Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 16, 2017 | Jun. 30, 2016 | |
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, 2016 | ||
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 | $ 1,136,213,584 | ||
Entity Common Stock, Shares Outstanding | 96,683,791 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 29,385 | $ 6,821 |
Trade accounts receivable (Includes $368,922 at December 31, 2016, and $345,372 at December 31, 2015, associated with the securitization facility) | 392,962 | 363,869 |
Other receivables | 13,562 | 18,732 |
Inventories | 322,664 | 335,903 |
Prepaid expenses and other current assets | 10,247 | 28,932 |
Total current assets | 768,820 | 754,257 |
Plant, property and equipment, net | 1,441,557 | 1,406,146 |
Other assets | 25,468 | 12,532 |
Intangible assets, net | 314,413 | 344,583 |
Goodwill | 705,617 | 704,592 |
Total assets | 3,255,875 | 3,222,110 |
Current liabilities: | ||
Short-term borrowings | 6,400 | |
Dividend payable | 10,052 | 9,862 |
Accounts payable | 189,350 | 196,491 |
Accrued expenses | 76,480 | 73,138 |
Accrued compensation costs | 48,840 | 64,149 |
Accrued income taxes | 15,971 | 15 |
Total current liabilities | 340,693 | 350,055 |
Other liabilities: | ||
Long-term debt (Includes $269,273 at December 31, 2016, and $265,614 at December 31, 2015, associated with the securitization facility) | 1,485,323 | 1,543,748 |
Pension and postretirement benefits | 34,207 | 40,510 |
Deferred income taxes | 405,561 | 418,479 |
Other liabilities | 85,761 | 24,038 |
Total other liabilities | 2,010,852 | 2,026,775 |
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; 96,639,920 shares issued and outstanding (excluding 40,000 treasury shares) at December 31, 2016 and 96,327,506 shares issued and outstanding (excluding 40,000 treasury shares) at December 31, 2015 | 10 | 10 |
Additional paid-in-capital | 275,970 | 266,220 |
Retained earnings | 689,668 | 642,306 |
Accumulated other comprehensive loss | (61,318) | (63,256) |
Total stockholders' equity | 904,330 | 845,280 |
Total liabilities and stockholders' equity | $ 3,255,875 | $ 3,222,110 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Trade accounts receivable | $ 368,922 | $ 345,372 |
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 | 96,639,920 | 96,327,506 |
Common stock, shares outstanding | 96,639,920 | 96,327,506 |
Treasury shares, shares outstanding | 40,000 | 40,000 |
Receivables Credit Facility | ||
Trade accounts receivable | $ 368,900 | |
Long term debt portion associated with securitization facility | $ 269,273 | $ 265,614 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statements of Comprehensive Income | |||
Net sales | $ 3,077,257 | $ 2,789,345 | $ 2,300,920 |
Cost of sales, excluding depreciation and amortization | 2,214,872 | 1,982,686 | 1,551,531 |
Depreciation and Amortization | 182,213 | 162,179 | 136,548 |
Freight and distribution expenses | 279,023 | 234,469 | 175,901 |
Selling, general, and administrative expenses | 224,127 | 210,844 | 137,009 |
Multiemployer pension plan withdrawal expense | 6,376 | ||
Operating income | 170,646 | 199,167 | 299,931 |
Foreign exchange loss | 2,255 | 2,556 | 1,222 |
Equity method investments income | (548) | ||
Loss on debt extinguishment | 679 | 1,218 | 5,617 |
Interest expense, net | 40,078 | 33,759 | 32,491 |
Income before provision for income taxes | 128,182 | 161,634 | 260,601 |
Provision for income taxes | 41,930 | 55,248 | 88,686 |
Net income | 86,252 | 106,386 | 171,915 |
Defined pension and post-retirement plans: | |||
Foreign currency translation adjustment | (551) | ||
Net actuarial gain/(loss) | 502 | (13,182) | (59,645) |
Pension and postretirement plan reclassification adjustments: | |||
Amortization (accretion) of prior service costs | (416) | 1,413 | 128 |
Amortization (accretion) of net (gain)/loss | 2,403 | 502 | (7) |
Other comprehensive income/(loss), net of tax | 1,938 | (11,267) | (59,524) |
Total comprehensive income | $ 88,190 | $ 95,119 | $ 112,391 |
Weighted average number of shares outstanding: | |||
Basic (in shares) | 96,533,368 | 96,257,749 | 95,900,179 |
Diluted (in shares) | 97,777,066 | 97,635,539 | 97,459,184 |
Net income per share: | |||
Basic (in dollars per share) | $ 0.89 | $ 1.11 | $ 1.79 |
Diluted (in dollars per share) | 0.88 | 1.09 | 1.76 |
Dividends declared per common share | $ 0.40 | $ 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, 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 $1,493, $6,852 and $34,346 in 2016, 2015 and 2014, 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 | ||||
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 $1,493, $6,852 and $34,346 in 2016, 2015 and 2014, 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 | |||
Changes in Stockholders' Equity | |||||
Stock-based compensation expense | 8,938 | $ 8,938 | |||
Payment of withholding taxes on vested restricted stock awards and options exercised | (810) | (810) | |||
Payment of withholding taxes on vested restricted stock awards and options exercised (in shares) | 149,411 | ||||
Exercise of stock options | 858 | 858 | |||
Exercise of stock options (in shares) | 100,367 | ||||
Excess tax deficiency from stock-based compensation | (207) | (207) | |||
Employee Stock Purchase Plan | 971 | 971 | |||
Employee Stock Purchase Plan (in shares) | 62,636 | ||||
Dividends declared | (38,890) | (38,890) | |||
Net income | 86,252 | 86,252 | |||
Pension and postretirement plan liability adjustments, net of tax of $1,493, $6,852 and $34,346 in 2016, 2015 and 2014, respectively | 2,489 | 2,489 | |||
Foreign currency translation adjustment | (551) | (551) | |||
Balance at Dec. 31, 2016 | $ 10 | $ 275,970 | $ 689,668 | $ (61,318) | $ 904,330 |
Balance (in shares) at Dec. 31, 2016 | 96,639,920 | 96,639,920 |
Consolidated Statements of Cha6
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statements of Changes in Stockholders' Equity | |||
Pension and postretirement plan liability adjustments, tax | $ 1,493 | $ 6,852 | $ 34,346 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities | |||
Net income | $ 86,252 | $ 106,386 | $ 171,915 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation of Plant and equipment | 149,318 | 136,886 | 122,880 |
Amortization of intangible assets | 32,895 | 25,293 | 13,668 |
Stock-based compensation expense | 8,938 | 9,835 | 6,956 |
Pension and postretirement | (3,694) | (11,182) | (11,523) |
Multiemployer pension plan withdrawal expense | 6,376 | ||
Excess tax deficiency / (benefit) from stock-based compensation | 207 | (1,649) | (2,649) |
Amortization of debt issuance costs | 4,804 | 5,546 | 5,696 |
Loss on debt extinguishment | 679 | 1,218 | 5,617 |
Loss on disposal of fixed assets | 3,599 | 951 | 4,252 |
Deferred income taxes | (14,440) | 11,042 | 2,455 |
Inventory step-up expense | 5,800 | ||
Change in fair value of contingent consideration liability | 1,600 | 3,700 | |
Equity method investments income | (548) | ||
Changes in assets and liabilities: | |||
Trade accounts receivable, net | (27,452) | 8,960 | 3,649 |
Other receivables | 2,685 | (1,596) | (1,434) |
Inventories | 13,700 | (13,086) | (22,973) |
Prepaid expenses and other current assets | 17,063 | (13,375) | (767) |
Other assets | (993) | 478 | (1,433) |
Accounts payable | (12,782) | (13,352) | (5,705) |
Accrued expenses and other liabilities | 11,806 | 16,155 | 6,072 |
Accrued compensation costs | (15,364) | (7,120) | 7,620 |
Accrued income taxes | 17,271 | (8,433) | 8,902 |
Net cash provided by operating activities | 281,920 | 262,457 | 313,198 |
Investing activities | |||
Equity method investments | (11,807) | ||
Purchase of intangible assets | (2,525) | ||
Acquisitions, net of cash acquired | (15,438) | (617,046) | |
Proceeds from the sale of assets | 4,881 | ||
Capital expenditures | (126,865) | (126,756) | (137,232) |
Net cash used in investing activities | (151,754) | (743,802) | (137,232) |
Financing activities | |||
Proceeds from revolving credit facility | 451,000 | 350,000 | 97,900 |
Repayments on revolving credit facility | (457,400) | (343,600) | (97,900) |
Proceeds from receivables credit facility | 43,001 | 134,701 | 175,000 |
Repayments on receivables credit facility | (39,342) | (36,088) | (8,000) |
Proceeds from long-term debt | 519,763 | ||
Repayments of long-term debt | (64,687) | (116,438) | (328,525) |
Cash dividends paid | (38,736) | (38,729) | (223) |
Payment of loan amendment and debt issuance costs | (2,250) | (10,790) | (1,081) |
Proceeds from other current borrowings | 6,615 | 6,300 | |
Repayments on other current borrowings | (6,615) | (6,300) | |
Payment of withholding taxes on stock awards | (810) | (2,508) | (1,755) |
Proceeds from exercises of stock options | 858 | 896 | 869 |
Proceeds from shares issued to ESPP | 971 | 843 | 600 |
Excess tax (deficiency) / benefit from stock-based compensation | (207) | 1,649 | 2,649 |
Net cash provided by (used in) financing activities | (107,602) | 459,699 | (160,466) |
Net increase (decrease) in cash and cash equivalents | 22,564 | (21,646) | 15,500 |
Cash and cash equivalents-beginning of period | 6,821 | 28,467 | 12,967 |
Cash and cash equivalents-end of period | $ 29,385 | $ 6,821 | $ 28,467 |
Description of Business and Bas
Description of Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2016 | |
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"). As a result of the Victory acquisition, the accompanying consolidated financial statements are not comparative. The accompanying consolidated financial statements include the results of Victory since the date of its acquisitions, see Note 4 "Victory Acquisition". 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 —In April 2015, the Financial Accounting Standard's Board ("FASB") issued Accounting Standards Update No. 2015-03 ("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. ASU 2015-03 was adopted during the interim period ended March 31, 2016, and it had no material impact on our consolidated financial statements. On August 27, 2014, the FASB issued ASU 2014-15, "Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern", which requires management to assess a company's ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. ASU 2014-15 was adopted effective December 31, 2016, and it had no material impact on our consolidated financial statements. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
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 2016, 2015, and 2014, customer rebates totaled $34.3 million, $32.7 million and $28.3 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 2016, 2015 and 2014, cost of sales was reduced by $32.6 million, $36.1 million and $35.8 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 $32.6 million, $37.4 million and $36.1 million related to planned maintenance outages are included in cost of sales for the years ended December 31, 2016, 2015 and 2014, 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 2016, 2015 or 2014. In order to mitigate credit risk, the Company obtains letters of credit for certain export customers. For the years ended December 31, 2016, 2015 and 2014, net sales to U.S. based customers were 83 percent, 82 percent and 80 percent, respectively, of consolidated net sales. Net sales to foreign based customers during 2016, 2015 and 2014 were 17 percent, 18 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, 2016, 2015 and 2014 changes to the allowance for doubtful accounts are summarized as follows ($000's): Year ended: Balance at Acquisition Charged to Write-offs Balance at December 31, 2016 $ — $ $ ) $ December 31, 2015 $ $ $ $ ) $ December 31, 2014 $ $ — $ $ ) $ Foreign Currency Transactions —The Company invoices certain European customers in Euros and Mexican customers in Pesos. Outstanding amounts for such transactions are remeasured 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, pension assets, contingent consideration liability and accounts payables are financial assets and liabilities with carrying values that approximate fair value. The Company's variable rate term loans are financial liabilities with fair values that approximate their carrying value of $1.5 billion. See Note 9 "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 KapStone locations with the exception of the Longview Paper mill and the seven corrugated products manufacturing plants, which are on the last-in, first-out method. In total, these locations represent 22 percent and 26 percent of consolidated inventories as of December 31, 2016 and 2015, respectively. 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 Victory acquisition, KapStone acquired inventories which were recorded 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. Leases —The Company assesses lease classification as either capital or operating at lease inception or upon modification. We lease twelve of our corrugated products manufacturing plants and most distribution centers, as well as other property and equipment, under operating leases. For purposes of determining straight-line rent expense, the lease term is calculated from the date of possession of the facility, including any periods of free rent and any renewal option periods that are reasonably assured of being exercised. 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 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. The Company performed a quantitative assessment and it 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 interest rates for long-term high quality bonds. 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 exceeds the larger of 10 percent 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, 2016, 2015 and 2014, $4.8 million, $5.5 million and $5.7 million, respectively, of debt issuance costs have been amortized and recognized within interest expense, net. In 2016, 2015 and 2014, the Company recorded losses on debt extinguishment of $0.7 million, $1.2 million and $5.6 million, respectively, due to voluntary prepayments totaling $64.7 million, $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 —The Company reports results in two reportable 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 corrugated products manufacturing 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 corrugated packaging materials and other specialty packaging products, which include stretch film, void fill, carton sealing tape and other specialty tapes. Recent Accounting Pronouncements In May 2014, the FASB issued 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". 