Domtar CORP - FORM 8-K - EX-99.1 - NEWS RELEASE OF DOMTAR CORPORATION, DATED OCTOBER 29, 2010

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8-K - FORM 8-K - Domtar CORP	d8k.htm

Exhibit 99.1


				395 de Maisonneuve Blvd. West Montreal, QC H3A 1L6


TICKER SYMBOL				MEDIA AND INVESTOR RELATIONS
UFS (NYSE, TSX)				Pascal Bossé Vice-President Corporate Communications and Investor Relations Tel.: 514-848-5938

DOMTAR CORPORATION REPORTS PRELIMINARY THIRD QUARTER 2010 FINANCIAL RESULTS

Outstanding third quarter financial performance

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

•

Net earnings of $4.44 per share, earnings before items¹ of $4.26 per share

•

EBITDA before items¹ of $334 million, up 27% over second quarter 2010

•

Plymouth mill conversion to fluff pulp on time for scheduled start-up in fourth quarter 2010

Montreal, October 29, 2010 – Domtar Corporation (NYSE/TSX: UFS) today reported net earnings of $191 million ($4.44 per share) for the third quarter of 2010 compared to net earnings of $31 million ($0.71 per share) for the second quarter of 2010 and net earnings of $183 million ($4.24 per share) for the third quarter of 2009. Sales for the third quarter of 2010 amounted to $1.5 billion. Excluding items listed below, the Company had earnings before items¹ of $183 million ($4.26 per share) for the third quarter of 2010 compared to earnings before items¹ of $116 million ($2.67 per share) for the second quarter of 2010 and earnings before items¹ of $57 million ($1.32 per share) for the third quarter of 2009.

Third quarter 2010 items:

•

Charge of $14 million ($9 million after tax) related to the impairment and write-down of property, plant and equipment;

•

Closure and restructuring costs of $1 million ($1 million after tax); and

•

Gain on sale of property, plant and equipment, and business of $14 million ($18 million after tax).

Second quarter 2010 items:

•

Loss on sale of the Wood business of $50 million ($50 million after tax);

•

Costs for debt repurchase, including premium paid, of $40 million ($24 million after tax);

•

Charge of $14 million ($9 million after tax) related to the impairment and write-down of property, plant and equipment;

•

Closure and restructuring costs of $5 million ($4 million after tax); and

•

Gain on sale of property, plant and equipment of $2 million ($2 million after tax).

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

1/12

Third quarter 2009 items:

•

Refundable excise tax credit for the production and use of alternative bio fuel mixtures of $159 million ($116 million after tax);

•

Gain on sale of property, plant and equipment of $12 million ($12 million after tax); and

•

Closure and restructuring costs of $4 million ($2 million after tax).

“Once again, we delivered strong financial results while successfully executing our strategic roadmap. We reduced our exposure to hardwood pulp markets by selling our Woodland mill, paring cyclicality in our earnings and improving our risk profile. We also repaid our outstanding secured debt and maintained a strong liquidity position,” said John D. Williams, President and Chief Executive Officer. “While demand for fine paper is fairly stable, we remain conservative in our business approach because of continued high levels of unemployment in the U.S. and economic uncertainty.”

Mr. Williams also said, “On the front end of the business, we are working on promoting the responsible use of paper products with the launch of our “Paper Because” campaign. I am confident that this initiative will help educate consumers about the positive messages behind paper – a sustainable and purposeful product, – and demonstrate that sometimes, there is no substitute for paper.”

SEGMENT REVIEW

Papers

Operating income before items¹ was $238 million in the third quarter of 2010 compared to operating income before items¹ of $165 million in the second quarter of 2010. Depreciation and amortization totaled $96 million in the third quarter of 2010. When compared to the second quarter of 2010, paper shipments increased by 0.5% while pulp shipments decreased by 15%. The shipments-to-production ratio for paper was 99% in the third quarter of 2010, compared to 101% in the second quarter of 2010. When compared to the end of June, paper inventories increased by 10,000 tons and pulp inventories increased by 33,000 metric tons at the end of September.

The increase in operating income before items¹ in the third quarter of 2010 was the result of lower costs related to planned maintenance downtime and lower wood fiber costs.


