Note: Financial references in US dollars unless otherwise
indicated. Results reflect combined company performance following
completion of merger with Ainsworth Lumber Co. Ltd. (Ainsworth) and
all prior period comparatives have been restated.
Q2 2015 HIGHLIGHTS
- Merger with Ainsworth completed on March 31, 2015
- Captured merger synergies of $4
million (annualized); on track to reach 50% run rate of
$45 million target by
year-end
- Adjusted EBITDA of $18 million
compared to $14 million in the first
quarter
- Record quarterly production at four mills
- Margin improvement program gains of $21 million year-to-date
- Declared quarterly dividend of CAD $0.10 per share
TORONTO, July 30, 2015 /CNW/ - Norbord Inc. (TSX:
NBD) today reported Adjusted EBITDA of $18
million in the second quarter of 2015 compared to
$14 million in the first quarter of
2015 and $46 million in the second
quarter of 2014. The year-over-year change is primarily due
to lower North American oriented strand board (OSB) prices.
North American operations generated Adjusted EBITDA of $11 million in the quarter, unchanged from the
prior quarter and compared to $37
million in the same quarter last year. European
operations delivered Adjusted EBITDA of $10
million in the quarter versus $7
million in the prior quarter and $12
million in the same quarter last year.
"The poor North American OSB demand/capacity ratio continued to
impact OSB prices in the second quarter," said Peter Wijnbergen,
Norbord's President and CEO. "We curtailed production at
several mills in response to the slower than expected rebound in
new home construction demand. However, the May and June US
housing data was encouraging, we are starting to see a pick-up in
export orders and our sales to home improvement and industrial
customers continue to grow. All this supports our belief that
the OSB market dynamic will gradually improve in the coming
quarters. In the meantime, our manufacturing costs continue
to decline as we focus on our controllables and benefit from lower
resin prices and the weaker Canadian dollar."
"In Europe, our financial
results are back on track, returning to their trend of generating
double-digit quarterly EBITDA. Improving sales volumes in our
key markets, particularly the UK, are offsetting the impact of
lower OSB prices and the weaker Euro."
"Finally, we remain focused on our integration efforts following
the completion of our merger with Ainsworth four months ago.
Of our $45 million annualized
synergies target, we have already realized $4 million from early initiatives. Our
sales and financial systems were recently integrated, and we remain
on track to achieve half of our synergies target by year-end."
Norbord recorded an adjusted loss of $13
million or $0.15 per share
(basic and diluted) in the second quarter of 2015 compared to an
adjusted loss of $15 million or
$0.18 per share (basic and diluted)
in the prior quarter and adjusted earnings of $9 million or $0.11
per basic share ($0.10 per diluted
share) in the second quarter of 2014. Adjusted earnings
exclude non-recurring items and use a normalized income tax
rate:
$
millions
|
Q2-2015
|
Q1-2015
|
Q2-2014
|
Reported (loss)
earnings
|
(23)
|
(37)
|
23
|
Costs related to
Ainsworth merger
|
3
|
7
|
-
|
Costs on early
extinguishment of Ainsworth Notes(1)
|
25
|
-
|
-
|
Revaluation gain
(loss) on Ainsworth Notes
|
-
|
23
|
(10)
|
Reported income tax
recovery
|
(22)
|
(14)
|
(1)
|
Income tax recovery
(expense) at statutory rate
|
4
|
6
|
(3)
|
Adjusted (loss)
earnings
|
(13)
|
(15)
|
9
|
(1) See Developments
section for further information.
|
|
|
|
Market Conditions
In North America, June
year-to-date US housing starts were up 11% versus the same period
in 2014. Single family starts, which use approximately three
times more OSB than multi-family, increased by 9%. Permits
were 16% higher year-over-year and the seasonally-adjusted
annualized rate stands at 1.34 million. The consensus
forecast from US housing economists is 1.1 million starts for 2015,
which would be a 10% improvement over last year.
Despite improving US new home construction activity, prices
continue to be impacted by the poor OSB demand/capacity ratio.
While North Central, South East and Western Canada benchmark OSB prices all
increased earlier in the quarter, this upward momentum flattened in
June. The North Central benchmark OSB price averaged
$193 per thousand square feet (Msf)
(7/16-inch basis) for the quarter, unchanged from the previous
quarter and compared to $219 per Msf
in the same quarter last year. In the South East region,
where approximately 35% of Norbord's North American OSB capacity is
located, benchmark prices averaged $174 per Msf compared to $175 per Msf in the prior quarter and
$199 per Msf in the same quarter last
year. The Western Canada benchmark averaged $152 per Msf for the quarter, compared to
$159 per Msf in the previous quarter
and $206 per Msf in the same quarter
last year.
