Domtar Corporation reports preliminary second quarter 2015 financial results

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

Strong operational results in Pulp and Paper and Personal Care
(All financial information is in U.S. dollars, and all earnings per share results are diluted, unless otherwise noted).

  • Second quarter 2015 net earnings of $0.60 per share; earnings before items1 of $0.61 per share
  • Cash flow from operating activities of $122 million
  • Sales and margin momentum building in Personal Care

FORT MILL, SC, July 30, 2015 /CNW Telbec/ - Domtar Corporation (NYSE: UFS) (TSX: UFS) today reported net earnings of $38 million ($0.60 per share) for the second quarter of 2015 compared to net earnings of $36 million ($0.56 per share) for the first quarter of 2015 and net earnings of $40 million ($0.61 per share) for the second quarter of 2014. Sales for the second quarter of 2015 were $1.3 billion.

Excluding items listed below, the Company had earnings before items1 of $39 million ($0.61 per share) for the second quarter of 2015 compared to earnings before items1 of $48 million ($0.75 per share) for the first quarter of 2015 and earnings before items1 of $40 million ($0.61 per share) for the second quarter of 2014.

Second quarter 2015 items:

  • Closure and restructuring costs of $1 million ($1 million after tax);
  • Gain on disposal of property, plant and equipment of $14 million ($11 million after tax); and
  • Impairment of property, plant & equipment of $18 million ($11 million after tax).

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).

Second quarter 2014 items:

  • None

"Our pulp and paper business performed largely in-line with expectations. Our operations ran well despite the seasonally high level of scheduled maintenance at our mills. The flooding in the U.S. South negatively impacted some of our wood costs and supply, but production curtailments were limited," said John D. Williams, President and CEO. "Our paper shipments year-to-date are outperforming the broader North American uncoated freesheet market by 2.3%. As the trade case progresses, we will continue to monitor further opportunities resulting from lower cut-size imports while continuing to balance our capacity versus our customer demand."

Mr. Williams added, "Personal Care turned in a solid performance. Same currency sales increased 3% year over year while our cost savings program continued to deliver according to plan, driving a 300 basis-point margin improvement. Momentum in the business is growing, and we are operating and executing with more consistency. We remain focused on sharpening our strategies and capabilities that will deliver sustainable growth and value creation in this segment."  

QUARTERLY REVIEW

Operating income before items1 was $67 million in the second quarter of 2015 compared to an operating income before items1 of $90 million in the first quarter of 2015. Depreciation and amortization totaled $91 million in the second quarter of 2015.

(In millions of dollars)


2Q 2015


1Q 2015








Sales


$

1,310


$

1,348

Operating income (loss)








Pulp and Paper segment



55



75


Personal Care segment



17



10


Corporate



(10)



(14)


Total



62



71

Operating income before items1



67



90

Depreciation and amortization



91



90

The decrease in operating income before items1 in the second quarter of 2015 was the result of higher costs for planned maintenance, lower paper and pulp prices, lower paper and pulp shipments, higher freight costs and overall unfavorable exchange rates. These factors were partially offset by lower raw material and other costs and lower selling, general and administrative expenses. In addition, the first quarter was impacted by a bad debt expense.

When compared to the first quarter of 2015, manufactured paper shipments were down 2.6% and pulp shipments decreased 1.4%. The shipments-to-production ratio for paper was 97% in the second quarter of 2015, compared to 100% in the first quarter of 2015. Paper inventories increased by 23,000 tons while pulp inventories decreased by 15,000 metric tons in June when compared to March levels.

LIQUIDITY AND CAPITAL

Cash flow provided from operating activities amounted to $122 million and capital expenditures were $66 million, resulting in free cash flow1 of $56 million for the second quarter of 2015. Domtar's net debt-to-total capitalization ratio1 stood at 29% at June 30, 2015 compared to 30% at March 31, 2015.

During the quarter, Domtar repurchased $17 million of common stock under its stock repurchase program.

OUTLOOK

Looking into the second half of 2015, Domtar paper shipments are expected to trend with market demand and should benefit from lower import volumes in North America. We expect some short-term pricing volatility in pulp, as normal seasonal factors in certain markets take hold. Inflation on input costs is expected to be relatively flat; fiber costs will remain high in certain markets, but are not expected to increase further, while energy costs should remain favorable. Personal Care is expected to benefit from further cost savings and market growth, but the segment will be impacted by some seasonality in the third quarter.

