Washington, D. C. Securities and Exchange CommissionC. 20549 Form 10-K (Mark One) Annual Report submitted under section 13, 15 (d) According to Section 13 or 15, in the exchange for the fiscal year ended December 31, 2017, ACTOF1934 or in the transition report (d) ACTOF1934 from Commission File No. : 001- 34146 water Paper Company ( The exact name of the registrant specified in the articles of association)Delaware 20-3594554 ( State or other jurisdiction registered or organized)( IRS employer identification number)601 W. 1100 suites Spokane, Washington, 99201 Riverside Avenue ( Main executive office address)(Zip Code) The registrant\'s telephone number, including the area code :(509)344- 5900 securities registered under article (b) Title of the act: each class name of each exchange registered with common stock ($0. Face value per share 0001) New York Stock Exchange securities registered under section 12th (g) Key points of the bill: no one indicates by check mark whether the registrant is a well or not Well-known experienced issuers as defined in Rule 405 of the Securities Act. No no check mark indicates whether the registrant does not need to submit a report under Section 13 or section 15 (d)of the Act. Whether the registrant is indicated by a check mark (1) All reports requested in Section 13 or 15 have been submitted (d) Securities Trading Act of 1934 within the first 12 months ( Or a short period of time required for the registrant to submit such reports), and (2) This filing requirement has been bound for the last 90 days. No no check mark indicates whether the registrant is electronically submitted and posted on its company website (if any), each Interactive Data File submitted and published as required by S-Regulation section 405thT (§ 232. This Chapter 405) Within the first 12 months ( Or in such a short time that the registrant is required to submit and publish these documents). Yes, no check mark was passed to indicate whether the declaration of arrears was disclosed under S-regulation 405th To the knowledge of the registrant, K is not included in the final proxy or information statement referenced in Part 3 of this Form 10 and will not be included in it K or any amendments to this form 10K. Indicate whether the registrant is a large accelerated filer, non-accelerated filer by checking the mark A smaller reporting company. See the definition of \"large accelerated reporting companies\", \"Small reporting companies\" and \"emerging growth companies\" in rule 12b 2 of the Trading Act. Large accelerated file x accelerated file Accelerate the preparation of the newspaper ( Reporting Company) If an emerging growth company, smaller reporting companies indicate by check marks whether the registrant chooses not to use the extended transition period to comply with any new or revised financial accounting standards provided under section 13 (a) The Trading Act. Indicate whether the registrant is a shell company by check mark ( Defined in Rule 12b-2 of the Act). As of June 30, 2017, whether ( Registrant recently completed the last working day of the second quarter) Total market value of non-held common stock The registrant\'s affiliates are $755. 5 million . Shares of common stock held by each officer and director and each person who owns 5% or more of the outstanding common stock are excluded because these persons may be considered affiliated companies. The determination of this status of association is not necessarily a conclusive decision for other purposes. As of February 16, 2018, 16,447,898 ordinary shares of the registrant had been issued. The documents contained in the reference section of the final proxy statement submitted on or before and after April 3, 2018, and the Securities and Exchange Commission related to the registrant\'s 2018 annual meeting of shareholders, are established in reference to Part III of this agreement. CLEARWATER Paper Company Index Page K of the first part. Business -ITEM1A. Risk Factors -ITEM 1B. Unresolved staff review Item 2. Property item 3. The fourth legal action. The second part is the fifth mine safety disclosure. Market for registrant common stock, related shareholder matters and issuer to purchase equity securities Selected Financial Data Items 7. Management Discussion and Analysis of Financial Position and operational resultsITEM 7A. Item 8 on quantitative and qualitative disclosure of market risks. Financial statements and supplementary information-ITEM 9. Changes in accounting and financial disclosure project 9A and differences with accountants. Control and procedures for Item 9B. The tenth item of the third part. Project 11 of directors, executive officers and corporate governance. Item 12 of administrative compensation. Security title matters of certain beneficial owners and management and related shareholders 13. Director independence item 14: certain relationships and related party transactions. Part IV main accounting expenses and services for item 15. Schedule of financial statements-ITEM 16. Form 10- K. Summary signature on Forwarding part 1 warning statement In addition to historical information, the information we disclose and analyze in this report also contains certain forward-looking information Looking for statements in the sense of the Reform Act on Private Securities Litigation in 1995, including statements about the acquisition of Manchester industry and the closure of our Thunder City facility, our strengths and related interests, our strategy, pulp production and continuous biogas digesters at our Idaho plant, raw materials and put into use and cost, including energy costs and uses related to new Shelby, North Carolina plant, strategic capital projects and related costs and benefits, energy conservation, benefits, production quality and quantity, costs and time, cash flow, capital expenditure, return on investment in capital projects, tax rates, operating costs, sales, general and related to material maintenance and repair, liquidity, level of funding for benefit plans, capitalized interest and interest expenditure administrative fees, time and costs. Words such as \"expectation\", \"intention\", \"plan\", \"goal\", \"project\", \"believe\", \"schedule\", \"estimate, \"may\" and similar expressions are designed to identify such a forward direction Look at the report. These forward- The outlook report is based on expectations, estimates, assumptions, and forecasts that management may change at present. Our actual operating results may differ materially from those expressed or implied by the forward Forward-looking statements contained in this report. Important factors that may lead to or lead to differences in operational results include the risks discussed in Item 1a of this report, and the following: competitive pricing pressures for our products, including increased capacity due to the operation of additional manufacturing facilities by our competitors; Loss, price change or decrease of major customer orders; Changes in customer product preferences and competitor products; Our ability to successfully implement operational efficiency and cost-saving strategies; Our ability to execute our expansion strategy, including Time to complete our planned manufacturing business for the new organization in Shelby, North Carolina; The time and number of customers accepting and purchasing our organizational products, including our expanded business in Shelby, North Carolina, after completion of sufficient demand and quality for the organization; Changes in the United States. S. And the international and general economic conditions of the regions and industries we operate; Interruption of labor force; Changes in transportation costs and disruption of transportation services; Changes in the cost