10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2018

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM    TO

COMMISSION FILE NUMBER: 001-33776

RESOLUTE FOREST PRODUCTS INC.

(Exact name of registrant as specified in its charter)

Delaware	98-0526415
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification number)

111 Robert-Bourassa Boulevard, Suite 5000; Montreal, Quebec; Canada H3C 2M1

(Address of principal executive offices) (Zip Code)

(514) 875-2160

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þNo ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

    Yes þNo ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer  þ
Non-accelerated filer¨	Smaller reporting company¨
	Emerging growth company¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes¨No þ

As of October 31, 2018, there were 90,344,530 shares of Resolute Forest Products Inc. common stock, $0.001 par value, outstanding.

RESOLUTE FOREST PRODUCTS INC.

TABLE OF CONTENTS

	Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2018 and 2017	1
Consolidated Statements of Comprehensive Income (Loss) for the Three Months and Nine Months Ended September 30, 2018 and 2017	2
Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017	3
Consolidated Statements of Changes in Equity for the Nine Months Ended September 30, 2018 and 2017	4
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and 2017	5
Notes to Unaudited Interim Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3. Quantitative and Qualitative Disclosures About Market Risk	65
Item 4. Controls and Procedures	65
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	66
Item 1A. Risk Factors	66
Item 6. Exhibits	67
SIGNATURES	68

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RESOLUTE FOREST PRODUCTS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in millions, except per share amounts)

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2018			2017			2018			2017
Sales	$	974		$	885		$	2,824		$	2,615
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		628			628			1,881			1,945
Depreciation and amortization		54			52			161			153
Distribution costs		117			110			356			328
Selling, general and administrative expenses		40			43			125			122
Closure costs, impairment and other related charges		—			8			1			80
Net gain on disposition of assets		—			(2	)		(4	)		(2	)
Operating income (loss)		135			46			304			(11	)
Interest expense		(12	)		(13	)		(36	)		(36	)
Non-operating pension and other postretirement benefit credits		13			2			38			6
Other income, net		14			6			4			11
Income (loss) before income taxes		150			41			310			(30	)
Income tax provision		(33	)		(15	)		(111	)		(63	)
Net income (loss) including noncontrolling interests		117			26			199			(93	)
Net income attributable to noncontrolling interests		—			(2	)		—			(4	)
Net income (loss) attributable to Resolute Forest Products Inc.	$	117		$	24		$	199		$	(97	)
Net income (loss) per share attributable to Resolute Forest Products Inc. common shareholders:
Basic	$	1.28		$	0.27		$	2.18		$	(1.07	)
Diluted		1.25			0.26			2.14			(1.07	)
Weighted-average number of Resolute Forest Products Inc. common shares outstanding:
Basic		91.3			90.5			91.3			90.4
Diluted		93.4			91.6			93.2			90.4

See accompanying notes to unaudited interim Consolidated Financial Statements.

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RESOLUTE FOREST PRODUCTS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in millions)

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2018			2017			2018			2017
Net income (loss) including noncontrolling interests	$	117		$	26		$	199		$	(93	)
Other comprehensive (loss) income:
Unamortized prior service credits
Change in unamortized prior service credits		(9	)		(5	)		(17	)		(12	)
Income tax provision		—			—			—			—
Change in unamortized prior service credits, net of tax		(9	)		(5	)		(17	)		(12	)
Unamortized actuarial losses
Change in unamortized actuarial losses		11			(2	)		29			25
Income tax provision		(2	)		(3	)		(6	)		(8	)
Change in unamortized actuarial losses, net of tax		9			(5	)		23			17
Foreign currency translation		—			1			—			1
Other comprehensive (loss) income, net of tax		—			(9	)		6			6
Comprehensive income (loss) including noncontrolling interests		117			17			205			(87	)
Comprehensive income attributable to noncontrolling interests		—			(2	)		—			(4	)
Comprehensive income (loss) attributable to Resolute Forest Products Inc.	$	117		$	15		$	205		$	(91	)

See accompanying notes to unaudited interim Consolidated Financial Statements.

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RESOLUTE FOREST PRODUCTS INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited, in millions, except per share amount)

	September 30, 2018			December 31, 2017
Assets
Current assets:
Cash and cash equivalents	$	72		$	6
Accounts receivable, net:
Trade		368			399
Other		109			80
Inventories, net		511			526
Assets held for sale		242			—
Other current assets		45			33
Total current assets		1,347			1,044
Fixed assets, less accumulated depreciation of $1,452 and $1,614 as of September 30, 2018 and December 31, 2017, respectively		1,545			1,716
Amortizable intangible assets, less accumulated amortization of $24 and $21 as of September 30, 2018 and December 31, 2017, respectively		62			65
Goodwill		81			81
Deferred income tax assets		924			1,076
Other assets		186			165
Total assets	$	4,145		$	4,147
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities	$	447		$	420
Current portion of long-term debt		1			1
Liabilities associated with assets held for sale		79			—
Total current liabilities		527			421
Long-term debt, net of current portion		644			788
Pension and other postretirement benefit obligations		1,090			1,257
Deferred income tax liabilities		1			13
Other liabilities		73			68
Total liabilities		2,335			2,547
Commitments and contingencies
Equity:
Resolute Forest Products Inc. shareholders’ equity:
Common stock, $0.001 par value. 118.3 shares issued and 90.3 shares outstanding as of September 30, 2018; 118.2 shares issued and 90.2 shares outstanding as of December 31, 2017		—			—
Additional paid-in capital		3,798			3,793
Deficit		(1,095	)		(1,294	)
Accumulated other comprehensive loss		(774	)		(780	)
Treasury stock at cost, 28.0 shares as of September 30, 2018 and December 31, 2017		(120	)		(120	)
Total Resolute Forest Products Inc. shareholders’ equity		1,809			1,599
Noncontrolling interests		1			1
Total equity		1,810			1,600
Total liabilities and equity	$	4,145		$	4,147

See accompanying notes to unaudited interim Consolidated Financial Statements.

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RESOLUTE FOREST PRODUCTS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited, in millions)

	Nine Months Ended September 30, 2018
	Resolute Forest Products Inc. Shareholders’ Equity
	Common Stock		Additional Paid-In Capital		Deficit			Accumulated Other Comprehensive Loss			Treasury Stock			Non-controlling Interests		Total Equity
Balance as of December 31, 2017	$	—	$	3,793	$	(1,294	)	$	(780	)	$	(120	)	$	1	$	1,600
Share-based compensation costs for equity-classified awards		—		5		—			—			—			—		5
Net income		—		—		199			—			—			—		199
Stock unit awards vested (0.1 shares), net of shares forfeited for employee withholding taxes		—		—		—			—			—			—		—
Other comprehensive income, net of tax		—		—		—			6			—			—		6
Balance as of September 30, 2018	$	—	$	3,798	$	(1,095	)	$	(774	)	$	(120	)	$	1	$	1,810

	Nine Months Ended September 30, 2017
	Resolute Forest Products Inc. Shareholders’ Equity
	Common Stock		Additional Paid-In Capital		Deficit			Accumulated Other Comprehensive Loss			Treasury Stock			Non- controlling Interests		Total Equity
Balance as of December 31, 2016	$	—	$	3,775	$	(1,207	)	$	(755	)	$	(120	)	$	18	$	1,711
Share-based compensation costs for equity-classified awards		—		8		—			—			—			—		8
Net (loss) income		—		—		(97	)		—			—			4		(93	)
Cumulative-effect adjustment upon deferred tax charge elimination (Note 10)		—		—		(3	)		—			—			—		(3	)
Other comprehensive income, net of tax		—		—		—			6			—			—		6
Balance as of September 30, 2017	$	—	$	3,783	$	(1,307	)	$	(749	)	$	(120	)	$	22	$	1,629

See accompanying notes to unaudited interim Consolidated Financial Statements.

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RESOLUTE FOREST PRODUCTS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in millions)

	Nine Months Ended   September 30,
	2018			2017
Cash flows from operating activities:
Net income (loss) including noncontrolling interests	$	199		$	(93	)
Adjustments to reconcile net income (loss) including noncontrolling interests to net cash provided by operating activities:
Share-based compensation		6			8
Depreciation and amortization		161			153
Closure costs, impairment and other related charges		—			66
(Reversal of) inventory write-downs related to closures		(1	)		24
Deferred income taxes		106			60
Net pension contributions and other postretirement benefit payments		(112	)		(92	)
Net gain on disposition of assets		(4	)		(2	)
Loss (gain) on translation of foreign currency denominated deferred income taxes		28			(80	)
(Gain) loss on translation of foreign currency denominated pension and other postretirement benefit obligations		(23	)		65
Net planned major maintenance payments		(7	)		(6	)
Changes in working capital:
Accounts receivable		(6	)		(6	)
Inventories		(53	)		(6	)
Other current assets		(13	)		(8	)
Accounts payable and accrued liabilities		61			12
Other, net		9			4
Net cash provided by operating activities		351			99
Cash flows from investing activities:
Cash invested in fixed assets		(94	)		(136	)
Disposition of assets		2			3
Decrease (increase) in countervailing duty cash deposits on supercalendered paper, net		13			(17	)
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber		(62	)		(18	)
Increase in countervailing duty cash deposits on uncoated groundwood paper		(6	)		—
Net cash used in investing activities		(147	)		(168	)
Cash flows from financing activities:
Net (repayments) borrowings under revolving credit facilities		(144	)		70
Payments of debt		—			(1	)
Payments of financing and credit facility fees		(1	)		—
Net cash (used in) provided by financing activities		(145	)		69
Effect of exchange rate changes on cash and cash equivalents, and restricted cash		(1	)		6
Net increase in cash and cash equivalents, and restricted cash		58			6
Cash and cash equivalents, and restricted cash:
Beginning of period		49			73
End of period	$	107		$	79
Cash and cash equivalents, and restricted cash at period end:
Cash and cash equivalents	$	72		$	38
Restricted cash (included in “Other current assets” and “Other assets”)		35			41

See accompanying notes to unaudited interim Consolidated Financial Statements.

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

Note 1. Organization and Basis of Presentation

Nature of operations

Resolute Forest Products Inc. (with its subsidiaries and affiliates, either individually or collectively, unless otherwise indicated, referred to as “Resolute Forest Products,” “we,” “our,” “us,” “Parent” or the “Company”) is incorporated in Delaware. We are a global leader in the forest products industry with a diverse range of products, including market pulp, tissue, wood products, newsprint and specialty papers, which are marketed in close to 70 countries. We own or operate some 40 manufacturing facilities, as well as power generation assets, in the United States and Canada.

Financial statements

Our interim consolidated financial statements and related notes (or the “Consolidated Financial Statements”) are unaudited and have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (or the “SEC”) for interim reporting. Under those rules, certain footnotes and other financial information that are normally required by U.S. generally accepted accounting principles may be condensed or omitted. In our opinion, all adjustments (consisting of normal recurring adjustments) necessary for the fair statement of the unaudited interim Consolidated Financial Statements have been made. All amounts are expressed in U.S. dollars, unless otherwise indicated. The results for the interim period ended September 30, 2018, are not necessarily indicative of the results to be expected for the full year. These unaudited interim Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 1, 2018. Certain prior period amounts in our footnotes have been reclassified to conform to the 2018 presentation.

New accounting pronouncements adopted

ASU 2014-09 “Revenue from Contracts from Customers”

Effective January 1, 2018, we adopted Accounting Standards Update (or “ASU”) 2014-09, “Revenue from Contracts from Customers,” issued by the Financial Accounting Standards Board (or the “FASB”), and the series of related accounting standard updates that followed (collectively, “Topic 606”). We utilized the modified retrospective method, which required the application of Topic 606 to: (i) all new revenue contracts entered into after January 1, 2018; and (ii) all existing revenue contracts as of January 1, 2018. The adoption of Topic 606 had no impact on our revenues, results of operations, or financial position. As a result of the implementation of Topic 606, our revenue recognition policy was updated as follows:

Revenue arises from contracts with customers in which the sale of goods is the main performance obligation. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when or as the performance obligation is satisfied, which is when (point in time) or as (over time) control of the promised good or service is transferred to the customer.

Revenue is measured at the amount to which we are expected to be entitled in exchange for transferring goods based on consideration specified in the contract with the customer. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that we collect from the customer, are excluded from revenue. When a contract with a customer includes variable consideration such as special pricing agreements and other volume-based incentives, revenue is recognized at the most likely amount based on sales forecasts, for which it is probable that a revenue reversal will not subsequently occur.

Revenue is recorded at a point in time when control over the goods transfers to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts with customers. Pulp, tissue, paper and wood products are delivered to our customers in the United States and Canada directly from our mills primarily by truck or rail. Pulp and paper products are delivered to our international customers primarily by ship. For sales where control transfers to the customer at the shipping point, revenue is recorded when the product leaves the facility, whereas for sales where control transfers at the destination, revenue is recorded when the product is delivered to the customer’s delivery site. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in “Distribution costs” in our Consolidated Statements of Operations.

Sales of our other products (green power produced from renewable sources, wood chips, and other wood-related products) are recognized when the products are delivered and are included in “Cost of sales, excluding depreciation, amortization and distribution costs” in our Consolidated Statements of Operations.

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

ASU 2016-01 “Recognition and Measurement of Financial Assets and Financial Liabilities”

In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. This update is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We adopted this ASU on January 1, 2018. The adoption of this accounting guidance did not impact our results of operations, financial position or cash flows.

ASU 2016-15 “Classification of Certain Cash Receipts and Cash Payments”

In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments,” which is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. All amendments to the guidance shall be adopted in the same period on a retrospective basis. We adopted this ASU on January 1, 2018. The adoption of this accounting guidance did not impact the presentation of our cash flows.

ASU 2016-18 “Restricted Cash”

In November 2016, the FASB issued ASU 2016-18, “Restricted Cash,” which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We adopted this ASU on January 1, 2018. Prior period amounts have been reclassified to conform to the 2018 presentation.

ASU 2017-05 “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets”

In February 2017, the FASB issued ASU 2017-05, “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets,” which clarifies the scope of Subtopic 610-20, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets” and adds guidance for partial sales of nonfinancial assets. This update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We adopted this ASU on January 1, 2018. The adoption of this accounting guidance did not impact our results of operations, financial position or cash flows.

ASU 2017-07 “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”

In March 2017, the FASB issued ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which requires employers that present a measure of operating income in their statements of earnings to disaggregate and present only the service cost component of net periodic pension cost and net periodic other postretirement benefit (or “OPEB”) cost in operating expenses (together with other employee compensation costs arising during the period). The other components of the net periodic pension cost and net periodic OPEB cost (or “Non-operating pension and OPEB costs”) are reported separately outside any subtotal of operating income. This update is effective retrospectively for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We adopted this ASU on January 1, 2018.

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

The effect of this ASU on our Consolidated Statements of Operations for the three months ended September 30, 2018 and 2017, was as follows:

	Three Months Ended September 30, 2018							Three Months Ended September 30, 2017
(Unaudited, in millions)	Before Accounting Standards Update		Effect of Change			As Reported		As Previously Reported		Effect of Change			As Adjusted
Cost of sales, excluding depreciation, amortization and distribution costs	$	615	$	13		$	628	$	624	$	4		$	628
Closure costs, impairment and other related charges		—		—			—		10		(2	)		8
Operating income		148		(13	)		135		48		(2	)		46
Non-operating pension and other postretirement benefit credits		—		13			13		—		2			2

The effect of this ASU on our Consolidated Statements of Operations for the nine months ended September 30, 2018 and 2017, was as follows:

	Nine Months Ended September 30, 2018							Nine Months Ended September 30, 2017
(Unaudited, in millions)	Before Accounting Standards Update		Effect of Change			As Reported		As Previously Reported			Effect of Change			As Adjusted
Cost of sales, excluding depreciation, amortization and distribution costs	$	1,842	$	39		$	1,881	$	1,936		$	9		$	1,945
Selling, general and administrative expenses		126		(1	)		125		123			(1	)		122
Closure costs, impairment and other related charges		1		—			1		82			(2	)		80
Operating income (loss)		342		(38	)		304		(5	)		(6	)		(11	)
Non-operating pension and other postretirement benefit credits		—		38			38		—			6			6

Accounting pronouncements not yet adopted

ASU 2016-02 “Leases”

In February 2016, the FASB issued ASU 2016-02, “Leases,” which requires lessees to recognize leases on the balance sheet while continuing to recognize expenses in the income statement 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. Enhanced disclosures will also be required to give financial statement users the ability to assess the amount, timing, and uncertainty of cash flows arising from leases.

We are currently in the process of evaluating our existing lease portfolio, which consists primarily of operating leases where we are the lessee. Upon adoption, we expect to recognize a liability and corresponding asset associated with in-scope leases. We are continuing our assessment and review of existing leases, which may identify other impacts, and are addressing necessary policy and process changes in preparation for adoption.

This ASU may either be adopted on a modified retrospective approach at the beginning of the earliest comparative period, or through a cumulative-effect adjustment at the adoption date. This update is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. We plan to adopt this standard on January 1, 2019, through a cumulative-effect adjustment at the adoption date.

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

ASU 2018-14 “Changes to the Disclosure Requirements for Defined Benefit Plans”

In August 2018, the FASB issued ASU 2018-14, “Changes to the Disclosure Requirements for Defined Benefit Plans,” which intends to add, remove, and clarify disclosure requirements related to defined benefit pension and OPEB plans. This update is effective for fiscal years ending after December 15, 2020, with early adoption permitted. We are still evaluating the impact of this standard on our consolidated financial statements.

ASU 2018-15 “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract”

In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted as of the beginning of an interim or annual reporting period. We are still evaluating the impact of this standard on our consolidated financial statements.

Note 2. Closure Costs, Impairment and Other Related Charges

Closure costs, impairment and other related charges were $1 million for the nine months ended September 30, 2018, and were comprised of the following for the three and nine months ended September 30, 2017:

(Unaudited, in millions)	Impairment of Assets		Accelerated Depreciation		Severance and Other Costs		Total
Pulp mill at Coosa Pines (Alabama) (1)
Third quarter	$	—	$	—	$	—	$	—
First nine months		55		—		—		55
Permanent closures
Paper machine at Catawba (South Carolina)
Third quarter		—		—		—		—
First nine months		5		—		4		9
Paper machines at Calhoun (Tennessee)
Third quarter		—		6		2		8
First nine months		—		6		2		8
Paper mill at Mokpo (South Korea)
Third quarter		—		—		—		—
First nine months		—		—		7		7
Other
Third quarter		—		—		—		—
First nine months		—		—		1		1
Total
Third quarter	$	—	$	6	$	2	$	8
First nine months		60		6		14		80

⁽¹⁾As a result of the continued deterioration of actual and projected cash flows, we recorded long-lived asset impairment charges of $55 million for the nine months ended September 30, 2017, to reduce the carrying value of the assets to their estimated fair value, which was determined using the market approach, by reference to market transaction prices for similar assets. The fair value measurement is considered a Level 3 measurement due to the significance of its unobservable inputs.

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

Note 3. Accumulated Other Comprehensive Loss

The change in our accumulated other comprehensive loss by component (net of tax) for the nine months ended September 30, 2018, was as follows:

(Unaudited, in millions)	Unamortized Prior Service Credits			Unamortized Actuarial Losses			Foreign Currency Translation			Total
Balance as of December 31, 2017	$	52		$	(826	)	$	(6	)	$	(780	)
Other comprehensive (loss) income before reclassifications		(5	)		2			—			(3	)
Amounts reclassified from accumulated other comprehensive loss (1)		(12	)		21			—			9
Net current period other comprehensive (loss) income		(17	)		23			—			6
Balance as of September 30, 2018	$	35		$	(803	)	$	(6	)	$	(774	)

⁽¹⁾  See the table below for details about these reclassifications.

The reclassifications out of accumulated other comprehensive loss for the nine months ended September 30, 2018, were comprised of the following:

(Unaudited, in millions)	Amounts Reclassified From Accumulated Other Comprehensive Loss			Affected Line in the Consolidated Statements of Operations
Unamortized Prior Service Credits
Amortization of prior service credits	$	(12	)	Non-operating pension and other postretirement benefit credits (1)
		—		Income tax provision
	$	(12	)	Net of tax
Unamortized Actuarial Losses
Amortization of actuarial losses	$	26		Non-operating pension and other postretirement benefit credits (1)
Settlement loss		1		Non-operating pension and other postretirement benefit credits (1)
		(6	)	Income tax provision
	$	21		Net of tax
Total Reclassifications	$	9		Net of tax

⁽¹⁾  These items are included in the computation of net periodic benefit cost related to our pension and OPEB plans summarized in Note 9, “Employee Benefit Plans.”

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Notes to Unaudited Interim Consolidated Financial Statements

Note 4. Net Income (Loss) Per Share

The reconciliation of the basic and diluted net income (loss) per share for the three and nine months ended September 30, 2018 and 2017, was as follows:

	Three Months Ended   September 30,				Nine Months Ended   September 30,
(Unaudited, in millions, except per share amounts)	2018		2017		2018		2017
Numerator:
Net income (loss) attributable to Resolute Forest Products Inc.	$	117	$	24	$	199	$	(97	)
Denominator:
Basic weighted-average number of Resolute Forest Products Inc. common shares outstanding		91.3		90.5		91.3		90.4
Dilutive impact of nonvested stock unit awards		2.1		1.1		1.9		—
Diluted weighted-average number of Resolute Forest Products Inc. common shares outstanding		93.4		91.6		93.2		90.4
Net income (loss) per share attributable to Resolute Forest Products Inc. common shareholders:
Basic	$	1.28	$	0.27	$	2.18	$	(1.07	)
Diluted		1.25		0.26		2.14		(1.07	)

The weighted-average number of outstanding stock options and nonvested equity-classified restricted stock units, deferred stock units and performance stock units (collectively, “stock unit awards”) that were excluded from the calculation of diluted net income (loss) per share, as their impact would have been antidilutive, for the three and nine months ended September 30, 2018 and 2017, was as follows:

	Three Months Ended   September 30,		Nine Months Ended   September 30,
(Unaudited, in millions)	2018	2017	2018	2017
Stock options	0.9	1.4	1.3	1.4
Stock unit awards	—	—	—	4.3

Note 5. Inventories, Net

Inventories, net as of September 30, 2018 and December 31, 2017, were comprised of the following:

(Unaudited, in millions)	September 30, 2018		December 31, 2017
Raw materials	$	99	$	108
Work in process		39		38
Finished goods		190		175
Mill stores and other supplies		183		205
	$	511	$	526

During the three months ended September 30, 2017, we recorded charges for write-downs of mill stores and other supplies of $11 million, primarily related to the permanent closure of two paper machines at Calhoun. During the nine months ended September 30, 2017, we also recorded charges of $13 million for write-downs of mill stores and other supplies primarily related to the permanent closures of a paper machine at our Catawba paper mill and our Mokpo paper mill. These charges were included in “Cost of sales, excluding depreciation, amortization and distribution costs” in our Consolidated Statements of Operations.

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Notes to Unaudited Interim Consolidated Financial Statements

Note 6. Assets Held for Sale, Net

As of September 30, 2018, we held for sale our recycled bleached kraft (or “RBK”) pulp mill at Fairmont (West Virginia) and our paper and pulp mill at Catawba.

On August 29, 2018, we entered into a definitive asset purchase agreement to sell our RBK pulp mill at Fairmont. The sale closed on November 1, 2018, for total cash consideration of $62 million, subject to final working capital adjustments, resulting in a net gain on disposition of assets of approximately $40 million, which will be recorded in the fourth quarter of 2018.

On October 2, 2018, we entered into a definitive asset purchase agreement to sell our paper and pulp mill at Catawba for total consideration of approximately $300 million, consisting of $260 million in cash, and the assumption of $40 million of liabilities, largely net pension benefit obligations, subject to customary closing adjustments.

Assets held for sale, net as of September 30, 2018 and December 31, 2017, were comprised of the following:

(Unaudited, in millions)	September 30, 2018		December 31, 2017
Assets held for sale:
Accounts receivable, net	$	45	$	—
Inventories, net		70		—
Other current assets		5		—
Fixed assets, net		121		—
Other assets		1		—
Total assets held for sale		242		—
Liabilities associated with assets held for sale:
Accounts payable and accrued liabilities		40		—
Pension and other postretirement benefit obligations		34		—
Other liabilities		5		—
Total liabilities associated with assets held for sale		79		—
	$	163	$	—

Note 7. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities as of September 30, 2018 and December 31, 2017, were comprised of the following:

(Unaudited, in millions)	September 30, 2018		December 31, 2017
Trade accounts payable	$	331	$	306
Payroll, bonuses and severance payable		55		55
Accrued interest		14		5
Pension and other postretirement benefit obligations		18		18
Income and other taxes payable		10		10
Environmental liabilities		2		2
Other		17		24
	$	447	$	420

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

Note 8. Long-Term Debt

Overview

Long-term debt, including current portion, as of September 30, 2018 and December 31, 2017, was comprised of the following:

(Unaudited, in millions)	September 30, 2018			December 31, 2017
5.875% senior unsecured notes due 2023:
Principal amount	$	600		$	600
Deferred financing costs		(5	)		(5	)
Unamortized discount		(3	)		(3	)
Total senior unsecured notes due 2023		592			592
Term loan due 2025		46			46
Borrowings under revolving credit facilities		—			144
Capital lease obligation		7			7
Total debt		645			789
Less: Current portion of long-term debt		(1	)		(1	)
Long-term debt, net of current portion	$	644		$	788

2023 Notes

We issued $600 million in aggregate principal amount of 5.875% senior unsecured notes due 2023 (or the “2023 Notes”) on May 8, 2013. Upon their issuance, the notes were recorded at their fair value of $594 million, which reflected a discount of $6 million that is being amortized to “Interest expense” in our Consolidated Statements of Operations using the interest method over the term of the notes, resulting in an effective interest rate of 6%. Interest on the notes is payable semi-annually on May 15 and November 15, until their maturity date of May 15, 2023. In connection with the issuance of the notes, we incurred financing costs of approximately $9 million, which were deferred and recorded as a reduction of the notes. These deferred financing costs are being amortized to “Interest expense” in our Consolidated Statements of Operations using the interest method over the term of the notes. The fair value of the 2023 Notes (Level 1) was $615 million and $622 million as of September 30, 2018 and December 31, 2017, respectively.

Senior Secured Credit Facility

On September 7, 2016, we entered into a senior secured credit facility (or the “Senior Secured Credit Facility”) for up to $185 million. The Senior Secured Credit Facility provides a term loan of $46 million with a maturity date of September 7, 2025 (the “Term Loan”), and a revolving credit facility of up to $139 million with a maturity date of September 7, 2022 (the “Revolving Credit Facility”). As of September 30, 2018, we had $139 million of availability under the Revolving Credit Facility. The fair values of the Term Loan and Revolving Credit Facility (Level 2) approximated their carrying values as of both September 30, 2018 and December 31, 2017.

ABL Credit Facility

On May 22, 2015, we entered into a senior secured asset-based revolving credit facility (the “ABL Credit Facility”), with an aggregate lender commitment of up to $600 million at any time outstanding, subject to borrowing base availability based on specified advance rates, eligibility criteria and customary reserves. The ABL Credit Facility will mature on May 22, 2020. As of September 30, 2018, we had $443 million of availability under the ABL Credit Facility, net of $53 million of ordinary course letters of credit outstanding. The fair value of the ABL Credit Facility (Level 2) approximated its carrying value as of both September 30, 2018 and December 31, 2017.

Capital lease obligation

We have a capital lease obligation for a warehouse with a maturity date of December 1, 2027, which can be renewed for 20 years at our option. Minimum monthly payments are determined by an escalatory price clause.

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Notes to Unaudited Interim Consolidated Financial Statements

Note 9. Employee Benefit Plans

Pension and other postretirement benefit plans

The components of net periodic benefit cost relating to our pension and OPEB plans for the three and nine months ended September 30, 2018 and 2017, were as follows:

Pension Plans:

	Three Months Ended   September 30,						Nine Months Ended   September 30,
(Unaudited, in millions)	2018			2017			2018			2017
Interest cost	$	46		$	51		$	142		$	149
Expected return on plan assets		(65	)		(66	)		(199	)		(190	)
Amortization of actuarial losses		9			14			29			42
Amortization of prior service credits		—			—			(1	)		—
Non-operating pension (credits) costs		(10	)		(1	)		(29	)		1
Service cost		5			6			14			15
Net periodic benefit (credits) costs before special events		(5	)		5			(15	)		16
Curtailment, settlement and other losses		—			3			1			4
	$	(5	)	$	8		$	(14	)	$	20

OPEB Plans:

	Three Months Ended   September 30,						Nine Months Ended   September 30,
(Unaudited, in millions)	2018			2017			2018			2017
Interest cost	$	1		$	2		$	4		$	5
Amortization of actuarial gains		—			(1	)		(3	)		(4	)
Amortization of prior service credits		(4	)		(4	)		(11	)		(11	)
Non-operating other postretirement benefit credits		(3	)		(3	)		(10	)		(10	)
Service cost		—			—			1			1
Net periodic benefit credits before special events		(3	)		(3	)		(9	)		(9	)
Curtailment gain		—			(1	)		—			(1	)
	$	(3	)	$	(4	)	$	(9	)	$	(10	)

Defined contribution plans

Our expense for the defined contribution plans totaled $5 million for both the three months ended September 30, 2018 and 2017, and $15 million and $16 million for the nine months ended September 30, 2018 and 2017, respectively.

Note 10. Income Taxes

Tax Cuts and Jobs Act

On December 22, 2017, the Tax Cuts and Jobs Act (or the “TCJA”) was enacted into law which, among other changes, reduced the U.S. federal statutory income tax rate from 35% to 21%, and introduced the global intangible low-taxed income (or “GILTI”) regime, the base erosion anti-abuse tax, and the foreign-derived intangible income deduction.

During the three and nine months ended September 30, 2018, the enactment of the TCJA resulted in an income tax provision attributable to the GILTI inclusion of $28 million and $53 million, respectively, before valuation allowance, with no other impact on our results of operations. After having evaluated the impact of the TCJA on the reinvestment of foreign earnings, we have maintained the position that such earnings continue to be permanently reinvested. Accordingly, no provision was recorded for undistributed foreign earnings.

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

The impacts of the TCJA on our 2017 financial results remain provisional and unchanged as of September 30, 2018. We have yet to adopt an accounting policy for the treatment of GILTI, and accordingly, no deferred tax amounts have been recorded.

The final impact of the TCJA may differ due to, among other things, changes in interpretations, the issuance of additional legislative guidance and clarification, and actions we may take as a result of the TCJA. We will recognize any adjustments to our provisional estimates in the reporting period they are determined, up to a period not to exceed one year from the date of enactment.

Effective income tax rate reconciliation

The income tax provision attributable to income (loss) before income taxes differs from the amounts computed by applying the U.S. federal statutory income tax rate of 21% for the three and nine months ended September 30, 2018 and 2017, as a result of the following:

	Three Months Ended   September 30,						Nine Months Ended   September 30,
(Unaudited, in millions)	2018			2017			2018			2017
Income (loss) before income taxes	$	150		$	41		$	310		$	(30	)
Income tax provision:
Expected income tax (provision) benefit		(31	)		(9	)		(65	)		6
Changes resulting from:
U.S. federal tax rate change reconciliation		—			(5	)		—			5
Valuation allowance (1)		32			(19	)		40			(94	)
Enactment of change in foreign tax rate		—			—			—			(12	)
Foreign exchange		2			8			(12	)		9
State income taxes, net of federal income tax benefit		(1	)		1			1			7
Foreign tax rate differences (2)		(35	)		7			(72	)		15
Other, net		—			2			(3	)		1
	$	(33	)	$	(15	)	$	(111	)	$	(63	)

⁽¹⁾  Relates to our U.S. operations for the three and nine months ended September 30, 2018, and the three months ended September 30, 2017, and primarily to our U.S. operations for the nine months ended September 30, 2017.

⁽²⁾  Includes an income tax provision attributable to the GILTI inclusion of $28 million and $53 million, before valuation allowance, for the three months and nine months ended September 30, 2018, respectively.

Deferred tax charge

On January 1, 2017, we adopted ASU 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory,” which eliminates the deferral of the tax effects of intra-entity asset transfers other than inventory until the transferred assets are sold to a third party or recovered through use. As a result, a cumulative-effect adjustment of $3 million was recorded to “Deficit” in our Consolidated Balance Sheet as of January 1, 2017.

Note 11. Commitments and Contingencies

Legal matters

We become involved in various legal proceedings and other disputes in the normal course of business, including matters related to contracts, commercial and trade disputes, taxes, environmental issues, activist damages, employment and workers’ compensation claims, grievances, human rights complaints, pension and benefit plans and obligations, health and safety, financial reporting and disclosure obligations, corporate governance, antitrust, First Nations claims, and other matters. Although the final outcome is subject to many variables and cannot be predicted with any degree of certainty, we regularly assess the status of the matters and establish provisions (including legal costs expected to be incurred) when we believe an adverse outcome is probable, and the amount can be reasonably estimated. Except as described below and for claims that cannot be

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Notes to Unaudited Interim Consolidated Financial Statements

assessed due to their preliminary nature, we believe that the ultimate disposition of these matters outstanding or pending as of September 30, 2018, will not have a material adverse effect on our Consolidated Financial Statements.

