Note: Financial references in US dollars unless otherwise
indicated. This news release reviews Norbord's standalone
performance during the 2020 fiscal year as Norbord and West Fraser
operated as separate companies during the 2020 fiscal year (see
Acquisition by West Fraser section below).
2020 HIGHLIGHTS
- Acquisition by West Fraser completed February 1, 2021
- Record full-year Adjusted EBITDA of $865 million and Adjusted earnings of
$6.38 per diluted share
- Record annual production at three mills (one in North America and two in Europe)
- Liquidity of $985 million at
year-end
- Announced intention to restart production at Chambord, Quebec mill in spring 2021
- Published 2020 Environmental, Social and Governance (ESG)
report
TORONTO, Feb. 11, 2021 /PRNewswire/ - Norbord Inc.
(Norbord), a wholly-owned subsidiary of West Fraser Timber Co. Ltd.
(West Fraser) (TSX and NYSE: WFG) effective February 1, 2021, today reported Adjusted EBITDA
of $865 million for the full-year
2020 compared to $138 million in
2019. The improvement was due to significantly higher realized
North American oriented strand board (OSB) prices, productivity
improvements and lower raw material prices, partially offset by
higher mill profit share costs attributed to higher earnings, lower
shipment volumes and higher raw material usages. North American
operations generated Adjusted EBITDA of $832
million compared to $85
million in the prior year and European operations delivered
Adjusted EBITDA of $48 million
compared to $64 million in the prior
year.
For the fourth quarter of 2020, Norbord reported Adjusted EBITDA
of $384 million compared to
$322 million in the third quarter of
2020 and $27 million in the fourth
quarter of 2019. The quarter-over-quarter increase was primarily
driven by higher realized North American OSB prices, partially
offset by lower shipment volumes, while the year-over-year increase
was due to significantly higher North American OSB prices and
higher shipment volumes. North American operations generated
Adjusted EBITDA of $370 million in
the fourth quarter compared to $310
million in the third quarter of 2020 and $20 million in the fourth quarter of 2019, and
European operations delivered Adjusted EBITDA of $20 million compared to $16 million in the prior quarter and $11 million in the same quarter last year.
"The past year was truly remarkable in many respects for
Norbord," said Peter Wijnbergen, President & CEO of Norbord and
now President, Engineered Wood of West Fraser. "After adjusting our
production strategy in response to the demand challenges brought
about by the COVID-19 pandemic in the first half of the year, OSB
demand from new home construction and repair & remodeling
recovered beyond expectations and forecasts in the second half,
lifting North American benchmark prices to all-time highs. In fact,
the recovery of demand was so robust that we reported back-to-back
record quarterly results in the third and fourth quarters. In
Europe, our results were more
adversely impacted by the pandemic though we saw steady improvement
in the back half of the year with panel prices recovering and
production ramping up at the recently commissioned Inverness, Scotland Phase 2 expansion."
"Given all that has transpired this year, I am extremely pleased
with our team's ability to remain focused within the strict
protocols required by the pandemic and significantly improve our
safety performance. I am also proud that we quickly learned how to
scale our production to demand while containing manufacturing costs
and achieving record annual production at three of our mills during
these extraordinary times. Further, we were able to release our
inaugural ESG report as planned before the end of the year."
"With customer demand exceeding our ability to supply it, we
announced the intended spring 2021 resumption of OSB production at
our Chambord, Quebec mill as part
of our flexible operating strategy. We remain optimistic that the
worst of the pandemic has passed but we also recognize that
economic uncertainty remains elevated and our business is
inherently cyclical, therefore we remain vigilant. We will continue
to focus on the health and safety of our employees as well as our
customers' needs, and on managing the business to be resilient,
flexible and sustainable."
"As we move forward with West Fraser as one organization, I want
to acknowledge my Norbord colleagues for all their commitment and
hard work, especially this past year. I look forward to continuing
to work together as President of Engineered Wood at West Fraser as
we embark on a new and exciting next chapter in our company's
story."
Acquisition by West Fraser
On November 19, 2020, the Company
and West Fraser announced that they had entered into an arrangement
agreement pursuant to which West Fraser would acquire all of the
outstanding common shares of the Company in an all-share
transaction in which Norbord shareholders would receive 0.675 of a
West Fraser share for each Norbord share. The transaction was
completed on February 1, 2021,
Norbord became a wholly-owned subsidiary of West Fraser, and
Norbord's shares were delisted from the TSX on February 2, 2021 and from the NYSE on
February 1, 2021.
