Note: Financial references in US dollars unless otherwise
indicated.
Q3 2018 HIGHLIGHTS
- Adjusted EBITDA of $211
million, a 6% increase year-over-year
- Adjusted earnings of $1.41 per
diluted share
- European EBITDA increased 64% year-over-year to $23 million
- Declared dividend of C $0.60
per share for shareholders of record on December 1, 2018
- Renewed Normal Course Issuer Bid
TORONTO, Nov. 1, 2018 /CNW/ - Norbord Inc. (TSX and
NYSE: OSB) today reported Adjusted EBITDA of $211 million for the third quarter of 2018 versus
$200 million in the third quarter of
2017 and $273 million in the second
quarter of 2018. The year-over-year improvement is primarily due to
higher European panel prices and North American shipment volumes,
while the quarter-over-quarter decrease is due to lower North
American oriented strand board (OSB) prices. North American
operations generated Adjusted EBITDA of $190
million compared to $184
million in the same quarter last year and $256 million in the prior quarter. European
operations delivered Adjusted EBITDA of $23
million versus $14 million in
same quarter last year and $21
million in the prior quarter.
"Our third quarter results reflect another excellent quarter for
Norbord," said Peter Wijnbergen, Norbord's President and CEO. "We
generated $211 million in Adjusted
EBITDA, a 6% improvement over this time last year as North American
OSB demand remained strong during the summer homebuilding season.
Our European business had another outstanding quarter, delivering
$23 million of Adjusted EBITDA as
robust demand growth in our key markets supported strong
prices."
"There has been a noticeable shift in US housing sentiment in
the past few weeks that has put significant negative pressure on
the broader wood products sector and North American OSB prices.
While recent housing headlines have been mixed, we share the view
of housing economists who believe this is a temporary pause in
housing demand growth rather than a directional change. Housing
fundamentals remain supportive and experts continue to forecast new
home construction growth for next year. Combined with continued
growth in our North American specialty sales and European panel
business, we believe Norbord is well positioned to manage through
this period of volatility."
Norbord recorded Adjusted earnings of $123 million or $1.41 per diluted share ($1.42 per basic share) in the third quarter of
2018 versus $121 million or
$1.39 per diluted share ($1.40 per basic share) in the third quarter of
2017 and $167 million or $1.92 per diluted share ($1.93 per basic share) in the second quarter of
2018. Adjusted earnings exclude non-recurring or other items and
use a normalized income tax rate:
$
millions
|
Q3
2018
|
Q2
2018
|
Q3
2017
|
9
mos
2018
|
9 mos
2017
|
Earnings
|
130
|
174
|
130
|
399
|
276
|
Adjusted
for:
|
|
|
|
|
|
Loss on disposal of
assets
|
-
|
-
|
2
|
-
|
9
|
Stock-based
compensation and related costs
|
2
|
1
|
1
|
4
|
3
|
Costs related to
Inverness expansion project
|
-
|
-
|
1
|
-
|
1
|
Reported income tax
expense
|
37
|
53
|
32
|
126
|
75
|
Adjusted pre-tax
earnings
|
169
|
228
|
166
|
529
|
364
|
Income tax expense at
statutory rate
|
(46)
|
(61)
|
(45)
|
(143)
|
(98)
|
Adjusted
earnings
|
123
|
167
|
121
|
386
|
266
|
Market Conditions
In North America, year-to-date
US housing starts were up 6% versus the same period in 2017, with
single-family starts, which use approximately three times more OSB
than multifamily, also increasing by 6%. The consensus forecast
from US housing economists is for approximately 1.28 million starts
in 2018, which suggests a 7% year-over-year improvement.
North American benchmark OSB prices in all regions began pulling
back in July after reaching exceptionally high levels in June. As a
result, average benchmark prices were lower than both the prior
quarter and the same quarter last year. The table below summarizes
average benchmark prices ($ per Msf, 7/16-inch basis) by region for
the relevant quarters:
North American
region
|
% of
Norbord's
operating
capacity
|
Q3
2018
|
Q2 2018
|
Q3 2017
|
North
Central
|
14%
|
363
|
426
|
409
|
South East
|
38%
|
305
|
419
|
354
|
Western
Canada
|
30%
|
281
|
403
|
388
|
In Europe, panel markets
continued to strengthen, driven by robust OSB demand growth in
Norbord's core markets. In local currency terms, average panel
prices were up 24% versus the same quarter last year and up 3% from
the prior quarter.
