Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | UFS | |
Entity Registrant Name | DOMTAR CORP | |
Entity Central Index Key | 0001381531 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 57,273,106 | |
Entity File Number | 001-33164 | |
Entity Tax Identification Number | 20-5901152 | |
Entity Address, Address Line One | 234 Kingsley Park Drive | |
Entity Address, City or Town | Fort Mill | |
Entity Address, State or Province | SC | |
Entity Address, Postal Zip Code | 29715 | |
City Area Code | 803 | |
Local Phone Number | 802-7500 | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Title of 12(b) Security | Common Stock, Par Value $0.01 Per Share | |
Security Exchange Name | NYSE |
Consolidated Statements of Earn
Consolidated Statements of Earnings and Comprehensive Income (Loss) (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Sales | $ 1,283 | $ 1,367 | $ 3,976 | $ 4,065 |
Operating expenses | ||||
Cost of sales, excluding depreciation and amortization | 1,041 | 1,059 | 3,172 | 3,239 |
Depreciation and amortization | 72 | 75 | 219 | 233 |
Selling, general and administrative | 94 | 115 | 322 | 343 |
Impairment of long-lived assets (NOTE 11) | 33 | 58 | ||
Closure and restructuring costs (NOTE 11) | 11 | 23 | ||
Other operating loss (income), net (NOTE 6) | 3 | 4 | 4 | (3) |
Operating expenses | 1,254 | 1,253 | 3,798 | 3,812 |
Operating income | 29 | 114 | 178 | 253 |
Interest expense, net | 12 | 15 | 38 | 47 |
Non-service components of net periodic benefit cost (NOTE 5) | (2) | (4) | (7) | (13) |
Earnings before income taxes and equity loss | 19 | 103 | 147 | 219 |
Income tax (benefit) expense (NOTE 7) | (1) | 3 | 28 | 22 |
Equity loss, net of taxes | 1 | 1 | 1 | |
Net earnings | $ 20 | $ 99 | $ 118 | $ 196 |
Per common share (in dollars) (NOTE 4) | ||||
Basic | $ 0.33 | $ 1.57 | $ 1.89 | $ 3.12 |
Diluted | $ 0.32 | $ 1.57 | $ 1.88 | $ 3.11 |
Weighted average number of common shares outstanding (millions) | ||||
Basic | 61.5 | 62.9 | 62.5 | 62.8 |
Diluted | 61.7 | 63.2 | 62.7 | 63.1 |
Cash dividends per common share | $ 0.46 | $ 0.44 | $ 1.33 | $ 1.29 |
Net earnings | $ 20 | $ 99 | $ 118 | $ 196 |
Net derivative (losses) gains on cash flow hedges: | ||||
Net (losses) gains arising during the period, net of tax of $4 and $(1), respectively (2018 – $(2) and $3, respectively) | (9) | 7 | 5 | (9) |
Less: Reclassification adjustment for losses (gains) included in net earnings, net of tax of $(1) and $(2), respectively (2018 – $(1) and nil, respectively) | 3 | 5 | (2) | |
Foreign currency translation adjustments | (34) | 12 | (12) | (49) |
Change in unrecognized gains and prior service cost related to pension and post-retirement benefit plans, net of tax of $(1) and $(3), respectively (2018 – nil and $(2), respectively) | 2 | 2 | 7 | 6 |
Other comprehensive (loss) income | (38) | 21 | 5 | (54) |
Comprehensive (loss) income | $ (18) | $ 120 | $ 123 | $ 142 |
Consolidated Statements of Ea_2
Consolidated Statements of Earnings and Comprehensive Income (Loss) (Parenthetical) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Net gains (losses) arising during the period, net of tax | $ 4 | $ (2) | $ (1) | $ 3 |
Reclassification adjustment for losses (gains) included in net earnings (loss), net of tax | (1) | (1) | (2) | 0 |
Change in unrecognized gains and prior service cost related to pension and post-retirement benefit plans, tax | $ (1) | $ 0 | $ (3) | $ (2) |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 98 | $ 111 |
Receivables, less allowances of $8 and $6 | 618 | 670 |
Inventories (NOTE 8) | 798 | 762 |
Prepaid expenses | 33 | 24 |
Income and other taxes receivable | 53 | 22 |
Total current assets | 1,600 | 1,589 |
Property, plant and equipment, net | 2,499 | 2,605 |
Operating lease right-of-use assets (NOTE 9) | 77 | |
Intangible assets, net (NOTE 10) | 568 | 597 |
Other assets | 140 | 134 |
Total assets | 4,884 | 4,925 |
Current liabilities | ||
Bank indebtedness | 1 | |
Trade and other payables | 646 | 757 |
Income and other taxes payable | 28 | 25 |
Operating lease liabilities due within one year (NOTE 9) | 26 | |
Long-term debt due within one year | 1 | 1 |
Total current liabilities | 702 | 783 |
Long-term debt | 938 | 853 |
Operating lease liabilities (NOTE 9) | 68 | |
Deferred income taxes and other | 479 | 476 |
Other liabilities and deferred credits | 258 | 275 |
Commitments and contingencies (NOTE 14) | ||
Shareholders' equity (NOTE 13) | ||
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 | 1,842 | 1,981 |
Retained earnings | 1,058 | 1,023 |
Accumulated other comprehensive loss | (462) | (467) |
Total shareholders' equity | 2,439 | 2,538 |
Total liabilities and shareholders' equity | $ 4,884 | $ 4,925 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Receivables, allowances | $ 8 | $ 6 |
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 | 5,977,255 | 2,086,535 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ 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 | 62,700,000 | ||||
Stock-based compensation, net of tax | 10 | 10 | |||
Stock-based compensation, net of tax, Shares | 200,000 | ||||
Net earnings | 196 | 196 | |||
Net derivative gains (losses) on cash flow hedges: | |||||
Net gains (losses) arising during the period, net of tax | (9) | (9) | |||
Less: Reclassification adjustments for losses (gains) included in net earnings (loss), net of tax | (2) | (2) | |||
Foreign currency translation adjustments | (49) | (49) | |||
Change in unrecognized gains (losses) and prior service cost related to pension and post-retirement benefit plans, net of tax | $ 6 | 6 | |||
Stock repurchase, shares | 0 | ||||
Cash dividends declared | $ (82) | (82) | |||
Balance at Sep. 30, 2018 | 2,553 | $ 1 | 1,979 | 963 | (390) |
Balance, Shares at Sep. 30, 2018 | 62,900,000 | ||||
Balance at Jun. 30, 2018 | 2,458 | $ 1 | 1,977 | 891 | (411) |
Balance, Shares at Jun. 30, 2018 | 62,900,000 | ||||
Stock-based compensation, net of tax | 2 | 2 | |||
Net earnings | 99 | 99 | |||
Net derivative gains (losses) on cash flow hedges: | |||||
Net gains (losses) arising during the period, net of tax | 7 | 7 | |||
Foreign currency translation adjustments | 12 | 12 | |||
Change in unrecognized gains (losses) and prior service cost related to pension and post-retirement benefit plans, net of tax | 2 | 2 | |||
Cash dividends declared | (27) | (27) | |||
Balance at Sep. 30, 2018 | 2,553 | $ 1 | 1,979 | 963 | (390) |
Balance, Shares at Sep. 30, 2018 | 62,900,000 | ||||
Balance at Dec. 31, 2018 | 2,538 | $ 1 | 1,981 | 1,023 | (467) |
Balance, Shares at Dec. 31, 2018 | 62,900,000 | ||||
Stock-based compensation, net of tax | 6 | 6 | |||
Stock-based compensation, net of tax, Shares | 200,000 | ||||
Net earnings | 118 | 118 | |||
Net derivative gains (losses) on cash flow hedges: | |||||
Net gains (losses) arising during the period, net of tax | 5 | 5 | |||
Less: Reclassification adjustments for losses (gains) included in net earnings (loss), net of tax | 5 | 5 | |||
Foreign currency translation adjustments | (12) | (12) | |||
Change in unrecognized gains (losses) and prior service cost related to pension and post-retirement benefit plans, net of tax | 7 | 7 | |||
Stock repurchase | $ (145) | (145) | |||
Stock repurchase, shares | (4,076,723) | (4,100,000) | |||
Cash dividends declared | $ (83) | (83) | |||
Balance at Sep. 30, 2019 | 2,439 | $ 1 | 1,842 | 1,058 | (462) |
Balance, Shares at Sep. 30, 2019 | 59,000,000 | ||||
Balance at Jun. 30, 2019 | 2,619 | $ 1 | 1,977 | 1,065 | (424) |
Balance, Shares at Jun. 30, 2019 | 62,900,000 | ||||
Stock-based compensation, net of tax | 2 | 2 | |||
Net earnings | 20 | 20 | |||
Net derivative gains (losses) on cash flow hedges: | |||||
Net gains (losses) arising during the period, net of tax | (9) | (9) | |||
Less: Reclassification adjustments for losses (gains) included in net earnings (loss), net of tax | 3 | 3 | |||
Foreign currency translation adjustments | (34) | (34) | |||
Change in unrecognized gains (losses) and prior service cost related to pension and post-retirement benefit plans, net of tax | 2 | 2 | |||
Stock repurchase | (137) | (137) | |||
Stock repurchase, shares | (3,900,000) | ||||
Cash dividends declared | (27) | (27) | |||
Balance at Sep. 30, 2019 | $ 2,439 | $ 1 | $ 1,842 | $ 1,058 | $ (462) |
Balance, Shares at Sep. 30, 2019 | 59,000,000 |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement Of Stockholders Equity [Abstract] | ||||
Net (losses) gains arising during the period, tax | $ 4 | $ (2) | $ (1) | $ 3 |
Reclassification adjustment for (gains) losses included in net earnings (loss), net, tax | (1) | (1) | (2) | 0 |
Change in unrecognized (losses) gains and prior service cost related to pension and post-retirement benefit plans, tax | $ (1) | $ 0 | $ (3) | $ (2) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities | ||
Net earnings | $ 118 | $ 196 |
Adjustments to reconcile net earnings to cash flows from operating activities | ||
Depreciation and amortization | 219 | 233 |
Deferred income taxes and tax uncertainties | 1 | 3 |
Impairment of long-lived assets | 58 | |
Net gains on disposals of property, plant and equipment | (4) | |
Stock-based compensation expense | 7 | 7 |
Equity loss, net of taxes | 1 | 1 |
Changes in assets and liabilities | ||
Receivables | 50 | (7) |
Inventories | (34) | (23) |
Prepaid expenses | (4) | (4) |
Trade and other payables | (111) | (6) |
Income and other taxes | (27) | (16) |
Difference between employer pension and other post-retirement contributions and pension and other post-retirement expense | (3) | (46) |
Other assets and other liabilities | 7 | 3 |
Cash flows from operating activities | 282 | 337 |
Investing activities | ||
Additions to property, plant and equipment | (157) | (111) |
Proceeds from disposals of property, plant and equipment | 1 | 4 |
Other | (6) | |
Cash flows used for investing activities | (156) | (113) |
Financing activities | ||
Dividend payments | (83) | (81) |
Stock repurchase | (139) | |
Net change in bank indebtedness | 2 | |
Change in revolving credit facility | 45 | |
Proceeds from receivables securitization facility | 150 | |
Repayments of receivables securitization facility | (110) | (25) |
Repayments of long-term debt | (1) | |
Other | (1) | 1 |
Cash flows used for financing activities | (137) | (105) |
Net (decrease) increase in cash and cash equivalents | (11) | 119 |
Impact of foreign exchange on cash | (2) | (2) |
Cash and cash equivalents at beginning of period | 111 | 139 |
Cash and cash equivalents at end of period | 98 | 256 |
Supplemental cash flow information | ||
Interest | 39 | 48 |
Income taxes | $ 55 | $ 40 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
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 nine months of the year may not necessarily be indicative of full-year results. These consolidated financial statements should 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, 2018, as filed with the Securities and Exchange Commission. The December 31, 2018 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. On January 1, 2019, upon the adoption of ASU 2016-02, “ Leases LEASES At inception of an arrangement, the Company determines whether the arrangement contains a lease. A lease conveys the right to control the use of identified property, plant, or equipment (asset) for a period of time in exchange for consideration. Control over the use of the identified asset means that the Company has both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. For each lease arrangement that has an original lease term of more than 12 months, a right-of-use asset and a lease liability are recorded in the Consolidated Balance Sheets. The right-of-use asset represents the Company’s right to use an underlying asset for the lease term while the lease liability represents the obligation to make lease payments arising from the lease. The right-of-use asset and the lease liability are initially recorded at the same amount at the lease commencement date based on the present value of the remaining lease payments discounted using the rate implicit in the lease when readily determined or, in most cases, the Company’s incremental borrowing rate. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The right-of-use asset is tested for impairment in accordance with ASC 360 – “ Property, Plant and Equipment The terms of a lease arrangement determine how a lease is classified (operating or finance), the resulting recognition pattern in the Consolidated Statements of Earnings and Comprehensive Income (Loss) and the classification in the Consolidated Balance Sheets. Finance lease expense is represented by the interest on the lease liability determined using the effective interest method and the amortization of the finance lease right-of-use asset calculated using the straight-line method over the estimated useful life of the identified asset. Finance lease related balances are included in the Consolidated Balance Sheets in Property, plant and equipment, net, Long-term debt due within one year and Long-term debt. Operating lease expense is recorded on a straight-line basis over the lease term by adding interest expense determined using the effective interest method to the amortization of the right-of-use asset. Operating lease related balances are included in the Consolidated Balance Sheets in Operating lease right-of-use assets, Operating lease liabilities due within one year and Operating lease liabilities. Operating lease right-of-use assets are reduced by previously recognized liabilities relating to unfavorable terms of leases acquired as part of a business combination and impairments. For operating lease arrangements with lease and non-lease components, the Company accounts for the lease and non-lease components as a single lease component. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | NOTE 2. _________________ RECENT ACCOUNTING PRONOUNCEMENTS ACCOUNTING CHANGES IMPLEMENTED LEASES In February 2016, the FASB issued ASU 2016-02, “ Leases The Company elected to initially apply the new leases standard as of January 1, 2019 with certain available practical expedients which are discussed below. No cumulative-effect adjustments on retained earnings were necessary as of January 1, 2019. The most significant impact of adopting the new standard was the recognition of right-of-use assets and lease liabilities for operating leases. The accounting for finance leases remains substantially unchanged. In transitioning to the new standard, the Company elected to use the practical expedient package. Accordingly, the Company did not reassess the following: • Whether existing or expired contracts are, or contained, a lease (including executory contracts). • The lease classification of existing or expired leases previously made by management. • Whether initial direct costs for existing leases would qualify under the new standard. Furthermore, the Company elected to use the hindsight practical expedient in determining the lease term and assessing impairment of the right-of-use assets. For all comparative periods prior to the adoption of the new leases standard, the Company will continue to report operating leases in the consolidated financial statements under ASC 840 “ Leases COMPREHENSIVE INCOME In February 2018, the FASB issued ASU 2018-02, “ Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income This guidance became effective for the Company on January 1, 2019. The Company has decided not to elect this option, as permitted in the new guidance. FUTURE ACCOUNTING CHANGES IMPLEMENTATION COSTS FOR CLOUD COMPUTING ARRANGEMENTS In August 2018, the FASB issued ASU 2018-15, “ Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract • Capitalized implementation costs should be presented in the same line item on the balance sheet as amounts prepaid for the hosted CCA service, if any (generally as an “other asset”). • The amortization of capitalized implementation costs should be presented in the same statement of earnings line item as the fees associated with the hosted CCA service. Accordingly, the amortization of capitalized implementation costs should not be included with depreciation or amortization expense related to property, plant, and equipment or intangible assets. • Cash flows related to capitalized implementation costs should be presented as operating activities, consistent with the presentation of cash flows for the fees related to the hosted CCA service. • Entities are required to disclose the nature of the hosting arrangements that are service contracts and significant judgments made when applying the guidance. Additionally, companies are required to provide quantitative disclosures, including amounts capitalized, amortized, and impaired. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. The amendments in this ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. While the Company is still evaluating the impact of adopting the new standard, it does not expect this new guidance to have a material impact on the consolidated financial statements. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities and Fair Value Measurement | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities and Fair Value Measurement | 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 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 September 30, 2019, two of Domtar’s Pulp and Paper segment customers located in the U.S. represented 14% or $87 million, and 11% or $70 million, respectively, of the Company’s receivables (December 31, 2018 – one Pulp and Paper segment customer located in the U.S. represented 10% or $67 million). 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 51 months. The following table presents the volumes under derivative financial instruments for natural gas contracts outstanding as of September 30, 2019 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 2019 (1) 3,915,000 $ 12 53% 2020 11,165,000 $ 34 40% 2021 9,270,000 $ 27 33% 2022 9,270,000 $ 25 33% 2023 4,210,000 $ 11 15% (1) Represents the remaining three months of 2019 (2) MMBtu: Millions of British thermal units The natural gas derivative contracts were effective as of September 30, 2019. 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 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. 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 September 30, 2019 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 CAD/USD Pulp and Paper 2019 (1) 174 CAD 77% 1 USD = 1.2945 1 USD = 1.3152 CAD/USD Pulp and Paper 2020 557 CAD 62% 1 USD = 1.2966 1 USD = 1.3155 CAD/USD Pulp and Paper 2021 237 CAD 26% 1 USD = 1.3185 1 USD = 1.3185 (1) Represents the remaining The foreign exchange derivative contracts were effective as of September 30, 2019. 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 September 30, 2019 and December 31, 2018, 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: September 30, 2019 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 2 — 2 — (a) Prepaid expenses Currency derivatives — — — — (a) Other assets Total Assets 2 — 2 — Liabilities derivatives Currency derivatives 8 — 8 — (a) Trade and other payables Natural gas swap contracts 7 — 7 — (a) Trade and other payables Currency derivatives 2 — 2 — (a) Other Natural gas swap contracts 7 — 7 — (a) Other liabilities and deferred credits Total Liabilities 24 — 24 — Other Instruments: Stock-based compensation - liability awards 6 6 — — Trade and other payables Stock-based compensation - liability awards 16 16 — — Other liabilities and deferred credits Long-term debt 960 — 960 — (b) Long-term debt The net cumulative loss recorded in Accumulated other comprehensive loss relating to natural gas contracts is $14 million at September 30, 2019, of which a loss of $7 million will be recognized in Cost of sales upon maturity of the derivatives over the next 12 months at the then prevailing values, which may be different from those at September 30, 2019. The net cumulative loss recorded in Accumulated other comprehensive loss relating to currency options and forwards hedging forecasted purchases is $8 million at September 30, 2019, of which a loss of $6 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 September 30, 2019. Fair Value of financial instruments at: December 31, 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 1 — 1 — (a) Prepaid expenses Natural gas swap contracts 1 — 1 — (a) Prepaid expenses Total Assets 2 — 2 — Liabilities derivatives Currency derivatives 19 — 19 — (a) Trade and other payables Natural gas swap contracts 2 — 2 — (a) Trade and other payables Currency derivatives 11 — 11 — (a) Other liabilities and deferred credits Natural gas swap contracts 5 — 5 — (a) Other liabilities and deferred credits Total Liabilities 37 — 37 — Other Instruments: Stock-based compensation - liability awards 6 6 — — Trade and other payables Stock-based compensation - liability awards 17 17 — — Other liabilities and deferred credits Long-term debt 858 — 858 — (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 September 30, 2019 and December 31, 2018. However, fair value disclosure is required. The carrying value of the Company’s long-term debt is $939 million and $854 million at September 30, 2019 and December 31, 2018, 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 | 9 Months Ended |
Sep. 30, 2019 | |
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 nine months ended September 30, September 30, September 30, September 30, 2019 2018 2019 2018 Net earnings $ 20 $ 99 $ 118 $ 196 Weighted average number of common shares outstanding (millions) 61.5 62.9 62.5 62.8 Effect of dilutive securities (millions) 0.2 0.3 0.2 0.3 Weighted average number of diluted common shares outstanding (millions) 61.7 63.2 62.7 63.1 Basic net earnings per common share (in dollars) $ 0.33 $ 1.57 $ 1.89 $ 3.12 Diluted $ 0.32 $ 1.57 $ 1.88 $ 3.11 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 nine months ended September 30, September 30, September 30, September 30, 2019 2018 2019 2018 Options to purchase common shares 398,869 201,599 325,757 201,599 |
Pension Plans and Other Post-Re
Pension Plans and Other Post-Retirement Benefit Plans | 9 Months Ended |
Sep. 30, 2019 | |
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 nine months ended September 30, 2019, the pension expense was $10 million and $33 million, respectively (2018 – $18 million and $40 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 nine months ended September 30, 2019 September 30, 2019 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 6 — 21 1 Interest expense 14 — 41 1 Expected return on plan assets (19 ) — (59 ) — Amortization of net actuarial loss (gain) 2 — 7 (1 ) Amortization of prior year service costs 1 — 4 — Net periodic benefit cost 4 — 14 1 Components of net periodic benefit cost for pension plans and other post-retirement benefit plans: For the three months ended For the nine months ended September 30, 2018 September 30, 2018 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 8 — 25 1 Interest expense 14 1 41 2 Expected return on plan assets (22 ) — (65 ) — Amortization of net actuarial loss 2 — 6 — Amortization of prior year service costs 1 — 4 (1 ) Net periodic benefit cost 3 1 11 2 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 Income (Loss) . For the three and nine months ended September 30, 2019, the Company contributed $7 million and $14 million, respectively (2018 – $48 million and $55 million, respectively) to the pension plans and $1 million and $3 million, respectively (2018 – $1 million and $3 million, respectively) to the other post-retirement benefit plans. |
Other Operating Loss (Income),
Other Operating Loss (Income), Net | 9 Months Ended |
Sep. 30, 2019 | |
Other Income And Expenses [Abstract] | |
Other Operating Loss (Income), Net | NOTE 6. _________________ OTHER OPERATING LOSS (INCOME), NET Other operating loss (income), net is an aggregate of both recurring and non-recurring loss or income items and, as a result, can fluctuate from period to period. The Company’s other operating loss (income), net includes the following: For the three months ended For the nine months ended September 30, September 30, September 30, September 30, 2019 2018 2019 2018 $ $ $ $ Gain on sale of property, plant and equipment — — — (4 ) Bad debt expense 1 — 2 1 Environmental provision 1 2 2 2 Foreign exchange loss (gain) 1 2 3 (1 ) Other — — (3 ) (1 ) Other operating loss (income), net 3 4 4 (3 ) |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 7. _________________ INCOME TAXES For the third quarter of 2019, the Company’s income tax benefit was $1 million, consisting of a current income tax benefit of $3 million and a deferred income tax expense of $2 million. This compares to an income tax expense of $3 million in the third quarter of 2018, consisting of a current income tax benefit of $5 million and a deferred income tax expense of $8 million. The Company made income tax payments, net of refunds, of $5 million during the third quarter of 2019. The effective tax rate was -5% compared with an effective tax rate of 3% in the third quarter of 2018. The effective tax rate for the third quarter of 2019 was favorably impacted by additional R&D tax credits in the U.S. and Spain. The effective tax rate for the third quarter of 2018 was favorably impacted by the income tax effects of the U.S. Tax Reform, including the benefit related to an additional pension contribution, as well as the recognition of previously unrecognized tax benefits due to the expiration of certain statutes of limitations. The effective tax rates for both the third quarter of 2019 and the third quarter of 2018 were favorably impacted by the finalization of certain estimates in connection with the filing of the Company’s 2018 and 2017 income tax returns, respectively. The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate and then making adjustments for discrete items arising in that quarter. In each interim quarter the Company updates its estimate of the annual effective tax rate and, if the estimated annual tax rate changes, makes a cumulative adjustment in that quarter. The effective tax rate for the third quarter of 2019 was favorably impacted by such an adjustment. For the first nine months of 2019, the Company’s income tax expense was $28 million, consisting of a current income tax expense of $27 million and a deferred income tax expense of $1 million. This compares to an income tax expense of $22 million in the first nine months of 2018, consisting of a current income tax expense of $19 million and a deferred income tax expense of $3 million. The Company made income tax payments, net of refunds, of $55 million during the first nine months of 2019. The effective tax rate was 19% compared to an effective tax rate of 10% in the first nine months of 2018. The effective tax rate for the first nine months of 2019 was favorably impacted by the recognition of additional R&D credits in the U.S. and Spain and by an enacted law change in the state of Arkansas, which were mostly offset by the recording of a valuation allowance against certain state tax credit carryforwards. The effective tax rate for the first nine months of 2018 was favorably impacted by the income tax effects of the U.S. Tax Reform, including the benefit related to an additional pension contribution, the recognition of previously unrecognized tax benefits due to the expiration of certain statutes of limitations, as well as by enacted law changes in Sweden and several U.S. states. The effective tax rates for both the first nine months of 2019 and the first nine months of 2018 were favorably impacted by the finalization of certain estimates in connection with the filing of the Company’s 2018 and 2017 income tax returns, respectively. During the second quarter of 2019, the Internal Revenue Service (the “IRS”) proposed additional Global Intangible Low-Taxed Income (“GILTI”) regulations, which are still pending approval. While the Company is still evaluating the impact, it does not expect those proposed regulations to have a material impact on the consolidated financial statements. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 8. _________________ INVENTORIES The following table presents the components of inventories: September 30, December 31, 2019 2018 $ $ Work in process and finished goods 423 410 Raw materials 143 126 Operating and maintenance supplies 232 226 798 762 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | NOTE 9. _________________ LEASES In the normal course of business, the Company enters into operating and finance leases mainly for manufacturing and warehousing facilities, corporate offices, motor vehicles, mobile equipment and manufacturing equipment. While the Company’s lease payments are generally fixed over the lease term, some leases may include price escalation terms that are fixed at the lease commencement date. The Company has remaining lease terms ranging from 1 year to 14 years, some of which may include options to extend the leases for up to 10 years, and some of which may include options to terminate the leases within 1 year. During the second quarter of 2019 , the Company recorded $9 million of impairment of operating lease right-of-use assets under Impairment of long-lived assets on the Consolidated Statement of Earnings and Comprehensive Income (Loss). The components of lease expense were as follows: For the three months ended For the nine months ended September 30, September 30, 2019 2019 $ $ Operating lease expense 8 22 Finance lease expense: Amortization of right-of-use assets 1 1 Interest on lease liabilities — — Total finance lease expense 1 1 For the three and nine months ended September 30, 2018, total operating lease expense amounted to $8 million and $22 million, respectively. Supplemental cash flow information related to leases was as follows: For the nine months ended September 30, 2019 $ Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 23 Operating cash flows from finance leases 1 Financing cash flows from finance leases 1 Right-of-use assets obtained in exchange for lease liabilities: Operating leases 24 Finance leases — Supplemental balance sheet information related to leases was as follows: September 30, 2019 $ Operating leases Operating leases right-of-use assets 77 Lease liabilities due within one year 26 Operating lease liabilities 68 94 Finance leases Property, plant and equipment 14 Accumulated depreciation (6 ) 8 Long-term debt due within one year 1 Long-term debt 9 10 Weighted-average remaining lease term Operating leases 5 years Finance leases 10.2 years Weighted-average discount rate Operating leases 4.5 % Finance leases 6.7 % Maturities of lease liabilities at September 3 0 , 2019 were as follows: Operating leases Finance leases $ $ 2019 (1) 8 — 2020 26 2 2021 22 2 2022 16 2 2023 12 1 Thereafter 22 7 Total lease payments 106 14 Less: Imputed interest 12 4 Total lease liabilities 94 10 (1) As of September 30, 2019, the Company has an additional $3 million of operating leases, primarily for office space and manufacturing equipment, which have not yet commenced. These operating leases will commence between 2019 and 2020, with terms between 3 and 5 years. Maturities of lease commitments at December 31, 2018 were as follows: Operating leases Capital leases $ $ 2019 26 2 2020 21 2 2021 17 2 2022 12 1 2023 10 1 Thereafter 17 7 Total lease payments 103 15 Less: Imputed interest N/A 4 Total lease liabilities N/A 11 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | NOTE 10. _________________ INTANGIBLE ASSETS The following table presents the components of intangible assets: September 30, 2019 December 31, 2018 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 – 40 375 (103 ) 272 384 (94 ) 290 Technology 7 – 20 8 (5 ) 3 8 (4 ) 4 Non-Compete 9 1 (1 ) — 1 (1 ) — License rights 12 29 (15 ) 14 28 (13 ) 15 416 (125 ) 291 424 (113 ) 311 Indefinite-lived intangible assets not subject to amortization Water rights 4 — 4 4 — 4 Trade names 230 — 230 238 — 238 License rights 6 — 6 6 — 6 Catalog rights 37 — 37 38 — 38 Total 693 (125 ) 568 710 (113 ) 597 Amortization expense related to intangible assets for the three and nine months ended September 30, 2019 was $5 million and $14 million, respectively (2018 – $4 million and $14 million, respectively). Amortization expense for the next five years related to intangible assets is expected to be as follows: 2019 2020 2021 2022 2023 $ $ $ $ $ Amortization expense related to intangible assets 21 (1) 21 21 20 20 (1) |
