KINGSEY FALLS, QC, Feb. 24 /PRNewswire-FirstCall/ - Cascades Inc. (TSX: CAS), a leader in the recovery of recyclable materials and the manufacturing of green packaging and tissue paper products, announces its unaudited financial results for the three-month period and the fiscal year ended December 31, 2010.
(All amounts in this press release are in Canadian dollars unless otherwise indicated.)
Fiscal year highlights ---------------------- - Good profitability despite average costs of recycled fibre and pulp being at historical highs and the strong Canadian dollar. - Total shipments up 6% compared to 2009 (excluding the impact of acquisitions). - Free cash flow(1) of $72 million and net debt down $84 million in comparison to 2009. Debt-to-capitalization ratio at its lowest level in 6 years. - Net earnings per share excluding specific items of $0.65 compared to $1.13 in 2009. Including specific items, net earnings per share of $0.18 compared to $0.61 in 2009. - Operating income before depreciation and amortization (EBITDA) excluding specific items of $398 million compared to $465 million in 2009 and $306 million in 2008. Fourth quarter highlights ------------------------- - Net earnings per share excluding specific items of $0.14 compared to $0.29 in the previous quarter and $0.27 in the same period of last year. Including specific items, net loss per share of $0.35 compared to net earnings of $0.31 in the previous quarter and a net loss of $0.42 in the corresponding period of last year. - EBITDA excluding specific items of $98 million compared to $110 million in Q4 2009. - Free cash flow1 of $45 million and net debt down $67 million in comparison to the previous quarter. Recent developments ------------------- - Appointment of Mario Plourde as Chief Operating Officer. - Sale of the Avot-Vallée, France, white-top linerboard mill. - Amendment and renewal of the credit agreement with improved financing conditions. Consolidation of the existing revolving and term credit facilities into a new $750 million revolving credit facility maturing in February 2015. ---------------- (1) Cascades defines free cash flow as cash flow provided by operating activities less purchases of property, plant and equipment, increase in other assets and dividends and share buybacks. Financial Summary ----------------- Selected consolidated information (unaudited) ---------------- ---------------------------- (in millions of Canadian dollars, except amounts per share) 2010 2009 Q4/2010 Q4/2009 Q3/2010 ------------------------------------------------------------------------- Sales 3,959 3,877 991 952 1,028 Excluding specific items(1) Operating income before depreciation and amortization (OIBD or EBITDA) 398 465 98 110 115 Operating income 186 247 45 54 62 Net earnings 63 110 14 26 28 per common share $0.65 $1.13 $0.14 $0.27 $0.29 Cash flow from operations (adjusted) 260 327 65 77 83 As reported Operating income before depreciation and amortization (OIBD or EBITDA)(1) 334 432 40 70 111 Operating income (loss) 122 214 (13) 14 58 Net earnings (loss) 17 60 (34) (41) 30 per common share $0.18 $0.61 $(0.35) $(0.42) $0.31 Cash flow from operations (adjusted)(1) 249 305 58 62 82 ------------------------------------------- ---------------------------- Note 1 - see the supplemental information on non-GAAP measures.
Commenting on the annual and fourth quarter results, Mr. Alain Lemaire, President and Chief Executive Officer stated: "Overall, we delivered solid results considering the strong headwinds we faced. In 2010, the cost of recycled fibres and pulp reached a new historical peak and the Canadian dollar averaged its highest value since 1976. Despite these negative factors, we continued to progress and posted our second-highest adjusted net earnings in the past 8 years. We also returned $20 million to our shareholders through dividends and share buybacks and, aligned with one of our main financial objectives, we generated more than $70 million in free cash flow to pay down debt. All in all, this performance clearly demonstrates the positive impact of our various strategic initiatives, our efforts in innovation, sales and marketing as well as our cost reduction and restructuring measures."
