RESOLUTE FOREST PRODUCTS Investor Presentation

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RESOLUTE FOREST PRODUCTS Investor Presentation
RESOLUTE FOREST
PRODUCTS
Investor Presentation
Richard Garneau, President and CEO
Jo-Ann Longworth, Senior Vice President and CFO
May 2015
CAUTIONARY STATEMENTS REGARDING
FORWARD-LOOKING INFORMATION
Statements in this presentation that are not reported financial results or other historical information of Resolute Forest
Products 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 Forest Products’ 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 the presentation referred to above include, but
are not limited to, 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 in this section and in our other filings with the U.S. Securities Exchange Commission and the Canadian
securities regulatory authorities. We disclaim 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 USD unless otherwise noted.
May 2015
RFP Investor Presentation
2
WHAT IS RESOLUTE?
1 Operational excellence maximizes shareholder value and earnings power
2 Synergistic and diversified asset base as a platform for growth
3 Disciplined capital management: flexible and conservative capital
structure supports growth and diversification
LTM Q1’15 adjusted EBITDA of $376mm
Adjusted EBITDA margin
Market pulp $/mt
Wood products $/mbf
Newsprint $/mt
Specialty papers $/st
$120
24%
30%
$100
Corporate
Adj. EBITDA
$(25)mm
$80
$73
$60
$40
21%
$47
$33
25%
$20
$19
$0
Note: percentages based on adjusted EBITDA excluding corporate
May 2015
($20)
RFP Investor Presentation
3
1. OPERATIONAL EXCELLENCE
Market pulp 000's mt
Wood products 000's mbf
Newsprint 000's mt
Specialty papers 000's st
650
Iroquois Falls, Baie-Comeau PM1,
Clermont PM5: (-465k mt)
and mill optimization
600
550
Gatineau
(+180k mt)
534
Calhoun (+215k mt)
Fort Frances (-100k mt)
500
450
 Aggressive cost reductions
Laurentide
(-190k mt)
• Low SG&A / sales ratio
• Eliminated 670 positions
Comtois
(+145k mt)
400
Ignace &
Thunder Bay
pellet plant
393
382
since 2012, saving
350
Maniwaki
(+130k mbf)
328
~$70mm/year
300
May 2015
RFP Investor Presentation
4
2. DIVERSIFIED ASSET BASE
 Synergistic, diversified and
complimentary asset base
 ~50% of adjusted EBITDA
from market pulp and wood
products
 Optimized paper segments
generate significant EBITDA:
• supports growth and
diversification strategy
Thunder Bay
pellet plant
May 2015
• fiber management
advantage of integration
• more stable earnings from
multiple products
RFP Investor Presentation
5
CALHOUN UPGRADE
• Ahead of schedule on $100 million upgrade to Calhoun pulp and paper mill
− Includes world-class continuous digester and new wood chip processing
equipment
− Will considerably lower mill costs, add pulp capacity and allow for greater
grade flexibility
Digester island prep as of
end of September
Calhoun digester
(model shot)
Calhoun mill
May 2015
RFP Investor Presentation
6
NEW ONTARIO SAWMILLS
• Ignace sawmill now operating
• Atikokan sawmill expected to start-up in Q2
• Expect to start generating positive EBITDA in Q3 2015
Atikokan commissioning
Ignace lumber
to Atikokan kiln
May 2015
Ignace wood yard
RFP Investor Presentation
7
3. FINANCIAL STRENGTH
 Flexible and conservative capital structure
 Net debt / LTM adjusted EBITDA <1.0x
Tax attributes (US$)
GROSS
AFTER TAX
U.S. operating loss carryforwards
$1.8b
$700mm
Canadian operating loss carryforwards
$200mm
$50mm
Undepreciated capital costs (mainly Canada)
> $3.0b
$1.0b
n/a
$300mm
Other attributes (e.g., R&D expenses)
 U.S. NOLs start to expire ~2021
May 2015
RFP Investor Presentation
8
DIVERSIFIED ASSET BASE
Pulp
Newsprint
South
Korea
Uncoated Paper
Coated Paper
Headquarters Office
Dolbeau Baie Comeau
St-Felicien
Alma
Kénogami
Clermont
Amos
Mokpo
Port Access
Ponderay
Thunder Bay
Gatineau
Montreal
Menominee
Thorold
Capacity
Newsprint (mm mt)
2.6
Specialty papers (mm mt)
1.5
Market pulp (mm mt)
1.7
Wood products (bn bf)
2.81
Fairmont
Calhoun
Augusta
Grenada
Note: The map includes all pulp and paper manufacturing facilities we owned or
operated as of December 31, 2014. It excludes facilities that are permanently closed,
recycling operations and hydro facilities.
