In the first quarter of 2012, the pre-tax impact from foreign currency exchange was $7 million unfavorable compared to the first quarter of 2011 on a continuing operations basis.
Operating cash flow provided by continuing operations improved to about $20 million in the first quarter of 2012, driven primarily from lower year-over-year usage of working capital.
Capital spending from continuing operations was about $150 million in the first quarter of 2012 compared to $113 million in the first quarter of 2011. The year-over-year increase was primarily driven by the expansion of the company's Industrial packaging business in Brazil, as well as from the construction of a biomass boiler at the Covington facility. Total capital spending in 2012 is expected to range from $650 million to $700 million and will be comprised of major profitable growth and productivity investments, as well as ongoing maintenance and compliance. Capital spending in 2012 related to the expansion in Brazil is expected to be about $210 million. Capital spending in 2012 related to the construction of the biomass boiler at the Covington facility is expected to be about $165 million. Remaining capital spending in 2012 is expected to range from $275 million to $325 million.
The company's U.S. qualified retirement plans remain over funded and management does not anticipate any required regulatory funding contributions to such plans in the foreseeable future.The effective tax rate attributable to continuing operations including the effects of discrete tax items was approximately 36 percent in the first quarter of 2012. The mix and level of earnings between domestic and foreign operations contributed to the difference between the effective tax rate and statutory rates. The annual effective tax rate attributable to continuing operations in 2012 excluding the effects of discrete tax items is expected to be about 34 percent. MWV paid a regular quarterly dividend of $0.25 per share during the first quarter of 2012. On April 24, 2012, MWV declared a regular quarterly dividend of $0.25 per common share. The payment of the dividend will be made on June 1, 2012, to shareholders of record at the close of business on May 9, 2012.
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