Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 30, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | UFS | |
Entity Registrant Name | Domtar CORP | |
Entity Central Index Key | 1,381,531 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 62,849,936 |
Consolidated Statements of Earn
Consolidated Statements of Earnings and Comprehensive (Loss) Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Sales | $ 1,292 | $ 1,405 | $ 3,950 | $ 4,184 |
Operating expenses | ||||
Cost of sales, excluding depreciation and amortization | 1,026 | 1,105 | 3,140 | 3,316 |
Depreciation and amortization | 89 | 96 | 270 | 291 |
Selling, general and administrative | 95 | 99 | 294 | 313 |
Impairment and write-down of property, plant and equipment (NOTE 12) | 20 | 57 | ||
Closure and restructuring costs (NOTE 12) | 1 | 2 | 3 | 3 |
Other operating income, net (NOTE 7) | (17) | (8) | (17) | |
Operating expenses | 1,231 | 1,285 | 3,756 | 3,906 |
Operating income | 61 | 120 | 194 | 278 |
Interest expense, net | 64 | 25 | 115 | 76 |
(Loss) earnings before income taxes | (3) | 95 | 79 | 202 |
Income tax benefit | (14) | (186) | (6) | (158) |
Net earnings | $ 11 | $ 281 | $ 85 | $ 360 |
Per common share (in dollars) (NOTE 5) | ||||
Basic | $ 0.17 | $ 4.34 | $ 1.34 | $ 5.55 |
Diluted | $ 0.17 | $ 4.33 | $ 1.34 | $ 5.54 |
Weighted average number of common shares outstanding (millions) | ||||
Basic | 62.9 | 64.8 | 63.4 | 64.9 |
Diluted | 63 | 64.9 | 63.5 | 65 |
Cash dividends per common share | $ 0.40 | $ 0.28 | $ 1.18 | $ 0.55 |
Net derivative losses on cash flow hedges: | ||||
Net losses arising during the period, net of tax of $(13) and $(24), respectively (2014 - $(7) and $(4), respectively) | $ (19) | $ (10) | $ (35) | $ (5) |
Less: Reclassification adjustment for losses included in net earnings, net of tax of $(5) and $(13), respectively (2014 - nil and $(3), respectively) | 7 | 2 | 18 | 5 |
Foreign currency translation adjustments | (58) | (118) | (182) | (130) |
Change in unrecognized gains and prior service cost related to pension and post-retirement benefit plans, net of tax of $1 and $(2), respectively (2014 - $1 and $(1), respectively) | 1 | (1) | 5 | 4 |
Other comprehensive loss | (69) | (127) | (194) | (126) |
Comprehensive (loss) income | $ (58) | $ 154 | $ (109) | $ 234 |
Consolidated Statements of Ear3
Consolidated Statements of Earnings and Comprehensive (Loss) Income (Parenthetical) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Net losses arising during the period, tax | $ (13) | $ (7) | $ (24) | $ (4) |
Reclassification adjustment for losses included in net earnings, tax | (5) | 0 | (13) | (3) |
Change in unrecognized gains (losses) and prior service cost related to pension and post-retirement benefit plans, tax | $ 1 | $ 1 | $ (2) | $ (1) |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 128 | $ 174 |
Receivables, less allowances of $10 and $6 | 617 | 628 |
Inventories (NOTE 9) | 751 | 714 |
Prepaid expenses | 25 | 25 |
Income and other taxes receivable | 17 | 54 |
Deferred income taxes | 82 | 75 |
Total current assets | 1,620 | 1,670 |
Property, plant and equipment, at cost | 8,714 | 8,909 |
Accumulated depreciation | (5,842) | (5,778) |
Net property, plant and equipment | 2,872 | 3,131 |
Goodwill (NOTE 10) | 546 | 567 |
Intangible assets, net of amortization (NOTE 11) | 616 | 661 |
Other assets | 135 | 156 |
Total assets | 5,789 | 6,185 |
Current liabilities | ||
Bank indebtedness | 1 | 10 |
Trade and other payables | 721 | 721 |
Income and other taxes payable | 23 | 26 |
Long-term debt due within one year | 42 | 169 |
Total current liabilities | 787 | 926 |
Long-term debt | 1,245 | 1,181 |
Deferred income taxes and other | 744 | 810 |
Other liabilities and deferred credits | $ 354 | $ 378 |
Commitments and contingencies (NOTE 16) | ||
Shareholders' equity | ||
Common stock $0.01 par value; authorized 2,000,000,000 shares; issued: 65,001,104 shares | $ 1 | $ 1 |
Additional paid-in capital | 1,966 | 2,012 |
Retained earnings | 1,154 | 1,145 |
Accumulated other comprehensive loss | (462) | (268) |
Total shareholders' equity | 2,659 | 2,890 |
Total liabilities and shareholders' equity | $ 5,789 | $ 6,185 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Statement Of Financial Position [Abstract] | ||
Receivables, allowances | $ 10 | $ 6 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued | 65,001,104 | 65,001,104 |
Treasury stock, par value | $ 0.01 | $ 0.01 |
Treasury stock, shares | 2,153,170 | 991,017 |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity (Unaudited) - 9 months ended Sep. 30, 2015 - USD ($) $ in Millions | Total | Issued and Outstanding Common Shares [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] |
Balance at Dec. 31, 2014 | $ 2,890 | $ 1 | $ 2,012 | $ 1,145 | $ (268) |
Balance, Shares at Dec. 31, 2014 | 64,000,000 | ||||
Stock-based compensation, net of tax | 4 | 4 | |||
Stock-based compensation, shares | 0 | ||||
Net earnings | 85 | 85 | |||
Net derivative losses on cash flow hedges: | |||||
Net losses arising during the period, net of tax of $(24) | (35) | (35) | |||
Less: Reclassification adjustments for losses included in net earnings, net of tax of $(13) | 18 | 18 | |||
Foreign currency translation adjustments | (182) | (182) | |||
Change in unrecognized gains and prior service cost related to pension and post-retirement benefit plans, net of tax of $(2) | 5 | 5 | |||
Stock repurchase | $ (50) | (50) | |||
Stock repurchase, shares | (1,210,932) | (1,200,000) | |||
Cash dividends declared | $ (76) | (76) | |||
Balance at Sep. 30, 2015 | $ 2,659 | $ 1 | $ 1,966 | $ 1,154 | $ (462) |
Balance, Shares at Sep. 30, 2015 | 62,800,000 |
Consolidated Statement of Shar7
Consolidated Statement of Shareholders' Equity (Parenthetical) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement Of Stockholders Equity [Abstract] | ||||
Net losses arising during the period, tax | $ (13) | $ (7) | $ (24) | $ (4) |
Reclassification adjustments for losses included in net earnings, tax | (5) | 0 | (13) | (3) |
Change in unrecognized gains (losses) and prior service cost related to pension and post-retirement benefit plans, tax | $ 1 | $ 1 | $ (2) | $ (1) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) CAD in Millions, $ in Millions | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | ||
Operating activities | |||
Net earnings | $ 85 | $ 360 | |
Adjustments to reconcile net earnings to cash flows from operating activities | |||
Depreciation and amortization | 270 | 291 | |
Deferred income taxes and tax uncertainties | (50) | (202) | |
Impairment and write-down of property, plant and equipment | 57 | ||
Net gains on disposal of property, plant and equipment | [1] | (15) | |
Stock-based compensation expense | 5 | 3 | |
Other | 4 | 1 | |
Changes in assets and liabilities, excluding the effects of acquisition of business | |||
Receivables | (11) | 21 | |
Inventories | (70) | (22) | |
Prepaid expenses | (3) | (4) | |
Trade and other payables | 8 | (22) | |
Income and other taxes | 30 | 22 | |
Difference between employer pension and other post-retirement contributions and pension and other post-retirement expense | 2 | ||
Other assets and other liabilities | 4 | ||
Cash flows provided from operating activities | 316 | 448 | |
Investing activities | |||
Additions to property, plant and equipment | (202) | (157) | |
Proceeds from disposals of property, plant and equipment and sale of business | 35 | 1 | |
Acquisition of business, net of cash acquired | (546) | ||
Other | 9 | 5 | |
Cash flows used for investing activities | (158) | (697) | |
Financing activities | |||
Dividend payments | (75) | (60) | |
Stock repurchase | (50) | (19) | |
Net change in bank indebtedness | (9) | (13) | |
Change in revolving bank credit facility | 75 | (160) | |
Proceeds from receivables securitization facilities | 90 | ||
Payments on receivables securitization facilities | (108) | ||
Issuance of long-term debt | 300 | ||
Repayment of long-term debt | (439) | (4) | |
Other | 1 | 4 | |
Cash flows used for financing activities | (197) | (270) | |
Net decrease in cash and cash equivalents | (39) | (519) | |
Impact of foreign exchange on cash | (7) | (2) | |
Cash and cash equivalents at beginning of period | 174 | 655 | |
Cash and cash equivalents at end of period | 128 | 134 | |
Supplemental cash flow information | |||
Interest (including $40 million of redemption premiums in 2015) | 121 | 70 | |
Income taxes paid, net | $ 16 | $ 32 | |
[1] | Effective June 23, 2015, Domtar finalized the previously announced sale of its Gatineau properties. Payment of $26 million (CDN $32 million) was received on July 3, 2015. As a result, the Company recorded a gain on sale of property, plant and equipment of $10 million (CDN $12 million) in the second quarter of 2015. |
Consolidated Statements of Cas9
Consolidated Statements of Cash Flows (Parenthetical) (Unaudited) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Statement Of Cash Flows [Abstract] | |
Redemption premium | $ 40 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | NOTE 1. _________________ BASIS OF PRESENTATION 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. Results for the first nine months of the year may not necessarily be indicative of full year results. 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, 2014, as filed with the Securities and Exchange Commission. The December 31, 2014 Consolidated Balance Sheet, presented for comparative purposes in this interim report, was derived from audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | NOTE 2. _________________ RECENT ACCOUNTING PRONOUNCEMENTS ACCOUNTING CHANGES IMPLEMENTED DISCONTINUED OPERATIONS In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, an update on Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in this update change the requirements for reporting discontinued operations and require additional disclosures for both disposal transactions that meet the criteria for a discontinued operation and disposals that do not meet these criteria. The objective of this update is to reach a greater convergence between the FASB’s and IASB’s reporting requirements for discontinued operations. The Company adopted the new requirement on January 1, 2015 with no impact on the Company’s consolidated financial statements, as no triggering event occurred throughout the period. FUTURE ACCOUNTING CHANGES REVENUE FROM CONTRACTS WITH CUSTOMERS In May 2014, the FASB issued ASU 2014-09, an update on revenue from contracts with customers. The core principal of this guideline is that an entity should recognize revenue, to depict the transfer of promised goods or services to customers, in an amount that reflects the consideration for which the entity is entitled to, in exchange for those goods and services. Guidance in this section supersedes the revenue recognition requirements found in topic 605. In August 2015, the FASB issued ASU 2015-14, which defers by one year ASU 2014-09’s effective date. The amendment will be effective for annual reporting periods beginning after December 15, 2017 including interim periods within that reporting period. Early adoption is permitted only for annual and interim periods beginning after December 15, 2016. The Company is currently evaluating these changes to determine whether they have an impact on the presentation of the consolidated financial statements. CLOUD COMPUTING ARRANGEMENTS In April 2015, the FASB issued ASU 2015-05, which clarifies the circumstances under which a cloud computing customer would account for a cloud computing arrangement as a license of internal-use software under Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40). The amendments provide customers with guidance on determining whether or not, a cloud computing arrangement includes a software license that should be accounted as an internal-use software. The amendments in this update are effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. The Company does not expect this additional guidance to have a material impact on the consolidated financial statements. INVENTORY In July 2015, the FASB issued ASU 2015-11, an update on Inventory. The amendments in this update require entities to measure most inventory at the lower of cost and net realizable value, therefore simplifying the current guidance under which an entity must measure inventory at the lower of cost or market, which in this context, was defined as one of three different measures and was unnecessarily complex. The amendment does not apply to inventory that has been valued using the Last-in First-out (“LIFO”) method or the Retail inventory method (“RIM”). The amendments in this update are effective for interim and annual periods beginning after December 15, 2016. The amendments should be applied prospectively and early adoption is permitted. The Company does not expect this additional guidance to have a material impact on the consolidated financial statements. |
Acquisition of Business
Acquisition of Business | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisition of Business | NOTE 3. _________________ ACQUISITION OF BUSINESS Acquisition of Laboratorios Indas On January 2, 2014, Domtar Corporation completed the acquisition of 100% of the outstanding shares of Laboratorios Indas, S.A.U. (“Indas”), primarily a branded incontinence products manufacturer and marketer in Spain. Indas has approximately 570 employees and operates two manufacturing facilities in Spain. The results of Indas’ operations have been included in the Personal Care reportable segment as of January 2, 2014. The purchase price was $546 million (€399 million) in cash, net of cash acquired of $46 million (€34 million). The acquisition was accounted for as a business combination under the acquisition method of accounting, in accordance with the Business Combinations Topic of FASB Accounting Standards Codification (“ASC”). The total purchase price was allocated to tangible and intangible assets acquired and liabilities assumed based on the Company’s estimates of their fair value. The table below illustrates the purchase price allocation: Fair value of net assets acquired at the date of acquisition Receivables $ 101 Inventory 28 Income and other taxes receivable 3 Property, plant and equipment 72 Intangible assets Customer relationships (1) 142 Trade names (2) 140 Catalog rights (2) 46 328 Goodwill 234 Deferred income tax assets 16 Total assets 782 Less: Liabilities Trade and other payables 71 Income and other taxes payable 3 Long-term debt (including short-term portion) 42 Deferred income tax liabilities 119 Other liabilities and deferred credits 1 Total liabilities 236 Fair value of net assets acquired at the date of acquisition 546 (1) The useful life of Customer relationships acquired is between 10-20 years. (2) Indefinite useful life. Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill is attributable to the general reputation of the business, the assembled workforce, the expected synergies and the expected future cash flows of the business. Goodwill is not deductible for tax purposes. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities and Fair Value Measurement | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities and Fair Value Measurement | NOTE 4. _________________ 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 ineffective portion of the qualifying instrument is immediately recognized to earnings. The amount of ineffectiveness recognized was immaterial for all years presented. The Company does not hold derivative financial instruments for trading purposes. CREDIT RISK The Company is exposed to credit risk on the accounts receivable 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 September 30, 2015, one of Domtar’s Pulp and Paper segment customers located in the United States represented 14% ($85 million) (2014 – 10% ($64 million)) of the Company’s receivables. The Company is exposed to credit risk in the event of non-performance by counterparties to its financial instruments. The Company minimizes 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, bank credit facility 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. In December 2014, the Company entered into a $100 million notional 2.5 year fixed to floating interest rate swap to receive fixed (1.0225%) and pay the 3 month LIBOR. This swap was designated as a fair value hedge for a portion of its 10.75% notes due June 2017. The changes in fair value of both the hedging and the hedged item were immediately recognized in interest expense. Gains (losses) related to the ineffectiveness portion of the hedges were not material for this reporting period. In August 2015, the Company terminated this swap simultaneously with the redemption of $215 million of its 10.75% notes, with no significant impact on net earnings. COST RISK Cash flow hedges: 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 over the next 27 months. The following table presents the volumes under derivative financial instruments for natural gas contracts outstanding as of September 30, 2015 to hedge forecasted purchases: Commodity Notional contractual quantity under derivative contracts Notional contractual value under derivative contracts (in millions of dollars) Percentage of forecasted purchases under derivative contracts Natural Gas 2015 (1) 2,490,000 MMBTU (2) $ 10 56% 2016 9,300,000 MMBTU (2) $ 37 45% 2017 3,015,000 MMBTU (2) $ 12 15% (1) Represents the remaining three months of 2015 (2) MMBTU: Millions of British thermal units The natural gas derivative contracts were fully effective as of September 30, 2015. There were no amounts reflected in the Consolidated Statements of Earnings and Comprehensive (Loss) Income for the three and nine months ended September 30, 2015 resulting from hedge ineffectiveness (three and nine months ended September 30, 2014 – nil). FOREIGN CURRENCY RISK Cash flow hedges: The Company has manufacturing operations in the United States, Canada and Europe. As a result, it is exposed to movements in foreign currency exchange rates in Canada and Europe. Moreover, certain assets and liabilities are denominated in currencies other than the U.S. dollar 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 and the European currencies. The Company’s European subsidiaries are also exposed to movements in foreign currency exchange rates on transactions denominated in a currency other than their Euro functional currency. 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 its Canadian subsidiary over the next 24 months. Derivatives are used to hedge forecasted sales by its US subsidiaries in Euros over the next 15 months and British pounds over the next three months. Derivatives are also used to hedge forecasted sales in British pounds and Norwegian krone and forecasted purchases of Swedish krona over the next 12 months and forecasted purchases in US dollars over the next 15 months by its European subsidiaries. 