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

  • Fourth quarter 2017 net loss of $5.42 per share; earnings before items1 of $0.64 per share
  • Price increases announced for pulp and several uncoated freesheet grades
  • Announced a 4.8% dividend increase

Domtar Corporation (NYSE: UFS) (TSX: UFS) today reported a net loss of $340 million ($5.42 per share) for the fourth quarter of 2017 compared to net earnings of $70 million ($1.11 per share) for the third quarter of 2017 and net earnings of $47 million ($0.75 per share) for the fourth quarter of 2016. Sales for the fourth quarter of 2017 were $1.3 billion.

Excluding items listed below, the Company had earnings before items1 of $40 million ($0.64 per share) for the fourth quarter of 2017 compared to earnings before items1 of $65 million ($1.03 per share) for the third quarter of 2017 and earnings before items1 of $47 million ($0.75 per share) for the fourth quarter of 2016.

Fourth quarter 2017 items:

  • Non-cash goodwill impairment charge associated with Personal Care of $578 million ($573 million after tax);
  • Closure and restructuring costs of $2 million ($1 million after tax);
  • Deferred tax benefit of $186 million related to the U.S. Tax Cuts and Jobs Act of 2017 (U.S. Tax Reform); and
  • Net gain on disposal of property, plant & equipment of $9 million ($8 million after tax).

Third quarter 2017 items:

  • Gain on disposal of property, plant & equipment of $4 million ($3 million after tax); and
  • Partial reversal of contingent consideration related to an acquisition of $2 million ($2 million after tax).

Fourth quarter 2016 items:

  • Closure and restructuring impact of $(1) million ($(1) million after tax); and
  • Negative impact of purchase accounting of $1 million ($1 million after tax).

FISCAL YEAR 2017 HIGHLIGHTS

As a result of its annual goodwill and indefinite life intangible assets impairment tests, the Company recorded a non-cash goodwill impairment charge of $578 million associated with Personal Care. Growing competitive market pressures in the healthcare and retail markets over the last year, including the entry of new competitors in the private label category, excess industry capacity and the decline of healthcare spending by governmental agencies, are expected to result in lower than previously anticipated sales and operating margins. In light of this weakened market outlook, our current business forecast was not sufficient to support the carrying value of the goodwill associated with Personal Care, leading to the impairment.

Commenting on the full-year results, John D. Williams, President and Chief Executive Officer said, “We generated nearly $450 million of operating cash flow and continued our solid track record of rewarding shareholders with a high payout ratio while maintaining financial flexibility. Our performance, combined with our confidence in our cash flow generating capabilities, enable us to announce a 4.8% dividend increase. Looking ahead, we remain focused on maximizing long-term profitability and value creation.”

QUARTERLY REVIEW

“As expected, higher maintenance and seasonally higher operating costs impacted our fourth quarter Pulp and Paper results,” said John D. Williams, President and Chief Executive Officer. “Nevertheless, pulp price realizations were higher and we shipped record volumes of tissue grade and fluff pulp. Recently announced price increases across a number of pulp and paper grades are expected to drive continued momentum into 2018.”

Commenting on Personal Care, Mr. Williams added, “While we had good results in 2017, we have concluded that the performance of our Personal Care business will continue to be impacted by an increasingly competitive market. We remain optimistic about the long-term growth trajectory of the absorbent hygiene market; however, this increasingly competitive market will negatively impact our sales, and we expect the environment to remain challenging for the foreseeable future. Importantly, the goodwill impairment charge is non-cash. It does not alter our current financial flexibility, and our overall cash generating capabilities remains strong.”

Operating loss was $512 million in the fourth quarter of 2017 compared to operating income of $89 million in the third quarter of 2017. Depreciation and amortization totaled $82 million in the fourth quarter of 2017.

Operating income before items1 was $59 million in the fourth quarter of 2017 compared to an operating income before items1 of $83 million in the third quarter of 2017.

