West Fraser Announces Second Quarter Results
VANCOUVER, BC--(Marketwired - July 21, 2016) - West Fraser Timber Co. Ltd. reported earnings of $98 million or $1.22 basic earnings per share on sales of $1,111 million in the second quarter of 2016. These results compare with previous periods as shown in the table below.
Adjusted EBITDA, Adjusted earnings and Adjusted basic EPS as described in this News Release reflect the adjustments described in the tables referred to in the section titled "Non-IFRS Measures" on page 12 of our 2016 second quarter Management's Discussion & Analysis.
($ millions except earnings per | 2016 | 2015 | ||||||||
share ("EPS")) | Q2 | Q1 | YTD | Q2 | YTD | |||||
Sales | 1,111 | 1,077 | 2,188 | 1,029 | 2,043 | |||||
Adjusted EBITDA1 | 138 | 130 | 268 | 72 | 245 | |||||
Operating earnings | 120 | 79 | 199 | 18 | 143 | |||||
Earnings | 98 | 42 | 140 | 14 | 63 | |||||
Basic EPS ($) | 1.22 | 0.51 | 1.72 | 0.17 | 0.76 | |||||
Adjusted Earnings1 | 64 | 49 | 113 | 12 | 111 | |||||
Adjusted basic EPS ($)1 | 0.80 | 0.60 | 1.40 | 0.15 | 1.32 |
1. | In this News Release, reference is made to Adjusted EBITDA, Adjusted earnings and Adjusted EPS (collectively "these measures"). We believe that, in addition to earnings, these measures are useful performance indicators. None of these measures is a generally accepted earnings measure under International Financial Reporting Standards ("IFRS") and none has a standardized meaning prescribed by IFRS. Investors are cautioned that none of these measures should be considered as an alternative to earnings, EPS or cash flow, as determined in accordance with IFRS. As there is no standardized method of calculating any of these measures, our method of calculating each of them may differ from the methods used by other entities and, accordingly, our use of any of these measures may not be directly comparable to similarly titled measures used by other entities. |
Operational Results
In the quarter our lumber operations generated operating earnings of $78 million (Q1-16 - $63 million) and Adjusted EBITDA of $113 million (Q1-16 - $100 million). Increased U.S. lumber prices and strong sales partially offset by a stronger Canadian dollar contributed to the improvement in earnings. Greater sawmill efficiency after the completion of a number of capital improvements contributed to increased production at several of our operations.
The panel segment, which includes plywood, LVL and MDF, generated operating earnings in the quarter of $18 million (Q1-16 - $12 million) and Adjusted EBITDA of $21 million (Q1-16 - $15 million). Improving plywood prices and increased shipments were the primary contributors to the improved earnings.
Our pulp & paper operations generated an operating loss of $5 million (Q1-16 - earnings of $5 million) and Adjusted EBITDA of $4 million (Q1-16 - $14 million). A stronger Canadian dollar was the main contributor to the reduced earnings.
Outlook
Our second quarter operating results affirm our expectation that we should exceed our 2015 lumber production by over 400 MMfbm. We expect to see continued gradual improvement in lumber prices as U.S. new home construction returns to average historical levels.
In the event that a softwood lumber agreement is not reached by mid-October we are prepared for the potential that the U.S. industry will petition the U.S. government to initiate trade action against Canadian softwood lumber imports to the U.S. Ted Seraphim, our President and CEO, said "We expect that our geographic diversification and investment of capital to modernize and improve the efficiency of our mills should substantially mitigate any negative effect of any trade action."
Management's Discussion & Analysis ("MD&A")
The Company's MD&A is available on the Company's website: www.westfraser.com and on the System for Electronic Document Analysis and Retrieval at www.sedar.com under the Company's profile.
The Company
West Fraser is a diversified wood products company producing lumber, LVL, MDF, plywood, pulp, newsprint, wood chips and energy with facilities in western Canada and the southern United States.
Forward-Looking Statements
This Report contains historical information, descriptions of current circumstances and statements about potential future developments. The latter, which are forward-looking statements and are included under the heading "Outlook", are presented to provide reasonable guidance to the reader but their accuracy depends on a number of assumptions and is subject to various risks and uncertainties. Actual outcomes and results will depend on a number of factors that could affect the ability of the Company to execute its business plans, including those matters described in the 2015 annual Management's Discussion & Analysis under "Risks and Uncertainties", and may differ materially from those anticipated or projected. Accordingly, readers should exercise caution in relying upon forward-looking statements and the Company undertakes no obligation to publicly revise them to reflect subsequent events or circumstances, except as required by applicable securities laws.
