EX-99.1 2 d693617dex991.htm EX-99.1 EX-99.1
Clearwater Paper Corporation
March 2014
Exhibit 99.1

Forward-Looking Statements
1
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 tissue market dynamics and our ability to capitalize on such, future growth and market opportunities, including in the Midwestern and Eastern U.S. regions and
non-grocery channels, tissue capacity increases and absorption of those increases, U.S. tissue and paperboard market demand, paperboard pricing, effects of Chinese paperboard
production, strategies to grow our tissue business and optimize profitability of our pulp and paperboard business, our DRIVE strategy, our estimated annual and quarterly Adjusted
EBITDA¹
run-rates, shipments from our new tissue machine and converting lines in Shelby, North Carolina, efficiency and cost savings projects and reductions to our cost structure,
capital
structure,
our
outlook
for
Q1
2014
including
shipment
volumes,
product
pricing
and
mix,
pulp
costs,
wood
fiber
costs
and
supply,
chemical
costs,
transportation
costs,
energy
costs,
cost
and
timing
of
major
maintenance
and
repairs
and
corporate
expenses.
Words
such
as
“anticipate,”
“expect,”
“intend,”
“will,”
“plan,”
“goals,”
“objectives,”
“target,”
“project,”
“believe,”
“schedule,”
“estimate,”
“may,”
and
similar
expressions
are
intended
to
identify
such
forward-looking
statements.
These
forward-looking
statements
are
based
on
management’s
current
expectations,
estimates,
assumptions
and
projections
that
are
subject
to
change.
Our
actual
results
of
operations
may
differ
materially
from
those
expressed
or implied
by
the
forward-looking
statements
contained
in
this
presentation.
Important
factors
that
could
cause
or
contribute
to
such
differences
include
the
risk
and
uncertainties
described from time to time in our public filings with the Securities and Exchange Commission, as well as the following:
•
customer acceptance and timing of purchases of our new through-air-dried (TAD) products and capacity;
•
competitive pricing pressures for our products, including as a result of increased capacity as additional manufacturing facilities are operated by our competitors;
•
difficulties with the optimization and realization of the benefits expected from our new TAD paper machine and converting lines in Shelby, North Carolina;
•
manufacturing or operating disruptions, including equipment malfunction and damage to our manufacturing facilities;
•
increased dependence on wood pulp;
•
changes in the cost and availability of wood fiber and wood pulp;
•
the loss of business from a significant customer;
•
changes in transportation costs and disruptions in transportation services;
•
labor disruptions;
•
changes in costs for and availability of packaging supplies, chemicals, energy and maintenance and repairs;
•
changes
in
customer
product
preferences
and
competitors'
product
offerings;
•
changes in the U.S. and international economies and in general economic conditions in the regions and industries in which we operate;
•
increased
supply
and
pricing
pressures
resulting
from
increasing
Asian
paper
production
capabilities;
•
cyclical industry conditions;
•
reliance on a limited number of third-party suppliers for raw materials;
•
our ability to generate cash; and
•
inability to successfully implement our expansion strategies.
Forward-looking statements contained in this presentation present management’s views only as of the date of this presentation or as indicated. We undertake no obligation to publicly
update forward-looking statements, whether as a result of new information, future events or otherwise.
¹
See Appendix for the definition of Adjusted EBITDA as well as the reconciliation to the most comparable GAAP measure.

Overview of Clearwater Paper
2

•
We are a company formed in late 2008 with more than 60
years of operating history
•
We operate two business segments
–
Pulp and Paperboard: 39% of 2013 net sales
–
Consumer Products: 61% of 2013 net sales
•
Financial overview for 2013
–
Net Sales: $1.9 billion
–
Adjusted
EBITDA
1
:
$200
million
–
2008
to
2013
Adjusted
EBITDA
1
CAGR:
22%
•
Approximately 3,900 employees
Introduction to Clearwater Paper
¹
See Appendix for the definition of Adjusted EBITDA as well as the reconciliation to the most comparable GAAP measure.
3