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 in the diagnostic phase of evaluating the overall impact of ASU 2014-09. As of December 31, 2016, the Company has determined that it will adopt this standard utilizing the modified retrospective method, which will result in the recognition of the cumulative effect of initially applying the standard (if any) as an adjustment to opening retained earnings for the fiscal year beginning January 1, 2018. The Company will provide additional disclosure as our implementation plan progresses. In July 2015, the FASB issued ASU 2015-11, "Simplifying the Measurement of Inventory", which is intended to simplify the subsequent measurement of inventories by replacing the current lower of cost or market test with a lower of cost and net realizable value test. The guidance applies only to inventories for which cost is determined by methods other than last-in first-out and the retail inventory method. Application of the standard, which should be applied prospectively, is required for the annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated balance sheets. In February 2016, the FASB issued ASU 2016-02 "Leases". This guidance revises existing practice related to accounting for leases under Accounting Standards Codification Topic 840 Leases (ASC 840) for both lessees and lessors. The new guidance in ASU 2016-02 requires lessees to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). The lease liability will be equal to the present value of lease payments and the right-of-use asset will be based on the lease liability, subject to adjustment such as for initial direct costs. For income statement purposes, the new standard retains a dual model similar to ASC 840, requiring leases to be classified as either operating or finance. For lessees, operating leases will result in straight-line expense (similar to current accounting by lessees for operating leases under ASC 840), while finance leases will result in a front-loaded expense pattern (similar to current accounting by lessees for capital leases under ASC 840). While the new standard maintains similar accounting for lessors as under ASC 840, the new standard reflects updates to, among other things, align with certain changes to the lessee model. The guidance is effective for public entities for fiscal years beginning after December 15, 2018, including interim periods within those years. Early adoption is permitted for all entities. As disclosed in Note 14 of the Notes to Consolidated Financial Statements, the Company does have a significant number of leases for both property and equipment. As such, the Company expects that there will be a material impact on our financial position, results of operations and disclosures upon the adoption of ASU 2016-02. The Company will provide additional disclosure as the implementation plan progresses. In March 2016, the FASB issued ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting", which will require all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also will allow an employer to repurchase more of an employee's shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. The guidance is effective for public business entities for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016-09 will have on its financial position, results of operations and disclosures. In June 2016, the FASB issued ASU 2016-13 "Financial Instruments—Credit losses: Measurement of Credit Losses on Financial Instruments", which amends certain provisions of ASU 326, "Financial Instruments—Credit Loss". The ASU changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held to maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking "expected loss" model that generally will result in the earlier recognition of allowances for losses. For available for sale debt securities with unrealized losses, entities will be required to measure credit losses in a manner similar to what they do today, except that losses will be recognized as allowances rather than reductions in the amortized cost of the securities. Additionally, entities will have to disclose significantly more information, including information used to track credit quality by year or origination for most financing receivables. The ASU is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual periods, and will be applied as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period for which the guidance is effective. The Company is currently evaluating the impact that the adoption of ASU 2016-13 will have on its financial position, results of operations and disclosures. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments", which clarifies the treatment of several cash flow categories. In addition, ASU 2016-15 clarifies that when cash receipts and cash payments have aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source or use. This update is effective for annual periods beginning after December 15, 2017 and interim periods within those fiscal years, with early adoption permitted, including adoption in an interim period. The Company is currently evaluating the impact that the adoption of ASU 2016-15 will have on its cash flows and disclosures. |
Acquisition and Equity Method I
Acquisition and Equity Method Investments | 12 Months Ended |
Dec. 31, 2016 | |
Acquisition and Equity Method Investments | |
Acquisition and Equity Method Investments | 3. Acquisition and Equity Method Investments Acquisition On July 1, 2016, the Company acquired 100 percent of the common stock of Central Florida Box Corporation ("CFB"), a corrugated products manufacturer located near Orlando, Florida, for $15.4 million, net of cash acquired. Sales and total assets of CFB are not material to KapStone. Operating results of the acquisition since July 1, 2016 are included in the Company's Paper and Packaging segment operating results. The Company has allocated the purchase price to the fair value of assets acquired and liabilities assumed, of which $10.5 million has been allocated to plant, property and equipment, $1.7 million to net working capital, $1.0 million to goodwill (which is deductible for tax purposes) and $2.2 million to customer relationship intangible assets (to be amortized over a life of 10 years). The purchase price allocation is final. Transaction fees and expenses for the CFB acquisition related to due diligence, advisory and legal services have been expensed as incurred. These expenses were $1.1 million for the year ended December 31, 2016 and were recorded as selling, general and administrative expenses in the Consolidated Statements of Comprehensive Income. Equity Method Investments In September of 2016, the Company made a $10.6 million investment for a 49 percent equity interest in a sheet feeder operation located in Florida. In April of 2016, the Company made a $1.25 million investment for a 20 percent equity interest in a sheet feeder operation located in California. These investments are expected to increase the Company's vertical integration by over 60,000 tons per year and will ramp up to that level over eighteen months. Both investments are included in other assets on the Company's Consolidated Balance Sheets. For the year ended December 31, 2016, the Company recognized $0.5 million of income from these equity method investments. New Plant Start-up In April of 2016, the Company approved a plan to expand its geographical footprint into Southern California with a new sheet plant with a total estimated cost of approximately $14.0 million. In conjunction with this, the Company signed a 10-year lease agreement with a total commitment of approximately $9.8 million and had capital expenditures of approximately $12.0 million as of December 31, 2016. The new sheet plant started manufacturing boxes in February 2017 and is intended to primarily supply the Company's Victory distribution operations in Southern California, as well as other KapStone customers. |
Victory Acquisition
Victory Acquisition | 12 Months Ended |
Dec. 31, 2016 | |
Victory Acquisition | |
Victory Acquisition | 4. 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 $14.9 million as of December 31, 2016 and $13.3 million as of December 31, 2015 (and $9.6 million as of the date of the acquisition). The contingent consideration is included in other non-current liabilities on the Company's Consolidated Balance Sheets and its fair value is categorized as a Level 3 within the fair value hierarchy. This fair value analysis considers, among other items, the financial forecasts of the future operating results of Victory, the probability of reaching the forecast, and the associated discount rate. 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. 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 purchase price allocation is final. 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: Amounts 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 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, 2015 2014 (unaudited) Net sales $ $ Net income $ $ Net income per share—diluted $ $ |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventories | |
Inventories | 5. Inventories Inventories consist of the following at December 31, 2016 and 2015, respectively: December 31, 2016 2015 Raw materials $ $ Work in process Finished goods Replacement parts and supplies ​ ​ ​ ​ ​ ​ ​ ​ Inventory at FIFO costs LIFO inventory reserves ) ) ​ ​ ​ ​ ​ ​ ​ ​ Inventories $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2016 and 2015, finished goods inventory included inventory consigned to third parties totaling $9.6 million and $13.6 million, respectively. |
Plant, Property and Equipment,
Plant, Property and Equipment, net | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 and 2015, respectively: December 31, 2016 2015 Land and land improvements $ $ Buildings and leasehold improvements Machinery and equipment Construction-in-process ​ ​ ​ ​ ​ ​ ​ ​ Less accumulated depreciation and amortization ​ ​ ​ ​ ​ ​ ​ ​ Plant, property, and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ In 2015, the Company signed non-cancellable contracts with a third party to construct facilities to produce wood chips for the use at the Company's North Charleston and Roanoke Rapids paper mills. Accordingly, $46.6 million is included in construction-in-process as of December 31, 2016 for such projects with the same amount recognized in other long-term liabilities. Depreciation expense for the years ended December 31, 2016, 2015, and 2014, was $149.3 million, $136.9 million and $122.9 million, respectively. The increase in depreciation expense for the year ended December 31, 2016 was primarily due to $10.7 million of capital spending and $1.7 million from the Victory acquisition. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
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 2016 and 2015: Paper Distribution Total Balances at December 31, 2014 $ $ — $ Victory acquisition — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at December 31, 2015 $ $ $ CFB acquisition — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at December 31, 2016 $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table shows changes in other intangible assets for the years 2016 and 2015: Intangible Balances at December 31, 2014 $ Victory acquisition Other Amortization expense ) ​ ​ ​ ​ ​ Balances at December 31, 2015 $ CFB acquisition Other Amortization expense ) ​ ​ ​ ​ ​ Balances at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Intangible assets other than goodwill include the following: December 31, 2016 December 31, 2015 Gross Accumulated Net Gross Accumulated Net Definite-lived trademarks $ $ ) $ $ $ ) $ Customer lists and relationships ) ) Lease, contracts and other ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization expense for the years ended December 31, 2016, 2015, and 2014, was $32.9 million, $25.3 million and $13.7 million, respectively. The increase in amortization expense for the year ended December 31, 2016 and 2015 was primarily due to the Victory acquisition. Estimated amortization expense for the next five years, beginning with 2017, is as follows: $30.2 million, $29.9 million, $29.4 million, $29.4 million, and $29.1 million. At December 31, 2016, the weighted average remaining useful life for trademarks is 21.2 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, 2016 | |
Accrued Expenses | |
Accrued Expenses | 8. Accrued Expenses Accrued expenses consist of the following at December 31, 2016 and 2015, respectively: December 31, 2016 2015 Real and property taxes $ $ Energy costs Capital spending Customer rebates Worker's compensation Current postretirement obligation Freight Other accruals ​ ​ ​ ​ ​ ​ ​ ​ Accrued expenses $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Long-term Debt. | |
Long-term Debt | 9. Long-term Debt Long-term debt consists of the following at December 31, 2016 and 2015, respectively: December 31, 2016 2015 Term loan A-1 under Credit Agreement with interest payable monthly at LIBOR of 0.77% plus 1.75% at December 31, 2016 $ $ Term loan A-2 under Credit Agreement with interest payable monthly at LIBOR of 0.77% plus 1.875% at December 31, 2016 Receivable Credit Facility with interest payable monthly at LIBOR of 0.77% plus 0.75% at December 31, 2016 ​ ​ ​ ​ ​ ​ ​ ​ Total long-term debt Less unamortized debt issuance costs ) ) ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt, net of debt issuance costs $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest paid was $32.9 million, $28.1 million and $27.6 million, in 2016, 2015 and 2014, respectively. Interest paid was $4.8 million higher for the year ended 2016, primarily due to higher term loan balances associated with the Victory acquisition and higher interest rates. The principal portion of the total long-term debt at December 31, 2016 becomes due as follows: 2017 $ — 2018 — 2019 2020 2021 2022 ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Second Amended and Restated Credit Agreement KapStone and certain of our subsidiaries are parties to 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") of $1.915 billion, consisting of a Term Loan A-1 in the aggregate amount of $940 million and a Term Loan A-2 in the aggregate amount of $475 million and a $500 million revolving credit facility (the "Revolver"). In addition, the Credit Facility also includes an uncommitted accordion feature that allows the Company, subject to certain significant conditions, to request additional commitments from our existing or new lenders under the Credit Facility without further approvals of any existing lenders thereunder. The aggregate amount of such increases in potential commitments (and potential borrowings) is limited to $600 million, unless the Company would maintain a pro forma total leverage ratio of 2.5 to 1.0 or less after giving effect to the increase in potential commitments (and potential borrowings). On February 9, 2016, the Company entered into the First Amendment ("First Amendment") to the Credit Agreement. The First Amendment modified, 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 modified certain defined terms used in the calculation of the financial covenants in a manner favorable to the Company. The First Amendment also modified 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 based on the total leverage ratio of the Company. The Company paid approximately $2.3 million of loan amendment fees associated with the First Amendment, which are being amortized over the term of the Credit Agreement using the effective interest method. Receivables Credit Facility On June 8, 2016, the Company entered into Amendment No. 2 to the Receivables Purchase Agreement (the "Amendment to Receivables Purchase Agreement") amending its Receivables Purchase Agreement dated as of September 26, 2014 (as previously amended, the "Receivables Purchase Agreement"). In addition, the Company, KapStone Receivables, LLC ("KAR"), KapStone Kraft Paper Corporation, KapStone Container Corporation, KapStone Charleston Kraft LLC, Longview Fibre Paper and Packaging, Inc. ("Longview") and Victory (collectively, the "Originators"), entered into Amendment No. 2 to the Receivables Sales Agreement (the "Amendment to Receivables Sales Agreement" and, together with the Amendment to Receivables Purchase Agreement, the "Amendment") amending the Receivables Sales Agreement dated as of September 26, 2014 (as previously amended, the Receivables Sales Agreement). The Receivables Purchase Agreement and Receivables Sales Agreement, as amended by the Amendment, establishes the primary terms and conditions of an accounts receivable securitization program (the "Securitization Program"). The Amendment extended the "Facility Termination Date" (as defined in the Receivable Purchase Agreement) from June 8, 2016 to June 6, 2017. Under our Securitization Program, the Originators sell, on an ongoing basis without recourse, certain trade receivables to KAR, which 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, 2016, $368.9 million of our trade accounts receivables were sold to KAR. KAR in turn assigns a collateral interest in these receivables to a financial institution under a one-year $275 million facility (the "Receivables Credit Facility") for proceeds of $269.3 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. 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. Revolver As of December 31, 2016, the Company had no amounts outstanding under the Revolver with current availability of $483.4 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, 2016, the Company was in compliance with all applicable covenants in the Credit Agreement. Fair Value of Debt As of December 31, 2016, the fair value of the Company's debt approximates the carrying value of $1.5 billion as the variable interest rates re-price frequently at current market rates. As of December 31, 2016 and 2015 our weighted-average cost of borrowings was 2.40 percent and 2.05 percent, respectively. Other Current Borrowing In 2015, the Company entered into a $6.6 million financing agreement at an annual interest rates of approximately 1.70 percent for its annual property insurance premiums. The Company repaid this obligation as of December 31, 2015. |