and availability of wood fibers and pulp; Manufacturing or operational disruption, including implementation failures of IT systems and IT systems, equipment failures, and damage to our manufacturing facilities; Changes in the cost and availability of packaging supplies, chemicals, energy and maintenance and repair; Cyclical industry; Changes in fees and required contributions related to our pension plan; Environmental liabilities or expenditures; cyber-security risks; Third, relying on a limited number Supplier of raw materials; We cannot pay our debts; Restrictions on our business by debt covenants and terms; And changes in laws, regulations or industry standards that affect our business. Forward- The forward-looking statements contained in this report are submitted to management only on the date of publication of this report. Unless required by applicable law, we do not intend to issue an update on any future revisions to the management point of view to reflect the events or circumstances that occurred after the date of this report. However, it is recommended that you consult us for any further disclosure of the relevant topics in our quarterly report in form 10 Q and Current Report on Table 8 K submitted documents to the Securities and Exchange Commission (SEC. 1 ITEM1. Clearwater Paper is a company that produces high-quality consumer Paper towels. from-home tissue (or AFH) Production of mother roll paper towels, bleached cardboard and pulp in manufacturing plants across the country. The company is the main supplier of private label paper towels for major retailers and wholesale distributors (including grocery stores, medicines, mass merchants and discount stores. In addition, the company produces for quality- A conscious printer and packaging converter with services including custom film, slitting and cutting. Clearwater Paper employees build shareholder value by developing strong customer relationships through quality and service. In December 16, 2016, we acquired the Manchester Industrial Corporation) Owns cardboard sales, film and distribution suppliers in the packaging and commercial printing industries. Our customers in Manchester join our cardboard business to extend our business scope and service platform to small and medium-sized enterprises Adjust the dimensions of the folding carton factory by offering a range of conversion services, including custom film, slitting and cutting. These conversion businesses include five strategic facilities in Virginia, Pennsylvania, Indiana, Texas and Michigan. In March 31, 2017, we permanently closed our conversion facility in the city of oclarah. As the cost and optimization plan across the company increases productivity, we expect the production of the plant to be effectively absorbed and supplied more efficiently by our other facilities. The company\'s leading manufacturer of private label paper towels has a wide range of US marketsS. footprint. Our consumer goods business is a leading manufacturer of private label paper towels. We have passed. air- Dry or TAD tissue manufacturing facilities in places such as Shelby, North Carolina and Las Vegas, Nevada The TAD manufacturing plant is located in Ladysmith, Wisconsin, Lewiston, Idaho and Wisconsin Neenah and has a strategic transformation across the United States. According to the volume of the organization\'s mother roll, we believe that as of December 31, 2017, we are the sixth largest organization manufacturer in the North American organization market. Our extensive manufacturing footprint enables us to serve different customer groups on a cost-effective basis, including major grocery stores and retailers in the United StatesS. Quality Brand- Equal paper towels and other products that meet retailer\'s own brand strategy. Our consumer goods business Quality products that match the quality of leading brands across the country. We focus on high value paper towel products in various categories and retail channels. We also produce a variety of costs- Competitive consumer paper towel products, as well as recycled paper towels and paper towel mother rolls. High quality bleached cardboard products. Our production of pulp and cardboard business Smooth printing surface, superior cleanliness, excellent molding and sealing performance. The product has a variety of thickness to choose from to provide the level of rigidity and strength required for a wide range of applications. The high quality of our cardboard allows buyers to use our products for packaging, such as ice cream containers, health and beauty packaging, drug packaging, and point of purchase display, where brand and quality are critical. Long- Customer relationship. Our consumer goods business offers private label tissue products to several of the largest national retail chains. In 2017, our top 10 consumer goods customers accounted for about 80% of our total net sales of consumer goods. The average term of these customer relationships is about 11 years. Overall, our consumer goods business maintains 79 customers in a vast geographic area. We still have a long time. Maintain long-term customer relationship with cardboard customers. In 2017, our top 10 cardboard customers accounted for about 45% of our net cardboard sales. The average term of these customer relationships is about 30 years. Superior pulp and cardboard facilities. Our pulp and board factory in Lewiston, Idaho is the only SBS board factory with coating in the western United States and one of only two solid bleach sulfuric acid plantsS. Provide a full range of professional products to meet customers\' needs for traditional folding carton, plate, cup and liquid packaging products. The location of the facility reduces transportation costs for customers in the western United StatesS. And Asia, which allows us to compete on costs. This is a favorable basis for East Coast producers. We are centrally located in Cypress Bend, Arkansas, which reduces the cost of transportation to the Midwest and East of the United StatesS. And added the Lewis ton plant to the National Customer transportation. Mainly integrated pulp and tissue surgery. Our consumer goods business receives a large portion of the pulp supply from the pulp and cardboard business in Idaho. This relationship provides safe pulp supply and significant transportation and drying cost savings for our consumer goods business, providing a stable source of demand for our pulp and cardboard business, it also helps to mitigate input cost fluctuations related to the purchase of external pulp. Our long-term strategy The long-term strategy is to expand our business to meet the needs of our customers and optimize the profitability of our consumer goods business and cardboard business. In the near- For a long time, our focus has been on successfully completing strategic capital projects, optimizing the operational efficiency and cost-effectiveness of our two departments and growing Meet the needs of customers. Our business is divided into two business sectors: consumer goods and pulp and cardboard. Other information relating to net sales, operating income, depreciation and amortization, identifiable assets and capital expenditures for each of our business units in 2015- 2017 and geographic information on our net sales are contained in Note 19 \"Segment information\" to consolidated financial statements under subitem 8 of Part II of this report \". Consumer goods segment our consumer goods segment produces and sells complete- Household paper towel products and AFH products. Our integrated manufacturing and conversion operations and our geographic footprint enable us to deliver a wide range of costs- Competitive products of the same quality as our customers. In 2017, net sales in our consumer goods sector were $941. 