Domtar Corporation Reports Preliminary Second Quarter 2020 Financial Results and Announces Strategic Initiatives

(All financial information is in U.S. dollars, and all earnings per share results are diluted, unless otherwise noted).

  • Second quarter 2020 net earnings of $0.34 per share; earnings before items1 of $0.36 per share
  • Announces significant cost savings program with expected annual savings of $200 million
  • Execution of asset repurposing plan with conversion of Kingsport, TN and Ashdown, AR
  • Commences review of strategic alternatives for Personal Care Division

FORT MILL, S.C.–(BUSINESS WIRE)–Aug. 7, 2020– Domtar Corporation (NYSE: UFS) (TSX: UFS) today reported net earnings of $19 million ($0.34 per share) for the second quarter of 2020 compared to net earnings of $5 million ($0.09 per share) for the first quarter of 2020 and net earnings of $18 million ($0.28 per share) for the second quarter of 2019. Sales for the second quarter of 2020 were $1.0 billion.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20200807005175/en/

Excluding items listed below, the Company had earnings before items1 of $20 million ($0.36 per share) for the second quarter of 2020 compared to earnings before items1 of $5 million ($0.09 per share) for the first quarter of 2020 and earnings before items1 of $36 million ($0.57 per share) for the second quarter of 2019.

ITEMS

Description

 

Segment

 

Line item

 

Amount

 

After tax

effect

 

EPS impact

(per share)

 

 

 

 

 

 

(in millions)

 

 

Second quarter 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • Closure and restructuring costs
 

Pulp and Paper

 

Closure and
restructuring costs

 

$1

 

$1

 

$0.02

 

 

 

 

 

 

 

 

 

 

 

First quarter 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • None
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Second quarter 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • Margin improvement plan
 

Personal Care

 

Impairment of
long-lived assets

 

$15

 

$12

 

$0.19

 

 

 

 

 

 

 

 

 

 

 

  • Margin improvement plan
 

Personal Care

 

Closure and
restructuring costs

 

$8

 

$6

 

$0.10

 

 

 

 

 

 

 

 

 

 

 

_________________________

1 Non-GAAP financial measure. Refer to the Reconciliation of Non-GAAP Financial Measures in the appendix.

QUARTERLY REVIEW

“We have been proactive in reducing risk and safeguarding our ability to weather the current crisis. We are taking the appropriate steps to optimize our operations and to remain an agile, reliable partner to our customers,” said John D. Williams, President and Chief Executive Officer. “Despite the significant challenges we faced in Pulp and Paper markets, we have been able to manage costs while initiating cash and cost conservation initiatives across the network.”

Mr. Williams added, “In Personal Care, second quarter revenues were lower following a record first quarter, which was driven partly by consumer pantry loading. While revenues were lower than prior quarter, good cost control and improved operational efficiencies supported a solid EBITDA performance. The second quarter ended with an EBITDA margin of 14.4%, which was a 160 basis point improvement when compared to the first quarter and the highest divisional margin since the fourth quarter of 2015.”

Operating income was $14 million in the second quarter of 2020 compared to operating income of $19 million in the first quarter of 2020. Depreciation and amortization totaled $71 million in the second quarter of 2020.

Operating income before items1 was $15 million in the second quarter of 2020 compared to operating income before items1 of $19 million in the first quarter of 2020.

 

 

 

 

 

 

 

 

 

 

(In millions of dollars)

 

2Q 2020

 

 

1Q 2020

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

1,012

 

 

$

1,278

 

 

Operating income (loss)

 

 

 

 

 

 

 

 

 

Pulp and Paper segment

 

 

3

 

 

 

4

 

 

Personal Care segment

 

 

18

 

 

 

20

 

 

Corporate

 

 

(7

)

 

 

(5

)

 

Total operating income

 

 

14

 

 

 

19

 

 

Operating income before items1

 

 

15

 

 

 

19

 

 

Depreciation and amortization

 

 

71

 

 

 

72

 

 

The decrease in operating income in the second quarter of 2020 was the result of lower volume and unfavorable productivity. These factors were partially offset by lower maintenance costs and lower salaries and wages, mostly due to wage subsidies, lower selling, general and administrative expenses, lower raw material costs, favorable exchange rates and lower fixed and other costs.

When compared to the first quarter of 2020, manufactured paper shipments were down 32% and pulp shipments increased 10%. The shipment-to-production ratio for paper was 105% in the second and the first quarters of 2020. Paper inventories decreased by 22,000 tons, and pulp inventories decreased by 2,000 metric tons when compared to the first quarter of 2020.

_________________________

1 Non-GAAP financial measure. Refer to the Reconciliation of Non-GAAP Financial Measures in the appendix.

LIQUIDITY AND CAPITAL RESOURCES

Cash flow from operating activities amounted to $67 million and capital expenditures were $40 million, resulting in free cash flow1 of $27 million for the second quarter of 2020. Domtar’s net debt-to-total capitalization ratio1 stood at 30% at June 30, 2020 and at March 31, 2020. At June 30, 2020, we had total liquidity of approximately $906 million ($124 million of cash on hand, $782 million in available credit facilities) with no near-term debt maturities.

OUTLOOK

We expect the overall environment to continue to be challenging. In Paper, we expect demand to remain weak, with some incremental recovery expected in quarter three and towards year-end. We expect near-term pulp markets to be impacted by seasonal softness, elevated global inventories, and weak demand trends from paper markets. Personal Care will continue to benefit from productivity gains and the impact from new customer wins. Overall raw material costs are expected to remain stable.

STRATEGIC INITIATIVES

COST REDUCTION PROGRAM

The Company is implementing a cost reduction program, targeting $200 million in annual run-rate cost savings to be realized by the end of 2021. The goal of the program is to build a stronger business operation, enhance the Company’s cost efficiency, and improve operating margins and maximize productivity and cash flow. The cost saving initiatives include capacity reduction and asset closures, mill-level cost savings and rightsizing support functions. The leaner organizational structure is also expected to improve communication flow and cross-functional collaboration, leveraging more efficient business processes.