Catawba
Coosa Pines
1. Our current supply of fiber, particularly in light of Québec’s new forestry regime, limits production to a maximum of 2 billion board feet
per year. In 2014, we shipped 1.6 billion board feet of wood products.
May 2015
RFP Investor Presentation
9
RESOLUTE’S COGEN AND
HYDRO FACILITIES
Cost savings
We operate cogeneration facilities and a network of hydro-electric installations, with total capacity of
370MW, to generate lower cost energy for internal consumption.
Approximate annualized cost savings to operations:
$55-60 million
External sales
Mill
Type
Capacity
(MW)
Dolbeau-Mistassini, QC
Cogen
28
192,000
Gatineau, QC
Cogen
15
110,000
St-Félicien, QC
Cogen
43
300,000
Thunder Bay, ON
Cogen
65
390,000
EBITDA
improvement from
COGEN
May 2015
Current annualized external sales
(MWh/year)
Q4’13
Q1’14
Q2’14
Q3’14
Q4’14
Q1’15
$10MM
$13MM
$14MM
$8MM
$8MM
$12MM
RFP Investor Presentation
10
BALANCED PRODUCT PORTFOLIO
AND MARKETS (2014)
Sales by
Product
Wood
Products
14%
Newsprint
33%
EBITDA by
Product
Wood
Products
27%
Canada
10%
Mexico
5%
Brazil
3%
Korea
2%
Other
UK
14%
Italy1%
1%
Newsprint
24%
Pulp
23%
Specialty
17%
Specialty
30%
Shipments by
Country
United
States
64%
Pulp
32%
Note: excludes corporate and other segment
Note: excludes wood products segment
Raw Material Sourcing1 (2014)
Newsprint
Recycle Content
ONP/OMG
18%
Virgin Fiber
Canada
Sawmills/internal
62%
Market purchases
38%
Virgin Fiber
82%
Production by
Country
South
Korea
3%
United
States
42%
Canada
55%
Note: excludes wood products segment
(100% Canada)
Fuel Use for
Steam (P&P)
Electricity Use
(P&P)
Black Liquor Solids
40%
Purchased - Hydro
46%
Purchased - Other
Other
2%
3%
Owned Hydro Power
Purchased - Nuclear
8%
Bunker C
Bark and Biosolids
14%
1%
36%
Purchased – Natural Gas
Natural Gas
Self-Generated
8%
20%
Purchased - Coal Cogeneration
12%
10%
1. Excludes wood products segment.
FY 2014 Revenues: $4.3 billion
May 2015
RFP Investor Presentation
11
FINANCIAL
HIGHLIGHTS
May 2015
RFP Investor Presentation
12
FINANCIAL HIGHLIGHTS
(US$ millions)
Q1’14
Q2’14
Q3’14
Q4’14
2014
Q1’15
Sales
$1,016
$1,091
$1,096
$1,055
$4,258
$920
Adjusted EBITDA1
402
108
112
106
366
50
Interest expense
12
11
12
12
47
12
Net debt
358
335
333
260
260
273
Cash flows from operations
(41)
63
58
106
186
29
Cash invested in fixed assets
(36)
(46)
(60)
(51)
(193)
(40)
Long-term debt, net of current,
to LTM adjusted EBITDA
1.7x
1.6x
1.6x
1.6x
1.6x
1.6x
Net debt to LTM adjusted
EBITDA
1.0x
0.9x
0.9x
0.7x
0.7x
0.7x
1.
2.
May 2015
EBITDA is a non-GAAP financial measure. Refer to the appendix for additional information, including the company’s calculation of adjusted EBITDA.
The abnormally cold winter had a $55 million unfavorable impact on our first quarter results.