Closure and Restructuring Costs
Closure and Restructuring Costs and Impairment of Long-lived Assets | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring And Related Activities [Abstract] | |
Closure and Restructuring Costs and Impairment of Long-lived Assets | NOTE 11. _________________ CLOSURE AND RESTRUCTURING COSTS AND IMPAIRMENT OF LONG-LIVED ASSETS Ashdown, Arkansas mill and Port Huron, Michigan mill On September 27, 2019, the Company’s Board of Directors approved the decision to permanently shut down two paper machines, which was announced on October 3, 2019. The closures will take place at the Ashdown, Arkansas pulp and paper mill and the Port Huron, Michigan paper mill. These measures will reduce the Company’s annual uncoated freesheet paper capacity by approximately 204,000 short tons, and will result in a workforce reduction of approximately 100 employees. The Ashdown mill will continue to operate one paper machine with an annual uncoated freesheet paper production capacity of 200,000 short tons. Additionally, the mill operates a fluff pulp machine with the flexibility to produce softwood pulp depending on market conditions. As a result of the closure of the paper machine, the mill will produce an incremental 70,000 ADMT of softwood and fluff pulp, which will ramp up over the next 12 months. The closure of the Port Huron paper machine will take effect by mid-November. The Port Huron mill will continue to produce a variety of technical and specialty papers for a broad range of customers utilizing three machines with a total annual production capacity of 95,000 short tons. During the third quarter of 2019, the Company recorded $32 million of accelerated depreciation under Impairment of long-lived assets on the Consolidated Statement of Earnings and Comprehensive Income (Loss). Additionally, the Company recorded $1 million of severance and termination costs and $4 million of inventory obsolescence, under Closure and restructuring costs. Waco, Texas facility On November 1, 2018, the Company announced a margin improvement plan within the Personal Care Division. As part of this plan, the Board of Directors approved the permanent closure of its Waco, Texas Personal Care manufacturing and distribution facility, the relocation of certain of its manufacturing assets and a workforce reduction across the division. The Waco, Texas facility ceased operations during the second quarter of 2019. For the three and nine months ended September 30, 2019, the Company recorded $1 million of accelerated depreciation and $26 million of accelerated depreciation and impairment of operating lease right-of-use assets, respectively, under Impairment of long-lived assets on the Consolidated Statement of Earnings and Comprehensive Income (Loss). For the three and nine months ended September 30, 2019, the Company also recorded $1 million and $5 million, respectively, of severance and termination costs; $1 million and $2 million, respectively, of inventory obsolescence; and $4 million and $11 million, respectively, of asset relocation and other costs, under Closure and restructuring costs. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss by Component | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss by Component | NOTE 12. _________________ 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, 2017 8 (218 ) 6 (132 ) (336 ) Natural gas swap contracts 1 N/A N/A N/A 1 Currency options (12 ) N/A N/A N/A (12 ) Foreign exchange forward contracts (19 ) N/A N/A N/A (19 ) Net (gain) loss N/A (23 ) 6 N/A (17 ) Foreign currency items N/A N/A N/A (91 ) (91 ) Other comprehensive (loss) income before reclassifications (30 ) (23 ) 6 (91 ) (138 ) Amounts reclassified from Accumulated other comprehensive loss (2 ) 10 (1 ) — 7 Net current period other comprehensive (loss) income (32 ) (13 ) 5 (91 ) (131 ) Balance at December 31, 2018 (24 ) (231 ) 11 (223 ) (467 ) Natural gas swap contracts (8 ) N/A N/A N/A (8 ) Currency options 4 N/A N/A N/A 4 Foreign exchange forward contracts 9 N/A N/A N/A 9 Foreign currency items N/A N/A N/A (12 ) (12 ) Other comprehensive income (loss) before reclassifications 5 — — (12 ) (7 ) Amounts reclassified from Accumulated other comprehensive loss 5 8 (1 ) — 12 Net current period other comprehensive income (loss) 10 8 (1 ) (12 ) 5 Balance at September 30, 2019 (14 ) (223 ) 10 (235 ) (462 ) (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 tables present reclassifications out of Accumulated other comprehensive loss for the three and nine months ended September 30, 2019 and 2018: Details about Accumulated other comprehensive loss components Amounts reclassified from Accumulated other comprehensive loss (1) For the three months ended September 30, 2019 September 30, 2018 $ $ Net derivative gains on cash flow hedge Natural gas swap contracts (2) 2 — Currency options and forwards (2) 2 1 Total before tax 4 1 Tax expense (1 ) (1 ) Net of tax 3 — Amortization of defined benefit pension items Amortization of net actuarial loss (3) 2 2 Amortization of prior year service cost (3) 1 1 Total before tax 3 3 Tax expense (1 ) (1 ) Net of tax 2 2 Amortization of other post-retirement benefit items Amortization of net actuarial loss (3) — — Amortization of prior year service cost (3) — — Total before tax — — Tax benefit — — Net of tax — — Amounts reclassified from Accumulated other comprehensive loss (1) For the nine months ended September 30, 2019 September 30, 2018 $ $ Net derivatives gains (losses) on cash flow hedge Natural gas swap contracts (2) 2 — Currency options and forwards (2) 5 (2 ) Total before tax 7 (2 ) Tax expense (2 ) — Net of tax 5 (2 ) Amortization of defined benefit pension items Amortization of net actuarial loss (3) 7 6 Amortization of prior year service cost (3) 4 4 Total before tax 11 10 Tax expense (3 ) (3 ) Net of tax 8 7 Amortization of other post-retirement benefit items Amortization of net actuarial loss (3) (1 ) — Amortization of prior year service cost (3) — (1 ) Total before tax (1 ) (1 ) Tax benefit — — Net of tax (1 ) (1 ) (1) Amounts in parentheses indicate losses. (2) These amounts are included in Cost of Sales in the Consolidated Statements of Earnings and Comprehensive Income (Loss). (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 | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | NOTE 13. _________________ SHAREHOLDERS’ EQUITY DIVIDENDS On February 19, 2019, May 8, 2019, and August 6, 2019, the Company’s Board of Directors approved a quarterly dividend of $0.435, $0.455, and $0.455 per share, respectively, to be paid to holders of the Company’s common stock. Dividends aggregating $28 million were paid on each of April 15, 2019, and July 16, 2019, and dividends aggregating $27 million were paid on October 15, 2019, to shareholders of record on April 2, 2019, July 2, 2019, and October 2, 2019, respectively. On November 5, 2019, the Company’s Board of Directors approved a quarterly dividend of $0.455 per share to be paid to holders of the Company’s common stock. This dividend is to be paid on January 15, 2020, to shareholders of record on January 2, 2020. STOCK REPURCHASE PROGRAM The Company’s Board of Directors has authorized a stock repurchase program (the “Program”) of up to $1.3 billion. At September 30, 2019, the Company had approximately $178 million of remaining availability under the Program. On November 5, 2019, the Company’s Board of Directors approved an increase to the Program from $1.3 billion to $1.6 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 nine months of 2019, the Company repurchased 4,076,723 shares at an average price of $35.47 for a total cost of $145 million. During the first nine months of 2018, there were no shares repurchased under the Program. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 14. _________________ 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 was completed in the first quarter of 2019. The Company previously recorded an environmental reserve to address its estimated exposure. A former owner of the Company’s Dryden, Ontario manufacturing site (the "Dryden Property") operated a chlor-alkali plant during the 1960s and 1970s, during which time, mercury and other pollutants were used and discharged into the natural environment. In conjunction with the sale and redevelopment of the Dryden Property, the Province of Ontario (the “Province”) provided a broad indemnity (the "Indemnity") in 1985 to the then purchaser of the Dryden Property and its successors and assigns with respect to the discharge of any pollutant, including mercury, by the historical operators of the Dryden Property. This Indemnity was subsequently assigned to the Company in connection with its 2007 purchase of the Dryden Property. As the current owner of the Dryden Property, Domtar is actively engaged with the Province with respect to the management of the historical contamination. The Province has challenged whether certain owners of the Dryden Property prior to Domtar can benefit from the Indemnity in relation to the historic contamination. The Province was unsuccessful in the lower courts and has appealed to the Supreme Court of Canada, whose decision is pending. The Province may also challenge whether Domtar has the benefit of the Indemnity. Should it be determined that Domtar does not have the benefit of the Indemnity, Domtar may be exposed to future costs that could have a material financial impact on the Company’s results of operations and financial condition. The following table reflects changes in the reserve for environmental remediation and asset retirement obligations: September 30, 2019 $ Balance at beginning of year 37 Additions and other changes 3 Environmental spending (5 ) Effect of foreign currency exchange rate change — 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. On July 8, 2019, the EPA published a final rule to repeal the Clean Power Plan and replace it with the “Affordable Clean Energy” (“ACE”) rule. Unlike the Clean Power Plan, which would have required significant changes across the entire power sector, ACE only requires states to develop plans for efficiency improvements at coal-fired electric utility generating units. The rule was immediately challenged in the U.S. Court of Appeals for the D.C. Circuit. Regardless of the outcome for the Clean Power Plan and ACE, 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 province of Quebec has a greenhouse gases (“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 its facilities to be disproportionately affected by these measures compared to the other pulp and paper producers located in these provinces. The Government of Canada has established a federal carbon pricing system in provinces that do not already impose a cost on carbon emissions. The Government of Canada will be imposing its carbon pricing program for regulating GHG emissions in Ontario. This regulatory system took effect in Ontario on January 1, 2019. To reduce GHG emissions and recognize the unique circumstances of the province’s diverse economy, Ontario recently finalized its own GHG Emission Performance Standards regulation. The Ontario Government is in discussions with the Canadian Government to replace the federal program in Ontario with its provincial program. Additional environmental costs may result from this effort which cannot be reasonably estimated at this time. 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 September 30, 2019, 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 September 30, 2019, 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 September 30, 2019, 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 | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Disclosures | NOTE 15. _________________ 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 nine months ended SEGMENT DATA September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 $ $ $ $ Sales by segment Pulp and Paper 1,071 1,146 3,314 3,369 Personal Care 227 237 711 746 Total for reportable segments 1,298 1,383 4,025 4,115 Intersegment sales (15 ) (16 ) (49 ) (50 ) Consolidated sales 1,283 1,367 3,976 4,065 Sales by product group Communication papers 635 639 1,963 1,904 Specialty and packaging papers 159 181 490 536 Market pulp 262 310 812 879 Absorbent hygiene products 227 237 711 746 Consolidated sales 1,283 1,367 3,976 4,065 Depreciation and amortization Pulp and Paper 56 58 171 180 Personal Care 16 17 48 53 Total for reportable segments 72 75 219 233 Impairment of long-lived assets - Pulp and Paper 32 — 32 — Impairment of long-lived assets - Personal Care 1 — 26 — Consolidated depreciation and amortization and impairment of long-lived assets 105 75 277 233 Operating income (loss) Pulp and Paper 31 135 237 290 Personal Care 2 (3 ) (24 ) 7 Corporate (4 ) (18 ) (35 ) (44 ) Consolidated operating income 29 114 178 253 Interest expense, net 12 15 38 47 Non-service components of net periodic benefit cost (2 ) (4 ) (7 ) (13 ) Earnings before income taxes and equity loss 19 103 147 219 Income tax (benefit) expense (1 ) 3 28 22 Equity loss, net of taxes — 1 1 1 Net earnings 20 99 118 196 |
Supplemental Guarantor Financia
Supplemental Guarantor Financial Information | 9 Months Ended |
