CREVE COEUR, Mo. and
CHICAGO, Nov. 1, 2010 /PRNewswire-FirstCall/ --
Smurfit-Stone Container Corporation (NYSE: SSCC) today reported net
income of $65 million, or
$0.65 per diluted share, for the
third quarter ended Sept. 30, 2010,
compared with net income attributable to common stockholders of
$1.41 billion, or $5.41 per diluted share, for the second quarter
of 2010, and $65 million, or
$0.25 per share, for the third
quarter of 2009.
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Smurfit-Stone's third quarter 2010 adjusted net income was
$76 million, or $0.76 per diluted share, up from adjusted net
income of $2 million, or $0.01 per diluted share, in the second quarter of
this year, and an adjusted net loss of ($23)
million, or ($0.09) per
diluted share, in the third quarter of 2009. The adjustments
in the third quarter of 2010 were primarily the exclusion of costs
related to reorganization and restructuring. The major
adjustment in the second quarter of 2010 was the exclusion of
$1.42 billion of income, including
tax benefits, related to the Company's emergence from
bankruptcy.
|
Diluted
Earnings Per Share Attributable to Common
Stockholders
|
|
|
|
Third
|
|
Second
|
|
Third
|
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
|
|
2010
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable
to
Common
Stockholders
|
$0.65
|
|
$5.41
|
|
$0.25
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
$0.11
|
|
($5.40)
|
|
($0.34)
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(Loss)
|
$0.76
|
|
$0.01
|
|
($0.09)
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
(MM)
|
100
|
|
261
|
|
257
|
|
|
|
|
|
|
|
|
|
|
The Company reported operating income of $142 million for the third quarter of 2010,
compared to an operating loss of ($6)
million in the second quarter of 2010, and operating income
of $159 million in the third quarter
of 2009. The sequential improvement in operating income
reflects increased net sales in the third quarter due to higher
selling prices, lower maintenance-related downtime, lower fiber
costs, and cost savings achieved in mill and container operations.
Third quarter 2009 operating income significantly benefitted
from income related to the alternative fuel tax credits that were
received in 2009.
Patrick J. Moore, Smurfit-Stone's
Chief Executive Officer, commented, "I am pleased with our strong
third quarter performance, which benefitted from favorable pricing
trends and lower input costs driven primarily by fiber.
Importantly, we are realizing cost savings and efficiency
improvements from our financial restructuring, investments in our
core business, and focused efforts such as our Operational
Excellence initiative. I'm proud of the efforts and
commitment of our employees which contributed significantly to the
strong quarter. I view the positive momentum in the quarter
as an important step in delivering on the accelerated performance
improvement we are pursuing."
Adjusted EBITDA for the third quarter of 2010 was $239 million, up from $102
million in the second quarter of 2010, and $94 million in the third quarter of 2009.
The sequential improvement in adjusted EBITDA reflects higher
selling prices, reduced maintenance-related downtime and related
expenses, lower fiber costs, and improvements in overall operating
productivity including additional headcount reductions made in the
quarter.
Net sales for the third quarter of this year were $1.63 billion, up 4.5 percent from $1.56 billion in the second quarter of 2010 and
up 15.3 percent over sales of $1.42
billion in the third quarter of 2009. The improvement
in third quarter 2010 net sales is primarily due to higher average
selling prices during the quarter.
Third Quarter Highlights
- The Company achieved very strong results in its first quarter
since emerging from bankruptcy, demonstrating the performance
capabilities of the new Smurfit-Stone.
- Ongoing efforts to reduce operating costs were also a
significant contributor to higher earnings and cash generation in
the quarter, with overall headcount being reduced by 460 positions
in the quarter and 1,368 positions year to date.
- Strong cash generation, with cash balances growing by
$124 million in the quarter,
resulting in net debt of less than $730
million at September 30, 2010.
