RESOLUTE FOREST
PRODUCTS
Q3 2015 RESULTSRichard Garneau, President & CEO
Jo-Ann Longworth, Senior Vice President & CFO
October 29, 2015
RFP Q3 2015 Results 2
CAUTIONARY STATEMENTS REGARDING
FORWARD-LOOKING INFORMATION
October 29, 2015
Statements in this presentation that are not reported financial results or other historical information of Resolute Forest Products Inc. are “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995. They include, for example, statements relating to our: efforts to continue to reduce costs
and increase revenues and profitability, including our cost-reduction initiatives; business and operating outlook; future pension funding obligations; assessment of
market conditions; prospects, growth strategies and the industry in which we operate; and strategies for achieving our goals generally. Forward-looking statements
may be identified by the use of forward-looking terminology such as the words “should,” “would,” “could,” “will,” “may,” “expect,” “believe,” “anticipate,” “attempt,”
“project” and other terms with similar meaning indicating possible future events or potential impact on our business or Resolute’s shareholders.
The reader is cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance. These statements are
based on management’s current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties that could cause actual
results to differ materially. The potential risks and uncertainties that could cause Resolute’s actual future financial condition, results of operations and performance to
differ materially from those expressed or implied in this presentation include, but are not limited to, developments in alternative media, which are expected to
adversely affect the demand for some of our key products, and the effectiveness of our responses to these developments; the impact of any additional closure costs
and long-lived asset impairment or accelerated depreciation charges; the impact of currency fluctuations on our competitive position, selling prices and
manufacturing costs; the impact of global economic conditions; intense competition in the forest products industry and our ability to compete effectively; negative
publicity, even if unjustified, which could have a negative impact on our brand and the marketability of our products; the highly cyclical nature of the forest products
industry, which could impact the prices of and demand for our products which could result in small or negative profit margins, lower sales volumes and curtailment or
closure of operations; the impact of contributions to our Canadian pension plans, which could be at levels significantly higher than expected; the impact of the terms
of our outstanding indebtedness, which could restrict our current and future operations, particularly our ability to respond to changes and take certain actions; our
ability to maintain adequate capital resources to provide for all of our capital requirements, which are substantial; any inability to successfully implement our
strategies to increase our earnings power; the impact of changes in laws or regulations, including environmental regulations and liabilities and the impact of future
regulation of our Canadian softwood lumber exports to the United States; the imposition of countervailing duties or cash deposit requirements in respect of estimated
countervailing duties, which could require the company to set aside a substantial amount of cash for sales of products subject to duties or cash deposit requirements
and impact the competitive position of the affected operations; any difficulties in obtaining wood fiber at favorable prices, or at all; the impact of changes in the cost
of purchased energy and other raw materials, which could lead to higher manufacturing costs and reduce our margins; the impact of changes in political or
economic conditions in Canada, the United States or other countries in which our products are manufactured or sold; physical and financial risks associated with
climate change; the impact of any labor disputes; extreme weather conditions or natural or man-made disasters, which could disrupt our supply chain and delivery of
our products; cyber security risks; the impact of acquisitions, divestitures or other strategic transactions we may pursue; and the potential risks and uncertainties set
forth under the heading “Risk Factors” in Part 1, Item 1A of Resolute’s annual report on Form 10-K for the year ended December 31, 2014.
All forward-looking statements in this presentation are expressly qualified by the cautionary statements contained or referred to above and in Resolute’s other filings
with the U.S. Securities and Exchange Commission and the Canadian securities regulatory authorities. Resolute disclaims any obligation to publicly update or revise
any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
All figures in $US unless otherwise noted
RFP Q3 2015 Results 3
Q3 2015 OVERVIEW
Adjusted EBITDA : Q3’15 vs Q2’15
Adjusted EBITDA is a non-GAAP financial measure. Refer to Appendices B and C for a definition and reconciliation of non-GAAP financial measures.
October 29, 2015
8982
Q2 2015 FX Salesprice
Volume Costs SG&A Freight Q3 2015
•
162
(3)
12
(25)
8982
Q2 2015 Marketpulp
Woodproducts
Newsprint Specialtypapers
Corporate Q3 2015
(2)4
(9)
13
(13)
RFP Q3 2015 Results 4
Q3 2015 OVERVIEW
Adjusted EBITDA : Q3’15 vs Q3’14
Adjusted EBITDA is a non-GAAP financial measure. Refer to Appendices B and C for a definition and reconciliation of non-GAAP financial measures.
