Domtar Corporation Reports Preliminary First Quarter 2020 Financial Results

Domtar Corporation (NYSE: UFS) (TSX: UFS) today reported net earnings of $5 million ($0.09 per share) for the first quarter of 2020 compared to a net loss of $34 million ($0.59 per share) for the fourth quarter of 2019 and net earnings of $80 million ($1.27 per share) for the first quarter of 2019. Sales for the first quarter of 2020 were $1.3 billion.

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Excluding items listed below, the Company had earnings before items¹ of $5 million ($0.09 per share) for the first quarter of 2020 compared to earnings before items¹ of $2 million ($0.03 per share) for the fourth quarter of 2019 and earnings before items¹ of $91 million ($1.44 per share) for the first quarter of 2019.

ITEMS

Description	Segment	Line item	Amount	After tax effect	EPS impact (per share)
			(in millions)
First quarter 2020
● None
Fourth quarter 2019
● Pension settlement loss	Pulp and Paper	Non-service components of net periodic benefit cost	$30	$22	$0.38
● Paper machine closures	Pulp and Paper	Closure and restructuring costs	$17	$13	$0.22
● Margin improvement plan	Personal Care	Closure and restructuring costs	$2	$1	$0.02
First quarter 2019
● Margin improvement plan	Personal Care	Impairment of long-lived assets	$10	$8	$0.12
● Margin improvement plan	Personal Care	Closure and restructuring costs	$4	$3	$0.05

QUARTERLY REVIEW

“As the global community reacts to COVID-19 and the large-scale effort to contain it continues, we remain focused on navigating the crisis, keeping our employees and their families safe, serving our customers as an essential business, and protecting our financial stability. We are taking steps to reduce spending to further strengthen our balance sheet, liquidity and cash flow while seeking to ensure we are well positioned when the economy starts moving again”, said John D. Williams, President and Chief Executive Officer.

“Despite our paper volumes increasing in Q1, we experienced a significant reduction of orders in April due to the COVID crisis and the resulting lockdown of schools, offices, retailers and other business sectors. As a result, we are taking the appropriate steps to optimize our operations and to remain an agile, reliable partner to our customers. We continue to closely monitor customer orders and backlogs, and will adjust capacity accordingly, but we anticipate inventory to be at appropriate levels as a result of our recently-announced capacity reduction plan,” said Mr. Williams. “Our pulp shipments were stable in Q1 despite some logistical challenges and a major shutdown of operations in China due to COVID-19. We did see good demand from our North American tissue customers, and we expect overall demand for pulp in the second quarter to remain strong, particularly in China as they continue to reopen their economy.”

Commenting on Personal Care, Mr. Williams added, “We had a record sales and EBITDA quarter. Our sales line in Q1 benefited from consumer pantry loading in preparation for in-home quarantine and the scale-up of new customer wins. We continue to increase operating rates, and we have established rapid response teams to maximize productivity to support an uptick in demand, inventory replenishment and portfolio simplification.”

Operating income was $19 million in the first quarter of 2020 compared to an operating loss of $15 million in the fourth quarter of 2019. Depreciation and amortization totaled $72 million in the first quarter of 2020.

Operating income before items¹ was $19 million in the first quarter of 2020 compared to operating income before items¹ of $4 million in the fourth quarter of 2019.

(In millions of dollars)		1Q 2020				4Q 2019
Sales		$	1,278			$	1,244
Operating income (loss)
Pulp and Paper segment			4				(11	)
Personal Care segment			20				8
Corporate			(5	)			(12	)
Total operating income (loss)			19				(15	)
Operating income before items1			19				4
Depreciation and amortization			72				74

The increase in operating income in the first quarter of 2020 was the result of favorable productivity, higher volume, lower selling, general and administrative expenses, lower raw material and freight costs and favorable exchange rates. These factors were partially offset by lower average selling prices in pulp and paper and higher maintenance, fixed and other costs.

When compared to the fourth quarter of 2019, manufactured paper shipments were up 4% and pulp shipments decreased 4%. The shipment-to-production ratio for paper was 105% in the first quarter of 2020, compared to 106% in the fourth quarter of 2019. Paper inventories decreased by 30,000 tons, and pulp inventories increased by 24,000 metric tons when compared to the fourth quarter of 2019.

