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RESOLUTE FOREST
PRODUCTS
Q4 2016 RESULTSRICHARD GARNEAU, PRESIDENT & CEO
JO-ANN LONGWORTH, SVP & CFO
February 2, 2017
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 toour: efforts and initiatives to reduce costs and increase revenues and profitability; business and operating outlook; future financial results, includingEBITDA; assessment of market conditions; growth and diversification strategies and prospects, and the growth potential of the company and theindustry in which it operates; liquidity; future cash flows, including as a result of the re-organization of our pension funding obligations; andstrategies for achieving our goals generally. Forward-looking statements may be identified by the use of forward-looking terminology such as thewords “should,” “would,” “could,” “will,” “may,” “expect,” “believe,” “anticipate,” “attempt,” “project” and other terms with similar meaning indicatingpossible future events or potential impact on our business or our shareholders.
The reader is cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance. Thesestatements are based on management's current assumptions, beliefs and expectations, all of which involve a number of business risks anduncertainties that could cause actual results to differ materially. The potential risks and uncertainties that could cause the company's actual futurefinancial condition, results of operations and performance to differ materially from those expressed or implied in this presentation include, but arenot limited to, the impact of: developments in non-print media, transmission and storage technologies, and the effectiveness of our responses tothese developments; any additional closure costs and long-lived asset or goodwill impairment or accelerated depreciation charges; currencyfluctuations; global economic conditions; intense competition in the forest products industry; negative publicity, even if unjustified; the highly cyclicalnature of the forest products industry; contributions to our Canadian pension plans at levels higher than expected; the terms of our outstandingindebtedness; our ability to maintain adequate capital resources to provide for all of our substantial capital requirements; any inability to successfullyimplement our strategies to increase our earnings power; the possible failure to successfully integrate acquired businesses with ours or to realizethe expected benefits of acquisitions, such as our acquisition of Atlas, or divestitures or other strategic transactions or projects we have pursued ormay pursue, including our Calhoun tissue project; any failure to comply with environmental or other laws or regulations, even if inadvertent;unanticipated outcomes of legal proceedings or disputes in which we are involved; future regulation of our Canadian exports to the United States,including softwood lumber and supercalendered paper; our exports from one country to another country becoming or remaining subject tocountervailing duties, cash deposit requirements, border taxes, quotas or other trade conditions or remedies, which could require us to set aside orpay a substantial amount of cash and impact the competitive position of the affected operations; any difficulties in obtaining wood fiber at favorableprices, or at all; changes in the cost of purchased energy and other raw materials; any labor disputes; uncertainty or changes in political oreconomic conditions in Canada, the United States or other countries in which our products are manufactured or sold; physical and financial risksassociated with climate change; any additional environmental or health and safety liabilities; disruptions to our supply chain, operations or thedelivery of our products; losses that are not covered by insurance; the actions of holders of a significant percentage of our common stock; extremeweather conditions or natural or man-made disasters; cyber security risks; and the potential risks and uncertainties described under the heading"Risk Factors" in Part I, Item 1A of the company's annual report on Form 10-K and other filings with the U.S. Securities and Exchange Commission.
All forward-looking statements in this presentation are expressly qualified by the cautionary statements contained or referred to above and in thecompany's other filings with the U.S. Securities and Exchange Commission and the Canadian securities regulatory authorities. The companydisclaims any obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events orotherwise, except as required by law.
All figures in US$ unless otherwise noted
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
2RFP Q4 2016 Results – February 2, 2017
• Q4 GAAP net loss of $45 million or $0.50 per share
• 2016 GAAP net loss of $81 million or $0.90 per share
• Q4 adjusted EBITDA of $67 million
• 2016 adjusted EBITDA of $279 million
• Liquidity at $468 million
2016 FINANCIAL HIGHLIGHTS
3
Adjusted EBITDA and Liquidity are non-GAAP financial measures. Refer to Appendices A and B for a definition and reconciliation of non-GAAP financial measures.
RFP Q4 2016 Results – February 2, 2017
2016 OVERVIEW
4
276 279
2015 FX Salesprice
Volume Tissue Costs SG&A Freight 2016
74
14
(104)
9
(7)
22
(5)
276 279
2015 Marketpulp
Tissue Woodproducts
Newsprint Specialtypapers
Corporate 2016
•
(49)
61 18
(30)
8
(5)
• $100mm EBITDA from wood products in 2016; ↑ 156% from 2015
• Lumber shipments of 1,844 mmbf; highest level since 2011
• Lower prices in pulp reduced EBITDA by $60M in 2016; price increases announced in 2017
Adjusted EBITDA is a non-GAAP financial measure. Refer to Appendices A and B for a definition and reconciliation of non-GAAP financial measures.
