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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
|
|
PART I. FINANCIAL INFORMATION
|
|
|
|
|
|
Item 1. Financial Statements:
|
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|
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||
|
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||
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||
|
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||
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||
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||
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PART II. OTHER INFORMATION
|
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PART I.
|
FINANCIAL INFORMATION
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Sales
|
$
|
612
|
|
|
$
|
755
|
|
|
|
$
|
1,301
|
|
|
$
|
1,550
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of sales, excluding depreciation, amortization and distribution costs
|
|
464
|
|
|
|
536
|
|
|
|
|
988
|
|
|
|
1,090
|
|
|
Depreciation and amortization
|
|
40
|
|
|
|
42
|
|
|
|
|
82
|
|
|
|
82
|
|
|
Distribution costs
|
|
79
|
|
|
|
101
|
|
|
|
|
178
|
|
|
|
201
|
|
|
Selling, general and administrative expenses
|
|
32
|
|
|
|
36
|
|
|
|
|
66
|
|
|
|
73
|
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
—
|
|
|
|
|
(2
|
)
|
|
|
—
|
|
|
Net gain on disposition of assets
|
|
(9
|
)
|
|
|
—
|
|
|
|
|
(9
|
)
|
|
|
—
|
|
|
Operating income (loss)
|
|
6
|
|
|
|
40
|
|
|
|
|
(2
|
)
|
|
|
104
|
|
|
Interest expense
|
|
(9
|
)
|
|
|
(7
|
)
|
|
|
|
(18
|
)
|
|
|
(16
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
4
|
|
|
|
12
|
|
|
|
|
19
|
|
|
|
24
|
|
|
Other income (expense), net
|
|
10
|
|
|
|
(1
|
)
|
|
|
|
38
|
|
|
|
(5
|
)
|
|
Income before income taxes
|
|
11
|
|
|
|
44
|
|
|
|
|
37
|
|
|
|
107
|
|
|
Income tax provision
|
|
(5
|
)
|
|
|
(19
|
)
|
|
|
|
(32
|
)
|
|
|
(40
|
)
|
|
Net income including noncontrolling interest
|
|
6
|
|
|
|
25
|
|
|
|
|
5
|
|
|
|
67
|
|
|
Net income attributable to noncontrolling interest
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Net income attributable to Resolute Forest Products Inc.
|
$
|
6
|
|
|
$
|
25
|
|
|
|
$
|
5
|
|
|
$
|
67
|
|
|
Net income per share attributable to Resolute Forest Products Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
0.07
|
|
|
$
|
0.27
|
|
|
|
$
|
0.06
|
|
|
$
|
0.73
|
|
|
Diluted
|
$
|
0.07
|
|
|
$
|
0.27
|
|
|
|
$
|
0.06
|
|
|
$
|
0.71
|
|
|
Weighted-average number of Resolute Forest Products Inc. common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
88.1
|
|
|
|
92.4
|
|
|
|
|
88.1
|
|
|
|
92.4
|
|
|
Diluted
|
|
88.2
|
|
|
|
93.6
|
|
|
|
|
88.2
|
|
|
|
93.8
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Net income including noncontrolling interest
|
$
|
6
|
|
|
$
|
25
|
|
|
|
$
|
5
|
|
|
$
|
67
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unamortized prior service credits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in unamortized prior service credits
|
|
(1
|
)
|
|
|
(4
|
)
|
|
|
|
(16
|
)
|
|
|
(7
|
)
|
|
Income tax provision
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Change in unamortized prior service credits, net of tax
|
|
(1
|
)
|
|
|
(4
|
)
|
|
|
|
(16
|
)
|
|
|
(7
|
)
|
|
Unamortized actuarial losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in unamortized actuarial losses
|
|
15
|
|
|
|
3
|
|
|
|
|
32
|
|
|
|
11
|
|
|
Income tax provision
|
|
(4
|
)
|
|
|
—
|
|
|
|
|
(7
|
)
|
|
|
(2
|
)
|
|
Change in unamortized actuarial losses, net of tax
|
|
11
|
|
|
|
3
|
|
|
|
|
25
|
|
|
|
9
|
|
|
Foreign currency translation
|
|
—
|
|
|
|
—
|
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
Other comprehensive income (loss), net of tax
|
|
10
|
|
|
|
(1
|
)
|
|
|
|
8
|
|
|
|
2
|
|
|
Comprehensive income including noncontrolling interest
|
|
16
|
|
|
|
24
|
|
|
|
|
13
|
|
|
|
69
|
|
|
Comprehensive income attributable to noncontrolling interest
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Comprehensive income attributable to Resolute Forest Products Inc.
|
$
|
16
|
|
|
$
|
24
|
|
|
|
$
|
13
|
|
|
$
|
69
|
|
|
|
June 30,
2020 |
December 31,
2019 |
||||||
Assets
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
27
|
|
|
$
|
3
|
|
|
Accounts receivable, net:
|
|
|
|
|
|
|
||
Trade
|
|
239
|
|
|
|
273
|
|
|
Other
|
|
65
|
|
|
|
76
|
|
|
Inventories, net
|
|
506
|
|
|
|
522
|
|
|
Other current assets
|
|
45
|
|
|
|
33
|
|
|
Total current assets
|
|
882
|
|
|
|
907
|
|
|
Fixed assets, less accumulated depreciation of $1,503 and $1,658 as of June 30, 2020 and December 31, 2019, respectively
|
|
1,524
|
|
|
|
1,459
|
|
|
Amortizable intangible assets, less accumulated amortization of $30 and $27 as of June 30, 2020 and December 31, 2019, respectively
|
|
66
|
|
|
|
48
|
|
|
Goodwill
|
|
31
|
|
|
|
—
|
|
|
Deferred income tax assets
|
|
837
|
|
|
|
915
|
|
|
Operating lease right-of-use assets
|
|
59
|
|
|
|
61
|
|
|
Other assets
|
|
268
|
|
|
|
236
|
|
|
Total assets
|
$
|
3,667
|
|
|
$
|
3,626
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
$
|
300
|
|
|
$
|
342
|
|
|
Current portion of long-term debt
|
|
2
|
|
|
|
1
|
|
|
Current portion of operating lease liabilities
|
|
8
|
|
|
|
8
|
|
|
Total current liabilities
|
|
310
|
|
|
|
351
|
|
|
Long-term debt, net of current portion
|
|
628
|
|
|
|
448
|
|
|
Pension and other postretirement benefit obligations
|
|
1,349
|
|
|
|
1,460
|
|
|
Operating lease liabilities, net of current portion
|
|
53
|
|
|
|
57
|
|
|
Other liabilities
|
|
77
|
|
|
|
75
|
|
|
Total liabilities
|
|
2,417
|
|
|
|
2,391
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
||
Equity:
|
|
|
|
|
|
|
||
Resolute Forest Products Inc. shareholders’ equity:
|
|
|
|
|
|
|
||
Common stock, $0.001 par value. 120.2 shares issued and 87.1 shares outstanding as of June 30, 2020; 119.5 shares issued and 86.7 shares outstanding as of December 31, 2019
|
|
—
|
|
|
|
—
|
|
|
Additional paid-in capital
|
|
3,805
|
|
|
|
3,802
|
|
|
Deficit
|
|
(1,240
|
)
|
|
|
(1,245
|
)
|
|
