(All financial information is in U.S. dollars,
and all earnings per share results are diluted, unless otherwise
noted).
- Fourth quarter 2017 net loss of $5.42
per share; earnings before items1 of $0.64 per share
- Price increases announced for pulp and
several uncoated freesheet grades
- Announced a 4.8% dividend increase
Domtar Corporation (NYSE: UFS) (TSX: UFS) today reported a net
loss of $340 million ($5.42 per share) for the fourth quarter
of 2017 compared to net earnings of $70 million ($1.11 per
share) for the third quarter of 2017 and net earnings of
$47 million ($0.75 per share) for the fourth quarter of 2016.
Sales for the fourth quarter of 2017 were $1.3 billion.
Excluding items listed below, the Company had earnings before
items1 of $40 million ($0.64 per share) for the fourth quarter
of 2017 compared to earnings before items1 of $65 million
($1.03 per share) for the third quarter of 2017 and earnings before
items1 of $47 million ($0.75 per share) for the fourth quarter
of 2016.
Fourth quarter 2017
items:
- Non-cash goodwill impairment charge
associated with Personal Care of $578 million ($573 million after
tax);
- Closure and restructuring costs of
$2 million ($1 million after tax);
- Deferred tax benefit of $186 million
related to the U.S. Tax Cuts and Jobs Act of 2017 (U.S. Tax
Reform); and
- Net gain on disposal of property, plant
& equipment of $9 million ($8 million after tax).
Third quarter 2017
items:
- Gain on disposal of property, plant
& equipment of $4 million ($3 million after tax); and
- Partial reversal of contingent
consideration related to an acquisition of $2 million ($2 million
after tax).
Fourth quarter 2016
items:
- Closure and restructuring impact of
$(1) million ($(1) million after tax); and
- Negative impact of purchase accounting
of $1 million ($1 million after tax).
FISCAL YEAR 2017 HIGHLIGHTS
As a result of its annual goodwill and indefinite life
intangible assets impairment tests, the Company recorded a non-cash
goodwill impairment charge of $578 million associated with Personal
Care. Growing competitive market pressures in the healthcare and
retail markets over the last year, including the entry of new
competitors in the private label category, excess industry capacity
and the decline of healthcare spending by governmental agencies,
are expected to result in lower than previously anticipated sales
and operating margins. In light of this weakened market outlook,
our current business forecast was not sufficient to support the
carrying value of the goodwill associated with Personal Care,
leading to the impairment.
Commenting on the full-year results, John D. Williams, President
and Chief Executive Officer said, “We generated nearly $450 million
of operating cash flow and continued our solid track record of
rewarding shareholders with a high payout ratio while maintaining
financial flexibility. Our performance, combined with our
confidence in our cash flow generating capabilities, enable us to
announce a 4.8% dividend increase. Looking ahead, we remain focused
on maximizing long-term profitability and value creation.”
QUARTERLY REVIEW
“As expected, higher maintenance and seasonally higher operating
costs impacted our fourth quarter Pulp and Paper results,” said
John D. Williams, President and Chief Executive Officer.
“Nevertheless, pulp price realizations were higher and we shipped
record volumes of tissue grade and fluff pulp. Recently announced
price increases across a number of pulp and paper grades are
expected to drive continued momentum into 2018.”
Commenting on Personal Care, Mr. Williams added, “While we had
good results in 2017, we have concluded that the performance of our
Personal Care business will continue to be impacted by an
increasingly competitive market. We remain optimistic about the
long-term growth trajectory of the absorbent hygiene market;
however, this increasingly competitive market will negatively
impact our sales, and we expect the environment to remain
challenging for the foreseeable future. Importantly, the goodwill
impairment charge is non-cash. It does not alter our current
financial flexibility, and our overall cash generating capabilities
remains strong.”
Operating loss was $512 million in the fourth quarter of
2017 compared to operating income of $89 million in the third
quarter of 2017. Depreciation and amortization totaled
$82 million in the fourth quarter of 2017.
Operating income before items1 was $59 million in the
fourth quarter of 2017 compared to an operating income before
items1 of $83 million in the third quarter of 2017.
