23.

SEGMENT AND GEOGRAPHIC INFORMATION

The following tables set forth profitability and other information by business unit:

For the year ended December 31, 2013

In millions

Composite
Fibers

Advanced
Airlaid
Materials

Specialty
Papers

Other and
Unallocated

Total

Net sales

566.4

268.4

887.9

–

1,722.6

Energy and related sales, net

–

3.2

–

3.2

Total revenue

566.4

268.4

891.0

–

1,725.8

Cost of products sold

456.5

238.0

799.3

13.3

1,507.1

Gross profit

109.8

30.4

91.7

(13.3

)

218.7

SG&A

47.4

8.9

52.0

25.5

133.9

Gains on dispositions of plant, equipment and timberlands, net

–

(1.7

)

(1.7

)

Total operating income (loss)

62.4

21.5

39.7

(37.1

)

86.5

Non-operating expense

–

(17.3

)

(17.3

)

Income (loss) before income taxes

62.4

21.5

39.7

(54.4

)

69.2

Supplementary Data

Plant, equipment and timberlands, net

300.0

175.1

242.6

5.6

723.3

Depreciation, depletion and amortization

24.8

8.9

33.2

1.3

68.2

Capital expenditures

56.9

6.7

34.3

5.1

103.0


For the year ended December 31, 2012 In millions		Composite Fibers		Advanced Airlaid Materials		Specialty Papers		Other and Unallocated			Total
Net sales	$	436.7	$	246.3	$	894.8	$	–		$	1,577.8
Energy and related sales, net		–		–		7.0		–			7.0
Total revenue		436.7		246.3		901.8		–			1,584.8
Cost of products sold		362.6		218.7		779.5		10.3			1,371.1
Gross profit		74.2		27.6		122.3		(10.4	)		213.6
SG&A		38.1		9.6		55.0		18.9			121.6
Gains on dispositions of plant, equipment and timberlands, net		–		–		–		(9.8	)		(9.8	)
Total operating income (loss)		36.1		18.0		67.3		(19.5	)		101.9
Non-operating expense		–		–		–		(22.9	)		(22.9	)
Income (loss) before income taxes	$	36.1	$	18.0	$	67.3	$	(42.4	)	$	78.9
Supplementary Data
Plant, equipment and timberlands, net	$	200.1	$	172.9	$	247.9	$	0.3		$	621.2
Depreciation, depletion and amortization		23.5		8.7		37.4		–			69.5
Capital expenditures		31.4		3.9		23.1		0.3			58.8


For the year ended December 31, 2011 In millions		Composite Fibers		Advanced Airlaid Materials		Specialty Papers		Other and Unallocated			Total
Net sales	$	476.0	$	252.0	$	875.1	$	–		$	1,603.2
Energy and related sales, net		–		–		9.3		–			9.3
Total revenue		476.0		252.0		884.4		–			1,612.5
Cost of products sold		395.7		227.7		775.7		7.2			1,406.3
Gross profit		80.3		24.3		108.7		(7.2	)		206.2
SG&A		39.5		10.9		51.4		23.0			124.9
Gains on dispositions of plant, equipment and timberlands, net		–		–		–		(4.0	)		(4.0	)
Total operating income (loss)		40.8		13.4		57.3		(26.2	)		85.3
Non-operating expense		–		–		–		(34.4	)		(34.4	)
Income (loss) before income taxes	$	40.8	$	13.4	$	57.3	$	(60.7	)	$	50.8
Supplementary Data
Plant, equipment and timberlands, net	$	176.2	$	175.6	$	250.2	$	–		$	602.0
Depreciation, depletion and amortization		24.8		8.5		36.0		–			69.3
Capital expenditures		22.5		10.6		31.4		–			64.5

The sum of individual amounts set forth above may not agree to the consolidated financial statements included herein due to rounding.

Results of individual business units are presented based on our management accounting practices and management structure. There is no comprehensive, authoritative body of guidance for management accounting equivalent to accounting principles generally accepted in the United States of America; therefore, the financial results of individual business units are not necessarily comparable with similar information for any other company. The management accounting process uses assumptions and allocations to measure performance of the business units. Methodologies are refined from time to time as management accounting practices are enhanced and businesses change. The costs incurred by support areas not directly aligned with the business unit are allocated primarily based on an estimated utilization of support area services.

