Kapstone Paper & Packaging (KS) 10-Q 28 Oct 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 22, 2015
Document and Entity Information
Entity Registrant Name	KAPSTONE PAPER & PACKAGING CORP
Entity Central Index Key	1,325,281
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		96,314,983
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 7,767	$ 28,467
Trade accounts receivable (Includes $379,683 at September 30, 2015, and $225,577 at December 31, 2014, associated with the securitization facility)	395,549	228,740
Other receivables	18,694	12,833
Inventories	334,256	238,329
Prepaid expenses and other current assets	18,152	7,172
Total current assets	774,418	515,541
Plant, property and equipment, net	1,406,446	1,386,670
Other assets	13,209	10,135
Intangible assets, net	351,270	110,077
Goodwill	704,592	533,851
Total assets	3,249,935	2,556,274
Current liabilities:
Short-term borrowings	2,000
Other current borrowings	2,214
Dividend payable	9,828	9,911
Accounts payable	191,213	149,600
Accrued expenses	64,432	48,340
Accrued compensation costs	72,181	62,491
Accrued income taxes		6,477
Deferred income taxes	1,396	1,990
Total current liabilities	343,264	278,809
Other liabilities:
Long-term debt, net of current portion (Includes $261,512 at September 30, 2015, and $167,000 at December 31, 2014, associated with the securitization facility)	1,589,670	1,046,063
Pension and postretirement benefits	23,444	32,800
Deferred income taxes	420,446	412,293
Other liabilities	20,025	8,182
Total other liabilities	$ 2,053,585	$ 1,499,338
Commitments and contingencies
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; 96,314,983 shares issued and outstanding (excluding 40,000 treasury shares) at September 30, 2015 and 96,046,554 shares issued and outstanding (excluding 40,000 treasury shares) at December 31, 2014	$ 10	$ 10
Additional paid-in-capital	264,306	255,505
Retained earnings	640,149	574,601
Accumulated other comprehensive loss	(51,379)	(51,989)
Total stockholders' equity	853,086	778,127
Total liabilities and stockholders' equity	$ 3,249,935	$ 2,556,274

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
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	96,314,983	96,046,554
Common stock, shares outstanding	96,314,983	96,046,554
Treasury shares, shares outstanding	40,000	40,000
Receivables Credit Facility
Trade receivables with securitization facility	$ 379,683	$ 225,577
Long term debt portion associated with securitization facility	$ 261,512	$ 167,000

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Consolidated Statements of Comprehensive Income
Net sales	$ 807,563	$ 598,106	$ 2,025,107	$ 1,737,507
Cost of sales, excluding depreciation and amortization	569,267	388,641	1,421,943	1,164,134
Depreciation and amortization	42,500	34,997	114,617	101,580
Freight and distribution expenses	70,623	46,173	167,941	131,829
Selling, general, and administrative expenses	63,577	34,133	150,252	102,371
Operating income	61,596	94,162	170,354	237,593
Foreign exchange loss	(766)	(960)	(1,704)	(859)
Loss on debt extinguishment	628	2,963	628	2,963
Interest expense, net	9,528	8,099	24,456	25,299
Income before provision for income taxes	50,674	82,140	143,566	208,472
Provision for income taxes	16,468	27,886	49,004	70,660
Net income	34,206	54,254	94,562	137,812
Pension and postretirement plan reclassification adjustments:
Amortization of prior service costs	12	31	36	93
Amortization of net (gain) / loss	192	(2)	574	(5)
Other comprehensive income, net of tax	204	29	610	88
Total comprehensive income	$ 34,410	$ 54,283	$ 95,172	$ 137,900
Weighted average number of shares outstanding:
Basic (in shares)	96,310,998	95,958,877	96,235,404	95,857,079
Diluted (in shares)	97,629,641	97,515,901	97,631,247	97,416,869
Net income per share:
Basic (in dollars per share)	$ 0.36	$ 0.57	$ 0.98	$ 1.44
Diluted (in dollars per share)	0.35	$ 0.56	0.97	$ 1.41
Dividends declared per common share	$ 0.10		$ 0.30

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Operating activities
Net income	$ 94,562	$ 137,812
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	114,617	101,580
Stock-based compensation expense	8,122	5,630
Pension and postretirement	(8,379)	(9,939)
Excess tax benefit from stock-based compensation	(1,518)	(2,960)
Amortization of debt issuance costs	4,364	4,415
Loss on debt extinguishment	628	2,963
Loss on disposal of fixed assets	5	1,203
Deferred income taxes	6,441	(1,059)
Changes in assets and liabilities:
Trade accounts receivable, net	(27,022)	(24,269)
Other receivables	2,744	999
Inventories	(5,639)	(17,222)
Prepaid expenses and other current assets	(2,595)	(2,462)
Other assets	(153)	(716)
Accounts payable	(11,005)	(3,510)
Accrued expenses and other liabilities	8,398	9,227
Accrued compensation costs	912	4,057
Accrued income taxes	(7,834)	300
Net cash provided by operating activities	176,648	206,049
Investing activities
Victory acquisition, net of cash acquired	(617,046)
Capital expenditures	(94,895)	(112,367)
Net cash used in investing activities	(711,941)	(112,367)
Financing activities
Proceeds from revolving credit facility	268,200	97,900
Repayments on revolving credit facility	(266,200)	(97,900)
Proceeds from receivables credit facility	112,961	175,000
Repayments on receivables credit facility	(18,449)
Proceeds from long-term debt	519,763
Repayments on long-term debt	(64,688)	(178,525)
Payment of loan amendment and debt issuance costs	(10,790)	(1,081)
Proceeds from other current borrowings	6,615	6,300
Repayments on other current borrowings	(4,401)	(5,138)
Cash dividend paid	(29,098)
Payment of withholding taxes on stock awards	(2,460)	(1,755)
Proceeds from exercises of stock options	778	639
Proceeds from shares issued to ESPP	844	600
Excess tax benefit from stock-based compensation	1,518	2,960
Net cash provided by financing activities	514,593	(1,000)
Net increase (decrease) in cash and cash equivalents	(20,700)	92,682
Cash and cash equivalents-beginning of period	28,467	12,967
Cash and cash equivalents-end of period	$ 7,767	$ 105,649