(In millions of dollars)
4Q 2017 3Q
2017 Sales $ 1,337 $ 1,292 Operating income (loss) Pulp
and Paper segment 58 93 Personal Care segment (564 ) 8 Corporate
(6 ) (12 ) Total operating (loss) income (512 ) 89
Operating income before items1 59 83 Depreciation and amortization
82 80
The operating loss in the fourth quarter of 2017 was a result of
the goodwill impairment charge, higher maintenance and raw material
costs, lower productivity and higher costs, when compared to the
operating income in the third quarter of 2017. These factors were
partially offset by higher selling prices and volume and favorable
exchange rates.
When compared to the third quarter of 2017, manufactured paper
shipments were up 1% and pulp shipments increased 9%. The
shipments-to-production ratio for paper was 100% in the fourth
quarter of 2017, compared to 97% in the third quarter of 2017.
Paper inventories increased by 1,000 tons and pulp inventories
decreased by 50,000 metric tons when compared to the third quarter
of 2017.
LIQUIDITY AND CAPITAL
Cash flow from operating activities amounted to
$125 million and capital expenditures were $71 million,
resulting in free cash flow1 of $54 million for the fourth
quarter of 2017. Domtar’s net debt-to-total capitalization ratio1
stood at 28% at December 31, 2017 compared to 26% at September
30, 2017.
In 2017, cash flow from operating activities amounted to
$449 million and capital expenditures were $182 million,
resulting in free cash flow1 of $267 million.
DECLARATION OF DIVIDEND
The Board of Directors approved a 4.8% increase to its quarterly
dividend (from $0.415 per share to $0.435 per share) on its common
stock. The Board of Directors declared a dividend payable on April
16, 2018 to stockholders of record as of the close of business on
April 2, 2018.
OUTLOOK
In 2018, costs, including freight, labor and raw materials, are
expected to marginally increase. Our paper shipments should benefit
from expected industry capacity closures, while paper prices should
improve following the recently-announced price increases and pulp
will benefit from volume growth in fluff. Personal Care is expected
to be negatively impacted by an unfavorable tender balance,
resulting in lower volume and operating margins.
EARNINGS CONFERENCE CALL
The Company will hold a conference call today at 10:00 a.m. (ET)
to discuss its fourth quarter and fiscal year 2017 financial
results. Financial analysts are invited to participate in the call
by dialing 1 (800) 499-4035 (toll free - North America) or 1 (416)
204-9269 (International) at least 10 minutes before start time,
while media and other interested individuals are invited to listen
to the live webcast on the Domtar Corporation website at
www.domtar.com.
The Company will release its first quarter 2018 earnings results
on May 1, 2018 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 is a leading provider of a wide variety of fiber-based
products including communication, specialty and packaging papers,
market pulp and absorbent hygiene products. With approximately
10,000 employees serving more than 50 countries around the world,
Domtar is driven by a commitment to turn sustainable wood fiber
into useful products that people rely on every day. Domtar’s annual
sales are approximately $5.2 billion, and its common stock is
traded on the New York and Toronto Stock Exchanges. Domtar’s
principal executive office is in Fort Mill, South Carolina. To
learn more, visit www.domtar.com.
Forward-Looking Statements
Statements in this release about our plans, expectations and
future performance, including the statements by Mr. Williams and
those contained under “Outlook,” are “forward-looking statements.”
Actual results may differ materially from those suggested by these
statements for a number of reasons, including changes in customer
demand and pricing, changes in manufacturing costs, future
acquisitions and divestitures, including facility closings, and the
other reasons identified under “Risk Factors” in our Form 10-K for
2016 as filed with the SEC and as updated by subsequently-filed
Form 10-Qs. Except to the extent required by law, we expressly
disclaim any obligation to update or revise these forward-looking
statements to reflect new events or circumstances or otherwise.