Outlook
Smurfit-Stone expects moderately lower sequential earnings in
the fourth quarter from the third quarter, as continued price
improvement will be more than offset by additional mill maintenance
costs, normal seasonal demand declines and higher energy usage.
The Company also expects higher recycled fiber costs in the
fourth quarter.
In addition to the major cost reduction focus in the business
operations, the Company is undertaking a significant reduction in
its selling, general and administrative costs, primarily through
reductions of more than 450 positions for full-year 2010, or more
than 14 percent of its workforce in these functions. The
Company expects to realize net savings of more than $50 million in 2011 as compared to 2010, and has
identified opportunities for additional savings in 2012.
Conference Call and Webcast
Smurfit-Stone will host a conference call for analysts,
institutional investors and shareholders on Monday, Nov. 1, 2010, at 8:30 a.m. Eastern Time. To access the call,
participants should dial the number below approximately 10 minutes
before the start time.
U.S. – (866) 783-2146 or International – (857) 350-1605
Passcode: 26779754
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
Nov. 15, 2010. To access the
replay, dial (888) 286-8010 (U.S.) or (617) 801-6888
(International), and enter passcode 99716475
A replay of the webcast will be available at
www.smurfit-stone.com.
Forward-Looking Statements & Non-GAAP Measures
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor
|
|
Predecessor
|
|
|
|
|
Three
Months
Ended
|
|
Three
Months
Ended
|
|
Three
Months
Ended
|
|
Six
Months
Ended
|
|
Nine
Months
Ended
|
|
|
|
|
September
30,
|
|
September
30,
|
|
June
30,
|
|
June
30,
|
|
September
30,
|
|
|
(In millions, except per share
data)
|
|
|
2010
|
|
2009
|
|
2010
|
|
2010
|
|
2009
|
|
|
Net sales
|
|
$
|
1,634
|
|
$
1,417
|
|
$
1,563
|
|
$
3,024
|
|
$
4,195
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
1,344
|
|
1,284
|
|
1,407
|
|
2,763
|
|
3,757
|
|
|
Selling and administrative
expenses
|
|
|
141
|
|
137
|
|
143
|
|
294
|
|
428
|
|
|
Restructuring
expenses
|
|
|
7
|
|
14
|
|
19
|
|
15
|
|
38
|
|
|
Loss on disposal of
assets
|
|
|
|
|
2
|
|
|
|
|
|
3
|
|
|
Other operating
income
|
|
|
|
|
(179)
|
|
|
|
(11)
|
|
(455)
|
|
|
Operating income
(loss)
|
|
|
142
|
|
159
|
|
(6)
|
|
(37)
|
|
424
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(23)
|
|
(72)
|
|
(10)
|
|
(23)
|
|
(217)
|
|
|
Debtor-in-possession debt
issuance costs
|
|
|
|
|
|
|
|
|
|
|
(63)
|
|
|
Loss on early
extinguishment of debt
|
|
|
|
|
|
|
|
|
|
|
(20)
|
|
|
Foreign currency exchange
gains (losses)
|
|
|
|
|
(11)
|
|
9
|
|
3
|
|
(10)
|
|
|
Other, net
|
|
|
2
|
|
6
|
|
2
|
|
4
|
|
10
|
|
|
Income (loss) before
reorganization items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and income
taxes
|
|
|
121
|
|
82
|
|
(5)
|
|
(53)
|
|
124
|
|
|
Reorganization items
income (expense), net
|
|
|
(7)
|
|
(16)
|
|
1,219
|
|
1,178
|
|
(109)
|
|
|
Income before income
taxes
|
|
|
114
|
|
66
|
|
1,214
|
|
1,125
|
|
15
