|
|
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2018 |
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
|
Delaware
|
|
98-0526415
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. employer identification number)
|
111 Robert-Bourassa Boulevard, Suite 5000; Montréal, Quebec; Canada H3C 2M1
|
(Address of principal executive offices) (Zip Code)
|
(514) 875-2160
|
Common Stock, par value $0.001 per share
|
|
New York Stock Exchange
Toronto Stock Exchange
|
(Title of class)
|
|
(Name of exchange on which registered)
|
Large accelerated filer
|
¨
|
|
Accelerated filer
|
þ
|
|
Non-accelerated filer
|
¨
|
|
Smaller reporting company
|
¨
|
|
Emerging growth company
|
¨
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
|
|
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
|
|
|
|
|
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
|
|
|
|
|
|
Item 15.
|
||
Item 16.
|
|
|
|
|
|
|
Number of Machines
|
2019
|
2018
|
2018 Production By Product Line
|
|||||||||||||||
(In thousands of metric tons)
|
Total
Capacity
|
Total
Production
|
Market
Pulp
|
Tissue
|
Newsprint
|
Specialty
Papers
|
|||||||||||||
Canada
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Alma (Quebec)
|
3
|
360
|
|
|
344
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
337
|
|
|
Amos (Quebec)
|
1
|
194
|
|
|
188
|
|
|
—
|
|
|
—
|
|
|
183
|
|
|
5
|
|
|
Baie-Comeau (Quebec)
|
2
|
322
|
|
|
312
|
|
|
—
|
|
|
—
|
|
|
312
|
|
|
—
|
|
|
Clermont (Quebec)
|
1
|
225
|
|
|
222
|
|
|
—
|
|
|
—
|
|
|
222
|
|
|
—
|
|
|
Dolbeau (Quebec)
|
1
|
140
|
|
|
140
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
137
|
|
|
Gatineau (Quebec)
|
1
|
200
|
|
|
201
|
|
|
—
|
|
|
—
|
|
|
201
|
|
|
—
|
|
|
Kénogami (Quebec)
|
1
|
133
|
|
|
120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120
|
|
|
Saint-Félicien (Quebec)
|
1
|
348
|
|
|
303
|
|
|
303
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Thunder Bay (Ontario)
|
2
|
541
|
|
|
496
|
|
|
302
|
|
|
—
|
|
|
191
|
|
|
3
|
|
|
United States
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Augusta (Georgia)
|
1
|
214
|
|
|
196
|
|
|
—
|
|
|
—
|
|
|
196
|
|
|
—
|
|
|
Calhoun (Tennessee)
|
3
|
389
|
|
|
310
|
|
|
141
|
|
|
37
|
|
|
—
|
|
|
132
|
|
|
Coosa Pines (Alabama)
|
1
|
274
|
|
|
264
|
|
|
264
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Grenada (Mississippi)
|
1
|
230
|
|
|
217
|
|
|
—
|
|
|
—
|
|
|
217
|
|
|
—
|
|
|
Hialeah (Florida)
|
2
|
31
|
|
|
30
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
Menominee (Michigan)
|
1
|
178
|
|
|
147
|
|
|
147
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Sanford (Florida)
|
1
|
25
|
|
|
22
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
Usk (Washington)
(1)
|
1
|
226
|
|
|
226
|
|
|
—
|
|
|
—
|
|
|
226
|
|
|
—
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Sold facilities
(2)
|
|
|
|
642
|
|
|
348
|
|
|
—
|
|
|
—
|
|
|
294
|
|
|
|
|
24
|
4,030
|
|
|
4,380
|
|
|
1,505
|
|
|
89
|
|
|
1,758
|
|
|
1,028
|
|
|
(1)
|
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.
|
(2)
|
On November 1, 2018, and December 31, 2018, we sold our RBK pulp mill at Fairmont (West Virginia), and our Catawba (South Carolina) paper and pulp mill, respectively. For additional information, see
Note 4, “Net Gain on Disposition of Assets
,” to our consolidated financial statements and related notes (or “
Consolidated Financial Statements
”) appearing in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Form 10-K.
|
|
|
2019
|
|
2018
|
||||
(In million board feet)
|
|
Total Capacity
|
|
Total Production
|
||||
Atikokan (Ontario)
|
|
145
|
|
|
|
102
|
|
|
Comtois (Quebec)
|
|
145
|
|
|
|
95
|
|
|
Girardville (Quebec)
|
|
220
|
|
|
|
214
|
|
|
Ignace (Ontario)
|
|
115
|
|
|
|
85
|
|
|
La Doré (Quebec)
|
|
198
|
|
|
|
194
|
|
|
La Tuque (Quebec)
(1)
|
|
181
|
|
|
|
98
|
|
|
Maniwaki (Quebec)
|
|
204
|
|
|
|
110
|
|
|
Mistassini (Quebec)
|
|
205
|
|
|
|
205
|
|
|
Obedjiwan (Quebec)
(2)
|
|
65
|
|
|
|
51
|
|
|
Pointe-aux-Outardes (Quebec)
|
|
175
|
|
|
|
117
|
|
|
Saint-Félicien (Quebec)
|
|
174
|
|
|
|
136
|
|
|
Saint-Thomas (Quebec)
|
|
93
|
|
|
|
60
|
|
|
Senneterre (Quebec)
|
|
167
|
|
|
|
128
|
|
|
Thunder Bay (Ontario)
|
|
330
|
|
|
|
269
|
|
|
|
|
2,417
|
|
|
|
1,864
|
|
|
(1)
|
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.
|
(2)
|
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.
|
|
|
2019
|
|
2018
|
||||
(In million board feet, except where otherwise stated)
|
|
Total Capacity
|
|
Total Production
|
||||
Remanufactured Wood Products Facilities
|
|
|
|
|
|
|
||
Château-Richer (Quebec)
|
|
66
|
|
|
|
49
|
|
|
La Doré (Quebec)
|
|
16
|
|
|
|
13
|
|
|
Total Remanufactured Wood Products Facilities
|
|
82
|
|
|
|
62
|
|
|
Engineered Wood Products Facilities
|
|
|
|
|
|
|
||
Larouche and Saint-Prime (Quebec) (in million linear feet)
(1)
|
|
145
|
|
|
|
103
|
|
|
Wood Pellet Products Facility
|
|
|
|
|
|
|
||
Thunder Bay (Ontario) (in thousands of metric tons)
|
|
45
|
|
|
|
42
|
|
|
(1)
|
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 partner sells the products. The amounts in the above table represent the mills’ total capacity and production.
|
•
|
the use of timberlands;
|
•
|
forest management practices;
|
•
|
forest management and chain of custody certification standards;
|
•
|
consultation with First Nations groups;
|
•
|
the protection of habitats, and endangered or other species, including the woodland caribou;
|
•
|
the promotion of forest biodiversity; and
|
•
|
the response to and prevention of catastrophic wildfires.
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
(1)
|
In 2018, the Human Resources and Compensation/Nominating and Governance Committee of our Board of Directors established performance metrics related to our performance stock units including total shareholder return relative to a group of peer companies (or the “
Peer Group
”), which is comprised of Clearwater Paper Corporation, Domtar Corporation, Verso Corporation, Mercer International Incorporated, Rayonier Advanced Materials, Orchids Paper Products Company, Canfor Corporation, Conifex Timber Incorporated, Interfor Corporation, and West Fraser Timber Company Limited. The Peer Group replaces the index of five companies used previously (or the “
Prior Peer Group
”).
|
(2)
|
The Prior Peer Group is comprised of Domtar Corporation, International Paper Company, UPM-Kymmene Corporation, Verso Corporation and Weyerhaeuser Company.
|
|
Years Ended December 31,
|
||||||||||||||||||||||||
(In millions, except per share amounts)
|
|
2018
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|||||
Statement of Operations Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
|
$
|
3,756
|
|
|
|
$
|
3,513
|
|
|
|
$
|
3,545
|
|
|
|
$
|
3,645
|
|
|
|
$
|
4,258
|
|
|
Operating income (loss)
|
|
379
|
|
|
|
42
|
|
|
|
(18
|
)
|
|
|
(169
|
)
|
|
|
(193
|
)
|
|
|||||
Net income (loss) including noncontrolling interests
|
|
235
|
|
|
|
(78
|
)
|
|
|
(76
|
)
|
|
|
(255
|
)
|
|
|
(274
|
)
|
|
|||||
Net income (loss) attributable to Resolute Forest Products Inc.
|
|
235
|
|
|
|
(84
|
)
|
|
|
(81
|
)
|
|
|
(257
|
)
|
|
|
(277
|
)
|
|
|||||
Basic net income (loss) per share attributable to Resolute Forest Products Inc. common shareholders
|
|
2.57
|
|
|
|
(0.93
|
)
|
|
|
(0.90
|
)
|
|
|
(2.78
|
)
|
|
|
(2.93
|
)
|
|
|||||
Diluted net income (loss) per share attributable to Resolute Forest Products Inc. common shareholders
|
|
2.52
|
|
|
|
(0.93
|
)
|
|
|
(0.90
|
)
|
|
|
(2.78
|
)
|
|
|
(2.93
|
)
|
|
|||||
Dividend declared per common share
|
|
1.50
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|||||
Segment Sales Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Market pulp
|
|
$
|
1,085
|
|
|
|
$
|
911
|
|
|
|
$
|
836
|
|
|
|
$
|
889
|
|
|
|
$
|
974
|
|
|
Tissue
|
|
130
|
|
|
|
81
|
|
|
|
89
|
|
|
|
11
|
|
|
|
—
|
|
|
|||||
Wood products
|
|
823
|
|
|
|
797
|
|
|
|
596
|
|
|
|
536
|
|
|
|
610
|
|
|
|||||
Newsprint
|
|
907
|
|
|
|
842
|
|
|
|
1,009
|
|
|
|
1,105
|
|
|
|
1,402
|
|
|
|||||
Specialty papers
|
|
811
|
|
|
|
882
|
|
|
|
1,015
|
|
|
|
1,104
|
|
|
|
1,272
|
|
|
|||||
|
|
$
|
3,756
|
|
|
|
$
|
3,513
|
|
|
|
$
|
3,545
|
|
|
|
$
|
3,645
|
|
|
|
$
|
4,258
|
|
|
Statement of Cash Flows Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
|
$
|
435
|
|
|
|
$
|
158
|
|
|
|
$
|
81
|
|
|
|
$
|
138
|
|
|
|
$
|
186
|
|
|
Cash invested in fixed assets
|
|
155
|
|
|
|
164
|
|
|
|
249
|
|
|
|
185
|
|
|
|
193
|
|
|
|||||
Disposition of assets
|
|
336
|
|
|
|
21
|
|
|
|
5
|
|
|
|
—
|
|
|
|
10
|
|
|
|
As of December 31,
|
||||||||||||||||||||||||
(In millions, except otherwise indicated)
|
|
2018
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|||||
Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed assets, net
|
|
$
|
1,515
|
|
|
|
$
|
1,716
|
|
|
|
$
|
1,842
|
|
|
|
$
|
1,810
|
|
|
|
$
|
1,985
|
|
|
Total assets
|
|
3,935
|
|
|
|
4,147
|
|
|
|
4,227
|
|
|
|
4,220
|
|
|
|
4,914
|
|
|
|||||
Total debt
|
|
645
|
|
|
|
789
|
|
|
|
762
|
|
|
|
591
|
|
|
|
590
|
|
|
|||||
Additional Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of employees
|
|
7,400
|
|
|
|
7,700
|
|
|
|
8,300
|
|
|
|
8,000
|
|
|
|
7,700
|
|
|
•
|
large-scale, efficient and cost-effective operations;
|
•
|
access to renewable virgin fiber;
|
•
|
significant internal energy production from cogeneration and hydroelectric facilities;
|
•
|
raw materials for our paper, pulp and cogeneration facilities in Canada, our pellet plant at Thunder Bay (Ontario), as well as our value-added and engineered wood facilities in Quebec provided primarily by our sawmills;
|
•
|
strategically located mills, including economical access to international markets;
|
•
|
competitive selling, general and administrative expenses (or “
SG&A
”) to sales ratio;
|
•
|
ability to optimize staffing across our various operations; and
|
•
|
significant tax assets that help defer cash taxes and provide synergies in the execution of our growth and diversification strategy.
|
•
|
maintain a stringent focus on controlling costs and optimizing our diversified asset base;
|
•
|
manage production and inventory levels; and
|
•
|
focus production at our most profitable and lower-cost facilities and machines.
|
•
|
spending to improve productivity and/or lower costs;
|
•
|
investing selectively in organic expansions; and
|
•
|
pursuing opportunistic strategic acquisitions.
|
(1)
|
For a reconciliation of net income including noncontrolling interests to earnings before interest expense, income taxes, and depreciation and amortization, or “
EBITDA
,” and adjusted EBITDA, see “
Reconciliations
” below.
|
•
|
spend our capital in a disciplined, strategic and focused manner, concentrating on our most competitive sites;
|
•
|
explore value-creating opportunities to divest idled, non-core or sub-optimized operations;
|
•
|
maintain debt leverage and financial liquidity that over time are sufficient to support the evolution of our transformation strategy;
|
•
|
based on market conditions, seek to retire, repay or refinance our outstanding indebtedness with a view to reducing costs and enhancing our financial flexibility; and
|
•
|
return excess capital over time to our shareholders through dividends and share repurchases.
|
(1)
|
By acquiring Fibrek Inc., our market pulp capacity increased by over 70%.
|
(2)
|
The installed steam turbine at our Thunder Bay pulp and paper mill maximizes our local woodlands, sawmill, pulp and paper, and energy operations by fully utilizing forest-based biomass to produce green electricity.
|
(3)
|
With the acquisition of Atlas, we gained 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.
|
(4)
|
Incremental pulp capacity from the pulp digester serves in part to supply slush pulp to our Calhoun tissue machine.
|
•
|
improving resource efficiency, which helps control wood fiber, chemical, and energy 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 Resolute as a competitive employer; and
|
•
|
building solid relations in our operating communities.
|
•
|
Beating our safety target by achieving an Occupational Safety and Health Administration incident rate of 0.46 in 2018. Safety is our first priority, and we strive for zero injuries.
|
•
|
Achieving an 81% reduction in absolute greenhouse gas (or “
GHG
”) emissions (scope 1 and 2), below 2000 levels.
|
•
|
Joining forces with FPInnovations in a $15 million project to establish a biorefinery pilot plant hosted at our Thunder Bay pulp and paper mill. The initiative is focused on developing new ways to efficiently produce and commercialize innovative biochemicals derived from wood.
|
•
|
Implementing a $20 million project at our Thunder Bay mill to increase the facility’s energy efficiency and pulp capacity, as well as lower its GHG emissions. By mid-2019, the 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.
|
•
|
Completing the first phase of the $45 million strategic investment plan at our Saint-Félicien pulp mill to improve several areas of the operation, increase average daily production capacity, and reduce GHG emissions from the use of fossil fuels by 20%, or approximately 35,000 metric tons of CO
2
equivalents per year.
|
•
|
Partnering with CO
2
Solutions Inc. to deploy a carbon capture unit and ancillary equipment to improve growth rates at Toundra Greenhouse Inc. in Saint-Félicien, in which we hold a 49% interest.
|
•
|
Maintaining certification of 100% of Resolute-owned or managed woodlands to at least one internationally recognized forest management standard (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 internationally recognized chain of custody certifications at 100% of our facilities (SFI, FSC, and the Programme for the Endorsement of Forest Certification), with the exception of the tissue operation at our Calhoun facility, which is expected to have its fiber-tracking system in place in 2019.
|
•
|
Continuing to report climate change, water security, and forests disclosures to CDP. 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 U.S. Securities and Exchange Commission (or the “
SEC
”).
