component is considered a reporting unit for purposes of goodwill testing if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component. The Company has identified three reporting units. The fair value is estimated based on a market approach and a discounted cash flow analysis, also known as the income approach, and is reconciled back to the current market capitalization for the Company to ensure that the implied control premium is reasonable. A discounted cash flow analysis requires the Company to make various judgmental assumptions, including assumptions about future cash flows, growth rates and discount rates. The assumptions about future cash flows and growth rates are based on the forecast and long-term business plans of each reporting unit. Discount rate assumptions are considered Level 3 inputs in the fair value hierarchy defined in ASC 820, Fair Value Measurements and Discounts . Management also considers market-multiple information to corroborate the fair value conclusions reached using the discounted cash flow analysis. If necessary, the second step of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. The Company's goodwill impairment analysis is performed annually at the beginning of the fourth quarter and did not result in an impairment charge for any periods presented. Intangible assets acquired in a business combination or asset purchase are initially valued at the fair market value using generally accepted valuation methods appropriate for the type of the intangible asset. Definite-lived intangible assets are amortized over their estimated useful lives and are reviewed for impairment if indicators of impairment arise. The evaluation of the impairment is based upon a comparison of the carrying amount of the intangible asset to the estimated future undiscounted cash flows expected to be generated by the asset. If the estimated undiscounted future cash flows are less than the carrying amount of the assets, the asset is considered to be impaired. If impaired, the intangible asset is written down to estimated fair market value. |
Pension and Postretirement Benefits | Pension and Postretirement Benefits —The Company provides pension and postretirement benefits to certain employees and accounts for these benefits in accordance with ASC 715, Compensation—Retirement Benefits . For financial reporting purposes, long-term assumptions are developed through consultations with actuaries. Such assumptions include the expected long-term rate of return on plan assets, discount rates, health care trend rates and mortality rates. The discount rate for the current year is based on long-term high quality bond rates. The amount of unrecognized actuarial gains and losses recognized in the current year's operations is based on amortizing the unrecognized gains or losses for each plan that exceed the larger of 10% of the projected benefit obligation or the fair value of plan assets, also known as the corridor. The amount of unrecognized gain or loss that exceeds the corridor is amortized over the average future service of the plan participants. While we believe that our assumptions are appropriate, significant differences in our actual experience or significant changes in our assumptions may materially affect our pension and other postretirement benefit obligations and our future expense. |
Income Taxes | Income Taxes —The Company accounts for income taxes under the liability method in accordance with ASC 740, Income Taxes . Accordingly, deferred income taxes are provided for the future tax consequences attributable to differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. Deferred tax assets and liabilities are measured using tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is established when necessary to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company recognizes the benefit of tax positions when it is more likely than not to be sustained on its technical merits. The Company records interest and penalties on unrecognized tax benefits in the provision for income taxes. |
Amortization of Debt Issuance Costs | Amortization of Debt Issuance Costs —The Company capitalizes costs incurred in connection with borrowings or establishment of credit facilities. These costs are amortized over the life of the borrowing or life of the credit facility using the effective interest method. For the years ended December 31, 2015, 2014 and 2013, $5.5 million, $5.7 million and $4.5 million, respectively, of debt issuance costs have been amortized and recognized within interest expense, net. In December 2015 and 2014, the Company recorded losses on debt extinguishment of $1.2 million and $5.6 million, respectively, due to voluntary prepayments totaling $103.5 million and $325.0 million, respectively, on the term loans under the Company's senior secured credit facility. |
Stock Based Compensation Expense | Stock Based Compensation Expense —The Company accounts for employee stock and stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation. Accordingly, compensation expense for the fair value of stock options, as determined on the date of grant, is recorded on an accelerated basis over the awards' vesting periods. The compensation expense for the fair value of restricted stock units, as determined on the date of grant, is recorded on a straight-line basis over the awards' vesting periods. Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from the original estimate. |
Segment Information | Segment Information —Prior to the acquisition of Victory on June 1, 2015, we manufactured and sold packaging products and reported the Company's consolidated results as one segment. In connection with the acquisition, we began reporting in two segments: Paper and Packaging and Distribution. These segments represent distinct businesses that are managed separately because of differing products and services. Each of these businesses requires distinct operating and marketing strategies. The Paper and Packaging segment produces containerboard, corrugated products and specialty paper which are sold to customers who convert our products into end-market finished products or internally to corrugating plants that produce a wide variety of products ranging from basic corrugated shipping containers to specialized packaging. The Distribution segment, which operates under the Victory and Golden State Container trade names, provides its customers comprehensive packaging solutions and services and distributes primarily corrugated packaging materials, as well as other specialty packaging materials, such as plastics, wood, void fill, tapes and stretch wraps. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09 "Revenue from Contracts with Customers". The guidance in this update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The guidance in this update supersedes the revenue recognition requirements in Accounting Standards Codification ("ASC") Topic 605, "Revenue Recognition", and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, this update supersedes some cost guidance included in Subtopic 605-35, "Revenue Recognition—Construction-Type and Production-Type Contracts". For a public entity, the amendments are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. In July 2015, the FASB approved a one-year deferral of the effective date for its new revenue standard for public and nonpublic entities reporting under GAAP. The standard will be effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods therein. Additionally the FASB approved the option to early adopt up to the original effective date (fiscal years beginning after December 15, 2016). We are currently evaluating the impact that the adoption of ASU 2014-09 will have on our financial condition, results of operations and disclosures. In April 2015, the FASB issued ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs", which changes the presentation of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. It is effective for annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. The Company does not expect the adoption of this standard to have a material impact on its consolidated balance sheets. In August 2015, the FASB issued ASU 2015-15, "Interest—Imputation of Interest" which relates to the presentation of debt issuance costs. This standard clarifies the guidance set forth in FASB ASU 2015-03, which required that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the debt liability rather than as an asset. The new pronouncement clarifies that debt issuance costs related to line-of-credit arrangements could continue to be presented as an asset and be subsequently amortized over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the arrangement. The Company does not expect the adoption of this standard to have a material impact on its consolidated balance sheets. |
Significant Accounting Polici26
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Significant Accounting Policies | |
Schedule of changes to the allowance for doubtful accounts | Year ended: Balance at beginning of year Acquisition Charged to Expense Write-offs Balance at end of year December 31, 2015 $ $ $ $ ) $ December 31, 2014 $ $ — $ $ ) $ December 31, 2013 $ $ — $ $ ) $ |
Schedule of range of estimated useful lives | Years Land improvements 3 - 25 Buildings 11 - 40 Machinery and equipment 3 - 30 Furniture and office equipment 5 - 10 Computer hardware and software 3 - 5 |
Victory Acquisition (Tables)
Victory Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Victory Acquisition | |
Summary of acquisition consideration | Purchase price $ Working capital adjustments ​ ​ ​ ​ ​ Cash paid $ Fair value of contingent consideration ​ ​ ​ ​ ​ Total acquisition consideration $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of preliminary allocation of acquisition consideration to the fair value of assets acquired and liabilities assumed | Amounts Recognized at Acquisition Date(1) Mesurement Period Adjustments(2) Amounts Recognized as of Acquisition Date (as Adjusted) Trade accounts receivable $ $ ) $ Other receivables Inventories ) Prepaid expenses and other current assets Plant, property and equipment ) Other assets Intangible assets Accounts payable ) ) Accrued expenses ) ) ) Accrued compensation costs ) ) Other noncurrent liabilities ) ) Goodwill ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total acquisition consideration $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Preliminary allocation of Victory acquisition consideration to the fair value of the assets acquired and liabilities assumed at the date of acquisition. (2) The measurement period adjustments include the following: • Property, plant and equipment were adjusted downward by $0.8 million as accounting policies were aligned across the Company. • Trade accounts receivable and inventory were adjusted by $0.4 million and $0.3 million, respectively, resulting from minor adjustments to management estimates. • Certain prepaid expenses and liability amounts have been reclassified to conform to the Company's accounting policies. |