Conference Call
Investors are invited to listen to the quarterly conference call on Friday, July 22, 2016 at 8:30 a.m. Pacific Time (11:30 a.m. Eastern Time) by dialing 1-866-225-0198 (toll- free North America). The call may also be accessed through West Fraser's website at www.westfraser.com.
West Fraser Timber Co. Ltd. | ||||||
Condensed Consolidated Balance Sheets | ||||||
(in millions of Canadian dollars, except where indicated - unaudited) | ||||||
June 30 | December 31 | |||||
2016 | 2015 | |||||
Assets | ||||||
Current assets | ||||||
Cash and short-term investments | $ | 27 | $ | 13 | ||
Receivables | 333 | 298 | ||||
Income taxes receivable | 13 | 11 | ||||
Inventories (note 3) | 541 | 631 | ||||
Prepaid expenses | 30 | 18 | ||||
944 | 971 | |||||
Property, plant and equipment | 1,599 | 1,609 | ||||
Timber licences | 560 | 570 | ||||
Goodwill and other intangibles | 363 | 369 | ||||
Other assets | 13 | 36 | ||||
Deferred income tax assets | 58 | 80 | ||||
$ | 3,537 | $ | 3,635 | |||
Liabilities | ||||||
Current liabilities | ||||||
Cheques issued in excess of funds on deposit | $ | 36 | $ | 29 | ||
Operating loans (note 4) | 144 | 178 | ||||
Payables and accrued liabilities | 316 | 351 | ||||
Reforestation and decommissioning obligations | 47 | 48 | ||||
543 | 606 | |||||
Long-term debt (note 4) | 395 | 423 | ||||
Other liabilities (note 5) | 416 | 269 | ||||
Deferred income tax liabilities | 162 | 190 | ||||
1,516 | 1,488 | |||||
Shareholders' Equity | ||||||
Share capital (note 7) | 560 | 579 | ||||
Accumulated other comprehensive earnings | 129 | 164 | ||||
Retained earnings | 1,332 | 1,404 | ||||
2,021 | 2,147 | |||||
$ | 3,537 | $ | 3,635 |
Number of Common shares and Class B Common shares outstanding at July 21, 2016 was 79,832,726. |
West Fraser Timber Co. Ltd. | ||||||||||||||||
Condensed Consolidated Statements of Changes in Shareholders' Equity | ||||||||||||||||
(in millions of Canadian dollars, except where indicated - unaudited) | ||||||||||||||||
April 1 to June 30 | January 1 to June 30 | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Share capital | ||||||||||||||||
Balance - beginning of period | $ | 571 | $ | 587 | $ | 579 | $ | 587 | ||||||||
Common share repurchases | (11 | ) | - | (19 | ) | - | ||||||||||
Balance - end of period | $ | 560 | $ | 587 | $ | 560 | $ | 587 | ||||||||
Accumulated other comprehensive earnings | ||||||||||||||||
Balance - beginning of period | $ | 132 | $ | 106 | $ | 164 | $ | 55 | ||||||||
Translation gain (loss) on foreign operations | (3 | ) | (8 | ) | (35 | ) | 43 | |||||||||
Balance - end of period | $ | 129 | $ | 98 | $ | 129 | $ | 98 | ||||||||
Retained earnings | ||||||||||||||||
Balance - beginning of period | $ | 1,338 | $ | 1,385 | $ | 1,404 | $ | 1,387 | ||||||||
Actuarial gain (loss) on post-retirement benefits | (45 | ) | 54 | (105 | ) | 9 | ||||||||||
Common share repurchases | (53 | ) | - | (95 | ) | - | ||||||||||
Earnings for the period | 98 | 14 | 140 | 63 | ||||||||||||
Dividends | (6 | ) | (6 | ) | (12 | ) | (12 | ) | ||||||||
Balance - end of period | $ | 1,332 | $ | 1,447 | $ | 1,332 | $ | 1,447 | ||||||||
Shareholders' Equity | $ | 2,021 | $ | 2,132 | $ | 2,021 | $ | 2,132 | ||||||||
West Fraser Timber Co. Ltd. | ||||||||||||||||
Condensed Consolidated Statements of Earnings and Comprehensive Earnings | ||||||||||||||||
(in millions of Canadian dollars, except where indicated - unaudited) | ||||||||||||||||
April 1 to June 30 | January 1 to June 30 | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Sales | $ | 1,111 | $ | 1,029 | $ | 2,188 | $ | 2,043 | ||||||||
Costs and expenses | ||||||||||||||||
