Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 29, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-33776 | |
Entity Registrant Name | RESOLUTE FOREST PRODUCTS INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 98-0526415 | |
Entity Address, Address Line One | 1010 De La Gauchetière Street West | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City | Montreal | |
Entity Address, Province | QC | |
Entity Address, Country | CA | |
Entity Address, Postal Zip Code | H3B 2N2 | |
City Area Code | 514 | |
Local Phone Number | 875-2160 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | RFP | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 76,796,573 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001393066 | |
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Sales | $ 945 | $ 873 |
Costs and expenses: | ||
Depreciation and amortization | 32 | 41 |
Selling, general and administrative expenses | 36 | 46 |
Closure costs, impairment and other related charges | 4 | 3 |
Net gain on disposition of assets | (1) | 0 |
Operating income | 235 | 177 |
Interest expense | (5) | (6) |
Non-operating pension and other postretirement benefit (costs) credits | (7) | 2 |
Other income (expense), net (Note 3) | 45 | (45) |
Income before income taxes | 268 | 128 |
Income tax provision (Note 11) | (58) | (40) |
Net income including noncontrolling interest | 210 | 88 |
Net income attributable to noncontrolling interest | 0 | (1) |
Net income attributable to Resolute Forest Products Inc. | $ 210 | $ 87 |
Net income per share attributable to Resolute Forest Products Inc. common shareholders (Note 5): | ||
Basic (USD per share) | $ 2.71 | $ 1.07 |
Diluted (USD per share) | $ 2.68 | $ 1.06 |
Weighted-average number of Resolute Forest Products Inc. common shares outstanding: | ||
Basic (shares) | 77.4 | 81.2 |
Diluted (shares) | 78.2 | 81.9 |
Product | ||
Costs and expenses: | ||
Cost of sales, excluding depreciation, amortization and distribution costs | $ 547 | $ 522 |
Distribution costs | ||
Costs and expenses: | ||
Cost of sales, excluding depreciation, amortization and distribution costs | $ 92 | $ 84 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income including noncontrolling interest | $ 210 | $ 88 |
Unamortized prior service costs | ||
Change in unamortized prior service costs (Note 4) | 0 | (1) |
Income tax provision | 0 | 0 |
Change in unamortized prior service costs, net of tax | 0 | (1) |
Unamortized actuarial losses | ||
Change in unamortized actuarial losses (Note 4) | 29 | 49 |
Income tax provision | (4) | (12) |
Change in unamortized actuarial losses, net of tax | 25 | 37 |
Foreign currency translation | 1 | 0 |
Other comprehensive income, net of tax | 26 | 36 |
Comprehensive income including noncontrolling interest | 236 | 124 |
Comprehensive income attributable to noncontrolling interest | 0 | (1) |
Comprehensive income attributable to Resolute Forest Products Inc. | $ 236 | $ 123 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 162 | $ 112 |
Accounts receivable, net: | ||
Trade | 301 | 257 |
Other | 56 | 56 |
Inventories, net (Note 6) | 595 | 510 |
Other current assets | 55 | 54 |
Total current assets | 1,169 | 989 |
#REF! | 1,261 | 1,270 |
#REF! | 56 | 57 |
Goodwill (Note 2) | 104 | 31 |
Deferred income tax assets | 600 | 653 |
Operating lease right-of-use assets | 58 | 54 |
Other assets (Note 7) | 516 | 484 |
Total assets | 3,764 | 3,538 |
Current liabilities: | ||
Accounts payable and other (Note 8) | 442 | 421 |
Current portion of long-term debt (Note 9) | 2 | 2 |
Current portion of operating lease liabilities | 8 | 8 |
Total current liabilities | 452 | 431 |
Long-term debt, net of current portion (Note 9) | 300 | 300 |
Pension and other postretirement benefit obligations | 1,124 | 1,151 |
Operating lease liabilities, net of current portion | 55 | 51 |
Other liabilities | 81 | 88 |
Total liabilities | 2,012 | 2,021 |
Commitments and contingencies (Note 12) | ||
Resolute Forest Products Inc. shareholders’ equity: | ||
#REF! | 0 | 0 |
Additional paid-in capital | 3,808 | 3,807 |
Deficit | (799) | (1,009) |
Accumulated other comprehensive loss (Note 4) | (1,036) | (1,062) |
#REF! | (224) | (222) |
Total Resolute Forest Products Inc. shareholders’ equity | 1,749 | 1,514 |
Noncontrolling interest | 3 | 3 |
Total equity | 1,752 | 1,517 |
Total liabilities and equity | $ 3,764 | $ 3,538 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Millions, $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation on fixed assets | $ 1,783 | $ 1,752 |
Accumulated amortization on intangible assets | $ 38 | $ 37 |
Common stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Common stock issued (shares) | 121.3 | 121.2 |
Common stock outstanding (shares) | 76.8 | 76.8 |
Treasury stock (shares) | 44.5 | 44.4 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Millions | Total | Common Stock | Additional Paid-In Capital | Deficit | Accumulated Other Comprehensive Loss | Treasury Stock | Non-controlling Interest |
Balance at beginning of period at Dec. 31, 2020 | $ 1,082 | $ 0 | $ 3,804 | $ (1,235) | $ (1,314) | $ (174) | $ 1 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation, net of withholding taxes | (2) | (2) | |||||
Net income | 88 | 87 | 1 | ||||
Purchases of treasury stock | (17) | (17) | |||||
Other comprehensive income, net of tax | 36 | 36 | 0 | ||||
Balance at end of period at Mar. 31, 2021 | 1,187 | 0 | 3,802 | (1,148) | (1,278) | (191) | 2 |
Balance at beginning of period at Dec. 31, 2021 | 1,517 | 0 | 3,807 | (1,009) | (1,062) | (222) | 3 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation, net of withholding taxes | 1 | 1 | |||||
Net income | 210 | 210 | 0 | ||||
Purchases of treasury stock | (2) | (2) | |||||
Stock unit awards vested, net of shares forfeited for employee withholding taxes | 0 | ||||||
Other comprehensive income, net of tax | 26 | 26 | 0 | ||||
Balance at end of period at Mar. 31, 2022 | $ 1,752 | $ 0 | $ 3,808 | $ (799) | $ (1,036) | $ (224) | $ 3 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Treasury stock acquired (shares) | 125,482 | 1,700,000 |
Common Stock | ||
Stock unit awards vested, net of shares forfeited for employee withholding taxes (shares) | 100,000 | 400,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net income including noncontrolling interest | $ 210 | $ 88 |
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities: | ||
Share-based compensation | 2 | 2 |
Depreciation and amortization | 32 | 41 |
Closure costs, impairment and other related charges | (2) | 0 |
Deferred income taxes | 56 | 40 |
Net pension contributions and other postretirement benefit payments | (8) | (23) |
Gain on previously-held equity investments (Note 2) | (41) | 0 |
Net gain on disposition of assets | (1) | 0 |
Gain on translation of foreign currency denominated deferred income taxes | (6) | (12) |
Loss on translation of foreign currency denominated pension and other postretirement benefit obligations | 9 | 16 |
(Gain) loss on commodity contracts (Note 3) | (2) | 14 |
Net planned major maintenance amortization (payments) | 7 | (3) |
Changes in working capital: | ||
Accounts receivable | (36) | (51) |
Inventories | (67) | (50) |
Other current assets | (7) | 0 |
Accounts payable and other | 13 | 2 |
Other, net | (12) | 10 |
Net cash provided by operating activities | 147 | 74 |
Cash flows from investing activities: | ||
Cash invested in fixed assets | (13) | (14) |
Acquisition of business, net of cash acquired (Note 2) | (43) | 0 |
Disposition of assets | 4 | 0 |
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber (Note 7) | (43) | (32) |
Other investing activities, net | 0 | 3 |
Net cash used in investing activities | (95) | (43) |
Cash flows from financing activities: | ||
Issuance of long-term debt (Note 9) | 0 | 300 |
Repayments of debt (Note 9) | 0 | (376) |
Purchases of treasury stock (Note 13) | (2) | (17) |
Payments of financing fees | 0 | (6) |
Net cash used in financing activities | (2) | (99) |
Effect of exchange rate changes on cash and cash equivalents, and restricted cash | 0 | 0 |
Net increase (decrease) in cash and cash equivalents, and restricted cash | 50 | (68) |
Cash and cash equivalents, and restricted cash: | ||
Beginning of period | 152 | 159 |
End of period | 202 | 91 |
Cash and cash equivalents, and restricted cash at end of period: | ||
Cash and cash equivalents | 162 | 33 |
Restricted cash (included in “Other current assets”) | 0 | 18 |
Restricted cash (included in “Other assets”) | $ 40 | $ 40 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Note 1. Organization and Basis of Presentation Nature of operations Resolute Forest Products Inc. (with its subsidiaries, either individually or collectively, unless otherwise indicated, referred to as “Resolute Forest Products,” “we,” “our,” “us,” “Parent,” or the “Company”) is incorporated in Delaware. We are a global leader in the forest products industry with a diverse range of products, including market pulp, tissue, wood products and paper, which are marketed in over 60 countries. We own or operate some 40 facilities as well as power generation assets, in the U.S. and Canada. Financial statements Our unaudited interim consolidated financial statements and accompanying notes (or, the “ Consolidated Financial Statements ”) have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (or, the “ SEC ”) for interim reporting. Under those rules, certain footnotes and other financial information that are normally required by U.S. generally accepted accounting principles (or, “ GAAP ”) may be condensed or omitted. In our opinion, all adjustments (consisting of normal recurring adjustments) necessary for the fair statement of the Consolidated Financial Statements have been made. All amounts are expressed in U.S. dollars, unless otherwise indicated. The results for the interim period ended March 31, 2022, are not necessarily indicative of the results to be expected for the full year. These Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 1, 2022. New accounting pronouncement adopted in 2022 ASU 2021-08 “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” Effective January 1, 2022, we adopted ASU 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” issued by the Financial Accounting Standards Board in 2021, which revises the accounting for acquired revenue contracts with customers in a business combination. The adoption of this accounting guidance, which was applied prospectively, did not impact our Consolidated Financial Statements and disclosures. |
