Boise Inc. Announces Financial Results for Fourth Quarter and Year-End 2009
BOISE, Idaho, Feb. 25 /PRNewswire-FirstCall/ -- Boise Inc. (NYSE: BZ) today reported net income of $55.7 million or $0.66 per diluted share for fourth quarter 2009, compared with fourth quarter 2008 net loss of $15.5 million or ($0.20) per diluted share. Net income for 2009 was $153.8 million or $1.85 per diluted share. Net income excluding special items in fourth quarter 2009 was $4.2 million, or $0.05 per diluted share.
EBITDA excluding special items was $54.4 million for fourth quarter 2009 compared with $76.0 million for fourth quarter 2008. EBITDA excluding special items for 2009 was $232.1 million compared with $247.1 million for combined 2008. Net total debt at December 31, 2009, was $736.5 million, compared with $1,081.5 million at December 31, 2008.
FINANCIAL HIGHLIGHTS
(in millions, except per-share data)
Boise Inc. Combined Predecessor Boise Inc.
-------------------------------- -------- ----------- ----------
4Q 2009 4Q 2008 3Q 2009 2009 2008 2008 2008
------- ------- ------- ---- ---- ---- ----
Sales $490.3 $591.1 $508.3 $1,978.2 $2,430.6 $359.9 $2,070.6
Net income
(loss) $55.7 $(15.5) $48.2 $153.8 $22.8 $(45.5)
Net income
(loss) per
diluted
share $0.66 $(0.20) $0.57 $1.85 N/A $(0.62)
Net income
(loss)
excluding
special items
(a) $4.2 $5.7 $10.3 $20.4 N/A $2.1
Net income
(loss)
excluding
special items
per diluted
share(a) $0.05 $0.07 $0.12 $0.25 N/A $0.03
EBITDA (b) $84.3 $41.4 $128.0 $395.7 $168.8 $23.7 $145.1
EBITDA
excluding
special
items (b) $54.4 $76.0 $66.2 $232.1 $247.1 $24.4 $222.8
Net total
debt $736.5 $1,081.5 $781.9
Free cash
flow (c) $75.5 $7.7 $121.2 $381.6 $3.9
(a) For reconciliation of net income (loss) excluding special items to net
income (loss), see "Summary Notes to Consolidated Financial Statements
and Segment Information."
(b) For reconciliation of net income (loss) to EBITDA and EBITDA to EBITDA
excluding special items, see "Summary Notes to Consolidated Financial
Statements and Segment Information."
(c) Cash provided by (used for) operations less expenditures for property
and equipment.
"Against a very difficult backdrop, our performance was strong in 2009, and we accomplished many of our objectives," said Alexander Toeldte, President and Chief Executive Officer of Boise Inc. "We ran well and had one of our safest years on record. In 2009, we generated $382 million in free cash flow, extracted $92 million in cash through working capital reductions, and reduced our net total debt by $345 million, a 32% reduction from the end of 2008. We reduced our interest costs and extended debt maturities through the refinancing we completed in October. We continued to shift production capacity to packaging demand-driven and office paper products and lowered our structural costs through difficult but necessary asset portfolio moves at our St. Helens and DeRidder mills. And, we grew sales volumes of our label and release, flexible packaging, and premium office grades 4% over 2008 through some of the most challenging markets we've experienced. I am proud of what we've accomplished, and we look forward to building on these successes in 2010."
Sales
Total sales for fourth quarter 2009 were $490.3 million, a decrease of $100.8 million, or 17%, from $591.1 million for fourth quarter 2008 and down 4% from third quarter 2009 sales of $508.3 million.
Paper segment sales decreased 11% during fourth quarter 2009 compared with fourth quarter 2008, driven by lower sales volumes and prices. In first quarter 2009, we completed the downsizing of our mill in St. Helens, Oregon, which eliminated 13% of our annual uncoated freesheet capacity and reduced 2009 sales volumes and costs compared with 2008.
Packaging segment sales decreased 30% during fourth quarter 2009 compared with fourth quarter 2008, driven by lower sales volumes of newsprint due to the indefinite idling of our DeRidder #2 newsprint machine and lower sales prices of packaging products. These declines were offset partially by higher sales volumes of linerboard.
Full year 2009 sales were $2.0 billion, a 19% decrease over combined year 2008 sales of $2.4 billion. The decrease was driven primarily by a 14% decrease in Paper segment sales due to lower sales volumes, offset partially by higher sales prices for uncoated freesheet papers, and a 28% decline in Packaging segment sales due to lower sales prices and lower newsprint sales volumes.
