Bowater Announces Second Quarter 2006 Financial Results.GREENVILLE Greenville. 1 City (1990 pop. 45,226), seat of Washington co., W Miss., on Lake Ferguson, a deepwater harbor adjoining the Mississippi River; inc. 1886. , S.C. -- Bowater Bowater NYSE: BOW is an American pulp and paper company based in Greenville, South Carolina. Bowater has 12 pulp and paper mills in the United States, Canada and South Korea and 13 North American sawmills. It has approximately 10,000 employees. Incorporated (NYSE NYSE See: New York Stock Exchange : BOW Bow, river, Canada Bow (bō), river, 315 mi (507 km) long, rising in the Rocky Mts., S Alta., Canada, and flowing SE through Banff National Park. ) today reported a net loss of $10.6 million, or $0.18 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, on sales of $899.4 million for the second quarter of 2006. These results compare with a net loss of $3.6 million, or $0.06 per diluted share, on sales of $897.5 million in the second quarter of 2005. "Our second quarter financial results were impacted by additional costs related to scheduled operational maintenance, conversion of a newsprint newsprint low grade paper used for newspapers. Old newspapers are fed to cattle as an alternative roughage and may occasionally be ingested by dogs. Significant amounts of lead are accumulated in tissues; no cases of poisoning have been recorded in cattle, though it has been machine to specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. papers at our Calhoun, Tennessee Calhoun is a town in McMinn County, Tennessee, United States. The population was 496 at the 2000 census. On December 11, 1990, fog played havoc with the worst accident in Tennessee's history; 99 vehicles crashed on a stretch of fog-prone Interstate 75 and was listed as the facility and permanent closure of a market pulp line at our Thunder Bay Thunder Bay, city (1991 pop. 113,946), SW Ont., Canada, on Thunder Bay inlet of Lake Superior. The city was created in 1970 by the amalgamation of the twin cities of Fort William and Port Arthur and two adjoining townships. site," said David J David J. Haskins (b. April 24, 1957, in Northampton, England) is a British alternative rock musician. He was the bassist for the seminal gothic rock band Bauhaus. Life and work . Paterson Paterson, city (1990 pop. 140,891), seat of Passaic co., NE N.J., at the falls of the Passaic River; inc. 1851. Founded in 1791 by Alexander Hamilton and others of the Society for Establishing Useful Manufactures, Paterson was a planned attempt to promote industrial , President and Chief Executive Officer. "However, with these events largely behind us, I look forward to improved operational and financial performance which, when combined with our asset sale program, should lower our debt levels in the second half of the year." FINANCIAL HIGHLIGHTS (In millions, except per-share amounts)
Three Months Six Months
Ended Ended
June 30, June 30,
-------------- ------------------
2006 2005 2006 2005
--------------- ------------------
Sales $899.4 $897.5 $1,792.6 $1,734.5
Net loss $(10.6) $ (3.6) $ (29.4) $ (2.7)
Loss per diluted share (in
accordance with GAAP) $(0.18) $(0.06) $ (0.51)$ (0.05)
Special items, net of tax (per
diluted share):
Sale of assets (gain) loss (0.80) (0.11) (1.11) (0.23)
Tax adjustments 0.32 - 0.56 -
Foreign exchange (gain) loss 0.35 (0.01) 0.32 (0.12)
Adoption of new accounting
standard - - 0.05 -
Severance - - 0.05 -
Asset impairment - 0.13 - 0.13
---------------- ------------------
Loss per share excluding special
items $(0.31) $(0.05) $ (0.64) $ (0.27)
--------------- ------------------
Second quarter 2006 special items, net of tax, consisted of a $45.7 million gain related to asset sales, an $18.5 million charge related to tax adjustments, and a $20.2 million loss relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc foreign currency changes. Excluding these special items, the net loss for the quarter was $17.6 million, or $0.31 per diluted share, compared with the 2005 second quarter net loss before special items of $3.1 million, or $0.05 per diluted share. The asset sale program announced last October October: see month. is well ahead of schedule. During the second quarter, proceeds were $201.3 million providing an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. gain of $45.7 million. As a result, total debt, less cash on the balance sheet, declined by $148.0 million. The company currently owns 165,000 acres of timberlands and leases 72,000 acres in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and owns 620,000 acres in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . Additional sales are expected in the second half of the year. During