|
|
|
(Provision for) benefit from
income taxes
|
|
|
(49)
|
|
2
|
|
199
|
|
199
|
|
(3)
|
|
|
Net income
|
|
|
65
|
|
68
|
|
1,413
|
|
1,324
|
|
12
|
|
|
Preferred stock dividends and
accretion
|
|
|
|
|
(3)
|
|
(2)
|
|
(4)
|
|
(9)
|
|
|
Net income attributable to
common stockholders
|
|
$
|
65
|
|
$
65
|
|
$
1,411
|
|
$
1,320
|
|
$
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
common stockholders
|
|
$
|
0.65
|
|
$
0.25
|
|
$
5.47
|
|
$
5.12
|
|
$
0.01
|
|
|
Weighted average shares
outstanding
|
|
|
100
|
|
257
|
|
258
|
|
258
|
|
257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
common stockholders
|
|
$
|
0.65
|
|
$
0.25
|
|
$
5.41
|
|
$
5.07
|
|
$
0.01
|
|
|
Weighted average shares
outstanding
|
|
|
100
|
|
257
|
|
261
|
|
261
|
|
257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SMURFIT-STONE CONTAINER
CORPORATION
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
Successor
|
|
Predecessor
|
|
|
|
|
September
30,
|
|
June
30,
|
|
December
31,
|
|
|
(In millions, except share
data)
|
|
|
2010
|
|
2010
|
|
2009
|
|
|
Assets
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
464
|
|
$
340
|
|
$
704
|
|
|
Restricted cash
|
|
|
|
|
7
|
|
9
|
|
|
Receivables
|
|
|
750
|
|
739
|
|
615
|
|
|
Receivable for alternative
energy tax credits
|
|
|
11
|
|
11
|
|
59
|
|
|
Inventories
|
|
|
529
|
|
496
|
|
452
|
|
|
Refundable income
taxes
|
|
|
16
|
|
31
|
|
23
|
|
|
Prepaid expenses and other
current assets
|
|
|
35
|
|
47
|
|
43
|
|
|
Total current
assets
|
|
|
1,805
|
|
1,671
|
|
1,905
|
|
|
Net property, plant and
equipment
|
|
|
4,370
|
|
4,405
|
|
3,081
|
|
|
Deferred income taxes
|
|
|
|
|
|
|
23
|
|
|
Goodwill
|
|
|
96
|
|
93
|
|
|
|
|
Intangible assets,
net
|
|
|
76
|
|
77
|
|
|
|
|
Other assets
|
|
|
162
|
|
163
|
|
68
|
|
|
|
$
|
6,509
|
|
$
6,409
|
|
$
5,077
|
|
|
Liabilities
and Stockholders' Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities not subject to
compromise
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Current maturities of
long-term debt
|
|
$
|
16
|
|
$
18
|
|
$
1,354
|
|
|
Accounts
payable
|
|
|
519
|
|
515
|
|
387
|
|
|
Accrued compensation and
payroll taxes
|
|
|
165
|
|
176
|
|
145
|
|
|
Interest
payable
|
|
|
2
|
|
5
|
|
12
|
|
|
Other current
liabilities
|
|
|
83
|
|
81
|
|
164
|
|
|
Total current
liabilities
|
|
|
785
|
|
795
|
|
2,062
|
|
|
Long-term debt, less current
maturities
|
|
|
1,176
|
|
1,176
|
|
|
|
|
Pension and postretirement
benefits, net of current portion
|
|
|
1,632
|
|
1,639
|
|
|
|
|
Other long-term
liabilities
|
|
|
138
|
|
140
|
|
117
|
|
|
Deferred income taxes
|
|
|
352
|
|
307
|
|
|
|
|
Total liabilities not
subject to compromise
|
|
|
4,083
|
|
4,057
|
|
2,179
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities subject to
compromise
|
|
|
|
|
|
|
4,272
|
|
|
Total
liabilities
|
|
|
4,083
|
|
4,057
|
|
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;
|
|
|
|
|
|
|
|
|
|
91,062,636 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
|
|
|
2,357
|
|
2,352
|
|
4,081
|
|
|
Retained earnings
(deficit)
|
|
|
65
|
|
|
|