Sep. 30, 2019 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Supplemental Guarantor Financial Information | NOTE 16. _________________ 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 is not guaranteed by certain of Domtar’s foreign and non-significant domestic subsidiaries, all 100% owned, (collectively the “Non-Guarantor Subsidiaries”). A 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 September 30, 2019 and December 31, 2018, the Statements of Earnings and Comprehensive Income (Loss) for the three and nine months ended September 30, 2019 and 2018 and the Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 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 September 30, 2019 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME (LOSS) Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 1,060 459 (236 ) 1,283 Operating expenses Cost of sales, excluding depreciation and amortization — 891 386 (236 ) 1,041 Depreciation and amortization — 51 21 — 72 Selling, general and administrative — 59 35 — 94 Impairment of long-lived assets — 33 — — 33 Closure and restructuring costs — 11 — — 11 Other operating loss, net — 1 2 — 3 — 1,046 444 (236 ) 1,254 Operating income — 14 15 — 29 Interest expense (income), net 18 18 (24 ) — 12 Non-service components of net periodic benefit cost — 1 (3 ) — (2 ) (Loss) earnings before income taxes (18 ) (5 ) 42 — 19 Income tax (benefit) expense (4 ) (2 ) 5 — (1 ) Share in earnings of equity accounted investees 34 37 — (71 ) — Net earnings 20 34 37 (71 ) 20 Other comprehensive loss (38 ) (37 ) (33 ) 70 (38 ) Comprehensive (loss) income (18 ) (3 ) 4 (1 ) (18 ) For the nine months ended September 30, 2019 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 3,268 1,478 (770 ) 3,976 Operating expenses Cost of sales, excluding depreciation and amortization — 2,746 1,196 (770 ) 3,172 Depreciation and amortization — 155 64 — 219 Selling, general and administrative 7 170 145 — 322 Impairment of long-lived assets — 58 — — 58 Closure and restructuring costs — 21 2 — 23 Other operating (income) loss, net — (3 ) 7 — 4 7 3,147 1,414 (770 ) 3,798 Operating (loss) income (7 ) 121 64 — 178 Interest expense (income), net 52 60 (74 ) — 38 Non-service components of net periodic benefit cost — 1 (8 ) — (7 ) (Loss) earnings before income taxes and equity loss (59 ) 60 146 — 147 Income tax (benefit) expense (13 ) 12 29 — 28 Equity loss, net of taxes — — 1 — 1 Share in earnings of equity accounted investees 164 116 — (280 ) — Net earnings 118 164 116 (280 ) 118 Other comprehensive income (loss) 5 11 (8 ) (3 ) 5 Comprehensive income 123 175 108 (283 ) 123 For the three months ended September 30, 2018 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 1,115 559 (307 ) 1,367 Operating expenses Cost of sales, excluding depreciation and amortization — 954 412 (307 ) 1,059 Depreciation and amortization — 53 22 — 75 Selling, general and administrative 4 31 80 — 115 Other operating (income) loss, net — (1 ) 5 — 4 4 1,037 519 (307 ) 1,253 Operating (loss) income (4 ) 78 40 — 114 Interest expense (income), net 15 23 (23 ) — 15 Non-service components of net periodic benefit cost — 1 (5 ) — (4 ) (Loss) earnings before income taxes (19 ) 54 68 — 103 Income tax (benefit) expense (11 ) — 14 — 3 Equity loss, net of taxes — — 1 — 1 Share in earnings of equity accounted investees 107 53 — (160 ) — Net earnings 99 107 53 (160 ) 99 Other comprehensive income 21 21 13 (34 ) 21 Comprehensive income 120 128 66 (194 ) 120 For the nine months ended September 30, 2018 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 3,287 1,671 (893 ) 4,065 Operating expenses Cost of sales, excluding depreciation and amortization — 2,840 1,292 (893 ) 3,239 Depreciation and amortization — 164 69 — 233 Selling, general and administrative 11 99 233 — 343 Other operating income, net — (2 ) (1 ) — (3 ) 11 3,101 1,593 (893 ) 3,812 Operating (loss) income (11 ) 186 78 — 253 Interest expense (income), net 47 68 (68 ) — 47 Non-service components of net periodic benefit cost — 1 (14 ) — (13 ) (Loss) earnings before income taxes (58 ) 117 160 — 219 Income tax (benefit) expense (19 ) 12 29 — 22 Equity loss, net of taxes — — 1 — 1 Share in earnings of equity accounted investees 235 130 — (365 ) — Net earnings 196 235 130 (365 ) 196 Other comprehensive loss (54 ) (54 ) (47 ) 101 (54 ) Comprehensive income 142 181 83 (264 ) 142 September 30, 2019 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING BALANCE SHEET Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Assets Current assets Cash and cash equivalents — 4 99 (5 ) 98 Receivables — 148 470 — 618 Inventories — 555 243 — 798 Prepaid expenses 9 15 9 — 33 Income and other taxes receivable 59 12 27 (45 ) 53 Intercompany accounts 436 465 155 (1,056 ) — Total current assets 504 1,199 1,003 (1,106 ) 1,600 Property, plant and equipment, net — 1,693 806 — 2,499 Operating lease right-of-use assets — 63 14 — 77 Intangible assets, net — 248 320 — 568 Investments in affiliates 3,821 2,705 — (6,526 ) — Intercompany long-term advances 5 1 1,684 (1,690 ) — Other assets 20 35 113 (28 ) 140 Total assets 4,350 5,944 3,940 (9,350 ) 4,884 Liabilities and shareholders' equity Current liabilities Bank indebtedness 5 1 — (5 ) 1 Trade and other payables 58 371 217 — 646 Intercompany accounts 245 222 589 (1,056 ) — Income and other taxes payable 2 45 26 (45 ) 28 Operating lease liabilities due within one year — 20 6 — 26 Long-term debt due within one year — — 1 — 1 Total current liabilities 310 659 839 (1,106 ) 702 Long-term debt 838 — 100 — 938 Operating lease liabilities — 59 9 — 68 Intercompany long-term loans 733 956 1 (1,690 ) — Deferred income taxes and other — 351 156 (28 ) 479 Other liabilities and deferred credits 30 98 130 — 258 Shareholders' equity 2,439 3,821 2,705 (6,526 ) 2,439 Total liabilities and shareholders' equity 4,350 5,944 3,940 (9,350 ) 4,884 December 31, 2018 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING BALANCE SHEET Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Assets Current assets Cash and cash equivalents — — 111 — 111 Receivables — 146 524 — 670 Inventories — 525 237 — 762 Prepaid expenses 6 12 6 — 24 Income and other taxes receivable 1 3 18 — 22 Intercompany accounts 498 392 35 (925 ) — Total current assets 505 1,078 931 (925 ) 1,589 Property, plant and equipment, net — 1,802 803 — 2,605 Intangible assets, net — 256 341 — 597 Investments in affiliates 3,645 2,611 — (6,256 ) — Intercompany long-term advances 5 1 1,569 (1,575 ) — Other assets 18 26 104 (14 ) 134 Total assets 4,173 5,774 3,748 (8,770 ) 4,925 Liabilities and shareholders' equity Current liabilities Trade and other payables 52 464 241 — 757 Intercompany accounts 125 264 536 (925 ) — Income and other taxes payable 1 12 12 — 25 Long-term debt due within one year — — 1 — 1 Total current liabilities 178 740 790 (925 ) 783 Long-term debt 793 — 60 — 853 Intercompany long-term loans 636 938 1 (1,575 ) — Deferred income taxes and other — 335 155 (14 ) 476 Other liabilities and deferred credits 28 116 131 — 275 Shareholders' equity 2,538 3,645 2,611 (6,256 ) 2,538 Total liabilities and shareholders' equity 4,173 5,774 3,748 (8,770 ) 4,925 The Company has revised the Receivables balance within the December 31, 2018 Guarantor Subsidiaries column (decreased) and Non-Guarantor Subsidiaries column (increased) by $198 million, respectively, as receivables from third parties for the Guarantor Subsidiaries were netted with intercompany receivables. For the nine months ended September 30, 2019 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Adjustments Consolidated $ $ $ $ $ Operating activities Net earnings 118 164 116 (280 ) 118 Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings (20 ) (122 ) 26 280 164 Cash flows from operating activities 98 42 142 — 282 Investing activities Additions to property, plant and equipment — (92 ) (65 ) — (157 ) Proceeds from disposals of property, plant and equipment — 1 — — 1 Cash flows used for investing activities — (91 ) (65 ) — (156 ) Financing activities Dividend payments (83 ) — — — (83 ) Stock repurchase (139 ) — — — (139 ) Net change in bank indebtedness 5 1 1 (5 ) 2 Change in revolving credit facility 45 — — — 45 Proceeds from receivables securitization facility — — 150 — 150 Repayments of receivables securitization facility — — (110 ) — (110 ) Repayments of long-term debt — — (1 ) — (1 ) Increase in long-term advances to related parties — — (127 ) 127 — Decrease in long-term advances to related parties 75 52 — (127 ) — Other (1 ) — — — (1 ) Cash flows (used for) provided from financing activities (98 ) 53 (87 ) (5 ) (137 ) Net increase (decrease) in cash and cash equivalents — 4 (10 ) (5 ) (11 ) Impact of foreign exchange on cash — — (2 ) — (2 ) Cash and cash equivalents at beginning of period — — 111 — 111 Cash and cash equivalents at end of period — 4 99 (5 ) 98 For the nine months ended September 30, 2018 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Adjustments Consolidated $ $ $ $ $ Operating activities Net earnings 196 235 130 (365 ) 196 Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings (376 ) 202 (50 ) 365 141 Cash flows (used for) provided from operating activities (180 ) 437 80 — 337 Investing activities Additions to property, plant and equipment — (73 ) (38 ) — (111 ) Proceeds from disposals of property, plant and equipment — — 4 — 4 Other — (2 ) (4 ) — (6 ) Cash flows used for investing activities — (75 ) (38 ) — (113 ) Financing activities Dividend payments (81 ) — — — (81 ) Repayments of receivables securitization facility — — (25 ) — (25 ) Increase in long-term advances to related parties — (368 ) (61 ) 429 — Decrease in long-term advances to related parties 429 — — (429 ) — Other 1 — — — 1 Cash flows provided from (used for) financing activities 349 (368 ) (86 ) — (105 ) Net increase (decrease) in cash and cash equivalents 169 (6 ) (44 ) — 119 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 172 8 76 — 256 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Leases | LEASES In February 2016, the FASB issued ASU 2016-02, “ Leases The Company elected to initially apply the new leases standard as of January 1, 2019 with certain available practical expedients which are discussed below. No cumulative-effect adjustments on retained earnings were necessary as of January 1, 2019. The most significant impact of adopting the new standard was the recognition of right-of-use assets and lease liabilities for operating leases. The accounting for finance leases remains substantially unchanged. In transitioning to the new standard, the Company elected to use the practical expedient package. Accordingly, the Company did not reassess the following: • Whether existing or expired contracts are, or contained, a lease (including executory contracts). • The lease classification of existing or expired leases previously made by management. • Whether initial direct costs for existing leases would qualify under the new standard. Furthermore, the Company elected to use the hindsight practical expedient in determining the lease term and assessing impairment of the right-of-use assets. For all comparative periods prior to the adoption of the new leases standard, the Company will continue to report operating leases in the consolidated financial statements under ASC 840 “ Leases |
Comprehensive Income | COMPREHENSIVE INCOME In February 2018, the FASB issued ASU 2018-02, “ Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income This guidance became effective for the Company on January 1, 2019. The Company has decided not to elect this option, as permitted in the new guidance. |
Future Accounting Changes [Member] | |
Implementation Costs for Cloud Computing Arrangements | IMPLEMENTATION COSTS FOR CLOUD COMPUTING ARRANGEMENTS In August 2018, the FASB issued ASU 2018-15, “ Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract • Capitalized implementation costs should be presented in the same line item on the balance sheet as amounts prepaid for the hosted CCA service, if any (generally as an “other asset”). • The amortization of capitalized implementation costs should be presented in the same statement of earnings line item as the fees associated with the hosted CCA service. Accordingly, the amortization of capitalized implementation costs should not be included with depreciation or amortization expense related to property, plant, and equipment or intangible assets. • Cash flows related to capitalized implementation costs should be presented as operating activities, consistent with the presentation of cash flows for the fees related to the hosted CCA service. • Entities are required to disclose the nature of the hosting arrangements that are service contracts and significant judgments made when applying the guidance. Additionally, companies are required to provide quantitative disclosures, including amounts capitalized, amortized, and impaired. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. The amendments in this ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. While the Company is still evaluating the impact of adopting the new standard, it does not expect this new guidance to have a material impact on the consolidated financial statements. |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities and Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, 2019 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 2019 (1) 3,915,000 $ 12 53% 2020 11,165,000 $ 34 40% 2021 9,270,000 $ 27 33% 2022 9,270,000 $ 25 33% 2023 4,210,000 $ 11 15% (1) Represents the remaining three months of 2019 (2) MMBtu: Millions of British thermal units |
Currency Values under Significant Currency Positions Pursuant to Currency Derivatives Outstanding | The following table presents the currency values under significant currency positions pursuant to currency derivatives outstanding as of September 30, 2019 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 CAD/USD Pulp and Paper 2019 (1) 174 CAD 77% 1 USD = 1.2945 1 USD = 1.3152 CAD/USD Pulp and Paper 2020 557 CAD 62% 1 USD = 1.2966 1 USD = 1.3155 CAD/USD Pulp and Paper 2021 237 CAD 26% 1 USD = 1.3185 1 USD = 1.3185 (1) Represents the remaining |
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 September 30, 2019 and December 31, 2018, 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: September 30, 2019 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 2 — 2 — (a) Prepaid expenses Currency derivatives — — — — (a) Other assets Total Assets 2 — 2 — Liabilities derivatives Currency derivatives 8 — 8 — (a) Trade and other payables Natural gas swap contracts 7 — 7 — (a) Trade and other payables Currency derivatives 2 — 2 — (a) Other Natural gas swap contracts 7 — 7 — (a) Other liabilities and deferred credits Total Liabilities 24 — 24 — Other Instruments: Stock-based compensation - liability awards 6 6 — — Trade and other payables Stock-based compensation - liability awards 16 16 — — Other liabilities and deferred credits Long-term debt 960 — 960 — (b) Long-term debt Fair Value of financial instruments at: December 31, 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 1 — 1 — (a) Prepaid expenses Natural gas swap contracts 1 — 1 — (a) Prepaid expenses Total Assets 2 — 2 — Liabilities derivatives Currency derivatives 19 — 19 — (a) Trade and other payables Natural gas swap contracts 2 — 2 — (a) Trade and other payables Currency derivatives 11 — 11 — (a) Other liabilities and deferred credits Natural gas swap contracts 5 — 5 — (a) Other liabilities and deferred credits Total Liabilities 37 — 37 — Other Instruments: Stock-based compensation - liability awards 6 6 — — Trade and other payables Stock-based compensation - liability awards 17 17 — — Other liabilities and deferred credits Long-term debt 858 — 858 — (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 September 30, 2019 and December 31, 2018. However, fair value disclosure is required. The carrying value of the Company’s long-term debt is $939 million and $854 million at September 30, 2019 and December 31, 2018, respectively. |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 nine months ended September 30, September 30, September 30, September 30, 2019 2018 2019 2018 Net earnings $ 20 $ 99 $ 118 $ 196 Weighted average number of common shares outstanding (millions) 61.5 62.9 62.5 62.8 Effect of dilutive securities (millions) 0.2 0.3 0.2 0.3 Weighted average number of diluted common shares outstanding (millions) 61.7 63.2 62.7 63.1 Basic net earnings per common share (in dollars) $ 0.33 $ 1.57 $ 1.89 $ 3.12 Diluted $ 0.32 $ 1.57 $ 1.88 $ 3.11 |
