Slide 1: Clearwater Paper Corporation
Exhibit 99.1 Clearwater Paper Corporation March 2010
Slide 2: Forward-Looking Statements
Forward-Looking Statements – Our disclosure and analysis in this presentation contains, in addition to historical information, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our plans to build additional c
Slide 3: Business Overview
4g CLEARWATER PAPER Business Overview
Slide 4: Clearwater Paper Overview
Clearwater Paper Overview US $ in millions Leading manufacturer and seller of private-label consumer tissue and pulp & paperboard, with $1.25 billion in net sales and $174.2 million 3 of EBITDA for 2009 % of Net Sales (2009) ¹ WP 5.4% Consumer Pulp & Wood Products Paperboard Products (CPD) (PPD) (WP
Slide 5: Current Clearwater Paper Facilities Overview
Current Clearwater Paper Facilities Overview Spokane, WA Headquarters Office Lewiston, ID Tissue Mill 189,000 (Capacity/Tons) Tissue Converting 102,000 (Capacity/Tons) Bleached Kraft Pulp Mill 540,000 (Capacity/Tons) Bleached Paperboard Mill 435,000 (Capacity/Tons) Sawmill 205,000 (Capacity/MBF) Cyp
Slide 6: High-Quality, Premium Products: Consumer Products Segment
High-Quality, Premium Products Consumer Products Segment • Committed to maintaining high-quality products that match the quality of leading national brands • Only U.S. consumer tissue producer that manufactures solely private label tissue Price per Ton (Tissue) ¹ 3,000 $2,673 $2,553 2,500 $2,357 $2,
Slide 7: Clearwater Paper Business Overview: Consumer Products Segment
Clearwater Paper Business Overview Consumer Products Segment • Bath Tissue • “Big 3” grocery store chains • Household Towels (~60% of total segment sales in Products Key Customers • Napkins 2009) • Facial Tissue • Premier regional grocery store chains • 2 Tissue Mills (Idaho & Nevada) • Procter & Ga
Slide 8: Attractive Industry Characteristics - Tissue
Attractive Industry Characteristics -Tissue Attractive and stable segment of the paper market U.S. Tissue Demand (Indexed)¹ U.S. GDP % Change 160 4.5% 4.5% 5% 4.3% 3.8% 3.8% 134 135 139 140 130 132 4% 124 127 120 120 2.5% 114 117 3% 105 109 3.8% 103 100 100 2.8% 2% 2.6% 0.8% 2.3% 1.0% 2.0% 80 1.5% 1
Slide 9: Premier U.S. Private Label Tissue Producer
Premier U.S. Private Label Tissue Producer 2009 • Produced approximately 56% of private Top U.S. Grocery Tissue Suppliers Market label tissue products sold in grocery stores Share in the U.S. in 2009 Procter and Gamble 26.0% Kimberly-Clark 22.3% • Well positioned to benefit from value- Georgia Pacif
Slide 10: US Grocery Bathroom Tissue Market
US Grocery Bathroom Tissue Market Market Statistics: - Bathroom tissue & towels represent 86% of 2009 tissue opportunity at grocery - Bathroom tissue alone represents 54% of category 2006 Total U.S. Grocery 2009 Total U.S. Grocery Bathroom Tissue Segment Share Bathroom Tissue Segment Share Ultra seg
Slide 11: US Grocery Ultra Bathroom Tissue Market
US Grocery Ultra Bathroom Tissue Market Through-Air-Dried (TAD) driving ultra segment changes 2006 Total US Grocery Ultra 2009 Total US Grocery Ultra Bathroom Tissue Share Bathroom Tissue Share A/O Corp Charmin Ultra 1% Strong (TAD) Clearwater Paper (Conv) Charmin Ultra (TAD) 11% 11% 51% Clearwater
Slide 12: State-of-the-Art Consumer Products Converting Facilities
State-of-the-Art Consumer Products Converting Facilities Approximately $149mm of capital expenditures in Consumer Products business between 2000 and 2009 • Provides Clearwater with secure pulp supply and significant freight Idaho and drying cost savings • Well maintained assets , EBITDA per Ton (Tis
