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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017 |
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
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Delaware
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98-0526415
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. employer identification number)
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111 Robert-Bourassa Boulevard, Suite 5000; Montréal, Quebec; Canada H3C 2M1
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(Address of principal executive offices) (Zip Code)
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(514) 875-2160
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Common Stock, par value $0.001 per share
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New York Stock Exchange
Toronto Stock Exchange
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(Title of class)
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(Name of exchange on which registered)
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Large accelerated filer
¨
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Accelerated filer
þ
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Non-accelerated filer
¨
(Do not check if a smaller reporting company)
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Smaller reporting company
¨
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Emerging growth company
¨
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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Number of Machines
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2018
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2017
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2017 Production By Product Line
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(In thousands of metric tons)
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Total
Capacity
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Total
Production
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Market
Pulp
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Tissue
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Newsprint
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Specialty
Papers
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|||||||||||||
Canada
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Alma (Quebec)
(1)
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3
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360
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284
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—
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—
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—
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284
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Amos (Quebec)
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1
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195
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196
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—
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—
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196
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—
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Baie-Comeau (Quebec)
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2
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321
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274
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—
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—
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274
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—
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Clermont (Quebec)
(2)
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1
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223
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221
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—
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—
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221
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—
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Dolbeau (Quebec)
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1
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142
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140
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—
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—
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—
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140
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Gatineau (Quebec)
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1
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196
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196
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—
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—
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196
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—
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Kénogami (Quebec)
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1
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134
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122
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—
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—
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—
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122
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Saint-Félicien (Quebec)
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—
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340
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325
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325
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—
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—
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—
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Thunder Bay (Ontario)
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1
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535
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505
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314
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—
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180
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11
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United States
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Augusta (Georgia)
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1
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218
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199
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—
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—
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199
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—
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Calhoun (Tennessee)
(3) (4)
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2
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391
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277
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129
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21
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—
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127
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Catawba (South Carolina)
(5)
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1
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546
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501
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209
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—
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—
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292
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Coosa Pines (Alabama)
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—
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268
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263
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263
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—
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—
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—
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Fairmont (West Virginia)
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—
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218
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138
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138
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—
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—
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—
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Grenada (Mississippi)
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1
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231
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229
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—
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—
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229
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—
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Hialeah (Florida)
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2
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31
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29
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—
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29
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—
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—
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Menominee (Michigan)
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—
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178
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122
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122
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—
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—
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—
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Sanford (Florida)
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1
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25
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22
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—
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22
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—
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—
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Usk (Washington)
(6)
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1
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226
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222
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—
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—
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222
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—
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Other
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Permanently closed facilities and paper machines
(7)
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341
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—
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—
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110
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231
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20
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4,778
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4,606
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1,500
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72
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1,827
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1,207
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(1)
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On October 16, 2017, we restarted a paper machine in Alma, representing approximately 75,000 metric tons of specialty papers capacity.
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(2)
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On December 21, 2017, we acquired the
49%
equity interest held by The New York Times Company in Donohue Malbaie Inc. We already owned
51%
of the shares of Donohue Malbaie Inc. The amounts in the above table represent the mill’s total capacity and production.
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(3)
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On February 28, 2017, we started a tissue machine at our Calhoun facility.
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(4)
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On September 30, 2017, we permanently closed two paper machines in Calhoun, representing approximately 255,000 metric tons of specialty papers capacity and 80,000 metric tons of newsprint capacity.
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(5)
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On June 30, 2017, we permanently closed a paper machine in Catawba, representing approximately 190,000 metric tons of specialty papers capacity.
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(6)
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Ponderay Newsprint Company is located in Usk and is an unconsolidated partnership in which we have a 40% interest. The amounts in the above table represent the mill’s total capacity and production.
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(7)
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In 2017, we permanently closed paper machines in Calhoun and Catawba, as well as our paper mill in Mokpo (South Korea). For additional information, see
Note 4, “Closure Costs, Impairment and Other Related Charges
,” to our Consolidated Financial Statements.
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2018
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2017
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(In million board feet)
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Total Capacity
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Total Production
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Atikokan (Ontario)
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145
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107
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Comtois (Quebec)
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145
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119
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Girardville (Quebec)
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220
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220
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Ignace (Ontario)
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115
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79
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La Doré (Quebec)
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198
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198
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La Tuque (Quebec)
(1)
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175
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90
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Maniwaki (Quebec)
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204
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111
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Mistassini (Quebec)
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203
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200
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Obedjiwan (Quebec)
(2)
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65
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49
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Pointe-aux-Outardes (Quebec)
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175
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123
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Saint-Félicien (Quebec)
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174
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149
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Saint-Thomas (Quebec)
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93
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61
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Senneterre (Quebec)
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155
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121
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Thunder Bay (Ontario)
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302
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294
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2,369
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1,921
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(1)
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Forest Products Mauricie L.P. is located in La Tuque and is a consolidated subsidiary in which we have a 93.2% interest. The amounts in the above table represent the mill’s total capacity and production.
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(2)
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Sociéte en Commandite Scierie Opitciwan is located in Obedjiwan and is an unconsolidated entity in which we have a 45% interest. The amounts in the above table represent the mill’s total capacity and production.
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2018
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2017
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(In million board feet, except where otherwise stated)
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Total Capacity
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Total Production
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||||
Remanufactured Wood Products Facilities
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Château-Richer (Quebec)
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66
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45
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La Doré (Quebec)
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16
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14
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Total Remanufacturing Wood Facilities
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82
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59
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Engineered Wood Products Facilities
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Larouche and Saint-Prime (Quebec) (in million linear feet)
(1)
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145
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104
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Wood Pellet Products Facility
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Thunder Bay (Ontario) (in thousands of metric tons)
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45
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39
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(1)
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Resolute-LP Engineered Wood Larouche Inc. and Resolute-LP Engineered Wood St-Prime Limited Partnership are located in Larouche and Saint-Prime, respectively, and are unconsolidated entities in which we have a 50% interest in each entity. We operate the facilities and our joint venture partners sell the products. The amounts in the above table represent the mills’ total capacity and production.
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•
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the use of timberlands;
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•
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forest management practices;
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•
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forest management and chain of custody certification standards;
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•
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consultation with First Nations group;
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•
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the protection of habitats, and endangered or other species, including the woodland caribou;
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•
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the promotion of forest biodiversity; and
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•
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the response to and prevention of catastrophic wildfires.
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•
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Commerce issues final determinations that importers to the U.S. of such products are importing unfairly traded goods from Canadian mills;
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•
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the ITC issues a final determination that subject merchandise benefiting from any alleged subsidization or dumping threatens injury to the relevant U.S. industry or causes current injury; and
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•
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Commerce issues orders that importers of such products in the U.S. from Canadian mills must pay cash deposits for estimated countervailing or anti-dumping duties, as applicable.
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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High
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Low
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||||||
2016
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First quarter
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$
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8.40
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$
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3.79
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Second quarter
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6.95
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4.55
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Third quarter
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6.10
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4.57
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Fourth quarter
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5.85
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3.70
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2017
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First quarter
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$
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5.80
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$
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4.20
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Second quarter
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6.75
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4.15
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Third quarter
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5.30
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4.10
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Fourth quarter
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11.30
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5.04
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Years Ended December 31,
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(In millions, except per share amounts)
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2017
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2016
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2015
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2014
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2013
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|||||
Statement of Operations Data
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Sales
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$
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3,513
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$
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3,545
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$
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3,645
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$
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4,258
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$
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4,461
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Operating income (loss)
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49
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(26
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)
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(219
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)
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(174
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)
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(2
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)
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|||||
Net loss including noncontrolling interests
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(78
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)
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(76
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)
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(255
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)
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(274
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)
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(639
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)
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Net loss attributable to Resolute Forest Products Inc.
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(84
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)
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(81
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)
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(257
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)
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(277
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)
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(639
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)
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|||||
Basic net loss per share attributable to Resolute Forest Products Inc. common shareholders
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(0.93
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)
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(0.90
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)
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(2.78
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)
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(2.93
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)
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(6.75
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)
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Diluted net loss per share attributable to Resolute Forest Products Inc. common shareholders
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(0.93
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)
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(0.90
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)
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(2.78
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)
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(2.93
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)
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(6.75
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)
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|||||
Dividends declared per common share
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—
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—
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—
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—
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—
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|||||
Segment Sales Information
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Market pulp
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$
|
911
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$
|
836
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$
|
889
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$
|
974
|
|
|
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$
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1,053
|
|
|
Tissue
|
|
81
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|
|
|
89
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|
|
|
11
|
|
|
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—
|
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—
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|||||
Wood products
|
|
797
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|
|
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596
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|
|
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536
|
|
|
|
610
|
|
|
|
569
|
|
|
|||||
Newsprint
|
|
842
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|
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1,009
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1,105
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1,402
|
|
|
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1,473
|
|
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|||||
Specialty papers
|
|
882
|
|
|
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1,015
|
|
|
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1,104
|
|
|
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1,272
|
|
|
|
1,366
|
|
|
|||||
|
|
$
|
3,513
|
|
|
|
$
|
3,545
|
|
|
|
$
|
3,645
|
|
|
|
$
|
4,258
|
|
|
|
$
|
4,461
|
|
|
Statement of Cash Flows Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
||||||||||
Net cash provided by operating activities
|
|
$
|
158
|
|
|
|
$
|
81
|
|
|
|
$
|
138
|
|
|
|
$
|
186
|
|
|
|
$
|
206
|
|
|
Cash invested in fixed assets
|
|
164
|
|
|
|
249
|
|
|
|
185
|
|
|
|
193
|
|
|
|
161
|
|
|
|
As of December 31,
|
||||||||||||||||||||||||
(In millions, except otherwise indicated)
|
|
2017
|
|
|
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2016
|
|
|
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2015
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|||||
Financial Position
|
|
|
|
|
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|
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|
||||||||||
Fixed assets, net
|
|
$
|
1,716
|
|
|
|
$
|
1,842
|
|
|
|
$
|
1,810
|
|
|
|
$
|
1,985
|
|
|
|
$
|
2,289
|
|
|
Total assets
|
|
4,147
|
|
|
|
4,277
|
|
|
|
4,220
|
|
|
|
4,914
|
|
|
|
5,377
|
|
|
|||||
Total debt
(1)
|
|
789
|
|
|
|
762
|
|
|
|
591
|
|
|
|
590
|
|
|
|
591
|
|
|
|||||
Additional Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of employees
|
|
7,700
|
|
|
|
8,300
|
|
|
|
8,000
|
|
|
|
7,700
|
|
|
|
8,400
|
|
|
(1)
|
In 2016, we entered into the Senior Secured Credit Facility for up to $185 million, which included a term loan of $46 million. Borrowings under the Senior Secured Credit Facility and ABL Credit Facility were $90 million and $35 million, respectively, in 2016, and $83 million and $61 million, respectively, in 2017. For additional information, see
Note 13, “Long-Term Debt
,” to our Consolidated Financial Statements.
|
•
|
Competitive cost structure and diversified asset base
- With our large-scale, efficient and integrated operations, competitive sources of energy and fiber, strategically located mills, and cost-effective management structure, we believe we are well positioned to compete in the global marketplace. We maintain a rigorous focus on reducing costs, optimizing production across our network, adjusting to market dynamics, as well as capitalizing on our access to international markets.
|
•
|
Conservative capital structure
- Our low debt, which has favorable pricing and flexibility, and solid liquidity levels are key to our continued transformation to a more sustainable company. In order to maintain financial strength and flexibility, we continue to spend our capital in a disciplined, strategic and focused manner, concentrating on our most competitive sites.
|
•
|
Strategic perspectives
- We pursue initiatives that improve our cost position, advance diversification, provide synergies or position us to expand into future growth markets. All are key to our continuing transformation: less paper and more wood products, pulp and tissue. To that end, we take an opportunistic approach that aligns with our strategic plan and that we believe positions us favorably for the long-term evolution of the paper and forest products industry, including bioproducts.
|
|
Years Ended December 31,
|
|||||||||||
|
2017
|
2016
|
2015
|
|||||||||
Sales
|
|
|
|
|
|
|
|
|
|
|||
Market pulp
|
|
26
|
%
|
|
|
24
|
%
|
|
|
25
|
%
|
|
Tissue
|
|
2
|
%
|
|
|
2
|
%
|
|
|
—
|
%
|
|
Wood products
|
|
23
|
%
|
|
|
17
|
%
|
|
|
15
|
%
|
|
Newsprint
|
|
24
|
%
|
|
|
28
|
%
|
|
|
30
|
%
|
|
Specialty papers
|
|
25
|
%
|
|
|
29
|
%
|
|
|
30
|
%
|
|
Total (%)
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
Total sales (
$ millions
)
|
$
|
3,513
|
|
|
$
|
3,545
|
|
|
$
|
3,645
|
|
|
•
|
maintain a stringent focus on reducing costs and optimizing our diversified asset base, including divesting idled and non-core assets or unprofitable operations;
|
•
|
maximize the benefits of our access to virgin fiber;
|
•
|
pursue a strategy of managing production and inventory levels and focus production at our most profitable and lower-cost facilities and machines; and
|
•
|
optimize our organizational structure to maintain a competitive selling, general and administrative expenses (or “
SG&A
”) to sales ratio.
|
(1)
|
For a reconciliation of net income (loss) including noncontrolling interests to earnings before interest expense, income taxes, and depreciation and amortization, or “
EBITDA
,” and adjusted EBITDA, see note 1 under “
Reconciliations
” below.
|
(1)
|
By acquiring Fibrek Inc., we grew our market pulp capacity by over 70%, increasing our presence in a market that we believe will continue to grow over the long term.
|
(2)
|
We installed a 65 MW steam turbine at our Thunder Bay pulp and paper mill, which reduces the mill’s energy costs as well as maximizes our local woodlands, sawmill, pulp and paper, and energy operations by fully utilizing forest-based biomass to produce green electricity.
|
(3)
|
Our Ignace and Atikokan sawmills in Northern Ontario, as well as the acquisition of a second sawmill in Senneterre and resulting consolidation, have added more than 300 million board feet of annualized wood products capacity.
|
(4)
|
We acquired Atlas Tissue, gaining an immediate position in the North American consumer tissue market and access to a customer base to accelerate the sale and distribution of our Calhoun tissue production.
|
(5)
|
We completed a $100 million project to build a continuous pulp digester at the Calhoun pulp and paper mill, increasing our annual pulp capacity by 100,000 metric tons. This incremental capacity serves in part to supply slush pulp to our new Calhoun tissue machine (see note 6 below).
|
(6)
|
The Calhoun facility has a total annualized capacity of 66,000 short tons (60,000 metric tons) of at-home, premium bathroom tissue and toweling products, focused on the growing private-label market. The new tissue machine is expected to attain its targeted operational capacity in mid-2018.
|
•
|
In 2013, we refinanced the remaining balance of our senior secured notes with 5.875% senior unsecured notes due 2023 (or the “
2023 notes
”). In addition to adding five years to maturity, the refinancing reduced our annual cash interest burden by $16 million and improves our financial flexibility.
|
•
|
In 2015, we refinanced our senior secured asset-based revolving credit facility (or “
ABL credit facility
”). The new five-year credit agreement provides more flexible terms and conditions, improves pricing and immediately lowers our cost of capital, to better support the execution of our growth and diversification initiatives.
|
•
|
In 2016, we entered into a senior secured credit facility (or “
Senior secured credit facility
”) for up to $185 million, comprised of a $46 million nine-year term loan (or “
Term loan
”) and a $139 million six-year revolving credit facility (or “
Revolving credit facility
”). This new facility increases our liquidity levels and will further enhance our flexibility in the execution of our growth and diversification strategy.
|
•
|
In 2014, we modified our U.S. other postretirement benefit (or “
OPEB
”) plans to encourage greater participation in a Medicare Exchange program. In addition to securing high-quality healthcare for participants, this modification, along with similar initiatives undertaken since mid-2013, helped to reduce our U.S. OPEB liability on the balance sheet from $250 million to $77 million as of December 31, 2014.
|
•
|
In 2016 and 2017, we undertook steps to optimize our pension plan contributions, as further discussed below under “
Liquidity and Capital Resources – Employee Benefit Plans – Pension Funding
,”
reducing the volatility as well as the amount of required contributions. When compared to the baseline contributions of 2016, we estimate that pension contributions will drop by approximately $170 million between 2017 and 2020, including $30 million realized in 2017.
|
•
|
improving resource efficiency, which helps control fiber, fuel, and power costs, three significant input costs in our industry;
|
•
|
moving beyond regulatory compliance and environmental incident management to differentiate ourselves as an environmental supplier of choice;
|
•
|
positioning ourselves as a competitive employer in order to attract, engage and retain the best and brightest minds, promoting employee engagement, innovation and longevity; and
|
•
|
building solid community relations to support long-term regional prosperity and our own financial and operational success.
|
•
|
Beating our ambitious safety target by achieving an Occupational Safety and Health Administration incident rate of 0.66 in 2017. Safety is our first priority, and we strive for zero injuries.
|
•
|
Achieving a 76% reduction in absolute greenhouse gas (or “
GHG
”) emissions (scope 1 and 2), below 2000 levels.
|
•
|
Joining forces with FPInnovations in a Cdn $21 million project to establish a biorefinery pilot plant hosted at our Thunder Bay pulp and paper mill. The initiative will focus on developing new ways to efficiently produce and commercialize innovative biochemicals derived from wood.
|
•
|
Launching a clean energy project to improve our Thunder Bay mill’s energy efficiency and lower its GHG emissions. The mill plans to reduce its use of natural gas by recovering waste heat from its exhaust streams and optimizing condensate returns by installing efficient steam traps. By mid-2019, the Cdn $12 million project is expected to provide annual natural gas cost savings of more than 35%, while reducing the mill’s overall annual GHG emissions by over 20%, or approximately 43,000 metric tons of CO
2
equivalents per year.
|
•
|
Partnering with CO
2
Solutions to deploy a CO
2
capture unit and ancillary equipment to improve growth rates at Toundra Greenhouse in Saint-Félicien (Quebec), in which we hold a 49% interest.
|
•
|
Maintaining 100% certification of Resolute-owned or managed woodlands to internationally recognized forest management standards. 100% of our managed forests have been certified to one or more of two standards (Sustainable Forestry Initiative
®
, or “
SFI
®
”,
and/or Forest Stewardship Council
®
, or “
FSC
®
”). Accordingly, our commitments extend well beyond strict compliance with applicable forestry regulations, which in Quebec and Ontario are already among the most, if not the most, rigorous in the world.
|
•
|
Maintaining fiber-tracking systems that allow us to identify the source of the fiber or wood used, all of which have chain of custody certification. 100% of these tracking systems are third-party certified according to one or more of the following internationally recognized chain of custody standards: SFI, Programme for the Endorsement of Forest Certification, and/or FSC.
|
•
|
Continuing to report climate, water and forest disclosures to CDP (formerly the Carbon Disclosure Project). Full disclosures and scores are available on CDP’s website (https://www.cdp.net/), though this information is not incorporated by reference into this Form 10-K and should not be considered part of this or any other report that we file with or furnish to the SEC.
|
•
|
Continuing to implement our proactive approach to preventing environmental incidents, completing the second year of the second three-year cycle of environmental risk audits at all of our pulp, paper and tissue mills. We recorded 18 environmental incidents (class 1 and 2) in 2017, a 40% improvement compared to 2016.
|
•
|
Active engagement of union officials, employees, mayors and other community leaders, First Nations partners, small community business owners, customers, and representatives of governments at various levels in our ongoing principled stand against activist misinformation.
|
•
|
In addition to developing information resources such as
BorealForestFacts.com
and The Resolute Blog, we continued engagement on the Forum boréal and Boreal Forum social media platforms. These Quebec and Ontario sites provide a forum for fact-based discussion concerning sustainable forestry practices and they help to ensure that individual and community voices are heard, particularly when it comes to the importance of forestry to Northern communities. The information contained on or connected to
BorealForestFacts.com
and The Resolute Blog is not incorporated by reference into this Form 10-K and should not be considered part of this or any other report that we file with or furnish to the SEC.
|
•
|
Other sustainability performance indicators and disclosures prepared in accordance with the Global Reporting Initiative (or “
GRI
”) guidelines are available on our website (www.resolutefp.com). The GRI framework is considered the gold standard of balanced, transparent sustainability reporting.
|
•
|
the International Business Award (known as the “Stevies
®
”), the world’s premier business awards program, in the Best Health, Safety and Environment Program of the Year for the U.S. and Canada category (August 10, 2017);
|
•
|
the Best in Biz Awards International, the only independent global business awards program judged by prominent members of the press and industry analysts, in the Most Environmentally Responsible Company of the Year category (July 26, 2017);
|
•
|
the Peer Awards for Excellence, celebrating tangible accomplishments and innovative ideas in global business. Finalists present their initiatives for review by fellow finalists, a unique process that allows judging by an audience of peers in the areas of corporate responsibility, customer engagement, and people and performance. Resolute won a
|
•
|
the Mercure Award for Sustainable Development at the 2017 Mercuriades Awards ceremony. The company earned praise from the jury for its involvement in the Toundra Greenhouse project in Saint-Félicien, an innovative joint venture in which Resolute is one of the main partners. The Mercuriades, created by the Fédération des chambres de commerce du Québec in 1981, is the province’s most prestigious business competition, celebrating the ambition, innovation and performance of Quebec businesses (April 24, 2017).
