Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2023 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2023 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | Q2 |
No Trading Symbol Flag | true |
Entity Registrant Name | DOMTAR CORPORATION |
Entity Central Index Key | 0001381531 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Small Business | false |
Entity Shell Company | false |
Entity Emerging Growth Company | false |
Entity Common Stock, Shares Outstanding | 0 |
Entity File Number | 001-33164 |
Entity Tax Identification Number | 20-5901152 |
Entity Address, Address Line One | 234 Kingsley Park Drive |
Entity Address, City or Town | Fort Mill |
Entity Address, State or Province | SC |
Entity Address, Postal Zip Code | 29715 |
City Area Code | 803 |
Local Phone Number | 802-7500 |
Entity Incorporation, State or Country Code | DE |
Document Quarterly Report | true |
Document Transition Report | false |
Title of 12(b) Security | None |
Consolidated Statements of Earn
Consolidated Statements of Earnings (Loss) and Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | ||||
Income Statement [Abstract] | |||||||
Sales | $ 1,730 | $ 1,148 | [1] | $ 3,153 | $ 2,219 | [1] | |
Operating expenses | |||||||
Cost of sales, excluding depreciation and amortization | 1,492 | 935 | [1] | 2,600 | 1,813 | [1] | |
Depreciation and amortization | 80 | 64 | [1] | 140 | 132 | [1] | |
Selling, general and administrative | 96 | 73 | [1] | 178 | 147 | [1] | |
Asset conversion costs (NOTE 10) | 33 | 12 | [1] | 63 | 25 | [1] | |
Transaction costs (NOTE 3) | 7 | 3 | [1] | 63 | 6 | [1] | |
Other operating loss (income), net | 1 | (5) | [1] | (1) | (2) | [1] | |
Operating expenses | 1,709 | 1,082 | [1] | 3,043 | 2,121 | [1] | |
Operating income from continuing operations | 21 | 66 | [1] | 110 | 98 | [1] | |
Interest expense, net | 58 | 24 | [1] | 103 | 45 | [1] | |
Non-service components of net periodic benefit cost (NOTE 6) | (4) | (17) | [1] | (8) | (26) | [1] | |
(Loss) earnings before income taxes | (33) | 59 | [1] | 15 | 79 | [1] | |
Income tax (benefit) expense (NOTE 7) | (9) | 14 | [1] | (65) | 19 | [1] | |
(Loss) earnings from continuing operations | (24) | 45 | [1] | 80 | 60 | [1] | |
Earnings from discontinued operations, net of taxes (NOTE 4) | 11 | 5 | [1] | 13 | 18 | [1] | |
Net (loss) earnings | (13) | 50 | [1] | 93 | 78 | [1] | |
Net derivative gains (losses) on cash flow hedges: | |||||||
Net gains (losses) arising during the period, net of tax of $(3) and $(1), respectively (2022 - $2 and $(3), respectively) | 9 | (7) | [1] | 4 | 10 | [1] | |
Less: Reclassification adjustment for losses (gains) included in net (loss) earnings, net of tax of $(1) and $(4), respectively (2022 - $2 and $2, respectively) | 3 | (4) | [1] | 11 | (6) | [1] | |
Foreign currency translation adjustments | 25 | (20) | [1] | 26 | (7) | [1] | |
Change in unrecognized gains and prior service cost related to pension and post-retirement benefit plans, net of tax of nil, respectively (2022 - $(4) and $(4), respectively) | [1] | 11 | 11 | ||||
Other comprehensive income (loss) | 37 | (20) | [1] | 41 | 8 | [1] | |
Comprehensive income | $ 24 | $ 30 | [1] | $ 134 | $ 86 | [1] | |
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Consolidated Statements of Ea_2
Consolidated Statements of Earnings (Loss) and Comprehensive Income (Parenthetical) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | [1] | Jun. 30, 2023 | Jun. 30, 2022 | [1] | |
Income Statement [Abstract] | ||||||
Net gains (losses) arising during the period, tax | $ (3) | $ 2 | $ (1) | $ (3) | ||
Reclassification adjustment for losses (gains) included in net (loss) earnings, net, tax | (1) | 2 | (4) | 2 | ||
Change in unrecognized gains and prior service cost related to pension and post-retirement benefit plans, tax | $ 0 | $ (4) | $ 0 | $ (4) | ||
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | ||
Current assets | ||||
Cash and cash equivalents, including restricted cash of $5 and nil | $ 58 | $ 391 | [1] | |
Receivables, less allowances of $8 and $4 | 716 | 549 | [1] | |
Receivables from related party (NOTE 15) | 11 | 13 | [1] | |
Inventories (NOTE 8) | 1,301 | 718 | [1] | |
Prepaid expenses | 93 | 26 | [1] | |
Income and other taxes receivable | 62 | 45 | [1] | |
Other current assets | 17 | |||
Assets held for sale (NOTE 4) | 530 | |||
Total current assets | 2,788 | 1,742 | [1] | |
Property, plant and equipment, net | 3,308 | 2,815 | [1] | |
Operating lease right-of-use assets | 110 | 43 | [1] | |
Intangible assets, net | 90 | 23 | [1] | |
Deferred income tax assets | 505 | |||
Other assets (NOTE 9) | 461 | 251 | [1] | |
Total assets | 7,262 | 4,874 | [1] | |
Current liabilities | ||||
Bank indebtedness | [1] | 17 | ||
Trade and other payables | 882 | 642 | [1] | |
Payables to related party (NOTE 15) | 1 | 9 | [1] | |
Income and other taxes payable | 20 | 61 | [1] | |
Operating lease liabilities due within one year | 28 | 17 | [1] | |
Due to related party (NOTE 15) | 50 | 102 | [1] | |
Long-term debt due within one year (NOTE 11) | 67 | 47 | [1] | |
Liabilities held for sale (NOTE 4) | 72 | |||
Total current liabilities | 1,120 | 895 | [1] | |
Long-term debt (NOTE 11) | 2,404 | 1,503 | [1] | |
Due to related party (NOTE 15) | 135 | |||
Operating lease liabilities | 87 | 27 | [1] | |
Deferred income taxes and other | 170 | 507 | [1] | |
Pension and post-retirement benefit obligations | 747 | 109 | [1] | |
Other liabilities and deferred credits | 286 | 69 | [1] | |
Commitments and contingencies (NOTE 13) | [1] | |||
Shareholders' equity | ||||
Additional paid-in capital | 2,000 | 1,585 | [1] | |
Retained earnings | 341 | 248 | [1] | |
Accumulated other comprehensive loss | (28) | (69) | [1] | |
Total shareholders' equity | 2,313 | 1,764 | [1],[2] | |
Total liabilities and shareholders' equity | $ 7,262 | $ 4,874 | [1] | |
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | [1] |
Statement Of Financial Position [Abstract] | |||
Restricted cash | $ 5 | $ 0 | |
Receivables, allowances | $ 8 | $ 4 | |
Common stock, par value | $ 0.01 | $ 0.01 | |
Common Stock, Shares outstanding | 100 | 100 | |
Common stock, shares issued | 100 | 100 | |
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Millions | Total | Additional Paid-in Capital | (Deficit) Retained Earnings | Accumulated Other Comprehensive Income (Loss) | ||||
Balance at Dec. 31, 2021 | [1] | $ 1,494 | $ 1,846 | $ (376) | $ 24 | |||
Net (loss) earnings | 78 | [2] | 78 | [1] | ||||
Net derivative gains (losses) on cash flow hedges: | ||||||||
Net (losses) gains arising during the period, net of tax | 10 | [2] | 10 | [1] | ||||
Less: Reclassification adjustment for losses (gains) included in net loss (earnings), net of tax | (6) | [2] | (6) | [1] | ||||
Foreign currency translation adjustments | (7) | [2] | (7) | [1] | ||||
Change in unrecognized gains (losses) and prior service cost related to pension and post-retirement benefit plans, net of tax | 11 | [2] | 11 | [1] | ||||
Balance at Jun. 30, 2022 | [1] | 1,580 | 1,846 | (298) | 32 | |||
Balance at Mar. 31, 2022 | [1] | 1,550 | 1,846 | (348) | 52 | |||
Net (loss) earnings | 50 | [2] | 50 | [1] | ||||
Net derivative gains (losses) on cash flow hedges: | ||||||||
Net (losses) gains arising during the period, net of tax | (7) | [2] | (7) | [1] | ||||
Less: Reclassification adjustment for losses (gains) included in net loss (earnings), net of tax | (4) | [2] | (4) | [1] | ||||
Foreign currency translation adjustments | (20) | [2] | (20) | [1] | ||||
Change in unrecognized gains (losses) and prior service cost related to pension and post-retirement benefit plans, net of tax | 11 | [2] | 11 | [1] | ||||
Balance at Jun. 30, 2022 | [1] | 1,580 | 1,846 | (298) | 32 | |||
Balance at Dec. 31, 2022 | [3] | 1,764 | [4] | 1,585 | 248 | (69) | ||
Net (loss) earnings | 93 | 93 | ||||||
Net derivative gains (losses) on cash flow hedges: | ||||||||
Net (losses) gains arising during the period, net of tax | 4 | 4 | ||||||
Less: Reclassification adjustment for losses (gains) included in net loss (earnings), net of tax | 11 | 11 | ||||||
Foreign currency translation adjustments | 26 | 26 | ||||||
Capital contribution | 600 | 600 | ||||||
Transaction with Skookumchuck Pulp Inc.'s stockholders (NOTE 3) | (130) | (130) | ||||||
Deemed dividend | (55) | (55) | ||||||
Balance at Jun. 30, 2023 | 2,313 | 2,000 | 341 | (28) | ||||
Balance at Mar. 31, 2023 | [3] | 2,474 | 2,185 | 354 | (65) | |||
Net (loss) earnings | (13) | (13) | ||||||
Net derivative gains (losses) on cash flow hedges: | ||||||||
Net (losses) gains arising during the period, net of tax | 9 | 9 | ||||||
Less: Reclassification adjustment for losses (gains) included in net loss (earnings), net of tax | 3 | 3 | ||||||
Foreign currency translation adjustments | 25 | 25 | ||||||
Transaction with Skookumchuck Pulp Inc.'s stockholders (NOTE 3) | (130) | (130) | ||||||
Deemed dividend | (55) | (55) | ||||||
Balance at Jun. 30, 2023 | $ 2,313 | $ 2,000 | $ 341 | $ (28) | ||||
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | [1] | Jun. 30, 2023 | Jun. 30, 2022 | [1] | |
Statement Of Stockholders Equity [Abstract] | ||||||
Net gains (losses) arising during the period, tax | $ (3) | $ 2 | $ (1) | $ (3) | ||
Reclassification adjustment for losses (gains) included in net earnings, net, tax | (1) | 2 | (4) | 2 | ||
Change in unrecognized (losses) gains and prior service cost related to pension and post-retirement benefit plans, tax | $ 0 | $ (4) | $ 0 | $ (4) | ||
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | |||
Operating activities | ||||
Net earnings | $ 93 | $ 78 | [1] | |
Adjustments to reconcile net earnings to cash flows (used for) provided from operating activities | ||||
Depreciation and amortization | 140 | 132 | [1] | |
Deferred income taxes and tax uncertainties (NOTE 7) | (65) | (7) | [1] | |
Net gains on disposals of property, plant and equipment | (7) | |||
Other | 15 | (1) | [1] | |
Changes in assets and liabilities, excluding the effect of acquisition and sale of businesses | ||||
Receivables, including related party | 85 | (7) | [1] | |
Inventories | (81) | (15) | [1] | |
Prepaid expenses | (28) | 9 | [1] | |
Trade and other payables, including related party | (252) | 36 | [1] | |
Income and other taxes | (47) | 36 | [1] | |
Difference between employer pension and other post-retirement contributions and pension and other post-retirement expense | (25) | (23) | [1] | |
Other assets and other liabilities | 4 | (5) | [1] | |
Cash flows (used for) provided from operating activities | (168) | 233 | [1] | |
Investing activities | ||||
Additions to property, plant and equipment | (143) | (217) | [1] | |
Proceeds from disposals of property, plant and equipment | 7 | 23 | [1] | |
Proceeds from sale of business, net of cash disposed (NOTE 3) | [1] | 237 | ||
Acquisition of businesses, net of cash acquired | (1,098) | |||
Other | (7) | |||
Cash flows (used for) provided from investing activities | (1,241) | 43 | [1] | |
Financing activities | ||||
Issuance of capital | 500 | |||
Net change in bank indebtedness | (17) | |||
Change in revolving credit facility | 300 | (115) | [1] | |
Issuance of long-term debt, net of debt issue costs | 930 | 127 | [1] | |
Repayments of long-term debt | (630) | (379) | [1] | |
Other | (8) | (2) | [1] | |
Cash flows provided from (used for) financing activities | 1,075 | (369) | [1] | |
Net decrease in cash and cash equivalents | (334) | (93) | [1] | |
Impact of foreign exchange on cash | 1 | (2) | [1] | |
Cash, cash equivalents and restricted cash at beginning of period | 391 | 302 | [1] | |
Cash, cash equivalents and restricted cash at end of period | 58 | 207 | [1] | |
Supplemental cash flow information | ||||
Interest | 95 | 59 | [1] | |
Income taxes | $ 66 | $ 11 | [1] | |
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | NOTE 1. _________________ BASIS OF PRESENTATION On June 29, 2023, Domtar completed the acquisition of all the outstanding common and preferred shares of Skookumchuck Pulp Inc. (“SPI”) for a purchase consideration of $ 185 million. Paper Excellence group of companies owns both Domtar and SPI. The acquisition of SPI from Paper Excellence was accounted for as a transaction between entities under common control in accordance with ASC 805-50, Business Combination – Related Issues , which requires retrospective combination of entities as if the combination had been in effect since the inception of common control. Accordingly, the financial information for Domtar and SPI has been combined from the inception of common control which was November 30, 2021. Refer to Note 3 “Acquisition of businesses” for more information on the acquisition of SPI. On March 1, 2023, Paper Excellence completed the acquisition of all the outstanding common shares of Resolute Forest Products Inc. (“Resolute”) through Domtar by means of a merger of Terra Acquisition Sub Inc. (a Domtar wholly-owned subsidiary) with and into Resolute, with Resolute continuing as the surviving corporation and as a subsidiary of Domtar (the “Acquisition”). See Note 3 “Acquisition of businesses” for additional information on the Acquisition. For purposes of the Company’s financial statement presentation, Domtar was determined to be the accounting acquirer in the Acquisition. The Consolidated financial statements for the three and six months ended June 30, 2023 reflect the results of operations and financial position of Domtar, including the results of operations of Resolute, since the acquisition date. The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, in the opinion of Management, include all adjustments that are necessary for the fair statement of Domtar Corporation’s (“the Company”) financial position, results of operations, and cash flows for the interim periods presented. It is suggested that these consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Domtar Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the Securities and Exchange Commission. The December 31, 2022 Consolidated Balance Sheet, presented for comparative purposes in this interim report, was derived from audited consolidated financial statements, as adjusted for the impact of SPI acquisition, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The preparation of the Consolidated Financial Statements requires management to make estimates and assumptions with respect to the reported amounts of assets, liabilities, revenue, and expenses and the disclosure of contingent assets and liabilities. Results for the first half of the year may not necessarily be indicative of full-year results. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | NOTE 2 . _________________ RECENT ACCOUNTING PRONOUNCEMENTS FUTURE ACCOUNTING CHANGES TRANSITION AWAY FROM INTERBANK OFFERED RATES On March 12, 2020, the FASB issued ASU 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ”. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The amendments in the ASU are elective and apply to entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. On December 22, 2022, the FASB issued ASU 2022-06 “ Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848”. The amendments in this ASU defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. As of June 30, 2023, the Company has not yet elected any optional expedients provided in the standard. The Company will apply the accounting relief, if necessary, as relevant contract and hedge accounting relationship modifications are made during the reference rate reform transition period. The Company does not expect the adoption of this guidance to have a material impact on the consolidated financial statements. |
Acquisition of Businesses
Acquisition of Businesses | 6 Months Ended |
Jun. 30, 2023 | |
Business Combinations [Abstract] | |
