Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 30, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
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 | 94,830,807 | |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 1,693.7 | $ 1,750.7 | $ 4,944 | $ 5,244.3 |
Cost of sales | (1,348.3) | (1,339.3) | (3,907.9) | (3,983.6) |
Gross profit | 345.4 | 411.4 | 1,036.1 | 1,260.7 |
Selling, general and administrative expenses | (127.1) | (136.9) | (409.3) | (420.6) |
Goodwill impairment | (55.2) | |||
Other expense, net | (8.8) | (11.7) | (36.9) | (21.5) |
Income from operations | 209.5 | 262.8 | 534.7 | 818.6 |
Non-operating pension income (expense) | 0.6 | (1.9) | 1.7 | (6) |
Interest expense, net | (24.4) | (21.6) | (69.1) | (68) |
Income before taxes | 185.7 | 239.3 | 467.3 | 744.6 |
Provision for income taxes | (46.6) | (59.5) | (129.9) | (184.4) |
Net income | $ 139.1 | $ 179.8 | $ 337.4 | $ 560.2 |
Net income per common share: | ||||
Basic | $ 1.47 | $ 1.90 | $ 3.56 | $ 5.93 |
Diluted | 1.46 | 1.89 | 3.54 | 5.91 |
Dividends declared per common share | $ 0.79 | $ 0.79 | $ 2.37 | $ 2.37 |
Statements of Comprehensive Income: | ||||
Net income | $ 139.1 | $ 179.8 | $ 337.4 | $ 560.2 |
Reclassification adjustments to cash flow hedges included in net income, net of tax of $0.0 million, $0.3 million, $0.0 million, and $1.0 million | 1 | 2.9 | ||
Changes in unrealized gains (losses) on marketable debt securities, net of tax of $0.1 million, $0.0 million, $0.2 million, and $0.0 million | (0.2) | 0.5 | ||
Amortization of pension and postretirement plans actuarial loss and prior service cost, net of tax of $0.9 million, $0.8 million, $2.7 million, and $2.4 million | 2.7 | 2.4 | 8.1 | 7.1 |
Other comprehensive income | 2.5 | 3.4 | 8.6 | 10 |
Comprehensive income | $ 141.6 | $ 183.2 | $ 346 | $ 570.2 |
Consolidated Statements of In_2
Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Reclassification adjustments to cash flow hedges included in net income, tax | $ 0 | $ 0.3 | $ 0 | $ 1 |
Changes in unrealized gains (losses) on marketable debt securities, tax | 0.1 | 0 | 0.2 | 0 |
Amortization of pension and postretirement plans actuarial loss and prior service cost, tax | $ 0.9 | $ 0.8 | $ 2.7 | $ 2.4 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 949.1 | $ 679.5 |
Short-term marketable debt securities | 101.2 | 87.9 |
Accounts receivable, net of allowance for credit losses and customer deductions of $12.6 million as of both September 30, 2020, and December 31, 2019 | 864.6 | 845.6 |
Inventories | 777.6 | 794.1 |
Prepaid expenses and other current assets | 51.2 | 44.8 |
Federal and state income taxes receivable | 26.5 | |
Total current assets | 2,743.7 | 2,478.4 |
Property, plant, and equipment, net | 3,130.9 | 3,151.7 |
Goodwill | 863.5 | 918.7 |
Other intangible assets, net | 305.4 | 338.8 |
Operating lease right-of-use assets | 231.7 | 234.3 |
Long-term marketable debt securities | 45.2 | 58.1 |
Other long-term assets | 52.2 | 55.8 |
Total assets | 7,372.6 | 7,235.8 |
Current liabilities: | ||
Operating lease obligations | 68 | 62.6 |
Finance lease obligations | 1.6 | 1.5 |
Accounts payable | 352.1 | 351.9 |
Dividends payable | 76.7 | 76.6 |
Accrued liabilities | 231.6 | 217.5 |
Accrued interest | 28.1 | 13.7 |
Federal and state income taxes payable | 17.3 | |
Total current liabilities | 775.4 | 723.8 |
Long-term liabilities: | ||
Long-term debt | 2,478.7 | 2,476.8 |
Operating lease obligations | 172.2 | 177.6 |
Finance lease obligations | 14.8 | 16 |
Deferred income taxes | 363.7 | 340.1 |
Compensation and benefits | 300.7 | 375.5 |
Other long-term liabilities | 61.7 | 55 |
Total long-term liabilities | 3,391.8 | 3,441 |
Commitments and contingent liabilities | ||
Stockholders' equity: | ||
Common stock, par value $0.01 per share, 300.0 million shares authorized, 94.8 million and 94.7 million shares issued as of September 30, 2020 and December 31, 2019, respectively | 0.9 | 0.9 |
Additional paid in capital | 548.7 | 524.8 |
Retained earnings | 2,806.7 | 2,704.8 |
Accumulated other comprehensive loss | (150.9) | (159.5) |
Total stockholders' equity | 3,205.4 | 3,071 |
Total liabilities and stockholders' equity | $ 7,372.6 | $ 7,235.8 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts and customer deductions | $ 12.6 | $ 12.6 |
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 | 94,800,000 | 94,700,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flows from Operating Activities: | ||
Net income | $ 337.4 | $ 560.2 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, depletion, and amortization of intangibles | 309 | 288.6 |
Amortization of deferred financing costs | 1.9 | 6.5 |
Share-based compensation expense | 23.8 | 24.5 |
Deferred income tax provision | 21.1 | 38.3 |
Loss on asset disposals | 4.1 | 6.7 |
Goodwill impairment | 55.2 | |
Pension and post-retirement benefits expense, net of contributions | (68.1) | (30.4) |
Other, net | 18.8 | 9.6 |
(Increase) decrease in assets — | ||
Accounts receivable | (19) | (30.3) |
Inventories | 16.5 | (10.8) |
Prepaid expenses and other current assets | (5.6) | (5.6) |
Increase (decrease) in liabilities — | ||
Accounts payable | (6.2) | (2.3) |
Accrued liabilities | 29 | 15.4 |
Federal and state income taxes payable / receivable | 43.8 | 7.8 |
Net cash provided by operating activities | 761.7 | 878.2 |
Cash Flows from Investing Activities: | ||
Additions to property, plant, and equipment | (253.5) | (263.8) |
Additions to other long term assets | (6.2) | (4.5) |
Purchases of marketable debt securities, net of redemptions | (0.6) | |
Proceeds from disposals | 4.4 | 1.4 |
Other, net | (1.4) | |
Net cash used for investing activities | (255.9) | (268.3) |
Cash Flows from Financing Activities: | ||
Repayments of debt and finance lease obligations | (1.1) | (1.1) |
Common stock dividends paid | (224.6) | (223.9) |
Shares withheld to cover employee restricted stock taxes | (10.5) | (8.1) |
Net cash used for financing activities | (236.2) | (233.1) |
Net increase in cash and cash equivalents | 269.6 | 376.8 |
Cash and cash equivalents, beginning of period | 679.5 | 361.5 |
Cash and cash equivalents, end of period | $ 949.1 | $ 738.3 |
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, 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) | ||||
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 | ||||
Beginning Balance at Dec. 31, 2019 | 3,071 | $ 0.9 | 524.8 | 2,704.8 | (159.5) |
Beginning Balance (in shares) at Dec. 31, 2019 | 94,655 | ||||
Common stock withheld and retired to cover taxes on vested stock awards | (10.5) | $ 0 | (0.8) | (9.7) | 0 |
Common stock withheld and retired to cover taxes on vested stock awards (in shares) | (108) | ||||
Common stock dividends declared | (225.8) | $ 0 | 0 | (225.8) | 0 |
Share-based compensation | 24.7 | $ 0 | 24.7 | 0 | 0 |
Share-based compensation expense (in shares) | 284 | ||||
Comprehensive income | 346 | $ 0 | 0 | 337.4 | 8.6 |
Ending Balance at Sep. 30, 2020 | 3,205.4 | $ 0.9 | 548.7 | 2,806.7 | (150.9) |
Ending Balance (in shares) at Sep. 30, 2020 | 94,831 | ||||
Beginning Balance at Jun. 30, 2020 | 3,133.1 | $ 0.9 | 542.7 | 2,742.9 | (153.4) |
Beginning Balance (in shares) at Jun. 30, 2020 | 94,835 | ||||
Common stock withheld and retired to cover taxes on vested stock awards | (0.1) | $ 0 | 0 | (0.1) | 0 |
Common stock withheld and retired to cover taxes on vested stock awards (in shares) | (1) | ||||
Common stock dividends declared | (75.2) | $ 0 | 0 | (75.2) | 0 |
Share-based compensation | 6 | $ 0 | 6 | 0 | 0 |
Share-based compensation expense (in shares) | (3) | ||||
Comprehensive income | 141.6 | $ 0 | 0 | 139.1 | 2.5 |
Ending Balance at Sep. 30, 2020 | $ 3,205.4 | $ 0.9 | $ 548.7 | $ 2,806.7 | $ (150.9) |
Ending Balance (in shares) at Sep. 30, 2020 | 94,831 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
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. 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 18, Segment Information. The consolidated financial statements of PCA as of September 30, 2020 and for the three and nine months ended September 30, 2020 and 2019 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, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. These consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2019. 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, 2020 | |
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, 2020, we adopted Accounting Standards Update (“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. ASU 2016-13 was applied using the modified retrospective method, and as a result, amounts recorded prior to January 1, 2020 have not been retrospectively restated. 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. Prior to adoption of the new standard, the Company already incorporated forward-looking information into its estimate of credit losses for trade receivables. Due to the short duration of the Company’s trade receivables, the adoption of ASU 2016-13 did not have a material impact on trade receivables. The adoption of ASU 2016-13 also did not have a material impact on the Company’s AFS marketable debt securities, as the Company only invests in highly-rated AFS marketable debt securities. Overall, the adoption of ASU 2016-13 did not have a material impact on the Company’s financial condition, results of operations or cash flow. Effective January 1, 2020, the Company adopted ASU 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. New Accounting Standards Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. The amendments in this Update are elective and apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Companies can apply the ASU immediately, but the guidance will only be available until December 31, 2022. The Company is currently evaluating the impact of this guidance, but does not expect the guidance to have a significant impact on its related disclosures. In August 2018, the 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 on a retrospective basis. The Company is currently evaluating the impact of this guidance, but does not expect the guidance will have a significant impact on its related disclosures. 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