Adjusted EBITDA : 2016 vs 2015
RFP Q4 2016 Results – February 2, 2017
Q4 2016 OVERVIEW
5
Adjusted EBITDA : Q4’16 vs Q3’16
68 67
Q3 2016 FX Salesprice
Volume Costs SG&A Freight Q4 2016
23
(4)
4
(15)
968 67
Q3 2016 Marketpulp
Tissue Woodproducts
Newsprint Specialtypapers
Corporate Q4 2016
(2)
(18)
1063
Adjusted EBITDA is a non-GAAP financial measure. Refer to Appendices A and B for a definition and reconciliation of non-GAAP financial measures.
RFP Q4 2016 Results – February 2, 2017
Q4 2016 OVERVIEW
6
Adjusted EBITDA : Q4’16 vs Q4’15
Adjusted EBITDA is a non-GAAP financial measure. Refer to Appendices A and B for a definition and reconciliation of non-GAAP financial measures.
41
67
Q4 2015 FX Salesprice
Volume Tissue Costs SG&A Freight Q4 2016
7
10 26
1 41
67
Q4 2015 Marketpulp
Tissue Woodproducts
Newsprint Specialtypapers
Corporate Q4 2016
(15)
22
16 3
RFP Q4 2016 Results – February 2, 2017
MARKET PULP
7
1. EBITDA is a non-GAAP financial measure. Refer to Appendices A and B for a definition and reconciliation of non-GAAP financial measures.
2. The “all-in” delivered cost is the total cost of each ton shipped (cost of sales, depreciation and amortization, distribution costs and selling, general and administrative expenses).
(US$mm) Q4 2016 Q3 2016 2016 2015
Sales 217 198 836 889
Operating income 6 5 43 76
EBITDA1 15 15 80 129
Shipments (000’s mt) 368 323 1,388 1,375
592575
500
525
550
575
600
625
650
675
700
725
750
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
$/m
t
average transaction price "all-in" delivered cost ²
102
88
77
9094
83
10091
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Inventory (000's mt)
Global chemical pulp demand ↑ 5.6% in
Q4 vs. 2015– China ↑ 21.1%; North America: ↓ 2.5%
Western Europe ↓ 3.8%
– World capacity ↑ 700k mt
– 2016 world demand ↑ 2.5% for softwood,
7.3% for hardwood
Q4 Transaction price ↓ $18/mt vs. Q3
Q4 Delivered cost ↓ $17/mt vs. Q3
Q4 Shipments ↑ 45k mt vs. Q3
RFP Q4 2016 Results – February 2, 2017
TISSUE
8
1. EBITDA is a non-GAAP financial measure. Refer to Appendices A and B for a definition and reconciliation of non-GAAP financial measures.
(US$mm) Q4 2016 Q3 2016 2016
Sales 19 23 89
Operating income (loss) 1 (5) (10)
EBITDA1 0 (3) (5)
Shipments (000’s st) 12 15 58
1,521
1,367
1,000
1,200
1,400
1,600
1,800
2,000
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
$/s
t
average transaction price "all-in" delivered cost
(200)
(150)
(100)
(50)
0
50
100
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016$
/st
EBITDA / unit
US consumption ↑ 4.2% in Q4 vs. 2015
– Away-from-home ↑ 3.4%
– At-home ↑ 1.6%
Q4 Transaction price ↓ $28/st vs. Q3
Q4 Delivered cost ↓ $511/st vs. Q3
Calhoun project $35 million capex in Q4
6 53 4 5
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Inventory (000's st)
RFP Q4 2016 Results – February 2, 2017
WOOD PRODUCTS
9
1. EBITDA is a non-GAAP financial measure. Refer to Appendices A and B for a definition and reconciliation of non-GAAP financial measures.
(US$mm) Q4 2016 Q3 2016 2016 2015
Sales 164 168 596 536
Operating income 17 36 69 2
EBITDA1 25 43 100 39
Shipments (mmbf) 503 506 1,844 1,678
Q4 seasonally adjusted US single family
housing starts ↑ 9.5% vs. Q3 Total housing starts ↑ 6.2%
Q4 Transaction price ↓ $4/mbf vs. Q3
Q4 Delivered cost ↑ $29/mbf vs. Q3
Q4 Shipments of 503 mmbf
327
292
250
275
300
325
350
375
400
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
$/m
bf
average transaction price "all-in" delivered cost
133117
135 130 126 129 121 124
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Inventory (000's mbf)
$250
$275
$300
$325
$350
$375
$400
$425
$450
$475
$500
Random Lengths Composite 2x4 -L/A #1-2 KD GL 2x4x8 Stud KD GL
Q4 2016
RFP Q4 2016 Results – February 2, 2017
NEWSPRINT
10
1. EBITDA is a non-GAAP financial measure. Refer to Appendices A and B for a definition and reconciliation of non-GAAP financial measures.