LIQUIDITY AND CAPITAL RESOURCES

Cash flow from operating activities amounted to $88 million and capital expenditures were $62 million, resulting in free cash flow¹ of $26 million for the first quarter of 2020. Domtar’s net debt-to-total capitalization ratio¹ stood at 30% at March 31, 2020 compared to 27% at December 31, 2019. At March 31, 2020, we had total liquidity of approximately $643 million ($152 million of cash on hand, $491 million in available credit facilities) with no near-term debt maturities. Subsequently to March 31, 2020, the Company closed a new $300 million, five year term loan, the proceeds of which will be used to further improve its liquidity position.

COVID-19 UPDATE

Government authorities across the globe have recognized the importance of the forest products sector based on the products we manufacture and their end uses. Accordingly, Domtar anticipates continuing to operate in all of its business segments, but the Company has taken and may take further temporary steps to reduce its current paper capacity to be in line with current and expected demand levels for the duration of the crisis.

Domtar has implemented COVID-19 response and business continuity plans to protect its employees and their families, to safeguard the continuity of Domtar’s operations, and to ensure full support to its customers and partners.

COST CONTROL MEASURES

Domtar is taking further actions to strengthen cash flow and improve liquidity. Cost control actions, capital deferment, closely managing working capital and a reduction of operating costs and selling, general and administrative expenses will generate cash savings, providing us flexibility to take advantage of opportunities as the market rebounds.

SUSPENSION OF CAPITAL RETURN PROGRAM

Due to the unprecedented market conditions and uncertainty caused by COVID-19, the Company has suspended the payment of its regular quarterly dividend and stock repurchase program in order to preserve cash and provide additional flexibility in the current environment. The Board of Directors will continue to evaluate the Company’s capital return program based upon customary considerations, including market conditions.

OUTLOOK

The high degree of uncertainty and volatility day-to-day and the longer term potential impacts of the economic lockdown remain unclear. In Paper, we expect significantly lower demand in the second quarter. We expect demand for softwood and fluff pulp to remain strong in the near-term driven by accelerated growth in tissue and towel, while containment measures across Europe and North America are expected to weigh on certain end-use markets. Personal Care will continue to benefit from higher usage and the impact from new customer wins, but we expect a portion of the demand increase from consumer stock-up may reverse later in the year. Raw material costs are expected to remain stable.

EARNINGS CONFERENCE CALL

The Company will hold a conference call today at 10:00 a.m. (ET) to discuss its first quarter 2020 financial results. Financial analysts are invited to participate in the call by dialing 1 [phone] 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 second quarter 2020 earnings results on July 30, 2020 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 9,700 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 $5.2 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 the COVID-19 pandemic and the resulting decrease in paper sales and the challenges we face in maintaining manufacturing operations, 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 2019 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)
		For the three months ended
		March 31,				March 31,
		2020				2019
		(Unaudited)
		$				$
Selected Segment Information
Sales
Pulp and Paper			1,031				1,157
Personal Care			266				239
Total for reportable segments			1,297				1,396
Intersegment sales			(19	)			(20	)
Consolidated sales			1,278				1,376
Depreciation and amortization
Pulp and Paper			58				58
Personal Care			14				15
Total for reportable segments			72				73
Impairment of long-lived assets - Personal Care			—				10
Consolidated depreciation and amortization and impairment of long-lived assets			72				83
Operating income (loss)
Pulp and Paper			4				144
Personal Care			20				(8	)
Corporate			(5	)			(21	)
Consolidated operating income			19				115
Interest expense, net			14				13
Non-service components of net periodic benefit cost			(4	)			(3	)
Earnings before income taxes and equity loss			9				105
Income tax expense			3				24
Equity loss, net of taxes			1				1
Net earnings			5				80
Per common share (in dollars)
Net earnings
Basic			0.09				1.27
Diluted			0.09				1.27
Weighted average number of common shares outstanding (millions)
Basic			56.1				63.0
Diluted			56.2				63.2
Cash flows from operating activities			88				55
Additions to property, plant and equipment			62				46

As a result of changes in our organization structure, we have changed our segment reporting. Starting January 1, 2020, our materials business EAM Corporation, (“EAM”), a manufacturer of high quality airlaid and ultrathin laminated cores, previously reported under our Personal Care segment is now presented under our Pulp and Paper segment. Prior period segment results have been restated to the new segment presentation with no significant impact on segment results. There were no changes to our consolidated sales or operating income.

