Presented by:Kevin J. Clarke,President & CEOBrian Baarda,VP Finance & CFO
May 7, 2013
March 6, 2013
Joe NemethPresident & Chief Executive Officer
August 2015
Catalyst Paper:A Transformation
Story
The presentation and answers to questions today contain forward-looking statements. Forward-lookingstatements are statements that address or discuss activities, events or developments that we expect or anticipatemay occur in the future and can be identified by the use of words such as “believe”, “expect”, “anticipate”,“intend”, “plan”, “likely”, “predict”, “estimate”, “forecast”, and similar words or phrases or the negative of suchwords or phrases. These forward-looking statements reflect our current beliefs, intentions or expectations basedon certain assumptions and estimates, which could prove to be significantly incorrect, including our ability todevelop, manufacture and sell new products and services that meet the needs of our customers and gaincommercial acceptance, our ability to continue to sell our products and services in the expected quantities at theexpected prices and expected times, our ability to successfully obtain cost savings from our cost reductioninitiatives, our ability to implement business strategies and pursue opportunities, expected cost of goods sold,expected component supply costs and constraints and expected foreign exchange and tax rates.While considered reasonable by management, these forward-looking statements are inherently subject to knownand unknown risks and uncertainties and other factors that could cause actual results or events to differ fromhistorical or anticipated results or events. These risks, uncertainties and other factors include the impact ofgeneral economic conditions in the countries in which we do business, conditions in the capital markets and ourability to obtain financing and refinance existing debt, the degree to which our debt may limit financing andoperating activities, market conditions and demand for our products (including declines in advertising andcirculation), product selling prices, the implementation of trade restrictions in jurisdictions where our products aremarketed, equipment failure and maintenance, fluctuations in foreign exchange or interest rates, raw materialprices and supply (including wood fibre, chemicals and energy), our ability to successfully obtain cost savingsfrom our cost reduction initiatives, the effect of, or change in, environmental and other governmental regulations,potential impacts of claims of aboriginal rights and title, labour relations, the availability of qualified personnel,legal proceedings, the effects of competition from domestic and foreign producers, our ability to implementbusiness strategies and pursue opportunities, the risk of natural disaster and other factors beyond our control.As a result, no assurance can be given that any of the events or results anticipated by such forward-lookingstatements will occur or, if they do occur, what benefit they will have on our operations or financial condition.Readers are cautioned not to place undue reliance on these forward-looking statements. We disclaim anyintention or obligation to update or revise any forward-looking statements, whether as a result of newinformation, future events or otherwise, except as required by law.
Forward-Looking Statement
All numbers are in Canadian dollars2
Non-GAAP Measures
Except where otherwise indicated, the financial information in this presentation isdetermined on the basis of US GAAP.
“Adjusted EBITDA” is a non-GAAP measure, calculated as operating earnings (loss)plus depreciation and amortization and impairment. We focus on adjusted EBITDAas we believe this measure enables comparison of our results between periodswithout regard to debt service, income taxes, capital expenditure requirements,and impairment.
“Adjusted EBITDA before restructuring costs”, “adjusted EBITDA before specificitems”, “net earnings (loss) attributable to the Company before specific items”, and“net earnings(loss) per share attributable to the Company’s common shareholdersbefore specific items” are non-GAAP measures. We use measures excluding specificitems in evaluating our results between periods without regard to specific itemsthat adversely or positively affect our adjusted EBITDA and net earnings (loss).
“Free cash flow” is a non-GAAP measure, calculated as adjusted EBITDA aftercapital expenditures, interest and taxes paid, and adjustments to reflect employeefuture benefit payments. The closest GAAP measure is cash provided by operatingactivities less cash used by investing activities. We report free cash flow as webelieve it is useful for investors and other users to be aware of this measure sothey can better assess our operating performance.
