Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
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 | 62,585,337 |
Consolidated Statements of Earn
Consolidated Statements of Earnings and Comprehensive Income (Loss) (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Sales | $ 1,270 | $ 1,292 | $ 3,824 | $ 3,950 |
Operating expenses | ||||
Cost of sales, excluding depreciation and amortization | 969 | 1,026 | 3,032 | 3,140 |
Depreciation and amortization | 87 | 89 | 263 | 270 |
Selling, general and administrative | 107 | 95 | 314 | 294 |
Impairment of property, plant and equipment (NOTE 11) | 5 | 20 | 29 | 57 |
Closure and restructuring costs (NOTE 11) | 10 | 1 | 33 | 3 |
Other operating loss (income), net (NOTE 6) | 4 | (8) | ||
Operating expenses | 1,178 | 1,231 | 3,675 | 3,756 |
Operating income | 92 | 61 | 149 | 194 |
Interest expense, net | 17 | 64 | 49 | 115 |
Earnings (loss) before income taxes | 75 | (3) | 100 | 79 |
Income tax expense (benefit) (NOTE 7) | 16 | (14) | 19 | (6) |
Net earnings | $ 59 | $ 11 | $ 81 | $ 85 |
Per common share (in dollars) (NOTE 4) | ||||
Basic | $ 0.94 | $ 0.17 | $ 1.29 | $ 1.34 |
Diluted | $ 0.94 | $ 0.17 | $ 1.29 | $ 1.34 |
Weighted average number of common shares outstanding (millions) | ||||
Basic | 62.6 | 62.9 | 62.6 | 63.4 |
Diluted | 62.7 | 63 | 62.7 | 63.5 |
Cash dividends per common share | $ 0.42 | $ 0.40 | $ 1.22 | $ 1.18 |
Net derivative (losses) gains on cash flow hedges: | ||||
Net (losses) gains arising during the period, net of tax of $4 and $(14), respectively (2015 - $13 and $24, respectively) | $ (6) | $ (19) | $ 23 | $ (35) |
Less: Reclassification adjustment for losses included in net earnings, net of tax of $(2) and $(10), respectively (2015 - $(5) and $(13), respectively) | 1 | 7 | 14 | 18 |
Foreign currency translation adjustments | 6 | (58) | 61 | (182) |
Change in unrecognized gains and prior service cost related to pension and post-retirement benefit plans, net of tax of $nil and $(2), respectively (2015 - $(1) and $(2), respectively) | 2 | 1 | 5 | 5 |
Other comprehensive income (loss) | 3 | (69) | 103 | (194) |
Comprehensive income (loss) | $ 62 | $ (58) | $ 184 | $ (109) |
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, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Net losses arising during the period, tax | $ 4 | $ 13 | $ (14) | $ 24 |
Reclassification adjustment for losses included in net earnings, tax | (2) | (5) | (10) | (13) |
Change in unrecognized gains (losses) and prior service cost related to pension and post-retirement benefit plans, tax | $ 0 | $ (1) | $ (2) | $ (2) |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 168 | $ 126 |
Receivables, less allowances of $6 and $6 | 616 | 627 |
Inventories (NOTE 8) | 770 | 766 |
Prepaid expenses | 46 | 21 |
Income and other taxes receivable | 33 | 14 |
Total current assets | 1,633 | 1,554 |
Property, plant and equipment, net | 2,887 | 2,835 |
Goodwill (NOTE 9) | 548 | 539 |
Intangible assets, net (NOTE 10) | 600 | 601 |
Other assets | 162 | 125 |
Total assets | 5,830 | 5,654 |
Current liabilities | ||
Trade and other payables | 645 | 720 |
Income and other taxes payable | 25 | 27 |
Long-term debt due within one year | 63 | 41 |
Total current liabilities | 733 | 788 |
Long-term debt | 1,309 | 1,210 |
Deferred income taxes and other | 692 | 654 |
Other liabilities and deferred credits | 342 | 350 |
Commitments and contingencies (NOTE 15) | ||
Shareholders' equity (NOTE 14) | ||
Common stock $0.01 par value; authorized 2,000,000,000 shares; issued: 65,001,104 shares | 1 | 1 |
Additional paid-in capital | 1,961 | 1,966 |
Retained earnings | 1,190 | 1,186 |
Accumulated other comprehensive loss | (398) | (501) |
Total shareholders' equity | 2,754 | 2,652 |
Total liabilities and shareholders' equity | $ 5,830 | $ 5,654 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Receivables, allowances | $ 6 | $ 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 | 2,415,767 | 2,151,168 |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity (Unaudited) - 9 months ended Sep. 30, 2016 - 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, 2015 | $ 2,652 | $ 1 | $ 1,966 | $ 1,186 | $ (501) |
Balance, Shares at Dec. 31, 2015 | 62,800,000 | ||||
Stock-based compensation, net of tax | 5 | 5 | |||
Stock-based compensation, shares | 100,000 | ||||
Net earnings | 81 | 81 | |||
Net derivative gains on cash flow hedges: | |||||
Net gains arising during the period, net of tax | 23 | 23 | |||
Less: Reclassification adjustments for losses included in net earnings, net of tax | 14 | 14 | |||
Foreign currency translation adjustments | 61 | 61 | |||
Change in unrecognized gains and prior service cost related to pension and post-retirement benefit plans, net of tax | 5 | 5 | |||
Stock repurchase | $ (10) | (10) | |||
Stock repurchase, shares | (304,915) | (300,000) | |||
Cash dividends declared | $ (77) | (77) | |||
Balance at Sep. 30, 2016 | $ 2,754 | $ 1 | $ 1,961 | $ 1,190 | $ (398) |
Balance, Shares at Sep. 30, 2016 | 62,600,000 |
Consolidated Statement of Shar7
Consolidated Statement of Shareholders' Equity (Parenthetical) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement Of Stockholders Equity [Abstract] | ||||
Net losses arising during the period, tax | $ 4 | $ 13 | $ (14) | $ 24 |
Reclassification adjustment for losses included in net earnings, tax | (2) | (5) | (10) | (13) |
Change in unrecognized gains (losses) and prior service cost related to pension and post-retirement benefit plans, tax | $ 0 | $ (1) | $ (2) | $ (2) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) CAD in Millions, $ in Millions | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | ||
Operating activities | |||
Net earnings | $ 81 | $ 85 | |
Adjustments to reconcile net earnings to cash flows from operating activities | |||
Depreciation and amortization | 263 | 270 | |
Deferred income taxes and tax uncertainties | 6 | (50) | |
Impairment of property, plant and equipment | 29 | 57 | |
Net gains on disposals of property, plant and equipment | [1] | (15) | |
Stock-based compensation expense | 5 | 5 | |
Other | (3) | 4 | |
Changes in assets and liabilities, excluding effect of acquisition of business | |||
Receivables | 19 | (11) | |
Inventories | 6 | (70) | |
Prepaid expenses | (5) | (3) | |
Trade and other payables | (53) | 8 | |
Income and other taxes | (18) | 30 | |
Difference between employer pension and other post-retirement contributions and pension and other post-retirement expense | (16) | 2 | |
Other assets and other liabilities | (4) | 4 | |
Cash flows provided from operating activities | 310 | 316 | |
Investing activities | |||
Additions to property, plant and equipment | (302) | (202) | |
Proceeds from disposals of property, plant and equipment | 35 | ||
Acquisition of business, net of cash acquired | (1) | ||
Other | 1 | 9 | |
Cash flows used for investing activities | (302) | (158) | |
Financing activities | |||
Dividend payments | (76) | (75) | |
Stock repurchase | (10) | (50) | |
Net change in bank indebtedness | 1 | (9) | |
Change in revolving bank credit facility | 60 | 75 | |
Proceeds from receivables securitization facility | 140 | ||
Repayments of receivables securitization facility | (40) | ||
Issuance of long-term debt | 300 | ||
Repayments of long-term debt | (40) | (439) | |
Other | (3) | 1 | |
Cash flows provided from (used for) financing activities | 32 | (197) | |
Net increase (decrease) in cash and cash equivalents | 40 | (39) | |
Impact of foreign exchange on cash | 2 | (7) | |
Cash and cash equivalents at beginning of period | 126 | 174 | |
Cash and cash equivalents at end of period | 168 | 128 | |
Supplemental cash flow information | |||
Interest (including $40 million of redemption premiums in 2015) | 50 | 121 | |
Income taxes paid, net | $ 37 | $ 16 | |
[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). |
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, 2016 | |
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 year ended December 31, 2015, as filed with the Securities and Exchange Commission. The December 31, 2015 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, 2016 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | NOTE 2. _________________ RECENT ACCOUNTING PRONOUNCEMENTS ACCOUNTING CHANGES IMPLEMENTED PRESENTATION OF DEBT ISSUANCE COSTS In April 2015, the FASB issued Accounting Standard Update (“ASU”) 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. In August 2015, the FASB also issued ASU 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements,” which allows debt issuance costs associated with line-of-credit arrangements to be presented as an asset. The Company adopted the new requirements on January 1, 2016 with retrospective application. The effect of this change in accounting policy on our Consolidated Balance Sheet as at December 31, 2015 was a reduction of $9 million in Other assets and Long-term debt. FUTURE ACCOUNTING CHANGES REVENUE FROM CONTRACTS WITH CUSTOMERS In May 2014, the FASB issued ASU 2014-09, “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. This new guidance will supersede the revenue recognition requirements found in topic 605. ASU 2014-09 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 how they will impact the consolidated financial statements. INVENTORY In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” which simplifies the measurement of inventories valued under FIFO – first-in, first-out – and moving average methods. Under this new guidance, inventories valued under these methods would be valued at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling costs less reasonable costs to sell the inventory. This ASU does not change the measurement principles for inventories valued under the LIFO – last-in, first-out – method. The amendments in the 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 new guidance to have a material impact on the consolidated financial statements. FINANCIAL INSTRUMENTS In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends the guidance on the classification and measurement of financial instruments. Although the ASU retains many current requirements, it significantly revises an entity’s accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The amendments in this update are effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. To adopt the amendments, the Company will be required to make a cumulative-effect adjustment to beginning retained earnings as of the beginning of the fiscal year in which the guidance is effective. Early adoption is permitted. The Company does not expect this new guidance to have a material impact on the consolidated financial statements. LEASES In February 2016, the FASB issued ASU 2016-02, “Leases,” which requires lessees to recognize a right-of-use asset and a lease liability for all of their leases with a lease term greater than 12 months while continuing to recognize expenses in the statement of earnings in a manner similar to current accounting standards. For lessors, the new standard modifies the classification criteria and the accounting for sales-type and direct financing leases. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of this guidance on the consolidated financial statements. SHARE-BASED PAYMENTS In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, with early adoption permitted as of the beginning of an interim or annual reporting period. The Company does not expect this new guidance to have a material impact on the consolidated financial statements. DERIVATIVES AND HEDGING In March 2016, the FASB issued ASU 2016-05, “Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships,” which clarifies that "a change in the counterparty to a derivative instrument that has been designated as the hedging instrument in an existing hedging relationship would not, in and of itself, be considered a termination of the derivative instrument" or "a change in a critical term of the hedging relationship." As long as all other hedge accounting criteria in ASC 815 are met, a hedging relationship in which the hedging derivative instrument is novated would not be discontinued or require redesignation. This clarification applies to both cash flow and fair value hedging relationships. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted as of the beginning of an interim or annual reporting period. The Company does not expect this new guidance to have a material impact on the consolidated financial statements. CLASSIFICATION OF CASH FLOWS In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows” which amends ASC 230 to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The guidance must be applied retrospectively to all periods presented but it may be applied prospectively if retrospective application would be impracticable. Early adoption is permitted. The Company does not expect this new guidance to have a material impact on the consolidated financial statements. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities and Fair Value Measurement | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities and Fair Value Measurement | NOTE 3. _________________ 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 periods 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, 2016, one of Domtar’s Pulp and Paper segment customers located in the United States represented 12% ($77 million) (2015 – 12% ($78 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 attempts to minimize this exposure by entering into contracts with counterparties that are believed to be of high credit quality. Collateral or other security to support financial instruments subject to credit risk is usually not obtained. The credit standing of counterparties is regularly monitored. INTEREST RATE RISK The Company is exposed to interest rate risk arising from fluctuations in interest rates on its cash and cash equivalents, bank indebtedness, 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. 