Results analysis for the three-month period ended December 31, 2010 ------------------------------------------------------------------- (compared to the previous year) -------------------------------
In comparison with the same period last year, sales rose by 4% to $991 million resulting from higher selling prices, business acquisitions and a 1% increase in shipments (excluding the impact of acquisitions). This was partly offset by the 4% appreciation of the Canadian dollar.
The operating income excluding specific items amounted to $45 million compared to $54 million in Q4 2009. Higher volumes and selling prices were more than offset by the rise of raw material costs and the Canadian dollar. On a segmented basis, results of our containerboard segment improved while our other packaging and tissue segments posted weaker profitability. When including specific items, the operating loss amounted to $13 million in comparison to an operating income of $14 million in the same period of last year.
In the fourth quarter of 2010, these specific items impacted our operating income and/or net earnings (before tax):
- a $48 million impairment loss (impact on operating income and net earnings); - a $10 million loss on disposal and others (impact on operating income and net earnings); - a $5 million foreign exchange loss on long-term debt and financial instruments (impact on net earnings); - a $1 million net loss from discontinued operations (impact on net earnings).
For further details, see the two following tables on GAAP and non-GAAP measures reconciliation.
Net earnings excluding specific items amounted to $14 million ($0.14 per share) in the fourth quarter of 2010 compared to $26 million ($0.27 per share) for the same period of last year. The financing expense was slightly higher than in Q4 2009 while the recovery of income taxes was lower. Including specific items, the net loss amounted to $34 million ($0.35 per share) compared to $41 million ($0.42 per share) for the same quarter in 2009.
As a result of the appreciation of the Canadian dollar and free cash flow generation, net debt decreased by $84 million compared to December 31st 2009.
Results analysis for the three-month period ended December 31, 2010 ------------------------------------------------------------------- (compared to the previous quarter) ----------------------------------
In comparison to the previous quarter, sales decreased mostly due to the usual lower seasonal demand and the appreciation of the Canadian dollar. Operating income and net earnings also declined as a result of the previous factors combined with the rise of raw material and energy costs and an unfavourable sales mix in some of our sectors.
Results analysis for the fiscal year ended December 31, 2010 ------------------------------------------------------------
In comparison to last year, sales increased by 2% to $4 billion reflecting improved selling prices, business acquisitions as well as a 6% increase in shipments (excluding the impact of acquisitions) which more than offset the negative impact of a stronger Canadian dollar.
The operating income from continuing operations excluding specific items decreased to $186 million compared to $247 million last year mainly as a result of higher raw material and the appreciation of the Canadian dollar. These elements more than counterbalanced the impact of improved volumes and efficiency as well as better selling prices. On a segmented basis, results of our containerboard and specialty products segments improved while the profitability of our boxboard and tissue papers sectors declined. Operating income from continuing operations including specific items decreased by $92 million to $122 million.
For the fiscal year ended December 31, 2010, net earnings excluding specific items amounted to $63 million ($0.65 per share) compared to net earnings of $110 million ($1.13 per share) last year. Including specific items, net earnings reached $17 million ($0.18 per share) compared to $60 million ($0.61 per share) in 2009.
Near-term outlook -----------------
Mr. Alain Lemaire, President and Chief Executive Officer added: "Looking ahead to the first quarter, demand should remain healthy and even slightly improve along with seasonality. High raw material costs and the strong Canadian dollar will however continue to put pressure on our profitability.
For 2011, we are well positioned to continue delivering good earnings and free cash flow as we should benefit from the ongoing economic recovery and the several selling price increases that were implemented in the previous year. In addition, our recently announced divestiture and refinancing will have a positive impact on our financing expenses and free cash flow and allow us to strategically invest in the development of our core packaging, tissue and recovery operations."
Dividend on common shares and normal course issuer bid ------------------------------------------------------
The Board of Directors of Cascades declared a quarterly dividend of $0.04 per share to be paid March 25, 2011 to shareholders of record at the close of business on March 11, 2011. This dividend paid by Cascades is an "eligible dividend" as per the Income Tax Act (Bill C-28, Canada). In 2010, Cascades purchased for cancellation 638,181 shares at an average price of $7.17 representing an aggregate amount of approximately $4.6 million.
