Domtar Corporation reports preliminary third quarter 2014 financial results
Strong performance in pulp and paper drive improved earnings
(All financial information is in U.S. dollars, and all earnings per share results are diluted, unless otherwise noted.)
- Third quarter 2014 net earnings of $4.33 per share; earnings before items1 of $0.94 per share
- Lack-of-order downtime totaling 51 thousand tons of paper, in-line with the second quarter
- Share buybacks totaling $19 million
TICKER SYMBOL
(NYSE: UFS) (TSX: UFS)
MONTREAL, Oct. 23, 2014 /CNW Telbec/ - Domtar Corporation (NYSE: UFS) (TSX: UFS) today reported net earnings of $281 million ($4.33 per share) for the third quarter of 2014 compared to net earnings of $40 million ($0.61 per share) for the second quarter of 2014 and net earnings of $27 million ($0.41 per share) for the third quarter of 2013. Sales for the third quarter of 2014 were $1,405 million.
Excluding items listed below, the Company had earnings before items1 of $61 million ($0.94 per share) for the third quarter of 2014 compared to earnings before items1 of $40 million ($0.61 per share) for the second quarter of 2014 and earnings before items1 of $41 million ($0.63 per share) for the third quarter of 2013.
Third quarter 2014 items:
- Deferred tax benefit of $204 million for the settlement of IRS audits, primarily related to Alternative Fuel Tax Credits;
- Recognition of $18 million of deferred Alternative Fuel Tax Credits ($18 million after tax); and
- Closure and restructuring costs of $2 million ($2 million after tax).
Second quarter 2014 items:
- None
Third quarter 2013 items:
- Loss on sale of business of $19 million ($12 million after tax); and
- Negative impact of purchase accounting of $2 million ($2 million after tax).
"Our financial performance improved when compared to the second quarter, resulting in strong free cash flow generation", said John D. Williams, President and Chief Executive Officer. "Our pulp shipments were sequentially higher, raw material and planned maintenance costs were lower and our paper pricing remained firm in a very competitive environment. Given current market conditions, we continue to manage the business prudently, adjusting our production to our customers' demand through market-related downtime."
"In Personal Care, our third quarter results were affected by some seasonality in our European business as well as the effect of a weaker Euro. We continued to execute on our capital expansion plans, further integrating operational and product improvements and we made good progress with the ramp up of five newly installed machines at three of our facilities."
QUARTERLY REVIEW
Operating income before items1 was $104 million in the third quarter of 2014 compared to an operating income before items1 of $79 million in the second quarter of 2014. Depreciation and amortization totaled $96 million in the third quarter of 2014.
| (In millions of dollars) |
3Q 2014 |
2Q 2014 |
|||
| Sales |
$1,405 |
$1,385 |
|||
| Operating income (loss) |
|||||
| Pulp and Paper segment |
109 |
69 |
|||
| Personal Care segment |
13 |
14 |
|||
| Corporate |
(2) |
(4) |
|||
| Total |
120 |
79 |
|||
| Operating income before items1 |
104 |
79 |
|||
| Depreciation and amortization |
96 |
96 |
|||
The increase in operating income before items1 in the third quarter of 2014 was the result of lower raw material costs, higher average selling prices for paper, lower costs for planned maintenance, higher pulp shipments, lower freight costs and higher productivity for pulp. These factors were partially offset by lower average selling prices for pulp and overall unfavorable exchange rates.
When compared to the second quarter of 2014, manufactured paper shipments were flat and pulp shipments increased 9.2%. The shipments-to-production ratio for paper was 102% in the third quarter of 2014, compared to 99% in the second quarter of 2014. Paper inventories decreased by 18,000 tons while pulp inventories increased by 1,000 metric tons at the end of September when compared to June levels.
LIQUIDITY AND CAPITAL
Cash flow provided from operating activities amounted to $203 million and capital expenditures were $56 million, resulting in free cash flow1 of $147 million for the third quarter of 2014. Domtar's net debt-to-total capitalization ratio1 stood at 30% at September 30, 2014 compared to 32% at June 30, 2014.
OUTLOOK
Domtar paper shipments are expected to decline in the fourth quarter when compared to the third quarter due to seasonality. Domtar will continue to closely monitor its inventory levels and balance its production with its customers' demand. We remain cautious on the short-term pulp outlook due to the recent strengthening of the U.S. dollar and we expect higher input costs due to increased raw material usage in the winter months. We expect the fourth quarter will benefit from lower maintenance activities in our network.
