XML 25 R11.htm IDEA: XBRL DOCUMENT
v3.22.4

Summary of Significant Accounting Policies | 12 Months Ended
--- | ---
Dec. 31, 2022
Accounting Policies [Abstract] |
Significant Accounting Policies | Summary of Significant Accounting Policies NATURE OF OPERATIONS AND BASIS OF PRESENTATION We are a premier supplier of bleached paperboard and consumer and parent roll tissue. We supply bleached paperboard to quality-conscious printers and packaging converters, and offer services that include custom sheeting, slitting and cutting. We supply private label tissue to major retailers, including grocery, club, mass merchants and discount stores. Unless the context otherwise requires or unless otherwise indicated, references in this report to “Clearwater Paper Corporation,” “we,” “our,” “the Company” and “us” refer to Clearwater Paper Corporation and its subsidiaries. All dollar amounts are shown in millions, except per share. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. Actual results could differ from those estimates. PRINCIPLES OF CONSOLIDATION These consolidated financial statements include the financial condition and results of operations of Clearwater Paper Corporation and its wholly-owned subsidiaries. All intercompany transactions and balances between operations within the Company have been eliminated. Certain amounts have been reclassified from prior year presentation for consistency. CASH, CASH EQUIVALENTS AND RESTRICTED CASH We consider all highly liquid instruments with maturities of three months or less to be cash equivalents. Cash that is held by a third party and has restrictions on its availability to us is classified as restricted cash. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported on the Consolidated Balance Sheets to the sum of those same amounts shown in our Consolidated Statements of Cash Flows.
| December 31,
| 2022 | 2021 | 2020
Cash and cash equivalents | $ | 53.7 |  | $ | 25.2 |  | $ | 35.9 |
Restricted cash included in Other current assets | 0.7 |  | — |  | — |
Restricted cash included in Other assets, net | — |  | 1.1 |  | 1.1 |
Total cash, cash equivalents and restricted cash | $ | 54.4 |  | $ | 26.2 |  | $ | 36.9 |
ACCOUNTS RECEIVABLE Receivables consist of:
| December 31,
| 2022 |  | 2021
Trade accounts receivable | $ | 167.6 |  |  | $ | 154.1 |
Allowance for current expected credit losses | (1.4) |  |  | (1.4) |
Unbilled receivables | 9.1 |  |  | 7.2 |
Taxes receivable | 10.6 |  |  | 6.1 |
Other | 2.9 |  |  | 1.4 |
| $ | 188.8 |  |  | $ | 167.4 |
INVENTORIES Our inventories are stated at the lower of net realizable value or current cost using the average cost method.
| December 31,
| 2022 |  | 2021
Logs, chips and sawdust | $ | 23.6 |  |  | $ | 13.7 |
Pulp | 16.8 |  |  | 15.9 |
Paperboard and tissue products | 171.9 |  |  | 148.0 |
Materials and supplies | 111.7 |  |  | 100.1 |
| $ | 324.0 |  |  | $ | 277.7 |
PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost, including assets acquired under finance lease obligations, and any interest costs capitalized, less accumulated depreciation. Depreciation of buildings, equipment and other depreciable assets is determined using the straight-line method. Estimated useful lives generally range from 10 to 40 years for land improvements, 10 to 40 years for buildings and improvements and 2 to 25 years for machinery and equipment (includes office and other equipment).
| December 31,
| 2022 |  | 2021
Land and land improvements | $ | 106.1 |  |  | $ | 109.1 |
Buildings and improvements | 456.8 |  |  | 452.5 |
Machinery and equipment | 2,346.5 |  |  | 2,377.5 |
Construction in progress | 23.9 |  |  | 22.4 |
| 2,933.4 |  |  | 2,961.5 |
Less accumulated depreciation and amortization | (1,916.3) |  |  | (1,879.7) |
Property, plant and equipment, net | $ | 1,017.1 |  |  | $ | 1,081.8 |
At December 31, 2022 and 2021, included within property, plant and equipment, net were finance leases of $31.8 million and $27.7 million and associated accumulated depreciation amounts of $16.4 million and $15.2 million. Depreciation expense totaled $101.1 million, $102.0 million and $107.8 million for the years ended December 31, 2022, 2021 and 2020. PLANNED MAINTENANCE We recognize the cost of repair and maintenance activities in the period in which the activity is performed or goods are consumed under the direct expense method. We perform planned maintenance activities at our facilities periodically and associated expenses are included in cost of sales. LEASES Operating lease right-of-use (ROU) assets and liabilities are recognized at the commencement date of a lease based on the present value of lease payments over the lease term. Our leases may include options to extend or terminate the lease. These options to extend are included in the lease term when it is reasonably certain that we will exercise that option. Some leases have variable payments: however, because they are not based on an index or rate, they are not included in the ROU assets and liabilities. Variable payments for real estate leases primarily relate to common area maintenance, insurance, taxes and utilities. Variable payments for equipment, vehicles, and leases within supply agreements primarily relate to usage, repairs and maintenance. As the implicit rate is not readily determinable for most of our leases, we apply a portfolio approach using an estimated incremental borrowing rate to determine the initial present value of lease payments over the lease terms on a collateralized basis over a similar term, which is based on market and company specific information. We use our unsecured borrowing rate and risk-adjust that rate to approximate a collateralized rate. Leases having a lease term of twelve months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the term of the lease. In addition, we have applied the practical expedient to account for the lease and non-lease components as a single lease component for all of our leases. See Note 4, "Leases" for further information. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
| December 31,
| 2022 | 2021
Trade payables | $ | 213.0 |  | $ | 156.2 |
Accrued compensation | 41.9 |  | 29.3 |
Operating lease liabilities | 12.0 |  | 16.1 |
Other | 44.2 |  | 50.8 |
| $ | 311.1 |  | $ | 252.5 |
