Domtar Corporation reports preliminary fourth quarter and fiscal year 2015 financial results

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(NYSE: UFS) (TSX: UFS)

Strong shipments and a solid operational performance drive fourth quarter earnings improvement         
(All financial information is in U.S. dollars, and all earnings per share results are diluted, unless otherwise noted).

  • Fourth quarter 2015 net earnings of $0.91 per share; earnings before items1 of $1.11 per share
  • Paper shipments increased 2.3% when compared to the third quarter 2015
  • Personal Care EBITDA1 23% higher when compared to the fourth quarter 2014

FORT MILL, SC, Feb. 5, 2016 /CNW Telbec/ - Domtar Corporation (NYSE: UFS) (TSX: UFS) today reported net earnings of $57 million ($0.91 per share) for the fourth quarter of 2015 compared to net earnings of $11 million ($0.17 per share) for the third quarter of 2015 and net earnings of $71 million ($1.10 per share) for the fourth quarter of 2014. Sales for the fourth quarter of 2015 were $1.3 billion.

Excluding items listed below, the Company had earnings before items1 of $70 million ($1.11 per share) for the fourth quarter of 2015 compared to earnings before items1 of $54 million ($0.86 per share) for the third quarter of 2015 and earnings before items1 of $91 million ($1.41 per share) for the fourth quarter of 2014.

Fourth quarter 2015 items:

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

Third quarter 2015 items:

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

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).

FISCAL YEAR 2015 HIGHLIGHTS

For fiscal year 2015, net earnings amounted to $142 million ($2.24 per share) compared to net earnings of $431 million ($6.64 per share) for fiscal year 2014. The Company had earnings before items1 of $211 million ($3.33 per share) for fiscal 2015 compared to earnings before items1 of $234 million ($3.61 per share) for fiscal 2014. Sales amounted to $5.3 billion for fiscal year 2015.

Commenting on the full-year results, John D. Williams, President and Chief Executive Officer, said, "I am pleased with our full-year performance. Our businesses generated strong free cash flow, and we further advanced on our Personal Care growth plan with a number of important customer wins. Our solid performance enabled us to return cash to shareholders, manage our balance sheet to preserve financial flexibility and better position Domtar for sustainable, long-term growth.  Our business transformation is still underway, but our financial results are starting to show the benefits of investments we are making in our facilities, in our people, and in our future."

QUARTERLY REVIEW

"We had our best EBITDA performance of 2015 despite the impact of lower prices. Our pulp and paper shipments were strong, and our operations ran exceptionally well with productivity gains across the mill system," said John D. Williams, President and Chief Executive Officer. "Our average production costs continue to trend lower as we focus on taking measures to run our assets more efficiently and improve our manufacturing processes."

Mr. Williams added, "In Personal Care, momentum continues to build. We had our best sales quarter to date on a same-currency basis, and we delivered strong year-over-year EBITDA growth. We have made solid progress on capturing the benefits of cost savings from our new manufacturing platform while executing on our growth commitments with top-line benefits expected in 2016."

Operating income before items1 was $115 million in the fourth quarter of 2015 compared to an operating income before items1 of $82 million in the third quarter of 2015. Depreciation and amortization totaled $89 million in the fourth quarter of 2015.








(In millions of dollars)


4Q 2015


3Q 2015








Sales


$

1,314


$

1,292

Operating income (loss)








Pulp and Paper segment



86



54


Personal Care segment



16



18


Corporate



(8)



(11)


Total



94



61

Operating income before items1



115



82

Depreciation and amortization



89



89

The increase in operating income before items1 in the fourth quarter of 2015 was the result of lower costs for planned maintenance, higher volume, higher productivity, lower raw material costs, a favorable exchange rate and lower freight and other costs. These factors were partially offset by lower average selling prices and higher selling, general and administrative expense.

When compared to the third quarter of 2015, manufactured paper shipments were up 2.3% and pulp shipments increased 15.9%. The shipments-to-production ratio for paper was 95% in the fourth quarter of 2015, compared to 98% in the third quarter of 2015. Paper inventories increased by 41,000 tons and pulp inventories decreased by 21,000 metric tons in December when compared to September levels.

