Condensed Consolidating Financial Information | 9 Months Ended |
Sep. 30, 2013 |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ' |
Condensed Consolidating Financial Information | ' |
Note 16. Condensed Consolidating Financial Information |
The following information is presented in accordance with Rule 3-10 of Regulation S-X and the public information requirements of Rule 144 promulgated pursuant to the Securities Act of 1933, as amended, in connection with Resolute Forest Products Inc.’s 2018 Notes and 2023 Notes that are fully and unconditionally guaranteed, on a joint and several basis, by all of our 100% owned material U.S. subsidiaries (the “Guarantor Subsidiaries”). The 2018 Notes and 2023 Notes are not guaranteed by our foreign subsidiaries and our less than 100% owned U.S. subsidiaries (the “Non-guarantor Subsidiaries”). |
The following condensed consolidating financial information sets forth the Statements of Operations and Comprehensive (Loss) Income for the three and nine months ended September 30, 2013 and 2012, the Balance Sheets as of September 30, 2013 and December 31, 2012 and the Statements of Cash Flows for the nine months ended September 30, 2013 and 2012 for Resolute Forest Products Inc. (the “Parent”), the Guarantor Subsidiaries on a combined basis and the Non-guarantor Subsidiaries on a combined basis. The condensed consolidating financial information reflects the investments of the Parent in the Guarantor Subsidiaries and Non-guarantor Subsidiaries, as well as the investments of the Guarantor Subsidiaries in the Non-guarantor Subsidiaries, using the equity method of accounting. The principal consolidating adjustments are elimination entries to eliminate the investments in subsidiaries and intercompany balances and transactions. |
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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME |
For the For the Three Months Ended September 30, 2013 |
(Unaudited, in millions) | Parent | Guarantor | Non-guarantor | Consolidating | Consolidated |
Subsidiaries | Subsidiaries | Adjustments |
Sales | $ | — | | | $ | 933 | | | $ | 775 | | | $ | (578 | ) | | $ | 1,130 | | |
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Costs and expenses: | | | | | | | | | | | | | | | |
Cost of sales, excluding depreciation and amortization | | — | | | | 848 | | | | 587 | | | | (578 | ) | | | 857 | | |
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Depreciation and amortization | | — | | | | 25 | | | | 36 | | | | — | | | | 61 | | |
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Distribution costs | | — | | | | 42 | | | | 95 | | | | (3 | ) | | | 134 | | |
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Selling, general and administrative expenses | | 6 | | | | 9 | | | | 23 | | | | — | | | | 38 | | |
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Closure costs, impairment and other related charges | | — | | | | — | | | | 4 | | | | — | | | | 4 | | |
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Operating (loss) income | | (6 | ) | | | 9 | | | | 30 | | | | 3 | | | | 36 | | |
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Interest expense | | (16 | ) | | | (2 | ) | | | (2 | ) | | | 8 | | | | (12 | ) | |
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Other (expense) income, net | | (1 | ) | | | 12 | | | | 2 | | | | (8 | ) | | | 5 | | |
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Parent’s equity in loss of subsidiaries | | (521 | ) | | | — | | | | — | | | | 521 | | | | — | | |
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(Loss) income before income taxes | | (544 | ) | | | 19 | | | | 30 | | | | 524 | | | | 29 | | |
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Income tax (provision) benefit | | (44 | ) | | | (574 | ) | | | 1 | | | | — | | | | (617 | ) | |
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Net (loss) income including noncontrolling interests | | (588 | ) | | | (555 | ) | | | 31 | | | | 524 | | | | (588 | ) | |
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Net income attributable to noncontrolling interests | | — | | | | — | | | | — | | | | — | | | | — | | |
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Net (loss) income attributable to Resolute Forest Products Inc. | $ | (588 | ) | | $ | (555 | ) | | $ | 31 | | | $ | 524 | | | $ | (588 | ) | |
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Comprehensive (loss) income attributable to Resolute Forest Products Inc. | $ | (544 | ) | | $ | (520 | ) | | $ | 40 | | | $ | 480 | | | $ | (544 | ) | |
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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME |
For the For the Nine Months Ended September 30, 2013 |
(Unaudited, in millions) | Parent | Guarantor | Non-guarantor | Consolidating | Consolidated |