(In millions of dollars)	3Q 2010		2Q 2010
Sales	$	1,296	$	1,317
Operating income	$	237	$	149
Operating income before items¹	$	238	$	165
Depreciation and amortization	$	96	$	95

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

2/12

Paper Merchants

Operating income before items was nil in the third quarter of 2010 compared to an operating loss of $1 million in the second quarter of 2010. Depreciation and amortization was $1 million in the third quarter of 2010. Deliveries increased by 9% when compared to the second quarter of 2010.

The increase in operating income in the third quarter of 2010 was primarily the result of higher average selling prices and higher deliveries.


(In millions of dollars)	3Q 2010		2Q 2010
Sales	$	233	$	213
Operating income (loss)	$	—	$	(1	)
Depreciation and amortization	$	1	$	1

LIQUIDITY AND CAPITAL

Cash flow provided from operating activities amounted to $267 million and capital expenditures amounted to $38 million. Free cash flow¹ amounted to $229 million in the third quarter of 2010. Domtar’s net debt-to-total capitalization ratio¹ stood at 14% at September 30, 2010 compared to 35% at December 31, 2009.

Under its stock repurchase program, Domtar repurchased 399,720 shares of common stock at an average price of $61.07 during the third quarter of 2010. Since the implementation of the program, the Company has repurchased a total of 739,850 shares of common stock at an average price of $58.64.

OUTLOOK

Domtar’s paper shipments are expected to decline in the last quarter of the year due to seasonal factors. Pulp shipments are expected to be impacted by the sale of the Woodland facility. The Company anticipates that selling prices for pulp will continue to come under pressure through the end of the year due to capacity restarts. Input costs are expected to be seasonally higher in the fourth quarter.

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

3/12

EARNINGS CONFERENCE CALL

The Company will hold a conference call today at 10:00 a.m. (ET) to discuss its third quarter 2010 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 fourth quarter 2010 earnings on February 4, 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 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 Domtar Distribution Group, an extensive network of strategically located paper distribution facilities. The Company employs approximately 8,500 people. To learn more, visit www.domtar.com.

Forward-Looking Statements

All statements in this press 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 Annual Report on Form 10-K filed with the SEC as updated by the Company’s latest Quarterly Report on Form 10-Q. Unless specifically required by law, we assume no obligation to update or revise these forward-looking statements to reflect new events or circumstances.

- (30) -

4/12

Domtar Corporation

Highlights

(In millions of dollars, unless otherwise noted)


	Three months ended						Nine months ended
	September 30 2010			September 30 2009			September 30 2010			September 30 2009
	(Unaudited)
Selected Segment Information
Sales
Papers	$	1,296		$	1,211		$	3,858		$	3,444
Paper Merchants		233			239			658			661
Wood		—			59			150			148

Total for reportable segments		1,529			1,509			4,666			4,253
Intersegment sales—Papers		(56	)		(63	)		(178	)		(178	)
Intersegment sales—Wood		—			(6	)		(11	)		(14	)

Consolidated sales		1,473			1,440			4,477			4,061

Depreciation and amortization and impairment and write-down of property, plant and equipment
Papers		96			95			287			287
Paper Merchants		1			1			3			3
Wood		—			5			10			14

Total for reportable segments		97			101			300			304
Impairment and write-down of property, plant and equipment—Papers		14			—			50			35

Consolidated depreciation and amortization and impairment and write-down of property, plant and equipment		111			101			350			339

Operating income (loss)
Papers		237			294			506			438
Paper Merchants		—			2			—			5
Wood		—			(1	)		(54	)		(31	)
Corporate		(1	)		—			(4	)		—

Consolidated operating income		236			295			448			412
Interest expense		24			34			126			88

Earnings before income taxes		212			261			322			324
Income tax expense		21			78			42			138

Net earnings		191			183			280			186

Per common share (in dollars)
Net earnings
Basic		4.47			4.26			6.53			4.33
Diluted		4.44			4.24			6.48			4.32
Weighted average number of common and exchangeable shares outstanding (millions)
Basic		42.7			43.0			42.9			43.0
Diluted		43.0			43.2			43.2			43.1

Cash flows provided from operating activities		267			244			1,000			607
Additions to property, plant and equipment		38			24			112			66

5/12

Domtar Corporation

Consolidated Statements of Earnings

(In millions of dollars, unless otherwise noted)