Prices and Volumes
Pricing for uncoated freesheet began to improve late in 2009 and in early 2010 after declining through the year. Average net selling prices of uncoated freesheet papers declined $34 per ton, or 4%, to $935 per ton during fourth quarter 2009 compared with fourth quarter 2008 and decreased 1% from third quarter 2009. In fourth quarter 2009, we implemented a $40-per-ton price increase on our offset and envelope grades and on some premium colored office papers. In January 2010, we announced a $40-per-ton price increase across most of our cut-size office papers, offset, and mid-weight opaque grades effective in mid-February. Overall, uncoated freesheet sales volumes were 309,000 tons during fourth quarter, a decline of 7% versus the prior year period, and down 5% from third quarter 2009 due primarily to seasonal demand declines. Full year net selling prices for uncoated freesheet improved $24 per ton, or 3%, to $954 per ton in 2009 compared with 2008. Full year sales volumes of uncoated freesheet papers were 1.3 million tons in 2009, down 13% compared with the same period in 2008. Combined sales volumes of premium office, label and release, and flexible packaging papers, which represented 27% of our total 2009 uncoated freesheet sales volumes, increased by 4% from the prior year.
Corrugated containers and sheets sales volumes improved 2% during fourth quarter 2009 compared with fourth quarter 2008 and were flat from third quarter 2009. Full year corrugated container and sheet volumes decreased 5% to 6.0 billion square feet in 2009 compared with 2008, driven mainly by lower volumes from our sheet feeder plant in Texas as a result of slowing industrial markets. Corrugated container and sheet prices declined 11% in fourth quarter 2009 from fourth quarter 2008 and decreased 7% from third quarter 2009 prices due to seasonal box mix fluctuations in our agricultural end markets and containerboard price declines earlier in the year. Full year corrugated container and sheet prices improved 2% in 2009 compared with 2008.
Linerboard sales volumes to third parties increased 55% compared with fourth quarter 2008 and increased 9% from third quarter 2009 due to improving market conditions. Full year linerboard sales volumes to third parties were 253,000 tons in 2009, a 10% increase compared with 2008. Linerboard net selling prices to third parties declined to $293 per ton in fourth quarter 2009 from $406 per ton in fourth quarter 2008 and improved 3% from third quarter 2009, as demand in export markets improved. Full year net selling prices for linerboard sales to third parties decreased $96 per ton, or 24%, to $301 per ton in 2009 compared with 2008. In January 2010, we announced a $50-per-ton and $70-per-ton price increase on domestic sales in the eastern and western U.S., respectively. These price increases are currently being implemented.
Input Costs
Total fiber, energy, and chemical costs for fourth quarter 2009 were $205.0 million, a decrease of $62.0 million, or 23%, from costs of $267.0 million for fourth quarter 2008. Much of the decline was driven by reduced consumption as a result of the restructuring of our mill in St. Helens, Oregon, and the idling of our #2 machine at our mill in DeRidder, Louisiana. Input costs were flat compared with third quarter 2009. Full year 2009 fiber, energy, and chemical costs totaled $800.3 million, a decrease of $332.5 million, or 29%, from costs of $1,132.8 million for full year 2008.
INPUT COST SUMMARY
(in millions)
------- ------- ------- ---- Combined
4Q 2009 4Q 2008 3Q 2009 2009 2008
------- ------- ------- ---- ----
Fiber $106.5 $124.0 $108.2 $401.1 $530.0
Energy $45.7 $77.5 $41.9 $188.9 $340.2
Chemicals $52.8 $65.5 $55.7 $210.3 $262.6
Total $205.0 $267.0 $205.8 $800.3 $1,132.8
Total fiber costs during fourth quarter 2009 were $106.5 million, a decrease of $17.5 million, or 14%, from $124.0 million incurred in fourth quarter 2008. This was due to lower fiber prices and reduced consumption of fiber as a result of lower production capacity and was offset partially by higher purchased pulp consumption. Fiber costs in fourth quarter 2009 declined $1.7 million, or 2%, from third quarter 2009. Full year 2009 fiber costs were $401.1 million, a decrease of $128.9 million, or 24%, from costs of $530.0 million for combined 2008, due primarily to lower prices and consumption of fiber.
Energy costs in fourth quarter 2009 were $45.7 million, a decrease of $31.8 million, or 41%, compared with $77.5 million in fourth quarter 2008, driven by lower prices for natural gas and electricity and reduced consumption of energy. Energy costs in fourth quarter 2009 increased $3.8 million, or 9%, from $41.9 million in third quarter 2009, due to higher prices for natural gas and seasonal increases in consumption as a result of colder winter weather. Full year 2009 energy costs were $188.9 million, a decrease of $151.3 million, or 44%, from costs of $340.2 million for combined 2008, driven by reduced prices and consumption of natural gas and electricity.
