Raw Materials

We strive to improve our forest management and wood fiber procurement practices and we encourage our wood and fiber suppliers to demonstrate continual improvement in forest resource management, wood and fiber procurement, and third-party certification.

We use various chemicals in our pulp, tissue, and paper manufacturing operations including caustic soda, sodium chlorate, hydrogen peroxide, liquid sodium hydrosulfite, and sulfuric acid.

We also have one hydroelectric generation and transmission network (Hydro-Saguenay in the Saguenay – Lac-Saint-Jean region of Quebec), which consists of seven generating stations with 170 MW of capacity and generation of 1,110 GWh.capacity. The water rights agreements required to operate some of these facilities typically range from 10 to 25 years and, subject to certain conditions, are generally renewable for additional terms. 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 the other facilities, the right to generate hydroelectricity stems from our ownership of the riverbed on which these facilities are located.

Competition

We are an integrated manufacturer of tissue products and compete with several major competitors in the North American tissue market. The key competitive attributes in this market include price, product quality, service, and customer relationships. Competition is also significantly affected by geographic location, as freight costs represent a material portion of the costs. We compete with branded and private-label products within North American products.America.

Based on market interest, we offer a number of our products, particularly market pulp and wood products with specific designations to one or more globally recognized forest management and chain of custody standards. Our ability to conform to new or existing guidelines for certification depends on a number of factors, many of which are beyond our control, such as: changes to the standards or the interpretation or the application of the standards; the adequacy of government-implemented conservation measures; and the existence of territorial disputes between First Nations and governments. If we are unable to offer certified products, or to meet commitments to supply certified product, it could adversely affect the marketability of our products and our ability to compete with other producers.

Employees

While we intend to renew collective agreements, there can be no assurance that we will be able to renew agreements on satisfactory terms, or that we will maintain continuously satisfactory agreements with all of our unionized employees. Should we be unable to do so, it could result in strikes, work stoppages, or disturbances by affected employees, which could cause us to experience a disruption of operations and affect our business, financial condition, or results of operations.

Trademarks

We have registrations or pending applications for our key trademarks “RESOLUTE” and “resolute Forest Products & Design” in the countries of our principal markets, as well as “RESOLUTE FOREST PRODUCTS”, “R Design”, and “R Design”“RESOLUTE TISSUE” in Canada and the United States,U.S., and “RÉSOLU” and “Produits forestiers résolu & Design” in Canada. We consider our interest in these trademarks to be important and necessary to the conduct of our business. The current registrations of these trademarks are effective for various periods of time and may be renewed periodically, provided that we, as the registered owner, comply with all applicable renewal requirements.

Internet Availability of Information

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this Form 10-K and in other documents we file with the SEC, you should carefully consider the following factors, amongst others, which could materially affect our business, financial condition, or future results.results, reputation as well as the market price of our securities. In particular, the risks described below could cause actual events to differ materially from those contemplated in the forward-looking statements in this Form 10-K. The risks described below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially affect our business, financial condition or future results.

Strategic Risk

Strategic risk relatesrisks relate to the Company’sour future business plans and strategies, including the risks associated with:with the global macro-environment in which we operate;operate, trends in our industry;industry, demand for our products;products, competitive threats;threats, product innovation; our planning,innovation, public policy developments, changes to consumption habits, resource allocation, and strategic initiatives, including mergers and acquisitions, dispositions, and restructuring activity; and public policy.activity.

Trends in non-print media are expected to continue to adversely affect demand for traditional print media, including our productsnewsprint and those ofspecialty papers, and our customers.customers’ products. Neither the timing nor the extent of these trends can be predicted with certainty. Our newspaper, magazine, book and catalog publishing customers could increase their use of, and compete with, non-print media, including video and audio-based advertising and data transmission, non-print storage technologies, and non-print communication platforms such as websites and social media, which could further reduce their consumption of newsprint, commercial printing papers or other products we manufacture. The demand for some of our paper products has weakened significantly over the past decade. For example, over the 10 years ended December 31, 2016,2019, according to industry statistics, North American newsprint demand fell by 65%60%. This trend, which similarly affects our specialty papers, couldis expected to continue as a result of developments in non-print media, lower North American newspaper circulation, weaker paper-based advertising, grade substitution and conservation measures taken by publishers, retailers, and retailers.consumers.

