þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 98-0526415 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification number) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer o
(Do not check if a smaller reporting company) |
Smaller reporting company þ |
Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
Successor | Predecessor | Successor | Predecessor | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||
Sales |
$ | 1,200 | $ | 1,182 | $ | 2,385 | $ | 2,282 | ||||||||||
Costs and expenses: |
||||||||||||||||||
Cost of sales, excluding depreciation, amortization
and cost of timber harvested |
911 | 951 | 1,833 | 1,866 | ||||||||||||||
Depreciation, amortization and cost of timber harvested |
55 | 125 | 109 | 257 | ||||||||||||||
Distribution costs |
141 | 141 | 274 | 278 | ||||||||||||||
Selling, general and administrative expenses |
40 | 39 | 77 | 69 | ||||||||||||||
Closure costs, impairment and other related charges |
4 | 3 | 17 | 8 | ||||||||||||||
Net gain on disposition of assets |
(3 | ) | (4 | ) | (4 | ) | (13 | ) | ||||||||||
Operating income (loss) |
52 | (73 | ) | 79 | (183 | ) | ||||||||||||
Interest expense (contractual interest of $172 and $369
in the three and six months ended June 30, 2010,
respectively) |
(28 | ) | (129 | ) | (58 | ) | (318 | ) | ||||||||||
Other (expense) income, net |
(2 | ) | 41 | 17 | 38 | |||||||||||||
Income (loss) before reorganization items and income
taxes |
22 | (161 | ) | 38 | (463 | ) | ||||||||||||
Reorganization items, net (Note 2) |
| (148 | ) | | (353 | ) | ||||||||||||
Income (loss) before income taxes |
22 | (309 | ) | 38 | (816 | ) | ||||||||||||
Income tax benefit |
39 | 9 | 53 | 10 | ||||||||||||||
Net income (loss) including noncontrolling interests |
61 | (300 | ) | 91 | (806 | ) | ||||||||||||
Net loss attributable to noncontrolling interests |
| 3 | | 9 | ||||||||||||||
Net income (loss) attributable to AbitibiBowater Inc. |
$ | 61 | $ | (297 | ) | $ | 91 | $ | (797 | ) | ||||||||
Net income (loss) per share attributable to
AbitibiBowater Inc. common shareholders: |
||||||||||||||||||
Basic |
$ | 0.63 | $ | (5.15 | ) | $ | 0.94 | $ | (13.83 | ) | ||||||||
Diluted |
0.63 | (5.15 | ) | 0.94 | (13.83 | ) | ||||||||||||
Weighted-average number of AbitibiBowater Inc. common
shares outstanding: |
||||||||||||||||||
Basic |
97.1 | 57.7 | 97.1 | 57.7 | ||||||||||||||
Diluted |
97.1 | 57.7 | 97.1 | 57.7 | ||||||||||||||
1
Successor | ||||||||
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 297 | $ | 319 | ||||
Accounts receivable, net |
935 | 854 | ||||||
Inventories, net |
446 | 438 | ||||||
Assets held for sale |
15 | 698 | ||||||
Deferred income tax assets |
48 | 47 | ||||||
Other current assets |
102 | 88 | ||||||
Total current assets |
1,843 | 2,444 | ||||||
Fixed assets, net |
2,563 | 2,641 | ||||||
Amortizable intangible assets, net |
18 | 19 | ||||||
Deferred income tax assets |
1,812 | 1,736 | ||||||
Other assets |
296 | 316 | ||||||
Total assets |
$ | 6,532 | $ | 7,156 | ||||
Liabilities and equity |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued liabilities |
$ | 581 | $ | 568 | ||||
Liabilities associated with assets held for sale |
| 289 | ||||||
Total current liabilities |
581 | 857 | ||||||
Long-term debt |
713 | 905 | ||||||
Pension and other postretirement projected benefit obligations |
1,254 | 1,272 | ||||||
Deferred income tax liabilities |
78 | 72 | ||||||
Other long-term liabilities |
67 | 63 | ||||||
Total liabilities |
2,693 | 3,169 | ||||||
Commitments and contingencies |
||||||||
Equity: |
||||||||
AbitibiBowater Inc. shareholders equity: |
||||||||
Common stock, $0.001 par value. 114.1 shares issued and 97.1 shares
outstanding as of June 30, 2011 and December 31, 2010 |
| | ||||||
Additional paid-in capital |
3,682 | 3,709 | ||||||
Retained earnings |
91 | | ||||||
Accumulated other comprehensive income |
6 | | ||||||
Treasury stock at cost, 17.0 shares as of June 30, 2011 and December 31, 2010 |
| | ||||||
Total AbitibiBowater Inc. shareholders equity |
3,779 | 3,709 | ||||||
Noncontrolling interests |
60 | 278 | ||||||
Total equity |
3,839 | 3,987 | ||||||
Total liabilities and equity |
$ | 6,532 | $ | 7,156 | ||||
2
Successor | ||||||||||||||||||||||||||||
AbitibiBowater Inc. Shareholders Equity | ||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||
Additional | Other | Non- | ||||||||||||||||||||||||||
Common | Paid-In | Retained | Comprehensive | Treasury | controlling | Total | ||||||||||||||||||||||
Stock | Capital | Earnings | Income | Stock | Interests | Equity | ||||||||||||||||||||||
Balance as of December 31, 2010 |
$ | | $ | 3,709 | $ | | $ | | $ | | $ | 278 | $ | 3,987 | ||||||||||||||
Share-based compensation costs
for equity-classified awards |
| 1 | | | | | 1 | |||||||||||||||||||||
Net income |
| | 91 | | | | 91 | |||||||||||||||||||||
Dividends and distribution
paid to noncontrolling
interests |
| | | | | (19 | ) | (19 | ) | |||||||||||||||||||
Acquisition of noncontrolling
interest (Note 11 and Note 13) |
| (28 | ) | | | | (105 | ) | (133 | ) | ||||||||||||||||||
Disposition of investment in
ACH Limited Partnership (Note
6 and Note 11) |
| | | (8 | ) | | (99 | ) | (107 | ) | ||||||||||||||||||
Other comprehensive income |
| | | 14 | | 5 | 19 | |||||||||||||||||||||
Balance as of June 30, 2011 |
$ | | $ | 3,682 | $ | 91 | $ | 6 | $ | | $ | 60 | $ | 3,839 | ||||||||||||||
Six Months Ended | |||||||||
June 30, | |||||||||
Successor | Predecessor | ||||||||
2011 | 2010 | ||||||||
Net income (loss) including noncontrolling interests |
$ | 91 | $ | (806 | ) | ||||
Other comprehensive income (loss): |
|||||||||
Change in unamortized prior service costs, net of tax of $0 in 2010 |
| 3 | |||||||
Change in unamortized actuarial gains and losses, net of tax of $1 in 2010 |
| (17 | ) | ||||||
Foreign currency translation |
19 | (2 | ) | ||||||
Other comprehensive income (loss), net of tax |
19 | (16 | ) | ||||||
Comprehensive income (loss) including noncontrolling interests |
110 | (822 | ) | ||||||
Less: Comprehensive (income) loss attributable to noncontrolling interests: |
|||||||||
Net loss |
| 9 | |||||||
Foreign currency translation |
(5 | ) | | ||||||
Comprehensive (income) loss attributable to noncontrolling interests |
(5 | ) | 9 | ||||||
Comprehensive income (loss) attributable to AbitibiBowater Inc. |
$ | 105 | $ | (813 | ) | ||||
3
Six Months Ended | |||||||||
June 30, | |||||||||
Successor | Predecessor | ||||||||
2011 | 2010 | ||||||||
Cash flows from operating activities: |
|||||||||
Net income (loss) including noncontrolling interests |
$ | 91 | $ | (806 | ) | ||||
Adjustments to reconcile net income (loss) including noncontrolling interests to
net cash provided by (used in) operating activities: |
|||||||||
Share-based compensation |
1 | 3 | |||||||
Depreciation, amortization and cost of timber harvested |
109 | 257 | |||||||
Closure costs, impairment and other related charges |
16 | 8 | |||||||
Write-downs of inventory |
1 | | |||||||
Deferred income taxes |
(53 | ) | (7 | ) | |||||
Net pension (contributions) expense |
(55 | ) | 6 | ||||||
Net gain on disposition of assets |
(4 | ) | (13 | ) | |||||
Gain on translation of foreign currency denominated deferred income tax assets |
(50 | ) | | ||||||
Gain on extinguishment of debt |
(4 | ) | | ||||||
Amortization of debt discount (premium) and debt issuance costs, net |
| 8 | |||||||
Gain on translation of foreign currency denominated debt |
| (5 | ) | ||||||
Non-cash reorganization items, net |
| 306 | |||||||
Debtor in possession financing costs |
| 5 | |||||||
Changes in working capital: |
|||||||||
Accounts receivable |
(77 | ) | (56 | ) | |||||
Inventories |
(8 | ) | 32 | ||||||
Other current assets |
18 | 25 | |||||||
Accounts payable and accrued liabilities |
4 | 199 | |||||||
Other, net |
26 | 35 | |||||||
Net cash provided by (used in) operating activities |
15 | (3 | ) | ||||||
Cash flows from investing activities: |
|||||||||
Cash invested in fixed assets |
(32 | ) | (26 | ) | |||||
Disposition of investment in ACH Limited Partnership (Note 11) |
296 | | |||||||
Disposition of other assets |
8 | 62 | |||||||
Proceeds from insurance settlement |
4 | | |||||||
Increase in restricted cash |
(3 | ) | (55 | ) | |||||
Increase in deposit requirements for letters of credit, net |
(7 | ) | | ||||||
Net cash provided by (used in) investing activities |
266 | (19 | ) | ||||||
Cash flows from financing activities: |
|||||||||
Dividends and distribution to noncontrolling interests |
(19 | ) | | ||||||
Acquisition of noncontrolling interest (Note 11) |
(15 | ) | | ||||||
Payments of long-term debt |
(269 | ) | | ||||||
Decrease in secured borrowings, net |
| (21 | ) | ||||||
Debtor in possession financing costs |
| (5 | ) | ||||||
Net cash used in financing activities |
(303 | ) | (26 | ) | |||||
Net decrease in cash and cash equivalents |
(22 | ) | (48 | ) | |||||
Cash and cash equivalents: |
|||||||||
Beginning of period |
319 | 756 | |||||||
End of period |
$ | 297 | $ | 708 | |||||
4
5
6
Predecessor | ||||||||
Three Months | Six Months | |||||||
Ended | Ended | |||||||
(Unaudited, in millions) | June 30, 2010 | June 30, 2010 | ||||||
