2014

Domtar Corporation reports preliminary third quarter 2012 financial results

Good performance in pulp and paper and lower costs for planned maintenance drove results
(All financial information is in U.S. dollars, and all earnings per share results are diluted, unless otherwise noted.)

  • Third quarter 2012 net earnings of $1.84 per share, earnings before items1 of $1.87 per share
  • Paper inventories reduced by 10% compared to June 2012
  • Continued momentum in Personal Care segment

TICKER SYMBOL
(NYSE: UFS) (TSX: UFS)

MONTREAL, Oct. 25, 2012 /PRNewswire/ - Domtar Corporation (NYSE: UFS) (TSX: UFS) today reported net earnings of $66 million ($1.84 per share) for the third quarter of 2012 compared to net earnings of $59 million ($1.61 per share) for the second quarter of 2012 and net earnings of $117 million ($2.95 per share) for the third quarter of 2011. Sales for the third quarter of 2012 amounted to $1.4 billion.

Excluding items listed below, the Company had earnings before items1 of $67 million ($1.87 per share) for the third quarter of 2012 compared to earnings before items1 of $59 million ($1.61 per share) for the second quarter of 2012 and earnings before items1 of $123 million ($3.10 per share) for the third quarter of 2011.

Third quarter 2012 items:

  • Closure and restructuring costs of $2 million ($1 million after tax)

Second quarter 2012 items:

  • None

Third quarter 2011 items:

  • Gains on the sale of property, plant and equipment and business of $4 million ($3 million after tax);
  • Charge of $8 million ($4 million after tax) related to the impairment and write-down of property, plant and equipment;
  • Premium paid on debt repurchase of $4 million ($3 million after tax);
  • Closure and restructuring costs of $1 million ($1 million after tax); and
  • Negative impact of purchase accounting of $1 million ($1 million after tax).

"The third quarter was marked by weak paper demand and by cyclically low pulp prices," said John Williams, President and CEO. "Nevertheless, shipments for our pulp were sequentially higher, our paper pricing remained firm and paper inventories decreased by 10%. Given the macro environment, we continue to manage the business prudently, adjusting our production to customer demand through market-related downtime. I am pleased with our performance overall despite a sluggish economy and a weak pulp price environment."

QUARTERLY REVIEW

Operating income before items1 was $111 million in the third quarter of 2012 compared to an operating income before items1 of $106 million in the second quarter of 2012. Depreciation and amortization totaled $96 million in the third quarter of 2012.

(In millions of dollars)   3Q 2012   2Q 2012
Sales   $1,389   $1,368
Operating income (loss)        
  Pulp and Paper segment   103   96
  Distribution segment   (5)   (2)
  Personal Care segment   12   12
  Corporate   (1)   -
  Total   109   106
Operating income before items1   111   106
Depreciation and amortization   96   96

The increase in operating income before items1 in the third quarter of 2012 was the result of higher shipments for pulp and paper, lower maintenance and raw material costs and lower SG&A costs. These factors were partially offset by lower average selling prices for pulp and paper and higher costs for lack-of-order downtime in papers.

When compared to the second quarter of 2012, paper shipments increased 0.9% and pulp shipments increased 12.8%. Paper deliveries of Ariva® decreased 4.6% when compared to the second quarter of 2012. The shipments-to-production ratio for paper was 105% in the third quarter of 2012, compared to 98% in the second quarter of 2012. Lack-of-order downtime and machine slowdowns in papers totaled 38,000 tons. Paper inventories decreased by 38,000 tons while pulp inventories increased by 15,000 metric tons as at the end of September, compared to June levels.

LIQUIDITY AND CAPITAL

Cash flow provided from operating activities amounted to $206 million and capital expenditures amounted to $66 million, resulting in free cash flow1 of $140 million for the three months ended September 2012. Domtar's net debt-to-total capitalization ratio1 stood at 17% at September 30, 2012 compared to 12% at December 31, 2011.

Under its stock repurchase program, Domtar repurchased, during the quarter, 578,328 shares of common stock at an average price of $75.42 per share. Since the inception of the program, Domtar repurchased 8,135,157 shares of common stock at an average price of $80.53. At the end of the quarter, Domtar had $345 million remaining under this program.

OUTLOOK

Due to seasonal factors, Domtar paper shipments are expected to decline in the fourth quarter when compared to the third quarter. In pulp, we anticipate that prices will begin to gradually increase in the medium term due to favorable market dynamics and low softwood inventory levels. Input costs, notably energy and chemicals are expected to increase slightly in the fourth quarter.

