Domtar Corporation Reports Preliminary Third Quarter 2020 Financial Results

Tuesday, November 10th, 2020

Domtar Corporation (NYSE: UFS) (TSX: UFS) today reported a net loss of $92 million ($1.67 per share) for the third quarter of 2020 compared to net earnings of $19 million ($0.34 per share) for the second quarter of 2020 and net earnings of $20 million ($0.32 per share) for the third quarter of 2019. Sales for the third quarter of 2020 were $1.1 billion.

“We performed very well in the quarter in a challenging operating environment. Our teams have demonstrated tremendous resiliency, continuously adapting to changing market conditions, maintaining a keen focus on health and safety and decisively taking actions to serve our customers in the face of unprecedented conditions”

Tweet this

Excluding items listed below, the Company had earnings before items1 of $18 million ($0.33 per share) for the third quarter of 2020 compared to earnings before items1 of $20 million ($0.36 per share) for the second quarter of 2020 and earnings before items1 of $55 million ($0.89 per share) for the third quarter of 2019.

ITEMS

 

 

 

 

 

 

 

 

 

 

Description

 

Segment

 

Line item

 

Amount

 

After tax
effect

 

EPS impact
(per share)

 

 

 

 

 

 

(in millions)

 

 

Third quarter 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • Cost reduction program
 

Pulp and Paper

 

Impairment of long-lived
assets

 

$111

 

$68

 

$1.23

 

 

 

 

 

 

 

 

 

 

 

  • Cost reduction program
 

Pulp and Paper

 

Closure and
restructuring costs

 

$67

 

$41

 

$0.75

 

 

 

 

 

 

 

 

 

 

 

  • Closure and restructuring costs
 

Corporate

 

Closure and
restructuring costs

 

$1

 

$1

 

$0.02

 

 

 

 

 

 

 

 

 

 

 

Second quarter 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • Closure and restructuring costs
 

Pulp and Paper

 

Closure and
restructuring costs

 

$1

 

$1

 

$0.02

 

 

 

 

 

 

 

 

 

 

 

Third quarter 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • Paper machine closures
 

Pulp and Paper

 

Impairment of long-lived
assets

 

$32

 

$25

 

$0.40

 

 

 

 

 

 

 

 

 

 

 

  • Paper machine closures
 

Pulp and Paper

 

Closure and
restructuring costs

 

$5

 

$4

 

$0.07

 

 

 

 

 

 

 

 

 

 

 

  • Margin improvement plan
 

Personal Care

 

Impairment of long-lived
assets

 

$1

 

$1

 

$0.02

 

 

 

 

 

 

 

 

 

 

 

  • Margin improvement plan
 

Personal Care

 

Closure and
restructuring costs

 

$6

 

$5

 

$0.08

QUARTERLY REVIEW

“We performed very well in the quarter in a challenging operating environment. Our teams have demonstrated tremendous resiliency, continuously adapting to changing market conditions, maintaining a keen focus on health and safety and decisively taking actions to serve our customers in the face of unprecedented conditions,” said John D. Williams, President and Chief Executive Officer. “We benefited from further market recovery and we made good progress with some of our strategic initiatives.”

“Our results in Paper significantly improved in the third quarter reflecting a strong operational performance and our team's fast response in implementing cost savings in a better paper demand environment. In Pulp, prices remain at cyclically low levels but the supply and demand balance is improving.”

“The Kingsport conversion to recycled linerboard is going according to plan. All efforts are now being put into enabling a start-up by the end of 2022. We have signed an agreement with Voith to provide equipment and technical services to help build one of the most modern recycled containerboard machines in the world. We expect to receive our first equipment deliveries in the next few months with construction set to begin in the second quarter of 2021. We are also focusing on implementing our commercial strategy while building our various teams that will help lead the business.”

Mr. Williams added, “In Personal Care, we had a strong cost performance in the quarter. We continue to execute well against our objectives, both commercially and operationally, which has contributed to our strong year-to-date performance."

Operating loss was $136 million in the third quarter of 2020 compared to operating income of $14 million in the second quarter of 2020. Depreciation and amortization totaled $71 million in the third quarter of 2020.

Operating income before items1 was $43 million in the third quarter of 2020 compared to operating income before items1 of $15 million in the second quarter of 2020.