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 nine months ended September 30, September 30, September 30, September 30, 2019 2018 2019 2018 Options to purchase common shares 398,869 201,599 325,757 201,599 |
Pension Plans and Other Post-_2
Pension Plans and Other Post-Retirement Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 nine months ended September 30, 2019 September 30, 2019 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 6 — 21 1 Interest expense 14 — 41 1 Expected return on plan assets (19 ) — (59 ) — Amortization of net actuarial loss (gain) 2 — 7 (1 ) Amortization of prior year service costs 1 — 4 — Net periodic benefit cost 4 — 14 1 Components of net periodic benefit cost for pension plans and other post-retirement benefit plans: For the three months ended For the nine months ended September 30, 2018 September 30, 2018 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 8 — 25 1 Interest expense 14 1 41 2 Expected return on plan assets (22 ) — (65 ) — Amortization of net actuarial loss 2 — 6 — Amortization of prior year service costs 1 — 4 (1 ) Net periodic benefit cost 3 1 11 2 |
Other Operating Loss (Income)_2
Other Operating Loss (Income), Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Other Income And Expenses [Abstract] | |
Components of Other Operating Loss (Income), Net | The Company’s other operating loss (income), net includes the following: For the three months ended For the nine months ended September 30, September 30, September 30, September 30, 2019 2018 2019 2018 $ $ $ $ Gain on sale of property, plant and equipment — — — (4 ) Bad debt expense 1 — 2 1 Environmental provision 1 2 2 2 Foreign exchange loss (gain) 1 2 3 (1 ) Other — — (3 ) (1 ) Other operating loss (income), net 3 4 4 (3 ) |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The following table presents the components of inventories: September 30, December 31, 2019 2018 $ $ Work in process and finished goods 423 410 Raw materials 143 126 Operating and maintenance supplies 232 226 798 762 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Summary of Components of Lease Expense | The components of lease expense were as follows: For the three months ended For the nine months ended September 30, September 30, 2019 2019 $ $ Operating lease expense 8 22 Finance lease expense: Amortization of right-of-use assets 1 1 Interest on lease liabilities — — Total finance lease expense 1 1 |
Summary of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows: For the nine months ended September 30, 2019 $ Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 23 Operating cash flows from finance leases 1 Financing cash flows from finance leases 1 Right-of-use assets obtained in exchange for lease liabilities: Operating leases 24 Finance leases — |
Summary of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: September 30, 2019 $ Operating leases Operating leases right-of-use assets 77 Lease liabilities due within one year 26 Operating lease liabilities 68 94 Finance leases Property, plant and equipment 14 Accumulated depreciation (6 ) 8 Long-term debt due within one year 1 Long-term debt 9 10 Weighted-average remaining lease term Operating leases 5 years Finance leases 10.2 years Weighted-average discount rate Operating leases 4.5 % Finance leases 6.7 % |
Summary of Maturities of Lease Liabilities | Maturities of lease liabilities at September 3 0 , 2019 were as follows: Operating leases Finance leases $ $ 2019 (1) 8 — 2020 26 2 2021 22 2 2022 16 2 2023 12 1 Thereafter 22 7 Total lease payments 106 14 Less: Imputed interest 12 4 Total lease liabilities 94 10 (1) |
Summary of Maturities of Lease Commitments | Maturities of lease commitments at December 31, 2018 were as follows: Operating leases Capital leases $ $ 2019 26 2 2020 21 2 2021 17 2 2022 12 1 2023 10 1 Thereafter 17 7 Total lease payments 103 15 Less: Imputed interest N/A 4 Total lease liabilities N/A 11 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Components of Intangible Assets | The following table presents the components of intangible assets: September 30, 2019 December 31, 2018 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 – 40 375 (103 ) 272 384 (94 ) 290 Technology 7 – 20 8 (5 ) 3 8 (4 ) 4 Non-Compete 9 1 (1 ) — 1 (1 ) — License rights 12 29 (15 ) 14 28 (13 ) 15 416 (125 ) 291 424 (113 ) 311 Indefinite-lived intangible assets not subject to amortization Water rights 4 — 4 4 — 4 Trade names 230 — 230 238 — 238 License rights 6 — 6 6 — 6 Catalog rights 37 — 37 38 — 38 Total 693 (125 ) 568 710 (113 ) 597 |
Amortization Expense Related to Intangible Assets | Amortization expense for the next five years related to intangible assets is expected to be as follows: 2019 2020 2021 2022 2023 $ $ $ $ $ Amortization expense related to intangible assets 21 (1) 21 21 20 20 (1) |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Loss by Component (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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, 2017 8 (218 ) 6 (132 ) (336 ) Natural gas swap contracts 1 N/A N/A N/A 1 Currency options (12 ) N/A N/A N/A (12 ) Foreign exchange forward contracts (19 ) N/A N/A N/A (19 ) Net (gain) loss N/A (23 ) 6 N/A (17 ) Foreign currency items N/A N/A N/A (91 ) (91 ) Other comprehensive (loss) income before reclassifications (30 ) (23 ) 6 (91 ) (138 ) Amounts reclassified from Accumulated other comprehensive loss (2 ) 10 (1 ) — 7 Net current period other comprehensive (loss) income (32 ) (13 ) 5 (91 ) (131 ) Balance at December 31, 2018 (24 ) (231 ) 11 (223 ) (467 ) Natural gas swap contracts (8 ) N/A N/A N/A (8 ) Currency options 4 N/A N/A N/A 4 Foreign exchange forward contracts 9 N/A N/A N/A 9 Foreign currency items N/A N/A N/A (12 ) (12 ) Other comprehensive income (loss) before reclassifications 5 — — (12 ) (7 ) Amounts reclassified from Accumulated other comprehensive loss 5 8 (1 ) — 12 Net current period other comprehensive income (loss) 10 8 (1 ) (12 ) 5 Balance at September 30, 2019 (14 ) (223 ) 10 (235 ) (462 ) (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 tables present reclassifications out of Accumulated other comprehensive loss for the three and nine months ended September 30, 2019 and 2018: Details about Accumulated other comprehensive loss components Amounts reclassified from Accumulated other comprehensive loss (1) For the three months ended September 30, 2019 September 30, 2018 $ $ Net derivative gains on cash flow hedge Natural gas swap contracts (2) 2 — Currency options and forwards (2) 2 1 Total before tax 4 1 Tax expense (1 ) (1 ) Net of tax 3 — Amortization of defined benefit pension items Amortization of net actuarial loss (3) 2 2 Amortization of prior year service cost (3) 1 1 Total before tax 3 3 Tax expense (1 ) (1 ) Net of tax 2 2 Amortization of other post-retirement benefit items Amortization of net actuarial loss (3) — — Amortization of prior year service cost (3) — — Total before tax — — Tax benefit — — Net of tax — — Amounts reclassified from Accumulated other comprehensive loss (1) For the nine months ended September 30, 2019 September 30, 2018 $ $ Net derivatives gains (losses) on cash flow hedge Natural gas swap contracts (2) 2 — Currency options and forwards (2) 5 (2 ) Total before tax 7 (2 ) Tax expense (2 ) — Net of tax 5 (2 ) Amortization of defined benefit pension items Amortization of net actuarial loss (3) 7 6 Amortization of prior year service cost (3) 4 4 Total before tax 11 10 Tax expense (3 ) (3 ) Net of tax 8 7 Amortization of other post-retirement benefit items Amortization of net actuarial loss (3) (1 ) — Amortization of prior year service cost (3) — (1 ) Total before tax (1 ) (1 ) Tax benefit — — Net of tax (1 ) (1 ) (1) Amounts in parentheses indicate losses. (2) These amounts are included in Cost of Sales in the Consolidated Statements of Earnings and Comprehensive Income (Loss). (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) | 9 Months Ended |
Sep. 30, 2019 | |
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: September 30, 2019 $ Balance at beginning of year 37 Additions and other changes 3 Environmental spending (5 ) Effect of foreign currency exchange rate change — Balance at end of period 35 |
Segment Disclosures (Tables)
Segment Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Analysis and Reconciliation of Reportable Segment Information | 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 nine months ended SEGMENT DATA September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 $ $ $ $ Sales by segment Pulp and Paper 1,071 1,146 3,314 3,369 Personal Care 227 237 711 746 Total for reportable segments 1,298 1,383 4,025 4,115 Intersegment sales (15 ) (16 ) (49 ) (50 ) Consolidated sales 1,283 1,367 3,976 4,065 Sales by product group Communication papers 635 639 1,963 1,904 Specialty and packaging papers 159 181 490 536 Market pulp 262 310 812 879 Absorbent hygiene products 227 237 711 746 Consolidated sales 1,283 1,367 3,976 4,065 Depreciation and amortization Pulp and Paper 56 58 171 180 Personal Care 16 17 48 53 Total for reportable segments 72 75 219 233 Impairment of long-lived assets - Pulp and Paper 32 — 32 — Impairment of long-lived assets - Personal Care 1 — 26 — Consolidated depreciation and amortization and impairment of long-lived assets 105 75 277 233 Operating income (loss) Pulp and Paper 31 135 237 290 Personal Care 2 (3 ) (24 ) 7 Corporate (4 ) (18 ) (35 ) (44 ) Consolidated operating income 29 114 178 253 Interest expense, net 12 15 38 47 Non-service components of net periodic benefit cost (2 ) (4 ) (7 ) (13 ) Earnings before income taxes and equity loss 19 103 147 219 Income tax (benefit) expense (1 ) 3 28 22 Equity loss, net of taxes — 1 1 1 Net earnings 20 99 118 196 |
Supplemental Guarantor Financ_2
Supplemental Guarantor Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Condensed Consolidating Statement of Earnings and Comprehensive Income (Loss) | For the three months ended September 30, 2019 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME (LOSS) Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 1,060 459 (236 ) 1,283 Operating expenses Cost of sales, excluding depreciation and amortization — 891 386 (236 ) 1,041 Depreciation and amortization — 51 21 — 72 Selling, general and administrative — 59 35 — 94 Impairment of long-lived assets — 33 — — 33 Closure and restructuring costs — 11 — — 11 Other operating loss, net — 1 2 — 3 — 1,046 444 (236 ) 1,254 Operating income — 14 15 — 29 Interest expense (income), net 18 18 (24 ) — 12 Non-service components of net periodic benefit cost — 1 (3 ) — (2 ) (Loss) earnings before income taxes (18 ) (5 ) 42 — 19 Income tax (benefit) expense (4 ) (2 ) 5 — (1 ) Share in earnings of equity accounted investees 34 37 — (71 ) — Net earnings 20 34 37 (71 ) 20 Other comprehensive loss (38 ) (37 ) (33 ) 70 (38 ) Comprehensive (loss) income (18 ) (3 ) 4 (1 ) (18 ) For the nine months ended September 30, 2019 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 3,268 1,478 (770 ) 3,976 Operating expenses Cost of sales, excluding depreciation and amortization — 2,746 1,196 (770 ) 3,172 Depreciation and amortization — 155 64 — 219 Selling, general and administrative 7 170 145 — 322 Impairment of long-lived assets — 58 — — 58 Closure and restructuring costs — 21 2 — 23 Other operating (income) loss, net — (3 ) 7 — 4 7 3,147 1,414 (770 ) 3,798 Operating (loss) income (7 ) 121 64 — 178 Interest expense (income), net 52 60 (74 ) — 38 Non-service components of net periodic benefit cost — 1 (8 ) — (7 ) (Loss) earnings before income taxes and equity loss (59 ) 60 146 — 147 Income tax (benefit) expense (13 ) 12 29 — 28 Equity loss, net of taxes — — 1 — 1 Share in earnings of equity accounted investees 164 116 — (280 ) — Net earnings 118 164 116 (280 ) 118 Other comprehensive income (loss) 5 11 (8 ) (3 ) 5 Comprehensive income 123 175 108 (283 ) 123 For the three months ended September 30, 2018 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 1,115 559 (307 ) 1,367 Operating expenses Cost of sales, excluding depreciation and amortization — 954 412 (307 ) 1,059 Depreciation and amortization — 53 22 — 75 Selling, general and administrative 4 31 80 — 115 Other operating (income) loss, net — (1 ) 5 — 4 4 1,037 519 (307 ) 1,253 Operating (loss) income (4 ) 78 40 — 114 Interest expense (income), net 15 23 (23 ) — 15 Non-service components of net periodic benefit cost — 1 (5 ) — (4 ) (Loss) earnings before income taxes (19 ) 54 68 — 103 Income tax (benefit) expense (11 ) — 14 — 3 Equity loss, net of taxes — — 1 — 1 Share in earnings of equity accounted investees 107 53 — (160 ) — Net earnings 99 107 53 (160 ) 99 Other comprehensive income 21 21 13 (34 ) 21 Comprehensive income 120 128 66 (194 ) 120 For the nine months ended September 30, 2018 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 3,287 1,671 (893 ) 4,065 Operating expenses Cost of sales, excluding depreciation and amortization — 2,840 1,292 (893 ) 3,239 Depreciation and amortization — 164 69 — 233 Selling, general and administrative 11 99 233 — 343 Other operating income, net — (2 ) (1 ) — (3 ) 11 3,101 1,593 (893 ) 3,812 Operating (loss) income (11 ) 186 78 — 253 Interest expense (income), net 47 68 (68 ) — 47 Non-service components of net periodic benefit cost — 1 (14 ) — (13 ) (Loss) earnings before income taxes (58 ) 117 160 — 219 Income tax (benefit) expense (19 ) 12 29 — 22 Equity loss, net of taxes — — 1 — 1 Share in earnings of equity accounted investees 235 130 — (365 ) — Net earnings 196 235 130 (365 ) 196 Other comprehensive loss (54 ) (54 ) (47 ) 101 (54 ) Comprehensive income 142 181 83 (264 ) 142 |