|
•
|
Continuing to implement our proactive approach to preventing environmental incidents, completing the third year of the second three-year cycle of environmental risk audits at all of our pulp, paper and tissue mills. We recorded 17 environmental incidents (class 1 and 2) in 2018, an 11% improvement compared to 2017.
|
•
|
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 addition to developing information resources such as
BorealForestFacts.com
and The Resolute Blog, we expanded the scope of our social media presence. We also reinforced our 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 in the boreal forest and they help to ensure that individual and community voices are heard, particularly when it comes to the importance of forestry to Northern communities in Canada. The information contained on or connected to
BorealForestFacts.com,
The Resolute Blog, and the Forum boréal and Boreal Forum
|
•
|
Other sustainability performance indicators and disclosures prepared in accordance with the Global Reporting Initiative guidelines are available on our website (www.resolutefp.com).
|
•
|
the International Business Awards (known as the “Stevies
®
”), in the Best Health, Safety and Environment Program of the Year for the U.S. and Canada category, for the second consecutive year (August 9, 2018);
|
•
|
the Best in Biz Awards, in the Most Environmentally Responsible Company of the Year category, for the second consecutive year (November 28, 2018);
|
•
|
the Business Intelligence Group Sustainability Leadership Award, in the Organization category (July 17, 2018); and
|
•
|
the American Forest and Paper Association Sustainability Awards, in the Leadership in Sustainability category (November 8, 2018).
|
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 other postretirement benefit 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, 2018
|
Market Pulp
|
Tissue
|
Wood Products
|
Newsprint
|
Specialty Papers
|
Segment Total
|
Corporate and Other
|
Total
|
||||||||||||||||||||||||
(Unaudited, in millions)
|
||||||||||||||||||||||||||||||||
Net income (loss) including noncontrolling interests
|
$
|
172
|
|
|
$
|
(30
|
)
|
|
$
|
169
|
|
|
$
|
74
|
|
|
$
|
40
|
|
|
$
|
425
|
|
|
$
|
(190
|
)
|
|
$
|
235
|
|
|
Interest expense
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
47
|
|
|
|
47
|
|
|
Income tax provision
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
152
|
|
|
|
152
|
|
|
Depreciation and amortization
|
|
27
|
|
|
|
15
|
|
|
|
32
|
|
|
|
66
|
|
|
|
47
|
|
|
|
187
|
|
|
|
25
|
|
|
|
212
|
|
|
EBITDA
|
$
|
199
|
|
|
$
|
(15
|
)
|
|
$
|
201
|
|
|
$
|
140
|
|
|
$
|
87
|
|
|
$
|
612
|
|
|
$
|
34
|
|
|
$
|
646
|
|
|
Foreign exchange loss
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
|
2
|
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
121
|
|
|
|
121
|
|
|
Reversal of inventory write-downs related to closures
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Start-up costs
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8
|
|
|
|
8
|
|
|
Net gain on disposition of assets
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(145
|
)
|
|
|
(145
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(50
|
)
|
|
|
(50
|
)
|
|
Other income, net
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(7
|
)
|
|
|
(7
|
)
|
|
Adjusted EBITDA
|
$
|
199
|
|
|
$
|
(15
|
)
|
|
$
|
201
|
|
|
$
|
140
|
|
|
$
|
87
|
|
|
$
|
612
|
|
|
$
|
(38
|
)
|
|
$
|
574
|
|
|
Year Ended December 31, 2018
|
Operating
Income (Loss) |
Net
Income (Loss) |
EPS
|
|
|
|||||||
(Unaudited, in millions, except per share amounts)
|
||||||||||||
GAAP, as reported
|
$
|
379
|
|
|
$
|
235
|
|
|
$
|
2.52
|
|
|
Adjustments for special items:
|
|
|
|
|
|
|
|
|
|
|||
Foreign exchange loss
|
|
—
|
|
|
|
2
|
|
|
|
0.02
|
|
|
Closure costs, impairment and other related charges
|
|
121
|
|
|
|
121
|
|
|
|
1.30
|
|
|
Reversal of inventory write-downs related to closures
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(0.01
|
)
|
|
Start-up costs
|
|
8
|
|
|
|
8
|
|
|
|
0.09
|
|
|
Net gain on disposition of assets
|
|
(145
|
)
|
|
|
(145
|
)
|
|
|
(1.55
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
(50
|
)
|
|
|
(0.54
|
)
|
|
Other income, net
|
|
—
|
|
|
|
(7
|
)
|
|
|
(0.08
|
)
|
|
Income tax effect of special items
|
|
—
|
|
|
|
20
|
|
|
|
0.21
|
|
|
Adjusted for special items
(1)
|
$
|
362
|
|
|
$
|
183
|
|
|
$
|
1.96
|
|
|
Year Ended December 31, 2017
|
Operating
Income (Loss) |
Net
Income (Loss) |
EPS
|
|
|
|||||||
(Unaudited, in millions, except per share amounts)
|
||||||||||||
GAAP, as reported
|
$
|
42
|
|
|
$
|
(84
|
)
|
|
$
|
(0.93
|
)
|
|
Adjustments for special items:
|
|
|
|
|
|
|
|
|
|
|||
Foreign exchange gain
|
|
—
|
|
|
|
(9
|
)
|
|
|
(0.10
|
)
|
|
Closure costs, impairment and other related charges
|
|
82
|
|
|
|
82
|
|
|
|
0.91
|
|
|
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 other postretirement benefit credits
|
|
—
|
|
|
|
(7
|
)
|
|
|
(0.08
|
)
|
|
Other expense, net
|
|
—
|
|
|
|
3
|
|
|
|
0.03
|
|
|
Income tax effect of special items
|
|
—
|
|
|
|
(9
|
)
|
|
|
(0.10
|
)
|
|
Adjusted for special items
(1)
|
$
|
160
|
|
|
$
|
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
|
Three Months Ended December 31, 2018
|
Operating
Income (Loss) |
Net
Income (Loss) |
EPS
|
|
|
|||||||
(Unaudited, in millions, except per share amounts)
|
||||||||||||
GAAP, as reported
|
$
|
75
|
|
|
$
|
36
|
|
|
$
|
0.38
|
|
|
Adjustments for special items:
|
|
|
|
|
|
|
|
|
|
|||
Closure costs, impairment and other related charges
|
|
120
|
|
|
|
120
|
|
|
|
1.27
|
|
|
Net gain on disposition of assets
|
|
(141
|
)
|
|
|
(141
|
)
|
|
|
(1.49
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
(12
|
)
|
|
|
(0.13
|
)
|
|
Other income, net
|
|
—
|
|
|
|
(1
|
)
|
|
|
(0.01
|
)
|
|
Income tax effect of special items
|
|
—
|
|
|
|
2
|
|
|
|
0.02
|
|
|
Adjusted for special items
(1)
|
$
|
54
|
|
|
$
|
4
|
|
|
$
|
0.04
|
|
|
Three Months Ended December 31, 2017
|
Operating
Income (Loss) |
Net
Income (Loss) |
EPS
|
|
|
|||||||
(Unaudited, in millions, except per share amounts)
|
||||||||||||
GAAP, as reported
|
$
|
53
|
|
|
$
|
13
|
|
|
$
|
0.14
|
|
|
Adjustments for special items:
|
|
|
|
|
|
|
|
|
|
|||
Foreign exchange loss
|
|
—
|
|
|
|
1
|
|
|
|
0.01
|
|
|
Closure costs, impairment and other related charges
|
|
2
|
|
|
|
2
|
|
|
|
0.02
|
|
|
Start-up costs
|
|
9
|
|
|
|
9
|
|
|
|
0.10
|
|
|
Net gain on disposition of assets
|
|
(13
|
)
|
|
|
(13
|
)
|
|
|
(0.14
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
(1
|
)
|
|
|
(0.01
|
)
|
|
Other expense, net
|
|
—
|
|
|
|
4
|
|
|
|
0.04
|
|
|
Income tax effect of special items
|
|
—
|
|
|
|
(1
|
)
|
|
|
(0.01
|
)
|
|
Adjusted for special items
(1)
|
$
|
51
|
|
|
$
|
14
|
|
|
$
|
0.15
|
|
|
(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 –
2018
Overview
” above.
|
|
Years Ended December 31,
|
|||||||||||
(In millions, except per share amounts)
|
2018
|
2017
|
2016
|
|||||||||
Sales
|
$
|
3,756
|
|
|
$
|
3,513
|
|
|
$
|
3,545
|
|
|
Operating income (loss) per segment:
|
|
|
|
|
|
|
|
|
|
|||
Market pulp
|
|
172
|
|
|
|
79
|
|
|
|
37
|
|
|
Tissue
|
|
(30
|
)
|
|
|
(6
|
)
|
|
|
(10
|
)
|
|
Wood products
|
|
169
|
|
|
|
186
|
|
|
|
69
|
|
|
Newsprint
|
|
74
|
|
|
|
(23
|
)
|
|
|
(16
|
)
|
|
Specialty papers
|
|
40
|
|
|
|
(9
|
)
|
|
|
19
|
|
|
Segment total
|
|
425
|
|
|
|
227
|
|
|
|
99
|
|
|
Corporate and other
|
|
(46
|
)
|
|
|
(185
|
)
|
|
|
(117
|
)
|
|
Operating inco
me (loss)
|
|
379
|
|
|
|
42
|
|
|
|
(18
|
)
|
|
Net income (loss) attributable to Resolute Forest Products Inc.
|
|
235
|
|
|
|
(84
|
)
|
|
|
(81
|
)
|
|
Net income (loss) per share attributable to Resolute Forest Products Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
2.57
|
|
|
$
|
(0.93
|
)
|
|
$
|
(0.90
|
)
|
|
Diluted
|
|
2.52
|
|
|
|
(0.93
|
)
|
|
|
(0.90
|
)
|
|
Adjusted EBITDA
(1)
|
$
|
574
|
|
|
$
|
364
|
|
|
$
|
263
|
|
|
|
As of December 31,
|
|||||||
(In millions)
|
2018
|
2017
|
||||||
Cash and cash equivalents
|
$
|
304
|
|
|
$
|
6
|
|
|
Total assets
|
|
3,935
|
|
|
|
4,147
|
|
|
(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)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Net income (loss) including noncontrolling interests
|
$
|
235
|
|
|
$
|
(78
|
)
|
|
$
|
(76
|
)
|
|
Interest expense
|
|
47
|
|
|
|
49
|
|
|
|
38
|
|
|
Income tax provision
|
|
152
|
|
|
|
84
|
|
|
|
19
|
|
|
Depreciation and amortization
|
|
212
|
|
|
|
204
|
|
|
|
206
|
|
|
EBITDA
|
$
|
646
|
|
|
$
|
259
|
|
|
$
|
187
|
|
|
Foreign exchange loss (gain)
|
|
2
|
|
|
|
(9
|
)
|
|
|
7
|
|
|
Closure costs, impairment and other related charges
|
|
121
|
|
|
|
82
|
|
|
|
62
|
|
|
(Reversal of) inventory write-downs related to closures
|
|
(1
|
)
|
|
|
24
|
|
|
|
7
|
|
|
Start-up costs
|
|
8
|
|
|
|
27
|
|
|
|
8
|
|
|
Net gain on disposition of assets
|
|
(145
|
)
|
|
|
(15
|
)
|
|
|
(2
|
)
|
|
Non-operating pension and other postretirement benefit (credits) costs
|
|
(50
|
)
|
|
|
(7
|
)
|
|
|
8
|
|
|
Other (income) expense, net
|
|
(7
|
)
|
|
|
3
|
|
|
|
(14
|
)
|
|
Adjusted EBITDA
|
$
|
574
|
|
|
$
|
364
|
|
|
$
|
263
|
|
|
•
|
an increase in maintenance costs ($41 million), largely due to more scheduled repairs and production disruptions;
|
•
|
higher energy and chemical costs ($31 million), mostly price-related;
|
•
|
higher market-driven wood fiber costs ($28 million);
|
•
|
higher labor expense ($25 million), partly due to higher short-term incentive plan expense related to the Company’s performance, and an increase in maintenance-related labor costs; and
|
•
|
a rise in recycled fiber prices ($22 million);
|
•
|
write-downs of mill stores and other supplies incurred in 2017 ($24 million), primarily as a result of the permanent closure of two paper machines at Calhoun at the end of the third quarter of 2017, a paper machine at Catawba (South Carolina) at the end of the second quarter of 2017, and the Mokpo (South Korea) paper mill in the first quarter of 2017; and
|
•
|
higher start-up costs incurred in 2017 ($15 million), related to the Calhoun tissue manufacturing and converting facility, as well as the restart of a paper machine in Alma (Quebec).
|
•
|
cost reduction initiatives;
|
•
|
lower share-based compensation, which resulted from a decrease in share price; and
|
•
|
lower project costs;
|
•
|
higher energy and chemical costs ($14 million), mainly due to higher prices;
|
•
|
an increase in maintenance costs ($12 million), in part due to the timing of scheduled outages;
|
•
|
a rise in recycled fiber prices ($9 million);
|
•
|
higher wood fiber costs ($8 million), mostly market-driven; and
|
•
|
an increase in labor expense ($7 million);
|
•
|
write-downs of mill stores and other supplies ($24 million), primarily as a result of the permanent closure of two paper machines at Calhoun, a paper machine at Catawba, and the Mokpo paper mill, compared to write-downs of mill stores and other supplies recorded in 2016 ($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 at Alma, compared to start-up costs incurred in 2016 ($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 our indefinitely idled Thorold paper mill; and
|
•
|
the recognition of tax credits in connection with infrastructure investments in 2016 ($4 million);
|
|
Years Ended December 31,
|
|||||||||||
(In millions, except where otherwise stated)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Sales
|
$
|
1,085
|
|
|
$
|
911
|
|
|
$
|
836
|
|
|
Operating income
(1)
|
|
172
|
|
|
|
79
|
|
|
|
37
|
|
|
EBITDA
(2)
|
|
199
|
|
|
|
110
|
|
|
|
74
|
|
|
(In thousands of metric tons)
|
|
|
|
|
|
|
|
|
|
|||
Shipments
|
|
1,424
|
|
|
|
1,425
|
|
|
|
1,388
|
|
|
Downtime
|
|
93
|
|
|
|
84
|
|
|
|
65
|
|
|
|
December 31,
|
|||||||||||
(In thousands of metric tons)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Finished goods inventory
|
|
80
|
|
|
|
89
|
|
|
|
91
|
|
|
(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)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Net income including noncontrolling interests
|
$
|
172
|
|
|
$
|
79
|
|
|
$
|
37
|
|
|
Depreciation and amortization
|
|
27
|
|
|
|
31
|
|
|
|
37
|
|
|
EBITDA
|
|
199
|
|
|
|
110
|
|
|
|
74
|
|
|
•
|
an increase in maintenance and labor costs ($23 million), largely associated with scheduled outages and production disruptions;
|
•
|
higher recycled fiber prices ($22 million);
|
•
|
higher steam costs ($9 million), mostly due to unfavorable steam usage; and
|
•
|
higher chemical costs ($6 million), mostly price-related.
|
•
|
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);
|
|
Years Ended December 31,
|
|||||||||||
(In millions, except where otherwise stated)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Sales
|
$
|
130
|
|
|
$
|
81
|
|
|
$
|
89
|
|
|
Operating loss
(1)
|
|
(30
|
)
|
|
|
(6
|
)
|
|
|
(10
|
)
|
|
EBITDA
(2)
|
|
(15
|
)
|
|
|
(1
|
)
|
|
|
(5
|
)
|
|
(In thousands of short tons)
|
|
|
|
|
|
|
|
|
|
|||
Shipments
(3)
|
|
84
|
|
|
|
53
|
|
|
|
54
|
|
|
Downtime
|
|
2
|
|
|
|
1
|
|
|
|
—
|
|
|
|
December 31,
|
|||||||||||
(In thousands of short tons)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Finished goods inventory
(3)
|
|
5
|
|
|
|
11
|
|
|
|
5
|
|
|
(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.
