10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2016

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

FOR THE TRANSITION PERIOD FROM    TO

COMMISSION FILE NUMBER: 001-33776

RESOLUTE FOREST PRODUCTS INC.

(Exact name of registrant as specified in its charter)

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

111 Duke Street, Suite 5000; Montréal, Quebec; Canada H3C 2M1

(Address of principal executive offices) (Zip Code)

(514) 875-2515

(Registrant’s telephone number, including area code)

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

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

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

    Yes þNo ¨

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

Large accelerated filer þ	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨
		(Do not check if a smaller reporting company)

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

Yes ¨No þ

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes þNo ¨

As of July 29, 2016, there were 89,507,379 shares of Resolute Forest Products Inc. common stock, $0.001 par value, outstanding.

RESOLUTE FOREST PRODUCTS INC.

TABLE OF CONTENTS

	Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2016 and 2015	1
Consolidated Statements of Comprehensive (Loss) Income for the Three and Six Months Ended June 30, 2016 and 2015	2
Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015	3
Consolidated Statements of Changes in Equity for the Six Months Ended June 30, 2016 and 2015	4
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015	5
Notes to Unaudited Interim Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3. Quantitative and Qualitative Disclosures About Market Risk	51
Item 4. Controls and Procedures	51
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	52
Item 1A. Risk Factors	52
Item 6. Exhibits	53
SIGNATURES	54

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RESOLUTE FOREST PRODUCTS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in millions, except per share amounts)

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2016			2015			2016			2015
Sales	$	891		$	926		$	1,768		$	1,846
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		668			692			1,345			1,410
Depreciation and amortization		54			60			106			117
Distribution costs		110			118			222			231
Selling, general and administrative expenses		40			40			78			81
Closure costs, impairment and other related charges		37			—			37			6
Net gain on disposition of assets		—			—			(2	)		—
Operating (loss) income		(18	)		16			(18	)		1
Interest expense		(9	)		(11	)		(19	)		(23	)
Other income, net		—			1			13			6
(Loss) income before income taxes		(27	)		6			(24	)		(16	)
Income tax provision		(13	)		(10	)		(23	)		(20	)
Net loss including noncontrolling interests		(40	)		(4	)		(47	)		(36	)
Net income attributable to noncontrolling interests		(2	)		—			(3	)		(1	)
Net loss attributable to Resolute Forest Products Inc.	$	(42	)	$	(4	)	$	(50	)	$	(37	)
Net loss per share attributable to Resolute Forest Products Inc. common shareholders:
Basic	$	(0.47	)	$	(0.04	)	$	(0.56	)	$	(0.39	)
Diluted		(0.47	)		(0.04	)		(0.56	)		(0.39	)
Weighted-average number of Resolute Forest Products Inc. common shares outstanding:
Basic		89.8			94.1			89.8			94.5
Diluted		89.8			94.1			89.8			94.5

See accompanying notes to unaudited interim Consolidated Financial Statements.

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RESOLUTE FOREST PRODUCTS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Unaudited, in millions)

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2016			2015			2016			2015
Net loss including noncontrolling interests	$	(40	)	$	(4	)	$	(47	)	$	(36	)
Other comprehensive income:
Unamortized prior service credits
Change in unamortized prior service credits		(4	)		(3	)		(8	)		(8	)
Income tax provision		—			—			—			—
Change in unamortized prior service credits, net of tax		(4	)		(3	)		(8	)		(8	)
Unamortized actuarial losses
Change in unamortized actuarial losses		12			19			24			40
Income tax provision		(3	)		(4	)		(6	)		(9	)
Change in unamortized actuarial losses, net of tax		9			15			18			31
Foreign currency translation		1			(1	)		1			(2	)
Other comprehensive income, net of tax		6			11			11			21
Comprehensive (loss) income including noncontrolling interests		(34	)		7			(36	)		(15	)
Comprehensive income attributable to noncontrolling interests		(2	)		—			(3	)		(1	)
Comprehensive (loss) income attributable to Resolute Forest Products Inc.	$	(36	)	$	7		$	(39	)	$	(16	)

See accompanying notes to unaudited interim Consolidated Financial Statements.

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RESOLUTE FOREST PRODUCTS INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited, in millions, except per share amount)

	June 30, 2016			December 31, 2015
Assets
Current assets:
Cash and cash equivalents	$	40		$	58
Accounts receivable, net:
Trade		376			377
Other		75			92
Inventories, net		547			541
Other current assets		48			43
Total current assets		1,086			1,111
Fixed assets, net		1,801			1,810
Amortizable intangible assets, net		101			105
Goodwill		61			59
Deferred income tax assets		1,025			982
Other assets		171			153
Total assets	$	4,245		$	4,220
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities	$	473		$	436
Current portion of long-term debt		1			1
Total current liabilities		474			437
Long-term debt, net of current portion		610			590
Pension and other postretirement benefit obligations		1,188			1,186
Deferred income tax liabilities		2			2
Other liabilities		56			60
Total liabilities		2,330			2,275
Commitments and contingencies
Equity:
Resolute Forest Products Inc. shareholders’ equity:
Common stock, $0.001 par value. 117.5 shares issued and 89.5 shares outstanding as of June 30, 2016 and December 31, 2015		—			—
Additional paid-in capital		3,771			3,765
Deficit		(1,176	)		(1,126	)
Accumulated other comprehensive loss		(576	)		(587	)
Treasury stock at cost, 28.0 shares as of June 30, 2016 and December 31, 2015		(120	)		(120	)
Total Resolute Forest Products Inc. shareholders’ equity		1,899			1,932
Noncontrolling interests		16			13
Total equity		1,915			1,945
Total liabilities and equity	$	4,245		$	4,220

See accompanying notes to unaudited interim Consolidated Financial Statements.

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RESOLUTE FOREST PRODUCTS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited, in millions)

	Six Months Ended June 30, 2016
	Resolute Forest Products Inc. Shareholders’ Equity
	Common Stock		Additional Paid-In Capital		Deficit			Accumulated Other Comprehensive Loss			Treasury Stock			Non-controlling Interests		Total Equity
Balance as of December 31, 2015	$	—	$	3,765	$	(1,126	)	$	(587	)	$	(120	)	$	13	$	1,945
Share-based compensation costs for equity-classified awards		—		6		—			—			—			—		6
Net (loss) income		—		—		(50	)		—			—			3		(47	)
Other comprehensive income, net of tax		—		—		—			11			—			—		11
Balance as of June 30, 2016	$	—	$	3,771	$	(1,176	)	$	(576	)	$	(120	)	$	16	$	1,915

	Six Months Ended June 30, 2015
	Resolute Forest Products Inc. Shareholders’ Equity
	Common Stock		Additional Paid-In Capital		Deficit			Accumulated Other Comprehensive Loss			Treasury Stock			Non- controlling Interests		Total Equity
Balance as of December 31, 2014	$	—	$	3,754	$	(869	)	$	(718	)	$	(61	)	$	11	$	2,117
Share-based compensation costs for equity-classified awards		—		8		—			—			—			—		8
Net (loss) income		—		—		(37	)		—			—			1		(36	)
Purchases of treasury stock (3.2 shares) (Note 12)		—		—		—			—			(37	)		—		(37	)
Other comprehensive income, net of tax		—		—		—			21			—			—		21
Balance as of June 30, 2015	$	—	$	3,762	$	(906	)	$	(697	)	$	(98	)	$	12	$	2,073

See accompanying notes to unaudited interim Consolidated Financial Statements.

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RESOLUTE FOREST PRODUCTS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in millions)

	Six Months Ended   June 30,
	2016			2015
Cash flows from operating activities:
Net loss including noncontrolling interests	$	(47	)	$	(36	)
Adjustments to reconcile net loss including noncontrolling interests to net cash provided by operating activities:
Share-based compensation		6			8
Depreciation and amortization		106			117
Closure costs, impairment and other related charges		37			—
Inventory write-downs related to closures		5			1
Deferred income taxes		21			23
Net pension contributions and other postretirement benefit payments		(45	)		(27	)
Net gain on disposition of assets		(2	)		—
(Gain) loss on translation of foreign currency denominated deferred income taxes		(69	)		89
Loss (gain) on translation of foreign currency denominated pension and other postretirement benefit obligations		57			(84	)
Gain on disposition of equity method investment		(5	)		—
Net planned major maintenance payments		(7	)		(15	)
Changes in working capital:
Accounts receivable		19			53
Inventories		(13	)		3
Other current assets		(3	)		(6	)
Accounts payable and accrued liabilities		10			(41	)
Other, net		(1	)		5
Net cash provided by operating activities		69			90
Cash flows from investing activities:
Cash invested in fixed assets		(99	)		(79	)
Disposition of assets		5			—
Increase in countervailing duty cash deposits		(12	)		—
Increase in deposit requirements for letters of credit, net		(1	)		(4	)
Net cash used in investing activities		(107	)		(83	)
Cash flows from financing activities:
Borrowings under revolving credit facility		20			—
Payments of debt		(1	)		—
Payments of financing and credit facility fees		—			(3	)
Purchases of treasury stock		—			(37	)
Net cash provided by (used in) financing activities		19			(40	)
Effect of exchange rate changes on cash and cash equivalents		1			(1	)
Net decrease in cash and cash equivalents		(18	)		(34	)
Cash and cash equivalents:
Beginning of period		58			337
End of period	$	40		$	303

See accompanying notes to unaudited interim Consolidated Financial Statements.

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

Note 1. Organization and Basis of Presentation

Nature of operations

Resolute Forest Products Inc. (with its subsidiaries and affiliates, either individually or collectively, unless otherwise indicated, referred to as “Resolute Forest Products,” “we,” “our,” “us,” “Parent” or the “Company”) is incorporated in Delaware. We are a global leader in the forest products industry with a diverse range of products, including market pulp, tissue, wood products, newsprint and specialty papers, which are marketed in close to 80 countries. We own or operate over 40 pulp, paper, tissue and wood products facilities in the United States, Canada and South Korea, as well as power generation assets in Canada and the United States.

Financial statements

Our interim Consolidated Financial Statements are unaudited and have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (the “SEC”) for interim reporting. Under those rules, certain footnotes and other financial information that are normally required by U.S. generally accepted accounting principles may be condensed or omitted. In our opinion, all adjustments (consisting of normal recurring adjustments) necessary for the fair statement of the unaudited interim Consolidated Financial Statements have been made. All amounts are expressed in U.S. dollars, unless otherwise indicated. The results for the interim period ended June 30, 2016, are not necessarily indicative of the results to be expected for the full year. These unaudited interim Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 29, 2016. Certain prior period amounts in our Consolidated Balance Sheets and footnotes have been reclassified to conform to the 2016 presentation. The reclassifications had no effect on total assets.

Change in depreciable lives of machinery and equipment

We periodically review the estimated economic useful lives of our fixed assets. Based on this review, effective January 1, 2016, we changed our estimate of the useful lives of certain of our machinery and equipment to reflect a net increase of estimated periods during which these assets will remain in service. As a result, the estimated useful lives of machinery and equipment were changed to a range of five to 25 years, increasing the weighted-average estimated useful lives of machinery and equipment by two years. The effect of this change in estimate for the three and six months ended June 30, 2016 was to reduce “Depreciation and amortization”, “Net loss attributable to Resolute Forest Products Inc.”, and basic and diluted “Net loss per share attributable to Resolute Forest Products Inc. common shareholders” in our Consolidated Statement of Operations as follows:

(Unaudited, in millions, except per share amounts)	Three Months Ended June 30, 2016		Six Months Ended June 30, 2016
Depreciation and amortization	$	3	$	6
Net loss attributable to Resolute Forest Products Inc.		1		3
Basic net loss per share attributable to Resolute Forest Products Inc.		0.01		0.03
Diluted net loss per share attributable to Resolute Forest Products Inc.		0.01		0.03

New accounting pronouncements

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09 “Improvements to Employee Share-Based Payment Accounting,” which is intended to simplify several aspects of the accounting for share-based payment transactions. This update is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted as of the beginning of an interim or annual period. All amendments to the guidance shall be adopted in the same period on a retrospective or prospective basis as required for each amendment. The adoption of this accounting guidance will not materially impact our results of operations, financial position or cash flows.

In March 2016, April 2016, and May 2016, the FASB issued ASU 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU 2016-10, “Identifying Performance Obligations and Licensing,” and ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,” respectively, which further affect the guidance of ASU 2014-09. These updates are effective for fiscal years beginning after December 15, 2017, with early adoption permitted for fiscal years beginning after December 15, 2016. We are still evaluating the impact of this standard on our results of operations and financial position.

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which introduces the current expected credit losses model in the estimation of credit losses on financial instruments. This update is effective retrospectively for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted for fiscal years beginning after December 15, 2018. We are still evaluating the impact of this standard on our results of operations and financial position.

Note 2. Acquisition of Atlas Paper Holdings, Inc.

On November 16, 2015 (the “acquisition date”), we acquired Atlas Paper Holdings, Inc. and its subsidiaries (“Atlas Paper”), a manufacturer of a range of tissue products for the away-from-home and private-label at-home markets, including virgin and recycled products, covering economy, value and premium grades and operating two tissue mills and a recycling facility in Florida.

In 2016, we recorded adjustments to the purchase price allocation due to a change in our preliminary valuation of assets acquired and liabilities assumed as of the acquisition date, which is still subject to adjustment during the 12-month measurement period following the acquisition date or upon completion of the final valuation. As a result, we increased “Goodwill” by $2 million and decreased “Fixed assets, net” and “Amortizable intangible assets, net,” each by $1 million, in our Consolidated Balance Sheet as of June 30, 2016.

The amount of Atlas Paper’s sales and net loss included in our Consolidated Statement of Operations were $24 million and $4 million, respectively, for the three months ended June 30, 2016 and were $47 million and $6 million, respectively, for the six months ended June 30, 2016.

The following unaudited pro forma information for the three and six months ended June 30, 2015 represents our results of operations as if the acquisition of Atlas Paper had occurred on January 1, 2015. This pro forma information does not purport to be indicative of the results that would have occurred for the periods presented or that may be expected in the future.

(Unaudited, in millions except per share data)	Three Months Ended June 30, 2015			Six Months Ended June 30, 2015
Sales	$	950		$	1,894
Net loss attributable to Resolute Forest Products Inc.		(6	)		(37	)
Basic net loss per share attributable to Resolute Forest Products Inc.		(0.06	)		(0.39	)
Diluted net loss per share attributable to Resolute Forest Products Inc.		(0.06	)		(0.39	)

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

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, 2016, were comprised of the following:

(Unaudited, in millions)	Accelerated Depreciation		Severance and Other Costs		Total
Permanent closure
Paper machine in Augusta, Georgia (1)
Second quarter	$	32	$	4	$	36
First six months		32		4		36
Other
Second quarter		1		—		1
First six months		1		—		1
Total
Second quarter	$	33	$	4	$	37
First six months		33		4		37

⁽¹⁾  The final workforce reduction in the third quarter of 2016 did not result in the curtailment of a pension or other postretirement benefit (“OPEB”) plan. As such, no curtailment gain or loss will be recorded in “Closure costs, impairment and other related charges” in our Consolidated Statement of Operations.

Closure costs, impairment and other related charges for the three and six months ended June 30, 2015, were comprised of the following:

(Unaudited, in millions)	Accelerated Depreciation		Severance and Other Costs			Total
Permanent closures
Paper mill in Iroquois Falls, Ontario
Second quarter	$	—	$	1		$	1
First six months		—		5			5
Paper machine in Clermont, Quebec
Second quarter		—		—			—
First six months		2		—			2
Other
Second quarter		—		(1	)		(1	)
First six months		—		(1	)		(1	)
Total
Second quarter	$	—	$	—		$	—
First six months		2		4			6

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

Note 4. Other Income, Net

Other income, net for the three and six months ended June 30, 2016 and 2015, was comprised of the following:

	Three Months Ended   June 30,					Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015		2016		2015
Foreign exchange (loss) gain	$	(3	)	$	1	$	3	$	3
Gain on disposition of equity method investment (1)		—			—		5		—
Miscellaneous income		3			—		5		3
	$	—		$	1	$	13	$	6

⁽¹⁾  On February 1, 2016, we sold for total consideration of $5 million our interest in Produits Forestiers Petit-Paris Inc., an unconsolidated entity located in Saint-Ludger-de-Milot, Quebec, in which we had a 50% interest, resulting in a gain on disposition of $5 million.

Note 5. Accumulated Other Comprehensive Loss

The change in our accumulated other comprehensive loss by component (net of tax) for the six months ended June 30, 2016, was as follows:

(Unaudited, in millions)	Unamortized Prior Service Credits			Unamortized Actuarial Losses			Foreign Currency Translation			Total
Balance as of December 31, 2015	$	84		$	(667	)	$	(4	)	$	(587	)
Other comprehensive income before reclassifications		—			—			1			1
Amounts reclassified from accumulated other comprehensive loss (1)		(8	)		18			—			10
Net current period other comprehensive (loss) income		(8	)		18			1			11
Balance as of June 30, 2016	$	76		$	(649	)	$	(3	)	$	(576	)

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

The reclassifications out of accumulated other comprehensive loss for the six months ended June 30, 2016, were comprised of the following:

(Unaudited, in millions)	Amounts Reclassified From Accumulated Other Comprehensive Loss			Affected Line in the Consolidated Statements of Operations
Unamortized Prior Service Credits
Amortization of prior service credits	$	(8	)	Cost of sales, excluding depreciation, amortization and distribution costs (1)
		—		Income tax provision
	$	(8	)	Net of tax
Unamortized Actuarial Losses
Amortization of actuarial losses	$	24		Cost of sales, excluding depreciation, amortization and distribution costs (1)
		(6	)	Income tax provision
	$	18		Net of tax
Total Reclassifications	$	10		Net of tax

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

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

Note 6. Net Loss Per Share

The weighted-average number of outstanding stock options and nonvested equity-classified restricted stock units, deferred stock units and performance stock units (collectively, “stock unit awards”) for the three and six months ended June 30, 2016 and 2015, was as follows:

	Three Months Ended   June 30,		Six Months Ended   June 30,
(Unaudited, in millions)	2016	2015	2016	2015
Stock options	1.5	1.5	1.5	1.6
Stock unit awards	2.4	1.2	2.4	1.2

These stock options and stock unit awards were excluded from the calculation of diluted net loss per share as the impact would have been antidilutive for all periods presented.

Note 7. Inventories, Net

Inventories, net as of June 30, 2016 and December 31, 2015, were comprised of the following:

(Unaudited, in millions)	June 30, 2016		December 31, 2015
Raw materials and work in process	$	155	$	152
Finished goods		178		179
Mill stores and other supplies		214		210
	$	547	$	541

During the three and six months ended June 30, 2016, we recorded charges of $5 million for write-downs of mill stores and other supplies primarily as a result of the permanent closure of a newsprint machine at our Augusta mill. These charges were included in “Cost of sales, excluding depreciation, amortization and distribution costs” in our Consolidated Statements of Operations.

Note 8. Long-Term Debt

Overview

Long-term debt, including current portion, as of June 30, 2016 and December 31, 2015, was comprised of the following:

(Unaudited, in millions)	June 30, 2016			December 31, 2015
5.875% senior notes due 2023:
Principal amount	$	600		$	600
Deferred financing costs		(6	)		(7	)
Unamortized discount		(4	)		(4	)
Total senior notes due 2023		590			589
Borrowings under revolving credit facility		20			—
Capital lease obligation		1			2
Total debt		611			591
Less: Current portion of long-term debt		(1	)		(1	)
Long-term debt, net of current portion	$	610		$	590

2023 Notes

We issued $600 million in aggregate principal amount of 5.875% senior notes due 2023 (the “2023 Notes”) on May 8, 2013. Upon their issuance, the notes were recorded at their fair value of $594 million, which reflected a discount of $6 million that is being amortized to “Interest expense” in our Consolidated Statements of Operations using the interest method over the term of the notes, resulting in an effective interest rate of 6%. Interest on the notes is payable semi-annually on May 15 and

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

November 15, until their maturity date of May 15, 2023. In connection with the issuance of the notes, we incurred financing costs of approximately $9 million, which were deferred and recorded as a reduction of the notes. These deferred financing costs are being amortized to “Interest expense” in our Consolidated Statements of Operations using the interest method over the term of the notes. The fair value of the 2023 Notes was $473 million and $440 million as of June 30, 2016 and December 31, 2015, respectively, and was determined by reference to over-the-counter prices (Level 1).

ABL Credit Facility

Our senior secured asset-based revolving credit facility (the “ABL Credit Facility”) has a maturity date of May 22, 2020 and provides an aggregate lender commitment of up to $600 million at any time outstanding, subject to borrowing base availability based on specified advance rates, eligibility criteria and customary reserves. As of June 30, 2016, we had $412 million of availability under the ABL Credit Facility, net of $20 million of borrowings and $32 million of ordinary course letters of credit outstanding. We borrowed an additional $60 million under the ABL Credit Facility in July 2016.

Capital lease obligation

We have a capital lease obligation for a warehouse with a maturity date of December 1, 2017, which can be renewed for 20 years at our option. Minimum monthly payments are determined by an escalatory price clause.

Note 9. Employee Benefit Plans

Pension and OPEB plans

The components of net periodic benefit cost relating to our pension and OPEB plans for the three and six months ended June 30, 2016 and 2015, were as follows:

Pension Plans:

	Three Months Ended   June 30,						Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015			2016			2015
Service cost	$	5		$	6		$	10		$	12
Interest cost		55			58			107			116
Expected return on plan assets		(63	)		(67	)		(123	)		(134	)
Amortization of actuarial losses		14			20			27			42
Amortization of prior service credits		(1	)		—			(1	)		(1	)
	$	10		$	17		$	20		$	35

OPEB Plans:

	Three Months Ended   June 30,						Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015			2016			2015
Interest cost	$	2		$	2		$	4		$	4
Amortization of actuarial gains		(2	)		(1	)		(3	)		(2	)
Amortization of prior service credits		(3	)		(3	)		(7	)		(7	)
	$	(3	)	$	(2	)	$	(6	)	$	(5	)

Defined contribution plans

Our expense for the defined contribution plans totaled $5 million and $4 million for the three months ended June 30, 2016 and 2015, respectively, and $10 million for both the six months ended June 30, 2016 and 2015.

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

Note 10. Income Taxes

The income tax provision attributable to (loss) income before income taxes differs from the amounts computed by applying the U.S. federal statutory income tax rate of 35% for the three and six months ended June 30, 2016 and 2015, as a result of the following:

	Three Months Ended   June 30,						Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015			2016			2015
(Loss) income before income taxes	$	(27	)	$	6		$	(24	)	$	(16	)
Income tax provision:
Expected income tax benefit (provision)		9			(2	)		8			6
Changes resulting from:
Valuation allowance (1)		(27	)		(8	)		(45	)		(27	)
Foreign exchange		—			(2	)		3			(7	)
State income taxes and foreign tax rate differences		5			2			11			5
Other, net		—			—			—			3
	$	(13	)	$	(10	)	$	(23	)	$	(20	)

⁽¹⁾  We recorded a valuation allowance of $27 million and $8 million for the three months ended June 30, 2016 and 2015, respectively, and $45 million and $27 million for the six months ended June 30, 2016 and 2015, respectively, primarily related to our U.S. operations where we recognize a full valuation allowance against our net deferred income tax assets.

Deferred tax charge

As a result of a gain on an intercompany asset transfer in connection with an operating company realignment in 2015, a $36 million income tax provision was deferred and recorded in “Other assets” in our Consolidated Balance Sheet as of June 30, 2016. This deferred tax charge is amortized, as the underlying assets are consumed or sold to an unrelated party, in “Income tax provision” in our Consolidated Statements of Operations.

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

Note 11. Commitments and Contingencies

Legal matters

We become involved in various legal proceedings and other disputes in the normal course of business, including matters related to contracts, commercial disputes, taxes, environmental issues, activists’ damages, employment and workers’ compensation claims, Aboriginal claims and other matters. Although the final outcome is subject to many variables and cannot be predicted with any degree of certainty, we regularly assess the status of the matters and establish provisions (including legal costs expected to be incurred) when we believe an adverse outcome is probable, and the amount can be reasonably estimated. Except as described below and for claims that cannot be assessed due to their preliminary nature, we believe that the ultimate disposition of these matters outstanding or pending as of June 30, 2016, will not have a material adverse effect on our Consolidated Financial Statements.

