Domtar Corporation reports preliminary fourth quarter and fiscal year 2013 financial results

Domtar Corporation reports preliminary fourth quarter and fiscal year 2013 
financial results 
Acquired Laboratorios Indas, Spanish market leader in adult incontinence - a 
key milestone in the development of Domtar's Personal Care business
(All financial information is in U.S. dollars, and all earnings per share 
results are diluted, unless otherwise noted.) 


        --  Fourth quarter 2013 net earnings of $2.00 per share, earnings
            before items1 of $2.09 per share
        --  Announced and completed on January 2, 2014, the acquisition of
            Laboratorios Indas, Spain's largest manufacturer and marketer
            of adult incontinence products
        --  Completed a long-term financing with the successful issuance of
            30-year senior notes

TICKER SYMBOL 
(NYSE: UFS) (TSX: UFS)

MONTREAL, Feb. 7, 2014 /CNW Telbec/ - Domtar Corporation (NYSE: UFS) (TSX: 
UFS) today reported net earnings of $65 million ($2.00 per share) for the 
fourth quarter of 2013 compared to net earnings of $27 million ($0.82 per 
share) for the third quarter of 2013 and net earnings of $19 million ($0.54 
per share) for the fourth quarter of 2012. Sales for the fourth quarter of 
2013 were $1,359 million.

Excluding items listed below, the Company had earnings before items(1) of $68 
million ($2.09 per share) for the fourth quarter of 2013 compared to earnings 
before items(1) of $41 million ($1.25 per share) for the third quarter of 2013 
and earnings before items(1) of $46 million ($1.31 per share) for the fourth 
quarter of 2012.

Fourth quarter 2013 items:
        --  Net gain on sale of property, plant and equipment and business
            for $5 million ($4 million after tax); and
        --  Charge of $7 million ($7 million after tax) for impairment of
            property, plant and equipment.

Third quarter 2013 items:
        --  Loss on sale of business of $19 million ($12 million after
            tax); and
        --  Negative impact of purchase accounting of $2 million ($2
            million after tax).

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; and
        --  Net losses on the sale of property, plant and equipment of $2
            million ($1 million after tax).

Commenting on the fourth quarter results, John D. Williams, President and 
Chief Executive Officer, said, "Our solid results in the fourth quarter were 
mostly in line with our expectations in all of our businesses. Lower planned 
maintenance shutdowns and the continued momentum in pulp markets drove quarter 
over quarter earnings improvement."

FISCAL YEAR 2013 HIGHLIGHTS

For fiscal year 2013, net earnings amounted to $91 million ($2.72 per share) 
compared to net earnings of $172 million ($4.76 per share) for fiscal year 
2012. The Company had earnings before items(1) of $158 million ($4.73 per 
share) for fiscal 2013 compared to earnings before items(1) of $233 million 
($6.45 per share) for fiscal 2012. Sales amounted to $5.4 billion for fiscal 
year 2013.

"In 2013, we continued to transform the earnings profile of our company 
through further acquisitions in personal care, strategic investments in the 
pulp and paper business and the disposal of non-core assets. The recent 
acquisition of Indas represents a significant step in building out our 
personal care business, and will further help us achieve our goal of $300-$500 
million of EBITDA from growing business by 2017. We have made meaningful 
progress towards this goal and the businesses we have acquired so far bring us 
closer to the lower end of our target. The continued execution of our strategy 
will drive earnings and cash flow growth in 2014 and beyond," added Mr. 
Williams.