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 following table presents the currency values under significant contracts pursuant to currency options outstanding as of September 30, 2015 to hedge forecasted purchases and sales: Currency exposure hedged Business Segment Year of maturity Notional contractual value Percentage of forecasted net exposures under contracts Protection rate Obligation rate 2015 CDN/USD Pulp and Paper 100 CDN 52% 1 USD = 1.1200 1 USD = 1.1666 USD/Euro Personal Care 15 USD 74% 1 Euro = 1.2571 1 Euro = 1.2571 Euro/USD Pulp and Paper 11 EUR 75% 1 Euro = 1.1594 1 Euro = 1.1594 2016 CDN/USD Pulp and Paper 350 CDN 45% 1 USD = 1.1635 1 USD = 1.2108 USD/Euro Personal Care 54 USD 75% 1 Euro = 1.0851 1 Euro = 1.1724 Euro/USD Pulp and Paper 15 EUR 25% 1 Euro = 1.1629 1 Euro = 1.1629 2017 CDN/USD Pulp and Paper 135 CDN 17% 1 USD = 1.2268 1 USD = 1.2912 The foreign exchange derivative contracts were fully effective as of September 30, 2015. There were no amounts reflected in the Consolidated Statements of Earnings and Comprehensive (Loss) Income for the three and nine months ended September 30, 2015 resulting from hedge ineffectiveness (three and nine months ended September 30, 2014 - nil). FAIR VALUE MEASUREMENT The accounting standards for fair value measurements and disclosures, establishes 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 (c) below) at September 30, 2015 and December 31, 2014, 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: September 30, 2015 Quoted prices in active markets for identical assets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Balance sheet classification $ $ $ $ Derivatives designated under the Derivatives and Hedging Topic of FASB ASC: Asset derivatives Currency derivatives 5 — 5 — (a) Prepaid expenses Currency derivatives 2 — 2 — (a) Other assets Total Assets 7 — 7 — Liabilities derivatives Currency derivatives 37 — 37 — (a) Trade and other payables Currency derivatives 12 — 12 — (a) Other Natural gas swap contracts 12 — 12 — (a) Trade and other payables Natural gas swap contracts 5 — 5 — (a) Other liabilities and deferred credits Total Liabilities 66 — 66 — Other Instruments: Asset backed notes ("ABN") 1 — — 1 (b) Other assets Long-term debt 1,301 — 1,301 — (c) Long-term debt The cumulative loss recorded in Other comprehensive loss relating to natural gas contracts of $17 million at September 30, 2015, will be recognized in Cost of sales upon maturity of the derivatives over the next 27 months at the then prevailing values, which may be different from those at September 30, 2015. The cumulative loss recorded in Other comprehensive loss relating to currency options and forwards hedging forecasted purchases of $42 million at September 30, 2015, will be recognized in Cost of sales or Sales upon maturity of the derivatives over the next 24 months at the then prevailing values, which may be different from those at September 30, 2015. Fair Value of financial instruments at: December 31, 2014 Quoted prices in active markets for identical assets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Balance sheet classification $ $ $ $ Derivatives designated under the Derivatives and Hedging Topic of FASB ASC: Asset derivatives Currency derivatives 7 — 7 — (a) Prepaid expenses Currency derivatives 3 — 3 — (a) Other assets Total Assets 10 — 10 — Liabilities derivatives Currency derivatives 14 — 14 — (a) Trade and other payables Currency derivatives 9 — 9 — (a) Other liabilities and deferred credits Natural gas swap contracts 13 — 13 — (a) Trade and other payables Natural gas swap contracts 6 — 6 — (a) Other liabilities and deferred credits Total Liabilities 42 — 42 — Other Instruments: Asset backed notes 11 — 10 1 (b) Other assets Long-term debt 1,475 — 1,475 — (c) Long-term debt (a) Fair value 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: Fair value is measured using techniques derived from the Black-Scholes pricing model. 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) ABN are reported at fair value utilizing Level 2 or Level 3 inputs. Fair value of ABN reported under Level 2 is based on current market quotes. Fair value of ABN reported under Level 3 is based on the value of the collateral investments held in the conduit issuer, reduced by the negative value of credit default derivatives, with an additional discount applied for illiquidity. These ABN are held outside of the Company’s pension plans. (c) Fair value of the Company’s long-term debt is measured by comparison to market prices of its debt. In accordance with US GAAP, the Company’s long-term debt is not carried at fair value on the Consolidated Balance Sheets at September 30, 2015 and December 31, 2014. However, fair value disclosure is required. The carrying value of the Company’s long-term debt is $1,287 million and $1,350 million at September 30, 2015 and December 31, 2014, 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. |
Earnings Per Common Share
Earnings Per Common Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | NOTE 5. _________________ EARNINGS PER COMMON SHARE The following table provides the reconciliation between basic and diluted earnings per common share: For the three months ended For the nine months ended September 30, September 30, September 30, September 30, 2015 2014 2015 2014 Net earnings $ 11 $ 281 $ 85 $ 360 Weighted average number of common shares outstanding (millions) 62.9 64.8 63.4 64.9 Effect of dilutive securities (millions) 0.1 0.1 0.1 0.1 Weighted average number of diluted common shares outstanding (millions) 63.0 64.9 63.5 65.0 Basic net earnings per common share (in dollars) $ 0.17 $ 4.34 $ 1.34 $ 5.55 Diluted $ 0.17 $ 4.33 $ 1.34 $ 5.54 The following table provides the securities that could potentially dilute basic earnings per common share in the future, but were not included in the computation of diluted earnings per common share because to do so would have been anti-dilutive: For the three months ended For the nine months ended September 30, September 30, September 30, September 30, 2015 2014 2015 2014 Options 110,219 399,059 137,191 263,012 |
Pension Plans and Other Post-Re
Pension Plans and Other Post-Retirement Benefit Plans | 9 Months Ended |
Sep. 30, 2015 | |
Compensation And Retirement Disclosure [Abstract] | |
Pension Plans and Other Post-Retirement Benefit Plans | NOTE 6. _________________ PENSION PLANS AND OTHER POST-RETIREMENT BENEFIT PLANS DEFINED CONTRIBUTION PLANS The Company has several defined contribution plans and two Canadian multiemployer plans. The pension expense under these plans is equal to the Company’s contribution. For the three and nine months ended September 30, 2015, the related pension expense was $9 million and $24 million, respectively (2014 - $7 million and $22 million, respectively). DEFINED BENEFIT PLANS AND OTHER POST-RETIREMENT BENEFIT PLANS The Company sponsors both contributory and non-contributory U.S. and non-U.S. defined benefit pension plans. Non-unionized employees in Canada joining the Company after June 1, 2000 participate in a defined contribution pension plan. Salaried employees in the U.S. joining the Company after January 1, 2008 participate in a defined contribution pension plan. Most unionized employees in the U.S. and all U.S. non-hourly employees that are not grandfathered under the existing defined benefit pension plans, participate in a defined contribution pension plan for future service. The Company also sponsors a number of other post-retirement benefit plans for eligible U.S. and non-U.S. employees; the plans are unfunded and include life insurance programs and medical and dental benefits. The Company also provides supplemental unfunded defined benefit pension plans and supplemental unfunded defined contribution pension plans to certain senior management employees. Components of net periodic benefit cost for pension plans and other post-retirement benefit plans: For the three months ended For the nine months ended September 30, 2015 September 30, 2015 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 9 — 27 2 Interest expense 16 1 49 3 Expected return on plan assets (23 ) — (70 ) — Amortization of net actuarial loss 1 — 5 — Amortization of prior year service costs 1 — 2 — Net periodic benefit cost 4 1 13 5 Components of net periodic benefit cost for pension plans and other post-retirement benefit plans: For the three months ended For the nine months ended September 30, 2014 September 30, 2014 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 9 1 27 2 Interest expense 20 — 60 3 Expected return on plan assets (27 ) — (79 ) — Amortization of net actuarial loss 2 — 7 — Amortization of prior year service costs 2 — 3 — Net periodic benefit cost 6 1 18 5 The Company contributed $5 million and $11 million for the three and nine months ended September 30, 2015, respectively (2014 – nil and $19 million, respectively) to the pension plans. The Company also contributed $1 million and $4 million for the three and nine months ended September 30, 2015, respectively (2014 - $1 million and $4 million, respectively) to the other post-retirement benefit plans. |
Other Operating Income, Net
Other Operating Income, Net | 9 Months Ended |
Sep. 30, 2015 | |
Other Income And Expenses [Abstract] | |
Other Operating Income, Net | NOTE 7. _________________ OTHER OPERATING INCOME, NET Other operating income, net is an aggregate of both recurring and occasional loss or income items and, as a result, can fluctuate from period to period. The Company’s other operating income, net includes the following: For the three months ended For the nine months ended September 30, September 30, September 30, September 30, 2015 2014 2015 2014 $ $ $ $ Alternative fuel tax credits — (18 ) — (18 ) Gain on sale of property, plant and equipment (1) — — (15 ) — Bad debt expense (1 ) — 4 — Environmental provision 4 1 4 1 Foreign exchange (gain) loss (3 ) 1 (3 ) — Other — (1 ) 2 — Other operating income, net — (17 ) (8 ) (17 ) (1) Effective June 23, 2015, Domtar finalized the previously announced sale of its Gatineau properties. Payment of $26 million (CDN $32 million) was received on July 3, 2015. As a result, the Company recorded a gain on sale of property, plant and equipment of $10 million (CDN $12 million) in the second quarter of 2015. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 8. _________________ INCOME TAXES In the third quarter of 2015, the Company’s income tax benefit was $14 million, consisting of a current income tax expense of $4 million and a deferred income tax benefit of $18 million. This compares to an income tax benefit of $186 million in the third quarter of 2014, consisting of a current income tax expense of $10 million and a deferred income tax benefit of $196 million. The Company made income tax payments, net of refunds, of $14 million during the third quarter of 2015. The effective tax rate was 467 % compared with an effective tax rate of -196% in the third quarter of 2014. The effective tax rates for both the third quarter of 2015 and the third quarter of 2014 were impacted by the recognition of additional tax benefits related to the finalization of certain estimates in connection with the filing of the Company’s 2014 and 2013 income tax returns, respectively. Additionally, the effective tax rate for the third quarter of 2015 was impacted by enacted law changes in several U.S. states and by the impairment and write-down of property, plant, and equipment charges occurring in a high-tax jurisdiction. Also, for the third quarter of 2014, the effective tax rate was impacted by the recognition of previously unrecognized tax benefits of approximately $204 million as a result of the closure of U.S. federal tax audits for tax years 2009 through 2011, as well as the impact of recognizing $18 million of Alternative Fuel Tax Credits (“AFTC”) income in the third quarter of 2014 with no related tax expense. For the nine months of 2015, the Company’s income tax benefit amounted to $6 million, consisting of a current tax expense of $44 million and a deferred tax benefit of $50 million. This compares to an income tax benefit of $158 million in the first nine months of 2014, consisting of a current income tax expense of $44 million and a deferred tax benefit of $202 million. The Company made income tax payments, net of refunds, of $16 million during the first nine months of 2015. The Company’s effective tax rate was negative in the first nine months of both 2015 and 2014. The effective tax rate for the first nine months of 2015 was impacted by the recognition of additional tax benefits related to the finalization of certain estimates in connection with the filing of the Company’s 2014 tax returns, by the recognition of previously unrecognized tax benefits due to the expiration of certain statutes of limitations, by enacted law changes in several U.S. states, and by the impairment and write-down of property, plant, and equipment charges occurring in a high-tax jurisdiction. The effective tax rate for the first nine months of 2014 was impacted by the recognition of previously unrecognized tax benefits of approximately $204 million as a result of the closure of U.S. federal tax audits for tax years 2009 through 2011, as well as the impact of recognizing $18 million of AFTC income with no related tax expense. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 9. _________________ INVENTORIES The following table presents the components of inventories: September 30, December 31, 2015 2014 $ $ Work in process and finished goods 416 395 Raw materials 138 123 Operating and maintenance supplies 197 196 751 714 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | NOTE 10. _________________ GOODWILL The carrying value and any changes in the carrying value of goodwill are as follows: September 30, 2015 $ Balance at December 31, 2014 567 Effect of foreign currency exchange rate change (21 ) Balance at end of period 546 The goodwill at September 30, 2015 is entirely related to the Personal Care segment. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | NOTE 11. _________________ INTANGIBLE ASSETS The following table presents the components of intangible assets: September 30, December 31, 2015 2014 Estimated useful lives (in years) Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net $ $ $ $ $ $ Intangible assets subject to amortization Water rights 40 7 (1 ) 6 8 (1 ) 7 Customer relationships 10 - 40 358 (42 ) 316 374 (32 ) 342 Technology 7 - 20 8 (2 ) 6 8 (2 ) 6 Non-Compete 9 1 - 1 1 — 1 License rights 12 28 (5 ) 23 29 (4 ) 25 402 (50 ) 352 420 (39 ) 381 Intangible assets not subject to amortization Trade names 220 - 220 233 — 233 License rights 6 - 6 6 — 6 Catalog rights 38 - 38 41 — 41 Total 666 (50 ) 616 700 (39 ) 661 Amortization expense related to intangible assets for the three and nine months ended September 30, 2015 was $5 million and $14 million, respectively (2014 – $5 million and $16 million, respectively). Amortization expense for the next five years related to intangible assets is expected to be as follows: 2015 2016 2017 2018 2019 $ $ $ $ $ Amortization expense related to intangible assets 19 19 19 19 18 |
Closure and Restructuring Costs
Closure and Restructuring Costs and Liability and Impairment and Write-Down of Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring And Related Activities [Abstract] | |
Closure and Restructuring Costs and Liability and Impairment and Write-Down of Property, Plant and Equipment | NOTE 12. _________________ CLOSURE AND RESTRUCTURING COSTS AND LIABILITY AND IMPAIRMENT AND WRITE-DOWN OF PROPERTY, PLANT AND EQUIPMENT The Company regularly reviews its overall production capacity with the objective of aligning its production capacity with anticipated long-term demand, which in some cases could result in closure or impairment costs being recorded in earnings. As a result of the Company’s previous withdrawal from its U.S. multiemployer plans, the total provision for the withdrawal liabilities is $59 million at September 30, 2015. Of the $59 million provision, $9 million is subject to limited measurement uncertainty as the Company remains exposed to potential additional withdrawal liabilities to the fund in the event of a mass withdrawal occurring before the end of 2015. Ashdown, Arkansas mill On December 10, 2014, the Company announced that its Board of Directors approved a $160 million capital project to convert a paper machine at the Ashdown, Arkansas mill to a high quality fluff pulp line used in absorbent applications such as baby diapers, feminine hygiene and adult incontinence products. The planned conversion is expected to come online by the third quarter of 2016 and will allow for the production of up to 516,000 metric tons of fluff pulp per year once the machine is in full operation. The project will also result in the permanent reduction of 364,000 short tons of annual uncoated freesheet production capacity in the second quarter of 2016. The conversion work is expected to commence during the second quarter of 2016 and the fluff pulp line is scheduled to startup by the third quarter of 2016. The cost of conversion will be approximately $160 million of which $40 million is expected to be invested in 2015 and $120 million in 2016. The Company will also invest $40 million in a pulp bale line that will provide flexibility to manufacture papergrade softwood pulp, contingent on market conditions. The aggregate pre-tax earnings charge in connection with this conversion is estimated to be $120 million which includes an estimated $117 million in non-cash charges relating to accelerated depreciation of the carrying amounts of the manufacturing equipment as well as the write-off of related spare parts. Of the estimated pre-tax charge of $120 million, $3 million relates to estimated cash severance, employee benefits and training. Of the estimated total pre-tax charge of $120 million, $113 million is expected to be incurred during 2015 and 2016. As a result of the 2014 fourth quarter decision to convert a paper machine to a fluff pulp line at its Ashdown, Arkansas mill, the Company recorded $20 million and $57 million for the three and nine months ended September 30, 2015, respectively, of accelerated depreciation under Impairment and write-down of property, plant and equipment on the Consolidated Statement of Earnings and Comprehensive (Loss) Income. For the three and nine months ended September 30, 2015, the Company recorded $1 million and $2 million, respectively of severance and termination cost. Other costs For the three and nine months ended September 30, 2015, other costs related to previous and ongoing closures include nil and $1 million, respectively of severance and termination costs related to Personal Care. For the three and nine months ended September 30, 2014, other costs related to previous and ongoing closures include $2 and $2 million, respectively of severance and termination costs related to Pulp and Paper and nil and $1 million respectively of severance and termination costs related to Personal Care. At September 30, 2015, the Company’s provision for closure and restructuring costs is $3 million. This provision is comprised of severance and termination costs all related to Pulp and Paper. