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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2020
MARCH 31, 2021
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM    TO
COMMISSION FILE NUMBER: 001-33776
RESOLUTE FOREST PRODUCTS INC.
(Exact name of registrant as specified in its charter)
Delaware98-0526415
(State or other jurisdiction of incorporation or organization)(I.R.S. employer identification number)
111 Robert-Bourassa BoulevardSuite 5000MontrealQuebecCanadaH3C 2M1
(Address of principal executive offices) (Zip Code)


(514) 875-2160
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, par value $0.001 per shareRFPNew York Stock Exchange
Toronto Stock Exchange
(Title of class)
(Trading Symbol)

(Name of exchange on which registered)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒    No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒    No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer☐Accelerated Filer☒Non-accelerated Filer☐Smaller Reporting Company☐Emerging Growth Company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐    No ☒
As of July 31, 2020,April 30, 2021, there were 86,078,24779,091,117 shares of Resolute Forest Products Inc. common stock, $0.001 par value, outstanding.

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RESOLUTE FOREST PRODUCTS INC.
TABLE OF CONTENTS
 
Page
Number
PART I. FINANCIAL INFORMATION
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2020March 31, 2021 and 20192020
1
Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2020March 31, 2021 and 20192020
2
Consolidated Balance Sheets as of June 30, 2020March 31, 2021 and December 31, 20192020
3
Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2020March 31, 2021 and 20192020
4
Consolidated Statements of Cash Flows for the SixThree Months Ended June 30, 2020March 31, 2021 and 20192020
65
Notes to Unaudited Interim Consolidated Financial Statements
76
2218
4937
4937
PART II. OTHER INFORMATION
5038
5038
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
38
51
Item 6. Exhibits
52
SIGNATURES
53

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PART I.FINANCIAL INFORMATION
39
40

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PART I.    FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS
ITEM 1.    FINANCIAL STATEMENTS
RESOLUTE FOREST PRODUCTS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in millions of U.S. dollars, except per share amounts)

Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,		Three Months Ended
March 31,
2020  2019  2020  2019  20212020
Sales$612
 $755
 $1,301
 $1,550
 Sales$873 $689 
Costs and expenses:         Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs 464
 536
 988
 1,090
 Cost of sales, excluding depreciation, amortization and distribution costs522 524 
Depreciation and amortization 40
 42
 82
 82
 Depreciation and amortization41 42 
Distribution costs 79
 101
 178
 201
 Distribution costs84 99 
Selling, general and administrative expenses 32
 36
 66
 73
 Selling, general and administrative expenses46 34 
Closure costs, impairment and other related charges —
 —
 (2) —
 Closure costs, impairment and other related charges3 (2)
Net gain on disposition of assets (9) —
 (9) —
 
Operating income (loss) 6
 40
  (2) 104
 Operating income (loss)177 (8)
Interest expense (9) (7) (18) (16) Interest expense(6)(9)
Non-operating pension and other postretirement benefit credits 4
 12
 19
 24
 Non-operating pension and other postretirement benefit credits2 15 
Other income (expense), net 10
 (1) 38
 (5) 
Other (expense) income, netOther (expense) income, net(45)28 
Income before income taxes 11
 44
 
 37
 107
 Income before income taxes128 26 
Income tax provision (5) (19) (32) (40) Income tax provision(40)(27)
Net income including noncontrolling interest 6
 25
 5
 67
 
Net income (loss) including noncontrolling interestNet income (loss) including noncontrolling interest88 (1)
Net income attributable to noncontrolling interest —
 —
 —
 —
 Net income attributable to noncontrolling interest(1)0 
Net income attributable to Resolute Forest Products Inc.$6
 $25
  $5
 $67
 
Net income per share attributable to Resolute Forest Products Inc. common shareholders:         
Net income (loss) attributable to Resolute Forest Products Inc.Net income (loss) attributable to Resolute Forest Products Inc.$87 $(1)
Net income (loss) per share attributable to Resolute Forest Products Inc. common shareholders:Net income (loss) per share attributable to Resolute Forest Products Inc. common shareholders:
Basic$0.07
 $0.27
 $0.06
 $0.73
 Basic$1.07 $(0.01)
Diluted$0.07
 $0.27
 $0.06
 $0.71
 Diluted$1.06 $(0.01)
Weighted-average number of Resolute Forest Products Inc. common shares outstanding:         Weighted-average number of Resolute Forest Products Inc. common shares outstanding:
Basic 88.1
 92.4
 88.1
 92.4
 Basic81.2 88.1 
Diluted 88.2
 93.6
 88.2
 93.8
 Diluted81.9 88.1 
See accompanying notes to unaudited interim Consolidated Financial Statements.

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RESOLUTE FOREST PRODUCTS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited, in millions of U.S. dollars)

Three Months Ended
March 31,
Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,		20212020
2020  2019  2020  2019  
Net income including noncontrolling interest$6
 $25
 $5
 $67
 
Net income (loss) including noncontrolling interestNet income (loss) including noncontrolling interest$88 $(1)
Other comprehensive income (loss):         Other comprehensive income (loss):
Unamortized prior service credits         
Change in unamortized prior service credits (1) (4) (16) (7) 
Unamortized prior service costs or creditsUnamortized prior service costs or credits
Change in unamortized prior service costs or creditsChange in unamortized prior service costs or credits(1)(15)
Income tax provision —
 —
 —
 —
 Income tax provision0 0 
Change in unamortized prior service credits, net of tax (1) (4) (16) (7) 
Change in unamortized prior service costs or credits, net of taxChange in unamortized prior service costs or credits, net of tax(1)(15)
Unamortized actuarial losses         Unamortized actuarial losses
Change in unamortized actuarial losses 15
 3
 32
 11
 Change in unamortized actuarial losses49 17 
Income tax provision (4) —
 (7) (2) Income tax provision(12)(3)
Change in unamortized actuarial losses, net of tax 11
 3
 25
 9
 Change in unamortized actuarial losses, net of tax37 14 
Foreign currency translation —
 —
 (1) —
 Foreign currency translation0 (1)
Other comprehensive income (loss), net of tax 10
 (1) 8
 2
 Other comprehensive income (loss), net of tax36 (2)
Comprehensive income including noncontrolling interest 16
 24
 13
 69
 
Comprehensive income (loss) including noncontrolling interestComprehensive income (loss) including noncontrolling interest124 (3)
Comprehensive income attributable to noncontrolling interest —
 —
 —
 —
 Comprehensive income attributable to noncontrolling interest(1)0 
Comprehensive income attributable to Resolute Forest Products Inc.$16
 $24
 $13
 $69
 
Comprehensive income (loss) attributable to Resolute Forest Products Inc.Comprehensive income (loss) attributable to Resolute Forest Products Inc.$123 $(3)
See accompanying notes to unaudited interim Consolidated Financial Statements.

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RESOLUTE FOREST PRODUCTS INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, in millions of U.S. dollars, except per share amount)

June 30,
2020		December 31,
2019		March 31,
2021		December 31,
2020
Assets     Assets
Current assets:     Current assets:
Cash and cash equivalents$27
 $3
 Cash and cash equivalents$33 $113 
Accounts receivable, net:     Accounts receivable, net:
Trade 239
 273
 Trade292 230 
Other 65
 76
 Other41 48 
Inventories, net 506
 522
 Inventories, net512 462 
Other current assets 45
 33
 Other current assets64 47 
Total current assets 882
 907
 Total current assets942 900 
Fixed assets, less accumulated depreciation of $1,503 and $1,658 as of June 30, 2020 and December 31, 2019, respectively 1,524
 1,459
 
Amortizable intangible assets, less accumulated amortization of $30 and $27 as of June 30, 2020 and December 31, 2019, respectively 66
 48
 
Fixed assets, less accumulated depreciation of $1,642 and $1,604 as of March 31, 2021 and December 31, 2020, respectivelyFixed assets, less accumulated depreciation of $1,642 and $1,604 as of March 31, 2021 and December 31, 2020, respectively1,412 1,441 
Amortizable intangible assets, less accumulated amortization of $34 and $33 as of March 31, 2021 and December 31, 2020, respectivelyAmortizable intangible assets, less accumulated amortization of $34 and $33 as of March 31, 2021 and December 31, 2020, respectively61 63 
Goodwill 31
 —
 Goodwill31 31 
Deferred income tax assets 837
 915
 Deferred income tax assets874 915 
Operating lease right-of-use assets 59
 61
 Operating lease right-of-use assets56 60 
Other assets 268
 236
 Other assets352 320 
Total assets$3,667
 $3,626
 Total assets$3,728 $3,730 
Liabilities and equity     Liabilities and equity
Current liabilities:     Current liabilities:
Accounts payable and accrued liabilities$300
 $342
 
Accounts payable and otherAccounts payable and other$398 $369 
Current portion of long-term debt 2
 1
 Current portion of long-term debt2 2 
Current portion of operating lease liabilities 8
 8
 Current portion of operating lease liabilities9 9 
Total current liabilities 310
 351
 Total current liabilities409 380 
Long-term debt, net of current portion 628
 448
 Long-term debt, net of current portion480 559 
Pension and other postretirement benefit obligations 1,349
 1,460
 Pension and other postretirement benefit obligations1,507 1,562 
Operating lease liabilities, net of current portion 53
 57
 Operating lease liabilities, net of current portion51 55 
Other liabilities 77
 75
 Other liabilities94 92 
Total liabilities 2,417
 2,391
 Total liabilities2,541 2,648 
Commitments and contingencies 
 
 Commitments and contingencies00
Equity:     Equity:
Resolute Forest Products Inc. shareholders’ equity:     Resolute Forest Products Inc. shareholders’ equity:
Common stock, $0.001 par value. 120.2 shares issued and 87.1 shares outstanding as of June 30, 2020; 119.5 shares issued and 86.7 shares outstanding as of December 31, 2019 —
 —
 
Common stock, $0.001 par value. 121.0 million shares issued and 79.5 million shares outstanding as of March 31, 2021; 120.6 million shares issued and 80.8 million shares outstanding as of December 31, 2020Common stock, $0.001 par value. 121.0 million shares issued and 79.5 million shares outstanding as of March 31, 2021; 120.6 million shares issued and 80.8 million shares outstanding as of December 31, 20200 0 
Additional paid-in capital 3,805
 3,802
 Additional paid-in capital3,802 3,804 
Deficit (1,240) (1,245) Deficit(1,148)(1,235)
Accumulated other comprehensive loss (1,171) (1,179) Accumulated other comprehensive loss(1,278)(1,314)
Treasury stock at cost, 33.1 shares and 32.8 shares as of June 30, 2020 and December 31, 2019, respectively (145) (144) 
Treasury stock at cost, 41.5 million shares and 39.8 million shares as of March 31, 2021 and December 31, 2020, respectivelyTreasury stock at cost, 41.5 million shares and 39.8 million shares as of March 31, 2021 and December 31, 2020, respectively(191)(174)
Total Resolute Forest Products Inc. shareholders’ equity 1,249
 1,234
 Total Resolute Forest Products Inc. shareholders’ equity1,185 1,081 
Noncontrolling interest 1
 1
 Noncontrolling interest2 1 
Total equity 1,250
 1,235
 Total equity1,187 1,082 
Total liabilities and equity$3,667
 $3,626
 Total liabilities and equity$3,728 $3,730 
See accompanying notes to unaudited interim Consolidated Financial Statements.

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RESOLUTE FOREST PRODUCTS INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited, in millions of U.S. dollars)
Three Months Ended March 31, 2021
 Resolute Forest Products Inc. Shareholders’ Equity  
Common
Stock		Additional
Paid-In
Capital		DeficitAccumulated Other Comprehensive LossTreasury
Stock		Non-controlling
Interest		Total Equity
Balance as of December 31, 2020$0 $3,804 $(1,235)$(1,314)$(174)$1 $1,082 
Share-based compensation, net of withholding taxes— (2)— — — — (2)
Net income— — 87 — — 1 88 
Purchases of treasury stock (1.7 million shares) (Note 12)— — — — (17)— (17)
Stock unit awards vested (0.4 million shares), net of shares forfeited for employee withholding taxes— — — — — — — 
Other comprehensive income, net of tax— — — 36 — 0 36 
Balance as of March 31, 2021$0 $3,802 $(1,148)$(1,278)$(191)$2 $1,187 
 Three Months Ended June 30, 2020
 Resolute Forest Products Inc. Shareholders’ Equity      
 
Common
Stock
Additional
Paid-In
Capital
DeficitAccumulated Other Comprehensive Loss
Treasury
Stock
Non-controlling
Interest
Total Equity
Balance as of March 31, 2020$—
 $3,804
 $(1,246) $(1,181) $(144) $1
 $1,234
 
Share-based compensation, net of withholding taxes —
  1
  —
  —
  —
  —
  1
 
Net income —
  —
  6
  —
  —
  —
  6
 
Purchases of treasury stock (0.3 shares) (Note 12) —
  —
  —
  —
  (1)  —
  (1) 
Other comprehensive income, net of tax —
  —
  —
  10
  —
  —
  10
 
Balance as of June 30, 2020$—
 $3,805
 $(1,240) $(1,171) $(145) $1
 $1,250
 
 Six Months Ended June 30, 2020
 Resolute Forest Products Inc. Shareholders’ Equity      
 
Common
Stock
Additional
Paid-In
Capital
DeficitAccumulated Other Comprehensive Loss
Treasury
Stock
Non-controlling
Interest
Total Equity
Balance as of December 31, 2019$—
 $3,802
 $(1,245) $(1,179) $(144) $1
 $1,235
 
Share-based compensation, net of withholding taxes —
  3
  —
  —
  —
  —
  3
 
Net income —
  —
  5
  —
  —
  —
  5
 
Purchases of treasury stock (0.3 shares) (Note 12) —
  —
  —
  —
  (1)  —
  (1) 
Stock unit awards vested (0.7 shares), net of shares forfeited for employee withholding taxes —
  —
  —
  —
  —
  —
  —
 
Other comprehensive income, net of tax —
  —
  —
  8
  —
  —
  8
 
Balance as of June 30, 2020$—
 $3,805
 $(1,240) $(1,171) $(145) $1
 $1,250
 

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RESOLUTE FOREST PRODUCTS INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited, in millions of U.S. dollars)
 Three Months Ended June 30, 2019
 Resolute Forest Products Inc. Shareholders’ Equity      
 Common
Stock		Additional
Paid-In
Capital		DeficitAccumulated Other Comprehensive LossTreasury
Stock		Non-
controlling
Interest		Total Equity
Balance as of March 31, 2019$—
 $3,802
 $(1,156) $(947) $(120) $1
 $1,580
 
Share-based compensation, net of withholding taxes —
  1
  —
  —
  —
  —
  1
 
Net income —
  —
  25
  —
  —
  —
  25
 
Purchases of treasury stock (0.7 shares) (Note 12) —
  —
  —
  —
  (5)  —
  (5) 
Other comprehensive loss, net of tax —
  —
  —
  (1)  —
  —
  (1) 
Balance as of June 30, 2019$—
 $3,803
 $(1,131) $(948) $(125) $1
 $1,600
 
 Six Months Ended June 30, 2019
 Resolute Forest Products Inc. Shareholders’ Equity      
 
Common
Stock
Additional
Paid-In
Capital
DeficitAccumulated Other Comprehensive Loss
Treasury
Stock
Non-
controlling
Interest
Total Equity
Balance as of December 31, 2018$—
 $3,802
 $(1,198) $(950) $(120) $1
 $1,535
 
Share-based compensation, net of withholding taxes —
  1
  —
  —
  —
  —
  1
 
Net income —
  —
  67
  —
  —
  —
  67
 
Purchases of treasury stock (0.7 shares) (Note 12) —
  —
  —
  —
  (5)  —
  (5) 
Stock unit awards vested (0.3 shares), net of shares forfeited for employee withholding taxes —
  —
  —
  —
  —
  —
  —
 
Other comprehensive income, net of tax —
  —
  —
  2
  —
  —
  2
 
Balance as of June 30, 2019$—
 $3,803
 $(1,131) $(948) $(125) $1
 $1,600
 
Three Months Ended March 31, 2020
 Resolute Forest Products Inc. Shareholders’ Equity  
Common
Stock		Additional
Paid-In
Capital		DeficitAccumulated Other Comprehensive LossTreasury
Stock		Non-
controlling
Interest		Total Equity
Balance as of December 31, 2019$0 $3,802 $(1,245)$(1,179)$(144)$1 $1,235 
Share-based compensation, net of withholding taxes— 2 — — — — 2 
Net loss— — (1)— — 0 (1)
Stock unit awards vested (0.7 million shares), net of shares forfeited for employee withholding taxes— — — — — — — 
Other comprehensive loss, net of tax— — — (2)— 0 (2)
Balance as of March 31, 2020$0 $3,804 $(1,246)$(1,181)$(144)$1 $1,234 
See accompanying notes to unaudited interim Consolidated Financial Statements.