|
Year ended December 31, 2011
|
Market Pulp
|
Tissue
|
Wood Products
|
Newsprint
|
Specialty Papers
|
Segment Total
|
Corporate and Other
|
Total
|
||||||||||||||||||||||||
(Unaudited, in millions)
|
||||||||||||||||||||||||||||||||
Net income (loss) including noncontrolling interests
|
$
|
91
|
|
|
$
|
—
|
|
|
$
|
(25
|
)
|
|
$
|
89
|
|
|
$
|
122
|
|
|
$
|
277
|
|
|
$
|
(232
|
)
|
|
$
|
45
|
|
|
Interest expense
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
95
|
|
|
|
95
|
|
|
Income tax provision
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19
|
|
|
|
19
|
|
|
Depreciation and amortization
|
|
30
|
|
|
|
—
|
|
|
|
33
|
|
|
|
73
|
|
|
|
84
|
|
|
|
220
|
|
|
|
—
|
|
|
|
220
|
|
|
EBITDA
|
$
|
121
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
162
|
|
|
$
|
206
|
|
|
$
|
497
|
|
|
$
|
(118
|
)
|
|
$
|
379
|
|
|
Foreign exchange loss
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21
|
|
|
|
21
|
|
|
Severance costs
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12
|
|
|
|
12
|
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
46
|
|
|
|
46
|
|
|
Inventory write-downs related to closures
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3
|
|
|
|
3
|
|
|
Net gain on disposition of assets
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
Non-operating pension and OPEB costs
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8
|
|
|
|
8
|
|
|
Acquisition-related costs
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5
|
|
|
|
5
|
|
|
Other expense, net
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
27
|
|
|
|
27
|
|
|
Adjusted EBITDA
|
$
|
121
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
162
|
|
|
$
|
206
|
|
|
$
|
497
|
|
|
$
|
1
|
|
|
$
|
498
|
|
|
Year ended December 31, 2017
|
Market Pulp
|
Tissue
|
Wood Products
|
Newsprint
|
Specialty Papers
|
Segment Total
|
Corporate and Other
|
Total
|
||||||||||||||||||||||||
(Unaudited, in millions)
|
||||||||||||||||||||||||||||||||
Net income (loss) including noncontrolling interests
|
$
|
79
|
|
|
$
|
(6
|
)
|
|
$
|
186
|
|
|
$
|
(23
|
)
|
|
$
|
(9
|
)
|
|
$
|
227
|
|
|
$
|
(305
|
)
|
|
$
|
(78
|
)
|
|
Interest expense
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
49
|
|
|
|
49
|
|
|
Income tax provision
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
84
|
|
|
|
84
|
|
|
Depreciation and amortization
|
|
31
|
|
|
|
5
|
|
|
|
33
|
|
|
|
66
|
|
|
|
45
|
|
|
|
180
|
|
|
|
24
|
|
|
|
204
|
|
|
EBITDA
|
$
|
110
|
|
|
$
|
(1
|
)
|
|
$
|
219
|
|
|
$
|
43
|
|
|
$
|
36
|
|
|
$
|
407
|
|
|
$
|
(148
|
)
|
|
$
|
259
|
|
|
Foreign exchange gain
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(9
|
)
|
|
|
(9
|
)
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
87
|
|
|
|
87
|
|
|
Inventory write-downs related to closures
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
24
|
|
|
|
24
|
|
|
Start-up costs
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
27
|
|
|
|
27
|
|
|
Net gain on disposition of assets
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(15
|
)
|
|
|
(15
|
)
|
|
Non-operating pension and OPEB credits
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(12
|
)
|
|
|
(12
|
)
|
|
Other expense, net
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3
|
|
|
|
3
|
|
|
Adjusted EBITDA
|
$
|
110
|
|
|
$
|
(1
|
)
|
|
$
|
219
|
|
|
$
|
43
|
|
|
$
|
36
|
|
|
$
|
407
|
|
|
$
|
(43
|
)
|
|
$
|
364
|
|
|
Year Ended December 31, 2017
|
Operating
Income (Loss) |
Net
Income (Loss) |
EPS
|
|
|
|||||||
(Unaudited, in millions, except per share amounts)
|
||||||||||||
GAAP, as reported
|
$
|
49
|
|
|
$
|
(84
|
)
|
|
$
|
(0.93
|
)
|
|
Adjustments for special items:
|
|
|
|
|
|
|
|
|
|
|||
Foreign exchange gain
|
|
—
|
|
|
|
(9
|
)
|
|
|
(0.10
|
)
|
|
Closure costs, impairment and other related charges
|
|
87
|
|
|
|
87
|
|
|
|
0.96
|
|
|
Inventory write-downs related to closures
|
|
24
|
|
|
|
24
|
|
|
|
0.27
|
|
|
Start-up costs
|
|
27
|
|
|
|
27
|
|
|
|
0.30
|
|
|
Net gain on disposition of assets
|
|
(15
|
)
|
|
|
(15
|
)
|
|
|
(0.17
|
)
|
|
Non-operating pension and OPEB credits
|
|
(12
|
)
|
|
|
(12
|
)
|
|
|
(0.13
|
)
|
|
Other expense, net
|
|
—
|
|
|
|
3
|
|
|
|
0.03
|
|
|
Income tax effect of special items
|
|
—
|
|
|
|
(9
|
)
|
|
|
(0.10
|
)
|
|
Adjusted for special items
(1)
|
$
|
160
|
|
|
$
|
12
|
|
|
$
|
0.13
|
|
|
Year Ended December 31, 2016
|
Operating
Income (Loss) |
Net
Income (Loss) |
EPS
|
|
|
|||||||
(Unaudited, in millions, except per share amounts)
|
||||||||||||
GAAP, as reported
|
$
|
(26
|
)
|
|
$
|
(81
|
)
|
|
$
|
(0.90
|
)
|
|
Adjustments for special items:
|
|
|
|
|
|
|
|
|
|
|||
Foreign exchange loss
|
|
—
|
|
|
|
7
|
|
|
|
0.08
|
|
|
Closure costs, impairment and other related charges
|
|
62
|
|
|
|
62
|
|
|
|
0.69
|
|
|
Inventory write-downs related to closures
|
|
7
|
|
|
|
7
|
|
|
|
0.08
|
|
|
Start-up costs
|
|
8
|
|
|
|
8
|
|
|
|
0.09
|
|
|
Net gain on disposition of assets
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
(0.02
|
)
|
|
Non-operating pension and OPEB costs
|
|
8
|
|
|
|
8
|
|
|
|
0.09
|
|
|
Other income, net
|
|
—
|
|
|
|
(14
|
)
|
|
|
(0.16
|
)
|
|
Income tax effect of special items
|
|
—
|
|
|
|
(7
|
)
|
|
|
(0.08
|
)
|
|
Adjusted for special items
(1)
|
$
|
57
|
|
|
$
|
(12
|
)
|
|
$
|
(0.13
|
)
|
|
(1)
|
Operating income (loss), net income (loss) and net income (loss) per share (or “
EPS
”), in each case as adjusted for special items, are not financial measures recognized under GAAP. We calculate operating income (loss), as adjusted for special items, as operating income (loss) from our Consolidated Statements of Operations, adjusted for 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, non-operating pension and OPEB costs and credits, and other charges or credits that are excluded from our segment’s performance from GAAP operating income (loss). We calculate net income (loss), as adjusted for special items, as net income (loss) from our Consolidated Statements of Operations, adjusted for the same special items applied to operating income (loss), in addition to foreign exchange gains and losses, other income (expense), net, and the income tax effect of the special items. EPS, as adjusted for special items, is calculated as net income (loss), as adjusted for special items, per diluted share. We believe that using these non-GAAP measures is useful because they are consistent with the indicators management uses internally to measure the Company’s performance, and it allows the reader to more easily compare our operations and financial performance from period to period. Operating income (loss), net income (loss) and EPS, in each case as adjusted for special items, are internal
|
Three Months Ended December 31, 2017
|
Operating
Income (Loss) |
Net
Income (Loss) |
EPS
|
|
|
|||||||
(Unaudited, in millions, except per share amounts)
|
||||||||||||
GAAP, as reported
|
$
|
54
|
|
|
$
|
13
|
|
|
$
|
0.14
|
|
|
Adjustments for special items:
|
|
|
|
|
|
|
|
|
|
|||
Foreign exchange loss
|
|
—
|
|
|
|
1
|
|
|
|
0.01
|
|
|
Closure costs, impairment and other related charges
|
|
5
|
|
|
|
5
|
|
|
|
0.05
|
|
|
Start-up costs
|
|
9
|
|
|
|
9
|
|
|
|
0.10
|
|
|
Net gain on disposition of assets
|
|
(13
|
)
|
|
|
(13
|
)
|
|
|
(0.14
|
)
|
|
Non-operating pension and OPEB credits
|
|
(4
|
)
|
|
|
(4
|
)
|
|
|
(0.04
|
)
|
|
Other expense, net
|
|
—
|
|
|
|
4
|
|
|
|
0.04
|
|
|
Income tax effect of special items
|
|
—
|
|
|
|
(1
|
)
|
|
|
(0.01
|
)
|
|
Adjusted for special items
(1)
|
$
|
51
|
|
|
$
|
14
|
|
|
$
|
0.15
|
|
|
Three Months Ended December 31, 2016
|
Operating
Income (Loss) |
Net
Income (Loss) |
EPS
|
|
|
|||||||
(Unaudited, in millions, except per share amounts)
|
||||||||||||
GAAP, as reported
|
$
|
(18
|
)
|
|
$
|
(45
|
)
|
|
$
|
(0.50
|
)
|
|
Adjustments for special items:
|
|
|
|
|
|
|
|
|
|
|||
Foreign exchange loss
|
|
—
|
|
|
|
10
|
|
|
|
0.11
|
|
|
Closure costs, impairment and other related charges
|
|
25
|
|
|
|
25
|
|
|
|
0.28
|
|
|
Inventory write-downs related to closures
|
|
2
|
|
|
|
2
|
|
|
|
0.02
|
|
|
Start-up costs
|
|
3
|
|
|
|
3
|
|
|
|
0.03
|
|
|
Non-operating pension and OPEB costs
|
|
2
|
|
|
|
2
|
|
|
|
0.02
|
|
|
Other income, net
|
|
—
|
|
|
|
(3
|
)
|
|
|
(0.03
|
)
|
|
Income tax effect of special items
|
|
—
|
|
|
|
(1
|
)
|
|
|
(0.01
|
)
|
|
Adjusted for special items
(1)
|
$
|
14
|
|
|
$
|
(7
|
)
|
|
$
|
(0.08
|
)
|
|
(1)
|
Operating income (loss), net income (loss) and EPS, in each case as adjusted for special items, are non-GAAP financial measures. For more information on the calculation and reasons we include these measures, see note 1 under “
Overview –
2017
Overview
” above.
|
|
Years Ended December 31,
|
|||||||||||
(In millions, except per share amounts)
|
2017
|
2016
|
2015
|
|||||||||
Sales
|
$
|
3,513
|
|
|
$
|
3,545
|
|
|
$
|
3,645
|
|
|
Operating income (loss) per segment:
|
|
|
|
|
|
|
|
|
|
|||
Market pulp
|
|
79
|
|
|
|
37
|
|
|
|
71
|
|
|
Tissue
|
|
(6
|
)
|
|
|
(10
|
)
|
|
|
(1
|
)
|
|
Wood products
|
|
186
|
|
|
|
69
|
|
|
|
2
|
|
|
Newsprint
|
|
(23
|
)
|
|
|
(16
|
)
|
|
|
(25
|
)
|
|
Specialty papers
|
|
(9
|
)
|
|
|
19
|
|
|
|
23
|
|
|
Segment total
|
|
227
|
|
|
|
99
|
|
|
|
70
|
|
|
Corporate and other
|
|
(178
|
)
|
|
|
(125
|
)
|
|
|
(289
|
)
|
|
Operating inco
me (loss)
|
|
49
|
|
|
|
(26
|
)
|
|
|
(219
|
)
|
|
Net loss attributable to Resolute Forest Products Inc.
|
|
(84
|
)
|
|
|
(81
|
)
|
|
|
(257
|
)
|
|
Net loss per share attributable to Resolute Forest Products Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
(0.93
|
)
|
|
$
|
(0.90
|
)
|
|
$
|
(2.78
|
)
|
|
Diluted
|
|
(0.93
|
)
|
|
|
(0.90
|
)
|
|
|
(2.78
|
)
|
|
Adjusted EBITDA
(1)
|
$
|
364
|
|
|
$
|
263
|
|
|
$
|
260
|
|
|
|
As of December 31,
|
|||||||
(In millions)
|
2017
|
2016
|
||||||
Cash and cash equivalents
|
$
|
6
|
|
|
$
|
35
|
|
|
Total assets
|
|
4,147
|
|
|
|
4,277
|
|
|
(1)
|
EBITDA and adjusted EBITDA are not financial measures recognized under GAAP. EBITDA is calculated as net income (loss) including noncontrolling interests from the Consolidated Statements of Operations, adjusted for interest expense, income taxes, and depreciation and amortization. Adjusted EBITDA means EBITDA, excluding special items, such as foreign exchange gains and losses, severance costs, closure costs, impairment and other related charges, inventory write-downs related to closures, start-up costs, gains and losses on disposition of assets, non-operating pension and OPEB costs and credits, acquisition-related costs and other charges or credits. We believe that using non-GAAP measures such as EBITDA and adjusted EBITDA is useful because they are consistent with the indicators management uses internally to measure the Company’s performance and it allows the reader to more easily compare our operations and financial performance from period to period. EBITDA and adjusted EBITDA are internal measures, and therefore may not be comparable to those of other companies. These non-GAAP measures should not be viewed as substitutes to financial measures determined under GAAP.
|
|
Years Ended December 31,
|
|||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Net loss including noncontrolling interests
|
$
|
(78
|
)
|
|
$
|
(76
|
)
|
|
$
|
(255
|
)
|
|
Interest expense
|
|
49
|
|
|
|
38
|
|
|
|
41
|
|
|
Income tax provision (benefit)
|
|
84
|
|
|
|
19
|
|
|
|
(1
|
)
|
|
Depreciation and amortization
|
|
204
|
|
|
|
206
|
|
|
|
237
|
|
|
EBITDA
|
$
|
259
|
|
|
$
|
187
|
|
|
$
|
22
|
|
|
Foreign exchange (gain) loss
|
|
(9
|
)
|
|
|
7
|
|
|
|
4
|
|
|
Closure costs, impairment and other related charges
|
|
87
|
|
|
|
62
|
|
|
|
181
|
|
|
Inventory write-downs related to closures
|
|
24
|
|
|
|
7
|
|
|
|
2
|
|
|
Start-up costs
|
|
27
|
|
|
|
8
|
|
|
|
5
|
|
|
Net gain on disposition of assets
|
|
(15
|
)
|
|
|
(2
|
)
|
|
|
—
|
|
|
Non-operating pension and OPEB (credits) costs
|
|
(12
|
)
|
|
|
8
|
|
|
|
50
|
|
|
Acquisition-related costs
|
|
—
|
|
|
|
—
|
|
|
|
4
|
|
|
Other expense (income), net
|
|
3
|
|
|
|
(14
|
)
|
|
|
(8
|
)
|
|
Adjusted EBITDA
|
$
|
364
|
|
|
$
|
263
|
|
|
$
|
260
|
|
|
•
|
write-downs of mill stores and other supplies ($24 million), primarily as a result of the permanent closure of two paper machines in Calhoun, a paper machine in Catawba, and our Mokpo paper mill, compared to write-downs of mill stores and other supplies recorded in the prior year ($7 million), primarily as a result of the permanent closure of a newsprint machine at our Augusta mill;
|
•
|
start-up costs ($22 million) related to the Calhoun tissue manufacturing and converting facility and the restart of a paper machine in Alma (Quebec), compared to start-up costs incurred in the prior year ($6 million) for the continuous pulp digester project and tissue manufacturing and converting facility in Calhoun;
|
•
|
lower contribution from our cogeneration assets that sell power externally ($8 million) and our hydroelectric facilities ($5 million), mostly due to planned maintenance outages;
|
•
|
unfavorable fiber costs ($12 million), mostly due to higher recycled fiber prices and wood costs;
|
•
|
higher natural gas prices ($10 million);
|
•
|
higher maintenance costs ($7 million);
|
•
|
a favorable power cost adjustment in Thunder Bay in 2016 ($6 million);
|
•
|
higher asset preservation costs ($6 million), primarily related to the indefinite idling of our Thorold paper mill; and
|
•
|
the recognition of tax credits in connection with infrastructure investments in 2016 ($4 million);
|
•
|
lower defined benefit pension and OPEB plans costs ($21 million), mostly due to lower interest costs, as a result of the lower discount rates; and
|
•
|
favorable chemical costs ($12 million), mainly price-related.
|
•
|
a favorable power cost adjustment in Thunder Bay in 2016 ($6 million);
|
•
|
higher maintenance and labor costs ($6 million);
|
•
|
higher start-up costs ($6 million) related to the Calhoun tissue manufacturing and converting facility, as well as the restart of a paper machine in Alma; and
|
•
|
lower contribution from our cogeneration facility in Thunder Bay, mostly due to a planned maintenance outage ($2 million);
|
•
|
lower defined benefit pension and OPEB plans costs ($45 million), mostly due to lower amortization of actuarial losses, as a result of the lower balance sheet net pension and OPEB liability as of December 31, 2015, and a $14 million settlement charge related to annuity purchases for certain inactive U.S. employees recorded in 2015;
|
•
|
lower fiber costs ($21 million), including lower wood prices and favorable usage;
|
•
|
better power costs ($18 million), mostly price-related, including a benefit from the reduced power rates on Quebec’s north shore to compensate for the higher cost related to processing spruce budworm infested wood;
|
•
|
lower steam costs ($13 million), mainly due to lower natural gas prices;
|
•
|
higher contribution from our cogeneration assets that sell power externally and our hydroelectric facilities ($7 million); and
|
•
|
lower wood chip prices ($4 million);
|
•
|
higher maintenance costs ($20 million);
|
•
|
favorable property tax adjustments and the recognition of tax credits in connection with infrastructure investments, in 2015 ($15 million);
|
•
|
higher labor costs ($7 million);
|
•
|
unfavorable chemical costs ($6 million); and
|
•
|
more write-downs of mill stores and other supplies ($5 million), primarily as a result of the permanent closure of a newsprint machine at our Augusta mill.
|
|
Years Ended December 31,
|
|||||||||||
(In millions, except where otherwise stated)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Sales
|
$
|
911
|
|
|
$
|
836
|
|
|
$
|
889
|
|
|
Operating income
(1)
|
|
79
|
|
|
|
37
|
|
|
|
71
|
|
|
EBITDA
(2)
|
|
110
|
|
|
|
74
|
|
|
|
124
|
|
|
(In thousands of metric tons)
|
|
|
|
|
|
|
|
|
|
|||
Shipments
|
|
1,425
|
|
|
|
1,388
|
|
|
|
1,375
|
|
|
Downtime
|
|
84
|
|
|
|
65
|
|
|
|
112
|
|
|
|
December 31,
|
|||||||||||
(In thousands of metric tons)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Finished goods inventory
|
|
89
|
|
|
|
91
|
|
|
|
90
|
|
|
(1)
|
Net income including noncontrolling interests
is equal to
operating income
in this segment.
|
(2)
|
EBITDA, a non-GAAP financial measure, is reconciled below. For more information on the calculation and reasons we include this measure, see note 1 under “
Results of Operations – Consolidated Results – Selected Annual Financial Information
” above.
|
|
Years Ended December 31,
|
|||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Net income including noncontrolling interests
|
$
|
79
|
|
|
$
|
37
|
|
|
$
|
71
|
|
|
Depreciation and amortization
|
|
31
|
|
|
|
37
|
|
|
|
53
|
|
|
EBITDA
|
|
110
|
|
|
|
74
|
|
|
|
124
|
|
|
•
|
higher maintenance and labor costs ($6 million);
|
•
|
higher fiber costs ($5 million), mostly due to higher recycled fiber prices, offset in part by better usage;
|
•
|
higher natural gas prices ($4 million); and
|
•
|
lower contribution from our cogeneration assets in Saint-Félicien that sell power externally ($4 million);
|
•
|
higher maintenance and labor costs ($17 million);
|
•
|
lower fiber costs ($4 million);
|
•
|
lower wood chip prices ($3 million); and
|
•
|
lower steam costs ($3 million), due to lower natural gas prices.
|
|
Years Ended December 31,
|
|||||||||||
(In millions, except where otherwise stated)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Sales
|
$
|
81
|
|
|
$
|
89
|
|
|
$
|
11
|
|
|
Operating loss
(1)
|
|
(6
|
)
|
|
|
(10
|
)
|
|
|
(1
|
)
|
|
EBITDA
(2)
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
—
|
|
|
(In thousands of short tons)
|
|
|
|
|
|
|
|
|
|
|||
Shipments
(3) (4)
|
|
53
|
|
|
|
54
|
|
|
|
7
|
|
|
Downtime
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
December 31,
|
|||||||||||
(In thousands of short tons)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Finished goods inventory
(3)
|
|
13
|
|
|
|
5
|
|
|
|
6
|
|
|
(1)
|
Net loss including noncontrolling interests
is equal to
operating loss
in this segment.
|
(2)
|
EBITDA, a non-GAAP financial measure, is reconciled below. For more information on the calculation and reasons we include this measure, see note 1 under “
Results of Operations – Consolidated Results – Selected Annual Financial Information
” above.
|
(3)
|
Tissue converted products, which are measured in cases, are converted to short tons.
|
(4)
|
The conversion ratio to short tons for tissue converted products was revised in 2017. Prior period figures have been adjusted for comparative purposes.
