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PKG · Packaging Corp. of America

28 filings

10-K

PKG 10-K Annual Reports

Packaging Corp. of America - 28 annual reports

Filing record · 2016–202610-K1110-Q328-K91

2025
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2025
Packaging Corporation of America (PCA) reported 2025 net sales of $8.99 billion, up from $8.38 billion in 2024, and net income of $774.1 million, or $8.58 per diluted share, compared with $805.1 million, or $8.93 per diluted share, in 2024. Excluding special items, net income was $888.0 million, or $9.84 per diluted share, versus $814.5 million, or $9.04 per diluted share, in 2024. Management attributed the improvement in legacy PCA earnings to higher prices and mix in Packaging and Paper and lower fiber costs, partly offset by a loss of ($0.16) per share from the first four months of ownership of the acquired Greif containerboard business. Special items totaled $114 million of expense in 2025, including $128.0 million of Wallula mill restructuring charges. The company completed the $1.8 billion cash acquisition of the Greif containerboard business on September 2, 2025, adding two containerboard mills with approximately 800,000 tons of production capacity. Cash from operations rose to $1,557.5 million from $1,191.2 million, while investing outflows were $2,572.9 million, reflecting the acquisition and $828.9 million of capital expenditures. Total debt reached $4.0 billion at year end, with $573 million of undrawn revolver capacity net of letters of credit, and liquidity was $1,241 million including borrowing availability. The company expects 2026 capital investments of $800 million to $870 million. The Paper segment remains under pressure: its largest customer, ODP Corporation, represented 58% of Paper segment sales and 4% of consolidated sales in 2025, and the supply agreement runs through December 31, 2026. Management also noted a $70 per ton linerboard and medium price increase effective March 1, 2026, and expects first-quarter 2026 earnings to be lower than the fourth quarter of 2025.
Feb 26, 2026
2024
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2024
Packaging Corporation of America (PCA) reported net sales of $8.4 billion for 2024, up from $7.8 billion in 2023, and net income of $805 million, or $8.93 per diluted share, compared with $765 million, or $8.48 per diluted share, in 2023. Excluding special items, net income was $814 million, or $9.04 per diluted share. The increase was driven primarily by higher volumes in the Packaging and Paper segments and lower freight and logistics expenses, partially offset by lower prices and mix, higher operating and converting costs, and higher annual outage expense. Packaging segment operating income rose to $1,102 million from $1,074 million, and Paper segment operating income rose to $130 million from $119 million. Cash flow from operations was $1,191 million in 2024, versus $1,315 million in 2023. Investing outflows were $278 million, including $670 million of capital investments, and financing outflows were $876 million, which included $449 million of dividends and the repayment of $400 million of 3.65% senior notes due 2024. The company ended 2024 with $685 million of cash and cash equivalents, $167 million of marketable debt securities, and $323 million of unused revolver capacity. Total debt was $2.5 billion, all fixed-rate senior notes. The company expects 2025 capital investments of $840 million to $870 million. Management notified customers of a $70 per ton linerboard and $90 per ton medium price increase effective January 1, 2025, and a $60 per ton increase for office, printing, and converting papers effective January 13, 2025. The DeRidder mill litigation was settled for a minimum of $59.2 million, which is fully offset by a corresponding insurance recovery receivable. The filing also notes that ODP Corporation, the largest Paper segment customer, accounted for 58% of Paper segment sales and 4% of consolidated sales in 2024, and that the agreement runs through December 31, 2025.
Feb 27, 2025
2023
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2023
Packaging Corporation of America (PCA) reported net sales of $7.8 billion for 2023, down from $8.5 billion in 2022, and net income of $765 million, or $8.48 per diluted share, compared with $1,030 million, or $11.03 per diluted share, in 2022. Net income excluding special items was $784 million, or $8.70 per diluted share. Management attributed the decline primarily to lower prices and mix in the Packaging segment and lower volumes in the Packaging and Paper segments, partially offset by higher Paper prices and mix, lower operating and converting costs, and lower annual outage expense. Packaging segment income from operations fell to $1,074 million from $1,424 million, while Paper segment income rose to $119 million from $103 million. The company ended 2023 with $1,206 million of cash and marketable debt securities and $1,529 million of total liquidity including revolver availability. Net cash provided by operating activities was $1,315 million, compared with $1,495 million in 2022. Capital expenditures for property and equipment were $470 million, and dividends paid totaled $449 million. Total debt outstanding was $2.9 billion, all fixed-rate senior notes. In November 2023 the company issued $400 million of 5.70% senior notes due 2033 and intends to use the proceeds, with cash on hand, to repay its 3.65% senior notes due September 15, 2024. For 2024, management expects first-quarter earnings to be lower than fourth-quarter 2023, citing a prolonged outage at the Jackson mill for the conversion of the No. 3 machine and a scheduled outage at the Counce mill. The company notified customers of price increases of $70 per ton for linerboard and $100 per ton for medium effective January 1, 2024, and expects 2024 capital investments of $470 million to $490 million.
