Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 30, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-34056 | |
Entity Registrant Name | VERSO CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 75-3217389 | |
Entity Address, Address Line One | 8540 Gander Creek Drive | |
Entity Address, City or Town | Miamisburg | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 45342 | |
City Area Code | 877 | |
Local Phone Number | 855-7243 | |
Title of 12(b) Security | Class A common stock, par value $0.01 per share | |
Trading Symbol | VRS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Bankruptcy Proceedings, Reporting Current | true | |
Entity Common Stock, Class A, Shares Outstanding | 33,723,138 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001421182 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 73 | $ 42 |
Accounts receivable, net | 108 | 155 |
Inventories | 315 | 395 |
Assets held for sale | 4 | 0 |
Prepaid expenses and other assets | 6 | 7 |
Total current assets | 506 | 599 |
Property, plant and equipment, net | 711 | 945 |
Deferred tax assets | 119 | 92 |
Intangibles and other assets, net | 46 | 59 |
Total assets | 1,382 | 1,695 |
Current liabilities: | ||
Accounts payable | 97 | 188 |
Accrued and other liabilities | 85 | 103 |
Current maturities of long-term debt and finance leases | 1 | 2 |
Total current liabilities | 183 | 293 |
Long-term debt and finance leases | 4 | 5 |
Pension benefit obligation | 435 | 369 |
Other long-term liabilities | 33 | 41 |
Total liabilities | 655 | 708 |
Commitments and contingencies (Note 11) | ||
Equity: | ||
Preferred stock -- par value $0.01 (50,000,000 shares authorized, no shares issued) | 0 | 0 |
Common stock -- par value $0.01 (210,000,000 Class A shares authorized with 34,949,430 shares issued and 34,704,367 outstanding on December 31, 2019 and 35,790,600 shares issued and 33,687,197 outstanding on September 30, 2020; 40,000,000 Class B shares authorized with no shares issued and outstanding on December 31, 2019 and September 30, 2020) | 0 | 0 |
Treasury stock -- at cost (245,063 shares on December 31, 2019 and 2,103,403 shares on September 30, 2020) | (32) | (5) |
Paid-in-capital | 705 | 698 |
Retained earnings | 51 | 172 |
Accumulated other comprehensive income (loss) | 3 | 122 |
Total equity | 727 | 987 |
Total liabilities and equity | $ 1,382 | $ 1,695 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Treasury stock, shares (in shares) | 2,103,403 | 245,063 |
Common Class A | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 210,000,000 | 210,000,000 |
Common shares issued (in shares) | 35,790,600 | 34,949,430 |
Common stock, shares outstanding (in shares) | 33,687,197 | 34,704,367 |
Common Class B | ||
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 306,000,000 | $ 616,000,000 | $ 1,045,000,000 | $ 1,857,000,000 |
Costs and expenses: | ||||
Cost of products sold (exclusive of depreciation and amortization) | 309,000,000 | 536,000,000 | 1,007,000,000 | 1,625,000,000 |
Depreciation and amortization | 21,000,000 | 25,000,000 | 66,000,000 | 157,000,000 |
Selling, general and administrative expenses | 19,000,000 | 23,000,000 | 62,000,000 | 76,000,000 |
Restructuring charges | (2,000,000) | 4,000,000 | 4,000,000 | 44,000,000 |
Other operating (income) expense | 3,000,000 | 0 | (84,000,000) | 2,000,000 |
Operating income (loss) | (44,000,000) | 28,000,000 | (10,000,000) | (47,000,000) |
Interest expense | 1,000,000 | 0 | 1,000,000 | 2,000,000 |
Other (income) expense | (5,000,000) | (1,000,000) | (14,000,000) | (3,000,000) |
Income (loss) before income taxes | (40,000,000) | 29,000,000 | 3,000,000 | (46,000,000) |
Income tax expense (benefit) | (9,000,000) | (1,000,000) | 14,000,000 | 0 |
Net income (loss) | $ (31,000,000) | $ 30,000,000 | $ (11,000,000) | $ (46,000,000) |
Income (loss) per common share: | ||||
Basic (usd per share) | $ (0.92) | $ 0.86 | $ (0.33) | $ (1.33) |
Diluted (usd per share) | $ (0.92) | $ 0.85 | $ (0.33) | $ (1.33) |
Weighted average common shares outstanding (in thousands) | ||||
Basic (shares) | 33,675 | 34,686 | 34,440 | 34,599 |
Diluted (shares) | 33,675 | 35,137 | 34,440 | 34,599 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (31) | $ 30 | $ (11) | $ (46) |
Defined benefit pension plan: | ||||
Pension liability adjustment, net | (119) | 0 | (119) | 0 |
Other comprehensive income (loss), net of tax | (119) | 0 | (119) | 0 |
Comprehensive income (loss) | $ (150) | $ 30 | $ (130) | $ (46) |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common Class A | Common StockCommon Class A | Treasury Stock | Paid-in-Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Common shares, beginning of period (in shares) at Dec. 31, 2018 | 34,570,000 | ||||||
Stockholders' equity beginning of period at Dec. 31, 2018 | $ 906 | $ 0 | $ (2) | $ 686 | $ 102 | $ 120 | |
Treasury shares, beginning of period (in shares) at Dec. 31, 2018 | 86,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (46) | (46) | |||||
Treasury shares (in shares) | 159,000 | ||||||
Treasury shares | (3) | $ (3) | |||||
Other comprehensive income (loss), net of tax | 0 | ||||||
Common stock issued for restricted stock (in shares) | 366,000 | ||||||
Equity award expense | 10 | 10 | |||||
Common shares, end of period (in shares) at Sep. 30, 2019 | 34,936,000 | ||||||
Treasury shares, end of period (in shares) at Sep. 30, 2019 | 245,000 | ||||||
Stockholders' equity end of period at Sep. 30, 2019 | 867 | $ 0 | $ (5) | 696 | 56 | 120 | |
Common shares, beginning of period (in shares) at Dec. 31, 2018 | 34,570,000 | ||||||
Stockholders' equity beginning of period at Dec. 31, 2018 | $ 906 | $ 0 | $ (2) | 686 | 102 | 120 | |
Treasury shares, beginning of period (in shares) at Dec. 31, 2018 | 86,000 | ||||||
Common shares, end of period (in shares) at Dec. 31, 2019 | 34,949,430 | 34,949,000 | |||||
Treasury shares, end of period (in shares) at Dec. 31, 2019 | 245,063 | 245,000 | |||||
Stockholders' equity end of period at Dec. 31, 2019 | $ 987 | $ 0 | $ (5) | 698 | 172 | 122 | |
Common shares, beginning of period (in shares) at Jun. 30, 2019 | 34,911,000 | ||||||
Stockholders' equity beginning of period at Jun. 30, 2019 | 835 | $ 0 | $ (5) | 694 | 26 | 120 | |
Treasury shares, beginning of period (in shares) at Jun. 30, 2019 | 238,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 30 | 30 | |||||
Treasury shares (in shares) | 7,000 | ||||||
Treasury shares | 0 | ||||||
Other comprehensive income (loss), net of tax | 0 | ||||||
Common stock issued for restricted stock (in shares) | 25,000 | ||||||
Equity award expense | 2 | 2 | |||||
Common shares, end of period (in shares) at Sep. 30, 2019 | 34,936,000 | ||||||
Treasury shares, end of period (in shares) at Sep. 30, 2019 | 245,000 | ||||||
Stockholders' equity end of period at Sep. 30, 2019 | 867 | $ 0 | $ (5) | 696 | 56 | 120 | |
Common shares, beginning of period (in shares) at Dec. 31, 2019 | 34,949,430 | 34,949,000 | |||||
Stockholders' equity beginning of period at Dec. 31, 2019 | $ 987 | $ 0 | $ (5) | 698 | 172 | 122 | |
Treasury shares, beginning of period (in shares) at Dec. 31, 2019 | 245,063 | 245,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | $ (11) | (11) | |||||
Treasury shares (in shares) | 1,600,000 | 1,858,000 | |||||
Treasury shares | $ (27) | $ (27) | |||||
Other comprehensive income (loss), net of tax | (119) | (119) | |||||
Common stock issued for restricted stock (in shares) | 841,000 | ||||||
Dividends and dividend equivalents declared | (108) | 2 | (110) | ||||
Equity award expense | $ 5 | 5 | |||||
Common shares, end of period (in shares) at Sep. 30, 2020 | 35,790,600 | 35,790,000 | |||||
Treasury shares, end of period (in shares) at Sep. 30, 2020 | 2,103,403 | 2,103,000 | |||||
Stockholders' equity end of period at Sep. 30, 2020 | $ 727 | $ 0 | $ (32) | 705 | 51 | 3 | |
Common shares, beginning of period (in shares) at Jun. 30, 2020 | 35,766,000 | ||||||
Stockholders' equity beginning of period at Jun. 30, 2020 | 981 | $ 0 | $ (32) | 702 | 189 | 122 | |
Treasury shares, beginning of period (in shares) at Jun. 30, 2020 | 2,097,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (31) | (31) | |||||
Treasury shares (in shares) | 6,000 | ||||||
Treasury shares | 0 | ||||||
Other comprehensive income (loss), net of tax | (119) | (119) | |||||
Common stock issued for restricted stock (in shares) | 24,000 | ||||||
Dividends and dividend equivalents declared | (105) | 2 | (107) | ||||
Equity award expense | $ 1 | 1 | |||||
Common shares, end of period (in shares) at Sep. 30, 2020 | 35,790,600 | 35,790,000 | |||||
Treasury shares, end of period (in shares) at Sep. 30, 2020 | 2,103,403 | 2,103,000 | |||||
Stockholders' equity end of period at Sep. 30, 2020 | $ 727 | $ 0 | $ (32) | $ 705 | $ 51 | $ 3 |
UNAUDITED CONDENSED CONSOLIDA_6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Cash Flows From Operating Activities: | |||||
Net income (loss) | $ (31) | $ 30 | $ (11) | $ (46) | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||
Depreciation and amortization | 21 | 25 | 66 | 157 | |
Noncash restructuring charges | 0 | 20 | |||
Net periodic pension cost (income) | (12) | (1) | |||
Pension plan contributions | (47) | (34) | |||
Amortization of debt issuance cost and discount | 0 | 1 | |||
Equity award expense | 5 | 10 | |||
Gain on Sale of Androscoggin/Stevens Point Mills | (88) | 0 | |||
(Gain) loss on sale or disposal of assets | 3 | 0 | |||
Deferred taxes | 14 | 0 | |||
Changes in assets and liabilities: | |||||
Accounts receivable, net | 9 | (5) | |||
Inventories | (10) | (27) | |||
Prepaid expenses and other assets | 0 | 4 | |||
Accounts payable | (46) | (14) | |||
Accrued and other liabilities | (12) | (26) | |||
Net cash provided by (used in) operating activities | (129) | 39 | |||
Cash Flows From Investing Activities: | |||||
Proceeds from sale of assets | 1 | 1 | |||
Capital expenditures | (43) | (76) | |||