EARNINGS CONFERENCE CALL

The Company will hold a conference call today at 10:00 a.m. (ET) to discuss its second 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 third quarter 2015 earnings results on October 29, 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  

June 30,

2015


Three months
ended  

June 30,

2014


Six months
ended

June 30,

2015


Six months
ended

June 30,

2014













(Unaudited)



$


$


$


$










Selected Segment Information









Sales 











Pulp and Paper


1,110


1,160


2,256


2,328



Personal Care


216


234


434


467

Total for reportable segments


1,326


1,394


2,690


2,795



Intersegment sales


(16)


(9)


(32)


(16)

Consolidated sales


1,310


1,385


2,658


2,779

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











Pulp and Paper


75


79


149


162



Personal Care


16


17


32


33

Total for reportable segments


91


96


181


195



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


18



37













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


109


96


218


195










Operating income (loss)1











Pulp and Paper


55


74


130


163



Personal Care


17


12


27


26



Corporate


(10)


(7)


(24)


(31)

Consolidated operating income 


62


79


133


158

Interest expense, net 


25


26


51


51

Earnings before income taxes 


37


53


82


107

Income tax (benefit) expense 


(1)


13


8


28

Net earnings 


38


40


74


79

Per common share (in dollars)










Net earnings











Basic


0.60


0.62


1.16


1.22



Diluted


0.60


0.61


1.16


1.22

Weighted average number of common shares outstanding (millions)











Basic


63.6


65.0


63.7


64.9



Diluted


63.7


65.1


63.8


65.0

Cash flows provided from operating activities 


122


104


249


245

Additions to property, plant and equipment


66


56


136


101

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 numbers for Operating income (loss) for the three and six months ended June 30, 2014 are as follows; Pulp and Paper: $69M and $138M, respectively, Personal Care: $14M and $29M, respectively, Corportate: $(4)M and $(9)M, respectively).

Domtar Corporation

Consolidated Statements of Earnings 

(In millions of dollars, unless otherwise noted)




Three months
ended  

June 30,

2015


Three months
ended  

June 30,

2014


Six months
ended  

June 30,

2015


Six months
ended  

June 30,

2014













(Unaudited)



$


$


$


$










Sales


1,310


1,385


2,658


2,779

Operating expenses











Cost of sales, excluding depreciation and amortization


1,052


1,108


2,114


2,211



Depreciation and amortization


91


96


181


195



Selling, general and administrative


99


100


199


214



Impairment and write-down of property, plant and equipment


18



37




Closure and restructuring costs


1



2


1



Other operating (income) loss, net


(13)


2


(8)




1,248


1,306


2,525


2,621

Operating income


62


79


133


158

Interest expense, net 


25


26


51


51

Earnings before income taxes 


37


53


82


107

Income tax (benefit) expense 


(1)


13


8


28

Net earnings 


38


40


74


79

Per common share (in dollars)










Net earnings











Basic


0.60


0.62


1.16


1.22



Diluted


0.60


0.61


1.16


1.22

Weighted average number of common shares outstanding (millions)











Basic


63.6


65.0


63.7


64.9



Diluted


63.7


65.1


63.8


65.0

Domtar Corporation

Consolidated Balance Sheets at

(In millions of dollars)











June 30,


December 31,



2015


2014



(Unaudited)



$


$

Assets





Current assets






Cash and cash equivalents


207


174


Receivables, less allowances of $10 and $6


640


628


Inventories


721


714


Prepaid expenses


36


25


Income and other taxes receivable


13


54


Deferred income taxes


78


75



Total current assets


1,695


1,670


Property, plant and equipment, at cost


8,817


8,909


Accumulated depreciation


(5,858)


(5,778)



Net property, plant and equipment


2,959


3,131

Goodwill 


546


567

Intangible assets, net of amortization 


621


661

Other assets


142


156



Total assets


5,963


6,185

Liabilities and shareholders' equity





Current liabilities






Bank indebtedness


1


10


Trade and other payables


687


721


Income and other taxes payable


36


26


Long-term debt due within one year


169


169



Total current liabilities


893


926

Long-term debt 


1,178


1,181

Deferred income taxes and other


765


810

Other liabilities and deferred credits


366


378

Shareholders' equity






Common stock


1


1


Additional paid-in capital


1,985


2,012


Retained earnings


1,168


1,145


Accumulated other comprehensive loss


(393)