EARNINGS CONFERENCE CALL
The Company will hold a conference call today at 10:00 a.m. (ET) to discuss its third quarter 2014 financial results. Financial analysts are invited to participate in the call by dialing 1 (866) 321-8231 (toll free - North America) or 1 (416) 642-5213 (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 2014 earnings and full year results on February 6, 2015 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 absorbent hygiene 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 broad line of absorbent hygiene products marketed primarily under the Attends®, IncoPack and Indasec® brand names. In 2013, Domtar had sales of $5.4 billion from some 50 countries. The Company employs approximately 10,000 people. 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 2013 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.
_________________________
[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 |
Three months |
Nine months |
Nine months |
|||||
| 2014 |
2013 |
2014 |
2013 |
|||||
| (Unaudited) |
||||||||
| $ |
$ |
$ |
$ |
|||||
| Selected Segment Information |
||||||||
| Sales |
||||||||
| Pulp and Paper |
1,186 |
1,204 |
3,514 |
3,650 |
||||
| Personal Care |
231 |
175 |
698 |
394 |
||||
| Total for reportable segments |
1,417 |
1,379 |
4,212 |
4,044 |
||||
| Intersegment sales - Pulp and Paper |
(12) |
(4) |
(28) |
(12) |
||||
| Consolidated sales |
1,405 |
1,375 |
4,184 |
4,032 |
||||
| Depreciation and amortization and impairment and write-down of property, plant and equipment |
||||||||
| Pulp and Paper |
79 |
84 |
241 |
260 |
||||
| Personal Care |
17 |
9 |
50 |
21 |
||||
| Total for reportable segments |
96 |
93 |
291 |
281 |
||||
| Impairment and write-down of property, plant and equipment - Pulp and Paper |
- |
- |
- |
15 |
||||
| Consolidated depreciation and amortization and impairment and write-down of property, plant and equipment |
96 |
93 |
291 |
296 |
||||
| Operating income (loss) |
||||||||
| Pulp and Paper |
109 |
42 |
247 |
96 |
||||
| Personal Care |
13 |
11 |
42 |
34 |
||||
| Corporate |
(2) |
(4) |
(11) |
(62) |
||||
| Consolidated operating income |
120 |
49 |
278 |
68 |
||||
| Interest expense, net |
25 |
21 |
76 |
67 |
||||
| Earnings before income taxes and equity loss |
95 |
28 |
202 |
1 |
||||
| Income tax (benefit) expense |
(186) |
1 |
(158) |
(26) |
||||
| Equity loss, net of taxes |
- |
- |
- |
1 |
||||
| Net earnings |
281 |
27 |
360 |
26 |
||||
| Per common share (in dollars) |
||||||||
| Net earnings |
||||||||
| Basic |
4.34 |
0.41 |
5.55 |
0.39 |
||||
| Diluted |
4.33 |
0.41 |
5.54 |
0.39 |
||||
| Weighted average number of common and exchangeable shares outstanding (millions) |
||||||||
| Basic |
64.8 |
65.3 |
64.9 |
67.2 |
||||
| Diluted |
64.9 |
65.4 |
65.0 |
67.3 |
||||
| Cash flows provided from operating activities |
203 |
104 |
448 |
287 |
||||
| Additions to property, plant and equipment |
56 |
62 |
157 |
180 |
||||
| Domtar Corporation |
||||||
| Consolidated Statements of Earnings |
||||||
| (In millions of dollars, unless otherwise noted) |
||||||
| Three months |
Three months |
Nine months |
Nine months |
|||
| 2014 |
2013 |
2014 |
2013 |
|||
| (Unaudited) |
||||||
| $ |
$ |
$ |
$ |
|||
| Sales |
1,405 |
1,375 |
4,184 |
4,032 |
||
| Operating expenses |
||||||
| Cost of sales, excluding depreciation and amortization |