EARNINGS CONFERENCE CALL

The Company will hold a conference call today at 10:00 a.m. (ET) to discuss its third quarter 2012 financial results. Financial analysts are invited to participate in the call by dialing at least 10 minutes before start time 1 (866) 321-8231 (toll free - North America) or 1 (416) 642-5213 (International), 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 2012 earnings on February 1, 2013 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 Corporation (NYSE: UFS) (TSX: UFS) designs, manufactures, markets and distributes a wide variety of fiber-based products including communication papers, specialty and packaging papers and adult incontinence products. The foundation of its business is a network of world class wood fiber converting assets that produce papergrade, fluff and specialty pulps. The majority of its pulp production is consumed internally to manufacture paper and consumer products. Domtar is the largest integrated marketer of uncoated freesheet paper in North America with recognized brands such as Cougar®, Lynx® Opaque Ultra, Husky® Opaque Offset, First Choice® and Domtar EarthChoice®. Domtar is also a leading marketer and producer of a complete line of incontinence care products marketed primarily under the Attends® brand name. Domtar owns and operates Ariva®, an extensive network of strategically located paper and printing supplies distribution facilities. In 2011, Domtar had sales of US$5.6 billion from nearly 50 countries. The Company employs approximately 9,300 people. To learn more, visit www.domtar.com.

Forward-Looking Statements

All statements in this news release that are not based on historical fact are "forward-looking statements." While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of our control that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under the captions "Forward-Looking Statements" and "Risk Factors" of the latest Form 10-K filed with the SEC as periodically updated by subsequently filed Form 10-Q's. Unless specifically required by law, we assume no obligation to update or revise these forward-looking statements to reflect new events or circumstances.

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

Domtar Corporation
Highlights
(In millions of dollars, unless otherwise noted)

           
    Three months
ended September 30
Three months
ended September 30
Nine months
ended September 30
Nine months
ended September 30
    2012 2011 2012 2011
       (Unaudited)  
     $  $  $  $
           
Selected Segment Information          
 
Sales           
    Pulp and Paper   1,153 1,246 3,476 3,776
    Distribution   167 197 528 604
    Personal Care   111 17 288 17
Total for reportable segments   1,431 1,460 4,292 4,397
    Intersegment sales - Pulp and Paper   (42) (43) (137) (154)
Consolidated sales   1,389 1,417 4,155 4,243
Depreciation and amortization
and impairment and write-down of property, plant and equipment
         
    Pulp and Paper   90 91 271 277
    Distribution   - 1 3 3
    Personal Care   6 1 15 1
Total for reportable segments   96 93 289 281
    Impairment and write-down of property, plant and equipment - Pulp and Paper   - 8 2 73
Consolidated depreciation and amortization
and impairment and write-down of property, plant and equipment
  96 101 291 354
           
Operating income (loss)           
    Pulp and Paper   103 189 306 489
    Distribution   (5) (1) (8) -
    Personal Care   12 - 32 -
    Corporate   (1) (1) (6) 4
Consolidated operating income    109 187 324 493
Interest expense, net   20 25 109 67
Earnings before income taxes and equity earnings   89 162 215 426
Income tax expense    22 45 57 122
Equity loss, net of taxes   1 - 5 -
Net earnings    66 117 153 304
           
Per common share (in dollars)           
  Net earnings          
    Basic   1.85 2.96 4.21 7.43
    Diluted   1.84 2.95 4.20 7.38
Weighted average number of common
and exchangeable shares outstanding (millions)
         
    Basic   35.7 39.5 36.3 40.9
    Diluted   35.8 39.7 36.4 41.2
           
Cash flows provided from operating activities    206 257 411 711
Additions to property, plant and equipment   66 31 171 64




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

 
    Three months
ended September 30
Three months
ended September 30
Nine months
ended September 30
Nine months
ended September 30
    2012 2011 2012 2011
      (Unaudited)  
     $  $  $  $
           
Sales   1,389 1,417 4,155 4,243
Operating expenses          
    Cost of sales, excluding depreciation and amortization   1,100 1,055 3,263 3,132
    Depreciation and amortization   96 93 289 281
    Selling, general and administrative   80 75 268 253
    Impairment and write-down of property, plant and equipment   - 8 2 73
    Closure and restructuring costs   2 1 3 14
    Other operating loss (income), net   2 (2) 6 (3)
     1,280 1,230 3,831 3,750
Operating income    109 187 324 493
Interest expense, net   20 25 109 67
Earnings before income taxes and equity earnings   89 162 215 426
Income tax expense    22 45 57 122
Equity loss, net of taxes   1 - 5 -
Net earnings    66 117 153 304
           