(268)



Total shareholders' equity


2,761


2,890




Total liabilities and shareholders' equity


5,963


6,185

Domtar Corporation





Consolidated Statements of Cash Flows





(In millions of dollars)












For the six months ended



June 30, 2015


June 30, 2014



(Unaudited)



$


$

Operating activities





Net earnings 


74


79

Adjustments to reconcile net earnings to cash flows from operating activities







Depreciation and amortization


181


195



Deferred income taxes and tax uncertainties


(32)


(6)



Impairment and write-down of property, plant and equipment


37




Net gains on disposal of property, plant and equipment


(15)




Stock-based compensation expense


3


3



Other



6

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







Receivables



24



Inventories


(23)


(18)



Prepaid expenses


(10)


(9)



Trade and other payables


(18)


(43)



Income and other taxes


46


23



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


3


(6)



Other assets and other liabilities


3


(3)


Cash flows provided from operating activities


249


245

Investing activities





Additions to property, plant and equipment


(136)


(101)

Proceeds from disposals of property, plant and equipment


7


1

Acquisition of business, net of cash acquired



(546)

Other


9


-


Cash flows used for investing activities


(120)


(646)

Financing activities





Dividend payments


(50)


(36)

Stock repurchase


(30)


Net change in bank indebtedness


(9)


Change in revolving bank credit facility



(140)

Proceeds from receivables securitization facilities



90

Payments on receivables securitization facilities



(84)

Repayment of long-term debt


(2)


(3)

Other


1


4


Cash flows used for financing activities


(90)


(169)

Net increase (decrease) in cash and cash equivalents  


39


(570)

Impact of foreign exchange on cash


(6)


Cash and cash equivalents at beginning of period


174


655

Cash and cash equivalents at end of period


207


85

Supplemental cash flow information






Net cash payments for:







Interest


48


44



Income taxes paid, net


2


19

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


YTD


Q1


Q2


Q3


Q4


YTD

Reconciliation of "Earnings before items" to Net earnings 





















Net earnings 


($)


36


38


74


39


40


281


71


431


(+)

Impairment and write-down of property, plant and equipment 


($)


12


11


23





2


2


(+)

Closure and restructuring costs


($)


1


1


2


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)


(-)

Internal Revenue Service audit settlement items


($)







(204)



(204)


(=)

Earnings before items


($)


48


39


87


42


40


61


91


234


(/)

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


(millions)


63.9


63.7


63.8


65.0


65.1


64.9


64.4


64.9


(=)

Earnings before items per diluted share


($)


0.75


0.61


1.36


0.65


0.61


0.94


1.41


3.61






















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





















Net earnings 


($)


36


38


74


39


40


281


71


431


(+)

Income tax expense (benefit)


($)


9


(1)


8


15


13


(186)


(12)


(170)


(+)

Interest expense, net


($)


26


25


51


25


26


25


27


103


(=)

Operating income 


($)


71


62


133


79


79


120


86


364


(+)

Depreciation and amortization


($)


90


91


181


99


96


96


93


384


(+)

Impairment and write-down of property, plant and equipment 


($)


19


18


37





4


4


(-)

Net gains on disposal of property, plant and equipment 


($)


(1)


(14)


(15)







(=)

EBITDA


($)


179


157


336


178


175


216


183


752


(/)

Sales


($)


1,348


1,310


2,658


1,394


1,385


1,405


1,379


5,563


(=)

EBITDA margin


(%)


13%


12%


13%


13%


13%


15%


13%


14%



EBITDA


($)


179


157


336


178


175


216


183


752


(-)

Alternative fuel tax credits


($)







(18)



(18)


(+)

Closure and restructuring costs


($)


1


1


2


1



2


25


28


(+)

Impact of purchase accounting 


($)





3





3


(=)

EBITDA before items


($)


180


158


338


182


175


200


208


765


(/)

Sales


($)


1,348


1,310


2,658


1,394


1,385


1,405


1,379


5,563


(=)

EBITDA margin before items


(%)


