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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Resolute Forest Products Inc | NYSE:RFP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 21.92 | 0 | 01:00:00 |
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
98-0526415
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. employer identification number)
|
111 Robert-Bourassa Boulevard
|
Suite 5000
|
Montreal
|
Quebec
|
Canada
|
H3C 2M1
|
(Address of principal executive offices) (Zip Code)
|
(Registrant’s telephone number, including area code)
|
|
(Former name, former address and former fiscal year, if changed since last report)
|
Common Stock, par value $0.001 per share
|
RFP
|
New York Stock Exchange
Toronto Stock Exchange
|
(Title of class)
|
(Trading Symbol)
|
(Name of exchange on which registered)
|
Large Accelerated Filer
|
☐
|
|
Accelerated Filer
|
☒
|
|
Non-accelerated Filer
|
☐
|
|
Smaller Reporting Company
|
☐
|
|
Emerging Growth Company
|
☐
|
|
|
Page
Number
|
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PART I. FINANCIAL INFORMATION
|
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|
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Item 1. Financial Statements:
|
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||
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||
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||
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PART II. OTHER INFORMATION
|
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|
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||
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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Item 5. Other Information
|
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||
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|
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PART I.
|
FINANCIAL INFORMATION
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Sales
|
$
|
755
|
|
|
$
|
976
|
|
|
|
$
|
1,550
|
|
|
$
|
1,850
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of sales, excluding depreciation, amortization and distribution costs
|
|
536
|
|
|
|
639
|
|
|
|
|
1,090
|
|
|
|
1,253
|
|
|
Depreciation and amortization
|
|
42
|
|
|
|
54
|
|
|
|
|
82
|
|
|
|
107
|
|
|
Distribution costs
|
|
101
|
|
|
|
123
|
|
|
|
|
201
|
|
|
|
239
|
|
|
Selling, general and administrative expenses
|
|
36
|
|
|
|
42
|
|
|
|
|
73
|
|
|
|
85
|
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
1
|
|
|
Net gain on disposition of assets
|
|
—
|
|
|
|
(4
|
)
|
|
|
|
—
|
|
|
|
(4
|
)
|
|
Operating income
|
|
40
|
|
|
|
121
|
|
|
|
|
104
|
|
|
|
169
|
|
|
Interest expense
|
|
(7
|
)
|
|
|
(11
|
)
|
|
|
|
(16
|
)
|
|
|
(24
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
12
|
|
|
|
12
|
|
|
|
|
24
|
|
|
|
25
|
|
|
Other expense, net
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
|
(5
|
)
|
|
|
(10
|
)
|
|
Income before income taxes
|
|
44
|
|
|
|
119
|
|
|
|
|
107
|
|
|
|
160
|
|
|
Income tax provision
|
|
(19
|
)
|
|
|
(47
|
)
|
|
|
|
(40
|
)
|
|
|
(78
|
)
|
|
Net income including noncontrolling interests
|
|
25
|
|
|
|
72
|
|
|
|
|
67
|
|
|
|
82
|
|
|
Net income attributable to noncontrolling interests
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Net income attributable to Resolute Forest Products Inc.
|
$
|
25
|
|
|
$
|
72
|
|
|
|
$
|
67
|
|
|
$
|
82
|
|
|
Net income per share attributable to Resolute Forest Products Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
0.27
|
|
|
$
|
0.79
|
|
|
|
$
|
0.73
|
|
|
$
|
0.90
|
|
|
Diluted
|
|
0.27
|
|
|
|
0.77
|
|
|
|
|
0.71
|
|
|
|
0.88
|
|
|
Weighted-average number of Resolute Forest Products Inc. common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
92.4
|
|
|
|
91.3
|
|
|
|
|
92.4
|
|
|
|
91.2
|
|
|
Diluted
|
|
93.6
|
|
|
|
93.2
|
|
|
|
|
93.8
|
|
|
|
93.1
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Net income including noncontrolling interests
|
$
|
25
|
|
|
$
|
72
|
|
|
|
$
|
67
|
|
|
$
|
82
|
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unamortized prior service credits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in unamortized prior service credits
|
|
(4
|
)
|
|
|
(4
|
)
|
|
|
|
(7
|
)
|
|
|
(8
|
)
|
|
Income tax provision
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Change in unamortized prior service credits, net of tax
|
|
(4
|
)
|
|
|
(4
|
)
|
|
|
|
(7
|
)
|
|
|
(8
|
)
|
|
Unamortized actuarial losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in unamortized actuarial losses
|
|
3
|
|
|
|
9
|
|
|
|
|
11
|
|
|
|
18
|
|
|
Income tax provision
|
|
—
|
|
|
|
(2
|
)
|
|
|
|
(2
|
)
|
|
|
(4
|
)
|
|
Change in unamortized actuarial losses, net of tax
|
|
3
|
|
|
|
7
|
|
|
|
|
9
|
|
|
|
14
|
|
|
Other comprehensive (loss) income, net of tax
|
|
(1
|
)
|
|
|
3
|
|
|
|
|
2
|
|
|
|
6
|
|
|
Comprehensive income including noncontrolling interests
|
|
24
|
|
|
|
75
|
|
|
|
|
69
|
|
|
|
88
|
|
|
Comprehensive income attributable to noncontrolling interests
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Comprehensive income attributable to Resolute Forest Products Inc.
|
$
|
24
|
|
|
$
|
75
|
|
|
|
$
|
69
|
|
|
$
|
88
|
|
|
|
June 30,
2019 |
December 31,
2018 |
||||||
Assets
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
98
|
|
|
$
|
304
|
|
|
Accounts receivable, net:
|
|
|
|
|
|
|
||
Trade
|
|
333
|
|
|
|
347
|
|
|
Other
|
|
67
|
|
|
|
102
|
|
|
Inventories, net
|
|
530
|
|
|
|
508
|
|
|
Other current assets
|
|
42
|
|
|
|
43
|
|
|
Total current assets
|
|
1,070
|
|
|
|
1,304
|
|
|
Fixed assets, less accumulated depreciation of $1,579 and $1,498 as of June 30, 2019 and December 31, 2018, respectively
|
|
1,479
|
|
|
|
1,515
|
|
|
Amortizable intangible assets, less accumulated amortization of $25 and $24 as of June 30, 2019 and December 31, 2018, respectively
|
|
50
|
|
|
|
50
|
|
|
Deferred income tax assets
|
|
869
|
|
|
|
876
|
|
|
Operating lease right-of-use assets
|
|
63
|
|
|
|
—
|
|
|
Other assets
|
|
221
|
|
|
|
190
|
|
|
Total assets
|
$
|
3,752
|
|
|
$
|
3,935
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
$
|
376
|
|
|
$
|
427
|
|
|
Current portion of long-term debt
|
|
1
|
|
|
|
223
|
|
|
Current portion of operating lease liabilities
|
|
8
|
|
|
|
—
|
|
|
Total current liabilities
|
|
385
|
|
|
|
650
|
|
|
Long-term debt, net of current portion
|
|
422
|
|
|
|
422
|
|
|
Pension and other postretirement benefit obligations
|
|
1,231
|
|
|
|
1,257
|
|
|
Operating lease liabilities, net of current portion
|
|
59
|
|
|
|
—
|
|
|
Other liabilities
|
|
55
|
|
|
|
71
|
|
|
Total liabilities
|
|
2,152
|
|
|
|
2,400
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
||
Equity:
|
|
|
|
|
|
|
||
Resolute Forest Products Inc. shareholders’ equity:
|
|
|
|
|
|
|
||
Common stock, $0.001 par value. 119.1 shares issued and 90.4 shares outstanding as of June 30, 2019; 118.8 shares issued and 90.8 shares outstanding as of December 31, 2018
|
|
—
|
|
|
|
—
|
|
|
Additional paid-in capital
|
|
3,803
|
|
|
|
3,802
|
|
|
Deficit
|
|
(1,131
|
)
|
|
|
(1,198
|
)
|
|
Accumulated other comprehensive loss
|
|
(948
|
)
|
|
|
(950
|
)
|
|
Treasury stock at cost, 28.7 shares and 28.0 shares as of June 30, 2019 and December 31, 2018, respectively
|
|
(125
|
)
|
|
|
(120
|
)
|
|
Total Resolute Forest Products Inc. shareholders’ equity
|
|
1,599
|
|
|
|
1,534
|
|
|
Noncontrolling interests
|
|
1
|
|
|
|
1
|
|
|
Total equity
|
|
1,600
|
|
|
|
1,535
|
|
|
Total liabilities and equity
|
$
|
3,752
|
|
|
$
|
3,935
|
|
|
|
Three Months Ended June 30, 2019
|
|||||||||||||||||||||||||||
|
Resolute Forest Products Inc. Shareholders’ Equity
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Common
Stock
|
Additional
Paid-In
Capital
|
Deficit
|
Accumulated Other Comprehensive Loss
|
Treasury
Stock
|
Non-controlling
Interests
|
Total Equity
|
|||||||||||||||||||||
Balance as of March 31, 2019
|
$
|
—
|
|
|
$
|
3,802
|
|
|
$
|
(1,156
|
)
|
|
$
|
(947
|
)
|
|
$
|
(120
|
)
|
|
$
|
1
|
|
|
$
|
1,580
|
|
|
Share-based compensation, net of withholding taxes
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
Net income
|
|
—
|
|
|
|
—
|
|
|
|
25
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
25
|
|
|
Purchases of treasury stock (0.7 shares) (Note 11)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(5
|
)
|
|
|
—
|
|
|
|
(5
|
)
|
|
Other comprehensive loss, net of tax
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
Balance as of June 30, 2019
|
$
|
—
|
|
|
$
|
3,803
|
|
|
$
|
(1,131
|
)
|
|
$
|
(948
|
)
|
|
$
|
(125
|
)
|
|
$
|
1
|
|
|
$
|
1,600
|
|
|
|
Six Months Ended June 30, 2019
|
|||||||||||||||||||||||||||
|
Resolute Forest Products Inc. Shareholders’ Equity
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Common
Stock
|
Additional
Paid-In
Capital
|
Deficit
|
Accumulated Other Comprehensive Loss
|
Treasury
Stock
|
Non-controlling
Interests
|
Total Equity
|
|||||||||||||||||||||
Balance as of December 31, 2018
|
$
|
—
|
|
|
$
|
3,802
|
|
|
$
|
(1,198
|
)
|
|
$
|
(950
|
)
|
|
$
|
(120
|
)
|
|
$
|
1
|
|
|
$
|
1,535
|
|
|
Share-based compensation, net of withholding taxes
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