    (In millions of dollars) 4Q 2017 3Q 2017   Sales $ 1,337 $ 1,292 Operating income (loss) Pulp and Paper segment 58 93 Personal Care segment (564 ) 8 Corporate   (6 )   (12 ) Total operating (loss) income (512 ) 89 Operating income before items1 59 83 Depreciation and amortization 82 80

The operating loss in the fourth quarter of 2017 was a result of the goodwill impairment charge, higher maintenance and raw material costs, lower productivity and higher costs, when compared to the operating income in the third quarter of 2017. These factors were partially offset by higher selling prices and volume and favorable exchange rates.

When compared to the third quarter of 2017, manufactured paper shipments were up 1% and pulp shipments increased 9%. The shipments-to-production ratio for paper was 100% in the fourth quarter of 2017, compared to 97% in the third quarter of 2017. Paper inventories increased by 1,000 tons and pulp inventories decreased by 50,000 metric tons when compared to the third quarter of 2017.

LIQUIDITY AND CAPITAL

Cash flow from operating activities amounted to $125 million and capital expenditures were $71 million, resulting in free cash flow1 of $54 million for the fourth quarter of 2017. Domtar’s net debt-to-total capitalization ratio1 stood at 28% at December 31, 2017 compared to 26% at September 30, 2017.

In 2017, cash flow from operating activities amounted to $449 million and capital expenditures were $182 million, resulting in free cash flow1 of $267 million.

DECLARATION OF DIVIDEND

The Board of Directors approved a 4.8% increase to its quarterly dividend (from $0.415 per share to $0.435 per share) on its common stock. The Board of Directors declared a dividend payable on April 16, 2018 to stockholders of record as of the close of business on April 2, 2018.

OUTLOOK

In 2018, costs, including freight, labor and raw materials, are expected to marginally increase. Our paper shipments should benefit from expected industry capacity closures, while paper prices should improve following the recently-announced price increases and pulp will benefit from volume growth in fluff. Personal Care is expected to be negatively impacted by an unfavorable tender balance, resulting in lower volume and operating margins.

EARNINGS CONFERENCE CALL

The Company will hold a conference call today at 10:00 a.m. (ET) to discuss its fourth quarter and fiscal year 2017 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 2018 earnings results on May 1, 2018 before markets open, followed by a conference call at 10:00 a.m. (ET) to discuss results. The date is tentative and will be confirmed approximately three weeks prior to the official earnings release date.

About Domtar

Domtar is a leading provider of a wide variety of fiber-based products including communication, specialty and packaging papers, market pulp and absorbent hygiene products. With approximately 10,000 employees serving more than 50 countries around the world, Domtar is driven by a commitment to turn sustainable wood fiber into useful products that people rely on every day. Domtar’s annual sales are approximately $5.2 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 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 2016 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 CorporationHighlights(In millions of dollars, unless otherwise noted)

  Three months ended   Three months ended   Twelve months ended   Twelve months ended December 31, December 31, December 31, December 31, 2017 2016 2017 2016 (Unaudited) $ $ $ $         Selected Segment Information Sales Pulp and Paper 1,090 1,046 4,216 4,239 Personal Care   262   242   1,005   917 Total for reportable segments 1,352 1,288 5,221 5,156 Intersegment sales   (15 )   (14 )   (64 )   (58 ) Consolidated sales   1,337   1,274   5,157   5,098 Depreciation and amortization

of property, plant and equipment

Pulp and Paper 64 68 254 284 Personal Care   18   17   67   64 Total for reportable segments 82 85 321 348 Impairment of goodwill - Personal Care 578578 — Impairment of property, plant

and equipment - Pulp and Paper

      —         29 Consolidated depreciation and amortization and

impairment of goodwill and property, plant and

equipment

  660   85   899   377   Operating income (loss) Pulp and Paper 58 74 250 217 Personal Care (564 ) 13 (527 ) 57 Corporate   (6 )   (13 )   (40 )   (51 ) Consolidated operating (loss) income (512 ) 74 (317 ) 223 Interest expense, net   16   17   66   66 (Loss) earnings before income taxes (528 ) 57 (383 ) 157 Income tax (benefit) expense   (188 )   10   (171 )   29 Net (loss) earnings   (340 )   47   (212 )   128 Per common share (in dollars) Net (loss) earnings Basic (5.42 ) 0.75 (3.38 ) 2.04 Diluted (5.42 ) 0.75 (3.38 ) 2.04 Weighted average number of common

shares outstanding (millions)