Professional fees (1)
|
$ | 27 | $ | 53 | ||||
Provision for repudiated or rejected executory contracts (2)
|
8 | 149 | ||||||
Charges related to indefinite idlings and a closed mill (3)
|
210 | 264 | ||||||
Gains on disposition of assets (4)
|
(58 | ) | (60 | ) | ||||
Gain on deconsolidation of BPCL (as defined below) (5)
|
| (27 | ) | |||||
Gain on deconsolidation of a variable interest entity (VIE) (6)
|
(16 | ) | (16 | ) | ||||
Debtor in possession financing costs (7)
|
5 | 5 | ||||||
Other (8)
|
(28 | ) | (15 | ) | ||||
$ | 148 | $ | 353 | |||||
(1) | Professional fees directly related to the Creditor Protection Proceedings and the establishment of the Plans of Reorganization, including legal, accounting and other professional fees, as well as professional fees incurred by our creditors. | |
(2) | Represented provision for estimated claims arising from repudiated or rejected executory contracts, supply contracts and equipment leases. | |
(3) | Represented charges primarily related to: (i) the indefinite idling of our Gatineau, Quebec paper mill in the second quarter of 2010; (ii) the indefinite idling of a de-inking line and paper machine at our Thorold, Ontario paper mill in the first quarter of 2010 and (iii) an impairment charge in the second quarter of 2010 related to our Lufkin, Texas paper mill to reduce the carrying value of the assets to their estimated fair value (which was determined based on the mills estimated sales value). Such charges for the three and six months ended June 30, 2010 were comprised of the following: |
Predecessor | ||||||||
Three Months | Six Months | |||||||
Ended | Ended | |||||||
(Unaudited, in millions) | June 30, 2010 | June 30, 2010 | ||||||
Accelerated depreciation |
$ | 163 | $ | 210 | ||||
Long-lived asset impairment |
10 | 10 | ||||||
Severance and pension curtailment |
23 | 29 | ||||||
Write-downs of inventory |
14 | 15 | ||||||
$ | 210 | $ | 264 | |||||
(4) | Represented gains on the disposition of various mills and other assets as part of our work towards a comprehensive restructuring plan, including the write-off of related asset retirement obligations. Such gains for the three months ended June 30, 2010 included our Mackenzie, British Columbia paper mill and sawmills, four previously permanently closed paper mills that were bundled and sold together and various other assets, all of which we sold for proceeds of approximately $34 million. Such gains for the six months ended June 30, 2010 also included our Westover, Alabama sawmill and our recycling divisions material recycling facilities located in Arlington, Houston and San Antonio, |
7
Texas, all of which we sold for proceeds of approximately $15 million. | ||
(5) | As discussed in Note 1, Organization and Basis of Presentation Bridgewater Administration, included in our consolidated financial statements for the year ended December 31, 2010, we are no longer consolidating Bridgewater Paper Company Limited (BPCL), an indirect, wholly-owned subsidiary of ours, in our consolidated financial statements. Upon the deconsolidation of BPCL, we derecognized our negative investment in BPCL, which resulted in a gain. | |
(6) | As discussed in Note 4, Creditor Protection Proceedings Related Disclosures Reorganization items, net, included in our consolidated financial statements for the year ended December 31, 2010, we are no longer consolidating in our consolidated financial statements a VIE that was placed into receivership. Upon the deconsolidation of this VIE, we derecognized our negative investment in this VIE, which resulted in a gain. | |
(7) | Debtor in possession financing costs were incurred during the second quarter of 2010 in connection with the extension of one of our debtor in possession financing arrangements and an amendment to our former accounts receivable securitization program. | |
(8) | For the three and six months ended June 30, 2010, Other primarily represented the write-off of environmental liabilities related to our Newfoundland and Labrador properties that were expropriated and for which no claim was filed against us in the Creditor Protection Proceedings. For the six months ended June 30, 2010, Other also included charges related to our estimated liability for an environmental claim filed against us by the current owner of a site previously owned by one of our subsidiaries, as well as employee termination charges resulting from our work towards a comprehensive restructuring plan related to a workforce reduction at our Catawba, South Carolina paper mill. Other for both periods also included interest income. |
Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
Successor | Predecessor | Successor | Predecessor | |||||||||||||||
(Unaudited, in millions) | 2011 | 2010 | 2011 | 2010 | ||||||||||||||
Accelerated depreciation |
$ | 3 | $ | | $ | 4 | $ | | ||||||||||
Impairment of long-lived assets |
| | 7 | 2 | ||||||||||||||
Severance and other costs |
1 | 3 | 6 | 6 | ||||||||||||||
$ | 4 | $ | 3 | $ | 17 | $ | 8 | |||||||||||
8
Successor | ||||||||
June 30, | December 31, | |||||||
(Unaudited, in millions) | 2011 | 2010 | ||||||
Cash and cash equivalents |
$ | | $ | 10 | ||||
Accounts receivable |
| 4 | ||||||
Other current assets |
| 1 | ||||||
Fixed assets, net |
15 | 149 | ||||||
Amortizable intangible assets |
| 528 | ||||||
Other assets |
| 6 | ||||||
$ | 15 | $ | 698 | |||||
Successor | ||||||||
June 30, | December 31, | |||||||
(Unaudited, in millions) | 2011 | 2010 | ||||||
Accounts payable and accrued liabilities |
$ | | $ | 9 | ||||
Long-term debt |
| 280 | ||||||
$ | | $ | 289 | |||||
9
Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
Successor | Predecessor | Successor | Predecessor | |||||||||||||||
(Unaudited, in millions) | 2011 | 2010 | 2011 | 2010 | ||||||||||||||
Foreign exchange gain |
$ | 2 | $ | 41 | $ | 30 | $ | 37 | ||||||||||
Post-emergence costs (1) |
(11 | ) | | (22 | ) | | ||||||||||||
Loss from equity method investments |
(1 | ) | (1 | ) | (1 | ) | (3 | ) | ||||||||||
Gain on extinguishment of debt (Note 11) |
4 | | 4 | | ||||||||||||||
Interest income (2) |
1 | | 1 | | ||||||||||||||
Miscellaneous income |
3 | 1 | 5 | 4 | ||||||||||||||
$ | (2 | ) | $ | 41 | $ | 17 | $ | 38 | ||||||||||
(1) | Primarily represents ongoing legal and other professional fees for the resolution and settlement of disputed creditor claims, as well as costs for other post-emergence activities. | |
(2) | During the Creditor Protection Proceedings, interest income of the entities that were subject to the Creditor Protection Proceedings was recorded in Reorganization items, net in our Consolidated Statements of Operations. |
10
Successor | ||||||||
June 30, | December 31, | |||||||
(Unaudited, in millions) | 2011 | 2010 | ||||||
Raw materials and work in process |
$ | 123 | $ | 136 | ||||
Finished goods |
176 | 184 | ||||||
Mill stores and other supplies |
147 | 118 | ||||||
$ | 446 | $ | 438 | |||||
2011 | 2010 | |||||||||||
(Unaudited, in millions) | Initiatives | Initiatives | Total | |||||||||
Balance as of December 31, 2010 (Successor) |
$ | | $ | 2 | $ | 2 | ||||||
Charges |
10 | | 10 | |||||||||
Payments |
(8 | ) | (1 | ) | (9 | ) | ||||||
Balance as of June 30, 2011 (Successor) |
$ | 2 | $ | 1 | $ | 3 | ||||||
11
12
13
Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
Successor | Predecessor | Successor | Predecessor | |||||||||||||||
(Unaudited, in millions) | 2011 | 2010 | 2011 | 2010 | ||||||||||||||
Service cost |
$ | 9 | $ | 10 | $ | 18 | $ | 20 | ||||||||||
Interest cost |
83 | 86 | 166 | 171 | ||||||||||||||
Expected return on plan assets |
(87 | ) | (90 | ) | (174 | ) | (180 | ) | ||||||||||
Amortization of prior service cost |
| 1 | | 2 | ||||||||||||||
Recognized net actuarial loss |
| 1 | | 2 | ||||||||||||||
Curtailment |
| 4 | | 4 | ||||||||||||||
$ | 5 | $ | 12 | $ | 10 | $ | 19 | |||||||||||
OPEB Plans: | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
Successor | Predecessor | Successor | Predecessor | |||||||||||||||
(Unaudited, in millions) | 2011 | 2010 | 2011 | 2010 | ||||||||||||||
Service cost |
$ | 1 | $ | 1 | $ | 2 | $ | 2 | ||||||||||
Interest cost |
5 | 6 | 11 | 12 | ||||||||||||||
Amortization of prior service credit |
| (2 | ) | | (4 | ) | ||||||||||||
Recognized net actuarial loss |
| 1 | | 1 | ||||||||||||||
Curtailment |
| | 3 | | ||||||||||||||
$ | 6 | $ | 6 | $ | 16 | $ | 11 | |||||||||||
14
Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
Successor | Predecessor | Successor | Predecessor | |||||||||||||||
(Unaudited, in millions) | 2011 | 2010 | 2011 | 2010 | ||||||||||||||
Income (loss) before income taxes |
$ | 22 | $ | (309 | ) | $ | 38 | $ | (816 | ) | ||||||||
Income tax (provision) benefit: |
||||||||||||||||||
Expected income tax (provision) benefit |
(7 | ) | 108 | (13 | ) | 286 | ||||||||||||
Change in income tax (provision) benefit resulting from: |
||||||||||||||||||
Valuation allowance |
1 | (139 | ) | (1 | ) | (211 | ) | |||||||||||
Foreign exchange |
3 | 73 | 14 | 20 | ||||||||||||||
Deferred tax adjustment |
| | 10 | | ||||||||||||||
Tax reserve adjustment (1) |
44 | | 44 | | ||||||||||||||
State income taxes, net of federal income tax benefit |