Feb 29, 2024
2022
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2022
Packaging Corporation of America (PCA) is the third largest producer of containerboard products and a leading producer of uncoated freesheet (UFS) paper in North America, operating eight mills and 89 corrugated products plants. For 2022, net sales were $8.5 billion, up from $7.7 billion in 2021, and net income was $1,029.8 million, or $11.03 per diluted share, compared with $841.1 million, or $8.83 per diluted share, in 2021. Excluding special items, net income was $1,040.2 million, or $11.14 per diluted share. The Packaging segment drove the results, with segment income from operations of $1,423.7 million, supported by higher containerboard and corrugated prices and mix, partially offset by lower corrugated shipments of 63.4 billion square feet, down 3.4% for the year. The filing describes a deterioration in packaging demand beginning in mid-2022 as customers reduced inventories, leading PCA to cut containerboard production during the second half of the year, and published containerboard prices began declining in the fourth quarter of 2022. Management expects first-quarter 2023 earnings to be lower than the fourth quarter of 2022. Cash from operating activities was $1,495.0 million, capital expenditures were $824.2 million, and dividends paid were $420.3 million, while the company repurchased 4.0 million shares for $522.6 million. At year-end, the company had $2.5 billion of fixed-rate senior notes outstanding and $470 million of cash and marketable debt securities. The Paper segment improved, with income from operations of $103.0 million compared with $39.1 million in 2021, driven mainly by higher paper prices and mix. The company's largest Paper customer, ODP Corporation, accounted for 48% of Paper segment sales and 4% of consolidated sales, and a new agreement with ODP runs through December 31, 2024.
Feb 23, 2023
2021
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2021
Packaging Corporation of America (PCA) reported net sales of $7.73 billion for 2021, up from $6.66 billion in 2020, and net income of $841 million, or $8.83 per diluted share, compared with $461 million, or $4.84 per diluted share, in 2020. Excluding special items, net income was $894 million, or $9.39 per diluted share, versus $550 million, or $5.78 per diluted share, in 2020. The filing attributes the increase primarily to higher prices and mix in the Packaging and Paper segments and higher Packaging volumes, partially offset by higher operating and converting costs, higher annual outage expense, lower Paper volumes, and higher freight and logistics expense. Packaging segment income from operations rose to $1,306 million from $830 million, while Paper segment income was $39 million compared with a loss of $20 million in 2020. Cash flow and liquidity remained solid. Operating cash flow was $1,094 million, and the company ended the year with $765 million of cash and marketable debt securities and $1.1 billion of total liquidity. Capital expenditures were $605 million, and the company completed the $195 million acquisition of Advance Packaging Corporation in December 2021. Shareholders received $380 million in dividends, and the company repurchased $193 million of stock in the fourth quarter. The Board authorized a new $1 billion repurchase program in January 2022. The filing highlights risks including cost inflation across fiber, energy, chemicals, labor and transportation, a reliance on Office Depot for 51% of Paper segment sales, continued secular decline in uncoated freesheet demand, and total debt of $2.5 billion, all at fixed rates. Management expects first-quarter 2022 earnings, excluding special items, to be lower than fourth-quarter 2021 earnings, and expects 2022 capital investments of about $800 million.
Feb 24, 2022
2020
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2020
Packaging Corporation of America (PCA) is the third largest producer of containerboard and the third largest producer of uncoated freesheet (UFS) paper in North America, operating six containerboard mills, two paper mills and 90 corrugated products plants. Net sales were $6.66 billion in 2020, down from $6.96 billion in 2019, and net income was $461 million, or $4.84 per diluted share, compared with $696 million, or $7.34 per diluted share, in 2019. Excluding special items, diluted earnings per share were $5.78 in 2020 versus $7.65 in 2019. The decline was driven primarily by lower prices and mix in the Packaging and Paper segments, lower Paper volumes, higher freight and logistics expense and higher annual outage expense, partly offset by higher Packaging volumes. The Packaging segment was the core earnings driver, with 2020 income from operations of $830 million and EBITDA excluding special items of $1,229 million, while the Paper segment posted an operating loss of $20 million after a $55.2 million goodwill impairment tied to COVID-19 pressure on uncoated freesheet demand. The filing states that corrugated products shipments rose 5.8% in 2020, that demand remained strong into early 2021, and that the company notified customers of price increases on containerboard and corrugated products in the fourth quarter of 2020. Balance sheet and cash flow were solid. The company ended 2020 with $975 million of cash and cash equivalents, $148 million of marketable debt securities and $326 million of unused revolver capacity, and reported $1.03 billion of operating cash flow. Total debt was $2.5 billion, all fixed-rate senior notes. Dividends declared were $3.37 per share for 2020, and the quarterly dividend was increased to $4.00 per share annualized in December 2020. Management expects 2021 capital investments of $500 million to $525 million, excluding possible conversion of the Jackson No. 3 paper machine to containerboard.
Feb 24, 2021
2019
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2019
Packaging Corporation of America (PCA) reported 2019 net sales of $6.96 billion, down from $7.01 billion in 2018, and net income of $696 million, or $7.34 per diluted share, compared with $738 million, or $7.80 per diluted share, in 2018. Excluding special items, net income was $726 million, or $7.65 per diluted share, versus $760 million, or $8.03 per diluted share, in 2018. Management attributed the decline primarily to lower Packaging prices and mix and higher operating and converting costs, partly offset by higher Packaging volumes and higher Paper prices and mix. The Packaging segment, which generated $5.93 billion of sales, saw segment income from operations fall to $963 million from $1,045 million, while the Paper segment's income rose to $175 million from $98 million on higher paper prices and mix. Cash from operating activities increased to $1.21 billion from $1.18 billion. The company spent $400 million on capital investments, paid $299 million in common dividends, and refinanced $900 million of senior notes in November 2019. Total debt was $2.5 billion, all at fixed rates, with $329.2 million undrawn under the revolving credit facility. The outlook for the first quarter of 2020 points to lower containerboard prices, scheduled maintenance outages at three of the largest mills, and higher expenses, and management expects first-quarter 2020 earnings to be lower than fourth-quarter 2019. Office Depot, the largest Paper segment customer, accounted for 50% of Paper segment sales and 7% of consolidated sales in 2019, and its supply agreement now runs through December 31, 2022.
