8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

November 7, 2007

(Date of Report/Date of earliest event reported)

DOMTAR CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	001-33164	20-5901152
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

395 de Maisonneuve Blvd. West

Montreal, Quebec

Canada H3A 1L6

(Address and zip code of principal executive offices)

(514) 848-5555

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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ITEM 2.02 Results of Operations and Financial Condition

On November 7, 2007, Domtar Corporation issued a press release reporting earnings for the third quarter of 2007 and announced that they will be holding a webcast and a conference call to present its third quarter 2007 financial results on Wednesday, November 7, at 11:00 a.m., (EST). A copy of the press release is being furnished as Exhibit 99.1 to this Form 8-K.

ITEM 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibits 99.1:    Press release of Domtar Corporation, dated November 7, 2007.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

DOMTAR CORPORATION (Registrant)
By:	/s/ Razvan L. Theodoru
Name:	Razvan L. Theodoru
Title:	Vice-President and Secretary
Date: November 7, 2007

3

Exhibit Index

Exhibit No.	Exhibit
99.1	Press Release of Domtar Corporation, dated November 7, 2007

4

EX-99.1

Exhibit 99.1

395 de Maisonneuve Blvd. West

Montreal QC H3A 1L6

www.domtar.com

	FOR IMMEDIATE RELEASE

DOMTAR CORPORATION REPORTS THIRD QUARTER 2007 RESULTS

Montreal, November 7, 2007 – Domtar Corporation (NYSE/TSX: UFS) today reported net income of $36 million ($0.07 per diluted share) for the third quarter of 2007 compared to net income of $11 million ($0.02 per diluted share) in the second quarter of 2007. Sales for the third quarter of 2007 increased 4.9% from the second quarter to $1.7 billion.

The stronger results when compared to the second quarter of 2007 were primarily due to higher selling prices, lower costs related to planned maintenance shutdowns and to freight, as well as higher shipments, which in total improved net income by $0.07 per diluted share. This increase was partially offset by the negative impact of a stronger Canadian dollar, higher fiber costs and a higher tax rate which in total reduced net income by $0.02 per diluted share.

Included in the third quarter 2007 financial results were:

• Costs of $14 million ($8 million after tax or $0.02 per diluted share) related to synergies, integration and optimization; and

• A mark-to-market gain of $6 million ($3 million after tax or $0.01 per diluted share) related to financial instruments.

Included in the second quarter 2007 financial results were:

• Costs of $7 million ($4 million after tax or $0.01 per diluted share) related to synergies, integration and optimization; and

• A mark-to-market gain of $10 million ($6 million after tax or $0.01 per diluted share) related to financial instruments.

“Our profit margins expanded in the third quarter with better volumes and prices but also due to the strong operating performance of our paper, pulp and sawmilling operations,” said Raymond Royer, President and CEO. “All of our business segments posted improved results and the momentum continues to build with prices for paper products and for pulp trending higher and with the benefits of initiatives aimed at delivering synergies gradually ramping up. Also, our continued efforts to bring a proper balance between supply and our customers’ demand resulted in a significant reduction in our paper inventories in the quarter.”

Commenting on market conditions, Mr. Royer added, “I am pleased with the continued support we get from our customers. Clearly, with paper shipments higher than the second quarter, we manage to maintain our leading position in North America in spite of the overall weakness observed in market demand year-to-date. By maintaining the same focus on building the franchise with service solutions and an easy access to our quality products, we are positioning the company to create significant shareholder value.”

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SEGMENT REVIEW

PAPERS

Operating income in our Papers business was $133 million in the third quarter of 2007 compared to operating income of $92 million for the second quarter of 2007. Depreciation and amortization in our Papers business totaled $122 million in the third quarter of 2007. When compared to the second quarter of 2007, sales increased 4.6% to $1.4 billion with paper and pulp shipments increasing by 4.3% and 0.9%, respectively. Lack-of-order downtime amounted to 84,000 tons, including 18,000 tons of lack-of-order downtime taken in July on three paper machines prior to the announcement of their closure on July 31. Paper inventories declined 72,000 tons throughout the quarter.

When compared to the second quarter, the increase in operating income is the result of higher average selling prices for paper and pulp, lower costs related to planned maintenance shutdowns and higher paper shipments. These factors were partially offset by higher costs for purchased fiber and chips.

PAPER MERCHANTS

Operating income in our Paper Merchants business was $6 million in the third quarter of 2007 compared to operating income of $2 million for the second quarter of 2007. Sales increased 10% to $249 million while deliveries increased 9.1%.