Performance
North American OSB shipments increased 10% year-over-year and 1%
quarter-over-quarter reflecting the restart of the Huguley, Alabama mill in the fourth quarter of
2017. Norbord's specialty sales volume (including industrial
applications and export markets) continued to increase and
represents approximately 25% of the Company's North American OSB
sales volume.
Excluding the curtailed Chambord,
Quebec mill, Norbord's operating North American OSB mills
produced at 99% of stated capacity, compared to 97% in the same
quarter last year and 98% in the prior quarter. Capacity
utilization increased versus both comparative periods due to
improved productivity. Year-over-year, capacity utilization was
also impacted by weather-related curtailments in the prior
year.
Norbord's North American OSB cash production costs per unit
(before mill profit share and freight costs) increased 1% compared
to the same quarter last year due to higher resin prices and
maintenance-related costs, partially offset by the ramp-up of the
Huguley, Alabama mill. Unit costs
decreased 1% versus the prior quarter due to improved raw material
usage.
In Europe, Norbord's shipments
were 1% lower than the same quarter last year and 5% higher than
the prior quarter due to shipment timing. The European mills
produced at 87% of stated capacity in the quarter compared to 100%
in the same quarter last year and 89% in the prior quarter.
Capacity utilization decreased year-over-year due to the restated
annual production capacity to reflect the new OSB continuous press
line at the Inverness, Scotland
mill that was substantially completed in the fourth quarter of
2017. Production from the expanded Inverness mill will not significantly increase
until 2019 when the new finishing line installation and
commissioning are complete. Quarter-over-quarter, capacity
utilization declined due to the timing of annual maintenance
shuts.
Year-to-date, the Company generated $2
million of Margin Improvement Program (MIP) gains due to a
richer product mix, improved productivity and the timing of planned
annual maintenance shuts and related costs, partially offset by
costs associated with executing on strategic initiatives. MIP is
measured relative to the prior year at constant prices and exchange
rates.
Capital investments were $41
million (including intangible assets) in the third quarter
and $145 million year-to-date.
Norbord's 2018 capital expenditures are forecast
at approximately $200 million,
including the Inverness, Scotland
finishing line, Chambord, Quebec
rebuild, Grande Prairie, Alberta
debottlenecking and preliminary engineering for the Huguley, Alabama woodroom projects (as
described below), as well as other projects focused on reducing
manufacturing costs and increasing productivity across the mills.
In addition, it includes investments to support the Company's
strategy to increase the production of specialty products for
industrial and export markets.
Included in the year-to-date capital investments is $9 million for the Inverness, Scotland mill modernization and
expansion project. Installation of the new finishing end will be
completed during the fourth quarter of 2018. Total capital spending
to-date for the project is $143
million. The project cost is expected to total $145 million, 7% above the $135 million budget due to significant
fluctuations in the relative values of the Pound Sterling, Euro and
US dollar currencies over the two-year life of the project.
Also included in the year-to-date capital investments is
$41 million for the Grande Prairie, Alberta debottlenecking
project. The Grande Prairie mill
is one of the largest single-line OSB facilities in the world, but
the mill is currently bottlenecked in the areas before the forming
line and press. The Company is undertaking a project to redeploy
the wood handling, heat energy and drying equipment from the
unfinished and unused second production line to debottleneck the
existing first line. Upon completion in the fourth quarter of 2018,
the mill's production capacity is expected to increase by 100 MMsf
(3/8-inch basis) to support growing demand from key customers.
Further savings are expected to be realized through reduced wood
and natural gas usage. The project is budgeted at $55 million.
Also included in the year-to-date capital investments is
$11 million for the Chambord, Quebec mill rebuild project. Norbord
believes North American OSB demand will continue to grow. In order
to support this anticipated growth, Norbord is rebuilding and
preparing the Chambord, Quebec
mill for an eventual restart. The Company has not set a restart
date, however, and will only do so when it is sufficiently clear
that customers require more product. This project involves
replacing the dryers and investing in the wood-handling and
finishing end areas to debottleneck the mill's manufacturing
process and reduce manufacturing costs, as well as upgrades in
process and personal safety systems, electrical systems and
environmental equipment to bring the mill up to current standards
after a decade of curtailment. Once complete, the investment is
expected to increase the mill's stated annual production capacity
by 80 MMsf, from 470 MMsf to 550 MMsf (3/8-inch basis). The project
is budgeted at $71 million.