the quarter, the company's manufacturing costs were negatively impacted by the strong Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents , which reached the highest quarterly average in almost 30 years. Due to scheduled maintenance, the company curtailed 13,000 metric tons (Transparent Optical Networking Services) A marketing term for providing dark fiber to a customer. The customer is responsible for generating the transmission signal and interpreting it at the other end. See dark fiber. of newsprint and 15,000 metric tons of market pulp. Maintenance spending was approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $14 million higher than the first quarter of 2006. It is anticipated that maintenance costs will be lower in the third quarter. The coated papers Coated paper is paper which has been coated by an inorganic compound to impart certain qualities to the paper, including weight and surface gloss, smoothness or ink absorbency. Kaolinite is the compound most often used for coating papers used in commercial printing. average transaction price for the company decreased $21 per short ton in the quarter compared with the first quarter of 2006, while the average operating cost decreased $22 per short ton due to lower energy and repair costs. The company expects normal seasonal improvements in demand in the latter half of the year. In specialty papers, the company's average transaction price increased $11 per short ton. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was reduced by approximately $10 million due to the conversion of the Calhoun Cal·houn , John Caldwell 1782-1850. Vice President of the United States (1825-1832) under John Quincy Adams and Andrew Jackson. In his political philosophy he maintained that the states had the right to nullify federal legislation that they deemed , Tenn., machine and average operating costs operating costs npl → gastos mpl operacionales increased $51 per short ton. The machine conversion was completed at the end of the second quarter and the new freesheet hybrid hybrid (hī`brĭd), term applied by plant and animal breeders to the offspring of a cross between two different subspecies or species, and by geneticists to the offspring of parents differing in any genetic characteristic (see genetics). product was introduced in July July: see month. . The company's average transaction price for newsprint increased $18 per metric ton. During the quarter, average operating costs increased by $16 per metric ton primarily due to a stronger Canadian dollar and higher maintenance related costs. Shipments declined by 26,000 metric tons in the quarter due to increased maintenance and elimination of newsprint capacity as a result of the Calhoun machine conversion. The company's newsprint inventory level declined to the lowest level in almost five years. The average market pulp transaction price for the company increased $41 per metric ton. Average operating costs increased $49 per metric ton compared to the first quarter primarily due to scheduled maintenance costs. The permanent closure of the Thunder Bay pulp line 'A' in the second quarter reduced operating income by approximately $10 million. As a result of this closure, annual operating income is expected to improve by $20 million by the beginning of 2007. The average lumber lumber, term for timber that has been cut into boards for use as a building material. The major steps in producing lumber involve logging (the felling and preparation of timber for shipment to sawmills), sawing the logs into boards, grading the boards according to transaction price for the company decreased $17 per thousand board feet. During the quarter, the company paid countervailing and antidumping an·ti·dump·ing adj. Intended to discourage importation and sale of foreign-made goods at prices substantially below domestic prices for the same items. duties of approximately $4 million, bringing the total paid to date to approximately $110 million. The company is addressing lower lumber prices by reducing production volume. The effective tax rate, as adjusted for special items, was a benefit of 64 percent in the second quarter. The rate was impacted by approximately $10 million related to recent state and Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. tax law changes. The company's statutory rate remains approximately 35 percent. During the quarter, the company refinanced its existing credit agreement and accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. program. The new facility includes a $415 million, five-year, revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility in the United States and a $165 million, 364-day, renewable revolving credit facility in Canada. As of the end of the quarter, there was no outstanding debt under either agreement. Bowater management will hold a conference call to discuss these financial results at 10:00 a.m. Eastern time, today, July 27, 2006. The conference call number is 800-762-4717 or 480-629-9025 (international). A webcast of the call will be available on Bowater's website at www.bowater.com. Interested parties may follow the on-screen on·screen or on-screen adj. & adv. 1. As shown on a movie, television, or display screen. 