October 29, 2015
110
82
Q3 2014 Marketpulp
Woodproducts
Newsprint Specialtypapers
Corporate Q3 2015
•3
(14)
(16)
1
(2)
110
82
Q3 2014 FX Salesprice
Volume Costs SG&A Freight Q3 2015
0
55
3
(103)
4
0
(24)
37
RFP Q3 2015 Results 5
MARKET PULP
1. EBITDA is a non-GAAP financial measure. Refer to Appendices B and C for a definition and reconciliation of non-GAAP financial measures.
2. The “all-in” delivered cost is the total cost of each ton shipped (cost of sales, depreciation and amortization, distribution costs and selling, general and administrative expenses).
October 29, 2015
$639
$576
$550
$575
$600
$625
$650
$675
$700
$725
$750
Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015
$/m
t
average transaction price "all-in" delivered cost ²
81
100
115
94 93102
8877
Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015
Inventory (000's mt)
(US$mm) Q3 2015 Q2 2015
Sales 230 231
Operating income 22 26
EBITDA1 36 38
Shipments (000’s mt) 360 351
Global chemical pulp demand ↑ 4% through Q3
– China ↑ 13%; Lat. Am ↑ 4%; NA ↑ 1%
– World capacity ↑ 2%
Softwood shipments ↑ 1% through Q3
– NA ↑ 4%; China ↑ 7%; ↓ 4% W. Europe
Hardwood shipments ↑ 7% through Q3
– Non-eucalyptus ↑ 1million mt
RFP average transaction price ↓ $19/mt q/q
RFP shipments ↑ 9k mt from Q2’15
RFP Q3 2015 Results 6
WOOD PRODUCTS
1. EBITDA is a non-GAAP financial measure. Refer to Appendices B and C for a definition and reconciliation of non-GAAP financial measures.
October 29, 2015
123
176154
124 117133
117135
Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015
Inventory (000's mbf)
$314
$294
$275
$300
$325
$350
$375
$400
Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015
$/m
bf
average transaction price "all-in" delivered cost
$275
$300
$325
$350
$375
$400
$425
$450
$475
$500
Random Lengths Composite 2x4 -RL #1-2 KD GL 2x4x8 Stud KD GL
Q3 2015
(US$mm) Q3 2015 Q2 2015
Sales 131 134
Operating income (loss) 9 (4)
EBITDA1 18 5
Shipments (000’s mbf) 421 418
Q3’15 SAAR U.S. housing starts of 1.2mm
– ↑ 13% y/y
NA exports to Asia ↓
– RFP average price ↓ $6/mbf q/q
RFP shipments ↑ 3mmbf in Q3’15
– Includes Atikokan & Ignace ramping up
SLA expired in mid-October
RFP Q3 2015 Results 7
NEWSPRINT
1. EBITDA is a non-GAAP financial measure. Refer to Appendices B and C for a definition and reconciliation of non-GAAP financial measures.
2. The “all-in” delivered cost is the total cost of each ton shipped (cost of sales, depreciation and amortization, distribution costs and selling, general and administrative expenses).
October 29, 2015
99
125
142
123115
10597 101
Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015
Inventory (000's mt)
$498
$517
$475
$500
$525
$550
$575
$600
$625
$650
Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015
$/m
t
average transaction price "all-in" delivered cost ²
(US$mm) Q3 2015 Q2 2015
Sales 258 289
Operating (loss) income (10) 3
EBITDA1 6 19
Shipments (000’s mt) 517 548
NA demand ↓ 12% through Q3
– operating rate of 91%
World demand ↓ 10% through Q3
– Asia ↓ 10%; W. Eur. ↓ 9%; Lat. Am ↓ 12%
– NA exports ↓ 16%
RFP shipments ↓ 31k mt
RFP average transaction price ↓ $30/mt q/q
Global business under pressure
– accelerating pace of structural decline
– low op. rates outside NA & WE (80%)
RFP Q3 2015 Results 8
SPECIALTY PAPERS
1. EBITDA is a non-GAAP financial measure. Refer to Appendices B and C for a definition and reconciliation of non-GAAP financial measures.
