Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 31, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | UFS | |
Entity Registrant Name | Domtar CORP | |
Entity Central Index Key | 1,381,531 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 62,894,571 |
Consolidated Statements of Earn
Consolidated Statements of Earnings and Comprehensive (Loss) Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Sales | $ 1,353 | $ 1,221 | $ 2,698 | $ 2,523 |
Operating expenses | ||||
Cost of sales, excluding depreciation and amortization | 1,096 | 971 | 2,180 | 2,050 |
Depreciation and amortization | 79 | 79 | 158 | 159 |
Selling, general and administrative | 118 | 107 | 228 | 213 |
Other operating (income) loss, net (NOTE 6) | (2) | 2 | (7) | 1 |
Operating expenses | 1,291 | 1,159 | 2,559 | 2,423 |
Operating income | 62 | 62 | 139 | 100 |
Interest expense, net | 16 | 17 | 32 | 34 |
Non-service components of net periodic benefit cost (NOTE 5) | (5) | (2) | (9) | (6) |
Earnings before income taxes | 51 | 47 | 116 | 72 |
Income tax expense (NOTE 7) | 8 | 9 | 19 | 14 |
Net earnings | $ 43 | $ 38 | $ 97 | $ 58 |
Per common share (in dollars) (NOTE 4) | ||||
Basic | $ 0.68 | $ 0.61 | $ 1.54 | $ 0.93 |
Diluted | $ 0.68 | $ 0.61 | $ 1.54 | $ 0.93 |
Weighted average number of common shares outstanding (millions) | ||||
Basic | 62.9 | 62.6 | 62.8 | 62.6 |
Diluted | 63.2 | 62.7 | 63.1 | 62.7 |
Cash dividends per common share | $ 0.44 | $ 0.42 | $ 0.85 | $ 0.83 |
Net derivative (losses) gains on cash flow hedges: | ||||
Net (losses) gains arising during the period, net of tax of $2 and $5, respectively (2017 – $(2) and $(2), respectively) | $ (7) | $ 2 | $ (16) | $ 2 |
Less: Reclassification adjustment for gains included in net earnings, net of tax of nil and $1, respectively (2017 – nil and $2, respectively) | (1) | (2) | (4) | |
Foreign currency translation adjustments | (50) | 67 | (61) | 82 |
Change in unrecognized gains and prior service cost related to pension and post-retirement benefit plans, net of tax of $(1) and $(2), respectively (2017 – $(1) and $(2), respectively) | 2 | 3 | 4 | 5 |
Other comprehensive (loss) income | (55) | 71 | (75) | 85 |
Comprehensive (loss) income | $ (12) | $ 109 | $ 22 | $ 143 |
Consolidated Statements of Ear3
Consolidated Statements of Earnings and Comprehensive (Loss) Income (Parenthetical) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Net (losses) gains arising during the period, net of tax | $ 2 | $ (2) | $ 5 | $ (2) |
Reclassification adjustment for gains included in net earnings, tax | 1 | 2 | ||
Change in unrecognized gains and prior service cost related to pension and post-retirement benefit plans, tax | $ (1) | $ (1) | $ (2) | $ (2) |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 264 | $ 139 |
Receivables, less allowances of $6 and $7 | 667 | 704 |
Inventories (NOTE 8) | 756 | 757 |
Prepaid expenses | 35 | 33 |
Income and other taxes receivable | 21 | 24 |
Total current assets | 1,743 | 1,657 |
Property, plant and equipment, net | 2,629 | 2,765 |
Intangible assets, net (NOTE 9) | 614 | 633 |
Other assets | 159 | 157 |
Total assets | 5,145 | 5,212 |
Current liabilities | ||
Bank indebtedness | 1 | |
Trade and other payables | 722 | 716 |
Income and other taxes payable | 29 | 24 |
Long-term debt due within one year | 1 | 1 |
Total current liabilities | 753 | 741 |
Long-term debt | 1,103 | 1,129 |
Deferred income taxes and other | 475 | 491 |
Other liabilities and deferred credits | 356 | 368 |
Commitments and contingencies (NOTE 12) | ||
Shareholders' equity (NOTE 11) | ||
Common stock $0.01 par value; authorized 2,000,000,000 shares; issued: 65,001,104 and 65,001,104 shares | 1 | 1 |
Additional paid-in capital | 1,977 | 1,969 |
Retained earnings | 891 | 849 |
Accumulated other comprehensive loss | (411) | (336) |
Total shareholders' equity | 2,458 | 2,483 |
Total liabilities and shareholders' equity | $ 5,145 | $ 5,212 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Receivables, allowances | $ 6 | $ 7 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued | 65,001,104 | 65,001,104 |
Treasury stock, par value | $ 0.01 | $ 0.01 |
Treasury stock, shares | 2,106,533 | 2,305,419 |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity (Unaudited) - 6 months ended Jun. 30, 2018 - USD ($) shares in Millions, $ in Millions | Total | Issued and Outstanding Common Shares [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] |
Balance at Dec. 31, 2017 | $ 2,483 | $ 1 | $ 1,969 | $ 849 | $ (336) |
Balance, Shares at Dec. 31, 2017 | 62.7 | ||||
Stock-based compensation, net of tax | 8 | 8 | |||
Stock-based compensation, shares | 0.2 | ||||
Net earnings | 97 | 97 | |||
Net derivative losses on cash flow hedges: | |||||
Net losses arising during the period, net of tax | (16) | (16) | |||
Less: Reclassification adjustments for gains included in net earnings, net of tax | (2) | (2) | |||
Foreign currency translation adjustments | (61) | (61) | |||
Change in unrecognized gains and prior service cost related to pension and post-retirement benefit plans, net of tax | 4 | 4 | |||
Cash dividends declared | (55) | (55) | |||
Balance at Jun. 30, 2018 | $ 2,458 | $ 1 | $ 1,977 | $ 891 | $ (411) |
Balance, Shares at Jun. 30, 2018 | 62.9 |
Consolidated Statement of Shar7
Consolidated Statement of Shareholders' Equity (Parenthetical) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement Of Stockholders Equity [Abstract] | ||||
Net losses arising during the period, tax | $ 2 | $ (2) | $ 5 | $ (2) |
Reclassification adjustment for gains included in net earnings, tax | 1 | 2 | ||
Change in unrecognized gains and prior service cost related to pension and post-retirement benefit plans, tax | $ (1) | $ (1) | $ (2) | $ (2) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating activities | ||
Net earnings | $ 97 | $ 58 |
Adjustments to reconcile net earnings to cash flows from operating activities | ||
Depreciation and amortization | 158 | 159 |
Deferred income taxes and tax uncertainties | (5) | (12) |
Net gains on disposals of property, plant and equipment | (4) | |
Stock-based compensation expense | 5 | 3 |
Other | (1) | |
Changes in assets and liabilities | ||
Receivables | 27 | 11 |
Inventories | (10) | 10 |
Prepaid expenses | (11) | (4) |
Trade and other payables | 1 | (35) |
Income and other taxes | 9 | 21 |
Difference between employer pension and other post-retirement contributions and pension and other post-retirement expense | (1) | |
Other assets and other liabilities | 2 | 1 |
Cash flows from operating activities | 267 | 212 |
Investing activities | ||
Additions to property, plant and equipment | (62) | (71) |
Proceeds from disposals of property, plant and equipment | 4 | |
Other | (6) | |
Cash flows used for investing activities | (64) | (71) |
Financing activities | ||
Dividend payments | (53) | (52) |
Net change in bank indebtedness | (12) | |
Change in revolving credit facility | (30) | |
Proceeds from receivables securitization facility | 25 | |
Repayments of receivables securitization facility | (25) | (15) |
Repayments of long-term debt | (63) | |
Other | 2 | (1) |
Cash flows used for financing activities | (76) | (148) |
Net increase (decrease) in cash and cash equivalents | 127 | (7) |
Impact of foreign exchange on cash | (2) | 6 |
Cash and cash equivalents at beginning of period | 139 | 125 |
Cash and cash equivalents at end of period | 264 | 124 |
Supplemental cash flow information | ||
Interest | 28 | 31 |
Income taxes | $ 25 | $ 15 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | NOTE 1. _________________ BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, in the opinion of Management, include all adjustments that are necessary for the fair statement of Domtar Corporation’s (“the Company”) financial position, results of operations, and cash flows for the interim periods presented. Results for the first six months of the year may not necessarily be indicative of full year results. It is suggested that these consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Domtar Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as filed with the Securities and Exchange Commission. The December 31, 2017 Consolidated Balance Sheet, presented for comparative purposes in this interim report, was derived from audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Since January 1, 2018, upon the adoption of ASU 2014-09, as issued by FASB, “ Revenue from Contracts with Customers REVENUE RECOGNITION The Company’s revenue is generated from the sale of finished goods to customers. Revenue is recognized at a single point in time when the performance obligation is satisfied which occurs when the control over the goods is transferred to customers. For shipping and handling activities performed after customers obtain control of the goods, the Company elected to account for these activities as fulfillment activities rather than assessing such activities as separate performance obligations. Accordingly, the sale of goods to customers represents a single performance obligation to which the entire transaction price is allocated. The point in time when the control of goods is transferred to customers is largely dependent on delivery terms. Revenue is recorded at the time of shipment for delivery terms designated free on board (“f.o.b.”) shipping point. For sales transactions designated f.o.b. destination, revenue is recorded when the product is delivered to the customer’s delivery site. Revenue is measured as the amount of consideration the Company expects to receive in exchange for goods transferred to customers. Revenue is recognized net of variable consideration in the form of rebates, discounts and other commercial incentives extended to customers. Variable consideration is recognized using the most likely amounts which are based on an analysis of historical experience and current period expectations. The Company includes estimated amounts of variable consideration in revenue to the extent that it is probable that there will not be a significant reversal of recognized revenue when the uncertainty related to that variable consideration is resolved. For all the Company’s contracts, customer payments are made in less than one year. Accordingly, the Company does not adjust the amount of revenue recognized for the effects of a significant financing component. Byproduct related revenues, such as sales of excess power, waste paper and other wood related byproducts are recorded as a reduction of manufacturing costs as they are incidental to the main revenue-generating activities of the Company. Sales taxes, and other similar taxes, collected from customers are excluded from revenue. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | DOMTAR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2018 (IN MILLIONS OF DOLLARS, UNLESS OTHERWISE NOTED (UNAUDITED) NOTE 2. _________________ RECENT ACCOUNTING PRONOUNCEMENTS ACCOUNTING CHANGES IMPLEMENTED REVENUE FROM CONTRACTS WITH CUSTOMERS In May 2014, the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers. On January 1, 2018, the Company adopted the standard using the full retrospective method which resulted in a reclassification in the Company’s Consolidated Statement of Earnings and Comprehensive (Loss) Income for the three and six months ended June 30, 2017. The previously reported amounts for Sales and Selling, general and administrative expenses were decreased by $3 million and $5 million, respectively, in relation to the reclassification of certain payments made to customers classified as a reduction of Sales under the new standard. These reclassifications are exclusively contained within the Company’s Consolidated Statement of Earnings and Comprehensive (Loss) Income and do not have a cumulative effect on retained earnings or other components of equity or net assets in the Company’s Consolidated Balance Sheet as of January 1, 2017. No practical expedients were used in the transition to the new standard as they were not applicable. RETIREMENT BENEFITS In March 2017, the FASB issued ASU 2017-07, “ Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, On January 1, 2018, the Company adopted the guidance of this accounting standard update which resulted in a reclassification in the Company’s Consolidated Statement of Earnings and Comprehensive (Loss) Income for the three and six months ended June 30, 2017. The previously reported amounts of Cost of sales were increased by $3 million and $7 million, respectively, Selling, general and administrative expenses were decreased by $1 million and $1 million, respectively, both with a corresponding impact in Non-service components of net periodic benefit cost. The Company utilized a practical expedient included in the accounting standard update which allowed the Company to use amounts previously disclosed in its pension plans and other post-retirement benefits plans note for the prior periods as the estimation basis for applying the required retrospective presentation requirements. In addition, these required retrospective reclassifications resulted in adjustments to the previously reported Operating income within the Company’s reportable operating segment disclosures for the three and six months ended June 30, 2017. Three months ended June 30, 2017 As Reported Impact of ASU 2014-09 Impact of ASU 2017-07 As Adjusted (Unaudited) $ $ $ $ Sales 1,224 (3 ) — 1,221 Operating expenses Cost of sales, excluding depreciation and amortization 968 — 3 971 Depreciation and amortization 79 — — 79 Selling, general and administrative 111 (3 ) (1 ) 107 Other operating loss, net 2 — — 2 1,160 (3 ) 2 1,159 Operating income (loss) 64 — (2 ) 62 Interest expense, net 17 — — 17 Non-service components of net periodic benefit cost — — (2 ) (2 ) Earnings before income taxes 47 — — 47 Income tax expense 9 — — 9 Net earnings 38 — — 38 Six months ended June 30, 2017 As Reported Impact of ASU 2014-09 Impact of ASU 2017-07 As Adjusted (Unaudited) $ $ $ $ Sales 2,528 (5 ) — 2,523 Operating expenses Cost of sales, excluding depreciation and amortization 2,043 — 7 2,050 Depreciation and amortization 159 — — 159 Selling, general and administrative 219 (5 ) (1 ) 213 Other operating loss, net 1 — — 1 2,422 (5 ) 6 2,423 Operating income (loss) 106 — (6 ) 100 Interest expense, net 34 — — 34 Non-service components of net periodic benefit cost — — (6 ) (6 ) Earnings before income taxes 72 — — 72 Income tax expense 14 — — 14 Net earnings 58 — — 58 FINANCIAL INSTRUMENTS In January 2016, the FASB issued ASU 2016-01, “ Recognition and Measurement of Financial Assets and Financial Liabilities, The Company adopted the new guidance on January 1, 2018 with no impact on the consolidated financial statements. DERIVATIVES AND HEDGING In March 2016, the FASB issued ASU 2016-05, “ Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships, The Company adopted the new guidance on January 1, 2018 with no impact on the consolidated financial statements. CLASSIFICATION OF CASH FLOWS In August 2016, the FASB issued ASU 2016-15, “ Statement of Cash Flows, The Company adopted the new guidance on January 1, 2018 with no impact on the consolidated financial statements. DERIVATIVES AND HEDGING In August 2017, the FASB issued ASU 2017-12, “ Targeted Improvements to Accounting for Hedging Activities The Company early adopted the new guidance on January 1, 2018 with no impact on the consolidated financial statements. FUTURE ACCOUNTING CHANGES LEASES In February 2016 Leases, As a lessee, Domtar’s various leases under existing guidance are classified as operating leases that are not recorded on the balance sheet but are recorded in the statement of earnings as expense is incurred. Upon adoption of the new guidance, lease expense will generally be recognized on a straight-line basis over the lease term and the Company will be required to record substantially all leases on the Consolidated Balance Sheets as a right-of-use asset and a lease liability. The Company is currently in the process of evaluating its existing lease portfolio. While the precise amount of the right-of-use asset and lease liability will not be known until closer to the adoption date, management estimates the amount to be less than 5% of both total assets and total liabilities. This estimate is based on the Company’s Consolidated Balance Sheet and lease portfolio, both as of June 30, 2018. The adoption of the guidance will likely have an insignificant impact on the Company’s Consolidated Statements of Earnings and Comprehensive (Loss) Income. The Company will adopt the new lease guidance on January 1, 2019 and, if required, recognize a cumulative-effect adjustment to the retained earnings as of that date. Upon adoption, the Company will continue to report comparative periods presented in the financial statements under current GAAP (ASC 840, Leases) and provide the required disclosures under ASC 840 for all periods presented under ASC 840. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities and Fair Value Measurement | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities and Fair Value Measurement | DOMTAR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2018 (IN MILLIONS OF DOLLARS, UNLESS OTHERWISE NOTED (UNAUDITED) NOTE 3. _________________ DERIVATIVES AND HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENT HEDGING PROGRAMS The Company is exposed to market risk, such as changes in currency exchange rates, commodity prices, and interest rates. To the extent the Company decides to manage the volatility related to these exposures, the Company may enter into various financial derivatives that are accounted for under the derivatives and hedging guidance. These transactions are governed by the Company's hedging policies which provide direction on acceptable hedging activities, including instrument type and acceptable counterparty exposure. Upon inception, the Company formally documents the relationship between hedging instruments and hedged items. At inception and quarterly thereafter, the Company formally assesses whether the financial instruments used in hedging transactions are effective at offsetting changes in either the cash flow or the fair value of the underlying exposures. The ineffective portion of the qualifying instrument is immediately recognized to earnings. The amount of ineffectiveness recognized was immaterial for all periods presented. The Company does not hold derivative financial instruments for trading purposes. CREDIT RISK The Company is exposed to credit risk on the accounts receivable from its customers. In order to reduce this risk, the Company reviews new customers’ credit history before granting credit and conducts regular reviews of existing customers’ credit performance. As of June 30, 2018, two of Domtar’s Pulp and Paper segment customers located in the U.S. represented 11% or $74 million, and 11% or $71 million, respectively, (December 31, 2017– one Pulp and Paper segment customer located in the U.S. represented 12% or $83 million) of the Company’s receivables. The Company is exposed to credit risk in the event of non-performance by counterparties to its financial instruments. The Company attempts to minimize this exposure by entering into contracts with counterparties that are believed to be of high credit quality. Collateral or other security to support financial instruments subject to credit risk is usually not obtained. The credit standing of counterparties is regularly monitored. INTEREST RATE RISK The Company is exposed to interest rate risk arising from fluctuations in interest rates on its cash and cash equivalents, bank indebtedness, revolving credit facility and securitization, term loan and long-term debt. The Company’s objective in managing exposure to interest rate changes is to minimize the impact of interest rate changes on earnings and cash flows and to lower its overall borrowing costs. The Company may manage this interest rate exposure through the use of derivative instruments such as interest rate swap contracts, whereby it agrees to exchange the difference between fixed and variable interest amounts calculated by reference to an agreed upon notional principal amount. COST RISK Cash flow hedges: The Company is exposed to price volatility for raw materials and energy used in its manufacturing process. The Company manages its exposure to cost risk primarily through the use of supplier contracts. The Company purchases natural gas at the prevailing market price at the time of delivery. To reduce the impact on cash flow and earnings due to pricing volatility, the Company may utilize derivatives to fix the price of forecasted natural gas purchases. The changes in the fair value on qualifying instruments are included in Accumulated other comprehensive loss to the extent effective, and reclassified into Cost of sales in the period during which the hedged transaction affects earnings. Current contracts are used to hedge a portion of forecasted purchases over the next 48 months. The following table presents the volumes under derivative financial instruments for natural gas contracts outstanding as of June 30, 2018 to hedge forecasted purchases: Commodity Notional contractual quantity under derivative contracts MMBTU (2) Notional contractual value under derivative contracts (in millions of dollars) Percentage of forecasted purchases under derivative contracts Natural gas 2018 (1) 6,025,000 $ 18 50% 2019 11,430,000 $ 34 45% 2020 8,880,000 $ 27 35% 2021 3,920,000 $ 12 16% 2022 2,070,000 $ 6 8% (1) Represents the remaining six months of 2018 (2) MMBTU: Millions of British thermal units The natural gas derivative contracts were fully effective as of June 30, 2018. There were no amounts reflected in the Consolidated Statements of Earnings and Comprehensive (Loss) Income for the three and six months ended June 30, 2018 resulting from hedge ineffectiveness (three and six months ended June 30, 2017 – nil). FOREIGN CURRENCY RISK Cash flow hedges: The Company has manufacturing operations in the United States, Canada and Europe. As a result, it is exposed to movements in foreign currency exchange rates in Canada and Europe. Moreover, certain assets and liabilities are denominated in currencies other than the U.S. dollar and are exposed to foreign currency movements. Accordingly, the Company’s earnings are affected by increases or decreases in the value of the Canadian dollar and the European currencies. The Company’s European subsidiaries are also exposed to movements in foreign currency exchange rates on transactions denominated in a currency other than their Euro functional currency. The Company’s risk management policy allows it to hedge a significant portion of its exposure to fluctuations in foreign currency exchange rates for periods up to three years. The Company may use derivative financial instruments (currency options and foreign exchange forward contracts) to mitigate its exposure to fluctuations in foreign currency exchange rates. Derivatives are used to hedge forecasted purchases in Canadian dollars by the Company’s Canadian subsidiary over the next 24 months. Derivatives are also currently used to hedge a portion of forecasted sales in British pounds and Norwegian krone and a portion of forecasted purchases in U.S. dollars and Swedish krona by its European subsidiaries over the next 8 months. Such derivatives are designated as cash flow hedges. The changes in the fair value on qualifying instruments are included in Accumulated other comprehensive loss to the extent effective, and reclassified into Sales or Cost of sales in the period during which the hedged transaction affects earnings. The following table presents the currency values under significant currency positions pursuant to currency derivatives outstanding as of June 30, 2018 to hedge forecasted purchases and sales: Currency exposure hedged Business Segment Year of maturity Notional contractual value Percentage of forecasted net exposures under contracts Average Protection rate Average Obligation rate 2018 (1) CAD/USD Pulp and Paper 300 CAD 71% 1 USD = 1.2763 1 USD = 1.3165 USD/Euro Personal Care 31 USD 71% 1 Euro = 1.1830 1 Euro = 1.2138 2019 CAD/USD Pulp and Paper 425 CAD 50% 1 USD = 1.2757 1 USD = 1.3067 USD/Euro Personal Care 9 USD 10% 1 Euro = 1.2233 1 Euro = 1.2959 2020 CAD/USD Pulp and Paper 143 CAD 17% 1 USD = 1.2794 1 USD = 1.2794 (1) Represents the remaining six months of 2018 The foreign exchange derivative contracts were fully effective as of June 30, 2018. There were no amounts reflected in the Consolidated Statements of Earnings and Comprehensive (Loss) Income for the three and six months ended June 30, 2018 resulting from hedge ineffectiveness (three and six months ended June 30, 2017 – nil). FAIR VALUE MEASUREMENT The accounting standards for fair value measurements and disclosures, establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is available and significant to the fair value measurement. Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The following tables present information about the Company’s financial assets and financial liabilities measured at fair value on a recurring basis (except Long-term debt, see (b) below) at June 30, 2018 and December 31, 2017, in accordance with the accounting standards for fair value measurements and disclosures and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. Fair Value of financial instruments at: June 30, 2018 Quoted prices in active markets for identical assets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Balance sheet classification $ $ $ $ Derivatives designated as hedging instruments: Asset derivatives Currency derivatives 4 — 4 — (a) Prepaid expenses Natural gas swap contracts 1 — 1 — (a) Prepaid expenses Total Assets 5 — 5 — Liabilities derivatives Currency derivatives 9 — 9 — (a) Trade and other payables Natural gas swap contracts 1 — 1 — (a) Trade and other payables Natural gas swap contracts 6 — 6 — (a) Other liabilities and deferred credits Total Liabilities 16 — 16 — Other Instruments: Stock-based compensation - liability awards 7 7 — — Trade and other payables Stock-based compensation - liability awards 17 17 — — Other liabilities and deferred credits Long-term debt 1,141 — 1,141 — (b) Long-term debt The net cumulative loss recorded in Accumulated other comprehensive loss relating to natural gas contracts is $6 million at June 30, 2018, which will be recognized in Cost of sales upon maturity of the derivatives, at the then prevailing values, which may be different from those at June 30, 2018. The net cumulative loss recorded in Accumulated other comprehensive loss relating to currency options and forwards hedging forecasted purchases is $5 million at June 30, 2018, of which a loss of $5 million will be recognized in Cost of sales or Sales upon maturity of the derivatives over the next 12 months at the then prevailing values, which may be different from those at June 30, 2018. Fair Value of financial instruments at: December 31, 2017 Quoted prices in active markets for identical assets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Balance sheet classification $ $ $ $ Derivatives designated as hedging instruments: Asset derivatives Currency derivatives 16 — 16 — (a) Prepaid expenses Currency derivatives 4 — 4 — (a) Other assets Natural gas swap contracts 1 — 1 — (a) Other assets Total Assets 21 — 21 — Liabilities derivatives Currency derivatives 5 — 5 — (a) Trade and other payables Natural gas swap contracts 2 — 2 — (a) Trade and other payables Natural gas swap contracts 5 — 5 — (a) Other liabilities and deferred credits Total Liabilities 12 — 12 — Other Instruments: Stock-based compensation - liability awards 6 6 — — Trade and other payables Stock-based compensation - liability awards 20 20 — — Other liabilities and deferred credits Long-term debt 1,216 — 1,216 — (b) Long-term debt (a) Fair value of the Company’s derivatives are classified under Level 2 (inputs that are observable; directly or indirectly) as it is measured as follows: - For currency derivatives: Fair value is measured using techniques derived from the Black-Scholes pricing model. Interest rates, forward market rates and volatility are used as inputs for such valuation techniques. - For natural gas contracts: Fair value is measured using the discounted difference between contractual rates and quoted market future rates. (b) Fair value of the Company’s long-term debt is measured by comparison to market prices of its debt. The Company’s long-term debt is not carried at fair value on the Consolidated Balance Sheets at June 30, 2018 and December 31, 2017. However, fair value disclosure is required. The carrying value of the Company’s long-term debt is $1,104 million and $1,130 million at June 30, 2018 and December 31, 2017, respectively. Due to their short-term maturity, the carrying amounts of cash and cash equivalents, receivables, bank indebtedness, trade and other payables and income and other taxes approximate their fair values. |
Earnings Per Common Share
Earnings Per Common Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | NOTE 4. _________________ EARNINGS PER COMMON SHARE The following table provides the reconciliation between basic and diluted earnings per common share: For the three months ended For the six months ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Net earnings $ 43 $ 38 $ 97 $ 58 Weighted average number of common shares outstanding (millions) 62.9 62.6 62.8 62.6 Effect of dilutive securities (millions) 0.3 0.1 0.3 0.1 Weighted average number of diluted common shares outstanding (millions) 63.2 62.7 63.1 62.7 Basic net earnings per common share (in dollars) $ 0.68 $ 0.61 $ 1.54 $ 0.93 Diluted $ 0.68 $ 0.61 $ 1.54 $ 0.93 The following table provides the securities that could potentially dilute basic earnings per common share in the future, but were not included in the computation of diluted earnings per common share because to do so would have been anti-dilutive: For the three months ended For the six months ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Options 230,601 517,246 230,601 419,161 |
Pension Plans and Other Post-Re
Pension Plans and Other Post-Retirement Benefit Plans | 6 Months Ended |
Jun. 30, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Pension Plans and Other Post-Retirement Benefit Plans | NOTE 5. _________________ PENSION PLANS AND OTHER POST-RETIREMENT BENEFIT PLANS DEFINED CONTRIBUTION PLANS The Company has several defined contribution plans and multiemployer plans. The pension expense under these plans is equal to the Company’s contribution. For the three and six months ended June 30, 2018, the pension expense was $9 million and $22 million, respectively (2017 – $9 million and $21 million, respectively). DEFINED BENEFIT PLANS AND OTHER POST-RETIREMENT BENEFIT PLANS The Company sponsors both contributory and non-contributory U.S. and non-U.S. defined benefit pension plans. Non-unionized employees in Canada joining the Company after January 1, 1998 participate in a defined contribution pension plan. Salaried employees in the U.S. joining the Company after January 1, 2008 participate in a defined contribution pension plan. Unionized and non-union hourly employees in the U.S. who are not grandfathered under the existing defined benefit pension plans, participate in a defined contribution pension plan for future service. The Company also sponsors a number of other post-retirement benefit plans for eligible U.S. and non-U.S. employees; the plans are unfunded and include life insurance programs and medical and dental benefits. The Company also provides supplemental unfunded defined benefit pension plans and supplemental unfunded defined contribution pension plans to certain senior management employees. Components of net periodic benefit cost for pension plans and other post-retirement benefit plans: For the three months ended For the six months ended June 30, 2018 June 30, 2018 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 9 1 17 1 Interest expense 13 1 27 1 Expected return on plan assets (22 ) — (43 ) — Amortization of net actuarial loss 2 — 4 — Amortization of prior year service costs 2 (1 ) 3 (1 ) Net periodic benefit cost 4 1 8 1 Components of net periodic benefit cost for pension plans and other post-retirement benefit plans: For the three months ended For the six months ended June 30, 2017 June 30, 2017 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 7 1 15 1 Interest expense 13 1 25 2 Expected return on plan assets (20 ) — (40 ) — Amortization of net actuarial loss 2 — 4 — Amortization of prior year service costs 2 — 3 — Net periodic benefit cost 4 2 7 3 The components of net periodic benefit cost for pension plans and other post-retirement benefits plans, other than service cost, are presented in Non-service components of net periodic benefit cost on the Consolidated Statement of Earnings and Comprehensive (Loss) Income. For the three and six months ended June 30, 2018, the Company contributed $4 million and $7 million, respectively (2017 – $3 million and $6 million, respectively) to the pension plans and $1 million and $2 million, respectively (2017 – $1 million and $2 million, respectively) to the other post-retirement benefit plans. |
Other Operating (Income) Loss,
Other Operating (Income) Loss, Net | 6 Months Ended |
Jun. 30, 2018 | |
Other Income And Expenses [Abstract] | |