Consumer Products Division Market Dynamics
Stable Growth -
The tissue market has grown an average of 1%-2% annually since
1996, consistent with population growth
Source:
U.S.
Tissue
demand
per
RISI
for
North
America
only
from
US
Tissue
Data
January
2014,
U.S.
Population
per
U.S.
Census
December
2012
4

Consumer Products Division Overview
Clearwater Paper is one of the largest North American manufacturers of private label tissue, focused on
high value tissue products across all categories, retail channels and geographies
Key Products
Overview of Facilities
U.S. Tissue Industry Retail Channel Mix
3
¹
Represents 2013 annual capacity volumes including machine-glazed. 
²
Includes
Long
Island
capacity
of
38,000
tons
and
production
for
2013
of
29,000
tons.
3
IRI Panel data for Retail channel share by dollar amount sold.
4
Company sales data
2011
2013
Clearwater Paper Retail Channel Mix
4
2011
2013
Little Change in Industry Retail Channel Mix
Clearwater Focus on Diversifying Channel Mix
5

Private Label Continues to Capture Market
Share in Tissue
Clearwater Paper ranks as one of the largest North American private label tissue
manufacturers
Source:  IRIWorldwide
6

Opportunity for Private Label and Clearwater Paper
to Grow Share in the Midwest and East
Source:  IRIWorldwide
.
7

North American Market Demand vs. Capacity
Source: RISI August 2013 update for Outlook for World Tissue Business and company estimates
1
It
is
assumed
that
any
productivity
improvements
(approximately
100k
per
year
or
1%
of
capacity)
will
be
offset
by
closures
over
a
cycle
Notes: Projected capacity changes represents both virgin and recycled tissue capacity changes.
Please see Appendix for breakdown of specific projects reflected in the capacity changes.
Longer term healthy market dynamics remain intact.
Short term market pressures exist as the new TAD capacity comes on line
and is yet to be fully absorbed by demand.
8

Pulp and Paperboard Division Overview
Clearwater
Paper
ranks
as
one
of
the
top
five
largest
paperboard
manufacturers
in
North
America
Key Products
Overview of Facilities
2013 North American Bleached
Paperboard Production by Product Type²
2013 North American Bleached Paperboard
Production by Market Share
Source:  Company estimates, RISI
¹
Represents 2013 annual capacity volumes.
²
Represents ~
6.0 million tons.
9

Paperboard Demand Remains Stable and Pricing
Outlook is Favorable in the U.S.
Source:  RISI estimates as of January 2014
¹
Based on tons produced. Projections based on North American Packaging papers and board demand estimates per RISI.
²
Average price per short ton of 16 pt. SBS folding carton C1S. Price estimates per RISI.
Bleached paperboard prices are expected to remain at attractive levels through 2016
10
China expected to have minimal impact to Clearwater in 2014
•
U.S. market reliance on domestic SBS due to concerns with product quality
•
High price of pulp squeezing exporters margins and opportunities
•
Clearwater export business essentially all to Japan

Clearwater Paper’s
Strategic Plan
11

•
Lead private label in quality
•
Expand geographically
•
Expand retail channel penetration
Our Macro Strategy to Create Shareholder Value
•
Improve sales mix
•
Reduce costs
•
Continue to improve quality
12

Our 3 Year Strategy
1
13
1
We are currently in the second year.

Clearwater Paper Cross Cycle Financial Model
14
1
Includes Corporate SG&A percentage of net sales of 2.5%.
Net sales
100%
Gross profit % of net sales
17.0%
SG&A
1
% of net sales
(6.0%)
Operating profit % of net sales
11.0%
Net income % of net sales
5.0%
EBITDA % of net sales
15.0%