Domtar CorporationHighlights(In millions of
dollars, unless otherwise noted)
Three months ended Three months ended
Twelve months ended Twelve months ended
December
31, December 31,
December 31, December 31,
2017
2016
2017 2016 (Unaudited)
$ $
$ $
Selected Segment Information
Sales Pulp and Paper
1,090 1,046
4,216 4,239
Personal Care
262 242
1,005
917 Total for reportable segments
1,352 1,288
5,221 5,156 Intersegment sales
(15 )
(14 )
(64 ) (58 )
Consolidated sales 1,337 1,274
5,157 5,098
Depreciation and amortization
of property, plant and
equipment
Pulp and Paper
64 68
254 284 Personal Care
18 17
67 64 Total for reportable
segments
82 85
321 348 Impairment of goodwill -
Personal Care
578 —
578 — Impairment of property,
plant
and equipment - Pulp and Paper
— —
—
29
Consolidated depreciation and amortization and
impairment of goodwill and property,
plant and
equipment
660 85
899 377
Operating income (loss) Pulp and Paper
58 74
250 217 Personal Care
(564 ) 13
(527
) 57 Corporate
(6 ) (13 )
(40 ) (51 )
Consolidated operating (loss)
income (512 ) 74
(317 ) 223
Interest expense, net
16 17
66
66
(Loss) earnings before income taxes (528
) 57
(383 ) 157 Income tax (benefit) expense
(188 ) 10
(171 )
29
Net (loss) earnings (340 )
47
(212 ) 128 Per common share
(in dollars) Net (loss) earnings Basic
(5.42 ) 0.75
(3.38 ) 2.04 Diluted
(5.42 ) 0.75
(3.38 ) 2.04 Weighted average number of common
shares outstanding (millions)
Basic
62.7 62.6
62.7 62.6 Diluted
62.7
62.7
62.7 62.7 Cash flows from
operating activities
125 155
449 465 Additions to
property, plant and equipment
71 45
182 347
Domtar CorporationConsolidated Statements of Earnings
(Loss)(In millions of dollars, unless otherwise noted)
Three months ended Three months ended
Twelve months ended Twelve months ended
December
31, December 31,
December 31, December 31,
2017
2016
2017 2016 (Unaudited)
$ $
$ $
Sales 1,337 1,274
5,157
5,098
Operating expenses Cost of sales, excluding
depreciation and amortization
1,076 1,003
4,131 4,035
Depreciation and amortization
82 85
321 348 Selling,
general and administrative
119 113
456 427 Impairment
of goodwill and property, plant and
equipment
578 —
578 29 Closure and restructuring costs
2
(1 )
2 32 Other operating (income) loss, net
(8 ) —
(14 ) 4
1,849 1,200
5,474 4,875
Operating (loss) income (512 ) 74
(317
) 223 Interest expense, net
16 17
66 66
(Loss) earnings before income
taxes (528 ) 57
(383 ) 157 Income
tax (benefit) expense
(188 ) 10
(171 ) 29
Net (loss)
earnings (340 ) 47
(212 ) 128
Per common share (in
dollars) Net (loss) earnings Basic
(5.42 ) 0.75
(3.38 ) 2.04 Diluted
(5.42 ) 0.75
(3.38 ) 2.04 Weighted average number of common
shares outstanding (millions)
Basic
62.7 62.6
62.7 62.6 Diluted
62.7 62.7
62.7 62.7
Domtar CorporationConsolidated Balance Sheets
at(In millions of dollars)
December 31, December 31,
2017 2016
(Unaudited)
$ $
Assets Current
assets Cash and cash equivalents
139 125 Receivables,
less allowances of $7 and $7
704 613 Inventories
757
759 Prepaid expenses
33 40 Income and other taxes receivable
28 31
Total current assets
1,661 1,568
Property, plant and equipment, net
2,765 2,825
Goodwill — 550
Intangible
assets, net 633 608
Other assets
157 129
Total assets 5,216
5,680
Liabilities and shareholders' equity Current
liabilities Bank indebtedness
— 12 Trade and other
payables
716 656 Income and other taxes payable
24 22
Long-term debt due within one year