In Europe, panel demand
continues to grow, reflecting improving housing markets and OSB
substitution in the Company's core geographies, particularly the UK
and Germany. However, OSB
prices remain under pressure due to the weaker Euro and the
redirection of eastern European supply toward the west as a result
of the ongoing Ukraine conflict.
Particleboard prices remained steady, while medium density
fibreboard (MDF) prices were down slightly. As a result,
second quarter average panel prices were down 3% from the prior
quarter and 12% lower than the same quarter last year.
Performance
North American OSB shipments increased by 10%
quarter-over-quarter, primarily due to increased productivity and
more fiscal days in the second quarter. Second quarter
shipments were in line with the same quarter last year as
improved mill productivity offset production curtailments.
Norbord's operating North American OSB mills produced at
approximately 90% of stated capacity (excluding the two curtailed
mills in Huguley, Alabama and
Val-d'Or, Quebec) compared to 85%
in the prior quarter and 90% in the same quarter last year.
Mill productivity improved over both comparative quarters with
capacity utilization impacted by the level of production
curtailments.
Norbord's North American OSB cash production costs per unit
decreased by 5% compared to the prior quarter and 7% versus the
same quarter last year due to lower resin prices, improved
productivity and lower raw material use. The year-over-year
decline was also driven by the weaker Canadian dollar.
In Europe, Norbord's shipments
were 3% higher versus the prior quarter and 11% higher than the
same quarter last year. Three of the four mills achieved
quarterly production records and the European operations produced
at approximately 100% of stated capacity compared to 95% in the
prior quarter and 95% in the same quarter last year (based on
restated capacity). As previously reported, at year-end 2014
the annual capacity at three of the four mills was restated.
Norbord's mills delivered Margin Improvement Program (MIP) gains
of $21 million year-to-date primarily
from improved productivity and lower raw material use.
Capital investments totaled $28
million year-to-date compared to $53
million in 2014 due to the larger scope of capital projects
undertaken last year. Norbord's 2015 planned capital
expenditures remain targeted at $70
million and include further debottlenecking and cost
reduction projects under the Company's multi-year capital
reinvestment strategy.
Operating working capital was $151
million at quarter-end compared to $146 million in the prior quarter and
$158 million at the end of the same
quarter last year with changes primarily driven by seasonality,
timing and foreign exchange translation.
At quarter-end, Norbord had unutilized liquidity of $326 million, consisting of $10 million in cash and $316 million in
unused credit lines. At quarter-end, $50 million was drawn under the accounts
receivable securitization program. The Company's tangible net
worth was $738 million and net debt
to total capitalization on a book basis was 50%. Both ratios
remain well within bank covenants. As previously disclosed,
following the Ainsworth merger Norbord amended its revolving bank
lines to reset the tangible net worth covenant to $450 million and increased its accounts
receivable securitization program commitment limit from
$100 million to $125 million.
Developments
As previously announced, Norbord completed its merger with
Ainsworth on March 31, 2015.
Under the terms of the all-share transaction, Norbord acquired all
of the outstanding common shares of Ainsworth and Ainsworth
shareholders received 0.1321 of a share of Norbord for each
Ainsworth share. Ainsworth became a wholly-owned subsidiary
of Norbord.
On April 16, 2015, Norbord
completed the issuance of $315
million in senior secured notes due 2023 with an interest
rate of 6.25%. Debt issue costs of $6
million were incurred in connection with the issuance. The
Company used the proceeds to redeem prior to maturity the
$315 million senior secured notes due
2017 that were assumed upon closing of the merger on March 31, 2015. As a result of the early
redemption, a cash premium of $13
million was paid, a $1 million
non-cash charge related to net unamortized debt issue costs was
recorded and an $11 million non-cash
charge to extinguish the related derivative financial instrument
was recognized.
Dividend
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.
Taking into account weaker than expected North American OSB
prices to-date in 2015, to maintain flexibility in the Company's
capital structure, as well as to fund growth and other attractive
capital investment opportunities, the Board of Directors has
adjusted the quarterly dividend level to CAD $0.10 per common share. Accordingly, the
Board declared a quarterly dividend of CAD $0.10 per common share, payable on September 21, 2015 to shareholders of record on
September 1, 2015.