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | NOTE 13. _________________ LONG-TERM DEBT The Company redeemed on August 20, 2015, (the redemption date), $55 million in aggregate principal amount of its 9.5% Notes due 2016, representing approximately 59% of the outstanding notes, and $215 million in aggregate principal amount of its 10.75% Notes due 2017, representing approximately 77% of the outstanding notes. The redemption price for the notes was equal to 100% of the principal amount of such notes, plus accrued and unpaid interest, plus a make-whole premium. Debt refinancing costs of $42 million were incurred in the third quarter of 2015. In addition, the Company’s 7.125% notes, in the aggregate principal amount of $167 million matured on August 15, 2015. The above-noted redemptions and repayment of notes were funded through a combination of cash on hand, borrowings under the Company’s credit facilities and proceeds from a new $300 million 10-year term loan agreement with a syndicate of bank lenders. TERM LOAN On July 20, 2015, a wholly owned subsidiary of Domtar entered into a $300 million Term Loan Agreement that matures on July 20, 2025. The facility was fully drawn down on August 19, 2015. Borrowings under the Term Loan Agreement bear interest at LIBOR plus a margin of 1.875%. The Term Loan Agreement contains customary covenants, including two financial covenants: (i) an interest coverage ratio, as defined in the Term Loan Agreement, that must be maintained at a level of not less than 3 to 1 and (ii) a leverage ratio, as defined in the Term Loan Agreement that must be maintained at a level of not greater than 3.75 to 1. All borrowings under the Term Loan are unsecured. The Company and certain domestic subsidiaries of the Company unconditionally guarantee any obligations from time to time arising under the Term Loan Agreement. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss by Component | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss by Component | NOTE 14. _________________ CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS BY COMPONENT The following table presents the changes in Accumulated other comprehensive loss by component (1) Net (losses) hedges Pension items (2) Post-retirement benefit items (2) Foreign currency items Total $ $ $ $ $ Balance at December 31, 2014 (15 ) (192 ) (13 ) (48 ) (268 ) Natural gas swap contracts (6 ) N/A N/A N/A (6 ) Currency options (33 ) N/A N/A N/A (33 ) Forward contracts 4 N/A N/A N/A 4 Foreign currency items N/A N/A N/A (182 ) (182 ) Net gain N/A — — N/A — Other comprehensive loss before reclassifications (35 ) — — (182 ) (217 ) Amounts reclassified from Accumulated other comprehensive loss 18 5 — — 23 Net current period other comprehensive (loss) income (17 ) 5 — (182 ) (194 ) Balance at September 30, 2015 (32 ) (187 ) (13 ) (230 ) (462 ) Balance at December 31, 2013 — (210 ) (7 ) 152 (65 ) Natural gas swap contracts 1 N/A N/A N/A 1 Currency options (7 ) N/A N/A N/A (7 ) Forward contracts 1 N/A N/A N/A 1 Foreign currency items N/A N/A N/A (130 ) (130 ) Remeasurement of pension plan obligation N/A (3 ) N/A N/A (3 ) Other comprehensive loss before reclassifications (5 ) (3 ) — (130 ) (138 ) Amounts reclassified from Accumulated other comprehensive loss 5 7 — — 12 Net current period other comprehensive income (loss) — 4 — (130 ) (126 ) Balance at September 30, 2014 — (206 ) (7 ) 22 (191 ) (1) All amounts are after tax. Amounts in parenthesis indicate losses. (2) The accrued 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 Amount reclassified from Accumulated other comprehensive loss For the three months ended September 30, 2015 September 30, 2014 Net derivative gains on cash flow hedges Natural gas swap contracts 2 — (1) Currency options and forwards 10 2 (1) Total before tax 12 2 Tax expense (5 ) — Net of tax 7 2 Amortization of defined benefit pension items Amortization of net actuarial loss and prior year service cost 2 4 (2) Tax expense (1 ) (2 ) Net of tax 1 2 Details about Accumulated other comprehensive loss components Amount reclassified from Accumulated other comprehensive loss For the nine months ended September 30, 2015 September 30, 2014 Net derivative gains (losses) on cash flow hedges Natural gas swap contracts 11 (3 ) (1) Currency options and forwards 20 11 (1) Total before tax 31 8 Tax expense (13 ) (3 ) Net of tax 18 5 Amortization of defined benefit pension items Amortization of net actuarial loss and prior year service cost 7 10 (2) Tax expense (2 ) (3 ) Net of tax 5 7 (1) These amounts are included in Cost of Sales in the Consolidated Statements of Earnings and Comprehensive (Loss) Income. (2) These amounts are included in the computation of net periodic benefit cost. Refer to Note 6 “Pension plans and other post-retirement benefit plans” for additional details. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Shareholders' Equity | NOTE 15. _________________ SHAREHOLDERS’ EQUITY On February 23, 2015, May 5, 2015 and August 4, 2015, the Company’s Board of Directors approved a quarterly dividend of $0.40 per share to be paid to holders of the Company’s common stock. Total dividends of approximately $26 million, $25 million and $25 million, respectively, were paid on April 15, 2015, July 15, 2015 and October 15, 2015, respectively, to shareholders of record on April 2, 2015, July 2, 2015 and October 2, 2015, respectively. On November 3, 2015, the Company’s Board of Directors approved a quarterly dividend of $0.40 per share to be paid to holders of the Company’s common stock. This dividend is to be paid on January 15, 2016, to shareholders of record on January 4, 2016. STOCK REPURCHASE PROGRAM The Company’s Board of Directors has authorized a stock repurchase program (“the Program”) of up to $1.3 billion. Under the Program, the Company is authorized to repurchase from time to time shares of its outstanding common stock on the open market or in privately negotiated transactions in the United States. The timing and amount of stock repurchases will depend on a variety of factors, including the market conditions as well as corporate and regulatory considerations. The Program may be suspended, modified or discontinued at any time and the Company has no obligation to repurchase any amount of its common stock under the Program. The Program has no set expiration date. The Company repurchases its common stock, from time to time, in part to reduce the dilutive effects of stock options, awards, and to improve shareholders’ returns. The Company makes open market purchases of its common stock using general corporate funds. Additionally, the Company enters into structured stock repurchase agreements with large financial institutions using general corporate funds in order to lower the average cost to acquire shares. The agreements require the Company to make up-front payments to the counterparty financial institutions which results in either the receipt of stock at the beginning of the term of the agreements followed by a share adjustment at the maturity of the agreements, or the receipt of either stock or cash at the maturity of the agreements, depending upon the price of the stock. During the first nine months of 2015, the Company repurchased 1,210,932 shares at an average price of $41.40 for a total cost of $50 million. During the first nine months of 2014, the Company repurchased 530,780 shares at an average price of $36.62 for a total cost of $19 million. Since the inception of the Program, the Company has repurchased 24,548,912 shares at an average price of $39.42 for a total cost of $968 million. All shares repurchased are recorded as Treasury stock on the Consolidated Balance Sheets under the par value method at $0.01 per share. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 16. _________________ COMMITMENTS AND CONTINGENCIES ENVIRONMENT The Company is subject to environmental laws and regulations enacted by federal, provincial, state and local authorities. An action was commenced by Seaspan International Ltd. (“Seaspan”) in the Supreme Court of British Columbia, on March 31, 1999 against the Company and others with respect to alleged contamination of Seaspan’s site bordering Burrard Inlet in North Vancouver, British Columbia, including contamination of sediments in Burrard Inlet, due to the presence of creosote and heavy metals. On February 16, 2010, the government of British Columbia issued a Remediation Order to Seaspan and the Company, in order to define and implement an action plan to address soil, sediment and groundwater issues. Working with authorities, Seaspan and the Company selected a remedial plan and applied to the Vancouver Fraser Port Authority for permitting approval. On May 14, 2015, the Vancouver Fraser Port Authority issued the permit. It is anticipated that construction will begin in 2016. The Company has recorded an environmental reserve to address its estimated exposure. The possible loss in excess of the reserve is not considered to be material for this matter. The following table reflects changes in the reserve for environmental remediation and asset retirement obligations: September 30, 2015 $ Balance at beginning of period 60 Additions 4 Environmental spending (2 ) Effect of foreign currency exchange rate change (6 ) Balance at end of period 56 The U.S. Environmental Protection Agency (“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. Climate change regulation Various national and local laws and regulations have been established or are emerging in jurisdictions where the Company currently has, or may have in the future, manufacturing facilities or investments. The Company does not expect to be disproportionately affected by these measures compared with other pulp and paper producers located in these jurisdictions. Conference of the Parties to the Kyoto Protocol is scheduled for December 2015. At this time it is not possible to predict the potential impacts of future international agreements on the Company. However the Company does not expect to be disproportionately affected compared with other pulp and paper producers. In GHG emissions beginning in 2022 by making significant changes to energy resources within the state. Those state plans are due September 6, 2016, unless the state requests and receives an extension of that deadline to September 6, 2018. On August 3, 2015, the EPA also proposed a Federal plan that will be implemented in states that do not submit a state plan, or do not submit an approvable state plan. When implemented, these regulations may increase the cost of purchased electricity in some jurisdictions. The EPA is also developing a biogenic carbon accounting framework to account for carbon dioxide emissions from biomass fuels for Clean Air Act permitting and other regulatory purposes. The Company does not expect to be disproportionately affected by any future measures compared with other pulp and paper producers in the United States. The Government of Canada has committed to developing a sector-by-sector approach to set performance standards to reduce greenhouse gases. The pulp and paper sector is currently undergoing review. The Company does not expect its facilities to be disproportionately affected by these future measures compared with other pulp and paper producers in Canada. The province of Quebec initiated a GHG cap-and-trade system with reduction targets becoming effective on January 1, 2013. British Columbia imposed a carbon tax in 2008, which applies to the purchase of fossil fuels within the province. The Province of Ontario is also developing a cap-and-trade system. The Company does not expect future compliance costs for these existing and emerging programs to have a material impact on the Company’s financial position, results of operations or cash flows. Industrial Boiler Maximum Achievable Control Technology Standard (“MACT”) or Boiler MACT The Company is developing plans to bring facilities affected by the EPA’s Boiler MACT rule into compliance by the January 2016 regulatory deadline. The Company expects the remaining capital costs required to comply with the Boiler MACT rule to be approximately $15 million. The EPA is reconsidering a limited number of issues related to the Boiler MACT rule, and certain elements of the rule are being litigated. Since the consequences of these activities cannot be predicted, adjustments to compliance plans may be needed to accommodate any changes to the final rule. At this time it cannot be predicted if any of these changes could affect the current capital costs for compliance and/or future operating costs. 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 September 30, 2015, 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. Spanish Competition Investigation In September 2014, following preliminary inquiries commenced in January 2014, Spain’s National Commission of Markets and Competition (“CNMC”) initiated a formal investigation of alleged violations of Spanish competition laws in the market for heavy adult incontinence products in Spain. On October 15, 2015, the CNMC filed a Statement of Objections against a number of industry participants alleging the existence of a series of agreements between manufacturers, distributors and pharmacists to fix prices and to allocate margins for heavy adult incontinence products within the pharmacy channel The Company estimates that in the event of an adverse determination by the CNMC, the penalties for Indas and its affiliates could range from €0 to €21 million ($23 million). As at September 30, 2015, no provision has been recorded as it is not possible to predict the decision of the CNMC and it is not possible to estimate an amount of penalty in the event that Indas and its two affiliates were to be found liable. The sellers of Indas made representations and warranties to the Company in the purchase agreement regarding, among other things, Indas’ and its subsidiary’s compliance with competition laws. The liability retained by the sellers is backed by a retained purchase price of €3 million ($3 million) and bank guarantees of €9 million ($10 million). The Company purchased limited insurance coverage for an additional €28.5 million ($32 million). If the sellers were found to be in breach of the relevant representations and warranties, the €12 million ($13 million) attributable to the retained cash and bank guarantees would act as a deductible under the insurance policy. The Company’s total recovery from the retained purchase price, the bank guarantees and the purchased insurance coverage is thus potentially up to €40.5 million ($45 million). In the event a penalty is assessed against Indas and its affiliates, there are customary risks associated with the assertion of the Company’s rights under the bank guarantees and insurance policy. In that event, the Company will assess this risk and potential impact which may result in recording liability for a penalty in one period and only recording a recovery from guarantees and insurance when the Company has more certainty of recovery, which may be in a different period. 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, 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 September 30, 2015, 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 September 30, 2015, the Company has not recorded a liability associated with these indemnifications, as it does not expect to make any payments pertaining to these indemnifications. |
Segment Disclosures
Segment Disclosures | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Disclosures | NOTE 17. _________________ SEGMENT DISCLOSURES The Company operates in the two reportable segments described below. Each reportable segment offers different products and services and requires different manufacturing processes, technology and/or marketing strategies. The following summary briefly describes the operations included in each of the Company’s reportable segments: · Pulp and Paper Segment – comprises the design, manufacturing, marketing and distribution of communication, specialty and packaging papers, as well as softwood, fluff and hardwood market pulp. · Personal Care Segment – consists of the design, manufacturing, marketing and distribution of absorbent hygiene products. An analysis and reconciliation of the Company’s reportable segment information to the respective information in the financial statements is as follows: For the three months ended For the nine months ended September 30, September 30, September 30, September 30, SEGMENT DATA 2015 2014 2015 2014 $ $ $ $ Sales Pulp and Paper 1,092 1,186 3,348 3,514 Personal Care 214 231 648 698 Total for reportable segments 1,306 1,417 3,996 4,212 Intersegment sales (14 ) (12 ) (46 ) (28 ) Consolidated sales 1,292 1,405 3,950 4,184 Depreciation and amortization and impairment and write-down of property, plant and equipment Pulp and Paper 75 79 224 241 Personal Care 14 17 46 50 Total for reportable segments 89 96 270 291 Impairment and write-down of property, plant and equipment - Pulp and Paper 20 — 57 — Consolidated depreciation and amortization and impairment and write-down of property, plant and equipment 109 96 327 291 Operating income (loss) 1 Pulp and Paper 54 101 184 264 Personal Care 18 12 45 38 Corporate (11 ) 7 (35 ) (24 ) Consolidated operating income 61 120 194 278 Interest expense, net 64 25 115 76 (Loss) earnings before income taxes (3 ) 95 79 202 Income tax benefit (14 ) (186 ) (6 ) (158 ) Net earnings 11 281 85 360 1 As a result of changes in the Company’s organization structure, the Company has changed the way it allocates certain Corporate general and administrative costs to the segments. Further, certain Corporate costs not related to segment activities, as well as the mark-to-market impact on stock-based compensation awards, will be presented on the Corporate line. As a result, the Company has revised its 2014 segment disclosures to conform to its 2015 presentation. (Previously reported numbers for Operating income (loss) for the three and nine months ended September 30, 2014 are as follows; Pulp and Paper $109 million and $247 million, respectively, Personal Care: $13 million and $42 million, respectively, Corporate: $(2) million and $(11) million, respectively). |
