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| 8-K - FORM 8-K - NewPage Holdings Inc. | v377895_8k.htm |
NewPage Announces First Quarter 2014 Financial Results
MIAMISBURG, Ohio, May 9, 2014 /PRNewswire/ -- NewPage Holdings Inc. ("NewPage") today announced its results of operations for the first quarter of 2014.
Net sales in the first quarter of 2014 were $757 million compared to $756 million in the first quarter of 2013. Net sales were primarily affected by lower paper prices, reflecting lower industry demand, offset by higher sales volume of paper. Paper sales volume totaled 842,000 tons and 826,000 tons for the first quarter of 2014 and 2013. Average paper prices were $878 per ton and $887 per ton in the first quarter of 2014 and 2013.
For the first quarter of 2014, net loss was $71 million compared to a net loss of $11 million in the first quarter of 2013. The decrease was the result of charges associated with our debt refinancing of $34 million in February 2014 and higher input costs of $29 million driven by extreme weather-related factors, partially offset by lower non-cash stock compensation expense and other general and administrative expenses.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization as further adjusted as shown in the attached reconciliation) was $25 million in the first quarter of 2014 compared to $61 million in first quarter of 2013.
NewPage ended the first quarter with total liquidity of $272 million, consisting of $263 million of availability under the revolving credit facility and $9 million of available cash and cash equivalents.
Cash used for operating activities was $77 million during the first quarter of 2014 compared to $42 million during the first quarter of 2013. The increase on a year over year comparison is primarily the result of higher input costs, driven by weather-related factors, higher cash interest and other cash charges associated with the February 2014 debt refinancing, partially offset by a reduction in cash requirements for bankruptcy-related items. Capital expenditures for the first quarter of 2014 and 2013 were $14 million.
Additional Information
The NewPage first quarter ended March 31, 2014 Form 10-Q as filed with the U.S. Securities and Exchange Commission today can be found on the NewPage website. The company believes this information is sufficient to answer questions and no conference call is planned.
About NewPage
NewPage is a leading producer of printing and specialty papers in North America with $3.1 billion in net sales for the year ended December 31, 2013. NewPage is headquartered in Miamisburg, Ohio, and owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota and Wisconsin. These mills have a total annual production capacity of approximately 3.5 million tons of paper.
The company's portfolio of paper products includes coated, supercalendered and specialty papers. These papers are used in commercial printing to create corporate collateral, magazines, catalogs, books, coupons, inserts and direct mail as well as in specialty paper applications including beverage bottle labels, food and medical packaging, pressure-sensitive labels and release liners. To learn more, visit www.NewPageCorp.com.
Forward-Looking Statements
This press release may contain "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws. The company does not intend, and undertakes no obligation, to update any forward-looking statements.
NewPage Holdings Inc. and Subsidiaries | |||||
Consolidated Statements of Operations (unaudited) | |||||
Three Months Ended March 31, 2014 and 2013 | |||||
Dollars in millions, except per share amounts | |||||
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| 2014 |
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| 2013 |
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Net sales | $ | 757 |
| $ | 756 |
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Cost of sales |
| 755 |
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| 715 |
Selling, general and administrative expenses |
| 24 |
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| 41 |
Interest expense |
| 49 |
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| 11 |
Income (loss) before income taxes |
| (71) |
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| (11) |
Income tax (benefit) |
| — |
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| — |
Net income (loss) | $ | (71) |
| $ | (11) |
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Net income (loss) per share: |
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Basic and diluted | $ | (10.01) |
| $ | (1.50) |
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Weighted average common shares outstanding: |
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Basic and diluted |
| 7,089,485 |
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| 7,080,000 |
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Cash dividends paid per common share | $ | 34.35 |
| $ | — |
NewPage Holdings Inc. and Subsidiaries | ||||||
Condensed Consolidated Balance Sheets (unaudited) | ||||||
March 31, 2014 and December 31, 2013 | ||||||
Dollars in millions, except per share amounts | ||||||
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| 2014 |
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| 2013 |
ASSETS |
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Cash and cash equivalents |
| $ | 9 |
| $ | 83 |
Restricted cash |
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| 7 |
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| — |
Accounts receivable, net |
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| 230 |
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| 204 |
Inventories |
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| 541 |
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| 520 |
Other current assets |
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| 19 |
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| 25 |
Total current assets |
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| 806 |
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| 832 |
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Property, plant and equipment, net |
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| 1,177 |
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| 1,208 |
Other assets |
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| 142 |
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| 135 |
TOTAL ASSETS |
| $ | 2,125 |
| $ | 2,175 |
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LIABILITIES AND EQUITY |
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Accounts payable |
| $ | 184 |
| $ | 168 |
Other current liabilities |
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| 137 |
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| 177 |
Current maturities of long-term debt |
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| 35 |
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| — |
Total current liabilities |
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| 356 |
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| 345 |
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Long-term debt |
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| 750 |
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| 487 |
Other long-term obligations |
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| 299 |
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| 308 |
Commitments and contingencies |
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EQUITY |
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Preferred stock, 100,000 shares authorized, $0.001 per share par value |
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| — |
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| — |
Common stock, par value $0.001 (16,000,000 shares authorized with 7,104,079 |
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shares issued and 7,092,477 outstanding on March 31, 2014, and with |
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7,093,924 shares issued and 7,087,239 outstanding on December 31, 2013) |
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| — |
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| — |
Treasury stock, at cost (11,602 shares on March 31, 2014 and 6,685 shares on |
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December 31, 2013) |
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| (1) |
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| — |
Additional paid-in capital |
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| 572 |
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| 814 |
Accumulated deficit |
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| (73) |
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| (2) |
Accumulated other comprehensive income (loss) |
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| 222 |
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| 223 |
Total equity |
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| 720 |
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| 1,035 |
TOTAL LIABILITIES AND EQUITY |
| $ | 2,125 |
| $ | 2,175 |
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NewPage Holdings Inc. and Subsidiaries | ||||||
Condensed Consolidated Statements of Cash Flows (unaudited) | ||||||
Three Months Ended March 31, 2014 and 2013 | ||||||
Dollars in millions | ||||||
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| 2014 |
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| 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES |
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Net income (loss) |
| $ | (71) |
| $ | (11) |
Adjustments to reconcile net income (loss) to |
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net cash provided by (used for) operating activities: |
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Depreciation and amortization |
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| 46 |
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| 46 |
Non-cash interest expense |
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| 1 |
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| 2 |
Non-cash loss on extinguishment/modification of debt |
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| 23 |
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| — |
(Gain) loss on disposal of assets |
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| 1 |
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| — |
Pension expense (income) |
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| (3) |
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| 1 |
Pension funding |
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| (5) |
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| (4) |
Equity award expense (income) |
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| (3) |
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| 4 |
Deferred income taxes |
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| 1 |
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| — |
Changes in operating assets and liabilities: |
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Accounts receivable |
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| (26) |
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| (15) |
Inventories |
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| (21) |
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| (49) |
Other operating assets |
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| 6 |
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| 15 |
Accounts payable |
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| 16 |
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| (23) |
Accrued expenses and other obligations |
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| (42) |
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| (8) |
Net cash provided by (used for) operating activities |
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| (77) |
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| (42) |
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CASH FLOWS FROM INVESTING ACTIVITIES |
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Capital expenditures |
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| (14) |
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| (14) |
Proceeds from sales of assets |
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| 1 |
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| — |
Restricted cash |
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| (7) |
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| — |
Net cash provided by (used for) investing activities |
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| (20) |
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| (14) |
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Payment of financing costs |
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| (26) |
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| (1) |
Proceeds from issuance of long-term debt |
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| 735 |
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| — |
Repayments of long-term debt |
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| (495) |
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| (1) |
Common stock cash dividends paid |
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| (243) |
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| — |
Acquisition of treasury stock |
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| (1) |
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| — |
Borrowings on revolving credit facility |
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| 126 |
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| 38 |
Payments on revolving credit facility |
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| (73) |
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| (14) |
Net cash provided by (used for) financing activities |
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| 23 |
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| 22 |
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Net increase (decrease) in cash and cash equivalents |
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| (74) |
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| (34) |
Cash and cash equivalents at beginning of period |
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| 83 |
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| 43 |
Cash and cash equivalents at end of period |
| $ | 9 |
| $ | 9 |
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NewPage Holdings Inc. and Subsidiaries | ||||||||||||||
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA (unaudited) | ||||||||||||||
Dollars in millions | ||||||||||||||
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| 2013 |
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| 2014 |
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| 2014 | |
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Net income (loss) |
| $ | (11) |
| $ | (2) |
| $ | (71) |
| $ | (62) | ||
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| Interest expense |
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| 11 |
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| 47 |
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| 49 |
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| 85 | |
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| Income tax (benefit) |
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| — |
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| (2) |
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| — |
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| (2) | |
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| Depreciation and amortization |
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| 46 |
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| 184 |
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| 46 |
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| 184 | |
EBITDA |
| $ | 46 |
| $ | 227 |
| $ | 24 |
| $ | 205 | ||
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| Equity awards |
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| 4 |
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| 14 |
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| (3) |
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| 7 | |
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| (Gain) loss on disposal of assets |
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| — |
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| 2 |
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| 1 |
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| 3 | |
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| Integration and related severance costs and other charges |
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| 6 |
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| 14 |
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| — |
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| 8 | |
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| Post-emergence bankruptcy-related items |
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| 3 |
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| 4 |
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| — |
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| 1 | |
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| Merger related costs |
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| 2 |
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| 8 |
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| 2 |
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| 8 | |
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| Other |
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| — |
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| — |
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| 1 |
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| 1 | |
Adjusted EBITDA(1) |
| $ | 61 |
| $ | 269 |
| $ | 25 |
| $ | 233 | ||
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| Pro forma effects of project cost savings program(2) |
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| 73 | |
Adjusted EBITDA (including pro forma effects of |
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cost savings program) |
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| $ | 306 | ||
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(1) | Does not include pro forma effects of our project cost savings program used in certain covenants under our credit facilities. | |||||||||||||
(2) | Represents cost savings expected to be realized as part of our project cost savings program. |
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EBITDA is defined as net income (loss) before interest expense, income taxes, depreciation and amortization. EBITDA and Adjusted EBITDA (as described in the table above) are not measures of our performance under accounting principles generally accepted in the United States ("U.S. GAAP"), are not intended to represent net income (loss), and should not be used as alternatives to net income (loss) as indicators of performance. EBITDA and Adjusted EBITDA are shown because they are bases upon which our management assesses performance and are primary components of certain covenants under our credit facilities. In addition, our management believes EBITDA and Adjusted EBITDA are useful to investors because they and similar measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies. The use of EBITDA and Adjusted EBITDA instead of net income (loss) has limitations as an analytical tool, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. Our measures of EBITDA and Adjusted EBITDA are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation.
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CONTACT: Amber Best, 937-242-9093, Investor Contact: Barbara Telek, 937-242-9629