2. Within public view; in public. instructions for access to the webcast and related information. A replay of the call will be available after 1:30 p.m. Eastern time today on the company's website and through Thursday Thursday: see week. , August 3, by dialing 800-475-6701 or 320-365-3844 (international) and using the access code 836240. Bowater Incorporated, headquartered in Greenville, SC, is a leading producer of coated and specialty papers and newsprint. In addition, the company sells bleached market pulp and lumber products. Bowater employs approximately 7,800 people and has 12 pulp and paper mills in the United States, Canada and South Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. . In North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , it also operates two converting facilities and 10 sawmills. Bowater's operations are supported by approximately 857,000 acres of timberlands owned or leased in the United States and Canada and 28 million acres of timber timber: see lumber; wood. cutting rights in Canada. Bowater operates six recycling recycling, the process of recovering and reusing waste products—from household use, manufacturing, agriculture, and business—and thereby reducing their burden on the environment. plants and is one of the world's largest consumers of recycled newspapers and magazines. Bowater common stock is listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. and the Pacific Exchange. A special class of stock exchangeable into Bowater common stock is listed on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension : BWX BWX is a three-letter abbreviation with multiple meanings, as described below:
All amounts are in U.S. dollars. Statements in this news release that are not reported financial results or other historical information are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. They include, for example, statements about our business outlook, assessment of market conditions, strategies (including anticipated execution of our debt and cost reduction strategies), future plans, future sales, future earnings or operating income, future debt levels, prices for our major products, future inventory levels, planned capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. , scheduled maintenance costs, and projected tax rates. These forward-looking statements are not guarantees of future performance. They are based on management's expectations that involve a number of business risks and uncertainties, which could cause actual results to differ materially. These risks and uncertainties include, but are not limited to, negative industry conditions and further growth in alternative media, actions of competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. , Canadian dollar exchange rates, the actual realization (specification) realization - A UML semantic relationship between a classifier that specifies a contract and another classifier that guarantees to carry it out. [Handout by Mr. David Gillibrand]. of debt and cost reduction strategies, the demand for higher margin coated and uncoated mechanical papers, the effects of planned and unplanned maintenance expenditures, the continued strength in the market for timberlands, the costs of raw materials such as energy, chemicals and fiber, and other factors listed from time to time in Bowater's Securities and Exchange Commission filings, including those described in the company's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2005 under the caption "Cautionary Statement Regarding Forward-Looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. Information and Use of Third Party Data." Bowater disclaims any obligation to update these forward-looking statements. Information about industry or general economic conditions contained in this press release is derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from third party sources that the company believes are widely accepted and accurate; however, the company has not independently verified ver·i·fy tr.v. ver·i·fied, ver·i·fy·ing, ver·i·fies 1. To prove the truth of by presentation of evidence or testimony; substantiate. 2. this information and cannot assure its accuracy.
