PACKAGING CORPORATION OF AMERICA This management's discussion and analysis includes statements regarding our expectations with respect to our future performance, expected business conditions, liquidity, and capital resources. Such statements, along with any other statements that are not historical in nature, are forward-looking. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in our 2020 Annual Report on Form 10-K, as well as those factors listed in other documents we file with theSecurities and Exchange Commission (SEC). We do not assume any obligation to update any forward-looking statement. Our actual results may differ materially from those contained in or implied by any of the forward-looking statements in this Form 10-Q. Please see "Forward Looking Statements" elsewhere in this Item 2.
Overview
PCA is the third largest producer of containerboard products and a leading producer of uncoated freesheet paper inNorth America . We operate eight mills and 90 corrugated products manufacturing plants. Our containerboard mills produce linerboard and corrugating medium, which are papers primarily used in the production of corrugated products. Our corrugated products manufacturing plants produce a wide variety of corrugated packaging products, including conventional shipping containers used to protect and transport manufactured goods, multi-color boxes and displays with strong visual appeal that help to merchandise the packaged product in retail locations, and honeycomb protective packaging. In addition, we are a large producer of packaging for meat, fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products. We also manufacture and sell uncoated freesheet papers, including both commodity and specialty papers, which may have custom or specialized features such as colors, coatings, high brightness, and recycled content. We are headquartered inLake Forest, Illinois and operate primarily inthe United States .
This Item 2 is intended to supplement, and should be read in conjunction with, "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our 2020 Annual Report on Form 10-K.
Executive Summary
First quarter net sales were$1.81 billion in 2021 and$1.71 billion in 2020. We reported$167 million of net income, or$1.75 per diluted share, during the first quarter of 2021, compared to$142 million , or$1.49 per diluted share, during the same period in 2020. Net income included$2 million of expense for special items in the first quarter of 2021, compared to$1 million of expense for special items in 2020 (discussed below). Excluding special items, net income was$169 million , or$1.77 per diluted share, during the first quarter of 2021, compared to$143 million , or$1.50 per diluted share, in the first quarter of 2020. The increase in net income was driven primarily by higher volume and prices and mix in our Packaging segment, and lower annual outage expenses. These items were partially offset by lower volume and prices and mix in our Paper segment, higher operating costs, higher freight and logistics expenses, higher converting costs, and other expenses. For additional detail on special items included in reported GAAP results, as well as segment income (loss) excluding special items, earnings before non-operating pension income (expense), interest, income taxes, and depreciation, amortization, and depletion (EBITDA), and EBITDA excluding special items, see "Item 2. Reconciliations of Non-GAAP Financial Measures to Reported Amounts." Packaging segment income from operations was$258 million in the first quarter of 2021, compared to$200 million in the first quarter of 2020. Packaging segment EBITDA excluding special items was$352 million in the first quarter of 2021 compared to$290 million in the first quarter of 2020. The increase in EBITDA excluding special items was due primarily to higher sales and production volumes, higher prices and mix, and lower annual outage costs, partially offset by higher operating and converting costs, higher freight and logistic expenses, and other costs. Demand for our Packaging products remained strong throughout the first quarter, and we increased our containerboard production over the prior year period by producing linerboard during the entire quarter on the No. 3 machine at ourJackson, Alabama mill. During the fourth quarter of 2020, in order to meet strong packaging demand and maintain appropriate inventory levels, we temporarily began producing linerboard on the machine. In the first quarter of 2021, we announced the discontinuation of production of uncoated freesheet paper grades on the machine and the permanent conversion of the machine to produce linerboard in a phased approach over the next three years. BeforeOctober 2020 , operating results for theJackson mill were included in the Paper segment. Beginning inOctober 2020 , operating results for theJackson mill are included in both the Packaging and Paper segments. Paper segment income from operations was$9 million in the first quarter of 2021, compared to income of$33 million in the first quarter of 2020. Paper segment EBITDA excluding special items was$16 million in the first quarter of 2021, compared to$42 million in the first quarter of 2020. The decrease in EBITDA excluding special items was due to lower sales and production volumes, lower prices and mix, and higher freight and logistic expenses, partially offset by lower operating costs and lower annual outage expense. Sales were 24% lower than last year as demand has continued to be negatively affected by the COVID-19 pandemic and related closures of offices and schools. Demand for our corrugated products remains strong into the second quarter, and we continue to implement price increases that we previously announced to our packaging customers late in 2020 and earlier in 2021. We expect paper volumes to remain consistent with the first quarter and higher paper pricing as we realize price increases recently notified to our customers. We expect higher expenses in the second quarter than the first quarter relating to maintenance outages at our mills and continued inflation in freight and most of our other operating and converting costs. 16
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Special Items and Earnings per Diluted Share, Excluding Special Items
A reconciliation of reported earnings per diluted share to earnings per diluted share, excluding special items, for the three months endedMarch 31, 2021 and 2020 are as follows: Three Months Ended March 31, 2021 2020 Earnings per diluted share, as reported$ 1.75 $
1.49
Special items:
Facilities closure and other costs (a) 0.01 - Jackson mill conversion (b) 0.01 - Incremental costs for COVID-19 (c) -
0.01
Total special items 0.02
0.01
Earnings per diluted share, excluding special items
(a) For the three months ended
includes
costs related to corrugated products facilities.