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RESOLUTE FOREST PRODUCTS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in millions of U.S. dollars)

Three Months Ended
March 31,
20212020
Cash flows from operating activities:Cash flows from operating activities:
Net income (loss) including noncontrolling interestNet income (loss) including noncontrolling interest$88 $(1)
Adjustments to reconcile net income (loss) including noncontrolling interest to net cash provided by (used in) operating activities:Adjustments to reconcile net income (loss) including noncontrolling interest to net cash provided by (used in) operating activities:
Share-based compensationShare-based compensation2 3 
Depreciation and amortizationDepreciation and amortization41 42 
Deferred income taxesDeferred income taxes40 27 
Net pension contributions and other postretirement benefit paymentsNet pension contributions and other postretirement benefit payments(23)(33)
(Gain) loss on translation of foreign currency denominated deferred income taxes(Gain) loss on translation of foreign currency denominated deferred income taxes(12)69 
Loss (gain) on translation of foreign currency denominated pension and other postretirement benefit obligationsLoss (gain) on translation of foreign currency denominated pension and other postretirement benefit obligations16 (82)
Loss on commodity contracts Loss on commodity contracts14 0 
Net planned major maintenance (payments) amortizationNet planned major maintenance (payments) amortization(3)6 
Changes in working capital:Changes in working capital:
Accounts receivableAccounts receivable(51)(20)
InventoriesInventories(50)(29)
Other current assetsOther current assets0 (6)
Accounts payable and otherAccounts payable and other2 (18)
Other, netOther, net10 (7)
Net cash provided by (used in) operating activitiesNet cash provided by (used in) operating activities74 (49)
Cash flows from investing activities:Cash flows from investing activities:
Cash invested in fixed assetsCash invested in fixed assets(14)(21)
Acquisition of business, net of cash acquiredAcquisition of business, net of cash acquired0 (174)
Increase in countervailing and anti-dumping duty cash deposits on softwood lumberIncrease in countervailing and anti-dumping duty cash deposits on softwood lumber(32)(15)
Six Months Ended 
 June 30,
2020  2019  
Cash flows from operating activities:     
Net income including noncontrolling interest$5
 $67
 
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities:     
Share-based compensation 4
 3
 
Depreciation and amortization 82
 82
 
Deferred income taxes 32
 40
 
Net pension contributions and other postretirement benefit payments (48) (57) 
Net gain on disposition of assets (9) —
 
Loss (gain) on translation of foreign currency denominated deferred income taxes 39
 (35) 
(Gain) loss on translation of foreign currency denominated pension and other postretirement benefit obligations (47) 37
 
Net planned major maintenance (payments) amortization (2) 7
 
Changes in working capital:     
Accounts receivable 50
 38
 
Inventories 25
 (21) 
Other current assets (7) (3) 
Accounts payable and accrued liabilities (49) (64) 
Other, net 1
 1
 
Net cash provided by operating activities 76
 95
 
Cash flows from investing activities:     
Cash invested in fixed assets (37) (45) 
Acquisition of business, net of cash acquired (172) —
 
Disposition of assets 9
 2
 
Decrease in countervailing duty cash deposits on supercalendered paper —
 1
 
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber (32) (33) 
Decrease in countervailing duty cash deposits on uncoated groundwood paper —
 6
 
Other investing activities, net 5
 —
 Other investing activities, net3 4 
Net cash used in investing activities (227) (69) Net cash used in investing activities(43)(206)
Cash flows from financing activities:     Cash flows from financing activities:
Net repayments under revolving credit facilities (2) —
 
Net borrowings under revolving credit facilitiesNet borrowings under revolving credit facilities0 189 
Issuance of long-term debtIssuance of long-term debt300 0 
Proceeds from long-term debt 180
 —
 Proceeds from long-term debt0 180 
Repayments of debt (1) (225) Repayments of debt(376)(1)
Purchases of treasury stock (1) (5) Purchases of treasury stock(17)0 
Payments of financing and credit facility fees —
 (2) 
Net cash provided by (used in) financing activities 176
 (232) 
Payments of financing feesPayments of financing fees(6)0 
Net cash (used in) provided by financing activitiesNet cash (used in) provided by financing activities(99)368 
Effect of exchange rate changes on cash and cash equivalents, and restricted cash (1) 1
 Effect of exchange rate changes on cash and cash equivalents, and restricted cash0 (3)
Net increase (decrease) in cash and cash equivalents, and restricted cash$24
 $(205) 
Net (decrease) increase in cash and cash equivalents, and restricted cashNet (decrease) increase in cash and cash equivalents, and restricted cash$(68)$110 
Cash and cash equivalents, and restricted cash:     Cash and cash equivalents, and restricted cash:
Beginning of period$42
 $345
 Beginning of period$159 $42 
End of period$66
 $140
 End of period$91 $152 
Cash and cash equivalents, and restricted cash at end of period:     Cash and cash equivalents, and restricted cash at end of period:
Cash and cash equivalents$27
 $98
 Cash and cash equivalents$33 $116 
Restricted cash (included in “Other current assets”)Restricted cash (included in “Other current assets”)$18 $0 
Restricted cash (included in “Other assets”)$39
 $42
 Restricted cash (included in “Other assets”)$40 $36 
See accompanying notes to unaudited interim Consolidated Financial Statements.

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RESOLUTE FOREST PRODUCTS INC.
Notes to Unaudited Interim Consolidated Financial Statements

Note 1. Organization and Basis of Presentation
Nature of operations
Resolute Forest Products Inc. (with its subsidiaries, either individually or collectively, unless otherwise indicated, referred to as “Resolute Forest Products,” “we,” “our,” “us,” “Parent,” or the “Company”) is incorporated in Delaware. We are a global leader in the forest products industry with a diverse range of products, including market pulp, tissue, wood products, and paper, which are marketed in close to 70over 50 countries. We own or operate some 40 facilities, as well as power generation assets, in the U.S. and Canada.
Financial statements
Our interim consolidated financial statements and accompanying notes (or, the “Consolidated Financial Statements”) are unaudited and have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (or, the “SEC”) for interim reporting. Under those rules, certain footnotes and other financial information that are normally required by U.S. generally accepted accounting principles (or, “GAAP”) may be condensed or omitted. In our opinion, all adjustments (consisting of normal recurring adjustments) necessary for the fair statement of the unaudited interim Consolidated Financial Statements have been made. All amounts are expressed in U.S. dollars, unless otherwise indicated. The results for the interim period ended June 30, 2020,March 31, 2021, are not necessarily indicative of the results to be expected for the full year. These unaudited interim Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2019,2020, filed with the SEC on March 2, 2020.1, 2021. Certain prior period amounts in the notes to our Consolidated Financial Statements have been reclassified to conform to the 20202021 presentation.
Use of estimates
The uncertainties around the novel coronavirus (or, “COVID-19”) pandemic required the use of judgments and estimates that resulted in no significant impacts to our Consolidated Financial Statements as of and for the three and six months ended June 30, 2020. The future impact of the COVID-19 pandemic could generate, in future reporting periods, a significant risk of material adjustment to the carrying amounts of deferred income tax assets and long-lived assets.
New accounting pronouncementspronouncement adopted in 20202021
ASU 2016-13 “Measurement of Credit Losses on Financial Instruments”2019-12 “Simplifying the Accounting for Income Taxes”
Effective January 1, 2020,2021, we adopted on a modified retrospective basisASU 2019-12, “Simplifying the Accounting Standards Update (or, “ASU”) 2016-13, “Measurement of Credit Losses on Financial Instruments,for Income Taxes,” issued by the Financial Accounting Standards Board (or, the “FASB”) in 20162019, which removes the specific exceptions to the general principles in ASC 740, “Income Taxes,” and amended in 2018 by ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses,” which introduces the current expected credit losses model in the estimation of credit losses on financial instruments. The adoption of this new accounting guidance did not impact the opening deficit balance as of January 1, 2020. As a resultclarifies certain aspects of the adoption of ASU 2016-13, our accounts receivable accounting policy was updated as follows:
Accounts receivable are recorded at cost, net of an allowance for expected credit losses that is based on expected collectability, and such carrying value approximates fair value.
Accounts receivable are subject to impairment review that is based on the aging method. Impairment is calculated based on how long a receivable has been outstanding. We established an impairment loss allowance by considering historical credit loss experience (based on days past due), current conditions, and forward-looking factors specific to the customers and the economic environment.
We also consider if we are no longer doing business with the customer, and any other factors that may affect collectability from customers with significant outstanding balances. A receivable is written off when there is no reasonable expectation of recovering the contractual cash flows. Usually, the allowance for doubtful accounts fully covers the receivable.
ASU 2018-13 “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement”
Effective January 1, 2020, we adopted ASU 2018-13 “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement” issued by the FASB in 2018.existing guidance. The adoption of this accounting guidance did not impact our Consolidated Financial Statements and disclosures.

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RESOLUTE FOREST PRODUCTS INC.
Notes to Unaudited Interim Consolidated Financial Statements

ASU 2018-15 “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract”
Effective January 1, 2020, we adopted ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” issued by the FASB in 2018, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The adoption of this accounting guidance did not materially impact our results of operations or financial position.
Accounting pronouncement not yet adopted as of June 30, 2020March 31, 2021
ASU 2020-04 “Reference Rate Reform”
In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform,” amended in January by ASU 2021-01, “Reference Rate Reform - Scope,” which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. This update provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform. This update is effective as of March 12, 2020, through December 31, 2022. We are currently evaluating this accounting guidance and have not elected an adoption date. We do not expect this accounting guidance to materially impact our results of operations or financial position.

Note 2. Other (Expense) Income, Net
Other (expense) income, net for the three months ended March 31, 2021 and 2020, was comprised of the following:
Three Months Ended
March 31,
(Unaudited, in millions)20212020
Foreign exchange (loss) gain$(5)$23 
(Loss) gain on commodity contracts (1)
(37)4 
Miscellaneous (expense) income(3)1 
 $(45)$28 
(1)    Principally related to lumber futures contracts, of which a $14 million loss was unrealized for the three months ended March 31, 2021.
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RESOLUTE FOREST PRODUCTS INC.
Notes to Unaudited Interim Consolidated Financial Statements

Note 2. Business Acquisition
On February 1, 2020 (or, the “Acquisition Date”), we acquired from Conifex Timber Inc. all of the equity securities and membership interests in certain of its subsidiaries, the business of which consists mainly in the operation of three sawmills and related assets in Cross City (Florida) and in Glenwood and El Dorado (Arkansas) (or, the “U.S. Sawmill Business”). The U.S. Sawmill Business acquired produces construction-grade dimensional lumber and decking products from locally sourced southern yellow pine for distribution within the U.S. This acquisition will diversify our lumber production, and increase our operating capacity in the U.S. South.
The fair value of the consideration, paid in cash, for the U.S. Sawmill Business acquired is $173 million. We intend to structure the acquisition as an asset purchase for tax purposes.
We account for business combinations using the acquisition method when control is transferred to us. Under this approach, identifiable assets acquired and liabilities assumed are recorded at their respective fair values at the date of acquisition. Any amount of the purchase price paid that is in excess of the estimated fair values of net identifiable assets acquired is recorded in “Goodwill” in our Consolidated Balance Sheets. Transaction costs are expensed as incurred in our Consolidated Statements of Operations.
The following table summarizes our preliminary allocation of the purchase price to the fair values of assets acquired and liabilities assumed at the Acquisition Date:
(Unaudited, in millions)  
Current assets (1)
$19
Fixed assets (2)
 114
Amortizable intangible assets (3)
 21
Operating lease right-of-use assets 2
Goodwill (4)
 31
Total assets acquired and goodwill$187
Current liabilities$11
Long-term debt, net of current portion 2
Operating lease liabilities, net of current portion 1
Total liabilities assumed$14
Net assets acquired$173
   
Fair value of consideration transferred$173
(1)
Includes cash and cash equivalents of $1 million.
(2)
We recognized a $36 million reduction from the preliminary valuation of fixed assets reported as of March 31, 2020.
(3)
We identified and separately recognized customer relationships of $21 million since our preliminary purchase price allocation reported as of March 31, 2020. These intangible assets are being amortized over a weighted-average useful life of 10 years. The fair value of the customer relationships was determined using the income approach through an excess earnings analysis discounted at a rate of 12.6%.
(4)
The revision of our preliminary allocation of the purchase price reported as of March 31, 2020, resulted in the recognition of $31 million of goodwill. The goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized and is mostly attributable to the U.S. Sawmill Business’s assembled workforce and synergies expected from combining our operations with the U.S. Sawmill Business. Goodwill will be assigned to the wood products reportable segment for the purposes of impairment testing in the future. The total amount of goodwill is deductible for tax purposes.
The allocation of the purchase price to assets acquired and liabilities assumed was based upon a preliminary valuation for all items and may be subject to adjustment during the 12-month measurement period following the Acquisition Date since we are finalizing the assumptions in regards to the fair values of these assets and liabilities.

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RESOLUTE FOREST PRODUCTS INC.
Notes to Unaudited Interim Consolidated Financial Statements

The allocation of the purchase price was based on management’s estimate of the fair values of the acquired identifiable assets and assumed liabilities using valuation techniques including income, cost and market approaches. We utilized both the cost and market approaches to value fixed assets, and both the income and cost approaches to value intangible assets (Level 3).
From the Acquisition Date to the six months period ended June 30, 2020, our consolidated financial results included sales of $44 million and net income of $6 million attributable to the U.S. Sawmill Business. In connection with the acquisition of the U.S. Sawmill Business, we also recognized transaction costs of $3 million in “Other income (expense), net” in our Consolidated Statements of Operations for the six months ended June 30, 2020.
The following unaudited pro forma information for the three and six months ended June 30, 2020 and 2019, represents our results of operations as if the acquisition of the U.S. Sawmill Business had occurred on January 1, 2019, excluding the results of operations of the El Dorado sawmill that has been idled since October 2019. This pro forma information does not purport to be indicative of the results that would have occurred for the periods presented or that may be expected in the future.
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(Unaudited, in millions)2020  2019   2020  2019  
Sales$612
 $781
  $1,309
 $1,597
 
Net income attributable to Resolute Forest Products Inc.$6
 $25
  $5
 $67
 

Note 3. Other Income (Expense), Net
Other income (expense), net for the three and six months ended June 30, 2020 and 2019, was comprised of the following:
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(Unaudited, in millions)2020  2019   2020  2019  
Foreign exchange (loss) gain$(9) $(6)  $14
 $(10) 
Insurance recovery (1)
 15
  —
   15
  —
 
Miscellaneous income 4
  5
   9
  5
 
 $10
 $(1)  $38
 $(5) 
(1)
We recorded $15 million as other income for the three and six months ended June 30, 2020, from the settlement of an insurance claim in connection with our acquisition of Atlas Paper Holdings, Inc. (or, “Atlas”) in 2015.

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RESOLUTE FOREST PRODUCTS INC.
Notes to Unaudited Interim Consolidated Financial Statements

Note 4.3. Accumulated Other Comprehensive Loss
The change in our accumulated other comprehensive loss by component (net of tax) for the three and six months ended June 30,March 31, 2021 and 2020, and 2019, was as follows:
(Unaudited, in millions)Unamortized Prior Service CostUnamortized Actuarial LossesForeign
Currency
Translation		Total
Balance as of December 31, 2020$(1)$(1,307)$(6)$(1,314)
Other comprehensive income before reclassifications (1)
0 22 0 22 
Amounts reclassified from accumulated other comprehensive loss(1)15 0 14 
Net current period other comprehensive (loss) income(1)37 0 36 
Balance as of March 31, 2021$(2)$(1,270)$(6)$(1,278)
(Unaudited, in millions)Unamortized Prior Service CreditsUnamortized Actuarial Losses
Foreign
Currency
Translation
Total
Balance as of March 31, 2020$1
 $(1,175) $(7) $(1,181) 
Amounts reclassified from accumulated other comprehensive loss (1)  11
  —
  10
 
Balance as of June 30, 2020$—
 $(1,164) $(7) $(1,171) 
(1)    The indefinite idling of the Amos and Baie-Comeau (Quebec) mills triggered curtailment and remeasurement of the pension and other postretirement benefit (or, “OPEB”) obligations related to their plans as of March 31, 2021, resulting in a curtailment gain of $8 million and an actuarial gain of $22 million, totaling $30 million ($22 million net of tax).
(Unaudited, in millions)Unamortized Prior Service CreditUnamortized Actuarial LossesForeign
Currency
Translation		Total
Balance as of December 31, 2019$16 $(1,189)$(6)$(1,179)
Other comprehensive loss before reclassifications0 0 (1)(1)
Amounts reclassified from accumulated other comprehensive loss(15)14 0 (1)
Net current period other comprehensive (loss) income(15)14 (1)(2)
Balance as of March 31, 2020$1 $(1,175)$(7)$(1,181)
(Unaudited, in millions)Unamortized Prior Service CreditsUnamortized Actuarial Losses
Foreign
Currency
Translation
Total
Balance as of December 31, 2019$16
 $(1,189) $(6) $(1,179) 
Other comprehensive loss before reclassifications —
  —
  (1)  (1) 
Amounts reclassified from accumulated other comprehensive loss (16)  25
  —
  9
 
Net current period other comprehensive (loss) income (16)  25
  (1)  8
 
Balance as of June 30, 2020$—
 $(1,164) $(7) $(1,171) 
The reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2021 and 2020, were comprised of the following:
Three Months Ended March 31,
(Unaudited, in millions)20212020Affected Line in the Consolidated Statements of Operations
Unamortized Prior Service Costs or Credits
Amortization of prior service costs or credits$0 $(1)
Non-operating pension and other postretirement benefit credits (1)
Curtailment gain(1)(14)
Non-operating pension and other postretirement benefit credits (1)
0 0 Income tax provision
Net of tax(1)(15)
Unamortized Actuarial Losses
Amortization of actuarial losses19 14 
Non-operating pension and other postretirement benefit credits (1)
Other items0 3 
(4)(3)Income tax provision
Net of tax15 14 
Total Reclassifications$14 $(1)

(1)These items are included in the computation of net periodic benefit cost (credit) related to our pension and OPEB plans summarized in Note 9, “Employee Benefit Plans.”
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(Unaudited, in millions)Unamortized Prior Service CreditsUnamortized Actuarial Losses
Foreign
Currency
Translation
Total
Balance as of March 31, 2019$25
 $(965) $(7) $(947) 
Other comprehensive loss before reclassifications —
  (3)  —
  (3) 
Amounts reclassified from accumulated other comprehensive loss (4)  6
  —
  2
 
Net current period other comprehensive (loss) income (4)  3
  —
  (1) 
Balance as of June 30, 2019$21
 $(962) $(7) $(948) 
(Unaudited, in millions)Unamortized Prior Service CreditsUnamortized Actuarial Losses
Foreign
Currency
Translation
Total
Balance as of December 31, 2018$28
 $(971) $(7) $(950) 
Other comprehensive loss before reclassifications —
  (3)  —
  (3) 
Amounts reclassified from accumulated other comprehensive loss (7)  12
  —
  5
 
Net current period other comprehensive (loss) income (7)  9
  —
  2
 
Balance as of June 30, 2019$21
 $(962) $(7) $(948) 


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RESOLUTE FOREST PRODUCTS INC.
Notes to Unaudited Interim Consolidated Financial Statements

The reclassifications out of accumulated other comprehensive loss for the three and six months ended June 30, 2020 and 2019, were comprised of the following:
 Three Months Ended June 30,Six Months Ended 
 June 30,		 
(Unaudited, in millions)2020  2019  2020  2019  Affected Line in the Consolidated Statements of Operations
Unamortized Prior Service Credits             
Amortization of prior service credits$(1) $(3) $(2) $(6) 
Non-operating pension and other postretirement benefit credits (1)
Other items —
  (1)  (14)  (1)  
  —
  —
  —
  —
 Income tax provision
Net of tax (1)  (4)  (16)  (7)  
Unamortized Actuarial Losses             
Amortization of actuarial losses 15
  7
  29
  15
 
Non-operating pension and other postretirement benefit credits (1)
Other items —
  —
  3
  —
  
  (4)  (1)  (7)  (3) Income tax provision
Net of tax 11
  6
  25
  12
  
Total Reclassifications$10
 $2
 $9
 $5
  
(1)
These items are included in the computation of net periodic benefit cost (credit) related to our pension and other postretirement benefit (or, “OPEB”) plans summarized in Note 9, “Employee Benefit Plans.”