As part of the cost savings program, the Company will permanently close the uncoated freesheet manufacturing at the Kingsport, Tennessee and Port Huron, Michigan mills, the remaining paper machine at the Ashdown, Arkansas mill and the converting center in Ridgefields, Tennessee. These actions will reduce the Company’s annual uncoated freesheet paper capacity by approximately 721,000 short tons, and will result in a workforce reduction of approximately 780 employees. The Kingsport and Ashdown paper machines, which have been idled since April 2020, will not recommence operations. The Port Huron and Ridgefields mills are expected to shut down by the end of the first quarter of 2021.

_________________________

1Non-GAAP financial measure. Refer to the Reconciliation of Non-GAAP Financial Measures in the appendix.

“We remain disciplined in our efforts to manage our costs to improve profitability and further strengthen our balance sheet. In line with these goals and current market conditions, we are implementing a significant cost savings program to streamline operations, maximize productivity and improve margins. This program will create a stronger, leaner organization aligned to meet the needs of the business and our customers in a post COVID-19 era,” said Mr. Williams. “This important and necessary step is expected to reduce our annualized costs by more than $200 million, while significantly improving our free cash flow and return on invested capital. We have a talented and dedicated workforce at Domtar, and decisions that affect people are never easy. However, we are taking the necessary steps to better position our business for the future.”

EXECUTION OF THE ASSET CONVERSION ROADMAP

Domtar’s decision to repurpose assets at Kingsport, Tennessee and Ashdown, Arkansas follows a disciplined and measured review of the Company’s manufacturing footprint. This conversion program is consistent with the roadmap that Domtar made public in 2018. The previously announced multi-mill conversion roadmap is designed to increase shareholder value as we adjust our paper capacity to align with our customer demand. Through this process, we have identified up to four large scale paper machine/mill repurposing projects that have the ability to produce 2.5 million tons of containerboard and/or 570,000 ADMT of additional market softwood and fluff pulp.

Entering the recycled linerboard market at Kingsport, Tennessee 

The Company plans to enter the linerboard market with the conversion of the Kingsport paper machine. Once in full operation, the mill will produce and market approximately 600,000 tons annually of high-quality recycled linerboard and medium, providing the Company with a strategic footprint in a growing adjacent market. The conversion is expected to be completed by the first quarter of 2023.

Domtar estimates the conversion cost to be between $300 and $350 million. Once fully operational, the mill is expected to be a very low-cost, first quartile recycled linerboard mill in North America. The converted mill is expected to directly employ approximately 160 employees.

“Repurposing the Kingsport mill provides Domtar with the best strategic entry point into a growing market with a very competitive, low-cost asset and represents a first step to building a large and cost-competitive business,” said Mr. Williams. “Kingsport is well positioned to be the go-to supplier to independent converters for quality, service and innovation as the mill is less than a day’s drive from over 60 customers representing an addressable 3.9 million tons of annual containerboard demand.”

Completing the conversion to softwood and fluff pulp at Ashdown, Arkansas

The Company will complete the conversion of the Ashdown mill to 100% softwood and fluff pulp, which will require $15 to $20 million of capital investments and will take 12 to 14 months to implement. The mill will produce additional market hardwood pulp until it converts the fiberline to softwood pulp. The conversion of the fiberline to 100% softwood is also necessary for an eventual expansion into containerboard. Following the fiberline conversion, Ashdown will be a world-class market pulp mill with annual production capactiy of 775,000 tons of fluff and softwood pulp.

With these two conversions, Domtar continues to deliver on its strategic roadmap to make value creating investments in its world-class facilities, and to this end, provides a bright future for the Kingsport and Ashdown mills.

REVIEW OF STRATEGIC ALTERNATIVES FOR PERSONAL CARE DIVISION

The Company has commenced a strategic review process to explore a range of value-creating alternatives for its Personal Care division, which may include a sale of the business. The strategic review process will be conducted with the assistance of Domtar’s independent financial and legal advisors and will consider a full range of potential alternatives with respect to the Company’s Personal Care division.

“Over the past year, we have significantly improved the operating structure and cost profile of our Personal Care division due in large part to the hard work and perseverance of our teams. In addition, the scale-up of new customer and sales pipeline gives us confidence in the long-term prospects for the business.” Mr. Williams said. “With this positive momentum, we believe now is the right time to initiate a strategic review.”

The Company has not set a deadline for the conclusion of its review of strategic alternatives, and does not intend to comment further unless and until the Board of Directors has approved a specific course of action or the Company has otherwise determined that further disclosure is appropriate or necessary.

EARNINGS CONFERENCE CALL

The Company will hold a conference call today at 10:00 a.m. (ET) to discuss its second quarter 2020 financial results. Financial analysts are invited to participate in the call by dialing 1 (800) 367-2403 at least 10 minutes before start time, while media and other interested individuals are invited to listen to the live webcast on the Domtar Corporation website at www.domtar.com.

The Company will release its third quarter 2020 earnings results on October 29, 2020 before markets open, followed by a conference call at 10:00 a.m. (ET) to discuss results. The date is tentative and will be confirmed approximately three weeks prior to the official earnings release date.

About Domtar 

Domtar is a leading provider of a wide variety of fiber-based products including communication, specialty and packaging papers, market pulp and absorbent hygiene products. With approximately 9,200 employees serving more than 50 countries around the world, Domtar is driven by a commitment to turn sustainable wood fiber into useful products that people rely on every day. Domtar’s annual sales are approximately $5.2 billion, and its common stock is traded on the New York and Toronto Stock Exchanges. Domtar’s principal executive office is in Fort Mill, South Carolina. To learn more, visit www.domtar.com.