 

 

 

 

 

 

 

 

 

(In millions of dollars)

 

3Q 2020

 

 

2Q 2020

 

 

 

 

 

 

 

 

 

 

Sales

 

$

1,124

 

 

$

1,012

 

Operating (loss) income

 

 

 

 

 

 

 

 

Pulp and Paper segment

 

 

(140

)

 

 

3

 

Personal Care segment

 

 

16

 

 

 

18

 

Corporate

 

 

(12

)

 

 

(7

)

Total operating (loss) income

 

 

(136

)

 

 

14

 

Operating income before items1

 

 

43

 

 

 

15

 

Depreciation and amortization

 

 

71

 

 

 

71

 

The net operating loss in the third quarter of 2020 was the result of the long-lived assets impairment and closure and restructuring charges related to the cost savings program, lower wage subsidies, higher maintenance costs, higher selling, general and administrative expenses and higher freight costs. These factors were partially offset by favorable productivity, higher volume in paper, lower raw material costs, higher average selling prices for paper and favorable exchange rates.

When compared to the second quarter of 2020, manufactured paper shipments were up 20% and pulp shipments decreased 7%. The shipment-to-production ratio for paper was 105% in the third and second quarters of 2020. Paper inventories decreased by 20,000 tons, and pulp inventories increased by 38,000 metric tons when compared to the second quarter of 2020.

LIQUIDITY AND CAPITAL RESOURCES

Cash flow from operating activities amounted to $121 million and capital expenditures were $28 million, resulting in free cash flow1 of $93 million for the third quarter of 2020. Domtar’s net debt-to-total capitalization ratio1stood at 28% at September 30, 2020 compared to 30% at June 30, 2020.

OUTLOOK

In the fourth quarter, paper volume is expected to be flat quarter-over-quarter while mix should be unfavorable due to the usual seasonality. We expect near-term pulp markets to continue to gradually improve driven by better demand, maintenance outages and restocking in China. We expect Personal Care to continue to benefit from higher usage and the impact from new customer wins. Overall raw material costs are expected to remain stable while planned maintenance costs will be lower.

EARNINGS CONFERENCE CALL

The Company will hold a conference call today at 10:00 a.m. (ET) to discuss its third quarter 2020 financial results. Financial analysts are invited to participate in the call by dialing 1 (800) 367-2403 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 fourth quarter 2020 earnings results on February 11, 2021 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 8,900 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.

-(30)-

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, the failure to achieve our cost containment goals, costs of conversion in excess of our expectations, demand for linerboard, 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.

Domtar Corporation

Highlights

(In millions of dollars, unless otherwise noted)

           
             

 

 

For the three months ended

 

 

For the nine months ended

 

 

 

September 30,
2020

 

 

September 30,
2019

 

 

September 30,
2020

 

 

September 30,
2019

 

 

 

(Unaudited)

 

 

 

$

 

 

$

 

 

$

 

 

$

 

Selected Segment Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pulp and Paper

 

 

899

 

 

 

1,079

 

 

 

2,732

 

 

 

3,342

 

Personal Care

 

 

243

 

 

 

219

 

 

 

738

 

 

 

686

 

Total for reportable segments

 

 

1,142

 

 

 

1,298

 

 

 

3,470

 

 

 

4,028

 

Intersegment sales

 

 

(18

)

 

 

(15

)

 

 

(56

)

 

 

(52

)

Consolidated sales

 

 

1,124

 

 

 

1,283

 

 

 

3,414

 

 

 

3,976

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pulp and Paper

 

 

56

 

 

 

57

 

 

 

170

 

 

 

174

 

Personal Care

 

 

15

 

 

 

15

 

 

 

44

 

 

 

45

 

Total for reportable segments

 

 

71

 

 

 

72

 

 

 

214

 

 

 

219

 

Impairment of long-lived assets - Pulp and Paper

 

 

111

 

 

 

32

 

 

 

111

 

 

 

32

 

Impairment of long-lived assets - Personal Care

 

 

 

 

 

1

 

 

 

 

 

 

26

 

Consolidated depreciation and amortization and impairment of long-lived assets

 

 

182

 

 

 

105

 

 

 

325

 

 

 

277

 

Operating (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pulp and Paper

 

 

(140

)

 

 

31

 

 

 

(133

)

 

 

237

 

Personal Care

 