Supplemental Guarantor Financia
Supplemental Guarantor Financial Information | 9 Months Ended |
Sep. 30, 2015 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Supplemental Guarantor Financial Information | DOMTAR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2015 (IN MILLIONS OF DOLLARS, UNLESS OTHERWISE NOTED (UNAUDITED) NOTE 18. _________________ SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION The following information is presented as required under Rule 3-10 of Regulation S-X, in connection with the Company’s issuance of debt securities that are fully and unconditionally guaranteed by Domtar Paper Company, LLC, a 100% owned subsidiary of the Company, Domtar Industries LLC (and subsidiaries, excluding Domtar Funding LLC), Ariva Distribution Inc., Domtar Delaware Investments Inc., Domtar Delaware Holdings, LLC, Domtar A.W. LLC (and subsidiary), Domtar AI Inc., Attends Healthcare Products Inc., EAM Corporation, Domtar Personal Care Absorbent Hygiene Inc, and Associated Hygienic Products LLC., all 100% owned subsidiaries of the Company (“Guarantor Subsidiaries”), on a joint and several basis. The Guaranteed Debt will not be guaranteed by certain of Domtar’s own 100% owned subsidiaries; including Domtar Delaware Holdings Inc. and its foreign subsidiaries, including Attends Healthcare Limited, Domtar Inc. and Laboratorios Indas. S.A.U., (collectively the “Non-Guarantor Subsidiaries”). The subsidiary’s guarantee may be released in certain customary circumstances, such as if the subsidiary is sold or sells all of its assets, if the subsidiary’s guarantee of the Credit Agreement is terminated or released and if the requirements for legal defeasance to discharge the indenture have been satisfied. The following supplemental condensed consolidating financial information sets forth, on an unconsolidated basis, the Balance Sheets at September 30, 2015 and December 31, 2014, the Statements of Earnings and Comprehensive (Loss) Income for the three and nine months ended September 30, 2015 and 2014 and the Statements of Cash Flows for the nine months ended September 30, 2015 and 2014 for Domtar Corporation (the “Parent”), and on a combined basis for the Guarantor Subsidiaries and, on a combined basis, the Non-Guarantor Subsidiaries. The supplemental condensed consolidating financial information reflects the investments of the Parent in the Guarantor Subsidiaries, as well as the investments of the Guarantor Subsidiaries in the Non-Guarantor Subsidiaries, using the equity method. For the three months ended September 30, 2015 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS AND Guarantor Guarantor Consolidating COMPREHENSIVE LOSS Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 1,071 528 (307 ) 1,292 Operating expenses Cost of sales, excluding depreciation and amortization — 975 358 (307 ) 1,026 Depreciation and amortization — 62 27 — 89 Selling, general and administrative 2 36 57 — 95 Impairment and write-down of property, plant and equipment — 20 — — 20 Closure and restructuring costs — 1 — — 1 Other operating loss (income), net 3 1 (4 ) — — 5 1,095 438 (307 ) 1,231 Operating (loss) income (5 ) (24 ) 90 — 61 Interest expense (income), net 64 7 (7 ) — 64 (Loss) earnings before income taxes (69 ) (31 ) 97 — (3 ) Income tax (benefit) expense (14 ) (45 ) 45 — (14 ) Share in earnings of equity accounted investees 66 52 — (118 ) — Net earnings 11 66 52 (118 ) 11 Other comprehensive loss (69 ) (67 ) (57 ) 124 (69 ) Comprehensive loss (58 ) (1 ) (5 ) 6 (58 ) For the nine months ended September 30, 2015 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS AND Guarantor Guarantor Consolidating COMPREHENSIVE LOSS Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 3,266 1,583 (899 ) 3,950 Operating expenses Cost of sales, excluding depreciation and amortization — 2,867 1,172 (899 ) 3,140 Depreciation and amortization — 191 79 — 270 Selling, general and administrative 10 108 176 — 294 Impairment and write-down of property, plant and equipment — 57 — — 57 Closure and restructuring costs — 2 1 — 3 Other operating loss (income), net 4 — (12 ) — (8 ) 14 3,225 1,416 (899 ) 3,756 Operating (loss) income (14 ) 41 167 — 194 Interest expense (income), net 115 21 (21 ) — 115 (Loss) earnings before income taxes (129 ) 20 188 — 79 Income tax (benefit) expense (30 ) (41 ) 65 — (6 ) Share in earnings of equity accounted investees 184 123 — (307 ) — Net earnings 85 184 123 (307 ) 85 Other comprehensive loss (194 ) (194 ) (179 ) 373 (194 ) Comprehensive loss (109 ) (10 ) (56 ) 66 (109 ) For the three months ended September 30, 2014 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS AND Guarantor Guarantor Consolidating COMPREHENSIVE INCOME (LOSS) Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 1,125 560 (280 ) 1,405 Operating expenses Cost of sales, excluding depreciation and amortization — 961 424 (280 ) 1,105 Depreciation and amortization — 67 29 — 96 Selling, general and administrative 5 49 45 — 99 Closure and restructuring costs — — 2 — 2 Other operating loss (income), net 1 (18 ) — — (17 ) 6 1,059 500 (280 ) 1,285 Operating (loss) income (6 ) 66 60 — 120 Interest expense (income), net 25 7 (7 ) — 25 (Loss) earnings before income taxes (31 ) 59 67 — 95 Income tax (benefit) expense (9 ) (198 ) 21 — (186 ) Share in earnings of equity accounted investees 303 46 — (349 ) — Net earnings 281 303 46 (349 ) 281 Other comprehensive loss — (11 ) (116 ) — (127 ) Comprehensive income (loss) 281 292 (70 ) (349 ) 154 For the nine months ended September 30, 2014 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS AND Guarantor Guarantor Consolidating COMPREHENSIVE INCOME (LOSS) Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 3,325 1,684 (825 ) 4,184 Operating expenses Cost of sales, excluding depreciation and amortization — 2,810 1,331 (825 ) 3,316 Depreciation and amortization — 200 91 — 291 Selling, general and administrative 23 164 126 — 313 Closure and restructuring costs — 1 2 — 3 Other operating loss (income), net 1 (17 ) (1 ) — (17 ) 24 3,158 1,549 (825 ) 3,906 Operating (loss) income (24 ) 167 135 — 278 Interest expense (income), net 75 19 (18 ) — 76 (Loss) earnings before income taxes (99 ) 148 153 — 202 Income tax (benefit) expense (26 ) (175 ) 43 — (158 ) Share in earnings of equity accounted investees 433 110 — (543 ) — Net earnings 360 433 110 (543 ) 360 Other comprehensive income (loss) 1 (3 ) (124 ) — (126 ) Comprehensive income (loss) 361 430 (14 ) (543 ) 234 September 30, 2015 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING BALANCE SHEET Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Assets Current assets Cash and cash equivalents 26 15 87 — 128 Receivables — 377 240 — 617 Inventories — 526 225 — 751 Prepaid expenses 10 5 10 — 25 Income and other taxes receivable 62 — 16 (61 ) 17 Intercompany accounts 765 4,790 21 (5,576 ) — Deferred income taxes — 55 27 — 82 Total current assets 863 5,768 626 (5,637 ) 1,620 Property, plant and equipment, at cost — 6,250 2,464 — 8,714 Accumulated depreciation — (4,219 ) (1,623 ) — (5,842 ) Net property, plant and equipment — 2,031 841 — 2,872 Goodwill — 296 250 — 546 Intangible assets, net of amortization — 257 359 — 616 Investments in affiliates 8,005 2,092 — (10,097 ) — Intercompany long-term advances 6 84 568 (658 ) — Other assets 48 9 127 (49 ) 135 Total assets 8,922 10,537 2,771 (16,441 ) 5,789 Liabilities and shareholders' equity Current liabilities Bank indebtedness — 1 — — 1 Trade and other payables 59 455 207 — 721 Intercompany accounts 4,787 717 72 (5,576 ) — Income and other taxes payable — 64 20 (61 ) 23 Long-term debt due within one year 38 3 1 — 42 Total current liabilities 4,884 1,240 300 (5,637 ) 787 Long-term debt 936 300 9 — 1,245 Intercompany long-term loans 418 240 — (658 ) — Deferred income taxes and other 8 577 208 (49 ) 744 Other liabilities and deferred credits 17 175 162 — 354 Shareholders' equity 2,659 8,005 2,092 (10,097 ) 2,659 Total liabilities and shareholders' equity 8,922 10,537 2,771 (16,441 ) 5,789 December 31, 2014 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING BALANCE SHEET Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Assets Current assets Cash and cash equivalents 79 18 77 — 174 Receivables — 370 258 — 628 Inventories — 495 219 — 714 Prepaid expenses 11 7 7 — 25 Income and other taxes receivable 37 — 17 — 54 Intercompany accounts 977 4,613 13 (5,603 ) — Deferred income taxes — 40 35 — 75 Total current assets 1,104 5,543 626 (5,603 ) 1,670 Property, plant and equipment, at cost — 6,119 2,790 — 8,909 Accumulated depreciation — (3,985 ) (1,793 ) — (5,778 ) Net property, plant and equipment — 2,134 997 — 3,131 Goodwill — 296 271 — 567 Intangible assets, net of amortization — 263 398 — 661 Investments in affiliates 8,015 2,153 — (10,168 ) — Intercompany long-term advances 6 80 434 (520 ) — Other assets 31 11 135 (21 ) 156 Total assets 9,156 10,480 2,861 (16,312 ) 6,185 Liabilities and shareholders' equity Current liabilities Bank indebtedness — 10 — — 10 Trade and other payables 69 409 243 — 721 Intercompany accounts 4,582 925 96 (5,603 ) — Income and other taxes payable 2 9 15 — 26 Long-term debt due within one year 166 2 1 — 169 Total current liabilities 4,819 1,355 355 (5,603 ) 926 Long-term debt 1,168 2 11 — 1,181 Intercompany long-term loans 260 260 — (520 ) — Deferred income taxes and other — 675 156 (21 ) 810 Other liabilities and deferred credits 19 173 186 — 378 Shareholders' equity 2,890 8,015 2,153 (10,168 ) 2,890 Total liabilities and shareholders' equity 9,156 10,480 2,861 (16,312 ) 6,185 For the nine months ended September 30, 2015 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Operating activities Net earnings 85 184 123 (307 ) 85 Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings 231 (320 ) 13 307 231 Cash flows provided from (used for) operating activities 316 (136 ) 136 — 316 Investing activities Additions to property, plant and equipment — (143 ) (59 ) — (202 ) Proceeds from disposals of property, plant and equipment — 7 28 — 35 Other — — 9 — 9 Cash flows used for investing activities — (136 ) (22 ) — (158 ) Financing activities Dividend payments (75 ) — — — (75 ) Stock repurchase (50 ) — — — (50 ) Net change in bank indebtedness — (9 ) — — (9 ) Change in revolving bank credit facility 75 — — — 75 Issuance of long-term debt — 300 — — 300 Repayment of long-term debt (436 ) (2 ) (1 ) — (439 ) Increase in long-term advances to related parties — (20 ) (96 ) 116 — Decrease in long-term advances to related parties 116 — — (116 ) — Other 1 — — — 1 Cash flows (used for) provided from financing activities (369 ) 269 (97 ) — (197 ) Net (decrease) increase in cash and cash equivalents (53 ) (3 ) 17 — (39 ) Impact of foreign exchange on cash — — (7 ) — (7 ) Cash and cash equivalents at beginning of period 79 18 77 — 174 Cash and cash equivalents at end of period 26 15 87 — 128 For the nine months ended September 30, 2014 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Operating activities Net earnings 360 433 110 (543 ) 360 Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings (183 ) (354 ) 82 543 88 Cash flows provided from operating activities 177 79 192 — 448 Investing activities Additions to property, plant and equipment — (116 ) (41 ) — (157 ) Proceeds from disposals of property, plant and equipment — — 1 — 1 Acquisition of business, net of cash acquired — — (546 ) — (546 ) Other — — 5 — 5 Cash flows used for investing activities — (116 ) (581 ) — (697 ) Financing activities Dividend payments (60 ) — — — (60 ) Stock repurchase (19 ) — — — (19 ) Net change in bank indebtedness (1 ) (11 ) (1 ) — (13 ) Change in revolving bank credit facility (160 ) — — — (160 ) Proceeds from receivable securitization facilities — — 90 — 90 Payments on receivable securitization facilities — — (108 ) — (108 ) Repayment of long-term debt — (3 ) (1 ) — (4 ) Increase in long-term advances to related parties (352 ) — — 352 — Decrease in long-term advances to related parties — 38 314 (352 ) — Other 3 — 1 — 4 Cash flows (used for) provided from financing activities (589 ) 24 295 — (270 ) Net decrease in cash and cash equivalents (412 ) (13 ) (94 ) — (519 ) Imact of foreign exchange on cash — — (2 ) — (2 ) Cash and cash equivalents at beginning of period 439 22 194 — 655 Cash and cash equivalents at end of period 27 9 98 — 134 |
Recent Accounting Pronounceme28
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Discontinued Operations | DISCONTINUED OPERATIONS In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, an update on Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in this update change the requirements for reporting discontinued operations and require additional disclosures for both disposal transactions that meet the criteria for a discontinued operation and disposals that do not meet these criteria. The objective of this update is to reach a greater convergence between the FASB’s and IASB’s reporting requirements for discontinued operations. The Company adopted the new requirement on January 1, 2015 with no impact on the Company’s consolidated financial statements, as no triggering event occurred throughout the period. |
Future Accounting Changes [Member] | |
Revenue Recognition | REVENUE FROM CONTRACTS WITH CUSTOMERS In May 2014, the FASB issued ASU 2014-09, an update on revenue from contracts with customers. The core principal of this guideline is that an entity should recognize revenue, to depict the transfer of promised goods or services to customers, in an amount that reflects the consideration for which the entity is entitled to, in exchange for those goods and services. Guidance in this section supersedes the revenue recognition requirements found in topic 605. In August 2015, the FASB issued ASU 2015-14, which defers by one year ASU 2014-09’s effective date. The amendment will be effective for annual reporting periods beginning after December 15, 2017 including interim periods within that reporting period. Early adoption is permitted only for annual and interim periods beginning after December 15, 2016. The Company is currently evaluating these changes to determine whether they have an impact on the presentation of the consolidated financial statements. |
Cloud Computing Arrangements | CLOUD COMPUTING ARRANGEMENTS In April 2015, the FASB issued ASU 2015-05, which clarifies the circumstances under which a cloud computing customer would account for a cloud computing arrangement as a license of internal-use software under Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40). The amendments provide customers with guidance on determining whether or not, a cloud computing arrangement includes a software license that should be accounted as an internal-use software. The amendments in this update are effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. The Company does not expect this additional guidance to have a material impact on the consolidated financial statements. |
Inventory | INVENTORY In July 2015, the FASB issued ASU 2015-11, an update on Inventory. The amendments in this update require entities to measure most inventory at the lower of cost and net realizable value, therefore simplifying the current guidance under which an entity must measure inventory at the lower of cost or market, which in this context, was defined as one of three different measures and was unnecessarily complex. The amendment does not apply to inventory that has been valued using the Last-in First-out (“LIFO”) method or the Retail inventory method (“RIM”). The amendments in this update are effective for interim and annual periods beginning after December 15, 2016. The amendments should be applied prospectively and early adoption is permitted. The Company does not expect this additional guidance to have a material impact on the consolidated financial statements. |
Acquisition of Business (Tables
Acquisition of Business (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Laboratorios Indas [Member] | |
Fair Value of Assets Acquired | The table below illustrates the purchase price allocation: Fair value of net assets acquired at the date of acquisition Receivables $ 101 Inventory 28 Income and other taxes receivable 3 Property, plant and equipment 72 Intangible assets Customer relationships (1) 142 Trade names (2) 140 Catalog rights (2) 46 328 Goodwill 234 Deferred income tax assets 16 Total assets 782 Less: Liabilities Trade and other payables 71 Income and other taxes payable 3 Long-term debt (including short-term portion) 42 Deferred income tax liabilities 119 Other liabilities and deferred credits 1 Total liabilities 236 Fair value of net assets acquired at the date of acquisition 546 (1) The useful life of Customer relationships acquired is between 10-20 years. (2) Indefinite useful life. |
Derivatives and Hedging Activ30
Derivatives and Hedging Activities and Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments for Natural Gas Contracts Outstanding | The following table presents the volumes under derivative financial instruments for natural gas contracts outstanding as of September 30, 2015 to hedge forecasted purchases: Commodity Notional contractual quantity under derivative contracts Notional contractual value under derivative contracts (in millions of dollars) Percentage of forecasted purchases under derivative contracts Natural Gas 2015 (1) 2,490,000 MMBTU (2) $ 10 56% 2016 9,300,000 MMBTU (2) $ 37 45% 2017 3,015,000 MMBTU (2) $ 12 15% (1) Represents the remaining three months of 2015 (2) MMBTU: Millions of British thermal units |
Currency Values under Significant Contracts Pursuant to Currency Options Outstanding | The following table presents the currency values under significant contracts pursuant to currency options outstanding as of September 30, 2015 to hedge forecasted purchases and sales: Currency exposure hedged Business Segment Year of maturity Notional contractual value Percentage of forecasted net exposures under contracts Protection rate Obligation rate 2015 CDN/USD Pulp and Paper 100 CDN 52% 1 USD = 1.1200 1 USD = 1.1666 USD/Euro Personal Care 15 USD 74% 1 Euro = 1.2571 1 Euro = 1.2571 Euro/USD Pulp and Paper 11 EUR 75% 1 Euro = 1.1594 1 Euro = 1.1594 2016 CDN/USD Pulp and Paper 350 CDN 45% 1 USD = 1.1635 1 USD = 1.2108 USD/Euro Personal Care 54 USD 75% 1 Euro = 1.0851 1 Euro = 1.1724 Euro/USD Pulp and Paper 15 EUR 25% 1 Euro = 1.1629 1 Euro = 1.1629 2017 CDN/USD Pulp and Paper 135 CDN 17% 1 USD = 1.2268 1 USD = 1.2912 |