Revenue | 9 Months Ended |
Sep. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 3 . 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, 2020 2019 2020 2019 Packaging $ 1,501.1 $ 1,489.9 $ 4,378.5 $ 4,472.1 Paper 178.1 242.8 518.7 720.3 Corporate and Other 14.5 18.0 46.8 51.9 Total revenue $ 1,693.7 $ 1,750.7 $ 4,944.0 $ 5,244.3 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 17, 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. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 4 . 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: 2020 2019 2020 2019 Net income $ 139.1 $ 179.8 $ 337.4 $ 560.2 Less: Distributed and undistributed earnings allocated to participating securities (1.0 ) (1.3 ) (2.7 ) (4.2 ) Net income attributable to common shareholders $ 138.1 $ 178.5 $ 334.7 $ 556.0 Denominator: Weighted average basic common shares outstanding 94.2 93.9 94.0 93.8 Effect of dilutive securities 0.3 0.4 0.4 0.3 Weighted average diluted common shares outstanding 94.5 94.3 94.4 94.1 Basic income per common share $ 1.47 $ 1.90 $ 3.56 $ 5.93 Diluted income per common share $ 1.46 $ 1.89 $ 3.54 $ 5.91 |
Other Expense, Net
Other Expense, Net | 9 Months Ended |
Sep. 30, 2020 | |
Other Income And Expenses [Abstract] | |
Other Expense, Net | 5 . Other Expense, Net The components of other expense, net, were as follows (dollars in millions): Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Asset disposals and write-offs $ (5.5 ) $ (9.5 ) $ (16.5 ) $ (18.3 ) Facilities closure and other costs (a) (2.9 ) — (16.6 ) — Wallula mill restructuring (b) — — — (0.4 ) Other (0.4 ) (2.2 ) (3.8 ) (2.8 ) Total $ (8.8 ) $ (11.7 ) $ (36.9 ) $ (21.5 ) ________________ (a) Includes charges consisting of closure costs related to corrugated products facilities, substantially all of which relates to the previously announced closure of the San Lorenzo, California facility during the second quarter of 2020, partially offset by income related to the sale of a corrugated products facility during the second quarter. (b ) Includes 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 produce virgin kraft linerboard. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6 . Income Taxes For the three months ended September 30, 2020 and 2019, we recorded $46.6 million and $59.5 million of income tax expense and had an effective tax rate of 25.0% and 24.9%, respectively. The slight increase in our effective tax rate for the three months ended September 30, 2020 compared with the same period in 2019 was primarily due to the release of an uncertain tax position during the three months ended September 30, 2019 with no corresponding release during the three months ended September 30, 2020. For the nine months ended September 30, 2020 and 2019, we recorded $129.9 million 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 and the nondeductible goodwill impairment recorded in the second quarter of 2020. During the three and nine months ended September 30, 2020, there were no significant changes to our uncertain tax positions. For more information, see Note 8, Income Taxes, of the Notes to Consolidated Financial Statements in “Part II, Item 8. Financial Statements and Supplementary Data” of our 2019 Annual Report on Form 10-K. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 7 . 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, 2020 2019 Raw materials $ 249.6 $ 271.5 Work in process 14.0 11.0 Finished goods 191.0 207.7 Supplies and materials 323.0 303.9 Inventories $ 777.6 $ 794.1 |
Property, Plant, and Equipment
Property, Plant, and Equipment | 9 Months Ended |
Sep. 30, 2020 | |
Property Plant And Equipment [Abstract] | |
Property, Plant, and Equipment | 8 . Property, Plant, and Equipment The components of property, plant, and equipment were as follows (dollars in millions): September 30, December 31, 2020 2019 Land and land improvements $ 178.3 $ 177.5 Buildings 847.6 837.4 Machinery and equipment 5,811.6 5,727.4 Construction in progress 280.6 174.0 Other 86.3 81.5 Property, plant and equipment, at cost 7,204.4 6,997.8 Less accumulated depreciation (4,073.5 ) (3,846.1 ) Property, plant, and equipment, net $ 3,130.9 $ 3,151.7 During the second quarter of 2020, with the exacerbated deterioration in uncoated freesheet market conditions arising from the COVID-19 pandemic and the estimated impact on our Paper segment and its projected future results of operations, we identified a triggering event indicating possible impairment of our long lived assets within our Paper segment, including property, plant, and equipment, and performed a recoverability test on the Paper reporting unit long lived assets as of May 31, 2020. The recoverability test was based on forecasts of undiscounted cash flows. The results of the recoverability test indicated that the long lived assets within our Paper segment, inclusive of property, plant, and equipment, were 100% recoverable. Depreciation expense for the three months ended September 30, 2020 and 2019 was $89.6 million and $87.6 million, respectively. During the nine months ended September 30, 2020 and 2019, depreciation expense was $272.7 million and $258.6 million, respectively. We recognized $2.9 million of incremental depreciation expense during the nine months ended September 30, 2020 as a result of the closure of the San Lorenzo, California corrugated products facility. We recognized $0.2 million At September 30, 2020 and December 31, 2019, purchases of property, plant, and equipment included in accounts payable were $33.1 million and $26.8 million, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 9 . Goodwill and Intangible Assets During the second quarter of 2020, with the exacerbated deterioration in uncoated freesheet market conditions arising from the COVID-19 pandemic and the estimated impact on our Paper segment and its projected future results of operations, we identified a triggering event indicating possible impairment of goodwill and our long lived assets within our Paper reporting unit. Goodwill Due to the triggering event identified above an interim quantitative impairment analysis was performed as of May 31, 2020 for the Paper reporting unit, which is the same as our Paper reportable segment. We estimated the fair value of the Paper reporting unit using a combination of the income approach and the market approach, as further described below. Based on the evaluation performed, we determined that the carrying value of the Paper reporting unit exceeded its fair value, which resulted in a goodwill impairment charge totaling $55.2 million. The impairment charge is included in “Goodwill impairment” on our unaudited Consolidated Statements of Income and Comprehensive Income for the nine months ended September 30, 2020 and is not tax deductible. For purposes of our goodwill impairment analysis, we estimated the fair value of the Paper reporting unit using a combination of the income approach and the market approach applying an equal weighting. The income approach incorporated the estimated future cash flows and a terminal value discounted to their present value using an appropriate risk-adjusted discount rate. The estimated future cash flows and terminal value were based on internal forecasts and industry trends, including the long-term outlook for the paper industry. Our expected cash flows include assumptions about industry pricing, expected paper demand, and anticipated input and conversion costs. The discount rate utilized in the income approach was 9%, which was derived using a capital asset pricing model based on relevant industry data to estimate the cost of equity financing. The discount rate is commensurate with the risks and uncertainties inherent in the business and the cash flow forecasts, updated for recent events. The market approach estimated the fair value of the Paper reporting unit by using valuation metrics of publicly traded companies or historically completed transactions of comparable businesses. The valuation of our Paper reporting unit requires significant judgment in evaluating recent indicators of market activity and estimated future cash flows, discount rates, and other factors. Our impairment analysis contains inherent uncertainties due to uncontrollable events that could positively or negatively impact anticipated future economic and operating conditions. In making these estimates, the weighted-average cost of capital is utilized to calculate the present value of future cash flows and terminal value. Many variables go into estimating future cash flows, including estimates of our future revenue growth and operating results. When estimating our projected revenue growth and future operating results, we considered industry trends, economic data, and our competitive situation. 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 both September 30, 2020 and December 31, 2019, we had $863.5 million of goodwill recorded in our Packaging segment. At September 30, 2020 and December 31, 2019, we had $0 million and $55.2 million of goodwill recorded in our Paper segment, respectively. Changes in the carrying amount of our goodwill are as follows (dollars in millions): Goodwill Balance at January 1, 2020 $ 918.7 Impairment of Paper segment (55.2 ) Balance at September 30, 2020 $ 863.5 Intangible Assets Intangible assets are primarily comprised of customer relationships and trademarks and trade names. As a result of the triggering event described above, we also performed a recoverability test on our long-lived assets within the Paper segment, including long lived intangible assets, as of May 31, 2020. The recoverability test was based on forecasts of undiscounted cash flows. The results of the recoverability test indicated that the long lived assets within our Paper segment, inclusive of the long lived intangible assets, were 100% recoverable. The weighted average remaining useful life, gross carrying amount, and accumulated amortization of our intangible assets were as follows (dollars in millions): September 30, 2020 December 31, 2019 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 (a) 9.3 $ 503.8 $ 211.4 10.0 $ 503.8 $ 180.2 Trademarks and trade names 9.3 34.8 22.4 9.5 34.8 20.6 Other 1.4 4.3 3.7 2.1 4.3 3.3 Total intangible assets (excluding goodwill) 9.3 $ 542.9 $ 237.5 9.9 $ 542.9 $ 204.1 __________________ (a) During the second quarter of 2020, the Company recorded a $4.5 million adjustment to decrease the remaining book value of the customer relationships intangible asset as a result of the closure of the San Lorenzo, California corrugated products facility. During the three months ended September 30, 2020 and 2019, amortization expense was $9.5 million |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Accrued Liabilities Current And Noncurrent [Abstract] | |