Net proceeds from Sale of the Androscoggin/Stevens Point Mills | 338 | 0 | |||
Net cash provided by (used in) investing activities | 296 | (75) | |||
Cash Flows From Financing Activities: | |||||
Borrowings on ABL Facility | 36 | 389 | |||
Payments on ABL Facility | (36) | (368) | |||
Principal payment on financing lease obligation | (1) | (1) | |||
Acquisition of treasury stock | (27) | (3) | |||
Dividends paid to stockholders | (108) | 0 | |||
Debt issuance costs | 0 | (1) | |||
Net cash provided by (used in) financing activities | (136) | 16 | |||
Change in Cash and cash equivalents and restricted cash | 31 | (20) | |||
Cash and cash equivalents and restricted cash at beginning of period | 44 | 28 | $ 28 | ||
Cash and cash equivalents and restricted cash at end of period | $ 75 | $ 8 | 75 | 8 | $ 44 |
Supplemental cash flow disclosures: | |||||
Total interest paid | 0 | 2 | |||
Total income taxes paid | 0 | 2 | |||
Noncash investing and financing activities: | |||||
Right-of-use assets recorded upon adoption of ASC 842 | 0 | 24 | |||
Right-of-use assets obtained in exchange for new finance lease liabilities | 0 | 7 | |||
Right-of-use assets obtained in exchange for new capitalized operating lease liabilities | $ 7 | $ 2 |
SUMMARY OF BUSINESS AND BASIS O
SUMMARY OF BUSINESS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUMMARY OF BUSINESS AND BASIS OF PRESENTATION | SUMMARY OF BUSINESS AND BASIS OF PRESENTATION Nature of Business — Verso’s core business platform is as a producer of graphic papers, specialty papers, packaging papers and pulp. Verso’s products are used primarily in media and marketing applications, including catalogs, magazines, commercial printing applications, such as high-end advertising brochures, annual reports and direct-mail advertising, and specialty applications, such as flexible packaging and label and converting. Verso’s market kraft pulp is used to manufacture printing, writing and specialty paper grades, tissue and other products. Verso operates in the pulp and paper market segments. However, Verso determined that the operating income (loss) of the pulp segment is immaterial for disclosure purposes. Verso’s assets are utilized across segments in an integrated mill system and are not identified by segment or reviewed by management on a segment basis. Verso operates primarily in one geographic location, North America. Sale of Androscoggin Mill and Stevens Point Mill — On November 11, 2019, Verso and Verso Paper entered into a membership interest purchase agreement, or the “Purchase Agreement,” with Pixelle Specialty Solutions LLC, or “Pixelle,” whereby Verso and Verso Paper agreed to sell to Pixelle, or the “Pixelle Sale,” or the “Sale of the Androscoggin/Stevens Point Mills,” all of the outstanding membership interests in Verso Androscoggin, LLC, an indirect wholly owned subsidiary of Verso and the entity that, as of the closing date of the Pixelle Sale, held all the assets primarily related to Verso’s Androscoggin Mill located in Jay, Maine, and Verso’s Stevens Point Mill located in Stevens Point, Wisconsin. As a result of the Pixelle Sale, which was completed on February 10, 2020, the assets and liabilities associated with the sale are not included in Verso’s Unaudited Condensed Consolidated Balance Sheet as of September 30, 2020 or Verso’s Unaudited Condensed Consolidated Statement of Operations for the three months ended September 30, 2020, and Verso’s Unaudited Condensed Consolidated Statement of Operations for the nine months ended September 30, 2020 only includes the results of operations associated with the Androscoggin and Stevens Point mills through February 9, 2020 (see Note 5). Idle of Duluth Mill and Wisconsin Rapids Mill — On June 9, 2020, Verso announced plans to indefinitely idle its mills in Duluth, Minnesota and Wisconsin Rapids, Wisconsin, while exploring viable and sustainable alternatives for both mills. Those alternatives could include restarting if market conditions improve, marketing for sale or closing permanently one or both mills. Verso’s decision to reduce its production capacity was driven by the accelerated decline in graphic paper demand resulting from the COVID-19 pandemic (see below). The “stay-at-home” and other orders related to the COVID-19 pandemic have significantly reduced the use of print advertising in various industries, including retail, sports, entertainment and tourism. The production capacity of the Duluth Mill is approximately 270,000 tons of supercalendered/packaging papers and the production capacity of the Wisconsin Rapids Mill is approximately 540,000 tons of coated and packaging papers. Paper and pulp production ceased at the Duluth Mill on July 1, 2020 and at the Wisconsin Rapids Mill on July 27, 2020. In September 2020, Verso recognized $3 million in severance and benefit costs, included in Costs of products sold, associated with the Duluth Mill. See Note 12 for further information. COVID-19 Pandemic — The outbreak of coronavirus disease, or “COVID-19”, which was declared by the World Health Organization to be a global pandemic, is impacting worldwide economic activity. In an effort to contain and combat the spread of COVID-19, government and health authorities around the world have taken extraordinary and wide-ranging actions, including orders to close all businesses not deemed “essential,” quarantines and “stay-at-home” orders. Although some of these governmental restrictions have since been lifted or scaled back, recent surges of COVID-19 have resulted in the re-imposition of certain restrictions and may lead to other restrictions being re-implemented in an effort to reduce the spread of COVID-19. Verso serves as an essential manufacturing business and, as a result, Verso’s mills have continued to be operational during this time in order to meet the ongoing needs of its customers, including those in other essential business sectors, which provide food, medical and hygiene products needed in a global health crisis. The guidelines and orders enacted by federal, state and local governments continue to affect retailers, political campaigns, and sports and entertainment events, driving reduced purchases of printed materials and substantially impacting Verso’s graphic papers business. Verso’s COVID-19 preparedness and response team has been monitoring the pandemic and related events daily and preparing and implementing responses in accordance with Centers for Disease Control and Prevention, or the “CDC,” and Occupational Safety and Health Administration, or “OSHA,” recommendations as well as federal, state and local guidelines. While Verso cannot reasonably estimate the full impact of COVID-19 on the business, financial position, results of operations and cash flows, the pandemic will continue to have a negative impact on business and financial results. The full extent to which COVID-19 impacts Verso’s operations will depend on future developments, which are highly uncertain, including, among others, the duration of the outbreak, new information that may emerge concerning the severity of COVID-19 and the actions taken, especially those by governmental authorities, to contain its spread or treat its impact. Basis of Presentation — This report contains the Unaudited Condensed Consolidated Financial Statements of Verso as of December 31, 2019 and September 30, 2020 and for the three and nine months ended September 30, 2019 and 2020. The December 31, 2019 Unaudited Condensed Consolidated Balance Sheet data was derived from audited financial statements, but it does not include all disclosures required annually by accounting principles generally accepted in the United States of America, or “GAAP.” In Verso’s opinion, the Unaudited Condensed Consolidated Financial Statements include all adjustments that are necessary for the fair presentation of Verso’s respective financial condition, results of operations and cash flows for the interim periods presented. Except as disclosed in the notes to the Unaudited Condensed Consolidated Financial Statements, such adjustments are of a normal, recurring nature. Intercompany balances and transactions are eliminated in consolidation. The results of operations and cash flows for the interim periods presented may not necessarily be indicative of full-year results. It is suggested that these financial statements be read in conjunction with the audited consolidated financial statements and notes thereto of Verso contained in its Annual Report on Form 10-K for the year ended December 31, 2019. Correction of previously reported amounts — Subsequent to the original issuance of the Company’s 2019 Consolidated Financial Statements, Verso identified two adjustments necessary to correct deferred tax assets associated with property, plant and equipment and pension obligation, on the Consolidated Balance Sheet as of December 31, 2019. These errors occurred due to the incorrect measurement of the state deferred tax assets relating to bonus depreciation and the incorrect application of the tax accounting for the minimum pension liability in Accumulated other comprehensive income (loss). Management believes that the impact of these adjustments is immaterial to the previously issued Consolidated Financial Statements, based on an evaluation of both quantitative and qualitative factors. As a result, Verso corrected Deferred tax assets and Retained earnings on the Unaudited Condensed Consolidated Balance Sheet as of December 31, 2019 included in this Form 10-Q, reducing each by $26 million. Additionally, Verso corrected Retained earnings and Total stockholders’ equity as of December 31, 2019 and June 30, 2020, on the Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity included in this Form 10-Q to reflect the impact of this matter. There was no impact to the Unaudited Condensed Consolidated Statements of Operations, the Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss), or the Unaudited Condensed Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2019 and 2020, as a result of this matter. The following table presents the as corrected line items in the Consolidated Balance Sheet as of December 31, 2019: December 31, 2019 (Dollars in millions) As Reported As Corrected Deferred tax assets $ 118 $ 92 Total assets $ 1,721 $ 1,695 Retained earnings $ 198 $ 172 Total equity $ 1,013 $ 987 Total liabilities and equity $ 1,721 $ 1,695 As a result of this matter, Verso will correct its Consolidated Financial Statements and related footnotes for the year ended December 31, 2019, when those statements are reproduced on a comparative basis in its Annual Report on Form 10-K for the year ending December 31, 2020. In addition to presenting the correct amounts on the Consolidated Balance Sheet as of December 31, 2019 as noted above, Verso will present corrected amounts of Net income and Income tax benefit on the Consolidated Statement of Operations for the year ended December 31, 2019, reducing each by $26 million, and the Net income and Deferred taxes on the Consolidated Statement of Cash Flows for the year ended December 31, 2019, reducing each by $26 million. The corrections do not have an effect on net cash provided by operating activities or used in investing or financing activities on the Consolidated Statement of Cash Flows for the year ended December 31, 2019. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Accounting Guidance Adopted in 2020 ASC Topic 350, Intangible Assets - Goodwill & Other . In August 2018, the Financial Accounting Standards Board, or “FASB,” issued Accounting Standards Update, or “ASU,” 2018-15, Customer’s Accounting for Implementation Costs in a Cloud Computing Arrangement that is a Service Contract (Topic 350), which aligns the accounting for such costs with guidance on capitalizing costs associated with developing or obtaining internal use software. Verso adopted this guidance on January 1, 2020 on a prospective basis and the effect on the Unaudited Condensed Consolidated Financial Statements was not material. ASC Topic 326, Financial Instruments – Credit Losses . In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This guidance replaces the current incurred loss impairment method with a method that reflects expected credit losses. Adoption of this standard is through a cumulative-effect adjustment to retained earnings as of the effective date. Verso adopted this guidance on January 1, 2020 and the effect on the Unaudited Condensed Consolidated Financial Statements was not material. ASC Topic 820, Fair Value Measurement . In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measuremen t. The new guidance modifies disclosure requirements related to fair value measurement. Verso adopted this guidance on January 1, 2020 and the effect on the Unaudited Condensed Consolidated Financial Statements was not material. Accounting Guidance Not Yet Adopted ASC Topic 740, Income Taxes . In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes . This guidance removes certain exceptions for investments, intraperiod allocations and interim calculations, and adds guidance to reduce the complexity in accounting for income taxes. It is effective for annual periods, and interim periods within those years, beginning after December 15, 2020 and is not expected to have a material effect on the Unaudited Condensed Consolidated Financial Statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION The following table presents the revenues disaggregated by product included on the Unaudited Condensed Consolidated Statements of Operations: Three Months Ended Nine Months Ended September 30, September 30, (Dollars in millions) 2019 2020 2019 2020 Paper $ 559 $ 260 $ 1,689 $ 900 Packaging 28 14 75 56 Pulp 29 32 93 89 Total Net sales $ 616 $ 306 $ 1,857 $ 1,045 The following table presents the revenue disaggregated by sales channel included on the Unaudited Condensed Consolidated Statements of Operations: Three Months Ended Nine Months Ended September 30, September 30, (Dollars in millions) 2019 2020 2019 2020 End-users and Converters $ 282 $ 95 $ 851 $ 375 Brokers and Merchants 232 150 707 477 Printers 102 61 299 193 Total Net sales $ 616 $ 306 $ 1,857 $ 1,045 |
SUPPLEMENTAL FINANCIAL STATEMEN
SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION | SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION Restricted Cash — As of December 31, 2019 and September 30, 2020, $2 million of restricted cash was included in Intangibles and other assets, net on the Unaudited Condensed Consolidated Balance Sheets primarily related to asset retirement obligations in the state of Michigan. These cash deposits are required by the state and may only be used for the future closure of a landfill. As of both September 30, 2019 and 2020, Cash and cash equivalents and restricted cash on the Unaudited Condensed Consolidated Statements of Cash Flows includes restricted cash of $2 million. Inventories — The following table summarizes inventories by major category: December 31, September 30, (Dollars in millions) 2019 2020 Raw materials $ 80 $ 51 Work-in-process 51 51 Finished goods 233 187 Replacement parts and other supplies 31 26 Inventories $ 395 $ 315 Property, plant and equipment — Depreciation expense for the three and nine months ended September 30, 2019 was $24 million and $153 million, respectively. Depreciation expense for the three and nine months ended September 30, 2020 was $20 million and $62 million, respectively. Depreciation expense for the nine months ended September 30, 2019 includes $76 million in accelerated depreciation associated with the closure of the Luke Mill in June 2019 (see Note 10). Interest costs capitalized for the three and nine months ended September 30, 2019 were zero and $1 million, respectively. Interest costs capitalized for the three and nine months ended September 30, 2020 were zero and $1 million, respectively. Property, plant and equipment as of September 30, 2019 and 2020 include $13 million and $2 million, respectively, of capital expenditures that were unpaid and included on Accounts payable and Accrued and other liabilities on the Unaudited Condensed Consolidated Balance Sheets. Income Taxes — Income tax benefit for the three and nine months ended September 30, 2019 was $1 million and zero, respectively. Income tax benefit for the three months ended September 30, 2020 was $9 million and income tax expense for the nine months ended September 30, 2020 was $14 million. During the three and nine months ended September 30, 2020, Verso recognized $1 million and $8 million, respectively, of additional valuation allowance against state tax credits. The nine months ended September 30, 2020 also includes $7 million of income tax expense related to the year ended December 31, 2019. This resulted from recording the federal tax effect on deferred tax assets for state net operating losses and state tax credits in the three months ended June 30, 2020, which was not recorded in the prior year. This adjustment was not material to the current periods’ Unaudited Condensed Consolidated Financial Statements or any prior periods. |
DISPOSITIONS
DISPOSITIONS | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISPOSITIONS | DISPOSITIONS Sale of Androscoggin Mill and Stevens Point Mill On February 10, 2020, Verso completed the Pixelle Sale, selling all of the outstanding membership interests in Verso Androscoggin, LLC, an indirect wholly owned subsidiary of Verso and the entity that, as of the closing date of the Pixelle Sale, held all the assets primarily related to Verso’s Androscoggin Mill located in Jay, Maine and Verso’s Stevens Point Mill, located in Stevens Point, Wisconsin. The Pixelle Sale did not qualify as a discontinued operation. As consideration for the Pixelle Sale, Verso received $344 million in cash, which reflects certain adjustments in respect of Verso’s estimates of cash, indebtedness and working capital of Verso Androscoggin, LLC as of the closing date, and Pixelle assumed $37 million of Verso’s unfunded pension liabilities, which reflects certain adjustments in connection with the completed transfer of the unfunded pension liabilities during the three months ended September 30, 2020. The sale resulted in a gain of $88 million included in Other operating (income) expense on the Unaudited Condensed Consolidated Statement of Operations for the nine months ended September 30, 2020 and is subject to final post-closing adjustments. In connection with the Pixelle Sale, Verso provided certain transition services to Pixelle and recognized $2 million and $5 million for these services on the Unaudited Condensed Consolidated Statements of Operations during the three and nine months ended September 30, 2020, respectively. During the three months ended September 30, 2020, $1 million of these transition services were recognized as a reduction of Cost of products sold and $1 million as a reduction of Selling, general and administrative expenses. During the nine months ended September 30, 2020, $2 million of these transition services were recognized as a reduction of Cost of products sold and $3 million as a reduction of Selling, general and administrative expenses. These transition services were completed in October 2020. The following table summarizes the components of the gain on sale: (Dollars in millions) Cash proceeds $ 344 Less: costs to sell (6) Net cash proceeds 338 Less: assets and liabilities associated with the sale Accounts receivable, net 39 Inventories 90 Property, plant and equipment, net 195 Write-off of intangible assets 5 Other assets 4 Accounts payable (33) Pension benefit obligation (37) Other liabilities (13) Gain on sale $ 88 Luke Mill Equipment Sale On August 1, 2020, Verso entered into an equipment purchase agreement with Halkali Kagit Karton Sanayi ve Tic. A.S., or the “Purchaser,” a company organized under the laws of Turkey, whereby Verso agreed to sell, and the Purchaser agreed to purchase, certain equipment at Verso’s Luke Mill, primarily including two paper machines. The purchase price is $11 million in cash, with $2 million due upon execution of the agreement and the remaining $9 million due at various milestones through closing. Verso received $4 million in non-refundable deposits associated with this sale during the three months ended September 30, 2020 and an additional $3 million in non-refundable deposits subsequent to September 30, 2020. The closing of the equipment purchase, including the transfer of title and ownership of the equipment to the Purchaser, will occur upon completion to Verso’s satisfaction of the disassembly and removal of the equipment and the receipt by Verso of all payments due from the Purchaser. Luke Land - Assets Held for Sale As of September 30, 2020, Verso had land associated with Verso’s Luke Mill classified as held for sale on the Unaudited Condensed Consolidated Balance Sheet of $4 million, which approximates the fair value of the land. On October 30, 2020, Verso received the $4 million of cash proceeds for the sale of the land. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT As of December 31, 2019 and September 30, 2020, Verso Paper had no outstanding borrowings on the ABL Facility (as defined below). ABL Facility On July 15, 2016, Verso Paper Holdings LLC entered into a $375 million asset-based revolving credit facility, or the “ABL Facility.” After the Company completed an internal reorganization in December 2016, Verso Paper Holdings LLC ceased to exist and Verso Paper became the borrower under the ABL Facility. On February 6, 2019, Verso Paper entered into a second amendment to the ABL Facility, or the “ABL Amendment.” As a result of the ABL Amendment, the ABL Facility provides for revolving commitments of $350 million, subject to a borrowing base limit, with a $100 million sublimit for letters of credit and a $35 million sublimit for swingline loans. Verso Paper may request one or more incremental revolving commitments in an aggregate principal amount up to the greater of (i) $75 million or (ii) the excess of the borrowing base over the revolving facility commitments of $350 million; however, the lenders are not obligated to increase the revolving commitments upon any such request. Availability under the ABL Facility is subject to customary borrowing conditions. The ABL Facility will mature on February 6, 2024. Outstanding borrowings under the ABL Facility bear interest at an annual rate equal to, at the option of Verso Paper, either (i) a customary London interbank offered rate plus an applicable margin ranging from 1.25% to 1.75% or (ii) a customary base rate plus an applicable margin ranging from 0.25% to 0.75%, determined based upon the average excess availability under the ABL Facility. Verso Paper also is required to pay a commitment fee for the unused portion of the ABL Facility of 0.25% per year, based upon the average revolver usage under the ABL Facility. The amount of borrowings and letters of credit available to Verso Paper pursuant to the ABL Facility is limited to the lesser of $350 million or an amount determined pursuant to a borrowing base ($244 million as of September 30, 2020). As of September 30, 2020, there were no borrowings outstanding under the ABL Facility, with $24 million issued in letters of credit and $220 million available for future borrowings. All obligations under the ABL Facility are unconditionally guaranteed by Verso Holding and certain of the subsidiaries of Verso Paper. The security interest with respect to the ABL Facility consists of a first-priority lien on certain assets of Verso Paper, Verso Holding and the other guarantor subsidiaries, including accounts receivable, inventory, certain deposit accounts, securities accounts and commodities accounts, if applicable. The ABL Facility contains financial covenants requiring Verso, among other things, to maintain a minimum fixed charge coverage ratio if availability were to drop below prescribed thresholds. The ABL Facility also requires that certain payment conditions, as defined therein, are met in order for Verso to incur debt or liens, pay cash dividends, repurchase equity interest, prepay indebtedness, sell or dispose of assets and make investments in or merge with another company. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table provides a reconciliation of basic and diluted income (loss) per common share: Three Months Ended Nine Months Ended September 30, September 30, 2019 2020 2019 2020 Net income (loss) available to common stockholders (in millions) $ 30 $ (31) $ (46) $ (11) Weighted average common shares outstanding - basic (in thousands) 34,686 33,675 34,599 34,440 Dilutive shares from stock awards (in thousands) 451 — — — Weighted average common shares outstanding - diluted (in thousands) 35,137 33,675 34,599 34,440 Basic income (loss) per share $ 0.86 $ (0.92) $ (1.33) $ (0.33) Diluted income (loss) per share $ 0.85 $ (0.92) $ (1.33) $ (0.33) As a result of the net loss from continuing operations for the nine months ended September 30, 2019 and the three and nine months ended September 30, 2020, 1.2 million restricted stock units as of September 30, 2019 and 0.9 million restricted stock units as of September 30, 2020 were excluded from the calculation of diluted earnings per share as their inclusion would be anti-dilutive. As of September 30, 2020, Verso has 1.8 million warrants outstanding at an exercise price of $21.67 (see Note 9). As a result of the exercise price of the warrants exceeding the average market price of Verso’s common stock during the three and nine months ended September 30, 2019 and 2020, 1.8 million warrants as of September 30, 2019 and 2020 were excluded from the calculations of diluted earnings per share as their inclusion would be anti-dilutive. |
RETIREMENT BENEFITS
RETIREMENT BENEFITS | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
RETIREMENT BENEFITS | RETIREMENT BENEFITS In connection with the completed transfer of the unfunded pension liabilities assumed by Pixelle, as part of the Pixelle Sale (See Note 5), Verso remeasured its pension plan assets and liabilities as of September 30, 2020. For the remeasurement, the discount rate was updated to 2.71% from 3.11% at December 31, 2019. The remeasurement resulted in a $162 million increase in Pension benefit obligation, a $119 million loss, net of tax, included in Accumulated other comprehensive income (loss) and a settlement loss of $1 million included in Other operating (income) expense on the Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020. The following table summarizes the components of net periodic pension cost (income) for the periods presented: Three Months Ended Nine Months Ended September 30, September 30, (Dollars in millions) 2019 2020 2019 2020 Service cost $ 1 $ 1 $ 3 $ 2 Interest cost 16 12 48 35 Expected return on plan assets (18) (17) (52) (50) Settlement — 1 — 1 Net periodic pension cost (income) $ (1) $ (3) $ (1) $ (12) Verso makes contributions that are sufficient to fund actuarially determined costs, generally equal to the minimum amounts required by the Employee Retirement Income Security Act. Verso made contributions to the pension plan of $18 million and $34 million during the three and nine months ended September 30, 2019, respectively, and $29 million and $47 million during the three and nine months ended September 30, 2020, respectively. Verso expects to make the required cash contribution of $2 million to the pension plan in the remainder of 2020. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
EQUITY | EQUITY Equity Awards During the nine months ended September 30, 2020, Verso granted 0.2 million time-based restricted stock units and 0.2 million performance-based restricted stock units to its executives and certain senior managers. The performance awards granted vest at December 31, 2022, subject to a comparison of annualized total stockholder return, or “TSR,” of Verso to a select group of peer companies over a 3-year period. The vesting criteria of the performance awards meet the definition of a market condition for accounting purposes. The full grant date value of the performance awards will be recognized over the remaining vesting period assuming that the employee is employed continuously to the vesting date. The number of shares which will ultimately vest at the vesting date ranges from 0% to 150% based on Verso’s TSR relative to the peer group during the performance period. The compensation expense associated with these performance awards was determined using the Monte Carlo valuation methodology. On May 11, 2020, the threshold requirement for vesting of achieving a 5% annualized TSR was eliminated for performance units granted in 2019 and 2020. This change was considered a modification of each award and requires Verso to incur additional compensation cost for the incremental difference in the fair value between the modified award (post-modification) and original award (pre-modification) over the remaining vesting period. The incremental difference was $1.60 and $3.75 per unit for the 2019 and 2020 performance grants, respectively. Verso recognized equity award expense of $2 million and $10 million for the three and nine months ended September 30, 2019 , respectively, and $1 million and $5 million for the three and nine months ended September 30, 2020, respectively. Equity award expense for the nine months ended September 30, 2020 includes $0.3 million related to the accelerated vesting of 138 thousand performance-based restricted stock units and 130 thousand time-based restricted stock units. Amounts are net of the cancellation of 90 thousand time-based and 93 thousand performance-based restricted stock units and dividend equivalent units, pursuant to separation agreements with key members of management. As of September 30, 2020, there was approximately $5 million of unrecognized compensation