Other Operating (Income) Loss, Net | NOTE 6. _________________ OTHER OPERATING (INCOME) LOSS, NET Other operating (income) loss, net is an aggregate of both recurring and occasional loss or income items and, as a result, can fluctuate from period to period. The Company’s other operating (income) loss, net includes the following: For the three months ended For the six months ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 $ $ $ $ Gain on sale of property, plant and equipment (3 ) — (4 ) — Bad debt expense — 1 1 1 Environmental provision — 2 — 2 Foreign exchange (gain) loss — — (3 ) 1 Other 1 (1 ) (1 ) (3 ) Other operating (income) loss, net (2 ) 2 (7 ) 1 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 7. _________________ INCOME TAXES For the second quarter of 2018, the Company’s income tax expense was $8 million, consisting of a current income tax expense of $10 million and a deferred income tax benefit of $2 million. This compares to an income tax expense of $9 million in the second quarter of 2017, consisting of a current income tax expense of $17 million and a deferred income tax benefit of $8 million. The Company made income tax payments, net of refunds, of $21 million during the second quarter of 2018. The effective tax rate was 16% compared with an effective tax rate of 19% in the second quarter of 2017. The effective tax rate for the second quarter of 2018 was favorably impacted by the income tax effects of the U.S. Tax Cuts and Jobs Act (the “U.S. Tax Reform”) as well as by enacted law changes in Sweden and several U.S. states. The effective tax rate for the second quarter of 2017 was favorably impacted by enacted law changes in several U.S. states and by the recognition of additional tax credits associated with the filing of certain 2016 tax returns. For the first half of 2018, the Company’s income tax expense amounted to $19 million, consisting of a current income tax expense of $24 million and a deferred income tax benefit of $5 million. This compares to an income tax expense of $14 million in the first half of 2017, consisting of a current income tax expense of $26 million and a deferred income tax benefit of $12 million. The Company made income tax payments, net of refunds, of $25 million during the first half of 2018. The effective tax rate was 16% compared to an effective tax rate of 19% in the first half of 2017. The effective tax rate for the first half of 2018 was favorably impacted by the income tax effects of the U.S. Tax Reform, by the recognition of previously unrecognized tax benefits due to a statute expiration in a foreign jurisdiction as well as by enacted law changes in Sweden and several U.S. states. The effective tax rate for the first half of 2017 was favorably impacted by the recognition of previously unrecognized tax benefits due to a statute expiration in a foreign jurisdiction and also a U.S. state tax audit finalization, enacted law changes in several U.S. states, and the recognition of additional tax credits associated with the filing of certain 2016 income tax returns. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application in situations where a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the U.S. Tax Reform. SAB 118 provides guidance which allows companies to use a measurement period, similar to that used in business combinations, to account for the impacts of the U.S. Tax Reform. The U.S. Tax Reform provides for a mandatory one-time deemed repatriation tax on the Company’s undistributed foreign earnings and profits. The Company recorded a provisional repatriation tax amount of $46 million in its consolidated financial statements as of December 31, 2017. The Company continues to analyze various factors, including the impact of foreign tax credits available to offset the tax, and to gather additional information and monitor for further interpretive guidance in order to finalize its calculations and complete its accounting for the repatriation tax liability. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 8. _________________ INVENTORIES The following table presents the components of inventories: June 30, December 31, 2018 2017 $ $ Work in process and finished goods 388 399 Raw materials 140 135 Operating and maintenance supplies 228 223 756 757 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | NOTE 9. _________________ INTANGIBLE ASSETS The following table presents the components of intangible assets: June 30, 2018 December 31, 2017 Estimated useful lives (in years) Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net $ $ $ $ $ $ Definite-lived intangible assets subject to amortization Water rights 40 3 (1 ) 2 3 (1 ) 2 Customer relationships 10 – 40 387 (87 ) 300 392 (79 ) 313 Technology 7 – 20 8 (4 ) 4 8 (4 ) 4 Non-Compete 9 1 (1 ) — 1 (1 ) — License rights 12 28 (11 ) 17 29 (11 ) 18 427 (104 ) 323 433 (96 ) 337 Indefinite-lived intangible assets not subject to amortization Water rights 4 — 4 4 — 4 Trade names 241 — 241 245 — 245 License rights 6 — 6 6 — 6 Catalog rights 40 — 40 41 — 41 Total 718 (104 ) 614 729 (96 ) 633 Amortization expense related to intangible assets for the three and six months ended June 30, 2018 was $5 million and $10 million, respectively (2017 – $5 million and $10 million, respectively). Amortization expense for the next five years related to intangible assets is expected to be as follows: 2018 2019 2020 2021 2022 $ $ $ $ $ Amortization expense related to intangible assets 21 (1) 21 21 21 21 (1) Represents twelve months of amortization |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss by Component | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss by Component | NOTE 10. _________________ CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS BY COMPONENT The following table presents the changes in Accumulated other comprehensive loss by component ( 1) Net derivative gains (losses) on cash flow hedges Pension items (2) Post-retirement benefit items (2) Foreign currency items Total $ $ $ $ $ Balance at December 31, 2016 11 (221 ) (11 ) (278 ) (499 ) Natural gas swap contracts (5 ) N/A N/A N/A (5 ) Currency options 11 N/A N/A N/A 11 Net (gain) loss N/A (6 ) 17 N/A 11 Foreign currency items N/A N/A N/A 146 146 Other comprehensive income (loss) before reclassifications 6 (6 ) 17 146 163 Amounts reclassified from Accumulated other comprehensive loss (9 ) 9 — — — Net current period other comprehensive (loss) income (3 ) 3 17 146 163 Balance at December 31, 2017 8 (218 ) 6 (132 ) (336 ) Natural gas swap contracts (1 ) N/A N/A N/A (1 ) Currency options (8 ) N/A N/A N/A (8 ) Foreign exchange forward contracts (7 ) N/A N/A N/A (7 ) Foreign currency items N/A N/A N/A (61 ) (61 ) Other comprehensive loss before reclassifications (16 ) — — (61 ) (77 ) Amounts reclassified from Accumulated other comprehensive loss (2 ) 5 (1 ) — 2 Net current period other comprehensive (loss) income (18 ) 5 (1 ) (61 ) (75 ) Balance at June 30, 2018 (10 ) (213 ) 5 (193 ) (411 ) (1) All amounts are after tax. Amounts in parentheses indicate losses. (2) The accrued benefit obligation is actuarially determined on an annual basis as of December 31. The following table presents reclassifications out of Accumulated other comprehensive loss: Details about Accumulated other comprehensive loss components Amounts reclassified from Accumulated other comprehensive loss (1) For the three months ended June 30, 2018 June 30, 2017 $ $ Net derivative losses on cash flow hedge Natural gas swap contracts 1 — (2) Currency options and forwards (1 ) (1 ) (2) Total before tax — (1 ) Tax benefit — — Net of tax — (1 ) Amortization of defined benefit pension items Amortization of net actuarial loss 2 2 (3) Amortization of prior year service cost 2 2 (3) Total before tax 4 4 Tax expense (1 ) (1 ) Net of tax 3 3 Amortization of other post-retirement benefit items Amortization of net actuarial loss — — (3) Amortization of prior year service cost (1 ) — (3) Total before tax (1 ) — Tax benefit — — Net of tax (1 ) — Amounts reclassified from Accumulated other comprehensive loss (1) For the six months ended June 30, 2018 June 30, 2017 $ $ Net derivatives losses on cash flow hedge Natural gas swap contracts — (1 ) (2) Currency options and forwards (3 ) (5 ) (2) Total before tax (3 ) (6 ) Tax benefit 1 2 Net of tax (2 ) (4 ) Amortization of defined benefit pension items Amortization of net actuarial loss 4 4 (3) Amortization of prior year service cost 3 3 (3) Total before tax 7 7 Tax expense (2 ) (2 ) Net of tax 5 5 Amortization of other post-retirement benefit items Amortization of net actuarial loss — — (3) Amortization of prior year service cost (1 ) — (3) Total before tax (1 ) — Tax benefit — — Net of tax (1 ) — (1) Amounts in parentheses indicate losses. (2) These amounts are included in Cost of Sales in the Consolidated Statements of Earnings and Comprehensive (Loss) Income. (3) These amounts are included in the computation of net periodic benefit cost (see Note 5 “Pension Plans and Other Post-Retirement Benefit Plans” for more details). |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Shareholders' Equity | NOTE 11. _________________ SHAREHOLDERS’ EQUITY On January 29, 2018 and May 8, 2018, the Company’s Board of Directors approved a quarterly dividend of $0.435 per share, respectively, to be paid to holders of the Company’s common stock. Dividends of $27 million and $28 million were paid on April 16, 2018 and July 16, 2018, respectively, to shareholders of record on April 2, 2018 and July 3, 2018, respectively. On August 7, 2018, the Company’s Board of Directors approved a quarterly dividend of $0.435 per share to be paid to holders of the Company’s common stock. This dividend is to be paid on October 15, 2018, to shareholders of record on October 2, 2018. STOCK REPURCHASE PROGRAM The Company’s Board of Directors has authorized a stock repurchase program (the “Program”) of up to $1.3 billion. Under the Program, the Company is authorized to repurchase, from time to time, shares of its outstanding common stock on the open market or in privately negotiated transactions. The timing and amount of stock repurchases will depend on a variety of factors, including the market conditions as well as corporate and regulatory considerations. The Program may be suspended, modified or discontinued at any time, and the Company has no obligation to repurchase any amount of its common stock under the Program. The Program has no set expiration date. The Company repurchases its common stock in part to reduce the dilutive effects of stock options and awards, and to improve shareholders’ returns. The Company makes open market purchases of its common stock using general corporate funds. Additionally, the Company may enter into structured stock repurchase agreements with large financial institutions using general corporate funds in order to lower the average cost to acquire shares. The agreements would require the Company to make up-front payments to the counterparty financial institutions, which would result in either the receipt of stock at the beginning of the term of the agreements followed by a share adjustment at the maturity of the agreements, or the receipt of either stock or cash at the maturity of the agreements, depending upon the price of the stock. During the first half of 2018 and 2017, there were no shares repurchased under the Program. Since the inception of the Program, the Company has repurchased 24,853,827 shares at an average price of $39.33 for a total cost of $977 million. All shares repurchased are recorded as Treasury stock on the Consolidated Balance Sheets under the par value method at $0.01 per share. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 12. _________________ COMMITMENTS AND CONTINGENCIES ENVIRONMENTAL MATTERS The Company is subject to environmental laws and regulations enacted by federal, provincial, state and local authorities. The Company may also incur substantial costs in relation to enforcement actions (including orders requiring corrective measures, installation of pollution control equipment or other remedial actions) as a result of violations of, or liabilities under, environmental laws and regulations applicable to its past and present properties. The Company’s ongoing efforts to identify potential environmental concerns that may be associated with such properties may result in additional environmental costs and liabilities which cannot be reasonably estimated at this time. In connection with contamination of a site bordering Burrard Inlet in North Vancouver, on February 16, 2010, the government of British Columbia issued a Remediation Order to Seaspan International Ltd. and the Company, in order to define and implement an action plan to address soil, sediment and groundwater issues. Construction began in January 2017 and is expected to be completed in 2019. The Company previously recorded an environmental reserve to address its estimated exposure. The possible cost in excess of the reserve is not considered to be material for this matter. The following table reflects changes in the reserve for environmental remediation and asset retirement obligations: June 30, 2018 $ Balance at beginning of year 44 Environmental spending (7 ) Reversal of provision (1 ) Effect of foreign currency exchange rate change (1 ) Balance at end of period 35 The U.S. Environmental Protection Agency (the “EPA”) and/or various state agencies have notified the Company that it may be a potentially responsible party under the Comprehensive Environmental Response Compensation and Liability Act, commonly known as “Superfund,” and similar state laws with respect to other hazardous waste sites as to which no proceedings have been instituted against the Company. The Company continues to take remedial action under its Care and Control Program at its former wood preserving sites, and at a number of operating sites, due to possible soil, sediment or groundwater contamination. Climate change regulation Various national and local laws and regulations relating to climate change have been established or are emerging in jurisdictions where the Company currently has, or may have in the future, manufacturing facilities or investments. The Company does not expect to be disproportionately affected by these measures compared with other pulp and paper producers located in these jurisdictions. The EPA Clean Power Plan regulation is being litigated and has been stayed. The EPA has proposed to repeal the Clean Power Plan in accordance with President Trump’s Executive Order issued on March 28, 2017. The EPA will be proposing a replacement rule consistent with this Administration’s interpretation of the Clean Air Act. The EPA has filed a motion with the D.C. Circuit to hold the case in abeyance while it reconsiders the rule, which the D.C. Circuit granted. Regardless of the outcome for the Clean Power Plan, the Company does not expect to be disproportionately affected compared with other pulp and paper producers located in the states where the Company operates. The Government of Canada is reviewing national policies to further reduce greenhouse gases (“GHG”) and has announced its intent to impose a cost on carbon emissions. The Company does not expect its facilities to be disproportionately affected by these measures compared with other pulp and paper producers in Canada. The province of Quebec and Ontario have GHG cap-and-trade systems with reduction targets. British Columbia has a carbon tax that applies to the purchase of fossil fuels within the province. The Company does not expect to be disproportionately affected by these activities compared to the other pulp and paper producers located in these provinces. CONTINGENCIES In the normal course of operations, the Company becomes involved in various legal actions mostly related to contract disputes, patent infringements, environmental and product warranty claims, and labor issues. While the final outcome with respect to actions outstanding or pending at June 30, 2018, cannot be predicted with certainty, it is management’s opinion that their resolution will not have a material adverse effect on the Company’s financial position, results of operations or cash flows. INDEMNIFICATIONS In the normal course of business, the Company offers indemnifications relating to the sale of its businesses and real estate. In general, these indemnifications may relate to claims from past business operations, the failure to abide by covenants and the breach of representations and warranties included in the sales agreements. Typically, such representations and warranties relate to taxation, environmental, product and employee matters. The terms of these indemnification agreements are generally for an unlimited period of time. At June 30, 2018, the Company is unable to estimate the potential maximum liabilities for these types of indemnification guarantees as the amounts are contingent upon the outcome of future events, the nature and likelihood of which cannot be reasonably estimated at this time. Accordingly, no provision has been recorded. These indemnifications have not yielded a significant expense in the past. Pension Plans The Company has indemnified and held harmless the trustees of its pension funds, and the respective officers, directors, employees and agents of such trustees, from any and all costs and expenses arising out of the performance of their obligations under the relevant trust agreements, including in respect of their reliance on authorized instructions from the Company or for failing to act in the absence of authorized instructions. These indemnifications survive the termination of such agreements. At June 30, 2018, the Company has not recorded a liability associated with these indemnifications, as it does not expect to make any payments pertaining to these indemnifications. |
Segment Disclosures
Segment Disclosures | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Disclosures | DOMTAR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2018 (IN MILLIONS OF DOLLARS, UNLESS OTHERWISE NOTED (UNAUDITED) NOTE 13. _________________ SEGMENT DISCLOSURES The Company’s two reportable segments described below also represent its two operating segments. Each reportable segment offers different products and services and requires different manufacturing processes, technology and/or marketing strategies. The following summary briefly describes the operations included in each of the Company’s reportable segments: • Pulp and Paper – consists of the design, manufacturing, marketing and distribution of communication, specialty and packaging papers, as well as softwood, fluff and hardwood market pulp. • Personal Care – consists of the design, manufacturing, marketing and distribution of absorbent hygiene products. An analysis and reconciliation of the Company’s business segment information to the respective information in the financial statements is as follows: For the three months ended For the six months ended June 30, June 30, June 30, June 30, SEGMENT DATA 2018 2017 2018 2017 $ $ $ $ Sales by segment (1) Pulp and Paper 1,123 999 2,223 2,072 Personal Care 247 238 509 485 Total for reportable segments 1,370 1,237 2,732 2,557 Intersegment sales (17 ) (16 ) (34 ) (34 ) Consolidated sales 1,353 1,221 2,698 2,523 Sales by product group Communication papers 634 578 1,265 1,201 Specialty and packaging papers 181 156 355 319 Market pulp 291 249 569 518 Absorbent hygiene products 247 238 509 485 Consolidated sales 1,353 1,221 2,698 2,523 Depreciation and amortization Pulp and Paper 61 63 122 127 Personal Care 18 16 36 32 Consolidated depreciation and amortization 79 79 158 159 Operating income (loss) (2) Pulp and Paper 79 62 155 92 Personal Care 2 13 10 29 Corporate (19 ) (13 ) (26 ) (21 ) Consolidated operating income 62 62 139 100 Interest expense, net 16 17 32 34 Non-service components of net periodic benefit cost (5 ) (2 ) (9 ) (6 ) Earnings before income taxes 51 47 116 72 Income tax expense 8 9 19 14 Net earnings 43 38 97 58 (1) As a result of adopting ASU 2014-09 “ Revenue from Contracts with Customers, (2) As a result of adopting ASU 2017-07 “ Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, |