Forward-Looking Statements

Statements in this release about our plans, expectations and future performance, including the statements by Mr. Williams, those contained under “Outlook” and under “Strategic Initiatives,” are “forward-looking statements.” Actual results may differ materially from those suggested by these statements for a number of reasons, including the COVID-19 pandemic and the resulting decrease in paper sales and the challenges we face in maintaining manufacturing operations, changes in customer demand and pricing, changes in manufacturing costs, future acquisitions and divestitures, including facility closings, the failure to achieve our cost containment goals, costs of conversion in excess of our expectations, demand for linerboard, and the other reasons identified under “Risk Factors” in our Form 10-K for 2019 as filed with the SEC and as updated by subsequently filed Form 10-Qs. Except to the extent required by law, we expressly disclaim any obligation to update or revise these forward-looking statements to reflect new events or circumstances or otherwise.

Domtar Corporation

Highlights

(In millions of dollars, unless otherwise noted)

             

 

 

For the three months ended

 

 

For the six months ended

 

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Unaudited)

 

 

 

$

 

 

$

 

 

$

 

 

$

 

Selected Segment Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pulp and Paper

 

 

802

 

 

 

1,106

 

 

 

1,833

 

 

 

2,263

 

Personal Care

 

 

229

 

 

 

228

 

 

 

495

 

 

 

467

 

Total for reportable segments

 

 

1,031

 

 

 

1,334

 

 

 

2,328

 

 

 

2,730

 

Intersegment sales

 

 

(19

)

 

 

(17

)

 

 

(38

)

 

 

(37

)

Consolidated sales

 

 

1,012

 

 

 

1,317

 

 

 

2,290

 

 

 

2,693

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pulp and Paper

 

 

56

 

 

 

59

 

 

 

114

 

 

 

117

 

Personal Care

 

 

15

 

 

 

15

 

 

 

29

 

 

 

30

 

Total for reportable segments

 

 

71

 

 

 

74

 

 

 

143

 

 

 

147

 

Impairment of long-lived assets – Personal Care

 

 

 

 

 

15

 

 

 

 

 

 

25

 

Consolidated depreciation and amortization and

impairment of long-lived assets

 

 

71

 

 

 

89

 

 

 

143

 

 

 

172

 

Operating income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pulp and Paper

 

 

3

 

 

 

62

 

 

 

7

 

 

 

206

 

Personal Care

 

 

18

 

 

 

(18

)

 

 

38

 

 

 

(26

)

Corporate

 

 

(7

)

 

 

(10

)

 

 

(12

)

 

 

(31

)

Consolidated operating income

 

 

14

 

 

 

34

 

 

 

33

 

 

 

149

 

Interest expense, net

 

 

15

 

 

 

13

 

 

 

29

 

 

 

26

 

Non-service components of net periodic benefit cost

 

 

(5

)

 

 

(2

)

 

 

(9

)

 

 

(5

)

Earnings before income taxes and equity loss

 

 

4

 

 

 

23

 

 

 

13

 

 

 

128

 

Income tax (benefit) expense

 

 

(15

)

 

 

5

 

 

 

(12

)

 

 

29

 

Equity loss, net of taxes

 

 

 

 

 

 

 

 

1

 

 

 

1

 

Net earnings

 

 

19

 

 

 

18

 

 

 

24

 

 

 

98

 

Per common share (in dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

0.34

 

 

 

0.29

 

 

 

0.43

 

 

 

1.56

 

Diluted

 

 

0.34

 

 

 

0.28

 

 

 

0.43

 

 

 

1.55

 

Weighted average number of common

shares outstanding (millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

55.2

 

 

 

63.0

 

 

 

55.6

 

 

 

63.0

 

Diluted

 

 

55.3

 

 

 

63.3

 

 

 

55.7

 

 

 

63.3

 

Cash flows from operating activities

 

 

67

 

 

 

119

 

 

 

155

 

 

 

174

 

Additions to property, plant and equipment

 

 

40

 

 

 

55

 

 

 

102

 

 

 

101

 

As a result of changes in our organization structure, we have changed our segment reporting. Starting January 1, 2020, our materials business EAM Corporation, (“EAM”), a manufacturer of high quality airlaid and ultrathin laminated cores, previously reported under our Personal Care segment is now presented under our Pulp and Paper segment. Prior period segment results have been restated to the new segment presentation with no significant impact on segment results. There were no changes to our consolidated sales or operating income.

Domtar Corporation

Consolidated Statements of Earnings

(In millions of dollars, unless otherwise noted)

             

 

 

For the three months ended

 

 

For the six months ended

 

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Unaudited)

 

 

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

 

1,012

 

 

 

1,317

 

 

 

2,290

 

 

 

2,693

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales, excluding depreciation and amortization

 

 

837

 

 

 

1,079

 

 

 

1,920

 

 

 

2,131

 

Depreciation and amortization

 

 

71

 

 

 

74

 

 

 

143

 

 

 

147

 

Selling, general and administrative

 

 

93

 

 

 

105

 

 

 

195

 

 

 

228

 

Impairment of long-lived assets

 

 

 

 

 

15

 

 

 

 

 

 

25

 

Closure and restructuring costs

 

 

1

 

 

 

8

 

 

 

1

 

 

 

12

 

Other operating (income) loss, net

 

 

(4

)

 

 

2

 

 

 

(2

)

 

 

1

 

 

 

 

998

 

 

 

1,283

 

 

 

2,257

 

 

 

2,544

 

Operating income

 

 

14

 

 

 

34

 

 

 

33

 

 

 

149

 

Interest expense, net

 

 

15

 

 

 

13

 

 

 

29

 

 

 

26

 

Non-service components of net periodic benefit cost

 

 

(5

)

 

 

(2

)

 

 

(9

)

 

 

(5

)

Earnings before income taxes and equity loss

 

 

4

 

 

 

23

 

 

 

13

 

 

 

128

 

Income tax (benefit) expense

 

 

(15

)

 

 

5

 

 

 

(12

)

 

 

