Boise Inc. Announces Financial Results for First Quarter 2010
</pre>
<p><span class="xn-location">BOISE</span>, Idaho, <span class="xn-chron">May 4</span> /CNW/ -- <span class="xn-location">Boise</span> Inc. (NYSE: BZ) today reported a net loss of <span class="xn-money">$12.7 million</span> or (<span class="xn-money">$0.16</span>) per diluted share for first quarter 2010 compared with a first quarter 2009 net loss of <span class="xn-money">$0.9 million</span> or (<span class="xn-money">$0.01</span>) per diluted share. Net income excluding special items in first quarter 2010 was <span class="xn-money">$3.0 million</span> or <span class="xn-money">$0.04</span> per diluted share compared with <span class="xn-money">$2.7 million</span> or <span class="xn-money">$0.03</span> per diluted share in first quarter 2009.</p>
<p/>
<p>EBITDA excluding special items was <span class="xn-money">$54.9 million</span> for first quarter 2010 compared with <span class="xn-money">$58.6 million</span> for first quarter 2009.</p>
<p/>
<p> </p>
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FINANCIAL HIGHLIGHTS
(in millions, except per-share data)
</pre>
<p> </p>
<pre>
1Q 2010 1Q 2009 4Q 2009
------- ------- -------
</pre>
<p> </p>
<pre>
Sales $494.1 $500.3 $490.3
Net income (loss) $(12.7) $(0.9) $55.7
Net income (loss) per diluted share $(0.16) $(0.01) $0.66
Net income excluding special items (a) $3.0 $2.7 $4.2
Net income excluding special items per
diluted share (a) $0.04 $0.03 $0.05
EBITDA (b) $29.3 $52.7 $84.3
EBITDA excluding special items (b) $54.9 $58.6 $54.4
</pre>
<p> </p>
<p>Net total debt <span class="xn-money">$693.9</span> <span class="xn-money">$1,016.5</span> <span class="xn-money">$736.5</span></p>
<p> </p>
<pre>
(a) For reconciliation of net income (loss) excluding special items
to net income (loss), see "Summary Notes to Consolidated Financial
Statements and Segment Information."
(b) For reconciliation of net income (loss) to EBITDA and EBITDA to
EBITDA excluding special items, see "Summary Notes to Consolidated
Financial Statements and Segment Information."
</pre>
<p>"We operated well during the first quarter and saw improving conditions in our key markets," said Alexander Toeldte, President and Chief Executive Officer of <span class="xn-location">Boise</span> Inc. "We grew our premium office, label and release, and flexible packaging products sales volumes 17% over the prior year, experienced strong demand in our corrugated packaging products, and continued to deliver solid results in our office papers business. We extended debt maturities and reduced balance sheet risk through the debt refinancing we completed in March. As expected, fiber and energy input costs increased during the quarter, and we experienced seasonal increases in working capital and increased maintenance expenditures from our planned annual outage at DeRidder. Looking ahead, we expect to begin to benefit from recent price increases across our businesses in the second quarter."</p>
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Sales
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<p>Total sales for first quarter 2010 were <span class="xn-money">$494.1 million</span>, down <span class="xn-money">$6.2 million</span>, or 1%, from <span class="xn-money">$500.3 million</span> for first quarter 2009 and up <span class="xn-money">$3.8 million</span> from fourth quarter 2009 sales of <span class="xn-money">$490.3 million</span>.</p>
<p/>
<p>Paper segment sales increased <span class="xn-money">$1.5 million</span> during first quarter 2010 compared with first quarter 2009, as increased sales volumes were offset partially by lower sales prices. In first quarter 2009, we took market downtime to balance supply with customer demand.</p>
<p/>
<p>Packaging segment sales decreased <span class="xn-money">$8.9 million</span> during first quarter 2010 compared with first quarter 2009, driven by lower sales prices for segment linerboard, newsprint, and corrugated products and lower sales volumes of newsprint due to the idling of our DeRidder #2 newsprint machine in <span class="xn-chron">April 2009</span>. These declines were offset partially by higher sales volumes of segment linerboard and corrugated products.</p>
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Prices and Volumes
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<p>Pricing for uncoated freesheet improved in first quarter 2010 sequentially from fourth quarter 2009 but declined compared with first quarter 2009. Average net selling prices for uncoated freesheet papers declined <span class="xn-money">$40</span> per ton, or 4%, to <span class="xn-money">$941</span> per ton during first quarter 2010 compared with first quarter 2009 and increased 1% from fourth quarter 2009. In first quarter 2010, we implemented a $40-per-ton price increase across most of our uncoated freesheet grades, including cut-size office papers, offset, and midweight opaque grades. In <span class="xn-chron">April 2010</span>, we announced a $60-per-ton price increase across virtually all of our uncoated office papers and printing and converting grades effective in <span class="xn-chron">May 2010</span>. Overall, uncoated freesheet sales volumes were 312,000 tons during first quarter 2010, an increase of 3% versus the prior year period, and up 1% from fourth quarter 2009 due to improved demand trends and reduced market downtime. Combined sales volumes of premium office, label and release, and flexible packaging papers, which represented 29% of our total first quarter 2010 uncoated freesheet sales volumes, increased by 17% compared with first quarter 2009.</p>