1,105 |
1,116 |
3,316 |
3,280 |
||
| Depreciation and amortization |
96 |
93 |
291 |
281 |
||
| Selling, general and administrative |
99 |
95 |
313 |
281 |
||
| Impairment and write-down of property, plant and equipment |
- |
- |
- |
15 |
||
| Closure and restructuring costs |
2 |
- |
3 |
18 |
||
| Other operating (income) loss, net |
(17) |
22 |
(17) |
89 |
||
| 1,285 |
1,326 |
3,906 |
3,964 |
|||
| Operating income |
120 |
49 |
278 |
68 |
||
| Interest expense, net |
25 |
21 |
76 |
67 |
||
| Earnings before income taxes and equity loss |
95 |
28 |
202 |
1 |
||
| Income tax (benefit) expense |
(186) |
1 |
(158) |
(26) |
||
| Equity loss, net of taxes |
- |
- |
- |
1 |
||
| Net earnings |
281 |
27 |
360 |
26 |
||
| Per common share (in dollars) |
||||||
| Net earnings |
||||||
| Basic |
4.34 |
0.41 |
5.55 |
0.39 |
||
| Diluted |
4.33 |
0.41 |
5.54 |
0.39 |
||
| Weighted average number of common and exchangeable shares outstanding (millions) |
||||||
| Basic |
64.8 |
65.3 |
64.9 |
67.2 |
||
| Diluted |
64.9 |
65.4 |
65.0 |
67.3 |
||
| Domtar Corporation |
||||||
| Consolidated Balance Sheets at |
||||||
| (In millions of dollars) |
||||||
| September 30 |
December 31 |
|||||
| 2014 |
2013 |
|||||
| (Unaudited) |
||||||
| $ |
$ |
|||||
| Assets |
||||||
| Current assets |
||||||
| Cash and cash equivalents |
134 |
655 |
||||
| Receivables, less allowances of $6 and $4 |
663 |
601 |
||||
| Inventories |
719 |
685 |
||||
| Prepaid expenses |
30 |
23 |
||||
| Income and other taxes receivable |
48 |
61 |
||||
| Deferred income taxes |
61 |
52 |
||||
| Total current assets |
1,655 |
2,077 |
||||
| Property, plant and equipment, at cost |
8,927 |
8,883 |
||||
| Accumulated depreciation |
(5,758) |
(5,594) |
||||
| Net property, plant and equipment |
3,169 |
3,289 |
||||
| Goodwill |
628 |
369 |
||||
| Intangible assets, net of amortization |
613 |
407 |
||||
| Other assets |
127 |
136 |
||||
| Total assets |
6,192 |
6,278 |
||||
| Liabilities and shareholders' equity |
||||||
| Current liabilities |
||||||
| Bank indebtedness |
3 |
15 |
||||
| Trade and other payables |
720 |
673 |
||||
| Income and other taxes payable |
26 |
17 |
||||
| Long-term debt due within one year |
170 |
4 |
||||
| Total current liabilities |
919 |
709 |
||||
| Long-term debt |
1,202 |
1,510 |
||||
| Deferred income taxes and other |
790 |
923 |
||||
| Other liabilities and deferred credits |
343 |
354 |
||||
| Shareholders' equity |
||||||
| Common stock |
1 |
- |
||||
| Exchangeable shares |
- |
44 |
||||
| Additional paid-in capital |
2,030 |
1,999 |
||||
| Retained earnings |
1,098 |
804 |
||||
| Accumulated other comprehensive loss |
(191) |
(65) |
||||
| Total shareholders' equity |
2,938 |
2,782 |
||||
| Total liabilities and shareholders' equity |
6,192 |
6,278 |
||||
| Domtar Corporation |
||||
| Consolidated Statements of Cash Flows |
||||
| (In millions of dollars) |
||||
| Nine months |
Nine months |
|||
| 2014 |
2013 |
|||
| (Unaudited) |
||||
| $ |
$ |
|||
| Operating activities |
||||
| Net earnings |
360 |
26 |
||
| Adjustments to reconcile net earnings to cash flows from operating activities |
||||
| Depreciation and amortization |
291 |
281 |
||
| Deferred income taxes and tax uncertainties |
(202) |
(9) |
||
| Impairment and write-down of property, plant and equipment |
- |
15 |
||