RFP Investor Presentation
13
LIQUIDITY AND CASH FLOW
 Cash provided by operating
activities of $29mm in Q1
─ down $77mm from Q4
 Q1 capex of $40mm
Q4 2014
Q1 2015
Q1 2014
Cash
$324mm
-4%
+35%
Working capital
$693mm
+2%
-2%
Net debt
$273mm
+5%
-24%
─ down $11mm from Q4
 Liquidity = $788mm
Available Liquidity
2015
2014
2013
2012
(US$ millions)
Q1
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Q4
Total debt
597
597
598
598
598
599
604
604
532
534
Cash on hand
324
337
265
263
240
322
271
248
215
263
Available under ABL credit facility
464
521
572
567
548
561
566
467
537
519
May 2015
RFP Investor Presentation
14
PENSION
• ↑ in pension and OPEB1 expense of $55mm for 2015 ($15mm in Q1)
–
–
–
no impact on funding requirement
relates to amortization of $330 million increase in 2014 liability
could reverse in subsequent years given volatility of interest rates
• Net pension and OPEB obligations of $1,505mm as of March 31 ↓
$126mm
–
favorable FX impact; pension contributions and OPEB payments
• Discount rate sensitivity (50bps) : ~$300mm on net balance sheet pension
and OPEB obligations
(in $US millions)
Q1’2015
2014
2013
net pension and OPEB liabilities
1,505
1,631
1,301
2015E
N/A
Q1’2015
4.0%
2014
4.9%
2013
pension contributions2
145
27
164
155
OPEB payments
16
3
19
22
pension and OPEB expense
81
21
26
60
(in
$US
millions)
U.S.
GAAP
discount rate
1.
2.
at 12/312
Other postretirement benefit
Includes defined benefit, defined contribution and target benefit plans
May 2015
RFP Investor Presentation
15
PROJECTED EBITDA SENSITIVITIES
(2015)
EBITDA ($US millions) 1
Variable
Metric
Change
Newsprint Pricing
$/mt
+ / - $25
Specialty Papers Pricing
$/st
+ / - $25
Pulp Pricing
$/mt
+ / - $25
+ / - $40
Lumber Pricing 2
$/mbf
+ / - $25
+ / - $40
Net Foreign Exchange
C$/US$
+ / - $0.01
Natural Gas
$/gj
+ / - $0.50
- / + $8
ONP Prices
$/st
+ / - $10
- / + $7
SOP Prices
$/mt
+ / - $10
- / + $5
+ / - $57
+ / - $42
- / + $16
Note: Presented on a U.S. GAAP consolidated basis
1.
Based on our operating configuration as of December 31, 2014. This presentation measures only the impact of pricing and items directly related to price,
and assumes that every other factor is held constant.
2.
Includes effect of stumpage fees.
May 2015
RFP Investor Presentation
16
SEGMENTS
May 2015
RFP Investor Presentation
17
CUSTOMERS AND APPLICATIONS
Product
Customer
End Use
Market pulp
major consumer goods companies,
paper and related product makers
tissue, packaging, specialty paper
products, diapers and other
absorbent products
Wood products – lumber and
engineered wood
NA construction industry and major
retailers
construction-grade lumber and Ijoists; bed frame components, finger
joints and furring strips
Wood products – wood chips
Resolute’s Canadian pulp and paper
mills
Resolute newsprint, specialty and
coated papers and pulp
newspaper publishers all over the
world
newspapers
commercial printers in NA
inserts and flyers
Specialty – supercalender
commercial printers
magazines, coupons and newspaper
supplements
Specialty – coated papers
commercial printers, publishers,
catalogers and retailers
magazines, catalogs and advertising
inserts
Specialty – standard grades
commercial printers
commercial printing, educational
textbooks, digital printing, trade and
paperback books and directories
Newsprint
May 2015
RFP Investor Presentation
18
MARKET PULP
Operating capacity of 1.3 mm metric tons of virgin pulp
(8% of NA capacity), including 260k mt of fluff pulp
•
400k mt of recycled bleached kraft pulp
•
About 80% of RFP virgin pulp is softwood-based
Q1’15
2014
2013
Sales
218
974
1,053
EBITDA1
24
119
94
Shipments (000’s mt)
328
1,383
1,583
(in US$ millions)
average transaction price
"All-in" delivered cost ²
$740
$720
$/mt
$700
$680
$660
$640
Capacity (000’s mt)
North America
•
$666
$634
$620
$600
1.
2.
May 2015
EBITDA is a non-GAAP financial measure. Refer to the Appendix for a definition and
reconciliation of non-GAAP financial measures.