 

16

 

 

 

2

 

 

 

54

 

 

 

(24

)

Corporate

 

 

(12

)

 

 

(4

)

 

 

(24

)

 

 

(35

)

Consolidated operating (loss) income

 

 

(136

)

 

 

29

 

 

 

(103

)

 

 

178

 

Interest expense, net

 

 

14

 

 

 

12

 

 

 

43

 

 

 

38

 

Non-service components of net periodic benefit cost

 

 

(4

)

 

 

(2

)

 

 

(13

)

 

 

(7

)

(Loss) earnings before income taxes and equity loss

 

 

(146

)

 

 

19

 

 

 

(133

)

 

 

147

 

Income tax (benefit) expense

 

 

(55

)

 

 

(1

)

 

 

(67

)

 

 

28

 

Equity loss, net of taxes

 

 

1

 

 

 

 

 

 

2

 

 

 

1

 

Net (loss) earnings

 

 

(92

)

 

 

20

 

 

 

(68

)

 

 

118

 

Per common share (in dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

(1.67

)

 

 

0.33

 

 

 

(1.23

)

 

 

1.89

 

Diluted

 

 

(1.67

)

 

 

0.32

 

 

 

(1.23

)

 

 

1.88

 

Weighted average number of common shares outstanding (millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

55.2

 

 

 

61.5

 

 

 

55.5

 

 

 

62.5

 

Diluted

 

 

55.2

 

 

 

61.7

 

 

 

55.5

 

 

 

62.7

 

Cash flows from operating activities

 

 

121

 

 

 

108

 

 

 

276

 

 

 

282

 

Additions to property, plant and equipment

 

 

28

 

 

 

56

 

 

 

130

 

 

 

157

 

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 (Loss)

(In millions of dollars, unless otherwise noted)

           
             

 

 

For the three months ended

 

 

For the nine months ended

 

 

 

September 30,
2020

 

 

September 30,
2019

 

 

September 30,
2020

 

 

September 30,
2019

 

 

 

(Unaudited)

 

 

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

 

1,124

 

 

 

1,283

 

 

 

3,414

 

 

 

3,976

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales, excluding depreciation and amortization

 

 

911

 

 

 

1,041

 

 

 

2,831

 

 

 

3,172

 

Depreciation and amortization

 

 

71

 

 

 

72

 

 

 

214

 

 

 

219

 

Selling, general and administrative

 

 

99

 

 

 

94

 

 

 

294

 

 

 

322

 

Impairment of long-lived assets

 

 

111

 

 

 

33

 

 

 

111

 

 

 

58

 

Closure and restructuring costs

 

 

68

 

 

 

11

 

 

 

69

 

 

 

23

 

Other operating loss (income), net

 

 

 

 

 

3

 

 

 

(2

)

 

 

4

 

 

 

 

1,260

 

 

 

1,254

 

 

 

3,517

 

 

 

3,798

 

Operating (loss) income

 

 

(136

)

 

 

29

 

 

 

(103

)

 

 

178

 

Interest expense, net

 

 

14

 

 

 

12

 

 

 

43

 

 

 

38

 

Non-service components of net periodic benefit cost

 

 

(4

)

 

 

(2

)

 

 

(13

)

 

 

(7

)

(Loss) earnings before income taxes and equity loss

 

 

(146

)

 

 

19

 

 

 

(133

)

 

 

147

 

Income tax (benefit) expense

 

 

(55

)

 

 

(1

)

 

 

(67

)

 

 

28

 

Equity loss, net of taxes

 

 

1

 

 

 

 

 

 

2

 

 

 

1

 

Net (loss) earnings

 

 

(92

)

 

 

20

 

 

 

(68

)

 

 

118

 

Per common share (in dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

(1.67

)

 

 

0.33

 

 

 

(1.23

)

 

 

1.89

 

Diluted

 

 

(1.67

)

 

 

0.32

 

 

 

(1.23

)

 

 

1.88

 

Weighted average number of common shares outstanding (millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

55.2

 

 

 

61.5

 

 

 

55.5

 

 

 

62.5

 

Diluted

 

 

55.2

 

 

 

61.7

 

 

 

55.5

 

 

 

62.7

 

Domtar Corporation

Consolidated Balance Sheets at

(In millions of dollars)

     

 