Pension and Postretirement Bene
Pension and Postretirement Benefits | 12 Months Ended |
Dec. 31, 2016 | |
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. In 2016, management approved a plan to offer lump sum payments and insurance annuities to approximately 1,400 terminated vested Plan participants to reduce the risk of the Plan to its financial statements. Approximately 427 participants have accepted this plan, with a corresponding distribution of approximately $14.3 million in December 2016 recorded as part of "Benefits Paid". No settlement loss was recorded as the distribution is below the applicable threshold of the sum of service cost and interest cost recognized as components of net periodic pension cost for the year. 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, 2016 and 2015 were: Pension Benefits Other Benefits 2016 2015 2016 2015 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 ) ) ) ) Settlement distribution — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets at end of year $ $ $ — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The funded status and amounts recognized in our consolidated balance sheets at December 31, 2016 and 2015 were: Pension Benefits Other Benefits 2016 2015 2016 2015 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, 2016 and 2015 % % % % The accumulated benefit obligation for the defined Plan was $602.4 million and $626.1 million at December 31, 2016 and 2015, respectively. The change in our Plan funded status in 2016 is primarily due to a lower discount rate applied to the pension obligations as well as changes in mortality and other assumptions, the risk reduction plan and overall plan experience. In 2016, 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-2016 projection scale. In 2015, we utilized the RP-2014 mortality tables with MP-2015 projection scale. Components of pension benefit and other postretirement benefit (income) / cost was: Pension Benefits Other Benefits 2016 2015 2014 2016 2015 2014 Service cost $ $ $ $ $ $ Interest cost Expected return on plan assets ) ) ) — — — Amortization of prior service cost (benefit) ) ) ) Amortization of net loss (gain) — ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Benefit (income)/cost $ ) $ ) $ ) $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective in 2015, Longview salaried personnel received a 401(k) company matching contribution, under KapStone's contribution plan, rather than a cash balance plan contribution, which was included in the service cost component of net pension (income)/cost for the year ended December 31, 2014. Weighted-Average actuarial assumptions used to determine benefit costs were: Pension Benefits Other Benefits 2016 2015 2014 2016 2015 2014 Discount rate % % % % % % Long-term rate of return on plan assets % % % — — — The Company assumed health care cost trend rates for its postretirement benefits plans as follows: Plans 2017 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, 2016 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 2016 2015 2016 2015 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 pension expense during 2017 are as follows: Pension Other Prior service cost (benefit) $ $ ) Net actuarial loss / (gain) $ $ ) For the pension plan, 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, 2016 and 2015, $(60.8) million and $(63.3) 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, 2016 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, 2016: Year ended December 31, 2016 Limited 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, 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 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 (stocks, 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 expedient. For the year ended December 31, 2016, 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 percent 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, 2016. 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, 2016 and 2015, by asset category were as follows: 2016 2015 Target Fixed income % % % Equity securities % % % Cash % % — % Other % % — % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company's investment strategy is to invest 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 to the Plan in 2017. 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 2017 as claims are submitted. The following table presents estimated future gross benefit payments for the Company's plans: Pension Other 2017 $ $ 2018 2019 2020 2021 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 hourly employees and their dependents. Individual benefits generally continue until age 65. 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 U.S. Corrugated acquisitions, the Company assumed participation in the GCIU-Employer Retirement Fund for approximately 300 hourly employees at four corrugated products manufacturing plants. For the plan year ended December 31, 2015, the most recent date for which information was available, the contributions made by the Company were less than 5.3 percent of the total employers' contributions to the multiemployer plan. On October 31, 2016, the Company provided formal notification to the plan trustee of its withdrawal from the plan and cessation of plan contributions effective December 31, 2016. Accordingly, the Company recorded an estimated withdrawal liability of approximately $6.4 million, based on annual payments of approximately $0.4 million over 20 years, discounted at a credit adjusted risk-free rate return of approximately 3.6 percent. This liability is based on an analysis of the facts available to management; however, the withdrawal liability will ultimately be determined by the plan trustee. Defined Contribution Plan We offer a 401(k) Defined Contribution Plan ("Contribution Plans") 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 $9.2 million, $22.3 million and $15.1 million for the years ended December 31, 2016, 2015 and 2014, respectively, for matching contributions. In March 2016, the Company suspended matching contributions to its Contribution Plans for certain employees. As a result, contributions were $13.8 million lower for the year ended December 31, 2016 compared to 2015. This was partially offset by an increase of $0.7 million attributable to the inclusion of Victory for twelve months in 2016 compared to seven months in 2015. Effective January 1, 2017, the Company reinstated the Company matching contributions for all employees. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income taxes | |
Income taxes | 11. Income taxes The Company's U.S. federal statutory income tax rates were 35.0 percent for each of 2016, 2015 and 2014. The Company's effective income tax rates for the years ended December 31, 2016, 2015 and 2014 were 32.7 percent, 34.2 percent and 34.0 percent, respectively. The Company's provision for income taxes for the years ended December 31, 2016, 2015 and 2014 consists of the following: Years Ended December 31, 2016 2015 2014 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total United States Foreign — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total provision for income taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, 2016, 2015 and 2014, substantially all income was earned in the United States. For the years ended December 31, 2016 and 2015, foreign earnings include results from Victory's operations in Mexico, which was acquired June 1, 2015. Income taxes paid, net of refunds, were $23.8 million, $65.5 million and $77.5 million in 2016, 2015 and 2014, respectively. The Company's effective income tax rate differs from the statutory federal income tax rate as follows: Years Ended 2016 2015 2014 Statutory income tax rate % % % State income taxes, net of federal income tax benefit % % % Domestic manufacturing deduction )% )% )% 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, 2016 and 2015, are as follows: December 31, 2016 2015 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 $10.5 million of state tax net operating loss carry-forwards, which are available to reduce future taxable income in various state jurisdictions and expire between 2020 and 2036. The Company has $3.5 million of state tax credit carry-forwards, which expire between 2019 and 2036. Total unrecognized tax benefits as of December 31, 2016 and 2015 are $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, 2014 and 2015. The Company has open tax years for state and foreign income tax filings generally starting in 2012. |
Stockholder's equity
Stockholder's equity | 12 Months Ended |
Dec. 31, 2016 | |
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 62,636 shares and 34,413 shares were issued under the ESPP for the years ended December 31, 2016 and 2015, respectively. Common Stock Reserved for Issuance At December 31, 2016, approximately 8.0 million shares of common stock were reserved for issuance, including 7.2 million shares for stock awards and 0.8 million shares for the ESPP. Cash Dividends For the years ended December 31, 2016 and 2015, we paid $38.7 million of dividends to shareholders. On October 27, 2016, the board of directors approved a quarterly cash dividend $0.10 per share, which was paid on January 12, 2017, to shareholders of record as of December 30, 2016. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Stock-Based Compensation | |
Stock-Based Compensation | 13. Stock-Based Compensation Share-Based Plan On May 11, 2016, stockholders of the Company approved the 2016 Incentive Plan ("2016 Plan"). Under the 2016 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 9,100,000 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 2016 Plan. As of December 31, 2016, approximately 7.2 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 2016 Plan. The number of shares available under the 2016 Plan is subject to adjustment in the event of any stock split, stock dividend, recapitalization, spin-off or other similar action. 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 2016 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 has authority over the granting of all stock awards, but may delegate that authority to the full board of directors, or subject to certain exceptions, the Chief Executive Officer or another executive officer of the Company. 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, 2016, 2015 and 2014 is as follows: Years Ended December 31, 2016 2015 2014 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, 2016 and 2015 is as follows: December 31, 2016 2015 Unrecognized stock option compensation expense $ $ Unrecognized restricted stock unit compensation expense ​ ​ ​ ​ ​ ​ ​ ​ Total unrecognized stock-based compensation expense $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2016, 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 1.9 years and 1.8 years, respectively. In accordance with ASC 718, the Company recognized excess tax (deficiency) / benefits of $(0.2) million, $1.6 million and $2.6 million for the years ended December 31, 2016, 2015 and 2014, respectively. Stock Options In 2016, 2015, and 2014 the Company granted stock options for 1,265,046, 668,362 and 454,161 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 2016, 2015, and 2014 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 the average market price of our common stock on the date of grant. Compensation expense is recorded on an accelerated basis over the awards' vesting periods. A summary of information related to stock options is as follows: Options Weighted Weighted Intrinsic 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 $ Granted Exercised ) Lapsed (forfeited or cancelled) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at December 31, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The total intrinsic value of options exercised during 2016, 2015 and 2014 was $0.8 million, $2.0 million and $4.5 million, respectively. The weighted average fair value of the Company stock options granted in 2016, 2015 and 2014 was $3.82, $9.45 and $10.39, respectively. The fair value of awards granted in 2016, 2015 and 2014 was $4.8 million, $6.3 million and $4.7 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. 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 for the years ended December 31, 2016, 2015, and 2014 was $0.9 million. The assumptions utilized for determining the fair value of stock options awarded during the years 2016, 2015 and 2014 are as follows: December 31, 2016 2015 2014 KapStone Stock Options Black-Scholes assumptions (weighted average): Expected volatility % % % Expected life (years) Risk-free interest rate % % % Expected dividend yield % % — % Restricted Stock In 2016, 2015 and 2014, the Company granted restricted stock units of 393,389, 214,051 and 161,418 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 average 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: Units Weighted Outstanding at December 31, 2013 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2014 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2015 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The fair value of awards granted in 2016, 2015 and 2014 was $5.0 million, $6.5 million and $4.9 million, respectively. The fair value of awards vested in 2016, 2015 and 2014 was $3.2 million, $2.5 million and $2.2 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | 14. Commitments and Contingencies Commercial Commitments The Company's commercial commitments as of December 31, 2016 represent commitments not recorded on the consolidated balance sheets, 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 $16.6 million and $17.1 million of these commitments as of December 31, 2016 and 2015, respectively, with all expiring in 2017 if not renewed. No amounts have been drawn under these letters of credit. Operating Leases The Company leases space for 13 of its corrugated products manufacturing plants and approximately 60 of its distribution warehouses. Most of these leases include escalation clauses. 