29

 

Equity loss, net of taxes

 

 

 

 

 

 

 

 

1

 

 

 

1

 

Net earnings

 

 

19

 

 

 

18

 

 

 

24

 

 

 

98

 

Per common share (in dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

0.34

 

 

 

0.29

 

 

 

0.43

 

 

 

1.56

 

Diluted

 

 

0.34

 

 

 

0.28

 

 

 

0.43

 

 

 

1.55

 

Weighted average number of common

shares outstanding (millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

55.2

 

 

 

63.0

 

 

 

55.6

 

 

 

63.0

 

Diluted

 

 

55.3

 

 

 

63.3

 

 

 

55.7

 

 

 

63.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domtar Corporation

Consolidated Balance Sheets at

(In millions of dollars)

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

(Unaudited)

 

 

 

$

 

 

$

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

124

 

 

 

61

 

Receivables, less allowances of $11 and $6

 

 

535

 

 

 

577

 

Inventories

 

 

767

 

 

 

786

 

Prepaid expenses

 

 

36

 

 

 

33

 

Income and other taxes receivable

 

 

34

 

 

 

61

 

Total current assets

 

 

1,496

 

 

 

1,518

 

Property, plant and equipment, net

 

 

2,509

 

 

 

2,567

 

Operating lease right-of-use assets

 

 

74

 

 

 

81

 

Intangible assets, net

 

 

564

 

 

 

573

 

Other assets

 

 

162

 

 

 

164

 

Total assets

 

 

4,805

 

 

 

4,903

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Bank indebtedness

 

 

 

 

 

9

 

Trade and other payables

 

 

565

 

 

 

705

 

Income and other taxes payable

 

 

33

 

 

 

23

 

Operating lease liabilities due within one year

 

 

28

 

 

 

28

 

Long-term debt due within one year

 

 

13

 

 

 

1

 

Total current liabilities

 

 

639

 

 

 

766

 

Long-term debt

 

 

1,089

 

 

 

938

 

Operating lease liabilities

 

 

62

 

 

 

69

 

Deferred income taxes and other

 

 

461

 

 

 

479

 

Other liabilities and deferred credits

 

 

277

 

 

 

275

 

Shareholders’ equity

 

 

 

 

 

 

 

 

Common stock

 

 

1

 

 

 

1

 

Additional paid-in capital

 

 

1,711

 

 

 

1,770

 

Retained earnings

 

 

997

 

 

 

998

 

Accumulated other comprehensive loss

 

 

(432

)

 

 

(393

)

Total shareholders’ equity

 

 

2,277

 

 

 

2,376

 

Total liabilities and shareholders’ equity

 

 

4,805

 

 

 

4,903

 

Domtar Corporation

Consolidated Statements of Cash Flows

(In millions of dollars)

           

 

For the three months ended

 

 

For the six months ended

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

(Unaudited)

 

 

$

 

 

$

 

 

$

 

 

$

 

Operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

19

 

 

 

18

 

 

 

24

 

 

 

98

 

Adjustments to reconcile net earnings to cash flows

from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

71

 

 

 

74

 

 

 

143

 

 

 

147

 

Deferred income taxes and tax uncertainties

 

(13

)

 

 

2

 

 

 

(12

)

 

 

(1

)

Impairment of long-lived assets

 

 

 

 

15

 

 

 

 

 

 

25

 

Stock-based compensation expense

 

2

 

 

 

3

 

 

 

3

 

 

 

5

 

Equity loss, net

 

 

 

 

 

 

 

1

 

 

 

1

 

Changes in assets and liabilities, excluding the effect

of acquisition of business

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receivables

 

70

 

 

 

70

 

 

 

42

 

 

 

40

 

Inventories

 

(8

)

 

 

(5

)

 

 

20

 

 

 

(54

)

Prepaid expenses

 

7

 

 

 

(11

)

 

 

2

 

 

 

(11

)

Trade and other payables

 

(79

)

 

 

(7

)

 

 

(95

)

 

 

(76

)

Income and other taxes

 

1

 

 

 

(40

)

 

 

40

 

 

 

(14

)

Difference between employer pension and

other post-retirement contributions and

pension and other post-retirement expense

 

 

 

 

 

 

 

(1

)

 

 

1

 

Other assets and other liabilities

 

(3

)

 

 

 

 

 

(12

)

 

 

13

 

Cash flows from operating activities

 

67

 

 

 

119

 

 

 

155

 

 

 

174

 

Investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

(40

)

 

 

(55

)

 

 

(102

)

 

 

(101

)

Proceeds from disposals of property, plant and equipment

 

 

 

 

1

 

 

 

 

 

 

1

 

Acquisition of business, net of cash acquired

 

(30

)

 

 

 

 

 

(30

)

 

 

 

Cash flows used for investing activities

 

(70

)

 

 

(54

)

 

 

(132

)

 

 

(100

)

Financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend payments

 

(25

)

 

 

(28

)

 

 

(51

)

 

 

(55

)

Stock repurchase

 

 

 

 

(8

)

 

 

(59

)

 

 

(8

)

Net change in bank indebtedness

 

 

 

 

 

 

 

(10

)

 

 

3

 

Change in revolving credit facility

 

(220

)

 

 

 

 

 

(80

)

 

 

 

Proceeds from receivables securitization facility

 

 

 

 

60

 

 

 

25

 

 

 

80

 

Repayments of receivables securitization facility

 

(80

)

 

 

(90

)

 

 

(80

)

 

 

(110

)

Issuance of long-term debt

 

300

 

 

 

 

 

 

300

 

 

 

 

Repayments of long-term debt

 

 

 

 

(1

)

 

 

 

 

 

(1

)

Other

 

(1

)

 

 

 

 

 

(4

)

 

 

(1

)

Cash flows (used for) provided from financing activities

 

(26

)

 

 

(67

)

 

 

41

 

 

 

(92

)

