Domtar CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - FORM 8-K - Domtar CORP	d426949d8k.htm

Exhibit 99.1


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


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

DOMTAR CORPORATION REPORTS PRELIMINARY THIRD QUARTER 2012 FINANCIAL RESULTS

Good performance in pulp and paper and lower costs for planned maintenance drove results

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

•

Third quarter 2012 net earnings of $1.84 per share, earnings before items¹ of $1.87 per share

•

Paper inventories reduced by 10% compared to June 2012

•

Continued momentum in Personal Care segment

Montreal, October 25, 2012 – Domtar Corporation (NYSE: UFS) (TSX: UFS) today reported net earnings of $66 million ($1.84 per share) for the third quarter of 2012 compared to net earnings of $59 million ($1.61 per share) for the second quarter of 2012 and net earnings of $117 million ($2.95 per share) for the third quarter of 2011. Sales for the third quarter of 2012 amounted to $1.4 billion.

Excluding items listed below, the Company had earnings before items¹ of $67 million ($1.87 per share) for the third quarter of 2012 compared to earnings before items¹ of $59 million ($1.61 per share) for the second quarter of 2012 and earnings before items¹ of $123 million ($3.10 per share) for the third quarter of 2011.

Third quarter 2012 items:

•

Closure and restructuring costs of $2 million ($1 million after tax)

Second quarter 2012 items:

•

None

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

1/12

Third quarter 2011 items:

•

Gains on the sale of property, plant and equipment and business of $4 million ($3 million after tax);

•

Charge of $8 million ($4 million after tax) related to the impairment and write-down of property, plant and equipment;

•

Premium paid on debt repurchase of $4 million ($3 million after tax);

•

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

•

Negative impact of purchase accounting of $1 million ($1 million after tax).

“The third quarter was marked by weak paper demand and by cyclically low pulp prices,” said John Williams, President and CEO. “Nevertheless, shipments for our pulp were sequentially higher, our paper pricing remained firm and paper inventories decreased by 10%. Given the macro environment, we continue to manage the business prudently, adjusting our production to customer demand through market-related downtime. I am pleased with our performance overall despite a sluggish economy and a weak pulp price environment.”

QUARTERLY REVIEW

Operating income before items¹ was $111 million in the third quarter of 2012 compared to an operating income before items¹ of $106 million in the second quarter of 2012. Depreciation and amortization totaled $96 million in the third quarter of 2012.


(In millions of dollars)	3Q 2012			2Q 2012
Sales	$	1,389		$	1,368
Operating income (loss)
Pulp and Paper segment		103			96
Distribution segment		(5	)		(2	)
Personal Care segment		12			12
Corporate		(1	)		—

Total		109			106
Operating income before items¹		111			106
Depreciation and amortization		96			96

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

2/12

The increase in operating income before items¹ in the third quarter of 2012 was the result of higher shipments for pulp and paper, lower maintenance and raw material costs and lower SG&A costs. These factors were partially offset by lower average selling prices for pulp and paper and higher costs for lack-of-order downtime in papers.

When compared to the second quarter of 2012, paper shipments increased 0.9% and pulp shipments increased 12.8%. Paper deliveries of Ariva^® decreased 4.6% when compared to the second quarter of 2012. The shipments-to-production ratio for paper was 105% in the third quarter of 2012, compared to 98% in the second quarter of 2012. Lack-of-order downtime and machine slowdowns in papers totaled 38,000 tons. Paper inventories decreased by 38,000 tons while pulp inventories increased by 15,000 metric tons as at the end of September, compared to June levels.

LIQUIDITY AND CAPITAL

Cash flow provided from operating activities amounted to $206 million and capital expenditures amounted to $66 million, resulting in free cash flow¹ of $140 million for the three months ended September 2012. Domtar’s net debt-to-total capitalization ratio¹ stood at 17% at September 30, 2012 compared to 12% at December 31, 2011.

Under its stock repurchase program, Domtar repurchased, during the quarter, 578,328 shares of common stock at an average price of $75.42 per share. Since the inception of the program, Domtar repurchased 8,135,157 shares of common stock at an average price of $80.53. At the end of the quarter, Domtar had $345 million remaining under this program.