|
|
Years Ended December 31,
|
|||||||||||
(In millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Net loss including noncontrolling interests
|
$
|
(30
|
)
|
|
$
|
(6
|
)
|
|
$
|
(10
|
)
|
|
Depreciation and amortization
|
|
15
|
|
|
|
5
|
|
|
|
5
|
|
|
EBITDA
|
|
(15
|
)
|
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
Years Ended December 31,
|
|||||||||||
(In millions, except where otherwise stated)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Sales
|
$
|
823
|
|
|
$
|
797
|
|
|
$
|
596
|
|
|
Operating income
(1)
|
|
169
|
|
|
|
186
|
|
|
|
69
|
|
|
EBITDA
(2)
|
|
201
|
|
|
|
219
|
|
|
|
100
|
|
|
(In million board feet)
|
|
|
|
|
|
|
|
|
|
|||
Shipments
(3)
|
|
1,846
|
|
|
|
2,011
|
|
|
|
1,844
|
|
|
Downtime
(3)
|
|
147
|
|
|
|
130
|
|
|
|
199
|
|
|
|
December 31,
|
|||||||||||
(In million board feet)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Finished goods inventory
(3)
|
|
157
|
|
|
|
124
|
|
|
|
124
|
|
|
(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)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Net income including noncontrolling interests
|
$
|
169
|
|
|
$
|
186
|
|
|
$
|
69
|
|
|
Depreciation and amortization
|
|
32
|
|
|
|
33
|
|
|
|
31
|
|
|
EBITDA
|
|
201
|
|
|
|
219
|
|
|
|
100
|
|
|
•
|
a temporary production curtailment of 10% in the fourth quarter of 2018, given challenging market and weather conditions;
|
•
|
lower productivity; and
|
•
|
the sale of the Saint-Hilarion (Quebec) sawmill and the consolidation of our two sawmills at Senneterre in the third quarter of 2017.
|
|
Years Ended December 31,
|
|||||||||||
(In millions, except where otherwise stated)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Sales
|
$
|
907
|
|
|
$
|
842
|
|
|
$
|
1,009
|
|
|
Operating income (loss)
(1)
|
|
74
|
|
|
|
(23
|
)
|
|
|
(16
|
)
|
|
EBITDA
(2)
|
|
140
|
|
|
|
43
|
|
|
|
58
|
|
|
(In thousands of metric tons)
|
|
|
|
|
|
|
|
|
|
|||
Shipments
|
|
1,507
|
|
|
|
1,638
|
|
|
|
1,992
|
|
|
Downtime
|
|
22
|
|
|
|
55
|
|
|
|
81
|
|
|
|
December 31,
|
|||||||||||
(In thousands of metric tons)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Finished goods inventory
|
|
101
|
|
|
|
78
|
|
|
|
105
|
|
|
(1)
|
Net income (loss) including noncontrolling interests
is equal to
operating income (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)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Net income (loss) including noncontrolling interests
|
$
|
74
|
|
|
$
|
(23
|
)
|
|
$
|
(16
|
)
|
|
Depreciation and amortization
|
|
66
|
|
|
|
66
|
|
|
|
74
|
|
|
EBITDA
|
|
140
|
|
|
|
43
|
|
|
|
58
|
|
|
•
|
higher maintenance and labor costs ($23 million), mainly due to more planned repairs and production disruptions;
|
•
|
higher power prices ($5 million), largely related to unusual weather conditions in 2018;
|
•
|
lower contribution from our cogeneration facilities ($3 million), mostly the result of a turbine failure; and
|
•
|
higher chemical costs ($3 million), mostly price-related;
|
•
|
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.
|
|
Years Ended December 31,
|
|||||||||||
(In millions, except where otherwise stated)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Sales
|
$
|
811
|
|
|
$
|
882
|
|
|
$
|
1,015
|
|
|
Operating income (loss)
(1)
|
|
40
|
|
|
|
(9
|
)
|
|
|
19
|
|
|
EBITDA
(2)
|
|
87
|
|
|
|
36
|
|
|
|
64
|
|
|
(In thousands of short tons)
|
|
|
|
|
|
|
|
|
|
|||
Shipments
|
|
1,130
|
|
|
|
1,343
|
|
|
|
1,514
|
|
|
Downtime
|
|
21
|
|
|
|
33
|
|
|
|
22
|
|
|
|
December 31,
|
|||||||||||
(In thousands of short tons)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Finished goods inventory
|
|
54
|
|
|
|
66
|
|
|
|
92
|
|
|
(1)
|
Net income (loss) including noncontrolling interests
is equal to
operating income (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)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Net income (loss) including noncontrolling interests
|
$
|
40
|
|
|
$
|
(9
|
)
|
|
$
|
19
|
|
|
Depreciation and amortization
|
|
47
|
|
|
|
45
|
|
|
|
45
|
|
|
EBITDA
|
|
87
|
|
|
|
36
|
|
|
|
64
|
|
|
•
|
lower wood fiber costs ($11 million), almost entirely market-driven; and
|
•
|
higher internal hydroelectric generation ($8 million), due to investments in 2017, in part to improve productivity;
|
•
|
higher power and steam costs ($5 million), mostly due to unfavorable steam usage;
|
•
|
an increase in maintenance and related labor costs ($5 million); and
|
•
|
higher chemical prices ($4 million).
|
•
|
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.
|
|
Years Ended December 31,
|
|||||||||||
(In millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Cost of sales, excluding depreciation, amortization and distribution costs
|
$
|
(12
|
)
|
|
$
|
(53
|
)
|
|
$
|
(17
|
)
|
|
Depreciation and amortization
|
|
(25
|
)
|
|
|
(24
|
)
|
|
|
(14
|
)
|
|
Selling, general and administrative expenses
|
|
(33
|
)
|
|
|
(41
|
)
|
|
|
(26
|
)
|
|
Closure costs, impairment and other related charges
|
|
(121
|
)
|
|
|
(82
|
)
|
|
|
(62
|
)
|
|
Net gain on disposition of assets
|
|
145
|
|
|
|
15
|
|
|
|
2
|
|
|
Operating loss
|
$
|
(46
|
)
|
|
$
|
(185
|
)
|
|
$
|
(117
|
)
|
|
Interest expense
|
|
(47
|
)
|
|
|
(49
|
)
|
|
|
(38
|
)
|
|
Non-operating pension and other postretirement benefit credits (costs)
|
|
50
|
|
|
|
7
|
|
|
|
(8
|
)
|
|
Other income, net
|
|
5
|
|
|
|
6
|
|
|
|
7
|
|
|
Income tax provision
|
|
(152
|
)
|
|
|
(84
|
)
|
|
|
(19
|
)
|
|
Net loss including noncontrolling interests
|
$
|
(190
|
)
|
|
$
|
(305
|
)
|
|
$
|
(175
|
)
|
|
|
Years Ended December 31,
|
|||||||||||
(In millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Net loss including noncontrolling interests
|
$
|
(190
|
)
|
|
$
|
(305
|
)
|
|
$
|
(175
|
)
|
|
Interest expense
|
|
47
|
|
|
|
49
|
|
|
|
38
|
|
|
Income tax provision
|
|
152
|
|
|
|
84
|
|
|
|
19
|
|
|
Depreciation and amortization
|
|
25
|
|
|
|
24
|
|
|
|
14
|
|
|
EBITDA
|
$
|
34
|
|
|
$
|
(148
|
)
|
|
$
|
(104
|
)
|
|
Foreign exchange loss (gain)
|
|
2
|
|
|
|
(9
|
)
|
|
|
7
|
|
|
Closure costs, impairment and other related charges
|
|
121
|
|
|
|
82
|
|
|
|
62
|
|
|
(Reversal of) inventory write-downs related to closures
|
|
(1
|
)
|
|
|
24
|
|
|
|
7
|
|
|
Start-up costs
|
|
8
|
|
|
|
27
|
|
|
|
8
|
|
|
Net gain on disposition of assets
|
|
(145
|
)
|
|
|
(15
|
)
|
|
|
(2
|
)
|
|
Non-operating pension and other postretirement benefit (credits) costs
|
|
(50
|
)
|
|
|
(7
|
)
|
|
|
8
|
|
|
Other (income) expense, net
|
|
(7
|
)
|
|
|
3
|
|
|
|
(14
|
)
|
|
Adjusted EBITDA
|
$
|
(38
|
)
|
|
$
|
(43
|
)
|
|
$
|
(28
|
)
|
|
•
|
start-up costs ($7 million) for the Calhoun tissue manufacturing and converting facility in the first quarter of 2018; and
|
•
|
asset preservation costs ($6 million), primarily related to our indefinitely idled Thorold paper mill and our permanently closed Fort Frances (Ontario) mill.
|
•
|
write-downs of mill stores and other supplies ($24 million), primarily related to the permanent closure of two paper machines at Calhoun, a paper machine at Catawba, and the Mokpo paper mill;
|
•
|
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 our indefinitely idled Thorold paper mill and our 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 ($4 million) in connection with the permanent closure of a paper machine at the Catawba mill;
|
•
|
accelerated depreciation ($6 million) and severance and other closure-related costs ($2 million) associated with the permanent closure of two paper machines at Calhoun; and
|
•
|
severance and other costs related to the permanent closure of the Mokpo paper mill ($7 million).
|
•
|
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;
|
•
|
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 our permanently closed Fort Frances mill.
|
•
|
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;
|
•
|
restrict dividends, 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,
|
||
|
2018
|
2017
|
2016
|
Standard & Poor’s
|
|
|
|
Senior unsecured debt
|
B+
|
B+
|
B+
|
Long-term corporate credit rating
|
BB-
|
BB-
|
BB-
|
Outlook
(1)
|
Stable
|
Negative
|
Negative
|
Moody’s Investors Service
|
|
|
|
Senior unsecured debt
|
B1
|
B2
|
B1
|
Corporate family rating
|
Ba3
|
B1
|
Ba3
|
Outlook
|
Stable
|
Stable
|
Stable
|
Liquidity rating
|
SGL-1
|
SGL-1
|
SGL-1
|
(1)
|
On January 7, 2019, Standard & Poor's revised the Company’s outlook from stable to positive.
|
|
Years Ended December 31,
|
|||||||||||
(In millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Net cash provided by operating activities
|
$
|
435
|
|
|
$
|
158
|
|
|
$
|
81
|
|
|
Net cash provided by (used in) investing activities
|
|
146
|
|
|
|
(191
|
)
|
|
|
(273
|
)
|
|
Net cash (used in) provided by financing activities
|
|
(281
|
)
|
|
|
3
|
|
|
|
169
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(4
|
)
|
|
|
6
|
|
|
|
1
|
|
|
Net increase (decrease) in cash and cash equivalents, and restricted cash
|
$
|
296
|
|
|
$
|
(24
|
)
|
|
$
|
(22
|
)
|
|
•
|
the disposition of the assets of the Catawba and Fairmont mills for total net proceeds of $333 million in the current year; and
|
•
|
the refund in 2018 of substantially all of the cash deposits of
$61 million
made on our U.S. imports of SC paper produced at our Canadian mills;
|
•
|
higher countervailing and anti-dumping duty cash deposits on our imports of softwood lumber products to the U.S. from our Canadian sawmills ($51 million); and
|
•
|
the disposition of the assets of the permanently closed paper mill in Mokpo in 2017, for a cash consideration of $18 million.
|
|
Accounting
|
Funding
|
||||||||||||||
|
December 31,
|
December 31,
|
||||||||||||||
(
In millions, except percentages
)
|
2018
|
|
|
2017
|
|
|
2018
|
|
(1)
|
2017
|
|
(2)
|
||||
Discount rate
|
|
3.8
|
%
|
|
|
3.6
|
%
|
|
|
5.7
|
%
|
|
|
5.1
|
%
|
|
Funded ratio
|
|
76
|
%
|
|
|
80
|
%
|
|
|
87
|
%
|
|
|
89
|
%
|
|
Deficit
|
$
|
(1,122
|
)
|
|
$
|
(1,097
|
)
|
|
$
|
(572
|
)
|
|
$
|
(562
|
)
|
|
(1)
|
Determined on a going concern basis for Canadian plans, and on a 25-year average interest rate basis for U.S. plans. Preliminary, subject to final actuarial reports.
|
(2)
|
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.
|
(In millions)
|
Total
|
|
|
2019
|
|
|
2020-2021
|
|
|
2022-2023
|
|
|
Thereafter
|
|
||||||
Long-term debt
(1)
|
$
|
769
|
|
|
$
|
252
|
|
|
$
|
50
|
|
|
$
|
414
|
|
|
$
|
53
|
|
|
Non-cancelable operating lease obligations
(2)
|
|
34
|
|
|
|
9
|
|
|
|
13
|
|
|
|
5
|
|
|
|
7
|
|
|
Purchase obligations
(2)
|
|
340
|
|
|
|
78
|
|
|
|
127
|
|
|
|
105
|
|
|
|
30
|
|
|
|
$
|
1,143
|
|
|
$
|
339
|
|
|
$
|
190
|
|
|
$
|
524
|
|
|
$
|
90
|
|
|
(1)
|
Long-term debt obligations primarily represent: interest payments, principal amount repurchase of $225 million in 2019, and the payment of the remaining principal balance at maturity of our 2023 notes; as well as interest payments and principal repayment at maturity of our Term loan. Interest on our Term loan is assumed to remain unchanged from the rates in effect as of
December 31, 2018
, assuming no repayments until maturity. Information on our long-term debt can be found in “
Note 11, “Long-Term Debt
,” to our Consolidated Financial Statements.
|
(2)
|
Information on our operating leases and purchase obligations can be found in
Note 17, “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. The discount rate for our domestic and foreign plans was determined with a model that develops a hypothetical high-quality bond portfolio, where the bonds are theoretically purchased to settle the expected benefit payments of the plans. The discount rate reflects the single rate that produces the same discounted values as the value of the theoretical high-quality bond portfolio;
|
•
|
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. In determining the expected return on assets, we considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio;
|
•
|
life expectancy rate – used to estimate the impact of life expectancy on our pension and OPEB obligations. In determining the life expectancy rate of our domestic and foreign plans, we used the most recent actuarially-determined mortality tables and improvement scales. For the foreign plans, the mortality tables were adjusted with the result of our historical mortality experience study. The rates used are consistent with our future expectations of life expectancy for the employees who participate in our pension and OPEB plans;
|
•
|
rate of compensation increase – used to calculate the impact future pay increases will have on our pension obligations. In determining the rate of compensation increase, we reviewed historical salary increases and promotions, while considering current industry conditions, the terms of collective bargaining agreements with our employees and the outlook for our industry; and
|
•
|
health care cost trend rate – used to calculate the impact of future health care costs on our OPEB obligations. For the health care cost trend rate, we considered historical trends for these costs, as well as recently enacted healthcare legislation.
|
|
2018 Net Periodic Benefit Cost
|
|
Pension and OPEB Obligations as of December 31, 2018
|
||||||||||||||
(In millions)
|
25 Basis Point Increase
|
25 Basis Point Decrease
|
|
25 Basis Point Increase
|
25 Basis Point Decrease
|
||||||||||||
Assumption:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Discount rate
|
$
|
(1
|
)
|
|
$
|
2
|
|
|
|
$
|
(117
|
)
|
|
$
|
128
|
|
|
Return on assets
|
|
(10
|
)
|
|
|
10
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Rate of compensation increase
|
|
1
|
|
|
|
(1
|
)
|
|
|
|
3
|
|
|
|
(3
|
)
|
|
Health care cost trend rate
|
|
—
|
|
|
|
—
|
|
|
|
|
2
|
|
|
|
(2
|
)
|
|
•
|
Deferred income tax assets of
$688 million
, comprised of
$532 million
for federal and state net operating loss carryforwards expiring between 2021 and 2038, and
$156 million
for other temporary differences, mostly related to pension and OPEB plans.