Feb 26, 2020
2018
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2018
Packaging Corporation of America (PCA) reported net sales of $7.01 billion for 2018, up from $6.44 billion in 2017, and net income of $738 million, or $7.80 per diluted share, compared with $669 million, or $7.07 per diluted share, in 2017. Excluding special items, net income was $760 million, or $8.03 per diluted share, versus $569 million, or $6.02 per diluted share, in 2017. The company attributed the increase primarily to higher Packaging segment prices and mix and volumes, higher Paper segment prices and mix, lower taxes, and lower wood and recycled fiber costs, partly offset by higher operating and converting costs, freight and logistics expenses, and annual outage expense. Packaging segment income from operations rose to $1,045 million in 2018 from $950 million in 2017, while Paper segment income rose to $98 million from $54 million. Operating cash flow was $1,180 million in 2018 versus $856 million in 2017. Capital expenditures for property and equipment were $551 million in 2018, and the company expects 2019 capital investments of $390 million to $410 million. Total debt outstanding was $2.5 billion at year-end, all fixed-rate senior notes, and the company paid $268 million in dividends in 2018. The filing also highlights concentration and operational risks. Office Depot represented 47% of Paper segment sales and 7% of consolidated sales in 2018, and its supply agreement runs through December 2019. The company expects first-quarter 2019 earnings excluding special items to be lower than fourth-quarter 2018, citing higher labor and benefit costs, inflation in chemicals and repairs, and a higher tax rate.
Feb 28, 2019
2017
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2017
Packaging Corporation of America (PCA) reported 2017 net sales of $6.44 billion, up from $5.78 billion in 2016, and net income of $669 million, or $7.07 per diluted share, compared with $450 million, or $4.75 per share, in 2016. Net income included $100 million of income from special items, including a $122 million estimated income tax benefit from the Tax Cuts and Jobs Act (H.R.1). Excluding special items, net income was $569 million, or $6.02 per diluted share, versus $462 million, or $4.88 per share, in 2016. The Packaging segment drove the results: its income from operations rose to $944 million from $711 million, on higher containerboard and corrugated products prices and mix and higher sales and production volumes. The Paper segment's income from operations fell to $62 million from $138 million, reflecting lower volumes and prices and the Wallula mill restructuring. The company is restructuring its Paper business: it will stop uncoated freesheet production at its Wallula, Washington mill in the second quarter of 2018 and convert the No. 3 paper machine to a 400,000 ton-per-year virgin kraft linerboard machine, at a total capital cost of about $150 million. In October 2017 PCA acquired Sacramento Container Corporation for $265 million in cash. Operating cash flow was $856.1 million, and capital expenditures were $343.0 million. Debt totaled $2.7 billion and is entirely fixed-rate after the December 2017 issuance of $1 billion in senior notes, which repaid the term loans. Office Depot accounted for 43% of Paper segment sales revenue and 7% of consolidated sales. The company expects continued strong Packaging demand in the first quarter of 2018, with first-quarter earnings excluding special items expected to be slightly lower than the fourth quarter of 2017. Management anticipates higher freight, labor, energy, and other costs, and a lower tax rate going forward.
Feb 28, 2018
2017
Packaging Corp. of America Annual Report, Year Ended Feb 28, 2017
Packaging Corporation of America (PCA) reported 2016 net sales of $5,779.0 million, up from $5,741.7 million in 2015, and net income of $449.6 million, or $4.75 per diluted share, compared with $436.8 million, or $4.47 per share, in 2015. Excluding special items, net income was $462.0 million, or $4.88 per diluted share. Packaging segment income from operations was $711.1 million, roughly flat versus $714.9 million, as higher volumes and lower operating costs were offset by lower containerboard and corrugated prices and mix. Paper segment income rose to $138.1 million from $112.5 million, driven mainly by lower fiber, mill outage and energy costs. The company generated operating cash flow of $801.2 million and paid $216.1 million in dividends during the year. During 2016 PCA acquired TimBar Corporation for $385.6 million net of cash acquired, funded by a new $385.0 million five-year term loan, and Columbus Container, Inc. for $99.7 million, funded with cash on hand. Long-term debt reached $2,620.0 million at year-end, with $1,010.7 million of variable-rate term loans outstanding, and $193.0 million remained available under the share repurchase authorization. The company expects 2017 capital investments of $310 million to $325 million and notes that its quarterly dividend was raised to $0.63 per share. A subsequent event disclosed in the filing is an February 8, 2017 explosion at the DeRidder, Louisiana paper mill during annual repair work on piping, which resulted in three contractor fatalities. The mill resumed full operation as of February 19, 2017, and the company was estimating the financial impact, with property and business interruption insurance subject to a $5 million deductible.
Feb 28, 2017
2015
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2015
Packaging Corporation of America (PCA), headquartered in Lake Forest, Illinois, reported 2015 net sales of $5.74 billion and net income of $436.8 million, or $4.47 per diluted share, compared with $392.6 million, or $3.99 per share, in 2014. Excluding special items, net income was $442.6 million, or $4.53 per diluted share, versus $458.6 million and $4.66 per share in 2014. Management cited lower white paper prices and mix and lower export containerboard prices as headwinds, while the company completed integration of Boise Inc., generated a record $762.6 million of operating cash flow, and returned $355.5 million to shareholders through share repurchases and dividends. The Packaging segment reported segment income of $714.9 million, up from $663.2 million, with record volumes in both mills and corrugated plants. The Paper segment's income fell to $112.5 million from $135.4 million, as total sales prices were lower. Net sales declined 1.9% to $5,741.7 million, with Paper sales down 4.9% due to 4.8% lower sales prices and mix. Long-term debt was $2.3 billion at year-end, with $326.5 million of unused revolver capacity, and the company expects 2016 capital investments of $250.0 million to $265.0 million. The filing notes significant customer concentration: Office Depot represented 45% of Paper segment sales in 2015, and Office Depot has agreed to be acquired by Staples, Inc., a transaction subject to regulatory approval. In February 2016, antidumping and countervailing duties were imposed on certain white paper imports from Australia, Brazil, China, Indonesia, and Portugal. The board also authorized an additional $200 million share repurchase on February 25, 2016, after fully using the $150 million authorization from July 2015.