| Net losses on disposals of property, plant and equipment |
- |
9 |
||
| Stock-based compensation expense |
3 |
4 |
||
| Equity loss, net |
- |
1 |
||
| Other |
1 |
(4) |
||
| Changes in assets and liabilities, excluding the effects of acquisition and sale of businesses |
||||
| Receivables |
21 |
(46) |
||
| Inventories |
(22) |
(19) |
||
| Prepaid expenses |
(4) |
(5) |
||
| Trade and other payables |
(22) |
15 |
||
| Income and other taxes |
22 |
(11) |
||
| Difference between employer pension and other post-retirement contributions and pension and other post-retirement expense |
- |
23 |
||
| Other assets and other liabilities |
- |
7 |
||
| Cash flows provided from operating activities |
448 |
287 |
||
| Investing activities |
||||
| Additions to property, plant and equipment |
(157) |
(180) |
||
| Proceeds from disposals of property, plant and equipment and sale of business |
1 |
55 |
||
| Acquisition of businesses, net of cash acquired |
(546) |
(287) |
||
| Other |
5 |
(1) |
||
| Cash flows used for investing activities |
(697) |
(413) |
||
| Financing activities |
||||
| Dividend payments |
(60) |
(50) |
||
| Net change in bank indebtedness |
(13) |
(13) |
||
| Change in revolving bank credit facility |
(160) |
- |
||
| Proceeds from receivables securitization facilities |
90 |
- |
||
| Payments on receivables securitization facilities |
(108) |
- |
||
| Repayment of long-term debt |
(4) |
(99) |
||
| Stock repurchase |
(19) |
(183) |
||
| Other |
4 |
2 |
||
| Cash flows used for financing activities |
(270) |
(343) |
||
| Net decrease in cash and cash equivalents |
(519) |
(469) |
||
| Impact of foreign exchange on cash |
(2) |
(1) |
||
| Cash and cash equivalents at beginning of period |
655 |
661 |
||
| Cash and cash equivalents at end of period |
134 |
191 |
||
| Supplemental cash flow information |
||||
| Net cash payments for: |
||||
| Interest (including $2 million of redemption premiums in 2013) |
70 |
60 |
||
| Income taxes paid (refund), net |
32 |
(8) |
||
| Domtar Corporation |
| The following table sets forth certain non-U.S. generally accepted accounting principles ("GAAP") financial metrics identified in bold as "Earnings before items", "Earnings before items per diluted share", "EBITDA", "EBITDA margin", "EBITDA before items", "EBITDA margin before items", "Free cash flow", "Net debt" and "Net debt-to-total capitalization." Management believes that the financial metrics presented are frequently used by investors and are useful to evaluate our ability to service debt and our overall credit profile. Management believes these metrics are also useful to measure the operating performance and benchmark with peers within the industry. These metrics are presented as a complement to enhance the understanding of operating results but not in substitution for GAAP results. |
| The Company calculates "Earnings before items" and "EBITDA before items" by excluding the after-tax (pre-tax) effect of items considered by management as not reflecting our current operations. Management uses these measures, as well as EBITDA and Free cash flow, to focus on ongoing operations and believes that it is useful to investors because it enables them to perform meaningful comparisons between periods. Domtar believes that using this information along with Net earnings provides for a more complete analysis of the results of operations. Net earnings and Cash flow provided from operating activities are the most directly comparable GAAP measures. |