 

 

 

 

 

September 30,
2020

 

 

December 31,
2019

 

 

 

(Unaudited)

 

 

 

$

 

 

$

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

218

 

 

 

61

 

Receivables, less allowances of $11 and $6

 

 

543

 

 

 

577

 

Inventories

 

 

764

 

 

 

786

 

Prepaid expenses

 

 

36

 

 

 

33

 

Income and other taxes receivable

 

 

44

 

 

 

61

 

Total current assets

 

 

1,605

 

 

 

1,518

 

Property, plant and equipment, net

 

 

2,378

 

 

 

2,567

 

Operating lease right-of-use assets

 

 

72

 

 

 

81

 

Intangible assets, net

 

 

573

 

 

 

573

 

Other assets

 

 

163

 

 

 

164

 

Total assets

 

 

4,791

 

 

 

4,903

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Bank indebtedness

 

 

 

 

 

9

 

Trade and other payables

 

 

626

 

 

 

705

 

Income and other taxes payable

 

 

37

 

 

 

23

 

Operating lease liabilities due within one year

 

 

27

 

 

 

28

 

Long-term debt due within one year

 

 

13

 

 

 

1

 

Total current liabilities

 

 

703

 

 

 

766

 

Long-term debt

 

 

1,086

 

 

 

938

 

Operating lease liabilities

 

 

58

 

 

 

69

 

Deferred income taxes and other

 

 

413

 

 

 

479

 

Other liabilities and deferred credits

 

 

320

 

 

 

275

 

Shareholders' equity

 

 

 

 

 

 

 

 

Common stock

 

 

1

 

 

 

1

 

Additional paid-in capital

 

 

1,714

 

 

 

1,770

 

Retained earnings

 

 

905

 

 

 

998

 

Accumulated other comprehensive loss

 

 

(409

)

 

 

(393

)

Total shareholders' equity

 

 

2,211

 

 

 

2,376

 

Total liabilities and shareholders' equity

 

 

4,791

 

 

 

4,903

 

Domtar Corporation

Consolidated Statements of Cash Flows

(In millions of dollars)

           
             

 

 

For the three months ended

 

 

For the nine months ended

 

 

 

September 30,
2020

 

 

September 30,
2019

 

 

September 30,
2020

 

 

September 30,
2019

 

 

 

(Unaudited)

 

 

 

$

 

 

$

 

 

$

 

 

$

 

Operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) earnings

 

 

(92

)

 

 

20

 

 

 

(68

)

 

 

118

 

Adjustments to reconcile net (loss) earnings to cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

71

 

 

 

72

 

 

 

214

 

 

 

219

 

Deferred income taxes and tax uncertainties

 

 

(48

)

 

 

2

 

 

 

(60

)

 

 

1

 

Impairment of long-lived assets

 

 

111

 

 

 

33

 

 

 

111

 

 

 

58

 

Stock-based compensation expense

 

 

2

 

 

 

2

 

 

 

5

 

 

 

7

 

Equity loss, net

 

 

1

 

 

 

 

 

 

2

 

 

 

1

 

Changes in assets and liabilities, excluding the effect of acquisition of business

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receivables

 

 

(4

)

 

 

10

 

 

 

38

 

 

 

50

 

Inventories

 

 

10

 

 

 

20

 

 

 

30

 

 

 

(34

)

Prepaid expenses

 

 

7

 

 

 

7

 

 

 

9

 

 

 

(4

)

Trade and other payables

 

 

74

 

 

 

(35

)

 

 

(21

)

 

 

(111

)

Income and other taxes

 

 

(6

)

 

 

(13

)

 

 

34

 

 

 

(27

)

Difference between employer pension and other post-retirement contributions and pension and other post-retirement expense

 

 

(5

)

 

 

(4

)

 

 

(6

)

 

 

(3

)

Other assets and other liabilities

 

 

 

 

 

(6

)

 

 

(12

)

 

 

7

 

Cash flows from operating activities

 

 

121

 

 

 

108

 

 

 

276

 

 

 

282

 

Investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(28

)

 

 

(56

)

 

 

(130

)

 

 

(157

)

Proceeds from disposals of property, plant and equipment

 

 

 

 

 

 

 

 

 

 

 

1

 

Acquisition of business, net of cash acquired

 

 

 

 