Countervailing duty and anti-dumping investigations on uncoated groundwood paper

On August 9, 2017, countervailing duty and anti-dumping petitions were filed with the U.S. Department of Commerce (or “Commerce”) and the U.S. International Trade Commission (or “ITC”) by a U.S. uncoated groundwood (or “UGW”) paper producer requesting that the U.S. government impose countervailing and anti-dumping duties on Canadian-origin UGW paper exported to the U.S. One of our subsidiaries was identified in the petitions as being a Canadian exporting producer of UGW paper to the U.S. and was selected as a mandatory respondent to be investigated by Commerce in both the countervailing duty and anti-dumping investigations.

On January 9, 2018, Commerce announced its preliminary determination in its countervailing duty investigation on Canadian-origin UGW paper exported to the U.S. As a result, beginning January 16, 2018, we were required to pay cash deposits to the U.S. Customs and Border Protection agency (or “U.S. Customs”) at a rate of 4.42% of the custom’s value for estimated countervailing duties on our U.S. imports of the UGW paper produced at our Canadian mills, with the exception of supercalendered (or “SC”) paper, which was subject to distinct countervailing duties, as further discussed below. The preliminary rate remained in effect until May 15, 2018. On March 13, 2018, Commerce also announced its preliminary determination in the anti-dumping investigation, whereby it determined that we did not sell Canadian-origin UGW paper exported to the U.S. for less than fair market value during the relevant period (from July 1, 2016 to June 30, 2017).

On August 29, 2018, the ITC determined that the U.S. UGW paper producer was not materially injured nor threatened with material injury by U.S. imports of Canadian-origin UGW paper, and that no countervailing duty or anti-dumping orders will be issued. As a result, we will receive a refund of all cash deposits made on our U.S. imports of UGW paper produced at our Canadian mills, plus interest, and no further cash deposits are required going forward. Through September 30, 2018, cash deposits to be refunded totaled $6 million. These cash deposits were recorded in “Accounts receivable, net – Other” in our Consolidated Balance Sheets.

Countervailing duty and anti-dumping investigations on softwood lumber

On November 25, 2016, countervailing duty and anti-dumping petitions were filed with Commerce and the ITC by certain U.S. softwood lumber producers and forest landowners, requesting that the U.S. government impose countervailing and anti-dumping duties on Canadian-origin softwood lumber exported to the U.S. One of our subsidiaries was identified in the petitions as being a Canadian exporting producer of softwood lumber to the U.S. and was selected as a mandatory respondent to be investigated by Commerce in both the countervailing duty and anti-dumping investigations.

On April 24, 2017, Commerce announced its preliminary determination in the countervailing duty investigation and, as a result, after April 28, 2017, we were required to pay cash deposits to the U.S. Customs at a rate of 12.82% for estimated countervailing duties on our U.S. imports of softwood lumber produced at our Canadian sawmills. The preliminary rate remained in effect until August 26, 2017. Commerce changed the rate in its final affirmative determination on November 2, 2017, but the new rate did not take effect until December 28, 2017, following the ITC’s final affirmative determination and the publication by Commerce of a countervailing duty order. Since that date, we have been required to resume paying cash deposits to the U.S. Customs at a rate of 14.7% for our softwood lumber U.S. imports from our Canadian sawmills. This rate will continue until Commerce sets a duty rate in an administrative review, or a new rate may be set through a remand determination should a North American Free Trade Agreement binational panel on appeal remand the final determination to Commerce. Through September 30, 2018, our cash deposits totaled $67 million and, based on the 14.7% rate and our current operating parameters, could be as high as $65 million per year.

On June 26, 2017, Commerce announced its preliminary determination in the anti-dumping investigation and, as a result, after June 30, 2017, we were required to pay cash deposits to the U.S. Customs at a rate of 4.59% for estimated anti-dumping duties on our U.S. imports of softwood lumber produced at our Canadian sawmills. On November 2, 2017, Commerce announced its final affirmative determination in the anti-dumping investigation and, as a result, since November 8, 2017, we have been required to pay cash deposits to the U.S. Customs, at a rate of 3.2% for our softwood lumber U.S. imports from our Canadian sawmills. This rate that will apply until Commerce sets a duty rate in an administrative review, or in a possible remand determination. Through September 30, 2018, our cash deposits totaled $21 million and, based on the 3.2% rate and our current operating parameters, could be as high as $15 million per year.

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

We are not presently able to determine the ultimate resolution of these matters, but we believe it is not probable that we will ultimately be assessed with significant duties, if any, on our U.S. imports of Canadian-produced softwood lumber. Accordingly, no contingent loss was recorded in respect of these petitions in our Consolidated Statement of Operations for the nine months ended September 30, 2018, and our cash deposits were recorded in “Other assets” in our Consolidated Balance Sheets.

Countervailing duty investigation on supercalendered paper

On February 26, 2015, a countervailing duty petition was filed with Commerce and the ITC by certain U.S. SC paper producers requesting that the U.S. government impose countervailing duties on Canadian-origin SC paper exported to the U.S. market. One of our subsidiaries was identified in the petition as being a Canadian exporting producer of SC paper to the U.S. and was selected as a mandatory respondent to be investigated by Commerce. As a result of that investigation, after August 3, 2015, we were required to pay cash deposits to the U.S. Customs for estimated countervailing duties on our U.S. imports of SC paper produced at our Canadian mills. Between August 3, 2015 and October 15, 2015, we were required to make cash deposits at a rate of 2.04%. On October 15, 2015, that rate increased to 17.87%, 17.10% of which was not based on any countervailable subsidy we received, but rather on a punitive application of “adverse facts available.”

On March 21, 2018, Verso Corporation, the sole remaining U.S. SC paper petitioner, filed a request with Commerce for a changed circumstances review to revoke the countervailing duty order, retroactive to August 3, 2015, and for Commerce to refund all countervailing duty deposits with interest. On May 8, 2018, Commerce announced the initiation of a changed circumstances review, and on July 6, 2018, Commerce signed the revocation order. As a result, we will receive a refund of all cash deposits made on our U.S. imports of SC paper produced at our Canadian mills, plus interest, and no further cash deposits are required going forward. In addition, this resulted in the termination of all pending administrative reviews.

Through September 30, 2018, cash deposits of $25 million were refunded. Remaining cash deposits to be refunded of $36 million, plus interest, were recorded in “Accounts receivable, net – Other” in our Consolidated Balance Sheets as of September 30, 2018.

Jedson Case

On March 9, 2017, Jedson Engineering, Inc. and Jedson C.M., Inc. (or the “Jedson plaintiffs”) filed a complaint against our subsidiary, Resolute FP US Inc., and other defendants in state court in Tennessee. The complaint alleged breach of contract and violation of Tennessee’s Prompt Pay Act for failure to pay for services in connection with the design and construction of our Calhoun tissue project, and sought a recovery of, and enforcement of mechanic’s liens for, approximately $10 million, plus interest and cost of litigation. On April 17, 2017, we filed an answer and counterclaim alleging, among other things, breach of contract and professional negligence by the Jedson plaintiffs and seeking recovery for, among other things, resulting costs on the project. On April 4, 2017, the Jedson plaintiffs also filed a motion for an injunction under the Prompt Pay Act seeking immediate payment of monies claimed and, on April 20, 2017, a motion to abate Resolute FP US Inc.’s counterclaim, both of which we opposed and have not been heard by the court. On August 25, 2017, the Jedson plaintiffs amended their complaint. As amended, the complaint includes allegations of fraud, intentional and negligent misrepresentation, unjust enrichment, and a claim for punitive damages in an amount of up to approximately $20 million. Effective February 20, 2018, the parties entered into an agreement to submit their disputes to binding private arbitration. On February 23, 2018, the state court issued an order staying the consolidated court proceedings pending completion of the arbitration subject to limited exceptions regarding certain defined procedural matters. The Company disputes the plaintiffs’ allegations, and intends to vigorously defend the action. The arbitration hearing is expected to occur in the first half of 2019. We are not presently able to determine the ultimate resolution of this matter or to reasonably estimate the potential impact on our Consolidated Financial Statements.

Modification of U.S. OPEB plan

Effective January 1, 2015, we modified our U.S. OPEB plan so that unionized participants, upon reaching Medicare eligibility, are provided Medicare coverage via a Medicare Exchange program rather than via a Company-sponsored medical plan. On March 2, 2016, a proposed class action lawsuit (Reynolds, et al v. Resolute Forest Products Inc., Resolute FP US Inc., Resolute FP US Health and Resolute Welfare Benefit Plan) was filed in the United States District Court for the Eastern District of Tennessee (or the “District Court”) on behalf of certain Medicare-eligible retirees who were previously unionized employees of our Calhoun, Catawba, and Coosa Pines mills, and their spouses and dependents (or the “proposed class”). The plaintiffs alleged that the modifications described above breached the collective bargaining agreements and plan covering the members of the proposed class in the lawsuit. Plaintiffs sought reinstatement of the health care benefits as in effect before January 1, 2015, for the proposed class in the lawsuit. On May 23, 2016, the Company filed a motion to dismiss the complaint. The motion to dismiss was denied by the District Court on March 1, 2017. On June 28, 2017, a settlement agreement in principle was reached

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Notes to Unaudited Interim Consolidated Financial Statements

between the parties to the lawsuit subject to court approval. On June 5, 2018, the District Court issued an order providing for preliminary approval of the settlement. On August 3, 2018, a final order approving the class action settlement and dismissing the case was entered, resulting in an amendment of our U.S. OPEB plan and a corresponding increase of $3 million to both “Pension and other postretirement benefit obligations” and “Accumulated other comprehensive loss” was recorded in our Consolidated Balance Sheet in the third quarter of 2018.

Fibrek acquisition

Effective July 31, 2012, we completed the final step of the transaction pursuant to which we acquired the remaining 25.4% of the outstanding Fibrek Inc. (or “Fibrek”) shares, following the approval of Fibrek’s shareholders on July 23, 2012, and the issuance of a final order of the Quebec Superior Court in Canada approving the arrangement on July 27, 2012. Certain former shareholders of Fibrek exercised (or purported to exercise) rights of dissent in respect of the transaction, asking for a judicial determination of the fair value of their claim under the Canada Business Corporations Act. No consideration has to date been paid to the former Fibrek shareholders who exercised (or purported to exercise) rights of dissent. Any such consideration will only be paid out upon settlement or judicial determination of the fair value of their claims and will be paid entirely in cash. Accordingly, we cannot presently determine the amount that ultimately will be paid to former holders of Fibrek shares in connection with the proceedings, but we have accrued approximately Cdn $14 million ($11 million, based on the exchange rate in effect on September 30, 2018) for the eventual payment of those claims. The hearing in this matter is expected to occur in 2019.

Partial wind-ups of pension plans

On June 12, 2012, we filed a motion for directives with the Quebec Superior Court, the court with jurisdiction in the creditor protection proceedings under the Companies’ Creditors Arrangement Act (Canada) (or the “CCAA Creditor Protection Proceedings”), seeking an order to prevent pension regulators in each of Quebec, New Brunswick, and Newfoundland and Labrador from declaring partial wind-ups of pension plans relating to employees of former operations in New Brunswick, and Newfoundland and Labrador, or a declaration that any claim for accelerated reimbursements of deficits arising from a partial wind-up is a barred claim under the CCAA Creditor Protection Proceedings. We contend, among other things, that any such declaration, if issued, would be inconsistent with the Quebec Superior Court’s sanction order confirming the CCAA debtors’ CCAA Plan of Reorganization and Compromise, as amended, and the terms of our emergence from the CCAA Creditor Protection Proceedings. A partial wind-up would likely shorten the period in which any deficit within those plans, which could reach up to Cdn $150 million ($115 million, based on the exchange rate in effect on September 30, 2018), would have to be funded if we do not obtain the relief sought. The hearing in this matter is expected to occur in 2019.

Environmental matters

We are subject to a variety of federal or national, state, provincial, and local environmental laws and regulations in the jurisdictions in which we operate. We believe our operations are in material compliance with current applicable environmental laws and regulations. Environmental regulations promulgated in the future could require substantial additional expenditures for compliance and could have a material impact on us, in particular, and the industry in general.

We may be a “potentially responsible party” with respect to a hazardous waste site that is being addressed pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (commonly known as Superfund). We believe we will not be liable for any significant amounts at this site.

We have environmental liabilities of $8 million recorded as of both September 30, 2018 and December 31, 2017, primarily related to environmental remediation related to closed sites. The amount of these liabilities represents management’s estimate of the ultimate settlement based on an assessment of relevant factors and assumptions and could be affected by changes in facts or assumptions not currently known to management for which the outcome cannot be reasonably estimated at this time. These liabilities are included in “Accounts payable and accrued liabilities” or “Other liabilities” in our Consolidated Balance Sheets.

We have also asset retirement obligations of $23 million and $24 million recorded as of September 30, 2018 and December 31, 2017, respectively, primarily consisting of liabilities associated with landfills, sludge basins and the dismantling of retired assets. These liabilities are included in “Other liabilities” in our Consolidated Balance Sheets.

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

Note 12. Segment Information

We manage our business based on the products we manufacture. Accordingly, our reportable segments correspond to our principal product lines: market pulp, tissue, wood products, newsprint, and specialty papers.

None of the income or loss items following “Operating income (loss)” in our Consolidated Statements of Operations are allocated to our segments, since those items are reviewed separately by management. For the same reason, closure costs, impairment and other related charges, inventory write-downs related to closures, start-up costs, gains and losses on disposition of assets, as well as other discretionary charges or credits are not allocated to our segments. We allocate depreciation and amortization expense to our segments, although the related fixed assets and amortizable intangible assets are not allocated to segment assets. Additionally, all selling, general and administrative expenses are allocated to our segments, with the exception of certain discretionary charges and credits, which we present under “corporate and other.”

Information about certain segment data for the three and nine months ended September 30, 2018 and 2017, was as follows:

(Unaudited, in millions)	Market Pulp (1)		Tissue (2)			Wood Products (3)		Newsprint			Specialty Papers		Segment Total		Corporate and Other			Total
Sales
Third quarter
2018	$	288	$	38		$	203	$	232		$	213	$	974	$	—		$	974
2017		227		21			219		199			219		885		—			885
First nine months
2018		809		95			666		660			594		2,824		—			2,824
2017		649		61			593		626			686		2,615		—			2,615
Depreciation and amortization
Third quarter
2018	$	7	$	5		$	8	$	16		$	12	$	48	$	6		$	54
2017		8		2			9		16			11		46		6			52
First nine months
2018		22		11			23		49			36		141		20			161
2017		24		4			25		49			34		136		17			153
Operating income (loss) (4)
Third quarter
2018	$	57	$	(10	)	$	45	$	32		$	26	$	150	$	(15	)	$	135
2017		19		(3	)		64		(6	)		7		81		(35	)		46
First nine months
2018		131		(21	)		177		46			23		356		(52	)		304
2017		42		(4	)		129		(17	)		4		154		(165	)		(11	)

⁽¹⁾  Inter-segment sales of $10 million and $9 million for the three months ended September 30, 2018 and 2017, respectively, and $29 million and $28 million for the nine months ended September 30, 2018 and 2017, respectively, which are transacted at cost, were excluded from market pulp sales.

⁽²⁾  The operating results of our Calhoun tissue operations, previously recorded under “corporate and other,” have been recorded in our tissue segment since April 1, 2018.

⁽³⁾  Wood products sales to our joint ventures, which are transacted at arm’s length negotiated prices, were $7 million and $6 million for the three months ended September 30, 2018 and 2017, respectively, and $23 million and $16 million for the nine months ended September 30, 2018 and 2017, respectively.

⁽⁴⁾  In the first quarter of 2018, we changed our presentation of operating income in accordance with FASB ASU 2017-07, to present only the service cost component of net periodic pension cost and OPEB cost in operating expenses (together with other employee compensation costs arising during the period). The non-operating pension and OPEB costs,

19

RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

presented under “corporate and other,” are reported separately outside any subtotal of operating income. Prior period amounts have been reclassified to conform to the 2018 presentation. See Note 1. Organization and Basis of Presentation – New accounting pronouncements adopted – ASU 2017-07 “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” for more information.

Note 13. Condensed Consolidating Financial Information

The following information is presented in accordance with Rule 3-10 of Regulation S-X and the public information requirements of Rule 144 promulgated pursuant to the Securities Act of 1933, as amended, in connection with Resolute Forest Products Inc.’s 2023 Notes that are fully and unconditionally guaranteed, on a joint and several basis, by all of our 100% owned material U.S. subsidiaries (or the “Guarantor Subsidiaries”). The 2023 Notes are not guaranteed by our foreign subsidiaries (or the “Non-guarantor Subsidiaries”).

The following condensed consolidating financial information sets forth the Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2018 and 2017, the Balance Sheets as of September 30, 2018 and December 31, 2017, and the Statements of Cash Flows for the nine months ended September 30, 2018 and 2017 for the Parent, the Guarantor Subsidiaries on a combined basis, and the Non-guarantor Subsidiaries also on a combined basis. The condensed consolidating financial information reflects the investments of the Parent in the Guarantor Subsidiaries and Non-guarantor Subsidiaries, as well as the investments of the Guarantor Subsidiaries in the Non-guarantor Subsidiaries, using the equity method of accounting. The principal consolidating adjustments are entries to eliminate the investments in subsidiaries and intercompany balances and transactions.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three Months Ended September 30, 2018
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	808		$	609		$	(443	)	$	974
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			708			366			(446	)		628
Depreciation and amortization		—			20			34			—			54
Distribution costs		—			42			75			—			117
Selling, general and administrative expenses		6			17			17			—			40
Operating (loss) income		(6	)		21			117			3			135
Interest expense		(20	)		(2	)		(3	)		13			(12	)
Non-operating pension and other postretirement benefit credits		—			4			9			—			13
Other income, net		—			14			13			(13	)		14
Equity in income of subsidiaries		143			7			—			(150	)		—
Income before income taxes		117			44			136			(147	)		150
Income tax provision		—			—			(32	)		(1	)		(33	)
Net income including noncontrolling interests		117			44			104			(148	)		117
Net income attributable to noncontrolling interests		—			—			—			—			—
Net income attributable to Resolute Forest Products Inc.	$	117		$	44		$	104		$	(148	)	$	117
Comprehensive income attributable to Resolute Forest Products Inc.	$	117		$	38		$	110		$	(148	)	$	117

20

RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Nine Months Ended September 30, 2018
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	2,348		$	1,875		$	(1,399	)	$	2,824
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			2,145			1,128			(1,392	)		1,881
Depreciation and amortization		—			61			100			—			161
Distribution costs		—			119			239			(2	)		356
Selling, general and administrative expenses		18			48			59			—			125
Closure costs, impairment and other related charges		—			—			1			—			1
Net gain on disposition of assets		—			—			(4	)		—			(4	)
Operating (loss) income		(18	)		(25	)		352			(5	)		304
Interest expense		(67	)		(6	)		(9	)		46			(36	)
Non-operating pension and other postretirement benefit credits		—			11			27			—			38
Other income, net		—			47			3			(46	)		4
Equity in income of subsidiaries		284			56			—			(340	)		—
Income before income taxes		199			83			373			(345	)		310
Income tax provision		—			—			(112	)		1			(111	)
Net income including noncontrolling interests		199			83			261			(344	)		199
Net income attributable to noncontrolling interests		—			—			—			—			—
Net income attributable to Resolute Forest Products Inc.	$	199		$	83		$	261		$	(344	)	$	199
Comprehensive income attributable to Resolute Forest Products Inc.	$	205		$	72		$	278		$	(350	)	$	205

21

RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Three Months Ended September 30, 2017
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	716		$	570		$	(401	)	$	885
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			670			360			(402	)		628
Depreciation and amortization		—			18			34			—			52
Distribution costs		—			39			71			—			110
Selling, general and administrative expenses		4			19			20			—			43
Closure costs, impairment and other related charges		—			8			—			—			8
Net gain on disposition of assets		—			—			(2	)		—			(2	)
Operating (loss) income		(4	)		(38	)		87			1			46
Interest expense		(23	)		(3	)		(3	)		16			(13	)
Non-operating pension and other postretirement benefit (costs) credits		—			(1	)		3			—			2
Other income, net		—			20			2			(16	)		6
Equity in income (loss) of subsidiaries		51			(3	)		—			(48	)		—
Income (loss) before income taxes		24			(25	)		89			(47	)		41
Income tax provision		—			—			(15	)		—			(15	)
Net income (loss) including noncontrolling interests		24			(25	)		74			(47	)		26
Net income attributable to noncontrolling interests		—			—			(2	)		—			(2	)
Net income (loss) attributable to Resolute Forest Products Inc.	$	24		$	(25	)	$	72		$	(47	)	$	24
Comprehensive income (loss) attributable to Resolute Forest Products Inc.	$	15		$	(41	)	$	79		$	(38	)	$	15

22

RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
For the Nine Months Ended September 30, 2017
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	2,131		$	1,660		$	(1,176	)	$	2,615
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			2,030			1,091			(1,176	)		1,945
Depreciation and amortization		—			55			98			—			153
Distribution costs		—			119			210			(1	)		328
Selling, general and administrative expenses		18			53			51			—			122
Closure costs, impairment and other related charges		—			72			8			—			80
Net gain on disposition of assets		—			—			(2	)		—			(2	)
Operating (loss) income		(18	)		(198	)		204			1			(11	)
Interest expense		(65	)		(7	)		(9	)		45			(36	)
Non-operating pension and other postretirement benefit credits		—			—			6			—			6
Other income, net		—			53			3			(45	)		11
Equity in loss of subsidiaries		(14	)		(2	)		—			16			—
(Loss) income before income taxes		(97	)		(154	)		204			17			(30	)
Income tax provision		—			(1	)		(62	)		—			(63	)
Net (loss) income including noncontrolling interests		(97	)		(155	)		142			17			(93	)
Net income attributable to noncontrolling interests		—			—			(4	)		—			(4	)
Net (loss) income attributable to Resolute Forest Products Inc.	$	(97	)	$	(155	)	$	138		$	17		$	(97	)
Comprehensive (loss) income attributable to Resolute Forest Products Inc.	$	(91	)	$	(173	)	$	162		$	11		$	(91	)

23

RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

CONDENSED CONSOLIDATING BALANCE SHEET
As of September 30, 2018
(Unaudited, in millions)	Parent		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Consolidating Adjustments			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	64	$	8	$	—		$	72
Accounts receivable, net		—		350		127		—			477
Accounts receivable from affiliates		—		566		1,008		(1,574	)		—
Inventories, net		—		195		330		(14	)		511
Assets held for sale		—		228		14		—			242
Note, advance and interest receivable from parent		—		419		—		(419	)		—
Notes and interest receivable from affiliates		—		31		—		(31	)		—
Other current assets		—		14		31		—			45
Total current assets		—		1,867		1,518		(2,038	)		1,347
Fixed assets, net		—		554		991		—			1,545
Amortizable intangible assets, net		—		12		50		—			62
Goodwill		—		81		—		—			81
Deferred income tax assets		—		1		920		3			924
Note receivable from parent		—		488		—		(488	)		—
Note receivable from affiliate		—		113		—		(113	)		—
Investments in consolidated subsidiaries and affiliates		4,229		2,167		—		(6,396	)		—
Other assets		—		107		79		—			186
Total assets	$	4,229	$	5,390	$	3,558	$	(9,032	)	$	4,145
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities	$	14	$	163	$	270	$	—		$	447
Current portion of long-term debt		—		1		—		—			1
Liabilities associated with assets held for sale		—		79		—		—			79
Accounts payable to affiliates		566		1,053		—		(1,619	)		—
Note, advance and interest payable to subsidiaries		419		—		—		(419	)		—
Notes and interest payable to affiliate		—		—		31		(31	)		—
Total current liabilities		999		1,296		301		(2,069	)		527
Long-term debt, net of current portion		592		52		—		—			644
Note payable to subsidiary		488		—		—		(488	)		—
Note payable to affiliate		—		—		113		(113	)		—
Pension and other postretirement benefit obligations		—		318		772		—			1,090
Deferred income tax liabilities		—		—		1		—			1
Other liabilities		6		22		45		—			73
Total liabilities		2,085		1,688		1,232		(2,670	)		2,335
Total equity		2,144		3,702		2,326		(6,362	)		1,810
Total liabilities and equity	$	4,229	$	5,390	$	3,558	$	(9,032	)	$	4,145

24

RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2017
(Unaudited, in millions)	Parent		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Consolidating Adjustments			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	3	$	3	$	—		$	6
Accounts receivable, net		—		319		160		—			479
Accounts receivable from affiliates		—		535		729		(1,264	)		—
Inventories, net		—		243		292		(9	)		526
Note, advance and interest receivable from parent		—		538		—		(538	)		—
Notes and interest receivable from affiliates		—		32		—		(32	)		—
Other current assets		—		16		17		—			33
Total current assets		—		1,686		1,201		(1,843	)		1,044
Fixed assets, net		—		692		1,024		—			1,716
Amortizable intangible assets, net		—		13		52		—			65
Goodwill		—		81		—		—			81
Deferred income tax assets		—		1		1,073		2			1,076
Notes receivable from parent		—		330		—		(330	)		—
Note receivable from affiliate		—		116		—		(116	)		—
Investments in consolidated subsidiaries and affiliates		3,939		2,111		—		(6,050	)		—
Other assets		—		98		67		—			165
Total assets	$	3,939	$	5,128	$	3,417	$	(8,337	)	$	4,147
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities	$	4	$	171	$	245	$	—		$	420
Current portion of long-term debt		—		1		—		—			1
Accounts payable to affiliates		536		728		—		(1,264	)		—
Note, advance and interest payable to subsidiaries		538		—		—		(538	)		—
Notes and interest payable to affiliate		—		—		32		(32	)		—
Total current liabilities		1,078		900		277		(1,834	)		421
Long-term debt, net of current portion		592		196		—		—			788
Note payable to subsidiary		330		—		—		(330	)		—
Note payable to affiliate		—		—		116		(116	)		—
Pension and other postretirement benefit obligations		—		378		879		—			1,257
Deferred income tax liabilities		—		—		13		—			13
Other liabilities		5		24		39		—			68
Total liabilities		2,005		1,498		1,324		(2,280	)		2,547
Total equity		1,934		3,630		2,093		(6,057	)		1,600
Total liabilities and equity	$	3,939	$	5,128	$	3,417	$	(8,337	)	$	4,147

25

RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2018
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash provided by operating activities	$	—		$	291		$	60		$	—		$	351
Cash flows from investing activities:
Cash invested in fixed assets		—			(31	)		(63	)		—			(94	)
Disposition of assets		—			—			2			—			2
Decrease in countervailing duty cash deposits on supercalendered paper, net		—			13			—			—			13
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber		—			(62	)		—			—			(62	)
Increase in countervailing duty cash deposits on uncoated groundwood paper		—			(6	)		—			—			(6	)
Advance to parent		—			(1	)		—			1			—
Decrease in notes receivable from affiliate		—			1			—			(1	)		—
Net cash used in investing activities		—			(86	)		(61	)		—			(147	)
Cash flows from financing activities:
Net repayments under revolving credit facilities		—			(144	)		—			—			(144	)
Payments of financing and credit facility fees		(1	)		—			—			—			(1	)
Advance from subsidiary		1			—			—			(1	)		—
Decrease in notes payable to affiliate		—			—			(1	)		1			—
Net cash used in financing activities		—			(144	)		(1	)		—			(145	)
Effect of exchange rate changes on cash and cash equivalents, and restricted cash		—			—			(1	)		—			(1	)
Net increase (decrease) in cash and cash equivalents, and restricted cash		—			61			(3	)		—			58
Cash and cash equivalents, and restricted cash:
Beginning of period		—			3			46			—			49
End of period	$	—		$	64		$	43		$	—		$	107
Cash and cash equivalents, and restricted cash at period end:
Cash and cash equivalents	$	—		$	64		$	8		$	—		$	72
Restricted cash		—			—			35			—			35

26

RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2017
(Unaudited, in millions)	Parent		Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash provided by operating activities	$	—	$	69		$	30		$	—		$	99
Cash flows from investing activities:
Cash invested in fixed assets		—		(106	)		(30	)		—			(136	)
Disposition of assets		—		—			3			—			3
Increase in countervailing duty cash deposits on supercalendered paper		—		(17	)		—			—			(17	)
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber		—		(18	)		—			—			(18	)
Decrease in notes receivable from affiliate		—		5			—			(5	)		—
Net cash used in investing activities		—		(136	)		(27	)		(5	)		(168	)
Cash flows from financing activities:
Net borrowings under revolving credit facilities		—		70			—			—			70
Payments of debt		—		(1	)		—			—			(1	)
Decrease in notes payable to affiliate		—		—			(5	)		5			—
Net cash provided by (used in) financing activities		—		69			(5	)		5			69
Effect of exchange rate changes on cash and cash equivalents, and restricted cash		—		—			6			—			6
Net increase in cash and cash equivalents, and restricted cash		—		2			4			—			6
Cash and cash equivalents, and restricted cash:
Beginning of period		—		2			71			—			73
End of period	$	—	$	4		$	75		$	—		$	79
Cash and cash equivalents, and restricted cash at period end:
Cash and cash equivalents	$	—	$	4		$	34		$	—		$	38
Restricted cash		—		—			41			—			41

27

RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

Note 14. Subsequent Event

The following significant event occurred subsequent to September 30, 2018:

• We announced a special cash dividend of $1.50 per share on November 1, 2018. The special dividend will be payable on December 20, 2018 to shareholders of record at the close of business on December 6, 2018.

28

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion and analysis is intended to help the reader understand Resolute Forest Products, our results of operations, cash flows and financial condition. The discussion is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes (or the “Consolidated Financial Statements”) contained in Item 1 – Financial Statements of this Quarterly Report on Form 10-Q (or “Form 10-Q”).

When we refer to “Resolute Forest Products,” “we,” “our,” “us” or the “Company,” we mean Resolute Forest Products Inc. with its subsidiaries and affiliates, either individually or collectively, unless otherwise indicated.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATIONAND USEOF THIRD-PARTY DATA

Statements in this Form 10-Q that are not reported financial results or other historical information of Resolute Forest Products are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. They include, for example, statements relating to our: strategic investment plan for our Saint-Félicien (Quebec) pulp mill; efforts and initiatives to reduce costs and increase revenues and profitability; business and operating outlook; assessment of market conditions; growth strategies and prospects, and the growth potential of the Company and the industry in which we operate; liquidity; future cash flows; and strategies for achieving our goals generally. Forward-looking statements may be identified by the use of forward-looking terminology such as the words “should,” “would,” “could,” “will,” “may,” “expect,” “believe,” “anticipate,” “attempt,” “project” and other terms with similar meaning indicating possible future events or potential impact on our business or Resolute Forest Products’ shareholders.

The reader is cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance. These statements are based on management’s current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties that could cause actual results to differ materially. The potential risks and uncertainties that could cause our actual future financial condition, results of operations and performance to differ materially from those expressed or implied in this Form 10-Q include, but are not limited to, the impact of: developments in non-print media, and the effectiveness of our responses to these developments; intense competition in the forest products industry; any inability to offer products certified to globally recognized forestry management and chain of custody standards; any inability to successfully implement our strategies to increase our earnings power; the possible failure to successfully integrate acquired businesses with ours or to realize the anticipated benefits of acquisitions, such as Atlas Paper Holdings, Inc. and its subsidiaries (or “Atlas Tissue”), or divestitures or other strategic transactions or projects, such as our Calhoun (Tennessee) tissue operations; uncertainty or changes in political or economic conditions in the U.S., Canada or other countries in which we sell our products; global economic conditions; the highly cyclical nature of the forest products industry; any difficulties in obtaining timber or wood fiber at favorable prices, or at all; changes in the cost of purchased energy and other raw materials; physical and financial risks associated with global, regional, and local weather conditions, and climate change; any disruption in operations or increased labor costs due to labor disputes; difficulties in our employee relations or retention; disruptions to our supply chain, operations or the delivery of our products; cybersecurity risks; risks related to the operation and transition of legacy system applications; negative publicity, even if unjustified; currency fluctuations; any increase in the level of required contributions to our pension plans, including as a result of any increase in the amount by which they are underfunded; our ability to maintain adequate capital resources to provide for all of our substantial capital requirements; the terms of our outstanding indebtedness, which could restrict our current and future operations; losses that are not covered by insurance; any additional closure costs and long-lived asset or goodwill impairment or accelerated depreciation charges; any need to record additional valuation allowances against our recorded deferred income tax assets; our exports from one country to another country becoming or remaining subject to duties, cash deposit requirements, border taxes, quotas or other trade remedies or restrictions; countervailing or anti-dumping duties on imports to the U.S. of most of our paper products and substantially all of our softwood lumber products produced at our Canadian mills; any failure to comply with laws or regulations generally; any additional environmental or health and safety liabilities; any violation of trade laws, export controls or other laws relating to our international sales and operations; adverse outcomes of legal proceedings or disputes in which we are involved; the actions of holders of a significant percentage of our common stock; and the potential risks and uncertainties set forth under Part I, Item 1A, “Risk Factors,” of our annual report on Form 10-K for the year ended December 31, 2017, filed with the U.S. Securities and Exchange Commission, or the “SEC”, on March 1, 2018 (the “2017 Annual Report”).

