Business Segment and Geographic Information

12 Months Ended

Dec. 31, 2019

Business Segment and Geographic Information

The Company's reportable operating segments consist of Technical Products, Fine Paper and Packaging and, in the prior year periods only, Other. The Technical Products segment is an aggregation of the Company's filtration and performance materials businesses which are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods.

The technical products business is an international producer of fiber-formed, coated and/or saturated specialized media that delivers high performance benefits to customers. Included in this segment are filtration media for transportation, water and other end use applications ("Filtration"), and tape and abrasives backings products ("Backings") and digital image transfer, durable label and other specialty substrate products ("Specialty").

The following table presents sales by product category for the technical products business:



	Year Ended December 31,
	2019		2018		2017
Filtration	42	%	40	%	42	%
Backings	24	%	28	%	31	%
Specialty	34	%	32	%	27	%
Total	100	%	100	%	100	%

Following the disposition of the Brattleboro mill which eliminated a significant portion of the products of the Other business segment, in January 2019 the Company realigned the remaining products manufactured in the Other business segment to be managed as part of the Technical Products business segment. As a result, the Company recast the comparable 2018 and 2017 information and presented the $15.6 million and $16.5 million of net sales for the year ended December 31, 2018 and 2017, respectively, of this remaining portion of the Other business segment within the Technical Products business segment. The 2018 and 2017 operating income (loss) of the Other business segment was immaterial and was not recast. The Company also recast the total assets by segment and presented the $12.9 million of total assets as of December 31, 2018 of this remaining portion of the Other business segment within the Technical Products business segment. The Company also recast the 2018 and 2017 depreciation and amortization and capital expenditures by segment and presented $0.7 million and $0.9 million of depreciation and amortization, respectively, and $0.0 million and $1.1 million of capital expenditures, respectively, of this remaining portion of the Other business segment within the Technical Products business segment. The Company presented the net sales for the years ended December 31, 2018 and 2017 of the remaining portion of the Other business segment into Specialty products category in the table above.

The fine paper and packaging business is a leading supplier of premium printing and other high-end specialty papers ("Graphic Imaging"), premium packaging ("Packaging") and specialty office papers ("Filing/Office") primarily in North America. The following table presents sales by product category for the fine paper and packaging business:



	Year Ended December 31,
	2019		2018		2017
Graphic Imaging	79	%	78	%	80	%
Packaging	21	%	18	%	16	%
Filing/Office	—	%	4	%	4	%
Total	100	%	100	%	100	%

Each segment employs different technologies and marketing strategies. Disclosure of segment information is on the same basis that management uses internally for evaluating segment performance and allocating resources. Transactions between segments are eliminated in consolidation. The costs of shared services, and other administrative functions managed on a

common basis, are allocated to the segments based on usage, where possible, or other factors based on the nature of the activity. General corporate expenses that do not directly support the operations of the business segments are shown as Unallocated corporate costs. The accounting policies of the reportable operating segments are the same as those described in Note 2, "Summary of Significant Accounting Policies."

Business Segments



	Year Ended December 31,
	2019		2018		2017
Net sales
Technical Products	$	541.6	$	583.2	$	518.6
Fine Paper and Packaging	396.9		445.8		455.3
Other	—		5.9		6.0
Consolidated	$	938.5	$	1,034.9	$	979.9



	Year Ended December 31,
	2019			2018			2017
Operating income (loss)
Technical Products (a)	$	44.6		$	50.9		$	55.3
Fine Paper and Packaging (b)	53.2			29.4			69.5
Other (c)	—			(6.4		)	(0.4		)
Unallocated corporate costs (d)	(19.5		)	(19.8		)	(20.1		)
Consolidated	$	78.3		$	54.1		$	104.3

_______________________

(a)

Operating income for the year ended December 31, 2019 included restructuring and other non-routine costs of $0.3 million and a curtailment gain of $1.6 million related to the Neenah Coldenhove pension plan. Operating income for the year ended December 31, 2018 included non-cash impairment loss, restructuring and integration costs, and pension settlement charges of $2.5 million, offset by favorable acquisition adjustments of $3.9 million.

