AbitibiBowater announces third quarter 2008 financial results and positive outlook for the fourth quarter
ABH (NYSE, TSX)
US$- Annual Synergy Run-Rate Increases to $320 million
- Continued North American Consumption Decline Results in Increased
Market-Related Downtime
- Price Improvement Continues for Major Paper Grades in Q3MONTREAL, Nov. 6 /CNW Telbec/ - AbitibiBowater Inc. today reported a net
loss for the third quarter 2008 of $302 million, or $5.23 per diluted share,
on sales of $1.7 billion. These results compare with a net loss of $142
million, or $4.75 per diluted share, on sales of $815 million for the third
quarter of 2007, which consisted only of Bowater Incorporated. The Company's
2008 third quarter results reflect the full quarter results for
Abitibi-Consolidated Inc. and Bowater Incorporated as a combined company
following their combination on October 29, 2007.
Third quarter 2008 special items, net of tax, consisted of the following:
an $18 million gain relating to foreign currency changes, a $3 million gain on
asset sales, a $154 million charge related to closure costs, impairment and
severance, and a $65 million charge related to tax adjustments. Excluding
these special items, the net loss for the quarter would have been $104
million, or $1.81 per diluted share. Reconciliations of non-GAAP measures are
contained in Notes 7 and 8 of this release. Included in the charge for closure
costs is an impairment charge for the permanent closure in the third quarter
of the Donnacona, Quebec and the Mackenzie, British Columbia facilities, which
were indefinitely idled during the first quarter of 2008.
"Although the market and overall economy remain very challenging, we
continued to make progress during the third quarter, particularly with pricing
for our paper grades," stated President and Chief Executive Officer David J.
Paterson. "Given the significant decline of the Canadian dollar and rapidly
declining input costs related to recycled fiber and energy, we expect a
significant improvement in our financial results in the fourth quarter."
"Based on customer input, we expect a further decline in North American
newsprint consumption. In light of these developments, we plan to reduce
capacity in 2009 by taking 50,000 metric tons of downtime monthly recognizing
the need to be flexible, responding to exchange rate volatility, fiber and
energy costs as well as other market and economic developments," added
Paterson.
Segment Detail
--------------
Coated Papers
For the third quarter, the coated papers segment generated income of $30
million and EBITDA of $39 million. The Company's average transaction price for
coated papers increased $33 per short ton during the quarter compared to the
second quarter, while average operating costs increased $63 per short ton,
mainly due to higher energy-related and scheduled maintenance costs. The
Company anticipates 15,000 short tons of coated mechanical production
curtailments in the fourth quarter during the year-end holidays.
Market Pulp
Income for the market pulp segment was $6 million for the third quarter,
while EBITDA was $19 million. The average market pulp transaction price for
the Company increased $4 per metric ton, while average operating costs
increased $68 per metric ton compared to the second quarter, mainly as a
result of higher fiber and energy costs, as well as scheduled annual outages
at various facilities.
Newsprint
For the third quarter, the newsprint segment generated income of $28
million, compared to income of $1 million for the second quarter of 2008,
while EBITDA improved from $81 million to $110 million. The Company's average
transaction price increased $46 per metric ton. Average operating costs
increased $24 per metric ton, compared to the second quarter, primarily as a
result of recycled fiber and energy-related costs. Recycled fiber costs
increased $8 million and repair spending increased $8 million from the second
quarter to the third quarter.
Specialty Papers
The specialty papers segment had income of $7 million for the third
quarter, compared to a loss of $32 million for the second quarter. EBITDA
improved by $36 million from $37 million to $73 million during the quarter.
The Company's average transaction price increased $33 per short ton during the
quarter, while average operating costs decreased $31 per short ton.
Wood Products
For the third quarter, the wood products segment incurred a loss of $10
million, compared to a loss of $13 million for the second quarter. EBITDA
improved to $1 million in the third quarter compared to a loss of $2 million
in the second quarter. The average transaction price for the Company decreased
$7 per thousand board feet, while average operating costs decreased $7 per
thousand board feet compared to the second quarter.
Synergy Update
--------------
The Company continues to make significant progress toward its $375
million synergy target. As of the end of the third quarter, the annual
run-rate of synergies achieved is $320 million. The Company fully expects to
achieve the targeted level by the end of 2009.
Bowater Incorporated Credit Facility Amendment
----------------------------------------------
The Company's Bowater subsidiary is currently finalizing an amendment
that is supported by its agent bank. The amendment will extend the dates by
which the facilities convert into asset backed loan facilities until the
spring of 2009, as well as to waive compliance with certain financial covenant
requirements for the third quarter of 2008. The Company expects to complete
this amendment over the next few days.
