Domtar Corporation Reports Preliminary First Quarter 2015 Financial Results

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

Financial results impacted by anticipated price declines in pulp and paper

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

  • First quarter 2015 net earnings of $0.56 per share; earnings before items1 of $0.75 per share
  • Announced an increase to quarterly dividend and share buyback program
  • Paper shipments increased 2.3% when compared to the fourth quarter 2014

MONTREAL, April 30, 2015 /CNW Telbec/ - Domtar Corporation (NYSE: UFS) (TSX: UFS) today reported net earnings of $36 million ($0.56 per share) for the first quarter of 2015 compared to net earnings of $71 million ($1.10 per share) for the fourth quarter of 2014 and net earnings of $39 million ($0.60 per share) for the first quarter of 2014. Sales for the first quarter of 2015 were $1.3 billion.

Excluding items listed below, the Company had earnings before items1 of $48 million ($0.75 per share) for the first quarter of 2015 compared to earnings before items1 of $91 million ($1.41 per share) for the fourth quarter of 2014 and earnings before items1 of $42 million ($0.65 per share) for the first quarter of 2014.

First quarter 2015 items:

  • Closure and restructuring costs of $1 million ($1 million after tax);
  • Gain on disposal of property, plant and equipment of $1 million ($1 million after tax); and
  • Impairment of property, plant & equipment of $19 million ($12 million after tax).

Fourth quarter 2014 items:

  • Closure and restructuring costs of $25 million ($18 million after tax); and
  • Impairment of property, plant & equipment of $4 million ($2 million after tax).

First quarter 2014 items:

  • Closure and restructuring costs of $1 million ($1 million after tax); and
  • Negative impact of purchase accounting of $3 million ($2 million after tax).

Commenting on the first quarter results, John D. Williams, President and Chief Executive Officer, said "Results were impacted by anticipated price declines in pulp and paper. Nonetheless, our paper volumes were strong with good demand across most product groups; we operated at near capacity resulting in strong productivity which offset the impact of some weather related costs. During the quarter, we announced an increase to our share repurchase program and dividend which reflects our confidence in the execution of our growth strategy and continuing ability to generate cash flow."

Mr. Williams added, "In Personal Care, we delivered another quarter of steady progress despite a $3 million currency headwind. Same currency sales increased 3% year over year while adult incontinence volumes grew mid-single digits. We also further advanced on production and in-source savings from our new manufacturing platform. I am pleased with our overall progress but we have more work to do to deliver the sales growth and cash productivity the business is capable of delivering."

QUARTERLY REVIEW

As a result of changes in the Company's organization structure, we have changed the way we allocate certain Corporate general and administrative costs to the segments. Further, certain Corporate costs not related to segment activities, as well as the mark-to-market impact on stock-based compensation awards, will be presented on the Corporate line. As a result, we have revised our 2014 segment disclosures to conform to our 2015 presentation.

Operating income before items1 was $90 million in the first quarter of 2015 compared to an operating income before items1 of $115 million in the fourth quarter of 2014. Depreciation and amortization totaled $90 million in the first quarter of 2015.








Previously
Reported

(In millions of dollars)


1Q 2015


4Q 2014


4Q 2014

Sales


$1,348


$1,379


$1,379

Operating income (loss)








Pulp and Paper segment


75


88


76


Personal Care segment


10


11


12


Corporate


(14)


(13)


(2)


Total


71


86


86

Operating income before items1


90


115


115

Depreciation and amortization


90


93


93

The decrease in operating income before items1 in the first quarter of 2015 was the result of lower average selling prices for paper and pulp, higher raw materials costs and higher other costs. In addition, the fourth quarter of 2014 benefited from an insurance recovery of $11 million. These factors were partially offset by overall favorable exchange rates, better productivity in paper and lower costs for planned maintenance.

When compared to the fourth quarter of 2014, manufactured paper shipments were up 2.3% and pulp shipments decreased 5.4%. The shipments-to-production ratio for paper was 100% in the first quarter of 2015, compared to 101% in the fourth quarter of 2014. Paper inventories increased by 5,000 tons while pulp inventories increased by 14,000 metric tons in the first quarter of 2015 when compared to the fourth quarter of 2014.

LIQUIDITY AND CAPITAL

Cash flow provided from operating activities amounted to $127 million and capital expenditures were $70 million, resulting in free cash flow1 of $57 million for the first quarter of 2015. Domtar's net debt-to-total capitalization ratio1 stood at 30% at March 31, 2015 compared to 29% at December 31, 2014.