 

 

 

 

(30

)

 

 

 

Cash flows used for investing activities

 

 

(28

)

 

 

(56

)

 

 

(160

)

 

 

(156

)

Financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend payments

 

 

 

 

 

(28

)

 

 

(51

)

 

 

(83

)

Stock repurchase

 

 

 

 

 

(131

)

 

 

(59

)

 

 

(139

)

Net change in bank indebtedness

 

 

 

 

 

(1

)

 

 

(10

)

 

 

2

 

Change in revolving credit facility

 

 

 

 

 

45

 

 

 

(80

)

 

 

45

 

Proceeds from receivables securitization facility

 

 

 

 

 

70

 

 

 

25

 

 

 

150

 

Repayments of receivables securitization facility

 

 

 

 

 

 

 

 

(80

)

 

 

(110

)

Issuance of long-term debt

 

 

 

 

 

 

 

 

300

 

 

 

 

Repayments of long-term debt

 

 

(3

)

 

 

 

 

 

(3

)

 

 

(1

)

Other

 

 

1

 

 

 

 

 

 

(3

)

 

 

(1

)

Cash flows (used for) provided from financing activities

 

 

(2

)

 

 

(45

)

 

 

39

 

 

 

(137

)

Net increase (decrease) in cash and cash equivalents

 

 

91

 

 

 

7

 

 

 

155

 

 

 

(11

)

Impact of foreign exchange on cash

 

 

3

 

 

 

(2

)

 

 

2

 

 

 

(2

)

Cash and cash equivalents at beginning of period

 

 

124

 

 

 

93

 

 

 

61

 

 

 

111

 

Cash and cash equivalents at end of period

 

 

218

 

 

 

98

 

 

 

218

 

 

 

98

 

Supplemental cash flow information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash payments (refund) for:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

19

 

 

 

16

 

 

 

44

 

 

 

39

 

Income taxes

 

 

(1

)

 

 

5

 

 

 

(25

)

 

 

55

 

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

 

 

Q2

 

 

Q3

 

 

YTD

 

 

Q1

 

 

Q2

 

 

Q3

 

 

Q4

 

 

Year

 

Reconciliation of "Earnings before items" to Net earnings (loss)

 

 

Net earnings (loss)

 

($)

 

 

5

 

 

 

19

 

 

 

(92

)

 

 

(68

)

 

 

80

 

 

 

18

 

 

 

20

 

 

 

(34

)

 

 

84

 

 

(+)

Pension settlement loss

 

($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22

 

 

 

22

 

 

(+)

Impairment of long-lived assets

 

($)

 

 

 

 

 

 

 

 

68

 

 

 

68

 

 

 

8

 

 

 

12

 

 

 

26

 

 

 

 

 

 

46

 

 

(+)

Closure and restructuring costs

 

($)

 

 

 

 

 

1

 

 

 

42

 

 

 

43

 

 

 

3

 

 

 

6

 

 

 

9

 

 

 

14

 

 

 

32

 

 

(=)

Earnings before items

 

($)

 

 

5

 

 

 

20

 

 

 

18

 

 

 

43

 

 

 

91

 

 

 

36

 

 

 

55

 

 

 

2

 

 

 

184

 

 

(/)

Weighted avg. number of common shares outstanding (diluted)

 

(millions)

 

 

56.2

 

 

 

55.3

 

 

 

55.2

 

 

 

55.5

 

 

 

63.2

 

 

 

63.3

 

 

 

61.7

 

 

 

57.3

 

 

 

61.4

 

 

(=)

Earnings before items per diluted share

 

($)

 

 

0.09

 

 

 

0.36

 

 

 

0.33

 

 

 

0.77

 

 

 

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

 

 

 

19

 

 

 

(92

)

 

 

(68

)

 

 

80

 

 

 

18

 

 

 

20

 

 

 

(34

)

 

 

84

 

 

(+)

Equity loss, net of taxes

 

($)

 

 

1

 

 

 

 

 

 

1

 

 

 

2

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

 

 

2

 

 

(+)

Income tax expense (benefit)

 

($)

 

 

3

 

 

 

(15

)

 

 

(55

)

 

 

(67

)

 

 

24

 

 

 

5

 

 

 

(1

)

 

 

(26

)

 

 

2

 

 

(+)