Slide 13: High-Quality, Premium Products: Pulp and Paperboard Segment
High-Quality, Premium Products Pulp and Paperboard Segment • Focus on high-end paperboard products, such as pharmaceuticals and cosmetics packaging – Superior print surfaces and cleanliness for discriminating domestic and international markets – Valued industry consulting – Effective logistics to me
Slide 14: Clearwater Paper Business Overview: Pulp and Paperboard Segment
Clearwater Paper Business Overview Pulp and Paperboard Segment • Folding Carton and Plate • Specialty mid-size paperboard • Liquid Packaging and Cup converters Products Key Customers • Commercial Print • International customers • Pulp Sales (~17% of total segment sales in 2009) • 2 Pulp Mills (Arkan
Slide 15: Attractive Industry Characteristics - Paperboard
Attractive Industry Characteristics – Paperboard 2009 North American Bleached Paperboard (SBS) Production Pulp and Paperboard ¹ Tembec Paperboard, Smurfit Stone, 2% Capacity 3% 100% International Paper, Top 5 Manufacturers 85% Weyerhaeuser, 5% 25% 80% 71% Rock-Tenn, 5% Evergreen Packaging, 60% 12% 4
Slide 16: Strategically Positioned Pulp & Paperboard Facilities
Strategically Positioned Pulp & Paperboard Facilities Facilities positioned to provide broad geographic reach and cost-efficient transportation points 2009 PPD Sales Europe, 1% Asia, 16% North America, 83% • Idaho Mill – Reduced transportation • Arkansas Mill costs to Asia versus East Coast competit
Slide 17: Clearwater Paper Business Overview: Wood Products Segment
Clearwater Paper Business Overview Wood Products Segment • Dimensional Framing Products Lumber • Builders & lumber brokers Key Customers • Specialty Appearance Grade Cedar Facilities • 1 Sawmill (Idaho) Key Competitors • Regional lumber mills Full-Time Employees Capacity (2009) • ~300 (2009) • Sawmi
Slide 18: Strategic Growth Initiatives
Strategic Growth Initiatives 17
Slide 19: Consumer Products Growth - Current
Consumer Products Growth - Current Consumer Products Announced Tissue Converting Expansion • Build two converting lines for approximately $30 million • Expected to generate more than $10 million in EBITDA in first year of operation • Construction expected to be completed in Q2 2011 • Still finalizin
Slide 20: Consumer Products Growth - Future
Consumer Products Growth - Future Potential Paper Machine • Potential new paper machine would produce TAD paper • TAD ultra tissue products continue to take market share from the conventional ultra, premium and economy/value segments • Will not be pursued unless expected returns significantly exceed
Slide 21: Financial Information
4g CLEARWATER PAPER Financial Information 20
Slide 22: Financial Objectives
Financial Objectives We intend to actively manage our business through the cycles • Employ effective capital spending for maximum shareholder returns – Closely control capital expenditures and allocate to high ROI projects • Maintain a prudent capital structure – Modest leverage through the cycles •
Slide 23: Financial Track Record
Financial Track Record U.S. $ in millions 1 Net Sales EBITDA 2 $174 5 Yr Average: $1,160mm 5 Yr Average: $101mm $68² $1,255 $1,250 13.9% $1,183 $101 $104 $1,117 $79 $63 $2 $9 $993 $114 $75 $107 $48 $92 $77 $633 $62 $672 $617 $53 $565 $138 9.0% $525 8.8% $36 6.0% 5.4% $504 $554 $41 $53 $445 $452 $34