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, 2017 $ 2018 2019 2020 2021 Thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company's rental expense under operating leases amounted to $49.1 million, $36.0 million and $16.9 million for the years ended December 31, 2016, 2015 and 2014, respectively. The increase in rental expense for the year ended December 31, 2016 reflects the full year impact of the inclusion of more than 60 distribution centers assumed with the Victory acquisition on June 1, 2015. 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 $35.2 million, $39.1 million and $40.0 million of materials in accordance with the agreement for years ended December 31, 2016, 2015 and 2014, respectively. In September of 2015, the Company signed a non-cancellable contract with a third party to produce wood chips for use at the Company's North Charleston and Roanoke Rapids paper mills for twenty years, with an annual purchase obligation of approximately $13.0 million. The Company has committed to purchase $21.7 million of natural gas through 2020. Limited Partnership Investments The Plan invests in various limited partnership investments in accordance with their stated investment policies. As of December 31, 2016, the Plan had unfunded commitments to contribute capital to limited partnerships totaling $3.1 million. Union Contract Status At December 31, 2016, we had approximately 6,400 employees. Of these, approximately 2,400, or 38 percent, are represented by trade unions under collective bargaining agreements. The majority of our unionized employees are represented by the United Steel Workers union. Approximately 860, or 36 percent of these employees are operating under a collective bargaining agreement which expired in mid-2016. Negotiations to ratify new contracts are in process. Contingent Consideration The Company's contingent consideration obligation relates to the Victory acquisition that was consummated on June 1, 2015 and is considered a Level 3 liability. The fair value of the obligation as of December 31, 2016 and December 31, 2015 was $14.9 million and $13.3 million, respectively. The fair value of the contingent consideration is estimated based on the probability of reaching the performance measures through November 30, 2017. The probability is estimated by reviewing financial forecasts and assessing the likelihood of reaching the required performance measures based on factors specific to the acquisition. The discount rate is determined by applying a risk premium to a risk-free interest rate. The total potential payout under this obligation is $25.0 million. 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 occupational, health and safety matters, labor and employments matters, personal injury and property damage 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. 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. In October 2016, the Company's subsidiary KapStone Charleston Kraft LLC ("KCK") received a Notice of Alleged Violation from the South Carolina Department of Health and Environmental Control ("DHEC") in which DHEC made several allegations related to air regulatory requirements. Several of the allegations related to recordkeeping/reporting, monitoring or paperwork requirements which did not implicate actual emissions (and which have been corrected); however, three of the allegations related to periodic compliance monitoring of particulates from operating equipment sources that are considered to be serious under DHEC guidelines. No emissions from the monitoring resulted in any impact to the environment or human health, and no annual limits were exceeded because this allegation involved spare equipment that is operated only a limited number of days each year. Discussions with DHEC regarding the alleged violations are ongoing, and the resolution of the matters raised in this notice is uncertain at this time (and therefore the Company cannot reasonably estimate its potential liability for this enforcement matter). However, no capital expenditure is required and all repairs and corrective actions have been performed resulting in full compliance at the time of this report; thus the Company currently does not expect that the result of those discussions will be material to the Company. In January 2017, the Company received a letter from the state of Washington Department of Ecology contending that the Company may, along with several other companies, be responsible for investigation and cleanup of an allegedly contaminated site where the named companies, including Longview, may have stored petroleum products in the past. The letter concerns the possible release of petroleum products into the environment. In 1998, Longview (before it was acquired by the Company) and certain other companies who owned or operated underground storage tanks and pipes entered into an agreement for investigating and remediating the area independently of (but in consultation with) the Washington Department of Ecology. Upon expiration of the 1998 agreement, groundwater monitoring continued. The Company plans to respond to the notice and further investigate the allegations in the letter. Based upon the information available to the Company at this time, the Company cannot reasonably estimate its potential liability, if any, for this site. |
Net income per share
Net income per share | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 2015 2014 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 1,107,999 and 972,801 weighted average unexercised stock options were outstanding at December 31, 2016 and 2015, respectively, but were not included in the computation of diluted net income per share because the awards were anti-dilutive. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information | |
Segment Information | 16. Segment Information 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 operating income is measured on operating profits before foreign exchange losses, equity income and interest expense, net. An analysis of operations by segment is as follows: Net Sales Year Ended December 31, 2016 Trade Inter- Total Operating Depreciation Capital Total Assets Paper and Packaging(a): Containerboard / Corrugated products $ $ $ Specialty paper — Other — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Paper and Packaging $ $ $ $ $ $ $ Distribution — Corporate — — — ) Intersegment eliminations — ) ) — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ — $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Sales Year Ended December 31, 2015 Trade Inter- Total Operating Depreciation Capital Total Assets Paper and Packaging: Containerboard / Corrugated products $ $ $ Specialty paper — Other — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Paper and Packaging $ $ $ $ $ $ $ Distribution(b) — Corporate — — — ) Intersegment eliminations — ) ) — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ — $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Sales Year Ended December 31, 2014 Trade Inter- Total Operating Depreciation Capital Total Assets Paper and Packaging: Containerboard / Corrugated products $ $ — $ Specialty paper — Other — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Paper and Packaging $ $ — $ $ $ $ $ Distribution — — — — — — — Corporate — — — ) Intersegment eliminations — — — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ — $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) The Paper and Packaging segment income excludes $0.5 million of income from equity method investments. (b) 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: 2016 2015 2014 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 2016, 2015, or 2014. Substantially all long-lived assets are located within the United States. |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
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 2016 and 2015. 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, June 30, September 30, December 31, Fiscal 2016: Net sales $ $ $ $ Gross profit(1) $ $ $ $ Operating income(2) $ $ $ $ Net income $ $ $ $ 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 $6.6 million, $19.0 million, $3.8 million and $3.2 million in the quarters ended March 31, June 30, September 30 and December 31, 2016, respectively and $6.4 million of costs due to Hurricane Matthew in the quarter ended December 31, 2016. (2) Operating income includes a $6.4 million charge for withdrawing from its GCIU multiemployer pension plan. Quarters Ended March 31, June 30, September 30, December 31, Fiscal 2015: Net sales(1) $ $ $ $ Gross profit(2) $ $ $ $ Operating income $ $ $ $ Net income(3) $ $ $ $ Net income per share: Basic $ $ $ $ Diluted $ $ $ $ (1) Results of Victory are included 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 and $15.1 million caused by the Longview mill work stoppage in the quarter ended September 30, 2015. (3) Net income includes a pre-tax loss on debt extinguishment of $0.6 million for each of the quarters ended September 30 and December 31, 2015, respectively. Note: The sum of the quarters may not equal the total of the respective years' earnings per share on either a basic or dilute basis due to changes in the weighted average shares outstanding throughout the year. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events | |
Subsequent Events | 18. Subsequent Events On February 1, 2017, the Company acquired the assets of Associated Packaging, Inc. ("API") and Fast Pak, LLC with operations located in Greer, South Carolina for approximately $33.5 million. The acquisition was funded from borrowings on the Company's Revolver. API provides corrugated packaging and digital production needs serving a diverse customer base, including an emphasis on fulfillment and kitting for the Automotive and Consumer Products Industries. The acquisition further strengthens the Company's goal of increasing mill integration. The purchase price allocation has not been completed due to the timing of the close of the acquisition. On February 21, 2017, the Company entered into Amendment No. 3 to the Receivables Sale Agreement to amend the Securitization Program. All accounts receivable purchased from API and Fast Pak, LLC (the "Sellers") and all accounts receivable generated from facilities acquired from the Sellers that are not paid to an eligible bank account are designated as "Excluded Receivables". |
Significant Accounting Polici26
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
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 2016, 2015, and 2014, customer rebates totaled $34.3 million, $32.7 million and $28.3 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 2016, 2015 and 2014, cost of sales was reduced by $32.6 million, $36.1 million and $35.8 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 $32.6 million, $37.4 million and $36.1 million related to planned maintenance outages are included in cost of sales for the years ended December 31, 2016, 2015 and 2014, 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 2016, 2015 or 2014. In order to mitigate credit risk, the Company obtains letters of credit for certain export customers. For the years ended December 31, 2016, 2015 and 2014, net sales to U.S. based customers were 83 percent, 82 percent and 80 percent, respectively, of consolidated net sales. Net sales to foreign based customers during 2016, 2015 and 2014 were 17 percent, 18 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, 2016, 2015 and 2014 changes to the allowance for doubtful accounts are summarized as follows ($000's): Year ended: Balance at Acquisition Charged to Write-offs Balance at December 31, 2016 $ — $ $ ) $ December 31, 2015 $ $ $ $ ) $ December 31, 2014 $ $ — $ $ ) $ |
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 remeasured 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, pension assets, contingent consideration liability and accounts payables are financial assets and liabilities with carrying values that approximate fair value. The Company's variable rate term loans are financial liabilities with fair values that approximate their carrying value of $1.5 billion. See Note 9 "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 KapStone locations with the exception of the Longview Paper mill and the seven corrugated products manufacturing plants, which are on the last-in, first-out method. In total, these locations represent 22 percent and 26 percent of consolidated inventories as of December 31, 2016 and 2015, respectively. 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 Victory acquisition, KapStone acquired inventories which were recorded 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. |
Leases | Leases —The Company assesses lease classification as either capital or operating at lease inception or upon modification. We lease twelve of our corrugated products manufacturing plants and most distribution centers, as well as other property and equipment, under operating leases. For purposes of determining straight-line rent expense, the lease term is calculated from the date of possession of the facility, including any periods of free rent and any renewal option periods that are reasonably assured of being exercised. |
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 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. The Company performed a quantitative assessment and it 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 interest rates for long-term high quality bonds. 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 exceeds the larger of 10 percent 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, 2016, 2015 and 2014, $4.8 million, $5.5 million and $5.7 million, respectively, of debt issuance costs have been amortized and recognized within interest expense, net. In 2016, 2015 and 2014, the Company recorded losses on debt extinguishment of $0.7 million, $1.2 million and $5.6 million, respectively, due to voluntary prepayments totaling $64.7 million, $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 —The Company reports results in two reportable 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 corrugated products manufacturing 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 corrugated packaging materials and other specialty packaging products, which include stretch film, void fill, carton sealing tape and other specialty tapes. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued 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". 