|
•
|
Deferred income tax liabilities of
$35 million
, mostly related to tax accelerated depreciation on fixed assets.
|
•
|
A valuation allowance of
$652 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
$915 million
, comprised of
$176 million
related to undeducted research and development expenditures with no expiry,
$72 million
for tax credit carryforwards expiring between 2021 and 2038,
$19 million
for federal and provincial non-capital loss carryforwards expiring between 2026 and 2038, as well as
$648 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
$26 million
for various temporary differences.
|
•
|
A valuation allowance of
$14 million
, virtually all of which is related to net capital loss carryforwards with no expiry.
|
•
|
Deferred income tax assets of
$35 million
, mostly comprised of other foreign subsidiaries net operating loss carryforwards expiring between 2020 and 2027.
|
•
|
A valuation allowance of
$35 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
|
$
|
35
|
|
|
$
|
(35
|
)
|
|
Product costs
|
|
(21
|
)
|
|
|
21
|
|
|
Discount rate
|
|
(10
|
)
|
|
|
10
|
|
|
PRODUCT
|
Unit
|
Projected change in annualized EBITDA ($ millions) based on $25 change in price per unit
|
|||
Market pulp
|
$ / metric ton
|
29
|
|
|
|
Wood products
|
$ / thousand board feet
|
45
|
|
|
|
Newsprint
|
$ / metric ton
|
38
|
|
|
|
Specialty papers
|
$ / short ton
|
21
|
|
|
|
Page
|
|
Years Ended December 31,
|
|||||||||||
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Sales
|
$
|
3,756
|
|
|
$
|
3,513
|
|
|
$
|
3,545
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|||
Cost of sales, excluding depreciation, amortization and distribution costs
|
|
2,549
|
|
|
|
2,588
|
|
|
|
2,710
|
|
|
Depreciation and amortization
|
|
212
|
|
|
|
204
|
|
|
|
206
|
|
|
Distribution costs
|
|
475
|
|
|
|
442
|
|
|
|
440
|
|
|
Selling, general and administrative expenses
|
|
165
|
|
|
|
170
|
|
|
|
147
|
|
|
Closure costs, impairment and other related charges
|
|
121
|
|
|
|
82
|
|
|
|
62
|
|
|
Net gain on disposition of assets
|
|
(145
|
)
|
|
|
(15
|
)
|
|
|
(2
|
)
|
|
Operating income (loss)
|
|
379
|
|
|
|
42
|
|
|
|
(18
|
)
|
|
Interest expense
|
|
(47
|
)
|
|
|
(49
|
)
|
|
|
(38
|
)
|
|
Non-operating pension and other postretirement benefit credits (costs)
|
|
50
|
|
|
|
7
|
|
|
|
(8
|
)
|
|
Other income, net
|
|
5
|
|
|
|
6
|
|
|
|
7
|
|
|
Income (loss) before income taxes
|
|
387
|
|
|
|
6
|
|
|
|
(57
|
)
|
|
Income tax provision
|
|
(152
|
)
|
|
|
(84
|
)
|
|
|
(19
|
)
|
|
Net income (loss) including noncontrolling interests
|
|
235
|
|
|
|
(78
|
)
|
|
|
(76
|
)
|
|
Net income attributable to noncontrolling interests
|
|
—
|
|
|
|
(6
|
)
|
|
|
(5
|
)
|
|
Net income (loss) attributable to Resolute Forest Products Inc.
|
$
|
235
|
|
|
$
|
(84
|
)
|
|
$
|
(81
|
)
|
|
Net income (loss) per share attributable to Resolute Forest Products Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
2.57
|
|
|
$
|
(0.93
|
)
|
|
$
|
(0.90
|
)
|
|
Diluted
|
|
2.52
|
|
|
|
(0.93
|
)
|
|
|
(0.90
|
)
|
|
Weighted-average number of Resolute Forest Products Inc. common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
91.3
|
|
|
|
90.5
|
|
|
|
89.9
|
|
|
Diluted
|
|
93.3
|
|
|
|
90.5
|
|
|
|
89.9
|
|
|
|
|
Years Ended December 31,
|
|
|||||||||
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Net income (loss) including noncontrolling interests
|
$
|
235
|
|
|
$
|
(78
|
)
|
|
$
|
(76
|
)
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|||
Unamortized prior service credits
|
|
|
|
|
|
|
|
|
|
|||
Change in unamortized prior service credits
|
|
(25
|
)
|
|
|
(15
|
)
|
|
|
(17
|
)
|
|
Income tax benefit
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
Change in unamortized prior service credits, net of tax
|
|
(24
|
)
|
|
|
(15
|
)
|
|
|
(17
|
)
|
|
Unamortized actuarial losses
|
|
|
|
|
|
|
|
|
|
|||
Change in unamortized actuarial losses
|
|
(194
|
)
|
|
|
(10
|
)
|
|
|
(183
|
)
|
|
Income tax benefit
|
|
51
|
|
|
|
3
|
|
|
|
31
|
|
|
Change in unamortized actuarial losses, net of tax
|
|
(143
|
)
|
|
|
(7
|
)
|
|
|
(152
|
)
|
|
Foreign currency translation
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
1
|
|
|
Other comprehensive loss, net of tax
|
|
(168
|
)
|
|
|
(25
|
)
|
|
|
(168
|
)
|
|
Comprehensive income (loss) including noncontrolling interests
|
|
67
|
|
|
|
(103
|
)
|
|
|
(244
|
)
|
|
Comprehensive income attributable to noncontrolling interests
|
|
—
|
|
|
|
(6
|
)
|
|
|
(5
|
)
|
|
Comprehensive income (loss) attributable to Resolute Forest Products Inc.
|
$
|
67
|
|
|
$
|
(109
|
)
|
|
$
|
(249
|
)
|
|
|
December 31,
2018 |
December 31,
2017 |
||||||
Assets
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
304
|
|
|
$
|
6
|
|
|
Accounts receivable, net:
|
|
|
|
|
|
|
||
Trade
|
|
347
|
|
|
|
399
|
|
|
Other
|
|
102
|
|
|
|
80
|
|
|
Inventories, net
|
|
508
|
|
|
|
526
|
|
|
Other current assets
|
|
43
|
|
|
|
33
|
|
|
Total current assets
|
|
1,304
|
|
|
|
1,044
|
|
|
Fixed assets, net
|
|
1,515
|
|
|
|
1,716
|
|
|
Amortizable intangible assets, net
|
|
50
|
|
|
|
65
|
|
|
Goodwill
|
|
—
|
|
|
|
81
|
|
|
Deferred income tax assets
|
|
876
|
|
|
|
1,076
|
|
|
Other assets
|
|
190
|
|
|
|
165
|
|
|
Total assets
|
$
|
3,935
|
|
|
$
|
4,147
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
$
|
427
|
|
|
$
|
420
|
|
|
Current portion of long-term debt
|
|
223
|
|
|
|
1
|
|
|
Total current liabilities
|
|
650
|
|
|
|
421
|
|
|
Long-term debt, net of current portion
|
|
422
|
|
|
|
788
|
|
|
Pension and other postretirement benefit obligations
|
|
1,257
|
|
|
|
1,257
|
|
|
Deferred income tax liabilities
|
|
—
|
|
|
|
13
|
|
|
Other liabilities
|
|
71
|
|
|
|
68
|
|
|
Total liabilities
|
|
2,400
|
|
|
|
2,547
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
||
Equity:
|
|
|
|
|
|
|
||
Resolute Forest Products Inc. shareholders’ equity:
|
|
|
|
|
|
|
||
Common stock, $0.001 par value. 118.8 shares issued and 90.8 shares outstanding as of December 31, 2018; 118.2 shares issued and 90.2 shares outstanding as of December 31, 2017
|
|
—
|
|
|
|
—
|
|
|
Additional paid-in capital
|
|
3,802
|
|
|
|
3,793
|
|
|
Deficit
|
|
(1,198
|
)
|
|
|
(1,294
|
)
|
|
Accumulated other comprehensive loss
|
|
(950
|
)
|
|
|
(780
|
)
|
|
Treasury stock at cost, 28.0 shares as of December 31, 2018 and 2017
|
|
(120
|
)
|
|
|
(120
|
)
|
|
Total Resolute Forest Products Inc. shareholders’ equity
|
|
1,534
|
|
|
|
1,599
|
|
|
Noncontrolling interests
|
|
1
|
|
|
|
1
|
|
|
Total equity
|
|
1,535
|
|
|
|
1,600
|
|
|
Total liabilities and equity
|
$
|
3,935
|
|
|
$
|
4,147
|
|
|
|
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, 2015
|
$
|
—
|
|
|
$
|
3,765
|
|
|
$
|
(1,126
|
)
|
|
$
|
(587
|
)
|
|
$
|
(120
|
)
|
|
$
|
13
|
|
|
$
|
1,945
|
|
|
Share-based compensation, net of withholding taxes
|
|
—
|
|
|
|
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, net of withholding taxes
|
|
—
|
|
|
|
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 13)
|
|
—
|
|
|
|
—
|
|
|
|
(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
|
|
|
Share-based compensation, net of withholding taxes
|
|
—
|
|
|
|
6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6
|
|
|
Net income
|
|
—
|
|
|
|
—
|
|
|
|
235
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
235
|
|
|
Special dividend
|
|
—
|
|
|
|
3
|
|
|
|
(141
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(138
|
)
|
|
Reclassification of stranded income tax (Note 2)
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
|
(2
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Stock unit awards vested (0.6 shares), net of shares forfeited for employee withholding taxes
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Other comprehensive loss, net of tax
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(168
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(168
|
)
|
|
Balance as of December 31, 2018
|
$
|
—
|
|
|
$
|
3,802
|
|
|
$
|
(1,198
|
)
|
|
$
|
(950
|
)
|
|
$
|
(120
|
)
|
|
$
|
1
|
|
|
$
|
1,535
|
|
|
|
Years Ended December 31,
|
|||||||||||
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss) including noncontrolling interests
|
$
|
235
|
|
|
$
|
(78
|
)
|
|
$
|
(76
|
)
|
|
Adjustments to reconcile net income (loss) including noncontrolling interests to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Share-based compensation
|
|
12
|
|
|
|
15
|
|
|
|
11
|
|
|
Depreciation and amortization
|
|
212
|
|
|
|
204
|
|
|
|
206
|
|
|
Closure costs, impairment and other related charges
|
|
120
|
|
|
|
66
|
|
|
|
59
|
|
|
(Reversal of) inventory write-downs related to closures
|
|
(1
|
)
|
|
|
24
|
|
|
|
7
|
|
|
Deferred income taxes
|
|
164
|
|
|
|
80
|
|
|
|
14
|
|
|
Net pension contributions and other postretirement benefit payments
|
|
(144
|
)
|
|
|
(109
|
)
|
|
|
(125
|
)
|
|
Net gain on disposition of assets
|
|
(145
|
)
|
|
|
(15
|
)
|
|
|
(2
|
)
|
|
Loss (gain) on translation of foreign currency denominated deferred income taxes
|
|
75
|
|
|
|
(71
|
)
|
|
|
(28
|
)
|
|
(Gain) loss on translation of foreign currency denominated pension and other postretirement benefit obligations
|
|
(63
|
)
|
|
|
58
|
|
|
|
27
|
|
|
Gain on disposition of equity method investment
|
|
—
|
|
|
|
—
|
|
|
|
(5
|
)
|
|
Net planned major maintenance (payments) amortization
|
|
(20
|
)
|
|
|
3
|
|
|
|
(3
|
)
|
|
Changes in working capital:
|
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
|
(19
|
)
|
|
|
(37
|
)
|
|
|
26
|
|
|
Inventories
|
|
(46
|
)
|
|
|
23
|
|
|
|
(37
|
)
|
|
Other current assets
|
|
1
|
|
|
|
1
|
|
|
|
7
|
|
|
Accounts payable and accrued liabilities
|
|
38
|
|
|
|
(17
|
)
|
|
|
(3
|
)
|
|
Other, net
|
|
16
|
|
|
|
11
|
|
|
|
3
|
|
|
Net cash provided by operating activities
|
|
435
|
|
|
|
158
|
|
|
|
81
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|||
Cash invested in fixed assets
|
|
(155
|
)
|
|
|
(164
|
)
|
|
|
(249
|
)
|
|
Acquisition of a sawmill in Senneterre (Quebec)
|
|
—
|
|
|
|
—
|
|
|
|
(6
|
)
|
|
Disposition of assets
|
|
336
|
|
|
|
21
|
|
|
|
5
|
|
|
Decrease (increase) in countervailing duty cash deposits on supercalendered paper, net
|
|
48
|
|
|
|
(22
|
)
|
|
|
(23
|
)
|
|
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber
|
|
(77
|
)
|
|
|
(26
|
)
|
|
|
—
|
|
|
Increase in countervailing duty cash deposits on uncoated groundwood paper
|
|
(6
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Net cash provided by (used in) investing activities
|
|
146
|
|
|
|
(191
|
)
|
|
|
(273
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Net (repayments) borrowings under revolving credit facilities
|
|
(144
|
)
|
|
|
19
|
|
|
|
125
|
|
|
Payment of special dividend
|
|
(136
|
)
|
|
|
—
|
|
|
|
—
|
|
|
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
|
)
|
|
|
—
|
|
|
|
(1
|
)
|
|
Net cash (used in) provided by financing activities
|
|
(281
|
)
|
|
|
3
|
|
|
|
169
|
|
|
Effect of exchange rate changes on cash and cash equivalents, and restricted cash
|
|
(4
|
)
|
|
|
6
|
|
|
|
1
|
|
|
Net increase (decrease) in cash and cash equivalents, and restricted cash
|
|
296
|
|
|
|
(24
|
)
|
|
|
(22
|
)
|
|
Cash and cash equivalents, and restricted cash:
|
|
|
|
|
|
|
|
|
|
|||
Beginning of year
|
|
49
|
|
|
|
73
|
|
|
|
95
|
|
|
End of year
|
$
|
345
|
|
|
$
|
49
|
|
|
$
|
73
|
|
|
Cash and cash equivalents, and restricted cash at year end:
|
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents
|
$
|
304
|
|
|
$
|
6
|
|
|
$
|
35
|
|
|
Restricted cash (included in “Other current assets” and “Other assets”)
|
|
41
|
|
|
|
43
|
|
|
|
38
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
|||
Cash paid (received) during the year for:
|
|
|
|
|
|
|
|
|
|
|||
Interest, including capitalized interest of $1, $1 and $7 in 2018, 2017 and 2016, respectively
|
$
|
40
|
|
|
$
|
47
|
|
|
$
|
40
|
|
|
Income taxes
|
|
(1
|
)
|
|
|
7
|
|
|
|
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.