We compete with numerous forest products companies, some of which have greater financial resources than we do. The trend toward consolidation in the forest products industry has led to the formation of sizable global producers that have greater flexibility in pricing and financial resources for marketing, investment, research and development, innovation, and expansion than we do. Because the markets for our products are all highly competitive, actions by competitors can affect our ability to compete and the volatility of prices at which our products are sold.

The forest products industry is capital intensive, and requires significant investment to remain competitive. Some of our competitors may be lower-cost producers in some of the businesses in which we operate. In particular, the sizable low-cost hardwood and softwood grade pulp capacity in South America, which continues to grow as a result of ongoing investment and whose costs are thought to be very competitive, and the actions those mills take to gain market share, could continue to adversely affect our competitive position in similar grades. This in turn could affectimpact our sales and cash flows, and push us to

Based on market interest, we offer a number of our products, particularlyincluding some paper grades, some grades of market pulp, wood products, and woodtissue products with specific designations to one or more globally recognized forest management, and chain of custody standards.standards and product specifications to meet customers’ requirements. Our ability to conform to new or existing guidelines for certification depends on a number of factors, many of which are beyond our control, such as: changes to the

standards or the interpretation or the application of the standards; the adequacy of government-implemented conservation measures; and the existence of territorial disputes between First Nations and governments. If we are unable to offer certified products, or to meet commitments to supply certified product or meet the product specifications of our customers, it could adversely affect the marketability of our products and our ability to compete with other producers.

Our corporate strategy includes,is focused on continuing to transform the one hand,Company away from mature markets and declining products toward a gradual retreat from certain paper grades,more profitable and onsustainable organization over the other, using our strong financial position to act on opportunities to diversify and grow.long run. This strategy has three core themes:includes maximizing value generation from structurally declining paper, growing in pulp and wood products, and integrating our pulp into value-added quality tissue.tissue, and investing in product innovation, while maintaining a disciplined approach to capital allocation.

The implementation of our corporate strategy is complicated,subject to uncertainty and could require significant capital investments, and involves significant capital allocation and financing decisions as well as a substantial number of mills, machines, and personnel.investments. In addition, strategic initiatives could have unintended consequences, including, for example, a loss of certain pulp customers if our tissue segment becomes competitive with tissue products sold by those customers. To the extent we are unsuccessful in implementing our strategy or our efforts do not achieve the anticipated outcomes, our results of operations and cash flows may be adversely affected.

As part of our general strategic objectives,corporate strategy, we pursue acquisitions, divestitures, and other strategic transactions and projects such as our acquisition of Atlas Tissue and our tissue project at Calhoun, to complement, expand or optimize our business.business, such as our entry into wood manufacturing in the U.S., and tissue production and sales. In connection with any acquisition, divestiture, strategic transaction or project, we may not successfully integrate an acquired business, or assets, technologies, processes, controls, policies, and operations with ours or realize some or all of the anticipated benefits and synergies of the acquisition, divestiture, strategic transaction or project. In connection with such transactions, we may face challenges associated with entering into a new market, production location, or product category, such as our entry into wood manufacturing in the U.S., and tissue production and sales. We may also face issues with the separation of processes and loss of synergies following the divestiture of businesses. In addition, we may not be able to successfully negotiate potential acquisitions, divestitures, strategic transactions or projects that we identify, or may not be able to obtain financing that may be needed. Future acquisitions could result in potentially dilutive issuances of equity securities and the incurrence of debt and contingent liabilities, and substantial goodwill. The negotiation of any transaction and its completion may be complex, costly, and time consuming. IfTo the extent we are unsuccessful in implementing our corporate strategy or our efforts do not successfully integrate an acquired business withachieve the anticipated outcomes, our own, or if we fail to realize the expected benefits of an acquisition, divestiture, strategic transaction or project, our financial position, results of operations and cash flows couldmay be materially and adversely affected.