Supplemental Guarantor Financia
Supplemental Guarantor Financial Information | 6 Months Ended |
Jun. 30, 2018 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Supplemental Guarantor Financial Information | DOMTAR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2018 (IN MILLIONS OF DOLLARS, UNLESS OTHERWISE NOTED (UNAUDITED) NOTE 15. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED) NOTE 14. _________________ SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION The following information is presented as required under Rule 3-10 of Regulation S-X, in connection with the Company’s issuance of debt securities that are fully and unconditionally guaranteed by Domtar’s significant 100% owned domestic subsidiaries, including Domtar Paper Company, LLC, Domtar Industries LLC (and subsidiaries, excluding Domtar Funding LLC), Domtar A.W. LLC, Attends Healthcare Products Inc., EAM Corporation, Associated Hygienic Products LLC and Home Delivery Incontinent Supplies Co., (“Guarantor Subsidiaries”), on a joint and several basis. The Guaranteed Debt will not be guaranteed by certain of Domtar’s foreign and non-significant domestic subsidiaries, all 100% owned, (collectively the “Non-Guarantor Subsidiaries”). The subsidiary’s guarantee may be released in certain customary circumstances, such as if the subsidiary is sold or sells all of its assets, if the subsidiary’s guarantee of the Credit Agreement is terminated or released and if the requirements for legal defeasance to discharge the indenture have been satisfied. The following supplemental condensed consolidating financial information sets forth, on an unconsolidated basis, the Balance Sheets at June 30, 2018 and December 31, 2017, the Statements of Earnings and Comprehensive (Loss) Income for the three and six months ended June 30, 2018 and 2017 and the Statements of Cash Flows for the six months ended June 30, 2018 and 2017 for Domtar Corporation (the “Parent”), and on a combined basis for the Guarantor Subsidiaries and, on a combined basis, the Non-Guarantor Subsidiaries. The supplemental condensed consolidating financial information reflects the investments of the Parent in the Guarantor Subsidiaries, as well as the investments of the Guarantor Subsidiaries in the Non-Guarantor Subsidiaries, using the equity method. For the three months ended June 30, 2018 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE (LOSS) INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 1,089 564 (300 ) 1,353 Operating expenses Cost of sales, excluding depreciation and amortization — 943 453 (300 ) 1,096 Depreciation and amortization — 55 24 — 79 Selling, general and administrative 3 23 92 — 118 Other operating loss (income), net — 1 (3 ) — (2 ) 3 1,022 566 (300 ) 1,291 Operating (loss) income (3 ) 67 (2 ) — 62 Interest expense (income), net 16 23 (23 ) — 16 Non-service components of net periodic benefit cost — (1 ) (4 ) — (5 ) (Loss) earnings before income taxes (19 ) 45 25 — 51 Income tax (benefit) expense (4 ) 8 4 — 8 Share in earnings of equity accounted investees 58 21 — (79 ) — Net earnings 43 58 21 (79 ) 43 Other comprehensive loss (55 ) (57 ) (50 ) 107 (55 ) Comprehensive (loss) income (12 ) 1 (29 ) 28 (12 ) For the six months ended June 30, 2018 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 2,172 1,112 (586 ) 2,698 Operating expenses Cost of sales, excluding depreciation and amortization — 1,886 880 (586 ) 2,180 Depreciation and amortization — 111 47 — 158 Selling, general and administrative 7 68 153 — 228 Other operating income, net — (1 ) (6 ) — (7 ) 7 2,064 1,074 (586 ) 2,559 Operating (loss) income (7 ) 108 38 — 139 Interest expense (income), net 32 45 (45 ) — 32 Non-service components of net periodic benefit cost — — (9 ) — (9 ) (Loss) earnings before income taxes (39 ) 63 92 — 116 Income tax (benefit) expense (8 ) 12 15 — 19 Share in earnings of equity accounted investees 128 77 — (205 ) — Net earnings 97 128 77 (205 ) 97 Other comprehensive loss (75 ) (75 ) (60 ) 135 (75 ) Comprehensive income 22 53 17 (70 ) 22 For the three months ended June 30, 2017 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 1,011 496 (286 ) 1,221 Operating expenses Cost of sales, excluding depreciation and amortization — 878 379 (286 ) 971 Depreciation and amortization — 58 21 — 79 Selling, general and administrative 2 31 74 — 107 Other operating loss, net — — 2 — 2 2 967 476 (286 ) 1,159 Operating (loss) income (2 ) 44 20 — 62 Interest expense (income), net 16 22 (21 ) — 17 Non-service components of net periodic benefit cost — — (2 ) — (2 ) (Loss) earnings before income taxes (18 ) 22 43 — 47 Income tax (benefit) expense (5 ) 3 11 — 9 Share in earnings of equity accounted investees 51 32 — (83 ) — Net earnings 38 51 32 (83 ) 38 Other comprehensive income 71 76 69 (145 ) 71 Comprehensive income 109 127 101 (228 ) 109 For the six months ended June 30, 2017 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 2,097 1,010 (584 ) 2,523 Operating expenses Cost of sales, excluding depreciation and amortization — 1,848 786 (584 ) 2,050 Depreciation and amortization — 117 42 — 159 Selling, general and administrative 4 64 145 — 213 Other operating (income) loss, net — (2 ) 3 — 1 4 2,027 976 (584 ) 2,423 Operating (loss) income (4 ) 70 34 — 100 Interest expense (income), net 33 42 (41 ) — 34 Non-service components of net periodic benefit cost — — (6 ) — (6 ) (Loss) earnings before income taxes (37 ) 28 81 — 72 Income tax (benefit) expense (9 ) 5 18 — 14 Share in earnings of equity accounted investees 86 63 — (149 ) — Net earnings 58 86 63 (149 ) 58 Other comprehensive income 85 94 85 (179 ) 85 Comprehensive income 143 180 148 (328 ) 143 June 30, 2018 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING BALANCE SHEET Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Assets Current assets Cash and cash equivalents 141 35 88 — 264 Receivables — 399 268 — 667 Inventories — 521 235 — 756 Prepaid expenses 13 14 8 — 35 Income and other taxes receivable 31 2 15 (27 ) 21 Intercompany accounts 353 481 44 (878 ) — Total current assets 538 1,452 658 (905 ) 1,743 Property, plant and equipment, net — 1,796 833 — 2,629 Intangible assets, net — 262 352 — 614 Investments in affiliates 3,946 2,602 — (6,548 ) — Intercompany long-term advances 6 81 1,604 (1,691 ) — Other assets 21 23 133 (18 ) 159 Total assets 4,511 6,216 3,580 (9,162 ) 5,145 Liabilities and shareholders' equity Current liabilities Bank indebtedness — 1 — — 1 Trade and other payables 55 418 249 — 722 Intercompany accounts 401 65 412 (878 ) — Income and other taxes payable 2 36 18 (27 ) 29 Long-term debt due within one year — — 1 — 1 Total current liabilities 458 520 680 (905 ) 753 Long-term debt 793 299 11 — 1,103 Intercompany long-term loans 742 948 1 (1,691 ) — Deferred income taxes and other — 344 149 (18 ) 475 Other liabilities and deferred credits 60 159 137 — 356 Shareholders' equity 2,458 3,946 2,602 (6,548 ) 2,458 Total liabilities and shareholders' equity 4,511 6,216 3,580 (9,162 ) 5,145 December 31, 2017 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING BALANCE SHEET Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Assets Current assets Cash and cash equivalents 3 14 122 — 139 Receivables — 402 302 — 704 Inventories — 522 235 — 757 Prepaid expenses 5 22 6 — 33 Income and other taxes receivable 7 1 16 — 24 Intercompany accounts 380 314 45 (739 ) — Total current assets 395 1,275 726 (739 ) 1,657 Property, plant and equipment, net — 1,870 895 — 2,765 Intangible assets, net — 268 365 — 633 Investments in affiliates 3,892 2,609 — (6,501 ) — Intercompany long-term advances 6 81 1,513 (1,600 ) — Other assets 22 24 129 (18 ) 157 Total assets 4,315 6,127 3,628 (8,858 ) 5,212 Liabilities and shareholders' equity Current liabilities Trade and other payables 55 424 237 — 716 Intercompany accounts 244 63 432 (739 ) — Income and other taxes payable 1 14 9 — 24 Long-term debt due within one year — — 1 — 1 Total current liabilities 300 501 679 (739 ) 741 Long-term debt 792 300 37 — 1,129 Intercompany long-term loans 674 925 1 (1,600 ) — Deferred income taxes and other — 356 153 (18 ) 491 Other liabilities and deferred credits 66 153 149 — 368 Shareholders' equity 2,483 3,892 2,609 (6,501 ) 2,483 Total liabilities and shareholders' equity 4,315 6,127 3,628 (8,858 ) 5,212 For the six months ended June 30, 2018 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Adjustments Consolidated $ $ $ $ $ Operating activities Net earnings 97 128 77 (205 ) 97 Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings 34 (104 ) 35 205 170 Cash flows from operating activities 131 24 112 — 267 Investing activities Additions to property, plant and equipment — (33 ) (29 ) — (62 ) Proceeds from disposals of property, plant and equipment — — 4 — 4 Other — (2 ) (4 ) — (6 ) Cash flows used for investing activities — (35 ) (29 ) — (64 ) Financing activities Dividend payments (53 ) — — — (53 ) Repayments of receivables securitization facility — — (25 ) — (25 ) Increase in long-term advances to related parties — — (90 ) 90 — Decrease in long-term advances to related parties 58 32 — (90 ) — Other 2 — — — 2 Cash flows provided from (used for) financing activities 7 32 (115 ) — (76 ) Net increase (decrease) in cash and cash equivalents 138 21 (32 ) — 127 Impact of foreign exchange on cash — — (2 ) — (2 ) Cash and cash equivalents at beginning of period 3 14 122 — 139 Cash and cash equivalents at end of period 141 35 88 — 264 For the six months ended June 30, 2017 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Adjustments Consolidated $ $ $ $ $ Operating activities Net earnings 58 86 63 (149 ) 58 Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings 77 (107 ) 35 149 154 Cash flows provided from (used for) operating activities 135 (21 ) 98 — 212 Investing activities Additions to property, plant and equipment — (39 ) (32 ) — (71 ) Cash flows used for investing activities — (39 ) (32 ) — (71 ) Financing activities Dividend payments (52 ) — — — (52 ) Net change in bank indebtedness — (12 ) — — (12 ) Change in revolving credit facility (30 ) — — — (30 ) Proceeds from receivables securitization facility — — 25 — 25 Repayments of receivables securitization facility — — (15 ) — (15 ) Repayments of long-term debt (63 ) — — — (63 ) Increase in long-term advances to related parties (5 ) — (61 ) 66 — Decrease in long-term advances to related parties — 66 — (66 ) — Other (1 ) — — — (1 ) Cash flows (used for) provided from financing activities (151 ) 54 (51 ) — (148 ) Net (decrease) increase in cash and cash equivalents (16 ) (6 ) 15 — (7 ) Impact of foreign exchange on cash — — 6 — 6 Cash and cash equivalents at beginning of period 17 14 94 — 125 Cash and cash equivalents at end of period 1 8 115 — 124 |
Recent Accounting Pronounceme23
Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue Recognition | REVENUE RECOGNITION The Company’s revenue is generated from the sale of finished goods to customers. Revenue is recognized at a single point in time when the performance obligation is satisfied which occurs when the control over the goods is transferred to customers. For shipping and handling activities performed after customers obtain control of the goods, the Company elected to account for these activities as fulfillment activities rather than assessing such activities as separate performance obligations. Accordingly, the sale of goods to customers represents a single performance obligation to which the entire transaction price is allocated. The point in time when the control of goods is transferred to customers is largely dependent on delivery terms. Revenue is recorded at the time of shipment for delivery terms designated free on board (“f.o.b.”) shipping point. For sales transactions designated f.o.b. destination, revenue is recorded when the product is delivered to the customer’s delivery site. Revenue is measured as the amount of consideration the Company expects to receive in exchange for goods transferred to customers. Revenue is recognized net of variable consideration in the form of rebates, discounts and other commercial incentives extended to customers. Variable consideration is recognized using the most likely amounts which are based on an analysis of historical experience and current period expectations. The Company includes estimated amounts of variable consideration in revenue to the extent that it is probable that there will not be a significant reversal of recognized revenue when the uncertainty related to that variable consideration is resolved. For all the Company’s contracts, customer payments are made in less than one year. Accordingly, the Company does not adjust the amount of revenue recognized for the effects of a significant financing component. Byproduct related revenues, such as sales of excess power, waste paper and other wood related byproducts are recorded as a reduction of manufacturing costs as they are incidental to the main revenue-generating activities of the Company. Sales taxes, and other similar taxes, collected from customers are excluded from revenue. REVENUE FROM CONTRACTS WITH CUSTOMERS In May 2014, the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers. On January 1, 2018, the Company adopted the standard using the full retrospective method which resulted in a reclassification in the Company’s Consolidated Statement of Earnings and Comprehensive (Loss) Income for the three and six months ended June 30, 2017. The previously reported amounts for Sales and Selling, general and administrative expenses were decreased by $3 million and $5 million, respectively, in relation to the reclassification of certain payments made to customers classified as a reduction of Sales under the new standard. These reclassifications are exclusively contained within the Company’s Consolidated Statement of Earnings and Comprehensive (Loss) Income and do not have a cumulative effect on retained earnings or other components of equity or net assets in the Company’s Consolidated Balance Sheet as of January 1, 2017. No practical expedients were used in the transition to the new standard as they were not applicable. |
Retirement Benefits | DOMTAR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2018 (IN MILLIONS OF DOLLARS, UNLESS OTHERWISE NOTED (UNAUDITED) RETIREMENT BENEFITS In March 2017, the FASB issued ASU 2017-07, “ Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, On January 1, 2018, the Company adopted the guidance of this accounting standard update which resulted in a reclassification in the Company’s Consolidated Statement of Earnings and Comprehensive (Loss) Income for the three and six months ended June 30, 2017. The previously reported amounts of Cost of sales were increased by $3 million and $7 million, respectively, Selling, general and administrative expenses were decreased by $1 million and $1 million, respectively, both with a corresponding impact in Non-service components of net periodic benefit cost. The Company utilized a practical expedient included in the accounting standard update which allowed the Company to use amounts previously disclosed in its pension plans and other post-retirement benefits plans note for the prior periods as the estimation basis for applying the required retrospective presentation requirements. In addition, these required retrospective reclassifications resulted in adjustments to the previously reported Operating income within the Company’s reportable operating segment disclosures for the three and six months ended June 30, 2017. Three months ended June 30, 2017 As Reported Impact of ASU 2014-09 Impact of ASU 2017-07 As Adjusted (Unaudited) $ $ $ $ Sales 1,224 (3 ) — 1,221 Operating expenses Cost of sales, excluding depreciation and amortization 968 — 3 971 Depreciation and amortization 79 — — 79 Selling, general and administrative 111 (3 ) (1 ) 107 Other operating loss, net 2 — — 2 1,160 (3 ) 2 1,159 Operating income (loss) 64 — (2 ) 62 Interest expense, net 17 — — 17 Non-service components of net periodic benefit cost — — (2 ) (2 ) Earnings before income taxes 47 — — 47 Income tax expense 9 — — 9 Net earnings 38 — — 38 Six months ended June 30, 2017 As Reported Impact of ASU 2014-09 Impact of ASU 2017-07 As Adjusted (Unaudited) $ $ $ $ Sales 2,528 (5 ) — 2,523 Operating expenses Cost of sales, excluding depreciation and amortization 2,043 — 7 2,050 Depreciation and amortization 159 — — 159 Selling, general and administrative 219 (5 ) (1 ) 213 Other operating loss, net 1 — — 1 2,422 (5 ) 6 2,423 Operating income (loss) 106 — (6 ) 100 Interest expense, net 34 — — 34 Non-service components of net periodic benefit cost — — (6 ) (6 ) Earnings before income taxes 72 — — 72 Income tax expense 14 — — 14 Net earnings 58 — — 58 |
Financial Instruments | FINANCIAL INSTRUMENTS In January 2016, the FASB issued ASU 2016-01, “ Recognition and Measurement of Financial Assets and Financial Liabilities, The Company adopted the new guidance on January 1, 2018 with no impact on the consolidated financial statements. |
Derivatives and Hedging | DERIVATIVES AND HEDGING In March 2016, the FASB issued ASU 2016-05, “ Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships, The Company adopted the new guidance on January 1, 2018 with no impact on the consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, “ Targeted Improvements to Accounting for Hedging Activities The Company early adopted the new guidance on January 1, 2018 with no impact on the consolidated financial statements. |