13%


12%


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


122


249


141


104


203


186


634


(-)

Additions to property, plant and equipment


($)


(70)


(66)


(136)


(45)


(56)


(56)


(79)


(236)


(=)

Free cash flow


($)


57


56


113


96


48


147


107


398






















"Net debt-to-total capitalization" computation





















Bank indebtedness


($)


6


1




8


15


3


10




(+)

Long-term debt due within one year


($)


169


169




15


7


170


169




(+)

Long-term debt


($)


1,179


1,178




1,490


1,410


1,202


1,181




(=)

Debt


($)


1,354


1,348




1,513


1,432


1,375


1,360




(-)

Cash and cash equivalents


($)


(183)


(207)




(130)


(85)


(134)


(174)




(=)

Net debt


($)


1,171


1,141




1,383


1,347


1,241


1,186




(+)

Shareholders' equity


($)


2,710


2,761




2,771


2,826


2,938


2,890




(=)

Total capitalization


($)


3,881


3,902




4,154


4,173


4,179


4,076





Net debt


($)


1,171


1,141




1,383


1,347


1,241


1,186




(/)

Total capitalization


($)


3,881


3,902




4,154


4,173


4,179


4,076




(=)

Net debt-to-total capitalization


(%)


30%


29%




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




130


10


17




27


(14)


(10)




(24)


71


62




133


(+)

Impairment and write-down of property,
plant and equipment 


($)


19


18




37












19


18




37


(-)

Net gains on disposal of property, plant and equipment


($)



(14)




(14)







(1)





(1)


(1)


(14)




(15)


(+)

Closure and restructuring costs


($)



1




1


1





1







1


1




2


(=)

Operating income (loss) before items


($)


94


60




154


11


17




28


(15)


(10)




(25)


90


67




157














































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













































Operating income (loss) before items


($)


94


60




154


11


17




28


(15)


(10)




(25)


90


67




157


(+)

Depreciation and amortization


($)


74


75




149


16


16




32







90


91




181















































(=)

EBITDA before items


($)


168


135




303


27


33




60


(15)


(10)




(25)


180


158




338


(/)

Sales


($)


1,146


1,110




2,256


218


216




434







1,364


1,326




2,690


(=)

EBITDA margin before items


(%)


15%


12%




13%


12%


15%




14%







13%


12%




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 allocated 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, 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


Q2


YTD


Q1


Q2


Q3


Q4


YTD

Pulp and Paper Segment




















Sales


($)


1,146


1,110


2,256


1,168


1,160


1,186


1,160


4,674


Operating income(a)


($)


75


55


130


89


74


101


88


352


Depreciation and amortization


($)


74


75


149


83


79


79


78


319


Impairment and write-down of property, plant and equipment


($)


19


18


37





4


4





















Paper




















Paper Production


('000 ST)


808


806


1,614


801


786


758


777


3,122


Paper Shipments - Manufactured


('000 ST)


804


783


1,587


804


779


776


786


3,145



Communication Papers


('000 ST)


669


653


1,322


678


647


649


661


2,635



Specialty and Packaging


('000 ST)


135


130


265


126


132


127


125


510


Paper Shipments - Sourced from 3rd parties


('000 ST)


35


29


64


50


42


47


34


173


Paper Shipments - Total


('000 ST)


839


812


1,651


854


821


823


820


3,318


Pulp




















Pulp Shipments(b)


('000 ADMT)


350


345


695


318


336


367


370


1,391



Hardwood Kraft Pulp


(%)


9%


8%


9%


12%


11%


12%


11%


12%



Softwood Kraft Pulp


(%)


65%


65%


65%


58%


63%


63%


60%


61%



Fluff Pulp


(%)


26%


27%


26%


30%


26%


25%


29%


27%




















Personal Care Segment




















Sales


($)


218


216


434


233


234


231


230


928


Operating income(a)


($)


10


17


27


14


12


12


11


49


Depreciation and amortization


($)


16


16


32


16


17


17


15


65




















Average Exchange Rates


$US / $CAN


1.241


1.229


1.235


1.103


1.091


1.089


1.136


1.105



$CAN / $US


0.806


0.813


0.810


0.906


0.917


0.918


0.881


0.906



€ / $US


1.126


1.106


1.116


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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