Domtar Corporation Reports Preliminary Third Quarter 2016 Financial Results

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

  • Third quarter 2016 net earnings of $0.94 per share; earnings before items1 of $1.13 per share
  • Lack-of-order downtime totaling 39 thousand tons in paper
  • Personal Care sales growth of 8% year-over-year

FORT MILL, S.C.–(BUSINESS WIRE)–Oct. 27, 2016– Domtar Corporation (NYSE: UFS) (TSX: UFS) today reported net earnings of $59 million ($0.94 per share) for the third quarter of 2016 compared to net earnings of $18 million ($0.29 per share) for the second quarter of 2016 and net earnings of $11 million ($0.17 per share) for the third quarter of 2015. Sales for the third quarter of 2016 were $1.3 billion.

Excluding items listed below, the Company had earnings before items1 of $71 million ($1.13 per share) for the third quarter of 2016 compared to earnings before items1 of $38 million ($0.61 per share) for the second quarter of 2016 and earnings before items1 of $54 million ($0.86 per share) for the third quarter of 2015.

Third quarter 2016 items:

  • Impairment of property, plant & equipment of $5 million ($4 million after tax); and
  • Closure and restructuring costs of $10 million ($8 million after tax).

Second quarter 2016 items:

  • Litigation settlement of $2 million ($2 million after tax);
  • Impairment of property, plant & equipment of $3 million ($2 million after tax); and
  • Closure and restructuring costs of $21 million ($16 million after tax).

Third quarter 2015 items:

  • Closure and restructuring costs of $1 million ($1 million after tax);
  • Impairment of property, plant & equipment of $20 million ($12 million after tax); and
  • Debt refinancing costs of $42 million ($30 million after tax).

“We had a solid operating performance despite the market related downtime in paper. Productivity improved due to lower planned maintenance outages, and we further benefited from our continuous improvement program efforts resulting in lower costs,” said John D. Williams, President and Chief Executive Officer. “We are making meaningful progress with the ramp-up of the Ashdown fluff pulp machine with milestones achieved throughout the quarter. Production of bale softwood pulp is underway with the fluff qualification period set to begin in the fourth quarter.”

Mr. Williams added, “Strong sales momentum continued in Personal Care; our topline is growing faster than market with year-over-year growth of 8%. The recent acquisition of Home Delivery Incontinent Supplies Co., a leading national direct-to-consumer provider of incontinence products, will support our Personal Care growth strategy going forward.”

QUARTERLY REVIEW

Operating income was $92 million in the third quarter of 2016 compared to operating income of $39 million in the second quarter of 2016. Depreciation and amortization totaled $87 million in the third quarter of 2016.

Operating income before items1 was $107 million in the third quarter of 2016 compared to an operating income before items1 of $65 million in the second quarter of 2016.

                 
(In millions of dollars)   3Q 2016     2Q 2016  
                 
Sales   $ 1,270     $ 1,267  
Operating income (loss)                
Pulp and Paper segment     89       35  
Personal Care segment     15       15  
Corporate     (12 )     (11 )
Total operating income     92       39  
Operating income before items1     107       65  
Depreciation and amortization     87       87  

The increase in operating income in the third quarter of 2016 was mostly due to lower maintenance costs, lower raw material costs, lower closure and restructuring costs and favorable exchange rates. These factors were partially offset by higher selling, general and administrative expenses, lower average selling prices, a decrease in our paper sales volume and higher freight and other costs.

When compared to the second quarter of 2016, manufactured paper shipments were down 1% and pulp shipments increased by 3%. The shipments-to-production ratio for paper was 102% in the third quarter of 2016, compared to 105% in the second quarter of 2016. Paper inventories decreased by 17,000 tons and pulp inventories increased by 52,000 metric tons when compared to the second quarter of 2016.