Accumulated other comprehensive loss
|
|
(1,171
|
)
|
|
|
(1,179
|
)
|
|
Treasury stock at cost, 33.1 shares and 32.8 shares as of June 30, 2020 and December 31, 2019, respectively
|
|
(145
|
)
|
|
|
(144
|
)
|
|
Total Resolute Forest Products Inc. shareholders’ equity
|
|
1,249
|
|
|
|
1,234
|
|
|
Noncontrolling interest
|
|
1
|
|
|
|
1
|
|
|
Total equity
|
|
1,250
|
|
|
|
1,235
|
|
|
Total liabilities and equity
|
$
|
3,667
|
|
|
$
|
3,626
|
|
|
|
Three Months Ended June 30, 2020
|
|||||||||||||||||||||||||||
|
Resolute Forest Products Inc. Shareholders’ Equity
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Common
Stock
|
Additional
Paid-In
Capital
|
Deficit
|
Accumulated Other Comprehensive Loss
|
Treasury
Stock
|
Non-controlling
Interest
|
Total Equity
|
|||||||||||||||||||||
Balance as of March 31, 2020
|
$
|
—
|
|
|
$
|
3,804
|
|
|
$
|
(1,246
|
)
|
|
$
|
(1,181
|
)
|
|
$
|
(144
|
)
|
|
$
|
1
|
|
|
$
|
1,234
|
|
|
Share-based compensation, net of withholding taxes
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
Net income
|
|
—
|
|
|
|
—
|
|
|
|
6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6
|
|
|
Purchases of treasury stock (0.3 shares) (Note 12)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
(1
|
)
|
|
Other comprehensive income, net of tax
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10
|
|
|
Balance as of June 30, 2020
|
$
|
—
|
|
|
$
|
3,805
|
|
|
$
|
(1,240
|
)
|
|
$
|
(1,171
|
)
|
|
$
|
(145
|
)
|
|
$
|
1
|
|
|
$
|
1,250
|
|
|
|
Six Months Ended June 30, 2020
|
|||||||||||||||||||||||||||
|
Resolute Forest Products Inc. Shareholders’ Equity
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Common
Stock
|
Additional
Paid-In
Capital
|
Deficit
|
Accumulated Other Comprehensive Loss
|
Treasury
Stock
|
Non-controlling
Interest
|
Total Equity
|
|||||||||||||||||||||
Balance as of December 31, 2019
|
$
|
—
|
|
|
$
|
3,802
|
|
|
$
|
(1,245
|
)
|
|
$
|
(1,179
|
)
|
|
$
|
(144
|
)
|
|
$
|
1
|
|
|
$
|
1,235
|
|
|
Share-based compensation, net of withholding taxes
|
|
—
|
|
|
|
3
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3
|
|
|
Net income
|
|
—
|
|
|
|
—
|
|
|
|
5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5
|
|
|
Purchases of treasury stock (0.3 shares) (Note 12)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
(1
|
)
|
|
Stock unit awards vested (0.7 shares), net of shares forfeited for employee withholding taxes
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Other comprehensive income, net of tax
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8
|
|
|
Balance as of June 30, 2020
|
$
|
—
|
|
|
$
|
3,805
|
|
|
$
|
(1,240
|
)
|
|
$
|
(1,171
|
)
|
|
$
|
(145
|
)
|
|
$
|
1
|
|
|
$
|
1,250
|
|
|
|
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 Interest |
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 12)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(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
Interest
|
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 12)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(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
|
|
|
|
Six Months Ended
June 30, |
|||||||
|
2020
|
|
|
2019
|
|
|
||
Cash flows from operating activities:
|
|
|
|
|
|
|
||
Net income including noncontrolling interest
|
$
|
5
|
|
|
$
|
67
|
|
|
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities:
|
|
|
|
|
|
|
||
Share-based compensation
|
|
4
|
|
|
|
3
|
|
|
Depreciation and amortization
|
|
82
|
|
|
|
82
|
|
|
Deferred income taxes
|
|
32
|
|
|
|
40
|
|
|
Net pension contributions and other postretirement benefit payments
|
|
(48
|
)
|
|
|
(57
|
)
|
|
Net gain on disposition of assets
|
|
(9
|
)
|
|
|
—
|
|
|
Loss (gain) on translation of foreign currency denominated deferred income taxes
|
|
39
|
|
|
|
(35
|
)
|
|
(Gain) loss on translation of foreign currency denominated pension and other postretirement benefit obligations
|
|
(47
|
)
|
|
|
37
|
|
|
Net planned major maintenance (payments) amortization
|
|
(2
|
)
|
|
|
7
|
|
|
Changes in working capital:
|
|
|
|
|
|
|
||
Accounts receivable
|
|
50
|
|
|
|
38
|
|
|
Inventories
|
|
25
|
|
|
|
(21
|
)
|
|
Other current assets
|
|
(7
|
)
|
|
|
(3
|
)
|
|
Accounts payable and accrued liabilities
|
|
(49
|
)
|
|
|
(64
|
)
|
|
Other, net
|
|
1
|
|
|
|
1
|
|
|
Net cash provided by operating activities
|
|
76
|
|
|
|
95
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Cash invested in fixed assets
|
|
(37
|
)
|
|
|
(45
|
)
|
|
Acquisition of business, net of cash acquired
|
|
(172
|
)
|
|
|
—
|
|
|
Disposition of assets
|
|
9
|
|
|
|
2
|
|
|
Decrease in countervailing duty cash deposits on supercalendered paper
|
|
—
|
|
|
|
1
|
|
|
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber
|
|
(32
|
)
|
|
|
(33
|
)
|
|
Decrease in countervailing duty cash deposits on uncoated groundwood paper
|
|
—
|
|
|
|
6
|
|
|
Other investing activities, net
|
|
5
|
|
|
|
—
|
|
|
Net cash used in investing activities
|
|
(227
|
)
|
|
|
(69
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
||
Net repayments under revolving credit facilities
|
|
(2
|
)
|
|
|
—
|
|
|
Proceeds from long-term debt
|
|
180
|
|
|
|
—
|
|
|
Repayments of debt
|
|
(1
|
)
|
|
|
(225
|
)
|
|
Purchases of treasury stock
|
|
(1
|
)
|
|
|
(5
|
)
|
|
Payments of financing and credit facility fees
|
|
—
|
|
|
|
(2
|
)
|
|
Net cash provided by (used in) financing activities
|
|
176
|
|
|
|
(232
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents, and restricted cash
|
|
(1
|
)
|
|
|
1
|
|
|
Net increase (decrease) in cash and cash equivalents, and restricted cash
|
$
|
24
|
|
|
$
|
(205
|
)
|
|
Cash and cash equivalents, and restricted cash:
|
|
|
|
|
|
|
||
Beginning of period
|
$
|
42
|
|
|
$
|
345
|
|
|
End of period
|
$
|
66
|
|
|
$
|
140
|
|
|
Cash and cash equivalents, and restricted cash at end of period:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
27
|
|
|
$
|
98
|
|
|
Restricted cash (included in “Other assets”)
|
$
|
39
|
|
|
$
|
42
|
|
|
(1)
|
Includes cash and cash equivalents of $1 million.
