THUNDER BAY – Business – Resolute Forest Products and CEP are seeking a deal on pension fund solvency. Workers at Resolute Forest Products mills in Ontario and Quebec today demanded that Quebec’s pension regulator, the Régie des rentes, and the company reach an agreement to resolve the solvency deficit in the pension plan without any cuts to benefits.
Resolute Forest Products and CEP Agree on Pension
“The company and the Régie must work out a plan in the coming weeks to solve the funding problem for the pension plan. Our members sent a strong message today that we will not agree to any cuts in pension benefits,” said Communications, Energy and Paperworkers Union President Dave Coles.
CEP local union delegates from 10 Resolute mills met in Montreal today to review developments with the company’s traditional defined benefit plan covering about 3,500 active employees and 25,000 retirees.
Under the terms of an agreement with the Régie des rentes, the company is obligated to increase its special payments after the solvency ratio for the plan fell in 2011. The company and the pension regulator are currently holding discussions on “corrective measures” to cover a more than $500 million additional deficit, on top of the $1.3 billion pension deficit that the former AbitibiBowater owed when it emerged from bankruptcy protection in 2010.
“The company and the Régie must remember that workers gave up wages and benefits on the understanding that the company would be responsible for the traditional plan without cuts to benefits,” said Coles.” And we also established a new pension plan for the future which eliminates any risk for the company.
“Resolute and the Régie both have a responsibility now to find a solution that maintains the long-term commitments to our members and retirees.”
Resolute Forest Products Financial Report
On February 12, 2013, Resolute Forest Products Inc. reported a net loss of $2 million for the year ended December 31, 2012, or $0.02 per share, on sales of $4.5 billion. This compares with net income of $41 million, or $0.42 per diluted share, on sales of $4.8 billion in the year ended December 31, 2011. Net loss in the fourth quarter of 2012 was $36 million, or $0.38 per share, on sales of $1.1 billion, compared with a net loss of $6 million, or $0.06 per share, on sales of $1.1 billion in the fourth quarter of 2011.
Excluding $81 million of special items, net income for the full year was $79 million, or $0.81 per diluted share. Excluding special items of $70 million, net income in the fourth quarter was $34 million, or $0.35 per diluted share. For the full year 2011, net income excluding special items was $166 million, or $1.71 per diluted share, and $45 million, or $0.46 per diluted share, in the fourth quarter 2011. All special items and non-GAAP financial measures, such as adjustments for special items and adjusted EBITDA, are described and reconciled below.
“We significantly improved the Company’s competitiveness by optimizing our asset base, reducing costs wherever possible and strengthening our financial position this year,” said Richard Garneau, president and chief executive officer. “We added pulp assets, committed to growth projects in lumber, invested in power cogeneration plants and further optimized our paper assets, steps that will position us well for the future. At the same time, we returned $67 million to our shareholders in share buybacks, reduced balance sheet working capital by a further $81 million from the end of 2011 and redeemed an additional $85 million of debt.”