LIQUIDITY AND CAPITAL

Cash flow provided from operating activities amounted to $95 million and capital expenditures were $83 million, resulting in a free cash flow1 of $12 million for the third quarter of 2016. Domtar’s net debt-to-total capitalization ratio1 stood at 30% at September 30, 2016 and at June 30, 2016.

OUTLOOK

The fourth quarter will be negatively impacted by seasonality and mix in paper. We expect some short-term pricing volatility in pulp, while raw material unit costs are expected to increase, notably for wood, energy and chemicals. Our Personal Care results are expected to continue to benefit from the new customer wins, market growth and cost savings from the new manufacturing platform.

EARNINGS CONFERENCE CALL

The Company will hold a conference call today at 11:00 a.m. (ET) to discuss its third quarter 2016 financial results. Financial analysts are invited to participate in the call by dialing 1 (800) 499-4035 (toll free – North America) or 1 (416) 204-9269 (International) 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 fourth quarter 2016 earnings results on February 9, 2017 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 10,000 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 $5.3 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 and those contained under “Outlook,” are “forward-looking statements.” Actual results may differ materially from those suggested by these statements for a number of reasons, including changes in customer demand and pricing, changes in manufacturing costs, future acquisitions and divestitures, including facility closings, and the other reasons identified under “Risk Factors” in our Form 10-K for 2015 as filed with the SEC and as updated by subsequently filed Form 10-Q’s. 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)

    Three months     Three months     Nine months     Nine months  
    ended     ended     ended     ended  
    September 30,     September 30,     September 30,     September 30,  
    2016     2015     2016     2015  
    (Unaudited)  
    $       $       $       $    
                                 
Selected Segment Information                                
Sales                                
Pulp and Paper     1,054       1,092       3,193       3,348  
Personal Care     231       214       675       648  
Total for reportable segments     1,285       1,306       3,868       3,996  
Intersegment sales     (15 )     (14 )     (44 )     (46 )
Consolidated sales     1,270       1,292       3,824       3,950  
Depreciation and amortization and impairment                                
of property, plant and equipment                              
Pulp and Paper     71       75       216       224  
Personal Care     16       14       47       46  
Total for reportable segments     87       89       263       270  
Impairment of property, plant     5       20       29       57  

and equipment – Pulp and Paper

                             
Consolidated depreciation and amortization and     92       109       292       327  
impairment of property, plant and equipment                            
                                 
Operating income (loss)                                
Pulp and Paper     89       54       143       184  
Personal Care     15       18       44       45  
Corporate     (12 )     (11 )     (38 )     (35 )
Consolidated operating income     92       61       149       194  
Interest expense, net     17       64       49       115  
Earnings (loss) before income taxes     75       (3 )     100       79  
Income tax expense (benefit)     16       (14 )     19       (6 )
Net earnings     59       11       81       85  
Per common share (in dollars)                                
Net earnings                                
Basic     0.94       0.17       1.29       1.34  
Diluted     0.94       0.17       1.29       1.34  
Weighted average number of common                                
shares outstanding (millions)                              
Basic     62.6       62.9       62.6       63.4  
Diluted     62.7      

63.0

      62.7       63.5  
Cash flows provided from operating activities     95       67       310       316  
Additions to property, plant and equipment     83       66       302       202  

Domtar Corporation
Consolidated Statements of Earnings
(In millions of dollars, unless otherwise noted)

    Three months     Three months     Nine months     Nine months  
    ended     ended     ended     ended  
    September 30,     September 30,     September 30,     September 30,  
    2016     2015     2016     2015  
    (Unaudited)  
    $       $       $       $    
                                 
Sales     1,270       1,292       3,824       3,950  
Operating expenses                                
Cost of sales, excluding depreciation and amortization     969       1,026       3,032       3,140  
Depreciation and amortization     87       89       263       270  
Selling, general and administrative     107       95       314       294  
Impairment of property, plant and    

 

     

 

     

 

     

 

 
equipment  

5

     

20

     

29

     