	Three months ended						Nine months ended
	September 30 2010			September 30 2009			September 30 2010		September 30 2009
	(Unaudited)
Sales	$	1,473		$	1,440		$	4,477	$	4,061
Operating expenses
Cost of sales, excluding depreciation and amortization		1,048			1,124			3,397		3,363
Depreciation and amortization		97			101			300		304
Selling, general and administrative		91			85			244		254
Impairment and write-down of property, plant and equipment		14			—			50		35
Closure and restructuring costs		1			4			26		34
Other operating loss (income), net		(14	)		(169	)		12		(341	)

		1,237			1,145			4,029		3,649

Operating income		236			295			448		412
Interest expense		24			34			126		88

Earnings before income taxes		212			261			322		324
Income tax expense		21			78			42		138

Net earnings		191			183			280		186

Per common share (in dollars)
Net earnings
Basic		4.47			4.26			6.53		4.33
Diluted		4.44			4.24			6.48		4.32
Weighted average number of common and exchangeable shares outstanding (millions)
Basic		42.7			43.0			42.9		43.0
Diluted		43.0			43.2			43.2		43.1

6/12

Domtar Corporation

Consolidated Balance Sheets at

(In millions of dollars)


	September 30 2010			December 31 2009
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	537		$	324
Receivables, less allowances of $8 and $8		653			536
Inventories		639			745
Prepaid expenses		28			46
Income and other taxes receivable		43			414
Deferred income taxes		139			137

Total current assets		2,039			2,202
Property, plant and equipment, at cost		9,335			9,575
Accumulated depreciation		(5,555	)		(5,446	)

Net property, plant and equipment		3,780			4,129
Intangible assets, net of amortization		56			85
Other assets		114			103

Total assets		5,989			6,519

Liabilities and shareholders’ equity
Current liabilities
Bank indebtedness		26			43
Trade and other payables		662			686
Income and other taxes payable		30			31
Long-term debt due within one year		22			11

Total current liabilities		740			771
Long-term debt		961			1,701
Deferred income taxes and other		1,033			1,019
Other liabilities and deferred credits		444			366
Shareholders’ equity
Exchangeable shares		66			78
Additional paid-in capital		2,766			2,816
Retained earnings (accumulated deficit)		43			(216	)
Accumulated other comprehensive loss		(64	)		(16	)

Total shareholders’ equity		2,811			2,662

Total liabilities and shareholders’ equity		5,989			6,519

7/12

Domtar Corporation

Consolidated Statements of Cash Flows

(In millions of dollars)


	Nine months ended
	September 30 2010			September 30 2009
	(Unaudited)
Operating activities
Net earnings	$	280		$	186
Adjustments to reconcile net earnings to cash flows from operating activities
Depreciation and amortization		300			304
Deferred income taxes		7			122
Impairment and write-down of property, plant and equipment		50			35
Loss (gain) on repurchase of long-term debt		40			(12	)
Net losses (gains) on disposals of property, plant and equipment and sale of businesses		33			(12	)
Stock-based compensation expense		3			6
Other		(6	)		8
Changes in assets and liabilities, excluding the effects of sale of businesses
Receivables		(134	)		(141	)
Inventories		40			234
Prepaid expenses		(2	)		(2	)
Trade and other payables		(4	)		25
Income and other taxes		375			(172	)
Difference between employer pension and other post-retirement contributions and pension and other post-retirement expense		5			10
Other assets and other liabilities		13			16

Cash flows provided from operating activities		1,000			607

Investing activities
Additions to property, plant and equipment		(112	)		(66	)
Proceeds from disposals of property, plant and equipment		26			16
Proceeds from sale of businesses		161			—

Cash flows provided from (used for) investing activities		75			(50	)

Financing activities
Dividend payments		(11	)		—
Net change in bank indebtedness		(16	)		(13	)
Change of revolving bank credit facility		—			(60	)
Issuance of long-term debt		—			385
Repayment of long-term debt		(763	)		(451	)
Borrowings under accounts receivable securitization program		20			—
Debt issue and tender offer costs		(26	)		(14	)
Stock repurchase		(44	)		—
Prepaid on structured stock repurchase, net		(19	)		—
Other		(3	)		—

Cash flows used for financing activities		(862	)		(153	)

Net increase in cash and cash equivalents		213			404
Translation adjustments related to cash and cash equivalents		—			13
Cash and cash equivalents at beginning of period		324			16

Cash and cash equivalents at end of period		537			433

8/12

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 (loss) before items”, “Earnings (loss) 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 the 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 (loss) before items” and “EBITDA before items” by excluding the after-tax (pre-tax) effect of items considered by management as not reflecting our ongoing 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 (loss) provides for a more complete analysis of the results of operations. Net earnings (loss) and Cash flow provided from operating activities are the most directly comparable GAAP measures.