(4,883)
|
|
|
Accumulated other
comprehensive income (loss)
|
|
|
4
|
|
|
|
(679)
|
|
|
Total stockholders' equity
(deficit)
|
|
|
2,426
|
|
2,352
|
|
(1,374)
|
|
|
|
$
|
6,509
|
|
$
6,409
|
|
$
5,077
|
|
|
|
|
|
|
|
|
|
|
SMURFIT-STONE CONTAINER
CORPORATION
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Successor
|
|
|
Predecessor
|
|
|
|
|
Three
Months
Ended
|
|
|
Six
Months
Ended
|
|
|
Nine
Months
Ended
|
|
|
|
|
September
30,
|
|
|
June
30,
|
|
|
September
30,
|
|
|
(In millions)
|
|
|
2010
|
|
|
2010
|
|
|
2009
|
|
|
Cash flows
from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
65
|
|
$
|
1,324
|
|
$
|
12
|
|
|
Adjustments to reconcile
net income to net cash provided by (used for)
operating
activities
|
|
|
|
|
|
|
|
|
|
|
|
Loss on early
extinguishment of debt
|
|
|
|
|
|
|
|
|
20
|
|
|
Depreciation, depletion
and amortization
|
|
|
84
|
|
|
168
|
|
|
273
|
|
|
Debtor-in-possession debt
issuance costs
|
|
|
|
|
|
|
|
|
63
|
|
|
Amortization of deferred
debt issuance costs and original issue discount
|
|
|
3
|
|
|
|
|
|
5
|
|
|
Deferred income
taxes
|
|
|
58
|
|
|
(201)
|
|
|
1
|
|
|
Pension and postretirement
benefits
|
|
|
(16)
|
|
|
50
|
|
|
49
|
|
|
Loss on disposal of
assets
|
|
|
|
|
|
|
|
|
3
|
|
|
Non-cash restructuring
expense
|
|
|
|
|
|
7
|
|
|
6
|
|
|
Non-cash stock-based
compensation
|
|
|
5
|
|
|
3
|
|
|
7
|
|
|
Non-cash foreign currency
exchange (gains) losses
|
|
|
|
|
|
(3)
|
|
|
10
|
|
|
Gain due to plan
effects
|
|
|
|
|
|
(580)
|
|
|
|
|
|
Gain due to fresh start
accounting adjustments
|
|
|
|
|
|
(742)
|
|
|
|
|
|
Payments to settle
pre-petition liabilities excluding debt
|
|
|
|
|
|
(202)
|
|
|
|
|
|
Non-cash reorganization
items
|
|
|
|
|
|
101
|
|
|
65
|
|
|
Change in restricted cash
for utility deposits
|
|
|
7
|
|
|
2
|
|
|
(9)
|
|
|
Change in operating assets
and liabilities,
|
|
|
|
|
|
|
|
|
|
|
|
net of effects from
acquisitions and dispositions
|
|
|
|
|
|
|
|
|
|
|
|
Receivables and retained
interest in receivables sold
|
|
|
(7)
|
|
|
(129)
|
|
|
(50)
|
|
|
Receivable for alternative
energy tax credits
|
|
|
|
|
|
48
|
|
|
(58)
|
|
|
Inventories
|
|
|
(30)
|
|
|
1
|
|
|
35
|
|
|
Prepaid expenses and other
current assets
|
|
|
12
|
|
|
1
|
|
|
(13)
|
|
|
Accounts payable and
accrued liabilities
|
|
|
(9)
|
|
|
57
|
|
|
200
|
|
|
Interest
payable
|
|
|
(2)
|
|
|
2
|
|
|
128
|
|
|
Other, net
|
|
|
(9)
|
|
|
8
|
|
|
46
|
|
|
Net cash provided by (used
for) operating activities
|
|
|
161
|
|
|
(85)
|
|
|
793
|
|
|
Cash flows
from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
Expenditures for property,
plant and equipment
|
|
|
(39)
|
|
|
(83)
|
|
|
(112)
|
|
|
Proceeds from property
disposals
|
|
|
5
|
|
|
10
|
|
|
16
|
|
|
Advances to affiliates,
net
|
|
|
|
|
|
|
|
|
(15)
|
|
|
Net cash used for
investing activities
|
|
|
(34)
|
|
|
(73)
|
|
|
(111)
|
|
|
Cash flows
from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exit credit
facilities
|
|
|
|
|
|
1,200
|
|
|
|
|
|
Original issue
discount
|
|
|
|
|
|
(12)
|
|
|
|
|
|
Net borrowings of
debtor-in-possession financing