Accrued Liabilities | 1 0 . Accrued Liabilities The components of accrued liabilities were as follows (dollars in millions): September 30, December 31, 2020 2019 Compensation and benefits $ 130.3 $ 124.5 Customer volume discounts and rebates 27.8 27.9 Franchise, property, sales and use taxes 25.6 15.3 Medical insurance and workers’ compensation 25.3 26.3 Environmental liabilities and asset retirement obligations 5.0 5.6 Severance, retention, and relocation 3.6 3.5 Other 14.0 14.4 Total $ 231.6 $ 217.5 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 1 1 . Debt For the nine months ended September 30, 2020 and 2019, cash payments for interest were $56.9 million and $53.4 million, respectively. Included in interest expense, net is the amortization of financing costs, and, for 2019 only, the amortization of treasury lock settlements. The remaining balances of the treasury lock settlements were written off in connection with the debt refinancing completed in December 2019. For the three months ended September 30, 2020 and 2019, amortization of financing costs was $0.5 million At September 30, 2020, we had $2,493.5 million of fixed-rate senior notes outstanding. The fair value of our fixed-rate debt was estimated to be $2,776.3 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 2019 Annual Report on Form 10-K. For more information on our long-term debt and interest rates on that debt, see Note 11, Debt, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our 2019 Annual Report on Form 10-K. |
Cash, Cash Equivalents, and Mar
Cash, Cash Equivalents, and Marketable Debt Securities | 9 Months Ended |
Sep. 30, 2020 | |
Cash Cash Equivalents And Short Term Investments [Abstract] | |
Cash, Cash Equivalents, and Marketable Debt Securities | 12. Cash, Cash Equivalents, and Marketable Debt Securities The following table shows the Company’s cash and available-for-sale (AFS) debt securities by major asset category at September 30, 2020 and December 31, 2019 (in millions): September 30, 2020 Adjusted Cost Basis Unrealized Gain Unrealized Loss Fair Value Cash and Cash Equivalents Short-Term Marketable Debt Securities Long-Term Marketable Debt Securities Cash and cash equivalents $ 943.4 $ — $ — $ 943.4 $ 943.4 $ — $ — Level 1 (a) Money market funds 0.7 — — 0.7 0.7 — — U.S. Treasury securities 28.0 0.2 — 28.2 2.1 14.6 11.5 Subtotal 28.7 0.2 — 28.9 2.8 14.6 11.5 Level 2 (b) Certificates of deposit 1.2 — — 1.2 0.7 0.5 — U.S. government agency securities 8.1 — — 8.1 — 3.6 4.5 Corporate debt securities 113.4 0.5 — 113.9 2.2 82.5 29.2 Subtotal 122.7 0.5 — 123.2 2.9 86.6 33.7 Total $ 1,094.8 $ 0.7 $ — $ 1,095.5 $ 949.1 $ 101.2 $ 45.2 December 31, 2019 Adjusted Cost Basis Unrealized Gain Unrealized Loss Fair Value (c) Cash and Cash Equivalents Short-Term Marketable Debt Securities Long-Term Marketable Debt Securities Cash and cash equivalents $ 675.6 $ 675.6 $ 675.6 $ — $ — Level 1 (a) Money market funds 0.1 — — 0.1 0.1 — — U.S. Treasury securities 27.1 — — 27.1 3.1 11.5 12.5 Subtotal 27.2 27.2 3.2 11.5 12.5 Level 2 (b) Certificates of deposit 3.9 — — 3.9 — 3.9 — Commercial paper 5.6 — — 5.6 0.7 4.9 — U.S. government agency securities 7.0 — — 7.0 — 3.0 4.0 Corporate debt securities 106.2 — — 106.2 — 64.6 41.6 Subtotal 122.7 122.7 0.7 76.4 45.6 Total $ 825.5 $ — $ — $ 825.5 $ 679.5 $ 87.9 $ 58.1 (a) Valuations based on quoted prices for identical assets or liabilities in active markets. ( b ) Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. ( c ) Unrealized gains and losses were insignificant as of December 31, 2019. Therefore, the fair value approximates the adjusted cost basis for each major asset category. For the three and nine months ended September 30, 2020, net realized gains and losses on the sales and maturities of certain marketable debt securities were insignificant. The Company invests in highly rated securities, with the primary objective of minimizing the potential risk of principal loss. The Company’s investment policy requires securities to be investment grade and limits the amount of credit exposure to any one issuer. The maturities of the Company’s long-term marketable debt securities generally range from one to two years. Fair values were determined for each individual marketable debt security in the investment portfolio. The Company evaluates each individual security to determine whether the security is impaired. An impairment exists when a security’s fair value is below its amortized cost basis. The Company reviews each impaired investment to determine if the decline in fair value below the amortized cost basis resulted from a credit loss or other factors. If the impairment of a marketable debt security (or a portion of the impairment) is due to credit factors of the issuer, the Company records an allowance for credit losses. Non-credit related impairments are recorded in Other Comprehensive Income (OCI). PCA reviews factors such as the duration and extent to which the fair value of the marketable debt security is less than its cost, the financial condition of the issuer and any changes thereto, the general market condition in which the issuer operates, and ability of the issuer to make all required payments of the marketable debt security. PCA utilizes various credit rating services to provide information on the impaired investment of a particular issuer. As of September 30, 2020 and December 31, 2019, we do not consider any of our marketable debt securities to be other-than-temporarily impaired. Any impairment existing at September 30, 2020 or December 31, 2019 is not related to credit losses. Therefore, we have not recorded an allowance for credit losses related to our marketable debt securities. All unrealized gains and losses were recorded in OCI. The following table provides information about the Company’s marketable debt securities that have been in a continuous loss position as of September 30, 2020 and December 31, 2019 (in millions, except number of marketable debt securities in a loss position): September 30, 2020 December 31, 2019 Fair Value of Marketable Debt Securities Number of Marketable Debt Securities in a Loss Position Unrealized Losses (d) Fair Value of Marketable Debt Securities Number of Marketable Debt Securities in a Loss Position Unrealized Losses (d) Certificates of deposit $ 1.3 2 $ — $ — — $ — U.S. Treasury securities 0.5 1 — 14.0 9 — U.S. government agency securities — — — 0.8 1 — Corporate debt securities 39.2 48 — 63.3 61 — $ 41.0 51 $ — $ 78.1 71 $ — (d) Unrealized losses were insignificant |
Employee Benefit Plans and Othe
Employee Benefit Plans and Other Postretirement Benefits | 9 Months Ended |
Sep. 30, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans and Other Postretirement Benefits | 1 3 . 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, 2020 2019 2020 2019 Service cost $ 5.4 $ 6.1 $ 17.3 $ 18.4 Interest cost 9.9 11.7 29.8 35.2 Expected return on plan assets (14.2 ) (13.0 ) (42.6 ) (39.1 ) Net amortization of unrecognized amounts Prior service cost 1.1 1.6 3.3 4.7 Actuarial loss 2.7 1.7 8.1 5.3 Net periodic benefit cost $ 4.9 $ 8.1 $ 15.9 $ 24.5 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, 2020 and 2019, payments to our nonqualified pension plans were insignificant. For the three and nine months ended September 30, 2020, we made contributions of $71.4 million and $82.5 million, respectively, to our qualified pension plans. We made contributions of $49.4 million and $54.0 million to our qualified plans during the three and nine months ended September 30, 2019, respectively. For the three and nine months ended September 30, 2020 and 2019, the net periodic benefit cost for our postretirement plans was insignificant. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share Based Compensation [Abstract] | |