Net income
|
|
—
|
|
|
|
—
|
|
|
|
67
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
67
|
|
|
Purchases of treasury stock (0.7 shares) (Note 11)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(5
|
)
|
|
|
—
|
|
|
|
(5
|
)
|
|
Stock unit awards vested (0.3 shares), net of shares forfeited for employee withholding taxes
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Other comprehensive income, net of tax
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
Balance as of June 30, 2019
|
$
|
—
|
|
|
$
|
3,803
|
|
|
$
|
(1,131
|
)
|
|
$
|
(948
|
)
|
|
$
|
(125
|
)
|
|
$
|
1
|
|
|
$
|
1,600
|
|
|
|
Three Months Ended June 30, 2018
|
|||||||||||||||||||||||||||
|
Resolute Forest Products Inc. Shareholders’ Equity
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Common
Stock |
Additional
Paid-In Capital |
Deficit
|
Accumulated Other Comprehensive Loss
|
Treasury
Stock |
Non-
controlling Interests |
Total Equity
|
|||||||||||||||||||||
Balance as of March 31, 2018
|
$
|
—
|
|
|
$
|
3,796
|
|
|
$
|
(1,284
|
)
|
|
$
|
(777
|
)
|
|
$
|
(120
|
)
|
|
$
|
1
|
|
|
$
|
1,616
|
|
|
Share-based compensation, net of withholding taxes
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
Net income
|
|
—
|
|
|
|
—
|
|
|
|
72
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
72
|
|
|
Other comprehensive income, net of tax
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3
|
|
|
Balance as of June 30, 2018
|
$
|
—
|
|
|
$
|
3,797
|
|
|
$
|
(1,212
|
)
|
|
$
|
(774
|
)
|
|
$
|
(120
|
)
|
|
$
|
1
|
|
|
$
|
1,692
|
|
|
|
Six Months Ended June 30, 2018
|
|||||||||||||||||||||||||||
|
Resolute Forest Products Inc. Shareholders’ Equity
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Common
Stock
|
Additional
Paid-In
Capital
|
Deficit
|
Accumulated Other Comprehensive Loss
|
Treasury
Stock
|
Non-
controlling
Interests
|
Total Equity
|
|||||||||||||||||||||
Balance as of December 31, 2017
|
$
|
—
|
|
|
$
|
3,793
|
|
|
$
|
(1,294
|
)
|
|
$
|
(780
|
)
|
|
$
|
(120
|
)
|
|
$
|
1
|
|
|
$
|
1,600
|
|
|
Share-based compensation, net of withholding taxes
|
|
—
|
|
|
|
4
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4
|
|
|
Net income
|
|
—
|
|
|
|
—
|
|
|
|
82
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
82
|
|
|
Stock unit awards vested (0.1 shares), net of shares forfeited for employee withholding taxes
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Other comprehensive income, net of tax
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6
|
|
|
Balance as of June 30, 2018
|
$
|
—
|
|
|
$
|
3,797
|
|
|
$
|
(1,212
|
)
|
|
$
|
(774
|
)
|
|
$
|
(120
|
)
|
|
$
|
1
|
|
|
$
|
1,692
|
|
|
|
Six Months Ended
June 30, |
|||||||
|
2019
|
|
|
2018
|
|
|
||
Cash flows from operating activities:
|
|
|
|
|
|
|
||
Net income including noncontrolling interests
|
$
|
67
|
|
|
$
|
82
|
|
|
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:
|
|
|
|
|
|
|
||
Share-based compensation
|
|
3
|
|
|
|
5
|
|
|
Depreciation and amortization
|
|
82
|
|
|
|
107
|
|
|
Reversal of inventory write-downs related to closures
|
|
—
|
|
|
|
(1
|
)
|
|
Deferred income taxes
|
|
40
|
|
|
|
75
|
|
|
Net pension contributions and other postretirement benefit payments
|
|
(57
|
)
|
|
|
(70
|
)
|
|
Net gain on disposition of assets
|
|
—
|
|
|
|
(4
|
)
|
|
(Gain) loss on translation of foreign currency denominated deferred income taxes
|
|
(35
|
)
|
|
|
44
|
|
|
Loss (gain) on translation of foreign currency denominated pension and other postretirement benefit obligations
|
|
37
|
|
|
|
(36
|
)
|
|
Net planned major maintenance amortization (payments)
|
|
7
|
|
|
|
(3
|
)
|
|
Changes in working capital:
|
|
|
|
|
|
|
||
Accounts receivable
|
|
38
|
|
|
|
17
|
|
|
Inventories
|
|
(21
|
)
|
|
|
(20
|
)
|
|
Other current assets
|
|
(3
|
)
|
|
|
(1
|
)
|
|
Accounts payable and accrued liabilities
|
|
(64
|
)
|
|
|
18
|
|
|
Other, net
|
|
1
|
|
|
|
7
|
|
|
Net cash provided by operating activities
|
|
95
|
|
|
|
220
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Cash invested in fixed assets
|
|
(45
|
)
|
|
|
(53
|
)
|
|
Disposition of assets
|
|
2
|
|
|
|
2
|
|
|
Decrease (increase) in countervailing duty cash deposits on supercalendered paper
|
|
1
|
|
|
|
(11
|
)
|
|
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber
|
|
(33
|
)
|
|
|
(41
|
)
|
|
Decrease (increase) in countervailing duty cash deposits on uncoated groundwood paper
|
|
6
|
|
|
|
(6
|
)
|
|
Net cash used in investing activities
|
|
(69
|
)
|
|
|
(109
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
||
Net repayments under revolving credit facilities
|
|
—
|
|
|
|
(114
|
)
|
|
Payments of debt
|
|
(225
|
)
|
|
|
—
|
|
|
Purchases of treasury stock
|
|
(5
|
)
|
|
|
—
|
|
|
Payments of financing and credit facility fees
|
|
(2
|
)
|
|
|
(1
|
)
|
|
Cash used in financing activities
|
|
(232
|
)
|
|
|
(115
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents, and restricted cash
|
|
1
|
|
|
|
(2
|
)
|
|
Net decrease in cash and cash equivalents, and restricted cash
|
|
(205
|
)
|
|
|
(6
|
)
|
|
Cash and cash equivalents, and restricted cash:
|
|
|
|
|
|
|
||
Beginning of period
|
|
345
|
|
|
|
49
|
|
|
End of period
|
$
|
140
|
|
|
$
|
43
|
|
|
Cash and cash equivalents, and restricted cash at period end:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
98
|
|
|
$
|
6
|
|
|
Restricted cash (included in “Other current assets” and “Other assets”)
|
|
42
|
|
|
|
37
|
|
|
(Unaudited, in millions
)
|
Before ASU
|
Effect of Change
|
As Adjusted
|
|||||||||
Amortizable intangible assets, net
|
$
|
50
|
|
|
$
|
1
|
|
|
$
|
51
|
|
|
Operating lease right-of-use assets
|
|
—
|
|
|
|
65
|
|
|
|
65
|
|
|
Current portion of operating lease liabilities
|
|
—
|
|
|
|
7
|
|
|
|
7
|
|
|
Operating lease liabilities, net of current portion
|
|
—
|
|
|
|
60
|
|
|
|
60
|
|
|
Other liabilities
|
|
71
|
|
|
|
(1
|
)
|
|
|
70
|
|
|
(Unaudited, in millions)
|
Unamortized Prior Service Credits
|
Unamortized Actuarial Losses
|
Foreign
Currency
Translation
|
Total
|
||||||||||||
Balance as of December 31, 2018
|
$
|
28
|
|
|
$
|
(971
|
)
|
|
$
|
(7
|
)
|
|
$
|
(950
|
)
|
|
Other comprehensive loss before reclassifications
|
|
—
|
|
|
|
(3
|
)
|
|
|
—
|
|
|
|
(3
|
)
|
|
Amounts reclassified from accumulated other comprehensive loss
(1)
|
|
(7
|
)
|
|
|
12
|
|
|
|
—
|
|
|
|
5
|
|
|
Net current period other comprehensive (loss) income
|
|
(7
|
)
|
|
|
9
|
|
|
|
—
|
|
|
|
2
|
|
|
Balance as of June 30, 2019
|
$
|
21
|
|
|
$
|
(962
|
)
|
|
$
|
(7
|
)
|
|
$
|
(948
|
)
|
|
(1)
|
See the table below for details about these reclassifications.
|
(Unaudited, in millions)
|
Amounts Reclassified From Accumulated Other Comprehensive Loss
|
Affected Line in the Consolidated Statements of Operations
|
|||
Unamortized Prior Service Credits
|
|
|
|
|
|
Amortization of prior service credits
|
$
|
(6
|
)
|
|
Non-operating pension and other postretirement benefit credits
(1)
|
Curtailment gain
|
|
(1
|
)
|
|
Non-operating pension and other postretirement benefit credits
(1)
|
|
|
—
|
|
|
Income tax provision
|
|
$
|
(7
|
)
|
|
Net of tax
|
Unamortized Actuarial Losses
|
|
|
|
|
|
Amortization of actuarial losses
|
$
|
15
|
|
|
Non-operating pension and other postretirement benefit credits
(1)
|
|
|
(3
|
)
|
|
Income tax provision
|
|
$
|
12
|
|
|
Net of tax
|
Total Reclassifications
|
$
|
5
|
|
|
Net of tax
|
(1)
|
These items are included in the computation of net periodic benefit cost related to our pension and other postretirement benefit (or “
OPEB
”) plans summarized in
Note 8, “Employee Benefit Plans
.”
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions, except per share amounts)
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to Resolute Forest Products Inc.
|
$
|
25
|
|
|
$
|
72
|
|
|
|
$
|
67
|
|
|
$
|
82
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic weighted-average number of Resolute Forest Products Inc. common shares outstanding
|
|
92.4
|
|
|
|
91.3
|
|
|
|
|
92.4
|
|
|
|
91.2
|
|
|
Dilutive impact of nonvested stock unit awards
(1)
|
|
1.2
|
|
|
|
1.9
|
|
|
|
|
1.4
|
|
|
|
1.9
|
|
|
Diluted weighted-average number of Resolute Forest Products Inc. common shares outstanding
|
|
93.6
|
|
|
|
93.2
|
|
|
|
|
93.8
|
|
|
|
93.1
|
|
|
Net income per share attributable to Resolute Forest Products Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
0.27
|
|
|
$
|
0.79
|
|
|
|
$
|
0.73
|
|
|
$
|
0.90
|
|
|
Diluted
|
|
0.27
|
|
|
|
0.77
|
|
|
|
|
0.71
|
|
|
|
0.88
|
|
|
(1)
|
When we refer to stock unit awards we mean equity-classified restricted stock units, deferred stock units and performance stock units.
|
(Unaudited, in millions)
|
June 30,
2019 |
December 31,
2018 |
||||||
Raw materials
|
$
|
102
|
|
|
$
|
106
|
|
|
Work in process
|
|
41
|
|
|
|
39
|
|
|
Finished goods
|
|
194
|
|
|
|
180
|
|
|
Mill stores and other supplies
|
|
193
|
|
|
|
183
|
|
|
|
$
|
530
|
|
|
$
|
508
|
|
|
(Unaudited, in millions)
|
Three Months Ended
June 30, 2019 |
|
Six Months Ended
June 30, 2019 |
||||||
Operating lease cost
|
$
|
3
|
|
|
|
$
|
6
|
|
|
Variable lease cost
(1)
|
|
4
|
|
|
|
|
10
|
|
|
(1)
|
Variable lease cost is determined by the consumption of the underlying asset.
