Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Investor Day (December 2016)
88 slides from Weyerhaeuser's investor day presentation, Dec 13, 2016
Slide 1: Weyerhaeuser Investor Meeting
WEYERHAEUSER INVESTOR MEETING December 13, 2016 | New York
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
FORWARD-LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES 2 This presentation contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, without limitation, with respect to future prospects, business str
Slide 3: Introduction
INTRODUCTION DOYLE SIMONS President and CEO 3
Slide 4: Weyerhaeuser's Investment Thesis
WEYERHAEUSER’S INVESTMENT THESIS FOCUSED ON DRIVING VALUE FOR SHAREHOLDERS Operational excellence Most value from every acre Return cash to shareholders Invest in our businesses Maintain appropriate capital structure Premier timber, land, and wood products assets SUPERIOR RELATIVE TOTAL
Slide 5: Focused Portfolio of Scale Assets
FOCUSED PORTFOLIO OF SCALE ASSETS 6 7 13 0% 20% 40% 60% 80% 100% 2012 2013 2016 MILLION ACRES MILLION ACRES MILLION ACRES Timberlands Wood Products Cellulose Fibers WRECO Timberlands Wood Products Cellulose Fibers WRECO Timberlands Wood Products INCREASING FOCUS UNMATCHED SCALE
Slide 6: Performance: Achieving 2016 Commitments
PERFORMANCE: Achieving 2016 Commitments 6 HARD DOLLAR COST SYNERGIES $100 million OPERATIONAL SYNERGIES $130-140 million WOOD PRODUCTS OPX $60 million ACCELERATED SHARE REPURCHASE $2 billion AT LEAST $40 MILLION IN 2016 ON TRACK FOR $125 MILLION COMPLETED IN UNDER 6 MONTHS ON TRACK AVO process MAXIM
Slide 7: Right People in the Right Roles
▪ Retained strengths of both organizations ▪ Placed high potential individuals in key roles ▪ Good mix from both companies on operating teams ▪ Selected leaders who excel at execution and know how to build a common culture RIGHT PEOPLE IN THE RIGHT ROLES 7
Slide 8: Vision, Behaviors and How We Win
Working together to be the world’s premier R VISION timber, land, and forest products company HOW WE WIN WHAT IT LOOKS LIKE 4 Vv KEY WEYERHAEUSER BEHAVIORS A TRULY GREAT COMPANY + Safety + Develop + Act with urgency our people + Integrity + + Be accountable + Deliver the most + Citizenship . + Susta
Slide 9: Timberlands
TIMBERLANDS RHONDA HUNTER Senior Vice President, Timberlands 9
Slide 10: Strategy for Success: Timberlands
STRATEGY FOR SUCCESS Timberlands 10 BEST TIMBERLANDS Superior quality and productivity Unmatched diversity Unparalleled scale Sustainably certified RIGHT PEOPLE IN THE RIGHT ROLES DRIVE RESULTS WINNING INDUSTRY- LEADING EBITDA PER ACRE BEST EXECUTION Operational synergies from merger Ong
Slide 11: One of the Largest Private Timberland Owners in the World
ONE OF THE LARGEST PRIVATE TIMBERLAND OWNERS IN THE WORLD 11 QUALITY, DIVERSITY & SCALE ARE UNMATCHED NORTH 2.5 MILLION ACRESWEST 3.0 MILLION ACRES SOUTH 7.4 MILLION ACRES 100% CERTIFIED TO SUSTAINABLE STANDARDS
Slide 12: US West Timberlands
US WEST TIMBERLANDS Export Other Export Japan Domestic Sales Internal Sales UNPARALLELED SCALE UNMATCHED DIVERSITYSUPERIOR QUALITY #1 Private timberlands owner Largest export log facility in U.S. Well-balanced age-class Three diverse market drivers Unique access to premium export market AGE