<p/>
<p>Corrugated container and sheet sales volumes improved 14% during first quarter 2010 compared with first quarter 2009 and increased 4% from fourth quarter 2009, due primarily to increased sales of sheets from our sheet feeder plant in Texas. Corrugated container and sheet prices declined 12% in first quarter 2010 from first quarter 2009, driven by lower selling prices for containerboard and product mix changes. Corrugated container and sheet prices decreased 2% compared with fourth quarter 2009.</p>
<p/>
<p>More favorable market conditions led to increased linerboard sales volumes to third parties, which were up 62%, to 62,000 tons, compared with first quarter 2009. Third-party sales volumes decreased by 26% sequentially from fourth quarter 2009 as improved sales volumes in our corrugated product and sheet operations during first quarter 2010 resulted in less linerboard available for sales to third parties. Linerboard net selling prices to third parties declined to <span class="xn-money">$296</span> per ton in first quarter 2010 from <span class="xn-money">$352</span> per ton in first quarter 2009 and improved 1% compared with fourth quarter 2009. In first quarter 2010, we implemented a $50-per-ton and $70-per-ton price increase on domestic linerboard sales in the eastern and western U.S., respectively. In April, we announced an additional $60-per-ton increase on domestic linerboard sales.</p>
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Input Costs
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<p>Total fiber, energy, and chemical costs for first quarter 2010 were <span class="xn-money">$228.0 million</span>, an increase of <span class="xn-money">$22.3 million</span>, or 11%, compared with costs of <span class="xn-money">$205.7 million</span> for first quarter 2009. The increase was driven primarily by higher fiber costs and higher consumption of all inputs due to increased production and sales volumes.</p>
<p> </p>
<pre>
INPUT COST SUMMARY
(in millions)
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<p> </p>
<pre>
1Q 2010 1Q 2009 4Q 2009
------- ------- -------
</pre>
<p> </p>
<pre>
Fiber $115.5 $94.1 $106.5
Energy 63.4 60.8 45.7
Chemicals 49.1 50.8 52.8
Total $228.0 $205.7 $205.0
====== ====== ======
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<p>Total fiber costs during first quarter 2010 were <span class="xn-money">$115.5 million</span>, an increase of <span class="xn-money">$21.4 million</span>, or 23%, from <span class="xn-money">$94.1 million</span> incurred in first quarter 2009. This was due to increased fiber consumption, higher pulp prices, and increased wood costs in our Alabama operating region as a result of wet weather during the quarter. Fiber costs in first quarter 2010 increased <span class="xn-money">$9.0 million</span>, or 8%, compared with <span class="xn-money">$106.5 million</span> in fourth quarter 2009.</p>
<p/>
<p>Energy costs in first quarter 2010 were <span class="xn-money">$63.4 million</span>, an increase of <span class="xn-money">$2.6 million</span>, or 4%, compared with <span class="xn-money">$60.8 million</span> in first quarter 2009, driven by increased consumption of energy due to higher production volumes, offset partially by lower prices for natural gas and electricity. Energy costs in first quarter 2010 increased <span class="xn-money">$17.7 million</span>, or 39%, from <span class="xn-money">$45.7 million</span> in fourth quarter 2009 due to seasonal increases in consumption as a result of colder winter weather.</p>
<p/>
<p>Chemical costs in first quarter 2010 were <span class="xn-money">$49.1 million</span>, a decrease of <span class="xn-money">$1.7 million</span>, or 3%, compared with <span class="xn-money">$50.8 million</span> in first quarter 2009. Chemical costs were down <span class="xn-money">$3.7 million</span>, or 7%, compared with <span class="xn-money">$52.8 million</span> in fourth quarter 2009. The key drivers were lower prices offset partially by higher consumption of commodity chemicals.</p>
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Refinancing
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<p>In <span class="xn-chron">March 2010</span>, we refinanced our variable rate debt due in 2014 with fixed rate debt due in 2020, extending maturities, fixing interest rates, and increasing our financial flexibility. In connection with the refinancing, we recognized a <span class="xn-money">$22.2 million</span> noncash loss on the extinguishment of debt during the three months ended <span class="xn-chron">March 31, 2010</span>.</p>
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Webcast and Conference Call