cost related to the 0.9 million non-vested restricted stock units, which is expected to be recognized over the weighted average period of 1.9 years. Time-based Restricted Stock Units Changes to non-vested time-based restricted stock units for the nine months ended September 30, 2020 were as follows: Restricted Stock Weighted Average Units Grant Date Shares (in thousands) Outstanding Fair Value Non-vested at December 31, 2019 579 $ 11.55 Granted (1) 383 9.24 Vested (379) 10.17 Forfeited (157) 13.88 Non-vested at September 30, 2020 426 9.84 (1) Includes 162 thousand dividend equivalent units on certain restricted stock awards for dividends related to the stock units granted but not yet vested at the time cash dividends were paid. Performance-based Restricted Stock Units Changes to non-vested performance-based restricted stock units for the nine months ended September 30, 2020 were as follows: Restricted Stock Weighted Average Units Grant Date Shares (in thousands) Outstanding Fair Value Non-vested at December 31, 2019 638 $ 18.84 Granted (1) 513 11.63 Incremental shares vested (2) 161 — Vested (555) 21.05 Forfeited (332) 13.75 Non-vested at September 30, 2020 425 12.34 (1) Includes 135 thousand dividend equivalent units on certain restricted stock awards for dividends related to the stock units granted but not yet vested at the time cash dividends were paid. (2) Incremental shares are a result of performance at 150% of granted shares. Share Repurchase Authorization and Dividends On February 26, 2020, Verso’s Board of Directors authorized up to $250 million of net proceeds from the Pixelle Sale to be used to repurchase outstanding shares of Verso common stock. During the nine months ended September 30, 2020, Verso purchased approximately 1.6 million shares of its common stock under the share repurchase authorization at a weighted average cost of $14.14 per share. On May 12, 2020, Verso’s Board of Directors declared a quarterly cash dividend of $0.10 per share of Verso's common stock, payable on June 29, 2020, to stockholders of record on June 15, 2020. On August 5, 2020, Verso’s Board of Directors declared a quarterly cash dividend of $0.10 per share and a special cash dividend of $3.00 per share, each on Verso’s common stock, and each with a record date of September 18, 2020 and payable on September 28, 2020. In conjunction with the declaration of the special dividend, Verso’s Board of Directors reduced Verso’s total share repurchase authorization from $250 million to $150 million. As of September 30, 2020, $127 million of the $150 million authorized remained. Warrants On July 15, 2016, warrants to purchase up to an aggregate of 1.8 million shares of Class A common stock were issued to holders of first-lien secured debt at an exercise price of $27.86 per share and a seven-year term. In connection with the 1.6 million shares of Verso common stock repurchased pursuant to Verso’s share repurchase authorization and the ordinary and special dividends declared during the nine months ended September 30, 2020, the number of shares of Verso common stock issuable upon exercise of each warrant increased from one share of common stock to 1.29 shares of common stock and the warrant exercise price was reduced from $27.86 per share to $21.67 per share, each effective as of September 18, 2020. The warrants expire on July 15, 2023. As of September 30, 2020, no warrants have been exercised. |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES Closure of Luke Mill — On April 30, 2019, Verso announced that it would permanently shut down its paper mill in Luke, Maryland in response to the continuing decline in customer demand for the grades of coated freesheet paper produced at the Luke Mill, along with rising input costs, a significant influx of imports and rising compliance costs and infrastructure challenges associated with environmental regulation. Verso completed the shutdown and closure of the Luke Mill in June 2019. The shutdown of the Luke Mill reduced Verso’s coated freesheet production capacity by approximately 450,000 tons and eliminated approximately 675 positions at the Luke Mill. In connection with the announced closure of the Luke Mill, Verso recognized $76 million of accelerated depreciation which is included in Depreciation and amortization on the Unaudited Condensed Consolidated Statements of Operations for the nine months ended September 30, 2019. The following table details the charges incurred related to the Luke Mill closure as included in Restructuring charges on the Unaudited Condensed Consolidated Statements of Operations: Three Months Ended Nine Months Ended September 30, September 30, Cumulative (Dollars in millions) 2019 2020 2019 2020 Incurred Property, plant and equipment, net $ — $ — $ 10 $ — $ 10 Severance and benefit costs (1) — 18 (1) 18 Write-off of spare parts and inventory 1 — 9 — 9 Write-off of purchase obligations and commitments 1 — 1 — 1 Other costs (1) 3 (2) 6 5 18 Total restructuring costs $ 4 $ (2) $ 44 $ 4 $ 56 (1) Other costs primarily relate to activities associated with the shutdown of property, plant and equipment, such as draining, cleaning, dismantling, securing and disposing of such assets. Other costs for the nine months ended September 30, 2020 includes $4 million for the final cleaning and shutdown of various storage tanks. The following table details the changes in the restructuring reserve liabilities related to the Luke Mill closure which are included in Accrued and other liabilities on the Unaudited Condensed Consolidated Balance Sheets: Nine Months Ended (Dollars in millions) September 30, 2020 Beginning balance of reserve $ 4 Severance and benefits reserve adjustments (1) Other costs 5 Payments on other costs (8) Ending balance of reserve $ — |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Represented Employees — As of September 30, 2020, approximately 72% of Verso’s hourly workforce was represented by unions. During 2019, Verso established new labor agreements with all of its union employees. During the three and nine months ended September 30, 2019, Verso recognized zero and $6 million, respectively, of expense for signing bonuses and for the settlement of various work arrangement issues to represented employees covered by labor agreements, which was reported in Cost of products sold on the Unaudited Condensed Consolidated Statements of Operations. General Litigation — Verso is involved from time to time in legal proceedings incidental to the conduct of its business. While any proceeding or litigation has the element of uncertainty, Verso believes that the outcome of any of these lawsuits or claims that are pending or threatened or all of them combined (other than those that cannot be assessed due to their preliminary nature) will not have a material effect on the Unaudited Condensed Consolidated Financial Statements. Verso permanently closed the Luke Mill, which sits on the border of West Virginia and Maryland, in June 2019. In November 2019, the State of West Virginia asserted that four aboveground storage tanks at Verso’s Luke Mill leaked and that Verso had failed to take certain actions to prevent and report the release of pollutants into the Potomac River. In December 2019, the state of Maryland brought suit against Verso asserting the unlawful discharge of pollutants into the North Branch of the Potomac River from the Luke Mill. On March 24, 2020, the Potomac Riverkeeper Network, or the “PRN,” filed suit against Verso in the U.S. District Court for Maryland based on similar assertions. In June 2020, Maryland joined the PRN lawsuit and the state suit was subsequently dismissed in July 2020. Verso is working proactively and in cooperation with both Maryland and West Virginia regulatory agencies to address the concerns at the Luke Mill. Verso plans to vigorously defend itself in these matters. The ultimate aggregate amount of probable monetary liability or financial impact with respect to these matters is subject to many uncertainties and could be material, but management cannot reasonably estimate the amount or range of potential liability and possible losses at this time. During the three and nine months ended September 30, 2020, Verso recorded $1 million and $2 million, respectively, for costs related to environmental remediation efforts. As of September 30, 2020, $1 million of environmental remediation costs are included in Accrued and other liabilities on the Unaudited Condensed Consolidated Balance Sheet. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS In October 2020, Verso recognized $5 million in severance and benefit costs, which will be included in Cost of products sold, associated with the Wisconsin Rapids Mill. On November 5, 2020, Verso’s Board of Directors declared a quarterly cash dividend of $0.10 per share on Verso’s common stock, payable on December 29, 2020, to stockholders of record on December 18, 2020. |
SUMMARY OF BUSINESS AND BASIS_2
SUMMARY OF BUSINESS AND BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of Business — Verso’s core business platform is as a producer of graphic papers, specialty papers, packaging papers and pulp. Verso’s products are used primarily in media and marketing applications, including catalogs, magazines, commercial printing applications, such as high-end advertising brochures, annual reports and direct-mail advertising, and specialty applications, such as flexible packaging and label and converting. Verso’s market kraft pulp is used to manufacture printing, writing and specialty paper grades, tissue and other products. Verso operates in the pulp and paper market segments. However, Verso determined that the operating income (loss) of the pulp segment is immaterial for disclosure purposes. Verso’s assets are utilized across segments in an integrated mill system and are not identified by segment or reviewed by management on a segment basis. Verso operates primarily in one geographic location, North America. |