Basic 62.7 62.6 62.7 62.6 Diluted   62.7   62.7   62.7   62.7 Cash flows from operating activities 125 155 449 465 Additions to property, plant and equipment   71   45   182   347

Domtar CorporationConsolidated Statements of Earnings (Loss)(In millions of dollars, unless otherwise noted)

  Three months ended   Three months ended   Twelve months ended   Twelve months ended December 31, December 31, December 31, December 31, 2017 2016 2017 2016 (Unaudited) $ $ $ $         Sales 1,337 1,274 5,157 5,098 Operating expenses Cost of sales, excluding depreciation and amortization 1,076 1,003 4,131 4,035 Depreciation and amortization 82 85 321 348 Selling, general and administrative 119 113 456 427 Impairment of goodwill and property, plant and

equipment

578578 29 Closure and restructuring costs 2 (1 ) 2 32 Other operating (income) loss, net   (8 )   —   (14 )   4   1,849   1,200   5,474   4,875 Operating (loss) income (512 ) 74 (317 ) 223 Interest expense, net   16   17   66   66 (Loss) earnings before income taxes (528 ) 57 (383 ) 157 Income tax (benefit) expense   (188 )     10     (171 )     29 Net (loss) earnings   (340 )   47   (212 )   128 Per common share (in dollars) Net (loss) earnings Basic (5.42 ) 0.75 (3.38 ) 2.04 Diluted (5.42 ) 0.75 (3.38 ) 2.04 Weighted average number of common

shares outstanding (millions)

Basic 62.7 62.6 62.7 62.6 Diluted 62.7 62.7 62.7 62.7

Domtar CorporationConsolidated Balance Sheets at(In millions of dollars)

  December 31,   December 31, 2017 2016 (Unaudited) $ $ Assets     Current assets Cash and cash equivalents 139 125 Receivables, less allowances of $7 and $7 704 613 Inventories 757 759 Prepaid expenses 33 40 Income and other taxes receivable   28     31 Total current assets 1,661 1,568 Property, plant and equipment, net 2,765 2,825 Goodwill 550 Intangible assets, net 633 608 Other assets   157   129 Total assets   5,216   5,680 Liabilities and shareholders' equity Current liabilities Bank indebtedness 12 Trade and other payables 716 656 Income and other taxes payable 24 22 Long-term debt due within one year   1   63 Total current liabilities 741 753 Long-term debt 1,129 1,218 Deferred income taxes and other 491 675 Other liabilities and deferred credits 326 358 Shareholders' equity Common stock 1 1 Additional paid-in capital 1,969 1,963 Retained earnings 895 1,211 Accumulated other comprehensive loss   (336 )   (499 ) Total shareholders' equity   2,529   2,676 Total liabilities and shareholders' equity   5,216   5,680

Domtar CorporationConsolidated Statements of Cash Flows(In millions of dollars)

  For the twelve months ended December 31, 2017   December 31, 2016 (Unaudited) $ $ Operating activities     Net (loss) earnings (212 ) 128 Adjustments to reconcile net (loss) earnings to cash flows from operating activities Depreciation and amortization 321 348 Deferred income taxes and tax uncertainties (207 ) 9 Impairment of goodwill and property, plant and equipment 578 29 Net gains on disposals of property, plant and equipment (13 ) — Stock-based compensation expense 6 7 Other 2 (2 ) Changes in assets and liabilities, excluding the effect of sale and acquisition

of businesses

Receivables (72 ) 18 Inventories 21 14 Prepaid expenses 5 5 Trade and other payables 35 (51 ) Income and other taxes 8 (18 ) Difference between employer pension and other post-retirement