We manufacture products in the United StatesU.S. and Canada, and we sell products throughout the world. The economic and political policies of each country and region have a significant impact on our costs and the prices of, and demand for, our products. Changes in regional economies and economic policies includingcan affect demand for our products, manufacturing and distribution costs, pricing, sales volume, and the availability or cost of insurance. These changes, in turn, can affect our results of operations. Changes to regional economies and economic policies that can bring about such effects include, among others, changes in the terms of, or member countries that are parties to, bilateral and multi-lateral trade agreements and arrangements, limitations on the ability of potential customers to import products or obtain foreign currency for payment of imported products, orand political and economic instability, including pandemics, significant civil unrest, acts of war or terrorist activities, or unstable or unpredictable governments in countries in which we operate or trade, acts of war or terrorist activities, can affect demand for and the cost of manufacturing and distributing our products, pricing and sales volume, directly affecting our results of operations. These changes could also affect the availability or cost of insurance.trade.

Our operations and performance depend significantly on worldwide economic conditions. During periods of weak or weakening global economic conditions, we would expect any increase in unemployment or lower gross domestic product growth rates to adversely affect demand for our products as customers for our productscustomers delay or reduce their expenditures. DuringFor example, during an economic downturn, end consumers may reduce newspaper and magazine subscriptions as a direct result of their financial circumstances, contributing to lower demand for our products by our customers. Advertising demand in printed magazines and newspapers including classified advertisements, may also decline. Lower demand for print advertisements leads to fewer or smaller pages in, and may lead to less frequent publication of, printed newspapers, magazines and other

An economic downturn in the U.S. mayor Canada could also negatively affect the U.S. or Canadian housing industry, which is a significant driver forof demand offor our lumber and other wood-based products. For example, a decline in U.S. housing starts maycould create a low level of primary demand for our lumber and other wood-based products, which we would expect to result in our

wood products business operating at a lower level until there is a meaningful recovery in new residential construction demand. In addition, with less lumber demand, sawmills could generate lessfewer wood chips that we use in our pulp and paper mills, which leads the pulp and papercould lead those mills to increase their supply from the open market, where prices can fluctuate with market conditions. We wouldcould also have less wood residue to use internally, which would increase our fossil fuel consumption and, as a result, our costs and environmental footprint.impact.

The forest products industry is also highly cyclical. The overall levels of demand for the products we manufacture, and consequently, our sales and profitability, reflect fluctuations in levels of end user demand. As described above, end user demand depends at least in part on general economic conditions in North America and the world, and the effect can be significant. In addition to end user demand, we have experienced cyclical changes in prices, sales volume and margins for our commodity products as a result of changing market trends and the effect of capacity fluctuations on supply and demand as well as the relative competitiveness of producers. Because our commodity products have few distinguishing qualities from producer to producer, competition is based mainly on price, which is determined by supply relative to demand, which is in turn affected by the factors described above.

Operational risk relates to risks arisingarise from external events, processes, people and systems that affect the operation of our businesses. It includes:These include risks affecting, among other things, marketing and sales;sales, woodlands management; production;management, production, supply chain and business disruption;chains, information management, data protection and security, including cybersecurity;cybersecurity, human resources;resources, and other risks, including reputation.

Wood fiber is the principal raw material we use in our business. We primarily use both virgin fiber – wood chips and logs – and recycled fiber – old newspapers, old magazines and sorted office paper – as fiber sources for our pulp, tissue, and paper mills. Our primary source for wood fiberproducts business is timber.

We depend heavily on harvesting rights and timber supply guarantees over government-owned land in Ontario and Quebec, respectively. The volume of harvest permitted under these licenses is subject to limits, which are generally referred to as the “annual allowable cut.”AAC. The annual allowable cutAAC is reviewed regularly, typically every five years in Quebec and every 10 years in Ontario. Between 2006 and 2011, theThe chief forester of the province of Quebec ordered significant reductions to the allowable harvest between 2006 and 2018, and announced an increase of approximately 24%5.6% to the AAC for the spruce, pine, fir, and larch species, for the period of 2018 to 2023. This increase did not result in Quebec, and a further reduction of approximately 4% between 2013 and 2018. Also, as of April 1, 2013, aboutsignificant change in the volume allocated to us. About 25% of the then remaining timber supply guarantees allocatedtotal allowable harvest in Quebec were transferred tois allocated through an open auction system. The prices generated by the auction system that was implemented in 2013.are used to set pricing for the remainder of the AAC.

