Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q4 2013 Earnings Presentation
28 slides from Weyerhaeuser's earnings presentation, Jan 31, 2014
Slide 1: Earnings Results: 4th Quarter 2013
WEYERHAEUSER Earnings Results: 4th Quarter 2013 1 | 07/27/2012
Slide 2: Forward-Looking Statement
FORWARD-LOOKING STATEMENT This presentation contains statements concerning the company’s future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on various assumptions and may not be acc
Slide 3: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES • During the course of this presentation, certain non-U.S. GAAP financial information will be presented. A reconciliation of those numbers to U.S. GAAP financial measures is included in this presentation which is available on the company’s website at www.weyerhaeuser.com
Slide 4: 2013 Consolidated Results
Chart 1 2013 CONSOLIDATED RESULTS 2013 Notes $ Millions EXCEPT EPS Consolidated Statement of Operations 2012 2013 Change • Net earnings before special Before Special Items items doubled Timberlands $322 $470 $148 • Announced agreement to Wood Products 114 451 337 combine Weyerhaeuser Real Cellulose
Slide 5: 2013 Q4 Consolidated Results
Chart 2 2013 Q4 CONSOLIDATED RESULTS $ Millions 2013 2013 $ Millions EXCEPT EPS 2013 2013 Contribution to Earnings Q3 Q4 Change Consolidated Statement of Operations Q3 Q4 Before Special Items Before Special Items Timberlands $118 $134 $16 Net sales $2,181 $2,256 Wood Products 79 58 (21) Cost of prod
Slide 6: Earnings Before Special Items
Chart 3 EARNINGS BEFORE SPECIAL ITEMS Millions EXCEPT EPS 2013 Q3 2013 Q4 Pre-Tax After-Tax Diluted Pre-Tax After-Tax Diluted Earnings1 Earnings EPS Earnings1 Earnings EPS Earnings Before Special Items $203 $157 $0.27 $212 $157 $0.27 Special Items: Restructuring, impairments, and other charges2 -- -
Slide 7: Timberlands Segment
Chart 4 TIMBERLANDS SEGMENT 4th Quarter Notes TIMBERLANDS ($ Millions) 2013 2013 Segment Statement of Operations Q3 Q4 • Construction markets in China drove increased selling prices for Third party sales2 $348 $359 Western logs Intersegment sales2 131 139 • Weyerhaeuser’s average log price Total sal
Slide 8: Sales Volumes and Realizations
Chart 5 SALES VOLUMES AND REALIZATIONS 3rd-Party Log Sales and Realizations - West1 3rd-Party Log Sales and Realizations - South 3,000 $115 $120 2,500 $50 $105 $105 $105 $43 $43 $43 $43 $44 $99 $40 $41 $42 Volumes (Thousands of m3) $94 $96 2,500 $89 $100 Volumes (Thousands of m3) 2,185 2,000 $40 Rea
Slide 9: Western/Southern Timberlands
Chart 6 WESTERN/SOUTHERN TIMBERLANDS Intersegment Log Sales Volume1 Fee Harvest Volume1,2 2,000 3,500 1,657 1,619 3,177 1,564 1,606 1,496 1,596 1,612 2,928 3,007 1,487 2,809 2,833 2,828 3,000 2,714 2,788 (Thousands of m3) (Thousands of m3) 1,500 929 2,500 2,686 1,000 757 577 539 592 563 2,000 2,305
Slide 10: Wood Products Segment
Chart 7 WOOD PRODUCTS SEGMENT WOOD PRODUCTS ($ Millions) 2013 2013 WOOD PRODUCTS ($ Millions) 2013 2013 EBITDA by Business Q3 Q4 Segment Statement of Operations Q3 Q4 Lumber $66 $59 Third party sales $1,030 $926 OSB 39 24 Intersegment sales 19 16 Engineered Wood Products 16 11 Total sales 1,049 942
Slide 11: 3rd-Party Sales Volumes and Realizations
Chart 8 3RD-PARTY SALES VOLUMES AND REALIZATIONS1 Lumber OSB 2,000 $500 1,600 $359 $400 $440 $434 $404 $413 $332 Volumes (Millions of Board Ft.) Volumes (Millions of Square Ft.) Realizations ($/M 3/8”) $290 $350 $359 $366 Realizations ($/MBF) 1,600 $400 $268 $311 1,200 $300 $246 $237 1,156 1,189 $21
Slide 12: Cellulose Fibers Segment
Chart 9 CELLULOSE FIBERS SEGMENT 4th Quarter Notes CELLULOSE FIBERS ($ Millions) 2013 2013 Segment Statement of Operations Q3 Q4 • Higher pulp price realizations Total sales $474 $478 • Lower maintenance expense and improved productivity due Cost of products sold 406 397 to fewer days of scheduled G
Slide 13: Cellulose Fibers Segment
Chart 10 CELLULOSE FIBERS SEGMENT 3rd-Party Sales Volumes and 3rd-Party Sales Volumes and Realizations – Pulp Realizations – Liquid Packaging 600 $1,000 600 $1,200 Volumes (Thousands of tons) Volumes (Thousands of ADMT) 500 $1,181 $1,176 $1,150 Realizations ($/ADMT) Realizations ($/ADMT) 550 $900 $1
Slide 14: Real Estate Segment
Chart 11 REAL ESTATE SEGMENT 4th Quarter Notes REAL ESTATE ($ Millions) 2013 2013 Segment Statement of Operations Q3 Q4 • Special charges of $349 million, primarily for a previously Total sales $324 $488 announced impairment Cost of products sold 248 371 • Seasonally higher closing Gross margin 76 1