Slide 24: Conservative Capital Structure
Conservative Capital Structure U.S. $ in millions As of % of x EBITDA x EBITDA December 31, 2009 Capitalization for 2009 5-Yr Average Cash and Short-Term Investments $190.8 New Debt Issuance 148.3 Total Debt $148.3 23.2 % 0.9 x 1.5 x 1 Book Value of Equity $490.7 76.8 % 2.8 x 4.9 x Total Capitalizat
Slide 25: Strong Cash Flow Generation
Strong Cash Flow Generation U.S. $ in millions 2006 2007 2008 2009 EBITDA (excluding alternative $100.6 $103.7 $75.4 $174.3 fuel mixture tax credits) 1 Capital Expenditures (27.5) (20.5) (21.3) (19.3) 2 Cash Taxes Paid (12.4) (14.1) (5.6) (41.3) Cash Net Interest Expense 3 (13.0) (13.0) (13.1) (15.1
Slide 26: Business Outlook
4g CLEARWATER PAPER Business Outlook 25
Slide 27: Business Outlook
Business Outlook • Pricing environment for Consumer Products and Pulp & Paperboard Segments appears stable relative to fourth quarter of 2009 • Consumer Products and Pulp & Paperboard Segment volumes expected to be steady in 2010 • Input costs expected to increase modestly for pulp and energy • Majo
Slide 28: Key Investment Highlights
Key Investment Highlights • Leading Producer in Attractive Market Segments – #1 producer in at-home private label grocery tissue – High-quality, premium products – Long-standing customer relationships • Attractive Growth Profile – Potentially attractive returns in TAD bath tissue projects – High ret
Slide 29: Experienced Management Team
Experienced Management Team Gordon Jones, CEO and Director • Over 25 years of experience in the paper industry in both operational and financial roles • Vice President of Potlatch in 2008 • CEO and Director of Blue Ridge Paper Products from 1999-2000 • Served in increasing roles for Smurfit Stone an
Slide 30: Thank you.
4g CLEARWATER PAPER Thank you. 29
Slide 31: Appendix A: Financial Detail
Appendix A: Financial Detail 30
Slide 32: Income Statement
Income Statement U.S. $ in millions 2005 2006 2007 2008 2009 Net Sales $992.7 $1,116.9 $1,183.0 $1,255.3 $1,250.1 Costs & Expenses Materials, Labor, & Other Operating Expenses $950.9 $1,033.6 $1,083.8 $1,179.4 $1,052.2 Selling, General, & Administrative 44.1 45.5 46.8 47.4 71.1 Income from Canadian
Slide 33: Balance Sheet
Balance Sheet U.S. $ in millions 2006 2007 2008 2009 Assets Current Assets Cash & Short-term investments $0.2 - $14.0 $190.8 Net Receivables 114.0 95.2 104.0 94.5 Taxes receivable - - - 101.3 Inventories 135.3 142.5 154.4 169.8 Prepaid Expenses 1.8 1.4 2.4 3.0 Deferred Taxes 8.2 8.6 14.8 12.9 $259.4
Slide 34: Cash Flow Statement
Cash Flow Statement U.S. $ in millions 2005 2006 2007 2008 2009 Cash Flow From Operations Net earnings¹ $(8.7) $20.9 $25.3 $9.7 $182.5 Depreciation and Amortization 54.9 54.3 51.3 47.0 47.4 Deferred Taxes (5.6) 8.3 (8.1) 4.9 (4.6) Working Capital Decrease / (Increase) (5.1) 13.9 37.6 (21.2) (99.6) O
Slide 35: Segment Financials - Consumer Products
Segment Financials – Consumer Products U.S. $ in millions 2005 2006 2007 2008 2009 Comments Net Sales Consumer Products $375.3 $445.0 $452.0 $504.6 $554.0 • Net sales increased by $49.4M, or 10% Intersegment Net and operating income grew $84.8M, or (0.1) (0.1) (0.1) (0.1) (0.1) 227%, from 2008 to 20
Slide 36: Segment Financials - Pulp & Paperboard
Segment Financials – Pulp & Paperboard U.S. $ in millions 2005 2006 2007 2008 2009 Comments Net Sales Paperboard $503.4 $538.2 $569.4 $644.4 $612.8 • Net sales decreased by $38.9M, or 6%, but operating income grew $191.3M, for 2009 Pulp 64.6 77.7 102.6 92.3 73.9 compared to 2008, driven primarily by