Subsidiaries | Subsidiaries | Adjustments |
Sales | $ | — | | | $ | 2,715 | | | $ | 2,195 | | | $ | (1,599 | ) | | $ | 3,311 | | |
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Costs and expenses: | | | | | | | | | | | | | | | |
Cost of sales, excluding depreciation and amortization | | — | | | | 2,481 | | | | 1,681 | | | | (1,590 | ) | | | 2,572 | | |
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Depreciation and amortization | | — | | | | 75 | | | | 107 | | | | — | | | | 182 | | |
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Distribution costs | | — | | | | 127 | | | | 266 | | | | (6 | ) | | | 387 | | |
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Selling, general and administrative expenses | | 16 | | | | 36 | | | | 74 | | | | — | | | | 126 | | |
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Closure costs, impairment and other related charges | | — | | | | 49 | | | | 7 | | | | — | | | | 56 | | |
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Net gain on disposition of assets | | — | | | | — | | | | (2 | ) | | | — | | | | (2 | ) | |
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Operating (loss) income | | (16 | ) | | | (53 | ) | | | 62 | | | | (3 | ) | | | (10 | ) | |
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Interest expense | | (71 | ) | | | (3 | ) | | | (6 | ) | | | 41 | | | | (39 | ) | |
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Other (expense) income, net | | (60 | ) | | | 57 | | | | 2 | | | | (41 | ) | | | (42 | ) | |
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Parent’s equity in loss of subsidiaries | | (489 | ) | | | — | | | | — | | | | 489 | | | | — | | |
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(Loss) income before income taxes | | (636 | ) | | | 1 | | | | 58 | | | | 486 | | | | (91 | ) | |
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Income tax provision | | — | | | | (534 | ) | | | (13 | ) | | | 1 | | | | (546 | ) | |
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Net (loss) income including noncontrolling interests | | (636 | ) | | | (533 | ) | | | 45 | | | | 487 | | | | (637 | ) | |
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Net loss attributable to noncontrolling interests | | — | | | | — | | | | 1 | | | | — | | | | 1 | | |
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Net (loss) income attributable to Resolute Forest Products Inc. | $ | (636 | ) | | $ | (533 | ) | | $ | 46 | | | $ | 487 | | | $ | (636 | ) | |
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Comprehensive (loss) income attributable to Resolute Forest Products Inc. | $ | (587 | ) | | $ | (480 | ) | | $ | 42 | | | $ | 438 | | | $ | (587 | ) | |
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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME |
For the Three Months Ended September 30, 2012 |
(Unaudited, in millions) | Parent | Guarantor | Non-guarantor | Consolidating | Consolidated |
Subsidiaries | Subsidiaries | Adjustments |
Sales | $ | — | | | $ | 718 | | | $ | 797 | | | $ | (362 | ) | | $ | 1,153 | | |
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Costs and expenses: | | | | | | | | | | | | | | | |
Cost of sales, excluding depreciation and amortization | | — | | | | 635 | | | | 617 | | | | (362 | ) | | | 890 | | |
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Depreciation and amortization | | — | | | | 23 | | | | 36 | | | | — | | | | 59 | | |
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Distribution costs | | — | | | | 36 | | | | 95 | | | | — | | | | 131 | | |
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Selling, general and administrative expenses | | 6 | | | | 10 | | | | 25 | | | | — | | | | 41 | | |
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Closure costs, impairment and other related charges | | — | | | | 4 | | | | 1 | | | | — | | | | 5 | | |
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Net gain on disposition of assets | | — | | | | — | | | | (4 | ) | | | — | | | | (4 | ) | |
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Operating (loss) income | | (6 | ) | | | 10 | | | | 27 | | | | — | | | | 31 | | |
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Interest expense | | (57 | ) | | | (1 | ) | | | (1 | ) | | | 42 | | | | (17 | ) | |
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Other income, net | | — | | | | 47 | | | | 14 | | | | (42 | ) | | | 19 | | |
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Parent’s equity in income of subsidiaries | | 78 | | | | — | | | | — | | | | (78 | ) | | | — | | |
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Income before income taxes | | 15 | | | | 56 | | | | 40 | | | | (78 | ) | | | 33 | | |