9 million . Our list of facilities in the consumer goods sector is contained in Part I of this report, Item 2. Overview of consumer paper towel products industry. The U. S. Paper towel market can be divided into two segments: The retail purchase part of the family or consumer, which represents about two-thirds of U. S. tissue sales; And the AFH segment, representing the remaining one-third of U. S. Organize market sales including restaurants, hotels and office buildings. The U. S. at- Household paper towels are composed of bath products, paper towels, facial towels, napkins and other product categories. According to the quality breakdown: Super, premium, value and economy, there is a further distinction between each category. Due to improvements in manufacturing processes and consumer preferences, most- Household paper towels sold in the United StatesS. Excellent quality. At- Household paper towel manufacturers consist of companies that produce branded paper towel products, private label paper towel products, or both. Brand paper towel suppliers manufacture and sell paper towel products according to their own national brand labels. Private label paper towel manufacturers make paper towel products for retailers for sale as their store brand. In the U. S. , at- Household paper towels are sold mainly through grocery stores, mass stores, warehouse clubs, pharmacies and discount stores. In the past, paper towels have been one of the most powerful parts of the paper industry because of its steady growth in demand and relatively no serious supply imbalance, mainly due to population growth in the United StatesS. This happened in some other paper industry. In addition to economic and demographic factors, organizational needs are also affected by changes in product innovation and distribution channels. We believe that we are the only consumer goods company in the United States. S. Consumer paper towel manufacturers specializing in the production of a full range of high-quality private label paper towel products for large retail trade channels. Most U. S. Paper towel manufacturers only produce branded products, or branded and private label products, or in the case of certain small and medium-sized manufacturers, only a limited range of paper towel products or quality parts are produced. Brand manufacturers usually produce their own brand products with a quality of less than one or two levels of their brand products, so as not to damage the sales of brand products. Since we do not produce and sell branded tissue products on a large scale, we believe we are able to offer products that match the quality of leading national brands, but usually at a lower price. We use independent companies to regularly test the quality of our products. 3 in bathroom paper towels most of our sales are of high quality High-end products. In terms of paper towels, we produce and sell high-quality towels as well as high-end and value-added towels. In the face category, we sell Superlotion three- Ply and the full two lines- High quality products, as well as value-added facial tissue. In napkins, we make over two. and three- Serving napkins, as well as high-end and premium napkins- Lunch napkins. Also produce recycled fiber value grade products for customers who wish to further enrich their product portfolio. We\'re mainly here- Family Part of AmericaS. In 2017, the paper towel market accounted for about 95% of sales in our consumer goods segment. We manufacture and sell a range of AFH products for customers with business and industrial organization needs. Products include traditionaland two- Toilet paper, two layers Use paper towels, hard wound towels and dispenser napkins. During 2017, our consumer goods were manufactured on 10 paper machines located in facilities across the United StatesS. Then, the parent roll on our paper machine is converted and packaged in our conversion facilities around the United StatesS. Our two paper machines, located in Las Vegas, Nevada, and Shelby, North Carolina, produced TAD paper towels, which we converted into comparable ultra-quality towels and bath towels for national brands. At 2017 and 2016, through more Direct sales channels including grocery stores, medicines, US dollars, supermarkets and club stores, our total private label tissue products in the United States sold about 32% and 33% respectivelyS. We have a customer in consumer goods, Kroger, which accounts for about 15. 3% of the company\'s net sales in 2017 was approximately 13. 4% of the company\'s net sales in 2016, about 12. 3%, accounting for our net sales in 2015. We sell our own brand tissue products through our own sales team and compete according to product quality, customer service and price. We offer our customers Focus on business solutions by helping manage product classification, Category management, and pricing and promotion optimization. Pulp and cardboard division our pulp and cardboard division produces and sells high-content bleached cardboard The terminal department in the packaging industry, is a leading manufacturer of SBS cardboard, and provides services including customized cardboard, split-cut cardboard and cut cardboard. The department also produces hardwood and Cork pulp, primarily used as the basis for our cardboard products and supplies slush pulp to our consumer goods department. In 2017, net sales in our pulp and board division were $788. 5 million . A list of some of our pulp and cardboard facilities is contained in Part I of this report, Item 2. Industry Overview of pulp and board SBS board is a quality grade board product, most commonly used in the production of folding cartons, liquid packaging, cups and plates, blister and cardboard packaging, top cardboard, and commercial printing items. SBS cardboard is used for such products as it is manufactured using a combination of raw fiber and Kraft bleaching process for excellent cleanliness, brightness and consistency. SBS cardboard is usually made with clay coating to provide excellent surface printing quality. SBS cardboard can also be extruded with plastic film to provide moisture-proof barrier for some purposes. Usually, the process of making cardboard begins with the chemical cooking of wood fibers into pulp. The pulp is bleached to provide a white bright pulp that forms cardboard. The bleached pulp that will be used as the market pulp will bypass the cardboard machine to dry and pack on the pulp dryer. The cardboard of various grades is wrapped in rolls to be converted into end users. Liquid packaging and Cup stock grades are usually coated with polyethylene, plastic coating in separate operations to create a resistance and durable liquid barrier. Folding carton section. Folding carton is the largest part of SBS category in USAS. The cardboard industry accounted for about 40% of the category in 2017. In the folding carton section, the quality of SBS cardboard varies. The high end of the folding carton category usually requires advanced printed surfaces, including the packaging of medicines, cosmetics and other advanced retail goods. SBS cardboard is also used in the packaging of frozen foods, beverages and baked goods. Liquid packaging and Cup segments. SBS liquid packaging board is mainly used in the United States. S. For packaging of juice. In Japan and other Asian countries, SBS liquid packaging cardboard is mainly used for the packaging of milk and other consumables. The cups in the market are mainly composed of hot and cold beverage cups and food packaging. Hot and cold cups are mainly used to serve beverages quickly- Service restaurant, while round food containers are usually used to pack high-end ice Cream, hot noodles, dry food. 4 Commercial printing plate. Commercial printing