(US$mm) Q4 2016 Q3 2016 2016 2015
Sales 253 242 1,009 1,105
Operating income (loss) 1 (8) (15) (23)
EBITDA1 19 9 59 41
Shipments (000’s mt) 493 470 1,992 2,150
10597 101
91
10496
105 105
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Inventory (000's mt)
512
475
500
525
550
575
600
625
650
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
$/m
t
average transaction price "all-in" delivered cost
North American demand ↓ 6.7% vs. 2015– Production ↓ 6.3%
North American operating rate of 92% in
2016
World demand ↓ 5.1% November-YTD vs.
2015
Q4 Shipments at 493k mt
Q4 Delivered cost ↓ $19/mt vs. Q3
RFP Q4 2016 Results – February 2, 2017
SPECIALTY PAPERS
11
1. EBITDA is a non-GAAP financial measure. Refer to Appendices A and B for a definition and reconciliation of non-GAAP financial measures.
92
114
102
88
78
88
75
92
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Inventory (000's st)
665
654
600
625
650
675
700
725
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
$/s
t
average transaction price "all-in" delivered cost
North American demand ↓ 6.2% in uncoated
mechanical grades vs. 2015– SC ↓ 9.6%
– North American operating rates at 90%
Coated mechanical demand ↓ 6.2% vs.
2015 – North American production ↓ 8.4%
– North American operating rates at 93%
Q4 Transaction price ↓ $7/st vs. Q3
Q4 Delivered cost ↓ $23/st vs. Q3
(US$mm) Q4 2016 Q3 2016 2016 2015
Sales 236 257 1,015 1,104
Operating income (loss) 4 (2) 25 29
EBITDA1 15 9 70 100
Shipments (000’s st) 355 384 1,514 1,580
RFP Q4 2016 Results – February 2, 2017
P&L
12
Selected financial information2016 vs 2015 Q4 2016 vs Q3 2016 vs Q4 2015
Net income1 $4mm +$28mm Net loss1 $3mm -$22mm +$23mm
Sales $3,545mm -3% Sales $889mm – -1%
EPS1 $0.04 +$0.30 EPS1 ($0.03) -$0.24 +$0.26
Adjusted EBITDA2
$279mm+1%
Adjusted EBITDA2
$67mm-1% +63%
Special items affecting net income (pre-tax)2016 Q4 2016
- $62mm for impairment and closure costs
- $24mm non-op. pension and OPEB3 costs
Cash-related items (net): ~$0mm
- $25mm for impairment and closure costs
- $6mm non-op. pension and OPEB3 costs
Cash-related items (net outflow): ~$3mm
1. Excluding special items. Refer to Appendices A and B for a definition and reconciliation of non-GAAP financial measures.
2. Adjusted EBITDA is a non-GAAP financial measure. Refer to Appendices A and B for a definition and reconciliation of non-GAAP financial measures.
3. Other postretirement benefit.
RFP Q4 2016 Results – February 2, 2017
SHIPMENTS
13
368
503
493
35512
0
20
40
60
80
100
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 Tissue 000's st
Laurentide(-190k mt)
Iroquois Falls, Baie-Comeau PM1, Clermont PM5: (-465k mt)
Thunder Bay pellet plant
Ignace begins ramp-up
Atikokan begins ramp-up
Atlasacquisition
Augusta PM1: (-190k mt)
Market outages
Senneterre – Lac-Clair sawmill
RFP Q4 2016 Results – February 2, 2017
PERFORMANCE METRICS
14
« All-in » delivered cost1 EBITDA per unit1,2
575
292
512
654
200
300
400
500
600
700
800
$/u
nit
Market pulp $/mt Wood products $/mbf
Newsprint $/mt Specialty papers $/st
41
50
39
42
0
20
40
60
80
100
120
$/u
nit
Market pulp $/mt Wood products $/mbf
Newsprint $/mt Specialty papers $/st
EBITDA2
contribution from cogen
(in $US millions)
Q1’15 Q2’15 Q3’15 Q4’15 Q1’16 Q2’16 Q3’16 Q4’16
12 13 10 8 13 13 9 10
1. Performance metrics related to our tissue segment are available on page 8.
2. EBITDA is a non-GAAP financial measure. Refer to Appendices A and B for a definition and reconciliation of non-GAAP financial measures.