|
(In millions
)
|
Before Accounting Standards Update
|
Effect of Change
|
As
Reported
|
|||||||||
Cost of sales, excluding depreciation, amortization and distribution costs
|
$
|
2,497
|
|
|
$
|
52
|
|
|
$
|
2,549
|
|
|
Selling, general and administrative expenses
|
|
167
|
|
|
|
(2
|
)
|
|
|
165
|
|
|
Operating income
|
|
429
|
|
|
|
(50
|
)
|
|
|
379
|
|
|
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
50
|
|
|
|
50
|
|
|
(In millions
)
|
As
Previously
Reported
|
Effect of change
|
As Adjusted
|
|||||||||
Cost of sales, excluding depreciation, amortization and distribution costs
|
$
|
2,574
|
|
|
$
|
14
|
|
|
$
|
2,588
|
|
|
Selling, general and administrative expenses
|
|
172
|
|
|
|
(2
|
)
|
|
|
170
|
|
|
Closure costs, impairment and other related charges
|
|
87
|
|
|
|
(5
|
)
|
|
|
82
|
|
|
Operating income
|
|
49
|
|
|
|
(7
|
)
|
|
|
42
|
|
|
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
7
|
|
|
|
7
|
|
|
(In millions
)
|
As
Previously
Reported
|
Effect of change
|
As Adjusted
|
|||||||||
Cost of sales, excluding depreciation, amortization and distribution costs
|
$
|
2,716
|
|
|
$
|
(6
|
)
|
|
$
|
2,710
|
|
|
Selling, general and administrative expenses
|
|
149
|
|
|
|
(2
|
)
|
|
|
147
|
|
|
Operating loss
|
|
(26
|
)
|
|
|
8
|
|
|
|
(18
|
)
|
|
Non-operating pension and other postretirement benefit costs
|
|
—
|
|
|
|
(8
|
)
|
|
|
(8
|
)
|
|
(In millions)
|
Impairment of Assets
|
Accelerated Depreciation
|
Severance and Other Costs
|
Total
|
||||||||||||
Pulp mill at Coosa Pines (Alabama)
(1)
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
55
|
|
|
Permanent closures
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Paper machine at Catawba (South Carolina)
|
|
5
|
|
|
|
—
|
|
|
|
4
|
|
|
|
9
|
|
|
Paper machines at Calhoun (Tennessee)
|
|
—
|
|
|
|
6
|
|
|
|
2
|
|
|
|
8
|
|
|
Paper mill at Mokpo (South Korea)
|
|
—
|
|
|
|
—
|
|
|
|
7
|
|
|
|
7
|
|
|
Other
|
|
—
|
|
|
|
—
|
|
|
|
3
|
|
|
|
3
|
|
|
|
$
|
60
|
|
|
$
|
6
|
|
|
$
|
16
|
|
|
$
|
82
|
|
|
(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 at Mokpo
(1)
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
Permanent closure
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Paper machine at 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.
|
(In millions)
|
Unamortized Prior Service Credits
|
Unamortized Actuarial Losses
|
Foreign Currency Translation
|
Total
|
||||||||||||
Balance as of December 31, 2017
|
$
|
52
|
|
|
$
|
(826
|
)
|
|
$
|
(6
|
)
|
|
$
|
(780
|
)
|
|
Other comprehensive loss before reclassifications
|
|
(5
|
)
|
|
|
(162
|
)
|
|
|
(1
|
)
|
|
|
(168
|
)
|
|
Amounts reclassified from accumulated other comprehensive loss
(1)
|
|
(19
|
)
|
|
|
19
|
|
|
|
—
|
|
|
|
—
|
|
|
Net current period other comprehensive loss
|
|
(24
|
)
|
|
|
(143
|
)
|
|
|
(1
|
)
|
|
|
(168
|
)
|
|
Reclassification of stranded income tax (Note 2)
|
|
—
|
|
|
|
(2
|
)
|
|
|
—
|
|
|
|
(2
|
)
|
|
Balance as of December 31, 2018
|
$
|
28
|
|
|
$
|
(971
|
)
|
|
$
|
(7
|
)
|
|
$
|
(950
|
)
|
|
(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
|
)
|
|
Non-operating pension and other postretirement benefit credits (costs)
(1)
|
Curtailment gain
|
|
(5
|
)
|
|
Net gain on disposition of assets
(1)
|
|
|
1
|
|
|
Income tax provision
|
|
$
|
(19
|
)
|
|
Net of tax
|
Unamortized Actuarial Losses
|
|
|
|
|
|
Amortization of actuarial losses
|
$
|
33
|
|
|
Non-operating pension and other postretirement benefit credits (costs)
(1)
|
Curtailment gain
|
|
(8
|
)
|
|
Net gain on disposition of assets
(1)
|
Settlement loss
|
|
2
|
|
|
Net gain on disposition of assets
(1)
|
Settlement loss
|
|
1
|
|
|
Non-operating pension and other postretirement benefit credits (costs)
(1)
|
|
|
(9
|
)
|
|
Income tax provision
|
|
$
|
19
|
|
|
Net of tax
|
Total Reclassifications
|
$
|
—
|
|
|
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 12, “Pension and Other Postretirement Benefit Plans
.”
|
(In millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Numerator:
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss) attributable to Resolute Forest Products Inc.
|
$
|
235
|
|
|
$
|
(84
|
)
|
|
$
|
(81
|
)
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|||
Basic weighted-average number of Resolute Forest Products Inc. common shares outstanding
|
|
91.3
|
|
|
|
90.5
|
|
|
|
89.9
|
|
|
Dilutive impact of nonvested stock incentive awards
|
|
2.0
|
|
|
|
—
|
|
|
|
—
|
|
|
Diluted weighted-average number of Resolute Forest Products Inc. common shares outstanding
|
|
93.3
|
|
|
|
90.5
|
|
|
|
89.9
|
|
|
Net income (loss) per share attributable to Resolute Forest Products Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
2.57
|
|
|
$
|
(0.93
|
)
|
|
$
|
(0.90
|
)
|
|
Diluted
|
|
2.52
|
|
|
|
(0.93
|
)
|
|
|
(0.90
|
)
|
|
(In millions)
|
2018
|
|
2017
|
|
2016
|
|
Stock options
|
1.2
|
|
1.4
|
|
1.4
|
|
Stock unit awards
|
—
|
|
4.1
|
|
2.6
|
|
(In millions)
|
2018
|
|
|
2017
|
|
|
||
Raw materials
|
$
|
106
|
|
|
$
|
108
|
|
|
Work in process
|
|
39
|
|
|
|
38
|
|
|
Finished goods
|
|
180
|
|
|
|
175
|
|
|
Mill stores and other supplies
|
|
183
|
|
|
|
205
|
|
|
|
$
|
508
|
|
|
$
|
526
|
|
|
(Dollars in millions)
|
Estimated Useful Lives (Years)
|
2018
|
|
|
2017
|
|
|
||
Land and land improvements
|
5 – 20
|
$
|
51
|
|
|
$
|
56
|
|
|
Buildings
|
10 – 40
|
|
305
|
|
|
|
298
|
|
|
Machinery and equipment
(1)
|
2 – 25
|
|
2,185
|
|
|
|
2,544
|
|
|
Hydroelectric power plants
|
10 – 40
|
|
297
|
|
|
|
292
|
|
|
Timberlands and timberlands improvements
|
10 – 20
|
|
113
|
|
|
|
110
|
|
|
Construction in progress
|
|
|
62
|
|
|
|
30
|
|
|
|
|
|
3,013
|
|
|
|
3,330
|
|
|
Less: Accumulated depreciation
|
|
|
(1,498
|
)
|
|
|
(1,614
|
)
|
|
|
|
$
|
1,515
|
|
|
$
|
1,716
|
|
|
(In millions)
|
2018
|
|
|
2017
|
|
|
||
Machinery and equipment
|
$
|
114
|
|
|
$
|
111
|
|
|
Less: Accumulated depreciation
|
|
(59
|
)
|
|
|
(42
|
)
|
|
|
$
|
55
|
|
|
$
|
69
|
|
|
|
|
2018
|
|
2017
|
||||||||||||||||||||||
(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
|
|
|
$
|
7
|
|
|
$
|
12
|
|
|
|
$
|
19
|
|
|
$
|
5
|
|
|
$
|
14
|
|
|
Energy contracts
|
15 – 25
|
|
52
|
|
|
|
16
|
|
|
|
36
|
|
|
|
|
52
|
|
|
|
14
|
|
|
|
38
|
|
|
Customer relationships
(2)
|
10
|
|
2
|
|
|
|
1
|
|
|
|
1
|
|
|
|
|
14
|
|
|
|
2
|
|
|
|
12
|
|
|
Other
|
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
|
|
|
$
|
74
|
|
|
$
|
24
|
|
|
$
|
50
|
|
|
|
$
|
86
|
|
|
$
|
21
|
|
|
$
|
65
|
|
|
(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 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.
|
(2)
|
As a result of the deterioration of estimated future cash flows of Atlas, we recorded intangible assets impairment charges of
$10 million
for the year ended December 31, 2018. See
Note 3, “Closure Costs, Impairment and Other Related Charges
” for more information.
|
(In millions)
|
2018
|
|
|
2017
|
|
|
||
Trade accounts payable
|
$
|
299
|
|
|
$
|
306
|
|
|
Payroll, bonuses and severance payable
|
|
63
|
|
|
|
55
|
|
|
Accrued interest
|
|
5
|
|
|
|
5
|
|
|
Pension and other postretirement benefit obligations
|
|
17
|
|
|
|
18
|
|
|
Income and other taxes payable
|
|
4
|
|
|
|
10
|
|
|
Deposits
|
|
20
|
|
|
|
3
|
|
|
Environmental liabilities
|
|
2
|
|
|
|
2
|
|
|
Other
|
|
17
|
|
|
|
21
|
|
|
|
$
|
427
|
|
|
$
|
420
|
|
|
(In millions)
|
2018
|
|
|
2017
|
|
|
||
5.875% senior unsecured notes due 2023:
|
|
|
|
|
|
|
||
Principal amount
|
$
|
600
|
|
|
$
|
600
|
|
|
Deferred financing costs
|
|
(5
|
)
|
|
|
(5
|
)
|
|
Unamortized discount
|
|
(3
|
)
|
|
|
(3
|
)
|
|
Total senior unsecured notes due 2023
|
|
592
|
|
|
|
592
|
|
|
Term loan due 2025
|
|
46
|
|
|
|
46
|
|
|
Borrowings under revolving credit facilities
|
|
—
|
|
|
|
144
|
|
|
Capital lease obligation
|
|
7
|
|
|
|
7
|
|
|
Total debt
|
|
645
|
|
|
|
789
|
|
|
Less: Current portion of 5.875% senior unsecured notes due 2023
|
|
(222
|
)
|
|
|
—
|
|
|
Less: Current portion of capital lease obligation
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Long-term debt, net of current portion
|
$
|
422
|
|
|
$
|
788
|
|
|
|
Pension Plans
|
|
OPEB Plans
|
||||||||||||||
(In millions)
|
2018
|
|
|
2017
|
|
|
|
2018
|
|
|
2017
|
|
|
||||
Change in benefit obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Benefit obligations as of beginning of year
|
$
|
5,474
|
|
|
$
|
5,196
|
|
|
|
$
|
172
|
|
|
$
|
172
|
|
|
Service cost
|
|
19
|
|
|
|
19
|
|
|
|
|
1
|
|
|
|
1
|
|
|
Interest cost
|
|
189
|
|
|
|
199
|
|
|
|
|
6
|
|
|
|
7
|
|
|
Actuarial (gain) loss
|
|
(102
|
)
|
|
|
156
|
|
|
|
|
(7
|
)
|
|
|
(7
|
)
|
|
Participant contributions
|
|
7
|
|
|
|
7
|
|
|
|
|
2
|
|
|
|
2
|
|
|
Plan amendment
|
|
—
|
|
|
|
—
|
|
|
|
|
5
|
|
|
|
(1
|
)
|
|
Special termination benefits
|
|
—
|
|
|
|
5
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Curtailments
|
|
—
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
4
|
|
|
Settlements
|
|
(25
|
)
|
|
|
(29
|
)
|
|
|
|
—
|
|
|
|
—
|
|
|
Divestiture
|
|
(84
|
)
|
|
|
—
|
|
|
|
|
(8
|
)
|
|
|
—
|
|
|
Benefits paid
|
|
(367
|
)
|
|
|
(365
|
)
|
|
|
|
(15
|
)
|
|
|
(13
|
)
|
|
Effect of foreign currency exchange rate changes
|
|
(337
|
)
|
|
|
285
|
|
|
|
|
(8
|
)
|
|
|
7
|
|
|
Benefit obligations as of end of year
|
|
4,774
|
|
|
|
5,474
|
|
|
|
|
148
|
|
|
|
172
|
|
|
Change in plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fair value of plan assets as of beginning of year
|
|
4,377
|
|
|
|
4,073
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Actual return on plan assets
|
|
(101
|
)
|
|
|
346
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Employer contributions
|
|
101
|
|
|
|
111
|
|
|
|
|
13
|
|
|
|
11
|
|
|
Participant contributions
|
|
7
|
|
|
|
7
|
|
|
|
|
2
|
|
|
|
2
|
|
|
Settlements
|
|
(25
|
)
|
|
|
(29
|
)
|
|
|
|
—
|
|
|
|
—
|
|
|
Divestiture
|
|
(58
|
)
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Benefits paid
|
|
(367
|
)
|
|
|
(365
|
)
|
|
|
|
(15
|
)
|
|
|
(13
|
)
|
|
Effect of foreign currency exchange rate changes
|
|
(282
|
)
|
|
|
234
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Fair value of plan assets as of end of year
|
|
3,652
|
|
|
|
4,377
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Funded status as of end of year
|
$
|
(1,122
|
)
|
|
$
|
(1,097
|
)
|
|
|
$
|
(148
|
)
|
|
$
|
(172
|
)
|
|
Amounts recognized in our Consolidated Balance Sheets consisted of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other assets
|
$
|
4
|
|
|
$
|
6
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Accounts payable and accrued liabilities
|
|
(3
|
)
|
|
|
(3
|
)
|
|
|
|
(14
|
)
|
|
|
(15
|
)
|
|
Pension and OPEB obligations
|
|
(1,123
|
)
|
|
|
(1,100
|
)
|
|
|
|
(134
|
)
|
|
|
(157
|
)
|
|
Net obligations recognized
|
$
|
(1,122
|
)
|
|
$
|
(1,097
|
)
|
|
|
$
|
(148
|
)
|
|
$
|
(172
|
)
|
|
|
Pension Plans
|
|
OPEB Plans
|
||||||||||||||||||||||
(In millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
||||||
Interest cost
|
$
|
189
|
|
|
$
|
199
|
|
|
$
|
215
|
|
|
|
$
|
6
|
|
|
$
|
7
|
|
|
$
|
7
|
|
|
Expected return on plan assets
|
|
(264
|
)
|
|
|
(254
|
)
|
|
|
(247
|
)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Amortization of prior service credits
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
|
(14
|
)
|
|
|
(14
|
)
|
|
|
(15
|
)
|
|
Amortization of actuarial losses (gains)
|
|
38
|
|
|
|
55
|
|
|
|
54
|
|
|
|
|
(5
|
)
|
|
|
(5
|
)
|
|
|
(5
|
)
|
|
Non-operating (credits) costs
|
|
(38
|
)
|
|
|
(1
|
)
|
|
|
21
|
|
|
|
|
(13
|
)
|
|
|
(12
|
)
|
|
|
(13
|
)
|
|
Service cost
|
|
19
|
|
|
|
19
|
|
|
|
20
|
|
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
|
Net periodic benefit (credits) costs before special events
|
|
(19
|
)
|
|
|
18
|
|
|
|
41
|
|
|
|
|
(12
|
)
|
|
|
(11
|
)
|
|
|
(12
|
)
|
|
Curtailments, settlements and other losses (gains)
|
|
3
|
|
|
|
7
|
|
|
|
—
|
|
|
|
|
(13
|
)
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
$
|
(16
|
)
|
|
$
|
25
|
|
|
$
|
41
|
|
|
|
$
|
(25
|
)
|
|
$
|
(12
|
)
|
|
$
|
(12
|
)
|
|
|
Pension Plans
|
|
OPEB Plans
|
||||||||||||||
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
Benefit obligations:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.8
|
%
|
|
3.6
|
%
|
|
3.8
|
%
|
|
3.9
|
%
|
|
3.6
|
%
|
|
3.9
|
%
|
Rate of compensation increase
|
2.1
|
%
|
|
2.1
|
%
|
|
2.5
|
%
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.6
|
%
|
|
3.8
|
%
|
|
4.2
|
%
|
|
3.6
|
%
|
|
3.9
|
%
|
|
4.4
|
%
|
Expected return on assets
|
6.5
|
%
|
|
6.3
|
%
|
|
6.2
|
%
|
|
|
|
|
|
|
|
|
|
Rate of compensation increase
|
2.1
|
%
|
|
2.5
|
%
|
|
2.5
|
%
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
||||||||||
|
Domestic Plan
|
Foreign Plans
|
|
Domestic Plan
|
Foreign Plans
|
||||||||
Health care cost trend rate assumed for next year
|
7.2
|
%
|
|
4.8
|
%
|
|
|
7.2
|
%
|
|
4.8
|
%
|
|
Rate to which the cost trend rate is assumed to decline (ultimate trend rate)
|
4.5
|
%
|
|
4.5
|
%
|
|
|
4.5
|
%
|
|
4.5
|
%
|
|
Year that the rate reaches the ultimate trend rate
|
2031
|
|
|
2031
|
|
|
|
2030
|
|
|
2028
|
|
|
|
1% Increase
|
|
1% Decrease
|
||||||||||||||||||||||||||
(In millions, except percentages)
|
Domestic Plan
|
Foreign Plans
|
|
Domestic Plan
|
Foreign Plans
|
||||||||||||||||||||||||
OPEB obligation
|
$
|
2
|
|
|
4
|
%
|
|
$
|
5
|
|
|
5
|
%
|
|
|
$
|
(2
|
)
|
|
(3
|
)%
|
|
$
|
(4
|
)
|
|
(4
|
)%
|
|
Service and interest costs
|
$
|
—
|
|
|
6
|
%
|
|
$
|
—
|
|
|
6
|
%
|
|
|
$
|
—
|
|
|
(5
|
)%
|
|
$
|
—
|
|
|
(5
|
)%
|
|
(In millions)
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
|||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|||
U.S. companies
|
$
|
725
|
|
|
$
|
725
|
|
|
$
|
—
|
|
|
Non-U.S. companies
|
|
946
|
|
|
|
946
|
|
|
|
—
|
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
|||
Corporate and government securities
|
|
1,021
|
|
|
|
71
|
|
|
|
950
|
|
|
Asset-backed securities
|
|
309
|
|
|
|
—
|
|
|
|
309
|
|
|
Cash and cash equivalents
|
|
216
|
|
|
|
216
|
|
|
|
—
|
|
|
Other plan assets, net
|
|
11
|
|
|
|
—
|
|
|
|
11
|
|
|
Total before investments measured at NAV
|
$
|
3,228
|
|
|
$
|
1,958
|
|
|
$
|
1,270
|
|
|
Investments measured at NAV
|
|
424
|
|
|
|
|
|
|
|
|
||
|
$
|
3,652
|
|
|
|
|
|
|
|
|
(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)
|
Pension Plans
(1)
|
OPEB Plans
|
||||||
2019
|
$
|
351
|
|
|
$
|
14
|
|
|
2020
|
|
344
|
|
|
|
13
|
|
|
2021
|
|
338
|
|
|
|
13
|
|
|
2022
|
|
333
|
|
|
|
12
|
|
|
2023
|
|
326
|
|
|
|
12
|
|
|
2024 - 2028
|
|
1,529
|
|
|
|
51
|
|
|
(1)
|
Benefit payments are expected to be paid from the plans’ net assets.
