US $





        --  Q3 adjusted EBITDA of $112 million / net income of $0.18 per
            share, excluding special items
        --  Strong performances once again for wood products and pulp
        --  Thunder Bay pellet plant ramping up; Ignace sawmill about to
            start
        --  Closure costs and impairment contribute to GAAP net loss of
            $116 million / $1.23 per share

MONTREAL, Oct. 30, 2014 /PRNewswire/ - Resolute Forest Products Inc. (NYSE: RFP) (TSX: RFP) today reported net income for the quarter ended September 30, 2014, excluding special items, of $17 million, or $0.18 per share, down from net income, excluding special items, of $29 million, or $0.31 per share, in the third quarter of 2013. Sales were $1.1 billion in the quarter, down $34 million, or 3%, from the third quarter of 2013.

GAAP net loss was $116 million, or $1.23 per share, compared to a net loss of $588 million, or $6.22 per share, in the third quarter of 2013 as last year's results were significantly affected by a $619 million non-recurring, non-cash income tax charge.

"Our adjusted EBITDA improved sequentially thanks to the best lumber quarter in recent history and continued strength of market pulp," said Richard Garneau, president and chief executive officer. "We're building momentum in the wood products business: the Thunder Bay pellet plant is starting its ramp-up, our Ignace sawmill is about to begin its own ramp-up, and we're on schedule with the construction of our Atikokan sawmill. Year-to-date shipments of newsprint and specialty papers outperformed industry trends, demonstrating the strength of our position, but we took some newsprint downtime in the quarter to reduce finished goods inventory. More broadly, we met our commitment to reduce finished goods inventory levels in a disciplined manner across all segments, especially pulp."

Non-GAAP financial measures, such as adjustments for special items and adjusted EBITDA, are explained and reconciled below.

Segment Operating Income Variance Against Prior Quarter

Market Pulp

Operating income in the market pulp segment was $21 million, $3 million less than the second quarter. The average transaction price slipped by $24 per metric ton, or 3%, to $701, mostly because of lower average prices for hardwood grades, as the market absorbs major new eucalyptus capacity. Overall shipments significantly improved from the disappointing levels of the first two quarters, up by 29,000 metric tons, or 9%, compared to the second quarter. Finished goods inventory fell by 21,000 metric tons, or 18%. The operating cost per unit (the "delivered cost") dropped by $7 per metric ton, or 1%, despite higher maintenance costs.

Wood Products

The wood products segment generated operating income of $24 million in the quarter, a $9 million improvement over the second quarter, reaching its highest level since the 2007 start of the U.S. housing downturn. Shipments were unchanged, reflecting sustained demand despite the slow recovery in U.S. housing starts. Further to a 13% reduction in the second quarter, the company reduced finished goods inventory by an additional 19% this quarter. The average transaction price was $10 per thousand board feet higher, or 3%, reflecting an increase in market prices for both stud and random length lumber grades. The delivered cost fell by 4%, or $13 per thousand board feet, mostly because the company recognized additional tax credits in connection with infrastructure investments.

The company started the ramp-up process at its new wood pellet plant in Thunder Bay in October. The facility will produce 45,000 metric tons annually under a ten-year agreement to supply Ontario Power Generation's Atikokan Generating Station, the largest capacity, 100% biomass-fueled, power plant in North America.

Newsprint

Operating income was $5 million in the newsprint segment this quarter, $13 million less than the second quarter. Shipments fell by 27,000 metric tons, or 4%, mostly because of market downtime and wood shortages in domestic-focused mills. Accordingly, domestic shipments represented 58% of total shipment volume, compared to 60% in the previous quarter. The average transaction price slipped by less than 1% as a result of continued price deterioration in certain export markets. The delivered cost increased by $14 per metric ton, or 2%, from the second quarter, due primarily to lower contribution from the Thunder Bay cogeneration facility as a result of a longer than expected annual outage, as well as turbine damage and lost production caused by multiple power transmission disruptions to the mill. This was partially offset by the recognition of an energy savings incentive in the U.S. southeast. Finished goods inventory fell by 19,000 metric tons, or 13%.