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 60 months. The following table presents the volumes under derivative financial instruments for natural gas contracts outstanding as of September 30, 2016 to hedge forecasted purchases: Commodity Notional contractual quantity under derivative contracts MMBTU (2) Notional contractual value under derivative contracts (in millions of dollars) Percentage of forecasted purchases under derivative contracts Natural Gas 2016 (1) 4,620,000 $ 14 80% 2017 8,980,000 $ 28 34% 2018 5,085,000 $ 15 19% 2019 6,560,000 $ 20 25% 2020 5,750,000 $ 18 22% 2021 2,930,000 $ 10 15% (1) Represents the remaining three months of 2016 (2) MMBTU: Millions of British thermal units The natural gas derivative contracts were fully effective as of September 30, 2016. There were no amounts reflected in the Consolidated Statements of Earnings and Comprehensive Income (Loss) for the three and nine months ended September 30, 2016 resulting from hedge ineffectiveness (three and nine months ended September 30, 2015 – 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 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. Additionally, there has been, and may continue to be, volatility in currency exchange rates as a result of the United Kingdon’s June 23, 2016 referendum in which voters approved the United Kingdom’s exit from the European Union, commonly referred to as “Brexit.” The Company’s risk management policy allows it to hedge a significant portion of its exposure to fluctuations in foreign currency exchange rates for periods up to three years. The Company may use derivative financial instruments (currency options and foreign exchange forward contracts) to mitigate its exposure to fluctuations in foreign currency exchange rates. Derivatives are used to hedge forecasted purchases in Canadian dollars by the Company’s Canadian subsidiary over the next 24 months. Derivatives are used to hedge a portion of forecasted sales by its U.S. subsidiaries in Euros and in British pounds over the next 12 months. Derivatives are also used to hedge a portion of forecasted sales in British pounds and Norwegian krone and a portion of forecasted purchases in U.S. dollars and Swedish krona by its European subsidiaries over a period of between 12 to 24 months. Such derivatives are designated as cash flow hedges. The changes in the fair value on qualifying instruments are included in Accumulated other comprehensive loss to the extent effective, and reclassified into Sales or Cost of sales in the period during which the hedged transaction affects earnings. The following table presents the currency values under significant currency positions pursuant to currency derivatives outstanding as of September 30, 2016 to hedge forecasted purchases and sales: Currency exposure hedged Business Segment Year of maturity Notional contractual value Percentage of forecasted net exposures under contracts Average Protection rate Average Obligation rate 2016 CDN/USD Pulp and Paper 137 CDN 71% 1 USD = 1.2584 1 USD = 1.3008 USD/Euro Personal Care 13 USD 64% 1 Euro = 1.1344 1 Euro = 1.1344 Euro/USD Pulp and Paper 9 EUR 75% 1 Euro = 1.1321 1 Euro = 1.1321 2017 CDN/USD Pulp and Paper 468 CDN 60% 1 USD = 1.3045 1 USD = 1.3557 USD/Euro Personal Care 49 USD 66% 1 Euro = 1.1357 1 Euro = 1.1357 Euro/USD Pulp and Paper 19 EUR 50% 1 Euro = 1.1370 1 Euro = 1.1370 2018 CDN/USD Pulp and Paper 142 CDN 18% 1 USD = 1.2890 1 USD = 1.3528 USD/Euro Personal Care 14 USD 18% 1 Euro = 1.1532 1 Euro = 1.1532 The foreign exchange derivative contracts were fully effective as of September 30, 2016. There were no amounts reflected in the Consolidated Statements of Earnings and Comprehensive Income (Loss) for the three and nine months ended September 30, 2016 resulting from hedge ineffectiveness (three and nine months ended September 30, 2015 - 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, 2016 and December 31, 2015, 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, 2016 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 as hedging instruments: Asset derivatives Currency derivatives 18 — 18 — (a) Prepaid expenses Natural gas swap contracts 3 — 3 — (a) Prepaid expenses Currency derivatives 8 — 8 — (a) Other assets Natural gas swap contracts 2 — 2 — (a) Other assets Total Assets 31 — 31 — Liabilities derivatives Currency derivatives 12 — 12 — (a) Trade and other payables Natural gas swap contracts 4 — 4 — (a) Trade and other payables Currency derivatives 4 — 4 — (a) Other Natural gas swap contracts 5 — 5 — (a) Other liabilities and deferred credits Total Liabilities 25 — 25 — Other Instruments: Long-term debt 1,446 — 1,446 — (c) Long-term debt The cumulative loss recorded in Other comprehensive income (loss) relating to natural gas contracts of $4 million at September 30, 2016, will be recognized in Cost of sales upon maturity of the derivatives over the next 60 months at the then prevailing values, which may be different from those at September 30, 2016. The cumulative gain recorded in Other comprehensive income (loss) relating to currency options and forwards hedging forecasted purchases of $10 million at September 30, 2016, 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, 2016. Fair Value of financial instruments at: December 31, 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 as hedging instruments: Asset derivatives Currency derivatives 6 — 6 — (a) Prepaid expenses Natural gas swap contracts 1 — 1 — (a) Prepaid expenses Currency derivatives 2 — 2 — (a) Other assets Natural gas swap contracts 1 — 1 — (a) Other assets Total Assets 10 — 10 — Liabilities derivatives Currency derivatives 39 — 39 — (a) Trade and other payables Natural gas swap contracts 14 — 14 — (a) Trade and other payables Currency derivatives 10 — 10 — (a) Other liabilities and deferred credits Natural gas swap contracts 4 — 4 — (a) Other liabilities and deferred credits Total Liabilities 67 — 67 — Other Instruments: Asset backed notes ("ABN") 1 — — 1 (b) Other assets Long-term debt 1,261 — 1,261 — (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 3 inputs. 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. The Company’s long-term debt is not carried at fair value on the Consolidated Balance Sheets at September 30, 2016 and December 31, 2015. However, fair value disclosure is required. The carrying value of the Company’s long-term debt is $1,372 million and $1,251 million at September 30, 2016 and December 31, 2015, 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, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | NOTE 4. _________________ 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, 2016 2015 2016 2015 Net earnings $ 59 $ 11 $ 81 $ 85 Weighted average number of common shares outstanding (millions) 62.6 62.9 62.6 63.4 Effect of dilutive securities (millions) 0.1 0.1 0.1 0.1 Weighted average number of diluted common shares outstanding (millions) 62.7 63.0 62.7 63.5 Basic net earnings per common share (in dollars) $ 0.94 $ 0.17 $ 1.29 $ 1.34 Diluted $ 0.94 $ 0.17 $ 1.29 $ 1.34 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, 2016 2015 2016 2015 Options 412,372 110,219 412,372 137,191 |
Pension Plans and Other Post-Re
Pension Plans and Other Post-Retirement Benefit Plans | 9 Months Ended |
Sep. 30, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |
Pension Plans and Other Post-Retirement Benefit Plans | NOTE 5. _________________ PENSION PLANS AND OTHER POST-RETIREMENT BENEFIT PLANS DEFINED CONTRIBUTION PLANS The Company has several defined contribution plans and multiemployer plans. The pension expense under these plans is equal to the Company’s contribution. For the three and nine months ended September 30, 2016, the pension expense was $11 million and $29 million, respectively (2015 – $9 million and $24 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 January 1, 1998 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. Unionized and non-union hourly employees in the U.S. who 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, 2016 September 30, 2016 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 7 1 23 2 Interest expense 12 — 37 2 Expected return on plan assets (19 ) — (58 ) — Amortization of net actuarial loss 1 — 3 — Amortization of prior year service costs 2 — 4 — Net periodic benefit cost 3 1 9 4 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 For the three and nine months ended September 30, 2016, the Company contributed $18 million and $27 million, respectively (2015 – $5 million and $11 million, respectively) to the pension plans and $1 million and $3 million, respectively (2015 – $1 million and $4 million, respectively) to the other post-retirement benefit plans. |
Other Operating Loss (Income),
Other Operating Loss (Income), Net | 9 Months Ended |
Sep. 30, 2016 | |
Other Income And Expenses [Abstract] | |
Other Operating Loss (Income), Net | NOTE 6. _________________ OTHER OPERATING LOSS (INCOME), NET Other operating loss (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 loss (income), net includes the following: For the three months ended For the nine months ended September 30, September 30, September 30, September 30, 2016 2015 2016 2015 $ $ $ $ Gain on sale of property, plant and equipment (1) — — — (15 ) Bad debt expense — (1 ) — 4 Environmental provision — 4 — 4 Litigation settlement — — 2 — Foreign exchange loss (gain) 1 (3 ) 5 (3 ) Other (1 ) — (3 ) 2 Other operating loss (income), net — — 4 (8 ) (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). |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 7. _________________ INCOME TAXES In the third quarter of 2016, the Company’s income tax expense was $16 million, consisting of a current income tax expense of $5 million and a deferred income tax expense of $11 million. This compares to an income tax benefit of $14 million in the third quarter of 2015, consisting of a current income tax expense of $4 million and a deferred income tax benefit of $18 million. The effective tax rate was 21% compared with an effective tax rate of 467% in the third quarter of 2015. The effective tax rates for both the third quarter of 2016 and the third quarter of 2015 were impacted by the finalization of certain estimates in connection with the filing of our 2015 and 2014 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 of property, plant, and equipment charges occurring in a high-tax jurisdiction. In the first nine months of 2016, the Company’s income tax expense was $19 million, consisting of current income tax expense of $13 million and deferred income tax expense of $6 million. This compares to an income tax benefit of $6 million in the first nine months of 2015, consisting of a current income tax expense of $44 million and a deferred income tax benefit of $50 million. The effective tax rate was 19% compared to an effective tax rate of (8)% in the first nine months of 2015. the effective tax rate for the first nine months of 2016 was impacted by the approval of a state tax credit in the U.S. The effective tax rate for the first nine months of 2015 was impacted 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 of property, plant, and equipment charges occurring in a high-tax jurisdiction. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 8. _________________ INVENTORIES The following table presents the components of inventories: September 30, December 31, 2016 2015 $ $ Work in process and finished goods 417 432 Raw materials 141 130 Operating and maintenance supplies 212 204 770 766 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | NOTE 9. _________________ GOODWILL The carrying value and any changes in the carrying value of goodwill are as follows: September 30, 2016 $ Balance at December 31, 2015 539 Effect of foreign currency exchange rate change 9 Balance at end of period 548 The goodwill at September 30, 2016 is entirely related to the Personal Care segment. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | NOTE 10. _________________ INTANGIBLE ASSETS The following table presents the components of intangible assets: September 30, December 31, 2016 2015 Estimated useful lives (in years) Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net $ $ $ $ $ $ Definite-lived intangible assets subject to amortization Water rights 40 7 (1 ) 6 7 (1 ) 6 Customer relationships 10 - 40 360 (58 ) 302 354 (46 ) 308 Technology 7 - 20 8 (3 ) 5 8 (2 ) 6 Non-Compete 9 1 — 1 1 — 1 License rights 12 28 (7 ) 21 28 (6 ) 22 404 (69 ) 335 398 (55 ) 343 Indefinite-lived intangible assets not subject to amortization Trade names 221 — 221 215 — 215 License rights 6 — 6 6 — 6 Catalog rights 38 — 38 37 — 37 Total 669 (69 ) 600 656 (55 ) 601 Amortization expense related to intangible assets for the three and nine months ended September 30, 2016 was $5 million and $14 million, respectively (2015 – $5 million and $14 million, respectively). Amortization expense for the next five years related to intangible assets is expected to be as follows: 2016 2017 2018 2019 2020 $ $ $ $ $ Amortization expense related to intangible assets 19 19 19 18 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, 2016 | |
Restructuring And Related Activities [Abstract] | |
Closure and Restructuring Costs and Liability and Impairment and Write-Down of Property, Plant and Equipment | NOTE 11. _________________ CLOSURE AND RESTRUCTURING COSTS AND LIABILITY AND IMPAIRMENT 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. Plymouth, North Carolina mill On September 23, 2016, the Company announced a plan to optimize fluff pulp manufacturing at the Plymouth, North Carolina mill. The restructuring, which is expected to be completed by mid-2017, includes the permanent closure of a pulp dryer and idling of related assets, in addition to a workforce reduction of approximately 100 positions. The streamlining process will also right-size the mill to an annualized production target of approximately 380,000 metric tons of fluff pulp. The Company recorded $5 million of severance and termination costs under Closure and restructuring costs during the third quarter of 2016. Ashdown, Arkansas mill On December 10, 2014, the Company announced a 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 Company also invested in a pulp bale line that will provide flexibility to manufacture papergrade softwood pulp, contingent on market conditions. The conversion work commenced during the second quarter of 2016 and the production of bale softwood pulp began in the third quarter of 2016. The fluff qualification period is set to begin in the fourth quarter of 2016. The fluff pulp line 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 resulted in the permanent reduction of 364,000 short tons of annual uncoated freesheet production capacity on March 31, 2016. The Company recorded $5 million and $29 million for the three and nine months ended September 30, 2016, respectively, of accelerated depreciation under Impairment of property, plant and equipment on the Consolidated Statement of Earnings and Comprehensive Income (Loss). The Company also recorded $5 million and $26 million of costs related to the fluff pulp conversion outage under Closure and restructuring costs for the three and nine months ended September 30, 2016. During the first quarter of 2016, the Company recorded $1 million of severance and termination costs under Closure and restructuring costs. The Company recorded $20 million and $57 million for the three and nine months ended September 30, 2015, respectively, of accelerated depreciation under Impairment of property, plant and equipment on the Consolidated Statement of Earnings and Comprehensive Income (Loss). For the three and nine months ended September 30, 2015, the Company recorded $1 million and $2 million, respectively, of severance and termination costs under Closure and restructuring costs. Other costs For the three and nine months ended September 30, 2016, other costs related to previous and ongoing closures include nil and $1 million, respectively, of severance and termination costs related to Pulp and Paper. 