contributions and pension and other post-retirement expense

(32 ) (21 ) Other assets and other liabilities   9   (1 ) Cash flows from operating activities   449   465 Investing activities Additions to property, plant and equipment (182 ) (347 ) Proceeds from disposals of property, plant and equipment and sale of business 19 1 Acquisition of businesses, net of cash acquired (8 ) (46 ) Other     1 Cash flows used for investing activities   (171 )   (391 ) Financing activities Dividend payments (104 ) (102 ) Stock repurchase (10 ) Net change in bank indebtedness (12 ) 12 Change in revolving credit facility (50 ) — Proceeds from receivables securitization facility 45 140 Repayments of receivables securitization facility (90 ) (70 ) Repayments of long-term debt (64 ) (40 ) Other   1   (3 ) Cash flows used for financing activities   (274 )   (73 ) Net increase in cash and cash equivalents 4 1 Impact of foreign exchange on cash 10 (2 ) Cash and cash equivalents at beginning of year   125   126 Cash and cash equivalents at end of year   139   125 Supplemental cash flow information Net cash payments for: Interest 58 64 Income taxes   33   40

Domtar CorporationQuarterly 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.

      2017   2016 Q1   Q2   Q3   Q4   Year Q1   Q2   Q3   Q4   Year Reconciliation of "Earnings before items" to Net earnings (loss)                         Net earnings (loss) ($) 20 38 70 (340 ) (212 ) 4 18 59 47 128 (+) Impairment of goodwill and property, plant and equipment ($) — — — 573 573 16 2 4 — 22 (+) Closure and restructuring costs ($) — — — 1 1 2 16 8 (1 ) 25 (+) Litigation settlement ($) — — — — — 2 — — 2 (-) Net gains on disposals of property, plant and equipment ($) — — (3 ) (8 ) (11 ) — — — — (-) Reversal of contingent consideration ($) — — (2 ) — (2 ) — — — — (+) Impact of purchase accounting ($) — — — — — — — 1 1 (-) U.S. Tax Reform ($) — — — (186 ) (186 ) — — — — (=) Earnings before items ($) 20 38 65 40 163 22 38 71 47 178 (/) Weighted avg. number of common shares outstanding (diluted) (millions) 62.8 62.7 62.9 62.7 62.7 62.8 62.7 62.7 62.7 62.7 (=) Earnings before items per diluted share ($) 0.32 0.61 1.03 0.64 2.60 0.35 0.61 1.13 0.75 2.84   Reconciliation of "EBITDA" and "EBITDA before items" to

Net earnings (loss)

Net earnings (loss) ($) 20 38 70 (340 ) (212 ) 4 18 59 47 128 (+) Income tax expense (benefit) ($) 5 9 3 (188 ) (171 ) (3 ) 6 16 10 29 (+) Interest expense, net ($) 17 17 16 16 66 17 15 17 17 66 (=) Operating income (loss) ($) 42 64 89 (512 ) (317 ) 18 39 92 74 223 (+) Depreciation and amortization ($) 80 79 80 82 321 89 87 87 85 348 (+) Impairment of goodwill and property, plant and equipment ($) — — — 578 578 21 3 5 — 29 (-) Net gains on disposals of property, plant and equipment ($) — — (4 ) (9 ) (13 ) — — — — (=) EBITDA ($) 122 143 165 139 569 128 129 184 159 600 (/) Sales ($) 1,304 1,224 1,292 1,337 5,157 1,287 1,267 1,270 1,274 5,098 (=) EBITDA margin (%) 9 % 12 % 13 % 10 % 11 % 10 % 10 % 14 % 12 % 12 %

