15.Share Capital

AUTHORIZED

The Company is authorized to issue an unlimited number of no par value common shares and Class A Preferred Shares limited to a number equal to not more than 20 percent of the issued and outstanding number of common shares at the time of issuance. No Class A Preferred Shares are outstanding.

ISSUED AND OUTSTANDING


As at December 31	2017			2016			2015
	Number (millions)		Amount	Number (millions)		Amount	Number (millions)		Amount

Common Shares Outstanding, Beginning of Year	973.0	$	4,756	849.8	$	3,621	741.2	$	2,450
Common Shares Issued	-		-	123.1		1,134	98.4		1,098
Common Shares Issued Under Dividend Reinvestment Plan	0.1		1	0.1		1	10.2		73
Common Shares Outstanding, End of Year	973.1	$	4,757	973.0	$	4,756	849.8	$	3,621

On September 19, 2016, Encana filed prospectus supplements (the “2016 Share Offering”) to the Company’s shelf prospectuses for the issuance of 107,000,000 common shares and granted an over-allotment option for up to an additional 16,050,000 common shares at a price of $9.35 per common share, pursuant to an underwriting agreement. The aggregate gross proceeds from the 2016 Share Offering, including the exercise in full of the over-allotment option, were approximately $1.15 billion. After deducting underwriters’ fees and costs of the 2016 Share Offering, the net cash proceeds received were approximately $1.13 billion.

On March 5, 2015, Encana filed a prospectus supplement (the “2015 Share Offering”) to the Company’s shelf prospectus for the issuance of 85,616,500 common shares and granted an over-allotment option for up to an additional 12,842,475 common shares at a price of C$14.60 per common share, pursuant to an underwriting agreement. The aggregate gross proceeds from the 2015 Share Offering, including the exercise in full of the over-allotment option, were approximately C$1.44 billion ($1.13 billion). After deducting underwriters’ fees and costs of the 2015 Share Offering, the net cash proceeds received were approximately C$1.39 billion ($1.09 billion).

During the year ended December 31, 2017, Encana issued 58,480 common shares totaling $0.6 million under the Company’s dividend reinvestment plan (“DRIP”) (2016 - issued 121,249 common shares totaling $0.9 million; 2015 - issued 10,246,221 common shares totaling $73 million).

On February 15, 2018, the Company announced plans to spend up to $400 million to purchase, for cancellation, up to 35 million common shares through a NCIB, subject to and following TSX approval. On February 26, 2018, the Company announced that the TSX accepted its notice of intention to commence the NCIB beginning February 28, 2018 and ending February 27, 2019.

DIVIDENDS

For the year ended December 31, 2017, Encana paid dividends of $0.06 per common share totaling $58 million (2016 - $0.06 per common share totaling $52 million; 2015 - $0.28 per common share totaling $225 million). The Company’s quarterly dividend payment in 2017 and 2016 was $0.015 per common share. The Company’s quarterly dividend payment in 2015 was $0.07 per common share. Common shares issued as part of the 2016 Share Offering and 2015 Share Offering described above were not eligible to receive the dividends paid on September 30, 2016 and March 31, 2015, respectively.

For the year ended December 31, 2017, the dividends paid included $0.6 million in common shares as disclosed above, which were issued in lieu of cash dividends under the DRIP (2016 - $0.9 million; 2015 - $73 million).

On February 14, 2018, the Board of Directors declared a dividend of $0.015 per common share payable on March 29, 2018 to common shareholders of record as of March 15, 2018.

EARNINGS PER COMMON SHARE

The following table presents the computation of net earnings (loss) per common share:


For the years ended December 31 (US$ millions, except per share amounts)		2017		2016		2015

Net Earnings (Loss)	$	827	$	(944)	$	(5,165)

Number of Common Shares:
Weighted average common shares outstanding - Basic		973.1		882.6		822.1
Effect of dilutive securities		-		-		-
Weighted average common shares outstanding - Diluted		973.1		882.6		822.1

Net Earnings (Loss) per Common Share
Basic & Diluted	$	0.85	$	(1.07)	$	(6.28)

ENCANA STOCK OPTION PLAN

Encana has share-based compensation plans that allow employees to purchase common shares of the Company. Option exercise prices are not less than the market value of the common shares on the date the options are granted. Options granted are exercisable at 30 percent of the number granted after one year, an additional 30 percent of the number granted after two years, are fully exercisable after three years and expire five years after the date granted. Options granted after February 2015 expire seven years after the date granted.

All options outstanding as at December 31, 2017 have associated Tandem Stock Appreciation Rights (“TSARs”) attached. In lieu of exercising the option, the associated TSARs give the option holder the right to receive a cash payment equal to the excess of the market price of Encana’s common shares at the time of the exercise over the original grant price. In addition, certain stock options granted are performance-based. The Performance TSARs vest and expire under the same terms and conditions as the underlying option. Vesting is also subject to Encana attaining prescribed performance relative to predetermined key measures. Historically, most holders of options with TSARs have elected to exercise their stock options as a Stock Appreciation Right (“SAR”) in exchange for a cash payment. As a result, outstanding TSARs are not considered potentially dilutive securities. See Note 19 for further information on Encana’s outstanding and exercisable TSARs and Performance TSARs.

At December 31, 2017, there were 33.3 million common shares reserved for issuance under stock option plans (2016 - 32.2 million; 2015 - 30.3 million).

ENCANA RESTRICTED SHARE UNITS (“RSUs”)

Encana has a share-based compensation plan whereby eligible employees are granted RSUs. An RSU is a conditional grant to receive the equivalent of an Encana common share upon vesting of the RSUs and in accordance with the terms of the RSU Plan and Grant Agreement. RSUs vest three years from the date granted, provided the employee remains actively employed with Encana on the vesting date. The Company intends to settle vested RSUs in cash on the vesting date. As a result, RSUs are not considered potentially dilutive securities. See Note 19 for further information on Encana’s outstanding RSUs.