Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q3 2017 Earnings Presentation
24 slides from Weyerhaeuser's earnings presentation, Oct 27, 2017
Slide 1: Earnings Results 3rd Quarter 2017
WEYERHAEUSER EARNINGS RESULTS 3rd QUARTER 2017 | October 27, 2017
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains statements and depictions that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, without limitation, with respect to future revenues, earnings, cash flow, taxe
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: 2017 Q3 Consolidated Results
2017 Q3 CONSOLIDATED RESULTS Chart 1 $ Millions 2017 2017 $ Millions EXCEPT EPS 2017 2017 Adjusted EBITDA Q2 Q3 Change Consolidated Statement of Operations Before Q2 Q3 Special Items Timberlands $ 222 $ 220 $ (2) Net sales $ 1,808 $ 1,872 Real Estate, Energy & Natural Resources 37 74 37 Cost of prod
Slide 5: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS Chart 2 $ Millions EXCEPT EPS 2017 Q2 2017 Q3 Pre-Tax After-Tax Diluted Pre-Tax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 268 $ 212 $ 0.28 $ 310 $ 259 $ 0.34 Special Items: Plum Creek merger and integration-related cos
Slide 6: Timberlands Segment
TIMBERLANDS SEGMENT1 Chart 3 TIMBERLANDS ($ Millions) 2017 2017 TIMBERLANDS ($ Millions) 2017 2017 Adjusted EBITDA by Region Q2 Q3 Segment Statement of Operations Q2 Q3 West $ 124 $ 111 Third party sales $ 461 $ 480 South 91 95 Intersegment sales 126 125 North 2 4 Total Sales 587 605 Other 5 10 Cost
Slide 7: Sales Volumes and Realizations
SALES VOLUMES AND REALIZATIONS Chart 4 1 Volumes (Thousands of tons) Volumes (Thousands of tons) Volumes (Thousands of tons) 1. Western logs are primarily transacted in MBF but are converted to ton equivalents for external reporting purposes. 7 10/27/2017
Slide 8: Export Sales, Fee Harvest Volumes, and Intersegment Sales Volumes
EXPORT SALES, FEE HARVEST VOLUMES, Chart 5 AND INTERSEGMENT SALES VOLUMES 1 2 South West North 2017 Q3 Japan China Korea 1. Intersegment log sales volumes declined beginning in first quarter 2017 due to the divestiture of our Cellulose Fibers pulp mills and reclassification of certain third party lo
Slide 9: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & Chart 6 NATURAL RESOURCES (ENR) SEGMENT1 Real Estate & ENR ($ Millions) 2017 2017 Real Estate & ENR ($ Millions) 2017 2017 Adjusted EBITDA by Business Q2 Q3 Segment Statement of Operations Q2 Q3 Real Estate $ 20 $ 58 Total sales 46 82 Energy & Natural Resources 17 16 Cost of pr
Slide 10: Real Estate, Energy & Natural Resources Segment Adjusted EBITDA
REAL ESTATE, ENERGY & Chart 7 NATURAL RESOURCES (ENR) SEGMENT 1 Adjusted EBITDA (in millions) Real Estate $26 $17 $24 $75 $29 $20 $58 ENR $8 $11 $13 $15 $14 $17 $16 1. Our definition of Adjusted EBITDA and a reconciliation to GAAP are set forth on Chart 18. 10 10/27/2017
Slide 11: Wood Products Segment
WOOD PRODUCTS SEGMENT Chart 8 WOOD PRODUCTS ($ Millions) 2017 2017 WOOD PRODUCTS ($ Millions) 2017 2017 Adjusted EBITDA by Business Q2 Q3 Segment Statement of Operations Q2 Q3 Lumber $ 127 $ 117 Total sales 1,293 1,299 OSB 87 102 Cost of products sold 1,002 1,005 Engineered Wood Products 52 50 Gross
Slide 12: 3rd-Party Sales Volumes and Realizations
3RD-PARTY SALES VOLUMES AND REALIZATIONS1 Chart 9 1. Sales volumes include sales of internally produced products and products purchased for resale primarily through our Distribution business. 12 10/27/2017
Slide 13: Unallocated Items
UNALLOCATED ITEMS Chart 10 UNALLOCATED ITEMS ($ Millions)1 2017 2017 UNALLOCATED ITEMS ($ Millions) 2017 2017 Q2 Q3 By Natural Expense Q2 Q3 Unallocated corporate function expenses $ (17) $ (19) Cost of products sold2 $ (7) $ (2) Unallocated share-based compensation — (1) G&A expenses3 (14) (16) Una
