- Earnings of $0.23 per share;
$0.07 excluding special
items
- Adjusted EBITDA of $71
million
- Net debt of $210
million
US $
MONTREAL,
May 1, 2012 /PRNewswire/ -
AbitibiBowater Inc., doing business as Resolute Forest Products
(NYSE: ABH) (TSX: ABH), today reported net income of $23 million for the first quarter, or
$0.23 per share, on sales of
$1.1 billion. This compares with net
income of $30 million, or
$0.31 per share, on sales of
$1.2 billion in the first quarter of
2011.
Excluding $16
million of special items described below, net income for the
quarter was $7 million, or
$0.07 per share. Net income
excluding special items for the first quarter of 2011 was
$10 million, or $0.10 per share.
"Our balance sheet continued to strengthen
despite seasonal softness and market headwinds," said Richard Garneau, president and chief executive
officer. "We demonstrated the discipline that sets us apart
by taking market-related downtime to control finished goods
inventory and by advancing annual pulp mill major maintenance to
the first quarter from the second."
DESCRIPTION OF SPECIAL ITEMS
Special items incurred in the first quarter of 2012, net of tax,
included:
- $15 million non-cash gain on
translation of Canadian dollar net monetary assets
- $12 million gain on disposition
of assets
- $4 million charge related to
closure costs, impairment and other related charges
- $4 million of transaction costs
related to the acquisition of Fibrek
- $3 million non-cash charge
related to reorganization tax adjustments
- Income from other items, offset by a severance charge and
post-emergence costs
Special items incurred in the first quarter of 2011, net of tax,
included:
- $29 million non-cash gain on
translation of Canadian dollar net monetary assets
- $10 million non-cash income
related to reorganization tax adjustments
- $9 million charge related to
closure costs, impairment and other related charges
- $8 million charge for
post-emergence costs
- $3 million severance charge
- $1 million income, net, from a
gain on disposition of assets, a charge for inventory write-downs
and other income
Non-GAAP financial measures, such as adjustments for special
items, are reconciled below.
SEGMENT DETAILS
Newsprint
The newsprint segment generated operating income of $21 million, a $5
million decrease from the fourth quarter of 2011. The
decrease reflects a 9% seasonal reduction in shipments and the
stronger Canadian dollar, largely offset by lower input costs,
mainly recovered paper and power. The average transaction
price remained unchanged and inventories were stable as the Company
took 85,000 metric tons of production downtime.
Coated Papers
Operating income in the coated papers segment was $14 million lower in the first quarter than in
the previous quarter, resulting in an operating loss of
$1 million. Shipments were stable but
the average transaction price declined approximately $30 per short ton on weaker market
conditions. Costs increased by $56 per short ton, primarily as a result of the
annual maintenance outage in Catawba,
South Carolina.
Specialty Papers
The specialty papers segment generated operating income of
$15 million, down from $24 million in the previous quarter.
Shipments were down 13% from the seasonally stronger fourth quarter
and operating costs were higher due to a stronger Canadian dollar,
offset in part by lower maintenance costs. The average
transaction price remained stable, notwithstanding a decline in
market demand to which the Company responded with approximately
36,000 metric tons of production downtime.
Market Pulp
Operating loss in the market pulp segment was $21 million, compared to operating income of
$12 million in the previous quarter.
The average transaction price continued its downward trend, falling
another $38 per metric ton in the
first quarter. Results also included an $11 million charge for annual maintenance outages
at two mills, including one advanced from a later quarter in light
of softer demand. Shipments were essentially unchanged from
the fourth quarter as the Company took production downtime of over
77,000 metric tons.
Wood Products
The wood products segment reported an operating loss of
$6 million in the first quarter,
compared to a loss of $5 million in
the fourth quarter. Shipments decreased by 8% over the same period,
offsetting the $24 increase in
average transaction price.
Corporate
Operating income in the corporate segment included a
$9 million refund of certain group
benefit premiums paid in prior years.
OUTLOOK
"Our outlook for newsprint remains the same: despite modest
secular decline in North America,
we expect stable pricing, with continued weakness in Asian and
European markets as long as the combination of lower ONP prices, a
strong U.S. dollar and weaker euro continues," said Mr.
Garneau. "We remain somewhat cautious in our outlook for pulp
over the balance of the year, and we plan to complete the bulk of
annual pulp mill maintenance in the second quarter. Pricing
pressure in the specialty grades is building as a result of weak
demand, especially in high gloss grades, but we expect the coated
segment to recover as a result of recent price increase
announcements by us and a number of our competitors. For
their part, lumber markets are starting to reflect the gradual
improvement in U.S. housing starts."