Investor Call
-------------
A conference call hosted by Management to discuss Q3 results will be held
today at 10:00 AM (Eastern). Interested parties should dial (866) 898-9626 or
(514) 868-1042 fifteen minutes before the beginning of the call, which will be
webcast at www.abitibibowater.com, under "Webcasts and Presentations" in the
"Investors" section.
Participants not able to listen to the live conference call can access a
replay, which will also be available on the "Investors" section of the
Company's website beginning an hour after the conclusion of the call. Replay
by phone will be available until November 15, 2008, by dialing (514) 861-2272
(passcode 3265690#).
About AbitibiBowater
--------------------
AbitibiBowater produces a wide range of newsprint, commercial printing
papers, market pulp and wood products. It is the eighth largest publicly
traded pulp and paper manufacturer in the world. AbitibiBowater owns or
operates 27 pulp and paper facilities and 34 wood products facilities located
in the United States, Canada, the United Kingdom and South Korea. Marketing
its products in more than 90 countries, the Company is also among the world's
largest recyclers of old newspapers and magazines, and has more third-party
certified sustainable forest land than any other company in the world.
AbitibiBowater's shares trade under the stock symbol ABH on both the New York
Stock Exchange and the Toronto Stock Exchange.
Forward-Looking Statements
--------------------------
Statements that are not reported financial results or other historical
information are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. They include, for example,
statements about our fourth quarter financial results, our efforts to improve
operating and financial performance, our plans for future price increases for
certain of our products, our efforts to reduce costs, increase revenues and
profitability, our assessments of currency exchange rates and input costs,
including those related to fiber, energy and the Canadian dollar, our business
outlook, our curtailment of production of certain of our products, our
assessments of market conditions, our ability to achieve targeted synergies,
our ability to amend Bowater's credit facility, and our strategies for
achieving our goals generally. Forward-looking statements may be identified by
the use of forward-looking terminology such as the words "should," "would,"
"could," "may," "expect," "believe," "anticipate," and other terms with
similar meaning indicating possible future events or potential impact on the
business or stockholders of AbitibiBowater.
The reader is cautioned not to place undue reliance on these
forward-looking statements, which are not guarantees of future performance.
These statements are based on management's current assumptions, beliefs and
expectations, all of which involve a number of business risks and
uncertainties that could cause actual results to differ materially. These
risks and uncertainties include, but are not limited to, industry conditions
generally and further growth in alternative media, our ability to realize
announced price increases, the impact of the global credit crisis on our
ability to refinance or amend the terms of our current indebtedness, our
ability to obtain timely contributions to our cost-reduction initiatives from
our unionized and salaried employees, the prices and terms under which we
would be able to sell targeted assets, the continued strength of the U.S.
dollar against the Canadian dollar, the costs of raw materials such as energy,
chemicals and fiber, the success of our post-merger integration activities,
including the rollout of information technology platforms and billing and
procurement systems as well as the impact of our liquidity position on the
relationship with our customers, vendors and trade creditors. In addition,
with respect to forward-looking statements relating to the combination of
Abitibi-Consolidated Inc. and Bowater Incorporated, the following factors,
among others, could cause actual results to differ materially from those set
forth in the forward-looking statements: the risk that the businesses will not
be integrated successfully or that the improved financial performance, product
quality and product development will not be achieved; the risk that other
combinations within the industry or other factors may limit our ability to
improve our competitive position; the risk that the cost savings and other
expected synergies from the combination may not be fully realized or may take
longer to realize than expected; and disruption from the transaction making it
more difficult to maintain relationships with customers, employees or
suppliers. Additional factors are detailed from time to time in
AbitibiBowater's filings with the Securities and Exchange Commission (SEC) and
the Canadian securities regulatory authorities, including those factors
contained in the Company's Annual Report on Form 10-K/A for the year ended
December 31, 2007, filed with the SEC on March 20, 2008, and the Company's
Quarterly Report on Form 10-Q for the period ended March 31, 2008, filed with
the SEC on May 12, 2008, under the caption "Risk Factors" in each respective
report. All forward-looking statements in this news release are expressly
qualified by information contained in the Company's filings with the SEC and
the Canadian securities regulatory authorities. AbitibiBowater disclaims any
