Domtar's preliminary Q1 results show net income of US$39M is down from US$45M a year ago, but sales up 3.6% year-over-year, to US$1.39B; Q1 items include, after tax, US$1M in closure and restructuring costs, US$2M negative impact of purchase accounting
Debra Garcia
MONTREAL
,
April 24, 2014
(press release)
–
First quarter financial performance impacted by adverse weather conditions TICKER SYMBOL MONTREAL, AprilDomtar Corporation (NYSE: UFS) (TSX: UFS) today reported net earnings of $39 million ($1.20 per share) for the first quarter of 2014 compared to net earnings of $65 million ($2.00 per share) for the fourth quarter of 2013 and net earnings of $45 million ($1.29 per share) for the first quarter of 2013. Sales for the first quarter of 2014 were $1,394 million. Excluding items listed below, the Company had earnings before items1 of $42 million ($1.29 per share) for the first quarter of 2014 compared to earnings before items1 of $68 million ($2.09 per share) for the fourth quarter of 2013 and earnings before items1 of $33 million ($0.95 per share) for the first quarter of 2013. First quarter 2014 items: Fourth quarter 2013 items: First quarter 2013 items: Commenting on the first quarter results, John D. Williams, President and Chief Executive Officer, said, "Severe winter weather across much of the eastern part of North America negatively impacted some of our pulp and paper operations. In particular, our mills experienced greater than normal energy and fiber costs and reduced productivity. Nonetheless, we benefited from higher pulp and paper prices with the successful implementation of price increases." Mr. Williams added, "The integration of Indas is progressing well and the business performed in line with our expectations in the first quarter. I am pleased with the progress made so far in our Personal Care division, despite some erosion of sales in our baby diaper business. We are well underway with our adult incontinence organic growth plan and our teams are moving fast in the deployment of new machinery to begin manufacturing product-for-sale by the end of the fourth quarter. We are bringing new production online to provide the capacity and the product mix required to better serve our targeted customers." QUARTERLY REVIEW Operating income before items1 was $83 million in the first quarter of 2014 compared to an operating income before items1 of $95 million in the fourth quarter of 2013. Depreciation and amortization totaled $99 million in the first quarter of 2014. (In millions of dollars) 1Q 2014 4Q 2013 Sales $1,394 $1,359 Operating income (loss) Pulp and Paper segment 69 75 Personal Care segment 15 9 Corporate (5) 9 Total 79 93 Operating income before items1 83 95 Depreciation and amortization 99 95 The decrease in operating income before items1 in the first quarter of 2014 was the result of higher fiber, energy and other costs, lower volumes for pulp and paper and higher selling, general and administrative expenses. These factors were partially offset by higher average selling prices for paper and pulp, the addition of Indas and a favorable exchange rate. When compared to the fourth quarter of 2013, manufactured paper shipments decreased 1.6% and pulp shipments decreased 15.6%. The shipments-to-production ratio for paper was 100% in the first quarter of 2014, compared to 100% in the fourth quarter of 2013. Paper inventories decreased by 4,000 tons while pulp inventories increased by 13,000 metric tons at the end of March compared to December levels. LIQUIDITY AND CAPITAL Cash flow provided from operating activities amounted to $141 million and capital expenditures were $45 million, resulting in free cash flow1 of $96 million for the first quarter of 2014. Following the completion of our acquisition of Indas on January 2, 2014, Domtar's net debt-to-total capitalization ratio1 stood at 33% at March 31, 2014 compared to 24% at December 31, 2013. OUTLOOK Price realizations in paper are expected to further improve from the first quarter as a result of recently announced price increases while our volumes are expected to remain relatively stable and input costs are expected to return to more normal levels for the remainder