Closure and Restructuring Costs and Impairment of Long-Lived Assets

3 Months Ended

Mar. 31, 2022

Restructuring And Related Activities [Abstract]

Closure and Restructuring Costs and Impairment of Long-Lived Assets

NOTE 10.

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CLOSURE AND RESTRUCTURING COSTS AND IMPAIRMENT OF LONG-LIVED ASSETS

Cost reduction program

The Company implemented a cost savings program. As part of this program, in August 2020, the Company announced the permanent closure of the uncoated freesheet manufacturing at the Kingsport, Tennessee and Port Huron, Michigan mills, the remaining paper machine at the Ashdown, Arkansas mill and the converting center in Ridgefields, Tennessee. Additionally, in May 2021, the Company announced the closure of the converting center in Dallas, Texas. These actions reduced the Company’s annual uncoated freesheet paper capacity by approximately 721,000 short tons and resulted in a workforce reduction of approximately 750 employees. For the three months ended March 31, 2022, the Company recorded nil of accelerated depreciation under Impairment of long-lived assets (2021 – $6 million) and nil of closure costs, under Closure and restructuring costs on the Consolidated Statement of Earnings (Loss) and Comprehensive Income (2021 – $3 million).

Conversion of Kingsport, Tennessee mill

The Company plans to enter the linerboard market with the conversion of the Kingsport paper machine. Once in full operation, the mill will produce and market approximately 600,000 tons annually of high-quality recycled linerboard and medium, providing the Company with a strategic footprint in a growing adjacent market. The conversion is expected to be completed by the end of 2022. For the three months ended March 31, 2022, the Company recorded $13 million under Asset conversion costs on the Consolidated Statement of Earnings (Loss) and Comprehensive Income (2021 – $8 million).