|
|
Years Ended December 31,
|
|||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Net loss including noncontrolling interests
|
$
|
(6
|
)
|
|
$
|
(10
|
)
|
|
$
|
(1
|
)
|
|
Depreciation and amortization
|
|
5
|
|
|
|
5
|
|
|
|
1
|
|
|
EBITDA
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
—
|
|
|
|
Years Ended December 31,
|
|||||||||||
(In millions, except where otherwise stated)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Sales
|
$
|
797
|
|
|
$
|
596
|
|
|
$
|
536
|
|
|
Operating income
(1)
|
|
186
|
|
|
|
69
|
|
|
|
2
|
|
|
EBITDA
(2)
|
|
219
|
|
|
|
100
|
|
|
|
39
|
|
|
(In million board feet)
|
|
|
|
|
|
|
|
|
|
|||
Shipments
(3)
|
|
2,011
|
|
|
|
1,844
|
|
|
|
1,678
|
|
|
Downtime
(3)
|
|
130
|
|
|
|
199
|
|
|
|
176
|
|
|
|
December 31,
|
|||||||||||
(In million board feet)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Finished goods inventory
(3)
|
|
124
|
|
|
|
124
|
|
|
|
130
|
|
|
(1)
|
Net income including noncontrolling interests
is equal to
operating income
in this segment.
|
(2)
|
EBITDA, a non-GAAP financial measure, is reconciled below. For more information on the calculation and reasons we include this measure, see note 1 under “
Results of Operations – Consolidated Results – Selected Annual Financial Information
” above.
|
(3)
|
Includes wood pellets measured by mass, converted to board feet using a density-based conversion ratio.
|
|
Years Ended December 31,
|
|||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Net income including noncontrolling interests
|
$
|
186
|
|
|
$
|
69
|
|
|
$
|
2
|
|
|
Depreciation and amortization
|
|
33
|
|
|
|
31
|
|
|
|
37
|
|
|
EBITDA
|
|
219
|
|
|
|
100
|
|
|
|
39
|
|
|
•
|
the recognition of tax credits in 2015, in connection with infrastructure investments ($7 million);
|
•
|
higher labor and maintenance costs ($5 million); and
|
•
|
lower wood chip selling prices ($4 million);
|
|
Years Ended December 31,
|
|||||||||||
(In millions, except where otherwise stated)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Sales
|
$
|
842
|
|
|
$
|
1,009
|
|
|
$
|
1,105
|
|
|
Operating loss
(1)
|
|
(23
|
)
|
|
|
(16
|
)
|
|
|
(25
|
)
|
|
EBITDA
(2)
|
|
43
|
|
|
|
58
|
|
|
|
39
|
|
|
(In thousands of metric tons)
|
|
|
|
|
|
|
|
|
|
|||
Shipments
|
|
1,638
|
|
|
|
1,992
|
|
|
|
2,150
|
|
|
Downtime
|
|
55
|
|
|
|
81
|
|
|
|
78
|
|
|
|
December 31,
|
|||||||||||
(In thousands of metric tons)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Finished goods inventory
|
|
78
|
|
|
|
105
|
|
|
|
91
|
|
|
(1)
|
Net loss including noncontrolling interests
is equal to
operating loss
in this segment.
|
(2)
|
EBITDA, a non-GAAP financial measure, is reconciled below. For more information on the calculation and reasons we include this measure, see note 1 under “
Results of Operations – Consolidated Results – Selected Annual Financial Information
” above.
|
|
Years Ended December 31,
|
|||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Net loss including noncontrolling interests
|
$
|
(23
|
)
|
|
$
|
(16
|
)
|
|
$
|
(25
|
)
|
|
Depreciation and amortization
|
|
66
|
|
|
|
74
|
|
|
|
64
|
|
|
EBITDA
|
|
43
|
|
|
|
58
|
|
|
|
39
|
|
|
•
|
higher power costs ($10 million), mostly due to a favorable adjustment in Thunder Bay in 2016, and unfavorable usage;
|
•
|
lower contribution from our cogeneration facilities ($6 million), mostly the result of a more extensive planned maintenance outage in 2017 at Thunder Bay; and
|
•
|
unfavorable steam costs ($3 million), mainly due to higher natural gas prices.
|
•
|
lower power costs ($16 million), including a benefit from the reduced power rates on Quebec’s north shore to compensate for the higher cost related to processing spruce budworm infested wood;
|
•
|
lower steam costs ($5 million), mainly due to lower natural gas prices;
|
•
|
higher contribution from our cogeneration assets in Thunder Bay that sell power externally ($3 million);
|
•
|
lower wood chip prices ($2 million); and
|
•
|
favorable chemical costs ($2 million);
|
|
Years Ended December 31,
|
|||||||||||
(In millions, except where otherwise stated)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Sales
|
$
|
882
|
|
|
$
|
1,015
|
|
|
$
|
1,104
|
|
|
Operating (loss) income
(1)
|
|
(9
|
)
|
|
|
19
|
|
|
|
23
|
|
|
EBITDA
(2)
|
|
36
|
|
|
|
64
|
|
|
|
94
|
|
|
(In thousands of short tons)
|
|
|
|
|
|
|
|
|
|
|||
Shipments
|
|
1,343
|
|
|
|
1,514
|
|
|
|
1,580
|
|
|
Downtime
|
|
33
|
|
|
|
22
|
|
|
|
66
|
|
|
|
December 31,
|
|||||||||||
(In thousands of short tons)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Finished goods inventory
|
|
66
|
|
|
|
92
|
|
|
|
88
|
|
|
(1)
|
Net (loss) income including noncontrolling interests
is equal to
operating (loss) income
in this segment.
|
(2)
|
EBITDA, a non-GAAP financial measure, is reconciled below. For more information on the calculation and reasons we include this measure, see note 1 under “
Results of Operations – Consolidated Results – Selected Annual Financial Information
” above.
|
|
Years Ended December 31,
|
|||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Net (loss) income including noncontrolling interests
|
$
|
(9
|
)
|
|
$
|
19
|
|
|
$
|
23
|
|
|
Depreciation and amortization
|
|
45
|
|
|
|
45
|
|
|
|
71
|
|
|
EBITDA
|
|
36
|
|
|
|
64
|
|
|
|
94
|
|
|
•
|
favorable chemical costs ($9 million), mainly price-related;
|
•
|
lower power costs ($5 million), mostly price-related; and
|
•
|
higher contribution from our cogeneration assets in Dolbeau that sell power externally ($2 million);
|
•
|
unfavorable steam costs ($6 million), mostly due to higher natural gas prices; and
|
•
|
lower internal hydroelectric generation ($5 million), due to a planned maintenance outage.
|
•
|
lower fiber costs ($6 million);
|
•
|
higher contribution from our cogeneration assets in Dolbeau that sell power externally, and our hydroelectric facilities ($6 million);
|
•
|
favorable steam costs ($5 million), due to lower natural gas prices and favorable usage; and
|
•
|
lower wood chip prices ($3 million);
|
•
|
unfavorable chemical costs ($10 million); and
|
•
|
higher maintenance costs ($2 million).
|
|
Years Ended December 31,
|
|||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Cost of sales, excluding depreciation, amortization and distribution costs
|
$
|
(39
|
)
|
|
$
|
(23
|
)
|
|
$
|
(65
|
)
|
|
Depreciation and amortization
|
|
(24
|
)
|
|
|
(14
|
)
|
|
|
(11
|
)
|
|
Selling, general and administrative expenses
|
|
(43
|
)
|
|
|
(28
|
)
|
|
|
(32
|
)
|
|
Closure costs, impairment and other related charges
|
|
(87
|
)
|
|
|
(62
|
)
|
|
|
(181
|
)
|
|
Net gain on disposition of assets
|
|
15
|
|
|
|
2
|
|
|
|
—
|
|
|
Operating loss
|
$
|
(178
|
)
|
|
$
|
(125
|
)
|
|
$
|
(289
|
)
|
|
Interest expense
|
|
(49
|
)
|
|
|
(38
|
)
|
|
|
(41
|
)
|
|
Other income, net
|
|
6
|
|
|
|
7
|
|
|
|
4
|
|
|
Income tax (provision) benefit
|
|
(84
|
)
|
|
|
(19
|
)
|
|
|
1
|
|
|
Net loss including noncontrolling interests
|
$
|
(305
|
)
|
|
$
|
(175
|
)
|
|
$
|
(325
|
)
|
|
|
Years Ended December 31,
|
|||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Net loss including noncontrolling interests
|
$
|
(305
|
)
|
|
$
|
(175
|
)
|
|
$
|
(325
|
)
|
|
Interest expense
|
|
49
|
|
|
|
38
|
|
|
|
41
|
|
|
Income tax provision (benefit)
|
|
84
|
|
|
|
19
|
|
|
|
(1
|
)
|
|
Depreciation and amortization
|
|
24
|
|
|
|
14
|
|
|
|
11
|
|
|
EBITDA
|
$
|
(148
|
)
|
|
$
|
(104
|
)
|
|
$
|
(274
|
)
|
|
Foreign exchange (gain) loss
|
|
(9
|
)
|
|
|
7
|
|
|
|
4
|
|
|
Closure costs, impairment and other related charges
|
|
87
|
|
|
|
62
|
|
|
|
181
|
|
|
Inventory write-downs related to closures
|
|
24
|
|
|
|
7
|
|
|
|
2
|
|
|
Start-up costs
|
|
27
|
|
|
|
8
|
|
|
|
5
|
|
|
Net gain on disposition of assets
|
|
(15
|
)
|
|
|
(2
|
)
|
|
|
—
|
|
|
Non-operating pension and OPEB (credits) costs
|
|
(12
|
)
|
|
|
8
|
|
|
|
50
|
|
|
Acquisition-related costs
|
|
—
|
|
|
|
—
|
|
|
|
4
|
|
|
Other expense (income), net
|
|
3
|
|
|
|
(14
|
)
|
|
|
(8
|
)
|
|
Adjusted EBITDA
|
$
|
(43
|
)
|
|
$
|
(28
|
)
|
|
$
|
(36
|
)
|
|
•
|
write-downs of mill stores and other supplies ($24 million), primarily related to the permanent closure of two paper machines in Calhoun at the end of the third quarter of 2017, a paper machine at our Catawba paper mill at the end of the second quarter of 2017, and our Mokpo paper mill in the first quarter of 2017;
|
•
|
start-up costs ($22 million) related to the Calhoun tissue manufacturing and converting facility and the restart of a paper machine in Alma; and
|
•
|
asset preservation costs ($9 million), primarily related to the indefinite idling of our Thorold paper mill and our permanently closed Fort Frances (Ontario) mill;
|
•
|
write-downs of mill stores and other supplies ($7 million), mostly as a result of the permanent closure of a newsprint machine at our Augusta mill;
|
•
|
non-operating pension and OPEB costs ($6 million);
|
•
|
start-up costs ($6 million) for the tissue manufacturing and converting facility and the continuous pulp digester project, both located in Calhoun; and
|
•
|
asset preservation costs ($3 million), primarily for the permanently closed Fort Frances mill.
|
•
|
a long-lived asset impairment charge related to our Coosa Pines pulp mill ($55 million);
|
•
|
a long-lived asset impairment charge ($5 million) and severance and other closure-related costs ($6 million) in connection with the permanent closure of a paper machine at our Catawba paper mill;
|
•
|
accelerated depreciation ($6 million) and severance and other closure-related costs ($5 million) associated with the permanent closure of two paper machines in Calhoun; and
|
•
|
severance and other costs related to the permanent closure of our paper mill in Mokpo ($7 million).
|
•
|
non-operating pension and OPEB costs ($48 million);
|
•
|
asset preservation costs ($9 million) for the permanently closed Fort Frances, Laurentide (Quebec) and Iroquois Falls (Ontario) mills; and
|
•
|
start-up costs ($4 million), primarily related to the ramp-up of our Atikokan sawmill.
|
•
|
incur, assume or guarantee additional indebtedness;
|
•
|
issue redeemable stock and preferred stock;
|
•
|
pay dividends or make distributions or redeem or repurchase capital stock;
|
•
|
prepay, redeem or repurchase certain debt;
|
•
|
make loans and investments;
|
•
|
incur liens;
|
•
|
issue dividends, make loans or transfer assets from our subsidiaries;
|
•
|
sell or otherwise dispose of assets, including capital stock of subsidiaries;
|
•
|
consolidate or merge with or into, or sell substantially all of our assets to, another person;
|
•
|
enter into transactions with affiliates; and
|
•
|
enter into new lines of business.
|
|
December 31,
|
||
|
2017
|
2016
|
2015
|
Standard & Poor’s
|
|
|
|
Long-term corporate credit rating
|
BB-
|
BB-
|
BB-
|
Outlook
|
Negative
|
Negative
|
Stable
|
Moody’s Investors Service
|
|
|
|
Senior unsecured debt
|
B2
|
B1
|
Ba3
|
Corporate family rating
|
B1
|
Ba3
|
Ba3
|
Outlook
|
Stable
|
Stable
|
Stable
|
Liquidity rating
|
SGL-1
|
SGL-1
|
SGL-1
|
|
Years Ended December 31,
|
|||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Net cash provided by operating activities
|
$
|
158
|
|
|
$
|
81
|
|
|
$
|
138
|
|
|
Net cash used in investing activities
|
|
(192
|
)
|
|
|
(273
|
)
|
|
|
(352
|
)
|
|
Net cash provided by (used in) financing activities
|
|
3
|
|
|
|
169
|
|
|
|
(62
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
2
|
|
|
|
—
|
|
|
|
(3
|
)
|
|
Net decrease in cash and cash equivalents
|
$
|
(29
|
)
|
|
$
|
(23
|
)
|
|
$
|
(279
|
)
|
|
|
Accounting
|
Funding
(1)
|
||||||||||||||
|
December 31,
|
December 31,
|
||||||||||||||
(
In millions, except percentages
)
|
2017
|
|
|
2016
|
|
|
2017
|
|
(2)
|
2016
|
|
|
||||
Discount rate
|
|
3.6
|
%
|
|
|
3.8
|
%
|
|
|
4.9
|
%
|
|
|
5.0
|
%
|
|
Funded ratio
|
|
80
|
%
|
|
|
78
|
%
|
|
|
89
|
%
|
|
|
91
|
%
|
|
Deficit
|
$
|
(1,097
|
)
|
|
$
|
(1,123
|
)
|
|
$
|
(579
|
)
|
|
$
|
(621
|
)
|
|
(1)
|
Determined on a going-concern basis for Quebec plans, on a solvency basis for Ontario plans, and on a 25-year average interest rate basis for U.S. plans.
|
(2)
|
Preliminary, subject to final actuarial reports.
|
(In millions)
|
Total
|
|
|
2018
|
|
|
2019-2020
|
|
|
2021-2022
|
|
|
Thereafter
|
|
||||||
Long-term debt
(1)
|
$
|
1,024
|
|
|
$
|
43
|
|
|
$
|
145
|
|
|
$
|
163
|
|
|
$
|
673
|
|
|
Non-cancelable operating lease obligations
(2)
|
|
35
|
|
|
|
7
|
|
|
|
12
|
|
|
|
8
|
|
|
|
8
|
|
|
Purchase obligations
(2)
|
|
268
|
|
|
|
81
|
|
|
|
108
|
|
|
|
49
|
|
|
|
30
|
|
|
|
$
|
1,327
|
|
|
$
|
131
|
|
|
$
|
265
|
|
|
$
|
220
|
|
|
$
|
711
|
|
|
(1)
|
Long-term debt commitments represent primarily interest payments on the 2023 notes over the periods indicated and payment of the remaining principal balance at maturity, assuming no prior redemptions. Interest on our credit facility borrowings is assumed to remain unchanged from the rates in effect as of
December 31, 2017
, assuming no additional borrowings or repayments until maturity. Information on our long-term debt can be found in “
Note 13, “Long-Term Debt
,” to our Consolidated Financial Statements.
|
(2)
|
Information on our operating leases and purchase obligations can be found in
Note 19, “Operating Leases and Purchase Obligations
,” to our Consolidated Financial Statements.
|
•
|
discount rate – used to determine the net present value of our pension and OPEB obligations and to determine the interest cost component of our net periodic benefit cost;
|
•
|
return on assets – used to estimate the growth in the value of invested assets that are available to satisfy pension benefit obligations and to determine the expected return on plan assets component of our net periodic pension benefit cost;
|
•
|
life expectancy rate – used to estimate the impact of life expectancy on our pension and OPEB obligations;
|
•
|
rate of compensation increase – used to calculate the impact future pay increases will have on our pension obligations; and
|
•
|
health care cost trend rate – used to calculate the impact of future health care costs on our OPEB obligations.
|
|
2017 Net Periodic Benefit Cost
|
|
Pension and OPEB Obligations as of December 31, 2017
|
||||||||||||||
(In millions)
|
25 Basis Point Increase
|
25 Basis Point Decrease
|
|
25 Basis Point Increase
|
25 Basis Point Decrease
|
||||||||||||
Assumption:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Discount rate
|
$
|
(6
|
)
|
|
$
|
7
|
|
|
|
$
|
(137
|
)
|
|
$
|
150
|
|
|
Return on assets
|
|
(10
|
)
|
|
|
10
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Rate of compensation increase
|
|
1
|
|
|
|
(1
|
)
|
|
|
|
4
|
|
|
|
(4
|
)
|
|
Health care cost trend rate
|
|
—
|
|
|
|
—
|
|
|
|
|
2
|
|
|
|
(2
|
)
|
|
•
|
Deferred income tax assets of
$718 million
, comprised of
$561 million
for federal and state operating loss carryforwards expiring between 2021 and 2037, and
$157 million
for other temporary differences, mostly related to pension and OPEB plans.
|
•
|
Deferred income tax liabilities of
$8 million
, for various temporary differences.
|
•
|
A valuation allowance of
$709 million
against the net deferred income tax assets, which are not more likely than not to be realized in the future.
|
•
|
Deferred income tax assets of
$1,094 million
, comprised of
$196 million
related to undeducted research and development expenditures with no expiry,
$18 million
for federal and provincial operating loss carryforwards expiring between 2030 and 2037,
$96 million
for tax credit carryforwards expiring between 2021 and 2037, as well as
$784 million
for other temporary differences, mostly related to fixed asset undepreciated capital costs with no expiry, as well as pension and OPEB plans.
|
•
|
Deferred income tax liabilities of
$19 million
for various temporary differences.
|
•
|
A valuation allowance of
$13 million
, primarily related to net capital loss carryforwards with no expiry.
|
•
|
Deferred income tax assets of
$42 million
, mostly comprised of other foreign subsidiaries operating loss carryforwards expiring between 2019 and 2027.
|
•
|
A valuation allowance of
$42 million
against the net deferred income tax assets of other foreign subsidiaries, which are not more likely than not to be realized in the future.
|
(In millions)
|
1% Increase
|
1% Decrease
|
||||||
Assumption:
|
|
|
|
|
|
|
||
Sales pricing
|
$
|
64
|
|
|
$
|
(64
|
)
|
|
Product costs
|
|
(40
|
)
|
|
|
38
|
|
|
Discount rate
|
|
(13
|
)
|
|
|
14
|
|
|
PRODUCT
|
Unit
|
Projected change in annualized EBITDA ($ millions) based on $25 change in price per unit
|
|||
Market pulp
|
$ / metric ton
|
38
|
|
|
|
Wood products
|
$ / thousand board feet
|
48
|
|
|
|
Newsprint
|
$ / metric ton
|
37
|
|
|
|
Specialty papers
|
$ / short ton
|
30
|
|
|
|
Page
|
|
Years Ended December 31,
|
|||||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Sales
|
$
|
3,513
|
|
|
$
|
3,545
|
|
|
$
|
3,645
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|||
Cost of sales, excluding depreciation, amortization and distribution costs
|
|
2,574
|
|
|
|
2,716
|
|
|
|
2,826
|
|
|
Depreciation and amortization
|
|
204
|
|
|
|
206
|
|
|
|
237
|
|
|
Distribution costs
|
|
442
|
|
|
|
440
|
|
|
|
460
|
|
|
Selling, general and administrative expenses
|
|
172
|
|
|
|
149
|
|
|
|
160
|
|
|
Closure costs, impairment and other related charges
|
|
87
|
|
|
|
62
|
|
|
|
181
|
|
|
Net gain on disposition of assets
|
|
(15
|
)
|
|
|
(2
|
)
|
|
|
—
|
|
|
Operating income (loss)
|
|
49
|
|
|
|
(26
|
)
|
|
|
(219
|
)
|
|
Interest expense
|
|
(49
|
)
|
|
|
(38
|
)
|
|
|
(41
|
)
|
|
Other income, net
|
|
6
|
|
|
|
7
|
|
|
|
4
|
|
|
Income (loss) before income taxes
|
|
6
|
|
|
|
(57
|
)
|
|
|
(256
|
)
|
|
Income tax (provision) benefit
|
|
(84
|
)
|
|
|
(19
|
)
|
|
|
1
|
|
|
Net loss including noncontrolling interests
|
|
(78
|
)
|
|
|
(76
|
)
|
|
|
(255
|
)
|
|
Net income attributable to noncontrolling interests
|
|
(6
|
)
|
|
|
(5
|
)
|
|
|
(2
|
)
|
|
Net loss attributable to Resolute Forest Products Inc.