Specialty Papers

The specialty papers segment generated operating income of $6 million, a $9 million improvement over the second quarter. The average transaction price slipped less than 1%, which is largely due to erosion in higher-end white papers. Shipments rose by 2%, or 11,000 short tons, in this seasonally stronger quarter, especially on the higher end of the grade spectrum. The delivered cost in the quarter was $700 per short ton, down by $23 per ton, or 3%, from the previous quarter, mostly because of maintenance timing. Finished goods inventory closed the quarter up by 7% to meet the expected continuation in seasonal demand. The closure of the Laurentide mill in Shawinigan, Québec, as of mid-October will reduce annual production capacity for supercalender grades by 210,000 short tons.

Consolidated Quarterly Operating Income Variance Against Year-Ago Period

The company recorded an operating loss of $40 million in the third quarter, compared to operating income of $36 million in the year-ago period. Overall pricing was higher as a result of a 13% increase in the average transaction price for wood products and 4% for market pulp, offset in part by 4% lower average pricing for specialty papers and 3% for newsprint. Shipments were 1% higher in both wood products and specialty papers, but they were 9% lower in market pulp, largely because of greater internal consumption of hardwood kraft pulp and market downtime in recycled bleach kraft pulp. Shipments were also 5% lower in newsprint, which reflects lower export volumes compared to the same period last year.

Overall manufacturing costs were essentially unchanged, due mainly to lower pension and other postretirement benefit expenses and the recognition of an energy savings incentive in the U.S. southeast, offset by higher natural gas prices, the write-off of stores in connection with the permanent closure of the Laurentide mill, higher wood costs and lower contribution from cogeneration facilities. The weaker Canadian dollar had a $15 million favorable effect on operating income.

The company incurred $85 million of accelerated depreciation and other closure-related costs, almost all of which are related to the Laurentide mill. It also recorded a $50 million write-down to the investment in Ponderay Newsprint Company, an unconsolidated partnership in which the company owns a 40% interest and acts as managing partner. Selling, general and administrative expenses were $3 million higher in the quarter, primarily because of allowances for doubtful accounts.

Outlook

Mr. Garneau added: "We expect our Ignace sawmill to begin ramp-up before year-end, to build its production and inventory gradually in the first quarter and to continue to improve production efficiency over the course of the year. The high capacity planer mill at our new Atikokan sawmill will start to dress Ignace's lumber in the first quarter, with the ramp-up of its own sawline scheduled to begin in the second quarter. We expect these sawmills to start generating positive earnings as early as the third quarter of next year. This is a great time to be building momentum in the wood products business, where we've seen sustained demand support in the market despite the slow recovery in U.S. housing starts.

The pulp market continues to adjust to major hardwood pulp capacity increases, but our outlook has turned to cautious optimism, based on the market's resilience this year. Turning to paper, the pace of price declines in coated mechanical and supercalender grades is leveling off; we're hopeful that recent industry capacity rationalization announcements will help to ease some of the pressure the industry experienced this year as a result of lower operating rates. In newsprint, recent demand trends are forcing us to respond with targeted market downtime initiatives, particularly at some of our Québec mills struggling with high wood costs and wood availability issues resulting from the implementation of the new forest tenure system. We remain confident that our operating platform has the scale, financial strength and cost advantage to withstand market challenges."

Earnings Conference Call

The company will hold a conference call to discuss the financial results at 9:00 a.m. (ET) today. The public is invited to join the call at (877) 223-4471 at least fifteen minutes before its scheduled start time. A simultaneous webcast will also be available using the link provided under "Presentations and Webcasts" in the "Investors" section of www.resolutefp.com. A replay of the webcast will be archived on the company's website; a phone replay will also be available until November 15 by dialing (800) 585-8367, conference number 19291049.