All numbers are in Canadian dollars3
Agenda
1. Catalyst Paper Overview
2. LOOK BACK: Company Transformation Strategy a. Strengthening our Bottom Lineb. Growing our Top Line
3. LOOK FORWARD:
4. Summary - A solid choice for the future
All numbers are in Canadian dollars4
1. Catalyst Paper Overview
All numbers are in Canadian dollars
Major Pulp & Paper Player:
• Over $2 billion in annual sales• 2,800 employees• Production platform that spans North
America• Global customer base
One of Canada’s top corporate citizens:
• Corporate Knights • ECO certified fiber• Carbon friendly
5
2. Look Back: Catalyst Transformation StrategyStrengthening our Bottom Line
Changed Leadership & Organization • New Executive Team: Enhanced capabilities and diverse experiences to
advance opportunities • Streamlined Organization: Eliminated a layer of bureaucracy to ensure key
line functions (Mill Managers, Fibre, Energy, Procurement) are part of the senior management team to drive faster, better decisions, and ultimately, performance improvement
Focused on Operational Excellence• Safety: Show you care and employees will too - 2014 best safety on record • Productivity: Largest single driver of profitability - 2014 saw a step change
in performance improvement (with pulp leading the way)• Costs: Fixed cost spending and variable cost - 2014 included a real focus
and successes with energy cost mitigation
All numbers are in Canadian dollars6
* Includes US paper mills from acquisition date of January 7, 2015
All numbers are in Canadian dollars
2. Look Back: Catalyst Transformation StrategyStrengthening our Bottom Line
10441057 1052
10781056
1129
1034
10681086
1198
814
50
288
800
850
900
950
1000
1050
1100
1150
1200
1250
2011 2012 2013 2014 2015 YTD Jan Feb Mar Apr May Jun
Crofton Pulp Production (tpd)
Monthly Ave Pulp Production (tpd) Oxygen Plant Outage
All numbers are in Canadian dollars
2. Look Back: Catalyst Transformation StrategyStrengthening our Bottom Line
8
Implemented Proven Performance Improvement Processes • Opportunities for Improvement (OFI): Engage the hearts and minds of all
employees. Delivered $16.1 million net benefits (2014) • Capital Planning: Re-engineered to ensure a minimum 33% ROI• Line-by-Line Cost Review: Questioned every line item to drive out costs
Developed a “Revitalization” Core Competency • Goal: Step change performance improvement in struggling operations• Process: Partnership (Change Council) including management, union
leadership and external consultants with a proven track record of success• Progress Report:
• Q4 2014: Launched at Powell River (mill lost $12 Million EBITDA)• First half 2015: Achieved milestone; #1 - EBITDA positive
All numbers are in Canadian dollars
2. Look Back: Catalyst Transformation StrategyStrengthening our Bottom Line
9
Acquired two U.S. operations to expand our North American platform:
Seized a unique purchase opportunity – Transformative to the income statement– Strengthened balance sheet
Acquired solid assets & top talent– Acquired third quartile assets with first quartile potential – Acquired company’s top sales & marketing complement
Positioned to succeed in marketplace – Only P&W paper company with assets in the West, Midwest & East– Superior service model and synergy potential– Full product range and brand preference– Will apply Canadian template for performance improvement with anticipated similar
results starting to manifest in Q3/Q4 2015
All numbers are in Canadian dollars
2. Look Back: Catalyst Transformation StrategyStrengthening our Top Line
10
$1,040 $1,051 $1,078 $1,098 $1,102 $1,109 $1,315
$1,490
Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3' 14 Q4 '14 Q1 '15* Q2 '15*
LTM Revenue($ millions)
$34
$47
$62 $69
$61
$48
$37 $40
Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3' 14 Q4 '14 Q1 '15* Q2 '15*
LTM EBITDA Before Specific Items($ millions)
$(51)
$(21)
$(1)
$10 $1
$(17)
$(37)
$(70)Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3' 14 Q4 '14 Q1 '15* Q2 '15*
LTM Free Cash Flow($ millions)
*Includes free cash flow generated by US paper mills acquired on January 7, 2015
*Includes revenue generated by US paper mills acquired on January 7, 2015 * Includes EBITDA generated by US paper mills acquired on January 7, 2015
All numbers are in Canadian dollars
2. Look Back: Catalyst Transformation StrategyHistorical Financials
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Evolution: Product Migration & Portfolio Optimization
• Product Migration: Rumford Coated Freesheet growth; Biron: Lightweight Roto Gravure Coated Groundwood