Financial Statements

Financial Statements	9 Months Ended
	Sep. 30, 2015
Financial Statements
Financial Statements	1. Financial Statements The accompanying unaudited consolidated financial statements of KapStone Paper and Packaging Corporation (the “Company,” “we,” “us,” “our” or “KapStone”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of a normal recurring nature) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. For further information, refer to the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2014. We report our operating results in two reportable segments: Paper and Packaging and Distribution. Our Paper and Packaging segment manufactures and sells a wide variety container board, corrugated products and specialty paper for industrial and consumer markets. The Distribution segment was established June 1, 2015 through the acquisition of Victory Packaging, L.P. and its subsidiaries (“Victory”), a North American distributor of packaging materials. See Note 3, Victory Packaging Acquisition, for further detail. For more information about our segments, see Note 12, Segment Information. In these consolidated financial statements, certain amounts in prior periods’ consolidated financial statements have been reclassified to conform with the current period presentation. In accordance with Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” we recast 2015 and 2014 segment information to conform with the current year presentation. For more information see Note 12, Segment Information. None of the reclassifications affected our results of operations, financial position, or cash flows.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	9 Months Ended
	Sep. 30, 2015
Recent Accounting Pronouncements
Recent Accounting Pronouncements	2. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB’) issued Accounting Standards Update (“ASU”) No. 2014-09 “Revenue from Contracts with Customers”. The guidance in this update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The guidance in this update supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition”, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, this update supersedes some cost guidance included in Subtopic 605-35, “Revenue Recognition—Construction-Type and Production-Type Contracts”. For a public entity, the amendments are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. In July 2015, the FASB approved a one-year deferral of the effective date for its new revenue standard for public and nonpublic entities reporting under GAAP. The standard will be effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods therein. Additionally the FASB approved the option to early adopt up to the original effective date (fiscal years beginning after December 15, 2016). We are currently evaluating the impact that the adoption of ASU 2014-09 will have on our financial condition, results of operations and disclosures. In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs”, which changes the presentation of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. It is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. The Company does not expect the adoption of this standard to have a material impact on its consolidated balance sheets. In August 2015, the FASB issued an ASU 2015-15, “Interest — Imputation of Interest” which relates to the presentation of debt issuance costs. This standard clarifies the guidance set forth in FASB ASU 2015-03, which required that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the debt liability rather than as an asset. The new pronouncement clarifies that debt issuance costs related to line-of-credit arrangements could continue to be presented as an asset and be subsequently amortized over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the arrangement. The Company does not expect the adoption of this standard to have a material impact on its consolidated balance sheets. In September 2015, the FASB issued ASU 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments”, which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The ASU is effective for public business entities for fiscal years beginning after 15 December 2015, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its financial condition, results of operations , or cash flows.

Victory Packaging Acquisition

Victory Packaging Acquisition	9 Months Ended
	Sep. 30, 2015
Victory Packaging Acquisition
Victory Packaging Acquisition	3. Victory Packaging Acquisition On June 1, 2015, the Company purchased all of the partnership interests in Victory Packaging, L.P. and its subsidiaries (“Victory”) for $615 million in cash and $2.0 million for working capital adjustments. $40.0 million of the purchase price 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 in cash 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 $11.7 million as of September 30, 2015, which included an increase of $1.2 million during the third quarter due to revised Company estimates. The contingent consideration is included in other non-current liabilities on the Company’s Consolidated Balance Sheets and its fair value is a categorized as Level 3 within the fair value hierarchy. This analysis considers, among other items, the financial forecasts of future operating results of Victory, the probability of reaching the forecast, and the associated discount rate. In the quarter ended September 30, 2015, the Company paid an additional $0.5 million related to post-closing working capital adjustments. The total acquisition consideration is $617.0 million, net of cash acquired (excluding any future contingent consideration that may be payable). The purchase price allocation is preliminary and subject to final review. Purchase price $ Working capital adjustments Cash paid $ Fair value of contingent consideration Total acquisition consideration $ The following table summarizes the preliminary allocation of the Victory acquisition consideration to the fair value of the assets acquired and liabilities assumed at the date of acquisition, as well as adjustments made during quarter ended September 30, 2015 (referred to as “measurement period adjustments”): Amounts Amounts Recognized at Mesurement Recognized as of Acquisition Period Acquisition Date Date (1) Adjustments (2) (as Adjusted) Trade accounts receivable $ $ ) $ Other receivables Inventories ) Prepaid expenses and other current assets Plant, property and equipment ) Other assets Intangible assets Accounts payable ) ) Accrued expenses ) ) ) Accrued compensation costs ) ) Other noncurrent liabilities ) ) Goodwill Total acquisition consideration $ $ $ (1) Preliminary allocation of Victory acquisition consideration to the fair value of the assets acquired and liabilities assumed at the date of acquisition. (2) The measurement period adjustments include the following:  Property, plant and equipment were adjusted downward by $0.8 million as accounting policies were aligned accross the Company.  Trade accounts receivable and inventory were adjusted by $0.4 million and $0.3 million, respectively, resulting from minor adjustment to management estimates.  Certain liability amounts have been reclassified to conform to current presentation. Transaction fees and expenses for the Victory acquisition related to due diligence, advisory and legal services have been expensed as incurred. These expenses were $1.9 million and $4.5 million, respectively, for the three and nine month periods ended September 30, 2015 and were recorded as selling, general and administrative expenses in the Consolidated Statements of Comprehensive Income. Since the June 1, 2015 acquisition date, the Company’s consolidated statement of comprehensive income for the nine months ended September 30, 2015 includes $341.5 million of net sales and $12.9 million of operating income from the Victory operations. The following unaudited pro forma consolidated results of operations assume that the acquisition of Victory occurred as of January 1, 2014. The unaudited pro forma consolidated results include the accounting effects of the business combination, including the application of the Company’s accounting policies, amortization of intangible assets and depreciation of equipment related to preliminary 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. Nine Months Ended September 30, (unaudited) 2015 2014 Net sales $ $ Net income $ $ Net income per share - diluted $ $

Planned Maintenance Outages

Planned Maintenance Outages	9 Months Ended
	Sep. 30, 2015
Planned Maintenance Outages
Planned Maintenance Outage	4. Planned Maintenance Outages Planned maintenance outage costs for the three months ended September 30, 2015 and 2014 totaled $4.4 million and $5.2 million, respectively, and are included in cost of sales. As a result of the 2015 outage, production tons were reduced by 2,400 tons. Planned maintenance outage costs for the nine months ended September 30, 2015 and 2014 totaled $24.1 million and $25.1 million, respectively. As a result of these outages, production tons were reduced by 14,800 tons and 19,700 tons, respectively. Outage costs for the nine months ended September 30, 2015 included an annual planned maintenance outage at the Company’s paper mill in Roanoke Rapids, North Carolina in April 2015. The outage lasted approximately 8 days with a cost of approximately $8.0 million and a 10,400 reduction in tons produced. In 2014, the Roanoke Rapids, North Carolina paper mill planned outage occurred in October over a similar number of days and at a similar cost.