Chemical costs in fourth quarter 2009 were $52.8 million, a decrease of $12.7 million, or 19%, compared with $65.5 million in fourth quarter 2008. Chemical costs were down $2.8 million, or 5%, compared with $55.7 million in third quarter 2009. Full year 2009 chemical costs were $210.3 million, a decrease of $52.3 million, or 20%, from $262.6 million for combined 2008. The key drivers were lower prices and generally lower consumption of commodity chemicals.
Alternative Fuel Mixture Credit
During the three months and year ended December 31, 2009, we recorded $72.7 million and $207.6 million, respectively, of alternative fuel mixture credits, net of associated fees and expenses and before taxes. As of December 31, 2009, we recorded a receivable of $56.6 million for alternative fuel mixture credits. These credits expired on December 31, 2009.
In October 2009, we began filing for alternative fuel mixture credits as a refundable credit on our income tax return instead of as a refundable excise tax credit. This filing change will not affect the total amount we expect to ultimately receive but does delay receipt of fuel mixture credit payments until after we file our federal income tax return in first quarter 2010.
Extinguishment of Debt
In connection with the debt restructuring in October 2009, we recognized a $44.1 million loss on the extinguishment of debt during the three months ended December 31, 2009.
Income Tax Benefit
During the three months ended December 31, 2009, we reversed income tax valuation allowances of $33.2 million.
Webcast and Conference Call
Boise Inc. will host a webcast and conference call on Thursday, February 25, 2010, at 11:00 a.m. EST, at which time we will review the company's recent performance. To participate in the conference call, dial 866-841-1001 (international callers should dial 832-4451689). The webcast may be accessed through Boise's Internet site and will be archived for one year following the call. Go to www.BoiseInc.com and click on the link to the webcast under Webcasts & Presentations on the Investors drop-down menu.
A replay of the conference call will be available in Webcasts & Presentations from February 25 at 2:00 p.m. EST through March 25 at 11:45 p.m. EDT. Playback numbers are 800-642-1687 for U.S. callers and 706-645-9291 for international callers. The passcode is 56233892.
Annual Meeting Date
Boise Inc. intends to hold its annual meeting of shareholders at 10:00 a.m. MDT on Thursday, April 29, 2010, in Boise, Idaho. The record date to determine shareholders eligible to vote at the meeting is March 12, 2010.
About Boise Inc.
Headquartered in Boise, Idaho, Boise Inc. (NYSE: BZ) manufactures packaging products and papers including corrugated containers, containerboard, label and release and flexible packaging papers, imaging papers for the office and home, printing and converting papers, newsprint, and market pulp. Our entire team of approximately 4,100 employees is committed to delivering excellent value while managing our businesses to sustain environmental resources for future generations. Visit our Web site at www.BoiseInc.com.
Basis of Presentation
We present our consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP). Our earnings release also supplements the GAAP presentations by reflecting EBITDA. EBITDA represents income (loss) before interest (change in fair value of interest rate derivatives, interest expense, and interest income), income taxes, and depreciation, amortization, and depletion. EBITDA is the primary measure used by our chief operating decision makers to evaluate segment operating performance and to decide how to allocate resources to segments. We believe EBITDA is useful to investors because it provides a means to evaluate the operating performance of our segments and our company on an ongoing basis using criteria that are used by our internal decision makers and because it is frequently used by investors and other interested parties in the evaluation of companies with substantial financial leverage. We believe EBITDA is a meaningful measure because it presents a transparent view of our recurring operating performance and allows management to readily view operating trends, perform analytical comparisons, and identify strategies to improve operating performance. For example, we believe that the inclusion of items such as taxes, interest expense, and interest income distorts management's ability to assess and view the core operating trends in our segments. EBITDA, however, is not a measure of our liquidity or financial performance under GAAP and should not be considered as an alternative to net income (loss), income (loss) from operations, or any other performance measure derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity. The use of EBITDA instead of net income (loss) or segment income (loss) has limitations as an analytical tool, including the inability to determine profitability; the exclusion of interest and associated significant cash requirements; and the exclusion of depreciation, amortization, and depletion, which represent significant and unavoidable operating costs, given the level of our indebtedness and the capital expenditures needed to maintain our businesses. Management compensates for these limitations by relying on our GAAP results. Our measures of EBITDA are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation.