BOWATER INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited, in millions except per share amounts)
Three Months Six Months
Ended Ended
June 30, June 30,
--------------- -------------------
2006 2005 2006 2005
------- ------- --------- ---------
Sales $899.4 $897.5 $1,792.6 $1,734.5
Cost of sales, excluding
depreciation, amortization
and cost of timber harvested 697.7 642.5 1,377.9 1,250.1
Depreciation, amortization and
cost of timber harvested 81.2 81.6 162.3 163.4
Distribution costs 83.5 89.4 166.4 172.3
Selling and administrative expenses 41.3 41.1 79.3 80.0
Impairment of assets - 11.9 - 11.9
Net gain on fixed assets and land
sales (1) 71.7 9.8 100.5 20.8
------- ------- --------- ---------
Operating income 67.4 40.8 107.2 77.6
Other expense (income):
Interest income (1.0) (1.1) (2.1) (2.2)
Interest expense, net of
capitalized interest 49.3 49.3 98.7 99.5
Foreign exchange loss 4.8 3.3 3.0 1.8
Other, net (2.1) (2.0) (5.7) (4.7)
------- ------- --------- ---------
51.0 49.5 93.9 94.4
------- ------- --------- ---------
Income (loss) before income taxes,
minority interests and cumulative
effect of accounting change 16.4 (8.7) 13.3 (16.8)
Income tax provision (benefit) (2) 26.3 (5.6) 39.4 (13.4)
Minority interests, net of tax 0.7 0.5 0.7 (0.7)
------- ------- --------- ---------
Loss before cumulative effect of
accounting change (10.6) (3.6) (26.8) (2.7)
Cumulative effect of accounting
change, net of tax (3) - - (2.6) -
------- ------- --------- ---------
Net loss $(10.6) $(3.6) $(29.4) $(2.7)
======= ======= ========= =========
Basic loss per common share: (4)
Loss before cumulative effect
of accounting change $(0.18) $(0.06) $(0.46) $(0.05)
Cumulative effect of
accounting change, net of tax - - (0.05) -
------- ------- --------- ---------
Net loss per share $(0.18) $(0.06) $(0.51) $(0.05)
======= ======= ========= =========
Average common shares
outstanding (4) 57.4 57.4 57.4 57.3
======= ======= ========= =========
Diluted loss per common share: (4)
Loss before cumulative effect
of accounting change $(0.18) $(0.06) $(0.46) $(0.05)
Cumulative effect of accounting
change, net of tax - - (0.05) -
------- ------- --------- ---------
Net loss per share $(0.18) $(0.06) $(0.51) $(0.05)
======= ======= ========= =========
Average diluted common shares
outstanding (4) 57.4 57.4 57.4 57.3
======= ======= ========= =========
BOWATER INCORPORATED AND SUBSIDIARIES
(Unaudited, in millions of US dollars)
Consolidated Balance Sheet June 30, Dec. 31,
2006 2005
--------- ---------
Current assets:
Cash and cash equivalents $ 113.6 $ 30.1
Accounts receivable, net 427.2 410.1
Inventories 354.1 365.8
Unrealized gain on hedged transactions 5.2 30.0
Timberlands held for sale (1) 9.1 123.1
Other current assets 33.3 31.2
--------- ---------
Total current assets 942.5 990.3
--------- ---------
Timber and timberlands 79.1 85.4
Fixed assets, net 2,995.0 3,049.1
Goodwill 794.1 794.1
Other assets 236.7 233.5
--------- ---------
$5,047.4 $5,152.4
========= =========
Current liabilities:
Accounts payable and accrued liabilities $ 487.3 $ 487.3
Short-term bank debt - 55.0
Current installments of long-term debt 15.2 22.2
Dividends payable 11.2 11.2
--------- ---------
Total current liabilities 513.7 575.7
--------- ---------
Long-term debt, net of current installments 2,385.8 2,400.0
Pension, other postretirement benefits and other
long-term liabilities 569.4 572.9
Deferred income taxes 368.1 329.4
Minority interests in subsidiaries 61.5 58.9
Shareholders' equity 1,148.9 1,215.5
--------- ---------
$5,047.4 $5,152.4
========= =========
BOWATER INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in millions of US Dollars)
Six Months
Ended
June 30,
---------------
2006 2005
------- -------
Cash flows from operating activities:
Net loss $(29.4) $(2.7)
Adjustments to reconcile net loss to net cash from
operating activities:
Cumulative effect of accounting change, net of tax
(3) 2.6 -
Stock-based compensation (5) (0.8) 0.1
Asset impairment - 11.9
Depreciation, amortization and cost of timber
harvested 162.3 163.4
Deferred income tax provision (benefit) 28.5 (18.8)
Minority interests, net of tax 0.7 (0.7)
Net gain on sale of assets (100.5) (20.8)
Changes in working capital:
Accounts receivable (17.0) (69.4)
Inventories 8.7 (5.9)