Share-Based Compensation | 1 4 . 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. On February 25, 2020, our board of directors approved and, on May 5, 2020, our stockholders approved, the amendment and restatement of the plan. The amendment extended the plan’s term to May 5, 2030 and increased the number of shares of common stock available for issuance under the plan by 1,400,000 shares. The total number of shares authorized for past and future awards is 11,950,000 shares. As of September 30, 2020, assuming performance units are measured at the target level of performance, 1.5 million shares were available for future grants under the current plan . The following table presents restricted stock and performance unit award activity for the nine months ended September 30, 2020: Restricted Stock Performance Units Shares Weighted Average Grant- Date Fair Value Shares Weighted Average Grant- Date Fair Value Outstanding at January 1, 2020 716,952 $ 94.50 323,147 $ 96.56 Granted 204,960 94.25 120,285 99.16 Vested (244,692 ) 72.09 (86,015 ) 70.81 Forfeitures (6,813 ) 99.73 — — Outstanding at September 30, 2020 670,407 $ 102.55 357,417 $ 103.63 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, 2020 2019 2020 2019 Restricted stock $ 3.2 $ 3.5 $ 16.8 $ 19.1 Performance units 2.8 2.4 7.0 5.4 Total share-based compensation expense 6.0 5.9 23.8 24.5 Income tax benefit (1.5 ) (1.5 ) (6.0 ) (6.2 ) Share-based compensation expense, net of tax benefit $ 4.5 $ 4.4 $ 17.8 $ 18.3 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 2020 and 2019, 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, 2020 was as follows (dollars in millions): September 30, 2020 Unrecognized Compensation Expense Remaining Weighted Average Recognition Period (in years) Restricted stock $ 29.1 2.7 Performance units 20.3 2.4 Total unrecognized share-based compensation expense $ 49.4 2.5 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | 1 5 . Stockholders' Equity Dividends During the nine months ended September 30, 2020, we paid $224.6 million of dividends to shareholders. On August 25, 2020, 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, 2020 to shareholders of record as of September 15, 2020. The dividend payment was $74.9 million. 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, 2020. At September 30, 2020, $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 Foreign Exchange Contracts Unrealized Loss on Marketable Debt Securities Unfunded Employee Benefit Obligations Total Balance at January 1, 2020 $ (0.4 ) $ (0.2 ) $ — $ (158.9 ) $ (159.5 ) Other comprehensive income before reclassifications, net of tax — 0.5 — 0.5 Amounts reclassified from AOCI, net of tax — — — 8.1 8.1 Balance at September 30, 2020 $ (0.4 ) $ (0.2 ) $ 0.5 $ (150.8 ) $ (150.9 ) 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 2020 2019 2020 2019 Unrealized loss on treasury locks, net (a) $ — $ (1.3 ) $ — $ (3.9 ) See (a) below — 0.3 — 1.0 Tax benefit $ — $ (1.0 ) $ — $ (2.9 ) Net of tax Unfunded employee benefit obligations (b) Amortization of prior service costs $ (1.0 ) $ (1.5 ) $ (3.0 ) $ (4.5 ) See (b) below Amortization of actuarial losses (2.6 ) (1.7 ) (7.8 ) (5.0 ) See (b) below (3.6 ) (3.2 ) (10.8 ) (9.5 ) Total before tax 0.9 0.8 2.7 2.4 Tax benefit $ (2.7 ) $ (2.4 ) $ (8.1 ) $ (7.1 ) Net of tax (a) For 2019, 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 remaining balances of the treasury locks were written off as a result of the Company’s November 2019 debt refinancing. For a discussion of treasury lock derivative instrument activity, see Note 16, Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our 2019 Annual Report on Form 10-K. (b) These AOCI components are included in the computation of net pension and postretirement benefit costs. See Note 13, Employee Benefit Plans and Other Postretirement Benefits, for additional information. |
Concentrations of Risk
Concentrations of Risk | 9 Months Ended |
Sep. 30, 2020 | |
Risks And Uncertainties [Abstract] | |
Concentration of Risk | 1 6 . 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 5% and 7% of our total Company sales revenue for the nine month periods ended September 30, 2020 and 2019, respectively, and approximately |
Transactions With Related Parti
Transactions With Related Parties | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Transactions With Related Parties | 17 . 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 $2.8 million at September 30, 2020 and $3.9 million at December 31, 2019. During the three months ended September 30, 2020 and 2019, we recorded $15.6 million and $21.4 million, respectively, and during the nine months ended September 30, 2020 and 2019, we recorded $52.0 million and $62.7 million, respectively, of LTP sales to Boise Cascade in "Net Sales" in the Consolidated Statements of Income and approximately the same amount of expenses in "Cost of Sales". During the three months ended September 30, 2020 and 2019, fiber purchases from related parties were $2.8 million and $4.4 million , 2020 and 2019. Most of these purchases related to chip and log purchases by LTP from Boise Cascade's wood products business. These purchases are recorded in "Cost of Sales" in the Consolidated Statements of Income. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | 1 8 . 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, 2020 Trade Intersegment Total Operating Income (Loss) Packaging $ 1,497.6 $ 3.5 $ 1,501.1 $ 222.4 (a) Paper 178.1 — 178.1 7.3 Corporate and Other 18.0 30.8 48.8 (20.2 ) Intersegment eliminations — (34.3 ) (34.3 ) — $ 1,693.7 $ — $ 1,693.7 209.5 Non-operating pension income 0.6 Interest expense, net (24.4 ) Income before taxes $ 185.7 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 (d) 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 Nine Months Ended September 30, 2020 Trade Intersegment Total Operating Income (Loss) Packaging $ 4,364.8 $ 13.7 $ 4,378.5 $ 619.9 (a)(b) Paper 518.7 — 518.7 (21.7 ) (b)(c) Corporate and Other 60.5 99.2 159.7 (63.5 ) Intersegment eliminations — (112.9 ) (112.9 ) — $ 4,944.0 $ — $ 4,944.0 534.7 Non-operating pension income 1.7 Interest expense, net (69.1 ) Income before taxes $ 467.3 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 (d)(e) Paper 720.3 — 720.3 132.5 (e) 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 (a) The three and nine months ended September 30, 2020 include the following: (b) The nine months ended September 30, 2020 include $6.9 million of incremental, out-of-pocket costs related to COVID-19 that were incurred in the first half of 2020. Costs include materials, cleaning supplies, and sick pay as well as expenses for establishing processes and logistics for the new work requirements in all of our facilities for mitigating the spread of the virus within the Company. With the process now established, we anticipate any corresponding COVID-19 related expenses to be included in normalized costs through the span of the pandemic. (c ) (d ) The three 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. (e ) The nine months ended September 30, 2019 include $0.6 million 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 produce virgin kraft linerboard. |
Commitments, Guarantees, Indemn
Commitments, Guarantees, Indemnifications and Legal Proceedings | 9 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments, Guarantees, Indemnifications and Legal Proceedings | 19 . 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 11, Debt, and Note 21, 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 2019 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, 2020, 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, which has been satisfied in full as a result of settlement of various lawsuits and fees and expenses incurred by the Company. All pending lawsuits are in the early stages. Accordingly, the Company is unable to estimate a range of reasonable possible losses at this time. The 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. PCA denies the violations set forth in the NOV and has requested that the EPA’s Office of Air Quality Planning and Standards provide an applicability determination to clarify that the relevant operations of PCA have not violated the regulations at issue in the NOV. The EPA denied our request in 2020. We intend to vigorously defend any enforcement action and, on July 27, 2020, filed a petition with the EPA to reconsider its denial of our applicability determination and filed petitions in U.S. federal court to review the agency’s denial of our applicability determination as well as the rule at issue. While we cannot predict with certainty the ultimate resolution of this matter, we believe that we have a meritorious position that our operations have not violated the Clean Air Act, 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, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Accounting and Presentation | The consolidated financial statements of PCA as of September 30, 2020 and for the three and nine months ended September 30, 2020 and 2019 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, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. These consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2019. |
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, 2020, we adopted Accounting Standards Update (“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. ASU 2016-13 was applied using the modified retrospective method, and as a result, amounts recorded prior to January 1, 2020 have not been retrospectively restated. 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. Prior to adoption of the new standard, the Company already incorporated forward-looking information into its estimate of credit losses for trade receivables. Due to the short duration of the Company’s trade receivables, the adoption of ASU 2016-13 did not have a material impact on trade receivables. The adoption of ASU 2016-13 also did not have a material impact on the Company’s AFS marketable debt securities, as the Company only invests in highly-rated AFS marketable debt securities. Overall, the adoption of ASU 2016-13 did not have a material impact on the Company’s financial condition, results of operations or cash flow. Effective January 1, 2020, the Company adopted ASU 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. |