RFP Q4 2016 Results – February 2, 2017
LIQUIDITY AND CASH FLOW
15
Q4 2016
(US$mm)vs Q3 2016 vs Q4 2015
Cash 35 20 23
Working capital 580 2 37
Total debt 762 35 171
Interest 9 1 –
Available liquidity(US$mm)
2016 2015
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Total debt 762 727 611 611 591 590 590 590
Cash on hand 35 55 40 37 58 235 303 324
Available under revolving credit facilities 433 465 412 406 444 448 468 464
• Entered into $185mm credit facility in
2016, including $46mm term loan
• Net borrowings of $35mm under
revolving credit facilities in Q4
• Q4 capex of $72mm ↓ $6mm from Q3:
– $35mm for tissue project
• Liquidity of $468mm
• Q4 net cash from operations $30mm
RFP Q4 2016 Results – February 2, 2017
PENSION
16
(in $US millions) 2016 2015 2014
Net pension liabilities 1,123 1,019 1,421
OPEB liabilities 172 174 210
Net pension and OPEB liabilities 1,295 1,193 1,631
U.S. GAAP discount rate at 12/311 3.8% 4.2% 4.0%
• Net pension & OPEB liability as of December 31, 2016 ↑ $184 million in Q4
• Mostly due to a reduction in the applicable discount rate.
(in $US millions) 2017E 2016 2015 2014
Pension contributions2 151 162 143 164
OPEB payments 14 13 13 19
Operating pension and OPEB costs3 25 26 28 36
Non-op. pension and OPEB costs3,4 15 24 66 (10)
Total pension and OPEB costs 40 50 94 26
1. Pension plans.
2. Includes defined benefit, defined contribution and target benefit plans.
3. Starting January 1, 2017, amortization of prior service credits will be retrospectively presented under “non-operating pension and OPEB costs,” to be consistent with an Accounting
Standards Update expected to be issued by the FASB in the first quarter of 2017. Amortization of prior service credits of $15 million, $16 million, $16 million and $13 million for the
years ended December 31, 2017, 2016, 2015 and 2014 respectively, are currently presented as a reduction of costs under “operating pension and OPEB costs.”
4. Excluded from Adjusted EBITDA.
RFP Q4 2016 Results – February 2, 2017
17
PENSION
RFP Q4 2016 Results – February 2, 2017
2016 Pension Plans Deficit
Accounting
Basis
Funding
Purposes3 Variance
Net pension
liabilities
(US$mm)
1,123 621 502
Funded ratio
(%)78.7% 91.4%
Discount rate
(%)3.8% 5.0%
1. The assumptions for estimated total pension contributions can be found in the table “Assumptions used for 2017 – 2020” above.
2. Refer to Resolute Forest Products Inc.’s Current Report on Form 8-K filed December 20, 2016, SEC File No. 001-3376, for additional information and related risks.
3. Funding for pension plans in Quebec are on a going concern basis; in Ontario on a solvency basis; and in the U.S. on a 25-year average interest rate basis.
80
90
100
110
120
130
140
150
160
170
2016 2017 2018 2019 2020
Mill
ion
s o
f U
SD
Capacity Reduction
Other
Assumptions used for 2017 – 20202
Discount rate: going concern 5.5%
Estimated rate of return on assets 7.0%
Canadian dollar US$ 0.75
Estimated Total Pension Contributions1,2
APPENDIX A
19
Three months ended December 31, 2016
(unaudited, in millions, except per share amounts) EPS
GAAP, as reported (18)$ (45)$ (0.50)$
Adjustments for special items:
Foreign currency translation loss - 10 0.11
Closure costs, impairment and other related charges 25 25 0.28
Inventory write-downs related to closures 2 2 0.02
Start-up costs 3 3 0.03
Non-operating pension and OPEB costs 6 6 0.07
Other income, net - (3) (0.03)
Income tax effect of special items - (1) (0.01)
Adjusted for special items 18$ (3)$ (0.03)$
Three months ended December 31, 2015
(unaudited, in millions, except per share amounts) EPS
GAAP, as reported (226)$ (214)$ (2.39)$
Adjustments for special items:
Foreign currency translation loss - 2 0.02
Closure costs, impairment and other related charges 173 173 1.94
Inventory write-downs related to closures 1 1 0.01
Start-up costs 1 1 0.01
Non-operating pension and OPEB costs 27 27 0.30
Acquisition-related costs 4 4 0.04
Other income, net - (1) (0.01)
Income tax effect of special items - (19) (0.21)
Adjusted for special items (20)$ (26)$ (0.29)$
RESOLUTE FOREST PRODUCTS INC.