obligation to update or revise any forward-looking information.ABITIBIBOWATER INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in millions except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- ----------------------
2008 2007(1) 2008 2007(1)
----------- ---------- ---------- ----------
Sales $ 1,730 $ 815 $ 5,154 $ 2,385
Costs and expenses:
Cost of sales, excluding
depreciation,
amortization and cost
of timber harvested 1,294 672 3,990 1,912
Depreciation,
amortization and cost
of timber harvested 184 80 562 240
Distribution costs 195 84 583 242
Selling and
administrative
expenses 83 50 270 145
Closure costs,
impairment and other
related charges(2) 138 - 165 -
Arbitration award(3) - 28 - 28
Net gain on disposition
of assets(4) (5) (17) (45) (140)
----------- ---------- ---------- ----------
Operating (loss) income (159) (82) (371) (42)
----------- ---------- ---------- ----------
Other income (expense):
Interest income 3 2 9 6
Interest expense (187) (47) (519) (142)
Foreign exchange
gain (loss) 6 (16) 31 (36)
Other, net (7) (3) 11 (5)
----------- ---------- ---------- ----------
(185) (64) (468) (177)
----------- ---------- ---------- ----------
Loss before income taxes
and minority interests (344) (146) (839) (219)
Income tax benefit
(provision)(5) 50 1 52 (19)
Minority interests,
net of tax (8) 3 (14) (2)
----------- ---------- ---------- ----------
Net loss $ (302) $ (142) $ (801) $ (240)
----------- ---------- ---------- ----------
----------- ---------- ---------- ----------
Net loss per common share:
Basic and diluted(6) $ (5.23) $ (4.75) $ (13.91) $ (8.04)
----------- ---------- ---------- ----------
----------- ---------- ---------- ----------
Weighted-average number
of shares outstanding:
Basic and diluted(6) 57.6 29.9 57.6 29.9
----------- ---------- ---------- ----------
----------- ---------- ---------- ----------
ABITIBIBOWATER INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, in millions)
September 30, December 31,
2008 2007
------------- ------------
Assets
Current assets:
Cash and cash equivalents $ 295 $ 195
Accounts receivable, net 868 754
Inventories, net 863 906
Assets held for sale(4) 242 184
Other current assets 103 103
------------- ------------
Total current assets 2,371 2,142
------------- ------------
Timber and timberlands 51 58
Fixed assets, net 4,955 5,707
Goodwill 809 779
Other intangible assets, net 1,158 1,203
Other assets 593 430
------------- ------------
Total assets $ 9,937 $ 10,319
------------- ------------
------------- ------------
Liabilities and shareholders' equity
Current liabilities:
Accounts payable and accrued liabilities $ 1,177 $ 1,206
Short-term bank debt 729 589
Current installments of long-term debt 273 364
Liabilities associated with assets
held for sale(4) 34 19
------------- ------------
Total current liabilities 2,213 2,178
------------- ------------
Long-term debt, net of current installments 5,190 4,695
Pension and other postretirement benefit
obligations 823 936
Other long-term liabilities 223 231
Deferred income taxes 188 230
Minority interests in subsidiaries 146 150
Commitments and contingencies
Shareholders' equity 1,154 1,899
------------- ------------
Total liabilities and shareholders' equity $ 9,937 $ 10,319
------------- ------------
------------- ------------
ABITIBIBOWATER INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in millions)
Nine Months Ended
September 30,
---------------------------
2008 2007(1)
------------- ------------
Cash flows from operating activities:
Net loss $ (801) $ (240)
Adjustments to reconcile net loss to
net cash from operating activities:
Share-based compensation 4 10
Depreciation, amortization and cost
of timber harvested 562 239
Closure costs, impairment and other
related charges 146 -
Deferred income taxes (72) 31
Minority interests, net of tax 14 2
Net pension contributions (185) (27)
Net gain on disposition of assets (45) (140)
Amortization of debt discount (premium), net 76 (5)
Gain on extinguishment of debt (31) -
Gain on translation of foreign-currency
denominated debt (21) 19
Changes in working capital:
Accounts receivable (132) (12)
Inventories 18 (17)
Income tax receivables and payables 14 -
Accounts payable and accrued liabilities (9) 35
Other, net 39 (9)
------------- ------------
Net cash used for operating activities (423) (114)
------------- ------------
Cash flows from investing activities:
Cash invested in fixed assets, timber
and timberlands (127) (73)
Disposition of assets, including timber
and timberlands 210 167
Direct acquisition costs related to
the Combination - (17)
Cash received in monetization of
financial instruments 5 -
Other investing activities, net (77) -
------------- ------------
Net cash provided by investing activities 11 77
------------- ------------
Cash flows from financing activities:
Cash dividends, including minority interests (14) (35)
Term loan financing 400 -
Term loan financing repayments (53) -
Short-term financing, net (195) 72
Issuance of long-term debt 763 -
Payments of long-term debt (298) (15)
Payment of deferred financing and credit
facility fees (85) -
Payment of equity issue fees (6) -
------------- ------------
Net cash provided by (used for)
financing activities 512 22
------------- ------------
Net increase (decrease) in cash and
cash equivalents 100 (15)
Cash and cash equivalents:
Beginning of period 195 99
------------- ------------
End of period $ 295 $ 84
------------- ------------
------------- ------------
ABITIBIBOWATER INC.
