Market Overview

Domtar Corporation Reports Preliminary Second Quarter 2018 Financial Results

Share:

Strong results during peak maintenance outage quarter
(All
financial information is in U.S. dollars, and all earnings per share
results are diluted, unless otherwise noted).

  • Second quarter 2018 net earnings of $0.68 per share; earnings before
    items1 of $0.65 per share
  • Pulp and paper price improvement continues
  • $177 million of cash flow from operating activities

Domtar Corporation (NYSE:UFS) (TSX:UFS) today reported net earnings of
$43 million ($0.68 per share) for the second quarter of 2018 compared to
net earnings of $54 million ($0.86 per share) for the first quarter of
2018 and net earnings of $38 million ($0.61 per share) for the second
quarter of 2017. Sales for the second quarter of 2018 were $1.4 billion.

Excluding items listed below, the Company had earnings before items1
of $41 million ($0.65 per share) for the second quarter of 2018 compared
to earnings before items1 of $55 million ($0.87 per share)
for the first quarter of 2018 and earnings before items1 of
$38 million ($0.61 per share) for the second quarter of 2017.

Second quarter 2018 items:

  • Gain on disposal of property, plant & equipment of $3 million ($2
    million after tax).

First quarter 2018 items:

  • Litigation settlement of $2 million ($2 million after tax); and
  • Gain on disposal of property, plant & equipment of $1 million ($1
    million after tax).

Second quarter 2017 items:

  • None.

QUARTERLY REVIEW

"We had a solid performance in pulp and paper given the extensive
scheduled maintenance outages at several facilities. Both businesses are
providing us with good sales and cash flow and we are building on
several important initiatives" said John D. Williams, President and
Chief Executive Officer. "We continued to implement our announced price
increases throughout the quarter with higher price realizations in both
pulp and paper, which helped offset higher maintenance and inflation on
some raw material and freight costs."

Commenting on Personal Care, Mr. Williams added, "As expected, Personal
Care results were impacted by anticipated volume reduction and continued
commodity inflation. This was partially offset by strong cost savings
and reduced overhead spending. We expect to improve margins towards the
end of the year as the benefits of the new customer wins flow through."

Operating income was $62 million in the second quarter of 2018 compared
to operating income of $77 million in the first quarter of 2018.
Depreciation and amortization totaled $79 million in the second quarter
of 2018.

Operating income before items1 was $59 million in the second
quarter of 2018 compared to an operating income before items1
of $78 million in the first quarter of 2018.

   
(In millions of dollars) 2Q 2018 1Q 2018
 
Sales $ 1,353 $ 1,345
Operating income (loss)
Pulp and Paper segment 79 76
Personal Care segment 2 8
Corporate   (19 )   (7 )
Total operating income 62 77
Operating income before items1 59 78
Depreciation and amortization 79 79

The decrease in operating income in the second quarter of 2018 was the
result of higher maintenance costs, higher selling, general and
administrative expenses, lower volume and unfavorable productivity.
These factors were partially offset by higher average selling prices for
pulp and paper and lower energy costs.

When compared to the first quarter of 2018, manufactured paper shipments
were down 2% and pulp shipments increased 1%. The
shipments-to-production ratio for paper was 102% in the second quarter
of 2018, compared to 104% in the first quarter of 2018. Paper
inventories decreased by 15,000 tons, and pulp inventories decreased by
26,000 metric tons when compared to the first quarter of 2018.

LIQUIDITY AND CAPITAL

Cash flow from operating activities amounted to $177 million and capital
expenditures were $37 million, resulting in free cash flow1
of $140 million for the second quarter of 2018. Domtar's net
debt-to-total capitalization ratio1 stood at 25% at June 30,
2018 compared to 28% at March 31, 2018.

OUTLOOK

For the remainder of the year, we expect our paper shipments to trend
better than market given the announced industry capacity closures. The
announced price increases in paper are expected to continue to
positively impact results in the second half of 2018. Pulp will benefit
from lower planned maintenance costs and we expect prices will continue
to trend positively. Personal Care results should improve towards the
end of the year as the benefits of the new customer wins flow through.
We expect moderate inflation in our costs for the second half of the
year.

