ufs-ex991

DOMTAR CORPORATION REPORTS PRELIMINARY FOURTH QUARTER AND FISCAL YEAR 2018 FINANCIAL RESULTS

(All financial information is in U.S. dollars, and all earnings per share results are diluted, unless otherwise noted).

Fort Mill, SC, February 5, 2019 – Domtar Corporation (NYSE: UFS) (TSX: UFS) today reported net earnings of $87 million ($1.38 per share) for the fourth quarter of 2018 compared to net earnings of $99 million ($1.57 per share) for the third quarter of 2018 and a net loss of $386 million ($6.16 per share) for the fourth quarter of 2017. Sales for the fourth quarter of 2018 were $1.4 billion.

Excluding items listed below, the Company had earnings before items¹ of $103 million ($1.63 per share) for the fourth quarter of 2018 compared to earnings before items¹ of $92 million ($1.46 per share) for the third quarter of 2018 and earnings before items¹ of $40 million ($0.64 per share) for the fourth quarter of 2017.

For fiscal year 2018, net earnings amounted to $283 million ($4.48 per share) compared to a net loss of $258 million ($4.11 per share) for fiscal year 2017. The Company had earnings before items¹ of $291 million ($4.61 per share) for fiscal year 2018 compared to earnings before items¹ of $163 million ($2.60 per share) for fiscal year 2017. Sales amounted to $5.5 billion for fiscal year 2018.

Commenting on the full-year results, John D. Williams, President and Chief Executive Officer said, “We had a strong finish to a great year where we significantly improved EBITDA and cash flow. Our solid performance enabled us to return cash to shareholders, manage our balance sheet to preserve financial flexibility and better position Domtar for sustainable, long-term growth”.

“The fourth quarter was one of our best in several years,” said John D. Williams, President and Chief Executive Officer. “Our results reflect a strong performance in Pulp and Paper as we benefited from solid business fundamentals, accelerating price realizations and improved productivity. I’m especially pleased with our cost performance in the quarter despite fiber availability issues at several of our facilities.”

Commenting on Personal Care, Mr. Williams added, “Results improved from the third quarter led by seasonally stronger sales in Europe while new customer volume began to ramp up in North America. Higher volume and cost improvements also drove operational efficiencies and resulted in lower overall unit cost. Although markets remain challenged with raw material cost inflation, we do see some of the underlying fundamentals beginning to improve.”

Operating income was $133 million in the fourth quarter of 2018 compared to operating income of $114 million in the third quarter of 2018. Depreciation and amortization totaled $75 million in the fourth quarter of 2018.

Operating income before items¹ was $148 million in the fourth quarter of 2018 compared to an operating income before items¹ of $114 million in the third quarter of 2018.

The increase in operating income in the fourth quarter of 2018 was the result of lower maintenance costs, lower selling, general and administrative expenses, higher average selling prices for pulp and paper, lower fixed costs and favorable productivity. These factors were partially offset by higher raw material costs.

When compared to the third quarter of 2018, manufactured paper shipments were down 1% and pulp shipments increased 1%. The shipments-to-production ratio for paper was 95% in the fourth quarter of 2018, compared to 98% in the third quarter of 2018. Paper inventories increased by 34,000 tons, and pulp inventories decreased by 7,000 metric tons when compared to the third quarter of 2018.

Cash flow from operating activities amounted to $217 million and capital expenditures were $84 million, resulting in free cash flow¹ of $133 million for the fourth quarter of 2018. Domtar’s net debt-to-total capitalization ratio¹ stood at 23% at December 31, 2018 compared to 25% at September 30, 2018.

In 2018, cash flow from operating activities amounted to $554 million and capital expenditures were $195 million, resulting in free cash flow¹ of $359 million.

In 2019, our paper shipments will increase as we respond to increased demand from our customers following the announced capacity closures while paper prices will continue to improve in the wake of the recently announced price increases across the majority of our paper grades. Softwood and fluff pulp markets will remain balanced through the year due to continued steady demand growth and limited announced new capacity. We anticipate costs, including freight, labor and raw materials, to marginally increase. Personal Care is expected to benefit from our margin improvement plan and new customer wins, partially offset by further raw material cost inflation.

The Company will hold a conference call today at 11:00 a.m. (ET) to discuss its fourth quarter and fiscal year 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 first quarter 2019 earnings results on May 1, 2019 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.