Notes to the Press Release and Unaudited Consolidated Financial Statement
Information
(1) On October 29, 2007, pursuant to a Combination Agreement and
Agreement and Plan of Merger, dated as of January 29, 2007, Abitibi-
Consolidated Inc. ("Abitibi") and Bowater Incorporated ("Bowater")
combined in a merger of equals (the "Combination"), with each
becoming a wholly-owned subsidiary of AbitibiBowater Inc. The
Combination has been accounted for in accordance with Statement of
Financial Accounting Standards No. 141, "Business Combinations."
Bowater is deemed to be the "acquirer" of Abitibi for accounting
purposes, and AbitibiBowater is deemed to be the successor to Bowater
for purposes of U.S. securities laws and regulations governing
financial reporting. Therefore, unless otherwise indicated, our press
release and unaudited Consolidated Financial Statement information,
including related notes, reflect the results of operations and
financial position of both Abitibi and Bowater as of September 30,
2008 and December 31, 2007 and for the three and nine months ended
September 30, 2008 and those of only Bowater for the three and
nine months ended September 30, 2007. The initial purchase price
allocation will be finalized in the fourth quarter of 2008 to allow
for the gathering and review of all pertinent information, including
the final valuation reports from an independent third party. The
final purchase price allocation adjustments will primarily impact
goodwill, fixed assets and intangible assets. The only significant
adjustments made to the preliminary purchase price allocation during
the nine months ended September 30, 2008 were recorded in the
third quarter of 2008. A valuation allowance was recorded against
certain U.S. federal net operating losses from the Abitibi U.S. tax
group that are expected to expire and an adjustment was recorded for
a change in the tax treatment of a transaction that occurred prior to
the Combination. The adjustments resulted in a net decrease in
deferred tax assets and a net increase in goodwill of approximately
$30 million.
(2) During the third quarter ended September 30, 2008, we permanently
closed our previously idled Donnacona, Quebec and Mackenzie, British
Columbia paper mills based on market conditions. As a result, we
recorded long-lived asset impairment charges of $127 at our Donnacona
facility and $12 million at our Mackenzie facility. These charges
include $12 million of asset retirement obligations. Additionally,
$10 million of inventory was determined to be unusable and was
charged to cost of sales. These impairment charges were reduced by
$2 million for a reduction in an asset retirement obligation related
to a previously closed facility. Additional charges of $1 million
relating to severance costs for workforce reductions were also
recorded in the third quarter of 2008
(3) In September 2007, we received a decision in an arbitration related
to the 1998 sale to Weyerhaeuser Company ("Weyerhaeuser") of our
former pulp and paper facility in Dryden, Ontario. We and
Weyerhaeuser had been arbitrating a claim regarding the cost of
certain environmental matters related to the mill. The arbitrators
awarded Weyerhaeuser approximately $43 million (CDN $44 million),
including interest. As a result of the arbitrators' decision, which
is binding upon us and not subject to appeal, we recorded a pre-tax
charge of $28 million (CDN $29 million) during the third quarter of
2007. We had previously established a reserve of $15 million
(CDN $15 million) in connection with these environmental matters at
the time of the sale.
(4) During the third quarter of 2008, we sold approximately 900 acres of
timberlands and other assets for proceeds of $5 million, and during
the first three quarters of 2008, we sold approximately 44,000 acres
of timberlands, our Price sawmill, our Snowflake, Arizona newsprint
mill and certain related assets and liabilities, and other assets for
proceeds of $210 million, resulting in a net gain on disposition of
assets for the third quarter of 2008 of $5 million, and for the first
three quarters of 2008 of $45 million. As a result of the restatement
of our Snowflake mill to its fair market value less costs to sell as
of the date of the Combination, we did not recognize a gain or loss
on this sale. During the third quarter of 2007, we sold approximately
11,400 acres of timberlands for proceeds of $19 million, and during
the first three quarters of 2007, we sold approximately 119,200 acres
of timberlands for proceeds of $167 million, resulting in a net gain
on disposition of assets for the third quarter of 2007 of $17 million
and for the first three quarters of 2007 of $140 million. At
September 30, 2008, we held our Fort William, Ontario; Lufkin, Texas;
West Tacoma, Washington; and Mokpo, Korea facilities and some of our
timberlands in the United States and Canada for sale.