Acquisition of Businesses | NO TE 3. _________________ ACQUISITION OF BUSINESSES Acquisition of Skookumchuck Pulp Inc. – transaction between entities under common control On June 29, 2023, Domtar completed the acquisition of all the outstanding common and preferred shares of Skookumchuck Pulp Inc. (“SPI”), a pulp mill in British Columbia, for a purchase consideration of $ 185 million. Paper Excellence group of companies owns both Domtar and SPI. The acquisition consideration transferred to Paper Excellence consisted of: a $ 50 million non-interest bearing promissory note due July 15, 2023; a $ 35 million promissory note bearing interest at 8.50 % per annum, due after June 30, 2031; and non-voting, redeemable Series B preferred shares totaling $ 100 million bearing interest at 9.75 % per annum and redeemable by Paper Excellence after June 30, 2031, which are included in Due to related party on the Consolidated Balance Sheet. The acquisition of SPI from Paper Excellence was accounted for as a transaction between entities under common control in accordance with ASC 805-50, Business Combination – Related Issues , which requires that SPI’s related assets and liabilities be transferred at their historical carrying amounts on the acquisition date. Domtar recognized a deemed dividend of $ 55 million, which corresponds to the excess of the purchase consideration of $ 185 million over the carrying value of the net assets transferred of $ 130 million on the acquisition date. Further, ASC 805-50 requires retrospective combination of entities as if the combination had been in effect since the inception of common control. Accordingly, the financial information for Domtar and SPI has been combined from the inception of common control, which was November 30, 2021. For the three and six months ended June 30, 2023, the Company recognized $ 1 million and $ 1 million, respectively, of transaction related costs associated to this acquisition. These costs are included in the Consolidated Statements of Earnings (Loss) and Comprehensive Income in the line item entitled Transaction costs. Acquisition of Resolute Forest Products Inc. by Paper Excellence through Domtar Corporation On March 1, 2023, Paper Excellence completed the acquisition of all the outstanding common shares of Resolute through Domtar by means of a merger of Terra Acquisition Sub Inc. (a Domtar wholly-owned subsidiary) with and into Resolute, with Resolute continuing as the surviving corporation and as a subsidiary of Domtar. Under the Acquisition agreement, Domtar acquired all outstanding shares of Resolute common stock for $ 20.50 per share and one contingent value right tied to any refunds on duty deposits made on or prior to June 30, 2022, of up to $ 500 million. Any proceeds attributable to the contingent value right will be distributed proportionally to contingent value right holders, and the value will ultimately be determined by the terms and timing of the resolution of the softwood lumber dispute between Canada and the United States. The acquisition date fair value of the consideration transferred is approximately $ 1.696 billion, less cash acquired of $ 480 million and including the contingent value right on softwood lumber duty deposit refunds estimated to be $ 118 million and included in Other liabilities and deferred credits in the Consolidated Balance Sheets. Domtar was determined to be the accounting acquirer in the Acquisition which was accounted for using the acquisition method of accounting. Under the acquisition method of accounting, the purchase consideration allocated to Resolute’s assets and liabilities is based upon their estimated preliminary fair values at the acquisition date. The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the acquisition date. The Company is in the process of obtaining third-party valuations of certain tangible and intangible assets; thus, the provisional measurements of tangible and intangible assets, off-market contracts and deferred income tax assets, as well as certain liabilities, are subject to change. Purchase adjustments were made related to events or circumstances existing at the acquisition date. The final purchase price allocation may be materially different from the preliminary purchase price allocation. Fair value of net assets acquired at the date of acquisition - Preliminary values Receivables $ 309 Inventories 525 Prepaid expenses 30 Other current assets 13 Property, plant and equipment 672 Operating lease right-of-use assets 47 Intangible assets, net (1) 69 Deferred income tax assets 775 Other assets (2) 187 Assets held for sale 265 Total assets 2,892 Less: Assumed Liabilities Trade and other payables 544 Operating lease liabilities (including short-term portion) 49 Long-term debt (including short-term portion) 312 Pension and other post-retirement benefit obligations 643 Other liabilities 87 Liabilities held for sale 41 Total liabilities 1,676 Fair value of net assets acquired at the date of acquisition 1,216 (1) The Company identified $ 69 million of off-market contracts, of which $ 10 million are being amortized over a weighted-average useful life of 9.5 years. (2) Other assets include $ 132 million of deposits and $ 21 million of equity method investments. The contingent consideration arrangement requires the Company to pay any refunds related to the countervailing and anti-dumping duty deposits made on or prior to June 30, 2022, of up to $ 500 million to contingent value right holders. The preliminary fair value of the contingent consideration arrangement at the acquisition date was $ 118 million. The Company estimated the preliminary fair value of the contingent consideration based on the last price of Resolute's common shares on the New York Stock Exchange on February 28, 2023, which is considered a Level 1 measurement. In the second quarter of 2023, the main adjustments to the previously reported preliminary purchase price allocation were as follows: Deferred income tax assets increased by $ 291 million, mainly reflecting the recognition of U.S. deferred income tax assets following an ownership change; Property, plant and equipment decreased by a net amount of $ 241 million; the estimate fair value of countervailing and anti-dumping duty cash deposits on softwood lumber, included in Other assets, decreased by $ 20 million; and Other liabilities increased for a litigation provision of $ 15 million related to a Superfund Site. See Note 13 “Commitments and Contingencies” for more information. The Company also recognized a $ 8 million reduction of off-market long-term contracts, which were also reclassified from Other assets to Intangible assets, net. The preliminary estimated fair value of property, plant and equipment was primarily determined based on management’s preliminary estimate of depreciated replacement cost as further adjusted based on estimated cash flow forecasts. The significant assumptions underlying the fair value are based on company specific information and projections, which are not observable in the market and, therefore, are considered Level 2 and Level 3 measurements. These significant assumptions are forward-looking and could be affected by future changes in economic and market conditions. The preliminary estimated fair value of finished goods was calculated as the estimated selling price, adjusted for costs of the selling effort and a reasonable profit allowance relating to the selling effort. The preliminary estimated fair value of work in process inventory and raw materials in wood products was primarily calculated as the estimated selling price, adjusted for estimated costs to complete the manufacturing, estimated costs of the selling effort, as well as a reasonable profit margin on the remaining manufacturing and selling effort. The preliminary estimated fair value of raw materials, except for raw materials in wood products, and operating and maintenance supplies was determined to approximate the historical carrying value. These significant assumptions are based on company specific information and projections, which are not observable in the market and, therefore, are considered Level 2 and Level 3 measurements. These significant assumptions are forward-looking and could be affected by future changes in economic and market conditions. The preliminary estimated fair value of other working capital items was determined to approximate their historical carrying values. For the three and six months ended June 30, 2023 , the Company recognized $ 2 million and $ 55 million of transaction related costs associated to the Acquisition, respectively, which also includes advisor and legal fees, as well as the accelerated vesting of certain long-term incentive awards of Resolute. These costs are included in the Consolidated Statements of Earnings (Loss) and Comprehensive Income in the line item entitled Transaction costs. The amounts of Sales and Net loss of Resolute included in the Company’s Consolidated Statements of Earnings (Loss) and Comprehensive Income for the period from March 1, 2023 to June 30, 2023 are $ 875 million and $ 30 million, respectively. The following represents the pro forma Consolidated Statements of Earnings (Loss) and Comprehensive Income if Resolute had been included in the Company’s consolidated results for the six months ended June 30, 2023 and for the three and six months ended June 30, 2022: For the For the June 30, June 30, June 30, 2022 2023 2022 (Unaudited) (Unaudited) $ $ $ Sales 2,094 3,602 4,052 Net earnings 161 157 280 These amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Resolute to reflect the reduction in interest expense and the additional depreciation and operating costs that would have been charged assuming the fair value adjustments to property, plant and equipment and off-market energy contracts had been applied on January 1, 2022, together with the related tax effects. In addition, these amounts include the additional interest expense incurred by the Company in relation to the financing of the Acquisition. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Discontinued Operations | NO TE 4. DISCONTINUED OPERATIONS Mandated sale of Thunder Bay and Dryden, Ontario mills On March 1, 2023, Paper Excellence completed the acquisition of all the outstanding common shares of Resolute through Domtar by means of a merger of Terra Acquisition Sub Inc. (a Domtar wholly-owned subsidiary) with and into Resolute, with Resolute continuing as the surviving corporation and as a subsidiary of Domtar. The Acquisition was subject to regulatory in various jurisdictions, including review by the Canadian Competition Bureau, which outlined certain stipulations in a consent agreement before providing their final approval. The consent agreement filed by the Canadian Commissioner of Competition (“Commissioner”) with the Competition Tribunal fulfilled the final condition to the closing of the Acquisition. According to the consent agreement, following the closing of the Acquisition, Resolute’s pulp and paper mill in Thunder Bay, Ontario and Domtar's pulp mill in Dryden, Ontario must be sold in order to resolve the Commissioner’s concerns that the Acquisition would likely lessen competition substantially in the supply of northern bleached softwood kraft pulp in Eastern and Central Canada and in the purchase of wood fiber from private lands in Northwestern Ontario. The two mills are classified as held for sale and will be sold to two independent purchasers that have been approved by the Commissioner. On May 26, 2023, the Company entered into an asset purchase agreement to sell the Thunder Bay pulp and paper mill to an affiliate of Atlas Holdings for $ 219 million in cash, subject to customary adjustments. The transaction closed on August 1, 2023 . The results of operations of the Company’s pulp and paper mill in Thunder Bay, Ontario (the "Thunder Bay disposal group") are classified as discontinued operations as the mill is part of Resolute's acquired assets. These results have been summarized in Earnings from discontinued operations, net of taxes on the Company’s Consolidated Statements of Earnings (Loss) and Comprehensive Income for the period of March 1, 2023 to June 30, 2023. The Consolidated Statements of Cash Flows were not reclassified to reflect discontinued operations. In addition, the related assets and liabilities of the Thunder Bay disposal group are classified as held for sale in the Consolidated Balance Sheets and are measured at their fair values at June 30, 2023. For the three and six months ended June 30, 2023, the Company recognized $ 2 million and $ 2 million, respectively, of transaction related costs associated with this sale. These costs are included in the Consolidated Statements of Earnings (Loss) and Comprehensive Income in the line item entitled Transaction costs. On February 26, 2023, the Company entered into an Asset Purchase Agreement to sell the Company’s Dryden, Ontario mill (the "Dryden disposal group") for a purchase price of $ 240 million in cash, subject to customary adjustments and customary closing conditions. The transaction closed on August 1, 2023 . The results of operations of the Dryden disposal group are not classified as discontinued operations as the mill is part of the pre-existing assets of Domtar. In addition, the related assets and liabilities are classified as held for sale in the Consolidated Balance Sheets and are measured at their fair values at June 30, 2023. For the three and six months ended June 30, 2023, the Company recognized $ 2 million and $ 5 million, respectively, of transaction related costs associated with this sale. These costs are included in the Consolidated Statements of Earnings (Loss) and Comprehensive Income in the line item entitled Transaction costs. Mandated sale of Kamloops, British Columbia mill On November 30, 2021, Paper Excellence completed the acquisition of all the outstanding shares of Domtar Corporation. The acquisition was subject to the review by the Canadian Competition Bureau, which outlined certain stipulations in a consent agreement before providing their final approval. The consent agreement filed by the Commissioner with the Competition Tribunal fulfilled the final condition to the closing of the business combination. According to the consent agreement, following the closing of the business combination, Domtar’s pulp mill in Kamloops, British Columbia was to be sold in order to resolve the Commissioner’s concerns about the business combination’s implications on the purchase of wood fiber from the Thompson/Okanagan region in British Columbia. On June 1, 2022, Domtar completed the sale of the mill and related assets to an independent acquiror approved by the Commissioner for a purchase price of $ 243 million. In connection with the sale, the Company entered into Transition Services Agreements with the acquirer pursuant to which the Company agreed to provide various back-office and information technology support until the business is fully separated from Domtar. The results of operations of Domtar’s pulp mill in Kamloops, British Columbia were reclassified to discontinued operations. These results have been summarized in Earnings from discontinued operations, net of taxes on the Company’s Consolidated Statements of Earnings (Loss) and Comprehensive Income for the period from January 1, 2022 to June 30, 2022. The Consolidated Statements of Cash Flows were not reclassified to reflect discontinued operations. Major components of earnings from discontinued operations: For the three months ended For the six months ended June 30, June 30, June 30, June 30, 2023 2022 2023 2022 $ $ $ $ Sales 71 66 97 154 Operating expenses Cost of sales, excluding depreciation and amortization 57 52 79 119 Transaction costs — 6 — 9 Other operating loss, net — — 1 — 57 58 80 128 Operating income 14 8 17 26 Net gain on disposition of discontinued operations — — — — Earnings from discontinued operations before 14 8 17 26 Income tax expense 3 3 4 8 Net earnings from discontinued operations 11 5 13 18 Major classes of assets and liabilities classified as held for sale in the accompanying Consolidated Balance Sheets were as follows: At June 30, 2023 $ Assets Receivables 84 Inventories 93 Prepaid expenses 2 Long-term assets 351 Total assets of the disposal groups classified as held for sale on the (1) 530 Liabilities Trade and other payables 59 Operating lease liabilities 5 Other liabilities and deferred credits 8 Total liabilities of the disposal groups classified as held for sale on the (1) 72 (1) Total assets and liabilities of the Thunder Bay and Dryden disposal groups are classified in current assets and liabilities, respectively, in the Company’s Consolidated Balance Sheet. Cash Flows from Discontinued Operations: For the six months ended June 30, June 30, 2023 2022 $ $ Cash flows provided from operating activities 15 39 Cash flows used for investing activities ( 4 ) ( 3 ) |
Derivatives and Hedging Activit
Derivatives and Hedging Activities and Fair Value Measurement | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities and Fair Value Measurement | N OTE 5. ________________ DERIVATIVES AND HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENT HEDGING PROGRAMS The Company is exposed to market risk, such as changes in currency exchange rates, commodity prices and interest rates. To the extent the Company decides to manage the volatility related to these exposures, the Company may enter into various financial derivatives that are accounted for under the derivatives and hedging guidance. These transactions are governed by the Company's hedging policies which provide direction on acceptable hedging activities, including instrument type and acceptable counterparty exposure. Upon inception, the Company formally documents the relationship between hedging instruments and hedged items. At inception and quarterly thereafter, the Company formally assesses whether the financial instruments used in hedging transactions are effective at offsetting changes in either the cash flow or the fair value of the underlying exposures. The Company does not hold derivative financial instruments for trading purposes. CREDIT RISK The Company is exposed to credit risk on accounts receivables from its customers. In order to reduce this risk, the Company reviews new customers’ credit history before granting credit and conducts regular reviews of existing customers’ credit performance. As of June 30, 2023 , one customer located in the U.S. represented 10 % or $ 77 million of the Company’s receivables (December 31, 2022 – two customers located in the U.S. represented 26 % or $ 144 million). The Company is exposed to credit risk in the event of non-performance by counterparties to its financial instruments. The Company attempts to minimize this exposure by entering into contracts with counterparties that are believed to be of high credit quality. Collateral or other security to support financial instruments subject to credit risk is usually not obtained. The credit standing of counterparties is regularly monitored. INTEREST RATE RISK The Company is exposed to interest rate risk arising from fluctuations in interest rates on its cash and cash equivalents, bank indebtedness, revolving credit facility, term loan and long-term debt. The Company’s objective in managing exposure to interest rate changes is to minimize the impact of interest rate changes on earnings and cash flows and to lower its overall borrowing costs. The Company may manage this interest rate exposure through the use of derivative instruments such as interest rate swap contracts, whereby it agrees to exchange the difference between fixed and variable interest amounts calculated by reference to an agreed upon notional principal amount. COST RISK Cash flow hedges: The Company is exposed to price volatility for raw materials and energy used in its manufacturing process. The Company manages its exposure to cost risk primarily through the use of supplier contracts. The Company purchases natural gas at the prevailing market price at the time of delivery. To reduce the impact on cash flow and earnings due to pricing volatility, the Company may utilize derivatives to fix the price of forecasted natural gas purchases. The changes in the fair value on qualifying instruments are included in Accumulated other comprehensive loss to the extent effective, and reclassified into Cost of sales in the period during which the hedged transaction affects earnings. Current contracts are used to hedge a portion of forecasted purchases of natural gas over the next 6 months. The natural gas derivative contracts were effective as of June 30, 2023. FOREIGN CURRENCY RISK Cash flow hedges: The Company has manufacturing operations in the United States and Canada. As a result, it is exposed to movements in foreign currency exchange rates in Canada. Moreover, certain assets and liabilities are denominated in Canadian dollars and are exposed to foreign currency movements. Accordingly, the Company’s earnings are affected by increases or decreases in the value of the Canadian dollar. The Company’s risk management policy allows it to hedge a significant portion of its exposure to fluctuations in foreign currency exchange rates for periods up to three years . The Company may use derivative financial instruments (currency options and foreign exchange forward contracts) to mitigate its exposure to fluctuations in foreign currency exchange rates. Derivatives are used to hedge forecasted purchases in Canadian dollars by the Company’s Canadian subsidiary over the next 24 months. Such derivatives are designated as cash flow hedges. The changes in the fair value on qualifying instruments are included in Accumulated other comprehensive loss to the extent effective, and reclassified into Sales or Cost of sales in the period during which the hedged transaction affects earnings. The foreign exchange derivative contracts were effective as of June 30, 2023. FAIR VALUE MEASUREMENT The accounting standards for fair value measurements and disclosures establish a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is available and significant to the fair value measurement. Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The following tables present information about the Company’s financial assets and financial liabilities measured at fair value on a recurring basis (except Long-term debt, see (b) and (c) below) at June 30, 2023 and December 31, 2022, in accordance with the accounting standards for fair value measurements and disclosures and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. Fair Value of financial instruments at: June 30, 2023 Quoted prices in Significant Significant Balance sheet classification $ $ $ $ Derivatives designated as Asset derivatives Currency derivatives 7 — 7 — (a) Prepaid expenses Natural gas swap contracts 1 — 1 — (a) Prepaid expenses Currency derivatives 3 — 3 — (a) Other assets Total Assets 11 — 11 — Liabilities derivatives Currency derivatives 4 — 4 — (a) Trade and other payables Natural gas swap contracts 1 — 1 — (a) Trade and other payables Total Liabilities 5 — 5 — Other Instruments: Long-term debt due 67 — 67 — (b) Long-term debt due within Long-term debt 2,243 — 2,243 — (c) Long-term debt Fair Value of financial instruments at: December 31, 2022 Quoted prices in Significant Significant Balance sheet classification $ $ $ $ Derivatives designated as Asset derivatives Currency derivatives 2 — 2 — (a) Prepaid expenses Natural gas swap contracts 4 — 4 — (a) Prepaid expenses Currency derivatives 1 — 1 — (a) Other assets Total Assets 7 — 7 — Liabilities derivatives Currency derivatives 16 — 16 — (a) Trade and other payables Natural gas swap contracts 3 — 3 — (a) Trade and other payables Currency derivatives 3 — 3 — (a) Other liabilities and deferred Total Liabilities 22 — 22 — Other Instruments: Long-term debt due within 47 — 47 — (b) Long-term debt due within Long-term debt 1,321 — 1,321 — (c) Long-term debt (a) Fair values of the Company’s derivatives are classified under Level 2 (inputs that are observable; directly or indirectly) as it is measured as follows: - For currency derivatives: Foreign currency forward and option contracts are valued using standard valuation models. Interest rates, forward market rates and volatility are used as inputs for such valuation techniques. - For natural gas contracts: Fair value is measured using the discounted difference between contractual rates and quoted market future rates. (b) Fair value of the Company’s long-term debt is measured by comparison to market prices of its debt. The Company’s long-term debt is not carried at fair value on the Consolidated Balance Sheets at June 30, 2023 and December 31, 2022 . The carrying value of the Company’s long-term debt due within one year is $ 67 million and $ 47 million at June 30, 2023 and December 31, 2022, respectively. (c) The carrying value of the Company’s long-term debt is $ 2,404 million and $ 1,503 million at June 30, 2023 and December 31, 2022 , respectively. Due to their short-term maturity, the carrying amounts of cash and cash equivalents, receivables, bank indebtedness, trade and other payables and income and other taxes approximate their fair values. |
Pension Plans and Other Post-Re
Pension Plans and Other Post-Retirement Benefit Plans | 6 Months Ended |
Jun. 30, 2023 | |
Compensation And Retirement Disclosure [Abstract] | |
Pension Plans and Other Post-Retirement Benefit Plans | NO TE 6. _________________ PENSION PLANS AND OTHER POST-RETIREMENT BENEFIT PLANS DEFINED CONTRIBUTION PLANS The Company has several defined contribution plans. The pension expense under these plans is equal to the Company’s contribution. For the three and six months ended June 30, 2023 , the pension expense was $ 13 million and $ 26 million, respectively ( 2022 – $ 8 million and $ 20 million, respectively). The Company expects to contribute approximately $ 26 million under these plans during the remainder of the year. DEFINED BENEFIT PLANS AND OTHER POST-RETIREMENT BENEFIT PLANS The Company's employees participate in various employee benefit plans. Prior to the Acquisition, Resolute provided a range of benefits to its employees and retirees, including pension benefits and post-retirement benefits. As part of the Acquisition, the Company assumed the assets and liabilities associated with these plans. Accordingly, on the acquisition date, the Company recorded assets of $ 19 million and liabilities of $ 656 million on the Consolidated Balance Sheet related to Resolute's pension and post-retirement benefit plans. The underlying fair value of the pension fund assets and liabilities related to the defined benefit pension plans and post-retirement benefit plans of Resolute were $ 3,029 million and $ 3,666 million, respectively, at the time of the Acquisition. Components of net periodic benefit cost for pension plans and other post-retirement benefit plans: For the three months ended For the six months ended June 30, 2023 June 30, 2023 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 8 — 12 — Interest expense 55 2 80 2 Expected return on plan assets ( 61 ) — ( 90 ) — Net periodic benefit cost 2 2 2 2 For the three months ended For the six months ended June 30, 2022 June 30, 2022 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 5 — 11 — Interest expense 9 — 18 1 Expected return on plan assets ( 18 ) — ( 37 ) — Settlement gain (1) ( 8 ) — ( 8 ) — Net periodic benefit cost ( 12 ) — ( 16 ) 1 (1) During the second quarter of 2022, the Company entered into agreements with insurance companies to purchase group annuity buy-out contracts and transfer approximately $ 105 million (CDN $ 135 million) of its Quebec, Canada defined benefit plans' projected benefit obligations and $ 85 million of its U.S. defined benefit plans' projected benefit obligations. The transactions closed in April 2022 for Canada and in June 2022 for the U.S. and were funded with pension plan assets. Additionally, the Company entered into agreements with existing insurers to convert $ 141 million (CDN $ 180 million) of existing buy-in annuity contracts to buy-out annuity contracts to complete the full transfer of these obligations. These annuity buy-out transactions transferred responsibility for pension benefits for approximately 3,253 retirees and their beneficiaries. Settlement accounting rules required a remeasurement of the plans as of April 30, 2022 for Canada and June 30, 2022 for the U.S. and the Company recognized a non-cash pension settlement gain of $ 8 million before tax in the second quarter of 2022. The components of net periodic benefit cost for pension plans and other post-retirement benefits plans, other than service cost, are presented in Non-service components of net periodic benefit cost on the Consolidated Statement of Earnings (Loss) and Comprehensive Income. For the three and six months ended June 30, 2023 , the Company contributed $ 16 million and $ 22 million, respectively, ( 2022 – $ 2 million and $ 4 million, respectively) to the pension plans and $ 4 million and $ 6 million, respectively, ( 2022 – $ 1 million and $ 2 million, respectively) to the other post-retirement benefit plans. The Company expects to make cash contributions of approximately $ 32 million to the pension plans and $ 7 million to the other post-retirement benefit plans during the remainder of the year. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 7. _________________ INCOME TAXES For the second quarter of 2023, the Company’s income tax benefit was $ 9 million, consisting of a current income tax benefit of $ 5 million and a deferred income tax benefit of $ 4 million. This compares to an income tax expense of $ 14 million in the second quarter of 2022, consisting of a current income tax expense of $ 23 million and a deferred income tax benefit of $ 9 million. The Company made payments, net of income tax refunds, of $ 16 million during the second quarter of 2023. The effective tax rate was 27 % compared with an effective tax rate of 24 % in the second quarter of 2022. The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate and then adjusting for discrete items arising in that quarter. In each interim quarter the Company updates its estimate of the annual effective tax rate and, if the estimated annual tax rate changes, makes a cumulative adjustment in that quarter. The effective tax rate for the second quarter of 2023 was favorably impacted by such a cumulative adjustment, mainly due to a change in the mix of earnings or loss between jurisdictions. This was more than offset by a $ 5 million unfavorable deferred tax impact related to the change in expected future provincial effective tax rates after the amalgamation with Skookumchuck Pulp Inc. For the first six months of 2023, the Company’s income tax benefit was $ 65 million, consisting of a current income tax expense of $ 6 million and a deferred income tax benefit of $ 71 million. This compares to an income tax expense of $ 19 million in the first six months of 2022, consisting of a current income tax expense of $ 26 million and a deferred income tax benefit of $ 7 million. The Company made payments, net of income tax refunds, of $ 66 million during the first six months of 2023. The effective tax rate was - 433 % compared to an effective tax rate of 24 % in the first six months of 2022.The effective tax rate for the first half of 2023 was impacted by the reversal of the valuation allowance on Skookumchuck Pulp Inc.’s tax loss carryforwards due to management’s assessment that the future income of Skookumchuck Pulp Inc. would be sufficient to utilize the losses prior to expiration. There were also transaction costs incurred in the first half of 2023 which provided minimal tax benefit. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 8. _________________ INVENTORIES The following table presents the components of inventories: June 30, December 31, 2023 2022 $ $ Work in process and finished goods 717 400 Raw materials 265 147 Operating and maintenance supplies 319 171 1,301 718 |
Other Assets
Other Assets | 6 Months Ended |
Jun. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | NO TE 9. _________________ OTHER ASSETS The following table presents the components of other assets: June 30, December 31, 2023 2022 $ $ Pension asset - defined benefit pension plans 247 219 Countervailing duty and anti-dumping duty cash deposits on softwood lumber 145 — Other 69 32 461 251 As of June 30, 2023, a total of $ 584 million of estimated countervailing and anti-dumping duty cash deposits on softwood lumber were paid. Of this amount, $ 563 million of deposits were paid at acquisition date and were included in the preliminary purchase price allocation (refer to Note 3 “Acquisition of businesses” ). These deposits are measured since the acquisition date, using a model based on the assumption that a settlement would be reached and that a certain percentage of the deposits would be recovered after a certain period of time. |
Asset Conversion Costs
Asset Conversion Costs | 6 Months Ended |
Jun. 30, 2023 | |
Restructuring And Related Activities [Abstract] | |
Asset Conversion Costs | N OTE 10. _________________ ASSET CONVERSION COSTS Conversion of Kingsport, Tennessee mill The Company has entered the linerboard market with the conversion of the Kingsport paper machine. Once in full operation, the mill will produce and market approximately 600,000 tons annually of high-quality recycled linerboard and medium, providing the Company with a strategic footprint in a growing adjacent market. The conversion was fully completed in June 2023. For the three and six months ended June 30, 2023, the Company recorded $ 33 million and $ 63 million, respectively, under Asset conversion costs on the Consolidated Statement of Earnings (Loss) and Comprehensive Income (2022 – $ 12 million and $ 25 million, respectively). |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | NO TE 11. _________________ LONG-TERM DEBT Par June 30, December 31, Maturity Amount Currency 2023 2022 $ $ $ Unsecured notes 6.25 % Notes 2042 116 USD 121 121 6.75 % Notes 2044 150 USD 156 157 Senior secured notes 6.75 % Notes 2028 642 USD 642 642 ABL Revolving Credit Facility 2028 300 USD 300 — First Lien Term Loan 2028 353 USD 350 639 Farm Credit Term Loan A 2030 658 USD 652 — Farm Credit Term Loan B 2028 276 USD 276 — Other USD — 14 Finance lease obligations 2023 - 2028 5 4 2,502 1,577 Less: Unamortized debt issuance costs 31 27 Less: Due within one year 67 47 2,404 1,503 ABL REVOLVING CREDIT FACILITY On March 1, 2023, the Company amended its ABL Revolving Credit Facility that matures on March 1, 2028 (extended from November 30, 2026 ). The Company’s ABL Revolving Credit Facility provides for revolving loans and letters of credit of up to $ 1.0 billion (up from $ 400 million), subject to borrowing base capacity. On March 1, 2023, the ABL Revolving Credit Facility was drawn by $ 210 million to partially fund the Acquisition and provide liquidity. The ABL Revolving Credit Facility, when specified excess availability is less than the greater of $87.5 million and 10% of the lesser of the borrowing base and maximum borrowing capacity, requires the maintenance of a fixed charge coverage ratio of 1.00 to 1.00 at the end of each fiscal quarter for the trailing twelve month period. This covenant did not apply as at June 30, 2023. On June 30, 2023, the Company had borrowings of $ 300 million and $ 179 million of letters of credit outstanding under this facility, leaving unused commitments of $ 521 million available. FARM CREDIT TERM LOAN On March 1, 2023, the Company entered into a Term Loan Credit Agreement (the “Farm Credit Term Loan”) for $ 949 million, consisting of two tranches: (a) $ 666 million of Farm Credit Term Loan A used to refinance renewable energy investments and facilitate the Acquisition and (b) $ 283 million of Farm Credit Term Loan B used to repay $ 283 million of borrowings under the First Lien Term Loan Facility. Farm Credit Term Loan A will mature on March 1, 2030 and Farm Credit Term Loan B will mature on November 30, 2028 . The Farm Credit Term Loan bears interest at a floating rate per annum, at Domtar’s option, (i) at SOFR (adjusted by 0.10 %) plus 6.00 % or a base rate plus 5.00 %, with respect to Farm Credit Term Loan A and (ii) at SOFR (adjusted by 0.10 %) plus 5.75 % or a base rate plus 4.75 %, with respect to Farm Credit Term Loan B. The SOFR rate is subject to an interest rate floor of 0.75 % and the base rate is subject to an interest rate floor of 1.75 %. Borrowings under the Company's Farm Credit Term Loan will amortize in equal quarterly installments in an amount equivalent to 5.00 % per annum of the principal amount. The Farm Credit Term Loan ranks pari passu with the First Lien Term Loan Credit Agreement and the Senior Secured Notes. The Company is required to offer to prepay the loans under the Farm Credit Term Loan, the First Lien Term Loan Facility and the Senior Secured Notes with 100 % of the net cash proceeds of certain asset sales subject to reinvestment rights. The Company is required to prepay the Farm Credit Term Loan and First Lien Term Loan Facility with 100 % of the net cash proceeds of certain debt issuances and 50 % of excess cash flow, subject to certain exceptions. The Farm Credit Term Loan contains customary negative covenants, including, but not limited to, restrictions on the Company's ability and that of its restricted subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make investments, pay dividends or make other restricted payments, sell or otherwise transfer assets or enter into transactions with affiliates. The Farm Credit Term Loan provides that, upon the occurrence of certain events of default, the Company's obligations thereunder may be accelerated. Such events of default include payment defaults to the lenders thereunder, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, voluntary and involuntary bankruptcy, insolvency, corporate arrangement, winding-up, liquidation or similar proceedings, material money judgments, change of control and other customary events of default. The Company repaid $ 8 million of Farm Credit Term Loan A and $ 3 million of Farm Credit Term Loan B respectively, in the second quarter of 2023 as required for quarterly amortization. At June 30, 2023 there was $ 658 million of borrowings under Farm Credit Term Loan A and $ 276 million of borrowings under Farm Credit Term Loan B. FIRST LIEN TERM LOAN FACILITY During the second quarter of 2023, the Company repa id $ 4 million as required for quarterly amortization. The Company also repaid $ 283 million on March 1, 2023 pursuant to the Acquisition and related to the issue of Farm Credit Term Loan B for $ 283 million. At June 30, 2023 there was $ 353 million of borrowings outstanding under the First Lien Term Loan Facility. On January 7, 2022, the Company utilized $ 127 million under the Delayed Draw Term Loan facility to fund a portion of the redemptions of the Existing Domtar Notes pursuant to the Domtar Notes Change of Control Offers that terminated on January 3, 2022. The remainder of the Delayed Draw Term Loan facility was cancelled. REDEMPTION OF RESOLUTE NOTES Resolute had $ 300 million of notes outstanding upon the Acquisition taking place. On February 14, 2023, Resolute delivered notice of redemption to holders of the 4.875 % senior notes due 2026. The redemption notice provided for the full redemption of $ 300 million principal amount of the notes on March 1, 2023 at a redemption price equal to 102.438 % of the principal amount of the notes redeemed, plus accrued and unpaid interest. The redemption of the notes was subject to the consummation of the Acquisition. Following the redemption on March 1, 2023, no Resolute notes remain outstanding. SENIOR SECURED NOTES On January 7, 2022, $ 133 million of the 6.75 % Senior Secured Notes due 2028 were redeemed, with accrued interest of $ 2 million, as a result of the Domtar Existing Notes Change of Control Offers that terminated on January 3, 2022. EXISTING DOMTAR NOTES CHANGE OF CONTROL OFFERS On January 3, 2022, $ 134 million of the 6.25 % Notes due 2042 and $ 100 million of the 6.75 % Notes due 2044 were tendered pursuant to the offer. In addition, $ 3 million of premium and $ 6 million of accrued interest were paid. As a result, $ 116 million of the 6.25 % Notes due 2042 and $ 150 million of the 6.75 % Notes due 2044, remain outstanding as of June 30, 2023. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss by Component | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss by Component | NOTE 12. _________________ CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS BY COMPONENT The following table presents the changes in Accumulated other comprehensive loss by component (1) for the six months ended June 30, 2023 and the year ended December 31, 2022: Net derivative Pension items (2) Post-retirement (2) Foreign currency Total $ $ $ $ $ Balance at December 31, 2021 — 17 ( 1 ) 8 24 Natural gas swap contracts 14 N/A N/A N/A 14 Currency options ( 2 ) N/A N/A N/A ( 2 ) Foreign exchange forward contracts ( 16 ) N/A N/A N/A ( 16 ) Net (loss) gain N/A ( 11 ) 9 N/A ( 2 ) Foreign currency items N/A N/A N/A ( 71 ) ( 71 ) Other comprehensive (loss) income ( 4 ) ( 11 ) 9 ( 71 ) ( 77 ) Amounts reclassified from Accumulated ( 8 ) ( 7 ) ( 1 ) — ( 16 ) Net current period other comprehensive ( 12 ) ( 18 ) 8 ( 71 ) ( 93 ) Balance at December 31, 2022 ( 12 ) ( 1 ) 7 ( 63 ) ( 69 ) Natural gas swap contracts ( 5 ) N/A N/A N/A ( 5 ) Currency options 1 N/A N/A N/A 1 Foreign exchange forward contracts 8 N/A N/A N/A 8 Net gain N/A — — N/A — Foreign currency items N/A N/A N/A 26 26 Other comprehensive income 4 — — 26 30 Amounts reclassified from Accumulated 11 — — — 11 Net current period other comprehensive 15 — — 26 41 Balance at June 30, 2023 3 ( 1 ) 7 ( 37 ) ( 28 ) (1) All amounts are after tax. Amounts in parentheses indicate losses. (2) The projected benefit obligation is actuarially determined on an annual basis as of December 31. The following tables present reclassifications out of Accumulated other comprehensive loss: Details about Accumulated other comprehensive loss components Amounts reclassified from For the three months ended June 30, June 30, 2023 2022 $ $ Net derivative (losses) gains on cash flow hedge Natural gas swap contracts (1) — 5 Currency options and forwards (1) ( 4 ) 1 Total before tax ( 4 ) 6 Tax benefit (expense) 1 ( 2 ) Net of tax ( 3 ) 4 Amortization of defined benefit pension items Amortization of net actuarial gain (2) (3) — 8 Total before tax — 8 Tax expense — ( 2 ) Net of tax — 6 Amortization of other post-retirement benefit items Discontinued operations — 1 Total before tax — 1 Tax expense — — Net of tax — 1 Amounts reclassified from For the six months ended June 30, June 30, 2023 2022 $ $ Net derivatives (losses) gains on cash flow hedge Natural gas swap contracts (1) ( 7 ) 6 Currency options and forwards (1) ( 8 ) 2 Total before tax ( 15 ) 8 Tax benefit (expense) 4 ( 2 ) Net of tax ( 11 ) 6 Amortization of defined benefit pension items Amortization of net actuarial gain (2) (3) — 8 Total before tax — 8 Tax expense — ( 2 ) Net of tax — 6 Amortization of other post-retirement benefit items Discontinued operations — 1 Total before tax — 1 Tax expense — — Net of tax — 1 (1) These amounts are included in Cost of Sales in the Consolidated Statements of Earnings (Loss) and Comprehensive Income. (2) These amounts are included in the computation of net periodic benefit cost (see Note 6 “Pension Plans and Other Post-Retirement Benefit Plans” for more details). (3) Includes the non-cash pension settlement gain of $ 8 million recognized in the second quarter of 2022. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | N OTE 13. _________________ COMMITMENTS AND CONTINGENCIES ENVIRONMENTAL MATTERS The Company is subject to environmental laws and regulations enacted by federal, provincial, state and local authorities. The Company may also incur substantial costs in relation to enforcement actions (including orders requiring corrective measures, installation of pollution control equipment or other remedial actions) as a result of violations of, or liabilities under, environmental laws and regulations applicable to its past and present properties. The Company’s ongoing efforts to identify potential environmental concerns that may be associated with such properties may result in additional environmental costs and liabilities which cannot be reasonably estimated at this time. A former owner of the Company’s Dryden, Ontario manufacturing site (the "Dryden Property") operated a chlor-alkali plant during the 1960s and 1970s, during which time, mercury and other pollutants were used and discharged into the environment. In conjunction with the sale and redevelopment of the Dryden Property, the Province of Ontario (the “Province”) provided a broad indemnity (the "Indemnity") in 1985 to the then purchaser of the Dryden Property and its successors and assigns with respect to the discharge of any pollutant, including mercury, by the historical operators of the Dryden Property. This Indemnity subsequently was assigned to the Company in connection with its purchase of the Dryden Property. As the current owner of the Dryden Property, the Company is actively engaged with the Province with respect to the management of the historical contamination. The Province issued a Director's order under environmental laws to certain prior owners of the Dryden Property in connection with a nearby waste disposal site that was unrelated to the Dryden Property. The Director's order required certain work to be conducted by those prior owners at that nearby site. The prior owners asserted that the Indemnity covered the work required by the Director’s order. Following extensive litigation, the Supreme Court of Canada found, among other things, that the Indemnity covered third-party claims, but not first-party claims, such as the Director's order. In the future, the Province may challenge whether the Company has the benefit of the Indemnity. In addition to the Indemnity, Domtar has other recourses relating to the historical contamination. The situation involving the historical contamination is continuing to develop, and the Company cannot predict its outcome. While the Company currently does not believe that it will be required to incur costs that would have a material impact on its results of operations or financial condition, there is no certainty that this is in fact the case. The Company has environmental liabilities of $ 59 million recorded as of June 30, 2023 primarily related to environmental remediation related to closed sites. The amount of these liabilities represents management’s estimate of the ultimate settlement based on an assessment of relevant factors and assumptions and could be affected by changes in facts or assumptions not currently known to management for which the outcome cannot be reasonably estimated at this time. The Company also has asset retirement obligations of $ 54 million recorded as of June 30, 2023, primarily consisting of liabilities associated with landfills, sludge basins and the dismantling of retired assets. These liabilities are included in Trade and other payables and Other liabilities and deferred credits in the Consolidated Balance Sheets. Additionally, the Company has asset retirement obligations with indeterminate settlement dates. The fair value of these liabilities cannot be estimated due to the lack of sufficient information to estimate the settlement dates of the obligation. The Company will recognize liability in the period in which sufficient information becomes available. These asset retirement obligations relate mainly to disposal of potentially hazardous materials that may be required if the Company undergoes major maintenance, renovation or demolition, and to closure of retention ponds that may be required if it ceases its operations. The U.S. Environmental Protection Agency (the “EPA”) and/or various state agencies have notified the Company that it may be a potentially responsible party under the Comprehensive Environmental Response Compensation and Liability Act, commonly known as “Superfund”, and similar state laws with respect to other hazardous waste sites as to which no proceedings have been instituted against the Company. The Company continues to take remedial action under its Care and Control Program at its former wood preserving sites, and at a number of operating sites, due to possible soil, sediment or groundwater contamination. CONTINGENCIES In the normal course of operations, the Company becomes involved in various legal actions mostly related to contract disputes, patent infringements, environmental and product warranty claims, and labor issues. While the final outcome with respect to actions outstanding or pending at June 30, 2023, cannot be predicted with certainty, it is management’s opinion that their resolution will not have a material adverse effect on the Company’s financial position, results of operations or cash flows. INDEMNIFICATIONS In the normal course of business, the Company offers indemnifications relating to the sale of its businesses and real estate. In general, these indemnifications may relate to claims from past business operations, compliance with laws, the failure to abide by covenants and the breach of representations and warranties included in the sales agreements. Typically, such representations and warranties relate to taxation, environmental, product and employee matters. The terms of these indemnification agreements are generally for an unlimited period of time. At June 30, 2023 , the Company is unable to estimate the potential maximum liabilities for these types of indemnification guarantees as the amounts are contingent upon the outcome of future events, the nature and likelihood of which cannot be reasonably estimated at this time. Accordingly, no provision has been recorded. These indemnifications have not yielded a significant expense in the past. Pension Plans The Company has indemnified and held harmless the trustees of its pension funds, and the respective officers, directors, employees and agents of such trustees, from any and all costs and expenses arising out of the performance of their obligations under the relevant trust agreements, including in respect of their reliance on authorized instructions from the Company or for failing to act in the absence of authorized instructions. These indemnifications survive the termination of such agreements. At June 30, 2023 , the Company has no t recorded a liability associated with these indemnifications, as it does not expect to make any payments pertaining to these indemnifications. CLIMATE CHANGE AND AIR QUALITY REGULATIONS Various national and local laws and regulations relating to climate change have been established or are emerging in jurisdictions where the Company currently has, or may have in the future, manufacturing facilities or investments. In 2019, the EPA repealed the Clean Power Plan and replaced it with the “Affordable Clean Energy” (“ACE”) rule. The ACE rule was legally challenged in the U.S. Court of Appeals for the D.C. Circuit. The Court vacated the ACE rule and, the repeal of the Clean Power Plan, but the court stayed its mandate as to the Clean Power Plan repeal to avoid reinstating that now outdated rule. However, on June 30, 2022, the Supreme Court reversed the D.C. Circuit’s decision, holding that the Clean Power Plan was an “extraordinary” case of an agency claiming transformative power over a “major question” of policy without a clear statement from Congress. The decision does not completely bar the EPA from regulating greenhouse gas emissions from the power sector but prohibits the EPA from imposing standards based on “generation shifting” away from coal-fired power plants to natural gas plants and renewable resources. On May 23, 2023, the EPA proposed a new climate change rule for existing power plants and repealed the ACE rule. The new rule requires, by 2030, all coal-fired power plants to choose between carbon capture and sequestration, natural gas-co-firing, or retirement by 2032 (or 2035 with a 20 % operating limit). The new rule also applies to all new gas combustion turbines and existing turbines that are large and frequently operated, requiring carbon capture and sequestration or the co-firing of or conversion to hydrogen in lieu of natural gas. While the rule, if finalized as proposed, would dramatically change the electric power sector, the Company does not expect to be disproportionately affected compared with other pulp and paper producers located in the states where the Company operates. The province of Quebec has a greenhouse gas (“GHG”) cap-and-trade system with reduction targets. Ontario has its GHG Emission Performance Standards regulation. The Company does not expect its facilities to be disproportionately affected by these measures compared to the other pulp and paper producers located in these provinces. The Government of Canada has established a federal carbon pricing system that took effect in 2019. The Federal program is a backstop and takes effect if a province does not have a carbon pricing program or if a provincial program is not rigorous enough to meet federal requirements. The EPA finalized amendments revising certain aspects of its Industrial Boiler Maximum Achievable Control Technology Standard (“MACT”), or Boiler MACT. The revised rule responded to two court decisions that remanded certain issues for further review by the EPA, and it includes revisions to 34 different emission limitations that could apply to some of the Company’s facilities. Although the EPA has indicated that a small number of facilities may need to reduce emissions further compared to the current limits, the EPA does not expect additional costs to be significant and the Company does not expect its facilities to be disproportionately affected compared to other U.S. pulp and paper producers. LEGAL MATTERS The Company becomes involved in various legal proceedings, claims and governmental inquiries, investigations, and other disputes in the normal course of business, including matters related to contracts, torts, commercial and trade disputes, taxes, environmental issues, activist damages, employment and workers’ compensation claims, grievances, human rights complaints, pension and benefit plans and obligations, health and safety, product safety and liability, asbestos exposure, financial reporting and disclosure obligations, corporate governance, Indigenous peoples’ claims, antitrust, governmental regulations, and other matters. Although the final outcome is subject to many variables and cannot be predicted with any degree of certainty, the Company regularly assesses the status of the matters and establishes provisions (including legal costs expected to be incurred) when it believes an adverse outcome is probable, and the amount can be reasonably estimated. Any recovery from litigation or settlement of claims that is a gain contingency is recognized if, and when, realized or realizable. Except as described below and for claims that cannot be assessed due to their preliminary nature, the Company believes that the ultimate disposition of these matters outstanding or pending as of June 30, 2023, will not have a material adverse effect on the Company's Consolidated Financial Statements. ASBESTOS-RELATED LAWSUITS The Company is involved in a number of asbestos-related lawsuits filed primarily in U.S. state courts, including certain cases involving multiple defendants. These lawsuits principally allege direct or indirect personal injury or death resulting from exposure to asbestos-containing premises. While the Company disputes the plaintiffs’ allegations and intends to vigorously defend these claims, the ultimate resolution of these matters cannot be determined at this time. These lawsuits frequently involve claims for unspecified compensatory and punitive damages, and the Company is unable to reasonably estimate a range of possible losses, which may not be covered in whole or in part by its insurance coverage. However, unfavorable rulings, judgments or settlement terms could materially impact the Consolidated Financial Statements. Hearings for certain of these matters are scheduled to occur in the next twelve months. COUNTERVAILING DUTY AND ANTI-DUMPING INVESTIGATIONS ON SOFTWOOD LUMBER On November 25, 2016, countervailing duty and anti-dumping petitions were filed with the U.S. Department of Commerce (“Commerce”) and the U.S. International Trade Commission (“ITC”) by certain U.S. softwood lumber products producers and forest landowners, requesting that the U.S. government impose countervailing and anti-dumping duties on Canadian-origin softwood lumber products exported to the U.S. One of the Company’s subsidiaries was identified in the petitions as being a Canadian exporting producer of softwood lumber products to the U.S. and was selected as a mandatory respondent to be investigated by Commerce in both the countervailing duty and anti-dumping investigations. Countervailing Duties On April 24, 2017, Commerce announced its preliminary determination in the countervailing duty investigation; as