Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q2 2013 Earnings Presentation
25 slides from Weyerhaeuser's earnings presentation, Jul 26, 2013
Slide 1: Earnings Results: 2nd Quarter 2013
WEYERHAEUSER Earnings Results: 2nd 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 Q2 Consolidated Results
Chart 1 2013 Q2 CONSOLIDATED RESULTS $ Millions 2013 2013 $ Millions EXCEPT EPS 2013 2013 Contribution to Consolidated Statement of Operations Q1 Q2 Q1 Q2 Change Earnings Net sales $1,951 $2,141 Timberlands $104 $114 $10 Cost of products sold 1,533 1,664 Wood Products 178 136 (42) Gross margin 418 4
Slide 5: Timberlands Segment
Chart 2 TIMBERLANDS SEGMENT 2nd Quarter Notes TIMBERLANDS ($ Millions) 2013 2013 Segment Statement of Operations Q1 Q2 • Higher earnings from disposition of non-strategic timberlands Third party sales $285 $332 • Improved selling prices, slightly Intersegment sales 127 123 lower fee harvest volumes,
Slide 6: Western/Southern Timberlands
Chart 3 WESTERN/SOUTHERN TIMBERLANDS 3rd-Party Log Sales and Realizations - West 3rd-Party Log Sales and Realizations - South 2,500 $115 $125 2,500 $50 $105 $42 $43 $43 $43 $40 $41 Volumes (Thousands of m3) $99 $96 $94 Volumes (Thousands of m3) 2,000 $89 1,812 $100 2,000 $40 Realizations ($/m3) Real
Slide 7: Western/Southern Timberlands
Chart 4 WESTERN/SOUTHERN TIMBERLANDS Intersegment Log Sales Volume Fee Harvest Volume 2,000 3,500 1,657 3,177 1,564 1,606 1,619 1,496 1,487 2,788 2,809 2,833 2,828 3,000 2,714 (Thousands of m3) (Thousands of m3) 1,500 2,500 1,000 577 539 592 563 2,000 548 477 500 1,995 1,921 1,500 1,831 1,876 1,784
Slide 8: Wood Products Segment
Chart 5 WOOD PRODUCTS SEGMENT WOOD PRODUCTS ($ Millions) 2013 2013 WOOD PRODUCTS ($ Millions) 2013 2013 EBITDA by Business Q1 Q2 Segment Statement of Operations Q1 Q2 Lumber $101 $91 Third party sales $988 $1,065 OSB 102 82 Intersegment sales 18 18 Engineered Wood Products 11 7 Total sales 1,006 1,0
Slide 9: 3rd-Party Sales Volumes and Realizations
Chart 6 3RD-PARTY SALES VOLUMES AND REALIZATIONS1 Lumber OSB 2,000 $500 1,600 $359 $400 $440 $434 $332 Volumes (Millions of Board Ft.) Volumes (Millions of Square Ft.) Realizations ($/M 3/8”) $359 $366 $290 Realizations ($/MBF) 1,600 $350 $400 $268 $311 1,200 $300 1,156 $214 1,200 $300 $197 1,056 1,
Slide 10: Cellulose Fibers Segment
Chart 7 CELLULOSE FIBERS SEGMENT 2nd Quarter Notes CELLULOSE FIBERS ($ Millions) 2013 2013 Segment Statement of Operations Q1 Q2 • Slightly higher average pulp price realizations Total sales $474 $476 • Lower maintenance costs and Cost of products sold 424 394 improved productivity due to a reductio
Slide 11: Cellulose Fibers Segment
Chart 8 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) $1,181 $1,176 Volumes (Thousands of ADMT) 500 $1,155 $1,100 Realizations ($/ADMT) Realizations ($/ADMT) 550 $
Slide 12: Real Estate Segment
Chart 9 REAL ESTATE SEGMENT REAL ESTATE ($ Millions) 2013 2013 2nd Quarter Notes Segment Statement of Operations Q1 Q2 • Seasonally higher closing volume Total sales $196 $267 • Improved average margins due Cost of products sold 160 210 to mix Gross margin 36 57 • Higher selling expenses due to incr
Slide 13: Single Family Homebuilding
Chart 10 SINGLE FAMILY HOMEBUILDING Average Closing Price and Home Closings and Cancellation Rate Single-Family Gross Margin 1,200 20% 35% $450 18% 15% 16% $405 15% $394 Homes Closed (Units) Cancellation Rate (%) Price ($ Thousands) 950 12% 15% 30% $381 $400 Gross Margin (%) 842 $376 $374 $372 10% 7