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. At September 30, 2016, the Company’s provision for closure and restructuring costs is $8 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, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | NOTE 12. _________________ LONG-TERM DEBT BANK FACILITY On August 18, 2016, the Company amended and restated its existing unsecured Amended and Restated Credit Agreement, dated October 3, 2014 (the “Existing Credit Agreement”; as so amended and restated, the “2016 Credit Agreement”), among the Company and certain of its subsidiaries (including certain Canadian and European subsidiaries that were not borrowers under the Existing Credit Agreement) as borrowers, and the lenders and agents party thereto. The 2016 Credit Agreement matures on August 18, 2021. The maximum aggregate amount of availability under the 2016 Credit Agreement is $700 million, an increase of $100 million from the Existing Credit Agreement of $600 million. Borrowings under the 2016 Credit Agreement will bear interest at the same rates as borrowings under the Existing Credit Agreement. Borrowings by U.S. borrowers under the 2016 Credit Agreement are guaranteed by the Company and its significant domestic subsidiaries. Borrowings by foreign borrowers under the 2016 Credit Agreement are guaranteed by the Company, the Company’s significant domestic subsidiaries and certain of the Company’s foreign significant subsidiaries. Unlike the Existing Credit Agreement, no insignificant subsidiaries guarantee obligations of the borrowers under the 2016 Credit Agreement. The 2016 Credit Agreement contains customary covenants and events of default for transactions of this type, including two financial covenants: (i) an interest coverage ratio, that must be maintained at a level of not less than 3 to 1 and (ii) a leverage ratio that must be maintained at a level of not greater than 3.75 to 1 (or 4.00 to 1 upon the occurrence of certain qualifying material acquisitions). The other terms of the 2016 Credit Agreement are generally consistent with the terms of the Existing Credit Agreement. TERM LOAN On August 18, 2016, the Company entered into an amendment (the “Amendment”) to its Term Loan Agreement, dated July 20, 2015, pursuant to which, among other things, certain subsidiaries of the Company were designated as “insignificant subsidiaries” and were released from their guarantees of the borrower’s obligations under the Term Loan Agreement, as amended by the Amendment. UNSECURED NOTES The Company’s 9.5% Notes, in the aggregate principal amount of $39 million, matured on August 1, 2016. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss by Component | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss by Component | NOTE 13. _________________ CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS BY COMPONENT The following table presents the changes in Accumulated other comprehensive loss by component ( 1) Net gains 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 (8 ) N/A N/A N/A (8 ) Currency options (40 ) N/A N/A N/A (40 ) Foreign exchange forward contracts 7 N/A N/A N/A 7 Net (gain) loss N/A (5 ) 3 N/A (2 ) Foreign currency items N/A N/A N/A (223 ) (223 ) Other comprehensive (loss) income before reclassifications (41 ) (5 ) 3 (223 ) (266 ) Amounts reclassified from Accumulated other comprehensive loss 26 7 — — 33 Net current period other comprehensive (loss) income (15 ) 2 3 (223 ) (233 ) Balance at December 31, 2015 (30 ) (190 ) (10 ) (271 ) (501 ) Natural gas swap contracts — N/A N/A N/A — Net investment hedge (1 ) N/A N/A N/A (1 ) Currency options 12 N/A N/A N/A 12 Foreign exchange forward contracts 12 N/A N/A N/A 12 Foreign currency items N/A N/A N/A 61 61 Other comprehensive income before reclassifications 23 — — 61 84 Amounts reclassified from Accumulated other comprehensive loss 14 5 — — 19 Net current period other comprehensive income 37 5 — 61 103 Balance at September 30, 2016 7 (185 ) (10 ) (210 ) (398 ) (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 table presents 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, 2016 September 30, 2015 Net derivative gains on cash flow hedges Natural gas swap contracts 2 2 (1) Currency options and forwards 1 10 (1) Total before tax 3 12 Tax expense (2 ) (5 ) Net of tax 1 7 Amortization of defined benefit pension items Amortization of net actuarial loss and prior year service cost 2 2 (2) Tax expense — (1 ) Net of tax 2 1 Details about Accumulated other comprehensive loss components Amount reclassified from Accumulated other comprehensive loss For the nine months ended September 30, 2016 September 30, 2015 Net derivative gains on cash flow hedges Natural gas swap contracts 12 11 (1) Currency options and forwards 12 20 (1) Total before tax 24 31 Tax expense (10 ) (13 ) Net of tax 14 18 Amortization of defined benefit pension items Amortization of net actuarial loss and prior year service cost 7 7 (2) Tax expense (2 ) (2 ) Net of tax 5 5 (1) These amounts are included in Cost of Sales in the Consolidated Statements of Earnings and Comprehensive Income (Loss). (2) These amounts are included in the computation of net periodic benefit cost. Refer to Note 5 “Pension plans and other post-retirement benefit plans” for additional details. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Shareholders' Equity | NOTE 14. _________________ SHAREHOLDERS’ EQUITY On February 22, 2016, May 3, 2016 and August 2, 2016, the Company’s Board of Directors approved a quarterly dividend of $0.40, $0.415 and $0.415 per share, respectively, to be paid to holders of the Company’s common stock. Total dividends of approximately $25 million, $26 million and $26 million, respectively, were paid on April 15, 2016, July 15, 2016 and October 17, 2016, respectively, to shareholders of record on April 4, 2016, July 5, 2016 and October 3, 2016, respectively. On November 1, 2016, the Company’s Board of Directors approved a quarterly dividend of $0.415 per share to be paid to holders of the Company’s common stock. This dividend is to be paid on January 17, 2017, to shareholders of record on January 3, 2017. 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. 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 and awards, and to improve shareholders’ returns. The Company makes open market purchases of its common stock using general corporate funds. Additionally, the Company may enter 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 would require the Company to make up-front payments to the counterparty financial institutions, which would result 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 2016, the Company repurchased 304,915 shares at an average price of $32.21 for a total cost of $10 million. 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. Since the inception of the Program, the Company has repurchased 24,853,827 shares at an average price of $39.33 for a total cost of $977 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, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 15. _________________ COMMITMENTS AND CONTINGENCIES ENVIRONMENT The Company is subject to environmental laws and regulations enacted by federal, provincial, state and local authorities. On February 16, 2010, the government of British Columbia issued a Remediation Order to Seaspan International Ltd. (“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 obtained permitting approval on May 14, 2015 from the Vancouver Fraser Port Authority. It is anticipated that construction will begin in 2017. 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, 2016 $ Balance at beginning of year 52 Additions 1 Environmental spending (3 ) Effect of foreign currency exchange rate change 2 Balance at end of period 52 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. In the United States, EPA’s Clean Power Plan requires states to develop compliance plans to reduce greenhouse gases (“GHG”) emissions beginning in 2022 from existing electric utilities. The Clean Power Plan requirements could result in significant changes to state energy resources and increase the cost of purchased energy in most states. The final rule is being litigated and on February 9, 2016, the U.S. Supreme Court stayed the implementation of the Clean Power Plan until the litigation is resolved. Oral argument was held before an en banc panel of the U.S. Court of Appeals for the D.C. Circuit on September 27, 2016, and a final decision is expected within months, although subsequent appeals to the U.S. Supreme Court are likely. The Company does not expect to be disproportionately affected compared with other pulp and paper producers located in the states where the Company operates. The 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 EPA measures compared with other pulp and paper producers in the United States. The Government of Canada is reviewing national policies to further GHG reductions and possibly establish a uniform national carbon price. The province of Quebec has a GHG cap-and-trade system with reduction targets. British Columbia has a carbon tax that applies to the purchase of fossil fuels within the province. The province of Ontario has finalized a cap-and-trade program with the first compliance period beginning January 1, 2017 through 2020. The Company does not expect to be disproportionately affected compared to the other large pulp and paper producers located in these provinces. 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, 2016, 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 Competition Directorate of 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 On January 4, 2016, the Competition Directorate issued a proposed decision confirming the allegations of the Statement of Objections. The proposed decision recommended the imposition of fines on the parties without recommending the amount of any fines. The Company recorded a €0.2 million ($0.2 million) provision in the fourth quarter of 2015 in Other operating loss (income), net. On May 26, 2016, the CNMC rendered its final decision, which declared that a number of manufacturers of adult heavy incontinence products, the sector association and certain individuals participated in price fixing during the period from December 1996 through January 2014. Indas and one of its subsidiaries were fined a total of €13.5 million ($14.9 million) for their participation. A provision was recorded in the second quarter of 2016 in the amount of €13.3 million ($14.7 million) in Other operating loss (income), net. 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 ($3.3 million) and bank guarantees of €9 million ($9.9 million). On June 27, 2016, in light of the CNMC decision, the sellers, in terms of their indemnity obligations, have agreed to the appropriation by the Company of the retained purchase price and the release of the bank guarantees. Accordingly, a recovery of €12 million ($13.2 million) was recorded in the second quarter of 2016 and included in Other operating loss (income), net. In July 2016, the fines were paid and Indas and two of its affiliates named in the final decision appealed the decision to the Spanish courts. The Company purchased limited insurance coverage with respect to the purchase agreement, and will seek to recover the remaining €1.5 million ($1.7 million) under the insurance policy. Any recovery from the insurers would be recorded in the period when the proceeds are received. 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, 2016, 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, 2016, 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, 2016 | |
Segment Reporting [Abstract] | |
Segment Disclosures | NOTE 16. _________________ SEGMENT DISCLOSURES The Company’s two reportable segments described below also represent its two operating segments. 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 – consists of the design, manufacturing, marketing and distribution of communication, specialty and packaging papers, as well as softwood, fluff and hardwood market pulp. • Personal Care – consists of the design, manufacturing, marketing and distribution of absorbent hygiene products. An analysis and reconciliation of the Company’s business segment information to the respective information in the financial statements is as follows: For the three months ended For the nine months ended September 30, September 30, September 30, September 30, SEGMENT DATA 2016 2015 2016 2015 $ $ $ $ Sales Pulp and Paper 1,054 1,092 3,193 3,348 Personal Care 231 214 675 648 Total for reportable segments 1,285 1,306 3,868 3,996 Intersegment sales (15 ) (14 ) (44 ) (46 ) Consolidated sales 1,270 1,292 3,824 3,950 Depreciation and amortization and impairment of property, plant and equipment Pulp and Paper 71 75 216 224 Personal Care 16 14 47 46 Total for reportable segments 87 89 263 270 Impairment of property, plant and equipment - Pulp and Paper 5 20 29 57 Consolidated depreciation and amortization and impairment of property, plant and equipment 92 109 292 327 Operating income (loss) Pulp and Paper 89 54 143 184 Personal Care 15 18 44 45 Corporate (12 ) (11 ) (38 ) (35 ) Consolidated operating income 92 61 149 194 Interest expense, net 17 64 49 115 Earnings (loss) before income taxes 75 (3 ) 100 79 Income tax expense (benefit) 16 (14 ) 19 (6 ) Net earnings 59 11 81 85 |
Supplemental Guarantor Financia
Supplemental Guarantor Financial Information | 9 Months Ended |