| 2014 |
2013 |
|||||||||||
| Q1 |
Q2 |
Q3 |
YTD |
Q1 |
Q2 |
Q3 |
Q4 |
YTD |
||||
| Reconciliation of "Earnings before items" to Net earnings (loss) |
||||||||||||
| Net earnings (loss) |
($) |
39 |
40 |
281 |
360 |
45 |
(46) |
27 |
65 |
91 |
||
| (+) |
Impairment and write-down of property, plant and equipment |
($) |
- |
- |
- |
- |
7 |
3 |
- |
7 |
17 |
|
| (+) |
Closure and restructuring costs |
($) |
1 |
- |
2 |
3 |
- |
13 |
- |
- |
13 |
|
| (-) |
Net (gains) losses on disposals of property, plant and equipment and business |
($) |
- |
- |
- |
- |
(6) |
- |
12 |
(4) |
2 |
|
| (+) |
Impact of purchase accounting |
($) |
2 |
- |
- |
2 |
- |
- |
2 |
- |
2 |
|
| (+) |
Alternative fuel tax credits |
($) |
- |
- |
(18) |
(18) |
18 |
- |
- |
- |
18 |
|
| (-) |
Cellulosic biofuel producer credits |
($) |
- |
- |
- |
- |
(33) |
- |
- |
- |
(33) |
|
| (+) |
Loss on repurchase of long-term debt |
($) |
- |
- |
- |
- |
2 |
- |
- |
- |
2 |
|
| (+) |
Weston litigation settlement |
($) |
- |
- |
- |
- |
- |
46 |
- |
- |
46 |
|
| (-) |
Internal Revenue Service audit settlement items |
($) |
- |
- |
(204) |
(204) |
- |
- |
- |
- |
- |
|
| (=) |
Earnings before items |
($) |
42 |
40 |
61 |
143 |
33 |
16 |
41 |
68 |
158 |
|
| ( / ) |
Weighted avg. number of common and exchangeable shares outstanding (diluted) |
(millions) |
65.0 |
65.1 |
64.9 |
65.0 |
69.7 |
66.9 |
65.4 |
65.0 |
66.7 |
|
| (=) |
Earnings before items per diluted share |
($) |
0.65 |
0.61 |
0.94 |
2.20 |
0.47 |
0.24 |
0.63 |
1.05 |
2.37 |
|
| Reconciliation of "EBITDA" and "EBITDA before items" to Net earnings (loss) |
||||||||||||
| Net earnings (loss) |
($) |
39 |
40 |
281 |
360 |
45 |
(46) |
27 |
65 |
91 |
||
| (+) |
Equity loss, net of taxes |
($) |
- |
- |
- |
- |
1 |
- |
- |
- |
1 |
|
| (+) |
Income tax expense (benefit) |
($) |
15 |
13 |
(186) |
(158) |
(22) |
(5) |
1 |
6 |
(20) |
|
| (+) |
Interest expense, net |
($) |
25 |
26 |
25 |
76 |
25 |
21 |
21 |
22 |
89 |
|
| (=) |
Operating income (loss) |
($) |
79 |
79 |
120 |
278 |
49 |
(30) |
49 |
93 |
161 |
|
| (+) |
Depreciation and amortization |
($) |
99 |
96 |
96 |
291 |
95 |
93 |
93 |
95 |
376 |
|
| (+) |
Impairment and write-down of property, plant and equipment |
($) |
- |
- |
- |
- |
10 |
5 |
- |
7 |
22 |
|
| (-) |
Net (gains) losses on disposals of property, plant and equipment and business |
($) |
- |
- |
- |
- |
(10) |
- |
19 |
(5) |
4 |
|
| (=) |
EBITDA |
($) |
178 |
175 |
216 |
569 |
144 |
68 |
161 |
190 |
563 |
|
| (/) |
Sales |
($) |
1,394 |
1,385 |
1,405 |
4,184 |
1,345 |
1,312 |
1,375 |
1,359 |
5,391 |
|
| (=) |
EBITDA margin |
(%) |
13% |
13% |
15% |
14% |
11% |
5% |
12% |
14% |
10% |
|
| EBITDA |
($) |
178 |
175 |
216 |
569 |
144 |
68 |
161 |
190 |
563 |
||
| (+) |
Alternative fuel tax credits |
($) |
- |
- |
(18) |
(18) |
26 |
- |
- |
- |
26 |
|
| (+) |
Closure and restructuring costs |
($) |
1 |
- |
2 |
3 |
- |
18 |
- |
- |
18 |
|
| (+) |
Impact of purchase accounting |
($) |
3 |
- |
- |
3 |
- |
- |
2 |
- |
2 |
|
| (+) |
Weston litigation settlement |
($) |
- |
- |
- |
- |
- |
49 |
- |
- |
49 |
|
| (=) |
EBITDA before items |
($) |
182 |
175 |
200 |
557 |
170 |
135 |
163 |
190 |
658 |
|
| (/) |
Sales |
($) |
1,394 |
1,385 |
1,405 |
4,184 |
1,345 |