(b) For the three months ended
related to the announced discontinuation of production of uncoated
freesheet paper grades on the No. 3 machine at the
the first quarter of 2021 associated with the permanent conversion of the
machine to produce linerboard.
(c) The three months ended
out-of-pocket costs related to COVID-19, including supplies, cleaning and
sick pay. Beginning in July 2020 , all corresponding COVID-19 related
expenses were included in normalized costs.
Included in this Item 2 are various non-GAAP financial measures, including
diluted EPS excluding special items, segment income excluding special items and
EBITDA excluding special items. Management excludes special items as it believes
these items are not necessarily reflective of the ongoing results of operations
of our business. We present these measures because they provide a means to
evaluate the performance of our segments and our Company on an ongoing basis
using the same measures that are used by our management, because these measures
assist in providing a meaningful comparison between periods presented and
because these measures are frequently used by investors and other interested
parties in the evaluation of companies and the performance of their segments. A
reconciliation of diluted EPS to diluted EPS excluding special items is included
above and the reconciliations of other non-GAAP measures used in this
Management's Discussion and Analysis of Financial Condition and Results of
Operations, to the most comparable measure reported in accordance with GAAP, are
included in Item 2 under "Reconciliations of Non-GAAP Financial Measures to
Reported Amounts." Any analysis of non-GAAP financial measures should be done in
conjunction with results presented in accordance with GAAP. The non-GAAP
measures are not intended to be substitutes for GAAP financial measures and
should not be used as such.
Industry and Business Conditions
Trade publications reported North American industry-wide corrugated products shipments per work day were up 5.5% during the first quarter of 2021 compared to the same quarter of 2020. Reported industry containerboard production increased 2.1% compared to the first quarter of 2020. Reported industry containerboard inventories at the end of the first quarter of 2021 were approximately 2.3 million tons, down 9.9% compared to the same period in 2020. Reported containerboard export shipments were down 24.9% compared to the first quarter of 2020. Prices reported by trade publications increased by$20 per ton for linerboard and$30 per ton for corrugating medium inMarch 2021 and a further$40 per ton for linerboard and corrugating medium inApril 2021 . Trade publications reported North American uncoated freesheet paper shipments were down 19.6% in the first quarter of 2021, compared to the same quarter of 2020. Average prices reported by a trade publication for cut size office papers were higher by$7 per ton, or 0.6%, in the first quarter of 2021, compared to the fourth quarter of 2020, and lower by$28 per ton, or 2.5%, compared to the first quarter of 2020. Average prices reported by a trade publication for cut size office papers increased$20 per ton inMarch 2021 and a further$40 per ton inApril 2021 . 17
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Results of Operations
Three Months Ended
The historical results of operations of PCA for the three months ended
Three Months Ended
March 31,
2021 2020 Change
Packaging $ 1,623.6 $ 1,467.5 $ 156.1
Paper 164.6 217.4 (52.8 )
Corporate and Other 55.4 60.2 (4.8 )
Intersegment eliminations (36.4 ) (36.4 ) -
Net sales $ 1,807.2 $ 1,708.7 $ 98.5
Packaging $ 257.9 $ 199.8 $ 58.1
Paper 8.7 32.5 (23.8 )
Corporate and Other (28.3 ) (23.2 ) (5.1 )
Income from operations $ 238.3 $ 209.1 $ 29.2
Non-operating pension income 4.8 0.6 4.2
Interest expense, net (23.5 ) (19.6 ) (3.9 )
Income before taxes 219.6 190.1 29.5
Income tax provision (53.1 ) (48.4 ) (4.7 )
Net income $ 166.5 $ 141.7 $ 24.8
Non-GAAP Measures (a)
Net income excluding special items $ 168.9 $ 142.6 $ 26.3
Consolidated EBITDA 339.1 309.4
29.7
Consolidated EBITDA excluding special items 341.8 310.6
31.2
Packaging EBITDA 350.0 288.8
61.2
Packaging EBITDA excluding special items 352.1 289.9
62.2
Paper EBITDA 15.2 41.9 (26.7 ) Paper EBITDA excluding special items 15.8 42.0 (26.2 )
(a) See "Reconciliations of Non-GAAP Financial Measures to Reported Amounts"
included in this Item 2 for a reconciliation of non-GAAP measures to the most
comparable GAAP measure.