Other Income (Expense), Net
Other Income (Expense), Net | 3 Months Ended |
Mar. 31, 2022 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense), Net | Note 3. Other Income (Expense), Net Other income (expense), net for the three months ended March 31, 2022 and 2021, was comprised of the following: Three Months Ended (Unaudited, in millions) 2022 2021 Foreign exchange loss $ (3) $ (5) Gain (loss) on commodity contracts (1) 2 (37) Income from equity method investments (2) 6 — Gain on previously-held equity investments (Note 2) 41 — Miscellaneous expense (1) (3) $ 45 $ (45) (1) For the three months ended March 31, 2021, the loss was principally related to lumber futures contracts, of which a $14 million loss was unrealized; none of these contracts were outstanding as of March 31, 2022. (2) Principally related to the equity investment in Larouche and St-Prime in which we acquired a controlling interest during the three months ended March 31, 2022. See Note 2, “Business Acquisition” for more information. |
Business Acquisition
Business Acquisition | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Acquisition | Note 2. Business Acquisition On March 4, 2022 (or, the “ Acquisition Date ”), we acquired control of Resolute-LP Engineered Wood Larouche Inc. and Resolute-LP Engineered Wood St-Prime Limited Partnership (or, “ Larouche and St-Prime ”), that were previously held as 50% owned joint ventures, by acquiring the remaining 50% equity interests from Louisiana-Pacific Canada Ltd., a wholly-owned subsidiary of Louisiana-Pacific Corporation, for a cash consideration of $51 million (including $1 million of working capital adjustment, and net of cash acquired of $8 million), subject to post-closing adjustments. Larouche and St-Prime, which are engineered wood product facilities located in Quebec, produce I-joists for the construction industry. This acquisition solidifies our presence in the engineered wood product segment. We accounted for our previously held equity investments in Larouche and St-Prime using the equity method of accounting since we had joint control prior to acquiring a controlling interest on the Acquisition Date . We accounted for the acquisition of Larouche and St-Prime as a business combination in accordance with the acquisition method of accounting, which requires us to record the identifiable assets acquired and liabilities assumed at fair value. The amount by which the purchase price exceeds the fair value of the net assets acquired is recorded as goodwill. We have commenced the appraisals necessary to assess the fair values of the assets acquired, including amortizable intangible assets identified related to customer relationships, and liabilities assumed and the amount of goodwill to be recognized as of the Acquisition Date. The fair value assessment process of the assets acquired and liabilities assumed is ongoing. Our preliminary allocation of the purchase price is based on the corresponding book values of Larouche and St-Prime as of the Acquisition Date, except for the inventories, which are recorded at their fair values. The amount by which the purchase price exceeds these values was recorded in “Goodwill” in our Consolidated Balance Sheet. This allocation is preliminary in nature and thus, could yield significant adjustments of the values allocated upon completion of the fair value assessment process. The final determination of the fair values of the assets acquired and liabilities assumed will be completed within the measurement period of up to one year from the Acquisition Date permitted under GAAP. The following table summarizes our preliminary allocation of the purchase price of assets acquired and liabilities assumed at the Acquisition Date: (Unaudited, in millions) Cash and cash equivalents $ 16 Accounts receivable 11 Inventories 16 Current assets acquired $ 43 Fixed assets $ 6 Goodwill (1) 73 Deferred income tax assets 1 Total assets acquired and goodwill $ 123 Accounts payable and other $ 4 Current liabilities assumed 4 Pension and other postretirement benefit obligations 1 Total liabilities assumed $ 5 Net assets acquired $ 118 Cash consideration transferred 59 Fair value of the previously held interests in Larouche and St-Prime 59 Total fair value of consideration $ 118 (1) The preliminary purchase price allocation resulted in the recognition of an amount of goodwill of $73 million. As explained above, the allocation process of assets acquired and liabilities assumed is ongoing and, as a result, the value allocated to goodwill could change significantly following the completion of the purchase price allocation. At the Acquisition Date, our previously-held equity investments of $18 million were remeasured at a fair value of $59 million, which resulted in a gain of $41 million. The gain was recorded in “Other income (expense), net” in our Consolidated Statements of Operations for the three months ended March 31, 2022. We applied an income approach, specifically the discounted cash flow (or, the “ DCF ”) method, to measure the fair value of our equity interest in Larouche and St-Prime, as of immediately prior to the business acquisition. Determining fair value requires the exercise of significant judgments, including the amount and timing of expected future cash flows, discount rate and tax rate. The cash flows employed in the DCF analysis are based on our best estimate of future sales, earnings and cash flows after considering factors such as general market conditions, existing firm orders, long term business plans and recent operating performance. The discount rate utilized in the DCF analysis is based on the respective company’s weighted average cost of capital, which takes into account the relative weights of each component of capital structure (equity and debt) and represents the expected cost of new capital, adjusted as appropriate to consider the risk inherent in future cash flows of the Company. We ceased applying the equity method for our investments in Larouche and St-Prime and the net assets acquired and results of operations are consolidated from the Acquisition Date and are included in the wood products segment. From the Acquisition Date to March 31, 2022, our consolidated financial results included sales of $14 million and net income of nil attributable to Larouche and St-Prime. The following unaudited pro forma information for the three months ended March 31, 2022, represents our results of operations as if the acquisition of Larouche and St-Prime had occurred on January 1, 2021. This pro forma information does not purport to be indicative of the results that would have occurred for the periods presented or that may be expected in the future. Three Months Ended (Unaudited, in millions) 2022 2021 Sales $ 965 $ 887 Net income attributable to Resolute Forest Products Inc. (1) $ 182 $ 120 (1) For the pro forma information, the gain on previously-held equity investments of $41 million was considered realized in the three months ended March 31, 2021, and deducted from the three months ended March 31, 2022. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Note 4. Accumulated Other Comprehensive Loss The change in our accumulated other comprehensive loss by component (net of tax) for the three months ended March 31, 2022 and 2021, was as follows: (Unaudited, in millions) Unamortized Prior Service Costs Unamortized Actuarial Losses Foreign Total Balance as of December 31, 2021 $ (5) $ (1,051) $ (6) $ (1,062) Other comprehensive income before reclassifications (1) — 10 1 11 Amounts reclassified from accumulated other comprehensive loss — 15 — 15 Net current period other comprehensive income — 25 1 26 Balance as of March 31, 2022 $ (5) $ (1,026) $ (5) $ (1,036) (Unaudited, in millions) Unamortized Prior Service Costs Unamortized Actuarial Losses Foreign Total Balance as of December 31, 2020 $ (1) $ (1,307) $ (6) $ (1,314) Other comprehensive income before reclassifications (2) — 22 — 22 Amounts reclassified from accumulated other comprehensive loss (1) 15 — 14 Net current period other comprehensive (loss) income (1) 37 — 36 Balance as of March 31, 2021 $ (2) $ (1,270) $ (6) $ (1,278) (1) The indefinite idling of pulp and paper operations at our Calhoun (Tennessee) mill triggered pension special termination benefit costs and remeasurement of the pension and other postretirement benefit (or, “ OPEB ”) obligations related to its plans as of January 31, 2022, resulting in a loss of $4 million and an actuarial gain of $14 million, totaling a net gain of $10 million ($10 million net of tax). (2) The indefinite idling of the Amos and Baie-Comeau (Quebec) mills triggered curtailment and remeasurement of the pension and OPEB obligations related to their plans as of March 31, 2021, resulting in a curtailment gain of $8 million and an actuarial gain of $22 million, totaling $30 million ($22 million net of tax). The reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2022 and 2021, were comprised of the following: Three Months Ended March 31, (Unaudited, in millions) 2022 2021 Affected Line in the Consolidated Statements of Operations Unamortized Prior Service Costs or Credits Amortization of prior service costs $ — $ — Non-operating pension and other postretirement benefit (costs) credits (1) Curtailment gain — (1) Non-operating pension and other postretirement benefit (costs) credits (1) Income tax effect of the above — — Income tax provision Net of tax — (1) Unamortized Actuarial Losses Amortization of actuarial losses 16 19 Non-operating pension and other postretirement benefit (costs) credits (1) Other items 3 — Non-operating pension and other postretirement benefit (costs) credits (1) Income tax effect of the above (4) (4) Income tax provision Net of tax 15 15 Total Reclassifications $ 15 $ 14 (1) These items are included in the computation of net periodic benefit cost (credit) related to our pension and OPEB plans summarized in Note 10, “Employee Benefit Plans.” |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Note 5. Net Income Per Share The reconciliation of the basic and diluted net income per share for the three months ended March 31, 2022 and 2021, was as follows: Three Months Ended (Unaudited, in millions, except per share amounts) 2022 2021 Numerator: Net income attributable to Resolute Forest Products Inc. $ 210 $ 87 Denominator: Weighted-average number of Resolute Forest Products Inc. common shares outstanding 77.4 81.2 Dilutive impact of nonvested stock unit awards and stock options 0.8 0.7 Diluted weighted-average number of Resolute Forest Products Inc. common shares outstanding 78.2 81.9 Net income per share attributable to Resolute Forest Products Inc. common shareholders: Basic $ 2.71 $ 1.07 Diluted $ 2.68 $ 1.06 The weighted-average number of outstanding stock options and nonvested equity-classified restricted stock units, deferred stock units and performance stock units (collectively, “ stock unit awards ”) that were excluded from the calculation of diluted net income per share, as their impact would have been antidilutive, for the three months ended March 31, 2022 and 2021, was as follows: Three Months Ended (Unaudited, in millions) 2022 2021 Stock options 0.3 0.8 Stock unit awards — — |
