Bowater announces fourth quarter and 1995 results and election of new chairman.

GREENVILLE, S.C.--(BUSINESS WIRE)--Jan. 17, 1996--Bowater Incorporated (NYSE:BOW) today reported earnings for the 1995 fourth quarter of $95 million, or $2.10 per fully diluted share, before a $.22 per share charge for the repurchase of the Company's 8.4% Series C Cumulative Preferred Stock.

This compares to net income of $11 million, or $.17 per share, for the same period last year, before a $10 million gain after tax, or $.27 per share, on the sale of timberlands. 1995 fourth quarter sales were $544 million, compared to $382 million for the fourth quarter of 1994.

Net income for 1995 was $301 million, or $6.70 per fully diluted share, before charges related to a writedown of the company's investment in its Communications Papers Division, the repurchase of approximately $300 million of outstanding debt, a companywide personnel reduction program and the repurchase of preferred stock. Net income for 1995, including these charges, was $247 million, or $5.22 per share, compared to a net loss for 1994 of $5 million, or $.59 per share. Sales for 1995 were $2.0 billion compared to $1.4 billion in 1994.

Arnold M. Nemirow, President and Chief Executive Officer said, "We are pleased to report a record performance for 1995, driven by strong market conditions. Demand for our newsprint and coated groundwood grades has remained healthy throughout the year; however, demand for market pulp did weaken late in the fourth quarter. Cost and process improvements also contributed significantly to these results, while a 27% debt reduction strengthened our balance sheet and credit ratings. The company expects to complete timberland sales of almost $90 million in the first quarter of 1996, but recent negotiations for the sale of our Communications Papers Division ended without reaching a definitive agreement."

The Board of Directors announced the election of Arnold M. Nemirow as Chairman of the Board, effective March 31, 1996. Mr. Nemirow already holds the titles of President and Chief Executive Officer. Mr. Nemirow will assume the duties of Chairman from Anthony P. Gammie, who has held that position since 1985 and is retiring.

Bowater Incorporated is the largest producer of newsprint in the U.S., and also makes coated and uncoated groundwood papers, bleached kraft pulp, continuous computer forms and lumber products. It has five paper mills, eight converting plans and 3.6 million acres of timberlands in the U.S. and Canada. Bowater Incorporated common stock is listed on the New York Stock Exchange, U.S. regional exchanges, the London Stock Exchange and the Swiss Stock Exchanges. -0-

BOWATER INCORPORATED AND SUBSIDIARIES
Consolidated Statement of Operations
(Unaudited, in 000's except per share amounts)

                                    Quarter Ended
                               December 31, December 31,
                                  1995         1994

Net sales                     $  543,920   $  381,887
Cost of sales                    301,957      274,952
Depreciation, amortization
  and cost of timber harvested    43,583       43,954
    Gross profit                 198,380       62,981
Selling and administrative
  expense                         18,698       21,288
    Operating income             179,682       41,693
Other expense (income):
  Interest income                 (3,353)      (2,196)
  Interest expense, net
    of capitalized interest       17,895       24,626
  Gain on sale of
    timberlands (2)                 (278)     (15,121)
  Writedown of investment in
    BCPI and related expenses         ---          ---
  Other, net                       1,461        5,145
    Income before income
      taxes and minority
      interests                  163,957       29,239
Provision for income taxes        60,740       10,729
Minority interests                 7,959       (2,461)
    Income before
      extraordinary charge        95,258       20,971
Extraordinary charge, net
  of taxes of $7,084                  ---          ---
    Net income                $   95,258   $   20,971

Earnings per common and common equivalent share:
  Income before
    extraordinary charge (4)  $     1.92   $     0.44
  Extraordinary charge                ---          ---
   Net income        (4)      $     1.92   $     0.44
  Average common and common
   equivalent shares
   outstanding (4)                43,680       36,959
Earnings per common share - assuming full dilution:
  Income before
    extraordinary charge (4)  $     1.88   $     0.44
  Extraordinary charge                ---          ---
   Net income        (4)      $     1.88   $     0.44
  Average common and common
   equivalent shares
   outstanding (4)                44,561       36,959

                                    Twelve Months
                               December 31, December 31,
                                  1995          1994
Net sales                     $2,001,141   $ 1,358,996
Cost of sales                  1,183,977(1)  1,072,492
Depreciation, amortization
  and cost of timber harvested   174,176       168,352
    Gross profit                 642,988       118,152
Selling and administrative
  expense                         93,737(1)     76,052
    Operating income             549,251        42,100
Other expense (income):
  Interest income                 (8,923)       (8,255)
  Interest expense, net
    of capitalized interest       80,513        98,848
  Gain on sale of
    timberlands (2)               (2,152)      (43,100)
  Writedown of investment in
    BCPI and related expenses     30,000            ---
  Other, net                     (14,757)(3)     1,442
    Income (loss) before
      income taxes and
      minority interests         464,570        (6,835)
Provision for income taxes       183,090        (4,783)
Minority interests                23,235         2,772
    Income (loss) before
      extraordinary charge       258,245        (4,824)
Extraordinary charge, net
  of taxes of $7,084             (11,317)           ---
    Net income (loss)         $  246,928   $    (4,824)