Increased pressures on the Canadian provincial and federal governments to increase the protection of the woodland caribou, its habitat, and the boreal forest, could impact timber supply. For example, regulations relating to habitats, and endangered or other species could significantly reduce timber supply to our mills. Our access to timber may also be affected by factors such as fire and fire prevention, insect infestation, disease, ice storms, wind storms, drought, flooding, and other natural and man-made causes, which could potentially reduce supply and increase prices.

Though timber is our primary source of fiber, wood fiber is a commodity and we also buy a significant portion of our fiber requirements on the open market. Prices for wood fiber are cyclical and subject to market influences, which could be

concentrated in one or more regions due to market shifts. The timber requirements for our U.S. sawmills are met mostly by purchasing timber harvested by timberland owners.

Our operations consume large amounts of energy, such as electricity, natural gas, fuel oil, and wood residue, a substantial proportion of which we buy on the open market. The main raw materials we require in our manufacturing processes are wood fiber recovered paper and chemicals. The prices for raw materials and energy are volatile and may change rapidly, which impacts our manufacturing costs, directly affects our results of operations and has contributedmay contribute to earnings volatility. The pricing of recycled fiber is also subject to market influences and has experienced significant fluctuations in recent years.

For our commodity products, the relationship between industry supply and demand, rather than changes in the cost of raw materials, determines our ability to increase prices. Consequently, we may be unable to pass along increases in our operating costs to our customers. Any sustained increase in energy, chemical, or raw material prices without any corresponding increase in product pricing would reduce our operating margins and potentially require us to limit or cease operations of one or more of our machines.facilities.

We also generate electricity for our operations at our hydroelectric facilities. There can be no certainty that we will be able to maintain ourthe water rights which are necessary for our hydroelectric power generating facilities, or to renew them on favorable conditions. The amount of electricity we can generate from our hydroelectric power facilities is also subject to the volume of rain or snowfall and is therefore variable from one year to the next.

Our operations and the operations of our suppliers are subject to climate variations, which impact the productivity of forests, the frequency and severity of wildfires, the distribution and abundance of species, and the spread of disease or insect epidemics, which in turn may adversely or positively affect timber production.production and availability. Over the past several years, changing weather patterns and climatic conditions due to natural and man-made causes have added to the unpredictability and frequency of natural disasters such as hurricanes, earthquakes, hailstorms, wildfires, snow, ice storms, the spread of disease, and insect infestations. Any of these natural disasters could also affect our woodlands or cause variations in the cost of raw materials, such as virgin fiber. Changes in precipitation resulting in droughtscould make wildfires more frequent or more severe, and could adversely affect timber harvesting or our hydroelectric production.

As of December 31, 2016,2019, we employed approximately 8,3006,700 people, of whom approximately 5,4004,500 were represented by various unions, primarily Unifor, and the CNTU in Canada, and predominantly by the USW in the U.S. In the past year, we renewed or entered into a number of agreements with unions, covering approximately 1,3001,200 employees in Canada.Canada and 800 employees in the U.S. Collective agreements covering approximately 250300 employees in Canada have either expired, orinvolving certain Canadian sawmills and a Canadian paper mill, and additional collective agreements covering approximately 500 employees in Canada are scheduled to expire in 2017, affecting2020, involving certain sawmills and woodlands operations.Canadian sawmills.

While we intend to renew collective agreements, there can be no assurance that we will be able to renew agreements on satisfactory terms, or that we will maintain continuously satisfactory agreements with all of our unionized employees. Should we be unable to do so, it could result in strikes, work stoppages, or disturbances by affected employees, which could cause us to experience a disruption of operations and affect our business, financial condition, or results of operations.

Our ability to achieve our future goals and objectives is dependent, in part, on maintaining good relations with our employees and minimizing employee turnover at our corporate offices, mills, and woodlands operations. Work stoppages, excessive

employee turnover, or difficulty in attracting and retaining employees, particularly for work in remote locations, key positions, or positions with specialized skill sets, could lead to operational delaysdisruptions or increased costs.