QUARTERLY REVIEW

Operating income before items(1) was $95 million in the fourth quarter of 2013 
compared to an operating income before items(1) of $70 million in the third 
quarter of 2013. Depreciation and amortization totaled $95 million in the 
fourth quarter of 2013.
    (In millions of dollars)         4Q 2013   3Q 2013
    Sales                             $1,359    $1,375
    Operating income (loss)                           
      Pulp and Paper segment              75        42
      Personal Care segment                9        11
      Corporate                            9       (4)
      Total                               93        49
    Operating income before items1        95        70
    Depreciation and amortization         95        93


The increase in operating income before items(1) in the fourth quarter of 2013 
was the result of lower costs for maintenance, higher average selling prices 
for paper and pulp, favorable exchange rates, higher productivity in pulp, and 
higher paper shipments. These factors were partially offset by higher raw 
material costs and an unfavorable mix of paper sold. 
When compared to the third quarter of 2013, manufactured paper shipments 
increased 0.4% and pulp shipments increased 7.1%. The shipments-to-production 
ratio for paper was 100% in the fourth quarter of 2013, compared to 98% in the 
third quarter of 2013. Lack-of-order downtime and machine slowdowns in pulp 
and paper totaled 20,000 short tons in the fourth quarter of 2013. Paper 
inventories remained unchanged when compared to the end of September. 
LIQUIDITY AND CAPITAL 
In 2013, cash flow provided from operating activities amounted to $411 million 
and capital expenditures were $242 million, resulting in free cash flow(1) of 
$169 million for fiscal 2013. Domtar's net debt-to-total capitalization 
ratio(1) stood at 24% at December 31, 2013 compared to 16% at December 31, 
2012. 
Domtar returned a total of $250 million to its shareholders through a 
combination of dividends and share buybacks in fiscal 2013. Domtar repurchased 
a total of 11,170,506 shares of common stock at an average price of $78.48 
since the implementation of its stock repurchase program in May 2010. At the 
end of the fourth quarter of 2013, Domtar had $121 million remaining under 
this program. 
OUTLOOK 
In 2014, we expect our paper shipments to be in-line with 2013 while we expect 
the market demand for uncoated free sheet to decline with long-term secular 
trends. Our paper prices will benefit from the implementation of recently 
announced price increases. We expect softwood pulp markets to maintain 
positive momentum but new scheduled industry hardwood pulp capacity makes the 
latter part of the year more uncertain. Personal care will continue to see 
earnings growth with the recent acquisition of Indas and with the addition of 
the new production lines towards the end of the year. 
EARNINGS CONFERENCE CALL 
The Company will hold a conference call today at 10:00 a.m. (ET) to discuss 
its fourth quarter and fiscal 2013 financial results. Financial analysts are 
invited to participate in the call by dialing 1 (866) 321-8231 (toll free - 
North America) or 1 (416) 642-5213 (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. 
A replay will be available by dialing 1 (888) 203-1112 (North America) or 1 
(647) 436-0148 (International) using access code 5674179 until February 21, 
2014. 
------------------------------ 
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 absorbent hygiene 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 broad 
line of incontinence care products marketed primarily under the Attends(®), 
IncoPack and Indasec(®) brand names as well as baby diapers. In 2013, Domtar 
had sales of US$5.4 billion from some 50 countries. The Company employs 
approximately 10,000 people. 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 2012 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. 
_______________________
(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 months Three months Twelve months Twelve months
                         ended        ended         ended         ended
                      December 31  December 31   December 31   December 31
                            2013         2012         2013          2012
                                                     (Unaudited)
                                 $            $             $             $
                                                                           
    Selected Segment
    Information                                                            
                                                                           
    Sales                                                                  
        Pulp and
        Paper                1,193        1,218         4,843         5,088
        Personal Care          172          111           566           399
    Total for
    reportable
    segments                 1,365        1,329         5,409         5,487
        Intersegment
        sales - Pulp
        and Paper              (6)          (2)          (18)           (5)
    Consolidated
    sales                    1,359        1,327         5,391         5,482
                                                                           