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 (c) below) at September 30, 2015 and December 31, 2014, 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: September 30, 2015 Quoted prices in active markets for identical assets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Balance sheet classification $ $ $ $ Derivatives designated under the Derivatives and Hedging Topic of FASB ASC: Asset derivatives Currency derivatives 5 — 5 — (a) Prepaid expenses Currency derivatives 2 — 2 — (a) Other assets Total Assets 7 — 7 — Liabilities derivatives Currency derivatives 37 — 37 — (a) Trade and other payables Currency derivatives 12 — 12 — (a) Other Natural gas swap contracts 12 — 12 — (a) Trade and other payables Natural gas swap contracts 5 — 5 — (a) Other liabilities and deferred credits Total Liabilities 66 — 66 — Other Instruments: Asset backed notes ("ABN") 1 — — 1 (b) Other assets Long-term debt 1,301 — 1,301 — (c) Long-term debt The cumulative loss recorded in Other comprehensive loss relating to natural gas contracts of $17 million at September 30, 2015, will be recognized in Cost of sales upon maturity of the derivatives over the next 27 months at the then prevailing values, which may be different from those at September 30, 2015. The cumulative loss recorded in Other comprehensive loss relating to currency options and forwards hedging forecasted purchases of $42 million at September 30, 2015, will be recognized in Cost of sales or Sales upon maturity of the derivatives over the next 24 months at the then prevailing values, which may be different from those at September 30, 2015. Fair Value of financial instruments at: December 31, 2014 Quoted prices in active markets for identical assets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Balance sheet classification $ $ $ $ Derivatives designated under the Derivatives and Hedging Topic of FASB ASC: Asset derivatives Currency derivatives 7 — 7 — (a) Prepaid expenses Currency derivatives 3 — 3 — (a) Other assets Total Assets 10 — 10 — Liabilities derivatives Currency derivatives 14 — 14 — (a) Trade and other payables Currency derivatives 9 — 9 — (a) Other liabilities and deferred credits Natural gas swap contracts 13 — 13 — (a) Trade and other payables Natural gas swap contracts 6 — 6 — (a) Other liabilities and deferred credits Total Liabilities 42 — 42 — Other Instruments: Asset backed notes 11 — 10 1 (b) Other assets Long-term debt 1,475 — 1,475 — (c) Long-term debt (a) Fair value 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: Fair value is measured using techniques derived from the Black-Scholes pricing model. 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) ABN are reported at fair value utilizing Level 2 or Level 3 inputs. Fair value of ABN reported under Level 2 is based on current market quotes. Fair value of ABN reported under Level 3 is based on the value of the collateral investments held in the conduit issuer, reduced by the negative value of credit default derivatives, with an additional discount applied for illiquidity. These ABN are held outside of the Company’s pension plans. (c) Fair value of the Company’s long-term debt is measured by comparison to market prices of its debt. In accordance with US GAAP, the Company’s long-term debt is not carried at fair value on the Consolidated Balance Sheets at September 30, 2015 and December 31, 2014. However, fair value disclosure is required. The carrying value of the Company’s long-term debt is $1,287 million and $1,350 million at September 30, 2015 and December 31, 2014, respectively. |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Reconciliation Between Basic and Diluted Earnings Per Common Share | The following table provides the reconciliation between basic and diluted earnings per common share: For the three months ended For the nine months ended September 30, September 30, September 30, September 30, 2015 2014 2015 2014 Net earnings $ 11 $ 281 $ 85 $ 360 Weighted average number of common shares outstanding (millions) 62.9 64.8 63.4 64.9 Effect of dilutive securities (millions) 0.1 0.1 0.1 0.1 Weighted average number of diluted common shares outstanding (millions) 63.0 64.9 63.5 65.0 Basic net earnings per common share (in dollars) $ 0.17 $ 4.34 $ 1.34 $ 5.55 Diluted $ 0.17 $ 4.33 $ 1.34 $ 5.54 |
Securities that Could Potentially Dilute Basic Earnings Per Common Share in Future | The following table provides the securities that could potentially dilute basic earnings per common share in the future, but were not included in the computation of diluted earnings per common share because to do so would have been anti-dilutive: For the three months ended For the nine months ended September 30, September 30, September 30, September 30, 2015 2014 2015 2014 Options 110,219 399,059 137,191 263,012 |
Pension Plans and Other Post-32
Pension Plans and Other Post-Retirement Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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 nine months ended September 30, 2015 September 30, 2015 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 9 — 27 2 Interest expense 16 1 49 3 Expected return on plan assets (23 ) — (70 ) — Amortization of net actuarial loss 1 — 5 — Amortization of prior year service costs 1 — 2 — Net periodic benefit cost 4 1 13 5 Components of net periodic benefit cost for pension plans and other post-retirement benefit plans: For the three months ended For the nine months ended September 30, 2014 September 30, 2014 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 9 1 27 2 Interest expense 20 — 60 3 Expected return on plan assets (27 ) — (79 ) — Amortization of net actuarial loss 2 — 7 — Amortization of prior year service costs 2 — 3 — Net periodic benefit cost 6 1 18 5 |
Other Operating Income, Net (Ta
Other Operating Income, Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other Income And Expenses [Abstract] | |
Components of Other Operating Income, Net | The Company’s other operating income, net includes the following: For the three months ended For the nine months ended September 30, September 30, September 30, September 30, 2015 2014 2015 2014 $ $ $ $ Alternative fuel tax credits — (18 ) — (18 ) Gain on sale of property, plant and equipment (1) — — (15 ) — Bad debt expense (1 ) — 4 — Environmental provision 4 1 4 1 Foreign exchange (gain) loss (3 ) 1 (3 ) — Other — (1 ) 2 — Other operating income, net — (17 ) (8 ) (17 ) (1) Effective June 23, 2015, Domtar finalized the previously announced sale of its Gatineau properties. Payment of $26 million (CDN $32 million) was received on July 3, 2015. As a result, the Company recorded a gain on sale of property, plant and equipment of $10 million (CDN $12 million) in the second quarter of 2015. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The following table presents the components of inventories: September 30, December 31, 2015 2014 $ $ Work in process and finished goods 416 395 Raw materials 138 123 Operating and maintenance supplies 197 196 751 714 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Value of Goodwill | The carrying value and any changes in the carrying value of goodwill are as follows: September 30, 2015 $ Balance at December 31, 2014 567 Effect of foreign currency exchange rate change (21 ) Balance at end of period 546 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Components of Intangible Assets | The following table presents the components of intangible assets: September 30, December 31, 2015 2014 Estimated useful lives (in years) Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net $ $ $ $ $ $ Intangible assets subject to amortization Water rights 40 7 (1 ) 6 8 (1 ) 7 Customer relationships 10 - 40 358 (42 ) 316 374 (32 ) 342 Technology 7 - 20 8 (2 ) 6 8 (2 ) 6 Non-Compete 9 1 - 1 1 — 1 License rights 12 28 (5 ) 23 29 (4 ) 25 402 (50 ) 352 420 (39 ) 381 Intangible assets not subject to amortization Trade names 220 - 220 233 — 233 License rights 6 - 6 6 — 6 Catalog rights 38 - 38 41 — 41 Total 666 (50 ) 616 700 (39 ) 661 |
Amortization Expense Related to Intangible Assets | Amortization expense for the next five years related to intangible assets is expected to be as follows: 2015 2016 2017 2018 2019 $ $ $ $ $ Amortization expense related to intangible assets 19 19 19 19 18 |
Changes in Accumulated Other 37
Changes in Accumulated Other Comprehensive Loss by Component (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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) Net (losses) hedges Pension items (2) Post-retirement benefit items (2) Foreign currency items Total $ $ $ $ $ Balance at December 31, 2014 (15 ) (192 ) (13 ) (48 ) (268 ) Natural gas swap contracts (6 ) N/A N/A N/A (6 ) Currency options (33 ) N/A N/A N/A (33 ) Forward contracts 4 N/A N/A N/A 4 Foreign currency items N/A N/A N/A (182 ) (182 ) Net gain N/A — — N/A — Other comprehensive loss before reclassifications (35 ) — — (182 ) (217 ) Amounts reclassified from Accumulated other comprehensive loss 18 5 — — 23 Net current period other comprehensive (loss) income (17 ) 5 — (182 ) (194 ) Balance at September 30, 2015 (32 ) (187 ) (13 ) (230 ) (462 ) Balance at December 31, 2013 — (210 ) (7 ) 152 (65 ) Natural gas swap contracts 1 N/A N/A N/A 1 Currency options (7 ) N/A N/A N/A (7 ) Forward contracts 1 N/A N/A N/A 1 Foreign currency items N/A N/A N/A (130 ) (130 ) Remeasurement of pension plan obligation N/A (3 ) N/A N/A (3 ) Other comprehensive loss before reclassifications (5 ) (3 ) — (130 ) (138 ) Amounts reclassified from Accumulated other comprehensive loss 5 7 — — 12 Net current period other comprehensive income (loss) — 4 — (130 ) (126 ) Balance at September 30, 2014 — (206 ) (7 ) 22 (191 ) (1) All amounts are after tax. Amounts in parenthesis indicate losses. (2) The accrued 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 Amount reclassified from Accumulated other comprehensive loss For the three months ended September 30, 2015 September 30, 2014 Net derivative gains on cash flow hedges Natural gas swap contracts 2 — (1) Currency options and forwards 10 2 (1) Total before tax 12 2 Tax expense (5 ) — Net of tax 7 2 Amortization of defined benefit pension items Amortization of net actuarial loss and prior year service cost 2 4 (2) Tax expense (1 ) (2 ) Net of tax 1 2 Details about Accumulated other comprehensive loss components Amount reclassified from Accumulated other comprehensive loss For the nine months ended September 30, 2015 September 30, 2014 Net derivative gains (losses) on cash flow hedges Natural gas swap contracts 11 (3 ) (1) Currency options and forwards 20 11 (1) Total before tax 31 8 Tax expense (13 ) (3 ) Net of tax 18 5 Amortization of defined benefit pension items Amortization of net actuarial loss and prior year service cost 7 10 (2) Tax expense (2 ) (3 ) Net of tax 5 7 (1) These amounts are included in Cost of Sales in the Consolidated Statements of Earnings and Comprehensive (Loss) Income. (2) These amounts are included in the computation of net periodic benefit cost. Refer to Note 6 “Pension plans and other post-retirement benefit plans” for additional details. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Environmental Remediation Obligations [Abstract] | |
Changes in Reserve for Environmental Remediation and Asset Retirement Obligations | The following table reflects changes in the reserve for environmental remediation and asset retirement obligations: September 30, 2015 $ Balance at beginning of period 60 Additions 4 Environmental spending (2 ) Effect of foreign currency exchange rate change (6 ) Balance at end of period 56 |
Segment Disclosures (Tables)
Segment Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Analysis and Reconciliation of Reportable Segment Information | An analysis and reconciliation of the Company’s reportable segment information to the respective information in the financial statements is as follows: For the three months ended For the nine months ended September 30, September 30, September 30, September 30, SEGMENT DATA 2015 2014 2015 2014 $ $ $ $ Sales Pulp and Paper 1,092 1,186 3,348 3,514 Personal Care 214 231 648 698 Total for reportable segments 1,306 1,417 3,996 4,212 Intersegment sales (14 ) (12 ) (46 ) (28 ) Consolidated sales 1,292 1,405 3,950 4,184 Depreciation and amortization and impairment and write-down of property, plant and equipment Pulp and Paper 75 79 224 241 Personal Care 14 17 46 50 Total for reportable segments 89 96 270 291 Impairment and write-down of property, plant and equipment - Pulp and Paper 20 — 57 — Consolidated depreciation and amortization and impairment and write-down of property, plant and equipment 109 96 327 291 Operating income (loss) 1 Pulp and Paper 54 101 184 264 Personal Care 18 12 45 38 Corporate (11 ) 7 (35 ) (24 ) Consolidated operating income 61 120 194 278 Interest expense, net 64 25 115 76 (Loss) earnings before income taxes (3 ) 95 79 202 Income tax benefit (14 ) (186 ) (6 ) (158 ) Net earnings 11 281 85 360 1 As a result of changes in the Company’s organization structure, the Company has changed the way it allocates certain Corporate general and administrative costs to the segments. Further, certain Corporate costs not related to segment activities, as well as the mark-to-market impact on stock-based compensation awards, will be presented on the Corporate line. As a result, the Company has revised its 2014 segment disclosures to conform to its 2015 presentation. (Previously reported numbers for Operating income (loss) for the three and nine months ended September 30, 2014 are as follows; Pulp and Paper $109 million and $247 million, respectively, Personal Care: $13 million and $42 million, respectively, Corporate: $(2) million and $(11) million, respectively). |
Supplemental Guarantor Financ40
Supplemental Guarantor Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Condensed Consolidating Statement of Earnings and Comprehensive Income (Loss) | For the three months ended September 30, 2015 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS AND Guarantor Guarantor Consolidating COMPREHENSIVE LOSS Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 1,071 528 (307 ) 1,292 Operating expenses Cost of sales, excluding depreciation and amortization — 975 358 (307 ) 1,026 Depreciation and amortization — 62 27 — 89 Selling, general and administrative 2 36 57 — 95 Impairment and write-down of property, plant and equipment — 20 — — 20 Closure and restructuring costs — 1 — — 1 Other operating loss (income), net 3 1 (4 ) — — 5 1,095 438 (307 ) 1,231 Operating (loss) income (5 ) (24 ) 90 — 61 Interest expense (income), net 64 7 (7 ) — 64 (Loss) earnings before income taxes (69 ) (31 ) 97 — (3 ) Income tax (benefit) expense (14 ) (45 ) 45 — (14 ) Share in earnings of equity accounted investees 66 52 — (118 ) — Net earnings 11 66 52 (118 ) 11 Other comprehensive loss (69 ) (67 ) (57 ) 124 (69 ) Comprehensive loss (58 ) (1 ) (5 ) 6 (58 ) For the nine months ended September 30, 2015 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS AND Guarantor Guarantor Consolidating COMPREHENSIVE LOSS Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 3,266 1,583 (899 ) 3,950 Operating expenses Cost of sales, excluding depreciation and amortization — 2,867 1,172 (899 ) 3,140 Depreciation and amortization — 191 79 — 270 Selling, general and administrative 10 108 176 — 294 Impairment and write-down of property, plant and equipment — 57 — — 57 Closure and restructuring costs — 2 1 — 3 Other operating loss (income), net 4 — (12 ) — (8 ) 14 3,225 1,416 (899 ) 3,756 Operating (loss) income (14 ) 41 167 — 194 Interest expense (income), net 115 21 (21 ) — 115 (Loss) earnings before income taxes (129 ) 20 188 — 79 Income tax (benefit) expense (30 ) (41 ) 65 — (6 ) Share in earnings of equity accounted investees 184 123 — (307 ) — Net earnings 85 184 123 (307 ) 85 Other comprehensive loss (194 ) (194 ) (179 ) 373 (194 ) Comprehensive loss (109 ) (10 ) (56 ) 66 (109 ) For the three months ended September 30, 2014 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS AND Guarantor Guarantor Consolidating COMPREHENSIVE INCOME (LOSS) Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 1,125 560 (280 ) 1,405 Operating expenses Cost of sales, excluding depreciation and amortization — 961 424 (280 ) 1,105 Depreciation and amortization — 67 29 — 96 Selling, general and administrative 5 49 45 — 99 Closure and restructuring costs — — 2 — 2 Other operating loss (income), net 1 (18 ) — — (17 ) 6 1,059 500 (280 ) 1,285 Operating (loss) income (6 ) 66 60 — 120 Interest expense (income), net 25 7 (7 ) — 25 (Loss) earnings before income taxes (31 ) 59 67 — 95 Income tax (benefit) expense (9 ) (198 ) 21 — (186 ) Share in earnings of equity accounted investees 303 46 — (349 ) — Net earnings 281 303 46 (349 ) 281 Other comprehensive loss — (11 ) (116 ) — (127 ) Comprehensive income (loss) 281 292 (70 ) (349 ) 154 For the nine months ended September 30, 2014 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS AND Guarantor Guarantor Consolidating COMPREHENSIVE INCOME (LOSS) Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 3,325 1,684 (825 ) 4,184 Operating expenses Cost of sales, excluding depreciation and amortization — 2,810 1,331 (825 ) 3,316 Depreciation and amortization — 200 91 — 291 Selling, general and administrative 23 164 126 — 313 Closure and restructuring costs — 1 2 — 3 Other operating loss (income), net 1 (17 ) (1 ) — (17 ) 24 3,158 1,549 (825 ) 3,906 Operating (loss) income (24 ) 167 135 — 278 Interest expense (income), net 75 19 (18 ) — 76 (Loss) earnings before income taxes (99 ) 148 153 — 202 Income tax (benefit) expense (26 ) (175 ) 43 — (158 ) Share in earnings of equity accounted investees 433 110 — (543 ) — Net earnings 360 433 110 (543 ) 360 Other comprehensive income (loss) 1 (3 ) (124 ) — (126 ) Comprehensive income (loss) 361 430 (14 ) (543 ) 234 |
