DOMTAR CORPORATION REPORTS PRELIMINARY FIRST QUARTER 2011 FINANCIAL RESULTS
Strong paper shipments and productivity gains across the mill system
drive solid results
(All financial information is in U.S. dollars, and all earnings (loss)
per share results are diluted, unless otherwise noted.)
-- First quarter net earnings of $3.14 per share, earnings before
items1 of $3.25 per share
-- EBITDA before items1 of $311 million
-- Paper shipments increase 7.4% compared to fourth quarter 2010
TICKER SYMBOL
(NYSE : UFS) (TSX: UFS)
MONTREAL, April 28 /PRNewswire-FirstCall/ – Domtar Corporation (NYSE: UFS) (TSX:
UFS) today reported net earnings of $133Â million ($3.14 per share) for
the first quarter of 2011 compared to net earnings of $325Â million
($7.59 per share) for the fourth quarter of 2010 and net earnings of
$58Â million ($1.34Â per share) for the first quarter of 2010. Sales for
the first quarter of 2011 amounted to $1.4Â billion. Excluding items
listed below, the Company had earnings before items(1) of $138 million ($3.25 per share) for the first quarter of 2011
compared to earnings before items(1) of $103 million ($2.41 per share) for the fourth quarter of 2010 and
earnings before items(1) of $69Â million ($1.59 per share) for the first quarter of 2010.
First quarter 2011 items:
-- Closure and restructuring costs of $11 million ($8 million
after tax);
-- Gain on the sale of property, plant and equipment and business
of $7 million ($5 million after tax); and
-- Charge of $3 million ($2 million after tax) related to the
impairment and write-down of property, plant and equipment.
Fourth quarter 2010 items:
-- Benefit from cellulosic biofuel producer income tax credit of
$127 million;
-- Benefit from reversal of a valuation allowance on Canadian
deferred income tax assets of $100 million;
-- Costs for debt repurchase of $7 million ($4 million after tax);
and
-- Closure and restructuring costs of $1 million ($1 million after
tax).
First quarter 2010 items:
-- Refundable excise tax credit for the production and use of
alternative bio fuel mixtures of $25 million ($18 million after
tax);
-- Charge of $22 million ($16 million after tax) related to the
impairment and write-down of property, plant and equipment;
-- Closure and restructuring costs of $20 million ($14 million
after tax); and
-- Gain on sale of property, plant and equipment of $1 million ($1
million after tax).
“Our operations ran well in the first quarter and we were able to
overcome the production related issues that affected our fourth quarter
2010 financial results. We experienced strong paper shipments and
continued momentum in pulp markets while keeping our costs under
control. The implementation of the recently announced price increases
in pulp and for numerous paper grades will help offset the inflation in
input costs stemming from rising global materials prices,” said John D. Williams, President and Chief Executive Officer.
Commenting on capital allocation, Mr. Williams said, “We also resumed our stock repurchase activity in the first quarter and
in doing so, we have returned $80 million to shareholders through the
combination of stock buyback and regular dividend. Stock repurchases
continue to be our preferred method to returning capital to
shareholders.”
QUARTERLY REVIEW
Operating income before items(1) was $218Â million in the first quarter of 2011 compared to an operating
income before items(1) of $156Â million in the fourth quarter of 2010. Depreciation and
amortization totaled $93 million in the first quarter of 2011. When
compared to the fourth quarter of 2010, paper shipments increased 7%
while pulp shipments remained stable. The shipments-to-production ratio
for paper was 102% in the first quarter of 2011, compared to 97% in the
fourth quarter of 2010. Paper inventories declined by 13,000 tons while
pulp inventories increased by 3,000 metric tons as at the end of March,
compared to year-end levels. Paper deliveries of Ariva(TM), Domtar’s paper merchants business, increased 1% when compared to the
fourth quarter of 2010.
The increase in operating income before items(1) in the first quarter of 2011 was the result of higher paper shipments,
higher average selling prices in pulp and lower maintenance costs.
These factors were partially offset by higher unit costs for chemicals,
lower average selling prices in paper and the negative impact of a
strong Canadian dollar including hedging.