|
$
|
(84
|
)
|
|
$
|
(81
|
)
|
|
$
|
(257
|
)
|
|
Net loss per share attributable to Resolute Forest Products Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
(0.93
|
)
|
|
$
|
(0.90
|
)
|
|
$
|
(2.78
|
)
|
|
Diluted
|
|
(0.93
|
)
|
|
|
(0.90
|
)
|
|
|
(2.78
|
)
|
|
Weighted-average number of Resolute Forest Products Inc. common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
90.5
|
|
|
|
89.9
|
|
|
|
92.4
|
|
|
Diluted
|
|
90.5
|
|
|
|
89.9
|
|
|
|
92.4
|
|
|
|
|
Years Ended December 31,
|
|
|||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Net loss including noncontrolling interests
|
$
|
(78
|
)
|
|
$
|
(76
|
)
|
|
$
|
(255
|
)
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
|
|||
Unamortized prior service credits
|
|
|
|
|
|
|
|
|
|
|||
Change in unamortized prior service credits
|
|
(15
|
)
|
|
|
(17
|
)
|
|
|
(16
|
)
|
|
Income tax benefit
|
|
—
|
|
|
|
—
|
|
|
|
6
|
|
|
Change in unamortized prior service credits, net of tax
|
|
(15
|
)
|
|
|
(17
|
)
|
|
|
(10
|
)
|
|
Unamortized actuarial losses
|
|
|
|
|
|
|
|
|
|
|||
Change in unamortized actuarial losses
|
|
(10
|
)
|
|
|
(183
|
)
|
|
|
208
|
|
|
Income tax benefit (provision)
|
|
3
|
|
|
|
31
|
|
|
|
(63
|
)
|
|
Change in unamortized actuarial losses, net of tax
|
|
(7
|
)
|
|
|
(152
|
)
|
|
|
145
|
|
|
Foreign currency translation
|
|
(3
|
)
|
|
|
1
|
|
|
|
(4
|
)
|
|
Other comprehensive (loss) income, net of tax
|
|
(25
|
)
|
|
|
(168
|
)
|
|
|
131
|
|
|
Comprehensive loss including noncontrolling interests
|
|
(103
|
)
|
|
|
(244
|
)
|
|
|
(124
|
)
|
|
Comprehensive income attributable to noncontrolling interests
|
|
(6
|
)
|
|
|
(5
|
)
|
|
|
(2
|
)
|
|
Comprehensive loss attributable to Resolute Forest Products Inc.
|
$
|
(109
|
)
|
|
$
|
(249
|
)
|
|
$
|
(126
|
)
|
|
|
December 31,
2017 |
December 31,
2016 |
||||||
Assets
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
6
|
|
|
$
|
35
|
|
|
Accounts receivable, net:
|
|
|
|
|
|
|
||
Trade
|
|
399
|
|
|
|
358
|
|
|
Other
|
|
80
|
|
|
|
83
|
|
|
Inventories, net
|
|
526
|
|
|
|
570
|
|
|
Other current assets
|
|
33
|
|
|
|
35
|
|
|
Total current assets
|
|
1,044
|
|
|
|
1,081
|
|
|
Fixed assets, net
|
|
1,716
|
|
|
|
1,842
|
|
|
Amortizable intangible assets, net
|
|
65
|
|
|
|
70
|
|
|
Goodwill
|
|
81
|
|
|
|
81
|
|
|
Deferred income tax assets
|
|
1,076
|
|
|
|
1,039
|
|
|
Other assets
|
|
165
|
|
|
|
164
|
|
|
Total assets
|
$
|
4,147
|
|
|
$
|
4,277
|
|
|
|
|
|
|
|
|
|
||
Liabilities and equity
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
$
|
420
|
|
|
$
|
466
|
|
|
Current portion of long-term debt
|
|
1
|
|
|
|
1
|
|
|
Total current liabilities
|
|
421
|
|
|
|
467
|
|
|
Long-term debt, net of current portion
|
|
788
|
|
|
|
761
|
|
|
Pension and other postretirement benefit obligations
|
|
1,257
|
|
|
|
1,281
|
|
|
Deferred income tax liabilities
|
|
13
|
|
|
|
2
|
|
|
Other liabilities
|
|
68
|
|
|
|
55
|
|
|
Total liabilities
|
|
2,547
|
|
|
|
2,566
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
||
Equity:
|
|
|
|
|
|
|
||
Resolute Forest Products Inc. shareholders’ equity:
|
|
|
|
|
|
|
||
Common stock, $0.001 par value. 118.2 shares issued and 90.2 shares outstanding as of December 31, 2017; 117.8 shares issued and 89.8 shares outstanding as of December 31, 2016
|
|
—
|
|
|
|
—
|
|
|
Additional paid-in capital
|
|
3,793
|
|
|
|
3,775
|
|
|
Deficit
|
|
(1,294
|
)
|
|
|
(1,207
|
)
|
|
Accumulated other comprehensive loss
|
|
(780
|
)
|
|
|
(755
|
)
|
|
Treasury stock at cost, 28.0 shares as of December 31, 2017 and 2016
|
|
(120
|
)
|
|
|
(120
|
)
|
|
Total Resolute Forest Products Inc. shareholders’ equity
|
|
1,599
|
|
|
|
1,693
|
|
|
Noncontrolling interests
|
|
1
|
|
|
|
18
|
|
|
Total equity
|
|
1,600
|
|
|
|
1,711
|
|
|
Total liabilities and equity
|
$
|
4,147
|
|
|
$
|
4,277
|
|
|
|
Resolute Forest Products Inc. Shareholders’ Equity
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Common
Stock |
Additional
Paid-in Capital |
Deficit
|
Accumulated Other Comprehensive Loss
|
Treasury
Stock |
Non-
controlling Interests |
Total Equity
|
|||||||||||||||||||||
Balance as of December 31, 2014
|
$
|
—
|
|
|
$
|
3,754
|
|
|
$
|
(869
|
)
|
|
$
|
(718
|
)
|
|
$
|
(61
|
)
|
|
$
|
11
|
|
|
$
|
2,117
|
|
|
Share-based compensation costs for equity-classified awards
|
|
—
|
|
|
|
11
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
11
|
|
|
Net (loss) income
|
|
—
|
|
|
|
—
|
|
|
|
(257
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
|
(255
|
)
|
|
Purchases of treasury stock (5.5 shares) (Note 17)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(59
|
)
|
|
|
—
|
|
|
|
(59
|
)
|
|
Stock options exercised and stock unit awards vested (0.2 shares), net of shares forfeited for employee withholding taxes
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Other comprehensive income, net of tax
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
131
|
|
|
|
—
|
|
|
|
—
|
|
|
|
131
|
|
|
Balance as of December 31, 2015
|
|
—
|
|
|
|
3,765
|
|
|
|
(1,126
|
)
|
|
|
(587
|
)
|
|
|
(120
|
)
|
|
|
13
|
|
|
|
1,945
|
|
|
Share-based compensation costs for equity-classified awards
|
|
—
|
|
|
|
10
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10
|
|
|
Net (loss) income
|
|
—
|
|
|
|
—
|
|
|
|
(81
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
5
|
|
|
|
(76
|
)
|
|
Stock unit awards vested (0.3 shares), net of shares forfeited for employee withholding taxes
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Other comprehensive loss, net of tax
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(168
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(168
|
)
|
|
Balance as of December 31, 2016
|
|
—
|
|
|
|
3,775
|
|
|
|
(1,207
|
)
|
|
|
(755
|
)
|
|
|
(120
|
)
|
|
|
18
|
|
|
|
1,711
|
|
|
Share-based compensation costs for equity-classified awards
|
|
—
|
|
|
|
10
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10
|
|
|
Net (loss) income
|
|
—
|
|
|
|
—
|
|
|
|
(84
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
6
|
|
|
|
(78
|
)
|
|
Acquisition of noncontrolling interest (Note 1)
|
|
—
|
|
|
|
8
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(23
|
)
|
|
|
(15
|
)
|
|
Cumulative-effect adjustment upon deferred tax charge elimination (Note 15)
|
|
—
|
|
|
|
—
|
|
|
|
(3
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3
|
)
|
|
Stock unit awards vested (0.4 shares), net of shares forfeited for employee withholding taxes
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Other comprehensive loss, net of tax
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(25
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(25
|
)
|
|
Balance as of December 31, 2017
|
$
|
—
|
|
|
$
|
3,793
|
|
|
$
|
(1,294
|
)
|
|
$
|
(780
|
)
|
|
$
|
(120
|
)
|
|
$
|
1
|
|
|
$
|
1,600
|
|
|
|
Years Ended December 31,
|
|||||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Net loss including noncontrolling interests
|
$
|
(78
|
)
|
|
$
|
(76
|
)
|
|
$
|
(255
|
)
|
|
Adjustments to reconcile net loss including noncontrolling interests to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Share-based compensation
|
|
15
|
|
|
|
11
|
|
|
|
12
|
|
|
Depreciation and amortization
|
|
204
|
|
|
|
206
|
|
|
|
237
|
|
|
Closure costs, impairment and other related charges
|
|
71
|
|
|
|
59
|
|
|
|
176
|
|
|
Inventory write-downs related to closures
|
|
24
|
|
|
|
7
|
|
|
|
2
|
|
|
Deferred income taxes
|
|
80
|
|
|
|
14
|
|
|
|
3
|
|
|
Net pension contributions and other postretirement benefit payments
|
|
(114
|
)
|
|
|
(125
|
)
|
|
|
(62
|
)
|
|
Net gain on disposition of assets
|
|
(15
|
)
|
|
|
(2
|
)
|
|
|
—
|
|
|
(Gain) loss on translation of foreign currency denominated deferred income taxes
|
|
(71
|
)
|
|
|
(28
|
)
|
|
|
199
|
|
|
Loss (gain) on translation of foreign currency denominated pension and other postretirement benefit obligations
|
|
58
|
|
|
|
27
|
|
|
|
(184
|
)
|
|
Gain on disposition of equity method investment
|
|
—
|
|
|
|
(5
|
)
|
|
|
—
|
|
|
Net planned major maintenance amortization (payments)
|
|
3
|
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
Changes in working capital:
|
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
|
(37
|
)
|
|
|
26
|
|
|
|
87
|
|
|
Inventories
|
|
23
|
|
|
|
(37
|
)
|
|
|
10
|
|
|
Other current assets
|
|
1
|
|
|
|
7
|
|
|
|
(4
|
)
|
|
Accounts payable and accrued liabilities
|
|
(17
|
)
|
|
|
(3
|
)
|
|
|
(85
|
)
|
|
Other, net
|
|
11
|
|
|
|
3
|
|
|
|
5
|
|
|
Net cash provided by operating activities
|
|
158
|
|
|
|
81
|
|
|
|
138
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|||
Cash invested in fixed assets
|
|
(164
|
)
|
|
|
(249
|
)
|
|
|
(185
|
)
|
|
Acquisition of Atlas Paper Holdings, Inc., including cash overdraft acquired
|
|
—
|
|
|
|
—
|
|
|
|
(159
|
)
|
|
Acquisition of a sawmill in Senneterre (Quebec)
|
|
—
|
|
|
|
(6
|
)
|
|
|
—
|
|
|
Disposition of assets
|
|
21
|
|
|
|
5
|
|
|
|
—
|
|
|
Increase in countervailing duty cash deposits on supercalendered paper
|
|
(22
|
)
|
|
|
(23
|
)
|
|
|
(4
|
)
|
|
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber
|
|
(26
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Increase in restricted cash, net
|
|
(3
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Decrease (increase) in deposit requirements for letters of credit, net
|
|
2
|
|
|
|
—
|
|
|
|
(4
|
)
|
|
Net cash used in investing activities
|
|
(192
|
)
|
|
|
(273
|
)
|
|
|
(352
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Net borrowings under revolving credit facilities
|
|
19
|
|
|
|
125
|
|
|
|
—
|
|
|
Acquisition of noncontrolling interest in Donohue Malbaie Inc.
|
|
(15
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Issuance of long-term debt
|
|
—
|
|
|
|
46
|
|
|
|
—
|
|
|
Payments of debt
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
—
|
|
|
Payments of financing and credit facility fees
|
|
—
|
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
Purchases of treasury stock
|
|
—
|
|
|
|
—
|
|
|
|
(59
|
)
|
|
Net cash provided by (used in) financing activities
|
|
3
|
|
|
|
169
|
|
|
|
(62
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
2
|
|
|
|
—
|
|
|
|
(3
|
)
|
|
Net decrease in cash and cash equivalents
|
|
(29
|
)
|
|
|
(23
|
)
|
|
|
(279
|
)
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|||
Beginning of year
|
|
35
|
|
|
|
58
|
|
|
|
337
|
|
|
End of year
|
$
|
6
|
|
|
$
|
35
|
|
|
$
|
58
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
|||
Cash paid during the year for:
|
|
|
|
|
|
|
|
|
|
|||
Interest, including capitalized interest of $1, $7 and $5 in 2017, 2016 and 2015, respectively
|
$
|
47
|
|
|
$
|
40
|
|
|
$
|
40
|
|
|
Income taxes
|
|
7
|
|
|
|
3
|
|
|
|
3
|
|
|
Consolidated Subsidiary
|
Resolute Forest Products Ownership
|
Partner
|
Partner
Ownership
|
Forest Products Mauricie L.P.
|
93.2%
|
Coopérative Forestière du Haut Saint-Maurice
|
6.8%
|
Level 1 -
|
Valuations based on quoted prices in active markets for identical assets and liabilities.
|
|
|
Level 2 -
|
Valuations based on observable inputs, other than Level 1 prices, such as quoted interest or currency exchange rates.
|
|
|
Level 3 -
|
Valuations based on significant unobservable inputs that are supported by little or no market activity, such as discounted cash flow methodologies based on internal cash flow forecasts.
|
•
|
The majority of our revenue arises from contracts with customers in which the sale of goods is generally expected to be the main performance obligation. Accordingly, we expect to recognize revenue for most of our revenue streams at a point in time when control of the asset is transferred to the customer, generally upon delivery of the goods. Based on our review of our contracts with customers, the timing and amount of revenue recognized under ASU 2014-09 is expected to be consistent with our current practice.
|
•
|
Certain of our contracts with customers provide incentive offerings, including special pricing agreements, and other volume-based incentives. Currently, we recognize revenue from the sale of goods measured at the fair value of the consideration received or receivable, net of provisions for customer incentives. If revenue cannot be reliably measured, revenue recognition is deferred until the uncertainty is resolved. Such contract provisions give rise to variable consideration under ASU 2014-09, and will be required to be estimated at contract inception. ASU 2014-09 requires the estimated variable consideration to be constrained to prevent the over-recognition of revenue. Based on our assessment of individual contracts, the amount of revenue recognized under ASU 2014-09, after consideration of the estimated variable consideration and related constraint, is expected to be consistent with our current practice.
|
(Unaudited, in millions except per share data)
|
2015
|
|
|
|
Sales
|
$
|
3,730
|
|
|
Net loss attributable to Resolute Forest Products Inc.
|
|
(261
|
)
|
|
Basic net loss per share attributable to Resolute Forest Products Inc.
|
|
(2.82
|
)
|
|
Diluted net loss per share attributable to Resolute Forest Products Inc.
|
|
(2.82
|
)
|
|
(In millions)
|
Impairment of Assets
|
Accelerated Depreciation
|
Pension and OPEB Plan Curtailments and Other
|
Severance and Other Costs
|
Total
|
|||||||||||||||
Pulp mill in Coosa Pines (Alabama)
(1)
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
55
|
|
|
Permanent closures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Paper machine in Catawba (South Carolina)
|
|
5
|
|
|
|
—
|
|
|
|
2
|
|
|
|
4
|
|
|
|
11
|
|
|
Paper machines in Calhoun (Tennessee)
|
|
—
|
|
|
|
6
|
|
|
|
3
|
|
|
|
2
|
|
|
|
11
|
|
|
Paper mill in Mokpo (South Korea)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7
|
|
|
|
7
|
|
|
Other
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3
|
|
|
|
3
|
|
|
|
$
|
60
|
|
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
16
|
|
|
$
|
87
|
|
|
(1)
|
As a result of the continued deterioration of actual and projected cash flows, we recorded long-lived asset impairment charges of
$55 million
for the year ended December 31, 2017, to reduce the carrying value of the assets to their estimated fair value, which was determined using the market approach, by reference to market transaction prices for similar assets. The fair value measurement is considered a Level 3 measurement due to the significance of its unobservable inputs.
|
(In millions)
|
Impairment of Assets
|
Accelerated Depreciation
|
Severance and Other Costs
|
Total
|
||||||||||||
Paper mill in Mokpo
(1)
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
Permanent closure
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Paper machine in Augusta (Georgia)
|
|
—
|
|
|
|
32
|
|
|
|
4
|
|
|
|
36
|
|
|
Other
|
|
9
|
|
|
|
3
|
|
|
|
1
|
|
|
|
13
|
|
|
|
$
|
22
|
|
|
$
|
35
|
|
|
$
|
5
|
|
|
$
|
62
|
|
|
(1)
|
Due to declining market conditions and rising recycled fiber prices, we recorded long-lived asset impairment charges of
$13 million
for the year ended December 31, 2016, to reduce the carrying value of the assets to fair value. Management estimated fair value using the market approach, by reference to transactions on comparable assets adjusted for additional risks and uncertainties associated with the deteriorating market environment, as well as increased competition in Asia. The fair value measurement is considered a level 3 measurement due to the significance of its unobservable inputs. In 2017, we announced the permanent closure of our Mokpo paper mill effective March 9, 2017.
|
(In millions)
|
Impairment of Assets
|
Accelerated Depreciation
|
Severance and Other Costs
|
Total
|
||||||||||||
Paper mill in Catawba
(1)
|
$
|
176
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
176
|
|
|
Permanent closures
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Paper mill in Iroquois Falls (Ontario)
|
|
—
|
|
|
|
—
|
|
|
|
3
|
|
|
|
3
|
|
|
Paper machine in Clermont (Quebec)
|
|
—
|
|
|
|
2
|
|
|
|
—
|
|
|
|
2
|
|
|
|
$
|
176
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
181
|
|
|
(1)
|
As a result of declining market conditions, we recorded long-lived asset impairment charges of
$176 million
for the year ended December 31, 2015, related to our Catawba paper assets, to reduce the carrying value of the assets to fair value. Management estimated the fair value using the income approach. Projected discounted cash flows utilized under the income approach included estimates regarding future revenues and expenses attributable to the Catawba paper activities, projected capital expenditures and a discount rate of
12%
. This fair value measurement is considered a Level 3 measurement due to the significance of its unobservable inputs.
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Foreign exchange gain (loss)
|
$
|
9
|
|
|
$
|
(7
|
)
|
|
$
|
(4
|
)
|
|
Gain on disposition of equity method investment
(1)
|
|
—
|
|
|
|
5
|
|
|
|
—
|
|
|
Miscellaneous (expense) income
|
|
(3
|
)
|
|
|
9
|
|
|
|
8
|
|
|
|
$
|
6
|
|
|
$
|
7
|
|
|
$
|
4
|
|
|
(1)
|
On February 1, 2016, we sold for total consideration of
$5 million
our interest in Produits Forestiers Petit-Paris Inc., an unconsolidated entity located in Saint-Ludger-de-Milot (Quebec), in which we had a
50%
interest, resulting in a gain on disposition of
$5 million
.
|
(In millions)
|
Unamortized Prior Service Credits
|
Unamortized Actuarial Losses
|
Foreign Currency Translation
|
Total
|
||||||||||||
Balance as of December 31, 2016
|
$
|
67
|
|
|
$
|
(819
|
)
|
|
$
|
(3
|
)
|
|
$
|
(755
|
)
|
|
Other comprehensive income (loss) before reclassifications
|
|
1
|
|
|
|
(48
|
)
|
|
|
(3
|
)
|
|
|
(50
|
)
|
|
Amounts reclassified from accumulated other comprehensive loss
(1)
|
|
(16
|
)
|
|
|
41
|
|
|
|
—
|
|
|
|
25
|
|
|
Net current period other comprehensive loss
|
|
(15
|
)
|
|
|
(7
|
)
|
|
|
(3
|
)
|
|
|
(25
|
)
|
|
Balance as of December 31, 2017
|
$
|
52
|
|
|
$
|
(826
|
)
|
|
$
|
(6
|
)
|
|
$
|
(780
|
)
|
|
(1)
|
See the table below for details about these reclassifications.
|
(In millions)
|
Amounts Reclassified From Accumulated Other Comprehensive Loss
|
Affected Line in the Consolidated Statements of Operations
|
|||
Unamortized Prior Service Credits
|
|
|
|
|
|
Amortization of prior service credits
|
$
|
(15
|
)
|
|
Cost of sales, excluding depreciation, amortization and distribution costs
(1)
|
Curtailment gain
|
|
(1
|
)
|
|
Closure costs, impairment and other related charges
(1)
|
|
|
—
|
|
|
Income tax (provision) benefit
|
|
$
|
(16
|
)
|
|
Net of tax
|
Unamortized Actuarial Losses
|
|
|
|
|
|
Amortization of actuarial losses
|
$
|
50
|
|
|
Cost of sales, excluding depreciation, amortization and distribution costs
(1)
|
Curtailment loss
|
|
1
|
|
|
Closure costs, impairment and other related charges
(1)
|
Settlement loss
|
|
1
|
|
|
Cost of sales, excluding depreciation, amortization and distribution costs
(1)
|
|
|
(11
|
)
|
|
Income tax (provision) benefit
|
|
$
|
41
|
|
|
Net of tax
|
Total Reclassifications
|
$
|
25
|
|
|
Net of tax
|
(1)
|
These items are included in the computation of net periodic benefit cost related to our pension and OPEB plans summarized in
Note 14, “Pension and Other Postretirement Benefit Plans
.”