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<p><span class="xn-location">Boise</span> Inc. will host a webcast and conference call on <span class="xn-chron">Tuesday, May 4, 2010</span>, at <span class="xn-chron">12:00 p.m. ET</span>, at which time we will review the company's recent performance. To participate in the conference call, dial 866-841-1001 (international callers should dial 832-4451689). The webcast may be accessed through Boise's Internet site and will be archived for one year following the call. Go to <a href="http://www.BoiseInc.com">www.BoiseInc.com</a> and click on the link to the webcast under Webcasts & Presentations on the Investors drop-down menu.</p>
<p/>
<p>A replay of the conference call will be available in Webcasts & Presentations from <span class="xn-chron">May 4</span> at <span class="xn-chron">3:00 p.m. ET</span> through <span class="xn-chron">June 4</span> at <span class="xn-chron">11:45 p.m. ET</span>. Playback numbers are 800-642-1687 for U.S. callers and 706-645-9291 for international callers. The passcode is 69548759.</p>
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About Boise Inc.
</pre>
<p>Headquartered in <span class="xn-location">Boise</span>, Idaho, <span class="xn-location">Boise</span> Inc. (NYSE: BZ) manufactures packaging products and papers including corrugated containers, containerboard, label and release and flexible packaging papers, imaging papers for the office and home, printing and converting papers, newsprint, and market pulp. Our employees are committed to delivering excellent value while managing our businesses to sustain environmental resources for future generations. Visit our website at <a href="http://www.BoiseInc.com">www.BoiseInc.com</a>.</p>
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Basis of Presentation
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<p>We present our consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP). Our earnings release also supplements the GAAP presentations by reflecting EBITDA. EBITDA represents income (loss) before interest (change in fair value of interest rate derivatives, interest expense, and interest income), income taxes, and depreciation, amortization, and depletion. EBITDA is the primary measure used by our chief operating decision makers to evaluate segment operating performance and to decide how to allocate resources to segments. We believe EBITDA is useful to investors because it provides a means to evaluate the operating performance of our segments and our company on an ongoing basis using criteria that are used by our internal decision makers and because it is frequently used by investors and other interested parties in the evaluation of companies with substantial financial leverage. We believe EBITDA is a meaningful measure because it presents a transparent view of our recurring operating performance and allows management to readily view operating trends, perform analytical comparisons, and identify strategies to improve operating performance. For example, we believe that the inclusion of items such as taxes, interest expense, and interest income distorts management's ability to assess and view the core operating trends in our segments. EBITDA, however, is not a measure of our liquidity or financial performance under GAAP and should not be considered as an alternative to net income (loss), income (loss) from operations, or any other performance measure derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity. The use of EBITDA instead of net income (loss) or segment income (loss) has limitations as an analytical tool, including the inability to determine profitability; the exclusion of interest and associated significant cash requirements; and the exclusion of depreciation, amortization, and depletion, which represent significant and unavoidable operating costs, given the level of our indebtedness and the capital expenditures needed to maintain our businesses. Management compensates for these limitations by relying on our GAAP results. Our measures of EBITDA are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation.</p>
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Forward-Looking Statements
</pre>
<p>This news release contains statements that are "forward looking" as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements. Forward-looking statements involve risks and uncertainties, including but not limited to economic, competitive, and technological factors outside our control that may cause our business, strategy, or actual results to differ materially from the forward-looking statements. Statements regarding announced price increases on our products are considered forward looking; accordingly, there can be no assurance that we will be able to implement or realize all or any part of such price increases. For further information about the risks and uncertainties associated with our business, please refer to our filings with the Securities and Exchange Commission. The company does not intend, and undertakes no obligation, to update any forward-looking statements.</p>
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</pre>
<p> </p>
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Boise Inc.