(In millions of dollars) 1Q 2011 4Q 2010
Sales 1,423 1,373
Operating income 211 155
Operating income before items1 218 156
Depreciation and amortization 93 95
LIQUIDITY AND CAPITAL
Cash flow provided from operating activities amounted to $148 million
and capital expenditures amounted to $13 million, resulting in free
cash flow(1) of $135 million in the first quarter of 2011. Domtar’s net
debt-to-total capitalization ratio(1) stood at 7% at March 31, 2011 compared to 9% at December 31, 2010.
Under its stock repurchase program, Domtar repurchased 789,957 shares of
common stock at an average price of $87.79 during the first quarter of
2011. Since the implementation of the program, the Company has
repurchased a total of 1,528,004 shares of common stock at an average
price of $74.35.
OUTLOOK
Paper shipments are expected to decline moderately throughout 2011. The
announced closure of a paper machine at our Ashdown, Arkansas mill will
help balance our production to our customer demand. Rising commodity
and energy prices are expected to put pressure on some of our input
costs in 2011 however we are expected to benefit from our recently
announced price increases for softwood pulp and for commercial printing
and converting papers. We will continue to manage our business
conservatively, looking to grow profitably and to create sustainable
long-term shareholder value.
EARNINGS CONFERENCE CALL
The Company will hold a conference call today at 10:00 a.m. (ET) to
discuss its first quarter 2011 financial results. Financial analysts
are invited to participate in the call by dialing at least 10 minutes
before start time 1 (866) 321-8231 (toll free – North America) or 1
(416) 642-5213 (International), while media and other interested
individuals are invited to listen to the live webcast on the Domtar
Corporation website at www.domtar.com.
The Company will release its second quarter 2011 earnings on July 28,
2011 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/TSX:UFS) is the largest integrated manufacturer
and marketer of uncoated freesheet paper in North America and the
second largest in the world based on production capacity, and is also a
manufacturer of papergrade, fluff and specialty pulp. The Company
designs, manufactures, markets and distributes a wide range of
business, commercial printing and publishing as well as converting and
specialty papers including recognized brands such as Cougar(®), Lynx(®) Opaque Ultra, Husky(®) Opaque Offset, First Choice(®) and Domtar EarthChoice(®) Office Paper, part of a family of environmentally and socially
responsible papers. Domtar owns and operates Ariva(TM,) an extensive network of strategically located paper distribution
facilities. The Company employs approximately 8,500Â people. To learn
more, visit www.domtar.com.
Forward-Looking Statements
All statements in this news release that are not based on historical
fact are “forward-looking statements.” While management has based any
forward-looking statements contained herein on its current
expectations, the information on which such expectations were based may
change. These forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of
risks, uncertainties, and other factors, many of which are outside of
our control that could cause actual results to materially differ from
such statements. Such risks, uncertainties, and other factors include,
but are not necessarily limited to, those set forth under the captions
“Forward-Looking Statements” and “Risk Factors” of the latest Form 10-K
filed with the SEC as periodically updated by subsequently filed Form
10-Q’s. Unless specifically required by law, we assume no obligation to
update or revise these forward-looking statements to reflect new events
or circumstances.
_____________________________________
(1) Â Non-GAAP financial measure. Refer to the Reconciliation of Non-GAAP Financial Measures in the appendix.