Forward-Looking Statements
This news release contains statements that are "forward looking" as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements. Forward-looking statements involve risks and uncertainties, including but not limited to economic, competitive, and technological factors outside our control that may cause our business, strategy, or actual results to differ materially from the forward-looking statements. For further information about the risks and uncertainties associated with our business, please refer to our filings with the Securities and Exchange Commission. The company does not intend, and undertakes no obligation, to update any forward-looking statements.
Boise Inc.
Consolidated Statements of Income (Loss)
(unaudited, in thousands, except share and per-share data)
Three Months Ended
------------------------------------
December 31
---------------- September 30,
2009 2008 2009
---- ---- ----
Sales
Trade $481,853 $566,671 $498,812
Related parties 8,422 24,448 9,453
----- ------ -----
490,275 591,119 508,265
------- ------- -------
Costs and expenses
Materials, labor, and other
operating expenses 395,455 490,576 401,607
Fiber costs from related
parties 11,897 7,771 10,325
Depreciation, amortization,
and depletion 33,720 33,126 32,916
Selling and distribution
expenses 14,130 13,715 13,588
General and administrative
expenses 14,373 7,556 12,813
St. Helens mill
restructuring (378) 29,780 1,402
Alternative fuel mixture
credits, net (72,698) - (59,572)
Other (income) expense, net (378) (2,820) 1,710
---- ------ -----
396,121 579,704 414,789
------- ------- -------
Income from operations 94,154 11,415 93,476
------ ------ ------
Foreign exchange gain (loss) 563 (3,185) 1,597
Change in fair value of
interest rate derivatives (52) (683) 125
Loss on extinguishment of
debt (44,102) - -
Interest expense (18,284) (26,156) (21,436)
Interest income 92 94 130
--- --- ---
(61,783) (29,930) (19,584)
------- ------- -------
Income (loss) before income
taxes 32,371 (18,515) 73,892
Income tax (provision)
benefit 23,349 3,030 (25,737)
------ ----- -------
Net income (loss) $55,720 $(15,485) $48,155
======= ======== =======
Weighted average common
shares outstanding:
Basic 79,130,897 77,260,274 78,634,920
Diluted 84,232,429 77,260,274 84,240,582
Net income (loss)
per common share:
Basic $0.70 $(0.20) $0.61
Diluted $0.66 $(0.20) $0.57
Segment Information
(unaudited, in thousands)
Three Months Ended
---------------------------------
December 31
-------------- September 30,
2009 2008 2009
---- ---- ----
Segment sales
Paper $345,602 $389,644 $365,963
Packaging 150,574 213,788 150,462
Intersegment eliminations
and other (5,901) (12,313) (8,160)
------ ------- ------
$490,275 $591,119 $508,265
======== ======== ========
Segment income (loss)
Paper (1) $75,112 $(12,303) $78,272
Packaging (1) 23,344 26,075 22,290
Corporate and Other (1) (3,739) (5,542) (5,489)
------ ------ ------
94,717 8,230 95,073
------ ----- ------
Change in fair value of
interest rate derivatives (52) (683) 125
Loss on extinguishment of
debt (44,102) - -
Interest expense (18,284) (26,156) (21,436)
Interest income 92 94 130
--- --- ---
Income (loss) before
income taxes $32,371 $(18,515) $73,892
======= ======== =======
EBITDA (a)
Paper (1) $96,637 $9,222 $99,443
Packaging (1) 34,466 36,660 32,966
Corporate and Other(1)(2) (46,768) (4,526) (4,420)
------- ------ ------
$84,335 $41,356 $127,989
======= ======= ========
(1) The three months ended December 31, 2009, and September 30, 2009,
included $50.1 million and $42.9 million of income recorded in the
Paper segment, $22.2 million and $19.4 million of income recorded in
the Packaging segment, and $0.4 million of income and $2.7 million of
expense recorded in the Corporate and Other segment relating to
alternative fuel mixture credits, respectively. These amounts are net
of fees and expenses and before taxes.
(2) The three months ended December 31, 2009, includes $44.1 million of
loss on extinguishment of debt.
Boise Inc.