|
(In millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
United States
|
$
|
(90
|
)
|
|
$
|
(289
|
)
|
|
$
|
(227
|
)
|
|
Foreign
|
|
477
|
|
|
|
295
|
|
|
|
170
|
|
|
|
$
|
387
|
|
|
$
|
6
|
|
|
$
|
(57
|
)
|
|
(In millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
U.S. Federal and State:
|
|
|
|
|
|
|
|
|
|
|||
Current
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Deferred
|
|
—
|
|
|
|
2
|
|
|
|
(11
|
)
|
|
|
|
—
|
|
|
|
2
|
|
|
|
(11
|
)
|
|
Foreign:
|
|
|
|
|
|
|
|
|
|
|||
Current
|
|
12
|
|
|
|
(4
|
)
|
|
|
(5
|
)
|
|
Deferred
|
|
(164
|
)
|
|
|
(82
|
)
|
|
|
(3
|
)
|
|
|
|
(152
|
)
|
|
|
(86
|
)
|
|
|
(8
|
)
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|||
Current
|
|
12
|
|
|
|
(4
|
)
|
|
|
(5
|
)
|
|
Deferred
|
|
(164
|
)
|
|
|
(80
|
)
|
|
|
(14
|
)
|
|
|
$
|
(152
|
)
|
|
$
|
(84
|
)
|
|
$
|
(19
|
)
|
|
(In millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
Income (loss) before income taxes
|
$
|
387
|
|
|
$
|
6
|
|
|
$
|
(57
|
)
|
|
Income tax provision:
|
|
|
|
|
|
|
|
|
|
|||
Expected income tax (provision) benefit
|
|
(81
|
)
|
|
|
(1
|
)
|
|
|
12
|
|
|
Changes resulting from:
|
|
|
|
|
|
|
|
|
|
|||
U.S. federal tax rate change reconciliation
|
|
—
|
|
|
|
(1
|
)
|
|
|
8
|
|
|
Valuation allowance
(1)
|
|
59
|
|
|
|
247
|
|
|
|
(99
|
)
|
|
Enactment of change in tax rate
(2)
|
|
—
|
|
|
|
(368
|
)
|
|
|
—
|
|
|
Adjustments for unrecognized tax benefits
(3)
|
|
—
|
|
|
|
1
|
|
|
|
55
|
|
|
Foreign exchange
|
|
(29
|
)
|
|
|
6
|
|
|
|
(9
|
)
|
|
State income taxes, net of federal income tax benefit
|
|
4
|
|
|
|
10
|
|
|
|
6
|
|
|
Foreign tax rate differences
(4)
|
|
(89
|
)
|
|
|
23
|
|
|
|
11
|
|
|
Nondeductible expenses
(5)
|
|
(15
|
)
|
|
|
(2
|
)
|
|
|
1
|
|
|
Other, net
|
|
(1
|
)
|
|
|
1
|
|
|
|
(4
|
)
|
|
|
$
|
(152
|
)
|
|
$
|
(84
|
)
|
|
$
|
(19
|
)
|
|
(1)
|
During 2018, we recorded a decrease in our valuation allowance of
$59 million
, primarily related to our U.S. operations.
|
(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 an income tax benefit 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 2018, we recorded an income tax provision of
$65 million
, before an adjustment to valuation allowance, attributable to the GILTI inclusion.
|
(5)
|
Includes a
$13 million
increase to our income tax provision, before an adjustment to valuation allowance, for a nondeductible goodwill impairment charge in 2018.
|
(In millions)
|
2018
|
|
|
2017
|
|
|
||
Fixed assets
|
$
|
(32
|
)
|
|
$
|
(4
|
)
|
|
Other
|
|
(29
|
)
|
|
|
(23
|
)
|
|
Deferred income tax liabilities
|
|
(61
|
)
|
|
|
(27
|
)
|
|
Fixed assets
|
|
362
|
|
|
|
506
|
|
|
Pension and OPEB plans
|
|
328
|
|
|
|
330
|
|
|
Net operating loss carryforwards
|
|
586
|
|
|
|
619
|
|
|
Net capital loss carryforwards
|
|
13
|
|
|
|
12
|
|
|
Undeducted research and development expenditures
|
|
176
|
|
|
|
196
|
|
|
Tax credit carryforwards
|
|
93
|
|
|
|
119
|
|
|
Other
|
|
80
|
|
|
|
72
|
|
|
Deferred income tax assets
|
|
1,638
|
|
|
|
1,854
|
|
|
Valuation allowance
|
|
(701
|
)
|
|
|
(764
|
)
|
|
Net deferred income tax assets
|
$
|
876
|
|
|
$
|
1,063
|
|
|
Amounts recognized in our Consolidated Balance Sheets consisted of:
|
|
|
|
|
|
|
||
Deferred income tax assets
|
$
|
876
|
|
|
$
|
1,076
|
|
|
Deferred income tax liabilities
|
|
—
|
|
|
|
(13
|
)
|
|
Net deferred income tax assets
|
$
|
876
|
|
|
$
|
1,063
|
|
|
(In millions)
|
Related
Deferred Income Tax Asset |
Year of
Expiration
|
||||
Net operating loss carryforwards:
|
|
|
|
|
||
U.S. federal: $2,109
|
$
|
443
|
|
(1
|
)
|
2022 – 2037
|
U.S. state: $1,771
|
|
89
|
|
(1
|
)
|
2021 – 2038
|
Canadian federal and provincial (excluding Quebec): $86
|
|
16
|
|
|
2026 – 2038
|
|
Quebec:
$48
|
|
3
|
|
|
2026 – 2038
|
|
Other
|
|
35
|
|
|
2020 – 2027
|
|
|
$
|
586
|
|
|
|
|
Net capital loss carryforwards:
|
|
|
|
|
||
Canadian federal and provincial (excluding Quebec): $42
|
$
|
9
|
|
|
Indefinite
|
|
Quebec: $46
|
|
4
|
|
|
Indefinite
|
|
|
$
|
13
|
|
|
|
|
Undeducted research and development expenditures:
|
|
|
|
|
||
Canadian federal and provincial (excluding Quebec): $626
|
$
|
106
|
|
|
Indefinite
|
|
Quebec: $757
|
|
70
|
|
|
Indefinite
|
|
|
$
|
176
|
|
|
|
|
Tax credit carryforwards:
|
|
|
|
|
||
Canadian research and development, and other
|
$
|
72
|
|
|
2021 – 2038
|
|
U.S. state and other
|
|
21
|
|
(1
|
)
|
2019 – 2033
|
|
$
|
93
|
|
|
|
(1)
|
As of
December 31, 2018
, we had a valuation allowance against virtually all of our U.S. operations net deferred income tax assets.
|
(In millions)
|
2018
|
|
|
2017
|
|
|
||
Beginning of year
|
$
|
28
|
|
|
$
|
44
|
|
|
Decrease resulting from:
|
|
|
|
|
|
|
||
Enactment of change in tax rate
(1)
|
|
—
|
|
|
|
(15
|
)
|
|
Settlements with taxing authorities
|
|
—
|
|
|
|
(1
|
)
|
|
End of year
|
$
|
28
|
|
|
$
|
28
|
|
|
(1)
|
During 2017, previously unrecognized tax benefits decreased by
$15 million
due to the enactment of the TCJA.
|
|
Number of Units
|
|
|
|
||||||||
|
Equity-Based Awards
|
|
Liability-Based Awards
|
|
Total
|
Weighted-
Average Fair
Value at Grant
Date
|
||||||
Balance as of December 31, 2017
|
1,964,261
|
|
|
17,161
|
|
|
1,981,422
|
|
|
$
|
5.96
|
|
Granted
|
346,757
|
|
|
784,169
|
|
|
1,130,926
|
|
|
|
8.93
|
|
Vested
|
(724,856
|
)
|
|
(265,540
|
)
|
|
(990,396
|
)
|
|
|
7.20
|
|
Forfeited
|
(40,983
|
)
|
|
(16,828
|
)
|
|
(57,811
|
)
|
|
|
5.80
|
|
Balance as of December 31, 2018
|
1,545,179
|
|
|
518,962
|
|
|
2,064,141
|
|
|
$
|
7.00
|
|
|
2018
|
||
Expected volatility two year
|
57
|
%
|
|
Risk-free interest rate 2019
|
2.73
|
%
|
|
Risk-free interest rate 2020
|
2.92
|
%
|
|
Risk-free interest rate 2021
|
2.99
|
%
|
|
|
Number of Units
|
|
|
|
|||||||||
|
Equity-Based Awards
|
|
Liability-Based Awards
|
|
Total
|
Weighted-
Average Fair
Value at Grant
Date
|
|||||||
Balance as of December 31, 2017
|
2,204,102
|
|
|
387,294
|
|
|
2,591,396
|
|
|
$
|
6.94
|
|
|
Granted
|
468,954
|
|
|
598,351
|
|
|
1,067,305
|
|
|
|
9.01
|
|
|
Vested
|
(233,300
|
)
|
|
—
|
|
|
(233,300
|
)
|
|
|
18.61
|
|
|
Forfeited
|
(57,582
|
)
|
|
(9,713
|
)
|
|
(67,295
|
)
|
|
|
13.48
|
|
|
Balance as of December 31, 2018
|
2,382,174
|
|
|
975,932
|
|
|
3,358,106
|
|
|
$
|
6.66
|
|
|
(In millions)
|
Purchase Obligations
(1)
|
Operating
Leases
|
||||||
2019
|
$
|
78
|
|
|
$
|
9
|
|
|
2020
|
|
64
|
|
|
|
7
|
|
|
2021
|
|
63
|
|
|
|
6
|
|
|
2022
|
|
63
|
|
|
|
3
|
|
|
2023
|
|
42
|
|
|
|
2
|
|
|
Thereafter
|
|
30
|
|
|
|
7
|
|
|
|
$
|
340
|
|
|
$
|
34
|
|
|
(1)
|
Includes energy purchase obligations of
$256 million
through 2023 for certain of our pulp and paper mills.
|
(In millions)
|
Market
Pulp
(1)
|
Tissue
(2)(3)
|
Wood
Products
(4)
|
Newsprint
|
Specialty
Papers
|
Segment
Total
|
Corporate
and Other
|
Total
|
||||||||||||||||||||||||
Sales
|
||||||||||||||||||||||||||||||||
2018
|
$
|
1,085
|
|
|
$
|
130
|
|
|
$
|
823
|
|
|
$
|
907
|
|
|
$
|
811
|
|
|
$
|
3,756
|
|
|
$
|
—
|
|
|
$
|
3,756
|
|
|
2017
|
|
911
|
|
|
|
81
|
|
|
|
797
|
|
|
|
842
|
|
|
|
882
|
|
|
|
3,513
|
|
|
|
—
|
|
|
|
3,513
|
|
|
2016
|
|
836
|
|
|
|
89
|
|
|
|
596
|
|
|
|
1,009
|
|
|
|
1,015
|
|
|
|
3,545
|
|
|
|
—
|
|
|
|
3,545
|
|
|
Depreciation and amortization
|
||||||||||||||||||||||||||||||||
2018
|
$
|
27
|
|
|
$
|
15
|
|
|
$
|
32
|
|
|
$
|
66
|
|
|
$
|
47
|
|
|
$
|
187
|
|
|
$
|
25
|
|
|
$
|
212
|
|
|
2017
|
|
31
|
|
|
|
5
|
|
|
|
33
|
|
|
|
66
|
|
|
|
45
|
|
|
|
180
|
|
|
|
24
|
|
|
|
204
|
|
|
2016
|
|
37
|
|
|
|
5
|
|
|
|
31
|
|
|
|
74
|
|
|
|
45
|
|
|
|
192
|
|
|
|
14
|
|
|
|
206
|
|
|
Operating income (loss)
(5)
|
||||||||||||||||||||||||||||||||
2018
|
$
|
172
|
|
|
$
|
(30
|
)
|
|
$
|
169
|
|
|
$
|
74
|
|
|
$
|
40
|
|
|
$
|
425
|
|
|
$
|
(46
|
)
|
|
$
|
379
|
|
|
2017
|
|
79
|
|
|
|
(6
|
)
|
|
|
186
|
|
|
|
(23
|
)
|
|
|
(9
|
)
|
|
|
227
|
|
|
|
(185
|
)
|
|
|
42
|
|
|
2016
|
|
37
|
|
|
|
(10
|
)
|
|
|
69
|
|
|
|
(16
|
)
|
|
|
19
|
|
|
|
99
|
|
|
|
(117
|
)
|
|
|
(18
|
)
|
|
Capital expenditures
|
||||||||||||||||||||||||||||||||
2018
|
$
|
53
|
|
|
$
|
27
|
|
|
$
|
37
|
|
|
$
|
18
|
|
|
$
|
16
|
|
|
$
|
151
|
|
|
$
|
4
|
|
|
$
|
155
|
|
|
2017
|
|
12
|
|
|
|
101
|
|
|
|
9
|
|
|
|
6
|
|
|
|
20
|
|
|
|
148
|
|
|
|
16
|
|
|
|
164
|
|
|
2016
|
|
20
|
|
|
|
156
|
|
|
|
23
|
|
|
|
2
|
|
|
|
23
|
|
|
|
224
|
|
|
|
25
|
|
|
|
249
|
|
|
(1)
|
Inter-segment sales of
$39 million
,
$36 million
and
$33 million
, which are transacted at cost, were excluded from market pulp sales for the years ended
December 31, 2018
,
2017
and
2016
, respectively.
