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Segment Information | 12 Months Ended
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Dec. 31, 2020
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. During the fourth quarter of 2020, due to an increase in demand for our corrugated products and as part of our assessment of a potential conversion to produce containerboard, we began producing high-performance, virgin kraft linerboard on the No. 3 machine at our Jackson, Alabama mill on a trial basis. Before October 2020, operating results for the Jackson mill were included in the Paper segment. Beginning in October 2020, operating results for the Jackson mill are included in both the Packaging and Paper segments. During the second quarter of 2018, the Company discontinued the production of paper grades at the Wallula, Washington mill and converted the No. 3 machine at the mill to produce virgin kraft linerboard. Before May 2018, operating results for the Wallula mill were included in the Paper segment. After May 2018, operating results for the Wallula mill are primarily included in the Packaging segment. Packaging. We manufacture and sell a wide variety of containerboard and corrugated packaging products, including conventional shipping containers used to protect and transport manufactured goods, multi-color boxes and displays with strong visual appeal that help to merchandise the packaged product in retail locations. In addition, we are a large producer of packaging for meat, fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products. Paper. We manufacture and sell a range of communication-based papers. Our papers can be manufactured as either commodity papers or specialty papers with specialized or custom features, such as colors, coatings, high brightness, or recycled content. Corporate and Other. Our Corporate and Other segment includes corporate support staff services and related assets and liabilities, and foreign exchange gains and losses. This segment also includes transportation assets, such as rail cars and trucks, which we use to transport our products from some of our manufacturing sites and assets related to LTP. See Note 18, Transactions with Related Parties, for more information related to LTP. Sales in this segment relate primarily to LTP and our rail and truck business. We provide transportation services not only to our own facilities but also, on a limited basis, to third parties when geographic proximity and logistics are favorable. Rail cars and trucks are generally leased. Each segments' profits and losses are measured on operating profits before interest expense, net and other and income taxes. For many of these allocated expenses, the related assets and liabilities remain in the Corporate and Other segment. Segment sales to external customers by product line were as follows (dollars in millions):
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Packaging |  | $ | 5,919.5 |  |  | $ | 5,932.2 |  |  | $ | 5,938.5 |
Paper |  |  | 674.8 |  |  |  | 964.3 |  |  |  | 1,002.0 |
Corporate and Other |  |  | 63.9 |  |  |  | 67.8 |  |  |  | 74.1 |
|  | $ | 6,658.2 |  |  | $ | 6,964.3 |  |  | $ | 7,014.6 |
Sales to foreign unaffiliated customers during the years ended December 31, 2020, 2019, and 2018 were $318.7 million, $394.9 million, and $487.8 million, respectively. At December 31, 2020 and 2019, we did not have any significant long-lived assets held by foreign operations. An analysis of operations by reportable segment is as follows (dollars in millions):
|  | Sales, net |  |  | Operating |  |  | Depreciation, |  |  |  |  |  |  |  |  |
Year Ended December 31, 2020 |  | Trade |  |  | Inter- segment |  |  | Total |  |  | Income (Loss) |  |  | Amortization, and Depletion |  |  | Capital Expenditures (j) |  |  | Assets |
Packaging |  | $ | 5,901.7 |  |  | $ | 17.8 |  |  | $ | 5,919.5 |  |  | $ | 829.5 |  | (a) | $ | 365.2 |  |  | $ | 394.8 |  |  | $ | 5,744.0 |
Paper |  |  | 674.7 |  |  |  | 0.1 |  |  |  | 674.8 |  |  |  | (20.0 | ) | (b)(c) |  | 36.5 |  |  |  | 20.1 |  |  |  | 497.2 |
Corporate and Other |  |  | 81.8 |  |  |  | 131.3 |  |  |  | 213.1 |  |  |  | (85.6 | ) |  |  | 8.3 |  |  |  | 6.3 |  |  |  | 1,192.0 |
Intersegment eliminations |  |  | — |  |  |  | (149.2 | ) |  |  | (149.2 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | 6,658.2 |  |  | $ | — |  |  | $ | 6,658.2 |  |  |  | 723.9 |  |  | $ | 410.0 |  |  | $ | 421.2 |  |  | $ | 7,433.2 |
Non-operating pension income |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2.3 |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (93.5 | ) |  |  |  |  |  |  |  |  |  |  |  |
Income before taxes |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 632.7 |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Sales, net |  |  | Operating |  |  | Depreciation, |  |  |  |  |  |  |  |  |
Year Ended December 31, 2019 |  | Trade |  |  | Inter- segment |  |  | Total |  |  | Income (Loss) |  |  | Amortization, and Depletion |  |  | Capital Expenditures (j) |  |  | Assets |
Packaging |  | $ | 5,905.1 |  |  | $ | 27.1 |  |  | $ | 5,932.2 |  |  | $ | 963.4 |  | (d) | $ | 342.8 |  |  | $ | 367.4 |  |  | $ | 5,491.5 |