When compared to the second quarter, the increase in operating income is the result of higher deliveries, higher average selling prices and a decrease of $2 million in the allowance for doubtful accounts.

WOOD

Operating loss in our Wood business was $13 million in the third quarter of 2007 compared to operating loss of $20 million for the second quarter of 2007. Depreciation and amortization in our Wood business totaled $6 million in the third quarter of 2007. When compared to the second quarter of 2007, sales decreased 2% to $88 million while lumber shipments decreased 13% due to lower buy-and-resell activities of lumber produced by third parties, offset by higher shipments of chips and an increase of sales of premium lumber.

When compared to the second quarter, the decrease in operating loss is the result of lower costs as well as higher average selling prices. In the second quarter, manufacturing costs were negatively impacted by the gradual scale down of production at the White River, Ontario sawmill which was closed in July. Also, Domtar successfully restarted in late June its Val d’Or, Quebec sawmill with a new labor contract improving its unit cost competitiveness.

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OUTLOOK

For the remainder of the year, price realizations for paper and pulp are expected to further improve as a result of recently announced price increases for several commercial printing paper grades and for pulp while volumes are expected to decrease from the third quarter due to seasonal factors typifying our business. Integration related costs are expected to continue to increase from the third quarter while the annualized run rate from synergies is targeted at $80 million by year-end. The strengthening in the value of the Canadian dollar toward the end of the third quarter is expected to have a significant negative impact on the cost structure and profitability of our operating Canadian mills.

EARNINGS CONFERENCE CALL

The Company will hold a conference call today at 11:00 a.m. (EST) to discuss its third quarter 2007 financial results. Financial analysts are invited to participate in the call by dialing 1-866-904-6251 (North America) or 1-416-915-8321 (International), while media and other interested individuals are invited to listen to the live broadcast on the Domtar corporate website at www.domtar.com.

THE TRANSACTION

Domtar Corporation started its operations on March 7, 2007 following the combination of the Weyerhaeuser Fine Paper Business and Domtar Inc. Prior to the completion of the Transaction, the Weyerhaeuser Fine Paper Business was operated by Weyerhaeuser Company.

The financial results of Domtar Corporation cover certain periods prior to the Transaction. For accounting and financial reporting purposes, Weyerhaeuser Fine Paper Business is considered to be the “predecessor” to Domtar Corporation and as a result, its historical financial statements now constitute the historical financial statements of Domtar Corporation. Accordingly, the results reported for the second and third quarter of 2007 include the results of operations of the new Company for the entire period. The results reported for the third quarter and the year-to-date of fiscal year 2006 include only the results of operations of the Weyerhaeuser Fine Paper Business, on a carve-out basis, for the entire period. The results reported for the year-to-date of fiscal year 2007 include the results of operations of the Weyerhaeuser Fine Paper Business, on a carve-out basis, for the period from January 1, 2007 to March 6, 2007 and the results of operations of the new Company for the period from March 7, 2007 to September 30, 2007.

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FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements relating to trends in, or representing management’s beliefs about, Domtar’s future growth, results of operations, performance and business prospects and opportunities. These forward-looking statements are generally denoted by the use of words such as “anticipate,” “believe,” “expect,” “intend,” “aim,” “target,” “plan,” “continue,” “estimate,” “project,” “may,” “will,” “should” and similar expressions. These statements reflect management’s current beliefs and are based on information currently available to management. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to known and unknown risks and uncertainties and other factors that could cause actual results to differ materially from historical results or those anticipated. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will occur, or if any occurs, what effect they will have on Domtar’s results of operations or financial condition. These factors include, but are not limited to:

• the effect of general economic conditions, particularly in the U.S. and Canada;

• market demand for Domtar Corporation’s products, which may be tied to the relative strength of various U.S. and/or Canadian business segments;

• product selling prices;

• energy prices;

• raw material prices;

• chemical prices;

• performance of Domtar Corporation’s manufacturing operations including unexpected maintenance requirements;

• the successful integration of the Weyerhaeuser Fine Paper Business with Domtar and the ability to realize anticipated cost savings;

• the level of competition from domestic and foreign producers;

• the effect of forestry, land use, environmental and other governmental regulations, and changes in accounting regulations;

• the effect of weather and the risk of loss from fires, floods, windstorms, hurricanes and other natural disasters;

• transportation costs;

• the loss of current customers or the inability to obtain new customers;

• legal proceedings;

• changes in asset valuations, including write downs of property, plant and equipment, inventory, accounts receivable or other assets for impairment or other reasons;

• changes in currency exchange rates, particularly the relative value of the U.S. dollar to the Canadian dollar;

• the effect of timing of retirements and changes in the market price of Domtar Corporation’s common stock on charges for stock-based compensation; and

• performance of pension fund investments and related derivatives.