Description of Special Items


    Special items                               Third quarter Third quarter

    (in millions)                                        2014          2013

    Foreign currency translation loss (gain)             $ 17         $ (3)

    Closure costs, impairment and other related            85             4
    charges

    Inventory write-downs related to closures               6             -

    Start-up costs                                          1             3

    Write-down of equity method investment                 50             -

    Other income, net                                     (2)           (2)

    U.S. deferred income tax asset valuation                -           619
    allowance

    Income tax effect of special items                   (24)           (4)

      Total                                             $ 133         $ 617




Cautionary Statements Regarding Forward-Looking Information

Statements in this press release and the earnings conference call referred to above that are not reported financial results or other historical information of Resolute Forest Products Inc. 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; 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's 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, 2013.

All forward-looking statements in the presentation referred to above are expressly qualified by the cautionary statements contained or referred to above and in Resolute's other filings with the U.S. Securities and Exchange Commission and the Canadian securities regulatory authorities. Resolute disclaims 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.

About Resolute Forest Products
Resolute Forest Products is a global leader in the forest products industry with a diverse range of products, including newsprint, specialty papers, market pulp and wood products. The Company owns or operates nearly 40 pulp and paper mills and wood products facilities in the United States, Canada and South Korea, and power generation assets in Canada. Marketing its products in close to 90 countries, Resolute has third-party certified 100% of its managed woodlands to at least one of three internationally recognized sustainable forest management standards. The shares of Resolute Forest Products trade under the stock symbol RFP on both the New York Stock Exchange and the Toronto Stock Exchange.

Resolute and other member companies of the Forest Products Association of Canada, as well as a number of environmental organizations, are partners in the Canadian Boreal Forest Agreement. The group works to identify solutions to conservation issues that meet the goal of balancing equally the three pillars of sustainability linked to human activities: environmental, social and economic.

Resolute is proud to be ranked by Corporate Knights as one of Canada's Best 50 Corporate Citizens for 2014. Corporate Knights is an organization recognized globally for its transparent and objective approach to measuring corporate sustainability performance. Resolute Forest Products and Richard Garneau, president and chief executive officer, have also been named to Canada's Clean50, recognizing leaders who have made the greatest contributions to sustainable development or clean capitalism in Canada.






                                   RESOLUTE FOREST PRODUCTS INC.

                             CONSOLIDATED STATEMENTS OF OPERATIONS

                    (Unaudited, in millions except per share amounts)

                                                                           

                                       Three Months           Nine Months

                                  Ended September 30,   Ended September 30,

                                     2014       2013       2014       2013

                                                                           

                                                                           

    Sales                         $  1,096   $  1,130   $  3,203   $  3,311

    Costs and expenses:                                                    

      Cost of sales, excluding
      depreciation, amortization                                  
      and distribution costs           816        857      2,449      2,572

      Depreciation and                                            
      amortization                      60         61        184        182

      Distribution costs               134        134        388        387

      Selling, general and                                        
      administrative expenses           41         38        118        126

      Closure costs, impairment
      and other related charges                                   
      (1)                               85          4        147         56

      Net gain on disposition of                                  
      assets                             -          -        (2)        (2)

                                                                           

    Operating (loss) income           (40)         36       (81)       (10)

                                                                           

    Other (expense) income:                                                

      Interest expense                (12)       (12)       (35)       (39)

      Other (expense) income, net                                 
      (2)                             (65)          5       (58)       (42)

                                                                           

    (Loss) income before income                                   
    taxes                            (117)         29      (174)       (91)

                                                                           

    Income tax benefit                                            
    (provision)                          1      (617)          8      (546)

                                                                           

    Net loss including                                            
    noncontrolling interests         (116)      (588)      (166)      (637)

    Net (income) loss
    attributable to                                               
    noncontrolling interests             -          -        (2)          1

                                                                           

    Net loss attributable to                                      
    Resolute Forest Products Inc. $  (116)   $  (588)   $  (168)   $  (636)

                                                                           

    Net loss per share
    attributable to Resolute                                      
    Forest Products Inc. common
    shareholders:                                                          

                                                                           

      Basic                       $ (1.23)   $ (6.22)   $ (1.78)   $ (6.72)

      Diluted                       (1.23)     (6.22)     (1.78)     (6.72)

                                                                           

    Weighted-average number of
    Resolute Forest Products Inc.                               
    common shares outstanding:                                             

                                                                           

      Basic                           94.6       94.6       94.6       94.7

      Diluted                         94.6       94.6       94.6       94.7










                                   RESOLUTE FOREST PRODUCTS INC.