|
(2)
|
The operating results of our Calhoun tissue operations, previously recorded under “corporate and other,” have been recorded in our tissue segment since April 1, 2018.
|
(3)
|
Tissue capital expenditures in 2017 and 2016 consisted almost entirely of expenditures for the tissue manufacturing and converting facility in Calhoun.
|
(4)
|
Wood products sales to our joint ventures, which are transacted at arm’s length negotiated prices, were
$26 million
,
$20 million
and
$17 million
for the years ended
December 31, 2018
,
2017
and
2016
, respectively.
|
(5)
|
In the first quarter of 2018, we changed our presentation of operating income in accordance with FASB ASU 2017-07, to present only the service cost component of net periodic pension cost and OPEB cost in operating expenses (together with other employee compensation costs arising during the period). The non-operating pension and OPEB costs, presented under “corporate and other,” are reported separately outside any subtotal of operating income. Prior period amounts have been reclassified to conform to the 2018 presentation. See
Note 2. Summary of Significant Accounting Policies
– New accounting pronouncements adopted in 2018 – ASU 2017-07 “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” for more information.
|
(In millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|||
United States
|
$
|
2,581
|
|
|
$
|
2,387
|
|
|
$
|
2,464
|
|
|
Foreign countries:
|
|
|
|
|
|
|
|
|
|
|||
Canada
|
|
513
|
|
|
|
517
|
|
|
|
428
|
|
|
Mexico
|
|
148
|
|
|
|
126
|
|
|
|
126
|
|
|
Other countries
|
|
514
|
|
|
|
483
|
|
|
|
527
|
|
|
|
|
1,175
|
|
|
|
1,126
|
|
|
|
1,081
|
|
|
|
$
|
3,756
|
|
|
$
|
3,513
|
|
|
$
|
3,545
|
|
|
(In millions)
|
2018
|
|
|
2017
|
|
|
||
United States
|
$
|
650
|
|
|
$
|
790
|
|
|
Canada
|
|
1,103
|
|
|
|
1,143
|
|
|
|
$
|
1,753
|
|
|
$
|
1,933
|
|
|
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
|
||||||||||||||||||||
For the Year Ended December 31, 2018
|
||||||||||||||||||||
(In millions)
|
Parent
|
Guarantor
Subsidiaries
|
Non-guarantor
Subsidiaries
|
Consolidating
Adjustments
|
Consolidated
|
|||||||||||||||
Sales
|
$
|
—
|
|
|
$
|
3,123
|
|
|
$
|
2,468
|
|
|
$
|
(1,835
|
)
|
|
$
|
3,756
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of sales, excluding depreciation, amortization and distribution costs
|
|
—
|
|
|
|
2,856
|
|
|
|
1,521
|
|
|
|
(1,828
|
)
|
|
|
2,549
|
|
|
Depreciation and amortization
|
|
—
|
|
|
|
78
|
|
|
|
134
|
|
|
|
—
|
|
|
|
212
|
|
|
Distribution costs
|
|
—
|
|
|
|
158
|
|
|
|
320
|
|
|
|
(3
|
)
|
|
|
475
|
|
|
Selling, general and administrative expenses
|
|
26
|
|
|
|
64
|
|
|
|
75
|
|
|
|
—
|
|
|
|
165
|
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
120
|
|
|
|
1
|
|
|
|
—
|
|
|
|
121
|
|
|
Net gain on disposition of assets
|
|
—
|
|
|
|
(141
|
)
|
|
|
(4
|
)
|
|
|
—
|
|
|
|
(145
|
)
|
|
Operating (loss) income
|
|
(26
|
)
|
|
|
(12
|
)
|
|
|
421
|
|
|
|
(4
|
)
|
|
|
379
|
|
|
Interest expense
|
|
(87
|
)
|
|
|
(7
|
)
|
|
|
(12
|
)
|
|
|
59
|
|
|
|
(47
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
14
|
|
|
|
36
|
|
|
|
—
|
|
|
|
50
|
|
|
Other income, net
|
|
—
|
|
|
|
52
|
|
|
|
38
|
|
|
|
(85
|
)
|
|
|
5
|
|
|
Equity in income of subsidiaries
|
|
348
|
|
|
|
99
|
|
|
|
—
|
|
|
|
(447
|
)
|
|
|
—
|
|
|
Income before income taxes
|
|
235
|
|
|
|
146
|
|
|
|
483
|
|
|
|
(477
|
)
|
|
|
387
|
|
|
Income tax provision
|
|
—
|
|
|
|
—
|
|
|
|
(153
|
)
|
|
|
1
|
|
|
|
(152
|
)
|
|
Net income including noncontrolling interests
|
|
235
|
|
|
|
146
|
|
|
|
330
|
|
|
|
(476
|
)
|
|
|
235
|
|
|
Net income attributable to noncontrolling interests
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net income attributable to Resolute Forest Products Inc.
|
$
|
235
|
|
|
$
|
146
|
|
|
$
|
330
|
|
|
$
|
(476
|
)
|
|
$
|
235
|
|
|
Comprehensive income attributable to Resolute Forest Products Inc.
|
$
|
67
|
|
|
$
|
118
|
|
|
$
|
185
|
|
|
$
|
(303
|
)
|
|
$
|
67
|
|
|
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
|
|
—
|
|
|
|
2,707
|
|
|
|
1,476
|
|
|
|
(1,595
|
)
|
|
|
2,588
|
|
|
Depreciation and amortization
|
|
—
|
|
|
|
74
|
|
|
|
130
|
|
|
|
—
|
|
|
|
204
|
|
|
Distribution costs
|
|
—
|
|
|
|
159
|
|
|
|
291
|
|
|
|
(8
|
)
|
|
|
442
|
|
|
Selling, general and administrative expenses
|
|
30
|
|
|
|
68
|
|
|
|
72
|
|
|
|
—
|
|
|
|
170
|
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
71
|
|
|
|
11
|
|
|
|
—
|
|
|
|
82
|
|
|
Net gain on disposition of assets
|
|
—
|
|
|
|
—
|
|
|
|
(15
|
)
|
|
|
—
|
|
|
|
(15
|
)
|
|
Operating (loss) income
|
|
(30
|
)
|
|
|
(230
|
)
|
|
|
299
|
|
|
|
3
|
|
|
|
42
|
|
|
Interest expense
|
|
(95
|
)
|
|
|
(9
|
)
|
|
|
(13
|
)
|
|
|
68
|
|
|
|
(49
|
)
|
|
Non-operating pension and other postretirement benefit (costs) credits
|
|
—
|
|
|
|
(1
|
)
|
|
|
8
|
|
|
|
—
|
|
|
|
7
|
|
|
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
|
|
—
|
|
|
|
2,752
|
|
|
|
1,458
|
|
|
|
(1,500
|
)
|
|
|
2,710
|
|
|
Depreciation and amortization
|
|
—
|
|
|
|
78
|
|
|
|
128
|
|
|
|
—
|
|
|
|
206
|
|
|
Distribution costs
|
|
—
|
|
|
|
168
|
|
|
|
273
|
|
|
|
(1
|
)
|
|
|
440
|
|
|
Selling, general and administrative expenses
|
|
20
|
|
|
|
60
|
|
|
|
67
|
|
|
|
—
|
|
|
|
147
|
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
38
|
|
|
|
24
|
|
|
|
—
|
|
|
|
62
|
|
|
Net gain on disposition of assets
|
|
—
|
|
|
|
—
|
|
|
|
(2
|
)
|
|
|
—
|
|
|
|
(2
|
)
|
|
Operating (loss) income
|
|
(20
|
)
|
|
|
(189
|
)
|
|
|
197
|
|
|
|
(6
|
)
|
|
|
(18
|
)
|
|
Interest expense
|
|
(80
|
)
|
|
|
—
|
|
|
|
(10
|
)
|
|
|
52
|
|
|
|
(38
|
)
|
|
Non-operating pension and other postretirement benefit credits (costs)
|
|
—
|
|
|
|
6
|
|
|
|
(14
|
)
|
|
|
—
|
|
|
|
(8
|
)
|
|
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 BALANCE SHEET
|
||||||||||||||||||||
As of December 31, 2018
|
||||||||||||||||||||
(In millions)
|
Parent
|
Guarantor
Subsidiaries
|
Non-guarantor
Subsidiaries
|
Consolidating
Adjustments
|
Consolidated
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
301
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
304
|
|
|
Accounts receivable, net
|
|
—
|
|
|
|
301
|
|
|
|
148
|
|
|
|
—
|
|
|
|
449
|
|
|
Accounts receivable from affiliates
|
|
—
|
|
|
|
588
|
|
|
|
1,071
|
|
|
|
(1,659
|
)
|
|
|
—
|
|
|
Inventories, net
|
|
—
|
|
|
|
194
|
|
|
|
327
|
|
|
|
(13
|
)
|
|
|
508
|
|
|
Note, advance and interest receivable from parent
|
|
—
|
|
|
|
422
|
|
|
|
—
|
|
|
|
(422
|
)
|
|
|
—
|
|
|
Interest receivable from affiliate
|
|
—
|
|
|
|
4
|
|
|
|
—
|
|
|
|
(4
|
)
|
|
|
—
|
|
|
Other current assets
|
|
—
|
|
|
|
15
|
|
|
|
28
|
|
|
|
—
|
|
|
|
43
|
|
|
Total current assets
|
|
—
|
|
|
|
1,825
|
|
|
|
1,577
|
|
|
|
(2,098
|
)
|
|
|
1,304
|
|
|
Fixed assets, net
|
|
—
|
|
|
|
523
|
|
|
|
992
|
|
|
|
—
|
|
|
|
1,515
|
|
|
Amortizable intangible assets, net
|
|
—
|
|
|
|
2
|
|
|
|
48
|
|
|
|
—
|
|
|
|
50
|
|
|
Deferred income tax assets
|
|
—
|
|
|
|
1
|
|
|
|
872
|
|
|
|
3
|
|
|
|
876
|
|
|
Notes receivable from parent
|
|
—
|
|
|
|
657
|
|
|
|
—
|
|
|
|
(657
|
)
|
|
|
—
|
|
|
Note receivable from affiliate
|
|
—
|
|
|
|
107
|
|
|
|
—
|
|
|
|
(107
|
)
|
|
|
—
|
|
|
Investments in consolidated subsidiaries and affiliates
|
|
4,119
|
|
|
|
2,205
|
|
|
|
—
|
|
|
|
(6,324
|
)
|
|
|
—
|
|
|
Other assets
|
|
—
|
|
|
|
126
|
|
|
|
64
|
|
|
|
—
|
|
|
|
190
|
|
|
Total assets
|
$
|
4,119
|
|
|
$
|
5,446
|
|
|
$
|
3,553
|
|
|
$
|
(9,183
|
)
|
|
$
|
3,935
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts payable and accrued liabilities
|
$
|
7
|
|
|
$
|
170
|
|
|
$
|
250
|
|
|
$
|
—
|
|
|
$
|
427
|
|
|
Current portion of long-term debt
|
|
222
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
223
|
|
|
Accounts payable to affiliates
|
|
592
|
|
|
|
1,112
|
|
|
|
—
|
|
|
|
(1,704
|
)
|
|
|
—
|
|
|
Note, advance and interest payable to subsidiaries
|
|
422
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(422
|
)
|
|
|
—
|
|
|
Interest payable to affiliate
|
|
—
|
|
|
|
—
|
|
|
|
4
|
|
|
|
(4
|
)
|
|
|
—
|
|
|
Total current liabilities
|
|
1,243
|
|
|
|
1,283
|
|
|
|
254
|
|
|
|
(2,130
|
)
|
|
|
650
|
|
|
Long-term debt, net of current portion
|
|
370
|
|
|
|
52
|
|
|
|
—
|
|
|
|
—
|
|
|
|
422
|
|
|
Notes payable to subsidiaries
|
|
657
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(657
|
)
|
|
|
—
|
|
|
Note payable to affiliate
|
|
—
|
|
|
|
—
|
|
|
|
107
|
|
|
|
(107
|
)
|
|
|
—
|
|
|
Pension and other postretirement benefit obligations
|
|
—
|
|
|
|
342
|
|
|
|
915
|
|
|
|
—
|
|
|
|
1,257
|
|
|
Other liabilities
|
|
6
|
|
|
|
21
|
|
|
|
44
|
|
|
|
—
|
|
|
|
71
|
|
|
Total liabilities
|
|
2,276
|
|
|
|
1,698
|
|
|
|
1,320
|
|
|
|
(2,894
|
)
|
|
|
2,400
|
|
|
Total equity
|
|
1,843
|
|
|
|
3,748
|
|
|
|
2,233
|
|
|
|
(6,289
|
)
|
|
|
1,535
|
|
|
Total liabilities and equity
|
$
|
4,119
|
|
|
$
|
5,446
|
|
|
$
|
3,553
|
|
|
$
|
(9,183
|
)
|
|
$
|
3,935
|
|
|
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 STATEMENT OF CASH FLOWS
|
||||||||||||||||||||
For the Year Ended December 31, 2018
|
||||||||||||||||||||
(In millions)
|
Parent
|
Guarantor
Subsidiaries |
Non-guarantor
Subsidiaries |
Consolidating
Adjustments |
Consolidated
|
|||||||||||||||
Net cash provided by operating activities
|
$
|
—
|
|
|
$
|
334
|
|
|
$
|
101
|
|
|
$
|
—
|
|
|
$
|
435
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash invested in fixed assets
|
|
—
|
|
|
|
(51
|
)
|
|
|
(104
|
)
|
|
|
—
|
|
|
|
(155
|
)
|
|
Disposition of assets
|
|
—
|
|
|
|
335
|
|
|
|
1
|
|
|
|
—
|
|
|
|
336
|
|
|
Decrease in countervailing duty cash deposits on supercalendered paper, net
|
|
—
|
|
|
|
48
|
|
|
|
—
|
|
|
|
—
|
|
|
|
48
|
|
|
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber
|
|
—
|
|
|
|
(77
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(77
|
)
|
|
Increase in countervailing duty cash deposits on uncoated groundwood paper
|
|
—
|
|
|
|
(6
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(6
|
)
|
|
Advance to parent
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
Increase in notes receivable from affiliate, net
|
|
—
|
|
|
|
(135
|
)
|
|
|
—
|
|
|
|
135
|
|
|
|
—
|
|
|
Net cash provided by (used in) investing activities
|
|
—
|
|
|
|
113
|
|
|
|
(103
|
)
|
|
|
136
|
|
|
|
146
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net repayments under revolving credit facilities
|
|
—
|
|
|
|
(144
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(144
|
)
|
|
Payment of special dividend
|
|
(136
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(136
|
)
|
|
Payments of financing and credit facility fees
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
Advance from subsidiary
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
Increase (decrease) in notes payable to affiliate
|
|
136
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
(135
|
)
|
|
|
—
|
|
|
Net cash used in financing activities
|
|
—
|
|
|
|
(144
|
)
|
|
|
(1
|
)
|
|
|
(136
|
)
|
|
|
(281
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents, and restricted cash
|
|
—
|
|
|
|
—
|
|
|
|
(4
|
)
|
|
|
—
|
|
|
|
(4
|
)
|
|
Net increase (decrease) in cash and cash equivalents, and restricted cash
|
|
—
|
|
|
|
303
|
|
|
|
(7
|
)
|
|
|
—
|
|
|
|
296
|
|
|
Cash and cash equivalents, and restricted cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Beginning of year
|
|
—
|
|
|
|
3
|
|
|
|
46
|
|
|
|
—
|
|
|
|
49
|
|
|
End of year
|
$
|
—
|
|
|
$
|
306
|
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
345
|
|
|
Cash and cash equivalents, and restricted cash at year end:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
301
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
304
|
|
|
Restricted cash
|
|
—
|
|
|
|
5
|
|
|
|
36
|
|
|
|
—
|
|
|
|
41
|
|
|
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
|
)
|
|
Decrease in notes receivable from affiliate, net
|
|
—
|
|
|
|
22
|
|
|
|
—
|
|
|
|
(22
|
)
|
|
|
—
|
|
|
Net cash used in investing activities
|
|
—
|
|
|
|
(142
|
)
|
|
|
(27
|
)
|
|
|
(22
|
)
|
|
|
(191
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net borrowings under revolving credit facilities
|
|
—
|
|
|
|
19
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19
|
|
|
Acquisition of noncontrolling interest in Donohue Malbaie Inc.