LIQUIDITY AND CAPITAL

Cash flow provided from operating activities amounted to $137 million and capital expenditures were $87 million, resulting in free cash flow1 of $50 million for the fourth quarter of 2015. Domtar's net debt-to-total capitalization ratio1 stood at 30% at December 31, 2015 and at September 30, 2015.

OUTLOOK

In 2016, we expect our paper shipments to be in-line with market demand while pulp shipments should be higher due to the conversion of a paper machine to a fluff pulp line. We anticipate some volatility in softwood and fluff pulp markets due to the strengthening of the U.S. dollar and announced new capacity additions. Our 2016 results are expected to be negatively impacted by approximately $23 million, related to the fluff pulp conversion outage at our Ashdown mill. In Personal Care, new customer wins are expected to generate above-market revenue growth. Costs for raw materials are expected to marginally increase.

EARNINGS CONFERENCE CALL

The Company will hold a conference call today at 11:00 a.m. (ET) to discuss its fourth quarter and fiscal 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 first quarter 2016 earnings results on April 28, 2016, 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.

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

__________________________

About Domtar 
Domtar is a leading provider of a wide variety of fiber-based products including communication, specialty and packaging papers, market pulp and absorbent hygiene products. With approximately 9,850 employees serving more than 50 countries around the world, Domtar is driven by a commitment to turn sustainable wood fiber into useful products that people rely on every day. Domtar's annual sales are approximately $5.3 billion and its common stock is traded on the New York and Toronto Stock Exchanges. Domtar's principal executive office is in Fort Mill, South Carolina. To learn more, visit www.domtar.com.

Forward-Looking Statements
Statements in this release about our plans, expectations and future performance, including the statements by Mr. Williams and those contained under "Outlook," are "forward-looking statements." Actual results may differ materially from those suggested by these statements for a number of reasons, including changes in customer demand and pricing, changes in manufacturing costs, future acquisitions and divestitures, including facility closings, and the other reasons identified under "Risk Factors" in our Form 10-K for 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.

Domtar Corporation




Highlights




(In millions of dollars, unless otherwise noted)













Three months

ended


Three months

ended


Twelve months

ended


Twelve months

ended



December 31,


December 31,


December 31,


December 31,



2015


2014


2015


2014


(Unaudited)



$


$


$


$









Selected Segment Information








Sales










Pulp and Paper

1,110


1,160


4,458


4,674



Personal Care

221


230


869


928

Total for reportable segments

1,331


1,390


5,327


5,602



Intersegment sales

(17)


(11)


(63)


(39)

Consolidated sales

1,314


1,379


5,264


5,563

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










Pulp and Paper

73


78


297


319



Personal Care

16


15


62


65

Total for reportable segments

89


93


359


384



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

20


4


77


4

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

109


97


436


388









Operating income (loss)1










Pulp and Paper

86


88


270


352



Personal Care

16


11


61


49



Corporate

(8)


(13)


(43)


(37)

Consolidated operating income

94


86


288


364

Interest expense, net

17


27


132


103

Earnings before income taxes

77


59


156


261

Income tax expense (benefit)

20


(12)


14


(170)

Net earnings

57


71


142


431

Per common share (in dollars)









Net earnings










Basic

0.91


1.10


2.24


6.65



Diluted

0.91


1.10


2.24


6.64

Weighted average number of common shares outstanding (millions)










Basic

62.8


64.3


63.3


64.8



Diluted

62.9


64.4


63.4


64.9

Cash flows provided from operating activities

137


186


453


634

Additions to property, plant and equipment

87


79


289


236

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. (Previously reported numbers for Operating income (loss) for the three and twelve months ended December 31, 2014 are as follows; Pulp and Paper: $76M and $323M, respectively, Personal Care: $12M and $54M, respectively, Corporate: $(2)M and $(13)M, respectively).