a result, from April 28, 2017 to August 25, 2017, the Company was required to pay cash deposits to the U.S. Customs and Border Protection agency (“U.S. Customs”) at a rate of 12.82 % for countervailing duties on the vast majority of its U.S. imports of Canadian-produced softwood lumber. On November 2, 2017, Commerce issued its final determination in the countervailing investigation; as a result, from December 28, 2017 to November 30, 2020, the Company was required to pay cash deposits to U.S. Customs at a new rate of 14.70 %. On November 23, 2020, Commerce issued its final determination in the first administrative review of the countervailing order; as a result, from December 1, 2020 to December 1, 2021, the Company was required to pay cash deposits to U.S. Customs at a rate of 19.10 %. On November 24, 2021, Commerce issued its final determination in the second administrative review of the countervailing order; as a result, from December 2, 2021, to August 8, 2022, the Company was required to pay cash deposits to U.S. Customs at a rate of 18.07 %. Commerce issued its final determination dated August 3, 2022, in the third administrative review of the countervailing order; as a result, from August 9, 2022 to July 31, 2023, the Company has been required to pay cash deposits to U.S. Customs at a rate of 10.10 %. Commerce issued its final determination dated July 26, 2023, in the fourth administrative review of the countervailing order; as a result, since August 1, 2023, the Company has been required to pay cash deposits to U.S. Customs at a new rate of 1.79 % . Through June 30, 2023, the Company’s cash deposits paid totaled $ 457 mil lion. Anti-dumping Duties On June 26, 2017, Commerce announced its preliminary determination in the anti-dumping investigation; as a result, from June 30, 2017 to November 7, 2017, the Company was required to pay cash deposits to U.S. Customs at a rate of 4.59 % for anti-dumping duties on the vast majority of the Company's U.S. imports of Canadian-produced softwood lumber. On November 2, 2017, Commerce issued its final determination in the anti-dumping investigation; as a result, from November 8, 2017 to November 29, 2020, the Company was required to pay cash deposits to U.S. Customs at a rate of 3.20 %. On November 23, 2020, Commerce issued its final determination in the first administrative review of the anti-dumping order; as a result, from November 30, 2020 to December 1, 2021, the Company was required to pay cash deposits to U.S. Customs at a rate of 1.15 %. On November 24, 2021, Commerce issued its final determination in the second administrative review of the anti-dumping order; as a result, from December 2, 2021, to August 8, 2022, the Company was required to pay cash deposits to U.S. Customs at a rate of 11.59 %. Commerce issued its final determination dated August 3, 2022, in the third administrative review of the anti-dumping order; as a result, from August 9, 2022 to July 31, 2023, the Company has been required to pay cash deposits to U.S. Customs at a rate of 4.76 %. Commerce issued its final determination dated July 26, 2023, in the fourth administrative review of the anti-dumping order; as a result, since August 1, 2023, the Company has been required to pay cash deposits to U.S. Customs at a new rate of 6.20 %. Through June 30, 2023, the Company’s cash deposits paid totale d $ 127 mi llion. Ongoing Administrative Reviews Following Commerce’s completion of the Canadian softwood lumber investigation and the first, second, third, and fourth administrative reviews, the fifth administrative review remains pending. On March 14, 2023, Commerce published a notice initiating the fifth administrative review of the countervailing duty and anti-dumping orders on softwood lumber products from Canada; in decisions published on April 19, and 20, 2023, the Company was not selected as a mandatory respondent in the countervailing and anti-dumping proceedings, respectively. Ongoing Appellate Reviews On December 14, 2017 and January 4, 2018, the Company filed complaints supporting appellate reviews of the final results of Commerce’s countervailing and anti-dumping investigations on softwood lumber from Canada, respectively, before a binational panel formed pursuant to the North American Free Trade Agreement or United States-Mexico-Canada Agreement, as the case may be (“Panel”). The hearing for the anti-dumping appellate review took place on June 6 and 7, 2023, as the Company now awaits a ruling by the Panel, while the hearing for the countervailing appellate review is expected to take place on September 27-29, 2023. On January 6, 2021 and January 19, 2021, the Company filed its complaints supporting appellate Panel reviews of the final results in the countervailing and anti-dumping first administrative reviews. The Company filed similar complaints with respect to the second administrative reviews on January 12, 2022, and with respect to the third administrative reviews on September 16, 2022. Further, on May 8, 2023, the Company filed with the U.S. Court of International Trade ("CIT") a complaint supporting an appellate review of Commerce's final results in the sunset review of the anti-dumping order. Ongoing Sunset Reviews In parallel, on December 1, 2022, Commerce and the ITC published notices that automatically initiated five-year “sunset” reviews to determine whether revocation, for the future, of the anti-dumping and countervailing duty orders on softwood lumber products from Canada would likely lead to continuation or recurrence of dumping or subsidies (Commerce) and of material injury (ITC). Commerce released final results in the sunset reviews of the countervailing and anti-dumping orders on March 27 and April 3, 2023, respectively, finding that revocation of the orders would be likely to lead to continuation or recurrence of countervailable subsidies and of dumping. The countervailing and anti-dumping sunset reviews before the ITC remain pending. World Trade Organization Appeal In addition, on August 24, 2020, the World Trade Organization’s (the “WTO”) dispute panel issued a report (the “Panel Report”) in the case brought by the government of Canada in “United States — Countervailing Measures on Softwood Lumber from Canada” (DS533), concluding, among other things, that Commerce acted inconsistently with the Agreement on Subsidies and Countervailing Measures on most of the matters. On September 28, 2020, the U.S. notified the WTO’s dispute settlement body of its decision to appeal the Panel Report. Financial assurance The Company is required by U.S. Customs to provide surety bonds to secure the payment of its cash deposits. As of June 30, 2023, the Company had $ 101 million of surety bonds outstanding in favor of U.S. Customs, of which $ 62 million were secured by letters of credit. FIBREK ACQUISITION Effective July 31, 2012 , the Company completed the final step of the transaction pursuant to which it acquired the remaining 25.40 % of the outstanding Fibrek Inc. shares, following the approval of Fibrek’s shareholders on July 23, 2012, and the issuance of a final order by the Quebec Superior Court in Canada (the “Quebec Superior Court”) approving the arrangement on July 27, 2012. Certain former shareholders of Fibrek exercised rights of dissent in respect of the transaction, asking for a judicial determination of the fair value of their claim under the Canada Business Corporations Act. On September 26, 2019, the Quebec Superior Court rendered a decision fixing the fair value of the shares of the dissenting shareholders at C$ 1.99 per share, or $ 23 million (C$ 31 million) in aggregate, plus interest and an additional indemnity, for a total estimated at $ 33 million (C$ 44 million) payable in cash. Of the amount, $ 14 million (C$ 19 million) was payable immediately and paid on October 2, 2019. The remaining balance of $ 22 million (C$ 29 million) as of June 30, 2023 which includes accrued interest, is recorded in Trade and other payables in the Consolidated Balance Sheet. The Company has appealed the decision, therefore the payment of any additional consideration and its timing will depend on the outcome of the appeal. On November 13, 2019, a legal hypothec in the amount of $ 23 million (C$ 30 million) was registered on its Saint-Félicien (Quebec) immovable and movable property to secure the payment of any additional amounts following the outcome of the appeal. The hearing in this matter was held in November 2022 and the Company is awaiting a decision. PARTIAL WIND-UPS OF PENSION PLANS On June 12, 2012, the Company filed a motion for directives with the Quebec Superior Court, the court with jurisdiction in the creditor protection proceedings under the Companies’ Creditors Arrangement Act (Canada) (the “CCAA Creditor Protection Proceedings”), seeking an order to prevent pension regulators in each of Quebec, New Brunswick, and Newfoundland and Labrador from declaring partial wind-ups of pension plans relating to employees of former operations in New Brunswick, and Newfoundland and Labrador, or a declaration that any claim for accelerated reimbursements of deficits arising from a partial wind-up is a barred claim under the CCAA Creditor Protection Proceedings. The Company contends, among other things, that any such declaration, if issued, would be inconsistent with the Quebec Superior Court’s sanction order confirming the CCAA debtors’ CCAA Plan of Reorganization and Compromise, as amended, and the terms of the Company's emergence from the CCAA Creditor Protection Proceedings. A partial wind-up would likely shorten the period in which any deficit within those plans, which could reach up to C$ 150 million ($ 113 million), would have to be funded if the Company does not obtain the relief sought. The hearing in this matter is scheduled in the first quarter of 2024. SUPERFUND SITE On May 17, 2023, the EPA issued a General Notice of Liability and Demand for Reimbursement of Response Costs Expended at the Barite Hill/Nevada Goldfields Superfund Site (the “Notice of Liability”) to the Company. The Notice of Liability states that the EPA believes that the Company may be liable under Section 107(a) of the Comprehensive, Environmental Response, Compensation, and Liability Act (“CERCLA”) for costs the EPA has incurred at the Barite Hill/Nevada Goldfields Superfund Site (the “Site”). The approximate total response costs identified by the EPA in the Notice of Liability through January 19, 2023 was approximately $ 21 million. The Company believes that the EPA may also seek to hold it responsible for future remediation costs at the Site. The Company recognized a provision of $ 15 million, with respect to the EPA’s cause of action for past costs described in the Notice of Liability, in Other liabilities in the preliminary purchase price allocation. See Note 3 “Acquisition of businesses” for more information. The Company is in the process of evaluating the impact of the Notice of Liability and the provision may be adjusted during the measurement period. MENOMINEE FIRE Prior to the Acquisition, on October 6, 2022, a fire in a third-party owned warehouse that the Company leases adjacent to its Menominee recycled pulp mill damaged and, in some cases, destroyed, the warehouse, as well as certain of the Company’s property, plant and equipment and inventories, which resulted in the temporary idling of the facility. The mill was restarted during the first quarter of 2023, operating at limited capacity. The fire incident resulted in third-party damages, costs and expenses, in addition to damages to the Menominee facility. The Company currently does not believe it is probable that it will incur any material loss related to third party claims, nor could any possible loss contingency be reasonably estimable at the present time. The Company maintains insurance coverage, subject to customary deductibles and limits. Anticipated insurance recoveries related to losses and incremental costs incurred, in excess of the deductible, are recognized when receipt is probable. The anticipated insurance recoveries related to the fire, in excess of the net book value of the damaged operating assets and related to business interruption, will not be recognized until all contingencies related to the claim have been resolved. Prior to the Acquisition, total costs of $ 32 million, net of deductible, were determined probable to be recovered, of which $ 18 million were received. The balance of $ 14 million was recorded under Receivables on the Consolidated Balance Sheet at the acquisition date. For the three and six months ended June 30, 2023, the Company recognized direct costs of $ 13 million and $ 19 million, respectively, which were determined probable to be recovered and recognized an equivalent amount of recovery in reduction of Cost of sales. The Company also recognized a gain on disposition of property, plant and equipment of $ 4 million under Other operating loss (income), net on the Consolidated Statement of Earnings (Loss) and Comprehensive Income. F or the three and six months ended June 30, 2023, $ 27 million and $ 29 million, respectively, were received from the insurer, and as of June 30, 2023, an amount of $ 8 million was recorded under Receivables on the Consolidated Balance Sheet. The Company expects to continue to record additional costs and recoveries until the assessment is completed and insurance claims are fully settled. At this time, the Company expects that its total insurance claim will amount to approximately $ 90 million ($ 80 million, net of deductible). The timing and the amounts of additional insurance recoveries, including for business interruption, are not known at this time. |
Segment Disclosures
Segment Disclosures | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Disclosures | NOT E 14. _________________ SEGMENT DISCLOSURES Following the recent acquisition of Resolute Forest Products Inc. on March 1, 2023, the Company revised its segment structure and now operates as two reportable segments as described below, which also represent its two operating segments based on the Company's organizational structure: • Domtar – consists of the design, manufacturing, marketing and distribution of communication, specialty and packaging papers, as well as softwood, hardwood and fluff pulp and high quality airlaid and ultrathin laminated cores. • Resolute – consists of the design, manufacturing, marketing and distribution of market pulp, tissue, wood products and paper. An analysis and reconciliation of the Company’s business segment information to the respective information in the financial statements is as follows: For the three months ended For the six months ended June 30, June 30, June 30, June 30, SEGMENT DATA 2023 2022 2023 2022 $ $ $ $ Sales by segment Domtar 1,100 1,148 2,285 2,219 Resolute 635 — 875 — Total for reportable segments 1,735 1,148 3,160 2,219 Intersegment sales ( 5 ) — ( 7 ) — Consolidated sales 1,730 1,148 3,153 2,219 Sales by product group Communication papers 625 635 1,273 1,214 Specialty and packaging papers 266 189 495 364 Market pulp 411 324 800 641 Newsprint 99 — 141 — Tissue 57 — 77 — Wood 272 — 367 — Consolidated sales 1,730 1,148 3,153 2,219 Operating income (loss) from continuing operations Domtar 44 66 167 98 Resolute ( 23 ) — ( 57 ) — Consolidated operating income from continuing operations 21 66 110 98 Interest expense, net 58 24 103 45 Non-service components of net periodic benefit cost ( 4 ) ( 17 ) ( 8 ) ( 26 ) (Loss) earnings before income taxes ( 33 ) 59 15 79 Income tax (benefit) expense ( 9 ) 14 ( 65 ) 19 (Loss) earnings from continuing operations ( 24 ) 45 80 60 Earnings from discontinued operations, net of taxes 11 5 13 18 Net (loss) earnings ( 13 ) 50 93 78 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NO TE 15. _________________ RELATED PARTY TRANSACTIONS Following the acquisition of SPI, on June 29, 2023, the purchase price of $ 185 million was financed by the seller, an affiliated company with the issuance by Domtar of a $ 50 million unsecured note due July 15, 2023, a $ 35 million unsecured note due after June 30, 2031 and $ 100 million preferred shares redeemable by the holder after June 30, 2031, with Domtar having the option to satisfy the redemption with cash or Domtar securities. Refer to Note 3 “Acquisition of businesses” for details. The Company has other receivables with Paper Excellence and their affiliates of $ 11 million and $ 13 million at June 30, 2023 and December 31, 2022, respectively. The Company has other payables with Paper Excellence and their affiliates of $ 1 million and $ 111 million at June 30, 2023 and December 31, 2022, respectively. For the three and six months ended June 30, 2023, the Company recognized $ 2 million and $ 4 million, respectively (2022 – $ 3 million and $ 6 million, respectively) of management fees paid to an affiliated company. These costs are included in the Consolidated Statements of Earnings (Loss) and Comprehensive Income under Selling, general and administrative expense. |
Acquisition of Businesses (Tabl
Acquisition of Businesses (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | Fair value of net assets acquired at the date of acquisition - Preliminary values Receivables $ 309 Inventories 525 Prepaid expenses 30 Other current assets 13 Property, plant and equipment 672 Operating lease right-of-use assets 47 Intangible assets, net (1) 69 Deferred income tax assets 775 Other assets (2) 187 Assets held for sale 265 Total assets 2,892 Less: Assumed Liabilities Trade and other payables 544 Operating lease liabilities (including short-term portion) 49 Long-term debt (including short-term portion) 312 Pension and other post-retirement benefit obligations 643 Other liabilities 87 Liabilities held for sale 41 Total liabilities 1,676 Fair value of net assets acquired at the date of acquisition 1,216 (1) The Company identified $ 69 million of off-market contracts, of which $ 10 million are being amortized over a weighted-average useful life of 9.5 years. (2) Other assets include $ 132 million of deposits and $ 21 million of equity method investments. |