Summary of acquired identified intangible asset and the respective fair value and estimated useful life | Estimated Useful Life in Years Fair Value Customer relationships 14 $ Definite-lived trademarks 10 - 25 Favorable / unfavorable leases 6 Non-compete agreements 3 - 5 ​ ​ ​ ​ ​ ​ ​ Total fair value of intangible assets $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of estimated amortization expense for the next five years | 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Victory Acquisition | |
Victory Acquisition | |
Schedule of unaudited pro forma data | Years Ended December 31, (unaudited) 2015 2014 Net sales $ $ Net income $ $ Net income per share—diluted $ $ |
Longview Acquisition (Tables)
Longview Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Longview | |
Longview Acquisition | |
Schedule of unaudited pro forma data | Year Ended December 31, 2013 (unaudited) Net sales $ Net income $ |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventories | |
Schedule of Inventories | December 31, 2015 2014 Raw materials $ $ Work in process Finished goods Replacement parts and supplies ​ ​ ​ ​ ​ ​ ​ ​ Inventory at FIFO costs LIFO inventory reserves ) ​ ​ ​ ​ ​ ​ ​ ​ Inventories $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Plant, Property and Equipment30
Plant, Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Plant, Property and Equipment, net | |
Schedule of plant, property and equipment, net | December 31, 2015 2014 Land and land improvements $ $ Buildings and leasehold improvements Machinery and equipment Construction-in-process ​ ​ ​ ​ ​ ​ ​ ​ Less accumulated depreciation and amortization ​ ​ ​ ​ ​ ​ ​ ​ Plant, property, and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Goodwill and Other Intangible31
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Other Intangible Assets | |
Schedule of changes in goodwill | Paper and Packaging Distribution Total Goodwill Balances at December 31, 2013 $ $ — $ Longview acquisition — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at December 31, 2014 $ $ — $ Victory acquisition — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at December 31, 2015 $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of changes in other intangible assets | Intangible Assets, Net Balances at December 31, 2013 $ Amortization expense ) ​ ​ ​ ​ ​ Balances at December 31, 2014 $ Victory acquisition Other Amortization expense ) ​ ​ ​ ​ ​ Balances at December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Intangible assets other than goodwill | December 31, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-lived trademarks $ $ ) $ $ $ ) $ Customer lists and relationships ) ) Lease, contracts and other ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Expenses | |
Schedule of accrued expenses | December 31, 2015 2014 Real and property taxes $ $ Energy costs Capital spending Customer rebates Worker's compensation Current postretirement obligation Freight Other accruals ​ ​ ​ ​ ​ ​ ​ ​ Accrued expenses $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Short-term Borrowings and Lon33
Short-term Borrowings and Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Short-term Borrowings and Long-term Debt | |
Schedule of long-term debt | December 31, 2015 2014 Term loan A-1 under Credit Agreement with interest payable monthly at LIBOR of 0.4239% plus 1.75% at December 31, 2015 $ $ Term loan A-2 under Credit Agreement with interest payable monthly at LIBOR of 0.4239% plus 1.875% at December 31, 2015 Receivable Credit Facility with interest payable monthly at LIBOR of 0.4295% plus 0.75% at December 31, 2015 ​ ​ ​ ​ ​ ​ ​ ​ Total long-term debt Less unamortized debt issuance costs ) ) ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt, net of debt issuance costs $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of annual principal repayments, paid quarterly | The principal portion of the total long-term debt at December 31, 2015 becomes due as follows: 2016 $ — 2017 2018 2019 2020 2021 2022 ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Pension Plan and Postretirement
Pension Plan and Postretirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Pension and Postretirement Benefits | |
Schedule of changes in benefit obligations and Plan assets | Pension Benefits Other Benefits 2015 2014 2015 2014 Change in Benefit Obligation Benefit obligation at beginning of year $ $ $ $ Service cost Interest cost Actuarial loss (gain) ) ) ) Participant contributions — — Benefits paid ) ) ) ) Plan amendment — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Benefit obligation at end of year $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in Plan Assets Fair value of plan assets at beginning of year $ $ $ — $ — Actual return on plan assets ) — — Employer contributions Participant contributions — — Benefits paid ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets at end of year $ $ $ — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of funded status and amounts recognized in Consolidated Balance Sheets | Pension Benefits Other Benefits 2015 2014 2015 2014 Funded Status at End of Year $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts Recognized in Consolidated Balance Sheets: Accrued expenses $ — $ — $ ) $ ) Pension and postretirement benefits ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts Recognized in Accumulated Other Comprehensive Income / (Loss)—(Pre-tax) Total net actuarial (gain) loss $ $ $ ) $ ) Prior service cost ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-Average Discount Rate Assumption used to Determine Projected Benefit Obligations at December 31, 2015 and 2014 % % % % |
Schedule of pension and other postretirement benefit (income)/costs | Pension Benefits Other Benefits 2015 2014 2013 2015 2014 2013 Service cost $ $ $ $ $ $ Interest cost Expected return on plan assets ) ) ) — — — Amortization of prior service cost (benefit) ) ) ) Amortization of net loss (gain) — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Benefit (income)/cost—Company plans ) ) ) Pension benefit cost—multi-employer plan — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total benefit (income)/cost $ ) $ ) $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of weighted-average actuarial assumptions used to determine benefit costs | Pension Benefits Other Benefits 2015 2014 2013 2015 2014 2013 Discount rate % % % % % % Long-term rate of return on plan assets % % % — — — |
Schedule of assumed health care cost trend rates postretirement benefits plans | Plans 2016 Health care cost trend rate assumed for next year % Rate to which the cost trend rate is assumed to decline (the ultimate rate) % Year the rate reaches the ultimate trend rate |
Summary of the effect of a one percentage point increase or decrease in the assumed health care cost trend rates | The effect of a one percentage point increase or decrease in the assumed health care cost trend rates at December 31, 2015 is summarized below: Change in Health Care Minus 1% Plus 1% Service and interest cost $ ) $ Accumulated benefit obligation $ ) $ |
Schedule of other changes in Plan assets and benefit obligations recognized in accumulated other comprehensive (income) loss | Pension Benefits Other Benefits 2015 2014 2015 2014 Net actuarial (gain) loss $ $ $ ) $ ) Plan amendment — — — Amortization of prior service (cost) benefit ) ) ) Amortization of net gain (loss) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized before tax $ $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net expense | The amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net expense during 2016 are as follows: Pension Benefits Other Benefits Prior service cost (benefit) $ $ ) Net actuarial loss / (gain) $ $ ) |
Summary of fair value of Plan assets by level within the fair value hierarchy | The fair value of Plan assets, summarized by level within the fair value hierarchy as of December 31, 2015 was as follows: Level 1 Level 2 Level 3 Total Cash and cash equivalents $ $ — $ — $ Equity securities: Common stock — — Domestic equity mutual funds — — International equity mutual funds — — U.S. large cap collective funds — — Fixed income: Bond Funds — — Corporate bonds and notes: Short-term — — Mid-term — — Long-term — — U.S. Government securities: Short-term — — Mid-term — — Long-term — — Limited partnership investments — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets measured at Net Asset Value Hedge funds: Fixed income funds Equity funds ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets at fair value $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The fair value of Plan assets, summarized by level within the fair value hierarchy as of December 31, 2014 was as follows: Level 1 Level 2 Level 3 Total Cash and cash equivalents $ $ — $ — $ Equity securities: Common stock — — Balance mutual funds — — International equity mutual funds — — U.S. large cap collective funds — — Fixed income: Corporate bonds and notes: Short-term — — Mid-term — — Long-term — — U.S. Government securities: Short-term — — Mid-term — — Long-term — — Limited partnership investments — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets measured at Net Asset Value Hedge funds: Fixed income funds Equity funds ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of changes in the fair value of the Plan's level three assets | Year ended December 31, 2015 Limited Partnership Investments Total Balance, beginning of year $ $ Transfers into Level 3 — — Transfers out of Level 3 — — Total gains or (losses): Included in changes in net assets Included in other comprehensive income — — Purchases, issuances, sales, and settlements: Purchases Issuances — — Sales ) ) Settlements — — ​ ​ ​ ​ ​ ​ ​ ​ Balance, end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The amount of total gains or losses for the year included in changes in net assets attributed to the change in unrealized gains or losses relating to assets still held at the reporting date $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of the Company's pension plan weighted-average asset allocations and target asset allocations by asset category | 2015 2014 Target Allocation Fixed income % % % Equity securities % % % Cash % % — % Other % % — % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of estimated future benefit payments | Pension Benefits Other Benefits 2016 $ $ 2017 2018 2019 2020 Succeeding 5 years |
