Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 25, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | PACKAGING CORP OF AMERICA | |
Entity Central Index Key | 0000075677 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 94,657,919 | |
Entity File Number | 1-15399 | |
Entity Tax Identification Number | 36-4277050 | |
Entity Address, Address Line One | 1 North Field Court | |
Entity Address, City or Town | Lake Forest | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60045 | |
City Area Code | 847 | |
Local Phone Number | 482-3000 | |
Document Quarterly Report | true | |
Entity Incorporation, State or Country Code | DE | |
Document Transition Report | false | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | PKG | |
Security Exchange Name | NYSE |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 1,750.7 | $ 1,809.9 | $ 5,244.3 | $ 5,268.1 |
Cost of sales | (1,339.3) | (1,366.7) | (3,983.6) | (4,048.2) |
Gross profit | 411.4 | 443.2 | 1,260.7 | 1,219.9 |
Selling, general and administrative expenses | (136.9) | (134.2) | (420.6) | (406.7) |
Other expense, net | (11.7) | (10.5) | (21.5) | (32.2) |
Income from operations | 262.8 | 298.5 | 818.6 | 781 |
Non-operating pension expense | (1.9) | (0.5) | (6) | (1.6) |
Interest expense, net | (21.6) | (23.9) | (68) | (73.4) |
Income before taxes | 239.3 | 274.1 | 744.6 | 706 |
Provision for income taxes | (59.5) | (67.4) | (184.4) | (172.6) |
Net income | $ 179.8 | $ 206.7 | $ 560.2 | $ 533.4 |
Net income per common share: | ||||
Basic | $ 1.90 | $ 2.19 | $ 5.93 | $ 5.65 |
Diluted | 1.89 | 2.18 | 5.91 | 5.64 |
Dividends declared per common share | $ 0.79 | $ 0.79 | $ 2.37 | $ 2.21 |
Statements of Comprehensive Income: | ||||
Net income | $ 179.8 | $ 206.7 | $ 560.2 | $ 533.4 |
Foreign currency translation adjustment | (0.1) | |||
Reclassification adjustments to cash flow hedges included in net income, net of tax of $0.3 million, $0.3 million, $1.0 million, and $1.0 million | 1 | 1 | 2.9 | 3 |
Amortization of pension and postretirement plans actuarial loss and prior service cost, net of tax of $0.8 million, $1.0 million, $2.4 million, and $3.0 million | 2.4 | 3 | 7.1 | 8.9 |
Other comprehensive income | 3.4 | 4 | 10 | 11.8 |
Comprehensive income | $ 183.2 | $ 210.7 | $ 570.2 | $ 545.2 |
Consolidated Statements of In_2
Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Reclassification adjustments to cash flow hedges included in net income, tax | $ 0.3 | $ 0.3 | $ 1 | $ 1 |
Amortization of pension and postretirement plans actuarial loss and prior service cost, tax | $ 0.8 | $ 1 | $ 2.4 | $ 3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 738.3 | $ 361.5 |
Accounts receivable, net of allowance for doubtful accounts and customer deductions of $13.9 million and $13.6 million as of September 30, 2019, and December 31, 2018, respectively | 932.3 | 901.9 |
Inventories | 806.3 | 795.6 |
Prepaid expenses and other current assets | 44.9 | 39.4 |
Federal and state income taxes receivable | 9.5 | 16.7 |
Total current assets | 2,531.3 | 2,115.1 |
Property, plant, and equipment, net | 3,110.4 | 3,108.6 |
Operating lease right-of-use assets | 232.3 | |
Goodwill | 918.7 | 917.3 |
Other intangible assets, net | 348.5 | 378.2 |
Other long-term assets | 49.9 | 50.5 |
Total assets | 7,191.1 | 6,569.7 |
Current liabilities: | ||
Finance lease obligations | 1.5 | 1.4 |
Operating lease obligations | 60.4 | |
Accounts payable | 385.5 | 382.2 |
Dividends payable | 76.3 | 76.1 |
Accrued liabilities | 220.1 | 222.4 |
Accrued interest | 26.9 | 11.5 |
Total current liabilities | 770.7 | 693.6 |
Long-term liabilities: | ||
Long-term debt | 2,486.3 | 2,483.7 |
Finance lease obligations | 16.4 | 17.6 |
Operating lease obligations | 177.3 | |
Deferred income taxes | 327.6 | 285.2 |
Compensation and benefits | 320.3 | 357.5 |
Other long-term liabilities | 57.8 | 59.7 |
Total long-term liabilities | 3,385.7 | 3,203.7 |
Commitments and contingent liabilities | ||
Stockholders' equity: | ||
Common stock, par value $0.01 per share, 300.0 million shares authorized, 94.7 million and 94.5 million shares issued as of September 30, 2019, and December 31, 2018, respectively | 0.9 | 0.9 |
Additional paid in capital | 518.9 | 494.5 |
Retained earnings | 2,643.7 | 2,315.8 |
Accumulated other comprehensive loss | (128.8) | (138.8) |
Total stockholders' equity | 3,034.7 | 2,672.4 |
Total liabilities and stockholders' equity | $ 7,191.1 | $ 6,569.7 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts and customer deductions | $ 13.9 | $ 13.6 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 94,700,000 | 94,500,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Flows from Operating Activities: | ||
Net income | $ 560.2 | $ 533.4 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, depletion, and amortization of intangibles | 288.6 | 313.6 |
Amortization of deferred financing costs | 6.5 | 6.5 |
Share-based compensation expense | 24.5 | 17.4 |
Deferred income tax provision | 38.3 | 34.9 |
Loss on asset disposals | 6.7 | 4.9 |
Pension and post-retirement benefits expense, net of contributions | (30.4) | (2.7) |
Other, net | 9.6 | 3.3 |
Increase in assets — | ||
Accounts receivable | (30.3) | (148.9) |
Inventories | (10.8) | (22.6) |
Prepaid expenses and other current assets | (5.6) | (13.2) |
Increase (decrease) in liabilities — | ||
Accounts payable | (2.3) | 19.6 |
Accrued liabilities | 15.4 | 23.7 |
Federal and state income taxes payable / receivable | 7.8 | 64.6 |
Net cash provided by operating activities | 878.2 | 834.5 |
Cash Flows from Investing Activities: | ||
Additions to property, plant, and equipment | (263.8) | (404.3) |
Additions to other long term assets | (4.5) | (4.1) |
Proceeds from disposals | 1.4 | 0.5 |
Other, net | (1.4) | 2.6 |
Net cash used for investing activities | (268.3) | (405.3) |
Cash Flows from Financing Activities: | ||
Repayments of debt and finance lease obligations | (1.1) | (151) |
Common stock dividends paid | (223.9) | (193.4) |
Shares withheld to cover employee restricted stock taxes | (8.1) | (7.9) |
Net cash used for financing activities | (233.1) | (352.3) |
Net increase in cash and cash equivalents | 376.8 | 76.9 |
Cash and cash equivalents, beginning of period | 361.5 | 216.9 |
Cash and cash equivalents, end of period | $ 738.3 | $ 293.8 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning Balance at Dec. 31, 2017 | $ 2,182.6 | $ 0.9 | $ 471.2 | $ 1,867.4 | $ (156.9) |
Beginning Balance (in shares) at Dec. 31, 2017 | 94,350 | ||||
Common stock withheld and retired to cover taxes on vested stock awards | (7.9) | $ 0 | (0.5) | (7.4) | 0 |
Common stock withheld and retired to cover taxes on vested stock awards (in shares) | (69) | ||||
Common stock dividends declared | (209.3) | $ 0 | 0 | (209.3) | 0 |
Adoption of ASC 606 | ASU 2014-09 | 1.6 | 0 | 0 | 1.6 | 0 |
Share-based compensation | 17.8 | $ 0 | 17.8 | 0 | 0 |
Share-based compensation expense (in shares) | 216 | ||||
Other | 0.2 | $ 0 | 0.4 | (0.2) | 0 |
Comprehensive income | 545.2 | 0 | 0 | 533.4 | 11.8 |
Ending Balance at Sep. 30, 2018 | 2,530.2 | $ 0.9 | 488.9 | 2,185.5 | (145.1) |
Ending Balance (in shares) at Sep. 30, 2018 | 94,497 | ||||
Beginning Balance at Jun. 30, 2018 | 2,388 | $ 0.9 | 482.1 | 2,054 | (149) |
Beginning Balance (in shares) at Jun. 30, 2018 | 94,500 | ||||
Common stock withheld and retired to cover taxes on vested stock awards | (0.3) | $ 0 | 0 | (0.3) | 0 |
Common stock withheld and retired to cover taxes on vested stock awards (in shares) | (2) | ||||
Common stock dividends declared | (74.9) | $ 0 | 0 | (74.9) | 0 |
Share-based compensation | 6.7 | $ 0 | 6.7 | 0 | 0 |
Share-based compensation expense (in shares) | (1) | ||||
Other | 0 | $ 0 | 0.1 | 0 | (0.1) |
Comprehensive income | 210.7 | 0 | 0 | 206.7 | 4 |
Ending Balance at Sep. 30, 2018 | 2,530.2 | $ 0.9 | 488.9 | 2,185.5 | (145.1) |
Ending Balance (in shares) at Sep. 30, 2018 | 94,497 | ||||
Beginning Balance at Dec. 31, 2018 | 2,672.4 | $ 0.9 | 494.5 | 2,315.8 | (138.8) |
Beginning Balance (in shares) at Dec. 31, 2018 | 94,497 | ||||
Common stock withheld and retired to cover taxes on vested stock awards | (8.1) | $ 0 | (0.7) | (7.4) | 0 |
Common stock withheld and retired to cover taxes on vested stock awards (in shares) | (87) | ||||
Common stock dividends declared | (224.7) | $ 0 | 0 | (224.7) | 0 |
Share-based compensation | 25.1 | $ 0 | 25.1 | 0 | 0 |
Share-based compensation expense (in shares) | 250 | ||||
Other | (0.2) | $ 0 | 0 | (0.2) | 0 |
Comprehensive income | 570.2 | 0 | 0 | 560.2 | 10 |
Ending Balance at Sep. 30, 2019 | 3,034.7 | $ 0.9 | 518.9 | 2,643.7 | (128.8) |
Ending Balance (in shares) at Sep. 30, 2019 | 94,660 | ||||
Beginning Balance at Jun. 30, 2019 | 2,921.2 | $ 0.9 | 513.3 | 2,539.2 | (132.2) |
Beginning Balance (in shares) at Jun. 30, 2019 | 94,666 | ||||
Common stock withheld and retired to cover taxes on vested stock awards | (0.3) | $ 0 | 0 | (0.3) | 0 |
Common stock withheld and retired to cover taxes on vested stock awards (in shares) | (4) | ||||
Common stock dividends declared | (75) | $ 0 | 0 | (75) | 0 |
Share-based compensation | 5.6 | $ 0 | 5.6 | 0 | 0 |
Share-based compensation expense (in shares) | (2) | ||||
Other | 0 | $ 0 | 0 | 0 | 0 |
Comprehensive income | 183.2 | 0 | 0 | 179.8 | 3.4 |
Ending Balance at Sep. 30, 2019 | $ 3,034.7 | $ 0.9 | $ 518.9 | $ 2,643.7 | $ (128.8) |
Ending Balance (in shares) at Sep. 30, 2019 | 94,660 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | 1. Nature of Operations and Basis of Presentation Packaging Corporation of America ("we," "us," "our," PCA," or the "Company") was incorporated on January 25, 1999. In April 1999, PCA acquired the containerboard and corrugated packaging products business of Pactiv Corporation (Pactiv), formerly known as Tenneco Packaging, Inc., a wholly owned subsidiary of Tenneco Inc. We are a large diverse manufacturer of both packaging and paper products. We are headquartered in Lake Forest, Illinois and we operate primarily in the United States. We report our business in three reportable segments: Packaging, Paper, and Corporate and Other. Our Packaging segment produces a wide variety of containerboard and corrugated packaging products. The Paper segment manufactures and sells a range of communication-based papers. Corporate and Other includes support staff services and related assets and liabilities, transportation assets, and activity related to other ancillary support operations. For more information about our segments, see Note 19, 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. The consolidated financial statements of PCA as September 30, 2019 and for the three and nine months ended September 30, 2019 and 2018 are unaudited but include all adjustments (consisting only of normal recurring adjustments) that management considers necessary for a fair presentation of such financial statements. The preparation of the consolidated financial statements involves the use of estimates and accruals. Actual results may vary from those estimates. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with Article 10 of Regulation S-X of the Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete audited financial statements. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. These consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2018. The consolidated financial statements include the accounts of PCA and its majority-owned subsidiaries after elimination of intercompany balances and transactions. |
New and Recently Adopted Accoun
New and Recently Adopted Accounting Standards | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
