Boise Inc. Reports Financial Results for Third Quarter 2012

Packaging segment EBITDA was $37.5 million for third quarter 2012, compared with $45.1 million for the same period last year. Compared with the prior year, the decrease resulted from higher annual maintenance outage costs and margin compression at our converting operations. This year, the majority of our annual maintenance outage work at our DeRidder mill fell in the second and third quarters, while in 2011, the majority occurred during the first quarter. Accordingly, third quarter 2012 annual maintenance outage costs at DeRidder were higher, compared with the prior-year quarter, but lower compared with second quarter 2012. Compared with second quarter 2012, Packaging segment EBITDA decreased $2.5 million, or 6%, due primarily to higher energy costs and some margin compression.

Paper Segment

Paper segment sales for third quarter 2012 were $370.0 million, a decrease of $20.7 million, or 5%, compared with third quarter 2011, due primarily to decreased net selling prices and volumes of market pulp. Net selling prices of uncoated freesheet decreased 3% but were offset partially by slight increases in volumes, compared with third quarter 2011. Paper segment sales increased $6.7 million, or 2%, compared with second quarter 2012, due to increased volumes of market pulp. Uncoated freesheet prices and volumes were essentially flat compared with second quarter 2012.

In third quarter 2012, we recognized $31.3 million of pretax costs primarily related to our plan to cease operations at our paper mill in St. Helens, Oregon, which we have recorded as a special item. Paper segment EBITDA, excluding the special item, was $58.6 million for third quarter 2012, essentially flat compared with third quarter 2011. Lower fiber costs were offset by the effect of weak market pulp sales. Paper segment EBITDA, excluding the special item, for third quarter 2012 increased $17.7 million from second quarter 2012 as a result of lower fiber costs and minimal annual outage costs in third quarter, offset slightly by higher chemical costs.

Other

General and administrative expenses were $19.2 million in third quarter 2012, an increase of $4.8 million, compared with $14.4 million in third quarter 2011, and down slightly from $20.0 million in second quarter 2012. The increase compared with the prior-year quarter is due primarily to Hexacomb, which was acquired in December 2011, as well as increased employee-related costs.