Basis of Presentation | Basis of Presentation — This report contains the Unaudited Condensed Consolidated Financial Statements of Verso as of December 31, 2019 and September 30, 2020 and for the three and nine months ended September 30, 2019 and 2020. The December 31, 2019 Unaudited Condensed Consolidated Balance Sheet data was derived from audited financial statements, but it does not include all disclosures required annually by accounting principles generally accepted in the United States of America, or “GAAP.” In Verso’s opinion, the Unaudited Condensed Consolidated Financial Statements include all adjustments that are necessary for the fair presentation of Verso’s respective financial condition, results of operations and cash flows for the interim periods presented. Except as disclosed in the notes to the Unaudited Condensed Consolidated Financial Statements, such adjustments are of a normal, recurring nature. Intercompany balances and transactions are eliminated in consolidation. The results of operations and cash flows for the interim periods presented may not necessarily be indicative of full-year results. It is suggested that these financial statements be read in conjunction with the audited consolidated financial statements and notes thereto of Verso contained in its Annual Report on Form 10-K for the year ended December 31, 2019. |
Recent Accounting Developments | Accounting Guidance Adopted in 2020 ASC Topic 350, Intangible Assets - Goodwill & Other . In August 2018, the Financial Accounting Standards Board, or “FASB,” issued Accounting Standards Update, or “ASU,” 2018-15, Customer’s Accounting for Implementation Costs in a Cloud Computing Arrangement that is a Service Contract (Topic 350), which aligns the accounting for such costs with guidance on capitalizing costs associated with developing or obtaining internal use software. Verso adopted this guidance on January 1, 2020 on a prospective basis and the effect on the Unaudited Condensed Consolidated Financial Statements was not material. ASC Topic 326, Financial Instruments – Credit Losses . In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This guidance replaces the current incurred loss impairment method with a method that reflects expected credit losses. Adoption of this standard is through a cumulative-effect adjustment to retained earnings as of the effective date. Verso adopted this guidance on January 1, 2020 and the effect on the Unaudited Condensed Consolidated Financial Statements was not material. ASC Topic 820, Fair Value Measurement . In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measuremen t. The new guidance modifies disclosure requirements related to fair value measurement. Verso adopted this guidance on January 1, 2020 and the effect on the Unaudited Condensed Consolidated Financial Statements was not material. Accounting Guidance Not Yet Adopted ASC Topic 740, Income Taxes . In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes . This guidance removes certain exceptions for investments, intraperiod allocations and interim calculations, and adds guidance to reduce the complexity in accounting for income taxes. It is effective for annual periods, and interim periods within those years, beginning after December 15, 2020 and is not expected to have a material effect on the Unaudited Condensed Consolidated Financial Statements. |
SUMMARY OF BUSINESS AND BASIS_3
SUMMARY OF BUSINESS AND BASIS OF PRESENTATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Effect of Immaterial Prior Period Restatement | December 31, 2019 (Dollars in millions) As Reported As Corrected Deferred tax assets $ 118 $ 92 Total assets $ 1,721 $ 1,695 Retained earnings $ 198 $ 172 Total equity $ 1,013 $ 987 Total liabilities and equity $ 1,721 $ 1,695 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents the revenues disaggregated by product included on the Unaudited Condensed Consolidated Statements of Operations: Three Months Ended Nine Months Ended September 30, September 30, (Dollars in millions) 2019 2020 2019 2020 Paper $ 559 $ 260 $ 1,689 $ 900 Packaging 28 14 75 56 Pulp 29 32 93 89 Total Net sales $ 616 $ 306 $ 1,857 $ 1,045 The following table presents the revenue disaggregated by sales channel included on the Unaudited Condensed Consolidated Statements of Operations: Three Months Ended Nine Months Ended September 30, September 30, (Dollars in millions) 2019 2020 2019 2020 End-users and Converters $ 282 $ 95 $ 851 $ 375 Brokers and Merchants 232 150 707 477 Printers 102 61 299 193 Total Net sales $ 616 $ 306 $ 1,857 $ 1,045 |
SUPPLEMENTAL FINANCIAL STATEM_2
SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Inventories by Major Category | The following table summarizes inventories by major category: December 31, September 30, (Dollars in millions) 2019 2020 Raw materials $ 80 $ 51 Work-in-process 51 51 Finished goods 233 187 Replacement parts and other supplies 31 26 Inventories $ 395 $ 315 |
DISPOSITIONS (Tables)
DISPOSITIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Components of Gain on Sale | The following table summarizes the components of the gain on sale: (Dollars in millions) Cash proceeds $ 344 Less: costs to sell (6) Net cash proceeds 338 Less: assets and liabilities associated with the sale Accounts receivable, net 39 Inventories 90 Property, plant and equipment, net 195 Write-off of intangible assets 5 Other assets 4 Accounts payable (33) Pension benefit obligation (37) Other liabilities (13) Gain on sale $ 88 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table provides a reconciliation of basic and diluted income (loss) per common share: Three Months Ended Nine Months Ended September 30, September 30, 2019 2020 2019 2020 Net income (loss) available to common stockholders (in millions) $ 30 $ (31) $ (46) $ (11) Weighted average common shares outstanding - basic (in thousands) 34,686 33,675 34,599 34,440 Dilutive shares from stock awards (in thousands) 451 — — — Weighted average common shares outstanding - diluted (in thousands) 35,137 33,675 34,599 34,440 Basic income (loss) per share $ 0.86 $ (0.92) $ (1.33) $ (0.33) Diluted income (loss) per share $ 0.85 $ (0.92) $ (1.33) $ (0.33) |
RETIREMENT BENEFITS (Tables)
RETIREMENT BENEFITS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | The following table summarizes the components of net periodic pension cost (income) for the periods presented: Three Months Ended Nine Months Ended September 30, September 30, (Dollars in millions) 2019 2020 2019 2020 Service cost $ 1 $ 1 $ 3 $ 2 Interest cost 16 12 48 35 Expected return on plan assets (18) (17) (52) (50) Settlement — 1 — 1 Net periodic pension cost (income) $ (1) $ (3) $ (1) $ (12) |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Time-based RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Nonvested Restricted Stock Units Activity | Changes to non-vested time-based restricted stock units for the nine months ended September 30, 2020 were as follows: Restricted Stock Weighted Average Units Grant Date Shares (in thousands) Outstanding Fair Value Non-vested at December 31, 2019 579 $ 11.55 Granted (1) 383 9.24 Vested (379) 10.17 Forfeited (157) 13.88 Non-vested at September 30, 2020 426 9.84 (1) Includes 162 thousand dividend equivalent units on certain restricted stock awards for dividends related to the stock units granted but not yet vested at the time cash dividends were paid. |
Performance-based RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Nonvested Restricted Stock Units Activity | Changes to non-vested performance-based restricted stock units for the nine months ended September 30, 2020 were as follows: Restricted Stock Weighted Average Units Grant Date Shares (in thousands) Outstanding Fair Value Non-vested at December 31, 2019 638 $ 18.84 Granted (1) 513 11.63 Incremental shares vested (2) 161 — Vested (555) 21.05 Forfeited (332) 13.75 Non-vested at September 30, 2020 425 12.34 (1) Includes 135 thousand dividend equivalent units on certain restricted stock awards for dividends related to the stock units granted but not yet vested at the time cash dividends were paid. |
RESTRUCTURING CHARGES (Tables)
RESTRUCTURING CHARGES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges Incurred | The following table details the charges incurred related to the Luke Mill closure as included in Restructuring charges on the Unaudited Condensed Consolidated Statements of Operations: Three Months Ended Nine Months Ended September 30, September 30, Cumulative (Dollars in millions) 2019 2020 2019 2020 Incurred Property, plant and equipment, net $ — $ — $ 10 $ — $ 10 Severance and benefit costs (1) — 18 (1) 18 Write-off of spare parts and inventory 1 — 9 — 9 Write-off of purchase obligations and commitments 1 — 1 — 1 Other costs (1) 3 (2) 6 5 18 Total restructuring costs $ 4 $ (2) $ 44 $ 4 $ 56 |
Changes in Restructuring Reserve Liabilities | The following table details the changes in the restructuring reserve liabilities related to the Luke Mill closure which are included in Accrued and other liabilities on the Unaudited Condensed Consolidated Balance Sheets: Nine Months Ended (Dollars in millions) September 30, 2020 Beginning balance of reserve $ 4 Severance and benefits reserve adjustments (1) Other costs 5 Payments on other costs (8) Ending balance of reserve $ — |
SUMMARY OF BUSINESS AND BASIS_4
SUMMARY OF BUSINESS AND BASIS OF PRESENTATION - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020USD ($)T | Sep. 30, 2020USD ($)T | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)TSegment | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||||||
Severance and benefit costs, included in Costs of products sold | $ 3,000,000 | $ 309,000,000 | $ 536,000,000 | $ 1,007,000,000 | $ 1,625,000,000 | |
Deferred tax assets restatement change | 119,000,000 | 119,000,000 | 119,000,000 | $ 92,000,000 | ||
Retained earnings restatement change | $ 51,000,000 | 51,000,000 | 51,000,000 | 172,000,000 | ||