Norbord has begun preliminary engineering work to plan for the
rebuild and automation of the wood-handling section of the
Huguley, Alabama mill. A similar
project was undertaken at the sister Joanna, South Carolina mill in 2014, which
enabled a capacity increase of 150 MMsf (3/8-inch basis) from
debottlenecking the continuous press production line. Capital
spending of less than $1 million was
invested in the quarter.
Looking ahead to next year's capital expenditures, while the
Company is still in the process of finalizing its capital plans,
2019 capital expenditures are targeted at approximately
$150 million.
Operating working capital was $173
million at quarter-end compared to $156 million at the end of the same quarter last
year and $212 million at the end of
the prior quarter. The year-over-year increase is primarily due to
inventories attributable to the new Inverness line and restarted Huguley mill, partially offset by the accounts
receivable impact of lower North American OSB prices. The
quarter-over-quarter decrease is primarily due to lower North
American OSB prices, the seasonal log inventory drawdown in the
northern mills in North America,
higher profit share accruals attributed to higher year-to-date
earnings and the timing of interest payments on the Company's
senior secured notes. Working capital continues to be managed at
minimal levels across the Company.
At quarter-end, Norbord had unutilized liquidity of $548 million, consisting of $193 million in cash and $355 million in unused credit lines. The
Company's tangible net worth was $1,278
million and net debt to total capitalization on a book basis
was 23%, with both ratios well within bank covenants.
Dividend
The Board of Directors declared a quarterly dividend of C
$0.60 per common share, payable on
December 21, 2018 to shareholders of
record on December 1, 2018. Any
dividends reinvested on December 21,
2018 under the Company's Dividend Reinvestment Plan will be
used by the transfer agent to purchase common shares on the open
market.
Norbord's dividends are declared in Canadian dollars. Registered
and beneficial shareholders may opt to receive their dividends in
either Canadian dollars or the US dollar equivalent. Unless they
request the US dollar equivalent, shareholders will receive
dividends in Canadian dollars. The US dollar equivalent of the
dividend will be based on the Bloomberg FX Fixings Service (BFIX)
noon exchange rate on the record date or, if the record date falls
on a weekend or holiday, on the BFIX noon exchange rate of the
preceding business day.
Registered shareholders wishing to receive the US dollar
dividend equivalent should contact Norbord's transfer agent, AST
Trust Company (Canada), by phone
at 1-800-387-0825 or by email at inquiries@canstockta.com.
Beneficial shareholders (i.e., those holding their Norbord shares
with their brokerage) should contact the broker with whom their
shares are held.
Norbord's variable dividend policy targets the payment to
shareholders of a portion of free cash flow based upon the
Company's financial position, results of operations, cash flow,
capital requirements and restrictions under the Company's revolving
bank lines, as well as the market outlook for the Company's
principal products and broader market and economic conditions,
among other factors. The Board retains the discretion to amend the
Company's dividend policy in any manner and at any time as it may
deem necessary or appropriate in the future. For these reasons, as
well as others, the Board in its sole discretion can decide to
increase, maintain, decrease, suspend or discontinue the payment of
cash dividends in the future.
Normal Course Issuer Bid
Norbord also announced today that the Toronto Stock Exchange
(TSX) has accepted its notice of intention to renew its normal
course issuer bid in accordance with TSX rules. Under the bid,
Norbord may purchase up to 5,191,965 of its common shares,
representing 10% of the Company's public float of 51,919,654 as of
October 22, 2018, pursuant to TSX
rules (a total of 86,848,396 Common Shares were issued and
outstanding as of such date).