EARNINGS CONFERENCE CALL

The Company will hold a conference call today at 10:00 a.m. (ET) to
discuss its second quarter 2018 financial results. Financial analysts
are invited to participate in the call by dialing 1 (800) 499-4035 (toll
free - North America) or 1 (416) 204-9269 (International) at least 10
minutes before start time, while media and other interested individuals
are invited to listen to the live webcast on the Domtar Corporation
website at www.domtar.com.

The Company will release its third quarter 2018 earnings results on
November 1, 2018 before markets open, followed by a conference call at
10:00 a.m. (ET) to discuss results. The date is tentative and will be
confirmed approximately three weeks prior to the official earnings
release date.

About Domtar

Domtar is a leading provider of a wide variety of fiber-based products
including communication, specialty and packaging papers, market pulp and
absorbent hygiene products. With approximately 10,000 employees serving
more than 50 countries around the world, Domtar is driven by a
commitment to turn sustainable wood fiber into useful products that
people rely on every day. Domtar's annual sales are approximately $5.1
billion, and its common stock is traded on the New York and Toronto
Stock Exchanges. Domtar's principal executive office is in Fort Mill,
South Carolina. To learn more, visit www.domtar.com.

Forward-Looking Statements

Statements in this release about our plans, expectations and future
performance, including the statements by Mr. Williams and those
contained under "Outlook," are "forward-looking statements." Actual
results may differ materially from those suggested by these statements
for a number of reasons, including changes in customer demand and
pricing, changes in manufacturing costs, future acquisitions and
divestitures, including facility closings, and the other reasons
identified under "Risk Factors" in our Form 10-K for 2017 as filed with
the SEC and as updated by subsequently filed Form 10-Qs. Except to the
extent required by law, we expressly disclaim any obligation to update
or revise these forward-looking statements to reflect new events or
circumstances or otherwise.




Domtar Corporation
Highlights
(In millions of
dollars, unless otherwise noted)

  Three months ended   Three months ended   Six months ended   Six months ended
June 30, June 30, June 30, June 30,
2018 2017 2018 2017
(Unaudited)
$ $ $ $
       
Selected Segment Information
Sales (1)
Pulp and Paper 1,123 999 2,223 2,072
Personal Care   247   238   509   485
Total for reportable segments 1,370 1,237 2,732 2,557
Intersegment sales   (17 )   (16 )   (34 )   (34 )
Consolidated sales   1,353   1,221   2,698   2,523
Depreciation and amortization
Pulp and Paper 61 63 122 127
Personal Care   18   16   36   32
Consolidated depreciation and amortization   79   79   158   159
Operating income (loss)(2)
Pulp and Paper 79 62 155 92
Personal Care 2 13 10 29
Corporate   (19 )   (13 )   (26 )   (21 )
Consolidated operating income 62 62 139 100
Interest expense, net 16 17 32 34
Non-service components of net periodic benefit cost   (5 )   (2 )   (9 )   (6 )
Earnings before income taxes 51 47 116 72
Income tax expense   8   9   19   14
Net earnings   43   38   97   58
Per common share (in dollars)
Net earnings
Basic 0.68 0.61 1.54 0.93
Diluted 0.68 0.61 1.54 0.93
Weighted average number of common

shares outstanding (millions)

Basic 62.9 62.6 62.8 62.6
Diluted   63.2   62.7   63.1   62.7
Cash flows from operating activities 177 121 267 212
Additions to property, plant and equipment   37   37   62   71

(1) As a result of adopting ASU 2014-09 "Revenue from Contracts with
Customers," the Company has revised its 2017 segment disclosures to
conform to the new guideline. (Previously reported numbers for Sales for
the three and six months ended June 30, 2017 were as follows: Pulp and
Paper: $999 million and $2,072 million, respectively; Personal Care:
$241 million and $490 million, respectively; Intersegment sales: $(16)
million and $(34) million, respectively.)

(2) As a result of adopting ASU 2017-07 "Improving the Presentation of
Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,"
the Company has revised its 2017 segment disclosures to conform to the
new guideline. (Previously reported numbers for Operating income (loss)
for the three and six months ended June 30, 2017 were as follows: Pulp
and Paper: $65 million and $99 million, respectively; Personal Care:
$13 million and $29 million, respectively; Corporate: $(14) million and
$(22) million, respectively.)