Schedule of multiemployer pension plan | Contributions by the Company for the period Ended December 31, Pension Protection Act Zone Status Expiration Date of Collective- Bargaining Agreement FIP / RP Status Pending / Implemented Federal EIN Surcharge Imposed Pension Fund 2015 2014 2013 2015 2014 2013 GCIU- Employer Retirement Fund 91-6024903 Critical Critical Critical Implemented $ $ $ Yes Varies 6/16/2018 thru 9/27/2019 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Schedule of provision for income taxes | Years Ended December 31, 2015 2014 2013 Income before provision for income taxes: United States $ $ $ Foreign — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for income taxes: Current: US federal $ $ $ State and local Foreign — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred: US federal State and local Foreign — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total United States Foreign — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total provision for income taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of effective tax rate difference from the statutory federal income tax rate | Years Ended December 31, 2015 2014 2013 Statutory income tax rate % % % State income taxes, net of federal income tax benefit % % % Domestic manufacturing deduction )% )% )% Changes in uncertain tax positions % )% )% Other )% — % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective income tax rate % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of significant portion of deferred tax assets and liabilities | Years Ended December 31, 2015 2014 Deferred tax assets resulting from: Accrued compensation costs $ $ Pension and postretirement benefits Stock based compensation State tax credit and net operating loss carry-forwards Other ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ Valuation allowance — — ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities resulting from: Depreciable assets ) ) Goodwill and intangible assets ) ) Other ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax liabilities $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stock-Based Compensation | |
Schedule of total stock-based compensation expense | Years Ended December 31, 2015 2014 2013 Stock option compensation expense $ $ $ Restricted stock unit compensation expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stock-based compensation expense $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of total unrecognized stock-based compensation | December 31, 2015 2014 Unrecognized stock option compensation expense $ $ Unrecognized restricted stock unit compensation expense ​ ​ ​ ​ ​ ​ ​ ​ Total unrecognized stock-based compensation expense $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of stock options amounts and activity | Options Weighted Average Exercise Price Weighted Average Remaining Life (Years) Intrinsic Value (dollars in thousands) Outstanding at December 31, 2012 $ Granted Exercised ) Lapsed (forfeited or cancelled) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2013 Granted Exercised ) Lapsed (forfeited or cancelled) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2014 Granted Exercised ) Lapsed (forfeited or cancelled) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at December 31, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of the assumptions utilized for calculating the fair value of stock options | December 31, 2015 2014 2013 KapStone Stock Options Black-Scholes assumptions (weighted average): Expected volatility % % % Expected life (years) Risk-free interest rate % % % Expected dividend yield % — % — % |
Summary of unvested restricted stock units amounts and activity | Units Weighted Average Grant Price Outstanding at December 31, 2012 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2013 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2014 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies | |
Schedule of future minimum rental payments due under non-cancellable operating leases that have initial or remaining lease terms in excess of one year | Years Ended December 31, 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Net Income per Share (Tables)
Net Income per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Net Income per Share | |
Schedule of basic and diluted net income per share | Years Ended December 31, 2015 2014 2013 Net income $ $ $ Weighted-average number of common shares for basic net income per share Incremental effect of dilutive common stock equivalents: Unexercised stock options Unvested restricted stock awards ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average number of shares for diluted net income per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per share—basic $ $ $ Net income per share—diluted $ $ $ |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Information | |
An analysis of operations by reportable segment | Net Sales Year Ended December 31, 2015 Trade Inter- segment Total Operating Income (Loss) Depreciation and Amortization Capital Expenditures Assets Paper and Packaging: Containerboard / Corrugated products $ $ $ Specialty paper — Other — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Paper and Packaging $ $ $ $ $ $ $ Distribution(a) — Corporate — — — ) Intersegment eliminations — ) ) — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ — $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Sales Year Ended December 31, 2014 Trade Inter- segment Total Operating Income (Loss) Depreciation and Amortization Capital Expenditures Assets Paper and Packaging: Containerboard / Corrugated products $ $ — $ Specialty paper — Other — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Paper and Packaging $ $ — $ $ $ $ $ Distribution(a) — — — — — — — Corporate — — — ) Intersegment eliminations — — — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ — $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Sales Year Ended December 31, 2013 Trade Inter- segment Total Operating Income (Loss) Depreciation and Amortization Capital Expenditures Assets Paper and Packaging: Containerboard / Corrugated products $ $ — $ Specialty paper — Other — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Paper and Packaging $ $ — $ $ $ $ $ Distribution(a) — — — — — — — Corporate — — — ) Intersegment eliminations — — — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ — $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Results for the year ended December 31, 2015 includes Victory for the period June 1 through December 31, 2015 and is included in the Distribution segment. |
Net sales by location | Years Ended December 31, Net sales by location: 2015 2014 2013 To customers located in the United States $ $ $ Foreign and export sales to foreign based customers ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Quarterly Financial Informati40
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information (Unaudited) | |
Summary of quarterly supplemental consolidated financial information | Quarters Ended March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 Fiscal 2015: Net sales(1) $ $ $ $ Gross profit(1) $ $ $ $ Operating income $ $ $ $ Net income(2) $ $ $ $ Net income per share: Basic $ $ $ $ Diluted $ $ $ $ (1) Results of the Victory acquisition are included above since June 1, 2015. (2) Gross profit is defined as net sales less cost of sales, depreciation and amortization, freight, and distribution expenses. Gross profit includes planned maintenance outage costs of $8.6 million, $11.1 million, $4.4 million and $13.3 million in the quarters ended March 31, June 30, September 30 and December 31, 2015, respectively. (3) Net income includes a loss on debt extinguishment of $0.6 million for each of the quarters ended September 30 and December 31, 2015. Quarters Ended March 31, 2014 June 30, 2014 September 30, 2014 December 31, 2014 Fiscal 2014: Net sales $ $ $ $ Gross profit(1) $ $ $ $ Operating income $ $ $ $ Net income(2) $ $ $ $ Net income per share: Basic $ $ $ $ Diluted $ $ $ $ (1) Gross profit is defined as net sales less cost of sales, depreciation and amortization, freight, and distribution expenses. Gross profit includes planned maintenance outage costs of $14.8 million, $5.2 million, $ 5.2 million, and $10.9 million in the quarters ended March 31, June 30, September 30 and December 31, 2014, respectively. (2) Net income includes a loss on debt extinguishment of $3.0 million and $2.6 million for the quarters ended September 30 and December 31, 2014, respectively. |
Description of Business and B41
Description of Business and Basis of Presentation (Details) | Jul. 18, 2013 |
Longview | |
Longview Acquisition | |
Percentage of interest acquired in acquisition transaction | 100.00% |
Description of Business and B42
Description of Business and Basis of Presentation - ASU 2015-17 (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accounting standards update 2015-17 | ||
Non-current deferred tax liabilities | $ 418,479 | $ 414,283 |
Accounting Standards Update 2015-17 | Adjustments for New Accounting Principle, Early Adoption | ||
Accounting standards update 2015-17 | ||
Current deferred income tax liabilities | (2,000) | |
Non-current deferred tax liabilities | $ 2,000 |
Significant Accounting Polici43
Significant Accounting Policies - Concentration of Risk - (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue Recognition | |||||||||||
Customer rebates | $ 32.7 | $ 28.3 | $ 26.2 | ||||||||
Cost of Sales | |||||||||||
Reduction in cost of sales | 36.1 | 35.8 | 32.3 | ||||||||
Planned Maintenance Outage Costs | |||||||||||
Planned maintenance outages | $ 13.3 | $ 4.4 | $ 11.1 | $ 8.6 | $ 10.9 | $ 5.2 | $ 5.2 | $ 14.8 | $ 37.4 | $ 36.1 | $ 24.9 |
Net sales. | Sales by geographical location | US based customers | |||||||||||
Concentrations of Risk | |||||||||||
Net sales (as a percent) | 82.00% | 80.00% | 80.00% | ||||||||
Net sales. | Sales by geographical location | Foreign based customers | |||||||||||
Concentrations of Risk | |||||||||||
Net sales (as a percent) | 18.00% | 20.00% | 20.00% |
Significant Accounting Polici44
Significant Accounting Policies - Allowance for Doubtful Accounts - (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Changes to the allowance for doubtful accounts | |||
Balance at beginning of year | $ 285 | $ 682 | $ 96 |
Acquisition | 742 | ||
Charged to Expense | 368 | 217 | 607 |
Write-off | (311) | (614) | (21) |
Balance at end of year | 1,084 | $ 285 | $ 682 |
Fair value of Financial Instruments | |||
Fair value of variable rate term loan and short-term borrowings | $ 1,600,000 |
Significant Accounting Polici45
Significant Accounting Policies - Property, Plant, and Equipment (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Land Improvements | Minimum | |
Plant, property and equipment, net | |
Estimated useful lives | 3 years |
Land Improvements | Maximum | |
Plant, property and equipment, net | |
Estimated useful lives | 25 years |
Buildings | Minimum | |
Plant, property and equipment, net | |
Estimated useful lives | 11 years |
Buildings | Maximum | |
Plant, property and equipment, net | |
Estimated useful lives | 40 years |
Machinery and equipment | Minimum | |
Plant, property and equipment, net | |
Estimated useful lives | 3 years |
Machinery and equipment | Maximum | |
Plant, property and equipment, net | |
Estimated useful lives | 30 years |
Furniture and office equipment | Minimum | |
Plant, property and equipment, net | |
Estimated useful lives | 5 years |
Furniture and office equipment | Maximum | |