Sep. 30, 2016 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Supplemental Guarantor Financial Information | NOTE 17. _________________ 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), Domtar A.W. LLC, Attends Healthcare Products Inc., EAM Corporation and Associated Hygienic Products LLC, all 100% owned subsidiaries of the Company (“Guarantor Subsidiaries”), on a joint and several basis. Pursuant to the amendment and restatement of the 2016 Credit Agreement on August 18, 2016, the Guaranteed Debt will not be guaranteed by certain of Domtar’s 100% owned subsidiaries; including Domtar Delaware Holdings Inc. and its foreign subsidiaries, including Attends Healthcare Limited, Domtar Inc. and Laboratorios Indas, S.A.U.. Also excluded are Ariva Distribution Inc., Domtar Delaware Investments Inc., Domtar Delaware Holdings, LLC, Domtar AI Inc., Domtar Personal Care Absorbent Hygiene Inc., Domtar Wisconsin Dam Corp. and Palmetto Enterprises LLC, (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, 2016 and December 31, 2015, the Statements of Earnings and Comprehensive Income (Loss) for the three and nine months ended September 30, 2016 and 2015 and the Statements of Cash Flows for the nine months ended September 30, 2016 and 2015 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, 2016 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 1,044 516 (290 ) 1,270 Operating expenses Cost of sales, excluding depreciation and amortization — 879 380 (290 ) 969 Depreciation and amortization — 65 22 — 87 Selling, general and administrative 3 28 76 — 107 Impairment of property, plant and equipment — 5 — — 5 Closure and restructuring costs — 10 — — 10 Other operating (income) loss, net — (1 ) 1 — — 3 986 479 (290 ) 1,178 Operating (loss) income (3 ) 58 37 — 92 Interest expense (income), net 16 51 (50 ) — 17 (Loss) earnings before income taxes (19 ) 7 87 — 75 Income tax (benefit) expense (4 ) (3 ) 23 — 16 Share in earnings of equity accounted investees 74 64 — (138 ) — Net earnings 59 74 64 (138 ) 59 Other comprehensive income 3 7 7 (14 ) 3 Comprehensive income 62 81 71 (152 ) 62 For the nine months ended September 30, 2016 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 3,150 1,535 (861 ) 3,824 Operating expenses Cost of sales, excluding depreciation and amortization — 2,725 1,168 (861 ) 3,032 Depreciation and amortization — 193 70 — 263 Selling, general and administrative 13 80 221 — 314 Impairment of property, plant and equipment — 29 — — 29 Closure and restructuring costs — 33 — — 33 Other operating loss (income), net 1 (2 ) 5 — 4 14 3,058 1,464 (861 ) 3,675 Operating (loss) income (14 ) 92 71 — 149 Interest expense (income), net 48 67 (66 ) — 49 (Loss) earnings before income taxes (62 ) 25 137 — 100 Income tax (benefit) expense (14 ) 1 32 — 19 Share in earnings of equity accounted investees 129 105 — (234 ) — Net earnings 81 129 105 (234 ) 81 Other comprehensive income 103 97 63 (160 ) 103 Comprehensive income 184 226 168 (394 ) 184 For the three months ended September 30, 2015 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND 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 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 Guarantor Guarantor Consolidating AND 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 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 ) September 30, 2016 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING BALANCE SHEET Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Assets Current assets Cash and cash equivalents 36 — 132 — 168 Receivables — 265 351 — 616 Inventories — 549 221 — 770 Prepaid expenses 14 22 10 — 46 Income and other taxes receivable 10 13 14 (4 ) 33 Intercompany accounts 346 210 190 (746 ) — Total current assets 406 1,059 918 (750 ) 1,633 Property, plant and equipment, net — 2,042 845 — 2,887 Goodwill — 296 252 — 548 Intangible assets, net — 248 352 — 600 Investments in affiliates 4,050 2,835 — (6,885 ) — Intercompany long-term advances 6 80 1,401 (1,487 ) — Other assets 11 18 133 — 162 Total assets 4,473 6,578 3,901 (9,122 ) 5,830 Liabilities and shareholders' equity Current liabilities Trade and other payables 49 389 207 — 645 Intercompany accounts 135 200 411 (746 ) — Income and other taxes payable — — 29 (4 ) 25 Long-term debt due within one year 63 — — — 63 Total current liabilities 247 589 647 (750 ) 733 Long-term debt 901 300 108 — 1,309 Intercompany long-term loans 553 934 — (1,487 ) — Deferred income taxes and other — 548 144 — 692 Other liabilities and deferred credits 18 157 167 — 342 Shareholders' equity 2,754 4,050 2,835 (6,885 ) 2,754 Total liabilities and shareholders' equity 4,473 6,578 3,901 (9,122 ) 5,830 December 31, 2015 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING BALANCE SHEET Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Assets Current assets Cash and cash equivalents 49 2 75 — 126 Receivables — 384 243 — 627 Inventories — 556 210 — 766 Prepaid expenses 8 7 6 — 21 Income and other taxes receivable — 13 11 (10 ) 14 Intercompany accounts 764 4,776 16 (5,556 ) — Total current assets 821 5,738 561 (5,566 ) 1,554 Property, plant and equipment, net — 2,018 817 — 2,835 Goodwill — 296 243 — 539 Intangible assets, net — 254 347 — 601 Investments in affiliates 8,005 2,050 — (10,055 ) — Intercompany long-term advances 6 88 621 (715 ) — Other assets 15 10 115 (15 ) 125 Total assets 8,847 10,454 2,704 (16,351 ) 5,654 Liabilities and shareholders' equity Current liabilities Trade and other payables 61 456 203 — 720 Intercompany accounts 4,685 722 149 (5,556 ) — Income and other taxes payable 4 24 9 (10 ) 27 Long-term debt due within one year 38 1 2 — 41 Total current liabilities 4,788 1,203 363 (5,566 ) 788 Long-term debt 901 301 8 — 1,210 Intercompany long-term loans 490 225 — (715 ) — Deferred income taxes and other — 535 131 (12 ) 654 Other liabilities and deferred credits 16 185 152 (3 ) 350 Shareholders' equity 2,652 8,005 2,050 (10,055 ) 2,652 Total liabilities and shareholders' equity 8,847 10,454 2,704 (16,351 ) 5,654 For the nine months ended September 30, 2016 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Adjustments Consolidated $ $ $ $ $ Operating activities Net earnings 81 129 105 (234 ) 81 Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings (4,288 ) 4,168 115 234 229 Cash flows (used for) provided from operating activities (4,207 ) 4,297 220 — 310 Investing activities Additions to property, plant and equipment — (246 ) (56 ) — (302 ) Acquisition of business, net of cash acquired — (1 ) — — (1 ) Other — — 1 — 1 Cash flows used for investing activities — (247 ) (55 ) — (302 ) Financing activities Dividend payments (76 ) — — — (76 ) Stock repurchase (10 ) — — — (10 ) Net change in bank indebtedness — 1 — — 1 Change in revolving bank credit facility 60 — — — 60 Proceeds from receivables securitization facility — — 140 — 140 Repayments of receivables securitization facility — — (40 ) — (40 ) Repayments of long-term debt (38 ) (1 ) (1 ) — (40 ) Increase in long-term advances to related parties — (4,052 ) (209 ) 4,261 — Decrease in long-term advances to related parties 4,261 — — (4,261 ) — Other (3 ) — — — (3 ) Cash flows provided from (used for) financing activities 4,194 (4,052 ) (110 ) — 32 Net (decrease) increase in cash and cash equivalents (13 ) (2 ) 55 — 40 Impact of foreign exchange on cash — — 2 — 2 Cash and cash equivalents at beginning of period 49 2 75 — 126 Cash and cash equivalents at end of period 36 — 132 — 168 For the nine months ended September 30, 2015 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating 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 Repayments 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 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | NOTE 18. _________________ SUBSEQUENT EVENT Acquisition of Home Delivery Incontinent Supplies Co. Effective October 1, 2016, Domtar Corporation completed the acquisition of 100% of the outstanding shares of Home Delivery Incontinent Supplies Co. (“HDIS”), a leading national direct-to-consumer provider of adult incontinence and related products. The purchase price was $53 million, net of cash acquired of $3 million and includes a potential earn-out payment of up to $10 million. Headquartered in Olivette, Missouri, HDIS provides customers with high-quality products and a personalized service for all of their incontinence needs. HDIS has annual revenues of approximately $65 million, operates a 200,000 square foot distribution center in Olivette, Missouri, as well as two retail locations, in Texarkana, Arkansas and Daytona Beach, Florida and employs approximately 240 people. The results of HDIS’ operations will be included in the Personal Care reportable segment starting October 1, 2016. |
Recent Accounting Pronounceme28
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Presentation of Debt Issuance Costs | PRESENTATION OF DEBT ISSUANCE COSTS In April 2015, the FASB issued Accounting Standard Update (“ASU”) 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. In August 2015, the FASB also issued ASU 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements,” which allows debt issuance costs associated with line-of-credit arrangements to be presented as an asset. The Company adopted the new requirements on January 1, 2016 with retrospective application. The effect of this change in accounting policy on our Consolidated Balance Sheet as at December 31, 2015 was a reduction of $9 million in Other assets and Long-term debt. |
Future Accounting Changes [Member] | |
Revenue Recognition | REVENUE FROM CONTRACTS WITH CUSTOMERS In May 2014, the FASB issued ASU 2014-09, “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. This new guidance will supersede the revenue recognition requirements found in topic 605. ASU 2014-09 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 how they will impact the consolidated financial statements. |
Inventory | INVENTORY In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” which simplifies the measurement of inventories valued under FIFO – first-in, first-out – and moving average methods. Under this new guidance, inventories valued under these methods would be valued at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling costs less reasonable costs to sell the inventory. This ASU does not change the measurement principles for inventories valued under the LIFO – last-in, first-out – method. The amendments in the 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 new guidance to have a material impact on the consolidated financial statements. |
Financial Instruments | FINANCIAL INSTRUMENTS In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends the guidance on the classification and measurement of financial instruments. Although the ASU retains many current requirements, it significantly revises an entity’s accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The amendments in this update are effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. To adopt the amendments, the Company will be required to make a cumulative-effect adjustment to beginning retained earnings as of the beginning of the fiscal year in which the guidance is effective. Early adoption is permitted. The Company does not expect this new guidance to have a material impact on the consolidated financial statements. |
Leases | LEASES In February 2016, the FASB issued ASU 2016-02, “Leases,” which requires lessees to recognize a right-of-use asset and a lease liability for all of their leases with a lease term greater than 12 months while continuing to recognize expenses in the statement of earnings in a manner similar to current accounting standards. For lessors, the new standard modifies the classification criteria and the accounting for sales-type and direct financing leases. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of this guidance on the consolidated financial statements. |
Share-Based Payments | SHARE-BASED PAYMENTS In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, with early adoption permitted as of the beginning of an interim or annual reporting period. The Company does not expect this new guidance to have a material impact on the consolidated financial statements. |
Derivatives and Hedging | DERIVATIVES AND HEDGING In March 2016, the FASB issued ASU 2016-05, “Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships,” which clarifies that "a change in the counterparty to a derivative instrument that has been designated as the hedging instrument in an existing hedging relationship would not, in and of itself, be considered a termination of the derivative instrument" or "a change in a critical term of the hedging relationship." As long as all other hedge accounting criteria in ASC 815 are met, a hedging relationship in which the hedging derivative instrument is novated would not be discontinued or require redesignation. This clarification applies to both cash flow and fair value hedging relationships. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted as of the beginning of an interim or annual reporting period. The Company does not expect this new guidance to have a material impact on the consolidated financial statements. |
Classification of Cash Flows | CLASSIFICATION OF CASH FLOWS In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows” which amends ASC 230 to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The guidance must be applied retrospectively to all periods presented but it may be applied prospectively if retrospective application would be impracticable. Early adoption is permitted. The Company does not expect this new guidance to have a material impact on the consolidated financial statements. |
Derivatives and Hedging Activ29
Derivatives and Hedging Activities and Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 to hedge forecasted purchases: Commodity Notional contractual quantity under derivative contracts MMBTU (2) Notional contractual value under derivative contracts (in millions of dollars) Percentage of forecasted purchases under derivative contracts Natural Gas 2016 (1) 4,620,000 $ 14 80% 2017 8,980,000 $ 28 34% 2018 5,085,000 $ 15 19% 2019 6,560,000 $ 20 25% 2020 5,750,000 $ 18 22% 2021 2,930,000 $ 10 15% (1) Represents the remaining three months of 2016 (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 currency positions pursuant to currency derivatives outstanding as of September 30, 2016 to hedge forecasted purchases and sales: Currency exposure hedged Business Segment Year of maturity Notional contractual value Percentage of forecasted net exposures under contracts Average Protection rate Average Obligation rate 2016 CDN/USD Pulp and Paper 137 CDN 71% 1 USD = 1.2584 1 USD = 1.3008 USD/Euro Personal Care 13 USD 64% 1 Euro = 1.1344 1 Euro = 1.1344 Euro/USD Pulp and Paper 9 EUR 75% 1 Euro = 1.1321 1 Euro = 1.1321 2017 CDN/USD Pulp and Paper 468 CDN 60% 1 USD = 1.3045 1 USD = 1.3557 USD/Euro Personal Care 49 USD 66% 1 Euro = 1.1357 1 Euro = 1.1357 Euro/USD Pulp and Paper 19 EUR 50% 1 Euro = 1.1370 1 Euro = 1.1370 2018 CDN/USD Pulp and Paper 142 CDN 18% 1 USD = 1.2890 1 USD = 1.3528 USD/Euro Personal Care 14 USD 18% 1 Euro = 1.1532 1 Euro = 1.1532 |