Successful Execution of Previously Stated Goals
Stated Goal
Timeframe
Current Status
Complete New Paper Machine and
Corresponding Converting Lines at Shelby,
NC Facilities
2010 –
2013
70k ton Shelby TAD machine was on budget with startup in Q4 2012
at
expected run rate by end of the year with 54k tons produced in 2013
Operating 6 converting lines at Shelby with a new napkin line started up in
Q3 2013 and the startup of relocated line from Thomaston in Dec 2013
Grow Market Share in Eastern U.S. and
Expand in other Retail Channels
Ongoing
Increase penetration in retail markets in the Mid West and Eastern U.S.
Increase drug, club and mass retail channel share
Mass and Dollar share of Clearwater shipments up 81% versus 2011
Optimize the Paperboard Business
Ongoing
Enhanced access to fiber supply with chipping facility acquisition near
Lewiston, Idaho
Record Q4 2013 EBITDA
1
margin of 23%
2
Cost and production improvement projects
Idaho major maintenance cycle improvement from 12 to 18 months
Maintain a Prudent Capital Structure to lower
Weighted Average Cost of Capital
Ongoing
Conservative capital structure with target leverage through the cycle of 3x
and ample liquidity
Clearwater Paper refinancing of 10 5/8% debt with 4 1/2% debt
Asset Rationalization/Cost Infrastructure
Ongoing
Closure
of
Thomaston
converting
operations
along
with
relocating
existing
lines to Shelby, Oklahoma City and Las Vegas
Closure of Long Island converting operations
Achieve 15% cross cycle EBITDA
1
margin
Return of Capital to Shareholders
Ongoing
Completion of $100 million share repurchase program in 2013
Announced new $100 million share repurchase program in 2014
15
¹
See Appendix for the definition of Adjusted EBITDA as well as the reconciliation to the most comparable GAAP measure.
2
Pulp
and
Paperboard
operating
income
for
Q4’13
of
$37.2
million
plus
depreciation
of
$6.1
million
resulting
in
EBITDA
of
$43.2.

Clearwater Paper’s
Value Proposition
16

Clearwater Paper is a Leader Amongst its Peers
in Value Creation
17
Source:
Bloomberg
as
of
February
28,
2014
1
Small cap tissue peers include Cascades, Orchids, and Wausau.
²
Paperboard peers include International Paper, Graphic Packaging, Kapstone, MeadWestvaco, RockTenn, Packaging Corp of America, and Sonoco.
³
Large cap consumer product peers include Kimberly-Clark and Procter & Gamble.
Note: Total Shareholder Return includes with dividends reinvested and stock price performance.
515%+ Total Shareholder Return Since Spin-off

Which Has Led to Multiple Expansion Since the Spin
18
Source: Bloomberg, Capital IQ, market data as of February 28, 2014
1
Small cap tissue peers include Cascades, Orchids, and Wausau.
²
Paperboard peers include International Paper, Graphic Packaging, Kapstone, MeadWestvaco, RockTenn, Packaging Corp of America and Sonoco.
³
Large cap consumer product peers include Kimberly-Clark and Procter & Gamble.

Path to Target $300M+ Adj. EBITDA
1
2013 Status
(@2011 Price & Cost Structure)
19
1
Non-GAAP measure –
See definition and reconciliation to GAAP.
2
In September 2012 we announced a $300 million Adjusted EBITDA target for 2014, which was based on 2011 prices and input costs.
This
table
shows
percentage
changes
in
certain
price
and
input
costs
between
2011
and
2013.

Bridge to Pro Forma $75 Million Quarterly Run Rate
1
1
Assumes
no
change
in
prices
or
input
costs
from
Q4’13.
This
information
is
based
upon
management’s
current
expectations
and
estimates,
which
are
in
part
based
on
market
and
industry
data.
Many factors are outside the control of management, especially including input costs for commodity products, and  actual results may differ materially from the information set forth above.
See Forward-Looking Statements”
on page 1.
2
Non-GAAP measure –
See definition and reconciliation to GAAP.
3
Does
not
include
expected
maintenance
cadence
savings
as
there
were
no
major
maintenance
costs
in
Q4’13
and
none
expected
through
Q3’14.
Extended maintenance cadence benefit is $1-$2M per quarter on a ‘straight line basis’.
20

