resolute forest products q4 2015 results · resolute forest products q4 2015 results ... rfp q4...

RESOLUTE FOREST PRODUCTS Q4 2015 RESULTSRichard Garneau, President & CEOJo-Ann Longworth, SVP & CFO

February 4, 2016

RFP Q4 2015 Results 2

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

February 4, 2016

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 the company’s: efforts and initiatives to reduce costs and increase revenues and profitability; business and operating outlook; future pension funding obligations; assessment of market conditions; the company’s growth strategies and prospects and growth potential of the company and the industry in which it operates; the expected benefits of the Atlas Paper acquisition and strategies for achieving the company’s 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 the company’s 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 the company’s actual future financial condition, results of operations and performance to differ materially from those expressed or implied in this earnings release and the earnings conference call referred to above include, but are not limited to, the impact of: developments in alternative media, which are expected to adversely affect the demand for some of the company’s key products, and the effectiveness of its responses to these developments; any additional closure costs and long-lived asset impairment or accelerated depreciation charges; currency fluctuations; global economic conditions; intense competition in the forest products industry; negative publicity, even if unjustified; the highly cyclical nature of the forest products industry; contributions to the company’s Canadian pension plans at levels higher than expected; the terms of outstanding indebtedness, which could restrict current and future operations; the company’s ability to maintain adequate capital resources to provide for all of its substantial capital requirements; any inability to successfully implement the company’s strategies to increase earnings power; the possible failure to successfully integrate the businesses of the company and Atlas Paper or that such integration may be more difficult, time-consuming or costly than expected or expected benefits from the acquisition may not be fully realized or realized within the expected time frame; changes in laws or regulations, including environmental regulations; the future regulation of Canadian softwood lumber exports to the United States; countervailing duties or cash deposit requirements and other trade remedies, which could require the company to set aside or pay a substantial amount of cash and impact the competitive position of the affected operations; any difficulties in obtaining wood fiber at favorable prices, or at all; changes in the cost of purchased energy and other raw materials; changes in political or economic conditions in Canada, the United States or other countries in which the company’s products are manufactured or sold; physical and financial risks associated with climate change; any labor disputes; extreme weather conditions or natural or man-made disasters; cyber security risks; acquisitions, divestitures or other strategic transactions the company 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 and other filings with the SEC.

All forward-looking statements in this presentation are expressly qualified by the cautionary statements contained or referred to above and in Resolute’sother 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


2015 OVERVIEW

Adjusted EBITDA is a non-GAAP financial measure. Refer to Appendices B and C for a definition and reconciliation of non-GAAP financial measures.

February 4, 2016

Adjusted EBITDA : 2015 vs 2014

- Significant manufacturing costs: asset optimization initiatives ($37mm); maintenance and productivity ($25mm); and lower commodity costs ($16mm)

- $19mm of unfavorable corporate “segment” = SG&A for project costs and stock-based compensation expenses


Q4 2015 OVERVIEW

Adjusted EBITDA : Q4’15 vs Q3’15


February 4, 2016


Q4 2015 OVERVIEW

Adjusted EBITDA : Q4’15 vs Q4’14


February 4, 2016


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).

February 4, 2016

100115

94 93102

8877

90

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

Inventory (000's mt)

(US$mm) Q4 2015 Q3 2015 2015 2014

Sales 210 230 889 974

Operating income 17 22 76 63

EBITDA1 30 36 129 116

Shipments (000’s mt) 336 360 1,375 1,383

Global chemical pulp demand ↑ 3% in 2015

– China ↑ 11%; Lat. Am ↑ 2%;W.Europe ↑ 1%

– World capacity ↑ 2%– 2015 world demand ↑ 1% for

softwood, 6% for hardwood RFP ↓ $58/mt from 2014 RFP ↓ 24k mt from Q3


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.