Effective January 1, 2015, we modified our U.S. OPEB plan so that unionized participants, upon reaching Medicare eligibility, are provided Medicare coverage via a Medicare Exchange program rather than via a Company-sponsored medical plan. On March 2, 2016, a proposed class action lawsuit (Reynolds, et al v. Resolute Forest Products Inc., Resolute FP US Inc., Resolute FP US Health and Resolute Welfare Benefit Plan) was filed in the United States District Court for the Eastern District of Tennessee on behalf of certain Medicare-eligible retirees who were previously unionized employees of our Calhoun, Tennessee; Catawba, South Carolina; and Coosa Pines, Alabama mills, and their spouses and dependents. The plaintiffs allege that the modifications described above breach the collective bargaining agreements and plan covering the members of the proposed class in the lawsuit. Plaintiffs seek reinstatement of the health care benefits as in effect before January 1, 2015, for the proposed class in the lawsuit. The Company disputes the allegations in the complaint and intends to defend the action. On May 23, 2016, the Company filed a motion to dismiss the complaint. The proposed class action lawsuit is at a preliminary stage and no class has been certified nor has a date been set to hear our motion to dismiss. Accordingly, we are not presently able to determine the ultimate resolution of this matter or to reasonably estimate the potential impact on our Consolidated Financial Statements.

On February 26, 2015, a countervailing duty petition was filed with the U.S. Department of Commerce (“Commerce”) and the U.S. International Trade Commission (“Trade Commission”) by certain U.S. supercalendered (“SC”) paper producers requesting the U.S. government to impose countervailing duties on Canadian-origin SC paper exported to the U.S. market. One of our subsidiaries was identified in the petition as being a Canadian exporting producer of SC paper to the U.S. and was selected as a mandatory respondent to be individually investigated by Commerce. On August 3, 2015, Commerce assigned a preliminary subsidy rate of 2.04% to our SC paper produced at our Canadian mills. On October 15, 2015, Commerce issued a final determination and increased the subsidy rate applicable to our Canadian-produced SC paper to 17.87%. In December 2015, the Trade Commission ruled that exports of SC paper from Canada to the U.S. have caused or threatened to cause material injury to the U.S. SC paper industry and Commerce issued its final order on the basis of the 17.87% rate. As a result, since October 20, 2015, we have been required to make cash deposits at the 17.87% subsidy rate for estimated and projected countervailing duties on SC papers we import to the U.S. from our Canadian mills. We will be required to continue making cash deposits at that rate until Commerce sets a countervailing duty rate in an administrative review, which may not be finalized until December of 2017, or possibly later. Resolute has appealed the determination of Commerce to a bi-national panel under the North American Free Trade Agreement. Based on our current operating parameters, the cash deposits could be as high as $25 million per year. As of June 30, 2016, we have made $16 million of cash deposits. To the extent the countervailing duty rate set by Commerce is lower than 17.87%, we will recover excess deposits, plus interest. If the countervailing duty rate set by Commerce is at or above 17.87%, the deposits and any deficiency will be converted into actual countervailing duties. We are not presently able to determine the ultimate resolution of this matter, but we believe it is not probable that we will be assessed with significant countervailing duties. Accordingly, no contingent loss was recorded in respect of this petition in our Consolidated Statement of Operations for the six months ended June 30, 2016.

Effective July 31, 2012, we completed the final step of the transaction pursuant to which we acquired the remaining 25.4% of the outstanding Fibrek Inc. (“Fibrek”) shares, following the approval of Fibrek’s shareholders on July 23, 2012, and the issuance of a final order of the Quebec Superior Court in Canada approving the arrangement on July 27, 2012. Certain former shareholders of Fibrek exercised (or purported to exercise) rights of dissent in respect of the transaction, asking for a judicial determination of the fair value of their claim under the Canada Business Corporations Act. No consideration has to date been paid to the former Fibrek shareholders who exercised (or purported to exercise) rights of dissent. Any such consideration will only be paid out upon settlement or judicial determination of the fair value of their claims and will be paid entirely in cash. Accordingly, we cannot presently determine the amount that ultimately will be paid to former holders of Fibrek shares in connection with the proceedings, but we have accrued approximately Cdn $14 million ($11 million, based on the exchange rate in effect on June 30, 2016) for the eventual payment of those claims. The hearing in this matter is expected to begin in 2019.

13

RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

On June 12, 2012, we filed a motion for directives with the Quebec Superior Court, the Canadian court with jurisdiction in the creditor protection proceedings from which AbitibiBowater Inc. (our predecessor entity) and all but one of its affiliates emerged in 2010 (the “Creditor Protection Proceedings”), seeking an order to prevent pension regulators in each of Quebec, New Brunswick, and Newfoundland and Labrador from declaring partial wind-ups of pension plans relating to employees of former operations in New Brunswick, and Newfoundland and Labrador, or a declaration that any claim for accelerated reimbursements of deficits arising from a partial wind-up is a barred claim under the Creditor Protection Proceedings. These plans are subject to the funding relief regulations described in Note 13, “Pension and Other Postretirement Benefit Plans - Canadian pension funding,” to our Consolidated Financial Statements for the year ended December 31, 2015, and we contend, among other things, that any such declaration, if issued, would be inconsistent with the Quebec Superior Court’s sanction order confirming the plan of reorganization and the terms of our emergence from the Creditor Protection Proceedings. A partial wind-up would likely shorten the period in which any deficit within those plans, which could reach up to Cdn $150 million ($115 million, based on the exchange rate in effect on June 30, 2016), would have to be funded if we do not obtain the relief sought. No hearing date has been set to date.

Environmental matters

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

We may be a “potentially responsible party” with respect to four hazardous waste sites that are being addressed pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (commonly known as Superfund) or the Resource Conservation and Recovery Act corrective action authority. We believe we will not be liable for any significant amounts at any of these sites.

We have recorded $9 million and $12 million of environmental liabilities as of June 30, 2016 and December 31, 2015, respectively, primarily related to environmental remediation related to closed sites. The amount of these liabilities represents management’s estimate of the ultimate settlement based on an assessment of relevant factors and assumptions and could be affected by changes in facts or assumptions not currently known to management for which the outcome cannot be reasonably estimated at this time. These liabilities are included in “Accounts payable and accrued liabilities” or “Other liabilities” in our Consolidated Balance Sheets.

We have also recorded $22 million and $23 million of asset retirement obligations as of June 30, 2016 and December 31, 2015, respectively, primarily consisting of liabilities associated with landfills, sludge basins and the dismantling of retired assets. These liabilities are included in “Other liabilities” in our Consolidated Balance Sheets.

Other matters

On October 30, 2014, we received a notice from the Ministry of Natural Resources and Forestry of Ontario (the “MNRF”) directing us to repay a conditional incentive of Cdn $23 million ($18 million, based on the exchange rate in effect on June 30, 2016) offered in 2007 toward the construction of an electricity-producing turbine, should we fail to restart our Fort Frances, Ontario, pulp and paper mill or otherwise implement an alternative remedy that is acceptable to the MNRF. Several extensions to implement an alternative remedy have been granted to us by the MNRF, with the latest remedy date being October 31, 2016. We announced the permanent closure of the mill in the second quarter of 2014 and have been exploring a number of opportunities for the mill. We are not presently able to determine the outcome of this process, but we currently believe that we could reach an acceptable outcome for the MNRF. Accordingly, we have recorded no contingent liability in respect of this notice in our Consolidated Balance Sheet as of June 30, 2016.

Note 12. Share Capital

On May 28, 2015, our board of directors authorized a $50 million increase to our existing $100 million share repurchase program, which was originally launched in May of 2012. During the three and six months ended June 30, 2015, we repurchased 3.2 million shares, at a cost of $37 million. We did not repurchase any shares during the three and six months ended June 30, 2016. There remains $24 million under the program.

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

Note 13. Segment Information

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

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

Information about certain segment data for the three and six months ended June 30, 2016 and 2015, was as follows:

(Unaudited, in millions)	Market Pulp (1)		Tissue			Wood Products (2)			Newsprint			Specialty Papers		Segment Total		Corporate and Other			Total
Sales
Second quarter
2016	$	210	$	24		$	145		$	257		$	255	$	891	$	—		$	891
2015		231		—			134			289			272		926		—			926
First six months
2016		421		47			264			514			522		1,768		—			1,768
2015		449		—			273			580			544		1,846		—			1,846
Depreciation and amortization (3)
Second quarter
2016	$	11	$	2		$	9		$	19		$	10	$	51	$	3		$	54
2015		12		—			9			16			19		56		4			60
First six months
2016		18		4			16			39			23		100		6			106
2015		26		—			17			32			36		111		6			117
Operating income (loss)
Second quarter
2016	$	12	$	(4	)	$	20		$	(3	)	$	16	$	41	$	(59	)	$	(18	)
2015		26		—			(4	)		3			17		42		(26	)		16
First six months
2016		32		(6	)		16			(8	)		23		57		(75	)		(18	)
2015		37		—			1			—			22		60		(59	)		1

⁽¹⁾  Market pulp sales excluded inter-segment sales of $10 million and $5 million for the three months ended June 30, 2016 and 2015, respectively, and $15 million and $8 million for the six months ended June 30, 2016 and 2015, respectively, which are transacted at cost.

⁽²⁾  Wood products sales to our joint ventures, which are transacted at arm’s length negotiated prices, were $5 million for both the three months ended June 30, 2016 and 2015, and$10 million and $9 million for the six months ended June 30, 2016 and 2015, respectively.

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

⁽³⁾  As discussed inNote 1, “Organization and Basis of Presentation,” we changed our estimate of the useful lives of certain of our machinery and equipment to reflect a net increase of estimated periods during which these assets will remain in service. The effect of this change in estimate was to (decrease) increase “Depreciation and amortization” by reportable segment for the three and six months ended June 30, 2016 as follows:

(Unaudited, in millions)	Market Pulp			Tissue		Wood Products			Newsprint		Specialty Papers			Total
Second quarter 2016	$	(4	)	$	—	$	(3	)	$	6	$	(2	)	$	(3	)
First six months 2016		(10	)		—		(6	)		12		(2	)		(6	)

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

Note 14. 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 in connection with Resolute Forest Products Inc.’s 2023 Notes that are fully and unconditionally guaranteed, on a joint and several basis, by all of our 100% owned material U.S. subsidiaries (the “Guarantor Subsidiaries”). The 2023 Notes are not guaranteed by our foreign subsidiaries (the “Non-guarantor Subsidiaries”).

The following condensed consolidating financial information sets forth the Statements of Operations and Comprehensive (Loss) Income for the three and six months ended June 30, 2016 and 2015, the Balance Sheets as of June 30, 2016 and December 31, 2015, and the Statements of Cash Flows for the six months ended June 30, 2016 and 2015 for 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 AND COMPREHENSIVE (LOSS) INCOME
For the Three Months Ended June 30, 2016
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	730		$	537		$	(376	)	$	891
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			678			365			(375	)		668
Depreciation and amortization		—			21			33			—			54
Distribution costs		—			40			70			—			110
Selling, general and administrative expenses		5			16			19			—			40
Closure costs, impairment and other related charges		—			37			—			—			37
Operating (loss) income		(5	)		(62	)		50			(1	)		(18	)
Interest expense		(21	)		—			(2	)		14			(9	)
Other income (expense), net		—			16			(2	)		(14	)		—
Equity in loss of subsidiaries		(16	)		(9	)		—			25			—
(Loss) income before income taxes		(42	)		(55	)		46			24			(27	)
Income tax provision		—			(1	)		(12	)		—			(13	)
Net (loss) income including noncontrolling interests		(42	)		(56	)		34			24			(40	)
Net income attributable to noncontrolling interests		—			—			(2	)		—			(2	)
Net (loss) income attributable to Resolute Forest Products Inc.	$	(42	)	$	(56	)	$	32		$	24		$	(42	)
Comprehensive (loss) income attributable to Resolute Forest Products Inc.	$	(36	)	$	(59	)	$	41		$	18		$	(36	)

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
For the Six Months Ended June 30, 2016
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	1,471		$	1,053		$	(756	)	$	1,768
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			1,383			718			(756	)		1,345
Depreciation and amortization		—			43			63			—			106
Distribution costs		—			83			139			—			222
Selling, general and administrative expenses		10			32			36			—			78
Closure costs, impairment and other related charges		—			37			—			—			37
Net gain on disposition of assets		—			—			(2	)		—			(2	)
Operating (loss) income		(10	)		(107	)		99			—			(18	)
Interest expense		(39	)		—			(6	)		26			(19	)
Other income, net		—			35			4			(26	)		13
Equity in loss of subsidiaries		(1	)		(22	)		—			23			—
(Loss) income before income taxes		(50	)		(94	)		97			23			(24	)
Income tax provision		—			(1	)		(22	)		—			(23	)
Net (loss) income including noncontrolling interests		(50	)		(95	)		75			23			(47	)
Net income attributable to noncontrolling interests		—			—			(3	)		—			(3	)
Net (loss) income attributable to Resolute Forest Products Inc.	$	(50	)	$	(95	)	$	72		$	23		$	(50	)
Comprehensive (loss) income attributable to Resolute Forest Products Inc.	$	(39	)	$	(101	)	$	89		$	12		$	(39	)

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three Months Ended June 30, 2015
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	747		$	559		$	(380	)	$	926
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			676			397			(381	)		692
Depreciation and amortization		—			23			37			—			60
Distribution costs		—			41			76			1			118
Selling, general and administrative expenses		3			14			23			—			40
Operating (loss) income		(3	)		(7	)		26			—			16
Interest expense		(18	)		(1	)		(2	)		10			(11	)
Other income, net		—			9			2			(10	)		1
Equity in income of subsidiaries		17			—			—			(17	)		—
(Loss) income before income taxes		(4	)		1			26			(17	)		6
Income tax provision		—			—			(10	)		—			(10	)
Net (loss) income including noncontrolling interests		(4	)		1			16			(17	)		(4	)
Net income attributable to noncontrolling interests		—			—			—			—			—
Net (loss) income attributable to Resolute Forest Products Inc.	$	(4	)	$	1		$	16		$	(17	)	$	(4	)
Comprehensive income attributable to Resolute Forest Products Inc.	$	7		$	1		$	27		$	(28	)	$	7

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RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
For the Six Months Ended June 30, 2015
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	1,498		$	1,140		$	(792	)	$	1,846
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			1,380			821			(791	)		1,410
Depreciation and amortization		—			46			71			—			117
Distribution costs		—			82			149			—			231
Selling, general and administrative expenses		6			26			49			—			81
Closure costs, impairment and other related charges		—			—			6			—			6
Operating (loss) income		(6	)		(36	)		44			(1	)		1
Interest expense		(36	)		(2	)		(4	)		19			(23	)
Other (expense) income, net		(1	)		21			5			(19	)		6
Equity in income of subsidiaries		6			—			—			(6	)		—
(Loss) income before income taxes		(37	)		(17	)		45			(7	)		(16	)
Income tax benefit (provision)		—			4			(24	)		—			(20	)
Net (loss) income including noncontrolling interests		(37	)		(13	)		21			(7	)		(36	)
Net income attributable to noncontrolling interests		—			—			(1	)		—			(1	)
Net (loss) income attributable to Resolute Forest Products Inc.	$	(37	)	$	(13	)	$	20		$	(7	)	$	(37	)
Comprehensive (loss) income attributable to Resolute Forest Products Inc.	$	(16	)	$	(13	)	$	41		$	(28	)	$	(16	)

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Notes to Unaudited Interim Consolidated Financial Statements

CONDENSED CONSOLIDATING BALANCE SHEET
As of June 30, 2016
(Unaudited, in millions)	Parent		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Consolidating Adjustments			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	6	$	34	$	—		$	40
Accounts receivable, net		—		310		141		—			451
Accounts receivable from affiliates		—		455		381		(836	)		—
Inventories, net		—		255		298		(6	)		547
Note, advance and interest receivable from parent		—		366		—		(366	)		—
Notes and interest receivable from affiliates		—		49		—		(49	)		—
Other current assets		—		34		14		—			48
Total current assets		—		1,475		868		(1,257	)		1,086
Fixed assets, net		—		649		1,152		—			1,801
Amortizable intangible assets, net		—		44		57		—			101
Goodwill		—		61		—		—			61
Deferred income tax assets		—		—		1,024		1			1,025
Note receivable from parent		—		428		—		(428	)		—
Note receivable from affiliate		—		113		—		(113	)		—
Investments in consolidated subsidiaries and affiliates		4,077		2,025		—		(6,102	)		—
Other assets		—		54		117		—			171
Total assets	$	4,077	$	4,849	$	3,218	$	(7,899	)	$	4,245
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities	$	4	$	218	$	251	$	—		$	473
Current portion of long-term debt		—		1		—		—			1
Accounts payable to affiliates		455		381		—		(836	)		—
Note, advance and interest payable to subsidiaries		366		—		—		(366	)		—
Notes and interest payable to affiliate		—		—		49		(49	)		—
Total current liabilities		825		600		300		(1,251	)		474
Long-term debt, net of current portion		590		20		—		—			610
Note payable to subsidiary		428		—		—		(428	)		—
Note payable to affiliate		—		—		113		(113	)		—
Pension and other postretirement benefit obligations		—		343		845		—			1,188
Deferred income tax liabilities		—		1		1		—			2
Other liabilities		—		24		32		—			56
Total liabilities		1,843		988		1,291		(1,792	)		2,330
Total equity		2,234		3,861		1,927		(6,107	)		1,915
Total liabilities and equity	$	4,077	$	4,849	$	3,218	$	(7,899	)	$	4,245

21

RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2015
(Unaudited, in millions)	Parent		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Consolidating Adjustments			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	13	$	45	$	—		$	58
Accounts receivable, net		—		323		146		—			469
Accounts receivable from affiliates		—		421		272		(693	)		—
Inventories, net		—		257		290		(6	)		541
Advance and interest receivable from parent		—		62		—		(62	)		—
Notes and interest receivable from affiliates		—		48		—		(48	)		—
Other current assets		—		21		22		—			43
Total current assets		—		1,145		775		(809	)		1,111
Fixed assets, net		—		629		1,181		—			1,810
Amortizable intangible assets, net		—		46		59		—			105
Goodwill		—		59		—		—			59
Deferred income tax assets		—		—		981		1			982
Notes receivable from parent		—		710		—		(710	)		—
Note receivable from affiliate		—		105		—		(105	)		—
Investments in consolidated subsidiaries and affiliates		4,067		2,047		—		(6,114	)		—
Other assets		—		48		105		—			153
Total assets	$	4,067	$	4,789	$	3,101	$	(7,737	)	$	4,220
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities	$	5	$	189	$	242	$	—		$	436
Current portion of long-term debt		—		1		—		—			1
Accounts payable to affiliates		433		260		—		(693	)		—
Advance and interest payable to subsidiaries		62		—		—		(62	)		—
Notes and interest payable to affiliate		—		—		48		(48	)		—
Total current liabilities		500		450		290		(803	)		437
Long-term debt, net of current portion		589		1		—		—			590
Notes payable to subsidiaries		710		—		—		(710	)		—
Note payable to affiliate		—		—		105		(105	)		—
Pension and other postretirement benefit obligations		—		352		834		—			1,186
Deferred income tax liabilities		—		—		2		—			2
Other liabilities		1		24		35		—			60
Total liabilities		1,800		827		1,266		(1,618	)		2,275
Total equity		2,267		3,962		1,835		(6,119	)		1,945
Total liabilities and equity	$	4,067	$	4,789	$	3,101	$	(7,737	)	$	4,220

22

RESOLUTE FOREST PRODUCTS INC.

Notes to Unaudited Interim Consolidated Financial Statements

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 2016
(Unaudited, in millions)	Parent		Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash provided by operating activities	$	—	$	56		$	13		$	—		$	69
Cash flows from investing activities:
Cash invested in fixed assets		—		(67	)		(32	)		—			(99	)
Disposition of assets		—		—			5			—			5
Increase in countervailing duty cash deposits		—		(12	)		—			—			(12	)
Increase in deposit requirements for letters of credit, net		—		—			(1	)		—			(1	)
Increase of notes receivable from affiliate		—		(3	)		—			3			—
Net cash used in investing activities		—		(82	)		(28	)		3			(107	)
Cash flows from financing activities:
Borrowings under revolving credit facility		—		20			—			—			20
Payments of debt		—		(1	)		—			—			(1	)
Increase of notes payable to affiliate		—		—			3			(3	)		—
Net cash provided by financing activities		—		19			3			(3	)		19
Effect of exchange rate changes on cash and cash equivalents		—		—			1			—			1
Net decrease in cash and cash equivalents		—		(7	)		(11	)		—			(18	)
Cash and cash equivalents:
Beginning of period		—		13			45			—			58
End of period	$	—	$	6		$	34		$	—		$	40

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 2015
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash provided by operating activities	$	—		$	80		$	10		$	—		$	90
Cash flows from investing activities:
Cash invested in fixed assets		—			(37	)		(42	)		—			(79	)
Increase in deposit requirements for letters of credit, net		—			—			(4	)		—			(4	)
Advance to parent		—			(37	)		—			37			—
Net cash used in investing activities		—			(74	)		(46	)		37			(83	)
Cash flows from financing activities:
Payments of financing and credit facility fees		—			(2	)		(1	)		—			(3	)
Purchases of treasury stock		(37	)		—			—			—			(37	)
Advance from subsidiary		37			—			—			(37	)		—
Net cash used in financing activities		—			(2	)		(1	)		(37	)		(40	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(1	)		—			(1	)
Net increase (decrease) in cash and cash equivalents		—			4			(38	)		—			(34	)
Cash and cash equivalents:
Beginning of period		—			257			80			—			337
End of period	$	—		$	261		$	42		$	—		$	303

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

The following management’s discussion and analysis is intended to help the reader understand Resolute Forest Products, our results of operations, cash flows and financial condition. The discussion is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes contained in Item 1 – Financial Statements.

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

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

Statements in this quarterly report on Form 10-Q that are not reported financial results or other historical information of Resolute Forest Products are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. They include, for example, statements relating to our: efforts and initiatives to reduce costs and increase revenues and profitability; business and operating outlook; future financial results, including financial measures not recognized under generally accepted accounting principles (or “GAAP”); future pension funding obligations; assessment of market conditions; growth strategies and prospects, and the growth potential of the Company and the industry in which we operate; liquidity; the expected benefits of our acquisition of Atlas Paper Holdings, Inc. and its subsidiaries (or “Atlas Paper”); and strategies for achieving our goals generally. Forward-looking statements may be identified by the use of forward-looking terminology such as the words “should,” “would,” “could,” “will,” “may,” “expect,” “believe,” “anticipate,” “attempt,” “project” and other terms with similar meaning indicating possible future events or potential impact on our business or Resolute Forest Products’ shareholders.

The reader is cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance. These statements are based on management’s current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties that could cause actual results to differ materially. The potential risks and uncertainties that could cause our actual future financial condition, results of operations and performance to differ materially from those expressed or implied in this quarterly report on Form 10-Q include, but are not limited to, the impact of: developments in alternative media, which are expected to adversely affect the demand for some of our key products, and the effectiveness of our responses to these developments; any additional closure costs and long-lived asset or goodwill impairment or accelerated depreciation charges; currency fluctuations; global economic conditions; intense competition in the forest products industry; negative publicity, even if unjustified; the highly cyclical nature of the forest products industry; contributions to our Canadian pension plans at levels higher than expected; the terms of our outstanding indebtedness, which could restrict our current and future operations; our ability to maintain adequate capital resources to provide for all of our substantial capital requirements; any inability to successfully implement our strategies to increase our earnings power; the possible failure to successfully integrate our businesses and the businesses of Atlas Paper or that such integration may be more difficult, time-consuming or costly than expected or expected benefits from the acquisition may not be fully realized or realized within the expected time frame; future acquisitions, divestitures or other strategic transactions or projects we may pursue; any failure to comply with environmental or other laws or regulations, even if inadvertent; legal proceedings or disputes; future regulation of our Canadian softwood lumber exports to the United States; countervailing duties, cash deposit requirements or other trade remedies, which could require us to set aside or pay a substantial amount of cash and impact the competitive position of the affected operations; any difficulties in obtaining wood fiber at favorable prices, or at all; changes in the cost of purchased energy and other raw materials; any labor disputes; changes in political or economic conditions in Canada, the United States or other countries in which our products are manufactured or sold; physical and financial risks associated with climate change; any additional environmental or health and safety liabilities; disruptions to our supply chain, operations or the delivery of our products; losses that are not covered by insurance; the actions of holders of a significant percentage of our common stock; extreme weather conditions or natural or man-made disasters; cyber security risks; and the potential risks and uncertainties set forth under Part I, Item 1A, “Risk Factors,” of our annual report on Form 10-K for the year ended December 31, 2015, filed with the U.S. Securities and Exchange Commission, or the “SEC”, on February 29, 2016 (the “2015 Annual Report”).