RECONCILIATION 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 1 to the Reconciliations of Non-GAAP Measures regarding our use of non-GAAP measures contained in our
February 2, 2017, press release available on our website.
RFP Q4 2016 Results – February 2, 2017
20
Twelve months ended December 31, 2016
(unaudited, in millions, except per share amounts) EPS
GAAP, as reported (26)$ (81)$ (0.90)$
Adjustments for special items:
Foreign currency translation loss - 7 0.08
Closure costs, impairment and other related charges 62 62 0.69
Inventory write-downs related to closures 7 7 0.08
Start-up costs 8 8 0.09
Net gain on disposition of assets (2) (2) (0.02)
Non-operating pension and OPEB costs 24 24 0.26
Other income, net - (14) (0.16)
Income tax effect of special items - (7) (0.08)
Adjusted for special items 73$ 4$ 0.04$
Twelve months ended December 31, 2015
(unaudited, in millions, except per share amounts) EPS
GAAP, as reported (219)$ (257)$ (2.78)$
Adjustments for special items:
Foreign currency translation loss - 4 0.04
Closure costs, impairment and other related charges 181 181 1.96
Inventory write-downs related to closures 2 2 0.02
Start-up costs 5 5 0.06
Non-operating pension and OPEB costs 66 66 0.72
Acquisition-related costs 4 4 0.04
Other income, net - (8) (0.09)
Income tax effect of special items - (21) (0.23)
Adjusted for special items 39$ (24)$ (0.26)$
Operating
income (loss)
Net income
(loss)
Operating
income (loss)
Net income
(loss)
RFP Q4 2016 Results – February 2, 2017
21
Three months ended December 31, 2016
(unaudited, in millions) Market pulp Tissue ( 2 ) Wood products Newsprint
Specialty
papers
Corporate and
other Total
Net income (loss) including noncontrolling interests 6$ 1$ 17$ 1$ 4$ (73)$ (44)$
Interest expense 9 9
Income tax provision 10 10
Depreciation and amortization 9 (1) 8 18 11 4 49
EBITDA 15$ -$ 25$ 19$ 15$ (50)$ 24$
Foreign currency translation loss 10 10
Closure costs, impairment and other related charges 25 25
Inventory write-downs related to closures 2 2
Start-up costs 3 3
Non-operating pension and OPEB costs 6 6
Other income, net (3) (3)
Adjusted EBITDA 15$ -$ 25$ 19$ 15$ (7)$ 67$
Three months ended December 31, 2015
(unaudited, in millions) Market pulp Tissue ( 2 ) Wood products Newsprint
Specialty
papers
Corporate and
other Total
Net income (loss) including noncontrolling interests 17$ (1)$ (8)$ (13)$ (2)$ (206)$ (213)$
Interest expense 9 9
Income tax benefit (23) (23)
Depreciation and amortization 13 1 11 16 17 3 61
EBITDA 30$ -$ 3$ 3$ 15$ (217)$ (166)$
Foreign currency translation loss 2 2
Closure costs, impairment and other related charges 173 173
Inventory write-downs related to closures 1 1
Start-up costs 1 1
Non-operating pension and OPEB costs 27 27
Acquisition-related costs 4 4
Other income, net (1) (1)
Adjusted EBITDA 30$ -$ 3$ 3$ 15$ (10)$ 41$
RESOLUTE FOREST PRODUCTS INC.
RECONCILIATION 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 1 to the Reconciliations of Non-GAAP
Measures regarding our use of the non-GAAP measures EBITDA and Adjusted EBITDA contained in our February 2, 2017, press release available on our website.