OUTLOOK

Due to seasonal factors, Domtar paper shipments are expected to decline in the fourth quarter when compared to the third quarter. In pulp, we anticipate that prices will begin to gradually increase in the medium term due to favorable market dynamics and low softwood inventory levels. Input costs, notably energy and chemicals are expected to increase slightly in the fourth quarter.

EARNINGS CONFERENCE CALL

The Company will hold a conference call today at 10:00 a.m. (ET) to discuss its third quarter 2012 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 2012 earnings on February 1, 2013 before markets open, followed by a conference call at 10:00 a.m. (ET) to discuss results. The date is tentative and will be confirmed approximately three weeks prior to the official earnings release date.

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

3/12

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 adult incontinence products. The foundation of its business is a network of world class wood fiber converting assets that produce papergrade, fluff and specialty pulps. The majority of its pulp production is consumed internally to manufacture paper and consumer products. Domtar is the largest integrated marketer of uncoated freesheet paper in North America with recognized brands such as Cougar^®, Lynx^® Opaque Ultra, Husky^® Opaque Offset, First Choice^® and Domtar EarthChoice^®. Domtar is also a leading marketer and producer of a complete line of incontinence care products marketed primarily under the Attends^® brand name. Domtar owns and operates Ariva^®, an extensive network of strategically located paper and printing supplies distribution facilities. In 2011, Domtar had sales of US$5.6 billion from nearly 50 countries. The Company employs approximately 9,300 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.

- (30) -

4/12

Domtar Corporation

Highlights

(In millions of dollars, unless otherwise noted)


	Three months ended September 30 2012			Three months ended September 30 2011			Nine months ended September 30 2012			Nine months ended September 30 2011
	(Unaudited)
		$			$			$			$
Selected Segment Information
Sales
Pulp and Paper		1,153			1,246			3,476			3,776
Distribution		167			197			528			604
Personal Care		111			17			288			17

Total for reportable segments		1,431			1,460			4,292			4,397
Intersegment sales—Pulp and Paper		(42	)		(43	)		(137	)		(154	)

Consolidated sales		1,389			1,417			4,155			4,243

Depreciation and amortization and impairment and write-down of property, plant and equipment
Pulp and Paper		90			91			271			277
Distribution		—			1			3			3
Personal Care		6			1			15			1

Total for reportable segments		96			93			289			281
Impairment and write-down of property, plant and equipment—Pulp and Paper		—			8			2			73

Consolidated depreciation and amortization and impairment and write-down of property, plant and equipment		96			101			291			354

Operating income (loss)
Pulp and Paper		103			189			306			489
Distribution		(5	)		(1	)		(8	)		—
Personal Care		12			—			32			—
Corporate		(1	)		(1	)		(6	)		4

Consolidated operating income		109			187			324			493
Interest expense, net		20			25			109			67

Earnings before income taxes and equity earnings		89			162			215			426
Income tax expense		22			45			57			122
Equity loss, net of taxes		1			—			5			—

Net earnings		66			117			153			304

Per common share (in dollars)
Net earnings
Basic		1.85			2.96			4.21			7.43
Diluted		1.84			2.95			4.20			7.38
Weighted average number of common and exchangeable shares outstanding (millions)
Basic		35.7			39.5			36.3			40.9
Diluted		35.8			39.7			36.4			41.2

Cash flows provided from operating activities		206			257			411			711
Additions to property, plant and equipment		66			31			171			64

5/12

Domtar Corporation

Consolidated Statements of Earnings

(In millions of dollars, unless otherwise noted)


	Three months ended September 30 2012		Three months ended September 30 2011			Nine months ended September 30 2012		Nine months ended September 30 2011
	(Unaudited)
		$		$			$		$
Sales		1,389		1,417			4,155		4,243
Operating expenses
Cost of sales, excluding depreciation and amortization		1,100		1,055			3,263		3,132
Depreciation and amortization		96		93			289		281
Selling, general and administrative		80		75			268		253
Impairment and write-down of property, plant and equipment		—		8			2		73
Closure and restructuring costs		2		1			3		14
Other operating loss (income), net		2		(2	)		6		(3	)