                                     CONSOLIDATED BALANCE SHEETS

                                       (Unaudited, in millions)

                                                                           

                                               September 30,   December 31,

                                                     2014            2013

    Assets                                                                 

    Current assets:                                                        

      Cash and cash equivalents                $         265   $        322

      Accounts receivable trade, net                     528            536

      Accounts receivable other                           85             98

      Inventories, net                                   563            529

      Deferred income tax assets                          31             32

      Other current assets                                79             45

        Total current assets                           1,551          1,562

    Fixed assets, net                                  2,098          2,289

    Amortizable intangible assets, net                    63             66

    Deferred income tax assets                         1,174          1,266

    Other assets                                         150            202

        Total assets                           $       5,036   $      5,385

                                                                           

    Liabilities and equity                                                 

    Current liabilities:                                                   

      Accounts payable and accrued liabilities $         550   $        533

      Current portion of long-term debt                    1              2

      Deferred income tax liabilities                     32             32

        Total current liabilities                        583            567

    Long-term debt, net of current portion               597            597

    Pension and other postretirement benefit                  
    obligations                                        1,094          1,294

    Deferred income tax liabilities                        5             26

    Other long-term liabilities                           63             62

        Total liabilities                              2,342          2,546

                                                                           

    Commitments and contingencies                                          

                                                                           

    Equity:                                                                

      Common stock                                         -              -

      Additional paid-in capital                       3,754          3,751

      Deficit                                          (760)          (592)

      Accumulated other comprehensive loss             (253)          (271)

      Treasury stock at cost                            (61)           (61)

        Total Resolute Forest Products Inc.                   
        shareholders' equity                           2,680          2,827

      Noncontrolling interests                            14             12

        Total equity                                   2,694          2,839

        Total liabilities and equity           $       5,036   $      5,385





                                  RESOLUTE FOREST PRODUCTS INC.

                            CONSOLIDATED STATEMENTS OF CASH FLOWS

                                     (Unaudited, in millions)

                                                                         

                                                            Nine Months

                                                      Ended September 30,

                                                        2014       2013

    Cash flows from operating activities:                                

    Net loss including noncontrolling interests       $ (166)   $   (637)

    Adjustments to reconcile net loss including
    noncontrolling interests to net cash provided by   
    operating activities:                                                

      Share-based compensation                              3           5

      Depreciation and amortization                       184         182

      Closure costs, impairment and other related
      charges                                             139          47

      Inventory write-downs related to closures            10           5

      Deferred income taxes                               (9)         546

      Net pension contributions and other
      postretirement benefit payments                   (128)        (65)

      Net gain on disposition of assets                   (2)         (2)

      Loss on translation of foreign currency
      denominated deferred income taxes                    63          53

      Gain on translation of foreign currency
      denominated pension and other postretirement
      benefit obligations                                (51)        (52)

      Gain on forgiveness of note payable                   -        (12)

      Net loss on extinguishment of debt                    -          59

      Net planned major maintenance payments              (1)         (6)

      Write-down of equity method investment               50           -

      Dividends received from equity method investees
      in excess of income                                   2           5

      Changes in working capital:                                        

        Accounts receivable                                35         (8)

        Inventories                                      (44)          12

        Other current assets                             (10)         (5)

        Accounts payable and accrued liabilities            -         (5)

      Other, net                                            5        (12)

        Net cash provided by operating activities          80         110

                                                                         

    Cash flows from investing activities:                                

    Cash invested in fixed assets                       (142)       (124)