New and Recently Adopted Accounting Standards | 2. New and Recently Adopted Accounting Standards Recently Adopted Accounting Standards Effective January 1, 2019, the Company adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02 (Topic 842): Leases , which requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The original guidance required application on a modified retrospective basis with the earliest period presented. In July 2018, the FASB issued ASU 2018-11, Targeted Improvements to ASC 842 , which included an option to not restate comparative periods in transition and elect to use the effective date of ASC 842, Leases , as the date of initial application of transition, which we elected. As a result of the adoption of ASC 842 on January 1, 2019, we recorded operating lease liabilities of $228 million, with corresponding right of use (“ROU”) assets of the same amount. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed us to carry forward the historical lease classification and not to reassess whether existing or expired contracts contain a lease. We also elected the short-term lease recognition exemption, which permits us to exclude short-term leases (i.e. leases with terms of 12 months or less) from the recognition requirements of this standard, and we elected to account for lease and non-lease components as a single lease component for all classes of underlying assets except for embedded leases. The adoption of ASC 842 had an immaterial impact on our consolidated net earnings, liquidity and debt covenants under our current agreements for the three- and nine-month periods ended September 30, 2019. See Note 3, Leases, for more information. Effective January 1, 2019, we adopted ASU 2018-02 (Topic 220 ): Income Statement—Reporting Comprehensive Income – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income New Accounting Standards Not Yet Adopted In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which includes amendments to align the accounting for costs incurred to implement a cloud computing arrangement that is a service contract with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The accounting for the service component of a hosting arrangement that is a service contract is not affected by the amendments in this update. The ASU is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance. In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans . ASU 2018-14 removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and adds additional disclosures. The ASU is effective for annual periods beginning after December 31, 2020 , with early adoption permitted. The amendments in ASU 2018-14 would need to be applied o n a retrospective basis. The Company is currently evaluating the impact this guidance will have on its related disclosures . In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The Company is currently evaluating the impact of the new guidance. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments. ASU 2016-13 introduces the Current Expected Credit Losses (“CECL”) framework for evaluating credit losses on financial instruments measured at amortized cost. This new framework requires entities to incorporate forward-looking information into their estimate of current expected credit loss as of each reporting date. Although available-for-sale (“AFS”) debt securities are not within the scope of the new CECL framework, the ASU includes an amended impairment model for evaluating losses related to AFS debt securities. The guidance in this update also includes enhanced requirements for disclosures related to credit loss estimates. The ASU is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. The amendments in ASU 2016-13 would need to be applied using the modified retrospective method. The Company is currently evaluating the impact of the new guidance but does not expect this ASU to have a material impact on the Company’s financial position, results of operation, or cash flow. There were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | 3. Leases We group our leases into two primary lease types, real estate and equipment, and into various asset classes within each type. Real estate leases primarily include manufacturing locations, office space, warehouses, and design centers, while equipment leases primarily include manufacturing equipment. Leases with an initial term of 12 months or less and certain month-to-month leases are not recorded on the balance sheet. The lease expense for these types of leases is recognized on a straight-line basis over the lease term. To determine the lease term, we include the non-cancellable period of the lease together with the following: all periods covered by an option to extend the lease if we are reasonably certain to exercise that option; any periods covered by an option to terminate the lease if we are reasonably certain not to exercise that option; and any periods covered by an option to extend or not to terminate the lease that are controlled by the lessor. The exercising of lease renewal options is based on whether future economic benefit is expected to be derived from the renewal. Most of our real estate leases contain at least one renewal option. Renewal options generally range from 1 to 5 years. Although equipment leases may also contain renewal options, we typically do not expect to extend and/or exercise these renewal options unless a compelling business reason is provided to management. Our leases may contain fixed and variable costs. Fixed costs determine the right-of-use asset. Variable costs are those costs which will vary month to month and are excluded from the calculation of the right-of-use asset. Variable lease costs are recorded to lease expense in the period in which they are incurred. Our leases do not provide an implicit borrowing rate of return. Therefore, we use our incremental borrowing rate to calculate the present value of lease payments at inception of the lease or when a lease is modified. Supplemental balance sheet information related to our leases was as follows (dollars in millions): September 30, 2019 Operating leases: Operating lease right-of-use assets $ 232.3 Current portion of operating lease obligations $ 60.4 Long-term portion of operating lease obligations 177.3 Total operating lease obligations $ 237.7 Finance leases: Buildings $ 0.3 Machinery and equipment 28.5 Total 28.8 Less accumulated amortization (17.8 ) Total $ 11.0 Current portion of finance lease obligations $ 1.5 Long-term portion of finance lease obligations 16.4 Total finance lease obligations $ 17.9 Weighted-average remaining lease term (years): Operating leases 5.8 Finance leases 9.0 Weighted-average discount rate: Operating leases 4.33% Finance leases 6.66% The components of lease expense were as follows (dollars in millions): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Finance lease cost: Amortization of finance lease assets $ 0.4 $ 1.1 Interest on lease liabilities 0.3 0.9 Total finance lease cost 0.7 2.0 Operating lease cost 17.6 52.3 Short-term lease cost 4.4 15.1 Variable lease cost 3.2 13.0 Total lease cost $ 25.9 $ 82.4 Supplemental cash flow information related to leases was as follows (dollars in millions): Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ (44.6 ) Operating cash flows for finance leases (1.1 ) Financing cash flows for finance leases (0.9 ) Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ (20.5 ) Finance leases — Supplemental non-cash information on changes in lease liabilities $ 33.8 Supplemental non-cash information on changes in right-of-use assets $ 16.2 The maturities of lease liabilities for operating and finance leases at September 30, 2019 were as follows (dollars in millions): Operating Leases Finance Leases 2019 $ 18.1 $ 0.7 2020 66.9 2.7 2021 56.6 2.7 2022 39.2 2.7 2023 25.4 2.7 Thereafter 63.8 12.4 Total lease payments 270.0 23.9 Less imputed interest (a) (32.3 ) (6.0 ) Present value of lease liabilities $ 237.7 $ 17.9 (a) Calculated using the incremental borrowing rate for each lease applied to the future payments. The maturities of lease liabilities at December 31, 2018 under ASC 840 were as follows (dollars in millions): Operating Leases Finance Leases 2019 $ 70.1 $ 2.7 2020 58.7 2.7 2021 47.4 2.7 2022 29.9 2.7 2023 17.8 2.7 Thereafter 46.4 12.4 Total lease payments $ 270.3 25.9 Less imputed interest (b) (6.9 ) Present value of lease liabilities $ 19.0 (b) Calculated using the incremental borrowing rate for each lease applied to the future payments. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 4 . Revenue Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration expected to be received in exchange for those goods or services. Sales, value added, and other taxes collected concurrently with revenue-producing activities are excluded from revenue. The following table presents our revenues disaggregated by product line (dollars in millions): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Packaging $ 1,489.9 $ 1,535.1 $ 4,472.1 $ 4,434.2 Paper 242.8 254.3 720.3 774.5 Corporate and Other 18.0 20.5 51.9 59.4 Total revenue $ 1,750.7 $ 1,809.9 $ 5,244.3 $ 5,268.1 Packaging Revenue Our containerboard mills produce linerboard and corrugating medium which are papers primarily used in the production of corrugated products. The majority of our containerboard production is used internally by our corrugated products manufacturing facilities. The remaining containerboard is sold to outside domestic and export customers. Our corrugated products manufacturing plants produce a wide variety of corrugated packaging products and retail merchandise displays. We sell corrugated products to national, regional and local customers, which are broadly diversified across industries and geographic locations. The Company recognizes revenue for its packaging products when performance obligations under the terms of a contract with a customer are satisfied. This occurs with the transfer of control of our products at a specific point in time. Based on our express terms and conditions of the sale of products to our customers, as well as terms included in contractual arrangements with our customers, we do not have an enforceable right of payment that includes a reasonable profit throughout the duration of the contract for products that do not have an alternative use. Revenue is recognized when the product is shipped from the mill or from our manufacturing facility to our customer. Certain customers may receive volume-based incentives, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenue recognized. Certain customers receive a portion of their packaging products as consigned inventory with billing triggered once the customer uses or consumes the designated product. Prior to invoicing , these amounts are handled as unbilled receivables. Total unbilled receivables, which are immaterial in amount, are included in the accounts receivable financial statement caption . Paper Revenue We manufacture and sell a range of communication-based papers. Communication papers consist of cut-size office papers, and printing and converting papers. The Company recognizes revenue for its paper products when performance obligations under the terms of a contract with a customer are satisfied. This occurs with the transfer of control of our products at a specific point in time. Revenue is recognized when the product is shipped from the mill or from our manufacturing facility or distribution center to our customer. Certain customers may receive volume-based incentives, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenue recognized. Corporate and Other Revenue Revenue in this segment primarily relates to Louisiana Timber Procurement Company, L.L.C. (LTP), a variable-interest entity that is 50% owned by PCA and 50% owned by Boise Cascade Company (Boise Cascade). PCA is the primary beneficiary of LTP and has the power to direct the activities that most significantly affect the economic performance of LTP. Therefore, we consolidate 100% of LTP in our financial statements. See Note 18, Transactions With Related Parties, for more information related to LTP. The Company recognizes revenue within this segment when performance obligations under the terms of a contract with a customer are satisfied. This occurs with the transfer of control of our products at a specific point in time. Practical Expedients and Exemption Shipping and handling fees billed to a customer are recorded on a gross basis in "Net sales" with the corresponding shipping and handling costs included in "Cost of sales" in the concurrent period as the revenue is recorded. We expense sales commissions when incurred because the amortization period is one year or less. Sales commissions are recorded in "Selling, general, and administrative expenses". We do not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | 5 . Acquisitions Englander dZignPak On October 9, 2018, PCA acquired the assets of Englander dZignPak (“Englander”), a corrugated products manufacturer, for $56.3 million. The assets include two sheet plants located in Waco, Texas and Carrollton, Texas. Sales and total assets of the acquired company are not material to our overall sales and total assets. Operating results of the acquired assets subsequent to October 9, 2018 are included in our Packaging segment’s 2018 operating results. The total purchase price has been allocated to the assets acquired and liabilities assumed based on fair values at the date of acquisition, of which $28.6 million was allocated to goodwill (which is deductible for tax purposes) and $14.1 million to intangible assets (to be amortized over a weighted average life of approximately 9.7 years), primarily customer relationships, in the Packaging segment. During the second quarter of 2019, we paid $1.4 million to the seller related to a final working capital adjustment. We recorded the adjustment as an increase to goodwill, which increased the purchase price to $57.7 million. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 6 . Earnings Per Share The following table sets forth the computation of basic and diluted income per common share for the periods presented (dollars and shares in millions, except per share data): Three Months Ended Nine Months Ended September 30, September 30, Numerator: 2019 2018 2019 2018 Net income $ 179.8 $ 206.7 $ 560.2 $ 533.4 Less: Distributed and undistributed earnings allocated to participating securities (1.3 ) (1.6 ) (4.2 ) (4.1 ) Net income attributable to common shareholders $ 178.5 $ 205.1 $ 556.0 $ 529.3 Denominator: Weighted average basic common shares outstanding 93.9 93.7 93.8 93.7 Effect of dilutive securities 0.4 0.3 0.3 0.2 Weighted average diluted common shares outstanding 94.3 94.0 94.1 93.9 Basic income per common share $ 1.90 $ 2.19 $ 5.93 $ 5.65 Diluted income per common share $ 1.89 $ 2.18 $ 5.91 $ 5.64 |
