1393066--3/31/2010--AbitibiBowater

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Risks Relating to Our Creditor Protection Proceedings AbitibiBowater Inc., and many of its direct and indirect subsidiaries, are currently subject to Creditor Protection Proceedings and additional subsidiaries could become subject to similar proceedings. Our business, operations and financial position are subject to the risks and uncertainties associated with such proceedings. The Creditor Protection Proceedings raise substantial doubt about our ability to continue as a going concern. We must restructure and transform our business and the assumptions underlying these efforts may prove to be inaccurate. We may not be able to successfully develop, obtain all requisite approvals for or implement a comprehensive restructuring plan. Failure to obtain the requisite approvals for, or failure to successfully develop and implement our comprehensive restructuring plan within the time granted by the Courts would, in all likelihood, lead to the liquidation of all of our assets. A plan or plans of reorganization could result in holders of our liabilities and/or securities receiving no distribution. The terms of our current and any future financing arrangements may severely limit our ability to plan for or respond to changes in our business. Our common stock and the exchangeable shares of AbitibiBowater Canada Inc. are no longer traded on a national securities exchange and as a result, it is more difficult for shareholders to sell our common stock or the exchangeable shares of AbitibiBowater Canada Inc. and to obtain accurate quotations of the price of these securities. During the pendency of the Creditor Protection Proceedings, our financial results may be volatile and may not reflect historical trends. Our liquidity position imposes significant risks to our operations. Risks Related to Our Business Developments in alternative media could continue to adversely affect the demand for our products, especially in North America, and our responses to these developments may not be successful. Bankruptcy of a significant customer could have a material adverse effect on our liquidity, financial position and results of operations. Currency fluctuations may adversely affect our results of operations and financial condition, and changes in foreign currency exchange rates can affect our competitive position, selling prices and manufacturing costs. We may not be successful in our strategy of increasing our share of coated and specialty papers and competing in growth markets with higher returns. We face intense competition in the forest products industry and the failure to compete effectively would have a material adverse effect on our business, financial condition or results of operations. The forest products industry is highly cyclical. Fluctuations in the prices of, and the demand for, our products could result in small or negative profit margins, lower sales volumes and curtailment or closure of operations. Our manufacturing businesses may have difficulty obtaining wood fiber at favorable prices, or at all. An increase in the cost of our purchased energy, chemicals and other raw materials would lead to higher manufacturing costs, thereby reducing our margins. We could experience disruptions in operations or increased labor costs due to labor disputes. Our operations require substantial capital and we may not have adequate capital resources to provide for all of our capital requirements. Changes in laws and regulations could adversely affect our results of operations. Changes in the political or economic conditions in Canada, the United States or other countries in which our products are manufactured or sold could adversely affect our results of operations. We may be required to record additional environmental liabilities. We are subject to physical and financial risks associated with climate change. We may be required to record additional long-lived asset impairment charges. We have net liabilities with respect to our pension plans and the actual cost of our pension plan obligations could exceed current provisions. We may not be compensated for the expropriation of certain assets by the Government of Newfoundland and Labrador. We could be compelled to remediate certain sites we formerly owned and/or operated in the province of Newfoundland and Labrador. The continued decline in the global economy and the Creditor Protection Proceedings may significantly inhibit our ability to sell assets.

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1393066--3/31/2010--AbitibiBowater_Inc.