EBITDA

($) 122 143 165 139 569 128 129 184 159 600 (+) Closure and restructuring costs ($) — — — 2 2 2 21 10 (1 ) 32 (+) Litigation settlement ($) — — — — — 2 — — 2 (-) Reversal of contingent consideration ($) — — (2 ) — (2 ) — — — — (+) Impact of purchase accounting ($) — — — — — — — 1 1 (=) EBITDA before items ($) 122 143 163 141 569 130 152 194 159 635 (/) Sales ($) 1,304 1,224 1,292 1,337 5,157 1,287 1,267 1,270 1,274 5,098 (=) EBITDA margin before items (%) 9 % 12 % 13 % 11 % 11 % 10 % 12 % 15 % 12 % 12 %   Reconciliation of "Free cash flow" to Cash flows from operating activities Cash flows from operating activities ($) 91 121 112 125 449 97 118 95 155 465 (-) Additions to property, plant and equipment ($) (34 ) (37 ) (40 ) (71 ) (182 ) (100 ) (119 ) (83 ) (45 ) (347 ) (=) Free cash flow ($) 57 84 72 54 267 (3 ) (1 ) 12 110 118   "Net debt-to-total capitalization" computation Bank indebtedness ($) 2 — — — 6 1 — 12 (+) Long-term debt due within one year ($) 64 1 1 1 41 64 63 63 (+) Long-term debt ($) 1,188 1,203 1,164 1,129 1,211 1,237 1,309 1,218 (=) Debt ($) 1,254 1,204 1,165 1,130 1,258 1,302 1,372 1,293 (-) Cash and cash equivalents ($) (111 ) (124 ) (143 ) (139 ) (97 ) (111 ) (168 ) (125 ) (=) Net debt ($) 1,143 1,080 1,022 991 1,161 1,191 1,204 1,168 (+) Shareholders' equity ($) 2,685 2,770 2,886 2,529 2,736 2,716 2,754 2,676 (=) Total capitalization ($) 3,828 3,850 3,908 3,520 3,897 3,907 3,958 3,844 Net debt ($) 1,143 1,080 1,022 991 1,161 1,191 1,204 1,168 (/) Total capitalization ($) 3,828 3,850 3,908 3,520 3,897 3,907 3,958 3,844 (=) Net debt-to-total capitalization (%) 30 % 28 % 26 % 28 % 30 % 30 % 30 % 30 %

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

Domtar CorporationQuarterly Reconciliation of Non-GAAP Financial Measures – By Segment 2017(In millions of dollars, unless otherwise noted)

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

      Pulp and Paper   Personal Care   Corporate   Total Q1'17   Q2'17   Q3'17   Q4'17   Year Q1'17   Q2'17   Q3'17   Q4'17   Year Q1'17   Q2'17   Q3'17   Q4'17   Year Q1'17   Q2'17   Q3'17   Q4'17   Year Reconciliation of Operating income (loss)

to "Operating income (loss) before items"

Operating income (loss) ($) 34 65 93 58 250 16 13 8 (564) (527) (8) (14) (12) (6) (40) 42 64 89 (512) (317) (+) Impairment of goodwill ($) — — — — — — — 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 ($) — — — — — — — 2 2 — — — — — — — 2 2 (=) Operating income (loss) before items ($) 34 65 89 58 246 16 13 8 16 53 (8) (14) (14) (15) (51) 42 64 83 59 248   Reconciliation of "Operating income (loss)

before items" to "EBITDA before items"

Operating income (loss) before items ($) 34 65 89 58 246 16 13 8 16 53 (8) (14) (14) (15) (51) 42 64 83 59 248 (+) Depreciation and amortization ($) 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 4,216 249 241 253 262 1,005 — — — — 1,322 1,240 1,307 1,352 5,221 (=) EBITDA margin before items (%) 9% 13% 14% 11% 12% 13% 12% 10% 13% 12% — — — — 9% 12% 12% 10% 11%

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

Domtar Corporation

Quarterly Reconciliation of Non-GAAP Financial Measures – By Segment 2016

(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 (1)   Corporate   Total Q1'16   Q2'16   Q3'16   Q4'16   Year Q1'16   Q2'16   Q3'16   Q4'16   Year Q1'16   Q2'16   Q3'16   Q4'16   Year Q1'16   Q2'16   Q3'16   Q4'16   Year Reconciliation of Operating income (loss)

to "Operating income (loss) before items"

Operating income (loss) ($) 19 35 89 74 217 14 15 15 13 57 (15) (11) (12) (13) (51) 18 39 92 74 223 (+) Impairment of property, plant and equipment ($) 21 3 5 — 29 — — — — — — — — 21 3 5 — 29 (+) Impact of purchase accounting ($) — — — — — — — 1 1 — — — — — — — 1 1 (+) Closure and restructuring costs ($) 2 21 10 (2) 31 — — — 1 1 — — — — 2 21 10 (1) 32 (+) Litigation settlement ($) — — — — — — — — — 2 — — 2 — 2 — — 2 (=) Operating income (loss) before items ($) 42 59 104 72 277 14 15 15 15 59 (15) (9) (12) (13) (49) 41 65 107 74 287   Reconciliation of "Operating income (loss)

before items" to "EBITDA before items"