		1,280		1,230			3,831		3,750

Operating income		109		187			324		493
Interest expense, net		20		25			109		67

Earnings before income taxes and equity earnings		89		162			215		426
Income tax expense		22		45			57		122
Equity loss, net of taxes		1		—			5		—

Net earnings		66		117			153		304

Per common share (in dollars)
Net earnings
Basic		1.85		2.96			4.21		7.43
Diluted		1.84		2.95			4.20		7.38
Weighted average number of common and exchangeable shares outstanding (millions)
Basic		35.7		39.5			36.3		40.9
Diluted		35.8		39.7			36.4		41.2

6/12

Domtar Corporation

Consolidated Balance Sheets at

(In millions of dollars)


	September 30 2012			December 31 2011
	(Unaudited)
		$			$
Assets
Current assets
Cash and cash equivalents		593			444
Receivables, less allowances of $5 and $5		674			644
Inventories		663			652
Prepaid expenses		34			22
Income and other taxes receivable		44			47
Deferred income taxes		124			125

Total current assets		2,132			1,934
Property, plant and equipment, at cost		8,794			8,448
Accumulated depreciation		(5,330	)		(4,989	)

Net property, plant and equipment		3,464			3,459
Goodwill		261			163
Intangible assets, net of amortization		347			204
Other assets		115			109

Total assets		6,319			5,869

Liabilities and shareholders’ equity
Current liabilities
Bank indebtedness		15			7
Trade and other payables		682			688
Income and other taxes payable		16			17
Long-term debt due within one year		7			4

Total current liabilities		720			716
Long-term debt		1,196			837
Deferred income taxes and other		997			927
Other liabilities and deferred credits		402			417
Shareholders’ equity
Exchangeable shares		49			49
Additional paid-in capital		2,210			2,326
Retained earnings		779			671
Accumulated other comprehensive loss		(34	)		(74	)

Total shareholders’ equity		3,004			2,972

Total liabilities and shareholders’ equity		6,319			5,869

7/12

Domtar Corporation

Consolidated Statements of Cash Flows

(In millions of dollars)


	Nine months ended September 30 2012			Nine months ended September 30 2011
	(Unaudited)
		$			$
Operating activities
Net earnings		153			304
Adjustments to reconcile net earnings to cash flows from operating activities
Depreciation and amortization		289			281
Deferred income taxes and tax uncertainties		13			56
Impairment and write-down of property, plant and equipment		2			73
Loss on repurchase of long-term debt		—			4
Net gains on disposals of property, plant and equipment and sale of business		—			(5	)
Stock-based compensation expense		3			3
Equity loss, net		5			—
Other		(11	)		—
Changes in assets and liabilities, excluding the effects of acquisition and sale of businesses
Receivables		(1	)		(56	)
Inventories		20			20
Prepaid expenses		(7	)		(4	)
Trade and other payables		(80	)		4
Income and other taxes		6			27
Difference between employer pension and other post-retirement contributions and pension and other post-retirement expense		7			(7	)
Other assets and other liabilities		12			11

Cash flows provided from operating activities		411			711

Investing activities
Additions to property, plant and equipment		(171	)		(64	)
Proceeds from disposals of property, plant and equipment		—			34
Proceeds from sale of business		—			10
Acquisition of businesses, net of cash acquired		(293	)		(288	)
Investment in joint venture		(5	)		—

Cash flows used for investing activities		(469	)		(308	)

Financing activities
Dividend payments		(42	)		(36	)
Net change in bank indebtedness		8			(7	)
Issuance of long-term debt		548			—
Repayment of long-term debt		(190	)		(17	)
Debt issue and tender offer costs		—			(7	)
Stock repurchase		(116	)		(415	)
Other		(1	)		10

Cash flows provided from (used for) financing activities		207			(472	)

Net increase (decrease) in cash and cash equivalents		149			(69	)
Translation adjustments related to cash and cash equivalents		—			—
Cash and cash equivalents at beginning of period		444			530

Cash and cash equivalents at end of period		593			461

Supplemental cash flow information
Net cash payments for:
Interest (including $47 million of tender offer premiums in 2012)		92			51
Income taxes paid		60			42

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 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.