Classification of Cash Flows | CLASSIFICATION OF CASH FLOWS In August 2016, the FASB issued ASU 2016-15, “ Statement of Cash Flows, The Company adopted the new guidance on January 1, 2018 with no impact on the consolidated financial statements. |
Future Accounting Changes [Member] | |
Leases | LEASES In February 2016 Leases, As a lessee, Domtar’s various leases under existing guidance are classified as operating leases that are not recorded on the balance sheet but are recorded in the statement of earnings as expense is incurred. Upon adoption of the new guidance, lease expense will generally be recognized on a straight-line basis over the lease term and the Company will be required to record substantially all leases on the Consolidated Balance Sheets as a right-of-use asset and a lease liability. The Company is currently in the process of evaluating its existing lease portfolio. While the precise amount of the right-of-use asset and lease liability will not be known until closer to the adoption date, management estimates the amount to be less than 5% of both total assets and total liabilities. This estimate is based on the Company’s Consolidated Balance Sheet and lease portfolio, both as of June 30, 2018. The adoption of the guidance will likely have an insignificant impact on the Company’s Consolidated Statements of Earnings and Comprehensive (Loss) Income. The Company will adopt the new lease guidance on January 1, 2019 and, if required, recognize a cumulative-effect adjustment to the retained earnings as of that date. Upon adoption, the Company will continue to report comparative periods presented in the financial statements under current GAAP (ASC 840, Leases) and provide the required disclosures under ASC 840 for all periods presented under ASC 840. |
Recent Accounting Pronounceme24
Recent Accounting Pronouncements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Changes And Error Corrections [Abstract] | |
Schedule of Reclassification to Consolidated Statement of Earnings and Comprehensive (Loss) Income | On January 1, 2018, the Company adopted the guidance of this accounting standard update which resulted in a reclassification in the Company’s Consolidated Statement of Earnings and Comprehensive (Loss) Income for the three and six months ended June 30, 2017. Three months ended June 30, 2017 As Reported Impact of ASU 2014-09 Impact of ASU 2017-07 As Adjusted (Unaudited) $ $ $ $ Sales 1,224 (3 ) — 1,221 Operating expenses Cost of sales, excluding depreciation and amortization 968 — 3 971 Depreciation and amortization 79 — — 79 Selling, general and administrative 111 (3 ) (1 ) 107 Other operating loss, net 2 — — 2 1,160 (3 ) 2 1,159 Operating income (loss) 64 — (2 ) 62 Interest expense, net 17 — — 17 Non-service components of net periodic benefit cost — — (2 ) (2 ) Earnings before income taxes 47 — — 47 Income tax expense 9 — — 9 Net earnings 38 — — 38 Six months ended June 30, 2017 As Reported Impact of ASU 2014-09 Impact of ASU 2017-07 As Adjusted (Unaudited) $ $ $ $ Sales 2,528 (5 ) — 2,523 Operating expenses Cost of sales, excluding depreciation and amortization 2,043 — 7 2,050 Depreciation and amortization 159 — — 159 Selling, general and administrative 219 (5 ) (1 ) 213 Other operating loss, net 1 — — 1 2,422 (5 ) 6 2,423 Operating income (loss) 106 — (6 ) 100 Interest expense, net 34 — — 34 Non-service components of net periodic benefit cost — — (6 ) (6 ) Earnings before income taxes 72 — — 72 Income tax expense 14 — — 14 Net earnings 58 — — 58 |
Derivatives and Hedging Activ25
Derivatives and Hedging Activities and Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments for Natural Gas Contracts Outstanding | The following table presents the volumes under derivative financial instruments for natural gas contracts outstanding as of June 30, 2018 to hedge forecasted purchases: Commodity Notional contractual quantity under derivative contracts MMBTU (2) Notional contractual value under derivative contracts (in millions of dollars) Percentage of forecasted purchases under derivative contracts Natural gas 2018 (1) 6,025,000 $ 18 50% 2019 11,430,000 $ 34 45% 2020 8,880,000 $ 27 35% 2021 3,920,000 $ 12 16% 2022 2,070,000 $ 6 8% (1) Represents the remaining six months of 2018 (2) MMBTU: Millions of British thermal units |
Currency Values under Significant Contracts Pursuant to Currency Options Outstanding | The following table presents the currency values under significant currency positions pursuant to currency derivatives outstanding as of June 30, 2018 to hedge forecasted purchases and sales: Currency exposure hedged Business Segment Year of maturity Notional contractual value Percentage of forecasted net exposures under contracts Average Protection rate Average Obligation rate 2018 (1) CAD/USD Pulp and Paper 300 CAD 71% 1 USD = 1.2763 1 USD = 1.3165 USD/Euro Personal Care 31 USD 71% 1 Euro = 1.1830 1 Euro = 1.2138 2019 CAD/USD Pulp and Paper 425 CAD 50% 1 USD = 1.2757 1 USD = 1.3067 USD/Euro Personal Care 9 USD 10% 1 Euro = 1.2233 1 Euro = 1.2959 2020 CAD/USD Pulp and Paper 143 CAD 17% 1 USD = 1.2794 1 USD = 1.2794 |
Fair Value of Financial Instruments | The following tables present information about the Company’s financial assets and financial liabilities measured at fair value on a recurring basis (except Long-term debt, see (b) below) at June 30, 2018 and December 31, 2017, in accordance with the accounting standards for fair value measurements and disclosures and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. Fair Value of financial instruments at: June 30, 2018 Quoted prices in active markets for identical assets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Balance sheet classification $ $ $ $ Derivatives designated as hedging instruments: Asset derivatives Currency derivatives 4 — 4 — (a) Prepaid expenses Natural gas swap contracts 1 — 1 — (a) Prepaid expenses Total Assets 5 — 5 — Liabilities derivatives Currency derivatives 9 — 9 — (a) Trade and other payables Natural gas swap contracts 1 — 1 — (a) Trade and other payables Natural gas swap contracts 6 — 6 — (a) Other liabilities and deferred credits Total Liabilities 16 — 16 — Other Instruments: Stock-based compensation - liability awards 7 7 — — Trade and other payables Stock-based compensation - liability awards 17 17 — — Other liabilities and deferred credits Long-term debt 1,141 — 1,141 — (b) Long-term debt The net cumulative loss recorded in Accumulated other comprehensive loss relating to natural gas contracts is $6 million at June 30, 2018, which will be recognized in Cost of sales upon maturity of the derivatives, at the then prevailing values, which may be different from those at June 30, 2018. The net cumulative loss recorded in Accumulated other comprehensive loss relating to currency options and forwards hedging forecasted purchases is $5 million at June 30, 2018, of which a loss of $5 million will be recognized in Cost of sales or Sales upon maturity of the derivatives over the next 12 months at the then prevailing values, which may be different from those at June 30, 2018. Fair Value of financial instruments at: December 31, 2017 Quoted prices in active markets for identical assets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Balance sheet classification $ $ $ $ Derivatives designated as hedging instruments: Asset derivatives Currency derivatives 16 — 16 — (a) Prepaid expenses Currency derivatives 4 — 4 — (a) Other assets Natural gas swap contracts 1 — 1 — (a) Other assets Total Assets 21 — 21 — Liabilities derivatives Currency derivatives 5 — 5 — (a) Trade and other payables Natural gas swap contracts 2 — 2 — (a) Trade and other payables Natural gas swap contracts 5 — 5 — (a) Other liabilities and deferred credits Total Liabilities 12 — 12 — Other Instruments: Stock-based compensation - liability awards 6 6 — — Trade and other payables Stock-based compensation - liability awards 20 20 — — Other liabilities and deferred credits Long-term debt 1,216 — 1,216 — (b) Long-term debt (a) Fair value of the Company’s derivatives are classified under Level 2 (inputs that are observable; directly or indirectly) as it is measured as follows: - For currency derivatives: Fair value is measured using techniques derived from the Black-Scholes pricing model. Interest rates, forward market rates and volatility are used as inputs for such valuation techniques. - For natural gas contracts: Fair value is measured using the discounted difference between contractual rates and quoted market future rates. (b) Fair value of the Company’s long-term debt is measured by comparison to market prices of its debt. The Company’s long-term debt is not carried at fair value on the Consolidated Balance Sheets at June 30, 2018 and December 31, 2017. However, fair value disclosure is required. The carrying value of the Company’s long-term debt is $1,104 million and $1,130 million at June 30, 2018 and December 31, 2017, respectively. |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation Between Basic and Diluted Earnings Per Common Share | The following table provides the reconciliation between basic and diluted earnings per common share: For the three months ended For the six months ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Net earnings $ 43 $ 38 $ 97 $ 58 Weighted average number of common shares outstanding (millions) 62.9 62.6 62.8 62.6 Effect of dilutive securities (millions) 0.3 0.1 0.3 0.1 Weighted average number of diluted common shares outstanding (millions) 63.2 62.7 63.1 62.7 Basic net earnings per common share (in dollars) $ 0.68 $ 0.61 $ 1.54 $ 0.93 Diluted $ 0.68 $ 0.61 $ 1.54 $ 0.93 |
Securities that Could Potentially Dilute Basic Earnings Per Common Share in Future | The following table provides the securities that could potentially dilute basic earnings per common share in the future, but were not included in the computation of diluted earnings per common share because to do so would have been anti-dilutive: For the three months ended For the six months ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Options 230,601 517,246 230,601 419,161 |
Pension Plans and Other Post-27
Pension Plans and Other Post-Retirement Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Net Periodic Benefit Cost for Pension Plans and Other Post-Retirement Benefit Plans | Components of net periodic benefit cost for pension plans and other post-retirement benefit plans: For the three months ended For the six months ended June 30, 2018 June 30, 2018 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 9 1 17 1 Interest expense 13 1 27 1 Expected return on plan assets (22 ) — (43 ) — Amortization of net actuarial loss 2 — 4 — Amortization of prior year service costs 2 (1 ) 3 (1 ) Net periodic benefit cost 4 1 8 1 Components of net periodic benefit cost for pension plans and other post-retirement benefit plans: For the three months ended For the six months ended June 30, 2017 June 30, 2017 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 7 1 15 1 Interest expense 13 1 25 2 Expected return on plan assets (20 ) — (40 ) — Amortization of net actuarial loss 2 — 4 — Amortization of prior year service costs 2 — 3 — Net periodic benefit cost 4 2 7 3 |
Other Operating (Income) Loss28
Other Operating (Income) Loss, Net (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Other Income And Expenses [Abstract] | |
Components of Other Operating (Income) Loss, Net | The Company’s other operating (income) loss, net includes the following: For the three months ended For the six months ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 $ $ $ $ Gain on sale of property, plant and equipment (3 ) — (4 ) — Bad debt expense — 1 1 1 Environmental provision — 2 — 2 Foreign exchange (gain) loss — — (3 ) 1 Other 1 (1 ) (1 ) (3 ) Other operating (income) loss, net (2 ) 2 (7 ) 1 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The following table presents the components of inventories: June 30, December 31, 2018 2017 $ $ Work in process and finished goods 388 399 Raw materials 140 135 Operating and maintenance supplies 228 223 756 757 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Components of Intangible Assets | The following table presents the components of intangible assets: June 30, 2018 December 31, 2017 Estimated useful lives (in years) Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net $ $ $ $ $ $ Definite-lived intangible assets subject to amortization Water rights 40 3 (1 ) 2 3 (1 ) 2 Customer relationships 10 – 40 387 (87 ) 300 392 (79 ) 313 Technology 7 – 20 8 (4 ) 4 8 (4 ) 4 Non-Compete 9 1 (1 ) — 1 (1 ) — License rights 12 28 (11 ) 17 29 (11 ) 18 427 (104 ) 323 433 (96 ) 337 Indefinite-lived intangible assets not subject to amortization Water rights 4 — 4 4 — 4 Trade names 241 — 241 245 — 245 License rights 6 — 6 6 — 6 Catalog rights 40 — 40 41 — 41 Total 718 (104 ) 614 729 (96 ) 633 |
Amortization Expense Related to Intangible Assets | Amortization expense for the next five years related to intangible assets is expected to be as follows: 2018 2019 2020 2021 2022 $ $ $ $ $ Amortization expense related to intangible assets 21 (1) 21 21 21 21 (1) Represents twelve months of amortization |
Changes in Accumulated Other 31
Changes in Accumulated Other Comprehensive Loss by Component (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Loss by Component | The following table presents the changes in Accumulated other comprehensive loss by component ( 1) Net derivative gains (losses) on cash flow hedges Pension items (2) Post-retirement benefit items (2) Foreign currency items Total $ $ $ $ $ Balance at December 31, 2016 11 (221 ) (11 ) (278 ) (499 ) Natural gas swap contracts (5 ) N/A N/A N/A (5 ) Currency options 11 N/A N/A N/A 11 Net (gain) loss N/A (6 ) 17 N/A 11 Foreign currency items N/A N/A N/A 146 146 Other comprehensive income (loss) before reclassifications 6 (6 ) 17 146 163 Amounts reclassified from Accumulated other comprehensive loss (9 ) 9 — — — Net current period other comprehensive (loss) income (3 ) 3 17 146 163 Balance at December 31, 2017 8 (218 ) 6 (132 ) (336 ) Natural gas swap contracts (1 ) N/A N/A N/A (1 ) Currency options (8 ) N/A N/A N/A (8 ) Foreign exchange forward contracts (7 ) N/A N/A N/A (7 ) Foreign currency items N/A N/A N/A (61 ) (61 ) Other comprehensive loss before reclassifications (16 ) — — (61 ) (77 ) Amounts reclassified from Accumulated other comprehensive loss (2 ) 5 (1 ) — 2 Net current period other comprehensive (loss) income (18 ) 5 (1 ) (61 ) (75 ) Balance at June 30, 2018 (10 ) (213 ) 5 (193 ) (411 ) (1) All amounts are after tax. Amounts in parentheses indicate losses. (2) The accrued benefit obligation is actuarially determined on an annual basis as of December 31. |
Schedule of Reclassifications Out of Accumulated Other Comprehensive Loss | The following table presents reclassifications out of Accumulated other comprehensive loss: Details about Accumulated other comprehensive loss components Amounts reclassified from Accumulated other comprehensive loss (1) For the three months ended June 30, 2018 June 30, 2017 $ $ Net derivative losses on cash flow hedge Natural gas swap contracts 1 — (2) Currency options and forwards (1 ) (1 ) (2) Total before tax — (1 ) Tax benefit — — Net of tax — (1 ) Amortization of defined benefit pension items Amortization of net actuarial loss 2 2 (3) Amortization of prior year service cost 2 2 (3) Total before tax 4 4 Tax expense (1 ) (1 ) Net of tax 3 3 Amortization of other post-retirement benefit items Amortization of net actuarial loss — — (3) Amortization of prior year service cost (1 ) — (3) Total before tax (1 ) — Tax benefit — — Net of tax (1 ) — Amounts reclassified from Accumulated other comprehensive loss (1) For the six months ended June 30, 2018 June 30, 2017 $ $ Net derivatives losses on cash flow hedge Natural gas swap contracts — (1 ) (2) Currency options and forwards (3 ) (5 ) (2) Total before tax (3 ) (6 ) Tax benefit 1 2 Net of tax (2 ) (4 ) Amortization of defined benefit pension items Amortization of net actuarial loss 4 4 (3) Amortization of prior year service cost 3 3 (3) Total before tax 7 7 Tax expense (2 ) (2 ) Net of tax 5 5 Amortization of other post-retirement benefit items Amortization of net actuarial loss — — (3) Amortization of prior year service cost (1 ) — (3) Total before tax (1 ) — Tax benefit — — Net of tax (1 ) — (1) Amounts in parentheses indicate losses. (2) These amounts are included in Cost of Sales in the Consolidated Statements of Earnings and Comprehensive (Loss) Income. (3) These amounts are included in the computation of net periodic benefit cost (see Note 5 “Pension Plans and Other Post-Retirement Benefit Plans” for more details). |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Environmental Remediation Obligations [Abstract] | |
Changes in Reserve for Environmental Remediation and Asset Retirement Obligations | The following table reflects changes in the reserve for environmental remediation and asset retirement obligations: June 30, 2018 $ Balance at beginning of year 44 Environmental spending (7 ) Reversal of provision (1 ) Effect of foreign currency exchange rate change (1 ) Balance at end of period 35 |
Segment Disclosures (Tables)