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 $5.5 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.

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.

	Three months ended			Three months ended			Twelve months ended			Twelve months ended
	December 31,			December 31,			December 31,			December 31,
	2018			2017			2018			2017
	(Unaudited)
	$			$			$			$
Selected Segment Information
Sales ⁽¹⁾
Pulp and Paper		1,154			1,090			4,523			4,216
Personal Care		254			260			1,000			996
Total for reportable segments		1,408			1,350			5,523			5,212
Intersegment sales		(18	)		(15	)		(68	)		(64	)
Consolidated sales		1,390			1,335			5,455			5,148
Depreciation and amortization
Pulp and Paper		58			64			238			254
Personal Care		17			18			70			67
Total for reportable segments		75			82			308			321
Impairment of property plant and equipment and goodwill - Personal Care		7			578			7			578
Consolidated depreciation and amortization and impairment of property, plant and equipment and goodwill		82			660			315			899
Operating income (loss)⁽²⁾
Pulp and Paper		148			56			438			237
Personal Care		(12	)		(564	)		(5	)		(527	)
Corporate		(3	)		(5	)		(47	)		(38	)
Consolidated operating income (loss)		133			(513	)		386			(328	)
Interest expense, net		15			16			62			66
Non-service components of net periodic benefit cost		(5	)		(1	)		(18	)		(11	)
Earnings (loss) before income taxes and equity loss		123			(528	)		342			(383	)
Income tax expense (benefit)		35			(142	)		57			(125	)
Equity loss, net of taxes		1			—			2			—
Net earnings (loss)		87			(386	)		283			(258	)
Per common share (in dollars)
Net earnings (loss)
Basic		1.38			(6.16	)		4.50			(4.11	)
Diluted		1.38			(6.16	)		4.48			(4.11	)
Weighted average number of common shares outstanding (millions)
Basic		62.9			62.7			62.9			62.7
Diluted		63.0			62.7			63.1			62.7
Cash flows from operating activities		217			125			554			449
Additions to property, plant and equipment		84			71			195			182

	Three months ended			Three months ended			Twelve months ended			Twelve months ended
	December 31,			December 31,			December 31,			December 31,
	2018			2017			2018			2017
	(Unaudited)
	$			$			$			$

Sales		1,390			1,335			5,455			5,148
Operating expenses
Cost of sales, excluding depreciation and amortization		1,064			1,079			4,303			4,145
Depreciation and amortization		75			82			308			321
Selling, general and administrative		100			115			443			444
Impairment of property, plant and equipment and goodwill		7			578			7			578
Closure and restructuring costs		8			2			8			2
Other operating loss (income), net		3			(8	)		—			(14	)
		1,257			1,848			5,069			5,476
Operating income (loss)		133			(513	)		386			(328	)
Interest expense, net		15			16			62			66
Non-service components of net periodic benefit cost		(5	)		(1	)		(18	)		(11	)
Earnings (loss) before income taxes and equity loss		123			(528	)		342			(383	)
Income tax expense (benefit)		35			(142	)		57			(125	)
Equity loss, net of taxes		1			—			2			—
Net earnings (loss)		87			(386	)		283			(258	)
Per common share (in dollars)
Net earnings (loss)
Basic		1.38			(6.16	)		4.50			(4.11	)
Diluted		1.38			(6.16	)		4.48			(4.11	)
Weighted average number of common shares outstanding (millions)
Basic		62.9			62.7			62.9			62.7
Diluted		63.0			62.7			63.1			62.7


	December 31,			December 31,
	2018			2017
	(Unaudited)
	$			$
Assets
Current assets
Cash and cash equivalents		111			139
Receivables, less allowances of $6 and $7		670			704
Inventories		762			757
Prepaid expenses		24			33
Income and other taxes receivable		22			24
Total current assets		1,589			1,657
Property, plant and equipment, net		2,605			2,765
Intangible assets, net		597			633
Other assets		134			157
Total assets		4,925			5,212
Liabilities and shareholders' equity
Current liabilities
Trade and other payables		757			716
Income and other taxes payable		25			24
Long-term debt due within one year		1			1
Total current liabilities		783			741
Long-term debt		853			1,129
Deferred income taxes and other		476			491
Other liabilities and deferred credits		275			368
Shareholders' equity
Common stock		1			1
Additional paid-in capital		1,981			1,969
Retained earnings		1,023			849
Accumulated other comprehensive loss		(467	)		(336	)
Total shareholders' equity		2,538			2,483
Total liabilities and shareholders' equity		4,925			5,212

