Segment and Geographical Information

12 Months Ended

Dec. 31, 2019

As a result of the Matane Mill sale in November 2019, the Company now operates in the following business segments: High Purity Cellulose, Forest Products, Paperboard, Pulp & Newsprint and Corporate. All prior period amounts presented herein have been reclassified to conform to the new segment structure. See Note 3 —Discontinued Operations for additional information on the Matane Mill sale. See also Note 1 — Nature of Operations and Basis of Presentation for a description of the operating businesses. The Corporate segment consists primarily of senior management, accounting, information systems, human resources, treasury, tax and legal administrative functions that provide support services to the operating business units. The Company does not allocate the cost of maintaining these support functions to its operating units.

The Company evaluates the performance of its segments based on operating income. Intersegment sales consist primarily of wood chips sales from Forest Products to High Purity Cellulose and to the Pulp & Newsprint segments. Intersegment sales prices are at rates that approximate market for the respective operating area.

Net sales, disaggregated by product-line, was comprised of the following for the three years ended December 31:



	2019			2018			2017
Net sales:
High Purity Cellulose
Cellulose Specialties	$	765,077		$	831,805		$	661,760
Commodity Products	279,527			243,711			183,208
Other sales (a)	82,383			116,873			21,893
Total High Purity Cellulose	1,126,987			1,192,389			866,861
Forest Products
Lumber	230,360			284,418			25,880
Other sales (b)	68,753			71,242			8,065
Total Forest Products	299,113			355,660			33,945
Paperboard
Paperboard	199,987			196,866			18,875
Pulp & Newsprint
Pulp	127,784			169,025			17,553
Newsprint	87,188			113,275			10,576
Total Pulp & Newsprint	214,972			282,300			28,129
Corporate
Eliminations	(65,667		)	(70,221		)	(7,394		)
Total net sales	$	1,775,392		$	1,956,994		$	940,416
(a) Other sales include sales of electricity, resins, lignin and other by-products to third-parties
(b) Other sales include sales of logs, wood chips and other by-products to other segments and third-parties

Operating income by segment was comprised of the following for the years ended December 31:



	2019			2018			2017
Operating income:
High Purity Cellulose	$	6,588		$	112,308		$	120,356
Forest Products	(30,904		)	24,850			(4		)
Paperboard	4,120			4,392			(899		)
Pulp & Newsprint	1,658			71,899			1,683
Corporate	(64,580		)	(65,634		)	(62,156		)
Total operating income	$	(83,118	)	$	147,815		$	58,980

Identifiable assets by segment were as follows for the years ended December 31:



	2019		2018
Identifiable assets:
High Purity Cellulose	$	1,559,073	$	1,643,092
Forest Products	171,167		166,801
Paperboard	145,030		168,458
Pulp & Newsprint	102,959		113,055
Corporate	501,918		493,973
Assets Held for Sale	—		93,707
Total identifiable assets	$	2,480,147	$	2,679,086

Long-life assets by country were as follows for the years ended December 31:



	2019		2018
Long-life assets:
United States	$	791,769	$	829,153
Canada (a)	905,897		920,503
France	209,304		213,338
Other	146		—
Total long-life assets	$	1,907,116	$	1,962,994
(a) 2018 includes $51 million of assets of discontinued operations

Depreciation and amortization and capital expenditures by segment were as follows for the years ended December 31:



	2019		2018		2017
Depreciation and amortization:
High Purity Cellulose	$	123,279	$	119,231	$	93,177
Forest Products	9,288		6,683		728
Paperboard	15,587		15,674		1,922
Pulp & Newsprint	4,323		3,711		505
Corporate	798		658		314
Total depreciation and amortization	$	153,275	$	145,957	$	96,646

Capital expenditures (a):
High Purity Cellulose	$	79,293	$	92,980	$	65,691
Forest Products	13,667		26,691		4,409
Paperboard	1,446		1,598		17
Pulp & Newsprint	4,664		4,938		1,347
Corporate	6,300		2,826		19
Total capital expenditures	$	105,370	$	129,033	$	71,483

(a) Amounts exclude the impact of changes in capital assets purchased on account and government grants.

Geographical distribution of the Company’s sales was comprised of the following for the three years ended December 31:



	Sales by Destination
	2019		%	2018		%	2017		%
United States	$	694,785	39	$	771,575	40	$	336,737	37
China	328,037		18	348,550		18	248,419		26
Canada	221,601		12	259,949		13	41,178		4
Japan	119,839		7	143,577		7	123,850		13
Europe	268,417		15	291,008		15	108,992		12
Latin America	10,223		1	11,868		1	11,576		1
Other Asia	115,332		7	125,773		6	67,739		7
All other	17,158		1	4,694		—	1,925		—
Total sales	$	1,775,392	100	$	1,956,994	100	$	940,416	100

The Company had no significant customers representing over 10 percent of total sales for the year ended December 31, 2019 and 2018. The Company had three significant customers in its High Purity Cellulose segment which represented over 10 percent of total sales for the year ended December 31, 2017:



	Percentage of Sales
	2017
Eastman Chemical Company	20%
Nantong Cellulose Fibers, Co., Ltd.	15%
Daicel Corporation	10%