RFP Q4 2016 Results – February 2, 2017
22
Twelve months ended December 31, 2016
(unaudited, in millions) Market pulp Tissue ( 2 ) Wood products Newsprint
Specialty
papers
Corporate and
other Total
Net income (loss) including noncontrolling interests 43$ (10)$ 69$ (15)$ 25$ (188)$ (76)$
Interest expense 38 38
Income tax provision 19 19
Depreciation and amortization 37 5 31 74 45 14 206
EBITDA 80$ (5)$ 100$ 59$ 70$ (117)$ 187$
Foreign currency translation loss 7 7
Closure costs, impairment and other related charges 62 62
Inventory write-downs related to closures 7 7
Start-up costs 8 8
Net gain on disposition of assets (2) (2)
Non-operating pension and OPEB costs 24 24
Other income, net (14) (14)
Adjusted EBITDA 80$ (5)$ 100$ 59$ 70$ (25)$ 279$
Twelve months ended December 31, 2015
(unaudited, in millions) Market pulp Tissue ( 2 ) Wood products Newsprint
Specialty
papers
Corporate and
other Total
Net income (loss) including noncontrolling interests 76$ (1)$ 2$ (23)$ 29$ (338)$ (255)$
Interest expense 41 41
Income tax benefit (1) (1)
Depreciation and amortization 53 1 37 64 71 11 237
EBITDA 129$ -$ 39$ 41$ 100$ (287)$ 22$
Foreign currency translation loss 4 4
Closure costs, impairment and other related charges 181 181
Inventory write-downs related to closures 2 2
Start-up costs 5 5
Non-operating pension and OPEB costs 66 66
Acquisition-related costs 4 4
Other income, net (8) (8)
Adjusted EBITDA 129$ -$ 39$ 41$ 100$ (33)$ 276$
RFP Q4 2016 Results – February 2, 2017
APPENDIX B
24
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
Sales 920$ 926$ 905$ 894$ 3,645$ 877$ 891$ 888$ 889$ 3,545$
Operating income (loss) (15) 16 6 (226) (219) - (18) 10 (18) (26)
Interest expense (12) (11) (9) (9) (41) (10) (9) (10) (9) (38)
Other income (expense), net 5 1 (1) (1) 4 13 - 1 (7) 7
Net income (loss) including noncontrolling interests (32) (4) (6) (213) (255) (7) (40) 15 (44) (76)
Net income (loss) attributable to noncontrolling interests 1 - - 1 2 1 2 1 1 5
Net income (loss) attributable to Resolute Forest Products Inc. (33) (4) (6) (214) (257) (8) (42) 14 (45) (81)
Diluted net income (loss) per share attributable to Resolute Forest Products Inc. common shareholders (0.35)$ (0.04)$ (0.07)$ (2.39)$ (2.78)$ (0.09)$ (0.47)$ 0.15$ (0.50)$ (0.90)$
Dividends declared per common share -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Average diluted shares outstanding (in thousands) 94,883 94,095 91,087 89,415 92,353 89,610 89,818 90,392 90,068 89,882
Ending shares outstanding (in thousands) 94,801 91,606 89,306 89,493 89,493 89,493 89,505 89,507 89,751 89,751
Financial Position
Cash and cash equivalents 324$ 303$ 235$ 58$ 58$ 37$ 40$ 55$ 35$ 35$
Working capital (1) 629 616 644 617 617 620 573 578 580 580
Fixed assets, net 1,956 1,944 1,932 1,810 1,810 1,811 1,801 1,839 1,842 1,842
Total assets 4,739 4,682 4,541 4,220 4,220 4,289 4,245 4,312 4,277 4,277
Current portion of long-term debt 1 1 1 1 1 1 1 1 1 1
Long-term debt, net of current portion 589 589 589 590 590 610 610 726 761 761
Net debt (2) 266 287 355 533 533 574 571 672 727 727
Liquidity (3) 788 771 683 502 502 443 452 520 468 468
Total Resolute Forest Products Inc. shareholders' equity 2,088 2,061 2,046 1,932 1,932 1,932 1,899 1,919 1,693 1,693
Noncontrolling interests 12 12 12 13 13 14 16 17 18 18
Total equity 2,100 2,073 2,058 1,945 1,945 1,946 1,915 1,936 1,711 1,711
Cash Flow Information
Cash flows provided by (used in) operations 29$ 61$ -$ 48$ 138$ 6$ 63$ (18)$ 30$ 81$
Cash invested in fixed assets (40) (39) (44) (62) (185) (47) (52) (78) (72) (249)