	For the twelve months ended
	December 31, 2018			December 31, 2017
	(Unaudited)
	$			$
Operating activities
Net earnings (loss)		283			(258	)
Adjustments to reconcile net earnings (loss) to cash flows from operating activities
Depreciation and amortization		308			321
Deferred income taxes and tax uncertainties		13			(207	)
Impairment of property, plant and equipment and goodwill		7			578
Net gains on disposals of property, plant and equipment		(4	)		(13	)
Stock-based compensation expense		8			6
Equity loss, net		2			—
Other		(1	)		2
Changes in assets and liabilities
Receivables		18			(72	)
Inventories		(24	)		21
Prepaid expenses		2			5
Trade and other payables		24			35
Income and other taxes		(32	)		12
Difference between employer pension and other post-retirement contributions and pension and other post-retirement expense		(46	)		(32	)
Other assets and other liabilities		(4	)		51
Cash flows from operating activities		554			449
Investing activities
Additions to property, plant and equipment		(195	)		(182	)
Proceeds from disposals of property, plant and equipment		5			19
Acquisition of business, net of cash acquired		—			(8	)
Other		(6	)		—
Cash flows used for investing activities		(196	)		(171	)
Financing activities
Dividend payments		(108	)		(104	)
Net change in bank indebtedness		—			(12	)
Change in revolving credit facility		—			(50	)
Proceeds from receivables securitization facility		85			45
Repayments of receivables securitization facility		(60	)		(90	)
Repayments of long-term debt		(301	)		(64	)
Other		2			1
Cash flows used for financing activities		(382	)		(274	)
Net (decrease) increase in cash and cash equivalents		(24	)		4
Impact of foreign exchange on cash		(4	)		10
Cash and cash equivalents at beginning of year		139			125
Cash and cash equivalents at end of year		111			139
Supplemental cash flow information
Net cash payments for:
Interest		57			58
Income taxes		71			33

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			Q3			Q4			Year			Q1			Q2			Q3			Q4			Year
Reconciliation of "Earnings before items" to Net earnings (loss)
		Net earnings (loss)	($)		54			43			99			87			283			20			38			70			(386	)		(258	)
	(+)	Impairment of property, plant and equipment and goodwill	($)		—			—			—			5			5			—			—			—			573			573
	(+)	Closure and restructuring costs	($)		—			—			—			6			6			—			—			—			1			1
	(+)	Litigation settlement	($)		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	($)		—			—			(7	)		5			(2	)		—			—			—			(140	)		(140	)
	(=)	Earnings before items	($)		55			41			92			103			291			20			38			65			40			163
	(/)	Weighted avg. number of common shares outstanding (diluted)	(millions)		62.9			63.2			63.2			63.0			63.1			62.8			62.7			62.9			62.7			62.7
	(=)	Earnings before items per diluted share	($)		0.87			0.65			1.46			1.63			4.61			0.32			0.61			1.03			0.64			2.60

Reconciliation of "EBITDA" and "EBITDA before items" to Net earnings (loss)
		Net earnings (loss)	($)		54			43			99			87			283			20			38			70			(386	)		(258	)
	(+)	Equity loss, net of taxes	($)		—			—			1			1			2			—			—			—			—			—
	(+)	Income tax expense (benefit)	($)		11			8			3			35			57			5			9			3			(142	)		(125	)
	(+)	Interest expense, net	($)		16			16			15			15			62			17			17			16			16			66
	(+)	Depreciation and amortization	($)		79			79			75			75			308			80			79			80			82			321
	(+)	Impairment of property, plant and equipment and goodwill	($)		—			—			—			7			7			—			—			—			578			578
	(-)	Net gains on disposals of property, plant and equipment	($)		(1	)		(3	)		—			—			(4	)		—			—			(4	)		(9	)		(13	)
	(=)	EBITDA	($)		159			143			193			220			715			122			143			165			139			569
	(/)	Sales	($)		1,345			1,353			1,367			1,390			5,455			1,302			1,221			1,290			1,335			5,148
	(=)	EBITDA margin	(%)		12	%		11	%		14	%		16	%		13	%		9	%		12	%		13	%		10	%		11	%
		EBITDA	($)		159			143			193			220			715			122			143			165			139			569
	(+)	Closure and restructuring costs	($)		—			—			—			8			8			—			—			—			2			2
	(+)	Litigation settlement	($)		2			—			—			—			2			—			—			—			—			—
	(-)	Reversal of contingent consideration	($)		—			—			—			—			—			—			—			(2	)		—			(2	)
	(=)	EBITDA before items	($)		161			143			193			228			725			122			143			163			141			569
	(/)	Sales	($)		1,345			1,353			1,367			1,390			5,455			1,302			1,221			1,290			1,335			5,148
	(=)	EBITDA margin before items	(%)		12	%		11	%		14	%		16	%		13	%		9	%		12	%		13	%		11	%		11	%