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

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Market and industry data

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

OVERVIEW

Resolute Forest Products is a global leader in the forest products industry with a diverse range of products, including market pulp, tissue, wood products, newsprint and specialty papers, which are marketed in close to 80 countries. The company owns or operates over 40 pulp, paper, tissue and wood products facilities in the United States, Canada and South Korea, as well as power generation assets in Canada and the United States. We’re the biggest Canadian producer of wood products east of the Rockies and one of the most significant pulp producers in North America. By capacity, we are the number one producer of newsprint in the world and the largest producer of uncoated mechanical papers in North America. We are also an emerging tissue producer.

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

We are guided by our vision and values, focusing on safety, profitability, accountability, sustainability and teamwork. These are the elements that we believe best define us:

• Competitive cost structure - as a result of aggressive cost reductions and mill rationalizations, today we compete as a leading, lower-cost North American producer. Maintaining this competitive advantage is our key focus. We are committed to maximizing shareholder value and earnings power by: stressing our guiding principles of operational excellence in everything we do; pushing to optimize our asset base in order to maximize the utilization of our most cost-effective mills; and streamlining production to adapt to changing market dynamics.

• Financial strength - we make disciplined capital management a priority; we believe in maintaining a flexible and conservative capital structure. Our financial strength gives us the ability to consider a range of suitable opportunities, and the patience to make sure the valuation is right.

• Synergistic and diversified asset base - we apply our principles of operational excellence to our synergistic and diversified asset base, one that has evolved with time as we execute our gradual retreat from certain paper grades toward more sustainable long-term businesses. Put simply, we use cash flow from our optimized paper segments to grow our business for the long-term, including: the Calhoun, Tennessee, tissue manufacturing and converting facility scheduled for ramp-up in 2017; the two tissue mills and the three pulp mills we acquired in 2015 and 2012, respectively; the capacity enhancement initiatives in wood products; and the continuous pulp digester project at the Calhoun pulp and paper facility. This synergistic and complementary asset base also offers the fiber management advantage of integration and earnings diversification.

Our Business

For information relating to our business, including our products, strategy, sustainable performance and development, and power generation assets, refer to our 2015 Annual Report.

Second Quarter Overview

Three months ended June 30, 2016 vs. June 30, 2015

Our operating loss was $18 million in the quarter, compared to operating income of $16 million in the second quarter of 2015. Excluding special items, we generated operating income of $31 million, compared to $29 million in the year-ago period. Special items are described below.

Our net loss in the quarter was $42 million, or $0.47 per share, compared to a net loss of $4 million, or $0.04 per share, in the year-ago period. Our net income in the quarter, excluding special items, was $6 million, or $0.07 per share, consistent with net income, excluding special items, of $7 million, or $0.07 per share, in the year-ago period.

25

Three Months Ended June 30, 2016	Operating Income (Loss)			Net Income (Loss)			EPS
(Unaudited, in millions, except per share amounts)
GAAP, as reported	$	(18	)	$	(42	)	$	(0.47	)
Adjustments for special items:
Foreign exchange translation loss		—			3			0.03
Closure costs, impairment and other related charges		37			37			0.41
Inventory write-downs related to closures		5			5			0.06
Start-up costs		1			1			0.01
Non-operating pension and OPEB costs		6			6			0.07
Other income, net		—			(3	)		(0.03	)
Income tax effect of special items		—			(1	)		(0.01	)
Adjusted for special items (1)	$	31		$	6		$	0.07

Three Months Ended June 30, 2015	Operating Income (Loss)		Net Income (Loss)			EPS
(Unaudited, in millions, except per share amounts)
GAAP, as reported	$	16	$	(4	)	$	(0.04	)
Adjustments for special items:
Foreign exchange translation gain		—		(1	)		(0.01	)
Start-up costs		1		1			0.01
Non-operating pension and OPEB costs		12		12			0.12
Income tax effect of special items		—		(1	)		(0.01	)
Adjusted for special items (1)	$	29	$	7		$	0.07

⁽¹⁾  Operating income (loss), net income (loss) and net income (loss) per share (or “EPS”), in each case as adjusted for special items, are not financial measures recognized under GAAP. We calculate operating income (loss), as adjusted for special items, as operating income (loss) from our Consolidated Statements of Operations, adjusted for items such as closure costs, impairment and other related charges, inventory write-downs related to closures, start-up costs, gains and losses on disposition of assets, non-operating pension and other postretirement benefit (or “OPEB”) costs and credits, and other charges or credits that are excluded from our segment’s performance from GAAP operating income (loss). We calculate net income (loss), as adjusted for special items, as net income (loss) from our Consolidated Statements of Operations, adjusted for the same special items applied to operating income (loss), in addition to foreign exchange translation gains and losses, other income (expense), net, and the income tax effect of the special items. EPS, as adjusted for special items, is calculated as net income (loss), as adjusted for special items, per diluted share. We believe that using these non-GAAP measures is useful because they are consistent with the indicators management uses internally to measure the Company’s performance, and it allows the reader to more easily compare our operations and financial performance from period to period. Operating income (loss), net income (loss) and EPS, in each case as adjusted for special items, are internal measures, and therefore may not be comparable to those of other companies. These non-GAAP measures should not be viewed as substitutes to financial measures determined under GAAP.

26

Six months ended June 30, 2016 vs. June 30, 2015

Unadjusted for special items, operating loss was $18 million, in the first half of the year, compared to operating income of$1 million in the year-ago period. Excluding special items, we generated operating income of $38 million, compared to $36 million in the year-ago period. Special items are described below.

Unadjusted for special items, our net loss in the first half of the year was $50 million, or $0.56 per share, compared to a net loss of $37 million, or $0.39 per share, for the first six months of 2015. Our net loss in the period, excluding special items, was$12 million, or $0.13 per share, unchanged from net loss, excluding special items, of $12 million, or $0.13 per share, in the year-ago period.

Six Months Ended June 30, 2016	Operating Income (Loss)			Net Income (Loss)			EPS
(Unaudited, in millions, except per share amounts)
GAAP, as reported	$	(18	)	$	(50	)	$	(0.56	)
Adjustments for special items:
Foreign exchange translation gain		—			(3	)		(0.03	)
Closure costs, impairment and other related charges		37			37			0.41
Inventory write-downs related to closures		5			5			0.06
Start-up costs		4			4			0.05
Net gain on disposition of assets		(2	)		(2	)		(0.02	)
Non-operating pension and OPEB costs		12			12			0.13
Other income, net		—			(10	)		(0.11	)
Income tax effect of special items		—			(5	)		(0.06	)
Adjusted for special items (1)	$	38		$	(12	)	$	(0.13	)

Six Months Ended June 30, 2015	Operating Income (Loss)		Net Income (Loss)			EPS
(Unaudited, in millions, except per share amounts)
GAAP, as reported	$	1	$	(37	)	$	(0.39	)
Adjustments for special items:
Foreign exchange translation gain		—		(3	)		(0.03	)
Closure costs, impairment and other related charges		6		6			0.06
Inventory write-downs related to closures		1		1			0.01
Start-up costs		2		2			0.02
Non-operating pension and OPEB costs		26		26			0.27
Other income, net		—		(3	)		(0.03	)
Income tax effect of special items		—		(4	)		(0.04	)
Adjusted for special items (1)	$	36	$	(12	)	$	(0.13	)

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

27

RESULTSOF OPERATIONS

Consolidated Results

Selected financial information

	Three Months Ended   June 30,						Six Months Ended   June 30,
(Unaudited, in millions, except per share amounts and percentages)	2016			2015			2016			2015
Sales	$	891		$	926		$	1,768		$	1,846
Operating income (loss) per segment:
Market pulp		12			26			32			37
Tissue		(4	)		—			(6	)		—
Wood products		20			(4	)		16			1
Newsprint		(3	)		3			(8	)		—
Specialty papers		16			17			23			22
Segment total		41			42			57			60
Corporate and other		(59	)		(26	)		(75	)		(59	)
Operating (loss) income		(18	)		16			(18	)		1
Net loss		(42	)		(4	)		(50	)		(37	)
Net loss per common share:
Basic	$	(0.47	)	$	(0.04	)	$	(0.56	)	$	(0.39	)
Diluted		(0.47	)		(0.04	)		(0.56	)		(0.39	)
Adjusted EBITDA (1)	$	85		$	89		$	144		$	153

(Unaudited, in millions)	June 30,    2016		December 31,    2015
Cash and cash equivalents	$	40	$	58
Total assets		4,245		4,220

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

28

	Three Months Ended   June 30,						Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015			2016			2015
Net loss including noncontrolling interests	$	(40	)	$	(4	)	$	(47	)	$	(36	)
Interest expense		9			11			19			23
Income tax provision		13			10			23			20
Depreciation and amortization		54			60			106			117
EBITDA	$	36		$	77		$	101		$	124
Foreign exchange translation loss (gain)		3			(1	)		(3	)		(3	)
Closure costs, impairment and other related charges		37			—			37			6
Inventory write-downs related to closures		5			—			5			1
Start-up costs		1			1			4			2
Net gain on disposition of assets		—			—			(2	)		—
Non-operating pension and OPEB costs		6			12			12			26
Other income, net		(3	)		—			(10	)		(3	)
Adjusted EBITDA	$	85		$	89		$	144		$	153

On November 16, 2015 (or the “acquisition date”), we acquired Atlas Paper, a manufacturer of a range of tissue products. We began consolidating the results of operations of Atlas Paper in our Consolidated Financial Statements as of the acquisition date. During the three and six months ended June 30, 2016, the tissue segment generated sales of $24 million and $47 million,respectively, and incurred an operating loss of $4 million and $6 million, respectively.

Three months ended June 30, 2016 vs. June 30, 2015

Operating (loss) income variance analysis

Sales

Notwithstanding Atlas Paper sales of $24 million, sales were $35 million, or 4%, lower than in the year-ago period, to $891 million. Volume had a $19 million unfavorable impact, which reflects a decline of 7% in shipments of newsprint and 2% in both market pulp and specialty papers, partially offset by higher shipments in wood products of 6%. Including the effect of currency of $2 million, overall pricing fell by $40 million, reflecting a drop of 8% in the average transaction price for market pulp, and 5% for both newsprint and specialty papers, only partially offset by a 2% increase in the average transaction price for wood products.

29

Cost of sales, excluding depreciation, amortization and distribution costs

Cost of sales, excluding depreciation, amortization and distribution costs, which we refer to as “COS”, were $24 million lower in the quarter. After removing the effects of the weaker Canadian dollar of $25 million, given that approximately 60% of our production capacity is based in Canada, and the lower overall volume, offset in part by the COS related to the newly acquired Atlas Paper, manufacturing costs improved by $10 million, reflecting:

• lower defined benefit pension and OPEB plans costs ($8 million), mostly due to lower amortization of actuarial losses, as a result of the lower balance sheet net pension and OPEB liability as of December 31, 2015;

• lower fiber costs ($7 million), mainly due to favorable usage in wood products;

• higher contribution from our cogeneration assets that sell power externally and our hydroelectric facilities ($5 million);

• better power costs ($4 million), including a benefit from the reduced power rates on Quebec’s north shore to compensate for the higher cost related to processing spruce budworm infested wood;

• lower recycled paper costs ($4 million); and

• lower steam costs ($3 million), mainly due to lower natural gas prices;

partially offset by:

• higher maintenance costs ($8 million);

• write-downs of mill stores and other supplies, primarily as a result of the permanent closure of a newsprint machine at our Augusta, Georgia, mill ($5 million); and

• higher labor costs ($4 million).

Distribution costs

After removing the effects of lower volume and the weaker Canadian dollar, distribution costs were $5 million lower than in the year-ago period, mostly due to lower fuel surcharges.

Depreciation and amortization

Depreciation and amortization was $6 million lower in the quarter, largely reflecting the reduced carrying value of our Catawba, South Carolina, paper assets after the $176 million impairment charge taken in the fourth quarter of 2015 and the net increase of the useful lives of certain of our machinery and equipment.

Closure costs, impairment and other related charges

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

Net loss variance analysis

Income taxes

We recorded an income tax provision of $13 million in the quarter, on a loss before income taxes of $27 million, compared to an expected income tax benefit of $9 million based on the U.S. federal statutory income tax rate of 35%. The difference reflects a $27 million valuation allowance related to our U.S. operations where we recognize a full valuation allowance against our net deferred income tax assets, offset in part by state and foreign tax rate differences.

In the second quarter of 2015, we recorded an income tax provision of $10 million, on income before income taxes of $6 million, compared to an expected income tax provision of $2 million based on the U.S. federal statutory income tax rate of 35%. The difference reflects mainly an $8 million valuation allowance primarily related to our U.S. operations where we recognize a full valuation allowance against our net deferred income tax assets.

30

Six months ended June 30, 2016 vs. June 30, 2015

Operating (loss) income variance analysis

Sales

Notwithstanding Atlas Paper sales of $47 million, sales were $78 million, or 4%, lower than in the year-ago period, to $1,768 million. Sales volume decreased by $4 million because of lower shipments in newsprint, down 5%, largely offset by higher shipments in market pulp and wood products, both up by 3%. Pricing had an unfavorable impact of $121 million, including the effect of currency of $6 million, reflecting a 9% drop in the average transaction price for market pulp, 7% for newsprint, 6% for wood products and 5% for specialty papers.

Cost of sales, excluding depreciation, amortization and distribution costs

COS were $65 million lower in the period. After removing the effects of the weaker Canadian dollar of $66 million and the lower volume, offset in part by the COS related to the newly acquired Atlas Paper, manufacturing costs improved by $37 million, reflecting:

• lower defined benefit pension and OPEB plans costs ($17 million), mostly due to lower amortization of actuarial losses, as a result of the lower balance sheet net pension and OPEB liability as of December 31, 2015;

• lower steam costs ($13 million), mainly due to lower natural gas prices;

• better power costs ($10 million), mostly price-related, including a benefit from the reduced power rates on Quebec’s north shore to compensate for the higher cost related to processing spruce budworm infested wood;

• lower recycled paper costs ($8 million);

• higher contribution from our cogeneration assets that sell power externally and our hydroelectric facilities ($8 million); and

• lower fiber costs ($7 million), mainly due to a reduction of delivered wood prices;

partially offset by:

• higher maintenance costs ($11 million);

• higher labor costs ($5 million); and

• write-downs of mill stores and other supplies, primarily as a result of the permanent closure of a newsprint machine at our Augusta mill ($5 million).

31

Distribution costs

After removing the effect of the weaker Canadian dollar, distribution costs were $5 million lower than in the year-ago period. The favorable effect of lower fuel surcharges was partially offset by the impact of an increase in average length of haul and higher freight rates.

Depreciation and amortization

Depreciation and amortization was $11 million lower in the period, largely reflecting the reduced carrying value of our Catawba paper assets after the $176 million impairment charge taken in the fourth quarter of 2015, and the net increase of the useful lives of certain of our machinery and equipment, partially offset by the depreciation and amortization related to the newly acquired Atlas Paper.

Closure costs, impairment and other related charges

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

Net loss variance analysis

Other income, net

We recorded other income, net, of $13 million in 2016, compared to $6 million in the year-ago period. This mostly reflects, in the current period, a $5 million gain on the disposition of our 50% interest in Produits Forestiers Petit‑Paris Inc. and a non-cash foreign exchange gain of $3 million on the translation of Canadian dollar net monetary balances, compared mainly to a non-cash foreign exchange gain of $3 million in the year-ago period.

Income taxes

We recorded an income tax provision of $23 million in the period, on a loss before income taxes of $24 million, compared to an expected income tax benefit of $8 million based on the U.S. federal statutory income tax rate of 35%. The difference reflects mostly a $45 million valuation allowance related to our U.S. operations where we recognize a full valuation allowance against our net deferred income tax assets, offset in part by state and foreign tax rate differences.

In 2015, we recorded an income tax provision of $20 million, on a loss before income taxes of $16 million, compared to an expected income tax benefit of $6 million based on the U.S. federal statutory income tax rate of 35%. The difference reflects mainly a $27 million valuation allowance primarily related to our U.S. operations where we recognize a full valuation allowance against our net deferred income tax assets.

Segment Earnings

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

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

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

32

MARKET PULP

Highlights

	Three Months Ended   June 30,				Six Months Ended   June 30,
(Unaudited, in millions, except where otherwise stated)	2016		2015		2016		2015
Sales	$	210	$	231	$	421	$	449
Operating income (1)		12		26		32		37
EBITDA (2)		23		38		50		63
(In thousands of metric tons)
Shipments		345		351		697		679
Downtime		25		39		37		65

	June 30,
(Unaudited, in thousands of metric tons)	2016		2015
Finished goods inventory		83		88

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

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

	Three Months Ended   June 30,				Six Months Ended   June 30,
(Unaudited, in millions)	2016		2015		2016		2015
Net income including noncontrolling interests	$	12	$	26	$	32	$	37
Depreciation and amortization		11		12		18		26
EBITDA		23		38		50		63

Industry trends

33

World demand for chemical pulp grew by 4% through June, including an increase of 12% in China, and reductions of 1% in both North America and Western Europe. World capacity grew by 3% in that time, mostly reflecting the significant expansion of Latin American hardwood capacity.

World demand for softwood was up by 3% through June. This reflects a 9% increase in shipments to China and a 2% increase in North America, while shipments to Western Europe were flat. In the same period, demand for hardwood was up by 4%, with shipments to China up by 15%, while North America and Western Europe were down by 6% and 1%, respectively.

Three months ended June 30, 2016 vs. June 30, 2015

Operating income variance analysis

Sales

Sales were $21 million lower, or 9%, to $210 million in the quarter. The average transaction price dropped by $51 per metric ton due to softer market conditions in North America, with lower market prices across all grades. Shipments were 6,000 metric tons lower, mainly for recycled bleached kraft (or “RBK”).

We recorded 14,000 metric tons less downtime in the second quarter of 2016 compared to the year-ago period, as a result of the timing of the maintenance outage at the Thunder Bay, Ontario, mill in 2015.

Cost of sales, excluding depreciation, amortization and distribution costs

COS improved by $3 million in the period. Manufacturing costs increased by $1 million after adjusting for the effects of lower volume and the weaker Canadian dollar, reflecting:

• higher maintenance costs ($5 million);

offset in part by:

• lower recycled paper costs ($3 million); and

• lower steam costs ($2 million), mainly due to lower natural gas prices.

34

Six months ended June 30, 2016 vs. June 30, 2015

Operating income variance analysis

Sales

Sales were $28 million lower, or 6%, to $421 million in the first half of the year. The average transaction price dropped by $58 per metric ton as a result of lower market prices across all grades, but mostly for softwood grades. Shipments, however, were 18,000 metric tons higher due to improved productivity.

We recorded 37,000 metric tons of downtime in the first half of 2016, compared to 65,000 metric tons in the year-ago period. The 2015 period included a maintenance outage at Thunder Bay and more downtime as a result of a production slowback at our RBK mills.

Cost of sales, excluding depreciation, amortization and distribution costs

COS improved by $12 million in the period. Manufacturing costs improved by $9 million after adjusting for the favorable effect of the weaker Canadian dollar offset in part by the effect of higher volume, reflecting:

• lower recycled paper costs ($7 million);

• lower steam costs ($5 million), mainly due to lower natural gas prices; and

• lower wood and wood chip prices ($4 million);

offset in part by higher maintenance costs ($7 million).

Depreciation and amortization

The lower depreciation and amortization is due to the increase of the useful lives of certain of our machinery and equipment.

35

TISSUE

Highlights

	Three Months Ended   June 30,					Six Months Ended   June 30,
(Unaudited, in millions, except where otherwise stated)	2016			2015		2016			2015
Sales	$	24		$	—	$	47		$	—
Operating loss (1)		(4	)		—		(6	)		—
EBITDA (2)		(2	)		—		(2	)		—
(In thousands of short tons)
Shipments		16			—		31			—
Downtime		—			—		—			—

	June 30,
(Unaudited, in thousands of short tons)	2016		2015
Finished goods inventory		3		—

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

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

	Three Months Ended   June 30,					Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015		2016			2015
Net loss including noncontrolling interests	$	(4	)	$	—	$	(6	)	$	—
Depreciation and amortization		2			—		4			—
EBITDA		(2	)		—		(2	)		—

On November 16, 2015, we acquired Atlas Paper, a manufacturer of a range of tissue products for the away-from-home and private-label at-home markets, including virgin and recycled products, covering economy, value and premium grades and operating two tissue mills and a recycling facility in Florida. We began consolidating the results of operations of Atlas Paper in our Consolidated Financial Statements as of November 16, 2015.

36

Industry trends

In the first six months of the year, total tissue consumption in the U.S. grew by 2.7% against the same period last year. U.S. converted tissue products shipments were up 1.9% in the period compared to the year-ago period, led by away-from home shipments, which grew 2.6%, while at-home shipments increased by 1.6%. U.S. parent roll production in the period showed only a marginal growth of 1.3% from the previous year. Tissue capacity increased by 2.5%, contributing to a 94% average industry operating rate, 1.2% lower than the year-ago period.

Three months ended June 30, 2016

Operating loss analysis

During the second quarter of 2016, the tissue segment incurred an operating loss of $4 million. The average transaction price was $1,560 per short ton; sales were $24 million on shipments of 16,000 short tons (15,000 metric tons). COS were $21 million, including $2 million of integration-related costs and inventory adjustments.

Six months ended June 30, 2016

Operating loss analysis

During the first half of 2016, the tissue segment incurred an operating loss of $6 million. The average transaction price was $1,525 per short ton; sales were $47 million on shipments of 31,000 short tons (28,000 metric tons). COS were $41 million, including $3 million of integration-related costs and inventory adjustments. We completed the integration of the virgin pulp supply with our U.S. pulp network in the first quarter of 2016.

The operating results of Atlas Paper were lower than expected. Shipments fell short of set objectives, particularly in retail sales, and sales of parent rolls were lower, in part due to higher internal use in converted products. Lower productivity on tissue machines and converting lines unfavorably impacted COS, due to reliability and operational issues, as well as high employee turnover. COS were also higher due to one-off roof repairs and integration costs, repairs and maintenance, including reliability-related maintenance costs to bring Atlas Paper’s facilities to our safety standards, higher material handling and labor costs, and unfavorable SG&A.

37

WOOD PRODUCTS

Highlights

	Three Months Ended   June 30,					Six Months Ended   June 30,
(Unaudited, in millions, except where otherwise stated)	2016		2015			2016		2015
Sales	$	145	$	134		$	264	$	273
Operating income (loss) (1)		20		(4	)		16		1
EBITDA (2)		29		5			32		18
(In millions of board feet)
Shipments (3)		445		418			835		811
Downtime		69		73			144		77

	June 30,
(Unaudited, in millions of board feet)	2016		2015
Finished goods inventory (3)		129		117

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

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

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

	Three Months Ended   June 30,					Six Months Ended   June 30,
(Unaudited, in millions)	2016		2015			2016		2015
Net income (loss) including noncontrolling interests	$	20	$	(4	)	$	16	$	1
Depreciation and amortization		9		9			16		17
EBITDA		29		5			32		18

Industry trends

Average U.S. housing starts were 1.2 million on a seasonally-adjusted basis in the first half of 2016, up by 8% from the same period last year.

38

Three months ended June 30, 2016 vs. June 30, 2015

Operating income (loss) variance analysis

Sales

Sales were $11 million higher, or 8%, to $145 million in the second quarter of the year, reflecting a $5 per thousand board feet increase in average transaction price, or 2%, due to the continuing recovery in demand in lumber markets. Shipments were higher by 27 million board feet, reflecting sales from our new sawmills in Northern Ontario and improved productivity for certain sawmills in Quebec, partly offset by downtime taken at eight-foot stud sawmills as a result of unfavorable pricing.

Cost of sales, excluding depreciation, amortization and distribution costs

After adjusting for the effects of the weaker Canadian dollar and higher volume, manufacturing costs improved by $3 million, reflecting lower fiber costs ($5 million), mostly due to favorable usage, offset in part by lower internal wood chip selling prices ($2 million).

39

Six months ended June 30, 2016 vs. June 30, 2015

Operating income variance analysis

Sales

Sales were $9 million lower, or 3%, to $264 million in the first half of the year, reflecting a $20 per thousand board feet drop in average transaction price, or 6%, due to the erosion in market prices since the second quarter of 2015 into the first quarter of 2016. Shipments were higher by 24 million board feet, reflecting sales from our new sawmills in Northern Ontario and improved productivity for certain sawmills in Quebec, largely offset by additional downtime of 67 million board feet compared to the year-ago period, mostly as a result of market conditions, in particular unfavorable pricing of eight-foot stud grades.

Cost of sales, excluding depreciation, amortization and distribution costs

After adjusting for the favorable effect of the weaker Canadian dollar offset in part by the effect of higher volume, manufacturing costs increased by $4 million, reflecting:

• lower internal wood chip selling prices ($4 million); and

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

offset in part by favorable fiber usage ($4 million).