These factors should be considered carefully and undue reliance should not be placed on the forward-looking statements, which speak only as of the date made, when evaluating the information presented in this document. Unless specifically required by law, Domtar Corporation assumes no obligation to update or revise these forward-looking statements to reflect new events or circumstances.

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DOMTAR CORPORATION (NYSE/TSX: UFS) IS THE LARGEST INTEGRATED PRODUCER OF UNCOATED FREESHEET PAPER IN NORTH AMERICA AND THE SECOND LARGEST IN THE WORLD BASED ON PRODUCTION CAPACITY, AND IS ALSO A MANUFACTURER OF PAPERGRADE PULP. THE COMPANY DESIGNS, MANUFACTURES, MARKETS AND DISTRIBUTES A WIDE RANGE OF BUSINESS, COMMERCIAL PRINTING, PUBLICATION AS WELL AS TECHNICAL AND SPECIALTY PAPERS WITH RECOGNIZED BRANDS SUCH AS FIRST CHOICE^®, MICROPRINT^®, WINDSOR OFFSET^®, COUGAR^® AS WELL AS ITS FULL LINE OF ENVIRONMENTALLY AND SOCIALLY RESPONSIBLE PAPERS, DOMTAR EARTHCHOICE^®. DOMTAR OWNS AND OPERATES DOMTAR DISTRIBUTION GROUP, AN EXTENSIVE NETWORK OF STRATEGICALLY LOCATED PAPER DISTRIBUTION FACILITIES. DOMTAR ALSO PRODUCES LUMBER AND OTHER SPECIALTY AND INDUSTRIAL WOOD PRODUCTS. THE COMPANY EMPLOYS NEARLY 14,000 PEOPLE. TO LEARN MORE, VISIT WWW.DOMTAR.COM.

TICKER SYMBOL   UFS (NYSE, TSX) MEDIA RELATIONS   Michel A. Rathier   Tel.: (514) 848-5103 INVESTOR RELATIONS   Pascal Bossé   Tel.: (514) 848-5938

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Domtar Corporation

Highlights

(In millions of US dollars, unless otherwise noted)

	Thirteen weeks ended						Thirty-nine weeks ended
	September 30, 2007			September 24, 2006			September 30, 2007			September 24, 2006
	(Unaudited)						(Unaudited)
Selected Segment Information
Sales
Papers	$	1,411		$	759		$	3,715		$	2,304
Paper Merchants		249			—			551			—
Wood		88			49			225			186
Total for reportable segments		1,748			808			4,491			2,490
Intersegment sales – Papers		(72	)		(1	)		(162	)		(1	)
Intersegment sales – Paper Merchants		—			—			(1	)		—
Intersegment sales – Wood		(16	)		(12	)		(34	)		(56	)
Consolidated sales		1,660			795			4,294			2,433
Depreciation and amortization and impairment loss
Papers		122			74			319			222
Paper Merchants		—			—			1			—
Wood		6			3			17			7
Total for reportable segments		128			77			337			229
Impairment loss – Papers		—			—			—			749
Consolidated depreciation and amortization and impairment loss		128			77			337			978
Operating income (loss)
Papers		133			73			296			(691	)
Paper Merchants		6			—			12			—
Wood		(13	)		(4	)		(37	)		(8	)
Corporate		(3	)		—			(8	)		—
Consolidated operating income (loss)		123			69			263			(699	)
Interest expense		48			—			106			—
Income (loss) before income taxes		75			69			157			(699	)
Income tax expense (1)		39			21			61			12
Net income (loss)		36			48			96			(711	)
Per common share (in dollars)
Net income (loss)
Basic		0.07			0.17			0.21			(2.50	)
Diluted		0.07			0.17			0.21			(2.50	)
Weighted average number of common and exchangeable shares outstanding (millions)
Basic		515.4			284.1			459.6			284.1
Diluted		517.8			284.1			461.5			284.1
Cash flows provided from operating activities		144			30			424			212
Additions to property, plant and equipment		19			12			65			53