Purchases under the bid may commence on November 5, 2018, and will terminate on the
earlier of November 4, 2019, the date
Norbord completes its purchases pursuant to the notice of intention
to make a normal course issuer bid filed with the TSX or the date
of notice by Norbord of termination of the bid. Purchases will be
made on the open market by Norbord through the facilities of the
TSX, the New York Stock Exchange or Canadian or US alternative
trading systems, if eligible, in accordance with the requirements
of the TSX and applicable securities laws. The price that Norbord
will pay for any such common shares will be the market price of
such shares at the time of acquisition. Common shares purchased
under the bid will be cancelled. Norbord's average daily trading
volume on the TSX during the last six calendar months was 318,819
common shares. Daily purchases of common shares will not
exceed 79,704 subject to the Company's ability to make "block"
purchases under the rules of the TSX. Under its prior bid that
commenced on November 3, 2017 and
expires on November 2, 2018, Norbord
previously sought and received approval from the TSX to repurchase
up to 5,142,773 common shares. Norbord did not acquire any common
shares under such bid in the past 12 months.
Norbord believes that the market price of its common shares at
certain times may be attractive and that the purchase of these
common shares from time to time would be an appropriate use of
Norbord's funds in light of potential benefits to remaining
shareholders.
From time to time, when Norbord does not possess material
non-public information about itself or its securities, it may enter
into an automatic purchase plan with its broker to
allow for the purchase of common shares at times when Norbord
ordinarily would not be active in the market due to its own
internal trading blackout periods, insider trading rules or
otherwise. Any such plans entered into with Norbord's broker will
be adopted in accordance with applicable Canadian securities
laws.
Additional Information
Norbord's Q3 2018 letter to shareholders, news release,
management's discussion and analysis, consolidated unaudited
interim financial statements and notes to the financial statements
have been filed on SEDAR (www.sedar.com), EDGAR (www.sec.gov) and
are available in the investor section of the Company's website at
www.norbord.com. Shareholders may receive a hard copy of Norbord's
audited annual financial statements free of charge upon request.
The Company has also made available on its website presentation
materials containing certain historical and forward-looking
information relating to Norbord, including materials that contain
additional information about the Company's financial results.
Shareholders are encouraged to read this material.
Conference Call
Norbord will hold a conference call for analysts and
institutional investors on Thursday,
November 1, 2018 at 11:00 a.m.
ET. The call will be broadcast live over the internet via
www.norbord.com and www.newswire.ca. An accompanying
presentation will be available in the "Investors/Conference Call"
section of the Norbord website prior to the start of the call. A
replay number will be available approximately one hour after
completion of the call and will be accessible until December 1, 2018 by dialing 1-888-203-1112 or
647-436-0148 (passcode 3699127 and pin 9635). Audio playback and a
written transcript will be available on the Norbord website.
Norbord Profile
Norbord Inc. is a leading global manufacturer of wood-based
panels and the world's largest producer of oriented strand board
(OSB). In addition to OSB, Norbord manufactures particleboard,
medium density fibreboard and related value-added products. Norbord
has assets of approximately $2.1
billion and employs approximately 2,750 people at 17 plant
locations in the United States,
Canada and Europe. Norbord is a publicly traded company
listed on the Toronto Stock Exchange and New York Stock Exchange
under the symbol "OSB".
This news release contains forward-looking statements, as
defined by applicable securities legislation, including statements
related to our strategy, projects, plans, future financial or
operating performance and other statements that express
management's expectations or estimates of future performance.
Often, but not always, forward-looking statements can be identified
by the use of words such as "set up," "on track," "expect,"
"estimate," "forecast," "target," "outlook," "schedule,"
"represent," "continue," "intend," "should," "would," "could,"
"will," "can," "might," "may," and other expressions which are
predictions of or indicate future events, trends or prospects and
which do not relate to historical matters identify forward-looking
statements. Forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Norbord to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements.
Although Norbord believes it has a reasonable basis for
making these forward-looking statements, readers are cautioned not
to place undue reliance on such forward-looking information. By its
nature, forward-looking information involves numerous assumptions,
inherent risks and uncertainties, both general and specific, which
contribute to the possibility that the predictions, forecasts and
other forward-looking statements will not occur. Factors that could
cause actual results to differ materially from those contemplated
or implied by forward-looking statements include: assumptions in
connection with the economic and financial conditions in the US,
Europe, Canada and globally; risks inherent to product
concentration and cyclicality; effects of competition and product
pricing pressures; risks inherent to customer dependence; effects
of variations in the price and availability of manufacturing
inputs, including continued access to fibre resources at
competitive prices; availability of rail services and port
facilities; various events that could disrupt operations, including
natural or catastrophic events and ongoing relations with
employees; impact of changes to, or non-compliance with,
environmental regulations; impact of any product liability claims
in excess of insurance coverage; risks inherent to a capital
intensive industry; impact of future outcomes of tax exposures;
potential future changes in tax laws; effects of currency exposures
and exchange rate fluctuations; future operating costs,
availability of financing, impact of future cross-border trade
rulings or agreements; ability to implement new or upgraded
information technology infrastructure; impact of information
technology service disruptions or failures; and other risks and
factors described from time to time in filings with Canadian
securities regulatory authorities.