1,312 |
1,375 |
1,359 |
5,391 |
|
| (=) |
EBITDA margin before items |
(%) |
13% |
13% |
14% |
13% |
13% |
10% |
12% |
14% |
12% |
|
| Reconciliation of "Free cash flow" to Cash flow provided from operating activities |
||||||||||||
| Cash flow provided from operating activities |
($) |
141 |
104 |
203 |
448 |
63 |
120 |
104 |
124 |
411 |
||
| (-) |
Additions to property, plant and equipment |
($) |
(45) |
(56) |
(56) |
(157) |
(56) |
(62) |
(62) |
(62) |
(242) |
|
| (=) |
Free cash flow |
($) |
96 |
48 |
147 |
291 |
7 |
58 |
42 |
62 |
169 |
|
| "Net debt-to-total capitalization" computation |
||||||||||||
| Bank indebtedness |
($) |
8 |
15 |
3 |
13 |
2 |
6 |
15 |
||||
| (+) |
Long-term debt due within one year |
($) |
15 |
7 |
170 |
8 |
7 |
6 |
4 |
|||
| (+) |
Long-term debt |
($) |
1,490 |
1,410 |
1,202 |
1,104 |
1,102 |
1,102 |
1,510 |
|||
| (=) |
Debt |
($) |
1,513 |
1,432 |
1,375 |
1,125 |
1,111 |
1,114 |
1,529 |
|||
| (-) |
Cash and cash equivalents |
($) |
(130) |
(85) |
(134) |
(513) |
(432) |
(191) |
(655) |
|||
| (=) |
Net debt |
($) |
1,383 |
1,347 |
1,241 |
612 |
679 |
923 |
874 |
|||
| (+) |
Shareholders' equity |
($) |
2,771 |
2,826 |
2,938 |
2,842 |
2,652 |
2,681 |
2,782 |
|||
| (=) |
Total capitalization |
($) |
4,154 |
4,173 |
4,179 |
3,454 |
3,331 |
3,604 |
3,656 |
|||
| Net debt |
($) |
1,383 |
1,347 |
1,241 |
612 |
679 |
923 |
874 |
||||
| ( / ) |
Total capitalization |
($) |
4,154 |
4,173 |
4,179 |
3,454 |
3,331 |
3,604 |
3,656 |
|||
| (=) |
Net debt-to-total capitalization |
(%) |
33% |
32% |
30% |
18% |
20% |
26% |
24% |
|||
| "Earnings before items", "Earnings before items per diluted share", "EBITDA", "EBITDA margin", "EBITDA before items", "EBITDA margin before items", "Free cash flow", "Net debt" and "Net debt-to-total capitalization" have no standardized meaning prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies and therefore should not be considered in isolation or as a substitute for Net earnings, Operating income or any other earnings statement, cash flow statement or balance sheet financial information prepared in accordance with GAAP. It is important for readers to understand that certain items may be presented in different lines by different companies on their financial statements thereby leading to different measures for different companies. |
||||||||||||
| Domtar Corporation |
| The following table sets forth certain non-U.S. generally accepted accounting principles ("GAAP"), financial metrics identified in bold as "Operating income (loss) before items", "EBITDA before items" and "EBITDA margin before items" by reportable segment. |
| The Company calculates the segmented "Operating income (loss) before items" by excluding the pre-tax effect of items considered by management as not reflecting our ongoing operations. |
| Pulp and Paper |
Personal Care(1) |
Corporate |
Total |
||||||||||||||||||||
| Q1'14 |
Q2'14 |
Q3'14 |
Q4'14 |
YTD |
Q1'14 |
Q2'14 |
Q3'14 |
Q4'14 |
YTD |
Q1'14 |
Q2'14 |
Q3'14 |
Q4'14 |
YTD |
Q1'14 |
Q2'14 |
Q3'14 |
Q4'14 |
YTD |
||||
| Reconciliation of Operating income (loss) to "Operating income (loss) before items" |
|||||||||||||||||||||||
| Operating income (loss) |
($) |
69 |
69 |
109 |
- |
247 |
15 |
14 |
13 |
- |
42 |
(5) |
(4) |
(2) |
- |
(11) |
79 |
79 |
120 |
- |
278 |
||
| (+) |
Alternative fuel tax credits |
($) |
- |