February 4, 2016

$275

$300

$325

$350

$375

$400

$425

$450

$475

$500

Random Lengths Composite 2x4 -RL #1-2 KD GL 2x4x8 Stud KD GL

Q4 2015

176154

124 117133

117135 130

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

Inventory (000's mbf)

$296$310

$275

$300

$325

$350

$375

$400

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

$/m

bf

average transaction price "all‐in" delivered cost

(US$mm) Q4 2015 Q3 2015 2015 2014

Sales 132 131 536 610

Operating (loss) income (8) 9 2 69

EBITDA1 3 18 39 102

Shipments (000’s mbf) 446 421 1,678 1,585

Q4 SAAR U.S. housing starts of 1.1mm; 2015 actual ↑ 11%

2015 RFP ↓ $65/mbf RFP ↑ 25 mmbf vs. Q3 One-year standstill post-SLA


NEWSPRINT


February 4, 2016

125

142

123115

10597 101

91

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

Inventory (000's mt)

(US$mm) Q4 2015 Q3 2015 2015 2014

Sales 267 258 1,105 1,402

Operating loss (13) (10) (23) 20

EBITDA1 3 6 41 89

Shipments (000’s mt) 551 517 2,150 2,371

NA demand ↓ 10% in 2015– NA exports ↓ 15% – operating rate of 92%

World demand ↓ 9%– Asia ↓ 9%; W. Europe ↓ 8%; Lat.

Am ↓ 9% RFP ↑ 34k mt from Q3 RFP ↓ $77/mt vs. 2014 Price increases being

implemented


SPECIALTY PAPERS


February 4, 2016

99

114122

8392

114

102

88

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

Inventory (000's st)

(US$mm) Q4 2015 Q3 2015 2015 2014

Sales 274 286 1,104 1,272

Operating (loss) income (2) 9 29 (19)

EBITDA1 15 27 100 63

Shipments (000’s st) 399 411 1,580 1,778

2015 NA demand for UM grades ↓ 12%

– SC ↓ 10%– standard ↓ 12% – operating rates ~91%

Coated demand ↓ 10% in 2015 – NA production ↓ 12% – W. Europe imports ↑ 44%

RFP ↓ 12k st from Q3 RFP ↓ $16/st vs. 2014

RFP Q4 2015 Results 10February 4, 2016

Compelling strategic benefits – Immediate position in consumer tissue market – Further integrating RFP pulp into tissue– Brings proven tissue industry experience

Growing U.S. demand – Converted tissue shipments ↑ 2.1% from 2014:

at-home ↑ 1.7% & away-from-home ↑ 3.0%– Parent roll consumption ↑ 1.4%

Expected annualized EBITDA of ~$23mm with synergies


(US$mm) Q4 2015

Sales 11

Operating (loss) income (1)

EBITDA1 -

Shipments (000’s st) 7

GROWING INTO TISSUE: ATLAS PAPER ACQUISITION

Safety and sustainability World-class OSHA1 incident rate of 0.66 in 2015

Environmental incidents ↓ 53% from 2014 Adopted Global Reporting Initiative’s (GRI) G4 reporting

framework

Corporate Refinanced ABL credit facility → more flexible terms and

conditions to better support growth and diversification Repurchased 5.5 million shares of stock = 6% of outstanding Significant ↓ manufacturing costs = asset optimization initiatives

+ maintenance/productivity + ↓ commodity costs

RFP Q4 2015 Results

2015 ACCOMPLISHMENTS

11February 4, 2016

1. Occupational Safety and Health Administration

RFP Q4 2015 Results

Increased capacity of lumber and market pulp businesses: started two sawmills in Northern Ontario completed $100mm continuous pulp digester in Calhoun

on time and on budget Building world-class tissue & converting facility

12February 4, 2016

2015: CONTINUED PROGRESS ON GROWTH & DIVERSIFICATION

Digester tower

Ignace sawmill

Atikokan site

NTT Machine

RFP Q4 2015 Results

2015 RECOGNITIONS

13February 4, 2016

Women in Business Awards (Stevie®)• Female Executive of the Year

(Pascale Lagacé)• Corporate Blog

Pulp and Paper International (PPI) Awards• Managing Risk

Canada’s Clean50 Awards• Sustainability and Clean Capitalism

(Pascale Lagacé, Jim Balik, Mylène Labrie and Alice Minville)