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Numerator:
|
|
|
|
|
|
|
|
|
|
|||
Net loss attributable to Resolute Forest Products Inc.
|
$
|
(84
|
)
|
|
$
|
(81
|
)
|
|
$
|
(257
|
)
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|||
Basic weighted-average number of Resolute Forest Products Inc. common shares outstanding
|
|
90.5
|
|
|
|
89.9
|
|
|
|
92.4
|
|
|
Dilutive impact of nonvested stock incentive awards
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Diluted weighted-average number of Resolute Forest Products Inc. common shares outstanding
|
|
90.5
|
|
|
|
89.9
|
|
|
|
92.4
|
|
|
Net loss per share attributable to Resolute Forest Products Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
(0.93
|
)
|
|
$
|
(0.90
|
)
|
|
$
|
(2.78
|
)
|
|
Diluted
|
$
|
(0.93
|
)
|
|
$
|
(0.90
|
)
|
|
$
|
(2.78
|
)
|
|
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
Stock options
|
1.4
|
|
1.4
|
|
1.5
|
|
Stock unit awards
|
4.1
|
|
2.6
|
|
1.4
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
||
Raw materials
|
$
|
108
|
|
|
$
|
126
|
|
|
Work in process
|
|
38
|
|
|
|
45
|
|
|
Finished goods
|
|
175
|
|
|
|
183
|
|
|
Mill stores and other supplies
|
|
205
|
|
|
|
216
|
|
|
|
$
|
526
|
|
|
$
|
570
|
|
|
(Dollars in millions)
|
Estimated Useful Lives (Years)
|
2017
|
|
|
2016
|
|
|
||
Land and land improvements
|
5 – 20
|
$
|
56
|
|
|
$
|
77
|
|
|
Buildings
|
2 – 40
|
|
298
|
|
|
|
257
|
|
|
Machinery and equipment
(1)
|
5 – 25
|
|
2,544
|
|
|
|
2,264
|
|
|
Hydroelectric power plants
|
10 – 40
|
|
292
|
|
|
|
287
|
|
|
Timberlands and timberlands improvements
|
3 – 20
|
|
110
|
|
|
|
109
|
|
|
Construction in progress
(1)
|
|
|
30
|
|
|
|
263
|
|
|
|
|
|
3,330
|
|
|
|
3,257
|
|
|
Less: Accumulated depreciation
|
|
|
(1,614
|
)
|
|
|
(1,415
|
)
|
|
|
|
$
|
1,716
|
|
|
$
|
1,842
|
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
||
Machinery and equipment
|
$
|
111
|
|
|
$
|
83
|
|
|
Construction in progress
|
|
—
|
|
|
|
13
|
|
|
|
|
111
|
|
|
|
96
|
|
|
Less: Accumulated depreciation
|
|
(42
|
)
|
|
|
(27
|
)
|
|
|
$
|
69
|
|
|
$
|
69
|
|
|
|
|
2017
|
|
2016
|
||||||||||||||||||||||
(Dollars in millions)
|
Estimated
Useful
Lives
(Years)
|
Gross
Carrying Value |
Accumulated
Amortization |
Net
|
|
Gross
Carrying Value |
Accumulated
Amortization |
Net
|
||||||||||||||||||
Water rights
(1)
|
10 – 40
|
$
|
19
|
|
|
$
|
5
|
|
|
$
|
14
|
|
|
|
$
|
19
|
|
|
$
|
4
|
|
|
$
|
15
|
|
|
Energy contracts
|
15 – 25
|
|
52
|
|
|
|
14
|
|
|
|
38
|
|
|
|
|
52
|
|
|
|
11
|
|
|
|
41
|
|
|
Customer relationships
|
10 – 15
|
|
14
|
|
|
|
2
|
|
|
|
12
|
|
|
|
|
14
|
|
|
|
1
|
|
|
|
13
|
|
|
Other
|
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
|
|
|
$
|
86
|
|
|
$
|
21
|
|
|
$
|
65
|
|
|
|
$
|
86
|
|
|
$
|
16
|
|
|
$
|
70
|
|
|
(1)
|
In order to operate our hydroelectric generation and transmission network, we draw water from various rivers in Quebec. For some of our facilities, the use of such government-owned waters is governed by water power leases or agreements with the province of Quebec, which set out the terms, conditions, and fees (as applicable). Terms of these agreements typically range from
10
to
25 years
and are generally renewable, under certain conditions. In some cases, the agreements are contingent on the continued operation of the related paper mills and a minimum level of capital spending in the region. For our other facilities, the right to generate hydroelectricity stems from our ownership of the riverbed on which these facilities are located.
|
(In millions)
|
2017
|
|
|
2016
|
|
|
||
Trade accounts payable
|
$
|
306
|
|
|
$
|
346
|
|
|
Payroll, bonuses and severance payable
|
|
55
|
|
|
|
51
|
|
|
Accrued interest
|
|
5
|
|
|
|
5
|
|
|
Pension and other postretirement benefit obligations
|
|
18
|
|
|
|
17
|
|
|
Book overdrafts
|
|
—
|
|
|
|
13
|
|
|
Income and other taxes payable
|
|
10
|
|
|
|
7
|
|
|
Environmental liabilities
|
|
2
|
|
|
|
5
|
|
|
Other
|
|
24
|
|
|
|
22
|
|
|
|
$
|
420
|
|
|
$
|
466
|
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
||
5.875% senior notes due 2023:
|
|
|
|
|
|
|
||
Principal amount
|
$
|
600
|
|
|
$
|
600
|
|
|
Deferred financing costs
|
|
(5
|
)
|
|
|
(6
|
)
|
|
Unamortized discount
|
|
(3
|
)
|
|
|
(4
|
)
|
|
Total senior notes due 2023
|
|
592
|
|
|
|
590
|
|
|
Term loan due 2025
|
|
46
|
|
|
|
46
|
|
|
Borrowings under revolving credit facilities
|
|
144
|
|
|
|
125
|
|
|
Capital lease obligation
|
|
7
|
|
|
|
1
|
|
|
Total debt
|
|
789
|
|
|
|
762
|
|
|
Less: Current portion of long-term debt
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Long-term debt, net of current portion
|
$
|
788
|
|
|
$
|
761
|
|
|
|
Pension Plans
|
|
OPEB Plans
|
||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
|
2017
|
|
|
2016
|
|
|
||||
Change in benefit obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Benefit obligations as of beginning of year
|
$
|
5,196
|
|
|
$
|
5,068
|
|
|
|
$
|
172
|
|
|
$
|
174
|
|
|
Service cost
|
|
19
|
|
|
|
20
|
|
|
|
|
1
|
|
|
|
1
|
|
|
Interest cost
|
|
199
|
|
|
|
215
|
|
|
|
|
7
|
|
|
|
7
|
|
|
Actuarial loss (gain)
|
|
156
|
|
|
|
169
|
|
|
|
|
(7
|
)
|
|
|
—
|
|
|
Participant contributions
|
|
7
|
|
|
|
8
|
|
|
|
|
2
|
|
|
|
2
|
|
|
Plan amendment
|
|
—
|
|
|
|
1
|
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
Special termination benefits
|
|
5
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Curtailments
|
|
1
|
|
|
|
—
|
|
|
|
|
4
|
|
|
|
—
|
|
|
Settlements
|
|
(29
|
)
|
|
|
(28
|
)
|
|
|
|
—
|
|
|
|
—
|
|
|
Benefits paid
|
|
(365
|
)
|
|
|
(380
|
)
|
|
|
|
(13
|
)
|
|
|
(15
|
)
|
|
Effect of foreign currency exchange rate changes
|
|
285
|
|
|
|
123
|
|
|
|
|
7
|
|
|
|
3
|
|
|
Benefit obligations as of end of year
|
|
5,474
|
|
|
|
5,196
|
|
|
|
|
172
|
|
|
|
172
|
|
|
Change in plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fair value of plan assets as of beginning of year
|
|
4,073
|
|
|
|
4,049
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Actual return on plan assets
|
|
346
|
|
|
|
184
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Employer contributions
|
|
111
|
|
|
|
141
|
|
|
|
|
11
|
|
|
|
13
|
|
|
Participant contributions
|
|
7
|
|
|
|
8
|
|
|
|
|
2
|
|
|
|
2
|
|
|
Settlements
|
|
(29
|
)
|
|
|
(28
|
)
|
|
|
|
—
|
|
|
|
—
|
|
|
Benefits paid
|
|
(365
|
)
|
|
|
(380
|
)
|
|
|
|
(13
|
)
|
|
|
(15
|
)
|
|
Effect of foreign currency exchange rate changes
|
|
234
|
|
|
|
99
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Fair value of plan assets as of end of year
|
|
4,377
|
|
|
|
4,073
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Funded status as of end of year
|
$
|
(1,097
|
)
|
|
$
|
(1,123
|
)
|
|
|
$
|
(172
|
)
|
|
$
|
(172
|
)
|
|
Amounts recognized in our Consolidated Balance Sheets consisted of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other assets
|
$
|
6
|
|
|
$
|
3
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Accounts payable and accrued liabilities
|
|
(3
|
)
|
|
|
(3
|
)
|
|
|
|
(15
|
)
|
|
|
(14
|
)
|
|
Pension and OPEB obligations
|
|
(1,100
|
)
|
|
|
(1,123
|
)
|
|
|
|
(157
|
)
|
|
|
(158
|
)
|
|
Net obligations recognized
|
$
|
(1,097
|
)
|
|
$
|
(1,123
|
)
|
|
|
$
|
(172
|
)
|
|
$
|
(172
|
)
|
|
|
Pension Plans
|
|
OPEB Plans
|
||||||||||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
||||||
Service cost
|
$
|
19
|
|
|
$
|
20
|
|
|
$
|
23
|
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
Interest cost
|
|
199
|
|
|
|
215
|
|
|
|
225
|
|
|
|
|
7
|
|
|
|
7
|
|
|
|
8
|
|
|
Expected return on plan assets
|
|
(254
|
)
|
|
|
(247
|
)
|
|
|
(260
|
)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Amortization of prior service credits
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
|
(14
|
)
|
|
|
(15
|
)
|
|
|
(14
|
)
|
|
Amortization of actuarial losses (gains)
|
|
55
|
|
|
|
54
|
|
|
|
84
|
|
|
|
|
(5
|
)
|
|
|
(5
|
)
|
|
|
(5
|
)
|
|
Net periodic benefit cost before special events
|
|
18
|
|
|
|
41
|
|
|
|
70
|
|
|
|
|
(11
|
)
|
|
|
(12
|
)
|
|
|
(10
|
)
|
|
Curtailments, settlements and other losses
|
|
7
|
|
|
|
—
|
|
|
|
14
|
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
$
|
25
|
|
|
$
|
41
|
|
|
$
|
84
|
|
|
|
$
|
(12
|
)
|
|
$
|
(12
|
)
|
|
$
|
(10
|
)
|
|
|
Pension Plans
|
|
OPEB Plans
|
||||||||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Benefit obligations:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.6
|
%
|
|
3.8
|
%
|
|
4.2
|
%
|
|
3.6
|
%
|
|
3.9
|
%
|
|
4.4
|
%
|
Rate of compensation increase
|
2.1
|
%
|
|
2.5
|
%
|
|
2.5
|
%
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.8
|
%
|
|
4.2
|
%
|
|
4.0
|
%
|
|
3.9
|
%
|
|
4.4
|
%
|
|
4.1
|
%
|
Expected return on assets
|
6.3
|
%
|
|
6.2
|
%
|
|
6.3
|
%
|
|
|
|
|
|
|
|
|
|
Rate of compensation increase
|
2.5
|
%
|
|
2.5
|
%
|
|
2.5
|
%
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
||||||||||
|
Domestic Plans
|
Foreign Plans
|
|
Domestic Plans
|
Foreign Plans
|
||||||||
Health care cost trend rate assumed for next year
|
7.2
|
%
|
|
4.8
|
%
|
|
|
7.0
|
%
|
|
4.2
|
%
|
|
Rate to which the cost trend rate is assumed to decline (ultimate trend rate)
|
4.5
|
%
|
|
4.5
|
%
|
|
|
4.5
|
%
|
|
4.0
|
%
|
|
Year that the rate reaches the ultimate trend rate
|
2030
|
|
|
2028
|
|
|
|
2028
|
|
|
2028
|
|
|
(In millions)
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
|||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|||
U.S. companies
|
$
|
882
|
|
|
$
|
882
|
|
|
$
|
—
|
|
|
Non-U.S. companies
|
|
1,132
|
|
|
|
1,132
|
|
|
|
—
|
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
|||
Corporate and government securities
|
|
1,244
|
|
|
|
126
|
|
|
|
1,118
|
|
|
Asset-backed securities
|
|
275
|
|
|
|
—
|
|
|
|
275
|
|
|
Cash and cash equivalents
|
|
169
|
|
|
|
166
|
|
|
|
3
|
|
|
Other plan liabilities, net
|
|
(2
|
)
|
|
|
—
|
|
|
|
(2
|
)
|
|
Total before investments measured at NAV
|
$
|
3,700
|
|
|
$
|
2,306
|
|
|
$
|
1,394
|
|
|
Investments measured at NAV
|
|
677
|
|
|
|
|
|
|
|
|
||
|
$
|
4,377
|
|
|
|
|
|
|
|
|
(In millions)
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
|||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|||
U.S. companies
|
$
|
865
|
|
|
$
|
865
|
|
|
$
|
—
|
|
|
Non-U.S. companies
|
|
889
|
|
|
|
889
|
|
|
|
—
|
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
|||
Corporate and government securities
|
|
1,281
|
|
|
|
163
|
|
|
|
1,118
|
|
|
Asset-backed securities
|
|
71
|
|
|
|
—
|
|
|
|
71
|
|
|
Cash and cash equivalents
|
|
330
|
|
|
|
330
|
|
|
|
—
|
|
|
Other plan assets, net
|
|
35
|
|
|
|
—
|
|
|
|
35
|
|
|
Total before investments measured at NAV
|
$
|
3,471
|
|
|
$
|
2,247
|
|
|
$
|
1,224
|
|
|
Investments measured at NAV
|
|
602
|
|
|
|
|
|
|
|
|
||
|
$
|
4,073
|
|
|
|
|
|
|
|
|
(In millions)
|
Pension Plans
(1)
|
OPEB Plans
|
||||||
2018
|
$
|
380
|
|
|
$
|
15
|
|
|
2019
|
|
372
|
|
|
|
14
|
|
|
2020
|
|
367
|
|
|
|
14
|
|
|
2021
|
|
363
|
|
|
|
13
|
|
|
2022
|
|
357
|
|
|
|
13
|
|
|
2023 - 2027
|
|
1,694
|
|
|
|
60
|
|
|
(1)
|
Benefit payments are expected be paid from the plans’ net assets.
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
United States
|
$
|
(289
|
)
|
|
$
|
(227
|
)
|
|
$
|
(355
|
)
|
|
Foreign
|
|
295
|
|
|
|
170
|
|
|
|
99
|
|
|
|
$
|
6
|
|
|
$
|
(57
|
)
|
|
$
|
(256
|
)
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
U.S. Federal and State:
|
|
|
|
|
|
|
|
|
|
|||
Current
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
Deferred
|
|
2
|
|
|
|
(11
|
)
|
|
|
32
|
|
|
|
|
2
|
|
|
|
(11
|
)
|
|
|
36
|
|
|
Foreign:
|
|
|
|
|
|
|
|
|
|
|||
Current
|
|
(4
|
)
|
|
|
(5
|
)
|
|
|
—
|
|
|
Deferred
|
|
(82
|
)
|
|
|
(3
|
)
|
|
|
(35
|
)
|
|
|
|
(86
|
)
|
|
|
(8
|
)
|
|
|
(35
|
)
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|||
Current
|
|
(4
|
)
|
|
|
(5
|
)
|
|
|
4
|
|
|
Deferred
|
|
(80
|
)
|
|
|
(14
|
)
|
|
|
(3
|
)
|
|
|
$
|
(84
|
)
|
|
$
|
(19
|
)
|
|
$
|
1
|
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Income (loss) before income taxes
|
$
|
6
|
|
|
$
|
(57
|
)
|
|
$
|
(256
|
)
|
|
Income tax (provision) benefit:
|
|
|
|
|
|
|
|
|
|
|||
Expected income tax (provision) benefit
|
|
(2
|
)
|
|
|
20
|
|
|
|
90
|
|
|
Changes resulting from:
|
|
|
|
|
|
|
|
|
|
|||
Valuation allowance
(1)
|
|
247
|
|
|
|
(99
|
)
|
|
|
(109
|
)
|
|
Enactment of change in tax rate
(2)
|
|
(368
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Adjustments for unrecognized tax benefits
(3)
|
|
1
|
|
|
|
55
|
|
|
|
—
|
|
|
Foreign exchange
|
|
6
|
|
|
|
(9
|
)
|
|
|
(20
|
)
|
|
Research and development, and other tax incentives
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
|
State income taxes, net of federal income tax benefit
|
|
10
|
|
|
|
6
|
|
|
|
12
|
|
|
Foreign tax rate differences
|
|
23
|
|
|
|
11
|
|
|
|
8
|
|
|
Effect of change in tax rates
(4)
|
|
—
|
|
|
|
—
|
|
|
|
18
|
|
|
Other, net
|
|
(2
|
)
|
|
|
(3
|
)
|
|
|
1
|
|
|
|
$
|
(84
|
)
|
|
$
|
(19
|
)
|
|
$
|
1
|
|
|
(1)
|
During 2017, we recorded a decrease in our valuation allowance of
$359 million
, due to the enactment of the TCJA, offset by an increase of
$112 million
, primarily related to our U.S. operations where we recognize a valuation allowance against virtually all of our net deferred income tax assets.
|
(2)
|
During 2017, we recorded decreases to our net deferred income tax assets of
$356 million
due to the enactment of the TCJA, and
$12 million
due to a lower foreign income tax rate.
|
(3)
|
During 2016, we recorded tax benefits of
$55 million
, almost all of which related to the release of previously unrecognized tax benefits due to the lapse of the statute of limitations of the applicable jurisdictions.
|
(4)
|
During 2015, we recorded an income tax benefit of
$18 million
as a result of a change in tax rates on deferred income taxes, primarily due to an intercompany asset transfer in connection with an operating company realignment.
|
(In millions)
|
2017
|
|
|
2016
|
|
|
||
Fixed assets
|
$
|
(4
|
)
|
|
$
|
(44
|
)
|
|
Other liabilities
|
|
(23
|
)
|
|
|
(21
|
)
|
|
Deferred income tax liabilities
|
|
(27
|
)
|
|
|
(65
|
)
|
|
Fixed assets
|
|
506
|
|
|
|
520
|
|
|
Pension and OPEB plans
|
|
330
|
|
|
|
392
|
|
|
Operating loss carryforwards
|
|
619
|
|
|
|
838
|
|
|
Capital loss carryforwards
|
|
12
|
|
|
|
11
|
|
|
Undeducted research and development expenditures
|
|
196
|
|
|
|
185
|
|
|
Tax credit carryforwards
|
|
119
|
|
|
|
107
|
|
|
Other assets
|
|
72
|
|
|
|
49
|
|
|
Deferred income tax assets
|
|
1,854
|
|
|
|
2,102
|
|
|
Valuation allowance
|
|
(764
|
)
|
|
|
(1,000
|
)
|
|
Net deferred income tax assets
|
$
|
1,063
|
|
|
$
|
1,037
|
|
|
Amounts recognized in our Consolidated Balance Sheets consisted of:
|
|
|
|
|
|
|
||
Deferred income tax assets
|
$
|
1,076
|
|
|
$
|
1,039
|
|
|
Deferred income tax liabilities
|
|
(13
|
)
|
|
|
(2
|
)
|
|
Net deferred income tax assets
|
$
|
1,063
|
|
|
$
|
1,037
|
|
|
(In millions)
|
Related
Deferred Income Tax Asset |
Year of
Expiration
|
||||
Operating loss carryforwards:
|
|
|
|
|
||
U.S. federal operating loss carryforwards of $2,218
|
$
|
466
|
|
(1
|
)
|
2022 – 2037
|
U.S. state operating loss carryforwards of $1,868
|
|
95
|
|
(1
|
)
|
2021 – 2037
|
Canadian federal and provincial (excluding Quebec) operating loss carryforwards of $73
|
|
18
|
|
|
2030 – 2037
|
|
Other operating loss carryforwards
|
|
40
|
|
|
2019 – 2027
|
|
|
$
|
619
|
|
|
|
|
Capital loss carryforwards:
|
|
|
|
|
||
Canadian net capital loss carryforwards of $43
|
|
12
|
|
|
Indefinite
|
|
|
$
|
12
|
|
|
|
|
Undeducted research and development expenditures:
|
|
|
|
|
||
Canadian federal and provincial (excluding Quebec) undeducted research and development expenditures of $694
|
$
|
116
|
|
|
Indefinite
|
|
Quebec undeducted research and development expenditures of $837
|
|
80
|
|
|
Indefinite
|
|
|
$
|
196
|
|
|
|
|
Tax credit carryforwards:
|
|
|
|
|
||
Canadian research and development tax credit carryforwards
|
$
|
96
|
|
|
2021 – 2037
|
|
U.S. state and other tax credit carryforwards
|
|
23
|
|
(1
|
)
|
2018 – 2032
|
|
$
|
119
|
|
|
|
(1)
|
As of
December 31, 2017
, we had a valuation allowance against virtually all of our U.S. operations net deferred income tax assets.
|
(In millions)
|
2017
|
|
|
2016
|
|
|
||
Beginning of year
|
$
|
44
|
|
|
$
|
97
|
|
|
Increase (decrease) in unrecognized tax benefits resulting from:
|
|
|
|
|
|
|
||
Enactment of change in tax rate
(1)
|
|
(15
|
)
|
|
|
—
|
|
|
Positions taken in the current period
|
|
—
|
|
|
|
1
|
|
|
Expirations of statute limitations
(2)
|
|
—
|
|
|
|
(55
|
)
|
|
Settlements with taxing authorities
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Change in foreign exchange rate
|
|
—
|
|
|
|
2
|
|
|
End of year
|
$
|
28
|
|
|
$
|
44
|
|
|
(1)
|
During 2017, previously unrecognized tax benefits decreased by
$15 million
due to the enactment of the TCJA.
|
(2)
|
During 2016, we released
$55 million
of previously unrecognized tax benefits due to the lapse of the statute of limitations of the applicable jurisdictions.