40

NEWSPRINT

Highlights

	Three Months Ended   June 30,					Six Months Ended   June 30,
(Unaudited, in millions, except where otherwise stated)	2016			2015		2016			2015
Sales	$	257		$	289	$	514		$	580
Operating (loss) income (1)		(3	)		3		(8	)		—
EBITDA (2)		16			19		31			32
(In thousands of metric tons)
Shipments		510			548		1,029			1,082
Downtime		22			13		35			34

	June 30,
(Unaudited, in thousands of metric tons)	2016		2015
Finished goods inventory		96		97

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

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

	Three Months Ended   June 30,					Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015		2016			2015
Net (loss) income including noncontrolling interests	$	(3	)	$	3	$	(8	)	$	—
Depreciation and amortization		19			16		39			32
EBITDA		16			19		31			32

Industry trends

North American demand for newsprint fell by 6% through June compared to the same period last year, while global demand was down by 5%. In response to rising prices in North America, overseas shipments declined by 73,000 metric tons compared to the same period last year. Despite continued declines in demand, the North American operating rate remains in excess of 92% so far in 2016.

41

Three months ended June 30, 2016 vs. June 30, 2015

Operating (loss) income variance analysis

Sales

Newsprint sales dropped by $32 million, or 11%, to $257 million in the quarter, reflecting a $24 per metric ton drop in average transaction price, mainly for the export market and a 38,000 metric ton decrease in shipments. During the quarter a newsprint machine at our Augusta mill was permanently closed, which resulted in the reduction of approximately 190,000 metric tons of annual production capacity. This decision was motivated by the ongoing structural challenges in the newsprint market and was necessary to avoid costly rotating downtime.

Compared to the second quarter of 2015, our domestic and international shipments both fell by 7%. Accordingly, our domestic shipments represented 60% of total newsprint shipments in the period.

Cost of sales, excluding depreciation, amortization and distribution costs

COS were $21 million lower in the period, reflecting the effect of lower volume, the weaker Canadian dollar and a $5 million improvement in manufacturing costs, due to:

• lower power costs ($4 million), including a benefit from the reduced power rates on Quebec’s north shore to compensate for the higher cost related to processing spruce budworm infested wood;

• lower wood chip prices ($2 million); and

• higher contribution from our cogeneration assets in Thunder Bay that sell power externally ($2 million);

offset in part by higher maintenance costs ($3 million).

42

Six months ended June 30, 2016 vs. June 30, 2015

Operating loss variance analysis

Sales

Newsprint sales dropped by $66 million, or 11%, to $514 million in the first half of the year, reflecting both a $36 per metric ton drop in average transaction price, including the unfavorable effect of the weaker Canadian dollar on sales denominated in that currency, and a 53,000 metric ton decrease in shipments. The drop in average transaction price was most notable in the international market, decreasing by $57 per metric ton.

Compared to the first half of 2015, our domestic and international shipments both fell by 5%. Accordingly, our domestic shipments represented 60% of total newsprint shipments in the period.

Cost of sales, excluding depreciation, amortization and distribution costs

COS were $54 million lower in the period, reflecting the effect of lower volume, the weaker Canadian dollar and a $21 million improvement in manufacturing costs, due to:

• lower power costs ($11 million), including a benefit from the reduced power rates on Quebec’s north shore to compensate for the higher cost related to processing spruce budworm infested wood;

• lower steam costs ($5 million), mainly due to lower natural gas prices;

• higher contribution from our cogeneration assets in Thunder Bay that sell power externally ($4 million); and

• lower wood chip prices ($3 million);

offset in part by higher maintenance costs ($3 million).

43

Distribution costs

After removing the effects of the lower volume and the weaker Canadian dollar, distributions costs were $2 million lower primarily due to lower fuel surcharges, offset in part by higher freight rates.

Depreciation and amortization

The higher depreciation and amortization is due to the decrease of the useful lives of certain of our machinery and equipment, offset in part by the permanent closure of a newsprint machine at our Augusta mill.

44

SPECIALTY PAPERS

Highlights

	Three Months Ended   June 30,				Six Months Ended   June 30,
(Unaudited, in millions, except where otherwise stated)	2016		2015		2016		2015
Sales	$	255	$	272	$	522	$	544
Operating income (1)		16		17		23		22
EBITDA (2)		26		36		46		58
(In thousands of short tons)
Shipments		382		388		775		770
Downtime		4		15		6		25

	June 30,
(Unaudited, in thousands of short tons)	2016		2015
Finished goods inventory		88		114

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

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

	Three Months Ended   June 30,				Six Months Ended   June 30,
(Unaudited, in millions)	2016		2015		2016		2015
Net income including noncontrolling interests	$	16	$	17	$	23	$	22
Depreciation and amortization		10		19		23		36
EBITDA		26		36		46		58

Industry trends

Demand for uncoated mechanical papers in the first six months of the year was down by 4% in North America. Supercalendered, or “SC”, papers were down by 8%, while demand for standard paper grades was flat. Industry production in the period was down by 5%, keeping operating rates at around 89%.

45

North American coated mechanical demand was down by 8% in the first six months of the year. Production was also down significantly, by 162,000 short tons (147,000 metric tons), which represents a reduction of 11%. Consequently, operating rates in North America were 92% for the period.

Three months ended June 30, 2016 vs. June 30, 2015

Operating income variance analysis

Sales

Specialty paper sales decreased by $17 million, or 6%, to $255 million in the quarter, reflecting a $33 per short ton drop in average transaction price, or 5%, mainly for coated mechanical and SC grades, and a 6,000 short ton (5,000 metric tons) reduction in shipments.

Cost of sales, excluding depreciation, amortization and distribution costs

After removing the effects of the weaker Canadian dollar and lower volume, our manufacturing costs were unchanged in the period, mostly due to better internal hydroelectric generation of $3 million offset by unfavorable chemical usage.

46

Depreciation and amortization

The lower depreciation and amortization reflects the reduced carrying value of our Catawba paper assets after the $176 million impairment charge taken in the fourth quarter of 2015.

Six months ended June 30, 2016 vs. June 30, 2015

Operating income variance analysis

Sales

Specialty paper sales decreased by $22 million, or 4%, to $522 million in the first half of the year. The average transaction price dropped by $32 per short ton as a result of lower market prices across all grades, mostly for coated mechanical and SC grades. Shipments, however, increased by 5,000 short tons (5,000 metric tons).

Cost of sales, excluding depreciation, amortization and distribution costs

After removing the effects of the weaker Canadian dollar and higher volume, our manufacturing costs increased by $2 million in the period, reflecting primarily unfavorable chemical usage of $5 million offset in part by better internal hydroelectric generation.

Distribution costs

Distributions costs improved by $3 million due to lower fuel surcharges and the effect of the weaker Canadian dollar, offset in part by higher freight rates.

Depreciation and amortization

The lower depreciation and amortization reflects the reduced carrying value of our Catawba paper assets after the $176 million impairment charge taken in the fourth quarter of 2015.

47

CORPORATE AND OTHER

Highlights

	Three Months Ended   June 30,						Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015			2016			2015
Cost of sales, excluding depreciation, amortization and distribution costs	$	(12	)	$	(15	)	$	(19	)	$	(32	)
Depreciation and amortization		(3	)		(4	)		(6	)		(6	)
Selling, general and administrative expenses		(7	)		(7	)		(15	)		(15	)
Closure costs, impairment and other related charges		(37	)		—			(37	)		(6	)
Net gain on disposition of assets		—			—			2			—
Operating loss	$	(59	)	$	(26	)	$	(75	)	$	(59	)
Interest expense		(9	)		(11	)		(19	)		(23	)
Other income, net		—			1			13			6
Income tax provision		(13	)		(10	)		(23	)		(20	)
Net loss including noncontrolling interests	$	(81	)	$	(46	)	$	(104	)	$	(96	)

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

	Three Months Ended   June 30,						Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015			2016			2015
Net loss including noncontrolling interests	$	(81	)	$	(46	)	$	(104	)	$	(96	)
Interest expense		9			11			19			23
Income tax provision		13			10			23			20
Depreciation and amortization		3			4			6			6
EBITDA	$	(56	)	$	(21	)	$	(56	)	$	(47	)
Foreign exchange translation loss (gain)		3			(1	)		(3	)		(3	)
Closure costs, impairment and other related charges		37			—			37			6
Inventory write-downs related to closures		5			—			5			1
Start-up costs		1			1			4			2
Net gain on disposition of assets		—			—			(2	)		—
Non-operating pension and OPEB costs		6			12			12			26
Other income, net		(3	)		—			(10	)		(3	)
Adjusted EBITDA	$	(7	)	$	(9	)	$	(13	)	$	(18	)

Three months ended June 30, 2016 vs. June 30, 2015

Cost of sales, excluding depreciation, amortization and distribution costs

We incurred COS of $12 million in the quarter, consisting mostly of non-operating pension and OPEB costs of $6 million, and write-downs of mill stores and other supplies ($5 million), primarily related to the permanent closure of a newsprint machine at our Augusta mill.

This compares to COS of $15 million in the year-ago period, which included non-operating pension and OPEB costs ($12 million) and asset preservation costs ($2 million).

48

Closure costs, impairment and other related charges

We recorded closure costs, impairment and other related charges of $37 million in the quarter, primarily for accelerated depreciation in connection with the permanent closure of a newsprint machine at our Augusta mill. No such costs were recorded in the year-ago period.

Six months ended June 30, 2016 vs. June 30, 2015

Cost of sales, excluding depreciation, amortization and distribution costs

We incurred COS of $19 million in the first half of the year, including non-operating pension and OPEB costs of $11 million, write-downs of mill stores and other supplies ($5 million), mostly as a result of the permanent closure of a newsprint machine at our Augusta mill, and start-up costs of $3 million for the continuous pulp digester project and tissue manufacturing and converting facility, both in Calhoun.

This compares to COS of $32 million in the year-ago period, which included non-operating pension and OPEB costs ($26 million), asset preservation costs for the permanently closed Fort Frances, Ontario, Laurentide, Quebec, and Iroquois Falls, Ontario, mills ($5 million) and start-up costs with our Atikokan, Ontario, sawmill ($2 million).

Closure costs, impairment and other related charges

In 2016, we recorded closure costs, impairment and other related charges of $37 million, primarily for accelerated depreciation associated to the permanent closure of a newsprint machine at our Augusta mill. In the same period last year, we recorded closure costs, impairment and other related charges of $6 million, primarily for idling and cleaning costs at our permanently closed Iroquois Falls mill ($5 million).

LIQUIDITYAND CAPITAL RESOURCES

Capital Resources

We rely on cash and cash equivalents, net cash provided by operations and our asset-based revolving credit facility (or “ABL credit facility”) to fund our operations, make pension contributions, and finance our working capital and capital expenditures. In addition, from time to time we may use available cash to reduce debt. As of June 30, 2016, we had cash and cash equivalents of $40 million and availability of $412 million under our ABL credit facility.

Given the timing of previously disclosed annual pension contributions payable on July 31, 2016: the 2016 supplemental contribution and the 2016 additional solvency deficit reduction contribution, totaling $29 million, we borrowed an additional $60 million under the ABL credit facility in July 2016 to sustain our planned capital expenditures for our tissue manufacturing and converting facility project in Calhoun. We still do not expect to borrow more than $150 million in the aggregate in 2016.

In our view, we have sufficient financial resources available to finance our business plan, meet working capital requirements and maintain an appropriate level of capital spending.

49

Flow of Funds

Summary of cash flows

	Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015
Net cash provided by operating activities	$	69		$	90
Net cash used in investing activities		(107	)		(83	)
Net cash provided by (used in) financing activities		19			(40	)
Effect of exchange rate changes on cash and cash equivalents		1			(1	)
Net decrease in cash and cash equivalents	$	(18	)	$	(34	)

Six months ended June 30, 2016 vs. June 30, 2015

Net cash provided by operating activities

We generated $69 million of cash from operating activities in the first half of 2016, compared to $90 million in the year-ago period. The decrease is attributable to a reduction in profitability, and an increase in the first half of 2016 of raw material inventory at some of our sawmills, compared to a decrease in the year-ago period.

Net cash used in investing activities

Cash used in investing activities, up $24 million against the year-ago period, consisted mostly of cash invested in fixed assets, which reflects investments in strategic projects such as: the tissue manufacturing and converting facility in Calhoun; and the implementation of our integrated business management software. The current period also included countervailing duty cash deposits of $12 million, offset by a consideration of $5 million received from the disposition of our 50% interest in Produits Forestiers Petit-Paris Inc.

Net cash provided by (used in) financing activities

We borrowed $20 million under our ABL credit facility in the first half of 2016, to sustain the capital expenditures for our continued transformation strategy. In the same period of 2015, we used $40 million in financing activities, almost all of which related to share repurchases.

Countervailing duty cash deposit requirements

Since October 20, 2015, we have been required to make cash deposits at a subsidy rate of 17.87% for estimated and projected countervailing duties on SC papers we import to the U.S. from our Canadian mills. Based on our current operating parameters, the cash deposits could be as high as $25 million per year. As of June 30, 2016, we have made $16 million of cash deposits. For additional information, see Item 1A, “Risk Factors – We are subject to countervailing duty trade remedies on exports of our SC paper to the U.S., which could adversely affect our operations and cash flows,” of the 2015 Annual Report.

50

RESOLUTE FOREST PRODUCTS INC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information relating to quantitative and qualitative disclosures about market risk is disclosed in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our 2015 Annual Report. There have been no material changes in our exposure to market risk as previously disclosed in our 2015 Annual Report.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures:

We have evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a–15(e) and 15d–15(e) of the Securities Exchange Act of 1934, as of June 30, 2016. Based on that evaluation, the President and Chief Executive Officer and the Senior Vice President and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date in recording, processing, summarizing and timely reporting information required to be disclosed in our reports to the SEC.

(b) Changes in Internal Control over Financial Reporting:

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

51

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information on our legal proceedings is presented under Part I, Item 3, “Legal Proceedings,” in our 2015 Annual Report. Except as otherwise provided hereafter, there have been no material changes to the legal proceedings described in the 2015 Annual Report.

Effective January 1, 2015, we modified our U.S. OPEB plan so that unionized participants, upon reaching Medicare eligibility, are provided Medicare coverage via a Medicare Exchange program rather than via a Company-sponsored medical plan. On March 2, 2016, a proposed class action lawsuit (Reynolds, et al v. Resolute Forest Products Inc., Resolute FP US Inc., Resolute FP US Health and Resolute Welfare Benefit Plan) was filed in the United States District Court for the Eastern District of Tennessee on behalf of certain Medicare-eligible retirees who were previously unionized employees of our Calhoun, Tennessee; Catawba, South Carolina; and Coosa Pines, Alabama mills, and their spouses and dependents. The plaintiffs allege that the modifications described above breach the collective bargaining agreements and plan covering the members of the proposed class in the lawsuit. Plaintiffs seek reinstatement of the health care benefits as in effect before January 1, 2015, for the proposed class in the lawsuit. The Company disputes the allegations in the complaint and intends to defend the action. On May 23, 2016, the Company filed a motion to dismiss the complaint. The proposed class action lawsuit is at a preliminary stage and no class has been certified nor has a date been set to hear our motion to dismiss. Accordingly, we are not presently able to determine the ultimate resolution of this matter or to reasonably estimate the potential impact on our Consolidated Financial Statements.

On June 23, 2016, Environment Canada charged our subsidiary, Fibrek s.e.n.c., with alleged violations of Sections 36(3) and 38(4) of the Fisheries Act (Canada), which prohibit the deposit or discharge of deleterious substances in water frequented by fish, and require reporting of an irregular discharge, or a serious and imminent risk of an irregular discharge, which results, or could reasonably be expected to result, in detriment to fish, fish habitat, or human use of fish. The charges are based on discharges of effluent in the Mistassini and Ashuapmushan rivers alleged to have occurred at our Saint-Félicien, Quebec pulp mill between January 2012 and October 2013, before and shortly after we acquired control of Fibrek s.e.n.c. on May 2, 2012. Environment Canada has not yet disclosed to us the specific events alleged to have violated Sections 36(3) and 38(4) of the Fisheries Act (Canada), nor the amount of any fine or other remedy that may be sought. The proceeding will be heard by the Court of Quebec (Cour du Québec). Although we are not presently able to determine the ultimate resolution of this proceeding, we believe it will not have a material impact on the Company.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this Form 10-Q, you should carefully consider the risk factors set forth under Part I, Item 1A, “Risk Factors” in our 2015 Annual Report, which could materially affect our business, financial condition or future results. The risks described in this report and in our 2015 Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially affect our business, financial condition or future results. There have been no material changes to the risk factors previously disclosed in our 2015 Annual Report.

52

RESOLUTE FOREST PRODUCTS INC.

ITEM 6. EXHIBITS

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

*

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 Statements of Comprehensive (Loss) Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Changes in Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Unaudited Interim Consolidated Financial Statements.

53

RESOLUTE FOREST PRODUCTS INC.

SIGNATURES

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

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

Date: August 9, 2016

54

RESOLUTE FOREST PRODUCTS INC.

EXHIBIT INDEX

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 Statements of Comprehensive (Loss) Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Changes in Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Unaudited Interim Consolidated Financial Statements.

55

EX-31.1

EXHIBIT 31.1

Certification

I, Richard Garneau, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended June 30, 2016 of RESOLUTE FOREST PRODUCTS INC.;

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

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

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

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

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

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

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

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

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

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

Date: August 9, 2016

/s/ Richard Garneau

Richard Garneau

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification

I, Jo-Ann Longworth, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended June 30, 2016 of RESOLUTE FOREST PRODUCTS INC.;

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

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

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

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

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

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

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

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

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

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

Date: August 9, 2016

/s/ Jo-Ann Longworth

Jo-Ann Longworth

Senior Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certification

Pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of RESOLUTE FOREST PRODUCTS INC. (the “Company”), hereby certifies, to such officer’s knowledge, that the Company’s quarterly report on Form 10‑Q for the quarter ended June 30, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2016	/s/ Richard Garneau
	Name: Richard Garneau
	Title: President and Chief Executive Officer

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

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

EX-32.2

EXHIBIT 32.2

Certification

Pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of RESOLUTE FOREST PRODUCTS INC. (the “Company”), hereby certifies, to such officer’s knowledge, that the Company’s quarterly report on Form 10‑Q for the quarter ended June 30, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2016	/s/ Jo-Ann Longworth
	Name: Jo-Ann Longworth
	Title: Senior Vice President and Chief Financial Officer

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

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

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 29, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Entity Registrant Name	RESOLUTE FOREST PRODUCTS INC.
Entity Central Index Key	0001393066
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Trading Symbol	RFP
Entity Common Stock, Shares Outstanding		89,507,379

XML

Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Sales		$ 891	$ 926	$ 1,768	$ 1,846
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		668	692	1,345	1,410
Depreciation and amortization	[1]	54	60	106	117
Distribution costs		110	118	222	231
Selling, general and administrative expenses		40	40	78	81
Closure costs, impairment and other related charges		37	0	37	6
Net gain on disposition of assets		0	0	(2)	0
Operating income (loss)		(18)	16	(18)	1
Interest expense		(9)	(11)	(19)	(23)
Other income, net		0	1	13	6
Income (loss) before income taxes		(27)	6	(24)	(16)
Income tax provision		(13)	(10)	(23)	(20)
Net income (loss) including noncontrolling interests		(40)	(4)	(47)	(36)
Net income attributable to noncontrolling interests		(2)	0	(3)	(1)
Net income (loss) attributable to Resolute Forest Products Inc.		$ (42)	$ (4)	$ (50)	$ (37)
Net loss per share attributable to Resolute Forest Products Inc. common shareholders:
Basic (in dollars per share)		$ (0.47)	$ (0.04)	$ (0.56)	$ (0.39)
Diluted (in dollars per share)		$ (0.47)	$ (0.04)	$ (0.56)	$ (0.39)
Weighted-average number of Resolute Forest Products Inc. common shares outstanding:
Basic		89.8	94.1	89.8	94.5
Diluted		89.8	94.1	89.8	94.5

[1] As discussed in Note 1, “Organization and Basis of Presentation,” we changed our estimate of the useful lives of certain of our machinery and equipment to reflect a net increase of estimated periods during which these assets will remain in service. The effect of this change in estimate was to (decrease) increase “Depreciation and amortization” by reportable segment for the three and six months ended June 30, 2016 as follows:(Unaudited, in millions)Market PulpTissueWood ProductsNewsprintSpecialtyPapersTotalSecond quarter 2016$(4) $— $(3) $6 $(2) $(3) First six months 2016 (10) — (6) 12 (2) (6)

XML

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Net loss including noncontrolling interests	$ (40)	$ (4)	$ (47)	$ (36)
Unamortized prior service credits
Change in unamortized prior service credits	(4)	(3)	(8)	(8)
Income tax provision	0	0	0	0
Change in unamortized prior service credits, net of tax	(4)	(3)	(8)	(8)
Unamortized actuarial losses
Change in unamortized actuarial losses	12	19	24	40
Income tax provision	(3)	(4)	(6)	(9)
Change in unamortized actuarial losses, net of tax	9	15	18	31
Foreign currency translation	1	(1)	1	(2)
Other comprehensive income (loss), net of tax	6	11	11	21
Comprehensive (loss) income including noncontrolling interests	(34)	7	(36)	(15)
Comprehensive income attributable to noncontrolling interests	(2)	0	(3)	(1)
Comprehensive (loss) income attributable to Resolute Forest Products Inc.	$ (36)	$ 7	$ (39)	$ (16)

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 40	$ 58
Accounts receivable, net:
Trade	376	377
Other	75	92
Inventories, net	547	541
Other current assets	48	43
Total current assets	1,086	1,111
Fixed assets, net	1,801	1,810
Amortizable intangible assets, net	101	105
Goodwill	61	59
Deferred income tax assets	1,025	982
Other assets	171	153
Total assets	4,245	4,220
Current liabilities:
Accounts payable and accrued liabilities	473	436
Current portion of long-term debt	1	1
Total current liabilities	474	437
Long-term debt, net of current portion	610	590
Pension and other postretirement benefit obligations	1,188	1,186
Deferred income tax liabilities	2	2
Other liabilities	56	60
Total liabilities	2,330	2,275
Commitments and contingencies
Resolute Forest Products Inc. shareholders’ equity:
Common stock, $0.001 par value. 117.5 shares issued and 89.5 shares outstanding as of June 30, 2016 and December 31, 2015	0	0
Additional paid-in capital	3,771	3,765
Deficit	(1,176)	(1,126)
Accumulated other comprehensive loss	(576)	(587)
Treasury stock at cost, 28.0 shares as of June 30, 2016 and December 31, 2015	(120)	(120)
Total Resolute Forest Products Inc. shareholders’ equity	1,899	1,932
Noncontrolling interests	16	13
Total equity	1,915	1,945
Total liabilities and equity	$ 4,245	$ 4,220

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Common stock, par value (per share)	$ 0.001	$ 0.001
Common stock, shares issued	117.5	117.5
Common stock, shares outstanding	89.5	89.5
Treasury stock, shares	28.0	28.0

XML

Consolidated Statements of Changes in Equity - USD ($) $ in Millions	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings (Deficit) [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]	Non-controlling Interests [Member]
Beginning balance at Dec. 31, 2014	$ 2,117	$ 0	$ 3,754	$ (869)	$ (718)	$ (61)	$ 11
Increase (Decrease) in Shareholders' Equity [Roll Forward]
Share-based compensation costs for equity-classified awards	8		8
Net income (loss)	(36)			(37)			1
Purchases of treasury stock	(37)					(37)
Other comprehensive income (loss), net of tax	21				21		0
Ending balance at Jun. 30, 2015	2,073	0	3,762	(906)	(697)	(98)	12
Beginning balance at Dec. 31, 2015	1,945	0	3,765	(1,126)	(587)	(120)	13
Increase (Decrease) in Shareholders' Equity [Roll Forward]
Share-based compensation costs for equity-classified awards	6		6
Net income (loss)	(47)			(50)			3
Other comprehensive income (loss), net of tax	11				11		0
Ending balance at Jun. 30, 2016	$ 1,915	$ 0	$ 3,771	$ (1,176)	$ (576)	$ (120)	$ 16

XML

Consolidated Statements of Changes in Equity (Parenthetical) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Stockholders' Equity [Abstract]
Share repurchase program, shares, repurchased	0.0	3.2	0.0	3.2

XML

Consolidated Statements of Cash Flows - USD ($) $ in Millions		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net loss including noncontrolling interests		$ (47)	$ (36)
Adjustments to reconcile net loss including noncontrolling interests to net cash provided by operating activities:
Share-based compensation		6	8
Depreciation and amortization	[1]	106	117
Closure costs, impairment and other related charges		37	0
Inventory write-downs related to closures		5	1
Deferred income taxes		21	23
Net pension contributions and other postretirement benefit payments		(45)	(27)
Net gain on disposition of assets		(2)	0
(Gain) loss on translation of foreign currency denominated deferred income taxes		(69)	89
Loss (gain) on translation of foreign currency denominated pension and other postretirement benefit obligations		57	(84)
Gain on disposition of equity method investment	[2]	(5)	0
Net planned major maintenance payments		(7)	(15)
Changes in working capital:
Accounts receivable		19	53
Inventories		(13)	3
Other current assets		(3)	(6)
Accounts payable and accrued liabilities		10	(41)
Other, net		(1)	5
Net cash provided by operating activities		69	90
Cash flows from investing activities:
Cash invested in fixed assets		(99)	(79)
Disposition of assets		5	0
Increase in countervailing duty cash deposits		(12)	0
Decrease (increase) in deposit requirements for letters of credit, net		(1)	(4)
Net cash provided by (used in) investing activities		(107)	(83)
Cash flows from financing activities:
Borrowings under revolving credit facility		20	0
Payments of debt		(1)	0
Payments of financing and credit facility fees		0	(3)
Purchases of treasury stock		0	(37)
Net cash provided by (used in) financing activities		19	(40)
Effect of exchange rate changes on cash and cash equivalents		1	(1)
Net increase (decrease) in cash and cash equivalents		(18)	(34)
Cash and cash equivalents:
Beginning of period		58	337
End of period		$ 40	$ 303

[1] As discussed in Note 1, “Organization and Basis of Presentation,” we changed our estimate of the useful lives of certain of our machinery and equipment to reflect a net increase of estimated periods during which these assets will remain in service. The effect of this change in estimate was to (decrease) increase “Depreciation and amortization” by reportable segment for the three and six months ended June 30, 2016 as follows:(Unaudited, in millions)Market PulpTissueWood ProductsNewsprintSpecialtyPapersTotalSecond quarter 2016$(4) $— $(3) $6 $(2) $(3) First six months 2016 (10) — (6) 12 (2) (6)

[2] On February 1, 2016, we sold for total consideration of $5 million our interest in Produits Forestiers Petit-Paris Inc., an unconsolidated entity located in Saint-Ludger-de-Milot, Quebec, in which we had a 50% interest, resulting in a gain on disposition of $5 million.