| 1 | | 2 | ||||||||||||||
Foreign taxes |
| (38 | ) | 1 | (97 | ) | ||||||||||||
Other, net |
(2 | ) | 4 | (2 | ) | 10 | ||||||||||||
$ | 39 | $ | 9 | $ | 53 | $ | 10 | |||||||||||
(1) | During the three months ended June 30, 2011, we reversed certain accruals for uncertain tax positions pursuant to FASB ASC 740, Income Taxes, as effectively settled, as certain tax authority examinations were completed during the second quarter of 2011. The total tax benefit recorded as a result of the reversal of these accruals for uncertain tax positions was $44 million. |
15
16
Weighted-Average | ||||||||
Number of | Fair Value at Grant | |||||||
(Unaudited) | Units | Date | ||||||
Outstanding as of December 31, 2010 (Successor) |
| $ | | |||||
Granted |
107,369 | 24.10 | ||||||
Vested |
| | ||||||
Forfeited |
(16,079 | ) | 23.05 | |||||
Outstanding as of June 30, 2011 (Successor) |
91,290 | $ | 24.28 | |||||
17
Coated | Specialty | Market | Wood | Corporate | Consolidated | |||||||||||||||||||||||
(Unaudited, in millions) | Newsprint | Papers | Papers | Pulp(1) | Products | and Other | Total | |||||||||||||||||||||
Sales |
||||||||||||||||||||||||||||
Second quarter 2011 (Successor) |
$ | 462 | $ | 132 | $ | 320 | $ | 171 | $ | 115 | $ | | $ | 1,200 | ||||||||||||||
Second quarter 2010 (Predecessor) |
456 | 114 | 329 | 172 | 111 | | 1,182 | |||||||||||||||||||||
First six months 2011 (Successor) |
891 | 266 | 650 | 347 | 231 | | 2,385 | |||||||||||||||||||||
First six months 2010 (Predecessor) |
889 | 220 | 628 | 335 | 210 | | 2,282 | |||||||||||||||||||||
Operating income (loss) (2) |
||||||||||||||||||||||||||||
Second quarter 2011 (Successor) |
$ | 26 | $ | 23 | $ | 11 | $ | 14 | $ | (14 | ) | $ | (8 | ) | $ | 52 | ||||||||||||
Second quarter 2010 (Predecessor) |
(49 | ) | 5 | (25 | ) | 24 | 3 | (31 | ) | (73 | ) | |||||||||||||||||
First six months 2011 (Successor) |
45 | 26 | 11 | 37 | (17 | ) | (23 | ) | 79 | |||||||||||||||||||
First six months 2010 (Predecessor) |
(151 | ) | 1 | (33 | ) | 37 | 5 | (42 | ) | (183 | ) | |||||||||||||||||
(1) | Market pulp sales excluded inter-segment sales of $4 million and $2 million for the three months ended June 30, 2011 and 2010, respectively, and $8 million and $12 million for the six months ended June 30, 2011 and 2010, respectively. | |
(2) | Corporate and other operating loss for the three and six months ended June 30, 2011 and 2010 included the following special items: |
Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
Successor | Predecessor | Successor | Predecessor | |||||||||||||||
(Unaudited, in millions) | 2011 | 2010 | 2011 | 2010 | ||||||||||||||
Net gain on disposition of assets |
$ | 3 | $ | 4 | $ | 4 | $ | 13 | ||||||||||
Closure costs, impairment and other related charges |
(4 | ) | (3 | ) | (17 | ) | (8 | ) | ||||||||||
Write-downs of inventory |
| | (1 | ) | | |||||||||||||
Employee termination costs |
(2 | ) | | (6 | ) | | ||||||||||||
$ | (3 | ) | $ | 1 | $ | (20 | ) | $ | 5 | |||||||||
18
Guarantor | Non-guarantor | Consolidating | ||||||||||||||||||
(Unaudited, in millions) | Parent | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Sales |
$ | | $ | 776 | $ | 788 | $ | (364 | ) | $ | 1,200 | |||||||||
Costs and expenses: |
||||||||||||||||||||
Cost of sales, excluding depreciation,
amortization and cost of timber harvested |
| 654 | 621 | (364 | ) | 911 | ||||||||||||||
Depreciation, amortization and cost of timber
harvested |
| 22 | 33 | | 55 | |||||||||||||||
Distribution costs |
| 41 | 100 | | 141 | |||||||||||||||
Selling, general and administrative expenses |
(1 | ) | 11 | 30 | | 40 | ||||||||||||||
Closure costs, impairment and other related
charges |
| 1 | 3 | | 4 | |||||||||||||||
Net gain on disposition of assets |
| | (3 | ) | | (3 | ) | |||||||||||||
Operating income |
1 | 47 | 4 | | 52 | |||||||||||||||
Interest expense |
(41 | ) | (3 | ) | (5 | ) | 21 | (28 | ) | |||||||||||
Other income (expense), net |
3 | 26 | (10 | ) | (21 | ) | (2 | ) | ||||||||||||
Parents equity in income of subsidiaries |
121 | | | (121 | ) | | ||||||||||||||
Income (loss) before income taxes |
84 | 70 | (11 | ) | (121 | ) | 22 | |||||||||||||
Income tax (provision) benefit |
(23 | ) | 57 | 5 | | 39 | ||||||||||||||
Net income (loss) including noncontrolling
interests |
61 | 127 | (6 | ) | (121 | ) | 61 | |||||||||||||
Net loss attributable to noncontrolling interests |
| | | | | |||||||||||||||
Net income (loss) attributable to AbitibiBowater
Inc. |
$ | 61 | $ | 127 | $ | (6 | ) | $ | (121 | ) | $ | 61 | ||||||||
19
Guarantor | Non-guarantor | Consolidating | ||||||||||||||||||
(Unaudited, in millions) | Parent | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Sales |
$ | | $ | 1,568 | $ | 1,553 | $ | (736 | ) | $ | 2,385 | |||||||||
Costs and expenses: |
||||||||||||||||||||
Cost of sales, excluding depreciation,
amortization and cost of timber harvested |
| 1,339 | 1,230 | (736 | ) | 1,833 | ||||||||||||||
Depreciation, amortization and cost of timber
harvested |
| 45 | 64 | | 109 | |||||||||||||||
Distribution costs |
| 80 | 194 | | 274 | |||||||||||||||
Selling, general and administrative expenses |
1 | 23 | 53 | | 77 | |||||||||||||||
Closure costs, impairment and other related
charges |
| 14 | 3 | | 17 | |||||||||||||||
Net gain on disposition of assets |
| | (4 | ) | | (4 | ) | |||||||||||||
Operating (loss) income |
(1 | ) | 67 | 13 | | 79 | ||||||||||||||
Interest expense |
(82 | ) | (5 | ) | (13 | ) | 42 | (58 | ) | |||||||||||
Other income, net |
12 | 39 | 8 | (42 | ) | 17 | ||||||||||||||
Parents equity in income of subsidiaries |
181 | | | (181 | ) | | ||||||||||||||
Income before income taxes |
110 | 101 | 8 | (181 | ) | 38 | ||||||||||||||
Income tax (provision) benefit |
(19 | ) | 55 | 17 | | 53 | ||||||||||||||
Net income including noncontrolling interests |
91 | 156 | 25 | (181 | ) | 91 | ||||||||||||||
Net loss attributable to noncontrolling interests |
| | | | | |||||||||||||||
Net income attributable to AbitibiBowater Inc. |
$ | 91 | $ | 156 | $ | 25 | $ | (181 | ) | $ | 91 | |||||||||
20
Guarantor | Non-guarantor | Consolidating | ||||||||||||||||||
(Unaudited, in millions) | Parent | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Sales |
$ | | $ | 668 | $ | 863 | $ | (349 | ) | $ | 1,182 | |||||||||
Costs and expenses: |
||||||||||||||||||||
Cost of sales, excluding depreciation,
amortization and cost of timber harvested |
| 594 | 706 | (349 | ) | 951 | ||||||||||||||
Depreciation, amortization and cost of timber
harvested |
| 33 | 92 | | 125 | |||||||||||||||
Distribution costs |
| 33 | 108 | | 141 | |||||||||||||||
Selling, general and administrative expenses |
9 | 17 | 13 | | 39 | |||||||||||||||
Closure costs, impairment and other related
charges |
| | 3 | | 3 | |||||||||||||||
Net gain on disposition of assets |
| (4 | ) | | | (4 | ) | |||||||||||||
Operating loss |
(9 | ) | (5 | ) | (59 | ) | | (73 | ) | |||||||||||
Interest expense |
| (28 | ) | (102 | ) | 1 | (129 | ) | ||||||||||||
Other (expense) income, net |
| (4 | ) | 46 | (1 | ) | 41 | |||||||||||||
Parents equity in loss of subsidiaries |
| | | | | |||||||||||||||
Loss before reorganization items and income taxes |
(9 | ) | (37 | ) | (115 | ) | | (161 | ) | |||||||||||
Reorganization items, net |
| (22 | ) | (126 | ) | | (148 | ) | ||||||||||||
Loss before income taxes |
(9 | ) | (59 | ) | (241 | ) | | (309 | ) | |||||||||||
Income tax benefit |
| 6 | 3 | | 9 | |||||||||||||||
Net loss including noncontrolling interests |
(9 | ) | (53 | ) | (238 | ) | | (300 | ) | |||||||||||
Net loss attributable to noncontrolling interests |
| | 3 | | 3 | |||||||||||||||
Net loss attributable to AbitibiBowater Inc. |
$ | (9 | ) | $ | (53 | ) | $ | (235 | ) | $ | | $ | (297 | ) | ||||||
21
Guarantor | Non-guarantor | Consolidating | ||||||||||||||||||
(Unaudited, in millions) | Parent | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Sales |
$ | | $ | 1,310 | $ | 1,644 | $ | (672 | ) | $ | 2,282 | |||||||||
Costs and expenses: |
||||||||||||||||||||
Cost of sales, excluding depreciation,
amortization and cost of timber harvested |
| 1,161 | 1,377 | (672 | ) | 1,866 | ||||||||||||||
Depreciation, amortization and cost of timber
harvested |
| 67 | 190 | | 257 | |||||||||||||||
Distribution costs |
| 66 | 212 | | 278 | |||||||||||||||
Selling, general and administrative expenses |
21 | 20 | 28 | | 69 | |||||||||||||||
Closure costs, impairment and other related
charges |
| 2 | 6 | | 8 | |||||||||||||||
Net gain on disposition of assets |
| (4 | ) | (9 | ) | | (13 | ) | ||||||||||||
Operating loss |
(21 | ) | (2 | ) | (160 | ) | | (183 | ) | |||||||||||
Interest expense |
| (66 | ) | (254 | ) | 2 | (318 | ) | ||||||||||||
Other (expense) income, net |
| (7 | ) | 47 | (2 | ) | 38 | |||||||||||||
Parents equity in loss of subsidiaries |
| | | | | |||||||||||||||
Loss before reorganization items and income taxes |
(21 | ) | (75 | ) | (367 | ) | | (463 | ) | |||||||||||
Reorganization items, net |
| (31 | ) | (322 | ) | | (353 | ) | ||||||||||||
Loss before income taxes |
(21 | ) | (106 | ) | (689 | ) | | (816 | ) | |||||||||||
Income tax benefit |