Domtar Corporation Consolidated Statements of Earnings (In millions of dollars, unless otherwise noted)
		For the three months ended
		March 31,				March 31,
		2020				2019
		(Unaudited)
		$				$
Sales			1,278				1,376
Operating expenses
Cost of sales, excluding depreciation and amortization			1,083				1,052
Depreciation and amortization			72				73
Selling, general and administrative			102				123
Impairment of long-lived assets			—				10
Closure and restructuring costs			—				4
Other operating loss (income), net			2				(1	)
			1,259				1,261
Operating income			19				115
Interest expense, net			14				13
Non-service components of net periodic benefit cost			(4	)			(3	)
Earnings before income taxes and equity loss			9				105
Income tax expense			3				24
Equity loss, net of taxes			1				1
Net earnings			5				80
Per common share (in dollars)
Net earnings
Basic			0.09				1.27
Diluted			0.09				1.27
Weighted average number of common shares outstanding (millions)
Basic			56.1				63.0
Diluted			56.2				63.2

Domtar Corporation Consolidated Balance Sheets at (In millions of dollars)
		March 31,				December 31,
		2020				2019
		(Unaudited)
		$				$
Assets
Current assets
Cash and cash equivalents			152				61
Receivables, less allowances of $10 and $6			600				577
Inventories			740				786
Prepaid expenses			32				33
Income and other taxes receivable			27				61
Total current assets			1,551				1,518
Property, plant and equipment, net			2,493				2,567
Operating lease right-of-use assets			77				81
Intangible assets, net			561				573
Other assets			151				164
Total assets			4,833				4,903
Liabilities and shareholders' equity
Current liabilities
Bank indebtedness			—				9
Trade and other payables			700				705
Income and other taxes payable			26				23
Operating lease liabilities due within one year			27				28
Long-term debt due within one year			1				1
Total current liabilities			754				766
Long-term debt			1,102				938
Operating lease liabilities			65				69
Deferred income taxes and other			457				479
Other liabilities and deferred credits			274				275
Shareholders' equity
Common stock			1				1
Additional paid-in capital			1,710				1,770
Retained earnings			978				998
Accumulated other comprehensive loss			(508	)			(393	)
Total shareholders' equity			2,181				2,376
Total liabilities and shareholders' equity			4,833				4,903

Domtar Corporation Consolidated Statements of Cash Flows (In millions of dollars)
	For the three months ended
	March 31, 2020				March 31, 2019
	(Unaudited)
	$				$
Operating activities
Net earnings		5				80
Adjustments to reconcile net earnings to cash flows from operating activities
Depreciation and amortization		72				73
Deferred income taxes and tax uncertainties		1				(3	)
Impairment of long-lived assets		—				10
Stock-based compensation expense		1				2
Equity loss, net		1				1
Changes in assets and liabilities
Receivables		(28	)			(30	)
Inventories		28				(49	)
Prepaid expenses		(5	)			—
Trade and other payables		(16	)			(69	)
Income and other taxes		39				26
Difference between employer pension and other post-retirement contributions and pension and other post-retirement expense		(1	)			1
Other assets and other liabilities		(9	)			13
Cash flows from operating activities		88				55
Investing activities
Additions to property, plant and equipment		(62	)			(46	)
Cash flows used for investing activities		(62	)			(46	)
Financing activities
Dividend payments		(26	)			(27	)
Stock repurchase		(59	)			—
Net change in bank indebtedness		(10	)			3
Change in revolving credit facility		140				—
Proceeds from receivables securitization facility		25				20
Repayments of receivables securitization facility		—				(20	)
Other		(3	)			(1	)
Cash flows provided from (used for) financing activities		67				(25	)
Net increase (decrease) in cash and cash equivalents		93				(16	)
Impact of foreign exchange on cash		(2	)			(1	)
Cash and cash equivalents at beginning of period		61				111
Cash and cash equivalents at end of period		152				94
Supplemental cash flow information
Net cash payments (refund) for:
Interest		17				16
Income taxes		(25	)			6

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.