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.
Additional Information
Norbord's Q2 2015 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) and are available in the
investor section of the Company's website at
www.norbord.com. Shareholders are encouraged to read this
material.
Conference Call
Norbord will hold a conference call for analysts and
institutional investors on Thursday, July
30, 2015 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
August 28, 2015 by dialing
1-888-203-1112 or 647-436-0148. The passcode is 7893223.
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 $1.8 billion and employs approximately 2,600
people at 17 plant locations in the
United States, Canada and
Europe. Norbord is a publicly traded company listed on the
Toronto Stock Exchange under the symbol NBD.
This news release contains forward-looking statements, as
defined in applicable 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, words such as "expect," "believe," "forecast,"
"likely," "support," "target," "consider," "continue," "suggest,"
"intend," "should," "appear," "would," "will," "will not,"
"plan," "can," "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: general economic conditions; risks
inherent with product concentration; effects of competition and
product pricing pressures; risks inherent with customer dependence;
effects of variations in the price and availability of
manufacturing inputs; risks inherent with a capital intensive
industry; ability to realize synergies; and other risks and factors
described from time to time in filings with Canadian securities
regulatory authorities.
Except as required by applicable laws, Norbord does not
undertake to update any forward-looking statements, 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 January 27,
2015 Annual Information Form and the cautionary statement
contained in the "Forward-Looking Statements" section
of the 2014 Management's Discussion and Analysis dated
January 27, 2015 and Q2 2015
Management's Discussion and Analysis dated July 29, 2015.
Norbord defines Adjusted EBITDA as earnings (loss) before
finance costs, income taxes, depreciation and other unusual or
non-recurring items, and adjusted earnings (loss) as earnings
(loss) determined in accordance with IFRS before unusual or
non-recurring items and using a normalized income tax rate.
Adjusted EBITDA and adjusted earnings (loss) are non-International
Financial Reporting Standards (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 Q2 2015
Management's Discussion and Analysis dated July 29, 2015 for a quantitative reconciliation
of Adjusted EBITDA and adjusted earnings (loss) to earnings (the
most directly comparable IFRS measure).
To Our Shareholders,
This is our first quarter following the merger
with Ainsworth and in spite of a slower than expected recovery in
OSB demand in North America, it is
an exciting time for our Company. Through the transaction with
Ainsworth, we now have the opportunity to build a leading global
wood products company, active on three continents, better
positioned to serve our customers, and able to achieve higher
returns for our shareholders. We expect to realize the full
benefits of the merger over the next several quarters.
Adjusted EBITDA for the quarter was $18 million, which is largely in line with the
previous quarter. Low OSB prices have been offset by strong
operational performance and cost reductions across all of our
mills. Long time Norbord shareholders will notice that our North
American numbers now include production at our mills in
British Columbia, Alberta and Ontario, as well as results from our Asian
export business.
With all the positive headlines coming out of the
US housing market, you may be wondering why this did not flow
through to our financial performance in the second quarter. The
most recent numbers for June show that US housing starts have
increased 11% year-to-date and are currently at a 1.17 million
annual pace. But the APA industry production statistics show this
did not translate into increased demand on North American OSB
mills. We believe there were two main drivers: a pro-dealer network
(which services the large home builders) that was destocking
inventories and the stronger US dollar which has lowered overseas
export volume. As a result, industry-wide operating capacity was
more than sufficient to satisfy demand.
While this has made the first half of this year
disappointing, we see encouraging signs in the market. Asian export
orders are starting to pick-up again, and this region remains an
exciting area with real growth potential for Norbord. In the US,
June housing permits were at a 1.34 million annual pace and we
believe pro-dealer inventories are now at rock bottom levels. These
suggest increased demand, and a gradual improvement of the industry
demand/capacity ratio, which we would expect to lead to better OSB
prices.
Other positive signs include our year-to-date
sales to North American home improvement and furniture customers
that were up about 8%. Sales in these channels are an important
aspect of our diversification strategy away from new home
construction, giving us more consistent shipment volumes during
periods of volatile homebuilding-related demand.