| 1 | 9 | | 10 | |||||||||||||||
Net loss including noncontrolling interests |
(21 | ) | (105 | ) | (680 | ) | | (806 | ) | |||||||||||
Net loss attributable to noncontrolling interests |
| | 9 | | 9 | |||||||||||||||
Net loss attributable to AbitibiBowater Inc. |
$ | (21 | ) | $ | (105 | ) | $ | (671 | ) | $ | | $ | (797 | ) | ||||||
22
Guarantor | Non-guarantor | Consolidating | ||||||||||||||||||
(Unaudited, in millions) | Parent | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Assets |
||||||||||||||||||||
Current assets: |
||||||||||||||||||||
Cash and cash equivalents |
$ | | $ | 101 | $ | 196 | $ | | $ | 297 | ||||||||||
Accounts receivable, net |
| 384 | 551 | | 935 | |||||||||||||||
Accounts receivable from affiliates |
| 44 | 208 | (252 | ) | | ||||||||||||||
Inventories, net |
| 128 | 318 | | 446 | |||||||||||||||
Assets held for sale |
| 15 | | | 15 | |||||||||||||||
Deferred income tax assets |
| 30 | 18 | | 48 | |||||||||||||||
Note and interest receivable from parent |
| 905 | | (905 | ) | | ||||||||||||||
Note receivable from affiliate |
| 7 | | (7 | ) | | ||||||||||||||
Other current assets |
| 19 | 83 | | 102 | |||||||||||||||
Total current assets |
| 1,633 | 1,374 | (1,164 | ) | 1,843 | ||||||||||||||
Fixed assets, net |
| 961 | 1,602 | | 2,563 | |||||||||||||||
Amortizable intangible assets, net |
| | 18 | | 18 | |||||||||||||||
Deferred income tax assets |
| 538 | 1,274 | | 1,812 | |||||||||||||||
Note receivable from affiliate |
| 30 | | (30 | ) | | ||||||||||||||
Investments in and advances to
consolidated subsidiaries |
5,920 | 2,700 | | (8,620 | ) | | ||||||||||||||
Other assets |
| 29 | 156 | 111 | 296 | |||||||||||||||
Total assets |
$ | 5,920 | $ | 5,891 | $ | 4,424 | $ | (9,703 | ) | $ | 6,532 | |||||||||
Liabilities and equity |
||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||
Accounts payable and accrued liabilities |
$ | 16 | $ | 173 | $ | 392 | $ | | $ | 581 | ||||||||||
Accounts payable to affiliates |
172 | | | (172 | ) | | ||||||||||||||
Note and interest payable to a subsidiary |
905 | | | (905 | ) | | ||||||||||||||
Note payable to affiliate |
| | 7 | (7 | ) | | ||||||||||||||
Total current liabilities |
1,093 | 173 | 399 | (1,084 | ) | 581 | ||||||||||||||
Long-term debt |
713 | | | | 713 | |||||||||||||||
Long-term debt due to affiliate |
| | 30 | (30 | ) | | ||||||||||||||
Pension and other postretirement projected
benefit obligations |
| 382 | 872 | | 1,254 | |||||||||||||||
Deferred income tax liabilities |
| | 78 | | 78 | |||||||||||||||
Other long-term liabilities |
| 31 | 36 | | 67 | |||||||||||||||
Total liabilities |
1,806 | 586 | 1,415 | (1,114 | ) | 2,693 | ||||||||||||||
Total equity |
4,114 | 5,305 | 3,009 | (8,589 | ) | 3,839 | ||||||||||||||
Total liabilities and equity |
$ | 5,920 | $ | 5,891 | $ | 4,424 | $ | (9,703 | ) | $ | 6,532 | |||||||||
23
Guarantor | Non-guarantor | Consolidating | ||||||||||||||||||
(Unaudited, in millions) | Parent | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Assets |
||||||||||||||||||||
Current assets: |
||||||||||||||||||||
Cash and cash equivalents |
$ | | $ | 164 | $ | 155 | $ | | $ | 319 | ||||||||||
Accounts receivable |
| 348 | 506 | | 854 | |||||||||||||||
Accounts receivable from affiliates |
40 | | 287 | (327 | ) | | ||||||||||||||
Inventories |
| 158 | 280 | | 438 | |||||||||||||||
Assets held for sale |
| 15 | 683 | | 698 | |||||||||||||||
Deferred income tax assets |
| 31 | 16 | | 47 | |||||||||||||||
Note and interest receivable from parent |
| 864 | | (864 | ) | | ||||||||||||||
Note receivable from affiliate |
| 10 | | (10 | ) | | ||||||||||||||
Other current assets |
| 25 | 63 | | 88 | |||||||||||||||
Total current assets |
40 | 1,615 | 1,990 | (1,201 | ) | 2,444 | ||||||||||||||
Fixed assets |
| 858 | 1,783 | | 2,641 | |||||||||||||||
Amortizable intangible assets |
| | 19 | | 19 | |||||||||||||||
Deferred income tax assets |
| 439 | 1,297 | | 1,736 | |||||||||||||||
Note receivable from affiliate |
| 30 | | (30 | ) | | ||||||||||||||
Investments in and advances to consolidated
subsidiaries |
5,977 | 2,933 | | (8,910 | ) | | ||||||||||||||
Other assets |
| 34 | 168 | 114 | 316 | |||||||||||||||
Total assets |
$ | 6,017 | $ | 5,909 | $ | 5,257 | $ | (10,027 | ) | $ | 7,156 | |||||||||
Liabilities and equity |
||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||
Accounts payable and accrued liabilities |
$ | 26 | $ | 175 | $ | 367 | $ | | $ | 568 | ||||||||||
Accounts payable to affiliates |
178 | 99 | | (277 | ) | | ||||||||||||||
Note and interest payable to a subsidiary |
864 | | | (864 | ) | | ||||||||||||||
Note payable to affiliate |
| | 10 | (10 | ) | | ||||||||||||||
Liabilities associated with assets held for sale |
| | 289 | | 289 | |||||||||||||||
Total current liabilities |
1,068 | 274 | 666 | (1,151 | ) | 857 | ||||||||||||||
Long-term debt |
905 | | | | 905 | |||||||||||||||
Long-term debt due to affiliate |
| | 30 | (30 | ) | | ||||||||||||||
Pension and other postretirement projected
benefit obligations |
| 362 | 910 | | 1,272 | |||||||||||||||
Deferred income tax liabilities |
| | 72 | | 72 | |||||||||||||||
Other long-term liabilities |
| 32 | 31 | | 63 | |||||||||||||||
Total liabilities |
1,973 | 668 | 1,709 | (1,181 | ) | 3,169 | ||||||||||||||
Total equity |
4,044 | 5,241 | 3,548 | (8,846 | ) | 3,987 | ||||||||||||||
Total liabilities and equity |
$ | 6,017 | $ | 5,909 | $ | 5,257 | $ | (10,027 | ) | $ | 7,156 | |||||||||
24
Guarantor | Non-guarantor | Consolidating | ||||||||||||||||||
(Unaudited, in millions) | Parent | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Net cash provided by (used in) operating
activities |
$ | | $ | 69 | $ | (54 | ) | $ | | $ | 15 | |||||||||
Cash flows from investing activities: |
||||||||||||||||||||
Cash invested in fixed assets |
| (13 | ) | (19 | ) | | (32 | ) | ||||||||||||
Disposition of investment in ACH |
| | 296 | | 296 | |||||||||||||||
Disposition of other assets |
| | 8 | | 8 | |||||||||||||||
Proceeds from insurance settlement |
| | 4 | | 4 | |||||||||||||||
Increase in restricted cash |
| | (3 | ) | | (3 | ) | |||||||||||||
Increase in deposit requirements for
letters of credit, net |
| | (7 | ) | | (7 | ) | |||||||||||||
Advances from (to) affiliate |
| 150 | (150 | ) | | | ||||||||||||||
Net cash provided by investing activities |
| 137 | 129 | | 266 | |||||||||||||||
Cash flows from financing activities: |
||||||||||||||||||||
Dividends and distribution to
noncontrolling interests |
| | (19 | ) | | (19 | ) | |||||||||||||
Acquisition of noncontrolling interest |
| | (15 | ) | | (15 | ) | |||||||||||||
Payments of long-term debt |
| (269 | ) | | | (269 | ) | |||||||||||||
Net cash used in financing activities |
| (269 | ) | (34 | ) | | (303 | ) | ||||||||||||
Net (decrease) increase in cash and cash
equivalents |
| (63 | ) | 41 | | (22 | ) | |||||||||||||
Cash and cash equivalents: |
||||||||||||||||||||
Beginning of period |
| 164 | 155 | | 319 | |||||||||||||||
End of period |
$ | | $ | 101 | $ | 196 | $ | | $ | 297 | ||||||||||
Guarantor | Non-guarantor | Consolidating | ||||||||||||||||||
(Unaudited, in millions) | Parent | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Net cash provided by (used in) operating
activities |
$ | | $ | 63 | $ | (66 | ) | $ | | $ | (3 | ) | ||||||||
Cash flows from investing activities: |
||||||||||||||||||||
Cash invested in fixed assets |
| (7 | ) | (19 | ) | | (26 | ) | ||||||||||||
Disposition of assets |
| 23 | 39 | | 62 | |||||||||||||||
Increase in restricted cash |
| (15 | ) | (40 | ) | | (55 | ) | ||||||||||||
Collections on note receivable from affiliate |
| 15 | | (15 | ) | | ||||||||||||||
Net cash provided by (used in) investing
activities |
| 16 | (20 | ) | (15 | ) | (19 | ) | ||||||||||||
Cash flows from financing activities: |
||||||||||||||||||||
Decrease in secured borrowings, net |
| (21 | ) | | | (21 | ) | |||||||||||||
Debtor in possession financing costs |
| (5 | ) | | | (5 | ) | |||||||||||||
Payments of note payable to affiliate |
| | (15 | ) | 15 | | ||||||||||||||
Net cash used in financing activities |
| (26 | ) | (15 | ) | 15 | (26 | ) | ||||||||||||
Net increase (decrease) in cash and cash
equivalents |
| 53 | (101 | ) | | (48 | ) | |||||||||||||
Cash and cash equivalents: |
||||||||||||||||||||
Beginning of period |
| 418 | 338 | | 756 | |||||||||||||||
End of period |
$ | | $ | 471 | $ | 237 | $ | | $ | 708 | ||||||||||
25
26
27
28
| higher cost of sales, excluding depreciation, amortization and cost of timber harvested, as a result of the increase in the carrying value of finished goods inventory as of December 31, 2010 to reflect fair value, which increased cost of sales, excluding depreciation, amortization and cost of timber harvested, in the first quarter of 2011 as the inventory was sold; | ||
| lower depreciation, amortization and cost of timber harvested as a result of the rationalization of facilities, sale of assets, reductions in the carrying values of fixed assets and amortizable intangible assets to reflect fair values and updated useful lives of fixed assets and amortizable intangible assets; | ||