2. The “all-in” delivered cost is the total cost of each ton shipped (cost of sales, depreciation and amortization, distribution costs and selling, general and administrative expenses).
October 29, 2015
9699
114
122
83
92
114
102
Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015
Inventory (000's st)
$693
$671
$650
$675
$700
$725
$750
$775
$800
Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015
$/s
t
average transaction price "all-in" delivered cost ²
(US$mm) Q3 2015 Q2 2015
Sales 286 272
Operating income 9 17
EBITDA1 27 36
Shipments (000’s st) 411 388
NA industry demand for UM ↓ 12% through Q3
– SC grades ↓ 9% (~20% of RFP capacity)
– standard grades ↓ 13%
– operating rates ~90%
NA coated demand ↓ 7% through Q3
– ~30% of RFP capacity
– 93% operating rate in Q3’15
RFP shipments ↑ 23k st from Q2’15
– Connect UFS + seasonal uptick
RFP average price ↓ $8/st q/q
Maximize value-generation from paper
Grow lumber and pulp
Integrate pulp into high-quality tissue
RFP Q3 2015 Results
STRATEGY & DIRECTION
9October 29, 2015
Digester towerAtikokan
Model NTT machine
P&L
Selected financial information
Q3 2015 vs Q2 2015 vs Q3 2014
Net income1
$14mm+$7mm -$1mm
Sales $905mm -2% -17%
EPS1 $0.15 $0.07 $0.16
Adjusted EBITDA2
$82mm-8% -25%
1. Excluding special items. Refer to Appendices B and C for a definition and reconciliation of non-GAAP financial measures.
2. Adjusted EBITDA is a non-GAAP financial measure. Refer to Appendices B and C for a definition and reconciliation of non-GAAP financial measures.
3. Other postretirement benefit.
Special items affecting net income (pre-tax)
Q3 2015
- $13mm non-operating pension and OPEB3 costs
- $5mm foreign currency translation loss
Selected financial information
10
Shipments
October 29, 2015 RFP Q3 2015 Results
360
421
517
411
300
350
400
450
500
550
600
650
Market pulp 000's mt Wood products 000's mbf
Newsprint 000's mt Specialty papers 000's st
Calhoun (+215k mt)Fort Frances (-100k mt)
Laurentide(-190k mt)
Iroquois Falls, Baie-Comeau PM1, Clermont PM5: (-465k mt)
Ignace & Thunder Bay pellet plant
Ignace begins ramp-up
Atikokan beginsramp-up
RFP Q3 2015 Results 11
« All-in » delivered cost EBITDA per unit
EBITDA improvement from cogen
(in $US millions)
Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15
10 13 14 8 8 12 13 10
October 29, 2015
$576
$294
$517
$671
$200
$300
$400
$500
$600
$700
$800
Market pulp $/mt Wood products $/mbf
Newsprint $/mt Specialty papers $/st
$27/st
$33/st
$40/mt
Q1 cold impact
$100
$43
$12
$66
($20)
$0
$20
$40
$60
$80
$100
$120
Market pulp $/mt Wood products $/mbf
Newsprint $/mt Specialty papers $/st
Q1 cold impact
RFP Q3 2015 Results 12
LIQUIDITY AND CASH FLOWQ3 2015
(US$mm)vs Q2 2015 vs Q3 2014
Cash
23568 30
Working capital
66615 38
Net debt
36268 29
Interest
92 3
• Repurchased 2.3mm shares in Q3
(2.5% of o/s) for $22 mm
• Capex ↑ for digester and tissue
• Pension contributions ↑ $21 mm
• Q3 net cash from ops nil
– down from $61 mm in Q2
• Liquidity remains strong = $683
mm
• Forecast 2015 capex ~$240 mm
• 2016 tissue capex ~$190 mm
Available liquidity (US$mm)
2015 2014 2013
Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2
Total debt 597 597 597 597 598 598 598 599 604 604
Cash on hand 235 303 324 337 265 263 240 322 271 248
Available under ABL credit facility 448 468 464 521 572 567 548 561 566 467
October 29, 2015
RFP Q3 2015 Results 13
PENSION
(in $US millions) Q3’15 2014 2013
net pension and OPEB liabilities 1,369 1,631 1,301
U.S. GAAP discount rate at 12/312 N/A 4.0% 4.9%