Domtar Corporation





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
























Three months

ended


Three months

ended


Twelve months

ended


Twelve months

ended




December 31,


December 31,


December 31,


December 31,




2015


2014


2015


2014


(Unaudited)




$


$


$

$










Sales


1,314


1,379


5,264


5,563

Operating expenses











Cost of sales, excluding depreciation and amortization


1,007


1,080


4,147


4,396



Depreciation and amortization


89


93


359


384



Selling, general and administrative


100


103


394


416



Impairment and write-down of property, plant and equipment


20


4


77


4



Closure and restructuring costs


1


25


4


28



Other operating loss (income), net


3


(12)


(5)


(29)



1,220


1,293


4,976


5,199

Operating income


94


86


288


364

Interest expense, net


17


27


132


103

Earnings before income taxes


77


59


156


261

Income tax expense (benefit)


20


(12)


14


(170)

Net earnings


57


71


142


431

Per common share (in dollars)










Net earnings











Basic


0.91


1.10


2.24


6.65



Diluted


0.91


1.10


2.24


6.64

Weighted average number of common shares outstanding (millions)











Basic


62.8


64.3


63.3


64.8



Diluted


62.9


64.4


63.4


64.9

Domtar Corporation




Consolidated Balance Sheets at




(In millions of dollars)














December 31,


December 31,



2015


2014



(Unaudited)

Assets


$


$

Current assets






Cash and cash equivalents


126


174


Receivables, less allowances of $6 and $6


627


628


Inventories


766


714


Prepaid expenses


21


25


Income and other taxes receivable


14


54


Deferred income taxes



75



Total current assets


1,554


1,670

Net property, plant and equipment


2,835


3,131

Goodwill


539


567

Intangible assets, net of amortization


601


661

Other assets


134


156



Total assets


5,663


6,185

Liabilities and shareholders' equity





Current liabilities






Bank indebtedness



10


Trade and other payables


720


721


Income and other taxes payable


27


26


Long-term debt due within one year


41


169



Total current liabilities


788


926

Long-term debt


1,219


1,181

Deferred income taxes and other


654


810

Other liabilities and deferred credits


350


378

Shareholders' equity






Common stock


1


1


Additional paid-in capital


1,966


2,012


Retained earnings


1,186


1,145


Accumulated other comprehensive loss


(501)


(268)



Total shareholders' equity


2,652


2,890




Total liabilities and shareholders' equity


5,663


6,185

Domtar Corporation



Consolidated Statements of Cash Flows



(In millions of dollars)















For the twelve months ended



December 31, 2015


December 31, 2014



(Unaudited)



$


$

Operating activities





Net earnings


142


431

Adjustments to reconcile net earnings to cash flows from operating activities







Depreciation and amortization


359


384



Deferred income taxes and tax uncertainties


(56)


(201)



Impairment and write-down of property, plant and equipment


77


4



Net gains on disposal of property, plant and equipment


(15)




Stock-based compensation expense


5


4



Other


4


3

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







Receivables


(22)


39



Inventories


(84)


(29)



Prepaid expenses


5


1



Trade and other payables



(33)



Income and other taxes


38


12



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


(1)


16



Other assets and other liabilities


1


3


Cash flows provided from operating activities


453


634

Investing activities





Additions to property, plant and equipment


(289)


(236)

Proceeds from disposals of property, plant and equipment


36


1

Acquisition of business, net of cash acquired



(546)

Other


9


(5)


Cash flows used for investing activities


(244)


(786)

Financing activities





Dividend payments


(100)


(84)

Stock repurchase


(50)


(38)

Net change in bank indebtedness


(11)


(6)

Change in revolving bank credit facility


50


(160)

Proceeds from receivables securitization facilities



90

Payments on receivables securitization facilities



(129)

Issuance of long-term debt


300


Repayment of long-term debt


(439)


(4)

Other


1


5


Cash flows used for financing activities


(249)


(326)

Net decrease in cash and cash equivalents


(40)


(478)

Impact of foreign exchange on cash


(8)


(3)

Cash and cash equivalents at beginning of year


174


655

Cash and cash equivalents at end of year


126


174

Supplemental cash flow information






Net cash payments for:







Interest (including $40 million of redemption premiums in 2015)