Some of these hazards can cause personal injury and loss of life, severe damage to or destruction of property, and equipment, and environmental damageor the environment, and can result in, among other things: the suspension of operations,operations; the shutdown of affected facilities,facilities; reputational damage,damage; the imposition of civil or criminal penalties,penalties; workers’ compensation; and subjectclaims against us to claims with respect to workplace exposure, exposure of contractors on our premises, as well as other persons located nearby, workers’ compensation and other matters.nearby.

We use information technologiestechnology to securely manage operations and various business functions. We rely on various technologies to process, store, and report on our business and interact with employees, customers, vendors, and employees.shareholders. The secure and reliable processing, maintenance, and transmission of this information is critical to our operations and business strategy. Despite our security design and controls, and those of our third-party providers, our information technology and infrastructure may be vulnerable to cyber attacks by hackersinterruptions, breakdowns, cyberattacks or breaches due to employee error, malfeasance, hackers, computer viruses, natural disasters, power or telecommunications failures, as well as other disruptions. Any suchA cybersecurity breach could result in operational disruptions or the misappropriation of sensitive data thator personal information and could disrupt our operations, subject us to civil and criminal penalties, litigation, or have a negative impact on our reputation. AnyWe may be required to expend capital and other resources to protect against such security breaches or cyberattacks, or to remediate problems caused by such breaches, attacks, or other disruptions. We have been the subject of cyberattacks from time to time, none of which have had a material impact on our business information systems or operations. There can be no assurance that such disruptions or misappropriations and the resulting repercussions couldwill not negatively impact our cash flows and materially affect our results of operations or financial condition. Recent developments in cybersecurity legislation in different jurisdictions are imposing additional obligations on us and could expand our potential liability in the event of a cybersecurity incident.

We believe that we have established a reputation for transparent communications, social and corporate governance, responsible forestry practices, and overall sustainability leadership. We also believe that our commitment to sustainable and responsible forestry practices extends 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. Negative publicity, whether or not justified, relating to our operations could tarnish our reputation or reduce the value of our brand and market demand for our products. In addition, the actions of activists, whether or not justified, could impede or delay our ability to access raw materials or obtain third-party certifications with respect to forest management and chain of custody standards that we seek in order to supply certified products.products to our customers. In these cases, we could alsomay have to incur significant expenses and dedicate additional resources to defend ourselves against activist campaigns, rebuild our reputation, and restore the value of our brand.

Financial risk relatesrisks relate to our ability to meet financial obligations and mitigate exposure to broad market risks, including: volatility in foreign currency exchange rates, interest rates and commodity prices;prices, capital structure; andstructure, as well as credit and liquidity risk, including risk related to cash management, extension of credit, collections, credit ratings, and availability and cost of funding.

We compete with producers from around the world, particularly North America, Europe, and South America, in most of our product lines, with the exception of wood products and tissue, where we compete primarily with other North American producers. We sell our products mainly in transactions denominated in U.S. dollars, but we also sell in certain local currencies, including the Canadian dollar, the euro, and the pound sterling. Changes in the relative strength or weakness of these currencies,

Furthermore, certain monetary assets and liabilities, including a substantial portion of our net pension and other postretirement benefit obligations and our net deferred income tax assets, are denominated in Canadian dollars. As a result, our earnings can be subject to the potentially significant effect of foreign currency translationexchange gains or losses in respect of these Canadian dollar net monetary items. A fluctuation of the Canadian dollar against the U.S. dollar in any given period would generally cause a foreign currency translationexchange gain or loss.

As of December 31, 2016,2019, we had net pension obligations of approximately $1,123$1,326 million, of which approximately 70%75% relates to our Canadian registered pension plans in the provinces of Quebec and Ontario, and approximately 30%25% of which relates to our U.S. qualified pension plan. See Note 13, “Pension and Other Postretirement Benefit Plans,” to our Consolidated Financial Statements, for a description of our pension plan funding obligations, including our unfunded pension obligations.