|
|
Number of
Shares
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Contractual
Life (years)
|
||||||
Balance as of December 31, 2016
|
1,415,971
|
|
|
$
|
15.77
|
|
|
5.8
|
|
Forfeited
|
(2,774
|
)
|
|
|
15.66
|
|
|
|
|
Expired
|
(108,656
|
)
|
|
|
14.09
|
|
|
|
|
Balance as of December 31, 2017
|
1,304,541
|
|
|
$
|
15.90
|
|
|
4.8
|
|
Exercisable as of December 31, 2017
|
1,304,541
|
|
|
$
|
15.90
|
|
|
4.8
|
|
(In millions)
|
Purchase Obligations
(1)
|
Operating
Leases
|
||||||
2018
|
$
|
81
|
|
|
$
|
7
|
|
|
2019
|
|
54
|
|
|
|
6
|
|
|
2020
|
|
54
|
|
|
|
6
|
|
|
2021
|
|
45
|
|
|
|
5
|
|
|
2022
|
|
4
|
|
|
|
3
|
|
|
Thereafter
|
|
30
|
|
|
|
8
|
|
|
|
$
|
268
|
|
|
$
|
35
|
|
|
(1)
|
Includes energy purchase obligations of
$209 million
through 2022 for certain of our pulp and paper mills.
|
(In millions)
|
Market
Pulp
(1)
|
Tissue
(2)
|
Wood
Products
(3)
|
Newsprint
|
Specialty
Papers
|
Segment
Total
|
Corporate
and Other
|
Total
|
||||||||||||||||||||||||
Sales
|
||||||||||||||||||||||||||||||||
2017
|
$
|
911
|
|
|
$
|
81
|
|
|
$
|
797
|
|
|
$
|
842
|
|
|
$
|
882
|
|
|
$
|
3,513
|
|
|
$
|
—
|
|
|
$
|
3,513
|
|
|
2016
|
|
836
|
|
|
|
89
|
|
|
|
596
|
|
|
|
1,009
|
|
|
|
1,015
|
|
|
|
3,545
|
|
|
|
—
|
|
|
|
3,545
|
|
|
2015
|
|
889
|
|
|
|
11
|
|
|
|
536
|
|
|
|
1,105
|
|
|
|
1,104
|
|
|
|
3,645
|
|
|
|
—
|
|
|
|
3,645
|
|
|
Depreciation and amortization
|
||||||||||||||||||||||||||||||||
2017
|
$
|
31
|
|
|
$
|
5
|
|
|
$
|
33
|
|
|
$
|
66
|
|
|
$
|
45
|
|
|
$
|
180
|
|
|
$
|
24
|
|
|
$
|
204
|
|
|
2016
|
|
37
|
|
|
|
5
|
|
|
|
31
|
|
|
|
74
|
|
|
|
45
|
|
|
|
192
|
|
|
|
14
|
|
|
|
206
|
|
|
2015
|
|
53
|
|
|
|
1
|
|
|
|
37
|
|
|
|
64
|
|
|
|
71
|
|
|
|
226
|
|
|
|
11
|
|
|
|
237
|
|
|
Operating income (loss)
|
||||||||||||||||||||||||||||||||
2017
|
$
|
79
|
|
|
$
|
(6
|
)
|
|
$
|
186
|
|
|
$
|
(23
|
)
|
|
$
|
(9
|
)
|
|
$
|
227
|
|
|
$
|
(178
|
)
|
|
$
|
49
|
|
|
2016
|
|
37
|
|
|
|
(10
|
)
|
|
|
69
|
|
|
|
(16
|
)
|
|
|
19
|
|
|
|
99
|
|
|
|
(125
|
)
|
|
|
(26
|
)
|
|
2015
|
|
71
|
|
|
|
(1
|
)
|
|
|
2
|
|
|
|
(25
|
)
|
|
|
23
|
|
|
|
70
|
|
|
|
(289
|
)
|
|
|
(219
|
)
|
|
Capital expenditures
|
||||||||||||||||||||||||||||||||
2017
|
$
|
12
|
|
|
$
|
101
|
|
|
$
|
9
|
|
|
$
|
6
|
|
|
$
|
20
|
|
|
$
|
148
|
|
|
$
|
16
|
|
|
$
|
164
|
|
|
2016
|
|
20
|
|
|
|
156
|
|
|
|
23
|
|
|
|
2
|
|
|
|
23
|
|
|
|
224
|
|
|
|
25
|
|
|
|
249
|
|
|
2015
|
|
60
|
|
|
|
41
|
|
|
|
43
|
|
|
|
10
|
|
|
|
13
|
|
|
|
167
|
|
|
|
18
|
|
|
|
185
|
|
|
(1)
|
Inter-segment sales of
$36 million
,
$33 million
and
$20 million
, which are transacted at cost, were excluded from market pulp sales for the years ended
December 31, 2017
,
2016
and
2015
, respectively.
|
(2)
|
Tissue capital expenditures consisted almost entirely of expenditures for the tissue manufacturing and converting facility in Calhoun.
|
(3)
|
Wood products sales to our joint ventures, which are transacted at arm’s length negotiated prices, were
$20 million
,
$17 million
and
$20 million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively.
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
United States
|
$
|
2,387
|
|
|
$
|
2,464
|
|
|
$
|
2,421
|
|
|
Foreign countries:
|
|
|
|
|
|
|
|
|
|
|||
Canada
|
|
517
|
|
|
|
428
|
|
|
|
476
|
|
|
Mexico
|
|
126
|
|
|
|
126
|
|
|
|
150
|
|
|
Other countries
|
|
483
|
|
|
|
527
|
|
|
|
598
|
|
|
|
|
1,126
|
|
|
|
1,081
|
|
|
|
1,224
|
|
|
|
$
|
3,513
|
|
|
$
|
3,545
|
|
|
$
|
3,645
|
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
||
United States
|
$
|
790
|
|
|
$
|
795
|
|
|
Foreign countries:
|
|
|
|
|
|
|
||
Canada
|
|
1,143
|
|
|
|
1,259
|
|
|
South Korea
|
|
—
|
|
|
|
8
|
|
|
|
|
1,143
|
|
|
|
1,267
|
|
|
|
$
|
1,933
|
|
|
$
|
2,062
|
|
|
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
|
||||||||||||||||||||
For the Year Ended December 31, 2017
|
||||||||||||||||||||
(In millions)
|
Parent
|
Guarantor
Subsidiaries
|
Non-guarantor
Subsidiaries
|
Consolidating
Adjustments
|
Consolidated
|
|||||||||||||||
Sales
|
$
|
—
|
|
|
$
|
2,849
|
|
|
$
|
2,264
|
|
|
$
|
(1,600
|
)
|
|
$
|
3,513
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of sales, excluding depreciation, amortization and distribution costs
|
|
—
|
|
|
|
2,702
|
|
|
|
1,467
|
|
|
|
(1,595
|
)
|
|
|
2,574
|
|
|
Depreciation and amortization
|
|
—
|
|
|
|
74
|
|
|
|
130
|
|
|
|
—
|
|
|
|
204
|
|
|
Distribution costs
|
|
—
|
|
|
|
159
|
|
|
|
291
|
|
|
|
(8
|
)
|
|
|
442
|
|
|
Selling, general and administrative expenses
|
|
30
|
|
|
|
69
|
|
|
|
73
|
|
|
|
—
|
|
|
|
172
|
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
76
|
|
|
|
11
|
|
|
|
—
|
|
|
|
87
|
|
|
Net gain on disposition of assets
|
|
—
|
|
|
|
—
|
|
|
|
(15
|
)
|
|
|
—
|
|
|
|
(15
|
)
|
|
Operating (loss) income
|
|
(30
|
)
|
|
|
(231
|
)
|
|
|
307
|
|
|
|
3
|
|
|
|
49
|
|
|
Interest expense
|
|
(95
|
)
|
|
|
(9
|
)
|
|
|
(13
|
)
|
|
|
68
|
|
|
|
(49
|
)
|
|
Other income (expense), net
|
|
—
|
|
|
|
76
|
|
|
|
(2
|
)
|
|
|
(68
|
)
|
|
|
6
|
|
|
Equity in income of subsidiaries
|
|
41
|
|
|
|
43
|
|
|
|
—
|
|
|
|
(84
|
)
|
|
|
—
|
|
|
(Loss) income before income taxes
|
|
(84
|
)
|
|
|
(121
|
)
|
|
|
292
|
|
|
|
(81
|
)
|
|
|
6
|
|
|
Income tax benefit (provision)
|
|
—
|
|
|
|
2
|
|
|
|
(85
|
)
|
|
|
(1
|
)
|
|
|
(84
|
)
|
|
Net (loss) income including noncontrolling interests
|
|
(84
|
)
|
|
|
(119
|
)
|
|
|
207
|
|
|
|
(82
|
)
|
|
|
(78
|
)
|
|
Net income attributable to noncontrolling interests
|
|
—
|
|
|
|
—
|
|
|
|
(6
|
)
|
|
|
—
|
|
|
|
(6
|
)
|
|
Net (loss) income attributable to Resolute Forest Products Inc.
|
$
|
(84
|
)
|
|
$
|
(119
|
)
|
|
$
|
201
|
|
|
$
|
(82
|
)
|
|
$
|
(84
|
)
|
|
Comprehensive (loss) income attributable to Resolute Forest Products Inc.
|
$
|
(109
|
)
|
|
$
|
(135
|
)
|
|
$
|
192
|
|
|
$
|
(57
|
)
|
|
$
|
(109
|
)
|
|
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
|
||||||||||||||||||||
For the Year Ended December 31, 2016
|
||||||||||||||||||||
(In millions)
|
Parent
|
Guarantor
Subsidiaries
|
Non-guarantor
Subsidiaries
|
Consolidating
Adjustments
|
Consolidated
|
|||||||||||||||
Sales
|
$
|
—
|
|
|
$
|
2,907
|
|
|
$
|
2,145
|
|
|
$
|
(1,507
|
)
|
|
$
|
3,545
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of sales, excluding depreciation, amortization and distribution costs
|
|
—
|
|
|
|
2,745
|
|
|
|
1,471
|
|
|
|
(1,500
|
)
|
|
|
2,716
|
|
|
Depreciation and amortization
|
|
—
|
|
|
|
78
|
|
|
|
128
|
|
|
|
—
|
|
|
|
206
|
|
|
Distribution costs
|
|
—
|
|
|
|
168
|
|
|
|
273
|
|
|
|
(1
|
)
|
|
|
440
|
|
|
Selling, general and administrative expenses
|
|
20
|
|
|
|
61
|
|
|
|
68
|
|
|
|
—
|
|
|
|
149
|
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
38
|
|
|
|
24
|
|
|
|
—
|
|
|
|
62
|
|
|
Net gain on disposition of assets
|
|
—
|
|
|
|
—
|
|
|
|
(2
|
)
|
|
|
—
|
|
|
|
(2
|
)
|
|
Operating (loss) income
|
|
(20
|
)
|
|
|
(183
|
)
|
|
|
183
|
|
|
|
(6
|
)
|
|
|
(26
|
)
|
|
Interest expense
|
|
(80
|
)
|
|
|
—
|
|
|
|
(10
|
)
|
|
|
52
|
|
|
|
(38
|
)
|
|
Other income, net
|
|
—
|
|
|
|
57
|
|
|
|
2
|
|
|
|
(52
|
)
|
|
|
7
|
|
|
Equity in income of subsidiaries
|
|
19
|
|
|
|
24
|
|
|
|
—
|
|
|
|
(43
|
)
|
|
|
—
|
|
|
(Loss) income before income taxes
|
|
(81
|
)
|
|
|
(102
|
)
|
|
|
175
|
|
|
|
(49
|
)
|
|
|
(57
|
)
|
|
Income tax provision
|
|
—
|
|
|
|
(11
|
)
|
|
|
(10
|
)
|
|
|
2
|
|
|
|
(19
|
)
|
|
Net (loss) income including noncontrolling interests
|
|
(81
|
)
|
|
|
(113
|
)
|
|
|
165
|
|
|
|
(47
|
)
|
|
|
(76
|
)
|
|
Net income attributable to noncontrolling interests
|
|
—
|
|
|
|
—
|
|
|
|
(5
|
)
|
|
|
—
|
|
|
|
(5
|
)
|
|
Net (loss) income attributable to Resolute Forest Products Inc.
|
$
|
(81
|
)
|
|
$
|
(113
|
)
|
|
$
|
160
|
|
|
$
|
(47
|
)
|
|
$
|
(81
|
)
|
|
Comprehensive (loss) income attributable to Resolute Forest Products Inc.
|
$
|
(249
|
)
|
|
$
|
(197
|
)
|
|
$
|
73
|
|
|
$
|
124
|
|
|
$
|
(249
|
)
|
|
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
|
||||||||||||||||||||
For the Year Ended December 31, 2015
|
||||||||||||||||||||
(In millions)
|
Parent
|
Guarantor
Subsidiaries |
Non-guarantor
Subsidiaries |
Consolidating
Adjustments |
Consolidated
|
|||||||||||||||
Sales
|
$
|
—
|
|
|
$
|
2,975
|
|
|
$
|
2,223
|
|
|
$
|
(1,553
|
)
|
|
$
|
3,645
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of sales, excluding depreciation, amortization and distribution costs
|
|
—
|
|
|
|
2,780
|
|
|
|
1,601
|
|
|
|
(1,555
|
)
|
|
|
2,826
|
|
|
Depreciation and amortization
|
|
—
|
|
|
|
93
|
|
|
|
144
|
|
|
|
—
|
|
|
|
237
|
|
|
Distribution costs
|
|
—
|
|
|
|
168
|
|
|
|
293
|
|
|
|
(1
|
)
|
|
|
460
|
|
|
Selling, general and administrative expenses
|
|
19
|
|
|
|
55
|
|
|
|
86
|
|
|
|
—
|
|
|
|
160
|
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
176
|
|
|
|
5
|
|
|
|
—
|
|
|
|
181
|
|
|
Operating (loss) income
|
|
(19
|
)
|
|
|
(297
|
)
|
|
|
94
|
|
|
|
3
|
|
|
|
(219
|
)
|
|
Interest expense
|
|
(75
|
)
|
|
|
—
|
|
|
|
(12
|
)
|
|
|
46
|
|
|
|
(41
|
)
|
|
Other income, net
|
|
—
|
|
|
|
37
|
|
|
|
13
|
|
|
|
(46
|
)
|
|
|
4
|
|
|
Equity in (loss) income of subsidiaries
|
|
(163
|
)
|
|
|
20
|
|
|
|
—
|
|
|
|
143
|
|
|
|
—
|
|
|
(Loss) income before income taxes
|
|
(257
|
)
|
|
|
(240
|
)
|
|
|
95
|
|
|
|
146
|
|
|
|
(256
|
)
|
|
Income tax benefit (provision)
|
|
—
|
|
|
|
36
|
|
|
|
(34
|
)
|
|
|
(1
|
)
|
|
|
1
|
|
|
Net (loss) income including noncontrolling interests
|
|
(257
|
)
|
|
|
(204
|
)
|
|
|
61
|
|
|
|
145
|
|
|
|
(255
|
)
|
|
Net income attributable to noncontrolling interests
|
|
—
|
|
|
|
—
|
|
|
|
(2
|
)
|
|
|
—
|
|
|
|
(2
|
)
|
|
Net (loss) income attributable to Resolute Forest Products Inc.
|
$
|
(257
|
)
|
|
$
|
(204
|
)
|
|
$
|
59
|
|
|
$
|
145
|
|
|
$
|
(257
|
)
|
|
Comprehensive (loss) income attributable to Resolute Forest Products Inc.
|
$
|
(126
|
)
|
|
$
|
(169
|
)
|
|
$
|
155
|
|
|
$
|
14
|
|
|
$
|
(126
|
)
|
|
CONDENSED CONSOLIDATING BALANCE SHEET
|
||||||||||||||||||||
As of December 31, 2017
|
||||||||||||||||||||
(In millions)
|
Parent
|
Guarantor
Subsidiaries
|
Non-guarantor
Subsidiaries
|
Consolidating
Adjustments
|
Consolidated
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
Accounts receivable, net
|
|
—
|
|
|
|
319
|
|
|
|
160
|
|
|
|
—
|
|
|
|
479
|
|
|
Accounts receivable from affiliates
|
|
—
|
|
|
|
535
|
|
|
|
729
|
|
|
|
(1,264
|
)
|
|
|
—
|
|
|
Inventories, net
|
|
—
|
|
|
|
243
|
|
|
|
292
|
|
|
|
(9
|
)
|
|
|
526
|
|
|
Note, advance and interest receivable from parent
|
|
—
|
|
|
|
538
|
|
|
|
—
|
|
|
|
(538
|
)
|
|
|
—
|
|
|
Notes and interest receivable from affiliates
|
|
—
|
|
|
|
32
|
|
|
|
—
|
|
|
|
(32
|
)
|
|
|
—
|
|
|
Other current assets
|
|
—
|
|
|
|
16
|
|
|
|
17
|
|
|
|
—
|
|
|
|
33
|
|
|
Total current assets
|
|
—
|
|
|
|
1,686
|
|
|
|
1,201
|
|
|
|
(1,843
|
)
|
|
|
1,044
|
|
|
Fixed assets, net
|
|
—
|
|
|
|
692
|
|
|
|
1,024
|
|
|
|
—
|
|
|
|
1,716
|
|
|
Amortizable intangible assets, net
|
|
—
|
|
|
|
13
|
|
|
|
52
|
|
|
|
—
|
|
|
|
65
|
|
|
Goodwill
|
|
—
|
|
|
|
81
|
|
|
|
—
|
|
|
|
—
|
|
|
|
81
|
|
|
Deferred income tax assets
|
|
—
|
|
|
|
1
|
|
|
|
1,073
|
|
|
|
2
|
|
|
|
1,076
|
|
|
Notes receivable from parent
|
|
—
|
|
|
|
330
|
|
|
|
—
|
|
|
|
(330
|
)
|
|
|
—
|
|
|
Note receivable from affiliate
|
|
—
|
|
|
|
116
|
|
|
|
—
|
|
|
|
(116
|
)
|
|
|
—
|
|
|
Investments in consolidated subsidiaries and affiliates
|
|
3,939
|
|
|
|
2,111
|
|
|
|
—
|
|
|
|
(6,050
|
)
|
|
|
—
|
|
|
Other assets
|
|
—
|
|
|
|
98
|
|
|
|
67
|
|
|
|
—
|
|
|
|
165
|
|
|
Total assets
|
$
|
3,939
|
|
|
$
|
5,128
|
|
|
$
|
3,417
|
|
|
$
|
(8,337
|
)
|
|
$
|
4,147
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts payable and accrued liabilities
|
$
|
4
|
|
|
$
|
171
|
|
|
$
|
245
|
|
|
$
|
—
|
|
|
$
|
420
|
|
|
Current portion of long-term debt
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
Accounts payable to affiliates
|
|
536
|
|
|
|
728
|
|
|
|
—
|
|
|
|
(1,264
|
)
|
|
|
—
|
|
|
Note, advance and interest payable to subsidiaries
|
|
538
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(538
|
)
|
|
|
—
|
|
|
Notes and interest payable to affiliate
|
|
—
|
|
|
|
—
|
|
|
|
32
|
|
|
|
(32
|
)
|
|
|
—
|
|
|
Total current liabilities
|
|
1,078
|
|
|
|
900
|
|
|
|
277
|
|
|
|
(1,834
|
)
|
|
|
421
|
|
|
Long-term debt, net of current portion
|
|
592
|
|
|
|
196
|
|
|
|
—
|
|
|
|
—
|
|
|
|
788
|
|
|
Note payable to subsidiary
|
|
330
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(330
|
)
|
|
|
—
|
|
|
Note payable to affiliate
|
|
—
|
|
|
|
—
|
|
|
|
116
|
|
|
|
(116
|
)
|
|
|
—
|
|
|
Pension and other postretirement benefit obligations
|
|
—
|
|
|
|
378
|
|
|
|
879
|
|
|
|
—
|
|
|
|
1,257
|
|
|
Deferred income tax liabilities
|
|
—
|
|
|
|
—
|
|
|
|
13
|
|
|
|
—
|
|
|
|
13
|
|
|
Other liabilities
|
|
5
|
|
|
|
24
|
|
|
|
39
|
|
|
|
—
|
|
|
|
68
|
|
|
Total liabilities
|
|
2,005
|
|
|
|
1,498
|
|
|
|
1,324
|
|
|
|
(2,280
|
)
|
|
|
2,547
|
|
|
Total equity
|
|
1,934
|
|
|
|
3,630
|
|
|
|
2,093
|
|
|
|
(6,057
|
)
|
|
|
1,600
|
|
|
Total liabilities and equity
|
$
|
3,939
|
|
|
$
|
5,128
|
|
|
$
|
3,417
|
|
|
$
|
(8,337
|
)
|
|
$
|
4,147
|
|
|
CONDENSED CONSOLIDATING BALANCE SHEET
|
||||||||||||||||||||
As of December 31, 2016
|
||||||||||||||||||||
(In millions)
|
Parent
|
Guarantor
Subsidiaries
|
Non-guarantor
Subsidiaries
|
Consolidating
Adjustments
|
Consolidated
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
35
|
|
|
Accounts receivable, net
|
|
—
|
|
|
|
283
|
|
|
|
158
|
|
|
|
—
|
|
|
|
441
|
|
|
Accounts receivable from affiliates
|
|
—
|
|
|
|
479
|
|
|
|
395
|
|
|
|
(874
|
)
|
|
|
—
|
|
|
Inventories, net
|
|
—
|
|
|
|
259
|
|
|
|
323
|
|
|
|
(12
|
)
|
|
|
570
|
|
|
Note, advance and interest receivable from parent
|
|
—
|
|
|
|
373
|
|
|
|
—
|
|
|
|
(373
|
)
|
|
|
—
|
|
|
Notes and interest receivable from affiliates
|
|
—
|
|
|
|
54
|
|
|
|
—
|
|
|
|
(54
|
)
|
|
|
—
|
|
|
Other current assets
|
|
—
|
|
|
|
16
|
|
|
|
19
|
|
|
|
—
|
|
|
|
35
|
|
|
Total current assets
|
|
—
|
|
|
|
1,466
|
|
|
|
928
|
|
|
|
(1,313
|
)
|
|
|
1,081
|
|
|
Fixed assets, net
|
|
—
|
|
|
|
733
|
|
|
|
1,109
|
|
|
|
—
|
|
|
|
1,842
|
|
|
Amortizable intangible assets, net
|
|
—
|
|
|
|
14
|
|
|
|
56
|
|
|
|
—
|
|
|
|
70
|
|
|
Goodwill
|
|
—
|
|
|
|
81
|
|
|
|
—
|
|
|
|
—
|
|
|
|
81
|
|
|
Deferred income tax assets
|
|
—
|
|
|
|
—
|
|
|
|
1,036
|
|
|
|
3
|
|
|
|
1,039
|
|
|
Note receivable from parent
|
|
—
|
|
|
|
443
|
|
|
|
—
|
|
|
|
(443
|
)
|
|
|
—
|
|
|
Note receivable from affiliate
|
|
—
|
|
|
|
109
|
|
|
|
—
|
|
|
|
(109
|
)
|
|
|
—
|
|
|
Investments in consolidated subsidiaries and affiliates
|
|
3,918
|
|
|
|
2,068
|
|
|
|
—
|
|
|
|
(5,986
|
)
|
|
|
—
|
|
|
Other assets
|
|
—
|
|
|
|
62
|
|
|
|
102
|
|
|
|
—
|
|
|
|
164
|
|
|
Total assets
|
$
|
3,918
|
|
|
$
|
4,976
|
|
|
$
|
3,231
|
|
|
$
|
(7,848
|
)
|
|
$
|
4,277
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts payable and accrued liabilities
|
$
|
5
|
|
|
$
|
222
|
|
|
$
|
239
|
|
|
$
|
—
|
|
|
$
|
466
|
|
|
Current portion of long-term debt
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
Accounts payable to affiliates
|
|
479
|
|
|
|
395
|
|
|
|
—
|
|
|
|
(874
|
)
|
|
|
—
|
|
|
Note, advance and interest payable to subsidiaries
|
|
373
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(373
|
)
|
|
|
—
|
|
|
Notes and interest payable to affiliate
|
|
—
|
|
|
|
—
|
|
|
|
54
|
|
|
|
(54
|
)
|
|
|
—
|
|
|
Total current liabilities
|
|
857
|
|
|
|
618
|
|
|
|
293
|
|
|
|
(1,301
|
)
|
|
|
467
|
|
|
Long-term debt, net of current portion
|
|
590
|
|
|
|
171
|
|
|
|
—
|
|
|
|
—
|
|
|
|
761
|
|
|
Note payable to subsidiary
|
|
443
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(443
|
)
|
|
|
—
|
|
|
Note payable to affiliate
|
|
—
|
|
|
|
—
|
|
|
|
109
|
|
|
|
(109
|
)
|
|
|
—
|
|
|
Pension and other postretirement benefit obligations
|
|
—
|
|
|
|
397
|
|
|
|
884
|
|
|
|
—
|
|
|
|
1,281
|
|
|
Deferred income tax liabilities
|
|
—
|
|
|
|
1
|
|
|
|
1
|
|
|
|
—
|
|
|
|
2
|
|
|
Other liabilities
|
|
—
|
|
|
|
24
|
|
|
|
31
|
|
|
|
—
|
|
|
|
55
|
|
|
Total liabilities
|
|
1,890
|
|
|
|
1,211
|
|
|
|
1,318
|
|
|
|
(1,853
|
)
|
|
|
2,566
|
|
|
Total equity
|
|
2,028
|
|
|
|
3,765
|
|
|
|
1,913
|
|
|
|
(5,995
|
)
|
|
|
1,711
|
|
|
Total liabilities and equity
|
$
|
3,918
|
|
|
$
|
4,976
|
|
|
$
|
3,231
|
|
|
$
|
(7,848
|
)
|
|
$
|
4,277
|
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||||||
For the Year Ended December 31, 2017
|
||||||||||||||||||||
(In millions)
|
Parent
|
Guarantor
Subsidiaries |
Non-guarantor
Subsidiaries |
Consolidating
Adjustments |
Consolidated
|
|||||||||||||||
Net cash provided by operating activities
|
$
|
—
|
|
|
$
|
125
|
|
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
158
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash invested in fixed assets
|
|
—
|
|
|
|
(116
|
)
|
|
|
(48
|
)
|
|
|
—
|
|
|
|
(164
|
)
|
|
Disposition of assets
|
|
—
|
|
|
|
—
|
|
|
|
21
|
|
|
|
—
|
|
|
|
21
|
|
|
Increase in countervailing duty cash deposits on supercalendered paper
|
|
—
|
|
|
|
(22
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(22
|
)
|
|
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber
|
|
—
|
|
|
|
(26
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(26
|
)
|
|
Increase in restricted cash, net
|
|
—
|
|
|
|
—
|
|
|
|
(3
|
)
|
|
|
—
|
|
|
|
(3
|
)
|
|
Decrease in deposit requirements for letters of credit, net
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
|
—
|
|
|
|
2
|
|
|
Decrease in notes receivable from affiliate, net
|
|
—
|
|
|
|
22
|
|
|
|
—
|
|
|
|
(22
|
)
|
|
|
—
|
|
|
Net cash used in investing activities
|
|
—
|
|
|
|
(142
|
)
|
|
|
(28
|
)
|
|
|
(22
|
)
|
|
|
(192
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net borrowings under revolving credit facilities
|
|
—
|
|
|
|
19
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19
|
|
|
Acquisition of noncontrolling interest in Donohue Malbaie Inc.