Schedule of Pro Forma Consolidated Statements of Earnings and Comprehensive Income | The following represents the pro forma Consolidated Statements of Earnings (Loss) and Comprehensive Income if Resolute had been included in the Company’s consolidated results for the six months ended June 30, 2023 and for the three and six months ended June 30, 2022: For the For the June 30, June 30, June 30, 2022 2023 2022 (Unaudited) (Unaudited) $ $ $ Sales 2,094 3,602 4,052 Net earnings 161 157 280 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Schedule of Disposal Groups, Including Discontinued Operations | Major components of earnings from discontinued operations: For the three months ended For the six months ended June 30, June 30, June 30, June 30, 2023 2022 2023 2022 $ $ $ $ Sales 71 66 97 154 Operating expenses Cost of sales, excluding depreciation and amortization 57 52 79 119 Transaction costs — 6 — 9 Other operating loss, net — — 1 — 57 58 80 128 Operating income 14 8 17 26 Net gain on disposition of discontinued operations — — — — Earnings from discontinued operations before 14 8 17 26 Income tax expense 3 3 4 8 Net earnings from discontinued operations 11 5 13 18 Major classes of assets and liabilities classified as held for sale in the accompanying Consolidated Balance Sheets were as follows: At June 30, 2023 $ Assets Receivables 84 Inventories 93 Prepaid expenses 2 Long-term assets 351 Total assets of the disposal groups classified as held for sale on the (1) 530 Liabilities Trade and other payables 59 Operating lease liabilities 5 Other liabilities and deferred credits 8 Total liabilities of the disposal groups classified as held for sale on the (1) 72 (1) Total assets and liabilities of the Thunder Bay and Dryden disposal groups are classified in current assets and liabilities, respectively, in the Company’s Consolidated Balance Sheet. Cash Flows from Discontinued Operations: For the six months ended June 30, June 30, 2023 2022 $ $ Cash flows provided from operating activities 15 39 Cash flows used for investing activities ( 4 ) ( 3 ) |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities and Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Fair Value of Financial Instruments | The following tables present information about the Company’s financial assets and financial liabilities measured at fair value on a recurring basis (except Long-term debt, see (b) and (c) below) at June 30, 2023 and December 31, 2022, in accordance with the accounting standards for fair value measurements and disclosures and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. Fair Value of financial instruments at: June 30, 2023 Quoted prices in Significant Significant Balance sheet classification $ $ $ $ Derivatives designated as Asset derivatives Currency derivatives 7 — 7 — (a) Prepaid expenses Natural gas swap contracts 1 — 1 — (a) Prepaid expenses Currency derivatives 3 — 3 — (a) Other assets Total Assets 11 — 11 — Liabilities derivatives Currency derivatives 4 — 4 — (a) Trade and other payables Natural gas swap contracts 1 — 1 — (a) Trade and other payables Total Liabilities 5 — 5 — Other Instruments: Long-term debt due 67 — 67 — (b) Long-term debt due within Long-term debt 2,243 — 2,243 — (c) Long-term debt Fair Value of financial instruments at: December 31, 2022 Quoted prices in Significant Significant Balance sheet classification $ $ $ $ Derivatives designated as Asset derivatives Currency derivatives 2 — 2 — (a) Prepaid expenses Natural gas swap contracts 4 — 4 — (a) Prepaid expenses Currency derivatives 1 — 1 — (a) Other assets Total Assets 7 — 7 — Liabilities derivatives Currency derivatives 16 — 16 — (a) Trade and other payables Natural gas swap contracts 3 — 3 — (a) Trade and other payables Currency derivatives 3 — 3 — (a) Other liabilities and deferred Total Liabilities 22 — 22 — Other Instruments: Long-term debt due within 47 — 47 — (b) Long-term debt due within Long-term debt 1,321 — 1,321 — (c) Long-term debt (a) Fair values of the Company’s derivatives are classified under Level 2 (inputs that are observable; directly or indirectly) as it is measured as follows: - For currency derivatives: Foreign currency forward and option contracts are valued using standard valuation models. Interest rates, forward market rates and volatility are used as inputs for such valuation techniques. - For natural gas contracts: Fair value is measured using the discounted difference between contractual rates and quoted market future rates. (b) Fair value of the Company’s long-term debt is measured by comparison to market prices of its debt. The Company’s long-term debt is not carried at fair value on the Consolidated Balance Sheets at June 30, 2023 and December 31, 2022 . The carrying value of the Company’s long-term debt due within one year is $ 67 million and $ 47 million at June 30, 2023 and December 31, 2022, respectively. (c) The carrying value of the Company’s long-term debt is $ 2,404 million and $ 1,503 million at June 30, 2023 and December 31, 2022 , respectively. |
Pension Plans and Other Post-_2
Pension Plans and Other Post-Retirement Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Net Periodic Benefit Cost for Pension Plans and Other Post-Retirement Benefit Plans | Components of net periodic benefit cost for pension plans and other post-retirement benefit plans: For the three months ended For the six months ended June 30, 2023 June 30, 2023 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 8 — 12 — Interest expense 55 2 80 2 Expected return on plan assets ( 61 ) — ( 90 ) — Net periodic benefit cost 2 2 2 2 For the three months ended For the six months ended June 30, 2022 June 30, 2022 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 5 — 11 — Interest expense 9 — 18 1 Expected return on plan assets ( 18 ) — ( 37 ) — Settlement gain (1) ( 8 ) — ( 8 ) — Net periodic benefit cost ( 12 ) — ( 16 ) 1 (1) During the second quarter of 2022, the Company entered into agreements with insurance companies to purchase group annuity buy-out contracts and transfer approximately $ 105 million (CDN $ 135 million) of its Quebec, Canada defined benefit plans' projected benefit obligations and $ 85 million of its U.S. defined benefit plans' projected benefit obligations. The transactions closed in April 2022 for Canada and in June 2022 for the U.S. and were funded with pension plan assets. Additionally, the Company entered into agreements with existing insurers to convert $ 141 million (CDN $ 180 million) of existing buy-in annuity contracts to buy-out annuity contracts to complete the full transfer of these obligations. These annuity buy-out transactions transferred responsibility for pension benefits for approximately 3,253 retirees and their beneficiaries. Settlement accounting rules required a remeasurement of the plans as of April 30, 2022 for Canada and June 30, 2022 for the U.S. and the Company recognized a non-cash pension settlement gain of $ 8 million before tax in the second quarter of 2022. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The following table presents the components of inventories: June 30, December 31, 2023 2022 $ $ Work in process and finished goods 717 400 Raw materials 265 147 Operating and maintenance supplies 319 171 1,301 718 |
Other Assets (Tables)
Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Components of Other Assets | The following table presents the components of other assets: June 30, December 31, 2023 2022 $ $ Pension asset - defined benefit pension plans 247 219 Countervailing duty and anti-dumping duty cash deposits on softwood lumber 145 — Other 69 32 461 251 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Components of Long-Term Debt | Par June 30, December 31, Maturity Amount Currency 2023 2022 $ $ $ Unsecured notes 6.25 % Notes 2042 116 USD 121 121 6.75 % Notes 2044 150 USD 156 157 Senior secured notes 6.75 % Notes 2028 642 USD 642 642 ABL Revolving Credit Facility 2028 300 USD 300 — First Lien Term Loan 2028 353 USD 350 639 Farm Credit Term Loan A 2030 658 USD 652 — Farm Credit Term Loan B 2028 276 USD 276 — Other USD — 14 Finance lease obligations 2023 - 2028 5 4 2,502 1,577 Less: Unamortized debt issuance costs 31 27 Less: Due within one year 67 47 2,404 1,503 |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Loss by Component (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Loss by Component | The following table presents the changes in Accumulated other comprehensive loss by component (1) for the six months ended June 30, 2023 and the year ended December 31, 2022: Net derivative Pension items (2) Post-retirement (2) Foreign currency Total $ $ $ $ $ Balance at December 31, 2021 — 17 ( 1 ) 8 24 Natural gas swap contracts 14 N/A N/A N/A 14 Currency options ( 2 ) N/A N/A N/A ( 2 ) Foreign exchange forward contracts ( 16 ) N/A N/A N/A ( 16 ) Net (loss) gain N/A ( 11 ) 9 N/A ( 2 ) Foreign currency items N/A N/A N/A ( 71 ) ( 71 ) Other comprehensive (loss) income ( 4 ) ( 11 ) 9 ( 71 ) ( 77 ) Amounts reclassified from Accumulated ( 8 ) ( 7 ) ( 1 ) — ( 16 ) Net current period other comprehensive ( 12 ) ( 18 ) 8 ( 71 ) ( 93 ) Balance at December 31, 2022 ( 12 ) ( 1 ) 7 ( 63 ) ( 69 ) Natural gas swap contracts ( 5 ) N/A N/A N/A ( 5 ) Currency options 1 N/A N/A N/A 1 Foreign exchange forward contracts 8 N/A N/A N/A 8 Net gain N/A — — N/A — Foreign currency items N/A N/A N/A 26 26 Other comprehensive income 4 — — 26 30 Amounts reclassified from Accumulated 11 — — — 11 Net current period other comprehensive 15 — — 26 41 Balance at June 30, 2023 3 ( 1 ) 7 ( 37 ) ( 28 ) (1) All amounts are after tax. Amounts in parentheses indicate losses. (2) The projected benefit obligation is actuarially determined on an annual basis as of December 31. |
Schedule of Reclassifications Out of Accumulated Other Comprehensive Loss | The following tables present reclassifications out of Accumulated other comprehensive loss: Details about Accumulated other comprehensive loss components Amounts reclassified from For the three months ended June 30, June 30, 2023 2022 $ $ Net derivative (losses) gains on cash flow hedge Natural gas swap contracts (1) — 5 Currency options and forwards (1) ( 4 ) 1 Total before tax ( 4 ) 6 Tax benefit (expense) 1 ( 2 ) Net of tax ( 3 ) 4 Amortization of defined benefit pension items Amortization of net actuarial gain (2) (3) — 8 Total before tax — 8 Tax expense — ( 2 ) Net of tax — 6 Amortization of other post-retirement benefit items Discontinued operations — 1 Total before tax — 1 Tax expense — — Net of tax — 1 Amounts reclassified from For the six months ended June 30, June 30, 2023 2022 $ $ Net derivatives (losses) gains on cash flow hedge Natural gas swap contracts (1) ( 7 ) 6 Currency options and forwards (1) ( 8 ) 2 Total before tax ( 15 ) 8 Tax benefit (expense) 4 ( 2 ) Net of tax ( 11 ) 6 Amortization of defined benefit pension items Amortization of net actuarial gain (2) (3) — 8 Total before tax — 8 Tax expense — ( 2 ) Net of tax — 6 Amortization of other post-retirement benefit items Discontinued operations — 1 Total before tax — 1 Tax expense — — Net of tax — 1 (1) These amounts are included in Cost of Sales in the Consolidated Statements of Earnings (Loss) and Comprehensive Income. (2) These amounts are included in the computation of net periodic benefit cost (see Note 6 “Pension Plans and Other Post-Retirement Benefit Plans” for more details). (3) Includes the non-cash pension settlement gain of $ 8 million recognized in the second quarter of 2022. |
Segment Disclosures (Tables)
Segment Disclosures (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Analysis and Reconciliation of Reportable Segment Information | An analysis and reconciliation of the Company’s business segment information to the respective information in the financial statements is as follows: For the three months ended For the six months ended June 30, June 30, June 30, June 30, SEGMENT DATA 2023 2022 2023 2022 $ $ $ $ Sales by segment Domtar 1,100 1,148 2,285 2,219 Resolute 635 — 875 — Total for reportable segments 1,735 1,148 3,160 2,219 Intersegment sales ( 5 ) — ( 7 ) — Consolidated sales 1,730 1,148 3,153 2,219 Sales by product group Communication papers 625 635 1,273 1,214 Specialty and packaging papers 266 189 495 364 Market pulp 411 324 800 641 Newsprint 99 — 141 — Tissue 57 — 77 — Wood 272 — 367 — Consolidated sales 1,730 1,148 3,153 2,219 Operating income (loss) from continuing operations Domtar 44 66 167 98 Resolute ( 23 ) — ( 57 ) — Consolidated operating income from continuing operations 21 66 110 98 Interest expense, net 58 24 103 45 Non-service components of net periodic benefit cost ( 4 ) ( 17 ) ( 8 ) ( 26 ) (Loss) earnings before income taxes ( 33 ) 59 15 79 Income tax (benefit) expense ( 9 ) 14 ( 65 ) 19 (Loss) earnings from continuing operations ( 24 ) 45 80 60 Earnings from discontinued operations, net of taxes 11 5 13 18 Net (loss) earnings ( 13 ) 50 93 78 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) $ in Millions | Jun. 29, 2023 USD ($) |
Skookumchuck Pulp Inc | |
Business Acquisition [Line Items] | |
Consideration transferred | $ 185 |
Acquisition of Businesses - Add
Acquisition of Businesses - Additional Information (Detail) - USD ($) | 3 Months Ended | 4 Months Ended | 6 Months Ended | ||||||
Jun. 29, 2023 | Mar. 01, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | [1] | Jun. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | [1] | |
Business Acquisition [Line Items] | |||||||||
Deemed dividend | $ 55,000,000 | $ 55,000,000 | |||||||
Transaction related costs | 7,000,000 | $ 3,000,000 | 63,000,000 | $ 6,000,000 | |||||
Amount of sales | 1,730,000,000 | 1,148,000,000 | 3,153,000,000 | 2,219,000,000 | |||||
Net income (loss) | (13,000,000) | $ 50,000,000 | 93,000,000 | $ 78,000,000 | |||||
Increase in deferred income tax assets | 291,000,000 | ||||||||
Decrease in property, plant and equipment | (241,000,000) | ||||||||
Decrease in other assets | (20,000,000) | ||||||||
Estimated litigation provision | 15,000,000 | $ 15,000,000 | 15,000,000 | ||||||
Decrease in off-market long-term contracts | (8,000,000) | ||||||||
Deferred income tax assets | 775,000,000 | 775,000,000 | 775,000,000 | ||||||
Skookumchuck Pulp Inc [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 185,000,000 | ||||||||
Deemed dividend | 55,000,000 | ||||||||
Carrying value of net assets transferred | 130,000,000 | ||||||||
Transaction related costs | 1,000,000 | 1,000,000 | |||||||
Skookumchuck Pulp Inc [Member] | Non-interest Bearing Promissory Note Due July 15, 2023 [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | 50,000,000 | ||||||||
Skookumchuck Pulp Inc [Member] | Promissory Note Bearing Interest At 8.50% Due After June 30 2031 [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 35,000,000 | ||||||||
Bearing interest rate, Percentage | 8.50% | ||||||||
Skookumchuck Pulp Inc [Member] | Redeemable Series B Preferred Shares [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 100,000,000 | ||||||||
Skookumchuck Pulp Inc [Member] | Redeemable Series B Preferred Shares [Member] | Interest At 9.75% Due After June 2031 [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 100,000,000 | ||||||||
Bearing interest rate, Percentage | 9.75% | ||||||||
Forest Products Inc [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 1,696,000,000 | ||||||||
Business Acquisition, Share Price | $ 20.50 | ||||||||
Potential duty deposit refunds | $ 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | |||||
Fair value of contingent consideration of aquisition | 118,000,000 | ||||||||
Cash Acquired | 480,000,000 | ||||||||
Contingent value right on softwood lumber duty deposit refunds | $ 118,000,000 | ||||||||
Transaction related costs | $ 2,000,000 | $ 55,000,000 | |||||||
Amount of sales | 875,000,000 | ||||||||
Net income (loss) | $ (30,000,000) | ||||||||
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Acquisition of Businesses - Sch
Acquisition of Businesses - Schedule of Assets Acquired and Liabilities Assumed (Detail) $ in Millions | Jun. 30, 2023 USD ($) |
Business Combinations [Abstract] | |
Receivables | $ 309 |
Inventories | 525 |
Prepaid expenses | 30 |
Other current assets | 13 |
Property, plant and equipment | 672 |
Operating lease right-of-use assets | 47 |
Intangible assets, net | 69 |
Deferred income tax assets | 775 |
Other assets | 187 |
Assets held for sale | 265 |
Total assets | 2,892 |
Less: Assumed Liabilities | |
Trade and other payables | 544 |
Operating lease liabilities (including short-term portion) | 49 |
Long-term debt (including short-term portion) | 312 |
Pension and other post-retirement benefit obligations | 643 |
Other liabilities | 87 |
Liabilities held for sale | 41 |
Total liabilities | 1,676 |
Fair value of net assets acquired at the date of acquisition | $ 1,216 |
Acquisition of Businesses - S_2
Acquisition of Businesses - Schedule of Assets Acquired and Liabilities Assumed (Parenthetical) (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Business Acquisition [Line Items] | |
Intangible assets | $ 69 |
Deposits | 132 |
Equity method investments | 21 |
Off-Market Contracts [Member] | |
Business Acquisition [Line Items] | |
Intangible assets | 69 |
Finite-lived intangible assets subject to amortization | $ 10 |
Weighted-average useful life | 9 years 6 months |
Acquisition of Businesses - S_3
Acquisition of Businesses - Schedule of Pro Forma Consolidated Statements of Earnings and Comprehensive Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Business Combinations [Abstract] | |||
Sales | $ 2,094 | $ 3,602 | $ 4,052 |
Net earnings | $ 161 | $ 157 | $ 280 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
May 26, 2023 USD ($) | Feb. 26, 2023 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) Purchaser Mills | Jun. 30, 2022 USD ($) | Jun. 01, 2022 USD ($) | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||||
Number of mills classified as held for sale | Mills | 2 | ||||||
Number of independent purchasers | Purchaser | 2 | ||||||
Transaction costs | $ 6 | $ 9 | |||||
Sale of Mill and Related Assets | Kamloops, British Columbia Mill | |||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||||
Purchase price | $ 243 | ||||||
Sale of Mill and Related Assets | Thunder Bay Pulp And Paper Mill | |||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||||
Transaction closed date | Aug. 01, 2023 | ||||||
Transaction costs | $ 2 | $ 2 | |||||
