Clearwater Paper Corp
For the period ended Dec 31, 2025. Filed Feb 18, 2026.
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FY2025 · Filed Feb 18, 2026
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Item 8. Financial Statements and Supplementary Data
| ITEM 8. | Financial Statements and Supplementary Data |
|---|
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Clearwater Paper Corporation:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Clearwater Paper Corporation and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 18, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Measurement of the pension benefit obligation
As discussed in Notes 1 and 12 to the consolidated financial statements, the Company’s pension benefit obligation was $213.9 million as of December 31, 2025. The measurement of the pension benefit obligation is based on actuarial assumptions that require judgment, which includes the discount rate applied to the pension benefit obligation.
We identified the evaluation of the discount rate used in the measurement of the pension benefit obligation as a critical audit matter. Specialized skills and knowledge were required to evaluate the discount rate used to determine the pension benefit obligation. In addition, there was subjectivity and judgment in applying and evaluating results of the procedures due to the sensitivity of the pension benefit obligation to changes in the discount rate.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain controls over the Company’s pension benefit process. This included a control related to the determination of the discount rate assumption. We considered the change in the discount rate from that used in the prior year, including consideration of the changes in the discount rate in light of published reports of actuarial experts. We involved an actuarial professional with specialized skills and knowledge, who assisted in evaluating the discount rate as determined using the hypothetical bond portfolio model through analyzing the bond selection criteria, the bond ratings, and the cash flow matching of the model.
/s/ KPMG
We have served as the Company’s auditor since 2007.
Seattle, Washington
February 18, 2026
Consolidated Balance Sheets
| December 31, | ||
|---|---|---|
| (In millions, except share information) | 2025 | 2024 |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $30.7 | $79.6 |
| Receivables, net of allowance for current expected credit losses of $1.8 and $1.6 at December 31, 2025 and 2024 | 195.3 | 188.7 |
| Inventories, net | 281.7 | 258.0 |
| Other current assets | 18.3 | 19.1 |
| Total current assets | 526.0 | 545.4 |
| Property, plant and equipment | 2,377.9 | 2,328.4 |
| Accumulated depreciation and amortization | (1,376.1) | (1,305.4) |
| Property, plant and equipment, net | 1,001.8 | 1,023.1 |
| Goodwill and intangible assets, net | 2.1 | 52.9 |
| Other assets, net | 58.3 | 57.9 |
| Total assets | $1,588.3 | $1,679.2 |
| Liabilities and stockholders' equity | ||
| Current liabilities: | ||
| Current portion of long-term debt | 0.6 | 0.6 |
| Accounts payable and accrued liabilities | 215.6 | 319.7 |
| Total current liabilities | 216.2 | 320.4 |
| Long-term debt | 345.5 | 281.6 |
| Liability for pension and other postretirement employee benefits | 49.5 | 52.5 |
| Deferred tax liabilities | 68.2 | 89.7 |
| Other long-term obligations | 83.7 | 80.5 |
| Total liabilities | 763.0 | 824.7 |
| Stockholders’ equity: | ||
| Preferred stock, par value $0.0001 per share, 5,000,000 shares authorized,no shares issued | — | — |
| Common stock, par value $0.0001 per share, 100,000,000 shares authorized, 16,567,722 issued | — | — |
| Additional paid-in capital | 8.3 | 11.5 |
| Treasury stock, 529,385 and 122,821 shares at cost | (14.8) | (3.3) |
| Retained earnings | 862.3 | 880.8 |
| Accumulated other comprehensive loss, net of tax | (30.5) | (34.5) |
| Total stockholders’ equity | 825.3 | 854.6 |
| Total liabilities and stockholders' equity | $1,588.3 | $1,679.2 |
Consolidated Statements of Operations
| For The Years Ended December 31, | |||
|---|---|---|---|
| (In millions, except per share data) | 2025 | 2024 | 2023 |
| Net sales | $1,555.4 | $1,383.6 | $1,136.0 |
| Costs and expenses: | |||
| Cost of sales | 1,439.8 | 1,307.5 | 935.3 |
| Selling, general and administrative expenses | 100.8 | 116.7 | 119.4 |
| Other operating charges, net | 8.9 | 24.0 | 3.2 |
| Goodwill impairment | 48.0 | — | — |
| Total operating costs and expenses | 1,597.5 | 1,448.1 | 1,057.9 |
| Operating income (loss) | (42.1) | (64.5) | 78.1 |
| Interest expense, net | (16.8) | (29.2) | (9.5) |