Clearwater Paper’s
Outlook
21

Consumer Products
Paperboard
Corporate
Shipment
volumes
Updated Outlook –
Flat
Feb 2014 Outlook –
1-3% higher
Updated Outlook –
1% Higher
Feb 2014 Outlook –
Stable
Price/Mix
Updated Outlook –
No change
Feb 2014 Outlook –
TAD bathroom
tissue mix  increase 0-1% Higher
Updated Outlook –
1% Higher
Feb 2014 Outlook –
0-1% Higher
Pulp/Wood
Fiber costs
Updated Outlook –
$1M Higher
Feb 2014 Outlook –
$.5M-$1M Higher
Updated Outlook –
No change
Feb 2014 Outlook –
$1.5M-$3M Higher
Chemical costs
Updated Outlook –
No change
Feb 2014 Outlook –
Stable
Updated Outlook –
No change
Feb 2014 Outlook –
Stable
Transportation
costs
Updated Outlook –
$1M Higher
Feb 2014 Outlook –
Stable
Updated Outlook –
$.5M Higher
Feb 2014 Outlook –
Stable
Energy costs
Updated Outlook –
$3M-$4M Higher
Feb 2014 Outlook –
$1M-$2M Higher
Updated Outlook –
$2M Higher
Feb 2014 Outlook –
$1-$2M Higher
Maintenance &
Repairs
Updated Outlook –
No change
Feb 2014 Outlook –
$1M Higher
Updated Outlook –
No change
Feb 2014 Outlook –
Stable
SG&A
Updated Outlook –
No change
Feb 2014 Outlook –
$1M Higher
Updated Outlook –
No change
Feb 2014 Outlook –
Stable
Updated Outlook –
No Change
Feb 2014 Outlook –
Expected run rate of $11M-$13M
1
This information is based upon management’s updated expectations and estimates as of February 5, 2014, which are in part based on market and industry data. 
Many
factors
are
outside
the
control
of
management,
including
particularly
input
costs
for
commodity
products,
and
actual
results
may
differ
materially
from
the
information
set
forth
above.
See “Forward-Looking Statements”
on page 1.
2
Excluding estimated Q1 Long Island closure costs of $5 million.
22
Updated Outlook –
No Change
Feb 2014 –
Other
Cost Reductions
($1M-$3M)
First
Quarter
2014
Outlook
(Compared
to
Q4’13)
1
Updated consolidated outlook:
at low end of Feb 2014 outlook range due
to weather related impacts
•
Net sales –
flat to up 2%
•
Operating margin –
7-8%
2

Appendix
23

Reconciliation of GAAP to Non-GAAP:
Clearwater
Paper
EBITDA
1
and
Adjusted
EBITDA
1
¹
See
Appendix
for
the
definition
of
Adjusted
EBITDA
as
well
as
the
reconciliation
to
the
most
comparable
GAAP
measure.
2
Interest expense, net for 2009 and 2013 includes debt retirement costs of $6.2 and $ 7.1 million respectively.
($ in millions)
24
2008
2009
2010
2011
2012
2013
Net earnings
$9.7
$182.5
$73.8
$39.7
$64.1
$107.0
Income tax provision (benefit)
5.6
93.2
2.4
31.2
47.5
(68.7)
Interest expense, net²
13.1
21.7
22.6
44.8
33.8
61.1
Earnings before interest and income taxes
28.5
297.4
98.8
115.7
145.4
99.3
Depreciation and amortization
47.0
47.4
47.7
76.9
79.3
90.3
EBITDA
1
$75.4
$344.8
$146.5
$192.7
$224.7
$189.6
Alternative Fuel Mixture Tax Credit
-
(170.6)
-
-
-
-
Cellu Tissue acquisition related expenses
-
-
20.3
-
-
-
Lewiston, Idaho sawmill sale related adjustments
-
-
-
2.9
-
-
Loss on sale of foam assets
-
-
-
-
1.0
-
Expenses associated with Metso litigation
-
-
-
-
2.0
-
Costs associated with  Thomaston facility closure
-
-
-
-
-
6.0
Directors equity-based compensation expense
-
2.6
3.7
1.5
1.4
4.1
Adjusted EBITDA¹
$75.4
$176.8
$170.5
$197.1
$229.1
$199.7