- |
(18) |
- |
(18) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(18) |
- |
(18) |
|
| (+) |
Closure and restructuring costs |
($) |
- |
- |
2 |
- |
2 |
1 |
- |
- |
- |
1 |
- |
- |
- |
- |
- |
1 |
- |
2 |
- |
3 |
|
| (+) |
Impact of purchase accounting |
($) |
- |
- |
- |
- |
- |
3 |
- |
- |
- |
3 |
- |
- |
- |
- |
- |
3 |
- |
- |
- |
3 |
|
| (=) |
Operating income (loss) before items |
($) |
69 |
69 |
93 |
- |
231 |
19 |
14 |
13 |
- |
46 |
(5) |
(4) |
(2) |
- |
(11) |
83 |
79 |
104 |
- |
266 |
|
| Reconciliation of "Operating income (loss) before items" to "EBITDA before items" |
|||||||||||||||||||||||
| Operating income (loss) before items |
($) |
69 |
69 |
93 |
- |
231 |
19 |
14 |
13 |
- |
46 |
(5) |
(4) |
(2) |
- |
(11) |
83 |
79 |
104 |
- |
266 |
||
| (+) |
Depreciation and amortization |
($) |
83 |
79 |
79 |
- |
241 |
16 |
17 |
17 |
- |
50 |
- |
- |
- |
- |
- |
99 |
96 |
96 |
- |
291 |
|
| (=) |
EBITDA before items |
($) |
152 |
148 |
172 |
- |
472 |
35 |
31 |
30 |
- |
96 |
(5) |
(4) |
(2) |
- |
(11) |
182 |
175 |
200 |
- |
557 |
|
| (/) |
Sales |
($) |
1,168 |
1,160 |
1,186 |
- |
3,514 |
233 |
234 |
231 |
- |
698 |
- |
- |
- |
- |
- |
1,401 |
1,394 |
1,417 |
- |
4,212 |
|
| (=) |
EBITDA margin before items |
(%) |
13% |
13% |
15% |
- |
13% |
15% |
13% |
13% |
- |
14% |
- |
- |
- |
- |
- |
13% |
13% |
14% |
- |
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. |
|||||||||||||||||||||||
| (1) On January 2, 2014, the Company acquired 100% of the shares of Laboratorios Indas, S.A.U. in Spain. |
|||||||||||||||||||||||
| Domtar Corporation |
|||||||||||||||||||||||
| 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. |
|||||||||||||||||||||||
| 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. |
|||||||||||||||||||||||
| Pulp and Paper (1) |
Personal Care (2) |
Corporate |
Total |
||||||||||||||||||||
| Q1'13 |
Q2'13 |
Q3'13 |
Q4'13 |
YTD |
Q1'13 |
Q2'13 |
Q3'13 |
Q4'13 |
YTD |
Q1'13 |
Q2'13 |
Q3'13 |
Q4'13 |
YTD |
Q1'13 |
Q2'13 |
Q3'13 |
Q4'13 |
YTD |
||||
| Reconciliation of Operating income (loss) to "Operating income (loss) before items" |
|||||||||||||||||||||||
| Operating income (loss) |
($) |
38 |
16 |
42 |
75 |
171 |
13 |
10 |
11 |
9 |
43 |
(2) |
(56) |
(4) |
9 |
(53) |
49 |
(30) |
49 |
93 |
161 |
||
| (+) |
Impairment and write-down of property, plant and equipment |
($) |
10 |
5 |
- |
5 |
20 |
- |
- |
- |
2 |
2 |
- |
- |
- |
- |
- |
10 |
5 |
- |
7 |
22 |
|
| (-) |
Net (gain) loss on disposal of property, plant and equipment and business |
($) |
(10) |
- |
19 |
1 |
10 |
- |
- |
- |
- |
- |
- |
- |
- |
(6) |
(6) |
(10) |
- |
19 |
(5) |
4 |
|
| (+) |
Reversal of alternative fuel tax credits |
($) |
26 |
- |
- |
- |
26 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
26 |
- |
- |
- |
26 |
|
| (+) |
Weston litigation settlement |
($) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
49 |
- |
- |
49 |
- |
49 |
- |
- |
49 |
|
| (+) |
Closure and restructuring costs |
($) |
- |
10 |
- |
- |
10 |
- |
2 |
- |
- |
2 |
- |
6 |
- |
- |
6 |
- |
18 |
- |
- |
18 |
|
| (+) |
Impact of purchase accounting |
($) |
- |
- |
- |
- |
- |
- |
- |
2 |
- |
2 |
- |
- |
- |
- |
- |
- |
- |
2 |
- |
2 |
|
| (=) |
Operating income (loss) before items |
($) |
64 |
31 |
61 |
81 |
237 |
13 |
12 |
13 |
11 |
49 |
(2) |
(1) |
(4) |
3 |
(4) |
75 |
42 |
70 |
95 |
282 |
|