Paper |  |  | 964.3 |  |  |  | — |  |  |  | 964.3 |  |  |  | 175.4 |  | (e) |  | 37.7 |  |  |  | 23.8 |  |  |  | 791.4 |
Corporate and Other |  |  | 94.9 |  |  |  | 133.1 |  |  |  | 228.0 |  |  |  | (85.1 | ) |  |  | 7.0 |  |  |  | 8.3 |  |  |  | 952.9 |
Intersegment eliminations |  |  | — |  |  |  | (160.2 | ) |  |  | (160.2 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | 6,964.3 |  |  | $ | — |  |  | $ | 6,964.3 |  |  |  | 1,053.7 |  |  | $ | 387.5 |  |  | $ | 399.5 |  |  | $ | 7,235.8 |
Non-operating pension expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (7.9 | ) |  |  |  |  |  |  |  |  |  |  |  |
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (128.8 | ) | (f) |  |  |  |  |  |  |  |  |  |  |
Income before taxes |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 917.0 |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Sales, net |  |  | Operating |  |  | Depreciation, |  |  |  |  |  |  |  |  |
Year Ended December 31, 2018 |  | Trade |  |  | Inter- segment |  |  | Total |  |  | Income (Loss) |  |  | Amortization, and Depletion |  |  | Capital Expenditures (j) |  |  | Assets |
Packaging |  | $ | 5,912.3 |  |  | $ | 26.2 |  |  | $ | 5,938.5 |  |  | $ | 1,045.4 |  | (g) | $ | 342.0 |  |  | $ | 504.0 |  |  | $ | 5,347.0 |
Paper |  |  | 1,002.0 |  |  |  | — |  |  |  | 1,002.0 |  |  |  | 97.7 |  | (h) |  | 62.0 |  |  |  | 12.6 |  |  |  | 760.1 |
Corporate and Other |  |  | 100.3 |  |  |  | 129.4 |  |  |  | 229.7 |  |  |  | (75.4 | ) | (i) |  | 6.9 |  |  |  | 34.8 |  |  |  | 462.6 |
Intersegment eliminations |  |  | — |  |  |  | (155.6 | ) |  |  | (155.6 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | 7,014.6 |  |  | $ | — |  |  | $ | 7,014.6 |  |  |  | 1,067.7 |  |  | $ | 410.9 |  |  | $ | 551.4 |  |  | $ | 6,569.7 |
Non-operating pension expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (2.1 | ) |  |  |  |  |  |  |  |  |  |  |  |
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (95.1 | ) |  |  |  |  |  |  |  |  |  |  |  |
Income before taxes |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 970.5 |  |  |  |  |  |  |  |  |  |  |  |  |
(a) Includes the following:
| o | $27.3 million 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 of 2020.
| o | $10.0 million of charges related to the impact of Hurricane Laura at our DeRidder, Louisiana mill, including unabsorbed costs related to lost production, excess purchased containerboard and freight costs, repair expenses, rental and supplies costs, and other recovery expenses.
| o | $6.3 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.
(b) Includes the following:
| o | $0.8 million of restructuring costs for paper administrative functions.
| o | $0.6 million 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) 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. (d) Includes the following:
| o | $3.0 million of charges for the disposal of fixed assets related to the containerboard mill conversion at our DeRidder, Louisiana mill.
| o | $0.8 million of charges related to the second quarter discontinuation of uncoated free sheet and coated one-side white paper grades at the Wallula, Washington mill associated with the conversion of the No. 3 paper machine to produce virgin kraft linerboard.
| o | $0.3 million of charges consisting of closure costs related to corrugated products facilities, partially offset by income from the sale of a building related to a closed corrugated products facility.
(e) Includes $0.2 million of charges related to the second quarter discontinuation of uncoated free sheet and coated one-side white paper grades at the Wallula, Washington mill associated with the conversion of the No. 3 paper machine to produce virgin kraft linerboard. (f) Includes $38.7 million of charges related to the Company’s November 2019 debt refinancing, which included redemption premiums and the write-offs of remaining balances of treasury locks and unamortized debt issuance costs. (g) Includes the following:
| o | $12.3 million of charges related to the second quarter discontinuation of uncoated free sheet and coated one-side white paper grades at the Wallula, Washington mill associated with the conversion of the No. 3 paper machine to produce virgin kraft linerboard.
| o | $1.6 million of charges consisting of closure costs related to corrugated products facilities.
| o | $0.5 million of costs for the property damage insurance deductible for a weather-related incident at one of the corrugated products facilities.
| o | $0.2 million of charges for acquisition and integration costs related to recent acquisitions.
(h) Includes $17.7 million of charges related to the second quarter discontinuation of uncoated free sheet and coated one-side white paper grades at the Wallula, Washington mill associated with the conversion of the No. 3 paper machine to produce virgin kraft linerboard. (i) Includes $0.2 million of charges consisting of closure costs related to a corporate administration facility. (j) Includes “Additions to property, plant, and equipment” and excludes cash used for “Acquisitions of businesses, net of cash acquired” as reported on our Consolidated Statements of Cash Flows.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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