Segment Information

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Segment Information

19. 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.

Our Jackson, Alabama mill had historically operated as a UFS mill, with its results of operations reported in our Paper segment. During the fourth quarter of 2020, in order to meet strong packaging demand and maintain appropriate inventory levels, we temporarily began producing linerboard on the No. 3 machine at our Jackson, Alabama mill. In the first quarter of 2021, we announced the discontinuation of production of UFS paper grades on the machine and the permanent conversion of the machine to produce linerboard and other paper-to-containerboard conversion related activities. In the third quarter of 2021, we began producing corrugating medium on the No. 1 machine at the Jackson mill (which had produced UFS paper in the past) to help satisfy our demand for containerboard, build necessary inventories, and evaluate the capability of the machine to produce containerboard on a cost-effective basis. For the periods presented, operating results for the Jackson mill are included in both the Packaging and Paper segments, as appropriate.

Each segment’s profits and losses are measured on operating profits before interest expense, net, non-operating pension income, and income taxes. For certain allocated expenses, the related assets and liabilities remain in the Corporate and Other segment.

Selected financial information by reportable segment was as follows (dollars in millions):

	Sales, net
Three Months Ended March 31, 2022	Trade		Intersegment			Total			Operating Income (Loss)
Packaging	$	1,960.0	$	4.5		$	1,964.5		$	362.2		(a)
Paper		153.5		—			153.5			22.4		(a)
Corporate and Other		22.9		35.4			58.3			(28.1	)
Intersegment eliminations		—		(39.9	)		(39.9	)		—
	$	2,136.4	$	—		$	2,136.4			356.5
Non-operating pension income										3.6
Interest expense, net										(19.8	)
Income before taxes									$	340.3

	Sales, net
Three Months Ended March 31, 2021	Trade		Intersegment			Total			Operating Income (Loss)
Packaging	$	1,619.8	$	3.8		$	1,623.6		$	257.9		(b)
Paper		164.4		0.2			164.6			8.7		(b)
Corporate and Other		23.0		32.4			55.4			(28.3	)
Intersegment eliminations		—		(36.4	)		(36.4	)		—
	$	1,807.2	$	—		$	1,807.2			238.3
Non-operating pension income										4.8
Interest expense, net										(23.5	)
Income before taxes									$	219.6

(a)	The three months ended March 31, 2022 include the following:
	1.	$1.5 million of charges related to the announced discontinuation of production of UFS paper grades on the No. 3 machine at the Jackson, Alabama mill associated with the permanent conversion of the machine to produce linerboard and other paper-to-containerboard conversion related activities.
	2.	$0.6 million of charges consisting of closure costs related to corrugated products facilities and acquisition and integration costs related to the December 2021 Advance Packaging Corporation acquisition.
(b)	The three months ended March 31, 2021 include the following:
	1.	$2.1 million of charges consisting of closure costs related to corrugated products facilities.
	2.	$1.1 million of charges related to the announced discontinuation of UFS paper grades on the No. 3 machine at the Jackson, Alabama mill in the first quarter of 2021 associated with the permanent conversion of the machine to produce linerboard and other paper-to-containerboard conversion related activities.