During the quarter, Domtar repurchased $13 million of common stock under its stock repurchase program.

OUTLOOK

Domtar paper shipments are expected to trend with market demand but our paper shipments should benefit from lower import volumes in North America. The second quarter is expected to be affected by seasonally higher maintenance activity in our pulp business and most input costs should return to more normal levels for the remainder of the year. Personal Care results are expected to benefit from market growth, cost savings from the new manufacturing platform and favorable oil-based input costs.

EARNINGS CONFERENCE CALL

The Company will hold a conference call today at 10:00 a.m. (ET) to discuss its first quarter 2015 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 second quarter 2015 earnings results on July 30, 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 our business is a network of world-class wood fiber-converting assets that produce papergrade, fluff and specialty pulp. The majority of our pulp production is consumed internally to manufacture paper and consumer products. Domtar is the largest integrated marketer and manufacturer of uncoated freesheet paper in North America with recognized brands such as Cougar®, Lynx® Opaque Ultra, Husky® Opaque Offset, First Choice®, EarthChoice® and Xerox® Paper and Specialty Media. Domtar is also a marketer and producer of a broad line of absorbent hygiene products marketed primarily under the Attends®, IncoPack® and Indasec® brand names. In 2014, Domtar had sales of $5.6 billion from some 50 countries. The Company employs approximately 9,800 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 2014 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
ended March 31

Three months
ended March 31




2015

2014




(Unaudited)




$

$






Selected Segment Information



Sales 





Pulp and Paper

1,146

1,168



Personal Care

218

233

Total for reportable segments

1,364

1,401



Intersegment sales - Pulp and Paper

(16)

(7)

Consolidated sales

1,348

1,394





Depreciation and amortization and impairment and write-down of property, plant and equipment





Pulp and Paper

74

83



Personal Care

16

16

Total for reportable segments

90

99



Impairment and write-down of property, plant and equipment - Pulp and Paper

19

-

Consolidated depreciation and amortization and impairment and write-down of property, plant and equipment

109

99






Operating income (loss)





Pulp and Paper

75

89



Personal Care

10

14



Corporate

(14)

(24)

Consolidated operating income 

71

79

Interest expense, net

26

25

Earnings before income taxes 

45

54

Income tax expense 

9

15

Net earnings

36

39





Per common share (in dollars)




Net earnings 





Basic

0.56

0.60



Diluted

0.56

0.60

Weighted average number of common and exchangeable shares outstanding (millions)





Basic

63.8

64.9



Diluted

63.9

65.0




Cash flows provided from operating activities 

127

141

Additions to property, plant and equipment

70

45






1As a result of changes in the Company's organization structure, we have changed the way we allocate certain Corporate general and administrative costs to the segments. Further, certain Corporate costs not related to segment activities, as well as the mark-to-market impact on stock-based compensation awards, will be presented on the Corporate line. As a result, we have revised our 2014 segment disclosures to conform to our 2015 presentation. (Previously reported fo numbers for Operating income (loss) are as follows; Pulp and Paper: $69M, Personal Care: $15M, Corporate: $(5)M).

Domtar Corporation


Consolidated Statements of Earnings 


(In millions of dollars, unless otherwise noted)






Three months
ended March 31

Three months
ended March 31


2015

2014


(Unaudited)


$

$




Sales

1,348

1,394

Operating expenses





Cost of sales, excluding depreciation and amortization

1,062

1,103



Depreciation and amortization

90

99



Selling, general and administrative

100

114



Impairment and write-down of property, plant and equipment

19

-



Closure and restructuring costs

1

1



Other operating loss (income), net

5

(2)



1,277

1,315

Operating income 

71

79

Interest expense, net

26

25

Earnings before income taxes 

45

54

Income tax expense 

9

15

Net earnings 

36

39





Per common share (in dollars)




Net earnings





Basic

0.56

0.60



Diluted

0.56

0.60

Weighted average number of common and exchangeable shares outstanding (millions)





Basic

63.8

64.9



Diluted

63.9

65.0

Domtar Corporation




Consolidated Balance Sheets at




(In millions of dollars)










March 31

December 31



2015

2014



(Unaudited)



$

$

Assets




Current assets





Cash and cash equivalents

183

174


Receivables, less allowances of $10 and $6

660

628


Inventories

704

714


Prepaid expenses

28

25


Income and other taxes receivable

12

54


Deferred income taxes

78

75



Total current assets

1,665

1,670





Property, plant and equipment, at cost


8,726

8,909

Accumulated depreciation


(5,731)

(5,778)