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Income tax benefit (provision) | | 22 | | | | (33 | ) | | | 15 | | | | — | | | | 4 | | |
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Net income including noncontrolling interests | | 37 | | | | 23 | | | | 55 | | | | (78 | ) | | | 37 | | |
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Net income attributable to noncontrolling interests | | — | | | | — | | | | — | | | | — | | | | — | | |
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Net income attributable to Resolute Forest Products Inc. | $ | 37 | | | $ | 23 | | | $ | 55 | | | $ | (78 | ) | | $ | 37 | | |
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Comprehensive income attributable to Resolute Forest Products Inc. | $ | 40 | | | $ | 23 | | | $ | 58 | | | $ | (81 | ) | | $ | 40 | | |
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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME |
For the Nine Months Ended September 30, 2012 |
(Unaudited, in millions) | Parent | Guarantor | Non-guarantor | Consolidating | Consolidated |
Subsidiaries | Subsidiaries | Adjustments |
Sales | $ | — | | | $ | 2,163 | | | $ | 2,328 | | | $ | (1,116 | ) | | $ | 3,375 | | |
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Costs and expenses: | | | | | | | | | | | | | | | |
Cost of sales, excluding depreciation and amortization | | — | | | | 1,914 | | | | 1,804 | | | | (1,116 | ) | | | 2,602 | | |
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Depreciation and amortization | | — | | | | 69 | | | | 105 | | | | — | | | | 174 | | |
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Distribution costs | | — | | | | 106 | | | | 279 | | | | — | | | | 385 | | |
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Selling, general and administrative expenses | | 18 | | | | 33 | | | | 63 | | | | — | | | | 114 | | |
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Closure costs, impairment and other related charges | | — | | | | 4 | | | | 94 | | | | — | | | | 98 | | |
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Net gain on disposition of assets | | — | | | | — | | | | (28 | ) | | | — | | | | (28 | ) | |
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Operating (loss) income | | (18 | ) | | | 37 | | | | 11 | | | | — | | | | 30 | | |
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Interest expense | | (163 | ) | | | (3 | ) | | | (6 | ) | | | 121 | | | | (51 | ) | |
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Other income, net | | — | | | | 130 | | | | 13 | | | | (121 | ) | | | 22 | | |
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Parent’s equity in income of subsidiaries | | 162 | | | | — | | | | — | | | | (162 | ) | | | — | | |
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(Loss) income before income taxes | | (19 | ) | | | 164 | | | | 18 | | | | (162 | ) | | | 1 | | |
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Income tax benefit (provision) | | 65 | | | | (66 | ) | | | 11 | | | | — | | | | 10 | | |
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Net income including noncontrolling interests | | 46 | | | | 98 | | | | 29 | | | | (162 | ) | | | 11 | | |
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Net loss attributable to noncontrolling interests | | — | | | | — | | | | 35 | | | | — | | | | 35 | | |
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Net income attributable to Resolute Forest Products Inc. | $ | 46 | | | $ | 98 | | | $ | 64 | | | $ | (162 | ) | | $ | 46 | | |
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Comprehensive income attributable to Resolute Forest Products Inc. | $ | 45 | | | $ | 98 | | | $ | 63 | | | $ | (161 | ) | | $ | 45 | | |
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CONDENSED CONSOLIDATING BALANCE SHEET |
As of September 30, 2013 |
(Unaudited, in millions) | Parent | Guarantor | Non-guarantor | Consolidating | Consolidated |
Subsidiaries | Subsidiaries | Adjustments |
Assets | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | |
Cash and cash equivalents | $ | — | | | $ | 181 | | | $ | 90 | | | $ | — | | | $ | 271 | | |
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Accounts receivable, net | | — | | | | 458 | | | | 246 | | | | — | | | | 704 | | |
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Accounts receivable from affiliates | | — | | | | 132 | | | | 196 | | | | (328 | ) | | | — | | |
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Inventories, net | | — | | | | 220 | | | | 315 | | | | (7 | ) | | | 528 | | |
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Deferred income tax assets | | — | | | | — | | | | 44 | | | | — | | | | 44 | | |
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Interest receivable from parent | | — | | | | 11 | | | | — | | | | (11 | ) | | | — | | |