Condensed Consolidating Balance Sheet | September 30, 2015 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING BALANCE SHEET Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Assets Current assets Cash and cash equivalents 26 15 87 — 128 Receivables — 377 240 — 617 Inventories — 526 225 — 751 Prepaid expenses 10 5 10 — 25 Income and other taxes receivable 62 — 16 (61 ) 17 Intercompany accounts 765 4,790 21 (5,576 ) — Deferred income taxes — 55 27 — 82 Total current assets 863 5,768 626 (5,637 ) 1,620 Property, plant and equipment, at cost — 6,250 2,464 — 8,714 Accumulated depreciation — (4,219 ) (1,623 ) — (5,842 ) Net property, plant and equipment — 2,031 841 — 2,872 Goodwill — 296 250 — 546 Intangible assets, net of amortization — 257 359 — 616 Investments in affiliates 8,005 2,092 — (10,097 ) — Intercompany long-term advances 6 84 568 (658 ) — Other assets 48 9 127 (49 ) 135 Total assets 8,922 10,537 2,771 (16,441 ) 5,789 Liabilities and shareholders' equity Current liabilities Bank indebtedness — 1 — — 1 Trade and other payables 59 455 207 — 721 Intercompany accounts 4,787 717 72 (5,576 ) — Income and other taxes payable — 64 20 (61 ) 23 Long-term debt due within one year 38 3 1 — 42 Total current liabilities 4,884 1,240 300 (5,637 ) 787 Long-term debt 936 300 9 — 1,245 Intercompany long-term loans 418 240 — (658 ) — Deferred income taxes and other 8 577 208 (49 ) 744 Other liabilities and deferred credits 17 175 162 — 354 Shareholders' equity 2,659 8,005 2,092 (10,097 ) 2,659 Total liabilities and shareholders' equity 8,922 10,537 2,771 (16,441 ) 5,789 December 31, 2014 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING BALANCE SHEET Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Assets Current assets Cash and cash equivalents 79 18 77 — 174 Receivables — 370 258 — 628 Inventories — 495 219 — 714 Prepaid expenses 11 7 7 — 25 Income and other taxes receivable 37 — 17 — 54 Intercompany accounts 977 4,613 13 (5,603 ) — Deferred income taxes — 40 35 — 75 Total current assets 1,104 5,543 626 (5,603 ) 1,670 Property, plant and equipment, at cost — 6,119 2,790 — 8,909 Accumulated depreciation — (3,985 ) (1,793 ) — (5,778 ) Net property, plant and equipment — 2,134 997 — 3,131 Goodwill — 296 271 — 567 Intangible assets, net of amortization — 263 398 — 661 Investments in affiliates 8,015 2,153 — (10,168 ) — Intercompany long-term advances 6 80 434 (520 ) — Other assets 31 11 135 (21 ) 156 Total assets 9,156 10,480 2,861 (16,312 ) 6,185 Liabilities and shareholders' equity Current liabilities Bank indebtedness — 10 — — 10 Trade and other payables 69 409 243 — 721 Intercompany accounts 4,582 925 96 (5,603 ) — Income and other taxes payable 2 9 15 — 26 Long-term debt due within one year 166 2 1 — 169 Total current liabilities 4,819 1,355 355 (5,603 ) 926 Long-term debt 1,168 2 11 — 1,181 Intercompany long-term loans 260 260 — (520 ) — Deferred income taxes and other — 675 156 (21 ) 810 Other liabilities and deferred credits 19 173 186 — 378 Shareholders' equity 2,890 8,015 2,153 (10,168 ) 2,890 Total liabilities and shareholders' equity 9,156 10,480 2,861 (16,312 ) 6,185 |
Condensed Consolidating Statement of Cash Flows | For the nine months ended September 30, 2015 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Operating activities Net earnings 85 184 123 (307 ) 85 Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings 231 (320 ) 13 307 231 Cash flows provided from (used for) operating activities 316 (136 ) 136 — 316 Investing activities Additions to property, plant and equipment — (143 ) (59 ) — (202 ) Proceeds from disposals of property, plant and equipment — 7 28 — 35 Other — — 9 — 9 Cash flows used for investing activities — (136 ) (22 ) — (158 ) Financing activities Dividend payments (75 ) — — — (75 ) Stock repurchase (50 ) — — — (50 ) Net change in bank indebtedness — (9 ) — — (9 ) Change in revolving bank credit facility 75 — — — 75 Issuance of long-term debt — 300 — — 300 Repayment of long-term debt (436 ) (2 ) (1 ) — (439 ) Increase in long-term advances to related parties — (20 ) (96 ) 116 — Decrease in long-term advances to related parties 116 — — (116 ) — Other 1 — — — 1 Cash flows (used for) provided from financing activities (369 ) 269 (97 ) — (197 ) Net (decrease) increase in cash and cash equivalents (53 ) (3 ) 17 — (39 ) Impact of foreign exchange on cash — — (7 ) — (7 ) Cash and cash equivalents at beginning of period 79 18 77 — 174 Cash and cash equivalents at end of period 26 15 87 — 128 For the nine months ended September 30, 2014 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Operating activities Net earnings 360 433 110 (543 ) 360 Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings (183 ) (354 ) 82 543 88 Cash flows provided from operating activities 177 79 192 — 448 Investing activities Additions to property, plant and equipment — (116 ) (41 ) — (157 ) Proceeds from disposals of property, plant and equipment — — 1 — 1 Acquisition of business, net of cash acquired — — (546 ) — (546 ) Other — — 5 — 5 Cash flows used for investing activities — (116 ) (581 ) — (697 ) Financing activities Dividend payments (60 ) — — — (60 ) Stock repurchase (19 ) — — — (19 ) Net change in bank indebtedness (1 ) (11 ) (1 ) — (13 ) Change in revolving bank credit facility (160 ) — — — (160 ) Proceeds from receivable securitization facilities — — 90 — 90 Payments on receivable securitization facilities — — (108 ) — (108 ) Repayment of long-term debt — (3 ) (1 ) — (4 ) Increase in long-term advances to related parties (352 ) — — 352 — Decrease in long-term advances to related parties — 38 314 (352 ) — Other 3 — 1 — 4 Cash flows (used for) provided from financing activities (589 ) 24 295 — (270 ) Net decrease in cash and cash equivalents (412 ) (13 ) (94 ) — (519 ) Imact of foreign exchange on cash — — (2 ) — (2 ) Cash and cash equivalents at beginning of period 439 22 194 — 655 Cash and cash equivalents at end of period 27 9 98 — 134 |
Acquisition of Business - Addit
Acquisition of Business - Additional Information (Detail) € in Millions, $ in Millions | Jan. 02, 2014USD ($)EmployeesFacility | Jan. 02, 2014EUR (€)EmployeesFacility | Sep. 30, 2015 | Sep. 30, 2014USD ($) |
Business Acquisition [Line Items] | ||||
Purchase price | $ | $ 546 | |||
Laboratorios Indas [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquisition completion date | Jan. 2, 2014 | |||
Acquisition percentage | 100.00% | 100.00% | ||
Acquisition of business, number of employees | Employees | 570 | 570 | ||
Number of facilities | 2 | 2 | ||
Purchase price | $ 546 | € 399 | ||
Cash acquired in acquisition | $ 46 | € 34 |
Acquisition of Business - Fair
Acquisition of Business - Fair Value of Assets Acquired - Laboratorios Indas (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | Jan. 02, 2014 |
Intangible assets | |||
Goodwill | $ 546 | $ 567 | |
Laboratorios Indas [Member] | |||
Business Acquisition [Line Items] | |||
Receivables | $ 101 | ||
Inventory | 28 | ||
Income and other taxes receivable | 3 | ||
Property, plant and equipment | 72 | ||
Intangible assets | |||
Intangible assets | 328 | ||
Goodwill | 234 | ||
Deferred income tax assets | 16 | ||
Total assets | 782 | ||
Less: Liabilities | |||
Trade and other payables | 71 | ||
Income and other taxes payable | 3 | ||
Long-term debt (including short-term portion) | 42 | ||
Deferred income tax liabilities | 119 | ||
Other liabilities and deferred credits | 1 | ||
Total liabilities | 236 | ||
Fair value of net assets acquired at the date of acquisition | 546 | ||
Laboratorios Indas [Member] | Trade Names [Member] | |||
Intangible assets | |||
Intangible assets | 140 | ||
Laboratorios Indas [Member] | Catalog Rights [Member] | |||
Intangible assets | |||
Intangible assets | 46 | ||
Laboratorios Indas [Member] | Customer Relationships [Member] | |||
Intangible assets | |||
Intangible assets | $ 142 |
Acquisition of Business - Fai43
Acquisition of Business - Fair Value of Assets Acquired - Laboratorios Indas (Parenthetical) (Detail) - Customer Relationships [Member] | Jan. 02, 2014 | Sep. 30, 2015 |
Minimum [Member] | ||
Business Acquisition [Line Items] | ||
Useful life of the finite lived intangible assets acquired | 10 years | |
Minimum [Member] | Laboratorios Indas [Member] | ||
Business Acquisition [Line Items] | ||
Useful life of the finite lived intangible assets acquired | 10 years | |
Maximum [Member] | ||
Business Acquisition [Line Items] | ||
Useful life of the finite lived intangible assets acquired | 40 years | |
Maximum [Member] | Laboratorios Indas [Member] | ||
Business Acquisition [Line Items] | ||
Useful life of the finite lived intangible assets acquired | 20 years |
Derivatives and Hedging Activ44
Derivatives and Hedging Activities and Fair Value Measurement - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 31, 2014USD ($) | Sep. 30, 2015USD ($)Customer | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)Customer | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Aug. 31, 2015USD ($) | Aug. 20, 2015USD ($) | |
Derivative [Line Items] | ||||||||
Number of major customers | Customer | 1 | 1 | ||||||
Receivables from major customers | $ 64,000,000 | $ 85,000,000 | $ 85,000,000 | $ 64,000,000 | ||||
Canadian Subsidiary [Member] | Canadian Dollars [Member] | ||||||||
Derivative [Line Items] | ||||||||
Length of time current hedges cover | 24 months | |||||||
U S Subsidiaries [Member] | Euros [Member] | ||||||||
Derivative [Line Items] | ||||||||
Length of time current hedges cover | 15 months | |||||||
U S Subsidiaries [Member] | British Pounds [Member] | ||||||||
Derivative [Line Items] | ||||||||
Length of time current hedges cover | 3 months | |||||||
European Subsidiaries [Member] | Swedish Krona [Member] | ||||||||
Derivative [Line Items] | ||||||||
Length of time current hedges cover | 12 months | |||||||
European Subsidiaries [Member] | US Dollars [Member] | ||||||||
Derivative [Line Items] | ||||||||
Length of time current hedges cover | 15 months | |||||||
Forecasted Natural Gas and Oil Purchases [Member] | ||||||||
Derivative [Line Items] | ||||||||
Length of time current hedges cover | 27 months | |||||||
Natural Gas Derivative Contracts [Member] | ||||||||
Derivative [Line Items] | ||||||||
Earnings hedge ineffectiveness | 0 | $ 0 | $ 0 | $ 0 | ||||
Loss recognized in Other comprehensive loss on derivatives (effective portion) | $ 17,000,000 | |||||||
Recognition of OCI in Cost of sales | 27 months | |||||||
Foreign Currency Investment [Member] | ||||||||
Derivative [Line Items] | ||||||||
Length of time current hedges cover | 3 years | |||||||
Currency Derivatives [Member] | ||||||||
Derivative [Line Items] | ||||||||
Earnings hedge ineffectiveness | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Loss recognized in Other comprehensive loss on derivatives (effective portion) | $ 42,000,000 | |||||||
Recognition of OCI in Cost of sales | 24 months | |||||||
10.75% Notes Due 2017 [Member] | ||||||||
Derivative [Line Items] | ||||||||
Debt, interest rate percentage | 10.75% | |||||||
Debt instrument redeemed | $ 215,000,000 | $ 215,000,000 | ||||||
2017 [Member] | Designated as Hedging [Member] | 10.75% Notes Due 2017 [Member] | ||||||||
Derivative [Line Items] | ||||||||
Derivative swap fixed interest rate | 1.0225% | 1.0225% | ||||||
Derivative swap interest rate description | $100 million notional 2.5 year fixed to floating interest rate swap to receive fixed (1.0225%) and pay the 3 month LIBOR. | |||||||
2017 [Member] | Interest Rate Swap [Member] | Designated as Hedging [Member] | 10.75% Notes Due 2017 [Member] | ||||||||
Derivative [Line Items] | ||||||||
Derivative notional amount | $ 100,000,000 | $ 100,000,000 | ||||||
Derivative contract, term | 2 years 6 months | |||||||
Debt, interest rate percentage | 10.75% | 10.75% | ||||||
Debt maturity year | 2017-06 | |||||||
Accounts Receivable [Member] | Credit Concentration Risk [Member] | ||||||||
Derivative [Line Items] | ||||||||
Maximum percentage of receivables a single customer represents | 14.00% | 10.00% |
Derivatives and Hedging Activ45
Derivatives and Hedging Activities and Fair Value Measurement - Derivative Financial Instruments for Natural Gas Contracts Outstanding (Detail) - Natural Gas Derivative Contracts [Member] | Sep. 30, 2015USD ($)MMBTU |
2015 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | 2,490,000 |
Notional contractual value under derivative contracts | $ | $ 10,000,000 |
Percentage of forecasted purchases under derivative contracts | 56.00% |
2016 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | 9,300,000 |
Notional contractual value under derivative contracts | $ | $ 37,000,000 |
Percentage of forecasted purchases under derivative contracts | 45.00% |
2017 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | 3,015,000 |
Notional contractual value under derivative contracts | $ | $ 12,000,000 |
Percentage of forecasted purchases under derivative contracts | 15.00% |
Derivatives and Hedging Activ46
Derivatives and Hedging Activities and Fair Value Measurement - Currency Values under Significant Contracts Pursuant to Currency Options Outstanding (Detail) - Long [Member] | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2015EUR (€) | Sep. 30, 2015CAD | |
Pulp and Paper [Member] | CDN/USD Denominated Notional Contractual Value For 2015 [Member] | |||
Derivative [Line Items] | |||
Notional contractual value | CAD 100,000,000 | ||
Percentage of forecasted net exposures under contracts | 52.00% | ||
Currency exposure hedged, Protection rate | 1.1200 | 1.1200 | 1.1200 |
Currency exposure hedged, Obligation rate | 1.1666 | 1.1666 | 1.1666 |
Pulp and Paper [Member] | Euro/USD Denominated Notional Contractual Value For 2015 [Member] | |||
Derivative [Line Items] | |||
Notional contractual value | € | € 11,000,000 | ||
Percentage of forecasted net exposures under contracts | 75.00% | ||
Currency exposure hedged, Protection rate | 1.1594 | 1.1594 | 1.1594 |
Currency exposure hedged, Obligation rate | 1.1594 | 1.1594 | 1.1594 |
Pulp and Paper [Member] | CDN/USD Denominated Notional Contractual Value For 2016 [Member] | |||
Derivative [Line Items] | |||
Notional contractual value | CAD 350,000,000 | ||
Percentage of forecasted net exposures under contracts | 45.00% | ||
Currency exposure hedged, Protection rate | 1.1635 | 1.1635 | 1.1635 |
Currency exposure hedged, Obligation rate | 1.2108 | 1.2108 | 1.2108 |
Pulp and Paper [Member] | Euro/USD Denominated Notional Contractual Value For 2016 [Member] | |||
Derivative [Line Items] | |||
Notional contractual value | € | € 15,000,000 | ||
Percentage of forecasted net exposures under contracts | 25.00% | ||
Currency exposure hedged, Protection rate | 1.1629 | 1.1629 | 1.1629 |
Currency exposure hedged, Obligation rate | 1.1629 | 1.1629 | 1.1629 |
Pulp and Paper [Member] | CDN/USD Denominated Notional Contractual Value For 2017 [Member] | |||
Derivative [Line Items] | |||
Notional contractual value | CAD 135,000,000 | ||
Percentage of forecasted net exposures under contracts | 17.00% | ||
Currency exposure hedged, Protection rate | 1.2268 | 1.2268 | 1.2268 |
Currency exposure hedged, Obligation rate | 1.2912 | 1.2912 | 1.2912 |
Personal Care [Member] | USD/Euro Denominated Notional Contractual Value For 2015 [Member] | |||
Derivative [Line Items] | |||
Notional contractual value | $ | $ 15,000,000 | ||
Percentage of forecasted net exposures under contracts | 74.00% | ||
Currency exposure hedged, Protection rate | 1.2571 | 1.2571 | 1.2571 |
Currency exposure hedged, Obligation rate | 1.2571 | 1.2571 | 1.2571 |
Personal Care [Member] | USD/Euro Denominated Notional Contractual Value For 2016 [Member] | |||
Derivative [Line Items] | |||
Notional contractual value | $ | $ 54,000,000 | ||
Percentage of forecasted net exposures under contracts | 75.00% | ||
Currency exposure hedged, Protection rate | 1.0851 | 1.0851 | 1.0851 |
Currency exposure hedged, Obligation rate | 1.1724 | 1.1724 | 1.1724 |
Derivatives and Hedging Activ47
Derivatives and Hedging Activities and Fair Value Measurement - Fair Value of Financial Instruments (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Derivative [Line Items] | ||
Total Assets | $ 7 | $ 10 |
Total Liabilities | 66 | 42 |
Other Assets [Member] | ||
Derivative [Line Items] | ||
Asset backed notes ("ABN") | 1 | 11 |
Long-Term Debt [Member] | ||
Derivative [Line Items] | ||
Long-term debt | 1,301 | 1,475 |
Currency Derivatives [Member] | Prepaid Expenses [Member] | ||
Derivative [Line Items] | ||
Total Assets | 5 | 7 |
Currency Derivatives [Member] | Other Assets [Member] | ||
Derivative [Line Items] | ||
Total Assets | 2 | 3 |
Currency Derivatives [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 37 | 14 |
Currency Derivatives [Member] | Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 12 | 9 |
Natural Gas Swap Contracts [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 12 | 13 |
Natural Gas Swap Contracts [Member] | Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 5 | 6 |
Significant Observable Inputs (Level 2) [Member] | ||
Derivative [Line Items] | ||
Total Assets | 7 | 10 |
Total Liabilities | 66 | 42 |
Significant Observable Inputs (Level 2) [Member] | Other Assets [Member] | ||
Derivative [Line Items] | ||
Asset backed notes ("ABN") | 10 | |
Significant Observable Inputs (Level 2) [Member] | Long-Term Debt [Member] | ||
Derivative [Line Items] | ||
Long-term debt | 1,301 | 1,475 |
Significant Observable Inputs (Level 2) [Member] | Currency Derivatives [Member] | Prepaid Expenses [Member] | ||
Derivative [Line Items] | ||
Total Assets | 5 | 7 |
Significant Observable Inputs (Level 2) [Member] | Currency Derivatives [Member] | Other Assets [Member] | ||
Derivative [Line Items] | ||
Total Assets | 2 | 3 |
Significant Observable Inputs (Level 2) [Member] | Currency Derivatives [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 37 | 14 |
Significant Observable Inputs (Level 2) [Member] | Currency Derivatives [Member] | Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 12 | 9 |
Significant Observable Inputs (Level 2) [Member] | Natural Gas Swap Contracts [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 12 | 13 |
Significant Observable Inputs (Level 2) [Member] | Natural Gas Swap Contracts [Member] | Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 5 | 6 |
Significant Unobservable Inputs (Level 3) [Member] | Other Assets [Member] | ||
Derivative [Line Items] | ||
Asset backed notes ("ABN") | $ 1 | $ 1 |
Derivatives and Hedging Activ48
Derivatives and Hedging Activities and Fair Value Measurement - Fair Value of Financial Instruments (Parenthetical) (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ||
The carrying value of the Company's long-term debt | $ 1,287 | $ 1,350 |
Earnings Per Common Share - Rec
Earnings Per Common Share - Reconciliation Between Basic and Diluted Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Net earnings | $ 11 | $ 281 | $ 85 | $ 360 |
Weighted average number of common shares outstanding (millions) | 62.9 | 64.8 | 63.4 | 64.9 |
Effect of dilutive securities (millions) | 0.1 | 0.1 | 0.1 | 0.1 |
Weighted average number of diluted common shares outstanding (millions) | 63 | 64.9 | 63.5 | 65 |
Basic net earnings per common share (in dollars) | $ 0.17 | $ 4.34 | $ 1.34 | $ 5.55 |
Diluted net earnings per common share (in dollars) | $ 0.17 | $ 4.33 | $ 1.34 | $ 5.54 |
Earnings Per Common Share - Sec
Earnings Per Common Share - Securities that Could Potentially Dilute Basic Earnings Per Common Share in Future (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Options [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per common share amount | 110,219 | 399,059 | 137,191 | 263,012 |
Pension Plans and Other Post-51