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, 2016 and December 31, 2015, 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, 2016 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 as hedging instruments: Asset derivatives Currency derivatives 18 — 18 — (a) Prepaid expenses Natural gas swap contracts 3 — 3 — (a) Prepaid expenses Currency derivatives 8 — 8 — (a) Other assets Natural gas swap contracts 2 — 2 — (a) Other assets Total Assets 31 — 31 — Liabilities derivatives Currency derivatives 12 — 12 — (a) Trade and other payables Natural gas swap contracts 4 — 4 — (a) Trade and other payables Currency derivatives 4 — 4 — (a) Other Natural gas swap contracts 5 — 5 — (a) Other liabilities and deferred credits Total Liabilities 25 — 25 — Other Instruments: Long-term debt 1,446 — 1,446 — (c) Long-term debt The cumulative loss recorded in Other comprehensive income (loss) relating to natural gas contracts of $4 million at September 30, 2016, will be recognized in Cost of sales upon maturity of the derivatives over the next 60 months at the then prevailing values, which may be different from those at September 30, 2016. The cumulative gain recorded in Other comprehensive income (loss) relating to currency options and forwards hedging forecasted purchases of $10 million at September 30, 2016, 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, 2016. Fair Value of financial instruments at: December 31, 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 as hedging instruments: Asset derivatives Currency derivatives 6 — 6 — (a) Prepaid expenses Natural gas swap contracts 1 — 1 — (a) Prepaid expenses Currency derivatives 2 — 2 — (a) Other assets Natural gas swap contracts 1 — 1 — (a) Other assets Total Assets 10 — 10 — Liabilities derivatives Currency derivatives 39 — 39 — (a) Trade and other payables Natural gas swap contracts 14 — 14 — (a) Trade and other payables Currency derivatives 10 — 10 — (a) Other liabilities and deferred credits Natural gas swap contracts 4 — 4 — (a) Other liabilities and deferred credits Total Liabilities 67 — 67 — Other Instruments: Asset backed notes ("ABN") 1 — — 1 (b) Other assets Long-term debt 1,261 — 1,261 — (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 3 inputs. 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. The Company’s long-term debt is not carried at fair value on the Consolidated Balance Sheets at September 30, 2016 and December 31, 2015. However, fair value disclosure is required. The carrying value of the Company’s long-term debt is $1,372 million and $1,251 million at September 30, 2016 and December 31, 2015, respectively. |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 2015 2016 2015 Net earnings $ 59 $ 11 $ 81 $ 85 Weighted average number of common shares outstanding (millions) 62.6 62.9 62.6 63.4 Effect of dilutive securities (millions) 0.1 0.1 0.1 0.1 Weighted average number of diluted common shares outstanding (millions) 62.7 63.0 62.7 63.5 Basic net earnings per common share (in dollars) $ 0.94 $ 0.17 $ 1.29 $ 1.34 Diluted $ 0.94 $ 0.17 $ 1.29 $ 1.34 |
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, 2016 2015 2016 2015 Options 412,372 110,219 412,372 137,191 |
Pension Plans and Other Post-31
Pension Plans and Other Post-Retirement Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 September 30, 2016 Pension plans Other post-retirement benefit plans Pension plans Other post-retirement benefit plans $ $ $ $ Service cost 7 1 23 2 Interest expense 12 — 37 2 Expected return on plan assets (19 ) — (58 ) — Amortization of net actuarial loss 1 — 3 — Amortization of prior year service costs 2 — 4 — Net periodic benefit cost 3 1 9 4 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 |
Other Operating Loss (Income)32
Other Operating Loss (Income), Net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Other Income And Expenses [Abstract] | |
Components of Other Operating Loss (Income), Net | The Company’s other operating loss (income), net includes the following: For the three months ended For the nine months ended September 30, September 30, September 30, September 30, 2016 2015 2016 2015 $ $ $ $ Gain on sale of property, plant and equipment (1) — — — (15 ) Bad debt expense — (1 ) — 4 Environmental provision — 4 — 4 Litigation settlement — — 2 — Foreign exchange loss (gain) 1 (3 ) 5 (3 ) Other (1 ) — (3 ) 2 Other operating loss (income), net — — 4 (8 ) (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). |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The following table presents the components of inventories: September 30, December 31, 2016 2015 $ $ Work in process and finished goods 417 432 Raw materials 141 130 Operating and maintenance supplies 212 204 770 766 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 $ Balance at December 31, 2015 539 Effect of foreign currency exchange rate change 9 Balance at end of period 548 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Components of Intangible Assets | The following table presents the components of intangible assets: September 30, December 31, 2016 2015 Estimated useful lives (in years) Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net $ $ $ $ $ $ Definite-lived intangible assets subject to amortization Water rights 40 7 (1 ) 6 7 (1 ) 6 Customer relationships 10 - 40 360 (58 ) 302 354 (46 ) 308 Technology 7 - 20 8 (3 ) 5 8 (2 ) 6 Non-Compete 9 1 — 1 1 — 1 License rights 12 28 (7 ) 21 28 (6 ) 22 404 (69 ) 335 398 (55 ) 343 Indefinite-lived intangible assets not subject to amortization Trade names 221 — 221 215 — 215 License rights 6 — 6 6 — 6 Catalog rights 38 — 38 37 — 37 Total 669 (69 ) 600 656 (55 ) 601 |
Amortization Expense Related to Intangible Assets | Amortization expense for the next five years related to intangible assets is expected to be as follows: 2016 2017 2018 2019 2020 $ $ $ $ $ Amortization expense related to intangible assets 19 19 19 18 18 |
Changes in Accumulated Other 36
Changes in Accumulated Other Comprehensive Loss by Component (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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 gains 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 (8 ) N/A N/A N/A (8 ) Currency options (40 ) N/A N/A N/A (40 ) Foreign exchange forward contracts 7 N/A N/A N/A 7 Net (gain) loss N/A (5 ) 3 N/A (2 ) Foreign currency items N/A N/A N/A (223 ) (223 ) Other comprehensive (loss) income before reclassifications (41 ) (5 ) 3 (223 ) (266 ) Amounts reclassified from Accumulated other comprehensive loss 26 7 — — 33 Net current period other comprehensive (loss) income (15 ) 2 3 (223 ) (233 ) Balance at December 31, 2015 (30 ) (190 ) (10 ) (271 ) (501 ) Natural gas swap contracts — N/A N/A N/A — Net investment hedge (1 ) N/A N/A N/A (1 ) Currency options 12 N/A N/A N/A 12 Foreign exchange forward contracts 12 N/A N/A N/A 12 Foreign currency items N/A N/A N/A 61 61 Other comprehensive income before reclassifications 23 — — 61 84 Amounts reclassified from Accumulated other comprehensive loss 14 5 — — 19 Net current period other comprehensive income 37 5 — 61 103 Balance at September 30, 2016 7 (185 ) (10 ) (210 ) (398 ) (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 table presents 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, 2016 September 30, 2015 Net derivative gains on cash flow hedges Natural gas swap contracts 2 2 (1) Currency options and forwards 1 10 (1) Total before tax 3 12 Tax expense (2 ) (5 ) Net of tax 1 7 Amortization of defined benefit pension items Amortization of net actuarial loss and prior year service cost 2 2 (2) Tax expense — (1 ) Net of tax 2 1 Details about Accumulated other comprehensive loss components Amount reclassified from Accumulated other comprehensive loss For the nine months ended September 30, 2016 September 30, 2015 Net derivative gains on cash flow hedges Natural gas swap contracts 12 11 (1) Currency options and forwards 12 20 (1) Total before tax 24 31 Tax expense (10 ) (13 ) Net of tax 14 18 Amortization of defined benefit pension items Amortization of net actuarial loss and prior year service cost 7 7 (2) Tax expense (2 ) (2 ) Net of tax 5 5 (1) These amounts are included in Cost of Sales in the Consolidated Statements of Earnings and Comprehensive Income (Loss). (2) These amounts are included in the computation of net periodic benefit cost. Refer to Note 5 “Pension plans and other post-retirement benefit plans” for additional details. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 $ Balance at beginning of year 52 Additions 1 Environmental spending (3 ) Effect of foreign currency exchange rate change 2 Balance at end of period 52 |
Segment Disclosures (Tables)
Segment Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Analysis and Reconciliation of Reportable Segment Information | An analysis and reconciliation of the Company’s business segment information to the respective information in the financial statements is as follows: For the three months ended For the nine months ended September 30, September 30, September 30, September 30, SEGMENT DATA 2016 2015 2016 2015 $ $ $ $ Sales Pulp and Paper 1,054 1,092 3,193 3,348 Personal Care 231 214 675 648 Total for reportable segments 1,285 1,306 3,868 3,996 Intersegment sales (15 ) (14 ) (44 ) (46 ) Consolidated sales 1,270 1,292 3,824 3,950 Depreciation and amortization and impairment of property, plant and equipment Pulp and Paper 71 75 216 224 Personal Care 16 14 47 46 Total for reportable segments 87 89 263 270 Impairment of property, plant and equipment - Pulp and Paper 5 20 29 57 Consolidated depreciation and amortization and impairment of property, plant and equipment 92 109 292 327 Operating income (loss) Pulp and Paper 89 54 143 184 Personal Care 15 18 44 45 Corporate (12 ) (11 ) (38 ) (35 ) Consolidated operating income 92 61 149 194 Interest expense, net 17 64 49 115 Earnings (loss) before income taxes 75 (3 ) 100 79 Income tax expense (benefit) 16 (14 ) 19 (6 ) Net earnings 59 11 81 85 |
Supplemental Guarantor Financ39
Supplemental Guarantor Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Condensed Consolidating Statement of Earnings and Comprehensive Income (Loss) | For the three months ended September 30, 2016 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 1,044 516 (290 ) 1,270 Operating expenses Cost of sales, excluding depreciation and amortization — 879 380 (290 ) 969 Depreciation and amortization — 65 22 — 87 Selling, general and administrative 3 28 76 — 107 Impairment of property, plant and equipment — 5 — — 5 Closure and restructuring costs — 10 — — 10 Other operating (income) loss, net — (1 ) 1 — — 3 986 479 (290 ) 1,178 Operating (loss) income (3 ) 58 37 — 92 Interest expense (income), net 16 51 (50 ) — 17 (Loss) earnings before income taxes (19 ) 7 87 — 75 Income tax (benefit) expense (4 ) (3 ) 23 — 16 Share in earnings of equity accounted investees 74 64 — (138 ) — Net earnings 59 74 64 (138 ) 59 Other comprehensive income 3 7 7 (14 ) 3 Comprehensive income 62 81 71 (152 ) 62 For the nine months ended September 30, 2016 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND COMPREHENSIVE INCOME Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Sales — 3,150 1,535 (861 ) 3,824 Operating expenses Cost of sales, excluding depreciation and amortization — 2,725 1,168 (861 ) 3,032 Depreciation and amortization — 193 70 — 263 Selling, general and administrative 13 80 221 — 314 Impairment of property, plant and equipment — 29 — — 29 Closure and restructuring costs — 33 — — 33 Other operating loss (income), net 1 (2 ) 5 — 4 14 3,058 1,464 (861 ) 3,675 Operating (loss) income (14 ) 92 71 — 149 Interest expense (income), net 48 67 (66 ) — 49 (Loss) earnings before income taxes (62 ) 25 137 — 100 Income tax (benefit) expense (14 ) 1 32 — 19 Share in earnings of equity accounted investees 129 105 — (234 ) — Net earnings 81 129 105 (234 ) 81 Other comprehensive income 103 97 63 (160 ) 103 Comprehensive income 184 226 168 (394 ) 184 For the three months ended September 30, 2015 Non- CONDENSED CONSOLIDATING STATEMENT OF EARNINGS Guarantor Guarantor Consolidating AND 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 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 Guarantor Guarantor Consolidating AND 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 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 ) |
Condensed Consolidating Balance Sheet | September 30, 2016 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING BALANCE SHEET Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Assets Current assets Cash and cash equivalents 36 — 132 — 168 Receivables — 265 351 — 616 Inventories — 549 221 — 770 Prepaid expenses 14 22 10 — 46 Income and other taxes receivable 10 13 14 (4 ) 33 Intercompany accounts 346 210 190 (746 ) — Total current assets 406 1,059 918 (750 ) 1,633 Property, plant and equipment, net — 2,042 845 — 2,887 Goodwill — 296 252 — 548 Intangible assets, net — 248 352 — 600 Investments in affiliates 4,050 2,835 — (6,885 ) — Intercompany long-term advances 6 80 1,401 (1,487 ) — Other assets 11 18 133 — 162 Total assets 4,473 6,578 3,901 (9,122 ) 5,830 Liabilities and shareholders' equity Current liabilities Trade and other payables 49 389 207 — 645 Intercompany accounts 135 200 411 (746 ) — Income and other taxes payable — — 29 (4 ) 25 Long-term debt due within one year 63 — — — 63 Total current liabilities 247 589 647 (750 ) 733 Long-term debt 901 300 108 — 1,309 Intercompany long-term loans 553 934 — (1,487 ) — Deferred income taxes and other — 548 144 — 692 Other liabilities and deferred credits 18 157 167 — 342 Shareholders' equity 2,754 4,050 2,835 (6,885 ) 2,754 Total liabilities and shareholders' equity 4,473 6,578 3,901 (9,122 ) 5,830 December 31, 2015 Non- Guarantor Guarantor Consolidating CONDENSED CONSOLIDATING BALANCE SHEET Parent Subsidiaries Subsidiaries Adjustments Consolidated $ $ $ $ $ Assets Current assets Cash and cash equivalents 49 2 75 — 126 Receivables — 384 243 — 627 Inventories — 556 210 — 766 Prepaid expenses 8 7 6 — 21 Income and other taxes receivable — 13 11 (10 ) 14 Intercompany accounts 764 4,776 16 (5,556 ) — Total current assets 821 5,738 561 (5,566 ) 1,554 Property, plant and equipment, net — 2,018 817 — 2,835 Goodwill — 296 243 — 539 Intangible assets, net — 254 347 — 601 Investments in affiliates 8,005 2,050 — (10,055 ) — Intercompany long-term advances 6 88 621 (715 ) — Other assets 15 10 115 (15 ) 125 Total assets 8,847 10,454 2,704 (16,351 ) 5,654 Liabilities and shareholders' equity Current liabilities Trade and other payables 61 456 203 — 720 Intercompany accounts 4,685 722 149 (5,556 ) — Income and other taxes payable 4 24 9 (10 ) 27 Long-term debt due within one year 38 1 2 — 41 Total current liabilities 4,788 1,203 363 (5,566 ) 788 Long-term debt 901 301 8 — 1,210 Intercompany long-term loans 490 225 — (715 ) — Deferred income taxes and other — 535 131 (12 ) 654 Other liabilities and deferred credits 16 185 152 (3 ) 350 Shareholders' equity 2,652 8,005 2,050 (10,055 ) 2,652 Total liabilities and shareholders' equity 8,847 10,454 2,704 (16,351 ) 5,654 |
Condensed Consolidating Statement of Cash Flows | For the nine months ended September 30, 2016 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Adjustments Consolidated $ $ $ $ $ Operating activities Net earnings 81 129 105 (234 ) 81 Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings (4,288 ) 4,168 115 234 229 Cash flows (used for) provided from operating activities (4,207 ) 4,297 220 — 310 Investing activities Additions to property, plant and equipment — (246 ) (56 ) — (302 ) Acquisition of business, net of cash acquired — (1 ) — — (1 ) Other — — 1 — 1 Cash flows used for investing activities — (247 ) (55 ) — (302 ) Financing activities Dividend payments (76 ) — — — (76 ) Stock repurchase (10 ) — — — (10 ) Net change in bank indebtedness — 1 — — 1 Change in revolving bank credit facility 60 — — — 60 Proceeds from receivables securitization facility — — 140 — 140 Repayments of receivables securitization facility — — (40 ) — (40 ) Repayments of long-term debt (38 ) (1 ) (1 ) — (40 ) Increase in long-term advances to related parties — (4,052 ) (209 ) 4,261 — Decrease in long-term advances to related parties 4,261 — — (4,261 ) — Other (3 ) — — — (3 ) Cash flows provided from (used for) financing activities 4,194 (4,052 ) (110 ) — 32 Net (decrease) increase in cash and cash equivalents (13 ) (2 ) 55 — 40 Impact of foreign exchange on cash — — 2 — 2 Cash and cash equivalents at beginning of period 49 2 75 — 126 Cash and cash equivalents at end of period 36 — 132 — 168 For the nine months ended September 30, 2015 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating 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 Repayments 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 |