						2020				2019
						Q1				Q1				Q2				Q3				Q4				Year
Reconciliation of "Earnings before items" to Net earnings (loss)
		Net earnings (loss)		($)			5				80				18				20				(34	)			84
	(+)	Pension settlement loss		($)			—				—				—				—				22				22
	(+)	Impairment of long-lived assets		($)			—				8				12				26				—				46
	(+)	Closure and restructuring costs		($)			—				3				6				9				14				32
	(=)	Earnings before items		($)			5				91				36				55				2				184
	(/)	Weighted avg. number of common shares outstanding (diluted)		(millions)			56.2				63.2				63.3				61.7				57.3				61.4
	(=)	Earnings before items per diluted share		($)			0.09				1.44				0.57				0.89				0.03				3.00
Reconciliation of "EBITDA" and "EBITDA before items" to Net earnings (loss)
		Net earnings (loss)		($)			5				80				18				20				(34	)			84
	(+)	Equity loss, net of taxes		($)			1				1				—				—				1				2
	(+)	Income tax expense (benefit)		($)			3				24				5				(1	)			(26	)			2
	(+)	Interest expense, net		($)			14				13				13				12				14				52
	(+)	Depreciation and amortization		($)			72				73				74				72				74				293
	(+)	Impairment of long-lived assets		($)			—				10				15				33				—				58
	(=)	EBITDA		($)			95				201				125				136				29				491
	(/)	Sales		($)			1,278				1,376				1,317				1,283				1,244				5,220
	(=)	EBITDA margin		(%)			7	%			15	%			9	%			11	%			2	%			9	%
		EBITDA		($)			95				201				125				136				29				491
	(+)	Pension settlement loss		($)			—				—				—				—				30				30
	(+)	Closure and restructuring costs		($)			—				4				8				11				19				42
	(=)	EBITDA before items		($)			95				205				133				147				78				563
	(/)	Sales		($)			1,278				1,376				1,317				1,283				1,244				5,220
	(=)	EBITDA margin before items		(%)			7	%			15	%			10	%			11	%			6	%			11	%
Reconciliation of "Free cash flow" to Cash flows from operating activities
		Cash flows from operating activities		($)			88				55				119				108				160				442
	(-)	Additions to property, plant and equipment		($)			(62	)			(46	)			(55	)			(56	)			(98	)			(255	)
	(=)	Free cash flow		($)			26				9				64				52				62				187
"Net debt-to-total capitalization" computation
		Bank indebtedness		($)			—				3				3				1				9
	(+)	Long-term debt due within one year		($)			1				1				1				1				1
	(+)	Long-term debt		($)			1,102				853				824				938				938
	(=)	Debt		($)			1,103				857				828				940				948
	(-)	Cash and cash equivalents		($)			(152	)			(94	)			(93	)			(98	)			(61	)
	(=)	Net debt		($)			951				763				735				842				887
	(+)	Shareholders' equity		($)			2,181				2,608				2,619				2,439				2,376
	(=)	Total capitalization		($)			3,132				3,371				3,354				3,281				3,263
		Net debt		($)			951				763				735				842				887
	(/)	Total capitalization		($)			3,132				3,371				3,354				3,281				3,263
	(=)	Net debt-to-total capitalization		(%)			30	%			23	%			22	%			26	%			27	%

“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) 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 2020

(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
						Q1'20		Q2'20		Q3'20		Q4'20		YTD		Q1'20		Q2'20		Q3'20		Q4'20		YTD		Q1'20		Q2'20		Q3'20		Q4'20		YTD		Q1'20		Q2'20		Q3'20		Q4'20		YTD
Reconciliation of Operating income (loss) to "Operating income (loss) before items"
		Operating income (loss)		($)		4		—		—		—		4		20		—		—		—		20		(5)		—		—		—		(5)		19		—		—		—		19
	(=)	Operating income (loss) before items		($)		4		—		—		—		4		20		—		—		—		20		(5)		—		—		—		(5)		19		—		—		—		19
Reconciliation of "Operating income (loss) before items" to "EBITDA before items"
		Operating income (loss) before items		($)		4		—		—		—		4		20		—		—		—		20		(5)		—		—		—		(5)		19		—		—		—		19
	(+)	Non-service components of net periodic benefit cost		($)		4		—		—		—		4		—		—		—		—		—		—		—		—		—		—		4		—		—		—		4
	(+)	Depreciation and amortization		($)		58		—		—		—		58		14		—		—		—		14		—		—		—		—		—		72		—		—		—		72
	(=)	EBITDA before items		($)		66		—		—		—		66		34		—		—		—		34		(5)		—		—		—		(5)		95		—		—		—		95
	(/)	Sales		($)		1,031		—		—		—		1,031		266		—		—		—		266		—		—		—		—		—		1,297		—		—		—		1,297
	(=)	EBITDA margin before items		(%)		6%		—		—		—		6%		13%		—		—		—		13%		—		—		—		—		—		7%		—		—		—		7%