| lower labor and salary costs as a result of the implementation of our new labor agreements (costs of sales, excluding depreciation, amortization and cost of timber harvested) and salary reductions at the corporate level (SG&A expenses); | ||
| significantly lower interest expense as a result of the settlement or extinguishment of the Predecessor Companys secured and unsecured debt obligations, partially offset by interest expense on our exit financing; | ||
| the Predecessor Companys consolidated statements of operations included significant costs for reorganization items, which were directly associated with or resulted from the reorganization and restructuring of the business. In 2011, we have incurred and will continue to incur costs associated with the finalization of outstanding restructuring and reorganization matters, primarily for the resolution and settlement of disputed creditor claims. These post-emergence costs are recorded in Other (expense) income, net in the Successor Companys consolidated statements of operations; and | ||
| income taxes are no longer impacted by the valuation allowances established on substantially all of the Predecessor Companys deferred income tax assets. Such valuation allowances were reversed in connection with the implementation of the Plans of Reorganization. We established approximately $1,783 million of deferred income tax assets as of December 31, 2010, which were reduced by $474 million of valuation allowances. As a result, we do not expect to pay significant cash taxes until these deferred income tax assets are fully utilized. |
29
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||||
(Unaudited, in millions, except per share amounts) | 2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||||
Sales |
$ | 1,200 | $ | 1,182 | $ | 18 | $ | 2,385 | $ | 2,282 | $ | 103 | |||||||||||||||
Operating income (loss) |
52 | (73 | ) | 125 | 79 | (183 | ) | 262 | |||||||||||||||||||
Net income (loss) attributable to
AbitibiBowater Inc. |
61 | (297 | ) | 358 | 91 | (797 | ) | 888 | |||||||||||||||||||
Net income (loss) per share
attributable to AbitibiBowater Inc.
basic |
0.63 | (5.15 | ) | 5.78 | 0.94 | (13.83 | ) | 14.77 | |||||||||||||||||||
Net income (loss) per share
attributable to AbitibiBowater Inc.
diluted |
0.63 | (5.15 | ) | 5.78 | 0.94 | (13.83 | ) | 14.77 | |||||||||||||||||||
Significant items that favorably (unfavorably) impacted operating income (loss): | |||||||||||||||||||||||||||
Product pricing |
$ | 82 | $ | 213 | |||||||||||||||||||||||
Shipments |
(64 | ) | (110 | ) | |||||||||||||||||||||||
Change in sales |
18 | 103 | |||||||||||||||||||||||||
Change in cost of sales, excluding depreciation, amortization and cost of
timber harvested |
40 | 33 | |||||||||||||||||||||||||
Change in depreciation, amortization and cost of timber harvested |
70 | 148 | |||||||||||||||||||||||||
Change in distribution costs |
| 4 | |||||||||||||||||||||||||
Change in selling, general and administrative expenses |
(1 | ) | (8 | ) | |||||||||||||||||||||||
Change in closure costs, impairment and other related charges |
(1 | ) | (9 | ) | |||||||||||||||||||||||
Change in net gain on disposition of assets |
(1 | ) | (9 | ) | |||||||||||||||||||||||
$ | 125 | $ | 262 | ||||||||||||||||||||||||
30
31
32
33
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||||||
Average price (per metric ton) |
$ | 663 | $ | 597 | $ | 66 | $ | 658 | $ | 570 | $ | 88 | |||||||||||||||
Average cost (per metric ton) |
$ | 625 | $ | 661 | $ | (36 | ) | $ | 625 | $ | 668 | $ | (43 | ) | |||||||||||||
Shipments (thousands of metric tons) |
697 | 763 | (66 | ) | 1,353 | 1,558 | (205 | ) | |||||||||||||||||||
Downtime (thousands of metric tons) |
31 | 306 | (275 | ) | 53 | 520 | (467 | ) | |||||||||||||||||||
Inventory at end of period
(thousands of metric tons) |
76 | 90 | (14 | ) | 76 | 90 | (14 | ) | |||||||||||||||||||
(Unaudited, in millions) |
|||||||||||||||||||||||||||
Segment sales |
$ | 462 | $ | 456 | $ | 6 | $ | 891 | $ | 889 | $ | 2 | |||||||||||||||
Segment operating income (loss) |
26 | (49 | ) | 75 | 45 | (151 | ) | 196 | |||||||||||||||||||
Significant items that favorably (unfavorably) impacted segment operating income (loss): |
|||||||||||||||||||||||||||
Product pricing |
$ | 50 | $ | 137 | |||||||||||||||||||||||
Shipments |
(44 | ) | (135 | ) | |||||||||||||||||||||||
Change in sales |
6 | 2 | |||||||||||||||||||||||||
Change in cost of sales, excluding depreciation, amortization and cost of timber
harvested |
30 | 106 | |||||||||||||||||||||||||
Change in depreciation, amortization and cost of timber harvested |
39 | 85 | |||||||||||||||||||||||||
Change in distribution costs |
4 | 13 | |||||||||||||||||||||||||
Change in selling, general and administrative expenses |
(4 | ) | (10 | ) | |||||||||||||||||||||||
$ | 75 | $ | 196 | ||||||||||||||||||||||||
34
35
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||||||
Average price (per short ton) |
$ | 822 | $ | 685 | $ | 137 | $ | 808 | $ | 677 | $ | 131 | |||||||||||||||
Average cost (per short ton) |
$ | 682 | $ | 655 | $ | 27 | $ | 730 | $ | 672 | $ | 58 | |||||||||||||||
Shipments (thousands of short tons) |
161 | 166 | (5 | ) | 330 | 325 | 5 | ||||||||||||||||||||
Downtime (thousands of short tons) |
| 7 | (7 | ) | 2 | 10 | (8 | ) | |||||||||||||||||||
Inventory at end of period
(thousands of short tons) |
33 | 20 | 13 | 33 | 20 | 13 | |||||||||||||||||||||
(Unaudited, in millions) |
|||||||||||||||||||||||||||
Segment sales |
$ | 132 | $ | 114 | $ | 18 | $ | 266 | $ | 220 | $ | 46 | |||||||||||||||
Segment operating income |
23 | 5 | 18 | 26 | 1 | 25 | |||||||||||||||||||||
Significant items that favorably (unfavorably) impacted segment operating income: |
|||||||||||||||||||||||||||
Product pricing |
$ | 23 | $ | 43 | |||||||||||||||||||||||
Shipments |
(5 | ) | 3 | ||||||||||||||||||||||||
Change in sales |
18 | 46 | |||||||||||||||||||||||||
Change in cost of sales, excluding depreciation, amortization and cost of timber
harvested |
4 | (13 | ) | ||||||||||||||||||||||||
Change in depreciation, amortization and cost of timber harvested |
(1 | ) | (3 | ) | |||||||||||||||||||||||
Change in selling, general and administrative expenses |
(3 | ) | (5 | ) | |||||||||||||||||||||||
$ | 18 | $ | 25 | ||||||||||||||||||||||||
36
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||||||
Average price (per short ton) |
$ | 724 | $ | 675 | $ | 49 | $ | 710 | $ | 680 | $ | 30 | |||||||||||||||
Average cost (per short ton) |
$ | 698 | $ | 727 | $ | (29 | ) | $ | 698 | $ | 716 | $ | (18 | ) | |||||||||||||
Shipments (thousands of short tons) |
442 | 488 | (46 | ) | 915 | 924 | (9 | ) | |||||||||||||||||||
Downtime (thousands of short tons) |
26 | 76 | (50 | ) | 58 | 80 | (22 | ) | |||||||||||||||||||
Inventory at end of period
(thousands of short tons) |
76 | 79 | (3 | ) | 76 | 79 | (3 | ) | |||||||||||||||||||
(Unaudited, in millions) |
|||||||||||||||||||||||||||
Segment sales |
$ | 320 | $ | 329 | $ | (9 | ) | $ | 650 | $ | 628 | $ | 22 | ||||||||||||||
Segment operating income (loss) |
11 | (25 | ) | 36 | 11 | (33 | ) | 44 | |||||||||||||||||||
Significant items that favorably (unfavorably) impacted segment operating income (loss): |
|||||||||||||||||||||||||||
Product pricing |
$ | 22 | $ | 28 | |||||||||||||||||||||||
Shipments |
(31 | ) | (6 | ) | |||||||||||||||||||||||
Change in sales |
(9 | ) | 22 | ||||||||||||||||||||||||
Change in cost of sales, excluding depreciation, amortization and cost of timber
harvested |
27 | (5 | ) | ||||||||||||||||||||||||
Change in depreciation, amortization and cost of timber harvested |
21 | 39 | |||||||||||||||||||||||||
Change in distribution costs |
2 | | |||||||||||||||||||||||||
Change in selling, general and administrative expenses |
(5 | ) | (12 | ) | |||||||||||||||||||||||
$ | 36 | $ | 44 | ||||||||||||||||||||||||
37
38
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||||||
Average price (per metric ton) |
$ | 767 | $ | 767 | $ | | $ | 751 | $ | 720 | $ | 31 | |||||||||||||||
Average cost (per metric ton) |
$ | 703 | $ | 659 | $ | 44 | $ | 670 | $ | 639 | $ | 31 | |||||||||||||||
Shipments (thousands of metric tons) |
223 | 225 | (2 | ) | 462 | 466 | (4 | ) | |||||||||||||||||||
Downtime (thousands of metric tons) |
30 | 31 | (1 | ) | 38 | 45 | (7 | ) | |||||||||||||||||||
Inventory at end of period
(thousands of metric tons) |
56 | 47 | 9 | 56 | 47 | 9 | |||||||||||||||||||||
(Unaudited, in millions) |
|||||||||||||||||||||||||||
Segment sales |
$ | 171 | $ | 172 | $ | (1 | ) | $ | 347 | $ | 335 | $ | 12 | ||||||||||||||
Segment operating income |
14 | 24 | (10 | ) | 37 | 37 | | ||||||||||||||||||||
Significant items that (unfavorably) favorably impacted segment operating income: |
|||||||||||||||||||||||||||
Product pricing |
$ | | $ | 15 | |||||||||||||||||||||||
Shipments |
(1 | ) | (3 | ) | |||||||||||||||||||||||
Change in sales |
(1 | ) | 12 | ||||||||||||||||||||||||
Change in cost of sales, excluding depreciation, amortization and cost of timber
harvested |
(8 | ) | (11 | ) | |||||||||||||||||||||||
Change in depreciation, amortization and cost of timber harvested |
4 | 10 | |||||||||||||||||||||||||
Change in distribution costs |