XML

Organization and Basis of Presentation

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Basis of Presentation

Note 1. Organization and Basis of Presentation

Nature of operations

Resolute Forest Products Inc. (with its subsidiaries and affiliates, either individually or collectively, unless otherwise indicated, referred to as “Resolute Forest Products,” “we,” “our,” “us,” “Parent” or the “Company”) is incorporated in Delaware. We are a global leader in the forest products industry with a diverse range of products, including market pulp, tissue, wood products, newsprint and specialty papers, which are marketed in close to 80 countries. We own or operate over 40 pulp, paper, tissue and wood products facilities in the United States, Canada and South Korea, as well as power generation assets in Canada and the United States.

Financial statements

Our interim Consolidated Financial Statements are unaudited and have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (the “SEC”) for interim reporting. Under those rules, certain footnotes and other financial information that are normally required by U.S. generally accepted accounting principles may be condensed or omitted. In our opinion, all adjustments (consisting of normal recurring adjustments) necessary for the fair statement of the unaudited interim Consolidated Financial Statements have been made. All amounts are expressed in U.S. dollars, unless otherwise indicated. The results for the interim period ended June 30, 2016, are not necessarily indicative of the results to be expected for the full year. These unaudited interim Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 29, 2016. Certain prior period amounts in our Consolidated Balance Sheets and footnotes have been reclassified to conform to the 2016 presentation. The reclassifications had no effect on total assets.

Change in depreciable lives of machinery and equipment

We periodically review the estimated economic useful lives of our fixed assets. Based on this review, effective January 1, 2016, we changed our estimate of the useful lives of certain of our machinery and equipment to reflect a net increase of estimated periods during which these assets will remain in service. As a result, the estimated useful lives of machinery and equipment were changed to a range of five to 25 years, increasing the weighted-average estimated useful lives of machinery and equipment by two years. The effect of this change in estimate for the three and six months ended June 30, 2016 was to reduce “Depreciation and amortization”, “Net loss attributable to Resolute Forest Products Inc.”, and basic and diluted “Net loss per share attributable to Resolute Forest Products Inc. common shareholders” in our Consolidated Statement of Operations as follows:

(Unaudited, in millions, except per share amounts)	Three Months Ended June 30, 2016		Six Months Ended June 30, 2016
Depreciation and amortization	$	3	$	6
Net loss attributable to Resolute Forest Products Inc.		1		3
Basic net loss per share attributable to Resolute Forest Products Inc.		0.01		0.03
Diluted net loss per share attributable to Resolute Forest Products Inc.		0.01		0.03

New accounting pronouncements

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09 “Improvements to Employee Share-Based Payment Accounting,” which is intended to simplify several aspects of the accounting for share-based payment transactions. This update is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted as of the beginning of an interim or annual period. All amendments to the guidance shall be adopted in the same period on a retrospective or prospective basis as required for each amendment. The adoption of this accounting guidance will not materially impact our results of operations, financial position or cash flows.

In March 2016, April 2016, and May 2016, the FASB issued ASU 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU 2016-10, “Identifying Performance Obligations and Licensing,” and ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,” respectively, which further affect the guidance of ASU 2014-09. These updates are effective for fiscal years beginning after December 15, 2017, with early adoption permitted for fiscal years beginning after December 15, 2016. We are still evaluating the impact of this standard on our results of operations and financial position.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which introduces the current expected credit losses model in the estimation of credit losses on financial instruments. This update is effective retrospectively for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted for fiscal years beginning after December 15, 2018. We are still evaluating the impact of this standard on our results of operations and financial position.

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Acquisition of Atlas Inc. Acquisition of Atlas Inc.

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Acquisition of Atlas Inc.

Note 2. Acquisition of Atlas Paper Holdings, Inc.

On November 16, 2015 (the “acquisition date”), we acquired Atlas Paper Holdings, Inc. and its subsidiaries (“Atlas Paper”), a manufacturer of a range of tissue products for the away-from-home and private-label at-home markets, including virgin and recycled products, covering economy, value and premium grades and operating two tissue mills and a recycling facility in Florida.

In 2016, we recorded adjustments to the purchase price allocation due to a change in our preliminary valuation of assets acquired and liabilities assumed as of the acquisition date, which is still subject to adjustment during the 12-month measurement period following the acquisition date or upon completion of the final valuation. As a result, we increased “Goodwill” by $2 million and decreased “Fixed assets, net” and “Amortizable intangible assets, net,” each by $1 million, in our Consolidated Balance Sheet as of June 30, 2016.

The amount of Atlas Paper’s sales and net loss included in our Consolidated Statement of Operations were $24 million and $4 million, respectively, for the three months ended June 30, 2016 and were $47 million and $6 million, respectively, for the six months ended June 30, 2016.

The following unaudited pro forma information for the three and six months ended June 30, 2015 represents our results of operations as if the acquisition of Atlas Paper had occurred on January 1, 2015. This pro forma information does not purport to be indicative of the results that would have occurred for the periods presented or that may be expected in the future.

(Unaudited, in millions except per share data)	Three Months Ended June 30, 2015			Six Months Ended June 30, 2015
Sales	$	950		$	1,894
Net loss attributable to Resolute Forest Products Inc.		(6	)		(37	)
Basic net loss per share attributable to Resolute Forest Products Inc.		(0.06	)		(0.39	)
Diluted net loss per share attributable to Resolute Forest Products Inc.		(0.06	)		(0.39	)

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Closure Costs, Impairment and Other Related Charges

6 Months Ended

Jun. 30, 2016

Restructuring and Related Activities [Abstract]

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, 2016, were comprised of the following:

(Unaudited, in millions)	Accelerated Depreciation		Severance and Other Costs		Total
Permanent closure
Paper machine in Augusta, Georgia (1)
Second quarter	$	32	$	4	$	36
First six months		32		4		36
Other
Second quarter		1		—		1
First six months		1		—		1
Total
Second quarter	$	33	$	4	$	37
First six months		33		4		37

⁽¹⁾  The final workforce reduction in the third quarter of 2016 did not result in the curtailment of a pension or other postretirement benefit (“OPEB”) plan. As such, no curtailment gain or loss will be recorded in “Closure costs, impairment and other related charges” in our Consolidated Statement of Operations.

Closure costs, impairment and other related charges for the three and six months ended June 30, 2015, were comprised of the following:

(Unaudited, in millions)	Accelerated Depreciation		Severance and Other Costs			Total
Permanent closures
Paper mill in Iroquois Falls, Ontario
Second quarter	$	—	$	1		$	1
First six months		—		5			5
Paper machine in Clermont, Quebec
Second quarter		—		—			—
First six months		2		—			2
Other
Second quarter		—		(1	)		(1	)
First six months		—		(1	)		(1	)
Total
Second quarter	$	—	$	—		$	—
First six months		2		4			6

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Other Income (Expense), Net

6 Months Ended

Jun. 30, 2016

Other Income and Expenses [Abstract]

Other (Expense) Income, Net

Note 4. Other Income, Net

Other income, net for the three and six months ended June 30, 2016 and 2015, was comprised of the following:

	Three Months Ended   June 30,					Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015		2016		2015
Foreign exchange (loss) gain	$	(3	)	$	1	$	3	$	3
Gain on disposition of equity method investment (1)		—			—		5		—
Miscellaneous income		3			—		5		3
	$	—		$	1	$	13	$	6

⁽¹⁾  On February 1, 2016, we sold for total consideration of $5 million our interest in Produits Forestiers Petit-Paris Inc., an unconsolidated entity located in Saint-Ludger-de-Milot, Quebec, in which we had a 50% interest, resulting in a gain on disposition of $5 million.

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Note 5. Accumulated Other Comprehensive Loss

The change in our accumulated other comprehensive loss by component (net of tax) for the six months ended June 30, 2016, was as follows:

(Unaudited, in millions)	Unamortized Prior Service Credits			Unamortized Actuarial Losses			Foreign Currency Translation			Total
Balance as of December 31, 2015	$	84		$	(667	)	$	(4	)	$	(587	)
Other comprehensive income before reclassifications		—			—			1			1
Amounts reclassified from accumulated other comprehensive loss (1)		(8	)		18			—			10
Net current period other comprehensive (loss) income		(8	)		18			1			11
Balance as of June 30, 2016	$	76		$	(649	)	$	(3	)	$	(576	)

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

The reclassifications out of accumulated other comprehensive loss for the six months ended June 30, 2016, were comprised of the following:

(Unaudited, in millions)	Amounts Reclassified From Accumulated Other Comprehensive Loss			Affected Line in the Consolidated Statements of Operations
Unamortized Prior Service Credits
Amortization of prior service credits	$	(8	)	Cost of sales, excluding depreciation, amortization and distribution costs (1)
		—		Income tax provision
	$	(8	)	Net of tax
Unamortized Actuarial Losses
Amortization of actuarial losses	$	24		Cost of sales, excluding depreciation, amortization and distribution costs (1)
		(6	)	Income tax provision
	$	18		Net of tax
Total Reclassifications	$	10		Net of tax

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

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Net Income (Loss) Per Share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

Note 6. Net Loss Per Share

The weighted-average number of outstanding stock options and nonvested equity-classified restricted stock units, deferred stock units and performance stock units (collectively, “stock unit awards”) for the three and six months ended June 30, 2016 and 2015, was as follows:

	Three Months Ended   June 30,		Six Months Ended   June 30,
(Unaudited, in millions)	2016	2015	2016	2015
Stock options	1.5	1.5	1.5	1.6
Stock unit awards	2.4	1.2	2.4	1.2

These stock options and stock unit awards were excluded from the calculation of diluted net loss per share as the impact would have been antidilutive for all periods presented.

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Inventories, Net

6 Months Ended

Jun. 30, 2016

Inventory Disclosure [Abstract]

Inventories, Net

Note 7. Inventories, Net

Inventories, net as of June 30, 2016 and December 31, 2015, were comprised of the following:

(Unaudited, in millions)	June 30, 2016		December 31, 2015
Raw materials and work in process	$	155	$	152
Finished goods		178		179
Mill stores and other supplies		214		210
	$	547	$	541

During the three and six months ended June 30, 2016, we recorded charges of $5 million for write-downs of mill stores and other supplies primarily as a result of the permanent closure of a newsprint machine at our Augusta mill. These charges were included in “Cost of sales, excluding depreciation, amortization and distribution costs” in our Consolidated Statements of Operations.

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Long-Term Debt

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Long-Term Debt

Note 8. Long-Term Debt

Overview

Long-term debt, including current portion, as of June 30, 2016 and December 31, 2015, was comprised of the following:

(Unaudited, in millions)	June 30, 2016			December 31, 2015
5.875% senior notes due 2023:
Principal amount	$	600		$	600
Deferred financing costs		(6	)		(7	)
Unamortized discount		(4	)		(4	)
Total senior notes due 2023		590			589
Borrowings under revolving credit facility		20			—
Capital lease obligation		1			2
Total debt		611			591
Less: Current portion of long-term debt		(1	)		(1	)
Long-term debt, net of current portion	$	610		$	590

2023 Notes

We issued $600 million in aggregate principal amount of 5.875% senior notes due 2023 (the “2023 Notes”) on May 8, 2013. Upon their issuance, the notes were recorded at their fair value of $594 million, which reflected a discount of $6 million that is being amortized to “Interest expense” in our Consolidated Statements of Operations using the interest method over the term of the notes, resulting in an effective interest rate of 6%. Interest on the notes is payable semi-annually on May 15 and November 15, until their maturity date of May 15, 2023. In connection with the issuance of the notes, we incurred financing costs of approximately $9 million, which were deferred and recorded as a reduction of the notes. These deferred financing costs are being amortized to “Interest expense” in our Consolidated Statements of Operations using the interest method over the term of the notes. The fair value of the 2023 Notes was $473 million and $440 million as of June 30, 2016 and December 31, 2015, respectively, and was determined by reference to over-the-counter prices (Level 1).

ABL Credit Facility

Our senior secured asset-based revolving credit facility (the “ABL Credit Facility”) has a maturity date of May 22, 2020 and provides an aggregate lender commitment of up to $600 million at any time outstanding, subject to borrowing base availability based on specified advance rates, eligibility criteria and customary reserves. As of June 30, 2016, we had $412 million of availability under the ABL Credit Facility, net of $20 million of borrowings and $32 million of ordinary course letters of credit outstanding. We borrowed an additional $60 million under the ABL Credit Facility in July 2016.

Capital lease obligation

We have a capital lease obligation for a warehouse with a maturity date of December 1, 2017, which can be renewed for 20 years at our option. Minimum monthly payments are determined by an escalatory price clause.

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Employee Benefit Plans

6 Months Ended

Jun. 30, 2016

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

Note 9. Employee Benefit Plans

Pension and OPEB plans

The components of net periodic benefit cost relating to our pension and OPEB plans for the three and six months ended June 30, 2016 and 2015, were as follows:

Pension Plans:

	Three Months Ended   June 30,						Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015			2016			2015
Service cost	$	5		$	6		$	10		$	12
Interest cost		55			58			107			116
Expected return on plan assets		(63	)		(67	)		(123	)		(134	)
Amortization of actuarial losses		14			20			27			42
Amortization of prior service credits		(1	)		—			(1	)		(1	)
	$	10		$	17		$	20		$	35

OPEB Plans:

	Three Months Ended   June 30,						Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015			2016			2015
Interest cost	$	2		$	2		$	4		$	4
Amortization of actuarial gains		(2	)		(1	)		(3	)		(2	)
Amortization of prior service credits		(3	)		(3	)		(7	)		(7	)
	$	(3	)	$	(2	)	$	(6	)	$	(5	)

Defined contribution plans

Our expense for the defined contribution plans totaled $5 million and $4 million for the three months ended June 30, 2016 and 2015, respectively, and $10 million for both the six months ended June 30, 2016 and 2015.

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Income Taxes

6 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Note 10. Income Taxes

The income tax provision attributable to (loss) income before income taxes differs from the amounts computed by applying the U.S. federal statutory income tax rate of 35% for the three and six months ended June 30, 2016 and 2015, as a result of the following:

	Three Months Ended   June 30,						Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015			2016			2015
(Loss) income before income taxes	$	(27	)	$	6		$	(24	)	$	(16	)
Income tax provision:
Expected income tax benefit (provision)		9			(2	)		8			6
Changes resulting from:
Valuation allowance (1)		(27	)		(8	)		(45	)		(27	)
Foreign exchange		—			(2	)		3			(7	)
State income taxes and foreign tax rate differences		5			2			11			5
Other, net		—			—			—			3
	$	(13	)	$	(10	)	$	(23	)	$	(20	)

⁽¹⁾  We recorded a valuation allowance of $27 million and $8 million for the three months ended June 30, 2016 and 2015, respectively, and $45 million and $27 million for the six months ended June 30, 2016 and 2015, respectively, primarily related to our U.S. operations where we recognize a full valuation allowance against our net deferred income tax assets.

Deferred tax charge

As a result of a gain on an intercompany asset transfer in connection with an operating company realignment in 2015, a $36 million income tax provision was deferred and recorded in “Other assets” in our Consolidated Balance Sheet as of June 30, 2016. This deferred tax charge is amortized, as the underlying assets are consumed or sold to an unrelated party, in “Income tax provision” in our Consolidated Statements of Operations.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 11. Commitments and Contingencies

Legal matters

We become involved in various legal proceedings and other disputes in the normal course of business, including matters related to contracts, commercial disputes, taxes, environmental issues, activists’ damages, employment and workers’ compensation claims, Aboriginal claims and other matters. Although the final outcome is subject to many variables and cannot be predicted with any degree of certainty, we regularly assess the status of the matters and establish provisions (including legal costs expected to be incurred) when we believe an adverse outcome is probable, and the amount can be reasonably estimated. Except as described below and for claims that cannot be assessed due to their preliminary nature, we believe that the ultimate disposition of these matters outstanding or pending as of June 30, 2016, will not have a material adverse effect on our Consolidated Financial Statements.

Effective January 1, 2015, we modified our U.S. OPEB plan so that unionized participants, upon reaching Medicare eligibility, are provided Medicare coverage via a Medicare Exchange program rather than via a Company-sponsored medical plan. On March 2, 2016, a proposed class action lawsuit (Reynolds, et al v. Resolute Forest Products Inc., Resolute FP US Inc., Resolute FP US Health and Resolute Welfare Benefit Plan) was filed in the United States District Court for the Eastern District of Tennessee on behalf of certain Medicare-eligible retirees who were previously unionized employees of our Calhoun, Tennessee; Catawba, South Carolina; and Coosa Pines, Alabama mills, and their spouses and dependents. The plaintiffs allege that the modifications described above breach the collective bargaining agreements and plan covering the members of the proposed class in the lawsuit. Plaintiffs seek reinstatement of the health care benefits as in effect before January 1, 2015, for the proposed class in the lawsuit. The Company disputes the allegations in the complaint and intends to defend the action. On May 23, 2016, the Company filed a motion to dismiss the complaint. The proposed class action lawsuit is at a preliminary stage and no class has been certified nor has a date been set to hear our motion to dismiss. Accordingly, we are not presently able to determine the ultimate resolution of this matter or to reasonably estimate the potential impact on our Consolidated Financial Statements.

On February 26, 2015, a countervailing duty petition was filed with the U.S. Department of Commerce (“Commerce”) and the U.S. International Trade Commission (“Trade Commission”) by certain U.S. supercalendered (“SC”) paper producers requesting the U.S. government to impose countervailing duties on Canadian-origin SC paper exported to the U.S. market. One of our subsidiaries was identified in the petition as being a Canadian exporting producer of SC paper to the U.S. and was selected as a mandatory respondent to be individually investigated by Commerce. On August 3, 2015, Commerce assigned a preliminary subsidy rate of 2.04% to our SC paper produced at our Canadian mills. On October 15, 2015, Commerce issued a final determination and increased the subsidy rate applicable to our Canadian-produced SC paper to 17.87%. In December 2015, the Trade Commission ruled that exports of SC paper from Canada to the U.S. have caused or threatened to cause material injury to the U.S. SC paper industry and Commerce issued its final order on the basis of the 17.87% rate. As a result, since October 20, 2015, we have been required to make cash deposits at the 17.87% subsidy rate for estimated and projected countervailing duties on SC papers we import to the U.S. from our Canadian mills. We will be required to continue making cash deposits at that rate until Commerce sets a countervailing duty rate in an administrative review, which may not be finalized until December of 2017, or possibly later. Resolute has appealed the determination of Commerce to a bi-national panel under the North American Free Trade Agreement. Based on our current operating parameters, the cash deposits could be as high as $25 million per year. As of June 30, 2016, we have made $16 million of cash deposits. To the extent the countervailing duty rate set by Commerce is lower than 17.87%, we will recover excess deposits, plus interest. If the countervailing duty rate set by Commerce is at or above 17.87%, the deposits and any deficiency will be converted into actual countervailing duties. We are not presently able to determine the ultimate resolution of this matter, but we believe it is not probable that we will be assessed with significant countervailing duties. Accordingly, no contingent loss was recorded in respect of this petition in our Consolidated Statement of Operations for the six months ended June 30, 2016.

Effective July 31, 2012, we completed the final step of the transaction pursuant to which we acquired the remaining 25.4% of the outstanding Fibrek Inc. (“Fibrek”) shares, following the approval of Fibrek’s shareholders on July 23, 2012, and the issuance of a final order of the Quebec Superior Court in Canada approving the arrangement on July 27, 2012. Certain former shareholders of Fibrek exercised (or purported to exercise) rights of dissent in respect of the transaction, asking for a judicial determination of the fair value of their claim under the Canada Business Corporations Act. No consideration has to date been paid to the former Fibrek shareholders who exercised (or purported to exercise) rights of dissent. Any such consideration will only be paid out upon settlement or judicial determination of the fair value of their claims and will be paid entirely in cash. Accordingly, we cannot presently determine the amount that ultimately will be paid to former holders of Fibrek shares in connection with the proceedings, but we have accrued approximately Cdn $14 million ($11 million, based on the exchange rate in effect on June 30, 2016) for the eventual payment of those claims. The hearing in this matter is expected to begin in 2019.

On June 12, 2012, we filed a motion for directives with the Quebec Superior Court, the Canadian court with jurisdiction in the creditor protection proceedings from which AbitibiBowater Inc. (our predecessor entity) and all but one of its affiliates emerged in 2010 (the “Creditor Protection Proceedings”), seeking an order to prevent pension regulators in each of Quebec, New Brunswick, and Newfoundland and Labrador from declaring partial wind-ups of pension plans relating to employees of former operations in New Brunswick, and Newfoundland and Labrador, or a declaration that any claim for accelerated reimbursements of deficits arising from a partial wind-up is a barred claim under the Creditor Protection Proceedings. These plans are subject to the funding relief regulations described in Note 13, “Pension and Other Postretirement Benefit Plans - Canadian pension funding,” to our Consolidated Financial Statements for the year ended December 31, 2015, and we contend, among other things, that any such declaration, if issued, would be inconsistent with the Quebec Superior Court’s sanction order confirming the plan of reorganization and the terms of our emergence from the Creditor Protection Proceedings. A partial wind-up would likely shorten the period in which any deficit within those plans, which could reach up to Cdn $150 million ($115 million, based on the exchange rate in effect on June 30, 2016), would have to be funded if we do not obtain the relief sought. No hearing date has been set to date.

Environmental matters

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

We may be a “potentially responsible party” with respect to four hazardous waste sites that are being addressed pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (commonly known as Superfund) or the Resource Conservation and Recovery Act corrective action authority. We believe we will not be liable for any significant amounts at any of these sites.

We have recorded $9 million and $12 million of environmental liabilities as of June 30, 2016 and December 31, 2015, respectively, primarily related to environmental remediation related to closed sites. The amount of these liabilities represents management’s estimate of the ultimate settlement based on an assessment of relevant factors and assumptions and could be affected by changes in facts or assumptions not currently known to management for which the outcome cannot be reasonably estimated at this time. These liabilities are included in “Accounts payable and accrued liabilities” or “Other liabilities” in our Consolidated Balance Sheets.

We have also recorded $22 million and $23 million of asset retirement obligations as of June 30, 2016 and December 31, 2015, respectively, primarily consisting of liabilities associated with landfills, sludge basins and the dismantling of retired assets. These liabilities are included in “Other liabilities” in our Consolidated Balance Sheets.