All forward-looking statements in this Form 10-Q are expressly qualified by the cautionary statements contained or referred to in this section and in our other filings with the SEC and the Canadian securities regulatory authorities. We disclaim any obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

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Market and industry data

The information on industry and general economic conditions in this Form 10-Q was derived from third-party sources and trade publications we believe to be widely accepted and accurate. We have not independently verified the information and cannot assure you of its accuracy.

OVERVIEW

Resolute Forest Products is a global leader in the forest products industry with a diverse range of products, including market pulp, tissue, wood products, newsprint and specialty papers, which are marketed in close to 70 countries. The company owns or operates some 40 manufacturing facilities, as well as power generation assets, in the U.S. and Canada. We are the largest Canadian producer of wood products east of the Canadian Rockies and one of the most significant pulp producers in North America. By capacity, we are the number one producer of newsprint in the world and the largest producer of uncoated mechanical papers in North America. We are also an emerging tissue producer.

We report our activities in five business segments: market pulp, tissue, wood products, newsprint, and specialty papers.

We are guided by our vision and values, focusing on safety, sustainability, profitability, accountability, and teamwork. We believe we can be distinguished by the following competitive strengths:

Competitive cost structure combined with diversified and integrated asset base

• large-scale, efficient and cost-effective operations, including our ability to optimize staffing across our various operations;

• access to renewable virgin fiber;

• significant internal energy production from cogeneration and hydroelectric facilities;

• raw materials for our paper, pulp and cogeneration facilities in Canada, our pellet plant at Thunder Bay (Ontario), as well as our value-added and engineered wood facilities in Quebec provided primarily by our sawmills;

• strategically located mills, including economical access to international markets;

• competitive selling, general and administrative expenses (or “SG&A”) to sales ratio; and

• significant tax assets that help defer cash taxes and provide synergies in the execution of our growth and diversification strategy.

Strong balance sheet

Our low debt, which has favorable pricing and flexibility, combined with strong liquidity levels, provide us with the ability to execute our strategy, particularly the continued transformation to a more profitable and sustainable company for the long term.

Seasoned management team

Our senior management team is comprised of women and men with many years of experience in the pulp, tissue, wood products, and paper industries. In addition, we have an integrated leadership system focused on increasing our organizational capability by optimizing organizational structure, clarifying each employee’s role and accountabilities, improving the link between compensation and individual performance, and improving our succession planning process.

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Our Business

For information relating to our products, sustainable performance and development, and power generation assets, refer to Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Our Business in our 2017 Annual Report.

Strategy and highlights

Our corporate strategy is focused on continuing to transform the company into a more profitable and sustainable organization over the long run, one that we believe can generate consistent value for shareholders through a competitive portfolio of manufacturing assets and a solid presence in long-term growth markets. This includes, on the one hand, a gradual and profitable retreat from paper grades and, on the other, using our strong financial position to act on opportunities to diversify and grow. In addition, we believe in returning excess capital over time to our shareholders. Our strategy is based on maximizing value generation from paper, growing in pulp and wood products, integrating our pulp into value-added quality tissue, and investing in product innovation, while maintaining a disciplined approach to capital allocation.

Maximizing value generation from paper

Our paper products (newsprint and specialty papers) remain an important part of our ongoing business, generating cash to help finance our strategy to diversify and grow. In order to remain competitive in the demand-challenged markets that our paper operations face, we strive to consistently:

• maintain a stringent focus on controlling costs and optimizing our diversified asset base;

• manage production and inventory levels; and

• focus production at our most profitable and lower-cost facilities and machines.

Growing in pulp and wood products

We believe in taking an opportunistic approach to strategic initiatives, pursuing only those that reduce our cost position, improve our product diversification, provide synergies, or position us to expand into markets that benefit from long-term growth. We believe that our market pulp and wood products segments are aligned with these criteria, and are therefore critical to our transformation strategy. Opportunities to diversify and grow may arise in a number of ways, including:

• spending capital on equipment reliability, and improving fiber yields and productivity, to increase production and lower costs;

• investing selectively in organic expansions; and

• pursuing opportunistic strategic acquisitions.

Integrating our pulp into value-added quality tissue

Consistent with our overall business transformation strategy, we entered the tissue market in 2015 with the announcement of our plans to build a greenfield tissue facility at our Calhoun site and to acquire Atlas Tissue. These significant steps supported our belief in adding value through the integration of our market pulp, particularly as paper demand continues its steady decline. In addition, we believe that the tissue business will provide a more stable source of revenue and profitability.

Our tissue operations are almost entirely supplied from our pulp mills, creating synergies and minimizing risks associated with cyclical market pulp pricing. For our Calhoun tissue facility, pulp production is directly transferred as slush pulp into the tissue operation, reducing process, energy, handling, and logistics costs.

Equipped with three modern converting lines sized specifically for the tissue machine, we sell converted products from the Calhoun tissue facility, targeting the fast growing premium private-label markets of the U.S.

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Since 2011, we have completed a number of strategic initiatives, leading to a relative shift in our business away from our structurally-challenged paper operations (comprised of newsprint and specialty papers) into markets with long-term growth potential (comprised of market pulp, tissue and wood products), as illustrated below.

⁽¹⁾  For a reconciliation of net income (loss) including noncontrolling interests to earnings before interest expense, income taxes, and depreciation and amortization, or “EBITDA,” and adjusted EBITDA, see “Reconciliations” below.

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Investing in product innovation

Partnering with others, we are investing in research and development to identify new technologies that use wood fiber in products of the future. We recently announced an investment in a pilot project, which will be hosted at our Thunder Bay pulp and paper mill. The project will focus on developing new ways to efficiently produce and commercialize innovative bio-chemicals derived from wood. In 2014, we announced our participation in Performance BioFilaments Inc., a joint venture focused on the development of commercial applications for cellulose filaments, a new biomaterial that holds the potential to make a variety of products stronger, lighter, more flexible and more durable, while leveraging a sustainable and renewable resource.

Disciplined approach to capital allocation

We make capital management a priority. To maintain our strong financial position and continued financial flexibility, we:

• spend our capital in a disciplined, strategic and focused manner, concentrating on our most competitive sites;

• explore value-creating opportunities to divest idled, non-core or sub-optimized operations;

• maintain debt leverage and financial liquidity that over time are sufficient to support the evolution of our transformation strategy;

• from time to time, based on market conditions, may seek to retire, repay or refinance our outstanding indebtedness with a view to reducing costs and enhancing our financial flexibility; and

• return excess capital over time to our shareholders through dividends and share repurchases.

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Our transformation since 2011 is summarized below:

⁽¹⁾  By acquiring Fibrek Inc., our market pulp capacity increased by over 70%.

⁽²⁾  The installed steam turbine at our Thunder Bay pulp and paper mill maximizes our local woodlands, sawmill, pulp and paper, and energy operations by fully utilizing forest-based biomass to produce green electricity.

⁽³⁾  With the acquisition of Atlas Tissue, we gained an immediate position in the North American consumer tissue market and access to a customer base to accelerate the sale and distribution of our Calhoun tissue production.

⁽⁴⁾  Incremental pulp capacity from the pulp digester serves in part to supply slush pulp to our new Calhoun tissue machine.

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Reconciliations

The table below shows the reconciliation of net income (loss) including noncontrolling interests to EBITDA and adjusted EBITDA, which are not financial measures recognized under generally accepted accounting principles, or “GAAP,” for the year ended December 31, 2011. For more information on the calculation and reasons we include these measures, see note 1 under “Results of Operations – Consolidated Results – Selected Annual Financial Information” below.

Year ended December 31, 2011	Market Pulp		Tissue		Wood Products			Newsprint		Specialty Papers		Segment Total		Corporate and Other			Total
(Unaudited, in millions)
Net income (loss) including noncontrolling interests	$	91	$	—	$	(25	)	$	89	$	122	$	277	$	(232	)	$	45
Interest expense		—		—		—			—		—		—		95			95
Income tax provision		—		—		—			—		—		—		19			19
Depreciation and amortization		30		—		33			73		84		220		—			220
EBITDA	$	121	$	—	$	8		$	162	$	206	$	497	$	(118	)	$	379
Foreign exchange loss		—		—		—			—		—		—		21			21
Severance costs		—		—		—			—		—		—		12			12
Closure costs, impairment and other related charges		—		—		—			—		—		—		46			46
Inventory write-downs related to closures		—		—		—			—		—		—		3			3
Net gain on disposition of assets		—		—		—			—		—		—		(3	)		(3	)
Non-operating pension and other postretirement benefit costs		—		—		—			—		—		—		8			8
Acquisition-related costs		—		—		—			—		—		—		5			5
Other expense, net		—		—		—			—		—		—		27			27
Adjusted EBITDA	$	121	$	—	$	8		$	162	$	206	$	497	$	1		$	498

The table below shows the reconciliation of net income (loss) including noncontrolling interests to EBITDA, and adjusted EBITDA, which are not financial measures recognized under GAAP, for the 12 months ended September 30, 2018. For more information on the calculation and reasons we include these measures, see note 1 under “Results of Operations – Consolidated Results – Selected Annual Financial Information” below.

12 months ended September 30, 2018	Market Pulp		Tissue			Wood Products		Newsprint		Specialty Papers		Segment Total		Corporate and Other			Total
(Unaudited, in millions)
Net income (loss) including noncontrolling interests	$	168	$	(23	)	$	234	$	40	$	10	$	429	$	(215	)	$	214
Interest expense		—		—			—		—		—		—		49			49
Income tax provision		—		—			—		—		—		—		132			132
Depreciation and amortization		29		12			31		66		47		185		27			212
EBITDA	$	197	$	(11	)	$	265	$	106	$	57	$	614	$	(7	)	$	607
Foreign exchange loss		—		—			—		—		—		—		3			3
Closure costs, impairment and other related charges		—		—			—		—		—		—		3			3
Reversal of inventory write-downs related to closures		—		—			—		—		—		—		(1	)		(1	)
Start-up costs		—		—			—		—		—		—		17			17
Net gain on disposition of assets		—		—			—		—		—		—		(17	)		(17	)
Non-operating pension and other postretirement benefit credits		—		—			—		—		—		—		(39	)		(39	)
Other income, net		—		—			—		—		—		—		(2	)		(2	)
Adjusted EBITDA	$	197	$	(11	)	$	265	$	106	$	57	$	614	$	(43	)	$	571

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Third Quarter Overview

In the first quarter of 2018, we changed our presentation of operating income in accordance with Financial Accounting Standards Board Accounting Standards Update 2017-07, to present only the service cost component of net periodic pension cost and net periodic other postretirement benefit (or “OPEB”) cost in operating expenses (together with other employee compensation costs arising during the period). The other components of the net periodic pension cost and net periodic OPEB cost (or “Non-operating pension and OPEB costs”), recorded under “corporate and other,” are reported separately outside any subtotal of operating income. Prior period amounts have been reclassified to conform to the 2018 presentation. See Item 1. Financial Statements – Note 1. Organization and Basis of Presentation – New accounting pronouncements adopted – ASU 2017-07 “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” for more information.

Three months ended September 30, 2018 vs. September 30, 2017

Our operating income was $135 million in the quarter, compared to $46 million in the third quarter of 2017. Excluding special items, we also generated operating income of $135 million, compared to $66 million in the year-ago period. Special items are described below.

Our net income in the quarter was $117 million, or $1.25 per diluted share, compared to $24 million, or $0.26 per share, in the year-ago period. Our net income in the quarter, excluding special items, was $96 million, or $1.03 per diluted share, compared to $31 million, or $0.34 per share, in the year-ago period.

Three Months Ended September 30, 2018	Operating Income (Loss)		Net Income (Loss)			EPS
(Unaudited, in millions, except per share amounts)
GAAP, as reported	$	135	$	117		$	1.25
Adjustments for special items:
Non-operating pension and other postretirement benefit credits		—		(13	)		(0.14	)
Other income, net		—		(14	)		(0.15	)
Income tax effect of special items		—		6			0.07
Adjusted for special items (1)	$	135	$	96		$	1.03

Three Months Ended September 30, 2017	Operating Income (Loss)			Net Income (Loss)			EPS
(Unaudited, in millions, except per share amounts)
GAAP, as reported	$	46		$	24		$	0.26
Adjustments for special items:
Foreign exchange gain		—			(7	)		(0.08	)
Closure costs, impairment and other related charges		8			8			0.09
Inventory write-downs related to closures		11			11			0.12
Start-up costs		3			3			0.03
Net gain on disposition of assets		(2	)		(2	)		(0.02	)
Non-operating pension and other postretirement benefit credits		—			(2	)		(0.02	)
Other expense, net		—			1			0.01
Income tax effect of special items		—			(5	)		(0.05	)
Adjusted for special items (1)	$	66		$	31		$	0.34

⁽¹⁾  Operating income (loss), net income (loss) and net income (loss) per share (or “EPS”), in each case as adjusted for special items, are not financial measures recognized under U.S. GAAP. We calculate operating income (loss), as adjusted for special items, as operating income (loss) from our Consolidated Statements of Operations, adjusted for items such as closure costs, impairment and other related charges, inventory write-downs and reversals of inventory write-downs related to closures, start-up costs, gains and losses on disposition of assets, and other charges or credits that are excluded from our segment’s performance from GAAP operating income (loss). We calculate net income (loss), as adjusted for special items, as net income (loss) from our Consolidated Statements of Operations, adjusted for the same special items applied to operating income (loss), in addition to foreign exchange gains and losses, non-

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operating pension and OPEB costs and credits, other income (expense), net, and the income tax effect of the special items. EPS, as adjusted for special items, is calculated as net income (loss), as adjusted for special items, per diluted share. We believe that using these non-GAAP measures is useful because they are consistent with the indicators management uses internally to measure the Company’s performance, and it allows the reader to more easily compare our operations and financial performance from period to period. Operating income (loss), net income (loss) and EPS, in each case as adjusted for special items, are internal measures, and therefore may not be comparable to those of other companies. These non-GAAP measures should not be viewed as substitutes to financial measures determined under GAAP.

Nine months ended September 30, 2018 vs. September 30, 2017

Our operating income was$304 millionin the first nine months of the year, compared to a loss of$11 millionin the year-ago period. Excluding special items, wegeneratedoperating income of$308 million, compared to$109 millionin the year-ago period. Special items are described below.

Our net income in the first nine months of the year was$199 million, or$2.14per diluted share, compared to a net loss of$97 million, or$1.07per share in the year-ago period. Our net income in the period, excluding special items, was$179 million, or$1.92per diluted share, compared to a net loss, excluding special items, of$2 million, or$0.02per share, in the year-ago period.

Nine Months Ended September 30, 2018	Operating Income (Loss)			Net Income (Loss)			EPS
(Unaudited, in millions, except per share amounts)
GAAP, as reported	$	304		$	199		$	2.14
Adjustments for special items:
Foreign exchange loss		—			2			0.02
Closure costs, impairment and other related charges		1			1			0.01
Reversal of inventory write-downs related to closures		(1	)		(1	)		(0.01	)
Start-up costs		8			8			0.09
Net gain on disposition of assets		(4	)		(4	)		(0.04	)
Non-operating pension and other postretirement benefit credits		—			(38	)		(0.41	)
Other income, net		—			(6	)		(0.07	)
Income tax effect of special items		—			18			0.19
Adjusted for special items (1)	$	308		$	179		$	1.92

Nine Months Ended September 30, 2017	Operating Income (Loss)			Net Income (Loss)			EPS
(Unaudited, in millions, except per share amounts)
GAAP, as reported	$	(11	)	$	(97	)	$	(1.07	)
Adjustments for special items:
Foreign exchange gain		—			(10	)		(0.11	)
Closure costs, impairment and other related charges		80			80			0.89
Inventory write-downs related to closures		24			24			0.26
Start-up costs		18			18			0.20
Net gain on disposition of assets		(2	)		(2	)		(0.02	)
Non-operating pension and other postretirement benefit credits		—			(6	)		(0.07	)
Other income, net		—			(1	)		(0.01	)
Income tax effect of special items		—			(8	)		(0.09	)
Adjusted for special items (1)	$	109		$	(2	)	$	(0.02	)

⁽¹⁾  Operating income (loss), net income (loss) and EPS, in each case as adjusted for special items, are non-GAAP financial measures. For more information on the calculation and reasons we include these measures, see note 1 under “Overview – Third Quarter Overview”above.

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RESULTSOF OPERATIONS

Consolidated Results

Selected financial information

	Three Months Ended   September 30,						Nine Months Ended   September 30,
(Unaudited, in millions, except per share amounts)	2018			2017			2018			2017
Sales	$	974		$	885		$	2,824		$	2,615
Operating income (loss) per segment:
Market pulp		57			19			131			42
Tissue		(10	)		(3	)		(21	)		(4	)
Wood products		45			64			177			129
Newsprint		32			(6	)		46			(17	)
Specialty papers		26			7			23			4
Segment total		150			81			356			154
Corporate and other		(15	)		(35	)		(52	)		(165	)
Operating income (loss)		135			46			304			(11	)
Net income (loss) attributable to Resolute Forest Products Inc.		117			24			199			(97	)
Net income (loss) per common share attributable to Resolute Forest Products Inc. common shareholders:
Basic	$	1.28		$	0.27		$	2.18		$	(1.07	)
Diluted		1.25			0.26			2.14			(1.07	)
Adjusted EBITDA (1)	$	189		$	118		$	469		$	262

(Unaudited, in millions)	September 30,    2018		December 31,    2017
Cash and cash equivalents	$	72	$	6
Total assets		4,145		4,147

⁽¹⁾ EBITDA and adjusted EBITDA are not financial measures recognized under GAAP. EBITDA is calculated as net income (loss) including noncontrolling interests from the Consolidated Statements of Operations, adjusted for interest expense, income taxes, and depreciation and amortization. Adjusted EBITDA means EBITDA, excluding special items, such as foreign exchange gains and losses, severance costs, closure costs, impairment and other related charges, inventory write-downs and reversals of inventory write-downs related to closures, start-up costs, gains and losses on disposition of assets, non-operating pension and OPEB costs and credits, acquisition-related costs, and other charges or credits. We believe that using non-GAAP measures such as EBITDA and adjusted EBITDA is useful because they are consistent with the indicators management uses internally to measure the Company’s performance and it allows the reader to more easily compare our operations and financial performance from period to period. EBITDA and adjusted EBITDA are internal measures, and therefore may not be comparable to those of other companies. These non-GAAP measures should not be viewed as substitutes to financial measures determined under GAAP.

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	Three Months Ended   September 30,						Nine Months Ended   September 30,
(Unaudited, in millions)	2018			2017			2018			2017
Net income (loss) including noncontrolling interests	$	117		$	26		$	199		$	(93	)
Interest expense		12			13			36			36
Income tax provision		33			15			111			63
Depreciation and amortization		54			52			161			153
EBITDA	$	216		$	106		$	507		$	159
Foreign exchange (gain) loss		—			(7	)		2			(10	)
Closure costs, impairment and other related charges		—			8			1			80
Inventory write-downs (reversal) related to closures		—			11			(1	)		24
Start-up costs		—			3			8			18
Net gain on disposition of assets		—			(2	)		(4	)		(2	)
Non-operating pension and other postretirement benefit credits		(13	)		(2	)		(38	)		(6	)
Other (income) expense, net		(14	)		1			(6	)		(1	)
Adjusted EBITDA	$	189		$	118		$	469		$	262

The operating results of our Calhoun tissue operations, previously recorded under “corporate and other,” have been recorded in our tissue segment since April 1, 2018.

Three months ended September 30, 2018 vs. September 30, 2017

Operating income variance analysis

Sales

Sales increased by $89 million, or 10%, compared to the year-ago period, to $974 million. Including restructuring initiatives, sales volume had an unfavorable impact of $59 million, mainly reflecting a decline in shipments of 44,000 short tons (40,000 metric tons) in specialty papers resulting from the capacity reduction initiatives taken in 2017, and 86 million board feet in wood products. Pricing was up across all segments, contributing to a $134 million increase in sales. The average transaction price increased 23% for newsprint, 21% for market pulp, 12% for specialty papers, and 11% for wood products. The inclusion of our Calhoun tissue operations’ results in our tissue segment increased sales by $15 million.

Cost of sales, excluding depreciation, amortization and distribution costs

Cost of sales, excluding depreciation, amortization and distribution costs, which we refer to as “COS”, was unchanged in the quarter. Restructuring initiatives reduced COS by $34 million, including the elimination of $10 million in fixed manufacturing

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costs. After removing the lower volume, the COS related to Calhoun’s tissue operations, and the effects of the Canadian dollar fluctuation and restructuring initiatives, manufacturing costs increased by $33 million, reflecting:

• higher log costs ($13 million), including higher market-based stumpage fees and diesel fuel expense;

• higher maintenance costs ($12 million), in part due to planned repairs at certain newsprint mills;

• unfavorable recycled fiber prices ($10 million); and

• unfavorable labor expense ($7 million), mostly due to higher compensation, including variable compensation expense accruals related to the Company’s performance;

partly offset by write-downs of mill stores and other supplies incurred in the year-ago period ($11 million), primarily as a result of the permanent closure of two paper machines at Calhoun at the end of the third quarter of 2017.

Distribution costs

After removing the distribution costs related to Calhoun’s tissue operations and the effects of lower volume, restructuring initiatives, and the Canadian dollar fluctuation, distribution costs rose by $14 million in the quarter, mainly due to higher truck and rail car rates, higher fuel surcharges, and an increase in the average length of haul.

Closure costs, impairment and other related charges

See the corresponding variance analysis under “Corporate and Other” below.

Net income variance analysis

Non-operating pension and other postretirement benefit credits

We recorded non-operating pension and OPEB credits of $13 million in the quarter, compared to $2 million in the year-ago period. The increase compared to the year-ago period is due in part to lower amortization of actuarial losses for our U.S. pension plan, which became predominantly inactive at year-end in 2017, resulting in a longer amortization period.

Income taxes

We recorded an income tax provision of $33 million in the quarter, on income before income taxes of $150 million, compared to an expected income tax provision of $31 million based on the U.S. federal statutory income tax rate of 21%. The difference reflects mainly foreign tax rate differences ($35 million), including a $28 million income tax provision attributable to the global intangible low-taxed income (or “GILTI”) inclusion, partly offset by a $32 million valuation allowance reversal related to our U.S. operations where we recognize a valuation allowance against virtually all of our net deferred income tax assets.

In the third quarter of 2017, we recorded an income tax provision of $15 million, on income before income taxes of $41 million, compared to an expected income tax provision of $9 million based on the U.S. federal statutory income tax rate of 21%. The difference reflects mostly a $19 million valuation allowance related to our U.S. operations where we recognized a valuation allowance against all of our net deferred income tax assets, and the change in U.S. federal tax rate ($5 million), partially offset by foreign exchange items ($8 million), and foreign tax rate differences ($7 million).

On December 22, 2017, the Tax Cuts and Jobs Act (or the “TCJA”) was enacted into law which, among other changes, reduced the U.S. federal statutory income tax rate from 35% to 21%, and introduced the GILTI regime, the base erosion anti-abuse tax, and the foreign-derived intangible income deduction. The enactment of the TCJA resulted in an income tax provision attributable to the GILTI inclusion, before valuation allowance, with no other impact on our results of operations. The impacts of the TCJA on our 2017 financial results remain provisional and unchanged as of September 30, 2018. See Item 1 – Financial Statements – Note 10. Income Taxes – Tax Cuts and Jobs Act for more information.

40

Nine months ended September 30, 2018 vs. September 30, 2017

Operating income (loss) variance analysis

Sales

Sales rose by $209 million, or 8%, compared to the year-ago period, to $2,824 million. Including restructuring initiatives, sales volume had an unfavorable impact of $215 million, reflecting decreases of 203,000 short tons (184,000 metric tons) in shipments of specialty papers, and 109,000 metric tons in newsprint, mainly as a result of the 2017 capacity reduction initiatives. Sales volume in wood products also decreased, down 10%, due in part to shipping constraints in the first quarter of 2018, while market pulp shipments were up 4%. Pricing had a $393 million favorable impact on sales, improving across almost all grades. The average transaction price increased 24% for wood products, 20% for market pulp, 16% for newsprint, and 7% for specialty papers. The inclusion of our Calhoun tissue operations’ results in our tissue segment resulted in a $29 million increase in sales.

Cost of sales, excluding depreciation, amortization and distribution costs

COS was $64 million lower in the period. Restructuring initiatives reduced COS by $170 million, including the elimination of $52 million in fixed manufacturing costs. After removing the lower volume, the COS related to Calhoun’s tissue operations, and the effects of the Canadian dollar fluctuation and restructuring initiatives, manufacturing costs increased by $63 million, reflecting:

• unfavorable maintenance costs ($29 million), in part due to planned repairs at certain newsprint mills;

• higher log costs ($24 million), including higher market-based stumpage fees and diesel fuel expense;

• higher labor expense ($17 million), partly due to increased compensation, including variable compensation expense accruals related to the Company’s performance;

• unfavorable recycled fiber prices ($13 million);

• unfavorable power and steam costs ($10 million), largely related to unusual weather conditions in 2018;

• higher chemical costs ($7 million), mostly price-related; and

• unfavorable fiber usage ($5 million);

partly offset by:

• write-downs of mill stores and other supplies incurred in the year-ago period ($24 million), primarily as a result of the permanent closure of two paper machines at Calhoun, a paper machine at Catawba (South Carolina) at the end of the second quarter of 2017, and our Mokpo (South Korea) paper mill in the first quarter of 2017;

• lower external wood chip prices ($10 million);

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• higher start-up costs incurred in the year-ago period, related to the Calhoun tissue manufacturing and converting facility ($7 million); and

• higher internal hydroelectric generation ($6 million), due to capital programs on certain water wheels in the year-ago period.

Distribution costs

After removing the distribution costs related to Calhoun’s tissue operations and the effects of lower volume, restructuring initiatives and the Canadian dollar fluctuation, distribution costs were $48 million greater in 2018, largely due to higher truck and rail car rates, higher fuel surcharges, and an increase in the average length of haul.

Depreciation and amortization

Depreciation and amortization was $8 million greater in the period, mainly explained by an increase in depreciation of costs associated with the Calhoun tissue manufacturing and converting facility.

Closure costs, impairment and other related charges

See the corresponding variance analysis under “Corporate and Other” below.

Net income (loss) variance analysis

Non-operating pension and other postretirement benefit credits

We recorded non-operating pension and OPEB credits of $38 million in the period, compared to $6 million in the prior year. The increase compared to 2017 is primarily due to higher expected return on plan assets, and lower amortization of actuarial losses for our U.S. pension plan, which became predominantly inactive at year-end in 2017, resulting in a longer amortization period.

Income taxes

We recorded an income tax provision of $111 million in the period, on income before income taxes of $310 million, compared to an expected income tax provision of $65 million based on the U.S. federal statutory income tax rate of 21%. The difference reflects mainly foreign tax rate differences ($72 million), including a $53 million income tax provision attributable to the GILTI inclusion, and foreign exchange items ($12 million), partly offset by a $40 million valuation allowance reversal related to our U.S. operations where we recognize a valuation allowance against virtually all of our net deferred income tax assets.

In the first nine months of 2017, we recorded an income tax provision of $63 million, on a loss before income taxes of $30 million, compared to an expected income tax benefit of $6 million based on the U.S. federal statutory income tax rate of 21%. The difference reflects a $94 million valuation allowance, primarily related to our U.S. operations where we recognized a valuation allowance against all of our net deferred income tax assets, and a $12 million decrease to our deferred income tax assets due to the enactment of a lower foreign income tax rate, offset in part by state and foreign tax rate differences ($22 million), foreign exchange items ($9 million), and the change in U.S. federal tax rate ($5 million).

Segment Earnings

We manage our business based on the products we manufacture. Accordingly, our reportable segments correspond to our principal product lines: market pulp, tissue, wood products, newsprint, and specialty papers.

We do not allocate any of the income or loss items following “operating income (loss)” in our Consolidated Statements of Operations to our segments because those items are reviewed separately by management. Similarly, we do not allocate to the segments: closure costs, impairment and other related charges; inventory write-downs and reversals of inventory write-downs related to closures; start-up costs; gains and losses on disposition of assets; as well as other discretionary charges or credits.

We allocate depreciation and amortization expense to our segments, although the related fixed assets and amortizable intangible assets are not allocated to segment assets. Additionally, all SG&A are allocated to our segments, with the exception of certain discretionary charges and credits, which we present under “corporate and other.”

42

MARKET PULP

Highlights

	Three Months Ended   September 30,				Nine Months Ended   September 30,
(Unaudited, in millions, except where otherwise stated)	2018		2017		2018		2017
Sales	$	288	$	227	$	809	$	649
Operating income (1)		57		19		131		42
EBITDA (2)		64		27		153		66
(In thousands of metric tons)
Shipments		367		348		1,082		1,037
Downtime		26		20		54		67

	September 30,
(Unaudited, in thousands of metric tons)	2018		2017
Finished goods inventory		116		100

⁽¹⁾  Net income including noncontrolling interests is equal to operating income in this segment.

⁽²⁾  EBITDA, a non-GAAP financial measure, is reconciled below. For more information on the calculation and reasons we include this measure, see note 1 under “Results of Operations – Consolidated Results – Selected Financial Information” above.

	Three Months Ended   September 30,				Nine Months Ended   September 30,
(Unaudited, in millions)	2018		2017		2018		2017
Net income including noncontrolling interests	$	57	$	19	$	131	$	42
Depreciation and amortization		7		8		22		24
EBITDA		64		27		153		66

Industry trends

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World demand for chemical pulp grew by 2.2% in the first nine months of the year compared to the year-ago period, including an increase of 5.6% in China, and 3.4% in Western Europe, partly offset by a decrease of 5.1% in North America. World capacity grew by 5.4% over the same period.

World demand for softwood pulp fell by 1.5% in the first nine months of the year compared to the year-ago period. This reflects decreases in shipments to North America, Western Europe, and China of 3.4%, 1.4%, and 1.0%, respectively. The operating rate was 89%, a decrease of 5% from the year-ago period.

In the same period, demand for hardwood pulp was up by 4.9%, with shipments to China and Western Europe up by 9.8% and 6.6%, respectively, while North America was down by 7.9%. The operating rate was 88%, a decrease of 2% from the year-ago period. The operating rates do not fully reflect the wave of recurring industry production challenges and general supply disruptions which have affected global pulp markets.

Three months ended September 30, 2018 vs. September 30, 2017

Operating income variance analysis

Sales

Sales were $61 million higher, or 27%, to $288 million in the quarter. The increase in the average transaction price of $134 per metric ton reflects higher market prices across all grades. Despite the extended outage at Saint-Félicien, required for the mill’s strategic investment plan, shipments were 19,000 metric tons higher as a result of increased productivity, the timing of scheduled outages, and favorable recycled bleached kraft (or “RBK”) market conditions.

Cost of sales, excluding depreciation, amortization and distribution costs

Manufacturing costs increased by $16 million after adjusting for the effects of higher volume and the Canadian dollar fluctuation, reflecting an increase in recycled fiber prices ($10 million) and higher maintenance and labor costs ($4 million).

Distribution costs

After removing the effect of higher volume, distribution costs were $4 million greater in the quarter, mostly due to higher truck and rail car rates, and higher fuel surcharges.

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Nine months ended September 30, 2018 vs. September 30, 2017

Operating income variance analysis

Sales

Sales were $160 million greater, or 25%, to $809 million, in the first nine months of the year. The average transaction price rose by $122 per metric ton, reflecting higher market prices across all grades. Shipments were 45,000 metric tons higher as a result of increased productivity, the timing and length of scheduled outages, and higher shipments of RBK as a result of favorable market conditions.

Cost of sales, excluding depreciation, amortization and distribution costs

Manufacturing costs increased by $40 million after adjusting for the effects of higher volume and the Canadian dollar fluctuation, reflecting:

• higher recycled fiber prices ($13 million);

• higher maintenance costs ($9 million);

• unfavorable labor expense ($9 million);

• unfavorable fiber usage ($4 million);

• unfavorable steam costs ($4 million), due in part to higher natural gas prices; and

• higher chemical costs ($3 million);

partly offset by lower wood chip prices ($7 million).

Distribution costs

After removing the effect of higher volume, distribution costs rose by $12 million in the current year, reflecting higher truck and rail car rates, higher fuel surcharges, and an increase in the average length of haul.

Saint-Félicien pulp mill strategic investment plan

During the second quarter of 2018, we announced a strategic investment plan for our Saint-Félicien pulp mill, aimed at improving costs, increasing production capacity, and reducing greenhouse gas emissions from the use of fossil fuels by 20%. A

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significant portion of the project has been completed on schedule during an extended outage. The mill restarted production in mid-October and is operating at full capacity. Additional phases of the project are expected to be completed by the end of 2019. This total investment of approximately $45 million will increase annual production by 27,000 metric tons, once completed.

46

TISSUE

Highlights

	Three Months Ended   September 30,						Nine Months Ended   September 30,
(Unaudited, in millions, except where otherwise stated)	2018			2017			2018			2017
Sales	$	38		$	21		$	95		$	61
Operating loss (1)		(10	)		(3	)		(21	)		(4	)
EBITDA (2)		(5	)		(1	)		(10	)		—
(In thousands of short tons)
Shipments (3) (4)		23			14			61			40
Downtime		—			1			1			1

	September 30,
(Unaudited, in thousands of short tons)	2018		2017
Finished goods inventory (3)		7		8

⁽¹⁾  Net loss including noncontrolling interests is equal to operating loss in this segment.