|
(2)
|
We recognized a $36 million reduction from the preliminary valuation of fixed assets reported as of March 31, 2020.
|
(3)
|
We identified and separately recognized customer relationships of $21 million since our preliminary purchase price allocation reported as of March 31, 2020. These intangible assets are being amortized over a weighted-average useful life of 10 years. The fair value of the customer relationships was determined using the income approach through an excess earnings analysis discounted at a rate of 12.6%.
|
(4)
|
The revision of our preliminary allocation of the purchase price reported as of March 31, 2020, resulted in the recognition of $31 million of goodwill. The goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized and is mostly attributable to the U.S. Sawmill Business’s assembled workforce and synergies expected from combining our operations with the U.S. Sawmill Business. Goodwill will be assigned to the wood products reportable segment for the purposes of impairment testing in the future. The total amount of goodwill is deductible for tax purposes.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Sales
|
$
|
612
|
|
|
$
|
781
|
|
|
|
$
|
1,309
|
|
|
$
|
1,597
|
|
|
Net income attributable to Resolute Forest Products Inc.
|
$
|
6
|
|
|
$
|
25
|
|
|
|
$
|
5
|
|
|
$
|
67
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Foreign exchange (loss) gain
|
$
|
(9
|
)
|
|
$
|
(6
|
)
|
|
|
$
|
14
|
|
|
$
|
(10
|
)
|
|
Insurance recovery (1)
|
|
15
|
|
|
|
—
|
|
|
|
|
15
|
|
|
|
—
|
|
|
Miscellaneous income
|
|
4
|
|
|
|
5
|
|
|
|
|
9
|
|
|
|
5
|
|
|
|
$
|
10
|
|
|
$
|
(1
|
)
|
|
|
$
|
38
|
|
|
$
|
(5
|
)
|
|
(1)
|
We recorded $15 million as other income for the three and six months ended June 30, 2020, from the settlement of an insurance claim in connection with our acquisition of Atlas Paper Holdings, Inc. (or, “Atlas”) in 2015.
|
(Unaudited, in millions)
|
Unamortized Prior Service Credits
|
Unamortized Actuarial Losses
|
Foreign
Currency
Translation
|
Total
|
||||||||||||
Balance as of March 31, 2020
|
$
|
1
|
|
|
$
|
(1,175
|
)
|
|
$
|
(7
|
)
|
|
$
|
(1,181
|
)
|
|
Amounts reclassified from accumulated other comprehensive loss
|
|
(1
|
)
|
|
|
11
|
|
|
|
—
|
|
|
|
10
|
|
|
Balance as of June 30, 2020
|
$
|
—
|
|
|
$
|
(1,164
|
)
|
|
$
|
(7
|
)
|
|
$
|
(1,171
|
)
|
|
(Unaudited, in millions)
|
Unamortized Prior Service Credits
|
Unamortized Actuarial Losses
|
Foreign
Currency
Translation
|
Total
|
||||||||||||
Balance as of December 31, 2019
|
$
|
16
|
|
|
$
|
(1,189
|
)
|
|
$
|
(6
|
)
|
|
$
|
(1,179
|
)
|
|
Other comprehensive loss before reclassifications
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Amounts reclassified from accumulated other comprehensive loss
|
|
(16
|
)
|
|
|
25
|
|
|
|
—
|
|
|
|
9
|
|
|
Net current period other comprehensive (loss) income
|
|
(16
|
)
|
|
|
25
|
|
|
|
(1
|
)
|
|
|
8
|
|
|
Balance as of June 30, 2020
|
$
|
—
|
|
|
$
|
(1,164
|
)
|
|
$
|
(7
|
)
|
|
$
|
(1,171
|
)
|
|
(Unaudited, in millions)
|
Unamortized Prior Service Credits
|
Unamortized Actuarial Losses
|
Foreign
Currency
Translation
|
Total
|
||||||||||||
Balance as of March 31, 2019
|
$
|
25
|
|
|
$
|
(965
|
)
|
|
$
|
(7
|
)
|
|
$
|
(947
|
)
|
|
Other comprehensive loss before reclassifications
|
|
—
|
|
|
|
(3
|
)
|
|
|
—
|
|
|
|
(3
|
)
|
|
Amounts reclassified from accumulated other comprehensive loss
|
|
(4
|
)
|
|
|
6
|
|
|
|
—
|
|
|
|
2
|
|
|
Net current period other comprehensive (loss) income
|
|
(4
|
)
|
|
|
3
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
Balance as of June 30, 2019
|
$
|
21
|
|
|
$
|
(962
|
)
|
|
$
|
(7
|
)
|
|
$
|
(948
|
)
|
|
(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
|
|
(7
|
)
|
|
|
12
|
|
|
|
—
|
|
|
|
5
|
|
|
Net current period other comprehensive (loss) income
|
|
(7
|
)
|
|
|
9
|
|
|
|
—
|
|
|
|
2
|
|
|
Balance as of June 30, 2019
|
$
|
21
|
|
|
$
|
(962
|
)
|
|
$
|
(7
|
)
|
|
$
|
(948
|
)
|
|
|
Three Months Ended June 30,
|
Six Months Ended
June 30, |
|
||||||||||||||
(Unaudited, in millions)
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
Affected Line in the Consolidated Statements of Operations
|
||||
Unamortized Prior Service Credits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of prior service credits
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
|
$
|
(2
|
)
|
|
$
|
(6
|
)
|
|
Non-operating pension and other postretirement benefit credits (1)
|
Other items
|
|
—
|
|
|
|
(1
|
)
|
|
|
(14
|
)
|
|
|
(1
|
)
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Income tax provision
|
Net of tax
|
|
(1
|
)
|
|
|
(4
|
)
|
|
|
(16
|
)
|
|
|
(7
|
)
|
|
|
Unamortized Actuarial Losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of actuarial losses
|
|
15
|
|
|
|
7
|
|
|
|
29
|
|
|
|
15
|
|
|
Non-operating pension and other postretirement benefit credits (1)
|
Other items
|
|
—
|
|
|
|
—
|
|
|
|
3
|
|
|
|
—
|
|
|
|
|
|
(4
|
)
|
|
|
(1
|
)
|
|
|
(7
|
)
|
|
|
(3
|
)
|
|
Income tax provision
|
Net of tax
|
|
11
|
|
|
|
6
|
|
|
|
25
|
|
|
|
12
|
|
|
|
Total Reclassifications
|
$
|
10
|
|
|
$
|
2
|
|
|
$
|
9
|
|
|
$
|
5
|
|
|
|
(1)
|
These items are included in the computation of net periodic benefit cost (credit) related to our pension and other postretirement benefit (or, “OPEB”) plans summarized in Note 9, “Employee Benefit Plans.”