    Disposition of assets                                   6           4

    Proceeds from insurance settlements                     -           4

    Decrease in restricted cash                             1           3

    Decrease in deposit requirements for letters of    
    credit, net                                             2           -

        Net cash used in investing activities           (133)       (113)

                                                                         

    Cash flows from financing activities:                                

    Issuance of long-term debt                              -         594

    Premium paid on extinguishment of debt                  -        (84)

    Payments of debt                                      (1)       (497)

    Payments of financing and credit facility fees        (1)         (9)

    Dividend to noncontrolling interest                     -         (1)

    Contribution of capital from noncontrolling        
    interest                                                -           8

        Net cash (used in) provided by financing                       11
        activities                                        (2)    

    Effect of exchange rate changes on cash and cash   
    equivalents                                           (2)           -

    Net (decrease) increase in cash and cash           
    equivalents                                          (57)           8

    Cash and cash equivalents:                                           

      Beginning of period                                 322         263

      End of period                                   $   265   $     271





                                   RESOLUTE FOREST PRODUCTS INC.

       STATEMENTS OF OPERATING INCOME AND NET INCOME ADJUSTED FOR SPECIAL
                                      ITEMS

                                                                           

    A reconciliation of our operating income, net income and net income per
    share reported before special items
    is presented in the tables below. See Note 3 to the Unaudited
    Consolidated Financial Statement Information
    regarding our use of non-GAAP measures.

                                                                           

                                                                           

    Three months ended
    September 30, 2014            Operating                                

    (unaudited, in millions
    except per share amounts)  income (loss)   Net income (loss)      EPS

                                                                           

    GAAP as reported           $        (40)   $           (116)   $ (1.23)

                                                                           

    Adjustments for special
    items:                                                                 

      Foreign currency
      translation loss                     -                  17       0.18

      Closure costs,
      impairment and other
      related charges                     85                  85       0.90

      Inventory write-downs
      related to closures                  6                   6       0.06

      Start-up costs                       1                   1       0.01

      Write-down of equity
      method investment                    -                  50       0.53

      Other income, net                    -                 (2)     (0.02)

      Income tax effect of
      special items                        -                (24)     (0.25)

                                                                           

    GAAP as adjusted for
    special items              $          52   $              17   $   0.18

                                                                      

                                                                           

    Three months ended
    September 30, 2013            Operating                                

    (unaudited, in millions
    except per share amounts)  income (loss)   Net income (loss)      EPS

                                                                           

    GAAP as reported           $          36   $           (588)   $ (6.22)

                                                                           

    Adjustments for special
    items:                                                                 

      Foreign currency
      translation gain                     -                 (3)     (0.03)

      Closure costs,
      impairment and other
      related charges                      4                   4       0.04

      Start-up costs                       3                   3       0.04

      Other income, net                    -                 (2)     (0.02)

      U.S. deferred income tax
      asset valuation
      allowance                            -                 619       6.54

      Income tax effect of
      special items                        -                 (4)     (0.04)

                                                                           

    GAAP as adjusted for
    special items              $          43   $              29   $   0.31

                                                                      

                                                                           

    Nine months ended
    September 30, 2014            Operating                                

    (unaudited, in millions
    except per share amounts)  income (loss)   Net income (loss)      EPS

                                                                           

    GAAP as reported           $        (81)   $           (168)   $ (1.78)

                                                                           

    Adjustments for special
    items:                                                                 

      Foreign currency
      translation loss                     -                  14       0.15

      Closure costs,
      impairment and other
      related charges                    147                 147       1.55

      Inventory write-downs
      related to closures                 10                  10       0.11

      Start-up costs                       2                   2       0.02

      Net gain on disposition
      of assets                          (2)                 (2)     (0.02)

      Write-down of equity
      method investment                    -                  50       0.53

      Other income, net                    -                 (6)     (0.06)

      Income tax effect of
      special items                        -                (37)     (0.39)

                                                                           

    GAAP as adjusted for
    special items              $          76   $              10   $   0.11