57

 
Closure and restructuring costs     10       1       33       3  
Other operating loss (income), net                 4       (8 )
      1,178       1,231       3,675       3,756  
Operating income     92       61       149       194  
Interest expense, net     17       64       49       115  
Earnings (loss) before income taxes     75       (3 )     100       79  
Income tax expense (benefit)     16       (14 )     19       (6 )
Net earnings     59       11       81       85  
Per common share (in dollars)                                
Net earnings                                
Basic     0.94       0.17       1.29       1.34  
Diluted     0.94       0.17       1.29       1.34  
Weighted average number of common                                
shares outstanding (millions)                            
Basic     62.6       62.9       62.6       63.4  
Diluted     62.7      

63.0

      62.7       63.5  

Domtar Corporation
Consolidated Balance Sheets at
(In millions of dollars)

                 
    September 30,     December 31,  
    2016     2015  
    (Unaudited)  
    $       $    
Assets                
Current assets                
Cash and cash equivalents     168       126  
Receivables, less allowances of $6 and $6     616       627  
Inventories     770       766  
Prepaid expenses     46       21  
Income and other taxes receivable     33       14  
Total current assets     1,633       1,554  
Property, plant and equipment, net     2,887       2,835  
Goodwill     548       539  
Intangible assets, net     600       601  
Other assets     162       125  
Total assets     5,830       5,654  
Liabilities and shareholders’ equity                
Current liabilities                
Trade and other payables     645       720  
Income and other taxes payable     25       27  
Long-term debt due within one year     63       41  
Total current liabilities     733       788  
Long-term debt     1,309       1,210  
Deferred income taxes and other     692       654  
Other liabilities and deferred credits     342       350  
Shareholders’ equity                
Common stock     1       1  
Additional paid-in capital     1,961       1,966  
Retained earnings     1,190       1,186  
Accumulated other comprehensive loss     (398 )     (501 )
Total shareholders’ equity     2,754       2,652  
Total liabilities and shareholders’ equity     5,830       5,654  

Domtar Corporation
Consolidated Statements of Cash Flows
(In millions of dollars)

    For the nine months ended  
    September 30, 2016     September 30, 2015  
    (Unaudited)  
    $       $    
Operating activities                
Net earnings     81       85  
Adjustments to reconcile net earnings to cash flows from operating activities                
Depreciation and amortization     263       270  
Deferred income taxes and tax uncertainties     6       (50 )
Impairment of property, plant and equipment     29       57  
Net gains on disposals of property, plant and equipment           (15 )
Stock-based compensation expense     5       5  
Other     (3 )     4  
Changes in assets and liabilities, excluding effect of acquisition of business                
Receivables     19       (11 )
Inventories     6       (70 )
Prepaid expenses     (5 )     (3 )
Trade and other payables     (53 )     8  
Income and other taxes     (18 )     30  
Difference between employer pension and other post-retirement    

(16

)    

2

 
contributions and pension and other post-retirement expense        
Other assets and other liabilities     (4 )     4  
Cash flows provided from operating activities     310       316  
Investing activities                
Additions to property, plant and equipment     (302 )     (202 )
Proceeds from disposals of property, plant and equipment           35  
Acquisition of business, net of cash acquired     (1 )      
Other     1       9  
Cash flows used for investing activities     (302 )     (158 )
Financing activities                
Dividend payments     (76 )     (75 )
Stock repurchase     (10 )     (50 )
Net change in bank indebtedness     1       (9 )
Change in revolving bank credit facility     60       75  
Proceeds from receivables securitization facility     140        
Repayments of receivables securitization facility     (40 )      
Issuance of long-term debt           300  
Repayments of long-term debt     (40 )     (439 )
Other     (3 )     1  
Cash flows provided from (used for) financing activities     32       (197 )
Net increase (decrease) in cash and cash equivalents     40       (39 )
Impact of foreign exchange on cash     2       (7 )
Cash and cash equivalents at beginning of period     126       174  
Cash and cash equivalents at end of period     168       128  
Supplemental cash flow information                
Net cash payments for:                
Interest (including $40 million of redemption premiums in 2015)     50       121  
Income taxes paid, net     37       16  

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.