			2010												2009
			Q1			Q2			Q3			YTD			Q1			Q2			Q3			Q4			YTD
Reconciliation of “Earnings (loss) before items” to Net earnings (loss)
	Net earnings (loss)	($)		58			31			191			280			(45	)		48			183			124			310
(-)	Alternative fuel tax credits	($)		(18	)		—			—			(18	)		(28	)		(79	)		(116	)		(113	)		(336	)
(+)	Impairment and write-down of property, plant and equipment	($)		16			9			9			34			21			—			—			22			43
(+)	Closure and restructuring costs	($)		14			4			1			19			14			4			2			24			44
(-)	Net losses (gains) on disposals of property, plant and equipment and sale of businesses	($)		(1	)		48			(18	)		29			—			—			(12	)		3			(9	)
(-)	Loss (gain) on repurchase of long-term debt	($)		—			24			—			24			—			(6	)		—			—			(6	)
(=)	Earnings (loss) before items	($)		69			116			183			368			(38	)		(33	)		57			60			46
(/)	Weighted avg. number of common and exchangeable shares outstanding (diluted)	(millions)		43.3			43.4			43.0			43.2			43.0			43.0			43.2			43.3			43.2
(=)	Earnings (loss) before items per diluted share	($)		1.59			2.67			4.26			8.52			(0.88	)		(0.77	)		1.32			1.39			1.06

Reconciliation of “EBITDA” and “EBITDA before items” to Net earnings (loss)
	Net earnings (loss)	($)		58			31			191			280			(45	)		48			183			124			310
(+)	Income tax expense (benefit)	($)		26			(5	)		21			42			(8	)		68			78			42			180
(+)	Interest expense	($)		32			70			24			126			31			23			34			37			125
(=)	Operating income (loss)	($)		116			96			236			448			(22	)		139			295			203			615
(+)	Depreciation and amortization	($)		102			101			97			300			99			104			101			101			405
(+)	Impairment and write-down of property, plant and equipment	($)		22			14			14			50			35			—			—			27			62
(-)	Net losses (gains) on disposals of property, plant and equipment and sale of businesses	($)		(1	)		48			(14	)		33			—			—			(12	)		5			(7	)
(=)	EBITDA	($)		239			259			333			831			112			243			384			336			1,075
(/)	Sales	($)		1,457			1,547			1,473			4,477			1,302			1,319			1,440			1,404			5,465
(=)	EBITDA margin	(%)		16	%		17	%		23	%		19	%		9	%		18	%		27	%		24	%		20	%
	EBITDA	($)		239			259			333			831			112			243			384			336			1,075
(-)	Alternative fuel tax credits	($)		(25	)		—			—			(25	)		(46	)		(131	)		(159	)		(162	)		(498	)
(+)	Closure and restructuring costs	($)		20			5			1			26			24			6			4			29			63
(=)	EBITDA before items	($)		234			264			334			832			90			118			229			203			640
(/)	Sales	($)		1,457			1,547			1,473			4,477			1,302			1,319			1,440			1,404			5,465
(=)	EBITDA margin before items	(%)		16	%		17	%		23	%		19	%		7	%		9	%		16	%		14	%		12	%

Reconciliation of “Free cash flow” to Cash flow provided from operating activities
	Cash flow provided from operating activities	($)		123			610			267			1,000			57			306			244			185			792
(-)	Additions to property, plant and equipment	($)		(31	)		(43	)		(38	)		(112	)		(24	)		(18	)		(24	)		(40	)		(106	)
(=)	Free cash flow	($)		92			567			229			888			33			288			220			145			686