Domtar Corporation
Consolidated Statements of Earnings
(In
millions of dollars, unless otherwise noted)

  Three months ended   Three months ended   Six months ended   Six months ended
June 30, June 30, June 30, June 30,
2018 2017 2018 2017
(Unaudited)
$ $ $ $
       
Sales 1,353 1,221 2,698 2,523
Operating expenses
Cost of sales, excluding depreciation and amortization 1,096 971 2,180 2,050
Depreciation and amortization 79 79 158 159
Selling, general and administrative 118 107 228 213
Other operating (income) loss, net   (2 )   2   (7 )   1
  1,291   1,159   2,559   2,423
Operating income 62 62 139 100
Interest expense, net 16 17 32 34
Non-service components of net periodic benefit cost   (5 )   (2 )   (9 )   (6 )
Earnings before income taxes 51 47 116 72
Income tax expense   8     9     19     14
Net earnings   43   38   97   58
Per common share (in dollars)
Net earnings
Basic 0.68 0.61 1.54 0.93
Diluted 0.68 0.61 1.54 0.93
Weighted average number of common

shares outstanding (millions)

Basic 62.9 62.6 62.8 62.6
Diluted 63.2 62.7 63.1 62.7

Domtar Corporation
Consolidated Balance Sheets at
(In
millions of dollars)

 
June 30,   December 31,
2018 2017
(Unaudited)
$ $
Assets    
Current assets
Cash and cash equivalents 264 139
Receivables, less allowances of $6 and $7 667 704
Inventories 756 757
Prepaid expenses 35 33
Income and other taxes receivable   21     24
Total current assets 1,743 1,657
Property, plant and equipment, net 2,629 2,765
Intangible assets, net 614 633
Other assets   159   157
Total assets   5,145   5,212
Liabilities and shareholders' equity
Current liabilities
Bank indebtedness 1
Trade and other payables 722 716
Income and other taxes payable 29 24
Long-term debt due within one year   1   1
Total current liabilities 753 741
Long-term debt 1,103 1,129
Deferred income taxes and other 475 491
Other liabilities and deferred credits 356 368
Shareholders' equity
Common stock 1 1
Additional paid-in capital 1,977 1,969
Retained earnings 891 849
Accumulated other comprehensive loss   (411 )   (336 )
Total shareholders' equity   2,458   2,483
Total liabilities and shareholders' equity   5,145   5,212

Domtar Corporation
Consolidated Statements of Cash Flows
(In
millions of dollars)

  For the six months ended
June 30, 2018   June 30, 2017
(Unaudited)
$ $
Operating activities    
Net earnings 97 58
Adjustments to reconcile net earnings to cash flows from operating
activities
Depreciation and amortization 158 159
Deferred income taxes and tax uncertainties (5 ) (12 )
Net gains on disposals of property, plant and equipment (4 )
Stock-based compensation expense 5 3
Other (1 )
Changes in assets and liabilities
Receivables 27 11
Inventories (10 ) 10
Prepaid expenses (11 ) (4 )
Trade and other payables 1 (35 )
Income and other taxes 9 21
Difference between employer pension and other post-retirement

contributions and pension and other post-retirement expense

(1 )
Other assets and other liabilities   2   1
Cash flows from operating activities   267   212
Investing activities
Additions to property, plant and equipment (62 ) (71 )
Proceeds from disposals of property, plant and equipment 4
Other   (6 )  
Cash flows used for investing activities   (64 )   (71 )
Financing activities
Dividend payments (53 ) (52 )
Net change in bank indebtedness (12 )
Change in revolving credit facility (30 )
Proceeds from receivables securitization facility 25
Repayments of receivables securitization facility (25 ) (15 )
Repayments of long-term debt (63 )
Other   2   (1 )
Cash flows used for financing activities   (76 )   (148 )
Net increase (decrease) in cash and cash equivalents 127 (7 )
Impact of foreign exchange on cash (2 ) 6
Cash and cash equivalents at beginning of period   139   125
Cash and cash equivalents at end of period   264   124
Supplemental cash flow information
Net cash payments for:
Interest 28 31
Income taxes   25   15

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 are
useful to understand our operating performance and benchmark with peers
within the industry. The Company calculates "Earnings before items" and
"EBITDA before items" by excluding the after-tax (pre-tax) effect of
specified items. These metrics are presented as a complement to enhance
the understanding of operating results but not in substitution for GAAP
results.