Per common share (in dollars)          
               
  Net earnings          
    Basic   1.85 2.96 4.21 7.43
    Diluted   1.84 2.95 4.20 7.38
Weighted average number of common
and exchangeable shares outstanding (millions)
         
    Basic   35.7 39.5 36.3 40.9
    Diluted   35.8 39.7 36.4 41.2

 

Domtar Corporation
Consolidated Balance Sheets at
(In millions of dollars)
   
           
      September 30 December 31
      2012 2011
       (Unaudited)
        $  $
 
Assets      
Current assets      
    Cash and cash equivalents   593 444
    Receivables, less allowances of $5 and $5   674 644
    Inventories   663 652
    Prepaid expenses   34 22
    Income and other taxes receivable   44 47
    Deferred income taxes   124 125
      Total current assets   2,132 1,934
         
  Property, plant and equipment, at cost   8,794 8,448
  Accumulated depreciation   (5,330) (4,989)
      Net property, plant and equipment   3,464 3,459
Goodwill   261 163
Intangible assets, net of amortization   347 204
Other assets   115 109
      Total assets   6,319 5,869
 
Liabilities and shareholders' equity      
Current liabilities      
    Bank indebtedness   15 7
    Trade and other payables   682 688
    Income and other taxes payable   16 17
    Long-term debt due within one year   7 4
      Total current liabilities   720 716
 
Long-term debt   1,196 837
Deferred income taxes and other   997 927
Other liabilities and deferred credits   402 417
 
Shareholders' equity      
    Exchangeable shares   49 49
    Additional paid-in capital   2,210 2,326
    Retained earnings    779 671
    Accumulated other comprehensive loss   (34) (74)
      Total shareholders' equity   3,004 2,972
        Total liabilities and shareholders' equity   6,319 5,869

 

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

       
    Nine months
ended September 30
Nine months
ended September 30
    2012 2011
    (Unaudited)
     $  $
       
Operating activities      
Net earnings    153 304
Adjustments to reconcile net earnings to cash flows from operating activities      
  Depreciation and amortization    289 281
  Deferred income taxes and tax uncertainties   13 56
  Impairment and write-down of property, plant and equipment   2 73
  Loss on repurchase of long-term debt   - 4
  Net gains on disposals of property, plant and equipment and sale of business   - (5)
  Stock-based compensation expense   3 3
  Equity loss, net   5 -
  Other   (11) -
Changes in assets and liabilities, excluding the effects of acquisition and sale of businesses      
  Receivables   (1) (56)
  Inventories   20 20
  Prepaid expenses   (7) (4)
  Trade and other payables   (80) 4
  Income and other taxes   6 27
  Difference between employer pension and other post-retirement contributions
and pension and other post-retirement expense
  7 (7)
  Other assets and other liabilities   12 11
  Cash flows provided from operating activities    411 711
 
Investing activities      
Additions to property, plant and equipment   (171) (64)
Proceeds from disposals of property, plant and equipment    - 34
Proceeds from sale of business   - 10
Acquisition of businesses, net of cash acquired   (293) (288)
Investment in joint venture   (5) -
  Cash flows used for provided from investing activities   (469) (308)
 
Financing activities      
Dividend payments   (42) (36)
Net change in bank indebtedness   8 (7)
Issuance of long-term debt   548 -
Repayment of long-term debt   (190) (17)
Debt issue and tender offer costs   - (7)
Stock repurchase   (116) (415)
Other   (1) 10
  Cash flows provided from (used for) financing activities   207 (472)
 
Net increase (decrease) in cash and cash equivalents   149 (69)
Translation adjustments related to cash and cash equivalents   - -
Cash and cash equivalents at beginning of period   444 530
Cash and cash equivalents at end of period   593 461
       
Supplemental cash flow information      
  Net cash payments for:      
    Interest (including $47 million of tender offer premiums in 2012)   92 51
    Income taxes paid    60 42
           

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 presented are frequently used by investors and are useful to evaluate our ability to service debt and our overall credit profile. Management believes these metrics are also useful to measure the operating performance and benchmark with peers within the industry. These metrics are presented as a complement to enhance the understanding of operating results but not in substitution for GAAP results.