“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 2019

(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
						Q1'19		Q2'19		Q3'19		Q4'19		Year		Q1'19		Q2'19		Q3'19		Q4'19		Year		Q1'19		Q2'19		Q3'19		Q4'19		Year		Q1'19		Q2'19		Q3'19		Q4'19		Year
Reconciliation of Operating income (loss) to "Operating income (loss) before items"
		Operating income (loss)		($)		144		62		31		(11)		226		(8)		(18)		2		8		(16)		(21)		(10)		(4)		(12)		(47)		115		34		29		(15)		163
	(+)	Impairment of long-lived assets		($)		—		—		32		—		32		10		15		1		—		26		—		—		—		—		—		10		15		33		—		58
	(+)	Closure and restructuring costs		($)		—		—		5		17		22		4		8		6		2		20		—		—		—		—		—		4		8		11		19		42
	(=)	Operating income (loss) before items		($)		144		62		68		6		280		6		5		9		10		30		(21)		(10)		(4)		(12)		(47)		129		57		73		4		263
Reconciliation of "Operating income (loss) before items" to "EBITDA before items"
		Operating income (loss) before items		($)		144		62		68		6		280		6		5		9		10		30		(21)		(10)		(4)		(12)		(47)		129		57		73		4		263
	(+)	Pension settlement loss		($)		—		—		—		30		30		—		—		—		—		—		—		—		—		—		—		—		—		—		30		30
	(+)	Non-service components of net periodic benefit cost		($)		3		3		2		(28)		(20)		—		—		—		—		—		—		(1)		—		(2)		(3)		3		2		2		(30)		(23)
	(+)	Depreciation and amortization		($)		58		59		57		57		231		15		15		15		17		62		—		—		—		—		—		73		74		72		74		293
	(=)	EBITDA before items		($)		205		124		127		65		521		21		20		24		27		92		(21)		(11)		(4)		(14)		(50)		205		133		147		78		563
	(/)	Sales		($)		1,157		1,106		1,079		1,027		4,369		239		228		219		234		920		—		—		—		—		—		1,396		1,334		1,298		1,261		5,289
	(=)	EBITDA margin before items		(%)		18%		11%		12%		6%		12%		9%		9%		11%		12%		10%		—		—		—		—		—		15%		10%		11%		6%		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.

As a result of changes in our organization structure, we have changed our segment reporting. Starting January 1, 2020, our materials business EAM, a manufacturer of high quality airlaid and ultrathin laminated cores, previously reported under our Personal Care segment is now presented under our Pulp and Paper segment. Prior period segment results have been restated to the new segment presentation with no significant impact on segment results. There were no changes to our consolidated sales or operating income.

Domtar Corporation Supplemental Segmented Information (In millions of dollars, unless otherwise noted)
				2020				2019
				Q1				Q1				Q2				Q3				Q4				Year
Pulp and Paper Segment
Sales		($)			1,031				1,157				1,106				1,079				1,027				4,369
Operating income (loss)		($)			4				144				62				31				(11	)			226
Depreciation and amortization		($)			58				58				59				57				57				231
Impairment of long-lived assets		($)			—				—				—				32				—				32
Paper
Paper Production		('000 ST)			648				757				697				653				619				2,726
Paper Shipments - Manufactured		('000 ST)			679				736				681				672				656				2,745
Communication Papers		('000 ST)			569				615				567				563				554				2,299
Specialty and Packaging Papers		('000 ST)			110				121				114				109				102				446
Paper Shipments - Sourced from 3rd parties		('000 ST)			22				23				21				25				24				93
Paper Shipments - Total		('000 ST)			701				759				702				697				680				2,838
Pulp
Pulp Shipments(a)		('000 ADMT)			389				349				370				416				404				1,539
Pulp Shipments mix(b):
Hardwood Kraft Pulp		(%)			3	%			2	%			2	%			5	%			5	%			4	%
Softwood Kraft Pulp		(%)			52	%			53	%			56	%			55	%			54	%			54	%
Fluff Pulp		(%)			45	%			45	%			42	%			40	%			41	%			42	%
Personal Care Segment
Sales		($)			266				239				228				219				234				920
Operating income (loss)		($)			20				(8	)			(18	)			2				8				(16	)
Depreciation and amortization		($)			14				15				15				15				17				62
Impairment of long-lived assets		($)			—				10				15				1				—				26
Average Exchange Rates		$US / $CAN			1.344				1.329				1.337				1.321				1.321				1.327
		$CAN / $US			0.744				0.752				0.748				0.757				0.757				0.754
		€ / $US			1.102				1.136				1.124				1.111				1.107				1.120

As a result of changes in our organization structure, we have changed our segment reporting. Starting January 1, 2020, our materials business EAM, a manufacturer of high quality airlaid and ultrathin laminated cores, previously reported under our Personal Care segment is now presented under our Pulp and Paper segment. Prior period segment results have been restated to the new segment presentation with no significant impact on segment results. There were no changes to our consolidated sales or operating income.

(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.

 

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