Resolute Forest Products (RFP) has recently been decimated in the markets, and now appears attractively valued by many metrics. One of the largest overhangs on shares remains the $1.5B in unfunded pension obligations currently sitting on their balance sheet. To better understand these amounts, I’ve dug into their public filings to clarify how these obligations are expected to move over time.
Assumptions
I have generally used the assumptions in Resolute's annual report: 6.5% expected return on assets, 3% discount rate, and the benefit payment amounts provided. I've shown service costs decreasing 25% each