Cost of products sold | 775 | 749 | 1,524 | 1,406 | ||||||||||||
Freight and other distribution costs | 156 | 159 | 315 | 303 | ||||||||||||
Export taxes | - | 12 | - | 12 | ||||||||||||
Amortization | 48 | 45 | 97 | 92 | ||||||||||||
Selling, general and administration | 42 | 37 | 81 | 77 | ||||||||||||
Equity-based compensation | (30 | ) | 9 | (28 | ) | 10 | ||||||||||
991 | 1,011 | 1,989 | 1,900 | |||||||||||||
Operating earnings | 120 | 18 | 199 | 143 | ||||||||||||
Finance expense | (7 | ) | (7 | ) | (15 | ) | (15 | ) | ||||||||
Other (note 9) | 7 | 21 | (9 | ) | (26 | ) | ||||||||||
Earnings before tax | 120 | 32 | 175 | 102 | ||||||||||||
Tax provision (note 10) | (22 | ) | (18 | ) | (35 | ) | (39 | ) | ||||||||
Earnings | $ | 98 | $ | 14 | $ | 140 | $ | 63 | ||||||||
Earnings per share (dollars) (note 11) | ||||||||||||||||
Basic | $ | 1.22 | $ | 0.17 | $ | 1.72 | $ | 0.76 | ||||||||
Diluted | $ | 0.86 | $ | 0.17 | $ | 1.36 | $ | 0.76 | ||||||||
Comprehensive earnings | ||||||||||||||||
Earnings | $ | 98 | $ | 14 | $ | 140 | $ | 63 | ||||||||
Other comprehensive earnings | ||||||||||||||||
Translation gain (loss) on foreign operations | (3 | ) | (8 | ) | (35 | ) | 43 | |||||||||
Actuarial gain (loss) on post-retirement benefits 1 | (45 | ) | 54 | (105 | ) | 9 | ||||||||||
Comprehensive earnings | $ | 50 | $ | 60 | $ | - | $ | 115 |
1. | Net of tax recovery of $17 million for the three months ended June 30, 2016 (three months ended June 30, 2015 - $19 million tax provision) and $38 million for the six months ended June 30, 2016 (six months ended June 30, 2015 - $2 million tax provision). |
West Fraser Timber Co. Ltd. | |||||||||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||||||||
(in millions of Canadian dollars, except where indicated - unaudited) | |||||||||||||||||
April 1 to June 30 | January 1 to June 30 | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Operating activities | |||||||||||||||||
Earnings | $ | 98 | $ | 14 | $ | 140 | $ | 63 | |||||||||
Adjustments | |||||||||||||||||
Amortization | 48 | 45 | 97 | 92 | |||||||||||||
Finance expense | 7 | 7 | 15 | 15 | |||||||||||||
Foreign exchange loss (gain) on long-term financing | (1 | ) | (4 | ) | (10 | ) | 23 | ||||||||||
Loss (gain) on power agreements, net of settlement costs | - | (18 | ) | 11 | 12 | ||||||||||||
Post-retirement expense | 18 | 15 | 35 | 28 | |||||||||||||
Contributions to post-retirement benefit plans | (16 | ) | (18 | ) | (28 | ) | (21 | ) | |||||||||
Tax provision | 22 | 18 | 35 | 39 | |||||||||||||
Income taxes received (paid) | 4 | (12 | ) | (5 | ) | (54 | ) | ||||||||||
Other | (28 | ) | (6 | ) | (29 | ) | 4 | ||||||||||
Changes in non-cash working capital | |||||||||||||||||
Receivables | 6 | 28 | (30 | ) | (26 | ) | |||||||||||
Inventories | 180 | 119 | 84 | 62 | |||||||||||||
Prepaid expenses | (10 | ) | (15 | ) | (15 | ) | (16 | ) | |||||||||
Payables and accrued liabilities | (47 | ) | 21 | (42 | ) | 19 | |||||||||||
Cash flows from operating activities | 281 | 194 | 258 | 240 | |||||||||||||
Financing activities | |||||||||||||||||
Repayment of operating loans | (150 | ) | (124 | ) | (34 | ) | (75 | ) | |||||||||
Finance expense paid | (10 | ) | (9 | ) | (11 | ) | (11 | ) | |||||||||
Dividends | (6 | ) | (6 | ) | (12 | ) | (12 | ) | |||||||||
Common share repurchases | (62 | ) | - | (112 | ) | - | |||||||||||
Cash flows from financing activities | (228 | ) | (139 | ) | (169 | ) | (98 | ) | |||||||||
Investing activities | |||||||||||||||||
Additions to capital assets | (57 | ) | (49 | ) | (106 | ) | (118 | ) | |||||||||
Government assistance | 3 | - | 7 | - | |||||||||||||
Other | - | 6 | - | 6 | |||||||||||||