Feb 26, 2016
2014
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2014
Packaging Corporation of America (PCA) reported record 2014 net sales of $5,852.6 million, up 59.7% from $3,665.3 million in 2013, driven mainly by a full year of the Boise Inc. acquisition completed October 25, 2013 for $2.1 billion including assumed debt. Net income was $392.6 million, or $3.99 per diluted share, compared with $441.3 million, or $4.52 per share, in 2013. Excluding special items, the company reported net income of $458.6 million, or a record $4.66 per diluted share, versus $325.2 million and $3.33 per share in 2013. Special items in 2014 included $65.8 million tied to the DeRidder mill restructuring, $19.9 million of Boise integration and other costs, and $17.6 million for a class action settlement. The 2013 result was helped by $166.0 million of income tax benefits from the reversal of alternative energy tax credit reserves. Segment results show Packaging income of $663.2 million (up from $554.2 million) and Paper income of $135.4 million (up from $13.5 million, reflecting only about two months of ownership in 2013). Operating cash flow was $736.1 million, capital expenditures were $420.2 million, and cash dividends paid totaled $157.4 million. Long-term debt was $2.3 billion at year end, with a $350.0 million revolver undrawn. The company announced a dividend increase from $1.60 to $2.20 per share annually, with the first $0.55 quarterly payment set for April 2015. Investors should note concentration risk in the Paper segment: Office Depot (including OfficeMax) represented 44% of Paper segment sales in 2014, and Office Depot had agreed to be acquired by Staples. The outlook for first-quarter 2015 calls for lower earnings than fourth quarter 2014 due to maintenance outages at Counce and DeRidder and seasonally weaker conditions.
Feb 27, 2015
2013
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2013
Packaging Corporation of America (PCA), headquartered in Lake Forest, Illinois, reported 2013 net sales of $3,665.3 million, up 28.9% from $2,843.9 million in 2012, and net income of $436.3 million, or $4.47 per diluted share, compared with $163.8 million, or $1.68 per share, in 2012. Results were driven by the October 25, 2013 acquisition of Boise Inc. for $2.1 billion, including assumed debt, which added a Paper segment and roughly two months and five days of results. Excluding special items, net income was $320.2 million, or $3.28 per diluted share. Special items in 2013 included a $166.0 million income tax benefit from the reversal of alternative energy tax credit reserves, partly offset by acquisition, integration, inventory step-up and pension curtailment costs. The company now reports three segments: Packaging, Paper and Corporate and Other. Packaging net sales were $3,431.7 million, and segment income from operations was $545.9 million. Total debt rose to $2,572.7 million at December 31, 2013, from $819.5 million at year-end 2012, after $2.35 billion of new borrowings used to fund the acquisition. Cash from operating activities was $608.2 million, and capital expenditures for 2014 are expected to be between $380.0 million and $400.0 million. Management also expects first-quarter 2014 earnings, excluding special items, to be comparable to fourth-quarter 2013 results. Key risks highlighted in the filing include customer concentration, since Office Depot (including OfficeMax) accounted for 38% of Paper segment sales from the acquisition date through year-end, higher leverage, pending Boiler MACT compliance spending of $38 million to $42 million over three years, and an open Sherman Act class action relating to containerboard pricing.
Feb 28, 2014
2012
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2012
Packaging Corporation of America (PCA) reported net sales of $2.84 billion and net income of $163.8 million for 2012, compared with $2.62 billion and $158.0 million in 2011. Income from operations rose to $443.5 million from $272.7 million, but this figure includes a $95.5 million benefit from reallocating alternative fuel credits. Excluding special items, the company reported net income of $200.7 million ($2.06 per diluted share) for 2012, versus $161.8 million ($1.61 per diluted share) for 2011. Management attributed the improvement to higher sales volumes and prices, along with lower energy, recycled fiber and chemical costs, partially offset by higher labor, fringe benefit, depreciation and transportation costs. The filing shows a company that remained cash generative and returned capital to shareholders. Net cash from operating activities was $404.2 million in 2012, and the company paid dividends, repurchased $45.2 million of stock, and redeemed its $400.0 million 5.75% notes using proceeds from new $400.0 million 3.90% notes due 2022. Total debt obligations were $819.5 million at year-end 2012 against stockholders' equity of $969.5 million. The quarterly dividend was raised to $0.3125 per share from $0.25, and management expects first-quarter 2013 earnings, excluding special items, to be lower than the fourth quarter's $0.61 per diluted share. Key risks disclosed include a pending Sherman Act class action (Kleen Products LLC v. Packaging Corp. of America et al.) alleging containerboard price-fixing, for which the company cannot estimate a range of losses, and expected Boiler MACT capital expenditures of $45.0 million to $55.0 million over three years. The 2012 results also reflect a $19.6 million net charge tied to alternative energy tax credits and a $21.3 million redemption premium on the 5.75% notes.