Slide 13: US South Timberlands
US SOUTH TIMBERLANDS UNPARALLELED SCALE UNMATCHED DIVERSITYSUPERIOR QUALITY Favorable age-class inventory End-to-end market knowledge in every major wood market AGE CLASS IN YEARS #1 Private timberlands owner Scale operations in every region Superior efficiency in planning, infrastructure an
Slide 14: US North Timberlands
US NORTH TIMBERLANDS UNPARALLELED SCALE UNMATCHED DIVERSITYSUPERIOR QUALITY #1 Private timberland owner in Northern hardwood Well developed merchandising program to maximize value of every log 15% premium value hardwood sawlogs Proximate to key markets Nearly 80% of hardwood pulpwood sold
Slide 15: Sustainable and Growing Harvest
SUSTAINABLE AND GROWING HARVEST M I L L I O N S O F T O N S 0 5 10 15 20 25 30 35 40 45 2016 2017-2021 2022-2026 2027-2031 SOUTH WEST NORTH Projected harvest levels exclude Uruguay operations and may change as a result of future acquisitions or dispositions of timberlands, including activity within
Slide 16: Timberlands: Relative Performance
TIMBERLANDS: Relative Performance ADJUSTED EBITDA* / ACRE OWNED U.S. WEST ADJUSTED EBITDA* / ACRE OWNED U.S. SOUTH Source for competitor data: public SEC filings, National Council of Real Estate Investment Fiduciaries (NCREIF). *Adjusted EBITDA. See appendix for reconciliation to GAAP amounts. **WY
Slide 17: Timberlands: OpX Performance
TIMBERLANDS: OpX Performance OPERATIONAL EXCELLENCE 2 0 1 4 - 1 5 2 0 1 6 PROGRESS GOAL $64 MM $40 MM OUTLOOK $200 MM TOTAL GOAL KEY INITIATIVES Capture operational synergies ̶ Optimize wood flows to minimize costs and increase realizations ̶ Optimize silviculture: cost and value creation ̶ Best p
Slide 18: Operational Synergies: Northern Louisiana Reduce Transportation Cost
OPERATIONAL SYNERGIES: NORTHERN LOUISIANA REDUCE TRANSPORTATION COST 18 OPPORTUNITY Optimize transportation by delivering from combined land base ACTION Reallocate fiber supply based on proximity to mill RESULT Reduced average haul distance by: CUSTOMER A CUSTOMER B Customer A 10 miles Custome
Slide 19: Operational Synergies: Northern Louisiana Reduce Harvesting Cost
OPERATIONAL SYNERGIES: NORTHERN LOUISIANA REDUCE HARVESTING COST 19 OPPORTUNITY Benchmark stump to truck costs and identify best practices ACTION Develop multi-year plan to close the gap ̶ Utilize right equipment in the woods ̶ Maximize contractor productivity ̶ Improve wood flow planning RESULT
Slide 20: Operational Synergies: Northern Louisiana Merchandise to Extract Value
OPERATIONAL SYNERGIES: NORTHERN LOUISIANA MERCHANDISE TO EXTRACT VALUE OPPORTUNITY Benchmark merchandising practices to capture value extraction Combined land base creates better scale and proximity to serve high value customers ACTION Capture opportunities to merchandise higher value log mix
Slide 21: Operational Synergies: Optimizing Silviculture Investment
21 Activity Cost Difference $/acre Stand Establishment $10 Competition Control $10 Fertilization $20 OPPORTUNITY Benchmark silviculture costs Grow long-term value by adopting best practices and retaining best genetics ACTION Adopt regional silviculture regimes that: ̶ Target product mix best s