Cash flows from investing activities | (54 | ) | (43 | ) | (99 | ) | (112 | ) | |||||||||
Change in cash | (1 | ) | 12 | (10 | ) | 30 | |||||||||||
Foreign exchange effect on cash | 13 | 2 | 17 | 7 | |||||||||||||
Cash - beginning of period | (21 | ) | 8 | (16 | ) | (15 | ) | ||||||||||
Cash - end of period | $ | (9 | ) | $ | 22 | $ | (9 | ) | $ | 22 | |||||||
Cash consists of | |||||||||||||||||
Cash and short-term investments | $ | 27 | $ | 30 | |||||||||||||
Cheques issued in excess of funds on deposit | (36 | ) | (8 | ) | |||||||||||||
$ | (9 | ) | $ | 22 | |||||||||||||
West Fraser Timber Co. Ltd. |
Notes to Condensed Consolidated Interim Financial Statements |
(figures are in millions of dollars, except where indicated - unaudited) |
1. | Nature of operations |
West Fraser Timber Co. Ltd. ("West Fraser", "we", "us" or "our") is a diversified wood products company producing lumber, LVL, MDF, plywood, pulp, newsprint, wood chips and energy with facilities in western Canada and the southern United States. Our executive office is located at 858 Beatty Street, Suite 501, Vancouver, British Columbia. West Fraser was formed by articles of amalgamation under the Business Corporations Act (British Columbia) and is registered in British Columbia, Canada. Our Common shares are listed for trading on the Toronto Stock Exchange under the symbol WFT.
2. | Basis of presentation and statement of compliance |
These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting as issued by the International Accounting Standards Board and using the same accounting policies and methods of their application as the December 31, 2015 annual financial statements. These condensed consolidated interim financial statements should be read in conjunction with our 2015 annual financial statements.
3. | Inventories |
Inventories at June 30, 2016 were written down by $11 million (March 31, 2016 - $14 million December 31, 2015 - $21 million; June 30, 2015 - $22 million) to reflect net realizable value being lower than cost.
4. | Long-term debt and operating loans |
Long-term debt | ||||||||
June 30, 2016 | December 31, 2015 | |||||||
US$300 million senior notes due October 2024; interest at 4.35% | $ | 388 | $ | 415 | ||||
US$8 million note payable due October 2020; interest at 2.00% | 10 | 10 | ||||||
Note payable due in installments to 2025; interest ranging from 4.82% to 5.50% | 1 | 2 | ||||||
399 | 427 | |||||||
Deferred financing costs | (4 | ) | (4 | ) | ||||
$ | 395 | $ | 423 | |||||
The fair value of the long-term debt is $379 million (December 31, 2015 - $406 million) based on rates available to us at the balance sheet date for long-term debt with similar terms and remaining maturities.
Operating loans
We have $615 million in revolving lines of credit of which $144 million (net of deferred financing costs of $3 million) were drawn as at June 30, 2016 (December 31, 2015 - $178 million, net of deferred financing costs of $3 million).
Our revolving lines of credit consist of a $500 million revolving credit facility which matures September 30, 2020, a $32 million (US$25 million) demand line of credit dedicated to our US operations, two demand lines of credit totalling $75 million dedicated to letters of credit, and an $8 million demand line of credit dedicated to our jointly owned newsprint operation. Interest on the facilities is payable at floating rates based on Prime, U.S. base, Bankers' Acceptances or LIBOR at our option. As at June 30, 2016, letters of credit in the amount of $47 million have been issued under these facilities.
All debt is unsecured except the $8 million joint operation demand line of credit, which is secured by that joint operation's current assets.