• Portfolio Optimization: Freight Synergies (Coated Freesheet between Rumford and Alberni), Lighter basis weights (38 and 40 gsm News), strategic partnerships with large printers
• Green Energy business growth: Third business unit
3. Look Forward:Catalyst Transformation Strategy
All numbers are in Canadian dollars12
New Synergistic Business Opportunities:
• New Product Development: Expect commercialization of first new products Q3/Q4
• Bio-Products: Synergistic new business opportunities
• M&A: Specialty paper growth
3. Look Forward:Catalyst Transformation Strategy
All numbers are in Canadian dollars13
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OUR FUTURE“Build a Value-Added, Specialty Paper Company”
PRINTING & WRITING“Develop a sustainable business in commodity printing and writing markets”Newsprint, Directory, Uncoated Mechanical, Coated Freesheet, Printing &
Writing Specialties
FIBRE & ENERGY“Leverage integrated pulp and energy assets to create a portfolio of niche
commodity products”Pulp, Packaging, Energy
SPECIALTY PAPER“Build a leading specialty paper Company”
Towel, Liner, Food, Industrial
3. Look Forward: Catalyst Transformation Journey
STRENGTHENING OUR BOTTOM LINEKEY
STRATEGYGROWING OUR TOP LINE
4. SUMMARYCatalyst: A Solid Investment Choice
Leadership:Vision, capability, sense of urgency
Business Process Improvements:Combined impact of Canada/U.S. participation in OFI Program
Targeted Investments & Revitalization of Mills: Strategic investments and revitalization programs will deliver
step-change performance improvements
Focus on Operational Excellence:Safety, productivity & cost control
Top & Bottom Line Strategies Will Drive Results
Product Migration & New Business Development Optimize production capabilities (“sweet spot”)Create complementary/synergistic opportunities All numbers are in Canadian dollars15
All numbers are in Canadian dollars
Appendix
17
Catalyst Paper: Manufacturing Platform
1 Total pulp capacity is 395,000 tonnes (30,000 tonnes consumed internally)2 Total pulp capacity is 380,000 tonnes (320,000 consumed internally)
Specialty Printing Papers Newsprint
Market Pulp Total
Mill Location
Number Of Paper
MachinesUncoated
MechanicalCoated
SpecialtiesCoated
FreesheetCoated
Groundwood Directory Newsprint Pulp
Crofton, B.C. 2 – – – 350,000 365,0001 715,000
Port Alberni, B.C. 2 – 224,000 116,000 – – 340,000
Powell River, B.C. 2 348,000 – – – – 348,000
Rumford, ME 3 23,000 119,000 327,000 60,0002 529,000
Biron, WI 2 318,000 318,000
Total capacity (tonnes) 11 348,000 23,000 119,000 869,000 116,000 350,000 425,000 2,250,000
% of total capacity 15% 1% 5% 39% 5% 16% 19% 100%
All numbers are in Canadian dollars18
Catalyst Paper: Products & Applications
Segment Newsprint Market PulpDirectory
CategoryCoated Specialties
Coated Freesheet
Coated Mechanical
Soft-calendered Machine Finished
Brand Names Oxford Orion Vision Electracal Electrabrite Catalyst Marathon Crofton KraftAscent Electraprime Electrabrite Book Marathon Lite Swift River KraftEscanaba ElectrastarDependowebPacificoteCapriElectracote BriteConsowebElectracote
Basis weight (g/m2) 81-104 67-118 38-118 45-52 41.5-74 29-40 38-45 n/aApplications glue-applied
labels, gift wrap, envelopes, packaging, pressure-sensitive face papers
high-end magazines, direct mail, upscale catalogues, commercial print, reports
retail inserts, magazines, catalogues, direct mail, commercial print, brochures, coupons
retail inserts, magazines, catalogues, flyers, direct mail
retail inserts, magazines, catalogues, flyers, direct mail
telephone books, catalogues
newspapers, retail inserts, flyers, supplements, directories
tissue, printing and writing papers, specialty papers products
Total capacity (tonnes) 116,000 350,000 425,000% of total capacity 5% 16% 19%
Coated Specialty Printing Papers
1,011,000 348,00045% 15%
Uncoated Mechanical
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20
MARATHON
CATALYST
ELECTRABRITE
ELECTRASTAR
ELECTRAPRIME
ELECTRACAL
CONSOWEB
CONSOWEB HB
DEPENDOWEB
ESCANANBA
VISION
ORION
OXFORD C1SC1S
CFS
CGW #3
CGW #4
CGW #4.5
CGW #5
SCA
SCB
MACHINE FINISHED SUPERBRITE
MACHINE FINISHED HIGH-BRITE
DIRECTORY
NEWSPRINT
CAPRI
Catalyst Paper: Product Line Up
Joe Nemeth Frank De Costanzo
Jim Bayles
President & CEO
30 + years of experience
in the pulp and paper industry
SVP, Finance & CFO
Extensive international treasury and
finance experience
SVP, Sales & Marketing
38 years of experience
with Catalyst
Len PosyniakSVP, Human Resources
& Corporate Affairs
35 years of human resources and labour relations experience
21
Greg MauleSVP, Operations
25 years experiencein the paper industry
Catalyst Paper: Executive Team
Stew GibsonVP, Sourcing &
Technical Services20 years
experience withCatalyst