“Net debt-to-total capitalization” computation
	Bank indebtedness	($)		19			30			26						52			24			30			43
(+)	Long-term debt due within one year	($)		31			30			22						18			13			13			11
(+)	Long-term debt	($)		1,600			1,186			961						2,195			2,162			1,971			1,701
(=)	Debt	($)		1,650			1,246			1,009						2,265			2,199			2,014			1,755
(-)	Cash and cash equivalents	($)		(314	)		(514	)		(537	)					(145	)		(381	)		(433	)		(324	)
(=)	Net debt	($)		1,336			732			472						2,120			1,818			1,581			1,431
(+)	Shareholders’ equity	($)		2,748			2,642			2,811						2,073			2,264			2,580			2,662
(=)	Total capitalization	($)		4,084			3,374			3,283						4,193			4,082			4,161			4,093
	Net debt	($)		1,336			732			472						2,120			1,818			1,581			1,431
(/)	Total capitalization	($)		4,084			3,374			3,283						4,193			4,082			4,161			4,093
(=)	Net debt-to-total capitalization	(%)		33	%		22	%		14	%					51	%		45	%		38	%		35	%

“Earnings (loss) before items”, “Earnings (loss) 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 (loss), 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.

9/12

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											Corporate
			Q1’10			Q2’10			Q3’10			YTD			Q1’10			Q2’10			Q3’10		YTD		Q1’10			Q2’10			Q3’10		YTD			Q1’10		Q2’10			Q3’10			YTD
Reconciliation of Operating income (loss) to “Operating income (loss) before items”
	Operating income (loss)	($)		120			149			237			506			1			(1	)		—		—		(5	)		(49	)		—		(54	)		—		(3	)		(1	)		(4	)
(+)	Alternative fuel tax credits	($)		(25	)		—			—			(25	)		—			—			—		—		—			—			—		—			—		—			—			—
(+)	Impairment and write-down of property, plant and equipment	($)		22			14			14			50			—			—			—		—		—			—			—		—			—		—			—			—
(+)	Closure and restructuring costs	($)		20			5			1			26			—			—			—		—		—			—			—		—			—		—			—			—
(-)	Net losses (gains) on disposals of property, plant and equipment and sale of businesses	($)		—			(3	)		(14	)		(17	)		—			—			—		—		(1	)		49			—		48			—		2			—			2
(=)	Operating income (loss) before items	($)		137			165			238			540			1			(1	)		—		—		(6	)		—			—		(6	)		—		(1	)		(1	)		(2	)
Reconciliation of “Operating income (loss) before items” to “EBITDA before items”
	Operating income (loss) before items	($)		137			165			238			540			1			(1	)		—		—		(6	)		—			—		(6	)		—		(1	)		(1	)		(2	)
(+)	Depreciation and amortization	($)		96			95			96			287			1			1			1		3		5			5			—		10			—		—			—			—
(=)	EBITDA before items	($)		233			260			334			827			2			—			1		3		(1	)		5			—		4			—		(1	)		(1	)		(2	)
(/)	Sales	($)		1,245			1,317			1,296			3,858			212			213			233		658		67			83			—		150			—		—			—			—
(=)	EBITDA margin before items	(%)		19	%		20	%		26	%		21	%		1	%		—			—		—		—			6	%		—		3	%		—		—			—			—

“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.

10/12

Domtar Corporation

Quarterly Reconciliation of Non-GAAP Financial Measures—By Segment 2009

(In millions of dollars, unless otherwise noted)