International Financial Reporting Standards -------------------------------------------
In February 2008, the Accounting Standards Board ("AcSB") confirmed that the use of International Financial Reporting Standards ("IFRS") will replace Canadian Generally Accepted Accounting Principles ("GAAP") in 2011 for publicly accountable profit-oriented enterprises. The transition from current Canadian GAAP to IFRS will be applicable to the Company for the fiscal year beginning on January 1, 2011. The Company's first IFRS financial statements will be for the year ending December 31, 2011 including comparative figures and the opening balance sheet as at January 1, 2010. Beginning in the first quarter of 2011, the Company will provide unaudited consolidated financial statements in accordance with IFRS, also including the opening balance sheet as at the transition date and comparative figures for 2010.
The conversion to IFRS will impact the way the Company discloses its financial results. The first financial statements prepared using IFRS will require the inclusion of numerous notes disclosing extensive transitional information and full disclosure of all new IFRS accounting policies. The Company has prepared preliminary IFRS financial statements in accordance with IAS 1, Presentation of Financial Statements. Also, quarterly IFRS financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting, and IFRS 1, First-time Adoption of International Financial Reporting Standards, and are currently under review by our auditors.
In its 2010 annual report, which should be available in the last week of March 2011, Cascades will disclose the highlights of the initial adjustments required to be made on adoption of IFRS in order to provide an opening balance sheet and the significant accounting policies required or expected to be applied by us subsequent to adoption that will be significantly different from our current accounting policies. When the annual report will be available, Cascades might also hold a conference call to discuss the impact of adoption of IFRS.
Supplemental information on non-GAAP measures ---------------------------------------------
Operating income before depreciation and amortization, earnings before interests, taxes, depreciation and amortization, operating income and cash flow from operations are not measures of performance under Canadian GAAP. The Company includes operating income before depreciation and amortization, earnings before interests, taxes, depreciation and amortization, operating income and cash flow from operations because they are measures used by management to assess the operating and financial performance of the Company's operating segments. Additionally, the Company believes that these items provide additional measures often used by investors to assess a company's operating performance and its ability to meet debt service requirements. However, operating income before depreciation and amortization, earnings before interests, taxes, depreciation and amortization, operating income and cash flow from operations do not represent, and should not be used as a substitute for net earnings or cash flows from operating activities as determined in accordance with Canadian GAAP, and they are not necessarily an indication of whether cash flow will be sufficient to fund our cash requirements. In addition, our definition of operating income before depreciation and amortization, earnings before interests, taxes, depreciation and amortization, operating income and cash flow from operations may differ from those of other companies. Cash flow from operations is defined as cash flow from operating activities as determined in accordance with Canadian GAAP excluding the change in working capital components.
Operating income before depreciation and amortization excluding specific items, earnings before interests, taxes, depreciation and amortization excluding specific items, operating income excluding specific items, net earnings excluding specific items, net earnings per common share excluding specific items and cash flow from operations excluding specific items are non-GAAP measures. The Company believes that it is useful for investors to be aware of specific items that have adversely or positively affected its GAAP measures, and that the above mentioned non-GAAP measures provide investors with a measure of performance with which to compare its results between periods without regard to these specific items. The Company's measures excluding specific items have no standardized meaning prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies and therefore should not be considered in isolation.
Specific items are defined to include charges for impairment of assets, charges for facility or machine closures, debt restructuring charges, gains or losses on sale of business unit, unrealized gains or losses on derivative financial instruments that do not qualify for hedge accounting, foreign exchange gains or losses on long-term debt and other significant items of an unusual or non-recurring nature.