Domtar Corporation
Highlights
(In millions of dollars, unless otherwise noted)
Three months Three months
ended March 31 ended March 31
2011 2010
-------------- (Unaudited)
--------------
$ $
Selected Segment Information
Sales
Papers 1,269 1,245
Paper Merchants 217 212
Wood - 67
Total for reportable segments 1,486 1,524
Intersegment sales - Papers (63) (62)
Intersegment sales - Wood - (5)
Consolidatedsales 1,423 1,457
Depreciation and amortization and
impairment and write-down of
property, plant and equipment
Papers 92 96
Paper Merchants 1 1
Wood - 5
Total for reportable segments 93 102
Impairment and write-down of
property, plant and equipment
- Papers 3 22
Consolidated depreciation and
amortization and impairment and
write-down of property,plant and
equipment 96 124
Operating income (loss)
Papers 209 120
Paper Merchants 3 1
Wood - (5)
Corporate (1) -
Consolidated operating income 211 116
Interest expense, net 21 32
Earnings before income taxes 190 84
Income tax expense 57 26
Net earnings 133 58
Per common share (in dollars)
Net earnings
Basic 3.16 1.35
Diluted 3.14 1.34
Weighted average number of common
and exchangeable shares
outstanding (millions)
Basic 42.1 43.0
Diluted 42.4 43.3
Cash flows provided from 148
operating activities 123
Additions to property, plant and 13
equipment 31
Domtar Corporation
Consolidated Statements of Earnings
(In millions of dollars, unless otherwise noted)
Three months Three months
ended March 31 ended March 31
2011 2010
-------------- (Unaudited)
--------------
$ $
Sales 1,423 1,457
Operating expenses
Cost of sales, excluding
depreciation and amortization 1,021 1,142
Depreciation and amortization 93 102
Selling, general and
administrative 90 84
Impairment and write-down of
property, plant and equipment 3 22
Closure and restructuring
costs 11 20
Other operating income, net (6) (29)
1,212 1,341
Operating income 211 116
Interest expense, net 21 32
Earnings before income taxes 190 84
Income tax expense 57 26
Net earnings 133 58
Per common share (in dollars)
Net earnings
Basic 3.16 1.35
Diluted 3.14 1.34
Weighted average number of common
and exchangeable shares
outstanding (millions)
Basic 42.1 43.0
Diluted 42.4 43.3
Domtar Corporation
Consolidated Balance Sheets at
(In millions of dollars)
March 31 December 31
2011 2010
------- (Unaudited) -------
$ $
Assets
Current assets
Cash and cash equivalents 604 530
Receivables, less allowances
of $5 and $7 721 601
Inventories 643 648
Prepaid expenses 32 28
Income and other taxes
receivable 54 78
Deferred income taxes 116 115
Total current assets 2,170 2,000
Property, plant and equipment,
at cost 9,336 9,255
Accumulated depreciation (5,625) (5,488)
Net property, plant and
equipment 3,711 3,767
Intangible assets, net of
amortization 57 56
Other assets 203 203
Total assets 6,141 6,026
Liabilities and shareholders'
equity
Current liabilities
Bank indebtedness 25 23
Trade and other payables 661 678
Income and other taxes
payable 21 22
Long-term debt due within one
year 2 2
Total current liabilities 709 725
Long-term debt 825 825
Deferred income taxes and other 955 924
Other liabilities and deferred
credits 364 350
Shareholders' equity
Exchangeable shares 58 64
Additional paid-in capital 2,732 2,791
Retained earnings 480 357
Accumulated other
comprehensive income (loss) 18 (10)
Total shareholders'
equity 3,288 3,202
Total liabilities and
shareholders'equity 6,141 6,026
Domtar Corporation
Consolidated Statements of CashFlows
(In millions of dollars)
Three months Three months
ended March 31 ended March 31
2011 2010
--------------(Unaudited)
--------------
$ $
Operating activities
Net earnings 133 58
Adjustments to reconcile net
earnings to cash flows from
operating activities
Depreciation and amortization 93 102
Deferred income taxes and tax 29 15
uncertainties
Impairment and write-down of 3 22
property, plant and equipment
Net gains on disposals of (7) (1)
property, plant and equipment
and sale of business
Stock-based compensation 1 1
expense
Other 1 (1)
Changes in assets and liabilities
Receivables (111) (90)
Inventories 1 10
Prepaid expenses (1) (5)
Trade and other payables (29) (25)
Income and other taxes 23 23
Difference between employer
pension and other
post-retirement contributions
and pension
and other post-retirement
expense 2 10
Other assets and other 10 4
liabilities
Cash flows provided from 148 123
operating activities
Investing activities
Additions to property, plant and (13) (31)
equipment
Proceeds from disposals of 9 7
property, plant and equipment
Proceeds from sale of business 4 -
Cash flows used for investing - (24)
activities
Financing activities
Dividend payments (11) -
Net change in bank indebtedness 3 (23)
Repayment of long-term debt (1) (103)
Borrowings under accounts - 20
receivable securitization program
Stock repurchase (69) -
Other 4 (3)
Cash flows used for financing (74) (109)
activities
Net increase (decrease) in cash 74 (10)
and cash equivalents
Cash and cash equivalents at 530 324
beginning of period
Cash and cash equivalents at end 604 314
ofperiod
Supplemental cashflow information
Net cash payments for:
Interest 14 21
Income taxes paid 2 (1)
(refund)
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.