|
|
—
|
|
|
|
—
|
|
|
|
(15
|
)
|
|
|
—
|
|
|
|
(15
|
)
|
|
Issuance of long-term debt
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Payments of debt
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
Payments of financing and credit facility fees
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Decrease in notes payable to affiliate, net
|
|
—
|
|
|
|
—
|
|
|
|
(22
|
)
|
|
|
22
|
|
|
|
—
|
|
|
Net cash provided by (used in) financing activities
|
|
—
|
|
|
|
18
|
|
|
|
(37
|
)
|
|
|
22
|
|
|
|
3
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
|
—
|
|
|
|
2
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
—
|
|
|
|
1
|
|
|
|
(30
|
)
|
|
|
—
|
|
|
|
(29
|
)
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Beginning of year
|
|
—
|
|
|
|
2
|
|
|
|
33
|
|
|
|
—
|
|
|
|
35
|
|
|
End of year
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||||||
For the Year Ended December 31, 2016
|
||||||||||||||||||||
(In millions)
|
Parent
|
Guarantor
Subsidiaries |
Non-guarantor
Subsidiaries |
Consolidating
Adjustments |
Consolidated
|
|||||||||||||||
Net cash provided by operating activities
|
$
|
—
|
|
|
$
|
30
|
|
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
81
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash invested in fixed assets
|
|
—
|
|
|
|
(179
|
)
|
|
|
(70
|
)
|
|
|
—
|
|
|
|
(249
|
)
|
|
Acquisition of a sawmill in Senneterre
|
|
—
|
|
|
|
—
|
|
|
|
(6
|
)
|
|
|
—
|
|
|
|
(6
|
)
|
|
Disposition of assets
|
|
—
|
|
|
|
—
|
|
|
|
5
|
|
|
|
—
|
|
|
|
5
|
|
|
Increase in countervailing duty cash deposits on supercalendered paper
|
|
—
|
|
|
|
(23
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(23
|
)
|
|
Increase in notes receivable from affiliate
|
|
—
|
|
|
|
(8
|
)
|
|
|
—
|
|
|
|
8
|
|
|
|
—
|
|
|
Net cash used in investing activities
|
|
—
|
|
|
|
(210
|
)
|
|
|
(71
|
)
|
|
|
8
|
|
|
|
(273
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net borrowings under revolving credit facilities
|
|
—
|
|
|
|
125
|
|
|
|
—
|
|
|
|
—
|
|
|
|
125
|
|
|
Issuance of long-term debt
|
|
—
|
|
|
|
46
|
|
|
|
—
|
|
|
|
—
|
|
|
|
46
|
|
|
Payments of debt
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
Payments of financing and credit facility fees
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
Increase in notes payable to affiliate
|
|
—
|
|
|
|
—
|
|
|
|
8
|
|
|
|
(8
|
)
|
|
|
—
|
|
|
Net cash provided by financing activities
|
|
—
|
|
|
|
169
|
|
|
|
8
|
|
|
|
(8
|
)
|
|
|
169
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net decrease in cash and cash equivalents
|
|
—
|
|
|
|
(11
|
)
|
|
|
(12
|
)
|
|
|
—
|
|
|
|
(23
|
)
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Beginning of year
|
|
—
|
|
|
|
13
|
|
|
|
45
|
|
|
|
—
|
|
|
|
58
|
|
|
End of year
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
35
|
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||||||
For the Year Ended December 31, 2015
|
||||||||||||||||||||
(In millions)
|
Parent
|
Guarantor
Subsidiaries |
Non-guarantor
Subsidiaries |
Consolidating
Adjustments |
Consolidated
|
|||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
—
|
|
|
$
|
151
|
|
|
$
|
(13
|
)
|
|
$
|
—
|
|
|
$
|
138
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash invested in fixed assets
|
|
—
|
|
|
|
(101
|
)
|
|
|
(84
|
)
|
|
|
—
|
|
|
|
(185
|
)
|
|
Acquisition of Atlas Tissue, including cash overdraft acquired
|
|
—
|
|
|
|
(159
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(159
|
)
|
|
Increase in countervailing duty cash deposits on supercalendered paper
|
|
—
|
|
|
|
(4
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(4
|
)
|
|
Increase in deposit requirements for letters of credit, net
|
|
—
|
|
|
|
—
|
|
|
|
(4
|
)
|
|
|
—
|
|
|
|
(4
|
)
|
|
Investment in common stock of subsidiary
|
|
—
|
|
|
|
(234
|
)
|
|
|
—
|
|
|
|
234
|
|
|
|
—
|
|
|
Advance to parent
|
|
—
|
|
|
|
(59
|
)
|
|
|
—
|
|
|
|
59
|
|
|
|
—
|
|
|
Decrease of notes receivable from affiliates
|
|
—
|
|
|
|
164
|
|
|
|
—
|
|
|
|
(164
|
)
|
|
|
—
|
|
|
Net cash used in investing activities
|
|
—
|
|
|
|
(393
|
)
|
|
|
(88
|
)
|
|
|
129
|
|
|
|
(352
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Payments of financing and credit facility fees
|
|
—
|
|
|
|
(2
|
)
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
(3
|
)
|
|
Purchases of treasury stock
|
|
(59
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(59
|
)
|
|
Issuance of common stock
|
|
—
|
|
|
|
—
|
|
|
|
234
|
|
|
|
(234
|
)
|
|
|
—
|
|
|
Advance to subsidiary
|
|
59
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(59
|
)
|
|
|
—
|
|
|
Decrease in notes payable to affiliate
|
|
—
|
|
|
|
—
|
|
|
|
(164
|
)
|
|
|
164
|
|
|
|
—
|
|
|
Net cash (used in) provided by financing activities
|
|
—
|
|
|
|
(2
|
)
|
|
|
69
|
|
|
|
(129
|
)
|
|
|
(62
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
|
—
|
|
|
|
(3
|
)
|
|
|
—
|
|
|
|
(3
|
)
|
|
Net decrease in cash and cash equivalents
|
|
—
|
|
|
|
(244
|
)
|
|
|
(35
|
)
|
|
|
—
|
|
|
|
(279
|
)
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Beginning of year
|
|
—
|
|
|
|
257
|
|
|
|
80
|
|
|
|
—
|
|
|
|
337
|
|
|
End of year
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
58
|
|
|
Year ended December 31, 2017
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
Year
|
|||||||||||||||
(In millions, except per share amounts)
|
||||||||||||||||||||
Sales
|
$
|
872
|
|
|
$
|
858
|
|
|
$
|
885
|
|
|
$
|
898
|
|
|
$
|
3,513
|
|
|
Operating (loss) income
|
|
(6
|
)
|
|
|
(47
|
)
|
|
|
48
|
|
|
|
54
|
|
|
|
49
|
|
|
Net (loss) income attributable to Resolute Forest Products Inc.
|
|
(47
|
)
|
|
|
(74
|
)
|
|
|
24
|
|
|
|
13
|
|
|
|
(84
|
)
|
|
Basic net (loss) income per share attributable to Resolute Forest Products Inc. common shareholders
|
|
(0.52
|
)
|
|
|
(0.82
|
)
|
|
|
0.27
|
|
|
|
0.14
|
|
|
|
(0.93
|
)
|
|
Diluted net (loss) income per share attributable to Resolute Forest Products Inc. common shareholders
|
|
(0.52
|
)
|
|
|
(0.82
|
)
|
|
|
0.26
|
|
|
|
0.14
|
|
|
|
(0.93
|
)
|
|
Year ended December 31, 2016
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
Year
|
|||||||||||||||
(In millions, except per share amounts)
|
||||||||||||||||||||
Sales
|
$
|
877
|
|
|
$
|
891
|
|
|
$
|
888
|
|
|
$
|
889
|
|
|
$
|
3,545
|
|
|
Operating (loss) income
|
|
—
|
|
|
|
(18
|
)
|
|
|
10
|
|
|
|
(18
|
)
|
|
|
(26
|
)
|
|
Net (loss) income attributable to Resolute Forest Products Inc.
|
|
(8
|
)
|
|
|
(42
|
)
|
|
|
14
|
|
|
|
(45
|
)
|
|
|
(81
|
)
|
|
Basic net (loss) income per share attributable to Resolute Forest Products Inc. common shareholders
|
|
(0.09
|
)
|
|
|
(0.47
|
)
|
|
|
0.16
|
|
|
|
(0.50
|
)
|
|
|
(0.90
|
)
|
|
Diluted net (loss) income per share attributable to Resolute Forest Products Inc. common shareholders
|
|
(0.09
|
)
|
|
|
(0.47
|
)
|
|
|
0.15
|
|
|
|
(0.50
|
)
|
|
|
(0.90
|
)
|
|
•
|
On August 9, 2017, a countervailing and anti-dumping duty petition was filed with Commerce and the ITC by a U.S. UGW paper producer requesting that the U.S. government impose countervailing and anti-dumping duties on Canadian-origin UGW paper exported to the U.S. One of our subsidiaries was identified in the petition as being a Canadian exporting producer of UGW paper to the U.S. and was selected as a mandatory respondent to be investigated by Commerce in both the countervailing and anti-dumping duty investigations. On January 9, 2018, Commerce announced its preliminary determinations in its countervailing duty investigation on Canadian-origin UGW paper exported to the U.S. As a result, since January 16, 2018, we have been required to pay cash deposits to the U.S. at a rate of
4.42%
for estimated countervailing duties on our U.S. imports of the UGW paper produced at our Canadian mills, with the exception of SC paper, which is subject to distinct countervailing duties, as further discussed in
Note 16, “Commitments and Contingencies
– Legal matters – Countervailing duty investigation on SC paper.” The rate and the requirement to pay cash deposits do not have retroactive effect. Commerce has not yet issued its preliminary determination in the anti-dumping investigation.
|
/s/ PricewaterhouseCoopers LLP / s.r.l / s.e.n.c.r.l.
(1)
|
Montreal, Canada
|
March 1, 2018
|
(1)
CPA auditor, CA, public accountancy permit No.A115888
|
—
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Resolute Forest Products Inc.;
|
|
|
—
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles;
|
|
|
—
|
provide reasonable assurance that receipts and expenditures of Resolute Forest Products Inc. are being made only in accordance with the authorizations of management and directors of Resolute Forest Products Inc.; and
|
|
|
—
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the consolidated financial statements.
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
(1)
|
The Incentive Plan was approved by the Courts in connection with the CCAA Creditor Protection Proceedings, and the creditor protection proceedings under Chapter 11 of the United States Bankruptcy Code, as amended, as applicable.
|
(2)
|
Includes shares issuable upon the exercise of
1,304,541
stock options and shares issuable upon the settlement of
2,266,110
RSUs and DSUs issued under the Incentive Plan, at a rate of one share per unit. Also includes shares issuable upon the settlement of
2,591,396
PSUs issued under the Incentive Plan at the maximum payout rate (
2,840,862
shares).
|
(3)
|
The weighted-average exercise price in column (b) represents the weighted-average exercise price of the outstanding stock options disclosed in column (a). The stock unit awards do not have an exercise price and are not included in the calculation of the weighted-average exercise price in column (b).
|
|
|
Page
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
Exhibit No.
|
Description
|
†10.3*
|
|
|
|
†10.4*
|
|
|
|
†10.5*
|
|
|
|
†10.6*
|
|
|
|
†10.7*
|
|
|
|
†10.8*
|
|
|
|
†10.9*
|
|
|
|
†10.10*
|
|
|
|
10.11*
|
|
|
|
10.12*
|
|
|
|
†10.13*
|
|
|
|
†10.14*
|
|
|
|
†10.15*
|
|
|
|
†10.16*
|
|
|
|
†10.17*
|
|
|
|
†10.18*
|
|
|
|
Exhibit No.
|
Description
|
†10.19*
|
|
|
|
†10.20*
|
|
|
|
†10.21*
|
|
|
|
†10.22*
|
|
|
|
†10.23*
|
|
|
|
†10.24*
|
|
|
|
†10.25*
|
|
|
|
†10.26*
|
|
|
|
†10.27*
|
|
|
|
10.28*
|
|
|
|
†10.29*
|
|
|
|
10.30*
|
|
|
|
†10.31*
|
|
|
|
†10.32*
|
|
|
|
†10.33*
|
|
|
|
Exhibit No.
|
Description
|
†10.34*
|
|
|
|
†10.35*
|
|
|
|
†10.36*
|
|
|
|
†10.37*
|
|
|
|
†10.38*
|
|
|
|
†10.39*
|
|
|
|
†10.40*
|
|
|
|
†10.41*
|
|
|
|
†10.42*
|
|
|
|
†10.43*
|
|
|
|
†10.44*
|
|
|
|
†10.45*
|
|
|
|
†10.46*
|
|
|
|
†10.47*
|
|
|
|
†10.48*
|
|
|
|
†10.49**
|
|
|
|
†10.50**
|
|
|
|
Exhibit No.
|
Description
|
†10.51**
|
|
|
|
†10.52**
|
|
|
|
†10.53**
|
|
|
|
†10.54**
|
|
|
|
21.1**
|
|
|
|
23.1**
|
|
|
|
24.1**
|
|
|
|
31.1**
|
|
|
|
31.2**
|
|
|
|
32.1**
|
|
|
|
32.2**
|
|
|
|
101.INS***
|
XBRL Instance Document.
|
|
|
101.SCH***
|
XBRL Taxonomy Extension Schema Document.
|
|
|
101.CAL***
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
101.LAB***
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
101.PRE***
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
101.DEF***
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
*
|
Previously filed and incorporated herein by reference.
|
|
|
†
|
This is a management contract or compensatory plan or arrangement.
|
|
|
**
|
Filed with this Form 10-K.
|
|
|
***
|
Interactive data files furnished with this Form 10-K, which represent the following materials from this Form 10-K formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Loss, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statement of Changes in Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements.
|
|
|
(b)
|
The above-referenced exhibits are being filed with this Form 10-K.
|
|
|
(c)
|
None.
|
|
RESOLUTE FOREST PRODUCTS INC.
|
|
|
|
|
Date: March 1, 2018
|
By:
|
/s/ Yves Laflamme
|
|
|
Yves Laflamme
|
|
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Yves Laflamme
|
|
President and Chief Executive Officer
|
|
March 1, 2018
|
Yves Laflamme
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Bradley P. Martin*
|
|
Chairman, Director
|
|
March 1, 2018
|
Bradley P. Martin
|
|
|
|
|
|
|
|
|
|
/s/ Jo-Ann Longworth
|
|
Senior Vice President and Chief Financial Officer
|
|
March 1, 2018
|
Jo-Ann Longworth
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Hugues Dorban
|
|
Vice President and Chief Accounting Officer
|
|
March 1, 2018
|
Hugues Dorban
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Randall C. Benson*
|
|
Director
|
|
March 1, 2018
|
Randall C. Benson
|
|
|
|
|
|
|
|
|
|
/s/ Jennifer C. Dolan*
|
|
Director
|
|
March 1, 2018
|
Jennifer C. Dolan
|
|
|
|
|
|
|
|
|
|
/s/ Richard D. Falconer*
|
|
Director
|
|
March 1, 2018
|
Richard D. Falconer
|
|
|
|
|
|
|
|
|
|
/s/ Jeffrey A. Hearn*
|
|
Director
|
|
March 1, 2018
|
Jeffrey A. Hearn
|
|
|
|
|
|
|
|
|
|
/s/ Alain Rhéaume*
|
|
Director
|
|
March 1, 2018
|
Alain Rhéaume
|
|
|
|
|
|
|
|
|
|
/s/ Michael S. Rousseau*
|
|
Director
|
|
March 1, 2018
|
Michael S. Rousseau
|
|
|
|
|
|
By:
|
/s/ Jo-Ann Longworth
|
|
|
Jo-Ann Longworth, Attorney-in-Fact
|
1.1
|
Defined Terms
|
1.2
|
Rules of Construction
|
(a)
|
the terms “Agreement”, “this Agreement”, “the Agreement”, “hereto”, “hereof”, “herein”, “hereby”, “hereunder” and similar expressions refer to this Agreement in its entirety and not to any particular provision hereof;
|
(b)
|
references to an “Article”, “Section”, “Schedule” or “Exhibit” followed by a number or letter refer to the specified Article or Section of or Schedule or Exhibit to this Agreement;
|
(c)
|
the division of this Agreement into articles and sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement;
|
(d)
|
words importing the singular number only shall include the plural and vice versa and words importing the use of any gender shall include all genders;
|
(e)
|
the word “including” is deemed to mean “including without limitation”;
|
(f)
|
the terms “party” and “the parties” refer to a party or the parties to this Agreement;
|
(g)
|
any reference to a statute, regulation or rule shall be construed to be a reference thereto as the same may from time to time be amended, re-enacted or replaced, and any reference to a statute shall include any regulations or rules made thereunder; and
|
(h)
|
all dollar amounts refer to United States dollars unless expressly provided to the contrary.