Except as required by applicable law, Norbord does not
undertake to update any forward-looking statements, whether written
or oral, that may be made from time to time by, or on behalf of,
the Company, whether as a result of new information, future events
or otherwise, or to publicly update or revise the above list of
factors affecting this information. See the "Caution Regarding
Forward-Looking Information" statement in the February 1, 2018 Annual Information Form and the
cautionary statement contained in the "Forward-Looking Statements"
section of the 2017 Management's Discussion and
Analysis dated February 1, 2018 and
Q3 2018 Management's Discussion and Analysis dated October 31, 2018.
Norbord defines Adjusted EBITDA as earnings determined in
accordance with International Financial Reporting Standards (IFRS)
before finance costs, income taxes, depreciation, amortization and
non-recurring or other items; Adjusted earnings as earnings
determined in accordance with IFRS before non-recurring or other
items and using a normalized income tax rate; and Adjusted earnings
per share is Adjusted earnings divided by the weighted average
number of common shares outstanding (on a basic or diluted basis,
as specified). Adjusted EBITDA, Adjusted earnings, and Adjusted
earnings per share are non-IFRS financial measures, do not have any
standardized meaning prescribed by IFRS and are therefore unlikely
to be comparable to similar measures presented by other companies.
See "Non-IFRS Financial Measures" in Norbord's 2017 Management's
Discussion and Analysis dated February 1,
2018 and Q3 2018 Management's Discussion and Analysis dated
October 31, 2018 for a quantitative
reconciliation of Adjusted EBITDA and Adjusted earnings to earnings
(the most directly comparable IFRS measure).
November 1, 2018
To Our Shareholders:
The third quarter was another excellent operating quarter for
Norbord. Our mills ran well, and we saw continued improvement in
our European business and with our specialty products strategy.
North American shipments increased both year-over-year and over the
prior quarter, earnings from our European business increased and
Norbord continues to generate strong free cash flow. We delivered
Adjusted EBITDA of $211 million for
the quarter, with Adjusted earnings of $1.41 per diluted share. This solid performance
follows our record Q2 results which were the best in Norbord's
30-year history.
Our perspective on the market
While we are happy with our Q3 performance, there has been a
noticeable shift in US housing sentiment in the past month that has
put significant negative pressure on the broader wood products
sector and North American product prices, including OSB. There are
times when markets appear to over-react and we believe this is one
of those times. As a result, we have renewed our Normal Course
Issuer Bid and are actively planning to repurchase our stock under
this renewed bid.
For our part, we see fundamentals that continue to be supportive
of our business.
Looking at the macroeconomic indicators, there remains
significant pent-up US housing demand driven by household formation
and replacement of aging housing stock. More people are becoming
first-time homebuyers and the desire to own remains high. Despite
headlines to the contrary, entry-level home affordability remains
favourable compared to historical averages. Single-family
homebuilders remain optimistic and housing economists continue to
forecast new home construction growth for the next year,
particularly in entry-level homes. Taken together, we share the
view of housing experts that we are experiencing a short-term
hiccup, or temporary pause, rather than a directional change.
Beyond the housing market, Norbord's business strategy also
supports our continued optimism.
We began pursuing our specialty products strategy after our
merger with Ainsworth to bring greater stability to our earnings
during times of inherent housing market volatility, and we are
seeing positive results. Since we launched this strategy in
2015, our specialty sales volume has increased by more than 40%.
Put into context, this represents the approximate annual production
of one mill. Over the same period, our value-added products volume
has increased 35%. We are continuing this momentum with steady,
incremental growth in our specialty volumes. This is not to say
that commodity OSB will not continue to be a part of our business.
