Discontinued Operations

12 Months Ended

Dec. 31, 2018

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

4. DISCONTINUED OPERATIONS

On October 31, 2018, we completed the sale of the Specialty Papers Business Unit on a cash free and debt free basis to Pixelle Specialty Solutions LLC, an affiliate of Lindsay Goldberg (the “Purchaser”) for $360 million. The sale of the business unit was in connection with the strategic focus on our more growth oriented Composite Fibers and Advanced Airlaid Materials. Cash proceeds from the sale were approximately $323 million 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 will receive approximately $280 million of related assets from the Company’s existing pension plan. We recognized a $144.1 million pre-tax loss, presented below as an “Impairment charge” for the amount by which Specialty Papers’ carrying value exceeded net proceeds from the sale.

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

	Year ended December 31
In thousands	2018			2017			2016
Net sales	$	661,186		$	790,935		$	843,582
Energy and related sales, net		3,388			5,126			6,141
Total revenues		664,574			796,061			849,723
Costs of products sold		637,472			751,135			767,320
Gross profit		27,102			44,926			82,403
Selling, general and administrative expenses		32,465			22,538			29,701
(Gains) losses on dispositions of plant, equipment and timberlands, net		(423	)		219			101
Operating income (loss)		(4,940	)		22,169			52,601
Non-operating income (expense)
Interest expense		(6,942	)		(4,455	)		(1,972	)
Other, net		(51,236	)		2,154			2,759
Impairment charge		(144,124	)		—			—
Income (loss) before income taxes		(207,242	)		19,868			53,388
Income tax provision (benefit)		(30,086	)		6,342			17,657
Income (loss) from discontinued operations	$	(177,156	)	$	13,526		$	35,731

The amounts 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 amounts set forth above in 2018 under the caption “Other, net” include the recognition of a $54.0 million, pre-tax, curtailment and settlement charge for pension and other post-employment benefits related to the transfer and discontinuance of future service of Specialty Papers’ employees.

The following table sets forth the carrying amounts of Specialty Papers’ major asset and liabilities, which were classified as held for sale in the consolidated balance sheet as of the end of 2017:

	December 31
In thousands	2017
Assets
Accounts receivable, net	$	63,567
Inventories		115,858
Prepaid expenses and other current assets		10,527
Current assets held for sale	$	189,952
Plant, equipment and timberlands, net		350,560
Other assets		57,351
Noncurrent assets held for sale	$	407,911
Liabilities
Accounts payable	$	77,266
Other current liabilities		35,554
Current liabilities held for sales	$	112,820
Long-term liabilities held for sale	$	41,373

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

	Year ended December 31
In thousands	2018		2017			2016
Net cash provided by operating activities	$	38,803	$	51,028		$	85,032
Net cash provided by (used in) investing activities		308,120		(51,511	)		(98,955	)
Net cash provided by financing activities		125		4,875			3,582
Change in cash and cash equivalents from discontinued operations	$	347,048	$	4,392		$	(10,341	)