Condensed Consolidating Balance Sheet | September 30, 2019 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING BALANCE SHEET Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Assets Current assets Cash and cash equivalents — 4 99 (5 ) 98 Receivables — 148 470 — 618 Inventories — 555 243 — 798 Prepaid expenses 9 15 9 — 33 Income and other taxes receivable 59 12 27 (45 ) 53 Intercompany accounts 436 465 155 (1,056 ) — Total current assets 504 1,199 1,003 (1,106 ) 1,600 Property, plant and equipment, net — 1,693 806 — 2,499 Operating lease right-of-use assets — 63 14 — 77 Intangible assets, net — 248 320 — 568 Investments in affiliates 3,821 2,705 — (6,526 ) — Intercompany long-term advances 5 1 1,684 (1,690 ) — Other assets 20 35 113 (28 ) 140 Total assets 4,350 5,944 3,940 (9,350 ) 4,884 Liabilities and shareholders' equity Current liabilities Bank indebtedness 5 1 — (5 ) 1 Trade and other payables 58 371 217 — 646 Intercompany accounts 245 222 589 (1,056 ) — Income and other taxes payable 2 45 26 (45 ) 28 Operating lease liabilities due within one year — 20 6 — 26 Long-term debt due within one year — — 1 — 1 Total current liabilities 310 659 839 (1,106 ) 702 Long-term debt 838 — 100 — 938 Operating lease liabilities — 59 9 — 68 Intercompany long-term loans 733 956 1 (1,690 ) — Deferred income taxes and other — 351 156 (28 ) 479 Other liabilities and deferred credits 30 98 130 — 258 Shareholders' equity 2,439 3,821 2,705 (6,526 ) 2,439 Total liabilities and shareholders' equity 4,350 5,944 3,940 (9,350 ) 4,884 December 31, 2018 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING BALANCE SHEET Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Assets Current assets Cash and cash equivalents — — 111 — 111 Receivables — 146 524 — 670 Inventories — 525 237 — 762 Prepaid expenses 6 12 6 — 24 Income and other taxes receivable 1 3 18 — 22 Intercompany accounts 498 392 35 (925 ) — Total current assets 505 1,078 931 (925 ) 1,589 Property, plant and equipment, net — 1,802 803 — 2,605 Intangible assets, net — 256 341 — 597 Investments in affiliates 3,645 2,611 — (6,256 ) — Intercompany long-term advances 5 1 1,569 (1,575 ) — Other assets 18 26 104 (14 ) 134 Total assets 4,173 5,774 3,748 (8,770 ) 4,925 Liabilities and shareholders' equity Current liabilities Trade and other payables 52 464 241 — 757 Intercompany accounts 125 264 536 (925 ) — Income and other taxes payable 1 12 12 — 25 Long-term debt due within one year — — 1 — 1 Total current liabilities 178 740 790 (925 ) 783 Long-term debt 793 — 60 — 853 Intercompany long-term loans 636 938 1 (1,575 ) — Deferred income taxes and other — 335 155 (14 ) 476 Other liabilities and deferred credits 28 116 131 — 275 Shareholders' equity 2,538 3,645 2,611 (6,256 ) 2,538 Total liabilities and shareholders' equity 4,173 5,774 3,748 (8,770 ) 4,925 |
Condensed Consolidating Statement of Cash Flows | For the nine months ended September 30, 2019 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Adjustments Consolidated $ $ $ $ $ Operating activities Net earnings 118 164 116 (280 ) 118 Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings (20 ) (122 ) 26 280 164 Cash flows from operating activities 98 42 142 — 282 Investing activities Additions to property, plant and equipment — (92 ) (65 ) — (157 ) Proceeds from disposals of property, plant and equipment — 1 — — 1 Cash flows used for investing activities — (91 ) (65 ) — (156 ) Financing activities Dividend payments (83 ) — — — (83 ) Stock repurchase (139 ) — — — (139 ) Net change in bank indebtedness 5 1 1 (5 ) 2 Change in revolving credit facility 45 — — — 45 Proceeds from receivables securitization facility — — 150 — 150 Repayments of receivables securitization facility — — (110 ) — (110 ) Repayments of long-term debt — — (1 ) — (1 ) Increase in long-term advances to related parties — — (127 ) 127 — Decrease in long-term advances to related parties 75 52 — (127 ) — Other (1 ) — — — (1 ) Cash flows (used for) provided from financing activities (98 ) 53 (87 ) (5 ) (137 ) Net increase (decrease) in cash and cash equivalents — 4 (10 ) (5 ) (11 ) Impact of foreign exchange on cash — — (2 ) — (2 ) Cash and cash equivalents at beginning of period — — 111 — 111 Cash and cash equivalents at end of period — 4 99 (5 ) 98 For the nine months ended September 30, 2018 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Adjustments Consolidated $ $ $ $ $ Operating activities Net earnings 196 235 130 (365 ) 196 Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings (376 ) 202 (50 ) 365 141 Cash flows (used for) provided from operating activities (180 ) 437 80 — 337 Investing activities Additions to property, plant and equipment — (73 ) (38 ) — (111 ) Proceeds from disposals of property, plant and equipment — — 4 — 4 Other — (2 ) (4 ) — (6 ) Cash flows used for investing activities — (75 ) (38 ) — (113 ) Financing activities Dividend payments (81 ) — — — (81 ) Repayments of receivables securitization facility — — (25 ) — (25 ) Increase in long-term advances to related parties — (368 ) (61 ) 429 — Decrease in long-term advances to related parties 429 — — (429 ) — Other 1 — — — 1 Cash flows provided from (used for) financing activities 349 (368 ) (86 ) — (105 ) Net increase (decrease) in cash and cash equivalents 169 (6 ) (44 ) — 119 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 172 8 76 — 256 |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements - Additional Information (Detail) - USD ($) | Jan. 01, 2019 | Sep. 30, 2019 | Dec. 31, 2017 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Statutory income tax rate | 21.00% | 35.00% | |
ASU 2016-02 [Member] | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Cumulative-effect adjustments to retained earnings | $ 0 |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities and Fair Value Measurement - Additional Information (Detail) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)Customer | Dec. 31, 2018USD ($)Customer | |
Derivative [Line Items] | ||
Number of major customers | Customer | 2 | 1 |
Maximum [Member] | Canadian Subsidiary [Member] | Canadian Dollars [Member] | ||
Derivative [Line Items] | ||
Length of time current hedges cover | 24 months | |
Forecasted Natural Gas and Oil Purchases [Member] | Maximum [Member] | ||
Derivative [Line Items] | ||
Length of time current hedges cover | 51 months | |
Foreign Currency Investment [Member] | ||
Derivative [Line Items] | ||
Length of time current hedges cover | 3 years | |
Natural Gas Swap Contracts [Member] | ||
Derivative [Line Items] | ||
Cumulative (loss) gain recorded in accumulated other comprehensive loss | $ (14) | |
Natural Gas Swap Contracts [Member] | Cost of Sale [Member] | ||
Derivative [Line Items] | ||
Cumulative (loss) gain recorded in accumulated other comprehensive loss will be recognized upon maturity of derivatives | (7) | |
Currency Derivatives [Member] | ||
Derivative [Line Items] | ||
Cumulative (loss) gain recorded in accumulated other comprehensive loss | (8) | |
Currency Derivatives [Member] | Cost of Sale [Member] | ||
Derivative [Line Items] | ||
Cumulative (loss) gain recorded in accumulated other comprehensive loss | (6) | |
Pulp and Paper Segment Customer One [Member] | ||
Derivative [Line Items] | ||
Receivables from major customers | 87 | $ 67 |
Pulp and Paper Segment Customer Two [Member] | ||
Derivative [Line Items] | ||
Receivables from major customers | $ 70 | |
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 | 14.00% | 10.00% |
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 Activ_4
Derivatives and Hedging Activities and Fair Value Measurement - Derivative Financial Instruments for Natural Gas Contracts Outstanding (Detail) | Sep. 30, 2019USD ($)MMBTU |
2019 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | MMBTU | 3,915,000 |
Notional contractual value under derivative contracts | $ | $ 12,000,000 |
Percentage of forecasted purchases under derivative contracts | 53.00% |
2020 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | MMBTU | 11,165,000 |
Notional contractual value under derivative contracts | $ | $ 34,000,000 |
Percentage of forecasted purchases under derivative contracts | 40.00% |
2021 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | MMBTU | 9,270,000 |
Notional contractual value under derivative contracts | $ | $ 27,000,000 |
Percentage of forecasted purchases under derivative contracts | 33.00% |
2022 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | MMBTU | 9,270,000 |
Notional contractual value under derivative contracts | $ | $ 25,000,000 |
Percentage of forecasted purchases under derivative contracts | 33.00% |
2023 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | MMBTU | 4,210,000 |
Notional contractual value under derivative contracts | $ | $ 11,000,000 |
Percentage of forecasted purchases under derivative contracts | 15.00% |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activities and Fair Value Measurement - Currency Values under Significant Currency Positions Pursuant to Currency Derivatives Outstanding (Detail) - Long [Member] - Pulp and Paper [Member] | 9 Months Ended |
Sep. 30, 2019CAD ($) | |
CAD/USD Denominated Notional Contractual Value For 2019 [Member] | |
Derivative [Line Items] | |
Notional contractual value | $ 174,000,000 |
Percentage of forecasted net exposures under contracts | 77.00% |
Currency exposure hedged, Average Protection rate | 1.2945 |
Currency exposure hedged, Average Obligation rate | 1.3152 |
CAD/USD Denominated Notional Contractual Value For 2020 [Member] | |
Derivative [Line Items] | |
Notional contractual value | $ 557,000,000 |
Percentage of forecasted net exposures under contracts | 62.00% |
Currency exposure hedged, Average Protection rate | 1.2966 |
Currency exposure hedged, Average Obligation rate | 1.3155 |
CAD/USD Denominated Notional Contractual Value For 2021 [Member] | |
Derivative [Line Items] | |
Notional contractual value | $ 237,000,000 |
Percentage of forecasted net exposures under contracts | 26.00% |
Currency exposure hedged, Average Protection rate | 1.3185 |
Currency exposure hedged, Average Obligation rate | 1.3185 |
Derivatives and Hedging Activ_6
Derivatives and Hedging Activities and Fair Value Measurement - Fair Value of Financial Instruments (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Derivative [Line Items] | ||
Total Assets | $ 2 | $ 2 |
Total Liabilities | 24 | 37 |
Long-term debt | 960 | 858 |
Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Stock-based compensation - liability awards | 6 | 6 |
Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Stock-based compensation - liability awards | 16 | 17 |
Currency Derivatives [Member] | Prepaid Expenses [Member] | ||
Derivative [Line Items] | ||
Total Assets | 2 | 1 |
Currency Derivatives [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 8 | 19 |
Currency Derivatives [Member] | Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 2 | 11 |
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 | 7 | 2 |
Natural Gas Swap Contracts [Member] | Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 7 | 5 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Stock-based compensation - liability awards | 6 | 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 | 16 | 17 |
Significant Observable Inputs (Level 2) [Member] | ||
Derivative [Line Items] | ||
Total Assets | 2 | 2 |
Total Liabilities | 24 | 37 |
Long-term debt | 960 | 858 |
Significant Observable Inputs (Level 2) [Member] | Currency Derivatives [Member] | Prepaid Expenses [Member] | ||
Derivative [Line Items] | ||
Total Assets | 2 | 1 |
Significant Observable Inputs (Level 2) [Member] | Currency Derivatives [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 8 | 19 |
Significant Observable Inputs (Level 2) [Member] | Currency Derivatives [Member] | Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 2 | 11 |
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 | 7 | 2 |
Significant Observable Inputs (Level 2) [Member] | Natural Gas Swap Contracts [Member] | Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | $ 7 | $ 5 |
Derivatives and Hedging Activ_7
Derivatives and Hedging Activities and Fair Value Measurement - Fair Value of Financial Instruments (Parenthetical) (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ||
The carrying value of the Company's long-term debt | $ 939 | $ 854 |
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 | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Net earnings | $ 20 | $ 99 | $ 118 | $ 196 |
Weighted average number of common shares outstanding (millions) | 61.5 | 62.9 | 62.5 | 62.8 |
Effect of dilutive securities (millions) | 0.2 | 0.3 | 0.2 | 0.3 |
Weighted average number of diluted common shares outstanding (millions) | 61.7 | 63.2 | 62.7 | 63.1 |
Basic net earnings per common share (in dollars) | $ 0.33 | $ 1.57 | $ 1.89 | $ 3.12 |
Diluted net earnings per common share (in dollars) | $ 0.32 | $ 1.57 | $ 1.88 | $ 3.11 |
Earnings Per Common Share - Sec
Earnings Per Common Share - Securities that Could Potentially Dilute Basic Earnings Per Common Share in Future (Detail) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Options [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Options to purchase common shares | 398,869 | 201,599 | 325,757 | 201,599 |
Pension Plans and Other Post-_3
Pension Plans and Other Post-Retirement Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||
Pension expense | $ 10 | $ 18 | $ 33 | $ 40 |
Pension Plans [Member] | ||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||
Plan contributions | 7 | 48 | 14 | 55 |
Other Post-Retirement Benefit Plans [Member] | ||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||
Plan contributions | $ 1 | $ 1 | $ 3 | $ 3 |
Pension Plans and Other Post-_4
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 | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Pension Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 6 | $ 8 | $ 21 | $ 25 |
Interest expense | 14 | 14 | 41 | 41 |
Expected return on plan assets | (19) | (22) | (59) | (65) |
Amortization of net actuarial loss (gain) | 2 | 2 | 7 | 6 |
Amortization of prior year service costs | 1 | 1 | 4 | 4 |
Net periodic benefit cost | $ 4 | 3 | 14 | 11 |
Other Post-Retirement Benefit Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1 | 1 | ||
Interest expense | 1 | 1 | 2 | |
Amortization of net actuarial loss (gain) | (1) | |||
Amortization of prior year service costs | (1) | |||
Net periodic benefit cost | $ 1 | $ 1 | $ 2 |
Other Operating Loss (Income)_3
Other Operating Loss (Income), Net - Components of Other Operating Loss (Income), Net (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Other Income And Expenses [Abstract] | ||||
Gain on sale of property, plant and equipment | $ (4) | |||
Bad debt expense | $ 1 | $ 2 | 1 | |
Environmental provision | 1 | $ 2 | 2 | 2 |
Foreign exchange loss (gain) | 1 | 2 | 3 | (1) |
Other | (3) | (1) | ||
Other operating loss (income), net | $ 3 | $ 4 | $ 4 | $ (3) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ (1) | $ 3 | $ 28 | $ 22 |
Current income tax expense (benefit) | (3) | (5) | 27 | 19 |
Deferred income tax expense (benefit) | $ 2 | $ 8 | $ 1 | $ 3 |
Effective income tax rate | (5.00%) | 3.00% | 19.00% | 10.00% |
Income tax payments, net of refunds | $ 5 | $ 55 | $ 40 |
Inventories - Components of Inv
Inventories - Components of Inventories (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Work in process and finished goods | $ 423 | $ 410 |
Raw materials | 143 | 126 |
Operating and maintenance supplies | 232 | 226 |
Total inventories | $ 798 | $ 762 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Lessee Lease Description [Line Items] | |||||
Leases, terminable lease term | 1 year | ||||
Impairment of operating lease right-of-use assets | $ 9 | ||||
Operating lease expense | $ 8 | $ 8 | $ 22 | $ 22 | |
Office Space and Manufacturing Equipment [Member] | |||||
Lessee Lease Description [Line Items] | |||||
Operating leases, lease not yet commenced, amount | $ 3 | $ 3 | |||
Operating leases, lease not yet commenced, beginning year of commencement | 2019 | ||||
Operating leases, lease not yet commenced, ending year of commencement | 2020 | ||||
Minimum [Member] | |||||
Lessee Lease Description [Line Items] | |||||
Leases, remaining lease term | 1 year | ||||
Minimum [Member] | Office Space and Manufacturing Equipment [Member] | |||||
Lessee Lease Description [Line Items] | |||||
