Operating Profitability Driven by Focus on Highest Value Packaging Markets,
Overhead Cost Reductions and Improved Productivity
Operating Highlights:
Profit Growth in Consumer Solutions, Consumer & Office Products and Specialty Chemicals Segments
$46 Million of Cost Savings Achieved Year-to-Date; Company Expects to Exceed $125 Million Target
Shellpak® Growth Accelerating; Global Beverage and Home & Garden Businesses Achieving Market
Share Gains Strong $623 Million Cash Position
RICHMOND, VA (July 29, 2009)—MeadWestvaco Corporation (NYSE: MWV) reported positive second quarterearnings with year-over-year profit growth in the majority of the company’s business segments despite lower overall demand. The results reflect the company’s continued execution of its transformation strategies to deliver consistently higher returns for shareholders by participating in profitable packaging and other markets, reducing overhead costs and improving the overall operating productivity of its manufacturing facilities and supply chain.
The results also reflect the benefit from alternative fuel mixture credits reported in other income.
“Our deliberate strategic actions to generate higher returns for shareholders are working,” said John A. Luke, Jr., chairman and chief executive officer. “We are encouraged by the positive results we delivered during the second quarter in what remains a very difficult environment, and expect an even more significant impact from the intentional execution of our strategy when the economy improves.” Luke continued, “We are increasing the value we deliver to shareholders by making disciplined choices about our participation in key markets, and by strengthening our business model with permanent cost reductions and ongoing operating productivity. In conjunction with our priority emphasis on innovative solutions and growth in emerging markets, these efforts are helping us continue to deliver on our commitments – and shape the direction
of our company for the future.”
Quarterly Comparison
Second quarter 2009 net income was $125 million, or $0.72 per share, compared to $56 million, or $0.33 per share, in the second quarter of 2008. The results for the second quarter of 2009 include after-tax income of $112 million, or $0.65 per share, from excise tax credits earned under 2007 legislation enacted to provide a tax credit for companies that use alternative fuel mixtures to produce energy to operate their businesses. The results for the second quarter of 2009 also include after-tax restructuring charges of $25 million, or $0.15 per share, primarily related to employee separation costs and facility closures. The results for the second quarter of 2008 include after-tax restructuring charges of $6 million, or $0.03 per share, primarily related to employee separation costs and facility closures, and an after-tax gain of $9 million, or $0.05 per share, related to a sale of corporate real estate.