EARNINGS CONFERENCE CALL
The Company will hold a conference call to discuss the financial
results at 9:00 a.m. (ET)
today. The public is invited to join the call at (866)
696-5910 (pass code 626674) at least fifteen minutes before its
scheduled start time. A simultaneous webcast will also be
available using the link provided under "Presentations and
Webcasts" in the "Investors" section of www.resolutefp.com. A
replay of the webcast will be archived on the Company's
website. A phone replay will also be available until
May 15 by dialing (800) 408-3053 with
the pass code 9217638.
ABOUT RESOLUTE FOREST PRODUCTS
Resolute Forest Products is a global leader in the forest
products industry with a diverse range of products, including
newsprint, commercial printing papers, market pulp and wood
products. The Company owns or operates 18 pulp and paper mills and
23 wood products facilities in the United
States, Canada and
South Korea. Marketing its
products in close to 90 countries, Resolute Forest Products has
third-party certified 100% of its managed woodlands to sustainable
forest management standards. The shares of Resolute Forest
Products, formerly doing business as AbitibiBowater, trade under
the stock symbol ABH on both the New York Stock Exchange and the
Toronto Stock Exchange.
Resolute and other member companies of the Forest Products
Association of Canada, as well as
a number of environmental organizations, are partners in the
Canadian Boreal Forest Agreement. The group works to identify
solutions to conservation issues that meet the goal of balancing
equally the three pillars of sustainability linked to human
activities: economic, social and environmental. Resolute is also a
member of the World Wildlife Fund's Climate Savers program, in
which businesses establish ambitious targets to voluntarily reduce
greenhouse gas emissions and work aggressively toward achieving
them.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING
INFORMATION
Statements in this press release and the earnings conference
call referred to above that are not reported financial results or
other historical information of AbitibiBowater Inc., doing business
as Resolute Forest Products, are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. They include, for example, statements relating to our:
efforts to continue to reduce costs and increase revenues and
profitability, including our cost-reduction initiatives regarding
selling, general and administrative expenses; fourth quarter and
full year business and operating outlook; assessment of market
conditions; prospects, growth strategies and the industry in which
we operate; and 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," "will," "may," "expect," "believe," "anticipate,"
"attempt," "project" and other terms with similar meaning
indicating possible future events or potential impact on our
business or Resolute's shareholders.
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. The potential risks and
uncertainties that could cause Resolute's actual future financial
condition, results of operations and performance to differ
materially from those expressed or implied in the presentation
referred to above include, but are not limited to, the potential
risks and uncertainties set forth under the heading "Risk Factors"
in Part I, Item 1A of Resolute's annual report on Form 10-K for the
year ended December 31, 2011, filed
with the United States Securities and Exchange Commission and
Resolute's other filings with the Canadian securities regulatory
authorities.
All forward-looking statements in the presentation referred to
above are expressly qualified by the cautionary statements
contained or referred to above and in Resolute's other filings with
the SEC and the Canadian securities regulatory authorities.
Resolute disclaims any obligation to publicly update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, except as required by
law.
ABITIBIBOWATER INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in millions except per share amounts)
|
|
|
|
|
|
|
Three
Months
Ended March 31,
2012 |
|
Three
Months
Ended March 31,
2011 |
|
|
|
|
|
|
Sales |
$ |
1,054 |
|
$ |
1,185 |
Costs and expenses: |
|
|
|
|
|
|
Cost of sales, excluding depreciation,
amortization and cost
of timber harvested |
|
836 |
|
|
922 |
|
Depreciation, amortization and cost of timber
harvested |
|
57 |
|
|
54 |
|
Distribution costs |
|
121 |
|
|
133 |
|
Selling, general and administrative expenses |
|
32 |
|
|
37 |
|
Closure costs, impairment and other related
charges (1) |
|
5 |
|
|
13 |
|
Net gain on disposition of assets
(2) |
|
(23) |
|
|
(1) |
|
|
|
|
|
|
Operating income |
|
26 |
|
|
27 |
|
|
|
|
|
|
Other (expense) income: |
|
|
|
|
|
|
Interest expense |
|
(16) |
|
|
(30) |
|
Foreign currency translation gain
(3) |
|
12 |
|
|
28 |
|
Other, net |
|
1 |
|
|
(9) |
|
|
|
|
|
|
Income before income taxes |
|
23 |
|
|
16 |
|
|
|
|
|
|
Income tax benefit
(4) |
|
10 |
|
|
14 |
|
|
|
|
|
|
Net income including noncontrolling
interests |
|
33 |
|
|
30 |
Net income attributable to
noncontrolling interests |
|
(10) |
|
|
- |
|
|
|
|
|
|
Net income attributable to
AbitibiBowater Inc. |
$ |
23 |
|
$ |
30 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share attributable to
AbitibiBowater Inc.