Accounts payable and accrued liabilities (11.1) (6.9)
Income tax receivables and payables (2.0) 3.1
Other, net 0.5 (1.9)
------- -------
Net cash provided by operating activities 42.5 51.4
Cash flows from investing activities:
Cash invested in fixed assets, timber and timberlands (90.6) (50.1)
Disposition of assets, including timber and
timberlands 238.1 23.0
------- -------
Net cash provided by (used for) investing
activities 147.5 (27.1)
Cash flows from financing activities:
Cash dividends, including minority interests (22.9) (22.9)
Short-term financing 289.9 340.0
Short-term financing repayments (351.5) (308.0)
Payments of long-term debt (22.0) (14.0)
Stock options exercised - 1.9
------- -------
Net cash used for financing activities (106.5) (3.0)
------- -------
Net increase in cash and cash equivalents 83.5 21.3
Cash and cash equivalents at beginning of year 30.1 29.7
------- -------
Cash and cash equivalents at end of year $113.6 $51.0
======= =======
BOWATER INCORPORATED AND SUBSIDIARIES
Notes to the Press Release and Unaudited Consolidated Financial
Statements
(1) During the first quarter of 2006, the Company sold its Degelis
sawmill and approximately 24,000 acres of timberlands primarily
located in Tennessee. During the second quarter of 2006, the Company
sold its Baker Brook sawmill and approximately 472,000 acres of
timberlands primarily located in Tennessee and the Canadian province
of New Brunswick. As of June 30, 2006, Bowater has approximately
42,000 acres classified as timberlands held for sale.
(2) During 2005, based on continued operating losses for our
Canadian operations and current evaluation of available tax planning
strategies, it was determined in accordance with Financial Accounting
Standards Board (FASB) Statement of Financial Accounting Standards
(SFAS) No. 109 that we would record a tax charge to establish a
valuation allowance against our remaining net Canadian deferred tax
assets, which were primarily for loss carryforwards and tax credits in
Canada. Due to operating losses generated at certain of our Canadian
operations during the first and second quarters of 2006, income tax
benefits and tax credits were entirely offset by tax charges to
increase the tax valuation allowance. During the first and second
quarters of 2005, no valuation allowances were recorded related to
income tax benefits generated during this period. Additionally, any
income tax benefit recorded on operating losses generated at certain
of our Canadian operations for the balance of 2006 will likely be
offset by establishing a 100% valuation allowance (tax charge) during
2006. To the extent we establish valuation allowances in future
periods this would negatively impact our overall effective income tax
rate in those periods. To the extent that these Canadian operations
losses lessen or become profitable, the impact of this valuation
allowance would also lessen or reverse and positively impact our
effective tax rate in those periods.
(3) Effective January 1, 2006, Bowater adopted FASB's SFAS No.
123R, "Share Based Payment." SFAS No. 123R requires the measurement of
all employee share-based payments to employees, including grants of
employee stock options, using a fair-value-based method and the
recording of such expense in our consolidated statements of income.
The adoption of SFAS No. 123R resulted in a cumulative effect
adjustment, net of tax, of $2.6 million, or $0.05 per diluted share.
(4) For the calculation of basic and diluted income (loss) per
share for the three and six months ended June 30, 2006 and 2005, no
adjustments to net loss are necessary. The effect of dilutive
securities is not included in the computation for the three and six
months ended June 30, 2006 and 2005 as the effect would be
anti-dilutive.
(5) In the first quarter of 2006, the Company recognized $0.9
million of income resulting from the reduction in the fair value of
outstanding equity participation rights ("EPRs"). In the second
quarter of 2006, the Company recognized another $2.0 million of income
resulting from the further reduction in the fair value of outstanding
EPRs. This income was more than offset by $1.9 million of expense
related to restricted stock unit grants and $0.2 million of expense
related to stock option grants approved by the Board in May.