Rather, it is a demonstration that there are other areas of growth
within our traditional business. Our target continues to be
expanding specialty products to 50% of our North American sales
volume.
Our results are also supported by our steadily improving
European business, which delivered another excellent quarterly
performance of $23 million in
Adjusted EBITDA, 10% more than Q2 and 64% above the same quarter
last year. European OSB demand remains robust in our key markets
and continues to support price momentum. Our investment to
modernize and expand our Inverness,
Scotland mill will ensure we can meet the demand growth we
are seeing from customers across the UK and in western Europe.
Strength amid volatility
Our message to shareholders remains positive, despite recent
volatility. The fundamentals of our business remain solid. Our
production capacity is well aligned to customer demand. Our
diversification strategy provides additional sales channels and has
helped cushion against housing market swings. Norbord's balance
sheet is the strongest it has been in two decades and we have
almost $550 million of liquidity at
our disposal. Our decision-making continues to be guided by a
disciplined approach to capital allocation.
As always, our commitment is "controlling our controllables".
Our philosophy continues to be that we only produce what we can
sell. We are focused on the efficiency and productivity of our
mills and the prudent allocation of capital.
I look forward to reporting on our progress next quarter.
Peter Wijnbergen
President & CEO
This letter includes forward-looking statements, as defined
by applicable securities legislation, including statements related
to our strategy, projects, plans, future financial or operating
performance, market outlook, and other statements that express
management's expectations or estimates of future performance.
Often, but not always, forward-looking statements can be identified
by the use of words such as "expect," "suggest," "support,"
"believe," "should," "potential," "likely," "continue," "forecast,"
"plan," "indicate," "consider," "future," or variations of such
words and phrases or statements that certain actions "may,"
"could," "must," "would," "might," or "will" be undertaken, occur
or be achieved. Forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the
actual results, performance or achievements of Norbord to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. See the cautionary language in the Forward-Looking
Statements section of the 2017 Management's Discussion and Analysis
dated February 1, 2018 and Q3 2018
Management's Discussion and Analysis dated October 31, 2018.
Norbord defines Adjusted EBITDA as earnings determined in
accordance with International Financial Reporting Standards (IFRS)
before finance costs, income taxes, depreciation, amortization and
non-recurring or other items; Adjusted earnings as earnings
determined in accordance with IFRS before non-recurring or other
items and using a normalized income tax rate; and Adjusted earnings
per share as Adjusted earnings divided by the weighted average
number of common shares outstanding (on a basic or diluted basis,
as specified). Adjusted EBITDA, Adjusted earnings, and Adjusted
earnings per share are non-IFRS financial measures, do not have any