| Debt retirement costs | — | (9.1) | (3.1) |
| Other non-operating (expense) income | (1.2) | 1.8 | 0.1 |
| Total non-operating expense | (18.0) | (36.6) | (12.5) |
| Income (loss) from continuing operations before income taxes | (60.1) | (101.1) | 65.6 |
| Income tax provision (benefit) | (7.1) | (27.1) | 16.9 |
| Income (loss) from continuing operations | (53.0) | (74.0) | 48.7 |
| Income (loss) from discontinued operations before income taxes | (3.5) | 73.3 | 78.6 |
| Gain on sale of discontinued operations | 1.5 | 307.2 | — |
| Income tax provision (benefit) of discontinued operations | (36.4) | 110.2 | 19.6 |
| Income (loss) from discontinued operations | 34.4 | 270.3 | 59.0 |
| Net income (loss) | $(18.6) | $196.3 | $107.7 |
| Basic income (loss) per share: | |||
| Income (loss) per share from continuing operations | $(3.28) | $(4.41) | $2.89 |
| Income (loss) per share from discontinued operations | 2.13 | 16.11 | 3.50 |
| Net income (loss) per share | (1.15) | 11.70 | 6.39 |
| Diluted income (loss) per share: | |||
| Income (loss) per share from continuing operations | (3.28) | (4.41) | 2.85 |
| Income (loss) per share from discontinued operations | 2.13 | 16.11 | 3.45 |
| Net income (loss) per share | $(1.15) | $11.70 | $6.30 |
Consolidated Statements of Comprehensive Income (Loss)
| For The Years Ended December 31, | |||
|---|---|---|---|
| (In millions) | 2025 | 2024 | 2023 |
| Net income (loss) | $(18.6) | $196.3 | $107.7 |
| Other comprehensive income (loss), net of tax: | |||
| Defined benefit pension and other postretirement employee benefits: | |||
| Net (gain) loss arising during the period, net of tax of $1.3, $(1.2) and $0.9 | 3.8 | (3.6) | 2.8 |
| Amortization of actuarial (gain) loss included in net periodic cost, net of tax of $0.1, $(0.1) and $(0.1) | 0.2 | (0.3) | (0.2) |
| Other comprehensive income (loss), net of tax | 4.0 | (3.8) | 2.6 |
| Comprehensive income (loss) | $(14.6) | $192.5 | $110.3 |
Consolidated Statements of Cash Flows
| For The Years Ended December 31, | |||
|---|---|---|---|
| (In millions) | 2025 | 2024 | 2023 |
| Operating activities | |||
| Net income (loss) | $(18.6) | $196.3 | $107.7 |
| Adjustments to reconcile net income (loss) to net cash flows provided by operating activities: | |||
| Goodwill impairment | 48.0 | — | — |
| Depreciation and amortization | 92.4 | 99.8 | 98.6 |
| Equity-based compensation expense | 3.8 | 5.6 | 9.9 |
| Deferred taxes | (22.5) | 39.0 | (14.9) |
| Defined benefit pension and other postretirement employee benefits | 0.1 | (4.2) | (2.0) |
| Gain on business divestiture | (1.5) | (307.2) | — |
| Amortization of deferred debt costs and debt retirement | 2.2 | 11.8 | 4.4 |
| Loss on sale or impairment associated with assets | 7.9 | 1.9 | 2.1 |
| Changes in operating assets and liabilities, net of acquisitions and divestitures: | |||
| (Increase) in accounts receivable | (2.2) | (87.2) | (1.3) |
| (Increase) decrease in inventories | (23.5) | 12.4 | 4.0 |
| (Increase) decrease in other current assets | 1.4 | (2.5) | 0.8 |
| Increase (decrease) in accounts payable and accrued liabilities | (75.3) | 98.9 | (21.3) |
| Other, net | 0.1 | (3.0) | 2.6 |
| Net cash flows provided by operating activities | 12.3 | 61.4 | 190.7 |
| Investing activities | |||
| Additions to property, plant and equipment 1 | (88.8) | (116.6) | (73.7) |
| Acquisition of business | — | (708.2) | — |
| Proceeds (payments) from business divestiture | (11.6) | 992.5 | — |
| Net cash flows provided by (used in) investing activities | (100.4) | 167.7 | (73.7) |
| Financing activities | |||
| Borrowings on long-term debt | 82.0 | 753.4 | 222.0 |
| Repayments of long-term debt | (18.6) | (931.1) | (325.6) |
| Taxes paid related to net share settlement of equity awards | (2.3) | (4.1) | (4.7) |
| Repurchases of common stock | (17.2) | (10.0) | (17.9) |
| Payments for debt issuance costs | — | (5.6) | (3.1) |
| Other, net | (4.6) | 5.9 | — |
| Net cash flows provided by (used in) financing activities | 39.3 | (191.4) | (129.4) |
| Increase (decrease) in cash and cash equivalents | (48.9) | 37.7 | (12.4) |
| Cash and cash equivalents at beginning of period | 79.6 | 42.0 | 54.4 |
| Cash and cash equivalents at end of period | $30.7 | $79.6 | $42.0 |
| Supplemental disclosures of cash flow information: | |||
| Cash paid for interest, net of amounts capitalized | $15.9 | $52.4 | $37.8 |
| Cash paid for income taxes, net of refunds received | $53.8 | $19.0 | $16.6 |
1 Capital expenditures of $7.4 million, $25.8 million and $13.0 million that have not been paid as of December 31, 2025, 2024 and 2023 were excluded from the Statement of Cash Flows.