⁽²⁾  EBITDA, a non-GAAP financial measure, is reconciled below. For more information on the calculation and reasons we include this measure, see note 1 under “Results of Operations – Consolidated Results – Selected Financial Information” above.

⁽³⁾  Tissue converted products, which are measured in cases, are converted to short tons.

⁽⁴⁾  The conversion ratio to short tons for tissue converted products was revised in the fourth quarter of 2017. Prior period data has been adjusted for comparative purposes.

	Three Months Ended   September 30,						Nine Months Ended   September 30,
(Unaudited, in millions)	2018			2017			2018			2017
Net loss including noncontrolling interests	$	(10	)	$	(3	)	$	(21	)	$	(4	)
Depreciation and amortization		5			2			11			4
EBITDA		(5	)		(1	)		(10	)		—

The operating results of our Calhoun tissue operations, previously recorded under “corporate and other,” have been recorded in our tissue segment since April 1, 2018.

47

Industry trends

In the first nine months of the year, total tissue consumption in the U.S. grew by 2.5% compared to the same period last year. U.S. converted tissue products shipments also increased by 2.0%, as a result of an increase in away-from-home shipments, up 3.1%, and at-home shipments, up 1.5%. U.S. parent roll production showed a growth of 1.7% from the year-ago period. Tissue capacity also increased by 1.6%, contributing to a 94% average industry operating rate, unchanged from the year-ago period.

Three months ended September 30, 2018 vs. September 30, 2017

Operating loss variance analysis

Sales

Sales were $17 million higher, or 81%, to $38 million in the quarter, reflecting an increase in shipments of 9,000 short tons (8,000 metric tons), attributable to the inclusion of Calhoun’s results in our tissue segment starting April 1, 2018. The average transaction price also increased, up $93 per short ton, as a result of favorable product mix.

48

Nine months ended September 30, 2018 vs. September 30, 2017

Operating loss variance analysis

Sales

Sales were $34 million greater, or 56%, to $95 million in the first nine months of the year, reflecting an increase in shipments of 21,000 short tons (19,000 metric tons), mainly attributable to the inclusion of Calhoun’s results in our tissue segment.

Cost of sales, excluding depreciation, amortization and distribution costs

After removing the effects of the higher volume and the COS related to Calhoun’s operations, our manufacturing costs increased by $2 million in the period, mainly due to higher maintenance costs ($1 million), resulting from the timing of annual outages.

Depreciation and amortization

Depreciation and amortization was $7 million higher this year, all attributable to the inclusion of Calhoun’s results in our tissue segment.

49

WOOD PRODUCTS

Highlights

	Three Months Ended   September 30,				Nine Months Ended   September 30,
(Unaudited, in millions, except where otherwise stated)	2018		2017		2018		2017
Sales	$	203	$	219	$	666	$	593
Operating income (1)		45		64		177		129
EBITDA (2)		53		73		200		154
(In millions board feet)
Shipments (3)		445		531		1,394		1,545
Downtime		44		32		93		112

	September 30,
(Unaudited, in millions board feet)	2018		2017
Finished goods inventory (3)		162		122

⁽¹⁾  Net income including noncontrolling interests is equal to operating income in this segment.

⁽²⁾  EBITDA, a non-GAAP financial measure, is reconciled below. For more information on the calculation and reasons we include this measure, see note 1 under “Results of Operations – Consolidated Results – Selected Financial Information” above.

⁽³⁾  Includes wood pellets measured by mass, converted to board feet using a density-based conversion ratio.

	Three Months Ended   September 30,				Nine Months Ended   September 30,
(Unaudited, in millions)	2018		2017		2018		2017
Net income including noncontrolling interests	$	45	$	64	$	177	$	129
Depreciation and amortization		8		9		23		25
EBITDA		53		73		200		154

Industry trends

Average U.S. housing starts were 1.3 million on a seasonally-adjusted basis in the first nine months of 2018, up 6.2% from the same period last year. Single-family starts, which consume larger lumber volumes per start, rose by 5.7%, while multi-family starts increased by 7.3%.

50

Three months ended September 30, 2018 vs. September 30, 2017

Operating income variance analysis

Sales

Sales were $16 million lower, or 7%, to $203 million in the quarter. The average transaction price increased by $44 per thousand board feet, or 11%. Shipments decreased by 86 million board feet, largely reflecting:

• higher sales in the year-ago period resulting from supply disruptions, mostly related to forest fires in British Columbia; and

• higher offer in the current period, mainly from western Canadian producers, due to the unwinding of inventory built in the first quarter of 2018, following shipping constraints.

Accordingly, finished goods inventory increased by 40 million board feet compared to the year-ago period.

Cost of sales, excluding depreciation, amortization and distribution costs

After adjusting for the effects of the Canadian dollar fluctuation and lower volume, manufacturing costs increased by $23 million, reflecting:

• higher log costs ($13 million), including higher market-based stumpage fees and diesel fuel expense;

• lower internal wood chip selling prices ($6 million); and

• unfavorable maintenance and labor costs ($4 million).

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Nine months ended September 30, 2018 vs. September 30, 2017

Operating income variance analysis

Sales

Sales were $73 million higher, or 12%, to $666 million in the first nine months of the year. The average transaction price rose by $94 per thousand board feet, or 24%, largely due to supply constraints in the first half of the year, and the imposition of trade barriers in the U.S. Shipments, however, were lower by 151 million board feet, reflecting:

• shipping constraints in the first quarter of 2018;

• the recent weakening of lumber market conditions;

• the sale of our Saint-Hilarion (Quebec) sawmill and the consolidation of our two sawmills at Senneterre in the third quarter of 2017; and

• lower productivity.

Cost of sales, excluding depreciation, amortization and distribution costs

After adjusting for the effects of the Canadian dollar fluctuation and lower volume, manufacturing costs increased by $44 million, reflecting:

• higher log costs ($24 million), including higher market-based stumpage fees and diesel fuel expense;

• lower internal wood chip selling prices ($13 million); and

• unfavorable maintenance and labor costs ($7 million).

Distribution costs

After removing the effect of lower volume, distribution costs increased by $6 million in the current year, mostly reflecting higher rail car rates and an increase in U.S. shipments.

52

NEWSPRINT

Highlights

	Three Months Ended   September 30,					Nine Months Ended   September 30,
(Unaudited, in millions, except where otherwise stated)	2018		2017			2018		2017
Sales	$	232	$	199		$	660	$	626
Operating income (loss) (1)		32		(6	)		46		(17	)
EBITDA (2)		48		10			95		32
(In thousands of metric tons)
Shipments		371		388			1,119		1,228
Downtime		4		35			18		52

	September 30,
(Unaudited, in thousands of metric tons)	2018		2017
Finished goods inventory		96		98

⁽¹⁾ Net income (loss) including noncontrolling interests is equal to operating income (loss) in this segment.

⁽²⁾ EBITDA, a non-GAAP financial measure, is reconciled below. For more information on the calculation and reasons we include this measure, see note 1 under “Results of Operations – Consolidated Results – Selected Financial Information” above.

	Three Months Ended   September 30,					Nine Months Ended   September 30,
(Unaudited, in millions)	2018		2017			2018		2017
Net income (loss) including noncontrolling interests	$	32	$	(6	)	$	46	$	(17	)
Depreciation and amortization		16		16			49		49
EBITDA		48		10			95		32

Industry trends

North American demand for newsprint declined by 11.4% in the first nine months of the year compared to the same period last year, driven by a reduction in demand from newspaper publishers, down by nearly 14%. Demand from commercial printers also decreased, dropping by 6.7%. North American shipment-to-capacity ratio rose to 95%, up from 93% in the year-ago period.

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Global demand for newsprint was down by 8.7% in the first nine months of the year compared to the same period last year, with Western Europe down 8.8%, and Asia 8.2%. Despite the drop, the global operating rate rose to 90%, as a result of major global capacity reductions in the second half of 2017.

Three months ended September 30, 2018 vs. September 30, 2017

Operating income (loss) variance analysis

Sales

Newsprint sales increased by $33 million, or 17%, to $232 million in the third quarter of the year, reflecting an increase of $118 per metric ton in the average transaction price, as price increases were realized in both North American and export markets.Shipments decreased by 17,000 metric tons, mainly resulting from:

• the paper machine closures at Calhoun; and

• timing of export sales;

partly offset by 31,000 metric tons of additional downtime taken in the year-ago period, primarily at our Baie-Comeau (Quebec) and Augusta (Georgia) mills, due to softer market conditions.

Compared to the third quarter of 2017, our international shipments rose by 4%, while our domestic shipments dropped by 9%. Domestic shipments represented 61% of total newsprint shipments in the quarter, compared to 64% in the year-ago period.

Cost of sales, excluding depreciation, amortization and distribution costs

COS was $3 million lower in the quarter. Restructuring initiatives reduced COS by $14 million, including the elimination of $4 million in fixed manufacturing costs. After removing the effects of the Canadian dollar fluctuation, higher volume, and the restructuring initiatives, manufacturing costs increased by $10 million, mainly reflecting higher maintenance and labor costs ($11 million) mostly related to planned repairs, offset in part by lower wood chip prices ($3 million).

Distribution costs

After removing the effects of restructuring initiatives and the Canadian dollar fluctuation, distribution costs rose by $3 million in the quarter, mostly attributable to higher truck and rail car rates, higher fuel surcharges, and an increase in international shipments.

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Nine months ended September 30, 2018 vs. September 30, 2017

Operating income (loss) variance analysis

Sales

Newsprint sales increased by $34 million, or 5%, to $660 million in the first nine months of the year, reflecting an increase of $80 per metric ton in the average transaction price, as price increases were realized in both North American and export markets.Shipments, however, were lower by 109,000 metric tons, or 9%, mostly due to:

• the paper machine closures at Calhoun;

• the permanent closure of our Mokpo paper mill; and

• timing of export sales;

partly offset by 34,000 metric tons of additional downtime taken in the year-ago period primarily at our Baie-Comeau and Augusta mills.

Compared to the first nine months of 2017, our domestic shipments fell by 13%, and our international shipments by 2%. Domestic shipments represented 60% of total newsprint shipments in the period, down by 3% from the year-ago period.

Cost of sales, excluding depreciation, amortization and distribution costs

COS was $32 million lower in the period. Restructuring initiatives reduced COS by $60 million, including the elimination of $18 million in fixed manufacturing costs. After removing the effects of the Canadian dollar fluctuation, higher volume, and the restructuring initiatives, manufacturing costs increased by $19 million compared to the same period last year, reflecting:

• higher maintenance costs ($13 million), mostly related to planned repairs;

• unfavorable power and steam costs ($5 million);

• unfavorable labor expense ($4 million); and

• higher chemical costs ($2 million);

partly offset by lower wood chip prices ($8 million).

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Distribution costs

After removing the effect of restructuring initiatives, distribution costs increased by $11 million in 2018, mainly due to higher truck and rail car rates, higher fuel surcharges, and an increase in the average length of haul.

56

SPECIALTY PAPERS

Highlights

	Three Months Ended   September 30,				Nine Months Ended   September 30,
(Unaudited, in millions, except where otherwise stated)	2018		2017		2018		2017
Sales	$	213	$	219	$	594	$	686
Operating income (1)		26		7		23		4
EBITDA (2)		38		18		59		38
(In thousands of short tons)
Shipments		289		333		843		1,046
Downtime		1		5		16		28

	September 30,
(Unaudited, in thousands of short tons)	2018		2017
Finished goods inventory		78		86

⁽¹⁾ Net income including noncontrolling interests is equal to operating income in this segment.

⁽²⁾ EBITDA, a non-GAAP financial measure, is reconciled below. For more information on the calculation and reasons we include this measure, see note 1 under “Results of Operations – Consolidated Results – Selected Financial Information” above.

	Three Months Ended   September 30,				Nine Months Ended   September 30,
(Unaudited, in millions)	2018		2017		2018		2017
Net income including noncontrolling interests	$	26	$	7	$	23	$	4
Depreciation and amortization		12		11		36		34
EBITDA		38		18		59		38

Industry trends

North American demand for uncoated mechanical papers was down by 6.9% in the first nine months of 2018 compared to the year-ago period. Lower demand for standard papers drove this decline, decreasing by 9.8%, while the demand forsupercalendered (or “SC”) grades was down only 1.4%. The operating rate increased to 91%, compared to 90% in the year-ago period.

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North American coated mechanical paper demand was down by 6.8% in the first nine months of 2018 compared to the year-ago period. Industry production, however, was significantly lower, down by 244,000 short tons (221,000 metric tons), or 13.6%, while imports rose by 68,000 short tons (62,000 metric tons), or 23.1%. Operating rates in North America decreased to 94% in the first nine months of 2018, down from 95% in 2017.

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Three months ended September 30, 2018 vs. September 30, 2017

Operating income variance analysis

Sales

Specialty paper sales decreased by $6 million, or 3%, to $213 million in the third quarter of the year. The overall transaction price was $78 per short ton higher, reflecting price increases across all grades. Shipments were 44,000 short tons (40,000 metric tons) lower, or 13%, largely due to the permanent closure of two paper machines at Calhoun, and one paper machine at Catawba.

Cost of sales, excluding depreciation, amortization and distribution costs

COS was $25 million lower in the quarter. Restructuring initiatives reduced COS by $20 million, including the elimination of $6 million in fixed manufacturing costs. After removing the effects of the Canadian dollar fluctuation, the lower volume, and the restructuring initiatives, manufacturing costs improved by $2 million in the quarter, primarily due to:

• lower wood chip prices ($3 million); and

• higher internal hydroelectric generation ($3 million), due to capital programs on certain water wheels in the year-ago period;

partly offset by higher chemical costs ($2 million).

Distribution costs

After removing the effects of lower volume and restructuring initiatives, distribution costs increased by $4 million in the current period, reflecting higher truck and rail car rates, higher fuel surcharges, and an increase in the average length of haul.

59

Nine months ended September 30, 2018 vs. September 30, 2017

Operating income variance analysis

Sales

Specialty paper sales were lower by $92 million, or 13%, to $594 million in the first nine months of the year. The overall transaction price rose by $49 per short ton, reflecting price increases across all grades. Shipments decreased by 203,000 short tons (184,000 metric tons), or 19%, largely due to the permanent closure of two paper machines at Calhoun and one paper machine at Catawba.

Cost of sales, excluding depreciation, amortization and distribution costs

COS was $113 million lower in the period. Restructuring initiatives reduced COS by $110 million, including the elimination of $34 million in fixed manufacturing costs. After removing the effects of the Canadian dollar fluctuation, the lower volume, and the restructuring initiatives, manufacturing costs improved by $6 million in the period, primarily due to:

• lower wood chip prices ($8 million); and

• higher internal hydroelectric generation ($6 million), due to capital programs on certain water wheels in 2017;

partly offset by:

• unfavorable power and steam costs ($3 million); and

• higher maintenance and labor costs ($3 million).

Distribution costs

After removing the effects of lower volume, restructuring initiatives and the Canadian dollar fluctuation, distribution costs rose by $17 million in the period, mostly due to higher truck and rail car rates, higher fuel surcharges, and an increase in the average length of haul.

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CORPORATE AND OTHER

Highlights

	Three Months Ended   September 30,						Nine Months Ended   September 30,
(Unaudited, in millions)	2018			2017			2018			2017
Cost of sales, excluding depreciation, amortization and distribution costs	$	(1	)	$	(15	)	$	(10	)	$	(46	)
Depreciation and amortization		(6	)		(6	)		(20	)		(17	)
Selling, general and administrative expenses		(8	)		(8	)		(25	)		(24	)
Closure costs, impairment and other related charges		—			(8	)		(1	)		(80	)
Net gain on disposition of assets		—			2			4			2
Operating loss	$	(15	)	$	(35	)	$	(52	)	$	(165	)
Interest expense		(12	)		(13	)		(36	)		(36	)
Non-operating pension and other postretirement benefit credits		13			2			38			6
Other income, net		14			6			4			11
Income tax provision		(33	)		(15	)		(111	)		(63	)
Net loss including noncontrolling interests	$	(33	)	$	(55	)	$	(157	)	$	(247	)

The table below shows the reconciliation of net loss including noncontrolling interests to EBITDA and adjusted EBITDA, which are non-GAAP financial measures. For more information on the calculation and reasons we include these measures, see note 1 under “Results of Operations – Consolidated Results – Selected Financial Information” above.

	Three Months Ended   September 30,						Nine Months Ended   September 30,
(Unaudited, in millions)	2018			2017			2018			2017
Net loss including noncontrolling interests	$	(33	)	$	(55	)	$	(157	)	$	(247	)
Interest expense		12			13			36			36
Income tax provision		33			15			111			63
Depreciation and amortization		6			6			20			17
EBITDA	$	18		$	(21	)	$	10		$	(131	)
Foreign exchange (gain) loss		—			(7	)		2			(10	)
Closure costs, impairment and other related charges		—			8			1			80
Inventory write-downs (reversal) related to closures		—			11			(1	)		24
Start-up costs		—			3			8			18
Net gain on disposition of assets		—			(2	)		(4	)		(2	)
Non-operating pension and other postretirement benefit credits		(13	)		(2	)		(38	)		(6	)
Other (income) expense, net		(14	)		1			(6	)		(1	)
Adjusted EBITDA	$	(9	)	$	(9	)	$	(28	)	$	(28	)

Three months ended September 30, 2018 vs. September 30, 2017

Cost of sales, excluding depreciation, amortization and distribution costs

We incurred COS of $1 million in the quarter. This compares to COS of $15 million in the year-ago period, which was comprised of:

• write-downs of mill stores and other supplies ($11 million), primarily related to the permanent closure of two paper machines at Calhoun;

• start-up costs ($2 million) for the Calhoun tissue manufacturing and converting facility; and

61

• asset preservation costs ($2 million), primarily related to the indefinite idling of our Thorold (Ontario) paper mill in the first quarter of 2017.

Closure costs, impairment and other related charges

We recorded no closure costs, impairment and other related charges in the quarter. In the same period last year, we recorded closure costs, impairment and other related charges of $8 million, which included accelerated depreciation ($6 million) and severance and other closure-related costs ($2 million) associated with the permanent closure of two paper machines at Calhoun.

Nine months ended September 30, 2018 vs. September 30, 2017

Cost of sales, excluding depreciation, amortization and distribution costs

COS of $10 million in the first nine months of 2018 was primarily comprised of:

• start-up costs ($7 million) for the Calhoun tissue manufacturing and converting facility; and

• asset preservation costs ($4 million), primarily related to the indefinite idling of our Thorold paper mill and our permanently closed Fort Frances (Ontario) mill.

This compares to COS of $46 million in the year-ago period, including:

• write-downs of mill stores and other supplies ($24 million), primarily related to the permanent closures of two paper machines at Calhoun, a paper machine at our Catawba paper mill, and our Mokpo paper mill;

• start-up costs ($14 million) for the Calhoun tissue manufacturing and converting facility; and

• asset preservation costs ($8 million), primarily related to the indefinite idling of our Thorold paper mill and our permanently closed Fort Frances mill.

Depreciation and amortization

Depreciation and amortization was $3 million greater in the first nine months of 2018, mainly explained by additional costs associated with the implementation of our integrated business management software.

Closure costs, impairment and other related charges

We incurred closure costs, impairment and other related charges of $1 million in the first nine months of the year, compared to $80 million in the year-ago period. The prior year included:

• a long-lived asset impairment charge related to our Coosa Pines (Alabama) pulp mill ($55 million);

• a long-lived asset impairment charge ($5 million), and severance and other closure-related costs ($4 million) in connection with the permanent closure of a paper machine at our Catawba paper mill;

• accelerated depreciation ($6 million) and severance and other closure-related costs ($2 million) associated with the permanent closure of two paper machines at Calhoun; and

• severance and other costs related to the permanent closure of our paper mill at Mokpo ($7 million).

62

LIQUIDITYAND CAPITAL RESOURCES

Capital Resources

We rely on cash and cash equivalents, net cash provided by operations, and our revolving credit facilities to fund our operations, make pension contributions, and finance our working capital, capital expenditures, and cash duty deposits. In addition, from time to time we may use available cash to reduce debt. As of September 30, 2018, we had cash and cash equivalents of $72 million and availability of $582 million under our revolving credit facilities.

Based on our current projections, we expect to have sufficient financial resources available to finance our business plan, make pension contributions, meet working capital and cash duty deposit requirements, and maintain an appropriate level of capital spending.

Credit facilities

Interest rates under our credit facilities are based on an index, plus a spread, which fluctuates based on availability and the Company’s leverage ratio, or the capitalization ratio, as applicable. Improvement in these ratios reduced the spread over the index by 0.25% during the third quarter of 2018. For more information on our credit facilities’ interest rates, see Part II – Item 8. Financial Statements and Supplementary Data – Note 13. Long-Term Debt – Debt instruments in our 2017 Annual Report.

Flow of Funds

Summary of cash flows

A summary of cash flows for the nine months ended September 30, 2018 and 2017, was as follows:

	Nine Months Ended   September 30,
(Unaudited, in millions)	2018			2017
Net cash provided by operating activities	$	351		$	99
Net cash used in investing activities		(147	)		(168	)
Net cash (used in) provided by financing activities		(145	)		69
Effect of exchange rate changes on cash and cash equivalents, and restricted cash		(1	)		6
Net increase in cash and cash equivalents, and restricted cash	$	58		$	6

Nine months ended September 30, 2018 vs. September 30, 2017

Net cash provided by operating activities

We generated $351 million of cash from operating activities in the first nine months of 2018, compared to $99 million in the year-ago period. The increase is almost all attributable to higher profitability. The year-ago period also included higher timing-related pension contributions and cash closure costs in connection with the permanent closures of paper machines at our Catawba and Calhoun paper mills, as well as the permanent closure of our paper mill at Mokpo.

Net cash used in investing activities

We used $147 million of cash in investing activities in the current period, $21 million less compared to the year-ago period, reflecting:

• lower cash invested in fixed assets of $42 million, mainly due to the substantial completion of the tissue manufacturing and converting facility at Calhoun in the first quarter of 2017; and

• refunds of countervailing duty cash deposits on imports of SC paper to the U.S. of $25 million in the current year;

offset in part by higher countervailing and anti-dumping duty cash deposits of $44 million on imports of softwood lumber to the U.S.

63

Net cash (used in) provided by financing activities

We fully repaid our outstanding borrowings of $144 million under our revolving credit facilities in the first nine months of 2018. This compares to a net increase in borrowings of $70 million in the year-ago period primarily to support the completion of the Calhoun tissue project.

Asset divestitures

On August 29, 2018, we entered into a definitive asset purchase agreement to sell our RBK pulp mill at Fairmont (West Virginia). The sale closed on November 1, 2018, for total cash consideration of $62 million, subject to final working capital adjustments.

On October 2, 2018, we entered into a definitive asset purchase agreement to sell our paper and pulp mill at Catawba for total consideration of approximately $300 million, consisting of $260 million in cash, and the assumption of $40 million of liabilities, largely net pension benefit obligations, subject to customary closing adjustments. The sale is expected to close around year-end.

Special dividend

We announced a special cash dividend of $1.50 per share on November 1, 2018. The special dividend will be payable on December 20, 2018 to shareholders of record at the close of business on December 6, 2018.

Countervailing duty and anti-dumping investigations

Since October 15, 2015, we were required to pay cash deposits at a subsidy rate of 17.87% for estimated countervailing duties on our U.S. imports of SC paper produced at our Canadian mills. On March 21, 2018, Verso Corporation, the sole remaining U.S. SC paper petitioner, filed a request with the U.S. Department of Commerce (or “Commerce”) for a changed circumstances review to revoke the countervailing duty order, retroactive to August 3, 2015, and for Commerce to refund all countervailing duty deposits with interest. On May 8, 2018, Commerce announced the initiation of a changed circumstances review, and on July 6, 2018, Commerce signed the revocation order. As a result, we will receive a refund of all cash deposits made on our U.S. imports of SC paper produced at our Canadian mills, plus interest, and no further cash deposits are required going forward. Through September 30, 2018, cash deposits of $25 million were refunded. Remaining cash deposits to be refunded of $36 million, plus interest, are expected to be received during the fourth quarter of the year.

We have also been required to pay cash deposits for estimated countervailing duties and anti-dumping duties on our U.S. imports of softwood lumber produced at our Canadian sawmills, since April 28, 2017, and June 30, 2017, respectively. As of December 28, 2017, the rates for these estimated countervailing duties and anti-dumping duties were 14.7% and 3.2%, respectively. Based on these rates and our current operating parameters, the cash deposits could be as high as $80 million per year.

Additionally, from January 16, 2018 to May 15, 2018, we were required to make cash deposits at a preliminary subsidy rate of 4.42% for estimated countervailing duties on our U.S. imports of the uncoated groundwood (or “UGW”) paper produced at our Canadian mills, with the exception of SC paper, which was subject to distinct countervailing duties. The preliminary rate remained in effect until May 15, 2018. On March 13, 2018, Commerce also announced its preliminary determination in the UGW anti-dumping investigation, whereby it determined that we did not sell Canadian-origin UGW paper exported to the U.S. for less than fair market value during the relevant period (from July 1, 2016 to June 30, 2017). On August 29, 2018, the U.S. International Trade Commission determined that there was no material injury, nor threat of material injury, resulting from U.S. imports of Canadian-origin UGW paper, and that no countervailing duty or anti-dumping orders will be issued. As a result, we will receive a refund of all cash deposits made on our U.S. imports of UGW paper produced at our Canadian mills, plus interest, and no further cash deposits are required going forward. Through September 30, 2018, cash deposits to be refunded totaled $6 million.

See Item 1. Financial Statements – Note 11. Commitments and Contingencies – Legal matters – Countervailing duty and anti-dumping investigations on uncoated groundwood paper; Countervailing duty and anti-dumping investigations on softwood lumber; and Countervailing duty investigation on supercalendered paper for more information.

64

RESOLUTE FOREST PRODUCTS INC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information relating to quantitative and qualitative disclosures about market risk is disclosed in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our 2017 Annual Report. There have been no material changes in our exposure to market risk as previously disclosed in our 2017 Annual Report.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures:

We have evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a–15(e) and 15d–15(e) of the Securities Exchange Act of 1934, as of September 30, 2018. Based on that evaluation, the President and Chief Executive Officer and the Senior Vice President and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date in recording, processing, summarizing and timely reporting information required to be disclosed in our reports to the SEC.

(b) Changes in Internal Control over Financial Reporting:

In connection with the evaluation of internal control over financial reporting, there were no changes during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

65

RESOLUTE FOREST PRODUCTS INC.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In addition to the legal proceedings presented under Part I, Item 3, “Legal Proceedings,” in our 2017 Annual Report, see the description of our material pending legal proceedings in Note 11, “Commitments and Contingencies – Legal matters,” to our Consolidated Financial Statements, which is incorporated in this “Item 1 – Legal Proceedings” by reference.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this Form 10-Q, you should carefully consider the risk factors set forth under Part I, Item 1A, “Risk Factors” in our 2017 Annual Report, which could materially affect our business, financial condition or future results. There have been no material changes to the risk factors previously disclosed in our 2017 Annual Report.

66

RESOLUTE FOREST PRODUCTS INC.

ITEM 6. EXHIBITS

Exhibit No.	Description
31.1	Certification of President and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Senior Vice President and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of President and Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Senior Vice President and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**	XBRL Instance Document.
101.SCH**	XBRL Taxonomy Extension Schema Document.
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document.

** Interactive data files furnished with this Form 10-Q, which represent the following materials from this Form 10-Q formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Income (Loss), (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Changes in Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Unaudited Interim Consolidated Financial Statements.

67

RESOLUTE FOREST PRODUCTS INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

RESOLUTE FOREST PRODUCTS INC.
By	/s/ Jo-Ann Longworth
	Jo-Ann Longworth
	Senior Vice President and Chief Financial Officer
By	/s/ Hugues Dorban
	Hugues Dorban
	Vice President and Chief Accounting Officer

Date: November 9, 2018

68

EX-31.1

EXHIBIT 31.1

Certification

I, Yves Laflamme, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 30, 2018 of RESOLUTE FOREST PRODUCTS INC.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2018

/s/ Yves Laflamme

Yves Laflamme

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification

I, Jo-Ann Longworth, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 30, 2018 of RESOLUTE FOREST PRODUCTS INC.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2018

/s/ Jo-Ann Longworth

Jo-Ann Longworth

Senior Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certification

Pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of RESOLUTE FOREST PRODUCTS INC. (the “Company”), hereby certifies, to such officer’s knowledge, that the Company’s quarterly report on Form 10‑Q for the quarter ended September 30, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 9, 2018	/s/ Yves Laflamme
	Name: Yves Laflamme
	Title: President and Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Resolute Forest Products Inc. and will be retained by Resolute Forest Products Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

EXHIBIT 32.2

Certification

Pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of RESOLUTE FOREST PRODUCTS INC. (the “Company”), hereby certifies, to such officer’s knowledge, that the Company’s quarterly report on Form 10‑Q for the quarter ended September 30, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 9, 2018	/s/ Jo-Ann Longworth
	Name: Jo-Ann Longworth
	Title: Senior Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Resolute Forest Products Inc. and will be retained by Resolute Forest Products Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and is not being filed as part of the Report or as a separate disclosure document.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Oct. 31, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Entity Registrant Name	RESOLUTE FOREST PRODUCTS INC.
Entity Central Index Key	0001393066
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Trading Symbol	RFP
Entity Common Stock, Shares Outstanding		90,344,530
Entity Emerging Growth Company	false
Entity Small Business	false

XML

Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Statement [Abstract]
Sales		$ 974	$ 885	$ 2,824	$ 2,615
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		628	628	1,881	1,945
Depreciation and amortization		54	52	161	153
Distribution costs		117	110	356	328
Selling, general and administrative expenses		40	43	125	122
Closure costs, impairment and other related charges		0	8	1	80
Net gain on disposition of assets		0	2	4	2
Operating income (loss)	[1]	135	46	304	(11)
Interest expense		(12)	(13)	(36)	(36)
Non-operating pension and other postretirement benefit credits		13	2	38	6
Other income, net		14	6	4	11
Income (loss) before income taxes		150	41	310	(30)
Income tax provision		(33)	(15)	(111)	(63)
Net income (loss) including noncontrolling interests		117	26	199	(93)
Net income attributable to noncontrolling interests		0	(2)	0	(4)
Net income (loss) attributable to Resolute Forest Products Inc.		$ 117	$ 24	$ 199	$ (97)
Net income (loss) per share attributable to Resolute Forest Products Inc. common shareholders:
Basic (in dollars per share)		$ 1.28	$ 0.27	$ 2.18	$ (1.07)
Diluted (in dollars per share)		$ 1.25	$ 0.26	$ 2.14	$ (1.07)
Weighted-average number of Resolute Forest Products Inc. common shares outstanding:
Basic		91.3	90.5	91.3	90.4
Diluted		93.4	91.6	93.2	90.4

[1] In the first quarter of 2018, we changed our presentation of operating income in accordance with FASB ASU 2017-07, to present only the service cost component of net periodic pension cost and OPEB cost in operating expenses (together with other employee compensation costs arising during the period). The non-operating pension and OPEB costs, presented under “corporate and other,” are reported separately outside any subtotal of operating income. Prior period amounts have been reclassified to conform to the 2018 presentation. See Note 1. Organization and Basis of Presentation – New accounting pronouncements adopted – ASU 2017-07 “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” for more information.

