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As a reminder, all statements made during the call that are not based on historical facts are forward-looking statements, subject to a number of risks and uncertainties, many of which are outside of our control. I invite you to review Domtar's filings with the Securities Commissions for a listing of those.Finally, certain non-U.S. GAAP financial measures will be presented and discussed, and you can find the reconciliation to the closest GAAP measures in the appendix of this morning's release, as well as on our website. So with that, I'll turn it over to John. John D. Williams Thank you, Nick. Good morning, everyone. This morning, Domtar once again reported good results, driven by lower maintenance-related costs and higher paper prices. EBITDA before items was $286 million, an increase of 10% versus quarter 2. Year-to-date, EBITDA before items is closing in on $900 million, and we're tracking well versus our record 2010 results. EBITDA margins in the Pulp and Paper segment was solid and remained above the 20% range despite high commodity prices that put some pressure on our input costs. North American uncoated freesheet market have been softer when compared to 2010. As our domestic commodity uncoated paper shipments trend in line with the market, we continue to offset these declines with an enhanced product mix and export. In Specialty Papers, our sales are growing, reflecting our strong customer relationships and collaborative efforts to bring new products to market. Year-to-date, sales in specialty products grew 2% versus last year, led by strong growth in food packaging and other grades. In Pulp, the current down cycle in global markets led to further downward price adjustments. Our prices into quarter $30 per metric ton below the second quarter average, and further declines are expected throughout the fourth quarter. On liquidity and capital, our solid financial performance continued to translate into strong cash flow, generating $226 million in the quarter. And we've put this cash to work, notably with our share repurchase program, buying back over 2.5 million shares.
Finally, our integration of Attends is progressing well and on target. The Attends acquisition is a small but important step in developing revenue in growing markets. Before turning to Daniel, let me summarize by saying that we're pleased by our continuing progress and have confidence that we can successfully execute on our strategic roadmap. Our capital structure's in good shape, and we're well-positioned to pursue opportunities to make good financial and strategic sense. With these brief remarks, I'll turn the call over to Daniel for the financial review, and I'll come back with the outlook. Daniel?Daniel Buron Thank you, John, and good morning, everyone. Let's start by going over the financial highlights of the quarter on Slide 4. This morning, we reported net earnings of $2.95 per share for the third quarter, compared to net earning of $1.30 per share in the second quarter. Adjusting for items, we had earnings of $3.10 per share for the third quarter compared to $2.37 per share in the second quarter. EBITDA before items amounted $286 million compared to $260 million in the previous quarter. Cash flows provided from operating activities amounted to $257 million. Capital expenditure were $31 million, therefore, free cash flow totaled $226 million. Turning to the earning reconciliation on Slide 5. Our third quarter earnings include the following aftertax items: it started with $4 million related to the impairment and write-down of property, plant and equipment; premium paid on debt repurchase of $3 million; closure and restructuring costs of $1 million; the negative impact of purchase accounting related to the Attends transaction of $1 million; and gain on sales of assets of $3 million. Therefore, excluding these items, we had earnings of $123 million or $2.10 per share. Turning to the sequential variation in earning on Slide 6. Sales were $14 million higher than the second quarter, mostly due to the inclusion of one month of our new Personal Care segment. SG&A decreased by $13 million, mostly due to the impact of the reduction of our stock in the quarter on the mark-to-market of some stock-based compensation, and shares expense was up $25 million or $4 million higher than the last quarter, due to premium paid on debt repurchase in the quarter. We recorded a tax provision of $45 million or 28% in the quarter. This compare to the tax rate of 29% on a year-to-date basis. Read the rest of this transcript for free on seekingalpha.com