			2012												2011
			Q1			Q2			Q3			YTD			Q1			Q2			Q3			Q4			YTD
Reconciliation of “Earnings before items” to Net earnings
	Net earnings	($)		28			59			66			153			133			54			117			61			365
(+)	Impairment and write-down of property, plant and equipment	($)		1			—			—			1			2			38			4			9			53
(+)	Closure and restructuring costs	($)		1			—			1			2			8			1			1			23			33
(-)	Net losses (gains) on disposals of property, plant and equipment and sale of business	($)		—			—			—			—			(5	)		5			(3	)		—			(3	)
(+)	Impact of purchase accounting	($)		1			—			—			1			—			—			1			—			1
(+)	Loss on repurchase of long-term debt	($)		30			—			—			30			—			—			3			—			3
(=)	Earnings before items	($)		61			59			67			187			138			98			123			93			452
(/)	Weighted avg. number of common and exchangeable shares outstanding (diluted)	(millions)		37.0			36.6			35.8			36.4			42.4			41.4			39.7			37.4			40.2
(=)	Earnings before items per diluted share	($)		1.65			1.61			1.87			5.14			3.25			2.37			3.10			2.49			11.24

Reconciliation of “EBITDA” and “EBITDA before items” to Net earnings
	Net earnings	($)		28			59			66			153			133			54			117			61			365
(+)	Equity loss, net of taxes	($)		2			2			1			5			—			—			—			7			7
(+)	Income tax expense	($)		8			27			22			57			57			20			45			11			133
(+)	Interest expense, net	($)		71			18			20			109			21			21			25			20			87
(=)	Operating income	($)		109			106			109			324			211			95			187			99			592
(+)	Depreciation and amortization	($)		97			96			96			289			93			95			93			95			376
(+)	Impairment and write-down of property, plant and equipment	($)		2			—			—			2			3			62			8			12			85
(-)	Net losses (gains) on disposals of property, plant and equipment and sale of business	($)		—			—			—			—			(7	)		6			(4	)		(1	)		(6	)
(=)	EBITDA	($)		208			202			205			615			300			258			284			205			1,047
(/)	Sales	($)		1,398			1,368			1,389			4,155			1,423			1,403			1,417			1,369			5,612
(=)	EBITDA margin	(%)		15	%		15	%		15	%		15	%		21	%		18	%		20	%		15	%		19	%
	EBITDA	($)		208			202			205			615			300			258			284			205			1,047
(+)	Closure and restructuring costs	($)		1			—			2			3			11			2			1			38			52
(+)	Impact of purchase accounting	($)		1			—			—			1			—			—			1			—			1
(=)	EBITDA before items	($)		210			202			207			619			311			260			286			243			1,100
(/)	Sales	($)		1,398			1,368			1,389			4,155			1,423			1,403			1,417			1,369			5,612
(=)	EBITDA margin before items	(%)		15	%		15	%		15	%		15	%		22	%		19	%		20	%		18	%		20	%

Reconciliation of “Free cash flow” to Cash flow provided from operating activities
	Cash flow provided from operating activities	($)		30			175			206			411			148			306			257			172			883
(-)	Additions to property, plant and equipment	($)		(29	)		(76	)		(66	)		(171	)		(13	)		(20	)		(31	)		(80	)		(144	)
(=)	Free cash flow	($)		1			99			140			240			135			286			226			92			739

“Net debt-to-total capitalization” computation
	Bank indebtedness	($)		13			22			15						25			25			17			7
(+)	Long-term debt due within one year	($)		6			6			7						2			2			5			4
(+)	Long-term debt	($)		952			950			1,196						825			824			837			837
(=)	Debt	($)		971			978			1,218						852			851			859			848
(-)	Cash and cash equivalents	($)		(315	)		(276	)		(593	)					(604	)		(742	)		(461	)		(444	)
(=)	Net debt	($)		656			702			625						248			109			398			404
(+)	Shareholders’ equity	($)		3,009			2,948			3,004						3,288			3,194			2,999			2,972
(=)	Total capitalization	($)		3,665			3,650			3,629						3,536			3,303			3,397			3,376
	Net debt	($)		656			702			625						248			109			398			404
(/)	Total capitalization	($)		3,665			3,650			3,629						3,536			3,303			3,397			3,376
(=)	Net debt-to-total capitalization	(%)		18	%		19	%		17	%					7	%		3	%		12	%		12	%

“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.