Operating leases, lease not yet commenced, terms | 3 years | 3 years | |||
Maximum [Member] | |||||
Lessee Lease Description [Line Items] | |||||
Leases, remaining lease term | 14 years | ||||
Leases, extendable lease term | 10 years | ||||
Maximum [Member] | Office Space and Manufacturing Equipment [Member] | |||||
Lessee Lease Description [Line Items] | |||||
Operating leases, lease not yet commenced, terms | 5 years | 5 years |
Leases - Summary of Components
Leases - Summary of Components of Lease Expense (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Leases [Abstract] | ||||
Operating lease expense | $ 8 | $ 8 | $ 22 | $ 22 |
Finance lease expense: | ||||
Amortization of right-of-use assets | 1 | 1 | ||
Total finance lease expense | $ 1 | $ 1 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related To Leases (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 23 |
Operating cash flows from finance leases | 1 |
Financing cash flows from finance leases | 1 |
Right-of-use assets obtained in exchange for lease liabilities: | |
Operating leases | $ 24 |
Leases - Summary of Supplemen_2
Leases - Summary of Supplemental Balance Sheet Information Related to Leases (Detail) $ in Millions | Sep. 30, 2019USD ($) |
Operating leases | |
Operating leases right-of-use assets | $ 77 |
Lease liabilities due within one year | 26 |
Operating lease liabilities | 68 |
Operating lease liabilities, total | 94 |
Finance leases | |
Property, plant and equipment | 14 |
Accumulated depreciation | (6) |
Property, plant and equipment, net | $ 8 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentNet |
Long-term debt due within one year | $ 1 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent |
Long-term debt | $ 9 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtAndCapitalLeaseObligations |
Finance leases liabilities, total | $ 10 |
Weighted-average remaining lease term | |
Operating leases | 5 years |
Finance leases | 10 years 2 months 12 days |
Weighted-average discount rate | |
Operating leases | 4.50% |
Finance leases | 6.70% |
Leases - Summary of Maturities
Leases - Summary of Maturities of Lease Liabilities (Detail) $ in Millions | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Operating leases, 2019 | $ 8 |
Operating leases, 2020 | 26 |
Operating leases, 2021 | 22 |
Operating leases, 2022 | 16 |
Operating leases, 2023 | 12 |
Operating leases, Thereafter | 22 |
Operating leases, Total lease payments | 106 |
Operating leases, Imputed interest | 12 |
Operating leases, Total lease liabilities | 94 |
Finance leases, 2020 | 2 |
Finance leases, 2021 | 2 |
Finance leases, 2022 | 2 |
Finance leases, 2023 | 1 |
Finance leases, Thereafter | 7 |
Finance leases, Total lease payments | 14 |
Finance leases, Imputed interest | 4 |
Finance leases, Total lease liabilities | $ 10 |
Leases - Summary of Maturitie_2
Leases - Summary of Maturities of Lease Commitments (Detail) $ in Millions | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
Operating leases, 2019 | $ 26 |
Operating leases, 2020 | 21 |
Operating leases, 2021 | 17 |
Operating leases, 2022 | 12 |
Operating leases, 2023 | 10 |
Thereafter | 17 |
Operating leases, Total | 103 |
Capital leases, 2019 | 2 |
Capital leases, 2020 | 2 |
Capital leases, 2021 | 2 |
Capital leases, 2022 | 1 |
Capital leases,2023 | 1 |
Thereafter | 7 |
Capital leases, Total | 15 |
Capital leases, Imputed interest | 4 |
Total lease liabilities | $ 11 |
Intangible Assets - Components
Intangible Assets - Components of Intangible Assets (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Intangible Assets Excluding Goodwill [Line Items] | ||
Definite-lived intangible assets subject to amortization, gross carrying amount | $ 416 | $ 424 |
Accumulated amortization | (125) | (113) |
Intangible assets, net | 291 | 311 |
Total, Gross carrying amount | 693 | 710 |
Intangible assets, net of amortization | 568 | 597 |
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 | 230 | 238 |
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 | $ 37 | 38 |
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 | 375 | 384 |
Accumulated amortization | (103) | (94) |
Intangible assets, net | $ 272 | 290 |
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 | (5) | (4) |
Intangible assets, net | $ 3 | 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 | $ 29 | 28 |
Accumulated amortization | (15) | (13) |
Intangible assets, net | $ 14 | $ 15 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 5 | $ 4 | $ 14 | $ 14 |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Expense Related to Intangible Assets (Detail) $ in Millions | Sep. 30, 2019USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
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 | 20 |
Amortization expense related to intangible assets, 2023 | $ 20 |
Closure and Restructuring Cos_2
Closure and Restructuring Costs and Impairment of Long-lived Assets - Additional Information (Detail) $ in Millions | Oct. 03, 2019MachineTt | Sep. 27, 2019MachineEmployeeT | Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) |
Restructuring Cost And Reserve [Line Items] | ||||
Severance and termination costs | $ 11 | $ 23 | ||
Ashdown, Arkansas Mill and Port Huron, Michigan Mill [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Number of closed paper machines | Machine | 2 | |||
Reduction of annual uncoated freesheet paper capacity | T | 204,000 | |||
Expected workforce reduction | Employee | 100 | |||
Accelerated depreciation | 32 | |||
Severance and termination costs | 1 | |||
Inventory obsolescence | 4 | |||
Ashdown, Arkansas Mill [Member] | Subsequent Event [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Number of operating paper machine | Machine | 1 | |||
Annual production capacity of operating paper machine | T | 200,000 | |||
Incremental production of air-dried metric ton of softwood and fluff pulp | t | 70,000 | |||
Port Huron, Michigan Mill [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Number of operating paper machine | Machine | 3 | |||
Annual production capacity of operating paper machine | T | 95,000 | |||
Waco, Texas Facility [Member] | Personal Care [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Accelerated depreciation | 1 | |||
Severance and termination costs | 1 | 5 | ||
Inventory obsolescence | 1 | 2 | ||
Accelerated depreciation and impairment of operating lease right-of-use assets | 26 | |||
Relocation and other costs | $ 4 | $ 11 |
Changes in Accumulated Other _3
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 | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning balance | $ (467) | ||||
Other comprehensive (loss) income before reclassifications | (7) | $ (138) | |||
Amounts reclassified from Accumulated other comprehensive loss | 12 | 7 | |||
Other comprehensive (loss) income | $ (38) | $ 21 | 5 | $ (54) | (131) |
Ending balance | (462) | (462) | (467) | ||
Balance | 2,619 | 2,458 | 2,538 | 2,483 | 2,483 |
Balance | 2,439 | 2,553 | 2,439 | 2,553 | 2,538 |
Natural Gas Swap Contracts [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (8) | 1 | |||
Currency Options [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | 4 | (12) | |||
Foreign Exchange Forward Contracts [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | 9 | (19) | |||
Foreign Currency Items [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (12) | (91) | |||
Net (Gain) Loss [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (17) | ||||
Net Derivative (Losses) Gains on Cash Flow Hedges [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning balance | (24) | 8 | 8 | ||
Other comprehensive (loss) income before reclassifications | 5 | (30) | |||
Amounts reclassified from Accumulated other comprehensive loss | 5 | (2) | |||
Other comprehensive (loss) income | 10 | (32) | |||
Ending balance | (14) | (14) | (24) | ||
Net Derivative (Losses) Gains on Cash Flow Hedges [Member] | Natural Gas Swap Contracts [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (8) | 1 | |||
Net Derivative (Losses) Gains on Cash Flow Hedges [Member] | Currency Options [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | 4 | (12) | |||
Net Derivative (Losses) Gains on Cash Flow Hedges [Member] | Foreign Exchange Forward Contracts [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | 9 | (19) | |||
Accumulated Defined Benefit Plans Adjustment [Member] | Pension Plans [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning balance | (231) | (218) | (218) | ||
Other comprehensive (loss) income before reclassifications | (23) | ||||
Amounts reclassified from Accumulated other comprehensive loss | 8 | 10 | |||
Other comprehensive (loss) income | 8 | (13) | |||
Ending balance | (223) | (223) | (231) | ||
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 | (23) | ||||
Accumulated Defined Benefit Plans Adjustment [Member] | Other Post-Retirement Benefit Plans [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning balance | 11 | 6 | 6 | ||
Other comprehensive (loss) income before reclassifications | 6 | ||||
Amounts reclassified from Accumulated other comprehensive loss | (1) | (1) | |||
Other comprehensive (loss) income | (1) | 5 | |||
Ending balance | 10 | 10 | 11 | ||
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 | 6 | ||||
Foreign Currency Items [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning balance | (223) | (132) | (132) | ||
Other comprehensive (loss) income before reclassifications | (12) | (91) | |||
Other comprehensive (loss) income | (12) | (91) | |||
Ending balance | (235) | (235) | (223) | ||
Foreign Currency Items [Member] | Foreign Currency Items [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (12) | (91) | |||
Accumulated Other Comprehensive Loss [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance | (424) | (411) | (467) | (336) | (336) |
Balance | $ (462) | $ (390) | $ (462) | $ (390) | $ (467) |
Changes in Accumulated Other _4
Changes in Accumulated Other Comprehensive Loss by Component - Schedule of Reclassifications Out of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Earnings before income taxes and equity loss | $ 19 | $ 103 | $ 147 | $ 219 |
Tax (expense) benefit | 1 | (3) | (28) | (22) |
Net earnings | 20 | 99 | 118 | 196 |
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Net Derivative Gains (Losses) on Cash Flow Hedge [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Earnings before income taxes and equity loss | 4 | 1 | 7 | (2) |
Tax (expense) benefit | (1) | (1) | (2) | |
Net earnings | 3 | 5 | (2) | |
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Net Derivative Gains (Losses) on Cash Flow Hedge [Member] | Natural Gas Swap Contracts [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of Sales | 2 | 2 | ||
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Net Derivative Gains (Losses) on Cash Flow Hedge [Member] | Currency Options and Forwards [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of Sales | 2 | 1 | 5 | (2) |
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 | 7 | 6 |
Amortization of prior year service cost | 1 | 1 | 4 | 4 |
Earnings before income taxes and equity loss | 3 | 3 | 11 | 10 |
Tax (expense) benefit | (1) | (1) | (3) | (3) |
Net earnings | $ 2 | $ 2 | 8 | 7 |
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 net actuarial loss | (1) | |||
Amortization of prior year service cost | (1) | |||
Earnings before income taxes and equity loss | (1) | (1) | ||
Net earnings | $ (1) | $ (1) |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) | Nov. 05, 2019 | Oct. 15, 2019 | Aug. 06, 2019 | Jul. 16, 2019 | May 08, 2019 | Apr. 15, 2019 | Feb. 19, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 |
Shareholders' Equity [Line Items] | ||||||||||
Dividend per share | $ 0.455 | $ 0.455 | $ 0.435 | |||||||
Record date | Oct. 2, 2019 | Jul. 2, 2019 | Apr. 2, 2019 | |||||||
Declared date | Aug. 6, 2019 | May 8, 2019 | Feb. 19, 2019 | |||||||
Dividends paid | $ 28,000,000 | $ 28,000,000 | ||||||||
Payment date | Oct. 15, 2019 | Jul. 16, 2019 | Apr. 15, 2019 | |||||||
Stock repurchase program, remaining authorized repurchase amount | $ 178,000,000 | $ 178,000,000 | ||||||||
Stock repurchased, shares | 4,076,723 | 0 | ||||||||
Stock repurchased, average price | $ 35.47 | |||||||||
Stock repurchased, value | 137,000,000 | $ 145,000,000 | ||||||||
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 | $ 0.455 | |||||||||
Record date | Jan. 2, 2020 | |||||||||
Declared date | Nov. 5, 2019 | |||||||||
Dividends paid | $ 27,000,000 | |||||||||
Payment date | Jan. 15, 2020 | |||||||||
Subsequent Event [Member] | Maximum [Member] | ||||||||||
Shareholders' Equity [Line Items] | ||||||||||
Stock repurchase program authorized amount | $ 1,600,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Changes in Reserve for Environmental Remediation and Asset Retirement Obligations (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |
Balance at beginning of year | $ 37 |
Additions and other changes | 3 |
Environmental spending | (5) |
Balance at end of period | $ 35 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
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) | 9 Months Ended |
Sep. 30, 2019Segment | |
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 | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 1,283 | $ 1,367 | $ 3,976 | $ 4,065 |
Depreciation and amortization | 72 | 75 | 219 | 233 |
Impairment of long-lived assets | 33 | 58 | ||
Consolidated depreciation and amortization and impairment of long-lived assets | 105 | 75 | 277 | 233 |
Operating income (loss) | 29 | 114 | 178 | 253 |
Interest expense, net | 12 | 15 | 38 | 47 |
Non-service components of net periodic benefit cost | (2) | (4) | (7) | (13) |
Earnings before income taxes and equity loss | 19 | 103 | 147 | 219 |
Income tax (benefit) expense (NOTE 7) | (1) | 3 | 28 | 22 |
Equity loss, net of taxes | 1 | 1 | 1 | |
Net earnings | 20 | 99 | 118 | 196 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,298 | 1,383 | 4,025 | 4,115 |
Depreciation and amortization | 72 | 75 | 219 | 233 |
Operating Segments [Member] | Communication Paper [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 635 | 639 | 1,963 | 1,904 |
Operating Segments [Member] | Specialty and Packaging Paper [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 159 | 181 | 490 | 536 |
Operating Segments [Member] | Market Pulp [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 262 | 310 | 812 | 879 |
Operating Segments [Member] | Absorbent Hygiene Products [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 227 | 237 | 711 | 746 |
Operating Segments [Member] | Pulp and Paper [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,071 | 1,146 | 3,314 | 3,369 |
Depreciation and amortization | 56 | 58 | 171 | 180 |
Impairment of long-lived assets | 32 | 32 | ||
Operating income (loss) | 31 | 135 | 237 | 290 |
Operating Segments [Member] | Personal Care [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 227 | 237 | 711 | 746 |
Depreciation and amortization | 16 | 17 | 48 | 53 |
Impairment of long-lived assets | 1 | 26 | ||
Operating income (loss) | 2 | (3) | (24) | 7 |
Intersegment Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | (15) | (16) | (49) | (50) |
Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | $ (4) | $ (18) | $ (35) | $ (44) |
Supplemental Guarantor Financ_3