(1) The combined statutory rate in Canada is approximately 31% and the combined statutory rate in the U.S. is approximately 40%. The Canadian effective tax rate of the third quarter includes an additional expense of $1 million related to current year non-deductible items. The U.S. effective tax rate for the third quarter includes an additional expense of $6 million. This amount includes an adjustment to the Company’s estimate of the non-conventional fuel tax credits of $3 million and a $2 million provision for the U.S. withholding taxes payable on future distributions from the U.S. subsidiaries. The Canadian effective tax rate for the 39 weeks ended September 30, 2007 differs from the combined statutory rate due to a $7 million benefit related to changes in the federal income tax rate, out of which $6 million is related to a previously reported out of period adjustment. The U.S. effective tax rate includes $5 million related to the non-conventional fuel tax credit. The non-conventional fuel tax credits are subject to fluctuations in the price of oil. Due to the high level of uncertainty inherent in future oil prices, this estimate may change significantly and the Company may have to adjust the credit in the fourth quarter. Under current U.S. tax law, the sale of biomass gas will no longer generate non-conventional fuel tax credits after 2007. Also, the Company recorded a $4 million expense for U.S. withholding taxes payable on future distributions from the U.S. subsidiaries.

	Thirteen weeks ended						Thirty-nine weeks ended
	September 30, 2007						September 30, 2007
Income taxes	Canada		U.S.		Total		Canada		U.S.		Total
Income (loss) before income taxes	(23	)	98		75		(73	)	230		157
Income tax expense (benefit)	(6	)	45		39		(32	)	93		61
Effective tax rate	26	%	46	%	52	%	44	%	40	%	39	%

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Domtar Corporation

Consolidated Statements of Income

(In millions of US dollars, unless otherwise noted)

	Thirteen weeks ended				Thirty-nine weeks ended
	September 30, 2007		September 24, 2006		September 30, 2007		September 24, 2006
	(Unaudited)				(Unaudited)
Sales	$	1,660	$	795	$	4,294	$	2,433
Operating expenses
Cost of sales, excluding depreciation and amortization		1,283		605		3,418		2,023
Depreciation and amortization		128		77		337		229
Selling, general and administrative		126		44		276		131
Impairment of goodwill		—		—		—		749
		1,537		726		4,031		3,132
Operating income (loss)		123		69		263		(699	)
Interest expense		48		—		106		—
Income (loss) before income taxes		75		69		157		(699	)
Income tax expense		39		21		61		12
Net income (loss)		36		48		96		(711	)
Per common share (in dollars)
Net income (loss)
Basic		0.07		0.17		0.21		(2.50	)
Diluted		0.07		0.17		0.21		(2.50	)
Weighted average number of common and exchangeable shares outstanding (millions)
Basic		515.4		284.1		459.6		284.1
Diluted		517.8		284.1		461.5		284.1

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Domtar Corporation

Consolidated Balance Sheets As at

(In millions of US dollars)

	September 30, 2007			December 31, 2006
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	136		$	1
Receivables, less allowances of $9 and $2		595			340
Inventories		1,018			520
Prepaid expenses		25			6
Income and other taxes receivable		9			—
Deferred income taxes		62			22
Total current assets		1,845			889
Property, plant and equipment, at cost		10,007			6,696
Accumulated depreciation		(4,072	)		(3,631	)
Net property, plant and equipment		5,935			3,065
Goodwill		141			14
Intangibles assets, net of amortization		30			—
Other assets		110			30
Total assets		8,061			3,998
Liabilities and shareholders’ equity
Current liabilities
Bank indebtedness		75			—
Trade and other payables		750			250
Income and other taxes payable		79			6
Long-term debt due within one year		19			12
Total current liabilities		923			268
Long-term debt		2,356			32
Deferred income taxes		1,144			758
Other liabilities and deferred credits		426			25
Shareholders’ equity
Business Unit equity		—			2,852
Common stock		5			—
Exchangeable shares		343			—
Additional paid-in capital		2,497			—
Retained earnings		73			—
Accumulated other comprehensive income		294			63
Total shareholders’ equity		3,212			2,915
Total liabilities and shareholders’ equity		8,061			3,998

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Domtar Corporation

Consolidated Statements of Cash Flows

(In millions of US dollars)