133


92



Income taxes paid, net


34


18

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


Q2


Q3


Q4


YTD


Q1


Q2


Q3


Q4


YTD

Reconciliation of "Earnings before items" to Net earnings


























Net earnings


($)


36


38


11


57


142


39


40


281


71


431


(+)

Impairment and write-down of property, plant and equipment


($)


12


11


12


12


47





2


2


(+)

Closure and restructuring costs


($)


1


1


1


1


4


1



2


18


21


(-)

Net gains on disposal of property, plant and equipment


($)


(1)


(11)




(12)







(+)

Impact of purchase accounting


($)







2





2


(-)

Alternative fuel tax credits


($)









(18)



(18)


(+)

Debt refinancing costs


($)




30



30







(-)

Internal Revenue Service audit settlement items


($)









(204)



(204)


(=)

Earnings before items


($)


48


39


54


70


211


42


40


61


91


234


(/)

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


(millions)


63.9


63.7


63.0


62.9


63.4


65.0


65.1


64.9


64.4


64.9


(=)

Earnings before items per diluted share


($)


0.75


0.61


0.86


1.11


3.33


0.65


0.61


0.94


1.41


3.61


























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

























Net earnings


($)


36


38


11


57


142


39


40


281


71


431


(+)

Income tax expense (benefit)


($)


9


(1)


(14)


20


14


15


13


(186)


(12)


(170)


(+)

Interest expense, net


($)


26


25


64


17


132


25


26


25


27


103


(=)

Operating income


($)


71


62


61


94


288


79


79


120


86


364


(+)

Depreciation and amortization


($)


90


91


89


89


359


99


96


96


93


384


(+)

Impairment and write-down of property, plant and equipment


($)


19


18


20


20


77





4


4


(-)

Net gains on disposal of property, plant and equipment


($)


(1)


(14)




(15)







(=)

EBITDA


($)


179


157


170


203


709


178


175


216


183


752


(/)

Sales


($)


1,348


1,310


1,292


1,314


5,264


1,394


1,385


1,405


1,379


5,563


(=)

EBITDA margin


(%)


13%


12%


13%


15%


13%


13%


13%


15%


13%


14%



EBITDA


($)


179


157


170


203


709


178


175


216


183


752


(-)

Alternative fuel tax credits


($)









(18)



(18)


(+)

Closure and restructuring costs


($)


1


1


1


1


4


1



2


25


28


(+)

Impact of purchase accounting


($)







3





3


(=)

EBITDA before items


($)


180


158


171


204


713


182


175


200


208


765


(/)

Sales


($)


1,348


1,310


1,292


1,314


5,264


1,394


1,385


1,405


1,379


5,563


(=)

EBITDA margin before items


(%)


13%


12%


13%


16%


14%


13%


13%


14%


15%


14%


























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

























Cash flow provided from operating activities


($)


127


122


67


137


453


141


104


203


186


634


(-)

Additions to property, plant and equipment


($)


(70)


(66)


(66)


(87)


(289)


(45)


(56)


(56)


(79)


(236)


(=)

Free cash flow


($)


57


56


1


50


164


96


48


147


107


398


























"Net debt-to-total capitalization" computation

























Bank indebtedness


($)


6


1


1





8


15


3


10




(+)

Long-term debt due within one year


($)


169


169


42


41




15


7


170


169




(+)

Long-term debt


($)


1,179


1,178


1,245


1,219




1,490


1,410


1,202


1,181




(=)

Debt


($)


1,354


1,348


1,288


1,260




1,513


1,432


1,375


1,360




(-)

Cash and cash equivalents


($)


(183)


(207)


(128)


(126)




(130)


(85)


(134)


(174)




(=)

Net debt


($)


1,171


1,141


1,160


1,134




1,383


1,347


1,241


1,186




(+)

Shareholders' equity


($)


2,710


2,761


2,659


2,652




2,771


2,826


2,938


2,890




(=)

Total capitalization


($)


3,881


3,902


3,819


3,786




4,154


4,173


4,179


4,076





Net debt


($)


1,171


1,141


1,160


1,134




1,383


1,347


1,241


1,186




(/)

Total capitalization


($)