|
(Unaudited)
|
June 30,
2019 |
|||
Weighted-average remaining operating lease term (in years)
|
|
11.4
|
|
|
Weighted-average operating lease discount rate
|
|
4.7
|
%
|
|
(Unaudited, in millions)
|
Six Months Ended
June 30, 2019 |
|||
Operating cash flow payments for operating lease liabilities
|
$
|
5
|
|
|
Operating lease right-of-use assets obtained in exchange for operating lease liabilities
|
|
2
|
|
|
(Unaudited, in millions)
|
Operating Leases
|
|||
Years ending December 31,
|
|
|
|
|
2019
|
$
|
5
|
|
|
2020
|
|
11
|
|
|
2021
|
|
9
|
|
|
2022
|
|
9
|
|
|
2023
|
|
7
|
|
|
2024 and thereafter
|
|
46
|
|
|
Total lease payments
|
|
87
|
|
|
Less: imputed interest
|
|
(20
|
)
|
|
Total operating lease liabilities
|
$
|
67
|
|
|
(Unaudited, in millions)
|
June 30,
2019 |
December 31,
2018 |
||||||
Trade accounts payable
|
$
|
270
|
|
|
$
|
299
|
|
|
Accrued compensation
|
|
49
|
|
|
|
66
|
|
|
Accrued interest
|
|
3
|
|
|
|
5
|
|
|
Pension and other postretirement benefit obligations
|
|
17
|
|
|
|
17
|
|
|
Accrued provision for former Fibrek Inc. dissenting shareholders
|
|
11
|
|
|
|
—
|
|
|
Income and other taxes payable
|
|
4
|
|
|
|
4
|
|
|
Deposits
|
|
10
|
|
|
|
20
|
|
|
Other
|
|
12
|
|
|
|
16
|
|
|
|
$
|
376
|
|
|
$
|
427
|
|
|
(Unaudited, in millions)
|
June 30,
2019 |
December 31,
2018 |
||||||
5.875% senior unsecured notes due 2023:
|
|
|
|
|
|
|
||
Principal amount
|
$
|
375
|
|
|
$
|
600
|
|
|
Deferred financing costs
|
|
(3
|
)
|
|
|
(5
|
)
|
|
Unamortized discount
|
|
(2
|
)
|
|
|
(3
|
)
|
|
Total 5.875% senior unsecured notes due 2023
|
|
370
|
|
|
|
592
|
|
|
Term loan due 2025
|
|
46
|
|
|
|
46
|
|
|
Finance lease obligation
|
|
7
|
|
|
|
7
|
|
|
Total debt
|
|
423
|
|
|
|
645
|
|
|
Less: Current portion of 5.875% senior unsecured notes due 2023
|
|
—
|
|
|
|
(222
|
)
|
|
Less: Current portion of finance lease obligation
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Long-term debt, net of current portion
|
$
|
422
|
|
|
$
|
422
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Interest cost
|
$
|
45
|
|
|
$
|
48
|
|
|
|
$
|
90
|
|
|
$
|
96
|
|
|
Expected return on plan assets
|
|
(61
|
)
|
|
|
(67
|
)
|
|
|
|
(124
|
)
|
|
|
(134
|
)
|
|
Amortization of actuarial losses
|
|
9
|
|
|
|
10
|
|
|
|
|
18
|
|
|
|
20
|
|
|
Amortization of prior service credits
|
|
(1
|
)
|
|
|
—
|
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Non-operating pension credits
|
|
(8
|
)
|
|
|
(9
|
)
|
|
|
|
(17
|
)
|
|
|
(19
|
)
|
|
Service cost
|
|
3
|
|
|
|
4
|
|
|
|
|
7
|
|
|
|
9
|
|
|
Net periodic benefit credits before special events
|
|
(5
|
)
|
|
|
(5
|
)
|
|
|
|
(10
|
)
|
|
|
(10
|
)
|
|
Curtailment and settlement (gain) loss
|
|
(1
|
)
|
|
|
1
|
|
|
|
|
(1
|
)
|
|
|
1
|
|
|
|
$
|
(6
|
)
|
|
$
|
(4
|
)
|
|
|
$
|
(11
|
)
|
|
$
|
(9
|
)
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Interest cost
|
$
|
1
|
|
|
$
|
2
|
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
Amortization of actuarial gains
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
Amortization of prior service credits
|
|
(2
|
)
|
|
|
(4
|
)
|
|
|
|
(5
|
)
|
|
|
(7
|
)
|
|
Non-operating other postretirement benefit credits
|
|
(3
|
)
|
|
|
(4
|
)
|
|
|
|
(6
|
)
|
|
|
(7
|
)
|
|
Service cost
|
|
—
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
1
|
|
|
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
|
|
$
|
(6
|
)
|
|
$
|
(6
|
)
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Income before income taxes
|
$
|
44
|
|
|
$
|
119
|
|
|
|
$
|
107
|
|
|
$
|
160
|
|
|
Income tax provision:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expected income tax provision
|
|
(9
|
)
|
|
|
(25
|
)
|
|
|
|
(22
|
)
|
|
|
(34
|
)
|
|
Changes resulting from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Valuation allowance
(1)
|
|
(4
|
)
|
|
|
13
|
|
|
|
|
(11
|
)
|
|
|
8
|
|
|
Foreign exchange
|
|
1
|
|
|
|
(7
|
)
|
|
|
|
4
|
|
|
|
(14
|
)
|
|
U.S. tax on non-U.S. earnings
(2)
|
|
(5
|
)
|
|
|
(18
|
)
|
|
|
|
(5
|
)
|
|
|
(25
|
)
|
|
State income taxes, net of federal income tax benefit
|
|
1
|
|
|
|
—
|
|
|
|
|
2
|
|
|
|
2
|
|
|
Foreign tax rate differences
|
|
(4
|
)
|
|
|
(7
|
)
|
|
|
|
(9
|
)
|
|
|
(12
|
)
|
|
Other, net
|
|
1
|
|
|
|
(3
|
)
|
|
|
|
1
|
|
|
|
(3
|
)
|
|
|
$
|
(19
|
)
|
|
$
|
(47
|
)
|
|
|
$
|
(40
|
)
|
|
$
|
(78
|
)
|
|
(1)
|
Relates to our U.S. operations.
|
(2)
|
Reduces income tax benefits on U.S. losses for the three and six months ended June 30, 2019 and 2018.
|
(Unaudited,
in millions)
|
Market Pulp
(1)
|
Tissue
(2)
|
Wood Products
(3)
|
Newsprint
|
Specialty
Papers
|
Segment
Total
|
Corporate
and Other
|
Total
|
||||||||||||||||||||||||
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Second quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
$
|
189
|
|
|
$
|
43
|
|
|
$
|
168
|
|
|
$
|
209
|
|
|
$
|
146
|
|
|
$
|
755
|
|
|
$
|
—
|
|
|
$
|
755
|
|
|
2018
|
|
264
|
|
|
|
35
|
|
|
|
254
|
|
|
|
230
|
|
|
|
193
|
|
|
|
976
|
|
|
|
—
|
|
|
|
976
|
|
|
First six months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
|
420
|
|
|
|
82
|
|
|
|
329
|
|
|
|
421
|
|
|
|
298
|
|
|
|
1,550
|
|
|
|
—
|
|
|
|
1,550
|
|
|
2018
|
|
521
|
|
|
|
57
|
|
|
|
463
|
|
|
|
428
|
|
|
|
381
|
|
|
|
1,850
|
|
|
|
—
|
|
|
|
1,850
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Second quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
$
|
5
|
|
|
$
|
4
|
|
|
$
|
9
|
|
|
$
|
8
|
|
|
$
|
11
|
|
|
$
|
37
|
|
|
$
|
5
|
|
|
$
|
42
|
|
|
2018
|
|
8
|
|
|
|
5
|
|
|
|
7
|
|
|
|
17
|
|
|
|
12
|
|
|
|
49
|
|
|
|
5
|
|
|
|
54
|
|
|
First six months
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
2019
|
|
10
|
|
|
|
9
|
|
|
|
17
|
|
|
|
15
|
|
|
|
21
|
|
|
|
72
|
|
|
|
10
|
|
|
|
82
|
|
|
2018
|
|
15
|
|
|
|
6
|
|
|
|
15
|
|
|
|
33
|
|
|
|
24
|
|
|
|
93
|
|
|
|
14
|
|
|
|
107
|
|
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Second quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
$
|
27
|
|
|
$
|
(4
|
)
|
|
$
|
(3
|
)
|
|
$
|
17
|
|
|
$
|
15
|
|
|
$
|
52
|
|
|
$
|
(12
|
)
|
|
$
|
40
|
|
|
2018
|
|
41
|
|
|
|
(10
|
)
|
|
|
79
|
|
|
|
18
|
|
|
|
4
|
|
|
|
132
|
|
|
|
(11
|
)
|
|
|
121
|
|
|
First six months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
|
69
|
|
|
|
(12
|
)
|
|
|
3
|
|
|
|
45
|
|
|
|
30
|
|
|
|
135
|
|
|
|
(31
|
)
|
|
|
104
|
|
|
2018
|
|
74
|
|
|
|
(11
|
)
|
|
|
132
|
|
|
|
14
|
|
|
|
(3
|
)
|
|
|
206
|
|
|
|
(37
|
)
|
|
|
169
|
|
|
(1)
|
Inter-segment sales of
$11 million
and
$9 million
for the three months ended June 30, 2019 and 2018, respectively, and
$22 million
and
$19 million
for the six months ended June 30, 2019 and 2018, which are transacted at cost, were excluded from market pulp sales.
|
(2)
|
The operating results of our Calhoun (Tennessee) tissue operations, previously recorded under “corporate and other,” have been recorded in our tissue segment since April 1, 2018.
|
(3)
|
Wood products sales to our joint ventures, which are transacted at arm’s length negotiated prices, were
$6 million
and
$8 million
for the three months ended June 30, 2019 and 2018, respectively, and
$11 million
and
$16 million
for the six months ended June 30, 2019 and 2018, respectively.