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RESOLUTE FOREST PRODUCTS INC.
Notes to Unaudited Interim Consolidated Financial Statements

Note 5.4. Net Income (Loss) Per Share
The reconciliation of the basic and diluted net income (loss) per share for the three and six months ended June 30,March 31, 2021 and 2020, and 2019, was as follows:
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(Unaudited, in millions, except per share amounts)2020  2019   2020  2019  
Numerator:             
Net income attributable to Resolute Forest Products Inc.$6
 $25
  $5
 $67
 
Denominator:             
Weighted-average number of Resolute Forest Products Inc. common shares outstanding 88.1
  92.4
   88.1
  92.4
 
Dilutive impact of nonvested stock unit awards 0.1
  1.2
   0.1
  1.4
 
Diluted weighted-average number of Resolute Forest Products Inc. common shares outstanding 88.2
  93.6
   88.2
  93.8
 
Net income per share attributable to Resolute Forest Products Inc. common shareholders:             
Basic$0.07
 $0.27
  $0.06
 $0.73
 
Diluted$0.07
 $0.27
  $0.06
 $0.71
 

Three Months Ended
March 31,
(Unaudited, in millions, except per share amounts)20212020
Numerator:
Net income (loss) attributable to Resolute Forest Products Inc.$87 $(1)
Denominator:
Weighted-average number of Resolute Forest Products Inc. common shares outstanding81.2 88.1 
Dilutive impact of nonvested stock unit awards0.7 0 
Diluted weighted-average number of Resolute Forest Products Inc. common shares outstanding81.9 88.1 
Net income (loss) per share attributable to Resolute Forest Products Inc. common shareholders:
Basic$1.07 $(0.01)
Diluted$1.06 $(0.01)
The weighted-average number of outstanding stock options and nonvested equity-classified restricted stock units, deferred stock units and performance stock units (collectively, “stock unit awards”) that were excluded from the calculation of diluted net income (loss) per share, as their impact would have been antidilutive, for the three and six months ended June 30,March 31, 2021 and 2020, and 2019, was as follows:
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(Unaudited, in millions)2020
 2019
  2020
 2019
 
Stock options0.9
 1.0
  0.9
 1.0
 
Stock unit awards0.9
 —
  0.9
 —
 

Three Months Ended
March 31,
(Unaudited, in millions)20212020
Stock options0.8 1.0 
Stock unit awards0 1.5 
Note 6.5. Inventories, Net
Inventories, net as of June 30, 2020March 31, 2021 and December 31, 2019,2020, were comprised of the following:
(Unaudited, in millions)March 31,
2021		December 31,
2020
Raw materials$157 $132 
Work in process53 46 
Finished goods137 120 
Mill stores and other supplies165 164 
 $512 $462 
Note 6. Other Assets
Other assets include countervailing and anti-dumping duty cash deposits on softwood lumber of $224 million and $51 million, respectively, as of March 31, 2021, and of $194 million and $49 million, respectively, as of December 31, 2020. See Note 11, “Commitments and Contingencies” for more information.
(Unaudited, in millions)June 30,
2020		December 31,
2019
Raw materials$107
 $128
 
Work in process 52
  46
 
Finished goods 155
  164
 
Mill stores and other supplies 192
  184
 
 $506
 $522
 
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RESOLUTE FOREST PRODUCTS INC.
Notes to Unaudited Interim Consolidated Financial Statements

Note 7. Accounts Payable and Accrued LiabilitiesOther
Accounts payable and accrued liabilitiesother as of June 30, 2020March 31, 2021 and December 31, 2019,2020, were comprised of the following:
(Unaudited, in millions)March 31,
2021		December 31,
2020
Trade accounts payable$275 $251 
Accrued compensation63 76 
Accrued interest3 4 
Pension and other postretirement benefit obligations15 14 
Income and other taxes payable3 5 
Derivative financial instruments (1)
14 0 
Other25 19 
$398 $369 
(Unaudited, in millions)June 30,
2020		December 31,
2019
Trade accounts payable$226
 $255
 
Accrued compensation 42
  52
 
Accrued interest 4
  3
 
Pension and other postretirement benefit obligations 14
  15
 
Income and other taxes payable 4
  4
 
Other 10
  13
 
 $300
 $342
 

(1)    As of March 31, 2021, we had 1,000 outstanding lumber futures contracts of 110,000 board feet each, at an average price of $815.70 per 1,000 board feet with various maturity dates in 2021, representing the majority of our derivative financial instruments.
Note 8. Long-Term Debt
Overview
Long-term debt, including current portion, as of June 30, 2020March 31, 2021 and December 31, 2019,2020, was comprised of the following:
(Unaudited, in millions)March 31,
2021		December 31,
2020
4.875% senior unsecured notes due 2026:
Principal amount$300 $0 
Deferred financing costs(6)0 
Total 4.875% senior unsecured notes due 2026294 0 
5.875% senior unsecured notes due 2023:
Principal amount0 375 
Deferred financing costs0 (2)
Unamortized discount0 (1)
Total 5.875% senior unsecured notes due 20230 372 
Senior secured credit facility - Term loans due 2030180 180 
Finance lease obligations8 9 
Total debt482 561 
Less: Current portion of finance lease obligations(2)(2)
Long-term debt, net of current portion$480 $559 
Senior Unsecured Notes
2026 Notes
On February 2, 2021, we issued $300 million aggregate principal amount of 4.875% senior unsecured notes due 2026 (or, the “2026 Notes”) at an issue price of 100%, pursuant to an indenture as of that date (or, the “indenture”). Upon their issuance, the 2026 Notes were recorded at their fair value of $300 million. Interest on the 2026 Notes is payable semi-annually on March 1 and September 1 of each year, beginning on September 1, 2021, until their maturity date of March 1, 2026. In connection with the issuance of the 2026 Notes, we incurred financing costs of $6 million, which were deferred and recorded as a reduction of the principal. Deferred financing costs are amortized to “Interest expense” in our Consolidated Statements of Operations using the interest method over the term of the notes.
(Unaudited, in millions)June 30,
2020		December 31,
2019
5.875% senior unsecured notes due 2023:      
Principal amount$375
 $375
 
Deferred financing costs (2)  (3) 
Unamortized discount (1)  (1) 
Total 5.875% senior unsecured notes due 2023 372
  371
 
Term loans due 2030 180
  —
 
Borrowings under revolving credit facilities 69
  71
 
Finance lease obligations 9
  7
 
Total debt 630
  449
 
Less: Current portion of finance lease obligations (2)  (1) 
Long-term debt, net of current portion$628
 $448
 
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RESOLUTE FOREST PRODUCTS INC.
Notes to Unaudited Interim Consolidated Financial Statements
The 2026 Notes are guaranteed by current and future wholly-owned U.S. subsidiaries that guarantee the ABL Credit Facility and the Senior Secured Credit Facility (each, as defined and discussed below). The notes are unsecured and effectively junior to indebtedness under each of the ABL Credit Facility, the Senior Secured Credit Facility, the Loan Facility and future secured indebtedness to the extent of the value of the collateral that secures such indebtedness. In addition, the notes are structurally subordinated to all existing and future indebtedness (including the Loan Facility) and other liabilities of our subsidiaries that do not guarantee the notes, including all our non-U.S. subsidiaries.

The terms of the indenture impose certain restrictions, subject to a number of exceptions and qualifications, including limits on our ability to: incur additional indebtedness or issue certain preferred shares; make dividend payments on or make other distributions in respect of our capital stock or make other restricted payments; make certain investments; sell certain assets; create liens on assets; consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and enter into certain transactions with our affiliates.

In the event of specified change of control triggering events, we shall be required to offer to repurchase the 2026 Notes at 101% of the principal amount, plus accrued and unpaid interest.
On or after March 1, 2023, we may redeem the notes at our option, in whole at any time or in part from time to time, at redemption prices equal to a percentage of the principal amount plus accrued and unpaid interest, as follows:
Year (beginning March 1)Redemption Price
2023102.438 %
2024101.219 %
2025 and thereafter100.000 %
The fair value of the 2026 Notes (Level 1) was $301 million as of March 31, 2021.
2023 Notes
We issued $600 million in aggregate principal amount of 5.875% senior unsecured notes due 2023 (or, the “2023 Notes”) on May 8, 2013. Upon their issuance, the 2023 Notes were recorded at their fair value of $594 million, which reflected a discount of $6 million that iswas being amortized to “Interest expense” in our Consolidated Statements of Operations using the interest method over the term of the 2023 Notes, resulting in an effective interest rate of 6%. Interest on the 2023 Notes iswas payable semi-annually beginning November 15, 2013, until their maturity date of May 15, 2023.2013. In connection with the issuance of the 2023 Notes, we incurred financing costs of $9 million, which were deferred and recorded as a reduction of the 2023 Notes. Deferred financing costs arewere amortized to “Interest expense” in our Consolidated Statements of Operations using the interest method over the term of the 2023 Notes.
On January 3, 2019, we repurchased $225 million in aggregate principal amount of the 2023 Notes, pursuant to a notes purchase agreement entered into on December 21, 2018, with certain noteholders, at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest.
On February 2, 2021, we placed the net proceeds from the issuance of the 2026 Notes together with additional cash, into trust for the benefit of the holders of the 2023 Notes to redeem all of the $375 million aggregate principal amount of the 2023 Notes (or, the “Redemption”) at a price of 100% of the aggregate principal amount thereof, plus accrued and unpaid interest to, but not including, the redemption date. The Redemption occurred on February 18, 2021. As a result of the repurchase, we recorded a net loss on extinguishment of debt of $3 million in “Other (expense) income, (expense), net” in our Consolidated Statement of Operations for the sixthree months ended June 30, 2019.March 31, 2021.
The fair value of the 2023 Notes (Level 1) was $341 million and $380$375 million as of June 30, 2020 and December 31, 2019, respectively.

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RESOLUTE FOREST PRODUCTS INC.
Notes to Unaudited Interim Consolidated Financial Statements

2020.
Senior Secured Credit Facility
On September 7, 2016, we entered into a senior secured credit facility for up to $185 million. This senior secured credit facility provided a term loan of $46 million with a maturity date of September 7, 2025, and a revolving credit facility of up to $139 million with a maturity date of September 7, 2022. On October 28, 2019, we entered into an amended and restated senior secured credit facility (or, the “Senior Secured Credit Facility”) for up to $360 million, replacing our existing $185 million senior secured credit facility. The Senior Secured Credit Facility providesprovided a term loan facility of up to $180 million with a delayed draw period of up to three years, and the choice of maturities of six to 10ten years from the date of drawing (or, the “Term Loan Facility”), and a six-year revolving credit facility of up to $180 million with a maturity date of October 28, 2025 (or, the
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“Revolving Credit Facility”). On October 28, 2019, we repaid our $46 million term loan by borrowing under the Revolving Credit Facility. In March 2020, we borrowed $180 million in term loans under the Term Loan Facility for ten years, maturing in March 2030. There is also an uncommitted option to increase the Senior Secured Credit Facility by up to an additional $360 million, subject to certain terms and conditions. On October 28, 2019, we repaid our $46 million term loan by borrowingThe obligations under the RevolvingSenior Secured Credit Facility.Facility are guaranteed by certain of our material U.S. subsidiaries.
In March 2020, we borrowed under the Term Loan Facility $180 million in term loans maturing in 2030. As of June 30, 2020,March 31, 2021, we had $128$180 million of availability under the Revolving Credit Facility, net of $52 million of borrowings.which was undrawn. The fair valuesvalue of the Term Loan Facility (Level 2) approximated its carrying value and Revolving Credit Facility (Level 2) approximated their carrying valueswas bearing interest at LIBOR plus a spread of 2.13% as of both June 30, 2020March 31, 2021 and December 31, 2019.2020.
On April 19, 2021, we entered into a first amendment to the amended and restated Senior Secured Credit Facility. For more information, see Note 14, “Subsequent Event,” to our consolidated Financial Statements.
ABL Credit Facility
On May 14, 2019, we entered into an amended senior secured asset-based revolving credit facility (or, the “ABL Credit Facility”) with an aggregate lender commitment of up to $500 million at any time outstanding, subject to borrowing base availability based on specified advance rates, eligibility criteria and customary reserves. The amended credit agreement provides for an extension of the maturity date to May 14, 2024.
Effective January 21, 2021, we reduced the commitment under the Canadian tranche of our senior secured asset-based revolving credit facility by $50 million, to $250 million, resulting in an aggregate commitment of $450 million, subject to borrowing base limitations. The obligations under the ABL Credit Facility are guaranteed by certain of our material subsidiaries.
As of June 30, 2020,March 31, 2021, we had $241$293 million of availability under the ABL Credit Facility, net of $17 million of borrowings and $48which was undrawn except for $67 million of ordinary course letters of credit outstanding. The fair value
Loan Facility
On November 4, 2020, our Canadian subsidiary, Resolute FP Canada Inc., entered into a secured delayed draw term loan facility (or, the “Loan Facility”) with Investissement Québec as lender for up to C$220 million ($175 million as of March 31, 2021), subject to borrowing base availability based on 75% of the ABL Credit Facility (Level 2) approximatedcountervailing and anti-dumping duty deposits imposed by the U.S. Department of Commerce and collected by Customs and Border Protection Agency on U.S. imports of applicable softwood lumber products produced at sawmills of the Borrower and its carrying value asaffiliates located in the province of both June 30, 2020 andQuebec, Canada from April 28, 2017 to December 31, 2019.2022. The Loan Facility will bear interest at a floating rate equal to 1.45% above the one month Canadian banker’s acceptance rate. The principal shall be repayable in monthly installments over a period of eight years after an interest only period of two years from the date of the first draw. The Loan Facility is subject to prepayment requirements under certain conditions and may be repaid earlier without premium or penalty, but subject to prepayment of accrued and unpaid interest. The Loan Facility provides for a maximum of 10 draws and the fulfillment of certain conditions upon each draw. Borrowings are subject to certain restrictions.

As of March 31, 2021, we had C$185 million ($147 million) of borrowing base availability under the Loan Facility, which was undrawn.
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Notes to Unaudited Interim Consolidated Financial Statements

Note 9. Employee Benefit Plans
Pension and other postretirement benefit plans
The components of net periodic benefit cost (credit)costs (credits) relating to our pension and OPEB plans for the three and six months ended June 30,March 31, 2021 and 2020, and 2019, were as follows:
Pension Plans:
Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,		Three Months Ended
March 31,
(Unaudited, in millions)2020  2019  2020  2019  (Unaudited, in millions)20212020
Interest cost$36
 $45
 $74
 $90
 Interest cost$33 $38 
Expected return on plan assets (55) (61) (111) (124) Expected return on plan assets(54)(56)
Amortization of actuarial losses 17
 9
 32
 18
 Amortization of actuarial losses21 15 
Amortization of prior service credits —
 (1) —
 (1) 
Non-operating pension credits (2) (8) (5) (17) Non-operating pension credits0 (3)
Service cost 3
 3
 7
 7
 Service cost4 4 
Net periodic benefit costs (credits) before special events
 1
 (5) 2
 (10) 
Other (gains) losses —
 (1) 3
 (1) 
Net periodic benefit costs before special eventsNet periodic benefit costs before special events4 1 
Other (gain) lossOther (gain) loss(1)3 
$1
 $(6) $5
 $(11)  $3 $4 
OPEB Plans:
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(Unaudited, in millions)2020  2019   2020  2019  
Interest cost$1
 $1
  $2
 $2
 
Amortization of actuarial gains (2)  (2)   (3)  (3) 
Amortization of prior service credits (1)  (2)   (2)  (5) 
Non-operating other postretirement benefit credits (2)  (3)   (3)  (6) 
Service cost 1
  —
   1
  —
 
Net periodic benefit credits before special events (1)  (3)   (2)  (6) 
Curtailment gain —
  —
   (14)  —
 
 $(1) $(3)  $(16) $(6) 

Three Months Ended
March 31,
(Unaudited, in millions)20212020
Interest cost$1 $1 
Amortization of actuarial gains(2)(1)
Amortization of prior service credits0 (1)
Non-operating other postretirement benefit credits(1)(1)
Service cost0 0 
Net periodic benefit credits before special events(1)(1)
Curtailment gain0 (14)
$(1)$(15)
Defined contribution plans
Our expense for the defined contribution plans totaled $5 million and $4 million for both the three months ended June 30,March 31, 2021 and 2020, and 2019, and $8 million and $9 millionrespectively.
U.S. pension funding
The recently passed American Rescue Plan Act of 2021 includes provisions that allow for interest rate smoothing of pension funding deficits to minimize the six months ended June 30, 2020 and 2019, respectively.

impact of lower interest rates on liabilities. It also extends the amortization period for funding shortfalls from seven years to 15 years under the current rules. As the implementing guidance should be issued later this year, it is not yet possible to determine the impact on our 2021 funding.
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Notes to Unaudited Interim Consolidated Financial Statements

Note 10. Income Taxes
The income tax provision attributable to income before income taxes differs from the amounts computed by applying the U.S. federal statutory income tax rate of 21% for the three and six months ended June 30,March 31, 2021 and 2020, and 2019, as a result of the following:
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(Unaudited, in millions)2020  2019   2020  2019  
Income before income taxes$11
 $44
  $37
 $107
 
Income tax provision:             
Expected income tax provision (3)  (9)   (8)  (22) 
Changes resulting from:             
Valuation allowance (1)
 (7)  (4)   (16)  (11) 
Foreign exchange 2
  1
   (10)  4
 
U.S. tax on non-U.S. earnings (2)
 —
  (5)   —
  (5) 
State income taxes, net of federal income tax benefit —
  1
   2
  2
 
Foreign tax rate differences (2)  (4)   (5)  (9) 
Other, net (3)
 5
  1
   5
  1
 
 $(5) $(19)  $(32) $(40) 
(1)
Relates to our U.S. operations.
(2)
Reduces income tax benefits on U.S. losses for the three and six months ended June 30, 2019.
(3)
Includes $4 million for the three and six months ended June 30, 2020, related to the settlement of an insurance claim in connection with our acquisition of Atlas.