(5) During the third quarter and the first three quarters of 2008, income
tax benefits and tax credits of approximately $126 million and
$298 million, respectively, arising primarily from operating losses
outside the United States were entirely offset by tax charges to
increase our tax valuation allowance. During the first quarter and
the first three quarters of 2007, income tax benefits and tax credits
of approximately $34 million and $71 million, respectively, also
arising primarily from operating losses outside the United States,
were entirely offset by tax charges to increase our tax valuation
allowance.
(6) For the calculation of basic and diluted loss per share for the
three and nine months ended September 30, 2008 and 2007, no
adjustments to net loss are necessary. Additionally, no adjustments
to our basic weighted-average number of common shares outstanding are
necessary to compute our diluted weighted-average number of common
shares outstanding for all periods presented as the effect would be
anti-dilutive. In addition, no adjustments to net loss and the
diluted weighted average number of common shares were necessary after
giving effect to the assumed conversion of the convertible notes
representing 35 million additional common shares. As a result of the
Combination, each issued and outstanding share of Bowater common
stock and exchangeable share of Bowater Canada Inc. was converted
into 0.52 of a share of AbitibiBowater common stock and 0.52 of an
exchangeable share of AbitibiBowater Canada Inc., respectively. All
share and share-related information for the periods preceding the
Combination have been restated to reflect the Bowater exchange ratio
of 0.52.
(7) A reconciliation of certain financial statement line items reported
under generally accepted accounting principles ("GAAP") to our use of
non-GAAP measures of operating income (loss), net loss and loss per
share reported before special items is presented in the tables below.
We believe that these measures allow investors to more easily compare
our ongoing operations and financial performance from period to
period. These non-GAAP measures should be considered in addition to
and not as a substitute for measures of financial performance
prepared in accordance with GAAP. Consequently, investors should rely
on GAAP operating income (loss), net loss and loss per share.
Non-GAAP measures included in our press release include:
Operating income (loss) before special items - is defined as
operating income (loss) from our Consolidated Statements of
Operations adjusted for special items. Internally, we use a non-GAAP
operating income (loss) measure as an indicator of a segment's
performance and excludes closure costs, impairment and other related
charges, severance and merger-related costs, gains on dispositions of
assets and other discretionary charges or credits from GAAP operating
income (loss). Therefore, this non-GAAP presentation is consistent
with our internal presentation. This non-GAAP measure should be used
in addition to and not as a substitute for operating income (loss)
provided in our Consolidated Statements of Operations. We believe
that this non-GAAP measure is useful because it is consistent with
our internal presentation and performance analysis and allows
investors to more easily compare our ongoing operations and financial
performance from period to period.
Net loss before special items - is defined as net loss from our
Consolidated Statements of Operations adjusted for the special items
discussed above plus foreign exchange gains or losses, and the
adjustment for tax charges that have been taken against income tax
benefits arising primarily from operating losses at certain of our
operations outside the United States (refer to Note 5 above). The
adjustment for these items is consistent with our internal
presentation, and the tax adjustment is provided for our investors to
reflect a more appropriate effective tax rate. This non-GAAP measure
should be used in addition to and not as a substitute for net loss
provided in our Consolidated Statements of Operations. We believe
that this non-GAAP measure is useful because it is consistent with
our internal presentation and allows investors to more easily compare
our ongoing operations and financial performance from period to
period.
Loss per share (EPS) before special items - is defined as diluted EPS
calculated based on the net loss before special items. This non-GAAP
measure should be used in addition to and not as a substitute for our
loss per share calculated in accordance with GAAP as provided in the
Consolidated Statements of Operations. We believe that this non-GAAP
measure is useful because it is consistent with our internal
presentation and allows investors to more easily compare our EPS from
ongoing operations and financial performance from period to period.
