CREVE COEUR, Mo. and
CHICAGO, Aug. 3 /PRNewswire-FirstCall/ -- Smurfit-Stone
Container Corporation (NYSE: SSCC) today reported net income
attributable to common stockholders of $1.41
billion, or $5.41 per diluted
share, for the second quarter of 2010, compared with a net loss of
($91) million, or ($0.35) per diluted share in the first quarter of
2010, and net income of $155 million,
or $0.60 per diluted share, for the
second quarter of 2009.
Smurfit-Stone's second-quarter 2010 adjusted net income was
$2 million, or $0.01 per diluted share, compared with an
adjusted net loss of ($59) million,
or ($0.23) per diluted share, in the
first quarter of this year, and an adjusted net loss of
($21) million, or ($0.08) per diluted share, in the second quarter
of 2009. The most significant adjustment in the second
quarter of 2010 was exclusion of $1.42
billion of income, including tax benefits, related to the
Company's emergence from bankruptcy reorganization proceedings in
the U.S. and Canada.
|
Diluted Earnings Per Share
Attributable to Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
Second
|
|
First
|
|
Second
|
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
|
|
2010
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss)
|
$5.41
|
|
($0.35)
|
|
$0.60
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
($5.40)
|
|
$0.12
|
|
($0.68)
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(loss)
|
$0.01
|
|
($0.23)
|
|
($0.08)
|
|
|
|
|
|
|
|
|
The Company reported an operating loss of ($6) million for the three months ended
June 30, 2010, compared to an
operating loss of ($31) million in
the first quarter of 2010, and operating income of $271 million in the second quarter of 2009.
The second quarter 2010 operating loss was primarily driven
by a concentration of planned maintenance-related downtime.
Second quarter 2009 operating income was significantly
impacted by the income related to the alternative fuel tax credits
that were received in 2009.
Patrick J. Moore, Smurfit-Stone's
Chief Executive Officer, commented, "We believe our successful
financial restructuring positions us for long-term profitable
growth. We will continue to focus on what matters – serving
our customers, improving margins and delivering shareholder value.
Looking ahead, we are confident that continued high operating
rates, productivity improvements, higher average prices, and low
inventories combined with assumed stable demand will drive
significant earnings improvement in the second half of the year."
Adjusted EBITDA for the second quarter ended June 30, 2010, was $102
million compared with $46
million in the first quarter of this year and $103 million in the second quarter a year ago.
The improvement in adjusted EBITDA from the first quarter
reflects the benefits of higher selling prices and volumes, offset
by significant maintenance-related downtime and related
expenses.
Net sales for the second quarter of this year were $1.56 billion, compared with $1.46 billion in this year's first quarter and
$1.41 billion in the second quarter
of 2009. The improvement in second quarter 2010 net sales is
primarily due to higher average selling prices and corrugated
container shipments during the period.
Second-Quarter 2010 Highlights
- The Company successfully emerged from its financial
reorganization on June 30 with a
significant reduction in leverage and a strong liquidity
position.
- Operating results improved significantly due to steady demand
improvement, higher capacity utilization, and improved selling
prices.
- Continuing year-to-date productivity gains included a 5 percent
improvement in tons per operating day per facility in our
containerboard mills and a 3 percent improvement in average units
of production per machine hour in our converting facilities.
- The Company closed three converting facilities.
Year-to-Date Results
For the six months ended June 30,
2010, net income was $1.32
billion, or $5.07 per diluted
share, compared with a net loss of ($62)
million, or ($0.24) per
diluted share, in the first half of 2009.
Smurfit-Stone's first-half 2010 adjusted net loss was
($57) million, or ($0.20) per diluted share, compared with an
adjusted net loss of ($56) million,
or ($0.22) per diluted share, in the
first half of 2009.
The Company reported an operating loss of ($37) million for the six months ended
June 30, 2010, compared with
operating income of $265 million in
the first half of 2009, which was primarily attributable to the
alternative fuel tax credit income.
Other Financial Items
- As a result of emergence and fresh start accounting, as of
June 30, 2010, net property, plant
and equipment was fair valued at $4.41
billion, representing a write-up of $1.43 billion, goodwill of $126 million was recorded, and pension and
postretirement benefit liabilities were adjusted to $1.64 billion on the balance sheet.
- As of June 30, 2010,
Smurfit-Stone had net tax operating loss carryforwards (NOLs) for
U.S. federal income tax purposes of $722
million. As a result of the NOL carryforwards and the
tax benefit of projected pension contributions described below, the
Company estimates it will have limited cash tax obligations in the
U.S. for at least the next several years.
- The Company's defined benefit pension plans in the U.S. and
Canada were underfunded at
June 30, 2010, by approximately
$1.45 billion combined. The
Company's current annual funding requirements are estimated to be
$77 million for 2010, and
$235 million in 2011, with
contributions increasing to a range of approximately $270 million to $300 million through 2014.