5. | Other liabilities |
June 30, 2016 | December 31, 2015 | |||||
Post-retirement (note 6) | $ | 288 | $ | 142 | ||
Reforestation | 82 | 76 | ||||
Decommissioning | 29 | 29 | ||||
Other | 17 | 22 | ||||
$ | 416 | $ | 269 | |||
6. | Post-retirement benefits |
We maintain defined benefit and defined contribution pension plans covering a majority of our employees. The defined benefit plans generally do not require employee contributions and provide a guaranteed level of pension payable for life based either on length of service or on earnings and length of service, and in most cases do not increase after commencement of retirement. We also provide group life insurance, medical and extended health benefits to certain employee groups.
The status of the defined benefit pension plans and other retirement benefit plans, in aggregate, is as follows:
June 30, 2016 | December 31, 2015 | |||||||
Projected benefit obligations | $ | (1,743 | ) | $ | (1,532 | ) | ||
Fair value of plan assets | 1,457 | 1,409 | ||||||
Impact of minimum funding requirement | - | (11 | ) | |||||
$ | (286 | ) | $ | (134 | ) | |||
Represented by | ||||||||
Post-retirement assets | $ | 2 | $ | 8 | ||||
Post-retirement liabilities (note 5) | (288 | ) | (142 | ) | ||||
$ | (286 | ) | $ | (134 | ) | |||
The significant actuarial assumptions used to determine our balance sheet date post-retirement assets and liabilities are as follows:
June 30, 2016 | March 31, 2016 | December 31, 2015 | |||||||
Discount rate | 3.25 | % | 3.75 | % | 4.00 | % | |||
Future compensation rate increase | 3.50 | % | 3.50 | % | 3.50 | % | |||
The change in the discount rate on obligations and the difference between the actual rate of return and the discount rate on plan assets generated an actuarial gain (loss) on post-retirement benefits, included in other comprehensive earnings, as follows:
April 1 to June 30 | January 1 to June 30 | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Actuarial gain (loss) | $ | (62 | ) | $ | 73 | $ | (143 | ) | $ | 11 | ||||||
Tax recovery (provision) | 17 | (19 | ) | 38 | (2 | ) | ||||||||||
$ | (45 | ) | $ | 54 | $ | (105 | ) | $ | 9 | |||||||
7. | Share Capital |
During the three months ended June 30, 2016 we purchased 1,566,996 of our Common shares (six months ended June 30, 2016 - 2,629,748 Common shares) under our normal course issuer bid program, which expires on September 16, 2016. The purchase price averaged $41.11 per share and totalled $64 million for the three months ended June 30, 2016 (six months ended June 30, 2016 - $43.47 per share and $114 million).
8. | Insurance proceeds |
Our WestPine MDF mill, located in Quesnel British Columbia, was closed due to a fire on March 9, 2016 and will remain closed until repairs are complete. The mill is insured for property damage and business interruption. For the three and six months ended June 30, 2016 the impact on pre-tax earnings is as follows:
Estimated business interruption, less policy deductible | $ | 6 | |
Estimated gain on disposal of equipment (note 9) | 5 | ||
$ | 11 | ||
Estimated business interruption insurance is recorded as a reduction of cost of products sold in each period the mill remains closed. Estimated insurance proceeds to be spent to replace equipment are accounted for as proceeds of disposition, and the resulting gain has been included in other income.
The final amount of the insurance claim will be determined after the mill reconstruction is complete and the mill returns to expected production rates.
9. | Other |
April 1 to June 30 | January 1 to June 30 | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Foreign exchange gain (loss) on working capital | $ | - | $ | (2 | ) | $ | (10 | ) | $ | 9 | ||
Foreign exchange gain (loss) on intercompany financing1 | (1 | ) | (1 | ) | (18 | ) | 4 | |||||
Foreign exchange gain (loss) on long-term debt | 2 | 5 | 28 | (27 | ) | |||||||
Gain on disposal of WestPine equipment (note 8) | 5 | - | 5 | - | ||||||||
Gain (loss) on power agreements | - | 18 | (19 | ) | (12 | ) | ||||||
Other | 1 | 1 | 5 | - | ||||||||
$ | 7 | $ | 21 | $ | (9 | ) | $ | (26 | ) |
1. | Relates to US$200 million of financing provided to our U.S. operations. IAS 21 requires that the exchange gain or loss be recognized through earnings as the financing is not considered part of our permanent investment in our U.S. subsidiaries. The balance sheet amounts and related financing expense are eliminated in these consolidated financial statements. |
In March 2016 the termination of our three-year power strip agreement was negotiated. In addition, Capital Power Corporation gave notice of its intent to terminate its role as buyer of the Sundance C Power Arrangement effective March 24, 2016. As a result of this termination, our role as a party to the Power Syndicate Agreement (Sundance C) also terminated. These agreements had provided us with a portion of the electricity generated from two power plants in Alberta at substantially predetermined rates.
