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Rock-Tenn Company's CEO Discusses F4Q 2011 Results - Earnings Call Transcript

Our credit agreement EBITDA for the quarter was $345 million, bringing trailing 12-month EBITDA to $1.35 billion. Our free cash flow for the quarter of $30 million reflected several reductions that we believe are not represented of future fee cash flow generation. First, we paid out $39 million in remaining acquisition fees and expenses and some severance and retention payments related to legacy Smurfit-Stone employees. We reduced accounts payable by $23 million, as we moved to take cash discounts on purchases related to legacy Smurfit operations, and we increased working capital by about $40 million to support higher sales and to build containerboard inventory levels to levels that we believe will allow our box plant system to operate most efficiently and at the lowest net cost. These items, all of which, we had anticipated at the outside of the quarter used the total of about $102 million of our cash flow from operations.

I'll turn to our segment performance. Our full quarter Corrugated segment EBITDA of $254 million represented an EBITDA margin of 15.6%. This was down from last quarter's 16.9% and June 15.2% as the effective higher commodity input costs that I have referred to more than offset higher average pricing. Our mills ran at 99% of capacity in the quarter as we took no economic or major maintenance downtime. Although export markets and pricing began to weaken in October, export demand was strong through the end of the quarter. Our box plant shipments were down modestly in the quarter as we're exiting some low-cost contractual box business as we continue to rationalize our sales and our approach to the market.

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