|
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
|
||||||||||||||||||||
For the Three Months Ended June 30, 2019
|
||||||||||||||||||||
(Unaudited, in millions)
|
Parent
|
Guarantor
Subsidiaries
|
Non-guarantor
Subsidiaries
|
Consolidating
Adjustments
|
Consolidated
|
|||||||||||||||
Sales
|
$
|
—
|
|
|
$
|
613
|
|
|
$
|
569
|
|
|
$
|
(427
|
)
|
|
$
|
755
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of sales, excluding depreciation, amortization and distribution costs
|
|
—
|
|
|
|
599
|
|
|
|
371
|
|
|
|
(434
|
)
|
|
|
536
|
|
|
Depreciation and amortization
|
|
—
|
|
|
|
9
|
|
|
|
33
|
|
|
|
—
|
|
|
|
42
|
|
|
Distribution costs
|
|
—
|
|
|
|
23
|
|
|
|
76
|
|
|
|
2
|
|
|
|
101
|
|
|
Selling, general and administrative expenses
|
|
4
|
|
|
|
15
|
|
|
|
17
|
|
|
|
—
|
|
|
|
36
|
|
|
Operating (loss) income
|
|
(4
|
)
|
|
|
(33
|
)
|
|
|
72
|
|
|
|
5
|
|
|
|
40
|
|
|
Interest expense
|
|
(17
|
)
|
|
|
—
|
|
|
|
(2
|
)
|
|
|
12
|
|
|
|
(7
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
2
|
|
|
|
10
|
|
|
|
—
|
|
|
|
12
|
|
|
Other income (expense), net
|
|
—
|
|
|
|
15
|
|
|
|
(4
|
)
|
|
|
(12
|
)
|
|
|
(1
|
)
|
|
Equity in income of subsidiaries
|
|
46
|
|
|
|
7
|
|
|
|
—
|
|
|
|
(53
|
)
|
|
|
—
|
|
|
Income (loss) before income taxes
|
|
25
|
|
|
|
(9
|
)
|
|
|
76
|
|
|
|
(48
|
)
|
|
|
44
|
|
|
Income tax provision
|
|
—
|
|
|
|
—
|
|
|
|
(18
|
)
|
|
|
(1
|
)
|
|
|
(19
|
)
|
|
Net income (loss) including noncontrolling interests
|
|
25
|
|
|
|
(9
|
)
|
|
|
58
|
|
|
|
(49
|
)
|
|
|
25
|
|
|
Net income attributable to noncontrolling interests
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net income (loss) attributable to Resolute Forest Products Inc.
|
$
|
25
|
|
|
$
|
(9
|
)
|
|
$
|
58
|
|
|
$
|
(49
|
)
|
|
$
|
25
|
|
|
Comprehensive income (loss) attributable to Resolute Forest Products Inc.
|
$
|
24
|
|
|
$
|
(12
|
)
|
|
$
|
60
|
|
|
$
|
(48
|
)
|
|
$
|
24
|
|
|
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
|
||||||||||||||||||||
For the Six Months Ended June 30, 2019
|
||||||||||||||||||||
(Unaudited, in millions)
|
Parent
|
Guarantor
Subsidiaries
|
Non-guarantor
Subsidiaries
|
Consolidating
Adjustments
|
Consolidated
|
|||||||||||||||
Sales
|
$
|
—
|
|
|
$
|
1,285
|
|
|
$
|
1,166
|
|
|
$
|
(901
|
)
|
|
$
|
1,550
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of sales, excluding depreciation, amortization and distribution costs
|
|
—
|
|
|
|
1,247
|
|
|
|
742
|
|
|
|
(899
|
)
|
|
|
1,090
|
|
|
Depreciation and amortization
|
|
—
|
|
|
|
19
|
|
|
|
63
|
|
|
|
—
|
|
|
|
82
|
|
|
Distribution costs
|
|
—
|
|
|
|
49
|
|
|
|
155
|
|
|
|
(3
|
)
|
|
|
201
|
|
|
Selling, general and administrative expenses
|
|
10
|
|
|
|
24
|
|
|
|
39
|
|
|
|
—
|
|
|
|
73
|
|
|
Operating (loss) income
|
|
(10
|
)
|
|
|
(54
|
)
|
|
|
167
|
|
|
|
1
|
|
|
|
104
|
|
|
Interest expense
|
|
(34
|
)
|
|
|
(2
|
)
|
|
|
(6
|
)
|
|
|
26
|
|
|
|
(16
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
5
|
|
|
|
19
|
|
|
|
—
|
|
|
|
24
|
|
|
Other (expense) income, net
|
|
(3
|
)
|
|
|
32
|
|
|
|
(8
|
)
|
|
|
(26
|
)
|
|
|
(5
|
)
|
|
Equity in income of subsidiaries
|
|
114
|
|
|
|
18
|
|
|
|
—
|
|
|
|
(132
|
)
|
|
|
—
|
|
|
Income (loss) before income taxes
|
|
67
|
|
|
|
(1
|
)
|
|
|
172
|
|
|
|
(131
|
)
|
|
|
107
|
|
|
Income tax provision
|
|
—
|
|
|
|
—
|
|
|
|
(40
|
)
|
|
|
—
|
|
|
|
(40
|
)
|
|
Net income (loss) including noncontrolling interests
|
|
67
|
|
|
|
(1
|
)
|
|
|
132
|
|
|
|
(131
|
)
|
|
|
67
|
|
|
Net income attributable to noncontrolling interests
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net income (loss) attributable to Resolute Forest Products Inc.
|
$
|
67
|
|
|
$
|
(1
|
)
|
|
$
|
132
|
|
|
$
|
(131
|
)
|
|
$
|
67
|
|
|
Comprehensive income (loss) attributable to Resolute Forest Products Inc.
|
$
|
69
|
|
|
$
|
(6
|
)
|
|
$
|
139
|
|
|
$
|
(133
|
)
|
|
$
|
69
|
|
|
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
|
||||||||||||||||||||
For the Three Months Ended June 30, 2018
|
||||||||||||||||||||
(Unaudited, in millions)
|
Parent
|
Guarantor
Subsidiaries
|
Non-guarantor
Subsidiaries
|
Consolidating
Adjustments
|
Consolidated
|
|||||||||||||||
Sales
|
$
|
—
|
|
|
$
|
731
|
|
|
$
|
674
|
|
|
$
|
(429
|
)
|
|
$
|
976
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of sales, excluding depreciation, amortization and distribution costs
|
|
—
|
|
|
|
666
|
|
|
|
396
|
|
|
|
(423
|
)
|
|
|
639
|
|
|
Depreciation and amortization
|
|
—
|
|
|
|
21
|
|
|
|
33
|
|
|
|
—
|
|
|
|
54
|
|
|
Distribution costs
|
|
—
|
|
|
|
38
|
|
|
|
85
|
|
|
|
—
|
|
|
|
123
|
|
|
Selling, general and administrative expenses
|
|
7
|
|
|
|
14
|
|
|
|
21
|
|
|
|
—
|
|
|
|
42
|
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
|
Net gain on disposition of assets
|
|
—
|
|
|
|
—
|
|
|
|
(4
|
)
|
|
|
—
|
|
|
|
(4
|
)
|
|
Operating (loss) income
|
|
(7
|
)
|
|
|
(8
|
)
|
|
|
142
|
|
|
|
(6
|
)
|
|
|
121
|
|
|
Interest expense
|
|
(24
|
)
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
17
|
|
|
|
(11
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
3
|
|
|
|
9
|
|
|
|
—
|
|
|
|
12
|
|
|
Other income (expense), net
|
|
—
|
|
|
|
19
|
|
|
|
(5
|
)
|
|
|
(17
|
)
|
|
|
(3
|
)
|
|
Equity in income of subsidiaries
|
|
103
|
|
|
|
28
|
|
|
|
—
|
|
|
|
(131
|
)
|
|
|
—
|
|
|
Income before income taxes
|
|
72
|
|
|
|
41
|
|
|
|
143
|
|
|
|
(137
|
)
|
|
|
119
|
|
|
Income tax provision
|
|
—
|
|
|
|
—
|
|
|
|
(48
|
)
|
|
|
1
|
|
|
|
(47
|
)
|
|
Net income including noncontrolling interests
|
|
72
|
|
|
|
41
|
|
|
|
95
|
|
|
|
(136
|
)
|
|
|
72
|
|
|
Net income attributable to noncontrolling interests
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net income attributable to Resolute Forest Products Inc.
|
$
|
72
|
|
|
$
|
41
|
|
|
$
|
95
|
|
|
$
|
(136
|
)
|
|
$
|
72
|
|
|
Comprehensive income attributable to Resolute Forest Products Inc.
|
$
|
75
|
|
|
$
|
39
|
|
|
$
|
100
|
|
|
$
|
(139
|
)
|
|
$
|
75
|
|
|
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
|
||||||||||||||||||||
For the Six Months Ended June 30, 2018
|
||||||||||||||||||||
(Unaudited, in millions)
|
Parent
|
Guarantor
Subsidiaries
|
Non-guarantor
Subsidiaries
|
Consolidating
Adjustments
|
Consolidated
|
|||||||||||||||
Sales
|
$
|
—
|
|
|
$
|
1,540
|
|
|
$
|
1,266
|
|
|
$
|
(956
|
)
|
|
$
|
1,850
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of sales, excluding depreciation, amortization and distribution costs
|
|
—
|
|
|
|
1,437
|
|
|
|
762
|
|
|
|
(946
|
)
|
|
|
1,253
|
|
|
Depreciation and amortization
|
|
—
|
|
|
|
41
|
|
|
|
66
|
|
|
|
—
|
|
|
|
107
|
|
|
Distribution costs
|
|
—
|
|
|
|
77
|
|
|
|
164
|
|
|
|
(2
|
)
|
|
|
239
|
|
|
Selling, general and administrative expenses
|
|
12
|
|
|
|
31
|
|
|
|
42
|
|
|
|
—
|
|
|
|
85
|
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
|
Net gain on disposition of assets
|
|
—
|
|
|
|
—
|
|
|
|
(4
|
)
|
|
|
—
|
|
|
|
(4
|
)
|
|
Operating (loss) income
|
|
(12
|
)
|
|
|
(46
|
)
|
|
|
235
|
|
|
|
(8
|
)
|
|
|
169
|
|
|
Interest expense
|
|
(47
|
)
|
|
|
(4
|
)
|
|
|
(6
|
)
|
|
|
33
|
|
|
|
(24
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
7
|
|
|
|
18
|
|
|
|
—
|
|
|
|
25
|
|
|
Other income (expense), net
|
|
—
|
|
|
|
33
|
|
|
|
(10
|
)
|
|
|
(33
|
)
|
|
|
(10
|
)
|
|
Equity in income of subsidiaries
|
|
141
|
|
|
|
49
|
|
|
|
—
|
|
|
|
(190
|
)
|
|
|
—
|
|
|
Income before income taxes
|
|
82
|
|
|
|
39
|
|
|
|
237
|
|
|
|
(198
|
)
|
|
|
160
|
|
|
Income tax provision
|
|
—
|
|
|
|
—
|
|
|
|
(80
|
)
|
|
|
2
|
|
|
|
(78
|
)
|
|
Net income including noncontrolling interests
|
|
82
|
|
|
|
39
|
|
|
|
157
|
|
|
|
(196
|
)
|
|
|
82
|
|
|
Net income attributable to noncontrolling interests
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net income attributable to Resolute Forest Products Inc.