XML

Consolidated Statements of Operations (Parenthetical)	9 Months Ended
	Sep. 30, 2018
Income Statement [Abstract]
Type of cost, good or service [Extensible List]	us-gaap:ShippingAndHandlingMember

XML

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income (loss) including noncontrolling interests	$ 117	$ 26	$ 199	$ (93)
Unamortized prior service credits
Change in unamortized prior service credits	(9)	(5)	(17)	(12)
Income tax provision	0	0	0	0
Change in unamortized prior service credits, net of tax	(9)	(5)	(17)	(12)
Unamortized actuarial losses
Change in unamortized actuarial losses	11	(2)	29	25
Income tax provision	(2)	(3)	(6)	(8)
Change in unamortized actuarial losses, net of tax	9	(5)	23	17
Foreign currency translation	0	1	0	1
Other comprehensive income (loss), net of tax	0	(9)	6	6
Comprehensive income (loss) including noncontrolling interests	117	17	205	(87)
Comprehensive income attributable to noncontrolling interests	0	(2)	0	(4)
Comprehensive income (loss) attributable to Resolute Forest Products Inc.	$ 117	$ 15	$ 205	$ (91)

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 72	$ 6
Accounts receivable, net:
Trade	368	399
Other	109	80
Inventories, net	511	526
Assets held for sale	242	0
Other current assets	45	33
Total current assets	1,347	1,044
Fixed assets, net	1,545	1,716
Amortizable intangible assets, net	62	65
Goodwill	81	81
Deferred income tax assets	924	1,076
Other assets	186	165
Total assets	4,145	4,147
Current liabilities:
Accounts payable and accrued liabilities	447	420
Current portion of long-term debt	1	1
Liabilities associated with assets held for sale	79	0
Total current liabilities	527	421
Long-term debt, net of current portion	644	788
Pension and other postretirement benefit obligations	1,090	1,257
Deferred income tax liabilities	1	13
Other liabilities	73	68
Total liabilities	2,335	2,547
Commitments and contingencies
Resolute Forest Products Inc. shareholders’ equity:
Common stock	0	0
Additional paid-in capital	3,798	3,793
Deficit	(1,095)	(1,294)
Accumulated other comprehensive loss	(774)	(780)
Treasury stock at cost	(120)	(120)
Total Resolute Forest Products Inc. shareholders’ equity	1,809	1,599
Noncontrolling interests	1	1
Total equity	1,810	1,600
Total liabilities and equity	$ 4,145	$ 4,147

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Accumulated depreciation	$ 1,452	$ 1,614
Accumulated amortization	$ 24	$ 21
Common stock, par value (per share)	$ 0.001	$ 0.001
Common stock, shares issued	118.3	118.2
Common stock, shares outstanding	90.3	90.2
Treasury stock, shares	28.0	28.0

XML

Consolidated Statements of Changes in Equity - USD ($) $ in Millions	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings (Deficit) [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]	Non-controlling Interests [Member]
Beginning balance at Dec. 31, 2016	$ 1,711	$ 0	$ 3,775	$ (1,207)	$ (755)	$ (120)	$ 18
Increase (Decrease) in Shareholders' Equity [Roll Forward]
Share-based compensation costs for equity-classified awards	8		8
Net income (loss)	(93)			(97)			4
Cumulative-effect adjustment upon deferred tax charge elimination	(3)			(3)
Other comprehensive income (loss), net of tax	6				6		0
Ending balance at Sep. 30, 2017	1,629	0	3,783	(1,307)	(749)	(120)	22
Beginning balance at Dec. 31, 2017	1,600	0	3,793	(1,294)	(780)	(120)	1
Increase (Decrease) in Shareholders' Equity [Roll Forward]
Share-based compensation costs for equity-classified awards	5		5
Net income (loss)	199			199
Stock unit awards vested net of shares forfeited for employee withholding taxes	0
Other comprehensive income (loss), net of tax	6				6		0
Ending balance at Sep. 30, 2018	$ 1,810	$ 0	$ 3,798	$ (1,095)	$ (774)	$ (120)	$ 1
Stock Transactions, Parenthetical Disclosures [Abstract]
Stock unit awards vested, net of shares forfeited for employee withholding taxes	100,000

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Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Net income (loss) including noncontrolling interests	$ 199	$ (93)
Adjustments to reconcile net income (loss) including noncontrolling interests to net cash provided by operating activities:
Share-based compensation	6	8
Depreciation and amortization	161	153
Closure costs, impairment and other related charges	0	66
(Reversal of) inventory write-downs related to closures	(1)	24
Deferred income taxes	106	60
Net pension contributions and other postretirement benefit payments	(112)	(92)
Net gain on disposition of assets	(4)	(2)
Loss (gain) on translation of foreign currency denominated deferred income taxes	28	(80)
(Gain) loss on translation of foreign currency denominated pension and other postretirement benefit obligations	(23)	65
Net planned major maintenance payments	(7)	(6)
Changes in working capital:
Accounts receivable	(6)	(6)
Inventories	(53)	(6)
Other current assets	(13)	(8)
Accounts payable and accrued liabilities	61	12
Other, net	9	4
Net cash provided by operating activities	351	99
Cash flows from investing activities:
Cash invested in fixed assets	(94)	(136)
Disposition of assets	2	3
Decrease (increase) in countervailing duty cash deposits on supercalendered paper, net	13	(17)
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber	(62)	(18)
Increase in countervailing duty cash deposits on uncoated groundwood paper	(6)	0
Net cash provided by (used in) investing activities	(147)	(168)
Cash flows from financing activities:
Net (repayments) borrowings under revolving credit facilities	(144)	70
Payments of debt	0	1
Payments of financing and credit facility fees	(1)	0
Net cash provided by (used in) financing activities	(145)	69
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	(1)	6
Net increase (decrease) in cash and cash equivalents, and restricted cash	58	6
Cash and cash equivalents, and restricted cash:
Beginning of period	49	73
End of period	107	79
Cash and cash equivalents, and restricted cash at period end:
Cash and cash equivalents	72	38
Restricted cash (included in “Other current assets” and “Other assets”)	$ 35	$ 41

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Consolidated Statements of Cash Flows (Parenthetical)	Sep. 30, 2018
Statement of Cash Flows [Abstract]
Restricted cash and cash equivalents, asset, statement of financial position [Extensible List]	us-gaap:PrepaidExpenseAndOtherAssetsCurrent us-gaap:OtherAssetsNoncurrent

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Organization and Basis of Presentation

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Basis of Presentation

Note 1. Organization and Basis of Presentation

Nature of operations

Resolute Forest Products Inc. (with its subsidiaries and affiliates, either individually or collectively, unless otherwise indicated, referred to as “Resolute Forest Products,” “we,” “our,” “us,” “Parent” or the “Company”) is incorporated in Delaware. We are a global leader in the forest products industry with a diverse range of products, including market pulp, tissue, wood products, newsprint and specialty papers, which are marketed in close to 70 countries. We own or operate some 40 manufacturing facilities, as well as power generation assets, in the United States and Canada.

Financial statements

Our interim consolidated financial statements and related notes (or the “Consolidated Financial Statements”) are unaudited and have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (or the “SEC”) for interim reporting. Under those rules, certain footnotes and other financial information that are normally required by U.S. generally accepted accounting principles may be condensed or omitted. In our opinion, all adjustments (consisting of normal recurring adjustments) necessary for the fair statement of the unaudited interim Consolidated Financial Statements have been made. All amounts are expressed in U.S. dollars, unless otherwise indicated. The results for the interim period ended September 30, 2018, are not necessarily indicative of the results to be expected for the full year. These unaudited interim Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 1, 2018. Certain prior period amounts in our footnotes have been reclassified to conform to the 2018 presentation.

New accounting pronouncements adopted

ASU 2014-09 “Revenue from Contracts from Customers”

Effective January 1, 2018, we adopted Accounting Standards Update (or “ASU”) 2014-09, “Revenue from Contracts from Customers,” issued by the Financial Accounting Standards Board (or the “FASB”), and the series of related accounting standard updates that followed (collectively, “Topic 606”). We utilized the modified retrospective method, which required the application of Topic 606 to: (i) all new revenue contracts entered into after January 1, 2018; and (ii) all existing revenue contracts as of January 1, 2018. The adoption of Topic 606 had no impact on our revenues, results of operations, or financial position. As a result of the implementation of Topic 606, our revenue recognition policy was updated as follows:

Revenue arises from contracts with customers in which the sale of goods is the main performance obligation. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when or as the performance obligation is satisfied, which is when (point in time) or as (over time) control of the promised good or service is transferred to the customer.

Revenue is measured at the amount to which we are expected to be entitled in exchange for transferring goods based on consideration specified in the contract with the customer. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that we collect from the customer, are excluded from revenue. When a contract with a customer includes variable consideration such as special pricing agreements and other volume-based incentives, revenue is recognized at the most likely amount based on sales forecasts, for which it is probable that a revenue reversal will not subsequently occur.

Revenue is recorded at a point in time when control over the goods transfers to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts with customers. Pulp, tissue, paper and wood products are delivered to our customers in the United States and Canada directly from our mills primarily by truck or rail. Pulp and paper products are delivered to our international customers primarily by ship. For sales where control transfers to the customer at the shipping point, revenue is recorded when the product leaves the facility, whereas for sales where control transfers at the destination, revenue is recorded when the product is delivered to the customer’s delivery site. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in “Distribution costs” in our Consolidated Statements of Operations.

Sales of our other products (green power produced from renewable sources, wood chips, and other wood-related products) are recognized when the products are delivered and are included in “Cost of sales, excluding depreciation, amortization and distribution costs” in our Consolidated Statements of Operations.

ASU 2016-01 “Recognition and Measurement of Financial Assets and Financial Liabilities”

In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. This update is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We adopted this ASU on January 1, 2018. The adoption of this accounting guidance did not impact our results of operations, financial position or cash flows.

ASU 2016-15 “Classification of Certain Cash Receipts and Cash Payments”

In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments,” which is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. All amendments to the guidance shall be adopted in the same period on a retrospective basis. We adopted this ASU on January 1, 2018. The adoption of this accounting guidance did not impact the presentation of our cash flows.

ASU 2016-18 “Restricted Cash”

In November 2016, the FASB issued ASU 2016-18, “Restricted Cash,” which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We adopted this ASU on January 1, 2018. Prior period amounts have been reclassified to conform to the 2018 presentation.

ASU 2017-05 “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets”

In February 2017, the FASB issued ASU 2017-05, “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets,” which clarifies the scope of Subtopic 610-20, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets” and adds guidance for partial sales of nonfinancial assets. This update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We adopted this ASU on January 1, 2018. The adoption of this accounting guidance did not impact our results of operations, financial position or cash flows.

ASU 2017-07 “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”

In March 2017, the FASB issued ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which requires employers that present a measure of operating income in their statements of earnings to disaggregate and present only the service cost component of net periodic pension cost and net periodic other postretirement benefit (or “OPEB”) cost in operating expenses (together with other employee compensation costs arising during the period). The other components of the net periodic pension cost and net periodic OPEB cost (or “Non-operating pension and OPEB costs”) are reported separately outside any subtotal of operating income. This update is effective retrospectively for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We adopted this ASU on January 1, 2018.

The effect of this ASU on our Consolidated Statements of Operations for the three months ended September 30, 2018 and 2017, was as follows:

	Three Months Ended September 30, 2018							Three Months Ended September 30, 2017
(Unaudited, in millions)	Before Accounting Standards Update		Effect of Change			As Reported		As Previously Reported		Effect of Change			As Adjusted
Cost of sales, excluding depreciation, amortization and distribution costs	$	615	$	13		$	628	$	624	$	4		$	628
Closure costs, impairment and other related charges		—		—			—		10		(2	)		8
Operating income		148		(13	)		135		48		(2	)		46
Non-operating pension and other postretirement benefit credits		—		13			13		—		2			2

The effect of this ASU on our Consolidated Statements of Operations for the nine months ended September 30, 2018 and 2017, was as follows:

	Nine Months Ended September 30, 2018							Nine Months Ended September 30, 2017
(Unaudited, in millions)	Before Accounting Standards Update		Effect of Change			As Reported		As Previously Reported			Effect of Change			As Adjusted
Cost of sales, excluding depreciation, amortization and distribution costs	$	1,842	$	39		$	1,881	$	1,936		$	9		$	1,945
Selling, general and administrative expenses		126		(1	)		125		123			(1	)		122
Closure costs, impairment and other related charges		1		—			1		82			(2	)		80
Operating income (loss)		342		(38	)		304		(5	)		(6	)		(11	)
Non-operating pension and other postretirement benefit credits		—		38			38		—			6			6

Accounting pronouncements not yet adopted

ASU 2016-02 “Leases”

In February 2016, the FASB issued ASU 2016-02, “Leases,” which requires lessees to recognize leases on the balance sheet while continuing to recognize expenses in the income statement 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. Enhanced disclosures will also be required to give financial statement users the ability to assess the amount, timing, and uncertainty of cash flows arising from leases.

We are currently in the process of evaluating our existing lease portfolio, which consists primarily of operating leases where we are the lessee. Upon adoption, we expect to recognize a liability and corresponding asset associated with in-scope leases. We are continuing our assessment and review of existing leases, which may identify other impacts, and are addressing necessary policy and process changes in preparation for adoption.

This ASU may either be adopted on a modified retrospective approach at the beginning of the earliest comparative period, or through a cumulative-effect adjustment at the adoption date. This update is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. We plan to adopt this standard on January 1, 2019, through a cumulative-effect adjustment at the adoption date.

ASU 2018-14 “Changes to the Disclosure Requirements for Defined Benefit Plans”

In August 2018, the FASB issued ASU 2018-14, “Changes to the Disclosure Requirements for Defined Benefit Plans,” which intends to add, remove, and clarify disclosure requirements related to defined benefit pension and OPEB plans. This update is effective for fiscal years ending after December 15, 2020, with early adoption permitted. We are still evaluating the impact of this standard on our consolidated financial statements.

ASU 2018-15 “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract”

In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted as of the beginning of an interim or annual reporting period. We are still evaluating the impact of this standard on our consolidated financial statements.

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Closure Costs, Impairment and Other Related Charges

9 Months Ended

Sep. 30, 2018

Restructuring and Related Activities [Abstract]

Closure Costs, Impairment and Other Related Charges

Note 2. Closure Costs, Impairment and Other Related Charges

Closure costs, impairment and other related charges were $1 million for the nine months ended September 30, 2018, and were comprised of the following for the three and nine months ended September 30, 2017:

(Unaudited, in millions)	Impairment of Assets		Accelerated Depreciation		Severance and Other Costs		Total
Pulp mill at Coosa Pines (Alabama) (1)
Third quarter	$	—	$	—	$	—	$	—
First nine months		55		—		—		55
Permanent closures
Paper machine at Catawba (South Carolina)
Third quarter		—		—		—		—
First nine months		5		—		4		9
Paper machines at Calhoun (Tennessee)
Third quarter		—		6		2		8
First nine months		—		6		2		8
Paper mill at Mokpo (South Korea)
Third quarter		—		—		—		—
First nine months		—		—		7		7
Other
Third quarter		—		—		—		—
First nine months		—		—		1		1
Total
Third quarter	$	—	$	6	$	2	$	8
First nine months		60		6		14		80

⁽¹⁾As a result of the continued deterioration of actual and projected cash flows, we recorded long-lived asset impairment charges of $55 million for the nine months ended September 30, 2017, to reduce the carrying value of the assets to their estimated fair value, which was determined using the market approach, by reference to market transaction prices for similar assets. The fair value measurement is considered a Level 3 measurement due to the significance of its unobservable inputs.

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Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Note 3. Accumulated Other Comprehensive Loss

The change in our accumulated other comprehensive loss by component (net of tax) for the nine months ended September 30, 2018, was as follows:

(Unaudited, in millions)	Unamortized Prior Service Credits			Unamortized Actuarial Losses			Foreign Currency Translation			Total
Balance as of December 31, 2017	$	52		$	(826	)	$	(6	)	$	(780	)
Other comprehensive (loss) income before reclassifications		(5	)		2			—			(3	)
Amounts reclassified from accumulated other comprehensive loss (1)		(12	)		21			—			9
Net current period other comprehensive (loss) income		(17	)		23			—			6
Balance as of September 30, 2018	$	35		$	(803	)	$	(6	)	$	(774	)

⁽¹⁾  See the table below for details about these reclassifications.

The reclassifications out of accumulated other comprehensive loss for the nine months ended September 30, 2018, were comprised of the following:

(Unaudited, in millions)	Amounts Reclassified From Accumulated Other Comprehensive Loss			Affected Line in the Consolidated Statements of Operations
Unamortized Prior Service Credits
Amortization of prior service credits	$	(12	)	Non-operating pension and other postretirement benefit credits (1)
		—		Income tax provision
	$	(12	)	Net of tax
Unamortized Actuarial Losses
Amortization of actuarial losses	$	26		Non-operating pension and other postretirement benefit credits (1)
Settlement loss		1		Non-operating pension and other postretirement benefit credits (1)
		(6	)	Income tax provision
	$	21		Net of tax
Total Reclassifications	$	9		Net of tax

⁽¹⁾  These items are included in the computation of net periodic benefit cost related to our pension and OPEB plans summarized in Note 9, “Employee Benefit Plans.”

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Net Income (Loss) Per Share

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

Note 4. Net Income (Loss) Per Share

The reconciliation of the basic and diluted net income (loss) per share for the three and nine months ended September 30, 2018 and 2017, was as follows:

	Three Months Ended   September 30,				Nine Months Ended   September 30,
(Unaudited, in millions, except per share amounts)	2018		2017		2018		2017
Numerator:
Net income (loss) attributable to Resolute Forest Products Inc.	$	117	$	24	$	199	$	(97	)
Denominator:
Basic weighted-average number of Resolute Forest Products Inc. common shares outstanding		91.3		90.5		91.3		90.4
Dilutive impact of nonvested stock unit awards		2.1		1.1		1.9		—
Diluted weighted-average number of Resolute Forest Products Inc. common shares outstanding		93.4		91.6		93.2		90.4
Net income (loss) per share attributable to Resolute Forest Products Inc. common shareholders:
Basic	$	1.28	$	0.27	$	2.18	$	(1.07	)
Diluted		1.25		0.26		2.14		(1.07	)

The weighted-average number of outstanding stock options and nonvested equity-classified restricted stock units, deferred stock units and performance stock units (collectively, “stock unit awards”) that were excluded from the calculation of diluted net income (loss) per share, as their impact would have been antidilutive, for the three and nine months ended September 30, 2018 and 2017, was as follows:

	Three Months Ended   September 30,		Nine Months Ended   September 30,
(Unaudited, in millions)	2018	2017	2018	2017
Stock options	0.9	1.4	1.3	1.4
Stock unit awards	—	—	—	4.3

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Inventories, Net

9 Months Ended

Sep. 30, 2018

Inventory Disclosure [Abstract]

Inventories, Net

Note 5. Inventories, Net

Inventories, net as of September 30, 2018 and December 31, 2017, were comprised of the following:

(Unaudited, in millions)	September 30, 2018		December 31, 2017
Raw materials	$	99	$	108
Work in process		39		38
Finished goods		190		175
Mill stores and other supplies		183		205
	$	511	$	526

During the three months ended September 30, 2017, we recorded charges for write-downs of mill stores and other supplies of $11 million, primarily related to the permanent closure of two paper machines at Calhoun. During the nine months ended September 30, 2017, we also recorded charges of $13 million for write-downs of mill stores and other supplies primarily related to the permanent closures of a paper machine at our Catawba paper mill and our Mokpo paper mill. These charges were included in “Cost of sales, excluding depreciation, amortization and distribution costs” in our Consolidated Statements of Operations.

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Assets Held for Sale, Net

9 Months Ended

Sep. 30, 2018

Assets Held for Sale, Net [Abstract]

Assets Held for Sale, Net

Note 6. Assets Held for Sale, Net

As of September 30, 2018, we held for sale our recycled bleached kraft (or “RBK”) pulp mill at Fairmont (West Virginia) and our paper and pulp mill at Catawba.

On August 29, 2018, we entered into a definitive asset purchase agreement to sell our RBK pulp mill at Fairmont. The sale closed on November 1, 2018, for total cash consideration of $62 million, subject to final working capital adjustments, resulting in a net gain on disposition of assets of approximately $40 million, which will be recorded in the fourth quarter of 2018.

On October 2, 2018, we entered into a definitive asset purchase agreement to sell our paper and pulp mill at Catawba for total consideration of approximately $300 million, consisting of $260 million in cash, and the assumption of $40 million of liabilities, largely net pension benefit obligations, subject to customary closing adjustments.

Assets held for sale, net as of September 30, 2018 and December 31, 2017, were comprised of the following:

(Unaudited, in millions)	September 30, 2018		December 31, 2017
Assets held for sale:
Accounts receivable, net	$	45	$	—
Inventories, net		70		—
Other current assets		5		—
Fixed assets, net		121		—
Other assets		1		—
Total assets held for sale		242		—
Liabilities associated with assets held for sale:
Accounts payable and accrued liabilities		40		—
Pension and other postretirement benefit obligations		34		—
Other liabilities		5		—
Total liabilities associated with assets held for sale		79		—
	$	163	$	—

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Accounts Payable and Accrued Liabilities

9 Months Ended

Sep. 30, 2018

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities

Note 7. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities as of September 30, 2018 and December 31, 2017, were comprised of the following:

(Unaudited, in millions)	September 30, 2018		December 31, 2017
Trade accounts payable	$	331	$	306
Payroll, bonuses and severance payable		55		55
Accrued interest		14		5
Pension and other postretirement benefit obligations		18		18
Income and other taxes payable		10		10
Environmental liabilities		2		2
Other		17		24
	$	447	$	420

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Long-Term Debt

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Long-Term Debt

Note 8. Long-Term Debt

Overview

Long-term debt, including current portion, as of September 30, 2018 and December 31, 2017, was comprised of the following:

(Unaudited, in millions)	September 30, 2018			December 31, 2017
5.875% senior unsecured notes due 2023:
Principal amount	$	600		$	600
Deferred financing costs		(5	)		(5	)
Unamortized discount		(3	)		(3	)
Total senior unsecured notes due 2023		592			592
Term loan due 2025		46			46
Borrowings under revolving credit facilities		—			144
Capital lease obligation		7			7
Total debt		645			789
Less: Current portion of long-term debt		(1	)		(1	)
Long-term debt, net of current portion	$	644		$	788

2023 Notes

We issued $600 million in aggregate principal amount of 5.875% senior unsecured notes due 2023 (or the “2023 Notes”) on May 8, 2013. Upon their issuance, the notes were recorded at their fair value of $594 million, which reflected a discount of $6 million that is being amortized to “Interest expense” in our Consolidated Statements of Operations using the interest method over the term of the notes, resulting in an effective interest rate of 6%. Interest on the notes is payable semi-annually on May 15 and November 15, until their maturity date of May 15, 2023. In connection with the issuance of the notes, we incurred financing costs of approximately $9 million, which were deferred and recorded as a reduction of the notes. These deferred financing costs are being amortized to “Interest expense” in our Consolidated Statements of Operations using the interest method over the term of the notes. The fair value of the 2023 Notes (Level 1) was $615 million and $622 million as of September 30, 2018 and December 31, 2017, respectively.

Senior Secured Credit Facility

On September 7, 2016, we entered into a senior secured credit facility (or the “Senior Secured Credit Facility”) for up to $185 million. The Senior Secured Credit Facility provides a term loan of $46 million with a maturity date of September 7, 2025 (the “Term Loan”), and a revolving credit facility of up to $139 million with a maturity date of September 7, 2022 (the “Revolving Credit Facility”). As of September 30, 2018, we had $139 million of availability under the Revolving Credit Facility. The fair values of the Term Loan and Revolving Credit Facility (Level 2) approximated their carrying values as of both September 30, 2018 and December 31, 2017.

ABL Credit Facility

On May 22, 2015, we entered into a senior secured asset-based revolving credit facility (the “ABL Credit Facility”), with an aggregate lender commitment of up to $600 million at any time outstanding, subject to borrowing base availability based on specified advance rates, eligibility criteria and customary reserves. The ABL Credit Facility will mature on May 22, 2020. As of September 30, 2018, we had $443 million of availability under the ABL Credit Facility, net of $53 million of ordinary course letters of credit outstanding. The fair value of the ABL Credit Facility (Level 2) approximated its carrying value as of both September 30, 2018 and December 31, 2017.

Capital lease obligation

We have a capital lease obligation for a warehouse with a maturity date of December 1, 2027, which can be renewed for 20 years at our option. Minimum monthly payments are determined by an escalatory price clause.

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Employee Benefit Plans

9 Months Ended

Sep. 30, 2018

Retirement Benefits [Abstract]

Employee Benefit Plans

Note 9. Employee Benefit Plans

Pension and other postretirement benefit plans

The components of net periodic benefit cost relating to our pension and OPEB plans for the three and nine months ended September 30, 2018 and 2017, were as follows:

Pension Plans:

	Three Months Ended   September 30,						Nine Months Ended   September 30,
(Unaudited, in millions)	2018			2017			2018			2017
Interest cost	$	46		$	51		$	142		$	149
Expected return on plan assets		(65	)		(66	)		(199	)		(190	)
Amortization of actuarial losses		9			14			29			42
Amortization of prior service credits		—			—			(1	)		—
Non-operating pension (credits) costs		(10	)		(1	)		(29	)		1
Service cost		5			6			14			15
Net periodic benefit (credits) costs before special events		(5	)		5			(15	)		16
Curtailment, settlement and other losses		—			3			1			4
	$	(5	)	$	8		$	(14	)	$	20

OPEB Plans:

	Three Months Ended   September 30,						Nine Months Ended   September 30,
(Unaudited, in millions)	2018			2017			2018			2017
Interest cost	$	1		$	2		$	4		$	5
Amortization of actuarial gains		—			(1	)		(3	)		(4	)
Amortization of prior service credits		(4	)		(4	)		(11	)		(11	)
Non-operating other postretirement benefit credits		(3	)		(3	)		(10	)		(10	)
Service cost		—			—			1			1
Net periodic benefit credits before special events		(3	)		(3	)		(9	)		(9	)
Curtailment gain		—			(1	)		—			(1	)
	$	(3	)	$	(4	)	$	(9	)	$	(10	)

Defined contribution plans

Our expense for the defined contribution plans totaled $5 million for both the three months ended September 30, 2018 and 2017, and $15 million and $16 million for the nine months ended September 30, 2018 and 2017, respectively.

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Income Taxes

9 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Note 10. Income Taxes

Tax Cuts and Jobs Act

On December 22, 2017, the Tax Cuts and Jobs Act (or the “TCJA”) was enacted into law which, among other changes, reduced the U.S. federal statutory income tax rate from 35% to 21%, and introduced the global intangible low-taxed income (or “GILTI”) regime, the base erosion anti-abuse tax, and the foreign-derived intangible income deduction.

During the three and nine months ended September 30, 2018, the enactment of the TCJA resulted in an income tax provision attributable to the GILTI inclusion of $28 million and $53 million, respectively, before valuation allowance, with no other impact on our results of operations. After having evaluated the impact of the TCJA on the reinvestment of foreign earnings, we have maintained the position that such earnings continue to be permanently reinvested. Accordingly, no provision was recorded for undistributed foreign earnings.

The impacts of the TCJA on our 2017 financial results remain provisional and unchanged as of September 30, 2018. We have yet to adopt an accounting policy for the treatment of GILTI, and accordingly, no deferred tax amounts have been recorded.

The final impact of the TCJA may differ due to, among other things, changes in interpretations, the issuance of additional legislative guidance and clarification, and actions we may take as a result of the TCJA. We will recognize any adjustments to our provisional estimates in the reporting period they are determined, up to a period not to exceed one year from the date of enactment.

Effective income tax rate reconciliation

The income tax provision attributable to income (loss) before income taxes differs from the amounts computed by applying the U.S. federal statutory income tax rate of 21% for the three and nine months ended September 30, 2018 and 2017, as a result of the following:

	Three Months Ended   September 30,						Nine Months Ended   September 30,
(Unaudited, in millions)	2018			2017			2018			2017
Income (loss) before income taxes	$	150		$	41		$	310		$	(30	)
Income tax provision:
Expected income tax (provision) benefit		(31	)		(9	)		(65	)		6
Changes resulting from:
U.S. federal tax rate change reconciliation		—			(5	)		—			5
Valuation allowance (1)		32			(19	)		40			(94	)
Enactment of change in foreign tax rate		—			—			—			(12	)
Foreign exchange		2			8			(12	)		9
State income taxes, net of federal income tax benefit		(1	)		1			1			7
Foreign tax rate differences (2)		(35	)		7			(72	)		15
Other, net		—			2			(3	)		1
	$	(33	)	$	(15	)	$	(111	)	$	(63	)

⁽¹⁾  Relates to our U.S. operations for the three and nine months ended September 30, 2018, and the three months ended September 30, 2017, and primarily to our U.S. operations for the nine months ended September 30, 2017.

⁽²⁾  Includes an income tax provision attributable to the GILTI inclusion of $28 million and $53 million, before valuation allowance, for the three months and nine months ended September 30, 2018, respectively.

Deferred tax charge

On January 1, 2017, we adopted ASU 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory,” which eliminates the deferral of the tax effects of intra-entity asset transfers other than inventory until the transferred assets are sold to a third party or recovered through use. As a result, a cumulative-effect adjustment of $3 million was recorded to “Deficit” in our Consolidated Balance Sheet as of January 1, 2017.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 11. Commitments and Contingencies

Legal matters

We become involved in various legal proceedings and other disputes in the normal course of business, including matters related to contracts, commercial and trade disputes, taxes, environmental issues, activist damages, employment and workers’ compensation claims, grievances, human rights complaints, pension and benefit plans and obligations, health and safety, financial reporting and disclosure obligations, corporate governance, antitrust, First Nations claims, and other matters. Although the final outcome is subject to many variables and cannot be predicted with any degree of certainty, we regularly assess the status of the matters and establish provisions (including legal costs expected to be incurred) when we believe an adverse outcome is probable, and the amount can be reasonably estimated. Except as described below and for claims that cannot be assessed due to their preliminary nature, we believe that the ultimate disposition of these matters outstanding or pending as of September 30, 2018, will not have a material adverse effect on our Consolidated Financial Statements.

Countervailing duty and anti-dumping investigations on uncoated groundwood paper

On August 9, 2017, countervailing duty and anti-dumping petitions were filed with the U.S. Department of Commerce (or “Commerce”) and the U.S. International Trade Commission (or “ITC”) by a U.S. uncoated groundwood (or “UGW”) paper producer requesting that the U.S. government impose countervailing and anti-dumping duties on Canadian-origin UGW paper exported to the U.S. One of our subsidiaries was identified in the petitions as being a Canadian exporting producer of UGW paper to the U.S. and was selected as a mandatory respondent to be investigated by Commerce in both the countervailing duty and anti-dumping investigations.

On January 9, 2018, Commerce announced its preliminary determination in its countervailing duty investigation on Canadian-origin UGW paper exported to the U.S. As a result, beginning January 16, 2018, we were required to pay cash deposits to the U.S. Customs and Border Protection agency (or “U.S. Customs”) at a rate of 4.42% of the custom’s value for estimated countervailing duties on our U.S. imports of the UGW paper produced at our Canadian mills, with the exception of supercalendered (or “SC”) paper, which was subject to distinct countervailing duties, as further discussed below. The preliminary rate remained in effect until May 15, 2018. On March 13, 2018, Commerce also announced its preliminary determination in the anti-dumping investigation, whereby it determined that we did not sell Canadian-origin UGW paper exported to the U.S. for less than fair market value during the relevant period (from July 1, 2016 to June 30, 2017).

On August 29, 2018, the ITC determined that the U.S. UGW paper producer was not materially injured nor threatened with material injury by U.S. imports of Canadian-origin UGW paper, and that no countervailing duty or anti-dumping orders will be issued. As a result, we will receive a refund of all cash deposits made on our U.S. imports of UGW paper produced at our Canadian mills, plus interest, and no further cash deposits are required going forward. Through September 30, 2018, cash deposits to be refunded totaled $6 million. These cash deposits were recorded in “Accounts receivable, net – Other” in our Consolidated Balance Sheets.

Countervailing duty and anti-dumping investigations on softwood lumber

On November 25, 2016, countervailing duty and anti-dumping petitions were filed with Commerce and the ITC by certain U.S. softwood lumber producers and forest landowners, requesting that the U.S. government impose countervailing and anti-dumping duties on Canadian-origin softwood lumber exported to the U.S. One of our subsidiaries was identified in the petitions as being a Canadian exporting producer of softwood lumber to the U.S. and was selected as a mandatory respondent to be investigated by Commerce in both the countervailing duty and anti-dumping investigations.

On April 24, 2017, Commerce announced its preliminary determination in the countervailing duty investigation and, as a result, after April 28, 2017, we were required to pay cash deposits to the U.S. Customs at a rate of 12.82% for estimated countervailing duties on our U.S. imports of softwood lumber produced at our Canadian sawmills. The preliminary rate remained in effect until August 26, 2017. Commerce changed the rate in its final affirmative determination on November 2, 2017, but the new rate did not take effect until December 28, 2017, following the ITC’s final affirmative determination and the publication by Commerce of a countervailing duty order. Since that date, we have been required to resume paying cash deposits to the U.S. Customs at a rate of 14.7% for our softwood lumber U.S. imports from our Canadian sawmills. This rate will continue until Commerce sets a duty rate in an administrative review, or a new rate may be set through a remand determination should a North American Free Trade Agreement binational panel on appeal remand the final determination to Commerce. Through September 30, 2018, our cash deposits totaled $67 million and, based on the 14.7% rate and our current operating parameters, could be as high as $65 million per year.

On June 26, 2017, Commerce announced its preliminary determination in the anti-dumping investigation and, as a result, after June 30, 2017, we were required to pay cash deposits to the U.S. Customs at a rate of 4.59% for estimated anti-dumping duties on our U.S. imports of softwood lumber produced at our Canadian sawmills. On November 2, 2017, Commerce announced its final affirmative determination in the anti-dumping investigation and, as a result, since November 8, 2017, we have been required to pay cash deposits to the U.S. Customs, at a rate of 3.2% for our softwood lumber U.S. imports from our Canadian sawmills. This rate that will apply until Commerce sets a duty rate in an administrative review, or in a possible remand determination. Through September 30, 2018, our cash deposits totaled $21 million and, based on the 3.2% rate and our current operating parameters, could be as high as $15 million per year.

We are not presently able to determine the ultimate resolution of these matters, but we believe it is not probable that we will ultimately be assessed with significant duties, if any, on our U.S. imports of Canadian-produced softwood lumber. Accordingly, no contingent loss was recorded in respect of these petitions in our Consolidated Statement of Operations for the nine months ended September 30, 2018, and our cash deposits were recorded in “Other assets” in our Consolidated Balance Sheets.

Countervailing duty investigation on supercalendered paper

On February 26, 2015, a countervailing duty petition was filed with Commerce and the ITC by certain U.S. SC paper producers requesting that the U.S. government impose countervailing duties on Canadian-origin SC paper exported to the U.S. market. One of our subsidiaries was identified in the petition as being a Canadian exporting producer of SC paper to the U.S. and was selected as a mandatory respondent to be investigated by Commerce. As a result of that investigation, after August 3, 2015, we were required to pay cash deposits to the U.S. Customs for estimated countervailing duties on our U.S. imports of SC paper produced at our Canadian mills. Between August 3, 2015 and October 15, 2015, we were required to make cash deposits at a rate of 2.04%. On October 15, 2015, that rate increased to 17.87%, 17.10% of which was not based on any countervailable subsidy we received, but rather on a punitive application of “adverse facts available.”