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions, except per share amounts)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to Resolute Forest Products Inc.
|
$
|
6
|
|
|
$
|
25
|
|
|
|
$
|
5
|
|
|
$
|
67
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average number of Resolute Forest Products Inc. common shares outstanding
|
|
88.1
|
|
|
|
92.4
|
|
|
|
|
88.1
|
|
|
|
92.4
|
|
|
Dilutive impact of nonvested stock unit awards
|
|
0.1
|
|
|
|
1.2
|
|
|
|
|
0.1
|
|
|
|
1.4
|
|
|
Diluted weighted-average number of Resolute Forest Products Inc. common shares outstanding
|
|
88.2
|
|
|
|
93.6
|
|
|
|
|
88.2
|
|
|
|
93.8
|
|
|
Net income per share attributable to Resolute Forest Products Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
0.07
|
|
|
$
|
0.27
|
|
|
|
$
|
0.06
|
|
|
$
|
0.73
|
|
|
Diluted
|
$
|
0.07
|
|
|
$
|
0.27
|
|
|
|
$
|
0.06
|
|
|
$
|
0.71
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||
(Unaudited, in millions)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
Stock options
|
0.9
|
|
|
1.0
|
|
|
|
0.9
|
|
|
1.0
|
|
|
Stock unit awards
|
0.9
|
|
|
—
|
|
|
|
0.9
|
|
|
—
|
|
|
(Unaudited, in millions)
|
June 30,
2020 |
December 31,
2019 |
||||||
Raw materials
|
$
|
107
|
|
|
$
|
128
|
|
|
Work in process
|
|
52
|
|
|
|
46
|
|
|
Finished goods
|
|
155
|
|
|
|
164
|
|
|
Mill stores and other supplies
|
|
192
|
|
|
|
184
|
|
|
|
$
|
506
|
|
|
$
|
522
|
|
|
(Unaudited, in millions)
|
June 30,
2020 |
December 31,
2019 |
||||||
Trade accounts payable
|
$
|
226
|
|
|
$
|
255
|
|
|
Accrued compensation
|
|
42
|
|
|
|
52
|
|
|
Accrued interest
|
|
4
|
|
|
|
3
|
|
|
Pension and other postretirement benefit obligations
|
|
14
|
|
|
|
15
|
|
|
Income and other taxes payable
|
|
4
|
|
|
|
4
|
|
|
Other
|
|
10
|
|
|
|
13
|
|
|
|
$
|
300
|
|
|
$
|
342
|
|
|
(Unaudited, in millions)
|
June 30,
2020 |
December 31,
2019 |
||||||
5.875% senior unsecured notes due 2023:
|
|
|
|
|
|
|
||
Principal amount
|
$
|
375
|
|
|
$
|
375
|
|
|
Deferred financing costs
|
|
(2
|
)
|
|
|
(3
|
)
|
|
Unamortized discount
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Total 5.875% senior unsecured notes due 2023
|
|
372
|
|
|
|
371
|
|
|
Term loans due 2030
|
|
180
|
|
|
|
—
|
|
|
Borrowings under revolving credit facilities
|
|
69
|
|
|
|
71
|
|
|
Finance lease obligations
|
|
9
|
|
|
|
7
|
|
|
Total debt
|
|
630
|
|
|
|
449
|
|
|
Less: Current portion of finance lease obligations
|
|
(2
|
)
|
|
|
(1
|
)
|
|
Long-term debt, net of current portion
|
$
|
628
|
|
|
$
|
448
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Interest cost
|
$
|
36
|
|
|
$
|
45
|
|
|
|
$
|
74
|
|
|
$
|
90
|
|
|
Expected return on plan assets
|
|
(55
|
)
|
|
|
(61
|
)
|
|
|
|
(111
|
)
|
|
|
(124
|
)
|
|
Amortization of actuarial losses
|
|
17
|
|
|
|
9
|
|
|
|
|
32
|
|
|
|
18
|
|
|
Amortization of prior service credits
|
|
—
|
|
|
|
(1
|
)
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
Non-operating pension credits
|
|
(2
|
)
|
|
|
(8
|
)
|
|
|
|
(5
|
)
|
|
|
(17
|
)
|
|
Service cost
|
|
3
|
|
|
|
3
|
|
|
|
|
7
|
|
|
|
7
|
|
|
Net periodic benefit costs (credits) before special events
|
|
1
|
|
|
|
(5
|
)
|
|
|
|
2
|
|
|
|
(10
|
)
|
|
Other (gains) losses
|
|
—
|
|
|
|
(1
|
)
|
|
|
|
3
|
|
|
|
(1
|
)
|
|
|
$
|
1
|
|
|
$
|
(6
|
)
|
|
|
$
|
5
|
|
|
$
|
(11
|
)
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Interest cost
|
$
|
1
|
|
|
$
|
1
|
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
Amortization of actuarial gains
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
Amortization of prior service credits
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
|
(2
|
)
|
|
|
(5
|
)
|
|
Non-operating other postretirement benefit credits
|
|
(2
|
)
|
|
|
(3
|
)
|
|
|
|
(3
|
)
|
|
|
(6
|
)
|
|
Service cost
|
|
1
|
|
|
|
—
|
|
|
|
|
1
|
|
|
|
—
|
|
|
Net periodic benefit credits before special events
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
|
(2
|
)
|
|
|
(6
|
)
|
|
Curtailment gain
|
|
—
|
|
|
|
—
|
|
|
|
|
(14
|
)
|
|
|
—
|
|
|
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
|
|
$
|
(16
|
)
|
|
$
|
(6
|
)
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Income before income taxes
|
$
|
11
|
|
|
$
|
44
|
|
|
|
$
|
37
|
|
|
$
|
107
|
|
|
Income tax provision:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expected income tax provision
|
|
(3
|
)
|
|
|
(9
|
)
|
|
|
|
(8
|
)
|
|
|
(22
|
)
|
|
Changes resulting from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Valuation allowance (1)
|
|
(7
|
)
|
|
|
(4
|
)
|
|
|
|
(16
|
)
|
|
|
(11
|
)
|
|
Foreign exchange
|
|
2
|
|
|
|
1
|
|
|
|
|
(10
|
)
|
|
|
4
|
|
|
U.S. tax on non-U.S. earnings (2)
|
|
—
|
|
|
|
(5
|
)
|
|
|
|
—
|
|
|
|
(5
|
)
|
|
State income taxes, net of federal income tax benefit
|
|
—
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
2
|
|
|
Foreign tax rate differences
|
|
(2
|
)
|
|
|
(4
|
)
|
|
|
|
(5
|
)
|
|
|
(9
|
)
|
|
Other, net (3)
|
|
5
|
|
|
|
1
|
|
|
|
|
5
|
|
|
|
1
|
|
|
|
$
|
(5
|
)
|
|
$
|
(19
|
)
|
|
|
$
|
(32
|
)
|
|
$
|
(40
|
)
|
|
(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.
|
(3)
|
Includes $4 million for the three and six months ended June 30, 2020, related to the settlement of an insurance claim in connection with our acquisition of Atlas.