applications make postcards, signage, and sales literature using bleached bristols (heavyweight paper grade. Bristols can be coated with clay on one or both sides for applications such as brochures, presentation folders, and paperback covers. Customers in this segment are getting used to high High quality paper grade with excellent printing suitability and brightness compared to most cardboard packaging grades. Suppliers in this area must be able to deliver a small number of products within 24 hours. Market Pulp . Most of the pulp produced around the world is used for paper and cardboard production, usually in the same factory. If a paper mill is not paired with a pulp production operation or requires pulp of different production quality, it must purchase pulp in the open market. Market pulp is defined as pulp sold to these customers and it does not include the tonnage consumed by the production plant, nor does it include the tonnage shipped to any affiliated plant of the same company. Our pulp and board business our pulp and board division operates pulp and board facilities in Idaho, two cardboard machines in Idaho and one cardboard machine in Arkansas. As of December 31, 2017, we are one of the top five bleached cardboard producers in North America with an available capacity of about 12%. In addition, we offer customized film, slitting and cutting of cardboard products from five conversion facilities. Our overall pulp and cardboard production mainly includes folding cartons, liquid packaging, Cup board products, blister and cardboard packaging, top grade paper, commercial printing grade and hardwood and Cork pulp. Folding carton boards for medicines, cosmetics and other high-end packaging, such as those containing foil and holographic lamination, account for the largest share of our total cardboard sales. We focus on high The improvement of product quality requirements provides the condition for the difference between suppliers, often resulting in more attractive profits than less critical packaging applications. Our liquid-packed cardboard is known for its cleanliness and printing suitability and is designed for long Since the third- Cork structure. Our reputation for producing liquid packaging that meets the most demanding standards of cardboard quality and cleanliness has produced meaningful sales in Japan, where consumers are particularly inclined to associate flaws Free, vibrant packaging, cleanliness, quality and freshness of the internal liquid. We also sell Cup stock and plate stock grades for food service products. Most of our sales in this area include high- High-end food packaging such as high-end ice cream. In addition to our supply capacity --in- We do not produce the end of the converted cardboard- Therefore, we are not the supplier and competitor of the customers in the main market segment, especially the folding carton. Of the five largest SBS cardboard producers in the United StatesS. We are the only manufacturer that does not convert SBS cardboard into folding cartons, cups, plates and end of liquid packaginguse products. We believe that our location provides us with a different group of loyal customers, as we do not expect to transfer production to internal use when demand for cardboard increases in the market. We can convert the cardboard master roll to a flat and narrow roll, which expands our revenue Market Service capabilities enable us to support small and medium-sized enterprises. Buy a folding carton converter converted from cardboard to the end of the package-products. Providing the service platform in this way expands the key folding carton areas of our business and does not compete with our customers in other key market areas. At the Idaho plant, we mainly produce bleached Cork pulp for internal use, including our consumer goods department. With the recent installation of a continuous pulp biogas digester at the Idaho plant, our pulp plant is able to produce about 908,000 tons of pulp per year. We completed the installation of the continuous pulp biogas digesters at the Idaho plant at the end of 2017 and expect to reach full production capacity by the end of 2018. In 2017, we produced about 807,000 tons of pulp and produced about 83% tons of cardboard using about 673,000 of the output, that is, about 794,000 tons. The increase in tonnage from pulp to cardboard production is due to the increase in paint and other manufacturing processes. We also use about 16% of the pulp production in the consumer goods sector, that is, about 129,000 tons, to produce organizational products. Our consumer goods department produces less than 1% of the remaining pulp sold to the outside world, or about 5,000 tons. We sell and distribute our cardboard and Cork pulp using various methods. Most of our cardboard is sold to domestic packaging converters through sales managers located across the USS. , A smaller proportion of commercial printers through distribution. In addition, we sell flat cardboard products directly to folding carton converters, merchants and commercial printers. Most of our international 5 cardboard sales are conducted through sales agents, mainly in the United States. S. dollars. Our main way of competition is product quality, customer service and price. Raw materials and input costs for our manufacturing business, the main raw materials used are wood fiber, consisting of purchased pulp and chips, sawdust and logs. In 2017, our consumer goods department purchased about 46% of the pulp supply from within and the rest from external suppliers. We own and operate the wood debris plant in Clarkston, Washington, near our plant in Lewiston, Idaho, which we believe supports our wood fiber location and provides short-term and long- Long term cost savings. We use a large number of chemicals in the production of pulp and paper, including caustic soda, polyethylene, starch, sodium chloride, latex and paper chemicals in special processes. Part of the chemical used in our manufacturing process, especially in pulp Production process of oil Affected by oil prices. Transportation is an important cost input for our business. Fuel prices affect the shipping cost of our delivery of raw materials to manufacturing plants and the delivery of finished products to our customers. We consume a lot of energy, such as electricity, pig fuel, steam and natural gas. According to the supply contract, we purchased a large portion of natural gas and electricity, most of which were between specific facilities and specific local suppliers. Under most of these contracts, the supplier agrees to provide us with our requirements for a particular type of energy in a particular facility. Most of these contracts have pricing mechanisms that adjust or set prices based on current market prices. In addition, we use the company- Price contracts to mitigate the price risk of some of our energy needs. As an important producer of Private Label Consumer paper towel products, we also bear the costs associated with retail chains, wholesalers and co-purchasing packaging supplies used by organizations. Our maintenance and repair costs are paid at the cost incurred. We perform daily maintenance of our machines and equipment and regularly replace various components such as motors, pumps, pipes and electrical components. We also record Depreciation expenses related to our factories and equipment. More information on our raw materials and input costs is included under \"operating costs\" in part II of this report, item vii, \"Management\'s Discussion and Analysis of Financial Position and operational results. Seasonal drop in shipments in our consumer goods sector in the fourth quarter, often due to falling consumer demand, holiday promotions for retail brands, and non- Retail