Inventories

Inventories	9 Months Ended
	Sep. 30, 2015
Inventories
Inventories	5. Inventories Inventories consist of the following at September 30, 2015 and December 31, 2014, respectively: (unaudited) September 30, December 31, 2015 2014 Raw materials $ $ Work in process Finished goods Replacement parts and supplies Inventory at FIFO costs LIFO inventory reserves ) Inventories $ $ As of September 30, 2015, finished goods inventory included $81.2 million related to Victory.

Short-term Borrowings and Long-

Short-term Borrowings and Long-term Debt	9 Months Ended
	Sep. 30, 2015
Short-term Borrowings and Long-term Debt
Short-term Borrowings and Long-term Debt	6. Short-term Borrowings and Long-term Debt Long-term debt consists of the following at September 30, 2015 and December 31, 2014, respectively: (unaudited) September 30, December 31, 2015 2014 Term loan A-1 under Second Amended and Restated Credit Agreement with interest payable monthly at LIBOR plus 1.75% at September 30, 2015 $ $ Term loan A-2 under Second Amended and Restated Credit Agreement with interest payable monthly at LIBOR plus 1.875% at September 30, 2015 Receivable Credit Facility with interest payable monthly at LIBOR plus 0.75% at September 30, 2015 Total long-term debt Less unamortized debt issuance costs ) ) Long-term debt, net of current portion and debt issuance costs $ $ KapStone and certain of our subsidiaries are parties to a Second Amended and Restated Credit Agreement dated June 1, 2015 (the “Credit Agreement”), which provided for a senior secured credit facility (the “Credit Facility”) of $1.95 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”), which includes an accordion feature that provides for, subject to certain significant conditions, up to $600 million of additional commitments. Annual principal repayments under the Credit Facility, paid in quarterly installments, are as follows: Fiscal year ending: 2015 $ — 2016 2017 2018 2019 2020 2021 2022 Total $ In 2015, the Company incurred approximately $10.6 million of debt issuance costs associated with the Credit Agreement, which are being amortized using the effective interest method. In September 2015, the Company made a voluntary prepayment on its term loans under the Credit Facility of $51.8 million and as a result, $0.6 million of unamortized debt issuance costs were written-off as a loss on debt extinguishment. Short-term Borrowings As of September 30, 2015, the Company had $2.0 million of short-term borrowings with a base interest rate of 4.0 percent under the Revolver and $479.8 million available for additional borrowings. Receivables Credit Facility Under our Securitization Program, we sell, on an ongoing basis without recourse, certain trade receivables to KapStone Receivables, LLC (“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 September 30, 2015, $379.7 million of our receivables were sold to KAR. KAR in turn assigns a collateral interest in these receivables to a financial institution under a one-year facility (the “Receivables Credit Facility”) for proceeds of $261.5 million under a $275 million facility. The assets of KAR are not available to us until all obligations of KAR are satisfied in the event of bankruptcy or insolvency proceedings. In connection with the Victory acquisition, in June 2015 the Company amended its Securitization Program. The Company incurred approximately $0.2 million of debt issuance costs associated with the amendment, which is being amortized using the effective interest method. In 2014, we used proceeds from the Receivables Credit Facility to prepay $175.0 million of the term loans under our Credit Facility and, as a result, $3.0 million of unamortized debt issuance costs were written-off as a loss on debt extinguishment. 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 September 30, 2015, the Company was in compliance with all applicable covenants in the Credit Agreement. Fair Value of Debt As of September 30, 2015, the fair value of the Company’s debt approximates the carrying value of $1.6 billion as the variable interest rates re-price frequently at current market rates. The debt was valued using Level 2 inputs in the fair value hierarchy, which are significant observable inputs including quoted prices for debt of similar terms and maturities. Our weighted-average cost of borrowings was 1.82 percent and 2.00 percent for the nine months ended September 30, 2015 and September 30, 2014, respectively. Other Borrowing I n 2015 and 2014, the Company entered into short-term financing agreements of $6.6 million and $6.3 million, respectively, at an annual interest rate of 1.70 percent and 1.69 percent, respectively, for its annual property insurance premiums. The 2015 agreement requires the Company to pay three quarterly payments through the term of the financing agreement ending on December 31, 2015. As of September 30, 2015 and 2014, there was $2.2 million and $1.2 million, respectively, outstanding under these agreements which is included in “Other current borrowings” on the Consolidated Balance Sheets.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2015
Income Taxes
Income Taxes	7. Income Taxes The Company’s effective income tax rate for the three and nine months ended September 30, 2015 was 32.5 percent and 34.1 percent, respectively, compared to 33.9 percent for both the three and nine months ended September 30, 2014. Our tax rate is affected by recurring items such as state income taxes, as well as discrete items that may occur in any given period, but are not consistent from period to period. In addition to state income taxes, the domestic manufacturing deduction had the most significant impact on the difference between our statutory U.S. federal income tax rate of 35 percent and our effective income tax rate for both periods. The 2015 third quarter provision for income taxes includes a net $1.1 million favorable discrete adjustment, mainly due to tax legislation enacted during the quarter. The nine months ended September 30, 2015 includes $0.7 million in net favorable discrete adjustments, mainly relating to tax legislation and the Victory Packaging acquisition. The 2014 third quarter provision for income taxes includes a $0.5 million favorable discrete adjustment and the nine months ended September 30, 2014 includes $1.3 million of net favorable discrete adjustments from the resolution of tax audits, the effects from tax legislation and a favorable tax return filing adjustment. In the normal course of business, the Company is subject to examination by taxing authorities. The Company’s open federal tax years are 2013 and 2014. The Company has open tax years for state income tax filings generally starting in 2011.

Net Income per Share

Net Income per Share	9 Months Ended
	Sep. 30, 2015
Net Income per Share
Net Income per Share	8. Net Income per Share The Company’s basic and diluted net income per share is calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 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 $ $ $ $ Approximately 900,000 and 42,000 of unexercised stock options were outstanding at September 30, 2015 and 2014, respectively, but were not included in the computation of diluted earnings per share because the options were anti-dilutive.