(1 | ) | (2 | ) | |||||||||||||||||||||||
Change in selling, general and administrative expenses |
(4 | ) | (9 | ) | |||||||||||||||||||||||
$ | (10 | ) | $ | | |||||||||||||||||||||||
39
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||||||
Average price (per thousand board feet) |
$ | 290 | $ | 329 | $ | (39 | ) | $ | 300 | $ | 315 | $ | (15 | ) | |||||||||||||
Average cost (per thousand board feet) |
$ | 325 | $ | 319 | $ | 6 | $ | 322 | $ | 307 | $ | 15 | |||||||||||||||
Shipments (millions of board feet) |
397 | 334 | 63 | 772 | 665 | 107 | |||||||||||||||||||||
Downtime (millions of board feet) |
150 | 331 | (181 | ) | 243 | 645 | (402 | ) | |||||||||||||||||||
Inventory at end of period (millions
of board feet) |
165 | 115 | 50 | 165 | 115 | 50 | |||||||||||||||||||||
(Unaudited, in millions) |
|||||||||||||||||||||||||||
Segment sales |
$ | 115 | $ | 111 | $ | 4 | $ | 231 | $ | 210 | $ | 21 | |||||||||||||||
Segment operating (loss) income |
(14 | ) | 3 | (17 | ) | (17 | ) | 5 | (22 | ) | |||||||||||||||||
Significant items that (unfavorably) favorably impacted segment operating (loss) income: |
|||||||||||||||||||||||||||
Product pricing |
$ | (13 | ) | $ | (10 | ) | |||||||||||||||||||||
Shipments |
17 | 31 | |||||||||||||||||||||||||
Change in sales |
4 | 21 | |||||||||||||||||||||||||
Change in cost of sales, excluding depreciation, amortization and cost of timber
harvested |
(13 | ) | (34 | ) | |||||||||||||||||||||||
Change in depreciation, amortization and cost of timber harvested |
1 | 7 | |||||||||||||||||||||||||
Change in distribution costs |
(5 | ) | (9 | ) | |||||||||||||||||||||||
Change in selling, general and administrative expenses |
(4 | ) | (7 | ) | |||||||||||||||||||||||
$ | (17 | ) | $ | (22 | ) | ||||||||||||||||||||||
40
41
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
Successor | Predecessor | Successor | Predecessor | |||||||||||||||||||||||
(Unaudited, in millions) | 2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||||
Cost of sales, excluding depreciation,
amortization and cost of timber harvested
|
$ | (5 | ) | $ | (2 | ) | $ | (3 | ) | $ | (4 | ) | $ | 6 | $ | (10 | ) | |||||||||
Depreciation, amortization and cost of timber
harvested
|
| (6 | ) | 6 | | (10 | ) | 10 | ||||||||||||||||||
Distribution costs
|
| (2 | ) | 2 | | (2 | ) | 2 | ||||||||||||||||||
Selling, general and administrative expenses
|
(2 | ) | (22 | ) | 20 | (6 | ) | (41 | ) | 35 | ||||||||||||||||
Closure costs, impairment and other related charges
|
(4 | ) | (3 | ) | (1 | ) | (17 | ) | (8 | ) | (9 | ) | ||||||||||||||
Net gain on disposition of assets
|
3 | 4 | (1 | ) | 4 | 13 | (9 | ) | ||||||||||||||||||
Operating loss
|
$ | (8 | ) | $ | (31 | ) | $ | 23 | $ | (23 | ) | $ | (42 | ) | $ | 19 | ||||||||||
42
43
Successor | Predecessor | ||||||||
(Unaudited, in millions) | 2011 | 2010 | |||||||
Net cash provided by (used in) operating activities |
$ | 15 | $ | (3 | ) | ||||
Net cash provided by (used in) investing activities |
266 | (19 | ) | ||||||
Net cash used in financing activities |
(303 | ) | (26 | ) | |||||
Net decrease in cash and cash equivalents |
$ | (22 | ) | $ | (48 | ) | |||
44
45
46
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. |
* | Filed with this Form 10-Q. | |
** | 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 Balance Sheets, (iii) the Consolidated Statement of Changes in Equity, (iv) the Consolidated Statements of Comprehensive Income (Loss), (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Unaudited Interim Consolidated Financial Statements (tagged as blocks of text). Pursuant to applicable securities laws and regulations, the Company is deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and is not subject to liability under any anti-fraud provisions or other liability provisions of the federal securities laws as long as the Company has made a good faith attempt to comply with the submission requirements and promptly amends the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. In addition, users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections. |
47
ABITIBIBOWATER INC. |
||||
By | /s/ William G. Harvey | |||
William G. Harvey | ||||
Senior Vice President and Chief Financial Officer |
||||
By | /s/ Joseph B. Johnson | |||
Joseph B. Johnson | ||||
Senior Vice President, Finance and Chief Accounting Officer |
||||
48
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. |
* | Filed with this Form 10-Q. | |
** | 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 Balance Sheets, (iii) the Consolidated Statement of Changes in Equity, (iv) the Consolidated Statements of Comprehensive Income (Loss), (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Unaudited Interim Consolidated Financial Statements (tagged as blocks of text). Pursuant to applicable securities laws and regulations, the Company is deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and is not subject to liability under any anti-fraud provisions or other liability provisions of the federal securities laws as long as the Company has made a good faith attempt to comply with the submission requirements and promptly amends the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. In addition, users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections. |
1. | I have reviewed this quarterly report on Form 10-Q for the quarterly period ended June 30, 2011 of ABITIBIBOWATER 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 registrants 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
/s/ Richard Garneau | ||||
Richard Garneau | ||||
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q for the quarterly period ended June 30, 2011 of ABITIBIBOWATER 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 registrants 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
/s/ William G. Harvey | ||||
William G. Harvey | ||||
Senior Vice President and Chief Financial Officer |
Dated: August 15, 2011 | /s/ Richard Garneau | |||
Name: | Richard Garneau | |||
Title: | President and Chief Executive Officer | |||
Dated: August 15, 2011 | /s/ William G. Harvey | |||
Name: | William G. Harvey | |||
Title: | Senior Vice President and Chief Financial Officer | |||
Consolidated Statements of Operations (Unaudited) (Parenthetical) (Predecessor, USD $)
In Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2010
|
Jun. 30, 2010
|
|
Predecessor
|
 |  |
Contractual interest | $ 172 | $ 369 |
Income Taxes
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
Note 13. Income Taxes
The income tax benefit attributable to income (loss) before income taxes differs from the amounts
computed by applying the United States federal statutory income tax rate of 35% for the three and
six months ended June 30, 2011 and 2010 as a result of the following:
During the three and six months ended June 30, 2010, income tax benefits generated on the majority
of our losses were entirely offset by tax charges to increase our valuation allowance related to
these tax benefits.
As a result of the acquisition of the noncontrolling interest in ANC, we established a deferred tax
liability of approximately $28 million. Since this acquisition was accounted for as an equity
transaction, as discussed in Note 11, “Liquidity and Debt – Promissory note,” the recording of
this deferred tax liability resulted in a reduction of “Additional paid-in capital” in our
Consolidated Balance Sheet as of June 30, 2011.
|
Document and Entity Information (USD $)
In Millions, except Share data |
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Jul. 29, 2011
|
|
Document and Entity Information [Abstract] | Â | Â |
Entity Registrant Name | AbitibiBowater Inc. | Â |
Entity Central Index Key | 0001393066 | Â |
Document Type | 10-Q | Â |
Document Period End Date | Jun. 30, 2011 | |
Amendment Flag | false | Â |
Document Fiscal Year Focus | 2011 | Â |
Document Fiscal Period Focus | Q2 | Â |
Current Fiscal Year End Date | --12-31 | Â |
Entity Well-known Seasoned Issuer | No | Â |
Entity Voluntary Filers | No | Â |
Entity Current Reporting Status | Yes | Â |
Entity Filer Category | Smaller Reporting Company | Â |
Entity Public Float | $ 1,200 | Â |
Entity Common Stock, Shares Outstanding | Â | 97,086,031 |
Segment Information
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Segment Information [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information |
Note 16. Segment Information
We manage our business based on the products that we manufacture and sell to external customers.
Our reportable segments are newsprint, coated papers, specialty papers, market pulp and wood
products.
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, employee
termination costs, net gain on disposition of assets and other discretionary charges or credits are
not allocated to our segments. Share-based compensation expense is, however, allocated to our
segments. We also allocate depreciation expense to our segments, although the related fixed assets
are not allocated to segment assets. Additionally, beginning in 2011, all selling, general and
administrative expenses, excluding employee termination costs, are allocated to our segments.