Feb 28, 2013
2011
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2011
Packaging Corporation of America (PCA) is the fourth largest producer of containerboard and corrugated products in the United States by production capacity. In 2011 it produced 2.5 million tons of containerboard, with about 80% consumed in its own corrugated plants, and shipped about 32.5 billion square feet of corrugated products. Net sales were $2.62 billion in 2011, up from $2.44 billion in 2010, and net income was $158.0 million ($1.57 per diluted share), down from $205.4 million in 2010. The 2010 result included $86.8 million of alternative energy tax credits recorded in income from operations and a tax benefit, so the company's results excluding special items were $161.8 million ($1.61 per diluted share) in 2011 versus $166.3 million ($1.62 per diluted share) in 2010, as reported in the filing's non-GAAP reconciliation. Operating performance was driven by higher corrugated volumes (up 5.0%) and higher prices, offset by increased costs for transportation, chemicals, fiber and labor. Cash from operations was $345.5 million in 2011. PCA spent $280.2 million on property, plant and equipment additions and $57.3 million on corrugated acquisitions, and it repurchased $125.0 million of common stock while paying $76.0 million in dividends. Total debt obligations rose to $830.3 million at year end, and the quarterly dividend was raised to $0.20 per share from $0.15. Key items for investors include a pending tax matter: PCA amended its 2009 tax return in February 2012, which is expected to produce a first-quarter 2012 non-cash, after-tax charge of $23 million. The company carries a $102.0 million reserve for uncertain tax positions tied to cellulosic biofuel credits, and the IRS is reviewing those credits. Separately, PCA and eight other containerboard producers face a Sherman Act class action (Kleen Products) seeking treble damages, which the company says is without merit. PCA expects first-quarter 2012 earnings, excluding special items, to be approximately equal to fourth-quarter 2011 reported earnings of $0.40 per diluted share.
Feb 21, 2012
2010
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2010
Packaging Corporation of America (PCA) reported 2010 net sales of $2.44 billion, up from $2.15 billion in 2009, and net income of $205.4 million, or $2.00 per diluted share, compared with $265.9 million in 2009. Income from operations fell to $185.4 million from $352.5 million, mainly because of the reversal of 2009 alternative fuel mixture tax credits and the recording of cellulosic biofuel credits in the income tax line. Excluding tax credits and special items, the company reported net income of $166.3 million, or $1.62 per diluted share, versus $95.9 million, or $0.94, in 2009. Higher sales prices and volumes drove the improvement, partly offset by higher fiber, transportation and labor costs. Recycled fiber costs more than doubled, up 122% on average. The company is the fifth largest U.S. producer of containerboard and corrugated products by production capacity and operates four containerboard mills and 67 corrugated manufacturing operations. Operating cash flow rose to $349.9 million in 2010, and cash and equivalents declined to $196.6 million after $321.3 million of investing outflows, largely for energy optimization projects at the Counce and Valdosta linerboard mills. The company also disclosed a $102.0 million reserve for uncertain tax positions tied to its cellulosic biofuel credits, which the IRS is expected to review, and a putative Sherman Act class action seeking treble damages that the company says is without merit. For 2011, PCA expects first-quarter earnings before special items to fall below the $53 million reported for the fourth quarter of 2010, reflecting planned mill maintenance outages, higher fiber and energy costs and a higher effective tax rate. The company plans capital expenditures of $255.0 million in 2011, including $115.0 million for the energy optimization projects.
Feb 22, 2011
2009
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2009
Packaging Corporation of America (PCA) reported 2009 net sales of $2.15 billion, down from $2.36 billion in 2008, as lower sales volume and lower corrugated products and containerboard prices weighed on results. Net income rose to $265.9 million, or $2.60 per diluted share, from $135.6 million, but the increase was driven largely by an alternative fuel mixture tax credit of $168.4 million recorded in income from operations. Excluding that credit, the company's income from operations decreased $57.8 million for 2009, according to the filing. The company describes itself as the fifth largest producer of containerboard and corrugated products in the United States by production capacity, operating four containerboard mills and 68 corrugated manufacturing operations. Demand and pricing showed signs of recovery during 2009. Corrugated products shipments fell 4.6% for the year but improved steadily from the second quarter, and the mills ran at 94% of capacity. Containerboard prices dropped $70 per ton during 2009 and then rose $50 per ton in January 2010. Management expects first-quarter 2010 earnings to be lower than the fourth-quarter 2009 earnings of $16 million, which excluded $44 million of alternative fuel mixture tax credit income. The filing also notes that the credit expired on December 31, 2009, and that PCA plans about $300.0 million of 2010 capital expenditures, including up to $200.0 million for energy optimization projects at its Counce and Valdosta mills. Cash flow from operations was $306.1 million in 2009, and cash and cash equivalents rose to $260.7 million at year end. Total debt obligations were $680.9 million, and stockholders' equity increased to $898.8 million. The company paid dividends of $0.15 per share in each quarter of 2009, versus $0.30 per quarter in 2008, and made no share repurchases in 2009.
