Media contact:
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Gordon R. Manuel
864-282-9448
Analyst contact:
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William G. Harvey
864-282-9413
FOR IMMEDIATE RELEASE
THURSDAY JULY 11, 2002
BOWATER REVISES GAINS ON TIMBERLAND SALES
GREENVILLE, SC - Bowater Incorporated (NYSE: BOW) announced today that as a
result of a mathematical error in a computer model used for calculating the gain
on the sale of timberlands, the company will reduce previously reported after
tax gains on two timberland sales, by $2.7 million, or $0.05 per diluted share,
for the fourth quarter of 2001, and by $2.1 million, or $0.04 per diluted share,
for the first quarter of 2002, representing approximately 5% of the total gain
on each transaction. These changes will result in a reduction of Bowater's
reported net income for the fourth quarter of 2001 and the first quarter of
2002. However, the net loss before asset sales and foreign currency exchange (as
set forth below) remains unchanged.
Q401 EARNINGS PER DILUTED Q102 EARNINGS PER DILUTED
SHARE SHARE
-------------------------------- -------------------------------
ORIGINAL REVISED CHANGE ORIGINAL REVISED CHANGE
REPORTED NET INCOME $ 0.33 $ 0.28 $ (0.05) REPORTED NET INCOME $ 0.22 $ 0.18 $ (0.04)
ASSET SALES (GAIN) (0.89) (0.84) (0.05) ASSET SALES (GAIN) (0.78) (0.74) (0.04)
CURRENCY EXCHANGE CURRENCY EXCHANGE
(GAIN) (0.07) (0.07) 0.00 (GAIN) (0.02) (0.02) 0.00
----------------------------- ----------------------------
NET LOSS BEFORE ASSET NET LOSS BEFORE ASSET
SALES AND EXCHANGE $(0.63) $(0.63) $ 0.00 SALES AND EXCHANGE $ (0.58) $ (0.58) $ 0.00
============================= ============================
The mathematical error, which has been reported to the audit committee
of the board of directors, involved the use of a monthly discount rate instead
of the appropriate quarterly or semi-annual discount rates in calculating the
timberland gains.
Bowater will file amendments to its 10-K for the year ended December
31, 2001 and 10-Q for the quarter ended March 31, 2002 to reflect the foregoing
reduction in reported income for these two fiscal periods.
Bowater Incorporated, headquartered in Greenville, SC, is a global
leader in newsprint. In addition, the company makes coated and uncoated
groundwood papers, bleached kraft pulp and lumber products. The company has 12
pulp and paper mills in the United States, Canada and South Korea and 13 North
American sawmills that produce softwood and hardwood lumber.
(more)
Bowater also operates two facilities that convert a groundwood base sheet to
coated products. Bowater's operations are supported by approximately 1.5 million
acres of timberlands owned or leased in the United States and Canada and 33
million acres of timber cutting rights in Canada. Bowater is one of the world's
largest consumers of recycled newspapers and magazines. Bowater common stock is
listed on the New York Stock Exchange, the Pacific Exchange and the London Stock
Exchange. A special class of stock exchangeable into Bowater common stock is
listed on the Toronto Stock Exchange (TSE:BWX).
All amounts are in U.S. dollars.
Statements in this news release that are not reported financial results
or other historical information are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. They include,
for example, statements about our business outlook, assessment of market
conditions, strategies, future plans, future sales, prices for our major
products, inventory levels, capital spending and tax rates. These
forward-looking statements are not guarantees of future performance. They are
based on management's expectations that involve a number of business risks and
uncertainties, any of which could cause actual results to differ materially from
those expressed in or implied by the forward-looking statements. The risks and
uncertainties relating to the forward-looking statements in this news release
include those described under the caption "Cautionary Statement Regarding
Forward-Looking Information" in Bowater's annual report on Form 10-K for the
year ended December 31, 2001 and, from time to time, in Bowater's other filings
with the Securities and Exchange Commission.
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