      2018   2017
Q1   Q2   YTD Q1   Q2   Q3   Q4   Year
Reconciliation of "Earnings before items" to Net earnings (loss)                  
Net earnings (loss) ($) 54 43 97 20 38 70 (386 ) (258 )
(+) Impairment of goodwill ($) 573 573
(+) Closure and restructuring costs ($) 1 1
(+) Litigation settlement ($) 2 2
(-) Net gains on disposals of property, plant and equipment ($) (1 ) (2 ) (3 ) (3 ) (8 ) (11 )
(-) Reversal of contingent consideration ($) (2 ) (2 )
(-) U.S. Tax Reform ($) (140 ) (140 )
(=) Earnings before items ($) 55 41 96 20 38 65 40 163
(/) Weighted avg. number of common shares outstanding (diluted) (millions) 62.9 63.2 63.1 62.8 62.7 62.9 62.7 62.7
(=) Earnings before items per diluted share ($) 0.87 0.65 1.52 0.32 0.61 1.03 0.64 2.60
 
Reconciliation of "EBITDA" and "EBITDA before items" to

Net earnings (loss)

Net earnings (loss) ($) 54 43 97 20 38 70 (386 ) (258 )
(+) Income tax expense (benefit) ($) 11 8 19 5 9 3 (142 ) (125 )
(+) Interest expense, net ($) 16 16 32 17 17 16 16 66
(+) Depreciation and amortization ($) 79 79 158 80 79 80 82 321
(+) Impairment of goodwill ($) 578 578
(-) Net gains on disposals of property, plant and equipment ($) (1 ) (3 ) (4 ) (4 ) (9 ) (13 )
(=) EBITDA ($) 159 143 302 122 143 165 139 569
(/) Sales ($) 1,345 1,353 2,698 1,302 1,221 1,290 1,335 5,148
(=) EBITDA margin (%) 12 % 11 % 11 % 9 % 12 % 13 % 10 % 11 %
EBITDA ($) 159 143 302 122 143 165 139 569
(+) Closure and restructuring costs ($) 2 2
(+) Litigation settlement ($) 2 2
(-) Reversal of contingent consideration ($) (2 ) (2 )
(=) EBITDA before items ($) 161 143 304 122 143 163 141 569
(/) Sales ($) 1,345 1,353 2,698 1,302 1,221 1,290 1,335 5,148
(=) EBITDA margin before items (%) 12 % 11 % 11 % 9 % 12 % 13 % 11 % 11 %
 
Reconciliation of "Free cash flow" to Cash flows from operating
activities
Cash flows from operating activities ($) 90 177 267 91 121 112 125 449
(-) Additions to property, plant and equipment ($) (25 ) (37 ) (62 ) (34 ) (37 ) (40 ) (71 ) (182 )
(=) Free cash flow ($) 65 140 205 57 84 72 54 267
 
"Net debt-to-total capitalization" computation
Bank indebtedness ($) 1 2
(+) Long-term debt due within one year ($) 1 1 64 1 1 1
(+) Long-term debt ($) 1,103 1,103 1,188 1,203 1,164 1,129
(=) Debt ($) 1,104 1,105 1,254 1,204 1,165 1,130
(-) Cash and cash equivalents ($) (152 ) (264 ) (111 ) (124 ) (143 ) (139 )
(=) Net debt ($) 952 841 1,143 1,080 1,022 991
(+) Shareholders' equity ($) 2,493 2,458 2,685 2,770 2,886 2,483
(=) Total capitalization ($) 3,445 3,299 3,828 3,850 3,908 3,474
Net debt ($) 952 841 1,143 1,080 1,022 991
(/) Total capitalization ($) 3,445 3,299 3,828 3,850 3,908 3,474
(=) Net debt-to-total capitalization (%) 28 % 25 % 30 % 28 % 26 % 29 %