|
|
—
|
|
|
|
—
|
|
|
|
(15
|
)
|
|
|
—
|
|
|
|
(15
|
)
|
|
Payments of debt
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
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, and restricted cash
|
|
—
|
|
|
|
—
|
|
|
|
6
|
|
|
|
—
|
|
|
|
6
|
|
|
Net increase (decrease) in cash and cash equivalents, and restricted cash
|
|
—
|
|
|
|
1
|
|
|
|
(25
|
)
|
|
|
—
|
|
|
|
(24
|
)
|
|
Cash and cash equivalents, and restricted cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Beginning of year
|
|
—
|
|
|
|
2
|
|
|
|
71
|
|
|
|
—
|
|
|
|
73
|
|
|
End of year
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
46
|
|
|
$
|
—
|
|
|
$
|
49
|
|
|
Cash and cash equivalents, and restricted cash at year end:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
Restricted cash
|
|
—
|
|
|
|
—
|
|
|
|
43
|
|
|
|
—
|
|
|
|
43
|
|
|
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, and restricted cash
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
|
Net decrease in cash and cash equivalents, and restricted cash
|
|
—
|
|
|
|
(11
|
)
|
|
|
(11
|
)
|
|
|
—
|
|
|
|
(22
|
)
|
|
Cash and cash equivalents, and restricted cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Beginning of year
|
|
—
|
|
|
|
13
|
|
|
|
82
|
|
|
|
—
|
|
|
|
95
|
|
|
End of year
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
71
|
|
|
$
|
—
|
|
|
$
|
73
|
|
|
Cash and cash equivalents, and restricted cash at year end:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
35
|
|
|
Restricted cash
|
|
—
|
|
|
|
—
|
|
|
|
38
|
|
|
|
—
|
|
|
|
38
|
|
|
|
2018
|
|||||||||||||||||||
(In millions, except per share amounts)
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
Year
|
|||||||||||||||
Sales
|
$
|
874
|
|
|
$
|
976
|
|
|
$
|
974
|
|
|
$
|
932
|
|
|
$
|
3,756
|
|
|
Operating income
|
|
48
|
|
|
|
121
|
|
|
|
135
|
|
|
|
75
|
|
|
|
379
|
|
|
Net income attributable to Resolute Forest Products Inc.
|
|
10
|
|
|
|
72
|
|
|
|
117
|
|
|
|
36
|
|
|
|
235
|
|
|
Basic net income per share attributable to Resolute Forest Products Inc. common shareholders
|
|
0.11
|
|
|
|
0.79
|
|
|
|
1.28
|
|
|
|
0.39
|
|
|
|
2.57
|
|
|
Diluted net income per share attributable to Resolute Forest Products Inc. common shareholders
|
|
0.11
|
|
|
|
0.77
|
|
|
|
1.25
|
|
|
|
0.38
|
|
|
|
2.52
|
|
|
|
2017
|
|||||||||||||||||||
(In millions, except per share amounts)
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
Year
|
|||||||||||||||
Sales
|
$
|
872
|
|
|
$
|
858
|
|
|
$
|
885
|
|
|
$
|
898
|
|
|
$
|
3,513
|
|
|
Operating (loss) income
|
|
(9
|
)
|
|
|
(48
|
)
|
|
|
46
|
|
|
|
53
|
|
|
|
42
|
|
|
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
|
)
|
|
•
|
On January 3, 2019, we repurchased
$225 million
in aggregate principal of the 2023 Notes, as further discussed in
Note 11. Long-Term Debt
– Debt instruments – 2023 Notes.
|
/s/ PricewaterhouseCoopers LLP / s.r.l / s.e.n.c.r.l.
(1)
|
Montréal, Québec, Canada
|
March 1, 2019
|
(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
1,065,021
stock options and shares issuable upon the settlement of
1,804,409
RSUs and DSUs issued under the Incentive Plan, at a rate of one share per unit. Also includes shares issuable upon the settlement of
2,382,174
PSUs issued under the Incentive Plan at the maximum payout rate (
3,358,265
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).
|
Exhibit No.
|
Description
|
10.1*
|
|
|
|
†10.2*
|
|
|
|
†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*
|
Exhibit No.
|
Description
|
|
|
†10.17*
|
|
|
|
†10.18*
|
|
|
|
†10.19*
|
|
|
|
†10.20*
|
|
|
|
†10.21*
|
|
|
|
10.22*
|
|
|
|
10.23*
|
|
|
|
†10.24*
|
|
|
|
†10.25*
|
|
|
|
†10.26*
|
|
|
|
†10.27*
|
|
|
|
†10.28*
|
|
|
|
†10.29*
|
|
|
|
†10.30*
|
|
|
|
Exhibit No.
|
Description
|
†10.31*
|
|
|
|
†10.32*
|
|
|
|
†10.33*
|
|
|
|
†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**
|
|
|
|
99.1*
|
|
|
|
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.
|
|
|
#
|
Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the SEC upon request; provided, however, that the registrant may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act, as amended, for any schedules or exhibits so furnished.
|
|
|
†
|
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 Income (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, 2019
|
By:
|
/s/ Yves Laflamme
|
|
|
Yves Laflamme
|
|
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Yves Laflamme
|
|
President and Chief Executive Officer
|
|
March 1, 2019
|
Yves Laflamme
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Bradley P. Martin*
|
|
Chairman, Director
|
|
March 1, 2019
|
Bradley P. Martin
|
|
|
|
|
|
|
|
|
|
/s/ Remi G. Lalonde
|
|
Senior Vice President and Chief Financial Officer
|
|
March 1, 2019
|
Remi G. Lalonde
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Hugues Dorban
|
|
Vice President and Chief Accounting Officer
|
|
March 1, 2019
|
Hugues Dorban
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Randall C. Benson*
|
|
Director
|
|
March 1, 2019
|
Randall C. Benson
|
|
|
|
|
|
|
|
|
|
/s/ Suzanne Blanchet*
|
|
Director
|
|
March 1, 2019
|
Suzanne Blanchet
|
|
|
|
|
|
|
|
|
|
/s/ Jennifer C. Dolan*
|
|
Director
|
|
March 1, 2019
|
Jennifer C. Dolan
|
|
|
|
|
|
|
|
|
|
/s/ Richard D. Falconer*
|
|
Director
|
|
March 1, 2019
|
Richard D. Falconer
|
|
|
|
|
|
|
|
|
|
/s/ Jeffrey A. Hearn*
|
|
Director
|
|
March 1, 2019
|
Jeffrey A. Hearn
|
|
|
|
|
|
|
|
|
|
/s/ Alain Rhéaume*
|
|
Director
|
|
March 1, 2019
|
Alain Rhéaume
|
|
|
|
|
|
|
|
|
|
/s/ Michael S. Rousseau*
|
|
Director
|
|
March 1, 2019
|
Michael S. Rousseau
|
|
|
|
|
|
By:
|
/s/ Remi G. Lalonde
|
|
|
Remi G. Lalonde, Attorney-in-Fact
|
Subject:
|
Terms and Conditions of Employment with Resolute Forest Products Inc.
|
(a)
|
in the course of your employment with the Company, you had access to and were 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 Company or its Affiliates (within the meaning of Rule 12b
‑
2 of the General Rules and Regulations under the Securities Exchange Act of 1934), 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 Company and its Affiliates (collectively, “Confidential Information”), the disclosure of any of which to competitors of the Company or of any of its Affiliates or to the general public, or the use of any of which by you
|
(b)
|
in the course of your employment with the Company, you have been a representative of the Company and its Affiliates to its and their customers, clients and suppliers and as such have had significant responsibility for maintaining and enhancing the goodwill of the Company and its Affiliates with such customers, clients and suppliers and would not have, except by virtue of your employment with the Company, developed a close and direct relationship with the customers, clients and suppliers of the Company and its Affiliates; and
|
(c)
|
the right to maintain the confidentiality of the Confidential Information, the right to preserve the goodwill of the Company and its Affiliates and the right to the benefit of the contacts and connections previously developed by you with prospective clients, customers and others and any relationships that will be developed between you and the customers, clients and suppliers of the Company and its Affiliates by virtue of your employment with the Company constitute proprietary rights of the Company and its Affiliates which the Company and its Affiliates are entitled to protect.
|
Subject:
|
Terms and Conditions of Employment between Rémi Lalonde and Resolute Forest Products Inc.
|
Performance Measure
|
Weighting
|
Strategic Objective
|
20%
|
Total Shareholder Return
|
50%
|
Return on Capital
|
30%
|
EBITDA target for tissue business (Calhoun), to be achieved in 2021
|
$[***]
|
$[***]
|
$[***]
|
$[***]
|
$[***]
|
Payout
|
0%
|
50%
|
100%
|
150%
|
200%
|
TSR vs. Peers During the Performance Period
|
20 percentage points below median
|
10 percentage points below median
|
Median
|
10 percentage points above median
|
20 percentage points above median
|
Payout
|
0%
|
50%
|
100%
|
150%
|
200%
|
Original internal rate of return (“IRR”) vs. Actual IRR
|
<
80% of original IRR
|
90% of original IRR
|
100% of original IRR
|
110% of original IRR
|
>
120% of original IRR
|
Payout
|
0%
|
50%
|
100%
|
150%
|
200%
|
Vesting Date
|
Percentage of RSU Vested
|
December 1 of first calendar year following the calendar year that includes the
Date of Grant |
25% (rounded to the nearest whole)
|
First anniversary of the first Vesting Date
|
25% (rounded to the nearest whole)
|
Second anniversary of the first Vesting Date
|
25% (rounded to the nearest whole)
|
Third anniversary of the first Vesting Date
|
Remaining 25%
|
Name
|
Jurisdiction of Incorporation
|
3284649 Nova Scotia Company
|
Nova Scotia
|
9192-8515 Québec Inc.
(1)
|
Québec
|
9340939 Canada Inc.
|
Canada
|
AbiBow Recycling LLC
|
Delaware
|
Abitibi Consolidated Europe
|
Belgium
|
Abitibi Consolidated Sales LLC
|
Delaware
|
AbitibiBowater Canada Inc.
|
Canada
|
Accurate Paper Fleet, LLC
|
Delaware
|
Accurate Paper Holdings, LLC
|
Delaware
|
Atlas Paper Management, LLC
|
Delaware
|
Atlas Paper Mills, LLC
|
Delaware
|
Atlas Southeast Papers, Inc.
|
Delaware
|
Atlas Tissue Holdings, Inc.
|
Delaware
|
Augusta Newsprint Holding LLC
|
Delaware
|
Bowater Asia Pte. Ltd.
|
Singapore
|
Bowater Canada Finance Corporation
|
Nova Scotia
|
Bowater Canadian Holdings Incorporated
|
Nova Scotia
|
Bowater Canadian Limited
|
Canada
|
Bowater LaHave Corporation
|
Nova Scotia
|
Bowater Newsprint South LLC
|
Delaware
|
Bowater Nuway Mid-States Inc.
|
Delaware
|
Bowater S. America Ltda.
|
Brazil
|
Bowater South American Holdings Incorporated
|
Delaware
|
Bowater-Korea Ltd.
|
South Korea
|
Calhoun Newsprint Company
|
Delaware
|
Calhoun Note Holdings AT LLC
|
Delaware
|
Calhoun Note Holdings TI LLC
|
Delaware
|
Donohue Corp.
|
Delaware
|
Donohue Malbaie ULC
|
Nova Scotia
|
FD Powerco LLC
|
West Virginia
|
Fibrek Canada ULC
|
Nova Scotia
|
Fibrek General Partnership
|
Québec
|
Fibrek International Inc.
|
Canada
|
Fibrek Recycling U.S. Inc.
|
Delaware
|
Fibrek U.S. Inc.
|
Delaware
|
Forest Products Mauricie L.P.
(1)
|
Québec
|
GLPC Residual Management, LLC
|
Delaware
|
Lake Superior Forest Products Inc.
|
Delaware
|
Resolute FP Augusta LLC
|
Delaware
|
Resolute FP Canada Inc.
|
Canada
|
Resolute FP Florida Inc.
|
Delaware
|
Resolute FP Sub 1 Inc.
|
Delaware
|
Resolute FP US Inc.
|
Delaware
|
Resolute Growth Canada Inc.
|
Canada
|
Resolute Growth US LLC
|
Delaware
|
Resolute Tissue LLC
|
Delaware
|
RFPG Holding Inc.
|
Canada
|
RFPG L.P.
|
Québec
|
SFK Pulp Finco Inc.
|
Canada
|
The International Bridge and Terminal Company
|
Canada/Special Act
|
(1)
|
93.2 percent owned.
|
/s/ Bradley P. Martin
|
|
/s/ Richard D. Falconer
|
Bradley P. Martin
Chairman of the Board |
|
Richard D. Falconer
Director |
|
|
|
/s/ Randall C. Benson
|
|
/s/ Jeffrey A. Hearn
|
Randall C. Benson
Director |
|
Jeffrey A. Hearn
Director |
|
|
|
/s/ Suzanne Blanchet
|
|
/s/ Alain Rhéaume
|
Suzanne Blanchet
Director |
|
Alain Rhéaume
Director |
|
|
|
/s/ Jennifer C. Dolan
|
|
/s/ Michael S. Rousseau
|
Jennifer C. Dolan
Director |
|
Michael S. Rousseau
Director |
1.
|
I have reviewed this annual report on Form 10-K for the year ended
December 31, 2018
of RESOLUTE FOREST PRODUCTS INC.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
a)
|
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;
|
b)
|
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;
|
c)
|
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
|
d)
|
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
|
5.
|
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):
|
a)
|
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
|
b)
|
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.
|
Date: March 1, 2019
|
|
/s/ Yves Laflamme
|
|
Yves Laflamme
President and Chief Executive Officer
|
|
1.
|
I have reviewed this annual report on Form 10-K for the year ended
December 31, 2018
of RESOLUTE FOREST PRODUCTS INC.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
a)
|
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;
|
b)
|
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;
|
c)
|
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
|
d)
|
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
|
5.
|
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):
|
a)
|
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
|
b)
|
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.
|
Date: March 1, 2019
|
|
/s/ Remi G. Lalonde
|
|
Remi G. Lalonde
Senior Vice President and Chief Financial Officer
|
|
March 1, 2019
|
|
/s/ Yves Laflamme
|
|
|
Name: Yves Laflamme
Title: President and Chief Executive Officer
|
March 1, 2019
|
|
/s/ Remi G. Lalonde
|
|
|
Name: Remi G. Lalonde
Title: Senior Vice President and Chief Financial Officer
|