Pension Plan and Post-Retiremen

Pension Plan and Post-Retirement Benefits	9 Months Ended
	Sep. 30, 2015
Pension Plan and Post-Retirement Benefits
Pension Plan and Post-Retirement Benefits	9. Pension Plan and Post-Retirement Benefits Defined Benefit Plan Net pension benefit recognized for the three and nine months ended September 30, 2015 and 2014 for the Company’s defined benefit plan (the “Pension Plan”) are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Service cost for benefits earned $ $ $ $ Interest cost on projected benefit obligations Expected return on plan assets ) ) ) ) Amortization of net loss — — Amortization of prior service cost Net pension benefit - Company plan ) ) ) ) Net pension cost - multi -employer plan Total net pension benefit $ ) $ ) $ ) $ ) KapStone funds the Pension Plan according to IRS funding requirements. Based on those requirements, KapStone funded $1.1 million for the nine months ended September 30, 2015. No additional funding is required for the balance of 2015. Defined Contribution Plan We offer a 401(k) Defined Contribution Plan (“Contribution Plan”) to eligible employees. The Company’s monthly contributions are based on the matching of certain employee contributions or based on a union negotiated formula. For the three months ended September 30, 2015 and 2014, the Company recognized expense of $5.5 million and $3.6 million, respectively, for the Company contributions to the Contribution Plan. For the nine months ended September 30, 2015 and 2014, the Company recognized expense of $15.5 million and $11.8 million, respectively, for the Company contributions to the Contribution Plan. The amounts for the three and nine month periods ended September 30, 2015 include $0.5 million and $0.8 million attributable to Victory, respectively. Effective in 2015, Longview Fibre Paper and Packaging, Inc. (“Longview”) salaried personnel received a 401(k) contribution, under the Contribution Plan, rather than a cash balance plan contribution which was included in net pension benefit for the three and nine months ended September 30, 2014.

Stock-Based Compensation

Stock-Based Compensation	9 Months Ended
	Sep. 30, 2015
Stock-Based Compensation
Stock-Based Compensation	10. Stock-Based Compensation In March, 2015, the Company’s compensation committee of the board of directors approved stock-based awards to executive officers, certain employees and directors. In total, 555,451 stock options and 181,590 restricted stock units were awarded. In May, 2015, the Company’s compensation committee of the board of directors approved new stock awards for certain employees. In total, 7,494 stock options and 2,346 restricted stock units were awarded. The Company accounts for stock-based 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 stock-based compensation expense related to the stock option and restricted stock unit grants for the three and nine months ended September 30, 2015 and 2014 is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 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 units as of September 30, 2015 and December 31, 2014 is as follows: September 30, December 31, 2015 2014 Unrecognized stock option compensation expense $ $ Unrecognized restricted stock unit compensation expense Total unrecognized stock-based compensation expense $ $ As of September 30, 2015, total unrecognized compensation cost related to non-vested stock options and restricted stock units is expected to be recognized over a weighted average period of 2.1 years. Stock Options Stock option awards vest as follows: 50% after two years and the remaining 50% upon the earlier of after three years or upon a grantee of such stock options attaining the age 65. The stock options awarded in 2015 have a contractual term of ten years and are subject to forfeiture should the recipient terminate his or her employment with the Company for certain reasons prior to vesting in his or her awards, or the occurrence of certain other events, such as termination with cause. The exercise price of these stock options is based on the closing market price of our common stock on the date of grant ($31.89 for March 2015 awards and $27.44 for May 2015 awards) and compensation expense is recorded on an accelerated basis over the awards’ vesting periods. The weighted average fair value of the stock options granted in May 2015, March 2015 and March 2014 was $8.59, $10.08 and $10.36, 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 term 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 our 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. The assumptions utilized for calculating the fair value of stock options during the period are as follows: Nine Months Ended September 30, 2015 2014 Stock Options Black-Scholes assumptions (weighted average): Expected volatility % % Expected life (years) Risk-free interest rate % % Expected dividend yield % — % The following table summarizes stock options amounts and activity: Weighted Weighted Intrinsic Average Average Value Exercise Remaining (dollars in Options Price Life (Years) thousands) Outstanding at January 1, 2015 $ $ Granted Exercised ) Forfeited ) Outstanding at September 30, 2015 $ $ Exercisable at September 30 2015 $ $ There were no options exercised in the three months ended September 30, 2015. For the nine months ended September 30, 2015, cash proceeds from the exercise of stock options totaled $0.8 million. For the three and nine months ended September 30, 2014, cash proceeds from the exercise of stock options totaled $0.2 million and $0.6 million, respectively. Restricted Stock Restricted stock units are restricted as to transferability until the earlier of their vesting three years from the grant date or a grantee of such restricted stock units attaining the age 65. These restricted stock units are subject to forfeiture should applicable 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 stock units is based on the closing market price of our 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 unvested restricted stock units amounts and activity: Weighted Average Grant Date Units Fair Value Outstanding at January 1, 2015 $ Granted Vested ) Forfeited ) Outstanding at September 30, 2015 $

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2015
Commitments and Contingencies
Commitments and Contingencies	11. Commitments and Contingencies Legal Claims We are from time to time subject to various administrative and legal investigations, claims and proceedings incidental to our business, including environmental and safety matters, labor and employments matters, personal injury claims, contractual 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 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. There have been no material changes in any of our legal proceedings since December 31, 2014. Environment Claim The Company’s subsidiary, Longview, is a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act 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 percent) for the selected remedy are $342 million. At least 40 potentially responsible parties, including Longview, have entered into an Allocation Agreement. Pursuant to the Allocation Agreement, the parties will attempt to determine each party’s portion of the cost to remediate the site. The allocation process in not expected to be completed until 2017. Based on available information provided to the Company to date, the Company cannot reasonably estimate its potential liability with respect to the site. Longview Union Contract Status and Work Stoppage The union contract covering approximately 760 employees at the Longview paper mill expired in June 2014. From July 2014 through early June 2015 the Company negotiated a new contract with the union, but could not agree on terms. On June 12, 2015, the union provided a “10 Day Notice,” which made it possible for union employees to go out on legal strike at any time after June 22, 2015. On August 27, 2015, KapStone received a notice of a work stoppage at the Longview mill from the union. The work stoppage lasted 12 days with a production loss of approximately 29,000 tons. During the 12 day work stoppage, the Company performed certain maintenance work and thereafter commenced operating certain paper machines prior to the union workers return to work. There has been no additional work stoppage since September 7, 2015. The Longview mill continues to operate without an agreement with the union.