|
(Unaudited,
in millions)
|
Market Pulp (1)
|
Tissue
|
Wood Products (2)
|
Paper
|
Segment
Total
|
Corporate
and Other
|
Total
|
|||||||||||||||||||||
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Second quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2020
|
$
|
161
|
|
|
$
|
44
|
|
|
$
|
199
|
|
|
$
|
208
|
|
|
$
|
612
|
|
|
$
|
—
|
|
|
$
|
612
|
|
|
2019
|
$
|
189
|
|
|
$
|
43
|
|
|
$
|
168
|
|
|
$
|
355
|
|
|
$
|
755
|
|
|
$
|
—
|
|
|
$
|
755
|
|
|
First six months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2020
|
$
|
338
|
|
|
$
|
93
|
|
|
$
|
373
|
|
|
$
|
497
|
|
|
$
|
1,301
|
|
|
$
|
—
|
|
|
$
|
1,301
|
|
|
2019
|
$
|
420
|
|
|
$
|
82
|
|
|
$
|
329
|
|
|
$
|
719
|
|
|
$
|
1,550
|
|
|
$
|
—
|
|
|
$
|
1,550
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Second quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2020
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
10
|
|
|
$
|
16
|
|
|
$
|
37
|
|
|
$
|
3
|
|
|
$
|
40
|
|
|
2019
|
$
|
5
|
|
|
$
|
4
|
|
|
$
|
9
|
|
|
$
|
19
|
|
|
$
|
37
|
|
|
$
|
5
|
|
|
$
|
42
|
|
|
First six months
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
2020
|
$
|
12
|
|
|
$
|
9
|
|
|
$
|
21
|
|
|
$
|
33
|
|
|
$
|
75
|
|
|
$
|
7
|
|
|
$
|
82
|
|
|
2019
|
$
|
10
|
|
|
$
|
9
|
|
|
$
|
17
|
|
|
$
|
36
|
|
|
$
|
72
|
|
|
$
|
10
|
|
|
$
|
82
|
|
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Second quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2020
|
$
|
10
|
|
|
$
|
(2
|
)
|
|
$
|
15
|
|
|
$
|
(12
|
)
|
|
$
|
11
|
|
|
$
|
(5
|
)
|
|
$
|
6
|
|
|
2019
|
$
|
27
|
|
|
$
|
(4
|
)
|
|
$
|
(3
|
)
|
|
$
|
32
|
|
|
$
|
52
|
|
|
$
|
(12
|
)
|
|
$
|
40
|
|
|
First six months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2020
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
20
|
|
|
$
|
(15
|
)
|
|
$
|
12
|
|
|
$
|
(14
|
)
|
|
$
|
(2
|
)
|
|
2019
|
$
|
69
|
|
|
$
|
(12
|
)
|
|
$
|
3
|
|
|
$
|
75
|
|
|
$
|
135
|
|
|
$
|
(31
|
)
|
|
$
|
104
|
|
|
(1)
|
Inter-segment sales of $7 million and $11 million for the three months ended June 30, 2020 and 2019, respectively, and $14 million and $22 million for the six months ended June 30, 2020 and 2019, which were transacted either at the lowest market price of the previous month or cost, were excluded from market pulp sales.
|
(2)
|
Wood products sales to our joint ventures, which are transacted at arm’s length negotiated prices, were $5 million and $6 million for the three months ended June 30, 2020 and 2019, respectively, and $10 million and $11 million for the six months ended June 30, 2020 and 2019.
|
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 and cost-effective operations, including significant internal energy production from cogeneration and hydroelectric facilities, which support our value proposition;
|
–
|
control over fiber transformation chain from standing timber to end-product for the majority of our offering;
|
–
|
nearly 100% of our products sourced from high-quality virgin fiber;
|
–
|
harvesting rights for the majority of fiber needs in Canada; and
|
–
|
sophisticated logistics capabilities to meet demanding customer expectations.
|
•
|
Solid balance sheet
|
–
|
favorable pricing and flexibility under borrowing agreements together with our liquidity levels support our ability to weather challenging market cycles and to execute our transformation strategy;
|
–
|
significant tax assets to defer cash income taxes and provide synergies to execute this strategy; and
|
–
|
customers benefit from a financially stable and reliable business partner in a challenging industry.
|
•
|
Seasoned management team
|
–
|
deep industry expertise, with influential leaders in forestry, operations, environmental risk management and public policy;
|
–
|
culture of accountability, encouraging transparency and straightforwardness; and
|
–
|
core identity tied to renewable resources we harvest in a truly sustainable manner.
|
Three Months Ended June 30, 2020
|
Operating Income (Loss)
|
Net Income (Loss)
|
EPS
|
|
|
|||||||
(Unaudited, in millions, except per share amounts)
|
||||||||||||
GAAP, as reported
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
0.07
|
|
|
Adjustments for special items:
|
|
|
|
|
|
|
|
|
|
|||
Net gain on disposition of assets
|
|
(9
|
)
|
|
|
(9
|
)
|
|
|
(0.10
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
(4
|
)
|
|
|
(0.05
|
)
|
|
Other income, net
|
|
—
|
|
|
|
(10
|
)
|
|
|
(0.11
|
)
|
|
Income tax effect of special items
|
|
—
|
|
|
|
(5
|
)
|
|
|
(0.06
|
)
|
|
Adjusted for special items (1)
|
$
|
(3
|
)
|
|
$
|
(22
|
)
|
|
$
|
(0.25
|
)
|
|
Three Months Ended June 30, 2019
|
Operating Income
|
Net Income
|
EPS
|
|
|
|||||||
(Unaudited, in millions, except per share amounts)
|
||||||||||||
GAAP, as reported
|
$
|
40
|
|
|
$
|
25
|
|
|
$
|
0.27
|
|
|
Adjustments for special items:
|
|
|
|
|
|
|
|
|
|
|||
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
(12
|
)
|
|
|
(0.13
|
)
|
|
Other expense, net
|
|
—
|
|
|
|
1
|
|
|
|
0.01
|
|
|
Income tax effect of special items
|
|
—
|
|
|
|
(3
|
)
|
|
|
(0.03
|
)
|
|
Adjusted for special items (1)
|
$
|
40
|
|
|
$
|
11
|
|
|
$
|
0.12
|
|
|
(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, and gains and losses on disposition of assets 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 non-operating pension and other postretirement benefit (or, “OPEB”) costs and credits, other income and expense, net, and the income tax effect of the special items. EPS, as adjusted for special items, is calculated as net income (loss), as adjusted for special items, per diluted share. We believe that using these non-GAAP measures is useful because they are consistent with the indicators management uses internally to measure the Company’s performance, and it allows the reader to compare our operations and financial performance from period to period. Operating income (loss), net income (loss) and EPS, in each case as adjusted for special items, 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.