Recent Accounting Pronounceme40
Recent Accounting Pronouncements - Additional Information (Detail) - Accounting Standards Update 2015-03 [Member] $ in Millions | Dec. 31, 2015USD ($) |
Change In Accounting Estimate [Line Items] | |
Other assets | $ (9) |
Long-term debt | $ (9) |
Derivatives and Hedging Activ41
Derivatives and Hedging Activities and Fair Value Measurement - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016USD ($)Customer | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)Customer | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Derivative [Line Items] | |||||
Number of major customers | Customer | 1 | 1 | |||
Receivables from major customers | $ 77,000,000 | $ 77,000,000 | $ 78,000,000 | ||
Maximum [Member] | Canadian Subsidiary [Member] | Canadian Dollars [Member] | |||||
Derivative [Line Items] | |||||
Length of time current hedges cover | 24 months | ||||
Maximum [Member] | U S Subsidiaries [Member] | Euros [Member] | |||||
Derivative [Line Items] | |||||
Length of time current hedges cover | 12 months | ||||
Maximum [Member] | U S Subsidiaries [Member] | British Pounds [Member] | |||||
Derivative [Line Items] | |||||
Length of time current hedges cover | 12 months | ||||
Maximum [Member] | European Subsidiaries [Member] | Swedish Krona [Member] | |||||
Derivative [Line Items] | |||||
Length of time current hedges cover | 24 months | ||||
Forecasted Natural Gas and Oil Purchases [Member] | Maximum [Member] | |||||
Derivative [Line Items] | |||||
Length of time current hedges cover | 60 months | ||||
Natural Gas Swap Contracts [Member] | |||||
Derivative [Line Items] | |||||
Earnings hedge ineffectiveness | 0 | $ 0 | $ 0 | $ 0 | |
(Loss) gain recognized in Other comprehensive income (loss) on derivatives (effective portion) | $ 4,000,000 | ||||
Recognition of OCI in Cost of sales | 60 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) gain recognized in Other comprehensive income (loss) on derivatives (effective portion) | $ 10,000,000 | ||||
Recognition of OCI in Cost of sales | 24 months | ||||
Accounts Receivable [Member] | Credit Concentration Risk [Member] | |||||
Derivative [Line Items] | |||||
Maximum percentage of receivables a single customer represents | 12.00% | 12.00% |
Derivatives and Hedging Activ42
Derivatives and Hedging Activities and Fair Value Measurement - Derivative Financial Instruments for Natural Gas Contracts Outstanding (Detail) | Sep. 30, 2016USD ($)MMBTU |
2016 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | MMBTU | 4,620,000 |
Notional contractual value under derivative contracts | $ | $ 14,000,000 |
Percentage of forecasted purchases under derivative contracts | 80.00% |
2017 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | MMBTU | 8,980,000 |
Notional contractual value under derivative contracts | $ | $ 28,000,000 |
Percentage of forecasted purchases under derivative contracts | 34.00% |
2018 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | MMBTU | 5,085,000 |
Notional contractual value under derivative contracts | $ | $ 15,000,000 |
Percentage of forecasted purchases under derivative contracts | 19.00% |
2019 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | MMBTU | 6,560,000 |
Notional contractual value under derivative contracts | $ | $ 20,000,000 |
Percentage of forecasted purchases under derivative contracts | 25.00% |
2020 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | MMBTU | 5,750,000 |
Notional contractual value under derivative contracts | $ | $ 18,000,000 |
Percentage of forecasted purchases under derivative contracts | 22.00% |
2021 [Member] | |
Derivative [Line Items] | |
Notional contractual quantity under derivative contracts | MMBTU | 2,930,000 |
Notional contractual value under derivative contracts | $ | $ 10,000,000 |
Percentage of forecasted purchases under derivative contracts | 15.00% |
Derivatives and Hedging Activ43
Derivatives and Hedging Activities and Fair Value Measurement - Currency Values under Significant Currency Positions Pursuant to Currency Derivatives Outstanding (Detail) - Long [Member] | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2016CAD | Sep. 30, 2016EUR (€) | |
Pulp and Paper [Member] | CDN/USD Denominated Notional Contractual Value For 2016 [Member] | |||
Derivative [Line Items] | |||
Notional contractual value | CAD | CAD 137,000,000 | ||
Percentage of forecasted net exposures under contracts | 71.00% | ||
Currency exposure hedged, Average Protection rate | 1.2584 | 1.2584 | 1.2584 |
Currency exposure hedged, Average Obligation rate | 1.3008 | 1.3008 | 1.3008 |
Pulp and Paper [Member] | Euro/USD Denominated Notional Contractual Value For 2016 [Member] | |||
Derivative [Line Items] | |||
Notional contractual value | € | € 9,000,000 | ||
Percentage of forecasted net exposures under contracts | 75.00% | ||
Currency exposure hedged, Average Protection rate | 1.1321 | 1.1321 | 1.1321 |
Currency exposure hedged, Average Obligation rate | 1.1321 | 1.1321 | 1.1321 |
Pulp and Paper [Member] | CDN/USD Denominated Notional Contractual Value For 2017 [Member] | |||
Derivative [Line Items] | |||
Notional contractual value | CAD | CAD 468,000,000 | ||
Percentage of forecasted net exposures under contracts | 60.00% | ||
Currency exposure hedged, Average Protection rate | 1.3045 | 1.3045 | 1.3045 |
Currency exposure hedged, Average Obligation rate | 1.3557 | 1.3557 | 1.3557 |
Pulp and Paper [Member] | Euro/USD Denominated Notional Contractual Value For 2017 [Member] | |||
Derivative [Line Items] | |||
Notional contractual value | € | € 19,000,000 | ||
Percentage of forecasted net exposures under contracts | 50.00% | ||
Currency exposure hedged, Average Protection rate | 1.1370 | 1.1370 | 1.1370 |
Currency exposure hedged, Average Obligation rate | 1.1370 | 1.1370 | 1.1370 |
Pulp and Paper [Member] | CDN/USD Denominated Notional Contractual Value For 2018 [Member] | |||
Derivative [Line Items] | |||
Notional contractual value | CAD | CAD 142,000,000 | ||
Percentage of forecasted net exposures under contracts | 18.00% | ||
Currency exposure hedged, Average Protection rate | 1.2890 | 1.2890 | 1.2890 |
Currency exposure hedged, Average Obligation rate | 1.3528 | 1.3528 | 1.3528 |
Personal Care [Member] | USD/Euro Denominated Notional Contractual Value For 2016 [Member] | |||
Derivative [Line Items] | |||
Notional contractual value | $ | $ 13,000,000 | ||
Percentage of forecasted net exposures under contracts | 64.00% | ||
Currency exposure hedged, Average Protection rate | 1.1344 | 1.1344 | 1.1344 |
Currency exposure hedged, Average Obligation rate | 1.1344 | 1.1344 | 1.1344 |
Personal Care [Member] | USD/Euro Denominated Notional Contractual Value For 2017 [Member] | |||
Derivative [Line Items] | |||
Notional contractual value | $ | $ 49,000,000 | ||
Percentage of forecasted net exposures under contracts | 66.00% | ||
Currency exposure hedged, Average Protection rate | 1.1357 | 1.1357 | 1.1357 |
Currency exposure hedged, Average Obligation rate | 1.1357 | 1.1357 | 1.1357 |
Personal Care [Member] | CDN/USD Denominated Notional Contractual Value For 2018 [Member] | |||
Derivative [Line Items] | |||
Notional contractual value | $ | $ 14,000,000 | ||
Percentage of forecasted net exposures under contracts | 18.00% | ||
Currency exposure hedged, Average Protection rate | 1.1532 | 1.1532 | 1.1532 |
Currency exposure hedged, Average Obligation rate | 1.1532 | 1.1532 | 1.1532 |
Derivatives and Hedging Activ44
Derivatives and Hedging Activities and Fair Value Measurement - Fair Value of Financial Instruments (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Derivative [Line Items] | ||
Total Assets | $ 31 | $ 10 |
Total Liabilities | 25 | 67 |
Long-term debt | 1,446 | 1,261 |
Other Assets [Member] | ||
Derivative [Line Items] | ||
Asset backed notes ("ABN") | 1 | |
Currency Derivatives [Member] | Prepaid Expenses [Member] | ||
Derivative [Line Items] | ||
Total Assets | 18 | 6 |
Currency Derivatives [Member] | Other Assets [Member] | ||
Derivative [Line Items] | ||
Total Assets | 8 | 2 |
Currency Derivatives [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 12 | 39 |
Currency Derivatives [Member] | Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 4 | 10 |
Natural Gas Swap Contracts [Member] | Prepaid Expenses [Member] | ||
Derivative [Line Items] | ||
Total Assets | 3 | 1 |
Natural Gas Swap Contracts [Member] | Other Assets [Member] | ||
Derivative [Line Items] | ||
Total Assets | 2 | 1 |
Natural Gas Swap Contracts [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 4 | 14 |
Natural Gas Swap Contracts [Member] | Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 5 | 4 |
Significant Observable Inputs (Level 2) [Member] | ||
Derivative [Line Items] | ||
Total Assets | 31 | 10 |
Total Liabilities | 25 | 67 |
Long-term debt | 1,446 | 1,261 |
Significant Observable Inputs (Level 2) [Member] | Currency Derivatives [Member] | Prepaid Expenses [Member] | ||
Derivative [Line Items] | ||
Total Assets | 18 | 6 |
Significant Observable Inputs (Level 2) [Member] | Currency Derivatives [Member] | Other Assets [Member] | ||
Derivative [Line Items] | ||
Total Assets | 8 | 2 |
Significant Observable Inputs (Level 2) [Member] | Currency Derivatives [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 12 | 39 |
Significant Observable Inputs (Level 2) [Member] | Currency Derivatives [Member] | Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 4 | 10 |
Significant Observable Inputs (Level 2) [Member] | Natural Gas Swap Contracts [Member] | Prepaid Expenses [Member] | ||
Derivative [Line Items] | ||
Total Assets | 3 | 1 |
Significant Observable Inputs (Level 2) [Member] | Natural Gas Swap Contracts [Member] | Other Assets [Member] | ||
Derivative [Line Items] | ||
Total Assets | 2 | 1 |
Significant Observable Inputs (Level 2) [Member] | Natural Gas Swap Contracts [Member] | Trade and Other Payables [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | 4 | 14 |
Significant Observable Inputs (Level 2) [Member] | Natural Gas Swap Contracts [Member] | Other Liabilities and Deferred Credits [Member] | ||
Derivative [Line Items] | ||
Total Liabilities | $ 5 | 4 |
Significant Unobservable Inputs (Level 3) [Member] | Other Assets [Member] | ||
Derivative [Line Items] | ||
Asset backed notes ("ABN") | $ 1 |
Derivatives and Hedging Activ45
Derivatives and Hedging Activities and Fair Value Measurement - Fair Value of Financial Instruments (Parenthetical) (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ||
The carrying value of the Company's long-term debt | $ 1,372 | $ 1,251 |
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, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Net earnings | $ 59 | $ 11 | $ 81 | $ 85 |
Weighted average number of common shares outstanding (millions) | 62.6 | 62.9 | 62.6 | 63.4 |
Effect of dilutive securities (millions) | 0.1 | 0.1 | 0.1 | 0.1 |
Weighted average number of diluted common shares outstanding (millions) | 62.7 | 63 | 62.7 | 63.5 |
Basic net earnings per common share (in dollars) | $ 0.94 | $ 0.17 | $ 1.29 | $ 1.34 |
Diluted net earnings per common share (in dollars) | $ 0.94 | $ 0.17 | $ 1.29 | $ 1.34 |
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, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
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 | 412,372 | 110,219 | 412,372 | 137,191 |
Pension Plans and Other Post-48
Pension Plans and Other Post-Retirement Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||
Pension expense | $ 11 | $ 9 | $ 29 | $ 24 |
Pension Plans [Member] | ||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||
Plan contributions | 18 | 5 | 27 | 11 |
Other Post-Retirement Benefit Plans [Member] | ||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||
Plan contributions | $ 1 | $ 1 | $ 3 | $ 4 |
Pension Plans and Other Post-49
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, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Pension Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 7 | $ 9 | $ 23 | $ 27 |
Interest expense | 12 | 16 | 37 | 49 |
Expected return on plan assets | (19) | (23) | (58) | (70) |
Amortization of net actuarial loss | 1 | 1 | 3 | 5 |
Amortization of prior year service costs | 2 | 1 | 4 | 2 |
Net periodic benefit cost | 3 | 4 | 9 | 13 |
Other Post-Retirement Benefit Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1 | 2 | 2 | |
Interest expense | 1 | 2 | 3 | |
Net periodic benefit cost | $ 1 | $ 1 | $ 4 | $ 5 |
Other Operating Loss (Income)50
Other Operating Loss (Income), Net - Components of Other Operating Loss (Income), Net (Detail) CAD in Millions, $ in Millions | Jul. 03, 2015USD ($) | Jul. 03, 2015CAD | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | |
Other Income And Expenses [Abstract] | |||||||
Net gains on disposals of property, plant and equipment | $ (10) | CAD (12) | $ (15) | [1] | |||
Bad debt expense | $ (1) | 4 | |||||
Environmental provision | 4 | 4 | |||||
Litigation settlement | $ 2 | ||||||
Foreign exchange loss (gain) | $ 1 | $ (3) | 5 | (3) | |||
Other | $ (1) | (3) | 2 | ||||
Other operating loss (income), net | $ 4 | $ (8) | |||||
[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). |
Other Operating Loss (Income)51
Other Operating Loss (Income), Net - Components of Other Operating Loss (Income), Net (Parenthetical) (Detail) CAD in Millions, $ in Millions | Jul. 03, 2015USD ($) | Jul. 03, 2015CAD | Sep. 30, 2015USD ($) | |
Other Income And Expenses [Abstract] | ||||
Proceeds from disposals of property, plant and equipment | $ 26 | CAD 32 | $ 35 | |
Net gain on sale 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 $12 million). |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 16 | $ (14) | $ 19 | $ (6) |
Current income tax expense (benefit) | 5 | 4 | 13 | 44 |
Deferred income tax expense (benefit) | $ 11 | $ (18) | $ 6 | $ (50) |
Effective income tax rate | 21.00% | 467.00% | 19.00% | (8.00%) |
Inventories - Components of Inv
Inventories - Components of Inventories (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Work in process and finished goods | $ 417 | $ 432 |
Raw materials | 141 | 130 |
Operating and maintenance supplies | 212 | 204 |
Total inventories | $ 770 | $ 766 |
Goodwill - Changes in Carrying
Goodwill - Changes in Carrying Value of Goodwill (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Goodwill Roll Forward | |
Balance at beginning of period | $ 539 |
Effect of foreign currency exchange rate change | 9 |
Balance at end of period | $ 548 |