Net income restatement change | (31,000,000) | 30,000,000 | (11,000,000) | (46,000,000) | ||
Income tax benefit restatement change | $ (9,000,000) | $ (1,000,000) | 14,000,000 | 0 | ||
Deferred taxes restatement change | $ (14,000,000) | $ 0 | ||||
Revision of Prior Period, Adjustment | ||||||
Segment Reporting Information [Line Items] | ||||||
Deferred tax assets restatement change | (26,000,000) | |||||
Retained earnings restatement change | (26,000,000) | |||||
Net income restatement change | (26,000,000) | |||||
Income tax benefit restatement change | 26,000,000 | |||||
Deferred taxes restatement change | $ (26,000,000) | |||||
Other Events, COVID-19 | Supercalendered/Packaging Papers | ||||||
Segment Reporting Information [Line Items] | ||||||
Number of production capacity | T | 270,000 | 270,000 | 270,000 | |||
Other Events, COVID-19 | Coated and Packaging Papers | ||||||
Segment Reporting Information [Line Items] | ||||||
Number of production capacity | T | 540,000 | 540,000 | 540,000 | |||
North America | ||||||
Segment Reporting Information [Line Items] | ||||||
Number of geographical locations in operation | Segment | 1 |
SUMMARY OF BUSINESS AND BASIS_5
SUMMARY OF BUSINESS AND BASIS OF PRESENTATION - Effect of Immaterial Prior Period Restatement (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Deferred tax assets | $ 119 | $ 92 | ||||
Total assets | 1,382 | 1,695 | ||||
Retained earnings | 51 | 172 | ||||
Total equity | 727 | $ 981 | 987 | $ 867 | $ 835 | $ 906 |
Total liabilities and equity | $ 1,382 | 1,695 | ||||
Previously Reported | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Deferred tax assets | 118 | |||||
Total assets | 1,721 | |||||
Retained earnings | 198 | |||||
Total equity | 1,013 | |||||
Total liabilities and equity | $ 1,721 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | $ 306 | $ 616 | $ 1,045 | $ 1,857 |
End-users and Converters | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 95 | 282 | 375 | 851 |
Brokers and Merchants | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 150 | 232 | 477 | 707 |
Printers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 61 | 102 | 193 | 299 |
Paper | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 260 | 559 | 900 | 1,689 |
Packaging | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 14 | 28 | 56 | 75 |
Pulp | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | $ 32 | $ 29 | $ 89 | $ 93 |
SUPPLEMENTAL FINANCIAL STATEM_3
SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Income Tax Contingency [Line Items] | |||||
Restricted cash, intangibles | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 |
Depreciation expense | 20,000,000 | 24,000,000 | 62,000,000 | 153,000,000 | |
Interest costs capitalized | 0 | 0 | 1,000,000 | 1,000,000 | |
Capital expenditures unpaid | 2,000,000 | 13,000,000 | |||
Income tax expense (benefit) | (9,000,000) | $ (1,000,000) | 14,000,000 | 0 | |
State and Local Jurisdiction | |||||
Income Tax Contingency [Line Items] | |||||
Additional valuation allowance recognized | $ 1,000,000 | 8,000,000 | |||
Prior year income tax expense (benefit) | $ 7,000,000 | ||||
Closure of Luke Mill | |||||
Income Tax Contingency [Line Items] | |||||
Accelerated depreciation recognized | $ 76,000,000 |
SUPPLEMENTAL FINANCIAL STATEM_4
SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION - Inventories by Major Category (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 51 | $ 80 |
Work-in-process | 51 | 51 |
Finished goods | 187 | 233 |
Replacement parts and other supplies | 26 | 31 |
Inventories | $ 315 | $ 395 |
DISPOSITIONS - Additional Infor
DISPOSITIONS - Additional Information (Details) $ in Millions | Aug. 01, 2020USD ($)machine | Feb. 10, 2020USD ($) | Nov. 12, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Oct. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of paper machines | machine | 2 | ||||||
Proceeds from sale of machines and equipment | $ 11 | $ 4 | |||||
Assets held for sale | 4 | $ 4 | $ 0 | ||||
Subsequent Event | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from sale of machines and equipment | $ 3 | ||||||
Agreement Execution | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from sale of machines and equipment | 2 | ||||||
Various Milestones | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from sale of machines and equipment | $ 9 | ||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Verso Androscoggin, LLC | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Consideration considered | $ 344 | ||||||
Verso’s unfunded pension | 37 | ||||||
Gain on sale | $ 88 | 88 | |||||
Income (loss) recognized on disposition of business | 2 | 5 | |||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Luke Mill | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Assets held for sale | 4 | 4 | |||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Luke Mill | Subsequent Event | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Consideration considered | $ 4 | ||||||
Cost of Products Sold | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Verso Androscoggin, LLC | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Income (loss) recognized on disposition of business | 1 | 2 | |||||
Selling, General and Administrative Expenses | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Verso Androscoggin, LLC | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Income (loss) recognized on disposition of business | $ 1 | $ 3 |
DISPOSITIONS - Components of Ga
DISPOSITIONS - Components of Gain on Sale (Details) - USD ($) $ in Millions | Feb. 10, 2020 | Sep. 30, 2020 | Sep. 30, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net cash proceeds | $ 338 | $ 0 | |
Verso Androscoggin, LLC | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash proceeds | $ 344 | ||
Less: costs to sell | (6) | ||
Net cash proceeds | 338 | ||
Less: assets and liabilities associated with the sale | |||
Accounts receivable, net | 39 | ||
Inventories | 90 | ||
Property, plant and equipment, net | 195 | ||
Write-off of intangible assets | 5 | ||
Other assets | 4 | ||
Accounts payable | (33) | ||
Pension benefit obligation | (37) | ||
Other liabilities | (13) | ||
Gain on sale | $ 88 | $ 88 |
DEBT (Details)
DEBT (Details) | Feb. 06, 2019USD ($)incremental_revolving_commitment | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Jul. 15, 2016USD ($) |
Line of Credit Facility [Line Items] | ||||
Debt instrument, fair value disclosure | $ 0 | $ 0 | ||
ABL Facility | ||||
Line of Credit Facility [Line Items] | ||||
Credit facility, remaining borrowing capacity | 220,000,000 | |||
ABL Facility | Letter of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Long-term debt | 24,000,000 | |||
ABL Facility | Term Loan Facility | Revolving Credit Facilities | ||||
Line of Credit Facility [Line Items] | ||||
Credit facility, borrowing capacity | $ 375,000,000 | |||
ABL Facility | ABL Amendment Facility | ||||
Line of Credit Facility [Line Items] | ||||
Number of incremental revolving commitments | incremental_revolving_commitment | 1 | |||
Line of credit, maximum borrowing capacity, accordion feature | $ 75,000,000 | |||
Line of credit facility, unused capacity, commitment fee percentage | 0.25% | |||
ABL Facility | ABL Amendment Facility | Revolving Credit Facilities | ||||
Line of Credit Facility [Line Items] | ||||
Credit facility, borrowing capacity | $ 350,000,000 | |||
ABL Facility | ABL Amendment Facility | Letter of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Credit facility, borrowing capacity | 100,000,000 | |||
ABL Facility | ABL Amendment Facility | Bridge Loan | ||||
Line of Credit Facility [Line Items] | ||||
Credit facility, borrowing capacity | $ 35,000,000 | |||
ABL Facility | ABL Facility | Revolving Credit Facilities | ||||
Line of Credit Facility [Line Items] | ||||
Credit facility, borrowing capacity | $ 244,000,000 | |||
LIBOR | Minimum | ABL Facility | ABL Amendment Facility | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, basis spread on variable rate | 1.25% | |||
LIBOR | Maximum | ABL Facility | ABL Amendment Facility | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, basis spread on variable rate | 1.75% | |||
Base Rate | Minimum | ABL Facility | ABL Amendment Facility | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.25% | |||
Base Rate | Maximum | ABL Facility | ABL Amendment Facility | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.75% |
EARNINGS PER SHARE - Reconcilia
EARNINGS PER SHARE - Reconciliation of Basic and Diluted Earnings (Loss) per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) available to common stockholders (in millions) | $ (31) | $ 30 | $ (11) | $ (46) |
Weighted average common shares outstanding - basic (shares) | 33,675 | 34,686 | 34,440 | 34,599 |
Dilutive shares from stock awards (shares) | 0 | 451 | 0 | 0 |
Weighted average common shares outstanding - diluted (shares) | 33,675 | 35,137 | 34,440 | 34,599 |
Basic income (loss) per share (usd per share) | $ (0.92) | $ 0.86 | $ (0.33) | $ (1.33) |
Diluted income (loss) per share (usd per share) | $ (0.92) | $ 0.85 | $ (0.33) | $ (1.33) |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional Information (Details) - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 18, 2020 | Sep. 17, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Class of warrant or right, outstanding | 1,800 | 1,800 | |||
Exercise price of warrants (in dollars per share) | $ 21.67 | $ 21.67 | $ 21.67 | $ 27.86 | |
Number of shares called by warrants (in shares) | 1,800 | 1,800 | 1,800 | ||
Restricted Stock Units (RSUs) | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from calculation of diluted earnings per share (in shares) | 900 | 900 | 1,200 |
RETIREMENT BENEFITS - Additiona
RETIREMENT BENEFITS - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Discount rate | 2.71% | 2.71% | 3.11% | ||
