Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q3 2015 Earnings Presentation
23 slides from Weyerhaeuser's earnings presentation, Oct 30, 2015
Slide 1: Earnings Results | 3rd Quarter 2015
EARNINGS RESULTS | 3rd Quarter 2015 October 30, 2015
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS 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 our current expectations and various
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: 2015 Q3 Consolidated Results
2015 Q3 CONSOLIDATED RESULTS Chart 1 $ Millions 2015 2015 $ Millions EXCEPT EPS 2015 2015 Contribution to Earnings Q2 Q3 Change Consolidated Statement of Operations Q2 Q3 Timberlands $ 127 $ 126 $ (1) Net sales $ 1,807 $ 1,820 Wood Products 71 85 14 Cost of products sold 1,474 1,445 Cellulose Fibers
Slide 5: Timberlands Segment
TIMBERLANDS SEGMENT Chart 2 TIMBERLANDS ($ Millions)4 2015 2015 3rd Quarter Notes Segment Statement of Operations Q2 Q3 • Lower Western fee harvest volumes Third party sales $ 334 $ 320 due to fire season logging constraints Intersegment sales 138 139 Total Sales 472 459 • Decreased Western sales Co
Slide 6: Sales Volumes and Realizations
SALES VOLUMES AND REALIZATIONS Chart 3 9 9 2015 Q3 9. Export log revenues are net of freight expense, rebates and claims. 6 10/30/2015
Slide 7: Western/Southern Timberlands
WESTERN/SOUTHERN TIMBERLANDS Chart 4 South West $24 $19 $17 $13 $4 $3 $5 HBU Sales, including Non- Strategic Timberlands $2 $4 $18 $3 $3 $3 $5 Like Kind Exchange (IRC Section 1031) $2 $20 $1 $— $14 $2 $8 7 10/30/2015
Slide 8: Wood Products Segment
WOOD PRODUCTS SEGMENT Chart 5 WOOD PRODUCTS ($ Millions) 2015 2015 WOOD PRODUCTS ($ Millions) 2015 2015 EBITDA by Business Q2 Q3 Segment Statement of Operations Q2 Q3 Lumber $ 59 $ 55 Third party sales $ 1,004 $ 1,023 OSB — 12 Intersegment sales 22 20 Engineered Wood Products 38 36 Total sales 1,026
Slide 9: 3rd-Party Sales Volumes and Realizations
3RD-PARTY SALES VOLUMES AND REALIZATIONS14 Chart 6 14. Sales volumes include sales of internally produced products and products purchased for resale primarily through our distribution business. 9 10/30/2015
Slide 10: Cellulose Fibers Segment
CELLULOSE FIBERS SEGMENT Chart 7 CELLULOSE FIBERS ($ Millions) 2015 2015 3rd Quarter Notes Segment Statement of Operations Q2 Q3 • Significantly lower maintenance Total Sales $ 467 $ 471 costs and higher production due to Cost of products sold 417 371 minimal scheduled maintenance Gross margin 50 10
Slide 11: Cellulose Fibers Segment
CELLULOSE FIBERS SEGMENT Chart 8 19 20 Pulp (ADMT) Liquid Packaging (metric tons)19 19. Beginning in first quarter 2015, liquid packaging volumes are reported in thousands of metric tons for all periods. 11 10/30/2015 20. Includes expenses for annual maintenance outages and other maintenance costs.