standardized meaning prescribed by IFRS and are therefore unlikely
to be comparable to similar measures presented by other companies.
See the Non-IFRS Financial Measures section in Norbord's Q3 2018
Management's Discussion and Analysis dated October 31, 2018 for a quantitative
reconciliation of Adjusted EBITDA and Adjusted earnings to earnings
(the most directly comparable IFRS measure).
Interim Consolidated Balance Sheets
|
|
|
|
(Unaudited)
(US $
millions)
|
Sep 29,
2018
|
|
Dec 31,
2017
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
193
|
|
$
|
241
|
Accounts
receivable
|
195
|
|
174
|
Taxes
receivable
|
2
|
|
1
|
Inventory
|
234
|
|
224
|
Prepaids
|
18
|
|
11
|
|
642
|
|
651
|
Non-current
assets
|
|
|
|
Property, plant and
equipment
|
1,458
|
|
1,421
|
Intangible
assets
|
21
|
|
24
|
Deferred income tax
assets
|
4
|
|
4
|
Other
assets
|
5
|
|
3
|
|
1,488
|
|
1,452
|
|
$
|
2,130
|
|
$
|
2,103
|
Liabilities and
shareholders' equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
274
|
|
$
|
282
|
Taxes
payable
|
47
|
|
74
|
|
321
|
|
356
|
Non-current
liabilities
|
|
|
|
Long-term
debt
|
549
|
|
548
|
Other
liabilities
|
24
|
|
29
|
Deferred income tax
liabilities
|
194
|
|
151
|
|
767
|
|
728
|
Shareholders'
equity
|
1,042
|
|
1,019
|
|
$
|
2,130
|
|
$
|
2,103
|
Interim Consolidated Statements of Earnings
|
|
|
|
|
|
|
|
(Unaudited)
Periods ended Sep 29
and Sep 30 (US $ millions, except per share information)
|
Q3
2018
|
|
Q3 2017
|
|
9 mos
2018
|
|
9 mos 2017
|
Sales
|
$
|
640
|
|
$
|
578
|
|
$
|
1,923
|
|
$
|
1,581
|
Cost of
sales
|
(427)
|
|
(381)
|
|
(1,259)
|
|
(1,110)
|
General and
administrative expenses
|
(4)
|
|
1
|
|
(14)
|
|
(7)
|
Depreciation and
amortization
|
(34)
|
|
(27)
|
|
(100)
|
|
(78)
|
Loss on disposal of
assets
|
—
|
|
(2)
|
|
—
|
|
(9)
|
Operating
income
|
175
|
|
169
|
|
550
|
|
377
|
Non-operating
expense:
|
|
|
|
|
|
|
|
Finance
costs
|
(8)
|
|
(7)
|
|
(25)
|
|
(26)
|
Earnings before
income tax
|
167
|
|
162
|
|
525
|
|
351
|
Income tax
expense
|
(37)
|
|
(32)
|
|
(126)
|
|
(75)
|
Earnings
|
$
|
130
|
|
$
|
130
|
|
$
|
399
|
|
$
|
276
|
Earnings per common
share
|
|
|
|
|
|
|
|
Basic
|
$
|
1.50
|
|
$
|
1.51
|
|
$
|
4.61
|
|
$
|
3.21
|
Diluted
|
1.49
|
|
1.50
|
|
4.58
|
|
3.18
|
Interim Consolidated Statements of
Comprehensive Income
|
|
|
|
|
|
|
|
(Unaudited)
Periods ended Sep 29
and Sep 30 (US $ millions)
|
Q3
2018
|
|
Q3 2017
|
|
9 mos
2018
|
|
9 mos 2017
|
Earnings
|
$
|
130
|
|
$
|
130
|
|
$
|
399
|
|
$
|
276
|
Other comprehensive
income (loss), net of tax
|
|
|
|
|
|
|
|
Items that will not be
reclassified to earnings:
|
|
|
|
|
|
|
|
Actuarial gain (loss)
on post-employment obligation
|
2
|
|
4
|
|
6
|
|
(2)
|
Items that may be
reclassified subsequently to earnings:
|
|
|
|
|
|
|
|
Foreign currency
translation (loss) gain on foreign
operations
|
(3)
|
|
10
|
|
(13)
|
|
27
|
Other comprehensive
(loss) income, net of tax
|
(1)
|
|
14
|
|
(7)
|
|
25
|
Comprehensive
income
|
$
|
129
|
|
$
|
144
|
|
$
|
392
|
|
$
|
301
|
Interim Consolidated Statements of Changes in
Shareholders' Equity
|
|
|
|
|
|
|
|
|
(Unaudited)
Periods ended Sep 29
and Sep 30 (US $ millions)
|
|
Q3
2018
|
|
|
Q3 2017
|
|
|
9 mos
2018
|
|
|
9 mos 2017
|
Share
capital
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of
period
|
|
$
|
1,356
|
|
|
$
|
1,345
|
|
|
$
|
1,350
|
|
|
$
|
1,341
|