1 63
Total current liabilities 741 753
Long-term
debt 1,129 1,218
Deferred income taxes and other
491 675
Other liabilities and deferred credits
326 358
Shareholders' equity Common stock
1 1
Additional paid-in capital
1,969 1,963 Retained earnings
895 1,211 Accumulated other comprehensive loss
(336 ) (499 )
Total shareholders'
equity 2,529 2,676
Total liabilities
and shareholders' equity 5,216 5,680
Domtar CorporationConsolidated Statements of Cash
Flows(In millions of dollars)
For the twelve months ended
December 31, 2017
December 31, 2016 (Unaudited)
$ $
Operating
activities Net (loss) earnings
(212
) 128 Adjustments to reconcile net (loss) earnings to cash
flows from operating activities Depreciation and amortization
321 348 Deferred income taxes and tax uncertainties
(207 ) 9 Impairment of goodwill and property, plant
and equipment
578 29 Net gains on disposals of property,
plant and equipment
(13 ) — Stock-based compensation
expense
6 7 Other
2 (2 ) Changes in assets and
liabilities, excluding the effect of sale and acquisition
of businesses
Receivables
(72 ) 18 Inventories
21 14 Prepaid
expenses
5 5 Trade and other payables
35 (51 ) Income
and other taxes
8 (18 ) Difference between employer pension
and other post-retirement
contributions and pension and other
post-retirement expense
(32 ) (21 ) Other assets and other liabilities
9 (1 ) Cash flows from operating activities
449 465
Investing activities Additions to
property, plant and equipment
(182 ) (347 ) Proceeds
from disposals of property, plant and equipment and sale of
business
19 1 Acquisition of businesses, net of cash
acquired
(8 ) (46 ) Other
— 1
Cash flows used for investing activities
(171
) (391 )
Financing activities Dividend
payments
(104 ) (102 ) Stock repurchase
— (10
) Net change in bank indebtedness
(12 ) 12 Change in
revolving credit facility
(50 ) — Proceeds from
receivables securitization facility
45 140 Repayments of
receivables securitization facility
(90 ) (70 )
Repayments of long-term debt
(64 ) (40 ) Other
1 (3 ) Cash flows used for financing activities
(274 ) (73 )
Net increase in cash
and cash equivalents 4 1 Impact of foreign exchange on
cash
10 (2 ) Cash and cash equivalents at beginning of year
125 126
Cash and cash equivalents at end of
year 139 125
Supplemental cash flow
information Net cash payments for: Interest
58 64 Income
taxes
33 40
Domtar CorporationQuarterly 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 are useful to understand our operating
performance and benchmark with peers within the industry. The
Company calculates “Earnings before items” and “EBITDA before
items” by excluding the after-tax (pre-tax) effect of specified
items. These metrics are presented as a complement to enhance the
understanding of operating results but not in substitution for GAAP
results.
2017 2016 Q1 Q2
Q3 Q4
Year Q1 Q2 Q3
Q4
Year Reconciliation of "Earnings before
items" to Net earnings (loss)
Net
earnings (loss) ($) 20 38 70 (340 )
(212 ) 4 18 59 47
128 (+) Impairment of goodwill and property, plant and
equipment ($) — — — 573
573 16 2 4 —
22 (+) Closure
and restructuring costs ($) — — — 1
1 2 16 8 (1 )
25
(+) Litigation settlement ($) — — — —
— — 2 — —
2 (-)
Net gains on disposals of property, plant and equipment ($) — — (3
) (8 )
(11 ) — — — —
— (-) Reversal of
contingent consideration ($) — — (2 ) —
(2 ) — — — —
— (+) Impact of purchase accounting ($) — — — —
— — —