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

Domtar Corporation
Quarterly Reconciliation of Non-GAAP
Financial Measures – By Segment 2018

(In millions of dollars,
unless otherwise noted)

The following table sets forth certain non-U.S. generally accepted
accounting principles ("GAAP") financial metrics identified in bold as
"Operating income (loss) before items", "EBITDA before items" and
"EBITDA margin before items" by reportable segment. Management believes
that the financial metrics are useful to understand our operating
performance and benchmark with peers within the industry. The Company
calculates the segmented "Operating income (loss) before items" by
excluding the pre-tax effect of specified items. These metrics are
presented as a complement to enhance the understanding of operating
results but not in substitution for GAAP results.

      Pulp and Paper   Personal Care   Corporate   Total
Q1'18   Q2'18   Q3'18   Q4'18   YTD Q1'18   Q2'18   Q3'18   Q4'18   YTD Q1'18   Q2'18   Q3'18   Q4'18   YTD Q1'18   Q2'18   Q3'18   Q4'18   YTD
Reconciliation of Operating income (loss)

to "Operating income (loss) before items"

 

Operating income (loss) ($) 76 79 155 8 2 10 (7) (19) (26) 77 62 139

(-)

Net gains on disposals of property, plant and

equipment

($) (1) (3) (4) (1) (3) (4)
(+) Litigation settlement ($) 2 2 2 2
(=) Operating income (loss) before items ($) 75 76 151 8 2 10 (5) (19) (24) 78 59 137
 
Reconciliation of "Operating income (loss)

before items" to "EBITDA before items"

Operating income (loss) before items ($) 75 76 151 8 2 10 (5) (19) (24) 78 59 137
(+) Non-service components of net periodic benefit cost ($) 4 6 10 (1) (1) 4 5 9
(+) Depreciation and amortization ($) 61 61 122 18 18 36 79 79 158
(=) EBITDA before items ($) 140 143 283 26 20 46 (5) (20) (25) 161 143 304
(/) Sales ($) 1,100 1,123 2,223 262 247 509 1,362 1,370 2,732
(=) EBITDA margin before items (%) 13% 13% 13% 10% 8% 9% 12% 10% 11%

"Operating income (loss) before items", "EBITDA before items" and
"EBITDA margin before items" have no standardized meaning prescribed by
GAAP and are not necessarily comparable to similar measures presented by
other companies and therefore should not be considered in isolation or
as a substitute for Operating income (loss) or any other earnings
statement, cash flow statement or balance sheet financial information
prepared in accordance with GAAP. It is important for readers to
understand that certain items may be presented in different lines by
different companies on their financial statements, thereby leading to
different measures for different companies.

Domtar Corporation
Quarterly Reconciliation of Non-GAAP
Financial Measures – By Segment 2017

(In millions of dollars,
unless otherwise noted)

The following table sets forth certain non-U.S. generally accepted
accounting principles ("GAAP") financial metrics identified in bold as
"Operating income (loss) before items", "EBITDA before items" and
"EBITDA margin before items" by reportable segment. Management believes
that the financial metrics are useful to understand our operating
performance and benchmark with peers within the industry. The Company
calculates the segmented "Operating income (loss) before items" by
excluding the pre-tax effect of specified items. These metrics are
presented as a complement to enhance the understanding of operating
results but not in substitution for GAAP results.

      Pulp and Paper   Personal Care   Corporate   Total
Q1'17   Q2'17   Q3'17   Q4'17   Year Q1'17   Q2'17   Q3'17   Q4'17   Year Q1'17   Q2'17   Q3'17   Q4'17   Year Q1'17   Q2'17   Q3'17   Q4'17   Year

Reconciliation of Operating income (loss)

to "Operating income (loss) before items"

Operating income (loss) ($) 30 62 89 56 237 16 13 8 (564) (527) (8) (13) (12) (5) (38) 38 62 85 (513) (328)
(+) Impairment of goodwill ($) 578 578 578 578
(-)

Net gains on disposals of property, plant and equipment

 