    Depreciation and
    amortization and
    impairment and
    write-down of
    property, plant
    and equipment and
    intangible assets                                                      
        Pulp and
        Paper                   85           91           345           365
        Personal Care           10            5            31            20
    Total for
    reportable
    segments                    95           96           376           385
        Impairment
        and
        write-down of
        property,
        plant and
        equipment and
        intangible
        assets - Pulp
        and Paper                5           12            20            14
        Impairment
        and
        write-down of
        property,
        plant and
        equipment -
        Personal Care            2            -             2             -
    Consolidated
    depreciation and
    amortization and
    impairment and
    write-down of
    property, plant
    and equipment and
    intangible assets          102          108           398           399
                                                                           
    Operating income
    (loss)                                                                 
        Pulp and
        Paper                   75           32           171           330
        Personal Care            9           13            43            45
        Corporate                9          (2)          (53)           (8)
    Consolidated
    operating income            93           43           161           367
    Interest expense,
    net                         22           22            89           131
    Earnings before
    income taxes and
    equity loss                 71           21            72           236
    Income tax
    expense (benefit)            6            1          (20)            58
    Equity loss, net
    of taxes                     -            1             1             6
    Net earnings                65           19            91           172
                                                                           
    Per common share
    (in dollars)                                                           
      Net earnings                                                         
        Basic                 2.01         0.54          2.73          4.78
        Diluted               2.00         0.54          2.72          4.76
    Weighted average
    number of common
    and exchangeable
    shares
    outstanding
    (millions)                                                             
        Basic                 32.4         35.1          33.3          36.0
        Diluted               32.5         35.2          33.4          36.1
                                                                           
    Cash flows
    provided from
    operating
    activities                 124          140           411           551
    Additions to
    property, plant
    and equipment               62           65           242           236
        Domtar Corporation                                                    
    Consolidated
    Statements of
    Earnings                                                              
    (In millions of
    dollars, unless
    otherwise noted)                                                      
                                                                          
                                                   Twelve
                       Three months Three months   months    Twelve months
                          ended        ended        ended        ended
                       December 31  December 31  December 31  December 31
                             2013         2012        2013         2012
                                                     (Unaudited)
                                  $            $           $             $
                                                                          
    Sales                     1,359        1,327       5,391         5,482
    Operating expenses                                                    
        Cost of sales,
        excluding
        depreciation
        and
        amortization          1,081        1,058       4,361         4,321
        Depreciation
        and
        amortization             95           96         376           385
        Selling,
        general and
        administrative          100           90         381           358
        Impairment and
        write-down of
        property,
        plant and
        equipment and
        intangible
        assets                    7           12          22            14
        Closure and
        restructuring
        costs                     -           27          18            30
        Other
        operating
        (income) loss,
        net                    (17)            1          72             7
                              1,266        1,284       5,230         5,115
    Operating income             93           43         161           367
    Interest expense,
    net                          22           22          89           131
    Earnings before
    income taxes and
    equity loss                  71           21          72           236
    Income tax expense
    (benefit)                     6            1        (20)            58
    Equity loss, net
    of taxes                      -            1           1             6
    Net earnings                 65           19          91           172
                                                                          
    Per common share
    (in dollars)                                                          
                                                              
      Net earnings                                            
        Basic                  2.01         0.54        2.73          4.78
        Diluted                2.00         0.54        2.72          4.76
    Weighted average
    number of common
    and exchangeable
    shares outstanding
    (millions)                                                            
        Basic                  32.4         35.1        33.3          36.0
        Diluted                32.5         35.2        33.4          36.1
        Domtar Corporation                                                   
    Consolidated Balance Sheets at                                       
    (In millions of dollars)                                             
                                                                         
                                                  December 31 December 31
                                                       2013        2012
                                                           (Unaudited)
                                                            $           $
                                                               
    Assets                                                               
    Current assets                                                       
        Cash and cash equivalents                         655         661
        Receivables, less allowances of $4 and $4         601         562
        Inventories                                       685         675
        Prepaid expenses                                   23          24
        Income and other taxes receivable                  61          48
        Deferred income taxes                              52          45
          Total current assets                          2,077       2,015
                                                                         