Consolidated Statements of Income (Loss)
(in thousands, except share and per-share data)
Boise Inc. Predecessor
---------------- -----------
Year Ended January 1
December 31 Through
---------------- February 21,
2009 2008 2008
---- ---- ----
Sales
Trade $1,935,410 $1,990,207 $258,430
Related parties 42,782 80,425 101,490
------ ------ -------
1,978,192 2,070,632 359,920
--------- --------- -------
Costs and expenses
Materials, labor, and other
operating expenses 1,596,214 1,756,826 313,931
Fiber costs from related
parties 36,858 54,628 7,662
Depreciation, amortization,
and depletion 131,500 109,988 477
Selling and distribution
expenses 55,524 48,278 9,097
General and administrative
expenses 50,250 34,258 6,606
St. Helens mill restructuring 5,805 29,780 -
Alternative fuel mixture
credits, net (207,607) - -
Other (income) expense, net 4,005 (2,980) (989)
----- ------ ----
1,672,549 2,030,778 336,784
--------- --------- -------
Income from operations 305,643 39,854 23,136
------- ------ ------
Foreign exchange gain (loss) 2,639 (4,696) 54
Change in fair value of
interest rate derivatives 568 (479) -
Loss on extinguishment of
debt (44,102) - -
Interest expense (83,263) (91,220) (2)
Interest income 367 2,246 161
--- ----- ---
(123,791) (94,149) 213
-------- ------- ---
Income (loss) before income
taxes 181,852 (54,295) 23,349
Income tax (provision)
benefit (28,010) 8,772 (563)
------- ----- ----
Net income (loss) $153,842 $(45,523) $22,786
======== ======== =======
Weighted average common
shares outstanding:
Basic 78,354,946 73,635,665 -
Diluted 83,080,979 73,635,665 -
Net income (loss)
per common share:
Basic $1.96 $(0.62) $-
Diluted $1.85 $(0.62) $-
Segment Information
(in thousands)
Boise Inc. Predecessor
---------------- -----------------
Year Ended January 1 Through
December 31 February 21,
----------------
2009 2008 2008
---- ---- ----
Segment sales
Paper $1,419,961 $1,403,698 $253,508
Packaging 588,405 703,705 113,485
Intersegment eliminations
and other (30,174) (36,771) (7,073)
------- ------- ------
$1,978,192 $2,070,632 $359,920
========== ========== ========
Segment income (loss)
Paper (1) $262,665 $32,685 $20,718
Packaging (1) 67,089 21,104 5,685
Corporate and Other (1) (21,472) (18,631) (3,213)
------- ------- ------
308,282 35,158 23,190
------- ------ ------
Change in fair value of
interest rate
derivatives 568 (479) -
Loss on extinguishment of
debt (44,102) - -
Interest expense (83,263) (91,220) (2)
Interest income 367 2,246 161
--- ----- ---
Income (loss) before income
taxes $181,852 $(54,295) $23,349
======== ======== =======
EBITDA (a)
Paper (1) $347,806 $104,346 $21,066
Packaging (1) 109,321 56,171 5,738
Corporate and Other (1) (2) (61,447) (15,371) (3,137)
------- ------- ------
$395,680 $145,146 $23,667
======== ======== =======
(1) The year ended December 31, 2009, included $149.9 million of income
recorded in the Paper segment, $61.6 million of income recorded in
the Packaging segment, and $3.9 million of expenses recorded in the
Corporate and Other segment relating to alternative fuel mixture
credits. These amounts are net of fees and expenses and before
taxes.
(2) The year ended December 31, 2009, includes $44.1 million of loss on
extinguishment of debt.
Boise Inc.
Consolidated Balance Sheets
(in thousands)
December 31, 2009 December 31, 2008
----------------- -----------------
ASSETS
Current
Cash and cash equivalents $69,393 $22,518
Short-term investments 10,023 -
Receivables
Trade, less allowances of $839
and $961 185,110 220,204
Related parties 2,056 1,796
Other (1) 62,410 4,937
Inventories 252,173 335,004
Deferred income taxes - 5,318
Prepaid and other 4,819 6,289
----- -----
585,984 596,066
------- -------
Property
Property and equipment, net 1,205,679 1,262,810
Fiber farms and deposits 17,094 14,651
------ ------
1,222,773 1,277,461
--------- ---------
Deferred financing costs 47,369 72,570
Intangible assets, net 32,358 35,075
Other assets 7,306 7,114
----- -----
Total assets $1,895,790 $1,988,286
========== ==========
(1) December 31, 2009, includes a $56.6 million receivable for alternative
fuel mixture credits.
Boise Inc.
