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Press release from CNW Group

Domtar Corporation reports preliminary fourth quarter and fiscal year 2012 financial results

Friday, February 01, 2013

Domtar Corporation reports preliminary fourth quarter and fiscal year 2012 financial results07:30 EST Friday, February 01, 2013The conversion to specialty and packaging paper at the Marlboro mill nearing completion(All financial information is in U.S. dollars, and all earnings per share results are diluted, unless otherwise noted.)Fourth quarter 2012 net earnings of $0.54 per share, earnings before items1 of $1.31 per shareClosed the sale of the Ottawa/Gatineau hydro assets for CDN$46 millionFree cash flow1 payout of 68% in 2012 through regular dividends and share buybacksTICKER SYMBOL (NYSE: UFS) (TSX: UFS)MONTREAL, Feb. 1, 2013 /CNW Telbec/ - Domtar Corporation (NYSE: UFS) (TSX: UFS) today reported net earnings of $19 million ($0.54 per share) for the fourth quarter of 2012 compared to net earnings of $66 million ($1.84 per share) for the third quarter of 2012 and net earnings of $61 million ($1.63 per share) for the fourth quarter of 2011. Sales for the fourth quarter of 2012 amounted to $1.3 billion.Excluding items listed below, the Company had earnings before items1 of $46 million ($1.31 per share) for the fourth quarter of 2012 compared to earnings before items1 of $67 million ($1.87 per share) for the third quarter of 2012 and earnings before items1 of $93 million ($2.49 per share) for the fourth quarter of 2011.Fourth quarter 2012 items:Closure and restructuring costs of $27 million ($18 million after tax);Charge of $12 million ($8 million after tax) related to the impairment and write-down of property, plant and equipment and intangible assets; andNet losses on the sale of property, plant and equipment of $2 million ($1 million after tax).Third quarter 2012 items:Closure and restructuring costs of $2 million ($1 million after tax).Fourth quarter 2011 items:Closure and restructuring costs of $38 million ($23 million after tax); andCharge of $12 million ($9 million after tax) related to the impairment and write-down of property, plant and equipment."Our paper and pulp businesses performed largely in-line with expectations from a sales standpoint in the fourth quarter," said John D. Williams, President and Chief Executive Officer. "Higher costs for fiber and energy and unexpected costs incurred at a pulp mill following a planned maintenance outage affected results."FISCAL YEAR 2012 HIGHLIGHTSFor fiscal year 2012, net earnings amounted to $172 million ($4.76 per share) compared to net earnings of $365 million ($9.08 per share) for fiscal year 2011. The Company had earnings before items1 of $233 million ($6.45 per share) for fiscal 2012 compared to earnings before items1 of $452 million ($11.24 per share) for fiscal 2011. Sales amounted to $5.5 billion for fiscal year 2012.Commenting on the year, Mr. Williams said, "The down cycle in pulp prices contributed to the majority of the decline in Domtar's earnings. We accomplished a great deal again in 2012 nevertheless. We completed two acquisitions in our Personal Care business, we announced the conversion of a world-class commodity paper mill to manufacture specialty papers and launched several innovative projects that provide alternative uses for our wood fiber and the by-products of our manufacturing process. Our journey to build a growing fiber-based business is well underway," added Mr. Williams.QUARTERLY REVIEWOperating income before items1 was $84 million in the fourth quarter of 2012 compared to an operating income before items1 of $111 million in the third quarter of 2012. Depreciation and amortization totaled $96 million in the fourth quarter of 2012.(In millions of dollars) 4Q 2012 3Q 2012Sales $1,327 $1,389Operating income (loss)     Pulp and Paper segment 40 103 Distribution segment (8) (5) Personal Care segment 13 12 Corporate (2) (1) Total 43 109Operating income before items1 84 111Depreciation and amortization 96 96The decrease in operating income before items1 in the fourth quarter of 2012 was the result of lower average selling prices for pulp and paper, higher unit costs for fiber and energy, higher SG&A, freight, and maintenance costs and lower volumes for pulp and paper. These factors were partially offset by high productivity and lower costs for lack-of-order downtime in paper.When compared to the third quarter of 2012, paper shipments decreased 2.5% and pulp shipments decreased 7.2%. Paper deliveries of Ariva® decreased 10.4% when compared to the third quarter of 