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Segment Information
 9 Months Ended
Sep. 30, 2019
Segment Reporting [Abstract]  
Segment Information

19.

Segment Information

We report our business in three reportable segments: Packaging, Paper, and Corporate and Other. These segments represent distinct businesses that are managed separately because of differing products and services. Each of these businesses requires distinct operating and marketing strategies.

Each segment’s profits and losses are measured on operating profits before interest expense, net, non-operating pension expense, and income taxes. For certain allocated expenses, the related assets and liabilities remain in the Corporate and Other segment.

Selected financial information by reportable segment was as follows (dollars in millions):

 

 

Sales, net

 

 

 

 

 

 

Three Months Ended September 30, 2019

 

Trade

 

 

Intersegment

 

 

Total

 

 

Operating Income (Loss)

 

 

Packaging

 

$

1,482.9

 

 

$

7.0

 

 

$

1,489.9

 

 

$

235.1

 

(a)

Paper

 

 

242.8

 

 

 

—

 

 

 

242.8

 

 

 

48.1

 

 

Corporate and Other

 

 

25.0

 

 

 

34.0

 

 

 

59.0

 

 

 

(20.4

)

 

Intersegment eliminations

 

 

—

 

 

 

(41.0

)

 

 

(41.0

)

 

 

—

 

 

 

 

$

1,750.7

 

 

$

—

 

 

$

1,750.7

 

 

 

262.8

 

 

Non-operating pension expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1.9

)

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(21.6

)

 

Income before taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

$

239.3

 

 

 

 

 

 

Sales, net

 

 

 

 

 

 

Three Months Ended September 30, 2018

 

Trade

 

 

Intersegment

 

 

Total

 

 

Operating Income (Loss)

 

 

Packaging

 

$

1,528.3

 

 

$

6.8

 

 

$

1,535.1

 

 

$

284.4

 

(c)

Paper

 

 

254.3

 

 

 

—

 

 

 

254.3

 

 

 

32.3

 

(c)

Corporate and Other

 

 

27.3

 

 

 

32.3

 

 

 

59.6

 

 

 

(18.2

)

(c)

Intersegment eliminations

 

 

—

 

 

 

(39.1

)

 

 

(39.1

)

 

 

—

 

 

 

 

$

1,809.9

 

 

$

—

 

 

$

1,809.9

 

 

 

298.5

 

 

Non-operating pension expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.5

)

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(23.9

)

 

Income before taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

$

274.1

 

 

 

 

 

 

Sales, net

 

 

 

 

 

 

Nine Months Ended September 30, 2019

 

Trade

 

 

Intersegment

 

 

Total

 

 

Operating Income (Loss)

 

 

Packaging

 

$

4,451.5

 

 

$

20.6

 

 

$

4,472.1

 

 

$

748.6

 

(a)(b)

Paper

 

 

720.3

 

 

 

—

 

 

 

720.3

 

 

 

132.5

 

 

Corporate and Other

 

 

72.5

 

 

 

98.9

 

 

 

171.4

 

 

 

(62.5

)

 

Intersegment eliminations

 

 

—

 

 

 

(119.5

)

 

 

(119.5

)

 

 

—

 

 

 

 

$

5,244.3

 

 

$

—

 

 

$

5,244.3

 

 

 

818.6

 

 

Non-operating pension expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6.0

)

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(68.0

)

 

Income before taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

$

744.6

 

 

 

 

 

 

Sales, net

 

 

 

 

 

 

Nine Months Ended September 30, 2018

 

Trade

 

 

Intersegment

 

 

Total

 

 

Operating Income (Loss)

 

 

Packaging

 

$

4,414.7

 

 

$

19.5

 

 

$

4,434.2

 

 

$

782.3

 

(c)

Paper

 

 

774.5

 

 

 

—

 

 

 

774.5

 

 

 

55.7

 

(c)

Corporate and Other

 

 

78.9

 

 

 

94.9

 

 

 

173.8

 

 

 

(57.0

)

(c)

Intersegment eliminations

 

 

—

 

 

 

(114.4

)

 

 

(114.4

)

 

 

—

 

 

 

 

$

5,268.1

 

 

$

—

 

 

$

5,268.1

 

 

 

781.0

 

 

Non-operating pension expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1.6

)

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(73.4

)

 

Income before taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

$

706.0

 

 

 

 

(a)

The three and nine months ended September 30, 2019 include $3.0 million of charges for the disposal of fixed assets related to the containerboard mill conversion at our DeRidder, Louisiana mill.

(b)

The nine months ended September 30, 2019 include $0.6 million of charges related to the announced second quarter 2018 discontinuation of uncoated free sheet and coated one-side grades at the Wallula, Washington mill associated with the conversion of the No. 3 paper machine to a high-performance 100% virgin kraft linerboard machine.

(c)

The three and nine months ended September 30, 2018 include the following:

 

1.

$4.0 million and $26.4 million, respectively, of charges related to the second quarter 2018 discontinuation of uncoated free sheet and coated one-side grades at the Wallula, Washington mill associated with the conversion of the No. 3 paper machine to a high-performance 100% virgin kraft linerboard machine.

 

2.

$1.3 million and $1.8 million, respectively, of charges consisting of closure costs related to corrugated products facilities and a corporate administration facility.

 

3.

$0.5 million of costs for the property damage insurance deductible for a weather-related incident at one of the corrugated products facilities.

 

4.

$0.1 million of charges related to recent acquisitions.