Segment Information

Segment Information	9 Months Ended
	Sep. 30, 2015
Segment Information
Segment Information	12. Segment Information Prior to the acquisition of Victory on June 1, 2015, we manufactured and sold packaging products and reported the Company’s consolidated results as one reportable segment. In connection with the acquisition, we began reporting 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. 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, and its approximately 70 distribution centers located in the United States, Mexico and Canada, the Company provides packaging materials and related products to a wide variety of customers. Each segment’s profits and losses are measured on operating profits before foreign exchange gains / (losses), net interest expense and income taxes. Net Sales Depreciation Total assets Three Months Ended September 30, 2015 Trade Inter- segment Total Operating Income (Loss) and Amortization Capital Expenditures at September 30, 2015 Paper and Packaging (a) $ $ $ $ $ $ $ Distribution — Corporate — — — ) Intersegment eliminations — ) ) — — — — $ $ — $ $ $ $ $ Net Sales Depreciation Total assets Three Months Ended September 30, 2014 Trade Inter- segment Total Operating Income (Loss) and Amortization Capital Expenditures at September 30, 2014 Paper and Packaging $ $ — $ $ $ $ $ Distribution (a) — — — — — — — Corporate — — — ) Intersegment eliminations — — — — — — $ $ — $ $ $ $ $ Net Sales Depreciation Nine Months Ended September 30, 2015 Trade Inter- segment Total Operating Income (Loss) and Amortization Capital Expenditures Paper and Packaging $ $ $ $ $ $ Distribution (a) — Corporate — — — ) Intersegment eliminations — ) ) — — — $ $ — $ $ $ $ Net Sales Depreciation Nine Months Ended September 30, 2014 Trade Inter- segment Total Operating Income (Loss) and Amortization Capital Expenditures Paper and Packaging $ $ — $ $ $ $ Distribution (a) — — — — — — Corporate — — — ) Intersegment eliminations — — — — $ $ — $ $ $ $ (a) Results for the nine months September 30, 2015, include Victory for the period of June 1 through September 30, 2015 and is included in the Distribution segment.

Recent Accounting Pronounceme18

Recent Accounting Pronouncements (Policies)	9 Months Ended
	Sep. 30, 2015
Recent Accounting Pronouncements
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB’) issued Accounting Standards Update (“ASU”) No. 2014-09 “Revenue from Contracts with Customers”. The guidance in this update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The guidance in this update supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition”, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, this update supersedes some cost guidance included in Subtopic 605-35, “Revenue Recognition—Construction-Type and Production-Type Contracts”. For a public entity, the amendments are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. In July 2015, the FASB approved a one-year deferral of the effective date for its new revenue standard for public and nonpublic entities reporting under GAAP. The standard will be effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods therein. Additionally the FASB approved the option to early adopt up to the original effective date (fiscal years beginning after December 15, 2016). We are currently evaluating the impact that the adoption of ASU 2014-09 will have on our financial condition, results of operations and disclosures. In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs”, which changes the presentation of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. It is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. The Company does not expect the adoption of this standard to have a material impact on its consolidated balance sheets. In August 2015, the FASB issued an ASU 2015-15, “Interest — Imputation of Interest” which relates to the presentation of debt issuance costs. This standard clarifies the guidance set forth in FASB ASU 2015-03, which required that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the debt liability rather than as an asset. The new pronouncement clarifies that debt issuance costs related to line-of-credit arrangements could continue to be presented as an asset and be subsequently amortized over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the arrangement. The Company does not expect the adoption of this standard to have a material impact on its consolidated balance sheets. In September 2015, the FASB issued ASU 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments”, which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The ASU is effective for public business entities for fiscal years beginning after 15 December 2015, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its financial condition, results of operations, or cash flows.

Victory Packaging Acquisition (

Victory Packaging Acquisition (Tables)	9 Months Ended
	Sep. 30, 2015
Victory Packaging Acquisition
Summary of acquisition consideration	Purchase price $ Working capital adjustments Cash paid $ Fair value of contingent consideration Total acquisition consideration $
Summary of preliminary allocation of acquisition consideration to the fair value of assets acquired and liabilities assumed	Amounts Amounts Recognized at Mesurement Recognized as of Acquisition Period Acquisition Date Date (1) Adjustments (2) (as Adjusted) Trade accounts receivable $ $ ) $ Other receivables Inventories ) Prepaid expenses and other current assets Plant, property and equipment ) Other assets Intangible assets Accounts payable ) ) Accrued expenses ) ) ) Accrued compensation costs ) ) Other noncurrent liabilities ) ) Goodwill Total acquisition consideration $ $ $ (1) Preliminary allocation of Victory acquisition consideration to the fair value of the assets acquired and liabilities assumed at the date of acquisition. (2) The measurement period adjustments include the following:  Property, plant and equipment were adjusted downward by $0.8 million as accounting policies were aligned accross the Company.  Trade accounts receivable and inventory were adjusted by $0.4 million and $0.3 million, respectively, resulting from minor adjustment to management estimates.  Certain liability amounts have been reclassified to conform to current presentation.
Schedule of pro forma results	Nine Months Ended September 30, (unaudited) 2015 2014 Net sales $ $ Net income $ $ Net income per share - diluted $ $

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2015
Inventories
Schedule of Inventories	(unaudited) September 30, December 31, 2015 2014 Raw materials $ $ Work in process Finished goods Replacement parts and supplies Inventory at FIFO costs LIFO inventory reserves ) Inventories $ $

Short-term Borrowings and Lon21

Short-term Borrowings and Long-term Debt (Tables)	9 Months Ended
	Sep. 30, 2015
Short-term Borrowings and Long-term Debt
Schedule of long-term debt	(unaudited) September 30, December 31, 2015 2014 Term loan A-1 under Second Amended and Restated Credit Agreement with interest payable monthly at LIBOR plus 1.75% at September 30, 2015 $ $ Term loan A-2 under Second Amended and Restated Credit Agreement with interest payable monthly at LIBOR plus 1.875% at September 30, 2015 Receivable Credit Facility with interest payable monthly at LIBOR plus 0.75% at September 30, 2015 Total long-term debt Less unamortized debt issuance costs ) ) Long-term debt, net of current portion and debt issuance costs $ $
Schedule of annual principal repayments, paid quarterly	Fiscal year ending: 2015 $ — 2016 2017 2018 2019 2020 2021 2022 Total $

Net Income per Share (Tables)

Net Income per Share (Tables)	9 Months Ended
	Sep. 30, 2015
Net Income per Share
Schedule of basic and diluted net income per share	Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 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 $ $ $ $

Pension Plan and Post-Retirem23

Pension Plan and Post-Retirement Benefits (Tables)	9 Months Ended
	Sep. 30, 2015
Pension Plan and Post-Retirement Benefits
Schedule of net pension benefit recognized for the Pension Plan	Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Service cost for benefits earned $ $ $ $ Interest cost on projected benefit obligations Expected return on plan assets ) ) ) ) Amortization of net loss — — Amortization of prior service cost Net pension benefit - Company plan ) ) ) ) Net pension cost - multi -employer plan Total net pension benefit $ ) $ ) $ ) $ )