Net earnings (loss), which is a performance measure defined by Canadian GAAP is reconciled below to operating income (loss), operating income excluding specific items and operating income before depreciation excluding specific items or earnings before interests, taxes, depreciation and amortization excluding specific items:
---------------------------------------------- (in millions of Canadian dollars) 2010 2009 Q4/2010 Q4/2009 Q3/2010 ------------------------------------------- ---------------------------- Net earnings (loss) 17 60 (34) (41) 30 Net loss from discontinued operations 1 - 1 - - Non-controlling interest 3 (1) 2 - - Share of results of significantly influenced companies (15) (17) (2) (7) (11) Provision for (recovery of) income taxes - 23 (12) (16) 8 Foreign exchange loss on long-term debt and financial instruments 4 45 5 37 4 Gain on purchases of senior notes - (14) - - - Loss on long-term debt refinancing 3 17 - 17 - Financing expense 109 101 27 24 27 ---------------- ---------------------------- Operating income 122 214 (13) 14 58 Specific items : Loss (gain) on disposal and others 8 1 10 - (2) Impairment loss 49 46 48 42 1 Closure and restructuring costs 1 12 - 2 1 Unrealized loss (gain) on financial instruments 6 (26) - (4) 4 ---------------- ---------------------------- 64 33 58 40 4 ---------------- ---------------------------- Operating income - excluding specific items 186 247 45 54 62 Depreciation and amortization 212 218 53 56 53 ---------------- ---------------------------- Operating income before depreciation and amortization (OIBD or EBITDA) - excluding specific items 398 465 98 110 115 ------------------------------------------- ----------------------------
The following table reconciles net earnings (loss) and net earnings (loss) per share to net earnings excluding specific items and net earnings per share excluding specific items:
---------------------------------------------- (in millions of Canadian dollars, except amounts Net earnings (loss) per share) ------------------------------------------------------------------------- 2010 2009 Q4/2010 Q4/2009 Q3/2010 ---------------- ---------------------------- As per GAAP 17 60 (34) (41) 30 Specific items : Loss (gain) on disposal and others 8 1 10 - (2) Impairment loss 49 46 48 42 1 Closure and restructuring costs 1 12 - 2 1 Unrealized loss (gain) on financial instruments 6 (26) - (4) 4 Loss on long-term debt refinancing 3 17 - 17 - Gain on purchase of senior notes - (14) - - - Foreign exchange loss on long-term debt and financial instruments 4 45 5 37 4 Share of results of significantly influenced companies (9) (5) - (3) (9) Net loss from discontinued operations 1 - 1 - - Adjustment of statutory tax rate - (6) - (2) - Tax effect on specific items (17) (20) (16) (22) (1) ---------------- ---------------------------- 46 50 48 67 (2) ---------------- ---------------------------- Excluding specific items 63 110 14 26 28 ------------------------------------------- ---------------------------- ---------------------------------------------- (in millions of Canadian Net earnings (loss) per share(1) dollars, except amounts per share) ------------------------------------------- ---------------------------- 2010 2009 Q4/2010 Q4/2009 Q3/2010 ---------------- ---------------------------- As per GAAP $0.18 $0.61 $(0.35) $(0.42) $0.31 Specific items : Loss (gain) on disposal and others $0.06 $ - $0.07 $ - $(0.01) Impairment loss $0.38 $0.35 $0.37 $0.32 $0.01 Closure and restructuring costs $0.01 $0.09 $ - $0.02 $0.01 Unrealized loss (gain) on financial instruments $0.06 $(0.19) $ - $(0.03) $0.04 Loss on long-term debt refinancing $0.02 $0.11 $ - $0.11 $ - Gain on purchase of senior notes $ - $(0.13) $ - $ - $ - Foreign exchange loss on long-term debt and financial instruments $0.03 $0.40 $0.04 $0.32 $0.03 Share of results of significantly influenced companies $(0.10) $(0.05) $ - $(0.03) $(0.10) Net loss from discontinued operations $0.01 $ - $0.01 $ - $ - Adjustment of statutory tax rate $ - $(0.06) $ - $(0.02) $ - Tax effect on specific items ---------------- ---------------------------- $0.47 $0.52 $0.49 $0.69 $(0.02) ---------------- ---------------------------- Excluding specific items $0.65 $1.13 $0.14 $0.27 $0.29 ------------------------------------------- ---------------------------- Note 1 - specific amounts per share are calculated on an after-tax basis.