Intangible Assets - Components
Intangible Assets - Components of Intangible Assets (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Intangible Assets Excluding Goodwill [Line Items] | ||
Definite-lived intangible assets subject to amortization, gross carrying amount | $ 404 | $ 398 |
Accumulated amortization | (69) | (55) |
Intangible assets, net | 335 | 343 |
Total, Gross carrying amount | 669 | 656 |
Intangible assets, net of amortization | 600 | 601 |
Trade Names [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Indefinite-lived intangible assets not subject to amortization | 221 | 215 |
License Rights [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Indefinite-lived intangible assets not subject to amortization | 6 | 6 |
Catalog Rights [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Indefinite-lived intangible assets not subject to amortization | $ 38 | 37 |
Water Rights [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Estimated useful lives (in years) | 40 years | |
Definite-lived intangible assets subject to amortization, gross carrying amount | $ 7 | 7 |
Accumulated amortization | (1) | (1) |
Intangible assets, net | 6 | 6 |
Customer Relationships [Member] | ||
Intangible Assets Excluding Goodwill [Line Items] | ||
Definite-lived intangible assets subject to amortization, gross carrying amount | 360 | 354 |
Accumulated amortization | (58) | (46) |
Intangible assets, net | $ 302 | 308 |
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] | ||
Definite-lived intangible assets subject to amortization, gross carrying amount | $ 8 | 8 |
Accumulated amortization | (3) | (2) |
Intangible assets, net | $ 5 | 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 | |
Definite-lived 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 | |
Definite-lived intangible assets subject to amortization, gross carrying amount | $ 28 | 28 |
Accumulated amortization | (7) | (6) |
Intangible assets, net | $ 21 | $ 22 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 5 | $ 5 | $ 14 | $ 14 |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Expense Related to Intangible Assets (Detail) $ in Millions | Sep. 30, 2016USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
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 |
Amortization expense related to intangible assets, 2020 | $ 18 |
Closure and Restructuring Cos58
Closure and Restructuring Costs and Liability and Impairment and Write-Down of Property, Plant and Equipment - Additional Information (Detail) $ in Millions | Sep. 23, 2016t | Mar. 31, 2016t | Dec. 10, 2014t | Sep. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) |
Restructuring Cost And Reserve [Line Items] | ||||||||
Severance and termination costs | $ 10 | $ 1 | $ 33 | $ 3 | ||||
Provision for closure and restructuring costs | 8 | 8 | ||||||
Previous and Ongoing Closures [Member] | Pulp and Paper [Member] | ||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||
Severance and termination costs | 0 | 1 | ||||||
Previous and Ongoing Closures [Member] | Personal Care [Member] | ||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||
Severance and termination costs | 0 | 1 | ||||||
Plymouth, North Carolina Mill [Member] | ||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||
Production capacity of pulp machine | t | 380,000 | |||||||
Severance and termination costs | 5 | |||||||
Ashdown, Arkansas Mill [Member] | ||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||
Severance and termination costs | $ 1 | 1 | 2 | |||||
Permanent reduction of annual uncoated freesheet production capacity | t | 364,000 | |||||||
Accelerated depreciation | 5 | $ 20 | 29 | $ 57 | ||||
Other costs | $ 5 | $ 26 | ||||||
Ashdown, Arkansas Mill [Member] | Maximum [Member] | ||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||
Production capacity of pulp machine | t | 516,000 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) | 9 Months Ended | |||
Sep. 30, 2016 | Aug. 18, 2016 | Aug. 01, 2016 | Oct. 03, 2014 | |
9.5% Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument maturity date | Aug. 1, 2016 | |||
Debt instrument interest rate stated percentage | 9.50% | |||
Debt instrument principal amount | $ 39,000,000 | |||
2016 Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument maturity date | Aug. 18, 2021 | |||
Maximum aggregate amount | $ 700,000,000 | |||
Existing Credit Agreement | $ 600,000,000 | |||
Increase in maximum aggregate amount of availability from Existing Credit Agreement | $ 100,000,000 | |||
2016 Credit Agreement [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest coverage level | 3.00% | |||
2016 Credit Agreement [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Leverage level | 3.75% | |||
Leverage ratio upon certain material acquisition | 4.00% |
Changes in Accumulated Other 60
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 | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning balance | $ (501) | $ (268) | $ (268) | ||
Other comprehensive (loss) income before reclassifications | 84 | (266) | |||
Amounts reclassified from Accumulated other comprehensive loss | 19 | 33 | |||
Other comprehensive income (loss) | $ 3 | $ (69) | 103 | (194) | (233) |
Ending balance | (398) | (398) | (501) | ||
Net Investment Hedging [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (1) | ||||
Net (Gain) Loss [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (2) | ||||
Natural Gas Swap Contracts [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (8) | ||||
Currency Options [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | 12 | (40) | |||
Foreign Exchange Forward Contracts [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | 12 | 7 | |||
Foreign Currency Items [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | 61 | (223) | |||
Net Derivative (Losses) Gains on Cash Flow Hedges [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning balance | (30) | (15) | (15) | ||
Other comprehensive (loss) income before reclassifications | 23 | (41) | |||
Amounts reclassified from Accumulated other comprehensive loss | 14 | 26 | |||
Other comprehensive income (loss) | 37 | (15) | |||
Ending balance | 7 | 7 | (30) | ||
Net Derivative (Losses) Gains on Cash Flow Hedges [Member] | Net Investment Hedging [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (1) | ||||
Net Derivative (Losses) Gains on Cash Flow Hedges [Member] | Natural Gas Swap Contracts [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (8) | ||||
Net Derivative (Losses) Gains on Cash Flow Hedges [Member] | Currency Options [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | 12 | (40) | |||
Net Derivative (Losses) Gains on Cash Flow Hedges [Member] | Foreign Exchange Forward Contracts [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | 12 | 7 | |||
Accumulated Defined Benefit Plans Adjustment [Member] | Pension Plans [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning balance | (190) | (192) | (192) | ||
Other comprehensive (loss) income before reclassifications | (5) | ||||
Amounts reclassified from Accumulated other comprehensive loss | 5 | 7 | |||
Other comprehensive income (loss) | 5 | 2 | |||
Ending balance | (185) | (185) | (190) | ||
Accumulated Defined Benefit Plans Adjustment [Member] | Pension Plans [Member] | Net (Gain) Loss [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | (5) | ||||
Accumulated Defined Benefit Plans Adjustment [Member] | Other Post-Retirement Benefit Plans [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning balance | (10) | (13) | (13) | ||
Other comprehensive (loss) income before reclassifications | 3 | ||||
Other comprehensive income (loss) | 3 | ||||
Ending balance | (10) | (10) | (10) | ||
Accumulated Defined Benefit Plans Adjustment [Member] | Other Post-Retirement Benefit Plans [Member] | Net (Gain) Loss [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | 3 | ||||
Foreign Currency Items [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning balance | (271) | $ (48) | (48) | ||
Other comprehensive (loss) income before reclassifications | 61 | (223) | |||
Other comprehensive income (loss) | 61 | (223) | |||
Ending balance | $ (210) | (210) | (271) | ||
Foreign Currency Items [Member] | Foreign Currency Items [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Other comprehensive (loss) income before reclassifications | $ 61 | $ (223) |
Changes in Accumulated Other 61
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, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Earnings before income taxes and equity loss | $ 75 | $ (3) | $ 100 | $ 79 |
Tax expense | (16) | 14 | (19) | 6 |
Reclassification Out of Accumulated Other Comprehensive Loss [Member] | Net Derivative (Losses) Gains on Cash Flow Hedges [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Earnings before income taxes and equity loss | 3 | 12 | 24 | 31 |
Tax expense | (2) | (5) | (10) | (13) |
Net of tax | 1 | 7 | 14 | 18 |
Reclassification Out of Accumulated Other Comprehensive Loss [Member] | Net Derivative (Losses) Gains on Cash Flow Hedges [Member] | Natural Gas Swap Contracts [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of Sales | 2 | 2 | 12 | 11 |
Reclassification Out of Accumulated Other Comprehensive Loss [Member] | Net Derivative (Losses) Gains on Cash Flow Hedges [Member] | Currency Options and Forwards [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of Sales | 1 | 10 | 12 | 20 |
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 | 2 | 7 | 7 |
Tax expense | (1) | (2) | (2) | |
Net of tax | $ 2 | $ 1 | $ 5 | $ 5 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) | Nov. 01, 2016 | Oct. 17, 2016 | Aug. 02, 2016 | Jul. 15, 2016 | May 03, 2016 | Apr. 15, 2016 | Feb. 22, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2015 |
Shareholders' Equity [Line Items] | |||||||||||
Dividend per share | $ 0.415 | $ 0.415 | $ 0.40 | ||||||||
Record date | Oct. 3, 2016 | Jul. 5, 2016 | Apr. 4, 2016 | ||||||||
Declared date | Aug. 2, 2016 | May 3, 2016 | Feb. 22, 2016 | ||||||||
Dividends paid | $ 26,000,000 | $ 25,000,000 | |||||||||
Payment date | Oct. 17, 2016 | Jul. 15, 2016 | Apr. 15, 2016 | ||||||||
Stock repurchased, shares | 304,915 | 1,210,932 | 24,853,827 | ||||||||
Stock repurchased, average price | $ 32.21 | $ 41.40 | $ 39.33 | ||||||||
Stock repurchased, value | $ 10,000,000 | $ 50,000,000 | $ 977,000,000 | ||||||||
Treasury stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Maximum [Member] | |||||||||||
Shareholders' Equity [Line Items] | |||||||||||
Stock repurchase program authorized amount | $ 1,300,000,000 | $ 1,300,000,000 | |||||||||
Subsequent Event [Member] | |||||||||||
Shareholders' Equity [Line Items] | |||||||||||
Dividend per share | $ 0.415 | ||||||||||
Record date | Jan. 3, 2017 | ||||||||||
Declared date | Nov. 1, 2016 | ||||||||||
Dividends paid | $ 26,000,000 | ||||||||||
Payment date | Jan. 17, 2017 |
Commitments and Contingencies -
Commitments and Contingencies - Changes in Reserve for Environmental Remediation and Asset Retirement Obligations (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |
Balance at beginning of year | $ 52 |
Additions | 1 |
Environmental spending | (3) |
Effect of foreign currency exchange rate change | 2 |
Balance at end of period | $ 52 |
Commitments and Contingencies64
Commitments and Contingencies - Additional Information (Detail) € in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Jan. 31, 2014Affiliate | Sep. 30, 2016USD ($) | Sep. 30, 2016EUR (€) | Jun. 30, 2016USD ($) | Jun. 30, 2016EUR (€) | Dec. 31, 2015USD ($) | Dec. 31, 2015EUR (€) | Sep. 30, 2016USD ($) | Sep. 30, 2016EUR (€) | May 26, 2016USD ($) | May 26, 2016EUR (€) | |
Commitments And Contingencies [Line Items] | |||||||||||
Number of affiliated companies acquired | Affiliate | 2 | ||||||||||
Retained Purchase Price | $ 3,300,000 | $ 3,300,000 | € 3 | ||||||||
Bank guarantees | 9,900,000 | 9,900,000 | € 9 | ||||||||
Recoveries from retained purchase price and bank guarantees | $ 13,200,000 | € 12 | |||||||||
Remaining recoveries from retained purchase price and bank guarantees | $ 1,700,000 | € 1.5 | |||||||||
Indas and Affiliates [Member] | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Penalties for violations of competition laws | $ 14,900,000 | € 13.5 | |||||||||
Spanish Competition Investigation [Member] | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Provision for liability | $ 14,700,000 | € 13.3 | $ 200,000 | € 0.2 | |||||||
Indemnification Guarantee [Member] | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Provision for liability | $ | $ 0 |
Segment Disclosures - Additiona
Segment Disclosures - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2016Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Number of operating segments | 2 |
Segment Disclosures - Analysis
Segment Disclosures - Analysis and Reconciliation of Reportable Segment Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 1,270 | $ 1,292 | $ 3,824 | $ 3,950 |
Depreciation and amortization and impairment and write-down of property, plant and equipment and intangible assets | 87 | 89 | 263 | 270 |
Impairment of property, plant and equipment | 5 | 20 | 29 | 57 |
Consolidated depreciation and amortization and impairment of property, plant and equipment | 92 | 109 | 292 | 327 |
Consolidated operating income (loss) | 92 | 61 | 149 | 194 |
Interest expense, net | 17 | 64 | 49 | 115 |
Earnings (loss) before income taxes | 75 | (3) | 100 | 79 |
Income tax expense (benefit) | 16 | (14) | 19 | (6) |
Net earnings | 59 | 11 | 81 | 85 |
Pulp and Paper [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization and impairment and write-down of property, plant and equipment and intangible assets | 71 | 75 | 216 | 224 |
Impairment of property, plant and equipment | 5 | 20 | 29 | 57 |
Personal Care [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization and impairment and write-down of property, plant and equipment and intangible assets | 16 | 14 | 47 | 46 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,285 | 1,306 | 3,868 | 3,996 |
Operating Segments [Member] | Pulp and Paper [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,054 | 1,092 | 3,193 | 3,348 |
Consolidated operating income (loss) | 89 | 54 | 143 | 184 |
Operating Segments [Member] | Personal Care [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 231 | 214 | 675 | 648 |
Consolidated operating income (loss) | 15 | 18 | 44 | 45 |
Intersegment Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | (15) | (14) | (44) | (46) |
Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated operating income (loss) | $ (12) | $ (11) | $ (38) | $ (35) |
Supplemental Guarantor Financ67
Supplemental Guarantor Financial Information - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2016 | |
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 Financ68
Supplemental Guarantor Financial Information - Condensed Consolidating Statement of Earnings and Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Condensed Income Statements Captions [Line Items] | |||||