New Accounting Standards Not Yet Adopted | New Accounting Standards Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. The amendments in this Update are elective and apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Companies can apply the ASU immediately, but the guidance will only be available until December 31, 2022. The Company is currently evaluating the impact of this guidance, but does not expect the guidance to have a significant impact on its related disclosures. In August 2018, the 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 on a retrospective basis. The Company is currently evaluating the impact of this guidance, but does not expect the guidance will have a significant impact on its related disclosures. 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, 2020 2019 2020 2019 Packaging $ 1,501.1 $ 1,489.9 $ 4,378.5 $ 4,472.1 Paper 178.1 242.8 518.7 720.3 Corporate and Other 14.5 18.0 46.8 51.9 Total revenue $ 1,693.7 $ 1,750.7 $ 4,944.0 $ 5,244.3 |
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. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 2019 2020 2019 Packaging $ 1,501.1 $ 1,489.9 $ 4,378.5 $ 4,472.1 Paper 178.1 242.8 518.7 720.3 Corporate and Other 14.5 18.0 46.8 51.9 Total revenue $ 1,693.7 $ 1,750.7 $ 4,944.0 $ 5,244.3 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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: 2020 2019 2020 2019 Net income $ 139.1 $ 179.8 $ 337.4 $ 560.2 Less: Distributed and undistributed earnings allocated to participating securities (1.0 ) (1.3 ) (2.7 ) (4.2 ) Net income attributable to common shareholders $ 138.1 $ 178.5 $ 334.7 $ 556.0 Denominator: Weighted average basic common shares outstanding 94.2 93.9 94.0 93.8 Effect of dilutive securities 0.3 0.4 0.4 0.3 Weighted average diluted common shares outstanding 94.5 94.3 94.4 94.1 Basic income per common share $ 1.47 $ 1.90 $ 3.56 $ 5.93 Diluted income per common share $ 1.46 $ 1.89 $ 3.54 $ 5.91 |
Other Expense, Net (Tables)
Other Expense, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Income And Expenses [Abstract] | |
Components of Other Expense, Net | The components of other expense, net, were as follows (dollars in millions): Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Asset disposals and write-offs $ (5.5 ) $ (9.5 ) $ (16.5 ) $ (18.3 ) Facilities closure and other costs (a) (2.9 ) — (16.6 ) — Wallula mill restructuring (b) — — — (0.4 ) Other (0.4 ) (2.2 ) (3.8 ) (2.8 ) Total $ (8.8 ) $ (11.7 ) $ (36.9 ) $ (21.5 ) ________________ (a) Includes charges consisting of closure costs related to corrugated products facilities, substantially all of which relates to the previously announced closure of the San Lorenzo, California facility during the second quarter of 2020, partially offset by income related to the sale of a corrugated products facility during the second quarter. (b ) Includes 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 produce virgin kraft linerboard. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The components of inventories were as follows (dollars in millions): September 30, December 31, 2020 2019 Raw materials $ 249.6 $ 271.5 Work in process 14.0 11.0 Finished goods 191.0 207.7 Supplies and materials 323.0 303.9 Inventories $ 777.6 $ 794.1 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 2019 Land and land improvements $ 178.3 $ 177.5 Buildings 847.6 837.4 Machinery and equipment 5,811.6 5,727.4 Construction in progress 280.6 174.0 Other 86.3 81.5 Property, plant and equipment, at cost 7,204.4 6,997.8 Less accumulated depreciation (4,073.5 ) (3,846.1 ) Property, plant, and equipment, net $ 3,130.9 $ 3,151.7 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 $ 918.7 Impairment of Paper segment (55.2 ) Balance at September 30, 2020 $ 863.5 |
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, 2020 December 31, 2019 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 (a) 9.3 $ 503.8 $ 211.4 10.0 $ 503.8 $ 180.2 Trademarks and trade names 9.3 34.8 22.4 9.5 34.8 20.6 Other 1.4 4.3 3.7 2.1 4.3 3.3 Total intangible assets (excluding goodwill) 9.3 $ 542.9 $ 237.5 9.9 $ 542.9 $ 204.1 __________________ (a) During the second quarter of 2020, the Company recorded a $4.5 million adjustment to decrease the remaining book value of the customer relationships intangible asset as a result of the closure of the San Lorenzo, California corrugated products facility. |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 2019 Compensation and benefits $ 130.3 $ 124.5 Customer volume discounts and rebates 27.8 27.9 Franchise, property, sales and use taxes 25.6 15.3 Medical insurance and workers’ compensation 25.3 26.3 Environmental liabilities and asset retirement obligations 5.0 5.6 Severance, retention, and relocation 3.6 3.5 Other 14.0 14.4 Total $ 231.6 $ 217.5 |
Cash, Cash Equivalents, and M_2
Cash, Cash Equivalents, and Marketable Debt Securities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Cash Cash Equivalents And Short Term Investments [Abstract] | |
Schedule of Cash and Available-For-Sale Debt Securities by Major Asset Category | The following table shows the Company’s cash and available-for-sale (AFS) debt securities by major asset category at September 30, 2020 and December 31, 2019 (in millions): September 30, 2020 Adjusted Cost Basis Unrealized Gain Unrealized Loss Fair Value Cash and Cash Equivalents Short-Term Marketable Debt Securities Long-Term Marketable Debt Securities Cash and cash equivalents $ 943.4 $ — $ — $ 943.4 $ 943.4 $ — $ — Level 1 (a) Money market funds 0.7 — — 0.7 0.7 — — U.S. Treasury securities 28.0 0.2 — 28.2 2.1 14.6 11.5 Subtotal 28.7 0.2 — 28.9 2.8 14.6 11.5 Level 2 (b) Certificates of deposit 1.2 — — 1.2 0.7 0.5 — U.S. government agency securities 8.1 — — 8.1 — 3.6 4.5 Corporate debt securities 113.4 0.5 — 113.9 2.2 82.5 29.2 Subtotal 122.7 0.5 — 123.2 2.9 86.6 33.7 Total $ 1,094.8 $ 0.7 $ — $ 1,095.5 $ 949.1 $ 101.2 $ 45.2 December 31, 2019 Adjusted Cost Basis Unrealized Gain Unrealized Loss Fair Value (c) Cash and Cash Equivalents Short-Term Marketable Debt Securities Long-Term Marketable Debt Securities Cash and cash equivalents $ 675.6 $ 675.6 $ 675.6 $ — $ — Level 1 (a) Money market funds 0.1 — — 0.1 0.1 — — U.S. Treasury securities 27.1 — — 27.1 3.1 11.5 12.5 Subtotal 27.2 27.2 3.2 11.5 12.5 Level 2 (b) Certificates of deposit 3.9 — — 3.9 — 3.9 — Commercial paper 5.6 — — 5.6 0.7 4.9 — U.S. government agency securities 7.0 — — 7.0 — 3.0 4.0 Corporate debt securities 106.2 — — 106.2 — 64.6 41.6 Subtotal 122.7 122.7 0.7 76.4 45.6 Total $ 825.5 $ — $ — $ 825.5 $ 679.5 $ 87.9 $ 58.1 (a) Valuations based on quoted prices for identical assets or liabilities in active markets. ( b ) Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. ( c ) Unrealized gains and losses were insignificant as of December 31, 2019. Therefore, the fair value approximates the adjusted cost basis for each major asset category. |
Schedule of Marketable Debt Securities in Continuous Loss Position | The following table provides information about the Company’s marketable debt securities that have been in a continuous loss position as of September 30, 2020 and December 31, 2019 (in millions, except number of marketable debt securities in a loss position): September 30, 2020 December 31, 2019 Fair Value of Marketable Debt Securities Number of Marketable Debt Securities in a Loss Position Unrealized Losses (d) Fair Value of Marketable Debt Securities Number of Marketable Debt Securities in a Loss Position Unrealized Losses (d) Certificates of deposit $ 1.3 2 $ — $ — — $ — U.S. Treasury securities 0.5 1 — 14.0 9 — U.S. government agency securities — — — 0.8 1 — Corporate debt securities 39.2 48 — 63.3 61 — $ 41.0 51 $ — $ 78.1 71 $ — (d) Unrealized losses were insignificant |
Employee Benefit Plans and Ot_2
Employee Benefit Plans and Other Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 2019 2020 2019 Service cost $ 5.4 $ 6.1 $ 17.3 $ 18.4 Interest cost 9.9 11.7 29.8 35.2 Expected return on plan assets (14.2 ) (13.0 ) (42.6 ) (39.1 ) Net amortization of unrecognized amounts Prior service cost 1.1 1.6 3.3 4.7 Actuarial loss 2.7 1.7 8.1 5.3 Net periodic benefit cost $ 4.9 $ 8.1 $ 15.9 $ 24.5 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020: Restricted Stock Performance Units Shares Weighted Average Grant- Date Fair Value Shares Weighted Average Grant- Date Fair Value Outstanding at January 1, 2020 716,952 $ 94.50 323,147 $ 96.56 Granted 204,960 94.25 120,285 99.16 Vested (244,692 ) 72.09 (86,015 ) 70.81 Forfeitures (6,813 ) 99.73 — — Outstanding at September 30, 2020 670,407 $ 102.55 357,417 $ 103.63 |
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, 2020 2019 2020 2019 Restricted stock $ 3.2 $ 3.5 $ 16.8 $ 19.1 Performance units 2.8 2.4 7.0 5.4 Total share-based compensation expense 6.0 5.9 23.8 24.5 Income tax benefit (1.5 ) (1.5 ) (6.0 ) (6.2 ) Share-based compensation expense, net of tax benefit $ 4.5 $ 4.4 $ 17.8 $ 18.3 |
Unrecognized Compensation Expense for Share-Based Awards | The unrecognized compensation expense for all share-based awards at September 30, 2020 was as follows (dollars in millions): September 30, 2020 Unrecognized Compensation Expense Remaining Weighted Average Recognition Period (in years) Restricted stock $ 29.1 2.7 Performance units 20.3 2.4 Total unrecognized share-based compensation expense $ 49.4 2.5 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 Foreign Exchange Contracts Unrealized Loss on Marketable Debt Securities Unfunded Employee Benefit Obligations Total Balance at January 1, 2020 $ (0.4 ) $ (0.2 ) $ — $ (158.9 ) $ (159.5 ) Other comprehensive income before reclassifications, net of tax — 0.5 — 0.5 Amounts reclassified from AOCI, net of tax — — — 8.1 8.1 Balance at September 30, 2020 $ (0.4 ) $ (0.2 ) $ 0.5 $ (150.8 ) $ (150.9 ) |