2012. The shipments-to-production ratio for paper was 97% in the fourth quarter of 2012, compared to 105% in the third quarter of 2012. Lack-of-order downtime and machine slowdowns in papers totaled 23,000 short tons in the fourth quarter of 2012. Paper inventories increased by 27,000 tons while pulp inventories increased by 3,000 metric tons as at the end of December, compared to September levels.LIQUIDITY AND CAPITALCash flow provided from operating activities amounted to $551 million and capital expenditures amounted to $236 million, resulting in free cash flow1 of $315 million for fiscal year 2012. Domtar's net debt-to-total capitalization ratio1 stood at 16% at December 31, 2012 compared to 12% at December 31, 2011.Domtar returned a total of $215 million to its shareholders through a combination of dividends and share buybacks in 2012. Under its stock repurchase program, Domtar repurchased 2,000,925 shares of common stock throughout 2012 and a total of 8,660,703 shares of common stock at an average price of $80.04 since the implementation of the program in May 2010. At the end of the year, Domtar had $304 million remaining under this program.OUTLOOK In 2013, we expect market demand for uncoated freesheet paper to decline at a 3 to 4% rate in North America, but our shipments are expected to trend slightly better than market due to an exposure to stable specialty and packaging papers and the incremental volume from the supply agreement signed with Appleton. Paper prices are expected to trend at levels similar to year-end while we expect a slow and steady recovery in pulp prices. The implementation of our growth plans in the Personal Care segment are expected to yield incremental earnings beginning in the fourth quarter of 2013.EARNINGS CONFERENCE CALLThe Company will hold a conference call today at 11:00 a.m. (ET) to discuss its fourth 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 first quarter 2013 earnings on April 25, 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.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 2012, Domtar had sales of US$5.5 billion from nearly 50 countries. The Company employs approximately 9,300 people. To learn more, visit www.domtar.com.Forward-Looking StatementsAll 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  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 monthsended December 31Three monthsended December 31Twelve months ended December 31Twelve monthsended December 31    2012201120122011    (Unaudited)           $$$$       Selected Segment Information           Sales      Pulp and Paper1,0991,1774,5754,953  Distribution157177685781  Personal Care1115439971Total for reportable segments1,3671,4085,6595,805  Intersegment sales - Pulp and Paper(40)(39)(177)(193)Consolidated sales1,3271,3695,4825,612Depreciation and amortization and impairment and write-down of property, plant and equipment and intangible assets      Pulp and Paper9091361368  Distribution1144  Personal Care53204Total for reportable segments9695385376  Impairment and write-down of property, plant and equipment - Pulp and Paper712985  Impairment and write-down of intangible assets - Distribution5-5-Consolidated depreciation and amortization and impairment and write-down of property, plant and equipment and intangible assets108107399461       Operating income (loss)      Pulp and Paper4092346581  Distribution(8)-(16)-  Personal Care137457  Corporate(2)-(8)4Consolidated operating income4399367592Interest expense, net222013187Earnings before income taxes and equity earnings2179236505Income tax expense11158133Equity loss, net of taxes1767Net earnings1961172365       Per common share (in dollars)     Net earning      Basic0.541.644.789.15  Diluted0.541.634.769.08Weighted average number of commonand exchangeable shares outstanding (millions)          Basic35.137.136.039.9  Diluted35.237.436.140.2       Cash flows provided from operating activities140172551883Additions to property, plant and equipment6580236144Domtar Corporation Consolidated Statements of Earnings (In millions of dollars, unless otherwise noted)                 Three months ended December 31Three monthsended December 31Twelve months ended December 31Twelve monthsended December 31   2012201120122011   (Unaudited)          $$$$       Sales1,3271,3695,4825,612Operating expenses      Cost of sales, excluding depreciation and amortization1,0581,0394,3214,171  Depreciation and amortization9695385376  Selling, general and administrative9087358340  Impairment and write-down of property, plant and equipment and intangible assets12121485  Closure and restructuring