(in $US millions) 2015E Q3’15 2014 2013
pension contributions3 145 55 164 155
OPEB payments 15 4 19 22
pension and OPEB expense 81 20 26 60
1. Other postretirement benefit
2. Pension plans
3. Includes defined benefit, defined contribution and target benefit plans
• $55mm of Q3 pension contributions, ↑ $21 mm from Q2
– $15mm in contributions to U.S. plans for Q3 and Q4 (timing)
– Additional solvency contributions of $14 mm for machine closures under the special
funding relief measures
• Expect contributions to drop to $29 mm in Q4
• ↑ in pension and OPEB1 expense of $55 mm for 2015
– no impact on funding requirement
– relates to amortization of $330 mm increase in 2014 liability
October 29, 2015
APPENDIX A
CHANGE TO PRESENTATION OF
PENSION & OPEB COMPONENTS
15October 29, 2015 RFP Q3 2015 Results
2014 Q1’15 Q2’15 Q3’15
(in $US millions) Pre Post Pre PostW/o
changeAs
shownW/o
changeAs
shown
Market pulp 119 116 24 25 36 38 35 36
Wood products 102 102 13 13 4 5 18 18
Newsprint 92 89 10 13 17 19 3 6
Specialty papers 65 63 18 22 33 36 23 27
Corporate and other (12) (14) (15) (9) (13) (9) (10) (5)
Adjusted EBITDA 366 356 50 64 77 89 69 82
Note:
1. Adjusted EBITDA excludes net financing and remeasurement components of pension and OPEB costs, which
consist of the effects of interest cost, expected return on assets and amortization of actuarial losses. These
components are sometimes referred to as “non-operating” components of pension and OPEB costs.
2. Adjusted EBITDA includes “operating” components of pension and OPEB costs, which consist of current service
costs and the amortization of prior service credits.
3. The “non-operating” components of pension and OPEB costs are now allocated to “corporate and other” in our
segment presentation of operating income.
21
APPENDIX B
20132005
The boreal forest regenerates quickly …
Preparing the soil for planting
6 years later….
RFP Q3 2015 Results 17October 29, 2015
Three months ended September 30, 2015
(unaudited, in millions, except per share amounts) EPS
GAAP, as reported 6$ (6)$ (0.07)$
Adjustments for special items:
Foreign currency translation loss - 5 0.06
Closure costs, impairment and other related charges 2 2 0.02
Start-up costs 2 2 0.02
Non-operating pension and OPEB costs 13 13 0.14
Other income, net - (4) (0.04)
Income tax effect of special items - 2 0.02
GAAP, as adjusted for special items 23$ 14$ 0.15$
Three months ended September 30, 2014
(unaudited, in millions, except per share amounts) EPS
GAAP, as reported (40)$ (116)$ (1.23)$
Adjustments for special items:
Foreign currency translation loss - 17 0.18
Closure costs, impairment and other related charges 85 85 0.90
Inventory write-downs related to closures 6 6 0.06
Start-up costs 1 1 0.01
Non-operating pension and OPEB credits (2) (2) (0.02)
Write-down of equity method investment - 50 0.53
Other income, net - (2) (0.02)
Income tax effect of special items - (24) (0.25)
GAAP, as adjusted for special items 50$ 15$ 0.16$
RESOLUTE FOREST PRODUCTS INC.
STATEMENTS OF OPERATING INCOME AND NET INCOME ADJUSTED FOR SPECIAL ITEMS
Net income
(loss)
Operating
income (loss)
Operating
income (loss)
Net income
(loss)
A reconciliation of our operating income, net income and net income per share reported before special items is presented in the
tables below. See Note 3 to the Unaudited Consolidated Financial Statement Information regarding our use of non-GAAP measures
contained in our October 29, 2015, press release available on our website.