-------------------------------------------------------------------------
Three Months Ended
September 30, 2008 Operating Net
(unaudited, in millions (loss) (loss)
except per share amounts) income income EPS
-------------------------------------------------------------------------
-------------------------------------------------------------------------
GAAP as reported $ (159) $ (302) $ (5.23)
Adjustments for special items:
Sale of assets (5) (3) (0.05)
Severance 7 6 0.10
Closure costs, impairment and
other related charges 148 148 2.57
Foreign exchange - (18) (0.32)
Tax adjustments - 65 1.12
-------------------------------------
GAAP as adjusted for special items $ (9) $ (104) $ (1.81)
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Three Months Ended June 30, 2008 Operating Net
(unaudited, in millions (loss) (loss)
except per share amounts) income income EPS
-------------------------------------------------------------------------
-------------------------------------------------------------------------
GAAP as reported $ (63) $ (251) $ (4.36)
Adjustments for special items:
Sale of assets (17) (11) (0.19)
Severance 17 16 0.28
Closure costs, impairment and
other related charges 13 13 0.23
Foreign exchange - 11 0.19
Tax adjustments - 72 1.25
-------------------------------------
GAAP as adjusted for special items $ (50) $ (150) $ (2.60)
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Three Months Ended March 31, 2008 Operating Net
(unaudited, in millions (loss) (loss)
except per share amounts) income income EPS
-------------------------------------------------------------------------
-------------------------------------------------------------------------
GAAP as reported $ (149) $ (248) $ (4.32)
Adjustments for special items:
Sale of assets (23) (16) (0.27)
Severance 8 7 0.13
Closure costs, impairment and
other related charges 10 10 0.17
Foreign exchange - (44) (0.77)
Tax adjustments - 76 1.32
-------------------------------------
GAAP as adjusted for special items $ (154) $ (215) $ (3.74)
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(8) A reconciliation of our operating income (loss) reported under GAAP
to our use of the non-GAAP measure of EBITDA by reportable segment is
presented in the tables below. EBITDA by reportable segment is
defined as operating income (loss) from our Consolidated Statements
of Operations, allocated to our reportable segments (newsprint,
coated papers, specialty papers, market pulp and wood products) in
accordance with SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information," adjusted by depreciation,
amortization and cost of timber harvested. We believe that this non-
GAAP measure allows investors to more easily compare the ongoing
operations and financial performance of our reportable segments from
period to period. Internally, we use this EBITDA by reportable
segment measure as an indicator of a reportable segment's
performance. Therefore, this non-GAAP measure is consistent with our
internal presentation. We believe that this non-GAAP measure is
useful because it is consistent with our internal presentation and
performance analysis and allows investors to more easily compare our
ongoing financial performance from period to period. This non-GAAP
measure should be used in addition to and not as a substitute for
operating income (loss) by reportable segment provided in the notes
to our Consolidated Financial Statements in our quarterly filings
with the Securities and Exchange Commission.
-------------------------------------------------------------------------
Depreciation,
amortization
Three Months Ended and cost EBITDA by
September 30, 2008 Operating of timber Reportable
(unaudited, in millions) (loss) income harvested Segment
-------------------------------------------------------------------------
-------------------------------------------------------------------------
GAAP as reported $ (159) $ 184
Allocated to reportable segments:
Newsprint 28 82 $ 110
Coated papers 30 9 39
Specialty papers 7 66 73
Market pulp 6 13 19
Wood products (10) 11 1
Corporate and other (220) 3
--------------------------
GAAP as reported $ (159) $ 184
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Depreciation,
amortization
Three Months Ended and cost EBITDA by
June 30, 2008 Operating of timber Reportable
(unaudited, in millions) (loss) income harvested Segment
-------------------------------------------------------------------------
-------------------------------------------------------------------------
GAAP as reported $ (63) $ 187
Allocated to reportable segments:
Newsprint 1 80 $ 81
Coated papers 35 10 45
Specialty papers (32) 69 37
Market pulp 21 13 34
Wood products (13) 11 (2)
Corporate and other (75) 4
--------------------------
GAAP as reported $ (63) $ 187
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Depreciation,
amortization
Three Months Ended and cost EBITDA by
March 31, 2008 Operating of timber Reportable
(unaudited, in millions) (loss) income harvested Segment
-------------------------------------------------------------------------
-------------------------------------------------------------------------
GAAP as reported $ (149) $ 191
Allocated to reportable segments:
Newsprint (69) 83 $ 14
Coated papers 34 10 44
Specialty papers (39) 69 30
Market pulp 31 14 45
Wood products (35) 11 (24)
Corporate and other (71) 4
--------------------------
GAAP as reported $ (149) $ 191
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