For the full-year 2020, Norbord recorded Adjusted earnings of
$517 million or $6.39 per basic share ($6.38 per diluted share) versus an Adjusted loss
of $30 million or $0.37 per share (basic and diluted) in 2019.
Norbord recorded Adjusted earnings of $261
million or $3.23 per share
(basic and diluted) in the fourth quarter of 2020 versus Adjusted
earnings of $204 million or
$2.52 per share (basic and diluted)
in the prior quarter and an Adjusted loss of $11 million or $0.13 per share (basic and diluted) in the same
quarter last year. Adjusted earnings (loss) exclude non-recurring
or other items and use a normalized income tax rate:
$
millions
|
Q4
2020
|
Q3
2020
|
Q4
2019
|
2020
|
2019
|
Earnings
(loss)
|
256
|
203
|
(12)
|
497
|
(42)
|
Adjusted
for:
|
|
|
|
|
|
(Reversal) impairment
of assets, net
|
(3)
|
-
|
-
|
13
|
10
|
Loss on disposal of
assets
|
1
|
-
|
2
|
4
|
3
|
Stock-based
compensation and related costs
|
4
|
2
|
1
|
8
|
3
|
Costs related to 100
Mile House closure
|
-
|
10
|
-
|
10
|
2
|
West Fraser
transaction costs
|
4
|
-
|
-
|
4
|
-
|
Contract
settlement
|
3
|
-
|
-
|
3
|
-
|
Costs on early
extinguishment of 2020 Notes
|
-
|
-
|
-
|
-
|
10
|
Reported income tax
expense (recovery)
|
78
|
61
|
(6)
|
150
|
(27)
|
Adjusted pre-tax
earnings (loss)
|
343
|
276
|
(15)
|
689
|
(41)
|
Income tax (expense)
recovery at statutory rate(1)
|
(82)
|
(72)
|
4
|
(172)
|
11
|
Adjusted earnings
(loss)(2)
|
261
|
204
|
(11)
|
517
|
(30)
|
(1)
|
Represents Canadian
combined federal and provincial statutory rate (2020 - 25%; 2019 -
26%). Q1 to Q3 of 2020 were based on the 26% rate and a true up for
the full year rate of 25% was reflected in Q4.
|
(2)
|
Non-IFRS
measure.
|
Market Conditions
According to the APA – The Engineered Wood Association (APA),
new home construction is the largest end use for the OSB industry
in North America, accounting for
approximately 58% of OSB consumption in 2020. 2020 US housing
starts were up 7% year-over-year to 1.38 million, and the
seasonally adjusted annualized pace of permits, the more
forward-looking indicator, was 1.67 million in December, a 5%
increase over December 2019.
Single-family starts (which use approximately three times more OSB
than multifamily) increased by 12%, and represented 72% of total
starts, up from 69% in 2019. New home construction has rebounded
significantly since the low of 0.55 million in 2009, with the
seasonally-adjusted pace of US housing starts above the long-term
annual average of 1.5 million for the past three months.
According to the APA, 2020 North American OSB production was in
line with 2019 at approximately 23.0 Bsf (3/8-inch basis),
representing 69% of total North American structural panel
production and 96% of the OSB industry's operating production
capacity (85% of industry installed capacity). This compares to an
estimated operating rate of 83% in 2019.
In 2020, North American benchmark OSB prices were significantly
higher than in 2019. Prices commenced their ascent at the start of
the year, pausing in the second quarter due to the impact of the
COVID-19 pandemic on demand, then climbing dramatically to record
highs in the second half of the year. The North Central benchmark
OSB price ranged from a low of $220
per Msf (7⁄16-inch basis) in January to a high of $710 per Msf in December and averaged
$443 per Msf for the year. The table
below summarizes average benchmark OSB prices by region for the
relevant years:
North American
region
|
% of Norbord's
operating capacity
|
Q4
2020
|
Q3 2020
|
Q4 2019
|
2020
|
2019
|
North
Central
|
16%
|
666
|
578
|
223
|
443
|
210
|
South East
|
39%
|
644
|
572
|
199
|
429
|
187
|
Western
Canada
|
25%
|
643
|
579
|
190
|
422
|
166
|
In Europe, panel prices
continued the decline started in 2019, particularly in the UK where
the impact of the pandemic on customer demand was more acute than
on the continent. In the UK, where three of Norbord's four European
mills are located, GDP shrank 10%, unemployment rose and housing
starts declined largely due to the impact of the pandemic. In
Germany, Europe's largest continental OSB market, GDP
growth declined 7% with a slight decline in housing starts from the
previous year. In local currency terms, average panel prices for
the full year declined 9% from 2019, but prices started rebounding
in the back half of the year when demand improved as pandemic
restrictions eased.