On March 21, 2018, Verso Corporation, the sole remaining U.S. SC paper petitioner, filed a request with Commerce for a changed circumstances review to revoke the countervailing duty order, retroactive to August 3, 2015, and for Commerce to refund all countervailing duty deposits with interest. On May 8, 2018, Commerce announced the initiation of a changed circumstances review, and on July 6, 2018, Commerce signed the revocation order. As a result, we will receive a refund of all cash deposits made on our U.S. imports of SC paper produced at our Canadian mills, plus interest, and no further cash deposits are required going forward. In addition, this resulted in the termination of all pending administrative reviews.

Through September 30, 2018, cash deposits of $25 million were refunded. Remaining cash deposits to be refunded of $36 million, plus interest, were recorded in “Accounts receivable, net – Other” in our Consolidated Balance Sheets as of September 30, 2018.

Jedson Case

On March 9, 2017, Jedson Engineering, Inc. and Jedson C.M., Inc. (or the “Jedson plaintiffs”) filed a complaint against our subsidiary, Resolute FP US Inc., and other defendants in state court in Tennessee. The complaint alleged breach of contract and violation of Tennessee’s Prompt Pay Act for failure to pay for services in connection with the design and construction of our Calhoun tissue project, and sought a recovery of, and enforcement of mechanic’s liens for, approximately $10 million, plus interest and cost of litigation. On April 17, 2017, we filed an answer and counterclaim alleging, among other things, breach of contract and professional negligence by the Jedson plaintiffs and seeking recovery for, among other things, resulting costs on the project. On April 4, 2017, the Jedson plaintiffs also filed a motion for an injunction under the Prompt Pay Act seeking immediate payment of monies claimed and, on April 20, 2017, a motion to abate Resolute FP US Inc.’s counterclaim, both of which we opposed and have not been heard by the court. On August 25, 2017, the Jedson plaintiffs amended their complaint. As amended, the complaint includes allegations of fraud, intentional and negligent misrepresentation, unjust enrichment, and a claim for punitive damages in an amount of up to approximately $20 million. Effective February 20, 2018, the parties entered into an agreement to submit their disputes to binding private arbitration. On February 23, 2018, the state court issued an order staying the consolidated court proceedings pending completion of the arbitration subject to limited exceptions regarding certain defined procedural matters. The Company disputes the plaintiffs’ allegations, and intends to vigorously defend the action. The arbitration hearing is expected to occur in the first half of 2019. We are not presently able to determine the ultimate resolution of this matter or to reasonably estimate the potential impact on our Consolidated Financial Statements.

Modification of U.S. OPEB plan

Effective January 1, 2015, we modified our U.S. OPEB plan so that unionized participants, upon reaching Medicare eligibility, are provided Medicare coverage via a Medicare Exchange program rather than via a Company-sponsored medical plan. On March 2, 2016, a proposed class action lawsuit (Reynolds, et al v. Resolute Forest Products Inc., Resolute FP US Inc., Resolute FP US Health and Resolute Welfare Benefit Plan) was filed in the United States District Court for the Eastern District of Tennessee (or the “District Court”) on behalf of certain Medicare-eligible retirees who were previously unionized employees of our Calhoun, Catawba, and Coosa Pines mills, and their spouses and dependents (or the “proposed class”). The plaintiffs alleged that the modifications described above breached the collective bargaining agreements and plan covering the members of the proposed class in the lawsuit. Plaintiffs sought reinstatement of the health care benefits as in effect before January 1, 2015, for the proposed class in the lawsuit. On May 23, 2016, the Company filed a motion to dismiss the complaint. The motion to dismiss was denied by the District Court on March 1, 2017. On June 28, 2017, a settlement agreement in principle was reached between the parties to the lawsuit subject to court approval. On June 5, 2018, the District Court issued an order providing for preliminary approval of the settlement. On August 3, 2018, a final order approving the class action settlement and dismissing the case was entered, resulting in an amendment of our U.S. OPEB plan and a corresponding increase of $3 million to both “Pension and other postretirement benefit obligations” and “Accumulated other comprehensive loss” was recorded in our Consolidated Balance Sheet in the third quarter of 2018.

Fibrek acquisition

Effective July 31, 2012, we completed the final step of the transaction pursuant to which we acquired the remaining 25.4% of the outstanding Fibrek Inc. (or “Fibrek”) shares, following the approval of Fibrek’s shareholders on July 23, 2012, and the issuance of a final order of the Quebec Superior Court in Canada approving the arrangement on July 27, 2012. Certain former shareholders of Fibrek exercised (or purported to exercise) rights of dissent in respect of the transaction, asking for a judicial determination of the fair value of their claim under the Canada Business Corporations Act. No consideration has to date been paid to the former Fibrek shareholders who exercised (or purported to exercise) rights of dissent. Any such consideration will only be paid out upon settlement or judicial determination of the fair value of their claims and will be paid entirely in cash. Accordingly, we cannot presently determine the amount that ultimately will be paid to former holders of Fibrek shares in connection with the proceedings, but we have accrued approximately Cdn $14 million ($11 million, based on the exchange rate in effect on September 30, 2018) for the eventual payment of those claims. The hearing in this matter is expected to occur in 2019.

Partial wind-ups of pension plans

On June 12, 2012, we filed a motion for directives with the Quebec Superior Court, the court with jurisdiction in the creditor protection proceedings under the Companies’ Creditors Arrangement Act (Canada) (or the “CCAA Creditor Protection Proceedings”), seeking an order to prevent pension regulators in each of Quebec, New Brunswick, and Newfoundland and Labrador from declaring partial wind-ups of pension plans relating to employees of former operations in New Brunswick, and Newfoundland and Labrador, or a declaration that any claim for accelerated reimbursements of deficits arising from a partial wind-up is a barred claim under the CCAA Creditor Protection Proceedings. We contend, among other things, that any such declaration, if issued, would be inconsistent with the Quebec Superior Court’s sanction order confirming the CCAA debtors’ CCAA Plan of Reorganization and Compromise, as amended, and the terms of our emergence from the CCAA Creditor Protection Proceedings. A partial wind-up would likely shorten the period in which any deficit within those plans, which could reach up to Cdn $150 million ($115 million, based on the exchange rate in effect on September 30, 2018), would have to be funded if we do not obtain the relief sought. The hearing in this matter is expected to occur in 2019.

Environmental matters

We are subject to a variety of federal or national, state, provincial, and local environmental laws and regulations in the jurisdictions in which we operate. We believe our operations are in material compliance with current applicable environmental laws and regulations. Environmental regulations promulgated in the future could require substantial additional expenditures for compliance and could have a material impact on us, in particular, and the industry in general.

We may be a “potentially responsible party” with respect to a hazardous waste site that is being addressed pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (commonly known as Superfund). We believe we will not be liable for any significant amounts at this site.

We have environmental liabilities of $8 million recorded as of both September 30, 2018 and December 31, 2017, primarily related to environmental remediation related to closed sites. The amount of these liabilities represents management’s estimate of the ultimate settlement based on an assessment of relevant factors and assumptions and could be affected by changes in facts or assumptions not currently known to management for which the outcome cannot be reasonably estimated at this time. These liabilities are included in “Accounts payable and accrued liabilities” or “Other liabilities” in our Consolidated Balance Sheets.

We have also asset retirement obligations of $23 million and $24 million recorded as of September 30, 2018 and December 31, 2017, respectively, primarily consisting of liabilities associated with landfills, sludge basins and the dismantling of retired assets. These liabilities are included in “Other liabilities” in our Consolidated Balance Sheets.

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Segment Information

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Segment Information

Note 12. Segment Information

We manage our business based on the products we manufacture. Accordingly, our reportable segments correspond to our principal product lines: market pulp, tissue, wood products, newsprint, and specialty papers.

None of the income or loss items following “Operating income (loss)” in our Consolidated Statements of Operations are allocated to our segments, since those items are reviewed separately by management. For the same reason, closure costs, impairment and other related charges, inventory write-downs related to closures, start-up costs, gains and losses on disposition of assets, as well as other discretionary charges or credits are not allocated to our segments. We allocate depreciation and amortization expense to our segments, although the related fixed assets and amortizable intangible assets are not allocated to segment assets. Additionally, all selling, general and administrative expenses are allocated to our segments, with the exception of certain discretionary charges and credits, which we present under “corporate and other.”

Information about certain segment data for the three and nine months ended September 30, 2018 and 2017, was as follows:

(Unaudited, in millions)	Market Pulp (1)		Tissue (2)			Wood Products (3)		Newsprint			Specialty Papers		Segment Total		Corporate and Other			Total
Sales
Third quarter
2018	$	288	$	38		$	203	$	232		$	213	$	974	$	—		$	974
2017		227		21			219		199			219		885		—			885
First nine months
2018		809		95			666		660			594		2,824		—			2,824
2017		649		61			593		626			686		2,615		—			2,615
Depreciation and amortization
Third quarter
2018	$	7	$	5		$	8	$	16		$	12	$	48	$	6		$	54
2017		8		2			9		16			11		46		6			52
First nine months
2018		22		11			23		49			36		141		20			161
2017		24		4			25		49			34		136		17			153
Operating income (loss) (4)
Third quarter
2018	$	57	$	(10	)	$	45	$	32		$	26	$	150	$	(15	)	$	135
2017		19		(3	)		64		(6	)		7		81		(35	)		46
First nine months
2018		131		(21	)		177		46			23		356		(52	)		304
2017		42		(4	)		129		(17	)		4		154		(165	)		(11	)

⁽¹⁾  Inter-segment sales of $10 million and $9 million for the three months ended September 30, 2018 and 2017, respectively, and $29 million and $28 million for the nine months ended September 30, 2018 and 2017, respectively, which are transacted at cost, were excluded from market pulp sales.

⁽²⁾  The operating results of our Calhoun tissue operations, previously recorded under “corporate and other,” have been recorded in our tissue segment since April 1, 2018.

⁽³⁾  Wood products sales to our joint ventures, which are transacted at arm’s length negotiated prices, were $7 million and $6 million for the three months ended September 30, 2018 and 2017, respectively, and $23 million and $16 million for the nine months ended September 30, 2018 and 2017, respectively.

⁽⁴⁾  In the first quarter of 2018, we changed our presentation of operating income in accordance with FASB ASU 2017-07, to present only the service cost component of net periodic pension cost and OPEB cost in operating expenses (together with other employee compensation costs arising during the period). The non-operating pension and OPEB costs, presented under “corporate and other,” are reported separately outside any subtotal of operating income. Prior period amounts have been reclassified to conform to the 2018 presentation. See Note 1. Organization and Basis of Presentation – New accounting pronouncements adopted – ASU 2017-07 “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” for more information.

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Condensed Consolidating Financial Information

9 Months Ended

Sep. 30, 2018

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidating Financial Information

Note 13. Condensed Consolidating Financial Information

The following information is presented in accordance with Rule 3-10 of Regulation S-X and the public information requirements of Rule 144 promulgated pursuant to the Securities Act of 1933, as amended, in connection with Resolute Forest Products Inc.’s 2023 Notes that are fully and unconditionally guaranteed, on a joint and several basis, by all of our 100% owned material U.S. subsidiaries (or the “Guarantor Subsidiaries”). The 2023 Notes are not guaranteed by our foreign subsidiaries (or the “Non-guarantor Subsidiaries”).

The following condensed consolidating financial information sets forth the Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2018 and 2017, the Balance Sheets as of September 30, 2018 and December 31, 2017, and the Statements of Cash Flows for the nine months ended September 30, 2018 and 2017 for the Parent, the Guarantor Subsidiaries on a combined basis, and the Non-guarantor Subsidiaries also on a combined basis. The condensed consolidating financial information reflects the investments of the Parent in the Guarantor Subsidiaries and Non-guarantor Subsidiaries, as well as the investments of the Guarantor Subsidiaries in the Non-guarantor Subsidiaries, using the equity method of accounting. The principal consolidating adjustments are entries to eliminate the investments in subsidiaries and intercompany balances and transactions.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three Months Ended September 30, 2018
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	808		$	609		$	(443	)	$	974
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			708			366			(446	)		628
Depreciation and amortization		—			20			34			—			54
Distribution costs		—			42			75			—			117
Selling, general and administrative expenses		6			17			17			—			40
Operating (loss) income		(6	)		21			117			3			135
Interest expense		(20	)		(2	)		(3	)		13			(12	)
Non-operating pension and other postretirement benefit credits		—			4			9			—			13
Other income, net		—			14			13			(13	)		14
Equity in income of subsidiaries		143			7			—			(150	)		—
Income before income taxes		117			44			136			(147	)		150
Income tax provision		—			—			(32	)		(1	)		(33	)
Net income including noncontrolling interests		117			44			104			(148	)		117
Net income attributable to noncontrolling interests		—			—			—			—			—
Net income attributable to Resolute Forest Products Inc.	$	117		$	44		$	104		$	(148	)	$	117
Comprehensive income attributable to Resolute Forest Products Inc.	$	117		$	38		$	110		$	(148	)	$	117

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Nine Months Ended September 30, 2018
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	2,348		$	1,875		$	(1,399	)	$	2,824
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			2,145			1,128			(1,392	)		1,881
Depreciation and amortization		—			61			100			—			161
Distribution costs		—			119			239			(2	)		356
Selling, general and administrative expenses		18			48			59			—			125
Closure costs, impairment and other related charges		—			—			1			—			1
Net gain on disposition of assets		—			—			(4	)		—			(4	)
Operating (loss) income		(18	)		(25	)		352			(5	)		304
Interest expense		(67	)		(6	)		(9	)		46			(36	)
Non-operating pension and other postretirement benefit credits		—			11			27			—			38
Other income, net		—			47			3			(46	)		4
Equity in income of subsidiaries		284			56			—			(340	)		—
Income before income taxes		199			83			373			(345	)		310
Income tax provision		—			—			(112	)		1			(111	)
Net income including noncontrolling interests		199			83			261			(344	)		199
Net income attributable to noncontrolling interests		—			—			—			—			—
Net income attributable to Resolute Forest Products Inc.	$	199		$	83		$	261		$	(344	)	$	199
Comprehensive income attributable to Resolute Forest Products Inc.	$	205		$	72		$	278		$	(350	)	$	205

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Three Months Ended September 30, 2017
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	716		$	570		$	(401	)	$	885
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			670			360			(402	)		628
Depreciation and amortization		—			18			34			—			52
Distribution costs		—			39			71			—			110
Selling, general and administrative expenses		4			19			20			—			43
Closure costs, impairment and other related charges		—			8			—			—			8
Net gain on disposition of assets		—			—			(2	)		—			(2	)
Operating (loss) income		(4	)		(38	)		87			1			46
Interest expense		(23	)		(3	)		(3	)		16			(13	)
Non-operating pension and other postretirement benefit (costs) credits		—			(1	)		3			—			2
Other income, net		—			20			2			(16	)		6
Equity in income (loss) of subsidiaries		51			(3	)		—			(48	)		—
Income (loss) before income taxes		24			(25	)		89			(47	)		41
Income tax provision		—			—			(15	)		—			(15	)
Net income (loss) including noncontrolling interests		24			(25	)		74			(47	)		26
Net income attributable to noncontrolling interests		—			—			(2	)		—			(2	)
Net income (loss) attributable to Resolute Forest Products Inc.	$	24		$	(25	)	$	72		$	(47	)	$	24
Comprehensive income (loss) attributable to Resolute Forest Products Inc.	$	15		$	(41	)	$	79		$	(38	)	$	15

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
For the Nine Months Ended September 30, 2017
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	2,131		$	1,660		$	(1,176	)	$	2,615
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			2,030			1,091			(1,176	)		1,945
Depreciation and amortization		—			55			98			—			153
Distribution costs		—			119			210			(1	)		328
Selling, general and administrative expenses		18			53			51			—			122
Closure costs, impairment and other related charges		—			72			8			—			80
Net gain on disposition of assets		—			—			(2	)		—			(2	)
Operating (loss) income		(18	)		(198	)		204			1			(11	)
Interest expense		(65	)		(7	)		(9	)		45			(36	)
Non-operating pension and other postretirement benefit credits		—			—			6			—			6
Other income, net		—			53			3			(45	)		11
Equity in loss of subsidiaries		(14	)		(2	)		—			16			—
(Loss) income before income taxes		(97	)		(154	)		204			17			(30	)
Income tax provision		—			(1	)		(62	)		—			(63	)
Net (loss) income including noncontrolling interests		(97	)		(155	)		142			17			(93	)
Net income attributable to noncontrolling interests		—			—			(4	)		—			(4	)
Net (loss) income attributable to Resolute Forest Products Inc.	$	(97	)	$	(155	)	$	138		$	17		$	(97	)
Comprehensive (loss) income attributable to Resolute Forest Products Inc.	$	(91	)	$	(173	)	$	162		$	11		$	(91	)

CONDENSED CONSOLIDATING BALANCE SHEET
As of September 30, 2018
(Unaudited, in millions)	Parent		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Consolidating Adjustments			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	64	$	8	$	—		$	72
Accounts receivable, net		—		350		127		—			477
Accounts receivable from affiliates		—		566		1,008		(1,574	)		—
Inventories, net		—		195		330		(14	)		511
Assets held for sale		—		228		14		—			242
Note, advance and interest receivable from parent		—		419		—		(419	)		—
Notes and interest receivable from affiliates		—		31		—		(31	)		—
Other current assets		—		14		31		—			45
Total current assets		—		1,867		1,518		(2,038	)		1,347
Fixed assets, net		—		554		991		—			1,545
Amortizable intangible assets, net		—		12		50		—			62
Goodwill		—		81		—		—			81
Deferred income tax assets		—		1		920		3			924
Note receivable from parent		—		488		—		(488	)		—
Note receivable from affiliate		—		113		—		(113	)		—
Investments in consolidated subsidiaries and affiliates		4,229		2,167		—		(6,396	)		—
Other assets		—		107		79		—			186
Total assets	$	4,229	$	5,390	$	3,558	$	(9,032	)	$	4,145
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities	$	14	$	163	$	270	$	—		$	447
Current portion of long-term debt		—		1		—		—			1
Liabilities associated with assets held for sale		—		79		—		—			79
Accounts payable to affiliates		566		1,053		—		(1,619	)		—
Note, advance and interest payable to subsidiaries		419		—		—		(419	)		—
Notes and interest payable to affiliate		—		—		31		(31	)		—
Total current liabilities		999		1,296		301		(2,069	)		527
Long-term debt, net of current portion		592		52		—		—			644
Note payable to subsidiary		488		—		—		(488	)		—
Note payable to affiliate		—		—		113		(113	)		—
Pension and other postretirement benefit obligations		—		318		772		—			1,090
Deferred income tax liabilities		—		—		1		—			1
Other liabilities		6		22		45		—			73
Total liabilities		2,085		1,688		1,232		(2,670	)		2,335
Total equity		2,144		3,702		2,326		(6,362	)		1,810
Total liabilities and equity	$	4,229	$	5,390	$	3,558	$	(9,032	)	$	4,145

CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2017
(Unaudited, in millions)	Parent		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Consolidating Adjustments			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	3	$	3	$	—		$	6
Accounts receivable, net		—		319		160		—			479
Accounts receivable from affiliates		—		535		729		(1,264	)		—
Inventories, net		—		243		292		(9	)		526
Note, advance and interest receivable from parent		—		538		—		(538	)		—
Notes and interest receivable from affiliates		—		32		—		(32	)		—
Other current assets		—		16		17		—			33
Total current assets		—		1,686		1,201		(1,843	)		1,044
Fixed assets, net		—		692		1,024		—			1,716
Amortizable intangible assets, net		—		13		52		—			65
Goodwill		—		81		—		—			81
Deferred income tax assets		—		1		1,073		2			1,076
Notes receivable from parent		—		330		—		(330	)		—
Note receivable from affiliate		—		116		—		(116	)		—
Investments in consolidated subsidiaries and affiliates		3,939		2,111		—		(6,050	)		—
Other assets		—		98		67		—			165
Total assets	$	3,939	$	5,128	$	3,417	$	(8,337	)	$	4,147
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities	$	4	$	171	$	245	$	—		$	420
Current portion of long-term debt		—		1		—		—			1
Accounts payable to affiliates		536		728		—		(1,264	)		—
Note, advance and interest payable to subsidiaries		538		—		—		(538	)		—
Notes and interest payable to affiliate		—		—		32		(32	)		—
Total current liabilities		1,078		900		277		(1,834	)		421
Long-term debt, net of current portion		592		196		—		—			788
Note payable to subsidiary		330		—		—		(330	)		—
Note payable to affiliate		—		—		116		(116	)		—
Pension and other postretirement benefit obligations		—		378		879		—			1,257
Deferred income tax liabilities		—		—		13		—			13
Other liabilities		5		24		39		—			68
Total liabilities		2,005		1,498		1,324		(2,280	)		2,547
Total equity		1,934		3,630		2,093		(6,057	)		1,600
Total liabilities and equity	$	3,939	$	5,128	$	3,417	$	(8,337	)	$	4,147

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2018
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash provided by operating activities	$	—		$	291		$	60		$	—		$	351
Cash flows from investing activities:
Cash invested in fixed assets		—			(31	)		(63	)		—			(94	)
Disposition of assets		—			—			2			—			2
Decrease in countervailing duty cash deposits on supercalendered paper, net		—			13			—			—			13
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber		—			(62	)		—			—			(62	)
Increase in countervailing duty cash deposits on uncoated groundwood paper		—			(6	)		—			—			(6	)
Advance to parent		—			(1	)		—			1			—
Decrease in notes receivable from affiliate		—			1			—			(1	)		—
Net cash used in investing activities		—			(86	)		(61	)		—			(147	)
Cash flows from financing activities:
Net repayments under revolving credit facilities		—			(144	)		—			—			(144	)
Payments of financing and credit facility fees		(1	)		—			—			—			(1	)
Advance from subsidiary		1			—			—			(1	)		—
Decrease in notes payable to affiliate		—			—			(1	)		1			—
Net cash used in financing activities		—			(144	)		(1	)		—			(145	)
Effect of exchange rate changes on cash and cash equivalents, and restricted cash		—			—			(1	)		—			(1	)
Net increase (decrease) in cash and cash equivalents, and restricted cash		—			61			(3	)		—			58
Cash and cash equivalents, and restricted cash:
Beginning of period		—			3			46			—			49
End of period	$	—		$	64		$	43		$	—		$	107
Cash and cash equivalents, and restricted cash at period end:
Cash and cash equivalents	$	—		$	64		$	8		$	—		$	72
Restricted cash		—			—			35			—			35

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2017
(Unaudited, in millions)	Parent		Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash provided by operating activities	$	—	$	69		$	30		$	—		$	99
Cash flows from investing activities:
Cash invested in fixed assets		—		(106	)		(30	)		—			(136	)
Disposition of assets		—		—			3			—			3
Increase in countervailing duty cash deposits on supercalendered paper		—		(17	)		—			—			(17	)
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber		—		(18	)		—			—			(18	)
Decrease in notes receivable from affiliate		—		5			—			(5	)		—
Net cash used in investing activities		—		(136	)		(27	)		(5	)		(168	)
Cash flows from financing activities:
Net borrowings under revolving credit facilities		—		70			—			—			70
Payments of debt		—		(1	)		—			—			(1	)
Decrease in notes payable to affiliate		—		—			(5	)		5			—
Net cash provided by (used in) financing activities		—		69			(5	)		5			69
Effect of exchange rate changes on cash and cash equivalents, and restricted cash		—		—			6			—			6
Net increase in cash and cash equivalents, and restricted cash		—		2			4			—			6
Cash and cash equivalents, and restricted cash:
Beginning of period		—		2			71			—			73
End of period	$	—	$	4		$	75		$	—		$	79
Cash and cash equivalents, and restricted cash at period end:
Cash and cash equivalents	$	—	$	4		$	34		$	—		$	38
Restricted cash		—		—			41			—			41

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Subsequent Events

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

Note 14. Subsequent Event

The following significant event occurred subsequent to September 30, 2018:

• We announced a special cash dividend of $1.50 per share on November 1, 2018. The special dividend will be payable on December 20, 2018 to shareholders of record at the close of business on December 6, 2018.

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Organization and Basis of Presentation - New Accounting Pronouncements (Policies)

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

New accounting pronouncements

New accounting pronouncements adopted

ASU 2014-09 “Revenue from Contracts from Customers”

Effective January 1, 2018, we adopted Accounting Standards Update (or “ASU”) 2014-09, “Revenue from Contracts from Customers,” issued by the Financial Accounting Standards Board (or the “FASB”), and the series of related accounting standard updates that followed (collectively, “Topic 606”). We utilized the modified retrospective method, which required the application of Topic 606 to: (i) all new revenue contracts entered into after January 1, 2018; and (ii) all existing revenue contracts as of January 1, 2018. The adoption of Topic 606 had no impact on our revenues, results of operations, or financial position. As a result of the implementation of Topic 606, our revenue recognition policy was updated as follows:

Revenue arises from contracts with customers in which the sale of goods is the main performance obligation. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when or as the performance obligation is satisfied, which is when (point in time) or as (over time) control of the promised good or service is transferred to the customer.

Revenue is measured at the amount to which we are expected to be entitled in exchange for transferring goods based on consideration specified in the contract with the customer. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that we collect from the customer, are excluded from revenue. When a contract with a customer includes variable consideration such as special pricing agreements and other volume-based incentives, revenue is recognized at the most likely amount based on sales forecasts, for which it is probable that a revenue reversal will not subsequently occur.

Revenue is recorded at a point in time when control over the goods transfers to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts with customers. Pulp, tissue, paper and wood products are delivered to our customers in the United States and Canada directly from our mills primarily by truck or rail. Pulp and paper products are delivered to our international customers primarily by ship. For sales where control transfers to the customer at the shipping point, revenue is recorded when the product leaves the facility, whereas for sales where control transfers at the destination, revenue is recorded when the product is delivered to the customer’s delivery site. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in “Distribution costs” in our Consolidated Statements of Operations.

Sales of our other products (green power produced from renewable sources, wood chips, and other wood-related products) are recognized when the products are delivered and are included in “Cost of sales, excluding depreciation, amortization and distribution costs” in our Consolidated Statements of Operations.

ASU 2016-01 “Recognition and Measurement of Financial Assets and Financial Liabilities”

In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. This update is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We adopted this ASU on January 1, 2018. The adoption of this accounting guidance did not impact our results of operations, financial position or cash flows.

ASU 2016-15 “Classification of Certain Cash Receipts and Cash Payments”

In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments,” which is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. All amendments to the guidance shall be adopted in the same period on a retrospective basis. We adopted this ASU on January 1, 2018. The adoption of this accounting guidance did not impact the presentation of our cash flows.

ASU 2016-18 “Restricted Cash”

In November 2016, the FASB issued ASU 2016-18, “Restricted Cash,” which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We adopted this ASU on January 1, 2018. Prior period amounts have been reclassified to conform to the 2018 presentation.

ASU 2017-05 “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets”

In February 2017, the FASB issued ASU 2017-05, “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets,” which clarifies the scope of Subtopic 610-20, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets” and adds guidance for partial sales of nonfinancial assets. This update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We adopted this ASU on January 1, 2018. The adoption of this accounting guidance did not impact our results of operations, financial position or cash flows.

ASU 2017-07 “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”

In March 2017, the FASB issued ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which requires employers that present a measure of operating income in their statements of earnings to disaggregate and present only the service cost component of net periodic pension cost and net periodic other postretirement benefit (or “OPEB”) cost in operating expenses (together with other employee compensation costs arising during the period). The other components of the net periodic pension cost and net periodic OPEB cost (or “Non-operating pension and OPEB costs”) are reported separately outside any subtotal of operating income. This update is effective retrospectively for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We adopted this ASU on January 1, 2018.

The effect of this ASU on our Consolidated Statements of Operations for the three months ended September 30, 2018 and 2017, was as follows:

	Three Months Ended September 30, 2018							Three Months Ended September 30, 2017
(Unaudited, in millions)	Before Accounting Standards Update		Effect of Change			As Reported		As Previously Reported		Effect of Change			As Adjusted
Cost of sales, excluding depreciation, amortization and distribution costs	$	615	$	13		$	628	$	624	$	4		$	628
Closure costs, impairment and other related charges		—		—			—		10		(2	)		8
Operating income		148		(13	)		135		48		(2	)		46
Non-operating pension and other postretirement benefit credits		—		13			13		—		2			2

The effect of this ASU on our Consolidated Statements of Operations for the nine months ended September 30, 2018 and 2017, was as follows:

	Nine Months Ended September 30, 2018							Nine Months Ended September 30, 2017
(Unaudited, in millions)	Before Accounting Standards Update		Effect of Change			As Reported		As Previously Reported			Effect of Change			As Adjusted
Cost of sales, excluding depreciation, amortization and distribution costs	$	1,842	$	39		$	1,881	$	1,936		$	9		$	1,945
Selling, general and administrative expenses		126		(1	)		125		123			(1	)		122
Closure costs, impairment and other related charges		1		—			1		82			(2	)		80
Operating income (loss)		342		(38	)		304		(5	)		(6	)		(11	)
Non-operating pension and other postretirement benefit credits		—		38			38		—			6			6

Accounting pronouncements not yet adopted

ASU 2016-02 “Leases”

In February 2016, the FASB issued ASU 2016-02, “Leases,” which requires lessees to recognize leases on the balance sheet while continuing to recognize expenses in the income statement 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. Enhanced disclosures will also be required to give financial statement users the ability to assess the amount, timing, and uncertainty of cash flows arising from leases.

We are currently in the process of evaluating our existing lease portfolio, which consists primarily of operating leases where we are the lessee. Upon adoption, we expect to recognize a liability and corresponding asset associated with in-scope leases. We are continuing our assessment and review of existing leases, which may identify other impacts, and are addressing necessary policy and process changes in preparation for adoption.

This ASU may either be adopted on a modified retrospective approach at the beginning of the earliest comparative period, or through a cumulative-effect adjustment at the adoption date. This update is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. We plan to adopt this standard on January 1, 2019, through a cumulative-effect adjustment at the adoption date.

ASU 2018-14 “Changes to the Disclosure Requirements for Defined Benefit Plans”

In August 2018, the FASB issued ASU 2018-14, “Changes to the Disclosure Requirements for Defined Benefit Plans,” which intends to add, remove, and clarify disclosure requirements related to defined benefit pension and OPEB plans. This update is effective for fiscal years ending after December 15, 2020, with early adoption permitted. We are still evaluating the impact of this standard on our consolidated financial statements.

ASU 2018-15 “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract”

In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted as of the beginning of an interim or annual reporting period. We are still evaluating the impact of this standard on our consolidated financial statements.

Deferred tax charge

On January 1, 2017, we adopted ASU 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory,” which eliminates the deferral of the tax effects of intra-entity asset transfers other than inventory until the transferred assets are sold to a third party or recovered through use. As a result, a cumulative-effect adjustment of $3 million was recorded to “Deficit” in our Consolidated Balance Sheet as of January 1, 2017.

Revenue recognition policy

Revenue arises from contracts with customers in which the sale of goods is the main performance obligation. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when or as the performance obligation is satisfied, which is when (point in time) or as (over time) control of the promised good or service is transferred to the customer.

Revenue is measured at the amount to which we are expected to be entitled in exchange for transferring goods based on consideration specified in the contract with the customer. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that we collect from the customer, are excluded from revenue. When a contract with a customer includes variable consideration such as special pricing agreements and other volume-based incentives, revenue is recognized at the most likely amount based on sales forecasts, for which it is probable that a revenue reversal will not subsequently occur.

Revenue is recorded at a point in time when control over the goods transfers to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts with customers. Pulp, tissue, paper and wood products are delivered to our customers in the United States and Canada directly from our mills primarily by truck or rail. Pulp and paper products are delivered to our international customers primarily by ship. For sales where control transfers to the customer at the shipping point, revenue is recorded when the product leaves the facility, whereas for sales where control transfers at the destination, revenue is recorded when the product is delivered to the customer’s delivery site. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in “Distribution costs” in our Consolidated Statements of Operations.

Sales of our other products (green power produced from renewable sources, wood chips, and other wood-related products) are recognized when the products are delivered and are included in “Cost of sales, excluding depreciation, amortization and distribution costs” in our Consolidated Statements of Operations.