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2015
Stock-Based Compensation
Schedule of total stock-based compensation expense	Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Stock option compensation expense $ $ $ $ Restricted stock unit compensation expense Total stock-based compensation expense $ $ $ $
Schedule of total unrecognized stock-based compensation	September 30, December 31, 2015 2014 Unrecognized stock option compensation expense $ $ Unrecognized restricted stock unit compensation expense Total unrecognized stock-based compensation expense $ $
Schedule of the assumptions utilized for calculating the fair value of stock options	Nine Months Ended September 30, 2015 2014 Stock Options Black-Scholes assumptions (weighted average): Expected volatility % % Expected life (years) Risk-free interest rate % % Expected dividend yield % — %
Summary of stock options amounts and activity	Weighted Weighted Intrinsic Average Average Value Exercise Remaining (dollars in Options Price Life (Years) thousands) Outstanding at January 1, 2015 $ $ Granted Exercised ) Forfeited ) Outstanding at September 30, 2015 $ $ Exercisable at September 30 2015 $ $
Summary of unvested restricted stock units amounts and activity	Weighted Average Grant Date Units Fair Value Outstanding at January 1, 2015 $ Granted Vested ) Forfeited ) Outstanding at September 30, 2015 $

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Sep. 30, 2015
Segment Information
Schedule of segment sales by product line	Net Sales Depreciation Total assets Three Months Ended September 30, 2015 Trade Inter- segment Total Operating Income (Loss) and Amortization Capital Expenditures at September 30, 2015 Paper and Packaging (a) $ $ $ $ $ $ $ Distribution — Corporate — — — ) Intersegment eliminations — ) ) — — — — $ $ — $ $ $ $ $ Net Sales Depreciation Total assets Three Months Ended September 30, 2014 Trade Inter- segment Total Operating Income (Loss) and Amortization Capital Expenditures at September 30, 2014 Paper and Packaging $ $ — $ $ $ $ $ Distribution (a) — — — — — — — Corporate — — — ) Intersegment eliminations — — — — — — $ $ — $ $ $ $ $ Net Sales Depreciation Nine Months Ended September 30, 2015 Trade Inter- segment Total Operating Income (Loss) and Amortization Capital Expenditures Paper and Packaging $ $ $ $ $ $ Distribution (a) — Corporate — — — ) Intersegment eliminations — ) ) — — — $ $ — $ $ $ $ Net Sales Depreciation Nine Months Ended September 30, 2014 Trade Inter- segment Total Operating Income (Loss) and Amortization Capital Expenditures Paper and Packaging $ $ — $ $ $ $ Distribution (a) — — — — — — Corporate — — — ) Intersegment eliminations — — — — $ $ — $ $ $ $ (a) Results for the nine months September 30, 2015, include Victory for the period of June 1 through September 30, 2015 and is included in the Distribution segment.

Financial Statements (Details)

Financial Statements (Details) - segment	May. 31, 2015	Jun. 30, 2015
Financial Statements
Number of Reportable Segments	1	2

Victory Packaging Acquisition27

Victory Packaging Acquisition (Details) - Victory Packaging - USD ($) $ in Thousands	Jun. 01, 2015	Sep. 30, 2015	Sep. 30, 2015
Victory Acquisition
Total consideration, net of cash acquired	$ 615,000
Escrow to fund certain limited indemnity obligations	$ 40,000
Threshold period from closing of sale for potential additional contingent consideration	30 months
Fair value of contingent consideration	$ 9,600	$ 11,700	$ 11,700
Increase in contingent consideration			$ 1,200
Post closing working capital adjustments		$ 500
Maximum
Victory Acquisition
Contingent consideration if certain performance criteria are satisfied	$ 25,000

Victory Packaging Acquisition28

Victory Packaging Acquisition (Detail 2) - USD ($) $ in Thousands	Jun. 01, 2015	Sep. 30, 2015
Victory Acquisition
Cash paid at closing		$ 617,046
Victory Packaging
Victory Acquisition
Purchase price (net of $0.4 million of cash acquired	$ 615,000
Working capital adjustments	2,046
Cash paid at closing	617,046
Fair value of contingent consideration	9,600	$ 11,700
Total acquisition consideration	$ 626,646

Victory Packaging Acquisition29

Victory Packaging Acquisition (Detail 3) - USD ($) $ in Thousands	Sep. 30, 2015	Jun. 01, 2015	Dec. 31, 2014
Fair value of the assets acquired and liabilities assumed
Goodwill	$ 704,592		$ 533,851
Victory Packaging | Amounts recognized at acquisition date
Fair value of the assets acquired and liabilities assumed
Trade accounts receivable		$ 144,497
Other receivables		4,302
Inventories		90,542
Prepaid expenses and other current assets		1,746
Plant, property and equipment		18,865
Other assets		3,104
Intangible assets		257,700
Accounts payable		(47,795)
Accrued expenses		(6,905)
Accrued compensation costs		(8,778)
Other noncurrent liabilities		(17)
Goodwill		167,703
Total acquisition consideration		$ 624,964
Victory Packaging | Measurement period adjustments
Fair value of the assets acquired and liabilities assumed
Trade accounts receivable	(408)
Inventories	(254)
Prepaid expenses and other current assets	2,897
Plant, property and equipment	(794)
Intangible assets	100
Accrued expenses	(2,897)
Goodwill	3,038
Total acquisition consideration	1,682
Victory Packaging | Amounts recognized as at acquisition date (as adjusted)
Fair value of the assets acquired and liabilities assumed
Trade accounts receivable	144,089
Other receivables	4,302
Inventories	90,288
Prepaid expenses and other current assets	4,643
Plant, property and equipment	18,071
Other assets	3,104
Intangible assets	257,800
Accounts payable	(47,795)
Accrued expenses	(9,802)
Accrued compensation costs	(8,778)
Other noncurrent liabilities	(17)
Goodwill	170,741
Total acquisition consideration	$ 626,646

Victory Packaging Acquisition30

Victory Packaging Acquisition (Detail 4) - Victory Packaging $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015USD ($)	Sep. 30, 2015USD ($)
Selling, general and administrative expenses
Victory Acquisition
Adjusted transaction fees and expenses related to due diligence, advisory and legal services	$ 1,900	$ 4,500
Measurement period adjustments
Victory Acquisition
Plant, property and equipment	(794)	(794)
Trade accounts receivable	(408)	(408)
Inventories	$ (254)	$ (254)

Victory Packaging Acquisition31

Victory Packaging Acquisition (Detail 5) - Victory Packaging - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Victory Acquisition
Net sales	$ 341,500
Operating income	12,900
Net sales	2,402,487	$ 2,446,555
Net income	$ 93,642	$ 147,560
Net income per share - diluted (in dollars per share)	$ 0.96	$ 1.51

Annual Planned Maintenance Outa

Annual Planned Maintenance Outages (Details) $ in Millions	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2015USD ($)T	Sep. 30, 2014USD ($)	Jun. 30, 2015USD ($)T	Sep. 30, 2015USD ($)T	Sep. 30, 2014USD ($)T
Decrease in tons produced	2,400			14,800	19,700
Roanoke Rapids, North Carolina
Annual planned maintenance outage costs | $			$ 8
Term of outage			8 days
Decrease in tons produced			10,400
Cost of sales
Annual planned maintenance outage costs | $	$ 4.4	$ 5.2		$ 24.1	$ 25.1