Consolidated Balance Sheets (continued)
(in thousands, except share and per-share data)
December 31, 2009 December 31, 2008
----------------- -----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Current portion of long-term debt $30,711 $25,822
Income taxes payable 240 841
Accounts payable
Trade 172,518 177,157
Related parties 2,598 3,107
Accrued liabilities
Compensation and benefits 67,948 44,488
Interest payable 4,946 184
Other 23,735 17,402
------ ------
302,696 269,001
------- -------
Debt
Long-term debt, less current
portion 785,216 1,011,628
Notes payable - 66,606
- ------
785,216 1,078,234
------- ---------
Other
Deferred income taxes 32,253 8,907
Compensation and benefits 123,889 149,691
Other long-term liabilities 30,801 33,007
------ ------
186,943 191,605
------- -------
Commitments and contingent liabilities
Stockholders' Equity
Preferred stock, $.0001 par
value per share:
1,000,000 shares authorized; none issued - -
Common stock, $.0001 par value per share:
250,000,000 shares authorized;
84,418,691 shares and 79,716,130 shares
issued and outstanding 8 8
Additional paid-in capital 578,669 575,151
Accumulated other comprehensive
income (loss) (71,553) (85,682)
Retained earnings (accumulated
deficit) 113,811 (40,031)
------- -------
Total stockholders' equity 620,935 449,446
------- -------
Total liabilities and
stockholders' equity $1,895,790 $1,988,286
========== ==========
Boise Inc.
Consolidated Statements of Cash Flows
(in thousands)
Boise Inc. Predecessor
---------- -----------------
Year Ended January 1 Through
December 31 February 21,
----------------
2009 2008 2008
---- ---- ----
Cash provided by (used for)
operations
Net income (loss) $153,842 $(45,523) $22,786
Items in net income (loss)
not using (providing) cash
Depreciation, depletion,
and amortization
of deferred financing
costs and other 144,079 119,933 477
Share-based compensation
expense 3,518 3,096 -
Related-party interest
expense - 2,760 -
Notes payable interest
expense 9,000 5,512 -
Pension and other
postretirement benefit
expense 7,376 8,388 1,826
Deferred income taxes 27,709 (9,363) 11
Change in fair value of
energy derivatives (5,877) 7,445 (37)
Change in fair value of
interest rate
derivatives (568) 479 -
St. Helens mill
restructuring - 35,998 -
(Gain) loss on sales of
assets, net 514 - (943)
Other (2,639) 4,696 (54)
Loss on extinguishment of
debt 44,102 - -
Decrease (increase) in
working capital, net
of acquisitions
Receivables (18,579) 25,296 (23,522)
Inventories 83,037 (28,950) 5,343
Prepaid expenses 1,470 (1,044) 875
Accounts payable and
accrued liabilities 25,710 (17,801) (10,718)
Current and deferred income
taxes (372) (1,057) 335
Pension and other
postretirement benefit
payments (13,001) (636) (1,826)
Other (609) (1,483) 2,326
---- ------ -----
Cash provided by
(used for)
operations 458,712 107,746 (3,121)
------- ------- ------
Cash provided by (used for)
investment
Acquisitions of businesses
and facilities (543) (1,216,459) -
Cash released from (held
in) trust, net - 403,989 -
Expenditures for property
and equipment (77,145) (90,597) (10,168)
Purchases of short-term
investments (21,643) - -
Maturities of short-term
investments 11,615 - -
Sales of assets 1,031 394 17,662
Other 2,168 (5,703) 863
----- ------ ---
Cash provided by
(used for)
investment (84,517) (908,376) 8,357
------- -------- -----
Cash provided by
(used for) financing
Issuances of long-term debt 310,000 1,125,700 -
Payments of long-term debt (531,523) (88,250) -
Cash used for
extinguishment of debt (39,717) - -
Payments of notes payable (52,924) - -
Payments to stockholders
for exercise of conversion
rights - (120,170) -
Payments of deferred
financing fees (13,156) (81,898) -
Payments of deferred
underwriters fees - (12,420) -
Net equity transactions
with related parties - - (5,237)
--- --- ------
Cash provided by
(used for)
financing (327,320) 822,962 (5,237)
-------- ------- ------
Increase (decrease) in cash
and cash equivalents 46,875 22,332 (1)
Balance at beginning of the
period 22,518 186 8
------ --- ---
Balance at end of the
period $69,393 $22,518 $7
======= ======= ===
Summary Notes to Consolidated Financial Statements and Segment Information
The Consolidated Statements of Income (Loss), Consolidated Balance Sheets,
Consolidated Statements of Cash Flows, and Segment Information do not
include all Notes to Consolidated Financial Statements and should be read
in conjunction with the Company's 2009 Annual Report on Form 10K. Net
income (loss) for all periods presented involved estimates and accruals.
On February 22, 2008, Aldabra 2 Acquisition Corp. completed the
acquisition (the Acquisition) of Boise White Paper, L.L.C., Boise
Packaging & Newsprint, L.L.C., Boise Cascade Transportation Holdings Corp.