Consolidated Statements of Income (Loss)
(unaudited, dollars in thousands, except share and per-share data)
</pre>
<p> </p>
<pre>
Three Months Ended
------------------
March 31 December 31,
--------
2010 2009 2009
---- ---- ----
Sales
Trade $485,851 $484,868 $481,853
Related parties 8,254 15,417 8,422
494,105 500,285 490,275
------- ------- -------
Costs and expenses
Materials, labor, and other
operating expenses 408,485 413,139 395,455
Fiber costs from related
parties 9,831 5,703 11,897
Depreciation, amortization, and
depletion 32,131 31,972 33,720
Selling and distribution
expenses 13,734 13,782 14,130
General and administrative
expenses 11,459 10,373 14,373
St. Helens mill restructuring 128 3,648 (378)
Alternative fuel mixture
credits, net - - (72,698)
Other (income) expense, net (303) 239 (378)
475,465 478,856 396,121
------- ------- -------
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<p> </p>
<pre>
Income from operations 18,640 21,429 94,154
------ ------ ------
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<p> </p>
<pre>
Foreign exchange gain (loss) 687 (678) 563
Change in fair value of
interest rate derivatives (29) (132) (52)
Loss on extinguishment of debt (22,197) - (44,102)
Interest expense (16,445) (22,154) (18,284)
Interest income 37 54 92
(37,947) (22,910) (61,783)
------- ------- -------
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<p> </p>
<pre>
Income (loss) before income
taxes (19,307) (1,481) 32,371
Income tax (provision) benefit 6,622 565 23,349
Net income (loss) $(12,685) $(916) $55,720
======== ===== =======
</pre>
<p> </p>
<pre>
Weighted average common shares
outstanding:
Basic 79,800,010 77,491,233 79,130,897
Diluted 79,800,010 77,491,233 84,232,429
</pre>
<p> </p>
<pre>
Net income (loss) per common
share:
Basic $(0.16) $(0.01) $0.70
Diluted $(0.16) $(0.01) $0.66
</pre>
<p> </p>
<pre>
Segment Information
(unaudited, dollars in thousands)
</pre>
<p> </p>
<pre>
Three Months Ended
------------------
March 31 December 31,
--------
2010 2009 2009
---- ---- ----
Segment sales
Paper $353,489 $351,995 $345,602
Packaging 148,154 157,132 150,574
Intersegment eliminations and
other (7,538) (8,842) (5,901)
$494,105 $500,285 $490,275
======== ======== ========
</pre>
<p> </p>
<pre>
Segment income (loss)
Paper (1) $29,943 $24,776 $75,112
Packaging (1) (5,770) 1,125 23,344
Corporate and Other (1) (4,846) (5,150) (3,739)
19,327 20,751 94,717
------ ------ ------
</pre>
<p> </p>
<pre>
Change in fair value of interest
rate derivatives (29) (132) (52)
Loss on extinguishment of debt (22,197) - (44,102)
Interest expense (16,445) (22,154) (18,284)
Interest income 37 54 92
Income (loss) before income taxes $(19,307) $(1,481) $32,371
======== ======= =======
</pre>
<p> </p>
<pre>
EBITDA (2)
Paper (1) $51,412 $46,122 $96,637
Packaging (1) 3,926 10,781 34,466
Corporate and Other (1) (3) (26,077) (4,180) (46,768)
$29,261 $52,723 $84,335
======= ======= =======
</pre>
<p> </p>
<p> </p>
<pre>
(1) The three months ended December 31, 2009, included $50.1
million of income recorded in the Paper segment, $22.2 million of
income recorded in the Packaging segment, and $0.4 million of income
recorded in the Corporate and Other segment relating to alternative
fuel mixture credits. These amounts are net of fees and expenses and
before taxes.