Other Income (Expense), Net
Other Income (Expense), Net | 9 Months Ended |
Sep. 30, 2019 | |
Other Income And Expenses [Abstract] | |
Other Expense, Net | 7 . Other Income (Expense), Net The components of other income (expense), net, were as follows (dollars in millions): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Asset disposals and write-offs (a) $ (9.5 ) $ (5.1 ) $ (18.3 ) $ (14.4 ) Wallula mill restructuring (b) — (3.7 ) (0.4 ) (11.6 ) Facilities closure and other costs (c) — (1.5 ) — (1.6 ) Insurance deductible for property damage (d) — (0.5 ) — (0.5 ) Acquisition and integration related costs (e) — (0.1 ) — (0.1 ) Other (2.2 ) 0.4 (2.8 ) (4.0 ) Total $ (11.7 ) $ (10.5 ) $ (21.5 ) $ (32.2 ) ________________ (a) For 2019, includes $3.0 million of charges for the disposal of fixed assets related to the containerboard mill conversion at our DeRidder, Louisiana mill. (b) Includes charges related to the discontinuation of production of uncoated free sheet and coated one-side grades at the Wallula, Washington mill in the second quarter of 2018 and the conversion of the No. 3 paper machine to a high-performance 100% virgin kraft linerboard machine. (c) Includes charges consisting of closure costs related to corrugated products facilities. (d) Includes charges for the property damage insurance deductible for a weather-related incident at one of our corrugated products facilities. (e) Includes charges related to recent acquisitions. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes For the three months ended September 30, 2019 and 2018, we recorded $59.5 million and $67.4 million of income tax expense and had an effective tax rate of 24.9% and 24.6%, respectively. The increase in our effective tax rate for the three months ended September 30, 2019 compared with the same period in 2018 was due to higher state and local income taxes net of the federal benefit and higher employee compensation related impacts from the elimination of the performance based compensation exclusion in tax reform. For the nine months ended September 30, 2019 and 2018, we recorded $184.4 million and $172.6 million of income tax expense and had an effective tax rate of 24.8% and 24.4%, respectively. The increase in our effective tax rate for the nine months ended September 30, 2019 compared with the same period in 2018 was due to higher state and local income taxes net of the federal benefit, higher employee compensation related impacts from restricted stock vests with a lower excess tax benefit (ASU 2016-09), and the elimination of the performance based compensation exclusion in tax reform . Our effective tax rate may differ from the federal statutory income tax rate of 21.0% due primarily to the effect of state and local income taxes. During the three and nine months ended September 30, 2019, there were no significant changes to our uncertain tax positions. For more information, see Note 7, Income Taxes, of the Notes to Consolidated Financial Statements in “Part II, Item 8. Financial Statements and Supplementary Data” of our 2018 Annual Report on Form 10-K. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | 9 . Inventories We value our raw materials, work in process, and finished goods inventories using lower of cost, as determined by the average cost method, or market. Supplies and materials are valued at the first-in, first-out (FIFO) or average cost methods. The components of inventories were as follows (dollars in millions): September 30, December 31, 2019 2018 Raw materials $ 280.2 $ 307.8 Work in process 15.8 13.9 Finished goods 215.8 199.0 Supplies and materials 294.5 274.9 Inventories $ 806.3 $ 795.6 |
Property, Plant, and Equipment
Property, Plant, and Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Property, Plant, and Equipment | 10 . Property, Plant, and Equipment The components of property, plant, and equipment were as follows (dollars in millions): September 30, December 31, 2019 2018 Land and land improvements $ 167.5 $ 161.9 Buildings 815.4 795.5 Machinery and equipment 5,672.3 5,481.6 Construction in progress 173.3 176.7 Other 77.1 75.4 Property, plant and equipment, at cost 6,905.6 6,691.1 Less accumulated depreciation (3,795.2 ) (3,582.5 ) Property, plant, and equipment, net $ 3,110.4 $ 3,108.6 Depreciation expense for the three months ended September 30, 2019 and 2018 was $87.6 million and $89.0 million, respectively. During the nine months ended September 30, 2019 and 2018, depreciation expense was $258.6 million and $275.3 million, respectively. We recognized $0.2 million and $14.0 million At September 30, 2019 and December 31, 2018, purchases of property, plant, and equipment included in accounts payable were $30.3 million and $24.7 million, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 1 1 . Goodwill and Intangible Assets Goodwill Goodwill represents the excess of the cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. At September 30, 2019 and December 31, 2018, we had $863.5 million Changes in the carrying amount of our goodwill are as follows (dollars in millions): Goodwill Balance at January 1, 2019 $ 917.3 Acquisitions (a) 1.4 Balance at September 30, 2019 $ 918.7 (a) During the nine months ended September 30, 2019, the Company recorded a $1.4 million adjustment to increase the goodwill balance for the Company’s October 2018 acquisition of Englander. Intangible Assets Intangible assets are primarily comprised of customer relationships and trademarks and trade names. The weighted average remaining useful life, gross carrying amount, and accumulated amortization of our intangible assets were as follows (dollars in millions): September 30, 2019 December 31, 2018 Weighted Average Remaining Useful Life (in Years) Gross Carrying Amount Accumulated Amortization Weighted Average Remaining Useful Life (in Years) Gross Carrying Amount Accumulated Amortization Customer relationships (b) 10.2 $ 503.8 $ 171.3 10.9 $ 504.6 $ 144.5 Trademarks and trade names 9.6 34.8 19.9 10.1 34.8 18.3 Other 2.3 4.3 3.2 3.0 4.3 2.7 Total intangible assets (excluding goodwill) 10.1 $ 542.9 $ 194.4 10.8 $ 543.7 $ 165.5 (b) During the second quarter ended June 30, 2019, a corrugated products facility sold During the three months ended September 30, 2019 and 2018, amortization expense was $9.7 million and $10.2 million, respectively. During the nine months ended September 30, 2019 and 2018, amortization expense was $28.9 million |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Accrued Liabilities Current And Noncurrent [Abstract] | |
Accrued Liabilities | 1 2 . Accrued Liabilities The components of accrued liabilities were as follows (dollars in millions): September 30, December 31, 2019 2018 Compensation and benefits $ 121.7 $ 136.7 Customer volume discounts and rebates 27.4 25.2 Medical insurance and workers’ compensation 26.9 27.5 Franchise, property, sales and use taxes 25.2 13.4 Environmental liabilities and asset retirement obligations 5.3 5.0 Severance, retention, and relocation 3.5 2.2 Other 10.1 12.4 Total $ 220.1 $ 222.4 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | 1 3 . Debt For the nine months ended September 30, 2019 and 2018, cash payments for interest were $53.4 million and $58.6 million, respectively. Included in interest expense, net are amortization of treasury lock settlements and amortization of financing costs. For both the three months ended September 30, 2019 and 2018, amortization of treasury lock settlements was $1.3 million, and for the nine months ended September 30, 2019 and 2018, amortization of treasury locks was $3.9 million At September 30, 2019, we had $2,496.8 million of fixed-rate senior notes outstanding. The fair value of our fixed-rate debt was estimated to be $2,607.0 million. The difference between the book value and fair value is due to the difference between the period-end market interest rate and the stated rate of our fixed-rate debt. We estimated the fair value of our fixed-rate debt using quoted market prices (Level 2 inputs) within the fair value hierarchy, which is further defined in Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our 2018 Annual Report on Form 10-K. For more information on our long-term debt and interest rates on that debt, see Note 10, Debt, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our 2018 Annual Report on Form 10-K. |
Employee Benefit Plans and Othe
Employee Benefit Plans and Other Postretirement Benefits | 9 Months Ended |
Sep. 30, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans and Other Postretirement Benefits | 1 4 . Employee Benefit Plans and Other Postretirement Benefits The components of net periodic benefit cost for our pension plans were as follows (dollars in millions): Pension Plans Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Service cost $ 6.1 $ 6.3 $ 18.4 $ 18.8 Interest cost 11.7 10.6 35.2 31.8 Expected return on plan assets (13.0 ) (14.2 ) (39.1 ) (42.5 ) Net amortization of unrecognized amounts Prior service cost 1.6 1.8 4.7 5.2 Actuarial loss 1.7 2.3 5.3 7.0 Net periodic benefit cost $ 8.1 $ 6.8 $ 24.5 $ 20.3 PCA makes pension plan contributions that are sufficient to fund its actuarially determined costs, generally equal to the minimum amounts required by the Employee Retirement Income Security Act (ERISA). From time to time, PCA may make additional discretionary contributions based on the funded status of the plans, tax deductibility, income from operations, and other factors. During the three and nine months ended September 30, 2019 and 2018, payments to our nonqualified pension plans were insignificant. For the three and nine months ended September 30, 2019, we made contributions of $49.4 million and $54.0 million, respectively, to our qualified pension plans. We made contributions of $18.0 million and $21.2 million For the three and nine months ended September 30, 2019 and 2018, the net periodic benefit cost for our postretirement plans was insignificant. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share Based Compensation [Abstract] | |
Share-Based Compensation | 1 5 . Share-Based Compensation The Company has a long-term equity incentive plan, which allows for grants of restricted stock, performance awards, stock appreciation rights, and stock options to directors, officers, and employees, as well as others who engage in services for PCA. The plan, as amended, terminates May 1, 2023 and authorizes 10.6 million . The following table presents restricted stock and performance unit award activity for the nine months ended September 30, 2019: Restricted Stock Performance Units Shares Weighted Average Grant- Date Fair Value Shares Weighted Average Grant- Date Fair Value Outstanding at January 1, 2019 743,591 $ 86.90 266,704 $ 90.01 Granted 199,185 95.45 115,608 96.98 Vested (209,687 ) 68.21 (59,165 ) 67.84 Forfeitures (8,836 ) 100.69 — — Outstanding at September 30, 2019 724,253 $ 94.50 323,147 $ 96.56 Compensation Expense Our share-based compensation expense is recorded in "Selling, general, and administrative expenses." Compensation expense for share-based awards recognized in the Consolidated Statements of Income, net of forfeitures, was as follows (dollars in millions): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Restricted stock $ 3.5 $ 4.9 $ 19.1 $ 13.9 Performance units 2.4 1.7 5.4 3.5 Total share-based compensation expense 5.9 6.6 24.5 17.4 Income tax benefit (1.5 ) (1.6 ) (6.2 ) (4.4 ) Share-based compensation expense, net of tax benefit $ 4.4 $ 5.0 $ 18.3 $ 13.0 The fair value of restricted stock is determined based on the closing price of the Company’s stock on the grant date. Compensation expense, net of estimated forfeitures, is recorded over the requisite service period. As PCA’s Board of Directors has the ability to accelerate the vesting of these awards upon an employee’s retirement, the Company accelerates the recognition of compensation expense for certain employees approaching normal retirement age. Performance