Interest expense, net

 

($)

 

 

14

 

 

 

15

 

 

 

14

 

 

 

43

 

 

 

13

 

 

 

13

 

 

 

12

 

 

 

14

 

 

 

52

 

 

(+)

Depreciation and amortization

 

($)

 

 

72

 

 

 

71

 

 

 

71

 

 

 

214

 

 

 

73

 

 

 

74

 

 

 

72

 

 

 

74

 

 

 

293

 

 

(+)

Impairment of long-lived assets

 

($)

 

 

 

 

 

 

 

 

111

 

 

 

111

 

 

 

10

 

 

 

15

 

 

 

33

 

 

 

 

 

 

58

 

 

(=)

EBITDA

 

($)

 

 

95

 

 

 

90

 

 

 

50

 

 

 

235

 

 

 

201

 

 

 

125

 

 

 

136

 

 

 

29

 

 

 

491

 

 

(/)

Sales

 

($)

 

 

1,278

 

 

 

1,012

 

 

 

1,124

 

 

 

3,414

 

 

 

1,376

 

 

 

1,317

 

 

 

1,283

 

 

 

1,244

 

 

 

5,220

 

 

(=)

EBITDA margin

 

(%)

 

 

7

%

 

 

9

%

 

 

4

%

 

 

7

%

 

 

15

%

 

 

9

%

 

 

11

%

 

 

2

%

 

 

9

%

 

 

EBITDA

 

($)

 

 

95

 

 

 

90

 

 

 

50

 

 

 

235

 

 

 

201

 

 

 

125

 

 

 

136

 

 

 

29

 

 

 

491

 

 

(+)

Pension settlement loss

 

($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30

 

 

 

30

 

 

(+)

Closure and restructuring costs

 

($)

 

 

 

 

 

1

 

 

 

68

 

 

 

69

 

 

 

4

 

 

 

8

 

 

 

11

 

 

 

19

 

 

 

42

 

 

(=)

EBITDA before items

 

($)

 

 

95

 

 

 

91

 

 

 

118

 

 

 

304

 

 

 

205

 

 

 

133

 

 

 

147

 

 

 

78

 

 

 

563

 

 

(/)

Sales

 

($)

 

 

1,278

 

 

 

1,012

 

 

 

1,124

 

 

 

3,414

 

 

 

1,376

 

 

 

1,317

 

 

 

1,283

 

 

 

1,244

 

 

 

5,220

 

 

(=)

EBITDA margin before items

 

(%)

 

 

7

%

 

 

9

%

 

 

10

%

 

 

9

%

 

 

15

%

 

 

10

%

 

 

11

%

 

 

6

%

 

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of "Free cash flow" to Cash flows from operating activities

 

 

Cash flows from operating activities

 

($)

 

 

88

 

 

 

67

 

 

 

121

 

 

 

276

 

 

 

55

 

 

 

119

 

 

 

108

 

 

 

160

 

 

 

442

 

 

(-)

Additions to property, plant and equipment

 

($)

 

 

(62

)

 

 

(40

)

 

 

(28

)

 

 

(130

)

 

 

(46

)

 

 

(55

)

 

 

(56

)

 

 

(98

)

 

 

(255

)

 

(=)

Free cash flow

 

($)

 

 

26

 

 

 

27

 

 

 

93

 

 

 

146

 

 

 

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

 

 

 

13

 

 

 

13

 

 

 

 

 

 

 

1

 

 

 

1

 

 

 

1

 

 

 

1

 

 

 

 

 

 

(+)

Long-term debt

 

($)

 

 

1,102

 

 

 

1,089

 

 

 

1,086

 

 

 

 

 

 

 

853

 

 

 

824

 

 

 

938

 

 

 

938

 

 

 

 

 

 

(=)

Debt

 

($)

 

 

1,103

 

 

 

1,102

 

 

 

1,099

 

 

 

 

 

 

 

857

 

 

 

828

 

 

 

940

 

 

 

948

 

 

 

 

 

 

(-)

Cash and cash equivalents

 

($)

 

 

(152

)

 

 

(124

)

 

 

(218

)

 

 

 

 

 

 

(94

)

 

 

(93

)

 

 

(98

)

 

 

(61

)

 

 

 

 

 

(=)

Net debt

 

($)

 

 

951

 

 

 