of the year. The second quarter is expected to be affected by seasonally higher maintenance activity. Personal Care will continue to benefit from the recent acquisition of Indas and 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 first quarter 2014 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 May 8, 2014. The Company will hold its 2014 Annual Meeting of Stockholders on Wednesday, April 30, 2014 at 9:00 a.m. (ET) at the Montreal Museum of Fine Arts, Claire and Marc Bourgie Pavilion, 1339 Sherbrooke Street West, Montreal, Quebec. The Company will release its second quarter 2014 earnings on July 24, 2014 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 Forward-Looking Statements ____________________________ Domtar Corporation Three months ended March 31 Three months ended March 31 2014 2013 (Unaudited) $ $ Selected Segment Information Sales Pulp and Paper 1,168 1,238 Personal Care 233 111 Total for reportable segments 1,401 1,349 Intersegment sales - Pulp and Paper (7) (4) Consolidated sales 1,394 1,345 Depreciation and amortization and impairment and write-down of property, plant and equipment Pulp and Paper 83 89 Personal Care 16 6 Total for reportable segments 99 95 Impairment and write-down of property, plant and equipment - Pulp and Paper - 10 Consolidated depreciation and amortization and impairment and write-down of property, plant and equipment 99 105 Operating income (loss) Pulp and Paper 69 38 Personal Care 15 13 Corporate (5) (2) Consolidated operating income 79 49 Interest expense, net 25 25 Earnings before income taxes and equity loss 54 24 Income tax expense (benefit) 15 (22) Equity loss, net of taxes - 1 Net earnings 39 45 Per common share (in dollars) Net earnings Basic 1.20 1.29 Diluted 1.20 1.29 Weighted average number of common and exchangeable shares outstanding (millions) Basic 32.5 34.8 Diluted 32.6 34.9 Cash flows provided from operating activities 141 63 Additions to property, plant and equipment 45 56 Domtar Corporation Three months ended March 31 Three months ended March 31 2014 2013 (Unaudited) $ $ Sales 1,394 1,345 Operating expenses Cost of sales, excluding depreciation and amortization 1,103 1,082 Depreciation and amortization 99 95 Selling, general and administrative 114 91 Impairment and write-down of property, plant and equipment - 10 Closure and restructuring costs 1 - Other operating (income) loss, net (2) 18 1,315 1,296 Operating income 79 49 Interest expense, net 25 25 Earnings before income taxes and equity loss 54 24 Income tax expense (benefit) 15 (22) Equity loss, net of taxes - 1 Net earnings 39 45 Per common share (in dollars) Net earnings Basic 1.20 1.29 Diluted 1.20 1.29 Weighted average number of common and exchangeable shares outstanding (millions) Basic 32.5 34.8 Diluted 32.6 34.9 Domtar Corporation March 31 December 31 2014 2013 (Unaudited) $ $ Assets Current assets Cash and cash equivalents 130 655 Receivables, less allowances of $7 and $4 688 601 Inventories 720 685 Prepaid expenses 24 23 Income and other taxes receivable 52 61 Deferred income taxes 45 52 Total current assets 1,659 2,077 Property, plant and equipment, at cost 8,892 8,883 Accumulated depreciation (5,616) (5,594) Net property, plant and equipment 3,276 3,289 Goodwill 655 369 Intangible assets, net of amortization 655 407 Other assets 131 136 Total assets 6,376 6,278 Liabilities and shareholders' equity Current liabilities Bank indebtedness 8 15 Trade and other payables 718 673 Income and other taxes payable 24 17 Long-term debt due within one year 15 4 Total current liabilities 765 709 Long-term debt 1,490 1,510 Deferred income taxes and other 991 923 Other liabilities and deferred credits 359 354 Shareholders' equity Exchangeable shares 32 44 Additional paid-in capital 2,014 1,999 Retained earnings 825 804 Accumulated other comprehensive loss (100) (65) Total shareholders' equity 2,771 2,782 Total liabilities and shareholders' equity 6,376 6,278 Domtar Corporation Three months ended March 31 Three months ended March 31 2014 2013 (Unaudited) $ $ Operating activities Net earnings 39 45 Adjustments to reconcile net earnings to cash flows provided from operating activities Depreciation and