- Capital expenditures for the first half of 2010 totaled
$83 million. The Company
expects its capital expenditures for 2010 will be approximately
$200 million.
Outlook
Smurfit-Stone expects its operating rates to remain at high
levels throughout the remainder of the year. Input costs,
particularly fiber, energy and transportation, have stabilized
moving into the second half of the year. The price increases
announced in the first and second quarters are expected to be
substantially reflected in earnings during the second half of this
year. With the impact of the reorganization now complete, the
Company expects to be solidly profitable in the third quarter and
to achieve positive earnings and free cash flow for the second half
of 2010.
As previously announced, the Company's Chief Executive Officer,
Patrick J. Moore, will retire by
early 2011. The Company's Board of Directors is launching a
confidential search for a chief executive officer. A search
is also currently underway for a chief financial officer.
Both searches are expected to be completed by the end of the
year.
Conference Call and Webcast
Smurfit-Stone will host a conference call for analysts,
institutional investors and shareholders on Tuesday, Aug. 3, 2010, at 10 a.m. Eastern Time. To access the call,
participants should dial the number below approximately 10 minutes
before the start time.
U.S. – (888) 679-8037 or International – (617) 213-4849
Passcode: 20306220
The call will also be webcast in a listen-only format with an
accompanying slide presentation and can be accessed at
www.smurfit-stone.com.
A replay of the conference call will be available through
Aug. 17, 2010. To access the
replay, dial (888) 286-8010 (U.S.) or (617) 801-6888
(International), and enter passcode 16228881.
A replay of the webcast will be available at
www.smurfit-stone.com.
Forward-Looking Statements
This press release contains statements relating to future
results, which are forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those projected as a
result of certain risks and uncertainties, including but not
limited to changes in general economic conditions, pricing
pressures in key product lines, seasonality, changes in input costs
including recycled fiber and energy costs, as well as other risks
and uncertainties described in the Company's Annual Report on Form
10-K for the year ended December 31,
2009, as updated from time to time in the Company's
Securities and Exchange Commission filings. In this press release,
certain non-U.S. GAAP financial information is presented. A
reconciliation of that information to U.S. GAAP financial measures
and additional disclosure regarding our use of non-GAAP financial
measures are included in the attached schedules. The Company
does not intend to review, revise or update any particular
forward-looking statements in light of future events.
About Smurfit-Stone
Smurfit-Stone Container Corporation is one of the industry's
leading integrated containerboard and corrugated packaging
producers and one of the world's largest paper recyclers.
Smurfit-Stone generated revenue of $5.57
billion in 2009, has led the industry in safety every year
since 2001, and conducts its business in compliance with the
environmental, health, and safety principles of the American Forest
& Paper Association. The company is a member of the
Sustainable Forestry Initiative® .
(Financial statements follow)
|
SMURFIT-STONE CONTAINER
CORPORATION
|
|
|
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
|
(Unaudited)
|
|
|
|
|
Predecessor
|
|
|
|
Three Months
Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
|
(In millions, except per share
data)
|
|
|
2010
|
|
2009
|
|
|
2010
|
|
|
|
2010
|
|
2009
|
|
|
Net sales
|
|
$
|
1,563
|
|
$ 1,407
|
|
$
|
1,461
|
|
|
$
|
3,024
|
|
$ 2,778
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
1,407
|
|
1,256
|
|
|
1,356
|
|
|
|
2,763
|