3,881


3,902


3,819


3,786




4,154


4,173


4,179


4,076




(=)

Net debt-to-total capitalization


(%)


30%


29%


30%


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


55


54


86


270


10


17


18


16


61


(14)


(10)


(11)


(8)


(43)


71


62


61


94


288


(+)

Impairment and write-down of property, plant and equipment


($)


19


18


20


20


77












19


18


20


20


77


(-)

Net gains on disposal of property, plant and equipment


($)



(14)




(14)







(1)





(1)


(1)


(14)




(15)



(+)

Closure and restructuring costs


($)



1


1


1


3


1





1







1


1


1


1


4


(=)

Operating income (loss) before items


($)


94


60


75


107


336


11


17


18


16


62


(15)


(10)


(11)


(8)


(44)


90


67


82


115


354














































Reconciliation of "Operating income (loss)











































before items" to "EBITDA before items"



Operating income (loss) before items


($)


94


60


75


107


336


11


17


18


16


62


(15)


(10)


(11)


(8)


(44)


90


67


82


115


354


(+)

Depreciation and amortization


($)


74


75


75


73


297


16


16


14


16


62







90


91


89


89


359















































(=)

EBITDA before items


($)


168


135


150


180


633


27


33


32


32


124


(15)


(10)


(11)


(8)


(44)


180


158


171


204


713


(/)

Sales


($)


1,146


1,110


1,092


1,110


4,458


218


216


214


221


869







1,364


1,326


1,306


1,331


5,327


(=)

EBITDA margin before items


(%)


15%


12%


14%


16%


14%


12%


15%


15%


14%


14%







13%


12%


13%


15%


13%

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

(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


101


88


352


14


12


12


11


49


(24)


(7)


7


(13)


(37)


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,


($)





4


4















4


4

plant and equipment


(=)

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

Q2

Q3

Q4

YTD

Q1

Q2

Q3

Q4

YTD

Pulp and Paper Segment













Sales

($)

1,146

1,110

1,092

1,110

4,458

1,168

1,160

1,186

1,160

4,674


Operating income (a)

($)

75

55

54

86

270

89

74

101

88

352


Depreciation and amortization

($)

74

75

75

73

297

83

79

79

78

319


Impairment and write-down of property, plant and equipment

($)

19

18

20

20

77

4

4














Paper













Paper Production

('000 ST)

808

806

794

837

3,245

801

786

758

777

3,122


Paper Shipments -Manufactured

('000 ST)

804

783

779

797

3,163

807

779

777

785

3,148



Communication Papers

('000 ST)

669

653

648

669

2,639

681

647

649

660

2,637



Specialty and Packaging

('000 ST)

135

130

131

128

524

126

132

128

125

511


Paper Shipments -Sourced from 3rd parties

('000 ST)

35

29

35

28

127

47

42

46

35

170


Paper Shipments - Total

('000 ST)

839

812

814

825

3,290

854

821

823

820

3,318


Pulp













Pulp Shipments(b)

('000 ADMT)

350

345

333

386

1,414

318

336

367

370

1,391



Hardwood Kraft Pulp

(%)

9%

8%

8%

8%

8%

12%

11%

12%

11%

12%



Softwood Kraft Pulp

(%)

65%

65%

65%

69%

66%

58%

63%

63%

60%

61%



Fluff Pulp

(%)

26%

27%

27%

23%

26%

30%

26%

25%

29%

27%














Personal Care Segment













Sales

($)

218

216

214

221

869

233

234

231

230

928


Operating income(a)

($)

10

17

18

16

61

14

12

12

11

49


Depreciation and amortization

($)

16

16

14

16

62

16

17

17

15

65













Average Exchange Rates

$US / $CAN

1.241

1.229

1.309

1.335

1.279

1.103

1.091

1.089

1.136

1.105


$CAN / $US

0.806

0.813

0.765

0.749

0.782

0.906

0.917

0.918

0.881

0.905


€ / $US

1.126

1.106

1.112

1.095

1.110

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 Services and Sustainability, Tel.: 803-802-8031

RELATED LINKS
http://www.domtar.com

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Domtar Corporation

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