</pre>
<p> </p>
<pre>
(2) See Summary Notes to Consolidated Financial Statements and
Segment information for a reconciliation of our EBITDA to net income
(loss).
</pre>
<p> </p>
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(3) The three months ended March 31, 2010, and December 31, 2009,
include $22.2 million and $44.1 million, respectively, of loss on
extinguishment of debt.
</pre>
<p> </p>
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Boise Inc.
Consolidated Balance Sheets
(unaudited, dollars in thousands)
</pre>
<p> </p>
<pre>
December 31,
March 31, 2010 2009
-------------- -------------
ASSETS
</pre>
<p> </p>
<pre>
Current
Cash and cash equivalents $91,068 $69,393
Short-term investments 7,232 10,023
Receivables
Trade, less allowances of $760 and
$839 183,719 185,110
Related parties 1,578 2,056
Other (1) 6,167 62,410
Inventories 266,073 252,173
Deferred income taxes 11,279 -
Prepaid and other 5,836 4,819
572,952 585,984
------- -------
Property
Property and equipment, net 1,189,743 1,205,679
Fiber farms and deposits 16,884 17,094
1,206,627 1,222,773
--------- ---------
</pre>
<p> </p>
<pre>
Deferred financing costs 34,614 47,369
Intangible assets, net 31,670 32,358
Other assets 7,402 7,306
----- -----
Total assets $1,853,265 $1,895,790
</pre>
<p> </p>
<pre>
(1) December 31, 2009, includes a $56.6 million receivable for
alternative fuel mixture credits. This amount was collected during
first quarter 2010.
</pre>
<p> </p>
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Boise Inc.
Consolidated Balance Sheets (continued)
(unaudited, dollars in thousands, except share and per-share data)
</pre>
<p> </p>
<pre>
March 31, 2010 December 31, 2009
-------------- -----------------
LIABILITIES AND
STOCKHOLDERS' EQUITY
</pre>
<p> </p>
<pre>
Current
Current portion of long-
term debt $16,663 $30,711
Income taxes payable 98 240
Accounts payable
Trade 174,442 172,518
Related parties 941 2,598
Accrued liabilities
Compensation and benefits 45,636 67,948
Interest payable 12,443 4,946
Other 17,647 23,735
267,870 302,696
------- -------
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<p> </p>
<pre>
Debt
Long-term debt, less
current portion 775,581 785,216
------- -------
</pre>
<p> </p>
<pre>
Other
Deferred income taxes 48,777 32,253
Compensation and benefits 120,686 123,889
Other long-term
liabilities 30,681 30,801
------ ------
200,144 186,943
------- -------
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<p> </p>
<pre>
Commitments and contingent
liabilities
</pre>
<p> </p>
<pre>
Stockholders' Equity
Preferred stock, $.0001
par value per share: - -
1,000,000 shares
authorized; none issued
Common stock, $.0001 par
value per share: 8 8
250,000,000 shares
authorized;
84,792,231 shares and
84,418,691 shares issued
and outstanding
Additional paid-in capital 579,563 578,669
Accumulated other
comprehensive income
(loss) (71,027) (71,553)
Retained earnings 101,126 113,811
Total stockholders' equity 609,670 620,935
------- -------
</pre>
<p> </p>
<pre>
Total liabilities and
stockholders' equity $1,853,265 $1,895,790
========== ==========
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<p> </p>
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Boise Inc.