Plant, property and equipment, net | |
Estimated useful lives | 10 years |
Computer hardware and software | Minimum | |
Plant, property and equipment, net | |
Estimated useful lives | 3 years |
Computer hardware and software | Maximum | |
Plant, property and equipment, net | |
Estimated useful lives | 5 years |
Significant Accounting Polici46
Significant Accounting Policies - Amortization of Debt Issuance Costs (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Significant Accounting Policies | ||||||
Number of reporting units | item | 3 | |||||
Amortization of Debt Issuance Costs | ||||||
Amortization of debt issuance costs | $ 5,546 | $ 5,696 | $ 4,489 | |||
Loss on debt extinguishment | $ 600 | $ 2,600 | $ 3,000 | 1,218 | 5,617 | |
Voluntary prepayments on term loans | $ 103,500 | $ 325,000 | ||||
Segment information | ||||||
Number of operating segments | item | 1 |
Victory Packaging Acquisition -
Victory Packaging Acquisition - Acquisition Details (Details) - USD ($) $ in Thousands | Jun. 01, 2015 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Victory Acquisition | ||||
Long-term debt | $ 1,564,177 | $ 1,062,238 | ||
Second Amended and Restated Credit Agreement | ||||
Victory Acquisition | ||||
Long-term debt | $ 1,915,000 | |||
Debt issuance costs | 10,600 | |||
Term Loan A2 | ||||
Victory Acquisition | ||||
Long-term debt | 475,000 | 464,313 | 231,113 | |
Term Loan A1 | ||||
Victory Acquisition | ||||
Long-term debt | $ 940,000 | 834,250 | $ 664,125 | |
Victory Acquisition | ||||
Victory Acquisition | ||||
Percentage of interest acquired in acquisition transaction | 100.00% | |||
Total consideration, net of cash acquired | $ 615,000 | |||
Working capital adjustments | 2,046 | |||
Escrow to fund certain limited indemnity obligations | $ 40,000 | |||
Threshold period from closing of sale for potential additional contingent consideration | 30 months | |||
Fair value of contingent consideration | $ 9,600 | 13,300 | ||
Victory Acquisition | Maximum | ||||
Victory Acquisition | ||||
Contingent consideration if certain performance criteria are satisfied | 25,000 | |||
Revolver | Second Amended and Restated Credit Agreement | ||||
Victory Acquisition | ||||
Long-term debt | 500,000 | |||
Maximum borrowing capacity | $ 600,000 | |||
Selling, general and administrative expenses | Victory Acquisition | ||||
Victory Acquisition | ||||
Fair value of contingent consideration | $ 3,700 | |||
Transaction fees and expenses related to due diligence, advisory and legal services | $ 2,900 |
Victory Packaging Acquisition48
Victory Packaging Acquisition - Acquisition Consideration (Details) - Victory Acquisition - USD ($) $ in Thousands | Jun. 01, 2015 | Dec. 31, 2015 |
Victory Acquisition | ||
Purchase price | $ 615,000 | |
Working capital adjustments | 2,046 | |
Cash paid | 617,046 | $ 617,046 |
Fair value of contingent consideration | 9,600 | $ 13,300 |
Total acquisition consideration | $ 626,646 |
Victory Packaging Acquisition49
Victory Packaging Acquisition - Preliminary Allocation of the Victory Acquisition Consideration (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 01, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Fair value of the assets acquired and liabilities assumed | |||||
Goodwill | $ 704,592 | $ 533,851 | $ 528,515 | ||
Victory Acquisition | |||||
Fair value of the assets acquired and liabilities assumed | |||||
Goodwill | $ 170,700 | ||||
Victory Acquisition | Amounts recognized at acquisition date | |||||
Fair value of the assets acquired and liabilities assumed | |||||
Trade accounts receivable | $ 144,497 | ||||
Other receivables | 4,302 | ||||
Inventories | 90,542 | ||||
Prepaid expenses and other current assets | 1,746 | ||||
Plant, property and equipment | 18,865 | ||||
Other assets | 3,104 | ||||
Intangible assets | 257,700 | ||||
Accounts payable | (47,795) | ||||
Accrued expenses | (6,905) | ||||
Accrued compensation costs | (8,778) | ||||
Other noncurrent liabilities | (17) | ||||
Goodwill | 167,703 | ||||
Total acquisition consideration | $ 624,964 | ||||
Victory Acquisition | Measurement period adjustments | |||||
Fair value of the assets acquired and liabilities assumed | |||||
Trade accounts receivable | (408) | ||||
Inventories | (254) | ||||
Prepaid expenses and other current assets | 2,897 | ||||
Plant, property and equipment | (794) | ||||
Intangible assets | 100 | ||||
Accrued expenses | (2,897) | ||||
Goodwill | 3,038 | ||||
Total acquisition consideration | 1,682 | ||||
Victory Acquisition | Amounts recognized as at acquisition date (as adjusted) | |||||
Fair value of the assets acquired and liabilities assumed | |||||
Trade accounts receivable | 144,089 | ||||
Other receivables | 4,302 | ||||
Inventories | 90,288 | ||||
Prepaid expenses and other current assets | 4,643 | ||||
Plant, property and equipment | 18,071 | ||||
Other assets | 3,104 | ||||
Intangible assets | 257,800 | ||||
Accounts payable | (47,795) | ||||
Accrued expenses | (9,802) | ||||
Accrued compensation costs | (8,778) | ||||
Other noncurrent liabilities | (17) | ||||
Goodwill | 170,741 | ||||
Total acquisition consideration | $ 626,646 |
Victory Packaging Acquisition50
Victory Packaging Acquisition - Preliminary Allocation of the Victory Acquisition Consideration, Subscripts (Details) - Victory Acquisition - Measurement period adjustments $ in Thousands | Sep. 30, 2015USD ($) |
Fair value of the assets acquired and liabilities assumed | |
Plant, property and equipment | $ (794) |
Trade accounts receivable | (408) |
Inventories | $ (254) |
Victory Packaging Acquisition51
Victory Packaging Acquisition - Goodwill (Details) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2015USD ($)T | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Victory Acquisition | ||||
Goodwill | $ 704,592 | $ 533,851 | $ 528,515 | |
Victory Acquisition | ||||
Victory Acquisition | ||||
Goodwill | $ 170,700 | |||
Number Of Units Transferred From Acquiree Existing Suppliers To Entity Production Resulting From Acquisition | T | 115,000 |
Victory Packaging Acquisition52
Victory Packaging Acquisition - Summary of Acquired Identified Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 01, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Acquired finite-lived intangible assets | ||||
Estimated Useful Life ( in Years) | 13 years | |||
Estimated amortization expense | ||||
2,016 | $ 32,500 | |||
2,017 | 29,300 | |||
2,018 | 29,300 | |||
2,019 | 29,200 | |||
2,020 | 28,700 | |||
Total | $ 344,583 | $ 110,077 | $ 123,745 | |
Definite-lived trademarks | ||||
Acquired finite-lived intangible assets | ||||
Estimated Useful Life ( in Years) | 21 years 3 months 18 days | |||
Estimated amortization expense | ||||
Total | $ 40,697 | $ 12,024 | ||
Victory Acquisition | ||||
Acquired finite-lived intangible assets | ||||
Fair Value | 257,800 | |||
Estimated amortization expense | ||||
2,016 | $ 19,088 | |||
2,017 | 19,088 | |||
2,018 | 19,078 | |||
2,019 | 18,969 | |||
2,020 | 18,617 | |||
Thereafter | 151,825 | |||
Total | $ 246,665 | |||
Victory Acquisition | Customer relationships | ||||
Acquired finite-lived intangible assets | ||||
Estimated Useful Life ( in Years) | 14 years | |||
Fair Value | 210,000 | |||
Fair Value Inputs | ||||
Discount rate (as a percent) | 15.00% | |||
Present value of cash flows as a rate of initial value (as a percent) | 90.00% | |||
Victory Acquisition | Definite-lived trademarks | ||||
Acquired finite-lived intangible assets | ||||
Fair Value | 33,500 | |||
Victory Acquisition | Favorable / unfavorable leases | ||||
Acquired finite-lived intangible assets | ||||
Fair Value | 11,200 | |||
Victory Acquisition | Non-compete agreements | ||||
Acquired finite-lived intangible assets | ||||
Fair Value | $ 3,100 | |||
Victory Acquisition | Minimum | Definite-lived trademarks | ||||
Acquired finite-lived intangible assets | ||||
Estimated Useful Life ( in Years) | 10 years | |||
Victory Acquisition | Minimum | Non-compete agreements | ||||
Acquired finite-lived intangible assets | ||||
Estimated Useful Life ( in Years) | 3 years | |||
Victory Acquisition | Maximum | Customer relationships | ||||
Acquired finite-lived intangible assets | ||||
Estimated Useful Life ( in Years) | 14 years | |||
Victory Acquisition | Maximum | Definite-lived trademarks | ||||
Acquired finite-lived intangible assets | ||||
Estimated Useful Life ( in Years) | 25 years | |||
Victory Acquisition | Maximum | Favorable / unfavorable leases | ||||
Acquired finite-lived intangible assets | ||||
Estimated Useful Life ( in Years) | 6 years | |||
Victory Acquisition | Maximum | Non-compete agreements | ||||
Acquired finite-lived intangible assets | ||||
Estimated Useful Life ( in Years) | 5 years |
Victory Packaging Acquisition53
Victory Packaging Acquisition - Unaudited Consolidated Pro Forma Financial Information (Details) - Victory Acquisition - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2015 | |
Victory Acquisition | |||
Net sales | $ 582,900 | ||
Operating income | $ 20,700 | ||
Net sales | $ 3,166,725 | $ 3,247,218 | |
Net income | $ 105,466 | $ 172,954 | |
Net income per share - diluted (in dollars per share) | $ 1.08 | $ 1.77 |
Longview Acquisition - Acquisit
Longview Acquisition - Acquisition Details (Details) - Longview T in Millions, $ in Millions | Jul. 18, 2013USD ($)itemT |
Longview Acquisition | |
Percentage of interest acquired in acquisition transaction | 100.00% |
Purchase price (net cash acquired) | $ | $ 1,025 |
Working capital adjustments | $ | $ 41.5 |
Number of paper machines | item | 5 |
Annual production capacity of paper machines (in tons) | T | 1.3 |
Number of converting facilities located in Pacific Northwest | item | 7 |
Longview Acquisition - Unaudite
Longview Acquisition - Unaudited pro forma data - (Details) - Longview $ in Thousands | 12 Months Ended |
Dec. 31, 2013USD ($) | |
Unaudited pro forma data | |
Net sales | $ 2,237,677 |
Net income | $ 157,367 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Inventories | ||
Raw materials | $ 101,250 | $ 99,390 |
Work in process | 6,165 | 3,634 |
Finished goods | 149,774 | 63,639 |
Replacement parts and supplies | 79,717 | 70,026 |
Inventory at FIFO costs | 336,906 | 236,689 |
LIFO inventory reserves | (1,003) | 1,640 |
Inventories | 335,903 | 238,329 |
Finished goods consigned to third parties | 13,600 | $ 11,900 |
Victory Acquisition | ||
Inventories | ||
Finished goods | $ 83,200 |
Plant, Property and Equipment57
Plant, Property and Equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Plant, property and equipment, net | |||
Plant, property and equipment, gross | $ 1,937,392 | $ 1,798,937 | |
Less accumulated depreciation and amortization | 531,246 | 412,267 | |
Plant, property and equipment, net | 1,406,146 | 1,386,670 | |
Depreciation expense | 136,900 | 122,900 | $ 86,100 |
Capital Expenditures | 126,756 | 137,232 | $ 96,706 |
Land and land improvements | |||
Plant, property and equipment, net | |||
Plant, property and equipment, gross | 75,033 | 74,434 | |
Buildings and leasehold improvements | |||
