Yesterday, we reported second quarter net income of $207 million or $2.17 per share.
Excluding special items, second quarter 2021 net income was also $207 million or $2.17 per share compared to the second quarter of 2020 net income of $132 million or $1.38 per share.
Second quarter net sales were $1.9 billion in 2021 and $1.5 billion in 2020.
Total company EBITDA for the second quarter excluding special items was $397 million in 2021 and $299 million in 2020.
Reported earnings in the second quarter of 2021 included special items expense and income rounding to a negligible impact while last year's second quarter net income included special items expenses of $0.79 per share related primarily to the impairment of goodwill associated with our Paper segment.
Excluding special items, the $0.79 per share increase in second quarter 2021 earnings compared to the second quarter of 2020 was driven primarily by higher prices and mix of $1.01 and volume $0.74 in our Packaging segment, higher volume in our Paper segment of $0.03, and lower non-operating pension expense of $0.03.
These items were partially offset by higher operating costs of $0.57 primarily due to inflation related increases in the areas of labor and fringes, repairs, materials and supplies, recycled fiber cost as well as other indirect and fixed cost areas.
We also had inflation related increases in our converting costs, which were higher by $0.05 per share while annual outage expenses were up $0.19 per share compared to last year.
Freight and logistics expenses were higher by $0.19 per share driven by historically high load to truck ratios, driver shortages, increases in fuel costs, and a higher mix of spot pricing to keep pace with the box demand.
Lastly, depreciation expense was higher by $0.01 per share and Paper segment prices and mix were lower by $0.01 per share.
Looking at our Packaging business, EBITDA excluding special items in the second quarter of 2021 of $409 million with sales of $1.7 billion resulted in a margin of 24% versus last year's EBITDA of $313 million and sales of $1.4 billion or a 22% margin.
3 machine at our Jackson, Alabama mill provided our plants the necessary containerboard to achieve an all-time record for total box shipments.
In addition, being a primarily virgin fiber based producer of containerboard minimizes the impact of significant increases in recycled fiber costs over the last several quarters.
Our plants achieved a new all-time quarterly record for total box shipments as well as a second quarter record for shipments per day, both of which were up 9.6% compared to last year's second quarter.
Through the first half of 2021, our box shipment volume is up 9% on a per day basis versus the industry being up 6.8%.
Driven by higher domestic demand, outside sales volume of containerboard was about 43,000 tons above the second quarter of 2020, but was down slightly versus the first quarter of this year due to lower export shipments, supplying the record requirements of our box plants and the need to position inventory levels ahead of what appears to be a strong second half of the year.
Domestic containerboard and corrugated products prices and mix together were $0.92 per share above the second quarter of 2020 and up $0.51 per share compared to the first quarter of 2021.
Export containerboard prices were up $0.09 per share versus last year's second quarter and up $0.04 compared to the first quarter of 2021.
Looking at the Paper segment, EBITDA excluding special items in the second quarter was $12 million with sales of $142 million or an 8% margin compared to second quarter 2020 EBITDA of $5 million and sales of $3 million or a 4% margin.
Although about 1% below second quarter 2020 levels, prices and mix moved higher for the first and into the second quarter of 2021 as we continued to implement our announced price increases.
Volume was 17% above last year when pandemic issues caused us to take both machines at the Jackson, Alabama mill down for two months during the second quarter while this year, we ran the No.
1 machine at Jackson on paper and the No.
3 machine ran linerboard.
Cash provided by operations for the second quarter was $228 million with free cash flow of $97 million.
The primary uses of cash during the quarter included capital expenditures of $131 million, common stock dividends of $95 million, cash taxes of $87 million, and net interest payments of $40 [Phonetic] million.
We ended the quarter with $972 million of cash on hand or $1.1 billion including marketable securities.
Our liquidity at June 30th was just under $1.5 billion.
Considering these items, we expect third quarter earnings of $2.37 per share.

Summary:
Yesterday, we reported second quarter net income of $207 million or $2.17 per share.
Excluding special items, second quarter 2021 net income was also $207 million or $2.17 per share compared to the second quarter of 2020 net income of $132 million or $1.38 per share.
Second quarter net sales were $1.9 billion in 2021 and $1.5 billion in 2020.
In addition, being a primarily virgin fiber based producer of containerboard minimizes the impact of significant increases in recycled fiber costs over the last several quarters.
Considering these items, we expect third quarter earnings of $2.37 per share.