Slide 22: Operational Excellence: Steep Slope Logging Technology
22 OPPORTUNITY Utilize new cable-assist technology to mechanize harvest on steep slopes Reduce reliance on manual labor and high cost equipment to improve safety and productivity ACTION Expand use of steep slope technologies across ̶ Western footprint ̶ Previously inoperable acres in Maine W
Slide 23: Timberlands: Sources of Operational Synergies
TIMBERLANDS: Sources of Operational Synergies 23 WE PRODUCE LOGS AND WE HAVE SYNERGY OPPORTUNITIES AT EVERY STAGE OF THE PROCESS SEEDLINGS PLANTING SILVICULTURE HARVEST TRANSPORT MARKETING
Slide 24: Strategy for Success: Timberlands
STRATEGY FOR SUCCESS Timberlands 24 BEST TIMBERLANDS Superior quality and productivity Unmatched diversity Unparalleled scale Sustainably certified RIGHT PEOPLE IN THE RIGHT ROLES DRIVE RESULTS WINNING INDUSTRY- LEADING EBITDA PER ACRE BEST EXECUTION Operational synergies from merger Ong
Slide 25: Real Estate and Energy & Natural Resources
REAL ESTATE AND ENERGY & NATURAL RESOURCES JIM KILBERG Senior Vice President, Real Estate and Energy & Natural Resources 25
Slide 26: Strategy for Success: Real Estate and Energy & Natural Resources
STRATEGY FOR SUCCESS Real Estate and Energy & Natural Resources 26 REAL ESTATE Higher and Better Use Capture premium over timberland value through Asset Value Optimization RIGHT PEOPLE IN THE RIGHT ROLES DRIVE RESULTS WINNING DELIVERING THE MOST VALUE FROM EVERY ACRE ENERGY & NATURAL RESOURCES Cap
Slide 27: Real Estate: Delivering the Most Value from Every Acre
Identify opportunities to capture premium value (Asset Value Optimization — AVO) REAL ESTATE: Delivering the most value from every acre 27 Determine timber net present value for each acre Deliver a premium to timber net present value 2 3 1
Slide 28: Step 1: Determine Timber Net Present Value
DELIVERING THE MOST VALUE FROM EVERY ACRE STEP 1: DETERMINE TIMBER NET PRESENT VALUE 28 TIMBERLAND PORTFOLIO Timber Valuation Real Estate & ENR Timberland Operations HIGHEST NPV WINS
Slide 29: Step 2: Asset Value Optimization (AVO)
DELIVERING THE MOST VALUE FROM EVERY ACRE STEP 2: ASSET VALUE OPTIMIZATION (AVO) 29 Review tract specific attributes Review market area information PHASE 1 Analyze Parcel PHASE 2 ‘Ground Truthing’ PHASE 3 Value Comparison Collaborative process between Timberlands and Real Estate Local market
Slide 30: AVO Process for Legacy WY Lands: Proceeding Quickly
AVO PROCESS FOR LEGACY WY LANDS: Proceeding quickly 30 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 MERGER CLOSE WY SOUTHERN ANALYSIS 4.0 million acres WY WESTERN ANALYSIS 2.6 million acres BEGIN LISTINGS Q3 Q4 BEGIN LISTINGS IDENTIFIED APPROXIMATELY 500,000 NEW AVO ACRES FROM LEGACY WY SOUTHERN TIMBERLANDS
Slide 31: Companywide AVO Summary
OPERATING REGION Total AVO Acres to Date Timberlands Acres AVO % SOUTHERN U.S. Mid-South 220,000 2,900,000 8% Gulf South 270,000 2,300,000 12% Atlantic South 450,000 2,200,000 20% SOUTHERN U.S. TOTAL 940,000 7,400,000 13% NORTHERN U.S. TOTAL 360,000 2,500,000 14% WESTERN U.S. TOTAL AVO Identif
Slide 32: Outsourced Model Provides Operating Leverage