costs27383052  Other operating loss (income), net1(1)7(4) 1,2841,2705,1155,020       Operating income4399367592       Interest expense, net222013187       Earnings before income taxes and equity earnings2179236505       Income tax expense11158133       Equity loss, net of taxes1767       Net earnings1961172365       Per common share (in dollars)            Net earnings      Basic0.541.644.789.15  Diluted0.541.634.769.08Weighted average number of commonand exchangeable shares outstanding (millions)      Basic35.137.136.039.9  Diluted35.237.436.140.2Domtar Corporation Consolidated Balance Sheets at (In millions of dollars)            December 31December 31     20122011     (Unaudited)     $$       Assets  Current assets    Cash and cash equivalents661444  Receivables, less allowances of $4 and $5562644  Inventories675652  Prepaid expenses2422  Income and other taxes receivable4847  Deferred income taxes45125   Total current assets2,0151,934        Property, plant and equipment, at cost8,7938,448 Accumulated depreciation(5,392)(4,989)   Net property, plant and equipment3,4013,459Goodwill263163Intangible assets, net of amortization309204Other assets135109    Total assets6,1235,869       Liabilities and shareholders' equity  Current liabilities    Bank indebtedness187  Trade and other payables646688  Income and other taxes payable1517  Long-term debt due within one year794   Total current liabilities758716       Long-term debt1,128837Deferred income taxes and other903927Other liabilities and deferred credits457417       Shareholders' equity    Exchangeable shares4849  Additional paid-in capital2,1752,326  Retained earnings782671  Accumulated other comprehensive loss(128)(74)   Total shareholders' equity2,8772,972    Total liabilities and shareholders' equity6,1235,869Domtar Corporation Consolidated Statements of Cash Flows (In millions of dollars)             Twelve months ended December 31Twelve monthsended December 31   20122011   (Unaudited)   $$     Operating activities  Net earnings172365Adjustments to reconcile net earnings to cash flows from operating activities   Depreciation and amortization385376 Deferred income taxes and tax uncertainties(1)40 Impairment and write-down of property, plant and equipment and intangible assets1485 Loss on repurchase of long-term debt-4 Net losses (gains) on disposals of property, plant and equipment and sale of business2(6) Stock-based compensation expense53 Equity loss, net67 Other(13)-Changes in assets and liabilities, excluding the effects of acquisition and sale of businesses   Receivables99(12) Inventories52 Prepaid expenses(3)2 Trade and other payables(118)(27) Income and other taxes (4)33 Difference between employer pension and other post-retirement contributionsand pension and other post-retirement expense(13)(18) Other assets and other liabilities1529 Cash flows provided from operating activities551883     Investing activities  Additions to property, plant and equipment(236)(144)Proceeds from disposals of property, plant and equipment4934Proceeds from sale of business-10Acquisition of businesses, net of cash acquired(293)(288)Investment in joint venture(6)(7) Cash flows used for investing activities(486)(395)    Financing activities  Dividend payments(58)(49)Net change in bank indebtedness11(16)Issuance of long-term debt548-Repayment of long-term debt(192)(18)Debt issue and tender offer costs-(7)Stock repurchase(157)(494)Other-10 Cash flows provided from (used for) financing activities152(574)     Net  increase (decrease) in cash and cash equivalents217(86)Cash and cash equivalents at beginning of year444530Cash and cash equivalents at end of year661444     Supplemental cash flow information   Net cash payments for:    Interest (including $47 million of tender offer premiums in 2012)11674  Income taxes paid7660Domtar CorporationQuarterly Reconciliation of Non-GAAP Financial Measures(In millions of dollars, unless otherwise noted)The following table sets forth certain non-U.S. generally accepted accounting principles ("GAAP") financial metrics identified in bold as "Earnings before items", "Earnings before items per diluted share", "EBITDA", "EBITDA margin", "EBITDA before items", "EBITDA margin before items", "Free cash flow", "Net debt" and "Net debt-to-total capitalization." Management believes that the financial metrics presented are frequently used by investors and are useful to evaluate our ability to service debt and our overall credit profile. Management believes these metrics are also useful to measure the operating performance and benchmark with peers within the industry. These metrics