amortization 99 95 Deferred income taxes and tax uncertainties - 1 Impairment and write-down of property, plant and equipment - 10 Net gains on disposals of property, plant and equipment - (10) Stock-based compensation expense 1 1 Equity loss, net - 1 Other 3 (1) Changes in assets and liabilities, excluding the effects of acquisition of business Receivables 9 (53) Inventories (14) (1) Prepaid expenses 3 (2) Trade and other payables (23) (8) Income and other taxes 20 (18) Difference between employer pension and other post-retirement contributions and pension and other post-retirement expense (2) 5 Other assets and other liabilities 6 (2) Cash flows provided from operating activities 141 63 Investing activities Additions to property, plant and equipment (45) (56) Proceeds from disposals of property, plant and equipment - 9 Acquisition of business, net of cash acquired (546) - Investment in joint venture - (1) Cash flows used for investing activities (591) (48) Financing activities Dividend payments (18) (16) Net change in bank indebtedness (8) (5) Change in revolving bank credit facility and other borrowings (48) - Repayment of long-term debt - (95) Stock repurchase - (47) Other 1 1 Cash flows used for financing activities (73) (162) Net decrease in cash and cash equivalents (523) (147) Impact of foreign exchange on cash (2) (1) Cash and cash equivalents at beginning of period 655 661 Cash and cash equivalents at end of period 130 513 Supplemental cash flow information Net cash payments for: Interest (including $2 million of tender offer premiums in 2013) 22 12 Income taxes (refund) paid (1) 1 Domtar Corporation 2014 2013 Q1 Q1 Q2 Q3 Q4 YTD Reconciliation of "Earnings before items" to Net earnings (loss) Net earnings (loss) ($) 39 45 (46) 27 65 91 (+) Impairment and write-down of property, plant and equipment ($) - 7 3 - 7 17 (+) Closure and restructuring costs ($) 1 - 13 - - 13 (-) Net (gains) losses on disposals of property, plant and equipment and business ($) - (6) - 12 (4) 2 (+) Impact of purchase accounting ($) 2 - - 2 - 2 (+) Reversal of alternative fuel tax credits ($) - 18 - - - 18 (-) Cellulosic biofuel producer credits ($) - (33) - - - (33) (+) Loss on repurchase of long-term debt ($) - 2 - - - 2 (+) Weston litigation settlement ($) - - 46 - - 46 (=) Earnings before items ($) 42 33 16 41 68 158 (/) Weighted avg. number of common and exchangeable shares outstanding (diluted) (millions) 32.6 34.9 33.4 32.8 32.5 33.4 (=) Earnings before items per diluted share ($) 1.29 0.95 0.48 1.25 2.09 4.73 Reconciliation of "EBITDA" and "EBITDA before items" to Net earnings (loss) Net earnings (loss) ($) 39 45 (46) 27 65 91 (+) Equity loss, net of taxes ($) - 1 - - - 1 (+) Income tax expense (benefit) ($) 15 (22) (5) 1 6 (20) (+) Interest expense, net ($) 25 25 21 21 22 89 (=) Operating income (loss) ($) 79 49 (30) 49 93 161 (+) Depreciation and amortization ($) 99 95 93 93 95 376 (+) Impairment and write-down of property, plant and equipment ($) - 10 5 - 7 22 (-) Net (gains) losses on disposals of property, plant and equipment and business ($) - (10) - 19 (5) 4 (=) EBITDA ($) 178 144 68 161 190 563 (/) Sales ($) 1,394 1,345 1,312 1,375 1,359 5,391 (=) EBITDA margin (%) 13% 11% 5% 12% 14% 10% EBITDA ($) 178 144 68 161 190 563 (+) Reversal of alternative fuel tax credits ($) - 26 - - - 26 (+) Closure and restructuring costs ($) 1 - 18 - - 18 (+) Impact of purchase accounting ($) 3 - - 2 - 2 (+) Weston litigation settlement ($) - - 49 - - 49 (=) EBITDA before items ($) 182 170 135 163 190 658 (/) Sales ($) 1,394 1,345 1,312 1,375 1,359 5,391 (=) EBITDA margin before items (%) 13% 13% 10% 12% 14% 12% Reconciliation of "Free cash flow" to Cash flow provided from operating activities Cash flow provided from operating activities ($) 141 63 120 104 124 411 (-) Additions to property, plant and equipment ($) (45) (56) (62) (62) (62) (242) (=) Free cash flow ($) 96 7 58 42 62 169 "Net debt-to-total capitalization" computation Bank indebtedness ($) 8 13 2 6 15 (+) Long-term debt due within one year ($) 15 8 7 6 4 (+) Long-term debt ($) 1,490 1,104 1,102 1,102 1,510 (=) Debt ($) 1,513 1,125 1,111 1,114 1,529 (-) Cash and cash equivalents ($) (130) (513) (432) (191) (655) (=) Net debt ($) 1,383 612 679 923 874 (+) Shareholders' equity ($) 2,771 2,842 2,652 2,681 2,782 (=) Total capitalization ($) 4,154 3,454 3,331 3,604 3,656 Net debt ($) 1,383 612 679 923 874 ( / ) Total capitalization ($) 4,154 3,454 3,331 3,604 3,656 (=) Net debt-to-total capitalization (%) 33% 18% 20% 26% 24% "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 Pulp and Paper Personal Care (1) Corporate Total Q1'14 Q2'14 Q3'14 Q4'14 YTD Q1'14 Q2'14 Q3'14 Q4'14 YTD Q1'14 Q2'14 Q3'14 Q4'14 YTD Q1'14 Q2'14 Q3'14 Q4'14 YTD Reconciliation of Operating income (loss) to "Operating income (loss) before items" Operating income (loss) ($) 69 - - - 69 15 - - - 15 (5) - - - (5) 79 - - - 79 (+) Closure and restructuring costs ($) - - - - - 1 - - - 1 - - - - - 1 - - - 1 (+) Impact of purchase accounting ($) - - - - - 3 - - - 3 - - - - - 3 - - - 3 (=) Operating income (loss) before items ($) 69 - - - 69 19 - - - 19 (5) - - - (5) 83 - - - 83 Reconciliation of "Operating income (loss) before items" to "EBITDA before items" Operating income (loss) before items ($) 69 - - - 69 19 - - - 19 (5) - - - (5) 83 - - - 83 (+) Depreciation and amortization ($) 83 - - - 83 16 - - - 16 - - - - - 99 - - - 99 (=) EBITDA before items ($) 152 - - - 152 35 - - - 35 (5) - - - (5) 182 - - - 182 (/) Sales ($) 1,168 - - - 1,168 233 - - - 233 - - - - - 1,401 - - - 1,401 (=) EBITDA margin before items (%) 13% - - - 13% 15% - - - 15% - - - - - 13% - - - 13% "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 January 2, 2014, the Company acquired 100% of the shares of Laboratorios Indas, S.A.U. in Spain. Domtar Corporation 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) ($) 38 16 42 75 171 13 10 11 9 43 (2) (56) (4) 9 (53) 49 (30) 49 93 161 (+) Impairment and write-down of property, plant and equipment ($) 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 2014 2013 Q1 Q1 Q2 Q3 Q4 YTD Pulp and Paper Segment Sales ($) 1,168 1,238 1,208 1,204 1,193 4,843 Operating income ($) 69 38 16 42 75 171 Depreciation and amortization ($) 83 89 87 84 85 345 Impairment and write-down of property, plant and equipment ($) - 10 5 - 5 20 Papers Papers Production ('000 ST) 801 793 829 814 810 3,246 Papers Shipments - Manufactured ('000 ST) 804 828 801 814 817 3,260 Communication Papers ('000 ST) 678 706 676 694 701 2,777 Specialty and Packaging ('000 ST) 126 122 125 120 116 483 Paper Shipments - Sourced from 3rd parties ('000 ST) 50 83 85 73 41 282 Paper Shipments - Total ('000 ST) 854 911 886 887 858 3,542 Pulp Pulp Shipments(a) ('000 ADMT) 318 372 344 352 377 1,445 Hardwood Kraft Pulp (%) 12% 17% 14% 14% 14% 15% Softwood Kraft Pulp (%) 58% 56% 57% 59% 57% 57% Fluff Pulp (%) 30% 27% 29% 27% 29% 28% Personal Care Segment Sales ($) 233 111 108 175 172 566 Operating income ($) 15 13 10 11 9 43 Depreciation and amortization ($) 16 6 6 9 10 31 Impairment and write-down of property, plant and equipment ($) - - - - 2 2 Average Exchange Rates $US / $CAN 1.103 1.009 1.023 1.039 1.050 1.030 $CAN / $US 0.906 0.991 0.977 0.963 0.953 0.971 €EUR / $US 1.370 1.320 1.306 1.325 1.362 1.328 (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
(All financial information is in U.S. dollars, and all earnings per share results are diluted, unless otherwise noted.)
(NYSE: UFS) (TSX: UFS)
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.
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 2013 as filed with the SEC and as updated by subsequently filed Form 10-Q's. 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.
Highlights
(In millions of dollars, unless otherwise noted)
Consolidated Statements of Earnings
(In millions of dollars, unless otherwise noted)
Consolidated Balance Sheets at
(In millions of dollars)
Consolidated Statements of Cash Flows
(In millions of dollars)
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.
Quarterly Reconciliation of Non-GAAP Financial Measures - By Segment 2014
(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.
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.
Supplemental Segmented Information
(In millions of dollars, unless otherwise noted)
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