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Inventories
Raw materials	$ 104,886	$ 99,390
Work in process	4,645	3,634
Finished goods	147,800	63,639
Replacement parts and supplies	77,035	70,026
Inventory at FIFO costs	334,366	236,689
LIFO inventory reserves	(110)	1,640
Inventories	334,256	$ 238,329
Victory Packaging
Inventories
Finished goods	$ 81,200

Short-term Borrowings and Lon34

Short-term Borrowings and Long-term Debt (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Short-term borrowings and long term debt
Long-term debt	$ 1,611,825	$ 1,062,238
Less unamortized debt issuance costs	(22,155)	(16,175)
Total long-term debt, net of current portion and debt issuance costs	1,589,670	1,046,063
Term Loan A1
Short-term borrowings and long term debt
Long-term debt	$ 881,250	664,125
Term Loan A1 | LIBOR
Short-term borrowings and long term debt
Margin interest above reference rate (as a percent)	1.75%
Term Loan A2
Short-term borrowings and long term debt
Long-term debt	$ 469,063	231,113
Term Loan A2 | LIBOR
Short-term borrowings and long term debt
Margin interest above reference rate (as a percent)	1.875%
Receivables Credit Facility
Short-term borrowings and long term debt
Long-term debt	$ 261,512	$ 167,000
Receivables Credit Facility | LIBOR
Short-term borrowings and long term debt
Margin interest above reference rate (as a percent)	0.75%

Short-term Borrowings and Lon35

Short-term Borrowings and Long-term Debt (Details 2) - USD ($) $ in Millions	Jun. 01, 2015	Sep. 30, 2015
Senior secured credit facility
Short-term borrowings and long term debt
Maximum borrowing capacity	$ 1,950
Revolver
Short-term borrowings and long term debt
Maximum borrowing capacity	500
Accordion maximum borrowing capacity	600
Term Loan A1
Short-term borrowings and long term debt
Maximum borrowing capacity	940
Term Loan A2
Short-term borrowings and long term debt
Maximum borrowing capacity	$ 475
Receivables Credit Facility
Short-term borrowings and long term debt
Maximum borrowing capacity		$ 275

Short-term Borrowings and Lon36

Short-term Borrowings and Long-term Debt (Details 3) - Senior secured credit facility $ in Thousands	Sep. 30, 2015USD ($)
Principal portion of long-term debt due
2,016	$ 12,937
2,017	51,750
2,018	51,750
2,019	51,750
2,020	994,762
2,021	4,750
2,022	444,126
Total	$ 1,611,825

Short-term Borrowings and Lon37

Short-term Borrowings and Long-term Debt (Details 4) $ in Millions	Jun. 01, 2015USD ($)
Second Amended and Restated Credit Agreement
Short-term borrowings and long term debt
Debt issuance costs	$ 10.6

Short-term Borrowings and Lon38

Short-term Borrowings and Long-term Debt (Details 5) $ in Thousands	Sep. 30, 2015USD ($)
Short-term borrowings
Short-term borrowings	$ 2,000
Second Amended and Restated Credit Agreement | Revolver
Short-term borrowings
Short-term borrowings	$ 2,000
Line of credit interest rate (as a percent)	4.00%
Current availability under borrowing base	$ 479,800

Short-term Borrowings and Lon39

Short-term Borrowings and Long-term Debt (Details 6) - USD ($) $ in Thousands	1 Months Ended			3 Months Ended		9 Months Ended
	Sep. 30, 2015	Jun. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Receivables Credit Facility
Repayments of Long-term Debt						$ 64,688	$ 178,525
Loss on debt extinguishment				$ 628	$ 2,963	628	$ 2,963
Receivables Credit Facility
Receivables Credit Facility
Accounts Receivable from Securitization	$ 379,683			379,683		$ 379,683		$ 225,577
Term of debt instrument						1 year
Collateral interest	261,512			261,512		$ 261,512		$ 167,000
Maximum borrowing capacity	275,000			275,000		275,000
Debt issuance costs		$ 200
Term Loans
Receivables Credit Facility
Repayments of Long-term Debt	51,800		$ 175,000
Loss on debt extinguishment	600		$ 3,000
Maximum | Receivables Credit Facility
Receivables Credit Facility
Collateral interest	$ 261,500			$ 261,500		$ 261,500

Short-term Borrowings and Lon40

Short-term Borrowings and Long-term Debt (Details 7) $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)item	Sep. 30, 2014USD ($)
Fair Value of Debt
Weighted average cost of borrowings	1.82%	2.00%
Other Borrowings
Other current borrowings	$ 2,214
Level 2
Fair Value of Debt
Fair value of debt	1,600,000
Other Borrowing
Other Borrowings
Initial aggregate principal amount	$ 6,600	$ 6,300
Interest rate on borrowings (as a percent)	1.70%	1.69%
Number of quarterly payments | item	3
Other current borrowings	$ 2,200	$ 1,200

Income taxes (Details)

Income taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Taxes
Effective tax rate (as a percent)	32.50%	33.90%	34.10%	33.90%
Statutory tax rate (as a percent)			35.00%	35.00%
Favorable adjustment due to legislation	$ 1.1
Favorable adjustment due to legislation and acquisition			$ 0.7
Favorable adjustment due to prior return		$ 0.5
Favorable adjustment due to settlement				$ 1.3

Net income per share (Details)

Net income per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net Income per Share
Net income	$ 34,206	$ 54,254	$ 94,562	$ 137,812
Weighted-average number of common shares for basic net income per share	96,310,998	95,958,877	96,235,404	95,857,079
Incremental effect of dilutive common stock equivalents:
Unexercised stock options (in shares)	1,030,234	1,196,617	1,112,767	1,198,418
Unvested restricted stock awards (in shares)	288,409	360,407	283,076	361,372
Weighted-average number of shares for diluted net income per share	97,629,641	97,515,901	97,631,247	97,416,869
Net income per share - basic (in dollars per share)	$ 0.36	$ 0.57	$ 0.98	$ 1.44
Net income per share - diluted (in dollars per share)	$ 0.35	$ 0.56	$ 0.97	$ 1.41
Anti-dilutive unexercised stock options (in shares)			900,000	42,000