Inventories, Net
Inventories, Net | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | Note 6. Inventories, Net Inventories, net as of March 31, 2022 and December 31, 2021, were comprised of the following: (Unaudited, in millions) March 31, December 31, Raw materials $ 174 $ 159 Work in process 62 57 Finished goods 205 148 Mill stores and other supplies 154 146 $ 595 $ 510 |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2022 | |
Other Assets [Abstract] | |
Other Assets | Note 7. Other Assets Other assets as of March 31, 2022 and December 31, 2021, were comprised of the following: (Unaudited, in millions) March 31, December 31, Countervailing duty cash deposits on softwood lumber (Note 12) $ 365 $ 339 Anti-dumping duty cash deposits on softwood lumber (Note 12) 75 58 Equity method investments 11 22 Restricted cash 40 40 Other 25 25 $ 516 $ 484 |
Accounts Payable and Other
Accounts Payable and Other | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Other | Note 8. Accounts Payable and Other Accounts payable and other as of March 31, 2022 and December 31, 2021, were comprised of the following: (Unaudited, in millions) March 31, December 31, Trade accounts payable $ 308 $ 262 Accrued compensation 62 89 Accrued interest 2 6 Pension and other postretirement benefit obligations 14 14 Accrued provision related to Fibrek Inc. litigation (Note 12) 22 21 Income and other taxes payable 5 4 Other 29 25 $ 442 $ 421 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Note 9. Long-Term Debt Overview Long-term debt, including current portion, as of March 31, 2022 and December 31, 2021, was comprised of the following: (Unaudited, in millions) March 31, December 31, 4.875% senior unsecured notes due 2026: Principal amount $ 300 $ 300 Deferred financing costs (5) (5) Total 4.875% senior unsecured notes due 2026 295 295 Finance lease obligations 6 6 Other debt 1 1 Total debt 302 302 Less: Current portion of finance lease obligations and other debt (2) (2) Long-term debt, net of current portion $ 300 $ 300 Debt availabilities (Unaudited, in millions) March 31, December 31, Term Loan Facility $ 180 $ 180 Revolving Credit Facility 180 180 ABL Credit Facility (1) 377 307 Secured delayed draw term loan facility (C$220 million as of March 31, 2022 and December 31, 2021) 176 174 Total availability $ 913 $ 841 (1) The availability as of March 31, 2022, was $377 million, net of $73 million of ordinary course letters of credit outstanding, of which $53 million were to guarantee surety bonds of $83 million related to the U.S. softwood lumber cash deposits. The availability as of December 31, 2021, was $307 million, net of $73 million of ordinary course letters of credit outstanding, of which $53 million were to guarantee surety bonds of $83 million related to the U.S. softwood lumber cash deposits. Senior Unsecured Notes 2026 Notes On February 2, 2021, we issued $300 million aggregate principal amount of 4.875% senior unsecured notes due 2026 (or, the “ 2026 Notes ”) at an issue price of 100%, pursuant to an indenture as of that date (or, the “ Indenture ”). Upon their issuance, the 2026 Notes were recorded at their fair value of $300 million. Interest on the 2026 Notes is payable semi-annually on March 1 and September 1 of each year, beginning on September 1, 2021, until their maturity date of March 1, 2026. In connection with the issuance of the 2026 Notes, we incurred financing costs of $6 million, which were deferred and recorded as a reduction of the principal. Deferred financing costs are amortized to “Interest expense” in our Consolidated Statements of Operations using the interest method over the term of the notes. The fair value of the 2026 Notes (Level 1) was $289 million as of March 31, 2022. 2023 Notes On February 2, 2021, we placed the net proceeds from the issuance of the 2026 Notes together with additional cash, into trust for the benefit of the holders of the 5.875% senior unsecured notes due 2023 (or, the “ 2023 Notes ”) to redeem all of the $375 million outstanding aggregate principal amount of the 2023 Notes (or, the “ Redemption ”) at a price of 100% of the aggregate principal amount thereof, plus accrued and unpaid interest to, but not including, the redemption date. The Redemption occurred on February 18, 2021. As a result of the repurchase, we recorded a net loss on extinguishment of debt of $3 million in “Other income (expense), net” in our Consolidated Statement of Operations for the three months ended March 31, 2021. Senior Secured Credit Facility On April 19, 2021 (or, the “ Effective Date ”), we entered into a first amendment to the amended and restated senior secured credit facility (or, the “ Senior Secured Credit Facility ”). The amount available under the Senior Secured Credit Facility remains unchanged for up to $360 million and is comprised of a term loan facility of up to $180 million with a delayed draw period of up to three years and the choice of maturities of six Term Loan Facility ”); and a six-year revolving credit facility of up to $180 million (or, the “ Revolving Credit Facility ”). On the Effective Date, we repaid our $180 million term loans under the amended and restated senior secured credit facility with a combination of proceeds of borrowings under the Revolving Credit Facility and cash on hand. The amendment then reinstated the full amount of the Term Loan Facility. There is also an uncommitted option to increase the Senior Secured Credit Facility by up to an additional $360 million, subject to certain terms and conditions. The obligations under the Senior Secured Credit Facility are guaranteed by certain material U.S. subsidiaries of the Company and are secured by a first priority mortgage on the real property of the Company’s facility in Calhoun and a first priority security interest on the fixtures and equipment located therein. On March 2, 2022, the Company entered into agreements to provide the following additional security under the Senior Secured Credit Facility: (i) a first priority mortgage on the real property of the Company’s sawmill facilities in Glenwood and El Dorado (Arkansas) and a first priority security interest on the fixtures and equipment located therein, and (ii) a first priority security interest on the fixtures and equipment at the Company’s sawmill facility in Cross City (Florida). ABL Credit Facility On May 14, 2019, we entered into an amended senior secured asset-based revolving credit facility (or, the “ ABL Credit Facility ”) with an aggregate lender commitment of up to $500 million at any time outstanding, subject to borrowing base availability based on specified advance rates, eligibility criteria and customary reserves. Effective January 21, 2021, we reduced the commitment under the Canadian tranche of our senior secured asset-based revolving credit facility by $50 million, to $250 million, resulting in an aggregate commitment of $450 million, subject to borrowing base limitations. The obligations under the ABL Credit Facility are guaranteed by certain of our material subsidiaries. On December 15, 2021, we entered into an amendment to the credit agreement, which reset the facility and extended the maturity date to December 15, 2026. The agreement also contains hardwired benchmark replacement provisions for future transition of LIBOR and may be amended based on agreed upon Environmental, Social and Governance (or, “ ESG ”) key performance indicators as described in the credit agreement. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Note 10. Employee Benefit Plans Pension and other postretirement benefit plans The components of net periodic benefit costs (credits) relating to our pension and OPEB plans for the three months ended March 31, 2022 and 2021, were as follows: Pension Plans: Three Months Ended (Unaudited, in millions) 2022 2021 Interest cost $ 36 $ 33 Expected return on plan assets (49) (54) Amortization of actuarial losses 17 21 Amortization of prior service credits — — Non-operating pension costs 4 — Service cost 3 4 Net periodic benefit costs before special events 7 4 Other loss (gain) 3 (1) $ 10 $ 3 OPEB Plans: Three Months Ended (Unaudited, in millions) 2022 2021 Interest cost $ 1 $ 1 Amortization of actuarial gains (1) (2) Non-operating other postretirement benefit credits — (1) Service cost — — Net periodic benefit credits before special events — (1) Curtailment gain — — $ — $ (1) Defined contribution plans Our expense for the defined contribution plans totaled $5 million for the three months ended March 31, 2022 and 2021. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11. Income Taxes The income tax provision attributable to income before income taxes differs from the amounts computed by applying the U.S. federal statutory income tax rate of 21% for the three months ended March 31, 2022 and 2021, as a result of the following: Three Months Ended (Unaudited, in millions) 2022 2021 Income before income taxes $ 268 $ 128 Income tax provision: Expected income tax provision (56) (27) Changes resulting from: Valuation allowance 33 8 Foreign exchange 2 2 U.S. tax on non-U.S. earnings (29) (18) State income taxes, net of federal income tax benefit (1) 2 Foreign tax rate differences (13) (8) Other, net 6 1 $ (58) $ (40) During the three months ended March 31, 2022, we used $33 million of deferred income tax assets that were fully reserved to offset mainly the tax implications relating to the global intangible low-taxed income (or, “ GILTI ”) inclusion, which is based on the U.S. system of taxation for non-U.S. earnings, whereby foreign earnings less a qualified deduction for foreign assets are included in U.S. taxable income. During the three months ended March 31, 2021, we used $8 million of deferred income tax assets that were fully reserved to offset the tax implications relating to the GILTI. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 12. Commitments and Contingencies Legal matters We become involved in various legal proceedings, claims and governmental inquiries, investigations, and other disputes in the normal course of business, including matters related to contracts, commercial and trade disputes, taxes, environmental issues, activist damages, employment and workers’ compensation claims, grievances, human rights complaints, pension and benefit plans and obligations, health and safety, product safety and liability, asbestos exposure, financial reporting and disclosure obligations, corporate governance, Indigenous peoples’ claims, antitrust, governmental regulations, and other matters. Although the final outcome is subject to many variables and cannot be predicted with any degree of certainty, we regularly assess the status of the matters and establish provisions (including legal costs expected to be incurred) when we believe an adverse outcome is probable, and the amount can be reasonably estimated. Any recovery from litigation or settlement of claims that is a gain contingency is recognized if, and when, realized or realizable. Except as described below and for claims that cannot be assessed due to their preliminary nature, we believe that the ultimate disposition of these matters outstanding or pending as of March 31, 2022, will not have a material adverse effect on our Consolidated Financial Statements. Asbestos-related lawsuits We are involved in a number of asbestos-related lawsuits filed primarily in U.S. state courts, including certain cases involving multiple defendants. These lawsuits principally allege direct or indirect personal injury or death resulting from exposure to asbestos-containing premises. While we dispute the plaintiffs’ allegations and intend to vigorously defend these claims, the ultimate resolution of these matters cannot be determined at this time. These lawsuits frequently involve claims for unspecified compensatory and punitive damages, and we are unable to reasonably estimate a range of possible losses, which may not be covered in whole or in part by our insurance coverage. However, unfavorable rulings, judgments or settlement terms could materially impact our Consolidated Financial Statements. Hearings for certain of these matters are scheduled to occur in 2022. Countervailing duty and anti-dumping investigations on softwood lumber On November 25, 2016, countervailing duty and anti-dumping petitions were filed with the U.S. Department of Commerce (or, “ Commerce ”) and the U.S. International Trade Commission (or, “ ITC ”) by certain U.S. softwood lumber products producers and forest landowners, requesting that the U.S. government impose countervailing and anti-dumping duties on Canadian-origin softwood lumber products exported to the U.S. One of our subsidiaries was identified in the petitions as being a Canadian exporting producer of softwood lumber products to the U.S. and was selected as a mandatory respondent to be investigated by Commerce in both the countervailing duty and anti-dumping investigations. Countervailing Duties – On April 24, 2017, Commerce announced its preliminary determination in the countervailing duty investigation; as a result, from April 28, 2017 to August 25, 2017, we were required to pay cash deposits to the U.S. Customs and Border Protection agency (or, “ U.S. Customs ”) at a rate of 12.82% for countervailing duties on the vast majority of our U.S. imports of Canadian-produced softwood lumber. On November 2, 2017, Commerce issued its final determination in the countervailing investigation; as a result, from December 28, 2017 to November 30, 2020, we were required to pay cash deposits to U.S. Customs at a new rate of 14.70%. On November 23, 2020, Commerce issued its final determination in the first administrative review of the countervailing investigation; as a result, from December 1, 2020 to December 1, 2021, we were required to pay cash deposits to U.S. Customs at a rate of 19.10%. On November 24, 2021, Commerce issued its final determination in the second administrative review of the countervailing investigation; as a result, since December 2, 2021, we have been required to pay cash deposits to U.S. Customs at a new rate of 18.07%. Commerce is expected to issue its final determination in the third administrative review of the countervailing investigation in the third or fourth quarters of 2022, following which a new rate will take effect for Resolute; this new rate was estimated at 15.48% in a non-binding, preliminary determination released on January 31, 2022, but is subject to modification in the upcoming final determination. Through March 31, 2022, our cash deposits totaled $365 million. Anti-dumping Duties – On June 26, 2017, Commerce announced its preliminary determination in the anti-dumping investigation; as a result, from June 30, 2017 to November 7, 2017, we were required to pay cash deposits to U.S. Customs at a rate of 4.59% for anti-dumping duties on the vast majority of our U.S. imports of Canadian-produced softwood lumber. On November 2, 2017, Commerce issued its final determination in the anti-dumping investigation; as a result, from November 8, 2017 to November 29, 2020, we were required to pay cash deposits to U.S. Customs at a new rate of 3.20%. On November 23, 2020, Commerce issued its final determination in the first administrative review of the anti-dumping investigation; as a result, from November 30, 2020 to December 1, 2021, we were required to pay cash deposits to U.S. Customs at a rate of 1.15%. On November 24, 2021, Commerce issued its final determination in the second administrative review of the anti-dumping investigation; as a result, since December 2, 2021, we have been required to pay cash deposits to U.S. Customs at a new rate of 11.59%. Commerce is expected to issue its final determination in the third administrative review of the anti-dumping investigation in the third or fourth quarters of 2022, following which a new rate will take effect for Resolute; this new rate was estimated at 4.76% in a non-binding, preliminary determination released on January 31, 2022, but is subject to modification in the upcoming final determination. Through March 31, 2022, our cash deposits totaled $75 million. Ongoing Administrative Reviews – Following Commerce’s completion of the Canadian softwood lumber investigation and the first and second administrative reviews, two further administrative reviews remain pending. On March 4, 2021, Commerce published a notice initiating the third administrative review of the countervailing duty and anti-dumping orders on softwood lumber products from Canada. We were selected as a mandatory respondent for the third administrative review of the countervailing duty order and we have responded to Commerce with the information requested to date. On March 9, 2022, Commerce published a notice initiating the fourth administrative review of the countervailing duty and anti-dumping orders on softwood lumber products from Canada. According to Commerce’s decision published on April 27, 2022, we were not selected as a mandatory respondent for the fourth administrative review of the countervailing duty order. Ongoing Appellate Reviews – On December 14, 2017 and January 4, 2018, we filed complaints supporting appellate reviews of the final results of Commerce’s countervailing and anti-dumping investigations on softwood lumber from Canada, respectively, before a binational panel formed pursuant to the North American Free Trade Agreement or United States-Mexico-Canada Agreement, as the case may be (or, “ Panel ”). Briefing for these appeals has been completed, but the constitution of the Panels and scheduling of the hearings remain pending. Further, on January 6, 2021 and January 19, 2021, we filed our complaints supporting appellate Panel reviews of the final results in the countervailing and anti-dumping first administrative reviews, and on January 12, 2022, we filed similar complaints with respect to the second administrative reviews. ITC Injury Determination – In parallel, on December 28, 2017, the ITC published its affirmative final injury determinations in the anti-dumping and countervailing investigations on softwood lumber from Canada. On September 4, 2019, a Panel issued an interim decision upholding the affirmative final injury determinations of the ITC in both investigations of softwood lumber products from Canada. The Panel remanded the ITC to reconsider several findings and ordered the ITC to submit its redetermination on remand within 90 days from the date of the Panel interim decision. On December 19, 2019, the ITC issued its redetermination on remand that maintained the affirmative final injury determinations, and on May 22, 2020, the Panel issued its final decision and affirmed in its entirety the ITC’s injury determination on remand. WTO Appeal – In addition, on August 24, 2020, the World Trade Organization’s (or, “ WTO ”) dispute panel issued a report (or, the “ Panel Report ”) in the case brought by the government of Canada in “United States — Countervailing Measures on Softwood Lumber from Canada” (DS533), concluding, among other things, that Commerce acted inconsistently with the Agreement on Subsidies and Countervailing Measures on most of the matters. On September 28, 2020, the United States notified the WTO’s dispute settlement body of its decision to appeal the Panel Report. Financial assurance – We are required by U.S. Customs to provide surety bonds to secure the payment of our cash deposits. As of March 31, 2022, we had $83 million of surety bonds outstanding in favor of U.S. Customs, of which $53 million were secured by letters of credit. See Note 9, “Long-Term Debt – ABL Credit Facility” for more information. We are not presently able to determine the ultimate resolution of these matters, but we believe it is not probable that we will ultimately be assessed with significant duties, if any, on our U.S. imports of Canadian-produced softwood lumber products. Accordingly, no contingent loss was recorded in respect of these petitions in our Consolidated Statements of Operations, and our cash deposits are recorded in “Other assets” in our Consolidated Balance Sheets. Fibrek acquisition