Acquisition of Atlas Paper Holdings, Inc., including cash overdraft acquired - - - (159) (159) - - - - -
Dispositions of assets - - - - - 5 - - - 5
Decrease (increase) in countervailing duty cash deposits - - - (4) (4) (6) (6) (5) (6) (23)
Cash flows provided by (used in) investing activities (40) (43) (45) (224) (352) (48) (59) (82) (84) (273)
Issuance of long-term debt - - - - - - - 46 - 46
Net borrowings under revolving credit facilities - - - - - 20 - 70 35 125
Purchases of treasury stock - (37) (22) - (59) - - - - -
Cash flows provided by (used in) financing activities - (40) (22) - (62) 20 (1) 115 35 169
2015 2016
RFP Q4 2016 Results – February 2, 2017
25
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
Market pulp 218$ 231$ 230$ 210$ 889$ 211$ 210$ 198$ 217$ 836$
Tissue (4) - - - 11 11 23 24 23 19 89
Wood products 139 134 131 132 536 119 145 168 164 596
Newsprint 291 289 258 267 1,105 257 257 242 253 1,009
Specialty papers 272 272 286 274 1,104 267 255 257 236 1,015
Total sales 920$ 926$ 905$ 894$ 3,645$ 877$ 891$ 888$ 889$ 3,545$
Shipments to 3rd Parties (thousands of units)
Market pulp (mt) 328 351 360 336 1,375 352 345 323 368 1,388
Tissue (st) (4) - - - 7 7 15 16 15 12 58
Wood products (mbf) 393 418 421 446 1,678 390 445 506 503 1,844
Newsprint (mt) 534 548 517 551 2,150 519 510 470 493 1,992
Specialty papers (st) 382 388 411 399 1,580 393 382 384 355 1,514
Average Transaction Price per Unit
Market pulp ($/mt) 666$ 658$ 639$ 623$ 646$ 601$ 607$ 610$ 592$ 602$
Tissue ($/st) (4) - - - 1,506 1,506 1,489 1,560 1,549 1,521 1,530
Wood products ($/mbf) 353 320 314 296 320 306 325 331 327 323
Newsprint ($/mt) 545 528 498 484 514 495 504 515 512 506
Specialty papers ($/st) 711 701 693 690 699 679 668 672 665 671
20162015
RFP Q4 2016 Results – February 2, 2017
26
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)
Market pulp 11$ 26$ 22$ 17$ 76$ 20$ 12$ 5$ 6$ 43$
Tissue (4) - - - (1) (1) (2) (4) (5) 1 (10)
Wood products 5 (4) 9 (8) 2 (4) 20 36 17 69
Newsprint (3) 3 (10) (13) (23) (5) (3) (8) 1 (15)
Specialty papers 5 17 9 (2) 29 7 16 (2) 4 25
Corporate and other (33) (26) (24) (219) (302) (16) (59) (16) (47) (138)
Total operating income (loss) (15)$ 16$ 6$ (226)$ (219)$ -$ (18)$ 10$ (18)$ (26)$
Selling, General and Administrative Expenses
Market pulp 8$ 8$ 7$ 8$ 31$ 7$ 7$ 8$ 6$ 28$
Tissue (4) - - - 2 2 2 3 2 2 9
Wood products 6 6 5 6 23 5 7 6 4 22
Newsprint 11 12 9 11 43 10 9 10 8 37
Specialty papers 8 7 8 6 29 6 7 7 5 25
Corporate and other 8 7 5 12 32 8 7 4 9 28
Total selling, general and administrative expenses 41$ 40$ 34$ 45$ 160$ 38$ 40$ 37$ 34$ 149$
Operating Cost per Unit
Market pulp ($/mt) 631$ 585$ 576$ 574$ 591$ 543$ 575$ 592$ 575$ 571$
Tissue ($/st) (4) - - - 1,539 1,539 1,643 1,792 1,878 1,367 1,682
Wood products ($/mbf) 342 327 294 310 318 317 278 263 292 286
Newsprint ($/mt) 552 521 517 509 525 504 511 531 512 514
Specialty papers ($/st) 698 658 671 697 681 662 625 677 654 654
Product Inventory (thousands of units)
Market pulp (mt) 102 88 77 90 90 94 83 100 91 91
Tissue (st) (4) - - - 6 6 5 3 4 5 5
Wood products (mbf) 133 117 135 130 130 126 129 121 124 124
Newsprint (mt) 105 97 101 91 91 104 96 105 105 105
Specialty papers (st) 92 114 102 88 88 78 88 75 92 92
2015 2016
RFP Q4 2016 Results – February 2, 2017
27
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
Market pulp 11$ 26$ 22$ 17$ 76$ 20$ 12$ 5$ 6$ 43$
Tissue (4)- - - (1) (1) (2) (4) (5) 1 (10)
Wood products 5 (4) 9 (8) 2 (4) 20 36 17 69
Newsprint (3) 3 (10) (13) (23) (5) (3) (8) 1 (15)
Specialty papers 5 17 9 (2) 29 7 16 (2) 4 25
Corporate and other (50) (46) (36) (206) (338) (23) (81) (11) (73) (188)