OUTSOURCED MODEL PROVIDES OPERATING LEVERAGE DELIVERING THE MOST VALUE FROM EVERY ACRE STEP 3: DELIVERING THE PREMIUM TO TIMBER VALUE 32 MASTER BROKER + REGIONAL TRANSACTION MANAGERS INDEPENDENT LOCAL BROKERS (100+) LAND ASSET MANAGEMENT TEAM REAL ESTATE / BROKER PARTNERSHIP
Slide 33: Step 1: Determine Timber NPV (Riverbend Parcel)
DELIVERING THE MOST VALUE FROM EVERY ACRE STEP 1: DETERMINE TIMBER NET PRESENT VALUE 33 TIMBER VALUATION Cover type Acres Pine Plantation 165 Hardwood & Bottomland 80 Non Productive 15 TOTAL ACRES 260 TIMBER NPV IS CALCULATED AT THE STAND LEVEL TIMBER NPV = $455,000 HBU PARCEL – Riverbend Sold in 20
Slide 34: Step 2: AVO – Analyze Parcel
DELIVERING THE MOST VALUE FROM EVERY ACRE STEP 2: AVO – ANALYZE PARCEL 34 DESKTOP ANALYSIS IS A PRELIMINARY SCREEN Physical & geographical Social Economic value ASSESS PROPERTY ATTRIBUTES HBU PARCEL – Riverbend Sold in 2016
Slide 35: Step 2: AVO – Ground Truthing
DELIVERING THE MOST VALUE FROM EVERY ACRE STEP 2: AVO – GROUND TRUTHING 35 VERIFY ATTRIBUTES ▪ Proximity to Tallahassee ▪ Near Ochlockonee River ▪ Diverse age class & forest cover type attractive for recreation ▪ Improving recreation markets in local area GROUND TRUTHING VERIFIES PARCEL CHARACTERIST
Slide 36: Step 3: Delivering the Premium to Timber Value
DELIVERING THE MOST VALUE FROM EVERY ACRE STEP 3: DELIVERING THE PREMIUM TO TIMBER VALUE 36 GOAL: CAPTURE AVERAGE PREMIUM OF 30% ACROSS PORTFOLIO TRANSACTION METRICS TOTAL $ $ PER ACRE % PREMIUM Timber NPV $455,000 $1,750 Sales Price $645,000 $2,500 PREMIUM TO TIMBER VALUE $190,000 $750 42% HBU PARC
Slide 37: Real Estate: Buyer Profile
▪ Activity remains strong, especially in the South ▪ Buyers targeting recreation tracts with investment potential ▪ Conservation interest remains solid REAL ESTATE: Buyer profile Adjacent Landowner Recreation/ Investment Conservation Second Home or Cabin Other BUYER’S INTENDED USE 37
Slide 38: Energy & Natural Resources: Diverse Mix of Assets
ENERGY & NATURAL RESOUCES (ENR): Diverse mix of assets 38 Adjusted EBITDA Mix 60% Aggregates & Industrial Minerals 30% Oil & Natural Gas 10% Wind & Other CURRENT ENR LEASES AND AGREEMENTS Timberlands ownership
Slide 39: ENR Provides Growing Source of Stable Royalty Streams
ENR PROVIDES GROWING SOURCE OF STABLE, ONGOING ROYALTY STREAMS 39 263 MW of wind energy operating Over 260 MW more constructed by end of 2018 REAL ESTATE, ENERGY & NATURAL RESOURCES WOOD PRODUCTS 610,000 acres leased for exploration and development Royalty interest in over 3,000 oil and gas
Slide 40: Strategy for Success: Real Estate and Energy & Natural Resources
STRATEGY FOR SUCCESS Real Estate and Energy & Natural Resources 40 REAL ESTATE Higher and Better Use Capture premium over timberland value through Asset Value Optimization RIGHT PEOPLE IN THE RIGHT ROLES DRIVE RESULTS WINNING DELIVERING THE MOST VALUE FROM EVERY ACRE ENERGY & NATURAL RESOURCES Cap
Slide 41: Wood Products
LUMBER ORIENTED STRAND BOARD ENGINEERED WOOD DISTRIBUTION WOOD PRODUCTS ADRIAN BLOCKER Senior Vice President, Wood Products 41
Slide 42: Industry Leading North American Wood Products Producer