The Company calculates "Earnings before items" and "EBITDA before items" by excluding the after-tax (pre-tax) effect of items considered by management as not reflecting our current operations. Management uses these measures, as well as EBITDA and Free cash flow, to focus on ongoing operations and believes that it is useful to investors because it enables them to perform meaningful comparisons between periods. Domtar believes that using this information along with Net earnings provides for a more complete analysis of the results of operations. Net earnings and Cash flow provided from operating activities are the most directly comparable GAAP measures.

  

                       
        2012   2011
     
  Q1 Q2 Q3 YTD   Q1 Q2 Q3 Q4 YTD
Reconciliation of "Earnings before items" to Net earnings                      
    Net earnings ($) 28 59 66 153   133 54 117 61 365
  (+) Impairment and write-down of property, plant and equipment ($) 1 - - 1   2 38 4 9 53
  (+) Closure and restructuring costs ($) 1 - 1 2   8 1 1 23 33
  (-) Net losses (gains) on disposals of property, plant and equipment and sale of business ($) - - - -   (5) 5 (3) - (3)
  (+) Impact of purchase accounting ($) 1 - - 1   - - 1 - 1
  (+) Loss on repurchase of long-term debt ($) 30 - - 30   - - 3 - 3
  (=) Earnings before items ($) 61 59 67 187   138 98 123 93 452
  (/) Weighted avg. number of common and exchangeable shares outstanding (diluted) (millions) 37.0 36.6 35.8 36.4   42.4 41.4 39.7 37.4 40.2
  (=) Earnings before items per diluted share ($) 1.65 1.61 1.87  5.14   3.25 2.37 3.10 2.49 11.24
                           
Reconciliation of "EBITDA" and "EBITDA before items" to Net earnings                      
    Net earnings ($) 28 59 66 153   133 54 117 61 365
  (+) Equity loss, net of taxes ($) 2 2 1 5   - - - 7 7
  (+) Income tax expense  ($) 8 27 22 57   57 20 45 11 133
  (+) Interest expense, net ($) 71 18 20 109   21 21 25 20 87
  (=) Operating income  ($) 109 106 109 324   211 95 187 99 592
  (+) Depreciation and amortization ($) 97 96 96 289   93 95 93 95 376
  (+) Impairment and write-down of property, plant and equipment ($) 2 - - 2   3 62 8 12 85
  (-) Net losses (gains) on disposals of property, plant and equipment and sale of business ($) - - - -   (7) 6 (4) (1) (6)
  (=) EBITDA ($) 208 202 205 615   300 258 284 205 1,047
  (/) Sales ($) 1,398 1,368 1,389 4,155   1,423 1,403 1,417 1,369 5,612
  (=) EBITDA margin (%) 15% 15% 15% 15%   21% 18% 20% 15% 19%
    EBITDA ($) 208 202 205 615   300 258 284 205 1,047
  (+) Closure and restructuring costs ($) 1 - 2 3   11 2 1 38 52
  (+) Impact of purchase accounting  ($) 1 - - 1   - - 1 - 1
  (=) EBITDA before items ($) 210 202 207 619   311 260 286 243 1,100
  (/) Sales ($) 1,398 1,368 1,389 4,155   1,423 1,403 1,417 1,369 5,612
  (=) EBITDA margin before items (%) 15% 15% 15% 15%   22% 19% 20% 18% 20%
                           
Reconciliation of "Free cash flow" to Cash flow provided from operating activities                      
    Cash flow provided from operating activities ($) 30 175 206 411   148 306 257 172 883
  (-) Additions to property, plant and equipment ($) (29) (76) (66) (171)   (13) (20) (31) (80) (144)
  (=) Free cash flow ($) 1 99 140 240   135 286 226 92 739
                           
"Net debt-to-total capitalization" computation                      
    Bank indebtedness ($) 13 22 15     25 25 17 7  
  (+) Long-term debt due within one year ($) 6 6 7     2 2 5 4  
  (+) Long-term debt ($) 952 950 1,196     825 824 837 837  
  (=) Debt ($) 971 978 1,218     852 851 859 848  
  (-) Cash and cash equivalents ($) (315) (276) (593)     (604) (742) (461) (444)  
  (=) Net debt ($) 656 702 625     248 109 398 404  
  (+) Shareholders' equity ($) 3,009 2,948 3,004     3,288 3,194 2,999 2,972  
  (=) Total capitalization ($) 3,665 3,650 3,629     3,536 3,303 3,397 3,376  
    Net debt ($) 656 702 625     248 109 398 404  
  (/) Total capitalization ($) 3,665 3,650 3,629     3,536 3,303 3,397 3,376  
  (=) Net debt-to-total capitalization (%) 18% 19% 17%     7% 3% 12% 12%  

"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 2012
(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 presented are frequently used by investors and are useful to measure the operating performance and benchmark with peers within the industry. These metrics are presented as a complement to enhance the understanding of operating results but not in substitution for GAAP results.