|
1.3
|
Severability
|
1.4
|
Prior Agreements
|
1.5
|
Related Plans, Policies and Agreements
|
2.1
|
Employment
|
2.2
|
Location of Executive
|
3.1
|
Employment Duties
|
(a)
|
devote his full time and attention during normal business hours and such other times as may be reasonably required to the business and affairs of the Corporation and its Affiliates and shall not, without the prior written consent of the Board, undertake any other business or occupation or public office which may detract from the proper and timely performance of his duties hereunder;
|
(b)
|
perform diligently and faithfully those duties as are consistent with the position and status of President and Chief Executive Officer that may be assigned to the Executive;
|
(c)
|
promote the interests and goodwill of the Corporation and its Affiliates and not knowingly do, or willingly permit to be done, anything to the prejudice, loss or injury of the Corporation or any of its Affiliates; and
|
(d)
|
at all times keep the Corporation regularly informed (in writing if so requested) of his conduct of the business and affairs of the Corporation and provide such explanations of his conduct as the Board may require.
|
3.2
|
Board Membership
|
3.3
|
Reporting
|
4.1
|
Annual Base Salary
|
4.2
|
Short-Term Incentive Plan
|
4.3
|
Long-Term Incentive Plan
|
4.4
|
Retirement
|
4.5
|
Fringe Benefits
|
4.6
|
Vacation
|
4.7
|
Expenses
|
4.8
|
Deductions and Withholdings
|
4.9
|
Compensation Exhaustive
|
5.1
|
Term of Employment
|
5.2
|
Cause
|
(a)
|
any material breach of any provisions of this Agreement by the Executive or the wilful failure of the Executive to carry out his duties hereunder, to comply in all material respects with the rules and policies of the Corporation or to follow any reasonable instruction or directive of the Board which is consistent with the Executive’s duties and responsibilities under this Agreement, provided that the
|
(b)
|
the Executive acting dishonestly or fraudulently in connection with the business of the Corporation, or the wilful gross misconduct of the Executive in the course of his employment hereunder, in each case resulting in adverse consequences to the Corporation or to any of its Affiliates;
|
(c)
|
if the Executive or his spouse or any child under the age of majority makes any personal profit arising out of or in connection with any transaction to which the Corporation or any of its Affiliates is a party or with which the Corporation or any of its Affiliates is associated without making disclosure to and obtaining the prior written consent of the Board, or other material breach of the Executive’s fiduciary duties to the Corporation;
|
(d)
|
the conviction of the Executive for, or a guilty plea by the Executive to, any criminal offence punishable by imprisonment that may reasonably be considered to be likely to adversely affect the Corporation or any of its Affiliates or their reputation, or the suitability of the Executive to perform his duties hereunder, including without limitation any offence involving fraud, theft, embezzlement, forgery, wilful misappropriation of funds or property, or other fraudulent or dishonest acts;
|
(e)
|
misconduct on the part of the Executive that is materially detrimental to the reputation or the business or financial position of the Corporation or to any of its Affiliates;
|
(f)
|
personal misconduct by the Executive which is of such a serious and substantial nature that is injurious to the reputation of the Corporation or of any of its Affiliates;
|
(g)
|
the habitual inability by the Executive to carry out functions of his employment hereunder due to alcohol or drug related causes, provided that the Executive shall have been provided with written notice thereof at least thirty (30) days prior to the Date of Termination and shall have failed to remedy such alcohol or drug related causes during such period of time; or
|
(h)
|
any serious reason pursuant to Article 2094 of the
Civil Code of Québec
.
|
5.3
|
Termination Where Executive Disabled
|
5.4
|
Death
|
5.5
|
Other Termination by the Corporation
|
5.6
|
Other Termination by the Executive
|
5.7
|
Cessation of Duties
|
5.8
|
Severance Payments
|
(a)
|
Upon termination of the Executive’s employment (i) for Cause pursuant to Section 5.2, or (ii) voluntarily by the Executive pursuant to Section 5.6, the Executive shall not be entitled to any pay in lieu of notice of termination, severance or similar payment in respect of such termination other than (A) accrued and unpaid Annual Base Salary earned by the Executive up to the Date of Termination and (B) vacation pay earned up to the Date of Termination and (C) in the event of early termination by the Corporation of the notice period in Section 5.6, the portion of the Annual Base Salary that would have otherwise been payable during such notice period, and (D) any amount of or entitlement to Incentive Awards, other awards, pension benefits and other benefits in accordance with any then applicable plans and agreements. In addition, any unvested stock option, SAR, full value award, including, without limitation, unrestricted stock, restricted stock or restricted stock units, performance stock or performance stock units, deferred stock or deferred stock units and the like in the Corporation held by the Executive under a long term incentive plan adopted by the Corporation from time to time shall vest and shall remain exercisable by the Executive subject to and with in accordance with the relevant plan and award agreements.
|
(b)
|
Upon termination of the Executive’s employment (i) as a result of the Permanent Disability of the Executive pursuant to Section 5.3, or (ii) by the death of the Executive pursuant to Section 5.4, the Executive (or his estate, as the case may be) shall be entitled to receive (A) accrued and unpaid Annual Base Salary earned by the Executive up to the Date of Termination, (B) vacation pay earned up to the Date of Termination and (C) any amount or entitlement to Incentive Awards, other awards, pension benefits and other benefits in accordance with any then applicable plans and agreements. In addition, any unvested stock option, SAR, full value award, including, without limitation, unrestricted stock, restricted stock or restricted stock units, performance stock or performance stock units, and deferred stock or deferred stock
|
(c)
|
If the Executive’s employment is terminated pursuant to Section 5.5, other than within two years following a Change in Control (in which case the Change in Control Agreement shall govern and the Executive shall not be entitled to any payment pursuant to this Agreement), the Executive shall be entitled to receive:
|
(i)
|
accrued and unpaid Annual Base Salary earned by the Executive up to the Date of Termination;
|
(ii)
|
vacation pay earned up to the Date of Termination;
|
(iii)
|
severance pay in an amount equal to two (2) years of Eligible Pay; and
|
(iv)
|
any amount or entitlement to Incentive Awards, other awards, pension benefits and other benefits in accordance with the relevant plans and agreements.
|
5.9
|
Resignation on Termination
|
5.10
|
Continuance in Effect
|
6.1
|
Non-Disclosure
|
(a)
|
in the course of performing his duties and responsibilities hereunder, he will have access to and will be entrusted with detailed confidential information and trade secrets concerning past, present, future and contemplated company strategy, plans and activities (including acquisition plans and activities), products, services, operations, technology, intellectual property, methodologies and procedures of the Corporation or its Affiliates, whether in written, printed, pictorial, diagrammatic, electronic or any other form or medium, including, without limitation, information relating to names, addresses, contact persons, preferences, needs and requirements of past, present and prospective clients, customers, suppliers and employees of the Corporation and its Affiliates (collectively, “
Confidential Information
”), the disclosure of any of which to competitors of the Corporation or of any of its Affiliates or to the general public, or the use of any of which by the Executive or any competitor of the Corporation or of any of its Affiliates, could reasonably be expected to be detrimental to the interests of the Corporation and its Affiliates;
|
(b)
|
in the course of performing his duties and responsibilities hereunder, the Executive will be a representative of the Corporation and its Affiliates to its and their customers, clients and suppliers and as such will have significant responsibility for maintaining and enhancing the goodwill of the Corporation and its Affiliates with such customers, clients and suppliers and would not have, except by virtue of his employment with the Corporation, developed a close and direct relationship with the customers, clients and suppliers of the Corporation and its Affiliates; and
|
(c)
|
the right to maintain the confidentiality of the Confidential Information, the right to preserve the goodwill of the Corporation and its Affiliates and the right to the benefit
|
6.2
|
Intellectual Property
|
6.3
|
Non-Competition
|
6.4
|
Non-Solicitation of Customers
|
6.5
|
Non-Solicitation of Employees
|
6.6
|
Non-interference with Suppliers
|
6.7
|
Applicability to Affiliates or Purchasers
|
6.8
|
Provisions in the Event of Breach
|
6.9
|
Disclosure
|
6.10
|
Merger Transactions
|
6.11
|
Consulting Services after Date of Termination
|
6.12
|
Return of Materials
|
7.1
|
Reasonableness of Restrictions and Covenants
|
7.2
|
Amendments and Waivers
|
7.3
|
Successors and Assigns
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7.4
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Notices
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(i)
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If to the Executive:
1340 De Rouen Boucherville, Québec J4B 8C3 |
(ii)
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If to the Corporation:
Resolute Forest Product Inc. 111 Duke Street Suite 5000 Montréal, Québec H3C 2M1 |
7.5
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Entire Agreement
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7.6
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Rules and Policies
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7.7
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Governing Law
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7.8
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Ack
n
owledgements
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(a)
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the Executive has had sufficient time to review and consider this Agreement thoroughly;
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(b)
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the Executive has read and understands the terms of this Agreement and the Executive’s obligations hereunder;
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(c)
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the Executive has been given an opportunity to obtain independent legal advice, or such other advice as the Executive may desire, concerning the interpretation and effect of this Agreement; and
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(d)
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this Agreement is entered into voluntarily and without any pressure.
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7.9
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Counterparts
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7.10
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Language
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RESOLUTE FOREST PRODUCTS INC.
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Per: Michael Rousseau
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Chair of the Human Resources and Compensation/Nominating and Governance Committee
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YVES LAFLAMME
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(a)
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“Base Amount” shall mean the Executive’s Annual Base Salary at the rate in effect on the Termination Date.
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(b)
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“Beneficial Owner” of securities shall mean (i) a Person who beneficially owns such securities, directly or indirectly, or (ii) a Person who has the right to acquire such securities (whether such right is exercisable immediately or only with the passage
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(c)
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“Change in Control” means any of the following:
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(i)
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the acquisition, directly or indirectly and by any means whatsoever, by any person, or by a group of persons acting jointly or in concert, of that number of Voting Shares which is equal to or greater than 50% of the total issued and outstanding Voting Shares immediately after such acquisition;
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(ii)
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the election or appointment by any holder of Voting Shares, or by any group of holders of Voting Shares acting jointly or in concert, of a number of members of the Board of Directors of the Corporation equal to or greater than one-half (50%) of the members of the Board of Directors;
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(iii)
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any transaction or series of transactions, whether by way of reconstruction, reorganization, consolidation, amalgamation, arrangement, merger, transfer, sale or otherwise, whereby assets of the Corporation become the property of any other person (other than a subsidiary of the Corporation) if such assets which become the property of any other person have a fair market value (net of the fair market value of any then existing liabilities of the Corporation assumed by such other person as part of the same transaction) equal to 50% or more of the Market Capitalization of the Corporation immediately before such transaction; or
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(iv)
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the completion of any transaction or the first of a series of transactions which would have the same or similar effect as any transaction or series of transactions referred to in paragraphs (i), (ii) and (iii) above.
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(d)
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“Disability” shall mean a physical or mental condition that is defined as a disability in the Corporation’s long term disability insurance plan covering the Executive immediately prior to the Change in Control.
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(e)
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“Employer Contributions” shall mean an amount equal to the maximum contributions the Corporation could have made (regardless of actual circumstances) on the Executive’s behalf under the registered defined contribution retirement plan for Canadian non-unionized employees and the DC Make-Up Program for the fiscal year in which the Executive’s Termination Date occurs.
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(f)
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“Good Reason” shall mean:
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(i)
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a material change in the Executive’s status, title, position or responsibilities (including in reporting line relationships) that represents a substantial adverse change from the Executive’s status, title, position or responsibilities as in effect immediately preceding the date of a Change in Control or at any time
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(ii)
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a material reduction in compensation and benefits, in the aggregate, (in terms of benefit levels and/or reward opportunities which opportunities will be evaluated in light of the performance requirements therefor) to those provided for under the employee compensation and benefit plans, programs and practices in which the Executive was participating immediately preceding the date of the Change in Control or at any time within twenty-four (24) months thereafter;
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(iii)
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a material reduction of the Executive’s Annual Base Salary as in effect immediately preceding the date of the Change in Control or any time within twenty-four (24) months thereafter;
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(iv)
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a failure by the Corporation to obtain from any Successor its assent to this Agreement contemplated by Section 10 hereof; or
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(v)
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a material change in the geographic location at which the Executive is to perform services on behalf of the Corporation from the location immediately prior to the Change in Control.
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(g)
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“Incentive Amount” shall mean an amount equal to the lesser of (i) the average of the last two Incentive Awards paid to the Executive prior to the Termination Date, or (ii) 125% of the Executive’s target incentive (expressed in dollars) for the year in which the Termination Date occurs.
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(h)
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“Market Capitalization of the Corporation” at any time means the product of (i) the number of outstanding Common Shares of the Corporation at that time, and (ii) the average of the closing prices for the Common Shares of the Corporation on the principal securities exchange (in terms of volume of trading) on which the Common Shares of the Corporation are listed at that time for each of the last 10 business days prior to such time on which the Common Shares of the Corporation traded on such securities exchange.
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(i)
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“Notice of Termination” shall mean a notice sent by either the Executive or the Corporation to the other party terminating the Executive’s employment as of a certain date and setting forth the reasons therefor.
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(j)
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“Successor” shall mean the direct or indirect successor by purchase, merger, consolidation or otherwise, to all or substantially all of the business and/or assets of the Corporation.
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(k)
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“Termination Date” shall mean (i) in the case of the Executive’s death, the date of death, (ii) in the case of a termination by the Executive in accordance with Section 3, the last day of employment as set forth in the Notice of Termination given by the Executive, (iii) in the case of a termination by the Corporation for Cause, a date not less than thirty (30) days after receipt of the Notice of Termination by the Executive, (iv) in the case of a termination by the Corporation due to the Executive’s Disability, the date not less than thirty (30) days after receipt of the Notice of Termination by the Executive, provided that the Executive shall not have returned to the full-time performance of duties within thirty (30) days after such receipt, and (v) in all other cases, the date specified in the Notice of Termination or if no Notice of Termination is sent, the last day of the Executive’s active employment (an Executive receiving periodic severance pay is no longer considered employed for the purposes of this Agreement).
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(a)
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A single lump sum, paid as soon as practicable, but in no event later than sixty (60) days after the Executive’s Termination Date, equal to the sum of the following less applicable withholding taxes:
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(i)
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an amount equal to the Base Amount multiplied by 2.5;
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(ii)
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an amount equal to the Incentive Amount multiplied by 2.5;
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(iii)
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an amount equal to the Employer Contributions multiplied by 2.5;
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(iv)
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a cash payment of $20,000 in lieu of individual outplacement services; and
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(b)
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As of the Executive’s Termination Date, the Executive (and the Executive’s spouse or surviving spouse and dependents) will be provided the maximum health care (including medical, prescription drug and dental) and the maximum life insurance coverage provided by the Corporation to other executives as of the date of the Change
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(a)
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The after-tax amount that would be retained by the Executive (after taking into account all required income taxes payable by the Executive and the amount of any excise taxes that would be payable by the Executive under Code Section 4999 (the “Excise Taxes”)) if the Executive were to receive the Total Payments, or
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(b)
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The after-tax amount that would be retained by the Executive (after taking into account all federal, state and local income taxes payable by the Executive) if the Executive were to receive the Total Payments reduced to the largest amount that would result in no portion of the Total Payments being subject to Excise Taxes (the “Reduced Payments”).
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RESOLUTE FOREST PRODUCTS INC.
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THE EXECUTIVE
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Per:
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Per:
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Michael Rousseau
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Yves Laflamme
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Chair of the Human Resources and Compensation/Nominating and Governance Committee
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All compensation values are in US $
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Board Service
Annual Cash Retainer
Board Meeting Fees
Annual Equity Grant
Chairman
Lead Director
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$75,000
$0
$75,000
$150,000 (additional)
$20,000 (additional)
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Audit Committee Service
Chair Retainer
Member Retainer
Meeting Fee
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$25,000
$0
$0
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Other Committee Service
Chair retainer
Member Retainer
Meeting Fee
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$15,000
$0
$0
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Total Direct Compensation Simulations
Typical Director
Typical Committee Chair
Typical Audit Committee Chair
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$150,000
$165,000
$175,000
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Stock Ownership Guidelines
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Level of Ownership
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3X Annual Cash Retainer
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Counted Shares
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Owned shares
Cash-settled and share-settled DSUs
Cash-settled and share-settled RSUs
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Timing of evaluation
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Whenever a director is considering selling shares
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Requirement to hold on to shares until and unless ownership target is met. This requirement applies whenever target is not met.
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Shares received further to the settlement of RSUs, except portion required to cover tax liability
Shares equivalent to 50% of gross gain realized on exercise of options
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With respect to cash-settled RSUs, requirement to purchase shares until and unless target is met. This requirement applies whenever target is not met.
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Directors must purchase shares with net proceeds of cash-settled RSUs
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Considered Value
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For each share, the greater of market price and book value
For each DSU and RSU, the greater of market price and grant value
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Name
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Jurisdiction of Incorporation
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3284649 Nova Scotia Company
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Nova Scotia
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9192-8515 Québec Inc.
(1)
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Québec
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9340939 Canada Inc.
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Canada
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9340963 Canada Inc.
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Canada
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AbiBow Recycling LLC
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Delaware
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Abitibi Consolidated Europe
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Belgium
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Abitibi Consolidated Sales LLC
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Delaware
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AbitibiBowater Canada Inc.
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Canada
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Accurate Paper Fleet, LLC
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Delaware
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Accurate Paper Holdings, LLC
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Delaware
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Atlas Paper Management, LLC
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Delaware
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Atlas Paper Mills, LLC
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Delaware
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Atlas Southeast Papers, Inc.
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Delaware
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Atlas Tissue Holdings, Inc.
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Delaware
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Augusta Newsprint Holding LLC
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Delaware
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Bowater Asia Pte. Ltd.
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Singapore
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Bowater Canada Finance Corporation
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Nova Scotia
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Bowater Canadian Holdings Incorporated
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Nova Scotia
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Bowater Canadian Limited
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Canada
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Bowater LaHave Corporation
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Nova Scotia
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Bowater Newsprint South LLC
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Delaware
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Bowater Nuway Mid-States Inc.
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Delaware
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Bowater S. America Ltda.
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Brazil
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Bowater South American Holdings Incorporated
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Delaware
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Bowater-Korea Ltd.
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South Korea
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Calhoun Newsprint Company
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Delaware
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Calhoun Note Holdings AT LLC
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Delaware
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Calhoun Note Holdings TI LLC
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Delaware
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Donohue Corp.
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Delaware
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Donohue Malbaie Inc.
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Québec
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FD Powerco LLC
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West Virginia
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Fibrek Canada L.P.
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Québec
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Fibrek Canada ULC
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Nova Scotia
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Fibrek General Partnership
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Québec
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Fibrek International Inc.
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Canada
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Fibrek Recycling U.S. Inc.
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Delaware
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Fibrek U.S. Inc.
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Delaware
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Forest Products Mauricie L.P.
(1)
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Québec
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GLPC Residual Management, LLC
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Delaware
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Lake Superior Forest Products Inc.
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Delaware
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Resolute FP Augusta LLC
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Delaware
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Resolute FP Canada Inc.
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Canada
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Resolute FP Florida Inc.
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Delaware
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Resolute FP US Inc.
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Delaware
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Resolute Growth Canada Inc.
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Canada
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Resolute Growth US LLC
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Delaware
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RFP Atlas Sales LLC
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Delaware
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RFPG Holding Inc.
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Canada
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RFPG L.P.
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Québec
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SFK Pulp Finco Inc.
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Canada
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The International Bridge and Terminal Company
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Canada/Special Act
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(1)
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93.2 percent owned.
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/s/ Bradley P. Martin
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/s/ Jeffrey A. Hearn
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Bradley P. Martin
Chairman of the Board |
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Jeffrey A. Hearn
Director |
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/s/ Randall C. Benson
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/s/ Alain Rhéaume
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Randall C. Benson
Director |
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Alain Rhéaume
Director |
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/s/ Jennifer C. Dolan
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/s/ Michael S. Rousseau
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Jennifer C. Dolan
Director |
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Michael S. Rousseau
Director |
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/s/ Richard D. Falconer
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Richard D. Falconer
Director |
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1.
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I have reviewed this annual report on Form 10-K for the year ended
December 31, 2017
of RESOLUTE FOREST PRODUCTS INC.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: March 1, 2018
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/s/ Yves Laflamme
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Yves Laflamme
President and Chief Executive Officer
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1.
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I have reviewed this annual report on Form 10-K for the year ended
December 31, 2017
of RESOLUTE FOREST PRODUCTS INC.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: March 1, 2018
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/s/ Jo-Ann Longworth
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Jo-Ann Longworth
Senior Vice President and Chief Financial Officer
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March 1, 2018
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/s/ Yves Laflamme
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Name: Yves Laflamme
Title: President and Chief Executive Officer
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March 1, 2018
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/s/ Jo-Ann Longworth
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Name: Jo-Ann Longworth
Title: Senior Vice President and Chief Financial Officer
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