                                                                      

                                                                           

    Nine months ended
    September 30, 2013            Operating                                

    (unaudited, in millions
    except per share amounts)  income (loss)   Net income (loss)      EPS

                                                                           

    GAAP as reported           $        (10)   $           (636)   $ (6.72)

                                                                           

    Adjustments for special
    items:                                                                 

      Foreign currency
      translation loss                     -                   9       0.10

      Closure costs,
      impairment and other
      related charges                     56                  56       0.59

      Inventory write-downs
      related to closures                  5                   5       0.05

      Start-up costs                      31                  31       0.33

      Net gain on disposition
      of assets                          (2)                 (2)     (0.02)

      Net loss on
      extinguishment of debt               -                  59       0.62

      Transaction costs                    5                   5       0.05

      Other income, net                    -                (26)     (0.27)

      U.S. deferred income tax
      asset valuation
      allowance                            -                 619       6.54

      Income tax effect of
      special items                        -                (45)     (0.48)

                                                                           

    GAAP as adjusted for
    special items              $          85   $              75   $   0.79

                                                                           








                                          RESOLUTE FOREST PRODUCTS INC.

                                  STATEMENTS OF EBITDA AND ADJUSTED EBITDA

                                                                                

    A reconciliation of our net income including noncontrolling interests to EBITDA
    and Adjusted EBITDA is presented in the tables below.

    See Note 3 to the Unaudited Consolidated Financial Statement Information
    regarding our use of non-GAAP measures EBITDA and Adjusted EBITDA

                                                                                    

                                                                                    

    Three months       Newsprint   Specialty   Market     Wood     Corporate   Total
    ended                           papers      pulp    products   and other
    September 30,
    2014
    (unaudited, in
    millions)

                                                                                    

    Net income
    (loss)
    including        $           $           $        $          $           $
    noncontrolling
    interests                  5           6       21         24       (172)   (116)

    Interest                                                                  
    expense                                                               12      12

    Income tax                                                                
    benefit                                                              (1)     (1)

    Depreciation
    and                                                                       
    amortization              17          20       13          8           2      60

    EBITDA                    22          26       34         32       (159)    (45)

                                                                                    

    Foreign
    currency                                                                  
    translation
    loss                                                                  17      17

    Closure costs,
    impairment and                                                            
    other related
    charges                                                               85      85

    Inventory
    write-downs                                                               
    related to
    closures                                                               6       6

    Start-up                                                                  
    costs                                                                  1       1

    Write-down of
    equity method                                                             
    investment                                                            50      50

    Other income,                                                             
    net                                                                  (2)     (2)

                                                                                    

    Adjusted         $           $           $        $          $           $
    EBITDA                    22          26       34         32         (2)     112

                                                                                    

                                                                                    

    Three months       Newsprint   Specialty   Market     Wood     Corporate   Total
    ended                           papers      pulp    products   and other
    September 30,
    2013
    (unaudited, in
    millions)

                                                                                    

    Net income
    (loss)
    including        $           $           $        $          $           $
    noncontrolling
    interests                 13          14       21          -       (636)   (588)

    Interest                                                                  
    expense                                                               12      12

    Income tax                                                                
    provision                                                            617     617

    Depreciation
    and                                                                       
    amortization              18          19       13          9           2      61

    EBITDA                    31          33       34          9         (5)     102

                                                                                    

    Foreign
    currency                                                                  
    translation
    gain                                                                 (3)     (3)

    Closure costs,
    impairment and                                                            
    other related
    charges                                                                4       4

    Start-up                                                                  
    costs                                                                  3       3

    Other income,                                                             
    net                                                                  (2)     (2)

                                                                                    

    Adjusted         $           $           $        $          $           $
    EBITDA                    31          33       34          9         (3)     104

                                                                                    

                                                                                    

    Nine months        Newsprint   Specialty   Market     Wood     Corporate   Total
    ended                           papers      pulp    products   and other
    September 30,
    2014
    (unaudited, in
    millions)