The “all-in” delivered cost is the total cost of each unit shipped (cost of sales, depreciation
and amortization, distribution costs and selling, general and administrative expenses)
RFP Investor Presentation
Source: RISI; Resolute shows current total capacity
19
INDUSTRY OVERVIEW
Market pulp (Q1)





2014 RFP Market Pulp Shipments
Global chemical pulp demand ↑ 6% in Q1’15
–
NA ↑ 2%; W. Europe ↑ 3%; China ↑ 11%
Northern softwood ↓ 1%; southern SW ↓ 3%
North America
Hardwood ↑ 13%
74%
–
China ↑ 22%; W. Europe ↑ 7%; NA ↑ 6%
–
Eucalyptus shipments ↑ 19%
–
Total northern and southern HW ↑ 2%; NA ↓ 5%
RFP average transaction price ↓ $29/mt in Q1’15
–
softer market prices for softwood and fluff
Latin America
RFP shipments ↓ 23k mt from Q4’14
Europe
10%
Africa/
Middle East
2%
Asia
7%
7%
Source: PPPC
May 2015
RFP Investor Presentation
20
WOOD PRODUCTS
• 16 sawmills producing dimension spruce-pine-fir (or “SPF”)
lumber (stud and random) for the NA market
2 remanufactured and 2 engineered wood products facilities
producing products for specialized applications, such as
wood i-joists, trusses and bed frames
Two new sawmills in Ontario (Ignace and Atikokan) coming
online in 2015 to add 265mmbf of annual capacity
•
•
(in US$ millions)
Q1’15
2014
Capacity (000’s mbf)
2013
Sales
139
610
569
EBITDA1
13
102
77
Shipments (000’s mbf)
393
1,585
1,480
1.
EBITDA is a non-GAAP financial measure. Refer to the Appendix for a definition and reconciliation
of non-GAAP financial measures.
average transaction price
"all-in" delivered cost
$420
North America
1
(est.)
2
$400
$/mbf
$380
(est.)
$360
$353
$340
$320
$300
$342
1.
2.
Includes structural lumber, engineered solid section and engineered I-joists.
Our current supply of fiber, particularly in light of Québec’s new forestry
regime, limits production to a maximum of 2 billion board feet per year. In
2014, we shipped 1.6 billion board feet of wood products.
Source: Company filings
Performance linked to N.A. housing starts
May 2015
RFP Investor Presentation
21
INDUSTRY OVERVIEW
Wood products (Q1)




Q1’15 SAAR U.S. housing starts < 1mm; actuals ↑ 4%
Shipments ↑ 3mmbf in Q1’15
–
first deliveries of Ignace lumber
Average price down $25/mbf
–
softer market and weaker C$
Jan-Feb NA exports to Japan & China ↓ 27%
Annual U.S. Housing Starts (millions)
Lumber Pricing
Random Lengths Composite
$550
2x4 -RL #1-2 KD GL
2x4x8 Stud KD GL
Q1 2015
$500
$450
$400
$350
$300
Source: U.S. Census Bureau
May 2015
Source: Random Lengths
RFP Investor Presentation
22
NEWSPRINT
Q1’15
2014
2013
Sales
291
1,402
1,473
EBITDA1
10
92
113
Shipments (000’s mt)
534
2,371
2,392
(in US$ millions)
1.
Capacity (000’s mt)
Largest producer globally (by capacity)
2.6 mm metric tons (~9% of total worldwide capacity)
2.4 mm metric tons (~41% of NA capacity)
10 newsprint facilities in NA and 1 in South Korea
1
World
•
•
•
•
EBITDA is a non-GAAP financial measure. Refer to the Appendix for a definition and
reconciliation of non-GAAP financial measures.
average transaction price
1
"all-in" delivered cost
$630
$/mt
$610
$590
$570
$550
$557
$545
North America
$650
2
$530
1.
Includes Ponderay joint venture
2.