Net Sales
Net sales increased $98 million , or 5.7%, to $1,807 million during the three
months ended March 31, 2021 , compared to $1,709 million during the same period
in 2020.
Packaging. Net sales increased $156 million , or 10.6%, to $1,624 million ,
compared to $1,468 million in the first quarter of 2020 due to higher
containerboard and corrugated products volume ($106 million ) and higher prices
and mix ($50 million ). In the first quarter of 2021, our domestic containerboard
prices were 3.4% higher, while export prices were 16.2% higher, than the same
period in 2020. In the first quarter of 2021, export and domestic containerboard
outside shipments increased 12.9% compared to the first quarter of 2020. Our
total corrugated products shipments were up 6.6% with one less workday, and up
8.3% per day compared to the same period in 2020, driven by strong demand.
Paper. Net sales during the three months ended March 31, 2021 decreased $53
million , or 24.2%, to $165 million , compared to $217 million in the first
quarter of 2020, due to decreased volume ($48 million ) and lower prices and mix
($5 million ), as demand has been harmed by the COVID-19 pandemic. In the fourth
quarter of 2020, the Jackson mill No. 3 machine began producing linerboard to
balance supply and demand.
Gross Profit
Gross profit increased $39 million during the three months ended March 31, 2021 ,
compared to the same period in 2020. The increase was driven primarily by higher
volume and prices and mix in our Packaging segment, and lower annual outage
expenses. These items were partially offset by lower volume and prices and mix
in our Paper segment, higher operating costs, higher freight and logistics
expenses, higher converting costs, and other expenses. In the three months ended
March 31, 2021 , gross profit included $0.5 million of special items for charges
related to the Jackson mill conversion. In the three months ended March 31,
2020 , gross profit included $1 million of special items for incremental,
out-of-pocket costs related to COVID-19.
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Selling, General, and Administrative Expenses
Selling, general, and administrative expenses ("SG&A") decreased $1 million
during the three months ended March 31, 2021 , compared to the same period in
2020. The decrease was primarily due to lower travel and entertainment expenses
partially offset by higher employee salaries and fringes and incentives.
Other Expense, Net
Other expense, net, for the three months ended
Three Months Ended
March 31,
2021 2020
Asset disposals and write-offs $ (14.7 ) $ (6.0 )
Facilities closure and other costs (2.1 ) (0.4 )
Jackson mill conversion (0.5 ) -
Other (3.1 ) (3.6 )
Total $ (20.4 ) $ (10.0 ) We discuss these items in more detail in Note 5, Other Expense, Net, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in "Part I, Item 1. Financial Statements" of this Form 10-Q.