|
$
|
82
|
|
|
$
|
39
|
|
|
$
|
157
|
|
|
$
|
(196
|
)
|
|
$
|
82
|
|
|
Comprehensive income attributable to Resolute Forest Products Inc.
|
$
|
88
|
|
|
$
|
34
|
|
|
$
|
168
|
|
|
$
|
(202
|
)
|
|
$
|
88
|
|
|
CONDENSED CONSOLIDATING BALANCE SHEET
|
||||||||||||||||||||
As of June 30, 2019
|
||||||||||||||||||||
(Unaudited, in millions)
|
Parent
|
Guarantor
Subsidiaries
|
Non-guarantor
Subsidiaries
|
Consolidating
Adjustments
|
Consolidated
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
91
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
98
|
|
|
Accounts receivable, net
|
|
—
|
|
|
|
270
|
|
|
|
130
|
|
|
|
—
|
|
|
|
400
|
|
|
Accounts receivable from affiliates
|
|
—
|
|
|
|
248
|
|
|
|
748
|
|
|
|
(996
|
)
|
|
|
—
|
|
|
Inventories, net
|
|
—
|
|
|
|
214
|
|
|
|
328
|
|
|
|
(12
|
)
|
|
|
530
|
|
|
Advance and interest receivable from parent
|
|
—
|
|
|
|
66
|
|
|
|
—
|
|
|
|
(66
|
)
|
|
|
—
|
|
|
Interest receivable from affiliate
|
|
—
|
|
|
|
4
|
|
|
|
—
|
|
|
|
(4
|
)
|
|
|
—
|
|
|
Other current assets
|
|
—
|
|
|
|
16
|
|
|
|
26
|
|
|
|
—
|
|
|
|
42
|
|
|
Total current assets
|
|
—
|
|
|
|
909
|
|
|
|
1,239
|
|
|
|
(1,078
|
)
|
|
|
1,070
|
|
|
Fixed assets, net
|
|
—
|
|
|
|
525
|
|
|
|
954
|
|
|
|
—
|
|
|
|
1,479
|
|
|
Amortizable intangible assets, net
|
|
—
|
|
|
|
3
|
|
|
|
47
|
|
|
|
—
|
|
|
|
50
|
|
|
Deferred income tax assets
|
|
—
|
|
|
|
1
|
|
|
|
865
|
|
|
|
3
|
|
|
|
869
|
|
|
Operating lease right-of-use assets
|
|
—
|
|
|
|
29
|
|
|
|
34
|
|
|
|
—
|
|
|
|
63
|
|
|
Notes receivable from parent
|
|
—
|
|
|
|
1,264
|
|
|
|
—
|
|
|
|
(1,264
|
)
|
|
|
—
|
|
|
Note receivable from affiliate
|
|
—
|
|
|
|
111
|
|
|
|
—
|
|
|
|
(111
|
)
|
|
|
—
|
|
|
Investments in consolidated subsidiaries and affiliates
|
|
3,875
|
|
|
|
2,083
|
|
|
|
—
|
|
|
|
(5,958
|
)
|
|
|
—
|
|
|
Other assets
|
|
—
|
|
|
|
158
|
|
|
|
63
|
|
|
|
—
|
|
|
|
221
|
|
|
Total assets
|
$
|
3,875
|
|
|
$
|
5,083
|
|
|
$
|
3,202
|
|
|
$
|
(8,408
|
)
|
|
$
|
3,752
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts payable and accrued liabilities
|
$
|
10
|
|
|
$
|
122
|
|
|
$
|
244
|
|
|
$
|
—
|
|
|
$
|
376
|
|
|
Current portion of long-term debt
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
Current portion of operating lease liabilities
|
|
—
|
|
|
|
4
|
|
|
|
4
|
|
|
|
—
|
|
|
|
8
|
|
|
Accounts payable to affiliates
|
|
257
|
|
|
|
784
|
|
|
|
—
|
|
|
|
(1,041
|
)
|
|
|
—
|
|
|
Advance and interest payable to subsidiaries
|
|
66
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(66
|
)
|
|
|
—
|
|
|
Interest payable to affiliate
|
|
—
|
|
|
|
—
|
|
|
|
4
|
|
|
|
(4
|
)
|
|
|
—
|
|
|
Total current liabilities
|
|
333
|
|
|
|
911
|
|
|
|
252
|
|
|
|
(1,111
|
)
|
|
|
385
|
|
|
Long-term debt, net of current portion
|
|
370
|
|
|
|
52
|
|
|
|
—
|
|
|
|
—
|
|
|
|
422
|
|
|
Notes payable to subsidiaries
|
|
1,264
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,264
|
)
|
|
|
—
|
|
|
Note payable to affiliate
|
|
—
|
|
|
|
—
|
|
|
|
111
|
|
|
|
(111
|
)
|
|
|
—
|
|
|
Pension and other postretirement benefit obligations
|
|
—
|
|
|
|
330
|
|
|
|
901
|
|
|
|
—
|
|
|
|
1,231
|
|
|
Operating lease liabilities, net of current portion
|
|
—
|
|
|
|
26
|
|
|
|
33
|
|
|
|
—
|
|
|
|
59
|
|
|
Other liabilities
|
|
—
|
|
|
|
22
|
|
|
|
33
|
|
|
|
—
|
|
|
|
55
|
|
|
Total liabilities
|
|
1,967
|
|
|
|
1,341
|
|
|
|
1,330
|
|
|
|
(2,486
|
)
|
|
|
2,152
|
|
|
Total equity
|
|
1,908
|
|
|
|
3,742
|
|
|
|
1,872
|
|
|
|
(5,922
|
)
|
|
|
1,600
|
|
|
Total liabilities and equity
|
$
|
3,875
|
|
|
$
|
5,083
|
|
|
$
|
3,202
|
|
|
$
|
(8,408
|
)
|
|
$
|
3,752
|
|
|
CONDENSED CONSOLIDATING BALANCE SHEET
|
||||||||||||||||||||
As of December 31, 2018
|
||||||||||||||||||||
(Unaudited, in millions)
|
Parent
|
Guarantor
Subsidiaries
|
Non-guarantor
Subsidiaries
|
Consolidating
Adjustments
|
Consolidated
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
301
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
304
|
|
|
Accounts receivable, net
|
|
—
|
|
|
|
301
|
|
|
|
148
|
|
|
|
—
|
|
|
|
449
|
|
|
Accounts receivable from affiliates
|
|
—
|
|
|
|
588
|
|
|
|
1,071
|
|
|
|
(1,659
|
)
|
|
|
—
|
|
|
Inventories, net
|
|
—
|
|
|
|
194
|
|
|
|
327
|
|
|
|
(13
|
)
|
|
|
508
|
|
|
Note, advance and interest receivable from parent
|
|
—
|
|
|
|
422
|
|
|
|
—
|
|
|
|
(422
|
)
|
|
|
—
|
|
|
Interest receivable from affiliate
|
|
—
|
|
|
|
4
|
|
|
|
—
|
|
|
|
(4
|
)
|
|
|
—
|
|
|
Other current assets
|
|
—
|
|
|
|
15
|
|
|
|
28
|
|
|
|
—
|
|
|
|
43
|
|
|
Total current assets
|
|
—
|
|
|
|
1,825
|
|
|
|
1,577
|
|
|
|
(2,098
|
)
|
|
|
1,304
|
|
|
Fixed assets, net
|
|
—
|
|
|
|
523
|
|
|
|
992
|
|
|
|
—
|
|
|
|
1,515
|
|
|
Amortizable intangible assets, net
|
|
—
|
|
|
|
2
|
|
|
|
48
|
|
|
|
—
|
|
|
|
50
|
|
|
Deferred income tax assets
|
|
—
|
|
|
|
1
|
|
|
|
872
|
|
|
|
3
|
|
|
|
876
|
|
|
Notes receivable from parent
|
|
—
|
|
|
|
657
|
|
|
|
—
|
|
|
|
(657
|
)
|
|
|
—
|
|
|
Note receivable from affiliate
|
|
—
|
|
|
|
107
|
|
|
|
—
|
|
|
|
(107
|
)
|
|
|
—
|
|
|
Investments in consolidated subsidiaries and affiliates
|
|
4,119
|
|
|
|
2,205
|
|
|
|
—
|
|
|
|
(6,324
|
)
|
|
|
—
|
|
|
Other assets
|
|
—
|
|
|
|
126
|
|
|
|
64
|
|
|
|
—
|
|
|
|
190
|
|
|
Total assets
|
$
|
4,119
|
|
|
$
|
5,446
|
|
|
$
|
3,553
|
|
|
$
|
(9,183
|
)
|
|
$
|
3,935
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts payable and accrued liabilities
|
$
|
7
|
|
|
$
|
170
|
|
|
$
|
250
|
|
|
$
|
—
|
|
|
$
|
427
|
|
|
Current portion of long-term debt
|
|
222
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
223
|
|
|
Accounts payable to affiliates
|
|
592
|
|
|
|
1,112
|
|
|
|
—
|
|
|
|
(1,704
|
)
|
|
|
—
|
|
|
Note, advance and interest payable to subsidiaries
|
|
422
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(422
|
)
|
|
|
—
|
|
|
Interest payable to affiliate
|
|
—
|
|
|
|
—
|
|
|
|
4
|
|
|
|
(4
|
)
|
|
|
—
|
|
|
Total current liabilities
|
|
1,243
|
|
|
|
1,283
|
|
|
|
254
|
|
|
|
(2,130
|
)
|
|
|
650
|
|
|
Long-term debt, net of current portion
|
|
370
|
|
|
|
52
|
|
|
|
—
|
|
|
|
—
|
|
|
|
422
|
|
|
Notes payable to subsidiaries
|
|
657
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(657
|
)
|
|
|
—
|
|
|
Note payable to affiliate
|
|
—
|
|
|
|
—
|
|
|
|
107
|
|
|
|
(107
|
)
|
|
|
—
|
|
|
Pension and other postretirement benefit obligations
|
|
—
|
|
|
|
342
|
|
|
|
915
|
|
|
|
—
|
|
|
|
1,257
|
|
|
Other liabilities
|
|
6
|
|
|
|
21
|
|
|
|
44
|
|
|
|
—
|
|
|
|
71
|
|
|
Total liabilities
|
|
2,276
|
|
|
|
1,698
|
|
|
|
1,320
|
|
|
|
(2,894
|
)
|
|
|
2,400
|
|
|
Total equity
|
|
1,843
|
|
|
|
3,748
|
|
|
|
2,233
|
|
|
|
(6,289
|
)
|
|
|
1,535
|
|
|
Total liabilities and equity
|
$
|
4,119
|
|
|
$
|
5,446
|
|
|
$
|
3,553
|
|
|
$
|
(9,183
|
)
|
|
$
|
3,935
|
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||||||
For the Six Months Ended June 30, 2019
|
||||||||||||||||||||
(Unaudited, in millions)
|
Parent
|
Guarantor
Subsidiaries
|
Non-guarantor
Subsidiaries
|
Consolidating
Adjustments
|
Consolidated
|
|||||||||||||||
Net cash provided by operating activities
|
$
|
—
|
|
|
$
|
64
|
|
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
95
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash invested in fixed assets
|
|
—
|
|
|
|
(19
|
)
|
|
|
(26
|
)
|
|
|
—
|
|
|
|
(45
|
)
|
|
Disposition of assets
|
|
—
|
|
|
|
2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
Decrease in countervailing duty cash deposits on supercalendered paper
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber
|
|
—
|
|
|
|
(33
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(33
|
)
|
|
Decrease in countervailing duty cash deposits on uncoated groundwood paper
|
|
—
|
|
|
|
6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6
|
|
|
Increase in notes receivable from and advance to parent
|
|
—
|
|
|
|
(230
|
)
|
|
|
—
|
|
|
|
230
|
|
|
|
—
|
|
|
Net cash used in investing activities
|
|
—
|
|
|
|
(273
|
)
|
|
|
(26
|
)
|
|
|
230
|
|
|
|
(69
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Payments of debt
|
|
(225
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(225
|
)
|
|
Purchases of treasury stock
|
|
(5
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(5
|
)
|
|
Payments of financing and credit facility fees
|
|
—
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
(2
|
)
|
|
Increase in notes payable to and advance from subsidiaries
|
|
230
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(230
|
)
|
|
|
—
|
|
|
Net cash used in financing activities
|
|
—
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(230
|
)
|
|
|
(232
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents, and restricted cash
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
|
Net (decrease) increase in cash and cash equivalents, and restricted cash
|
|
—
|
|
|
|
(210
|
)
|
|
|
5
|
|
|
|
—
|
|
|
|
(205
|
)
|
|
Cash and cash equivalents, and restricted cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Beginning of period
|
|
—
|
|
|
|
306
|
|
|
|
39
|
|
|
|
—
|
|
|
|
345
|
|
|
End of period
|
$
|
—
|
|
|
$
|
96
|
|
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
140
|
|
|
Cash and cash equivalents, and restricted cash at period end:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
91
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
