| Segment Information |
17. 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. Each segment’s profits and losses are measured on operating profits before non-operating pension income, interest expense, net, and income taxes. For many of these allocated expenses, the related assets and liabilities remain in the Corporate and Other segment. Chief Operating Decision Maker ASC 280-10-50-5 (Topic 280) defines the chief operating decision maker (“CODM”) as an individual or group of individuals responsible for assessing the performance of the operating segments of a public entity and determining the overall resource allocation to those operating segments. Based on these criteria, we deem our Chief Executive Officer as the CODM, as the Chief Executive Officer is responsible for evaluating our operating results and concluding on the overall resource allocation. Analysis of Operations by Reportable Segment An analysis of operations by reportable segment is as follows (dollars in millions):
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Three Months Ended June 30, 2025 |
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Packaging |
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Paper |
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Corporate and Other |
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Total |
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Trade sales |
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$ |
2,005.9 |
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$ |
145.8 |
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$ |
19.6 |
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$ |
2,171.3 |
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Intersegment sales |
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— |
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— |
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38.8 |
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38.8 |
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2,005.9 |
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145.8 |
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58.4 |
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2,210.1 |
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Elimination of intersegment sales |
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(38.8 |
) |
Net sales |
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2,171.3 |
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Less (a): |
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Variable costs (b) |
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(960.1 |
) |
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(82.8 |
) |
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— |
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— |
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Fixed costs (c) |
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(445.2 |
) |
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(21.8 |
) |
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— |
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— |
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Freight |
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(198.4 |
) |
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(15.2 |
) |
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— |
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— |
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Other segment items (d) |
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(55.9 |
) |
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(0.2 |
) |
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(96.8 |
) |
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— |
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Income (loss) from operations |
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346.3 |
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25.8 |
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(38.4 |
) |
(e) |
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333.7 |
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Non-operating pension expense |
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— |
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Interest expense, net |
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(13.1 |
) |
Income before taxes |
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$ |
320.6 |
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Other segment disclosures: |
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Segment sales to external customers |
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$ |
2,005.9 |
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$ |
145.8 |
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$ |
19.6 |
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(f) |
$ |
2,171.3 |
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Depreciation, amortization,
and depletion |
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131.8 |
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4.5 |
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4.4 |
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140.7 |
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Capital expenditures (g) |
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165.0 |
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1.0 |
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3.7 |
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169.7 |
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Assets |
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7,418.6 |
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405.3 |
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1,217.3 |
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9,041.2 |
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Three Months Ended June 30, 2024 |
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Packaging |
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Paper |
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Corporate and Other |
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Total |
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Trade sales |
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$ |
1,902.0 |
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|
$ |
150.1 |
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$ |
23.2 |
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$ |
2,075.3 |
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Intersegment sales |
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6.3 |
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— |
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38.8 |
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45.1 |
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1,908.3 |
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150.1 |
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62.0 |
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2,120.4 |
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Elimination of intersegment sales |
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(45.1 |
) |
Net sales |
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2,075.3 |
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Less (a): |
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Variable costs (b) |
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(937.1 |
) |
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(84.1 |
) |
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— |
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— |
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Fixed costs (c) |
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(412.9 |
) |
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(22.0 |
) |
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— |
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— |
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Freight |
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(201.0 |
) |
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(17.3 |
) |
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— |
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— |
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Other segment items (d) |
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(77.5 |
) |
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— |
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(92.5 |
) |
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— |
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Income (loss) from operations |
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279.8 |
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26.7 |
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(30.5 |
) |
(e) |
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276.0 |
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Non-operating pension income |
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1.1 |
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Interest expense, net |
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(10.4 |
) |
Income before taxes |
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$ |
266.7 |
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Other segment disclosures: |
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Segment sales to external customers |
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$ |
1,902.0 |
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$ |
150.1 |
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$ |
23.2 |
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(f) |
$ |
2,075.3 |
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Depreciation, amortization,
and depletion |
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120.1 |
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4.5 |
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3.9 |
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|
128.5 |
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Capital expenditures (g) |
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231.9 |
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2.6 |
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10.5 |
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|
245.0 |
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Assets |