Income from Operations
Income from operations increased$29 million , or 13.9%, during the three months endedMarch 31, 2021 , compared to the same period in 2020. The first quarter of 2021 included$3 million of special items expense related to corrugated facility closure costs and theJackson mill conversion from uncoated freesheet paper to linerboard, compared to$1 million of special items expense for incremental, out-of-pocket costs related to COVID-19 in the first quarter of 2020. Packaging. Packaging segment income from operations increased$58 million to$258 million , compared to$200 million during the three months endedMarch 31, 2020 . The increase related primarily to higher sales and production volumes ($57 million ), higher containerboard and corrugated products prices and mix ($42 million ) and lower annual outage expense ($10 million ), partially offset by higher operating and converting costs ($36 million ), higher freight expenses ($9 million ), higher depreciation expense ($3 million ), and other costs. Special items during the first quarter of 2021 included$2 million of expenses related to corrugated facility closure costs, compared to$1 million of special items expense for incremental, out-of-pocket costs related to COVID-19 in the first quarter of 2020. Paper. Paper segment income from operations decreased$24 million to$9 million , compared to income of$33 million during the three months endedMarch 31, 2020 . The decrease primarily related to lower sales and production volumes ($36 million ), lower prices and mix ($4 million ), and higher freight expenses ($7 million ), partially offset by lower operating costs ($19 million ), lower annual outage expense ($5 million ), and other costs. Special items during the first quarter of 2021 included$1 million of expenses related to theJackson mill conversion from uncoated freesheet paper to linerboard, compared to no special items in the first quarter of 2020.
Non-Operating Pension Income, Interest Expense, Net and Income Taxes
Non-operating pension income increased$4 million during the three months endedMarch 31, 2021 , compared to the same period in 2020. The increase in non-operating pension income was primarily related to the favorable 2020 asset performance. Interest expense, net increased$4 million during the three months endedMarch 31, 2021 , compared to the same period in 2020. The increase in interest expense, net was primarily related to lower interest income due to lower rates on invested cash balances in the first quarter of 2021, and higher earnings on deferred compensation balances in the first quarter of 2021. During the three months endedMarch 31, 2021 , we recorded$53 million of income tax expense, compared to$48 million of expense during the three months endedMarch 31, 2020 . The effective tax rate for the three months endedMarch 31, 2021 and 2020 was 24.2% and 25.5%, respectively. The decrease in our effective tax rate was primarily due to a favorable state law change during the three months endedMarch 31, 2021 with no corresponding favorable state law change during the three months endedMarch 31, 2020 . 19 --------------------------------------------------------------------------------
Liquidity and Capital Resources
Sources and Uses of Cash
Our primary sources of liquidity are net cash provided by operating activities, cash on hand, and available borrowing capacity under our revolving credit facility. AtMarch 31, 2021 , we had$983 million of cash and cash equivalents,$150 million of marketable debt securities, and$325 million of unused borrowing capacity under the revolving credit facility, net of letters of credit. Currently, our primary uses of cash are for operations, capital expenditures, common stock dividends, debt service, acquisitions, and repurchases of common stock. We believe that net cash generated from operating activities, cash on hand, available borrowings under our revolving credit facility, and available capital through access to capital markets will be adequate to meet our liquidity and capital requirements, including payments of any declared common stock dividends, for the foreseeable future. As our debt or credit facilities become due, we will need to repay, refinance, extend, or replace such debt or credit facilities. Our ability to do so will be subject to future economic conditions and financial, business, and other factors, many of which are beyond our control.
Below is a summary table of our cash flows, followed by a discussion of our sources and uses of cash through operating activities, investing activities, and financing activities (dollars in millions):
Three Months Ended
March 31,
2021 2020 Change
Net cash provided by (used for):
Operating activities $ 191.6 $ 236.7 $ (45.1 )
Investing activities (87.5 ) (77.0 ) (10.5 )
Financing activities (95.3 ) (75.2 )
(20.1 )
Net increase in cash and cash equivalents
Operating Activities Our operating cash flow is primarily driven by our earnings and changes in operating assets and liabilities, such as accounts receivable, inventories, accounts payable and other accrued liabilities, as well as factors described below. Cash requirements for operating activities are subject to PCA's operating needs and the timing of collection of receivables and payments of payables and expenses. During the three months endedMarch 31, 2021 , net cash provided by operating activities was$192 million , compared to$237 million in the same period in 2020, a decrease of$45 million . Cash from operations excluding changes in cash used for operating assets and liabilities increased$26 million primarily due to higher income from operations as discussed above. Cash decreased by$71 million due to changes in operating assets and liabilities, primarily due to the following: a) a larger increase in accounts receivable due to sales volumes in the first quarter of 2021 in both the Packaging and Paper segments as well as timing of collection of receivables in the Paper segment, and
b) a decrease in accounts payable in 2021 compared to 2020 primarily due to
the timing of payments as well as lower expenditures in connection with
annual maintenance outages performed in the first quarter of 2021
compared to 2020.