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Organization and Basis of Presentation (Tables)

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

The effect of this ASU on our Consolidated Statements of Operations for the three months ended September 30, 2018 and 2017, was as follows:

	Three Months Ended September 30, 2018							Three Months Ended September 30, 2017
(Unaudited, in millions)	Before Accounting Standards Update		Effect of Change			As Reported		As Previously Reported		Effect of Change			As Adjusted
Cost of sales, excluding depreciation, amortization and distribution costs	$	615	$	13		$	628	$	624	$	4		$	628
Closure costs, impairment and other related charges		—		—			—		10		(2	)		8
Operating income		148		(13	)		135		48		(2	)		46
Non-operating pension and other postretirement benefit credits		—		13			13		—		2			2

The effect of this ASU on our Consolidated Statements of Operations for the nine months ended September 30, 2018 and 2017, was as follows:

	Nine Months Ended September 30, 2018							Nine Months Ended September 30, 2017
(Unaudited, in millions)	Before Accounting Standards Update		Effect of Change			As Reported		As Previously Reported			Effect of Change			As Adjusted
Cost of sales, excluding depreciation, amortization and distribution costs	$	1,842	$	39		$	1,881	$	1,936		$	9		$	1,945
Selling, general and administrative expenses		126		(1	)		125		123			(1	)		122
Closure costs, impairment and other related charges		1		—			1		82			(2	)		80
Operating income (loss)		342		(38	)		304		(5	)		(6	)		(11	)
Non-operating pension and other postretirement benefit credits		—		38			38		—			6			6

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Closure Costs, Impairment and Other Related Charges (Tables)

9 Months Ended

Sep. 30, 2018

Restructuring and Related Activities [Abstract]

Closure Costs, Impairment and Other Related Charges

Closure costs, impairment and other related charges were $1 million for the nine months ended September 30, 2018, and were comprised of the following for the three and nine months ended September 30, 2017:

(Unaudited, in millions)	Impairment of Assets		Accelerated Depreciation		Severance and Other Costs		Total
Pulp mill at Coosa Pines (Alabama) (1)
Third quarter	$	—	$	—	$	—	$	—
First nine months		55		—		—		55
Permanent closures
Paper machine at Catawba (South Carolina)
Third quarter		—		—		—		—
First nine months		5		—		4		9
Paper machines at Calhoun (Tennessee)
Third quarter		—		6		2		8
First nine months		—		6		2		8
Paper mill at Mokpo (South Korea)
Third quarter		—		—		—		—
First nine months		—		—		7		7
Other
Third quarter		—		—		—		—
First nine months		—		—		1		1
Total
Third quarter	$	—	$	6	$	2	$	8
First nine months		60		6		14		80

⁽¹⁾As a result of the continued deterioration of actual and projected cash flows, we recorded long-lived asset impairment charges of $55 million for the nine months ended September 30, 2017, to reduce the carrying value of the assets to their estimated fair value, which was determined using the market approach, by reference to market transaction prices for similar assets. The fair value measurement is considered a Level 3 measurement due to the significance of its unobservable inputs.

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Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss) by Component (Net of Tax)

The change in our accumulated other comprehensive loss by component (net of tax) for the nine months ended September 30, 2018, was as follows:

(Unaudited, in millions)	Unamortized Prior Service Credits			Unamortized Actuarial Losses			Foreign Currency Translation			Total
Balance as of December 31, 2017	$	52		$	(826	)	$	(6	)	$	(780	)
Other comprehensive (loss) income before reclassifications		(5	)		2			—			(3	)
Amounts reclassified from accumulated other comprehensive loss (1)		(12	)		21			—			9
Net current period other comprehensive (loss) income		(17	)		23			—			6
Balance as of September 30, 2018	$	35		$	(803	)	$	(6	)	$	(774	)

⁽¹⁾  See the table below for details about these reclassifications.

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

The reclassifications out of accumulated other comprehensive loss for the nine months ended September 30, 2018, were comprised of the following:

(Unaudited, in millions)	Amounts Reclassified From Accumulated Other Comprehensive Loss			Affected Line in the Consolidated Statements of Operations
Unamortized Prior Service Credits
Amortization of prior service credits	$	(12	)	Non-operating pension and other postretirement benefit credits (1)
		—		Income tax provision
	$	(12	)	Net of tax
Unamortized Actuarial Losses
Amortization of actuarial losses	$	26		Non-operating pension and other postretirement benefit credits (1)
Settlement loss		1		Non-operating pension and other postretirement benefit credits (1)
		(6	)	Income tax provision
	$	21		Net of tax
Total Reclassifications	$	9		Net of tax

⁽¹⁾  These items are included in the computation of net periodic benefit cost related to our pension and OPEB plans summarized in Note 9, “Employee Benefit Plans.”

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Net Income (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Schedule of earnings per share, basic and diluted

The reconciliation of the basic and diluted net income (loss) per share for the three and nine months ended September 30, 2018 and 2017, was as follows:

	Three Months Ended   September 30,				Nine Months Ended   September 30,
(Unaudited, in millions, except per share amounts)	2018		2017		2018		2017
Numerator:
Net income (loss) attributable to Resolute Forest Products Inc.	$	117	$	24	$	199	$	(97	)
Denominator:
Basic weighted-average number of Resolute Forest Products Inc. common shares outstanding		91.3		90.5		91.3		90.4
Dilutive impact of nonvested stock unit awards		2.1		1.1		1.9		—
Diluted weighted-average number of Resolute Forest Products Inc. common shares outstanding		93.4		91.6		93.2		90.4
Net income (loss) per share attributable to Resolute Forest Products Inc. common shareholders:
Basic	$	1.28	$	0.27	$	2.18	$	(1.07	)
Diluted		1.25		0.26		2.14		(1.07	)

Schedule of weighted-average outstanding stock options and nonvested equity-classified RSUs, DSUs and PSUs

The weighted-average number of outstanding stock options and nonvested equity-classified restricted stock units, deferred stock units and performance stock units (collectively, “stock unit awards”) that were excluded from the calculation of diluted net income (loss) per share, as their impact would have been antidilutive, for the three and nine months ended September 30, 2018 and 2017, was as follows:

	Three Months Ended   September 30,		Nine Months Ended   September 30,
(Unaudited, in millions)	2018	2017	2018	2017
Stock options	0.9	1.4	1.3	1.4
Stock unit awards	—	—	—	4.3

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Inventories, Net (Tables)

9 Months Ended

Sep. 30, 2018

Inventory Disclosure [Abstract]

Inventories, Net

Inventories, net as of September 30, 2018 and December 31, 2017, were comprised of the following:

(Unaudited, in millions)	September 30, 2018		December 31, 2017
Raw materials	$	99	$	108
Work in process		39		38
Finished goods		190		175
Mill stores and other supplies		183		205
	$	511	$	526

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Assets Held for Sale, Net (Tables)

9 Months Ended

Sep. 30, 2018

Assets Held for Sale, Net [Abstract]

Disclosure of Long Lived Assets Held-for-sale [Table Text Block]

Assets held for sale, net as of September 30, 2018 and December 31, 2017, were comprised of the following:

(Unaudited, in millions)	September 30, 2018		December 31, 2017
Assets held for sale:
Accounts receivable, net	$	45	$	—
Inventories, net		70		—
Other current assets		5		—
Fixed assets, net		121		—
Other assets		1		—
Total assets held for sale		242		—
Liabilities associated with assets held for sale:
Accounts payable and accrued liabilities		40		—
Pension and other postretirement benefit obligations		34		—
Other liabilities		5		—
Total liabilities associated with assets held for sale		79		—
	$	163	$	—

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Accounts Payable and Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2018

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities as of September 30, 2018 and December 31, 2017, were comprised of the following:

(Unaudited, in millions)	September 30, 2018		December 31, 2017
Trade accounts payable	$	331	$	306
Payroll, bonuses and severance payable		55		55
Accrued interest		14		5
Pension and other postretirement benefit obligations		18		18
Income and other taxes payable		10		10
Environmental liabilities		2		2
Other		17		24
	$	447	$	420

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Long-Term Debt, Including Current Portion

Long-term debt, including current portion, as of September 30, 2018 and December 31, 2017, was comprised of the following:

(Unaudited, in millions)	September 30, 2018			December 31, 2017
5.875% senior unsecured notes due 2023:
Principal amount	$	600		$	600
Deferred financing costs		(5	)		(5	)
Unamortized discount		(3	)		(3	)
Total senior unsecured notes due 2023		592			592
Term loan due 2025		46			46
Borrowings under revolving credit facilities		—			144
Capital lease obligation		7			7
Total debt		645			789
Less: Current portion of long-term debt		(1	)		(1	)
Long-term debt, net of current portion	$	644		$	788

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Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2018

Retirement Benefits [Abstract]

Components of Net Periodic Benefit Cost Relating to Pension and OPEB Plans

The components of net periodic benefit cost relating to our pension and OPEB plans for the three and nine months ended September 30, 2018 and 2017, were as follows:

Pension Plans:

	Three Months Ended   September 30,						Nine Months Ended   September 30,
(Unaudited, in millions)	2018			2017			2018			2017
Interest cost	$	46		$	51		$	142		$	149
Expected return on plan assets		(65	)		(66	)		(199	)		(190	)
Amortization of actuarial losses		9			14			29			42
Amortization of prior service credits		—			—			(1	)		—
Non-operating pension (credits) costs		(10	)		(1	)		(29	)		1
Service cost		5			6			14			15
Net periodic benefit (credits) costs before special events		(5	)		5			(15	)		16
Curtailment, settlement and other losses		—			3			1			4
	$	(5	)	$	8		$	(14	)	$	20

OPEB Plans:

	Three Months Ended   September 30,						Nine Months Ended   September 30,
(Unaudited, in millions)	2018			2017			2018			2017
Interest cost	$	1		$	2		$	4		$	5
Amortization of actuarial gains		—			(1	)		(3	)		(4	)
Amortization of prior service credits		(4	)		(4	)		(11	)		(11	)
Non-operating other postretirement benefit credits		(3	)		(3	)		(10	)		(10	)
Service cost		—			—			1			1
Net periodic benefit credits before special events		(3	)		(3	)		(9	)		(9	)
Curtailment gain		—			(1	)		—			(1	)
	$	(3	)	$	(4	)	$	(9	)	$	(10	)

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

Reconciliation of Statutory Tax Benefit (Provision) to Income Tax Benefit (Provision)

The income tax provision attributable to income (loss) before income taxes differs from the amounts computed by applying the U.S. federal statutory income tax rate of 21% for the three and nine months ended September 30, 2018 and 2017, as a result of the following:

	Three Months Ended   September 30,						Nine Months Ended   September 30,
(Unaudited, in millions)	2018			2017			2018			2017
Income (loss) before income taxes	$	150		$	41		$	310		$	(30	)
Income tax provision:
Expected income tax (provision) benefit		(31	)		(9	)		(65	)		6
Changes resulting from:
U.S. federal tax rate change reconciliation		—			(5	)		—			5
Valuation allowance (1)		32			(19	)		40			(94	)
Enactment of change in foreign tax rate		—			—			—			(12	)
Foreign exchange		2			8			(12	)		9
State income taxes, net of federal income tax benefit		(1	)		1			1			7
Foreign tax rate differences (2)		(35	)		7			(72	)		15
Other, net		—			2			(3	)		1
	$	(33	)	$	(15	)	$	(111	)	$	(63	)

⁽¹⁾  Relates to our U.S. operations for the three and nine months ended September 30, 2018, and the three months ended September 30, 2017, and primarily to our U.S. operations for the nine months ended September 30, 2017.

⁽²⁾  Includes an income tax provision attributable to the GILTI inclusion of $28 million and $53 million, before valuation allowance, for the three months and nine months ended September 30, 2018, respectively.

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

Information about certain segment data for the three and nine months ended September 30, 2018 and 2017, was as follows:

(Unaudited, in millions)	Market Pulp (1)		Tissue (2)			Wood Products (3)		Newsprint			Specialty Papers		Segment Total		Corporate and Other			Total
Sales
Third quarter
2018	$	288	$	38		$	203	$	232		$	213	$	974	$	—		$	974
2017		227		21			219		199			219		885		—			885
First nine months
2018		809		95			666		660			594		2,824		—			2,824
2017		649		61			593		626			686		2,615		—			2,615
Depreciation and amortization
Third quarter
2018	$	7	$	5		$	8	$	16		$	12	$	48	$	6		$	54
2017		8		2			9		16			11		46		6			52
First nine months
2018		22		11			23		49			36		141		20			161
2017		24		4			25		49			34		136		17			153
Operating income (loss) (4)
Third quarter
2018	$	57	$	(10	)	$	45	$	32		$	26	$	150	$	(15	)	$	135
2017		19		(3	)		64		(6	)		7		81		(35	)		46
First nine months
2018		131		(21	)		177		46			23		356		(52	)		304
2017		42		(4	)		129		(17	)		4		154		(165	)		(11	)

⁽¹⁾  Inter-segment sales of $10 million and $9 million for the three months ended September 30, 2018 and 2017, respectively, and $29 million and $28 million for the nine months ended September 30, 2018 and 2017, respectively, which are transacted at cost, were excluded from market pulp sales.

⁽²⁾  The operating results of our Calhoun tissue operations, previously recorded under “corporate and other,” have been recorded in our tissue segment since April 1, 2018.

⁽³⁾  Wood products sales to our joint ventures, which are transacted at arm’s length negotiated prices, were $7 million and $6 million for the three months ended September 30, 2018 and 2017, respectively, and $23 million and $16 million for the nine months ended September 30, 2018 and 2017, respectively.

⁽⁴⁾  In the first quarter of 2018, we changed our presentation of operating income in accordance with FASB ASU 2017-07, to present only the service cost component of net periodic pension cost and OPEB cost in operating expenses (together with other employee compensation costs arising during the period). The non-operating pension and OPEB costs, presented under “corporate and other,” are reported separately outside any subtotal of operating income. Prior period amounts have been reclassified to conform to the 2018 presentation. See Note 1. Organization and Basis of Presentation – New accounting pronouncements adopted – ASU 2017-07 “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” for more information.

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Condensed Consolidating Financial Information (Tables)

9 Months Ended

Sep. 30, 2018

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three Months Ended September 30, 2018
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	808		$	609		$	(443	)	$	974
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			708			366			(446	)		628
Depreciation and amortization		—			20			34			—			54
Distribution costs		—			42			75			—			117
Selling, general and administrative expenses		6			17			17			—			40
Operating (loss) income		(6	)		21			117			3			135
Interest expense		(20	)		(2	)		(3	)		13			(12	)
Non-operating pension and other postretirement benefit credits		—			4			9			—			13
Other income, net		—			14			13			(13	)		14
Equity in income of subsidiaries		143			7			—			(150	)		—
Income before income taxes		117			44			136			(147	)		150
Income tax provision		—			—			(32	)		(1	)		(33	)
Net income including noncontrolling interests		117			44			104			(148	)		117
Net income attributable to noncontrolling interests		—			—			—			—			—
Net income attributable to Resolute Forest Products Inc.	$	117		$	44		$	104		$	(148	)	$	117
Comprehensive income attributable to Resolute Forest Products Inc.	$	117		$	38		$	110		$	(148	)	$	117

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Nine Months Ended September 30, 2018
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	2,348		$	1,875		$	(1,399	)	$	2,824
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			2,145			1,128			(1,392	)		1,881
Depreciation and amortization		—			61			100			—			161
Distribution costs		—			119			239			(2	)		356
Selling, general and administrative expenses		18			48			59			—			125
Closure costs, impairment and other related charges		—			—			1			—			1
Net gain on disposition of assets		—			—			(4	)		—			(4	)
Operating (loss) income		(18	)		(25	)		352			(5	)		304
Interest expense		(67	)		(6	)		(9	)		46			(36	)
Non-operating pension and other postretirement benefit credits		—			11			27			—			38
Other income, net		—			47			3			(46	)		4
Equity in income of subsidiaries		284			56			—			(340	)		—
Income before income taxes		199			83			373			(345	)		310
Income tax provision		—			—			(112	)		1			(111	)
Net income including noncontrolling interests		199			83			261			(344	)		199
Net income attributable to noncontrolling interests		—			—			—			—			—
Net income attributable to Resolute Forest Products Inc.	$	199		$	83		$	261		$	(344	)	$	199
Comprehensive income attributable to Resolute Forest Products Inc.	$	205		$	72		$	278		$	(350	)	$	205

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Three Months Ended September 30, 2017
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	716		$	570		$	(401	)	$	885
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			670			360			(402	)		628
Depreciation and amortization		—			18			34			—			52
Distribution costs		—			39			71			—			110
Selling, general and administrative expenses		4			19			20			—			43
Closure costs, impairment and other related charges		—			8			—			—			8
Net gain on disposition of assets		—			—			(2	)		—			(2	)
Operating (loss) income		(4	)		(38	)		87			1			46
Interest expense		(23	)		(3	)		(3	)		16			(13	)
Non-operating pension and other postretirement benefit (costs) credits		—			(1	)		3			—			2
Other income, net		—			20			2			(16	)		6
Equity in income (loss) of subsidiaries		51			(3	)		—			(48	)		—
Income (loss) before income taxes		24			(25	)		89			(47	)		41
Income tax provision		—			—			(15	)		—			(15	)
Net income (loss) including noncontrolling interests		24			(25	)		74			(47	)		26
Net income attributable to noncontrolling interests		—			—			(2	)		—			(2	)
Net income (loss) attributable to Resolute Forest Products Inc.	$	24		$	(25	)	$	72		$	(47	)	$	24
Comprehensive income (loss) attributable to Resolute Forest Products Inc.	$	15		$	(41	)	$	79		$	(38	)	$	15

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
For the Nine Months Ended September 30, 2017
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	2,131		$	1,660		$	(1,176	)	$	2,615
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			2,030			1,091			(1,176	)		1,945
Depreciation and amortization		—			55			98			—			153
Distribution costs		—			119			210			(1	)		328
Selling, general and administrative expenses		18			53			51			—			122
Closure costs, impairment and other related charges		—			72			8			—			80
Net gain on disposition of assets		—			—			(2	)		—			(2	)
Operating (loss) income		(18	)		(198	)		204			1			(11	)
Interest expense		(65	)		(7	)		(9	)		45			(36	)
Non-operating pension and other postretirement benefit credits		—			—			6			—			6
Other income, net		—			53			3			(45	)		11
Equity in loss of subsidiaries		(14	)		(2	)		—			16			—
(Loss) income before income taxes		(97	)		(154	)		204			17			(30	)
Income tax provision		—			(1	)		(62	)		—			(63	)
Net (loss) income including noncontrolling interests		(97	)		(155	)		142			17			(93	)
Net income attributable to noncontrolling interests		—			—			(4	)		—			(4	)
Net (loss) income attributable to Resolute Forest Products Inc.	$	(97	)	$	(155	)	$	138		$	17		$	(97	)
Comprehensive (loss) income attributable to Resolute Forest Products Inc.	$	(91	)	$	(173	)	$	162		$	11		$	(91	)

Condensed Consolidating Balance Sheets

CONDENSED CONSOLIDATING BALANCE SHEET
As of September 30, 2018
(Unaudited, in millions)	Parent		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Consolidating Adjustments			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	64	$	8	$	—		$	72
Accounts receivable, net		—		350		127		—			477
Accounts receivable from affiliates		—		566		1,008		(1,574	)		—
Inventories, net		—		195		330		(14	)		511
Assets held for sale		—		228		14		—			242
Note, advance and interest receivable from parent		—		419		—		(419	)		—
Notes and interest receivable from affiliates		—		31		—		(31	)		—
Other current assets		—		14		31		—			45
Total current assets		—		1,867		1,518		(2,038	)		1,347
Fixed assets, net		—		554		991		—			1,545
Amortizable intangible assets, net		—		12		50		—			62
Goodwill		—		81		—		—			81
Deferred income tax assets		—		1		920		3			924
Note receivable from parent		—		488		—		(488	)		—
Note receivable from affiliate		—		113		—		(113	)		—
Investments in consolidated subsidiaries and affiliates		4,229		2,167		—		(6,396	)		—
Other assets		—		107		79		—			186
Total assets	$	4,229	$	5,390	$	3,558	$	(9,032	)	$	4,145
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities	$	14	$	163	$	270	$	—		$	447
Current portion of long-term debt		—		1		—		—			1
Liabilities associated with assets held for sale		—		79		—		—			79
Accounts payable to affiliates		566		1,053		—		(1,619	)		—
Note, advance and interest payable to subsidiaries		419		—		—		(419	)		—
Notes and interest payable to affiliate		—		—		31		(31	)		—
Total current liabilities		999		1,296		301		(2,069	)		527
Long-term debt, net of current portion		592		52		—		—			644
Note payable to subsidiary		488		—		—		(488	)		—
Note payable to affiliate		—		—		113		(113	)		—
Pension and other postretirement benefit obligations		—		318		772		—			1,090
Deferred income tax liabilities		—		—		1		—			1
Other liabilities		6		22		45		—			73
Total liabilities		2,085		1,688		1,232		(2,670	)		2,335
Total equity		2,144		3,702		2,326		(6,362	)		1,810
Total liabilities and equity	$	4,229	$	5,390	$	3,558	$	(9,032	)	$	4,145

CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2017
(Unaudited, in millions)	Parent		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Consolidating Adjustments			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	3	$	3	$	—		$	6
Accounts receivable, net		—		319		160		—			479
Accounts receivable from affiliates		—		535		729		(1,264	)		—
Inventories, net		—		243		292		(9	)		526
Note, advance and interest receivable from parent		—		538		—		(538	)		—
Notes and interest receivable from affiliates		—		32		—		(32	)		—
Other current assets		—		16		17		—			33
Total current assets		—		1,686		1,201		(1,843	)		1,044
Fixed assets, net		—		692		1,024		—			1,716
Amortizable intangible assets, net		—		13		52		—			65
Goodwill		—		81		—		—			81
Deferred income tax assets		—		1		1,073		2			1,076
Notes receivable from parent		—		330		—		(330	)		—
Note receivable from affiliate		—		116		—		(116	)		—
Investments in consolidated subsidiaries and affiliates		3,939		2,111		—		(6,050	)		—
Other assets		—		98		67		—			165
Total assets	$	3,939	$	5,128	$	3,417	$	(8,337	)	$	4,147
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities	$	4	$	171	$	245	$	—		$	420
Current portion of long-term debt		—		1		—		—			1
Accounts payable to affiliates		536		728		—		(1,264	)		—
Note, advance and interest payable to subsidiaries		538		—		—		(538	)		—
Notes and interest payable to affiliate		—		—		32		(32	)		—
Total current liabilities		1,078		900		277		(1,834	)		421
Long-term debt, net of current portion		592		196		—		—			788
Note payable to subsidiary		330		—		—		(330	)		—
Note payable to affiliate		—		—		116		(116	)		—
Pension and other postretirement benefit obligations		—		378		879		—			1,257
Deferred income tax liabilities		—		—		13		—			13
Other liabilities		5		24		39		—			68
Total liabilities		2,005		1,498		1,324		(2,280	)		2,547
Total equity		1,934		3,630		2,093		(6,057	)		1,600
Total liabilities and equity	$	3,939	$	5,128	$	3,417	$	(8,337	)	$	4,147

Condensed Consolidating Statements of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2018
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash provided by operating activities	$	—		$	291		$	60		$	—		$	351
Cash flows from investing activities:
Cash invested in fixed assets		—			(31	)		(63	)		—			(94	)
Disposition of assets		—			—			2			—			2
Decrease in countervailing duty cash deposits on supercalendered paper, net		—			13			—			—			13
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber		—			(62	)		—			—			(62	)
Increase in countervailing duty cash deposits on uncoated groundwood paper		—			(6	)		—			—			(6	)
Advance to parent		—			(1	)		—			1			—
Decrease in notes receivable from affiliate		—			1			—			(1	)		—
Net cash used in investing activities		—			(86	)		(61	)		—			(147	)
Cash flows from financing activities:
Net repayments under revolving credit facilities		—			(144	)		—			—			(144	)
Payments of financing and credit facility fees		(1	)		—			—			—			(1	)
Advance from subsidiary		1			—			—			(1	)		—
Decrease in notes payable to affiliate		—			—			(1	)		1			—
Net cash used in financing activities		—			(144	)		(1	)		—			(145	)
Effect of exchange rate changes on cash and cash equivalents, and restricted cash		—			—			(1	)		—			(1	)
Net increase (decrease) in cash and cash equivalents, and restricted cash		—			61			(3	)		—			58
Cash and cash equivalents, and restricted cash:
Beginning of period		—			3			46			—			49
End of period	$	—		$	64		$	43		$	—		$	107
Cash and cash equivalents, and restricted cash at period end:
Cash and cash equivalents	$	—		$	64		$	8		$	—		$	72
Restricted cash		—			—			35			—			35

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2017
(Unaudited, in millions)	Parent		Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash provided by operating activities	$	—	$	69		$	30		$	—		$	99
Cash flows from investing activities:
Cash invested in fixed assets		—		(106	)		(30	)		—			(136	)
Disposition of assets		—		—			3			—			3
Increase in countervailing duty cash deposits on supercalendered paper		—		(17	)		—			—			(17	)
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber		—		(18	)		—			—			(18	)
Decrease in notes receivable from affiliate		—		5			—			(5	)		—
Net cash used in investing activities		—		(136	)		(27	)		(5	)		(168	)
Cash flows from financing activities:
Net borrowings under revolving credit facilities		—		70			—			—			70
Payments of debt		—		(1	)		—			—			(1	)
Decrease in notes payable to affiliate		—		—			(5	)		5			—
Net cash provided by (used in) financing activities		—		69			(5	)		5			69
Effect of exchange rate changes on cash and cash equivalents, and restricted cash		—		—			6			—			6
Net increase in cash and cash equivalents, and restricted cash		—		2			4			—			6
Cash and cash equivalents, and restricted cash:
Beginning of period		—		2			71			—			73
End of period	$	—	$	4		$	75		$	—		$	79
Cash and cash equivalents, and restricted cash at period end:
Cash and cash equivalents	$	—	$	4		$	34		$	—		$	38
Restricted cash		—		—			41			—			41

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Organization and Basis of Presentation - Nature of Operations (Details) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018 USD ($) site country	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) site country	Sep. 30, 2017 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of countries products are marketed in (approximate) | country		70		70
Number of manufacturing facilities (approximate) | site		40		40
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cost of sales, excluding depreciation, amortization and distribution costs		$ 628	$ 628	$ 1,881	$ 1,945
Selling, general and administrative expenses		40	43	125	122
Closure costs, impairment and other related charges		0	8	1	80
Operating income (loss)	[1]	135	46	304	(11)
Non-operating pension and other postretirement benefit credits (costs)		13	2	38	6
Before accounting standards update [Member] | Accounting Standards Update 2017-07 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cost of sales, excluding depreciation, amortization and distribution costs		615	624	1,842	1,936
Selling, general and administrative expenses				126	123
Closure costs, impairment and other related charges		0	10	1	82
Operating income (loss)		148	48	342	(5)
Non-operating pension and other postretirement benefit credits (costs)		0	0	0	0
Effect of change [Member] | Accounting Standards Update 2017-07 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cost of sales, excluding depreciation, amortization and distribution costs		13	4	39	9
Selling, general and administrative expenses				(1)	(1)
Closure costs, impairment and other related charges		0	(2)	0	(2)
Operating income (loss)		(13)	(2)	(38)	(6)
Non-operating pension and other postretirement benefit credits (costs)		$ 13	$ 2	$ 38	$ 6

[1] In the first quarter of 2018, we changed our presentation of operating income in accordance with FASB ASU 2017-07, to present only the service cost component of net periodic pension cost and OPEB cost in operating expenses (together with other employee compensation costs arising during the period). The non-operating pension and OPEB costs, presented under “corporate and other,” are reported separately outside any subtotal of operating income. Prior period amounts have been reclassified to conform to the 2018 presentation. See Note 1. Organization and Basis of Presentation – New accounting pronouncements adopted – ASU 2017-07 “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” for more information.

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Closure Costs, Impairment and Other Related Charges (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Restructuring Cost and Reserve [Line Items]
Impairment of assets			$ 0		$ 60
Accelerated depreciation			6		6
Severance and other costs			2		14
Total		$ 0	8	$ 1	80
Pulp mill at Coosa Pines, Alabama [Member]
Restructuring Cost and Reserve [Line Items]
Impairment of assets	[1]		0		55
Accelerated depreciation	[1]		0		0
Severance and other costs	[1]		0		0
Total	[1]		0		55
Permanent closure at paper machine in Catawba, South Carolina [Member]
Restructuring Cost and Reserve [Line Items]
Impairment of assets			0		5
Accelerated depreciation			0		0
Severance and other costs			0		4
Total			0		9
Permanent closure at paper machines in Calhoun, Tennessee [Member]
Restructuring Cost and Reserve [Line Items]
Impairment of assets			0		0
Accelerated depreciation			6		6
Severance and other costs			2		2
Total			8		8
Permanent closure at paper mill in Mokpo, South Korea [Member]
Restructuring Cost and Reserve [Line Items]
Impairment of assets			0		0
Accelerated depreciation			0		0
Severance and other costs			0		7
Total			0		7
Other [Member]
Restructuring Cost and Reserve [Line Items]
Impairment of assets			0		0
Accelerated depreciation			0		0
Severance and other costs			0		1
Total			$ 0		$ 1

[1] As a result of the continued deterioration of actual and projected cash flows, we recorded long-lived asset impairment charges of $55 million for the nine months ended September 30, 2017, to reduce the carrying value of the assets to their estimated fair value, which was determined using the market approach, by reference to market transaction prices for similar assets. The fair value measurement is considered a Level 3 measurement due to the significance of its unobservable inputs.

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Closure Costs, Impairment and Other Related Charges - Additional Information (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Restructuring Cost and Reserve [Line Items]
Closure costs, impairment and other related charges		$ 0	$ 8	$ 1	$ 80
Long-lived asset impairment charges			0		60
Pulp mill at Coosa Pines, Alabama [Member]
Restructuring Cost and Reserve [Line Items]
Closure costs, impairment and other related charges	[1]		0		55
Long-lived asset impairment charges	[1]		$ 0		$ 55

[1] As a result of the continued deterioration of actual and projected cash flows, we recorded long-lived asset impairment charges of $55 million for the nine months ended September 30, 2017, to reduce the carrying value of the assets to their estimated fair value, which was determined using the market approach, by reference to market transaction prices for similar assets. The fair value measurement is considered a Level 3 measurement due to the significance of its unobservable inputs.

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Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) by Component (Net of Tax) (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance				$ (780)
Other comprehensive (loss) income before reclassifications				(3)
Amounts reclassified from accumulated other comprehensive income (loss)	[1]			9
Other comprehensive income (loss), net of tax		$ 0	$ (9)	6	$ 6
Ending balance		(774)		(774)
Unamortized Prior Service Credits [Member]
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance				52
Other comprehensive (loss) income before reclassifications				(5)
Amounts reclassified from accumulated other comprehensive income (loss)	[1]			(12)
Other comprehensive income (loss), net of tax				(17)
Ending balance		35		35
Unamortized Actuarial Losses [Member]
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance				(826)
Other comprehensive (loss) income before reclassifications				2
Amounts reclassified from accumulated other comprehensive income (loss)	[1]			21
Other comprehensive income (loss), net of tax				23
Ending balance		(803)		(803)
Foreign Currency Translation [Member]
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance				(6)
Other comprehensive (loss) income before reclassifications				0
Amounts reclassified from accumulated other comprehensive income (loss)	[1]			0
Other comprehensive income (loss), net of tax				0
Ending balance		$ (6)		$ (6)

[1] See the table below for details about these reclassifications.

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Accumulated Other Comprehensive Income (Loss) - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items]
Non-operating pension and other postretirement benefit (credits) costs		$ (13)	$ (2)	$ (38)	$ (6)
Income tax (provision) benefit		33	15	111	63
Net of tax		$ (117)	$ (24)	(199)	$ 97
Amounts Reclassified From Accumulated Other Comprehensive Loss [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items]
Net of tax				9
Amounts Reclassified From Accumulated Other Comprehensive Loss [Member] | Unamortized Prior Service Credits [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items]
Non-operating pension and other postretirement benefit (credits) costs	[1]			(12)
Income tax (provision) benefit				0
Net of tax				(12)
Amounts Reclassified From Accumulated Other Comprehensive Loss [Member] | Unamortized Actuarial Losses, Portion Relating to Amortization of Actuarial Gains (Losses) [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items]
Non-operating pension and other postretirement benefit (credits) costs	[1]			26
Amounts Reclassified From Accumulated Other Comprehensive Loss [Member] | Unamortized Actuarial Losses, Portion Related to Settlement Gains (Losses) [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items]
Non-operating pension and other postretirement benefit (credits) costs	[1]			1
Amounts Reclassified From Accumulated Other Comprehensive Loss [Member] | Unamortized Actuarial Losses [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items]
Income tax (provision) benefit				(6)
Net of tax				$ 21

[1] These items are included in the computation of net periodic benefit cost related to our pension and OPEB plans summarized in Note 9, “Employee Benefit Plans.”