Three Months Ended
March 31,
(Unaudited, in millions)20212020
Income before income taxes$128 $26 
Income tax provision:
Expected income tax provision(27)(5)
Changes resulting from:
Valuation allowance on our U.S. operations8 (9)
Foreign exchange2 (12)
U.S. tax on non-U.S. earnings(18)— 
State income taxes, net of federal income tax benefit2 2 
Foreign tax rate differences(8)(3)
Other, net1 0 
 $(40)$(27)
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Notes to Unaudited Interim Consolidated Financial Statements

Note 11. Commitments and Contingencies
Legal matters
We become involved in various legal proceedings, claims and governmental inquiries, investigations, and other disputes in the normal course of business, including matters related to contracts, commercial and trade disputes, taxes, environmental issues, activist 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, financial reporting and disclosure obligations, corporate governance, First NationsIndigenous peoples’ claims, antitrust, governmental regulations, and other matters. Although the final outcome is subject to many variables and cannot be predicted with any degree of certainty, we regularly assess the status of the matters and establish provisions (including legal costs expected to be incurred) when we believe an adverse outcome is probable, and the amount can be reasonably estimated. Except as described below and for claims that cannot be assessed due to their preliminary nature, we believe that the ultimate disposition of these matters outstanding or pending as of June 30, 2020,March 31, 2021, will not have a material adverse effect on our Consolidated Financial Statements.
Asbestos-related lawsuits
We are involved in a number of asbestos-related lawsuits filed primarily in U.S. state courts, including certain cases involving multiple defendants. These lawsuits principally allege direct or indirect personal injury or death resulting from exposure to asbestos-containing premises. While we dispute the plaintiffs’ allegations and intend to vigorously defend these claims, the ultimate resolution of these matters cannot be determined at this time. These lawsuits frequently involve claims for unspecified compensatory and punitive damages, and we are unable to reasonably estimate a range of possible losses. However, unfavorable rulings, judgments or settlement terms could materially impact our Consolidated Financial Statements. Hearings for certain of these matters are scheduled to occur in the next twelve months.2021.
Countervailing duty and anti-dumping investigations on softwood lumber
On November 25, 2016, countervailing duty and anti-dumping petitions were filed with the U.S. Department of Commerce (or, “Commerce”) and the U.S. International Trade Commission (or, “ITC”) by certain U.S. softwood lumber products producers and forest landowners, requesting that the U.S. government impose countervailing and anti-dumping duties on Canadian-origin softwood lumber products exported to the U.S. One of our subsidiaries was identified in the petitions as being a Canadian exporting producer of softwood lumber products to the U.S. and was selected as a mandatory respondent to be investigated by Commerce in both the countervailing duty and anti-dumping investigations.
On April 24, 2017, Commerce announced its preliminary determination in the countervailing duty investigation and, as a result, after April 28, 2017, we were required to pay cash deposits to the U.S. Customs and Border Protection agency (or, “U.S.
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Notes to Unaudited Interim Consolidated Financial Statements
Customs”) at a rate of 12.82% for estimated countervailing duties on the vast majority of our U.S. imports of softwood lumber products produced at our Canadian sawmills. The preliminary rate remained in effect until August 26, 2017. Commerce changed the rate in its final affirmative determination on November 2, 2017, but the new rate did not take effect until December 28, 2017, following the ITC’s final affirmative determination and the publication by Commerce of a countervailing duty order. Since that date,Until November 30, 2020, we have been required to resume paying cash deposits to U.S. Customs at a rate of 14.70% for the vast majority of our U.S. imports of Canadian-produced softwood lumber products. On December 1, 2020, Commerce issued its final results in the countervailing duties first administrative review and established our new rate at 19.10% for countervailing duties. This rate will apply until Commerce sets a new duty rate in ansubsequent administrative review,reviews, or a new rate may be set through a remand determination by a binational panel formed pursuant to the North American Free Trade Agreement binational panelor United States-Mexico-Canada Agreement, as the case may be (or, “Panel”) on appeal. Through June 30, 2020, ourDuring the three months ended March 31, 2021, we made additional cash deposits totaled $154of $30 million, and, based on the 14.70% rate andbringing our current operating parameters, could be as high as $50 million per year. Commerce issued on January 31, 2020, its preliminary results in the countervailing duties administrative review, and on May 15, 2020, and July 10, 2020, post-preliminary results establishing our new preliminary rates at 17.57% for the period of review from April 28, 2017,total to December 31, 2017, and at 17.11% for the period of review from January 1, 2018, to December 31, 2018, which are not yet effective. The new rate to be established in the final results for the period of review from January 1, 2018, to December 31, 2018, will be used as the basis for cash deposits to U.S. Customs from the publication of the final results.$224 million.
On June 26, 2017, Commerce announced its preliminary determination in the anti-dumping investigation and, as a result, after June 30, 2017, we were required to pay cash deposits to U.S. Customs at a rate of 4.59% for estimated anti-dumping duties on the vast majority of our U.S. imports of softwood lumber products produced at our Canadian sawmills. On November 2, 2017, Commerce announced its final affirmative determination in the anti-dumping investigation and, as a result, sincefrom November 8, 2017 to November 29, 2020, we have been required to pay cash deposits to U.S. Customs, at a rate of 3.20% for the vast majority of our U.S. imports of Canadian-produced softwood lumber products. On November 30, 2020, Commerce issued its final results in the anti-dumping first administrative review and established our new rate at 1.15% for anti-dumping duties. This rate will apply until Commerce sets a duty rate in ansubsequent administrative review,reviews, or a new rate may be set through a remand determination by a Panel on appeal. Through June 30, 2020, ourDuring the three months ended March 31, 2021, we made additional cash deposits totaled $40of $2 million, and,

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Notesbringing our total to Unaudited Interim Consolidated Financial Statements

based on the 3.20% rate and our current operating parameters, could be as high as $10 million per year. On January 31, 2020, Commerce issued its preliminary results in the anti-dumping administrative review and established our new preliminary rate at 1.18%, which will not be effective until the issuance of the final results.$51 million.
On April 1, 2019, Commerce published a notice initiating the administrative reviews of the countervailing duty and anti-dumping orders on softwood lumber products from Canada. WeCanada and we were selected as a mandatory respondent in these administrative reviews and we are in the process of responding to Commerce with the information requested.reviews. On March 10, 2020, Commerce published a notice initiating the second administrative review of the countervailing duty and anti-dumping orders on softwood lumber products from Canada. We were selected as a mandatory respondent for the second administrative review of the countervailing duty order and we are acting asin the process of responding to Commerce with the information required. On March 4, 2021, Commerce published a voluntary respondent fornotice initiating the secondthird administrative review of the countervailing duty and anti-dumping orders on softwood lumber products from Canada and we were selected as a mandatory respondent for the third administrative review of the countervailing duty order.
In parallel, on September 4, 2019, a Panel issued an interim decision upholding the affirmative final injury determinations of the ITC in both investigations of softwood lumber products from Canada. The Panel remanded the ITC to reconsider several findings and ordered the ITC to submit its redetermination on remand within 90 days from the date of the Panel interim decision. On December 19, 2019, the ITC issued its redetermination on remand that maintained the affirmative final injury determinations, and on May 22, 2020, the Panel issued its final decision and affirmed in its entirety the ITC’s injury determination on remand. On January 6, 2021, and January 19, 2021, we filed our complaints supporting Panel reviews of the final results in the countervailing and anti-dumping first administrative reviews.
In addition, on August 24, 2020, the World Trade Organization’s (or, “WTO”) dispute panel issued a report (or, the “Panel Report”) in the case brought by the government of Canada in “United States — Countervailing Measures on Softwood Lumber from Canada” (DS533), concluding, among other things, that Commerce acted inconsistently with the Agreement on Subsidies and Countervailing Measures on most of the matters. On September 28, 2020, the United States notified the WTO’s dispute settlement body of its decision to appeal the Panel Report.
We are not presently able to determine the ultimate resolution of these matters, but we believe it is not probable that we will ultimately be assessed with significant duties, if any, on our U.S. imports of Canadian-produced softwood lumber products. Accordingly, 0 contingent loss was recorded in respect of these petitions in our Consolidated Statements of Operations, and our cash deposits were recorded in “Other assets” in our Consolidated Balance Sheets. Cash deposits for the countervailing duty and anti-dumping investigations through December 31, 2019, totaled $128 million and $34 million, respectively.
Fibrek acquisition
Effective July 31, 2012, we completed the final step of the transaction pursuant to which we acquired the remaining 25.4%25.40% of the outstanding Fibrek Inc. (or, “Fibrek”) shares, following the approval of Fibrek’s shareholders on July 23, 2012, and the issuance of a final order by the Quebec Superior Court in Canada (or, “Quebec Superior Court”) approving the arrangement on July 27, 2012. Certain former shareholders of Fibrek exercised rights of dissent in respect of the transaction, asking for a judicial determination of the fair value of their claim under the Canada Business Corporations Act. On September 26, 2019, the Quebec
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Notes to Unaudited Interim Consolidated Financial Statements
Superior Court rendered a decision fixing the fair value of the shares of the dissenting shareholders at C$1.99 per share, or C$31 million in aggregate, plus interest and an additional indemnity, for a total then estimated at C$44 million payable in cash. AsWe had previously reported, we had accrued C$14 million for the payment of the dissenting shareholders’ claims andclaims. Following the court decision, we accrued an additional C$30 million following the court decision.($23 million). Of the total amount ofC$44 million, C$19 million ($14 million) was payable immediately and paid on October 2, 2019, bringing the2019. The remaining balance toof C$25 million ($18 million and $1926 million as of June 30, 2020March 31, 2021 and December 31, 2019,2020 ($21 million and $20 million as of March 31, 2021 and December 31, 2020, respectively), which wasincludes accrued interest, is recorded in “Other liabilities” in our Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019.Sheets. We are appealing the decision, therefore the payment of any additional consideration and its timing will depend on the outcome of the appeal. On November 13, 2019, a legal hypothec in the amount of C$30 million was registered on our Saint-Félicien (Quebec) immovable and movable property to secure the payment of any additional amounts following the outcome of the appeal. The hearing in this matter has not yet been scheduled but is expected to occur in 2021.
Partial wind-ups of pension plans
On June 12, 2012, we filed a motion for directives with the Quebec Superior Court, the court with jurisdiction in the creditor protection proceedings under the Companies’ Creditors Arrangement Act (Canada) (or, the “CCAA Creditor Protection Proceedings”), seeking an order to prevent pension regulators in each of Quebec, New Brunswick, and Newfoundland and Labrador from declaring partial wind-ups of pension plans relating to employees of former operations in New Brunswick, and Newfoundland and Labrador, or a declaration that any claim for accelerated reimbursements of deficits arising from a partial wind-up is a barred claim under the CCAA Creditor Protection Proceedings. We contend, among other things, that any such declaration, if issued, would be inconsistent with the Quebec Superior Court’s sanction order confirming the CCAA debtors’ CCAA Plan of Reorganization and Compromise, as amended, and the terms of our emergence from the CCAA Creditor Protection Proceedings. A partial wind-up would likely shorten the period in which any deficit within those plans, which could reach up to C$150 million ($110119 million), would have to be funded if we do not obtain the relief sought. The hearing in this matter has not yet been scheduled but could occur in the next twelve months.2021.

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Notes to Unaudited Interim Consolidated Financial Statements

Environmental matters
We are subject to a number of federal or national, state, provincial, and local environmental laws, regulations, and orders in various jurisdictions. We believe our operations are in material compliance with current applicable environmental laws and regulations. Environmental regulations promulgated and orders issued in the future could require substantial additional expenditures for compliance and could have a material impact on us, in particular, and the industry in general.
We may be a “potentially responsible party” with respect to a hazardous waste site that is being addressed pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (commonly known as Superfund). We believe we will not be liable for any significant amounts at this site.
We have environmental liabilities of $8$15 million recorded as of both June 30, 2020March 31, 2021 and December 31, 2019,2020, primarily related to environmental remediation related to closed sites. The amount of these liabilities represents management’s estimate of the ultimate settlement based on an assessment of relevant factors and assumptions and could be affected by changes in facts or assumptions not currently known to management for which the outcome cannot be reasonably estimated at this time. These liabilities are included in “Accounts payable and accrued liabilities”other” and “Other liabilities” in our Consolidated Balance Sheets.
We also have asset retirement obligations of $26 million and $25 million recorded as of both June 30, 2020March 31, 2021 and December 31, 2019,2020, respectively, primarily consisting of liabilities associated with landfills, sludge basins and the dismantling of retired assets. These liabilities are included in “Accounts payable and accrued liabilities”other” and “Other liabilities” in our Consolidated Balance Sheets.
Note 12. Share Capital
On March 2, 2020, our board of directors authorized a share repurchase program of up to 15% of our common stock, for an aggregate consideration of up to $100 million. During the three and six months ended June 30, 2020,March 31, 2021, we repurchased 253,8981.7 million shares at a cost of $1$17 million. DuringNaN shares were repurchased during the three and six months ended June 30, 2019, we repurchased 720,000 shares, at a cost of $5 million under our $150 million share repurchase program, which was completed in 2019.

March 31, 2020.
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Notes to Unaudited Interim Consolidated Financial Statements

Note 13. Segment Information
We manage our business based on the products we manufacture. Accordingly, our reportable segments correspond to our principal product lines: market pulp, tissue, wood products, and paper. As of the second quarter of 2020, the results from our newsprint and specialty papers operations have been combined to form the paper reportable segment. This better reflects management’s internal analysis, given the diminishing percentage newsprint and specialty papers represent in our product portfolio. Comparative year information has been modified to conform to this revised segment presentation.
None of the income or loss items following “Operating income (loss)” in our Consolidated Statements of Operations are allocated to our segments, since those items are reviewed separately by management. For the same reason, closure costs, impairment and other related charges, gains and losses on disposition of assets, as well as other discretionary charges or credits are not allocated to our segments. We allocate depreciation and amortization expense to our segments, although the related fixed assets and amortizable intangible assets are not allocated to segment assets. Additionally, all selling, general and administrative expenses are allocated to our segments, with the exception of certain discretionary charges and credits, which we present under “corporate and other.”
Information about certain segment data for the three and six months ended June 30,March 31, 2021 and 2020, and 2019, was as follows:
(Unaudited, in millions)
Market Pulp (1)
Tissue
Wood Products (2)
PaperSegment
Total		Corporate
and Other		Total
Sales
First three months
2021$176 $42 $430 $225 $873 $— $873 
2020$177 $49 $174 $289 $689 $0 $689 
Depreciation and amortization
First three months
2021$6 $5 $11 $15 $37 $4 $41 
2020$6 $4 $11 $17 $38 $4 $42 
Operating income (loss)
First three months
2021$4 $(2)$221 $(24)$199 $(22)$177 
2020$(3)$2 $5 $(3)$1 $(9)$(8)
(1)Inter-segment sales of $7 million for both the three months ended March 31, 2021 and 2020, which were transacted either at the lowest market price of the previous month or cost, were excluded from market pulp sales.
(2)Wood products sales to our joint ventures, which are transacted at arm’s length negotiated prices, were $13 million and $5 million for the three months ended March 31, 2021 and 2020, respectively.
Note 14. Subsequent Event
(Unaudited,
in millions)
Market Pulp (1)
Tissue
Wood Products (2)
Paper
Segment
Total
Corporate
and Other
Total
Sales                   
Second quarter                   
2020$161
 $44
 $199
 $208
 $612
 $—
 $612
 
2019$189
 $43
 $168
 $355
 $755
 $—
 $755
 
First six months                   
2020$338
 $93
 $373
 $497
 $1,301
 $—
 $1,301
 
2019$420
 $82
 $329
 $719
 $1,550
 $—
 $1,550
 
Depreciation and amortization                
Second quarter                   
2020$6
 $5
 $10
 $16
 $37
 $3
 $40
 
2019$5
 $4
 $9
 $19
 $37
 $5
 $42
 
First six months        
2020$12
 $9
 $21
 $33
 $75
 $7
 $82
 
2019$10
 $9
 $17
 $36
 $72
 $10
 $82
 
Operating income (loss)                  
Second quarter                   
2020$10
 $(2) $15
 $(12) $11
 $(5) $6
 
2019$27
 $(4) $(3) $32
 $52
 $(12) $40
 
First six months                   
2020$7
 $—
 $20
 $(15) $12
 $(14) $(2) 
2019$69
 $(12) $3
 $75
 $135
 $(31) $104
 
The following significant event occurred subsequent to March 31, 2021:
(1)
•On April 19, 2021 (or, the “Effective Date”), we entered into a first amendment to the amended and restated senior secured credit facility (or, the “Senior Secured Credit Facility”) entered into on October 28, 2019. The amount available under the Senior Secured Credit Facility remains unchanged for up to $360 million and is comprised of a term loan facility of up to $180 million with a delayed draw period of up to three years and the choice of maturities of six to ten years from the date of drawing (or, the “Term Loan Facility”); and a six-year revolving credit facility of up to $180 million (or, the “Revolving Credit Facility”). On the Effective Date, we repaid our $180 million of term loans under the pre-amended Senior Secured Credit Facility with a combination of proceeds of borrowings under the Revolving Credit Facility and cash on hand. The amendment then reinstated the full amount of the Term Loan Facility. There is also an uncommitted option to increase the Senior Secured Credit Facility by up to an additional $360 million, subject to certain terms and conditions.
Inter-segment sales of $7 million and $11 million for the three months ended June 30, 2020 and 2019, respectively, and $14 million and $22 million for the six months ended June 30, 2020 and 2019, which were transacted either at the lowest market price of the previous month or cost, were excluded from market pulp sales.
(2)
Wood products sales to our joint ventures, which are transacted at arm’s length negotiated prices, were $5 million and $6 million for the three months ended June 30, 2020 and 2019, respectively, and $10 million and $11 million for the six months ended June 30, 2020 and 2019.