|
2,473
|
|
|
Selling and administrative
expenses
|
|
|
143
|
|
146
|
|
|
151
|
|
|
|
294
|
|
291
|
|
|
Restructuring (income)
expenses
|
|
|
19
|
|
11
|
|
|
(4)
|
|
|
|
15
|
|
24
|
|
|
(Gain) loss on disposal of
assets
|
|
|
|
(1)
|
|
|
|
|
|
|
|
|
1
|
|
|
Other operating
income
|
|
|
|
(276)
|
|
|
(11)
|
|
|
|
(11)
|
|
(276)
|
|
|
Operating income
(loss)
|
|
|
(6)
|
|
271
|
|
|
(31)
|
|
|
|
(37)
|
|
265
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(10)
|
|
(74)
|
|
|
(13)
|
|
|
|
(23)
|
|
(145)
|
|
|
Debtor-in-possession debt
issuance costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(63)
|
|
|
Loss on early extinguishment of
debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(20)
|
|
|
Foreign currency exchange gains
(losses)
|
|
|
9
|
|
(2)
|
|
|
(6)
|
|
|
|
3
|
|
1
|
|
|
Other, net
|
|
|
2
|
|
6
|
|
|
2
|
|
|
|
4
|
|
4
|
|
|
Income (loss) before
reorganization items and income taxes
|
|
|
(5)
|
|
201
|
|
|
(48)
|
|
|
|
(53)
|
|
42
|
|
|
Reorganization items income
(expense), net
|
|
|
1,219
|
|
(39)
|
|
|
(41)
|
|
|
|
1,178
|
|
(93)
|
|
|
Income (loss) before income
taxes
|
|
|
1,214
|
|
162
|
|
|
(89)
|
|
|
|
1,125
|
|
(51)
|
|
|
(Provision for) benefit from
income taxes
|
|
|
199
|
|
(4)
|
|
|
|
|
|
|
199
|
|
(5)
|
|
|
Net income (loss)
|
|
|
1,413
|
|
158
|
|
|
(89)
|
|
|
|
1,324
|
|
(56)
|
|
|
Preferred stock dividends and
accretion
|
|
|
(2)
|
|
(3)
|
|
|
(2)
|
|
|
|
(4)
|
|
(6)
|
|
|
Net income (loss) attributable
to common stockholders
|
|
$
|
1,411
|
|
$ 155
|
|
$
|
(91)
|
|
|
$
|
1,320
|
|
$ (62)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to common stockholders
|
|
$
|
5.47
|
|
$ 0.60
|
|
$
|
(0.35)
|
|
|
$
|
5.12
|
|
$ (0.24)
|
|
|
Weighted average shares
outstanding
|
|
|
258
|
|
257
|
|
|
258
|
|
|
|
258
|
|
257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to common stockholders
|
|
$
|
5.41
|
|
$ 0.60
|
|
$
|
(0.35)
|
|
|
$
|
5.07
|
|
$ (0.24)
|
|
|
Weighted average shares
outstanding
|
|
|
261
|
|
257
|
|
|
258
|
|
|
|
261
|
|
257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SMURFIT-STONE CONTAINER
CORPORATION
|
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
|
|
Successor
June 30,
|
|
Predecessor
December 31,
|
|
|
(In millions, except share
data)
|
|
|
2010
|
|
2009
|
|
|
Assets
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
340
|
|
$
704
|
|
|
Restricted cash
|
|
|
7
|
|
9
|
|
|
Receivables
|
|
|
750
|
|
674
|
|
|
Inventories
|
|
|
496
|
|
452
|
|
|
Refundable income
taxes
|
|
|
31
|
|
23
|
|
|
Prepaid expenses and other
current assets
|
|
|
47
|
|
43
|
|
|
Total current assets
|
|
|
1,671
|
|
1,905
|
|
|
Net property, plant and
equipment
|
|
|
4,405
|
|
3,081
|
|
|
Deferred income taxes
|
|
|
|
23
|
|
|
Goodwill
|
|
|
126
|
|
|
|
|
Intangible assets,
net
|
|
|
77
|
|
|
|
|
Other assets
|
|
|
121
|
|
68
|
|
|
|
$
|
6,400
|
|
$
5,077
|
|
|
Liabilities and Stockholders'
Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities not subject to
compromise
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Current maturities of long-term
debt
|
|
$
|
18
|
|
$
1,354
|
|
|
Accounts payable
|
|
|
515
|
|
387
|
|
|
Accrued compensation and payroll
taxes
|
|
|
176
|
|
145
|
|
|
Interest payable
|
|
|
5
|
|
12
|
|
|
Other current
liabilities
|
|
|
81
|
|
164
|
|
|
Total current
liabilities
|
|
|
795
|
|
2,062
|
|
|
Long-term debt, less current
maturities
|
|
|
1,188
|
|
|
|
|
Pension and postretirement
benefits, net of current portion
|
|
|
1,639
|
|
|
|
|
Other long-term
liabilities
|
|
|
140
|
|
117
|
|
|
Deferred income taxes
|
|
|
286
|
|
|
|
|
Total liabilities not
subject to compromise
|
|
|
4,048
|
|
2,179
|
|
|
|
|
|
|
|
|
|
Liabilities subject to
compromise
|
|
|
|
|
4,272
|
|
|
Total
liabilities
|
|
|
4,048
|
|
6,451
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
|
Successor preferred stock, par
value $.001 per share; 10,000,000 shares authorized;
