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, 2016, 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 file manager\", \"accelerated file manager\" and \"small Reporting Company\" in rule 12b 2 of the Trading Act. Large accelerated file x accelerated file Accelerate the preparation of the newspaper ( Reporting Company) The smaller reporting company indicates whether the registrant is a shell company by checking the mark ( Defined in Rule 12b-2 of the Act). As of June 30, 2016, whether ( Registrant recently completed the last working day of the second quarter) Total market value of non-held common stock The affiliate of the registrant is $1. 09 billion . 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, 2017, 16,463,862 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 March 28, 2017, and the Securities and Exchange Commission related to the registrant\'s 2017 annual meeting of shareholders, are established in reference to Part III of this agreement. CLEARWATER Paper Company Index in 10-2016 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. Registrant\'s common stock, related shareholder matters and issuer\'s purchase of equity securities market-ITEM 6. Selected Financial Data Items 7. Management Discussion and Analysis of Financial Position and operational resultsITEM 7A. Quantitative and qualitative disclosure of market risks41 ITEM 8. Financial statements and supplementary information-87 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. Attachment Index-Schedule of financial statements Part 1 warning statement on forwarding In addition to historical information, the information we disclose and analyze in this report also contains certain forward-looking information Statements in the sense of the Private Securities Litigation Reform Act of 1995, including statements regarding shareholder value, the benefits of costs and optimization plans, the interests of Manchester industrial acquisitions, the suspension of production of Neenah Paper machines, our strategy, the use and cost of raw materials and inputs, including energy costs and uses related to new Shelby, North Carolina facilities, strategic capital projects and related costs, energy conservation, cash flow, benefits, production quality and quantity, costs and time, capital expenditure, return on investment in capital projects, tax rates, operating costs, sales, general and administrative expenses related to material maintenance and repair, liquidity, level of funding for benefit plans, capitalized interest and interest expenditure time and cost. 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: our ability to execute growth and expansion strategies; We are planning an unexpected construction delay in our new organization manufacturing business in Shelby, North Carolina; Competitive pricing pressure on our products, including increased capacity due to the operation of additional manufacturing facilities by our competitors; The time and quantity of customers accepting and purchasing our organizational products, including the sufficient demand and quality for the organization when our recently announced Shelby plant in North Carolina is put into operation; Changes in the United States. S. And the international and general economic conditions of the regions and industries we operate; Price loss or change related to important customers; Our ability to successfully implement operational efficiency and cost-saving strategies; Changes in customer product preferences and competitor products; Manufacturing or operational disruption, including implementation failures of IT systems and IT systems, equipment failures, and damage to our manufacturing facilities; Changes in transportation costs and disruption of transportation services; Changes in the cost and availability of wood fibers and pulp; Interruption of labor force; Cyclical industry; Changes in the cost and availability of packaging supplies, chemicals, energy and maintenance and repair; Environmental liabilities or expenditures; We realize our ability to acquire the expected earnings of Manchester Industrial Corporation; Changes in fees and required contributions related to our pension plan; 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- In manufacturing factories across the country, household paper towels, mother roll paper towels, bleached cardboard and pulp. 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. We acquired the Manchester industrial company in December 16, 2016. Owns cardboard sales, film and distribution suppliers in the packaging and commercial printing industries. Customers from Manchester industry join our cardboard business to expand 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 facilities in five strategic locations in Virginia, Pennsylvania, Indiana, Texas and Michigan. On November 29, 2016, we announced the permanent closure of the conversion facilities in the city of Russia. It is planned to close the city facilities in orkama in March 31, 2017. 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. Also on November 29, 2016, we announced the permanent closure of two organization machines at the Neenah organization factory in Wisconsin, effective at the latestDecember 2016. We expect this factory to close these paper machines and carry out related restructuring to reduce our overall cost and improve the operational efficiency of Neenah factory. In December 30, 2014, we sold our professional business and factory to private buyers. The production of professional factories is mainly composed of machines. The organization of the glaze also includes the mother roll and other special tissue products such as absorbing materials and dark tissuehued napkins. The sale includes five Clearwater Paper subsidiaries in Connecticut, Michigan, New York, Ontario and Mississippi. 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, 2016, we are the sixth largest organization manufacturer in the North American organization market. Our extensive manufacturing footprint enables us to serve a wide range of customer groups in a cost-effective manner, including large grocery chains and retailers across 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 2016, our top 10 consumer goods customers accounted for about 70% of our total net sales of consumer goods. The average term of these customer relationships is about 13 years. Overall, our consumer goods business maintains 14 customers in a wide geographic area. We still have a long time. Maintain long-term customer relationship with cardboard customers. In 2016, our top 10 cardboard customers accounted for about 50% of our net cardboard sales. The average term of these customer relationships is about 30 years. Pulp and cardboard facilities in 2 strategic locations. 