The amount by which our pension plans are funded or underfunded varies depending upon the return on pension fund investments, the level of interest rates used to determine minimum funding levels, the payments of benefits, and other actuarial assumptions and experience. Variations from our assumptions would cause the actual amount of our required contributions to vary from our current estimates. Any additional contributions to our pension fundsplans to fund potential resulting increased deficitsdeficit increases would be required to be paid over seven-year or 15-year periods,a period of time ranging from seven to 15 years depending upon the legislationlaws applicable to the funding of the specific pension plan, except that plans that are currently subject to 15-year periods will be gradually reduced to maximum 10-year periods by December 31, 2021.plan. Any change to laws and regulations applicable to the funding of our pension plans could also increase or decrease our future funding obligations. Similarly, because we make our Quebec and Ontario pension plan contributions in

Canadian dollars, the amount of our contributions as stated in U.S. dollars can be subject to the potentially significant effect of foreign currency exchange rate variations. Any such variations could materially affect our cash flows and financial condition, in each case either positively or negatively depending on the direction and magnitude of the variation. In addition, an increase in our net pension obligations could make it more difficult to obtain financing on favorable terms.

Our businesses are capital intensive and require regular capital expenditures in order to maintain our equipment, increase our operating efficiency, and comply with environmental laws.laws, and innovate to remain competitive. If our available cash resources and cash generated from operations are not sufficient to fund our operating needs, make pension contributions, and finance our working capital, capital expenditures, and duty cash deposits, we would either need to borrow or reduce or delay capital expenditures. If we cannot maintain or upgrade our equipment as we require,required, we may become unable to manufacture products that compete effectively. An inability to make required capital expenditures in a timely fashion could also have a material adverse effect on our growth, business, financial condition, or results of operations.

A breach of the covenants under the ABL Credit Facility, the Senior Secured Credit Facility, or under the indenture governing the 2023 Notes could result in an event of default, which could allow holders and lenders, as the case may be, to accelerate the repayment of their debt and could result in the acceleration of the repayment of any other debt to which a cross-acceleration or cross-default provision applies. An event of default under the ABL Credit Facility or the Senior Secured Credit Facility would also allow the lenders to terminate all commitments to extend further credit to us under those facilities. If we were unable to repay amounts due and payable under the ABL Credit Facility or the Senior Secured Credit Facility, the lenders would have the right to proceed against the collateral securing the indebtedness. In any of these events, we may seek to refinance our indebtedness, but be unable to do so on commercially reasonable terms. As a result, we could be: limited in how we conduct our business; unable to raise additional debt or equity financing to operate during general economic or business downturns; or unable to compete effectively or to take advantage of new business opportunities.opportunities; or forced to sell assets.

We maintain property, business interruption, credit, product, general liability, casualty, and other types of insurance, including pollution and legalenvironmental liability, that we believe are in accordance with customary industry practices, but we are not fully insured

against all potential hazards inherent in our business, including losses resulting from human error, cybersecurity issues, natural disasters, war risks, or terrorist acts. As is typical in the industry, we also do not maintain insurance for any loss to our access to standing timber from natural disasters, regulatory changes, or other causes. Changes in insurance market conditions have caused, and may in the future cause, premiums and deductibles for certain insurance policies to increase substantially and in some instances, for certain insurance to become unavailable or available only for reduced amounts of coverage. If we were to incur a significant liability for which we were not fully insured, we might not be able to finance the amount of the uninsured liability on terms acceptable to us or at all, and might be obligated to divert a significant portion, or all, of our cash flow from normal business operations.

We couldalso may be disposing of assets or businesses and be required to record goodwillrecognize additional impairment charges based on all or a significant amount of the goodwill on our Consolidated Balance Sheet.

We recorded significant deferred income tax assets relating to our Canadian operations in our Consolidated Balance Sheet as of December 31, 2016.2019. If, in the future, we determine that we are unable to recognize these deferred income tax assets as a result of sustained cumulative losses in our Canadian operations, we could be required to record additional valuation allowances for the portion of the deferred income tax assets that is not more likely than not to be realized. Such valuation allowances, if taken, would be recorded as a charge to income tax expenseprovision and would negativelyadversely impact our results of operations.