|
|
|
|
|
|
|
|
|
130
|
|
|
Net borrowings
(repayments) of long-term debt
|
|
|
(3)
|
|
|
(1,347)
|
|
|
71
|
|
|
Repurchase of
receivables
|
|
|
|
|
|
|
|
|
(385)
|
|
|
Debtor-in-possession debt
issuance costs
|
|
|
|
|
|
|
|
|
(63)
|
|
|
Debt issuance costs on
exit credit facilities and other financing costs
|
|
|
|
|
|
(47)
|
|
|
|
|
|
Net cash used for
financing activities
|
|
|
(3)
|
|
|
(206)
|
|
|
(247)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and
cash equivalents
|
|
|
124
|
|
|
(364)
|
|
|
435
|
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of
period
|
|
|
340
|
|
|
704
|
|
|
126
|
|
|
End of period
|
|
$
|
464
|
|
$
|
340
|
|
$
|
561
|
|
|
|
|
|
|
|
|
|
|
|
|
SMURFIT-STONE CONTAINER
CORPORATION
ADJUSTED NET
INCOME (LOSS) PER DILUTED SHARE
(In
Millions, Except Per Share Data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor
(Note 1)
|
|
Predecessor
(Note 1)
|
|
|
|
3Q
10
|
|
3Q
09
|
2Q
10
|
June 2010
YTD
|
Sept 2009
YTD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
common stockholders (GAAP)
|
$
65
|
|
$
65
|
$
1,411
|
$
1,320
|
$
3
|
|
|
Reorganization items (income)
expense, net of income taxes
|
4
|
|
16
|
(1,419)
|
(1,378)
|
109
|
|
|
Debtor-in-possession financing
costs
|
-
|
|
-
|
-
|
-
|
63
|
|
|
Alternative fuel mixture tax
credits
|
-
|
|
(179)
|
-
|
(11)
|
(455)
|
|
|
Loss on early extinguishment of
debt
|
-
|
|
-
|
-
|
-
|
20
|
|
|
Non-cash foreign currency
exchange (gains) losses
|
-
|
|
11
|
(9)
|
(3)
|
10
|
|
|
Loss on sale of
assets
|
-
|
|
2
|
-
|
-
|
2
|
|
|
Interest on Predecessor
unsecured debt
|
-
|
|
48
|
-
|
-
|
131
|
|
|
Restructuring charges
|
4
|
|
14
|
19
|
15
|
38
|
|
|
Multi-employer pension plan
withdrawal charge, net of income taxes
|
3
|
|
-
|
-
|
-
|
-
|
|
|
Adjusted net income (loss)
attributable to common stockholders (Note 2)
|
$
76
|
|
$
(23)
|
$
2
|
$
(57)
|
$
(79)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor
(Note 1)
|
|
Predecessor
(Note 1)
|
|
|
|
3Q
10
|
|
3Q
09
|
2Q
10
|
June 2010
YTD
|
Sept 2009
YTD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per diluted share
attributable to common stockholders (GAAP)
|
$
0.65
|
|
$
0.25
|
$
5.41
|
$
5.07
|
$
0.01
|
|
|
Reorganization items (income)
expense, net of income taxes
|
0.04
|
|
0.06
|
(5.44)
|
(5.28)
|
0.42
|
|
|
Debtor-in-possession financing
costs
|
-
|
|
-
|
-
|
-
|
0.24
|
|
|
Alternative fuel mixture tax
credits
|
-
|
|
(0.70)
|
-
|
(0.04)
|
(1.77)
|
|
|
Loss on early extinguishment of
debt
|
-
|
|
-
|
-
|
-
|
0.08
|
|
|
Non-cash foreign currency
exchange (gains) losses
|
-
|
|
0.04
|
(0.03)
|
(0.01)
|
0.04
|
|
|
Loss on sale of
assets
|
-
|
|
0.01
|
-
|
-
|
0.01
|
|
|
Interest on Predecessor
unsecured debt
|
-
|
|
0.19
|
-
|
-
|
0.51
|
|
|
Restructuring charges
|
0.04
|
|
0.06
|
0.07
|
0.06
|
0.15
|
|
|
Multi-employer pension plan
withdrawal charge, net of income taxes
|
0.03
|
|
-
|
-
|
-
|
-
|
|
|
Adjusted net income (loss) per
diluted share attributable to common stockholders (Note
2)
|
$
0.76
|
|
$
(0.09)
|
$
0.01
|
$
(0.20)
|
$
