Rayonier Advanced Materials Inc. · NYSE:RYAM

Rayonier Advanced Materials — Q2 2019 Earnings Presentation

22 slides from Rayonier Advanced Materials's earnings presentation, Aug 8, 2019

1. Slide 1: Second Quarter 2019 Financial Presentation Materials

   Second Quarter 2019 Financial Presentation Materials

2. 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

3. Slide 3: Non-GAAP Financial Measures

   Non-GAAP Financial Measures These presentation materials contain certain non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted free cash flows, adjusted operating income, adjusted net income and adjusted net debt. These non-GAAP measures are reconciled to each of their respective

4. Slide 4: Q2'19 Consolidated Financial Highlights

   Q2’19 Consolidated Financial Highlights Revenue*  Revenue of $488 million with Adjusted EBITDA of $29 16% million  Sequential growth in High Purity Cellulose segment 15% $488 million 54% — Hardwood costs in Jesup improving — Temiscaming operations stabilized 15% — Commodity viscose and fluff impac

5. Slide 5: Key Strategic Updates

   Key Strategic Updates Portfolio Optimization  Matane asset sale for $175 million — LTM EBITDA of ~$43 million; 3-year average EBITDA of ~$27 million — Reduces exposure to commodity pulp business to 240k MT at Temiscaming site with integrated paperboard and co-located High Purity Cellulose facilitie

6. Slide 6: Sharp Commodity Price Declines

   Sharp Commodity Price Declines Viscose Pulp Lumber $950 $700 $600 $900 $500 $400 $850 $300 2x4 Random Lengths Grade 2 & Better - Great Lakes Viscose Pulp Delivered to China 2x4 8' Stud - Great Lakes $800 $200 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Bleached Eucalyptus

7. Slide 7: Covenant Update

   Covenant Update  Senior Secured Credit Facility — Includes $599 million of Term Loans and $250 million of Revolving Credit Facilities, including $50 million funded as of Q2 — Contains two financial maintenance covenants:  Net Secured Debt to Covenant EBITDA < 3.00x  Covenant EBITDA to Interest Ex

8. Slide 8: High Purity Cellulose – Results & Outlook

   High Purity Cellulose – Results & Outlook Quarter Ended Q2 2019 Results: Jun 29, Mar 31, Jun 30,  Sales decreased $16 million from Q2’18 driven by 2019 2019 2018 a 1% decline in CS sales price due to Chinese Key Financials ($ millions) tariffs, sales mix and the sale of the resin Net Sales $ 269 $

9. Slide 9: Forest Products – Results & Outlook

   Forest Products – Results & Outlook Quarter Ended Q2 2019 Results: Jun 29, Mar 31, Jun 30,  Sales decreased $16 million from Q2’18 driven by 2019 2019 2018 33% decline in sale price for lumber partially Key Financials ($ millions) offset by 18% higher volumes due to increased Net Sales $ 81 $ 75 $

10. Slide 10: Pulp – Results & Outlook

    Pulp – Results & Outlook Quarter Ended Q2 2019 Results: Jun 29, Mar 31, Jun 30,  Sales decreased $13 million from Q2’18 driven by 2019 2019 2018 17% decline in pulp sales price partially offset by Key Financials ($ millions) higher sales volumes Net Sales $ 78 $ 70 $ 91  Adjusted EBITDA decreased

11. Slide 11: Paper – Results & Outlook

    Paper – Results & Outlook Quarter Ended Q2 2019 Results: Jun 29, Mar 31, Jun 30,  Sales decreased $10 million from Q2’18 driven 2019 2019 2018 primarily by 17% decline in newsprint pricing and Key Financials ($ millions) 15% lower newsprint volumes due to reliability Net Sales $ 74 $ 70 $ 84 issues

12. Slide 12: Bridge H1'18 to H1'19

    Bridge H1’18 to H1’19 ($ Millions) Operating Income 120 100 80 (85) 60 $112 40 20 (19) 0 (34) ($27) (20) (1) (40) H1 2018 Sales Price Sales Volume / Mix Costs SG&A & Other H1 2019 / Other  Sales price driving $85 million of first half decline from prior year, primarily from commodity products  Vol

13. Slide 13: Financial Highlights

    Financial Highlights Three Months Ended Six Months Ended  Sales primarily impacted by lower ($ Millions) June 29, June 30, June 29, June 30, commodity prices 2019 2018 2019 2018 Sales $ 488 $ 542 $ 971 $ 1,064  Adjusted EBITDA negatively impacted by lower sales price and Operating Income (Loss) (8

14. Slide 14: Appendix

    RAYONIER Advanced Materials. Appendix

15. 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

16. Slide 16: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures ($ Millions) Forest High Purity Corporate Three Months Ended Products Pulp Paper Cellulose & Other Total June 29, 2019 Net Income (Loss) $ (17) $ 11 $ 5 $ 6 $ (20) $ (15) Depreciation and amortization 3 1 4 28 — 36 Interest expense, net — — — — 16 16 Income tax ex

17. Slide 17: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures ($ Millions) Forest High Purity Corporate Six Months Ended Products Pulp Paper Cellulose & Other Total June 29, 2019 Net Income (Loss) $ (22) $ 21 $ 5 $ 2 $ (43) $ (37) Depreciation and amortization 4 3 9 57 — 73 Interest expense, net — — — — 30 30 Income tax expe

18. Slide 18: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures ($ Millions) June 29, 2019 December 31, 2018 Adjusted Net Debt Reconciliation Current maturities of long-term debt $ 22 $ 15 Long-term debt & finance lease obligation 1,215 1,173 Total debt $ 1,237 $ 1,188 Original issue discount, premiums and debt issuance costs

19. Slide 19: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures ($ Millions) June 29, 2019 June 30, 2018 Adjusted Free Cash Flows: Cash provided by (used for) operating activities 18 89 Capital expenditures (51) (41) Adjusted Free Cash Flows $ (33) $ 48 19

20. Slide 20: Reconciliation of Reported to Adjusted Earnings

    Reconciliation of Reported to Adjusted Earnings ($ Millions, except per share amounts) Three Months Ended Six Months Ended June 29, 2019 March 30, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Adjusted Operating and Net Income (a): $ $ $ $ $ Operating Income $ (8) $ (18) $ 66 $ (27) $ 112 Non-recur

21. Slide 21: Average Sales Price & Volume

    Average Sales Price & Volume Three Months Ended Six Months Ended June 29, March 30, June 30, June 29, June 30, 2019 2019 2018 2019 2018 High Purity Cellulose Cellulose Specialties Price ($ per metric ton) $ 1,310 $ 1,284 $ 1,324 $ 1,297 $ 1,350 Volume (metric tons) 146 150 150 295 303 Commodity Prod

22. Slide 22: Key Production & Pricing

    Key Production & Pricing Q2’19 Q1’19 Q2’18 Average Average Average Product Index* Index Price Index Price Index Price Cellulose • None • N/A • N/A • N/A Specialties High Purity • Bleached Kraft Fluff • $1,260 • $1,332 • $1,288 Commodity • Viscose Pulp delivered to China • $845 • $890 • $940 • 2x4 Ra

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