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. Pulp and tissue surgery were integrated to a large extent. 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 the scale and scope of our business 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 our customers and successfully integrate our acquisition of Manchester industry. 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 2014- 2016 and geographic information on our net sales are contained in note 20, \"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 2016, net sales in our consumer goods sector were $988. 4 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. Including airports, 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. Most of our sales in bathroom paper towels are of high quality Double Super and high quality 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 2016, the paper towel market accounted for about 90% 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 2016, our consumer goods were manufactured on 12 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. In December 2016, we permanently closed two of the five paper machines in Neenah, the Wisconsin organization factory. At 2016 and 2015, through more Store channels including groceries, medicines, US dollars, supermarkets and club stores, as well as military purchases, we sold about 33% and 32%, respectively, in private label tissue products in the United StatesS. We have a customer in consumer goods, Kroger, which is about $0. 232 billion, or 13. Net sales of the company in 2016 amounted to approximately $ 4%, or 0. 215 billion per cent. 3%, accounting for our net sales in 2015. In 2014, none of our customers accounted for 10% or more of our total net sales. 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 2016, net sales in our pulp and board division were $746. 4 million . A list of some of our pulp and cardboard facilities is contained in Part I of this report, Item 2. The pulp and cardboard Industry Overview SBS cardboard is the best quality grade of cardboard used to produce folding cartons, liquid packaging, cups and plates, and commercial printed 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 and shipped to the customer for conversion to final use. 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 4. Folding carton is the largest part of SBS category in USAS. The cardboard industry accounted for about 38% of the category in 2016. 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 and dry food. Field of commercial printing. 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, 2016, we are one of the top five bleached cardboard producers in North America with an available capacity of about 12%. In addition, through our recent acquisition of Manchester Industrial, we offer custom film, slitting and cutting of cardboard products from five conversion plants. Our overall pulp and cardboard production mainly includes folding cartons, liquid packaging, Cup board products, commercial printing grades 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- As we acquired Manchester Industrial, we did 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. With the acquisition of Manchester Industrial, we can convert cardboard mother Rolls to flat and narrow rolls, 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. Expand our service platform in this way, increase the critical folding carton section of our business, and compete with our customers in other key segments. At the Idaho plant, we mainly produce bleached Cork pulp for internal use, including our consumer goods department. Our pulp mill currently produces about 857,000 tons of pulp per year. In 2016, we produced about 802,000 tons of pulp and produced about 83% tons of cardboard using about 664,000 of the output, that is, about 788,000 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 17% of the pulp production in the consumer goods sector, that is, about 136,000 tons, to produce organizational products. Our consumer goods department produces less than 1% of the remaining pulp sold to the outside world, or about 2,000 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 offices located across the USS. , A smaller proportion of commercial printers through distribution. In addition, with our recent acquisition of Manchester Industrial, we sell cardboard products directly to folding carton converters, merchants and commercial printers. Most of our international 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. During the 2016 period, the cost of the pulp we purchased was 13. 2% of our sales cost, 9 chips, sawdust and logs. 9% . In 2016, our consumer goods department purchased about 45% of the pulp supply from our pulp and cardboard department, 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. In 2016, chemical costs accounted for 11. 2% of our sales costs 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. Our shipping cost is 12. 2% of our sales cost in 2016. We consume a lot of energy, such as electricity, pig fuel, steam and natural gas. Energy costs accounted for 5 in 2016. 8% of our sales costs 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 total packing Cost of 2016 is 5. 7% of our sales costs Our repair and maintenance represents 6. We spend 4% of our sales costs for 2016 years, and we spend on what happens. 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. The depreciation fee is 5. 4% of our sales Cost of 2016. 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, compared to the second and third quarters of a given year, the pattern that customers buy our cardboard often results in a decline in sales in our pulp and cardboard sections. 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. 