2011 2010
Q1 Q1 Q2 Q3 Q4 YTD
Reconciliation of
"Earnings before items"
to Net earnings
Net earnings ($) 133 58 31 191 325 605
Alternative fuel
(-) tax credits ($) - (18) - - - (18)
Cellulose
biofuel producer
(-) credits ($) - - - - (127) (127)
Reversal of
valuation
allowance on
Canadian
deferred income
(-) tax balances ($) - - - - (100) (100)
Impairment and
write-down of
property, plant
(+) and equipment ($) 2 16 9 9 - 34
Closure and
restructuring
(+) costs ($) 8 14 4 1 1 20
Net losses
(gains) on
disposals of
property, plant
and equipment
and sale of
(-) businesses ($) (5) (1) 48 (18) - 29
Loss on
repurchase of
(-) long-term debt ($) - - 24 - 4 28
Earnings before
(=) items ($) 138 69 116 183 103 471
Weighted avg.
number of common
and exchangeable
shares
outstanding
( / ) (diluted) (millions) 42.4 43.3 43.4 43.0 42.8 43.2
Earnings before
items per
(=) diluted share ($) 3.25 1.59 2.67 4.26 2.41 10.90
Reconciliation of
"EBITDA" and "EBITDA
before items" to Net
earnings
Net earnings ($) 133 58 31 191 325 605
Income tax
expense
(+) (benefit) ($) 57 26 (5) 21 (199) (157)
Interest
(+) expense, net ($) 21 32 70 24 29 155
(=) Operating income ($) 211 116 96 236 155 603
Depreciation and
(+) amortization ($) 93 102 101 97 95 395
Impairment and
write-down of
property, plant
(+) and equipment ($) 3 22 14 14 - 50
Net losses
(gains) on
disposals of
property, plant
and equipment
and sale of
(-) businesses ($) (7) (1) 48 (14) - 33
(=) EBITDA ($) 300 239 259 333 250 1,081
(/) Sales ($) 1,423 1,457 1,547 1,473 1,373 5,850
(=) EBITDA margin (%) 21% 16% 17% 23% 18% 18%
EBITDA ($) 300 239 259 333 250 1,081
Alternative fuel
(-) tax credits ($) - (25) - - - (25)
Closure and
restructuring
(+) costs ($) 11 20 5 1 1 27
EBITDA before
(=) items ($) 311 234 264 334 251 1,083
(/) Sales ($) 1,423 1,457 1,547 1,473 1,373 5,850
EBITDA margin
(=) before items (%) 22% 16% 17% 23% 18% 19%
Reconciliation of "Free
cashflow" to Cash flow
provided from operating
activities
Cash flow
provided from
operating
activities ($) 148 123 610 267 166 1,166
Additions to
property, plant
(-) and equipment ($) (13) (31) (43) (38) (41) (153)
(=) Free cash flow ($) 135 92 567 229 125 1,013
"Net debt-to-total
capitalization"
computation
Bank
indebtedness ($) 25 19 30 26 23
Long-term debt
due within one
(+) year ($) 2 31 30 22 2
(+) Long-term debt ($) 825 1,600 1,186 961 825
(=) Debt ($) 852 1,650 1,246 1,009 850
Cash and cash
(-) equivalents ($) (604) (314) (514) (537) (530)
(=) Net debt ($) 248 1,336 732 472 320
Shareholders'
(+) equity ($) 3,288 2,748 2,642 2,811 3,202
Total
(=) capitalization ($) 3,536 4,084 3,374 3,283 3,522
Net debt ($) 248 1,336 732 472 320
Total
( / ) capitalization ($) 3,536 4,084 3,374 3,283 3,522
Net
debt-to-total
(=) capitalization (%) 7% 33% 22% 14% 9%
“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
2011
(In millions of dollars, unless otherwise noted)
The following table sets forth certain non-U.S. generally accepted
accounting principles (“GAAP”), financial metrics identified in bold as
“Operating income (loss) before items”, “EBITDA before items” and
“EBITDA margin before items” by reportable segment. Management believes
that the financial metrics presented are frequently used by investors
and are useful to measure the operating performance and benchmark with
peers within the industry. These metrics are presented as a complement
to enhance the understanding of operating results but not in
substitution for GAAP results.