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 in the diagnostic phase of evaluating the overall impact of ASU 2014-09. As of December 31, 2016, the Company has determined that it will adopt this standard utilizing the modified retrospective method, which will result in the recognition of the cumulative effect of initially applying the standard (if any) as an adjustment to opening retained earnings for the fiscal year beginning January 1, 2018. The Company will provide additional disclosure as our implementation plan progresses. In July 2015, the FASB issued ASU 2015-11, "Simplifying the Measurement of Inventory", which is intended to simplify the subsequent measurement of inventories by replacing the current lower of cost or market test with a lower of cost and net realizable value test. The guidance applies only to inventories for which cost is determined by methods other than last-in first-out and the retail inventory method. Application of the standard, which should be applied prospectively, is required for the annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated balance sheets. In February 2016, the FASB issued ASU 2016-02 "Leases". This guidance revises existing practice related to accounting for leases under Accounting Standards Codification Topic 840 Leases (ASC 840) for both lessees and lessors. The new guidance in ASU 2016-02 requires lessees to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). The lease liability will be equal to the present value of lease payments and the right-of-use asset will be based on the lease liability, subject to adjustment such as for initial direct costs. For income statement purposes, the new standard retains a dual model similar to ASC 840, requiring leases to be classified as either operating or finance. For lessees, operating leases will result in straight-line expense (similar to current accounting by lessees for operating leases under ASC 840), while finance leases will result in a front-loaded expense pattern (similar to current accounting by lessees for capital leases under ASC 840). While the new standard maintains similar accounting for lessors as under ASC 840, the new standard reflects updates to, among other things, align with certain changes to the lessee model. The guidance is effective for public entities for fiscal years beginning after December 15, 2018, including interim periods within those years. Early adoption is permitted for all entities. As disclosed in Note 14 of the Notes to Consolidated Financial Statements, the Company does have a significant number of leases for both property and equipment. As such, the Company expects that there will be a material impact on our financial position, results of operations and disclosures upon the adoption of ASU 2016-02. The Company will provide additional disclosure as the implementation plan progresses. In March 2016, the FASB issued ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting", which will require all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also will allow an employer to repurchase more of an employee's shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. The guidance is effective for public business entities for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016-09 will have on its financial position, results of operations and disclosures. In June 2016, the FASB issued ASU 2016-13 "Financial Instruments—Credit losses: Measurement of Credit Losses on Financial Instruments", which amends certain provisions of ASU 326, "Financial Instruments—Credit Loss". The ASU changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held to maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking "expected loss" model that generally will result in the earlier recognition of allowances for losses. For available for sale debt securities with unrealized losses, entities will be required to measure credit losses in a manner similar to what they do today, except that losses will be recognized as allowances rather than reductions in the amortized cost of the securities. Additionally, entities will have to disclose significantly more information, including information used to track credit quality by year or origination for most financing receivables. The ASU is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual periods, and will be applied as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period for which the guidance is effective. The Company is currently evaluating the impact that the adoption of ASU 2016-13 will have on its financial position, results of operations and disclosures. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments", which clarifies the treatment of several cash flow categories. In addition, ASU 2016-15 clarifies that when cash receipts and cash payments have aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source or use. This update is effective for annual periods beginning after December 15, 2017 and interim periods within those fiscal years, with early adoption permitted, including adoption in an interim period. The Company is currently evaluating the impact that the adoption of ASU 2016-15 will have on its cash flows and disclosures. |
Significant Accounting Polici27
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Significant Accounting Policies | |
Schedule of changes to the allowance for doubtful accounts | At December 31, 2016, 2015 and 2014 changes to the allowance for doubtful accounts are summarized as follows ($000's): Year ended: Balance at Acquisition Charged to Write-offs Balance at December 31, 2016 $ — $ $ ) $ December 31, 2015 $ $ $ $ ) $ December 31, 2014 $ $ — $ $ ) $ |
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) - Victory | 12 Months Ended |
Dec. 31, 2016 | |
Victory Acquisition | |
Summary of preliminary allocation of acquisition consideration to the fair value of assets acquired and liabilities assumed | Amounts 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 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of unaudited pro forma data | Years Ended December 31, 2015 2014 (unaudited) Net sales $ $ Net income $ $ Net income per share—diluted $ $ |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventories | |
Schedule of Inventories | December 31, 2016 2015 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, 2016 | |
Plant, Property and Equipment, net | |
Schedule of plant, property and equipment, net | December 31, 2016 2015 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, 2016 | |
Goodwill and Other Intangible Assets | |
Schedule of changes in goodwill | Paper Distribution Total Balances at December 31, 2014 $ $ — $ Victory acquisition — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at December 31, 2015 $ $ $ CFB acquisition — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at December 31, 2016 $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of changes in other intangible assets | Intangible Balances at December 31, 2014 $ Victory acquisition Other Amortization expense ) ​ ​ ​ ​ ​ Balances at December 31, 2015 $ CFB acquisition Other Amortization expense ) ​ ​ ​ ​ ​ Balances at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of intangible assets other than goodwill | December 31, 2016 December 31, 2015 Gross Accumulated Net Gross Accumulated Net Definite-lived trademarks $ $ ) $ $ $ ) $ Customer lists and relationships ) ) Lease, contracts and other ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses | |
Schedule of accrued expenses | December 31, 2016 2015 Real and property taxes $ $ Energy costs Capital spending Customer rebates Worker's compensation Current postretirement obligation Freight Other accruals ​ ​ ​ ​ ​ ​ ​ ​ Accrued expenses $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Long-term Debt. | |
Schedule of long-term debt | December 31, 2016 2015 Term loan A-1 under Credit Agreement with interest payable monthly at LIBOR of 0.77% plus 1.75% at December 31, 2016 $ $ Term loan A-2 under Credit Agreement with interest payable monthly at LIBOR of 0.77% plus 1.875% at December 31, 2016 Receivable Credit Facility with interest payable monthly at LIBOR of 0.77% plus 0.75% at December 31, 2016 ​ ​ ​ ​ ​ ​ ​ ​ 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, 2016 becomes due as follows: 2017 $ — 2018 — 2019 2020 2021 2022 ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Pension and Postretirement Be34
Pension and Postretirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Pension and Postretirement Benefits | |
Schedule of changes in benefit obligations and Plan assets | Pension Benefits Other Benefits 2016 2015 2016 2015 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 ) ) ) ) Settlement distribution — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets at end of year $ $ $ — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of funded status and amounts recognized in Consolidated Balance Sheets | Pension Benefits Other Benefits 2016 2015 2016 2015 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, 2016 and 2015 % % % % |
Schedule of pension and other postretirement benefit (income)/costs | Pension Benefits Other Benefits 2016 2015 2014 2016 2015 2014 Service cost $ $ $ $ $ $ Interest cost Expected return on plan assets ) ) ) — — — Amortization of prior service cost (benefit) ) ) ) Amortization of net loss (gain) — ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Benefit (income)/cost $ ) $ ) $ ) $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of weighted-average actuarial assumptions used to determine benefit costs | Pension Benefits Other Benefits 2016 2015 2014 2016 2015 2014 Discount rate % % % % % % Long-term rate of return on plan assets % % % — — — |
Schedule of assumed health care cost trend rates postretirement benefits plans | Plans 2017 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, 2016 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 2016 2015 2016 2015 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 pension expense | The amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net pension expense during 2017 are as follows: Pension Other 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, 2016 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, 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 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of changes in the fair value of the Plan's level three assets | Year ended December 31, 2016 Limited 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 | 2016 2015 Target Fixed income % % % Equity securities % % % Cash % % — % Other % % — % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of estimated future benefit payments | Pension Other 2017 $ $ 2018 2019 2020 2021 Succeeding 5 years |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income taxes | |
Schedule of provision for income taxes | Years Ended December 31, 2016 2015 2014 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 2016 2015 2014 Statutory income tax rate % % % State income taxes, net of federal income tax benefit % % % Domestic manufacturing deduction )% )% )% Other )% )% )% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective income tax rate % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of significant portion of deferred tax assets and liabilities | December 31, 2016 2015 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, 2016 | |
Stock-Based Compensation | |
Schedule of total stock-based compensation expense | Years Ended December 31, 2016 2015 2014 Stock option compensation expense $ $ $ Restricted stock unit compensation expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stock-based compensation expense $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of total unrecognized stock-based compensation | December 31, 2016 2015 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 Weighted Intrinsic 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 $ Granted Exercised ) Lapsed (forfeited or cancelled) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at December 31, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of the assumptions utilized for calculating the fair value of stock options | December 31, 2016 2015 2014 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 Outstanding at December 31, 2013 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2014 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2015 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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, 2017 $ 2018 2019 2020 2021 Thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Net income per share (Tables)
Net income per share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Net income per share | |
Schedule of basic and diluted net income per share | Years Ended December 31, 2016 2015 2014 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) - Paper and Packaging | 12 Months Ended |
Dec. 31, 2016 | |
Schedule of an analysis of operations by segment | Net Sales Year Ended December 31, 2016 Trade Inter- Total Operating Depreciation Capital Total Assets Paper and Packaging(a): Containerboard / Corrugated products $ $ $ Specialty paper — Other — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Paper and Packaging $ $ $ $ $ $ $ Distribution — Corporate — — — ) Intersegment eliminations — ) ) — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ — $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Sales Year Ended December 31, 2015 Trade Inter- Total Operating Depreciation Capital Total Assets Paper and Packaging: Containerboard / Corrugated products $ $ $ Specialty paper — Other — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Paper and Packaging $ $ $ $ $ $ $ Distribution(b) — Corporate — — — ) Intersegment eliminations — ) ) — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ — $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Sales Year Ended December 31, 2014 Trade Inter- Total Operating Depreciation Capital Total Assets Paper and Packaging: Containerboard / Corrugated products $ $ — $ Specialty paper — Other — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Paper and Packaging $ $ — $ $ $ $ $ Distribution — — — — — — — Corporate — — — ) Intersegment eliminations — — — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ — $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) The Paper and Packaging segment income excludes $0.5 million of income from equity method investments. (b) 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. |
Schedule of net sales by location | Years Ended December 31, Net sales by location: 2016 2015 2014 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, 2016 | |
Quarterly Financial Information (Unaudited) | |
Summary of quarterly supplemental consolidated financial information | Quarters Ended March 31, June 30, September 30, December 31, Fiscal 2016: Net sales $ $ $ $ Gross profit(1) $ $ $ $ Operating income(2) $ $ $ $ Net income $ $ $ $ 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 $6.6 million, $19.0 million, $3.8 million and $3.2 million in the quarters ended March 31, June 30, September 30 and December 31, 2016, respectively and $6.4 million of costs due to Hurricane Matthew in the quarter ended December 31, 2016. (2) Operating income includes a $6.4 million charge for withdrawing from its GCIU multiemployer pension plan. Quarters Ended March 31, June 30, September 30, December 31, Fiscal 2015: Net sales(1) $ $ $ $ Gross profit(2) $ $ $ $ Operating income $ $ $ $ Net income(3) $ $ $ $ Net income per share: Basic $ $ $ $ Diluted $ $ $ $ (1) Results of Victory are included 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 and $15.1 million caused by the Longview mill work stoppage in the quarter ended September 30, 2015. (3) Net income includes a pre-tax loss on debt extinguishment of $0.6 million for each of the quarters ended September 30 and December 31, 2015, respectively. |
Description of Business and B41
Description of Business and Basis of Presentation (Details) | Jun. 01, 2015 |
Victory | |
Victory Acquisition | |
Percentage of interest acquired in acquisition transaction | 100.00% |
Significant Accounting Polici42
Significant Accounting Policies - Concentration of Risk - (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue Recognition | |||||||||||
Customer rebates | $ 34.3 | $ 32.7 | $ 28.3 | ||||||||
Planned Maintenance Outage Costs | |||||||||||
Planned maintenance outages | $ 3.2 | $ 3.8 | $ 19 | $ 6.6 | $ 13.3 | $ 4.4 | $ 11.1 | $ 8.6 | |||
Cost of Sales | |||||||||||
Cost of Sales | |||||||||||
Reduction in cost of sales | 32.6 | 36.1 | 35.8 | ||||||||
Planned Maintenance Outage Costs | |||||||||||
Planned maintenance outages | $ 32.6 | $ 37.4 | $ 36.1 | ||||||||