Purchase price | $ 219 | ||||||
Sale of Mill and Related Assets | Dryden, Ontario Mill | |||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||||
Transaction closed date | Aug. 01, 2023 | ||||||
Transaction costs | $ 2 | $ 5 | |||||
Purchase price | $ 240 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Major Components of Earnings from Discontinued Operations (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |||
Disposal Group Not Discontinued Operation Income Statement Disclosures [Abstract] | ||||||
Sales | $ 71 | $ 66 | $ 97 | $ 154 | ||
Operating expenses | ||||||
Cost of sales, excluding depreciation and amortization | 57 | 52 | 79 | 119 | ||
Transaction costs | 6 | 9 | ||||
Other operating loss, net | 1 | |||||
Operating expenses | 57 | 58 | 80 | 128 | ||
Operating income | 14 | 8 | 17 | 26 | ||
Earnings from discontinued operations before income taxes | 14 | 8 | 17 | 26 | ||
Income tax expense | 3 | 3 | 4 | 8 | ||
Net earnings from discontinued operations | $ 11 | $ 5 | [1] | $ 13 | $ 18 | [1] |
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Discontinued Operations - Sch_2
Discontinued Operations - Schedule of Major Classes of Assets and Liabilities Classified as Held for Sale in Balance Sheets (Detail) $ in Millions | Jun. 30, 2023 USD ($) |
Assets | |
Receivables | $ 84 |
Inventories | 93 |
Prepaid expenses | 2 |
Long-term assets | 351 |
Total assets of the disposal group classified as held for sale on the Consolidated Balance Sheets | 530 |
Liabilities | |
Trade and other payables | 59 |
Operating lease liabilities | 5 |
Other liabilities and deferred credits | 8 |
Total liabilities of the disposal group classified as held for sale on the Consolidated Balance Sheets | $ 72 |
Discontinued Operations - Sch_3
Discontinued Operations - Schedule of Cash Flows from Discontinued Operations (Detail) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Net Cash Provided By Used In Discontinued Operations [Abstract] | ||
Cash flows provided from operating activities | $ 15 | $ 39 |
Cash flows provided from (used for) investing activities | $ (4) | $ (3) |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities and Fair Value Measurement - Additional Information (Detail) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 USD ($) Customer | Dec. 31, 2022 USD ($) Customer | |
Derivative [Line Items] | ||
Number of major customers | Customer | 1 | 2 |
Maximum [Member] | Canadian Subsidiary [Member] | Canadian Dollars [Member] | ||
Derivative [Line Items] | ||
Length of time current hedges cover | 24 months | |
Forecasted Natural Gas and Oil Purchases [Member] | Maximum [Member] | ||
Derivative [Line Items] | ||
Length of time current hedges cover | 6 months | |
Foreign Currency Investment [Member] | ||
Derivative [Line Items] | ||
Length of time current hedges cover | 3 years | |
Pulp and Paper Segment Customer One [Member] | ||
Derivative [Line Items] | ||
Receivables from major customers | $ | $ 77 | $ 144 |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Pulp and Paper Segment Customer One [Member] | ||
Derivative [Line Items] | ||
Maximum percentage of receivables a single customer represents | 10% | 26% |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities and Fair Value Measurement - Fair Value of Financial Instruments (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Derivative [Line Items] | ||
Total Assets | $ 11 | $ 7 |
Total Liabilities | 5 | 22 |
Long-term debt | 2,243 | 1,321 |
Long Term Debt Due Within One Year | ||
Derivative [Line Items] | ||
Long-term debt | 67 | 47 |
Currency Derivatives [Member] | Prepaid Expenses [Member] | ||
Derivative [Line Items] | ||
Total Assets | 7 | 2 |
Currency Derivatives [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 4 | 16 |
Currency Derivatives [Member] | Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 3 | |
Currency Derivatives [Member] | Other Assets [Member] | ||
Derivative [Line Items] | ||
Total Assets | 3 | 1 |
Natural Gas Swap Contracts [Member] | Prepaid Expenses [Member] | ||
Derivative [Line Items] | ||
Total Assets | 1 | 4 |
Natural Gas Swap Contracts [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 1 | 3 |
Fair Value, Inputs, Level 2 | ||
Derivative [Line Items] | ||
Total Assets | 11 | 7 |
Total Liabilities | 5 | 22 |
Long-term debt | 2,243 | 1,321 |
Fair Value, Inputs, Level 2 | Long Term Debt Due Within One Year | ||
Derivative [Line Items] | ||
Long-term debt | 67 | 47 |
Fair Value, Inputs, Level 2 | Currency Derivatives [Member] | Prepaid Expenses [Member] | ||
Derivative [Line Items] | ||
Total Assets | 7 | 2 |
Fair Value, Inputs, Level 2 | Currency Derivatives [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 4 | 16 |
Fair Value, Inputs, Level 2 | Currency Derivatives [Member] | Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 3 | |
Fair Value, Inputs, Level 2 | Currency Derivatives [Member] | Other Assets [Member] | ||
Derivative [Line Items] | ||
Total Assets | 3 | 1 |
Fair Value, Inputs, Level 2 | Natural Gas Swap Contracts [Member] | Prepaid Expenses [Member] | ||
Derivative [Line Items] | ||
Total Assets | 1 | 4 |
Fair Value, Inputs, Level 2 | Natural Gas Swap Contracts [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | $ 1 | $ 3 |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activities and Fair Value Measurement - Fair Value of Financial Instruments (Parenthetical) (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | |
Derivative [Line Items] | |||
Less: Due within one year | $ 67 | $ 47 | [1] |
The carrying value of the Company's long-term debt | 2,404 | 1,503 | |
Long Term Debt Due Within One Year | |||
Derivative [Line Items] | |||
Less: Due within one year | $ 67 | $ 47 | |
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Pension Plans and Other Post-_3
Pension Plans and Other Post-Retirement Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 01, 2023 | Dec. 31, 2022 | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||||
Pension expense | $ 13 | $ 8 | $ 26 | $ 20 | ||
Defined contribution plan, expected contribution amount, remainder of year | 26 | 26 | ||||
Pension and post-retirement benefit plans, assets | 247 | 247 | $ 219 | |||
Pension Plans [Member] | ||||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||||
Plan contributions | 16 | 2 | 22 | 4 | ||
Defined benefit plan, expected cash contributions, remainder of year | 32 | 32 | ||||
Other Post-Retirement Benefit Plans [Member] | ||||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||||
Plan contributions | 4 | $ 1 | 6 | $ 2 | ||
Defined benefit plan, expected cash contributions, remainder of year | $ 7 | $ 7 | ||||
Forest Products Inc [Member] | ||||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||||
Pension and post-retirement benefit plans, assets | $ 19 | |||||
Pension and post-retirement benefit plans, liabilities | 656 | |||||
Fair value of pension fund assets | 3,029 | |||||
Fair value of pension fund liabilities | $ 3,666 |
Pension Plans and Other Post-_4
Pension Plans and Other Post-Retirement Benefit Plans - Components of Net Periodic Benefit Cost for Pension Plans and Other Post-Retirement Benefit Plans (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Settlement gain | $ (8) | $ (8) | ||
Pension Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 8 | 5 | $ 12 | 11 |
Interest expense | 55 | 9 | 80 | 18 |
Expected return on plan assets | (61) | (18) | (90) | (37) |
Settlement gain | (8) | (8) | ||
Net periodic benefit cost | $ 2 | $ (12) | $ 2 | $ (16) |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) Excluding Service Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Net Periodic Defined Benefits Expense Reversal Of Expense Excluding Service Cost Component | Net Periodic Defined Benefits Expense Reversal Of Expense Excluding Service Cost Component | Net Periodic Defined Benefits Expense Reversal Of Expense Excluding Service Cost Component | Net Periodic Defined Benefits Expense Reversal Of Expense Excluding Service Cost Component |
Other Post-Retirement Benefit Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest expense | $ 2 | $ 2 | $ 1 | |
Net periodic benefit cost | $ 2 | $ 2 | $ 1 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) Excluding Service Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Net Periodic Defined Benefits Expense Reversal Of Expense Excluding Service Cost Component | Net Periodic Defined Benefits Expense Reversal Of Expense Excluding Service Cost Component | Net Periodic Defined Benefits Expense Reversal Of Expense Excluding Service Cost Component | Net Periodic Defined Benefits Expense Reversal Of Expense Excluding Service Cost Component |
Pension Plans and Other Post-_5
Pension Plans and Other Post-retirement Benefit Plans - Components of Net Periodic Benefit Cost for Pension Plans and Other Post-Retirement Benefit Plans (Parenthetical) (Details) $ in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 USD ($) Employees | Jun. 30, 2022 CAD ($) Employees | Jun. 30, 2022 USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
Retirees and their beneficiaries | Employees | 3,253 | 3,253 | |
Non-cash pension settlement gain | $ 8 | $ 8 | |
Buy-out Contracts [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Annuity buy-out contracts and transfer amount | 105 | $ 135 | |
Defined benefit plans projected benefit obligations | 85 | $ 85 | |
Quebec [Member] | Buy-in Annuity Contracts to Buy-Out Annuity Contracts [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Annuity buy-out contracts and transfer amount | $ 141 | $ 180 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |||
Income Tax Disclosure [Abstract] | ||||||
Income tax (benefit) expense | $ (9) | $ 14 | [1] | $ (65) | $ 19 | [1] |
Current income tax expense (benefit) | (5) | 23 | 6 | 26 | ||
Deferred income tax expense (benefit) | (4) | $ (9) | (71) | (7) | ||
Tax payments, net of tax refunds | $ 16 | $ 66 | $ 11 | [2] | ||
Effective income tax rate | 27% | 24% | (433.00%) | 24% | ||
Unfavorable deferred tax impact related to amalgamation with company | $ 5 | |||||
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Inventories - Components of Inv
Inventories - Components of Inventories (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |||
Work in process and finished goods | $ 717 | $ 400 | |
Raw materials | 265 | 147 | |
Operating and maintenance supplies | 319 | 171 | |
Total inventories | $ 1,301 | $ 718 | [1] |
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Other Assets - Components of Ot
Other Assets - Components of Other Assets (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Pension asset - defined benefit pension plans | $ 247 | $ 219 | |
Countervailing duty and anti-dumping duty cash deposits on softwood lumber | 145 | ||
Other | 69 | 32 | |
Other assets, noncurrent | $ 461 | $ 251 | [1] |
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Other Assets - Additional Infor
Other Assets - Additional Information (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Mar. 01, 2023 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Countervailing duty and Anti-dumping duty cash deposits on softwood lumber paid | $ 584 | $ 563 |
Asset Conversion Costs - Additi
Asset Conversion Costs - Additional Information (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) T | Jun. 30, 2022 USD ($) | |||
Restructuring Cost And Reserve [Line Items] | ||||||
Asset conversion costs (NOTE 10) | $ 33 | $ 12 | [1] | $ 63 | $ 25 | [1] |
Conversion Of Kingsport Tennessee Mill | Kingsport Tennessee Mill | ||||||
Restructuring Cost And Reserve [Line Items] | ||||||
Forecasted production of high quality recycled linerboard and medium | T | 600,000 | |||||
Asset conversion costs (NOTE 10) | $ 33 | $ 12 | $ 63 | $ 25 | ||
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Long-Term Debt - Components of
Long-Term Debt - Components of Long-Term Debt (Detail) - USD ($) $ in Millions | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 01, 2023 | Dec. 31, 2022 | Jan. 07, 2022 | ||
Debt Instrument [Line Items] | |||||
Finance lease obligations | $ 5 | $ 4 | |||
Long-term debt | 2,502 | 1,577 | |||
Less: Unamortized debt issuance costs | 31 | 27 | |||
Less: Due within one year | 67 | 47 | [1] | ||
Long-term debt, excluding current maturities | $ 2,404 | 1,503 | [1] | ||
6.25% Notes | 2042 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, Maturity | 2042 | ||||
Par Amount | $ 116 | ||||
Unsecured notes | $ 121 | 121 | |||
6.75% Notes | 2044 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, Maturity | 2044 | ||||
Par Amount | $ 150 | ||||
Unsecured notes | 156 | 157 | |||
6.75% Notes | 2028 | |||||
Debt Instrument [Line Items] | |||||
Par Amount | 642 | ||||
Senior secured notes | $ 642 | 642 | |||
Other | |||||
Debt Instrument [Line Items] | |||||
Loan | 14 | ||||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, Maturity | 2028 | ||||
Par Amount | $ 300 | ||||
ABL Revolving Credit Facility | $ 300 | ||||
First Lien Term Loan | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, Maturity | 2028 | ||||
Par Amount | $ 353 | $ 127 | |||
First Lien Term Loan | $ 350 | $ 639 | |||
Farm Credit Term Loan A | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, Maturity | 2030 | ||||
Par Amount | $ 658 | $ 666 | |||
Farm Credit Term Loan | $ 652 | ||||
Farm Credit Term Loan B | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, Maturity | 2028 | ||||
Par Amount | $ 276 | $ 283 | |||
Farm Credit Term Loan | $ 276 | ||||
Senior Secured Notes | 6.75% Notes | 2028 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, Maturity | 2028 | ||||
Finance lease obligations | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, Maturity | 2023 | ||||
Finance lease obligations | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, Maturity | 2028 | ||||
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Long-Term Debt - Components o_2
Long-Term Debt - Components of Long-Term Debt (Parenthetical) (Detail) | Jun. 30, 2023 | Dec. 31, 2022 |
6.25% Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate | 6.25% | 6.25% |
6.75% Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate | 6.75% | 6.75% |
6.75% Notes | Senior Secured Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate | 6.75% | 6.75% |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 11 Months Ended | ||||
Mar. 01, 2023 | Jan. 07, 2022 | Jan. 03, 2022 | Jun. 30, 2023 | Jun. 30, 2023 | Nov. 30, 2021 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||||||
Borrowings under Farm Credit Term Loan A | $ 658,000,000 | $ 658,000,000 | |||||
Borrowings under Farm Credit Term Loan B | $ 276,000,000 | $ 276,000,000 | |||||
Preimum unsecured debt notes | $ 3,000,000 | ||||||
Unsecured notes, accrued interest paid | $ 6,000,000 | ||||||
2028 | Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Repayments of Secured Debt | $ 133,000,000 | ||||||
Senior Secured Notes , Accrued Interest Paid | $ 2,000,000 | ||||||
Asset Based Lending Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument Covenant Description | The ABL Revolving Credit Facility, when specified excess availability is less than the greater of $87.5 million and 10% of the lesser of the borrowing base and maximum borrowing capacity, requires the maintenance of a fixed charge coverage ratio of 1.00 to 1.00 at the end of each fiscal quarter for the trailing twelve month period. This covenant did not apply as at June 30, 2023. | ||||||
6.75% Notes | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, interest rate | 6.75% | 6.75% | 6.75% | ||||
6.75% Notes | Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, interest rate | 6.75% | 6.75% | 6.75% | ||||
6.75% Notes | 2044 | |||||||
Debt Instrument [Line Items] | |||||||
Borrowings | $ 150,000,000 | $ 150,000,000 | |||||
Long-term debt, interest rate | 6.75% | 6.75% | 6.75% | ||||
Debt Instrument, Face Amount | $ 100,000,000 | ||||||
6.75% Notes | 2028 | |||||||
Debt Instrument [Line Items] | |||||||
Borrowings | $ 642,000,000 | $ 642,000,000 | |||||
6.75% Notes | 2028 | Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, interest rate | 6.75% | ||||||
6.25% Notes | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, interest rate | 6.25% | 6.25% | 6.25% | ||||
6.25% Notes | 2042 | |||||||
Debt Instrument [Line Items] | |||||||
Borrowings | $ 116,000,000 | $ 116,000,000 | |||||
Long-term debt, interest rate | 6.25% | 6.25% | 6.25% | ||||
Debt Instrument, Face Amount | $ 134,000,000 | ||||||
4.875% Notes | 2026 | Forest Products Inc [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, interest rate | 4.875% | ||||||
Principal amount of resolute notes | $ 300,000,000 | ||||||
Notes outstanding | $ 300,000,000 | $ 0 | $ 0 | ||||
Debt instrument, redemption, description | On February 14, 2023, Resolute delivered notice of redemption to holders of the 4.875% senior notes due 2026. The redemption notice provided for the full redemption of $300 million principal amount of the notes on March 1, 2023 at a redemption price equal to 102.438% of the principal amount of the notes redeemed, plus accrued and unpaid interest. The redemption of the notes was subject to the consummation of the Acquisition. | ||||||
Debt instrument, redemption price, percentage of principal amount redeemed plus accrued and unpaid interest | 102.438% | ||||||
Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
ABL Revolving Credit Facility | 300,000,000 | $ 300,000,000 | |||||
Borrowings | 300,000,000 | $ 300,000,000 | |||||
Revolving Credit Facility | Asset Based Lending Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
ABL Revolving Credit Facility | $ 210,000,000 | ||||||
Debt instrument maturity date | Mar. 01, 2028 | Nov. 30, 2026 | |||||
Line of Credit Facility, Current Borrowing Capacity | 300,000,000 | $ 300,000,000 | |||||
Letters of Credit Outstanding, Amount | 179,000,000 | 179,000,000 | |||||
Unused borrowing capacity | 521,000,000 | $ 521,000,000 | |||||
Farm Credit Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Borrowings | 949,000,000 | ||||||
Amortization of borrowings in equal quarterly installments | 5% | ||||||
Farm Credit Term Loan A | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument maturity date | Mar. 01, 2030 | ||||||
Borrowings | 666,000,000 | 658,000,000 | $ 658,000,000 | ||||