Net (decrease) increase in cash and cash equivalents

 

(29

)

 

 

(2

)

 

 

64

 

 

 

(18

)

Impact of foreign exchange on cash

 

1

 

 

 

1

 

 

 

(1

)

 

 

 

Cash and cash equivalents at beginning of period

 

152

 

 

 

94

 

 

 

61

 

 

 

111

 

Cash and cash equivalents at end of period

 

124

 

 

 

93

 

 

 

124

 

 

 

93

 

Supplemental cash flow information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash payments (refund) for:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

8

 

 

 

7

 

 

 

25

 

 

 

23

 

Income taxes

 

1

     

44

     

(24

)

   

50

 

Domtar Corporation
Quarterly Reconciliation of Non-GAAP Financial Measures

(In millions of dollars, unless otherwise noted)

The following table sets forth certain non-U.S. generally accepted accounting principles (“GAAP”) financial metrics identified in bold as “Earnings before items”, “Earnings before items per diluted share”, “EBITDA”, “EBITDA margin”, “EBITDA before items”, “EBITDA margin before items”, “Free cash flow”, “Net debt” and “Net debt-to-total capitalization”. Management believes that the financial metrics are useful to understand our operating performance and benchmark with peers within the industry. The Company calculates “Earnings before items” and “EBITDA before items” by excluding the after-tax (pre-tax) effect of specified items. These metrics are presented as a complement to enhance the understanding of operating results but not in substitution for GAAP results.

 

 

 

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

Q1

 

 

Q2

 

 

YTD

 

 

Q1

 

 

Q2

 

 

Q3

 

 

Q4

 

 

Year

 

Reconciliation of “Earnings before items” to Net earnings (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

($)

 

 

5

 

 

 

19

 

 

 

24

 

 

 

80

 

 

 

18

 

 

 

20

 

 

 

(34

)

 

 

84

 

 

(+)

Pension settlement loss

 

($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22

 

 

 

22

 

 

(+)

Impairment of long-lived assets

 

($)

 

 

 

 

 

 

 

 

 

 

 

8

 

 

 

12

 

 

 

26

 

 

 

 

 

 

46

 

 

(+)

Closure and restructuring costs

 

($)

 

 

 

 

 

1

 

 

 

1

 

 

 

3

 

 

 

6

 

 

 

9

 

 

 

14

 

 

 

32

 

 

(=)

Earnings before items

 

($)

 

 

5

 

 

 

20

 

 

 

25

 

 

 

91

 

 

 

36

 

 

 

55

 

 

 

2

 

 

 

184

 

 

(/)

Weighted avg. number of common shares outstanding (diluted)

 

(millions)

 

 

56.2

 

 

 

55.3

 

 

 

55.7

 

 

 

63.2

 

 

 

63.3

 

 

 

61.7

 

 

 

57.3

 

 

 

61.4

 

 

(=)

Earnings before items per diluted share

 

($)

 

 

0.09

 

 

 

0.36

 

 

 

0.45

 

 

 

1.44

 

 

 

0.57

 

 

 

0.89

 

 

 

0.03

 

 

 

3.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of “EBITDA” and “EBITDA before items” to

Net earnings (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

($)

 

 

5

 

 

 

19

 

 

 

24

 

 

 

80

 

 

 

18

 

 

 

20

 

 

 

(34

)

 

 

84

 

 

(+)

Equity loss, net of taxes

 

($)

 

 

1

 

 

 

 

 

 

1

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

 

 

2

 

 

(+)

Income tax expense (benefit)

 

($)

 

 

3

 

 

 

(15

)

 

 

(12

)

 

 

24

 

 

 

5

 

 

 

(1

)

 

 

(26

)

 

 

2

 

 

(+)

Interest expense, net

 

($)

 

 

14

 

 

 

15

 

 

 

29

 

 

 

13

 

 

 

13

 

 

 

12

 

 

 

14

 

 

 

52

 

 

(+)

Depreciation and amortization

 

($)

 

 

72

 

 

 

71

 

 

 

143

 

 

 

73

 

 

 

74

 

 

 

72

 

 

 

74

 

 

 

293

 

 

(+)

Impairment of long-lived assets

 

($)

 

 

 

 

 

 

 

 

 

 

 

10

 

 

 

15

 

 

 

33

 

 

 

 

 

 

58

 

 

(=)

EBITDA

 

($)

 

 

95

 

 

 

90

 

 

 

185

 

 

 

201

 

 

 

125

 

 

 

136

 

 

 

29

 

 

 

491

 

 

(/)

Sales

 

($)

 

 

1,278

 

 

 

1,012

 

 

 

2,290

 

 

 

1,376

 

 

 

1,317

 

 

 

1,283

 

 

 

1,244

 

 

 

5,220

 

 

(=)

EBITDA margin

 

(%)

 

 

7

%

 

 

9

%

 

 

8

%

 

 

15

%

 

 

9

%

 

 

11

%

 

 

2

%

 

 

9

%

 

 

EBITDA

 

($)

 

 

95

 

 

 

90

 

 

 

185

 

 

 

201

 

 

 

125

 

 

 

136

 

 

 

29

 

 

 

491

 

 

(+)

Pension settlement loss

 

($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30

 

 

 

30

 

 

(+)

Closure and restructuring costs

 

($)

 

 

 

 

 

1

 

 

 

1

 

 

 

4

 

 

 

8

 

 

 

11

 

 

 

19

 

 

 

42

 

 

(=)

EBITDA before items

 

($)

 

 

95

 

 

 

91

 

 

 

186

 

 

 

205

 

 

 

133

 

 

 

147

 

 

 

78

 

 

 

563

 

 

(/)

Sales

 

($)

 

 

1,278

 

 

 

1,012

 

 

 

2,290

 

 

 

1,376

 

 

 

1,317

 

 

 

1,283

 

 

 

1,244

 

 

 

5,220

 

 

(=)

EBITDA margin before items

 

(%)