INDUSTRY LEADING NORTH AMERICAN WOOD PRODUCTS PRODUCER 42 LUMBER PRODUCTION 3rd OSB PRODUCTION 4th ENGINEERED WOOD REVENUE 1st DISTRIBUTION FACILITIES (not shown) 17 EACH BUSINESS HAS SCALE AND DIVERSITY $4.3 Revenue represents Wood Products revenue for 2016 Q3 LTM. BILLION REVENUE 4 VENEER / PLYWOO
Slide 43: Strategy for Success: Wood Products
STRATEGY FOR SUCCESS Wood Products 43 RIGHT ALIGNMENT RIGHT COST RIGHT CUSTOMERS INDUSTRY LEADER INDUSTRY LEADING MARGINS AND BLACK AT THE BOTTOM Top-quartile cost structure Preferred supplier for targeted markets and customers Strong alignment with fiber supply
Slide 44: Lumber: Strategic Focus
LUMBER: STRATEGIC FOCUS Low cost, diverse customers, alignment with fiber supply 44 Fiber Controllables CASH COST OF PRODUCTION Focus on controllable cost New Residential Repair & Remodel Industrial Export DIVERSE CUSTOMER BASE Important over the cycle 4.8 BILLION BOARD FEET Total capacity 19 MILLS
Slide 45: OSB: Strategic Focus
OSB: STRATEGIC FOCUS Reliability, low cost, diverse customer mix 45 New Residential Repair & Remodel Industrial DIVERSE CUSTOMER BASE Important over the cycle Fiber Resin & Wax Controllables CASH COST OF PRODUCTION Focus on controllable cost 3.0 BILLION SQUARE FEET Total capacity 6 MILLS Cash cost o
Slide 46: Engineered Wood: Strategic Focus
ENGINEERED WOOD: STRATEGIC FOCUS Low cost, end-market alignment, diverse customer mix 46 3rd Party Distributor New Residential WY Distribution New Residential Industrial Export Repair & Remodel Other DIVERSE CUSTOMER BASE Distributors are key OSB Fiber Resin Controllables CASH COST OF PRODUCTION Foc
Slide 47: Distribution: Strategic Focus
DISTRIBUTION: STRATEGIC FOCUS Driving margin, reducing costs, improving mix 47 Local Dealers National Dealers Repair & Remodel Industrial & Other DIVERSE CUSTOMER BASE Within and across markets Commodity Wood Products Engineered Wood Products Other Specialty Products SALES MIX BY REVENUE Focus on En
Slide 48: Developing a Roadmap to Top Quartile
DEVELOPING A ROADMAP TO TOP QUARTILE 48 BENCHMARK COSTS IDENTIFY GAPS EARN THE RIGHT TO CAPITAL NON-CAPITAL IMPROVEMENTS 1 2 3 DISCIPLINED CAPEX 4 5 WINNING
Slide 49: Benchmarking: Southern Lumber Mill
BENCHMARKING: SOUTHERN LUMBER MILL Closing the gap on controllable cost 49 WY Mill Cost in 2013 Benchmark Cost FOCUS ON CONTROLLABLES: MAINTENANCE AND RELIABILITY C O N T R O L L A B L E C O S T ( $ / M B F ) 3 r d Q U A R T I L E 1 s t Q U A R T I L E THE GAP QUARTILE COST METRIC 1st Q Manufacturin
Slide 50: Roadmap: Southern Lumber Mill
2013 2014 2015 2016 2017 2018 2019 2020 DEVELOP ROADMAP NON CAPITAL: IMPROVE RELIABILITY DISCIPLINED CAPITAL ROADMAP: SOUTHERN LUMBER MILL Reducing cost with non-capital initiatives 50 100% 110% 120% 130% 140% 150% 2013 2014 2015 2016 2017 2018 2019 2020 2021 Controllable Cost — Percent of Benchmark
Slide 51: OpX: Progress and Targets
OPX: Progress and targets Controllable cost Improved recovery Focused capital investments Reliability Controllable cost Enhanced product mix Controllable cost Improved recovery Improved product margins Reduced operating costs Lower selling expenses *Adjusted EBITDA. See appendi
Slide 52: OpX: Relative Performance
