24.

SEGMENT AND GEOGRAPHIC INFORMATION

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

For the year ended December 31, 2014

In millions

Composite
Fibers

Advanced
Airlaid
Materials

Specialty
Papers

Other and
Unallocated

Total

Net sales

617.9

281.7

902.9

–

1,802.4

Energy and related sales, net

–

7.9

–

7.9

Total revenue

617.9

281.7

910.8

–

1,810.3

Cost of products sold

498.0

247.6

821.8

7.8

1,575.2

Gross profit

119.9

34.1

89.0

(7.8

)

235.2

SG&A

51.6

8.8

50.4

22.4

133.2

Gains on dispositions of plant, equipment and timberlands, net

–

(4.9

)

(4.9

)

Total operating income (loss)

68.3

25.3

38.6

(25.3

)

106.8

Non-operating expense

–

(19.4

)

(19.4

)

Income (loss) before income taxes

68.3

25.3

38.6

(44.7

)

87.4

Supplementary Data

Plant, equipment and timberlands, net

277.8

163.6

250.1

6.1

697.6

Depreciation, depletion and amortization

29.7

9.1

29.9

1.9

70.6

Capital expenditures

23.9

7.6

32.1

2.4

66.0


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

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 and capacitors, adhesive tapes and other highly-engineered applications.

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


In thousands		2014		2013		2012
Food & beverage	$	296,304	$	302,738	$	265,423
Wall covering		149,957		97,698		–
Metallized		80,839		83,949		87,720
Composite laminates		38,159		39,296		44,613
Technical specialties and other		52,592		42,679		38,984
Total	$	617,851	$	566,360	$	436,740

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;

•

adult incontinence;

•

specialty wipes; home care;

•

table top; and

•

food pads.

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


In thousands		2014		2013		2012
Feminine hygiene	$	216,836	$	219,222	$	197,792
Adult incontinence		17,586		5,046		6,959
Wipes		16,002		15,186		13,562
Home care		15,401		14,857		14,527
Other		15,848		14,085		13,442
Total	$	281,673	$	268,396	$	246,282

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

•

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

•

Engineered products for digital imaging, packaging, 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 direct mail envelopes; 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		2014		2013		2012
Carbonless & forms	$	376,959	$	369,618	$	372,950
Engineered products		194,189		184,913		187,724
Envelope & converting		183,194		175,928		174,781
Book publishing		144,744		153,054		155,925
Other		3,805		4,346		3,397
Total	$	902,891	$	887,859	$	894,777

No individual customer accounted for more than 10% of our consolidated net sales in 2014, 2013 or 2012. However, one customer accounted for the majority of Advanced Airlaid Materials’ net sales in 2014, 2013 and 2012.

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.


	2014				2013				2012
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	$	980,933	$	256,251	$	968,833	$	248,306	$	952,195	$	248,185
Germany		529,003		257,311		483,859		287,880		358,442		191,559
United Kingdom		103,219		62,617		107,082		63,650		119,092		59,131
Canada		129,401		82,774		113,414		83,033		106,702		83,796
Other		59,859		38,655		49,427		40,471		41,357		38,515
Total	$	1,802,415	$	697,608	$	1,722,615	$	723,340	$	1,577,788	$	621,186