Plant, property and equipment, net | |||
Plant, property and equipment, gross | 158,274 | 151,542 | |
Machinery and equipment | |||
Plant, property and equipment, net | |||
Plant, property and equipment, gross | 1,650,430 | 1,529,715 | |
Construction-in-process | |||
Plant, property and equipment, net | |||
Plant, property and equipment, gross | 53,655 | $ 43,246 | |
Victory Acquisition | |||
Plant, property and equipment, net | |||
Depreciation expense | 2,000 | ||
Capital Expenditures | 5,500 | ||
Accelerated depreciation | $ 6,500 |
Goodwill and Other Intangible58
Goodwill and Other Intangible Assets - Changes in Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill | ||
Balances at the beginning of the period | $ 533,851 | $ 528,515 |
Balance at the end of the period | 704,592 | 533,851 |
Longview | ||
Goodwill | ||
Acquisitions | 5,336 | |
Victory Acquisition | ||
Goodwill | ||
Acquisitions | 170,741 | |
Paper And Packaging | ||
Goodwill | ||
Balances at the beginning of the period | 533,851 | 528,515 |
Balance at the end of the period | 533,851 | 533,851 |
Paper And Packaging | Longview | ||
Goodwill | ||
Acquisitions | $ 5,336 | |
Distribution | ||
Goodwill | ||
Balance at the end of the period | 170,741 | |
Distribution | Victory Acquisition | ||
Goodwill | ||
Acquisitions | $ 170,741 |
Goodwill and Other Intangible59
Goodwill and Other Intangible Assets - Changes in Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Intangible Assets, Net | |||
Balance at the beginning of the period | $ 110,077 | $ 123,745 | |
Other | 2,000 | ||
Amortization expense | (25,294) | (13,668) | $ (9,300) |
Balance at the end of the period | 344,583 | $ 110,077 | $ 123,745 |
Victory Acquisition | |||
Intangible Assets, Net | |||
Acquisitions | 257,800 | ||
Amortization expense | $ (11,100) |
Goodwill and Other Intangible60
Goodwill and Other Intangible Assets - - Intangible Assets Other Than Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 01, 2015 | |
Intangible assets other than goodwill | ||||
Gross Carrying Amount | $ 430,247 | $ 170,447 | ||
Accumulated Amortization | (85,664) | (60,370) | ||
Total | 344,583 | 110,077 | $ 123,745 | |
Amortization expense | 25,294 | 13,668 | $ 9,300 | |
Estimated amortization expense | ||||
2,016 | 32,500 | |||
2,017 | 29,300 | |||
2,018 | 29,300 | |||
2,019 | 29,200 | |||
2,020 | $ 28,700 | |||
Estimated Useful Life ( in Years) | 13 years | |||
Definite-lived trademarks | ||||
Intangible assets other than goodwill | ||||
Gross Carrying Amount | $ 68,800 | 35,300 | ||
Accumulated Amortization | (28,103) | (23,276) | ||
Total | $ 40,697 | 12,024 | ||
Estimated amortization expense | ||||
Estimated Useful Life ( in Years) | 21 years 3 months 18 days | |||
Customer lists and relationships | ||||
Intangible assets other than goodwill | ||||
Gross Carrying Amount | $ 331,204 | 119,204 | ||
Accumulated Amortization | (41,168) | (22,440) | ||
Total | $ 290,036 | 96,764 | ||
Estimated amortization expense | ||||
Estimated Useful Life ( in Years) | 12 years | |||
Lease, contracts and other | ||||
Intangible assets other than goodwill | ||||
Gross Carrying Amount | $ 30,243 | 15,943 | ||
Accumulated Amortization | (16,393) | (14,654) | ||
Total | $ 13,850 | $ 1,289 | ||
Estimated amortization expense | ||||
Estimated Useful Life ( in Years) | 6 years | |||
Victory Acquisition | ||||
Intangible assets other than goodwill | ||||
Total | $ 246,665 | |||
Amortization expense | $ 11,100 | |||
Estimated amortization expense | ||||
2,016 | 19,088 | |||
2,017 | 19,088 | |||
2,018 | 19,078 | |||
2,019 | 18,969 | |||
2,020 | $ 18,617 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accrued Expenses | ||
Real and property taxes | $ 14,040 | $ 11,927 |
Energy costs | 10,755 | 10,969 |
Customer rebates | 8,332 | 6,077 |
Current postretirement obligation | 1,839 | 2,610 |
Capital spending | 12,767 | 3,445 |
Freight | 1,951 | 3,465 |
Worker's compensation | 7,642 | 2,875 |
Other accruals | 15,812 | 6,972 |
Accrued expenses | $ 73,138 | $ 48,340 |
Short-term Borrowings and Lon62
Short-term Borrowings and Long-term Debt - Long-term Debt Table (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 01, 2015 | |
Long term debt | ||||
Total long-term debt | $ 1,564,177 | $ 1,062,238 | ||
Less unamortized debt issuance costs | (20,429) | (16,175) | ||
Total long-term debt, net of current portion and debt issuance costs | 1,543,748 | 1,046,063 | ||
Interest Paid | 28,100 | 27,600 | $ 20,500 | |
Term Loan A1 | ||||
Long term debt | ||||
Total long-term debt | $ 834,250 | 664,125 | $ 940,000 | |
LIBOR | 0.4239% | |||
Term Loan A1 | LIBOR | ||||
Long term debt | ||||
Margin interest above reference rate (as a percent) | 1.75% | |||
Term Loan A2 | ||||
Long term debt | ||||
Total long-term debt | $ 464,313 | 231,113 | $ 475,000 | |
LIBOR | 0.4239% | |||
Term Loan A2 | LIBOR | ||||
Long term debt | ||||
Margin interest above reference rate (as a percent) | 1.875% | |||
Receivables Credit Facility | ||||
Long term debt | ||||
Total long-term debt | $ 265,614 | $ 167,000 | ||
LIBOR | 0.4295% | |||
Receivables Credit Facility | LIBOR | ||||
Long term debt | ||||
Margin interest above reference rate (as a percent) | 0.75% |
Short-term Borrowings and Lon63
Short-term Borrowings and Long-term Debt - Principal Portion of Long-Term Debt Due (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Principal portion of long-term debt due | |
2,017 | $ 12,938 |
2,018 | 51,750 |
2,019 | 51,750 |
2,020 | 998,864 |
2,021 | 4,750 |
2,022 | 444,125 |
Total | $ 1,564,177 |
Short-term Borrowings and Lon64
Short-term Borrowings and Long-term Debt - Second Amended and Restated Credit Agreement (Details) $ in Thousands | Jun. 01, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Long term debt | |||
Long-term debt | $ 1,564,177 | $ 1,062,238 | |
Second Amended and Restated Credit Agreement | |||
Long term debt | |||
Long-term debt | $ 1,915,000 | ||
Pro forma leverage ratio threshold to increase commitments under the Credit Facility | 2.50 | ||
Term Loan A1 | |||
Long term debt | |||
Long-term debt | $ 940,000 | 834,250 | 664,125 |
Term Loan A2 | |||
Long term debt | |||
Long-term debt | 475,000 | $ 464,313 | $ 231,113 |
Revolver | Second Amended and Restated Credit Agreement | |||
Long term debt | |||
Long-term debt | 500,000 | ||
Maximum borrowing capacity | 600,000 | ||
Proceeds of borrowings | 115,000 | ||
Letter of credit sub-facility | Second Amended and Restated Credit Agreement | |||
Long term debt | |||
Long-term debt | 75,000 | ||
Swing line loan | Second Amended and Restated Credit Agreement | |||
Long term debt | |||
Long-term debt | $ 45,000 |
Short-term Borrowings and Lon65
Short-term Borrowings and Long-term Debt - Second Amended and Restated Credit Agreement, Interest Rates (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Second Amended and Restated Credit Agreement | |
Long term debt | |
Debt issuance costs | $ 10.6 |
Minimum | Second Amended and Restated Credit Agreement | |
Long term debt | |
Unused fee rate (as a percent) | 0.20% |
Maximum | Second Amended and Restated Credit Agreement | |
Long term debt | |
Unused fee rate (as a percent) | 0.325% |
Federal funds effective rate | Second Amended and Restated Credit Agreement | |
Long term debt | |
Margin interest above reference rate (as a percent) | 0.50% |
One-month LIBOR | Second Amended and Restated Credit Agreement | |
Long term debt | |
Margin interest above reference rate (as a percent) | 1.00% |
Eurodollar loans | Eurodollar | Revolver | |
Long term debt | |
Margin interest above reference rate (as a percent) | 1.75% |
Eurodollar loans | Eurodollar | Term Loan A1 | |
Long term debt | |
Margin interest above reference rate (as a percent) | 1.75% |
Eurodollar loans | Eurodollar | Term Loan A2 | |
Long term debt | |
Margin interest above reference rate (as a percent) | 1.875% |
Eurodollar loans | Eurodollar | Minimum | Term Loan A1 | |
Long term debt | |
Margin interest above reference rate (as a percent) | 1.00% |
Eurodollar loans | Eurodollar | Minimum | Term Loan A2 | |
Long term debt | |
Margin interest above reference rate (as a percent) | 1.125% |
Eurodollar loans | Eurodollar | Maximum | Term Loan A1 | |
Long term debt | |
Margin interest above reference rate (as a percent) | 2.00% |
Eurodollar loans | Eurodollar | Maximum | Term Loan A2 | |
Long term debt | |
Margin interest above reference rate (as a percent) | 2.125% |
Base rate loans | Base Rate | Revolver | |
Long term debt | |
Margin interest above reference rate (as a percent) | 0.75% |
Base rate loans | Base Rate | Term Loan A1 | |
Long term debt | |
Margin interest above reference rate (as a percent) | 0.75% |
Base rate loans | Base Rate | Term Loan A2 | |
Long term debt | |
Margin interest above reference rate (as a percent) | 0.875% |
Base rate loans | Base Rate | Minimum | Term Loan A1 | |
Long term debt | |
Margin interest above reference rate (as a percent) | 0.00% |
Base rate loans | Base Rate | Minimum | Term Loan A2 | |
Long term debt | |
Margin interest above reference rate (as a percent) | 0.125% |
Base rate loans | Base Rate | Maximum | Term Loan A1 | |
Long term debt | |
Margin interest above reference rate (as a percent) | 1.00% |
Base rate loans | Base Rate | Maximum | Term Loan A2 | |
Long term debt | |
Margin interest above reference rate (as a percent) | 1.25% |
Short-term Borrowings and Lon66
Short-term Borrowings and Long-term Debt - Receivables Credit Facility (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
Receivables Credit Facility | |||
Trade receivables with securitization facility | $ 345,372 | $ 225,577 | |
Receivables Credit Facility | |||
Receivables Credit Facility | |||
Maximum borrowing capacity | $ 175,000 | ||
Trade receivables with securitization facility | $ 345,400 | ||
Term of debt instrument | 1 year | ||
Debt issuance costs | $ 200 | ||
Amount outstanding | $ 265,614 | $ 167,000 | |
Interest rate on borrowings (as a percent) | 1.18% | ||
Maximum | Receivables Credit Facility | |||
Receivables Credit Facility | |||
Maximum borrowing capacity | $ 275,000 |
Short-term Borrowings and Lon67
Short-term Borrowings and Long-term Debt - Other Debt (Details) | 12 Months Ended | ||
Dec. 31, 2015USD ($)payment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Long term debt | |||
Weighted average cost of borrowings | 2.05% | 1.98% | |
Interest paid | $ 28,100,000 | $ 27,600,000 | $ 20,500,000 |
Revolver | |||
Long term debt | |||
Amount outstanding | 6,400,000 | ||
Current availability under borrowing base | 476,500,000 | ||
Other Current Borrowing | |||
Long term debt | |||
Initial aggregate principal amount | 6,600,000 | $ 6,300,000 | |
Interest paid | $ 1.70 | ||
Number of quarterly payments | payment | 3 | ||
Level 2 | |||
Long term debt | |||
Fair value of debt | $ 1,600,000,000 |
Pension and Postretirement Be68
Pension and Postretirement Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Change in Plan Assets | |||
Fair value of plan assets at beginning of year | $ 647,515 | ||