Legal and Compliance Risk

Legal and compliance risk relates to risks arisingarise from the governmental and regulatory environmentaction, governance and action, standards of business conduct, and environmental, contractual and other legal liability, and governance,liabilities, including riskrisks associated with: international trade regulation; legal proceedings; our shareholder relationships; commitments to customers or suppliers; and compliance with governance policies and procedures, includingsuch as those relating to financial reporting environmentaland disclosure obligations, the environment, health and safety. Governmentsafety, marketing, product safety and liability, and antitrust. Governmental and regulatory risk includes the risk that governments’government or regulators’regulator actions will impose additional costs on us or cause us to have to change our business models or practices.

We produce products in the U.S. and Canada, and we sell those products worldwide. Under international agreements and the domestic trade laws of many countries, trade remedies are available to domestic industries where imports are alleged to be “dumped” or “subsidized” and such imports are alleged to cause material injury, or an imminent threat of injury, to a domestic industry. Under such laws, dumping generally involves selling for export a product at a price lower than that at which the same

or similar product is sold in the home market of the exporter, or where the export prices are lower than a value that typically must be at or above the full cost of production (including sales and marketing costs) and a reasonable amount for profit. International trade laws also generally provide that subsidies from governments may be subject to trade remedies under certain circumstances. A trade remedy investigation or proceeding may involve allegations of either dumping, subsidization, or both. Where injurious dumping is found, the trade remedy is typically an anti-dumping duty order. Where injurious subsidization is found, the trade remedy is typically a countervailing duty order. In principle, a duty equal to the amount of dumping or subsidization, as applicable, isshould be imposed on the importer of the product. However, whether or not consistent with treaty obligations or other applicable law, authorities have imposed assumed or estimated rates on products that may not be related to actual dumping by a particular producer or may not be based on subsidies actually received by the producer. Anti-dumping and countervailing duty orders do not prevent the export or import of the product, but rather require the importer of the product to pay to the government an anti-dumping duty or countervailing duty, or a deposit on estimated anti-dumping duties or countervailing duties, as applicable. The imposition of additional anti-dumping duties, countervailing duties, deposit requirements in respect of estimated duties, or any other trade remedy on one or more of our products could materially affect our cash flow, and the competitive position of our operations relating to the affected product.

No such deposits paid to the U.S. of SC paper produced at our Canadian mills. Between August 3, 2015 and October 15, 2015, we were required to make cash deposits at a rate of 2.04%. On October 15, 2015, that rate increased to 17.87%. We will be required to continue making cash deposits at that rateconverted into actual countervailing duties or anti-dumping duties unless and until Commerce sets a countervailing duty or anti-dumping rate is later set by Commerce in an administrative review, which may not be finalized until December of 2017, or possibly later. Through December 31, 2016, our cash deposits totaled $27 million, and based on current operating parameters, could be as high as $25 million in 2017.

We have been required to pay cash deposits for estimated countervailing duties and anti-dumping duties on our U.S. imports of softwood lumber products produced at our Canadian millssawmills, since April 28, 2017, and June 30, 2017, respectively. As of December 31, 2018, the rates for such estimated countervailing and anti-dumping duties were 14.7% and 3.2%, respectively. On January 31, 2020, Commerce issued its preliminary determination in the countervailing duties and anti-dumping administrative reviews and established our new preliminary rates at 14.86% for countervailing duties and 1.18% for anti-dumping duties, which will ultimately not be subjecteffective until the issuance of the final determinations. Through December 31, 2019, our aggregate cash deposits paid to any significant countervailing duty; however, wethe U.S. for all affected products totaled $162 million.

We cannot provide any assurance regarding the countervailingestimated or final duty raterates that may be determined by Commerce in anits investigations or administrative review. In addition, ifreviews. During any period in the administrative review Commerce sets rates based on an examination of other Canadian SC paper producers, rather than based on an examination ofwhich our Canadian subsidiary, the final duty rate set for our Canadian produced SC paper may not reflect an amount of countervailable subsidies received by us, but rather an average of the rates of Canadian producers that are individually examined in the administrative review. We believe we will be individually examined, but we cannot provide any assurances.