Our European business performed well this
quarter. The United Kingdom is our
key market and we have realized double-digit year-over-year gains
in sales there. Sales volume for all our panel products was up 5%
versus the prior quarter and 12% versus the previous year. These
higher volumes have helped offset the softer OSB price environment
and put our European financial results back on trend.
All of our mills continued to operate well, with
increased uptime and speed. These productivity improvements
combined with further progress on reducing raw material use
resulted in $21 million in
year-to-date Margin Improvement Program gains. As a result, cash
manufacturing costs – a key operational metric – decreased at both
our North American and European mills and are now 12% lower than 18
months ago.
The key corporate priority this year is the
integration of the former Ainsworth operations into the 'new
Norbord'. Since the completion of the merger in April we have made
great strides, including moving the two companies to single sales
and financial reporting systems at the end of the quarter. We were
able to complete this conversion in three months, without any
disruption to the business, and our customers are telling us that
the transition has been seamless from their perspective. As part of
the integration effort we have achieved a number of early savings
and have already captured $4 million
in annualized synergies. Corporate synergies are already locked in
and will be evident in our numbers starting in Q4. The majority of
the remaining opportunities involve optimizing our product mix
across a broader platform to lower freight and manufacturing costs
and implementing a number of process and technology changes across
our seventeen mills. We are on track to reach half of our
$45 million annualized synergy target
by year-end.
In today's press release, you will see that the
Board has adjusted the quarterly dividend level to CAD $0.10 per share. For the reasons set out above,
we did not see the expected improvement in the North American OSB
market during the seasonally stronger second quarter. This had us
re-evaluate our outlook for the near term and take the prudent step
of reducing our dividend payout. We remain committed to returning
cash to shareholders, and will continue to evaluate the dividend
level as the US housing recovery plays out.
Looking further ahead, we remain convinced that
OSB demand will improve. Our operational results, particularly our
continued progress on costs, demonstrate that the fundamentals of
our company are solid. Our financial results this quarter are not
where we would like them to be. However, we are confident we will
see the benefits of steadily improving market conditions in our
results as we focus on continuing to execute on our business
strategy and achieving the merger synergies.
Thank you for your continued confidence and investment in
Norbord. I look forward to reporting on our continued
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 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 achievement expressed or
implied by the forward-looking statements. See the cautionary
language in the Forward-Looking Statements section of the 2014
Management's Discussion and Analysis dated January 27, 2015 and Q2 2015 Management's
Discussion and Analysis dated July 29,
2015.
Norbord defines Adjusted EBITDA as earnings
(loss) before finance costs, income taxes, depreciation and other
unusual or non-recurring items. Adjusted EBITDA is a