Net sales. | Sales by geographical location | US based customers | |||||||||||
Concentrations of Risk | |||||||||||
Net sales (as a percent) | 83.00% | 82.00% | 80.00% | ||||||||
Net sales. | Sales by geographical location | Foreign based customers | |||||||||||
Concentrations of Risk | |||||||||||
Net sales (as a percent) | 17.00% | 18.00% | 20.00% |
Significant Accounting Polici43
Significant Accounting Policies - Allowance for Doubtful Accounts, Fair value of Financial Instruments and Inventories - (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Changes to the allowance for doubtful accounts | |||
Balance at beginning of year | $ 1,084 | $ 285 | $ 682 |
Acquisition | 742 | ||
Charged to Expense | 881 | 368 | 217 |
Write-offs | (612) | (311) | (614) |
Balance at end of year | 1,353 | $ 1,084 | $ 285 |
Fair value of Financial Instruments | |||
Fair value of variable rate term loan and short-term borrowings | $ 1,500,000 | ||
Longview Paper mill and the corrugated products manufacturing plants | |||
Inventories | |||
Percentage of LIFO inventory to total inventory (as a percent) | 22.00% | 26.00% |
Significant Accounting Polici44
Significant Accounting Policies - Property, Plant, and Equipment and Leases (Details) | 12 Months Ended |
Dec. 31, 2016Plant | |
Plant, property and equipment, net | |
Number of leased corrugated products manufacturing plants | 12 |
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 Polici45
Significant Accounting Policies - Amortization of Debt Issuance Costs (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Significant Accounting Policies | |||||
Number of reporting units | item | 3 | ||||
Amortization of Debt Issuance Costs | |||||
Amortization of debt issuance costs | $ 4,804 | $ 5,546 | $ 5,696 | ||
Loss on debt extinguishment | $ 600 | $ 600 | 679 | 1,218 | 5,617 |
Voluntary prepayments on term loans | $ 64,700 | $ 103,500 | $ 325,000 | ||
Segment information | |||||
Number of operating segments | item | 2 |
Acquisition and Equity Method46
Acquisition and Equity Method Investments - Acquisition (Details) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Fair value of the assets acquired and liabilities assumed | |||||
Goodwill | $ 705,617 | $ 705,617 | $ 704,592 | $ 533,851 | |
Finite-lived intangible assets | 314,413 | $ 314,413 | 344,583 | $ 110,077 | |
Estimated Useful Life ( in Years) | 13 years | ||||
Customer relationship intangible assets | |||||
Fair value of the assets acquired and liabilities assumed | |||||
Finite-lived intangible assets | 266,144 | $ 266,144 | $ 290,036 | ||
Estimated Useful Life ( in Years) | 12 years | ||||
Central Florida Box Corporation Acquisition | |||||
Fair value of the assets acquired and liabilities assumed | |||||
Percentage of common stock acquired in business acquisition | 100.00% | ||||
Acquisition consideration, net of cash acquired | $ 15,400 | ||||
Plant, property and equipment | 10,500 | ||||
Net working capital | 1,700 | ||||
Goodwill | $ 1,000 | ||||
Acquisitions | $ 2,200 | ||||
Estimated Useful Life ( in Years) | 10 years | ||||
Central Florida Box Corporation Acquisition | Selling, general and administrative expenses | |||||
Fair value of the assets acquired and liabilities assumed | |||||
Transaction fees and expenses | $ 1,100 | ||||
Central Florida Box Corporation Acquisition | Customer relationship intangible assets | |||||
Fair value of the assets acquired and liabilities assumed | |||||
Finite-lived intangible assets | $ 2,200 |
Acquisition and Equity Method47
Acquisition and Equity Method Investments - Equity Method Investments (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016USD ($) | Apr. 30, 2016USD ($) | Dec. 31, 2016T | Dec. 31, 2016USD ($) | |
Equity Method Investments | ||||
Equity investment | $ 11,807 | |||
Equity method investments income | $ (548) | |||
Sheet Feeder Equity Investments | ||||
Equity Method Investments | ||||
Expected vertical integration ramp up time | 18 months | |||
Sheet Feeder Equity Investments | Minimum | ||||
Equity Method Investments | ||||
Number of tons expected from vertical integration | T | 60,000 | |||
Sheet Feeder Equity Investment Florida | ||||
Equity Method Investments | ||||
Ownership interest (as a percent) | 49.00% | |||
Sheet Feeder Equity Investment Florida | Other Assets | ||||
Equity Method Investments | ||||
Equity investment | $ 10,600 | |||
Sheet Feeder Equity Investment California | ||||
Equity Method Investments | ||||
Ownership interest (as a percent) | 20.00% | |||
Sheet Feeder Equity Investment California | Other Assets | ||||
Equity Method Investments | ||||
Equity investment | $ 1,250 |
Acquisition and Equity Method48
Acquisition and Equity Method Investments - New Plant Start-up (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Apr. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | |
New Plant Start-up | |||
Lease agreement term | 10 years | 20 years | 15 years |
Capital Expenditures | $ (11,807) | ||
Asset under Construction -Ontario California | |||
New Plant Start-up | |||
Estimated sheet plant cost | $ 14,000 | ||
Total lease commitment | $ 9,800 |
Victory Acquisition - Acquisiti
Victory Acquisition - Acquisition Details (Details) - USD ($) $ in Millions | Jun. 01, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Maximum | |||
Victory Acquisition | |||
Contingent consideration if certain performance criteria are satisfied | $ 25 | ||
Victory | |||
Victory Acquisition | |||
Percentage of interest acquired in acquisition transaction | 100.00% | ||
Total consideration, net of cash acquired | $ 615 | ||
Working capital adjustments | 2 | ||
Escrow to fund certain limited indemnity obligations | $ 40 | ||
Threshold period from closing of sale for potential additional contingent consideration | 30 months | ||
Victory | Other Non-current Liabilities | |||
Victory Acquisition | |||
Fair value of contingent consideration | $ 9.6 | $ 14.9 | $ 13.3 |
Victory | Maximum | |||
Victory Acquisition | |||
Contingent consideration if certain performance criteria are satisfied | $ 25 |
Victory Acquisition - Allocatio
Victory Acquisition - Allocation of Acquisition Consideration (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Fair value of the assets acquired and liabilities assumed | ||||
Goodwill | $ 705,617 | $ 704,592 | $ 533,851 | |
Victory | 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 Acquisition - Unaudited
Victory Acquisition - Unaudited Consolidated Pro Forma Financial Information (Details) - Victory - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Victory Acquisition | ||
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 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventories | ||
Raw materials | $ 79,377 | $ 101,250 |
Work in process | 6,371 | 6,165 |
Finished goods | 151,497 | 149,774 |
Replacement parts and supplies | 85,857 | 79,717 |
Inventory at FIFO costs | 323,102 | 336,906 |
LIFO inventory reserves | (438) | (1,003) |
Inventories | 322,664 | 335,903 |
Finished goods consigned to third parties | $ 9,600 | $ 13,600 |
Plant, Property and Equipment53
Plant, Property and Equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Plant, property and equipment, net | |||
Plant, property and equipment, gross | $ 2,095,133 | $ 1,937,392 | |
Less accumulated depreciation and amortization | 653,576 | 531,246 | |
Plant, property and equipment, net | 1,441,557 | 1,406,146 | |
Other Liabilities, Noncurrent | 85,761 | 24,038 | |
Depreciation expense | 149,318 | 136,886 | $ 122,880 |
Capital Expenditures | 126,865 | 126,756 | $ 137,232 |
Land and land improvements | |||
Plant, property and equipment, net | |||
Plant, property and equipment, gross | 76,704 | 75,033 | |
Buildings and leasehold improvements | |||
Plant, property and equipment, net | |||
Plant, property and equipment, gross | 177,705 | 158,274 | |
Machinery and equipment | |||
Plant, property and equipment, net | |||
Plant, property and equipment, gross | 1,741,552 | 1,650,430 | |
Construction-in-process | |||
Plant, property and equipment, net | |||
Plant, property and equipment, gross | 99,172 | $ 53,655 | |
North Charleston And Roanoke Rapids paper mills | |||
Plant, property and equipment, net | |||
Other Liabilities, Noncurrent | 46,600 | ||
North Charleston And Roanoke Rapids paper mills | Construction-in-process | |||
Plant, property and equipment, net | |||
Plant, property and equipment, gross | 46,600 | ||
Victory | |||
Plant, property and equipment, net | |||
Depreciation expense | 1,700 | ||
Capital Expenditures | $ 10,700 |
Goodwill and Other Intangible54
Goodwill and Other Intangible Assets - Changes in Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill | ||
Balances at the beginning of the period | $ 704,592 | $ 533,851 |
Balance at the end of the period | 705,617 | 704,592 |
Victory | ||
Goodwill | ||
Acquisitions | 1,025 | 170,741 |
Paper and Packaging | ||
Goodwill | ||
Balances at the beginning of the period | 533,851 | 533,851 |
Balance at the end of the period | 534,876 | 533,851 |
Paper and Packaging | Victory | ||
Goodwill | ||
Acquisitions | 1,025 | |
Distribution | ||
Goodwill | ||
Balances at the beginning of the period | 170,741 | |
Balance at the end of the period | $ 170,741 | 170,741 |
Distribution | Victory | ||
Goodwill | ||
Acquisitions | $ 170,741 |
Goodwill and Other Intangible55
Goodwill and Other Intangible Assets - Changes in Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Intangible Assets, Net | |||
Balance at the beginning of the period | $ 344,583 | $ 110,077 | |
Other | 525 | 2,000 | |
Amortization expense | (32,895) | (25,293) | $ (13,668) |
Balance at the end of the period | 314,413 | 344,583 | $ 110,077 |
Victory | |||
Intangible Assets, Net | |||
Acquisitions | $ 257,800 | ||
Central Florida Box Corporation Acquisition | |||
Intangible Assets, Net | |||
Acquisitions | $ 2,200 |
Goodwill and Other Intangible56
Goodwill and Other Intangible Assets - Intangible Assets Other Than Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Intangible assets other than goodwill | |||
Gross Carrying Amount | $ 432,972 | $ 430,247 | |
Accumulated Amortization | (118,559) | (85,664) | |
Total | 314,413 | 344,583 | $ 110,077 |
Amortization of intangible assets | 32,895 | 25,293 | $ 13,668 |
Estimated amortization expense | |||
2,017 | 30,200 | ||
2,018 | 29,900 | ||
2,019 | 29,400 | ||
2,020 | 29,400 | ||
2,021 | $ 29,100 | ||
Estimated Useful Life ( in Years) | 13 years | ||
Definite-lived trademarks | |||
Intangible assets other than goodwill | |||
Gross Carrying Amount | $ 69,325 | 68,800 | |
Accumulated Amortization | (32,060) | (28,103) | |
Total | $ 37,265 | 40,697 | |
Estimated amortization expense | |||
Estimated Useful Life ( in Years) | 21 years 2 months 12 days | ||
Customer relationship intangible assets | |||
Intangible assets other than goodwill | |||
Gross Carrying Amount | $ 333,404 | 331,204 | |
Accumulated Amortization | (67,260) | (41,168) | |
Total | $ 266,144 | 290,036 | |
Estimated amortization expense | |||
Estimated Useful Life ( in Years) | 12 years | ||
Lease, contracts and other | |||
Intangible assets other than goodwill | |||
Gross Carrying Amount | $ 30,243 | 30,243 | |
Accumulated Amortization | (19,239) | (16,393) | |
Total | $ 11,004 | $ 13,850 | |
Estimated amortization expense | |||
Estimated Useful Life ( in Years) | 6 years |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued Expenses | ||
Real and property taxes | $ 13,090 | $ 14,040 |
Energy costs | 12,527 | 10,755 |
Capital spending | 7,883 | 12,767 |
Customer rebates | 9,998 | 8,332 |
Worker's compensation | 8,249 | 7,642 |
Current postretirement obligation | 1,378 | 1,839 |
Freight | 2,354 | 1,951 |
Other accruals | 21,001 | 15,812 |
Accrued expenses | $ 76,480 | $ 73,138 |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 01, 2015 | |
Long term debt | ||||
Long-term debt | $ 1,503,148 | $ 1,564,177 | ||
Less unamortized debt issuance costs | (17,825) | (20,429) | ||
Total long-term debt, net of current portion and debt issuance costs | 1,485,323 | 1,543,748 | ||
Interest paid | 32,900 | 28,100 | $ 27,600 | |
Credit Facility | ||||
Long term debt | ||||
Long-term debt | $ 1,915,000 | |||
Term Loans | ||||
Long term debt | ||||
Increase in interest paid | 4,800 | |||
Term Loan A1 | ||||
Long term debt | ||||
Long-term debt | $ 775,500 | 834,250 | 940,000 | |
LIBOR | 0.77% | |||
Term Loan A1 | LIBOR | ||||
Long term debt | ||||
Margin interest above reference rate (as a percent) | 1.75% | |||
Term Loan A2 | ||||
Long term debt | ||||
Long-term debt | $ 458,375 | 464,313 | $ 475,000 | |
LIBOR | 0.77% | |||
Term Loan A2 | LIBOR | ||||
Long term debt | ||||
Margin interest above reference rate (as a percent) | 1.875% | |||
Receivables Credit Facility | ||||
Long term debt | ||||
Long-term debt | $ 269,273 | $ 265,614 | ||
LIBOR | 0.77% | |||
Receivables Credit Facility | LIBOR | ||||
Long term debt | ||||
Margin interest above reference rate (as a percent) | 0.75% |
Long-term Debt - Principal Port
Long-term Debt - Principal Portion of Long-Term Debt Due (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Principal portion of long-term debt due | |
2,019 | $ 51,750 |
2,020 | 1,002,523 |
2,021 | 4,750 |
2,022 | 444,125 |
Total | $ 1,503,148 |
Long-term Debt - Second Amended
Long-term Debt - Second Amended and Restated Credit Agreement (Details) $ in Thousands | Jun. 01, 2015USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Long term debt | ||||
Long-term debt | $ 1,503,148 | $ 1,564,177 | ||
Payments of Financing Costs | 2,250 | 10,790 | $ 1,081 | |
Credit Facility | ||||
Long term debt | ||||
Long-term debt | $ 1,915,000 | |||
Pro forma leverage ratio threshold to increase commitments under the Credit Facility | 2.50 | |||
Payments of Financing Costs | 2,300 | |||
Term Loan A1 | ||||
Long term debt | ||||
Long-term debt | $ 940,000 | 775,500 | 834,250 | |
Term Loan A2 | ||||
Long term debt | ||||
Long-term debt | 475,000 | $ 458,375 | $ 464,313 | |
Revolver | Credit Facility | ||||
Long term debt | ||||
Long-term debt | 500,000 | |||
Maximum borrowing capacity | $ 600,000 |
Long-term Debt - Receivables Cr
Long-term Debt - Receivables Credit Facility (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Long-term Debt | |||
Trade receivables with securitization facility | $ 368,922 | $ 345,372 | |
Proceeds from receivables credit facility | 43,001 | $ 134,701 | $ 175,000 |
Receivables Credit Facility | |||
Long-term Debt | |||
Trade receivables with securitization facility | $ 368,900 | ||
Term of debt instrument | 1 year | ||
Proceeds from receivables credit facility | $ 269,300 | ||
Maximum | Receivables Credit Facility | |||
Long-term Debt | |||
Maximum borrowing capacity | $ 275,000 |
Long-term Debt - Other Debt (De
Long-term Debt - Other Debt (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value of Debt | ||
Weighted average cost of borrowings | 2.40% | 2.05% |
Revolver | ||
Other Borrowings | ||
Amount outstanding | $ 0 | |
Current availability under borrowing base | 483.4 | |
Level 2 | ||
Fair Value of Debt | ||
Fair value of debt | $ 1,500 | |
Other Financing Agreements | ||
Other Borrowings | ||
Initial aggregate principal amount | $ 6.6 | |
Interest rate on borrowings (as a percent) | 1.70% |
Pension and Postretirement Be63
Pension and Postretirement Benefits (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2016USD ($)item | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Change in Plan Assets | ||||
Fair value of plan assets at beginning of year | $ 593,125 | |||
Fair value of plan assets at end of year | $ 574,356 | 574,356 | $ 593,125 | |