      Property, plant and equipment, at cost            8,883       8,793
      Accumulated depreciation                        (5,594)     (5,392)
          Net property, plant and equipment             3,289       3,401
    Goodwill                                              369         263
    Intangible assets, net of amortization                407         309
    Other assets                                          136         135
            Total assets                                6,278       6,123
                                                               
    Liabilities and shareholders' equity                                 
    Current liabilities                                                  
        Bank indebtedness                                  15          18
        Trade and other payables                          673         646
        Income and other taxes payable                     17          15
        Long-term debt due within one year                  4          79
          Total current liabilities                       709         758
                                                               
    Long-term debt                                      1,510       1,128
    Deferred income taxes and other                       923         903
    Other liabilities and deferred credits                354         457
                                                               
    Shareholders' equity                                                 
        Exchangeable shares                                44          48
        Additional paid-in capital                      1,999       2,175
        Retained earnings                                 804         782
        Accumulated other comprehensive loss             (65)       (128)
          Total shareholders' equity                    2,782       2,877
            Total liabilities and shareholders'
            equity                                      6,278       6,123
        Domtar Corporation                                                     
    Consolidated Statements of Cash
    Flows                                                                  
    (In millions of dollars)                                               
                                                                           
                                          Twelve months     Twelve months
                                        ended December 31 ended December 31
                                                 2013              2012
                                                          (Unaudited)
                                                        $                 $
                                                                           
    Operating activities                                                   
    Net earnings                                       91               172
    Adjustments to reconcile net
    earnings to cash flows from
    operating activities                                                   
      Depreciation and amortization                   376               385
      Deferred income taxes and tax
      uncertainties                                   (8)               (1)
      Impairment and write-down of
      property, plant and equipment and
      intangible assets                                22                14
      Net losses on disposals of
      property, plant and equipment and
      sale of business                                  4                 2
      Stock-based compensation expense                  5                 5
      Equity loss, net                                  1                 6
      Other                                           (2)              (13)
    Changes in assets and liabilities,
    excluding the effects of
    acquisition and sale of businesses                                     
      Receivables                                    (70)                99
      Inventories                                     (8)                 5
      Prepaid expenses                                  1               (3)
      Trade and other payables                       (11)             (118)
      Income and other taxes                         (26)               (4)
      Difference between employer
      pension and other post-retirement
      contributions and pension and
      other post-retirement expense                    31              (13)
      Other assets and other
      liabilities                                       5                15
      Cash flows provided from
      operating activities                            411               551
                                                           
    Investing activities                                                   
    Additions to property, plant and
    equipment                                       (242)             (236)
    Proceeds from disposals of
    property, plant and equipment and
    sale of business                                   61                49
    Acquisition of businesses, net of
    cash acquired                                   (287)             (293)
    Investment in joint venture                       (1)               (6)
      Cash flows used for investing
      activities                                    (469)             (486)
                                                           
    Financing activities                                                   
    Dividend payments                                (67)              (58)
    Net change in bank indebtedness                   (3)                11
    Change of revolving bank credit
    facility                                          160                 -
    Issuance of long-term debt                        249               548
    Repayment of long-term debt                     (102)             (192)
    Stock repurchase                                (183)             (157)
      Cash flows provided from
      financing activities                             54               152
                                                           
    Net (decrease) increase in cash and
    cash equivalents                                  (4)               217
    Impact of foreign exchange on cash                (2)                 -
    Cash and cash equivalents at
    beginning of period                               661               444
    Cash and cash equivalents at end of
    period                                            655               661
                                                                           
    Supplemental cash flow information                                     
      Net cash payments for:                               
        Interest (including $2 million
        and $47 million of tender offer
        premiums in 2013 and 2012,
        respectively)                                  81               116
        Income taxes paid                               5                76


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.  