Net property, plant and equipment

2,995

3,131

Goodwill


537

567

Intangible assets, net of amortization


612

661

Other assets


151

156




Total assets

5,960

6,185





Liabilities and shareholders' equity




Current liabilities





Bank indebtedness

6

10


Trade and other payables

697

721


Income and other taxes payable

39

26


Long-term debt due within one year

169

169



Total current liabilities

911

926





Long-term debt


1,179

1,181

Deferred income taxes and other


790

810

Other liabilities and deferred credits


370

378





Shareholders' equity





Common stock

1

1


Additional paid-in capital

2,000

2,012


Retained earnings 

1,155

1,145


Accumulated other comprehensive loss

(446)

(268)



Total shareholders' equity

2,710

2,890




Total liabilities and shareholders' equity

5,960

6,185

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









Three months

ended March 31

Three months
ended March 31




2015

2014




(Unaudited)




$

$






Operating activities



Net earnings 

36

39

Adjustments to reconcile net earnings to cash flows from operating activities




Depreciation and amortization 

90

99


Deferred income taxes and tax uncertainties

(15)

-


Impairment and write-down of property, plant and equipment

19

-


Net gain on disposal of property, plant and equipment 

(1)

-


Stock-based compensation expense

2

1


Other

(1)

3

Changes in assets and liabilities, excluding the effects of acquisition of business




Receivables

(44)

9


Inventories

(12)

(14)


Prepaid expenses

2

3


Trade and other payables

(10)

(23)


Income and other taxes  

55

20


Difference between employer pension and other post-retirement contributions and pension and other post-retirement expense

2

(2)


Other assets and other liabilities

4

6


Cash flows provided from operating activities 

127

141




Investing activities



Additions to property, plant and equipment

(70)

(45)

Proceeds from disposal of property, plant and equipment 

1

-

Acquisition of business, net of cash acquired

-

(546)


Cash flows used for investing activities

(69)

(591)




Financing activities



Dividend payments

(24)

(18)

Net change in bank indebtedness

(4)

(8)

Change in revolving bank credit facility 

-

(80)

Proceeds from receivables securitization facilities

-

90

Payments on receivables securitization facilities

-

(58)

Repayment of long-term debt

(1)

-

Stock repurchase

(13)

-

Other


1

1


Cash flows used for financing activities

(41)

(73)




Net increase (decrease) in cash and cash equivalents

17

(523)

Impact of foreign exchange on cash

(8)

(2)

Cash and cash equivalents at beginning of period

174

655

Cash and cash equivalents at end of period

183

130





Supplemental cash flow information




Net cash payments for:





Interest 

27

22



Income taxes refund, net

(23)

(1)




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.











2015

2014





Q1

Q1

Q2

Q3

Q4

YTD

Reconciliation of "Earnings before items" to Net earnings 










Net earnings 

($)

36

39

40

281

71

431


(+)

Impairment and write-down of property, plant and equipment 

($)

12

-

-

-

2

2


(+)

Closure and restructuring costs

($)

1

1

-

2

18

21


(-)

Net gain on disposal of property, plant and equipment 

($)

(1)

-

-

-

-

-


(+)

Impact of purchase accounting

($)

-

2

-

-

-

2


(-)

Alternative fuel tax credits

($)

-

-

-

(18)

-

(18)


(-)

Internal Revenue Service audit settlement items

($)

-

-

-

(204)

-

(204)


(=)

Earnings before items

($)

48

42

40

61

91

234


( / )

Weighted avg. number of common and exchangeable shares outstanding (diluted)

(millions)

63.9

65.0

65.1

64.9

64.4

64.9


(=)

Earnings before items per diluted share

($)

0.75

0.65

0.61

0.94

1.41

3.61











Reconciliation of "EBITDA" and "EBITDA before items" to Net earnings 










Net earnings 

($)

36

39

40

281

71

431


(+)

Income tax expense (benefit)

($)

9

15

13

(186)

(12)

(170)


(+)

Interest expense, net

($)

26

25

26

25

27

103


(=)

Operating income 

($)

71

79

79

120

86

364


(+)

Depreciation and amortization

($)

90

99

96

96

93

384


(+)

Impairment and write-down of property, plant and equipment 

($)

19

-

-

-

4

4


(-)

Net gain on disposal of property, plant and equipment 

($)

(1)

-

-

-

-

-


(=)

EBITDA

($)

179

178

175

216

183

752


(/)

Sales

($)

1,348

1,394

1,385

1,405

1,379

5,563


(=)

EBITDA margin

(%)