Adjusted to reflect 100k mt of newsprint capacity closure in Brompton
Source: RISI; Resolute shows current total capacity
The world’s largest newsprint producer by capacity
May 2015
RFP Investor Presentation
23
INDUSTRY OVERVIEW
Newsprint (Q1)




NA demand ↓ 12%
2014 RFP Newsprint Shipments
–
operating rates ~90%
–
exports ↓ 21%
Europe
World demand ↓ 12%
North America
7%
–
Asia ↓ 11%; W. Europe ↓ 12%; Lat. Am ↓ 16% 59%
Asia
–
2014 world demand of 26 million mts
11%
Africa/
Global business under pressure, esp. NA producers:
Middle East
–
accelerating pace of structural decline
–
FX disadvantage / strong USD
1%
Latin America
–
low world operating rates
22%
RFP cut 465,000 mts of annual capacity (Q4’14)
–
three machines in Canada
Source: PPPC
May 2015
RFP Investor Presentation
24
SPECIALTY PAPERS
•
•
•
2014 RFP Specialty Paper Shipments
1.5mm mt of capacity in specialty papers

1.1mm mt of uncoated mechanical

450k mt of coated mechanical
Largest producer of uncoated mechanical in NA
(~27%)

3rd largest in the world (~8%)

announced closure of Laurentide mill and
of idled Fort Frances mill, previously
under extended market-related outage
North America
94%
Latin America
4%
3rd largest producer of coated mechanical
grades in NA (~14%)
average transaction price
2014
2013
$800
Sales
272
1,272
1,366
$780
EBITDA1
18
65
112
$760
Shipments (000’s st)
382
1,778
1,837
$/st
Q1’15
(in US$ millions)
EBITDA is a non-GAAP financial measure. Refer to the Appendix for a definition and
reconciliation of non-GAAP financial measures.
"all-in" delivered cost
$740
$720
1.
Asia
2%
$700
$711
$709
$680
May 2015
RFP Investor Presentation
25
UNCOATED MECHANICAL (Q1)



NA industry demand for UM ↓ 8%
–
SC grades ↓ 4% (~20% of RFP cap.)
–
standard grades ↓ 9%
–
white papers (super-brights & highbrights) ↓ 2% (~35% of RFP cap.)
–
operating rates ~88%
RFP shipments ↓ 61k st
–
seasonally lower demand
–
↓ capacity following Laurentide closure
Resolute Connect UFS @ Calhoun mill
Source: PPPC
May 2015
RFP Investor Presentation
26
UNCOATED MECHANICAL
North America
World
Capacity (000’s mt)
Source: RISI; Resolute shows current total capacity
May 2015
RFP Investor Presentation
27
COATED MECHANICAL
Capacity (000’s mt)
NA coated demand ↓ 3% (~30% of RFP specialty
capacity)
–
operating rates ~99%
North America
World

Source: RISI; Resolute shows current total capacity
Source: PPPC
May 2015
RFP Investor Presentation
28
APPENDIX
Resolute Forest Products Inc.
Financial and Operating Statistics (Page 1 of 5)
2014
First
Dollars in millions, except per-share amounts
Second
2015
Third
Fourth
Total
First
Second
Third
Fourth
Total
Income Statement Data
Total sales
$
1,016
$
1,091
$
1,096
$
1,055
$
4,258
$
920
$
920
Operating income (loss)
(33)
(8)
(40)
(93)
(174)
(15)
(15)
Interest expense
(12)
(11)
(12)
(12)
(47)
(12)
(12)
Other income (expense), net
(13)
20
(65)
(25)
(83)
5
5
Net income (loss) including noncontrolling interests
(50)
-
(116)
(108)
(274)
(32)
(32)
Net income (loss) attributable to noncontrolling interests
-
Net income (loss) attributable to Resolute Forest Products Inc.
