RESOLUTE FOREST PRODUCTS Q3 2015 RESULTSgowebcasting.http.internapcdn.net/gowebcasting/...RFP Q3...

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


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)


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


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


WOOD PRODUCTS


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


NEWSPRINT



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


(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%)


SPECIALTY PAPERS



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


(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


« 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


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


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$



GAAP, as reported (40)$ (116)$ (1.23)$




Inventory write-downs related to closures 6 6 0.06


Non-operating pension and OPEB credits (2) (2) (0.02)

Write-down of equity method investment - 50 0.53


Income tax effect of special items - (24) (0.25)


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.


Nine months ended September 30, 2015


GAAP, as reported 7$ (43)$ (0.46)$






Non-operating pension and OPEB costs 39 39 0.42






GAAP, as reported (81)$ (168)$ (1.78)$






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




Operating

income (loss)

Net income

(loss)

Operating

income (loss)

Net income

(loss)



(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$



Specialty


Corporate and

other Total

Net income (loss) including noncontrolling interests 5$ 6$ 20$ 24$ (171)$ (116)$


Income tax benefit (1) (1)


EBITDA 22$ 26$ 33$ 32$ (158)$ (45)$



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


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.




Specialty


Corporate and

other Total

Net (loss) income including noncontrolling interests (10)$ 31$ 59$ 10$ (132)$ (42)$


Income tax provision 22 22


EBITDA 38$ 85$ 99$ 36$ (70)$ 188$




Start-up costs 4 4

Non-operating pension and OPEB costs 39 39


Adjusted EBITDA 38$ 85$ 99$ 36$ (23)$ 235$



Specialty


Corporate and

other Total

Net income (loss) including noncontrolling interests 6$ (23)$ 51$ 51$ (251)$ (166)$


Income tax benefit (8) (8)


EBITDA 58$ 41$ 90$ 75$ (219)$ 45$




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


Adjusted EBITDA 58$ 41$ 90$ 75$ (12)$ 252$

APPENDIX C


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)




(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)




(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$


Market pulp (mt) 677 652 648 658 658 631 585 576 597


Product Inventory (thousands of units)

Newsprint (mt) 125 142 123 115 115 105 97 101 101


Market pulp (mt) 100 115 94 93 93 102 88 77 77


2014 (1) 2015 (1)




(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


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


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


Total adjusted EBITDA 37$ 105$ 110$ 104$ 356$ 64$ 89$ 82$ 235$

2015 (1)2014 (1)




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

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