18October 29, 2015 RFP Q3 2015 Results
Nine months ended September 30, 2015
(unaudited, in millions, except per share amounts) EPS
GAAP, as reported 7$ (43)$ (0.46)$
Adjustments for special items:
Foreign currency translation loss - 2 0.02
Closure costs, impairment and other related charges 8 8 0.09
Inventory write-downs related to closures 1 1 0.01
Start-up costs 4 4 0.04
Non-operating pension and OPEB costs 39 39 0.42
Other income, net - (7) (0.08)
Income tax effect of special items - (2) (0.02)
GAAP, as adjusted for special items 59$ 2$ 0.02$
Nine months ended September 30, 2014
(unaudited, in millions, except per share amounts) EPS
GAAP, as reported (81)$ (168)$ (1.78)$
Adjustments for special items:
Foreign currency translation loss - 14 0.15
Closure costs, impairment and other related charges 147 147 1.55
Inventory write-downs related to closures 10 10 0.11
Start-up costs 2 2 0.02
Net gain on disposition of assets (2) (2) (0.02)
Non-operating pension and OPEB credits (8) (8) (0.09)
Write-down of equity method investment - 50 0.53
Other income, net - (6) (0.06)
Income tax effect of special items - (35) (0.37)
GAAP, as adjusted for special items 68$ 4$ 0.04$
Operating
income (loss)
Net income
(loss)
Operating
income (loss)
Net income
(loss)
RFP Q3 2015 Results 19October 29, 2015
Three months ended September 30, 2015
(unaudited, in millions) Newsprint
Specialty
papers Market pulp Wood products
Corporate and
other Total
Net (loss) income including noncontrolling interests (10)$ 9$ 22$ 9$ (36)$ (6)$
Interest expense 9 9
Income tax provision 2 2
Depreciation and amortization 16 18 14 9 2 59
EBITDA 6$ 27$ 36$ 18$ (23)$ 64$
Foreign currency translation loss 5 5
Closure costs, impairment and other related charges 2 2
Start-up costs 2 2
Non-operating pension and OPEB costs 13 13
Other income, net (4) (4)
Adjusted EBITDA 6$ 27$ 36$ 18$ (5)$ 82$
Three months ended September 30, 2014
(unaudited, in millions) Newsprint
Specialty
papers Market pulp Wood products
Corporate and
other Total
Net income (loss) including noncontrolling interests 5$ 6$ 20$ 24$ (171)$ (116)$
Interest expense 12 12
Income tax benefit (1) (1)
Depreciation and amortization 17 20 13 8 2 60
EBITDA 22$ 26$ 33$ 32$ (158)$ (45)$
Foreign currency translation loss 17 17
Closure costs, impairment and other related charges 85 85
Inventory write-downs related to closures 6 6
Start-up costs 1 1
Non-operating pension and OPEB credits (2) (2)
Write-down of equity method investment 50 50
Other income, net (2) (2)
Adjusted EBITDA 22$ 26$ 33$ 32$ (3)$ 110$
RESOLUTE FOREST PRODUCTS INC.
STATEMENTS OF EBITDA AND ADJUSTED EBITDA
A reconciliation of our net income including noncontrolling interests to EBITDA and Adjusted EBITDA is presented in the tables below. See Note 3 to the Unaudited
Consolidated Financial Statement Information regarding our use of the non-GAAP measures EBITDA and Adjusted EBITDA contained in our October 29, 2015, press
release available on our website.
20October 29, 2015 RFP Q3 2015 Results
Nine months ended September 30, 2015
(unaudited, in millions) Newsprint
Specialty
papers Market pulp Wood products
Corporate and
other Total
Net (loss) income including noncontrolling interests (10)$ 31$ 59$ 10$ (132)$ (42)$
Interest expense 32 32
Income tax provision 22 22
Depreciation and amortization 48 54 40 26 8 176
EBITDA 38$ 85$ 99$ 36$ (70)$ 188$
Foreign currency translation loss 2 2
Closure costs, impairment and other related charges 8 8
Inventory write-downs related to closures 1 1
Start-up costs 4 4
Non-operating pension and OPEB costs 39 39
Other income, net (7) (7)
Adjusted EBITDA 38$ 85$ 99$ 36$ (23)$ 235$
Nine months ended September 30, 2014
(unaudited, in millions) Newsprint
Specialty
papers Market pulp Wood products
Corporate and
other Total
Net income (loss) including noncontrolling interests 6$ (23)$ 51$ 51$ (251)$ (166)$
Interest expense 35 35
Income tax benefit (8) (8)
Depreciation and amortization 52 64 39 24 5 184
EBITDA 58$ 41$ 90$ 75$ (219)$ 45$
Foreign currency translation loss 14 14
Closure costs, impairment and other related charges 147 147
Inventory write-downs related to closures 10 10
Start-up costs 2 2
Net gain on disposition of assets (2) (2)
Non-operating pension and OPEB credits (8) (8)
Write-down of equity method investment 50 50
Other income, net (6) (6)
Adjusted EBITDA 58$ 41$ 90$ 75$ (12)$ 252$
APPENDIX C
RFP Q3 2015 Results 22October 29, 2015
Resolute Forest Products Inc.