The following table reconciles cash flow provided by operating activities to cash flow (adjusted) from operations excluding specific items:
---------------------------------------------- Cash flow from operations ---------------------------------------------- (in millions of Canadian dollars) 2010 2009 Q4/2010 Q4/2009 Q3/2010 ------------------------------------------------------------------------- Cash flow provided by operating activities 232 357 103 91 73 Changes in non-cash working capital components 17 (52) (45) (29) 9 ----------------- --------------------------- Cash flow (adjusted) from operations 249 305 58 62 82 Specific items, net of current income taxes : Loss on disposal and others 7 1 7 - - Loss on long-term debt refinancing 3 13 - 13 - Closure and restructuring costs 1 8 - 2 1 ----------------- --------------------------- Excluding specific items 260 327 65 77 83 -------------------------------------------- ---------------------------
Founded in 1964, Cascades produces, converts and markets packaging and tissue products that are composed mainly of recycled fibres. The Company employs close to 12,500 employees, who work in more than 100 units located in North America and Europe. Its management philosophy, its more than 45 years of experience in recycling and its continued efforts in research and development are strengths that enable Cascades to create new products for its customers. Cascades' shares trade on the Toronto Stock Exchange, under the ticker symbol CAS.
Certain statements in this release, including statements regarding future results and performance, are forward-looking statements (as such term is defined under the Private Securities Litigation Reform Act of 1995) based on current expectations. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions, decreases in demand for the Company's products, increases in raw material costs, fluctuations in selling prices and adverse changes in general market and industry conditions and other factors listed in the Company's Securities and Exchange Commission filings.
Consolidated Balance Sheets (in millions of Canadian dollars) As at As at December 31, December 31, 2010 2009 -------------------------- Assets (unaudited) Current assets Cash and cash equivalents 10 19 Accounts receivable 589 543 Inventories 534 520 ------------------------------------------------------------------------- 1,133 1,082 Property, plant and equipment 1,777 1,912 Intangible assets 150 165 Other assets 350 317 Goodwill 314 316 ------------------------------------------------------------------------- 3,724 3,792 -------------------------- -------------------------- Liabilities and Equity Current liabilities Bank loans and advances 64 83 Accounts payable and accrued liabilities 578 505 Current portion of long-term debt 12 10 ------------------------------------------------------------------------- 654 598 Long-term debt 1,383 1,459 Other liabilities 406 410 ------------------------------------------------------------------------- 2,443 2,467 -------------------------- Equity attributable to Shareholders Capital stock 496 499 Contributed surplus 14 14 Retained earnings 701 700 Accumulated other comprehensive income 46 91 ------------------------------------------------------------------------- 1,257 1,304 Non-controlling interest 24 21 ------------------------------------------------------------------------- Total equity 1,281 1,325 ------------------------------------------------------------------------- 3,724 3,792 -------------------------- -------------------------- Consolidated Statements of Earnings (Loss) (in millions of Canadian dollars, except per share amounts and number of shares) (unaudited) For the 3-month periods For the years ended December 31, ended December 31, 2010 2009 2010 2009 ----------------------------------------------- Sales 991 952 3,959 3,877 Cost of sales and expenses Cost of sales (excluding depreciation and amortization) 802 737 3,173 2,991 Depreciation and amortization 53 56 212 218 Selling and administrative expenses 97 104 395 413 Losses on disposal and others 10 - 8 1 Impairment and other restructuring costs 48 44 50 58 Gain on financial instruments (6) (3) (1) (18) ------------------------------------------------------------------------- 1,004 938 3,837 3,663 ------------------------------------------------------------------------- Operating