(0.31)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 1: For
the Predecessor Company, adjustments to GAAP net income, other than
reorganization items (income) expense, were not tax effected
because it was more likely than not that substantially all of the
deferred tax assets that were generated during bankruptcy would not
be realized and we did not record any additional tax benefit for
2009 and the six months ended June 30, 2010. Due to the
effects of the Plan of Reorganization, we concluded that it was
more likely than not that substantially all of the deferred tax
assets would be realized and we recognized an income tax benefit
related to reorganization items in the six months ended June 30,
2010.
For the Successor Company, for
the three months ended September 30, 2010, we recorded a provision
for income taxes related to the statement of operations. As a
result, the Successor period adjustments to net income are
presented on a net of tax basis.
Note 2:
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, loss on sale of assets, accrued but unpaid
interest on Predecessor unsecured debt, restructuring charges and a
multi-employer pension plan withdrawal charge. 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 following
regarding the use of non-GAAP financial measures.
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)
|
|
|
|
|
|
|
|
|
|
Successor
|
|
Predecessor
|
|
|
3Q
10
|
|
2Q
10
|
|
3Q
09
|
|
|
|
|
|
|
|
|
Net sales
|
$
1,634
|
|
$ 1,563
|
|
$ 1,417
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
65
|
|
$ 1,413
|
|
$
68
|
|
|
(Benefit from) provision for
income taxes
|
49
|
|
(199)
|
|
(2)
|
|
|
Interest expense,
net
|
23
|
|
10
|
|
72
|
|
|
Depreciation, depletion
and amortization
|
84
|
|
83
|
|
91
|
|
|
EBITDA
|
221
|
|
1,307
|
|
229
|
|
|
|
|
|
|
|
|
|
|
Reorganization items (income)
expense
|
7
|
|
(1,219)
|
|
16
|
|
|
Restructuring
charges
|
7
|
|
19
|
|
14
|
|
|
Alternative fuel mixture tax
credits
|
-
|
|
-
|
|
(179)
|
|
|
Non-cash foreign currency
exchange (gains) losses
|
-
|
|
(9)
|
|
11
|
|
|
Loss on sale of
assets
|
-
|
|
-
|
|
2
|
|
|
Multi-employer pension
plan withdrawal charge
|
4
|
|
-
|
|
-
|
|
|
Other
|
-
|
|
4
|
|
1
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$
239
|
|
$
102
|
|
$
94
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
14.6%
|
|
6.5%
|
|
6.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Information:
|
|
|
|
|
|
|
|
Net cash provided by (used
for) operating activities
|
$
161
|
|
$
(135)
|
|
$
301
|
|
|
Capital
expenditures
|
39
|
|
49
|
|
43
|
|
|
Pension expense
|
14
|
|
34
|
|
31
|
|
|
Pension
contributions
|
31
|
|
12
|
|
1
|
|
|
Cash taxes refunded
(paid)
|
9
|
|
(1)
|
|
-
|
|
|
Change in working
capital
|
(36)
|
|
(2)
|
|
74
|
|
|
Containerboard, corrugated
containers and reclamation
|
|
|
|
|
|
|
|
operations segment
operating profit
|
216
|
|
82
|
|
60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
"EBITDA" is defined as net
income 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 following regarding the use of non-GAAP
financial measures.