non-International Financial Reporting Standards (IFRS) financial
measure, does not have any standardized meaning prescribed by IFRS
and is therefore unlikely to be comparable to similar measures
presented by other companies. See "Non-IFRS Financial Measures" in
Norbord's Q2 2015 Management's Discussion and Analysis dated
July 29, 2015 for a quantitative
reconciliation of Adjusted EBITDA to earnings (the most directly
comparable IFRS measure).
Consolidated Balance Sheets
(unaudited)
(US $ millions)
|
|
Jun 27,
2015
|
Dec 31,
2014
|
Jan 1,
2014
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
10
|
$
92
|
$
327
|
Accounts
receivable
|
|
166
|
140
|
155
|
Tax
receivable
|
|
2
|
2
|
10
|
Inventory
|
|
179
|
184
|
169
|
|
|
357
|
418
|
661
|
Non-current
assets
|
|
|
|
|
Property, plant
and equipment
|
|
1,277
|
1,341
|
1,388
|
Deferred income
tax assets
|
|
6
|
29
|
14
|
Other
assets
|
|
30
|
36
|
43
|
|
|
1,313
|
1,406
|
1,445
|
|
|
$
1,670
|
$
1,824
|
$
2,106
|
Liabilities and
shareholders' equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
$
194
|
$
218
|
$
246
|
Current portion
of long-term debt
|
|
-
|
-
|
9
|
|
|
194
|
218
|
255
|
Non-current
liabilities
|
|
|
|
|
Long-term
debt
|
|
744
|
748
|
746
|
Other long-term
debt
|
|
50
|
-
|
-
|
Other
liabilities
|
|
37
|
47
|
40
|
Deferred income
tax liabilities
|
|
98
|
152
|
186
|
|
|
929
|
947
|
972
|
Shareholders'
equity
|
|
547
|
659
|
879
|
|
|
$
1,670
|
$
1,824
|
$
2,106
|
Consolidated Statements of Earnings
(unaudited)
Periods ended Jun 27 and Jun 28 (US $
millions, except per share information)
|
|
Q2
2015
|
Q2
2014
|
6
mos
2015
|
6 mos
2014
|
Sales
|
|
$ 365
|
$ 419
|
$ 716
|
$ 820
|
Cost of
sales
|
|
(344)
|
(369)
|
(677)
|
(730)
|
General and
administrative expenses
|
|
(3)
|
(4)
|
(7)
|
(8)
|
Earnings before the
under-noted
|
|
18
|
46
|
32
|
82
|
|
|
|
|
|
|
Foreign exchange gain
(loss) on Ainsworth Notes
|
|
-
|
11
|
(28)
|
(1)
|
Costs on early
extinguishment of Ainsworth Notes
|
|
(25)
|
-
|
(25)
|
-
|
(Loss) gain on
derivative financial instrument on Ainsworth Notes
|
|
-
|
(1)
|
5
|
3
|
Merger transaction
costs
|
|
(1)
|
-
|
(8)
|
-
|
Severance incurred to
achieve Merger synergies
|
|
(2)
|
-
|
(2)
|
-
|
Costs related to
terminated LP acquisition
|
|
-
|
-
|
-
|
(2)
|
Earnings before
finance costs, income tax and depreciation
|
|
(10)
|
56
|
(26)
|
82
|
Finance
costs
|
|
(13)
|
(13)
|
(27)
|
(27)
|
Depreciation
|
|
(22)
|
(21)
|
(43)
|
(41)
|
Income tax
recovery
|
|
22
|
1
|
36
|
2
|
(Loss)
earnings
|
|
$ (23)
|
$ 23
|
$ (60)
|
$ 16
|
(Loss) earnings per
common share
|
|
|
|
|
|
Basic and
Diluted
|
|
$ (0.27)
|
$ 0.27
|
$ (0.70)
|
$ 0.19
|
Consolidated Statements of Comprehensive (Loss) Income
(unaudited)
Periods ended Jun 27 and Jun 28 (US $
millions)
|
|
Q2
2015
|
Q2
2014
|
6
mos
2015
|
6 mos
2014
|
(Loss)
earnings
|
|
$ (23)
|
$ 23
|
$ (60)
|
$ 16
|
Other comprehensive
income (loss), net of tax
|
|
|
|
|
|
Items that will not be
reclassified to earnings:
|
|
|
|
|
|
Actuarial gain
(loss) on post-employment obligation
|
|
13
|
(4)
|
4
|
(7)
|
Items that may be
reclassified subsequently to earnings:
|
|
|
|
|
|
Foreign currency
translation gain (loss) on foreign operations
|
|
5
|
19
|
(33)
|
1
|
Net gain on Euro
cash flow hedge
|
|
1
|
-
|
1
|
-
|
Other comprehensive
income (loss), net of tax
|
|
19
|
15
|
(28)
|
(6)
|
Comprehensive (loss)
income
|
|
$ (4)
|
$ 38
|
$ (88)
|
$ 10
|
Consolidated Statements of Changes in Shareholders' Equity