The company calculates the segmented “Operating income (loss) before
items” by excluding the pre-tax effect of items considered by
management as not reflecting our ongoing operations. Management uses
these measures to focus on ongoing operations and believes that it is
useful to investors because it enables them to perform meaningful
comparisons between periods. Domtar believes that using this
information along with Operating income (loss) provides for a more
complete analysis of the results of operations. Operating income (loss)
by segment is the most directly comparable GAAP measure.
Papers Paper Merchants Corporate Total
Q1'11 Q2'11 Q3'11 Q4'11 YTD Q1'11 Q2'11 Q3'11 Q4'11 YTD Q1'11 Q2'11 Q3'11 Q4'11 YTD Q1'11 Q2'11 Q3'11 Q4'11 YTD
Reconciliation of
Operating income
(loss) to"Operating
income (loss)
beforeitems"
Operating
income (loss) ($) 209 - - - 209 3 - - - 3 (1) - - - (1) 211 - - - 211
Impairment
and
write-down of
property,
plant and
(+) equipment ($) 3 - - - 3 - - - - - - - - - - 3 - - - 3
Closure and
restructuring
(+) costs ($) 11 - - - 11 - - - - - - - - - - 11 - - - 11
Net gains on
disposals of
property,
plant and
equipment and
sale of
(-) business ($) (4) - - - (4) (3) - - - (3) - - - - - (7) - - - (7)
Operating
income (loss)
(=) before items ($) 219 - - - 219 - - - - - (1) - - - (1) 218 - - - 218
Reconciliation of
"Operating income
(loss) before
items" to "EBITDA
before items"
Operating
income (loss)
before items ($) 219 - - - 219 - - - - - (1) - - - (1) 218 - - - 218
Depreciation
and
(+) amortization ($) 92 - - - 92 1 - - - 1 - - - - - 93 - - - 93
EBITDA before
(=) items ($) 311 - - - 311 1 - - - 1 (1) - - - (1) 311 - - - 311
(/) Sales ($) 1,269 - - - 1,269 217 - - - 217 - - - - - 1,486 - - - 1,486
EBITDA margin
(=) before items (%) 25% - - - 25% - - - - - - - - - - 21% - - - 21%
“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.
Domtar Corporation
Quarterly Reconciliation of Non-GAAP Financial Measures – By Segment
2010
(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.