13%

13%

13%

15%

13%

14%



EBITDA

($)

179

178

175

216

183

752


(-)

Alternative fuel tax credits

($)

-

-

-

(18)

-

(18)


(+)

Closure and restructuring costs

($)

1

1

-

2

25

28


(+)

Impact of purchase accounting 

($)

-

3

-

-

-

3


(=)

EBITDA before items

($)

180

182

175

200

208

765


(/)

Sales

($)

1,348

1,394

1,385

1,405

1,379

5,563


(=)

EBITDA margin before items

(%)

13%

13%

13%

14%

15%

14%











Reconciliation of "Free cash flow" to Cash flow provided from operating activities










Cash flow provided from operating activities

($)

127

141

104

203

186

634


(-)

Additions to property, plant and equipment

($)

(70)

(45)

(56)

(56)

(79)

(236)


(=)

Free cash flow

($)

57

96

48

147

107

398











"Net debt-to-total capitalization" computation










Bank indebtedness

($)

6

8

15

3

10



(+)

Long-term debt due within one year

($)

169

15

7

170

169



(+)

Long-term debt

($)

1,179

1,490

1,410

1,202

1,181



(=)

Debt

($)

1,354

1,513

1,432

1,375

1,360



(-)

Cash and cash equivalents

($)

(183)

(130)

(85)

(134)

(174)



(=)

Net debt

($)

1,171

1,383

1,347

1,241

1,186



(+)

Shareholders' equity

($)

2,710

2,771

2,826

2,938

2,890



(=)

Total capitalization

($)

3,881

4,154

4,173

4,179

4,076




Net debt

($)

1,171

1,383

1,347

1,241

1,186



( / )

Total capitalization

($)

3,881

4,154

4,173

4,179

4,076



(=)

Net debt-to-total capitalization

(%)

30%

33%

32%

30%

29%






















"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 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 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 

Personal Care 

Corporate

Total





Q1'15

Q2'15

Q3'15

Q4'15

YTD

Q1'15

Q2'15

Q3'15

Q4'15

YTD

Q1'15

Q2'15

Q3'15

Q4'15

YTD

Q1'15

Q2'15

Q3'15

Q4'15

YTD

Reconciliation of Operating income (loss) to "Operating income (loss) before items"























Operating income (loss)1

($)

75

-

-

-

75

10

-

-

-

10

(14)

-

-

-

(14)

71

-

-

-

71


(+)

Impairment and write-down of property, plant and equipment 

($)

19

-

-

-

19

-

-

-

-

-

-

-

-

-

-

19

-

-

-

19


(-)

Net gain on disposal of property, plant and equipment

($)

-

-

-

-

-

-

-

-

-

-

(1)

-

-

-

(1)

(1)

-

-

-

(1)


(+)

Closure and restructuring costs

($)

-

-

-

-

-

1

-

-

-

1

-

-

-

-

-

1

-

-

-

1


(=)

Operating income (loss) before items

($)

94

-

-

-

94

11

-

-

-

11

(15)

-

-

-

(15)

90

-

-

-

90

























Reconciliation of "Operating income (loss) before items" to "EBITDA before items"























Operating income (loss) before items

($)

94

-

-

-

94

11

-

-

-

11

(15)

-

-

-

(15)

90

-

-

-

90


(+)

Depreciation and amortization

($)

74

-

-

-

74

16

-

-

-

16

-

-

-

-

-

90

-

-

-

90


























(=)

EBITDA before items

($)

168

-

-

-

168

27

-

-

-

27

(15)

-

-

-

(15)

180

-

-

-

180


(/)

Sales

($)

1,146

-

-

-

1,146

218

-

-

-

218

-

-

-

-

-

1,364

-

-

-

1,364


(=)

EBITDA margin before items

(%)

15%

-

-

-

15%

12%

-

-

-

12%

-

-

-

-

-

13%

-

-

-

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.

























1 As a result of changes in the Company's organization structure, we have changed the way we allocate certain Corporate general and administrative costs to the segments. Further, certain Corporate costs not related to segment activities, as well as the mark-to-market impact on stock-based compensation awards, will be presented on the Corporate line. As a result, we have revised our 2014 segment disclosures to conform to our 2015 presentation. 