customers. In addition, the pattern in which customers buy our cardboard usually results in certain grades of our pulp and cardboard sections falling in sales in the first and fourth quarters, compared to the second and third quarters of a given year. Environmental information on environmental matters is included in Part II of this report, Item 7, \"Management\'s Discussion and Analysis of Financial Position and operational results\" and incorporated into this report through reference. Website interested parties can access our regular and current reports submitted to SEC free of charge by visiting our website www. Clear Water paper. com. Select Investor Relations in the menu and then financial information and SEC filing \". \"The information on our website is not part of this report. As of December 31, 2017, we had about 3,280 employees, of whom about 1,870 were employed in our consumer goods department and about 1,230 were employed in our pulp and cardboard department, about 180 are employees of the company\'s administrative department. The workforce consists of approximately 790 salaried employees and approximately 2,490 employees per hour and at a fixed rate. As of December 31, 2017, the collective bargaining agreement covered about 49% of our labor force. The union represents the hourly staff of our three production bases. We have two hourly union labor contracts due in 2017 and are currently renegotiating: contract expiry date Department and location union number of hourly employees in consumer goods department and pulp and cardboard department in August 31, 2017 Union steel workers in Lewiston, Idaho (USW) 950 consumer goods & Pulp & cardboard business unit, August 31, 2017- Lewiston International Brotherhood of Electric workers, Idaho (IBEW) Below 60 per hour union labor contract expires on 2018: contract expiration date Department and location Union May 31, 2018 approximate number of employees per hour in pulp and board Department- Lewiston, Idaho, No. 4 Power boiler units of the International Association of mechanics (IAM) Under the Securities Transactions Act of 1934 as of January 1, 2018, the following individuals of the executive officers of the 40 7 registrants are considered our \"executive officers \". Company executives are usually appointed as executives at the annual meeting of our board of directors, each officer served until the official\'s successor is officially elected and qualified, or until the officer dies, resigns, retires earlier, the removal of the board of directors or as otherwise specified in our articles of association. There is no arrangement or understanding between any of our executive officers and any other person who has been elected an officer according to them. None of our executives have a family relationship. Linda K. Massman (age 51) He has served as president, chief executive and director since January 2013. Ms. From November 2011 to December 2012, Marsman served as president and chief operating officer. She served as senior vice president of chief financial officer and finance from May 2011 to November 2011 and vice president of chief financial officer and finance from December 2008 to May 2011. From September 2008 to December 2008, Ms. Prior to the completion of the rotation, Marsman served as vice president of Potlatch Corporation Clearwater Paper. From May 2002 to August 2008, Ms. Massman is vice president of financial and corporate planning group at SUPERVALU Inc. A grocery retail companyIn 2017, Ms. Mansman served as chairman of the board of directors of the American Forest and Paper Association (AF&PA) National Association of forest industry and trade. Ms. Mansman also served as a director of the company in Montenegro (NYSE: BKH) An energy company as a member of its compensation committee and a director of tree house food(NYSE:THS) Is a member of its audit committee and governance committee. John D. Hertz (age 51) Joined the company in June 2012 as senior vice president and chief financial officer since August 2012. From June 2010 to June 2012, Sir. Hertz is vice president and chief financial officer of Novellus, Inc. From October 2007 to June 2010, he served as vice president and chief accounting officer of corporate finance at novellus, and served as vice president and corporate finance director from June 2007 to October 2007. From 2000 to 2007 Hertz has worked at Intel and has held multiple positions in the company, including the central finance director of Digital Enterprise Group, the finance director of enterprise platform services and the director of accounting policy. Before that, sir. Hertz is the senior manager of KPMG law firm. Michael S. Gadd (age 53) He has served as senior vice president since May 2011 and has served as General Counsel and Corporate Secretary since December 2008. He served as vice president from December 2008 to May 2011. From March 2006 to December 2008, Sir. Gadd served as deputy general counsel for Potlatch Corporation and served as secretary of Potlatch Corporation from July 2007 to December 2008. From January 2001 to January 2006, Sir. Gadd is a lawyer at Perkins Coie law firm in Portland, Oregon. Arsen S. Kitch (age 36) He has served as vice president and general manager of consumer goods since January 2018. He served as vice president of finance from January 2015 to December 2017 and senior director of planning and strategy from August 2013 to December 2014. Mr. From 2011 to 2013, Kitch worked in Nestle, a food manufacturer, including as chief financial officer. Kari G. Moyes (age 50) He has served as senior vice president of human resources since February 2015 and vice president of labor relations from July 2013 to January 2015. From November 2010 to June 2013, Ms. Moyes was the national director of human resources at Nestle. Before she worked for Nestlé Moyes has worked for Pepsi for 10 years. 8 ITEM1A. Our business, financial position, operating results and liquidity are affected by a variety of risks and uncertainties, including the risks and uncertainties described below, so the transaction price of our common stock may decline. The increase in organizational supply, especially in the senior and ultra-senior categories, may adversely affect our operational results and financial position. In the past few years, some new or refurbished premium and super We and our competitors, including private label competitors, have completed or announced high quality paper towel machines, which will result in a substantial increase in the supply of high quality and super quality paper towels Quality paper towels in North America market. In addition, several new or refurbished traditional organization machines have been installed or announced, including increased presence and operation in North America due to foreign competitors. We believe that with increased organizational capacity and increased competition among retail customers, it makes it difficult for us to communicate to our customers the substantial increase in input costs we have experienced in the past few years. If the demand for paper towel products in the North American market does not increase, or if the consumer\'s preference for paper towel products changes High-quality paper towel products may have a material adverse effect on the quality and super quality prices High quality paper towel products. In addition, the supply of high quality and super quality products increased Quality organizations may adversely affect the market price of such organizations and lead to a shift in demand for traditional organizations, which may adversely affect the market price of traditional organization products, in the foreseeable future, this will continue to account for a large part of our total output. Loss or significant