Segment Disclosures (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Analysis and Reconciliation of Reportable Segment Information | DOMTAR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2018 (IN MILLIONS OF DOLLARS, UNLESS OTHERWISE NOTED (UNAUDITED) An analysis and reconciliation of the Company’s business segment information to the respective information in the financial statements is as follows: For the three months ended For the six months ended June 30, June 30, June 30, June 30, SEGMENT DATA 2018 2017 2018 2017 $ $ $ $ Sales by segment (1) Pulp and Paper 1,123 999 2,223 2,072 Personal Care 247 238 509 485 Total for reportable segments 1,370 1,237 2,732 2,557 Intersegment sales (17 ) (16 ) (34 ) (34 ) Consolidated sales 1,353 1,221 2,698 2,523 Sales by product group Communication papers 634 578 1,265 1,201 Specialty and packaging papers 181 156 355 319 Market pulp 291 249 569 518 Absorbent hygiene products 247 238 509 485 Consolidated sales 1,353 1,221 2,698 2,523 Depreciation and amortization Pulp and Paper 61 63 122 127 Personal Care 18 16 36 32 Consolidated depreciation and amortization 79 79 158 159 Operating income (loss) (2) Pulp and Paper 79 62 155 92 Personal Care 2 13 10 29 Corporate (19 ) (13 ) (26 ) (21 ) Consolidated operating income 62 62 139 100 Interest expense, net 16 17 32 34 Non-service components of net periodic benefit cost (5 ) (2 ) (9 ) (6 ) Earnings before income taxes 51 47 116 72 Income tax expense 8 9 19 14 Net earnings 43 38 97 58 |
Supplemental Guarantor Financ34
Supplemental Guarantor Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Condensed Consolidating Statement of Earnings and Comprehensive (Loss) Income | DOMTAR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2018 (IN MILLIONS OF DOLLARS, UNLESS OTHERWISE NOTED (UNAUDITED) NOTE 15. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED) For the three months ended June 30, 2018 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE (LOSS) INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 1,089 564 (300 ) 1,353 Operating expenses Cost of sales, excluding depreciation and amortization — 943 453 (300 ) 1,096 Depreciation and amortization — 55 24 — 79 Selling, general and administrative 3 23 92 — 118 Other operating loss (income), net — 1 (3 ) — (2 ) 3 1,022 566 (300 ) 1,291 Operating (loss) income (3 ) 67 (2 ) — 62 Interest expense (income), net 16 23 (23 ) — 16 Non-service components of net periodic benefit cost — (1 ) (4 ) — (5 ) (Loss) earnings before income taxes (19 ) 45 25 — 51 Income tax (benefit) expense (4 ) 8 4 — 8 Share in earnings of equity accounted investees 58 21 — (79 ) — Net earnings 43 58 21 (79 ) 43 Other comprehensive loss (55 ) (57 ) (50 ) 107 (55 ) Comprehensive (loss) income (12 ) 1 (29 ) 28 (12 ) For the six months ended June 30, 2018 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 2,172 1,112 (586 ) 2,698 Operating expenses Cost of sales, excluding depreciation and amortization — 1,886 880 (586 ) 2,180 Depreciation and amortization — 111 47 — 158 Selling, general and administrative 7 68 153 — 228 Other operating income, net — (1 ) (6 ) — (7 ) 7 2,064 1,074 (586 ) 2,559 Operating (loss) income (7 ) 108 38 — 139 Interest expense (income), net 32 45 (45 ) — 32 Non-service components of net periodic benefit cost — — (9 ) — (9 ) (Loss) earnings before income taxes (39 ) 63 92 — 116 Income tax (benefit) expense (8 ) 12 15 — 19 Share in earnings of equity accounted investees 128 77 — (205 ) — Net earnings 97 128 77 (205 ) 97 Other comprehensive loss (75 ) (75 ) (60 ) 135 (75 ) Comprehensive income 22 53 17 (70 ) 22 For the three months ended June 30, 2017 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 1,011 496 (286 ) 1,221 Operating expenses Cost of sales, excluding depreciation and amortization — 878 379 (286 ) 971 Depreciation and amortization — 58 21 — 79 Selling, general and administrative 2 31 74 — 107 Other operating loss, net — — 2 — 2 2 967 476 (286 ) 1,159 Operating (loss) income (2 ) 44 20 — 62 Interest expense (income), net 16 22 (21 ) — 17 Non-service components of net periodic benefit cost — — (2 ) — (2 ) (Loss) earnings before income taxes (18 ) 22 43 — 47 Income tax (benefit) expense (5 ) 3 11 — 9 Share in earnings of equity accounted investees 51 32 — (83 ) — Net earnings 38 51 32 (83 ) 38 Other comprehensive income 71 76 69 (145 ) 71 Comprehensive income 109 127 101 (228 ) 109 For the six months ended June 30, 2017 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 2,097 1,010 (584 ) 2,523 Operating expenses Cost of sales, excluding depreciation and amortization — 1,848 786 (584 ) 2,050 Depreciation and amortization — 117 42 — 159 Selling, general and administrative 4 64 145 — 213 Other operating (income) loss, net — (2 ) 3 — 1 4 2,027 976 (584 ) 2,423 Operating (loss) income (4 ) 70 34 — 100 Interest expense (income), net 33 42 (41 ) — 34 Non-service components of net periodic benefit cost — — (6 ) — (6 ) (Loss) earnings before income taxes (37 ) 28 81 — 72 Income tax (benefit) expense (9 ) 5 18 — 14 Share in earnings of equity accounted investees 86 63 — (149 ) — Net earnings 58 86 63 (149 ) 58 Other comprehensive income 85 94 85 (179 ) 85 Comprehensive income 143 180 148 (328 ) 143 |
Condensed Consolidating Balance Sheet | June 30, 2018 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING BALANCE SHEET Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Assets Current assets Cash and cash equivalents 141 35 88 — 264 Receivables — 399 268 — 667 Inventories — 521 235 — 756 Prepaid expenses 13 14 8 — 35 Income and other taxes receivable 31 2 15 (27 ) 21 Intercompany accounts 353 481 44 (878 ) — Total current assets 538 1,452 658 (905 ) 1,743 Property, plant and equipment, net — 1,796 833 — 2,629 Intangible assets, net — 262 352 — 614 Investments in affiliates 3,946 2,602 — (6,548 ) — Intercompany long-term advances 6 81 1,604 (1,691 ) — Other assets 21 23 133 (18 ) 159 Total assets 4,511 6,216 3,580 (9,162 ) 5,145 Liabilities and shareholders' equity Current liabilities Bank indebtedness — 1 — — 1 Trade and other payables 55 418 249 — 722 Intercompany accounts 401 65 412 (878 ) — Income and other taxes payable 2 36 18 (27 ) 29 Long-term debt due within one year — — 1 — 1 Total current liabilities 458 520 680 (905 ) 753 Long-term debt 793 299 11 — 1,103 Intercompany long-term loans 742 948 1 (1,691 ) — Deferred income taxes and other — 344 149 (18 ) 475 Other liabilities and deferred credits 60 159 137 — 356 Shareholders' equity 2,458 3,946 2,602 (6,548 ) 2,458 Total liabilities and shareholders' equity 4,511 6,216 3,580 (9,162 ) 5,145 December 31, 2017 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING BALANCE SHEET Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Assets Current assets Cash and cash equivalents 3 14 122 — 139 Receivables — 402 302 — 704 Inventories — 522 235 — 757 Prepaid expenses 5 22 6 — 33 Income and other taxes receivable 7 1 16 — 24 Intercompany accounts 380 314 45 (739 ) — Total current assets 395 1,275 726 (739 ) 1,657 Property, plant and equipment, net — 1,870 895 — 2,765 Intangible assets, net — 268 365 — 633 Investments in affiliates 3,892 2,609 — (6,501 ) — Intercompany long-term advances 6 81 1,513 (1,600 ) — Other assets 22 24 129 (18 ) 157 Total assets 4,315 6,127 3,628 (8,858 ) 5,212 Liabilities and shareholders' equity Current liabilities Trade and other payables 55 424 237 — 716 Intercompany accounts 244 63 432 (739 ) — Income and other taxes payable 1 14 9 — 24 Long-term debt due within one year — — 1 — 1 Total current liabilities 300 501 679 (739 ) 741 Long-term debt 792 300 37 — 1,129 Intercompany long-term loans 674 925 1 (1,600 ) — Deferred income taxes and other — 356 153 (18 ) 491 Other liabilities and deferred credits 66 153 149 — 368 Shareholders' equity 2,483 3,892 2,609 (6,501 ) 2,483 Total liabilities and shareholders' equity 4,315 6,127 3,628 (8,858 ) 5,212 |
Condensed Consolidating Statement of Cash Flows | For the six months ended June 30, 2018 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Adjustments Consolidated $ $ $ $ $ Operating activities Net earnings 97 128 77 (205 ) 97 Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings 34 (104 ) 35 205 170 Cash flows from operating activities 131 24 112 — 267 Investing activities Additions to property, plant and equipment — (33 ) (29 ) — (62 ) Proceeds from disposals of property, plant and equipment — — 4 — 4 Other — (2 ) (4 ) — (6 ) Cash flows used for investing activities — (35 ) (29 ) — (64 ) Financing activities Dividend payments (53 ) — — — (53 ) Repayments of receivables securitization facility — — (25 ) — (25 ) Increase in long-term advances to related parties — — (90 ) 90 — Decrease in long-term advances to related parties 58 32 — (90 ) — Other 2 — — — 2 Cash flows provided from (used for) financing activities 7 32 (115 ) — (76 ) Net increase (decrease) in cash and cash equivalents 138 21 (32 ) — 127 Impact of foreign exchange on cash — — (2 ) — (2 ) Cash and cash equivalents at beginning of period 3 14 122 — 139 Cash and cash equivalents at end of period 141 35 88 — 264 For the six months ended June 30, 2017 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Adjustments Consolidated $ $ $ $ $ Operating activities Net earnings 58 86 63 (149 ) 58 Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings 77 (107 ) 35 149 154 Cash flows provided from (used for) operating activities 135 (21 ) 98 — 212 Investing activities Additions to property, plant and equipment — (39 ) (32 ) — (71 ) Cash flows used for investing activities — (39 ) (32 ) — (71 ) Financing activities Dividend payments (52 ) — — — (52 ) Net change in bank indebtedness — (12 ) — — (12 ) Change in revolving credit facility (30 ) — — — (30 ) Proceeds from receivables securitization facility — — 25 — 25 Repayments of receivables securitization facility — — (15 ) — (15 ) Repayments of long-term debt (63 ) — — — (63 ) Increase in long-term advances to related parties (5 ) — (61 ) 66 — Decrease in long-term advances to related parties — 66 — (66 ) — Other (1 ) — — — (1 ) Cash flows (used for) provided from financing activities (151 ) 54 (51 ) — (148 ) Net (decrease) increase in cash and cash equivalents (16 ) (6 ) 15 — (7 ) Impact of foreign exchange on cash — — 6 — 6 Cash and cash equivalents at beginning of period 17 14 94 — 125 Cash and cash equivalents at end of period 1 8 115 — 124 |
Recent Accounting Pronounceme35
Recent Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||
Decrease in previously reported sales and selling, general and administrative expenses | $ (118) | $ (107) | $ (228) | $ (213) |
Increase in previously reported cost of sales | $ 1,096 | 971 | $ 2,180 | 2,050 |
Maximum [Member] | ||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||
Percentage of management estimates of right-of-use asset and lease liability | 5.00% | 5.00% | ||
Adjustment [Member] | ASU 2014-09 [Member] | ||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||
Decrease in previously reported sales and selling, general and administrative expenses | 3 | 5 | ||
Adjustment [Member] | ASU 2017-07 [Member] | ||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||
Decrease in previously reported sales and selling, general and administrative expenses | 1 | 1 | ||
Increase in previously reported cost of sales | $ 3 | $ 7 |
Recent Accounting Pronounceme36
Recent Accounting Pronouncements - Schedule of Reclassification to Consolidated Statement of Earnings and Comprehensive (Loss) Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Sales | $ 1,353 | $ 1,221 | $ 2,698 | $ 2,523 |
Operating expenses | ||||
Cost of sales, excluding depreciation and amortization | 1,096 | 971 | 2,180 | 2,050 |
Depreciation and amortization | 79 | 79 | 158 | 159 |
Selling, general and administrative | 118 | 107 | 228 | 213 |
Other operating (income) loss, net | (2) | 2 | (7) | 1 |
Operating expenses | 1,291 | 1,159 | 2,559 | 2,423 |
Operating income | 62 | 62 | 139 | 100 |
Interest expense, net | 16 | 17 | 32 | 34 |
Non-service components of net periodic benefit cost | (5) | (2) | (9) | (6) |
Earnings before income taxes | 51 | 47 | 116 | 72 |
Income tax expense (NOTE 7) | 8 | 9 | 19 | 14 |
Net earnings | $ 43 | 38 | $ 97 | 58 |
As Reported [Member] | ||||
Sales | 1,224 | 2,528 | ||
Operating expenses | ||||
Cost of sales, excluding depreciation and amortization | 968 | 2,043 | ||
Depreciation and amortization | 79 | 159 | ||
Selling, general and administrative | 111 | 219 | ||
Other operating (income) loss, net | 2 | 1 | ||
Operating expenses | 1,160 | 2,422 | ||
Operating income | 64 | 106 | ||
Interest expense, net | 17 | 34 | ||
Earnings before income taxes | 47 | 72 | ||
Income tax expense (NOTE 7) | 9 | 14 | ||
Net earnings | 38 | 58 | ||
Restatement Adjustment [Member] | Impact of ASU 2014-09 [Member] | ||||
Sales | (3) | (5) | ||
Operating expenses | ||||
Selling, general and administrative | (3) | (5) | ||
Operating expenses | (3) | (5) | ||
Restatement Adjustment [Member] | Impact of ASU 2017-07 | ||||
Operating expenses | ||||
Cost of sales, excluding depreciation and amortization | 3 | 7 | ||
Selling, general and administrative | (1) | (1) | ||
Operating expenses | 2 | 6 | ||
Operating income | (2) | (6) | ||
Non-service components of net periodic benefit cost | $ (2) | $ (6) |
Derivatives and Hedging Activ37
Derivatives and Hedging Activities and Fair Value Measurement - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018USD ($)Customer | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)Customer | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($)Customer | |
Derivative [Line Items] | |||||
Number of major customers | Customer | 2 | 2 | 1 | ||
Maximum [Member] | Canadian Subsidiary [Member] | Canadian Dollars [Member] | |||||
Derivative [Line Items] | |||||
Length of time current hedges cover | 24 months | ||||
Maximum [Member] | European Subsidiaries [Member] | Swedish Krona [Member] | |||||
Derivative [Line Items] | |||||
Length of time current hedges cover | 8 months | ||||
Maximum [Member] | European Subsidiaries [Member] | U.S. Dollars [Member] | |||||
Derivative [Line Items] | |||||
Length of time current hedges cover | 8 months | ||||
Maximum [Member] | European Subsidiaries [Member] | British Pounds [Member] | |||||
Derivative [Line Items] | |||||
Length of time current hedges cover | 8 months | ||||
Forecasted Natural Gas and Oil Purchases [Member] | Maximum [Member] | |||||
Derivative [Line Items] | |||||
Length of time current hedges cover | 48 months | ||||
Natural Gas Swap Contracts [Member] | |||||
Derivative [Line Items] | |||||
Earnings hedge ineffectiveness | $ 0 | $ 0 | $ 0 | $ 0 | |
Cumulative (loss) gain recorded in accumulated other comprehensive loss | $ (6,000,000) | ||||
Foreign Currency Investment [Member] | |||||
Derivative [Line Items] | |||||
Length of time current hedges cover | 3 years | ||||
Currency Derivatives [Member] | |||||
Derivative [Line Items] | |||||
Earnings hedge ineffectiveness | 0 | $ 0 | $ 0 | $ 0 | |
Cumulative (loss) gain recorded in accumulated other comprehensive loss | $ (5,000,000) | ||||
Recognition of OCI in Cost of sales | 12 months | ||||
Currency Derivatives [Member] | Cost of Sale [Member] | |||||
Derivative [Line Items] | |||||
Cumulative (loss) gain recorded in accumulated other comprehensive loss | $ (5,000,000) | ||||
Pulp and Paper Segment Customer One [Member] | |||||
Derivative [Line Items] | |||||
Receivables from major customers | 74,000,000 | 74,000,000 | $ 83,000,000 | ||
Pulp and Paper Segment Customer Two [Member] | |||||
Derivative [Line Items] | |||||
Receivables from major customers | $ 71,000,000 | $ 71,000,000 | |||
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Pulp and Paper Segment Customer One [Member] | |||||
Derivative [Line Items] | |||||
Maximum percentage of receivables a single customer represents | 11.00% | 12.00% | |||
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Pulp and Paper Segment Customer Two [Member] | |||||
Derivative [Line Items] | |||||
Maximum percentage of receivables a single customer represents | 11.00% |
Derivatives and Hedging Activ38
Derivatives and Hedging Activities and Fair Value Measurement - Derivative Financial Instruments for Natural Gas Contracts Outstanding (Detail) | Jun. 30, 2018USD ($)MMBTU |
2018 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | MMBTU | 6,025,000 |
Notional contractual value under derivative contracts | $ | $ 18,000,000 |
Percentage of forecasted purchases under derivative contracts | 50.00% |
2019 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | MMBTU | 11,430,000 |
Notional contractual value under derivative contracts | $ | $ 34,000,000 |
Percentage of forecasted purchases under derivative contracts | 45.00% |
2020 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | MMBTU | 8,880,000 |
Notional contractual value under derivative contracts | $ | $ 27,000,000 |
Percentage of forecasted purchases under derivative contracts | 35.00% |
2021 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | MMBTU | 3,920,000 |
Notional contractual value under derivative contracts | $ | $ 12,000,000 |
Percentage of forecasted purchases under derivative contracts | 16.00% |
2022 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | MMBTU | 2,070,000 |
Notional contractual value under derivative contracts | $ | $ 6,000,000 |
Percentage of forecasted purchases under derivative contracts | 8.00% |
Derivatives and Hedging Activ39
Derivatives and Hedging Activities and Fair Value Measurement - Currency Values under Significant Currency Positions Pursuant to Currency Derivatives Outstanding (Detail) - Long [Member] | 6 Months Ended | |
Jun. 30, 2018USD ($) | Jun. 30, 2018CAD ($) | |
Pulp and Paper [Member] | CAD/USD Denominated Notional Contractual Value For 2018 [Member] | ||
Derivative [Line Items] | ||
Notional contractual value | $ 300,000,000 | |
Percentage of forecasted net exposures under contracts | 71.00% | |
Currency exposure hedged, Average Protection rate | 1.2763 | 1.2763 |
Currency exposure hedged, Average Obligation rate | 1.3165 | 1.3165 |
Pulp and Paper [Member] | CAD/USD Denominated Notional Contractual Value For 2019 [Member] | ||
Derivative [Line Items] | ||
