Packaging Corporation of America (NYSE:PKG) Files An 8-K Costs Associated with Exit or Disposal ActivitiesItem 2.05
On August21, 2017, Packaging Corporation of America approved and announced a plan for the conversion of the Number 3 paper machine at its Wallula, Washington mill to produce virgin kraft linerboard. The conversion is expected to occur in the second quarter of 2018 and PCA will cease production of uncoated freesheet and coated one-side grades currently produced on the machine.
Discontinuing production of these grades is estimated to result in (1)total cash severance and other cash shutdown costs of approximately $20 to $25 million; and (2)total non-cash charges of approximately $45 to $50 million, which are primarily asset impairment and accelerated depreciation charges. PCA expects to record $25 to $35 million of charges in the third quarter of 2017.
The press release making such announcement is filed herewith as Exhibit 99.1 and incorporated by reference into this Item 2.05.
| Item 2.05 | Material Impairments |
The disclosure included under Item 2.05 is incorporated by reference into this Item 2.05.
On August21, 2017, Packaging Corporation of America announced that it agreed to purchase substantially all of the assets of Sacramento Container Corporation and 50% of the membership interests of Northern Sheets, LLC and Central California Sheets, LLC for a cash purchase price of $265 million. PCA expects to fund the purchase price with available cash on hand. Closing of the transaction is subject to the satisfaction of customary conditions, including regulatory approval.
The press release making such announcement is filed herewith as Exhibit 99.1 and incorporated by reference into this Item 2.05.
| Item 2.05. | Financial Statements and Exhibits. |
| 99.1 | Press Release issued on August21, 2017 |
PACKAGING CORP OF AMERICA ExhibitEX-99.1 2 d442358dex991.htm EX-99.1 EX-99.1 Exhibit 99.1 Packaging Corporation of America Announces Agreement to Acquire Sacramento Container Corporation and Conversion of Wallula Mill Paper Machine to High- Performance 100% Virgin Linerboard Lake Forest,…To view the full exhibit click here
About Packaging Corporation of America (NYSE:PKG)
Packaging Corporation of America (PCA) is a producer of containerboard and corrugated packaging products, and uncoated free sheet. The Company operates through three segments: Packaging, Paper, and Corporate and Other. The Company operates over eight mills and approximately 90 corrugated products manufacturing plants. It operates primarily in the United States and has converting and distribution operations in Canada. The Company’s corrugated products manufacturing plants produce a range of corrugated packaging products, including conventional shipping containers used to protect and transport manufactured goods, multi-color boxes, and displays. Its Paper segment operates under the trade name Boise Paper. The Company manufactures and sells white papers, including both commodity and specialty papers. The Company’s Corporate and Other segment includes corporate support staff services, related assets and liabilities, and foreign exchange gains and losses.