Total net income (loss) including noncontrolling interests (32)$ (4)$ (6)$ (213)$ (255)$ (7)$ (40)$ 15$ (44)$ (76)$
Interest Expense 12$ 11$ 9$ 9$ 41$ 10$ 9$ 10$ 9$ 38$
Income Tax Provision (Benefit) 10$ 10$ 2$ (23)$ (1)$ 10$ 13$ (14)$ 10$ 19$
Depreciation and Amortization
Market pulp 14$ 12$ 14$ 13$ 53$ 7$ 11$ 10$ 9$ 37$
Tissue (4) - - - 1 1 2 2 2 (1) 5
Wood products 8 9 9 11 37 7 9 7 8 31
Newsprint 16 16 16 16 64 20 19 17 18 74
Specialty papers 17 19 18 17 71 13 10 11 11 45
Corporate and other 2 4 2 3 11 3 3 4 4 14
Total depreciation and amortization 57$ 60$ 59$ 61$ 237$ 52$ 54$ 51$ 49$ 206$
EBITDA (5)
Market pulp 25$ 38$ 36$ 30$ 129$ 27$ 23$ 15$ 15$ 80$
Tissue (4) - - - - - - (2) (3) - (5)
Wood products 13 5 18 3 39 3 29 43 25 100
Newsprint 13 19 6 3 41 15 16 9 19 59
Specialty papers 22 36 27 15 100 20 26 9 15 70
Corporate and other (26) (21) (23) (217) (287) - (56) (11) (50) (117)
Total EBITDA 47$ 77$ 64$ (166)$ 22$ 65$ 36$ 62$ 24$ 187$
Special Items (5)
Foreign currency translation (gain) loss (2)$ (1)$ 5$ 2$ 4$ (6)$ 3$ -$ 10$ 7$
Closure costs, impairment and other related charges 6 - 2 173 181 - 37 - 25 62
Inventory write-downs related to closures 1 - - 1 2 - 5 - 2 7
Net (gain) loss on disposition of assets - - - - - (2) - - - (2)
Non-operating pension and OPEB costs (credits) 14 12 13 27 66 6 6 6 6 24
Acquisition-related costs - - - 4 4 - - - - -
Start-up costs 1 1 2 1 5 3 1 1 3 8
Other (income) expense, net (3) - (4) (1) (8) (7) (3) (1) (3) (14)
Total special items 17$ 12$ 18$ 207$ 254$ (6)$ 49$ 6$ 43$ 92$
Adjusted EBITDA (5)
Market pulp 25$ 38$ 36$ 30$ 129$ 27$ 23$ 15$ 15$ 80$
Tissue (4) - - - - - - (2) (3) - (5)
Wood products 13 5 18 3 39 3 29 43 25 100
Newsprint 13 19 6 3 41 15 16 9 19 59
Specialty papers 22 36 27 15 100 20 26 9 15 70
Corporate and other (9) (9) (5) (10) (33) (6) (7) (5) (7) (25)
Total adjusted EBITDA 64$ 89$ 82$ 41$ 276$ 59$ 85$ 68$ 67$ 279$
20162015
RFP Q4 2016 Results – February 2, 2017
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Resolute Forest Products Inc.
Financial and Operating Statistics (Page 5 of 5)
Notes
5 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 (market pulp, tissue, wood products, newsprint and
specialty papers) 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.
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, acquisition-related costs and other charges or credits. Special items are allocated to corporate and other.
1 We define working capital as current assets less current liabilities excluding cash and cash equivalents and debt.
2 We define net debt as total debt less cash and cash equivalents.
4 On November 16, 2015, we acquired Atlas Paper Holdings, Inc. and its subsidiaries (or “Atlas Paper”), a manufacturer of a range of tissue products for the away-from-home and private-label at-home markets, including virgin and recycled products,
covering economy, value and premium grades and operating two tissue mills and a recycling facility in Florida. We began consolidating the results of operations of Atlas Paper in our Consolidated Financial Statements as of November 16, 2015. Atlas
Paper’s results of operations are included in the tissue segment.
3 We define liquidity as cash and cash equivalents and availability under our revolving credit facilities.
6 Certain prior period amounts have been changed to conform to the 2016 presentation.
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.
RFP Q4 2016 Results – February 2, 2017
RESOLUTE FOREST
PRODUCTS
Q4 2016 RESULTSRICHARD GARNEAU, PRESIDENT & CEO
JO-ANN LONGWORTH, SVP & CFO
February 2, 2017