Financial and Operating Statistics (Page 1 of 5)
Variance
(in millions, except per share amounts and otherw ise indicated) First Second Third Fourth Total First Second Third Fourth Total checks
Income Statement Data
Total sales 1,016$ 1,091$ 1,096$ 1,055$ 4,258$ 920$ 926$ 905$ 2,751$
Operating income (loss) (33) (8) (40) (93) (174) (15) 16 6 7
Interest expense (12) (11) (12) (12) (47) (12) (11) (9) (32)
Other income (expense), net (13) 20 (65) (25) (83) 5 1 (1) 5
Net income (loss) including noncontrolling interests (50) - (116) (108) (274) (32) (4) (6) (42)
Net income (loss) attributable to noncontrolling interests - 2 - 1 3 1 - - 1
Net income (loss) attributable to Resolute Forest Products Inc. (50) (2) (116) (109) (277) (33) (4) (6) (43)
Diluted net income (loss) per share attributable to Resolute Forest Products Inc. common shareholders (0.53)$ (0.02)$ (1.23)$ (1.15)$ (2.93)$ (0.35)$ (0.04)$ (0.07)$ (0.46)$
Dividends declared per common share -$ -$ -$ -$ -$ -$ -$ -$ -$
Average diluted shares outstanding (in thousands) 94,562 94,576 94,590 94,683 94,606 94,883 94,095 91,087 93,343
Ending shares outstanding (in thousands) 94,589 94,590 94,590 94,786 94,786 94,801 91,606 89,306 89,306
Financial Position
Cash and cash equivalents 240$ 263$ 265$ 337$ 337$ 324$ 303$ 235$ 235$
Working capital (2) 705 695 704 679 679 693 681 666 666
Fixed assets, net 2,256 2,184 2,098 1,985 1,985 1,956 1,944 1,932 1,932
Total assets 5,257 5,247 5,036 4,921 4,921 4,746 4,689 4,548 4,548
Current portion of long-term debt 1 1 1 1 1 1 1 1 1
Long-term debt, net of current portion 597 597 597 596 596 596 596 596 596
Net debt (3) 358 335 333 260 260 273 294 362 362
Total Resolute Forest Products Inc. shareholders' equity 2,801 2,828 2,680 2,106 2,106 2,088 2,061 2,046 2,046
Noncontrolling interests 12 14 14 11 11 12 12 12 12
Total equity 2,813 2,842 2,694 2,117 2,117 2,100 2,073 2,058 2,058
Cash Flow Information
Cash flows provided by (used in) operations (41)$ 63$ 58$ 106$ 186$ 29$ 61$ -$ 90$
Cash invested in fixed assets (36) (46) (60) (51) (193) (40) (39) (44) (123)
Dispositions of assets - 2 4 4 10 - - - -
Cash flows provided by (used in) investing activities (34) (46) (53) (28) (161) (40) (43) (45) (128)
Purchases of treasury stock - - - - - - (37) (22) (59)
Payments of debt (1) - - (1) (2) - - - -
Cash flows provided by (used in) financing activities (1) (1) - (5) (7) - (40) (22) (62)
2014 (1) 2015 (1)
RFP Q3 2015 Results 23October 29, 2015
Resolute Forest Products Inc.
Financial and Operating Statistics (Page 2 of 5)
(in millions, except per unit items and otherw ise indicated) First Second Third Fourth Total First Second Third Fourth Total
Sales
Newsprint 346$ 364$ 346$ 346$ 1,402$ 291$ 289$ 258$ 838$
Specialty papers 301 325 329 317 1,272 272 272 286 830
Market pulp 234 241 255 244 974 218 231 230 679
Wood products 135 161 166 148 610 139 134 131 404
Total sales 1,016$ 1,091$ 1,096$ 1,055$ 4,258$ 920$ 926$ 905$ 2,751$
Shipments to 3rd Parties (thousands of units)
Newsprint (mt) 579 611 584 597 2,371 534 548 517 1,599
Specialty papers (st) 420 452 463 443 1,778 382 388 411 1,181
Market pulp (mt) 335 334 363 351 1,383 328 351 360 1,039
Wood products (mbf) 353 420 422 390 1,585 393 418 421 1,232
Average Transaction Price per Unit
Newsprint (mt) 598$ 596$ 591$ 579$ 591$ 545$ 528$ 498$ 524$
Specialty papers (st) 716 718 712 715 715 711 701 693 702
Market pulp (mt) 696 725 701 695 704 666 658 639 654
Wood products (mbf) 382 384 394 378 385 353 320 314 328
2014 (1) 2015 (1)
RFP Q3 2015 Results 24October 29, 2015
Resolute Forest Products Inc.