(Increase) decrease for remeasurement due to settlement | $ (162) | $ (162) | |||
Pension liability adjustment, net | (119) | $ 0 | (119) | $ 0 | |
Pension Plan | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Settlement | (1) | 0 | (1) | 0 | |
Contribution made by employer | 29 | $ 18 | 47 | $ 34 | |
Expected cash contribution remainder of fiscal year (at least) | $ 2 | $ 2 |
RETIREMENT BENEFITS - Component
RETIREMENT BENEFITS - Components of Net Periodic Benefit Cost (Detail) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 1 | $ 1 | $ 2 | $ 3 |
Interest cost | 12 | 16 | 35 | 48 |
Expected return on plan assets | (17) | (18) | (50) | (52) |
Settlement | 1 | 0 | 1 | 0 |
Net periodic pension cost (income) | $ (3) | $ (1) | $ (12) | $ (1) |
EQUITY - Additional Information
EQUITY - Additional Information (Details) - USD ($) | Aug. 05, 2020 | May 12, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 18, 2020 | Sep. 17, 2020 | Aug. 04, 2020 | May 11, 2020 | Feb. 26, 2020 | Dec. 31, 2019 | Jul. 15, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Compound annual growth rate, period | 3 years | ||||||||||||
Total shareholder return threshold | 5.00% | ||||||||||||
Equity award expense | $ 1,000,000 | $ 2,000,000 | $ 5,000,000 | $ 10,000,000 | |||||||||
Share repurchase program authorization | $ 150,000,000 | $ 250,000,000 | $ 250,000,000 | ||||||||||
Repurchase of common stock, number of shares (in shares) | 1,600,000 | ||||||||||||
Repurchase of common stock, treasury stock acquired, average price per share (in dollars per share) | $ 14.14 | ||||||||||||
Share repurchase program remaining authorization | $ 127,000,000 | $ 127,000,000 | |||||||||||
Common stock, dividends declared (in dollars per share) | $ 0.10 | $ 0.10 | |||||||||||
Common stock, special dividends declared (in dollars per share) | $ 3 | ||||||||||||
Number of shares called by warrants (in shares) | 1,800,000 | 1,800,000 | 1,800,000 | 1,800,000 | |||||||||
Exercise price of warrants (in dollars per share) | $ 21.67 | $ 21.67 | $ 21.67 | $ 27.86 | |||||||||
Number of shares called by each warrant (in shares) | 1.29 | 1 | |||||||||||
Class of warrant or right, exercised (in shares) | 0 | 0 | |||||||||||
Restricted Stock Units (RSUs) | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Compensation cost not yet recognized | $ 5,000,000 | $ 5,000,000 | |||||||||||
Vested and expected to vest, outstanding (in shares) | 900,000 | 900,000 | |||||||||||
Compensation cost not yet recognized, period for recognition | 1 year 10 months 24 days | ||||||||||||
Time-based RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Number of shares granted (in shares) | 383,000 | ||||||||||||
Forfeited (in shares) | 157,000 | ||||||||||||
Vested (in shares) | 379,000 | ||||||||||||
Performance-based RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Number of shares granted (in shares) | 513,000 | ||||||||||||
Forfeited (in shares) | 332,000 | ||||||||||||
Vested (in shares) | 555,000 | ||||||||||||
2019 Performance Grants | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Incremental difference for performance grants (in dollars per share) | $ 1.60 | ||||||||||||
2020 Performance Grants | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Incremental difference for performance grants (in dollars per share) | 3.75 | ||||||||||||
Common Class A | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||
Number of shares called by warrants (in shares) | 1,800,000 | ||||||||||||
Exercise price of warrants (in dollars per share) | $ 27.86 | ||||||||||||
Warrants term | 7 years | ||||||||||||
Share Based Compensation Award Tranche One | Minimum | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Award vesting rights, percentage | 0.00% | ||||||||||||
Share Based Compensation Award Tranche One | Maximum | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Award vesting rights, percentage | 150.00% | ||||||||||||
Executive Officer and Management | Time-based RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Number of shares granted (in shares) | 200,000 | ||||||||||||
Executive Officer and Management | Performance-based RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Number of shares granted (in shares) | 200,000 | ||||||||||||
Management | Time-based RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Share-based compensation, accelerated vesting (in shares) | 130,000 | ||||||||||||
Forfeited (in shares) | 90,000 | ||||||||||||
Management | Performance-based RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Accelerated compensation cost | $ 300,000 | ||||||||||||
Share-based compensation, accelerated vesting (in shares) | 138,000 | ||||||||||||
Management | Performance-based Restricted Stock Units and Dividend Equivalent Units | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vested (in shares) | 93,000 |
EQUITY - Changes In Non-vested
EQUITY - Changes In Non-vested Units (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Incremental granted share, percentage | 150.00% |
Time-based RSUs | |
Units Outstanding | |
Non-vested, beginning balance (in shares) | 579 |
Grants (in shares) | 383 |
Vested (in shares) | (379) |
Forfeited (in shares) | (157) |
Non-vested, ending balance (in shares) | 426 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Non-vested, beginning balance (in dollar per share) | $ / shares | $ 11.55 |
Grants (in dollar per share) | $ / shares | 9.24 |
Vested (in dollar per share) | $ / shares | 10.17 |
Forfeited (in dollar per share) | $ / shares | 13.88 |
Non-vested, ending balance (in dollar per share) | $ / shares | $ 9.84 |
Time-based Dividend Equivalent Units | |
Units Outstanding | |
Grants (in shares) | 162 |
Performance-based RSUs | |
Units Outstanding | |
Non-vested, beginning balance (in shares) | 638 |
Grants (in shares) | 513 |
Incremental shares vested (in shares) | 161 |
Vested (in shares) | (555) |
Forfeited (in shares) | (332) |
Non-vested, ending balance (in shares) | 425 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Non-vested, beginning balance (in dollar per share) | $ / shares | $ 18.84 |
Grants (in dollar per share) | $ / shares | 11.63 |
Incremental shares vested (in dollar per share) | $ / shares | 0 |
Vested (in dollar per share) | $ / shares | 21.05 |
Forfeited (in dollar per share) | $ / shares | 13.75 |
Non-vested, ending balance (in dollar per share) | $ / shares | $ 12.34 |
Performance-based Dividend Equivalent Units | |
Units Outstanding | |
Grants (in shares) | 135 |
RESTRUCTURING CHARGES - Additio
RESTRUCTURING CHARGES - Additional information (Details) - Closure of Luke Mill $ in Millions | 1 Months Ended | 9 Months Ended |
Jun. 30, 2019EmployeeT | Sep. 30, 2019USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||
Reduction of employee headcount | Employee | 675 | |
Accelerated depreciation recognized | $ | $ 76 | |
Coated Freesheet | ||
Restructuring Cost and Reserve [Line Items] | ||
Decrease in production capacity (in tons) | T | 450,000 |
RESTRUCTURING CHARGES - Restruc
RESTRUCTURING CHARGES - Restructuring Charges Incurred (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ (2) | $ 4 | $ 4 | $ 44 |
Closure of Luke Mill | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | (2) | 4 | 4 | 44 |
Restructuring charges, cumulative incurred | 56 | 56 | ||
Property, plant and equipment, net | Closure of Luke Mill | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 0 | 0 | 0 | 10 |
Restructuring charges, cumulative incurred | 10 | 10 | ||
Severance and benefit costs | Closure of Luke Mill | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 0 | (1) | (1) | 18 |
Restructuring charges, cumulative incurred | 18 | 18 | ||
Write-off of spare parts and inventory | Closure of Luke Mill | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 0 | 1 | 0 | 9 |
Restructuring charges, cumulative incurred | 9 | 9 | ||
Write-off of purchase obligations and commitments | Closure of Luke Mill | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 0 | 1 | 0 | 1 |
Restructuring charges, cumulative incurred | 1 | 1 | ||
Other costs | Closure of Luke Mill | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | (2) | $ 3 | 5 | $ 6 |
Restructuring charges, cumulative incurred | $ 18 | 18 | ||
Facility closing | Closure of Luke Mill | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 4 |
RESTRUCTURING CHARGES - Changes
RESTRUCTURING CHARGES - Changes in Restructuring Reserve Liabilities (Details) - Closure of Luke Mill $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning balance of reserve | $ 4 |
Other costs | 5 |
Ending balance of reserve | 0 |
Severance and benefits reserve adjustments | |
Restructuring Reserve [Roll Forward] | |
Severance and benefits reserve adjustments | (1) |
Other costs | |
Restructuring Reserve [Roll Forward] | |
Payments on other costs | $ (8) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2019tank | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | |
Loss Contingencies [Line Items] | |||||
Number of aboveground storage tanks | tank | 4 | ||||
Environmental remediation costs recorded | $ 1,000,000 | $ 2,000,000 | |||
Environmental remediation costs, included in Balance Sheet | $ 1,000,000 | $ 1,000,000 | |||
Represented Employees | |||||
Loss Contingencies [Line Items] | |||||
Workforce, represented by union, percentage | 72.00% | 72.00% | |||
Union negotiation | $ 0 | $ 6,000,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 05, 2020 | Aug. 05, 2020 | May 12, 2020 | Oct. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Subsequent Event [Line Items] | |||||||||
Severance and benefit costs, included in Costs of products sold | $ 3 | $ 309 | $ 536 | $ 1,007 | $ 1,625 | ||||
Common stock, dividends declared (in dollars per share) | $ 0.10 | $ 0.10 | |||||||
Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Severance and benefit costs, included in Costs of products sold | $ 5 | ||||||||
Common stock, dividends declared (in dollars per share) | $ 0.10 |