Full Story - Norbord
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January 30, 2014 To Our Shareholders, I am delighted to have this opportunity to share Norbord’s 2013 achievements and to provide you with some insight into our key objectives for the current year. Sharing good news in my first official shareholder correspondence is a pleasure. 2013 was one of the most successful years we have had in the past decade. The markets we serve in North America and Europe continued to gain momentum, we restarted our Jefferson, Texas mill to meet increasing customer demand, our financial results were very strong and our balance sheet ended the year in excellent shape. Robust Financial Results All financial metrics improved in 2013. We delivered EBITDA of $287 million, our best result since 2005. This translates into earnings of $2.79 per diluted share, compared to $1.65 the prior year. Our return on capital employed reached 35%, up from 23% in 2012. These robust results were achieved despite volatile North American OSB prices through the year. Our strong operating cash flow significantly improved our balance sheet. This gave us the financial flexibility to deliver on both our capital priorities, reinvesting $83 million in our mills and returning cash to our shareholders through $91 million in dividends. We ended the year with $534 million in liquidity and a net debt-to-capitalization ratio of 34%, down from 43% in 2012. This solid financial footing, coupled with the positive outlook for our business, allowed us to refinance our 2015 bonds with new seven-year bonds at our lowest-ever interest rate of 5.375%. Further, we chose to amend our warrants to allow holders to exercise on a cashless basis, limiting the dilutive effect. DBRS and Moody’s recognized our improved financial picture by upgrading our issuer rating one notch and Norbord was added to the S&P/TSX Composite Index back in June. Jefferson Mill Running at Capacity One of the key achievements of 2013 was the successful restart and quick ramp-up of our mill in Jefferson, Texas. Within three months it was running at full capacity and achieved positive EBITDA in Q4. Furthermore, I’m pleased to report that the mill finished the year without a single recordable injury – a real accomplishment given that we hired 100 new employees and had more than 100 contractors on site during the rebuild. As our Jefferson team becomes more familiar with the process and equipment, we expect to achieve greater operating efficiencies through the next year. Peter Wijnbergen President & CEO