                                                                                           
                                                            2013                       2012
                                      Q1    Q2    Q3    Q4   YTD    Q1    Q2    Q3    Q4   YTD
    Reconciliation of
    "Earnings before
    items" to Net
    earnings (loss)                                                                            
          Net earnings
          (loss)         ($)           45  (46)    27    65    91    28    59    66    19   172
          Impairment and
          write-down of
          property,
          plant and
          equipment and
          intangible
      (+) assets         ($)            7     3     -     7    17     1     -     -     8     9
          Closure and
          restructuring
      (+) costs          ($)            -    13     -     -    13     1     -     1    18    20
          Net (gains)
          losses on
          disposals of
          property,
          plant and
          equipment and
      (-) business       ($)          (6)     -    12   (4)     2     -     -     -     1     1
          Impact of
          purchase
      (+) accounting     ($)            -     -     2     -     2     1     -     -     -     1
          Reversal of
          alternative
          fuel tax
      (+) credits        ($)           18     -     -     -    18     -     -     -     -     -
          Cellulosic
          biofuel
          producer
      (-) credits        ($)         (33)     -     -     -  (33)     -     -     -     -     -
          Loss on
          repurchase of
      (+) long-term debt ($)            2     -     -     -     2    30     -     -     -    30
          Weston
          litigation
      (+) settlement     ($)            -    46     -     -    46     -     -     -     -     -
          Earnings
      (=) before items   ($)           33    16    41    68   158    61    59    67    46   233
          Weighted avg.
          number of
          common and
          exchangeable
          shares
          outstanding
      (/) (diluted)      (millions)  34.9  33.4  32.8  32.5  33.4  37.0  36.6  35.8  35.2  36.1
          Earnings
          before items
          per diluted
      (=) share          ($)         0.95  0.48  1.25  2.09  4.73  1.65  1.61  1.87  1.31  6.45
                                                                                               
    Reconciliation of
    "EBITDA" and "EBITDA
    before items" to Net
    earnings (loss)                                                                            
          Net earnings
          (loss)         ($)           45  (46)    27    65    91    28    59    66    19   172
          Equity loss,
      (+) net of taxes   ($)            1     -     -     -     1     2     2     1     1     6
          Income tax
          (benefit)
      (+) expense        ($)         (22)   (5)     1     6  (20)     8    27    22     1    58
          Interest
      (+) expense, net   ($)           25    21    21    22    89    71    18    20    22   131
          Operating
      (=) income (loss)  ($)           49  (30)    49    93   161   109   106   109    43   367
          Depreciation
          and
      (+) amortization   ($)           95    93    93    95   376    97    96    96    96   385
          Impairment and
          write-down of
          property,
          plant and
          equipment and
          intangible
      (+) assets         ($)           10     5     -     7    22     2     -     -    12    14
          Net (gains)
          losses on
          disposals of
          property,
          plant and
          equipment and
      (-) business       ($)         (10)     -    19   (5)     4     -     -     -     2     2
      (=) EBITDA         ($)          144    68   161   190   563   208   202   205   153   768
      (/) Sales          ($)        1,345 1,312 1,375 1,359 5,391 1,398 1,368 1,389 1,327 5,482
      (=) EBITDA margin  (%)          11%    5%   12%   14%   10%   15%   15%   15%   12%   14%
          EBITDA         ($)          144    68   161   190   563   208   202   205   153   768
          Reversal of
          alternative
          fuel tax
      (+) credits        ($)           26     -     -     -    26     -     -     -     -     -
          Closure and
          restructuring
      (+) costs          ($)            -    18     -     -    18     1     -     2    27    30
          Impact of
          purchase
      (+) accounting     ($)            -     -     2     -     2     1     -     -     -     1
          Weston
          litigation
      (+) settlement     ($)            -    49     -     -    49     -     -     -     -     -
          EBITDA before
      (=) items          ($)          170   135   163   190   658   210   202   207   180   799
      (/) Sales          ($)        1,345 1,312 1,375 1,359 5,391 1,398 1,368 1,389 1,327 5,482
          EBITDA margin
      (=) before items   (%)          13%   10%   12%   14%   12%   15%   15%   15%   14%   15%
                                                                                               