Slide 37: Segment Financials - Wood Products
Segment Financials – Wood Products U.S. $ in millions Comments 2005 2006 2007 2008 2009 Net Sales • Net sales decreased $18.7M, or 21%, from 2008 to 2009, due primarily to 23% Wood Products $97.6 $113.3 $121.4 $89.0 $70.3 decrease in net selling prices Intersegment Net (5.3) (6.3) (7.4) (10.5) (7.6)
Slide 38: Key Historical Cost Drivers
Key Historical Cost Drivers Key cost drivers are wood fiber, energy, transportation and maintenance 2007 2008 2009 Total Cost: $163 / ton $203 / ton $178 / ton Wood Fiber % of Total NA 34% 30% Cost of Sales Total Cost: $89.8 $113.7 $96.2 Energy % of Total 8% 9% 9% Cost of Sales Total Cost: $124.7 $1
Slide 39: Appendix B: US GAAP Reconciliation
Appendix B: US GAAP Reconciliation 38
Slide 40: Reconciliation of Non-GAAP to GAAP: EBITDA
Reconciliation of Non-GAAP to GAAP: EBITDA U.S. $ in millions 2005 2006 2007 2008 2009 Net Earnings (Loss) $(8.7) $20.9 $25.3 $9.7 $182.5 Debt Retirement Costs - - - - $6.3 Income Tax Provision (Benefit) (6.1) 12.4 14.1 5.6 93.2 Interest Expense 12.6 13.0 13.0 13.1 15.5 Earnings (Loss) Before Intere
Slide 41: Reconciliation of Non-GAAP to GAAP: EBITDA by Segment
Reconciliation of Non-GAAP to GAAP: EBITDA by Segment U.S. $ in millions Reconciliation - EBITDA by Segment 2005 2006 2007 2008 2009 Consumer Products Operating Income $7.5 $25.7 $17.6 $37.3 $122.1 Depreciation 15.6 15.8 16.3 15.7 16.0 EBITDA $23.0 $41.5 $33.9 $53.0 $138.1 Pulp & Paperboard Operatin
Slide 42: Reconciliation of Non-GAAP to GAAP: Free Cash Flow
Reconciliation of Non-GAAP to GAAP: Free Cash Flow U.S. $ in millions 2006 2007 2008 2009 Net Cash Provided by Operating $96.0 $108.5 $42.1 $54.2 Activities¹ Capital Expenditures (27.5) (20.5) (21.3) (19.3) Non-cash Net Interest Expense 0.4 Non-cash Tax Expense 51.9 Free Cash Flow $68.5 $88.0 $20.8
Slide 43: Reconciliation of Working Capital Dec (Inc)
Reconciliation of Working Capital Dec (Inc) U.S. $ in millions 2006 2007 2008 2009 Dec (Inc) in Receivables $(21.2) $18.8 $(8.8) $9.5 Inc in Tax Receivables - - - $(101.3) Dec (Inc) in Inventories 32.1 (8.5) (14.0) (16.8) Dec (Inc) in Prepaid Expenses (0.7) 0.4 (0.5) 0.1 Inc (Dec) in Taxes Payable 4
Slide 44: Reconciliation of Other Cash Flow Items
Reconciliation of Other Cash Flow Items U.S. $ in millions 2006 2007 2008 2009 Equity-Based Compensation $1.4 $3.3 $2.3 $3.0 Expense Employee Benefit Plans 3.0 (1.0) 1.1 16.7 (Gain) Loss on Disposal of Plant 0.3 0.1 (0.2) 0.2 and Equipment Increase in Other Assets - - (1.6) (0.5) Funding of Qualifie
Slide 45: Appendix C: Customer Relationships
Appendix C: Customer Relationships 44
Slide 46: Long-Standing Customer Relationships: Consumer Products Segment
Long-Standing Customer Relationships Consumer Products Segment Length of Customer Top 10 Customers Relationship Customer 1 25+ Customer 2 25+ Customer 3 12 Customer 4 25+ Customer 5 25+ Customer 6 25+ Customer 7 10 Customer 8 10 Customer 9 20 Customer 10 10 Average Length of Customer Relationships 1
Slide 47: Long-Standing Customer Relationships: Pulp and Paperboard Segment
Long-Standing Customer Relationships Pulp and Paperboard Segment Length of Customer Top 10 Customers Relationship Customer 1 10 Customer 2 26 Customer 3 20 Customer 4 37 Customer 5 37 Customer 6 41 Customer 7 21 Customer 8 26 Customer 9 21 Customer 10 11 Average Length of Customer Relationships 25 Y