                                                                                    

    Net income
    (loss)
    including        $           $           $        $          $           $
    noncontrolling
    interests                  8        (21)       53         51       (257)   (166)

    Interest                                                                  
    expense                                                               35      35

    Income tax                                                                
    benefit                                                              (8)     (8)

    Depreciation
    and                                                                       
    amortization              52          64       39         24           5     184

    EBITDA                    60          43       92         75       (225)      45

                                                                                    

    Foreign
    currency                                                                  
    translation
    loss                                                                  14      14

    Closure costs,
    impairment and                                                            
    other related
    charges                                                              147     147

    Inventory
    write-downs                                                               
    related to
    closures                                                              10      10

    Start-up                                                                  
    costs                                                                  2       2

    Net gain on
    disposition of                                                            
    assets                                                               (2)     (2)

    Write-down of
    equity method                                                             
    investment                                                            50      50

    Other income,                                                             
    net                                                                  (6)     (6)

                                                                                    

    Adjusted         $           $           $        $          $           $
    EBITDA                    60          43     $ 92         75        (10)     260

                                                                                    

                                                                                    

    Nine months        Newsprint   Specialty   Market     Wood     Corporate   Total
    ended                           papers      pulp    products   and other
    September 30,
    2013
    (unaudited, in
    millions)

                                                                                    

    Net income
    (loss)
    including        $           $           $        $          $           $
    noncontrolling
    interests                 21          24       26         32       (740)   (637)

    Interest                                                                  
    expense                                                               39      39

    Income tax                                                                
    provision                                                            546     546

    Depreciation
    and                                                                       
    amortization              54          57       39         27           5     182

    EBITDA                    75          81       65         59       (150)     130

                                                                                    

    Foreign
    currency                                                                  
    translation
    loss                                                                   9       9

    Closure costs,
    impairment and                                                            
    other related
    charges                                                               56      56

    Inventory
    write-downs                                                               
    related to
    closures                                                               5       5

    Start-up                                                                  
    costs                                                                 31      31

    Net gain on
    disposition of                                                            
    assets                                                               (2)     (2)

    Net loss on
    extinguishment                                                            
    of debt                                                               59      59

    Transaction                                                               
    costs                                                                  5       5

    Other income,                                                             
    net                                                                 (26)    (26)

                                                                                    

    Adjusted         $           $           $        $          $           $
    EBITDA                    75          81       65         59        (13)     267

                                                                                    




RESOLUTE FOREST PRODUCTS INC.
Notes to the Unaudited Consolidated Financial Statement Information


       Closure costs, impairment and other related charges for the three
    1. and nine months ended September 30, 2014 and 2013 were comprised of
       the following:









                                                                           

                                              Pension Plan     Severance
    (Unaudited,    Impairment    Accelerated   Curtailment     and Other
    in millions)  of Assets (2) Depreciation      Loss           Costs       Total

    Permanent                                                                      
    closures:

      Laurentide,                                                                  
      Québec
      paper mill
      (1)

          Third            $  -         $  65          $  -         $  16         $
          quarter                                                                81

          First               -            65             -            16        81
          nine
          months

      Paper                                                                        
      machine in
      Catawba,
      South
      Carolina

          Third               -             -             -             -          
          quarter                                                                 -

          First               -            45             -             1        46
          nine
          months

      Pulp and                                                                     
      paper mill
      in Fort
      Frances,
      Ontario

          Third               -             -             -             -         -
          quarter

          First               -             -             -             8         8
          nine
          months

      Paper                                                                        
      machine in
      Iroquois
      Falls,
      Ontario

          Third               -             -             -             -         -
          quarter

          First               -             3             -             -         3
          nine
          months

    Other                                                                          

          Third               3             -             -             1         4
          quarter

          First               9             -             -             -         9
          nine
          months

    Total                                                                          

          Third             $ 3          $ 65           $ -         $  17        $ 
          quarter                                                                85
          2014

          First               9           113             -            25       147
          nine
          months
          2014

          Third             $ -           $ -           $ 2           $ 2       $ 4
          quarter
          2013

          First               -            44             1            11        56
          nine
          months
          2013









    (1) On October 13, 2014, we permanently closed our Laurentide paper
        mill, following the announcement made on September 2, 2014.