Consolidated Statements of Cash Flows
(unaudited, dollars in thousands)
</pre>
<p> </p>
<pre>
Three Months Ended March 31
---------------------------
2010 2009
---- ----
</pre>
<p> </p>
<pre>
Cash provided by (used for)
operations
Net income (loss) $(12,685) $(916)
Items in net income (loss) not
using (providing) cash
Depreciation, depletion, and
amortization
of deferred financing costs and
other 35,066 35,030
Share-based compensation expense 894 857
Notes payable interest expense - 2,623
Pension and other postretirement
benefit expense 2,438 2,450
Deferred income taxes (7,461) (844)
Change in fair value of energy
derivatives 3,330 2,191
Change in fair value of interest
rate derivatives 29 132
(Gain) loss on sales of assets,
net (114) (20)
Other (687) 678
Loss on extinguishment of debt 22,197 -
Decrease (increase) in working
capital, net of acquisitions
Receivables 58,213 38,800
Inventories (16,085) 25,258
Prepaid expenses 389 256
Accounts payable and accrued
liabilities (13,057) (19,577)
Current and deferred income taxes 831 (39)
Pension and other postretirement
benefit payments (5,657) (1,319)
Other 321 128
--- ---
Cash provided by operations 67,962 85,688
------ ------
Cash provided by (used for)
investment
Acquisitions of businesses and
facilities - (543)
Expenditures for property and
equipment (14,734) (17,171)
Purchases of short-term
investments (2,388) -
Maturities of short-term
investments 5,182 -
Sales of assets 22 61
Other 1,093 (412)
Cash used for investment (10,825) (18,065)
------- -------
Cash provided by (used for)
financing
Issuances of long-term debt 300,000 10,000
Payments of long-term debt (323,683) (72,631)
Payments of deferred financing
fees (11,779) -
Cash used for financing (35,462) (62,631)
------- -------
Increase in cash and cash
equivalents 21,675 4,992
Balance at beginning of the
period 69,393 22,518
Balance at end of the period $91,068 $27,510
======= =======
Summary Notes to Consolidated Financial Statements and Segment Information
</pre>
<p>The Consolidated Statements of Income (Loss), Consolidated Balance Sheets, Consolidated Statements of Cash Flows, and Segment Information do not include all Notes to Consolidated Financial Statements and should be read in conjunction with the Company's 2009 Annual Report on Form 10K and the Company's Quarterly Report on Form 10Q for the period ended <span class="xn-chron">March 31, 2010</span>, as well as other reports the Company files with the SEC. Net income (loss) for all periods presented involved estimates and accruals.</p>
<p/>
<p><span class="xn-location">Boise</span> Inc. operates its business in three reportable segments: Paper, Packaging, and Corporate and Other (support services). <span class="xn-location">Boise</span> Inc. manufactures and sells a range of papers, including communication-based papers, packaging-demand-driven papers, and market pulp. <span class="xn-location">Boise</span> Inc. also manufactures and sells corrugated containers and sheets as well as linerboard and newsprint.</p>
<p/>
<p>EBITDA represents income (loss) before interest (change in fair value of interest rate derivatives, interest expense, and interest income), income taxes, and depreciation, amortization, and depletion. The following table reconciles net income (loss) to EBITDA for the three months ended <span class="xn-chron">March 31, 2010</span> and 2009, and the three months ended <span class="xn-chron">December 31, 2009</span> (unaudited, dollars in thousands):</p>
<p/>
<p> </p>
<p> </p>
<pre>
March 31 December 31,
--------
2010 2009 2009
---- ---- ----
</pre>
<p> </p>
<pre>
Net income (loss) $(12,685) $(916) $55,720
Change in fair value of interest
rate derivatives 29 132 52
Interest expense 16,445 22,154 18,284
Interest income (37) (54) (92)
Income tax provision (benefit) (6,622) (565) (23,349)
Depreciation, amortization, and
depletion 32,131 31,972 33,720
EBITDA $29,261 $52,723 $84,335
======= ======= =======
</pre>
<p>The following table reconciles EBITDA to EBITDA excluding special items for the three months ended <span class="xn-chron">March 31, 2010</span> and 2009, and the three months ended <span class="xn-chron">December 31, 2009</span> (unaudited, dollars in thousands):</p>
<p/>
<p> </p>
<p> </p>
<pre>
Three Months Ended
------------------
March 31 December 31,
--------
2010 2009 2009
---- ---- ----
</pre>
<p> </p>
<pre>
EBITDA $29,261 $52,723 $84,335
St. Helens mill restructuring (a) 128 3,648 (378)
Change in fair value of energy hedges 3,330 2,191 (976)
Alternative fuel mixture credits (b) - - (72,698)
Loss on extinguishment of debt 22,197 - 44,102
EBITDA excluding special items $54,916 $58,562 $54,385
======= ======= =======
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<p> </p>
<p> </p>
<pre>
(a) In November 2008, we announced the restructuring of our St.