— 1
1 (-) U.S. Tax Reform ($) — — — (186 )
(186
) — — — —
— (=)
Earnings before items ($) 20
38 65 40
163 22 38 71 47
178 (/) Weighted avg. number
of common shares outstanding (diluted) (millions) 62.8 62.7 62.9
62.7
62.7 62.8 62.7 62.7 62.7
62.7 (=)
Earnings
before items per diluted share ($) 0.32 0.61 1.03 0.64
2.60 0.35 0.61 1.13 0.75
2.84
Reconciliation of "EBITDA" and "EBITDA before items" to
Net earnings (loss)
Net earnings (loss) ($) 20 38 70 (340 )
(212 ) 4 18
59 47
128 (+) Income tax expense (benefit) ($) 5 9 3 (188 )
(171 ) (3 ) 6 16 10
29 (+) Interest expense,
net ($) 17 17 16 16
66 17 15 17 17
66 (=) Operating
income (loss) ($) 42 64 89 (512 )
(317 ) 18 39 92 74
223 (+) Depreciation and amortization ($) 80 79 80 82
321 89 87 87 85
348 (+) Impairment of goodwill and
property, plant and equipment ($) — — — 578
578 21 3 5 —
29 (-) Net gains on disposals of property, plant and
equipment ($) — — (4 ) (9 )
(13 ) — — — —
—
(=)
EBITDA ($) 122 143 165 139
569 128 129 184 159
600 (/) Sales ($) 1,304 1,224 1,292 1,337
5,157 1,287
1,267 1,270 1,274
5,098 (=)
EBITDA margin (%) 9 % 12
% 13 % 10 %
11 % 10 % 10 % 14 % 12 %
12
%
EBITDA
($) 122 143 165 139
569 128 129 184 159
600 (+)
Closure and restructuring costs ($) — — — 2
2 2 21 10 (1 )
32 (+) Litigation settlement ($) — — — —
— — 2 — —
2 (-) Reversal of contingent consideration ($) — — (2 ) —
(2 ) — — — —
— (+) Impact of purchase
accounting ($) — — — —
— — — — 1
1 (=)
EBITDA
before items ($) 122 143 163 141
569 130 152 194 159
635 (/) Sales ($) 1,304 1,224 1,292 1,337
5,157 1,287
1,267 1,270 1,274
5,098 (=)
EBITDA margin before
items (%) 9 % 12 % 13 % 11 %
11 % 10 % 12 % 15 %
12 %
12 % Reconciliation of "Free cash
flow" to Cash flows from operating activities Cash flows from
operating activities ($) 91 121 112 125
449 97 118 95 155
465 (-) Additions to property, plant and equipment ($) (34 )
(37 ) (40 ) (71 )
(182 ) (100 ) (119 ) (83 ) (45 )
(347 ) (=)
Free cash flow ($) 57 84 72 54
267 (3 ) (1 ) 12 110
118 "Net debt-to-total
capitalization" computation Bank indebtedness ($) 2 — — — 6 1 —
12 (+) Long-term debt due within one year ($) 64 1 1 1 41 64 63 63
(+) Long-term debt ($) 1,188 1,203 1,164 1,129 1,211 1,237 1,309
1,218 (=) Debt ($) 1,254 1,204 1,165 1,130 1,258 1,302 1,372 1,293
(-) Cash and cash equivalents ($) (111 ) (124 ) (143 ) (139 ) (97 )
(111 ) (168 ) (125 ) (=)
Net debt ($) 1,143 1,080 1,022 991
1,161 1,191 1,204 1,168 (+) Shareholders' equity ($) 2,685 2,770
2,886 2,529 2,736 2,716 2,754 2,676 (=) Total capitalization ($)
3,828 3,850 3,908 3,520 3,897 3,907 3,958 3,844 Net debt ($) 1,143
1,080 1,022 991 1,161 1,191 1,204 1,168 (/) Total capitalization
($) 3,828 3,850 3,908 3,520 3,897 3,907 3,958 3,844 (=)
Net
debt-to-total capitalization (%) 30 % 28 % 26 % 28 % 30 % 30 %
30 % 30 %
“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 (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.
Domtar CorporationQuarterly Reconciliation of Non-GAAP
Financial Measures – By Segment 2017(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
are useful to understand our operating performance and benchmark
with peers within the industry. The Company calculates the
segmented “Operating income (loss) before items” by excluding the
pre-tax effect of specified items. These metrics are presented as a
complement to enhance the understanding of operating results but
not in substitution for GAAP results.