Repayments of Debt | 8,000,000 | ||||||
Debt instrument basis spread on base rate | 5% | ||||||
Farm Credit Term Loan B | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument maturity date | Nov. 30, 2028 | ||||||
Borrowings | 283,000,000 | 276,000,000 | $ 276,000,000 | ||||
Repayments of Debt | 3,000,000 | ||||||
Debt instrument basis spread on base rate | 4.75% | ||||||
Farm Credit Term Loan, First Lien Term Loan Facility and Senior Secured Notes | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of net cash proceeds of certain assets for term loan prepayments | 100% | ||||||
Farm Credit Term Loan and First Lien Term Loan Facility | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of net cash proceeds from certain debt issuance for term loan prepayments | 100% | ||||||
Percentage of excess cash flow for term loan prepayments | 50% | ||||||
First Lien Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Borrowings | $ 127,000,000 | 353,000,000 | $ 353,000,000 | ||||
Repayments of Debt | $ 283,000,000 | ||||||
Repayment of quarterly debt amortization | 4,000,000 | ||||||
Drawings under the term loan facility | $ 353,000,000 | $ 353,000,000 | |||||
SOFR | Farm Credit Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, interest rate | 0.75% | 0.75% | |||||
SOFR | Farm Credit Term Loan A | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument basis spread on variable rate | 6% | ||||||
SOFR | Farm Credit Term Loan B | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument basis spread on variable rate | 5.75% | ||||||
Base rate | Farm Credit Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, interest rate | 1.75% | 1.75% | |||||
Adjusted SOFR | Farm Credit Term Loan A | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument basis spread on variable rate | 0.10% | ||||||
Adjusted SOFR | Farm Credit Term Loan B | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument basis spread on variable rate | 0.10% | ||||||
Maximum [Member] | Revolving Credit Facility | Asset Based Lending Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 1,000,000,000 | $ 1,000,000,000 | |||||
Minimum [Member] | Revolving Credit Facility | Asset Based Lending Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 400,000,000 | $ 400,000,000 |
Changes in Accumulated Other _3
Changes in Accumulated Other Comprehensive Loss by Component - Schedule of Changes in Accumulated Other Comprehensive Loss by Component (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||||
Beginning balance | [1] | $ (69) | |||||||||
Balance | $ 2,474 | [2] | $ 1,550 | [3] | 1,764 | [1],[2] | $ 1,494 | [3] | $ 1,494 | [3] | |
Other comprehensive (loss) income before reclassifications | 30 | (77) | |||||||||
Amounts reclassified from Accumulated other comprehensive income (loss) | 11 | (16) | |||||||||
Other comprehensive income (loss) | 37 | (20) | [4] | 41 | 8 | [4] | (93) | ||||
Ending balance | (28) | (28) | (69) | [1] | |||||||
Balance | 2,313 | 1,580 | [3] | 2,313 | 1,580 | [3] | 1,764 | [1],[2] | |||
Natural Gas Swap Contracts | |||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||||
Other comprehensive (loss) income before reclassifications | (5) | 14 | |||||||||
Foreign Exchange Forward Contracts | |||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||||
Other comprehensive (loss) income before reclassifications | 8 | (16) | |||||||||
Foreign Currency Items | |||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||||
Other comprehensive (loss) income before reclassifications | 26 | (71) | |||||||||
Currency Options | |||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||||
Other comprehensive (loss) income before reclassifications | 1 | (2) | |||||||||
Other Comprehensive Income (Loss) | |||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||||
Other comprehensive (loss) income before reclassifications | (2) | ||||||||||
Net Derivative (Losses) Gains on Cash Flow Hedges | |||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||||
Beginning balance | (12) | 0 | 0 | ||||||||
Other comprehensive (loss) income before reclassifications | 4 | (4) | |||||||||
Amounts reclassified from Accumulated other comprehensive income (loss) | 11 | (8) | |||||||||
Other comprehensive income (loss) | 15 | (12) | |||||||||
Ending balance | 3 | 3 | (12) | ||||||||
Net Derivative (Losses) Gains on Cash Flow Hedges | Natural Gas Swap Contracts | |||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||||
Other comprehensive (loss) income before reclassifications | (5) | 14 | |||||||||
Net Derivative (Losses) Gains on Cash Flow Hedges | Foreign Exchange Forward Contracts | |||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||||
Other comprehensive (loss) income before reclassifications | 8 | (16) | |||||||||
Net Derivative (Losses) Gains on Cash Flow Hedges | Currency Options | |||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||||
Other comprehensive (loss) income before reclassifications | 1 | (2) | |||||||||
Accumulated Defined Benefit Plans Adjustment | Pension Plans | |||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||||
Beginning balance | (1) | 17 | 17 | ||||||||
Other comprehensive (loss) income before reclassifications | (11) | ||||||||||
Amounts reclassified from Accumulated other comprehensive income (loss) | (7) | ||||||||||
Other comprehensive income (loss) | (18) | ||||||||||
Ending balance | (1) | (1) | (1) | ||||||||
Accumulated Defined Benefit Plans Adjustment | Pension Plans | Other Comprehensive Income (Loss) | |||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||||
Other comprehensive (loss) income before reclassifications | (11) | ||||||||||
Accumulated Defined Benefit Plans Adjustment | Other Post-Retirement Benefit Plans | |||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||||
Beginning balance | 7 | (1) | (1) | ||||||||
Other comprehensive (loss) income before reclassifications | 9 | ||||||||||
Amounts reclassified from Accumulated other comprehensive income (loss) | (1) | ||||||||||
Other comprehensive income (loss) | 8 | ||||||||||
Ending balance | 7 | 7 | 7 | ||||||||
Accumulated Defined Benefit Plans Adjustment | Other Post-Retirement Benefit Plans | Other Comprehensive Income (Loss) | |||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||||
Other comprehensive (loss) income before reclassifications | 9 | ||||||||||
Foreign Currency Items | |||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||||
Beginning balance | (63) | 8 | 8 | ||||||||
Other comprehensive (loss) income before reclassifications | 26 | (71) | |||||||||
Other comprehensive income (loss) | 26 | (71) | |||||||||
Ending balance | (37) | (37) | (63) | ||||||||
Foreign Currency Items | Foreign Currency Items | |||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||||
Other comprehensive (loss) income before reclassifications | 26 | (71) | |||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||||
Balance | (65) | [2] | 52 | [3] | (69) | [2] | 24 | [3] | 24 | [3] | |
Balance | $ (28) | $ 32 | [3] | $ (28) | $ 32 | [3] | $ (69) | [2] | |||
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Changes in Accumulated Other _4
Changes in Accumulated Other Comprehensive Loss by Component - Schedule of Reclassifications Out of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||||
Earnings from discontinued operations, net of taxes | $ 11 | $ 5 | [1] | $ 13 | $ 18 | [1] |
Tax benefit (expense) | 9 | (14) | [1] | 65 | (19) | [1] |
Net (loss) earnings | (13) | 50 | [1] | 93 | 78 | [1] |
Reclassification Out of Accumulated Other Comprehensive (Loss) Income | Net Derivative (Losses) gains on Cash Flow Hedge | ||||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||||
Earnings (loss) before income taxes | (4) | 6 | (15) | 8 | ||
Tax benefit (expense) | 1 | (2) | 4 | (2) | ||
Net (loss) earnings | (3) | 4 | (11) | 6 | ||
Reclassification Out of Accumulated Other Comprehensive (Loss) Income | Net Derivative (Losses) gains on Cash Flow Hedge | Natural Gas Swap Contracts | ||||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||||
Cost of Sales | 5 | (7) | 6 | |||
Reclassification Out of Accumulated Other Comprehensive (Loss) Income | Net Derivative (Losses) gains on Cash Flow Hedge | Currency Options and Forwards | ||||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||||
Cost of Sales | $ (4) | 1 | $ (8) | 2 | ||
Reclassification Out of Accumulated Other Comprehensive (Loss) Income | Accumulated Defined Benefit Plans Adjustment | Pension Plans [Member] | ||||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||||
Amortization of net actuarial gain | 8 | 8 | ||||
Earnings (loss) before income taxes | 8 | 8 | ||||
Tax benefit (expense) | (2) | (2) | ||||
Net (loss) earnings | 6 | 6 | ||||
Reclassification Out of Accumulated Other Comprehensive (Loss) Income | Accumulated Defined Benefit Plans Adjustment | Other Post-Retirement Benefit Plans [Member] | ||||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||||
Earnings from discontinued operations, net of taxes | 1 | 1 | ||||
Earnings (loss) before income taxes | 1 | 1 | ||||
Net (loss) earnings | $ 1 | $ 1 | ||||
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Changes in Accumulated Other _5
Changes in Accumulated Other Comprehensive Loss by Component - Schedule of Reclassifications Out of Accumulated Other Comprehensive Loss (Parenthetical) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
Equity [Abstract] | ||
Non-cash pension settlement gain | $ 8 | $ 8 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ / shares in Units, $ in Millions | 3 Months Ended | 4 Months Ended | 6 Months Ended | 8 Months Ended | 12 Months Ended | 35 Months Ended | 37 Months Ended | ||||||||||||||||
Aug. 01, 2023 | May 23, 2023 | Oct. 06, 2022 USD ($) | Oct. 02, 2019 USD ($) | Oct. 02, 2019 CAD ($) | Jul. 31, 2012 | Jun. 30, 2023 USD ($) | Nov. 07, 2017 | Aug. 25, 2017 | Jun. 30, 2023 USD ($) | Aug. 08, 2022 | Jul. 31, 2023 | Dec. 01, 2021 | Nov. 30, 2020 | Nov. 29, 2020 | Jun. 30, 2023 CAD ($) | May 17, 2023 USD ($) | Dec. 31, 2022 USD ($) | [1] | Nov. 13, 2019 USD ($) | Nov. 13, 2019 CAD ($) | Sep. 26, 2019 USD ($) | Sep. 26, 2019 CAD ($) $ / shares | |
Commitments And Contingencies [Line Items] | |||||||||||||||||||||||
Environmental liabilities | $ 59,000,000 | $ 59,000,000 | |||||||||||||||||||||
Asset retirement obligations | 54,000,000 | 54,000,000 | |||||||||||||||||||||
Surety bonds outstanding | 101,000,000 | 101,000,000 | |||||||||||||||||||||
Remaining balance payable including accrued interest | 882,000,000 | 882,000,000 | $ 642,000,000 | ||||||||||||||||||||
Partial wind-up deficit within plans | 113,000,000 | 113,000,000 | $ 150 | ||||||||||||||||||||
Total insurance claim amount | 90,000,000 | ||||||||||||||||||||||
Total insurance claim amount, net | 80,000,000 | ||||||||||||||||||||||
Fibrek Inc. [Member] | |||||||||||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||||||||||
Effective date of acquisition | Jul. 31, 2012 | ||||||||||||||||||||||
Business acquisition remaining percentage of voting interest acquired | 25.40% | ||||||||||||||||||||||
Fair value of dissenting shareholders value per share | $ / shares | $ 1.99 | ||||||||||||||||||||||
Aggregate fair value of dissenting shareholders | $ 23,000,000 | $ 31 | |||||||||||||||||||||
Agreegate estimated fair value plus interest and additional indemnity payable in cash | $ 33,000,000 | $ 44 | |||||||||||||||||||||
Amount paid to dissenting shareholders | $ 14,000,000 | $ 19 | |||||||||||||||||||||
Legal hypothec amount | $ 23,000,000 | $ 30 | |||||||||||||||||||||
Fibrek Inc. [Member] | Trade and Other Payables [Member] | |||||||||||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||||||||||
Remaining balance payable including accrued interest | 22,000,000 | 22,000,000 | $ 29 | ||||||||||||||||||||
Countervailing Duties [Member] | |||||||||||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||||||||||
Percentage of final determination countervailing duty rate on certain canadian softwood lumber imported to the US market | 12.82% | 18.07% | 19.10% | 14.70% | |||||||||||||||||||
Accumulated cash deposits paid | 457,000,000 | ||||||||||||||||||||||
Countervailing Duties [Member] | Subsequent Event [Member] | |||||||||||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||||||||||
Percentage of final determination countervailing duty rate on certain canadian softwood lumber imported to the US market | 1.79% | 10.10% | |||||||||||||||||||||
Anti-dumping Duties [Member] | |||||||||||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||||||||||
Percentage of final determination anti dumping rate on certain canadian softwood lumber imported to the US market | 4.59% | 11.59% | 1.15% | 3.20% | |||||||||||||||||||
Accumulated anti dumping cash deposits paid | 127,000,000 | ||||||||||||||||||||||
Anti-dumping Duties [Member] | Subsequent Event [Member] | |||||||||||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||||||||||
Percentage of final determination anti dumping rate on certain canadian softwood lumber imported to the US market | 6.20% | 4.76% | |||||||||||||||||||||
Pension Plans [Member] | |||||||||||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||||||||||
Provision for liability | 0 | ||||||||||||||||||||||
Indemnification Guarantee [Member] | |||||||||||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||||||||||
Provision for liability | 0 | ||||||||||||||||||||||
Standby Letters of Credit [Member] | |||||||||||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||||||||||
Surety bonds outstanding | 62,000,000 | 62,000,000 | |||||||||||||||||||||
Insurance Claims [Member] | |||||||||||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||||||||||
Gain on disposition of property, plant and equipment | 4,000,000 | 4,000,000 | |||||||||||||||||||||
Loss contingency, costs amount probable to be recovered | $ 32,000,000 | ||||||||||||||||||||||
Loss contingency, amount recovered | 18,000,000 | 27,000,000 | 29,000,000 | ||||||||||||||||||||
Loss contingency, amount receivable | $ 14,000,000 | 8,000,000 | 8,000,000 | ||||||||||||||||||||
Loss contingency, direct costs recognized | $ 13,000,000 | 19,000,000 | |||||||||||||||||||||
Climate Change and Air Quality Regulations [Member] | Affordable Clean Energy [Member] | |||||||||||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||||||||||
Percentage of operating limit on retirement year | 20% | ||||||||||||||||||||||
Superfund Site [Member] | Environmental Protection Agency [Member] | |||||||||||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||||||||||
Provision for liability | $ 15,000,000 | ||||||||||||||||||||||
Approximate total response costs identified in the notice of liability | $ 21,000,000 | ||||||||||||||||||||||
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Segment Disclosures - Additiona
Segment Disclosures - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2023 Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Number of operating segments | 2 |
Segment Disclosures - Analysis
Segment Disclosures - Analysis and Reconciliation of Reportable Segment Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |||
Segment Reporting Information [Line Items] | ||||||
Sales | $ 1,730 | $ 1,148 | [1] | $ 3,153 | $ 2,219 | [1] |
Consolidated operating income (loss) from continuing operations | 21 | 66 | [1] | 110 | 98 | [1] |
Interest expense, net | 58 | 24 | [1] | 103 | 45 | [1] |
Non-service components of net periodic benefit cost | (4) | (17) | [1] | (8) | (26) | [1] |
(Loss) earnings before income taxes | (33) | 59 | [1] | 15 | 79 | [1] |
Income tax (benefit) expense | (9) | 14 | [1] | (65) | 19 | [1] |
(Loss) earnings from continuing operations | (24) | 45 | [1] | 80 | 60 | [1] |
Earnings from discontinued operations, net of taxes | 11 | 5 | [1] | 13 | 18 | [1] |
Net (loss) earnings | (13) | 50 | [1] | 93 | 78 | [1] |
Operating Segments [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 1,735 | 1,148 | 3,160 | 2,219 | ||
Operating Segments [Member] | Domtar [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 1,100 | 1,148 | 2,285 | 2,219 | ||
Consolidated operating income (loss) from continuing operations | 44 | 66 | 167 | 98 | ||
Operating Segments [Member] | Resolute [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 635 | 875 | ||||
Consolidated operating income (loss) from continuing operations | (23) | (57) | ||||
Operating Segments [Member] | Communication Papers [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 625 | 635 | 1,273 | 1,214 | ||
Operating Segments [Member] | Specialty and Packaging Papers [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 266 | 189 | 495 | 364 | ||
Operating Segments [Member] | Market Pulp [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 411 | $ 324 | 800 | $ 641 | ||
Operating Segments [Member] | Newsprint [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 99 | 141 | ||||
Operating Segments [Member] | Tissue [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 57 | 77 | ||||
Operating Segments [Member] | Wood [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 272 | 367 | ||||
Intersegment Sales [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | $ (5) | $ (7) | ||||
[1] Adjusted to reflect the retrospective combination of the Company and Skookumchuck Pulp Inc., as if the combination had been in effect since the inception of common control on November 30, 2021 (refer to Note 3 “Acquisition of businesses”). |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 29, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | ||||||
Other recievables | $ 11 | $ 11 | $ 13 | |||
Other payables | 1 | 1 | $ 111 | |||
Management fees | $ 2 | $ 3 | $ 4 | $ 6 | ||
Skookumchuck Pulp Inc [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Consideration transferred | $ 185 | |||||
Skookumchuck Pulp Inc [Member] | Preferred Shares Redeemable | ||||||
Related Party Transaction [Line Items] | ||||||
Consideration transferred | 100 | |||||
Skookumchuck Pulp Inc [Member] | Unsecured Note Due July 2023 [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Consideration transferred | 50 | |||||
Skookumchuck Pulp Inc [Member] | Unsecured Note Due June 2031 [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Consideration transferred | $ 35 |