|
Six Months Ended June 30, 2020
|
Operating Loss
|
Net Income (Loss)
|
EPS
|
|
|
|||||||
(Unaudited, in millions, except per share amounts)
|
||||||||||||
GAAP, as reported
|
$
|
(2
|
)
|
|
$
|
5
|
|
|
$
|
0.06
|
|
|
Adjustments for special items:
|
|
|
|
|
|
|
|
|
|
|||
Closure costs, impairment and other related charges
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
(0.02
|
)
|
|
Net gain on disposition of assets
|
|
(9
|
)
|
|
|
(9
|
)
|
|
|
(0.10
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
(19
|
)
|
|
|
(0.22
|
)
|
|
Other income, net
|
|
—
|
|
|
|
(38
|
)
|
|
|
(0.43
|
)
|
|
Income tax effect of special items
|
|
—
|
|
|
|
12
|
|
|
|
0.14
|
|
|
Adjusted for special items (1)
|
$
|
(13
|
)
|
|
$
|
(51
|
)
|
|
$
|
(0.57
|
)
|
|
Six Months Ended June 30, 2019
|
Operating Income
|
Net Income
|
EPS
|
|
|
|||||||
(Unaudited, in millions, except per share amounts)
|
||||||||||||
GAAP, as reported
|
$
|
104
|
|
|
$
|
67
|
|
|
$
|
0.71
|
|
|
Adjustments for special items:
|
|
|
|
|
|
|
|
|
|
|||
Non-operating pension and other postretirement benefit credits
|
|
—
|
|
|
|
(24
|
)
|
|
|
(0.26
|
)
|
|
Other expense, net
|
|
—
|
|
|
|
5
|
|
|
|
0.06
|
|
|
Income tax effect of special items
|
|
—
|
|
|
|
(7
|
)
|
|
|
(0.07
|
)
|
|
Adjusted for special items (1)
|
$
|
104
|
|
|
$
|
41
|
|
|
$
|
0.44
|
|
|
(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)
|
2020
|
2019
|
|
2020
|
2019
|
||||||||||||
Sales
|
$
|
612
|
|
|
$
|
755
|
|
|
|
$
|
1,301
|
|
|
$
|
1,550
|
|
|
Operating income (loss) per segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Market pulp
|
$
|
10
|
|
|
$
|
27
|
|
|
|
$
|
7
|
|
|
$
|
69
|
|
|
Tissue
|
|
(2
|
)
|
|
|
(4
|
)
|
|
|
|
—
|
|
|
|
(12
|
)
|
|
Wood products
|
|
15
|
|
|
|
(3
|
)
|
|
|
|
20
|
|
|
|
3
|
|
|
Paper
|
|
(12
|
)
|
|
|
32
|
|
|
|
|
(15
|
)
|
|
|
75
|
|
|
Segment total
|
|
11
|
|
|
|
52
|
|
|
|
|
12
|
|
|
|
135
|
|
|
Corporate and other
|
|
(5
|
)
|
|
|
(12
|
)
|
|
|
|
(14
|
)
|
|
|
(31
|
)
|
|
Operating income (loss)
|
$
|
6
|
|
|
$
|
40
|
|
|
|
$
|
(2
|
)
|
|
$
|
104
|
|
|
Net income attributable to Resolute Forest Products Inc.
|
$
|
6
|
|
|
$
|
25
|
|
|
|
$
|
5
|
|
|
$
|
67
|
|
|
Net income per common share attributable to Resolute Forest Products Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
0.07
|
|
|
$
|
0.27
|
|
|
|
$
|
0.06
|
|
|
$
|
0.73
|
|
|
Diluted
|
$
|
0.07
|
|
|
$
|
0.27
|
|
|
|
$
|
0.06
|
|
|
$
|
0.71
|
|
|
Adjusted EBITDA (1)
|
$
|
37
|
|
|
$
|
82
|
|
|
|
$
|
69
|
|
|
$
|
186
|
|
|
(Unaudited, in millions)
|
June 30,
2020 |
December 31,
2019 |
||||||
Cash and cash equivalents
|
$
|
27
|
|
|
$
|
3
|
|
|
Total assets
|
$
|
3,667
|
|
|
$
|
3,626
|
|
|
(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 interest 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 closure costs, impairment and other related charges, gains and losses on disposition of assets, non-operating pension and OPEB costs and credits, and other income and expense, net. 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 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)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Net income including noncontrolling interest
|
$
|
6
|
|
|
$
|
25
|
|
|
|
$
|
5
|
|
|
$
|
67
|
|
|
Interest expense
|
|
9
|
|
|
|
7
|
|
|
|
|
18
|
|
|
|
16
|
|
|
Income tax provision
|
|
5
|
|
|
|
19
|
|
|
|
|
32
|
|
|
|
40
|
|
|
Depreciation and amortization
|
|
40
|
|
|
|
42
|
|
|
|
|
82
|
|
|
|
82
|
|
|
EBITDA
|
$
|
60
|
|
|
$
|
93
|
|
|
|
|
137
|
|
|
|
205
|
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
—
|
|
|
|
|
(2
|
)
|
|
|
—
|
|
|
Net gain on disposition of assets
|
|
(9
|
)
|
|
|
—
|
|
|
|
|
(9
|
)
|
|
|
—
|
|
|
Non-operating pension and other postretirement benefit credits
|
|
(4
|
)
|
|
|
(12
|
)
|
|
|
|
(19
|
)
|
|
|
(24
|
)
|
|
Other (income) expense, net
|
|
(10
|
)
|
|
|
1
|
|
|
|
|
(38
|
)
|
|
|
5
|
|
|
Adjusted EBITDA
|
$
|
37
|
|
|
$
|
82
|
|
|
|
$
|
69
|
|
|
$
|
186
|
|
|
•
|
favorable maintenance costs ($11 million), as a result of reduced spending, the timing of scheduled outages and the indefinite idling of our Augusta (Georgia) mill in November 2019, partly offset by the temporary idling of the Baie-Comeau (Quebec) and Amos (Quebec) paper mills; and
|
•
|
a decrease in wood fiber costs ($6 million).
|
•
|
favorable maintenance costs ($27 million), as a result of reduced spending, the timing of scheduled outages and the indefinite idling of our Augusta mill;
|
•
|
lower recycled fiber prices ($8 million);
|
•
|
a decrease in energy prices ($8 million);
|
•
|
a decrease in wood fiber costs ($3 million); and
|
•
|
lower labor expense ($3 million), primarily due to the indefinite idling of our Augusta mill, partly offset by the temporary idling of the Baie-Comeau and Amos paper mills;
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions, except where otherwise stated)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Sales
|
$
|
161
|
|
|
$
|
189
|
|
|
|
$
|
338
|
|
|
$
|
420
|
|
|
Operating income (1)
|
$
|
10
|
|
|
$
|
27
|
|
|
|
$
|
7
|
|
|
$
|
69
|
|
|
EBITDA (2)
|
$
|
16
|
|
|
$
|
32
|
|
|
|
$
|
19
|
|
|
$
|
79
|
|
|
(In thousands of metric tons)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shipments
|
|
258
|
|
|
|
257
|
|
|
|
|
561
|
|
|
|
543
|
|
|
Downtime
|
|
33
|
|
|
|
15
|
|
|
|
|
33
|
|
|
|
23
|
|
|
|
June 30,
|
|||||||
(Unaudited, in thousands of metric tons)
|
2020
|
2019
|
||||||
Finished goods inventory
|
|
87
|
|
|
|
110
|
|
|
(1)
|
Net income including noncontrolling interest 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)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Net income including noncontrolling interest
|
$
|
10
|
|
|
$
|
27
|
|
|
|
$
|
7
|
|
|
$
|
69
|
|
|
Depreciation and amortization
|
|
6
|
|
|
|
5
|
|
|
|
|
12
|
|
|
|
10
|
|
|
EBITDA
|
$
|
16
|
|
|
$
|
32
|
|
|
|
$
|
19
|
|
|
$
|
79
|
|
|
•
|
favorable maintenance costs ($5 million), mainly due to the timing of scheduled outages and reduced spending; and
|
•
|
lower energy prices, and favorable chemical usage and prices ($4 million).
|
•
|
a decrease in wood fiber costs ($11 million);
|
•
|
favorable maintenance costs ($9 million), mainly due to the timing of scheduled outages; and
|
•
|
lower energy prices ($5 million).