Pulp and Paper Personal
Care Corporate Total Q1'17
Q2'17 Q3'17 Q4'17
Year Q1'17
Q2'17 Q3'17 Q4'17
Year Q1'17
Q2'17 Q3'17 Q4'17
Year Q1'17
Q2'17 Q3'17 Q4'17
Year
Reconciliation of Operating income (loss)
to "Operating income (loss) before
items"
Operating income (loss) ($) 34 65 93 58
250 16 13 8 (564)
(527) (8) (14) (12) (6)
(40) 42 64 89 (512)
(317) (+) Impairment of goodwill ($) — — — —
— — — —
578
578 — — — — — — — — 578
578 (-) Net gains on
disposals of property, plant and
equipment
($) — — (4) —
(4) — — — — — — — — (9)
(9) — — (4) (9)
(13) (-) Reversal of contingent consideration ($) — — — —
— — — — —
— — — (2) —
(2) — — (2) —
(2)
(+) Closure and restructuring costs ($) — — — —
— — — — 2
2 — — — —
— — — — 2
2 (=)
Operating income
(loss) before items ($) 34 65 89 58
246 16 13 8 16
53 (8) (14) (14) (15)
(51) 42 64 83 59
248
Reconciliation of "Operating income (loss)
before items" to "EBITDA before
items"
Operating income (loss) before items ($) 34 65 89 58
246 16
13 8 16
53 (8) (14) (14) (15)
(51) 42 64 83 59
248 (+) Depreciation and amortization ($) 64 63 63 64
254 16 16 17 18
67 — — — —
— 80 79 80 82
321 (=)
EBITDA before items ($) 98 128 152 122
500 32 29 25 34
120 (8) (14) (14) (15)
(51)
122 143 163 141
569 (/) Sales ($) 1,073 999 1,054 1,090
4,216 249 241 253 262
1,005 — — — —
— 1,322
1,240 1,307 1,352
5,221 (=)
EBITDA margin before
items (%) 9% 13% 14% 11%
12% 13% 12% 10% 13%
12%
— — — —
— 9% 12% 12% 10%
11%
“Operating income (loss) before items”, “EBITDA before items”
and “EBITDA margin before items” have no standardized meaning
prescribed by GAAP and are not necessarily comparable to similar
measures presented by other companies and therefore should not be
considered in isolation or as a substitute for Operating income
(loss) or any other earnings statement, cash flow statement or
balance sheet financial information prepared in accordance with
GAAP. It is important for readers to understand that certain items
may be presented in different lines by different companies on their
financial statements, thereby leading to different measures for
different companies.
Domtar Corporation
Quarterly Reconciliation of Non-GAAP Financial Measures – By
Segment 2016
(In millions of dollars, unless otherwise noted)
The following table sets forth certain non-U.S. generally
accepted accounting principles (“GAAP”) financial metrics
identified in bold as “Operating income (loss) before items”,
“EBITDA before items” and “EBITDA margin before items” by
reportable segment. Management believes that the financial metrics
are useful to understand our operating performance and benchmark
with peers within the industry. The Company calculates the
segmented “Operating income (loss) before items” by excluding the
pre-tax effect of specified items. These metrics are presented as a
complement to enhance the understanding of operating results but
not in substitution for GAAP results.
Pulp and Paper Personal
Care (1) Corporate Total
Q1'16 Q2'16 Q3'16 Q4'16
Year
Q1'16 Q2'16 Q3'16 Q4'16
Year
Q1'16 Q2'16 Q3'16 Q4'16
Year
Q1'16 Q2'16 Q3'16 Q4'16
Year
Reconciliation of Operating income (loss)
to "Operating income (loss) before
items"
Operating income (loss) ($) 19 35 89 74
217 14 15 15 13
57 (15) (11) (12) (13)
(51) 18 39 92 74
223
(+) Impairment of property, plant and equipment ($) 21 3 5 —
29 — — — —
— — — — —
— 21 3 5 —
29 (+)
Impact of purchase accounting ($) — — — —
— — — — 1
1
— — — —
— — — — 1
1 (+) Closure and restructuring
costs ($) 2 21 10 (2)
31 — — — 1
1 — — — —
— 2
21 10 (1)
32 (+) Litigation settlement ($) — — — —
—
— — — —
— — 2 — —
2 — 2 — —
2 (=)
Operating
income (loss) before items ($) 42 59 104 72
277 14 15 15
15
59 (15) (9) (12) (13)
(49) 41 65 107 74
287
Reconciliation of "Operating income (loss)
before items" to "EBITDA before
items"
Operating income (loss) before items ($) 42 59 104 72
277 14
15 15 15
59 (15) (9) (12) (13)
(49) 41 65 107 74
287 (+) Depreciation and amortization ($) 73 72 71 68
284 16 15 16 17
64 — — — —
— 89 87 87 85
348 (=)
EBITDA before items ($) 115 131 175 140
561 30 30 31 32
123 (15) (9) (12) (13)
(49)
130 152 194 159
635 (/) Sales ($) 1,085 1,054 1,054 1,046
4,239 216 228 231 242
917 — — — —
— 1,301
1,282 1,285 1,288
5,156 (=)
EBITDA margin before
items (%) 11% 12% 17% 13%
13% 14% 13% 13% 13%
13%
— — — —
— 10% 12% 15% 12%
12%
“Operating income (loss) before items”, “EBITDA before items”
and “EBITDA margin before items” have no standardized meaning
prescribed by GAAP and are not necessarily comparable to similar
measures presented by other companies and therefore should not be
considered in isolation or as a substitute for Operating income
(loss) or any other earnings statement, cash flow statement or
balance sheet financial information prepared in accordance with
GAAP. It is important for readers to understand that certain items
may be presented in different lines by different companies on their
financial statements, thereby leading to different measures for
different companies.