    Reconciliation of
    "Free cash flow" to
    Cash flow provided
    from operating
    activities                                                                                 
          Cash flow
          provided from
          operating
          activities     ($)           63   120   104   124   411    30   175   206   140   551
          Additions to
          property,
          plant and
      (-) equipment      ($)         (56)  (62)  (62)  (62) (242)  (29)  (76)  (66)  (65) (236)
      (=) Free cash flow ($)            7    58    42    62   169     1    99   140    75   315
                                                                                               
    "Net debt-to-total
    capitalization"
    computation                                                                                
          Bank
          indebtedness   ($)           13     2     6    15          13    22    15    18      
          Long-term debt
          due within one
      (+) year           ($)            8     7     6     4           6     6     7    79      
      (+) Long-term debt ($)        1,104 1,102 1,102 1,510         952   950 1,196 1,128      
      (=) Debt           ($)        1,125 1,111 1,114 1,529         971   978 1,218 1,225      
          Cash and cash
      (-) equivalents    ($)        (513) (432) (191) (655)       (315) (276) (593) (661)      
      (=) Net debt       ($)          612   679   923   874         656   702   625   564      
          Shareholders'
      (+) equity         ($)        2,842 2,652 2,681 2,782       3,009 2,948 3,004 2,877      
          Total
      (=) capitalization ($)        3,454 3,331 3,604 3,656       3,665 3,650 3,629 3,441      
          Net debt       ($)          612   679   923   874         656   702   625   564      
          Total
      (/) capitalization ($)        3,454 3,331 3,604 3,656       3,665 3,650 3,629 3,441      
          Net
          debt-to-total
      (=) capitalization (%)          18%   20%   26%   24%         18%   19%   17%   16%      


"Earnings before items", "Earnings before items per diluted share", "EBITDA", 
"EBITDA margin", "EBITDA before items", "EBITDA margin before items", "Free 
cash flow", "Net debt" and "Net debt-to-total capitalization" have no 
standardized meaning prescribed by GAAP and are not necessarily comparable to 
similar measures presented by other companies and therefore should not be 
considered in isolation or as a substitute for Net earnings, Operating income 
or any other earnings statement, cash flow statement or balance sheet 
financial information prepared in accordance with GAAP. It is important for 
readers to understand that certain items may be presented in different lines 
by different companies on their financial statements thereby leading to 
different measures for different companies.   
Domtar Corporation
Quarterly Reconciliation of Non-GAAP Financial Measures - By Segment 2013
(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 (1)           Personal Care (2)                  Corporate           
             Total


                        Q1'13 Q2'13 Q3'13 Q4'13  YTD  Q1'13 Q2'13 Q3'13 Q4'13 YTD Q1'13 Q2'13 Q3'13 Q4'13 YTD  
Q1'13 Q2'13 Q3'13 Q4'13  YTD 


    Reconciliation of
    Operating income
    (loss) to
    "Operating income
    (loss) before
    items"                                                                                                              
                    
          Operating


      income (loss) ($)    38    16    42    75   171    13    10    11     9  43   (2)  (56)   (4)     9 (53)    
49  (30)    49    93   161 


          Impairment
          and
          write-down of
          property,
          plant and
          equipment and
          intangible


  (+) assets        ($)    10     5     -     5    20     -     -     -     2   2     -     -     -     -    -    
10     5     -     7    22 


          Net (gain)
          loss on
          disposal of
          property,
          plant and
          equipment and


  (-) business      ($)  (10)     -    19     1    10     -     -     -     -   -     -     -     -   (6)  (6)  
(10)     -    19   (5)     4 


