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Segment Information | 6 Months Ended
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Jun. 30, 2018
Segment Reporting [Abstract] |
Segment Information |
18. | 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. During the second quarter of 2018, the Company discontinued the production of uncoated free sheet and coated one-side grades at the Wallula, Washington mill and converted the No. 3 machine to a virgin kraft linerboard machine. Subsequent to the date of conversion, operating results for the Wallula mill are primarily included in the Packaging segment. Each segment’s profits and losses are measured on operating profits before interest expense, net 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 June 30, 2018 |  | Trade |  |  | Inter-segment |  |  | Total |  |  | Operating Income (Loss) (a) |  |
Packaging |  | $ | 1,489.6 |  |  | $ | 6.6 |  |  | $ | 1,496.2 |  |  | $ | 273.2 |  | (b)
Paper |  |  | 250.8 |  |  |  | — |  |  |  | 250.8 |  |  |  | 16.2 |  | (b)
Corporate and other |  |  | 27.1 |  |  |  | 33.5 |  |  |  | 60.6 |  |  |  | (19.8 | ) | (b)
Intersegment eliminations |  |  | — |  |  |  | (40.1 | ) |  |  | (40.1 | ) |  |  | — |  |
|  | $ | 1,767.5 |  |  | $ | — |  |  | $ | 1,767.5 |  |  |  | 269.6 |  |
Interest expense, net and other |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (24.3 | ) |
Income before taxes |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 245.3 |  |
|  | Sales, net |  |  |  |  |  |
Three Months Ended June 30, 2017 |  | Trade |  |  | Inter-segment |  |  | Total |  |  | Operating Income (Loss) (a) |  |
Packaging |  | $ | 1,305.5 |  |  | $ | 6.0 |  |  | $ | 1,311.5 |  |  | $ | 226.2 |  | (c)
Paper |  |  | 253.7 |  |  |  | — |  |  |  | 253.7 |  |  |  | 27.2 |  |
Corporate and Other |  |  | 24.8 |  |  |  | 31.1 |  |  |  | 55.9 |  |  |  | (19.3 | ) |
Intersegment eliminations |  |  | — |  |  |  | (37.1 | ) |  |  | (37.1 | ) |  |  | — |  |
|  | $ | 1,584.0 |  |  | $ | — |  |  | $ | 1,584.0 |  |  |  | 234.1 |  |
Interest expense, net and other |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (25.5 | ) |
Income before taxes |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 208.6 |  |
|  | Sales, net |  |  |  |  |  |
Six Months Ended June 30, 2018 |  | Trade |  |  | Inter-segment |  |  | Total |  |  | Operating Income (Loss) (a) |  |
Packaging |  | $ | 2,886.3 |  |  | $ | 12.8 |  |  | $ | 2,899.1 |  |  | $ | 497.9 |  | (b)
Paper |  |  | 520.2 |  |  |  | — |  |  |  | 520.2 |  |  |  | 23.5 |  | (b)
Corporate and Other |  |  | 51.6 |  |  |  | 62.6 |  |  |  | 114.2 |  |  |  | (38.9 | ) | (b)
Intersegment eliminations |  |  | — |  |  |  | (75.4 | ) |  |  | (75.4 | ) |  |  | — |  |
|  | $ | 3,458.1 |  |  | $ | — |  |  | $ | 3,458.1 |  |  |  | 482.5 |  |
Interest expense, net and other |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (50.7 | ) |
Income before taxes |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 431.8 |  |
|  | Sales, net |  |  |  |  |  |
Six Months Ended June 30, 2017 |  | Trade |  |  | Inter-segment |  |  | Total |  |  | Operating Income (Loss) (a) |  |
Packaging |  | $ | 2,556.8 |  |  | $ | 11.6 |  |  | $ | 2,568.4 |  |  | $ | 418.6 |  | (d)
Paper |  |  | 512.9 |  |  |  | — |  |  |  | 512.9 |  |  |  | 55.1 |  |
Corporate and Other |  |  | 50.8 |  |  |  | 59.3 |  |  |  | 110.1 |  |  |  | (36.2 | ) | (d)
Intersegment eliminations |  |  | — |  |  |  | (70.9 | ) |  |  | (70.9 | ) |  |  | — |  |
|  | $ | 3,120.5 |  |  | $ | — |  |  | $ | 3,120.5 |  |  | $ | 437.5 |  |
Interest expense, net and other |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (49.8 | ) |
Income before taxes |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 387.7 |  |
| (a) | Effective January 1, 2018, the Company adopted ASU 2017-07, Compensation: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost and applied this standard retrospectively to the prior period reflected herein. This new standard requires the presentation of non-service cost components of net periodic benefits expense to be shown separately outside the subtotal of operating income in the income statement. See Note 2, New and Recently Adopted Accounting Standards, for more information.