Included in accounts payable and other accrued liabilities is $15.7 million and $11.0 million related to capital expenditures that had not yet been paid as of December 31, 2022 and as of December 31, 2021. RETIREMENT PLANS AND POSTRETIREMENT BENEFITS We are required to use actuarial methods and assumptions in the valuation of defined benefit obligations and other postretirement obligations and the determination of expense. Differences between actual and expected results or changes in the values of the obligations and plan assets are not recognized in earnings as they occur but, rather, systematically and gradually over subsequent periods. See Note 10, "Retirement Plans and Postretirement Benefits" for further information. INCOME TAXES Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The determination of our provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in our consolidated financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from tax authorities. When facts and circumstances change, we reassess these probabilities and record any changes in the consolidated financial statements as appropriate. See Note 6, "Income Taxes" for further information. REVENUE RECOGNITION We enter into contracts that can include various combinations of tissue and paperboard products, which are generally distinct and accounted for as separate performance obligations. Generally, revenue is recognized at a point in time upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Transfer of control typically occurs when the title and risk of loss passes to the customer. Shipping terms generally indicate when title and the risk of loss have passed, usually this is upon receipt at our customer's destination. We have elected to treat shipping and handling costs as a fulfillment cost. We typically expense incremental direct costs of obtaining a contract (sales commissions) when incurred because the amortization period is generally 12 months or less. We maintain consignment inventory at a limited number of customer locations. For consigned inventory, we recognize revenue upon transfer of control, which is often in advance of invoicing the customer. These amounts are classified as unbilled receivables in the above detail of accounts receivable. We provide for trade promotions, customer cash discounts and other deductions, which are considered variable consideration and recorded as a reduction of net sales. Returns and credits are estimated at contract inception and updated at the end of each reporting period as additional information becomes available. Revenue, net of returns and credits, is only recognized to the extent that it is probable that a significant reversal of any incremental revenue will not occur. Judgment associated with forecasted volumes is required to determine the most probable amount of variable consideration to apply as a reduction to net sales. As of December 31, 2022 and 2021, we had $6.3 million and $9.2 million accrued as customer rebates. Revenue is recognized net of any taxes collected from customers. See Note 15, "Segment Information" for further information, including the disaggregation of revenue by segment, primary geographical market, and major product type. OTHER OPERATING CHARGES, NET We classify significant amounts unrelated to ongoing core operating activities as “Other operating charges, net” in the Consolidated Statements of Operations. Such items include, but are not limited to, amounts related to facility closures and related gain (loss) on sale and impairment, restructuring charges (including severance charges), charges to establish and maintain litigation or environmental reserves, gains or losses from settlements with governmental or other organizations and cash settled equity-based compensation to our directors. Due to the nature of these items, amounts in the statement of operations can fluctuate from year to year. The determination of which items are considered significant and unrelated to core operations is based upon management’s judgment. See Note 8, "Other Operating Charges, net" for a discussion of specific amounts in 2022, 2021 and 2020. ACCOUNTS RECEIVABLE ARRANGEMENT During 2019, we entered into an uncommitted supply-chain financing program with a global financial institution under which a specific customer's trade accounts receivable may be acquired, without recourse, by the institution at a discounted rate. Available capacity under this program is dependent on the level of our trade accounts receivable with this customer and the financial institution’s willingness to purchase such receivables. We have no servicing responsibilities under this agreement. This agreement allows us to obtain payment more quickly than under the contractual terms of sale to this customer. Receivables sold are de-recognized from our Consolidated Balance Sheets. For the years ended December 31, 2022 and 2021, we sold $216.1 million and $202.2 million, of receivables. The proceeds from these sales of receivables are included within operating activities in our Consolidated Statements of Cash Flows. For the years ended December 31, 2022, 2021, and 2020 factoring expense on the sale of receivables was $1.8 million, $0.9 million, and $1.2 million. ENVIRONMENTAL AND ASSET RETIREMENT OBLIGATIONS We estimate our environmental and asset retirement obligations based on various assumptions and judgments, the specific nature of which varies in light of the particular facts and circumstances surrounding each liability. These estimates typically reflect assumptions and judgments as to the probable nature, magnitude and timing of required investigation, remediation and monitoring activities and the probable cost of these activities. We have accrued only for specific costs related to environmental matters that we have determined are probable and for which an amount can be reasonably estimated. For asset retirement obligations, the liability is accreted to its settlement value and, where appropriate, the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, we recognize a gain or loss for any difference between the settlement amount and the liability recorded. Our asset retirement obligation is included in "Deferred taxes and other long-term obligations" in the Consolidated Balance Sheets. Our asset retirement obligation reflects the estimated present value of our obligations for capping, closure and post closure cost with respect to landfills, asbestos remediation and other ongoing environmental monitoring. The following table represents the activity associated with our asset retirement obligations.
| For The Years Ended December 31,
| 2022 |  | 2021
Beginning balance | $ | 2.0 |  |  | $ | 3.8 |
Accretion expense | — |  |  | 0.1 |
Adjusted to other operating charges, net | — |  |  | (1.8) |
Payments made | (0.1) |  |  | (0.1) |
Ending balance | $ | 1.9 |  |  | $ | 2.0 |
The reduction to our asset retirement obligations for the year ended December 31, 2021 relates to the sale of assets discussed in Note 8, "Other Operating Charges, net".

X
- References No definition available. + Details
Name: | us-gaap_AccountingPoliciesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for all significant accounting policies of the reporting entity. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=126899994&loc=d3e18726-107790 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI https://asc.fasb.org/topic&trid=2122369 + Details
Name: | us-gaap_SignificantAccountingPoliciesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration