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Packaging Corp. of America Reports Operating Results (10-Q)

November 03, 2010 | About:
10qk

10qk

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Packaging Corp. of America (PKG) filed Quarterly Report for the period ended 2010-09-30.

Packaging Corp. Of America has a market cap of $2.56 billion; its shares were traded at around $24.98 with a P/E ratio of 19.6 and P/S ratio of 1.2. The dividend yield of Packaging Corp. Of America stocks is 2.5%. Packaging Corp. Of America had an annual average earning growth of 2.1% over the past 10 years.PKG is in the portfolios of NWQ Managers of NWQ Investment Management Co, Jean-Marie Eveillard of First Eagle Investment Management, LLC, Pioneer Investments, Steven Cohen of SAC Capital Advisors, Paul Tudor Jones of The Tudor Group, Jim Simons of Renaissance Technologies LLC, Bruce Kovner of Caxton Associates, George Soros of Soros Fund Management LLC.
This is the annual revenues and earnings per share of PKG over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of PKG.


Highlight of Business Operations:

Excluding the impact of the tax credits described above and asset disposal charges relating to our major energy projects at our linerboard mills and facility closure costs, we earned net income of $61.7 million ($0.60 per diluted share) in the third quarter of 2010 compared with $25.3 million ($0.25 per diluted share) in the third quarter of 2009 and $113.3 million ($1.10 per diluted share) for the first nine months of 2010 compared with $79.7 million ($0.78 per diluted share) for the comparable period in 2009. We exclude those special items in presenting these measures and assessing our operating performance. Management uses these measures to focus on PCA’s on-going operations and assess its own performance and believes that it is useful to investors because it enables them to perform meaningful comparisons of past and present operating results. Reconciliations to the most comparable measure reported in accordance with GAAP are included elsewhere in this section under “Reconciliations of Non-GAAP Financial Measures to Reported Amounts.”

Income from operations decreased by $108.7 million, or 112.8%, for the three months ended September 30, 2010 compared to the three months ended September 30, 2009. As noted in Note 15 to the condensed consolidated financial statements, PCA received the cellulosic biofuel producer registration in September 2010. As a result, income from operations was reduced primarily due to reversing a portion of our 2009 alternative fuel mixture credits out of income from operations ($111.9 million) in order to claim cellulosic biofuel producer credits which were recorded in the provision for income taxes ($145.8 million) in the third quarter of 2010. In addition, income from operations for the third quarter of 2009 included alternative fuel mixture credits ($47.1 million). Excluding the impact of tax credits and 2010 charges for a corrugated products plant closing and major energy project related asset disposals ($2.8 million in the aggregate), income from operations increased $53.1 million compared to third quarter 2009. Such increase primarily resulted from increased sales prices ($61.3 million) and volume ($10.9 million), partially offset by higher costs for recycled fiber ($4.9 million), wood fiber ($3.8 million), transportation ($3.6 million), labor and fringe benefits ($2.8 million), and other items which were individually insignificant.

Income from operations decreased by $192.6 million, or 68.4%, for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009. As noted in Note 15 to the condensed consolidated financial statements, PCA received the cellulosic biofuel producer registration in September 2010. As a result, income from operations was reduced primarily due to reversing a portion of our 2009 alternative fuel mixture credits out of income from operations ($111.9 million) in order to claim cellulosic biofuel producer credits which were recorded in the provision for income taxes ($145.8 million) in the third quarter of 2010. In addition, income from operations for the nine months ended September 30 included alternative fuel mixture credits in the amounts of $126.8 million in 2009 and $9.2 million in 2010. Excluding the impact of tax credits, energy project related asset disposals ($5.0 million in 2010) and 2010 charges for two plant closings ($3.4 million), income from operations increased $45.3 million for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009. The increase in income from operations was primarily attributable to increased sales volume ($50.6 million), sales prices ($37.6 million) and lower average energy costs ($9.8 million) partially offset by

Net cash provided by operating activities for the nine months ended September 30, 2010 was $211.0 million compared to $209.3 million for the nine months ended September 30, 2009, an increase of $1.7 million, or 0.8%. Net income, excluding the income from the tax credits (described in Note 15 to the financial statements included in this report) of $42.7 million in 2010 and $127.5 million in 2009, was $107.9 million and $79.7 million, respectively, for the first nine months of 2010 and 2009, an increase of $28.2 million that increased net cash provided by operating activities. Additionally, more alternative fuel mixture and cellulosic biofuel producer tax credits ($34.3 million) were used to reduce federal tax payments during the first nine months of 2010 compared to

Net cash used for investing activities for the nine months ended September 30, 2010 increased $158.0 million, or 214.6%, to $231.7 million, compared to the nine months ended September 30, 2009. The increase was primarily related to higher additions to property, plant and equipment of $162.3 million, which included $135.0 million for the major energy optimization projects at our linerboard mills, during the nine months ended September 30, 2010 compared to the same period in 2009. Partially offsetting this increase was a $3.1 million acquisition completed during the third quarter of 2009.

Net cash used for financing activities totaled $67.3 million for the nine months ended September 30, 2010, a difference of $6.5 million, or 10.7%, compared to the same period in 2009. The difference was primarily attributable to repurchases of PCA common stock of $24.8 million during the nine months of 2010, partially offset by lower common stock dividends paid of $15.1 million and higher proceeds from the exercise of stock options of $2.6 million during the first nine months of 2010 compared to the same period in 2009.

Read the The complete Report

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