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7,102.6 |
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|
383.6 |
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1,495.9 |
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8,982.1 |
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Six Months Ended June 30, 2025 |
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Packaging |
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Paper |
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Corporate and Other |
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Total |
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Trade sales |
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$ |
3,976.3 |
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$ |
300.0 |
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$ |
36.0 |
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$ |
4,312.3 |
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Intersegment sales |
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— |
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— |
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78.8 |
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78.8 |
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3,976.3 |
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300.0 |
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114.8 |
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4,391.1 |
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Elimination of intersegment sales |
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(78.8 |
) |
Net sales |
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4,312.3 |
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Less (a): |
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Variable costs (b) |
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(1,921.2 |
) |
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(165.7 |
) |
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— |
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— |
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Fixed costs (c) |
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(892.7 |
) |
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(40.6 |
) |
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— |
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— |
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Freight |
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(395.1 |
) |
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(32.0 |
) |
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— |
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— |
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Other segment items (d) |
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(142.9 |
) |
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(0.3 |
) |
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(186.6 |
) |
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— |
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Income (loss) from operations |
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624.4 |
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61.4 |
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(71.8 |
) |
(e) |
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614.0 |
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Non-operating pension expense |
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— |
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Interest expense, net |
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(26.0 |
) |
Income before taxes |
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$ |
588.0 |
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Other segment disclosures: |
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Segment sales to external customers |
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$ |
3,976.3 |
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$ |
300.0 |
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$ |
36.0 |
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(f) |
$ |
4,312.3 |
|
Depreciation, amortization,
and depletion |
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|
260.1 |
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|
9.1 |
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9.4 |
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|
278.6 |
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Capital expenditures (g) |
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296.1 |
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1.8 |
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19.9 |
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|
317.8 |
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Assets |
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7,418.6 |
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|
405.3 |
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1,217.3 |
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9,041.2 |
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Six Months Ended June 30, 2024 |
|
Packaging |
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Paper |
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Corporate and Other |
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Total |
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Trade sales |
|
$ |
3,695.4 |
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|
$ |
313.9 |
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$ |
45.5 |
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$ |
4,054.8 |
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Intersegment sales |
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11.1 |
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— |
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|
78.2 |
|
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|
89.3 |
|
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3,706.5 |
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|
313.9 |
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|
123.7 |
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|
4,144.1 |
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Elimination of intersegment sales |
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(89.3 |
) |
Net sales |
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4,054.8 |
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Less (a): |
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Variable costs (b) |
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|
(1,874.9 |
) |
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(173.5 |
) |
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|
— |
|
|
|
— |
|
Fixed costs (c) |
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(817.9 |
) |
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(43.5 |
) |
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|
— |
|
|
|
— |
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Freight |
|
|
(388.1 |
) |
|
|
(35.3 |
) |
|
|
— |
|
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|
— |
|
Other segment items (d) |
|
|
(142.0 |
) |
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|
(5.2 |
) |
|
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(191.7 |
) |
|
|
— |
|
Income (loss) from operations |
|
|
483.6 |
|
|
|
56.4 |
|
|
|
(68.0 |
) |
(e) |
|
472.0 |
|
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|
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|
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|
Non-operating pension income |
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|
2.2 |
|
Interest expense, net |
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(19.9 |
) |
Income before taxes |
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$ |
454.3 |
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Other segment disclosures: |
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Segment sales to external customers |
|
$ |
3,695.4 |
|
|
$ |
313.9 |
|
|
$ |
45.5 |
|
(f) |
$ |
4,054.8 |
|
Depreciation, amortization,
and depletion |
|
|
238.6 |
|
|
|
10.5 |
|
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|
7.8 |
|
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|
256.9 |
|
Capital expenditures (g) |
|
|
303.6 |
|
|
|
3.9 |
|
|
|
14.2 |
|
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|
321.7 |
|
Assets |
|
|
7,102.6 |
|
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|
383.6 |
|
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1,495.9 |
|
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8,982.1 |
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(a)The significant expense categories align with the segment-level information that is regularly provided to the CODM. (b)For the Packaging segment, primarily includes expense items for liner consumption, liner board discount, purchased sheets usage, medium consumption, raw materials, and hourly-employee related expenses and benefits. For the Paper segment, primarily includes expense items for chemicals, raw materials, finishing materials, and hourly-employee related expenses and benefits. (c)For the Packaging segment, primarily includes expense items for depreciation and salaried employee-related expenses and benefits. For the Paper segment, primarily includes expense items for depreciation, salaried employee-related expenses, and professional services. (d)Other segment items for each reportable segment primarily include: 1.Packaging: farmout purchases, certain divisional allocations, and other expense/income items. 2.Paper: other expense/income items. 3.Corporate and Other: unallocated corporate costs, transportation business activity, and activity related to LTP. (e)The significant expense categories reported for the Packaging and Paper segments are not used for Corporate and Other in the segment-level information that is regularly reviewed by the CODM. The CODM makes resource allocation decisions for Corporate and Other based on divisional income (loss) from operations. (f)The Corporate and Other segment sales to external customers is presented net of total company intersegment eliminations. (g)Includes “Additions to property, plant, and equipment” and excludes cash used for “Acquisition of business, net of cash acquired” as reported on our Consolidated Statements of Cash Flows.
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