98
|
|
|
Restricted cash
|
|
—
|
|
|
|
5
|
|
|
|
37
|
|
|
|
—
|
|
|
|
42
|
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||||||
For the Six Months Ended June 30, 2018
|
||||||||||||||||||||
(Unaudited, in millions)
|
Parent
|
Guarantor
Subsidiaries
|
Non-guarantor
Subsidiaries
|
Consolidating
Adjustments
|
Consolidated
|
|||||||||||||||
Net cash provided by operating activities
|
$
|
—
|
|
|
$
|
187
|
|
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
220
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash invested in fixed assets
|
|
—
|
|
|
|
(16
|
)
|
|
|
(37
|
)
|
|
|
—
|
|
|
|
(53
|
)
|
|
Disposition of assets
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
|
—
|
|
|
|
2
|
|
|
Increase in countervailing duty cash deposits on supercalendered paper
|
|
—
|
|
|
|
(11
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(11
|
)
|
|
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber
|
|
—
|
|
|
|
(41
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(41
|
)
|
|
Increase in countervailing duty cash deposits on uncoated groundwood paper
|
|
—
|
|
|
|
(6
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(6
|
)
|
|
Advance to parent
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
Net cash used in investing activities
|
|
—
|
|
|
|
(75
|
)
|
|
|
(35
|
)
|
|
|
1
|
|
|
|
(109
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net repayments under revolving credit facilities
|
|
—
|
|
|
|
(114
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(114
|
)
|
|
Payments of financing and credit facility fees
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
Advance from subsidiary
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
Net cash used in financing activities
|
|
—
|
|
|
|
(114
|
)
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
(115
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents, and restricted cash
|
|
—
|
|
|
|
—
|
|
|
|
(2
|
)
|
|
|
—
|
|
|
|
(2
|
)
|
|
Net decrease in cash and cash equivalents, and restricted cash
|
|
—
|
|
|
|
(2
|
)
|
|
|
(4
|
)
|
|
|
—
|
|
|
|
(6
|
)
|
|
Cash and cash equivalents, and restricted cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Beginning of period
|
|
—
|
|
|
|
3
|
|
|
|
46
|
|
|
|
—
|
|
|
|
49
|
|
|
End of period
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
43
|
|
|
Cash and cash equivalents, and restricted cash at period end:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
Restricted cash
|
|
—
|
|
|
|
—
|
|
|
|
37
|
|
|
|
—
|
|
|
|
37
|
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Competitive cost structure combined with diversified and integrated asset base
|
–
|
large-scale, efficient and cost-effective operations;
|
–
|
access to renewable virgin fiber;
|
–
|
significant internal energy production from cogeneration and hydroelectric facilities;
|
–
|
raw materials for our paper, pulp and cogeneration facilities in Canada, our pellet plant at Thunder Bay (Ontario), as well as our value-added and engineered wood facilities in Quebec provided primarily by our sawmills;
|
–
|
strategically located mills, including economical access to international markets;
|
–
|
competitive selling, general and administrative expenses (or “
SG&A
”) to sales ratio;
|
–
|
ability to optimize staffing across our various operations; and
|
–
|
significant tax assets that help defer cash taxes and provide synergies in the execution of our growth and diversification strategy.
|
•
|
Strong balance sheet
– our low debt, which has favorable pricing and flexibility, combined with strong liquidity levels, provide us with the ability to execute our strategy, particularly the continued transformation to a more profitable and sustainable company for the long term.
|
•
|
Seasoned management team
– our senior management team has many years of experience in the pulp, tissue, wood products, and paper industries. In addition, we have an integrated leadership system focused on increasing our organizational capability by optimizing organizational structure, clarifying each employee’s role and accountabilities, improving the link between compensation and individual performance, and improving our succession planning process.
|
Three Months Ended June 30, 2019
|
Operating
Income
(Loss)
|
Net
Income
(Loss)
|
EPS
|
|
|
|||||||
(Unaudited, in millions, except per share amounts)
|
||||||||||||
GAAP, as reported
|
$
|
40
|
|
|
$
|
25
|
|
|
$
|
0.27
|
|
|
Adjustments for special items:
|
|
|
|
|
|
|
|
|
|
|||
Foreign exchange loss
|
|
—
|
|
|
|
6
|
|
|
|
0.06
|
|
|
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
(12
|
)
|
|
|
(0.13
|
)
|
|
Other income, net
|
|
—
|
|
|
|
(5
|
)
|
|
|
(0.05
|
)
|
|
Income tax effect of special items
|
|
—
|
|
|
|
(3
|
)
|
|
|
(0.03
|
)
|
|
Adjusted for special items
(1)
|
$
|
40
|
|
|
$
|
11
|
|
|
$
|
0.12
|
|
|
Three Months Ended June 30, 2018
|
Operating
Income
(Loss)
|
Net
Income
(Loss)
|
EPS
|
|
|
|||||||
(Unaudited, in millions, except per share amounts)
|
||||||||||||
GAAP, as reported
|
$
|
121
|
|
|
$
|
72
|
|
|
$
|
0.77
|
|
|
Adjustments for special items:
|
|
|
|
|
|
|
|
|
|
|||
Foreign exchange loss
|
|
—
|
|
|
|
1
|
|
|
|
0.01
|
|
|
Closure costs, impairment and other related charges
|
|
1
|
|
|
|
1
|
|
|
|
0.01
|
|
|
Net gain on disposition of assets
|
|
(4
|
)
|
|
|
(4
|
)
|
|
|
(0.04
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
(12
|
)
|
|
|
(0.13
|
)
|
|
Other expense, net
|
|
—
|
|
|
|
2
|
|
|
|
0.02
|
|
|
Income tax effect of special items
|
|
—
|
|
|
|
6
|
|
|
|
0.07
|
|
|
Adjusted for special items
(1)
|
$
|
118
|
|
|
$
|
66
|
|
|
$
|
0.71
|
|
|
(1)
|
Operating income (loss), net income (loss) and net income (loss) per share (or “
EPS
”), in each case as adjusted for special items, are not financial measures recognized under U.S. generally accepted accounting principles (or “
GAAP
”). We calculate operating income (loss), as adjusted for special items, as operating income (loss) from our Consolidated Statements of Operations, adjusted for items such as closure costs, impairment and other related charges, inventory write-downs related to closures, start-up costs, gains and losses on disposition of assets, and other charges or credits that are excluded from our segment’s performance from GAAP operating income (loss). We calculate net income (loss), as adjusted for special items, as net income (loss) from our Consolidated Statements of Operations, adjusted for the same special items applied to operating income (loss), in addition to foreign exchange gains and losses, non-
|
Six Months Ended June 30, 2019
|
Operating
Income
(Loss)
|
Net
Income
(Loss)
|
EPS
|
|
|
|||||||
(Unaudited, in millions, except per share amounts)
|
||||||||||||
GAAP, as reported
|
$
|
104
|
|
|
$
|
67
|
|
|
$
|
0.71
|
|
|
Adjustments for special items:
|
|
|
|
|
|
|
|
|
|
|||
Foreign exchange loss
|
|
—
|
|
|
|
10
|
|
|
|
0.11
|
|
|
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
(24
|
)
|
|
|
(0.26
|
)
|
|
Other income, net
|
|
—
|
|
|
|
(5
|
)
|
|
|
(0.05
|
)
|
|
Income tax effect of special items
|
|
—
|
|
|
|
(7
|
)
|
|
|
(0.07
|
)
|
|
Adjusted for special items
(1)
|
$
|
104
|
|
|
$
|
41
|
|
|
$
|
0.44
|
|
|
Six Months Ended June 30, 2018
|
Operating
Income
(Loss)
|
Net
Income
(Loss)
|
EPS
|
|
|
|||||||
(Unaudited, in millions, except per share amounts)
|
||||||||||||
GAAP, as reported
|
$
|
169
|
|
|
$
|
82
|
|
|
$
|
0.88
|
|
|
Adjustments for special items:
|
|
|
|
|
|
|
|
|
|
|||
Foreign exchange loss
|
|
—
|
|
|
|
2
|
|
|
|
0.02
|
|
|
Closure costs, impairment and other related charges
|
|
1
|
|
|
|
1
|
|
|
|
0.01
|
|
|
Reversal of inventory write-downs related to closures
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(0.01
|
)
|
|
Start-up costs
|
|
8
|
|
|
|
8
|
|
|
|
0.09
|
|
|
Net gain on disposition of assets
|
|
(4
|
)
|
|
|
(4
|
)
|
|
|
(0.05
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
(25
|
)
|
|
|
(0.27
|
)
|
|
Other expense, net
|
|
—
|
|
|
|
8
|
|
|
|
0.09
|
|
|
Income tax effect of special items
|
|
—
|
|
|
|
12
|
|
|
|
0.13
|
|
|
Adjusted for special items
(1)
|
$
|
173
|
|
|
$
|
83
|
|
|
$
|
0.89
|
|
|
(1)
|
Operating income (loss), net income (loss) and EPS, in each case as adjusted for special items, are non-GAAP financial measures. For more information on the calculation and reasons we include these measures, see note 1 under “
Overview –
Second Quarter
Overview
”
above.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions, except per share amounts)
|
2019
|
2018
|
|
2019
|
2018
|
||||||||||||
Sales
|
$
|
755
|
|
|
$
|
976
|
|
|
|
$
|
1,550
|
|
|
$
|
1,850
|
|
|
Operating income (loss) per segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Market pulp
|
|
27
|
|
|
|
41
|
|
|
|
|
69
|
|
|
|
74
|
|
|
Tissue
|
|
(4
|
)
|
|
|
(10
|
)
|
|
|
|
(12
|
)
|
|
|
(11
|
)
|
|
Wood products
|
|
(3
|
)
|
|
|
79
|
|
|
|
|
3
|
|
|
|
132
|
|
|
Newsprint
|
|
17
|
|
|
|
18
|
|
|
|
|
45
|
|
|
|
14
|
|
|
Specialty papers
|
|
15
|
|
|
|
4
|
|
|
|
|
30
|
|
|
|
(3
|
)
|
|
Segment total
|
|
52
|
|
|
|
132
|
|
|
|
|
135
|
|
|
|
206
|
|
|
Corporate and other
|
|
(12
|
)
|
|
|
(11
|
)
|
|
|
|
(31
|
)
|
|
|
(37
|
)
|
|
Operating income
|
|
40
|
|
|
|
121
|
|
|
|
|
104
|
|
|
|
169
|
|
|
Net income attributable to Resolute Forest Products Inc.