Slide 12: Unallocated Items
UNALLOCATED ITEMS Chart 9 UNALLOCATED ITEMS ($ Millions)21 2015 2015 UNALLOCATED ITEMS ($ Millions) 2015 2015 Q2 Q3 By Natural Expense Q2 Q3 Unallocated corporate function expenses $ (7) $ (4) Credit to products sold22 $ 20 $ 10 Unallocated share-based compensation 1 6 G&A expenses23 (8) (3) Unalloc
Slide 13: Financial Items
FINANCIAL ITEMS Chart 10 KEY FINANCIAL METRICS 2015 2015 2014 includes discontinued operations ($ Millions) Q2 Q3 Ending Cash Balance $ 1,121 $ 1,048 Long-Term Debt $ 4,891 $ 4,891 Gross Debt to Adjusted EBITDA (LTM)24 3.3 3.4 Net Debt to Enterprise Value25 19% 22% 2014: $1,088 million 2015 YTD: $72
Slide 14: Returning Cash to Shareholders
RETURNING CASH TO SHAREHOLDERS Chart 11 • Increased quarterly dividend by 7 percent to $0.31 per share • Completed $700 million share repurchase program announced August 2014 • Authorized new $500 million repurchase program in August 2015 SHARE REPURCHASES (millions) 2014 2015 Cumulative Q3 Q4 Q1 Q2
Slide 15: Outlook: 2015 Q4
OUTLOOK: 2015 Q4 Chart 12 SEGMENT COMMENTS TIMBERLANDS • Slightly higher Western fee harvest volumes and improved mix due to increased shipments to Japan • Comparable fee harvest volumes and higher logging costs in the South • Expect 2015 Q4 earnings to be comparable to 2015 Q3 WOOD • Seasonally low
Slide 16: Appendix
APPENDIX APPENDIX 16 10/30/2015
Slide 17: Pension and Postretirement Cost
PENSION AND POSTRETIREMENT COST Chart 13 $ Millions 2014 2015 Net Pension and Postretirement Cost (Credit)26 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Timberlands $ 3 $ 3 $ 2 $ 2 $ 3 $ 2 $ 2 Wood Products 5 6 6 7 7 7 6 Cellulose Fibers 2 3 3 3 3 5 5 Unallocated Items (10) (11) (12) (12) (3) (3) (2) Total Company Pension
Slide 18: Earnings Summary
EARNINGS SUMMARY Chart 14 $ Millions EXCEPT EPS 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Timberlands $ 164 $ 170 $ 136 $ 143 $ 162 $ 127 $ 126 Wood Products 64 102 105 56 62 71 85 Cellulose Fibers 54 91 59 87 33 27 79 Unallocated Items (14) 9 10 (13) (41) 20 (27) Total Contribution to Earnings before Special
Slide 19: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 15 $ Millions EXCEPT EPS 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Weighted Average Shares Outstanding, Diluted31 589 590 536 529 527 520 517 Diluted EPS from Continuing Operations Before Special Items $ 0.24 $ 0.40 $ 0.33 $ 0.27 $ 0.19 $ 0.26 $ 0.35 Discontinued Operati
Slide 20: EBITDA Reconciliation by Segment
EBITDA RECONCILIATION BY SEGMENT Chart 16 $ MILLIONS 2015 Q2 2015 Q3 Wood Cellulose Unallocated Wood Cellulose Unallocated Timberlands Products Fibers Items Total Timberlands Products Fibers Items Total Adjusted EBITDA32 $ 178 $ 98 $ 72 $ 10 $ 358 $ 177 $ 111 $ 123 $ (36) $ 375 Depreciation, depleti
Slide 21: EBITDA Reconciliation - Timberlands
EBITDA RECONCILIATION - TIMBERLANDS Chart 17 $ MILLIONS 2015 Q2 2015 Q3 West South Other Total West South Other Total Adjusted EBITDA32 $ 107 $ 68 $ 3 $ 178 $ 103 $ 70 $ 4 $ 177 Depreciation, depletion & amortization (28) (17) (6) (51) (27) (17) (7) (51) Operating Income (GAAP) $ 79 $ 51 $ (3) $ 127
Slide 22: EBITDA Reconciliation - Wood Products
EBITDA RECONCILIATION - WOOD PRODUCTS Chart 18 $ Millions 2015 Q2 2015 Q3 Lumber OSB EWP Distribution Other Total Lumber OSB EWP Distribution Other Total Adjusted EBITDA32, 33 $ 59 $ — $ 38 $ 2 $ (1) $ 98 $ 55 $ 12 $ 36 $ 9 $ (1) $ 111 Depreciation, depletion & amortization (11) (8) (6) (2) — (27) (
Slide 23: Gross Debt to EBITDA Reconciliation
GROSS DEBT TO EBITDA RECONCILIATION Chart 19 $ MILLIONS 2015 2015 Q2 Q3 Gross Debt to Adjusted EBITDA (LTM)34, 35 3.3 3.4 Long-Term Debt $ 4,891 $ 4,891 Adjusted EBITDA (LTM)35 $ 1,481 $ 1,442 Depreciation, depletion & amortization (489) (484) Non-operating pension & postretirement costs 30 20 Speci