Domtar Corporation






















Quarterly Reconciliation of Non-GAAP Financial Measures - By Segment 2014






















(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

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)(2)

($)

89

74

119

88

370

14

12

12

11

49

(24)

(7)

(11)

(13)

(55)

79

79

120

86

364


(-)

Alternative fuel tax credits

($)

-

-

(18)

-

(18)

-

-

-

-

-

-

-

-

-

-

-

-

(18)

-

(18)


(+)

Closure and restructuring costs

($)

-

-

2

25

27

1

-

-

-

1

-

-

-

-

-

1

-

2

25

28


(+)

Impact of purchase accounting

($)

-

-

-

-

-

3

-

-

-

3

-

-

-

-

-

3

-

-

-

3


(+)

Impairment and write-down of property, plant and equipment

($)

-

-

-

4

4

-

-

-

-

-

-

-

-

-

-

-

-

-

4

4


(=)

Operating income (loss) before items

($)

89

74

103

117

383

18

12

12

11

53

(24)

(7)

(11)

(13)

(55)

83

79

104

115

381

























Reconciliation of "Operating income (loss) before items" to "EBITDA before items"























Operating income (loss) before items

($)

89

74

103

117

383

18

12

12

11

53

(24)

(7)

(11)

(13)

(55)

83

79

104

115

381


(+)

Depreciation and amortization

($)

83

79

79

78

319

16

17

17

15

65

-

-

-

-

-

99

96

96

93

384


























(=)

EBITDA before items

($)

172

153

182

195

702

34

29

29

26

118

(24)

(7)

(11)

(13)

(55)

182

175

200

208

765


(/)

Sales

($)

1,168

1,160

1,186

1,160

4,674

233

234

231

230

928

-

-

-

-

-

1,401

1,394

1,417

1,390

5,602


(=)

EBITDA margin before items

(%)

15%

13%

15%

17%

15%

15%

12%

13%

11%

13%

-

-

-

-

-

13%

13%

14%

15%

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 January 2, 2014, the Company acquired 100% of the shares of Laboratorios Indas, S.A.U. in Spain.









































(2) As a result of changes in the Company's organization structure, we have changed the way we allocate certain Corporate general and administrative costs to the segments. Further, certain Corporate costs not related to segment activities, as well as the mark-to-market impact on stock-based compensation awards, will be presented on the Corporate line. As a result, we have revised our 2014 segment disclosures to conform to our 2015 presentation.


Domtar Corporation








Supplemental Segmented Information








(In millions of dollars, unless otherwise noted)




























2015

2014





Q1

Q1

Q2

Q3

Q4

YTD

Pulp and Paper Segment









Sales

($)

1,146

1,168

1,160

1,186

1,160

4,674


Operating income(a)

($)

75

89

74

119

88

370


Depreciation and amortization

($)

74

83

79

79

78

319


Impairment and write-down of property, plant and equipment

($)

19

-

-

-

4

4












Paper









Paper Production

('000 ST)

808

801

786

758

777

3,122


Paper Shipments - Manufactured

('000 ST)

804

804

779

776

786

3,145



Communication Papers

('000 ST)

669

678

647

649

661

2,635



Specialty and Packaging

('000 ST)

135

126

132

127

125

510


Paper Shipments - Sourced from 3rd parties

('000 ST)

35

50

42

47

34

173


Paper Shipments - Total

('000 ST)

839

854

821

823

820

3,318


Pulp









Pulp Shipments(b)

('000 ADMT)

350

318

336

367

370

1,391



Hardwood Kraft Pulp

(%)

9%

12%

11%

12%

11%

12%



Softwood Kraft Pulp

(%)

65%

58%

63%

63%

60%

61%



Fluff Pulp

(%)

26%

30%

26%

25%

29%

27%





















Personal Care Segment









Sales

($)

218

233

234

231

230

928


Operating income(a)

($)

10

14

12

12

11

49


Depreciation and amortization

($)

16

16

17

17

15

65





















Average Exchange Rates

$US / $CAN

1.241

1.103

1.091

1.089

1.136

1.105




$CAN / $US

0.806

0.906

0.917

0.918

0.881

0.906




€EUR / $US

1.126

1.370

1.371

1.324

1.249

1.329












(a)

As a result of changes in the Company's organization structure, we have changed the way we allocate certain Corporate general and administrative costs to the segments. Further, certain Corporate costs not related to segment activities, as well as the mark-to-market impact on stock-based compensation awards, will be presented on the Corporate line. As a result, we have revised our 2014 segment disclosures to conform to our 2015 presentation.












(b)

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

For further information: INVESTOR RELATIONS: Nicholas Estrela, Director, Investor Relations, Tel.: 514-848-5555 x 85979; MEDIA RELATIONS, David Struhs, Vice-President, Corporate Communications and Sustainability, Tel.: 803-802-8031

RELATED LINKS
http://www.domtar.com

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