Historically, the UK has been a net importer of panel products
and Norbord is the largest domestic producer. A weaker Pound
Sterling relative to the Euro is advantageous to Norbord's
primarily UK-based operations as it improves sales opportunities
within the UK and supports Norbord's export program into the
continent. In 2020, the Pound Sterling ranged from 1.07 to 1.20
versus the Euro and averaged 1.13 compared to 1.14 in 2019.
Performance
Norbord's Occupational Safety and Health Administration (OSHA)
recordable injury rate was 0.87 in 2020, 30% lower than 2019, and
five mills completed recordable injury-free years.
In North America, full-year
shipment volumes decreased 6% driven by the production curtailments
taken in the second quarter to align with reduced demand due to the
COVID-19 pandemic. Fourth quarter shipments were down 8% from the
prior quarter but increased 5% year-over-year. The lower shipments
quarter-over-quarter reflect fewer fiscal days and maintenance
downtime taken during the typical seasonal demand slowdown in the
fourth quarter. An annual production record was achieved at the
High Level, Alberta OSB mill.
For the full year, Norbord's North American operating OSB mills
produced at 80% of available capacity compared to 85% in 2019
(excluding the curtailed Chambord,
Quebec mill). The decrease in capacity utilization was due
to the indefinite curtailments taken in the prior year and by the
impact of the pandemic on customer demand in the second quarter.
Despite this, Norbord's 2020 North American OSB cash production
costs per unit (excluding mill profit share) decreased 2% versus
the prior year due to lower raw material prices and improved
productivity, partially offset by higher raw material usages.
European shipment volume was 3% higher in 2020 driven by strong
OSB demand growth that more than offset the second quarter pandemic
impact on customer demand. Annual production records were achieved
at the OSB mills in Genk, Belgium
and Inverness, Scotland. Norbord's
panel mills produced at 87% of stated capacity in 2020 versus 88%
in 2019. The decrease in capacity utilization was driven by the 225
million square feet (MMsf) (3/8-inch basis) restatement of capacity
from the completion of Phase 2 of the Inverness mill expansion project.
The Company generated net Margin Improvement Program (MIP) gains
of $55 million in 2020 due to
improved productivity, notably from the Inverness mill, and product mix. This is in
line with the Company's best-ever MIP result in 2004.
Based on the strong free cash flow in the second half of 2020
and in line with Norbord's capital allocation priorities, a number
of projects were pulled forward into fiscal 2020. As a result,
investment in property, plant and equipment for the full year was
$124 million ($128 million including intangible assets). During
2020, $19 million ($47 million in total) of the $46 million (£35 million) budgeted was invested
in the Inverness Phase 2 expansion project. This project is now
complete and the state-of-the-art continuous press continues to
ramp up towards its restated Phase 2 capacity of 945 MMsf (3/8-inch
basis). At Chambord, $7 million was invested during 2020 ($58 million project-to-date of the $71 million budgeted) to rebuild the Chambord mill for restart, which is planned
for spring 2021.
Looking ahead to 2021, capital expenditures are targeted at
approximately $185 million. This will
include maintenance of business projects, projects focused on
debottlenecking capacity, reducing manufacturing costs, and
enhancing process safety across the mills, as well as the remaining
portion to complete the rebuild of the Chambord mill. It will also include
investments to support the Company's strategy to increase the
production of specialty products for industrial applications and
exports.
At year-end, the Company had unutilized liquidity of
$985 million, comprising $568 million in cash and cash equivalents and
$417 million in unused credit lines.
Operating working capital was $121
million compared to $120
million at the same quarter-end last year. The Company's
tangible net worth was $1,403 million
and net debt to capitalization on a book basis was 7%.