| Reconciliation of "Operating income (loss) before items" to "EBITDA before items" |
|||||||||||||||||||||||
| Operating income (loss) before items |
($) |
64 |
31 |
61 |
81 |
237 |
13 |
12 |
13 |
11 |
49 |
(2) |
(1) |
(4) |
3 |
(4) |
75 |
42 |
70 |
95 |
282 |
||
| (+) |
Depreciation and amortization |
($) |
89 |
87 |
84 |
85 |
345 |
6 |
6 |
9 |
10 |
31 |
- |
- |
- |
- |
- |
95 |
93 |
93 |
95 |
376 |
|
| (=) |
EBITDA before items |
($) |
153 |
118 |
145 |
166 |
582 |
19 |
18 |
22 |
21 |
80 |
(2) |
(1) |
(4) |
3 |
(4) |
170 |
135 |
163 |
190 |
658 |
|
| (/) |
Sales |
($) |
1,238 |
1,208 |
1,204 |
1,193 |
4,843 |
111 |
108 |
175 |
172 |
566 |
- |
- |
- |
- |
- |
1,349 |
1,316 |
1,379 |
1,365 |
5,409 |
|
| (=) |
EBITDA margin before items |
(%) |
12% |
10% |
12% |
14% |
12% |
17% |
17% |
13% |
12% |
14% |
- |
- |
- |
- |
- |
13% |
10% |
12% |
14% |
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. (1) On May 31, 2013, the Company acquired Xerox's paper print and media product's assets in the United States and Canada. |
|||||||||||||||||||||||
| Domtar Corporation |
||||||||||||
| 2014 |
2013 |
|||||||||||
| Q1 |
Q2 |
Q3 |
YTD |
Q1 |
Q2 |
Q3 |
Q4 |
YTD |
||||
| Pulp and Paper Segment |
||||||||||||
| Sales |
($) |
1,168 |
1,160 |
1,186 |
3,514 |
1,238 |
1,208 |
1,204 |
1,193 |
4,843 |
||
| Operating income |
($) |
69 |
69 |
109 |
247 |
38 |
16 |
42 |
75 |
171 |
||
| Depreciation and amortization |
($) |
83 |
79 |
79 |
241 |
89 |
87 |
84 |
85 |
345 |
||
| Impairment and write-down of property, plant and equipment |
($) |
- |
- |
- |
- |
10 |
5 |
- |
5 |
20 |
||
| Paper |
||||||||||||
| Paper Production |
('000 ST) |
801 |
786 |
758 |
2,345 |
793 |
829 |
813 |
810 |
3,245 |
||
| Paper Shipments - Manufactured |
('000 ST) |
804 |
779 |
776 |
2,359 |
828 |
801 |
814 |
817 |
3,260 |
||
| Communication Papers |
('000 ST) |
678 |
647 |
649 |
1,974 |
706 |
676 |
694 |
701 |
2,777 |
||
| Specialty and Packaging |
('000 ST) |
126 |
132 |
127 |
385 |
122 |
125 |
120 |
116 |
483 |
||
| Paper Shipments - Sourced from 3rd parties |
('000 ST) |
50 |
42 |
47 |
139 |
83 |
85 |
73 |
41 |
282 |
||
| Paper Shipments - Total |
('000 ST) |
854 |
821 |
823 |
2,498 |
911 |
886 |
887 |
858 |
3,542 |
||
| Pulp |
||||||||||||
| Pulp Shipments(a) |
('000 ADMT) |
318 |
336 |
367 |
1,021 |
372 |
344 |
352 |
377 |
1,445 |
||
| Hardwood Kraft Pulp |
(%) |
12% |
11% |
12% |
12% |
17% |
14% |
14% |
14% |
15% |
||
| Softwood Kraft Pulp |
(%) |
58% |
63% |
63% |
61% |
56% |
57% |
59% |
57% |
57% |
||
| Fluff Pulp |
(%) |
30% |
26% |
25% |
27% |
27% |
29% |
27% |
29% |
28% |
||
| Personal Care Segment |
||||||||||||
| Sales |
($) |
233 |
234 |
231 |
698 |
111 |
108 |
175 |
172 |
566 |
||
| Operating income |
($) |
15 |
14 |
13 |
42 |
13 |
10 |
11 |
9 |
43 |
||
| Depreciation and amortization |
($) |
16 |
17 |
17 |
50 |
6 |
6 |
9 |
10 |
31 |
||
| Impairment and write-down of property, plant and equipment |
($) |
- |
- |
- |
- |
- |
- |
- |
2 |
2 |
||
| Average Exchange Rates |
$US / $CAN |
1.103 |
1.091 |
1.089 |
1.094 |
1.009 |
1.023 |
1.039 |
1.050 |
1.030 |
||
| $CAN / $US |
0.906 |
0.917 |
0.918 |
0.914 |
0.991 |
0.977 |
0.963 |
0.953 |
0.971 |
|||
| €EUR / $US |
1.370 |
1.371 |
1.324 |
1.355 |
1.320 |
1.306 |
1.325 |
1.362 |
1.328 |
|||
| (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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