Slide 14: Financial Items
FINANCIAL ITEMS Chart 11 Includes discontinued operations KEY FINANCIAL METRICS 2017 2017 ($ Millions) Q2 Q3 Ending Cash Balance $ 701 $ 497 Long-Term Debt1 $ 6,604 $ 5,995 Gross Debt to Adjusted EBITDA (LTM)2 3.7 3.1 Net Debt to Enterprise Value3 19% 18% Excluding $494 million of cash paid for inco
Slide 15: Outlook: 2017 Q4
OUTLOOK: 2017 Q4 Chart 12 SEGMENT COMMENTS TIMBERLANDS ● Higher Western fee harvest volumes and slightly higher log sales realizations ● Slightly higher Southern fee harvest volumes and comparable log sales realizations ● Higher road and forestry expense due to weather-related deferral of third quar
Slide 16: Appendix
APPENDIX APPENDIX 16 10/27/2017
Slide 17: Pension and Postretirement Expense
PENSION AND POSTRETIREMENT EXPENSE Chart 13 $ Millions 2016 2017 Net Pension and Postretirement Cost (Credit) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Timberlands $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 Real Estate, Energy & Natural Resources — — — — — — — Wood Products 5 6 6 5 6 5 6 Unallocated pension service costs 2 — 2 1 2 — 1
Slide 18: Earnings Summary
EARNINGS SUMMARY Chart 14 $ Millions 2016 2017 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Q2 Q3 Timberlands $ 199 $ 220 $ 223 $ 223 $ 242 $ 222 $ 220 Real Estate, Energy & Natural Resources 34 28 37 90 43 37 74 Wood Products 117 189 203 132 207 274 278 Unallocated Items (14) (24) (29) (45) (38) (27)
Slide 19: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 15 $ Millions EXCEPT EPS 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Weighted Average Shares Outstanding, Diluted 635 748 754 753 755 756 757 Diluted EPS from Continuing Operations Before Special Items $ 0.20 $ 0.17 $ 0.23 $ 0.14 $ 0.22 $ 0.28 $ 0.34 Special Items: Plum Cr
Slide 20: Adjusted EBITDA Reconciliation by Segment
ADJUSTED EBITDA RECONCILIATION BY Chart 16 SEGMENT $ MILLIONS 2017 Q2 2017 Q3 Real Real Estate & Wood Unallocated Estate & Wood Unallocated Timberlands ENR Products Items Total Timberlands ENR Products Items Total Adjusted EBITDA1 $ 222 $ 37 $ 274 $ (27) $ 506 $ 220 $ 74 $ 278 $ (3) $ 569 Depletion,
Slide 21: Adjusted EBITDA Reconciliation - Timberlands
ADJUSTED EBITDA RECONCILIATION - Chart 17 TIMBERLANDS $ MILLIONS 2017 Q2 2017 Q3 West South North Other Total West South North Other Total Adjusted EBITDA1 $ 124 $ 91 $ 2 $ 5 $ 222 $ 111 $ 95 $ 4 $ 10 $ 220 Depreciation, depletion & amortization (29) (43) (3) (12) (87) (26) (49) (4) (10) (89) Specia
Slide 22: Adjusted EBITDA Reconciliation - Real Estate, Energy and Natural Resources
ADJUSTED EBITDA RECONCILIATION - REAL Chart 18 ESTATE, ENERGY AND NATURAL RESOURCES $ Millions 2017 Q2 2017 Q3 Energy & Energy & Natural Natural Real Estate Resources Total Real Estate Resources Total Adjusted EBITDA1 $ 20 $ 17 $ 37 $ 58 $ 16 $ 74 Depletion, depreciation & amortization — (4) (4) — (
Slide 23: Adjusted EBITDA Reconciliation - Wood Products
ADJUSTED EBITDA RECONCILIATION - Chart 19 WOOD PRODUCTS $ Millions 2017 Q2 2017 Q3 Lumber OSB EWP Distribution Other Total Lumber OSB EWP Distribution Other Total Adjusted EBITDA1,2 $ 127 $ 87 $ 52 $ 13 $ (5) $ 274 $ 117 $ 102 $ 50 $ 12 $ (3) $ 278 Depletion, depreciation & amortization (17) (7) (11
Slide 24: Gross Debt to Adjusted EBITDA Reconciliation
GROSS DEBT TO ADJUSTED EBITDA Chart 20 RECONCILIATION $ MILLIONS 2017 2017 Q2 Q3 Gross Debt to Adjusted EBITDA (LTM)1,2 3.7 3.1 Long-Term Debt $ 6,604 $ 5,995 Adjusted EBITDA (LTM)2 $ 1,794 $ 1,929 Depletion, depreciation & amortization (537) (531) Basis of real estate sold (103) (108) Unallocated p