Issue of common
shares upon exercise of options
|
|
|
|
|
|
|
|
|
|
|
|
and Dividend
Reinvestment Plan
|
|
5
|
|
|
5
|
|
|
11
|
|
|
9
|
Balance, end of
period
|
|
$
|
1,361
|
|
|
$
|
1,350
|
|
|
$
|
1,361
|
|
|
$
|
1,350
|
Merger
reserve
|
|
$
|
(96)
|
|
|
$
|
(96)
|
|
|
$
|
(96)
|
|
|
$
|
(96)
|
Contributed
surplus
|
|
|
|
|
|
|
|
|
Balance, beginning of
period
|
|
$
|
7
|
|
|
$
|
8
|
|
|
$
|
8
|
|
|
$
|
9
|
Stock options
exercised
|
|
—
|
|
|
—
|
|
|
(1)
|
|
|
(1)
|
Balance, end of
period
|
|
$
|
7
|
|
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
8
|
Retained earnings
(deficit)
|
|
|
|
|
|
|
|
|
Balance, beginning of
period
|
|
$
|
121
|
|
|
$
|
(282)
|
|
|
$
|
(67)
|
|
|
$
|
(402)
|
Earnings
|
|
130
|
|
|
130
|
|
|
399
|
|
|
276
|
Common share
dividends
|
|
(298)
|
|
|
(35)
|
|
|
(379)
|
|
|
(61)
|
Balance, end of
period(i)
|
|
$
|
(47)
|
|
|
$
|
(187)
|
|
|
$
|
(47)
|
|
|
$
|
(187)
|
Accumulated other
comprehensive loss
|
|
|
|
|
|
|
|
|
Balance, beginning of
period
|
|
$
|
(182)
|
|
|
$
|
(191)
|
|
|
$
|
(176)
|
|
|
$
|
(202)
|
Other comprehensive
(loss) income
|
|
(1)
|
|
|
14
|
|
|
(7)
|
|
|
25
|
Balance, end of
period
|
|
$
|
(183)
|
|
|
$
|
(177)
|
|
|
$
|
(183)
|
|
|
$
|
(177)
|
Shareholders'
equity
|
|
$
|
1,042
|
|
|
$
|
898
|
|
|
$
|
1,042
|
|
|
$
|
898
|
(i) Retained deficit
comprised of:
|
|
|
|
|
Deficit arising on
cashless exercise of warrants in 2013
|
|
$
|
(263)
|
|
|
$
|
(263)
|
|
All other retained
earnings
|
|
216
|
|
|
76
|
|
|
|
$
|
(47)
|
|
|
$
|
(187)
|
|
Interim Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
(Unaudited)
Periods ended Sep 29
and Sep 30 (US $ millions)
|
Q3
2018
|
|
Q3 2017
|
|
9 mos
2018
|
|
9 mos 2017
|
CASH PROVIDED BY
(USED FOR):
|
|
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
|
|
Earnings
|
$
|
130
|
|
$
|
130
|
|
$
|
399
|
|
$
|
276
|
Items not affecting
cash:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
34
|
|
27
|
|
100
|
|
78
|
Deferred income
tax
|
11
|
|
(3)
|
|
42
|
|
22
|
Loss on disposal of
assets
|
—
|
|
2
|
|
—
|
|
9
|
Other
items
|
9
|
|
12
|
|
11
|
|
8
|
|
184
|
|
168
|
|
552
|
|
393
|
Net change in
non-cash operating working capital balances
|
29
|
|
3
|
|
(45)
|
|
(52)
|
Net change in taxes
receivable, taxes payable and investment
|
|
|
|
|
|
|
|
tax credit
receivable
|
15
|
|
32
|
|
(25)
|
|
45
|
|
228
|
|
203
|
|
482
|
|
386
|
Investing
activities
|
|
|
|
|
|
|
|
Investment in
property, plant and equipment
|
(39)
|
|
(56)
|
|
(156)
|
|
(174)
|
Investment in
intangible assets
|
—
|
|
—
|
|
(1)
|
|
(3)
|
|
(39)
|
|
(56)
|
|
(157)
|
|
(177)
|
Financing
activities
|
|
|
|
|
|
|
|
Common share
dividends paid
|
(292)
|
|
(35)
|
|
(373)
|
|
(60)
|
Issue of common
shares
|
—
|
|
4
|
|
4
|
|
7
|
Repayment of
debt
|
—
|
|
—
|
|
—
|
|
(200)
|
|
(292)
|
|
(31)
|
|
(369)
|
|
(253)
|
Foreign exchange
revaluation on cash and cash
|
|
|
|
|
|
|
|
equivalents
held
|
(2)
|
|
3
|
|
(4)
|
|
9
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
(Decrease) increase
during period
|
(105)
|
|
119
|
|
(48)
|
|
(35)
|
Balance, beginning of
period
|
298
|
|
7
|
|
241
|
|
161
|
Balance, end of
period
|
$
|
193
|
|
$
|
126
|
|
$
|
193
|
|
$
|
126
|
View original
content:http://www.prnewswire.com/news-releases/norbord-reports-third-quarter-2018-results-declares-quarterly-dividend-300741783.html
SOURCE Norbord Inc.