2
(50)
Diluted net income (loss) per common share
$
Dividends declared per common share
$
(0.53)
-
-
(2)
$
$
(0.02)
-
1
(116)
$
$
(1.23)
-
3
(109)
$
(1.15)
$
-
(277)
$
$
(2.93)
-
$
$
1
1
(33)
(33)
(0.35)
-
$
$
(0.35)
-
Average diluted shares outstanding (in thousands)
94,562
94,576
94,590
94,683
94,606
94,883
94,883
Ending shares outstanding (in thousands)
94,589
94,590
94,590
94,786
94,786
94,801
94,801
Financial Position
Cash and cash equivalents
Working capital
$
(1)
240
$
263
$
265
$
337
$
337
$
324
$
324
705
695
704
679
679
693
693
Fixed assets, net
2,256
2,184
2,098
1,985
1,985
1,956
1,956
Total assets
5,257
5,247
5,036
4,921
4,921
4,746
4,746
1
1
1
1
1
1
1
597
597
597
596
596
596
596
Current portion of long-term debt
Long-term debt, net of current portion
Net debt
(2)
Total Resolute Forest Products Inc. shareholders' equity
Noncontrolling interests
Total equity
358
335
333
260
260
273
273
2,801
2,828
2,680
2,106
2,106
2,088
2,088
12
14
14
11
11
12
12
2,813
2,842
2,694
2,117
2,117
2,100
2,100
Cash Flow Information
Cash flows provided by (used in) operations
Cash invested in fixed assets
Dispositions of assets
Cash flows provided by (used in) investing activities
$
(41)
(36)
(34)
$
63
(46)
$
58
$
106
(60)
(51)
$
186
(193)
$
29
(40)
$
29
(40)
2
4
4
10
1
1
(46)
(53)
(28)
(161)
(40)
(40)
Payments of debt
(1)
-
-
(1)
(2)
-
-
Cash flows provided by (used in) financing activities
(1)
(1)
-
(5)
(7)
-
-
May 2015
RFP Investor Presentation
30
Resolute Forest Products Inc.
Financial and Operating Statistics (Page 2 of 5)
2014
First
Dollars in millions, except per unit items
Second
2015
Fourth
Third
Total
First
Second
Third
Fourth
Total
Sales
Newsprint
$
346
$
364
$
346
$
346
$
1,402
$
291
$
291
Specialty papers
301
325
329
317
1,272
272
272
Market pulp
234
241
255
244
974
218
218
Wood products
135
161
166
148
610
139
Total sales
$
1,016
$
1,091
$
1,096
$
1,055
$
4,258
$
920
139
$
920
Shipments to 3rd Parties (thousands of units)
Newsprint (mt)
579
611
584
597
2,371
534
534
Specialty papers (st)
420
452
463
443
1,778
382
382
Market pulp (mt)
335
334
363
351
1,383
328
328
Wood products (mbf)
353
420
422
390
1,585
393
393
Average Transaction Price per Unit
Newsprint (mt)
$
598
$
596
$
591
$
579
$
591
$
545
$
545
Specialty papers (st)
716
718
712
715
715
711
711
Market pulp (mt)
696
725
701
695
704
666
666
Wood products (mbf)
382
384
394
378
385
353
353
May 2015
RFP Investor Presentation
31
Resolute Forest Products Inc.
Financial and Operating Statistics (Page 3 of 5)
2014
First
Dollars in millions, except per unit items
Second
2015
Third
Fourth
Total
First
Second
Third
Fourth
Total
Operating Income (Loss)
Newsprint
$
Specialty papers
Market pulp
Wood products
Corporate / other
Total operating income (loss)
(15)
$
18
$
5
$
15
$
23
$
(6)
$
(6)
(24)
(3)
6
4
(17)
1
1
8
24
21
13
66
10
10
12
15
24
18
69
5
5
(14)
(62)
(96)
(143)
(315)
(25)
(25)
$
(33)
$
(8)
$
(40)
$
(93)
$
(174)
$
(15)
$
(15)
$
12
$
14
$
14
$
13
$
53
$
11
$
11
Selling, General And Administrative expenses
Newsprint
Specialty papers
9
9
10
9
37
8
8
Market pulp
8
9
9
9
35
8
8
Wood products
5
6
6
6
23
6
6
Corporate / other
2
3
2
-
7
8
Total selling, general and administrative expenses
8
$
36
$
41
$
41
$
37
$
155
$
41
$
41
$
623
$
568
$
582
$
555
$
582
$
557
$
557
Operating Cost per Unit
Newsprint (mt)
Specialty papers (st)
774
723
700
706
725
709
709
Market pulp (mt)
674
652
645
655
656
634
634
Wood products (mbf)
347
350
337
332
341
342
342
125
142
123
115
115
105
105
99
114
122
83
83
92
92
Market pulp (mt)
100
115
94
93
93
102
102
Wood products (mbf)
176
154
124
117
117
133
133
Product Inventory (thousands of units)
Newsprint (mt)
Specialty papers (st)
May 2015
RFP Investor Presentation
32
Resolute Forest Products Inc.