Feb 17, 2010
2008
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2008
Packaging Corporation of America (PCA) reported 2008 net sales of $2,360.5 million, up $44.5 million from $2,316.0 million in 2007, as higher selling prices ($111.0 million) were largely offset by lower sales volume ($66.5 million). Income from operations fell $51.7 million to $241.8 million, and net income declined to $135.6 million, or $1.31 per diluted share, from $170.1 million. Management attributed the earnings decline primarily to higher energy and transportation costs, lower volume, and higher wood fiber and labor costs, with a severe fourth-quarter 2008 economic downturn reducing corrugated shipments and forcing about 90,000 tons of mill production cuts. Management expects first-quarter 2009 earnings to be lower than fourth-quarter 2008 earnings. The company remained a fifth-largest U.S. containerboard and corrugated products producer, operating four containerboard mills and 67 corrugated manufacturing operations. Cash from operations was $269.3 million in 2008, versus $300.1 million in 2007, and capital expenditures are expected to be $90.0 million in 2009. Total debt was $659.0 million principal at year-end, with $109.0 million due within one year under the receivables facility, and $130.6 million of unused capacity on its $150.0 million revolver. Stockholders' equity fell to $683.9 million, and the company repurchased 3,142,600 shares during 2008 while paying $1.20 per share in dividends declared. The company reported it was in compliance with its debt covenants at December 31, 2008, but noted that a prolonged and severe downturn could affect its ability to comply. Management also disclosed that it is in material compliance with environmental rules and that its environmental reserve totaled $8.3 million at year-end.
Feb 27, 2009
2007
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2007
Packaging Corporation of America (PCA) is the sixth largest producer of containerboard and corrugated products in the United States by production capacity. In 2007 it reported net sales of $2.3 billion (up $129.0 million, or 5.9%, from 2006), net income of $170.1 million (diluted EPS $1.61, versus $1.20 in 2006), and produced about 2.4 million tons of containerboard and shipped 31.2 billion square feet of corrugated products. The improvement was driven mainly by higher containerboard and corrugated product prices, partially offset by higher recycled fiber, labor, benefit and transportation costs. Income from operations rose $67.6 million, or 29.9%, to $293.5 million. The company operates four containerboard mills, 67 corrugated manufacturing operations and about 8,350 employees, with roughly 75% of hourly employees unionized. Cash from operations rose to $300.1 million, and the company ended 2007 with $228.1 million in cash and cash equivalents against $677.2 million of total debt. Management expects first-quarter 2008 earnings to be lower than fourth-quarter 2007 diluted EPS of $0.42, due to planned mill maintenance outages and seasonally higher energy and fiber costs. The company also raised its quarterly dividend to $0.30 per share and authorized a new $150 million share repurchase program. The $150.0 million receivables facility and $400.0 million of 5¾% notes due 2013 remain key financing elements, and the $150 million 4⅜% notes due August 2008 are slated for refinancing.
Feb 20, 2008
2006
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2006
Packaging Corporation of America (PCA), the sixth largest producer of containerboard and corrugated products in the United States based on production capacity, reported net sales of $2.19 billion and net income of $125.0 million for fiscal 2006, compared with $1.99 billion and $52.6 million in 2005. Income from operations rose to $225.9 million from $116.1 million, driven primarily by higher sales prices and volumes for corrugated products and containerboard and an improved sales mix. Gross profit as a percentage of net sales increased from 15.4% to 20.3%. Diluted earnings per share were $1.20, versus $0.49 in 2005. The 2005 results included $14.0 million of net dividends from Southern Timber Venture, LLC, and PCA received no STV dividends in 2006. Cash flow and balance sheet data show operating cash flow of $246.6 million, capital spending of $88.2 million in additions to property, plant and equipment, and cash and equivalents of $161.8 million at year-end. Total debt was $686.9 million, and the company paid $1.00 per share in dividends declared for both 2006 and 2005. The company expects 2007 capital expenditures of $110.0 million to $120.0 million and expects first-quarter 2007 earnings to be lower than fourth-quarter 2006 earnings because of planned mill maintenance outages at the Counce and Valdosta linerboard mills. Management also noted higher transportation, energy, labor, and benefit costs during the year, and recycled fiber costs ended 2006 about 20% above year-end 2005 levels. Key risks disclosed include the commodity nature of containerboard and the resulting pricing pressure, reliance on external wood fiber since PCA owns no timberlands, rising recycled fiber and purchased energy costs, and covenant restrictions under its senior credit facility, receivables facility, and note indenture. Ernst & Young LLP issued an unqualified opinion on both the financial statements and internal control over financial reporting as of December 31, 2006.
Mar 1, 2007
2005
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2005
Packaging Corporation of America reported net sales of $1.99 billion for 2005, up $103.6 million, or 5.5%, from 2004, driven mainly by higher corrugated products sales prices and volumes. Corrugated volume rose 4.2% to 31.2 billion square feet. Profitability declined: income before interest and taxes fell $24.4 million, or 17.3%, to $116.1 million, and net income dropped to $52.6 million ($0.49 per diluted share) from $68.7 million ($0.64). The filing attributes the margin pressure to higher transportation, energy, wood fiber, wage and benefit costs, and notes that income from Southern Timber Venture dividends was $14.0 million in 2005 versus $27.8 million in 2004. Cash generation remained solid, with net cash from operating activities of $242.7 million. Financing outflows of $181.9 million were driven by the December 2005 repurchase of 4,500,000 shares from PCA Holdings LLC for $93.1 million and higher dividends. The company raised its quarterly dividend to $0.25 per share in 2005 from $0.15, totaling $1.00 per share for the year. Shareholders' equity declined to $681.4 million from $817.6 million, and total debt was $695.2 million at year-end. Management expects 2006 capital expenditures of $95.0 million to $105.0 million. Ownership and governance remain concentrated. PCA Holdings LLC, controlled by Madison Dearborn Partners, sold 17,825,000 shares in a December 2005 secondary offering at $21.50 per share and held 21.0% of outstanding shares as of February 17, 2006. Two Madison Dearborn representatives sit on the seven-member board. The filing reports that the company is in material compliance with environmental regulations and has $5.5 million in environmental reserves.