Management evaluates results of operations of the business units before pension income or expense, alternative fuel mixture credits, debt redemption costs, restructuring related charges, certain corporate level costs, and the effects of certain asset dispositions. Management believes that this is a more meaningful representation of the operating performance of its core businesses, the profitability of business units and the extent of cash flow generated from these core operations. Such amounts are presented under the caption “Other and Unallocated.” This presentation is aligned with the management and operating structure of our company. It is also on this basis that the Company’s performance is evaluated internally and by the Company’s Board of Directors.

Our Composite Fibers business unit serves customers globally and focuses on higher value-added products in the following markets:

•

Food & Beverage paper primarily used for single-serve coffee and tea products;

•

Non-woven wall covering base materials used by the world’s largest wallpaper manufacturers;

•

Metallized products used in the labeling of beer bottles, packaging innerliners, gift wrap, self-adhesive labels and other consumer product applications;

•

Composite Laminates papers used in production of decorative laminates; and

•

Technical Specialties a diverse line of special paper products used in batteries, adhesive tapes and other highly-engineered applications.

Composite Fibers’ revenue composition by market consisted of the following for the years indicated:


In thousands		2013		2012		2011
Food & beverage	$	302,738	$	265,423	$	284,748
Wall covering		97,698		–		–
Metallized		83,949		87,720		95,276
Composite laminates		39,296		44,613		53,334
Technical specialties and other		42,679		38,984		42,671
Total	$	566,360	$	436,740	$	476,029

The Advanced Airlaid Materials business unit is a leading global supplier of highly absorbent cellulose-based airlaid non-woven materials used to manufacture a diverse range of consumer and industrial products for growing global end-user markets. These products include:

•

feminine hygiene;

•

specialty wipes; home care;

•

adult incontinence; table top; and

•

food pads.

Advanced Airlaid Materials’ revenue composition by market consisted of the following for the years indicated:


In thousands		2013		2012		2011
Feminine hygiene	$	219,222	$	197,792	$	206,724
Wipes		15,186		13,562		5,463
Home care		14,857		14,527		15,308
Adult incontinence		5,046		6,959		6,083
Other		14,085		13,442		18,469
Total	$	268,396	$	246,282	$	252,047

Our Specialty Papers business unit focuses on producing papers for the following markets:

•

Carbonless & forms papers for credit card receipts, multi-part forms, security papers and other end-user applications;

•

Engineered products for digital imaging, casting, release, transfer, playing card, postal, FDA-compliant food and beverage applications, and other niche specialty applications;

•

Envelope and converting papers primarily utilized for transactional and the direct mail applications; and

•

Book publishing papers for the production of high quality hardbound books and other book publishing needs.

Specialty Papers’ revenue composition by market consisted of the following for the years indicated:


In thousands		2013		2012		2011
Carbonless & forms	$	369,618	$	372,950	$	368,582
Engineered products		184,913		187,724		166,660
Envelope & converting		175,928		174,781		170,380
Book publishing		153,054		155,925		166,506
Other		4,346		3,397		2,950
Total	$	887,859	$	894,777	$	875,078

No individual customer accounted for more than 10% of our consolidated net sales in 2013, 2012 or 2011. However, one customer accounted for the majority of Advanced Airlaid Materials’ net sales in 2013, 2012 and 2011.

Our net sales to external customers and location of net plant, equipment and timberlands are summarized below. Net sales are attributed to countries based upon origin of shipment.


	2013				2012				2011
In thousands		Net sales		Plant, Equipment and Timberlands–Net		Net sales		Plant, Equipment and Timberlands–Net		Net sales		Plant, Equipment and Timberlands–Net
United States	$	968,833	$	248,306	$	952,195	$	248,185	$	933,357	$	250,217
Germany		483,859		287,880		358,442		191,559		410,183		181,537
United Kingdom		107,082		63,650		119,092		59,131		122,218		57,634
Canada		113,414		83,033		106,702		83,796		88,018		86,079
Other		49,427		40,471		41,357		38,515		49,378		26,483
Total	$	1,722,615	$	723,340	$	1,577,788	$	621,186	$	1,603,154	$	601,950