Weighted-Average Discount Rate Assumption used to Determine Projected Benefit Obligations | ||||
Accumulated benefit obligation | $ 602,400 | $ 602,400 | 626,100 | |
Assumed health care cost trend rates postretirement benefits plans | ||||
Health care cost trend rate assumed for next year (as a percent) | 6.50% | |||
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 | $ (8) | |||
Accumulated benefit obligation | 161 | |||
Plus 1% | ||||
Service and interest cost | 8 | |||
Accumulated benefit obligation | $ 169 | |||
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% | 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) | $ (60,800) | $ (60,800) | (63,300) | |
Pension Benefits | ||||
Pension and Postretirement Benefits | ||||
Number of terminated vested participants offered a lump sum payout | item | 1,400 | 1,400 | ||
Number of participants that accepted a lump sum payout | item | 427 | 427 | ||
Settlement distribution | $ 14,300 | |||
Settlement loss on defined benefit lump sum payments | 0 | |||
Change in Benefit Obligation | ||||
Benefit obligation at beginning of year | $ 626,056 | 669,225 | ||
Service cost | 4,215 | 4,723 | $ 9,886 | |
Interest cost | 28,237 | 27,610 | 28,847 | |
Actuarial loss (gain) | (2,583) | (41,465) | ||
Benefits paid | (53,499) | (34,037) | ||
Settlement distribution | 14,300 | |||
Benefit obligation at end of year | 602,426 | 602,426 | 626,056 | 669,225 |
Change in Plan Assets | ||||
Fair value of plan assets at beginning of year | 593,125 | 647,515 | ||
Actual return on plan assets | 34,730 | (21,460) | ||
Employer contributions | 1,107 | |||
Benefits paid | (53,499) | (34,037) | ||
Fair value of plan assets at end of year | 574,356 | 574,356 | 593,125 | 647,515 |
Funded status and amounts recognized in consolidated balance sheets | ||||
Funded Status at End of Year | (28,070) | (28,070) | (32,931) | |
Amounts Recognized in Consolidated Balance Sheets: | ||||
Pension and postretirement benefits | (28,070) | (28,070) | (32,931) | |
Net amount recognized | (28,070) | (28,070) | (32,931) | |
Amounts Recognized in Accumulated Other Comprehensive Income / (Loss) - (Pre-tax) | ||||
Total net actuarial (gain) loss | 101,193 | 101,193 | 105,835 | |
Prior service cost | 21 | 21 | 117 | |
Total | $ 101,214 | $ 101,214 | $ 105,952 | |
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) | 4.50% | 4.50% | 4.66% | |
Components of pension benefit and other postretirement benefit costs | ||||
Service cost | $ 4,215 | $ 4,723 | 9,886 | |
Interest cost on projected benefit obligations | 28,237 | 27,610 | 28,847 | |
Expected return on plan assets | (37,327) | (41,082) | (44,143) | |
Amortization of prior service cost | 95 | 275 | 403 | |
Amortization of net loss | 4,657 | 1,934 | ||
Net pension cost (benefit) | $ (123) | $ (6,540) | $ (5,007) | |
Weighted-average actuarial assumptions used to determine net expense | ||||
Discount rate (as a percent) | 4.66% | 4.24% | 5.11% | |
Long-term rate of return on plan assets (as a percent) | 6.50% | 6.50% | 6.98% | |
Changes in plan assets and benefit obligations recognized in accumulated other comprehensive (income) loss | ||||
Net actuarial (gain) loss | $ 15 | $ 21,078 | ||
Amortization of prior service (cost) benefit | (95) | (276) | ||
Amortization of net gain (loss) | (4,657) | (1,934) | ||
Net amount recognized before tax | (4,737) | 18,868 | ||
Amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net expense | ||||
Prior service cost (benefit) | 14 | |||
Net actuarial loss (gain) | 4,789 | |||
Other Benefits | ||||
Change in Benefit Obligation | ||||
Benefit obligation at beginning of year | 9,418 | 13,700 | ||
Service cost | 28 | 33 | $ 34 | |
Interest cost | 332 | 428 | 627 | |
Actuarial loss (gain) | (818) | (121) | ||
Participant contributions | 526 | 625 | ||
Benefits paid | (1,971) | (3,251) | ||
Plan amendment | (1,996) | |||
Benefit obligation at end of year | $ 7,515 | 7,515 | 9,418 | 13,700 |
Change in Plan Assets | ||||
Employer contributions | 1,445 | 2,626 | ||
Participant contributions | 526 | 625 | ||
Benefits paid | (1,971) | (3,251) | ||
Funded status and amounts recognized in consolidated balance sheets | ||||
Funded Status at End of Year | (7,515) | (7,515) | (9,418) | |
Amounts Recognized in Consolidated Balance Sheets: | ||||
Accrued expenses | (1,378) | (1,378) | (1,839) | |
Pension and postretirement benefits | (6,137) | (6,137) | (7,579) | |
Net amount recognized | (7,515) | (7,515) | (9,418) | |
Amounts Recognized in Accumulated Other Comprehensive Income / (Loss) - (Pre-tax) | ||||
Total net actuarial (gain) loss | (3,208) | (3,208) | (3,202) | |
Prior service cost | (2,079) | (2,079) | (2,841) | |
Total | $ (5,287) | $ (5,287) | $ (6,043) | |
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) | 4.20% | 4.20% | 4.12% | |
Components of pension benefit and other postretirement benefit costs | ||||
Service cost | $ 28 | $ 33 | 34 | |
Interest cost on projected benefit obligations | 332 | 428 | 627 | |
Amortization of prior service cost | (762) | (242) | (200) | |
Amortization of net loss | (812) | (1,126) | (11) | |
Net pension cost (benefit) | $ (1,214) | $ (907) | $ 450 | |
Weighted-average actuarial assumptions used to determine net expense | ||||
Discount rate (as a percent) | 4.12% | 3.78% | 4.83% | |
Changes in plan assets and benefit obligations recognized in accumulated other comprehensive (income) loss | ||||
Net actuarial (gain) loss | $ (818) | $ (121) | ||
Amortization of prior service (cost) benefit | 762 | (1,754) | ||
Amortization of net gain (loss) | 812 | 1,126 | ||
Net amount recognized before tax | 756 | $ (749) | ||
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) | (722) | |||
Other Benefits | Longview | ||||
Change in Plan Assets | ||||
Fair value of plan assets at end of year | $ 0 | $ 0 |
Pension and Postretirement Be64
Pension and Postretirement Benefits - Fair Value of Plan Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Pension and Postretirement Benefits | ||
Fair value of plan assets | $ 574,356 | $ 593,125 |
Cash and Cash Equivalents, Equity Securities, Fixed Income | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 477,202 | 497,941 |
Cash and Cash Equivalents, Equity Securities, Fixed Income | Level 1 | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 87,937 | 89,194 |
Cash and Cash Equivalents, Equity Securities, Fixed Income | Level 2 | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 375,922 | 391,699 |
Cash and Cash Equivalents, Equity Securities, Fixed Income | Level 3 | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 13,343 | 17,048 |
Cash and cash equivalents | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 16,973 | 9,190 |
Cash and cash equivalents | Level 1 | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 16,973 | 9,190 |
Common Stock, net of Treasury Stock | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 12,869 | 9,885 |
Common Stock, net of Treasury Stock | Level 1 | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 12,869 | 9,885 |
Domestic equity mutual funds | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 9,556 | 9,531 |
Domestic equity mutual funds | Level 1 | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 9,556 | 9,531 |
International equity mutual funds | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 48,539 | 49,711 |
International equity mutual funds | Level 1 | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 48,539 | 49,711 |
U.S. large cap collective funds | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 96,518 | 109,947 |
U.S. large cap collective funds | Level 2 | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 96,518 | 109,947 |
Bonds | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 10,877 | |
Bonds | Level 1 | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 10,877 | |
Short-term | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 7,719 | 6,876 |
Short-term | Level 2 | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 7,719 | 6,876 |
Mid-term | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 23,314 | 31,661 |
Mid-term | Level 2 | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 23,314 | 31,661 |
Long-term | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 170,208 | 157,527 |
Long-term | Level 2 | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 170,208 | 157,527 |
Short-term | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 4,176 | 1,989 |
Short-term | Level 2 | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 4,176 | 1,989 |
Mid-term | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 30,922 | 2,544 |
Mid-term | Level 2 | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 30,922 | 2,544 |
Long-term | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 43,065 | 81,155 |
Long-term | Level 2 | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 43,065 | 81,155 |
Limited partnership investments | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 13,343 | 17,048 |
Limited partnership investments | Level 3 | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 13,343 | 17,048 |
Fixed income funds | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | 34,897 | 34,218 |
Equity funds | ||
Pension and Postretirement Benefits | ||
Fair value of plan assets | $ 62,257 | $ 60,966 |
Pension and Postretirement Be65
Pension and Postretirement Benefits - Level Three Assets (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Purchases, issuances, sales, and settlements: | |
Percentage gate in any given quarter of 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 | $ 17,048 |
Total gains or (losses): | |
Included in changes in net assets | 1,068 |
Purchases, issuances, sales, and settlements: | |
Purchases | 405 |
Sales | (5,178) |
Balance, end of year | 13,343 |
Total gains or losses included in changes in net assets attributed to change in unrealized gains or losses relating to assets | $ 66 |
Pension and Postretirement Be66
Pension and Postretirement Benefits - Allocations (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Pension and Postretirement Benefits | ||
Weighted-average asset allocations (as a percent) | 100.00% | 100.00% |
Target Allocation (as a percent) | 100.00% | |
Fixed income: | ||
Pension and Postretirement Benefits | ||
Weighted-average asset allocations (as a percent) | 55.00% | 55.00% |
Target Allocation (as a percent) | 53.00% | |
Equity securities: | ||
Pension and Postretirement Benefits | ||
Weighted-average asset allocations (as a percent) | 40.00% | 40.00% |
Target Allocation (as a percent) | 47.00% | |
Cash and cash equivalents | ||
Pension and Postretirement Benefits | ||
Weighted-average asset allocations (as a percent) | 3.00% | 2.00% |
Other securities | ||
Pension and Postretirement Benefits | ||
Weighted-average asset allocations (as a percent) | 2.00% | 3.00% |
Pension and Postretirement Be67
Pension and Postretirement Benefits - Estimated Future Gross Benefit Payments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Other Benefits | |
Estimated future gross benefit payments | |
2,017 | $ 1,407 |
2,018 | 1,129 |
2,019 | 972 |
2,020 | 840 |
2,021 | 587 |
Succeeding 5 years | 1,862 |
Pension Benefits | |
Estimated future gross benefit payments | |
2,017 | 39,123 |
2,018 | 38,725 |
2,019 | 39,328 |
2,020 | 39,401 |
2,021 | 39,938 |
Succeeding 5 years | $ 202,669 |
Pension and Postretirement Be68
Pension and Postretirement Benefits - Postretirement Benefits Other Than Pensions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Pension and Postretirement Benefits | ||
Acquired asset | $ 574,356 | $ 593,125 |
Longview | Other Benefits | ||
Pension and Postretirement Benefits | ||
Age of employees until which individual benefits will continue | 65 years | |
Acquired asset | $ 0 |
Pension and Postretirement Be69
Pension and Postretirement Benefits - Multiemployer Pension Plan (Details) - GCIU-Employer Retirement Fund $ in Millions | 12 Months Ended | |
Dec. 31, 2016USD ($)employeePlant | Dec. 31, 2015 | |
Multiemployer Pension Plan | ||
Number of hourly employees covered by the plan | employee | 300 | |
Number of plants with hourly employees covered by plan | Plant | 4 | |
Estimated withdrawal liability | $ 6.4 | |
Annual contributions by the Company | $ 0.4 | |
Number of years employer contributed to the plan | 20 years | |
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate | 3.60% | |
Maximum | ||
Multiemployer Pension Plan | ||
Contributions (as a percent) | 5.30% |
Pension and Postretirement Be70
Pension and Postretirement Benefits - Defined Contribution Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Pension and Postretirement Benefits | |||
Defined contribution plan expense recognized | $ 9.2 | $ 22.3 | $ 15.1 |
Decrease in contributions due to suspension of matching contributions | 13.8 | ||
Increase in contributions due to inclusion of Victory under the Contribution Plans | $ 0.7 |
Income taxes - Provision (Benef
Income taxes - Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income before provision for income taxes: | |||
United States | $ 125,540 | $ 159,790 | $ 260,601 |
Foreign | 2,642 | 1,844 | |
Income before provision for income taxes | 128,182 | 161,634 | 260,601 |
Current: | |||
US Federal | 49,131 | 40,324 | 78,105 |
State and local | 6,002 | 3,116 | 8,126 |
Foreign | 1,237 | 766 | |
Total current | 56,370 | 44,206 | 86,231 |
Deferred: | |||
US federal | (14,841) | 10,990 | 826 |
State and local | 401 | 52 | 1,629 |
Total deferred | (14,440) | 11,042 | 2,455 |
Total United States | 40,693 | 54,482 | 88,686 |
Foreign | 1,237 | 766 | |
Total provision for income taxes | 41,930 | 55,248 | 88,686 |
Income taxes paid, net of refunds | $ 23,800 | $ 65,500 | $ 77,500 |
Effective Income Tax Rate Reconciliation, Percent | 32.70% | 34.20% | 34.00% |
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, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
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) | 2.00% | 2.30% | 2.10% |
Domestic manufacturing deduction (as a percent) | (3.60%) | (2.90%) | (3.00%) |
Other (as a percent) | (0.70%) | (0.20%) | (0.10%) |
Effective income tax rate | 32.70% | 34.20% | 34.00% |
Income taxes - Deferred Tax Ass
Income taxes - Deferred Tax Assets and Liabilities Due to Temporary Differences (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets resulting from: | ||
Accrued compensation costs | $ 8,200 | $ 6,631 |
Pension and postretirement benefits | 16,010 | 16,036 |
Stock based compensation | 10,433 | 9,637 |
State net operating loss carry-forwards | 2,819 | 2,354 |
Other | 5,519 | 5,690 |
Total deferred tax assets | 42,981 | 40,348 |
Net deferred tax assets | 42,981 | 40,348 |
Deferred tax liabilities resulting from: | ||
Depreciable assets | (398,921) | (409,837) |
Intangible assets | (40,810) | (38,974) |
Goodwill | (8,811) | (10,016) |
Total deferred tax liabilities | (448,542) | (458,827) |
Net deferred tax liabilities | $ (405,561) | $ (418,479) |
Income taxes - Operating Loss C
Income taxes - Operating Loss Carry-forward (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Operating loss carry-forward | ||
Unrecognized tax benefits | $ 0.5 | $ 0.5 |
State | ||
Operating loss carry-forward | ||
Net operating loss carry-forward | 10.5 | |
Tax credits | $ 3.5 |
Stockholder's equity (Details)
Stockholder's equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 12, 2017 | Oct. 27, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2010 |
Cash Dividends | ||||||
Cash dividends paid | $ 38,736 | $ 38,729 | $ 223 | |||