The Company calculates the segmented "Operating income (loss) before items" by excluding the pre-tax effect of items considered by management as not reflecting our ongoing operations. Management uses these measures to focus on ongoing operations and believes that it is useful to investors because it enables them to perform meaningful comparisons between periods. Domtar believes that using this information along with Operating income (loss) provides for a more complete analysis of the results of operations. Operating income (loss) by segment is the most directly comparable GAAP measure.

         
        Pulp and Paper Distribution Personal Care (1) Corporate Total
        Q1'12 Q2'12 Q3'12 Q4'12 YTD Q1'12 Q2'12 Q3'12 Q4'12 YTD Q1'12 Q2'12 Q3'12 Q4'12 YTD Q1'12 Q2'12 Q3'12 Q4'12 YTD Q1'12 Q2'12 Q3'12 Q4'12 YTD
Reconciliation of Operating income (loss) to "Operating income (loss) before items"                                                    
    Operating income (loss) ($) 107 96 103 - 306 (1) (2) (5) - (8) 8 12 12 - 32 (5) - (1) - (6) 109 106 109 - 324
  (+) Impairment and write-down of property, plant and equipment ($) 2 - - - 2 - - - - - - - - - - - - - - - 2 - - - 2
  (+) Closure and restructuring costs ($) 1 - - - 1 - - 1 - 1 - - 1 - 1 - - - - - 1 - 2 - 3
  (+) Impact of purchase accounting  ($) - - - - - - - - - - 1 - - - 1 - - - - - 1 - - - 1
                                                         
  (=) Operating income (loss) before items ($) 110 96 103 - 309 (1) (2) (4) - (7) 9 12 13 - 34 (5) - (1) - (6) 113 106 111 - 330
                                                         
Reconciliation of "Operating income (loss) before items" to "EBITDA before items"                                                    
    Operating income (loss) before items ($) 110 96 103 - 309 (1) (2) (4) - (7) 9 12 13 - 34 (5) - (1) - (6) 113 106 111 - 330
  (+) Depreciation and amortization ($) 93 88 90 - 271 1 2 - - 3 3 6 6 - 15 - - - - - 97 96 96 - 289
                                                         
  (=) EBITDA before items ($) 203 184 193 - 580 - - (4) - (4) 12 18 19 - 49 (5) - (1) - (6) 210 202 207 - 619
  (/) Sales ($) 1,191 1,132 1,153 - 3,476 189 172 167 - 528 70 107 111 - 288 - - - - - 1,450 1,411 1,431 - 4,292
  (=) EBITDA margin before items (%) 17% 16% 17% - 17% - - - - - 17% 17% 17% - 17% - - - - - 14% 14% 14% - 14%

"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.

(1) On March 1, 2012, the Company acquired 100% of the shares of Attends Healthcare Limited.
On May 1, 2012, the Company acquired 100% of the shares of EAM Corporation.

Domtar Corporation
Quarterly Reconciliation of Non-GAAP Financial Measures - By Segment 2011
(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 presented are frequently used by investors and are useful to measure the operating performance and benchmark with peers within the industry. These metrics are presented as a complement to enhance the understanding of operating results but not in substitution for GAAP results. 

The Company calculates the segmented "Operating income (loss) before items" by excluding the pre-tax effect of items considered by management as not reflecting our ongoing operations. Management uses these measures to focus on ongoing operations and believes that it is useful to investors because it enables them to perform meaningful comparisons between periods. Domtar believes that using this information along with Operating income (loss) provides for a more complete analysis of the results of operations. Operating income (loss) by segment is the most directly comparable GAAP measure.