Investing Activities
We used $88 million for investing activities during the three months ended March
31, 2021 compared to $77 million during the same period in 2020. We spent $85
million for internal capital investments during the three months ended March 31,
2021 , compared to $71 million during the same period in 2020.
We expect capital investments in 2021 to be between $650 million and $675
million , including capital spending related to the conversion of the No. 3 paper
machine to containerboard at our Jackson mill. These expenditures could increase
or decrease as a result of a number of factors, including our financial results,
strategic opportunities, future economic conditions, and our regulatory
compliance requirements. We currently estimate capital expenditures to comply
with environmental regulations will be about $20 million in 2021. Our estimated
environmental expenditures could vary significantly depending upon the enactment
of new environmental laws and regulations, including those related to greenhouse
gas emissions and industrial boilers. For additional information, see
"Environmental Matters" in "Part II, Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations" of our 2020 Annual
Report on Form 10-K.
Financing Activities
During the three months ended March 31, 2021 , net cash used for financing
activities was $95 million , compared to $75 million during the same period in
2020. In the first three months of 2021, we paid $95 million of dividends
compared with $75 million of dividends paid during the first three months of
2020.
20
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For more information about our debt, see Note 10, Debt, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our 2020 Annual Report on Form 10-K.
Contractual Obligations
There have been no material changes to the contractual obligations table disclosed in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2020 Annual Report on Form 10-K.
Reconciliations of Non-GAAP Financial Measures to Reported Amounts
Income from operations excluding special items, net income excluding special items, EBITDA, and EBITDA excluding special items are non-GAAP financial measures. Management excludes special items, as it believes that these items are not necessarily reflective of the ongoing operations of our business. These measures are presented because they provide a means to evaluate the performance of our segments and our Company on an ongoing basis using the same measures that are used by our management, because these measures assist in providing a meaningful comparison between periods and because these measures are frequently used by investors and other interested parties in the evaluation of companies and the performance of their segments. Any analysis of non-GAAP financial measures should be done in conjunction with results presented in accordance with GAAP. The non-GAAP measures are not intended to be substitutes for GAAP financial measures and should not be used as such. Reconciliations of the non-GAAP measures to the most comparable measure reported in accordance with GAAP for the three months endedMarch 31, 2021 and 2020 follow (dollars in millions): Three Months Ended March 31, 2021 2020 Income Income before Income Net before Income Net Taxes Taxes Income Taxes Taxes Income As reported in accordance with GAAP$ 219.6 $ (53.1 ) $ 166.5 $ 190.1 $ (48.4 ) $ 141.7 Special items: Facilities closure and other costs (a) 2.1 (0.5 ) 1.6 0.4 (0.1 ) 0.3 Jackson mill conversion (b) 1.1 (0.3 ) 0.8 - - - Incremental costs for COVID-19 (c) - - - 0.8 (0.2 ) 0.6 Total special items 3.2 (0.8 ) 2.4 1.2 (0.3 ) 0.9 Excluding special items$ 222.8 $ (53.9 ) $ 168.9 $ 191.3 $ (48.7 ) $ 142.6
(a) Includes charges consisting of closure costs related to corrugated products
facilities.
(b) Includes charges related to the announced discontinuation of production of
uncoated freesheet paper grades on the No. 3 machine at the
mill in the first quarter of 2021 associated with the permanent conversion of
the machine to produce linerboard.
(c) Includes incremental, out-of-pocket costs related to COVID-19 including
supplies, cleaning and sick pay. Beginning in
COVID-19 related expenses were included in normalized costs.