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 2020 2019 2020 2019 Unrealized loss on treasury locks, net (a) $ — $ (1.3 ) $ — $ (3.9 ) See (a) below — 0.3 — 1.0 Tax benefit $ — $ (1.0 ) $ — $ (2.9 ) Net of tax Unfunded employee benefit obligations (b) Amortization of prior service costs $ (1.0 ) $ (1.5 ) $ (3.0 ) $ (4.5 ) See (b) below Amortization of actuarial losses (2.6 ) (1.7 ) (7.8 ) (5.0 ) See (b) below (3.6 ) (3.2 ) (10.8 ) (9.5 ) Total before tax 0.9 0.8 2.7 2.4 Tax benefit $ (2.7 ) $ (2.4 ) $ (8.1 ) $ (7.1 ) Net of tax (a) For 2019, 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 remaining balances of the treasury locks were written off as a result of the Company’s November 2019 debt refinancing. For a discussion of treasury lock derivative instrument activity, see Note 16, Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our 2019 Annual Report on Form 10-K. (b) These AOCI components are included in the computation of net pension and postretirement benefit costs. See Note 13, Employee Benefit Plans and Other Postretirement Benefits, for additional information. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 Trade Intersegment Total Operating Income (Loss) Packaging $ 1,497.6 $ 3.5 $ 1,501.1 $ 222.4 (a) Paper 178.1 — 178.1 7.3 Corporate and Other 18.0 30.8 48.8 (20.2 ) Intersegment eliminations — (34.3 ) (34.3 ) — $ 1,693.7 $ — $ 1,693.7 209.5 Non-operating pension income 0.6 Interest expense, net (24.4 ) Income before taxes $ 185.7 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 (d) 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 Nine Months Ended September 30, 2020 Trade Intersegment Total Operating Income (Loss) Packaging $ 4,364.8 $ 13.7 $ 4,378.5 $ 619.9 (a)(b) Paper 518.7 — 518.7 (21.7 ) (b)(c) Corporate and Other 60.5 99.2 159.7 (63.5 ) Intersegment eliminations — (112.9 ) (112.9 ) — $ 4,944.0 $ — $ 4,944.0 534.7 Non-operating pension income 1.7 Interest expense, net (69.1 ) Income before taxes $ 467.3 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 (d)(e) Paper 720.3 — 720.3 132.5 (e) 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 (a) The three and nine months ended September 30, 2020 include the following: (b) The nine months ended September 30, 2020 include $6.9 million of incremental, out-of-pocket costs related to COVID-19 that were incurred in the first half of 2020. Costs include materials, cleaning supplies, and sick pay as well as expenses for establishing processes and logistics for the new work requirements in all of our facilities for mitigating the spread of the virus within the Company. With the process now established, we anticipate any corresponding COVID-19 related expenses to be included in normalized costs through the span of the pandemic. (c ) (d ) The three 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. (e ) The nine months ended September 30, 2019 include $0.6 million of charges related to the second quarter 2018 discontinuation of uncoated free sheet and coated one-side grades at the Wallula, Washington mill associated with the conversion of the No. 3 paper machine to produce virgin kraft linerboard. |
Nature of Operations and Basi_3
Nature of Operations and Basis of Presentation - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2020Segment | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Date of incorporation | Jan. 25, 1999 |
Number of reportable segments | 3 |
Revenue - Summary of Revenues D
Revenue - Summary of Revenues Disaggregated by Product Line (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation Of Revenue [Line Items] | ||||
Revenue | $ 1,693.7 | $ 1,750.7 | $ 4,944 | $ 5,244.3 |
Packaging | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 1,501.1 | 1,489.9 | 4,378.5 | 4,472.1 |
Paper | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 178.1 | 242.8 | 518.7 | 720.3 |
Corporate and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | $ 14.5 | $ 18 | $ 46.8 | $ 51.9 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2020 | |
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% |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||
Net income | $ 139.1 | $ 179.8 | $ 337.4 | $ 560.2 |
Less: Distributed and undistributed earnings allocated to participating securities | (1) | (1.3) | (2.7) | (4.2) |
Net income attributable to common shareholders | $ 138.1 | $ 178.5 | $ 334.7 | $ 556 |
Denominator: | ||||
Weighted average basic common shares outstanding (in shares) | 94.2 | 93.9 | 94 | 93.8 |
Effect of dilutive securities (in shares) | 0.3 | 0.4 | 0.4 | 0.3 |
Weighted average diluted common shares outstanding (in shares) | 94.5 | 94.3 | 94.4 | 94.1 |
Basic income per common share (in dollars per share) | $ 1.47 | $ 1.90 | $ 3.56 | $ 5.93 |
Diluted income per common share (in dollars per share) | $ 1.46 | $ 1.89 | $ 3.54 | $ 5.91 |
Other Expense, Net - Components
Other Expense, Net - Components of Other Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Asset disposals and write-offs | $ (5.5) | $ (9.5) | $ (16.5) | $ (18.3) | |
Facilities closure and other costs | [1] | (2.9) | (16.6) | ||
Other | (0.4) | (2.2) | (3.8) | (2.8) | |
Total | $ (8.8) | $ (11.7) | $ (36.9) | (21.5) | |
Wallula, Washington Mill | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Restructuring | [2] | $ (0.4) | |||
[1] | Includes charges consisting of closure costs related to corrugated products facilities, substantially all of which relates to the previously announced closure of the San Lorenzo, California facility during the second quarter of 2020, partially offset by income related to the sale of a corrugated products facility during the second quarter. | ||||
[2] | Includes 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 produce virgin kraft linerboard. |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision | $ 46.6 | $ 59.5 | $ 129.9 | $ 184.4 |
Effective income tax rate, percent | 25.00% | 24.90% | 27.80% | 24.80% |
Federal statutory income tax rate | 21.00% | |||
Cash paid for taxes, net of refunds received | $ 65 | $ 138.2 |
Inventories - Components of Inv
Inventories - Components of Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 249.6 | $ 271.5 |
Work in process | 14 | 11 |
Finished goods | 191 | 207.7 |
Supplies and materials | 323 | 303.9 |
Inventories | $ 777.6 | $ 794.1 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment - Components of Property, Plant, and Equipment (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant, And Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 7,204.4 | $ 6,997.8 |
Less accumulated depreciation | (4,073.5) | (3,846.1) |
Property, plant, and equipment, net | 3,130.9 | 3,151.7 |
Land and Land Improvements | ||
Property, Plant, And Equipment [Line Items] | ||
Property, plant and equipment, at cost | 178.3 | 177.5 |
Buildings | ||
Property, Plant, And Equipment [Line Items] | ||
Property, plant and equipment, at cost | 847.6 | 837.4 |
Machinery and Equipment | ||
Property, Plant, And Equipment [Line Items] | ||
Property, plant and equipment, at cost | 5,811.6 | 5,727.4 |
Construction in Progress | ||
Property, Plant, And Equipment [Line Items] | ||
Property, plant and equipment, at cost | 280.6 | 174 |
Other | ||
Property, Plant, And Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 86.3 | $ 81.5 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | May 31, 2020 | |
Depreciation [Abstract] | ||||||
Depreciation expense | $ 89.6 | $ 87.6 | $ 272.7 | $ 258.6 | ||
Incremental depreciation | 2.9 | $ 0.2 | ||||
Purchases of property, plant, and equipment included in accounts payable | $ 33.1 | $ 26.8 | ||||
Paper | ||||||
Property, Plant, And Equipment [Line Items] | ||||||
Recoverability test results recoverable percentage | 100.00% |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets -Goodwill - Additional Information (Details) - USD ($) $ in Millions | May 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Goodwill [Line Items] | |||
Goodwill impairment charge | $ 55.2 | ||
Discount rate utilized | 0.09 | ||
Alternative Investment, Valuation Technique [Extensible List] | us-gaap:IncomeApproachValuationTechniqueMember | ||
Alternative Investment, Measurement Input [Extensible List] | us-gaap:MeasurementInputDiscountRateMember | ||
Goodwill | 863.5 | $ 918.7 | |
Packaging | |||
Goodwill [Line Items] | |||
Goodwill | 863.5 | 863.5 | |
Paper | |||
Goodwill [Line Items] | |||
Goodwill | $ 0 | $ 55.2 | |
Recoverability test results recoverable percentage | 100.00% | ||
Paper Reporting Unit | |||
Goodwill [Line Items] | |||
Goodwill impairment charge | $ 55.2 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Beginning Balance | $ 918.7 |
Impairment of Paper segment | (55.2) |
Ending Balance | $ 863.5 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Components of Intangible Assets (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | ||
Finite Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Useful Life (in Years) | 9 years 3 months 18 days | 9 years 10 months 24 days | |
Gross Carrying Amount | $ 542.9 | $ 542.9 | |
Accumulated Amortization | $ 237.5 | $ 204.1 | |
Customer Relationships | |||
Finite Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Useful Life (in Years) | [1] | 9 years 3 months 18 days | 10 years |
Gross Carrying Amount | [1] | $ 503.8 | $ 503.8 |
Accumulated Amortization | [1] | $ 211.4 | $ 180.2 |
Trademarks and Trade Names | |||
Finite Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Useful Life (in Years) | 9 years 3 months 18 days | 9 years 6 months | |
Gross Carrying Amount | $ 34.8 | $ 34.8 | |
Accumulated Amortization | $ 22.4 | $ 20.6 | |
Other Intangible Assets | |||
Finite Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Useful Life (in Years) | 1 year 4 months 24 days | 2 years 1 month 6 days | |
Gross Carrying Amount | $ 4.3 | $ 4.3 | |
Accumulated Amortization | $ 3.7 | $ 3.3 | |
[1] | During the second quarter of 2020, the Company recorded a $4.5 million adjustment to decrease the remaining book value of the customer relationships intangible asset as a result of the closure of the San Lorenzo, California corrugated products facility. |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Components of Intangible Assets (Parenthetical) (Details) $ in Millions | 3 Months Ended |
Jun. 30, 2020USD ($) | |
Customer Relationships | |
Finite Lived Intangible Assets [Line Items] | |