          Reversal of
          alternative
          fuel tax


  (+) credits       ($)    26     -     -     -    26     -     -     -     -   -     -     -     -     -    -    
26     -     -     -    26 


          Weston
          litigation
      (+) settlement    ($)     -     -     -     -     -     -     -     -     -   -     -    49     -     -   49     -
    49     -     -    49
          Closure and
          restructuring
      (+) costs         ($)     -    10     -     -    10     -     2    -     -    2    -      6     -     -    6     -
    18     -     -    18
          Impact of
          purchase
      (+) accounting    ($)     -     -     -     -     -     -     -     2     -   2     -     -     -     -    -     -
     -     2     -     2
          Operating
          income (loss)


  (=) before items  ($)    64    31    61    81   237    13    12    13    11  49   (2)   (1)   (4)     3  (4)    
75    42    70    95   282 


                                                                                                                        
                    
    Reconciliation of
    "Operating income
    (loss) before
    items" to "EBITDA
    before items"                                                                                                       
                    
          Operating
          income (loss)


      before items  ($)    64    31    61    81   237    13    12    13    11  49   (2)   (1)   (4)     3  (4)    
75    42    70    95   282 


          Depreciation
          and


  (+) amortization  ($)    89    87    84    85   345     6     6     9    10  31     -     -     -     -    -    
95    93    93    95   376 


                                                                                                                        
                    
          EBITDA before


  (=) items         ($)   153   118   145   166   582    19    18    22    21  80   (2)   (1)   (4)     3  (4)   
170   135   163   190   658 
  (/) Sales         ($) 1,238 1,208 1,204 1,193 4,843   111   108   175   172 566     -     -     -     -    - 
1,349 1,316 1,379 1,365 5,409 
      EBITDA margin 
  (=) before items  (%)   12%   10%   12%   14%   12%   17%   17%   13%   12% 14%     -     -     -     -    -   
13%   10%   12%   14%   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 May 31, 2013, the Company acquired Xerox's paper print and media
        product's assets in the United States and Canada.
    (2) On July 1, 2013, the Company acquired 100% of the shares of
        Associated Hygiene Products LLC.


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            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 


    Reconciliation of
    Operating income
    (loss) to
    "Operating income
    (loss) before
    items"                                                                                                              
                       
          Operating


      income (loss) ($)   106    94    98    32   330     8    12    12    13  45   (5)    -    (1)   (2) (8)   109 
  106   109    43   367 


          Impairment
          and
          write-down of
          property,
          plant and
          equipment and
          intangible
      (+) assets        ($)     2     -     -    12    14     -     -     -     -   -     -     -     -     -   -     2 
    -     -    12    14
          Closure and
          restructuring
      (+) costs         ($)     1     -     1    27    29     -     -     1     -   1     -     -     -     -   -     1 
    -     2    27    30
          Net losses on
          disposals of
          property,
          plant and
      (-) equipment     ($)     -     -     -     2     2     -     -     -     -   -     -     -     -     -   -     - 
    -     -     2     2
          Impact of
          purchase
      (+) accounting    ($)     -     -     -     -     -     1     -     -     -   1     -     -     -     -   -     1 
    -     -     -     1
                                                                                                                        
                       
          Operating
          income (loss)


  (=) before items  ($)   109    94    99    73   375     9    12    13    13  47   (5)     -   (1)   (2) (8)   113 
  106   111    84   414 


                                                                                                                        
                       
    Reconciliation of
    "Operating income
    (loss) before
    items" to "EBITDA
    before items"                                                                                                       
                       
          Operating
          income (loss)


      before items  ($)   109    94    99    73   375     9    12    13    13  47   (5)     -   (1)   (2) (8)   113 
  106   111    84   414 


          Depreciation
          and


  (+) amortization  ($)    94    90    90    91   365     3     6     6     5  20     -     -     -     -   -    97  
96    96    96   385 