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Note receivable from subsidiary | | 13 | | | | — | | | | — | | | | (13 | ) | | | — | | |
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Other current assets | | — | | | | 32 | | | | 49 | | | | — | | | | 81 | | |
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Total current assets | | 13 | | | | 1,034 | | | | 940 | | | | (359 | ) | | | 1,628 | | |
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Fixed assets, net | | — | | | | 874 | | | | 1,456 | | | | — | | | | 2,330 | | |
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Amortizable intangible assets, net | | — | | | | — | | | | 66 | | | | — | | | | 66 | | |
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Deferred income tax assets | | — | | | | — | | | | 1,338 | | | | 2 | | | | 1,340 | | |
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Notes receivable from parent | | — | | | | 622 | | | | — | | | | (622 | ) | | | — | | |
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Notes receivable from affiliates | | — | | | | 520 | | | | — | | | | (520 | ) | | | — | | |
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Investments in and advances to consolidated subsidiaries | | 4,417 | | | | 2,085 | | | | — | | | | (6,502 | ) | | | — | | |
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Other assets | | 8 | | | | 115 | | | | 68 | | | | — | | | | 191 | | |
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Total assets | $ | 4,438 | | | $ | 5,250 | | | $ | 3,868 | | | $ | (8,001 | ) | | $ | 5,555 | | |
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Liabilities and equity | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | |
Accounts payable and accrued liabilities | $ | 15 | | | $ | 191 | | | $ | 354 | | | $ | — | | | $ | 560 | | |
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Current portion of long-term debt | | 5 | | | | — | | | | 2 | | | | — | | | | 7 | | |
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Accounts payable to affiliates | | 328 | | | | — | | | | — | | | | (328 | ) | | | — | | |
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Interest payable to subsidiary | | 11 | | | | — | | | | — | | | | (11 | ) | | | — | | |
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Note payable to parent | | — | | | | — | | | | 13 | | | | (13 | ) | | | — | | |
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Total current liabilities | | 359 | | | | 191 | | | | 369 | | | | (352 | ) | | | 567 | | |
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Long-term debt, net of current portion | | 594 | | | | 3 | | | | — | | | | — | | | | 597 | | |
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Long-term debt due to subsidiaries | | 622 | | | | — | | | | — | | | | (622 | ) | | | — | | |
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Long-term debt due to affiliate | | — | | | | — | | | | 520 | | | | (520 | ) | | | — | | |
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Pension and other postretirement benefit obligations | | — | | | | 463 | | | | 1,279 | | | | — | | | | 1,742 | | |
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Deferred income tax liabilities | | — | | | | 11 | | | | 27 | | | | — | | | | 38 | | |
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Other long-term liabilities | | — | | | | 28 | | | | 37 | | | | — | | | | 65 | | |
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Total liabilities | | 1,575 | | | | 696 | | | | 2,232 | | | | (1,494 | ) | | | 3,009 | | |
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Total equity | | 2,863 | | | | 4,554 | | | | 1,636 | | | | (6,507 | ) | | | 2,546 | | |
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Total liabilities and equity | $ | 4,438 | | | $ | 5,250 | | | $ | 3,868 | | | $ | (8,001 | ) | | $ | 5,555 | | |
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CONDENSED CONSOLIDATING BALANCE SHEET |
As of December 31, 2012 |
(Unaudited, in millions) | Parent | Guarantor | Non-guarantor | Consolidating | Consolidated |
Subsidiaries | Subsidiaries | Adjustments |
Assets | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | |
Cash and cash equivalents | $ | 5 | | | $ | 171 | | | $ | 87 | | | $ | — | | | $ | 263 | | |
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Accounts receivable, net | | — | | | | 383 | | | | 366 | | | | (52 | ) | | | 697 | | |
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Accounts receivable from affiliates | | — | | | | 262 | | | | 211 | | | | (473 | ) | | | — | | |
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Inventories, net | | — | | | | 221 | | | | 328 | | | | (4 | ) | | | 545 | | |
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Deferred income tax assets | | — | | | | 11 | | | | 45 | | | | — | | | | 56 | | |