Feb 21, 2006
2004-A
Packaging Corp. of America Annual Report (Amendment), Year Ended Dec 31, 2004
Packaging Corporation of America filed this Form 10-K/A (Amendment No. 1) for the fiscal year ended December 31, 2004, to amend its original annual report filed March 9, 2005. The amendment adds the audited financial statements of Southern Timber Venture, LLC, as required by Rule 3-09 of Regulation S-X, along with the auditors' consent. It also corrects the age of one executive officer in Item 10 of Part III and re-executes the Section 302 and Section 906 certifications. The filing states that it does not otherwise modify the original report. As of March 8, 2005, there were 107,360,661 shares of Common Stock outstanding. The aggregate market value of common equity held by nonaffiliates was approximately $1,471,153,458 at June 30, 2004. The most substantive content concerns Southern Timber Venture, LLC, a timberland venture in which PCA was a 31.3% owner at December 31, 2004 (33.3% at December 31, 2003). In December 2004, the venture sold approximately 153,000 acres of timberland in Mississippi, Tennessee and Alabama for approximately $158.4 million, recognizing a gain of approximately $86.6 million, and used about $55.4 million of the proceeds to reduce debt. Its 2004 net earnings were $70,749,992, compared with a net loss of $6,148,981 in 2003, driven largely by that gain. Net sales were $33,785,335 in 2004 versus $36,847,191 in 2003. PCA accounted for 68% of the venture's timber sales in 2004 and 55% in 2003. The filing also discloses that the venture has committed to sell approximately 90,000 acres of timberland for approximately $91.4 million in March 2005, which will reduce its supply obligations to PCA under the supply agreement. The amount of that reduction had not been determined as of the filing. The venture's debt was $85,000,000 at December 31, 2004, down from $140,380,000 a year earlier, and it paid $93.5 million in distributions to members during 2004.
Mar 31, 2005
2004
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2004
Packaging Corporation of America (PKG) reported net sales of $1,890.1 million for 2004, up $154.6 million, or 8.9%, from $1,735.5 million in 2003, driven by improved corrugated products and containerboard sales volumes and prices. Net income rose to $68.7 million ($0.64 diluted earnings per share) from a net loss of $14.4 million in 2003, which had included a $76.6 million debt-refinancing charge and a $16.0 million Pactiv benefits settlement. Income before interest and taxes increased to $140.5 million from $96.9 million, while gross margin as a percentage of sales declined from 17.2% to 15.8% due to higher energy, recycled and wood fiber costs. The filing also includes a $27.8 million net joint venture dividend from Southern Timber Venture, LLC, which contributed materially to 2004 operating income. Cash flow from operations was $215.3 million, and the company ended 2004 with $213.3 million in cash and cash equivalents. Total debt was $698.0 million at year-end, with $141.0 million of unused borrowing capacity under its credit agreements. Management projects 2005 capital expenditures of $110.0 million to $115.0 million and announced a quarterly dividend increase to $0.25 per share ($1.00 annually), up from $0.15 per share. The company also disclosed a shutdown plan for the number three paper machine at its Tomahawk, Wisconsin mill, which would reduce capacity by 66,000 tons, while restarting the number one machine at Filer City, Michigan. The filing notes that a 2004 error understated the intercompany profit reserve for inventory, and quarterly figures were adjusted accordingly after the third-quarter 10-Q. Legal exposure relates mainly to the linerboard antitrust direct-action cases, which management believes are not reasonably likely to have a material adverse effect.
Mar 9, 2005
2003
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2003
Packaging Corporation of America (PCA) reported 2003 net sales of $1,735.5 million, essentially flat versus $1,735.9 million in 2002, as higher sales volumes were entirely offset by lower sales prices. Operating income fell to $96.9 million from $145.3 million, and the company posted a net loss of $14.4 million, or $(0.14) per diluted share, compared with net income of $48.2 million in 2002. The results were weighed down by a $76.6 million one-time charge tied to the July 2003 debt refinancing, a $16.0 million fourth-quarter settlement of benefit-related matters with Pactiv Corporation, rising energy and wood costs, and lower prices. Corrugated products volume rose 2.1% to 28.1 billion square feet. The company refinanced its capital structure in 2003. It tendered for 99.3% of its $550.0 million 9 5/8% senior subordinated notes and issued $150.0 million of 4 3/8% five-year notes and $400.0 million of 5 3/4% ten-year notes. Total debt was $697.96 million at year-end, down from $742.2 million, and cash and equivalents rose to $172.0 million. Operating cash flow was $244.9 million, and the company had $141.0 million of unused borrowing capacity. Management also announced its first quarterly cash dividend of $0.15 per share, paid in January 2004, and a $38 million acquisition of Acorn Corrugated Box Company in February 2004. Litigation risk centers on the linerboard antitrust matters. Pactiv, Tenneco and PCA agreed in November 2003 to settle the class actions, subject to court approval, while about 160 opt-out plaintiffs have filed direct action complaints that are not covered by the settlement. Management believes the outcome of that litigation is not reasonably possible to have a material adverse effect. Environmental compliance spending was $12.4 million in 2003, and the company holds a $4.3 million environmental reserve.