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions, except where otherwise stated)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Sales
|
$
|
44
|
|
|
$
|
43
|
|
|
|
$
|
93
|
|
|
$
|
82
|
|
|
Operating loss (1)
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
|
|
$
|
—
|
|
|
$
|
(12
|
)
|
|
EBITDA (2)
|
$
|
3
|
|
|
$
|
—
|
|
|
|
$
|
9
|
|
|
$
|
(3
|
)
|
|
(In thousands of short tons)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shipments (3)
|
|
24
|
|
|
|
25
|
|
|
|
|
52
|
|
|
|
49
|
|
|
Downtime
|
|
2
|
|
|
|
—
|
|
|
|
|
2
|
|
|
|
1
|
|
|
|
June 30,
|
|||||||
(Unaudited, in thousands of short tons)
|
2020
|
2019
|
||||||
Finished goods inventory (3)
|
|
5
|
|
|
|
7
|
|
|
(1)
|
Net loss including noncontrolling interest 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)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Net loss including noncontrolling interest
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
|
|
$
|
—
|
|
|
$
|
(12
|
)
|
|
Depreciation and amortization
|
|
5
|
|
|
|
4
|
|
|
|
|
9
|
|
|
|
9
|
|
|
EBITDA
|
$
|
3
|
|
|
$
|
—
|
|
|
|
$
|
9
|
|
|
$
|
(3
|
)
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions, except where otherwise stated)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Sales
|
$
|
199
|
|
|
$
|
168
|
|
|
|
$
|
373
|
|
|
$
|
329
|
|
|
Operating income (loss) (1)
|
$
|
15
|
|
|
$
|
(3
|
)
|
|
|
$
|
20
|
|
|
$
|
3
|
|
|
EBITDA (2)
|
$
|
25
|
|
|
$
|
6
|
|
|
|
$
|
41
|
|
|
$
|
20
|
|
|
(In millions board feet)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shipments (3)
|
|
521
|
|
|
|
484
|
|
|
|
|
964
|
|
|
|
912
|
|
|
Downtime
|
|
73
|
|
|
|
53
|
|
|
|
|
168
|
|
|
|
94
|
|
|
|
June 30,
|
|||||||
(Unaudited, in millions board feet)
|
2020
|
2019
|
||||||
Finished goods inventory (3)
|
|
119
|
|
|
|
122
|
|
|
(1)
|
Net income (loss) including noncontrolling interest 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.
|
(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)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Net income (loss) including noncontrolling interest
|
$
|
15
|
|
|
$
|
(3
|
)
|
|
|
$
|
20
|
|
|
$
|
3
|
|
|
Depreciation and amortization
|
|
10
|
|
|
|
9
|
|
|
|
|
21
|
|
|
|
17
|
|
|
EBITDA
|
$
|
25
|
|
|
$
|
6
|
|
|
|
$
|
41
|
|
|
$
|
20
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions, except where otherwise stated)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Sales
|
$
|
208
|
|
|
$
|
355
|
|
|
|
$
|
497
|
|
|
$
|
719
|
|
|
Operating (loss) income (1)
|
$
|
(12
|
)
|
|
$
|
32
|
|
|
|
$
|
(15
|
)
|
|
$
|
75
|
|
|
EBITDA (2)
|
$
|
4
|
|
|
$
|
51
|
|
|
|
$
|
18
|
|
|
$
|
111
|
|
|
(In thousands of metric tons)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shipments
|
|
350
|
|
|
|
525
|
|
|
|
|
832
|
|
|
|
1,040
|
|
|
Downtime
|
|
178
|
|
|
|
65
|
|
|
|
|
200
|
|
|
|
77
|
|
|
|
June 30,
|
|||||||
(Unaudited, in thousands of metric tons)
|
2020
|
2019
|
||||||
Finished goods inventory
|
|
130
|
|
|
|
154
|
|
|
(1)
|
Net (loss) income including noncontrolling interest 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.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Net (loss) income including noncontrolling interest
|
$
|
(12
|
)
|
|
$
|
32
|
|
|
|
$
|
(15
|
)
|
|
$
|
75
|
|
|
Depreciation and amortization
|
|
16
|
|
|
|
19
|
|
|
|
|
33
|
|
|
|
36
|
|
|
EBITDA
|
$
|
4
|
|
|
$
|
51
|
|
|
|
$
|
18
|
|
|
$
|
111
|
|
|
•
|
favorable maintenance costs ($7 million), due to reduced spending; and
|
•
|
a decrease in wood fiber costs ($2 million).
|
•
|
favorable maintenance costs ($19 million), due to the indefinite idling of our Augusta mill in the fourth quarter of 2019, as well as reduced spending;
|
•
|
lower labor and overhead costs ($7 million), primarily due to the indefinite idling of our Augusta mill; and
|
•
|
lower energy prices ($3 million);
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Cost of sales, excluding depreciation, amortization and distribution costs
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
|
$
|
(4
|
)
|
|
$
|
(7
|
)
|
|
Depreciation and amortization
|
|
(3
|
)
|
|
|
(5
|
)
|
|
|
|
(7
|
)
|
|
|
(10
|
)
|
|
Selling, general and administrative expenses
|
|
(9
|
)
|
|
|
(7
|
)
|
|
|
|
(14
|
)
|
|
|
(14
|
)
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
—
|
|
|
|
|
2
|
|
|
|
—
|
|
|
Net gain on disposition of assets
|
|
9
|
|
|
|
—
|
|
|
|
|
9
|
|
|
|
—
|
|
|
Operating loss
|
|
(5
|
)
|
|
|
(12
|
)
|
|
|
|
(14
|
)
|
|
|
(31
|
)
|
|
Interest expense
|
|
(9
|
)
|
|
|
(7
|
)
|
|
|
|
(18
|
)
|
|
|
(16
|
)
|
|
Non-operating pension and other postretirement benefit credits
|
|
4
|
|
|
|
12
|
|
|
|
|
19
|
|
|
|
24
|
|
|
Other income (expense), net
|
|
10
|
|
|
|
(1
|
)
|
|
|
|
38
|
|
|
|
(5
|
)
|
|
Income tax provision
|
|
(5
|
)
|
|
|
(19
|
)
|
|
|
|
(32
|
)
|
|
|
(40
|
)
|
|
Net loss including noncontrolling interest
|
$
|
(5
|
)
|
|
$
|
(27
|
)
|
|
|
$
|
(7
|
)
|
|
$
|
(68
|
)
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
(Unaudited, in millions)
|
2020
|
|
|
2019
|
|
|
|
2020
|
|
|
2019
|
|
|
||||
Net loss including noncontrolling interest
|
$
|
(5
|
)
|
|
$
|
(27
|
)
|
|
|
$
|
(7
|
)
|
|
$
|
(68
|
)
|
|
Interest expense
|
|
9
|
|
|
|
7
|
|
|
|
|
18
|
|
|
|
16
|
|
|
Income tax provision
|
|
5
|
|
|
|
19
|
|
|
|
|
32
|
|
|
|
40
|
|
|
Depreciation and amortization
|
|
3
|
|
|
|
5
|
|
|
|
|
7
|
|
|
|
10
|
|
|
EBITDA
|
|
12
|
|
|
|
4
|
|
|
|
|
50
|
|
|
|
(2
|
)
|
|
Closure costs, impairment and other related charges
|
|
—
|
|
|
|
—
|
|
|
|
|
(2
|
)
|
|
|
—
|
|
|
Net gain on disposition of assets
|
|
(9
|
)
|
|
|
—
|
|
|
|
|
(9
|
)
|
|
|
—
|
|
|
Non-operating pension and other postretirement benefit credits
|
|
(4
|
)
|
|
|
(12
|
)
|
|
|
|
(19
|
)
|
|
|
(24
|
)
|
|
Other (income) expense, net
|
|
(10
|
)
|
|
|
1
|
|
|
|
|
(38
|
)
|
|
|
5
|
|
|
Adjusted EBITDA
|
$
|
(11
|
)
|
|
$
|
(7
|
)
|
|
|
$
|
(18
|
)
|
|
$
|
(21
|
)
|
|
•
|
our senior unsecured debt rating from B+ to B;
|
•
|
our long-term corporate credit rating from BB- to B+; and
|
•
|
our outlook from stable to negative.