Canadian Chambers of Commerce Canada’s Resource Champion• Individual (Roger Barber)

U.K.’s The New Economy Magazine Clean Tech Awards

HONORS AWARDED TO FACILITIESMenominee (Michigan)• Closing the Loop Award

Amos (Quebec)• Ethno Certification

Thunder Bay (Ontario)• Northern Ontario Business

Award (NOBA)

MerComm Annual Report Competition (ARC) • Graphic Design of Annual Report• Annual Report/10-K Package

Canada’s Top100 Corporate R&D Spenders & Top20 Corporate Partners

Best in Biz Awards• Most Socially or Environmentally

Responsible Company of the Year

International Business Awards (Stevie®)• Health, Safety & Environment• Woman of the Year – North

America (Pascale Lagacé)

AF&PA Awards• Safety Performance

P&L

2015 vs 2014 Q4 2015 vs Q3 2015 vs Q4 2014

Net loss1 $24mm -$63mm Net loss1 $26mm -$40mm -$61mm

Sales $3,645mm -14% Sales $894mm -1% -15%

EPS1 ($0.26) -$0.67 EPS1 ($0.29) -$0.44 -$0.66

Adjusted EBITDA2

$276mm -22% Adjusted EBITDA2

$41mm -50% -61%

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)Special items affecting net income (pre-tax)

Selected financial informationSelected financial information

14February 4, 2016 RFP Q4 2015 Results

2015 Q4 2015- $181mm for impairment and closure costs- $66mm non-op. pension and OPEB3 costs Cash-related items: ~$5mm

- $173mm for impairment and closure costs- $27mm non-op. pension and OPEB3 costs Cash-related items: ~$2mm

February 4, 2016 RFP Q4 2015 Results 15

SHIPMENTS

336

446

551

399

300

350

400

450

500

550

600

650

Market pulp Tissue products Wood products Newsprint Specialty papers

Gatineau(+180k mt)

Calhoun (+215k mt)Fort Frances (-100k mt)

Maniwaki(+130k mbf)

Laurentide(-190k mt)

Iroquois Falls, Baie-Comeau PM1, Clermont PM5: (-465k mt)

Thunder Bay pellet plant

Comtois(+145k mbf)

k mt

k st

mmbf

k mt

Ignace begins ramp-up

Atikokan begins ramp-up

7k stTissue shipments begin

PERFORMANCE METRICS


« All-in » delivered cost EBITDA per unit

EBITDA improvement from cogen(in $US millions)

Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15

13 14 8 8 12 13 10 8


LIQUIDITY AND CASH FLOWQ4 2015(US$mm)

vs Q3 2015

vs Q4 2014

Cash 58 177 279

Working capital617 27 8

Net debt 533 178 280

Interest9 - 3

• Atlas acquisition ($156 mm)• Q4 capex ↑ $18mm (to $62mm):

digester and tissue • Total 2015 capex of $185 mm

– $45mm for pulp digester– $43mm for tissue project– $21mm for Ontario sawmills

• 2016 capex ~$300 mm– ~$165mm for tissue project – ~ $65mm for value-creation

• Liquidity strong at $502 mmAvailable liquidity (US$mm)

2015 2014Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1

Total debt1 591 590 590 590 590 590 590 590

Cash on hand 58 235 303 324 337 265 263 240

Available under ABL credit facility 444 448 468 464 521 572 567 548

February 4, 2016

1. Prior period amounts have been adjusted in accordance with Accounting Standards Codification 2015-03 “Simplifying the Presentation of Debt Issuance Costs.”