            2016     2015  
            Q1       Q2       Q3       YTD       Q1       Q2       Q3       Q4       Year    

Reconciliation of “Earnings before items” to Net earnings

                                                                           

 

                                                                               
    Net earnings   ($)     4       18       59       81       36       38       11       57       142  
  (+) Impairment of property, plant and equipment   ($)     16       2       4       22       12       11       12       12       47  
  (+) Closure and restructuring costs   ($)     2       16       8       26       1       1       1       1       4  
  (+) Litigation settlement   ($)           2             2                                
  (-) Net gains on disposals of property, plant and equipment   ($)                             (1 )     (11 )                 (12 )
  (+) Debt refinancing costs   ($)                                         30             30  
  (=) Earnings before items   ($)     22       38       71       131       48       39       54       70       211  
  (/) Weighted avg. number of common shares outstanding (diluted)   (millions)     62.8       62.7       62.7       62.7       63.9       63.7      

63.0

      62.9       63.4  
  (=) Earnings before items per diluted share   ($)     0.35       0.61       1.13       2.09       0.75       0.61       0.86       1.11       3.33  
                                                                                 

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

                                                                           

 

                                                                           
    Net earnings   ($)     4       18       59       81       36       38       11       57       142  
  (+) Income tax (benefit) expense   ($)     (3 )     6       16       19       9       (1 )     (14 )     20       14  
  (+) Interest expense, net   ($)     17       15       17       49       26       25       64       17       132  
  (=) Operating income   ($)     18       39       92       149       71       62       61       94       288  
  (+) Depreciation and amortization   ($)     89       87       87       263       90       91       89       89       359  
  (+) Impairment of property, plant and equipment   ($)     21       3       5       29       19       18       20       20       77  
  (-) Net gains on disposals of property, plant and equipment   ($)                             (1 )     (14 )                 (15 )
  (=) EBITDA   ($)     128       129       184       441       179       157       170       203       709  
  (/) Sales   ($)     1,287       1,267       1,270       3,824       1,348       1,310       1,292       1,314       5,264  
  (=) EBITDA margin   (%)     10 %     10 %     14 %     12 %     13 %     12 %     13 %     15 %     13 %
    EBITDA   ($)     128       129       184       441       179       157       170       203       709  
  (+) Closure and restructuring costs   ($)     2       21       10       33       1       1       1       1       4  
  (+) Litigation settlement   ($)           2             2                                
  (=) EBITDA before items   ($)     130       152       194       476       180       158       171       204       713  
  (/) Sales   ($)     1,287       1,267       1,270       3,824       1,348       1,310       1,292       1,314       5,264  
  (=) EBITDA margin before items   (%)     10 %     12 %     15 %     12 %     13 %     12 %     13 %     16 %     14 %
                                                                                 

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

                                                                           

 

                                                                           
    Cash flows provided from operating activities   ($)     97       118       95       310       127       122       67       137       453  
  (-) Additions to property, plant and equipment   ($)     (100 )     (119 )     (83 )     (302 )     (70 )     (66 )     (66 )     (87 )     (289 )
  (=) Free cash flow   ($)     (3 )     (1 )     12       8       57       56       1       50       164  
                                                                                 