|
|
25
|
|
|
|
72
|
|
|
|
|
67
|
|
|
|
82
|
|
|
Net income per common share attributable to Resolute Forest Products Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
0.27
|
|
|
$
|
0.79
|
|
|
|
$
|
0.73
|
|
|
$
|
0.90
|
|
|
Diluted
|
|
0.27
|
|
|
|
0.77
|
|
|
|
|
0.71
|
|
|
|
0.88
|
|
|
Adjusted EBITDA
(1)
|
$
|
82
|
|
|
$
|
172
|
|
|
|
$
|
186
|
|
|
$
|
280
|
|
|
(Unaudited, in millions)
|
June 30,
2019 |
December 31,
2018 |
||||||
Cash and cash equivalents
|
$
|
98
|
|
|
$
|
304
|
|
|
Total assets
|
|
3,752
|
|
|
|
3,935
|
|
|
(1)
|
Earnings before interest expense, income taxes, and depreciation and amortization (or “
EBITDA
”) and adjusted EBITDA are not financial measures recognized under GAAP. EBITDA is calculated as net income (loss) including noncontrolling interests from the Consolidated Statements of Operations, adjusted for interest expense, income taxes, and depreciation and amortization. Adjusted EBITDA means EBITDA, excluding special items, such as foreign exchange gains and losses, closure costs, impairment and other related charges, inventory write-downs related to closures, start-up costs, gains and losses on disposition of assets, non-operating pension and OPEB costs and credits, and other charges or credits. We believe that using non-GAAP measures such as EBITDA and adjusted EBITDA is useful because they are consistent with the indicators management uses internally to measure the Company’s performance and it allows the reader to more easily compare our operations and financial performance from period to period. EBITDA and adjusted EBITDA are internal measures, and therefore may not be comparable to those of other companies. These non-GAAP measures should not be viewed as substitutes to financial measures determined under GAAP.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Net income including noncontrolling interests
|
$
|
25
|
|
|
$
|
72
|
|
|
|
$
|
67
|
|
|
$
|
82
|
|
|
Interest expense
|
|
7
|
|
|
|
11
|
|
|
|
|
16
|
|
|
|
24
|
|
|
Income tax provision
|
|
19
|
|
|
|
47
|
|
|
|
|
40
|
|
|
|
78
|
|
|
Depreciation and amortization
|
|
42
|
|
|
|
54
|
|
|
|
|
82
|
|
|
|
107
|
|
|
EBITDA
|
$
|
93
|
|
|
$
|
184
|
|
|
|
$
|
205
|
|
|
$
|
291
|
|
|
Foreign exchange loss
|
|
6
|
|
|
|
1
|
|
|
|
|
10
|
|
|
|
2
|
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
1
|
|
|
Reversal of inventory write-downs related to closures
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
Start-up costs
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
8
|
|
|
Net gain on disposition of assets
|
|
—
|
|
|
|
(4
|
)
|
|
|
|
—
|
|
|
|
(4
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
(12
|
)
|
|
|
(12
|
)
|
|
|
|
(24
|
)
|
|
|
(25
|
)
|
|
Other (income) expense, net
|
|
(5
|
)
|
|
|
2
|
|
|
|
|
(5
|
)
|
|
|
8
|
|
|
Adjusted EBITDA
|
$
|
82
|
|
|
$
|
172
|
|
|
|
$
|
186
|
|
|
$
|
280
|
|
|
•
|
higher wood fiber costs ($18 million), mostly due to wood shortages;
|
•
|
an increase in maintenance costs ($3 million), largely scheduled repairs;
|
•
|
lower contribution from our cogeneration assets that sell power externally ($2 million), due to scheduled maintenance; and
|
•
|
higher chemical costs ($2 million).
|
•
|
higher wood fiber costs ($38 million), mostly due to wood shortages;
|
•
|
an increase in maintenance costs ($15 million), largely scheduled repairs;
|
•
|
higher labor expense ($10 million);
|
•
|
a rise in recycled fiber prices ($8 million);
|
•
|
lower contribution from our cogeneration assets that sell power externally ($3 million) and our hydroelectric facilities ($2 million); and
|
•
|
higher chemical costs ($3 million);
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions, except where otherwise stated)
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Sales
|
$
|
189
|
|
|
$
|
264
|
|
|
|
$
|
420
|
|
|
$
|
521
|
|
|
Operating income
(1)
|
|
27
|
|
|
|
41
|
|
|
|
|
69
|
|
|
|
74
|
|
|
EBITDA
(2)
|
|
32
|
|
|
|
49
|
|
|
|
|
79
|
|
|
|
89
|
|
|
(In thousands of metric tons)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shipments
|
|
257
|
|
|
|
353
|
|
|
|
|
543
|
|
|
|
715
|
|
|
Downtime
|
|
15
|
|
|
|
22
|
|
|
|
|
23
|
|
|
|
28
|
|
|
|
June 30,
|
|||||||
(Unaudited, in thousands of metric tons)
|
2019
|
2018
|
||||||
Finished goods inventory
|
|
110
|
|
|
|
108
|
|
|
(1)
|
Net income including noncontrolling interests
is equal to
operating income
in this segment.
|
(2)
|
EBITDA, a non-GAAP financial measure, is reconciled below. For more information on the calculation and reasons we include this measure, see note 1 under “
Results of Operations – Consolidated Results – Selected Financial Information
” above.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Net income including noncontrolling interests
|
$
|
27
|
|
|
$
|
41
|
|
|
|
$
|
69
|
|
|
$
|
74
|
|
|
Depreciation and amortization
|
|
5
|
|
|
|
8
|
|
|
|
|
10
|
|
|
|
15
|
|
|
EBITDA
|
|
32
|
|
|
|
49
|
|
|
|
|
79
|
|
|
|
89
|
|
|
•
|
higher wood fiber costs ($16 million), mostly due to wood shortages;
|
•
|
a rise in recycled fiber prices ($8 million); and
|
•
|
higher maintenance costs ($6 million), mostly planned.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions, except where otherwise stated)
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Sales
|
$
|
43
|
|
|
$
|
35
|
|
|
|
$
|
82
|
|
|
$
|
57
|
|
|
Operating loss
(1)
|
|
(4
|
)
|
|
|
(10
|
)
|
|
|
|
(12
|
)
|
|
|
(11
|
)
|
|
EBITDA
(2)
|
|
—
|
|
|
|
(5
|
)
|
|
|
|
(3
|
)
|
|
|
(5
|
)
|
|
(In thousands of short tons)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shipments
(3)
|
|
25
|
|
|
|
23
|
|
|
|
|
49
|
|
|
|
38
|
|
|
Downtime
|
|
—
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
1
|
|
|
|
June 30,
|
|||||||
(Unaudited, in thousands of short tons)
|
2019
|
2018
|
||||||
Finished goods inventory
(3)
|
|
7
|
|
|
|
8
|
|
|
(1)
|
Net loss including noncontrolling interests
is equal to
operating loss
in this segment.
|
(2)
|
EBITDA, a non-GAAP financial measure, is reconciled below. For more information on the calculation and reasons we include this measure, see note 1 under “
Results of Operations – Consolidated Results – Selected Financial Information
” above.
|
(3)
|
Tissue converted products, which are measured in cases, are converted to short tons.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Net loss including noncontrolling interests
|
$
|
(4
|
)
|
|
$
|
(10
|
)
|
|
|
$
|
(12
|
)
|
|
$
|
(11
|
)
|
|
Depreciation and amortization
|
|
4
|
|
|
|
5
|
|
|
|
|
9
|
|
|
|
6
|
|
|
EBITDA
|
|
—
|
|
|
|
(5
|
)
|
|
|
|
(3
|
)
|
|
|
(5
|
)
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions, except where otherwise stated)
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Sales
|
$
|
168
|
|
|
$
|
254
|
|
|
|
$
|
329
|
|
|
$
|
463
|
|
|
Operating (loss) income
(1)
|
|
(3
|
)
|
|
|
79
|
|
|
|
|
3
|
|
|
|
132
|
|
|
EBITDA
(2)
|
|
6
|
|
|
|
86
|
|
|
|
|
20
|
|
|
|
147
|
|
|
(In millions board feet)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shipments
(3)
|
|
484
|
|
|
|
494
|
|
|
|
|
912
|
|
|
|
949
|
|
|
Downtime
|
|
53
|
|
|
|
26
|
|
|
|
|
94
|
|
|
|
49
|
|
|
|
June 30,
|
|||||||
(Unaudited, in millions board feet)
|
2019
|
2018
|
||||||
Finished goods inventory
(3)
|
|
122
|
|
|
|
128
|
|
|
(1)
|
Net (loss) income including noncontrolling interests
is equal to
operating (loss) income
in this segment.
|
(2)
|
EBITDA, a non-GAAP financial measure, is reconciled below. For more information on the calculation and reasons we include this measure, see note 1 under “
Results of Operations – Consolidated Results – Selected Financial Information
” above.