                                                                                                                        
                       
          EBITDA before


  (=) items         ($)   203   184   189   164   740    12    18    19    18  67   (5)     -   (1)   (2) (8)   210 
  202   207   180   799 
  (/) Sales         ($) 1,329 1,261 1,280 1,218 5,088    70   107   111   111 399     -     -     -     -   - 1,399 
1,368 1,391 1,329 5,487 
      EBITDA margin 
  (=) before items  (%)   15%   15%   15%   13%   15%   17%   17%   17%   16% 17%     -     -     -     -   -   15% 
  15%   15%   14%   15% 
"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
    Corporation                                                                             
    Supplemental
    Segmented
    Information                                                                             
    (In millions of
    dollars, unless
    otherwise noted)                                                                        
                                                                                            
                                                   2013                          2012
                                   Q1    Q2    Q3    Q4   YTD    Q1    Q2    Q3    Q4   YTD
    Pulp and Paper Segment                                                                  
      Sales           ($)        1,238 1,208 1,204 1,193 4,843 1,329 1,261 1,280 1,218 5,088
      Operating
      income          ($)           38    16    42    75   171   106    94    98    32   330
      Depreciation
      and
      amortization    ($)           89    87    84    85   345    94    90    90    91   365
      Impairment and
      write-down of
      property, plant
      and equipment,
      and intangible
      assets          ($)           10     5     -     5    20     2     -     -    12    14
                                                                                            
      Papers                                                                                
      Papers
      Production      ('000 ST)    795   837   827   816 3,275   870   832   788   831 3,321
      Papers
      Shipments -
      Manufactured    ('000 ST)    828   801   814   817 3,260   870   819   826   805 3,320
        Communication
        Papers        ('000 ST)    706   676   694   701 2,777   756   705   709   684 2,854
        Specialty and
        Packaging     ('000 ST)    122   125   120   116   483   114   114   117   121   466
      Paper Shipments
      - Sourced from
      3rd parties     ('000 ST)     83    85    73    41   282   100    92    91    78   361
      Paper Shipments
      - Total         ('000 ST)    911   886   887   858 3,542   970   911   917   883 3,681
      Pulp                                                                                  
      Pulp Shipments  ('000
      (a)             ADMT)        372   344   352   377 1,445   389   368   415   385 1,557
        Hardwood
        Kraft Pulp    (%)          17%   14%   14%   14%   15%   15%   16%   20%   19%   18%
        Softwood
        Kraft Pulp    (%)          56%   57%   58%   57%   57%   61%   57%   55%   56%   57%
        Fluff Pulp    (%)          27%   29%   27%   29%   28%   24%   27%   25%   25%   25%
                                                                                            
    Personal Care Segment                                                                   
      Sales           ($)          111   108   175   172   566    70   107   111   111   399
      Operating
      income          ($)           13    10    11     9    43     8    12    12    13    45
      Depreciation
      and
      amortization    ($)            6     6     9    10    31     3     6     6     5    20
      Impairment and
      write-down of
      property, plant
      and equipment   ($)            -     -     -     2     2     -     -     -     -     -
                                                                                        
    Average Exchange  $US / $CAN 1.009 1.023 1.039 1.050 1.030 1.001 1.010 0.995 0.991 0.999
    Rates
                      $CAN / $US 0.991 0.977 0.963 0.953 0.971 0.999 0.990 1.006 1.009 1.001
                      €EUR                                                       1.286
                      / $US      1.320 1.306 1.325 1.362 1.329 1.312 1.283 1.252 1.298
    (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 Corporation 
MEDIA AND INVESTOR RELATIONS Pascal Bossé Vice-President Corporate 
Communications and Investor Relations Tel.: 514-848-5938 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/February2014/07/c7727.html 
CO: Domtar Corporation
ST: Quebec
NI: PAP ERN FIN CONF  
-0- Feb/07/2014 12:35 GMT
 
 
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