|
|
|
|
|
|
|
|
|
|
SMURFIT-STONE CONTAINER
CORPORATION
STATISTICAL
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
Successor
|
|
Predecessor
|
|
Combined
(1)
|
|
Predecessor
|
|
|
|
3rd
Qtr
|
|
2nd
Qtr
|
1st
Qtr
|
|
Sept
YTD
|
|
3rd
Qtr
|
2nd
Qtr
|
1st
Qtr
|
Sept
YTD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Containerboard
System
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North American Mill Operating
Rates (Containerboard Only)
|
99.7%
|
|
97.1%
|
100.0%
|
|
99.2%
|
|
87.2%
|
85.0%
|
82.4%
|
84.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North American
Containerboard Production - M Tons
|
1,603
|
|
1,545
|
1,585
|
|
4,733
|
|
1,551
|
1,497
|
1,435
|
4,483
|
|
|
Sequential Avg. Domestic
Linerboard Price Change
|
7.2%
|
|
13.2%
|
6.3%
|
|
N/A
|
|
-5.9%
|
-9.8%
|
-7.4%
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pulp Production - M
Tons
|
73
|
|
72
|
62
|
|
207
|
|
78
|
76
|
66
|
220
|
|
|
SBS/Bleached Board
Production - M Tons
|
32
|
|
31
|
35
|
|
98
|
|
29
|
32
|
33
|
94
|
|
|
Kraft Paper Production - M
Tons
|
26
|
|
26
|
29
|
|
81
|
|
34
|
28
|
19
|
81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Maintenance Downtime
Tons - M Tons
|
49
|
|
76
|
20
|
|
145
|
|
29
|
50
|
46
|
125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corrugated Containers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North American Shipments -
BSF
|
17.1
|
|
17.3
|
16.4
|
|
50.8
|
|
16.7
|
16.7
|
16.6
|
50.0
|
|
|
Per Day North American
Shipments - MMSF
|
266.9
|
|
273.7
|
260.9
|
|
267.1
|
|
260.9
|
265.7
|
267.8
|
264.8
|
|
|
Sequential Avg. Corrugated
Price Change
|
3.2%
|
|
3.6%
|
-0.6%
|
|
N/A
|
|
-2.6%
|
-3.0%
|
-0.9%
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiber Reclaimed and
Brokered - M Tons
|
1,494
|
|
1,468
|
1,423
|
|
4,385
|
|
1,317
|
1,280
|
1,241
|
3,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Although the
2010 Successor Period and the 2010 Predecessor Period are distinct
reporting periods, we combined the statistical information for the
six months ended June 30, 2010 of the Predecessor with the three
months ended September 30, 2010 of the Successor for analytical
purposes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, non-cash foreign
currency exchange (gains) losses, interest on Predecessor unsecured
debt, restructuring charges, (gain) loss on sale of assets and a
multi-employer pension plan withdrawal charge. 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, restructuring charges,
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, a
multi-employer pension plan withdrawal charge 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 (1) the three
months ended September 30, 2010 of
the Successor, (2) the six months ended June
30, 2010 of the Predecessor and (3) the three and nine
months ended September 30, 2009 of
the Predecessor, 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 - Through June 30, 2010, 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 Predecessor 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 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.
- Multi-employer pension plan withdrawal charge – This amount
represents the charge associated with the withdrawal from a
multi-employer pension plan. This expense item was not
considered indicative of our ongoing operating performance and was
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