|
(3)
|
Includes wood pellets measured by mass, converted to board feet using a density-based conversion ratio.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Net (loss) income including noncontrolling interests
|
$
|
(3
|
)
|
|
$
|
79
|
|
|
|
$
|
3
|
|
|
$
|
132
|
|
|
Depreciation and amortization
|
|
9
|
|
|
|
7
|
|
|
|
|
17
|
|
|
|
15
|
|
|
EBITDA
|
|
6
|
|
|
|
86
|
|
|
|
|
20
|
|
|
|
147
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions, except where otherwise stated)
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Sales
|
$
|
209
|
|
|
$
|
230
|
|
|
|
$
|
421
|
|
|
$
|
428
|
|
|
Operating income
(1)
|
|
17
|
|
|
|
18
|
|
|
|
|
45
|
|
|
|
14
|
|
|
EBITDA
(2)
|
|
25
|
|
|
|
35
|
|
|
|
|
60
|
|
|
|
47
|
|
|
(In thousands of metric tons)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shipments
|
|
350
|
|
|
|
393
|
|
|
|
|
685
|
|
|
|
748
|
|
|
Downtime
|
|
52
|
|
|
|
6
|
|
|
|
|
53
|
|
|
|
14
|
|
|
|
June 30,
|
|||||||
(Unaudited, in thousands of metric tons)
|
2019
|
2018
|
||||||
Finished goods inventory
|
|
105
|
|
|
|
85
|
|
|
(1)
|
Net income including noncontrolling interests
is equal to
operating income
in this segment.
|
(2)
|
EBITDA, a non-GAAP financial measure, is reconciled below. For more information on the calculation and reasons we include this measure, see note 1 under “
Results of Operations – Consolidated Results – Selected Financial Information
” above.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Net income including noncontrolling interests
|
$
|
17
|
|
|
$
|
18
|
|
|
|
$
|
45
|
|
|
$
|
14
|
|
|
Depreciation and amortization
|
|
8
|
|
|
|
17
|
|
|
|
|
15
|
|
|
|
33
|
|
|
EBITDA
|
|
25
|
|
|
|
35
|
|
|
|
|
60
|
|
|
|
47
|
|
|
•
|
higher maintenance costs ($3 million), mostly due to more planned repairs;
|
•
|
an increase in wood fiber costs ($3 million), due to wood shortages;
|
•
|
lower contribution from our cogeneration assets that sell power externally ($2 million), due to scheduled maintenance; and
|
•
|
higher power and steam costs ($2 million).
|
•
|
higher maintenance costs ($5 million), mostly due to more planned repairs;
|
•
|
an increase in wood fiber costs ($5 million), due to wood shortages;
|
•
|
higher labor costs ($3 million); and
|
•
|
lower contribution from our cogeneration assets that sell power externally ($3 million).
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions, except where otherwise stated)
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Sales
|
$
|
146
|
|
|
$
|
193
|
|
|
|
$
|
298
|
|
|
$
|
381
|
|
|
Operating income (loss)
(1)
|
|
15
|
|
|
|
4
|
|
|
|
|
30
|
|
|
|
(3
|
)
|
|
EBITDA
(2)
|
|
26
|
|
|
|
16
|
|
|
|
|
51
|
|
|
|
21
|
|
|
(In thousands of short tons)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shipments
|
|
193
|
|
|
|
275
|
|
|
|
|
392
|
|
|
|
554
|
|
|
Downtime
|
|
14
|
|
|
|
12
|
|
|
|
|
26
|
|
|
|
15
|
|
|
|
June 30,
|
|||||||
(Unaudited, in thousands of short tons)
|
2019
|
2018
|
||||||
Finished goods inventory
|
|
55
|
|
|
|
70
|
|
|
(1)
|
Net income (loss) including noncontrolling interests
is equal to
operating income (loss)
in this segment.
|
(2)
|
EBITDA, a non-GAAP financial measure, is reconciled below. For more information on the calculation and reasons we include this measure, see note 1 under “
Results of Operations – Consolidated Results – Selected Financial Information
” above.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Net income (loss) including noncontrolling interests
|
$
|
15
|
|
|
$
|
4
|
|
|
|
$
|
30
|
|
|
$
|
(3
|
)
|
|
Depreciation and amortization
|
|
11
|
|
|
|
12
|
|
|
|
|
21
|
|
|
|
24
|
|
|
EBITDA
|
|
26
|
|
|
|
16
|
|
|
|
|
51
|
|
|
|
21
|
|
|
•
|
higher maintenance costs ($4 million), largely due to more planned repairs;
|
•
|
higher wood fiber costs ($4 million), mostly due to wood shortages;
|
•
|
an increase in labor costs ($2 million);
|
•
|
lower internal hydroelectric generation ($2 million); and
|
•
|
higher chemical costs ($2 million).
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Cost of sales, excluding depreciation, amortization and distribution costs
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
|
$
|
(7
|
)
|
|
$
|
(9
|
)
|
|
Depreciation and amortization
|
|
(5
|
)
|
|
|
(5
|
)
|
|
|
|
(10
|
)
|
|
|
(14
|
)
|
|
Selling, general and administrative expenses
|
|
(7
|
)
|
|
|
(7
|
)
|
|
|
|
(14
|
)
|
|
|
(17
|
)
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
(1
|
)
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
Net gain on disposition of assets
|
|
—
|
|
|
|
4
|
|
|
|
|
—
|
|
|
|
4
|
|
|
Operating loss
|
$
|
(12
|
)
|
|
$
|
(11
|
)
|
|
|
$
|
(31
|
)
|
|
$
|
(37
|
)
|
|
Interest expense
|
|
(7
|
)
|
|
|
(11
|
)
|
|
|
|
(16
|
)
|
|
|
(24
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
12
|
|
|
|
12
|
|
|
|
|
24
|
|
|
|
25
|
|
|
Other expense, net
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
|
(5
|
)
|
|
|
(10
|
)
|
|
Income tax provision
|
|
(19
|
)
|
|
|
(47
|
)
|
|
|
|
(40
|
)
|
|
|
(78
|
)
|
|
Net loss including noncontrolling interests
|
$
|
(27
|
)
|
|
$
|
(60
|
)
|
|
|
$
|
(68
|
)
|
|
$
|
(124
|
)
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
|
||||
Net loss including noncontrolling interests
|
$
|
(27
|
)
|
|
$
|
(60
|
)
|
|
|
$
|
(68
|
)
|
|
$
|
(124
|
)
|
|
Interest expense
|
|
7
|
|
|
|
11
|
|
|
|
|
16
|
|
|
|
24
|
|
|
Income tax provision
|
|
19
|
|
|
|
47
|
|
|
|
|
40
|
|
|
|
78
|
|
|
Depreciation and amortization
|
|
5
|
|
|
|
5
|
|
|
|
|
10
|
|
|
|
14
|
|
|
EBITDA
|
$
|
4
|
|
|
$
|
3
|
|
|
|
$
|
(2
|
)
|
|
$
|
(8
|
)
|
|
Foreign exchange loss
|
|
6
|
|
|
|
1
|
|
|
|
|
10
|
|
|
|
2
|
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
1
|
|
|
Reversal of inventory write-downs related to closures
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
Start-up costs
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
8
|
|
|
Net gain on disposition of assets
|
|
—
|
|
|
|
(4
|
)
|
|
|
|
—
|
|
|
|
(4
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
(12
|
)
|
|
|
(12
|
)
|
|
|
|
(24
|
)
|
|
|
(25
|
)
|
|
Other (income) expense, net
|
|
(5
|
)
|
|
|
2
|
|
|
|
|
(5
|
)
|
|
|
8
|
|
|
Adjusted EBITDA
|
$
|
(7
|
)
|
|
$
|
(9
|
)
|
|
|
$
|
(21
|
)
|
|
$
|
(19
|
)
|
|
|
Six Months Ended
June 30, |
|||||||
(Unaudited, in millions)
|
2019
|
|
|
2018
|
|
|
||
Net cash provided by operating activities
|
$
|
95
|
|
|
$
|
220
|
|
|
Net cash used in investing activities
|
|
(69
|
)
|
|
|
(109
|
)
|
|
Cash used in financing activities
|
|
(232
|
)
|
|
|
(115
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents, and restricted cash
|
|
1
|
|
|
|
(2
|
)
|
|
Net decrease in cash and cash equivalents, and restricted cash
|
$
|
(205
|
)
|
|
$
|
(6
|
)
|
|
•
|
$45 million in capital expenditures; and
|
•
|
$33 million of countervailing and anti-dumping duty cash deposits on softwood lumber;
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
PART II.
|
OTHER INFORMATION
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
Total Number of Shares Purchased
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
(1)
|
||||||||||||
April 1 to April 30
|
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
$
|
23,983,730
|
|
|
May 1 to May 31
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
23,983,730
|
|
|
June 1 to June 30
|
|
720,000
|
|
|
|
6.23
|
|
|
|
720,000
|
|
|
|
19,498,130
|
|
|
Total
|
|
720,000
|
|
|
$
|
6.23
|
|
|
|
720,000
|
|
|
$
|
19,498,130
|
|
|
(1)
|
$150 million share repurchase program launched in 2012.
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
Exhibit No.
|
|
Description
|
|
|
|
|
Second Amendment to the Credit Agreement, dated as of May 14, 2019, among Resolute Forest Products Inc., Resolute FP Canada Inc., certain other subsidiaries of Resolute Forest Products Inc. as borrowers or guarantors, various lenders, Bank of America, N.A., as U.S. Administrative Agent and Collateral Agent, and Bank of America, N.A. (through its Canada branch), as Canadian Administrative Agent (incorporated by reference from Exhibit 10.1 to Resolute Forest Products Inc.’s Current Report on Form 8-K filed May 20, 2019, SEC file No. 001-33776).
|
|
|
|
|
|
2019 Resolute Forest Products Inc. Short-Term Incentive Plan – U.S.
|
|
|
|
|
|
2019 Resolute Forest Products Inc. Short-Term Incentive Plan – Canada / International.
|
|
|
|
|
|
Resolute Forest Products Inc. 2019 Equity Incentive Plan.
|
|
|
|
|
|
Certification of President and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of Senior Vice President and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of President and Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of Senior Vice President and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document.
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
†
|
This is a management contract or compensatory plan or arrangement.
|
*
|
Interactive data files furnished with this Form 10-Q, which represent the following materials from this Form 10-Q formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Changes in Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Unaudited Interim Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document.
|
RESOLUTE FOREST PRODUCTS INC.
|
||
|
|
|
By
|
|
/s/ Remi G. Lalonde
|
|
|
Remi G. Lalonde
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
By
|
|
/s/ Hugues Dorban
|
|
|
Hugues Dorban
|
|
|
Vice President and Chief Accounting Officer
|
1 Year Resolute Forest Products Chart |
1 Month Resolute Forest Products Chart |
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