Capital Returns to Shareholders
Norbord returned $100 million in
cash to shareholders through dividends and share repurchases in
2020. A total of $72 million was paid
in dividends and 1.1 million common shares were repurchased for
$28 million in 2020. Under its Normal
Course Issuer Bid (NCIB) that commenced on November 5, 2019 and expired November 4, 2020, Norbord repurchased 1.4 million
common shares at a weighted average price of C$33.17 per common share, representing a total
cost of $33 million. Norbord did not
renew the NCIB when it expired on November
4, 2020 and did not repurchase any shares in the fourth
quarter of 2020.
Update for Bondholders
Following the repayment and termination of the Company's
revolving bank lines on completion of the acquisition by West
Fraser, the collateral platform providing for security over assets
of Norbord in favour of the revolving banks was terminated. As a
consequence, the collateral platform providing for security over
assets of Norbord in favour of the holders of the 2023 and 2027
senior notes was terminated. The termination of the collateral
platforms resulted in the discharge of the liens that supported
both collateral platforms. The 2023 and 2027 senior notes are now,
as a consequence of such termination, unsecured obligations of
Norbord.
Pursuant to the indentures governing the 2023 and 2027 senior
notes, following Norbord's acquisition by West Fraser, the Company
is required to make a change of control offer to all holders of the
notes, at a purchase price equal to 101% of their aggregate
principal amount plus accrued and unpaid interest. Any notes that
are not tendered to such offer will continue to remain outstanding
obligations of Norbord subject to the terms and conditions of their
indentures. Details will be provided in a notice of the offer to be
mailed to the holders of the Norbord notes.
Outlook
Industry experts are forecasting US housing starts ranging from
1.35 million to 1.55 million in 2021. The key indicators for the US
housing market, including strong new home sales, housing permits
and single family starts, minimal new home inventories, and low
mortgage rates, continue to provide a positive outlook for OSB
demand. Similarly, repair-and-remodelling demand has remained
robust and demand from industrial customers has normalized
following significant pandemic-imposed restrictions earlier in the
year. Notwithstanding these positive trends, there remains
considerable uncertainty in the broader economic environment as the
second wave of COVID-19 plays out. Should conditions change,
Norbord is well positioned to respond with its flexible operating
strategy.
Additional Information
Norbord's year-end 2020 news release, management's discussion
and analysis, annual consolidated audited financial statements and
notes to the financial statements are being 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 and on
West Fraser's website at www.westfraser.com. Norbord will soon file
its 2020 annual report on Form 40-F, including its audited
financial statements for the year ended December 31, 2020, with the SEC on EDGAR
(www.sec.gov) as well as with the Canadian securities authorities
on SEDAR (www.sedar.com). These documents are also available
in the investors section of the Company's website and on West
Fraser's website. 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
Representatives from West Fraser and Norbord will hold a joint
conference call for analysts and institutional investors on
Friday, February 12, 2021 at
11:30 a.m. ET. The call will be
broadcast live over the internet via www.norbord.com and
www.westfraser.com. 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 February 19, 2021 by
dialing 1-888-390-0541 or 416-764-8677 (entry code 950002 #). Audio
playback and a written transcript will be available on the Norbord
website.
Company Profile
Norbord is a wholly-owned subsidiary of West Fraser, a publicly
traded company listed on the Toronto Stock Exchange and the New
York Stock Exchange under the symbol "WFG". West Fraser is a
diversified wood products company with more than 60 facilities in
Canada, the United States, the United Kingdom, and Europe. From responsibly sourced and
sustainably managed forest resources, West Fraser produces lumber,
engineered wood (OSB, LVL, MDF, plywood, particleboard), and other
products including pulp, newsprint, wood chips, and renewable
energy. West Fraser's products are used in home construction,
repair and remodeling, industrial applications, papers, tissue and
box materials.