Notional contractual value | $ 425,000,000 | |
Percentage of forecasted net exposures under contracts | 50.00% | |
Currency exposure hedged, Average Protection rate | 1.2757 | 1.2757 |
Currency exposure hedged, Average Obligation rate | 1.3067 | 1.3067 |
Pulp and Paper [Member] | CAD/USD Denominated Notional Contractual Value For 2020 [Member] | ||
Derivative [Line Items] | ||
Notional contractual value | $ 143,000,000 | |
Percentage of forecasted net exposures under contracts | 17.00% | |
Currency exposure hedged, Average Protection rate | 1.2794 | 1.2794 |
Currency exposure hedged, Average Obligation rate | 1.2794 | 1.2794 |
Personal Care [Member] | USD/Euro Denominated Notional Contractual Value For 2018 [Member] | ||
Derivative [Line Items] | ||
Notional contractual value | $ 31,000,000 | |
Percentage of forecasted net exposures under contracts | 71.00% | |
Currency exposure hedged, Average Protection rate | 1.1830 | 1.1830 |
Currency exposure hedged, Average Obligation rate | 1.2138 | 1.2138 |
Personal Care [Member] | USD/Euro Denominated Notional Contractual Value For 2019 [Member] | ||
Derivative [Line Items] | ||
Notional contractual value | $ 9,000,000 | |
Percentage of forecasted net exposures under contracts | 10.00% | |
Currency exposure hedged, Average Protection rate | 1.2233 | 1.2233 |
Currency exposure hedged, Average Obligation rate | 1.2959 | 1.2959 |
Derivatives and Hedging Activ40
Derivatives and Hedging Activities and Fair Value Measurement - Fair Value of Financial Instruments (Detail) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | ||
Total Assets | $ 5 | $ 21 |
Total Liabilities | 16 | 12 |
Long-term debt | 1,141 | 1,216 |
Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Stock-based compensation - liability awards | 7 | 6 |
Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Stock-based compensation - liability awards | 17 | 20 |
Currency Derivatives [Member] | Prepaid Expenses [Member] | ||
Derivative [Line Items] | ||
Total Assets | 4 | 16 |
Currency Derivatives [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 9 | 5 |
Currency Derivatives [Member] | Other Assets [Member] | ||
Derivative [Line Items] | ||
Total Assets | 4 | |
Natural Gas Swap Contracts [Member] | Prepaid Expenses [Member] | ||
Derivative [Line Items] | ||
Total Assets | 1 | |
Natural Gas Swap Contracts [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 1 | 2 |
Natural Gas Swap Contracts [Member] | Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 6 | 5 |
Natural Gas Swap Contracts [Member] | Other Assets [Member] | ||
Derivative [Line Items] | ||
Total Assets | 1 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Stock-based compensation - liability awards | 7 | 6 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Stock-based compensation - liability awards | 17 | 20 |
Significant Observable Inputs (Level 2) [Member] | ||
Derivative [Line Items] | ||
Total Assets | 5 | 21 |
Total Liabilities | 16 | 12 |
Long-term debt | 1,141 | 1,216 |
Significant Observable Inputs (Level 2) [Member] | Currency Derivatives [Member] | Prepaid Expenses [Member] | ||
Derivative [Line Items] | ||
Total Assets | 4 | 16 |
Significant Observable Inputs (Level 2) [Member] | Currency Derivatives [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 9 | 5 |
Significant Observable Inputs (Level 2) [Member] | Currency Derivatives [Member] | Other Assets [Member] | ||
Derivative [Line Items] | ||
Total Assets | 4 | |
Significant Observable Inputs (Level 2) [Member] | Natural Gas Swap Contracts [Member] | Prepaid Expenses [Member] | ||
Derivative [Line Items] | ||
Total Assets | 1 | |
Significant Observable Inputs (Level 2) [Member] | Natural Gas Swap Contracts [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 1 | 2 |
Significant Observable Inputs (Level 2) [Member] | Natural Gas Swap Contracts [Member] | Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | $ 6 | 5 |
Significant Observable Inputs (Level 2) [Member] | Natural Gas Swap Contracts [Member] | Other Assets [Member] | ||
Derivative [Line Items] | ||
Total Assets | $ 1 |
Derivatives and Hedging Activ41
Derivatives and Hedging Activities and Fair Value Measurement - Fair Value of Financial Instruments (Parenthetical) (Detail) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ||
The carrying value of the Company's long-term debt | $ 1,104 | $ 1,130 |
Earnings Per Common Share - Rec
Earnings Per Common Share - Reconciliation Between Basic and Diluted Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Net earnings | $ 43 | $ 38 | $ 97 | $ 58 |
Weighted average number of common shares outstanding (millions) | 62.9 | 62.6 | 62.8 | 62.6 |
Effect of dilutive securities (millions) | 0.3 | 0.1 | 0.3 | 0.1 |
Weighted average number of diluted common shares outstanding (millions) | 63.2 | 62.7 | 63.1 | 62.7 |
Basic net earnings per common share (in dollars) | $ 0.68 | $ 0.61 | $ 1.54 | $ 0.93 |
Diluted net earnings per common share (in dollars) | $ 0.68 | $ 0.61 | $ 1.54 | $ 0.93 |
Earnings Per Common Share - Sec
Earnings Per Common Share - Securities that Could Potentially Dilute Basic Earnings Per Common Share in Future (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Options [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per common share amount | 230,601 | 517,246 | 230,601 | 419,161 |
Pension Plans and Other Post-44
Pension Plans and Other Post-Retirement Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||
Pension expense | $ 9 | $ 9 | $ 22 | $ 21 |
Pension Plans [Member] | ||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||
Plan contributions | 4 | 3 | 7 | 6 |
Other Post-Retirement Benefit Plans [Member] | ||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||
Plan contributions | $ 1 | $ 1 | $ 2 | $ 2 |
Pension Plans and Other Post-45
Pension Plans and Other Post-Retirement Benefit Plans - Components of Net Periodic Benefit Cost for Pension Plans and Other Post-Retirement Benefit Plans (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Pension Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 9 | $ 7 | $ 17 | $ 15 |
Interest expense | 13 | 13 | 27 | 25 |
Expected return on plan assets | (22) | (20) | (43) | (40) |
Amortization of net actuarial loss | 2 | 2 | 4 | 4 |
Amortization of prior year service costs | 2 | 2 | 3 | 3 |
Net periodic benefit cost | 4 | 4 | 8 | 7 |
Other Post-Retirement Benefit Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1 | 1 | 1 | 1 |
Interest expense | 1 | 1 | 1 | 2 |
Amortization of prior year service costs | (1) | (1) | ||
Net periodic benefit cost | $ 1 | $ 2 | $ 1 | $ 3 |
Other Operating (Income) Loss46
Other Operating (Income) Loss, Net - Components of Other Operating (Income) Loss, Net (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Other Income And Expenses [Abstract] | ||||
Net gains on disposals of property, plant and equipment | $ (3) | $ (4) | ||
Bad debt expense | $ 1 | 1 | $ 1 | |
Environmental provision | 2 | 2 | ||
Foreign exchange (gain) loss | (3) | 1 | ||
Other | 1 | (1) | (1) | (3) |
Other operating (income) loss, net | $ (2) | $ 2 | $ (7) | $ 1 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense (benefit) | $ 8 | $ 9 | $ 19 | $ 14 | |
Current income tax expense (benefit) | 10 | 17 | 24 | 26 | |
Deferred income tax expense (benefit) | $ (2) | $ (8) | $ (5) | $ (12) | |
Effective income tax rate | 16.00% | 19.00% | 16.00% | 19.00% | |
Income tax payments, net of tax refunds | $ 21 | $ 25 | $ 15 | ||
Provisional repatriation tax amount | $ 46 |
Inventories - Components of Inv
Inventories - Components of Inventories (Detail) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Work in process and finished goods | $ 388 | $ 399 |
Raw materials | 140 | 135 |
Operating and maintenance supplies | 228 | 223 |
Total inventories | $ 756 | $ 757 |
Intangible Assets - Components
Intangible Assets - Components of Intangible Assets (Detail) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Intangible Assets Excluding Goodwill [Line Items] | ||
Definite-lived intangible assets subject to amortization, gross carrying amount | $ 427 | $ 433 |
Accumulated amortization | (104) | (96) |
Intangible assets, net | 323 | 337 |
Total, Gross carrying amount | 718 | 729 |
Intangible assets, net of amortization | 614 | 633 |
Water Rights [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Indefinite-lived intangible assets not subject to amortization | 4 | 4 |
Trade Names [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Indefinite-lived intangible assets not subject to amortization | 241 | 245 |
License Rights [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Indefinite-lived intangible assets not subject to amortization | 6 | 6 |
Catalog Rights [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Indefinite-lived intangible assets not subject to amortization | $ 40 | 41 |
Water Rights [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Estimated useful lives (in years) | 40 years | |
Definite-lived intangible assets subject to amortization, gross carrying amount | $ 3 | 3 |
Accumulated amortization | (1) | (1) |
Intangible assets, net | 2 | 2 |
Customer Relationships [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Definite-lived intangible assets subject to amortization, gross carrying amount | 387 | 392 |
Accumulated amortization | (87) | (79) |
Intangible assets, net | $ 300 | 313 |
Customer Relationships [Member] | Minimum [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Estimated useful lives (in years) | 10 years | |
Customer Relationships [Member] | Maximum [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Estimated useful lives (in years) | 40 years | |
Technology [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Definite-lived intangible assets subject to amortization, gross carrying amount | $ 8 | 8 |
Accumulated amortization | (4) | (4) |
Intangible assets, net | $ 4 | 4 |
Technology [Member] | Minimum [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Estimated useful lives (in years) | 7 years | |
Technology [Member] | Maximum [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Estimated useful lives (in years) | 20 years | |
Non-Compete [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Estimated useful lives (in years) | 9 years | |
Definite-lived intangible assets subject to amortization, gross carrying amount | $ 1 | 1 |
Accumulated amortization | $ (1) | (1) |
License Rights [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Estimated useful lives (in years) | 12 years | |
Definite-lived intangible assets subject to amortization, gross carrying amount | $ 28 | 29 |
Accumulated amortization | (11) | (11) |
Intangible assets, net | $ 17 | $ 18 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 5 | $ 5 | $ 10 | $ 10 |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Expense Related to Intangible Assets (Detail) $ in Millions | Jun. 30, 2018USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Amortization expense related to intangible assets, 2018 | $ 21 |
Amortization expense related to intangible assets, 2019 | 21 |
Amortization expense related to intangible assets, 2020 | 21 |
Amortization expense related to intangible assets, 2021 | 21 |
Amortization expense related to intangible assets, 2022 | $ 21 |
Changes in Accumulated Other 52
Changes in Accumulated Other Comprehensive Loss by Component - Schedule of Changes in Accumulated Other Comprehensive Loss by Component (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning balance | $ (336) | $ (499) | $ (499) | ||
Other comprehensive (loss) income before reclassifications | (77) | 163 | |||
Amounts reclassified from Accumulated other comprehensive loss | 2 | ||||
Other comprehensive (loss) income | $ (55) | $ 71 | (75) | 85 | 163 |
Ending balance | (411) | (411) | (336) | ||
Natural Gas Swap Contracts [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (1) | (5) | |||
Currency Options [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (8) | 11 | |||
Foreign Exchange Forward Contracts [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (7) | ||||
Foreign Currency Items [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (61) | 146 | |||
Net (Gain) Loss [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | 11 | ||||
Net Derivative Gains (Losses) on Cash Flow Hedges [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning balance | 8 | 11 | 11 | ||
Other comprehensive (loss) income before reclassifications | (16) | 6 | |||
Amounts reclassified from Accumulated other comprehensive loss | (2) | (9) | |||
Other comprehensive (loss) income | (18) | (3) | |||
Ending balance | (10) | (10) | 8 | ||
Net Derivative Gains (Losses) on Cash Flow Hedges [Member] | Natural Gas Swap Contracts [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (1) | (5) | |||
Net Derivative Gains (Losses) on Cash Flow Hedges [Member] | Currency Options [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (8) | 11 | |||
Net Derivative Gains (Losses) on Cash Flow Hedges [Member] | Foreign Exchange Forward Contracts [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (7) | ||||
Accumulated Defined Benefit Plans Adjustment [Member] | Pension Plans [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning balance | (218) | (221) | (221) | ||
Other comprehensive (loss) income before reclassifications | (6) | ||||
Amounts reclassified from Accumulated other comprehensive loss | 5 | 9 | |||
Other comprehensive (loss) income | 5 | 3 | |||
Ending balance | (213) | (213) | (218) | ||
Accumulated Defined Benefit Plans Adjustment [Member] | Pension Plans [Member] | Net (Gain) Loss [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (6) | ||||
Accumulated Defined Benefit Plans Adjustment [Member] | Other Post-Retirement Benefit Plans [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning balance | 6 | (11) | (11) | ||
Other comprehensive (loss) income before reclassifications | 17 | ||||
Amounts reclassified from Accumulated other comprehensive loss | (1) | ||||
Other comprehensive (loss) income | (1) | 17 | |||
Ending balance | 5 | 5 | 6 | ||
Accumulated Defined Benefit Plans Adjustment [Member] | Other Post-Retirement Benefit Plans [Member] | Net (Gain) Loss [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | 17 | ||||
Foreign Currency Items [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning balance | (132) | $ (278) | (278) | ||
Other comprehensive (loss) income before reclassifications | (61) | 146 | |||
Other comprehensive (loss) income | (61) | 146 | |||
Ending balance | $ (193) | (193) | (132) | ||
Foreign Currency Items [Member] | Foreign Currency Items [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | $ (61) | $ 146 |
Changes in Accumulated Other 53
Changes in Accumulated Other Comprehensive Loss by Component - Schedule of Reclassifications Out of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Earnings before income taxes | $ 51 | $ 47 | $ 116 | $ 72 |
Tax expense (benefit) | (8) | (9) | (19) | (14) |
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Net Derivative (Losses) Gains on Cash Flow Hedges [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Earnings before income taxes | (1) | (3) | (6) | |
Tax expense (benefit) | 1 | 2 | ||
Net of tax | (1) | (2) | (4) | |
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Net Derivative (Losses) Gains on Cash Flow Hedges [Member] | Natural Gas Swap Contracts [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of Sales | 1 | (1) | ||
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Net Derivative (Losses) Gains on Cash Flow Hedges [Member] | Currency Options and Forwards [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of Sales | (1) | (1) | (3) | (5) |
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Amortization of net actuarial loss | 2 | 2 | 4 | 4 |
Amortization of prior year service cost | 2 | 2 | 3 | 3 |
Earnings before income taxes | 4 | 4 | 7 | 7 |
Tax expense (benefit) | (1) | (1) | (2) | (2) |
Net of tax | 3 | $ 3 | 5 | $ 5 |
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Other Post-Retirement Benefit Plans [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Amortization of prior year service cost | (1) | (1) | ||
Earnings before income taxes | (1) | (1) | ||
Net of tax | $ (1) | $ (1) |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) | Aug. 07, 2018 | Jul. 16, 2018 | May 08, 2018 | Apr. 16, 2018 | Jan. 29, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Dec. 31, 2017 |
Shareholders' Equity [Line Items] | |||||||||
Dividend per share | $ 0.435 | $ 0.435 | |||||||
Record date | Jul. 3, 2018 | Apr. 2, 2018 | |||||||
Declared date | May 8, 2018 | Jan. 29, 2018 | |||||||
Dividends paid | $ 27,000,000 | ||||||||
Payment date | Jul. 16, 2018 | Apr. 16, 2018 | |||||||
Stock repurchased, shares | 0 | 0 | 24,853,827 | ||||||
Stock repurchased, average price | $ 39.33 | ||||||||
Stock repurchased, value | $ 977,000,000 | ||||||||
Treasury stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Maximum [Member] | |||||||||
Shareholders' Equity [Line Items] | |||||||||
Stock repurchase program authorized amount | $ 1,300,000,000 | $ 1,300,000,000 | |||||||
Subsequent Event [Member] | |||||||||
Shareholders' Equity [Line Items] | |||||||||
Dividend per share | $ 0.435 | ||||||||
Record date | Oct. 2, 2018 | ||||||||
Declared date | Aug. 7, 2018 | ||||||||
Dividends paid | $ 28,000,000 | ||||||||
Payment date | Oct. 15, 2018 |
Commitments and Contingencies -
Commitments and Contingencies - Changes in Reserve for Environmental Remediation and Asset Retirement Obligations (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |
Balance at beginning of year | $ 44 |
Environmental spending | (7) |
Reversal of provision | (1) |
Effect of foreign currency exchange rate change | (1) |