common shareholders: (5) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.23 |
|
$ |
0.31 |
|
Diluted |
$ |
0.23 |
|
$ |
0.31 |
|
|
|
|
|
|
Weighted-average number of
AbitibiBowater Inc. common
shares outstanding: (5) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
97.1 |
|
|
97.1 |
|
Diluted |
|
97.1 |
|
|
97.1 |
ABITIBIBOWATER INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, in millions)
|
|
|
|
|
|
|
March 31,
2012 |
|
December 31,
2011 |
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
410 |
|
$ |
369 |
|
Accounts receivable trade, net |
|
554 |
|
|
582 |
|
Accounts receivable other |
|
136 |
|
|
168 |
|
Inventories, net |
|
501 |
|
|
475 |
|
Assets held for sale
(2) |
|
5 |
|
|
7 |
|
Deferred income tax assets |
|
111 |
|
|
109 |
|
Other current assets |
|
73 |
|
|
59 |
|
|
Total current assets |
|
1,790 |
|
|
1,769 |
Fixed assets, net |
|
2,484 |
|
|
2,502 |
Amortizable intangible assets,
net |
|
18 |
|
|
18 |
Deferred income tax assets |
|
1,787 |
|
|
1,749 |
Other assets |
|
257 |
|
|
260 |
|
Total assets |
$ |
6,336 |
|
$ |
6,298 |
|
|
|
|
|
|
Liabilities and equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable and accrued
liabilities |
$ |
538 |
|
$ |
544 |
|
|
Total current liabilities |
|
538 |
|
|
544 |
Long-term debt, net of current
portion |
|
620 |
|
|
621 |
Pension and other postretirement
benefit obligations |
|
1,534 |
|
|
1,524 |
Deferred income tax liabilities |
|
73 |
|
|
75 |
Other long-term liabilities |
|
57 |
|
|
57 |
|
|
Total liabilities |
|
2,822 |
|
|
2,821 |
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
Common stock |
|
- |
|
|
- |
Additional paid-in capital |
|
3,688 |
|
|
3,687 |
Retained earnings |
|
64 |
|
|
41 |
Accumulated other comprehensive
loss |
|
(308) |
|
|
(311) |
Treasury stock at cost |
|
- |
|
|
- |
|
Total AbitibiBowater Inc.
shareholders' equity |
|
3,444 |
|
|
3,417 |
Noncontrolling interests |
|
70 |
|
|
60 |
|
Total equity |
|
3,514 |
|
|
3,477 |
|
Total liabilities and equity |
$ |
6,336 |
|
$ |
6,298 |
ABITIBIBOWATER INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in millions)
|
|
|
|
|
|
|
Three
Months
Ended March 31,
2012 |
|
Three
Months
Ended March 31,
2011 |
Cash flows from operating
activities: |
|
|
|
|
|
Net income including noncontrolling
interests |
$ |
33 |
|
$ |
30 |
|
Adjustments to reconcile net income
including noncontrolling interests
tonet cash provided by operating activities: |
|
|
|
|
|
|
Share-based compensation |
|
1 |
|
|
- |
|
Depreciation, amortization and cost of
timber harvested |
|
57 |
|
|
54 |
|
Closure costs, impairment and other
related charges |
|
5 |
|
|
13 |
|
Write-downs of inventory |
|
- |
|
|
1 |
|
Deferred income taxes |
|
(14) |
|
|
(13) |
|
Net pension contributions |
|
(18) |
|
|
(19) |
|
Net gain on disposition of assets |
|
(23) |
|
|
(1) |
|
Gain on translation of foreign
currency denominated deferred income
taxes |
|
(30) |
|
|
(37) |
|
Loss on translation of foreign
currency denominated pension and other
postretirement benefit obligations |
|
24 |
|
|
27 |
|
Other, net |
|
6 |
|
|
6 |
|
Changes in working capital: |
|
|
|
|
|
|
|
Accounts receivable |
|
56 |
|
|
20 |
|
|
Inventories |
|
(26) |
|
|
(54) |
|
|
Other current assets |
|
(5) |
|
|
2 |
|
|
Accounts payable and accrued
liabilities |
|
(9) |
|
|
29 |
|
|
|
Net change in working capital |
|
16 |
|
|
(3) |
|
|
Net cash provided by operating
activities |
|
57 |
|
|
58 |
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
Cash invested in fixed assets |
|
(39) |
|
|
(15) |
Disposition of other assets |
|
26 |
|
|
5 |
(Increase) decrease in restricted
cash |
|
4 |
|
|
(2) |
Increase in deposit requirements for
letters of credit, net |
|
(7) |
|
|
(6) |
|
|
Net cash used in investing
activities |
|
(16) |
|
|
(18) |
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
Dividends and distribution to
noncontrolling interests |
|
- |
|
|
(18) |
Acquisition of noncontrolling
interest |
|
- |
|
|
(15) |
|
|
Net cash used in financing
activities |
|
- |
|
|
(33) |
|
|
|
|
|
|
Net increase in cash and cash
equivalents |
|
41 |
|
|
7 |
Cash and cash equivalents: |
|
|
|
|
|
|
|
Beginning of period |
|
369 |
|
|
319 |
|
|
End of period |
$ |
410 |
|
$ |
326 |
ABITIBIBOWATER INC.