|
|
|
|
|
|
|
|
none issued and outstanding in
2010
|
|
|
|
|
|
|
|
Successor common stock, par
value $.001 per share; 150,000,000 shares authorized;
90,702,816
|
|
|
|
|
|
|
|
issued and outstanding in
2010
|
|
|
|
|
|
|
|
Predecessor preferred stock,
aggregate liquidation preference of $126;
|
|
|
|
|
|
|
|
25,000,000 shares authorized;
4,599,300 issued and outstanding in 2009
|
|
|
|
104
|
|
|
Predecessor common stock, par
value $.01 per share; 400,000,000 shares authorized;
|
|
|
|
|
|
|
|
257,482,839 issued and
outstanding in 2009
|
|
|
|
|
3
|
|
|
Additional paid-in
capital
|
|
|
2,352
|
|
4,081
|
|
|
Retained earnings
(deficit)
|
|
|
|
|
(4,883)
|
|
|
Accumulated other comprehensive
income (loss)
|
|
|
|
|
(679)
|
|
|
Total stockholders' equity
(deficit)
|
|
|
2,352
|
|
(1,374)
|
|
|
|
$
|
6,400
|
|
$
5,077
|
|
|
|
|
|
|
|
|
SMURFIT-STONE CONTAINER
CORPORATION
|
|
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Predecessor
|
|
|
|
|
2010
|
|
|
|
|
|
|
Pre
|
|
|
|
Post
|
|
|
|
|
Six Months Ended June 30, (In
millions)
|
|
|
Emergence
|
|
Adjustments
|
|
Emergence
|
|
2009
|
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
|
$
(198)
|
|
$
1,522
|
|
$
1,324
|
$
|
(56)
|
|
|
Adjustments to reconcile
net income (loss) to net cash provided by
(used for)
operating activities
|
|
|
|
|
|
|
|
|
|
|
|
Loss on early extinguishment of
debt
|
|
|
|
|
|
|
|
|
20
|
|
|
Depreciation, depletion and
amortization
|
|
|
168
|
|
|
|
168
|
|
182
|
|
|
Debtor-in-possession debt
issuance costs
|
|
|
|
|
|
|
|
63
|
|
|
Amortization of deferred debt
issuance costs
|
|
|
|
|
|
|
|
3
|
|
|
Deferred income taxes
|
|
|
(1)
|
|
(200)
|
|
(201)
|
|
3
|
|
|
Pension and postretirement
benefits
|
|
|
50
|
|
|
|
50
|
|
20
|
|
|
Loss on disposal of
assets
|
|
|
|
|
|
|
|
|
1
|
|
|
Non-cash restructuring
expense
|
|
|
7
|
|
|
|
7
|
|
4
|
|
|
Non-cash stock-based
compensation
|
|
|
3
|
|
|
|
3
|
|
4
|
|
|
Non-cash foreign currency
exchange gains
|
|
|
(3)
|
|
|
|
(3)
|
|
(1)
|
|
|
Gain due to plan
effects
|
|
|
|
|
(580)
|
|
(580)
|
|
|
|
|
Gain due to fresh start
accounting adjustments
|
|
|
|
|
(742)
|
|
(742)
|
|
|
|
|
Payment to settle non-debt
liabilities subject to compromise
|
|
|
|
|
(202)
|
|
(202)
|
|
|
|
|
Non-cash reorganization
items
|
|
|
101
|
|
|
|
101
|
|
61
|
|
|
Change in restricted cash for
utility deposits
|
|
|
2
|
|
|
|
2
|
|
(13)
|
|
|
Change in operating assets and
liabilities,
|
|
|
|
|
|
|
|
|
|
|
|
net of effects from acquisitions
and dispositions
|
|
|
|
|
|
|
|
|
|
|
|
Receivables and retained interest in
receivables sold
|
|
|
(129)
|
|
|
|
(129)
|
|
(38)
|
|
|
Receivable for alternative energy tax
credits
|
|
|
48
|
|
|
|
48
|
|
(89)
|
|
|
Inventories
|
|
|
1
|
|
|
|
1
|
|
19
|
|
|
Prepaid expenses and other current
assets
|
|
|
1
|
|
|
|
1
|
|
(5)
|
|
|
Accounts payable and accrued
liabilities
|
|
|
57
|
|
|
|
57
|
|
204
|
|
|
Interest payable
|
|
|
2
|
|
|
|
2
|
|
77
|
|
|
Other, net
|
|
|
8
|
|
|
|
8
|
|
33
|
|
|
Net cash provided by (used for)
operating activities
|
|
|
117
|
|
(202)
|
|
(85)
|
|
492
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
|
|
|
|
Expenditures for property, plant
and equipment
|
|
|
(83)
|
|
|
|
(83)
|
|
(69)
|
|
|
Proceeds from property
disposals
|
|
|
10
|
|
|
|
10
|
|
4
|
|
|
Advances to affiliates,
net
|
|
|
|
|
|
|
|
|
(15)
|
|
|
Net cash used for investing
activities
|
|
|
(73)
|
|
|
|
(73)
|
|
(80)
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exit credit
facility
|
|
|
|
|
1,200
|
|
1,200
|
|
|
|
|
Original issue
discount
|
|
|
|
|
(12)
|
|
(12)
|
|
|
|
|
Proceeds from
debtor-in-possession financing
|
|
|
|
|
|
|
|
|
440
|
|
|
Net borrowings (repayments) of
long-term debt
|
|
|
(1)
|
|
(1,346)
|
|
(1,347)
|
|
60
|
|
|
Repurchase of
receivables
|
|
|
|
|
|
|
|
|
(385)
|
|
|
Debtor-in-possession debt
issuance costs
|
|
|
|
|
|
|
|
|
(63)
|
|
|