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Notes to Unaudited Interim Consolidated Financial Statements
The obligations under the Senior Secured Credit Facility continue to be guaranteed by certain material U.S. subsidiaries of the Company and remain secured by first priority liens on assets of our Calhoun (Tennessee) facility. Interest rates under the Amended Senior Secured Credit Facility are based, at the Company’s election, on either a floating rate based on the LIBOR, or a base rate, in each case plus a spread over the index. For loans under the Term Loan Facility, the applicable spread ranges from 0.5% to 1.4% for base rate loans, from 1.5% to 2.4% for LIBOR rate loans, and from 1.7% to 2.1% for fixed rate loans. For the Revolving Credit Facility, the applicable spread ranges from 0.5% to 1.0% for base rate loans, and from 1.5% to 2.0% for LIBOR rate loans. The amended credit agreement contains customary covenants, representations and warranties, and events of default.
17

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following management’s discussion and analysis is intended to help the reader understand Resolute Forest Products, our results of operations, cash flows and financial condition. The discussion is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes (or, the “Consolidated Financial Statements”) contained in Item 1, “Financial Statements,” of this Quarterly Report on Form 10-Q (or, “Form 10-Q”).
When we refer to “Resolute Forest Products,” “Resolute,” “we,” “our,” “us” or the “Company,” we mean Resolute Forest Products Inc. with its subsidiaries, either individually or collectively, unless otherwise indicated.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION AND USE OF THIRD-PARTY DATA
Statements in this Form 10-Q that are not reported financial results or other historical information of Resolute Forest Products are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. They include, for example, statements relating to the impact of the novel coronavirus (or, “COVID-19”) pandemic and resulting economic conditions on our business, results of operations and market price of our securities, and to our: efforts and initiatives to reduce costs, increase revenues, and improve profitability; business and operating outlook; future pension obligations; assessment of market conditions; growth strategies and prospects, and the growth potential of the Company and the industry in which we operate; liquidity; future cash flows, including as a result of the changes to our pension funding obligations; estimated capital expenditures; and strategies for achieving our goals generally. Forward-looking statements may be identified by the use of forward-looking terminology such as the words “should,” “would,” “could,” “will,” “may,” “expect,” “believe,” “see,” “anticipate,” “continue,” “attempt,” “project,” “progress,” “build,” “pursue,” “plan,” “grow”“grow,” “allow,” “look” and other terms with similar meaning indicating possible future events or potential impact on our business or Resolute Forest Products’ shareholders.
The reader is cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance. These statements are based on management’s current assumptions, beliefs, and expectations, all of which involve a number of business risks and uncertainties that could cause actual results to differ materially. The potential risks and uncertainties that could cause our actual future financial condition, results of operations, and performance to differ materially from those expressed or implied in this Form 10-Q include, but are not limited to, the impact of: the COVID-19 pandemic on our business and resulting economic conditions; developments in non-print media, including changes in consumer habits, and the effectiveness of our responses to these developments; intense competition in the forest products industry; any inability to offer products certified to globally recognized forestry management and chain of custody standards; any inability to successfully implement our strategies to increase our earnings power; the possible failure to successfully integrate acquired businesses with ours or to realize the anticipated benefits of acquisitions, such as our entry into wood manufacturing in the U.S., and tissue production and sales, or divestitures or other strategic transactions or projects, including loss of synergies following business divestitures; uncertainty or changes in political or economic conditions in the U.S., Canada or other countries in which we sell our products, including the effects of pandemics; global economic conditions; the highly cyclical nature of the forest products industry; any difficulties in obtaining timber or wood fiber at favorable prices, or at all; changes in the cost of purchased energy and other raw materials; physical, financial and financialregulatory risks associated with global, regional, and local weather conditions, and climate change; any disruption in operations or increased labor costs due to labor disputes or occupational health and safety issues; difficulties in our employee relations or in employee attraction or retention; disruptions to our supply chain, operations, or the delivery of our products, including due to public health epidemics; disruptions to our information technology systems including cybersecurity and privacy incidents; risks related to the operation and transition of legacy system applications; negative publicity, even if unjustified; currency fluctuations; any increase in the level of required contributions to our pension plans, including as a result of any increase in the amount by which they are underfunded; our ability to maintain adequate capital resources to provide for all of our substantial capital requirements; the terms of our outstanding indebtedness, which could restrict our current and future operations; changes relating to the London Interbank Offered Rate (or, the “LIBOR”), which could impact our borrowings under our credit facilities; losses that are not covered by insurance; any shutdown of machines or facilities, restructuring of operations or sale of assets resulting in any additional closure costs and long-lived asset or goodwill impairment or accelerated depreciation charges; any need to record additional valuation allowances against our recorded deferred income tax assets; our exports from one country to another country becoming or remaining subject to duties, cash deposit requirements, border taxes, quotas, or other trade remedies or restrictions; countervailing and anti-dumping duties on imports to the U.S. of the vast majority of our softwood lumber products produced at our Canadian sawmills; any failure to comply with laws or regulations generally; any additional environmental or health and safety liabilities; any violation of trade laws, export controls, or other laws relating to our international sales and operations; adverse outcomes of legal proceedings, claims and governmental inquiries, investigations, and other disputes in which we are involved; the actions of holders of a significant percentage of our common stock; and the potential risks and uncertainties set
18

forth under Part I, Item 1A, “Risk Factors,” of our annual report on Form 10-K for the year ended December 31, 2019,2020, filed with the U.S. Securities and Exchange Commission (or, the “SEC”“SEC”) on March 2, 20201, 2021 (or, the

22

“2019 2020Annual Report”), which have been heightened by the COVID-19 pandemic, including related governmental responses and economic impacts, market disruptions and resulting changes in consumer habits, and which should be read in conjunction with the COVID-19 pandemic risk factor update further set forth in Part II, Item 1A, “Risk Factors,” in this Form 10-Q.habits.
All forward-looking statements in this Form 10-Q are expressly qualified by the cautionary statements contained or referred to in this section and in our other filings with the SEC and the Canadian securities regulatory authorities. We disclaim any obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
Market and industry data
The information on industry and general economic conditions in this Form 10-Q was derived from third-party sources and trade publications we believe to be widely accepted and accurate. We have not independently verified the information and cannot assure you of its accuracy.
OVERVIEW
Resolute Forest Products is a global leader in the forest products industry with a diverse range of products, including market pulp, tissue, wood products, and paper, which are marketed in close to 70over 50 countries. The Company owns or operates some 40 facilities, as well as power generation assets, in the U.S. and Canada. We produce lumber in the U.S. and Canada, and we are the largest Canadian producer of wood products east of the Canadian Rockies, the largest producer of uncoated mechanical papers in North America, and a competitive pulp producer in North America. We are also a leading global producer of newsprint and an emerging tissue producer. Resolute has third-party certified 100% of its managed woodlands to internationally recognized sustainable forest management standards.
We report our activities in four business segments: market pulp, tissue, wood products, and paper. We believe an integrated approach across these segments maximizes value creation for our Company and stakeholders.
We are guided by our vision and values, focusing on safety, sustainability, profitability, accountability, and teamwork. We believe we can be distinguished by the following competitive strengths:
•Competitive cost structure combined with diversified and integrated asset base
–large-scale and cost-effective operations, including significant internal energy production from cogeneration and hydroelectric facilities, which support our value proposition;
–control over fiber transformation chain from standing timber to end-product for the majority of our offering;
–nearly 100% of our products sourced from high-quality virgin fiber;
–harvesting rights for the majority of fiber needs in Canada; and
–sophisticated logistics capabilities to meet demanding customer expectations.
–large-scale and cost-effective operations, including significant internal energy production from cogeneration and hydroelectric facilities, which support our value proposition;
–control over fiber transformation chain from standing timber to end-product for the majority of our offering;
–nearly 100% of our products sourced from high-quality virgin fiber;
–harvesting rights for the majority of fiber needs in Canada; and
–sophisticated logistics capabilities to meet demanding customer expectations.
•Solid balance sheet
–favorable pricing and flexibility under borrowing agreements together with our liquidity levels support our ability to weather challenging market cycles and to execute our transformation strategy;
–significant tax assets to defer cash income taxes and provide synergies to execute this strategy; and
–customers benefit from a financially stable and reliable business partner in a challenging industry.
–favorable pricing and flexibility under borrowing agreements together with our liquidity levels support our ability to weather challenging market cycles and to execute our transformation strategy;
–significant tax assets to defer cash income taxes and provide synergies to execute this strategy; and
–customers benefit from a financially stable and reliable business partner in a challenging industry.
•Seasoned management team
–deep industry expertise, with influential leaders in forestry, operations, environmental risk management and public policy;
–culture of accountability, encouraging transparency and straightforwardness; and
–core identity tied to renewable resources we harvest in a truly sustainable manner.

–deep industry expertise, with influential leaders in forestry, operations, environmental risk management and public policy;
–culture of accountability, encouraging transparency and straightforwardness; and
–core identity tied to renewable resources we harvest in a truly sustainable manner.
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19


Our Business
For information relating to our products, strategy and highlights, sustainable development and performance, and power generation assets, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Our Business” in our 20192020 Annual Report.
SecondFirst Quarter Overview
Impact of the COVID-19 pandemic
We have sustained operations across all of our business segments through the COVID-19 pandemic, but we had to take certain measures in the face of the dramatic reduction in economic activity, particularly for marketing-dependent products like newspapers, inserts, flyers and commercial paper. In particular, we continue to focus on key short-term priorities, including: operating under rigorous protocols aroundDuring the healthquarter, the Company announced the indefinite idling of its Amos and safetyBaie-Comeau (Quebec) paper mills, which were temporarily idled since spring 2020, as a result of our employees, contractorsmarket conditions and suppliers;the impacts of the pandemic, reducing our paper production consistent with the dramatic decrease in economic activity affecting demand; maintaining disciplined liquidity management; monitoring customer credit risk; and controlling spending around selling, general and administrative (or, “run-rate newsprint capacity bSG&A”) expenses and capital expenditures.
Specifically, as of the end of the second quarter, we reduced our operational footprint by temporarily idling paper machines representing in aggregate 29% of our run-rate capacityy 25% (equivalent to 49,000 metric43,000 metric tons per month). This decision led to workforce reductions and spending limitations or deferrals.
Business acquisitionSenior Unsecured Notes
On February 1, 2020,2, 2021, we acquired from Conifex Timber Inc.issued $300 million aggregate principal amount of 4.875% senior unsecured notes due 2026 (or, the “2026 Notes”) at an issue price of 100% pursuant to an indenture as of that date. We used the net proceeds of the 2026 Notes, together with cash on hand, to redeem all of the equity securities and membership interests in certainoutstanding $375 million aggregate principal amount of its subsidiaries, the businessour 5.875% senior notes due 2023, at a price of which consists mainly in the operation of three sawmills and related assets in Cross City (Florida) and in Glenwood and El Dorado (Arkansas) (or, the “U.S. Sawmill Business”). The U.S. Sawmill Business acquired produces construction-grade dimensional lumber and decking products from locally-sourced southern yellow pine for distribution within the U.S.
The fair value100% of the consideration, paidaggregate principal amount thereof, plus accrued and unpaid interest to, but not including, the redemption date. The redemption occurred on February 18, 2021.
See below under “Liquidity and Capital Resources – Capital Resources” for more information
Amendment to Senior Secured Credit Facility
On April 19, 2021, we amended the Senior Secured Credit Facility agreement in cash, fororder to repay the U.S. Sawmill Business acquired was $173 million.$180 million of pre-amended term loans, extend the maturity date of the revolving credit facility from 2025 to 2027, reduce the spread on the term loan facility by up to 10 basis points, and reinstate in full the $180 million Term Loan Facility. For more information, see Note 2, “Business Acquisition,14, “Subsequent Event,” to our Consolidated Financial Statements.

Three months ended June 30,March 31, 2021 vs. March 31, 2020 vs. June 30, 2019
Our operating income was $6$177 million in the quarter, compared to operating income of $40 million in the second quarter of 2019. Excluding special items, we incurred an operating loss of $3$8 million in the first quarter of 2020. Excluding special items, our operating income was $180 million, compared to an operating incomeloss of $40$10 million in the year-ago period. Special items are described below.
Our net income in the quarter was $6$87 million, or $0.07$1.06 per diluted share, compared to a net incomeloss of $25$1 million, or $0.27$0.01 per diluted share, in the year-ago period. Our net lossincome in the quarter, excluding special items, was $22$119 million, or $0.25$1.45 per diluted share, compared to a net incomeloss of $11$29 million, or $0.12$0.33 per diluted share, in the year-ago period.
Three Months Ended June 30, 2020Operating Income (Loss)Net Income (Loss)EPS  
(Unaudited, in millions, except per share amounts)
GAAP, as reported$6
 $6
 $0.07
 
Adjustments for special items:         
Net gain on disposition of assets (9)  (9)  (0.10) 
Non-operating pension and other postretirement benefit credits —
  (4)  (0.05) 
Other income, net —
  (10)  (0.11) 
Income tax effect of special items —
  (5)  (0.06) 
Adjusted for special items (1)
$(3) $(22) $(0.25) 

Three Months Ended March 31, 2021Operating IncomeNet IncomeEPS
(Unaudited, in millions, except per share amounts)
GAAP, as reported$177 $87 $1.06 
Adjustments for special items:
Closure costs, impairment and other related charges3 3 0.03 
Non-operating pension and other postretirement benefit credits— (2)(0.02)
Other expense, net— 45 0.55 
Income tax effect of special items— (14)(0.17)
Adjusted for special items (1)
$180 $119 $1.45 
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20


Three Months Ended March 31, 2020Operating LossNet LossEPS
(Unaudited, in millions, except per share amounts)
GAAP, as reported$(8)$(1)$(0.01)
Adjustments for special items:
Closure costs, impairment and other related charges(2)(2)(0.02)
Non-operating pension and other postretirement benefit credits— (15)(0.17)
Other income, net— (28)(0.32)
Income tax effect of special items— 17 0.19 
Adjusted for special items (1)
$(10)$(29)$(0.33)
Three Months Ended June 30, 2019Operating IncomeNet IncomeEPS  
(Unaudited, in millions, except per share amounts)
GAAP, as reported$40
 $25
 $0.27
 
Adjustments for special items:         
Non-operating pension and other postretirement benefit credits —
  (12)  (0.13) 
Other expense, net —
  1
  0.01
 
Income tax effect of special items —
  (3)  (0.03) 
Adjusted for special items (1)
$40
 $11
 $0.12
 
(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 U.S. generally accepted accounting principles (or, “GAAP”). We calculate operating income (loss), as adjusted for special items, as operating income (loss) from our Consolidated Statements of Operations, adjusted for items such as closure costs, impairment, and other related charges and gains and losses on disposition of assets that are excluded from our segment’s performance from GAAP operating income (loss). We calculate net income (loss), as adjusted for special items, as net income (loss) from our Consolidated Statements of Operations, adjusted for the same special items applied to operating income (loss), in addition to non-operating pension and other postretirement benefit (or, “OPEB”) costs and credits, other income and expense, net, and the income tax effect of the special items. EPS, as adjusted for special items, is calculated as net income (loss), as adjusted for special items, per diluted share. We believe that using these non-GAAP measures is useful because they are consistent with the indicators management uses internally to measure the Company’s performance, and it allows the reader to compare our operations and financial performance from period to period. Operating income (loss), net income (loss) and EPS, in each case as adjusted for special items, are internal 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.
Six months ended June 30, 2020 vs. June 30, 2019
Our operating loss was $2 million in the first half of the year, compared to operating income (loss), in addition to non-operating pension and other postretirement benefit (or, “OPEB”) costs and credits, other income and expense, net, and the income tax effect of $104 million in the year-ago period. Excludingspecial items. EPS, as adjusted for special items, we incurred an operating loss of $13 million, comparedis calculated as net income (loss), as adjusted for special items, per diluted share. We believe that using these non-GAAP measures is useful because they are consistent with the indicators management uses internally to operatingmeasure the Company’s performance, and it allows the reader to compare our operations and financial performance from period to period. Operating income of $104 million(loss), net income (loss) and EPS, in the year-ago period. Specialeach case as adjusted for special items, are described below.
Our net income in the first halfinternal measures, and therefore may not be comparable to those of the year was $5 million, or $0.06 per diluted share, comparedother companies. These non-GAAP measures should not be viewed as substitutes to net income of $67 million, or $0.71 per diluted share, in the year-ago period. Our net loss in the period, excluding special items, was $51 million, or $0.57 per share, compared to net income of $41 million, or $0.44 per diluted share, in the year-ago period.financial measures determined under GAAP.
21
Six Months Ended June 30, 2020Operating LossNet Income (Loss)EPS  
(Unaudited, in millions, except per share amounts)
GAAP, as reported$(2) $5
 $0.06
 
Adjustments for special items:         
Closure costs, impairment and other related charges (2)  (2)  (0.02) 
Net gain on disposition of assets (9)  (9)  (0.10) 
Non-operating pension and other postretirement benefit credits —
  (19)  (0.22) 
Other income, net —
  (38)  (0.43) 
Income tax effect of special items —
  12
  0.14
 
Adjusted for special items (1)
$(13) $(51) $(0.57) 

25


Six Months Ended June 30, 2019Operating IncomeNet IncomeEPS  
(Unaudited, in millions, except per share amounts)
GAAP, as reported$104
 $67
 $0.71
 
Adjustments for special items:         
Non-operating pension and other postretirement benefit credits —
  (24)  (0.26) 
Other expense, net —
  5
  0.06
 
Income tax effect of special items —
  (7)  (0.07) 
Adjusted for special items (1)
$104
 $41
 $0.44
 
(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 – Second Quarter Overview”above.