Other matters

On October 30, 2014, we received a notice from the Ministry of Natural Resources and Forestry of Ontario (the “MNRF”) directing us to repay a conditional incentive of Cdn $23 million ($18 million, based on the exchange rate in effect on June 30, 2016) offered in 2007 toward the construction of an electricity-producing turbine, should we fail to restart our Fort Frances, Ontario, pulp and paper mill or otherwise implement an alternative remedy that is acceptable to the MNRF. Several extensions to implement an alternative remedy have been granted to us by the MNRF, with the latest remedy date being October 31, 2016. We announced the permanent closure of the mill in the second quarter of 2014 and have been exploring a number of opportunities for the mill. We are not presently able to determine the outcome of this process, but we currently believe that we could reach an acceptable outcome for the MNRF. Accordingly, we have recorded no contingent liability in respect of this notice in our Consolidated Balance Sheet as of June 30, 2016.

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Share Capital Share Capital

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Share capital

Note 12. Share Capital

On May 28, 2015, our board of directors authorized a $50 million increase to our existing $100 million share repurchase program, which was originally launched in May of 2012. During the three and six months ended June 30, 2015, we repurchased 3.2 million shares, at a cost of $37 million. We did not repurchase any shares during the three and six months ended June 30, 2016. There remains $24 million under the program.

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Segment Information

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Segment Information

Note 13. Segment Information

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

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

Information about certain segment data for the three and six months ended June 30, 2016 and 2015, was as follows:

(Unaudited, in millions)	Market Pulp (1)		Tissue			Wood Products (2)			Newsprint			Specialty Papers		Segment Total		Corporate and Other			Total
Sales
Second quarter
2016	$	210	$	24		$	145		$	257		$	255	$	891	$	—		$	891
2015		231		—			134			289			272		926		—			926
First six months
2016		421		47			264			514			522		1,768		—			1,768
2015		449		—			273			580			544		1,846		—			1,846
Depreciation and amortization (3)
Second quarter
2016	$	11	$	2		$	9		$	19		$	10	$	51	$	3		$	54
2015		12		—			9			16			19		56		4			60
First six months
2016		18		4			16			39			23		100		6			106
2015		26		—			17			32			36		111		6			117
Operating income (loss)
Second quarter
2016	$	12	$	(4	)	$	20		$	(3	)	$	16	$	41	$	(59	)	$	(18	)
2015		26		—			(4	)		3			17		42		(26	)		16
First six months
2016		32		(6	)		16			(8	)		23		57		(75	)		(18	)
2015		37		—			1			—			22		60		(59	)		1

⁽¹⁾  Market pulp sales excluded inter-segment sales of $10 million and $5 million for the three months ended June 30, 2016 and 2015, respectively, and $15 million and $8 million for the six months ended June 30, 2016 and 2015, respectively, which are transacted at cost.

⁽²⁾  Wood products sales to our joint ventures, which are transacted at arm’s length negotiated prices, were $5 million for both the three months ended June 30, 2016 and 2015, and$10 million and $9 million for the six months ended June 30, 2016 and 2015, respectively.

⁽³⁾  As discussed inNote 1, “Organization and Basis of Presentation,” we changed our estimate of the useful lives of certain of our machinery and equipment to reflect a net increase of estimated periods during which these assets will remain in service. The effect of this change in estimate was to (decrease) increase “Depreciation and amortization” by reportable segment for the three and six months ended June 30, 2016 as follows:

(Unaudited, in millions)	Market Pulp			Tissue		Wood Products			Newsprint		Specialty Papers			Total
Second quarter 2016	$	(4	)	$	—	$	(3	)	$	6	$	(2	)	$	(3	)
First six months 2016		(10	)		—		(6	)		12		(2	)		(6	)

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Condensed Consolidating Financial Information

6 Months Ended

Jun. 30, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Information

Note 14. 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 in connection with Resolute Forest Products Inc.’s 2023 Notes that are fully and unconditionally guaranteed, on a joint and several basis, by all of our 100% owned material U.S. subsidiaries (the “Guarantor Subsidiaries”). The 2023 Notes are not guaranteed by our foreign subsidiaries (the “Non-guarantor Subsidiaries”).

The following condensed consolidating financial information sets forth the Statements of Operations and Comprehensive (Loss) Income for the three and six months ended June 30, 2016 and 2015, the Balance Sheets as of June 30, 2016 and December 31, 2015, and the Statements of Cash Flows for the six months ended June 30, 2016 and 2015 for 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 AND COMPREHENSIVE (LOSS) INCOME
For the Three Months Ended June 30, 2016
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	730		$	537		$	(376	)	$	891
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			678			365			(375	)		668
Depreciation and amortization		—			21			33			—			54
Distribution costs		—			40			70			—			110
Selling, general and administrative expenses		5			16			19			—			40
Closure costs, impairment and other related charges		—			37			—			—			37
Operating (loss) income		(5	)		(62	)		50			(1	)		(18	)
Interest expense		(21	)		—			(2	)		14			(9	)
Other income (expense), net		—			16			(2	)		(14	)		—
Equity in loss of subsidiaries		(16	)		(9	)		—			25			—
(Loss) income before income taxes		(42	)		(55	)		46			24			(27	)
Income tax provision		—			(1	)		(12	)		—			(13	)
Net (loss) income including noncontrolling interests		(42	)		(56	)		34			24			(40	)
Net income attributable to noncontrolling interests		—			—			(2	)		—			(2	)
Net (loss) income attributable to Resolute Forest Products Inc.	$	(42	)	$	(56	)	$	32		$	24		$	(42	)
Comprehensive (loss) income attributable to Resolute Forest Products Inc.	$	(36	)	$	(59	)	$	41		$	18		$	(36	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
For the Six Months Ended June 30, 2016
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	1,471		$	1,053		$	(756	)	$	1,768
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			1,383			718			(756	)		1,345
Depreciation and amortization		—			43			63			—			106
Distribution costs		—			83			139			—			222
Selling, general and administrative expenses		10			32			36			—			78
Closure costs, impairment and other related charges		—			37			—			—			37
Net gain on disposition of assets		—			—			(2	)		—			(2	)
Operating (loss) income		(10	)		(107	)		99			—			(18	)
Interest expense		(39	)		—			(6	)		26			(19	)
Other income, net		—			35			4			(26	)		13
Equity in loss of subsidiaries		(1	)		(22	)		—			23			—
(Loss) income before income taxes		(50	)		(94	)		97			23			(24	)
Income tax provision		—			(1	)		(22	)		—			(23	)
Net (loss) income including noncontrolling interests		(50	)		(95	)		75			23			(47	)
Net income attributable to noncontrolling interests		—			—			(3	)		—			(3	)
Net (loss) income attributable to Resolute Forest Products Inc.	$	(50	)	$	(95	)	$	72		$	23		$	(50	)
Comprehensive (loss) income attributable to Resolute Forest Products Inc.	$	(39	)	$	(101	)	$	89		$	12		$	(39	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three Months Ended June 30, 2015
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	747		$	559		$	(380	)	$	926
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			676			397			(381	)		692
Depreciation and amortization		—			23			37			—			60
Distribution costs		—			41			76			1			118
Selling, general and administrative expenses		3			14			23			—			40
Operating (loss) income		(3	)		(7	)		26			—			16
Interest expense		(18	)		(1	)		(2	)		10			(11	)
Other income, net		—			9			2			(10	)		1
Equity in income of subsidiaries		17			—			—			(17	)		—
(Loss) income before income taxes		(4	)		1			26			(17	)		6
Income tax provision		—			—			(10	)		—			(10	)
Net (loss) income including noncontrolling interests		(4	)		1			16			(17	)		(4	)
Net income attributable to noncontrolling interests		—			—			—			—			—
Net (loss) income attributable to Resolute Forest Products Inc.	$	(4	)	$	1		$	16		$	(17	)	$	(4	)
Comprehensive income attributable to Resolute Forest Products Inc.	$	7		$	1		$	27		$	(28	)	$	7

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
For the Six Months Ended June 30, 2015
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	1,498		$	1,140		$	(792	)	$	1,846
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			1,380			821			(791	)		1,410
Depreciation and amortization		—			46			71			—			117
Distribution costs		—			82			149			—			231
Selling, general and administrative expenses		6			26			49			—			81
Closure costs, impairment and other related charges		—			—			6			—			6
Operating (loss) income		(6	)		(36	)		44			(1	)		1
Interest expense		(36	)		(2	)		(4	)		19			(23	)
Other (expense) income, net		(1	)		21			5			(19	)		6
Equity in income of subsidiaries		6			—			—			(6	)		—
(Loss) income before income taxes		(37	)		(17	)		45			(7	)		(16	)
Income tax benefit (provision)		—			4			(24	)		—			(20	)
Net (loss) income including noncontrolling interests		(37	)		(13	)		21			(7	)		(36	)
Net income attributable to noncontrolling interests		—			—			(1	)		—			(1	)
Net (loss) income attributable to Resolute Forest Products Inc.	$	(37	)	$	(13	)	$	20		$	(7	)	$	(37	)
Comprehensive (loss) income attributable to Resolute Forest Products Inc.	$	(16	)	$	(13	)	$	41		$	(28	)	$	(16	)

CONDENSED CONSOLIDATING BALANCE SHEET
As of June 30, 2016
(Unaudited, in millions)	Parent		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Consolidating Adjustments			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	6	$	34	$	—		$	40
Accounts receivable, net		—		310		141		—			451
Accounts receivable from affiliates		—		455		381		(836	)		—
Inventories, net		—		255		298		(6	)		547
Note, advance and interest receivable from parent		—		366		—		(366	)		—
Notes and interest receivable from affiliates		—		49		—		(49	)		—
Other current assets		—		34		14		—			48
Total current assets		—		1,475		868		(1,257	)		1,086
Fixed assets, net		—		649		1,152		—			1,801
Amortizable intangible assets, net		—		44		57		—			101
Goodwill		—		61		—		—			61
Deferred income tax assets		—		—		1,024		1			1,025
Note receivable from parent		—		428		—		(428	)		—
Note receivable from affiliate		—		113		—		(113	)		—
Investments in consolidated subsidiaries and affiliates		4,077		2,025		—		(6,102	)		—
Other assets		—		54		117		—			171
Total assets	$	4,077	$	4,849	$	3,218	$	(7,899	)	$	4,245
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities	$	4	$	218	$	251	$	—		$	473
Current portion of long-term debt		—		1		—		—			1
Accounts payable to affiliates		455		381		—		(836	)		—
Note, advance and interest payable to subsidiaries		366		—		—		(366	)		—
Notes and interest payable to affiliate		—		—		49		(49	)		—
Total current liabilities		825		600		300		(1,251	)		474
Long-term debt, net of current portion		590		20		—		—			610
Note payable to subsidiary		428		—		—		(428	)		—
Note payable to affiliate		—		—		113		(113	)		—
Pension and other postretirement benefit obligations		—		343		845		—			1,188
Deferred income tax liabilities		—		1		1		—			2
Other liabilities		—		24		32		—			56
Total liabilities		1,843		988		1,291		(1,792	)		2,330
Total equity		2,234		3,861		1,927		(6,107	)		1,915
Total liabilities and equity	$	4,077	$	4,849	$	3,218	$	(7,899	)	$	4,245

CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2015
(Unaudited, in millions)	Parent		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Consolidating Adjustments			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	13	$	45	$	—		$	58
Accounts receivable, net		—		323		146		—			469
Accounts receivable from affiliates		—		421		272		(693	)		—
Inventories, net		—		257		290		(6	)		541
Advance and interest receivable from parent		—		62		—		(62	)		—
Notes and interest receivable from affiliates		—		48		—		(48	)		—
Other current assets		—		21		22		—			43
Total current assets		—		1,145		775		(809	)		1,111
Fixed assets, net		—		629		1,181		—			1,810
Amortizable intangible assets, net		—		46		59		—			105
Goodwill		—		59		—		—			59
Deferred income tax assets		—		—		981		1			982
Notes receivable from parent		—		710		—		(710	)		—
Note receivable from affiliate		—		105		—		(105	)		—
Investments in consolidated subsidiaries and affiliates		4,067		2,047		—		(6,114	)		—
Other assets		—		48		105		—			153
Total assets	$	4,067	$	4,789	$	3,101	$	(7,737	)	$	4,220
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities	$	5	$	189	$	242	$	—		$	436
Current portion of long-term debt		—		1		—		—			1
Accounts payable to affiliates		433		260		—		(693	)		—
Advance and interest payable to subsidiaries		62		—		—		(62	)		—
Notes and interest payable to affiliate		—		—		48		(48	)		—
Total current liabilities		500		450		290		(803	)		437
Long-term debt, net of current portion		589		1		—		—			590
Notes payable to subsidiaries		710		—		—		(710	)		—
Note payable to affiliate		—		—		105		(105	)		—
Pension and other postretirement benefit obligations		—		352		834		—			1,186
Deferred income tax liabilities		—		—		2		—			2
Other liabilities		1		24		35		—			60
Total liabilities		1,800		827		1,266		(1,618	)		2,275
Total equity		2,267		3,962		1,835		(6,119	)		1,945
Total liabilities and equity	$	4,067	$	4,789	$	3,101	$	(7,737	)	$	4,220

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 2016
(Unaudited, in millions)	Parent		Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash provided by operating activities	$	—	$	56		$	13		$	—		$	69
Cash flows from investing activities:
Cash invested in fixed assets		—		(67	)		(32	)		—			(99	)
Disposition of assets		—		—			5			—			5
Increase in countervailing duty cash deposits		—		(12	)		—			—			(12	)
Increase in deposit requirements for letters of credit, net		—		—			(1	)		—			(1	)
Increase of notes receivable from affiliate		—		(3	)		—			3			—
Net cash used in investing activities		—		(82	)		(28	)		3			(107	)
Cash flows from financing activities:
Borrowings under revolving credit facility		—		20			—			—			20
Payments of debt		—		(1	)		—			—			(1	)
Increase of notes payable to affiliate		—		—			3			(3	)		—
Net cash provided by financing activities		—		19			3			(3	)		19
Effect of exchange rate changes on cash and cash equivalents		—		—			1			—			1
Net decrease in cash and cash equivalents		—		(7	)		(11	)		—			(18	)
Cash and cash equivalents:
Beginning of period		—		13			45			—			58
End of period	$	—	$	6		$	34		$	—		$	40

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 2015
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash provided by operating activities	$	—		$	80		$	10		$	—		$	90
Cash flows from investing activities:
Cash invested in fixed assets		—			(37	)		(42	)		—			(79	)
Increase in deposit requirements for letters of credit, net		—			—			(4	)		—			(4	)
Advance to parent		—			(37	)		—			37			—
Net cash used in investing activities		—			(74	)		(46	)		37			(83	)
Cash flows from financing activities:
Payments of financing and credit facility fees		—			(2	)		(1	)		—			(3	)
Purchases of treasury stock		(37	)		—			—			—			(37	)
Advance from subsidiary		37			—			—			(37	)		—
Net cash used in financing activities		—			(2	)		(1	)		(37	)		(40	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(1	)		—			(1	)
Net increase (decrease) in cash and cash equivalents		—			4			(38	)		—			(34	)
Cash and cash equivalents:
Beginning of period		—			257			80			—			337
End of period	$	—		$	261		$	42		$	—		$	303

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Organization and Basis of Presentation New Accounting Pronouncements (Policies)

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Change in accounting estimate

We periodically review the estimated economic useful lives of our fixed assets. Based on this review, effective January 1, 2016, we changed our estimate of the useful lives of certain of our machinery and equipment to reflect a net increase of estimated periods during which these assets will remain in service. As a result, the estimated useful lives of machinery and equipment were changed to a range of five to 25 years, increasing the weighted-average estimated useful lives of machinery and equipment by two years. The effect of this change in estimate for the three and six months ended June 30, 2016 was to reduce “Depreciation and amortization”, “Net loss attributable to Resolute Forest Products Inc.”, and basic and diluted “Net loss per share attributable to Resolute Forest Products Inc. common shareholders” in our Consolidated Statement of Operations as follows:

(Unaudited, in millions, except per share amounts)	Three Months Ended June 30, 2016		Six Months Ended June 30, 2016
Depreciation and amortization	$	3	$	6
Net loss attributable to Resolute Forest Products Inc.		1		3
Basic net loss per share attributable to Resolute Forest Products Inc.		0.01		0.03
Diluted net loss per share attributable to Resolute Forest Products Inc.		0.01		0.03

New accounting pronouncements

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09 “Improvements to Employee Share-Based Payment Accounting,” which is intended to simplify several aspects of the accounting for share-based payment transactions. This update is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted as of the beginning of an interim or annual period. All amendments to the guidance shall be adopted in the same period on a retrospective or prospective basis as required for each amendment. The adoption of this accounting guidance will not materially impact our results of operations, financial position or cash flows.

In March 2016, April 2016, and May 2016, the FASB issued ASU 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU 2016-10, “Identifying Performance Obligations and Licensing,” and ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,” respectively, which further affect the guidance of ASU 2014-09. These updates are effective for fiscal years beginning after December 15, 2017, with early adoption permitted for fiscal years beginning after December 15, 2016. We are still evaluating the impact of this standard on our results of operations and financial position.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which introduces the current expected credit losses model in the estimation of credit losses on financial instruments. This update is effective retrospectively for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted for fiscal years beginning after December 15, 2018. We are still evaluating the impact of this standard on our results of operations and financial position.

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Organization and Basis of Presentation Organization and Basis of Presentation (Tables)

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Change in Accounting Estimate [Table Text Block]

The effect of this change in estimate for the three and six months ended June 30, 2016 was to reduce “Depreciation and amortization”, “Net loss attributable to Resolute Forest Products Inc.”, and basic and diluted “Net loss per share attributable to Resolute Forest Products Inc. common shareholders” in our Consolidated Statement of Operations as follows:

(Unaudited, in millions, except per share amounts)	Three Months Ended June 30, 2016		Six Months Ended June 30, 2016
Depreciation and amortization	$	3	$	6
Net loss attributable to Resolute Forest Products Inc.		1		3
Basic net loss per share attributable to Resolute Forest Products Inc.		0.01		0.03
Diluted net loss per share attributable to Resolute Forest Products Inc.		0.01		0.03

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Acquisition of Atlas Inc. Acquisition of Atlas Inc. (Tables)

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Pro Forma Information

The following unaudited pro forma information for the three and six months ended June 30, 2015 represents our results of operations as if the acquisition of Atlas Paper had occurred on January 1, 2015. This pro forma information does not purport to be indicative of the results that would have occurred for the periods presented or that may be expected in the future.

(Unaudited, in millions except per share data)	Three Months Ended June 30, 2015			Six Months Ended June 30, 2015
Sales	$	950		$	1,894
Net loss attributable to Resolute Forest Products Inc.		(6	)		(37	)
Basic net loss per share attributable to Resolute Forest Products Inc.		(0.06	)		(0.39	)
Diluted net loss per share attributable to Resolute Forest Products Inc.		(0.06	)		(0.39	)

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Closure Costs, Impairment and Other Related Charges (Tables)

6 Months Ended

Jun. 30, 2016

Restructuring and Related Activities [Abstract]

Closure Costs, Impairment and Other Related Charges

Closure costs, impairment and other related charges for the three and six months ended June 30, 2016, were comprised of the following:

(Unaudited, in millions)	Accelerated Depreciation		Severance and Other Costs		Total
Permanent closure
Paper machine in Augusta, Georgia (1)
Second quarter	$	32	$	4	$	36
First six months		32		4		36
Other
Second quarter		1		—		1
First six months		1		—		1
Total
Second quarter	$	33	$	4	$	37
First six months		33		4		37

⁽¹⁾  The final workforce reduction in the third quarter of 2016 did not result in the curtailment of a pension or other postretirement benefit (“OPEB”) plan. As such, no curtailment gain or loss will be recorded in “Closure costs, impairment and other related charges” in our Consolidated Statement of Operations.

Closure costs, impairment and other related charges for the three and six months ended June 30, 2015, were comprised of the following:

(Unaudited, in millions)	Accelerated Depreciation		Severance and Other Costs			Total
Permanent closures
Paper mill in Iroquois Falls, Ontario
Second quarter	$	—	$	1		$	1
First six months		—		5			5
Paper machine in Clermont, Quebec
Second quarter		—		—			—
First six months		2		—			2
Other
Second quarter		—		(1	)		(1	)
First six months		—		(1	)		(1	)
Total
Second quarter	$	—	$	—		$	—
First six months		2		4			6

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Other Income (Expense), Net (Tables)

6 Months Ended

Jun. 30, 2016

Other Income and Expenses [Abstract]

Other Income (Expense), Net

Other income, net for the three and six months ended June 30, 2016 and 2015, was comprised of the following:

	Three Months Ended   June 30,					Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015		2016		2015
Foreign exchange (loss) gain	$	(3	)	$	1	$	3	$	3
Gain on disposition of equity method investment (1)		—			—		5		—
Miscellaneous income		3			—		5		3
	$	—		$	1	$	13	$	6

⁽¹⁾  On February 1, 2016, we sold for total consideration of $5 million our interest in Produits Forestiers Petit-Paris Inc., an unconsolidated entity located in Saint-Ludger-de-Milot, Quebec, in which we had a 50% interest, resulting in a gain on disposition of $5 million.

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

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

The change in our accumulated other comprehensive loss by component (net of tax) for the six months ended June 30, 2016, was as follows:

(Unaudited, in millions)	Unamortized Prior Service Credits			Unamortized Actuarial Losses			Foreign Currency Translation			Total
Balance as of December 31, 2015	$	84		$	(667	)	$	(4	)	$	(587	)
Other comprehensive income before reclassifications		—			—			1			1
Amounts reclassified from accumulated other comprehensive loss (1)		(8	)		18			—			10
Net current period other comprehensive (loss) income		(8	)		18			1			11
Balance as of June 30, 2016	$	76		$	(649	)	$	(3	)	$	(576	)

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

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

The reclassifications out of accumulated other comprehensive loss for the six months ended June 30, 2016, were comprised of the following:

(Unaudited, in millions)	Amounts Reclassified From Accumulated Other Comprehensive Loss			Affected Line in the Consolidated Statements of Operations
Unamortized Prior Service Credits
Amortization of prior service credits	$	(8	)	Cost of sales, excluding depreciation, amortization and distribution costs (1)
		—		Income tax provision
	$	(8	)	Net of tax
Unamortized Actuarial Losses
Amortization of actuarial losses	$	24		Cost of sales, excluding depreciation, amortization and distribution costs (1)
		(6	)	Income tax provision
	$	18		Net of tax
Total Reclassifications	$	10		Net of tax

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

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Net Income (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

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

The weighted-average number of outstanding stock options and nonvested equity-classified restricted stock units, deferred stock units and performance stock units (collectively, “stock unit awards”) for the three and six months ended June 30, 2016 and 2015, was as follows:

	Three Months Ended   June 30,		Six Months Ended   June 30,
(Unaudited, in millions)	2016	2015	2016	2015
Stock options	1.5	1.5	1.5	1.6
Stock unit awards	2.4	1.2	2.4	1.2

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Inventories, Net (Tables)

6 Months Ended

Jun. 30, 2016

Inventory Disclosure [Abstract]

Inventories, Net

Inventories, net as of June 30, 2016 and December 31, 2015, were comprised of the following:

(Unaudited, in millions)	June 30, 2016		December 31, 2015
Raw materials and work in process	$	155	$	152
Finished goods		178		179
Mill stores and other supplies		214		210
	$	547	$	541

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Long-Term Debt, Including Current Portion

Long-term debt, including current portion, as of June 30, 2016 and December 31, 2015, was comprised of the following:

(Unaudited, in millions)	June 30, 2016			December 31, 2015
5.875% senior notes due 2023:
Principal amount	$	600		$	600
Deferred financing costs		(6	)		(7	)
Unamortized discount		(4	)		(4	)
Total senior notes due 2023		590			589
Borrowings under revolving credit facility		20			—
Capital lease obligation		1			2
Total debt		611			591
Less: Current portion of long-term debt		(1	)		(1	)
Long-term debt, net of current portion	$	610		$	590

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Employee Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2016

Compensation and Retirement Disclosure [Abstract]

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

The components of net periodic benefit cost relating to our pension and OPEB plans for the three and six months ended June 30, 2016 and 2015, were as follows:

Pension Plans:

	Three Months Ended   June 30,						Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015			2016			2015
Service cost	$	5		$	6		$	10		$	12
Interest cost		55			58			107			116
Expected return on plan assets		(63	)		(67	)		(123	)		(134	)
Amortization of actuarial losses		14			20			27			42
Amortization of prior service credits		(1	)		—			(1	)		(1	)
	$	10		$	17		$	20		$	35

OPEB Plans:

	Three Months Ended   June 30,						Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015			2016			2015
Interest cost	$	2		$	2		$	4		$	4
Amortization of actuarial gains		(2	)		(1	)		(3	)		(2	)
Amortization of prior service credits		(3	)		(3	)		(7	)		(7	)
	$	(3	)	$	(2	)	$	(6	)	$	(5	)

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

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

The income tax provision attributable to (loss) income before income taxes differs from the amounts computed by applying the U.S. federal statutory income tax rate of 35% for the three and six months ended June 30, 2016 and 2015, as a result of the following:

	Three Months Ended   June 30,						Six Months Ended   June 30,
(Unaudited, in millions)	2016			2015			2016			2015
(Loss) income before income taxes	$	(27	)	$	6		$	(24	)	$	(16	)
Income tax provision:
Expected income tax benefit (provision)		9			(2	)		8			6
Changes resulting from:
Valuation allowance (1)		(27	)		(8	)		(45	)		(27	)
Foreign exchange		—			(2	)		3			(7	)
State income taxes and foreign tax rate differences		5			2			11			5
Other, net		—			—			—			3
	$	(13	)	$	(10	)	$	(23	)	$	(20	)

⁽¹⁾  We recorded a valuation allowance of $27 million and $8 million for the three months ended June 30, 2016 and 2015, respectively, and $45 million and $27 million for the six months ended June 30, 2016 and 2015, respectively, primarily related to our U.S. operations where we recognize a full valuation allowance against our net deferred income tax assets.