Effective July 31, 2012, we completed the final step of the transaction pursuant to which we acquired the remaining 25.40% of the outstanding Fibrek Inc. shares, following the approval of Fibrek’s shareholders on July 23, 2012, and the issuance of a final order by the Quebec Superior Court in Canada (or, the “ Quebec Superior Court ”) approving the arrangement on July 27, 2012. Certain former shareholders of Fibrek exercised rights of dissent in respect of the transaction, asking for a judicial determination of the fair value of their claim under the Canada Business Corporations Act . On September 26, 2019, the Quebec Superior Court rendered a decision fixing the fair value of the shares of the dissenting shareholders at C$1.99 per share, or C$31 million in aggregate, plus interest and an additional indemnity, for a total estimated at C$44 million payable in cash. We had previously accrued C$14 million for the payment of the dissenting shareholders’ claims. Following the court decision, we accrued an additional C$30 million ($23 million), and as a result recorded $23 million in “Other expense, net” in our Consolidated Statement of Operations for the year ended on December 31, 2019. Of the total amount of C$44 million, C$19 million ($14 million) was payable immediately and paid on October 2, 2019. The remaining balances of C$27 million ($22 million) as of March 31, 2022, and C$27 million ($21 million) as of December 31, 2021, which includes accrued interest, are recorded in “Accounts payable and other” in our Consolidated Balance Sheets. We are appealing the decision, therefore the payment of any additional consideration and its timing will depend on the outcome of the appeal. On November 13, 2019, a legal hypothec in the amount of C$30 million was registered on our Saint-Félicien (Quebec) immovable and movable property to secure the payment of any additional amounts following the outcome of the appeal. The hearing in this matter is expected to occur in 2022. Partial wind-ups of pension plans On June 12, 2012, we filed a motion for directives with the Quebec Superior Court, the court with jurisdiction in the creditor protection proceedings under the Companies’ Creditors Arrangement Act (Canada) (or, the “ CCAA Creditor Protection Proceedings ”), seeking an order to prevent pension regulators in each of Quebec, New Brunswick, and Newfoundland and Labrador from declaring partial wind-ups of pension plans relating to employees of former operations in New Brunswick, and Newfoundland and Labrador, or a declaration that any claim for accelerated reimbursements of deficits arising from a partial wind-up is a barred claim under the CCAA Creditor Protection Proceedings. We contend, among other things, that any such declaration, if issued, would be inconsistent with the Quebec Superior Court’s sanction order confirming the CCAA debtors’ CCAA Plan of Reorganization and Compromise , as amended, and the terms of our emergence from the CCAA Creditor Protection Proceedings. A partial wind-up would likely shorten the period in which any deficit within those plans, which could reach up to C$150 million ($120 million), would have to be funded if we do not obtain the relief sought. The hearing in this matter has not yet been scheduled but could occur in the next 12 months. Contingent gains In 2017, we filed a lawsuit against the Government of Canada alleging that measures taken by the provincial Government of Nova Scotia and the Government of Canada damaged Resolute and its investments in Canada, in violation of the investment protections extended to foreign investors under North American Free Trade Agreement Articles 1102, 1105 and 1110. The total amount for damages claimed is substantial but the amount and timing of the ultimate recovery is uncertain. As a result, any recovery from this litigation is a contingent gain and will be recognized if, and when, realized or realizable. In 2016, we filed a lawsuit against Greenpeace International, Greenpeace Inc. and certain individuals related to loss of business following false allegations concerning the impact of our harvestry operations in certain regions in Quebec. The claims alleged certain damages resulting from defamation and unfair competition. The total amount for damages claimed is substantial but the amount and timing of the ultimate recovery is uncertain. As a result, any recovery from this litigation or settlement of this claim is a contingent gain and will be recognized if, and when, realized or realizable. Environmental matters We are subject to a number of federal or national, state, provincial, and local environmental laws, regulations, and orders in various jurisdictions. We believe our operations are in material compliance with current applicable environmental laws and regulations. Environmental regulations promulgated and orders issued in the future could require substantial additional expenditures for compliance and could have a material impact on us, in particular, and the industry in general. We have environmental liabilities of $13 million recorded as of March 31, 2022 and December 31, 2021, primarily related to environmental remediation related to closed sites. The amount of these liabilities represents management’s estimate of the ultimate settlement based on an assessment of relevant factors and assumptions and could be affected by changes in facts or assumptions not currently known to management for which the outcome cannot be reasonably estimated at this time. We also have asset retirement obligations of $37 million and $36 million recorded as of March 31, 2022 and December 31, 2021, respectively, primarily consisting of liabilities associated with landfills, sludge basins and the dismantling of retired assets. These liabilities are included in “Accounts payable and other” and “Other liabilities” in our Consolidated Balance Sheets. |
Share Capital
Share Capital | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Share Capital | Note 13. Share Capital Treasury stock On December 7, 2021, we announced a new share repurchase program, authorized by our board of directors, of up to ten million shares of our common stock or $100 million, whichever occurs first. During the three months ended March 31, 2022, we repurchased 125,482 shares at an average price of $11.34 for a total of $2 million. On March 2, 2020, our board of directors authorized a share repurchase program of up to 15% of our common stock, for an aggregate consideration of up to $100 million. During the three months ended March 31, 2021, we repurchased 1.7 million shares at an average price of $9.50 for a total of $17 million. This share repurchase program was completed in December 2021. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Note 14. Segment Information We manage our business based on the products we manufacture. Accordingly, our reportable segments correspond to our principal product lines: market pulp, tissue, wood products and paper. None of the income or loss items following “Operating income” in our Consolidated Statements of Operations are allocated to our segments, since those items are reviewed separately by management. For the same reason, closure costs, impairment and other related charges, gains and losses on disposition of assets, as well as other discretionary charges or credits are not allocated to our segments. We allocate depreciation and amortization expense to our segments, although the related fixed assets and amortizable intangible assets are not allocated to segment assets. Additionally, all selling, general and administrative expenses are allocated to our segments, with the exception of certain discretionary charges and credits, which we present under “corporate and other.” Information about certain segment data for the three months ended March 31, 2022 and 2021, was as follows: (Unaudited, in millions) Market Pulp (1) Tissue Wood Products (2) Paper Segment Corporate Total Sales First three months 2022 $ 184 $ 48 $ 463 $ 250 $ 945 $ — $ 945 2021 $ 176 $ 42 $ 430 $ 225 $ 873 $ — $ 873 Depreciation and amortization First three months 2022 $ 4 $ 5 $ 11 $ 9 $ 29 $ 3 $ 32 2021 $ 6 $ 5 $ 11 $ 15 $ 37 $ 4 $ 41 Operating income (loss) First three months 2022 $ 22 $ (9) $ 219 $ 25 $ 257 $ (22) $ 235 2021 $ 4 $ (2) $ 221 $ (24) $ 199 $ (22) $ 177 (1) Inter-segment sales were $14 million and $7 million for the three months ended March 31, 2022 and 2021, respectively. These inter-segment sales, which were transacted at either the lowest market price of the previous month or cost, were excluded from market pulp sales. (2) Wood products sales to our previously-held joint ventures, which were transacted at arm’s length negotiated prices, were $12 million for the period up to the Acquisition Date and $13 million for the three months ended March 31, 2021. See Note 2, “Business Acquisition” for more information. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Financial statements | Financial statements Our unaudited interim consolidated financial statements and accompanying notes (or, the “ Consolidated Financial Statements ”) have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (or, the “ SEC ”) for interim reporting. Under those rules, certain footnotes and other financial information that are normally required by U.S. generally accepted accounting principles (or, “ GAAP ”) may be condensed or omitted. In our opinion, all adjustments (consisting of normal recurring adjustments) necessary for the fair statement of the Consolidated Financial Statements have been made. All amounts are expressed in U.S. dollars, unless otherwise indicated. The results for the interim period ended March 31, 2022, are not necessarily indicative of the results to be expected for the full year. These Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 1, 2022. |