reduction in orders or price changes for any of our major customers may adversely affect our operational results and financial position. We get a lot of revenue from a group of concentrated customers. For example, in 2017, our top 10 consumer goods customers accounted for about 80% of our total net sales of consumer goods. We have experienced consumer goods customer price increases and promotional competition, especially in the Super This competition reduces our gross profit margin and adversely affects our financial position. In 2017, our top 10 cardboard customers accounted for about 45% of our net cardboard sales. If we lose any of these customers or a large part of their business, or if our relationship with any of them is not good for us, our net sales will decline, this will damage our operating results and our financial position. Some of our customers have the ability to produce parent rolls or products that they buy from us. We don\'t usually last long. Sign regular contracts with many of our customers to ensure they maintain their business level. In addition, our agreement with our customers (including our largest customers) is not exclusive and generally does not contain a minimum number of purchase commitments. Our relationship with our largest and most important customers will depend on whether we can continue to meet their demand for high-quality products and services at competitive prices. If we lose one or more of these customers, or if the purchase level of any of them drops significantly, we may not be able to quickly replace the lost business volume, our results and business may be compromised. In the third quarter of 2017, our largest paper towel customers decided to move from a single-source model to a multi-source model Starting in 2018, the source model of their private label paper towel supply. This decision will primarily affect the supply of traditional organizations to this customer and we do not expect to completely replace the amount of this loss by selling to other customers in 2018. Competitor\'s brand products and their own brand products may adversely affect our financial performance. Our consumer goods and Well-known brand products and other own brand products. Our business may be hurt by competitors\' new product supply, integration of retailers and distribution channels, and price competition from companies that may have more financial resources than we do. If we are unable to provide existing customers or new customers with tissue products comparable to branded products or private label products in terms of quality, customer service and/or price, we may lose our business, or we may not be able to expand our existing business and be forced to sell at low prices -- All of this can have a negative impact on our financial position and operational results. The changing retail purchasing model increases the need to improve operational efficiency and diversify our customer base and sales channels. Historically, we have sold most of our consumer paper towel products through a retail grocery store. These and other traditional retail stores face growing competition from super centers, club stores, wholesale grocery stores, 9 and medicines, US dollars, variety and specialty stores, and the Internet as a direct competitor. to- Consumer channels and the Internet Only suppliers selling paper towels and other grocery products. The fierce competition our customers face has led them to step up their efforts to reduce costs from suppliers like us and require us to improve cost efficiency to maintain our market share and profitability. The changing retail environment also requires us to develop and maintain relationships with a wider range of retailers and retail channels in order to succeed in this dynamic environment. Optimization and cost of our operations Savings goals may not be fully achieved or they may not support the investments or commitments we are making. Our short-term strategy to improve our competitive position by investing in operational efficiency and implementing cost control measures may not be fully realized. These targets, and capital projects that we have invested or are investing in to help achieve them, including the continuous biogas digesters at our Lewis ton plant and warehouse automation at several plants, it may not be possible to achieve the expected operational or financial results within the time frame we expect or at all. Such delays or failures may have a significant impact on our business, cash flow and financial position. Expanding our business by building new organizational manufacturing and conversion facilities may not be as expected. Related to our long-term cooperation. Long-term expansion strategy, we are adding a paper machine that can produce certain quality and super quality paper Quality paper towel products and transform the factory into our factory in Shelby, North Carolina. The tissue machine that will be installed in North Carolina is very complex and costly, and there is only one company in the world that can make it. The installation of this machine and the construction of auxiliary facilities pose many risks, including difficulties in completing projects on time due to construction or problems, cost overruns, difficulties in integrating new operations and personnel, and once the new paper machine is put into use, there is uncertainty about sufficient customer needs and the quality of the organization that accepts production. Any of these risks, if realized, may have a significant adverse effect on our business, financial position, results of operations and liquidity. In addition, such incidents may distract management from other business issues. The US and global economic conditions may adversely affect our product needs and financial outcomes. U. S. The global economic situation and currency exchange rates have had a significant impact on our business and financial results. The global economy is weak and the US economy is strong. S. The dollar can influence our business in a number of ways, including leading to a decline in global demand for consumer paper towels and cardboard, which increases the likelihood or speed of foreign manufacturers entering or increasing US salesS. market. Increased competition and supply from foreign manufacturers may adversely affect the demand and financial results of our products. At present, foreign manufacturers in Asia and Europe are increasing the production capacity of cardboard and are expected to continue to increase. This in turn could lead to increased competition in the North American cardboard market, where foreign competitors enter directly and/or increased competition in the United StatesS. S. market as domestic manufacturers seek to increaseS. Sales to offset overseas sales from increased sales by foreign suppliers in the Asian and European markets. The increase in the supply of foreign cardboard products may lead us to lower prices or lose sales to our competitors, both of which may have a significant adverse effect on our operating results and cash flow. Future Labor disruption can hurt our business and financial performance. As of December 31, 2017, we had about 49% According to the collective bargaining agreement, the time employees are represented by the Union. As these agreements expire, we may not be able to negotiate an extension or replacement agreement in accordance with the terms we can accept. In 2017, our hourly employee collective bargaining agreement affecting about 1,010 employees at the Lewis ton plant in Idaho expired and is currently under negotiation. Failure to reach an agreement with one of the unions could result in strikes, stoppages or other labor actions, any of which could have a significant adverse effect