PENSION

(in $US millions) 2015 2014 2013 2012Net pension and OPEB liabilities 1,193 1,631 1,301 1,973

U.S. GAAP discount rate at 12/311 4.2% 4.0% 4.9% 4.3%(in $US millions) 2016E 2015 2014 2013 2012

Pension contributions2 165 143 164 155 124

OPEB payments 15 13 19 22 20

1. Pension plans2. Includes defined benefit, defined contribution and target benefit plans3. Excluded from Adjusted EBITDA

• $27mm pension contributions in Q4; $36mm expense• $143mm 2015 pension contributions; $13mm OPEB payments• $68mm ↑ in pension and OPEB expense in 2015:

– Amortization of 2014 net liability increase ($62mm) – $14mm settlement charge for annuity purchase in U.S.

• Net pension & OPEB liability $438 million in 2015

February 4, 2016

Operating pension and OPEB costs 25 28 36 55 60

Non-op. pension and OPEB costs3 25 66 (10) 5 (8)

APPENDIX A

CHANGE TO PRESENTATION OF PENSION & OPEB COMPONENTS


2014 Q1’15 Q2’15 Q3’15 Q4’15

(in $US millions) Pre Post Pre Post W/o change

As shown

W/o change

As shown

W/o change

As shown

Market pulp 119 116 24 25 36 38 35 36 28 30

Wood products 102 102 13 13 4 5 18 18 3 3

Newsprint 92 89 10 13 17 19 3 6 1 3

Specialty papers 65 63 18 22 33 36 23 27 11 15

Corporate and other (12) (14) (15) (9) (13) (9) (10) (5) (15) (10)

Adjusted EBITDA 366 356 50 64 77 89 69 82 28 41

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, amortization of actuarial losses and settlement 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.

1

What happened to the harvesting blocks presented in “L’erreur Boréale” (1999) after 16 years?

Screen grab from the movie (1997) Aerial photo (2005) Aerial photo (2013)

Comtois sawmillAPPENDIX B


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)

GAAP, as adjusted for special items (20)$ (26)$ (0.29)$

Three months ended December 31, 2014(unaudited, in millions, except per share amounts) EPS

GAAP, as reported (93)$ (109)$ (1.15)$

Adjustments for special items:Foreign currency translation loss - 18 0.19 Closure costs, impairment and other related charges 131 131 1.38 Inventory write-downs related to closures 7 7 0.07 Start-up costs 2 2 0.02 Non-operating pension and OPEB credits (2) (2) (0.02) Write-down of equity method investment - 11 0.12 Other income, net - (4) (0.04) Income tax effect of special items - (19) (0.20)

GAAP, as adjusted for special items 45$ 35$ 0.37$

RESOLUTE FOREST PRODUCTS INC.STATEMENTS OF OPERATING INCOME AND NET INCOME ADJUSTED FOR SPECIAL ITEMS

Net 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 4 to the Unaudited Consolidated Financial Statement Information regarding our use of non-GAAP measures contained in our February 4, 2016, press release available on our website.


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)

GAAP, as adjusted for special items 39$ (24)$ (0.26)$

Twelve months ended December 31, 2014(unaudited, in millions, except per share amounts) EPS

GAAP, as reported (174)$ (277)$ (2.93)$

Adjustments for special items:Foreign currency translation loss - 32 0.34 Closure costs, impairment and other related charges 278 278 2.94 Inventory write-downs related to closures 17 17 0.18 Start-up costs 4 4 0.04 Net gain on disposition of assets (2) (2) (0.02) Non-operating pension and OPEB credits (10) (10) (0.11) Write-down of equity method investment - 61 0.65 Other income, net - (10) (0.11) Income tax effect of special items - (54) (0.57)

GAAP, as adjusted for special items 113$ 39$ 0.41$


Net income (loss)


Net income (loss)


Three months ended December 31, 2015(unaudited, in millions) Market pulp Tissue 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$

Three months ended December 31, 2014(unaudited, in millions) Market pulp Tissue Wood products Newsprint

Specialty papers


Net income (loss) including noncontrolling interests 12$ -$ 18$ 14$ 4$ (156)$ (108)$ Interest expense 12 12 Income tax benefit (22) (22) Depreciation and amortization 14 - 9 17 18 1 59 EBITDA 26$ -$ 27$ 31$ 22$ (165)$ (59)$