Financial and Operating Statistics (Page 3 of 5)
(in millions, except per unit items and otherw ise indicated) First Second Third Fourth Total First Second Third Fourth Total
Operating Income (Loss)
Newsprint (16)$ 17$ 5$ 14$ 20$ (3)$ 3$ (10)$ (10)$
Specialty papers (25) (4) 6 4 (19) 5 17 9 31
Market pulp 7 24 20 12 63 11 26 22 59
Wood products 12 15 24 18 69 5 (4) 9 10
Corporate and other (11) (60) (95) (141) (307) (33) (26) (24) (83)
Total operating income (loss) (33)$ (8)$ (40)$ (93)$ (174)$ (15)$ 16$ 6$ 7$
Selling, General and Administrative Expenses
Newsprint 12$ 14$ 14$ 13$ 53$ 11$ 12$ 9$ 32$
Specialty papers 9 9 10 9 37 8 7 8 23
Market pulp 8 9 9 9 35 8 8 7 23
Wood products 5 6 6 6 23 6 6 5 17
Corporate and other 2 3 2 - 7 8 7 5 20
Total selling, general and administrative expenses 36$ 41$ 41$ 37$ 155$ 41$ 40$ 34$ 115$
Operating Cost per Unit
Newsprint (mt) 625$ 570$ 582$ 556$ 583$ 552$ 521$ 517$ 530$
Specialty papers (st) 776 725 700 706 726 698 658 671 675
Market pulp (mt) 677 652 648 658 658 631 585 576 597
Wood products (mbf) 347 350 337 332 341 342 327 294 320
Product Inventory (thousands of units)
Newsprint (mt) 125 142 123 115 115 105 97 101 101
Specialty papers (st) 99 114 122 83 83 92 114 102 102
Market pulp (mt) 100 115 94 93 93 102 88 77 77
Wood products (mbf) 176 154 124 117 117 133 117 135 135
2014 (1) 2015 (1)
RFP Q3 2015 Results 25October 29, 2015
Resolute Forest Products Inc.
Financial and Operating Statistics (Page 4 of 5)
(in millions) First Second Third Fourth Total First Second Third Fourth Total
Net Income (Loss) Including Noncontrolling Interests
Newsprint (16)$ 17$ 5$ 14$ 20$ (3)$ 3$ (10)$ (10)$
Specialty papers (25) (4) 6 4 (19) 5 17 9 31
Market pulp 7 24 20 12 63 11 26 22 59
Wood products 12 15 24 18 69 5 (4) 9 10
Corporate and other (28) (52) (171) (156) (407) (50) (46) (36) (132)
Total net income (loss) including noncontrolling interests (50)$ -$ (116)$ (108)$ (274)$ (32)$ (4)$ (6)$ (42)$
Interest Expense 12$ 11$ 12$ 12$ 47$ 12$ 11$ 9$ 32$
Income Tax Provision (Benefit) (8)$ 1$ (1)$ (22)$ (30)$ 10$ 10$ 2$ 22$
Depreciation and Amortization
Newsprint 18$ 17$ 17$ 17$ 69$ 16$ 16$ 16$ 48$
Specialty papers 22 22 20 18 82 17 19 18 54
Market pulp 13 13 13 14 53 14 12 14 40
Wood products 8 8 8 9 33 8 9 9 26
Corporate and other 1 2 2 1 6 2 4 2 8
Total depreciation and amortization 62$ 62$ 60$ 59$ 243$ 57$ 60$ 59$ 176$
EBITDA (4)
Newsprint 2$ 34$ 22$ 31$ 89$ 13$ 19$ 6$ 38$
Specialty papers (3) 18 26 22 63 22 36 27 85
Market pulp 20 37 33 26 116 25 38 36 99
Wood products 20 23 32 27 102 13 5 18 36
Corporate and other (23) (38) (158) (165) (384) (26) (21) (23) (70)
Total EBITDA 16$ 74$ (45)$ (59)$ (14)$ 47$ 77$ 64$ 188$
Special Items (4)
Foreign currency translation (gain) loss 14$ (17)$ 17$ 18$ 32$ (2)$ (1)$ 5$ 2$
Closure costs, impairment and other related charges 10 52 85 131 278 6 - 2 8
Inventory write-downs related to closures 1 3 6 7 17 1 - - 1
Net (gain) loss on disposition of assets - (2) - - (2) - - - -
Non-operating pension and OPEB costs (credits) (3) (3) (2) (2) (10) 14 12 13 39
Write-down of equity method investment - - 50 11 61 - - - -
Start-up costs - 1 1 2 4 1 1 2 4
Other (income) expense, net (1) (3) (2) (4) (10) (3) - (4) (7)
Total special items 21$ 31$ 155$ 163$ 370$ 17$ 12$ 18$ 47$
Adjusted EBITDA (4)
Newsprint 2$ 34$ 22$ 31$ 89$ 13$ 19$ 6$ 38$
Specialty papers (3) 18 26 22 63 22 36 27 85
Market pulp 20 37 33 26 116 25 38 36 99
Wood products 20 23 32 27 102 13 5 18 36