Supplemental Guarantor Financial Information - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Condensed Financial Statements Captions [Line Items] | |||
Increase (decrease) In receivables | $ (50) | $ 7 | |
Guarantor Subsidiaries [Member] | |||
Condensed Financial Statements Captions [Line Items] | |||
Ownership percentage | 100.00% | ||
Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member] | |||
Condensed Financial Statements Captions [Line Items] | |||
Increase (decrease) In receivables | $ (198) | ||
Non-Guarantor Subsidiaries [Member] | |||
Condensed Financial Statements Captions [Line Items] | |||
Ownership percentage | 100.00% | ||
Non-Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member] | |||
Condensed Financial Statements Captions [Line Items] | |||
Increase (decrease) In receivables | $ 198 |
Supplemental Guarantor Financ_4
Supplemental Guarantor Financial Information - Condensed Consolidating Statement of Earnings and Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Condensed Income Statements Captions [Line Items] | |||||
Sales | $ 1,283 | $ 1,367 | $ 3,976 | $ 4,065 | |
Operating expenses | |||||
Cost of sales, excluding depreciation and amortization | 1,041 | 1,059 | 3,172 | 3,239 | |
Depreciation and amortization | 72 | 75 | 219 | 233 | |
Selling, general and administrative | 94 | 115 | 322 | 343 | |
Impairment of long-lived assets | 33 | 58 | |||
Closure and restructuring costs | 11 | 23 | |||
Other operating (income) loss, net | 3 | 4 | 4 | (3) | |
Operating expenses | 1,254 | 1,253 | 3,798 | 3,812 | |
Operating income | 29 | 114 | 178 | 253 | |
Interest expense (income), net | 12 | 15 | 38 | 47 | |
Non-service components of net periodic benefit cost | (2) | (4) | (7) | (13) | |
Earnings before income taxes and equity loss | 19 | 103 | 147 | 219 | |
Income tax expense (benefit) | (1) | 3 | 28 | 22 | |
Equity loss, net of taxes | 1 | 1 | 1 | ||
Net earnings | 20 | 99 | 118 | 196 | |
Other comprehensive income (loss) | (38) | 21 | 5 | (54) | $ (131) |
Comprehensive (loss) income | (18) | 120 | 123 | 142 | |
Reportable Legal Entities [Member] | Parent [Member] | |||||
Operating expenses | |||||
Selling, general and administrative | 4 | 7 | 11 | ||
Operating expenses | 4 | 7 | 11 | ||
Operating income | (4) | (7) | (11) | ||
Interest expense (income), net | 18 | 15 | 52 | 47 | |
Earnings before income taxes and equity loss | (18) | (19) | (59) | (58) | |
Income tax expense (benefit) | (4) | (11) | (13) | (19) | |
Share in earnings of equity accounted investees | 34 | 107 | 164 | 235 | |
Net earnings | 20 | 99 | 118 | 196 | |
Other comprehensive income (loss) | (38) | 21 | 5 | (54) | |
Comprehensive (loss) income | (18) | 120 | 123 | 142 | |
Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member] | |||||
Condensed Income Statements Captions [Line Items] | |||||
Sales | 1,060 | 1,115 | 3,268 | 3,287 | |
Operating expenses | |||||
Cost of sales, excluding depreciation and amortization | 891 | 954 | 2,746 | 2,840 | |
Depreciation and amortization | 51 | 53 | 155 | 164 | |
Selling, general and administrative | 59 | 31 | 170 | 99 | |
Impairment of long-lived assets | 33 | 58 | |||
Closure and restructuring costs | 11 | 21 | |||
Other operating (income) loss, net | 1 | (1) | (3) | (2) | |
Operating expenses | 1,046 | 1,037 | 3,147 | 3,101 | |
Operating income | 14 | 78 | 121 | 186 | |
Interest expense (income), net | 18 | 23 | 60 | 68 | |
Non-service components of net periodic benefit cost | 1 | 1 | 1 | 1 | |
Earnings before income taxes and equity loss | (5) | 54 | 60 | 117 | |
Income tax expense (benefit) | (2) | 12 | 12 | ||
Share in earnings of equity accounted investees | 37 | 53 | 116 | 130 | |
Net earnings | 34 | 107 | 164 | 235 | |
Other comprehensive income (loss) | (37) | 21 | 11 | (54) | |
Comprehensive (loss) income | (3) | 128 | 175 | 181 | |
Reportable Legal Entities [Member] | Non-Guarantor Subsidiaries [Member] | |||||
Condensed Income Statements Captions [Line Items] | |||||
Sales | 459 | 559 | 1,478 | 1,671 | |
Operating expenses | |||||
Cost of sales, excluding depreciation and amortization | 386 | 412 | 1,196 | 1,292 | |
Depreciation and amortization | 21 | 22 | 64 | 69 | |
Selling, general and administrative | 35 | 80 | 145 | 233 | |
Closure and restructuring costs | 2 | ||||
Other operating (income) loss, net | 2 | 5 | 7 | (1) | |
Operating expenses | 444 | 519 | 1,414 | 1,593 | |
Operating income | 15 | 40 | 64 | 78 | |
Interest expense (income), net | (24) | (23) | (74) | (68) | |
Non-service components of net periodic benefit cost | (3) | (5) | (8) | (14) | |
Earnings before income taxes and equity loss | 42 | 68 | 146 | 160 | |
Income tax expense (benefit) | 5 | 14 | 29 | 29 | |
Equity loss, net of taxes | 1 | 1 | 1 | ||
Net earnings | 37 | 53 | 116 | 130 | |
Other comprehensive income (loss) | (33) | 13 | (8) | (47) | |
Comprehensive (loss) income | 4 | 66 | 108 | 83 | |
Consolidating Adjustments [Member] | |||||
Condensed Income Statements Captions [Line Items] | |||||
Sales | (236) | (307) | (770) | (893) | |
Operating expenses | |||||
Cost of sales, excluding depreciation and amortization | (236) | (307) | (770) | (893) | |
Operating expenses | (236) | (307) | (770) | (893) | |
Share in earnings of equity accounted investees | (71) | (160) | (280) | (365) | |
Net earnings | (71) | (160) | (280) | (365) | |
Other comprehensive income (loss) | 70 | (34) | (3) | 101 | |
Comprehensive (loss) income | $ (1) | $ (194) | $ (283) | $ (264) |
Supplemental Guarantor Financ_5
Supplemental Guarantor Financial Information - Condensed Consolidating Balance Sheet (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets | ||||||
Cash and cash equivalents | $ 98 | $ 111 | ||||
Receivables | 618 | 670 | ||||
Inventories | 798 | 762 | ||||
Prepaid expenses | 33 | 24 | ||||
Income and other taxes receivable | 53 | 22 | ||||
Total current assets | 1,600 | 1,589 | ||||
Property, plant and equipment, net | 2,499 | 2,605 | ||||
Operating lease right-of-use assets | 77 | |||||
Intangible assets, net | 568 | 597 | ||||
Other assets | 140 | 134 | ||||
Total assets | 4,884 | 4,925 | ||||
Current liabilities | ||||||
Bank indebtedness | 1 | |||||
Trade and other payables | 646 | 757 | ||||
Income and other taxes payable | 28 | 25 | ||||
Operating lease liabilities due within one year | 26 | |||||
Long-term debt due within one year | 1 | 1 | ||||
Total current liabilities | 702 | 783 | ||||
Long-term debt | 938 | 853 | ||||
Operating lease liabilities | 68 | |||||
Deferred income taxes and other | 479 | 476 | ||||
Other liabilities and deferred credits | 258 | 275 | ||||
Shareholders' equity | 2,439 | $ 2,619 | 2,538 | $ 2,553 | $ 2,458 | $ 2,483 |
Total liabilities and shareholders' equity | 4,884 | 4,925 | ||||
Reportable Legal Entities [Member] | Parent [Member] | ||||||
Current assets | ||||||
Prepaid expenses | 9 | 6 | ||||
Income and other taxes receivable | 59 | 1 | ||||
Intercompany accounts | 436 | 498 | ||||
Total current assets | 504 | 505 | ||||
Investments in affiliates | 3,821 | 3,645 | ||||
Intercompany long-term advances | 5 | 5 | ||||
Other assets | 20 | 18 | ||||
Total assets | 4,350 | 4,173 | ||||
Current liabilities | ||||||
Bank indebtedness | 5 | |||||
Trade and other payables | 58 | 52 | ||||
Intercompany accounts | 245 | 125 | ||||
Income and other taxes payable | 2 | 1 | ||||
Total current liabilities | 310 | 178 | ||||
Long-term debt | 838 | 793 | ||||
Intercompany long-term loans | 733 | 636 | ||||
Other liabilities and deferred credits | 30 | 28 | ||||
Shareholders' equity | 2,439 | 2,538 | ||||
Total liabilities and shareholders' equity | 4,350 | 4,173 | ||||
Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member] | ||||||
Current assets | ||||||
Cash and cash equivalents | 4 | |||||
Receivables | 148 | 146 | ||||
Inventories | 555 | 525 | ||||
Prepaid expenses | 15 | 12 | ||||
Income and other taxes receivable | 12 | 3 | ||||
Intercompany accounts | 465 | 392 | ||||
Total current assets | 1,199 | 1,078 | ||||
Property, plant and equipment, net | 1,693 | 1,802 | ||||
Operating lease right-of-use assets | 63 | |||||
Intangible assets, net | 248 | 256 | ||||
Investments in affiliates | 2,705 | 2,611 | ||||
Intercompany long-term advances | 1 | 1 | ||||
Other assets | 35 | 26 | ||||
Total assets | 5,944 | 5,774 | ||||
Current liabilities | ||||||
Bank indebtedness | 1 | |||||
Trade and other payables | 371 | 464 | ||||
Intercompany accounts | 222 | 264 | ||||
Income and other taxes payable | 45 | 12 | ||||
Operating lease liabilities due within one year | 20 | |||||
Total current liabilities | 659 | 740 | ||||
Operating lease liabilities | 59 | |||||
Intercompany long-term loans | 956 | 938 | ||||
Deferred income taxes and other | 351 | 335 | ||||
Other liabilities and deferred credits | 98 | 116 | ||||
Shareholders' equity | 3,821 | 3,645 | ||||
Total liabilities and shareholders' equity | 5,944 | 5,774 | ||||
Reportable Legal Entities [Member] | Non-Guarantor Subsidiaries [Member] | ||||||
Current assets | ||||||
Cash and cash equivalents | 99 | 111 | ||||
Receivables | 470 | 524 | ||||
Inventories | 243 | 237 | ||||
Prepaid expenses | 9 | 6 | ||||
Income and other taxes receivable | 27 | 18 | ||||
Intercompany accounts | 155 | 35 | ||||
Total current assets | 1,003 | 931 | ||||
Property, plant and equipment, net | 806 | 803 | ||||
Operating lease right-of-use assets | 14 | |||||
Intangible assets, net | 320 | 341 | ||||
Intercompany long-term advances | 1,684 | 1,569 | ||||
Other assets | 113 | 104 | ||||
Total assets | 3,940 | 3,748 | ||||
Current liabilities | ||||||
Trade and other payables | 217 | 241 | ||||
Intercompany accounts | 589 | 536 | ||||
Income and other taxes payable | 26 | 12 | ||||
Operating lease liabilities due within one year | 6 | |||||
Long-term debt due within one year | 1 | 1 | ||||
Total current liabilities | 839 | 790 | ||||
Long-term debt | 100 | 60 | ||||
Operating lease liabilities | 9 | |||||
Intercompany long-term loans | 1 | 1 | ||||
Deferred income taxes and other | 156 | 155 | ||||
Other liabilities and deferred credits | 130 | 131 | ||||
Shareholders' equity | 2,705 | 2,611 | ||||
Total liabilities and shareholders' equity | 3,940 | 3,748 | ||||
Consolidating Adjustments [Member] | ||||||
Current assets | ||||||
Cash and cash equivalents | (5) | |||||
Income and other taxes receivable | (45) | |||||
Intercompany accounts | (1,056) | (925) | ||||
Total current assets | (1,106) | (925) | ||||
Investments in affiliates | (6,526) | (6,256) | ||||
Intercompany long-term advances | (1,690) | (1,575) | ||||
Other assets | (28) | (14) | ||||
Total assets | (9,350) | (8,770) | ||||
Current liabilities | ||||||
Bank indebtedness | (5) | |||||
Intercompany accounts | (1,056) | (925) | ||||
Income and other taxes payable | (45) | |||||
Total current liabilities | (1,106) | (925) | ||||
Intercompany long-term loans | (1,690) | (1,575) | ||||
Deferred income taxes and other | (28) | (14) | ||||
Shareholders' equity | (6,526) | (6,256) | ||||
Total liabilities and shareholders' equity | $ (9,350) | $ (8,770) |
Supplemental Guarantor Financ_6
Supplemental Guarantor Financial Information - Condensed Consolidating Statement of Cash Flows (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities | ||
Net earnings | $ 118 | $ 196 |
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | 164 | 141 |
Cash flows from operating activities | 282 | 337 |
Investing activities | ||
Additions to property, plant and equipment | (157) | (111) |
Proceeds from disposals of property, plant and equipment | 1 | 4 |
Other | (6) | |
Cash flows used for investing activities | (156) | (113) |
Financing activities | ||
Dividend payments | (83) | (81) |
Stock repurchase | (139) | |
Net change in bank indebtedness | 2 | |
Change in revolving credit facility | 45 | |
Proceeds from receivables securitization facility | 150 | |
Repayments of receivables securitization facility | (110) | (25) |
Repayments of long-term debt | (1) | |
Other | (1) | 1 |
Cash flows used for financing activities | (137) | (105) |
Net (decrease) increase in cash and cash equivalents | (11) | 119 |
Impact of foreign exchange on cash | (2) | (2) |
Cash and cash equivalents at beginning of period | 111 | 139 |
Cash and cash equivalents at end of period | 98 | 256 |
Reportable Legal Entities [Member] | Parent [Member] | ||
Operating activities | ||
Net earnings | 118 | 196 |
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | (20) | (376) |
Cash flows from operating activities | 98 | (180) |
Financing activities | ||
Dividend payments | (83) | (81) |
Stock repurchase | (139) | |
Net change in bank indebtedness | 5 | |
Change in revolving credit facility | 45 | |
Decrease in long-term advances to related parties | 75 | 429 |
Other | (1) | 1 |
Cash flows used for financing activities | (98) | 349 |
Net (decrease) increase in cash and cash equivalents | 169 | |
Cash and cash equivalents at beginning of period | 3 | |
Cash and cash equivalents at end of period | 172 | |
Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member] | ||
Operating activities | ||
Net earnings | 164 | 235 |
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | (122) | 202 |
Cash flows from operating activities | 42 | 437 |
Investing activities | ||
Additions to property, plant and equipment | (92) | (73) |
Proceeds from disposals of property, plant and equipment | 1 | |
Other | (2) | |
Cash flows used for investing activities | (91) | (75) |
Financing activities | ||
Net change in bank indebtedness | 1 | |
Increase in long-term advances to related parties | (368) | |
Decrease in long-term advances to related parties | 52 | |
Cash flows used for financing activities | 53 | (368) |
Net (decrease) increase in cash and cash equivalents | 4 | (6) |
Cash and cash equivalents at beginning of period | 14 | |
Cash and cash equivalents at end of period | 4 | 8 |
Reportable Legal Entities [Member] | Non-Guarantor Subsidiaries [Member] | ||
Operating activities | ||
Net earnings | 116 | 130 |
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | 26 | (50) |
Cash flows from operating activities | 142 | 80 |
Investing activities | ||
Additions to property, plant and equipment | (65) | (38) |
Proceeds from disposals of property, plant and equipment | 4 | |
Other | (4) | |
Cash flows used for investing activities | (65) | (38) |
Financing activities | ||
Net change in bank indebtedness | 1 | |
Proceeds from receivables securitization facility | 150 | |
Repayments of receivables securitization facility | (110) | (25) |
Repayments of long-term debt | (1) | |
Increase in long-term advances to related parties | (127) | (61) |
Cash flows used for financing activities | (87) | (86) |
Net (decrease) increase in cash and cash equivalents | (10) | (44) |
Impact of foreign exchange on cash | (2) | (2) |
Cash and cash equivalents at beginning of period | 111 | 122 |
Cash and cash equivalents at end of period | 99 | 76 |
Consolidating Adjustments [Member] | ||
Operating activities | ||
Net earnings | (280) | (365) |
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | 280 | 365 |
Financing activities | ||
Net change in bank indebtedness | (5) | |
Increase in long-term advances to related parties | 127 | 429 |
Decrease in long-term advances to related parties | (127) | $ (429) |
Cash flows used for financing activities | (5) | |
Net (decrease) increase in cash and cash equivalents | (5) | |
Cash and cash equivalents at end of period | $ (5) |