|
•
|
our senior unsecured debt rating from B1 to B2;
|
•
|
our corporate family rating from Ba3 to B1;
|
•
|
our outlook from stable to negative; and
|
•
|
our liquidity rating from SGL-1 to SGL-2.
|
|
Six Months Ended
June 30, |
|||||||
(Unaudited, in millions)
|
2020
|
|
|
2019
|
|
|
||
Net cash provided by operating activities
|
$
|
76
|
|
|
$
|
95
|
|
|
Net cash used in investing activities
|
|
(227
|
)
|
|
|
(69
|
)
|
|
Net cash provided by (used in) financing activities
|
|
176
|
|
|
|
(232
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents, and restricted cash
|
|
(1
|
)
|
|
|
1
|
|
|
Net increase (decrease) in cash and cash equivalents, and restricted cash
|
$
|
24
|
|
|
$
|
(205
|
)
|
|
(Unaudited, in millions)
|
Six Months Ended June 30, 2020
|
|
Year Ended December 31, 2019
|
||||||
Sales (1)
|
$
|
1,076
|
|
|
|
$
|
2,379
|
|
|
Operating loss
|
$
|
(57
|
)
|
|
|
$
|
(203
|
)
|
|
Net loss
|
$
|
(49
|
)
|
|
|
$
|
(207
|
)
|
|
(1)
|
Includes $23 million and $76 million of sales to the Non-Guarantor Subsidiaries for the six months ended June 30, 2020 and year ended December 31, 2019, respectively.
|
(Unaudited, in millions)
|
June 30, 2020
|
|
December 31, 2019
|
||||||
Total current assets (1)
|
$
|
425
|
|
|
|
$
|
414
|
|
|
Total long-term assets (2)
|
$
|
907
|
|
|
|
$
|
833
|
|
|
Total current liabilities (3)
|
$
|
885
|
|
|
|
$
|
913
|
|
|
Total long-term liabilities
|
$
|
1,043
|
|
|
|
$
|
872
|
|
|
(1)
|
Includes $4 million of interest receivable from the Non-Guarantor Subsidiaries as of December 31, 2019.
|
(2)
|
Includes a note receivable of $112 million from the Non-Guarantor Subsidiaries as of December 31, 2019.
|
(3)
|
Includes accounts payable to the Non-Guarantor Subsidiaries of $770 million and $794 million as of June 30, 2020 and December 31, 2019, respectively.
|
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
|
•
|
While we expect to continue to operate in all of our business segments in Canada and the U.S., we have reduced our operational footprint to levels consistent with essential needs for the duration of the crisis, including by the temporary idling of certain machines or facilities and implementing temporary layoffs. Further adjustments to our operational footprint, temporary or permanent, could be made as the COVID-19 pandemic situation develops.
|
•
|
The COVID-19 pandemic could accelerate the secular demand decline for paper products like those we manufacture as widespread confinement is altering consumer habits. The decline in demand and altered habits could become permanent.
|
•
|
Any construction slowdown in North America may result in a decline in demand for wood products. If the demand for wood products falls and we reduce harvesting and sawmill activity as a result, we could have greater difficulty obtaining the supply of timber and wood fiber required for our operations at favorable prices, or at all.
|
•
|
There is increased risk that we may not obtain raw materials, chemicals and other required supplies or services in timely fashion and at favorable prices due to the impact of the reduced economic activity as a result of the COVID-19 pandemic on our suppliers, which could affect our production output.
|
•
|
Additional trade restrictions or barriers could also affect negatively our supply chain as well as the sales or distribution of our products.
|
•
|
The impact of the reduced economic activity as a result of the COVID-19 pandemic on our customers could increase our risk of credit exposure.
|
•
|
Although the forest products industry has generally been recognized as critical or essential in locations where we operate, the current health restrictions, including social distancing measures, are having an impact on how our workers can fulfill their duties, and limit the number of employees we can have in our operations, which in turn could impact our production output and costs.
|
•
|
It could be difficult or costly to restart certain of our temporarily idled operations, and we could face personnel shortages if employees are no longer available or amenable to return to work.
|
•
|
Further, should any key employees become ill from COVID-19 or unable to work, the attention of our management team could be diverted.
|
•
|
The reduced operations and staffing in our facilities, remote working conditions and increased risk in not obtaining supplies or services could increase the risk of non-compliance and incidents.
|
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
|
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
$
|
100,000,000
|
|
|
May 1 to May 31
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
100,000,000
|
|
|
June 1 to June 30
|
|
253,898
|
|
|
|
2.09
|
|
|
|
253,898
|
|
|
|
99,469,293
|
|
|
Total
|
|
253,898
|
|
|
$
|
2.09
|
|
|
|
253,898
|
|
|
$
|
99,469,293
|
|
|
(1)
|
$100 million share repurchase program launched in 2020. For more information, see Note 12, “Share Capital,” to our Consolidated Financial Statements.
|
ITEM 6.
|
EXHIBITS
|
Exhibit No.
|
|
Description
|
|
|
|
|
2020 Resolute Forest Products Inc. Short-Term Incentive Plan – U.S.
|
|
|
|
|
|
2020 Resolute Forest Products Inc. Short-Term Incentive Plan – Canada / International.
|
|
|
|
|
|
First Amendment to the Resolute Forest Products Inc. 2019 Equity Incentive Plan (incorporated by reference from Exhibit 10.1 to Resolute Forest Products Inc.’s Registration Statement on Form S-8 filed August 5, 2020, SEC Registration No. 333-241026).
|
|
|
|
|
|
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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