 

 

7

%

 

 

9

%

 

 

8

%

 

 

15

%

 

 

10

%

 

 

11

%

 

 

6

%

 

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domtar Corporation
Quarterly Reconciliation of Non-GAAP Financial Measures

(In millions of dollars, unless otherwise noted)

       

2020

   

2019

 
       

Q1

   

Q2

   

YTD

   

Q1

   

Q2

   

Q3

   

Q4

   

Year

 

Reconciliation of “Free cash flow” to Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

($)

 

 

88

 

 

 

67

 

 

 

155

 

 

 

55

 

 

 

119

 

 

 

108

 

 

 

160

 

 

 

442

 

 

(-)

Additions to property, plant and equipment

 

($)

 

 

(62

)

 

 

(40

)

 

 

(102

)

 

 

(46

)

 

 

(55

)

 

 

(56

)

 

 

(98

)

 

 

(255

)

 

(=)

Free cash flow

 

($)

 

 

26

 

 

 

27

 

 

 

53

 

 

 

9

 

 

 

64

 

 

 

52

 

 

 

62

 

 

 

187

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“Net debt-to-total capitalization” computation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank indebtedness

 

($)

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 

 

3

 

 

 

1

 

 

 

9

 

 

 

 

 

 

(+)

Long-term debt due within one year

 

($)

 

 

1

 

 

 

13

 

 

 

 

 

 

 

1

 

 

 

1

 

 

 

1

 

 

 

1

 

 

 

 

 

 

(+)

Long-term debt

 

($)

 

 

1,102

 

 

 

1,089

 

 

 

 

 

 

 

853

 

 

 

824

 

 

 

938

 

 

 

938

 

 

 

 

 

 

(=)

Debt

 

($)

 

 

1,103

 

 

 

1,102

 

 

 

 

 

 

 

857

 

 

 

828

 

 

 

940

 

 

 

948

 

 

 

 

 

 

(-)

Cash and cash equivalents

 

($)

 

 

(152

)

 

 

(124

)

 

 

 

 

 

 

(94

)

 

 

(93

)

 

 

(98

)

 

 

(61

)

 

 

 

 

 

(=)

Net debt

 

($)

 

 

951

 

 

 

978

 

 

 

 

 

 

 

763

 

 

 

735

 

 

 

842

 

 

 

887

 

 

 

 

 

 

(+)

Shareholders’ equity

 

($)

 

 

2,181

 

 

 

2,277

 

 

 

 

 

 

 

2,608

 

 

 

2,619

 

 

 

2,439

 

 

 

2,376

 

 

 

 

 

 

(=)

Total capitalization

 

($)

 

 

3,132

 

 

 

3,255

 

 

 

 

 

 

 

3,371

 

 

 

3,354

 

 

 

3,281

 

 

 

3,263

 

 

 

 

 

 

 

Net debt

 

($)

 

 

951

 

 

 

978

 

 

 

 

 

 

 

763

 

 

 

735

 

 

 

842

 

 

 

887

 

 

 

 

 

 

(/)

Total capitalization

 

($)

 

 

3,132

 

 

 

3,255

 

 

 

 

 

 

 

3,371

 

 

 

3,354

 

 

 

3,281

 

 

 

3,263

 

 

 

 

 

 

(=)

Net debt-to-total capitalization

 

(%)

 

 

30

%

 

 

30

%

 

 

 

 

 

 

23

%

 

 

22

%

 

 

26

%

 

 

27

%

 

 

 

 

“Earnings before items”, “Earnings before items per diluted share”, “EBITDA”, “EBITDA margin”, “EBITDA before items”, “EBITDA margin before items”, “Free cash flow”, “Net debt” and “Net debt-to-total capitalization” have no standardized meaning prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies and therefore should not be considered in isolation or as a substitute for Net earnings (loss) or any other earnings statement, cash flow statement or balance sheet financial information prepared in accordance with GAAP. It is important for readers to understand that certain items may be presented in different lines by different companies on their financial statements, thereby leading to different measures for different companies.

Domtar Corporation
Quarterly Reconciliation of Non-GAAP Financial Measures – By Segment 2020

(In millions of dollars, unless otherwise noted)

The following table sets forth certain non-U.S. generally accepted accounting principles (“GAAP”) financial metrics identified in bold as “Operating income (loss) before items”, “EBITDA before items” and “EBITDA margin before items” by reportable segment. Management believes that the financial metrics are useful to understand our operating performance and benchmark with peers within the industry. The Company calculates the segmented “Operating income (loss) before items” by excluding the pre-tax effect of specified items. These metrics are presented as a complement to enhance the understanding of operating results but not in substitution for GAAP results.

 

 

 

 

 

 

Pulp and Paper

 

Personal Care

 

Corporate

 

Total

 

 

 

 

 

 

Q1’20

 

Q2’20

 

Q3’20

 

Q4’20

 

YTD

 

Q1’20

 

Q2’20

 

Q3’20

 

Q4’20

 

YTD

 

Q1’20

 

Q2’20

 

Q3’20

 

Q4’20

 

YTD

 

Q1’20

 

Q2’20

 

Q3’20

 

Q4’20

 

YTD

Reconciliation of Operating income (loss)

to “Operating income (loss) before items”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

($)

 

4

 

3

 

 

 

7

 

20

 

18

 

 

 

38

 

(5)

 

(7)

 

 

 

(12)

 

19

 

14

 

 

 

33

 

(+)

Closure and restructuring costs

 

($)

 

 

1

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

1

 

(=)

Operating income (loss) before items

 

($)

 

4

 

4

 

 

 

8

 

20

 

18

 

 

 

38

 

(5)

 

(7)

 

 

 

(12)

 

19

 

15

 

 

 

34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of “Operating income (loss)

before items” to “EBITDA before items”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) before items

 

($)

 

4

 

4

 

 

 

8

 

20

 

18

 

 

 

38

 

(5)