This news release contains forward-looking statements, as
defined by applicable securities legislation, including statements
related to the Company's 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. These factors
include, but are not limited to: (1) developments related to
COVID-19 or any other plague, epidemic, pandemic, outbreak of
infectious disease or any other public health crisis, including
health and safety measures instituted to protect the Company's
employees, government-imposed restrictions or other restrictions
that may apply to the Company's employees and/or operations
(including quarantine), the impact on customer demand, supply and
distribution and other factors; (2) assumptions in connection with
the economic and financial conditions in the US, Europe, Canada and globally; (3) risks inherent to
product concentration and cyclicality; (4) effects of competition
and product pricing pressures; (5) risks inherent to customer
dependence; (6) effects of variations in the price and availability
of manufacturing inputs, including continued access to fibre
resources at competitive prices and the impact of third-party
certification standards; (7) availability of transportation
services, including truck and rail services, and port facilities;
(8) various events that could disrupt operations, including
natural, man-made or catastrophic events and ongoing relations with
employees; (9) impact of changes to, or non-compliance with,
environmental or other regulations; (10) government restrictions,
standards or regulations intended to reduce greenhouse gas
emissions; (11) impact of weather and climate change on Norbord's
operations or the operations or demand of its suppliers and
customers; (12) impact of any product liability claims in excess of
insurance coverage; (13) risks inherent to a capital intensive
industry; (14) impact of future outcomes of tax exposures; (15)
potential future changes in tax laws, including tax rates; (16)
effects of currency exposures and exchange rate fluctuations; (17)
future operating costs; (18) availability of financing, bank lines
and/or other means of liquidity; (19) impact of future cross-border
trade rulings or agreements; (20) implementation of important
strategic initiatives and identification, completion and
integration of acquisitions; (21) ability to implement new or
upgraded information technology infrastructure; (22) impact of
information technology service disruptions or failures; (23)
changes in government policy and regulation and (24) integration
into West Fraser and risks relating to the combined
business.
The above list of important factors affecting forward-looking
information is not exhaustive. Additional factors are noted
elsewhere, and reference should be made to the other risks
discussed in filings with Canadian and US 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 "Forward-Looking
Statements" section in the February 11,
2021 Annual Information Form and the cautionary statement
contained in the "Forward-Looking Statements" section
of the 2020 Management's Discussion and Analysis
dated February 11, 2021.
In evaluating the Company's business, management uses
non-International Financial Reporting Standards (IFRS) financial
measures which, in management's view, are important supplemental
measures of the Company's performance and believes that they are
frequently used by investors, securities analysts and other
interested persons in the evaluation of Norbord and other similar
companies. In this news release, the following non-IFRS financial
measures have been used: Adjusted EBITDA, Adjusted earnings (loss),
Adjusted earnings (loss) per share, operating working capital,
tangible net worth, and net debt to capitalization, book basis.
Norbord defines Adjusted EBITDA as earnings (loss) determined in
accordance with IFRS before finance costs, interest income, income
taxes, depreciation, amortization and non-recurring or other items;
Adjusted earnings (loss) as earnings (loss) determined in
accordance with IFRS before non-recurring or other items and using
a normalized income tax rate; Adjusted earnings (loss) per share is
Adjusted earnings (loss) divided by the weighted average number of
common shares outstanding (on a basic or diluted basis, as
specified); operating working capital as accounts receivable plus
inventory and prepaids less accounts payable and accrued
liabilities; tangible net worth as shareholders' equity including
certain adjustments; net debt to capitalization, book basis as net
debt for financial covenant purposes divided by the sum of net debt
for financial covenant purposes and tangible net worth; net debt
for financial covenant purposes as net debt excluding other
long-term debt and including other liabilities classified as debt
for financial covenant purposes, letters of credit and guarantees
outstanding, and any bank advances; and net debt as the principal
value of long-term debt, including the current portion, other
long-term debt and bank advances, if any, less cash and cash
equivalents. 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
that may have different financing and capital structures, and/or
tax rates. See "Non-IFRS Financial Measures" in Norbord's 2020
Management's Discussion and Analysis dated February 11, 2021 for a quantitative
reconciliation of these non-IFRS financial measures to the most
directly comparable IFRS measure.