Fair value of plan assets at end of year | 593,125 | $ 647,515 | |
Weighted-Average Discount Rate Assumption used to Determine Projected Benefit Obligations | |||
Accumulated benefit obligation | $ 626,100 | 699,200 | |
Assumed health care cost trend rates postretirement benefits plans | |||
Health care cost trend rate assumed for next year (as a percent) | 7.00% | ||
Rate to which the cost trend rate is assumed to decline (the ultimate rate) (as a percent) | 4.50% | ||
Minus 1% | |||
Service and interest cost | $ (11) | ||
Accumulated benefit obligation | 221 | ||
Plus 1% | |||
Service and interest cost | 12 | ||
Accumulated benefit obligation | $ 233 | ||
Amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net expense | |||
Percentage of accumulated benefit obligation and prior service cost which must be exceeded for accumulated actuarial gains and losses to be amortized | 10.00% | ||
Average future service period over which accumulated actuarial gains and losses in excess of specified percent of the accumulated benefit obligation and prior service cost are amortized | 9 years | ||
Amount, net of tax, included in accumulated other comprehensive income (loss) | $ (63,300) | (52,000) | |
Pension Benefits | |||
Change in Benefit Obligation | |||
Benefit obligation at beginning of year | 669,225 | 577,706 | |
Service cost | 4,723 | 9,886 | $ 8,274 |
Interest cost | 27,610 | 28,847 | 13,555 |
Actuarial loss (gain) | (41,465) | 92,156 | |
Benefits paid | (34,037) | (39,419) | |
Plan amendment | 49 | ||
Benefit obligation at end of year | 626,056 | 669,225 | 577,706 |
Change in Plan Assets | |||
Fair value of plan assets at beginning of year | 647,515 | 645,490 | |
Actual return on plan assets | (21,460) | 37,921 | |
Employer contributions | 1,107 | 3,523 | |
Benefits paid | (34,037) | (39,419) | |
Fair value of plan assets at end of year | 593,125 | 647,515 | 645,490 |
Funded status and amounts recognized in consolidated balance sheets | |||
Funded Status at End of Year | (32,931) | (21,710) | |
Amounts Recognized in Consolidated Balance Sheets: | |||
Pension and postretirement benefits | (32,931) | (21,710) | |
Net amount recognized | (32,931) | (21,710) | |
Amounts Recognized in Accumulated Other Comprehensive Income / (Loss) - (Pre-tax) | |||
Total net actuarial (gain) loss | 105,835 | 86,691 | |
Prior service cost | 117 | 392 | |
Total | $ 105,952 | $ 87,083 | |
Weighted-Average Discount Rate Assumption used to Determine Projected Benefit Obligations | |||
Weighted-Average Discount Rate Assumption used to Determine Projected Benefit Obligations (as a percent) | 4.66% | 4.24% | |
Components of pension benefit and other postretirement benefit costs | |||
Service cost | $ 4,723 | $ 9,886 | 8,274 |
Interest cost | 27,610 | 28,847 | 13,555 |
Expected return on plan assets | (41,082) | (44,143) | (20,851) |
Amortization of prior service cost (benefit) | 275 | 403 | 130 |
Amortization of net loss (gain) | 1,934 | 289 | |
Benefit (income)/cost - Company plans | (6,540) | (5,007) | 1,397 |
Pension benefit cost - multi-employer plan | 340 | 333 | 325 |
Total benefit (income)/cost | $ (6,200) | $ (4,674) | $ 1,722 |
Weighted-average actuarial assumptions used to determine net expense | |||
Discount rate (as a percent) | 4.24% | 5.11% | 4.77% |
Long-term rate of return on plan assets (as a percent) | 6.50% | 6.98% | 6.25% |
Changes in plan assets and benefit obligations recognized in accumulated other comprehensive (income) loss | |||
Net actuarial (gain) loss | $ 21,078 | $ 98,378 | |
Plan amendment | 49 | ||
Amortization of prior service (cost) benefit | (276) | (402) | |
Amortization of net gain (loss) | (1,934) | ||
Net amount recognized before tax | 18,868 | 98,025 | |
Amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net expense | |||
Prior service cost (benefit) | 95 | ||
Net actuarial loss (gain) | 4,628 | ||
Other Benefits | |||
Change in Benefit Obligation | |||
Benefit obligation at beginning of year | 13,700 | 20,847 | |
Service cost | 33 | 34 | $ 47 |
Interest cost | 428 | 627 | 354 |
Actuarial loss (gain) | (121) | (4,366) | |
Participant contributions | 625 | 742 | |
Benefits paid | (3,251) | (4,184) | |
Plan amendment | (1,996) | ||
Benefit obligation at end of year | 9,418 | 13,700 | 20,847 |
Change in Plan Assets | |||
Employer contributions | 2,626 | 3,442 | |
Participant contributions | 625 | 742 | |
Benefits paid | (3,251) | (4,184) | |
Funded status and amounts recognized in consolidated balance sheets | |||
Funded Status at End of Year | (9,418) | (13,700) | |
Amounts Recognized in Consolidated Balance Sheets: | |||
Accrued expenses | (1,839) | (2,610) | |
Pension and postretirement benefits | (7,579) | (11,090) | |
Net amount recognized | (9,418) | (13,700) | |
Amounts Recognized in Accumulated Other Comprehensive Income / (Loss) - (Pre-tax) | |||
Total net actuarial (gain) loss | (3,202) | (4,208) | |
Prior service cost | (2,841) | (1,086) | |
Total | $ (6,043) | $ (5,294) | |
Weighted-Average Discount Rate Assumption used to Determine Projected Benefit Obligations | |||
Weighted-Average Discount Rate Assumption used to Determine Projected Benefit Obligations (as a percent) | 4.12% | 3.78% | |
Components of pension benefit and other postretirement benefit costs | |||
Service cost | $ 33 | $ 34 | 47 |
Interest cost | 428 | 627 | 354 |
Amortization of prior service cost (benefit) | (242) | (200) | (200) |
Amortization of net loss (gain) | (1,126) | (11) | 20 |
Benefit (income)/cost - Company plans | (907) | 450 | 221 |
Total benefit (income)/cost | $ (907) | $ 450 | $ 221 |
Weighted-average actuarial assumptions used to determine net expense | |||
Discount rate (as a percent) | 3.78% | 4.83% | 3.26% |
Changes in plan assets and benefit obligations recognized in accumulated other comprehensive (income) loss | |||
Net actuarial (gain) loss | $ (121) | $ (4,366) | |
Amortization of prior service (cost) benefit | (1,754) | 200 | |
Amortization of net gain (loss) | 1,126 | 11 | |
Net amount recognized before tax | (749) | $ (4,155) | |
Amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net expense | |||
Prior service cost (benefit) | (761) | ||
Net actuarial loss (gain) | (657) | ||
Other Benefits | Longview | |||
Change in Plan Assets | |||
Fair value of plan assets at end of year | $ 0 | ||
Weighted-average actuarial assumptions used to determine net expense | |||
Age of employees until which individual benefits will continue | 65 years |
Pension and Postretirement Be69
Pension and Postretirement Benefits - Fair Value of Plan Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | $ 593,125 | $ 647,515 |
Cash and Cash Equivalents, Equity Securities, Fixed Income | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 497,941 | 516,861 |
Cash and Cash Equivalents, Equity Securities, Fixed Income | Level 1 | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 89,194 | 125,185 |
Cash and Cash Equivalents, Equity Securities, Fixed Income | Level 2 | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 391,699 | 367,841 |
Cash and Cash Equivalents, Equity Securities, Fixed Income | Level 3 | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 17,048 | 23,835 |
Cash and cash equivalents | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 9,190 | 37,302 |
Cash and cash equivalents | Level 1 | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 9,190 | 37,302 |
Common Stock, net of Treasury Stock | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 9,885 | 10,387 |
Common Stock, net of Treasury Stock | Level 1 | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 9,885 | 10,387 |
Balance mutual funds | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 9,531 | 30,795 |
Balance mutual funds | Level 1 | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 9,531 | 30,795 |
International equity mutual funds | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 49,711 | 46,701 |
International equity mutual funds | Level 1 | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 49,711 | 46,701 |
US large cap collective funds | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 109,947 | |
US large cap collective funds | Level 2 | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 109,947 | |
U.S. large cap | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 75,709 | |
U.S. large cap | Level 2 | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 75,709 | |
Bonds | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 10,877 | |
Bonds | Level 1 | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 10,877 | |
Short-term | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 6,876 | 14,349 |
Short-term | Level 2 | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 6,876 | 14,349 |
Mid-term | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 31,661 | 35,884 |
Mid-term | Level 2 | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 31,661 | 35,884 |
Long-term | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 157,527 | 159,453 |
Long-term | Level 2 | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 157,527 | 159,453 |
Short-term | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 1,989 | 8,657 |
Short-term | Level 2 | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 1,989 | 8,657 |
Mid-term | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 2,544 | 8,555 |
Mid-term | Level 2 | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 2,544 | 8,555 |
Long-term | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 81,155 | 65,234 |
Long-term | Level 2 | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 81,155 | 65,234 |
Limited partnership investments | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 17,048 | 23,835 |
Limited partnership investments | Level 3 | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 17,048 | 23,835 |
Fixed income funds | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | 34,218 | 49,201 |
Equity funds | ||
Pension Plan and Post-Retirement Benefits | ||
Fair value of plan assets | $ 60,966 | $ 81,453 |
Pension and Postretirement Be70
Pension and Postretirement Benefits - Summary of Changes in the Fair Value of the Plans' Level Three Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in the fair value of the Plan's level three assets | ||
Balance, beginning of year | $ 23,835 | |
Total gains or (losses): | ||
Included in changes in net assets | 240 | |
Purchases, issuances, sales, and settlements: | ||
Purchases | 800 | |
Sales | (7,827) | |
Balance, end of year | 17,048 | $ 23,835 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Period Increase (Decrease) | (1,729) | |
Percentage By Quarter Funds Restricting Investment Redemption | 25.00% | |
Limited partnership investments | Level 3 | ||
Changes in the fair value of the Plan's level three assets | ||
Balance, beginning of year | 23,835 | |
Total gains or (losses): | ||
Included in changes in net assets | 240 | |
Purchases, issuances, sales, and settlements: | ||
Purchases | 800 | |
Sales | (7,827) | |