Foreign currency translation loss 18 18 Closure costs, impairment and other related charges 131 131 Inventory write-downs related to closures 7 7 Start-up costs 2 2 Non-operating pension and OPEB credits (2) (2) Write-down of equity method investment 11 11 Other income, net (4) (4)

Adjusted EBITDA 26$ -$ 27$ 31$ 22$ (2)$ 104$

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 4 to the Unaudited Consolidated Financial Statement Information regarding our use of the non-GAAP measures EBITDA and Adjusted EBITDA contained in our February 4, 2016, press release available on our website.


Twelve months ended December 31, 2015(unaudited, in millions) Market pulp Tissue Wood products Newsprint

Specialty papers


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$

Twelve months ended December 31, 2014(unaudited, in millions) Market pulp Tissue Wood products Newsprint

Specialty papers


Net income (loss) including noncontrolling interests 63$ -$ 69$ 20$ (19)$ (407)$ (274)$ Interest expense 47 47 Income tax benefit (30) (30) Depreciation and amortization 53 - 33 69 82 6 243 EBITDA 116$ -$ 102$ 89$ 63$ (384)$ (14)$

Foreign currency translation loss 32 32 Closure costs, impairment and other related charges 278 278 Inventory write-downs related to closures 17 17 Start-up costs 4 4 Net gain on disposition of assets (2) (2) Non-operating pension and OPEB credits (10) (10) Write-down of equity method investment 61 61 Other income, net (10) (10)

Adjusted EBITDA 116$ -$ 102$ 89$ 63$ (14)$ 356$

APPENDIX C


Resolute Forest Products Inc.

Financial and Operating Statistics (Page 1 of 5)

(in millions, except per share amounts and otherw ise indicated) First Second Third Fourth Total First Second Third Fourth Total

Income Statement Data

Total sales 1,016$ 1,091$ 1,096$ 1,055$ 4,258$ 920$ 926$ 905$ 894$ 3,645$

Operating income (loss) (33) (8) (40) (93) (174) (15) 16 6 (226) (219)

Interest expense (12) (11) (12) (12) (47) (12) (11) (9) (9) (41)

Other income (expense), net (13) 20 (65) (25) (83) 5 1 (1) (1) 4

Net income (loss) including noncontrolling interests (50) - (116) (108) (274) (32) (4) (6) (213) (255)

Net income (loss) attributable to noncontrolling interests - 2 - 1 3 1 - - 1 2

Net income (loss) attributable to Resolute Forest Products Inc. (50) (2) (116) (109) (277) (33) (4) (6) (214) (257)

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)$ (2.39)$ (2.78)$

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 89,415 92,353

Ending shares outstanding (in thousands) 94,589 94,590 94,590 94,786 94,786 94,801 91,606 89,306 89,493 89,493

Financial Position

Cash and cash equivalents 240$ 263$ 265$ 337$ 337$ 324$ 303$ 235$ 58$ 58$

Working capital (2) (3) 706 695 705 609 609 629 616 644 617 617

Fixed assets, net 2,256 2,184 2,098 1,985 1,985 1,956 1,944 1,932 1,810 1,810

Total assets (2) 5,249 5,239 5,028 4,914 4,914 4,739 4,682 4,541 4,220 4,220

Current portion of long-term debt 1 1 1 1 1 1 1 1 1 1

Long-term debt, net of current portion (2) 589 589 589 589 589 589 589 589 590 590

Net debt (2) (4) 350 327 325 253 253 266 287 355 533 533

Total Resolute Forest Products Inc. shareholders' equity 2,801 2,828 2,680 2,106 2,106 2,088 2,061 2,046 1,932 1,932