Sales | $ 1,270 | $ 1,292 | $ 3,824 | $ 3,950 | |
Operating expenses | |||||
Cost of sales, excluding depreciation and amortization | 969 | 1,026 | 3,032 | 3,140 | |
Depreciation and amortization | 87 | 89 | 263 | 270 | |
Selling, general and administrative | 107 | 95 | 314 | 294 | |
Impairment of property, plant and equipment | 5 | 20 | 29 | 57 | |
Closure and restructuring costs | 10 | 1 | 33 | 3 | |
Other operating (income) loss, net | 4 | (8) | |||
Operating expenses | 1,178 | 1,231 | 3,675 | 3,756 | |
Operating income | 92 | 61 | 149 | 194 | |
Interest expense, net | 17 | 64 | 49 | 115 | |
(Loss) earnings before income taxes | 75 | (3) | 100 | 79 | |
Income tax (benefit) expense | 16 | (14) | 19 | (6) | |
Net earnings | 59 | 11 | 81 | 85 | |
Other comprehensive income (loss) | 3 | (69) | 103 | (194) | $ (233) |
Comprehensive income (loss) | 62 | (58) | 184 | (109) | |
Consolidating Adjustments [Member] | |||||
Condensed Income Statements Captions [Line Items] | |||||
Sales | (290) | (307) | (861) | (899) | |
Operating expenses | |||||
Cost of sales, excluding depreciation and amortization | (290) | (307) | (861) | (899) | |
Operating expenses | (290) | (307) | (861) | (899) | |
Share in earnings of equity accounted investees | (138) | (118) | (234) | (307) | |
Net earnings | (138) | (118) | (234) | (307) | |
Other comprehensive income (loss) | (14) | 124 | (160) | 373 | |
Comprehensive income (loss) | (152) | 6 | (394) | 66 | |
Parent [Member] | |||||
Operating expenses | |||||
Selling, general and administrative | 3 | 2 | 13 | 10 | |
Other operating (income) loss, net | 3 | 1 | 4 | ||
Operating expenses | 3 | 5 | 14 | 14 | |
Operating income | (3) | (5) | (14) | (14) | |
Interest expense, net | 16 | 64 | 48 | 115 | |
(Loss) earnings before income taxes | (19) | (69) | (62) | (129) | |
Income tax (benefit) expense | (4) | (14) | (14) | (30) | |
Share in earnings of equity accounted investees | 74 | 66 | 129 | 184 | |
Net earnings | 59 | 11 | 81 | 85 | |
Other comprehensive income (loss) | 3 | (69) | 103 | (194) | |
Comprehensive income (loss) | 62 | (58) | 184 | (109) | |
Guarantor Subsidiaries [Member] | |||||
Condensed Income Statements Captions [Line Items] | |||||
Sales | 1,044 | 1,071 | 3,150 | 3,266 | |
Operating expenses | |||||
Cost of sales, excluding depreciation and amortization | 879 | 975 | 2,725 | 2,867 | |
Depreciation and amortization | 65 | 62 | 193 | 191 | |
Selling, general and administrative | 28 | 36 | 80 | 108 | |
Impairment of property, plant and equipment | 5 | 20 | 29 | 57 | |
Closure and restructuring costs | 10 | 1 | 33 | 2 | |
Other operating (income) loss, net | (1) | 1 | (2) | ||
Operating expenses | 986 | 1,095 | 3,058 | 3,225 | |
Operating income | 58 | (24) | 92 | 41 | |
Interest expense, net | 51 | 7 | 67 | 21 | |
(Loss) earnings before income taxes | 7 | (31) | 25 | 20 | |
Income tax (benefit) expense | (3) | (45) | 1 | (41) | |
Share in earnings of equity accounted investees | 64 | 52 | 105 | 123 | |
Net earnings | 74 | 66 | 129 | 184 | |
Other comprehensive income (loss) | 7 | (67) | 97 | (194) | |
Comprehensive income (loss) | 81 | (1) | 226 | (10) | |
Non-Guarantor Subsidiaries [Member] | |||||
Condensed Income Statements Captions [Line Items] | |||||
Sales | 516 | 528 | 1,535 | 1,583 | |
Operating expenses | |||||
Cost of sales, excluding depreciation and amortization | 380 | 358 | 1,168 | 1,172 | |
Depreciation and amortization | 22 | 27 | 70 | 79 | |
Selling, general and administrative | 76 | 57 | 221 | 176 | |
Closure and restructuring costs | 1 | ||||
Other operating (income) loss, net | 1 | (4) | 5 | (12) | |
Operating expenses | 479 | 438 | 1,464 | 1,416 | |
Operating income | 37 | 90 | 71 | 167 | |
Interest expense, net | (50) | (7) | (66) | (21) | |
(Loss) earnings before income taxes | 87 | 97 | 137 | 188 | |
Income tax (benefit) expense | 23 | 45 | 32 | 65 | |
Net earnings | 64 | 52 | 105 | 123 | |
Other comprehensive income (loss) | 7 | (57) | 63 | (179) | |
Comprehensive income (loss) | $ 71 | $ (5) | $ 168 | $ (56) |
Supplemental Guarantor Financ69
Supplemental Guarantor Financial Information - Condensed Consolidating Balance Sheet (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets | ||||
Cash and cash equivalents | $ 168 | $ 126 | $ 128 | $ 174 |
Receivables | 616 | 627 | ||
Inventories | 770 | 766 | ||
Prepaid expenses | 46 | 21 | ||
Income and other taxes receivable | 33 | 14 | ||
Total current assets | 1,633 | 1,554 | ||
Property, plant and equipment, net | 2,887 | 2,835 | ||
Goodwill | 548 | 539 | ||
Intangible assets, net | 600 | 601 | ||
Other assets | 162 | 125 | ||
Total assets | 5,830 | 5,654 | ||
Current liabilities | ||||
Trade and other payables | 645 | 720 | ||
Income and other taxes payable | 25 | 27 | ||
Long-term debt due within one year | 63 | 41 | ||
Total current liabilities | 733 | 788 | ||
Long-term debt | 1,309 | 1,210 | ||
Deferred income taxes and other | 692 | 654 | ||
Other liabilities and deferred credits | 342 | 350 | ||
Shareholders' equity | 2,754 | 2,652 | ||
Total liabilities and shareholders' equity | 5,830 | 5,654 | ||
Consolidating Adjustments [Member] | ||||
Current assets | ||||
Income and other taxes receivable | (4) | (10) | ||
Intercompany accounts | (746) | (5,556) | ||
Total current assets | (750) | (5,566) | ||
Investments in affiliates | (6,885) | (10,055) | ||
Intercompany long-term advances | (1,487) | (715) | ||
Other assets | (15) | |||
Total assets | (9,122) | (16,351) | ||
Current liabilities | ||||
Intercompany accounts | (746) | (5,556) | ||
Income and other taxes payable | (4) | (10) | ||
Total current liabilities | (750) | (5,566) | ||
Intercompany long-term loans | (1,487) | (715) | ||
Deferred income taxes and other | (12) | |||
Other liabilities and deferred credits | (3) | |||
Shareholders' equity | (6,885) | (10,055) | ||
Total liabilities and shareholders' equity | (9,122) | (16,351) | ||
Parent [Member] | ||||
Current assets | ||||
Cash and cash equivalents | 36 | 49 | 26 | 79 |
Prepaid expenses | 14 | 8 | ||
Income and other taxes receivable | 10 | |||
Intercompany accounts | 346 | 764 | ||
Total current assets | 406 | 821 | ||
Investments in affiliates | 4,050 | 8,005 | ||
Intercompany long-term advances | 6 | 6 | ||
Other assets | 11 | 15 | ||
Total assets | 4,473 | 8,847 | ||
Current liabilities | ||||
Trade and other payables | 49 | 61 | ||
Intercompany accounts | 135 | 4,685 | ||
Income and other taxes payable | 4 | |||
Long-term debt due within one year | 63 | 38 | ||
Total current liabilities | 247 | 4,788 | ||
Long-term debt | 901 | 901 | ||
Intercompany long-term loans | 553 | 490 | ||
Other liabilities and deferred credits | 18 | 16 | ||
Shareholders' equity | 2,754 | 2,652 | ||
Total liabilities and shareholders' equity | 4,473 | 8,847 | ||
Guarantor Subsidiaries [Member] | ||||
Current assets | ||||
Cash and cash equivalents | 2 | 15 | 18 | |
Receivables | 265 | 384 | ||
Inventories | 549 | 556 | ||
Prepaid expenses | 22 | 7 | ||
Income and other taxes receivable | 13 | 13 | ||
Intercompany accounts | 210 | 4,776 | ||
Total current assets | 1,059 | 5,738 | ||
Property, plant and equipment, net | 2,042 | 2,018 | ||
Goodwill | 296 | 296 | ||
Intangible assets, net | 248 | 254 | ||
Investments in affiliates | 2,835 | 2,050 | ||
Intercompany long-term advances | 80 | 88 | ||
Other assets | 18 | 10 | ||
Total assets | 6,578 | 10,454 | ||
Current liabilities | ||||
Trade and other payables | 389 | 456 | ||
Intercompany accounts | 200 | 722 | ||
Income and other taxes payable | 24 | |||
Long-term debt due within one year | 1 | |||
Total current liabilities | 589 | 1,203 | ||
Long-term debt | 300 | 301 | ||
Intercompany long-term loans | 934 | 225 | ||
Deferred income taxes and other | 548 | 535 | ||
Other liabilities and deferred credits | 157 | 185 | ||
Shareholders' equity | 4,050 | 8,005 | ||
Total liabilities and shareholders' equity | 6,578 | 10,454 | ||
Non-Guarantor Subsidiaries [Member] | ||||
Current assets | ||||
Cash and cash equivalents | 132 | 75 | $ 87 | $ 77 |
Receivables | 351 | 243 | ||
Inventories | 221 | 210 | ||
Prepaid expenses | 10 | 6 | ||
Income and other taxes receivable | 14 | 11 | ||
Intercompany accounts | 190 | 16 | ||
Total current assets | 918 | 561 | ||
Property, plant and equipment, net | 845 | 817 | ||
Goodwill | 252 | 243 | ||
Intangible assets, net | 352 | 347 | ||
Intercompany long-term advances | 1,401 | 621 | ||
Other assets | 133 | 115 | ||
Total assets | 3,901 | 2,704 | ||
Current liabilities | ||||
Trade and other payables | 207 | 203 | ||
Intercompany accounts | 411 | 149 | ||
Income and other taxes payable | 29 | 9 | ||
Long-term debt due within one year | 2 | |||
Total current liabilities | 647 | 363 | ||
Long-term debt | 108 | 8 | ||
Deferred income taxes and other | 144 | 131 | ||
Other liabilities and deferred credits | 167 | 152 | ||
Shareholders' equity | 2,835 | 2,050 | ||
Total liabilities and shareholders' equity | $ 3,901 | $ 2,704 |
Supplemental Guarantor Financ70
Supplemental Guarantor Financial Information - Condensed Consolidating Statement of Cash Flows (Detail) CAD in Millions, $ in Millions | Jul. 03, 2015USD ($) | Jul. 03, 2015CAD | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) |
Operating activities | ||||||
Net earnings | $ 59 | $ 11 | $ 81 | $ 85 | ||
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | 229 | 231 | ||||
Cash flows provided from operating activities | 310 | 316 | ||||
Investing activities | ||||||
Additions to property, plant and equipment | (302) | (202) | ||||
Proceeds from disposals of property, plant and equipment | $ 26 | CAD 32 | 35 | |||
Acquisition of business, net of cash acquired | (1) | |||||
Other | 1 | 9 | ||||
Cash flows used for investing activities | (302) | (158) | ||||
Financing activities | ||||||
Dividend payments | (76) | (75) | ||||
Stock repurchase | (10) | (50) | ||||
Net change in bank indebtedness | 1 | (9) | ||||
Change in revolving bank credit facility | 60 | 75 | ||||
Proceeds from receivables securitization facility | 140 | |||||
Repayments of receivables securitization facility | (40) | |||||
Issuance of long-term debt | 300 | |||||
Repayments of long-term debt | (40) | (439) | ||||
Other | (3) | 1 | ||||
Cash flows provided from (used for) financing activities | 32 | (197) | ||||
Net increase (decrease) in cash and cash equivalents | 40 | (39) | ||||
Impact of foreign exchange on cash | 2 | (7) | ||||
Cash and cash equivalents at beginning of period | 126 | 174 | ||||
Cash and cash equivalents at end of period | 168 | 128 | 168 | 128 | ||
Consolidating Adjustments [Member] | ||||||
Operating activities | ||||||
Net earnings | (138) | (118) | (234) | (307) | ||
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | 234 | 307 | ||||
Financing activities | ||||||
Increase in long-term advances to related parties | 4,261 | 116 | ||||
Decrease in long-term advances to related parties | (4,261) | (116) | ||||
Parent [Member] | ||||||
Operating activities | ||||||
Net earnings | 59 | 11 | 81 | 85 | ||
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | (4,288) | 231 | ||||
Cash flows provided from operating activities | (4,207) | 316 | ||||
Financing activities | ||||||
Dividend payments | (76) | (75) | ||||
Stock repurchase | (10) | (50) | ||||
Change in revolving bank credit facility | 60 | 75 | ||||
Repayments of long-term debt | (38) | (436) | ||||
Decrease in long-term advances to related parties | 4,261 | 116 | ||||
Other | (3) | 1 | ||||
Cash flows provided from (used for) financing activities | 4,194 | (369) | ||||
Net increase (decrease) in cash and cash equivalents | (13) | (53) | ||||
Cash and cash equivalents at beginning of period | 49 | 79 | ||||
Cash and cash equivalents at end of period | 36 | 26 | 36 | 26 | ||
Guarantor Subsidiaries [Member] | ||||||
Operating activities | ||||||
Net earnings | 74 | 66 | 129 | 184 | ||
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | 4,168 | (320) | ||||
Cash flows provided from operating activities | 4,297 | (136) | ||||
Investing activities | ||||||
Additions to property, plant and equipment | (246) | (143) | ||||
Proceeds from disposals of property, plant and equipment | 7 | |||||
Acquisition of business, net of cash acquired | (1) | |||||
Cash flows used for investing activities | (247) | (136) | ||||
Financing activities | ||||||
Net change in bank indebtedness | 1 | (9) | ||||
Issuance of long-term debt | 300 | |||||
Repayments of long-term debt | (1) | (2) | ||||
Increase in long-term advances to related parties | (4,052) | (20) | ||||
Cash flows provided from (used for) financing activities | (4,052) | 269 | ||||
Net increase (decrease) in cash and cash equivalents | (2) | (3) | ||||
Cash and cash equivalents at beginning of period | 2 | 18 | ||||
Cash and cash equivalents at end of period | 15 | 15 | ||||
Non-Guarantor Subsidiaries [Member] | ||||||
Operating activities | ||||||
Net earnings | 64 | 52 | 105 | 123 | ||
Changes in operating and intercompany assets and liabilities and non-cash items, included in net earnings | 115 | 13 | ||||
Cash flows provided from operating activities | 220 | 136 | ||||
Investing activities | ||||||
Additions to property, plant and equipment | (56) | (59) | ||||
Proceeds from disposals of property, plant and equipment | 28 | |||||
Other | 1 | 9 | ||||
Cash flows used for investing activities | (55) | (22) | ||||
Financing activities | ||||||
Proceeds from receivables securitization facility | 140 | |||||
Repayments of receivables securitization facility | (40) | |||||
Repayments of long-term debt | (1) | (1) | ||||
Increase in long-term advances to related parties | (209) | (96) | ||||
Cash flows provided from (used for) financing activities | (110) | (97) | ||||
Net increase (decrease) in cash and cash equivalents | 55 | 17 | ||||
Impact of foreign exchange on cash | 2 | (7) | ||||
Cash and cash equivalents at beginning of period | 75 | 77 | ||||
Cash and cash equivalents at end of period | $ 132 | $ 87 | $ 132 | $ 87 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) $ in Millions | Oct. 01, 2016USD ($)ft²EmployeesRetail | Sep. 30, 2016USD ($) |
Subsequent Event [Line Items] | ||
Purchase price | $ 1 | |
Home Delivery Incontinent Supplies Co. [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Acquisition completion date | Oct. 1, 2016 | |
Acquisition percentage | 100.00% | |
Purchase price | $ 53 | |
Cash acquired in acquisition | 3 | |
Total revenues | $ 65 | |
Acquisition of business, number of employees | Employees | 240 | |
Home Delivery Incontinent Supplies Co. [Member] | Subsequent Event [Member] | Olivette, Missouri [Member] | ||
Subsequent Event [Line Items] | ||
Area of distribution center | ft² | 200,000 | |
Number of retail locations acquired | Retail | 2 | |
Home Delivery Incontinent Supplies Co. [Member] | Subsequent Event [Member] | Maximum [Member] | ||
Subsequent Event [Line Items] | ||
Business acquisition possible earn out payment | $ 10 |