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RESULTS OF OPERATIONS
Consolidated Results
Selected financial information
Three Months Ended
March 31,
(Unaudited, in millions, except per share amounts)20212020
Sales$873 $689 
Operating income (loss) per segment:
Market pulp$4 $(3)
Tissue(2)2 
Wood products221 5 
Paper(24)(3)
Segment total199 1 
Corporate and other(22)(9)
Operating income (loss)$177 $(8)
Net income (loss) attributable to Resolute Forest Products Inc.$87 $(1)
Net income (loss) per common share attributable to Resolute Forest Products Inc. common shareholders:
Basic$1.07 $(0.01)
Diluted$1.06 $(0.01)
Adjusted EBITDA (1)
$221 $32 
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(Unaudited, in millions, except per share amounts)20202019 20202019
Sales$612
 $755
  $1,301
 $1,550
 
Operating income (loss) per segment:             
Market pulp$10
 $27
  $7
 $69
 
Tissue (2)  (4)   —
  (12) 
Wood products 15
  (3)   20
  3
 
Paper (12)  32
   (15)  75
 
Segment total 11
  52
   12
  135
 
Corporate and other (5)  (12)   (14)  (31) 
Operating income (loss)$6
 $40
  $(2) $104
 
Net income attributable to Resolute Forest Products Inc.$6
 $25
  $5
 $67
 
Net income per common share attributable to Resolute Forest Products Inc. common shareholders:             
Basic$0.07
 $0.27
  $0.06
 $0.73
 
Diluted$0.07
 $0.27
  $0.06
 $0.71
 
Adjusted EBITDA (1)
$37
 $82
  $69
 $186
 
(Unaudited, in millions)March 31, 2021December 31, 2020
Cash and cash equivalents$33 $113 
Total assets$3,728 $3,730 
(1)Earnings before interest expense, income taxes, and depreciation and amortization (or, “EBITDA”) and adjusted EBITDA are not financial measures recognized under GAAP. EBITDA is calculated as net income (loss) including noncontrolling interest 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 closure costs, impairment and other related charges, non-operating pension and OPEB costs and credits, and other income and expense, net. 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 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.
(Unaudited, in millions)June 30,  
 2020		December 31,  
 2019
Cash and cash equivalents$27
 $3
 
Total assets$3,667
 $3,626
 
(1)
Earnings before interest expense, income taxes, and depreciation and amortization (or, “EBITDA”) and adjusted EBITDA are not financial measures recognized under GAAP. EBITDA is calculated as net income (loss) including noncontrolling interest 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 closure costs, impairment and other related charges, gains and losses on disposition of assets, non-operating pension and OPEB costs and credits, and other income and expense, net. 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 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.

Three Months Ended
March 31,
(Unaudited, in millions)20212020
Net income (loss) including noncontrolling interest$88 $(1)
Interest expense6 9 
Income tax provision40 27 
Depreciation and amortization41 42 
EBITDA$175 $77 
Closure costs, impairment and other related charges3 (2)
Non-operating pension and other postretirement benefit credits(2)(15)
Other expense (income), net45 (28)
Adjusted EBITDA$221 $32 
27
22


 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(Unaudited, in millions)2020  2019   2020  2019  
Net income including noncontrolling interest$6
 $25
  $5
 $67
 
Interest expense 9
  7
   18
  16
 
Income tax provision 5
  19
   32
  40
 
Depreciation and amortization 40
  42
   82
  82
 
EBITDA$60
 $93
   137
  205
 
Closure costs, impairment and other related charges —
  —
   (2)  —
 
Net gain on disposition of assets (9)  —
   (9)  —
 
Non-operating pension and other postretirement benefit credits (4)  (12)   (19)  (24) 
Other (income) expense, net (10)  1
   (38)  5
 
Adjusted EBITDA$37
 $82
  $69
 $186
 
Three months ended June 30,March 31, 2021 vs. March 31, 2020 vs. June 30, 2019
Operating income (loss) variance analysis
consobridgeqtd.jpgrfp-20210331_g1.jpg
Sales
Sales decreasedincreased by $143$184 million compared to the year-ago period, to $612$873 million. After removing the sales related to the acquisition of the U.S. Sawmill Business in the first quarter of 2020, sales declined by $171 million. Lower volume reduced sales by $129 million, mainly due to the paper segment ($122 million). Pricing had an unfavorablea favorable impact of $41$253 million, mainly as a result of a dropan increase in the average transaction price for wood products and market pulp, up by 123% and 11%, respectively. Lower volume reduced sales by $70 million, mainly reflecting lower shipments of paper respectively 16% and 12%,market pulp, partly offset by an increase in average transaction price for tissue andhigher shipments of wood products, respectively 8% and 10%.products.
Cost of sales, excluding depreciation, amortization and distribution costs
Cost of sales, excluding depreciation, amortization and distribution costs (or, “COS”) decreased by $72$2 million incompared to the quarter.year-ago period. After removing the COS related to the acquisitioneffects of the U.S. Sawmill Business,lower volume and the effects of the weakerstronger Canadian dollar, and lower volume, COS improvedincreased by $16$36 million, largely reflecting:
favorable•higher fiber costs ($13 million) mainly reflecting higher stumpage costs related to current wood prices;
•an expense related to a process improvement project ($12 million);
•higher labor costs ($6 million); and
•unfavorable maintenance costs ($115 million), as a result of reduced spending, the mainly related to timing of scheduled outagesoutages.
Distribution costs
After removing the effect of lower volume and the indefinite idling of our Augusta (Georgia) mill in November 2019, partly offsetstronger Canadian dollar, distribution costs decreased by the temporary idling of the Baie-Comeau (Quebec) and Amos (Quebec) paper mills; and
a decrease in wood fiber costs ($6 million).


28

$4 million mainly due to favorable destination mix.
Selling, general and administrative expenses
SG&A expenses decreasedincreased by $4$12 million in the quarter compared to the same period last year, mainly due to lower headcount.higher incentive plan expense, which is based on company performance, and higher stock-based compensation expense.
Net gain on dispositionClosure costs, impairment and other related charges
In the first quarter of assets2021, we recorded closure costs, impairment and other related charges of $3 million, related to the
indefinite idling of our Amos and Baie-Comeau paper mills. This compares to the reversal of $2 million of closure costs, impairment and other related charges in the year-ago period, related to the indefinite idling of our paper mill at Augusta (Georgia).
23
See the corresponding variance analysis under “
Corporate and Other” below.
Net income (loss) variance analysis
Non-operating pension and other postretirement benefit credits
We recorded non-operating pension and OPEB credits of $4$2 million in the quarter, compared to $12$15 million in the year-ago period. The difference mainly reflects: lower interestan OPEB curtailment gain ($14 million) and pension special termination benefit cost ($93 million) related to the indefinite idling of our Augusta mill in the prior period, and higher amortization of actuarial losses in the current period ($5 million); partly offset by higher amortization of actuarial losseslower interest cost ($85 million) and lower amortization of prior service credits ($2 million); and lower expected return on plan assets ($6 million).in the current period.
Other (expense) income, (expense), net
We recorded other income,expense, net of $10$45 million in the quarter, compared to other expense,income, net of $1$28 million in the year-ago period. The difference mostlymainly reflects a loss on commodity contracts of $37 million principally related to lumber futures contracts and a foreign exchange loss of $5 million, compared to a foreign exchange gain of $23 million in the current period, a favorable insurance claim settlement of $15 million relatedyear-ago period. See Note 2, “Other (Expense) Income, Net,” and Note 7, “Accounts Payable and Other” to our acquisition of Atlas Paper Holdings Inc. (or “Atlas”) in 2015.Consolidated Financial Statements for more information on the loss on commodity contracts and outstanding contracts that remain subject to potential fair value changes.
Income taxes
We recorded an income tax provision of $5$40 million in the quarter on income before income taxes of $11$128 million, compared to an expected income tax provision of $3$27 million based on the U.S. federal statutory income tax rate of 21%. The difference mainly reflects: an increaseU.S. tax on non-U.S. earnings ($18 million); foreign tax rate differences ($8 million); partly offset by a valuation allowance reversal related to our U.S. operations ($8 million) where we recognize a full valuation allowance against our net deferred income tax assets.
In the first quarter of 2020, we recorded an income tax provision of $27 million, on income before income taxes of $26 million, compared to an expected income tax provision of $5 million based on the U.S. federal statutory income tax rate of 21%. The difference mainly reflects: foreign exchange items ($12 million); and a valuation allowance related to our U.S. operations ($79 million) where we recognize a valuation allowance against virtually all of our net deferred income tax assets; partially offset by other items ($5 million), mainly related to the settlement of an insurance claim in connection with our acquisition of Atlas.
In the second quarter of 2019, we recorded an income tax provision of $19 million, on income before income taxes of $44 million, compared to an expected income tax provision of $9 million based on the U.S. federal statutory income tax rate of 21%. The difference reflects: U.S. tax on non-U.S. earnings ($5 million); an increase to our valuation allowance related to our U.S. operations where we recognize a valuation allowance against virtually all of our net deferred income tax assets ($4 million); and state and foreign tax rate differences ($3 million).

29

Six months ended June 30, 2020 vs. June 30, 2019
Operating (loss) income variance analysis
consobridgeytd.jpg
Sales
Sales decreased by $249 million compared to the year-ago period, to $1,301 million. After removing the sales related to the acquisition of the U.S. Sawmill Business, sales declined by $293 million. Lower volume reduced sales by $139 million, reflecting lower shipments in paper ($143 million) and wood products ($18 million), partly offset by higher shipments of market pulp ($16 million) and tissue ($6 million). Pricing had an unfavorable impact of $153 million, mainly as a result of a drop in the average transaction price for market pulp and paper, down by 22% and 14%, respectively, slightly offset by an improvement in pricing for wood products and tissue, up 8% and 6%, respectively.
Cost of sales, excluding depreciation, amortization and distribution costs
COS decreased by $102 million in the period. After removing the COS related to the acquisition of the U.S. Sawmill Business, and the effects of the weaker Canadian dollar and lower volume, COS improved by $54 million, largely reflecting:
favorable maintenance costs ($27 million), as a result of reduced spending, the timing of scheduled outages and the indefinite idling of our Augusta mill;
lower recycled fiber prices ($8 million);
a decrease in energy prices ($8 million);
a decrease in wood fiber costs ($3 million); and
lower labor expense ($3 million), primarily due to the indefinite idling of our Augusta mill, partly offset by the temporary idling of the Baie-Comeau and Amos paper mills;
partly offset by unfavorable chemical usage ($3 million).
Selling, general and administrative expenses
SG&A expenses decreased by $7 million in the first half of 2020 compared to the same period last year, due to lower headcount.
Net gain on disposition of assetsassets.
See the corresponding variance analysis under “
Corporate and Other” below.

30

Net income variance analysis
Non-operating pension and other postretirement benefit credits
We recorded non-operating pension and OPEB credits of $19 million in the first half of 2020, compared to $24 million in the year-ago period. The difference mainly reflects: lower interest cost ($16 million); and an OPEB curtailment credit related to the indefinite idling of our Augusta mill ($14 million); partly offset by: higher amortization of actuarial losses ($14 million) and lower amortization of prior service credits ($4 million); lower expected return on plan assets ($13 million); and a pension special termination benefit cost related to the indefinite idling of our Augusta mill ($3 million).
Other income (expense), net
We recorded other income, net of $38 million in the first half of 2020, compared to other expense, net of $5 million in the year-ago period. The difference mostly reflects a favorable insurance claim settlement of $15 million related to our acquisition of Atlas in 2015 and foreign exchange gain of $14 million in the current period, compared to foreign exchange loss of $10 million in the year-ago period.
Income taxes
We recorded an income tax provision of $32 million in the period, on income before income taxes of $37 million, compared to an expected income tax provision of $8 million based on the U.S. federal statutory income tax rate of 21%. The difference mainly reflects: an increase to our valuation allowance related to our U.S. operations ($16 million) where we recognize a valuation allowance against virtually all of our net deferred income tax assets; foreign exchange items ($10 million); and state and foreign tax rate differences ($3 million); partially offset by other items ($5 million), mainly related to the settlement of an insurance claim in connection with our acquisition of Atlas.
In the first half of 2019, we recorded an income tax provision of $40 million, on income before income taxes of $107 million, compared to an expected income tax provision of $22 million based on the U.S. federal statutory income tax rate of 21%. The difference reflects: an increase to our valuation allowance related to our U.S. operations ($11 million); state and foreign tax rate differences ($7 million) and U.S. tax on non-U.S. earnings ($5 million); partly offset by foreign exchange items ($4 million).
Segment Earnings
We manage our business based on the products we manufacture. Our reportable segments correspond to our principal product lines: market pulp, tissue, wood products, and paper. As of the second quarter of 2020, the results from our newsprint and specialty papers operations have been combined to form the paper reportable segment. This better reflects management’s internal analysis, given the diminishing percentage newsprint and specialty papers represent in our product portfolio. Comparative information has been modified to conform to this revised segment presentation.
We do not allocate any of the income or loss items following “operating income (loss)” in our Consolidated Statements of Operations to our segments because those items are reviewed separately by management. Similarly, we do not allocate to the segments: closure costs, impairment and other related charges; gains and losses on disposition of assets; as well as other discretionary charges or credits.
We allocate depreciation and amortization expense to our segments, although the related fixed assets and amortizable intangible assets are not allocated to segment assets. Additionally, all SG&A expenses are allocated to our segments, with the exception of certain discretionary charges and credits, which we present under “corporate and other.”

24
31

MARKET PULP
Highlights
Three Months Ended
March 31,
(Unaudited, in millions, except where otherwise stated)20212020
Sales$176 $177 
Operating income (loss) (1)
$4 $(3)
EBITDA (2)
$10 $3 
(In thousands of metric tons)
Shipments272 303 
Downtime25 — 
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(Unaudited, in millions, except where otherwise stated)2020  2019   2020  2019  
Sales$161
 $189
  $338
 $420
 
Operating income (1)
$10
 $27
  $7
 $69
 
EBITDA (2)
$16
 $32
  $19
 $79
 
(In thousands of metric tons)             
Shipments 258
  257
   561
  543
 
Downtime 33
  15
   33
  23
 
March 31,
(Unaudited, in thousands of metric tons)20212020
Finished goods inventory46 69 
(1)Net income (loss) including noncontrolling interest is equal to operating income (loss) in this segment.
 June 30,
(Unaudited, in thousands of metric tons)20202019
Finished goods inventory 87
  110
 
(1)
Net income including noncontrolling interest 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 financial information”(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 financial information” above.
Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,		Three Months Ended
March 31,
(Unaudited, in millions)2020  2019  2020  2019  (Unaudited, in millions)20212020
Net income including noncontrolling interest$10
 $27
 $7
 $69
 
Net income (loss) including noncontrolling interestNet income (loss) including noncontrolling interest$4 $(3)
Depreciation and amortization 6
 5
 12
 10
 Depreciation and amortization6 6 
EBITDA$16
 $32
 $19
 $79
 EBITDA$10 $3 
Industry trends
pulptrends.jpg

32

rfp-20210331_g2.jpg
World demand for chemical pulp grewdecreased by 7.8%4.0% in the first fivetwo months of 20202021 compared to the year-ago period, reflecting an increasea decrease in Western Europe and China of 11.6%5.7% and 1.5%, respectively, while North America was downincreased by 1.3%, and Western Europe was essentially flat.9.9%. World capacity grewdecreased by 0.2% over the same1.5% compared to last period.
25

World demand for softwood pulp grewfell by 1.4%8.4% in the first fivetwo months of 2020,2021, reflecting an increasea decrease of 5.8%13.4% and 3.4% in China and Western Europe, respectively, while North America while Western Europe and China were down by 6.4% and 1.3%, respectively.stayed stable. The operating rate was 93%87%.
In the same period, world demand for hardwood pulp rosefell by 13.1%2.5%, with shipments to China and Western Europe down by 8.1%, while shipments to North America and China were up by 19.9%23.7% and 3.7%, respectively, while North America was down by 9.8%4.5%. The operating rate was 91%89%.
Three months ended June 30,March 31, 2021 vs. March 31, 2020 vs. June 30, 2019
Operating income (loss) variance analysis
pulpbridgeqtd.jpgrfp-20210331_g3.jpg
Sales
Sales were $28 million lower, or 15%, to $161 millionremained essentially unchanged in the quarter. Salesquarter at $176 million. Lower sales volume of $18 million was $3 million higher, butoffset by an increase in pricing reduced sales by $31of $17 million, reflecting a declinean increase in the average transaction price of $120 per metric ton, mostly in virgin pulp grades due to softer market conditions.
Cost of sales, excluding depreciation, amortization and distribution costs
After adjusting for the effects of higher volume and the weaker Canadian dollar, manufacturing costs improved by $9 million, reflecting:
favorable maintenance costs ($5 million), mainly due to the timing of scheduled outages and reduced spending; and
lower energy prices, and favorable chemical usage and prices ($4 million).