Balance at end of period | $ 35 |
Commitments and Contingencies56
Commitments and Contingencies - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Pension Plans [Member] | |
Commitments And Contingencies [Line Items] | |
Provision for liability | $ 0 |
Indemnification Guarantee [Member] | |
Commitments And Contingencies [Line Items] | |
Provision for liability | $ 0 |
Segment Disclosures - Additiona
Segment Disclosures - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2018Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Number of operating segments | 2 |
Segment Disclosures - Analysis
Segment Disclosures - Analysis and Reconciliation of Reportable Segment Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 1,353 | $ 1,221 | $ 2,698 | $ 2,523 |
Depreciation and amortization | 79 | 79 | 158 | 159 |
Consolidated operating income (loss) | 62 | 62 | 139 | 100 |
Interest expense, net | 16 | 17 | 32 | 34 |
Non-service components of net periodic benefit cost | (5) | (2) | (9) | (6) |
Earnings before income taxes | 51 | 47 | 116 | 72 |
Income tax expense (NOTE 7) | 8 | 9 | 19 | 14 |
Net earnings | 43 | 38 | 97 | 58 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,370 | 1,237 | 2,732 | 2,557 |
Operating Segments [Member] | Communication Paper [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 634 | 578 | 1,265 | 1,201 |
Operating Segments [Member] | Specialty and Packaging Paper [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 181 | 156 | 355 | 319 |
Operating Segments [Member] | Market Pulp [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 291 | 249 | 569 | 518 |
Operating Segments [Member] | Absorbent Hygiene Products [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 247 | 238 | 509 | 485 |
Operating Segments [Member] | Pulp and Paper [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,123 | 999 | 2,223 | 2,072 |
Depreciation and amortization | 61 | 63 | 122 | 127 |
Consolidated operating income (loss) | 79 | 62 | 155 | 92 |
Operating Segments [Member] | Personal Care [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 247 | 238 | 509 | 485 |
Depreciation and amortization | 18 | 16 | 36 | 32 |
Consolidated operating income (loss) | 2 | 13 | 10 | 29 |
Intersegment Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | (17) | (16) | (34) | (34) |
Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated operating income (loss) | $ (19) | $ (13) | $ (26) | $ (21) |
Segment Disclosures - Analysi59
Segment Disclosures - Analysis and Reconciliation of Reportable Segment Information (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 1,353 | $ 1,221 | $ 2,698 | $ 2,523 |
Consolidated operating income (loss) | 62 | 62 | 139 | 100 |
Scenario Previously Reported [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,224 | 2,528 | ||
Consolidated operating income (loss) | 64 | 106 | ||
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,370 | 1,237 | 2,732 | 2,557 |
Operating Segments [Member] | Pulp and Paper [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,123 | 999 | 2,223 | 2,072 |
Consolidated operating income (loss) | 79 | 62 | 155 | 92 |
Operating Segments [Member] | Pulp and Paper [Member] | Scenario Previously Reported [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 999 | 2,072 | ||
Consolidated operating income (loss) | 65 | 99 | ||
Operating Segments [Member] | Personal Care [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 247 | 238 | 509 | 485 |
Consolidated operating income (loss) | 2 | 13 | 10 | 29 |
Operating Segments [Member] | Personal Care [Member] | Scenario Previously Reported [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 241 | 490 | ||
Consolidated operating income (loss) | 13 | 29 | ||
Intersegment Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | (17) | (16) | (34) | (34) |
Intersegment Sales [Member] | Scenario Previously Reported [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | (16) | (34) | ||
Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated operating income (loss) | $ (19) | (13) | $ (26) | (21) |
Corporate [Member] | Scenario Previously Reported [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated operating income (loss) | $ (14) | $ (22) |
Supplemental Guarantor Financ60
Supplemental Guarantor Financial Information - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2018 | |
Guarantor Subsidiaries [Member] | |
Condensed Financial Statements Captions [Line Items] | |
Ownership percentage | 100.00% |
Non-Guarantor Subsidiaries [Member] | |
Condensed Financial Statements Captions [Line Items] | |
Ownership percentage | 100.00% |
Supplemental Guarantor Financ61
Supplemental Guarantor Financial Information - Condensed Consolidating Statement of Earnings and Comprehensive (Loss) Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Condensed Income Statements Captions [Line Items] | |||||
Sales | $ 1,353 | $ 1,221 | $ 2,698 | $ 2,523 | |
Operating expenses | |||||
Cost of sales, excluding depreciation and amortization | 1,096 | 971 | 2,180 | 2,050 | |
Depreciation and amortization | 79 | 79 | 158 | 159 | |
Selling, general and administrative | 118 | 107 | 228 | 213 | |
Other operating (income) loss, net | (2) | 2 | (7) | 1 | |
Operating expenses | 1,291 | 1,159 | 2,559 | 2,423 | |
Operating income | 62 | 62 | 139 | 100 | |
Interest expense (income), net | 16 | 17 | 32 | 34 | |
Non-service components of net periodic benefit cost | (5) | (2) | (9) | (6) | |
(Loss) earnings before income taxes | 51 | 47 | 116 | 72 | |
Income tax expense (benefit) | 8 | 9 | 19 | 14 | |
Net earnings | 43 | 38 | 97 | 58 | |
Other comprehensive (loss) income | (55) | 71 | (75) | 85 | $ 163 |
Comprehensive (loss) income | (12) | 109 | 22 | 143 | |
Parent [Member] | |||||
Operating expenses | |||||
Selling, general and administrative | 3 | 2 | 7 | 4 | |
Operating expenses | 3 | 2 | 7 | 4 | |
Operating income | (3) | (2) | (7) | (4) | |
Interest expense (income), net | 16 | 16 | 32 | 33 | |
(Loss) earnings before income taxes | (19) | (18) | (39) | (37) | |
Income tax expense (benefit) | (4) | (5) | (8) | (9) | |
Share in earnings of equity accounted investees | 58 | 51 | 128 | 86 | |
Net earnings | 43 | 38 | 97 | 58 | |
Other comprehensive (loss) income | (55) | 71 | (75) | 85 | |
Comprehensive (loss) income | (12) | 109 | 22 | 143 | |
Guarantor Subsidiaries [Member] | |||||
Condensed Income Statements Captions [Line Items] | |||||
Sales | 1,089 | 1,011 | 2,172 | 2,097 | |
Operating expenses | |||||
Cost of sales, excluding depreciation and amortization | 943 | 878 | 1,886 | 1,848 | |
Depreciation and amortization | 55 | 58 | 111 | 117 | |
Selling, general and administrative | 23 | 31 | 68 | 64 | |
Other operating (income) loss, net | 1 | (1) | (2) | ||
Operating expenses | 1,022 | 967 | 2,064 | 2,027 | |
Operating income | 67 | 44 | 108 | 70 | |
Interest expense (income), net | 23 | 22 | 45 | 42 | |
Non-service components of net periodic benefit cost | (1) | ||||
(Loss) earnings before income taxes | 45 | 22 | 63 | 28 | |
Income tax expense (benefit) | 8 | 3 | 12 | 5 | |
Share in earnings of equity accounted investees | 21 | 32 | 77 | 63 | |
Net earnings | 58 | 51 | 128 | 86 | |
Other comprehensive (loss) income | (57) | 76 | (75) | 94 | |
Comprehensive (loss) income | 1 | 127 | 53 | 180 | |
Non-Guarantor Subsidiaries [Member] | |||||
Condensed Income Statements Captions [Line Items] | |||||
Sales | 564 | 496 | 1,112 | 1,010 | |
Operating expenses | |||||
Cost of sales, excluding depreciation and amortization | 453 | 379 | 880 | 786 | |
Depreciation and amortization | 24 | 21 | 47 | 42 | |
Selling, general and administrative | 92 | 74 | 153 | 145 | |
Other operating (income) loss, net | (3) | 2 | (6) | 3 | |
Operating expenses | 566 | 476 | 1,074 | 976 | |
Operating income | (2) | 20 | 38 | 34 | |
Interest expense (income), net | (23) | (21) | (45) | (41) | |
Non-service components of net periodic benefit cost | (4) | (2) | (9) | (6) | |
(Loss) earnings before income taxes | 25 | 43 | 92 | 81 | |
Income tax expense (benefit) | 4 | 11 | 15 | 18 | |
Net earnings | 21 | 32 | 77 | 63 | |
Other comprehensive (loss) income | (50) | 69 | (60) | 85 | |
Comprehensive (loss) income | (29) | 101 | 17 | 148 | |
Consolidating Adjustments [Member] | |||||
Condensed Income Statements Captions [Line Items] | |||||
Sales | (300) | (286) | (586) | (584) | |
Operating expenses | |||||
Cost of sales, excluding depreciation and amortization | (300) | (286) | (586) | (584) | |
Operating expenses | (300) | (286) | (586) | (584) | |
Share in earnings of equity accounted investees | (79) | (83) | (205) | (149) | |
Net earnings | (79) | (83) | (205) | (149) | |
Other comprehensive (loss) income | 107 | (145) | 135 | (179) | |
Comprehensive (loss) income | $ 28 | $ (228) | $ (70) | $ (328) |
Supplemental Guarantor Financ62
Supplemental Guarantor Financial Information - Condensed Consolidating Balance Sheet (Detail) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets | ||||
Cash and cash equivalents | $ 264 | $ 139 | $ 124 | $ 125 |
Receivables | 667 | 704 | ||
Inventories | 756 | 757 | ||
Prepaid expenses | 35 | 33 | ||
Income and other taxes receivable | 21 | 24 | ||
Total current assets | 1,743 | 1,657 | ||
Property, plant and equipment, net | 2,629 | 2,765 | ||
Intangible assets, net | 614 | 633 | ||
Other assets | 159 | 157 | ||
Total assets | 5,145 | 5,212 | ||
Current liabilities | ||||
Bank indebtedness | 1 | |||
Trade and other payables | 722 | 716 | ||
Income and other taxes payable | 29 | 24 | ||
Long-term debt due within one year | 1 | 1 | ||
Total current liabilities | 753 | 741 | ||
Long-term debt | 1,103 | 1,129 | ||
Deferred income taxes and other | 475 | 491 | ||
Other liabilities and deferred credits | 356 | 368 | ||
Shareholders' equity | 2,458 | 2,483 | ||
Total liabilities and shareholders' equity | 5,145 | 5,212 | ||
Parent [Member] | ||||
Current assets | ||||
Cash and cash equivalents | 141 | 3 | 1 | 17 |
Prepaid expenses | 13 | 5 | ||
Income and other taxes receivable | 31 | 7 | ||
Intercompany accounts | 353 | 380 | ||
Total current assets | 538 | 395 | ||
Investments in affiliates | 3,946 | 3,892 | ||
Intercompany long-term advances | 6 | 6 | ||
Other assets | 21 | 22 | ||
Total assets | 4,511 | 4,315 | ||
Current liabilities | ||||
Trade and other payables | 55 | 55 | ||
Intercompany accounts | 401 | 244 | ||
Income and other taxes payable | 2 | 1 | ||
Total current liabilities | 458 | 300 | ||
Long-term debt | 793 | 792 | ||
Intercompany long-term loans | 742 | 674 | ||
Other liabilities and deferred credits | 60 | 66 | ||
Shareholders' equity | 2,458 | 2,483 | ||
Total liabilities and shareholders' equity | 4,511 | 4,315 | ||
Guarantor Subsidiaries [Member] | ||||
Current assets | ||||
Cash and cash equivalents | 35 | 14 | 8 | 14 |
Receivables | 399 | 402 | ||
Inventories | 521 | 522 | ||
Prepaid expenses | 14 | 22 | ||
Income and other taxes receivable | 2 | 1 | ||
Intercompany accounts | 481 | 314 | ||
Total current assets | 1,452 | 1,275 | ||
Property, plant and equipment, net | 1,796 | 1,870 | ||
Intangible assets, net | 262 | 268 | ||
Investments in affiliates | 2,602 | 2,609 | ||
Intercompany long-term advances | 81 | 81 | ||
Other assets | 23 | 24 | ||
Total assets | 6,216 | 6,127 | ||
Current liabilities | ||||
Bank indebtedness | 1 | |||
Trade and other payables | 418 | 424 | ||
Intercompany accounts | 65 | 63 | ||
Income and other taxes payable | 36 | 14 | ||
Total current liabilities | 520 | 501 | ||
Long-term debt | 299 | 300 | ||
Intercompany long-term loans | 948 | 925 | ||
Deferred income taxes and other | 344 | 356 | ||
Other liabilities and deferred credits | 159 | 153 | ||
Shareholders' equity | 3,946 | 3,892 | ||
Total liabilities and shareholders' equity | 6,216 | 6,127 | ||
Non-Guarantor Subsidiaries [Member] | ||||
Current assets | ||||
Cash and cash equivalents | 88 | 122 | $ 115 | $ 94 |
Receivables | 268 | 302 | ||
Inventories | 235 | 235 | ||
Prepaid expenses | 8 | 6 | ||
Income and other taxes receivable | 15 | 16 | ||
Intercompany accounts | 44 | 45 | ||
Total current assets | 658 | 726 | ||
Property, plant and equipment, net | 833 | 895 | ||
Intangible assets, net | 352 | 365 | ||
Intercompany long-term advances | 1,604 | 1,513 | ||
Other assets | 133 | 129 | ||
Total assets | 3,580 | 3,628 | ||
Current liabilities | ||||
Trade and other payables | 249 | 237 | ||
Intercompany accounts | 412 | 432 | ||
Income and other taxes payable | 18 | 9 | ||
Long-term debt due within one year | 1 | 1 | ||
Total current liabilities | 680 | 679 | ||
Long-term debt | 11 | 37 | ||
Intercompany long-term loans | 1 | 1 | ||
Deferred income taxes and other | 149 | 153 | ||
Other liabilities and deferred credits | 137 | 149 | ||
Shareholders' equity | 2,602 | 2,609 | ||
Total liabilities and shareholders' equity | 3,580 | 3,628 | ||
Consolidating Adjustments [Member] | ||||
Current assets | ||||
Income and other taxes receivable | (27) | |||
Intercompany accounts | (878) | (739) | ||
Total current assets | (905) | (739) | ||
Investments in affiliates | (6,548) | (6,501) | ||
Intercompany long-term advances | (1,691) | (1,600) | ||
Other assets | (18) | (18) | ||
Total assets | (9,162) | (8,858) | ||
Current liabilities | ||||
Intercompany accounts | (878) | (739) | ||
Income and other taxes payable | (27) | |||
Total current liabilities | (905) | (739) | ||
Intercompany long-term loans | (1,691) | (1,600) | ||
Deferred income taxes and other | (18) | (18) | ||
Shareholders' equity | (6,548) | (6,501) | ||
Total liabilities and shareholders' equity | $ (9,162) | $ (8,858) |
Supplemental Guarantor Financ63
Supplemental Guarantor Financial Information - Condensed Consolidating Statement of Cash Flows (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Operating activities | ||||
Net earnings | $ 43 | $ 38 | $ 97 | $ 58 |
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | 170 | 154 | ||
Cash flows from operating activities | 267 | 212 | ||
Investing activities | ||||
Additions to property, plant and equipment | (62) | (71) | ||
Proceeds from disposals of property, plant and equipment | 4 | |||
Other | (6) | |||
Cash flows used for investing activities | (64) | (71) | ||
Financing activities | ||||
Dividend payments | (53) | (52) | ||
Net change in bank indebtedness | (12) | |||
Change in revolving credit facility | (30) | |||
Proceeds from receivables securitization facility | 25 | |||
Repayments of receivables securitization facility | (25) | (15) | ||
Repayments of long-term debt | (63) | |||
Other | 2 | (1) | ||
Cash flows used for financing activities | (76) | (148) | ||
Net increase (decrease) in cash and cash equivalents | 127 | (7) | ||
Impact of foreign exchange on cash | (2) | 6 | ||
Cash and cash equivalents at beginning of period | 139 | 125 | ||
Cash and cash equivalents at end of period | 264 | 124 | 264 | 124 |
Parent [Member] | ||||
Operating activities | ||||
Net earnings | 43 | 38 | 97 | 58 |
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | 34 | 77 | ||
Cash flows from operating activities | 131 | 135 | ||
Financing activities | ||||
Dividend payments | (53) | (52) | ||
Change in revolving credit facility | (30) | |||
Repayments of long-term debt | (63) | |||
Increase in long-term advances to related parties | (5) | |||
Decrease in long-term advances to related parties | 58 | |||
Other | 2 | (1) | ||
Cash flows used for financing activities | 7 | (151) | ||
Net increase (decrease) in cash and cash equivalents | 138 | (16) | ||
Cash and cash equivalents at beginning of period | 3 | 17 | ||
Cash and cash equivalents at end of period | 141 | 1 | 141 | 1 |
Guarantor Subsidiaries [Member] | ||||
Operating activities | ||||
Net earnings | 58 | 51 | 128 | 86 |
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | (104) | (107) | ||
Cash flows from operating activities | 24 | (21) | ||
Investing activities | ||||
Additions to property, plant and equipment | (33) | (39) | ||
Other | (2) | |||
Cash flows used for investing activities | (35) | (39) | ||
Financing activities | ||||
Net change in bank indebtedness | (12) | |||
Decrease in long-term advances to related parties | 32 | 66 | ||
Cash flows used for financing activities | 32 | 54 | ||
Net increase (decrease) in cash and cash equivalents | 21 | (6) | ||
Cash and cash equivalents at beginning of period | 14 | 14 | ||
Cash and cash equivalents at end of period | 35 | 8 | 35 | 8 |
Non-Guarantor Subsidiaries [Member] | ||||
Operating activities | ||||
Net earnings | 21 | 32 | 77 | 63 |
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | 35 | 35 | ||
Cash flows from operating activities | 112 | 98 | ||
Investing activities | ||||
Additions to property, plant and equipment | (29) | (32) | ||
Proceeds from disposals of property, plant and equipment | 4 | |||
Other | (4) | |||
Cash flows used for investing activities | (29) | (32) | ||
Financing activities | ||||
Proceeds from receivables securitization facility | 25 | |||
Repayments of receivables securitization facility | (25) | (15) | ||
Increase in long-term advances to related parties | (90) | (61) | ||
Cash flows used for financing activities | (115) | (51) | ||
Net increase (decrease) in cash and cash equivalents | (32) | 15 | ||
Impact of foreign exchange on cash | (2) | 6 | ||
Cash and cash equivalents at beginning of period | 122 | 94 | ||
Cash and cash equivalents at end of period | 88 | 115 | 88 | 115 |
Consolidating Adjustments [Member] | ||||
Operating activities | ||||
Net earnings | $ (79) | $ (83) | (205) | (149) |
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | 205 | 149 | ||
Financing activities | ||||
Increase in long-term advances to related parties | 90 | 66 | ||
Decrease in long-term advances to related parties | $ (90) | $ (66) |