STATEMENTS OF OPERATING INCOME AND NET INCOME ADJUSTED FOR
SPECIAL ITEMS
A reconciliation of our operating income, net income and net
income per share reported before special items
is presented in the tables below. See Note 6 to the Unaudited
Consolidated Financial Statement Information regarding our use of
non-GAAP measures.
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
2012
(unaudited, in millions except per share
amounts) |
Operating
income (loss) |
|
Net
(loss)
income |
|
EPS |
|
|
|
|
|
|
|
|
|
GAAP as reported |
$ |
26 |
|
$ |
23 |
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
Adjustments for special items: |
|
|
|
|
|
|
|
|
|
Foreign currency translation gain |
|
- |
|
|
(15) |
|
|
(0.15) |
|
Severance |
|
2 |
|
|
1 |
|
|
0.01 |
|
Closure costs, impairment and other related
charges |
|
5 |
|
|
4 |
|
|
0.04 |
|
Net gain on disposition of assets |
|
(23) |
|
|
(12) |
|
|
(0.12) |
|
Post-emergence costs |
|
- |
|
|
1 |
|
|
0.01 |
|
Transaction costs |
|
4 |
|
|
4 |
|
|
0.04 |
|
Other income, net |
|
- |
|
|
(2) |
|
|
(0.02) |
|
Reorganization tax adjustments |
|
- |
|
|
3 |
|
|
0.03 |
|
|
|
|
|
|
|
|
|
GAAP as adjusted for special
items |
$ |
14 |
|
$ |
7 |
|
$ |
0.07 |
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
2011
(unaudited, in millions except per share
amounts) |
Operating
income (loss)
|
|
Net
(loss)
income
|
|
EPS
|
|
|
|
|
|
|
|
|
|
GAAP as reported |
$ |
27 |
|
$ |
30 |
|
$ |
0.31 |
|
|
|
|
|
|
|
|
|
Adjustments for special items: |
|
|
|
|
|
|
|
|
|
Foreign currency translation gain |
|
- |
|
|
(29) |
|
|
(0.30) |
|
Severance |
|
4 |
|
|
3 |
|
|
0.03 |
|
Closure costs, impairment and other related
charges |
|
13 |
|
|
9 |
|
|
0.09 |
|
Inventory write-downs included in cost of
sales |
|
1 |
|
|
1 |
|
|
0.01 |
|
Net gain on disposition of assets |
|
(1) |
|
|
(1) |
|
|
(0.01) |
|
Post-emergence costs |
|
- |
|
|
8 |
|
|
0.08 |
|
Other income, net |
|
- |
|
|
(1) |
|
|
(0.01) |
|
Reorganization tax adjustments |
|
- |
|
|
(10) |
|
|
(0.10) |
|
|
|
|
|
|
|
|
|
GAAP as adjusted for special
items |
$ |
44 |
|
$ |
10 |
|
$ |
0.10 |
See Notes to the Unaudited Consolidated Financial Statement
Information
ABITIBIBOWATER
INC.
STATEMENTS OF EBITDA AND ADJUSTED EBITDA
A reconciliation of our net income including
noncontrolling interests to EBITDA and Adjusted EBITDA is presented
in the tables below.