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

Information about certain segment data for the three and six months ended June 30, 2016 and 2015, was as follows:

(Unaudited, in millions)	Market Pulp (1)		Tissue			Wood Products (2)			Newsprint			Specialty Papers		Segment Total		Corporate and Other			Total
Sales
Second quarter
2016	$	210	$	24		$	145		$	257		$	255	$	891	$	—		$	891
2015		231		—			134			289			272		926		—			926
First six months
2016		421		47			264			514			522		1,768		—			1,768
2015		449		—			273			580			544		1,846		—			1,846
Depreciation and amortization (3)
Second quarter
2016	$	11	$	2		$	9		$	19		$	10	$	51	$	3		$	54
2015		12		—			9			16			19		56		4			60
First six months
2016		18		4			16			39			23		100		6			106
2015		26		—			17			32			36		111		6			117
Operating income (loss)
Second quarter
2016	$	12	$	(4	)	$	20		$	(3	)	$	16	$	41	$	(59	)	$	(18	)
2015		26		—			(4	)		3			17		42		(26	)		16
First six months
2016		32		(6	)		16			(8	)		23		57		(75	)		(18	)
2015		37		—			1			—			22		60		(59	)		1

⁽¹⁾  Market pulp sales excluded inter-segment sales of $10 million and $5 million for the three months ended June 30, 2016 and 2015, respectively, and $15 million and $8 million for the six months ended June 30, 2016 and 2015, respectively, which are transacted at cost.

⁽²⁾  Wood products sales to our joint ventures, which are transacted at arm’s length negotiated prices, were $5 million for both the three months ended June 30, 2016 and 2015, and$10 million and $9 million for the six months ended June 30, 2016 and 2015, respectively.

⁽³⁾  As discussed inNote 1, “Organization and Basis of Presentation,” we changed our estimate of the useful lives of certain of our machinery and equipment to reflect a net increase of estimated periods during which these assets will remain in service. The effect of this change in estimate was to (decrease) increase “Depreciation and amortization” by reportable segment for the three and six months ended June 30, 2016 as follows:

(Unaudited, in millions)	Market Pulp			Tissue		Wood Products			Newsprint		Specialty Papers			Total
Second quarter 2016	$	(4	)	$	—	$	(3	)	$	6	$	(2	)	$	(3	)
First six months 2016		(10	)		—		(6	)		12		(2	)		(6	)

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Condensed Consolidating Financial Information (Tables)

6 Months Ended

Jun. 30, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
For the Three Months Ended June 30, 2016
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	730		$	537		$	(376	)	$	891
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			678			365			(375	)		668
Depreciation and amortization		—			21			33			—			54
Distribution costs		—			40			70			—			110
Selling, general and administrative expenses		5			16			19			—			40
Closure costs, impairment and other related charges		—			37			—			—			37
Operating (loss) income		(5	)		(62	)		50			(1	)		(18	)
Interest expense		(21	)		—			(2	)		14			(9	)
Other income (expense), net		—			16			(2	)		(14	)		—
Equity in loss of subsidiaries		(16	)		(9	)		—			25			—
(Loss) income before income taxes		(42	)		(55	)		46			24			(27	)
Income tax provision		—			(1	)		(12	)		—			(13	)
Net (loss) income including noncontrolling interests		(42	)		(56	)		34			24			(40	)
Net income attributable to noncontrolling interests		—			—			(2	)		—			(2	)
Net (loss) income attributable to Resolute Forest Products Inc.	$	(42	)	$	(56	)	$	32		$	24		$	(42	)
Comprehensive (loss) income attributable to Resolute Forest Products Inc.	$	(36	)	$	(59	)	$	41		$	18		$	(36	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
For the Six Months Ended June 30, 2016
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	1,471		$	1,053		$	(756	)	$	1,768
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			1,383			718			(756	)		1,345
Depreciation and amortization		—			43			63			—			106
Distribution costs		—			83			139			—			222
Selling, general and administrative expenses		10			32			36			—			78
Closure costs, impairment and other related charges		—			37			—			—			37
Net gain on disposition of assets		—			—			(2	)		—			(2	)
Operating (loss) income		(10	)		(107	)		99			—			(18	)
Interest expense		(39	)		—			(6	)		26			(19	)
Other income, net		—			35			4			(26	)		13
Equity in loss of subsidiaries		(1	)		(22	)		—			23			—
(Loss) income before income taxes		(50	)		(94	)		97			23			(24	)
Income tax provision		—			(1	)		(22	)		—			(23	)
Net (loss) income including noncontrolling interests		(50	)		(95	)		75			23			(47	)
Net income attributable to noncontrolling interests		—			—			(3	)		—			(3	)
Net (loss) income attributable to Resolute Forest Products Inc.	$	(50	)	$	(95	)	$	72		$	23		$	(50	)
Comprehensive (loss) income attributable to Resolute Forest Products Inc.	$	(39	)	$	(101	)	$	89		$	12		$	(39	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three Months Ended June 30, 2015
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	747		$	559		$	(380	)	$	926
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			676			397			(381	)		692
Depreciation and amortization		—			23			37			—			60
Distribution costs		—			41			76			1			118
Selling, general and administrative expenses		3			14			23			—			40
Operating (loss) income		(3	)		(7	)		26			—			16
Interest expense		(18	)		(1	)		(2	)		10			(11	)
Other income, net		—			9			2			(10	)		1
Equity in income of subsidiaries		17			—			—			(17	)		—
(Loss) income before income taxes		(4	)		1			26			(17	)		6
Income tax provision		—			—			(10	)		—			(10	)
Net (loss) income including noncontrolling interests		(4	)		1			16			(17	)		(4	)
Net income attributable to noncontrolling interests		—			—			—			—			—
Net (loss) income attributable to Resolute Forest Products Inc.	$	(4	)	$	1		$	16		$	(17	)	$	(4	)
Comprehensive income attributable to Resolute Forest Products Inc.	$	7		$	1		$	27		$	(28	)	$	7

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
For the Six Months Ended June 30, 2015
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales	$	—		$	1,498		$	1,140		$	(792	)	$	1,846
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		—			1,380			821			(791	)		1,410
Depreciation and amortization		—			46			71			—			117
Distribution costs		—			82			149			—			231
Selling, general and administrative expenses		6			26			49			—			81
Closure costs, impairment and other related charges		—			—			6			—			6
Operating (loss) income		(6	)		(36	)		44			(1	)		1
Interest expense		(36	)		(2	)		(4	)		19			(23	)
Other (expense) income, net		(1	)		21			5			(19	)		6
Equity in income of subsidiaries		6			—			—			(6	)		—
(Loss) income before income taxes		(37	)		(17	)		45			(7	)		(16	)
Income tax benefit (provision)		—			4			(24	)		—			(20	)
Net (loss) income including noncontrolling interests		(37	)		(13	)		21			(7	)		(36	)
Net income attributable to noncontrolling interests		—			—			(1	)		—			(1	)
Net (loss) income attributable to Resolute Forest Products Inc.	$	(37	)	$	(13	)	$	20		$	(7	)	$	(37	)
Comprehensive (loss) income attributable to Resolute Forest Products Inc.	$	(16	)	$	(13	)	$	41		$	(28	)	$	(16	)

Condensed Consolidating Balance Sheets

CONDENSED CONSOLIDATING BALANCE SHEET
As of June 30, 2016
(Unaudited, in millions)	Parent		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Consolidating Adjustments			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	6	$	34	$	—		$	40
Accounts receivable, net		—		310		141		—			451
Accounts receivable from affiliates		—		455		381		(836	)		—
Inventories, net		—		255		298		(6	)		547
Note, advance and interest receivable from parent		—		366		—		(366	)		—
Notes and interest receivable from affiliates		—		49		—		(49	)		—
Other current assets		—		34		14		—			48
Total current assets		—		1,475		868		(1,257	)		1,086
Fixed assets, net		—		649		1,152		—			1,801
Amortizable intangible assets, net		—		44		57		—			101
Goodwill		—		61		—		—			61
Deferred income tax assets		—		—		1,024		1			1,025
Note receivable from parent		—		428		—		(428	)		—
Note receivable from affiliate		—		113		—		(113	)		—
Investments in consolidated subsidiaries and affiliates		4,077		2,025		—		(6,102	)		—
Other assets		—		54		117		—			171
Total assets	$	4,077	$	4,849	$	3,218	$	(7,899	)	$	4,245
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities	$	4	$	218	$	251	$	—		$	473
Current portion of long-term debt		—		1		—		—			1
Accounts payable to affiliates		455		381		—		(836	)		—
Note, advance and interest payable to subsidiaries		366		—		—		(366	)		—
Notes and interest payable to affiliate		—		—		49		(49	)		—
Total current liabilities		825		600		300		(1,251	)		474
Long-term debt, net of current portion		590		20		—		—			610
Note payable to subsidiary		428		—		—		(428	)		—
Note payable to affiliate		—		—		113		(113	)		—
Pension and other postretirement benefit obligations		—		343		845		—			1,188
Deferred income tax liabilities		—		1		1		—			2
Other liabilities		—		24		32		—			56
Total liabilities		1,843		988		1,291		(1,792	)		2,330
Total equity		2,234		3,861		1,927		(6,107	)		1,915
Total liabilities and equity	$	4,077	$	4,849	$	3,218	$	(7,899	)	$	4,245

CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2015
(Unaudited, in millions)	Parent		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Consolidating Adjustments			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	13	$	45	$	—		$	58
Accounts receivable, net		—		323		146		—			469
Accounts receivable from affiliates		—		421		272		(693	)		—
Inventories, net		—		257		290		(6	)		541
Advance and interest receivable from parent		—		62		—		(62	)		—
Notes and interest receivable from affiliates		—		48		—		(48	)		—
Other current assets		—		21		22		—			43
Total current assets		—		1,145		775		(809	)		1,111
Fixed assets, net		—		629		1,181		—			1,810
Amortizable intangible assets, net		—		46		59		—			105
Goodwill		—		59		—		—			59
Deferred income tax assets		—		—		981		1			982
Notes receivable from parent		—		710		—		(710	)		—
Note receivable from affiliate		—		105		—		(105	)		—
Investments in consolidated subsidiaries and affiliates		4,067		2,047		—		(6,114	)		—
Other assets		—		48		105		—			153
Total assets	$	4,067	$	4,789	$	3,101	$	(7,737	)	$	4,220
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities	$	5	$	189	$	242	$	—		$	436
Current portion of long-term debt		—		1		—		—			1
Accounts payable to affiliates		433		260		—		(693	)		—
Advance and interest payable to subsidiaries		62		—		—		(62	)		—
Notes and interest payable to affiliate		—		—		48		(48	)		—
Total current liabilities		500		450		290		(803	)		437
Long-term debt, net of current portion		589		1		—		—			590
Notes payable to subsidiaries		710		—		—		(710	)		—
Note payable to affiliate		—		—		105		(105	)		—
Pension and other postretirement benefit obligations		—		352		834		—			1,186
Deferred income tax liabilities		—		—		2		—			2
Other liabilities		1		24		35		—			60
Total liabilities		1,800		827		1,266		(1,618	)		2,275
Total equity		2,267		3,962		1,835		(6,119	)		1,945
Total liabilities and equity	$	4,067	$	4,789	$	3,101	$	(7,737	)	$	4,220

Condensed Consolidating Statements of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 2016
(Unaudited, in millions)	Parent		Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash provided by operating activities	$	—	$	56		$	13		$	—		$	69
Cash flows from investing activities:
Cash invested in fixed assets		—		(67	)		(32	)		—			(99	)
Disposition of assets		—		—			5			—			5
Increase in countervailing duty cash deposits		—		(12	)		—			—			(12	)
Increase in deposit requirements for letters of credit, net		—		—			(1	)		—			(1	)
Increase of notes receivable from affiliate		—		(3	)		—			3			—
Net cash used in investing activities		—		(82	)		(28	)		3			(107	)
Cash flows from financing activities:
Borrowings under revolving credit facility		—		20			—			—			20
Payments of debt		—		(1	)		—			—			(1	)
Increase of notes payable to affiliate		—		—			3			(3	)		—
Net cash provided by financing activities		—		19			3			(3	)		19
Effect of exchange rate changes on cash and cash equivalents		—		—			1			—			1
Net decrease in cash and cash equivalents		—		(7	)		(11	)		—			(18	)
Cash and cash equivalents:
Beginning of period		—		13			45			—			58
End of period	$	—	$	6		$	34		$	—		$	40

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 2015
(Unaudited, in millions)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash provided by operating activities	$	—		$	80		$	10		$	—		$	90
Cash flows from investing activities:
Cash invested in fixed assets		—			(37	)		(42	)		—			(79	)
Increase in deposit requirements for letters of credit, net		—			—			(4	)		—			(4	)
Advance to parent		—			(37	)		—			37			—
Net cash used in investing activities		—			(74	)		(46	)		37			(83	)
Cash flows from financing activities:
Payments of financing and credit facility fees		—			(2	)		(1	)		—			(3	)
Purchases of treasury stock		(37	)		—			—			—			(37	)
Advance from subsidiary		37			—			—			(37	)		—
Net cash used in financing activities		—			(2	)		(1	)		(37	)		(40	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(1	)		—			(1	)
Net increase (decrease) in cash and cash equivalents		—			4			(38	)		—			(34	)
Cash and cash equivalents:
Beginning of period		—			257			80			—			337
End of period	$	—		$	261		$	42		$	—		$	303

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Organization and Basis of Presentation - Nature of Operations (Details)	Jun. 30, 2016 ManufacturingSites Country
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of countries products are marketed in (approximate) | Country	80
Number of operating pulp and paper mills and wood products facilities (approximate) | ManufacturingSites	40

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Organization and Basis of Presentation - Change in Accounting Policy on Consolidated Statements of Operations (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Change in Accounting Estimate [Line Items]
Depreciation and amortization	[1]	$ (54)	$ (60)	$ (106)	$ (117)
Net loss including noncontrolling interests		$ (42)	$ (4)	$ (50)	$ (37)
Basic (in dollars per share)		$ (0.47)	$ (0.04)	$ (0.56)	$ (0.39)
Diluted (in dollars per share)		$ (0.47)	$ (0.04)	$ (0.56)	$ (0.39)
Scenario, Adjustment [Member]
Change in Accounting Estimate [Line Items]
Depreciation and amortization		$ 3		$ 6
Net loss including noncontrolling interests		$ 1		$ 3
Basic (in dollars per share)		$ 0.01		$ 0.03
Diluted (in dollars per share)		$ 0.01		$ 0.03

[1] As discussed in Note 1, “Organization and Basis of Presentation,” we changed our estimate of the useful lives of certain of our machinery and equipment to reflect a net increase of estimated periods during which these assets will remain in service. The effect of this change in estimate was to (decrease) increase “Depreciation and amortization” by reportable segment for the three and six months ended June 30, 2016 as follows:(Unaudited, in millions)Market PulpTissueWood ProductsNewsprintSpecialtyPapersTotalSecond quarter 2016$(4) $— $(3) $6 $(2) $(3) First six months 2016 (10) — (6) 12 (2) (6)

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Organization and Basis of Presentation - Change in Accounting Policy on Consolidated Statements of Operations - Additional Information (Details)	6 Months Ended
	Jun. 30, 2016
Change in Accounting Estimate [Line Items]
Increase in weighted-average useful life	2 years
Minimum [Member] | Machinery and Equipment [Member]
Change in Accounting Estimate [Line Items]
Estimated useful life	5 years
Maximum [Member] | Machinery and Equipment [Member]
Change in Accounting Estimate [Line Items]
Estimated useful life	25 years

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Acquisition of Atlas Inc. - Pro Forma Information (Details) - Atlas Inc. [Member] - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2015
Sales	$ 950	$ 1,894
Net loss attributable to Resolute Forest Products Inc.	$ (6)	$ (37)
Basic net loss per share attributable to Resolute Forest Products Inc.	$ (0.06)	$ (0.39)
Diluted net loss per share attributable to Resolute Forest Products Inc.	$ (0.06)	$ (0.39)

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Acquisition of Atlas Inc. - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Sales	$ 891	$ 926	$ 1,768	$ 1,846
Net loss	42	$ 4	50	$ 37
Atlas Inc. [Member]
Purchase price allocation adjustment, fixed assets, net			1
Purchase price allocation adjustment, amortizable intangible assets, net			1
Purchase price allocation adjustment, goodwill			2
Sales	24		47
Net loss	$ 4		$ 6

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Closure Costs, Impairment and Other Related Charges (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Restructuring Cost and Reserve [Line Items]
Accelerated depreciation		$ 33	$ 0	$ 33	$ 2
Severance and other costs		4	0	4	4
Total		37	0	37	6
Permanent closure of paper machine in Augusta, Georgia [Member]
Restructuring Cost and Reserve [Line Items]
Accelerated depreciation	[1]	32		32
Severance and other costs	[1]	4		4
Total	[1]	36		36
Permanent closure of a paper mill in Iroquois Falls, Ontario [Member]
Restructuring Cost and Reserve [Line Items]
Accelerated depreciation			0		0
Severance and other costs			1		5
Total			1		5
Permanent closure of paper machine in Clermont, Québec [Member]
Restructuring Cost and Reserve [Line Items]
Accelerated depreciation			0		2
Severance and other costs			0		0
Total			0		2
Other [Member]
Restructuring Cost and Reserve [Line Items]
Accelerated depreciation		1	0	1	0
Severance and other costs		0	(1)	0	(1)
Total		$ 1	$ (1)	$ 1	$ (1)

[1] The final workforce reduction in the third quarter of 2016 did not result in the curtailment of a pension or other postretirement benefit (“OPEB”) plan. As such, no curtailment gain or loss will be recorded in “Closure costs, impairment and other related charges” in our Consolidated Statement of Operations.

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Other Income (Expense), Net (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Other Income and Expenses [Abstract]
Foreign exchange (loss) gain		$ (3)	$ 1	$ 3	$ 3
Gain on disposition of equity method investment	[1]	0	0	5	0
Miscellaneous income		3	0	5	3
Other income (expense), net		$ 0	$ 1	$ 13	$ 6

[1] On February 1, 2016, we sold for total consideration of $5 million our interest in Produits Forestiers Petit-Paris Inc., an unconsolidated entity located in Saint-Ludger-de-Milot, Quebec, in which we had a 50% interest, resulting in a gain on disposition of $5 million.

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Other Income (Expense), Net - Additional Information (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Other Income (Expense) [Line Items]
Gain on disposition of equity method investment	[1]	$ 0	$ 0	$ 5	$ 0
Produits Forestiers Petit-Paris Inc. [Member]
Other Income (Expense) [Line Items]
Proceeds from sale of equity method investment				5
Gain on disposition of equity method investment				$ 5

[1] On February 1, 2016, we sold for total consideration of $5 million our interest in Produits Forestiers Petit-Paris Inc., an unconsolidated entity located in Saint-Ludger-de-Milot, Quebec, in which we had a 50% interest, resulting in a gain on disposition of $5 million.

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Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) by Component (Net of Tax) (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance				$ (587)
Other comprehensive income before reclassifications				1
Amounts reclassified from accumulated other comprehensive income (loss)	[1]			10
Other comprehensive income (loss), net of tax		$ 6	$ 11	11	$ 21
Ending balance		(576)		(576)
Unamortized Prior Service Credits [Member]
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance				84
Other comprehensive income before reclassifications				0
Amounts reclassified from accumulated other comprehensive income (loss)	[1]			(8)
Other comprehensive income (loss), net of tax				(8)
Ending balance		76		76
Unamortized Actuarial Losses [Member]
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance				(667)
Other comprehensive income before reclassifications				0
Amounts reclassified from accumulated other comprehensive income (loss)	[1]			18
Other comprehensive income (loss), net of tax				18
Ending balance		(649)		(649)
Foreign Currency Translation [Member]
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance				(4)
Other comprehensive income before reclassifications				1
Amounts reclassified from accumulated other comprehensive income (loss)	[1]			0
Other comprehensive income (loss), net of tax				1
Ending balance		$ (3)		$ (3)

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

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Accumulated Other Comprehensive Income (Loss) - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items]
Cost of sales, excluding depreciation, amortization and distribution costs		$ 668	$ 692	$ 1,345	$ 1,410
Income tax (benefit) provision		13	10	23	20
Net of tax		$ 42	$ 4	50	$ 37
Amounts Reclassified From Accumulated Other Comprehensive Loss [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items]
Net of tax				10
Amounts Reclassified From Accumulated Other Comprehensive Loss [Member] | Unamortized Prior Service Credits [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items]
Cost of sales, excluding depreciation, amortization and distribution costs	[1]			(8)
Income tax (benefit) provision				0
Net of tax				(8)
Amounts Reclassified From Accumulated Other Comprehensive Loss [Member] | Unamortized Actuarial Losses [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items]
Cost of sales, excluding depreciation, amortization and distribution costs	[1]			24
Income tax (benefit) provision				(6)
Net of tax				$ 18

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

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Net Income (Loss) Per Share - Schedule of Weighted-Average Stock Options and Equity-Classified RSUs, DSUs and PSUs Outstanding (Details) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of award shares outstanding	1.5	1.5	1.5	1.6
Stock unit awards [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of award shares outstanding	2.4	1.2	2.4	1.2

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Inventories, Net (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Raw materials and work in process	$ 155	$ 152
Finished goods	178	179
Mill stores and other supplies	214	210
Inventories, net	$ 547	$ 541

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Inventories, Net - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2016	Jun. 30, 2015
Inventory Disclosure [Abstract]
Inventory write-downs related to closures	$ 5	$ 5	$ 1

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Long-Term Debt - Long-Term Debt Including Current Portion (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
Principal amount	$ 600	$ 600
Deferred financing costs	(6)	(7)
Unamortized discount	(4)	(4)
Net carrying amount	590	589
Borrowings under revolving credit facility	20	0
Capital lease obligation	1	2
Total debt	611	591
Less: Current portion of long-term debt	(1)	(1)
Long-term debt, net of current portion	$ 610	$ 590

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Long-Term Debt - Senior Notes (Details) - Senior Notes [Member] - Senior Notes Due 2023 [Member] - USD ($)	Jun. 30, 2016	Dec. 31, 2015	May 08, 2013
Debt Instrument [Line Items]
Principal amount of debt			$ 600,000,000
Interest rate of notes			5.875%
Fair value of senior notes	$ 473,000,000	$ 440,000,000	$ 594,000,000
Unamortized discount			$ 6,000,000
Effective interest rate of debt			6.00%
Deferred financing costs			$ 9,000,000

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Long-Term Debt - ABL Credit Facility (Details) - Revolving Credit Facility [Member]	Jun. 30, 2016 USD ($)
Line of Credit Facility [Line Items]
Credit facility lender commitment amount	$ 600,000,000
Available credit facility borrowing capacity	412,000,000
Credit facility borrowings	20,000,000
Letters of credit amount outstanding	32,000,000
Additional borrowings under ABL credit facility post period end	$ 60,000,000

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Long-Term Debt - Capital Lease Obligation (Details)	6 Months Ended
	Jun. 30, 2016
Debt Disclosure [Abstract]
Length of warehouse capital lease obligation renewal option	20 years

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Employee Benefit Plans - Components of Net Periodic Benefit Cost Relating to Pension and OPEB Plans (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 5	$ 6	$ 10	$ 12
Interest cost	55	58	107	116
Expected return on plan assets	(63)	(67)	(123)	(134)
Amortization of actuarial (gains) losses	14	20	27	42
Amortization of prior service (credits) costs	(1)	0	(1)	(1)
Net periodic benefit cost	10	17	20	35
OPEB Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest cost	2	2	4	4
Amortization of actuarial (gains) losses	(2)	(1)	(3)	(2)
Amortization of prior service (credits) costs	(3)	(3)	(7)	(7)
Net periodic benefit cost	$ (3)	$ (2)	$ (6)	$ (5)

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Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Compensation and Retirement Disclosure [Abstract]
Expense for the defined contribution plans, total	$ 5	$ 4	$ 10	$ 10

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Income Taxes - Reconciliation of Statutory Tax Benefit (Provision) to Income Tax Benefit (Provision) (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Tax Disclosure [Abstract]
(Loss) income before income taxes		$ (27)	$ 6	$ (24)	$ (16)
Income tax provision:
Expected income tax benefit (provision)		9	(2)	8	6
Changes resulting from:
Valuation allowance	[1]	(27)	(8)	(45)	(27)
Foreign exchange		0	(2)	3	(7)
State income taxes and foreign tax rate differences		5	2	11	5
Other, net		0	0	0	3
Income tax provision		$ (13)	$ (10)	$ (23)	$ (20)

[1] We recorded a valuation allowance of $27 million and $8 million for the three months ended June 30, 2016 and 2015, respectively, and $45 million and $27 million for the six months ended June 30, 2016 and 2015, respectively, primarily related to our U.S. operations where we recognize a full valuation allowance against our net deferred income tax assets.