(1) On October 1, 2016, the Company acquired 100% of the shares
of Home Delivery Incontinent Supplies Co. in the United States.
Domtar CorporationSupplemental Segmented
Information(In millions of dollars, unless otherwise noted)
2017 2016 Q1 Q2 Q3
Q4
Year Q1 Q2 Q3 Q4
Year Pulp and Paper Segment
Sales ($) 1,073 999 1,054 1,090
4,216 1,085 1,054
1,054 1,046
4,239 Operating income ($) 34 65 93 58
250 19 35 89 74
217 Depreciation and
amortization
($) 64 63 63 64
254 73 72 71 68
284 Impairment of
property,
plant and equipment
($) — — — —
— 21 3 5 —
29 Paper Paper
Production ('000 ST) 709 715 745 724
2,893 785 715 726 714
2,940 Paper Shipments -
Manufactured
('000 ST) 745 698 722 726
2,891 786 752 744 739
3,021
Communication Papers ('000 ST) 622 582 597 600
2,401 657 627
620 618
2,522 Specialty and Packaging
Papers
('000 ST) 123 116 125 126
490 129 125 124 121
499
Paper Shipments - Sourced
from 3rd parties
('000 ST) 29 26 29 25
109 32 29 35 27
123 Paper
Shipments - Total ('000 ST) 774 724 751 751
3,000 818 781
779 766
3,144 Pulp Pulp Shipments(a) ('000 ADMT) 453
383 424 462
1,722 369 360 369 415
1,513 Pulp
Shipments mix(b): Hardwood Kraft Pulp (%) 4 % 3 % 7 % 5 %
5
% 5 % 4 % 4 % 8 %
5 % Softwood Kraft Pulp (%)
67 % 62 % 61 % 54 %
61 % 66 % 61 % 63 % 63 %
63 % Fluff Pulp (%) 29 % 35 % 32 % 41 %
34
% 29 % 35 % 33 % 29 %
32 % Personal
Care Segment Sales ($) 249 241 253 262
1,005 216 228 231
242
917 Operating income (loss) ($) 16 13 8 (564 )
(527 ) 14 15 15 13
57 Depreciation and
amortization
($) 16 16 17 18
67 16 15 16 17
64 Impairment of
goodwill ($) — — — 578
578 — — — —
—
Average Exchange Rates $US / $CAN 1.323 1.344 1.253 1.272
1.297 1.375 1.289 1.305 1.333
1.325 $CAN / $US 0.756
0.744 0.798 0.786
0.771 0.727 0.776 0.766 0.750
0.755
€ / $US 1.066 1.100 1.175 1.178
1.130 1.103 1.130 1.116
1.078
1.107
(a) Figures represent Pulp Shipments to third parties.(b)
Percentages include Pulp Shipments to our Personal Care
segment.
Note: the term “ST” refers to a short ton and the term “ADMT”
refers to an air dry metric ton.
1 Non-GAAP financial measure. Refer to the Reconciliation of
Non-GAAP Financial Measures in the appendix.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180208005625/en/
Domtar CorporationINVESTOR RELATIONSNicholas
Estrela, 514-848-5049DirectorInvestor RelationsorMEDIA
RELATIONSDavid Struhs, 803-802-8031Vice-PresidentCorporate
Services and Sustainability
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