unit awards are earned based on the achievement of defined performance rankings of Return on Invested Capital (ROIC) or Total Shareholder Return (TSR) compared to ROIC and TSR for peer companies. For performance unit awards made in 2019 and 2018, in terms of grant date value, 50% used TSR as the performance measure and 50% used ROIC as the performance measure. The ROIC component of performance unit awards is valued based on the closing price of the stock on the grant date. As the ROIC component contains a performance condition, compensation expense, net of estimated forfeitures, is recorded over the requisite service period based on the most probable number of awards expected to vest. The TSR component of performance unit awards is valued using a Monte Carlo simulation as the TSR component contains a market condition. The Monte Carlo simulation estimates the fair value of the TSR component based on the expected term of the award, a risk-free interest rate, expected dividends, and expected volatility of the Company’s common stock and the common stock of the peer companies. Compensation expense is recorded ratably over the expected term of the award. The unrecognized compensation expense for all share-based awards at September 30, 2019 was as follows (dollars in millions): September 30, 2019 Unrecognized Compensation Expense Remaining Weighted Average Recognition Period (in years) Restricted stock $ 31.0 3.0 Performance units 19.4 2.6 Total unrecognized share-based compensation expense $ 50.4 2.9 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 1 6 . Stockholders' Equity Dividends During the nine months ended September 30, 2019, we paid $223.9 million of dividends to shareholders. On August 20, 2019, PCA’s Board of Directors declared a regular quarterly cash dividend of $0.79 per share of common stock, which was paid on October 15, 2019 to shareholders of record as of September 13, 2019. The dividend payment was Repurchases of Common Stock On February 25, 2016, PCA announced that its Board of Directors authorized the repurchase of $200.0 million of the Company’s outstanding common stock. Repurchases may be made from time to time in open market or privately negotiated transactions in accordance with applicable securities regulations. The timing and amount of repurchases will be determined by the Company in its discretion based on factors such as PCA’s stock price and market and business conditions. The Company did not repurchase any shares of its common stock under this authority during the three and nine months ended September 30, 2019. At September 30, 2019, $193.0 million of the authorized amount remained available for repurchase of the Company’s common stock. Accumulated Other Comprehensive Income (Loss) Changes in accumulated other comprehensive income (loss) (AOCI) by component were as follows (dollars in millions). Amounts in parentheses indicate losses: Foreign Currency Translation Adjustments Unrealized Loss On Treasury Locks, Net Unrealized Loss on Foreign Exchange Contracts Unfunded Employee Benefit Obligations Total Balance at January 1, 2019 $ (0.4 ) $ (10.2 ) $ (0.3 ) $ (127.9 ) $ (138.8 ) Amounts reclassified from AOCI, net of tax — 2.9 — 7.1 10.0 Balance at September 30, 2019 $ (0.4 ) $ (7.3 ) $ (0.3 ) $ (120.8 ) $ (128.8 ) Reclassifications out of AOCI were as follows (dollars in millions). Amounts in parentheses indicate expenses in the Consolidated Statements of Income: Amounts Reclassified from AOCI Three Months Ended September 30, Nine Months Ended September 30, Details about AOCI Components 2019 2018 2019 2018 Unrealized loss on treasury locks, net (a) $ (1.3 ) $ (1.3 ) $ (3.9 ) $ (4.0 ) See (a) below 0.3 0.3 1.0 1.0 Tax benefit $ (1.0 ) $ (1.0 ) $ (2.9 ) $ (3.0 ) Net of tax Unfunded employee benefit obligations (b) Amortization of prior service costs $ (1.5 ) $ (1.7 ) $ (4.5 ) $ (5.0 ) See (b) below Amortization of actuarial gains / (losses) (1.7 ) (2.3 ) (5.0 ) (6.9 ) See (b) below (3.2 ) (4.0 ) (9.5 ) (11.9 ) Total before tax 0.8 1.0 2.4 3.0 Tax benefit $ (2.4 ) $ (3.0 ) $ (7.1 ) $ (8.9 ) Net of tax (a) This AOCI component is included in interest expense, net. Amount relates to the amortization of the effective portion of treasury lock derivative instruments recorded in AOCI. The net amount of settlement gains or losses on derivative instruments included in AOCI to be amortized over the next 12 months is a net loss of $5.2 million ($3.9 million after tax). For a discussion of treasury lock derivative instrument activity, see Note 14, Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our 2018 Annual Report on Form 10-K. (b) These AOCI components are included in the computation of net pension and postretirement benefit costs. See Note 14, Employee Benefit Plans and Other Postretirement Benefits, for additional information. |
Concentrations of Risk
Concentrations of Risk | 9 Months Ended |
Sep. 30, 2019 | |
Risks And Uncertainties [Abstract] | |
Concentration of Risk | 1 7 . Concentrations of Risk Our Paper segment has a long-standing commercial and contractual relationship with Office Depot, our largest customer in the paper business. This relationship exposes us to a significant concentration of business and financial risk. Our sales to Office Depot represent approximately 7% of our total Company sales revenue for both the nine month periods ended September 30, 2019 and 2018 and approximately |
Transactions With Related Parti
Transactions With Related Parties | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Transactions With Related Parties | 18 . Transactions With Related Parties Louisiana Timber Procurement Company, L.L.C. (LTP) is a variable-interest entity that is 50% owned by PCA and 50% owned by Boise Cascade Company (Boise Cascade). LTP procures sawtimber, pulpwood, residual chips, and other residual wood fiber to meet the wood and fiber requirements of PCA and Boise Cascade in Louisiana. PCA is the primary beneficiary of LTP and has the power to direct the activities that most significantly affect the economic performance of LTP. Therefore, we consolidate 100% of LTP in our financial statements in our Corporate and Other segment. The carrying amounts of LTP's assets and liabilities (which relate primarily to non-inventory working capital items) on our Consolidated Balance Sheets were $5.1 million During the three months ended September 30, 2019 and 2018, fiber purchases from related parties were $4.4 million and $4.1 million , |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | 1 9 . Segment Information We report our business in three reportable segments: Packaging, Paper, and Corporate and Other. 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. Each segment’s profits and losses are measured on operating profits before interest expense, net, non-operating pension expense, and income taxes. For certain allocated expenses, the related assets and liabilities remain in the Corporate and Other segment. Selected financial information by reportable segment was as follows (dollars in millions): Sales, net Three Months Ended September 30, 2019 Trade Intersegment Total Operating Income (Loss) Packaging $ 1,482.9 $ 7.0 $ 1,489.9 $ 235.1 (a) Paper 242.8 — 242.8 48.1 Corporate and Other 25.0 34.0 59.0 (20.4 ) Intersegment eliminations — (41.0 ) (41.0 ) — $ 1,750.7 $ — $ 1,750.7 262.8 Non-operating pension expense (1.9 ) Interest expense, net (21.6 ) Income before taxes $ 239.3 Sales, net Three Months Ended September 30, 2018 Trade Intersegment Total Operating Income (Loss) Packaging $ 1,528.3 $ 6.8 $ 1,535.1 $ 284.4 (c) Paper 254.3 — 254.3 32.3 (c) Corporate and Other 27.3 32.3 59.6 (18.2 ) (c) Intersegment eliminations — (39.1 ) (39.1 ) — $ 1,809.9 $ — $ 1,809.9 298.5 Non-operating pension expense (0.5 ) Interest expense, net (23.9 ) Income before taxes $ 274.1 Sales, net Nine Months Ended September 30, 2019 Trade Intersegment Total Operating Income (Loss) Packaging $ 4,451.5 $ 20.6 $ 4,472.1 $ 748.6 (a)(b) Paper 720.3 — 720.3 132.5 Corporate and Other 72.5 98.9 171.4 (62.5 ) Intersegment eliminations — (119.5 ) (119.5 ) — $ 5,244.3 $ — $ 5,244.3 818.6 Non-operating pension expense (6.0 ) Interest expense, net (68.0 ) Income before taxes $ 744.6 Sales, net Nine Months Ended September 30, 2018 Trade Intersegment Total Operating Income (Loss) Packaging $ 4,414.7 $ 19.5 $ 4,434.2 $ 782.3 (c) Paper 774.5 — 774.5 55.7 (c) Corporate and Other 78.9 94.9 173.8 (57.0 ) (c) Intersegment eliminations — (114.4 ) (114.4 ) — $ 5,268.1 $ — $ 5,268.1 781.0 Non-operating pension expense (1.6 ) Interest expense, net (73.4 ) Income before taxes $ 706.0 (a) The three and nine months ended September 30, 2019 include $3.0 million of charges for the disposal of fixed assets related to the containerboard mill conversion at our DeRidder, Louisiana mill. (b) The nine months ended September 30, 2019 include $0.6 million of charges related to the announced second quarter 2018 discontinuation of uncoated free sheet and coated one-side grades at the Wallula, Washington mill associated with the conversion of the No. 3 paper machine to a high-performance 100% virgin kraft linerboard machine. (c ) The three and nine months ended September 30, 2018 include the following: 1. $4.0 million and $26.4 million, respectively, of charges related to the second quarter 2018 discontinuation of uncoated free sheet and coated one-side grades at the Wallula, Washington mill associated with the conversion of the No. 3 paper machine to a high-performance 100% virgin kraft linerboard machine. 2. $1.3 million and $1.8 million, respectively, of charges consisting of closure costs related to corrugated products facilities and a corporate administration facility. 3. $0.5 4. $0.1 million of charges related to recent acquisitions. |
Commitments, Guarantees, Indemn
Commitments, Guarantees, Indemnifications and Legal Proceedings | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments, Guarantees, Indemnifications and Legal Proceedings | 20 . Commitments, Guarantees, Indemnifications and Legal Proceedings We have financial commitments and obligations that arise in the ordinary course of our business. These include long-term debt, capital commitments, lease obligations, and purchase commitments for goods and services, and legal proceedings, all of which are discussed in Note 10, Debt, and Note 19, Commitments, Guarantees, Indemnifications, and Legal Proceedings, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our 2018 Annual Report on Form 10-K. Guarantees and Indemnifications We provide guarantees, indemnifications, and other assurances to third parties in the normal course of our business. These include tort indemnifications, product guarantees, environmental assurances, and representations and warranties in commercial agreements. At September 30, 2019, we are not aware of any material liabilities arising from any guarantee, indemnification, or financial assurance we have provided. If we determined such a liability was probable and subject to reasonable determination, we would accrue for it at that time. DeRidder Mill Incident On February 8, 2017, a tank located in the pulp mill at the Company's DeRidder, Louisiana facility exploded, resulting in three contractor fatalities and other injuries. The Company has been served with multiple lawsuits involving the decedents and other allegedly injured parties, alleging negligence on the part of the Company and claiming compensatory and punitive damages. The Company is vigorously defending these lawsuits. The Company believes that these suits are covered by its liability insurance policies, subject to an aggregate $1.0 million deductible. The incident remains under investigation and all lawsuits are in the early stages. Accordingly, the Company is unable to estimate a range of reasonable possible losses at this time. The Company has also incurred property damage and business interruption losses and has claimed these losses, subject to a $5.0 million deductible, under its property damage and business interruption insurance policy. As of December 31, 2017, the Company finalized the claim with the insurance carrier and received $17.0 million in insurance proceeds during the first quarter of 2018. The insurance proceeds are included in net cash provided by operating activities ($14.5 million) and in net cash used for investing activities ($2.5 million) based on the nature of the reimbursement. The Company has cooperated with investigations from the U.S. Occupational Health and Safety Administration (OSHA), the U.S. Chemical Safety Board (CSB) and the U.S. Environmental Protection Agency (EPA). The U.S. Chemical Safety Board completed its investigation and issued its report during the second quarter of 2018. The Company settled with OSHA during the second quarter of 2018 and paid approximately $40,000 in penalties for citations. The EPA investigation is ongoing. Environmental Matters On August 8, 2019, the EPA issued a notice of violation (NOV) alleging violations of the Clean Air Act, resulting from an inspection of our Wallula, Washington mill in September 2018. The EPA has agreed to discuss the matters involved in the NOV with the Company prior to taking enforcement action and such discussions are ongoing. While we cannot predict with certainty the ultimate resolution of this matter, we believe that we have taken appropriate action to address the matters raised by the EPA in the NOV and that this matter will not result in a material adverse effect on our financial condition, results of operations or cash flows. Legal Proceedings We are also a party to various legal actions arising in the ordinary course of our business. These legal actions include commercial liability claims, premises liability claims, and employment-related claims, among others. As of the date of this filing, we believe it is not reasonably possible that any of the legal actions against us will, either individually or in the aggregate, have a material adverse effect on our financial condition, results of operations, or cash flows. |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Accounting and Presentation | The consolidated financial statements of PCA as September 30, 2019 and for the three and nine months ended September 30, 2019 and 2018 are unaudited but include all adjustments (consisting only of normal recurring adjustments) that management considers necessary for a fair presentation of such financial statements.These financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with Article 10 of Regulation S-X of the Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete audited financial statements. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. These consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2018. |
Use of Estimates | The preparation of the consolidated financial statements involves the use of estimates and accruals. Actual results may vary from those estimates. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Effective January 1, 2019, the Company adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02 (Topic 842): Leases , which requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The original guidance required application on a modified retrospective basis with the earliest period presented. In July 2018, the FASB issued ASU 2018-11, Targeted Improvements to ASC 842 , which included an option to not restate comparative periods in transition and elect to use the effective date of ASC 842, Leases , as the date of initial application of transition, which we elected. As a result of the adoption of ASC 842 on January 1, 2019, we recorded operating lease liabilities of $228 million, with corresponding right of use (“ROU”) assets of the same amount. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed us to carry forward the historical lease classification and not to reassess whether existing or expired contracts contain a lease. We also elected the short-term lease recognition exemption, which permits us to exclude short-term leases (i.e. leases with terms of 12 months or less) from the recognition requirements of this standard, and we elected to account for lease and non-lease components as a single lease component for all classes of underlying assets except for embedded leases. The adoption of ASC 842 had an immaterial impact on our consolidated net earnings, liquidity and debt covenants under our current agreements for the three- and nine-month periods ended September 30, 2019. See Note 3, Leases, for more information. Effective January 1, 2019, we adopted ASU 2018-02 (Topic 220 ): Income Statement—Reporting Comprehensive Income – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income |
New Accounting Standards Not Yet Adopted | New Accounting Standards Not Yet Adopted In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which includes amendments to align the accounting for costs incurred to implement a cloud computing arrangement that is a service contract with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The accounting for the service component of a hosting arrangement that is a service contract is not affected by the amendments in this update. The ASU is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance. In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans . ASU 2018-14 removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and adds additional disclosures. The ASU is effective for annual periods beginning after December 31, 2020 , with early adoption permitted. The amendments in ASU 2018-14 would need to be applied o n a retrospective basis. The Company is currently evaluating the impact this guidance will have on its related disclosures . In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The Company is currently evaluating the impact of the new guidance. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments. ASU 2016-13 introduces the Current Expected Credit Losses (“CECL”) framework for evaluating credit losses on financial instruments measured at amortized cost. This new framework requires entities to incorporate forward-looking information into their estimate of current expected credit loss as of each reporting date. Although available-for-sale (“AFS”) debt securities are not within the scope of the new CECL framework, the ASU includes an amended impairment model for evaluating losses related to AFS debt securities. The guidance in this update also includes enhanced requirements for disclosures related to credit loss estimates. The ASU is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. The amendments in ASU 2016-13 would need to be applied using the modified retrospective method. The Company is currently evaluating the impact of the new guidance but does not expect this ASU to have a material impact on the Company’s financial position, results of operation, or cash flow. There were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations. |
Revenue Recognition | Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration expected to be received in exchange for those goods or services. Sales, value added, and other taxes collected concurrently with revenue-producing activities are excluded from revenue. The following table presents our revenues disaggregated by product line (dollars in millions): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Packaging $ 1,489.9 $ 1,535.1 $ 4,472.1 $ 4,434.2 Paper 242.8 254.3 720.3 774.5 Corporate and Other 18.0 20.5 51.9 59.4 Total revenue $ 1,750.7 $ 1,809.9 $ 5,244.3 $ 5,268.1 |
Inventory Valuation | We value our raw materials, work in process, and finished goods inventories using lower of cost, as determined by the average cost method, or market. Supplies and materials are valued at the first-in, first-out (FIFO) or average cost methods. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to our leases was as follows (dollars in millions): September 30, 2019 Operating leases: Operating lease right-of-use assets $ 232.3 Current portion of operating lease obligations $ 60.4 Long-term portion of operating lease obligations 177.3 Total operating lease obligations $ 237.7 Finance leases: Buildings $ 0.3 Machinery and equipment 28.5 Total 28.8 Less accumulated amortization (17.8 ) Total $ 11.0 Current portion of finance lease obligations $ 1.5 Long-term portion of finance lease obligations 16.4 Total finance lease obligations $ 17.9 Weighted-average remaining lease term (years): Operating leases 5.8 Finance leases 9.0 Weighted-average discount rate: Operating leases 4.33% Finance leases 6.66% |
Components of Lease Expense | The components of lease expense were as follows (dollars in millions): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Finance lease cost: Amortization of finance lease assets $ 0.4 $ 1.1 Interest on lease liabilities 0.3 0.9 Total finance lease cost 0.7 2.0 Operating lease cost 17.6 52.3 Short-term lease cost 4.4 15.1 Variable lease cost 3.2 13.0 Total lease cost $ 25.9 $ 82.4 |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows (dollars in millions): Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ (44.6 ) Operating cash flows for finance leases (1.1 ) Financing cash flows for finance leases (0.9 ) Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ (20.5 ) Finance leases — Supplemental non-cash information on changes in lease liabilities $ 33.8 Supplemental non-cash information on changes in right-of-use assets $ 16.2 |
Schedule of Maturities of Lease Liabilities for Operating and Finance Leases | The maturities of lease liabilities for operating and finance leases at September 30, 2019 were as follows (dollars in millions): Operating Leases Finance Leases 2019 $ 18.1 $ 0.7 2020 66.9 2.7 2021 56.6 2.7 2022 39.2 2.7 2023 25.4 2.7 Thereafter 63.8 12.4 Total lease payments 270.0 23.9 Less imputed interest (a) (32.3 ) (6.0 ) Present value of lease liabilities $ 237.7 $ 17.9 (a) Calculated using the incremental borrowing rate for each lease applied to the future payments. |
Schedule of Maturities of Lease Liabilities Under ASU 840 | The maturities of lease liabilities at December 31, 2018 under ASC 840 were as follows (dollars in millions): Operating Leases Finance Leases 2019 $ 70.1 $ 2.7 2020 58.7 2.7 2021 47.4 2.7 2022 29.9 2.7 2023 17.8 2.7 Thereafter 46.4 12.4 Total lease payments $ 270.3 25.9 Less imputed interest (b) (6.9 ) Present value of lease liabilities $ 19.0 (b) Calculated using the incremental borrowing rate for each lease applied to the future payments. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Revenues Disaggregated by Product Line | The following table presents our revenues disaggregated by product line (dollars in millions): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Packaging $ 1,489.9 $ 1,535.1 $ 4,472.1 $ 4,434.2 Paper 242.8 254.3 720.3 774.5 Corporate and Other 18.0 20.5 51.9 59.4 Total revenue $ 1,750.7 $ 1,809.9 $ 5,244.3 $ 5,268.1 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Income Per Common Share | The following table sets forth the computation of basic and diluted income per common share for the periods presented (dollars and shares in millions, except per share data): Three Months Ended Nine Months Ended September 30, September 30, Numerator: 2019 2018 2019 2018 Net income $ 179.8 $ 206.7 $ 560.2 $ 533.4 Less: Distributed and undistributed earnings allocated to participating securities (1.3 ) (1.6 ) (4.2 ) (4.1 ) Net income attributable to common shareholders $ 178.5 $ 205.1 $ 556.0 $ 529.3 Denominator: Weighted average basic common shares outstanding 93.9 93.7 93.8 93.7 Effect of dilutive securities 0.4 0.3 0.3 0.2 Weighted average diluted common shares outstanding 94.3 94.0 94.1 93.9 Basic income per common share $ 1.90 $ 2.19 $ 5.93 $ 5.65 Diluted income per common share $ 1.89 $ 2.18 $ 5.91 $ 5.64 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Other Income And Expenses [Abstract] | |
Components of Other Income (Expense), Net | The components of other income (expense), net, were as follows (dollars in millions): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Asset disposals and write-offs (a) $ (9.5 ) $ (5.1 ) $ (18.3 ) $ (14.4 ) Wallula mill restructuring (b) — (3.7 ) (0.4 ) (11.6 ) Facilities closure and other costs (c) — (1.5 ) — (1.6 ) Insurance deductible for property damage (d) — (0.5 ) — (0.5 ) Acquisition and integration related costs (e) — (0.1 ) — (0.1 ) Other (2.2 ) 0.4 (2.8 ) (4.0 ) Total $ (11.7 ) $ (10.5 ) $ (21.5 ) $ (32.2 ) ________________ (a) For 2019, includes $3.0 million of charges for the disposal of fixed assets related to the containerboard mill conversion at our DeRidder, Louisiana mill. (b) Includes charges related to the discontinuation of production of uncoated free sheet and coated one-side grades at the Wallula, Washington mill in the second quarter of 2018 and the conversion of the No. 3 paper machine to a high-performance 100% virgin kraft linerboard machine. (c) Includes charges consisting of closure costs related to corrugated products facilities. (d) Includes charges for the property damage insurance deductible for a weather-related incident at one of our corrugated products facilities. (e) Includes charges related to recent acquisitions. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The components of inventories were as follows (dollars in millions): September 30, December 31, 2019 2018 Raw materials $ 280.2 $ 307.8 Work in process 15.8 13.9 Finished goods 215.8 199.0 Supplies and materials 294.5 274.9 Inventories $ 806.3 $ 795.6 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Components of Property, Plant, and Equipment | The components of property, plant, and equipment were as follows (dollars in millions): September 30, December 31, 2019 2018 Land and land improvements $ 167.5 $ 161.9 Buildings 815.4 795.5 Machinery and equipment 5,672.3 5,481.6 Construction in progress 173.3 176.7 Other 77.1 75.4 Property, plant and equipment, at cost 6,905.6 6,691.1 Less accumulated depreciation (3,795.2 ) (3,582.5 ) Property, plant, and equipment, net $ 3,110.4 $ 3,108.6 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying amount of our goodwill are as follows (dollars in millions): Goodwill Balance at January 1, 2019 $ 917.3 Acquisitions (a) 1.4 Balance at September 30, 2019 $ 918.7 (a) During the nine months ended September 30, 2019, the Company recorded a $1.4 million adjustment to increase the goodwill balance for the Company’s October 2018 acquisition of Englander. |