Helens, Oregon, paper mill. We continue to incur decommissioning
and other miscellaneous costs related to the restructuring of the
mill. These expenses are recorded when the liability is incurred.
</pre>
<p> </p>
<pre>
(b) During the three months ended December 31, 2009, we recorded
$72.7 million of alternative fuel mixture credits, net of associated
fees and expenses and before taxes. We recorded these amounts in
"Alternative fuel mixture credits, net" in our Consolidated
Statement of Income (Loss). At December 31, 2009, we had $56.6
million recorded in "Receivables, other" related to these credits.
During first quarter 2010, we collected $56.6 million related to
these credits.
</pre>
<p>The following table reconciles net income (loss) to net income (loss) excluding special items and presents net income (loss) excluding special items per diluted share for the three months ended <span class="xn-chron">March 31, 2010</span> and 2009, and the three months ended <span class="xn-chron">December 31, 2009</span> (unaudited, dollars in thousands, except share and per-share data):</p>
<p/>
<p> </p>
<p> </p>
<pre>
Three Months Ended
------------------
March 31, March 31, December 31,
2010 2009 2009
---- ---- ----
</pre>
<p> </p>
<pre>
Net income (loss) $(12,685) $(916) $55,720
St. Helens mill restructuring 128 3,648 (378)
Change in fair value of energy
hedges 3,330 2,191 (976)
Alternative fuel mixture credits - - (72,698)
Loss on extinguishment of debt 22,197 - 44,102
Tax impact of special items (a) (9,928) (2,260) 11,591
Reversal of income tax valuation
allowances - - (33,180)
Net income (loss) excluding special
items $3,042 $2,663 $4,181
====== ====== ======
Weighted average common shares
outstanding: diluted 84,194,612 79,078,590 84,232,429
Net income (loss) excluding special
items per diluted share $0.04 $0.03 $0.05
</pre>
<p> </p>
<p> </p>
<pre>
(a) Special items are tax effected in the aggregate at an assumed
combined federal and state statutory rate of 38.7%.
</pre>
<p>The following table reconciles total debt to net total debt as of <span class="xn-chron">March 31, 2010</span> and 2009, and <span class="xn-chron">December 31, 2009</span> (unaudited, dollars in thousands):</p>
<p> </p>
<p> </p>
<pre>
March 31, March 31, December 31,
2010 2009 2009
---- ---- ----
</pre>
<p> </p>
<pre>
Current portion of long-term
debt $16,663 $7,479 $30,711
Long-term debt, less current
portion 775,581 967,340 785,216
Notes payable - 69,229 -
--- ------ ---
Total debt 792,244 1,044,048 815,927
Less cash and cash equivalents
and short-term investments (98,300) (27,510) (79,416)
------- ------- -------
Net total debt $693,944 $1,016,538 $736,511
======== ========== ========
For further information: Media, Virginia Aulin, +1-208-384-7837, Investors, Jason Bowman, both of Boise Inc., +1-208-384-7456 Web Site: http://www.BoiseInc.com
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