Reconciliation of GAAP to Non-GAAP:
Clearwater
Paper
Q4’13
EBITDA
1
and
Adjusted
EBITDA
1
¹
See Appendix for the definition of Adjusted EBITDA as well as the reconciliation to the most comparable GAAP measure.
($ in millions)
25
Q4'13
Net earnings
$82.9
Income tax provision (benefit)
(55.8)
Interest expense, net
11.3
Earnings before interest and income taxes
38.3
Depreciation and amortization
22.7
EBITDA
1
$61.0
Costs associated with  Thomaston facility closure
3.1
Directors equity-based compensation expense
1.4
Adjusted EBITDA
¹
$65.4

Reconciliation of GAAP to Non-GAAP:
Clearwater
Paper
Pro
Forma
Adjusted
EBITDA
1
($ in millions)
¹
See Appendix for the definition of Adjusted EBITDA as well as the reconciliation to the most comparable GAAP measure.
26
Shelby
Cellu
Tissue
Synergies
Cost
Optimization
Cross
Cycle
Adjusted
EBITDA
Operating income
$37.0
$40.0
$16.0
$210.0
Depreciation and amortization
13.0
-
3.0
90.0
EBITDA
1
$50.0
$40.0
$19.0
$300.0
-
-
-
-
Adjusted EBITDA
¹
$50.0
$40.0
$19.0
$300.0

Definitions of Non-GAAP Measures
EBITDA
is a non-GAAP measure that Clearwater Paper management uses as a supplemental performance measure to evaluate the cash
generating capacity of Clearwater Paper. The most directly comparable GAAP measure is net earnings.  EBITDA, as defined by Clearwater Paper
management,
is
net
earnings
adjusted
for
net
interest
expense,
income
taxes,
and
depreciation
and
amortization.
It
should
not
be
considered
as
an
alternative to net earnings computed under GAAP.
Adjusted EBITDA
is a non-GAAP measure that Clearwater Paper management defines as EBITDA adjusted for items that we do not believe are
indicative of our core operating performance, including acquisition and disposition related expenses, alternative fuel mixture tax credits, sale of
foam assets, expenses associated with the Metso litigation and costs associated with directors equity based compensation.  The most directly
comparable GAAP measure is net earnings.  It should not be considered as an alternative to net earnings computed under GAAP.
27
Clearwater Paper Definitions of Non-GAAP Measures

North American Tissue Projected Capacity Change
Source:  RISI and Other Industry
28
Company
Mill/Location
Conv/TAD
Capacity
Change
Date
Channel/Business/Products
Announced New Capacity
Confidential
Confidential
Conv
80,000
2014*
Metso Advantage DCT 200TS
Confidential
Confidential
Conv
35,000
2014*
Metso Advantage DCT 100+
Confidential
Confidential
Conv
70,000
2014*
Metso Advantage DCT
Orchids Paper Products
Pryor, OK
Conv
30,000
2015:Q2*
New PM from Recard
First Quality Tissue
Anderson, SC
TAD
70,000
2015:Q3*
IGIC
Baileyville, ME
Conv
60,000
2015:Q4*
Economy category
IGIC
Baileyville, ME
Conv
60,000
2016:Q1*
Economy category
First Quality Tissue
Anderson, SC
ATMOS
75,000
2016:Q1*
Retail/P.L./BRT
First Quality Tissue
Anderson, SC
TAD
70,000
2016:Q3*
Announced Shutdowns
Orchids Paper Products
Pryor, OK
Conv
(13,000)
2014:Q4*
Closure of the two smallest PM's
Announced Rebuilds
Cascades Tissue Group
St. Helens, OR
Conv
55,000
2014:Q4
Rebuild of a specialty PM to tissue
Net Capacity Change
592,000
Procter & Gamble
Box Elder, Utah
TAD
80,000
ON HOLD
Retail/Brand/Bounty
Capacity Changes in the North American Tissue Industry
Potential Projects
* = estimated