Pension Plan and Post-Retirem43

Pension Plan and Post-Retirement Benefits (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net pension (benefit) / cost recognized for the Pension Plans
Service cost for benefits earned	$ 1,215	$ 2,448	$ 3,645	$ 7,346
Interest cost on projected benefit obligations	6,900	7,180	20,701	21,540
Expected return on plan assets	(10,236)	(11,030)	(30,708)	(33,091)
Amortization of net loss	533		1,601
Amortization of prior service cost	69	101	207	302
Net pension benefit - Company plan	(1,519)	(1,301)	(4,554)	(3,903)
Net pension cost - multi-employer plan	77	82	252	247
Total net pension benefit	(1,442)	(1,219)	(4,302)	(3,656)
Employer contributions			1,100
Defined Contribution Plan
Defined contribution plan expense recognized	5,500	$ 3,600	15,500	$ 11,800
Victory Packaging
Defined Contribution Plan
Defined contribution plan expense recognized	$ 500		$ 800

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended			3 Months Ended		9 Months Ended		12 Months Ended
	May. 31, 2015	Mar. 31, 2015	Mar. 31, 2014	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Stock-based compensation
Stock-based compensation expense				$ 1,585	$ 1,401	$ 8,122	$ 5,630
Unrecognized stock-based compensation expense
Unrecognized stock option compensation expense				4,531		4,531		$ 3,243
Unrecognized restricted stock unit compensation expense				5,347		5,347		3,923
Total unrecognized stock-based compensation expense				$ 9,878		9,878		$ 7,166
Options
Exercised (in shares)				0
Stock Options
Stock-based compensation
Stock-based compensation expense				$ 826	740	$ 4,048	$ 2,938
Unrecognized stock-based compensation expense
Weighted average period of recognition						2 years 1 month 6 days
Stock Options
Minimum age requirement of grantee as a condition for vesting						65 years
Contractual term						10 years
Additional information
Weighted average fair value (in dollars per share)	$ 8.59	$ 10.08	$ 10.36
Stock Options Black-Scholes assumptions (weighted average):
Expected volatility (as a percent)						39.08%	39.93%
Expected life						4 years 10 months 24 days	4 years 3 months 18 days
Risk-free interest rate (as a percent)						1.35%	1.34%
Expected dividend yield						1.25%
Options
Outstanding at the beginning of the period (in shares)						2,759,306
Granted (in shares)	7,494	555,451				562,945
Exercised (in shares)						(85,802)
Forfeited (in shares)						(41,532)
Outstanding at the end of the period (in shares)				3,194,917		3,194,917		2,759,306
Exercisable at the end of the period (in shares)				1,964,951		1,964,951
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)						$ 11.81
Granted (in dollars per share)	$ 27.44	$ 31.89				31.83
Exercised (in dollars per share)						10.11
Forfeited (in dollars per share)						24.38
Outstanding at the end of the period (in dollars per share)				$ 15.24		15.24		$ 11.81
Exercisable at the end of the period (in dollars per share)				$ 7.46		$ 7.46
Weighted Average Remaining Life (Years)
Outstanding at the end of the period						6 years 7 months 6 days		6 years 9 months 18 days
Exercisable at the end of the period						5 years 3 months 18 days
Intrinsic Value
Outstanding at the end of the period				$ 18,834		$ 18,834		$ 48,799
Exercisable at the end of the period				18,200		$ 18,200
Cash proceeds from exercises of options				800	200		$ 600
Stock Options | Awards that vest after two years
Stock Options
Percentage of granted awards that will vest						50.00%
Additional information
Vesting period for awards						2 years
Stock Options | Awards that vest after three years
Stock Options
Percentage of granted awards that will vest						50.00%
Additional information
Vesting period for awards						3 years
Restricted Stock Units
Stock-based compensation
Stock-based compensation expense				$ 759	$ 661	$ 4,074	$ 2,692
Stock Options
Minimum age requirement of grantee as a condition for vesting						65 years
Additional information
Vesting period for awards						3 years
Units
Outstanding at the beginning of the period (in shares)						588,067
Granted (in shares)	2,346	181,590				183,936
Vested (in shares)						(228,825)
Forfeited (in shares)						(19,491)
Outstanding at the end of the period (in shares)				523,687		523,687		588,067
Weighted Average Grant Date Fair Value
Outstanding at the beginning of the period (in dollars per share)						$ 16.98
Granted (in dollars per share)						31.83
Vested (in dollars per share)						10.94
Forfeited (in dollars per share)						21.61
Outstanding at the end of the period (in dollars per share)				$ 24.75		$ 24.75		$ 16.98

Commitments and Contingencies (

Commitments and Contingencies (Details) $ in Millions	Aug. 27, 2015T	Jun. 12, 2015	Nov. 30, 2014USD ($)item	Jun. 30, 2014employee
Commitments and contingencies
Total estimated remedy | $			$ 342
Number of potentially responsible parties that entered into allocation agreement | item			40
Tons of paper lost due to work stoppage | T	29,000
Longview
Commitments and contingencies
Discount rate (as a percent)			2.30%
Number of union employees				760
Number of days' notice to go on strike by the union		10 days
Number of work stoppage days	12 days

Segment Information (Details)

Segment Information (Details) $ in Thousands	May. 31, 2015segment	Jun. 30, 2015segmentitem	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Dec. 31, 2014USD ($)
Segment information
Number of reportable segments | segment	1	2
Net Sales			$ 807,563	$ 598,106	$ 2,025,107	$ 1,737,507
Operating Income (Loss)			61,596	94,162	170,354	237,593
Depreciation and amortization			42,500	34,997	114,617	101,580
Capital Expenditures			31,184	38,691	94,895	112,367
Total Assets			3,249,935	2,796,247	3,249,935	2,796,247	$ 2,556,274
Paper And Packaging
Segment information
Net Sales			567,063	598,106	1,691,997	1,737,507
Operating Income (Loss)			60,185	102,291	190,321	264,133
Depreciation and amortization			36,059	34,244	104,723	99,103
Capital Expenditures			25,448	38,179	81,954	107,059
Total Assets			2,524,562	2,669,499	2,524,562	2,669,499
Distribution
Segment information
Net Sales			248,128		341,526
Operating Income (Loss)			11,139		12,859
Depreciation and amortization			5,522		7,467
Capital Expenditures			1,283		1,526
Total Assets			683,555		683,555
Corporate
Segment information
Operating Income (Loss)			(9,728)	(8,129)	(32,826)	(26,540)
Depreciation and amortization			919	753	2,427	2,477
Capital Expenditures			4,453	512	11,415	5,308
Total Assets			41,818	126,748	41,818	126,748
Operating Segment
Segment information
Net Sales			807,563	598,106	2,025,107	1,737,507
Operating Segment | Paper And Packaging
Segment information
Net Sales			559,435	$ 598,106	1,683,581	$ 1,737,507
Operating Segment | Distribution
Segment information
Net Sales			248,128		341,526
Inter-segment
Segment information
Net Sales			(7,628)		(8,416)
Inter-segment | Paper And Packaging
Segment information
Net Sales			$ 7,628		$ 8,416
Victory Packaging
Segment information
Number of distribution centers | item		70