33

Six months ended June 30, 2020 vs. June 30, 2019
Operating income variance analysis
pulpbridgeytd.jpg
Sales
Sales were $82 million lower, or 20%, to $338 million in the first half of the year. Sales volume was $16 million higher. Pricing reduced sales by $98 million, reflecting a decline in the average transaction price of $174$62 per metric ton due to a significant drop inprice increase across all pulp grades.
Cost of sales, excluding depreciation, amortization and distribution costs
After adjusting forremoving the effectseffect of higherlower volume and the weakerstronger Canadian dollar, our manufacturing costs improved by $27 million, reflecting:
a decrease in wood fiber costs ($11 million);
favorable maintenance costs ($9 million), mainly dueremained essentially unchanged compared to the timing of scheduled outages; and
lower energy prices ($5 million).

year-ago period.
34
26

TISSUE
Highlights
Three Months Ended
March 31,
(Unaudited, in millions, except where otherwise stated)20212020
Sales$42 $49 
Operating (loss) income (1)
$(2)$2 
EBITDA (2)
$3 $6 
(In thousands of short tons)
Shipments (3)
23 28 
Downtime— — 
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(Unaudited, in millions, except where otherwise stated)2020  2019   2020  2019  
Sales$44
 $43
  $93
 $82
 
Operating loss (1)
$(2) $(4)  $—
 $(12) 
EBITDA (2)
$3
 $—
  $9
 $(3) 
(In thousands of short tons)             
Shipments (3)
 24
  25
   52
  49
 
Downtime 2
  —
   2
  1
 
March 31,
(Unaudited, in thousands of short tons)20212020
Finished goods inventory (3)
8 5 
(1)Net (loss) income including noncontrolling interest is equal to operating (loss) income in this segment.
 June 30,
(Unaudited, in thousands of short tons)20202019
Finished goods inventory (3)
 5
  7
 
(1)
Net loss including noncontrolling interest 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 financial information”(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 financial information” above.
(3)
Tissue converted products, which are measured in cases, are converted to short tons.
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(Unaudited, in millions)2020  2019   2020  2019  
Net loss including noncontrolling interest$(2) $(4)  $—
 $(12) 
Depreciation and amortization 5
  4
   9
  9
 
EBITDA$3
 $—
  $9
 $(3) 
(3)Tissue converted products, which are measured in cases, are converted to short tons.
Three Months Ended
March 31,
(Unaudited, in millions)20212020
Net (loss) income including noncontrolling interest$(2)$2 
Depreciation and amortization5 4 
EBITDA$3 $6 
Industry trends
tissuetrends.jpgrfp-20210331_g4.jpg
Total U.S. tissue consumption grew by 6.4%1.3% in the first halfthree months of 20202021 compared to the year-ago period. Converted product shipments increaseddecreased by 10.2%5.6%, led bywhere at-home shipments updecreased by 18.4%5.1%, whileand away-from-home shipments decreased by 6.0%6.7%.

3527


U.S. parent roll production rosefell by 5.8%0.4% in the first sixthree months, contributing to a 97%and the average industry production-to-capacity ratio updecreased to 93%, down from 93%94% in the year-ago period.
Three months ended June 30,March 31, 2021 vs. March 31, 2020 vs. June 30, 2019
Operating loss(loss) income variance analysis
tissuebridgeqtd.jpgrfp-20210331_g5.jpg
Sales
Sales were $1$7 million higher,lower, or 2%14%, to $44$42 million in the quarter. Shipments decreased by 5,000 short tons mainly in away-from-home products, due to the ongoing pandemic. The average transaction price was $128$80 per short ton higher, due to favorable product mix and price increases. Shipments decreased by 1,000 short tons.pricing on converted products.
Cost of sales, excluding depreciation, amortization and distribution costs
After removing the effect of lower volume, our manufacturing costs increased by $1$3 million compared to the year-ago period, mainly due to an expense related to a process improvement project ($2 million) and costs to ramp-up the timingHagerstown (Maryland) converting facility acquired in the fourth quarter of annual outages.2020 ($1 million).


36
28


Six months ended June 30, 2020 vs. June 30, 2019
Operating loss variance analysis
tissueybridgeytd.jpg
Sales
Sales were $11 million higher, or 13%, to $93 million in the first half of the year. The average transaction price was $108 per short ton higher, due to favorable product mix and price increases. Higher volume increased sales by $6 million, mainly due to the rapid increase in customer demand in the first quarter during the early stages of the pandemic, and productivity improvement.
Cost of sales, excluding depreciation, amortization and distribution costs
After removing the effect of higher volume, our manufacturing costs improved by $2 million compared to the year-ago period, mainly due to favorable wood fiber costs.



37

WOOD PRODUCTS
Highlights
Three Months Ended
March 31,
(Unaudited, in millions, except where otherwise stated)20212020
Sales$430 $174 
Operating income (1)
$221 $5 
EBITDA (2)
$232 $16 
(In millions board feet)  
Shipments (3)
492 443 
Downtime30 95 
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(Unaudited, in millions, except where otherwise stated)2020  2019   2020  2019  
Sales$199
 $168
  $373
 $329
 
Operating income (loss) (1)
$15
 $(3)  $20
 $3
 
EBITDA (2)
$25
 $6
  $41
 $20
 
(In millions board feet)             
Shipments (3)
 521
  484
   964
  912
 
Downtime 73
  53
   168
  94
 
March 31,
(Unaudited, in millions board feet)20212020
Finished goods inventory (3)
143 148 
(1)Net income including noncontrolling interest is equal to operating income in this segment.
 June 30,
(Unaudited, in millions board feet)20202019
Finished goods inventory (3)
 119
  122
 
(1)
Net income (loss) including noncontrolling interest 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 financial information”(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 financial information” above.
(3)
Includes wood pellets measured by mass, converted to board feet using a density-based conversion ratio.
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(Unaudited, in millions)2020  2019   2020  2019  
Net income (loss) including noncontrolling interest$15
 $(3)  $20
 $3
 
Depreciation and amortization 10
  9
   21
  17
 
EBITDA$25
 $6
  $41
 $20
 
(3)Includes wood pellets measured by mass, converted to board feet using a density-based conversion ratio.
Three Months Ended
March 31,
(Unaudited, in millions)20212020
Net income including noncontrolling interest$221 $5 
Depreciation and amortization11 11 
EBITDA$232 $16 
Industry trends
woodtrends.jpgrfp-20210331_g6.jpg
Average U.S. housing starts were 1.31.6 million on a seasonally-adjustedseasonally adjusted basis in the first halfthree months of 2020,2021, up by 2.7%8.7% from the same period last year, which reflects a 9.7%19.3% increase in multi-family starts, and single-family starts, essentially flat.

partially offset by a decrease of 12.5% in multi-family starts.
38
29


The 2x4 – Random Length (or “RL”) #1-2 Kiln Dried (or, “KD”) Great Lakes (or “KD GL”) price rose by 8.2%125.7% in the first halfthree months of 20202021 compared to the year-agoyear ago period, and the 2x4x8 Stud KD GL price increasedrose by 23.7%136.9%. The 2x4 – RL #2 KD Southern Pine (Eastside) price increased by 4.2%199.2%, and the 2x4 – RL #2 KD Southern Pine (Westside) price was up by 3.2%207.0%.
Three months ended June 30,March 31, 2021 vs. March 31, 2020 vs. June 30, 2019
Operating income (loss) variance analysis
woodbridgeqtd.jpgrfp-20210331_g7.jpg
Sales
Sales were $31$256 million higher, or 18%147%, to $199$430 million in the quarter, primarily due to the sales related to the acquisition of the U.S. Sawmill Business ($28 million). After removing the sales related to the acquisition, sales volume was $8 million lower, mainly due to a strong second quarter of 2019 and reduced demand related to the COVID-19 pandemic.stronger market conditions. Pricing contributed to an $11a $237 million increase in sales, reflecting a rise inthe increase of the average transaction price of $35by $482 per thousand board feet.feet, or 123%, and volume increased sales by $19 million due to an increase in shipments of 49 million board feet, or 11%.
Cost of sales, excluding depreciation, amortization and distribution costs
After adjusting for the effect of lower volume,removing the COS related to the acquisition of the U.S. Sawmill Business,higher volume and thestronger Canadian dollar, fluctuation, manufacturing costs decreased by $3 million, mainly reflecting lower wood fiber costs.

39

Six months ended June 30, 2020 vs. June 30, 2019
Operating income variance analysis
woodbridgeytd.jpg
Sales
Sales were $44 million higher, or 13%, to $373 million in the first half of the year, primarily due to the sales related to the acquisition of the U.S. Sawmill Business ($44 million). After removing the sales related to the acquisition, sales volume was $18 million lower, mainly due to the lack of transportation availability, resulting from rail blockades in Canada and the economic fallout of the unfolding COVID-19 pandemic. Pricing contributed to an $18 million increase in sales, reflecting a rise in the average transaction price of $27 per thousand board feet.
Cost of sales, excluding depreciation, amortization and distribution costs
After adjusting for the effect of lower volume, the COS related to the acquisition of the U.S. Sawmill Business, and the Canadian dollar fluctuation, manufacturing costs increased by $3$23 million, mainly due to higher fiber costs ($19 million) primarily reflecting higher stumpage costs related to current wood fiber costs.prices.
Depreciation and amortization
Depreciation and amortization increased by $4 million compared to the year-ago period, primarily due to the acquisition of the U.S. Sawmill Business.

40
30

PAPER
Highlights
Three Months Ended
March 31,
(Unaudited, in millions, except where otherwise stated)20212020
Sales$225 $289 
Operating loss (1)
$(24)$(3)
EBITDA (2)
$(9)$14 
(In thousands of metric tons)
Shipments378 482 
Downtime158 22 
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(Unaudited, in millions, except where otherwise stated)2020  2019   2020  2019  
Sales$208
 $355
  $497
 $719
 
Operating (loss) income (1)
$(12) $32
  $(15) $75
 
EBITDA (2)
$4
 $51
  $18
 $111
 
(In thousands of metric tons)             
Shipments 350
  525
   832
  1,040
 
Downtime 178
  65
   200
  77
 
March 31,
(Unaudited, in thousands of metric tons)20212020
Finished goods inventory87 150 
(1)Net loss including noncontrolling interest is equal to operating loss in this segment.
 June 30,
(Unaudited, in thousands of metric tons)20202019
Finished goods inventory 130
  154
 
(1)
Net (loss) income including noncontrolling interest is equal to operating (loss) income in this segment.
(2)
EBITDA, a non-GAAP financial measure, is reconciled below. For more information on the calculation and reasons we include this measure, see note 1 under “Results of Operations – Consolidated Results – Selected financial information”(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 financial information” above.
Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,		Three Months Ended
March 31,
(Unaudited, in millions)2020  2019  2020  2019  (Unaudited, in millions)20212020
Net (loss) income including noncontrolling interest$(12) $32
 $(15) $75
 
Net loss including noncontrolling interestNet loss including noncontrolling interest$(24)$(3)
Depreciation and amortization 16
 19
 33
 36
 Depreciation and amortization15 17 
EBITDA$4
 $51
 $18
 $111
 EBITDA$(9)$14 
Industry trends
newsprinttrends.jpgrfp-20210331_g8.jpg
North American newsprint demand fell by 23.4%25.0% in the first halfthree months of the year compared to the same period last year. Demand from newspaper publishers fell by 23.0%31.4%, while demand from commercial printers also decreased,declined by 24.0%14.6%. The North American shipment-to-capacity ratio was 79%93%, compared to 85%87% in the year-ago period.

year-ago-period.
41
31


Global demand for newsprint fell by 19.9%21.0% in the first halfthree months of 2020,2021, with North America down by 25.0%, Western Europe down by 23.3%, North America down by 23.4%20.0%, and Asia down by 16.5%18.7%. Accordingly, the global operating rate decreasedincreased to 73%81%, downup from 85%79% in the year-ago period.
uncoatedtrends.jpgrfp-20210331_g9.jpg
North American demand for uncoated mechanical papers was downcontracted by 23.5%14.3% in the first halfquarter of 20202021, compared to the year-ago period, reflecting a 30.8% decline19.0% drop in supercalendered grades, and a 16.5%10.4% decrease in standard grades. Accordingly,Compared to the first quarter of 2020, the shipment-to-capacity ratio for all uncoated mechanical papers decreasedincreased to 72%, compared to 84% in the year-ago period.

87%.
42
32


Three months ended June 30,March 31, 2021 vs. March 31, 2020 vs. June 30, 2019
Operating (loss) incomeloss variance analysis
paperbridgeqtd.jpgrfp-20210331_g10.jpg
Sales
Sales felldecreased by $147$64 million, or 41%22%, to $208$225 million in the quarter. Shipments decreased by 175,000104,000 metric tons, or 22%, largely reflecting much lower demand levels since the onset of the pandemic and our resulting capacity adjustments. The average transaction price declined by $84 per metric ton due to weaker market fundamentals.
Cost of sales, excluding depreciation, amortization and distribution costs
Manufacturing costs improved by $7 million afterAfter adjusting for the effect of the weaker Canadian dollar, as a significant portion of our production capacity is based in Canada, and the effecteffects of lower volume and the stronger Canadian dollar, manufacturing costs increased by $11 million, reflecting:
favorable maintenance•an expense related to a process improvement project ($5 million);
•higher labor costs ($73 million), due to reduced spending;; and
a decrease in wood fiber•higher energy costs ($2 million).

43
33


Six months ended June 30, 2020 vs. June 30, 2019
Operating (loss) income variance analysis
paperbridgeytd.jpg
Sales
Sales fell by $222 million, or 31%, to $497 million in the first half of the year. Shipments decreased by 208,000 metric tons, largely reflecting much lower demand levels since the onset of the pandemic and our resulting capacity adjustments. The average transaction price declined by $95 per metric ton due to weaker market fundamentals, mostly in export markets.
Cost of sales, excluding depreciation, amortization and distribution costs
Manufacturing costs improved by $24 million after adjusting for the effect of the weaker Canadian dollar, as a significant portion of our production capacity is based in Canada, and the effect of lower volume, reflecting:
favorable maintenance costs ($19 million), due to the indefinite idling of our Augusta mill in the fourth quarter of 2019, as well as reduced spending;
lower labor and overhead costs ($7 million), primarily due to the indefinite idling of our Augusta mill; and
lower energy prices ($3 million);
partly offset by an increase in wood fiber costs ($4 million), and in chemical costs ($3 million).
Selling, general and administrative expenses
SG&A expenses decreased by $5 million in the first half of the year, compared to the same period last year, due to lower headcount.



44

Corporate and Other
Highlights
Three Months Ended
March 31,
(Unaudited, in millions)20212020
Cost of sales, excluding depreciation, amortization and distribution costs$— $(2)
Depreciation and amortization(4)(4)
Selling, general and administrative expenses(15)(5)
Closure costs, impairment and other related charges(3)2 
Operating loss(22)(9)
Interest expense(6)(9)
Non-operating pension and other postretirement benefit credits2 15 
Other (expense) income, net(45)28 
Income tax provision(40)(27)
Net loss including noncontrolling interest$(111)$(2)
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(Unaudited, in millions)2020  2019   2020  2019  
Cost of sales, excluding depreciation, amortization and distribution costs$(2) $—
  $(4) $(7) 
Depreciation and amortization (3)  (5)   (7)  (10) 
Selling, general and administrative expenses (9)  (7)   (14)  (14) 
Closure costs, impairment and other related charges —
  —
   2
  —
 
Net gain on disposition of assets 9
  —
   9
  —
 
Operating loss (5)  (12)   (14)  (31) 
Interest expense (9)  (7)   (18)  (16) 
Non-operating pension and other postretirement benefit credits 4
  12
   19
  24
 
Other income (expense), net 10
  (1)   38
  (5) 
Income tax provision (5)  (19)   (32)  (40) 
Net loss including noncontrolling interest$(5) $(27)  $(7) $(68) 
The table below shows the reconciliation of net loss including noncontrolling interest to EBITDA and adjusted EBITDA, which are non-GAAP financial measures. For more information on the calculation and reasons we include these measures, see note 1 under “Results of Operations – Consolidated Results – Selected financial information”information” above.
Three Months Ended
March 31,
(Unaudited, in millions)20212020
Net loss including noncontrolling interest$(111)$(2)
Interest expense6 9 
Income tax provision40 27 
Depreciation and amortization4 4 
EBITDA(61)38 
Closure costs, impairment and other related charges3 (2)
Non-operating pension and other postretirement benefit credits(2)(15)
Other expense (income), net45 (28)
Adjusted EBITDA$(15)$(7)
34
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(Unaudited, in millions)2020  2019   2020  2019  
Net loss including noncontrolling interest$(5) $(27)  $(7) $(68) 
Interest expense 9
  7
   18
  16
 
Income tax provision 5
  19
   32
  40
 
Depreciation and amortization 3
  5
   7
  10
 
EBITDA 12
  4
   50
  (2) 
Closure costs, impairment and other related charges —
  —
   (2)  —
 
Net gain on disposition of assets (9)  —
   (9)  —
 
Non-operating pension and other postretirement benefit credits (4)  (12)   (19)  (24) 
Other (income) expense, net (10)  1
   (38)  5
 
Adjusted EBITDA$(11) $(7)  $(18) $(21) 
Three and six months ended June 30, 2020 vs. June 30, 2019
Net gain on disposition of assets
We recorded a net gain of $9 million on the disposition of the Augusta mill in the quarter. The mill was indefinitely idled in November 2019.