Components of Intangible Assets | The weighted average remaining useful life, gross carrying amount, and accumulated amortization of our intangible assets were as follows (dollars in millions): September 30, 2019 December 31, 2018 Weighted Average Remaining Useful Life (in Years) Gross Carrying Amount Accumulated Amortization Weighted Average Remaining Useful Life (in Years) Gross Carrying Amount Accumulated Amortization Customer relationships (b) 10.2 $ 503.8 $ 171.3 10.9 $ 504.6 $ 144.5 Trademarks and trade names 9.6 34.8 19.9 10.1 34.8 18.3 Other 2.3 4.3 3.2 3.0 4.3 2.7 Total intangible assets (excluding goodwill) 10.1 $ 542.9 $ 194.4 10.8 $ 543.7 $ 165.5 (b) During the second quarter ended June 30, 2019, a corrugated products facility sold |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accrued Liabilities Current And Noncurrent [Abstract] | |
Components of Accrued Liabilities | The components of accrued liabilities were as follows (dollars in millions): September 30, December 31, 2019 2018 Compensation and benefits $ 121.7 $ 136.7 Customer volume discounts and rebates 27.4 25.2 Medical insurance and workers’ compensation 26.9 27.5 Franchise, property, sales and use taxes 25.2 13.4 Environmental liabilities and asset retirement obligations 5.3 5.0 Severance, retention, and relocation 3.5 2.2 Other 10.1 12.4 Total $ 220.1 $ 222.4 |
Employee Benefit Plans and Ot_2
Employee Benefit Plans and Other Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Net Periodic Benefit Costs | The components of net periodic benefit cost for our pension plans were as follows (dollars in millions): Pension Plans Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Service cost $ 6.1 $ 6.3 $ 18.4 $ 18.8 Interest cost 11.7 10.6 35.2 31.8 Expected return on plan assets (13.0 ) (14.2 ) (39.1 ) (42.5 ) Net amortization of unrecognized amounts Prior service cost 1.6 1.8 4.7 5.2 Actuarial loss 1.7 2.3 5.3 7.0 Net periodic benefit cost $ 8.1 $ 6.8 $ 24.5 $ 20.3 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share Based Compensation [Abstract] | |
Summary of Restricted Stock and Performance Unit Award Activity | The following table presents restricted stock and performance unit award activity for the nine months ended September 30, 2019: Restricted Stock Performance Units Shares Weighted Average Grant- Date Fair Value Shares Weighted Average Grant- Date Fair Value Outstanding at January 1, 2019 743,591 $ 86.90 266,704 $ 90.01 Granted 199,185 95.45 115,608 96.98 Vested (209,687 ) 68.21 (59,165 ) 67.84 Forfeitures (8,836 ) 100.69 — — Outstanding at September 30, 2019 724,253 $ 94.50 323,147 $ 96.56 |
Compensation Expense for Share-Based Awards | Our share-based compensation expense is recorded in "Selling, general, and administrative expenses." Compensation expense for share-based awards recognized in the Consolidated Statements of Income, net of forfeitures, was as follows (dollars in millions): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Restricted stock $ 3.5 $ 4.9 $ 19.1 $ 13.9 Performance units 2.4 1.7 5.4 3.5 Total share-based compensation expense 5.9 6.6 24.5 17.4 Income tax benefit (1.5 ) (1.6 ) (6.2 ) (4.4 ) Share-based compensation expense, net of tax benefit $ 4.4 $ 5.0 $ 18.3 $ 13.0 |
Unrecognized Compensation Expense for Share-Based Awards | The unrecognized compensation expense for all share-based awards at September 30, 2019 was as follows (dollars in millions): September 30, 2019 Unrecognized Compensation Expense Remaining Weighted Average Recognition Period (in years) Restricted stock $ 31.0 3.0 Performance units 19.4 2.6 Total unrecognized share-based compensation expense $ 50.4 2.9 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Components of Changes in Accumulated Other Comprehensive Income (AOCI) | Changes in accumulated other comprehensive income (loss) (AOCI) by component were as follows (dollars in millions). Amounts in parentheses indicate losses: Foreign Currency Translation Adjustments Unrealized Loss On Treasury Locks, Net Unrealized Loss on Foreign Exchange Contracts Unfunded Employee Benefit Obligations Total Balance at January 1, 2019 $ (0.4 ) $ (10.2 ) $ (0.3 ) $ (127.9 ) $ (138.8 ) Amounts reclassified from AOCI, net of tax — 2.9 — 7.1 10.0 Balance at September 30, 2019 $ (0.4 ) $ (7.3 ) $ (0.3 ) $ (120.8 ) $ (128.8 ) |
Reclassifications Out of Accumulated Other Comprehensive Income (AOCI) | Reclassifications out of AOCI were as follows (dollars in millions). Amounts in parentheses indicate expenses in the Consolidated Statements of Income: Amounts Reclassified from AOCI Three Months Ended September 30, Nine Months Ended September 30, Details about AOCI Components 2019 2018 2019 2018 Unrealized loss on treasury locks, net (a) $ (1.3 ) $ (1.3 ) $ (3.9 ) $ (4.0 ) See (a) below 0.3 0.3 1.0 1.0 Tax benefit $ (1.0 ) $ (1.0 ) $ (2.9 ) $ (3.0 ) Net of tax Unfunded employee benefit obligations (b) Amortization of prior service costs $ (1.5 ) $ (1.7 ) $ (4.5 ) $ (5.0 ) See (b) below Amortization of actuarial gains / (losses) (1.7 ) (2.3 ) (5.0 ) (6.9 ) See (b) below (3.2 ) (4.0 ) (9.5 ) (11.9 ) Total before tax 0.8 1.0 2.4 3.0 Tax benefit $ (2.4 ) $ (3.0 ) $ (7.1 ) $ (8.9 ) Net of tax (a) This AOCI component is included in interest expense, net. Amount relates to the amortization of the effective portion of treasury lock derivative instruments recorded in AOCI. The net amount of settlement gains or losses on derivative instruments included in AOCI to be amortized over the next 12 months is a net loss of $5.2 million ($3.9 million after tax). For a discussion of treasury lock derivative instrument activity, see Note 14, Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our 2018 Annual Report on Form 10-K. (b) These AOCI components are included in the computation of net pension and postretirement benefit costs. See Note 14, Employee Benefit Plans and Other Postretirement Benefits, for additional information. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Selected Financial Information by Reportable Segment | Selected financial information by reportable segment was as follows (dollars in millions): Sales, net Three Months Ended September 30, 2019 Trade Intersegment Total Operating Income (Loss) Packaging $ 1,482.9 $ 7.0 $ 1,489.9 $ 235.1 (a) Paper 242.8 — 242.8 48.1 Corporate and Other 25.0 34.0 59.0 (20.4 ) Intersegment eliminations — (41.0 ) (41.0 ) — $ 1,750.7 $ — $ 1,750.7 262.8 Non-operating pension expense (1.9 ) Interest expense, net (21.6 ) Income before taxes $ 239.3 Sales, net Three Months Ended September 30, 2018 Trade Intersegment Total Operating Income (Loss) Packaging $ 1,528.3 $ 6.8 $ 1,535.1 $ 284.4 (c) Paper 254.3 — 254.3 32.3 (c) Corporate and Other 27.3 32.3 59.6 (18.2 ) (c) Intersegment eliminations — (39.1 ) (39.1 ) — $ 1,809.9 $ — $ 1,809.9 298.5 Non-operating pension expense (0.5 ) Interest expense, net (23.9 ) Income before taxes $ 274.1 Sales, net Nine Months Ended September 30, 2019 Trade Intersegment Total Operating Income (Loss) Packaging $ 4,451.5 $ 20.6 $ 4,472.1 $ 748.6 (a)(b) Paper 720.3 — 720.3 132.5 Corporate and Other 72.5 98.9 171.4 (62.5 ) Intersegment eliminations — (119.5 ) (119.5 ) — $ 5,244.3 $ — $ 5,244.3 818.6 Non-operating pension expense (6.0 ) Interest expense, net (68.0 ) Income before taxes $ 744.6 Sales, net Nine Months Ended September 30, 2018 Trade Intersegment Total Operating Income (Loss) Packaging $ 4,414.7 $ 19.5 $ 4,434.2 $ 782.3 (c) Paper 774.5 — 774.5 55.7 (c) Corporate and Other 78.9 94.9 173.8 (57.0 ) (c) Intersegment eliminations — (114.4 ) (114.4 ) — $ 5,268.1 $ — $ 5,268.1 781.0 Non-operating pension expense (1.6 ) Interest expense, net (73.4 ) Income before taxes $ 706.0 (a) The three and nine months ended September 30, 2019 include $3.0 million of charges for the disposal of fixed assets related to the containerboard mill conversion at our DeRidder, Louisiana mill. (b) The nine months ended September 30, 2019 include $0.6 million of charges related to the announced second quarter 2018 discontinuation of uncoated free sheet and coated one-side grades at the Wallula, Washington mill associated with the conversion of the No. 3 paper machine to a high-performance 100% virgin kraft linerboard machine. (c ) The three and nine months ended September 30, 2018 include the following: 1. $4.0 million and $26.4 million, respectively, of charges related to the second quarter 2018 discontinuation of uncoated free sheet and coated one-side grades at the Wallula, Washington mill associated with the conversion of the No. 3 paper machine to a high-performance 100% virgin kraft linerboard machine. 2. $1.3 million and $1.8 million, respectively, of charges consisting of closure costs related to corrugated products facilities and a corporate administration facility. 3. $0.5 4. $0.1 million of charges related to recent acquisitions. |
Nature of Operations and Basi_3
Nature of Operations and Basis of Presentation - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2019Segment | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Date of incorporation | Jan. 25, 1999 |
Number of reportable segments | 3 |
Leases - Additional Information
Leases - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2019Lease | |
Leases [Line Items] | |
Lease term | 12 months |
Number of leases | 2 |
Minimum | Real Estate Leases | |
Leases [Line Items] | |
Lease renewal term | 1 year |
Maximum | Real Estate Leases | |
Leases [Line Items] | |
Lease renewal term | 5 years |
Schedule of Supplemental Balanc
Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Operating leases: | ||
Operating lease right-of-use assets | $ 232.3 | |
Current portion of operating lease obligations | 60.4 | |
Long-term portion of operating lease obligations | 177.3 | |
Total operating lease obligations | 237.7 | |
Finance leases: | ||
Total | 6,905.6 | $ 6,691.1 |
Less accumulated amortization | (3,795.2) | (3,582.5) |
Total | 3,110.4 | 3,108.6 |
Current portion of finance lease obligations | 1.5 | 1.4 |
Long-term portion of finance lease obligations | 16.4 | 17.6 |
Total finance lease obligations | $ 17.9 | |
Weighted-average remaining lease term (years): | ||
Operating leases | 5 years 9 months 18 days | |
Finance leases | 9 years | |
Weighted-average discount rate: | ||
Operating leases | 4.33% | |
Finance leases | 6.66% | |
Buildings | ||
Finance leases: | ||
Total | $ 815.4 | 795.5 |
Machinery and Equipment | ||
Finance leases: | ||
Total | 5,672.3 | $ 5,481.6 |
Finance Leases | ||
Finance leases: | ||
Total | 28.8 | |
Less accumulated amortization | (17.8) | |
Total | 11 | |
Finance Leases | Buildings | ||
Finance leases: | ||
Total | 0.3 | |
Finance Leases | Machinery and Equipment | ||
Finance leases: | ||
Total | $ 28.5 |
Components of Lease Expense (De
Components of Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Finance lease cost: | ||
Amortization of finance lease assets | $ 0.4 | $ 1.1 |
Interest on lease liabilities | 0.3 | 0.9 |
Total finance lease cost | 0.7 | 2 |
Operating lease cost | 17.6 | 52.3 |
Short-term lease cost | 4.4 | 15.1 |
Variable lease cost | 3.2 | 13 |
Total lease cost | $ 25.9 | $ 82.4 |
Schedule of Supplemental Cash F
Schedule of Supplemental Cash Flow Information Related to Leases (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows for operating leases | $ (44.6) |
Operating cash flows for finance leases | (1.1) |
Financing cash flows for finance leases | (0.9) |
Right-of-use assets obtained in exchange for new lease obligations: | |
Operating leases | (20.5) |
Supplemental non-cash information on changes in lease liabilities | 33.8 |
Supplemental non-cash information on changes in right-of-use assets | $ 16.2 |
Schedule of Maturities of Lease
Schedule of Maturities of Lease Liabilities for Operating and Finance Leases (Details) $ in Millions | Sep. 30, 2019USD ($) | |
Operating leases | ||
2019 | $ 18.1 | |
2020 | 66.9 | |
2021 | 56.6 | |
2022 | 39.2 | |
2023 | 25.4 | |
Thereafter | 63.8 | |
Total lease payments | 270 | |
Less imputed interest | (32.3) | [1] |