Noncontrolling interests 12 14 14 11 11 12 12 12 13 13

Total equity 2,813 2,842 2,694 2,117 2,117 2,100 2,073 2,058 1,945 1,945

Cash Flow Information

Cash flows provided by (used in) operations (41)$ 63$ 58$ 106$ 186$ 29$ 61$ -$ 48$ 138$

Cash invested in fixed assets (36) (46) (60) (51) (193) (40) (39) (44) (62) (185)

Dispositions of assets - 2 4 4 10 - - - - -

Acquisition of Atlas Paper Holdings, Inc., including cash overdraft acquired - - - - - - - - (159) (159)

Cash flows provided by (used in) investing activities (34) (46) (53) (28) (161) (40) (43) (45) (224) (352)

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

Market pulp 234$ 241$ 255$ 244$ 974$ 218$ 231$ 230$ 210$ 889$

Tissue - - - - - - - - 11 11

Wood products 135 161 166 148 610 139 134 131 132 536

Newsprint 346 364 346 346 1,402 291 289 258 267 1,105

Specialty papers 301 325 329 317 1,272 272 272 286 274 1,104

Total sales 1,016$ 1,091$ 1,096$ 1,055$ 4,258$ 920$ 926$ 905$ 894$ 3,645$

Shipments to 3rd Parties (thousands of units)

Market pulp (mt) 335 334 363 351 1,383 328 351 360 336 1,375

Tissue (st) - - - - - - - - 7 7

Wood products (mbf) 353 420 422 390 1,585 393 418 421 446 1,678

Newsprint (mt) 579 611 584 597 2,371 534 548 517 551 2,150

Specialty papers (st) 420 452 463 443 1,778 382 388 411 399 1,580

Average Transaction Price per Unit

Market pulp ($/mt) 696$ 725$ 701$ 695$ 704$ 666$ 658$ 639$ 623$ 646$

Tissue ($/st) - - - - - - - - 1,536 1,536

Wood products ($/mbf) 382 384 394 378 385 353 320 314 296 320

Newsprint ($/mt) 598 596 591 579 591 545 528 498 484 514

Specialty papers ($/st) 716 718 712 715 715 711 701 693 690 699

2015 (1)2014 (1)




(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 7$ 24$ 20$ 12$ 63$ 11$ 26$ 22$ 17$ 76$

Tissue - - - - - - - - (1) (1)

Wood products 12 15 24 18 69 5 (4) 9 (8) 2

Newsprint (16) 17 5 14 20 (3) 3 (10) (13) (23)

Specialty papers (25) (4) 6 4 (19) 5 17 9 (2) 29


Total operating income (loss) (33)$ (8)$ (40)$ (93)$ (174)$ (15)$ 16$ 6$ (226)$ (219)$

Selling, General and Administrative Expenses

Market pulp 8$ 9$ 9$ 9$ 35$ 8$ 8$ 7$ 8$ 31$

Tissue - - - - - - - - 2 2

Wood products 5 6 6 6 23 6 6 5 6 23

Newsprint 12 14 14 13 53 11 12 9 11 43


Corporate and other 2 3 2 - 7 8 7 5 12 32

Total selling, general and administrative expenses 36$ 41$ 41$ 37$ 155$ 41$ 40$ 34$ 45$ 160$

Operating Cost per Unit

Market pulp ($/mt) 677$ 652$ 648$ 658$ 658$ 631$ 585$ 576$ 574$ 591$

Tissue ($/st) - - - - - - - - 1,569 1,569

Wood products ($/mbf) 347 350 337 332 341 342 327 294 310 318

Newsprint ($/mt) 625 570 582 556 583 552 521 517 509 525

Specialty papers ($/st) 776 725 700 706 726 698 658 671 697 681

Product Inventory (thousands of units)

Market pulp (mt) 100 115 94 93 93 102 88 77 90 90

Tissue (st) - - - - - - - - 6 6

Wood products (mbf) 176 154 124 117 117 133 117 135 130 130

Newsprint (mt) 125 142 123 115 115 105 97 101 91 91

Specialty papers (st) 99 114 122 83 83 92 114 102 88 88

2014 (1) 2015 (1)