   
        Pulp and Paper Distribution Personal Care (1) Corporate Total
        Q1'11 Q2'11 Q3'11 Q4'11 YTD Q1'11 Q2'11 Q3'11 Q4'11 YTD Q1'11 Q2'11 Q3'11 Q4'11 YTD Q1'11 Q2'11
Q3'11 Q4'11 YTD Q1'11 Q2'11 Q3'11 Q4'11 YTD
Reconciliation of Operating income (loss) to "Operating income (loss) before items"                                                    
    Operating income (loss) ($) 209 91 189 92 581 3 (2) (1) - - - - - 7 7 (1) 6 (1) - 4 211 95 187 99 592
  (+) Impairment and write-down of property, plant and equipment ($) 3 62 8 12 85 - - - - - - - - - - - - - - - 3 62 8 12 85
  (+) Closure and restructuring costs ($) 11 2 1 37 51 - - - 1 1 - - - - - - - - - - 11 2 1 38 52
  (-) Net losses (gains) on disposals of property, plant and equipment and sale of business ($) (4) 12 (4) (1) 3 (3) - - - (3) - - - - - - (6) - - (6) (7) 6 (4) (1) (6)
  (+) Impact of purchase accounting  ($) - - - - - - - - - - - - 1 - 1 - - - - - - - 1 - 1
                                                         
  (=) Operating income (loss) before items ($) 219 167 194 140 720 - (2) (1) 1 (2) - - 1 7 8 (1) - (1) - (2) 218 165 193 148 724
                                                         
Reconciliation of "Operating income (loss) before items" to "EBITDA before items"                                                    
    Operating income (loss) before items ($) 219 167 194 140 720 - (2) (1) 1 (2) - - 1 7 8 (1) - (1) - (2) 218 165 193 148 724
  (+) Depreciation and amortization ($) 92 94 91 91 368 1 1 1 1 4 - - 1 3 4 - - - - - 93 95 93 95 376
                                                         
  (=) EBITDA before items ($) 311 261 285 231 1,088 1 (1) - 2 2 - - 2 10 12 (1) - (1) - (2) 311 260 286 243 1,100
  (/) Sales ($) 1,269 1,261 1,246 1,177 4,953 217 190 197 177 781 - - 17 54 71 - - - - - 1,486 1,451 1,460 1,408 5,805
  (=) EBITDA margin before items (%) 25% 21% 23% 20% 22% - - - 1% - - - 12% 19% 17% - - - - - 21% 18% 20% 17% 19%

 

"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.


(1) On September 1, 2011, the Company acquired 100% of the shares of Attends Healthcare Inc.


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

   
    2012 2011
    Q1 Q2 Q3 YTD Q1 Q2 Q3 Q4 YTD
Pulp and Paper Segment                    
  Sales   ($) 1,191 1,132 1,153 3,476 1,269 1,261 1,246 1,177 4,953
    Intersegment sales - Pulp and Paper   ($) (52) (43) (42) (137) (63) (48) (43) (39) (193)
  Operating income   ($) 107 96 103 306 209 91 189 92 581
  Depreciation and amortization   ($) 93 88 90 271 92 94 91 91 368
  Impairment and write-down of property, plant and equipment   ($) 2 - - 2 3 62 8 12 85
                     
  Papers                      
  Papers Production ('000 ST) 870 832 788 2,490 899 890 875 871 3,535
  Papers Shipments ('000 ST) 870 819 826 2,515 913 901 889 831 3,534
      Communication Papers ('000 ST) 756 705 709 2,170 816 794 784 729 3,123
      Specialty and Packaging ('000 ST) 114 114 117 345 97 107 105 102 411
                     
  Pulp                    
  Pulp Shipments(a) ('000 ADMT) 389 368 415 1,172 375 361 358 403 1,497
      Hardwood Kraft Pulp (%) 15% 16% 20% 12% 20% 19% 18% 19% 19%
      Softwood Kraft Pulp (%) 61% 57% 55% 41% 55% 54% 57% 58% 57%
      Fluff Pulp (%) 24% 27% 25% 18% 25% 27% 25% 23% 24%
                     
Distribution Segment                    
  Sales ($) 189 172 167 528 217 190 197 177 781
  Operating income (loss) ($) (1) (2) (5) (8) 3 (2) (1) - -
  Depreciation and amortization ($) 1 2 - 3 1 1 1 1 4
                     
Personal Care Segment                    
  Sales ($) 70 107 111 288 - - 17 54 71
  Operating income ($) 8 12 12 32 - - - 7 7
  Depreciation and amortization ($) 3 6 6 15 - - 1 3 4
                     
                     
Average Exchange Rates $US / $CAN 1.001 1.010 0.995 1.002 0.986 0.968 0.980 1.023 0.989
  $CAN / $US 0.999 0.990 1.006 0.998 1.014 1.034 1.021 0.977 1.011
  €EUR / $US 1.312 1.283 1.252 1.282 - - - - -

 

(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.

 

 

 

 

 

SOURCE DOMTAR CORPORATION



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