Present value of lease liabilities | 237.7 | |
Finance leases | ||
2019 | 0.7 | |
2020 | 2.7 | |
2021 | 2.7 | |
2022 | 2.7 | |
2023 | 2.7 | |
Thereafter | 12.4 | |
Total lease payments | 23.9 | |
Less imputed interest | (6) | [1] |
Present value of lease liabilities | $ 17.9 | |
[1] | Calculated using the incremental borrowing rate for each lease applied to the future payments |
Schedule of Maturities of Lea_2
Schedule of Maturities of Lease Liabilities Under ASC 840 (Details) $ in Millions | Dec. 31, 2018USD ($) | |
Operating Leases | ||
2019 | $ 70.1 | |
2020 | 58.7 | |
2021 | 47.4 | |
2022 | 29.9 | |
2023 | 17.8 | |
Thereafter | 46.4 | |
Total lease payments | 270.3 | |
Finance Leases | ||
2019 | 2.7 | |
2020 | 2.7 | |
2021 | 2.7 | |
2022 | 2.7 | |
2023 | 2.7 | |
Thereafter | 12.4 | |
Total lease payments | 25.9 | |
Less imputed interest | (6.9) | [1] |
Present value of lease liabilities | $ 19 | |
[1] | Calculated using the incremental borrowing rate for each lease applied to the future payments |
Revenue - Summary of Revenues D
Revenue - Summary of Revenues Disaggregated by Product Line (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation Of Revenue [Line Items] | ||||
Revenue | $ 1,750.7 | $ 1,809.9 | $ 5,244.3 | $ 5,268.1 |
Packaging | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 1,489.9 | 1,535.1 | 4,472.1 | 4,434.2 |
Paper | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 242.8 | 254.3 | 720.3 | 774.5 |
Corporate and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | $ 18 | $ 20.5 | $ 51.9 | $ 59.4 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Packaging Corporation of America | |
Revenue [Line Items] | |
Variable interest entity, ownership percentage | 50.00% |
Boise Cascade Co-Owner of LTP | |
Revenue [Line Items] | |
Variable interest entity, ownership percentage | 50.00% |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - Englander - USD ($) $ in Millions | Oct. 09, 2018 | Jun. 30, 2019 | Sep. 30, 2019 |
Business Acquisition [Line Items] | |||
Acquisition completion date | Oct. 9, 2018 | ||
Cash purchase price | $ 56.3 | ||
Goodwill | 28.6 | ||
Intangible assets | $ 14.1 | ||
Acquired finite-lived intangible assets, weighted average useful life | 9 years 8 months 12 days | ||
Adjustment to seller related to a final working capital | $ 1.4 | $ 1.4 | |
Increase in purchase price as result of increase in goodwill adjustments | $ 57.7 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||
Net income | $ 179.8 | $ 206.7 | $ 560.2 | $ 533.4 |
Less: Distributed and undistributed earnings allocated to participating securities | (1.3) | (1.6) | (4.2) | (4.1) |
Net income attributable to common shareholders | $ 178.5 | $ 205.1 | $ 556 | $ 529.3 |
Denominator: | ||||
Weighted average basic common shares outstanding (in shares) | 93.9 | 93.7 | 93.8 | 93.7 |
Effect of dilutive securities (in shares) | 0.4 | 0.3 | 0.3 | 0.2 |
Weighted average diluted common shares outstanding (in shares) | 94.3 | 94 | 94.1 | 93.9 |
Basic income per common share (in dollars per share) | $ 1.90 | $ 2.19 | $ 5.93 | $ 5.65 |
Diluted income per common share (in dollars per share) | $ 1.89 | $ 2.18 | $ 5.91 | $ 5.64 |
Other Income (Expense), Net - C
Other Income (Expense), Net - Components of Other Income (Expense), Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Asset disposals and write-offs | [1] | $ (9.5) | $ (5.1) | $ (18.3) | $ (14.4) |
Facilities closure and other costs | [2] | (1.5) | (1.6) | ||
Insurance deductible for property damage | [3] | (0.5) | (0.5) | ||
Acquisition and integration related costs | [4] | (0.1) | (0.1) | ||
Other | (2.2) | 0.4 | (2.8) | (4) | |
Total | $ (11.7) | (10.5) | (21.5) | (32.2) | |
Wallula, Washington Mill | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Restructuring | [5] | $ (3.7) | $ (0.4) | $ (11.6) | |
[1] | For 2019, includes $3.0 million of charges for the disposal of fixed assets related to the containerboard mill conversion at our DeRidder, Louisiana mill. | ||||
[2] | Includes charges consisting of closure costs related to corrugated products facilities. | ||||
[3] | Includes charges for the property damage insurance deductible for a weather-related incident at one of our corrugated products facilities. | ||||
[4] | Includes charges related to recent acquisitions. | ||||
[5] | Includes charges related to the discontinuation of production of uncoated free sheet and coated one-side grades at the Wallula, Washington mill in the second quarter of 2018 and the conversion of the No. 3 paper machine to a high-performance 100% virgin kraft linerboard machine. |
Other Income (Expense), Net -_2
Other Income (Expense), Net - Components of Other Income (Expense), Net (Parenthetical) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Charges for disposal of fixed assets | $ (6.7) | $ (4.9) | ||
Wallula, Washington Mill | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
High-performance of virgin kraft linerboard machine percentage | 100.00% | |||
DeRidder, Louisiana Mill | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Charges for disposal of fixed assets | $ 3 | $ 3 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision | $ 59.5 | $ 67.4 | $ 184.4 | $ 172.6 |
Effective income tax rate, percent | 24.90% | 24.60% | 24.80% | 24.40% |
Federal statutory income tax rate | 21.00% | |||
Cash paid for taxes, net of refunds received | $ 138.2 | $ 73.2 |
Inventories - Components of Inv
Inventories - Components of Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 280.2 | $ 307.8 |
Work in process | 15.8 | 13.9 |
Finished goods | 215.8 | 199 |
Supplies and materials | 294.5 | 274.9 |
Inventories | $ 806.3 | $ 795.6 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment - Components of Property, Plant, and Equipment (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Property, Plant, And Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 6,905.6 | $ 6,691.1 |
Less accumulated depreciation | (3,795.2) | (3,582.5) |
Total | 3,110.4 | 3,108.6 |
Land and Land Improvements | ||
Property, Plant, And Equipment [Line Items] | ||
Property, plant and equipment, at cost | 167.5 | 161.9 |
Buildings | ||
Property, Plant, And Equipment [Line Items] | ||
Property, plant and equipment, at cost | 815.4 | 795.5 |
Machinery and Equipment | ||
Property, Plant, And Equipment [Line Items] | ||
Property, plant and equipment, at cost | 5,672.3 | 5,481.6 |
Construction in Progress | ||
Property, Plant, And Equipment [Line Items] | ||
Property, plant and equipment, at cost | 173.3 | 176.7 |
Other | ||
Property, Plant, And Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 77.1 | $ 75.4 |
Property, Plant, and Equipmen_3
Property, Plant, and Equipment - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Depreciation [Abstract] | |||||
Depreciation expense | $ 87.6 | $ 89 | $ 258.6 | $ 275.3 | |
Incremental depreciation | 0.2 | $ 14 | |||
Purchases of property, plant, and equipment included in accounts payable | $ 30.3 | $ 24.7 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets -Goodwill - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Goodwill [Line Items] | ||
Goodwill | $ 918.7 | $ 917.3 |
Packaging | ||
Goodwill [Line Items] | ||
Goodwill | 863.5 | 862.1 |
Paper | ||
Goodwill [Line Items] | ||
Goodwill | $ 55.2 | $ 55.2 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Beginning Balance | $ 917.3 |
Acquisitions | 1.4 |
Ending Balance | $ 918.7 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Goodwill (Parenthetical) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Jun. 30, 2019 | Sep. 30, 2019 | |
Englander | ||
Goodwill [Line Items] | ||
Increase to goodwill, acquisition adjustment | $ 1.4 | $ 1.4 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Components of Intangible Assets (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (in Years) | 10 years 1 month 6 days | 10 years 9 months 18 days |
Gross Carrying Amount | $ 542.9 | $ 543.7 |
Accumulated Amortization | $ 194.4 | $ 165.5 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (in Years) | 10 years 2 months 12 days | 10 years 10 months 24 days |
Gross Carrying Amount | $ 503.8 | $ 504.6 |
Accumulated Amortization | $ 171.3 | $ 144.5 |
Trademarks and Trade Names | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (in Years) | 9 years 7 months 6 days | 10 years 1 month 6 days |
Gross Carrying Amount | $ 34.8 | $ 34.8 |
Accumulated Amortization | $ 19.9 | $ 18.3 |
Other Intangible Assets | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (in Years) | 2 years 3 months 18 days | 3 years |
Gross Carrying Amount | $ 4.3 | $ 4.3 |
Accumulated Amortization | $ 3.2 | $ 2.7 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets - Components of Intangible Assets (Parenthetical) (Details) $ in Millions | 3 Months Ended |
Jun. 30, 2019USD ($) | |
Customer Relationships | |
Goodwill [Line Items] | |
Increase (decrease) in acquired intangible assets | $ 0.7 |
Goodwill and Intangible Asset_7
Goodwill and Intangible Assets - Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Intangible assets amortization expense | $ 9.7 | $ 10.2 | $ 28.9 | $ 30.7 |
Accrued Liabilities - Component
Accrued Liabilities - Components of Accrued Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Accrued Liabilities Current [Abstract] | ||
Compensation and benefits | $ 121.7 | $ 136.7 |
Customer volume discounts and rebates | 27.4 | 25.2 |
Medical insurance and workers’ compensation | 26.9 | 27.5 |
Franchise, property, sales and use taxes | 25.2 | 13.4 |
Environmental liabilities and asset retirement obligations | 5.3 | 5 |
Severance, retention, and relocation | 3.5 | 2.2 |
Other | 10.1 | 12.4 |
Total | $ 220.1 | $ 222.4 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Debt Instrument [Line Items] | ||||
Cash payments paid for interest | $ 53.4 | $ 58.6 | ||
Amortization of treasury lock settlements | $ 1.3 | $ 1.3 | 3.9 | 4 |
Amortization of financing costs | 0.7 | $ 0.7 | 2.1 | $ 2 |
Senior Notes | Fixed-Rate Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Book value of fixed rate debt | 2,496.8 | 2,496.8 | ||
Long-term debt (fixed-rate debt), fair value | $ 2,607 | $ 2,607 |
Employee Benefit Plans and Ot_3
Employee Benefit Plans and Other Postretirement Benefits - Components of Net Periodic Benefit Costs (Details) - Pension Plans - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 6.1 | $ 6.3 | $ 18.4 | $ 18.8 |
Interest cost | 11.7 | 10.6 | 35.2 | 31.8 |
Expected return on plan assets | (13) | (14.2) | (39.1) | (42.5) |
Net amortization of unrecognized amounts, Prior service cost | 1.6 | 1.8 | 4.7 | 5.2 |
Net amortization of unrecognized amounts, Actuarial loss (income) | 1.7 | 2.3 | 5.3 | 7 |
Net periodic benefit cost | $ 8.1 | $ 6.8 | $ 24.5 | $ 20.3 |
Employee Benefit Plans and Ot_4
Employee Benefit Plans and Other Postretirement Benefits - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Pension Plans | Qualified Plan | ||||
Pension Contributions [Abstract] | ||||
Contributions to pension plan | $ 49.4 | $ 18 | $ 54 | $ 21.2 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2019shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Long-term equity incentive plan, termination date | May 1, 2023 |
Number of shares authorized under plan | 10,600,000 |
Number of shares available for future grants under share-based plan | 400,000 |
Performance Unit Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of ROIC as performance measure | 50.00% |
Percentage of TSR as performance measure | 50.00% |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Restricted Stock and Performance Unit Award Activity (Details) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Restricted Stock | |
Restricted Stock and Performance Units [Roll Forward] | |
Outstanding at January 1, 2019 | shares | 743,591 |
Granted | shares | 199,185 |
Vested | shares | (209,687) |
Forfeitures | shares | (8,836) |
Outstanding at September 30, 2019 | shares | 724,253 |
Restricted Stock and Performance Units (Weighted Average Grant-date Fair Value) [Abstract] | |
Weighted Average Grant-Date Fair Value, Outstanding at January 1, 2019 | $ / shares | $ 86.90 |
Weighted Average Grant-Date Fair Value, Granted | $ / shares | 95.45 |
Weighted Average Grant-Date Fair Value, Vested | $ / shares | 68.21 |
Weighted Average Grant-Date Fair Value, Forfeitures | $ / shares | 100.69 |
Weighted Average Grant-Date Fair Value, Outstanding at September 30, 2019 | $ / shares | $ 94.50 |
Performance Units | |
Restricted Stock and Performance Units [Roll Forward] | |
Outstanding at January 1, 2019 | shares | 266,704 |
Granted | shares | 115,608 |
Vested | shares | (59,165) |
Outstanding at September 30, 2019 | shares | 323,147 |
Restricted Stock and Performance Units (Weighted Average Grant-date Fair Value) [Abstract] | |