Debt issuance costs on exit
credit facility
|
|
|
(15)
|
|
(32)
|
|
(47)
|
|
|
|
|
Change in restricted cash for
collateralizing outstanding
|
|
|
|
|
|
|
|
|
|
|
|
letters of
credit
|
|
|
(11)
|
|
11
|
|
|
|
|
|
|
Net cash provided by (used for)
financing activities
|
|
|
(27)
|
|
(179)
|
|
(206)
|
|
52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and
cash equivalents
|
|
|
17
|
|
(381)
|
|
(364)
|
|
464
|
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
704
|
|
|
|
704
|
|
126
|
|
|
End of period
|
|
|
$
721
|
|
$
(381)
|
|
$
340
|
$
|
590
|
|
|
|
|
|
|
|
|
|
|
|
|
SMURFIT-STONE CONTAINER
CORPORATION
|
|
|
REORGANIZED CONSOLIDATED BALANCE
SHEET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2010
|
|
|
(In millions)
|
|
Predecessor
|
|
Plan Effect
Adjustments
|
|
Fresh Start
Adjustments
|
|
Successor
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
721
|
|
$
(381)
|
|
$
|
|
$
340
|
|
|
Restricted cash
|
|
18
|
|
(11)
|
|
|
|
7
|
|
|
Receivables
|
|
750
|
|
|
|
|
|
750
|
|
|
Inventories
|
|
449
|
|
|
|
47
|
|
496
|
|
|
Refundable income
taxes
|
|
24
|
|
7
|
|
|
|
31
|
|
|
Prepaid expenses and other
current assets
|
|
42
|
|
|
|
5
|
|
47
|
|
|
Total current assets
|
|
2,004
|
|
(385)
|
|
52
|
|
1,671
|
|
|
Net property, plant and
equipment
|
|
2,979
|
|
|
|
1,426
|
|
4,405
|
|
|
Deferred income taxes
|
|
22
|
|
148
|
|
(170)
|
|
|
|
|
Goodwill
|
|
|
|
|
|
126
|
|
126
|
|
|
Intangible assets,
net
|
|
|
|
|
|
77
|
|
77
|
|
|
Other assets
|
|
75
|
|
31
|
|
15
|
|
121
|
|
|
|
$
5,080
|
|
$
(206)
|
|
$
1,526
|
|
$
6,400
|
|
|
Liabilities and Stockholders'
Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities not subject to
compromise
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
Current maturities of long-term
debt
|
|
$
1,352
|
|
$
(1,334)
|
|
$
|
|
$
18
|
|
|
Accounts payable
|
|
488
|
|
27
|
|
|
|
515
|
|
|
Accrued compensation and payroll
taxes
|
|
139
|
|
34
|
|
3
|
|
176
|
|
|
Interest payable
|
|
12
|
|
(7)
|
|
|
|
5
|
|
|
Other current
liabilities
|
|
141
|
|
(59)
|
|
(1)
|
|
81
|
|
|
Total current
liabilities
|
|
2,132
|
|
(1,339)
|
|
2
|
|
795
|
|
|
Long-term debt, less current
maturities
|
|
|
|
1,176
|
|
12
|
|
1,188
|
|
|
Pension and postretirement
benefits, net of current portion
|
|
|
|
1,179
|
|
460
|
|
1,639
|
|
|
Other long-term
liabilities
|
|
116
|
|
|
|
24
|
|
140
|
|
|
Deferred income taxes
|
|
|
|
|
|
286
|
|
286
|
|
|
Total liabilities not
subject to compromise
|
|
2,248
|
|
1,016
|
|
784
|
|
4,048
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities subject to
compromise
|
|
4,354
|
|
(4,354)
|
|
|
|
|
|
|
Total
liabilities
|
|
6,602
|
|
(3,338)
|
|
784
|
|
4,048
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
successor
|
|
|
|
|
|
|
|
Common stock
successor
|
|
|
|
|
|
|
|
Preferred stock
predecessor
|
|
104
|
|
(104)
|
|
|
|
|
|
|
Common stock
predecessor
|
|
3
|
|
(3)
|
|
|
|
|
|
|
Additional paid-in
capital
|
|
4,084
|
|
(1,732)
|
|
|
|
2,352
|
|
|
Retained earnings
(deficit)
|
|
(5,081)
|
|
4,971
|
|
110
|
|
|
|
|
Accumulated other comprehensive
income (loss)
|
|
(632)
|
|
|
|
632
|
|
|
|
|
Total stockholders' equity
(deficit)
|
|
(1,522)
|
|
3,132
|
|
742
|
|
2,352
|
|
|
|
$
5,080
|
|
$
(206)
|
|
$
1,526
|
|
$
6,400
|
|
|
|
|
|
|
|
|
|
|
|
SMURFIT-STONE CONTAINER
CORPORATION
|
|
|
ADJUSTED NET INCOME (LOSS) PER
DILUTED SHARE
|
|
|
(In Millions, Except Per Share
Data)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q 10
|
2Q 09
|
1Q 10
|
1H 10
|
1H 09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to common stockholders (GAAP)
|
$ 1,411
|
$
155
|
$
(91)
|
$ 1,320
|
$
(62)
|
|
|
Reorganization items (income)
expense, net of income taxes
|
(1,419)
|
39
|
41
|
(1,378)
|
93
|
|
|
Debtor-in-possession financing
costs
|
-
|
-
|
-
|
-
|
63
|
|
|
Alternative fuel mixture tax
credits
|
-
|
(276)
|
(11)
|
(11)
|
(276)
|
|
|
Loss on early extinguishment of
debt
|
-
|
-