Financial and Operating Statistics (Page 4 of 5)
2014
First
Dollars in millions
Second
2015
Third
Fourth
Total
First
Second
Third
Fourth
Total
Net income (loss) including noncontrolling interests
Newsprint
$
Specialty papers
Market pulp
Wood products
Corporate / other
(15)
$
18
$
5
$
15
$
23
$
(6)
$
(6)
(24)
(3)
6
4
(17)
1
1
8
24
21
13
66
10
10
12
15
24
18
69
5
5
(31)
(54)
(172)
(158)
(415)
(42)
(42)
Total net income (loss) including noncontrolling interests
$
(50)
$
-
$
(116)
$
(108)
$
(274)
$
(32)
$
(32)
Interest expense
$
12
$
11
$
12
$
12
$
47
$
12
$
12
Income tax provision (benefit)
$
(8)
$
1
$
(1)
$
(22)
$
(30)
$
10
$
10
$
18
$
17
$
17
$
17
$
69
$
16
$
16
Depreciation and Amortization
Newsprint
Specialty papers
22
22
20
18
82
17
17
Market pulp
13
13
13
14
53
14
14
Wood products
8
8
8
9
33
8
8
Corporate / other
1
2
2
1
6
2
Total depreciation and amortization
$
2
62
$
62
$
60
$
59
$
243
$
57
$
57
3
$
35
$
22
$
32
$
92
$
10
$
10
EBITDA (3)
Newsprint
$
Specialty papers
(2)
19
26
22
65
18
18
Market pulp
21
37
34
27
119
24
24
Wood products
20
23
32
27
102
13
13
(26)
(40)
(159)
(167)
(392)
(18)
(18)
Corporate / other
Total EBITDA
$
16
$
74
$
(45)
$
$
14
$
(17)
$
17
$
(59)
$
18
$
(14)
$
47
$
47
32
$
(2)
$
(2)
Special Items (3)
Foreign currency translation (gain) loss
Closure costs, impairment and other related charges
10
52
85
131
278
6
6
Inventory write-downs related to closures
1
3
6
7
17
1
1
Net (gain) loss on disposition of assets
-
(2)
-
-
(2)
-
-
Write-down of equity method investment
-
-
50
11
61
-
-
Start-up costs
-
1
1
2
4
1
1
Other (income) expense, net
Total Special Items
(1)
$
(3)
(2)
(4)
(10)
(3)
(3)
24
$
34
$
157
$
165
$
380
$
3
$
3
3
$
35
$
22
$
32
$
92
$
10
$
10
Adjusted EBITDA (3)
Newsprint
$
Specialty papers
(2)
19
26
22
65
18
18
Market pulp
21
37
34
27
119
24
24
Wood products
20
23
32
27
102
13
13
Corporate / other
(2)
(6)
(2)
(2)
(12)
(15)
(15)
Total Adjusted EBITDA
May 2015
$
40
$
108
$
112
$
106
$
366
$
RFP Investor Presentation
50
$
50
33
Resolute Forest Products Inc.
Financial and Operating Statistics (Page 5 of 5)
Notes
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.
3
We define EBITDA by reportable segment as net income (loss) including non-controlling interests from our Consolidated Statements of Operations, allocated to our reportable segments (newsprint, specialty papers,
market pulp and wood products) in accordance with FASB ASC 290, “Segment Reporting,ˮ adjusted for depreciation and amortization. In addition, EBITDA for the Corporate and Other segment is defined as net income
(loss) including non-controlling interests from our Consolidated Statements of Operations after allocation to our reportable segments, adjusted for interest expense, income taxes and depreciation and amortization.
We define Adjusted EBITDA as EBITDA excluding special items. Special items include foreign currency translation gains and losses, closure costs, impairment and other related charges, inventory write-downs related to
closures, gains and losses on disposition of assets, write-down of equity method investment, start-up costs, and other charges or credits. Special items are allocated to the Corporate and Other segment.
Internally, we use Adjusted EBITDA as an indicator of our reportable segments and the Company's performance. Therefore, this non-GAAP measure is consistent with our internal presentation. We believe that this measure
is useful because it allows the reader to more easily compare our ongoing financial performance from period to period. This non-GAAP measure should be considered in addition to and not a substitute for operating income
(loss) by reportable segment and consolidated operating income (loss) provided in the notes to our Consolidated Financial Statements in our filings with the Securities and Exchange Commission.
May 2015
RFP Investor Presentation
34
RESOLUTE FOREST
PRODUCTS
Investor Presentation
Richard Garneau, President and CEO
Jo-Ann Longworth, Senior Vice President and CFO
May 2015

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