Balance, end of year | 17,048 | $ 23,835 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Period Increase (Decrease) | $ (1,729) |
Pension and Postretirement Be71
Pension and Postretirement Benefits - Weighted-Average Asset Allocations and Target Asset Allocations (Details) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Pension Plan and Post-Retirement Benefits | ||
Weighted-average asset allocations (as a percent) | 100.00% | 100.00% |
Target Allocation (as a percent) | 100.00% | |
Fixed income: | ||
Pension Plan and Post-Retirement Benefits | ||
Weighted-average asset allocations (as a percent) | 55.00% | 53.00% |
Target Allocation (as a percent) | 53.00% | |
Equity securities: | ||
Pension Plan and Post-Retirement Benefits | ||
Weighted-average asset allocations (as a percent) | 40.00% | 38.00% |
Target Allocation (as a percent) | 47.00% | |
Cash and cash equivalents | ||
Pension Plan and Post-Retirement Benefits | ||
Weighted-average asset allocations (as a percent) | 2.00% | 6.00% |
Other securities | ||
Pension Plan and Post-Retirement Benefits | ||
Weighted-average asset allocations (as a percent) | 3.00% | 3.00% |
Pension and Postretirement Be72
Pension and Postretirement Benefits - Estimated Future Gross Benefit Payments (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Other Benefits | |
Estimated future gross benefit payments | |
2,015 | $ 1,877 |
2,016 | 1,480 |
2,017 | 1,192 |
2,018 | 1,028 |
2,019 | 882 |
Succeeding 5 years | 2,281 |
Pension Benefits | |
Estimated future gross benefit payments | |
2,015 | 37,334 |
2,016 | 37,615 |
2,017 | 38,320 |
2,018 | 39,396 |
2,019 | 40,156 |
Succeeding 5 years | $ 206,937 |
Pension and Postretirement Be73
Pension and Postretirement Benefits - Postretirement Benefits Other Than Pensions (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Pension Plan and Post-Retirement Benefits | |||
Acquired asset | $ 593,125 | $ 647,515 | |
Other Benefits | |||
Pension Plan and Post-Retirement Benefits | |||
Assumed liability | 9,418 | $ 13,700 | $ 20,847 |
Longview | Other Benefits | |||
Pension Plan and Post-Retirement Benefits | |||
Acquired asset | $ 0 |
Pension and Postretirement Be74
Pension and Postretirement Benefits - Multiemployer Pension Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 01, 2013 | Jan. 01, 2012 | |
Multiemployer Pension Plan | |||||
Estimated withdrawal liability | $ 46,800 | ||||
GCIU-Employer Retirement Fund | |||||
Multiemployer Pension Plan | |||||
Contributions by the Company | $ 340 | 333 | $ 339 | ||
Net assets available for benefits | $ 1,140,600 | $ 1,150,000 | |||
Actuarial present value of accumulated plan benefits | $ 1,653,000 | $ 1,655,000 | |||
GCIU-Employer Retirement Fund | Maximum | |||||
Multiemployer Pension Plan | |||||
Contributions (as a percent) | 4.20% |
Pension and Postretirement Be75
Pension and Postretirement Benefits - Defined Contribution Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Contribution Plan | |||
Defined contribution plan expense recognized | $ 22.3 | $ 15.1 | $ 12.3 |
Victory Acquisition | |||
Defined Contribution Plan | |||
Defined contribution plan expense recognized | $ 0.9 |
Income taxes - Provision (Benef
Income taxes - Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income before provision for income taxes: | |||
United States | $ 159,790 | $ 260,601 | $ 194,990 |
Foreign | 1,844 | ||
Total | 161,634 | 260,601 | 194,990 |
Current: | |||
Federal | 40,324 | 78,105 | 2,384 |
Foreign | 766 | ||
State | 3,116 | 8,126 | 5,403 |
Total current | 44,206 | 86,231 | 7,787 |
Deferred: | |||
US federal | 10,990 | 826 | 53,404 |
State and local | 52 | 1,629 | 6,461 |
Total deferred | 11,042 | 2,455 | 59,865 |
Total United States | 54,482 | 88,686 | 67,652 |
Foreign | 766 | ||
Total provision for income taxes | 55,248 | 88,686 | 67,652 |
Income taxes paid, net of refunds | $ 65,500 | $ 77,500 | $ 4,000 |
Effective Income Tax Rate Reconciliation, Percent | 34.20% | 34.00% | 34.70% |
Income taxes - Difference of Ef
Income taxes - Difference of Effective Tax Rate From the Statutory Federal Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Difference of effective tax rate from the statutory federal income tax rate | |||
Statutory income tax rate (as a percent) | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal income tax benefit (as a percent) | 2.30% | 2.10% | 2.90% |
Domestic manufacturing deduction (as a percent) | (2.90%) | (3.00%) | (2.00%) |
Change in uncertain tax positions (as a percent) | 0.10% | (0.10%) | (2.60%) |
Other (as a percent) | (0.30%) | 1.40% | |
Effective income tax rate | 34.20% | 34.00% | 34.70% |
Income taxes - Deferred Tax Ass
Income taxes - Deferred Tax Assets and Liabilities Due to Temporary Differences (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets resulting from: | ||
Accrued compensation costs | $ 6,631 | $ 7,368 |
Pension and postretirement benefits | 16,036 | 14,450 |
Stock based compensation | 9,637 | 6,073 |
State net operating loss carry-forwards | 2,354 | 1,955 |
Other | 5,690 | 3,855 |
Total deferred tax assets | 40,348 | 33,701 |
Net deferred tax assets | 40,348 | 33,701 |
Deferred tax liabilities resulting from: | ||
Depreciable assets | (409,837) | (398,072) |
Intangible assets | (38,974) | (37,078) |
Goodwill | (10,016) | (12,834) |
Total deferred tax liabilities | (458,827) | (447,984) |
Net deferred tax liabilities | $ (418,479) | $ (414,283) |
Income taxes - Operating Loss C
Income taxes - Operating Loss Carry-forward (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Operating loss carry-forward | ||
Unrecognized tax benefits | $ 0.5 | $ 0.5 |
State | ||
Operating loss carry-forward | ||
Net operating loss carry-forward | 8 | |
Tax credits | $ 3.1 |
Stockholder's equity (Details)
Stockholder's equity (Details) $ / shares in Units, $ in Thousands | Jan. 12, 2015$ / shares | Dec. 16, 2014$ / shares | Dec. 11, 2013 | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2010shares |
Stockholder's equity | ||||||
Stock split ratio | 2 | |||||
Cash Dividends | ||||||
Dividends declared per common share | $ / shares | $ 0.10 | $ 0.40 | $ 0.10 | |||
Dividends paid per common share (in dollars per share) | $ / shares | $ 0.10 | |||||
Cash dividend paid | $ | $ 38,729 | $ 223 | ||||
KapStone Paper and Packaging Corporation Employee Stock Purchase Plan Member | Stock awards | ||||||
Stockholder's equity | ||||||
Shares reserved for future purchases | 1,000,000 | |||||
Common Stock, net of Treasury Stock | ||||||
Stockholder's equity | ||||||
Common stock reserved for issuance (in shares) | 5,000,000 | |||||
Common Stock, net of Treasury Stock | Stock awards | ||||||
Stockholder's equity | ||||||
Share reserved for issuance | 4,200,000 | |||||
Common Stock, net of Treasury Stock | KapStone Paper and Packaging Corporation Employee Stock Purchase Plan Member | ||||||
Stockholder's equity | ||||||
Discount from the market price on the common stock issued (as a percent) | 5.00% | |||||
Shares issued under ESPP | 34,413 | 20,488 | ||||
Share reserved for issuance | 800,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - shares | 8 Months Ended | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | May. 15, 2014 | |
2014 Incentive Plan Member | |||||
Stock-based compensation | |||||
Number of shares authorized by shareholders | 8,500,000 | ||||
Number of shares reserved for grant | 4,200,000 | ||||
Stock Options | |||||
Stock-based compensation | |||||
Contractual term | 10 years | 10 years | 10 years | ||
Stock Options | 2014 Incentive Plan Member | |||||
Stock-based compensation | |||||
Contractual term | 10 years |
Stock-Based Compensation - Tota
Stock-Based Compensation - Total Non Cash Stock Based Compensation Expense Related to Stock Options and Restricted Stock (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock-based compensation | |||
Stock-based compensation expense | $ 9,835 | $ 6,956 | $ 5,203 |
Stock Options | |||
Stock-based compensation | |||
Stock-based compensation expense | 4,938 | 3,595 | 2,830 |
Restricted Stock Units | |||
Stock-based compensation | |||
Stock-based compensation expense | $ 4,897 | $ 3,361 | $ 2,373 |
Stock-Based Compensation - To83
Stock-Based Compensation - Total Unrecognized Stock Based Compensation Cost Related to the Stock Options and Restricted Stock (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Unrecognized stock-based compensation expense | |||
Unrecognized stock option compensation expense | $ 4,217 | $ 3,243 | |
Unrecognized restricted stock unit compensation expense | 5,094 | 3,923 | |
Total unrecognized stock-based compensation expense | 9,311 | 7,166 | |
Excess tax benefit from stock-based compensation | $ 1,649 | $ 2,649 | $ 3,531 |
Restricted Stock Units | |||
Unrecognized stock-based compensation expense | |||
Weighted average period of recognition | 2 years | ||
Stock Options | |||
Unrecognized stock-based compensation expense | |||
Weighted average period of recognition | 2 years 1 month 6 days |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) | Dec. 11, 2013 | Dec. 31, 2015shares | Dec. 31, 2014shares | Dec. 31, 2013shares |
Stock Options | ||||
Stock split ratio | 2 | |||
Stock Options | ||||
Stock Options | ||||
Granted (in shares) | 668,362 | 454,161 | 604,296 | |
Contractual term | 10 years | 10 years | 10 years | |
Stock Options | Awards that vest after two years | ||||
Stock Options | ||||
Percentage of granted awards that will vest | 50.00% | |||
Vesting period for awards | 2 years | |||
Stock Options | Awards that vest after three years | ||||
Stock Options | ||||
Percentage of granted awards that will vest | 50.00% | |||
Vesting period for awards | 3 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Information Related to Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Additional information | |||
Cash proceeds from exercises of options | $ 900 | $ 900 | $ 1,900 |
Stock Options | |||
Options | |||
Outstanding at the beginning of the period (in shares) | 2,759,306 | 2,514,382 | 2,563,856 |
Granted (in shares) | 668,362 | 454,161 | 604,296 |
Exercised (in shares) | (108,952) | (183,130) | (616,406) |
Lapsed (forfeited or cancelled) (in shares) | (52,816) | (26,107) | (37,364) |
Outstanding at the end of the period (in shares) | 3,265,900 | 2,759,306 | 2,514,382 |
Exercisable at the end of the period (in shares) | 1,941,801 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 11.81 | $ 8.05 | $ 5.46 |
Granted (in dollars per share) | 30.24 | 30.42 | 14.53 |
Exercised (in dollars per share) | 10.35 | 5.74 | 3.51 |
Lapsed (forfeited or cancelled) (in dollars per share) | 23.03 | 16.85 | 9.43 |
Outstanding at the end of the period (in dollars per share) | 15.45 | $ 11.81 | $ 8.05 |
Exercisable at the end of the period (in dollars per share) | $ 7.41 | ||
Weighted Average Remaining Life (Years) | |||
Exercisable at the end of the period | 5 years | ||
Outstanding at the end of the period | 6 years 6 months | ||
Intrinsic Value | |||
Intrinsic Value (dollars in thousands) | $ 38,955 | ||
Exercisable at the end of the period | 35,663 | ||