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LIQUIDITY AND CAPITAL RESOURCES
Capital Resources
We rely on cash and cash equivalents, cash flows provided by operations, and our credit facilities toto: fund our operations,operations; make pension contributions,contributions; and to finance our working capital, capital expenditures, and duty cash deposits.deposits and opportunities for our growth and transformation strategy. In addition, from time to time we may use available cash to reduce debt and to return capital to shareholders, including through share repurchases or special dividends. As of June 30, 2020,March 31, 2021, we had cash and cash equivalents of $27$33 million and availability of $369$620 million under our credit facilities.
Based on our current projections, we expect to have sufficient financial resources available to finance our business plan, make pension contributions, meet working capital and duty cash deposit requirements, and maintain an appropriate level of capital spending.
Based on market conditions, we may seek to repay or refinance our outstanding indebtedness including under the 5.875% senior unsecured notes due 2023 (or, the “2023 Notes”) and credit facilities, as we continue to focus on reducing costs and enhancing our flexibility.
Senior Unsecured Notes
On February 2, 2021, we issued $300 million aggregate principal amount of 4.875% senior notes due 2026 (or, the “2026 Notes”) at an issue price of 100%, pursuant to an indenture as of that date (or, the “indenture”). The 2026 notes are unsecured and are guaranteed by current and future wholly-owned U.S. subsidiaries that guarantee the ABL Credit Facility. Interest on the 2026 Notes is payable semi-annually on March 1 and September 1 of each year, beginning on September 1, 2021, until their maturity date of March 1, 2026. In connection with the issuance of the 2026 Notes, we incurred financing costs of $6 million, which were deferred and recorded as a reduction of the principal. These costs are amortized to “Interest expense” in our Consolidated Statements of Operations using the interest method over the term of the notes.
On February 2, 2021, we placed the net proceeds from the issuance of the 2026 Notes together with additional cash, into trust for the benefit of the holders of the 2023 Notes to redeem all of the $375 million aggregate principal amount of the 2023 Notes (or, the “Redemption”) at a price of 100% of the aggregate principal amount thereof, plus accrued and unpaid interest to, but not including, the redemption date. The Redemption occurred on February 18, 2021. As a result of the repurchase, we recorded a net loss on extinguishment of debt of $3 million in “Other income, net” in our Consolidated Statement of Operations for the three months ended March 31, 2021.
For more information, see Note 8, “Long-Term Debt – Senior Unsecured Notes,” to our Consolidated Financial Statements.
Senior Secured Credit rating risk
On March 18, 2020, Standard & Poor’s revised:
our senior unsecured debt rating from B+ to B;
our long-term corporate credit rating from BB- to B+; and
our outlook from stable to negative.Facility
On April 20, 2020, Moody’s Investors Service revised:19, 2021, we entered into a first amendment to the amended and restated senior secured credit facility entered into on October 28, 2019. The amount available remains unchanged for up to $360 million. For more information, see Note 14, “Subsequent Event,” to our Consolidated Financial Statements.
ABL Credit Facility
Effective January 21, 2021, we reduced the commitment under the Canadian tranche of our senior unsecured debt rating from B1secured asset-based revolving credit facility by $50 million, to B2;$250 million, resulting in an aggregate commitment of $450 million, subject to borrowing base limitations.
For more information, see Note 8, “Long-Term Debt – ABL Credit Facility,” to our corporate family rating from Ba3 to B1;Consolidated Financial Statements.
our outlook from stable to negative; and
our liquidity rating from SGL-1 to SGL-2.
Although our debt agreements do not include any provision that would require material changes in payment schedules or terminations as a result




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Flow of Funds
Summary of cash flows
A summary of cash flows for the sixthree months ended June 30,March 31, 2021 and 2020, and 2019, was as follows:
Three Months Ended
March 31,
(Unaudited, in millions)20212020
Net cash provided by (used in) operating activities$74 $(49)
Net cash used in investing activities(43)(206)
Net cash (used in) provided by financing activities(99)368 
Effect of exchange rate changes on cash and cash equivalents, and restricted cash— (3)
Net (decrease) increase in cash and cash equivalents, and restricted cash$(68)$110 
 Six Months Ended 
 June 30,
(Unaudited, in millions)2020  2019  
Net cash provided by operating activities$76
 $95
 
Net cash used in investing activities (227)  (69) 
Net cash provided by (used in) financing activities 176
  (232) 
Effect of exchange rate changes on cash and cash equivalents, and restricted cash (1)  1
 
Net increase (decrease) in cash and cash equivalents, and restricted cash$24
 $(205) 

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SixThree months ended June 30,March 31, 2021 vs. March 31, 2020 vs. June 30, 2019
Net cash provided by (used in) operating activities
We generated $76$74 million of cash from operating activities in the first halfquarter of 2020,2021, compared to $95$49 million of cash generatedused in the year-ago period. The decreaseincrease is primarily due to lower profitability offsetdriven by a favorable working capital variance in the current period, and lower pension contributions.higher profitability.
Net cash used in investing activities
We used $227$43 million of cash in investing activities in the current period, compared to $69$206 million in the year-ago period. The difference primarily reflects the acquisition of the U.S. Sawmill Business, net of cash acquired, in the currentyear-ago period ($172174 million), and; partly offset by higher net countervailing and anti-dumping duty cash deposits ($6 million); partly offset by lower capital expenditures ($8 million) and higher proceeds fromin the disposition of assetscurrent period ($717 million).
Net cash (used in) provided by (used in) financing activities
Net cash used in financing activities was $99 million in the first quarter of 2021, compared to cash provided by financing activities was $176of $368 million in the first halfyear-ago period. The difference mostly reflects the repayment of 2020,the 2023 Notes of $375 million partly offset by the issuance of the 2026 Notes of $300 million, compared to cash usednet borrowings under our revolving credit facilities of $189 million and drawing of $180 million in financing activities of $232 millionterm loans in the year-ago period. In the current period, we drew $180also repurchased $17 million in 10-year term loans under our existing senior secured credit facility (or, the “Senior Secured Credit Facility”) to finance the acquisition of the U.S. Sawmill Business, whereas in the year-ago period we repurchased of $225 million in aggregate principal amount of our 2023 Notes.shares.
Employee Benefit Plans
Newly enacted U.S. legislationThe indefinite idling of the Amos and Baie-Comeau mills triggered curtailment and remeasurement of the pension and other postretirement benefit obligations related to their plans as of March 31, 2021, resulting in 2020, the Coronavirus Aid, Relief and Economic Security Act, allows plan sponsors to delay contributions due in 2020. Accordingly, we have postponed our current quarter contributions to U.S. pension plansa curtailment gain of $8 million and in an actuarial gain of $22 million, totaling $30 million ($22 million net of tax).
The recently passed American Rescue Plan Act of 2021 includes provisions that allow for interest rate smoothing of pension funding deficits to minimize the impact of lower interest rates on liabilities. It also extends the amortization period for funding shortfalls from seven years to 15 years under the current rules. While the implementing guidance should be issued later this year, the company expects the net impact of these provisions to provide approximately $30 million of U.S. pension contribution relief per year for at least the next three years. At this time, we expectare not in a position to postponedetermine the remaining $26 million, to the end of the fourth quarter of 2020.impact on our 2021 funding.
Share Repurchase Program
On March 2, 2020, our board of directors authorized a share repurchase program of up to 15% of our common stock, for an aggregate consideration of up to $100 million. For more information, see Note 12, “Share Capital,” toDuring the three months ended March 31, 2021, we repurchased 1.7 million shares at a cost of $17 million. Since the beginning of this share repurchase program, we have repurchased 8.7 million shares for a total cost of $47 million, representing 10% of our Consolidated Financial Statements.

common stock. No shares were repurchased during the three months ended March 31, 2020.
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36

SUPPLEMENTAL OBLIGOR GROUP INFORMATION
The following information is presented in accordance with Rule 13-01 of Regulation S-X adopted in 2020, and the public information requirements of Rule 144 promulgated pursuant to the Securities Act of 1933, as amended, in connection to the 2023 Notes issued by Resolute Forest Products Inc. (or, the “
Issuer”) and fully guaranteed, on a joint and several basis, by all of our existing and subsequently acquired or organized direct or indirect wholly-owned U.S. subsidiaries that guarantee the ABL Credit Facility as further defined below (or, the “Guarantor Subsidiaries”) (together, the “Obligor Group”). The 2023 Notes are not guaranteed by our foreign subsidiaries (or, the “Non-Guarantor Subsidiaries”).
The following summarized financial information of the Obligor Group is presented on a combined basis, with all intercompany transactions between the Issuer and the Guarantor Subsidiaries eliminated and excluding any earnings from and investments in the Non-Guarantor Subsidiaries. Financial information of the Non-Guarantor Subsidiaries is not included.
Summarized financial information for the six months ended June 30, 2020 and year ended December 31, 2019, was as follows:
(Unaudited, in millions)Six Months Ended June 30, 2020 Year Ended December 31, 2019
Sales (1)
$1,076
  $2,379
 
Operating loss$(57)  $(203) 
Net loss$(49)  $(207) 
(1)
Includes $23 million and $76 million of sales to the Non-Guarantor Subsidiaries for the six months ended June 30, 2020 and year ended December 31, 2019, respectively.
Summarized financial information as of June 30, 2020 and December 31, 2019, was as follows:
(Unaudited, in millions)June 30, 2020 December 31, 2019
Total current assets (1)
$425
  $414
 
Total long-term assets (2)
$907
  $833
 
Total current liabilities (3)
$885
  $913
 
Total long-term liabilities$1,043
  $872
 
(1)
Includes $4 million of interest receivable from the Non-Guarantor Subsidiaries as of December 31, 2019.
(2)
Includes a note receivable of $112 million from the Non-Guarantor Subsidiaries as of December 31, 2019.
(3)
Includes accounts payable to the Non-Guarantor Subsidiaries of $770 million and $794 million as of June 30, 2020 and December 31, 2019, respectively.
The 2023 Notes are unsecured and effectively junior to indebtedness under both the senior secured asset-based revolving credit facility (or, “ABL Credit Facility”) and the Senior Secured Credit Facility, and to future secured indebtedness. In addition, the 2023 Notes are structurally subordinated to all existing and future liabilities of our Non-Guarantor Subsidiaries.

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ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information relating to quantitative and qualitative disclosures about market risk is disclosed in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our 20192020 Annual Report. There have been no material changes inWe are supplementing our exposure to market risk as previously disclosed in our 20192020 Annual Report except that our exposure towith the additional information on market risk has been heightened by the COVID-19 pandemic, including related governmental responses and economic impacts,set forth below. This supplemental market disruptions and changes in consumer habits, and such prior disclosurerisk information should be read in conjunction with the COVID-19 pandemic risk factor update furtherother market risks described in Part II, Item 1A, “Risk Factors,our 2020 Annual Report.
Prices, sales volume and margins for our products have historically been cyclical and subject to changes as a result of economic and market shifts, fluctuations in capacity, and movements in foreign currency exchange rates. In order to mitigate these risks and to protect the Company’s earnings and cash flows from adverse fluctuations of market risks, from time to time, we enter into derivative financial transactions, in compliance with our financial risk management policy, which forbids speculative purposes.
For more information on loss related to lumber futures contracts recorded during the current quarter and outstanding contracts that remain subject to potential fair value changes, please see Note 2, “Other (Expense) Income, Net,” in this Form 10-Q.and Note 7, “Accounts Payable and Other” to our Consolidated Financial Statements.
ITEM 4.CONTROLS AND PROCEDURES
ITEM 4.    CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures:
We have evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a–15(e) and 15d–15(e) of the Securities Exchange Act of 1934, as of June 30, 2020.March 31, 2021. Based on that evaluation, the President and Chief Executive Officer and the Senior Vice President and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date in recording, processing, summarizing and timely reporting information required to be disclosed in our reports to the SEC.
(b) Changes in Internal Control over Financial Reporting:
In connection with the evaluation of internal control over financial reporting, there were no changes during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II.    OTHER INFORMATION
PART II.OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS
ITEM 1.    LEGAL PROCEEDINGS
In addition to the legal proceedings presented under Part I, Item 3, “Legal Proceedings,” in our 20192020 Annual Report, see the description of our material pending legal proceedings in Note 11, “Commitments and Contingencies – Legal matters,,” to our Consolidated Financial Statements, which is incorporated in this “Item 1 – Legal Proceedings” by reference.
ITEM 1A.RISK FACTORS
We are supplementingITEM 1A.    RISK FACTORS
In addition to the other information set forth in this Form 10-Q, you should carefully consider the risk factors describedset forth under Part I, Item 1A, “Risk Factors” in our 20192020 Annual Report, and Part II, Item 1A, “Risk Factors” of our Quarterly Report on Form 10-Q for the period ended March 31, 2020, with the additional risk factor set forth below. This supplemental risk factor should be read in conjunction with the other risk factors described in our 2019 Annual Report,which have been heightened by this additional risk factor.
We face various risks related to the COVID-19 pandemic
The outbreak of the pandemic caused by COVID-19 has had, and could continue to have a negative impact on financial markets, economic conditions and portions of our business. While we are unable to predict the extent, nature and duration of these impacts at this time, the global COVID-19 pandemic could negativelymaterially affect our business, and results of operations, as well as the market price of our securities, in a number of ways, including the following:
While we expect to continue to operate in all of our business segments in Canada and the U.S., wefinancial condition or future results. There have reduced our operational footprint to levels consistent with essential needs for the duration of the crisis, including by the temporary idling of certain machines or facilities and implementing temporary layoffs. Further adjustments to our operational footprint, temporary or permanent, could be made as the COVID-19 pandemic situation develops.
The COVID-19 pandemic could accelerate the secular demand decline for paper products like those we manufacture as widespread confinement is altering consumer habits. The decline in demand and altered habits could become permanent.
Any construction slowdown in North America may result in a decline in demand for wood products. If the demand for wood products falls and we reduce harvesting and sawmill activity as a result, we could have greater difficulty obtaining the supply of timber and wood fiber required for our operations at favorable prices, or at all.
There is increased risk that we may not obtain raw materials, chemicals and other required supplies or services in timely fashion and at favorable prices duebeen no material changes to the impact of the reduced economic activity as a result of the COVID-19 pandemic on our suppliers, which could affect our production output.
Additional trade restrictions or barriers could also affect negatively our supply chain as well as the sales or distribution of our products.
The impact of the reduced economic activity as a result of the COVID-19 pandemic on our customers could increase our risk of credit exposure.
Although the forest products industry has generally been recognized as critical or essential in locations where we operate, the current health restrictions, including social distancing measures, are having an impact on how our workers can fulfill their duties, and limit the number of employees we can havefactors previously disclosed in our operations, which in turn could impact our production output and costs.2020 Annual Report.
It could be difficult or costly to restart certain of our temporarily idled operations, and we could face personnel shortages if employees are no longer available or amenable to return to work.
Further, should any key employees become ill from COVID-19 or unable to work, the attention of our management team could be diverted.
The reduced operations and staffing in our facilities, remote working conditions and increased risk in not obtaining supplies or services could increase the risk of non-compliance and incidents.
In an effort to preserve liquidity, we expect to suspend or defer capital projects, as well as other strategic initiatives. Strategies to increase earnings power or generate additional cash flow, including acquisitions, divestitures and other transactions could be

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delayed or not materialize given the current economic uncertainty. In response to the COVID-19 pandemic, we could decide to permanently shut down machines or facilities and be required to record significant closure costs, long-lived asset impairment or accelerated depreciation charges.
The economic uncertainty resulting from the COVID-19 pandemic and the ensuing decline in financial market returns and low-interest rate environment could result in an increase in the amount by which our pension plans are underfunded by the next measurement date at year-end. This could result in a significant increase in the amount of our required future pension contributions, which could have an adverse effect on our financial condition.
If we don’t generate enough cash to fund our short-term or long-term obligations, we may have to draw further on our credit facilities to meet our obligations or seek additional sources of liquidity. The economic uncertainty resulting from the COVID-19 pandemic and recent downgrades of our credit ratings could lead to greater difficulty in obtaining additional financing on favorable terms.
The COVID-19 pandemic, including related governmental responses and economic impacts, market disruptions and changes in consumer habits, has heightened the risks related to the other risk factors described in our 2019 Annual Report, and should be read in conjunction therewith.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table sets forth information about our stock repurchases for the three months ended June 30, 2020:March 31, 2021:
PeriodTotal Number of Shares PurchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1)
January 1 to January 31— $— — $70,460,359 
February 1 to February 28291,202 9.36 291,202 67,734,708 
March 1 to March 311,457,252 9.52 1,457,252 53,861,669 
Total1,748,454 $9.50 1,748,454 $53,861,669 
PeriodTotal Number of Shares PurchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1)
April 1 to April 30 —
 $—
  —
 $100,000,000
 
May 1 to May 31 —
  —
  —
  100,000,000
 
June 1 to June 30 253,898
  2.09
  253,898
  99,469,293
 
Total 253,898
 $2.09
  253,898
 $99,469,293
 
(1)(1)$100 million share repurchase program launched in 2020. For more information, see Note 12, “Share Capital,” to our             Consolidated Financial Statements.
$100 million share repurchase program launched in 2020. For more information, see Note 12, “Share Capital,” to our Consolidated Financial Statements.
As of July 31, 2020,April 30, 2021, we repurchased 1,035,249343,894 additional shares at an average price per share of $2.47$11.21 for a total cost of $3$4 million.

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ITEM 6.    EXHIBITS
Exhibit No.Description
ITEM 6.EXHIBITS
Indenture, dated as of February 2, 2021, among Resolute Forest Products Inc., the guarantors party thereto and Wells Fargo Bank, National Association, as trustee (incorporated by reference from Exhibit 4.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed March 1, 2021, SEC File No. 001-33776).
Exhibit No.Description
2020Executive Employment Agreement between Remi G. Lalonde and Resolute Forest Products Inc. Short-Term Incentive Plan – U.S.
†10.2
2020 Resolute Forest Products Inc. Short-Term Incentive Plan – Canada / International.
†10.3
First Amendment to the Resolute Forest Products Inc. 2019 Equity Incentive Plan, dated April 7, 2021 (incorporated by reference from Exhibit 10.199.1 to the Company’s Current Report on Form 8-K filed April 9, 2021).
Change in control agreement between Remi G. Lalonde and Resolute Forest Products Inc.’s Registration Statement, dated April 7, 2021 (incorporated by reference from Exhibit 99.2 to the Company’s Current Report on Form S-88-K filed August 5, 2020, SEC Registration No. 333-241026)April 9, 2021).
Special Advisor Employment Agreement between Yves Laflamme and Resolute Forest Products Inc., dated April 9, 2021.
First Amendment effective April 19, 2021, to the Amended and Restated Credit Agreement, dated as of October 28, 2019, among Resolute Forest Products Inc., certain U.S. subsidiaries of Resolute Forest Products Inc. as borrowers and guarantors, various lenders, and American AgCredit, FLCA, as administrative agent and collateral agent.
Amendment No 3 dated January 28, 2021, to the Credit Agreement dated May 22, 2015, as amended by the First Amendment dated as of December 22, 2017 and by the Second Amendment dated as of May 14, 2019, with certain lenders and Bank of America, N.A., as U.S. administrative agent and collateral agent, and Bank of America, N.A. (through its Canada branch) as the Canadian administrative agent.
Certification of President and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Senior Vice President and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of President and Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Certification of Senior Vice President and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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.
†This is a management contract or compensatory plan or arrangement.
*Interactive data files furnished with this Form 10-Q, which represent the following materials from this Form 10-Q 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 Statements of Changes in Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Unaudited Interim Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
RESOLUTE FOREST PRODUCTS INC.
By/s/ Remi G. LalondeSylvain A. Girard
Remi G. LalondeSylvain A. Girard
Senior Vice President and Chief Financial Officer
By /s/ Hugues DorbanDaniel Viboux
Hugues DorbanDaniel Viboux
Vice President and Chief Accounting Officer
Date: AugustMay 10, 2020


2021
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