Dividends declared per common share | $ 0.10 | $ 0.40 | $ 0.40 | $ 0.10 | ||
Dividends paid per common share (in dollars per share) | $ 0.10 | |||||
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) | 8,000,000 | |||||
Common Stock, net of Treasury Stock | Stock awards | ||||||
Stockholder's equity | ||||||
Share reserved for issuance | 7,200,000 | |||||
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 | 62,636 | 34,413 | ||||
Share reserved for issuance | 800,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - shares | 8 Months Ended | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | May 11, 2016 | |
2016 Incentive Plan | |||||
Stock-based compensation | |||||
Number of shares authorized by shareholders | 9,100,000 | ||||
Number of shares reserved for grant | 7,200,000 | 7,200,000 | |||
Stock Options | |||||
Stock-based compensation | |||||
Contractual term | 10 years | 10 years | 10 years | ||
Stock Options | 2016 Incentive Plan | |||||
Stock-based compensation | |||||
Contractual term | 10 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock-based compensation | |||
Stock-based compensation expense | $ 8,938 | $ 9,835 | $ 6,956 |
Stock Options | |||
Stock-based compensation | |||
Stock-based compensation expense | 4,564 | 4,938 | 3,595 |
Restricted Stock Units | |||
Stock-based compensation | |||
Stock-based compensation expense | $ 4,374 | $ 4,897 | $ 3,361 |
Stock-Based Compensation - Unre
Stock-Based Compensation - Unrecognized Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Unrecognized stock-based compensation expense | |||
Unrecognized stock option compensation expense | $ 3,849 | $ 4,217 | |
Unrecognized restricted stock unit compensation expense | 4,899 | 5,094 | |
Total unrecognized stock-based compensation expense | 8,748 | 9,311 | |
Excess tax benefit from stock-based compensation | $ 1,649 | $ 2,649 | |
Excess tax deficiency from stock-based compensation | $ 207 | ||
Stock Options | |||
Unrecognized stock-based compensation expense | |||
Weighted average period of recognition | 1 year 10 months 24 days | ||
Restricted Stock Units | |||
Unrecognized stock-based compensation expense | |||
Weighted average period of recognition | 1 year 9 months 18 days |
Stock-Based Compensation - St79
Stock-Based Compensation - Stock Options (Details) - Stock Options - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock Options | |||
Option grants (in shares) | 1,265,046 | 668,362 | 454,161 |
Contractual term | 10 years | 10 years | 10 years |
Awards that vest after two years | |||
Stock Options | |||
Percentage of granted awards that will vest | 50.00% | ||
Vesting period for awards | 2 years | ||
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, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Additional information | |||
Cash proceeds from exercises of options | $ 900 | $ 900 | $ 900 |
Stock Options | |||
Options | |||
Outstanding at the beginning of the period (in shares) | 3,265,900 | 2,759,306 | 2,514,382 |
Granted (in shares) | 1,265,046 | 668,362 | 454,161 |
Exercised (in shares) | (121,146) | (108,952) | (183,130) |
Lapsed (forfeited or cancelled) (in shares) | (116,719) | (52,816) | (26,107) |
Outstanding at the end of the period (in shares) | 4,293,081 | 3,265,900 | 2,759,306 |
Exercisable at the end of the period (in shares) | 2,306,653 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 15.45 | $ 11.81 | $ 8.05 |
Granted (in dollars per share) | 12.78 | 30.24 | 30.42 |
Exercised (in dollars per share) | 10.06 | 10.35 | 5.74 |
Lapsed (forfeited or cancelled) (in dollars per share) | 22.70 | 23.03 | 16.85 |
Outstanding at the end of the period (in dollars per share) | 14.61 | $ 15.45 | $ 11.81 |
Exercisable at the end of the period (in dollars per share) | $ 10.19 | ||
Weighted Average Remaining Life (Years) | |||
Exercisable at the end of the period | 4 years 6 months | ||
Outstanding at the end of the period | 6 years 6 months | ||
Intrinsic Value | |||
Intrinsic Value (dollars in thousands) | $ 40,376 | ||
Exercisable at the end of the period | 29,278 | ||
Additional information | |||
Intrinsic value of options exercised | $ 800 | $ 2,000 | $ 4,500 |
Weighted average fair value (in dollars per share) | $ 3.82 | $ 9.45 | $ 10.39 |
Total grant-date fair value of stock options granted | $ 4,800 | $ 6,300 | $ 4,700 |
Stock-Based Compensation - KapS
Stock-Based Compensation - KapStone Stock Options Black-Scholes Assumptions (Details) - Stock Options | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock Options Black-Scholes assumptions (weighted average): | |||
Expected volatility (as a percent) | 43.63% | 38.73% | 39.92% |
Expected life | 5 years 26 days | 4 years 11 months 1 day | 4 years 3 months 26 days |
Risk-free interest rate (as a percent) | 1.35% | 1.36% | 1.35% |
Expected dividend yield | 1.81% | 1.55% | 0.00% |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock (Details) - Restricted Stock Units - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock-based compensation | |||
Vesting period for awards | 3 years | ||
Units | |||
Outstanding at the beginning of the period (in shares) | 550,009 | 588,067 | 687,368 |
Granted (in shares) | 393,389 | 214,051 | 161,418 |
Vested (in shares) | (215,243) | (228,825) | (248,293) |
Forfeited (in shares) | (36,435) | (23,284) | (12,426) |
Outstanding at the end of the period (in shares) | 691,720 | 550,009 | 588,067 |
Weighted Average Grant Date Fair Value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 24.60 | $ 16.98 | $ 10.91 |
Granted (in dollars per share) | 12.79 | 30.41 | 30.44 |
Vested (in dollars per share) | 15 | 10.94 | 9 |
Forfeited (in dollars per share) | 23.16 | 20.43 | 15.25 |
Outstanding at the end of the period (in dollars per share) | $ 20.93 | $ 24.60 | $ 16.98 |
Additional disclosures | |||
Fair value of awards granted | $ 5 | $ 6.5 | $ 4.9 |
Fair value of awards vested | $ 3.2 | $ 2.5 | $ 2.2 |
Commitments and Contingencies83
Commitments and Contingencies (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | |
Commitments and contingencies | |||
Commercial commitments | $ 16,600 | $ 17,100 | |
Operating Leases | |||
Number of corrugated manufacturing plants leased | item | 13 | ||
Number of distribution centers | item | 60 | ||
Future minimum rental payments due under non-cancellable operating leases | |||
2,017 | $ 45,750 | ||
2,018 | 40,711 | ||
2,019 | 35,087 | ||
2,020 | 30,768 | ||
2,021 | 24,075 | ||
Thereafter | 105,006 | ||
Total | 281,397 | ||
Rental expense under operating lease | 49,100 | $ 36,000 | $ 16,900 |
Number of distribution and fulfillment centers | item | 60 | ||
Letter of credit sub-facility | |||
Commitments and contingencies | |||
Amount drawn under letters of credit | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Purchase Obligation (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Apr. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Purchase Obligation | |||||
Term of purchase commitment | 10 years | 20 years | 15 years | ||
Annual purchase obligation | $ 13 | ||||
Materials purchased | $ 35.2 | $ 39.1 | $ 40 | ||
Pine Pulpwood | |||||
Purchase Obligation | |||||
Percentage of material requirement | 25.00% | ||||
Saw Timber | |||||
Purchase Obligation | |||||
Percentage of material requirement | 60.00% | ||||
Natural Gas | |||||
Purchase Obligation | |||||
Materials purchased | $ 21.7 |
Commitments and Contingencies85
Commitments and Contingencies - Longview Union Contract Status and Work Stoppage (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($)employee | |
Commitments and contingencies | |
Unfunded commitments to contribute capital to limited partnerships | $ | $ 3.1 |
Number of employees | 6,400 |
Collective bargaining agreement | |
Commitments and contingencies | |
Number of employees | 2,400 |
Multiemployer Plans, Collective-Bargaining Arrangement, Percentage of Employer's Participants | 38.00% |
Collective bargaining agreement expired mid-2016 | |
Commitments and contingencies | |
Number of employees | 860 |
Multiemployer Plans, Collective-Bargaining Arrangement, Percentage of Employer's Participants | 36.00% |
Commitments and Contingencies86
Commitments and Contingencies - Contingent Consideration (Details) - USD ($) $ in Millions | 1 Months Ended | |||
Nov. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 01, 2015 | |
Maximum | ||||
Contingent consideration | ||||
Total potential payout | $ 25 | |||
Victory | Maximum | ||||
Contingent consideration | ||||
Total potential payout | $ 25 | |||
Victory | Level 3 | ||||
Contingent consideration | ||||
Fair value of the obligation | $ 14.9 | $ 13.3 | ||
Longview | ||||
Contingent consideration | ||||
Total estimated remedy | $ 342 | |||
Discount rate (as a percent) | 2.30% |
Net income per share (Details)
Net income per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method | |||||||||||
Net income | $ 18,338 | $ 31,018 | $ 20,722 | $ 16,174 | $ 11,824 | $ 34,206 | $ 34,256 | $ 26,100 | $ 86,252 | $ 106,386 | $ 171,915 |
Weighted-average number of common shares for basic net income per share | 96,533,368 | 96,257,749 | 95,900,179 | ||||||||
Incremental effect of dilutive common stock equivalents: | |||||||||||
Unexercised stock options (in shares) | 915,488 | 1,096,085 | 1,207,903 | ||||||||
Unvested restricted stock awards (in shares) | 328,210 | 281,705 | 351,102 | ||||||||
Weighted-average number of shares for diluted net income per share | 97,777,066 | 97,635,539 | 97,459,184 | ||||||||
Net income per share - basic (in dollars per share) | $ 0.19 | $ 0.32 | $ 0.21 | $ 0.17 | $ 0.12 | $ 0.36 | $ 0.36 | $ 0.27 | $ 0.89 | $ 1.11 | $ 1.79 |
Net income per share - diluted (in dollars per share) | $ 0.19 | $ 0.32 | $ 0.21 | $ 0.17 | $ 0.12 | $ 0.35 | $ 0.35 | $ 0.27 | $ 0.88 | $ 1.09 | $ 1.76 |
Weighted average | |||||||||||
Incremental effect of dilutive common stock equivalents: | |||||||||||
Anti-dilutive unexercised stock options (in shares) | 1,107,999 | 972,801 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Segment information | |||||||||||
Number of distribution centers | item | 60 | ||||||||||
Net Sales | $ 777,495 | $ 776,636 | $ 784,911 | $ 738,215 | $ 764,238 | $ 807,563 | $ 671,255 | $ 546,289 | $ 3,077,257 | $ 2,789,345 | $ 2,300,920 |
Operating Income (Loss) | 37,525 | $ 55,008 | $ 43,513 | $ 34,600 | 28,813 | $ 61,596 | $ 61,409 | $ 47,349 | 170,646 | 199,167 | 299,931 |
Depreciation and Amortization | 182,213 | 162,179 | 136,548 | ||||||||
Capital Expenditures | 126,865 | 126,756 | 137,232 | ||||||||
Assets | 3,255,875 | 3,222,110 | 3,255,875 | 3,222,110 | |||||||
Income from equity method investments excluded from income | 548 | ||||||||||
Operating Segment | |||||||||||
Segment information | |||||||||||
Net Sales | 3,077,257 | 2,789,345 | 2,300,920 | ||||||||
Operating Income (Loss) | 170,646 | 199,167 | 299,931 | ||||||||
Depreciation and Amortization | 182,213 | 162,179 | 136,548 | ||||||||
Capital Expenditures | 126,865 | 126,756 | 137,232 | ||||||||
Assets | 3,255,875 | 3,222,110 | 3,255,875 | 3,222,110 | 2,556,274 | ||||||
Intersegment | |||||||||||
Segment information | |||||||||||
Net Sales | (72,089) | (22,280) | |||||||||
Paper and Packaging | |||||||||||
Segment information | |||||||||||
Net Sales | 2,127,220 | 2,206,396 | 2,300,920 | ||||||||
Paper and Packaging | Operating Segment | |||||||||||
Segment information | |||||||||||
Net Sales | 2,199,309 | 2,228,676 | 2,300,920 | ||||||||
Operating Income (Loss) | 181,157 | 224,012 | 334,753 | ||||||||
Depreciation and Amortization | 151,506 | 145,363 | 133,302 | ||||||||
Capital Expenditures | 116,022 | 108,599 | 128,593 | ||||||||
Assets | 2,541,634 | 2,489,683 | 2,541,634 | 2,489,683 | 2,505,896 | ||||||
Paper and Packaging | Intersegment | |||||||||||
Segment information | |||||||||||
Net Sales | 72,089 | 22,280 | |||||||||
Distribution | |||||||||||
Segment information | |||||||||||
Net Sales | 950,037 | 582,949 | |||||||||
Distribution | Operating Segment | |||||||||||
Segment information | |||||||||||
Net Sales | 950,037 | 582,949 | |||||||||
Operating Income (Loss) | 29,296 | 20,719 | |||||||||
Depreciation and Amortization | 23,027 | 13,108 | |||||||||
Capital Expenditures | 4,349 | 3,190 | |||||||||
Assets | 658,208 | 675,204 | 658,208 | 675,204 | |||||||
Corporate | Operating Segment | |||||||||||
Segment information | |||||||||||
Operating Income (Loss) | (39,807) | (45,564) | (34,822) | ||||||||
Depreciation and Amortization | 7,680 | 3,708 | 3,246 | ||||||||
Capital Expenditures | 6,494 | 14,967 | 8,639 | ||||||||
Assets | $ 56,033 | $ 57,223 | 56,033 | 57,223 | 50,378 | ||||||
Containerboard / Corrugated Products | Paper and Packaging | |||||||||||
Segment information | |||||||||||
Net Sales | 1,348,250 | 1,399,522 | 1,463,670 | ||||||||
Income from equity method investments excluded from income | (500) | ||||||||||
Containerboard / Corrugated Products | Paper and Packaging | Operating Segment | |||||||||||
Segment information | |||||||||||
Net Sales | 1,420,339 | 1,421,802 | 1,463,670 | ||||||||
Containerboard / Corrugated Products | Paper and Packaging | Intersegment | |||||||||||
Segment information | |||||||||||
Net Sales | 72,089 | 22,280 | |||||||||
Specialty paper | Paper and Packaging | |||||||||||
Segment information | |||||||||||
Net Sales | 692,043 | 720,588 | 741,601 | ||||||||
Specialty paper | Paper and Packaging | Operating Segment | |||||||||||
Segment information | |||||||||||
Net Sales | 692,043 | 720,588 | 741,601 | ||||||||
Other Products | Paper and Packaging | |||||||||||
Segment information | |||||||||||
Net Sales | 86,927 | 86,286 | 95,649 | ||||||||
Other Products | Paper and Packaging | Operating Segment | |||||||||||
Segment information | |||||||||||
Net Sales | 86,927 | 86,286 | 95,649 | ||||||||
US based customers | |||||||||||
Segment information | |||||||||||
Net Sales | 2,540,592 | 2,300,806 | 1,847,531 | ||||||||
Foreign based customers | |||||||||||
Segment information | |||||||||||
Net Sales | 536,665 | $ 488,539 | $ 453,389 | ||||||||
Victory | |||||||||||
Segment information | |||||||||||
Capital Expenditures | $ 10,700 |
Quarterly Financial Informati89
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net sales | $ 777,495 | $ 776,636 | $ 784,911 | $ 738,215 | $ 764,238 | $ 807,563 | $ 671,255 | $ 546,289 | $ 3,077,257 | $ 2,789,345 | $ 2,300,920 |
Gross profit | 95,621 | 111,121 | 99,067 | 95,340 | 89,405 | 125,173 | 109,890 | 85,543 | |||
Operating income | 37,525 | 55,008 | 43,513 | 34,600 | 28,813 | 61,596 | 61,409 | 47,349 | 170,646 | 199,167 | 299,931 |
Net income | $ 18,338 | $ 31,018 | $ 20,722 | $ 16,174 | $ 11,824 | $ 34,206 | $ 34,256 | $ 26,100 | $ 86,252 | $ 106,386 | $ 171,915 |
Net income per share: | |||||||||||
Basic (in dollars per share) | $ 0.19 | $ 0.32 | $ 0.21 | $ 0.17 | $ 0.12 | $ 0.36 | $ 0.36 | $ 0.27 | $ 0.89 | $ 1.11 | $ 1.79 |
Diluted (in dollars per share) | $ 0.19 | $ 0.32 | $ 0.21 | $ 0.17 | $ 0.12 | $ 0.35 | $ 0.35 | $ 0.27 | $ 0.88 | $ 1.09 | $ 1.76 |
Planned maintenance outages | $ 3,200 | $ 3,800 | $ 19,000 | $ 6,600 | $ 13,300 | $ 4,400 | $ 11,100 | $ 8,600 | |||
Loss on debt extinguishment | $ 600 | 600 | $ 679 | $ 1,218 | $ 5,617 | ||||||
GCIU-Employer Retirement Fund | |||||||||||
Net income per share: | |||||||||||
Estimated withdrawal liability | 6,400 | $ 6,400 | |||||||||
Longview mill work stoppage | |||||||||||
Gross profit | $ (15,100) | ||||||||||
Hurricane Matthew | |||||||||||
Gross profit | $ (6,400) |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Feb. 01, 2017USD ($) |
Subsequent Event | API and Fast Pak, LLC | |
Subsequent Events | |
Assets acquired | $ 33.5 |