As an owner and operator of real estate and manufacturing and processing facilities, we are subject, in particular, to a wide range of general and industry-specific laws and regulations relating to pollution and the protection of the environment, including those governing air emissions, wastewater discharges, timber harvesting, the storage, management and disposal of regulated substances and waste, the investigation and clean-up of contaminated sites, landfill and lagoon operation and closure, forestry operations, endangered species habitat, and health and safety.safety, and climate change. Noncompliance with these regulations can result in significant civil or criminal fines or penalties, or regulatory or judicial orders enjoining or curtailing operations. This may include liability under environmental laws for cleanup and other costs and damages, including investigation costs, tort liability and damages to natural resources, resulting from past or present spills, releases or threats of releases of regulated substances and waste on or from our current or former properties. We may also be liable under health and safety laws for related exposure of employees, contractors and other persons to substances and waste on or from our current or former properties. We may incur liability under these laws without regard to whether we knew of, were responsible for, or owned the property at the time of, any exposure, spill, release or threats of releases of any regulated substances or waste on or from any current or former property, or at properties where we arranged for the disposal of regulated materials.materials or waste. Claims may also arise out of currently unknown environmental conditions or aggressive enforcement efforts by government regulators, public interest groups or private parties. As a result, we may be required to incur or record additional environmental or related health and safety liabilities.

As a result of our international sales and operations, we are required to comply with trade and economic sanctions and other restrictions imposed by the United States,U.S., Canada, and other governments or organizations. We are also subject to the U.S. Foreign Corrupt Practices Act, the Canadian Corruption of Foreign Public Officials Act (Canada), the United Kingdom Bribery Act 2010 and other anti-bribery laws that generally bar bribes or unreasonable gifts to foreign governments or officials and, in some jurisdictions, to other commercial parties. Changes in trade sanctions laws could restrict our business practices, including cessation of business activities in sanctioned countries or with sanctioned entities, and may result in modifications to compliance programs. Violations of these laws or regulations could result in sanctions, including fines, loss of authorizations needed to conduct our international business, and other penalties, as well as result in a default under certain of our financing agreements, each of which could adversely impact our business, operating results, and financial condition.

We become involved in various legal proceedings, claims and governmental inquiries, investigations, and other disputes in the normal course of business. These could include, for example, matters related to contracts, transactions, commercial and trade disputes, taxes, environmental issues, activist’sactivist damages, employment and workers’ compensation claims, grievances, human rights complaints, pension and benefit plans and obligations, health and safety, product safety and liability, asbestos exposure, intellectual property, financial reporting and disclosure obligations, corporate governance, First Nations claims, antitrust, Aboriginal claims,

Some legal proceedings and disputesmatters that we may be involved in from time to time result from claims brought by us against third parties, including customers, suppliers, shareholders, governments or governmental agencies, activists and others. Even if such a legal proceeding or disputematter does not involve a claim for damages or other penalty or remedial action against us, such a proceeding or disputematter could nevertheless adversely affect our relationships with those and other third parties.

There are several significant holdersis a shareholder who ownowns a substantial percentage of the outstanding shares of our common stock, and they could increase theirits percentage ownership even further. These holdersThis shareholder could be in a position to influence the outcome of actions requiring shareholder approval, including, among other things, the election of board members. ThisThe concentration of ownership could also facilitate or hinder a negotiated change of control and consequently, impact the value of our common stock. In addition, the possibility that one or more of these holdersthis shareholder may sell all or a large portion of our common stock in a short period of time may adversely affect the trading price of our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We hold the properties that we own or lease, and the rights and supply guarantees described above, through various operating subsidiaries, including our principal U.S. operating subsidiary, Resolute FP US Inc., our principal Canadian operating subsidiary, Resolute FP Canada Inc., and Resolute Growth Canada Inc., which holds or operates assets related to our growth and diversification initiatives in Canada, including our Ontario sawmills and wood pellet facility, as well as our Saint-Félicien pulp mill. For a list of our subsidiaries as of December 31, 2019, see Exhibit 21.1, “Subsidiaries of the registrant,” of this Form 10-K.

ITEM 3. LEGAL PROCEEDINGS

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 6. SELECTED FINANCIAL DATA