Corporate and other (2) (7) (3) (2) (14) (9) (9) (5) (23)
Total adjusted EBITDA 37$ 105$ 110$ 104$ 356$ 64$ 89$ 82$ 235$
2015 (1)2014 (1)
RFP Q3 2015 Results 26October 29, 2015
Resolute Forest Products Inc.
Financial and Operating Statistics (Page 5 of 5)
Notes
Adjusted EBITDA means EBITDA, excluding special items, such as foreign currency translation gains and losses, closure costs, impairment and other related charges, inventory write-downs related to closures, start-up costs, gains and losses on
disposition of assets, non-operating pension and OPEB costs and credits, write-down of equity method investment and other charges or credits. Special items are allocated to corporate and other.
We believe that using these non-GAAP measures is useful because they are consistent with the indicators management uses internally to measure the Company’s performance, and it allows the reader to more easily compare our ongoing operations
and financial performance from period to period. EBITDA and adjusted EBITDA are internal measures, and therefore may not be comparable to those of other companies. These non-GAAP measures should not be viewed as substitutes to financial
measures determined under GAAP in our consolidated statements of operations in our filings with the SEC.
1 In the second quarter of 2015, we changed the presentation of our pension and other postretirement benefit (or “OPEB”) costs to isolate the net financing and remeasurement components previously allocated to the reportable segments and reallocate
them to corporate and other in the segment presentation of operating income. Current service costs and amortization of prior service credits will continue to be allocated to the reportable segments.
We now also treat net financing and remeasurement components of pension and OPEB costs and credits as a special item to be adjusted for purposes of establishing our non-GAAP performance measures, listed below. The change was applied
retroactively by adjusting comparative consolidated financial statement information.
We believe that isolating the net financing and remeasurement components of pension and OPEB costs and credits, which are non-operating in nature, outside the reportable segments and removing them from non-GAAP performance measures better
reflects our ongoing operating results and improves their comparability between periods. This approach is consistent with the indicators management uses internally to measure performance and also consistent with a number of industry peers.
2 We define working capital as current assets less current liabilities excluding cash and cash equivalents and debt.
3 We define net debt as total debt less cash and cash equivalents.
4 EBITDA by reportable segment is calculated as net income (loss) including noncontrolling interests from the consolidated statements of operations, allocated to each of our reportable segments (newsprint, specialty papers, market pulp and wood
products) in accordance with FASB ASC 290, “Segment Reporting,” adjusted for depreciation and amortization. EBITDA for corporate and other is calculated as net income (loss) including noncontrolling interests from the consolidated statements of
operations, after the allocation to reportable segments, adjusted for interest expense, income taxes, and depreciation and amortization.
RESOLUTE FOREST
PRODUCTS
Q3 2015 RESULTSRichard Garneau, President & CEO
Jo-Ann Longworth, Senior Vice President & CFO
October 29, 2015