9/12

Domtar Corporation

Quarterly Reconciliation of Non-GAAP Financial Measures—By Segment 2012

(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														Distribution														Personal Care ⁽¹⁾														Corporate													Total
			Q1’12			Q2’12			Q3’12			Q4’12		YTD			Q1’12			Q2’12			Q3’12			Q4’12		YTD			Q1’12			Q2’12			Q3’12			Q4’12		YTD			Q1’12			Q2’12		Q3’12			Q4’12		YTD			Q1’12			Q2’12			Q3’12			Q4’12		YTD
Reconciliation of Operating income (loss) to “Operating income (loss) before items”
	Operating income (loss)	($)		107			96			103			—		306			(1	)		(2	)		(5	)		—		(8	)		8			12			12			—		32			(5	)		—		(1	)		—		(6	)		109			106			109			—		324
(+)	Impairment and write-down of property, plant and equipment	($)		2			—			—			—		2			—			—			—			—		—			—			—			—			—		—			—			—		—			—		—			2			—			—			—		2
(+)	Closure and restructuring costs	($)		1			—			—			—		1			—			—			1			—		1			—			—			1			—		1			—			—		—			—		—			1			—			2			—		3
(+)	Impact of purchase accounting	($)		—			—			—			—		—			—			—			—			—		—			1			—			—			—		1			—			—		—			—		—			1			—			—			—		1
(=)	Operating income (loss) before items	($)		110			96			103			—		309			(1	)		(2	)		(4	)		—		(7	)		9			12			13			—		34			(5	)		—		(1	)		—		(6	)		113			106			111			—		330
Reconciliation of “Operating income (loss) before items” to “EBITDA before items”
	Operating income (loss) before items	($)		110			96			103			—		309			(1	)		(2	)		(4	)		—		(7	)		9			12			13			—		34			(5	)		—		(1	)		—		(6	)		113			106			111			—		330
(+)	Depreciation and amortization	($)		93			88			90			—		271			1			2			—			—		3			3			6			6			—		15			—			—		—			—		—			97			96			96			—		289
(=)	EBITDA before items	($)		203			184			193			—		580			—			—			(4	)		—		(4	)		12			18			19			—		49			(5	)		—		(1	)		—		(6	)		210			202			207			—		619
(/)	Sales	($)		1,191			1,132			1,153			—		3,476			189			172			167			—		528			70			107			111			—		288			—			—		—			—		—			1,450			1,411			1,431			—		4,292
(=)	EBITDA margin before items	(%)		17	%		16	%		17	%		—		17	%		—			—			—			—		—			17	%		17	%		17	%		—		17	%		—			—		—			—		—			14	%		14	%		14	%		—		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 March 1, 2012, the Company acquired 100% of the shares of Attends Healthcare Limited.

On May 1, 2012, the Company acquired 100% of the shares of EAM Corporation.

10/12

Domtar Corporation

Quarterly Reconciliation of Non-GAAP Financial Measures—By Segment 2011

(In millions of dollars, unless otherwise noted)