978

 

 

 

881

 

 

 

 

 

 

 

763

 

 

 

735

 

 

 

842

 

 

 

887

 

 

 

 

 

 

(+)

Shareholders' equity

 

($)

 

 

2,181

 

 

 

2,277

 

 

 

2,211

 

 

 

 

 

 

 

2,608

 

 

 

2,619

 

 

 

2,439

 

 

 

2,376

 

 

 

 

 

 

(=)

Total capitalization

 

($)

 

 

3,132

 

 

 

3,255

 

 

 

3,092

 

 

 

 

 

 

 

3,371

 

 

 

3,354

 

 

 

3,281

 

 

 

3,263

 

 

 

 

 

 

 

Net debt

 

($)

 

 

951

 

 

 

978

 

 

 

881

 

 

 

 

 

 

 

763

 

 

 

735

 

 

 

842

 

 

 

887

 

 

 

 

 

 

(/)

Total capitalization

 

($)

 

 

3,132

 

 

 

3,255

 

 

 

3,092

 

 

 

 

 

 

 

3,371

 

 

 

3,354

 

 

 

3,281

 

 

 

3,263

 

 

 

 

 

 

(=)

Net debt-to-total capitalization

 

(%)

 

 

30

%

 

 

30

%

 

 

28

%

 

 

 

 

 

 

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

 

3

 

(140)

 

 

(133)

 

20

 

18

 

16

 

 

54

 

(5)

 

(7)

 

(12)

 

 

(24)

 

19

 

14

 

(136)

 

 

(103)

 

(+)

Impairment of long-lived assets

 

($)

 

 

 

111

 

 

111

 

 

 

 

 

 

 

 

 

 

 

 

 

111

 

 

111

 

(+)

Closure and restructuring costs

 

($)

 

 

1

 

67

 

 

68

 

 

 

 

 

 

 

 

1

 

 

1

 

 

1

 

68

 

 

69

 

(=)

Operating income (loss) before items

 

($)

 

4

 

4

 

38

 

 

46

 

20

 

18

 

16

 

 

54

 

(5)

 

(7)

 

(11)

 

 

(23)

 

19

 

15

 

43

 

 

77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of "Operating income (loss)
before items" to "EBITDA before items"

 

 

Operating income (loss) before items

 

($)

 

4

 

4

 

38

 

 

46

 

20

 

18

 

16

 

 

54

 

(5)

 

(7)

 

(11)

 

 

(23)

 

19

 

15

 

43

 

 

77

 

(+)

Non-service components of net periodic benefit cost

 

($)

 

4

 

6

 

4

 

 

14

 

 

 

 

 

 

 

(1)

 

 

 

(1)

 

4

 

5

 

4

 

 

13

 

(+)

Depreciation and amortization

 

($)

 

58

 

56

 

56

 

 

170

 

14

 

15

 

15

 

 

44

 

 

 

 

 

 

72

 

71

 

71

 

 

214

 

(=)

EBITDA before items

 

($)

 

66

 

66

 

98

 

 

230

 

34

 

33

 

31

 

 

98

 

(5)

 

(8)

 

(11)

 

 

(24)

 

95

 

91

 

118

 

 

304

 

(/)

Sales

 

($)

 

1,031

 

802

 

899

 

 

2,732

 

266

 

229

 

243

 

 

738

 

 

 

 

 

 

1,297

 

1,031

 

1,142

 

 

3,470

 

(=)

EBITDA margin before items

 

(%)

 

6%

 

8%

 

11%

 

 

8%

 

13%

 

14%

 

13%

 

 

13%

 

 

 

 

 

 

7%

 

9%

 

10%

 

 

9%

 
 

“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

 

 

Q2

 

 

Q3

 

 

YTD

 

 

Q1

 

 

Q2

 

 

Q3

 

 

Q4

 

 

Year

 

Pulp and Paper Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

($)

 

 

1,031

 

 

 

802

 

 

 

899

 

 

 

2,732

 

 

 

1,157

 

 

 

1,106

 

 

 

1,079

 

 

 

1,027

 

 

 

4,369

 

Operating income (loss)

 

($)

 

 

4

 

 

 

3

 

 

 

(140

)

 

 

(133

)

 

 

144

 

 

 

62

 

 

 

31

 

 

 

(11

)

 

 