Slide 14: Land and Lots
Chart 11 LAND AND LOTS Earnings from Sale of Land and Lots Controlled Lots as of June 30, 20131 80 20 17.5 $65 16 Controlled Lots (Thousands) 60 Earnings ($ Million) 12 40 8 20 $12 4 3.1 2.0 1.8 1.3 1.3 $1 $2 $0 $0 0 0 Q1 Q2 Q3 Q4 Q1 Q2 AZ CA MD NV TX WA and VA 2012 2013 1. Lots are controlled throu
Slide 15: Unallocated Items
Chart 12 UNALLOCATED ITEMS1 2013 2013 UNALLOCATED ITEMS ($ Millions) 2013 2013 UNALLOCATED ITEMS ($ Millions) Q1 Q2 Unallocated Corporate Function By Natural Expense Q1 Q2 ($3) ($3) Expenses Unallocated Share-Based Cost of (credit to) products sold3 $26 ($5) (7) 5 Compensation G&A expenses 19 7 Unal
Slide 16: Outlook: 2013 Q3
Chart 13 OUTLOOK: 2013 Q3 SEGMENT COMMENTS TIMBERLANDS • Weaker domestic and export prices for Western logs, and seasonally lower fee harvest volumes from existing Western operations • Comparable log price realizations and seasonally higher harvest volumes in the South • Seasonally higher road and s
Slide 17: Financial Items
Chart 14 FINANCIAL ITEMS Cash from Operations $374 400 KEY FINANCIAL METRICS 2013 2013 ($ Millions) Q1 Q2 300 $267 $252 Ending Cash Balance1 ($ Millions) $639 $912 200 Long-Term Debt $4,135 $4,114 $122 100 Gross Debt to Adjusted EBITDA 3.0 2.7 0 (LTM)2 ($60) ($61) Net Debt to Enterprise Value3 17% 1
Slide 18: Appendix
APPENDIX 18 | 07/26/2013
Slide 19: Explanation of Changes in Share Count
Chart 15 EXPLANATION OF CHANGES 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 20: Pension and Postretirement Expense
Chart 16 PENSION AND POSTRETIREMENT EXPENSE $ Millions 2012 2013 Net Pension and Postretirement Costs1 Q1 Q2 Q3 Q4 Q1 Q2 Timberlands $1 $3 $2 $2 $2 $3 Wood Products 8 5 6 6 7 6 Cellulose Fibers 3 4 3 4 4 5 Real Estate 1 2 1 -- 1 2 Unallocated Items 7 7 7 8 10 10 Total Company Pension and Postretirem
Slide 21: Earnings Summary
Chart 17 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 22: Earnings Per Share Reconciliation
Chart 18 EARNINGS PER SHARE RECONCILIATION Millions EXCEPT EPS 2012 2013 Q1 Q2 Q3 Q4 Q1 Q2 Weighted Average Shares Outstanding, 540 540 542 547 551 558 Diluted1 Diluted EPS Before Special Items $0.02 $0.09 $0.22 $0.26 $0.26 $0.35 Special Items: Net Gain on Sale of Assets, Operations -- 0.01 -- -- --
Slide 23: EBITDA Reconciliation by Segment
Chart 19 EBITDA RECONCILIATION BY SEGMENT $ Millions 2013 Q1 2013 Q2 Wood Cellulose Real Unallocated Wood Cellulose Real Unallocated Timberlands Products Fibers Estate Items Total Timberlands Products Fibers Estate Items Total Adjusted EBITDA Excluding $139 $209 $70 $9 ($40) $387 $147 $167 $98 $28 $
Slide 24: EBITDA Reconciliation – Wood Products
Chart 20 EBITDA RECONCILIATION – WOOD PRODUCTS $ Millions 2013 Q1 2013 Q2 Lumber OSB EWP Distribution Other Total Lumber OSB EWP Distribution Other Total Adjusted EBITDA $101 $102 $11 ($3) ($2) $209 $91 $82 $7 ($13) $0 $167 Excluding Special Items1 Depletion, Depreciation (10) (8) (12) (1) -- (31) (
Slide 25: Gross Debt to EBITDA Reconciliation
Chart 21 GROSS DEBT TO EBITDA RECONCILIATION $ Millions 2013 2013 Q1 Q2 Gross Debt to Adjusted EBITDA (LTM)1, 2 3.0 2.7 Long-Term Debt $4,135 $4,114 Adjusted EBITDA Excluding Special Items (LTM)1 $1,363 $1,552 Depletion, Depreciation & Amortization (455) (453) Non-Operating Pension & Postretirement