Weighted Average Grant-Date Fair Value, Outstanding at January 1, 2019 | $ / shares | $ 90.01 |
Weighted Average Grant-Date Fair Value, Granted | $ / shares | 96.98 |
Weighted Average Grant-Date Fair Value, Vested | $ / shares | 67.84 |
Weighted Average Grant-Date Fair Value, Outstanding at September 30, 2019 | $ / shares | $ 96.56 |
Share-Based Compensation - Comp
Share-Based Compensation - Compensation Expense for Share-Based Awards (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense | $ 5.9 | $ 6.6 | $ 24.5 | $ 17.4 |
Income tax benefit | (1.5) | (1.6) | (6.2) | (4.4) |
Share-based compensation expense, net of tax benefit | 4.4 | 5 | 18.3 | 13 |
Restricted Stock | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense | 3.5 | 4.9 | 19.1 | 13.9 |
Performance Units | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense | $ 2.4 | $ 1.7 | $ 5.4 | $ 3.5 |
Share-Based Compensation - Unre
Share-Based Compensation - Unrecognized Compensation Expense for Share-Based Awards (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense | $ 50.4 |
Remaining weighted-average recognition period | 2 years 10 months 24 days |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense | $ 31 |
Remaining weighted-average recognition period | 3 years |
Performance Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense | $ 19.4 |
Remaining weighted-average recognition period | 2 years 7 months 6 days |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions | Oct. 15, 2019 | Aug. 20, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Feb. 25, 2016 |
Common stock dividends paid | $ 223,900,000 | $ 193,400,000 | ||||
Dividends paid per common share (in dollars per share) | $ 0.79 | |||||
Stock repurchase program, authorized amount | $ 200,000,000 | |||||
Repurchases of common stock under stock repurchase program | 0 | 0 | ||||
Common stock repurchase authorization amount available | $ 193,000,000 | $ 193,000,000 | ||||
Subsequent Event | ||||||
Common stock dividends paid | $ 74,800,000 |
Stockholders' Equity - Changes
Stockholders' Equity - Changes in Accumulated Other Comprehensive Income by Component (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at January 1, 2019 | $ 2,672.4 |
Amounts reclassified from AOCI, net of tax | 10 |
Balance at September 30, 2019 | 3,034.7 |
Foreign Currency Translation Adjustments | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at January 1, 2019 | (0.4) |
Balance at September 30, 2019 | (0.4) |
Unfunded Employee Benefit Obligations | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at January 1, 2019 | (127.9) |
Amounts reclassified from AOCI, net of tax | 7.1 |
Balance at September 30, 2019 | (120.8) |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at January 1, 2019 | (138.8) |
Amounts reclassified from AOCI, net of tax | 10 |
Balance at September 30, 2019 | (128.8) |
Treasury Lock | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at January 1, 2019 | (10.2) |
Amounts reclassified from AOCI, net of tax | 2.9 |
Balance at September 30, 2019 | (7.3) |
Foreign Exchange Contract | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at January 1, 2019 | (0.3) |
Balance at September 30, 2019 | $ (0.3) |
Stockholders' Equity - Reclassi
Stockholders' Equity - Reclassifications Out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Interest expense, net | $ (21.6) | $ (23.9) | $ (68) | $ (73.4) | |
Income before taxes | 239.3 | 274.1 | 744.6 | 706 | |
Income tax benefit | (59.5) | (67.4) | (184.4) | (172.6) | |
Net income | 179.8 | 206.7 | 560.2 | 533.4 | |
Unfunded Employee Benefit Obligations | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Amortization of prior service costs | [1] | (1.5) | (1.7) | (4.5) | (5) |
Amortization of actuarial gains / (losses) | [1] | (1.7) | (2.3) | (5) | (6.9) |
Income before taxes | (3.2) | (4) | (9.5) | (11.9) | |
Income tax benefit | 0.8 | 1 | 2.4 | 3 | |
Net income | (2.4) | (3) | (7.1) | (8.9) | |
Treasury Lock | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Interest expense, net | [2] | (1.3) | (1.3) | (3.9) | (4) |
Income tax benefit | 0.3 | 0.3 | 1 | 1 | |
Net income | $ (1) | $ (1) | $ (2.9) | $ (3) | |
[1] | These AOCI components are included in the computation of net pension and postretirement benefit costs. See Note 14, Employee Benefit Plans and Other Postretirement Benefits, for additional information. | ||||
[2] | This AOCI component is included in interest expense, net. Amount relates to the amortization of the effective portion of treasury lock derivative instruments recorded in AOCI. The net amount of settlement gains or losses on derivative instruments included in AOCI to be amortized over the next 12 months is a net loss of $5.2 million ($3.9 million after tax). For a discussion of treasury lock derivative instrument activity, see Note 14, Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our 2018 Annual Report on Form 10-K |
Stockholders' Equity - Reclas_2
Stockholders' Equity - Reclassifications Out of Accumulated Other Comprehensive Income (Parenthetical) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Equity [Abstract] | |
Net amount of settlement gains (losses) on derivative instruments included in accumulated OCI to be amortized over next 12 months, before tax | $ 5.2 |
Net amount of settlement gains (losses) on derivative instruments included in accumulated OCI to be amortized over next 12 months, after tax | $ 3.9 |
Concentrations of Risk - Additi
Concentrations of Risk - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Concentration Risk [Line Items] | |||
Accounts receivable, net, current | $ 932.3 | $ 901.9 | |
Office Depot | Credit Concentration Risk | |||
Concentration Risk [Line Items] | |||
Accounts receivable, net, current | $ 78.5 | $ 66.7 | |
Office Depot | Total Company Sales Revenue | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 7.00% | 7.00% | |
Office Depot | Total Company Receivables | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 8.00% | 7.00% | |
Paper | Office Depot | Paper Segment Sales Revenue | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 50.00% | 46.00% | 47.00% |
Transactions With Related Par_2
Transactions With Related Parties - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||||
Carrying amount of LTP's assets | $ 5.1 | $ 5.1 | $ 2.7 | ||
Carrying amount of LTP's liabilities | 5.1 | $ 5.1 | $ 2.7 | ||
Boise Cascade Co-Owner of LTP | |||||
Related Party Transaction [Line Items] | |||||
Variable interest entity, ownership percentage | 50.00% | ||||
Boise Cascade Co-Owner of LTP | Fiber | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | 21.4 | $ 22.4 | $ 62.7 | $ 65.5 | |
Fiber costs from related parties | 21.4 | 22.4 | 62.7 | 65.5 | |
Boise Cascade Co-Owner of LTP | Wood Products, Including Chips and Logs | |||||
Related Party Transaction [Line Items] | |||||
Fiber costs from related parties | $ 4.4 | $ 4.1 | $ 13.2 | $ 12.8 | |
Packaging Corporation of America | |||||
Related Party Transaction [Line Items] | |||||
Variable interest entity, ownership percentage | 50.00% |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2019Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information - Selected
Segment Information - Selected Financial Information by Reportable Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | $ 1,750.7 | $ 1,809.9 | $ 5,244.3 | $ 5,268.1 | ||||
Operating Income (Loss) | 262.8 | 298.5 | 818.6 | 781 | ||||
Non-operating pension expense | (1.9) | (0.5) | 6 | 1.6 | ||||
Interest expense, net | (21.6) | (23.9) | (68) | (73.4) | ||||
Income before taxes | 239.3 | 274.1 | 744.6 | 706 | ||||
Trade | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 1,750.7 | 1,809.9 | 5,244.3 | 5,268.1 | ||||
Intersegment Eliminations | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | (41) | (39.1) | (119.5) | (114.4) | ||||
Segment Reconciling Items | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | (41) | (39.1) | (119.5) | (114.4) | ||||
Packaging | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 1,489.9 | 1,535.1 | 4,472.1 | 4,434.2 | ||||
Operating Income (Loss) | 235.1 | [1] | 284.4 | [2],[3],[4],[5],[6] | 748.6 | [7],[8] | 782.3 | [2],[3],[4],[5],[6] |
Packaging | Trade | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 1,482.9 | 1,528.3 | 4,451.5 | 4,414.7 | ||||
Packaging | Intersegment Eliminations | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 7 | 6.8 | 20.6 | 19.5 | ||||
Packaging | Operating Segments | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 1,489.9 | 1,535.1 | 4,472.1 | 4,434.2 | ||||
Paper | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 242.8 | 254.3 | 720.3 | 774.5 | ||||
Operating Income (Loss) | 48.1 | 32.3 | [2],[3],[4],[5],[6] | 132.5 | 55.7 | [2],[3],[4],[5],[6] | ||
Paper | Trade | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 242.8 | 254.3 | 720.3 | 774.5 | ||||
Paper | Operating Segments | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 242.8 | 254.3 | 720.3 | 774.5 | ||||
Corporate and Other | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 18 | 20.5 | 51.9 | 59.4 | ||||
Operating Income (Loss) | (20.4) | (18.2) | [2],[3],[4],[5],[6] | (62.5) | (57) | [2],[3],[4],[5],[6] | ||
Corporate and Other | Trade | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 25 | 27.3 | 72.5 | 78.9 | ||||
Corporate and Other | Intersegment Eliminations | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 34 | 32.3 | 98.9 | 94.9 | ||||
Corporate and Other | Operating Segments | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | $ 59 | $ 59.6 | $ 171.4 | $ 173.8 | ||||
[1] | The three and nine months ended September 30, 2019 include $3.0 million of charges for the disposal of fixed assets related to the containerboard mill conversion at our DeRidder, Louisiana mill. | |||||||
[2] | $0.1 million of charges related to recent acquisitions. | |||||||
[3] | $1.3 million and $1.8 million, respectively, of charges consisting of closure costs related to corrugated products facilities and a corporate administration facility. | |||||||
[4] | $4.0 million and $26.4 million, respectively, of charges related to the second quarter 2018 discontinuation of uncoated free sheet and coated one-side grades at the Wallula, Washington mill associated with the conversion of the No. 3 paper machine to a high-performance 100% virgin kraft linerboard machine. | |||||||
[5] | $0.5 | |||||||
[6] | The three and nine months ended September 30, 2018 include the following: | |||||||
[7] | The nine months ended September 30, 2019 include $0.6 million of charges related to the announced second quarter 2018 discontinuation of uncoated free sheet and coated one-side grades at the Wallula, Washington mill associated with the conversion of the No. 3 paper machine to a high-performance 100% virgin kraft linerboard machine. | |||||||
[8] | The three and nine months ended September 30, 2019 include $3.0 million of charges for the disposal of fixed assets related to the containerboard mill conversion at our DeRidder, Louisiana mill. |
Segment Information - Selecte_2
Segment Information - Selected Financial Information by Reportable Segment (Parenthetical) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | |||||
Charges for disposal of fixed assets | $ (6.7) | $ (4.9) | |||
Wallula, Washington Mill | |||||
Segment Reporting Information [Line Items] | |||||
High-performance of virgin kraft linerboard machine percentage | 100.00% | ||||
DeRidder, Louisiana Mill | |||||
Segment Reporting Information [Line Items] | |||||
Charges for disposal of fixed assets | $ 3 | 3 | |||
Paper | Wallula, Washington Mill | |||||
Segment Reporting Information [Line Items] | |||||
Restructuring charges | $ 4 | $ 0.6 | 26.4 | ||
High-performance of virgin kraft linerboard machine percentage | 100.00% | 100.00% | |||
Packaging And Corporate And Other | |||||
Segment Reporting Information [Line Items] | |||||
Restructuring charges | $ 1.3 | 1.8 | |||
Packaging | |||||
Segment Reporting Information [Line Items] | |||||
Property damage and business interruption insurance | 0.5 | 0.5 | |||
Acquisition-related costs | $ 0.1 | $ 0.1 |
Commitments, Guarantees, Inde_2
Commitments, Guarantees, Indemnifications, and Legal Proceedings - Additional Information (Details) - DeRidder, Louisiana - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Feb. 08, 2017 | |
Schedule Of Commitments And Contingencies [Line Items] | ||||
Loss contingency, period of occurrence | February 8, 2017 | |||
Liability insurance | $ 1,000,000 | |||
Property damages and business interruption insurance | $ 5,000,000 | |||
Claim with insurance carrier | $ 17,000,000 | |||
Insurance proceeds included in net cash provided by operating activities | 14,500,000 | |||
Insurance proceeds included in net cash provided by investing activities | $ 2,500,000 | |||
Payment of penalties | $ 40,000 |