Mar 12, 2004
2002
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2002
Packaging Corporation of America (PCA) reported 2002 net sales of $1.74 billion, down from $1.79 billion in 2001, as lower sales prices for corrugated products and containerboard more than offset higher corrugated volume. Operating income fell to $145.3 million from $249.5 million, and net income declined to $48.2 million, or $0.45 diluted earnings per share, from $106.4 million, or $0.98 in 2001. The company cited a $97.8 million operating income reduction from lower sales prices, along with higher recycled fiber costs, higher medical costs and increased depreciation. Operating cash flow decreased to $240.0 million from $314.3 million, and total debt was $742.2 million at year-end, down from $795.2 million. Management reported $187.0 million of unused borrowing capacity and expects 2003 capital expenditures of approximately $115.0 million. Total debt included $550.0 million of 9 5/8% senior subordinated notes due 2009, and the company repurchased 1,887,700 shares in 2002 for $33.0 million under its $100.0 million program. PCA has never paid dividends. The filing also highlights litigation risk: a Sherman Act class action over alleged linerboard price-fixing is set for trial in April 2004, which management believes lacks merit and expects will not have a material adverse effect. The company also faces a Valdosta, Georgia labor contract expiring in September 2003, and it expects environmental Cluster Rule compliance spending of about $14.4 million from 2003 through 2005.
Mar 19, 2003
2001
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2001
Packaging Corporation of America (PCA) reported 2001 net sales of $1,789,956 thousand ($1.79 billion), down from $1,921,868 thousand in 2000, with the filing attributing the decline primarily to decreased sales prices, reduced containerboard volume sold to third parties, and slightly lower corrugated products volume. Operating income (income before interest and taxes) was $249,455 thousand, versus $404,834 thousand in 2000, which included a $60.4 million gain on timberland sales. Net income was $106,418 thousand, or $0.98 diluted earnings per share, compared with $161,901 thousand in 2000. Net cash provided by operating activities was $313,426 thousand. The company's balance sheet shows total assets of $1,971,780 thousand and long-term debt of $795,163 thousand, down from $869,175 thousand a year earlier, reflected in $74,021 thousand of net interest expense and $74.0 million of term loan and receivables facility prepayments. Cash and cash equivalents rose to $82,465 thousand at year-end 2001. The company has never paid dividends and has no current plans to do so. Management stated it was in compliance with all debt covenants at December 31, 2001. The filing also describes an ongoing Sherman Act class action relating to linerboard pricing, with trial set for January 2003, which management believes lacks merit and should not have a material adverse effect. Capital expenditures are estimated at approximately $105.0 million for 2002, and the company states that operating cash flow should be adequate to meet its needs for the next 12 months.
Mar 20, 2002
2000
Packaging Corp. of America Annual Report, Year Ended Dec 31, 2000
Packaging Corporation of America (PCA), the Lake Forest, Illinois containerboard and corrugated products producer, reported net sales of $1.92 billion for the year ended December 31, 2000, up $151.3 million, or 8.5%, from the pro forma 1999 figure. Income before extraordinary item was $172.96 million, and operating income rose to $404.8 million, or 67.2% above pro forma 1999. The increase was driven mainly by higher sales prices for corrugated products and containerboard. Results also include fourth-quarter gains on timberland sales of $60.4 million in 2000, which are included in the reported figures. Net income was $161.9 million, and diluted earnings per share were $1.33. The company's balance sheet improved considerably following its April 1999 acquisition from Pactiv Corporation and its January 2000 IPO. Total long-term debt fell to $869.2 million at December 31, 2000 from $1.33 billion a year earlier, reflecting voluntary term loan prepayments totaling approximately $460.0 million in 2000. Net cash provided by operating activities was $339.0 million, and capital expenditures were $129.0 million. PCA has never paid dividends on its common stock and has no current plans to do so, and its debt agreements restrict dividend payments. The filing also highlights ongoing risks. PCA faces a class action alleging a Sherman Act violation in linerboard pricing, with trial set for June 2002, which management believes lacks merit. Environmental compliance under the EPA Cluster Rules is expected to cost $8.1 million in 2001 in capital spending. Interest rate exposure is partly hedged through collar agreements covering $250.0 million of notional debt at year-end 2000.
Mar 27, 2001
1999
Packaging Corp. of America Annual Report, Year Ended Dec 31, 1999
Packaging Corporation of America (PCA) filed its annual report for the fiscal year ended December 31, 1999, following its April 12, 1999 acquisition of the containerboard and corrugated products business of Pactiv Corporation (formerly Tenneco Packaging Inc.) for $2.2 billion. The transaction was financed with a $1.46 billion senior credit facility, $550 million of 9 5/8% senior subordinated notes, $100 million of 12 3/8% senior exchangeable preferred stock, and a $236.5 million cash equity investment by PCA Holdings, an entity controlled by Madison Dearborn Partners. PCA reported 1999 net sales of $1.7 billion on a pro forma basis, producing 2.2 million tons of containerboard and shipping about 27 billion square feet of corrugated products. For the period from April 12 to December 31, 1999, PCA reported net sales of $1,262.3 million, operating income of $192.2 million, interest expense of $107.6 million and net income of $40.5 million. The company's average linerboard price rose about 25% during 1999, and the filing notes that industry oversupply could return. The company completed its initial public offering on February 2, 2000, selling 11,250,000 new shares at $12.00 per share and using about $124.4 million of net proceeds to redeem its senior exchangeable preferred stock on March 3, 2000. PCA sold about 405,000 acres of timberland in the fourth quarter of 1999 for total proceeds of $263 million, which were used to pay down debt. Term loans were reduced through voluntary prepayments totaling approximately $431.0 million during May through December 1999. At year end, PCA reported total assets of $2.15 billion, long-term debt of $1.33 billion and stockholders' equity of $416.7 million. The filing highlights high leverage and risks. PCA substantially increased its indebtedness in connection with the transactions, and management states that the debt service obligations could have material consequences for securityholders. The company does not expect to pay dividends and is restricted by its debt agreements. PCA also faces environmental Cluster Rule compliance spending of about $47.9 million from 2000 to 2005, and a Sherman Act class action regarding linerboard pricing that management believes lacks merit.
Mar 10, 2000