Earnings (loss) per common and common equivalent share:
  Income (loss) before
    extraordinary charge (4)  $     5.60   $     (0.59)
  Extraordinary charge             (0.27)           ---
   Net income (loss) (4)      $     5.33   $     (0.59)
  Average common and common
   equivalent shares
   outstanding (4)                42,567        36,566
Earnings (loss) per common share - assuming full dilution:
  Income (loss) before
    extraordinary charge (4)  $     5.48   $     (0.59)
  Extraordinary charge             (0.26)           ---
   Net income (loss) (4)      $     5.22   $     (0.59)
  Average common and common
   equivalent shares
   outstanding (4)                43,448        36,566

(1) Cost of sales and selling and administrative expense include
charges of approximately $17,000 and $7,000 respectively relating to
the company's previously announced companywide personnel reductions.

(2) During the first quarter of 1996, the Company expects to
complete additional timberland sales of approximately $90 million,
resulting in an after-tax gain of approximately $38 million or $.86
per fully diluted share.

(3) Other, net includes a settlement of a disputed charge of $7,100
with an equipment vendor.

(4) The average number of common and common equivalent shares
outstanding increased at December 31, 1995, by 4.0 million and 4.9
million for the primary and fully diluted earnings per share
calculations respectively, as compared to December 31, 1994.  The
company's Series B preferred stock is considered a common stock
equivalent.  The effect of the conversion of the Series B preferred
stock was antidilutive in 1994 and therefore those shares were not
used in calculating 1994's earnings per share.  The calculation of
earnings per share for the quarter and twelve months ended December
31, 1995, includes a deduction of $1,562 and $10,042, respectively,
for the dividend requirements of the company's LIBOR and Series C
preferred stock and the amortization of the difference between the
net proceeds from the LIBOR preferred stock and its mandatory
redemption value.  In addition, the calculation of earnings per share
for the quarter and twelve months ended December 31, 1995 includes a
deduction of $9,883 for fees and expenses relating to the partial
redemption of the Company's Series C Preferred Stock.  For the
quarter and twelve months ended December 31, 1994, the calculation of
income/loss per share includes a deduction of $4,759 and $16,925,
respectively, for the same items and the dividend requirement of the
company's Series B preferred stock.

                    BOWATER INCORPORATED AND SUBSIDIARIES
                          (Unaudited, $ in 000's)

Consolidated Balance Sheet                   December 31,December 31,
                                                1995        1994
Current assets:
Cash and cash equivalents                   $  264,571  $  154,768
Accounts receivable,  net                      241,847     197,473
Inventories                                    154,662     151,097
Other current assets                            12,943      10,487
  Total current assets                         674,023     513,825

Timber and timberlands                         430,400     426,354
Fixed assets, net                            1,711,003   1,785,046
Intangible assets                               23,733      54,721
Other assets                                    69,006      71,416
                                            $2,908,165  $2,851,362
Current liabilities:
Current instalments of long-term debt       $    1,600  $    1,604
Accounts payable and accrued liabilities       189,424     184,766
Income taxes payable                            85,472      13,966
Dividends payable                                8,826      10,276
  Total current liabilities                    285,322     210,612

Long-term debt, net of current instalments     816,532   1,116,887
Other long-term liabilities                    181,411     157,936
Deferred income taxes                          329,101     261,923
Minority interests in subsidiaries             150,768     142,087
Redeemable LIBOR preferred stock                49,619      74,492
Shareholders' equity                         1,095,412     887,425
                                            $2,908,165  $2,851,362

                                               Twelve Months Ended
Consolidated Cash Flow                       December 31,December 31,
                                                1995        1994

Cash flow from operating activities         $  607,681  $   80,904
Capital spending, net of land sales            (91,716)   (167,971)
Cash flow from (used for) financing activities:
  Cash dividends, including
    minority interests                         (41,783)    (34,900)
  Payments of long term debt                  (317,282)     (1,795)
  Issuance of Series B and C preferred stock        ---    193,225
  Partial redemption of LIBOR and Series C     (91,309)         ---
  Redemption of preferred stock of subsidiary  (15,000)     (2,500)
  Stock options exercised                       57,730       4,537
  Other                                          1,482       1,602
                                              (406,162)    160,169
Increase in cash and cash equivalents       $  109,803  $   73,102

CONTACT: Bowater Inc.

Media contact:

Robert D. Leahy

[phone] (Office)

[phone] (Home)

or

Analyst contact:

Donald J. D'Antuono

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