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Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Earnings Per Share [Abstract]
Net income (loss) attributable to Resolute Forest Products Inc.	$ 117	$ 24	$ 199	$ (97)
Basic weighted-average number of Resolute Forest Products Inc. common shares outstanding	91.3	90.5	91.3	90.4
Dilutive impact of nonvested stock unit awards	2.1	1.1	1.9	0.0
Diluted weighted-average number of Resolute Forest Products Inc. common shares outstanding	93.4	91.6	93.2	90.4
Basic earnings per share (in dollars per share)	$ 1.28	$ 0.27	$ 2.18	$ (1.07)
Diluted earnings per share (in dollars per share)	$ 1.25	$ 0.26	$ 2.14	$ (1.07)
Stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	0.9	1.4	1.3	1.4
Stock unit awards [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	0.0	0.0	0.0	4.3

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Inventories, Net (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Raw materials	$ 99	$ 108
Work in process	39	38
Finished goods	190	175
Mill stores and other supplies	183	205
Inventories, net	$ 511	$ 526

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Inventories, Net - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended	9 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Inventory Disclosure [Abstract]
(Reversal of) inventory write-downs related to closures	$ 11	$ 13	$ (1)	$ 24

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Assets Held for Sale, Net (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Long Lived Assets Held-for-sale [Line Items]
Accounts receivable, net		$ 45		$ 45		$ 0
Inventories, net		70		70		0
Other current assets		5		5		0
Fixed assets, net		121		121		0
Other assets		1		1		0
Total assets held for sale		242		242		0
Accounts payable and accrued liabilities		40		40		0
Pension and other postretirement benefit obligations		34		34		0
Other liabilities		5		5		0
Total liabilities associated with assets held for sale		79		79		0
Assets held for sale, net		163		163		$ 0
Consideration received on disposal of assets				2	$ 3
Net gain on disposition of assets		$ 0	$ 2	$ 4	$ 2
Subsequent Event [Member] | Recycled Bleached Kraft Pulp Mill at Fairmont (West Virginia) [Member]
Long Lived Assets Held-for-sale [Line Items]
Consideration received on disposal of assets	$ 62
Net gain on disposition of assets	40
Subsequent Event [Member] | Paper and pulp mill at Catawba (South Carolina) [Member]
Long Lived Assets Held-for-sale [Line Items]
Consideration received on disposal of assets	260
Total consideration received on disposal of assets	300
Consideration received on disposal of assets from liabilities assumed	$ 40

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Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Trade accounts payable	$ 331	$ 306
Payroll, bonuses and severance payable	55	55
Accrued interest	14	5
Pension and other postretirement benefit obligations	18	18
Income and other taxes payable	10	10
Environmental liabilities	2	2
Other	17	24
Accounts payable and accrued liabilities	$ 447	$ 420

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Long-Term Debt - Long-Term Debt Including Current Portion (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Borrowings under revolving credit facilities	$ 0	$ 144
Capital lease obligation	7	7
Total debt	645	789
Less: Current portion of long-term debt	(1)	(1)
Long-term debt, net of current portion	644	788
Secured Debt [Member] | Senior Secured Credit Facility [Member]
Debt Instrument [Line Items]
Net carrying amount	46	46
Senior Notes [Member] | Senior Notes Due Two Thousand Twenty-Three [Member]
Debt Instrument [Line Items]
Principal amount	600	600
Deferred financing costs	(5)	(5)
Unamortized discount	(3)	(3)
Net carrying amount	$ 592	$ 592

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Long-Term Debt - 2023 Notes (Details) - Senior Notes [Member] - Senior Notes Due Two Thousand Twenty-Three [Member] - USD ($)	Sep. 30, 2018	Dec. 31, 2017	May 08, 2013
Debt Instrument [Line Items]
Principal amount of debt			$ 600,000,000
Interest rate of notes			5.875%
Fair value of senior notes	$ 615,000,000	$ 622,000,000	$ 594,000,000
Unamortized discount			$ 6,000,000
Effective interest rate of debt			6.00%
Deferred financing costs			$ 9,000,000

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Long-Term Debt - Senior Secured Credit Facility (Details) - Senior Secured Credit Facility [Member] - USD ($)	Sep. 30, 2018	Sep. 07, 2016
Debt Instrument [Line Items]
Principal amount of debt		$ 185,000,000
Secured Debt [Member]
Debt Instrument [Line Items]
Principal amount of debt		46,000,000
Line of Credit [Member]
Debt Instrument [Line Items]
Credit facility lender commitment amount		$ 139,000,000
Available credit facility borrowing capacity	$ 139,000,000

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Long-Term Debt - ABL Credit Facility (Details) - Revolving Credit Facility [Member] - USD ($)	Sep. 30, 2018	May 22, 2015
Line of Credit Facility [Line Items]
Credit facility lender commitment amount		$ 600,000,000
Available credit facility borrowing capacity	$ 443,000,000
Letters of credit amount outstanding	$ 53,000,000

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Long-Term Debt - Capital Lease Obligation (Details)	9 Months Ended
	Sep. 30, 2018
Debt Disclosure [Abstract]
Length of warehouse capital lease obligation renewal option	20 years

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Employee Benefit Plans - Components of Net Periodic Benefit Cost Relating to Pension and OPEB Plans (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Defined Benefit Plan Disclosure [Line Items]
Non-operating pension and other postretirement benefit costs (credits)	$ (13)	$ (2)	$ (38)	$ (6)
Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest cost	46	51	142	149
Expected return on plan assets	(65)	(66)	(199)	(190)
Amortization of actuarial (gains) losses	9	14	29	42
Amortization of prior service (credits) costs	0	0	(1)	0
Non-operating pension and other postretirement benefit costs (credits)	(10)	(1)	(29)	1
Service cost	5	6	14	15
Net periodic benefit (credits) costs before special events	(5)	5	(15)	16
Curtailment, settlement and other gains (losses)	0	(3)	(1)	(4)
Net periodic benefit cost	(5)	8	(14)	20
OPEB Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest cost	1	2	4	5
Amortization of actuarial (gains) losses	0	(1)	(3)	(4)
Amortization of prior service (credits) costs	(4)	(4)	(11)	(11)
Non-operating pension and other postretirement benefit costs (credits)	(3)	(3)	(10)	(10)
Service cost	0	0	1	1
Net periodic benefit (credits) costs before special events	(3)	(3)	(9)	(9)
Curtailment, settlement and other gains (losses)	0	1	0	1
Net periodic benefit cost	$ (3)	$ (4)	$ (9)	$ (10)

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Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Retirement Benefits [Abstract]
Expense for the defined contribution plans, total	$ 5	$ 5	$ 15	$ 16
Interest cost, statements of operations [Extensible List]			us-gaap:NetPeriodicDefinedBenefitsExpenseReversalOfExpenseExcludingServiceCostComponent
Expected return on plan assets, statements of operations [Extensible List]			us-gaap:NetPeriodicDefinedBenefitsExpenseReversalOfExpenseExcludingServiceCostComponent
Amortization of actuarial gains (losses), statements of operations [Extensible List]			us-gaap:NetPeriodicDefinedBenefitsExpenseReversalOfExpenseExcludingServiceCostComponent
Amortization of prior service costs (credits), statements of operations [Extensible List]			us-gaap:NetPeriodicDefinedBenefitsExpenseReversalOfExpenseExcludingServiceCostComponent
Settlement loss, statements of operations [Extensible List]			us-gaap:NetPeriodicDefinedBenefitsExpenseReversalOfExpenseExcludingServiceCostComponent

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Income Taxes - Reconciliation of Statutory Tax Benefit (Provision) to Income Tax Benefit (Provision) (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Tax Disclosure [Abstract]
Income (loss) before income taxes		$ 150	$ 41	$ 310	$ (30)
Income tax provision:
Expected income tax (provision) benefit		(31)	(9)	(65)	6
Changes resulting from:
U.S. federal tax rate change reconciliation		0	(5)	0	5
Valuation allowance	[1]	32	(19)	40	(94)
Enactment of change in foreign tax rate		0	0	0	(12)
Foreign exchange		2	8	(12)	9
State income taxes, net of federal income tax benefit		(1)	1	1	7
Foreign tax rate differences	[2]	(35)	7	(72)	15
Other, net		0	2	(3)	1
Income tax provision		$ (33)	$ (15)	$ (111)	$ (63)

[1] Relates to our U.S. operations for the three and nine months ended September 30, 2018, and the three months ended September 30, 2017, and primarily to our U.S. operations for the nine months ended September 30, 2017.

[2] Includes an income tax provision attributable to the GILTI inclusion of $28 million and $53 million, before valuation allowance, for the three months and nine months ended September 30, 2018, respectively.

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Income Taxes - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Jan. 01, 2017
Income Tax Disclosure [Abstract]
Income tax provision attributable to GILTI	$ 28		$ 53
U.S. federal statutory income tax rate (for rate rec)	21.00%	21.00%	21.00%	21.00%
New Accounting Pronouncement, Early Adoption [Line Items]
Deficit	$ 1,095		$ 1,095		$ 1,294
Accounting Standards Update 2016-16 [Member]
New Accounting Pronouncement, Early Adoption [Line Items]
Deficit						$ 3

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Commitments and Contingencies (Details) $ in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2018 CAD ($)	Sep. 30, 2018 CAD ($)	Jan. 16, 2018	Dec. 31, 2017 USD ($)	Nov. 02, 2017	Jun. 30, 2017	Apr. 28, 2017	Oct. 15, 2015	Aug. 03, 2015	Jul. 31, 2012
Loss Contingencies [Line Items]
Preliminary countervailing duty rate on U.S. imports of uncoated groundwood paper produced at Canadian mills				4.42%
Accumulated countervailing duty cash deposits made on uncoated groundwood paper	$ 6
Preliminary countervailing duty rate on Canadian softwood lumber imported to the U.S. market								12.82%
Final determination countervailing duty rate on Canadian softwood lumber imported to the U.S. market						14.70%
Accumulated countervailing cash deposits made on softwood lumber exports	67
Preliminary anti-dumping rate on Canadian softwood lumber imported to the U.S. market							4.59%
Final determination anti-dumping rate on Canadian softwood lumber imported to the U.S. market						3.20%
Accumulated anti-dumping cash deposits made on softwood lumber exports	21
Countervailing duty rate on supercalendered paper exports									17.87%	2.04%
Countervailing duty rate on supercalendered paper exports, portion considered punitive application									17.10%
Countervailing duty cash deposits made on supercalendered paper exports refunded	25
Countervailing duty cash deposits made on supercalendered paper exports remaining to be refunded	36
Increase to pension and other postretirement benefit obligations	1,090				$ 1,257
Increase to accumulated other comprehensive loss	774				780
Maximum deficit from partial wind-up of pension plans to be funded	115	$ 150
Environmental Remediation Obligations [Abstract]
Environmental liabilities	8				8
Asset retirement obligations	23				$ 24
Softwood Lumber Duties Investigations [Member]
Loss Contingencies [Line Items]
Contingent loss	0
Fibrek [Member]
Loss Contingencies [Line Items]
Percentage of outstanding shares acquired											25.40%
Amount paid, contingent consideration, business combination	0
Amount accrued to be contingently distributed	11		$ 14
Maximum [Member]
Loss Contingencies [Line Items]
Yearly countervailing duty cash deposits on imports of Canadian softwood lumber imported to the U.S. market	65
Yearly anti-dumping cash deposits on imports of Canadian softwood lumber imported to the U.S. market	15
Jedson Case Initial [Member]
Loss Contingencies [Line Items]
Complaint damages sought, value	10
Jedson Case Amendment [Member]
Loss Contingencies [Line Items]
Complaint damages sought, value	20
U.S. OPEB litigation [Member]
Loss Contingencies [Line Items]
Increase to pension and other postretirement benefit obligations	3
Increase to accumulated other comprehensive loss	$ 3

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Segment Information - Schedule of Segment Reporting Information (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Segment Reporting Information [Line Items]
Sales		$ 974	$ 885	$ 2,824	$ 2,615
Depreciation and amortization		54	52	161	153
Operating income (loss)	[1]	135	46	304	(11)
Operating segments [Member] | Market Pulp [Member]
Segment Reporting Information [Line Items]
Sales	[2]	288	227	809	649
Depreciation and amortization	[2]	7	8	22	24
Operating income (loss)	[1],[2]	57	19	131	42
Operating segments [Member] | Tissue [Member]
Segment Reporting Information [Line Items]
Sales	[3]	38	21	95	61
Depreciation and amortization	[3]	5	2	11	4
Operating income (loss)	[1],[3]	(10)	(3)	(21)	(4)
Operating segments [Member] | Wood Products [Member]
Segment Reporting Information [Line Items]
Sales	[4]	203	219	666	593
Depreciation and amortization	[4]	8	9	23	25
Operating income (loss)	[1],[4]	45	64	177	129
Operating segments [Member] | Newsprint [Member]
Segment Reporting Information [Line Items]
Sales		232	199	660	626
Depreciation and amortization		16	16	49	49
Operating income (loss)	[1]	32	(6)	46	(17)
Operating segments [Member] | Specialty Papers [Member]
Segment Reporting Information [Line Items]
Sales		213	219	594	686
Depreciation and amortization		12	11	36	34
Operating income (loss)	[1]	26	7	23	4
Operating segments [Member] | Segment Total [Member]
Segment Reporting Information [Line Items]
Sales		974	885	2,824	2,615
Depreciation and amortization		48	46	141	136
Operating income (loss)	[1]	150	81	356	154
Corporate, non-segment [Member] | Corporate and Other [Member]
Segment Reporting Information [Line Items]
Sales		0	0	0	0
Depreciation and amortization		6	6	20	17
Operating income (loss)	[1]	$ (15)	$ (35)	$ (52)	$ (165)

[1] In the first quarter of 2018, we changed our presentation of operating income in accordance with FASB ASU 2017-07, to present only the service cost component of net periodic pension cost and OPEB cost in operating expenses (together with other employee compensation costs arising during the period). The non-operating pension and OPEB costs, presented under “corporate and other,” are reported separately outside any subtotal of operating income. Prior period amounts have been reclassified to conform to the 2018 presentation. See Note 1. Organization and Basis of Presentation – New accounting pronouncements adopted – ASU 2017-07 “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” for more information.

[2] Inter-segment sales of $10 million and $9 million for the three months ended September 30, 2018 and 2017, respectively, and $29 million and $28 million for the nine months ended September 30, 2018 and 2017, respectively, which are transacted at cost, were excluded from market pulp sales.

[3] The operating results of our Calhoun tissue operations, previously recorded under “corporate and other,” have been recorded in our tissue segment since April 1, 2018.

[4] Wood products sales to our joint ventures, which are transacted at arm’s length negotiated prices, were $7 million and $6 million for the three months ended September 30, 2018 and 2017, respectively, and $23 million and $16 million for the nine months ended September 30, 2018 and 2017, respectively.

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Segment Information - Schedule of Segment Reporting Information - Additional Information (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Segment Reporting Information [Line Items]
Sales		$ 974	$ 885	$ 2,824	$ 2,615
Market Pulp [Member] | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Sales		10	9	29	28
Market Pulp [Member] | Operating segments [Member]
Segment Reporting Information [Line Items]
Sales	[1]	288	227	809	649
Wood Products [Member] | Operating segments [Member]
Segment Reporting Information [Line Items]
Sales	[2]	203	219	666	593
Joint venture sales		$ 7	$ 6	$ 23	$ 16

[1] Inter-segment sales of $10 million and $9 million for the three months ended September 30, 2018 and 2017, respectively, and $29 million and $28 million for the nine months ended September 30, 2018 and 2017, respectively, which are transacted at cost, were excluded from market pulp sales.

[2] Wood products sales to our joint ventures, which are transacted at arm’s length negotiated prices, were $7 million and $6 million for the three months ended September 30, 2018 and 2017, respectively, and $23 million and $16 million for the nine months ended September 30, 2018 and 2017, respectively.

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Condensed Consolidating Financial Information - Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Condensed Financial Statements, Captions [Line Items]
Sales		$ 974	$ 885	$ 2,824	$ 2,615
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		628	628	1,881	1,945
Depreciation and amortization		54	52	161	153
Distribution costs		117	110	356	328
Selling, general and administrative expenses		40	43	125	122
Closure costs, impairment and other related charges		0	8	1	80
Net gain on disposition of assets		0	(2)	(4)	(2)
Operating income (loss)	[1]	135	46	304	(11)
Interest expense		(12)	(13)	(36)	(36)
Non-operating pension and other postretirement benefit credits (costs)		13	2	38	6
Other income (expense), net		14	6	4	11
Equity in income (loss) of subsidiaries		0	0	0	0
Income (loss) before income taxes		150	41	310	(30)
Income tax benefit (provision)		(33)	(15)	(111)	(63)
Net income (loss) including noncontrolling interests		117	26	199	(93)
Net (income) loss attributable to noncontrolling interests		0	(2)	0	(4)
Net income (loss) attributable to Resolute Forest Products Inc.		117	24	199	(97)
Comprehensive income (loss) attributable to Resolute Forest Products Inc.		117	15	205	(91)
Parent [Member]
Condensed Financial Statements, Captions [Line Items]
Sales		0	0	0	0
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		0	0	0	0
Depreciation and amortization		0	0	0	0
Distribution costs		0	0	0	0
Selling, general and administrative expenses		6	4	18	18
Closure costs, impairment and other related charges			0	0	0
Net gain on disposition of assets			0	0	0
Operating income (loss)		(6)	(4)	(18)	(18)
Interest expense		(20)	(23)	(67)	(65)
Non-operating pension and other postretirement benefit credits (costs)		0	0	0	0
Other income (expense), net		0	0	0	0
Equity in income (loss) of subsidiaries		143	51	284	(14)
Income (loss) before income taxes		117	24	199	(97)
Income tax benefit (provision)		0	0	0	0
Net income (loss) including noncontrolling interests		117	24	199	(97)
Net (income) loss attributable to noncontrolling interests		0	0	0	0
Net income (loss) attributable to Resolute Forest Products Inc.		117	24	199	(97)
Comprehensive income (loss) attributable to Resolute Forest Products Inc.		117	15	205	(91)
Guarantor Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Sales		808	716	2,348	2,131
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		708	670	2,145	2,030
Depreciation and amortization		20	18	61	55
Distribution costs		42	39	119	119
Selling, general and administrative expenses		17	19	48	53
Closure costs, impairment and other related charges			8	0	72
Net gain on disposition of assets			0	0	0
Operating income (loss)		21	(38)	(25)	(198)
Interest expense		(2)	(3)	(6)	(7)
Non-operating pension and other postretirement benefit credits (costs)		4	(1)	11	0
Other income (expense), net		14	20	47	53
Equity in income (loss) of subsidiaries		7	(3)	56	(2)
Income (loss) before income taxes		44	(25)	83	(154)
Income tax benefit (provision)		0	0	0	(1)
Net income (loss) including noncontrolling interests		44	(25)	83	(155)
Net (income) loss attributable to noncontrolling interests		0	0	0	0
Net income (loss) attributable to Resolute Forest Products Inc.		44	(25)	83	(155)
Comprehensive income (loss) attributable to Resolute Forest Products Inc.		38	(41)	72	(173)
Non-Guarantor Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Sales		609	570	1,875	1,660
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		366	360	1,128	1,091
Depreciation and amortization		34	34	100	98
Distribution costs		75	71	239	210
Selling, general and administrative expenses		17	20	59	51
Closure costs, impairment and other related charges			0	1	8
Net gain on disposition of assets			(2)	(4)	(2)
Operating income (loss)		117	87	352	204
Interest expense		(3)	(3)	(9)	(9)
Non-operating pension and other postretirement benefit credits (costs)		9	3	27	6
Other income (expense), net		13	2	3	3
Equity in income (loss) of subsidiaries		0	0	0	0
Income (loss) before income taxes		136	89	373	204
Income tax benefit (provision)		(32)	(15)	(112)	(62)
Net income (loss) including noncontrolling interests		104	74	261	142
Net (income) loss attributable to noncontrolling interests		0	(2)	0	(4)
Net income (loss) attributable to Resolute Forest Products Inc.		104	72	261	138
Comprehensive income (loss) attributable to Resolute Forest Products Inc.		110	79	278	162
Consolidating Adjustments [Member]
Condensed Financial Statements, Captions [Line Items]
Sales		(443)	(401)	(1,399)	(1,176)
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		(446)	(402)	(1,392)	(1,176)
Depreciation and amortization		0	0	0	0
Distribution costs		0	0	(2)	(1)
Selling, general and administrative expenses		0	0	0	0
Closure costs, impairment and other related charges			0	0	0
Net gain on disposition of assets			0	0	0
Operating income (loss)		3	1	(5)	1
Interest expense		13	16	46	45
Non-operating pension and other postretirement benefit credits (costs)		0	0	0	0
Other income (expense), net		(13)	(16)	(46)	(45)
Equity in income (loss) of subsidiaries		(150)	(48)	(340)	16
Income (loss) before income taxes		(147)	(47)	(345)	17
Income tax benefit (provision)		(1)	0	1	0
Net income (loss) including noncontrolling interests		(148)	(47)	(344)	17
Net (income) loss attributable to noncontrolling interests		0	0	0	0
Net income (loss) attributable to Resolute Forest Products Inc.		(148)	(47)	(344)	17
Comprehensive income (loss) attributable to Resolute Forest Products Inc.		$ (148)	$ (38)	$ (350)	$ 11

[1] In the first quarter of 2018, we changed our presentation of operating income in accordance with FASB ASU 2017-07, to present only the service cost component of net periodic pension cost and OPEB cost in operating expenses (together with other employee compensation costs arising during the period). The non-operating pension and OPEB costs, presented under “corporate and other,” are reported separately outside any subtotal of operating income. Prior period amounts have been reclassified to conform to the 2018 presentation. See Note 1. Organization and Basis of Presentation – New accounting pronouncements adopted – ASU 2017-07 “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” for more information.

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Condensed Consolidating Financial Information - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 72	$ 6	$ 38
Accounts receivable, net	477	479
Accounts receivable from affiliates	0	0
Inventories, net	511	526
Assets held for sale	242	0
Notes, advance and interest receivable from parent	0	0
Notes and interest receivable from affiliates	0	0
Other current assets	45	33
Total current assets	1,347	1,044
Fixed assets, net	1,545	1,716
Amortizable intangible assets, net	62	65
Goodwill	81	81
Deferred income tax assets	924	1,076
Notes receivable from parent	0	0
Notes receivable from affiliates	0	0
Investments in consolidated subsidiaries and affiliates	0	0
Other assets	186	165
Total assets	4,145	4,147
Current liabilities:
Accounts payable and accrued liabilities	447	420
Current portion of long-term debt	1	1
Liabilities associated with assets held for sale	79	0
Accounts payable to affiliates	0	0
Notes, advance and interest payable to subsidiaries	0	0
Notes and interest payable to affiliates	0	0
Total current liabilities	527	421
Long-term debt, net of current portion	644	788
Notes payable to subsidiaries	0	0
Notes payable to affiliates	0	0
Pension and other postretirement benefit obligations	1,090	1,257
Deferred income tax liabilities	1	13
Other liabilities	73	68
Total liabilities	2,335	2,547
Total equity	1,810	1,600	1,629	$ 1,711
Total liabilities and equity	4,145	4,147
Parent [Member]
Current assets:
Cash and cash equivalents	0	0	0
Accounts receivable, net	0	0
Accounts receivable from affiliates	0	0
Inventories, net	0	0
Assets held for sale	0
Notes, advance and interest receivable from parent	0	0
Notes and interest receivable from affiliates	0	0
Other current assets	0	0
Total current assets	0	0
Fixed assets, net	0	0
Amortizable intangible assets, net	0	0
Goodwill	0	0
Deferred income tax assets	0	0
Notes receivable from parent	0	0
Notes receivable from affiliates	0	0
Investments in consolidated subsidiaries and affiliates	4,229	3,939
Other assets	0	0
Total assets	4,229	3,939
Current liabilities:
Accounts payable and accrued liabilities	14	4
Current portion of long-term debt	0	0
Liabilities associated with assets held for sale	0
Accounts payable to affiliates	566	536
Notes, advance and interest payable to subsidiaries	419	538
Notes and interest payable to affiliates	0	0
Total current liabilities	999	1,078
Long-term debt, net of current portion	592	592
Notes payable to subsidiaries	488	330
Notes payable to affiliates	0	0
Pension and other postretirement benefit obligations	0	0
Deferred income tax liabilities	0	0
Other liabilities	6	5
Total liabilities	2,085	2,005
Total equity	2,144	1,934
Total liabilities and equity	4,229	3,939
Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents	64	3	4
Accounts receivable, net	350	319
Accounts receivable from affiliates	566	535
Inventories, net	195	243
Assets held for sale	228
Notes, advance and interest receivable from parent	419	538
Notes and interest receivable from affiliates	31	32
Other current assets	14	16
Total current assets	1,867	1,686
Fixed assets, net	554	692
Amortizable intangible assets, net	12	13
Goodwill	81	81
Deferred income tax assets	1	1
Notes receivable from parent	488	330
Notes receivable from affiliates	113	116
Investments in consolidated subsidiaries and affiliates	2,167	2,111
Other assets	107	98
Total assets	5,390	5,128
Current liabilities:
Accounts payable and accrued liabilities	163	171
Current portion of long-term debt	1	1
Liabilities associated with assets held for sale	79
Accounts payable to affiliates	1,053	728
Notes, advance and interest payable to subsidiaries	0	0
Notes and interest payable to affiliates	0	0
Total current liabilities	1,296	900
Long-term debt, net of current portion	52	196
Notes payable to subsidiaries	0	0
Notes payable to affiliates	0	0
Pension and other postretirement benefit obligations	318	378
Deferred income tax liabilities	0	0
Other liabilities	22	24
Total liabilities	1,688	1,498
Total equity	3,702	3,630
Total liabilities and equity	5,390	5,128
Non-Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents	8	3	34
Accounts receivable, net	127	160
Accounts receivable from affiliates	1,008	729
Inventories, net	330	292
Assets held for sale	14
Notes, advance and interest receivable from parent	0	0
Notes and interest receivable from affiliates	0	0
Other current assets	31	17
Total current assets	1,518	1,201
Fixed assets, net	991	1,024
Amortizable intangible assets, net	50	52
Goodwill	0	0
Deferred income tax assets	920	1,073
Notes receivable from parent	0	0
Notes receivable from affiliates	0	0
Investments in consolidated subsidiaries and affiliates	0	0
Other assets	79	67
Total assets	3,558	3,417
Current liabilities:
Accounts payable and accrued liabilities	270	245
Current portion of long-term debt	0	0
Liabilities associated with assets held for sale	0
Accounts payable to affiliates	0	0
Notes, advance and interest payable to subsidiaries	0	0
Notes and interest payable to affiliates	31	32
Total current liabilities	301	277
Long-term debt, net of current portion	0	0
Notes payable to subsidiaries	0	0
Notes payable to affiliates	113	116
Pension and other postretirement benefit obligations	772	879
Deferred income tax liabilities	1	13
Other liabilities	45	39
Total liabilities	1,232	1,324
Total equity	2,326	2,093
Total liabilities and equity	3,558	3,417
Consolidating Adjustments [Member]
Current assets:
Cash and cash equivalents	0	0	$ 0
Accounts receivable, net	0	0
Accounts receivable from affiliates	(1,574)	(1,264)
Inventories, net	(14)	(9)
Assets held for sale	0
Notes, advance and interest receivable from parent	(419)	(538)
Notes and interest receivable from affiliates	(31)	(32)
Other current assets	0	0
Total current assets	(2,038)	(1,843)
Fixed assets, net	0	0
Amortizable intangible assets, net	0	0
Goodwill	0	0
Deferred income tax assets	3	2
Notes receivable from parent	(488)	(330)
Notes receivable from affiliates	(113)	(116)
Investments in consolidated subsidiaries and affiliates	(6,396)	(6,050)
Other assets	0	0
Total assets	(9,032)	(8,337)
Current liabilities:
Accounts payable and accrued liabilities	0	0
Current portion of long-term debt	0	0
Liabilities associated with assets held for sale	0
Accounts payable to affiliates	(1,619)	(1,264)
Notes, advance and interest payable to subsidiaries	(419)	(538)
Notes and interest payable to affiliates	(31)	(32)
Total current liabilities	(2,069)	(1,834)
Long-term debt, net of current portion	0	0
Notes payable to subsidiaries	(488)	(330)
Notes payable to affiliates	(113)	(116)
Pension and other postretirement benefit obligations	0	0
Deferred income tax liabilities	0	0
Other liabilities	0	0
Total liabilities	(2,670)	(2,280)
Total equity	(6,362)	(6,057)
Total liabilities and equity	$ (9,032)	$ (8,337)

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Condensed Consolidating Financial Information - Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	$ 351	$ 99
Cash flows from investing activities:
Cash invested in fixed assets	(94)	(136)
Disposition of assets	2	3
Decrease (increase) in countervailing duty cash deposits on supercalendered paper, net	13	(17)
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber	(62)	(18)
Increase in countervailing duty cash deposits on uncoated groundwood paper	(6)	0
Advance to parent	0
Increase (decrease) in notes receivable from affiliate	0	0
Net cash provided by (used in) investing activities	(147)	(168)
Cash flows from financing activities:
Net (repayments) borrowings under revolving credit facilities	(144)	70
Payments of financing and credit facility fees	(1)	0
Payments of debt	0	1
Advance from subsidiary	0
Increase (decrease) in notes payable to affiliate	0	0
Net cash provided by (used in) financing activities	(145)	69
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	(1)	6
Net increase (decrease) in cash and cash equivalents, and restricted cash	58	6
Cash and cash equivalents, and restricted cash:
Beginning of period	49	73
End of period	107	79
Cash and cash equivalents, and restricted cash at period end:
Cash and cash equivalents	72	38	$ 6
Restricted cash	35	41
Parent [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	0	0
Cash flows from investing activities:
Cash invested in fixed assets	0	0
Disposition of assets	0	0
Decrease (increase) in countervailing duty cash deposits on supercalendered paper, net	0	0
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber	0	0
Increase in countervailing duty cash deposits on uncoated groundwood paper	0
Advance to parent	0
Increase (decrease) in notes receivable from affiliate	0	0
Net cash provided by (used in) investing activities	0	0
Cash flows from financing activities:
Net (repayments) borrowings under revolving credit facilities	0	0
Payments of financing and credit facility fees	(1)
Payments of debt		0
Advance from subsidiary	1
Increase (decrease) in notes payable to affiliate	0	0
Net cash provided by (used in) financing activities	0	0
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	0	0
Net increase (decrease) in cash and cash equivalents, and restricted cash	0	0
Cash and cash equivalents, and restricted cash:
Beginning of period	0	0
End of period	0	0
Cash and cash equivalents, and restricted cash at period end:
Cash and cash equivalents	0	0	0
Restricted cash	0	0
Guarantor Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	291	69
Cash flows from investing activities:
Cash invested in fixed assets	(31)	(106)
Disposition of assets	0	0
Decrease (increase) in countervailing duty cash deposits on supercalendered paper, net	13	(17)
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber	(62)	(18)
Increase in countervailing duty cash deposits on uncoated groundwood paper	(6)
Advance to parent	(1)
Increase (decrease) in notes receivable from affiliate	(1)	(5)
Net cash provided by (used in) investing activities	(86)	(136)
Cash flows from financing activities:
Net (repayments) borrowings under revolving credit facilities	(144)	70
Payments of financing and credit facility fees	0
Payments of debt		1
Advance from subsidiary	0
Increase (decrease) in notes payable to affiliate	0	0
Net cash provided by (used in) financing activities	(144)	69
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	0	0
Net increase (decrease) in cash and cash equivalents, and restricted cash	61	2
Cash and cash equivalents, and restricted cash:
Beginning of period	3	2
End of period	64	4
Cash and cash equivalents, and restricted cash at period end:
Cash and cash equivalents	64	4	3
Restricted cash	0	0
Non-Guarantor Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	60	30
Cash flows from investing activities:
Cash invested in fixed assets	(63)	(30)
Disposition of assets	2	3
Decrease (increase) in countervailing duty cash deposits on supercalendered paper, net	0	0
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber	0	0
Increase in countervailing duty cash deposits on uncoated groundwood paper	0
Advance to parent	0
Increase (decrease) in notes receivable from affiliate	0	0
Net cash provided by (used in) investing activities	(61)	(27)
Cash flows from financing activities:
Net (repayments) borrowings under revolving credit facilities	0	0
Payments of financing and credit facility fees	0
Payments of debt		0
Advance from subsidiary	0
Increase (decrease) in notes payable to affiliate	(1)	(5)
Net cash provided by (used in) financing activities	(1)	(5)
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	(1)	6
Net increase (decrease) in cash and cash equivalents, and restricted cash	(3)	4
Cash and cash equivalents, and restricted cash:
Beginning of period	46	71
End of period	43	75
Cash and cash equivalents, and restricted cash at period end:
Cash and cash equivalents	8	34	3
Restricted cash	35	41
Consolidating Adjustments [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	0	0
Cash flows from investing activities:
Cash invested in fixed assets	0	0
Disposition of assets	0	0
Decrease (increase) in countervailing duty cash deposits on supercalendered paper, net	0	0
Increase in countervailing and anti-dumping duty cash deposits on softwood lumber	0	0
Increase in countervailing duty cash deposits on uncoated groundwood paper	0
Advance to parent	1
Increase (decrease) in notes receivable from affiliate	1	5
Net cash provided by (used in) investing activities	0	(5)
Cash flows from financing activities:
Net (repayments) borrowings under revolving credit facilities	0	0
Payments of financing and credit facility fees	0
Payments of debt		0
Advance from subsidiary	(1)
Increase (decrease) in notes payable to affiliate	1	5
Net cash provided by (used in) financing activities	0	5
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	0	0
Net increase (decrease) in cash and cash equivalents, and restricted cash	0	0
Cash and cash equivalents, and restricted cash:
Beginning of period	0	0
End of period	0	0
Cash and cash equivalents, and restricted cash at period end:
Cash and cash equivalents	0	0	$ 0
Restricted cash	$ 0	$ 0

XML

Condensed Consolidated Financial Information - Additional Information (Details)	9 Months Ended
	Sep. 30, 2018
Guarantor Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Percentage owned of material U.S. subsidiaries	100.00%

XML

Subsequent Events Subsequent Event (Details)	Nov. 01, 2018 USD ($)
Subsequent Event [Member]
Subsequent Event [Line Items]
Special cash dividend announced	$ 1.50