($) (4) (4) (9) (9) (4) (9) (13)
(-) Reversal of contingent consideration ($) (2) (2) (2) (2)
(+) Closure and restructuring costs ($) 2 2 2 2
(=) Operating income (loss) before items ($) 30 62 85 56 233 16 13 8 16 53 (8) (13) (14) (14) (49) 38 62 79 58 237
 
Reconciliation of "Operating income (loss)

before items" to "EBITDA before items"

Operating income (loss) before items ($) 30 62 85 56 233 16 13 8 16 53 (8) (13) (14) (14) (49) 38 62 79 58 237
(+) Non-service components of net periodic benefit cost ($) 4 3 4 2 13 (1) (1) (2) 4 2 4 1 11
(+) Depreciation and amortization ($) 64 63 63 64 254 16 16 17 18 67 80 79 80 82 321
(=) EBITDA before items ($) 98 128 152 122 500 32 29 25 34 120 (8) (14) (14) (15) (51) 122 143 163 141 569
(/) Sales ($) 1,073 999 1,054 1,090 4,216 247 238 251 260 996 1,320 1,237 1,305 1,350 5,212
(=) EBITDA margin before items (%) 9% 13% 14% 11% 12% 13% 12% 10% 13% 12% 9% 12% 12% 10% 11%

"Operating income (loss) before items", "EBITDA before items" and
"EBITDA margin before items" have no standardized meaning prescribed by
GAAP and are not necessarily comparable to similar measures presented by
other companies and therefore should not be considered in isolation or
as a substitute for Operating income (loss) or any other earnings
statement, cash flow statement or balance sheet financial information
prepared in accordance with GAAP. It is important for readers to
understand that certain items may be presented in different lines by
different companies on their financial statements, thereby leading to
different measures for different companies.

Domtar Corporation
Supplemental Segmented Information
(In
millions of dollars, unless otherwise noted)

    2018   2017
Q1   Q2   YTD Q1   Q2   Q3   Q4   Year
Pulp and Paper Segment                  
Sales ($) 1,100 1,123 2,223 1,073 999 1,054 1,090 4,216
Operating income ($) 76 79 155 30 62 89 56 237
Depreciation and

amortization

($) 61 61 122 64 63 63 64 254
Paper
Paper Production ('000 ST) 739 739 1,478 709 715 745 724 2,893
Paper Shipments -

Manufactured

('000 ST) 769 754 1,523 745 698 722 726 2,891
Communication Papers ('000 ST) 640 615 1,255 622 582 597 600 2,401
Specialty and Packaging

Papers

('000 ST) 129 139 268 123 116 125 126 490
Paper Shipments - Sourced

from 3rd parties

('000 ST) 28 26 54 29 26 29 25 109
Paper Shipments - Total ('000 ST) 797 780 1,577 774 724 751 751 3,000
Pulp
Pulp Shipments(a) ('000 ADMT) 374 377 751 453 383 424 462 1,722
Pulp Shipments mix(b):
Hardwood Kraft Pulp (%) 4 % 3 % 4 % 4 % 3 % 7 % 5 % 5 %
Softwood Kraft Pulp (%) 58 % 56 % 57 % 67 % 62 % 61 % 54 % 61 %
Fluff Pulp (%) 38 % 41 % 39 % 29 % 35 % 32 % 41 % 34 %
 
Personal Care Segment
Sales ($) 262 247 509 247 238 251 260 996
Operating income (loss) ($) 8 2 10 16 13 8 (564 ) (527 )
Depreciation and

amortization

($) 18 18 36 16 16 17 18 67
Impairment of goodwill ($) 578 578
 
Average Exchange Rates $US / $CAN 1.264 1.290 1.277 1.323 1.344 1.253 1.272 1.297
$CAN / $US 0.791 0.775 0.783 0.756 0.744 0.798 0.786 0.771
€ / $US 1.229 1.192 1.211 1.066 1.100 1.175 1.178 1.130

(a) Figures represent Pulp Shipments to third parties.

(b) Percentages include Pulp Shipments to our Personal Care
segment.

Note: the term "ST" refers to a short ton and the term "ADMT" refers to
an air dry metric ton.


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

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