 

(7)

 

 

 

(12)

 

19

 

15

 

 

 

34

 

(+)

Non-service components of net periodic benefit cost

 

($)

 

4

 

6

 

 

 

10

 

 

 

 

 

 

 

(1)

 

 

 

(1)

 

4

 

5

 

 

 

9

 

(+)

Depreciation and amortization

 

($)

 

58

 

56

 

 

 

114

 

14

 

15

 

 

 

29

 

 

 

 

 

 

72

 

71

 

 

 

143

 

(=)

EBITDA before items

 

($)

 

66

 

66

 

 

 

132

 

34

 

33

 

 

 

67

 

(5)

 

(8)

 

 

 

(13)

 

95

 

91

 

 

 

186

 

(/)

Sales

 

($)

 

1,031

 

802

 

 

 

1,833

 

266

 

229

 

 

 

495

 

 

 

 

 

 

1,297

 

1,031

 

 

 

2,328

 

(=)

EBITDA margin before items

 

(%)

 

6%

 

8%

 

 

 

7%

 

13%

 

14%

 

 

 

14%

 

 

 

 

 

 

7%

 

9%

 

 

 

8%

“Operating income (loss) before items”, “EBITDA before items” and “EBITDA margin before items” have no standardized meaning prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies and therefore should not be considered in isolation or as a substitute for Operating income (loss) or any other earnings statement, cash flow statement or balance sheet financial information prepared in accordance with GAAP. It is important for readers to understand that certain items may be presented in different lines by different companies on their financial statements, thereby leading to different measures for different companies.

Domtar Corporation
Quarterly Reconciliation of Non-GAAP Financial Measures – By Segment 2019

(In millions of dollars, unless otherwise noted)

The following table sets forth certain non-U.S. generally accepted accounting principles (“GAAP”) financial metrics identified in bold as “Operating income (loss) before items”, “EBITDA before items” and “EBITDA margin before items” by reportable segment. Management believes that the financial metrics are useful to understand our operating performance and benchmark with peers within the industry. The Company calculates the segmented “Operating income (loss) before items” by excluding the pre-tax effect of specified items. These metrics are presented as a complement to enhance the understanding of operating results but not in substitution for GAAP results.

 

 

 

 

 

 

Pulp and Paper

 

Personal Care

 

Corporate

 

Total

 

 

 

 

 

 

Q1’19

 

Q2’19

 

Q3’19

 

Q4’19

 

Year

 

Q1’19

 

Q2’19

 

Q3’19

 

Q4’19

 

Year

 

Q1’19

 

Q2’19

 

Q3’19

 

Q4’19

 

Year

 

Q1’19

 

Q2’19

 

Q3’19

 

Q4’19

 

Year

Reconciliation of Operating income (loss)

to “Operating income (loss) before items”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

($)

 

144

 

62

 

31

 

(11)

 

226

 

(8)

 

(18)

 

2

 

8

 

(16)

 

(21)

 

(10)

 

(4)

 

(12)

 

(47)

 

115

 

34

 

29

 

(15)

 

163

 

(+)

Impairment of long-lived assets

 

($)

 

 

 

32

 

 

32

 

10

 

15

 

1

 

 

26

 

 

 

 

 

 

10

 

15

 

33

 

 

58

 

(+)

Closure and restructuring costs

 

($)

 

 

 

5

 

17

 

22

 

4

 

8

 

6

 

2

 

20

 

 

 

 

 

 

4

 

8

 

11

 

19

 

42

 

(=)

Operating income (loss) before items

 

($)

 

144

 

62

 

68

 

6

 

280

 

6

 

5

 

9

 

10

 

30

 

(21)

 

(10)

 

(4)

 

(12)

 

(47)

 

129

 

57

 

73

 

4

 

263

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of “Operating income (loss)

before items” to “EBITDA before items”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) before items

 

($)

 

144

 

62

 

68

 

6

 

280

 

6

 

5

 

9

 

10

 

30

 

(21)

 

(10)

 

(4)

 

(12)

 

(47)

 

129

 

57

 

73

 

4

 

263

 

(+)

Pension settlement loss

 

($)

 

 

 

 

30

 

30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30

 

30

 

(+)

Non-service components of net periodic benefit cost

 

($)

 

3

 

3

 

2

 

(28)

 

(20)

 

 

 

 

 

 

 

(1)

 

 

(2)

 

(3)

 

3

 

2

 

2

 

(30)

 

(23)

 

(+)

Depreciation and amortization

 

($)

 

58

 

59

 

57

 

57

 

231

 

15

 

15

 

15

 

17

 

62

 

 

 

 

 

 

73

 

74

 

72

 

74

 

293

 

(=)

EBITDA before items

 

($)

 

205

 

124

 

127

 

65

 

521

 

21

 

20

 

24

 

27

 

92

 

(21)

 

(11)

 

(4)

 

(14)

 

(50)

 

205

 

133

 

147

 

78

 

563

 

(/)

Sales

 

($)

 

1,157

 

1,106

 

1,079

 

1,027

 

4,369

 

239

 

228

 

219

 

234

 

920

 

 

 

 

 

 

1,396

 

1,334

 

1,298

 

1,261

 

5,289

 

(=)

EBITDA margin before items

 

(%)

 

18%

 

11%

 

12%

 

6%

 

12%

 

9%

 

9%

 

11%

 

12%

 

10%

 

 

 

 

 

 

15%

 

10%

 

11%

 

6%

 

11%

“Operating income (loss) before items”, “EBITDA before items” and “EBITDA margin before items” have no standardized meaning prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies and therefore should not be considered in isolation or as a substitute for Operating income (loss) or any other earnings statement, cash flow statement or balance sheet financial information prepared in accordance with GAAP. It is important for readers to understand that certain items may be presented in different lines by different companies on their financial statements, thereby leading to different measures for different companies.