Papers Paper Merchants Wood(1) Corporate Total
Q1'10 Q2'10 Q3'10 Q4'10 YTD Q1'10 Q2'10 Q3'10 Q4'10 YTD Q1'10 Q2'10 Q3'10 Q4'10 YTD Q1'10 Q2'10 Q3'10 Q4'10 YTD Q1'10 Q2'10 Q3'10 Q4'10 YTD
Reconciliation of
Operating income
(loss) to
"Operatingincome
(loss) before
items"
Operating
income (loss) ($) 120 149 237 161 667 1 (1) - (3) (3) (5) (49) - - (54) - (3) (1) (3) (7) 116 96 236 155 603
Alternative
fuel tax
(-) credits ($) (25) - - - (25) - - - - - - - - - - - - - - - (25) - - - (25)
Impairment
and
write-down of
property,
plant and
(+) equipment ($) 22 14 14 - 50 - - - - - - - - - - - - - - - 22 14 14 - 50
Closure and
restructuring
(+) costs ($) 20 5 1 - 26 - - - 1 1 - - - - - - - - - - 20 5 1 1 27
(-) Net losses
(gains) on
disposals of
property,
plant and
equipment and
sale of
businesses ($) - (3) (14) - (17) - - - - - (1) 49 - - 48 - 2 - - 2 (1) 48 (14) - 33
Operating
income (loss)
(=) before items ($) 137 165 238 161 701 1 (1) - (2) (2) (6) - - - (6) - (1) (1) (3) (5) 132 163 237 156 688
Reconciliation
of"Operatingincome
(loss) before
items" to "EBITDA
before items"
Operating
income (loss)
before items ($) 137 165 238 161 701 1 (1) - (2) (2) (6) - - - (6) - (1) (1) (3) (5) 132 163 237 156 688
Depreciation
and
(+) amortization ($) 96 95 96 94 381 1 1 1 1 4 5 5 - - 10 - - - - - 102 101 97 95 395
EBITDA before
(=) items ($) 233 260 334 255 1,082 2 - 1 (1) 2 (1) 5 - - 4 - (1) (1) (3) (5) 234 264 334 251 1,083
(/) Sales ($) 1,245 1,317 1,296 1,212 5,070 212 213 233 212 870 67 83 - - 150 - - - - - 1,524 1,613 1,529 1,424 6,090
EBITDA margin
(=) before items (%) 19% 20% 26% 21% 21% 1% - - - - - 6% - - 3% - - - - - 15% 16% 22% 18% 18%
“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 previously reported, we sold 88% of the Wood segment on June 30,
2010 to EACOM Timber Corporation (“EACOM”). During the fourth quarter
of 2010, in an unrelated transaction, we sold the remaining 12% of
common stock held in EACOM.
Domtar Corporation
Supplemental Segmented Information
(In millions of dollars, unless otherwise noted)
2011 2010
Q1 Q1 Q2 Q3 Q4 YTD
Papers Segment
Sales ($) 1,269 1,245 1,317 1,296 1,212 5,070
Intersegment
sales - Papers ($) (63) (62) (60) (56) (51) (229)
Operating income ($) 209 120 149 237 161 667
Depreciation and
amortization ($) 92 96 95 96 94 381
Impairment and
write-down of
property, plant
and equipment ($) 3 22 14 14 - 50
Papers
Papers Production ('000 ST) 899 906 882 906 873 3,567
Papers Shipments ('000 ST) 913 960 891 896 850 3,597
Uncoated
Freesheet ('000 ST) 913 925 889 896 850 3,560
Coated
Groundwood ('000 ST) - 35 2 - - 37
Pulp
Pulp Shipments(a) ('000 ADMT) 375 388 486 412 376 1,662
Hardwood Kraft
Pulp (%) 20% 40% 38% 37% 24% 35%
Softwood Kraft
Pulp (%) 55% 49% 52% 53% 62% 54%
Fluff Pulp (%) 25% 11% 10% 10% 14% 11%
Paper Merchants
Segment
Sales ($) 217 212 213 233 212 870
Operating income
(loss) ($) 3 1 (1) - (3) (3)
Depreciation and
amortization ($) 1 1 1 1 1 4
Wood Segment
Sales ($) - 67 83 - - 150
Intersegment
sales - Wood ($) - (5) (6) - - (11)
Operating loss ($) - (5) (49) - - (54)
Depreciation and
amortization ($) - 5 5 - - 10
Lumber Production (Millions FBM) - 172 165 - - 337
Lumber Shipments (Millions FBM) - 164 187 - - 351
Average Exchange
Rates CAN 0.986 1.041 1.028 1.039 1.013 1.030
US 1.014 0.961 0.973 0.962 0.987 0.971
(a) Figures are gross of market pulp purchased from other producers on
the open market for some of our paper making operations. Pulp
Shipments represent the amount of pulp produced in excess of our
internal requirement.
Note: the term “ST” refers to a short ton, the term “ADMT” refers to an
air dry metric ton, and the term “FBM” refers to foot board measure.
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SOURCE DOMTAR CORPORATION