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

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

PR Newswire

MONTREAL, Feb. 7, 2014

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

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 $46million ($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 $95million in the fourth quarter of  2013 
compared to an  operating income before  items^1 of $70million  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 items^1       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       Three      Twelve      Twelve
                                 months      months      months      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      Twelve
                            Three months Three months    months      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 ended December
                                                       31             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          ('000
  Production      ST)     795   837   827   816 3,275   870   832   788   831 3,321
 Papers
  Shipments -     ('000
  Manufactured    ST)     828   801   814   817 3,260   870   819   826   805 3,320
   Communication ('000
   Papers        ST)     706   676   694   701 2,777   756   705   709   684 2,854
   Specialty and ('000
   Packaging     ST)     122   125   120   116   483   114   114   117   121   466
 Paper Shipments
  - Sourced from  ('000
  3rd parties     ST)      83    85    73    41   282   100    92    91    78   361
 Paper Shipments ('000
  - Total         ST)     911   886   887   858 3,542   970   911   917   883 3,681
 Pulp                                                                  
 Pulp            ('000
  Shipments^(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 / 1.009 1.023 1.039 1.050 1.030 1.001 1.010 0.995 0.991 0.999
Rates             $CAN
               $CAN  0.991 0.977 0.963 0.953 0.971 0.999 0.990 1.006 1.009 1.001
                  / $US
               €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

Contact:

MEDIA AND INVESTOR RELATIONS
Pascal Bossé
Vice-President
Corporate Communications and Investor Relations
Tel.: 514-848-5938
 
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