The components of our financial statements affected by the change in presentation of operating and non-operating pension expense as originally reported in 2017 and as adjusted for the requirements per the new standard are as follows (dollars in millions):
Segment income (loss) |  | Three Months Ended June 30, 2017 As Reported |  |  | Non-Operating Pension Adjustment |  |  | Three Months Ended June 30, 2017 Adjusted |
Packaging |  | $ | 224.5 |  |  | $ | 1.7 |  |  | $ | 226.2 |
Paper |  |  | 29.1 |  |  |  | (1.9 | ) |  |  | 27.2 |
Corporate |  |  | (19.8 | ) |  |  | 0.5 |  |  |  | (19.3 | )
Income from operations |  |  | 233.8 |  |  |  | 0.3 |  |  |  | 234.1 |
Interest expense, net and other |  |  | (25.2 | ) |  |  | (0.3 | ) |  |  | (25.5 | )
Income before taxes |  | $ | 208.6 |  |  | $ | — |  |  | $ | 208.6 |
Segment income (loss) |  | Six Months Ended June 30, 2017 As Reported |  |  | Non-Operating Pension Adjustment |  |  | Six Months Ended June 30, 2017 Adjusted |
Packaging |  | $ | 415.3 |  |  | $ | 3.3 |  |  | $ | 418.6 |
Paper |  |  | 58.9 |  |  |  | (3.8 | ) |  |  | 55.1 |
Corporate |  |  | (37.3 | ) |  |  | 1.1 |  |  |  | (36.2 | )
Income from operations |  |  | 436.9 |  |  |  | 0.6 |  |  |  | 437.5 |
Interest expense, net and other |  |  | (49.2 | ) |  |  | (0.6 | ) |  |  | (49.8 | )
Income before taxes |  | $ | 387.7 |  |  | $ | — |  |  | $ | 387.7 |
| (b) | Includes the following:
| 1. | For the three and six months ended June 30, 2018, $0.2 million and $0.5 million, respectively, of charges consisting of closure costs related to corrugated products facilities and a corporate administration facility.
| 2. | For the three and six months ended June 30, 2018, $13.6 million and $22.4 million, respectively, of charges related to the second quarter 2018 discontinuation of uncoated free sheet and coated one-side grades at the Wallula, Washington mill associated with the conversion of the No. 3 paper machine to a high-performance 100% virgin kraft linerboard machine.
| (c) | Includes $0.5 million of charges consisting of closure costs related to corrugated products facilities and integration costs related to the TimBar Corporation and Columbus Container Inc. acquisitions.
| (d) | Includes the following:
| 1. | $1.2 million of charges consisting of closure costs related to corrugated products facilities, integration costs related to the TimBar Corporation and Columbus Container Inc. acquisitions, and costs related to a lump sum settlement payment of a multiemployer pension plan withdrawal liability for one of our corrugated products facilities.
| 2. | $5.0 million of costs for the property damage and business interruption insurance deductible corresponding to the February 2017 explosion at our DeRidder, Louisiana mill.
| 3. | $2.3 million of income related to a working capital adjustment from the April 2015 sale of our Hexacomb corrugated manufacturing operations in Europe and Mexico.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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