	Thirteen weeks ended						Thirty-nine weeks ended
	September 30, 2007			September 24, 2006			September 30, 2007			September 24, 2006
	(Unaudited)						(Unaudited)
Operating activities
Net income (loss)	$	36		$	48		$	96		$	(711	)
Adjustments to reconcile income to cash flows from operating activities
Depreciation and amortization		128			77			337			229
Deferred income taxes		(10	)		(24	)		(25	)		(22	)
Impairment of goodwill		—			—			—			749
Other		1			17			2			17
Changes in assets and liabilities, net of effects of acquisition
Receivables		(70	)		(27	)		(126	)		(28	)
Inventories		5			(19	)		22			44
Prepaid expenses		3			3			(4	)		(4	)
Trade and other payables		15			(46	)		60			(63	)
Income and other taxes		37			—			68			—
Other assets and other liabilities		(1	)		1			(6	)		1
Cash flows provided from operating activities		144			30			424			212
Investing activities
Additions to property, plant and equipment		(19	)		(12	)		(65	)		(53	)
Proceeds from disposals of property, plant and equipment		1			—			23			—
Business acquisitions – cash acquired		—			—			573			—
Other		3			—			(1	)		—
Cash flows provided from (used for) investing activities		(15	)		(12	)		530			(53	)
Financing activities
Net change in bank indebtedness		(6	)		—			(9	)		—
Issuance of short-term debt		—			—			1,350			—
Issuance of long-term debt		—			—			800			—
Repayment of short-term debt		—			—			(1,350	)		—
Repayment of long-term debt		(75	)		(1	)		(156	)		(4	)
Debt issue costs		—			—			(24	)		—
Distribution to Weyerhaeuser prior to March 7, 2007		—			(18	)		(1,431	)		(155	)
Other		—			—			(5	)		—
Cash flows used for financing activities		(81	)		(19	)		(825	)		(159	)
Net increase (decrease) in cash and cash equivalents		48			(1	)		129			—
Translation adjustments related to cash and cash equivalents		8			—			6			—
Cash and cash equivalents at beginning of period		80			2			1			1
Cash and cash equivalents at end of period		136			1			136			1

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Domtar Corporation

Quarterly Statistical Review

		2007								2006
		1st Qtr		2nd Qtr		3rd Qtr		Year-to- date		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Year
Total Shipments by Category of Products
Papers (in thousands of ST) (a) – actual			871		1,209		1,261		3,341		813		732		711		768		3,024
Papers (in thousands of ST) (a,b) – combined			1,247		—		—		—		1,446		1,304		1,267		1,280		5,297
Market Pulp (in thousands of ADMT) (c) – actual			249		330		333		912		207		205		180		207		799
Market Pulp (in thousands of ADMT) (b,c) –combined			355		—		—		—		342		359		352		377		1,430
Lumber (in millions of FBM) – actual			88		227		197		512		93		47		43		40		223
Lumber (in millions of FBM) (b) – combined			209		—		—		—		349		317		274		199		1,139
Benchmark Prices for the Majority of our Products (d)
•     20-lb repro bond, 92 bright (copy)	($/ton)	$	930	$	963	$	990	$	961	$	820	$	890	$	950	$	947	$	902
•     50-lb offset, rolls	($/ton)	$	810	$	810	$	803	$	808	$	765	$	840	$	850	$	838	$	823
•     Coated publication No. 5, 40-lb offset, rolls	($/ton)	$	778	$	748	$	782	$	769	$	898	$	895	$	848	$	813	$	863
•     Pulp NBSK – U.S. market	($/ADMT)	$	790	$	810	$	837	$	812	$	653	$	707	$	757	$	770	$	722
•     Pulp NBHK – Japan market (e)	($/ADMT)	$	640	$	640	$	658	$	646	$	542	$	572	$	618	$	637	$	592
•     Lumber G.L. 2x4x8 studs	($/MFBM)	$	317	$	335	$	336	$	329	$	391	$	371	$	313	$	302	$	344
•     Lumber G.L. 2x4 R/L, no. 1 & no. 2	($/MFBM)	$	332	$	332	$	343	$	336	$	409	$	386	$	351	$	327	$	368
Average Exchange Rates	CAN		1.172		1.098		1.044		1.105		1.155		1.122		1.121		1.139		1.134
	US		0.854		0.910		0.958		0.907		0.866		0.891		0.892		0.878		0.882

(a) Figures exclude shipments made by our Paper Merchants.

(b) Figures represent shipments to external customers on a combined basis, giving effect to the Transaction as if it occured on January 1 of 2006 and 2007. The combined shipments figures are for illustrative information purposes only and are not necessarily indicative of the results had the Transaction actually taken place at the dates indicated and does not purport to be indicative of future results.

(c) Figures are gross of market pulp purchased from other producers on the open market for some of our paper making operations. Market pulp represents the amount of pulp produced in excess of our internal requirement.

(d) Source: Pulp & Paper Week and Random Lengths.

(e) Based on Pulp & Paper Week's Southern Bleached Hardwood Kraft pulp prices for Japan, increased by an average differential of $15/ADMT between Northern and Southern Bleached Hardwood Kraft pulp prices.

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