(6) A reconciliation of certain financial statement line items
reported under generally accepted accounting principles ("GAAP") to
earnings reported before special items is presented in the pages that
follow. We believe that this measure allows investors to more easily
compare our on-going operations and financial performance from period
to period. This measure is not as complete as GAAP earnings;
consequently, investors should rely on GAAP earnings. In addition to
GAAP earnings, we use the other measures that we disclose in order to
provide perspective on our financial performance.
Three Months Ended June 30, 2006
(unaudited, in millions except per share amounts)
Adjustment for Special Items
Land GAAP as
& adjusted
GAAP fixed for
as assets Foreign Severance/ Tax Special
reported sales exchange Curtailment Adjustments items
-------------------------------------------------------
Operating income
(loss) $67.4 $(71.7) $ - $ - $ - $(4.3)
Other expense
(income)
Interest income (1.0) - - - - (1.0)
Interest expense,
net of
capitalized
interest 49.3 - - - - 49.3
Foreign exchange
loss (gain) 4.8 - (4.8) - - -
Other, net (2.1) - - - - (2.1)
----------------------------------------------------
51.0 - (4.8) - - 46.2
----------------------------------------------------
Income (loss)
before income
taxes, minority
interests and
cumulative effect
of accounting
change 16.4 (71.7) 4.8 - - (50.5)
Provision for
income tax
expense
(benefit) 26.3 (23.9) (16.0) - (18.5) (32.1)
Minority
interests, net
of tax 0.7 (2.1) 0.6 - - (0.8)
----------------------------------------------------
Income (loss)
before cumulative
effect of
accounting
change (10.6) (45.7) 20.2 - 18.5 (17.6)
Cumulative effect
of accounting
change, net of
tax - - - - - -
----------------------------------------------------
Net (loss)
income $(10.6) (45.7) $20.2 $ - $18.5 (17.6)
-----------------------------------------------------
Diluted shares 57.4 57.4 57.4 57.4 57.4 57.4
-----------------------------------------------------
EPS $(0.18) $(0.80) $ 0.35 $ - $0.32 $(0.31)
-----------------------------------------------------
Effective tax
rate 160.4% - - - - 63.6%
-----------------------------------------------------
Three Months Ended June 30, 2005
(unaudited, in millions except per share amounts)
Adjustment for Special Items
Land GAAP as
& adjusted
fixed for
GAAP as assets Foreign Asset Special
reported sales exchange Impairment items
----------------------------------------------------
Operating income
(loss) $ 40.8 $(9.8) $ - $11.9 $42.9
Other expense
(income)
Interest income (1.1) - - - (1.1)
Interest expense,
net of
capitalized
interest 49.3 - - - 49.3
Foreign exchange
loss (gain) 3.3 - (3.3) - -
Other, net (2.0) - - - (2.0)
-------------------------------------------------
49.5 - (3.3) - 46.2
-------------------------------------------------
Income (loss)
before income
taxes and
minority
interests (8.7) (9.8) 3.3 11.9 (3.3)
Provision for
income tax
expense (benefit) (5.6) (3.7) 4.5 4.5 (0.3)
Minority
interests, net of
tax 0.5 - (0.4) - 0.1
-------------------------------------------------
Net (loss) income $ (3.6) $(6.1) $ (0.8) $ 7.4 $(3.1)
-------------------------------------------------
Diluted Shares 57.4 57.4 57.4 57.4 57.4
-------------------------------------------------
EPS $(0.06)$(0.11) $(0.01) $0.13 $(0.05)
-------------------------------------------------
Effective tax rate 64.4% - - - 9.1%
-------------------------------------------------
Six Months Ended June 30, 2006
(unaudited, in millions except per share amounts)
Adjustment for Special Items
Adoption of New
GAAP as Land & fixed Foreign Accounting
reported assets sales exchange Standard
---------------------------------------------------
Operating income
(loss) $107.2 $(100.5) $ - $ -
Other expense
(income)