(unaudited)
Periods ended Jun 27 and Jun 28 (US $
millions)
|
|
Q2
2015
|
Q2
2014
|
6
mos
2015
|
6 mos
2014
|
Share
capital
|
|
|
|
|
|
Balance, beginning of
period
|
|
$ 1,236
|
$ 1,234
|
$ 1,235
|
$ 1,234
|
Issue of common
shares upon closing of Merger
|
|
96
|
-
|
96
|
-
|
Issue of common
shares upon exercise of options and Dividend Reinvestment
Plan
|
|
2
|
1
|
3
|
1
|
Balance, end of
period
|
|
$ 1,334
|
$ 1,235
|
$ 1,334
|
$ 1,235
|
Merger
reserve
|
|
|
|
|
|
Balance, beginning of
period
|
|
$
-
|
$
-
|
$
-
|
$
-
|
Issue of common
shares upon closing of Merger
|
|
(96)
|
-
|
(96)
|
-
|
Balance, end of
period
|
|
$ (96)
|
$
-
|
$ (96)
|
$
-
|
Contributed
surplus
|
|
|
|
|
|
Balance, beginning of
period
|
|
$ 10
|
$
8
|
$
9
|
$ 8
|
Stock-based
compensation
|
|
-
|
-
|
1
|
-
|
Balance, end of
period
|
|
$ 10
|
$
8
|
$
10
|
$ 8
|
Retained
earnings
|
|
|
|
|
|
Balance, beginning of
period
|
|
$ (509)
|
$ ( 344)
|
$ (461)
|
$ (308)
|
(Loss)
earnings
|
|
(23)
|
23
|
(60)
|
16
|
Common share
dividends
|
|
(17)
|
(29)
|
(28)
|
(58)
|
Balance, end of
period(i)
|
|
$ (549)
|
$ (350)
|
$ (549)
|
$ (350)
|
Accumulated other
comprehensive (loss) income
|
|
|
|
Balance, beginning of
period
|
|
$ (171)
|
$ (76)
|
$ (124)
|
$ (55)
|
Other comprehensive
income (loss)
|
|
19
|
15
|
(28)
|
(6)
|
Balance, end of
period
|
|
$ (152)
|
$ (61)
|
$ (152)
|
$ (61)
|
Shareholders'
equity
|
|
$ 547
|
$ 832
|
$ 547
|
$ 832
|
(i)
Retained earnings comprised of:
|
|
|
|
|
|
Deficit arising on
cashless exercise of warrants in 2013
|
|
|
$ (263)
|
$ (263)
|
All other retained
earnings
|
|
|
|
(286)
|
(87)
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows
(unaudited)
Periods ended Jun 27 and Jun 28 (US $
millions)
|
|
Q2
2015
|
Q2
2014
|
6
mos
2015
|
6 mos
2014
|
CASH PROVIDED BY
(USED FOR):
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
(Loss)
earnings
|
|
$ (23)
|
$ 23
|
$ (60)
|
$ 16
|
Items not affecting
cash:
|
|
|
|
|
|
Depreciation
|
|
22
|
21
|
43
|
41
|
Deferred
income tax
|
|
(22)
|
(4)
|
(34)
|
(7)
|
Loss
(gain) on derivative financial instrument on Ainsworth
Notes
|
|
-
|
1
|
(5)
|
(3)
|
Foreign
exchange (gain) loss on Ainsworth Notes
|
|
-
|
(11)
|
28
|
1
|
Other
items
|
|
20
|
(5)
|
18
|
6
|
|
|
(3)
|
25
|
(10)
|
54
|
Net change in
non-cash operating working capital balances
|
|
-
|
(10)
|
(45)
|
(81)
|
Net change in tax
receivable
|
|
-
|
-
|
-
|
1
|
|
|
(3)
|
15
|
(55)
|
(26)
|
Investing
activities
|
|
|
|
|
|
Investment in
property, plant and equipment
|
|
(15)
|
(30)
|
(28)
|
(56)
|
Investment in
intangible assets
|
|
(1)
|
(1)
|
(2)
|
(1)
|
|
|
(16)
|
(31)
|
(30)
|
(57)
|
Financing
activities
|
|
|
|
|
|
Common share
dividends paid
|
|
(17)
|
(29)
|
(27)
|
(58)
|
Issuance of
debt
|
|
315
|
-
|
315
|
-
|
Debt issue
costs
|
|
(6)
|
-
|
(6)
|
(1)
|
Repayment of
debt
|
|
(315)
|
-
|
(315)
|
-
|
Premium on early
extinguishment of Ainsworth Notes
|
|
(13)
|
-
|
(13)
|
-
|
Accounts receivable
securitization drawings
|
|
5
|
-
|
50
|
-
|
Repayment of bank
advances, net
|
|
(3)
|
-
|
-
|
-
|
Repayment on
equipment financing loans
|
|
-
|
(2)
|
-
|
(3)
|
Issue of common
shares
|
|
1
|
-
|
1
|
-
|
|
|
(33)
|
(31)
|
5
|
(62)
|
Foreign exchange
revaluation on cash and cash equivalents held
|
|
10
|
5
|
(2)
|
-
|
Cash and cash
equivalents
|
|
|
|
|
|
Decrease during
period
|
|
(42)
|
(42)
|
(82)
|
(145)
|
Balance, beginning of
period
|
|
52
|
224
|
92
|
327
|
Balance, end of
period
|
|
$ 10
|
$ 182
|
$ 10
|
$ 182
|
SOURCE Norbord Inc.