New accounting pronouncements adopted and Accounting pronouncement not yet adopted | New accounting pronouncement adopted in 2022 ASU 2021-08 “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” Effective January 1, 2022, we adopted ASU 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” issued by the Financial Accounting Standards Board in 2021, which revises the accounting for acquired revenue contracts with customers in a business combination. The adoption of this accounting guidance, which was applied prospectively, did not impact our Consolidated Financial Statements and disclosures. |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Income (Expense), Net | Other income (expense), net for the three months ended March 31, 2022 and 2021, was comprised of the following: Three Months Ended (Unaudited, in millions) 2022 2021 Foreign exchange loss $ (3) $ (5) Gain (loss) on commodity contracts (1) 2 (37) Income from equity method investments (2) 6 — Gain on previously-held equity investments (Note 2) 41 — Miscellaneous expense (1) (3) $ 45 $ (45) (1) For the three months ended March 31, 2021, the loss was principally related to lumber futures contracts, of which a $14 million loss was unrealized; none of these contracts were outstanding as of March 31, 2022. (2) Principally related to the equity investment in Larouche and St-Prime in which we acquired a controlling interest during the three months ended March 31, 2022. See Note 2, “Business Acquisition” for more information. |
Business Acquisition (Tables)
Business Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Final Allocation of Purchase Price of Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes our preliminary allocation of the purchase price of assets acquired and liabilities assumed at the Acquisition Date: (Unaudited, in millions) Cash and cash equivalents $ 16 Accounts receivable 11 Inventories 16 Current assets acquired $ 43 Fixed assets $ 6 Goodwill (1) 73 Deferred income tax assets 1 Total assets acquired and goodwill $ 123 Accounts payable and other $ 4 Current liabilities assumed 4 Pension and other postretirement benefit obligations 1 Total liabilities assumed $ 5 Net assets acquired $ 118 Cash consideration transferred 59 Fair value of the previously held interests in Larouche and St-Prime 59 Total fair value of consideration $ 118 (1) The preliminary purchase price allocation resulted in the recognition of an amount of goodwill of $73 million. As explained above, the allocation process of assets acquired and liabilities assumed is ongoing and, as a result, the value allocated to goodwill could change significantly following the completion of the purchase price allocation. |
Schedule of Pro Forma Information | The following unaudited pro forma information for the three months ended March 31, 2022, represents our results of operations as if the acquisition of Larouche and St-Prime had occurred on January 1, 2021. This pro forma information does not purport to be indicative of the results that would have occurred for the periods presented or that may be expected in the future. Three Months Ended (Unaudited, in millions) 2022 2021 Sales $ 965 $ 887 Net income attributable to Resolute Forest Products Inc. (1) $ 182 $ 120 (1) For the pro forma information, the gain on previously-held equity investments of $41 million was considered realized in the three months ended March 31, 2021, and deducted from the three months ended March 31, 2022. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss by Component (Net of Tax) | The change in our accumulated other comprehensive loss by component (net of tax) for the three months ended March 31, 2022 and 2021, was as follows: (Unaudited, in millions) Unamortized Prior Service Costs Unamortized Actuarial Losses Foreign Total Balance as of December 31, 2021 $ (5) $ (1,051) $ (6) $ (1,062) Other comprehensive income before reclassifications (1) — 10 1 11 Amounts reclassified from accumulated other comprehensive loss — 15 — 15 Net current period other comprehensive income — 25 1 26 Balance as of March 31, 2022 $ (5) $ (1,026) $ (5) $ (1,036) (Unaudited, in millions) Unamortized Prior Service Costs Unamortized Actuarial Losses Foreign Total Balance as of December 31, 2020 $ (1) $ (1,307) $ (6) $ (1,314) Other comprehensive income before reclassifications (2) — 22 — 22 Amounts reclassified from accumulated other comprehensive loss (1) 15 — 14 Net current period other comprehensive (loss) income (1) 37 — 36 Balance as of March 31, 2021 $ (2) $ (1,270) $ (6) $ (1,278) (1) The indefinite idling of pulp and paper operations at our Calhoun (Tennessee) mill triggered pension special termination benefit costs and remeasurement of the pension and other postretirement benefit (or, “ OPEB ”) obligations related to its plans as of January 31, 2022, resulting in a loss of $4 million and an actuarial gain of $14 million, totaling a net gain of $10 million ($10 million net of tax). (2) The indefinite idling of the Amos and Baie-Comeau (Quebec) mills triggered curtailment and remeasurement of the pension and OPEB obligations related to their plans as of March 31, 2021, resulting in a curtailment gain of $8 million and an actuarial gain of $22 million, totaling $30 million ($22 million net of tax). |
Schedule of Reclassifications Out of Accumulated Other Comprehensive Loss | The reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2022 and 2021, were comprised of the following: Three Months Ended March 31, (Unaudited, in millions) 2022 2021 Affected Line in the Consolidated Statements of Operations Unamortized Prior Service Costs or Credits Amortization of prior service costs $ — $ — Non-operating pension and other postretirement benefit (costs) credits (1) Curtailment gain — (1) Non-operating pension and other postretirement benefit (costs) credits (1) Income tax effect of the above — — Income tax provision Net of tax — (1) Unamortized Actuarial Losses Amortization of actuarial losses 16 19 Non-operating pension and other postretirement benefit (costs) credits (1) Other items 3 — Non-operating pension and other postretirement benefit (costs) credits (1) Income tax effect of the above (4) (4) Income tax provision Net of tax 15 15 Total Reclassifications $ 15 $ 14 (1) These items are included in the computation of net periodic benefit cost (credit) related to our pension and OPEB plans summarized in Note 10, “Employee Benefit Plans.” |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Basic and Diluted Net Income (Loss) Per Share | The reconciliation of the basic and diluted net income per share for the three months ended March 31, 2022 and 2021, was as follows: Three Months Ended (Unaudited, in millions, except per share amounts) 2022 2021 Numerator: Net income attributable to Resolute Forest Products Inc. $ 210 $ 87 Denominator: Weighted-average number of Resolute Forest Products Inc. common shares outstanding 77.4 81.2 Dilutive impact of nonvested stock unit awards and stock options 0.8 0.7 Diluted weighted-average number of Resolute Forest Products Inc. common shares outstanding 78.2 81.9 Net income per share attributable to Resolute Forest Products Inc. common shareholders: Basic $ 2.71 $ 1.07 Diluted $ 2.68 $ 1.06 |
Schedule of Outstanding Weighted-Average Stock Options and Nonvested Equity-Classified RSUs, DSUs and PSUs | The weighted-average number of outstanding stock options and nonvested equity-classified restricted stock units, deferred stock units and performance stock units (collectively, “ stock unit awards ”) that were excluded from the calculation of diluted net income per share, as their impact would have been antidilutive, for the three months ended March 31, 2022 and 2021, was as follows: Three Months Ended (Unaudited, in millions) 2022 2021 Stock options 0.3 0.8 Stock unit awards — — |
Inventories, Net (Tables)
Inventories, Net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net | Inventories, net as of March 31, 2022 and December 31, 2021, were comprised of the following: (Unaudited, in millions) March 31, December 31, Raw materials $ 174 $ 159 Work in process 62 57 Finished goods 205 148 Mill stores and other supplies 154 146 $ 595 $ 510 |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Other Assets [Abstract] | |
Schedule of Other Assets | Other assets as of March 31, 2022 and December 31, 2021, were comprised of the following: (Unaudited, in millions) March 31, December 31, Countervailing duty cash deposits on softwood lumber (Note 12) $ 365 $ 339 Anti-dumping duty cash deposits on softwood lumber (Note 12) 75 58 Equity method investments 11 22 Restricted cash 40 40 Other 25 25 $ 516 $ 484 |
Accounts Payable and Other (Tab
Accounts Payable and Other (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Other | Accounts payable and other as of March 31, 2022 and December 31, 2021, were comprised of the following: (Unaudited, in millions) March 31, December 31, Trade accounts payable $ 308 $ 262 Accrued compensation 62 89 Accrued interest 2 6 Pension and other postretirement benefit obligations 14 14 Accrued provision related to Fibrek Inc. litigation (Note 12) 22 21 Income and other taxes payable 5 4 Other 29 25 $ 442 $ 421 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt, Including Current Portion | Long-term debt, including current portion, as of March 31, 2022 and December 31, 2021, was comprised of the following: (Unaudited, in millions) March 31, December 31, 4.875% senior unsecured notes due 2026: Principal amount $ 300 $ 300 Deferred financing costs (5) (5) Total 4.875% senior unsecured notes due 2026 295 295 Finance lease obligations 6 6 Other debt 1 1 Total debt 302 302 Less: Current portion of finance lease obligations and other debt (2) (2) Long-term debt, net of current portion $ 300 $ 300 (Unaudited, in millions) March 31, December 31, Term Loan Facility $ 180 $ 180 Revolving Credit Facility 180 180 ABL Credit Facility (1) 377 307 Secured delayed draw term loan facility (C$220 million as of March 31, 2022 and December 31, 2021) 176 174 Total availability $ 913 $ 841 (1) The availability as of March 31, 2022, was $377 million, net of $73 million of ordinary course letters of credit outstanding, of which $53 million were to guarantee surety bonds of $83 million related to the U.S. softwood lumber cash deposits. The availability as of December 31, 2021, was $307 million, net of $73 million of ordinary course letters of credit outstanding, of which $53 million were to guarantee surety bonds of $83 million related to the U.S. softwood lumber cash deposits. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Periodic Benefit Cost Relating to Pension and OPEB Plans | The components of net periodic benefit costs (credits) relating to our pension and OPEB plans for the three months ended March 31, 2022 and 2021, were as follows: Pension Plans: Three Months Ended (Unaudited, in millions) 2022 2021 Interest cost $ 36 $ 33 Expected return on plan assets (49) (54) Amortization of actuarial losses 17 21 Amortization of prior service credits — — Non-operating pension costs 4 — Service cost 3 4 Net periodic benefit costs before special events 7 4 Other loss (gain) 3 (1) $ 10 $ 3 OPEB Plans: Three Months Ended (Unaudited, in millions) 2022 2021 Interest cost $ 1 $ 1 Amortization of actuarial gains (1) (2) Non-operating other postretirement benefit credits — (1) Service cost — — Net periodic benefit credits before special events — (1) Curtailment gain — — $ — $ (1) |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of Statutory Tax Benefit (Provision) to Income Tax Benefit (Provision) | The income tax provision attributable to income before income taxes differs from the amounts computed by applying the U.S. federal statutory income tax rate of 21% for the three months ended March 31, 2022 and 2021, as a result of the following: Three Months Ended (Unaudited, in millions) 2022 2021 Income before income taxes $ 268 $ 128 Income tax provision: Expected income tax provision (56) (27) Changes resulting from: Valuation allowance 33 8 Foreign exchange 2 2 U.S. tax on non-U.S. earnings (29) (18) State income taxes, net of federal income tax benefit (1) 2 Foreign tax rate differences (13) (8) Other, net 6 1 $ (58) $ (40) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Information about certain segment data for the three months ended March 31, 2022 and 2021, was as follows: (Unaudited, in millions) Market Pulp (1) Tissue Wood Products (2) Paper Segment Corporate Total Sales First three months 2022 $ 184 $ 48 $ 463 $ 250 $ 945 $ — $ 945 2021 $ 176 $ 42 $ 430 $ 225 $ 873 $ — $ 873 Depreciation and amortization First three months 2022 $ 4 $ 5 $ 11 $ 9 $ 29 $ 3 $ 32 2021 $ 6 $ 5 $ 11 $ 15 $ 37 $ 4 $ 41 Operating income (loss) First three months 2022 $ 22 $ (9) $ 219 $ 25 $ 257 $ (22) $ 235 2021 $ 4 $ (2) $ 221 $ (24) $ 199 $ (22) $ 177 (1) Inter-segment sales were $14 million and $7 million for the three months ended March 31, 2022 and 2021, respectively. These inter-segment sales, which were transacted at either the lowest market price of the previous month or cost, were excluded from market pulp sales. (2) Wood products sales to our previously-held joint ventures, which were transacted at arm’s length negotiated prices, were $12 million for the period up to the Acquisition Date and $13 million for the three months ended March 31, 2021. See Note 2, “Business Acquisition” for more information. |
Organization and Basis of Pre_3
Organization and Basis of Presentation - Narrative (Details) | Mar. 31, 2022countrysite |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of countries products are marketed in (approximate) | country | 60 |
Number of manufacturing facilities (approximate) | site | 40 |
Other Income (Expense), Net - S
Other Income (Expense), Net - Summary (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Other Income and Expenses [Abstract] | ||
Foreign exchange loss | $ (3) | $ (5) |
Gain (loss) on commodity contracts | 2 | (37) |
Income from equity method investments | 6 | 0 |
Gain on previously-held equity investments (Note 2) | 41 | 0 |
Miscellaneous expense | (1) | (3) |
Other income (expense), net (Note 3) | 45 | (45) |
Unrealized loss | $ (2) | $ 14 |
Business Acquisition - Narrativ
Business Acquisition - Narrative (Details) - USD ($) $ in Millions | Mar. 04, 2022 | Mar. 31, 2022 | Mar. 31, 2022 | Mar. 31, 2021 |
Business Acquisition [Line Items] | ||||
Cash consideration paid, net of cash acquired | $ 43 | $ 0 | ||
Resolute-LP Engineered Wood Larouche Inc. And Resolute-LP Engineered Wood St-Prime Limited Partnership | ||||
Business Acquisition [Line Items] | ||||
Equity interest (as percentage) | 50.00% | |||
Larouche and St-Prime | ||||
Business Acquisition [Line Items] | ||||
Initial equity investments | $ 18 | |||
Fair value of the previously held interests in Larouche and St-Prime | 59 | |||
Gain on equity investments | $ 41 | |||
Business combination, revenue of acquiree since acquisition date, actual | $ 14 | |||
Business combination, earnings or loss of acquiree since acquisition date, actual | $ 0 | |||
Louisiana-Pacific Corporation Joint Ventures | ||||
Business Acquisition [Line Items] | ||||
Proportion of outstanding shares acquired (as a percent) | 50.00% | |||
Cash consideration paid, net of cash acquired | $ 51 | |||
Purchase price adjustment | 1 | |||
Cash acquired in acquisition | $ 8 |
Business Acquisition - Purchase
Business Acquisition - Purchase Price Allocation (Details) - USD ($) $ in Millions | Mar. 04, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 104 | $ 31 | |
Larouche and St-Prime | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 16 | ||
Accounts receivable | 11 | ||
Inventories | 16 | ||
Current assets acquired | 43 | ||
Fixed assets | 6 | ||
Goodwill | 73 | ||
Deferred income tax assets | 1 | ||
Total assets acquired and goodwill | 123 | ||
Accounts payable and other | 4 | ||
Current liabilities assumed | 4 | ||
Pension and other postretirement benefit obligations | 1 | ||
Total liabilities assumed | 5 | ||
Net assets acquired | 118 | ||
Cash consideration transferred | 59 | ||
Fair value of the previously held interests in Larouche and St-Prime | 59 | ||
Total fair value of consideration | $ 118 |
Business Acquisition - Pro Form
Business Acquisition - Pro Forma Information (Details) - Larouche and St-Prime - USD ($) $ in Millions | Mar. 04, 2022 | Mar. 31, 2022 | Mar. 31, 2021 |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||
Sales | $ 965 | $ 887 | |
Net income attributable to Resolute Forest Products Inc. | $ 182 | $ 120 | |
Gain on equity investments | $ 41 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Accumulated Other Comprehensive Loss by Component (Net of Tax) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | $ 1,517 | $ 1,082 |
Other comprehensive income before reclassifications (1) | 11 | |
Amounts reclassified from accumulated other comprehensive loss | 15 | 14 |
Other comprehensive income, net of tax | 26 | 36 |
Balance at end of period | 1,752 | 1,187 |
Curtailment gain (loss) | (4) | 8 |
Curtailment and actuarial gain, before tax | 10 | 30 |
Curtailment and actuarial gain, net of tax | 10 | 22 |
Total | ||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | (1,062) | (1,314) |
Other comprehensive income before reclassifications (1) | 22 | |
Other comprehensive income, net of tax | 26 | 36 |
Balance at end of period | (1,036) | (1,278) |
Unamortized Prior Service Costs | ||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | (5) | (1) |
Other comprehensive income before reclassifications (1) | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 0 | (1) |
Other comprehensive income, net of tax | 0 | (1) |
Balance at end of period | (5) | (2) |
Unamortized Actuarial Losses | ||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | (1,051) | (1,307) |
Other comprehensive income before reclassifications (1) | 10 | 22 |
Amounts reclassified from accumulated other comprehensive loss | 15 | 15 |
Other comprehensive income, net of tax | 25 | 37 |
Balance at end of period | (1,026) | (1,270) |
Actuarial gain | 14 | 22 |
Foreign Currency Translation | ||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | (6) | (6) |
Other comprehensive income before reclassifications (1) | 1 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Other comprehensive income, net of tax | 1 | 0 |
Balance at end of period | $ (5) | $ (6) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - Reclassifications Out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Curtailment gain | $ 4 | $ (8) |
Income tax effect of the above | (58) | (40) |
Total reclassification, net of tax | 210 | 87 |
Amounts Reclassified from Accumulated Other Comprehensive Loss | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total reclassification, net of tax | 15 | 14 |
Unamortized Prior Service Costs | Amounts Reclassified from Accumulated Other Comprehensive Loss | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Amortization of prior service costs | 0 | 0 |
Curtailment gain | 0 | (1) |
Income tax effect of the above | 0 | 0 |
Total reclassification, net of tax | 0 | (1) |
Unamortized Actuarial Losses | Amounts Reclassified from Accumulated Other Comprehensive Loss | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Amortization of actuarial losses | 16 | 19 |
Other items | 3 | 0 |
Income tax effect of the above | (4) | (4) |
Total reclassification, net of tax | $ 15 | $ 15 |
Net Income Per Share - Schedule
Net Income Per Share - Schedule of Weighted-Average Outstanding Stock Options and Nonvested Equity-Classified RSUs, DSUs and PSUs (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Net income attributable to Resolute Forest Products Inc. | $ 210 | $ 87 |
Weighted-average number of Resolute Forest Products Inc. common shares outstanding (shares) | 77.4 | 81.2 |
Dilutive impact of nonvested stock unit awards and stock options (shares) | 0.8 | 0.7 |
Diluted weighted-average number of Resolute Forest Products Inc. common shares outstanding (shares) | 78.2 | 81.9 |
Basic (USD per share) | $ 2.71 | $ 1.07 |
Diluted (USD per share) | $ 2.68 | $ 1.06 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 0.3 | 0.8 |
Stock unit awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 0 | 0 |
Inventories, Net - Summary (Det
Inventories, Net - Summary (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 174 | $ 159 |
Work in process | 62 | 57 |
Finished goods | 205 | 148 |
Mill stores and other supplies | 154 | 146 |
Inventories, net | $ 595 | $ 510 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 |
Other Assets [Abstract] | |||
Countervailing duty cash deposits on softwood lumber (Note 12) | $ 365 | $ 339 | |
Anti-dumping duty cash deposits on softwood lumber (Note 12) | 75 | 58 | |
Equity method investments | 11 | 22 | |
Restricted cash | 40 | 40 | $ 40 |
Other | 25 | 25 | |
Other assets | $ 516 | $ 484 |
Accounts Payable and Other - Su
Accounts Payable and Other - Summary (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Trade accounts payable | $ 308 | $ 262 |
Accrued compensation | 62 | 89 |
Accrued interest | 2 | 6 |
Pension and other postretirement benefit obligations | 14 | 14 |
Accrued provision related to Fibrek Inc. litigation (Note 12) | 22 | 21 |
Income and other taxes payable | 5 | 4 |
Other | 29 | 25 |
Accounts payable and accrued liabilities | $ 442 | $ 421 |
Long-Term Debt - Long Term Debt
Long-Term Debt - Long Term Debt, including Current Portion (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Feb. 02, 2021 |
Debt Instrument [Line Items] | |||
