24.

SEGMENT AND GEOGRAPHIC INFORMATION

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

For the year ended December 31, 2015

In millions

Composite
Fibers

Advanced
Airlaid
Materials

Specialty
Papers

Other and
Unallocated

Total

Net sales

541.5

244.6

875.0

–

1,661.1

Energy and related sales, net

–

5.7

–

5.7

Total revenue

541.5

244.6

880.7

–

1,666.7

Cost of products sold

434.4

215.7

804.5

9.2

1,463.8

Gross profit

107.1

28.9

76.2

(9.2

)

203.0

SG&A

45.7

7.6

43.3

31.0

127.7

Gains on dispositions of plant, equipment and timberlands, net

–

(21.1

)

(21.1

)

Total operating income (loss)

61.4

21.3

32.9

(19.1

)

96.4

Non-operating expense

–

(17.8

)

(17.8

)

Income (loss) before income taxes

61.4

21.3

32.9

(36.9

)

78.6

Supplementary Data

Plant, equipment and timberlands, net

258.1

153.5

281.6

5.7

698.9

Depreciation, depletion and amortization

26.2

8.8

26.0

2.2

63.2

Capital expenditures

26.8

7.8

63.5

1.8

99.9


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

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 the performance of the business units based on results of operations of the business units before pension expense, certain corporate level costs, and the effects of certain gains or losses not considered to be related to the core business operations. 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.” In the evaluation of business unit results, management does not use any measures of total assets. The information set forth above 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;

•

Wallcovering base materials used by the world’s largest wallpaper manufacturers;

•

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

•

Composite Laminates paper used in production of decorative laminates, furniture, and flooring applications; and

•

Technical Specialties a diverse line of special paper products used in electrical energy storage, transport, and transmission including batteries and capacitors, wipes and other home and hygiene products, and other highly-engineered fiber-based applications.

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


In thousands		2015		2014		2013
Food & beverage	$	274,865	$	296,304	$	302,738
Wall covering		91,620		149,957		97,698
Metallized		68,397		80,839		83,949
Composite laminates		34,897		38,159		39,296
Technical specialties and other		71,689		52,592		42,679
Total	$	541,468	$	617,851	$	566,360

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

•

feminine hygiene;

•

specialty wipes;

•

adult incontinence;

•

home care;

•

table top; and

•

food pads.

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


In thousands		2015		2014		2013
Feminine hygiene	$	182,048	$	216,836	$	219,222
Wipes		22,950		16,002		15,186
Adult incontinence		10,720		17,586		5,046
Home care		13,345		15,401		14,857
Other		15,526		15,848		14,085
Total	$	244,589	$	281,673	$	268,396

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 high speed ink jet printing, office specialty products, greeting cards, 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		2015		2014		2013
Carbonless & forms	$	349,831	$	376,959	$	369,618
Engineered products		190,943		194,189		184,913
Envelope & converting		178,067		183,194		175,928
Book publishing		152,647		144,744		153,054
Other		3,538		3,805		4,346
Total	$	875,026	$	902,891	$	887,859

No individual customer accounted for more than 10% of our consolidated net sales in 2015, 2014 or 2013. However, one customer accounted for the majority of Advanced Airlaid Materials’ net sales in each of the past three years ended December 31, 2015.

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.


	2015				2014				2013
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	$	959,730	$	287,447	$	980,933	$	256,251	$	968,833	$	248,306
Germany		444,009		232,340		529,003		257,311		483,859		287,880
United Kingdom		86,442		62,931		103,219		62,617		107,082		63,650
Canada		118,568		81,201		129,401		82,774		113,414		83,033
Other		52,335		34,945		59,859		38,655		49,427		40,471
Total	$	1,661,084	$	698,864	$	1,802,415	$	697,608	$	1,722,615	$	723,340