|
-
|
-
|
20
|
|
|
Non-cash foreign currency
exchange (gains)/losses
|
(9)
|
2
|
6
|
(3)
|
(1)
|
|
|
Interest on unsecured
debt
|
-
|
48
|
-
|
-
|
83
|
|
|
Restructuring (income)
charges
|
19
|
11
|
(4)
|
15
|
24
|
|
|
Adjusted net income (loss)
attributable to common stockholders (Note 1)
|
$
2
|
$
(21)
|
$
(59)
|
$
(57)
|
$
(56)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q 10
|
2Q 09
|
1Q 10
|
1H 10
|
1H 09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per diluted
share attributable to common stockholders (GAAP)
|
$
5.41
|
$
0.60
|
$
(0.35)
|
$
5.07
|
$
(0.24)
|
|
|
Reorganization items (income)
expense, net of income taxes
|
(5.44)
|
0.15
|
0.16
|
(5.28)
|
0.36
|
|
|
Debtor-in-possession financing
costs
|
-
|
-
|
-
|
-
|
0.24
|
|
|
Alternative fuel mixture tax
credits
|
-
|
(1.07)
|
(0.04)
|
(0.04)
|
(1.07)
|
|
|
Loss on early extinguishment of
debt
|
-
|
-
|
-
|
-
|
0.08
|
|
|
Non-cash foreign currency
exchange (gains)/losses
|
(0.03)
|
0.01
|
0.02
|
(0.01)
|
-
|
|
|
Interest on unsecured
debt
|
-
|
0.19
|
-
|
-
|
0.32
|
|
|
Restructuring (income)
charges
|
0.07
|
0.04
|
(0.02)
|
0.06
|
0.09
|
|
|
Adjusted net income (loss) per
diluted share attributable to common stockholders (Note
1)
|
$
0.01
|
$
(0.08)
|
$
(0.23)
|
$
(0.20)
|
$
(0.22)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 1: Exclusive of
reorganization items (income) expense, debtor-in-possession
financing costs, alternative fuel mixture
tax credits, loss on early
extinguishment of debt, non-cash foreign currency (gains) losses,
accrued but unpaid interest on
unsecured debt and restructuring
(income) charges. Adjusted net income (loss) attributable to
common stockholders and
adjusted net income (loss) per
diluted share attributable to common stockholders are non-GAAP
financial measures.
See disclosure regarding the use
of non-GAAP financial measures following these financial
statements.
|
|
|
Diluted earnings per common
share computations for the three and six months ended June 30, 2010
were adjusted to reflect
the assumed conversion of
preferred stock into common stock because the effect was
dilutive.
|
|
|
|
|
|
|
|
|
|
SMURFIT-STONE CONTAINER
CORPORATION
|
|
|
EBITDA, As Defined
Below
|
|
|
(In millions)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
2Q 10
|
|
1Q 10
|
|
2Q 09
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
$ 1,563
|
|
$ 1,461
|
|
$ 1,407
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$ 1,413
|
|
$
(89)
|
|
$
158
|
|
|
(Benefit from) provision for
income taxes
|
(199)
|
|
-
|
|
4
|
|
|
Interest expense,
net.
|
10
|
|
13
|
|
74
|
|
|
Depreciation, depletion and
amortization
|
83
|
|
85
|
|
92
|
|
|
EBITDA
|
1,307
|
|
9
|
|
328
|
|
|
|
|
|
|
|
|
|
|
Reorganization items (income)
expense
|
(1,219)
|
|
41
|
|
39
|
|
|
Restructuring (income)
charges
|
19
|
|
(4)
|
|
11
|
|
|
Alternative fuel mixture tax
credits
|
-
|
|
(11)
|
|
(276)
|
|
|
Non-cash foreign currency
exchange (gains) losses
|
(9)
|
|
6
|
|
2
|
|
|
Other
|
4
|
|
5
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$
102
|
|
$
46
|
|
$
103
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
6.5%
|
|
3.1%
|
|
7.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Information:
|
|
|
|
|
|
|
|
Capital Expenditures
|
$
49
|
|
$
34
|
|
$
30
|
|
|
Pension Expense
|
34
|
|
31
|
|
30
|
|
|
Pension Contribution
|
12
|
|
2
|
|
-
|
|
|
Cash Taxes
|
1
|
|
2
|
|
-
|
|
|
Change in Working
Capital
|
(2)
|
|
(18)
|
|
62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
"EBITDA" is defined as net
income (loss) before (benefit from) provision for income
taxes, interest expense, net and
depreciation, depletion and amortization. "Adjusted
EBITDA" is defined
as EBITDA adjusted as indicated
above. EBITDA and Adjusted
EBITDA are non-GAAP financial
measures. See disclosure regarding the use of
non-GAAP financial measures
following these financial statements.