Consolidated Balance Sheets
|
|
|
|
|
(US $
millions)
|
|
Dec 31,
2020
|
|
Dec 31,
2019
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
568
|
|
|
$
|
20
|
|
Accounts
receivable
|
|
227
|
|
|
136
|
|
Taxes
receivable
|
|
—
|
|
|
63
|
|
Inventory
|
|
225
|
|
|
230
|
|
Prepaids
|
|
12
|
|
|
13
|
|
|
|
1,032
|
|
|
462
|
|
Non-current
assets
|
|
|
|
|
Property, plant and
equipment
|
|
1,417
|
|
|
1,427
|
|
Intangible
assets
|
|
19
|
|
|
21
|
|
Deferred income tax
assets
|
|
3
|
|
|
2
|
|
Other
assets
|
|
6
|
|
|
9
|
|
|
|
1,445
|
|
|
1,459
|
|
|
|
$
|
2,477
|
|
|
$
|
1,921
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
343
|
|
|
$
|
259
|
|
Taxes
payable
|
|
112
|
|
|
1
|
|
|
|
455
|
|
|
260
|
|
Non-current
liabilities
|
|
|
|
|
Long-term
debt
|
|
658
|
|
|
657
|
|
Other long-term
debt
|
|
—
|
|
|
68
|
|
Other
liabilities
|
|
44
|
|
|
40
|
|
Deferred income tax
liabilities
|
|
200
|
|
|
192
|
|
|
|
902
|
|
|
957
|
|
Shareholders'
equity
|
|
1,120
|
|
|
704
|
|
|
|
$
|
2,477
|
|
|
$
|
1,921
|
|
Consolidated Statements of Earnings (Loss)
|
|
|
|
|
Years ended December
31, (US $ millions, except per share information)
|
|
2020
|
|
2019
|
Sales
|
|
$
|
2,407
|
|
|
$
|
1,731
|
|
Cost of
sales
|
|
(1,527)
|
|
|
(1,582)
|
|
General and
administrative expenses
|
|
(23)
|
|
|
(14)
|
|
Depreciation and
amortization
|
|
(133)
|
|
|
(136)
|
|
Loss on disposal of
assets, net
|
|
(4)
|
|
|
(3)
|
|
Impairment of assets,
net
|
|
(13)
|
|
|
(10)
|
|
Costs related to 100
Mile House closure
|
|
(10)
|
|
|
(2)
|
|
Operating income
(loss)
|
|
697
|
|
|
(16)
|
|
Non-operating
(expense) income:
|
|
|
|
|
Finance
costs
|
|
(43)
|
|
|
(45)
|
|
Interest
income
|
|
—
|
|
|
2
|
|
West Fraser
transaction costs
|
|
(4)
|
|
|
—
|
|
Contract
settlement
|
|
(3)
|
|
|
—
|
|
Costs on early
extinguishment of 2020 Notes
|
|
—
|
|
|
(10)
|
|
Earnings (loss)
before income tax
|
|
647
|
|
|
(69)
|
|
Income tax (expense)
recovery
|
|
(150)
|
|
|
27
|
|
Earnings
(loss)
|
|
$
|
497
|
|
|
$
|
(42)
|
|
Earnings (loss) per
common share
|
|
|
|
|
Basic
|
|
$
|
6.14
|
|
|
$
|
(0.51)
|
|
Diluted
|
|
6.14
|
|
|
(0.51)
|
|
Consolidated Statements of Comprehensive Income
(Loss)
|
|
|
|
|
Years ended December
31, (US $ millions)
|
|
2020
|
|
2019
|
Earnings
(loss)
|
|
$
|
497
|
|
|
$
|
(42)
|
|
Other comprehensive
income (loss), net of tax
|
|
|
|
|
Items that will not be
reclassified to earnings:
|
|
|
|
|
Actuarial loss on
post-employment obligation
|
|
(2)
|
|
|
—
|
|
Items that may be
reclassified subsequently to earnings:
|
|
|
|
|
Foreign currency
translation gain on foreign operations
|
|
14
|
|
|
14
|
|
Other comprehensive
income, net of tax
|
|
12
|
|
|
14
|
|
Comprehensive income
(loss)
|
|
$
|
509
|
|
|
$
|
(28)
|
|
Consolidated Statements of Changes in Shareholders'
Equity
|
|
|
|
|
Years ended December
31, (US $ millions)
|
|
2020
|
|
2019
|
Share
capital
|
|
|
|
|
Balance, beginning of
year
|
|
$
|
1,278
|
|
|
$
|
1,280
|
|
Issue of common
shares upon exercise of options
|
|
7
|
|
|
1
|
|
Common shares
repurchased and cancelled
|
|
(18)
|
|
|
(27)
|
|
Reverse accrual for
common shares repurchased and cancelled under ASPP
|
|
—
|
|
|
24
|
|
Balance, end of
year
|
|
$