on our operations and financial results. Disruption of transport services or increased transportation costs may have a significant adverse impact on our business. Our business, especially our consumer goods business, relies on transportation services to deliver our products to our customers and deliver raw materials to us. Shipments of products and raw materials may be delayed or interrupted due to weather conditions, labor shortages or strikes, regulatory actions or other events. If our shipping supplier is unable to deliver our products in a timely manner, we may increase the cost. In the absence of any 10 shipping suppliers or failure to deliver raw materials to us in a timely manner, we may not be able to manufacture the products in a timely manner. The cost of these transport services is also affected by geopolitical and economic events. Our transportation fee was 11 on 2017. Our 6% sales, due to higher line shipping rates, diesel prices and weather-related events, these costs soared in the second half of 2017. We have not been able to pass, in the past and in the future, some or all of the fuel price increases to our customers. If we are unable to raise the price due to an increase in fuel or transportation costs, our gross profit margin may be significantly adversely affected. A large part of our organization\'s production depends on external sources of pulp and wood fiber, which has affected our business and operational results by potential major fluctuations in the price of pulp and wood fiber in the market. Our consumer goods department received a large portion of the pulp demand from external suppliers, which put us in the face of price fluctuations. In 2017, we purchased about 54% of the tissue manufacturing pulp demand from the outside, including about 11. 2% of our sales From one period to the next, the price of pulp can and has changed significantly. Fluctuations in pulp prices may adversely affect our income, if we are unable to pass on cost growth to our customers, or if the price increase time of our products greatly track the rise of pulp prices. In 2017, we are unable to pass on these pulp price increases to our customers due to competitive conditions. Wood fiber is the main raw material for making pulp, which is used to make our pulp and cardboard products and consumer goods. In 2017, our cost of wood fiber was 7. 8% of our sales Most of the wood fiber we use during the pulp manufacturing process in Lewiston, Idaho is a by-product Products for sawmill operation. Therefore, the price of these residual wood fibers is affected by the level of operation of the timber industry. Over the past few years, a significant reduction in home construction has led to the closure or reduction in the operation of many sawmill, integration between suppliers. The expansion of operations and production of other paper mills and wood pellet manufacturers in the US northwest inland region can and has increased the demand and price for wood fibers. In addition, the paper and wood pellet plant in BC has limited ability to obtain wood fiber from the Inland Northwest, and the United States has no reciprocal abilityS. The factory that bought wood fiber from BC reduced the supply of wood fiber and increased the cost. The price of wood fiber is expected to remain volatile. The supply and price of wood fiber will also be negatively affected by the weather and other events. For example, a large part of our Arkansas pulp and cardboard factory relies on the whole log slice, and in the past, due to extremely humid weather conditions in the southeastern United States, this facility has experienced an increase in the cost of wood fiberS. Limited accessibility and availability. The impact of various government projects involving tax credits or payments for biomass and other renewable energy projects on the market price of wood fiber is uncertain, it may lead to a reduction in the supply of wood fiber that can be used in our pulp and cardboard manufacturing business. In addition, wood pellet facilities or fluff pulp facilities, such as the fluff pulp facilities recently announced in Arkansas, can increase the demand and price for wood fibers. If we and our pulp suppliers are unable to obtain wood fiber at a favorable price or at all, our costs will increase and our operational and financial results may be compromised. We spend a lot of money on maintaining manufacturing equipment, and any interruption in the operation of the facility can damage our operational performance. In order to maintain our manufacturing equipment and facilities, we often incur a lot of costs. The machines and equipment we use to produce products are complex, with many parts and some running continuously. We must carry out daily maintenance of our equipment and must replace various components such as motors, pumps, pipes and electrical components on a regular basis. In addition, our pulp and cardboard facilities need to be shut down regularly for major maintenance purposes. Scheduled closures of these facilities lead to reduced sales, increased costs, and may lead to changes in equipment, operations, and machinery leading to unexpected operational issues for a period of time in the future. We plan to have two major maintenance outages in 2017, which happened in the second quarter of the Arkansas plant, and the third quarter of our Lewis ton, Idaho pulp and cardboard plant. Unexpected production disruptions can cause us to shut down or cut the operation of any of our facilities. For example, on 2017, we had a fire at our factory in Shelby, North Carolina. Disruption may occur due to various circumstances, including prolonged power outages, mechanical or process failures, shortage of raw materials, natural disasters, disruption of transport, labor disputes, terrorism, changes or non-changes Comply with the environmental or safety laws and the lack of services from major suppliers of any of our facilities. No matter what the reason for the 11 shutdown is, any facility may extend the start-up time after it is closed. Depending on the reason for the closure and other factors, these start-up periods may range from days to weeks. Any long-term operational disruption to any of our facilities can result in significant loss of production, which will have a significant adverse impact on our operational results. The chemical and energy costs required for our manufacturing process significantly affect our operating results and cash flow. We use a variety of chemicals in the production process, including oil- Raw materials of polyethylene and certain Petroleum Latex chemicals. In 2017, our chemical cost was 9. 6% of our sales The prices of these chemicals have been unstable in the past and in the future. In addition, chemical suppliers using oil Due to supply shortages and increased costs, the base products that make chemicals may rationalise the amount of chemicals we can get, so if we are able to get the chemicals needed to run our business at a favorable price, these chemicals may not be available to us. Our manufacturing business also uses a lot of electricity and gas. Our energy cost is 5 in 2017. 