|
|
|
|
|
|
|
|
|
|
SMURFIT-STONE CONTAINER
CORPORATION
|
|
|
STATISTICAL
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
1st Qtr
|
2nd Qtr
|
June YTD
|
|
1st Qtr
|
2nd Qtr
|
June YTD
|
|
|
|
|
|
|
|
|
|
|
|
|
Containerboard System
|
|
|
|
|
|
|
|
|
|
North American Mill Operating
Rates (Containerboard Only)
|
100.0%
|
97.1%
|
98.9%
|
|
82.4%
|
85.0%
|
83.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
North American Containerboard
Production - M Tons
|
1,585
|
1,545
|
3,130
|
|
1,435
|
1,497
|
2,932
|
|
|
Sequential Avg. Domestic
Linerboard Price Change
|
6.3%
|
13.2%
|
N/A
|
|
-7.4%
|
-9.8%
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
Pulp Production - M
Tons
|
62
|
72
|
134
|
|
66
|
76
|
142
|
|
|
SBS/Bleached Board Production -
M Tons
|
35
|
31
|
66
|
|
33
|
32
|
65
|
|
|
Kraft Paper Production - M
Tons
|
29
|
26
|
55
|
|
19
|
28
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Maintenance Downtime Tons
- M Tons
|
20
|
76
|
96
|
|
46
|
50
|
96
|
|
|
|
|
|
|
|
|
|
|
|
|
Corrugated Containers
|
|
|
|
|
|
|
|
|
|
North American Shipments -
BSF
|
16.4
|
17.3
|
33.7
|
|
16.6
|
16.7
|
33.3
|
|
|
Per Day North American Shipments
- MMSF
|
260.9
|
273.7
|
267.3
|
|
267.8
|
265.7
|
266.7
|
|
|
Sequential Avg. Corrugated Price
Change
|
-0.6%
|
3.6%
|
N/A
|
|
-0.9%
|
-3.0%
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiber Reclaimed and Brokered - M
Tons
|
1,423
|
1,468
|
2,891
|
|
1,241
|
1,280
|
2,521
|
|
|
|
|
|
|
|
|
|
|
SMURFIT-STONE CONTAINER CORPORATION
NON-GAAP FINANCIAL MEASURES
In the accompanying financial presentation, we use the financial
measures "adjusted net income (loss) attributable to common
stockholders" (adjusted net income (loss)), "adjusted net income
(loss) per diluted share attributable to common stockholders"
(adjusted net income (loss) per diluted share), "EBITDA" and
"adjusted EBITDA" which are derived from our consolidated financial
information but are not presented in our financial statements
prepared in accordance with U.S. generally accepted accounting
principles (GAAP). These measures are considered "non-GAAP
financial measures" under the U.S. Securities and Exchange
Commission (SEC) rules. Adjusted net income (loss) and
adjusted net income (loss) per diluted share are non-GAAP financial
measures that exclude from net income (loss) attributable to common
stockholders the effects of reorganization items (income) expense,
debtor-in-possession financing costs, alternative fuel mixture tax
credits, loss on early extinguishment of debt, restructuring
(income) charges, non-cash foreign currency exchange (gains)
losses, and interest on unsecured debt. EBITDA is defined as
net income (loss) before (provision for) benefit from income taxes,
interest expense, net and depreciation, depletion and amortization.
Adjusted EBITDA is defined as EBITDA adjusted for
reorganization items (income) expense, debtor-in-possession
financing costs, alternative fuel mixture tax credits, loss on
early extinguishment of debt, non-cash foreign currency exchange
(gains) losses, (gain) loss on sale of assets, restructuring
charges and other adjustments.
The accompanying financial presentation includes a
reconciliation of net income (loss) attributable to common
stockholders and net income (loss) per diluted share attributable
to common stockholders, the most directly comparable GAAP financial
measures, to adjusted net income (loss) and adjusted net income
(loss) per diluted share, respectively. A reconciliation of
net (income) loss to EBITDA and adjusted EBITDA is also
presented.
We use these supplemental non-GAAP measures to evaluate
performance period over period, to analyze the underlying trends in
our business, to assess our performance relative to our competitors
and to establish operational goals and forecasts that are used in
allocating resources. These non-GAAP measures of operating results
are reported to our board of directors, chief executive officer and
our president and chief operating officer and are used to make
strategic and operating decisions and assess performance.
These non-GAAP measures are presented to enhance an understanding
of our operating results and are not intended to represent cash
flows or results of operations. We also believe these
non-GAAP measures are beneficial to investors, potential investors
and other key stakeholders, including analysts and creditors who
use these measures in their evaluations of our performance from
period to period and against the performance of other companies in
our industry. Our creditors also use these measures to evaluate our
ability to service our debt. The use of these non-GAAP
financial measures is beneficial to these stakeholders because they
exclude certain items that management believes are not indicative
of the on-going operating performance of our business, and
including them would distort comparisons to our past operating
performance. Accordingly, we have excluded the adjustments,
as detailed below, for the purpose of calculating these non-GAAP
measures.