“Net debt-to-total capitalization” computation                                                                            
    Bank indebtedness   ($)     6       1                     6       1       1                
  (+) Long-term debt due within one year   ($)     41       64       63               169       169       42       41          
  (+) Long-term debt   ($)     1,211       1,237       1,309               1,170       1,169       1,236       1,210          
  (=) Debt   ($)     1,258       1,302       1,372               1,345       1,339       1,279       1,251          
  (-) Cash and cash equivalents   ($)     (97 )     (111 )     (168 )             (183 )     (207 )     (128 )     (126 )        
  (=) Net debt   ($)     1,161       1,191       1,204               1,162       1,132       1,151       1,125          
  (+) Shareholders’ equity   ($)     2,736       2,716       2,754               2,710       2,761       2,659       2,652          
  (=) Total capitalization   ($)     3,897       3,907       3,958               3,872       3,893       3,810       3,777          
    Net debt   ($)     1,161       1,191       1,204               1,162       1,132       1,151       1,125          
  (/) Total capitalization   ($)     3,897       3,907       3,958               3,872       3,893       3,810       3,777          
  (=) Net debt-to-total capitalization   (%)     30 %     30 %     30 %             30 %     29 %     30 %     30 %        

“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, Operating income 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 2016
(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
              Q1’16   Q2’16   Q3’16   Q4’16   YTD   Q1’16   Q2’16   Q3’16   Q4’16   YTD   Q1’16   Q2’16   Q3’16   Q4’16   YTD   Q1’16   Q2’16   Q3’16   Q4’16   YTD

Reconciliation of Operating income (loss)

to “Operating income (loss) before items” Operating income (loss)

                                                                                 
                                                                                     
    ($)   19   35   89     143   14   15   15     44  

(15)

 

(11)

 

(12)

   

(38)

  18   39   92     149
  (+) Impairment of property, plant and equipment     ($)   21   3   5     29                       21   3   5     29
  (+) Closure and restructuring costs     ($)   2   21   10     33                       2   21   10     33
  (+) Litigation settlement     ($)                         2       2     2       2
  (=) Operating income (loss) before items     ($)   42   59   104     205   14   15   15     44  

(15)

 

(9)

 

(12)

   

(36)

  41   65   107     213
                                                                                           
Reconciliation of “Operating income (loss) before items” to “EBITDA before items”                                                                                      
                                                                                     
    Operating income (loss) before items     ($)   42   59   104     205   14   15   15     44  

(15)

 

(9)

 

(12)

   

(36)

  41   65   107     213
  (+) Depreciation and amortization     ($)   73   72   71     216   16   15   16     47             89   87   87     263
                                                                                           
  (=) EBITDA before items     ($)   115   131   175     421   30   30   31     91  

(15)

 

(9)

 

(12)

   

(36)

  130   152   194     476
  (/) Sales     ($)   1,085   1,054   1,054     3,193   216   228   231     675             1,301   1,282   1,285     3,868
  (=) EBITDA margin before items     (%)   11%   12%   17%     13%   14%   13%   13%     13%             10%   12%   15%     12%

“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 2015
(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
            Q1’15   Q2’15   Q3’15   Q4’15   Year   Q1’15   Q2’15   Q3’15   Q4’15   Year   Q1’15   Q2’15   Q3’15   Q4’15   Year   Q1’15   Q2’15   Q3’15   Q4’15   Year
Reconciliation of Operating income (loss) to “Operating income (loss) before items”                                                                                    
                                                                                   
    Operating income (loss)   ($)   75   55   54   86   270   10   17   18   16   61  

(14)

 

(10)

 

(11)

 

(8)

 

(43)

  71   62   61   94   288
  (+) Impairment of property, plant and equipment   ($)   19   18   20   20   77                       19   18   20   20   77
  (-) Net gains on disposals of property, plant and equipment   ($)    

(14)

     

(14)

           

(1)

 

     

(1)

 

(1)

 

(14)

 

   

(15)

  (+) Closure and restructuring costs   ($)     1   1   1   3   1         1             1   1   1   1  

4

  (=) Operating income (loss) before items   ($)   94   60   75   107   336   11   17   18   16   62  

(15)

 

(10)

 

(11)

 

(8)

 

(44)

  90   67   82   115   354
                                                                                         
Reconciliation of “Operating income (loss) before items” to “EBITDA before items”                                                                                    
                                                                                   
    Operating income (loss) before items   ($)   94   60   75   107   336   11   17   18   16   62  