(collectively, the Paper Group), and other assets and liabilities related
to the operation of the paper, packaging and newsprint, and transportation
businesses of the Paper Group and part of the headquarters operations of
Boise Cascade, L.L.C. (Boise Cascade). Subsequent to the Acquisition,
Aldabra 2 Acquisition Corp. changed its name to Boise Inc. The acquired
business is referred to as the "Predecessor."
The accompanying Consolidated Statement of Income (Loss) and Consolidated
Statement of Cash Flows for the year ended December 31, 2008, include the
activities of Aldabra 2 Acquisition Corp. prior to the Acquisition and the
operations of the acquired businesses from February 22, 2008, through
December 31, 2008. The Predecessor Consolidated Statement of Income
(Loss) and Consolidated Statement of Cash Flows for the period of January
1 through February 21, 2008, are presented for comparative purposes.
Boise Inc. operates its business in three reportable segments: Paper,
Packaging, and Corporate and Other (support services). Boise Inc.
manufactures commodity and premium office papers, a range of packaging
papers, including label and release papers, flexible packaging papers, and
printing and converting papers. Boise Inc. also manufactures corrugated
containers, containerboard, newsprint, and market pulp.
(a) EBITDA represents income (loss) before interest (change in fair value
of interest rate derivatives, interest expense, and interest income),
income taxes, and depreciation, amortization, and depletion. The
following table reconciles net income to EBITDA for Boise Inc. for the
three months ended December 31, 2009 and 2008, and the three months ended
September 30, 2009 (unaudited, in thousands):
Three Months Ended
-------------------------------
December 31 September 30,
--------------
2009 2008 2009
---- ---- ----
Net income (loss) $55,720 $(15,485) $48,155
Change in fair value of
interest rate derivatives 52 683 (125)
Interest expense 18,284 26,156 21,436
Interest income (92) (94) (130)
Income tax provision (benefit) (23,349) (3,030) 25,737
Depreciation, amortization,
and depletion 33,720 33,126 32,916
------ ------ ------
EBITDA $84,335 $41,356 $127,989
======= ======= ========
The following table reconciles net income (loss) to EBITDA for Boise Inc.
for the year ended December 31, 2009 and 2008, and for the Predecessor
period of January 1 through February 21, 2008 (unaudited, in thousands):
Boise Inc. Predecessor
-------------- -----------------
Year Ended January 1 Through
December 31 February 21,
--------------
2009 2008 2008
---- ---- ----
Net income (loss) $153,842 $(45,523) $22,786
Change in fair value of
interest rate derivatives (568) 479 -
Interest expense 83,263 91,220 2
Interest income (367) (2,246) (161)
Income tax provision (benefit) 28,010 (8,772) 563
Depreciation, amortization,
and depletion 131,500 109,988 477
------- ------- ---
EBITDA $395,680 $145,146 $23,667
======== ======== =======
The following table reconciles EBITDA to EBITDA excluding special items
for Boise Inc. for the three months ended December 31, 2009 and 2008, and
the three months ended September 30, 2009 (unaudited, in thousands):
Three Months Ended
-----------------------------
December 31 September 30,
-----------
2009 2008 2009
---- ---- ----
EBITDA $84,335 $41,356 $127,989
St. Helens mill restructuring (a) (378) 37,568 1,402
Impact of energy hedges (976) (26) (3,624)
Alternative fuel mixture credits
(b) (72,698) - (59,572)
Loss on extinguishment of debt 44,102 - -
Gain on changes in supplemental
pension plans - (2,914) -
--- ------ ---
EBITDA excluding special items $54,385 $75,984 $66,195
======= ======= =======
(a) In November 2008, we announced the restructuring of our St. Helens,
Oregon, paper mill. Of the $37.6 million in restructuring charges during
the three months ended December 31, 2008, $29.8 million is included in
"St. Helens mill restructuring" and $7.8 million related to inventory
write-downs is included in "Materials, labor, and other operating
expenses." During the three months ended September 30, 2009, we recorded
$1.4 million in additional restructuring charges in "St. Helens mill
restructuring," and during the three months ended December 31, 2009, we
recorded a net $0.4 million reduction to our restructuring charges.
(b) During the three months ended December 31, 2009, and September 30,
2009, we recorded $72.7 million and $59.6 million, respectively, of
alternative fuel mixture credits, net of associated fees and expenses and
before taxes. We recorded these amounts in "Alternative fuel mixture
credits, net" in our Consolidated Statement of Income (Loss). At December
31, 2009, we had $56.6 million recorded in "Receivables, other" related to
these credits.