|
1,267
|
|
|
$
|
1,278
|
|
Merger
reserve
|
|
$
|
(96)
|
|
|
$
|
(96)
|
|
Contributed
surplus
|
|
|
|
|
Balance, beginning of
year
|
|
$
|
4
|
|
|
$
|
4
|
|
Stock-based
compensation
|
|
1
|
|
|
1
|
|
Stock options
exercised
|
|
(1)
|
|
|
(1)
|
|
Balance, end of
year
|
|
$
|
4
|
|
|
$
|
4
|
|
Retained earnings
(deficit)
|
|
|
|
|
Balance, beginning of
year
|
|
$
|
(299)
|
|
|
$
|
(168)
|
|
Earnings
(loss)
|
|
497
|
|
|
(42)
|
|
Common share
dividends
|
|
(72)
|
|
|
(86)
|
|
Common shares
repurchased and cancelled
|
|
(10)
|
|
|
(21)
|
|
Reverse accrual for
common shares repurchased and cancelled under ASPP
|
|
—
|
|
|
18
|
|
Balance, end of
year(i)
|
|
$
|
116
|
|
|
$
|
(299)
|
|
Accumulated other
comprehensive loss
|
|
|
|
|
Balance, beginning of
year
|
|
$
|
(183)
|
|
|
$
|
(197)
|
|
Other comprehensive
income, net of tax
|
|
12
|
|
|
14
|
|
Balance, end of
year
|
|
$
|
(171)
|
|
|
$
|
(183)
|
|
Shareholders'
equity
|
|
$
|
1,120
|
|
|
$
|
704
|
|
(i)Retained earnings
(deficit) comprised of:
|
|
|
|
|
Deficit arising on
cashless exercise of warrants in 2013
|
|
$
|
(263)
|
|
|
$
|
(263)
|
|
All other retained
earnings (deficit)
|
|
379
|
|
|
(36)
|
|
|
|
$
|
116
|
|
|
$
|
(299)
|
|
Consolidated Statements of Cash Flows
|
|
|
|
|
Years ended December
31, (US $ millions)
|
|
2020
|
|
2019
|
CASH PROVIDED BY
(USED FOR):
|
|
|
|
|
Operating
activities
|
|
|
|
|
Earnings
(loss)
|
|
$
|
497
|
|
|
$
|
(42)
|
|
Items not affecting
cash:
|
|
|
|
|
Depreciation and
amortization
|
|
133
|
|
|
136
|
|
Deferred income
tax
|
|
10
|
|
|
20
|
|
Impairment of assets,
net
|
|
13
|
|
|
10
|
|
Costs on early
extinguishment of 2020 Notes
|
|
—
|
|
|
10
|
|
Costs related to 100
Mile House closure
|
|
7
|
|
|
1
|
|
West Fraser
transaction costs
|
|
2
|
|
|
—
|
|
Contract
settlement
|
|
3
|
|
|
—
|
|
Loss on disposal of
assets, net
|
|
4
|
|
|
3
|
|
Other
items
|
|
5
|
|
|
16
|
|
|
|
674
|
|
|
154
|
|
Net change in
non-cash operating working capital balances
|
|
(16)
|
|
|
(47)
|
|
Net change in taxes
receivable and taxes payable
|
|
171
|
|
|
(88)
|
|
|
|
829
|
|
|
19
|
|
Investing
activities
|
|
|
|
|
Investment in
property, plant and equipment
|
|
(102)
|
|
|
(146)
|
|
Investment in
intangible assets
|
|
(4)
|
|
|
(4)
|
|
|
|
(106)
|
|
|
(150)
|
|
Financing
activities
|
|
|
|
|
Common share
dividends paid
|
|
(72)
|
|
|
(86)
|
|
Accounts receivable
securitization (repayment) drawings, net
|
|
(68)
|
|
|
68
|
|
Issuance of
debt
|
|
—
|
|
|
350
|
|
Repayment of
debt
|
|
—
|
|
|
(240)
|
|
Debt issuance
costs
|
|
(1)
|
|
|
(6)
|
|
Premium on early
extinguishment of 2020 Notes
|
|
—
|
|
|
(9)
|
|
Issue of common
shares
|
|
6
|
|
|
1
|
|
Repurchase of common
shares
|
|
(28)
|
|
|
(48)
|
|
Repayment of lease
obligations
|
|
(12)
|
|
|
(10)
|
|
|
|
(175)
|
|
|
20
|
|
Foreign exchange
revaluation on cash and cash equivalents held
|
|
—
|
|
|
3
|
|
Cash and cash
equivalents
|
|
|
|
|
Increase (decrease)
during year
|
|
548
|
|
|
(108)
|
|
Balance, beginning of
year
|
|
20
|
|
|
128
|
|
Balance, end of
year
|
|
$
|
568
|
|
|
$
|
20
|
|
View original
content:http://www.prnewswire.com/news-releases/norbord-reports-record-2020-results-301227281.html
SOURCE Norbord Inc.