6 website interested parties can visit 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, 2016, we had about 3,370 employees, of whom about 1,930 were employed in our consumer goods department, and about 1,270 were employed in our pulp and cardboard department, there are about 170 employees in the company\'s administrative department. The workforce consists of approximately 800 salaried employees and approximately 2,570 employees per hour and at a fixed rate. As of December 31, 2016, the collective bargaining agreement covered about 48% of our labor force. The union represents the hourly staff of our three production bases. There are three labor contracts per hour due on 2016. Two of the contracts were renegotiated within the year. The following contracts due on 2016 are currently under negotiation: contract expiry date Department and location union number of hourly employees in consumer goods department on May 31, 2016 Federation of steel workers in WisconsinUSW) 295 the following two-hour union labor contract expires on 2017: contract expiry date number of hourly employees in the department and location of the Union\'s consumer goods department and pulp and cardboard department on August 31, 2017 Union steel workers in Lewiston, Idaho (USW) 975 consumer goods & Pulp & cardboard business unit, August 31, 2017- Lewiston International Brotherhood of Electric workers, Idaho (IBEW) 55 7 executive officers of registrants under the Securities Trading Act of 1934 as of December 31, 2016, the following individuals are treated as 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 50) 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. Marsmann was elected 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. John D. Hertz (age 50) 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. Patrick T. Burke (age 56) He has served as Senior Vice President and Group President since October 2015 and as senior vice president and president of consumer goods department from April 2015 to October 2015. From May 2014 to April 2015, he served as vice president of supply chain. From March 2011 to April 2014, Sir. Burke served as the Western director of Pepsi beverages, and was the western regional director of Pepsi American beverages from January 2008 to February 2011. Michael S. Gadd (age 52) 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. Kari G. Moyes (age 49) 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 human resources director of Nestle, a food manufacturer. 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. Expanding our business by building new paper and conversion facilities may not be as expected. Related to our long-term cooperation. Long-term growth 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 problems 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. An increase in organizational supply 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. 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 Quality Organization products, may have a significant adverse impact on the price of high quality and super-high-end products High quality paper towel products. In addition, the increase in the supply of organizations, including the shift of traditional organizations, increased premiums and Quality supply may adversely affect the market demand and price of traditional organization products, and in the foreseeable future, traditional organization products will continue to account for a large part of our total output. The US and global economic conditions may adversely affect our product needs and financial outcomes. U. S. The global economic situation has a significant impact on our business and financial performance. 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. Foreign manufacturers in Asia and Europe are currently increasing and are expected to continue to increase their paper production capacity, particularly cardboard production capacity. This, in turn, could lead to increased competition in the North American paper market, where foreign competitors sell directly and/or where U. S. 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 paper products may lead us to lower prices or lose sales to competitors, both of which may have a significant adverse effect on our operating results and cash flow. 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 2016, our top 10 consumer goods customers accounted for about 70% of our total net sales of consumer goods. In 2016, our top 10 cardboard customers accounted for about 50% 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. We have experienced consumer goods customer price increases and promotional competition, especially in terms of TAD products, which reduces our gross profit margin and adversely affects 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 addition, our attention to these big customers may affect our ability to serve smaller customers, especially when the supply of products is tight and we cannot fully meet the orders of these smaller customers. 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. Our investments to improve operational efficiency may not be fully realized or support the level of investment we are making. Our short-term strategy of investing to improve operational efficiency and cost effectiveness may not be fully realized. The capital projects we are investing in may not be able 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. 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 shipping supplier or failure to deliver raw materials to us in a timely manner, we may not be able to manufacture the product in a timely manner. Our transportation fee was 12 on 2016. 2% of our sales costs The cost of these transport services is affected by the above factors and the price of fuel affected by geopolitical and economic events. 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. 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 a major maintenance outage in 2016, which happened in the third quarter of our Lewis ton pulp and board plant in Idaho. Unexpected production disruptions can cause us to shut down or cut the operation of any of our facilities. For example, due to the power outage and the subsequent start-up in Lewiston, we experienced a major disruption to operations in 2016, the facility in Idaho, and a fire broke out at our Las Vegas facility in 2016. Disruption may occur due to various circumstances, including prolonged power outages, mechanical or process failures, shortage of raw materials, natural disasters, disruption of transportation, labor disputes, terrorism, change or non- 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 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. 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 2016, it purchased about 55% of its pulp demand from outside, including about 13. 2% of our sales costs 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. We are not avoiding these risks. Wood fiber is the main raw material for making pulp, which is used to make our pulp and cardboard products and consumer goods. Our cost of wood fiber in 2016 is 9. 9% of our sales costs 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. In the past few years, a significant reduction in home construction has led to the closure or reduction of operations in many sawmill. Until the housing market recovers and saw mill operations increase, the price of wood fiber is expected to remain volatile. In addition, the supply and price of wood fibers can also be negatively affected by 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. Future Labor disruption can hurt our business and financial performance. As of December 31, 2016, our 48% 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, the collective bargaining agreement for most hourly employees of our Lewis ton plant in Idaho will expire and will be negotiated, which affects about 975 employees. In addition, the collective bargaining agreement for the Wisconsin Neenah plant, which expired on 2016, remains to be negotiated. 