				2018															2017
				Q1			Q2			Q3			Q4			Year			Q1			Q2			Q3			Q4			Year
Reconciliation of "Free cash flow" to Cash flows from operating activities
		Cash flows from operating activities	($)		90			177			70			217			554			91			121			112			125			449
	(-)	Additions to property, plant and equipment	($)		(25	)		(37	)		(49	)		(84	)		(195	)		(34	)		(37	)		(40	)		(71	)		(182	)
	(=)	Free cash flow	($)		65			140			21			133			359			57			84			72			54			267

"Net debt-to-total capitalization" computation
		Bank indebtedness	($)		—			1			—			—						2			—			—			—
	(+)	Long-term debt due within one year	($)		1			1			1			1						64			1			1			1
	(+)	Long-term debt	($)		1,103			1,103			1,103			853						1,188			1,203			1,164			1,129
	(=)	Debt	($)		1,104			1,105			1,104			854						1,254			1,204			1,165			1,130
	(-)	Cash and cash equivalents	($)		(152	)		(264	)		(256	)		(111	)					(111	)		(124	)		(143	)		(139	)
	(=)	Net debt	($)		952			841			848			743						1,143			1,080			1,022			991
	(+)	Shareholders' equity	($)		2,493			2,458			2,553			2,538						2,685			2,770			2,886			2,483
	(=)	Total capitalization	($)		3,445			3,299			3,401			3,281						3,828			3,850			3,908			3,474
		Net debt	($)		952			841			848			743						1,143			1,080			1,022			991
	(/)	Total capitalization	($)		3,445			3,299			3,401			3,281						3,828			3,850			3,908			3,474
	(=)	Net debt-to-total capitalization	(%)		28	%		25	%		25	%		23	%					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.

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	Year	Q1'18	Q2'18	Q3'18	Q4'18	Year	Q1'18	Q2'18	Q3'18	Q4'18	Year	Q1'18	Q2'18	Q3'18	Q4'18	Year
Reconciliation of Operating income (loss) to "Operating income (loss) before items"
		Operating income (loss)	($)	76	79	135	148	438	8	2	(3)	(12)	(5)	(7)	(19)	(18)	(3)	(47)	77	62	114	133	386
	(+)	Impairment of property, plant and equipment	($)	—	—	—	—	—	—	—	—	7	7	—	—	—	—	—	—	—	—	7	7
	(-)	Net gains on disposals of property, plant and equipment	($)	(1)	(3)	—	—	(4)	—	—	—	—	—	—	—	—	—	—	(1)	(3)	—	—	(4)
	(+)	Closure and restructuring costs	($)	—	—	—	—	—	—	—	—	8	8	—	—	—	—	—	—	—	—	8	8
	(+)	Litigation settlement	($)	—	—	—	—	—	—	—	—	—	—	2	—	—	—	2	2	—	—	—	2
	(=)	Operating income (loss) before items	($)	75	76	135	148	434	8	2	(3)	3	10	(5)	(19)	(18)	(3)	(45)	78	59	114	148	399

Reconciliation of "Operating income (loss) before items" to "EBITDA before items"
		Operating income (loss) before items	($)	75	76	135	148	434	8	2	(3)	3	10	(5)	(19)	(18)	(3)	(45)	78	59	114	148	399
	(+)	Non-service components of net periodic benefit cost	($)	4	6	4	5	19	—	—	—	—	—	—	(1)	—	—	(1)	4	5	4	5	18
	(+)	Depreciation and amortization	($)	61	61	58	58	238	18	18	17	17	70	—	—	—	—	—	79	79	75	75	308
	(=)	EBITDA before items	($)	140	143	197	211	691	26	20	14	20	80	(5)	(20)	(18)	(3)	(46)	161	143	193	228	725
	(/)	Sales	($)	1,100	1,123	1,146	1,154	4,523	262	247	237	254	1,000	—	—	—	—	—	1,362	1,370	1,383	1,408	5,523
	(=)	EBITDA margin before items	(%)	13%	13%	17%	18%	15%	10%	8%	6%	8%	8%	—	—	—	—	—	12%	10%	14%	16%	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.