			Pulp and Paper															Distribution															Personal Care ⁽¹⁾													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			Q1’11			Q2’11			Q3’11			Q4’11			YTD
Reconciliation of Operating income (loss) to “Operating income (loss) before items”
	Operating income (loss)	($)		209			91			189			92			581			3			(2	)		(1	)		—			—			—		—		—			7			7			(1	)		6			(1	)		—		4			211			95			187			99			592
(+)	Impairment and write-down of property, plant and equipment	($)		3			62			8			12			85			—			—			—			—			—			—		—		—			—			—			—			—			—			—		—			3			62			8			12			85
(+)	Closure and restructuring costs	($)		11			2			1			37			51			—			—			—			1			1			—		—		—			—			—			—			—			—			—		—			11			2			1			38			52
(-)	Net losses (gains) on disposals of property, plant and equipment and sale of business	($)		(4	)		12			(4	)		(1	)		3			(3	)		—			—			—			(3	)		—		—		—			—			—			—			(6	)		—			—		(6	)		(7	)		6			(4	)		(1	)		(6	)
(+)	Impact of purchase accounting	($)		—			—			—			—			—			—			—			—			—			—			—		—		1			—			1			—			—			—			—		—			—			—			1			—			1
(=)	Operating income (loss) before items	($)		219			167			194			140			720			—			(2	)		(1	)		1			(2	)		—		—		1			7			8			(1	)		—			(1	)		—		(2	)		218			165			193			148			724
Reconciliation of “Operating income (loss) before items” to “EBITDA before items”
	Operating income (loss) before items	($)		219			167			194			140			720			—			(2	)		(1	)		1			(2	)		—		—		1			7			8			(1	)		—			(1	)		—		(2	)		218			165			193			148			724
(+)	Depreciation and amortization	($)		92			94			91			91			368			1			1			1			1			4			—		—		1			3			4			—			—			—			—		—			93			95			93			95			376
(=)	EBITDA before items	($)		311			261			285			231			1,088			1			(1	)		—			2			2			—		—		2			10			12			(1	)		—			(1	)		—		(2	)		311			260			286			243			1,100
(/)	Sales	($)		1,269			1,261			1,246			1,177			4,953			217			190			197			177			781			—		—		17			54			71			—			—			—			—		—			1,486			1,451			1,460			1,408			5,805
(=)	EBITDA margin before items	(%)		25	%		21	%		23	%		20	%		22	%		—			—			—			1	%		—			—		—		12	%		19	%		17	%		—			—			—			—		—			21	%		18	%		20	%		17	%		19	%

⁽¹⁾	On September 1, 2011, the Company acquired 100% of the shares of Attends Healthcare Inc.

11/12

Domtar Corporation

Supplemental Segmented Information

(In millions of dollars, unless otherwise noted)


		2012												2011
		Q1			Q2			Q3			YTD			Q1			Q2			Q3			Q4			YTD
Pulp and Paper Segment
Sales	($)		1,191			1,132			1,153			3,476			1,269			1,261			1,246			1,177			4,953
Intersegment sales—Pulp and Paper	($)		(52	)		(43	)		(42	)		(137	)		(63	)		(48	)		(43	)		(39	)		(193	)
Operating income	($)		107			96			103			306			209			91			189			92			581
Depreciation and amortization	($)		93			88			90			271			92			94			91			91			368
Impairment and write-down of property, plant and equipment	($)		2			—			—			2			3			62			8			12			85
Papers
Papers Production	(‘000 ST)		870			832			788			2,490			899			890			875			871			3,535
Papers Shipments	(‘000 ST)		870			819			826			2,515			913			901			889			831			3,534
Communication Papers	(‘000 ST)		756			705			709			2,170			816			794			784			729			3,123
Specialty and Packaging	(‘000 ST)		114			114			117			345			97			107			105			102			411
Pulp
Pulp Shipments^(a)	(‘000 ADMT)		389			368			415			1,172			375			361			358			403			1,497
Hardwood Kraft Pulp	(%)		15	%		16	%		20	%		12	%		20	%		19	%		18	%		19	%		19	%
Softwood Kraft Pulp	(%)		61	%		57	%		55	%		41	%		55	%		54	%		57	%		58	%		57	%
Fluff Pulp	(%)		24	%		27	%		25	%		18	%		25	%		27	%		25	%		23	%		24	%
Distribution Segment
Sales	($)		189			172			167			528			217			190			197			177			781
Operating income (loss)	($)		(1	)		(2	)		(5	)		(8	)		3			(2	)		(1	)		—			—
Depreciation and amortization	($)		1			2			—			3			1			1			1			1			4
Personal Care Segment
Sales	($)		70			107			111			288			—			—			17			54			71
Operating income	($)		8			12			12			32			—			—			—			7			7
Depreciation and amortization	($)		3			6			6			15			—			—			1			3			4
Average Exchange Rates	$US/$CAN		1.001			1.010			0.995			1.002			0.986			0.968			0.980			1.023			0.989
	$CAN/$US		0.999			0.990			1.006			0.998			1.014			1.034			1.021			0.977			1.011
	€EUR/$US		1.312			1.283			1.252			1.282			—			—			—			—			—

(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 and the term “ADMT” refers to an air dry metric ton.

12/12

Domtar CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - October 25, 2012

Attached files

Domtar CORP Reports