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. 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 may have a significant adverse effect on our operational results and financial position. In addition, we may underestimate the cost and cost of developing and implementing new systems. 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 2016, our chemical cost was 11. 2% of our sales costs 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 2016. 8% of our sales costs 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. 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. We must comply with the terms and conditions of environmental laws and multiple environmental licenses. In particular, the pulp and paper industry in the United States is subject to several performance-based rules related to wastewater and air emissions due to some of its manufacturing processes. Federal, state, and local laws and regulations require that we often obtain authorization from appropriate government authorities and comply with their evolving standards, which have considerable discretion in terms of licensing. Failure to comply with environmental laws and license requirements may result in civil or criminal fines or penalties or enforcement actions, including regulatory or judicial orders that issue or reduce our business or require us to take corrective measures, install pollution control equipment or take other remedial measures such as product recall or label change. We may also need to continuously increase spending related to environmental issues, which may be important. There is no guarantee that environmental licenses will be issued in the future, nor that we will be able to maintain and update existing licenses, and failure to do so may have a significant adverse impact on our operational results, financial position and cash flow. We own property, carry out or have carried out operations on property, and bear the liability for compensation for property or operations in which hazardous materials have been or have been used for many years, included in the period prior to the need or general belief of the need for careful management of these materials. Therefore, we will continue to face the risks stipulated by environmental laws, which are responsible for the historical release of hazardous substances, and be liable for compensation for other potential violations of environmental laws or permits of existing premises or places we are responsible Due to consolidation difficulties and other challenges, we may not be aware of the expected benefits of the acquisition of the Manchester industry. In December 2016, we acquired the Manchester industrial company and provided us with a direct document. Board sales and conversion platform. For us, this is a new area of business and operations and we may not be able to achieve the desired benefits from the acquisition. The integration process will be complex and time-consuming. consuming. Potential risks associated with our efforts to integrate Manchester\'s business and operations include: failure to effectively implement our business plan; Unforeseen problems in the integration of finance, manufacturing, logistics, information, communications and other systems; Failure to retain key employees; Failure to retain key clients, including our clients in film and commercial printing business and those in Manchester; Inconsistency of standards, controls, procedures and policies, including internal control and regulatory requirements under Sabans The Oakley Act of 2002; And unforeseen problems, expenses and liabilities. In addition, the integration of Manchester operations and business requires the focus of our management team, including a significant commitment to their time and resources. Our management needs to focus on integration issues, which can have a significant and adverse impact on our sales and operational results. In addition, we may not be able to maintain the level of revenue, revenue or operational efficiency previously achieved in Manchester. Failure to achieve or delay in achieving the intended benefits of the acquisition may result in increased costs, reduced expected revenue, and a shift in management time and effort, will have a significant impact on our business, financial position, operating results and cash flow. Large competitors have operational and other advantages over our operations. The market competition for our products is very fierce. companies with more financial resources compete with us in every market. Some of our competitors have an advantage over us, including lower raw materials and labor costs, and better access to the input of our products. Our consumer goods business faces competition from companies that produce products of the same type as ours, or from companies that produce alternative products that customers may use instead of our products. Our consumer goods business competes with brand label manufacturers of brand organization products such as P & G and production brands and private label products, such as Georgia- Pacific and KimberlyClark. These companies are much larger than us, have more sales, marketing, and R & D resources than we do, and have a significant cost advantage due to economies of scale. In addition, due to the size and resources of these companies, they may predict market trends more accurately than we do, and develop new technologies that make our products less attractive or outdated. Our ability to successfully compete in the pulp and cardboard industry is affected by many factors, including manufacturing capacity, general economic conditions, and availability and demand for cardboard alternatives. Our pulp and cardboard business competes with Westlock International Paper, Georgia Pacific and international producers, most of them are much bigger than us. Any increase in the manufacturing capacity of these or any other producer may result in excess capacity in the pulp and cardboard industry, which may put downward pressure on pricing. For example, there are several newer factories in China with larger cardboard manufacturing capacity, and production of these plants is expected to increase the supply of cardboard on the international market. In addition, a large European manufacturer is expected to start the production of cardboard in a new factory, the products for the North American market.