				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%

		2018															2017
		Q1			Q2			Q3			Q4			Year			Q1			Q2			Q3			Q4			Year
Pulp and Paper Segment
Sales	($)		1,100			1,123			1,146			1,154			4,523			1,073			999			1,054			1,090			4,216
Operating income	($)		76			79			135			148			438			30			62			89			56			237
Depreciation and amortization	($)		61			61			58			58			238			64			63			63			64			254
Paper
Paper Production	('000 ST)		739			739			743			757			2,978			709			715			745			724			2,893
Paper Shipments - Manufactured	('000 ST)		769			754			727			721			2,971			745			698			722			726			2,891
Communication Papers	('000 ST)		640			615			596			595			2,446			622			582			597			600			2,401
Specialty and Packaging Papers	('000 ST)		129			139			131			126			525			123			116			125			126			490
Paper Shipments - Sourced from 3rd parties	('000 ST)		28			26			30			25			109			29			26			29			25			109
Paper Shipments - Total	('000 ST)		797			780			757			746			3,080			774			724			751			751			3,000
Pulp
Pulp Shipments^(a)	('000 ADMT)		374			377			390			395			1,536			453			383			424			462			1,722
Pulp Shipments mix^(b):
Hardwood Kraft Pulp	(%)		4	%		3	%		3	%		3	%		4	%		4	%		3	%		7	%		5	%		5	%
Softwood Kraft Pulp	(%)		58	%		56	%		56	%		55	%		56	%		67	%		62	%		61	%		54	%		61	%
Fluff Pulp	(%)		38	%		41	%		41	%		42	%		40	%		29	%		35	%		32	%		41	%		34	%

Personal Care Segment
Sales	($)		262			247			237			254			1,000			247			238			251			260			996
Operating income (loss)	($)		8			2			(3	)		(12	)		(5	)		16			13			8			(564	)		(527	)
Depreciation and amortization	($)		18			18			17			17			70			16			16			17			18			67
Impairment of property, plant and equipment and goodwill	($)		—			—			—			7			7			—			—			—			578			578

Average Exchange Rates	$US / $CAN		1.264			1.290			1.307			1.321			1.296			1.323			1.344			1.253			1.272			1.297
	$CAN / $US		0.791			0.775			0.765			0.757			0.772			0.756			0.744			0.798			0.786			0.771
	€ / $US		1.229			1.192			1.163			1.141			1.181			1.066			1.100			1.175			1.178			1.130

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

Description	Segment	Line item	Amount	After tax effect	EPS impact (per share)
			(in millions)
Fourth quarter 2018

● Margin improvement plan	Personal Care	Impairment of property, plant and equipment	$7	$5	$0.08

● Margin improvement plan	Personal Care	Closure and restructuring costs	$8	$6	$0.09

● U.S. Tax Reform	Corporate	Income tax expense	$5	$5	$0.08

Third quarter 2018

● U.S. Tax Reform	Corporate	Income tax benefit	$7	$7	$0.11

Description	Segment	Line item	Amount	After tax effect	EPS impact (per share)
			(in millions)
Fourth quarter 2017

● Non-cash goodwill impairment charge	Personal Care	Impairment of goodwill	$578	$573	$9.14

● Closure and restructuring costs	Personal Care	Closure and restructuring costs	$2	$1	$0.02

● U.S. Tax Reform	Corporate	Income tax benefit	$140	$140	$2.23

● Net gain on disposal of property, plant & equipment	Corporate	Other operating income	$9	$8	$0.13


(In millions of dollars)	4Q 2018			3Q 2018

Sales	$	1,390		$	1,367
Operating income (loss)
Pulp and Paper segment		148			135
Personal Care segment		(12	)		(3	)
Corporate		(3	)		(18	)
Total operating income		133			114
Operating income before items¹		148			114
Depreciation and amortization		75			75