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Notes and interest receivable from parent | | — | | | | 593 | | | | — | | | | (593 | ) | | | — | | |
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Notes receivable from affiliates | | — | | | | 9 | | | | 138 | | | | (147 | ) | | | — | | |
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Note receivable from subsidiary | | 41 | | | | — | | | | — | | | | (41 | ) | | | — | | |
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Other current assets | | — | | | | 22 | | | | 47 | | | | — | | | | 69 | | |
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Total current assets | | 46 | | | | 1,672 | | | | 1,222 | | | | (1,310 | ) | | | 1,630 | | |
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Fixed assets, net | | — | | | | 908 | | | | 1,532 | | | | — | | | | 2,440 | | |
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Amortizable intangible assets, net | | — | | | | — | | | | 69 | | | | — | | | | 69 | | |
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Deferred income tax assets | | — | | | | 594 | | | | 1,405 | | | | 1 | | | | 2,000 | | |
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Note receivable from affiliate | | — | | | | 531 | | | | — | | | | (531 | ) | | | — | | |
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Investments in and advances to consolidated subsidiaries | | 4,859 | | | | 2,089 | | | | — | | | | (6,948 | ) | | | — | | |
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Other assets | | — | | | | 98 | | | | 96 | | | | — | | | | 194 | | |
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Total assets | $ | 4,905 | | | $ | 5,892 | | | $ | 4,324 | | | $ | (8,788 | ) | | $ | 6,333 | | |
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Liabilities and equity | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | |
Accounts payable and accrued liabilities | $ | 11 | | | $ | 198 | | | $ | 424 | | | $ | (52 | ) | | $ | 581 | | |
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Current portion of long-term debt | | — | | | | — | | | | 2 | | | | — | | | | 2 | | |
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Accounts payable to affiliates | | 336 | | | | 135 | | | | 2 | | | | (473 | ) | | | — | | |
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Notes and interest payable to subsidiaries | | 593 | | | | — | | | | — | | | | (593 | ) | | | — | | |
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Notes payable to affiliates | | — | | | | 138 | | | | 9 | | | | (147 | ) | | | — | | |
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Note payable to parent | | — | | | | — | | | | 41 | | | | (41 | ) | | | — | | |
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Total current liabilities | | 940 | | | | 471 | | | | 478 | | | | (1,306 | ) | | | 583 | | |
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Long-term debt, net of current portion | | 528 | | | | 3 | | | | 1 | | | | — | | | | 532 | | |
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Long-term debt due to affiliate | | — | | | | — | | | | 531 | | | | (531 | ) | | | — | | |
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Pension and other postretirement benefit obligations | | — | | | | 559 | | | | 1,387 | | | | — | | | | 1,946 | | |
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Deferred income tax liabilities | | — | | | | — | | | | 75 | | | | — | | | | 75 | | |
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Other long-term liabilities | | — | | | | 36 | | | | 36 | | | | — | | | | 72 | | |
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Total liabilities | | 1,468 | | | | 1,069 | | | | 2,508 | | | | (1,837 | ) | | | 3,208 | | |
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Total equity | | 3,437 | | | | 4,823 | | | | 1,816 | | | | (6,951 | ) | | | 3,125 | | |
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Total liabilities and equity | $ | 4,905 | | | $ | 5,892 | | | $ | 4,324 | | | $ | (8,788 | ) | | $ | 6,333 | | |
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CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS |
Nine Months Ended September 30, 2013 |
(Unaudited, in millions) | Parent | Guarantor | Non-guarantor | Consolidating | Consolidated |
Subsidiaries | Subsidiaries | Adjustments |
Net cash provided by operating activities | $ | — | | | $ | 37 | | | $ | 73 | | | $ | — | | | $ | 110 | | |
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Cash flows from investing activities: | | | | | | | | | | | | | | | |
Cash invested in fixed assets | | — | | | | (45 | ) | | | (79 | ) | | | — | | | | (124 | ) | |
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Disposition of assets | | — | | | | — | | | | 4 | | | | — | | | | 4 | | |