are presented as a complement to enhance the understanding of operating results but not in substitution for GAAP results.The Company calculates "Earnings before items" and "EBITDA before items" by excluding the after-tax (pre-tax) effect of items considered by management as not reflecting our current operations. Management uses these measures, as well as EBITDA and Free cash flow, to focus on ongoing operations and believes that it is useful to investors because it enables them to perform meaningful comparisons between periods. Domtar believes that using this information along with Net earnings provides for a more complete analysis of the results of operations. Net earnings and Cash flow provided from operating activities are the most directly comparable GAAP measures.                  20122011    Q1Q2Q3Q4YTDQ1Q2Q3Q4YTDReconciliation of "Earnings before items" to Net earnings             Net earnings($)285966191721335411761365 (+)Impairment and write-down of property, plant and equipment and intangible assets($)1--892384953 (+)Closure and restructuring costs($)1-118208112333 (-)Net losses (gains) on disposals of property, plant and equipment and sale of business($)---11(5)5(3)-(3) (+)Impact of purchase accounting($)1---1--1-1 (+)Loss on repurchase of long-term debt($)30---30--3-3 (=)Earnings before items($)615967462331389812393452 ( / )Weighted avg. number of common and exchangeable shares outstanding (diluted)(millions)37.036.635.835.236.142.441.439.737.440.2 (=)Earnings before items per diluted share($)1.651.611.871.316.453.252.373.102.4911.24              Reconciliation of "EBITDA" and "EBITDA before items" to Net earnings             Net earnings($)285966191721335411761365 (+)Equity loss, net of taxes($)22116---77 (+)Income tax expense($)8272215857204511133 (+)Interest expense, net($)711820221312121252087 (=)Operating income($)109106109433672119518799592 (+)Depreciation and amortization($)9796969638593959395376 (+)Impairment and write-down of property, plant and equipment and intangible assets($)2--121436281285 (-)Net losses (gains) on disposals of property, plant and equipment and sale of business($)---22(7)6(4)(1)(6) (=)EBITDA($)2082022051537683002582842051,047 (/)Sales($)1,3981,3681,3891,3275,4821,4231,4031,4171,3695,612 (=)EBITDA margin(%)15%15%15%12%14%21%18%20%15%19%  EBITDA($)2082022051537683002582842051,047 (+)Closure and restructuring costs($)1-2273011213852 (+)Impact of purchase accounting($)1---1--1-1 (=)EBITDA before items($)2102022071807993112602862431,100 (/)Sales($)1,3981,3681,3891,3275,4821,4231,4031,4171,3695,612 (=)EBITDA margin before items(%)15%15%15%14%15%22%19%20%18%20%              Reconciliation of "Free cash flow" to Cash flow provided from operating activities             Cash flow provided from operating activities($)30175206140551148306257172883 (-)Additions to property, plant and equipment($)(29)(76)(66)(65)(236)(13)(20)(31)(80)(144) (=)Free cash flow($)1991407531513528622692739              "Net debt-to-total capitalization" computation             Bank indebtedness($)13221518 2525177  (+)Long-term debt due within one year($)66779 2254  (+)Long-term debt($)9529501,1961,128 825824837837  (=)Debt($)9719781,2181,225 852851859848  (-)Cash and cash equivalents($)(315)(276)(593)(661) (604)(742)(461)(444)  (=)Net debt($)656702625564 248109398404  (+)Shareholders' equity($)3,0092,9483,0042,877 3,2883,1942,9992,972  (=)Total capitalization($)3,6653,6503,6293,441 3,5363,3033,3973,376   Net debt($)656702625564 248109398404  ( / )Total capitalization($)3,6653,6503,6293,441 3,5363,3033,3973,376  (=)Net debt-to-total capitalization(%)18%19%17%16% 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.Domtar CorporationQuarterly 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 PaperDistributionPersonal Care (1)CorporateTotal    Q1'12Q2'12Q3'12Q4'12YTDQ1'12Q2'12Q3'12Q4'12YTDQ1'12Q2'12Q3'12Q4'12YTDQ1'12Q2'12Q3'12Q4'12YTDQ1'12Q2'12Q3'12Q4'12YTDReconciliation of Operating income (loss) to "Operating income (loss) before items"                            Operating income (loss)($)1079610340346(1)(2)(5)(8)(16)812121345(5)-(1)(2)(8)10910610943367 (+)Impairment and write-down of property, plant and equipment and intangible assets($)2--79---55----------2--1214 (+)Closure and restructuring costs($)1--2627--112--1-1-----1-22730 (-)Net losses on disposals of property, plant and equipment($)---22------------------22 (+)Impact of purchase accounting($)----------1---1-----1---1                              (=)Operating income (loss) before items($)1109610375384(1)(2)(4)(2)(9)912131347(5)-(1)(2)(8)11310611184414                             