Adjustment to decrease the remaining book value of intangible asset | $ 4.5 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets - Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Intangible assets amortization expense | $ 9.5 | $ 9.7 | $ 33.4 | $ 28.9 |
Accrued Liabilities - Component
Accrued Liabilities - Components of Accrued Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Accrued Liabilities Current [Abstract] | ||
Compensation and benefits | $ 130.3 | $ 124.5 |
Customer volume discounts and rebates | 27.8 | 27.9 |
Franchise, property, sales and use taxes | 25.6 | 15.3 |
Medical insurance and workers’ compensation | 25.3 | 26.3 |
Environmental liabilities and asset retirement obligations | 5 | 5.6 |
Severance, retention, and relocation | 3.6 | 3.5 |
Other | 14 | 14.4 |
Total | $ 231.6 | $ 217.5 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Debt Instrument [Line Items] | ||||
Cash payments paid for interest | $ 56.9 | $ 53.4 | ||
Amortization of treasury lock settlements | $ 1.3 | 3.9 | ||
Amortization of financing costs | $ 0.5 | $ 0.7 | 1.5 | $ 2.1 |
Senior Notes | Fixed-Rate Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Book value of fixed rate debt | 2,493.5 | 2,493.5 | ||
Long-term debt (fixed-rate debt), fair value | $ 2,776.3 | $ 2,776.3 |
Cash, Cash Equivalents, and M_3
Cash, Cash Equivalents, and Marketable Debt Securities - Schedule of Company's Cash and Available-For-Sale (AFS) Debt Securities by Major Asset Category (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2020 | Dec. 31, 2019 | |||
Financial Instruments [Line Items] | ||||
Adjusted Cost Basis | $ 1,094.8 | $ 825.5 | ||
Unrealized Gain | 0.7 | |||
Fair Value | 1,095.5 | 825.5 | [1] | |
Cash and cash equivalents | 949.1 | 679.5 | ||
Short-term marketable debt securities | 101.2 | 87.9 | ||
Long-term marketable debt securities | 45.2 | 58.1 | ||
Level 1 | ||||
Financial Instruments [Line Items] | ||||
Adjusted Cost Basis | [2] | 28.7 | 27.2 | |
Unrealized Gain | [2] | 0.2 | ||
Fair Value | [2] | 28.9 | 27.2 | [1] |
Cash and cash equivalents | [2] | 2.8 | 3.2 | |
Short-term marketable debt securities | [2] | 14.6 | 11.5 | |
Long-term marketable debt securities | [2] | 11.5 | 12.5 | |
Level 2 | ||||
Financial Instruments [Line Items] | ||||
Adjusted Cost Basis | [3] | 122.7 | 122.7 | |
Unrealized Gain | [3] | 0.5 | ||
Fair Value | [3] | 123.2 | 122.7 | [1] |
Cash and cash equivalents | [3] | 2.9 | 0.7 | |
Short-term marketable debt securities | [3] | 86.6 | 76.4 | |
Long-term marketable debt securities | [3] | 33.7 | 45.6 | |
Cash and Cash Equivalents | ||||
Financial Instruments [Line Items] | ||||
Adjusted Cost Basis | 943.4 | 675.6 | ||
Fair Value | 943.4 | 675.6 | [1] | |
Cash and cash equivalents | 943.4 | 675.6 | ||
Money Market Fund | Level 1 | ||||
Financial Instruments [Line Items] | ||||
Adjusted Cost Basis | [2] | 0.7 | 0.1 | |
Fair Value | [2] | 0.7 | 0.1 | [1] |
Cash and cash equivalents | [2] | 0.7 | 0.1 | |
U.S. Treasury Securities | Level 1 | ||||
Financial Instruments [Line Items] | ||||
Adjusted Cost Basis | [2] | 28 | 27.1 | |
Unrealized Gain | [2] | 0.2 | ||
Fair Value | [2] | 28.2 | 27.1 | [1] |
Cash and cash equivalents | [2] | 2.1 | 3.1 | |
Short-term marketable debt securities | [2] | 14.6 | 11.5 | |
Long-term marketable debt securities | [2] | 11.5 | 12.5 | |
Certificates of Deposit | Level 2 | ||||
Financial Instruments [Line Items] | ||||
Adjusted Cost Basis | [3] | 1.2 | 3.9 | |
Fair Value | [3] | 1.2 | 3.9 | [1] |
Cash and cash equivalents | [3] | 0.7 | ||
Short-term marketable debt securities | [3] | 0.5 | 3.9 | |
Commercial Paper | Level 2 | ||||
Financial Instruments [Line Items] | ||||
Adjusted Cost Basis | [3] | 5.6 | ||
Fair Value | [1],[3] | 5.6 | ||
Cash and cash equivalents | [3] | 0.7 | ||
Short-term marketable debt securities | [3] | 4.9 | ||
U.S. Government Agency Securities | Level 2 | ||||
Financial Instruments [Line Items] | ||||
Adjusted Cost Basis | [3] | 8.1 | 7 | |
Fair Value | [3] | 8.1 | 7 | [1] |
Short-term marketable debt securities | [3] | 3.6 | 3 | |
Long-term marketable debt securities | [3] | 4.5 | 4 | |
Corporate Debt Securities | Level 2 | ||||
Financial Instruments [Line Items] | ||||
Adjusted Cost Basis | [3] | 113.4 | 106.2 | |
Unrealized Gain | [3] | 0.5 | ||
Fair Value | [3] | 113.9 | 106.2 | [1] |
Cash and cash equivalents | [3] | 2.2 | ||
Short-term marketable debt securities | [3] | 82.5 | 64.6 | |
Long-term marketable debt securities | [3] | $ 29.2 | $ 41.6 | |
[1] | Unrealized gains and losses were insignificant as of December 31, 2019. Therefore, the fair value approximates the adjusted cost basis for each major asset category. | |||
[2] | Valuations based on quoted prices for identical assets or liabilities in active markets. | |||
[3] | Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. |
Cash, Cash Equivalents, and M_4
Cash, Cash Equivalents, and Marketable Debt Securities - Additional Information (Details) | Sep. 30, 2020 |
Minimum | |
Financial Instruments [Line Items] | |
Long-term marketable debt securities maturity period | 1 year |
Maximum | |
Financial Instruments [Line Items] | |
Long-term marketable debt securities maturity period | 2 years |
Cash, Cash Equivalents, and M_5
Cash, Cash Equivalents, and Marketable Debt Securities - Schedule of Marketable Debt Securities in Continuous Loss Position (Details) $ in Millions | Sep. 30, 2020USD ($)security | Dec. 31, 2019USD ($)security |
Schedule Of Available For Sale Securities [Line Items] | ||
Fair Value of Marketable Debt Securities | $ | $ 41 | $ 78.1 |
Number of Marketable Debt Securities in a Loss Position | security | 51 | 71 |
Certificates of Deposit | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Fair Value of Marketable Debt Securities | $ | $ 1.3 | |
Number of Marketable Debt Securities in a Loss Position | security | 2 | |
U.S. Treasury Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Fair Value of Marketable Debt Securities | $ | $ 0.5 | $ 14 |
Number of Marketable Debt Securities in a Loss Position | security | 1 | 9 |
U.S. Government Agency Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Fair Value of Marketable Debt Securities | $ | $ 0.8 | |
Number of Marketable Debt Securities in a Loss Position | security | 1 | |
Corporate Debt Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Fair Value of Marketable Debt Securities | $ | $ 39.2 | $ 63.3 |
Number of Marketable Debt Securities in a Loss Position | security | 48 | 61 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 5.4 | $ 6.1 | $ 17.3 | $ 18.4 |
Interest cost | 9.9 | 11.7 | 29.8 | 35.2 |
Expected return on plan assets | (14.2) | (13) | (42.6) | (39.1) |
Net amortization of unrecognized amounts, Prior service cost | 1.1 | 1.6 | 3.3 | 4.7 |
Net amortization of unrecognized amounts, Actuarial loss (income) | 2.7 | 1.7 | 8.1 | 5.3 |
Net periodic benefit cost | $ 4.9 | $ 8.1 | $ 15.9 | $ 24.5 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Pension Plans | Qualified Plan | ||||
Pension Contributions [Abstract] | ||||
Contributions to pension plan | $ 71.4 | $ 49.4 | $ 82.5 | $ 54 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - shares | Feb. 25, 2020 | Sep. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for future grants under share-based plan | 1,400,000 | 1,500,000 |
Number of shares authorized under plan | 11,950,000 | |
Long-term equity incentive plan, termination date | May 5, 2030 | |
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, 2020$ / sharesshares | |
Restricted Stock | |
Restricted Stock and Performance Units [Roll Forward] | |
Outstanding at January 1, 2020 | shares | 716,952 |
Granted | shares | 204,960 |
Vested | shares | (244,692) |
Forfeitures | shares | (6,813) |
Outstanding at September 30, 2020 | shares | 670,407 |
Restricted Stock and Performance Units (Weighted Average Grant-date Fair Value) [Abstract] | |
Weighted Average Grant-Date Fair Value, Outstanding at January 1, 2020 | $ / shares | $ 94.50 |
Weighted Average Grant-Date Fair Value, Granted | $ / shares | 94.25 |
Weighted Average Grant-Date Fair Value, Vested | $ / shares | 72.09 |
Weighted Average Grant-Date Fair Value, Forfeitures | $ / shares | 99.73 |
Weighted Average Grant-Date Fair Value, Outstanding at September 30, 2020 | $ / shares | $ 102.55 |
Performance Units | |
Restricted Stock and Performance Units [Roll Forward] | |
Outstanding at January 1, 2020 | shares | 323,147 |
Granted | shares | 120,285 |
Vested | shares | (86,015) |
Outstanding at September 30, 2020 | shares | 357,417 |
Restricted Stock and Performance Units (Weighted Average Grant-date Fair Value) [Abstract] | |
Weighted Average Grant-Date Fair Value, Outstanding at January 1, 2020 | $ / shares | $ 96.56 |
Weighted Average Grant-Date Fair Value, Granted | $ / shares | 99.16 |
Weighted Average Grant-Date Fair Value, Vested | $ / shares | 70.81 |
Weighted Average Grant-Date Fair Value, Outstanding at September 30, 2020 | $ / shares | $ 103.63 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense | $ 6 | $ 5.9 | $ 23.8 | $ 24.5 |
Income tax benefit | (1.5) | (1.5) | (6) | (6.2) |
Share-based compensation expense, net of tax benefit | 4.5 | 4.4 | 17.8 | 18.3 |
Restricted Stock | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense | 3.2 | 3.5 | 16.8 | 19.1 |
Performance Units | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense | $ 2.8 | $ 2.4 | $ 7 | $ 5.4 |
Share-Based Compensation - Unre
Share-Based Compensation - Unrecognized Compensation Expense for Share-Based Awards (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense | $ 49.4 |
Remaining weighted-average recognition period | 2 years 6 months |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense | $ 29.1 |
Remaining weighted-average recognition period | 2 years 8 months 12 days |
Performance Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense | $ 20.3 |