Prior to the termination we recorded the agreements at fair value with the resulting gains or losses being recorded through other income. As at the release date of these condensed consolidated financial statements, we have been advised that the Balancing Pool is investigating the circumstances associated with the termination and the Balancing Pool may challenge the validity of the termination or the effective date of the termination. A change in the effective termination date could result in an additional loss. The amount of such loss is not reasonably determinable and will be recorded through earnings at such time as it can be determined.
10. | Tax provision |
The tax provision differs from the amount that would have resulted from applying the British Columbia statutory income tax rate to earnings before tax as follows:
April 1 to June 30 | January 1 to June 30 | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Income tax expense at statutory rate of 26% | $ | (31 | ) | $ | (9 | ) | $ | (45 | ) | $ | (27 | ) | ||||
Non-taxable amounts | 8 | (2 | ) | 10 | (2 | ) | ||||||||||
Rate differentials between jurisdictions and on specified activities | (2 | ) | 1 | (4 | ) | 1 | ||||||||||
Increase in Alberta provincial tax rate | - | (7 | ) | - | (7 | ) | ||||||||||
Unrecognized capital losses | - | - | 1 | (3 | ) | |||||||||||
Other | 3 | (1 | ) | 3 | (1 | ) | ||||||||||
Tax provision | $ | (22 | ) | $ | (18 | ) | $ | (35 | ) | $ | (39 | ) | ||||
11. | Earnings per share |
Basic earnings per share is calculated based on earnings available to Common shareholders, as set out below, using the weighted average number of Common shares and Class B Common shares outstanding.
Diluted earnings per share is calculated based on earnings available to Common shareholders adjusted to remove the actual share option expense (recovery) charged to earnings and after deducting a notional charge for share option expense assuming the use of the equity-settled method, as set out below. The diluted weighted average number of shares is calculated using the treasury stock method. When earnings available to Common shareholders for diluted earnings per share are greater than earnings available to Common shareholders for basic earnings per share, the calculation is anti-dilutive and diluted earnings per share are deemed to be the same as basic earnings per share.
April 1 to June 30 | January 1 to June 30 | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Earnings | |||||||||||||||
Basic | $ | 98 | $ | 14 | $ | 140 | $ | 63 | |||||||
Share option expense (recovery) | (28 | ) | 8 | (25 | ) | 6 | |||||||||
Equity-settled share option adjustment | - | - | (3 | ) | (2 | ) | |||||||||
Diluted | $ | 70 | $ | 22 | $ | 112 | $ | 67 | |||||||
Weighted average number of shares(thousands) | |||||||||||||||
Basic | 80,867 | 83,530 | 81,574 | 83,529 | |||||||||||
Share options | 812 | 1,350 | 888 | 1,391 | |||||||||||
Diluted | 81,679 | 84,880 | 82,462 | 84,920 | |||||||||||
Earnings per share (dollars) | |||||||||||||||
Basic | $ | 1.22 | $ | 0.17 | $ | 1.72 | $ | 0.76 | |||||||
Diluted | $ | 0.86 | $ | 0.17 | $ | 1.36 | $ | 0.76 | |||||||
12. | Segmented information |
Lumber | Panels | Pulp & paper | Corporate & other | Total | |||||||||||||||||
April 1, 2016 to June 30, 2016 | |||||||||||||||||||||
Sales | |||||||||||||||||||||