The following table reconciles EBITDA to EBITDA excluding special items
for Boise Inc. for the years ended December 31, 2009 and 2008. The table
also reconciles the Predecessor period of January 1 through February 21,
2008, and the combined year ended December 31, 2008 (unaudited, in
thousands):
Boise Inc. Predecessor Combined
-------------- ----------------- -----------
Year Ended January 1 Through Year Ended
December 31 February 21, December 31,
--------------
2009 2008 2008 2008
---- ---- ---- ----
EBITDA $395,680 $145,146 $23,667 $168,813
St. Helens mill
restructuring (a) 5,805 37,568 - 37,568
Impact of energy hedges (5,877) 7,445 (37) 7,408
Alternative fuel
mixture credits (b) (207,607) - - -
Loss of extinguishment
of debt 44,102 - - -
Hurricane losses - 5,482 - 5,482
Gain on changes in
supplemental pension
plans - (2,914) - (2,914)
Inventory purchase
accounting expense - 10,259 - 10,259
Impact of DeRidder
outage - 19,776 732 20,508
---- ------ ---- ------
EBITDA excluding
special items $232,103 $222,762 $24,362 $247,124
======== ======== ======= ========
(a) In November 2008, we announced the restructuring of our St. Helens,
Oregon, paper mill. Of the $37.6 million in restructuring charges during
the year ended December 31, 2008, $29.8 million is included in "St. Helens
mill restructuring" and $7.8 million related to inventory write-downs is
included in "Materials, labor, and other operating expenses." During the
year ended December 31, 2009, we recorded $5.8 million of net
restructuring charges in "St. Helens mill restructuring."
(b) During the year ended December 31, 2009, we recorded $207.6 million
of alternative fuel mixture credits, net of associated fees and expenses
and before taxes. We recorded these amounts in "Alternative fuel mixture
credits, net" in our Consolidated Statement of Income (Loss). At
December 31, 2009, we had $56.6 million recorded in "Receivables, other"
related to these credits.
The following table reconciles net income (loss) to net income (loss)
excluding special items and presents diluted earnings per share excluding
special items for the three months ended December 31, 2009 and 2008, the
three months ended September 30, 2009, and the years ended December 31,
2009 and 2008. The table also reconciles the Predecessor period of January
1 through February 21, 2008, and the combined year ended December 31, 2008
(unaudited, in thousands):
Boise Inc.
--------------------------------------------------------
Three Three Three
Months Months Months Year Year
Ended Ended Ended Ended Ended
December December September December December
31, 31, 30, 31, 31,
2009 2008 2009 2009 2008
---- ---- ---- ---- ----
Net income (loss) $55,720 $(15,485) $48,155 $153,842 $(45,523)
St. Helens
mill
restructuring (378) 37,568 1,402 5,805 37,568
Impact of
energy hedges (976) (26) (3,624) (5,877) 7,445
Alternative
fuel mixture
credits (72,698) - (59,572) (207,607) -
Loss on
extinguishment
of debt 44,102 - - 44,102 -
Hurricane
losses - - - - 5,482
Gain on
changes in
supplemental
pension plans - (2,914) - - (2,914)
Inventory
revaluation
expense - - - - 10,259
Impact of
DeRidder
outage - - - - 19,776
Tax impact of
special items at
38.7% (a) 11,591 (13,401) 23,914 63,304 (30,037)
------ ------- ------ ------ -------
Reversal of
income tax
valuation
allowances (b) (33,180) - - (33,180) -
------- ---- ---- ------- ----
Net income
(loss) excluding
special items $4,181 $5,742 $10,275 $20,389 $2,056
====== ====== ======= ======= ======
Weighted average
common shares
outstanding:
diluted 84,232,429 77,260,274 84,240,582 83,080,979 73,635,665
Net income
(loss)
excluding
special items
per
diluted share $0.05 $0.07 $0.12 $0.25 $0.03
(a) Special items are tax effected in the aggregate at an assumed
combined federal and state statutory rate of 38.7%.
During the three months ended December 31, 2009, we reversed income tax
valuation allowances.
The following table reconciles total debt to net total debt at December
31, 2009 and 2008, and September 30, 2009 (unaudited, in thousands):
Boise Inc.
-----------------------------------------
December 31, December 31, September 30,
2009 2008 2009
---- ---- ----
Current portion of
long-term debt $30,711 $25,822 $22,235
Long-term debt,
less current
portion and notes
payable 785,216 1,011,628 932,517
Notes payable - 66,606 74,788
- ------ ------
Total debt 815,927 1,104,056 1,029,540
Less cash and cash
equivalents and
short-term
investments (79,416) (22,518) (247,614)
------- ------- --------
Net total debt $736,511 $1,081,538 $781,926
======== ========== ========
SOURCE Boise Inc.
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