Reconciliation of "Operating income (loss) before items" to "EBITDA before items"                            Operating income (loss) before items($)1109610375384(1)(2)(4)(2)(9)912131347(5)-(1)(2)(8)11310611184414 (+)Depreciation and amortization($)9388909036112-14366520-----97969696385                              (=)EBITDA before items($)203184193165745--(4)(1)(5)1218191867(5)- (1)(2)(8)210202207180799 (/)Sales($)1,1911,1321,1531,0994,57518917216715768570107111111399-----1,4501,4111,4311,3675,659 (=)EBITDA margin before items(%)17%16%17%15%16%-----17%17%17%16%17%-----14%14%14%13%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.Domtar CorporationQuarterly 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.                                 Pulp and PaperDistributionPersonal Care (1)CorporateTotal    Q1'11Q2'11Q3'11Q4'11YTDQ1'11Q2'11Q3'11Q4'11YTDQ1'11Q2'11Q3'11Q4'11YTDQ1'11Q2'11Q3'11Q4'11YTDQ1'11Q2'11Q3'11Q4'11YTDReconciliation of Operating income (loss) to "Operating income (loss) before items"                            Operating income (loss)($)20991189925813(2)(1)-----77(1)6(1)-42119518799592 (+)Impairment and write-down of property, plant and equipment($)36281285---------------36281285 (+)Closure and restructuring costs($)11213751---11----------11213852 (-)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($)219167194140720-(2)(1)1(2)--178(1)-(1)-(2)218165193148724                             Reconciliation of "Operating income (loss) before items" to "EBITDA before items"                            Operating income (loss) before items($)219167194140720-(2)(1)1(2)--178(1)-(1)-(2)218165193148724 (+)Depreciation and amortization($)9294919136811114--134-----93959395376                              (=)EBITDA before items($)3112612852311,0881(1)-22--21012(1)-(1)-(2)3112602862431,100 (/)Sales($)1,2691,2611,2461,1774,953217190197177781--175471-----1,4861,4511,4601,4085,805 (=)EBITDA margin before items(%)25%21%23%20%22%---1%---12%19%17%-----21%18%20%17%19%"Operating income (loss) before items", "EBITDA before items" and "EBITDA margin before items" have no standardized meaning prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies and therefore should not be considered in isolation or as a substitute for Operating income (loss) or any other earnings statement, cash flow statement or balance sheet financial information prepared in accordance with GAAP. It is important for readers to understand that certain items may be presented in different lines by different companies on their financial statements thereby leading to different measures for different companies.(1) On September 1, 2011, the Company acquired 100% of the shares of Attends Healthcare Inc. Domtar CorporationSupplemental Segmented Information(In millions of dollars, unless otherwise noted)                    20122011     Q1Q2Q3Q4YTDQ1Q2Q3Q4YTDPulp and Paper Segment            Sales ($)1,1911,1321,1531,0994,5751,2691,2611,2461,1774,953  Intersegment sales - Pulp and Paper ($)(52)(43)(42)(40)(177)(63)(48)(43)(39)(193) Operating income ($)10796103403462099118992581 Depreciation and amortization ($)9388909036192949191368 Impairment and write-down of property, plant and equipment ($)2--7936281285                Papers             Papers Production ('000 ST)8708327888313,3218998908758713,535 Papers Shipments ('000 ST)8708198268053,3209139018898313,534  Communication Papers ('000 ST)7567057096842,8548167947847293,123  Specialty and Packaging ('000 ST)11411411712146697107105102411                Pulp             Pulp Shipments(a) ('000 ADMT)3893684153851,5573753613584031,497  Hardwood Kraft Pulp (%)15%16%20%19%18%20%19%18%19%19%  Softwood Kraft Pulp (%)61%57%55%56%57%55%54%57%58%57%  Fluff Pulp (%)24%27%25%25%25%25%27%25%23%24%               Distribution Segment             Sales ($)189172167157685217190197177781 Operating income (loss) ($)(1)(2)(5)(8)(16)3(2)(1)-- Depreciation and amortization ($)12-1411114 Impairment and write-down of intangible assets ($)---55-----               Personal Care Segment             Sales ($)70107111111399--175471 Operating income ($)812121345---77 Depreciation and amortization ($)366520--134                              Average Exchange Rates $US / $CAN1.0011.0100.9950.9910.9990.9860.9680.9801.0230.989    $CAN / $US0.9990.9901.0061.0091.0011.0141.0341.0210.9771.011    €EUR / $US1.3121.2831.2521.2981.286-----(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.    SOURCE: DOMTAR CORPORATIONFor further information: MEDIA AND INVESTOR RELATIONS Pascal Bossé Vice-President Corporate Communications and Investor Relations Tel.: 514-848-5938