    (2) We recorded long-lived asset impairment charges of $1 million and
        $6 million for the three and nine months ended September 30, 2014,
        respectively, related to our recycling assets to reduce the
        carrying value of the assets to fair value less costs to sell.





    2. Other (expense) income, net for the three and nine months ended
       September 30, 2014 and 2013 was comprised of the following:









                                                                  

                                   Three Months Ended   Nine Months Ended
                                     September 30,        September 30,

    (Unaudited, in millions)         2014        2013     2014       2013

    Foreign exchange (loss) gain   $ (17) $         3   $ (14) $      (9)

    Write-down of equity method
    investment (1)                   (50)           -     (50)          -

    Net loss on extinguishment of
    debt                                -           -        -       (59)

    Gain on forgiveness of note
    payable                             -           -        -         12

    Gain on liquidation settlement      -           3        -         12

    Miscellaneous income (expense)      2         (1)        6          2

                                   $ (65) $         5   $ (58) $     (42)









    (1) During the three months ended September 30, 2014, we recorded
        charges of $50 million as a result of the write-down of our
        investment in Ponderay Newsprint Company, a partnership in which we
        have a 40% interest, to reduce the carrying value of the investment
        to fair value, which was determined using the discounted cash flow
        method.





    3. Tables represent a reconciliation of certain financial statement
       line items reported under generally accepted accounting principles
       ("GAAP") to our use of non-GAAP measures of operating income (loss),
       net income (loss) and net income (loss) per share ("EPS"), in each
       case adjusted for special items, as well as EBITDA and adjusted
       EBITDA, in each case by reportable segment. We believe that these
       measures are useful because they allow the reader to more easily
       compare our ongoing operations, financial performance, and EPS from
       period to period. They are also consistent with the indicators
       management uses internally to measure our performance. These
       non-GAAP measures should be considered in addition to and not a
       substitute for measures of financial performance calculated and
       presented in accordance with GAAP in our Consolidated Statement of
       Operations in our filings with the Securities and Exchange
       Commission. Consequently, readers should rely on GAAP operating
       income (loss), operating income (loss) by reportable segment, net
       income (loss) and EPS. Non-GAAP measures included in our press
       release include:

       Operating income (loss) adjusted for special items - is defined as
       operating income (loss) from our Consolidated Statements of
       Operations excluding special items, such as closure costs,
       impairment and other related charges, inventory write-downs related
       to closures, start-up costs, gains and losses on disposition of
       assets, transaction costs and other charges or credits that are
       excluded from our segment's performance from GAAP operating income
       (loss).

       Net income (loss) adjusted for special items - is defined as net
       income (loss) from our Consolidated Statements of Operations
       excluding the same items as under operating income (loss) adjusted
       for the special items, in addition to the effects of foreign
       currency translation, net loss on extinguishment of debt, write-down
       of equity method investment, other income (expense) and U.S.
       deferred income tax asset valuation allowance.

       EPS adjusted for special items - is defined as diluted EPS
       calculated based on the net income (loss) adjusted for special items
       as described above.

       EBITDA by reportable segment - is defined as net income (loss)
       including noncontrolling interests from our Consolidated Statements
       of Operations, allocated to each of our reportable segments
       (newsprint, specialty papers, market pulp and wood products) in
       accordance with FASB ASC 290, "Segment Reporting," and adjusted for
       depreciation and amortization. EBITDA for the corporate and other
       segment is defined as net income (loss) including noncontrolling
       interests from our Consolidated Statements of Operations after the
       allocation to reportable segments, adjusted for interest expense,
       income taxes and depreciation and amortization.

       Adjusted EBITDA - is defined as EBITDA excluding the special items
       described above.



SOURCE Resolute Forest Products Inc.