0% of our sales Energy prices have fluctuated a lot over the past decade, which has affected our sales costs. We buy most of the natural gas needed to produce our products in the open market, so based on factors such as global supply and demand, geopolitical events, government regulation and natural disasters, the prices and other terms of these purchases may change. Our future energy costs will depend primarily on our ability to produce most of our electricity demand internally, on changes in the price of the natural gas market and on reduced energy use. In the event that we cannot increase the price of our products, any significant energy shortage or significant increase in energy costs can have a significant adverse effect on our operational results. Any disruption to energy supply may also affect our ability to meet customer needs in a timely manner and may damage our reputation. In the past, cyclical industry conditions have and may continue to adversely affect the operating results and cash flow of our pulp and cardboard business. Our pulp and cardboard business has always been affected by the cyclical market environment. In the face of weak demand, we may not be able to maintain the price, and weak demand in turn may lead to us to stop production. In addition to the loss of revenue caused by low shipments, due to low production levels, production stops lead to unabsorbed fixed manufacturing costs. Our operating results and cash flow can be significantly adversely affected during long and severe market weakness. In a period of weak demand, we cannot predict the market conditions or the ability to maintain prices and production levels. We rely on information technology in key areas of operations, and disruptions related to this technology may harm our financial position. We use information technology or IT systems in all aspects of our operations, including enterprise resource planning, ERP, inventory management, and customer sales. Some of these systems have been around for a long time. We will continue to integrate different legacy IT systems. We may be interrupted if one of the systems fails or causes a run or report outage, or if we decide to change these systems or hire external personnel to provide them, this can have a significant adverse effect on our manufacturing and sales operations, operational results and financial position. In addition, we may underestimate the cost and cost of developing and implementing new systems. Depending on the multi-employer pension plan, we may need to pay a significant amount. We donate money for two multi-employer pension plans. The amount of our annual contribution to these plans is negotiated with the plan and the bargaining unit representing the employees covered by the plan. In 2017, we contributed about $6 million to these plans, and in the coming years we may need to increase our annual contributions, which will reduce cash available for commercial and other needs. In addition, if we withdraw in part or in whole from any underfunded multi-employer scheme, we will be responsible for the corresponding share of the unfunded vested interests of these multi-employer schemes, called withdrawal liability. The liability for withdrawal is considered to be contingent. If any other contributing employer withdraws from any underfunded multi-employer scheme and the employer is unable to fulfill its obligations under the multi-employer scheme upon withdrawal, then, the proportional share of vested interests without funds in the plan will increase, which will be allocated to us and other remaining employers, and the annual contributions we need may increase. In renegotiating a collective bargaining agreement with the union involved in these multi-employer plans, we may decide to stop participating in these plans. One of the multi-employer pension schemes we are involved in, pace Industrial Alliance -- The management of the pension fund (PIUMPF) has been shown to be in a \"critical state\" for the planned year beginning in January 1, 2010 and continues to be critical for the planned year beginning in January 1, 2014. For the planned year from January 1, 2015 to January 12, 2017, under the multi-employer pension plan Reform Act of 2014, PIUMPF was shown to be in a \"critical and declining state \". In 2013, two large employers withdrew from PIUMPF, and in 2015, the largest employer of PIUMPF also withdrew. On 2016 and 2017, more employers continued to withdraw or announced plans to withdraw from the fund, including the second largest remaining employer in early 2018. We believe that we are now the largest employer. Further withdrawal by the employer may result in a \"mass exit\" of the PIUMPF, or in fact a termination of the PIUMPF, or we have the option to opt out. Although we do not intend to withdraw from PIUMPF at the moment, if we withdraw in whole or in part, we will assume the responsibility for withdrawal based on the vested interest that PIUMPF does not have funds. Based on our records as of December 31, 2017, as well as the information provided by PIUMPF, and reviewed by our actuarial consultants, we estimate that, as of December 31, 2017, if we withdraw altogether, we will need to pay about $5 to PIUMPF. 7 million advance every yeartax basis. These payments will last for 20 years, unless we are deemed to be included in the \"mass withdrawals\" of PIUMPF, in which case the payments will last permanently. PIUMPF\'s rehabilitation program also claims that additional accumulated funding shortages are required when we consider non-enforceable withdrawals. However, we are unable to determine the exact amount of our withdrawal of liability, as the amount may be higher or lower depending on the nature and time of any trigger event, before the event is triggered, the funding status of the plan and the level of our contribution to the plan. These withdrawal liability payments will be a supplement to the pension contributions of any new pension plan that we have passed or provided to replace PIUMPF, all of which will reduce available for commercial and other needs Adverse changes or requirements of pension laws and regulations, or adverse changes, requirements or claims of the fund\'s rehabilitation plan, may increase the likelihood and amount of our liabilities under PIUMPF. Our company- Sponsored pension plans are currently underfunded and we may need to pay cash to these plans to reduce the cash available for our business. We have a company. A sponsored pension plan for some of our paid employees and hourly employees. Fluctuations in the value of equity and fixed-income investment held by these plans, coupled with the low interest rate environment that led to an increase in the valuation of liabilities, led to insufficient funds for these plans, because the expected benefit obligation exceeds the total fair value of the planned assets due to annual differences Final amount since 2008. As of December 31, 2017 and 2016, the pension plan sponsored by our company was under a total of $6. $8 million and $18. 8 million respectively. Due to insufficient funds, we may need to contribute to our eligible pension plan in the coming years, which will reduce cash available for commercial and other needs. In 2017, we did not contribute to these pension plans, and we were not asked to do so in 2018. We will face significant environmental regulations and environmental compliance expenditures, which may increase our costs and hold us accountable. We are subject to various federal, state and foreign environmental laws and regulations covering water discharge, air discharge, hazardous substances and waste management, and environmental clean-up. Environmental laws and regulations are constantly developing, and in the future we may be bound by increasingly stringent environmental standards, especially under air quality and water quality laws and standards related to climate change issues, report on greenhouse gas emissions. Regulatory activities at the state, federal and international levels may increase, involving climate change and other emerging environmental issues related to our manufacturing sites, such, water quality standards based on increased fish consumption rate. Compliance with regulations that implement new public policies in these areas may require us to spend a lot or even cut some of our manufacturing operations.