Pension Plans and Other Post-Retirement Benefit Plans - Additional Information (Detail) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)MultiEmployerPensionPlan | Sep. 30, 2014USD ($) | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||
Number of multiemployer plans | MultiEmployerPensionPlan | 2 | |||
Pension expense | $ 9 | $ 7 | $ 24 | $ 22 |
Pension Plans [Member] | ||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||
Plan contributions | 5 | 0 | 11 | 19 |
Other Post-Retirement Benefit Plans [Member] | ||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||
Plan contributions | $ 1 | $ 1 | $ 4 | $ 4 |
Pension Plans and Other Post-52
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 | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Pension Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 9 | $ 9 | $ 27 | $ 27 |
Interest expense | 16 | 20 | 49 | 60 |
Expected return on plan assets | (23) | (27) | (70) | (79) |
Amortization of net actuarial loss | 1 | 2 | 5 | 7 |
Amortization of prior year service costs | 1 | 2 | 2 | 3 |
Net periodic benefit cost | 4 | 6 | 13 | 18 |
Other Post-Retirement Benefit Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1 | 2 | 2 | |
Interest expense | 1 | 3 | 3 | |
Net periodic benefit cost | $ 1 | $ 1 | $ 5 | $ 5 |
Other Operating Income, Net - C
Other Operating Income, Net - Components of Other Operating Income, Net (Detail) CAD in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2015CAD | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | ||
Other Income And Expenses [Abstract] | |||||||
Alternative fuel tax credits | $ (18) | $ (18) | |||||
Net gains on disposal of property, plant and equipment | $ 10 | CAD 12 | $ (15) | [1] | |||
Bad debt expense | $ (1) | 4 | |||||
Environmental provision | 4 | 1 | 4 | 1 | |||
Foreign exchange (gain) loss | $ (3) | 1 | (3) | ||||
Other | (1) | 2 | |||||
Other operating income, net | $ (17) | $ (8) | $ (17) | ||||
[1] | Effective June 23, 2015, Domtar finalized the previously announced sale of its Gatineau properties. Payment of $26 million (CDN $32 million) was received on July 3, 2015. As a result, the Company recorded a gain on sale of property, plant and equipment of $10 million (CDN $12 million) in the second quarter of 2015. |
Other Operating Income, Net -54
Other Operating Income, Net - Components of Other Operating Income, Net (Parenthetical) (Detail) CAD in Millions, $ in Millions | Jul. 03, 2015USD ($) | Jul. 03, 2015CAD | Jun. 30, 2015USD ($) | Jun. 30, 2015CAD | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |
Other Income And Expenses [Abstract] | |||||||
Cash received from sale of properties | $ 26 | CAD 32 | $ 35 | $ 1 | |||
Net gains on disposal of property, plant and equipment | $ 10 | CAD 12 | $ (15) | [1] | |||
[1] | Effective June 23, 2015, Domtar finalized the previously announced sale of its Gatineau properties. Payment of $26 million (CDN $32 million) was received on July 3, 2015. As a result, the Company recorded a gain on sale of property, plant and equipment of $10 million (CDN $12 million) in the second quarter of 2015. |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Income tax benefit | $ (14,000,000) | $ (186,000,000) | $ (6,000,000) | $ (158,000,000) |
Current income tax expense (benefit) | 4,000,000 | 10,000,000 | 44,000,000 | 44,000,000 |
Deferred other income tax expense (benefit) | (18,000,000) | $ (196,000,000) | (50,000,000) | (202,000,000) |
Income taxes paid, net | $ 14,000,000 | $ 16,000,000 | 32,000,000 | |
Effective income tax rate | 467.00% | (196.00%) | ||
Recognition of previously unrecognized tax benefits | $ 204,000,000 | 204,000,000 | ||
Alternative Fuel Tax Credits | 18,000,000 | 18,000,000 | ||
Alternative Fuel Tax Credits ("AFTC") income, tax expense | $ 0 | $ 0 |
Inventories - Components of Inv
Inventories - Components of Inventories (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Work in process and finished goods | $ 416 | $ 395 |
Raw materials | 138 | 123 |
Operating and maintenance supplies | 197 | 196 |
Total inventories | $ 751 | $ 714 |
Goodwill - Changes in Carrying
Goodwill - Changes in Carrying Value of Goodwill (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Goodwill Roll Forward | |
Balance at beginning of period | $ 567 |
Effect of foreign currency exchange rate change | (21) |
Balance at end of period | $ 546 |
Intangible Assets - Components
Intangible Assets - Components of Intangible Assets (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Intangible Assets Excluding Goodwill [Line Items] | ||
Intangible assets subject to amortization, Gross carrying amount | $ 402 | $ 420 |
Accumulated amortization | (50) | (39) |
Intangible assets, Net | 352 | 381 |
Total, Gross carrying amount | 666 | 700 |
Intangible assets, net of amortization | 616 | 661 |
Trade Names [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Intangible assets not subject to amortization | 220 | 233 |
Catalog Rights [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Intangible assets not subject to amortization | $ 38 | 41 |
Water Rights [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Estimated useful lives (in years) | 40 years | |
Intangible assets subject to amortization, Gross carrying amount | $ 7 | 8 |
Accumulated amortization | (1) | (1) |
Intangible assets, Net | 6 | 7 |
Customer Relationships [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Intangible assets subject to amortization, Gross carrying amount | 358 | 374 |
Accumulated amortization | (42) | (32) |
Intangible assets, Net | $ 316 | 342 |
Customer Relationships [Member] | Minimum [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Estimated useful lives (in years) | 10 years | |
Customer Relationships [Member] | Maximum [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Estimated useful lives (in years) | 40 years | |
Technology [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Intangible assets subject to amortization, Gross carrying amount | $ 8 | 8 |
Accumulated amortization | (2) | (2) |
Intangible assets, Net | $ 6 | 6 |
Technology [Member] | Minimum [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Estimated useful lives (in years) | 7 years | |
Technology [Member] | Maximum [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Estimated useful lives (in years) | 20 years | |
Non-Compete [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Estimated useful lives (in years) | 9 years | |
Intangible assets subject to amortization, Gross carrying amount | $ 1 | 1 |
Intangible assets, Net | $ 1 | 1 |
License Rights [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Estimated useful lives (in years) | 12 years | |
Intangible assets subject to amortization, Gross carrying amount | $ 28 | 29 |
Accumulated amortization | (5) | (4) |
Intangible assets, Net | 23 | 25 |
Intangible assets not subject to amortization | $ 6 | $ 6 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 5 | $ 5 | $ 14 | $ 16 |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Expense Related to Intangible Assets (Detail) $ in Millions | Sep. 30, 2015USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Amortization expense related to intangible assets, 2015 | $ 19 |
Amortization expense related to intangible assets, 2016 | 19 |
Amortization expense related to intangible assets, 2017 | 19 |
Amortization expense related to intangible assets, 2018 | 19 |
Amortization expense related to intangible assets, 2019 | $ 18 |
Closure and Restructuring Cos61
Closure and Restructuring Costs and Liability and Impairment and Write-Down of Property, Plant and Equipment - Additional Information (Detail) | Dec. 10, 2014USD ($)Mgt | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) |
Restructuring Cost And Reserve [Line Items] | |||||
Severance and termination costs | $ 1,000,000 | $ 2,000,000 | $ 3,000,000 | $ 3,000,000 | |
Provision for closure and restructuring costs | 3,000,000 | 3,000,000 | |||
Previous and Ongoing Closures [Member] | Personal Care [Member] | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Severance and termination costs | 0 | 0 | 1,000,000 | 1,000,000 | |
Previous and Ongoing Closures [Member] | Pulp and Paper [Member] | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Severance and termination costs | $ 2,000,000 | $ 2,000,000 | |||
Ashdown, Arkansas Mill [Member] | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Capital project cost of conversion approved | $ 160,000,000 | ||||
Permanent reduction of annual uncoated freesheet production capacity | t | 364,000 | ||||
Contingent Capital Investment | $ 40,000,000 | ||||
Aggregate pre-tax earnings charge | 120,000,000 | 120,000,000 | |||
Accelerated depreciation | 20,000,000 | 57,000,000 | |||
Severance and termination costs | 1,000,000 | 2,000,000 | |||
Ashdown, Arkansas Mill [Member] | Two Thousand And Fifteen And Two Thousand And Sixteen | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Aggregate pre-tax earnings charge | 113,000,000 | 113,000,000 | |||
Accelerated depreciation | 117,000,000 | ||||
Cash severance, employee benefits and training costs | 3,000,000 | ||||
Ashdown, Arkansas Mill [Member] | 2015 [Member] | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Cost of conversion, expected to be invested | 40,000,000 | ||||
Ashdown, Arkansas Mill [Member] | 2016 [Member] | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Cost of conversion, expected to be invested | $ 120,000,000 | ||||
Ashdown, Arkansas Mill [Member] | Maximum [Member] | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Production capacity of pulp machine | Mg | 516,000 | ||||
Multiemployer Pension Plans [Member] | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Provision for the withdrawal liabilities | 59,000,000 | 59,000,000 | |||
Measurement uncertainty related to withdrawal liabilities | $ 9,000,000 | $ 9,000,000 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) $ in Millions | Aug. 20, 2015 | Jul. 20, 2015 | Sep. 30, 2015 | Sep. 30, 2015 | Aug. 31, 2015 | Aug. 15, 2015 |
Debt Instrument [Line Items] | ||||||
Debt instrument, redemption price, percentage | 100.00% | |||||
Debt refinancing costs | $ 42 | |||||
Term Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, aggregate principal amount | $ 300 | |||||
Term loan agreement period | 10 years | |||||
Term loan agreement maturity date | Jul. 20, 2025 | |||||
Term loan agreement covenant description | The Term Loan Agreement contains customary covenants, including two financial covenants: (i) an interest coverage ratio, as defined in the Term Loan Agreement, that must be maintained at a level of not less than 3 to 1 and (ii) a leverage ratio, as defined in the Term Loan Agreement that must be maintained at a level of not greater than 3.75 to 1 | |||||
Term Loan [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Term loan agreement covenants, interest coverage ratio | 300.00% | |||||
Term Loan [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Term loan agreement covenants, leverage ratio | 375.00% | |||||
Term Loan [Member] | LIBOR [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument interest rate stated percentage | 1.875% | |||||
9.5% Notes Due 2016 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument redeemed | $ 55 | |||||
Debt instrument interest rate stated percentage | 9.50% | |||||
Debt instrument, redemption price, percentage of principal amount redeemed | 59.00% | |||||
10.75% Notes Due 2017 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument redeemed | $ 215 | $ 215 | ||||
Debt instrument interest rate stated percentage | 10.75% | |||||
Debt instrument, redemption price, percentage of principal amount redeemed | 77.00% | |||||
7.125% Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument interest rate stated percentage | 7.125% | |||||
Debt instrument redemption amount | $ 167 |
Changes in Accumulated Other 63
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 | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning balance | $ (268) | $ (65) | ||
Other comprehensive (loss) income before reclassifications | (217) | (138) | ||
Amounts reclassified from Accumulated other comprehensive loss | 23 | 12 | ||
Other comprehensive loss | $ (69) | $ (127) | (194) | (126) |
Ending balance | (462) | (191) | (462) | (191) |
Natural Gas Swap Contracts [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income before reclassifications | (6) | 1 | ||
Currency Options [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income before reclassifications | (33) | (7) | ||
Foreign Currency Items [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income before reclassifications | (182) | (130) | ||
Remeasurement Of Pension Plan Obligation [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income before reclassifications | (3) | |||
Forward Contracts [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income before reclassifications | 4 | 1 | ||
Net Derivative Gains (Losses) on Cash Flow Hedges [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning balance | (15) | |||
Other comprehensive (loss) income before reclassifications | (35) | (5) | ||
Amounts reclassified from Accumulated other comprehensive loss | 18 | 5 | ||
Other comprehensive loss | (17) | |||
Ending balance | (32) | (32) | ||
Net Derivative Gains (Losses) on Cash Flow Hedges [Member] | Natural Gas Swap Contracts [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income before reclassifications | (6) | 1 | ||
Net Derivative Gains (Losses) on Cash Flow Hedges [Member] | Currency Options [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income before reclassifications | (33) | (7) | ||
Net Derivative Gains (Losses) on Cash Flow Hedges [Member] | Forward Contracts [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income before reclassifications | 4 | 1 | ||
Accumulated Defined Benefit Plans Adjustment [Member] | Pension Plans [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning balance | (192) | (210) | ||
Other comprehensive (loss) income before reclassifications | (3) | |||
Amounts reclassified from Accumulated other comprehensive loss | 5 | 7 | ||
Other comprehensive loss | 5 | 4 | ||
Ending balance | (187) | (206) | (187) | (206) |
Accumulated Defined Benefit Plans Adjustment [Member] | Pension Plans [Member] | Remeasurement Of Pension Plan Obligation [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income before reclassifications | (3) | |||
Accumulated Defined Benefit Plans Adjustment [Member] | Other Post-Retirement Benefit Plans [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning balance | (13) | (7) | ||
Ending balance | (13) | (7) | (13) | (7) |
Foreign Currency Items [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning balance | (48) | 152 | ||
Other comprehensive (loss) income before reclassifications | (182) | (130) | ||
Other comprehensive loss | (182) | (130) | ||
Ending balance | $ (230) | $ 22 | (230) | 22 |
Foreign Currency Items [Member] | Foreign Currency Items [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income before reclassifications | $ (182) | $ (130) |
Changes in Accumulated Other 64
Changes in Accumulated Other Comprehensive Loss by Component - Schedule of Reclassifications Out of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Earnings before income taxes and equity loss | $ (3) | $ 95 | $ 79 | $ 202 |
Tax expense | 14 | 186 | 6 | 158 |
Net earnings | 11 | 281 | 85 | 360 |
Reclassification Out of Accumulated Other Comprehensive Loss [Member] | Net Derivative Gains (Losses) on Cash Flow Hedges [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Earnings before income taxes and equity loss | 12 | 2 | 31 | 8 |
Tax expense | (5) | (13) | (3) | |
Net earnings | 7 | 2 | 18 | 5 |
Reclassification Out of Accumulated Other Comprehensive Loss [Member] | Net Derivative Gains (Losses) on Cash Flow Hedges [Member] | Natural Gas Swap Contracts [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of Sales | 2 | 11 | (3) | |
Reclassification Out of Accumulated Other Comprehensive Loss [Member] | Net Derivative Gains (Losses) on Cash Flow Hedges [Member] | Currency Options and Forwards [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of Sales | 10 | 2 | 20 | 11 |
Reclassification Out of Accumulated Other Comprehensive Loss [Member] | Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Amortization of net actuarial loss and prior year service cost | 2 | 4 | 7 | 10 |
Tax expense | (1) | (2) | (2) | (3) |
Net earnings | $ 1 | $ 2 | $ 5 | $ 7 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) | Nov. 03, 2015 | Aug. 04, 2015 | Apr. 15, 2015 | Feb. 23, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Dec. 31, 2014 |
Shareholders Equity [Line Items] | ||||||||
Dividend per share | $ 0.40 | $ 0.40 | $ 0.40 | |||||
Record date | Oct. 2, 2015 | Jul. 2, 2015 | Apr. 2, 2015 | |||||
Declared date | Aug. 4, 2015 | May 5, 2015 | Feb. 23, 2015 | |||||
Dividends paid | $ 25,000,000 | $ 25,000,000 | $ 26,000,000 | |||||
Payment date | Oct. 15, 2015 | Jul. 15, 2015 | Apr. 15, 2015 | |||||
Stock repurchase program authorized amount | $ 1,300,000,000 | |||||||
Stock repurchased, shares | 1,210,932 | 530,780 | 24,548,912 | |||||
Stock repurchased, average price | $ 41.40 | $ 36.62 | $ 39.42 | |||||
Stock repurchased, value | $ 50,000,000 | $ 19,000,000 | $ 968,000,000 | |||||
Treasury stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Subsequent Event [Member] | ||||||||
Shareholders Equity [Line Items] | ||||||||
Dividend per share | $ 0.40 | |||||||
Record date | Jan. 4, 2016 | |||||||
Declared date | Nov. 3, 2015 | |||||||
Payment date | Jan. 15, 2016 |
Commitments and Contingencies -
Commitments and Contingencies - Changes in Reserve for Environmental Remediation and Asset Retirement Obligations (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |
Balance at beginning of period | $ 60 |
Additions | 4 |
Environmental spending | (2) |
Effect of foreign currency exchange rate change | (6) |
Balance at end of period | $ 56 |
Commitments and Contingencies67
Commitments and Contingencies - Additional Information (Detail) | 1 Months Ended | 9 Months Ended | ||
Jan. 31, 2014Affiliate | Sep. 30, 2015USD ($) | Sep. 30, 2015EUR (€) | Sep. 30, 2015EUR (€) | |
Commitments And Contingencies [Line Items] | ||||
Obligations under federal or provincial legislations | $ | $ 15,000,000 | |||
Number of affiliated companies acquired | Affiliate | 2 | |||
Retained Purchase Price | 3,000,000 | € 3,000,000 | ||
Bank guarantees | 10,000,000 | 9,000,000 | ||
Additional insurance coverage purchased | 32,000,000 | 28,500,000 | ||
Insurance deductible amount | 13,000,000 | € 12,000,000 | ||
Total recoveries from retained purchase price, bank guarantees and insurance coverage | 45,000,000 | 40,500,000 | ||