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Income Taxes - Additional Information (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Tax Disclosure [Abstract]
U.S. federal statutory income tax rate		35.00%	35.00%	35.00%	35.00%
Increase (decrease) in valuation allowance	[1]	$ 27	$ 8	$ 45	$ 27
Operating Loss Carryforwards [Line Items]
Income tax (benefit) provision		$ 13	$ 10	23	$ 20
Deferred income tax provision following an operating company realignment [Member]
Operating Loss Carryforwards [Line Items]
Income tax (benefit) provision				$ 36

[1] We recorded a valuation allowance of $27 million and $8 million for the three months ended June 30, 2016 and 2015, respectively, and $45 million and $27 million for the six months ended June 30, 2016 and 2015, respectively, primarily related to our U.S. operations where we recognize a full valuation allowance against our net deferred income tax assets.

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Commitments and Contingencies (Details) CAD in Millions			6 Months Ended
	Oct. 30, 2014 USD ($)	Oct. 30, 2014 CAD	Jun. 30, 2016 USD ($) site	Jun. 30, 2016 CAD site	Jun. 30, 2016 CAD	Dec. 31, 2015 USD ($)	Aug. 03, 2015	Jul. 31, 2012
Loss Contingencies [Line Items]
Subsidy rate on supercalendered paper exports			17.87%		17.87%		2.04%
Accumulated cash deposits on supercalendered paper exports			$ 16,000,000
Maximum deficit from partial wind-up of pension plans to be funded			$ 115,000,000	CAD 150
Request of repayment of conditional incentive	$ 18,000,000	CAD 23
Environmental Remediation Obligations [Abstract]
Number of hazardous waste sites | site			4	4
Environmental liabilities			$ 9,000,000			$ 12,000,000
Asset retirement obligations			22,000,000			$ 23,000,000
Countervailing Duty Investigation [Member]
Loss Contingencies [Line Items]
Contingent loss recorded			0
Conditional Incentive Noncompliance [Member]
Loss Contingencies [Line Items]
Contingency liability recorded			0
Fibrek [Member]
Loss Contingencies [Line Items]
Percentage of outstanding shares acquired								25.40%
Amount paid, contingent consideration, business combination			0
Amount accrued to be contingently distributed			11,000,000		CAD 14
Maximum [Member]
Loss Contingencies [Line Items]
Yearly cash deposits made on supercalendered paper exports			$ 25,000,000

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Share Capital Share Capital (Details) - USD ($) shares in Millions, $ in Millions		3 Months Ended		6 Months Ended
	May 28, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	May 22, 2012
Equity [Abstract]
Share repurchase program, authorized amount, increase	$ 50
Share repurchase program, authorized amount						$ 100
Share repurchase program, shares, repurchased		0.0	3.2	0.0	3.2
Share repurchase program, cost, repurchased			$ 37		$ 37
Share repurchase program, remaining authorized repurchase amount		$ 24		$ 24

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Segment Information - Schedule of Segment Reporting Information (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting Information [Line Items]
Sales		$ 891	$ 926	$ 1,768	$ 1,846
Depreciation and amortization	[1]	54	60	106	117
Operating income (loss)		(18)	16	(18)	1
Market Pulp [Member]
Segment Reporting Information [Line Items]
Sales	[2]	210	231	421	449
Depreciation and amortization	[1],[2]	11	12	18	26
Operating income (loss)	[2]	12	26	32	37
Tissue [Member]
Segment Reporting Information [Line Items]
Sales		24	0	47	0
Depreciation and amortization	[1]	2	0	4	0
Operating income (loss)		(4)	0	(6)	0
Wood Products [Member]
Segment Reporting Information [Line Items]
Sales	[3]	145	134	264	273
Depreciation and amortization	[1],[3]	9	9	16	17
Operating income (loss)	[3]	20	(4)	16	1
Newsprint [Member]
Segment Reporting Information [Line Items]
Sales		257	289	514	580
Depreciation and amortization	[1]	19	16	39	32
Operating income (loss)		(3)	3	(8)	0
Specialty Papers [Member]
Segment Reporting Information [Line Items]
Sales		255	272	522	544
Depreciation and amortization	[1]	10	19	23	36
Operating income (loss)		16	17	23	22
Segment Total [Member]
Segment Reporting Information [Line Items]
Sales		891	926	1,768	1,846
Depreciation and amortization	[1]	51	56	100	111
Operating income (loss)		41	42	57	60
Corporate and Other [Member]
Segment Reporting Information [Line Items]
Sales		0	0	0	0
Depreciation and amortization	[1]	3	4	6	6
Operating income (loss)		(59)	$ (26)	(75)	$ (59)
Scenario, Adjustment [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization		(3)		(6)
Scenario, Adjustment [Member] | Market Pulp [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization		(4)		(10)
Scenario, Adjustment [Member] | Tissue [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization		0		0
Scenario, Adjustment [Member] | Wood Products [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization		(3)		(6)
Scenario, Adjustment [Member] | Newsprint [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization		6		12
Scenario, Adjustment [Member] | Specialty Papers [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization		(2)		(2)
Scenario, Adjustment [Member] | Segment Total [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization		$ (3)		$ (6)

[1] As discussed in Note 1, “Organization and Basis of Presentation,” we changed our estimate of the useful lives of certain of our machinery and equipment to reflect a net increase of estimated periods during which these assets will remain in service. The effect of this change in estimate was to (decrease) increase “Depreciation and amortization” by reportable segment for the three and six months ended June 30, 2016 as follows:(Unaudited, in millions)Market PulpTissueWood ProductsNewsprintSpecialtyPapersTotalSecond quarter 2016$(4) $— $(3) $6 $(2) $(3) First six months 2016 (10) — (6) 12 (2) (6)

[2] Market pulp sales excluded inter-segment sales of $10 million and $5 million for the three months ended June 30, 2016 and 2015, respectively, and $15 million and $8 million for the six months ended June 30, 2016 and 2015, respectively, which are transacted at cost.

[3] Wood products sales to our joint ventures, which are transacted at arm’s length negotiated prices, were $5 million for both the three months ended June 30, 2016 and 2015, and $10 million and $9 million for the six months ended June 30, 2016 and 2015, respectively.

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Segment Information - Schedule of Segment Reporting Information - Additional Information (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting Information [Line Items]
Sales		$ 891	$ 926	$ 1,768	$ 1,846
Joint venture sales		5	5	10	9
Market Pulp [Member]
Segment Reporting Information [Line Items]
Sales	[1]	210	231	421	449
Market Pulp [Member] | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Sales		$ 10	$ 5	$ 15	$ 8

[1] Market pulp sales excluded inter-segment sales of $10 million and $5 million for the three months ended June 30, 2016 and 2015, respectively, and $15 million and $8 million for the six months ended June 30, 2016 and 2015, respectively, which are transacted at cost.

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Condensed Consolidating Financial Information - Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Condensed Financial Statements, Captions [Line Items]
Sales		$ 891	$ 926	$ 1,768	$ 1,846
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		668	692	1,345	1,410
Depreciation and amortization	[1]	54	60	106	117
Distribution costs		110	118	222	231
Selling, general and administrative expenses		40	40	78	81
Closure costs, impairment and other related charges		37	0	37	6
Net gain on disposition of assets		0	0	(2)	0
Operating income (loss)		(18)	16	(18)	1
Interest expense		(9)	(11)	(19)	(23)
Other income (expense), net		0	1	13	6
Equity in income (loss) of subsidiaries		0	0	0	0
Income (loss) before income taxes		(27)	6	(24)	(16)
Income tax benefit (provision)		(13)	(10)	(23)	(20)
Net income (loss) including noncontrolling interests		(40)	(4)	(47)	(36)
Net (income) loss attributable to noncontrolling interests		(2)	0	(3)	(1)
Net income (loss) attributable to Resolute Forest Products Inc.		(42)	(4)	(50)	(37)
Comprehensive income (loss) attributable to Resolute Forest Products Inc.		(36)	7	(39)	(16)
Parent [Member]
Condensed Financial Statements, Captions [Line Items]
Sales		0	0	0	0
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		0	0	0	0
Depreciation and amortization		0	0	0	0
Distribution costs		0	0	0	0
Selling, general and administrative expenses		5	3	10	6
Closure costs, impairment and other related charges		0		0	0
Net gain on disposition of assets				0
Operating income (loss)		(5)	(3)	(10)	(6)
Interest expense		(21)	(18)	(39)	(36)
Other income (expense), net		0	0	0	(1)
Equity in income (loss) of subsidiaries		(16)	17	(1)	6
Income (loss) before income taxes		(42)	(4)	(50)	(37)
Income tax benefit (provision)		0	0	0	0
Net income (loss) including noncontrolling interests		(42)	(4)	(50)	(37)
Net (income) loss attributable to noncontrolling interests		0	0	0	0
Net income (loss) attributable to Resolute Forest Products Inc.		(42)	(4)	(50)	(37)
Comprehensive income (loss) attributable to Resolute Forest Products Inc.		(36)	7	(39)	(16)
Guarantor Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Sales		730	747	1,471	1,498
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		678	676	1,383	1,380
Depreciation and amortization		21	23	43	46
Distribution costs		40	41	83	82
Selling, general and administrative expenses		16	14	32	26
Closure costs, impairment and other related charges		37		37	0
Net gain on disposition of assets				0
Operating income (loss)		(62)	(7)	(107)	(36)
Interest expense		0	(1)	0	(2)
Other income (expense), net		16	9	35	21
Equity in income (loss) of subsidiaries		(9)	0	(22)	0
Income (loss) before income taxes		(55)	1	(94)	(17)
Income tax benefit (provision)		(1)	0	(1)	4
Net income (loss) including noncontrolling interests		(56)	1	(95)	(13)
Net (income) loss attributable to noncontrolling interests		0	0	0	0
Net income (loss) attributable to Resolute Forest Products Inc.		(56)	1	(95)	(13)
Comprehensive income (loss) attributable to Resolute Forest Products Inc.		(59)	1	(101)	(13)
Non-Guarantor Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Sales		537	559	1,053	1,140
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		365	397	718	821
Depreciation and amortization		33	37	63	71
Distribution costs		70	76	139	149
Selling, general and administrative expenses		19	23	36	49
Closure costs, impairment and other related charges		0		0	6
Net gain on disposition of assets				(2)
Operating income (loss)		50	26	99	44
Interest expense		(2)	(2)	(6)	(4)
Other income (expense), net		(2)	2	4	5
Equity in income (loss) of subsidiaries		0	0	0	0
Income (loss) before income taxes		46	26	97	45
Income tax benefit (provision)		(12)	(10)	(22)	(24)
Net income (loss) including noncontrolling interests		34	16	75	21
Net (income) loss attributable to noncontrolling interests		(2)	0	(3)	(1)
Net income (loss) attributable to Resolute Forest Products Inc.		32	16	72	20
Comprehensive income (loss) attributable to Resolute Forest Products Inc.		41	27	89	41
Consolidating Adjustments [Member]
Condensed Financial Statements, Captions [Line Items]
Sales		(376)	(380)	(756)	(792)
Costs and expenses:
Cost of sales, excluding depreciation, amortization and distribution costs		(375)	(381)	(756)	(791)
Depreciation and amortization		0	0	0	0
Distribution costs		0	1	0	0
Selling, general and administrative expenses		0	0	0	0
Closure costs, impairment and other related charges		0		0	0
Net gain on disposition of assets				0
Operating income (loss)		(1)	0	0	(1)
Interest expense		14	10	26	19
Other income (expense), net		(14)	(10)	(26)	(19)
Equity in income (loss) of subsidiaries		25	(17)	23	(6)
Income (loss) before income taxes		24	(17)	23	(7)
Income tax benefit (provision)		0	0	0	0
Net income (loss) including noncontrolling interests		24	(17)	23	(7)
Net (income) loss attributable to noncontrolling interests		0	0	0	0
Net income (loss) attributable to Resolute Forest Products Inc.		24	(17)	23	(7)
Comprehensive income (loss) attributable to Resolute Forest Products Inc.		$ 18	$ (28)	$ 12	$ (28)

[1] As discussed in Note 1, “Organization and Basis of Presentation,” we changed our estimate of the useful lives of certain of our machinery and equipment to reflect a net increase of estimated periods during which these assets will remain in service. The effect of this change in estimate was to (decrease) increase “Depreciation and amortization” by reportable segment for the three and six months ended June 30, 2016 as follows:(Unaudited, in millions)Market PulpTissueWood ProductsNewsprintSpecialtyPapersTotalSecond quarter 2016$(4) $— $(3) $6 $(2) $(3) First six months 2016 (10) — (6) 12 (2) (6)

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Condensed Consolidating Financial Information - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 40	$ 58	$ 303	$ 337
Accounts receivable, net	451	469
Accounts receivable from affiliates	0	0
Inventories, net	547	541
Note, advance and interest receivable from parent	0	0
Notes and interest receivable from affiliates	0	0
Other current assets	48	43
Total current assets	1,086	1,111
Fixed assets, net	1,801	1,810
Amortizable intangible assets, net	101	105
Goodwill	61	59
Deferred income tax assets	1,025	982
Notes receivable from parent	0	0
Notes receivable from affiliates	0	0
Investments in consolidated subsidiaries and affiliates	0	0
Other assets	171	153
Total assets	4,245	4,220
Current liabilities:
Accounts payable and accrued liabilities	473	436
Current portion of long-term debt	1	1
Accounts payable to affiliates	0	0
Note, advance and interest payable to subsidiaries	0	0
Notes and interest payable to affiliates	0	0
Total current liabilities	474	437
Long-term debt, net of current portion	610	590
Notes payable to subsidiaries	0	0
Notes payable to affiliates	0	0
Pension and other postretirement benefit obligations	1,188	1,186
Deferred income tax liabilities	2	2
Other liabilities	56	60
Total liabilities	2,330	2,275
Total equity	1,915	1,945	2,073	2,117
Total liabilities and equity	4,245	4,220
Parent [Member]
Current assets:
Cash and cash equivalents	0	0	0	0
Accounts receivable, net	0	0
Accounts receivable from affiliates	0	0
Inventories, net	0	0
Note, advance and interest receivable from parent	0	0
Notes and interest receivable from affiliates	0	0
Other current assets	0	0
Total current assets	0	0
Fixed assets, net	0	0
Amortizable intangible assets, net	0	0
Goodwill	0	0
Deferred income tax assets	0	0
Notes receivable from parent	0	0
Notes receivable from affiliates	0	0
Investments in consolidated subsidiaries and affiliates	4,077	4,067
Other assets	0	0
Total assets	4,077	4,067
Current liabilities:
Accounts payable and accrued liabilities	4	5
Current portion of long-term debt	0	0
Accounts payable to affiliates	455	433
Note, advance and interest payable to subsidiaries	366	62
Notes and interest payable to affiliates	0	0
Total current liabilities	825	500
Long-term debt, net of current portion	590	589
Notes payable to subsidiaries	428	710
Notes payable to affiliates	0	0
Pension and other postretirement benefit obligations	0	0
Deferred income tax liabilities	0	0
Other liabilities	0	1
Total liabilities	1,843	1,800
Total equity	2,234	2,267
Total liabilities and equity	4,077	4,067
Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents	6	13	261	257
Accounts receivable, net	310	323
Accounts receivable from affiliates	455	421
Inventories, net	255	257
Note, advance and interest receivable from parent	366	62
Notes and interest receivable from affiliates	49	48
Other current assets	34	21
Total current assets	1,475	1,145
Fixed assets, net	649	629
Amortizable intangible assets, net	44	46
Goodwill	61	59
Deferred income tax assets	0	0
Notes receivable from parent	428	710
Notes receivable from affiliates	113	105
Investments in consolidated subsidiaries and affiliates	2,025	2,047
Other assets	54	48
Total assets	4,849	4,789
Current liabilities:
Accounts payable and accrued liabilities	218	189
Current portion of long-term debt	1	1
Accounts payable to affiliates	381	260
Note, advance and interest payable to subsidiaries	0	0
Notes and interest payable to affiliates	0	0
Total current liabilities	600	450
Long-term debt, net of current portion	20	1
Notes payable to subsidiaries	0	0
Notes payable to affiliates	0	0
Pension and other postretirement benefit obligations	343	352
Deferred income tax liabilities	1	0
Other liabilities	24	24
Total liabilities	988	827
Total equity	3,861	3,962
Total liabilities and equity	4,849	4,789
Non-Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents	34	45	42	80
Accounts receivable, net	141	146
Accounts receivable from affiliates	381	272
Inventories, net	298	290
Note, advance and interest receivable from parent	0	0
Notes and interest receivable from affiliates	0	0
Other current assets	14	22
Total current assets	868	775
Fixed assets, net	1,152	1,181
Amortizable intangible assets, net	57	59
Goodwill	0	0
Deferred income tax assets	1,024	981
Notes receivable from parent	0	0
Notes receivable from affiliates	0	0
Investments in consolidated subsidiaries and affiliates	0	0
Other assets	117	105
Total assets	3,218	3,101
Current liabilities:
Accounts payable and accrued liabilities	251	242
Current portion of long-term debt	0	0
Accounts payable to affiliates	0	0
Note, advance and interest payable to subsidiaries	0	0
Notes and interest payable to affiliates	49	48
Total current liabilities	300	290
Long-term debt, net of current portion	0	0
Notes payable to subsidiaries	0	0
Notes payable to affiliates	113	105
Pension and other postretirement benefit obligations	845	834
Deferred income tax liabilities	1	2
Other liabilities	32	35
Total liabilities	1,291	1,266
Total equity	1,927	1,835
Total liabilities and equity	3,218	3,101
Consolidating Adjustments [Member]
Current assets:
Cash and cash equivalents	0	0	$ 0	$ 0
Accounts receivable, net	0	0
Accounts receivable from affiliates	(836)	(693)
Inventories, net	(6)	(6)
Note, advance and interest receivable from parent	(366)	(62)
Notes and interest receivable from affiliates	(49)	(48)
Other current assets	0	0
Total current assets	(1,257)	(809)
Fixed assets, net	0	0
Amortizable intangible assets, net	0	0
Goodwill	0	0
Deferred income tax assets	1	1
Notes receivable from parent	(428)	(710)
Notes receivable from affiliates	(113)	(105)
Investments in consolidated subsidiaries and affiliates	(6,102)	(6,114)
Other assets	0	0
Total assets	(7,899)	(7,737)
Current liabilities:
Accounts payable and accrued liabilities	0	0
Current portion of long-term debt	0	0
Accounts payable to affiliates	(836)	(693)
Note, advance and interest payable to subsidiaries	(366)	(62)
Notes and interest payable to affiliates	(49)	(48)
Total current liabilities	(1,251)	(803)
Long-term debt, net of current portion	0	0
Notes payable to subsidiaries	(428)	(710)
Notes payable to affiliates	(113)	(105)
Pension and other postretirement benefit obligations	0	0
Deferred income tax liabilities	0	0
Other liabilities	0	0
Total liabilities	(1,792)	(1,618)
Total equity	(6,107)	(6,119)
Total liabilities and equity	$ (7,899)	$ (7,737)

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Condensed Consolidating Financial Information - Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	$ 69	$ 90
Cash flows from investing activities:
Cash invested in fixed assets	(99)	(79)
Disposition of assets	5	0
Increase in countervailing duty cash deposits	(12)	0
Decrease (increase) in deposit requirements for letters of credit, net	(1)	(4)
Increase (decrease) of notes receivable from affiliates	0
Advance to parent		0
Net cash provided by (used in) investing activities	(107)	(83)
Cash flows from financing activities:
Borrowings under revolving credit facility	20	0
Payments of debt	(1)	0
Increase (decrease) of notes payable to affiliates	0
Payments of financing and credit facility fees	0	(3)
Purchases of treasury stock	0	(37)
Advance from subsidiary		0
Net cash provided by (used in) financing activities	19	(40)
Effect of exchange rate changes on cash and cash equivalents	1	(1)
Net increase (decrease) in cash and cash equivalents	(18)	(34)
Cash and cash equivalents:
Beginning of period	58	337
End of period	40	303
Parent [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	0	0
Cash flows from investing activities:
Cash invested in fixed assets	0	0
Disposition of assets	0
Increase in countervailing duty cash deposits	0
Decrease (increase) in deposit requirements for letters of credit, net	0	0
Increase (decrease) of notes receivable from affiliates	0
Advance to parent		0
Net cash provided by (used in) investing activities	0	0
Cash flows from financing activities:
Borrowings under revolving credit facility	0
Payments of debt	0
Increase (decrease) of notes payable to affiliates	0
Payments of financing and credit facility fees		0
Purchases of treasury stock		(37)
Advance from subsidiary		37
Net cash provided by (used in) financing activities	0	0
Effect of exchange rate changes on cash and cash equivalents	0	0
Net increase (decrease) in cash and cash equivalents	0	0
Cash and cash equivalents:
Beginning of period	0	0
End of period	0	0
Guarantor Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	56	80
Cash flows from investing activities:
Cash invested in fixed assets	(67)	(37)
Disposition of assets	0
Increase in countervailing duty cash deposits	(12)
Decrease (increase) in deposit requirements for letters of credit, net	0	0
Increase (decrease) of notes receivable from affiliates	(3)
Advance to parent		(37)
Net cash provided by (used in) investing activities	(82)	(74)
Cash flows from financing activities:
Borrowings under revolving credit facility	20
Payments of debt	(1)
Increase (decrease) of notes payable to affiliates	0
Payments of financing and credit facility fees		(2)
Purchases of treasury stock		0
Advance from subsidiary		0
Net cash provided by (used in) financing activities	19	(2)
Effect of exchange rate changes on cash and cash equivalents	0	0
Net increase (decrease) in cash and cash equivalents	(7)	4
Cash and cash equivalents:
Beginning of period	13	257
End of period	6	261
Non-Guarantor Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	13	10
Cash flows from investing activities:
Cash invested in fixed assets	(32)	(42)
Disposition of assets	5
Increase in countervailing duty cash deposits	0
Decrease (increase) in deposit requirements for letters of credit, net	(1)	(4)
Increase (decrease) of notes receivable from affiliates	0
Advance to parent		0
Net cash provided by (used in) investing activities	(28)	(46)
Cash flows from financing activities:
Borrowings under revolving credit facility	0
Payments of debt	0
Increase (decrease) of notes payable to affiliates	3
Payments of financing and credit facility fees		(1)
Purchases of treasury stock		0
Advance from subsidiary		0
Net cash provided by (used in) financing activities	3	(1)
Effect of exchange rate changes on cash and cash equivalents	1	(1)
Net increase (decrease) in cash and cash equivalents	(11)	(38)
Cash and cash equivalents:
Beginning of period	45	80
End of period	34	42
Consolidating Adjustments [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	0	0
Cash flows from investing activities:
Cash invested in fixed assets	0	0
Disposition of assets	0
Increase in countervailing duty cash deposits	0
Decrease (increase) in deposit requirements for letters of credit, net	0	0
Increase (decrease) of notes receivable from affiliates	3
Advance to parent		37
Net cash provided by (used in) investing activities	3	37
Cash flows from financing activities:
Borrowings under revolving credit facility	0
Payments of debt	0
Increase (decrease) of notes payable to affiliates	(3)
Payments of financing and credit facility fees		0
Purchases of treasury stock		0
Advance from subsidiary		(37)
Net cash provided by (used in) financing activities	(3)	(37)
Effect of exchange rate changes on cash and cash equivalents	0	0
Net increase (decrease) in cash and cash equivalents	0	0
Cash and cash equivalents:
Beginning of period	0	0
End of period	$ 0	$ 0

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Condensed Consolidated Financial Information - Additional Information (Details)	6 Months Ended
	Jun. 30, 2016
Guarantor Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Percentage owned of material U.S. subsidiaries	100.00%