XML 82 R20.htm IDEA: XBRL DOCUMENT v2.4.0.8
Concentrations of Risk
9 Months Ended
Sep. 30, 2014
Risks and Uncertainties [Abstract]  
Concentration of Risk
Concentrations of Risk

Our Paper segment has had a long-standing commercial and contractual relationship with OfficeMax Incorporated (OfficeMax), and OfficeMax is our largest customer in the Paper segment. Following a merger in late 2013, OfficeMax is now a wholly-owned subsidiary of Office Depot, Inc. This relationship exposes us to a significant concentration of business and financial risk. Our sales to Office Depot (including OfficeMax) represented 9% of our total company sales revenue, for both the three and nine months ended September 30, 2014, and 44% of our Paper segment sales revenue for both those periods, respectively. At September 30, 2014, and December 31, 2013, we had $64.6 million and $39.2 million of accounts receivable due from Office Depot (including OfficeMax), which represents 9% and 6% of our total company receivables, respectively.

We cannot predict how the merger between OfficeMax and Office Depot will affect our business. Significant increases in paper purchases would intensify the concentration of risk. Significant reductions in paper purchases would cause our paper business to expand its customer base and could potentially decrease its profitability if new customer sales required either a decrease in pricing and/or an increase in cost of sales. Any significant deterioration in the financial condition of the post-merger entity affecting the ability to pay or causing a significant change in the willingness to continue to purchase our products could harm our business and results of operations.

Labor

At September 30, 2014, we had approximately 14,000 employees and approximately 50% of these employees worked pursuant to collective bargaining agreements. Approximately 75% of our hourly employees are represented by unions. The majority of our unionized employees are represented by the United Steel Workers (USW), the International Brotherhood of Teamsters (IBT), the International Association of Machinists (IAM), and the Association of Western Pulp and Paper Workers (AWPPW). Approximately 22% of our employees work pursuant to collective bargaining agreements that will expire within the next twelve months.