Spanish Competition Investigation [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Provision for liability | € 0 | |||
Indemnification Guarantee [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Provision for liability | $ | 0 | |||
Indas and Affiliates [Member] | Minimum [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Penalties for violations of competition laws | 0 | |||
Indas and Affiliates [Member] | Maximum [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Penalties for violations of competition laws | $ 23,000,000 | € 21,000,000 |
Segment Disclosures - Additiona
Segment Disclosures - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2015Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Disclosures - Analysis
Segment Disclosures - Analysis and Reconciliation of Reportable Segment Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 1,292 | $ 1,405 | $ 3,950 | $ 4,184 |
Depreciation and amortization and impairment and write-down of property, plant and equipment | 89 | 96 | 270 | 291 |
Impairment and write-down of property, plant and equipment | 20 | 57 | ||
Consolidated depreciation and amortization and impairment and write-down of property, plant and equipment | 109 | 96 | 327 | 291 |
Consolidated operating income (loss) | 61 | 120 | 194 | 278 |
Interest expense, net | 64 | 25 | 115 | 76 |
(Loss) earnings before income taxes | (3) | 95 | 79 | 202 |
Income tax benefit | (14) | (186) | (6) | (158) |
Net earnings | 11 | 281 | 85 | 360 |
Pulp and Paper [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization and impairment and write-down of property, plant and equipment | 75 | 79 | 224 | 241 |
Impairment and write-down of property, plant and equipment | 20 | 57 | ||
Personal Care [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization and impairment and write-down of property, plant and equipment | 14 | 17 | 46 | 50 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,306 | 1,417 | 3,996 | 4,212 |
Operating Segments [Member] | Pulp and Paper [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,092 | 1,186 | 3,348 | 3,514 |
Consolidated operating income (loss) | 54 | 101 | 184 | 264 |
Operating Segments [Member] | Personal Care [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 214 | 231 | 648 | 698 |
Consolidated operating income (loss) | 18 | 12 | 45 | 38 |
Intersegment Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | (14) | (12) | (46) | (28) |
Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated operating income (loss) | $ (11) | $ 7 | $ (35) | $ (24) |
Segment Disclosures - Analysi70
Segment Disclosures - Analysis and Reconciliation of Reportable Segment Information (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Consolidated operating income (loss) | $ 61 | $ 120 | $ 194 | $ 278 |
Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated operating income (loss) | $ (11) | 7 | $ (35) | (24) |
Scenario, Previously Reported [Member] | Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated operating income (loss) | (2) | (11) | ||
Scenario, Previously Reported [Member] | Pulp and Paper [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated operating income (loss) | 109 | 247 | ||
Scenario, Previously Reported [Member] | Personal Care [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated operating income (loss) | $ 13 | $ 42 |
Supplemental Guarantor Financ71
Supplemental Guarantor Financial Information - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2015 | |
Domtar (Canada) Paper Company, LLC [Member] | |
Condensed Financial Statements Captions [Line Items] | |
Ownership percentage | 100.00% |
Guarantor Subsidiaries [Member] | |
Condensed Financial Statements Captions [Line Items] | |
Ownership percentage | 100.00% |
Non-Guarantor Subsidiaries [Member] | |
Condensed Financial Statements Captions [Line Items] | |
Ownership percentage | 100.00% |
Supplemental Guarantor Financ72
Supplemental Guarantor Financial Information - Condensed Consolidating Statement of Earnings and Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Condensed Income Statements Captions [Line Items] | ||||
Sales | $ 1,292 | $ 1,405 | $ 3,950 | $ 4,184 |
Operating expenses | ||||
Cost of sales, excluding depreciation and amortization | 1,026 | 1,105 | 3,140 | 3,316 |
Depreciation and amortization | 89 | 96 | 270 | 291 |
Selling, general and administrative | 95 | 99 | 294 | 313 |
Impairment and write-down of property, plant and equipment | 20 | 57 | ||
Closure and restructuring costs (NOTE 12) | 1 | 2 | 3 | 3 |
Other operating income, net (NOTE 7) | (17) | (8) | (17) | |
Operating expenses | 1,231 | 1,285 | 3,756 | 3,906 |
Operating income | 61 | 120 | 194 | 278 |
Interest expense, net | 64 | 25 | 115 | 76 |
(Loss) earnings before income taxes | (3) | 95 | 79 | 202 |
Income tax (benefit) expense | (14) | (186) | (6) | (158) |
Net earnings | 11 | 281 | 85 | 360 |
Other comprehensive income (loss) | (69) | (127) | (194) | (126) |
Comprehensive (loss) income | (58) | 154 | (109) | 234 |
Consolidating Adjustments [Member] | ||||
Condensed Income Statements Captions [Line Items] | ||||
Sales | (307) | (280) | (899) | (825) |
Operating expenses | ||||
Cost of sales, excluding depreciation and amortization | (307) | (280) | (899) | (825) |
Operating expenses | (307) | (280) | (899) | (825) |
Share in earnings of equity accounted investees | (118) | (349) | (307) | (543) |
Net earnings | (118) | (349) | (307) | (543) |
Other comprehensive income (loss) | 124 | 373 | ||
Comprehensive (loss) income | 6 | (349) | 66 | (543) |
Parent [Member] | ||||
Operating expenses | ||||
Selling, general and administrative | 2 | 5 | 10 | 23 |
Other operating income, net (NOTE 7) | 3 | 1 | 4 | 1 |
Operating expenses | 5 | 6 | 14 | 24 |
Operating income | (5) | (6) | (14) | (24) |
Interest expense, net | 64 | 25 | 115 | 75 |
(Loss) earnings before income taxes | (69) | (31) | (129) | (99) |
Income tax (benefit) expense | (14) | (9) | (30) | (26) |
Share in earnings of equity accounted investees | 66 | 303 | 184 | 433 |
Net earnings | 11 | 281 | 85 | 360 |
Other comprehensive income (loss) | (69) | (194) | 1 | |
Comprehensive (loss) income | (58) | 281 | (109) | 361 |
Guarantor Subsidiaries [Member] | ||||
Condensed Income Statements Captions [Line Items] | ||||
Sales | 1,071 | 1,125 | 3,266 | 3,325 |
Operating expenses | ||||
Cost of sales, excluding depreciation and amortization | 975 | 961 | 2,867 | 2,810 |
Depreciation and amortization | 62 | 67 | 191 | 200 |
Selling, general and administrative | 36 | 49 | 108 | 164 |
Impairment and write-down of property, plant and equipment | 20 | 57 | ||
Closure and restructuring costs (NOTE 12) | 1 | 2 | 1 | |
Other operating income, net (NOTE 7) | 1 | (18) | (17) | |
Operating expenses | 1,095 | 1,059 | 3,225 | 3,158 |
Operating income | (24) | 66 | 41 | 167 |
Interest expense, net | 7 | 7 | 21 | 19 |
(Loss) earnings before income taxes | (31) | 59 | 20 | 148 |
Income tax (benefit) expense | (45) | (198) | (41) | (175) |
Share in earnings of equity accounted investees | 52 | 46 | 123 | 110 |
Net earnings | 66 | 303 | 184 | 433 |
Other comprehensive income (loss) | (67) | (11) | (194) | (3) |
Comprehensive (loss) income | (1) | 292 | (10) | 430 |
Non-Guarantor Subsidiaries [Member] | ||||
Condensed Income Statements Captions [Line Items] | ||||
Sales | 528 | 560 | 1,583 | 1,684 |
Operating expenses | ||||
Cost of sales, excluding depreciation and amortization | 358 | 424 | 1,172 | 1,331 |
Depreciation and amortization | 27 | 29 | 79 | 91 |
Selling, general and administrative | 57 | 45 | 176 | 126 |
Closure and restructuring costs (NOTE 12) | 2 | 1 | 2 | |
Other operating income, net (NOTE 7) | (4) | (12) | (1) | |
Operating expenses | 438 | 500 | 1,416 | 1,549 |
Operating income | 90 | 60 | 167 | 135 |
Interest expense, net | (7) | (7) | (21) | (18) |
(Loss) earnings before income taxes | 97 | 67 | 188 | 153 |
Income tax (benefit) expense | 45 | 21 | 65 | 43 |
Net earnings | 52 | 46 | 123 | 110 |
Other comprehensive income (loss) | (57) | (116) | (179) | (124) |
Comprehensive (loss) income | $ (5) | $ (70) | $ (56) | $ (14) |
Supplemental Guarantor Financ73
Supplemental Guarantor Financial Information - Condensed Consolidating Balance Sheet (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets | ||||
Cash and cash equivalents | $ 128 | $ 174 | $ 134 | $ 655 |
Receivables | 617 | 628 | ||
Inventories | 751 | 714 | ||
Prepaid expenses | 25 | 25 | ||
Income and other taxes receivable | 17 | 54 | ||
Deferred income taxes | 82 | 75 | ||
Total current assets | 1,620 | 1,670 | ||
Property, plant and equipment, at cost | 8,714 | 8,909 | ||
Accumulated depreciation | (5,842) | (5,778) | ||
Net property, plant and equipment | 2,872 | 3,131 | ||
Goodwill | 546 | 567 | ||
Intangible assets, net of amortization | 616 | 661 | ||
Other assets | 135 | 156 | ||
Total assets | 5,789 | 6,185 | ||
Current liabilities | ||||
Bank indebtedness | 1 | 10 | ||
Trade and other payables | 721 | 721 | ||
Income and other taxes payable | 23 | 26 | ||
Long-term debt due within one year | 42 | 169 | ||
Total current liabilities | 787 | 926 | ||
Long-term debt | 1,245 | 1,181 | ||
Deferred income taxes and other | 744 | 810 | ||
Other liabilities and deferred credits | 354 | 378 | ||
Shareholders' equity | 2,659 | 2,890 | ||
Total liabilities and shareholders' equity | 5,789 | 6,185 | ||
Consolidating Adjustments [Member] | ||||
Current assets | ||||
Income and other taxes receivable | (61) | |||
Intercompany accounts | (5,576) | (5,603) | ||
Total current assets | (5,637) | (5,603) | ||
Investments in affiliates | (10,097) | (10,168) | ||
Intercompany long-term advances | (658) | (520) | ||
Other assets | (49) | (21) | ||
Total assets | (16,441) | (16,312) | ||
Current liabilities | ||||
Intercompany accounts | (5,576) | (5,603) | ||
Income and other taxes payable | (61) | |||
Total current liabilities | (5,637) | (5,603) | ||
Intercompany long-term loans | (658) | (520) | ||
Deferred income taxes and other | (49) | (21) | ||
Shareholders' equity | (10,097) | (10,168) | ||
Total liabilities and shareholders' equity | (16,441) | (16,312) | ||
Parent [Member] | ||||
Current assets | ||||
Cash and cash equivalents | 26 | 79 | 27 | 439 |
Prepaid expenses | 10 | 11 | ||
Income and other taxes receivable | 62 | 37 | ||
Intercompany accounts | 765 | 977 | ||
Total current assets | 863 | 1,104 | ||
Investments in affiliates | 8,005 | 8,015 | ||
Intercompany long-term advances | 6 | 6 | ||
Other assets | 48 | 31 | ||
Total assets | 8,922 | 9,156 | ||
Current liabilities | ||||
Trade and other payables | 59 | 69 | ||
Intercompany accounts | 4,787 | 4,582 | ||
Income and other taxes payable | 2 | |||
Long-term debt due within one year | 38 | 166 | ||
Total current liabilities | 4,884 | 4,819 | ||
Long-term debt | 936 | 1,168 | ||
Intercompany long-term loans | 418 | 260 | ||
Deferred income taxes and other | 8 | |||
Other liabilities and deferred credits | 17 | 19 | ||
Shareholders' equity | 2,659 | 2,890 | ||
Total liabilities and shareholders' equity | 8,922 | 9,156 | ||
Guarantor Subsidiaries [Member] | ||||
Current assets | ||||
Cash and cash equivalents | 15 | 18 | 9 | 22 |
Receivables | 377 | 370 | ||
Inventories | 526 | 495 | ||
Prepaid expenses | 5 | 7 | ||
Intercompany accounts | 4,790 | 4,613 | ||
Deferred income taxes | 55 | 40 | ||
Total current assets | 5,768 | 5,543 | ||
Property, plant and equipment, at cost | 6,250 | 6,119 | ||
Accumulated depreciation | (4,219) | (3,985) | ||
Net property, plant and equipment | 2,031 | 2,134 | ||
Goodwill | 296 | 296 | ||
Intangible assets, net of amortization | 257 | 263 | ||
Investments in affiliates | 2,092 | 2,153 | ||
Intercompany long-term advances | 84 | 80 | ||
Other assets | 9 | 11 | ||
Total assets | 10,537 | 10,480 | ||
Current liabilities | ||||
Bank indebtedness | 1 | 10 | ||
Trade and other payables | 455 | 409 | ||
Intercompany accounts | 717 | 925 | ||
Income and other taxes payable | 64 | 9 | ||
Long-term debt due within one year | 3 | 2 | ||
Total current liabilities | 1,240 | 1,355 | ||
Long-term debt | 300 | 2 | ||
Intercompany long-term loans | 240 | 260 | ||
Deferred income taxes and other | 577 | 675 | ||
Other liabilities and deferred credits | 175 | 173 | ||
Shareholders' equity | 8,005 | 8,015 | ||
Total liabilities and shareholders' equity | 10,537 | 10,480 | ||
Non-Guarantor Subsidiaries [Member] | ||||
Current assets | ||||
Cash and cash equivalents | 87 | 77 | $ 98 | $ 194 |
Receivables | 240 | 258 | ||
Inventories | 225 | 219 | ||
Prepaid expenses | 10 | 7 | ||
Income and other taxes receivable | 16 | 17 | ||
Intercompany accounts | 21 | 13 | ||
Deferred income taxes | 27 | 35 | ||
Total current assets | 626 | 626 | ||
Property, plant and equipment, at cost | 2,464 | 2,790 | ||
Accumulated depreciation | (1,623) | (1,793) | ||
Net property, plant and equipment | 841 | 997 | ||
Goodwill | 250 | 271 | ||
Intangible assets, net of amortization | 359 | 398 | ||
Intercompany long-term advances | 568 | 434 | ||
Other assets | 127 | 135 | ||
Total assets | 2,771 | 2,861 | ||
Current liabilities | ||||
Trade and other payables | 207 | 243 | ||
Intercompany accounts | 72 | 96 | ||
Income and other taxes payable | 20 | 15 | ||
Long-term debt due within one year | 1 | 1 | ||
Total current liabilities | 300 | 355 | ||
Long-term debt | 9 | 11 | ||
Deferred income taxes and other | 208 | 156 | ||
Other liabilities and deferred credits | 162 | 186 | ||
Shareholders' equity | 2,092 | 2,153 | ||
Total liabilities and shareholders' equity | $ 2,771 | $ 2,861 |
Supplemental Guarantor Financ74
Supplemental Guarantor Financial Information - Condensed Consolidating Statement of Cash Flows (Detail) CAD in Millions, $ in Millions | Jul. 03, 2015USD ($) | Jul. 03, 2015CAD | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) |
Operating activities | ||||||
Net earnings | $ 11 | $ 281 | $ 85 | $ 360 | ||
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | 231 | 88 | ||||
Cash flows provided from operating activities | 316 | 448 | ||||
Investing activities | ||||||
Additions to property, plant and equipment | (202) | (157) | ||||
Proceeds from disposals of property, plant and equipment | $ 26 | CAD 32 | 35 | 1 | ||
Acquisition of business, net of cash acquired | (546) | |||||
Other | 9 | 5 | ||||
Cash flows used for investing activities | (158) | (697) | ||||
Financing activities | ||||||
Dividend payments | (75) | (60) | ||||
Stock repurchase | (50) | (19) | ||||
Net change in bank indebtedness | (9) | (13) | ||||
Proceeds from receivables securitization facilities | 90 | |||||
Payments on receivables securitization facilities | (108) | |||||
Change in revolving bank credit facility | 75 | (160) | ||||
Issuance of long-term debt | 300 | |||||
Repayment of long-term debt | (439) | (4) | ||||
Other | 1 | 4 | ||||
Cash flows used for financing activities | (197) | (270) | ||||
Net decrease in cash and cash equivalents | (39) | (519) | ||||
Impact of foreign exchange on cash | (7) | (2) | ||||
Cash and cash equivalents at beginning of period | 174 | 655 | ||||
Cash and cash equivalents at end of period | 128 | 134 | 128 | 134 | ||
Consolidating Adjustments [Member] | ||||||
Operating activities | ||||||
Net earnings | (118) | (349) | (307) | (543) | ||
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | 307 | 543 | ||||
Financing activities | ||||||
Increase in long-term advances to related parties | 116 | 352 | ||||
Decrease in long-term advances to related parties | (116) | (352) | ||||
Parent [Member] | ||||||
Operating activities | ||||||
Net earnings | 11 | 281 | 85 | 360 | ||
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | 231 | (183) | ||||
Cash flows provided from operating activities | 316 | 177 | ||||
Financing activities | ||||||
Dividend payments | (75) | (60) | ||||
Stock repurchase | (50) | (19) | ||||
Net change in bank indebtedness | (1) | |||||
Change in revolving bank credit facility | 75 | (160) | ||||
Repayment of long-term debt | (436) | |||||
Increase in long-term advances to related parties | (352) | |||||
Decrease in long-term advances to related parties | 116 | |||||
Other | 1 | 3 | ||||
Cash flows used for financing activities | (369) | (589) | ||||
Net decrease in cash and cash equivalents | (53) | (412) | ||||
Cash and cash equivalents at beginning of period | 79 | 439 | ||||
Cash and cash equivalents at end of period | 26 | 27 | 26 | 27 | ||
Guarantor Subsidiaries [Member] | ||||||
Operating activities | ||||||
Net earnings | 66 | 303 | 184 | 433 | ||
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | (320) | (354) | ||||
Cash flows provided from operating activities | (136) | 79 | ||||
Investing activities | ||||||
Additions to property, plant and equipment | (143) | (116) | ||||
Proceeds from disposals of property, plant and equipment | 7 | |||||
Cash flows used for investing activities | (136) | (116) | ||||
Financing activities | ||||||
Net change in bank indebtedness | (9) | (11) | ||||
Issuance of long-term debt | 300 | |||||
Repayment of long-term debt | (2) | (3) | ||||
Increase in long-term advances to related parties | (20) | |||||
Decrease in long-term advances to related parties | 38 | |||||
Cash flows used for financing activities | 269 | 24 | ||||
Net decrease in cash and cash equivalents | (3) | (13) | ||||
Cash and cash equivalents at beginning of period | 18 | 22 | ||||
Cash and cash equivalents at end of period | 15 | 9 | 15 | 9 | ||
Non-Guarantor Subsidiaries [Member] | ||||||
Operating activities | ||||||
Net earnings | 52 | 46 | 123 | 110 | ||
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | 13 | 82 | ||||
Cash flows provided from operating activities | 136 | 192 | ||||
Investing activities | ||||||
Additions to property, plant and equipment | (59) | (41) | ||||
Proceeds from disposals of property, plant and equipment | 28 | 1 | ||||
Acquisition of business, net of cash acquired | (546) | |||||
Other | 9 | 5 | ||||
Cash flows used for investing activities | (22) | (581) | ||||
Financing activities | ||||||
Net change in bank indebtedness | (1) | |||||
Proceeds from receivables securitization facilities | 90 | |||||
Payments on receivables securitization facilities | (108) | |||||
Repayment of long-term debt | (1) | (1) | ||||
Increase in long-term advances to related parties | (96) | |||||
Decrease in long-term advances to related parties | 314 | |||||
Other | 1 | |||||
Cash flows used for financing activities | (97) | 295 | ||||
Net decrease in cash and cash equivalents | 17 | (94) | ||||
Impact of foreign exchange on cash | (7) | (2) | ||||
Cash and cash equivalents at beginning of period | 77 | 194 | ||||
Cash and cash equivalents at end of period | $ 87 | $ 98 | $ 87 | $ 98 |