See Note 7 to the Unaudited Consolidated Financial Statement
Information regarding our use of non-GAAP measures EBITDA and
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended March 31, 2012
(unaudited, in millions) |
Newsprint |
Coated
papers |
Specialty
papers |
Market
pulp |
Wood
products |
Corporate and
other |
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) including noncontrolling
interests |
$ |
21 |
$ |
(1) |
$ |
15 |
$ |
(21) |
$ |
(6) |
$ |
25 |
$ |
33 |
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
16 |
|
16 |
Income tax benefit |
|
|
|
|
|
|
|
|
|
|
|
(10) |
|
(10) |
Depreciation, amortization and cost of timber
harvested |
|
18 |
|
10 |
|
12 |
|
8 |
|
9 |
|
- |
|
57 |
EBITDA |
|
39 |
|
9 |
|
27 |
|
(13) |
|
3 |
|
31 |
|
96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation gain |
|
|
|
|
|
|
|
|
|
|
|
(12) |
|
(12) |
Severance |
|
|
|
|
|
|
|
|
|
|
|
2 |
|
2 |
Closure costs, impairment and other related
charges |
|
|
|
|
|
|
|
|
|
|
|
5 |
|
5 |
Net gain on disposition of assets |
|
|
|
|
|
|
|
|
|
|
|
(23) |
|
(23) |
Post-emergence costs |
|
|
|
|
|
|
|
|
|
|
|
2 |
|
2 |
Transaction costs |
|
|
|
|
|
|
|
|
|
|
|
4 |
|
4 |
Other income, net |
|
|
|
|
|
|
|
|
|
|
|
(3) |
|
(3) |
Adjusted EBITDA |
$ |
39 |
$ |
9 |
$ |
27 |
$ |
(13) |
$ |
3 |
$ |
6 |
$ |
71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March
31, 2011
(unaudited, in millions) |
Newsprint |
Coated
papers |
Specialty
papers |
Market
pulp |
Wood
products |
Corporate and
other |
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) including noncontrolling
interests |
$ |
19 |
$ |
3 |
$ |
- |
$ |
23 |
$ |
(3) |
$ |
(12) |
$ |
30 |
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
30 |
|
30 |
Income tax benefit |
|
|
|
|
|
|
|
|
|
|
|
(14) |
|
(14) |
Depreciation, amortization and cost of timber
harvested |
|
20 |
|
9 |
|
11 |
|
7 |
|
7 |
|
1 |
|
55 |
EBITDA |
|
39 |
|
12 |
|
11 |
|
30 |
|
4 |
|
5 |
|
101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation gain |
|
|
|
|
|
|
|
|
|
|
|
(28) |
|
(28) |
Severance |
|
|
|
|
|
|
|
|
|
|
|
4 |
|
4 |
Closure costs, impairment and other related
charges |
|
|
|
|
|
|
|
|
|
|
|
13 |
|
13 |
Inventory write-downs included in cost of
sales |
|
|
|
|
|
|
|
|
|
|
|
1 |
|
1 |
Net gain on disposition of assets |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
(1) |
Post-emergence costs |
|
|
|
|
|
|
|
|
|
|
|
11 |
|
11 |
Other income, net |
|
|
|
|
|
|
|
|
|
|
|
(2) |
|
(2) |
Adjusted EBITDA |
$ |
39 |
$ |
12 |
$ |
11 |
$ |
30 |
$ |
4 |
$ |
3 |
$ |
99 |
See Notes to the Unaudited Consolidated Financial Statement
Information
ABITIBIBOWATER INC.
Notes to the Unaudited Consolidated Financial Statement
Information
1. |
Closure costs, impairment and other related charges for the
three months ended March 31, 2012 and 2011 were comprised of the
following: |
|
|
|
|
|
|
|
Three Months Ended
March 31, |
(In millions) |
|
2012 |
|
2011 |
Accelerated depreciation |
$ |
- |
$ |
1 |
Impairment of long-lived assets |
|
- |
|
7 |
Severance and other costs |
|
5 |
|
5 |
|
$ |
5 |
$ |
13
|
|
Severance and other costs
During the three months ended March 31, 2012, we recorded $2
million of severance costs and a $2 million pension curtailment
loss as a result of a workforce reduction at our Baie-Comeau,
Quebec paper mill, as well as a $1 million credit for severance
costs and a $2 million pension curtailment loss related to the
permanent closure in December, 2011 of a paper machine at our
Kenogami, Quebec paper mill. |
|
|
2.
|
During the three months ended March 31, 2012, we sold a portion
of our Mersey timberlands in Nova Scotia and various other assets
for proceeds of $26 million, resulting in a net gain on disposition
of assets of $23 million.