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Proceeds from insurance settlements | | — | | | | — | | | | 4 | | | | — | | | | 4 | | |
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Decrease in restricted cash | | — | | | | — | | | | 3 | | | | — | | | | 3 | | |
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Advances (to) from affiliates | | (10 | ) | | | 10 | | | | — | | | | — | | | | — | | |
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Net cash used in investing activities | | (10 | ) | | | (35 | ) | | | (68 | ) | | | — | | | | (113 | ) | |
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Cash flows from financing activities: | | | | | | | | | | | | | | | |
Issuance of long-term debt | | 594 | | | | — | | | | — | | | | — | | | | 594 | | |
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Premium paid on extinguishment of debt | | (84 | ) | | | — | | | | — | | | | — | | | | (84 | ) | |
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Dividend to noncontrolling interest | | — | | | | — | | | | (1 | ) | | | — | | | | (1 | ) | |
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Payments of debt | | (496 | ) | | | — | | | | (1 | ) | | | — | | | | (497 | ) | |
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Payments of financing and credit facility fees | | (9 | ) | | | — | | | | — | | | | — | | | | (9 | ) | |
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Contribution of capital from noncontrolling interest | | — | | | | 8 | | | | — | | | | — | | | | 8 | | |
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Net cash provided by (used in) financing activities | | 5 | | | | 8 | | | | (2 | ) | | | — | | | | 11 | | |
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Net (decrease) increase in cash and cash equivalents | | (5 | ) | | | 10 | | | | 3 | | | | — | | | | 8 | | |
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Cash and cash equivalents: | | | | | | | | | | | | | | | |
Beginning of period | | 5 | | | | 171 | | | | 87 | | | | — | | | | 263 | | |
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End of period | $ | — | | | $ | 181 | | | $ | 90 | | | $ | — | | | $ | 271 | | |
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CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS |
For the Nine Months Ended September 30, 2012 |
(Unaudited, in millions) | Parent | Guarantor Subsidiaries | Non-guarantor Subsidiaries | Consolidating Adjustments | Consolidated |
Net cash provided by operating activities | $ | — | | | $ | 126 | | | $ | 66 | | | $ | — | | | $ | 192 | | |
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Cash flows from investing activities: | | | | | | | | | | | | | | | |
Cash invested in fixed assets | | — | | | | (29 | ) | | | (73 | ) | | | — | | | | (102 | ) | |
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Disposition of assets | | — | | | | — | | | | 31 | | | | — | | | | 31 | | |
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Acquisition of Fibrek, net of cash acquired | | — | | | | — | | | | (24 | ) | | | — | | | | (24 | ) | |
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Decrease in restricted cash | | — | | | | — | | | | 76 | | | | — | | | | 76 | | |
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Increase in deposit requirements for letters of credit, net | | — | | | | — | | | | (12 | ) | | | — | | | | (12 | ) | |
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Advances from (to) affiliates | | 47 | | | | (31 | ) | | | (16 | ) | | | — | | | | — | | |
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Net cash provided by (used in) investing activities | | 47 | | | | (60 | ) | | | (18 | ) | | | — | | | | (31 | ) | |
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Cash flows from financing activities: | | | | | | | | | | | | | | | |
Purchases of treasury stock | | (45 | ) | | | — | | | | — | | | | — | | | | (45 | ) | |
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Dividend to noncontrolling interest | | — | | | | — | | | | (3 | ) | | | — | | | | (3 | ) | |
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Acquisition of noncontrolling interest | | — | | | | — | | | | (27 | ) | | | — | | | | (27 | ) | |
|
Payments of long-term debt | | — | | | | — | | | | (112 | ) | | | — | | | | (112 | ) | |
|
Net cash used in financing activities | | (45 | ) | | | — | | | | (142 | ) | | | — | | | | (187 | ) | |
|
Net increase (decrease) in cash and cash equivalents | | 2 | | | | 66 | | | | (94 | ) | | | — | | | | (26 | ) | |
|
Cash and cash equivalents: | | | | | | | | | | | | | | | |
Beginning of period | | — | | | | 128 | | | | 241 | | | | — | | | | 369 | | |
|
End of period | $ | 2 | | | $ | 194 | | | $ | 147 | | | $ | — | | | $ | 343 | | |
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