income (loss) (13) 14 122 214 Financing expense 27 24 109 101 Loss on refinancing of long-term debt - 17 3 17 Gain on purchase of senior notes - - - (14) Foreign exchange loss on long-term debt and financial instruments 5 37 4 45 ------------------------------------------------------------------------- (45) (64) 6 65 Provision for (recovery of) income taxes (12) (16) - 23 Share of results of significantly influenced companies (2) (7) (15) (17) ------------------------------------------------------------------------- Net earnings (loss) from continuing operations including non-controlling interest for the period (31) (41) 21 59 Net loss from discontinued operations (1) - (1) - ------------------------------------------------------------------------- Net earnings (loss) including non-controlling interest for the period (32) (41) 20 59 Less : Non-controlling interest income (loss) 2 - 3 (1) ------------------------------------------------------------------------- Net earnings (loss) attributable to Shareholders for the period (34) (41) 17 60 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net earnings (loss) from continuing operations per common share Basic ($0.34) ($0.42) $0.18 $0.61 ----------------------------------------------- ----------------------------------------------- Diluted ($0.34) ($0.42) $0.18 $0.60 ----------------------------------------------- ----------------------------------------------- Net earnings (loss) per common share Basic ($0.35) ($0.42) $0.18 $0.61 ----------------------------------------------- ----------------------------------------------- Diluted ($0.35) ($0.42) $0.18 $0.60 ----------------------------------------------- ----------------------------------------------- Weighted average number of common shares outstanding 96,608,106 97,283,958 96,807,032 97,656,412 ----------------------------------------------- ----------------------------------------------- Consolidated Statements of Comprehensive Income (Loss) (in millions of Canadian dollars) (unaudited) For the 3-month periods For the years ended December 31, ended December 31, 2010 2009 2010 2009 ----------------------------------------------- Net earnings (loss) including non-controlling interest for the period (32) (41) 20 59 ----------------------------------------------- Other comprehensive income (loss) Translation adjustments Change in foreign currency translation of self-sustaining foreign subsidiaries (32) (23) (53) (128) Change in foreign currency translation related to hedging activities 19 14 28 87 Income taxes (2) (2) (4) (12) Cash flow hedges Change in fair value of foreign exchange forward contracts (2) 35 (1) 87 Change in fair value of interest rate swaps agreements 3 - - - Change in fair value of commodity derivative financial instruments 3 (1) (21) (2) Income taxes (1) (9) 6 (26) ----------------------------------------------- (12) 14 (45) 6 ----------------------------------------------- Comprehensive income (loss) including non-controlling interest for the period (44) (27) (25) 65 ----------------------------------------------- Less: Comprehensive income (loss) attributable to non-controlling interest 2 - 3 (1) ----------------------------------------------- Comprehensive income (loss) attributable to Shareholders (46) (27) (28) 66 ----------------------------------------------- ----------------------------------------------- Consolidated Statements of Equity (in millions of Canadian dollars) For the year ended December 31, 2010 -------------------------------------------------------------- (unaudited) Total Accu- equity mulated attribu- Non- Re- other table control- Contri- tained- compre- to ling Capital buted ear- hensive Share- inte- Total stock surplus nings income holders rest equity -------------------------------------------------------------- Balance - Beginning of year 499 14 700 91 1,304 21 1,325 Net earnings for the year - - 17 - 17 3 20 Other compre- hensive income (loss) - - - (45) (45) - (45) Dividends - - (16) - (16) - (16) Stock options - 1 - - 1 - 1 Redemption of common shares (3) (1) - - (4) - (4) -------------------------------------------------------------- Balance - End of year 496 14 701 46 1,257 24 1,281 -------------------------------------------------------------- -------------------------------------------------------------- For the year ended December 31, 2009 -------------------------------------------------------------- Total Accu- equity mulated attribu- Non- Re- other table control- Contri- tained- compre- to ling Capital buted ear- hensive Share- inte- Total stock surplus nings income holders rest equity -------------------------------------------------------------- Balance - Beginning of year 506 9 656 85 1,256 22 1,278 Net earnings (loss) for the year - - 60 - 60 (1) 59 Other compre- hensive income - - - 6 6 - 6 Dividends - - (16) - (16) - (16) Stock options - 2 - - 2 - 2 Redemption of common shares (7) 3 - - (4) - (4) -------------------------------------------------------------- Balance - End of year 499 14 700 91 1,304 21 1,325 -------------------------------------------------------------- -------------------------------------------------------------- Consolidated Statements of Cash Flows (in millions of Canadian dollars) (unaudited) For the 3-month periods For the years ended December 31, ended December 31, ----------------------------------------------- 2010 2009 2010 2009 ----------------------------------------------- OPERATING ACTIVITIES FROM CONTINUING OPERATIONS Net earnings (loss) attributable to Shareholders for the period (34) (41) 17 60 Net loss from discontinued operations 1 - 1 - ------------------------------------------------------------------------- Net earnings (loss) from continuing operations (33) (41) 18 60 Adjustments for Depreciation and amortization 53 56 212 218 Losses on disposal and others 3 - 1 1 Impairment and other restructuring costs 48 42 49 50 Unrealized loss (gain) on financial instruments - (4) 6 (26) Loss on refinancing of long-term debt - 4 - 4 Gain on purchase of senior notes - - - (14) Foreign exchange loss on long-term debt and financial instruments 5 37 4 45 Future income taxes (20) (18) (28) (7) Share of results of significantly influenced companies, net of dividends received 2 (7) (11) (17) Non-controlling interest 2 - 3 (1) Others (2) (7) (5) (8) ------------------------------------------------------------------------- 58 62 249 305 Change in non-cash working capital components 45 29 (17) 52 ------------------------------------------------------------------------- 103 91 232 357 ------------------------------------------------------------------------- INVESTING ACTIVITIES FROM CONTINUING OPERATIONS Purchases of property, plant and equipment (50) (49) (131) (171) Increase in other assets (10) (8) (37) (17) Business acquisitions - (5) (3) (69) ------------------------------------------------------------------------- (60) (62) (171) (257) ------------------------------------------------------------------------- FINANCING ACTIVITIES FROM CONTINUING OPERATIONS Bank loans and advances (14) 4 (16) (18) Change in revolving credit facilities 68 (219) 243 (250) Issuance of senior notes, net of related expenses - 955 - 955 Purchase of senior notes - (761) (165) (779) Increase in other long-term debt 1 - 1 27 Payments of other long-term debt (103) (4) (109) (12) Early settlement of foreign exchange contracts - - - 8 Redemption of common shares - (1) (4) (4) Dividends (4) (4) (16) (16) ------------------------------------------------------------------------- (52) (30) (66) (89) ------------------------------------------------------------------------- Change in cash and cash equivalents during the period from continuing operations (9) (1) (5) 11 Change in cash and cash equivalents from discontinued operations (1) - (3) (3) ------------------------------------------------------------------------- Net change in cash and cash equivalents during the period (10) (1) (8) 8 Translation adjustments on cash and cash equivalents (1) - (1) - Cash and cash equivalents - Beginning of period 21 20 19 11 ------------------------------------------------------------------------- Cash and cash equivalents - End of period 10 19 10 19 -----------------------------------------------
Selected Segmented Information
(in millions of Canadian dollars)
(unaudited)
In 2010, the Company has modified its segmented information disclosure for its Specialty Products segments in order to reflect how management analyses this information. The Specialty Products segment is divided into four subsectors: Industrial packaging, Consumer packaging, Specialty papers and Recovery and recycling. The Company has reclassified comparative figures to conform to the presentation adopted.