(b)

Operating income for the year ended December 31, 2019 included $5.7 million of non-routine costs, primarily related to idled paper machine costs due to the consolidation of the fine paper manufacturing footprint. Operating income for the year ended December 31, 2018 included non-cash impairment loss, restructuring costs, and pension settlement charges of $24.6 million, offset by favorable insurance settlement of $0.3 million. Operating income for the year ended December 31, 2017 included a favorable insurance settlement of $2.9 million. Operating income for the year ended December 31, 2016 included integration costs of $1.8 million.

(c)

Operating income for the year ended December 31, 2018 included non-cash impairment loss, restructuring costs, and a pension settlement charge of $6.0 million, offset by favorable insurance settlement of $0.1 million. Operating income for the year ended December 31, 2017 included a favorable insurance settlement of $0.3 million. Operating income for the years ended December 31, 2016 included integration costs of $1.1 million.

(d)

Unallocated corporate costs for the year ended December 31, 2019 included costs of $0.3 million, consisting of restructuring and other non-routine costs and a SERP settlement charge. Unallocated corporate costs for the year ended December 31, 2018 included restructuring costs and pension settlement charge of $1.9 million. Unallocated corporate costs for the year ended December 31, 2017 included acquisition and integration costs of $1.3 million and $0.6 million from pension plan and SERP settlement costs. December 31, 2016 included $2.7 million of pre-operating costs related to conversion of a fine paper machine to filtration and $0.8 million for a pension plan settlement charge.



	Year Ended December 31,
	2019		2018		2017
Depreciation and amortization
Technical Products	$	24.1	$	24.4	$	20.3
Fine Paper and Packaging	13.2		9.9		11.0
Other	—		0.2		0.3
Corporate	1.6		1.6		1.7
Consolidated	$	38.9	$	36.1	$	33.3



	Year Ended December 31,
	2019		2018		2017
Capital expenditures
Technical Products	$	13.1	$	28.0	$	29.7
Fine Paper and Packaging	7.7		8.7		12.5
Corporate	0.6		1.4		0.5
Consolidated	$	21.4	$	38.1	$	42.7



	December 31,
	2019		2018
Total Assets (a)
Technical Products	$	573.8	$	599.3
Fine Paper and Packaging	217.7		234.7
Corporate and other (b)	36.3		27.2
Total	$	827.8	$	861.2

_______________________


(a)	Segment identifiable assets are those that are directly used in the segments operations.


(b)	Corporate assets are primarily deferred income taxes and lease ROU assets.

Geographic Information



	Year Ended December 31,
	2019		2018		2017
Net sales
United States	$	673.0	$	744.4	$	748.9
Germany	196.3		216.5		210.3
Rest of Europe	69.2		74.0		20.7
Consolidated	$	938.5	$	1,034.9	$	979.9

Net sales are attributed to geographic areas based on the physical location of the selling entities.



	December 31,
	2019		2018
Long-Lived Assets
United States	$	364.2	$	366.3
Germany	153.3		157.9
Rest of Europe	57.6		59.1
Total	$	575.1	$	583.3

Long-lived assets consist of property and equipment, deferred income taxes, goodwill, intangibles and other assets.

Concentrations

For the year ended December 31, 2019, sales to the technical products business' largest customer represented approximately 8 percent of consolidated net sales, and approximately 14 percent of net sales for the technical products segment. For the years ended December 31, 2018, and 2017, there were no customers sales to which constituted over 10 percent of segment net sales for technical products. For the year ended December 31, 2019, sales to the largest customer of fine paper and packaging business represented approximately 8 percent of consolidated net sales, and approximately 18 percent of net sales of the fine paper and packaging business. For the year ended December 31, 2018, sales to the two largest customers of fine paper and packaging business represented approximately 7 percent and 5 percent, respectively, of consolidated net sales and approximately 16 percent and 12 percent, respectively, of net sales of the fine paper and packaging business. For the year ended December 31, 2017 sales to the two largest customers of fine paper and packaging business each represented approximately 7 percent of consolidated net sales and approximately 15 percent of net sales of the fine paper and packaging business. Except for certain specialty latex grades and specialty softwood pulp used by Technical Products, management is not aware of any significant concentration of business transacted with a particular supplier that could, if suddenly eliminated, have a material effect on its operations.