Finance lease obligations | $ 6 | $ 6 | |
Other debt | 1 | 1 | |
Total debt | 302 | 302 | |
Less: Current portion of finance lease obligations and other debt | (2) | (2) | |
Long-term debt, net of current portion | 300 | 300 | |
Senior Notes | Senior Notes due 2026 | |||
Debt Instrument [Line Items] | |||
Principal amount | 300 | 300 | |
Deferred financing costs | (5) | (5) | |
Net carrying amount | $ 295 | $ 295 | |
Interest rate of notes (as a percent) | 4.875% |
Long-Term Debt - Debt Availabil
Long-Term Debt - Debt Availabilities (Details) $ in Millions, $ in Millions | Mar. 31, 2022USD ($) | Mar. 31, 2022CAD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2021CAD ($) |
Debt Instrument [Line Items] | ||||
Available credit facility borrowing capacity | $ 913 | $ 841 | ||
Letters of credit outstanding to guarantee surety bonds | 53 | 53 | ||
Letters of credit outstanding related to lumber deposits | 83 | 83 | ||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Letters of credit amount outstanding | 73 | 73 | ||
ABL Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Available credit facility borrowing capacity | 377 | 307 | ||
Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Available credit facility borrowing capacity | 176 | $ 220 | 174 | $ 220 |
Senior Secured Credit Facility | Line of Credit | Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Available credit facility borrowing capacity | 180 | 180 | ||
Senior Secured Credit Facility | Line of Credit | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Available credit facility borrowing capacity | $ 180 | $ 180 |
Long-Term Debt - Senior Unsecur
Long-Term Debt - Senior Unsecured Notes (Details) - Senior Notes - USD ($) | Feb. 02, 2021 | Mar. 31, 2021 | Mar. 31, 2022 |
Senior Notes due 2026 | |||
Debt Instrument [Line Items] | |||
Principal amount of debt | $ 300,000,000 | ||
Interest rate of notes (as a percent) | 4.875% | ||
Issue price (as a percent) | 100.00% | ||
Fair value of senior notes | $ 300,000,000 | $ 289,000,000 | |
Deferred financing costs | $ 6,000,000 | ||
Senior Notes due 2023 | |||
Debt Instrument [Line Items] | |||
Interest rate of notes (as a percent) | 5.875% | ||
Fair value of senior notes | $ 375,000,000 | ||
Redemption price (as a percent) | 100.00% | ||
Loss on extinguishment of debt | $ 3,000,000 |
Long-Term Debt - Senior Secured
Long-Term Debt - Senior Secured Credit Facility (Details) - Amended Senior Secured Credit Facility | Apr. 19, 2021USD ($) |
Debt Instrument [Line Items] | |
Principal amount of debt | $ 360,000,000 |
Secured Debt | |
Debt Instrument [Line Items] | |
Principal amount of debt | $ 180,000,000 |
Delay draw period of debt instrument | 3 years |
Secured Debt | Term Loan Facility | |
Debt Instrument [Line Items] | |
Repayment of debt | $ 180,000,000 |
Secured Debt | Minimum | |
Debt Instrument [Line Items] | |
Debt instrument, term | 6 years |
Secured Debt | Maximum | |
Debt Instrument [Line Items] | |
Debt instrument, term | 10 years |
Line of Credit | |
Debt Instrument [Line Items] | |
Debt instrument, term | 6 years |
Maximum borrowing capacity of credit facility | $ 180,000,000 |
Uncommitted ability to increase borrowing capacity, maximum | $ 360,000,000 |
Long-Term Debt - ABL Credit Fac
Long-Term Debt - ABL Credit Facility (Details) - Revolving Credit Facility - USD ($) | Jan. 21, 2021 | May 14, 2019 |
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity of credit facility | $ 450,000,000 | $ 500,000,000 |
Canadian Tranche of Senior Secured Asset-Based Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity of credit facility | 250,000,000 | |
Increase (decrease) in borrowings | $ 50,000,000 |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Net Periodic Benefit Cost Relating to Pension and OPEB Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Non-operating pension and other postretirement benefit costs (credits) | $ 7 | $ (2) |
Pension Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | 36 | 33 |
Expected return on plan assets | (49) | (54) |
Amortization of actuarial losses | 17 | 21 |
Amortization of prior service credits | 0 | 0 |
Non-operating pension and other postretirement benefit costs (credits) | 4 | 0 |
Service cost | 3 | 4 |
Net periodic benefit costs (credits) before special events | 7 | 4 |
Other (gain) loss and curtailment gain | 3 | (1) |
Net periodic benefit cost | 10 | 3 |
OPEB Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | 1 | 1 |
Amortization of actuarial losses | (1) | (2) |
Non-operating pension and other postretirement benefit costs (credits) | 0 | (1) |
Service cost | 0 | 0 |
Net periodic benefit costs (credits) before special events | 0 | (1) |
Other (gain) loss and curtailment gain | 0 | 0 |
Net periodic benefit cost | $ 0 | $ (1) |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Retirement Benefits [Abstract] | ||
Expense for the defined contribution plans | $ 5 | $ 5 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Tax Benefit (Provision) to Income Tax Benefit (Provision) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income before income taxes | $ 268 | $ 128 |
Income tax provision: | ||
Expected income tax provision | (56) | (27) |
Changes resulting from: | ||
Valuation allowance | 33 | 8 |
Foreign exchange | 2 | 2 |
U.S. tax on non-U.S. earnings | (29) | (18) |
State income taxes, net of federal income tax benefit | (1) | 2 |
Foreign tax rate differences | (13) | (8) |
Other, net | 6 | 1 |
Income tax provision | $ (58) | $ (40) |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ / shares in Units, $ in Millions, $ in Millions | May 20, 2021 | Apr. 28, 2017 | Mar. 31, 2022USD ($) | Mar. 31, 2022CAD ($) | Mar. 31, 2022CAD ($)$ / shares | Dec. 31, 2021USD ($) | Dec. 31, 2021CAD ($) | Dec. 02, 2021 | Dec. 01, 2020 | Nov. 30, 2020 | Nov. 13, 2019CAD ($) | Nov. 02, 2017 | Jun. 30, 2017 | Jul. 31, 2012 |
Loss Contingencies [Line Items] | ||||||||||||||
Preliminary countervailing duty rate on certain Canadian softwood lumber imported to the U.S. market (as a percent) | 15.48% | 12.82% | ||||||||||||
Final determination countervailing duty rate on certain Canadian softwood lumber imported to the U.S. market (as a percent) | 18.07% | 18.07% | 19.10% | 14.70% | ||||||||||
Accumulated countervailing cash deposits made on softwood lumber exports | $ 365 | |||||||||||||
Preliminary anti-dumping rate on certain Canadian softwood lumber imported to the U.S. market (as a percent) | 4.59% | |||||||||||||
Final determination anti-dumping rate on certain Canadian softwood lumber imported to the U.S. market (as a percent) | 4.76% | 11.59% | 1.15% | 3.20% | ||||||||||
Accumulated anti-dumping cash deposits made on softwood lumber exports | 75 | |||||||||||||
Other liabilities | 81 | $ 88 | ||||||||||||
Legal hypothec on immovable and movable property | $ 30 | |||||||||||||
Maximum deficit from partial wind-up of pension plans to be funded | 120 | $ 150 | ||||||||||||
Environmental Remediation Obligations [Abstract] | ||||||||||||||
Environmental liabilities | 13 | 13 | ||||||||||||
Asset retirement obligations | 37 | 36 | ||||||||||||
Fibrek | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Proportion of outstanding shares acquired (as a percent) | 25.40% | |||||||||||||
Determined per share fair value of dissenting shareholders' shares | $ / shares | $ 1.99 | |||||||||||||
Determined fair value of dissenting shareholders' shares | $ 31 | |||||||||||||
Determined fair value of dissenting shareholders' shares including interest and indemnity | 44 | |||||||||||||
Amount accrued to be contingently distributed | 14 | |||||||||||||
Change in amount of contingent consideration | 23 | $ 30 | ||||||||||||
Amount paid, contingent consideration, business combination | 14 | 19 | ||||||||||||
Fibrek | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Other liabilities | 22 | $ 27 | $ 21 | $ 27 | ||||||||||
Softwood Lumber Duties Investigations | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Contingent loss recorded | 0 | |||||||||||||
Surety Bond | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Surety bonds outstanding | 83 | |||||||||||||
Standby Letters of Credit | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Surety bonds outstanding | $ 53 |
Share Capital - Narrative (Deta
Share Capital - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 07, 2021 | Mar. 02, 2020 | |
Dividends Payable [Line Items] | ||||
Share repurchase program, authorized amount | $ 100 | |||
Share repurchase program, stock repurchased (shares) | 125,482 | 1,700,000 | ||
Average price of treasury stock acquired (USD per share) | $ 11.34 | $ 9.50 | ||
Share repurchase program, aggregate purchase price | $ 2 | $ 17 | ||
Share repurchase program, authorized maximum percentage of common stock to be repurchased (as a percent) | 15.00% | |||
December 2021 Share Repurchase Program | ||||
Dividends Payable [Line Items] | ||||
Share repurchase program, authorized amount (in shares) | 10,000,000 | |||
Share repurchase program, authorized amount | $ 100 |
Segment Information - Segment R
Segment Information - Segment Reporting Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Sales | $ 945 | $ 873 |
Depreciation and amortization | 32 | 41 |
Operating income (loss) | 235 | 177 |
Operating segments | Market Pulp | ||
Segment Reporting Information [Line Items] | ||
Sales | 184 | 176 |
Depreciation and amortization | 4 | 6 |
Operating income (loss) | 22 | 4 |
Operating segments | Tissue | ||
Segment Reporting Information [Line Items] | ||
Sales | 48 | 42 |
Depreciation and amortization | 5 | 5 |
Operating income (loss) | (9) | (2) |
Operating segments | Wood Products | ||
Segment Reporting Information [Line Items] | ||
Sales | 463 | 430 |
Depreciation and amortization | 11 | 11 |
Operating income (loss) | 219 | 221 |
Joint venture sales | 12 | 13 |
Operating segments | Paper | ||
Segment Reporting Information [Line Items] | ||
Sales | 250 | 225 |
Depreciation and amortization | 9 | 15 |
Operating income (loss) | 25 | (24) |
Operating segments | Segment Total | ||
Segment Reporting Information [Line Items] | ||
Sales | 945 | 873 |
Depreciation and amortization | 29 | 37 |
Operating income (loss) | 257 | 199 |
Corporate and Other | Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Sales | 0 | 0 |
Depreciation and amortization | 3 | 4 |
Operating income (loss) | (22) | (22) |
Intersegment eliminations | Market Pulp | ||
Segment Reporting Information [Line Items] | ||
Sales | $ 14 | $ 7 |