For the 3-month periods For the years ended December 31, ended December 31, ----------------------------------------------- 2010 2009 2010 2009 ----------------------------------------------- Sales Packaging products Boxboard Manufacturing 189 178 727 706 Converting 158 160 633 692 Intersegment sales (20) (18) (85) (85) ----------------------------------------------- 327 320 1,275 1,313 Containerboard Manufacturing 147 124 584 517 Converting 201 204 839 856 Intersegment sales (80) (76) (337) (311) ----------------------------------------------- 268 252 1,086 1,062 Specialty products Industrial packaging 49 47 195 184 Consumer packaging 19 20 77 82 Specialty papers 71 73 301 312 Recovery and recycling 90 62 318 199 Intersegment sales (4) (2) (11) (8) ----------------------------------------------- 225 200 880 769 Intersegment sales (30) (22) (115) (67) ----------------------------------------------- 790 750 3,126 3,077 Tissue papers Manufacturing and converting 213 212 858 840 Intersegment sales and others (12) (10) (25) (40) ------------------------------------------------------------------------- Total 991 952 3,959 3,877 ------------------------------------------------------------------------- ------------------------------------------------------------------------- For the 3-month periods For the years ended December 31, ended December 31, ----------------------------------------------- 2010 2009 2010 2009 ----------------------------------------------- Operating income (loss) before depreciation and amortization Packaging products Boxboard Manufacturing 2 14 32 48 Converting 8 17 58 59 Others (3) (37) (13) (40) ----------------------------------------------- 7 (6) 77 67 Containerboard Manufacturing (5) 10 49 91 Converting 11 16 82 56 Others 6 3 3 (2) ----------------------------------------------- 12 29 134 145 Specialty products Industrial packaging Consumer packaging 5 5 25 20 Specialty papers 1 2 6 11 Recovery and recycling (1) 7 14 37 Others 7 3 26 6 (1) 1 (1) - ----------------------------------------------- 11 18 70 74 ----------------------------------------------- 30 41 281 286 Tissue papers Manufacturing and converting 17 34 84 153 Corporate (7) (5) (31) (7) ------------------------------------------------------------------------- Operating income before depreciation and amortization 40 70 334 432 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Depreciation and amortization Boxboard (15) (18) (59) (75) Containerboard (17) (15) (71) (63) Specialty products (8) (9) (34) (34) Tissue papers (10) (10) (41) (37) Corporate and eliminations (3) (4) (7) (9) ----------------------------------------------- (53) (56) (212) (218) ----------------------------------------------- Operating income (loss) (13) 14 122 214 ------------------------------------------------------------------------- For the 3-month periods For the years ended December 31, ended December 31, ----------------------------------------------- 2010 2009 2010 2009 ----------------------------------------------- Purchases of property, plant and equipment Packaging products Boxboard Manufacturing 7 10 18 30 Converting 6 6 16 29 ----------------------------------------------- 13 16 34 59 Containerboard Manufacturing 5 5 15 15 Converting 4 9 16 16 ----------------------------------------------- 9 14 31 31 Specialty products Industrial packaging 1 - 2 1 Consumer packaging 1 2 5 4 Specialty papers 10 6 15 12 Recovery and recycling 6 2 9 16 ----------------------------------------------- 18 10 31 33 ----------------------------------------------- 40 40 96 123 Tissue papers Manufacturing and converting 13 5 36 33 Corporate 3 7 17 20 ------------------------------------------------------------------------- Total purchases 56 52 149 176 Disposal of property, plant and equipment - (1) (7) (6) Acquisition under capital-lease agreement - - (4) - ------------------------------------------------------------------------- 56 51 138 170 Purchases of property, plant and equipment included in accounts payable Beginning of period 14 11 13 14 End of period (20) (13) (20) (13) ------------------------------------------------------------------------- Total investing activities 50 49 131 171 ------------------------------------------------------------------------- -------------------------------------------------------------------------
SOURCE CASCADES INC.
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