			Papers															Paper Merchants															Wood															Corporate
			Q1’09			Q2’09			Q3’09			Q4’09			YTD			Q1’09			Q2’09			Q3’09			Q4’09			YTD			Q1’09			Q2’09			Q3’09			Q4’09			YTD			Q1’09		Q2’09		Q3’09			Q4’09		YTD
Reconciliation of Operating income (loss) to “Operating income (loss) before items”
	Operating income (loss)	($)		(6	)		150			294			212			650			2			1			2			2			7			(18	)		(12	)		(1	)		(11	)		(42	)		—		—		—			—		—
(-)	Alternative fuel tax credits	($)		(46	)		(131	)		(159	)		(162	)		(498	)		—			—			—			—			—			—			—			—			—			—			—		—		—			—		—
(+)	Impairment and write-down of property, plant and equipment	($)		35			—			—			27			62			—			—			—			—			—			—			—			—			—			—			—		—		—			—		—
(+)	Closure and restructuring costs	($)		22			4			4			22			52			—			1			—			1			2			2			1			—			6			9			—		—		—			—		—
(-)	Net losses (gains) on disposals of property, plant and equipment	($)		—			—			(1	)		5			4			—			—			—			—			—			—			—			(8	)		—			(8	)		—		—		(3	)		—		(3	)
(=)	Operating Income (loss) before items	($)		5			23			138			104			270			2			2			2			3			9			(16	)		(11	)		(9	)		(5	)		(41	)		—		—		(3	)		—		(3	)
Reconciliation of “Operating income (loss) before items” to “EBITDA before items”
	Operating income (loss) before items	($)		5			23			138			104			270			2			2			2			3			9			(16	)		(11	)		(9	)		(5	)		(41	)		—		—		(3	)		—		(3	)
(+)	Depreciation and amortization	($)		94			98			95			95			382			1			1			1			—			3			4			5			5			6			20			—		—		—			—		—
(=)	EBITDA before items	($)		99			121			233			199			652			3			3			3			3			12			(12	)		(6	)		(4	)		1			(21	)		—		—		(3	)		—		(3	)
(/)	Sales	($)		1,106			1,127			1,211			1,188			4,632			217			205			239			212			873			43			46			59			63			211			—		—		—			—		—
(=)	EBITDA margin before items	(%)		9	%		11	%		19	%		17	%		14	%		1	%		1	%		1	%		1	%		1	%		—			—			—			2	%		—			—		—		—			—		—

11/12

Domtar Corporation

Supplemental Segmented Information

(In millions of dollars, unless otherwise noted)


		2010												2009
		Q1			Q2			Q3			YTD			Q1			Q2			Q3			Q4			YTD
Papers Segment
Sales	($)		1,245			1,317			1,296			3,858			1,106			1,127			1,211			1,188			4,632
Intersegment sales - Papers	($)		(62	)		(60	)		(56	)		(178	)		(60	)		(55	)		(63	)		(53	)		(231	)
Operating income (loss)	($)		120			149			237			506			(6	)		150			294			212			650
Depreciation and amortization	($)		96			95			96			287			94			98			95			95			382
Impairment and write-down of property, plant and equipment	($)		22			14			14			50			35			—			—			27			62
Papers
Papers Production	(‘000 ST)		906			882			906			2,694			869			912			920			903			3,604
Papers Shipments	(‘000 ST)		960			891			896			2,747			913			929			972			943			3,757
Uncoated Freesheet	(‘000 ST)		925			889			896			2,710			887			901			939			890			3,617
Coated Groundwood	(‘000 ST)		35			2			—			37			26			28			33			53			140
Pulp
Pulp Shipments^(a)	(‘000 ADMT)		388			486			412			1,286			314			393			446			386			1,539
Hardwood Kraft Pulp	(%)		40	%		38	%		37	%		39	%		33	%		33	%		40	%		35	%		36	%
Softwood Kraft Pulp	(%)		49	%		52	%		53	%		51	%		54	%		54	%		49	%		54	%		52	%
Fluff Pulp	(%)		11	%		10	%		10	%		10	%		13	%		13	%		11	%		11	%		12	%
Paper Merchants Segment
Sales	($)		212			213			233			658			217			205			239			212			873
Operating income (loss)	($)		1			(1	)		—			—			2			1			2			2			7
Depreciation and amortization	($)		1			1			1			3			1			1			1			—			3
Wood Segment
Sales	($)		67			83			—			150			43			46			59			63			211
Intersegment sales - Wood	($)		(5	)		(6	)		—			(11	)		(4	)		(4	)		(6	)		(6	)		(20	)
Operating loss	($)		(5	)		(49	)		—			(54	)		(18	)		(12	)		(1	)		(11	)		(42	)
Depreciation and amortization	($)		5			5			—			10			4			5			5			6			20
Lumber Production	(Millions FBM)		172			165			—			337			121			131			147			161			560
Lumber Shipments	(Millions FBM)		164			187			—			351			125			135			153			161			574
Average Exchange Rates	CAN		1.041			1.028			1.039			1.036			1.245			1.167			1.097			1.056			1.142
	US		0.961			0.973			0.962			0.965			0.803			0.857			0.911			0.947			0.876

(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.

12/12

Domtar CORP - FORM 8-K - EX-99.1 - NEWS RELEASE OF DOMTAR CORPORATION, DATED OCTOBER 29, 2010 - October 29, 2010

Attached files

Domtar CORP Reports