(in millions) First Second Third Fourth Total First Second Third Fourth Total

Net Income (Loss) Including Noncontrolling Interests

Market pulp 7$ 24$ 20$ 12$ 63$ 11$ 26$ 22$ 17$ 76$

Tissue - - - - - - - - (1) (1)

Wood products 12 15 24 18 69 5 (4) 9 (8) 2

Newsprint (16) 17 5 14 20 (3) 3 (10) (13) (23)

Specialty papers (25) (4) 6 4 (19) 5 17 9 (2) 29


Total net income (loss) including noncontrolling interests (50)$ -$ (116)$ (108)$ (274)$ (32)$ (4)$ (6)$ (213)$ (255)$

Interest Expense 12$ 11$ 12$ 12$ 47$ 12$ 11$ 9$ 9$ 41$

Income Tax Provision (Benefit) (8)$ 1$ (1)$ (22)$ (30)$ 10$ 10$ 2$ (23)$ (1)$

Depreciation and Amortization

Market pulp 13$ 13$ 13$ 14$ 53$ 14$ 12$ 14$ 13$ 53$

Tissue - - - - - - - - 1 1

Wood products 8 8 8 9 33 8 9 9 11 37

Newsprint 18 17 17 17 69 16 16 16 16 64


Corporate and other 1 2 2 1 6 2 4 2 3 11

Total depreciation and amortization 62$ 62$ 60$ 59$ 243$ 57$ 60$ 59$ 61$ 237$

EBITDA (5)

Market pulp 20$ 37$ 33$ 26$ 116$ 25$ 38$ 36$ 30$ 129$

Tissue - - - - - - - - - -

Wood products 20 23 32 27 102 13 5 18 3 39

Newsprint 2 34 22 31 89 13 19 6 3 41

Specialty papers (3) 18 26 22 63 22 36 27 15 100


Total EBITDA 16$ 74$ (45)$ (59)$ (14)$ 47$ 77$ 64$ (166)$ 22$

Special Items (5)

Foreign currency translation (gain) loss 14$ (17)$ 17$ 18$ 32$ (2)$ (1)$ 5$ 2$ 4$

Closure costs, impairment and other related charges 10 52 85 131 278 6 - 2 173 181

Inventory write-downs related to closures 1 3 6 7 17 1 - - 1 2

Net (gain) loss on disposition of assets - (2) - - (2) - - - - -

Non-operating pension and OPEB costs (credits) (3) (3) (2) (2) (10) 14 12 13 27 66

Write-down of equity method investment - - 50 11 61 - - - - -

Acquisition-related costs - - - - - - - - 4 4

Start-up costs - 1 1 2 4 1 1 2 1 5

Other (income) expense, net (1) (3) (2) (4) (10) (3) - (4) (1) (8)

Total special items 21$ 31$ 155$ 163$ 370$ 17$ 12$ 18$ 207$ 254$

Adjusted EBITDA (5)

Market pulp 20$ 37$ 33$ 26$ 116$ 25$ 38$ 36$ 30$ 129$

Tissue - - - - - - - - - -

Wood products 20 23 32 27 102 13 5 18 3 39

Newsprint 2 34 22 31 89 13 19 6 3 41

Specialty papers (3) 18 26 22 63 22 36 27 15 100


Total adjusted EBITDA 37$ 105$ 110$ 104$ 356$ 64$ 89$ 82$ 41$ 276$

2015 (1)2014 (1)



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, write-down of equity method investment, acquisition-related costs and other charges or credits. Special items are allocated to corporate and other.

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 Certain prior period amounts have been reclassified to conform to the 2015 presentation.

3 We define working capital as current assets less current liabilities excluding cash and cash equivalents and debt.

4 We define net debt as total debt less cash and cash equivalents.

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.

RESOLUTE FOREST PRODUCTS Q4 2015 RESULTSRichard Garneau, President & CEOJo-Ann Longworth, Senior Vice President & CFO

February 4, 2016

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