Slide 1: Third Quarter 2017 Financial Presentation Materials
Third Quarter 2017 Financial Presentation Materials
Slide 2: Safe Harbor
Safe Harbor Certain statements in this document regarding anticipated financial, business, legal or other outcomes including business and market conditions, outlook and other similar statements relating to Rayonier Advanced Materials’ future events, developments, or financial or operational performa
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures These presentation materials contain certain non-GAAP financial measures, including EBITDA, adjusted free cash flows, pro forma operating income, pro forma net income and adjusted net debt. These non-GAAP measures are reconciled to each of their respective most directly c
Slide 4: Financial Highlights
Financial Highlights ($ Millions) Quarter Ended Nine Months Ended 3Q 2017 3Q 2016 3Q 2017 3Q 2016 Sales $ 210 $ 207 $ 612 $ 638 Operating Income 18 41 57 112 Pro Forma Operating Income1 23 41 70 112 Net Income 16 22 30 62 Pro Forma Net Income1 10 22 28 56 EBITDA1 53 64 137 185 Pro Forma EBITDA1 44 6
Slide 5: Operating Income - Variance Analysis
Operating Income - Variance Analysis ($ Millions) Three Months Ended 1 (20) No Change 41 Pro Forma Operating Income Adjustments1 8 million 39 1 Pro Forma Adjustments 5 Operating Income 1813 Operating Operating Income Income 3Q 2016 Price Volume/Sales Mix Costs SG&A and Other 3Q 2017 291 Pro Forma Ad
Slide 6: Selected Financial and Operating Information
Selected Financial and Operating Information Three Months Ended Nine Months Ended September 23, September 24, September 23, September 24, 2017 2016 2017 2016 Sales Volume, thousands of metric tons Cellulose specialties 114 116 331 335 Commodity products 54 49 167 179 Total 168 165 498 514 Average Sa
Slide 7: Cost Improvement Initiatives
Cost Improvement Initiatives ($ Millions) 25 30 4 Year Total Cost Improvement 23 $125M - $140M 50 35 2015 2016 2017 2018* White Space Achieved Targeted Total $108 million in Cost Improvements achieved since 2014 * Breakdown of expected future cost savings on a run-rate basis included for illustrativ
Slide 8: Capital Resources & Liquidity
Capital Resources & Liquidity ($ Millions) Nine Months Ended September 23, 2017 September 24, 2016 Cash Provided by Operating Activities $ 118 $ 181 Cash Used for Investing Activities (44) (56) Cash Used for Financing Activities (21) 94 Adjusted Free Cash Flows* 77 123 Debt Principal Payments $ 787
Slide 9: Acquisition Financing
Acquisition Financing Acquisition financing committed through the refinancing of existing term loans Pro Forma Capital Structure ($ in millions) Debt Amount Term Interest Rate New Term Loan A-1 $ 230 2022 L + 2.25% New Term Loan A-2 $ 450 2024 L + 2.00% + Other Secured Debt $ 100 * Various Various S
Slide 10: 2017 Guidance
2017 Guidance ▪ Cellulose specialties (“CS”) prices approximately 4% below 2016 average prices primarily due to lower acetate mix and pricing ▪ CS volumes down 5% compared to 2016 due to the timing of revenue recognition, impact of Hurricane Irma and major customer production upset ▪ Commodity sales
Slide 11: Outlook
Outlook ▪ Cellulose specialties — Ethers and other cellulose specialties end-uses show strength providing opportunities for growth — Actetate remains competitive due to excess capacity and flat demand growth ▪ Commodity viscose markets improving off mid-year lows ▪ Absorbent materials markets resili
Slide 12: Strategic Pillars of Growth
Strategic Pillars of Growth RAYONIER)) YONIER Market Transformation Optimization Drives Growth and Shareholder Value RAYONIER Advanced Materials.
Slide 13: Combination Drives Successful Earnings Growth
Combination Drives Successful Earnings Growth ▪ Enhanced scale drives ability to execute growth strategy ▪ Superior capabilities in high purity cellulose ▪ Diversified paper and forest products profile ▪ Expansion of cost transformation initiative ▪ Significant high return capital project opportunit
Slide 14: Appendix
RAYONIER Advanced Materials. Appendix
Slide 15: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA is a non-GAAP measure used by our Chief Operating Decision Maker, existing stockholders and potential stockholders to measure how the Company is performing relative to the ass
Slide 16: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) Nine Months Ended December 31, September 23, 2017 September 24, 2016 EBITDA Reconciliation Net Income $ 30 $ 62 Depreciation and amortization 64 64 Interest expense, net 25 26 Income tax expense 18 33 EBITDA $ 137 $ 185 Acquisition related costs 13 —
Slide 17: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) September 23, September 24, 2017 2016 Adjusted Net Debt Reconciliation Current maturities of long-term debt $ 267 $ 8 Long-term debt & capital lease obligation 513 775 Total debt $ 780 $ 783 Original issue discount and debt issuance costs 7 9 Cash and
Slide 18: Reconciliation of Reported to Pro Forma Earnings
Reconciliation of Reported to Pro Forma Earnings ($ Millions, except per share amounts) Three Months Ended Nine Months Ended September 23, 2017 June 24, 2017 September 24, 2016 September 23, 2017 September 24, 2016 Per Per Per Per Per Pro Forma Operating and Diluted Diluted Diluted Diluted Diluted N
Slide 19: Reconciliation of Guided Non-GAAP Measures
Reconciliation of Guided Non-GAAP Measures ($ Millions) Minimum 2017 Net Income Guidance $ 25 $ 25 Income tax expense 14 14 Acquisition related costs 15 15 Interest expense, net 37 37 Depreciation and amortization 89 89 2017 Pro Forma EBITDA Guidance $ 180 $ 180 $ 25 Minimum Maximum 2017 Operating C