Slide 15: Single-Family Homebuilding
Chart 12 SINGLE-FAMILY HOMEBUILDING Average Closing Price and Home Closings and Cancellation Rate Single-Family Gross Margin $442 1,600 24% 35% $450 21% $405 Homes Closed (Units) 18% $394 $397 Cancellation Rate (%) Price ($ Thousands) 1,200 15% 16% 16% 18% 30% $381 $400 Gross Margin (%) 15% 1,072 $3
Slide 16: Land and Lots
Chart 13 LAND AND LOTS Earnings from Sale of Land and Lots Controlled Lots as of December 31, 20131 80 20 17.1 $65 16 Controlled Lots (Thousands) 60 Earnings ($ Million) 12 40 8 20 $12 4 3.2 $9 2.3 1.9 $7 1.7 1.4 $1 $2 $0 $0 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 AZ CA MD NV TX WA and VA 2012 2013 1. Lots are
Slide 17: Unallocated Items
Chart 14 UNALLOCATED ITEMS1 UNALLOCATED ITEMS ($ Millions) 2013 2013 UNALLOCATED ITEMS ($ Millions) 2013 2013 Q3 Q4 By Natural Expense Q3 Q4 Unallocated Corporate Function (Cost of) credit to products sold3 $22 3 ($2) ($7) Expenses Unallocated Share-Based G&A expenses (10) (26) (1) (5) Compensation
Slide 18: Outlook: 2014 Q1
Chart 15 OUTLOOK: 2014 Q1 SEGMENT COMMENTS TIMBERLANDS • Improved Western log price realizations and volumes due to increasing export demand • Slightly higher Southern pulpwood realizations, and seasonally lower fee harvest volumes • Excluding dispositions of non-strategic timberlands, expect 2014 Q
Slide 19: Financial Items
Chart 16 FINANCIAL ITEMS Cash from Operations KEY FINANCIAL METRICS 2013 2013 $374 ($ Millions) Q3 Q4 400 $343 $348 Ending Cash Balance1 $903 $835 300 ($ Millions) $267 $252 Long-Term Debt2 $5,568 $4,891 200 Gross Debt to Adjusted EBITDA $122 3.4 2.9 100 (LTM)3 0 Net Debt to Enterprise Value4 20% 18
Slide 20: Appendix
APPENDIX 20 | 01/31/2014
Slide 21: Explanation of Changes in Share Count
EXPLANATION OF CHANGES Chart 17 IN SHARE COUNT • During 2013 Q2, Weyerhaeuser issued 29 million common shares in conjunction with the acquisition of Longview Timber LLC. • Subsequent to the end of 2013 Q2, the company issued an additional 4.35 million common shares in connection with the exercise of
Slide 22: Pension and Postretirement Expense
PENSION AND POSTRETIREMENT Chart 18 EXPENSE $ Millions 2012 2013 Net Pension and Postretirement Costs1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Timberlands $1 $3 $2 $2 $2 $3 $2 $3 Wood Products 8 5 6 6 7 6 8 7 Cellulose Fibers 3 4 3 4 4 5 5 4 Real Estate 1 2 1 -- 1 2 1 1 Unallocated Items 7 7 7 8 10 10 11 9 Total Co
Slide 23: Earnings Summary
Chart 19 EARNINGS SUMMARY Weyerhaeuser began holding elimination of intersegment profit on inventory and the LIFO reserve as part of Unallocated Items during 2012 Q2. Contributions to earnings for 2012 Q1 have been adjusted to reflect this change. $ Millions EXCEPT EPS 2012 2013 Contribution to Earn
Slide 24: Earnings Per Share Reconciliation
Chart 20 EARNINGS PER SHARE RECONCILIATION Millions EXCEPT EPS 2012 2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Weighted Average Shares Outstanding, 540 540 542 547 551 558 587 589 Diluted1 Diluted EPS Before Special Items $0.02 $0.09 $0.22 $0.26 $0.26 $0.35 $0.27 $0.27 Special Items: Restructuring, Impairments, a
Slide 25: EBITDA Reconciliation by Segment
Chart 21 EBITDA RECONCILIATION BY SEGMENT $ Millions 2013 Q3 2013 Q4 Wood Cellulose Real Unallocated Wood Cellulose Real Unallocated Timberlands Products Fibers Estate Items Total Timberlands Products Fibers Estate Items Total Adjusted EBITDA Excluding $162 $110 $84 $45 $17 $418 $184 $88 $101 $83 ($
Slide 26: EBITDA Reconciliation – Timberlands
Chart 22 EBITDA RECONCILIATION – TIMBERLANDS $ Millions 2013 Q3 2013 Q4 Longview Longview Legacy Timber Legacy Timber Timberlands acquisition Total Timberlands acquisition Total Adjusted EBITDA Excluding Special Items1 $136 $26 $162 $149 $35 $184 Depletion, Depreciation & Amortization (35) (10) (45)
Slide 27: EBITDA Reconciliation – Wood Products
Chart 23 EBITDA RECONCILIATION – WOOD PRODUCTS $ Millions 2013 Q3 2013 Q4 Lumber OSB EWP Distribution Other Total Lumber OSB EWP Distribution Other Total Adjusted EBITDA $66 $39 $16 ($11) -- $110 $59 $24 $11 ($6) -- $88 Excluding Special Items1 Depletion, Depreciation (9) (8) (12) (2) -- (31) (10) (
Slide 28: Gross Debt to EBITDA Reconciliation
Chart 24 GROSS DEBT TO EBITDA RECONCILIATION $ Millions 2013 2013 Q3 Q4 Gross Debt to Adjusted EBITDA (LTM)1, 2 3.4 2.9 Long-Term Debt3 $5,568 $4,891 Adjusted EBITDA Excluding Special Items (LTM)1 $1,641 $1,683 Depletion, Depreciation & Amortization (461) (472) Non-Operating Pension & Postretirement