To external customers | $ | 771 | $ | 126 | $ | 214 | $ | - | $ | 1,111 | |||||||||||
To other segments | 24 | 2 | - | - | |||||||||||||||||
$ | 795 | $ | 128 | $ | 214 | $ | - | ||||||||||||||
Operating earnings before amortization | $ | 113 | $ | 21 | $ | 4 | $ | 30 | $ | 168 | |||||||||||
Amortization | (35 | ) | (3 | ) | (9 | ) | (1 | ) | (48 | ) | |||||||||||
Operating earnings | 78 | 18 | (5 | ) | 29 | 120 | |||||||||||||||
Finance expense | (4 | ) | (1 | ) | (2 | ) | - | (7 | ) | ||||||||||||
Other | 2 | 5 | 1 | (1 | ) | 7 | |||||||||||||||
Earnings before tax | $ | 76 | $ | 22 | $ | (6 | ) | $ | 28 | $ | 120 | ||||||||||
April 1, 2015 to June 30, 2015 | |||||||||||||||||||||
Sales | |||||||||||||||||||||
To external customers | $ | 675 | $ | 134 | $ | 220 | $ | - | $ | 1,029 | |||||||||||
To other segments | 27 | 2 | - | - | |||||||||||||||||
$ | 702 | $ | 136 | $ | 220 | $ | - | ||||||||||||||
Operating earnings before amortization | $ | 45 | $ | 21 | $ | 8 | $ | (11 | ) | $ | 63 | ||||||||||
Amortization | (32 | ) | (4 | ) | (9 | ) | - | (45 | ) | ||||||||||||
Operating earnings | 13 | 17 | (1 | ) | (11 | ) | 18 | ||||||||||||||
Finance expense | (4 | ) | (1 | ) | (2 | ) | - | (7 | ) | ||||||||||||
Other | (1 | ) | 1 | 17 | 4 | 21 | |||||||||||||||
Earnings before tax | $ | 8 | $ | 17 | $ | 14 | $ | (7 | ) | $ | 32 | ||||||||||
Lumber | Panels | Pulp & paper | Corporate & other | Total | |||||||||||||||||
January 1, 2016 to June 30, 2016 | |||||||||||||||||||||
Sales | |||||||||||||||||||||
To external customers | $ | 1,500 | $ | 262 | $ | 426 | $ | - | $ | 2,188 | |||||||||||
To other segments | 53 | 4 | - | - | |||||||||||||||||
$ | 1,553 | $ | 266 | $ | 426 | $ | - | ||||||||||||||
Operating earnings before amortization | $ | 213 | $ | 36 | $ | 18 | $ | 29 | $ | 296 | |||||||||||
Amortization | (72 | ) | (6 | ) | (18 | ) | (1 | ) | (97 | ) | |||||||||||
Operating earnings | 141 | 30 | - | 28 | 199 | ||||||||||||||||
Finance expense | (9 | ) | (2 | ) | (4 | ) | - | (15 | ) | ||||||||||||
Other | (3 | ) | 3 | (22 | ) | 13 | (9 | ) | |||||||||||||
Earnings before tax | $ | 129 | $ | 31 | $ | (26 | ) | $ | 41 | $ | 175 | ||||||||||
January 1, 2015 to June 30, 2015 | |||||||||||||||||||||
Sales | |||||||||||||||||||||
To external customers | $ | 1,330 | $ | 263 | $ | 450 | $ | - | $ | 2,043 | |||||||||||
To other segments | 53 | 4 | - | - | |||||||||||||||||
$ | 1,383 | $ | 267 | $ | 450 | $ | - | ||||||||||||||
Operating earnings before amortization | $ | 162 | $ | 47 | $ | 38 | $ | (12 | ) | $ | 235 | ||||||||||
Amortization | (65 | ) | (7 | ) | (19 | ) | (1 | ) | (92 | ) | |||||||||||
Operating earnings | 97 | 40 | 19 | (13 | ) | 143 | |||||||||||||||
Finance expense | (9 | ) | (2 | ) | (4 | ) | - | (15 | ) | ||||||||||||
Other | 2 | (2 | ) | (3 | ) | (23 | ) | (26 | ) | ||||||||||||
Earnings before tax | $ | 90 | $ | 36 | $ | 12 | $ | (36 | ) | $ | 102 | ||||||||||
The geographic distribution of external sales is as follows1:
April 1 to June 30 | January 1 to June 30 | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Canada | $ | 251 | $ | 228 | $ | 498 | $ | 446 | ||||
United States | 656 | 551 | 1,276 | 1,084 | ||||||||
China | 117 | 166 | 233 | 330 | ||||||||
Other Asia | 71 | 68 | 148 | 148 | ||||||||
Other | 16 | 16 | 33 | 35 | ||||||||
$ | 1,111 | $ | 1,029 | $ | 2,188 | $ | 2,043 |
1. | Sales distribution is based on the location of product delivery. |