Additional information | |||
Intrinsic value of options exercised | $ 2,000 | $ 4,500 | $ 10,500 |
Weighted average fair value (in dollars per share) | $ 9.45 | $ 10.39 | $ 5.58 |
Total grant-date fair value of stock options granted | $ 6,300 | $ 4,700 | $ 3,400 |
Stock-Based Compensation - KapS
Stock-Based Compensation - KapStone Stock Options Black-Scholes Assumptions (Details) - Stock Options | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock Options Black-Scholes assumptions (weighted average): | |||
Expected volatility (as a percent) | 38.73% | 39.92% | 49.39% |
Expected life | 4 years 11 months 1 day | 4 years 3 months 26 days | 4 years |
Risk-free interest rate (as a percent) | 1.36% | 1.35% | 0.63% |
Expected dividend yield | 1.55% | 0.00% | 0.00% |
Stock-Based Compensation - Non-
Stock-Based Compensation - Non-Vested Restricted Stock Amounts and Activity (Details) - Restricted Stock Units - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock-based compensation | |||
Vesting period for awards | 3 years | ||
Units | |||
Outstanding at the beginning of the period (in shares) | 588,067 | 687,368 | 651,524 |
Granted (in shares) | 214,051 | 161,418 | 233,544 |
Vested (in shares) | (228,825) | (248,293) | (181,578) |
Forfeited (in shares) | (23,284) | (12,426) | (16,122) |
Outstanding at the end of the period (in shares) | 550,009 | 588,067 | 687,368 |
Weighted Average Grant Date Fair Value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 16.98 | $ 10.91 | $ 8.18 |
Granted (in dollars per share) | 30.41 | 30.44 | 14.44 |
Vested (in dollars per share) | 10.94 | 9 | 5.73 |
Forfeited (in dollars per share) | 20.43 | 15.25 | 10.19 |
Outstanding at the end of the period (in dollars per share) | $ 24.60 | $ 16.98 | $ 10.91 |
Additional disclosures | |||
Fair value of awards granted | $ 6.5 | $ 4.9 | $ 3.4 |
Fair value of awards vested | $ 2.5 | $ 2.2 | $ 1 |
Commitments and Contingencies88
Commitments and Contingencies (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2014USD ($) | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Commitments and contingencies | ||||
Commercial commitments | $ 17,100 | $ 4,300 | ||
Operating Leases | ||||
Number of corrugated manufacturing plants leased | item | 12 | |||
Number of distribution centers | item | 60 | |||
Percentage increase in lease rent | 1.00% | |||
Future minimum rental payments due under non-cancellable operating leases | ||||
2,015 | $ 38,726 | |||
2,016 | 35,288 | |||
2,017 | 29,877 | |||
2,018 | 24,799 | |||
2,019 | 22,355 | |||
Thereafter | 83,747 | |||
Total | 234,792 | |||
Rental expense under operating lease | $ 36,000 | $ 16,900 | $ 14,900 | |
Number of distribution and fullfilment centers | item | 60 | |||
Rental expense under operating lease paid to related parties | $ 2,200 | |||
Letter of credit sub-facility | ||||
Commitments and contingencies | ||||
Amount drawn under letters of credit | $ 0 | |||
Longview | ||||
Commitments and contingencies | ||||
Discount rate (as a percent) | 2.30% | |||
Total estimated remedy | $ 342,000 |
Commitments and Contingencies -
Commitments and Contingencies - Purchase Obligation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Purchase Obligation | |||
Materials purchased | $ 39.1 | $ 40 | $ 35.6 |
Pine Pulpwood | |||
Purchase Obligation | |||
Percentage of material requirement | 25.00% | ||
Term of purchase commitment | 15 years | ||
Saw Timber | |||
Purchase Obligation | |||
Term of purchase commitment | 60 years |
Commitments and Contingencies90
Commitments and Contingencies - Longview Union Contract Status and Work Stoppage (Details) $ in Millions | Aug. 27, 2015T | Dec. 31, 2015USD ($)employee |
Commitments and contingencies | ||
Unfunded commitments to contribute capital to limited partnerships | $ | $ 3.5 | |
Number of employees | 540 | |
Longview | ||
Commitments and contingencies | ||
Number of employees | 600 | |
Tons of paper lost due to work stoppage | T | 29,000 | |
Number of work stoppage days | 12 days |
Net income per share (Details)
Net income per share (Details) $ / shares in Units, $ in Thousands | Dec. 11, 2013 | Dec. 31, 2015USD ($)$ / shares | Sep. 30, 2015USD ($)$ / shares | Jun. 30, 2015USD ($)$ / shares | Mar. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($)$ / shares | Sep. 30, 2014USD ($)$ / shares | Jun. 30, 2014USD ($)$ / shares | Mar. 31, 2014USD ($)$ / shares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / sharesshares |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method | ||||||||||||
Net income | $ | $ 11,824 | $ 34,206 | $ 34,256 | $ 26,100 | $ 34,103 | $ 54,254 | $ 51,459 | $ 32,099 | $ 106,386 | $ 171,915 | $ 127,338 | |
Weighted-average number of common shares for basic net income per share | 96,257,749 | 95,900,179 | 95,258,756 | |||||||||
Incremental effect of dilutive common stock equivalents: | ||||||||||||
Unexercised stock options (in shares) | 1,096,085 | 1,207,903 | 1,038,293 | |||||||||
Unvested restricted stock awards (in shares) | 281,705 | 351,102 | 442,433 | |||||||||
Weighted-average number of shares for diluted net income per share | 97,635,539 | 97,459,184 | 96,739,482 | |||||||||
Net income per share - basic (in dollars per share) | $ / shares | $ 0.12 | $ 0.36 | $ 0.36 | $ 0.27 | $ 0.36 | $ 0.57 | $ 0.54 | $ 0.34 | $ 1.11 | $ 1.79 | $ 1.34 | |
Net income per share - diluted (in dollars per share) | $ / shares | $ 0.12 | $ 0.35 | $ 0.35 | $ 0.27 | $ 0.35 | $ 0.56 | $ 0.53 | $ 0.33 | $ 1.09 | $ 1.76 | $ 1.32 | |
Stock split ratio | 2 | |||||||||||
Weighted average | ||||||||||||
Incremental effect of dilutive common stock equivalents: | ||||||||||||
Anti-dilutive unexercised stock options (in shares) | 972,801 | 355,132 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | Jun. 01, 2015segment | May. 31, 2015segment | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Segment information | |||||||||||||
Number of reportable segments | segment | 2 | 1 | |||||||||||
Number of distribution centers | item | 60 | ||||||||||||
Net Sales | $ 764,238 | $ 807,563 | $ 671,255 | $ 546,289 | $ 563,413 | $ 598,106 | $ 590,449 | $ 548,952 | $ 2,789,345 | $ 2,300,920 | $ 1,748,162 | ||
Operating Income (Loss) | 28,813 | $ 61,596 | $ 61,409 | $ 47,349 | 62,338 | $ 94,162 | $ 85,313 | $ 58,118 | 199,167 | 299,931 | 219,888 | ||
Depreciation and amortization | 162,179 | 136,548 | 95,435 | ||||||||||
Capital Expenditures | 126,756 | 137,232 | 96,706 | ||||||||||
Total Assets | 3,222,110 | 2,556,274 | 3,222,110 | 2,556,274 | |||||||||
Operating Segment | |||||||||||||
Segment information | |||||||||||||
Net Sales | 2,789,345 | 2,300,920 | 1,748,162 | ||||||||||
Operating Income (Loss) | 199,167 | 299,931 | 219,888 | ||||||||||
Depreciation and amortization | 162,179 | 136,548 | 95,435 | ||||||||||
Capital Expenditures | 126,756 | 137,232 | 96,706 | ||||||||||
Total Assets | 3,222,110 | 2,556,274 | 3,222,110 | 2,556,274 | 2,651,862 | ||||||||
Intersegment eliminations | |||||||||||||
Segment information | |||||||||||||
Net Sales | (22,280) | ||||||||||||
Paper And Packaging | |||||||||||||
Segment information | |||||||||||||
Net Sales | 2,206,396 | 2,300,920 | 1,748,162 | ||||||||||
Paper And Packaging | Operating Segment | |||||||||||||
Segment information | |||||||||||||
Net Sales | 2,228,676 | 2,300,920 | 1,748,162 | ||||||||||
Operating Income (Loss) | 224,012 | 334,753 | 255,174 | ||||||||||
Depreciation and amortization | 145,363 | 133,302 | 92,326 | ||||||||||
Capital Expenditures | 108,599 | 128,593 | 93,312 | ||||||||||
Total Assets | 2,489,683 | 2,505,896 | 2,489,683 | 2,505,896 | 2,623,582 | ||||||||
Paper And Packaging | Intersegment eliminations | |||||||||||||
Segment information | |||||||||||||
Net Sales | 22,280 | ||||||||||||
Distribution | |||||||||||||
Segment information | |||||||||||||
Net Sales | 582,949 | ||||||||||||
Distribution | Operating Segment | |||||||||||||
Segment information | |||||||||||||
Net Sales | 582,949 | ||||||||||||
Operating Income (Loss) | 20,719 | ||||||||||||
Depreciation and amortization | 13,108 | ||||||||||||
Capital Expenditures | 3,190 | ||||||||||||
Total Assets | 675,204 | 675,204 | |||||||||||
Corporate | Operating Segment | |||||||||||||
Segment information | |||||||||||||
Operating Income (Loss) | (45,564) | (34,822) | (35,286) | ||||||||||
Depreciation and amortization | 3,708 | 3,246 | 3,109 | ||||||||||
Capital Expenditures | 14,967 | 8,639 | 3,394 | ||||||||||
Total Assets | $ 57,223 | $ 50,378 | 57,223 | 50,378 | 28,280 | ||||||||
Containerboard And Corrugated Products | Paper And Packaging | |||||||||||||
Segment information | |||||||||||||
Net Sales | 1,399,522 | 1,463,670 | 1,108,545 | ||||||||||
Containerboard And Corrugated Products | Paper And Packaging | Operating Segment | |||||||||||||
Segment information | |||||||||||||
Net Sales | 1,421,802 | 1,463,670 | 1,108,545 | ||||||||||
Containerboard And Corrugated Products | Paper And Packaging | Intersegment eliminations | |||||||||||||
Segment information | |||||||||||||
Net Sales | 22,280 | ||||||||||||
Specialty Paper | Paper And Packaging | |||||||||||||
Segment information | |||||||||||||
Net Sales | 720,588 | 741,601 | 551,931 | ||||||||||
Specialty Paper | Paper And Packaging | Operating Segment | |||||||||||||
Segment information | |||||||||||||
Net Sales | 720,588 | 741,601 | 551,931 | ||||||||||
Other Products | Paper And Packaging | |||||||||||||
Segment information | |||||||||||||
Net Sales | 86,286 | 95,649 | 87,686 | ||||||||||
Other Products | Paper And Packaging | Operating Segment | |||||||||||||
Segment information | |||||||||||||
Net Sales | 86,286 | 95,649 | 87,686 | ||||||||||
US based customers | |||||||||||||
Segment information | |||||||||||||
Net Sales | 2,300,806 | 1,847,531 | 1,398,326 | ||||||||||
Foreign based customers | |||||||||||||
Segment information | |||||||||||||
Net Sales | $ 488,539 | $ 453,389 | $ 349,836 |
Quarterly Financial Informati93
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information (Unaudited) | |||||||||||
Net sales | $ 764,238 | $ 807,563 | $ 671,255 | $ 546,289 | $ 563,413 | $ 598,106 | $ 590,449 | $ 548,952 | $ 2,789,345 | $ 2,300,920 | $ 1,748,162 |
Gross profit | 89,405 | 125,173 | 109,890 | 85,543 | 96,976 | 128,295 | 119,406 | 92,263 | |||
Operating income | 28,813 | 61,596 | 61,409 | 47,349 | 62,338 | 94,162 | 85,313 | 58,118 | 199,167 | 299,931 | 219,888 |
Net income | $ 11,824 | $ 34,206 | $ 34,256 | $ 26,100 | $ 34,103 | $ 54,254 | $ 51,459 | $ 32,099 | $ 106,386 | $ 171,915 | $ 127,338 |
Net income per share: | |||||||||||
Basic (in dollars per share) | $ 0.12 | $ 0.36 | $ 0.36 | $ 0.27 | $ 0.36 | $ 0.57 | $ 0.54 | $ 0.34 | $ 1.11 | $ 1.79 | $ 1.34 |
Diluted (in dollars per share) | $ 0.12 | $ 0.35 | $ 0.35 | $ 0.27 | $ 0.35 | $ 0.56 | $ 0.53 | $ 0.33 | $ 1.09 | $ 1.76 | $ 1.32 |
Planned maintenance outages | $ 13,300 | $ 4,400 | $ 11,100 | $ 8,600 | $ 10,900 | $ 5,200 | $ 5,200 | $ 14,800 | $ 37,400 | $ 36,100 | $ 24,900 |
Loss on debt extinguishment | $ 600 | $ 2,600 | $ 3,000 | $ 1,218 | $ 5,617 |