Consolidated Statements of Stockholders’ Equity
| Common Stock · Additional Paid-In Capital · Treasury Stock · RetainedEarnings · AccumulatedOtherComprehensiveLoss · TotalStockholders'Equity | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In millions, except share amounts which are in thousands) · Shares · Amount · Shares · Amount | |||||||||||||||
| Balance at December 31, 2022 | 16,762 | $— | $28.5 | — | $— | $576.8 | $(33.3) | $572.1 | |||||||
| Net income | — | — | — | — | — | 107.7 | — | 107.7 | |||||||
| Stock-based compensation expense | — | — | 9.0 | — | — | — | — | 9.0 | |||||||
| Issuance of shares under stock plans, net | 266 | — | (4.7) | — | — | — | — | (4.7) | |||||||
| Pension and other postretirement employee benefits, net of tax of $0.9 | — | — | — | — | — | — | 2.6 | 2.6 | |||||||
| Repurchases of common stock | (543) | — | (17.9) | — | — | — | — | (17.9) | |||||||
| Balance at December 31, 2023 | 16,485 | — | 14.9 | — | — | 684.5 | (30.7) | 668.8 | |||||||
| Net income | — | — | — | — | — | 196.3 | — | 196.3 | |||||||
| Stock-based compensation expense | — | — | 6.0 | — | — | — | — | 6.0 | |||||||
| Issuance of shares under stock plans, net | 247 | — | (2.7) | — | — | — | — | (2.7) | |||||||
| Pension and other postretirement employee benefits, net of tax of $1.3 | — | — | — | — | — | — | (3.8) | (3.8) | |||||||
| Repurchases of common stock | (164) | — | (6.7) | (123) | (3.3) | — | — | (10.0) | |||||||
| Balance at December 31, 2024 | 16,568 | — | 11.5 | (123) | (3.3) | 880.8 | (34.5) | 854.6 | |||||||
| Net loss | — | — | — | — | — | (18.6) | — | (18.6) | |||||||
| Stock-based compensation expense | — | — | 4.8 | — | — | — | — | 4.8 | |||||||
| Issuance of shares under stock plans, net | — | (8.0) | 192 | 5.7 | — | — | (2.3) | ||||||||
| Pension and other postretirement employee benefits, net of tax of $1.3 | — | — | — | — | — | — | 4.0 | 4.0 | |||||||
| Repurchases of common stock | — | — | — | (599) | (17.2) | — | — | (17.2) | |||||||
| Balance at December 31, 2025 | 16,568 | $— | $8.3 | (529) | $(14.8) | $862.3 | $(30.5) | $825.3 | |||||||
Index to Notes to Consolidated Financial Statements
| PAGENUMBER | ||
|---|---|---|
| NOTE 1 | Summary of Significant Accounting Policies | 42 |
| NOTE 2 | Recently Adopted and New Accounting Standards | 47 |
| NOTE 3 | Business Acquisition | 47 |
| NOTE 4 | Discontinued Operations | 48 |
| NOTE 5 | Fair Value Measurements | 49 |
| NOTE 6 | Leases | 49 |
| NOTE 7 | Goodwill and Intangible Assets | 52 |
| NOTE 8 | Income Taxes | 53 |
| NOTE 9 | Debt | 57 |
| NOTE 10 | Other Operating Charges, net | 59 |
| NOTE 11 | Non-Operating Expense | 60 |
| NOTE 12 | Retirement Plans and Postretirement Benefits | 60 |
| NOTE 13 | Accumulated Other Comprehensive Loss | 66 |
| NOTE 14 | Earnings per Share | 66 |
| NOTE 15 | Stockholders' Equity | 67 |
| NOTE 16 | Commitments and Contingencies | 69 |
| NOTE 17 | Insurance Recovery | 69 |
| NOTE 18 | Cost Reduction Plan | 69 |
| NOTE 19 | Segment Disclosure | 70 |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.