As of March 31, 2012, we held for sale the following assets: our
Petit Saguenay sawmill and a parcel of land. The assets held for
sale are carried in our Consolidated Balance Sheets as of March 31,
2012 and December 31, 2011 at the lower of carrying value or fair
value less costs to sell. We expect to complete a sale of all of
these assets within the next twelve months for amounts that equal
or exceed their individual carrying values. |
|
|
3.
|
During the three months ended March 31, 2012, we recorded a
foreign currency translation gain of $12 million. This gain is a
result of the stronger Canadian dollar relative to the U.S. dollar
at March 31, 2012 and its impact on the translation of our Canadian
dollar net monetary assets in the Company's principal Canadian
operating subsidiary. During the three months ended March 31, 2011,
we recorded a foreign currency translation gain of $28 million as a
result of the translation of our Canadian dollar balance sheet
amounts. |
|
|
4. |
During the three months ended March 31, 2012, an income tax
benefit of $10 million was recorded. The benefit is primarily
attributable to favorable adjustments related to research and
development tax incentives as well as foreign exchange related
items, offset by an unfavorable reorganization-related adjustment.
During the three months ended March 31, 2011, an income tax benefit
of $14 million was recorded. The benefit recorded included a
favorable $10 million reorganization-related adjustment. |
|
|
5. |
For the calculation of basic and diluted income per share for
the three months ended March 31, 2012 and 2011, no adjustments to
net income attributable to AbitibiBowater were necessary. |
|
|
6.
|
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 income
(loss) and net income (loss) per share reported before special
items is presented. 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 income (loss) and net income
(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 costs, gains and losses on
dispositions of assets and other charges or credits that are
excluded from our segment's performance 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.
Net income (loss) before special items - is defined as net income
(loss) from our Consolidated Statements of Operations adjusted for
the special items discussed above plus the effects of foreign
currency translation as well as post-emergence costs and
reorganization tax adjustments. The adjustment for these
items is consistent with our internal presentation. This non-GAAP
measure should be used in addition to and not as a substitute for
net income (loss) provided in our Consolidated Statements of
Operations.
Net income (loss) per share (EPS) before special items - is defined
as diluted EPS calculated based on the net income (loss) before
special items. This non-GAAP measure should be used in
addition to and not as a substitute for our net income (loss) per
share calculated in accordance with GAAP as provided in the
Consolidated Statements of Operations.
We believe that these non-GAAP measures are useful because they are
consistent with our internal presentation and allow investors to
more easily compare our ongoing operations, financial performance
and EPS from period to period. |
|
|
7.
|
A reconciliation of our net income (loss) including
noncontrolling interests reported under GAAP to our use of the
non-GAAP measure of EBITDA and Adjusted EBITDA by reportable
segment is presented. EBITDA by reportable segment is defined
as net income (loss) including noncontrolling interests from our
Consolidated Statements of Operations, allocated to our reportable
segments (newsprint, coated papers, specialty papers, market pulp
and wood products) in accordance with FASB ASC 290, "Segment
Reporting," adjusted by depreciation, amortization and cost of
timber harvested. In addition, EBITDA for the Corporate and
Other segment is defined as net income (loss) including
noncontrolling interests from our Consolidated Statements of
Operations after allocation to our reportable segments, adjusted by
interest expense, income taxes and depreciation, amortization and
cost of timber harvested.
We define Adjusted EBITDA as EBITDA adjusted for special items as
discussed in Note 6. Internally, we use Adjusted EBITDA as an
indicator of our performance. Therefore, this non-GAAP
measure is consistent with our internal presentation.
Internally, we use EBITDA and adjusted EBITDA by reportable segment
measures as indicators of our reportable segments' and the
Company's performance. Therefore, these non-GAAP measures are
consistent with our internal presentation. We believe that
these non-GAAP measures are useful because they are consistent with
our internal presentation and performance analysis and allow
investors to more easily compare our ongoing financial performance
from period to period. These non-GAAP measures should be used
in addition to and not as a substitute for operating income (loss)
by reportable segment and consolidated operating income (loss)
provided in the notes to our Consolidated Financial Statements in
our filings with the Securities and Exchange Commission. |
SOURCE RESOLUTE FOREST PRODUCTS