Operating income (loss) before items ($) 42 59 104 72 277 14 15 15 15 59 (15) (9) (12) (13) (49) 41 65 107 74 287 (+) Depreciation and amortization ($) 73 72 71 68 284 16 15 16 17 64 — — — — 89 87 87 85 348 (=) EBITDA before items ($) 115 131 175 140 561 30 30 31 32 123 (15) (9) (12) (13) (49) 130 152 194 159 635 (/) Sales ($) 1,085 1,054 1,054 1,046 4,239 216 228 231 242 917 — — — — 1,301 1,282 1,285 1,288 5,156 (=) EBITDA margin before items (%) 11% 12% 17% 13% 13% 14% 13% 13% 13% 13% — — — — 10% 12% 15% 12% 12%

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

(1) On October 1, 2016, the Company acquired 100% of the shares of Home Delivery Incontinent Supplies Co. in the United States.

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

    2017   2016 Q1   Q2   Q3   Q4   Year Q1   Q2   Q3   Q4   Year Pulp and Paper Segment                         Sales ($) 1,073 999 1,054 1,090 4,216 1,085 1,054 1,054 1,046 4,239 Operating income ($) 34 65 93 58 250 19 35 89 74 217 Depreciation and

amortization

($) 64 63 63 64 254 73 72 71 68 284 Impairment of property,

plant and equipment

($) — — — — 21 3 5 — 29   Paper Paper Production ('000 ST) 709 715 745 724 2,893 785 715 726 714 2,940 Paper Shipments -

Manufactured

('000 ST) 745 698 722 726 2,891 786 752 744 739 3,021 Communication Papers ('000 ST) 622 582 597 600 2,401 657 627 620 618 2,522 Specialty and Packaging

Papers

('000 ST) 123 116 125 126 490 129 125 124 121 499 Paper Shipments - Sourced

from 3rd parties

('000 ST) 29 26 29 25 109 32 29 35 27 123 Paper Shipments - Total ('000 ST) 774 724 751 751 3,000 818 781 779 766 3,144 Pulp Pulp Shipments(a) ('000 ADMT) 453 383 424 462 1,722 369 360 369 415 1,513 Pulp Shipments mix(b): Hardwood Kraft Pulp (%) 4 % 3 % 7 % 5 % 5 % 5 % 4 % 4 % 8 % 5 % Softwood Kraft Pulp (%) 67 % 62 % 61 % 54 % 61 % 66 % 61 % 63 % 63 % 63 % Fluff Pulp (%) 29 % 35 % 32 % 41 % 34 % 29 % 35 % 33 % 29 % 32 %   Personal Care Segment Sales ($) 249 241 253 262 1,005 216 228 231 242 917 Operating income (loss) ($) 16 13 8 (564 ) (527 ) 14 15 15 13 57 Depreciation and

amortization

($) 16 16 17 18 67 16 15 16 17 64 Impairment of goodwill ($) — — — 578 578 — — — —   Average Exchange Rates $US / $CAN 1.323 1.344 1.253 1.272 1.297 1.375 1.289 1.305 1.333 1.325 $CAN / $US 0.756 0.744 0.798 0.786 0.771 0.727 0.776 0.766 0.750 0.755 € / $US 1.066 1.100 1.175 1.178 1.130 1.103 1.130 1.116 1.078 1.107

(a) Figures represent Pulp Shipments to third parties.(b) Percentages include Pulp Shipments to our Personal Care segment.

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

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

Domtar CorporationINVESTOR RELATIONSNicholas Estrela, 514-848-5049DirectorInvestor RelationsorMEDIA RELATIONSDavid Struhs, 803-802-8031Vice-PresidentCorporate Services and Sustainability

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