Discontinued Operations

9 Months Ended

Sep. 30, 2019

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

5. DISCONTINUED OPERATIONS

On October 31, 2018, we completed the previously announced sale of our Specialty Papers business on a cash free and debt free basis to Pixelle Specialty Solutions LLC, an affiliate of Lindsay Goldberg (the “Purchaser”) for $360 million.  Cash proceeds from the sale were approximately $323 million in cash reflecting estimated purchase price adjustments as of the closing date and the assumption by the Purchaser of approximately $38 million in retiree healthcare liabilities. In addition, the Purchaser assumed approximately $210 million of pension liabilities relating to Specialty Papers’ employees and received approximately $274 million of related assets from the Company’s existing pension plan.  

In connection with the sale of Specialty Papers, we entered into a Transition Services Agreement with Purchaser pursuant to which we agreed to provide various back-office and information technology support until the business is fully separated from us, which was completed in the third quarter of 2019.

The following table sets forth a summary of discontinued operations included in the condensed consolidated statements of income:

	Three months ended September 30						Nine months ended September 30
In thousands	2019			2018			2019			2018
Net sales	$	—		$	201,288		$	—		$	590,757
Energy and related sales, net		—			844			—			3,217
Total revenues		—			202,132			—			593,974
Costs of products sold		—			181,628			—			572,820
Gross profit		—			20,504			—			21,154
Selling, general and administrative expenses		(2,455	)		6,058			(2,684	)		18,566
Gains on dispositions of plant, equipment and timberlands, net		—			3			—			(440	)
Operating income		2,455			14,443			2,684			3,028
Non-operating income (expense)
Interest expense		—			(2,281	)		—			(6,017	)
Other, net		(1,393	)		(1,174	)		(1,393	)		(81	)
Impairment charge		—			(125,644	)		—			(125,644	)
Income (loss) before income taxes		1,062			(114,656	)		1,291			(128,714	)
Income tax benefit		(2,519	)		(19,530	)		(2,511	)		(28,361	)
Income (loss) from discontinued operations	$	3,581		$	(95,126	)	$	3,802		$	(100,353	)

The amounts for 2018 presented above are derived from the segment reporting for Specialty Papers adjusted to include certain retirement benefit costs and to exclude corporate shared services costs which are required to remain in continuing operations. Interest expense was allocated to discontinued operations based on borrowings under the revolving credit facility required to be repaid with proceeds from the sale of Specialty Papers.  

The following table sets forth a summary of cash flows from discontinued operations which is included in the condensed consolidated statements of cash flows:

	Nine months ended September 30
In thousands	2019			2018
Net cash provided (used) by operating activities	$	(9,749	)	$	33,721
Net cash used by investing activities		(8,221	)		(14,018	)
Net cash provided by financing activities		—			125
Change in cash and cash equivalents from discontinued operations	$	(17,970	)	$	19,828