The following table reconciles net income to EBITDA and EBITDA excluding special items for the periods indicated (dollars in millions):
Three Months Ended
March 31,
2021 2020
Net income $ 166.5 $ 141.7
Non-operating pension income (4.8 ) (0.6 )
Interest expense, net 23.5 19.6
Income tax provision 53.1 48.4Depreciation, amortization, and depletion 100.8 100.3 EBITDA
$ 339.1 $ 309.4 Special items: Facilities closure and other costs 2.1 0.4 Jackson mill conversion 0.6 - Incremental costs for COVID-19 - 0.8 Total special items 2.7 1.2 EBITDA excluding special items$ 341.8 $ 310.6 21
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The following table reconciles segment income (loss) to EBITDA and EBITDA excluding special items for the periods indicated (dollars in millions):
Three Months Ended
March 31,
2021 2020
Packaging
Segment income $ 257.9 $ 199.8 Depreciation, amortization, and depletion 92.1 89.0 EBITDA
350.0 288.8
Facilities closure and other costs 2.1 0.4
Incremental costs for COVID-19 - 0.7
EBITDA excluding special items $ 352.1 $ 289.9 Paper
Segment income$ 8.7 $ 32.5
Depreciation, amortization, and depletion 6.5 9.4 EBITDA
15.2 41.9
Jackson mill conversion 0.6 -
Incremental costs for COVID-19 - 0.1
EBITDA excluding special items $ 15.8 $ 42.0
Corporate and Other
Segment loss $ (28.3 ) $ (23.2 ) Depreciation, amortization, and depletion 2.2 1.9 EBITDA
(26.1 ) (21.3 )
EBITDA excluding special items $ (26.1 ) $ (21.3 )
EBITDA $ 339.1 $ 309.4
EBITDA excluding special items $ 341.8 $ 310.6 Market Risk and Risk Management Policies
PCA is exposed to the impact of interest rate changes and changes in the market value of its financial instruments. We periodically enter into derivatives to minimize these risks, but not for trading purposes. We were not a party to any derivatives-based arrangements atMarch 31, 2021 . For a discussion of derivatives and hedging activities, see Note 15, Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our 2020 Annual Report on Form 10-K.
At
Off-Balance-Sheet Activities
The Company does not have any off-balance sheet arrangements as of
Environmental Matters
There have been no material changes to the disclosure set forth in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations - Environmental Matters" filed with our 2020 Annual Report on Form 10-K.
Critical Accounting Policies and Estimates
Management's discussion and analysis of financial condition and results of operations are based upon the Company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted inthe United States of America . The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, PCA evaluates its estimates, including those related to business combinations, pensions and other postretirement benefits, goodwill and intangible assets, long-lived asset impairment, environmental liabilities, and income taxes, among others. PCA bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. 22
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PCA has included in its 2020 Annual Report on Form 10-K a discussion of its critical accounting policies and estimates which require management's most difficult, subjective, or complex judgments used in the preparation of its consolidated financial statements. PCA has not had any changes to these critical accounting estimates during the first three months of 2021.
New and Recently Adopted Accounting Standards
For a listing of our new and recently adopted accounting standards, see Note 2, New and Recently Adopted Accounting Standards, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in "Part I, Item 1. Financial Statements" of this Form 10-Q.
Forward-Looking Statements
Some of the statements in this Quarterly Report on Form 10-Q, and in particular, statements found in this Management's Discussion and Analysis of Financial Condition and Results of Operations, that are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about our expectations regarding our future liquidity, earnings, expenditures, and financial condition. These statements are often identified by the words "will," "should," "anticipate," "believe," "expect," "intend," "estimate," "hope," or similar expressions. These statements reflect management's current views with respect to future events and are subject to risks and uncertainties. There are important factors that could cause actual results to differ materially from those in forward-looking statements, many of which are beyond our control. These factors, risks and uncertainties include the following:
• the impact of general economic conditions;
• the impact of the COVID-19 pandemic on the health of our employees, on our
vendors and customers and on economic conditions affecting our business;
• the impact of acquired businesses and risks and uncertainties regarding
operation, expected benefits and integration of such businesses;
• containerboard, corrugated products, and white paper general industry
conditions, including competition, product demand, product pricing, and
input costs;
• fluctuations in wood fiber and recycled fiber costs;
• fluctuations in purchased energy costs;
• the possibility of unplanned outages or interruptions at our principal
facilities;
• legislative or regulatory actions or requirements, particularly concerning
environmental or tax matters.
Our actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements, and accordingly, we can give no assurances that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do occur, what impact they will have on our results of operations or financial condition. Given these uncertainties, investors are cautioned not to place undue reliance on these forward-looking statements. We expressly disclaim any obligation to publicly revise any forward-looking statements that have been made to reflect the occurrence of events after the date hereof. For a discussion of other factors, risks and uncertainties that may affect our business, see Item 1A. Risk Factors included in our Annual Report on Form 10-K for the year endedDecember 31, 2020 . 23
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