Information about segment sales and operating income (loss) for the three and six months ended June
30, 2011 and 2010 was as follows:
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Creditor Protection Proceedings
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Creditor Protection Proceedings [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Creditor Protection Proceedings |
Note 2. Creditor Protection Proceedings
Emergence from Creditor Protection Proceedings
AbitibiBowater Inc. and all but one of its debtor affiliates (as discussed below) successfully
emerged from creditor protection proceedings under Chapter 11 of the United States Bankruptcy Code,
as amended (“Chapter 11”) and the Companies’ Creditors Arrangement Act (Canada) (the “CCAA”), as
applicable (collectively, the “Creditor Protection Proceedings”) on December 9, 2010 (the
“Emergence Date”). In the third quarter of 2010, the creditors under the Creditor Protection
Proceedings, with one exception, voted in the requisite numbers to approve the respective Plan of
Reorganization (as defined below). Creditors of Bowater Canada Finance Corporation (“BCFC”), an
indirect, wholly-owned subsidiary of ours, did not vote in the requisite numbers to approve the
Plans of Reorganization. Accordingly, we did not seek sanction of the CCAA Plan of Reorganization
and Compromise or confirmation of the Debtors’ Second Amended Joint Plan of Reorganization under
Chapter 11 of the Bankruptcy Code (collectively, the “Plans of Reorganization” and each, a “Plan of
Reorganization”) with respect to BCFC. See Note 22, “Commitments and Contingencies – BCFC
Bankruptcy and Insolvency Act filing,” included in our consolidated financial statements for the
year ended December 31, 2010 for information regarding BCFC’s Bankruptcy and Insolvency Act filing
on December 31, 2010 and our deconsolidation of BCFC as of December 31, 2010. The Plans of
Reorganization became effective on the Emergence Date.
From the 97,134,954 shares of Successor Company common stock issued for claims in the Creditor
Protection Proceedings, we established a reserve of 23,382,073 shares for claims that remained in
dispute as of the Emergence Date, from which we have made and will make supplemental interim
distributions to unsecured creditors as disputed claims are resolved. As of June 30, 2011, there
were 21,217,046 shares remaining in this reserve. We continue to work to resolve these claims,
including the identification of claims that we believe should be disallowed because they are
duplicative, were later amended or superseded, are without merit, are overstated or for other
reasons. Although we continue to make progress, in light of the substantial number and amount of
claims filed and remaining unresolved claims, the claims resolution process may take considerable
time to complete. The United States Bankruptcy Court for the District of Delaware (the “U.S.
Court”) or the Superior Court of Quebec in Canada (the “Canadian Court” and, together with the U.S.
Court, the “Courts”) will determine the resolution of claims that we are unable to resolve through
the claims resolution process. We may be required to settle certain disputed claims in cash under
certain specific circumstances. As such, included in “Accounts payable and accrued liabilities” in
our Consolidated Balance Sheets as of June 30, 2011 and December 31, 2010 is a liability of
approximately $24 million and $35 million, respectively, for the estimated cash
settlement of such claims. To the extent there are shares remaining after all disputed claims have
been resolved, these shares will be reallocated ratably among unsecured creditors with allowed
claims in the Creditor Protection Proceedings pursuant to the Plans of Reorganization.
Events prior to emergence from Creditor Protection Proceedings
During the Creditor Protection Proceedings, we remained in possession of our assets and properties
and operated our business and managed our properties as “debtors in possession” under the
jurisdiction of the Courts and in accordance with the applicable provisions of Chapter 11 and the
CCAA. In general, the entities that were subject to the Creditor Protection Proceedings were
authorized to operate as ongoing businesses, but could not engage in transactions outside the
ordinary course of business without the approval of the applicable Court(s) or Ernst & Young Inc.
(which, under the terms of a Canadian Court order, served as the court-appointed monitor under the
CCAA proceedings), as applicable.
Subject to certain exceptions under Chapter 11 and the CCAA, our filings and orders of the Canadian
Court automatically enjoined, or stayed, the continuation of any judicial or administrative
proceedings or other actions against us and our property to recover, collect or secure a claim
arising prior to the filing of the Creditor Protection Proceedings. Chapter 11 and orders of the
Canadian Court gave us the ability to reject certain contracts, subject to Court oversight. We
engaged in a review of our various agreements and rejected and repudiated a number of unfavorable agreements and
leases, including leases of real estate and equipment. The creditors affected by these actions were
given the opportunity to file proofs of claims in the Creditor Protection Proceedings.
Reorganization items, net
FASB ASC 852 requires separate disclosure of reorganization items such as certain expenses,
provisions for losses and other charges and credits directly associated with or resulting from the
reorganization and restructuring of the business that were realized or incurred during the Creditor
Protection Proceedings. As a result, during the Creditor Protection Proceedings, all charges
related to the commencement of an indefinite idling or permanent closure of a mill or a paper
machine subsequent to the commencement of the Creditor Protection Proceedings were recorded in
“Reorganization items, net,” whereas all charges related to the commencement of an indefinite
idling or permanent closure of a mill or a paper machine prior to the commencement of the Creditor
Protection Proceedings were recorded in “Closure costs, impairment and other related charges,” both
in our Consolidated Statements of Operations. The recognition of Reorganization items, net, unless
specifically prescribed otherwise by FASB ASC 852, was in accordance with other applicable U.S.
GAAP, including accounting for impairments of long-lived assets, accelerated depreciation,
severance and termination benefits and costs associated with exit and disposal activities
(including costs incurred in a restructuring).
Reorganization items, net for the three and six months ended June 30, 2010 were comprised of the
following:
In the three and six months ended June 30, 2010, we paid $28 million and $47 million, respectively,
relating to reorganization items, which were comprised of: (i) professional fees of $23 million and
$42 million, respectively, and (ii) debtor in possession financing costs of $5 million for both
periods. Payments relating to professional fees and debtor in possession financing costs were
included in cash flows from operating activities and cash flows from financing activities,
respectively, in our Consolidated Statements of Cash Flows.
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Condensed Consolidating Financial Information
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Condensed Consolidating Financial Information [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Financial Information |
Note 17. 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 AbitibiBowater Inc.’s issuance of the 2018 Notes that are fully and
unconditionally guaranteed, on a joint and several basis, by all of our 100% owned material U.S.
subsidiaries (the “Guarantor Subsidiaries”). The 2018 Notes are not guaranteed by our foreign
subsidiaries and our less than 100% owned U.S. subsidiaries (the “Non-guarantor Subsidiaries”).
The following condensed consolidating financial information sets forth the Statements of Operations
for the three and six months ended June 30, 2011 and 2010, the Balance Sheets as of June 30, 2011
and December 31, 2010 and the Statements of Cash Flows for the six months ended June 30, 2011 and
2010 for AbitibiBowater Inc. (the “Parent”), the Guarantor Subsidiaries on a combined basis and the
Non-guarantor Subsidiaries 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
elimination entries to eliminate the investments in subsidiaries and intercompany balances and
transactions.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Three Months Ended June 30, 2011 (Successor)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2011 (Successor)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Three Months Ended June 30, 2010 (Predecessor)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2010 (Predecessor)
CONDENSED CONSOLIDATING BALANCE SHEET
As of June 30, 2011 (Successor)
CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2010 (Successor)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 2011 (Successor)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 2010 (Predecessor)
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Share-Based Compensation
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Share-Based Compensation [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation |
Note 15. Share-Based Compensation
On the Emergence Date and pursuant to the Plans of Reorganization, all previously-issued and
outstanding equity-based awards under our various share-based compensation plans were terminated
and the 2010 AbitibiBowater Inc. Equity Incentive Plan (the “2010 LTIP”) became effective. The 2010
LTIP, administered by the Human Resources and Compensation/Nominating and Governance Committee of
the Board of Directors, provides for the grant of equity-based awards, including stock options,
stock appreciation rights, restricted stock, RSUs, deferred stock units (collectively, “stock
incentive awards”) and cash incentive awards to certain of our officers, directors, employees,
consultants and advisors. We have been authorized to issue stock incentive awards for up to
9,020,060 shares under the 2010 LTIP.
As of June 30, 2011, all of our outstanding stock incentive awards were accounted for as
equity-classified, service-based awards and approximately 8.4 million shares were available for
issuance under the 2010 LTIP. As of June 30, 2010, our outstanding stock incentive awards consisted
of both equity-classified and liability-classified awards, some of which included performance
conditions. For the three months ended June 30, 2011 and 2010, share-based compensation expense
was less than $1 million and $1 million, respectively. For the six months ended June 30, 2011 and
2010, share-based compensation expense was $1 million and $3 million, respectively.
Stock options
On January 9, 2011, we issued 626,720 stock options to our non-employee directors and to certain
officers and employees under the 2010 LTIP, with an exercise price of $23.05. The stock options
become exercisable ratably over a period of four years and, unless terminated earlier in accordance
with their terms, expire 10 years from the date of grant.
We calculated the grant-date fair value of the stock options using the Black-Scholes option pricing
model, which resulted in a fair value of $10.75 each. This calculation was based on an expected
dividend yield of zero, an expected volatility of 40.5%, a risk-free interest rate of 2.5% and an
expected life of 6.25 years.
The payment of dividends is restricted under the 2018 Notes indenture and the credit agreement that
governs the ABL Credit Facility; therefore, we assumed an expected dividend yield of zero. Due to
the short trading history of the Successor Company’s common stock, we estimated the expected
volatility based on the historical volatility of a peer group within our industry measured over a
term approximating the expected life of the options. We estimated the risk-free interest rate based
on a zero-coupon U.S. Treasury instrument with a remaining term approximating the expected life of
the options. Historical exercise data attributable to stock incentive awards granted after the
Successor Company’s common stock began publicly trading is non-existent; therefore, we used the
simplified method permitted by Staff Accounting Bulletin Topic 14 to estimate the expected life of
the options. Under this approach, the expected life is presumed to be the midpoint between the
vesting date and the end of the contractual term.
During the six months ended June 30, 2011, 117,379 options were forfeited, which reduced the number
of options outstanding as of June 30, 2011 to 509,341, none of which were exercisable or vested. As of June
30, 2011, there was approximately $4 million of unrecognized compensation cost related to these
stock options, which is expected to be
recognized over a remaining requisite service period of 3.4 years.
