Catalyst Paper Corp. Debt

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Asset impairments drive 2011 loss, negative outlook leads to CCAA filing

RICHMOND, BC, Feb. 29, 2012 /PRNewswire/ - Catalyst Paper (TSX:CTL) posted a net loss of $974.0 million ($2.55 per common share) in 2011 due in large part to asset impairments on Canadian and Arizona-based operations. Other factors contributing to the loss were capital restructuring costs, a foreign exchange loss on the translation of U.S. dollar denominated debt and fire-related outages at the Snowflake and Powell River mills. The company's net loss in 2010 was $396.9 million ($1.04 per common share).

"We faced formidable economic and currency headwinds through 2011 made worse by the fourth-quarter drop-off in pulp prices and a weaker five-year paper and pulp industry forecast released in February 2012. These combined factors triggered the requirement to take a $660.2 million impairment charge on Canadian operations," said Catalyst President & CEO Kevin J. Clarke.

Sales in 2011 of $1,261.5 million were up over sales of $1,228.6 million in 2010 as pricing momentum helped mitigate the effect of the strong Canadian dollar. The company's net loss before specific items of $126.3 million ($0.33 per common share) widened in 2011 compared with a 2010 net loss before specific items of $87.0 million ($0.23 per common share).

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