226

 

Depreciation and amortization

 

($)

 

 

58

 

 

 

56

 

 

 

56

 

 

 

170

 

 

 

58

 

 

 

59

 

 

 

57

 

 

 

57

 

 

 

231

 

Impairment of long-lived assets

 

($)

 

 

 

 

 

 

 

 

111

 

 

 

111

 

 

 

 

 

 

 

 

 

32

 

 

 

 

 

 

32

 

Paper

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paper Production

 

('000 ST)

 

 

648

 

 

 

436

 

 

 

524

 

 

 

1,608

 

 

 

757

 

 

 

697

 

 

 

653

 

 

 

619

 

 

 

2,726

 

Paper Shipments - Manufactured

 

('000 ST)

 

 

679

 

 

 

459

 

 

 

550

 

 

 

1,688

 

 

 

736

 

 

 

681

 

 

 

672

 

 

 

656

 

 

 

2,745

 

Communication Papers

 

('000 ST)

 

 

569

 

 

 

366

 

 

 

449

 

 

 

1,384

 

 

 

615

 

 

 

567

 

 

 

563

 

 

 

554

 

 

 

2,299

 

Specialty and Packaging Papers

 

('000 ST)

 

 

110

 

 

 

93

 

 

 

101

 

 

 

304

 

 

 

121

 

 

 

114

 

 

 

109

 

 

 

102

 

 

 

446

 

Paper Shipments - Sourced from 3rd parties

 

('000 ST)

 

 

22

 

 

 

12

 

 

 

16

 

 

 

50

 

 

 

23

 

 

 

21

 

 

 

25

 

 

 

24

 

 

 

93

 

Paper Shipments - Total

 

('000 ST)

 

 

701

 

 

 

471

 

 

 

566

 

 

 

1,738

 

 

 

759

 

 

 

702

 

 

 

697

 

 

 

680

 

 

 

2,838

 

Pulp

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pulp Shipments(a)

 

('000 ADMT)

 

 

389

 

 

 

427

 

 

 

396

 

 

 

1,212

 

 

 

349

 

 

 

370

 

 

 

416

 

 

 

404

 

 

 

1,539

 

Pulp Shipments mix(b):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hardwood Kraft Pulp

 

(%)

 

 

3

%

 

 

2

%

 

 

4

%

 

 

3

%

 

 

2

%

 

 

2

%

 

 

5

%

 

 

5

%

 

 

4

%

Softwood Kraft Pulp

 

(%)

 

 

52

%

 

 

57

%

 

 

62

%

 

 

57

%

 

 

53

%

 

 

56

%

 

 

55

%

 

 

54

%

 

 

54

%

Fluff Pulp

 

(%)

 

 

45

%

 

 

41

%

 

 

34

%

 

 

40

%

 

 

45

%

 

 

42

%

 

 

40

%

 

 

41

%

 

 

42

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personal Care Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

($)

 

 

266

 

 

 

229

 

 

 

243

 

 

 

738

 

 

 

239

 

 

 

228

 

 

 

219

 

 

 

234

 

 

 

920

 

Operating income (loss)

 

($)

 

 

20

 

 

 

18

 

 

 

16

 

 

 

54

 

 

 

(8

)

 

 

(18

)

 

 

2

 

 

 

8

 

 

 

(16

)

Depreciation and amortization

 

($)

 

 

14

 

 

 

15

 

 

 

15

 

 

 

44

 

 

 

15

 

 

 

15

 

 

 

15

 

 

 

17

 

 

 

62

 

Impairment of long-lived assets

 

($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10

 

 

 

15

 

 

 

1

 

 

 

 

 

 

26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Exchange Rates

 

$US / $CAN

 

 

1.344

 

 

 

1.385

 

 

 

1.332

 

 

 

1.354

 

 

 

1.329

 

 

 

1.337

 

 

 

1.321

 

 

 

1.321

 

 

 

1.327

 

 

 

$CAN / $US

 

 

0.744

 

 

 

0.722

 

 

 

0.751

 

 

 

0.739

 

 

 

0.752

 

 

 

0.748

 

 

 

0.757

 

 

 

0.757

 

 

 

0.754

 

 

 

€ / $US

 

 

1.102

 

 

 

1.101

 

 

 

1.170

 

 

 

1.124

 

 

 

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.