(15)

 

(10)

 

(11)

 

(8)

 

(44)

  90   67   82   115   354
  (+) Depreciation and amortization   ($)   74   75   75   73   297   16   16   14   16   62             90   91   89   89   359
                                                                                         
  (=) EBITDA before items   ($)   168   135   150   180   633   27   33   32   32   124  

(15)

 

(10)

 

(11)

 

(8)

 

(44)

  180   158   171   204   713
  (/) Sales   ($)   1,146   1,110   1,092   1,110   4,458   218   216   214   221   869             1,364   1,326   1,306   1,331   5,327
  (=) EBITDA margin before items   (%)   15%   12%   14%   16%   14%   12%   15%   15%   14%   14%             13%   12%   13%   15%   13%

“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
Supplemental Segmented Information
(In millions of dollars, unless otherwise noted)

          2016     2015  
          Q1       Q2       Q3       YTD       Q1       Q2       Q3       Q4       Year    
Pulp and Paper                                                                              
Segment                                                                              
Sales     ($)     1,085       1,054       1,054       3,193       1,146       1,110       1,092       1,110       4,458  
Operating income     ($)     19       35       89       143       75       55       54       86       270  
Depreciation and     ($)     73       72       71       216       74       75       75       73       297  
amortization                                                                            
Impairment of property,     ($)     21       3       5       29       19       18       20       20       77  
plant and equipment                                                        
                                                                               

Paper

                                                                             
Paper Production     (‘000 ST)     785       715       726       2,226       808       806       794       837       3,245  
Paper Shipments –     (‘000 ST)     786       752       744       2,282       804       783       779       797       3,163  
Manufactured                                                        
Communication     (‘000 ST)     657       627       620       1,904       669       653       648       669       2,639  
Papers                                                          
Specialty and     (‘000 ST)     129       125       124       378       135       130       131       128       524  
Packaging                                                        
Paper Shipments –     (‘000 ST)     32       29       35       96       35       29       35       28       127  
Sourced from                                                        
3rd parties                                                        
Paper Shipments –     (‘000 ST)     818       781       779       2,378       839       812       814       825       3,290  
Total                                                          
Pulp                                                                              
Pulp Shipments(a)     (‘000 ADMT)     369       360       369       1,098       350       345       333       386       1,414  
Hardwood Kraft     (%)    

6

%

    4 %     5 %     5 %     9 %     8 %     8 %     8 %     8 %
Pulp                                        
Softwood Kraft     (%)     69 %     66 %     67 %     67 %     65 %     65 %     65 %     69 %     66 %
Pulp                                        
Fluff Pulp     (%)     25 %     30 %     28 %     28 %     26 %     27 %     27 %     23 %     26 %
                                                                               
Personal Care                                                                              
Segment                                                                              
Sales     ($)     216       228       231       675       218       216       214       221       869  
Operating income     ($)     14       15       15       44       10       17       18       16       61  
Depreciation and     ($)     16       15       16       47       16       16       14       16       62  
amortization                                                        
                                                                               
Average Exchange     $US / $CAN     1.375       1.289       1.305       1.323       1.241       1.229       1.309       1.335       1.279  
Rates                                                                              
      $CAN / $US     0.727       0.776       0.766       0.756       0.806       0.813       0.765       0.749       0.782  
      € / $US     1.103      

1.130

      1.116       1.116       1.126       1.106       1.112       1.095      

1.110

 

(a) Figures are gross of market pulp purchased from other producers on the open market for some of our paper making operations. Pulp Shipments represent the amount of pulp produced in excess of our internal requirement.

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

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

 

Source: Domtar Corporation

Domtar Corporation
INVESTOR RELATIONS
Nicholas Estrela, 514-848-5555 x 85979
Director
Investor Relations
or
MEDIA RELATIONS
David Struhs, 803-802-8031
Vice-President
Corporate Services and Sustainability

 

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