Interest income (2.1) - - -
Interest expense,
net of capitalized
interest 98.7 - - -
Foreign exchange
loss (gain) 3.0 - (3.0) -
Other, net (5.7) - - -
---------------------------------------------------
93.9 - (3.0) -
---------------------------------------------------
Income (loss) before
income taxes,
minority interests
and cumulative
effect of
accounting
change 13.3 (100.5) 3.0 -
Provision for
income tax expense
(benefit) 39.4 (34.8) (16.0) -
Minority interests,
net of tax 0.7 (2.1) 0.2 -
---------------------------------------------------
Income (loss)
before cumulative
effect of
accounting change (26.8) (63.6) 18.8 -
Cumulative effect
of accounting
change, net of tax (2.6) - - 2.6
---------------------------------------------------
Net (loss) income $(29.4) $(63.6) $18.8 $ 2.6
---------------------------------------------------
Diluted shares 57.4 57.4 57.4 57.4
---------------------------------------------------
EPS $(0.51) $(1.11) $0.32 $ 0.05
---------------------------------------------------
Effective tax rate 296.2% - - -
---------------------------------------------------
Six Months Ended June 30, 2006
(unaudited, in millions except per share amounts)
Adjustment for Special Items
GAAP as
adjusted
for
Severance/ Tax Special
Curtailment Adjustments items
---------------------------------------------
Operating income (loss) $ 4.4 $ - $11.1
Other expense
(income)
Interest income - - (2.1)
Interest expense, net of
capitalized interest - - 98.7
Foreign exchange
loss (gain) - - -
Other, net - - (5.7)
---------------------------------------------
- - 90.9
---------------------------------------------
Income (loss) before
income taxes, minority
interests and
cumulative effect
of accounting change 4.4 - (79.8)
Provision for income
tax expense (benefit) 1.5 (32.0) (41.9)
Minority interests, net
of tax - - (1.2)
---------------------------------------------
Income (loss) before
cumulative effect of
accounting change 2.9 32.0 (36.7)
Cumulative effect of
accounting change,
net of tax - - -
---------------------------------------------
Net (loss) income $ 2.9 $32.0 $(36.7)
---------------------------------------------
Diluted shares 57.4 57.4 57.4
---------------------------------------------
EPS $ 0.05 $0.56 $(0.64)
---------------------------------------------
Effective tax rate - - 52.5%
---------------------------------------------
Six Months Ended June 30, 2005
(unaudited, in millions except per share amounts)
Adjustment for Special Items
Land GAAP as
& adjusted
fixed for
GAAP as assets Foreign Asset Special
reported sales exchange Impairment items
---------------------------------------------
Operating income (loss) $77.6 $(20.8) $ - $ 11.9 $ 68.7
Other expense (income)
Interest income (2.2) - - - (2.2)
Interest expense, net of
capitalized interest 99.5 - - - 99.5
Foreign exchange loss
(gain) 1.8 - (1.8) - -
Other, net (4.7) - - - (4.7)
---------------------------------------------
94.4 - (1.8) - 92.6
---------------------------------------------
Income (loss) before
income taxes and
minority interests (16.8) (20.8) 1.8 11.9 (23.9)
Provision for income tax
expense (benefit) (13.4) (7.5) 9.4 4.5 (7.0)
Minority interests, net
of tax (0.7) - (0.5) - (1.2)
---------------------------------------------
Net (loss) income $(2.7) $(13.3) $ (7.1) $ 7.4 $(15.7)
---------------------------------------------
Diluted Shares 57.3 57.3 57.3 57.3 57.3
---------------------------------------------
EPS $(0.05) $(0.23) $(0.12) $0.13 $(0.27)
---------------------------------------------
Effective tax rate 79.8% - - - 29.3%
---------------------------------------------
A schedule of historical financial and operating statistics is
available upon request and on Bowater's web site (www.bowater.com).
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