Remaining weighted-average recognition period | 2 years 4 months 24 days |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions | Oct. 15, 2020 | Aug. 25, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Feb. 25, 2016 |
Common stock dividends paid | $ 224,600,000 | $ 223,900,000 | ||||
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 | $ 74,900,000 |
Stockholders' Equity - Changes
Stockholders' Equity - Changes in Accumulated Other Comprehensive Income by Component (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at January 1, 2020 | $ 3,071 |
Other comprehensive income before reclassifications, net of tax | 0.5 |
Amounts reclassified from AOCI, net of tax | 8.1 |
Balance at September 30, 2020 | 3,205.4 |
Foreign Currency Translation Adjustments | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at January 1, 2020 | (0.4) |
Balance at September 30, 2020 | (0.4) |
Unfunded Employee Benefit Obligations | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at January 1, 2020 | (158.9) |
Amounts reclassified from AOCI, net of tax | 8.1 |
Balance at September 30, 2020 | (150.8) |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at January 1, 2020 | (159.5) |
Balance at September 30, 2020 | (150.9) |
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, 2020 | (0.2) |
Balance at September 30, 2020 | (0.2) |
Marketable Debt Securities | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Other comprehensive income before reclassifications, net of tax | 0.5 |
Balance at September 30, 2020 | $ 0.5 |
Stockholders' Equity - Reclassi
Stockholders' Equity - Reclassifications Out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Interest expense, net | $ (24.4) | $ (21.6) | $ (69.1) | $ (68) | |
Income before taxes | 185.7 | 239.3 | 467.3 | 744.6 | |
Income tax benefit | (46.6) | (59.5) | (129.9) | (184.4) | |
Net income | 139.1 | 179.8 | 337.4 | 560.2 | |
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) | (1.5) | (3) | (4.5) |
Amortization of actuarial losses | [1] | (2.6) | (1.7) | (7.8) | (5) |
Income before taxes | (3.6) | (3.2) | (10.8) | (9.5) | |
Income tax benefit | 0.9 | 0.8 | 2.7 | 2.4 | |
Net income | $ (2.7) | (2.4) | $ (8.1) | (7.1) | |
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) | (3.9) | ||
Income tax benefit | 0.3 | 1 | |||
Net income | $ (1) | $ (2.9) | |||
[1] | These AOCI components are included in the computation of net pension and postretirement benefit costs. See Note 13, Employee Benefit Plans and Other Postretirement Benefits, for additional information. | ||||
[2] | For 2019, 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 remaining balances of the treasury locks were written off as a result of the Company’s November 2019 debt refinancing. For a discussion of treasury lock derivative instrument activity, see Note 16, Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our 2019 Annual Report on Form 10-K |
Concentrations of Risk - Additi
Concentrations of Risk - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Concentration Risk [Line Items] | |||
Accounts receivable, net, current | $ 864.6 | $ 845.6 | |
Office Depot | Credit Concentration Risk | |||
Concentration Risk [Line Items] | |||
Accounts receivable, net, current | $ 39.6 | $ 76.2 | |
Office Depot | Total Company Sales Revenue | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 5.00% | 7.00% | |
Office Depot | Total Company Receivables | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 5.00% | 9.00% | |
Paper | Office Depot | Paper Segment Sales Revenue | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 43.00% | 50.00% | 50.00% |
Transactions With Related Par_2
Transactions With Related Parties - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||||
Carrying amount of LTP's assets | $ 7,372.6 | $ 7,372.6 | $ 7,235.8 | ||
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 | 15.6 | $ 21.4 | $ 52 | $ 62.7 | |
Fiber costs from related parties | 15.6 | 21.4 | 52 | 62.7 | |
Boise Cascade Co-Owner of LTP | Wood Products, Including Chips and Logs | |||||
Related Party Transaction [Line Items] | |||||
Fiber costs from related parties | 2.8 | $ 4.4 | $ 9.5 | $ 13.2 | |
Packaging Corporation of America | |||||
Related Party Transaction [Line Items] | |||||
Variable interest entity, ownership percentage | 50.00% | ||||
Variable Interest Entity | |||||
Related Party Transaction [Line Items] | |||||
Carrying amount of LTP's assets | 2.8 | $ 2.8 | 3.9 | ||
Carrying amount of LTP's liabilities | $ 2.8 | $ 2.8 | $ 3.9 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2020Segment | |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | $ 1,693.7 | $ 1,750.7 | $ 4,944 | $ 5,244.3 | ||||
Operating Income (Loss) | 209.5 | 262.8 | 534.7 | 818.6 | ||||
Non-operating pension income and expense | 0.6 | (1.9) | 1.7 | (6) | ||||
Interest expense, net | (24.4) | (21.6) | (69.1) | (68) | ||||
Income before taxes | 185.7 | 239.3 | 467.3 | 744.6 | ||||
Trade | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 1,693.7 | 1,750.7 | 4,944 | 5,244.3 | ||||
Intersegment Eliminations | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | (34.3) | (41) | (112.9) | (119.5) | ||||
Operating Segments | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 1,693.7 | 1,750.7 | 4,944 | 5,244.3 | ||||
Segment Reconciling Items | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | (34.3) | (41) | (112.9) | (119.5) | ||||
Packaging | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 1,501.1 | 1,489.9 | 4,378.5 | 4,472.1 | ||||
Operating Income (Loss) | 222.4 | [1] | 235.1 | [2] | 619.9 | [1],[3] | 748.6 | [2],[4] |
Packaging | Trade | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 1,497.6 | 1,482.9 | 4,364.8 | 4,451.5 | ||||
Packaging | Intersegment Eliminations | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 3.5 | 7 | 13.7 | 20.6 | ||||
Packaging | Operating Segments | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 1,501.1 | 1,489.9 | 4,378.5 | 4,472.1 | ||||
Paper | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 178.1 | 242.8 | 518.7 | 720.3 | ||||
Operating Income (Loss) | 7.3 | 48.1 | (21.7) | [3],[5] | 132.5 | [4] | ||
Paper | Trade | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 178.1 | 242.8 | 518.7 | 720.3 | ||||
Paper | Operating Segments | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 178.1 | 242.8 | 518.7 | 720.3 | ||||
Corporate and Other | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 14.5 | 18 | 46.8 | 51.9 | ||||
Operating Income (Loss) | (20.2) | (20.4) | (63.5) | (62.5) | ||||
Corporate and Other | Trade | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 18 | 25 | 60.5 | 72.5 | ||||
Corporate and Other | Intersegment Eliminations | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 30.8 | 34 | 99.2 | 98.9 | ||||
Corporate and Other | Operating Segments | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | $ 48.8 | $ 59 | $ 159.7 | $ 171.4 | ||||
[1] | The three and nine months ended September 30, 2020 include the following: | |||||||
[2] | The three 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. | |||||||
[3] | The nine months ended September 30, 2020 include $6.9 million of incremental, out-of-pocket costs related to COVID-19 that were incurred in the first half of 2020. Costs include materials, cleaning supplies, and sick pay as well as expenses for establishing processes and logistics for the new work requirements in all of our facilities for mitigating the spread of the virus within the Company. With the process now established, we anticipate any corresponding COVID-19 related expenses to be included in normalized costs through the span of the pandemic. | |||||||
[4] | The nine months ended September 30, 2019 include $0.6 million 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 produce virgin kraft linerboard. | |||||||
[5] | During the second quarter of 2020, with the exacerbated deterioration in uncoated freesheet market conditions and the estimated impact on our Paper reporting unit arising from the COVID-19 pandemic, as well as projected future results of operations, we identified a triggering event indicating possible impairment of goodwill within our Paper reporting unit. The Company performed an interim quantitative impairment analysis as of May 31, 2020, and, based on the evaluation performed, we determined that goodwill was fully impaired for the Paper reporting unit and recognized a non-cash impairment charge of $55.2 million. See Note 9, Goodwill and Intangible Assets, for additional information. |
Segment Information - Selecte_2
Segment Information - Selected Financial Information by Reportable Segment (Parenthetical) (Details) - USD ($) $ in Millions | May 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Segment Reporting Information [Line Items] | |||||
Goodwill impairment charge | $ 55.2 | ||||
Charges for disposal of fixed assets | (4.1) | $ (6.7) | |||
Paper Reporting Unit | |||||
Segment Reporting Information [Line Items] | |||||
Goodwill impairment charge | $ 55.2 | ||||
DeRidder, Louisiana Mill | |||||
Segment Reporting Information [Line Items] | |||||
Charges for disposal of fixed assets | $ 3 | ||||
DeRidder, Louisiana Mill | Hurricane Laura | |||||
Segment Reporting Information [Line Items] | |||||
Charges related to the impact of Hurricane Laura | 10 | ||||
Wallula, Washington Mill | |||||
Segment Reporting Information [Line Items] | |||||
Restructuring charges | $ 0.6 | ||||
Packaging and Paper | |||||
Segment Reporting Information [Line Items] | |||||
Restructuring charges | $ 3.3 | 24.1 | |||
Packaging and Paper | COVID-19 | |||||
Segment Reporting Information [Line Items] | |||||
Incremental out-of-pocket costs | $ 6.9 |
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 | Sep. 30, 2020 | Feb. 08, 2017 | |
Schedule Of Commitments And Contingencies [Line Items] | |||
Loss contingency, period of occurrence | February 8, 2017 | ||
Liability insurance | $ 1,000,000 | ||
Payment of penalties | $ 40,000 |