The following is an explanation of each of the adjustments that
we have made to arrive at these non-GAAP measures for the three and
six months ended June 30, 2010 and
2009, as well as the reasons management believes each of these
items is not indicative of operating performance:
- Reorganization items (income) expense, net of income taxes -
These income and expense items are directly related to the process
of our reorganizing under Chapter 11 and the Companies' Creditors
Arrangement Act in Canada.
The items include gain due to plan effects, gain due to fresh
start accounting adjustments, provision for rejected/settled
executory contracts and leases, accounts payable settlement gains
and professional fees. These income and expense items are not
considered indicative of our ongoing operating performance and are
not used by us to assess our operating performance.
- Debtor-in-possession (DIP) financing costs - These expenses
were incurred and paid during the first quarter of 2009 in
connection with entering into the DIP Credit Agreement. These
expense items are not considered indicative of our ongoing
operating performance and are not used by us to assess our
operating performance.
- Alternative fuel mixture tax credits - These amounts represent
an excise tax credit for alternative fuel mixtures produced by a
taxpayer for sale, or for use as a fuel in a taxpayer's trade or
business, through December 31, 2009,
at which time the credit expired. These items are not
considered indicative of our ongoing operating performance and are
not used by us to assess our operating performance.
- Loss on early extinguishment of debt - These losses represent
unamortized deferred debt issuance cost and call premiums charged
to expense in connection with our financing activities. These
losses were not considered indicative of our ongoing operating
performance because they related to specific financing activities
and were not used by us to assess our operating performance.
- Non-cash foreign currency (gains) losses- The functional
currency for our Canadian operations was the U.S. dollar.
Fluctuations in Canadian dollar-denominated monetary assets and
liabilities resulted in non-cash gains or losses. We excluded
the impact of foreign currency exchange gains and losses because
the impact of foreign exchange is highly variable and difficult to
predict from period to period and is not tied to our operating
performance. These gains or losses are not considered
indicative of our ongoing operating performance and are not used by
us to assess our operating performance.
- Interest on unsecured debt - These amounts represent the
post-petition interest accrued on unsecured debt from the time of
our bankruptcy filing, which was stayed and not paid as a result of
the bankruptcy proceedings. In the fourth quarter of 2009, we
concluded it was not probable that interest expense that was
accrued from the time of our bankruptcy filing through November 30, 2009, would be an allowed claim.
This expense was not considered indicative of our ongoing
operating performance and was excluded by management in assessing
our operating performance.
- Restructuring (income) charges - These adjustments represent
the write-down of assets, primarily property, plant and equipment,
to estimated net realizable values, the acceleration of
depreciation for equipment to be abandoned or taken out of service,
severance costs and other costs associated with our restructuring
activities. These income and expense items were not considered
indicative of our ongoing operating performance and were excluded
by management in assessing our operating performance.
- (Gain) loss on sale of assets – These amounts represent gains
and losses we recognized related to the sale of non-strategic
assets. These gains and losses were not considered indicative
of ongoing operating performance and were excluded by management in
assessing our operating performance.
- Other - These adjustments principally represent amounts accrued
under our 2009 long-term incentive plan. These income and
expense items were not considered indicative of our ongoing
operating performance and were excluded by management in assessing
our operating performance.
Adjusted net income (loss), adjusted net income (loss) per
diluted share, EBITDA and adjusted EBITDA have certain material
limitations associated with their use as compared to net income
(loss). These limitations are primarily due to the exclusion
of certain amounts that are material to our consolidated results of
operations, as discussed above. In addition, these adjusted
net income (loss) and EBITDA measures may differ from adjusted net
income (loss) and EBITDA calculations of other companies in our
industry, limiting their usefulness as comparative measures.
Because of these limitations, adjusted net income (loss),
adjusted net income (loss) per diluted share, EBITDA and adjusted
EBITDA should be read in conjunction with our consolidated
financial statements prepared in accordance with GAAP. We
compensate for these limitations by relying primarily on our GAAP
results and using adjusted net income (loss), adjusted net income
(loss) per diluted share, EBITDA and adjusted EBITDA only as
supplemental measures of our operating performance. The
presentation of this additional information is not meant to be
considered in isolation or as a substitute for financial statements
prepared in accordance with GAAP.
We believe that providing these non-GAAP measures in addition to
the related GAAP measures provides investors greater transparency
to the information our management uses for financial and
operational decision-making and allows investors to see our results
as management sees them. We also believe that providing this
information better enables investors to understand our operating
performance and to evaluate the methodology used by our management
to evaluate and measure our operating performance, and the
methodology and financial measures used by our board of directors
to assess management's performance.
SOURCE Smurfit-Stone Container Corporation
Copyright g. 3 PR Newswire