Restricted stock units
The activity of RSUs issued to certain officers and employees under the 2010 LTIP for the six
months ended June 30, 2011 was as follows:
Each RSU provides the holder the right to receive one share of our common stock upon vesting. All
RSUs vest ratably over a period of four years. As of June 30, 2011, none of the RSUs outstanding
were vested. As of June 30, 2011, there was approximately $2 million of unrecognized compensation
cost related to these RSUs, which is expected to be recognized over a remaining requisite service
period of 3.6 years.
|
Income (Loss) Per Share
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Income (Loss) Per Share [Abstract] | Â |
Income (Loss) Per Share |
Note 7. Income (Loss) Per Share
The weighted-average number of common shares outstanding used to calculate basic and diluted net
income (loss) per share attributable to AbitibiBowater Inc. common shareholders was 97.1 million
for both the three and six months ended June 30, 2011 and 57.7 million for both the three and six
months ended June 30, 2010.
No adjustments to net income (loss) attributable to AbitibiBowater Inc. common shareholders were
necessary to calculate basic and diluted net income (loss) per share for all periods presented.
For both the three and six months ended June 30, 2011, the dilutive impact of 0.5 million option
shares and 0.1 million equity-classified restricted stock units (“RSUs”) on the weighted-average
number of common shares outstanding used to calculate diluted net income per share was nominal. For
both the three and six months ended June 30, 2010, 3.3 million option shares and 0.1 million RSUs
were excluded from the calculation of diluted net loss per share as the impact would have been
anti-dilutive. For both the three and six months ended June 30, 2010, no adjustment to the diluted
weighted-average number of common shares outstanding for the assumed conversion of the pre-petition
convertible notes, which were outstanding at that time, was necessary as the impact would have been
anti-dilutive.
|
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $)
In Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2011
Successor
|
Jun. 30, 2010
Predecessor
|
|
Net income (loss) including noncontrolling interests | $ 91 | $ (806) |
Other comprehensive income (loss): | Â | Â |
Change in unamortized prior service costs, net of tax of $0 in 2010 | Â | 3 |
Change in unamortized actuarial gains and losses, net of tax of $1 in 2010 | Â | (17) |
Foreign currency translation | 19 | (2) |
Other comprehensive income (loss), net of tax | 19 | (16) |
Comprehensive income (loss) including noncontrolling interests | 110 | (822) |
Less: Comprehensive (income) loss attributable to noncontrolling interests: | Â | Â |
Net loss attributable to noncontrolling interests | Â | 9 |
Foreign currency translation | (5) | Â |
Comprehensive (income) loss attributable to noncontrolling interests | (5) | 9 |
Comprehensive income (loss) attributable to AbitibiBowater Inc. | $ 105 | $ (813) |
Assets Held for Sale, Liabilities Associated with Assets Held for Sale and Net Gain on Disposition of Assets
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Jun. 30, 2011
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Assets Held for Sale, Liabilities Associated with Assets Held for Sale and Net Gain on Disposition of Assets [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets Held for Sale, Liabilities Associated with Assets Held for Sale and Net Gain on Disposition of Assets |
Note 4. Assets Held for Sale, Liabilities Associated with Assets Held for Sale and Net Gain on
Disposition of Assets
Assets held for sale as of June 30, 2011 and December 31, 2010 were comprised of the following:
Liabilities associated with assets held for sale as of June 30, 2011 and December 31, 2010 were
comprised of the following:
As of December 31, 2010, we held for sale the following assets: our investment in ACH Limited
Partnership (“ACH”), our Kenora, Ontario and Alabama River, Alabama paper mills, our
Saint-Fulgence, Quebec and Petit Saguenay, Quebec sawmills and various other assets. These assets
and liabilities held for sale were carried in our Consolidated Balance Sheet as of December 31,
2010 at fair value (as a result of the application of fresh start accounting) less costs to sell.
Since we had control over ACH, our consolidated financial statements included this entity on a
fully consolidated basis.
As of June 30, 2011, we held for sale the following assets: our Alabama River paper mill, our Petit
Saguenay sawmill and various other assets. The assets held for sale are carried in our Consolidated
Balance Sheet as of June 30, 2011 at the lower of carrying value or fair value less costs to sell.
We expect to complete a sale of all of these assets within the next twelve months for amounts that
equal or exceed their individual carrying values.
During the three months ended June 30, 2011, we sold our investment in ACH (for additional
information, see Note 11, “Liquidity and Debt”) and various other assets for cash proceeds of $299
million, resulting in a net gain on disposition of assets of $3 million. Additionally, during the
six months ended June 30, 2011, we sold our Kenora paper mill and various other assets for proceeds
of $5 million, resulting in a net gain on disposition of assets of $1 million.
During the three months ended June 30, 2010, we sold various assets for proceeds of $5 million,
resulting in a net gain on disposition of assets of $4 million. During the six months ended June
30, 2010, we sold timberlands and other assets for proceeds of $13 million, resulting in a net gain
on disposition of assets of $13 million. Additionally, during the three and
six months ended June 30, 2010, as part of our work towards a comprehensive restructuring plan, we
sold various mills and other assets. For additional information, see Note 2, “Creditor Protection
Proceedings – Events prior to emergence from Creditor Protection Proceedings – Reorganization
items, net.”
|
Restricted Cash
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Restricted Cash [Abstract] | Â |
Restricted Cash |
Note 9. Restricted Cash
In connection with the sale of our investment in Manicouagan Power Company (“MPCo”) in December
2009, we provided certain undertakings and indemnities to Alcoa Canada Ltd., our former partner in
MPCo, including an indemnity for potential tax liabilities arising from the transaction. As of June
30, 2011 and December 31, 2010, we maintained a reserve of approximately Cdn$80 million ($83
million, based on the exchange rate in effect on June 30, 2011) and Cdn$80 million ($80 million,
based on the exchange rate in effect on December 31, 2010), respectively, to secure those
obligations. This reserve was included as restricted cash in “Other assets” in our Consolidated
Balance Sheets as of June 30, 2011 and December 31, 2010.
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Other (Expense) Income, Net
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Other (Expense) Income, Net [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other (Expense) Income, Net |
Note 5. Other (Expense) Income, Net
Other (expense) income, net for the three and six months ended June 30, 2011 and 2010 was comprised
of the following:
|
Closure Costs, Impairment and Other Related Charges
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Closure Costs, Impairment and Other Related Charges and Severance Related Liabilities [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Closure Costs, Impairment and Other Related Charges |
Note 3. Closure Costs, Impairment and Other Related Charges
Closure costs, impairment and other related charges for the three and six months ended June 30,
2011 and 2010 were comprised of the following:
Accelerated depreciation
During the three months ended June 30, 2011, we recorded accelerated depreciation charges of $1
million related to the permanent closure of a de-inking line at our Alma, Quebec paper mill and $2
million related to the permanent closure of a paper machine and a thermomechanical pulp line at our
Baie-Comeau, Quebec paper mill. During the six months ended June 30, 2011, we also recorded
accelerated depreciation charges of $1 million as a result of the decision to cease paperboard
production at our Coosa Pines, Alabama paper mill.
Impairment of long-lived assets
During the six months ended June 30, 2011, we recorded long-lived asset impairment charges of $7
million as a result of the decision to cease paperboard production at our Coosa Pines paper mill to
reduce the carrying value of the assets to their
estimated fair value, which was determined based on the assets’ estimated salvage values.
During the six months ended June 30, 2010, we recorded long-lived asset impairment charges of $2
million related to our
previously permanently closed Covington, Tennessee facility to further reduce the carrying value of
the assets to their estimated fair value, which was determined based on the mill’s estimated sales
value.
Severance and other costs
As a result of the decision to cease paperboard production at our Coosa Pines paper mill, during
the three months ended June 30, 2011, we recorded $1 million of severance costs and during the six
months ended June 30, 2011, we also recorded $2 million of severance costs and a $3 million OPEB
plan curtailment loss.
During the three months ended June 30, 2010, we recorded $3 million of severance and other costs,
primarily for miscellaneous adjustments to severance liabilities and asset retirement obligations.
During the six months ended June 30, 2010, we also recorded $3 million of other costs, primarily
for a lawsuit related to a closed mill.
|
Consolidated Statement of Changes in Equity (Unaudited) (Successor, USD $)
In Millions |
Successor
USD ($)
|
Successor
Common Stock
USD ($)
|
Successor
Additional Paid-In Capital
USD ($)
|
Successor
Retained Earnings
USD ($)
|
Successor
Accumulated Other Comprehensive Income
USD ($)
|
Successor
Treasury Stock
USD ($)
|
Successor
Non-controlling Interests
USD ($)
|
---|---|---|---|---|---|---|---|
Beginning Balance at Dec. 31, 2010 | $ 3,987 | $ 0 | $ 3,709 | $ 0 | $ 0 | $ 0 | $ 278 |
Share-based compensation costs for equity-classified awards | 1 | Â | 1 | Â | Â | Â | Â |
Net income | 91 | Â | Â | 91 | Â | Â | Â |
Dividends and distribution paid to noncontrolling interests | (19) | Â | Â | Â | Â | Â | (19) |
Acquisition of noncontrolling interest (Note 11 and Note 13) | (133) | Â | (28) | Â | Â | Â | (105) |
Disposition of investment in ACH Limited Partnership (Note 6 and Note 11) | (107) | Â | Â | Â | (8) | Â | (99) |
Other comprehensive income | 19 | Â | Â | Â | 14 | Â | 5 |
Ending Balance at Jun. 30, 2011 | 3,839 | 0 | 3,682 | 91 | 6 | 0 | 60 |
Beginning Balance at Mar. 31, 2011 | Â | Â | Â | Â | Â | Â | Â |
Net income | 61 | Â | Â | Â | Â | Â | Â |
Ending Balance at Jun. 30, 2011 | $ 3,839 | $ 0 | Â | Â | Â | $ 0 | Â |
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) (Predecessor, USD $)
In Millions |
6 Months Ended |
---|---|
Jun. 30, 2010
|
|
Predecessor
|
 |
Other comprehensive income (loss): | Â |
Unamortized prior service costs, tax portion | $ 0 |
Unamortized actuarial gain and losses, tax portion | $ 1 |
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