As a result of changes in our organization structure, we have changed our segment reporting. Starting January 1, 2020, our materials business EAM, a manufacturer of high quality airlaid and ultrathin laminated cores, previously reported under our Personal Care segment is now presented under our Pulp and Paper segment. Prior period segment results have been restated to the new segment presentation with no significant impact on segment results. There were no changes to our consolidated sales or operating income.

Domtar Corporation

Supplemental Segmented Information

(In millions of dollars, unless otherwise noted)

                 

 

 

 

 

2020

 

 

2019

 

 

 

 

 

Q1

 

 

Q2

 

 

YTD

 

 

Q1

 

 

Q2

 

 

Q3

 

 

Q4

 

 

Year

 

Pulp and Paper Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

($)

 

 

1,031

 

 

 

802

 

 

 

1,833

 

 

 

1,157

 

 

 

1,106

 

 

 

1,079

 

 

 

1,027

 

 

 

4,369

 

Operating income (loss)

 

($)

 

 

4

 

 

 

3

 

 

 

7

 

 

 

144

 

 

 

62

 

 

 

31

 

 

 

(11

)

 

 

226

 

Depreciation and amortization

 

($)

 

 

58

 

 

 

56

 

 

 

114

 

 

 

58

 

 

 

59

 

 

 

57

 

 

 

57

 

 

 

231

 

Impairment of long-lived assets

 

($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32

 

 

 

 

 

 

32

 

Paper

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paper Production

 

(‘000 ST)

 

 

648

 

 

 

436

 

 

 

1,084

 

 

 

757

 

 

 

697

 

 

 

653

 

 

 

619

 

 

 

2,726

 

Paper Shipments – Manufactured

 

(‘000 ST)

 

 

679

 

 

 

459

 

 

 

1,138

 

 

 

736

 

 

 

681

 

 

 

672

 

 

 

656

 

 

 

2,745

 

Communication Papers

 

(‘000 ST)

 

 

569

 

 

 

366

 

 

 

935

 

 

 

615

 

 

 

567

 

 

 

563

 

 

 

554

 

 

 

2,299

 

Specialty and Packaging Papers

 

(‘000 ST)

 

 

110

 

 

 

93

 

 

 

203

 

 

 

121

 

 

 

114

 

 

 

109

 

 

 

102

 

 

 

446

 

Paper Shipments – Sourced from 3rd parties

 

(‘000 ST)

 

 

22

 

 

 

12

 

 

 

34

 

 

 

23

 

 

 

21

 

 

 

25

 

 

 

24

 

 

 

93

 

Paper Shipments – Total

 

(‘000 ST)

 

 

701

 

 

 

471

 

 

 

1,172

 

 

 

759

 

 

 

702

 

 

 

697

 

 

 

680

 

 

 

2,838

 

Pulp

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pulp Shipments(a)

 

(‘000 ADMT)

 

 

389

 

 

 

427

 

 

 

816

 

 

 

349

 

 

 

370

 

 

 

416

 

 

 

404

 

 

 

1,539

 

Pulp Shipments mix(b):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hardwood Kraft Pulp

 

(%)

 

 

3

%

 

 

2

%

 

 

2

%

 

 

2

%

 

 

2

%

 

 

5

%

 

 

5

%

 

 

4

%

Softwood Kraft Pulp

 

(%)

 

 

52

%

 

 

57

%

 

 

55

%

 

 

53

%

 

 

56

%

 

 

55

%

 

 

54

%

 

 

54

%

Fluff Pulp

 

(%)

 

 

45

%

 

 

41

%

 

 

43

%

 

 

45

%

 

 

42

%

 

 

40

%

 

 

41

%

 

 

42

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personal Care Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

($)

 

 

266

 

 

 

229

 

 

 

495

 

 

 

239

 

 

 

228

 

 

 

219

 

 

 

234

 

 

 

920

 

Operating income (loss)

 

($)

 

 

20

 

 

 

18

 

 

 

38

 

 

 

(8

)

 

 

(18

)

 

 

2

 

 

 

8

 

 

 

(16

)

Depreciation and amortization

 

($)

 

 

14

 

 

 

15

 

 

 

29

 

 

 

15

 

 

 

15

 

 

 

15

 

 

 

17

 

 

 

62

 

Impairment of long-lived assets

 

($)

 

 

 

 

 

 

 

 

 

 

 

10

 

 

 

15

 

 

 

1

 

 

 

 

 

 

26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Exchange Rates

 

$US / $CAN

 

 

1.344

 

 

 

1.385

 

 

 

1.365

 

 

 

1.329

 

 

 

1.337

 

 

 

1.321

 

 

 

1.321

 

 

 

1.327

 

 

 

$CAN / $US

 

 

0.744

 

 

 

0.722

 

 

 

0.733

 

 

 

0.752

 

 

 

0.748

 

 

 

0.757

 

 

 

0.757

 

 

 

0.754

 

 

 

€ / $US

 

 

1.102

 

 

 

1.101

 

 

 

1.102

 

 

 

1.136

 

 

 

1.124

 

 

 

1.111

 

 

 

1.107

 

 

 

1.120

 

As a result of changes in our organization structure, we have changed our segment reporting. Starting January 1, 2020, our materials business EAM, a manufacturer of high quality airlaid and ultrathin laminated cores, previously reported under our Personal Care segment is now presented under our Pulp and Paper segment. Prior period segment results have been restated to the new segment presentation with no significant impact on segment results. There were no changes to our consolidated sales or operating income.

(a) Figures represent Pulp Shipments to third parties.

(b) Percentages include Pulp Shipments to our Personal Care segment.

Note: the term “ST” refers to a short ton and the term “ADMT” refers to an air dry metric ton.

INVESTOR RELATIONS
Nicholas Estrela
Director
Investor Relations
Tel.: 514-848-5049

MEDIA RELATIONS
David Struhs
Vice-President
Corporate Services and Sustainability
Tel.: 803-802-8031

Source: Domtar Corporation

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