OPX: Relative performance 52 LUMBER ADJUSTED EBITDA MARGIN* RELATIVE PERFORMANCE -5% 0% 5% 10% 15% 20% 2011 2012 2013 2014 2015 2016 Q3 YTD Canfor Lumber Interfor Lumber West Fraser Lumber WY Lumber EWP ADJUSTED EBITDA MARGIN* RELATIVE PERFORMANCE -3% 0% 3% 6% 9% 12% 15% 18% 2011 2012 2013 2014 2015
Slide 53: Our Goal Is to Be Black at the Bottom of the Cycle
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q3 LTM OUR GOAL is to be black at the bottom of the cycle $250 MILLION OF OPX ACHIEVED THROUGH 2016 53 SIGNIFICANT PROGRESS TOWARDS “BLACK AT THE BOTTOM” WE ARE 70% of the way there 2017 OPX ADDS 10% WE ARE 70% OF THE WAY THERE 2017 OP
Slide 54: Strategy for Success: Wood Products
STRATEGY FOR SUCCESS Wood Products 54 RIGHT ALIGNMENT RIGHT COST RIGHT CUSTOMERS INDUSTRY LEADER INDUSTRY LEADING MARGINS AND BLACK AT THE BOTTOM Top-quartile cost structure Preferred supplier for targeted markets and customers Strong alignment with fiber supply
Slide 55: Financial Items
FINANCIAL ITEMS 55 RUSSELL HAGEN Senior Vice President and Chief Financial Officer
Slide 56: Operational Excellence: Summary
OPERATIONAL EXCELLENCE: Summary 56*2014-2015 OPX includes $75 million from Cellulose Fibers business. OpX CAPTURED THROUGH 2015* $330 MILLION $100 MILLION OpX ESTIMATE 2016 $95-115 MILLION OpX TARGET 2017 TOTAL IMPROVEMENTS EXCEEDING $525 MILLION BY 2017 YEAR END
Slide 57: Real Estate & ENR Segment Ramping Up
REAL ESTATE & ENR SEGMENT RAMPING UP 57 Expect approximately $250 million Adjusted EBITDA in 2017 Some further upside in 2018 and beyond Real Estate business part of continual portfolio management ̶ AVO process captures premium over timberland values ̶ Ongoing acquisition of quality, core timb
Slide 58: Merger Cost Synergies: Exceeding $100 Million Target
MERGER COST SYNERGIES: Exceeding $100 million target 58 MILLION MILLION MILLION All merger cost synergies captured by 2017 Q1 Labor reductions and facility consolidation – 80% SG&A – 20% cost of sales HARD DOLLAR MERGER COST SYNERGIES All amounts on a run rate basis. Elimination of $35 million o
Slide 59: Q4 Outlook Update
Q4 Outlook Update 59 FINANCIAL ITEMS
Slide 60: Market Outlook
Market Outlook 60 FINANCIAL ITEMS
Slide 61: Continued Growth in U.S. Housing Market
CONTINUED GROWTH IN U.S. HOUSING MARKET 61 U.S. HOUSING STARTS SEASONALLY ADJUSTED ANNUAL RATE Growth supported by: ̶ Rising employment and wages ̶ Historically low mortgage rates ̶ Demographics ̶ Pent-up housing demand Current supply constraints: ̶ Mortgage availability ̶ Labor shortages ̶ Lot
Slide 62: Lumber: Strong Demand Growth
0% 20% 40% 60% 80% 100% 0 10 20 30 40 50 60 70 80 90 100 2004 2006 2008 2010 2012 2014 2016 2018 2020 O P E R A T I N G R A T E I N P E R C E N T D E M A N D I N B B F ANNUAL Forecast Source: FEA FEA FEA YTD Q3 Annualized LUMBER: Strong demand growth 62 EXPECT GROWTH of 2-3 BBF per Year NORTH AMERIC
Slide 63: Lumber: Canadian Exports Constrained; Southern Production Rising
0% 5% 10% 15% 20% 25% 30% 35% 40% 0 5 10 15 20 25 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 S H A R E O F C O N S U M P T I O N I N P E R C E N T E X P O R T S I N B B F ANNUALSource: Random Lengths, FEA YTD Q3 Annualized 0 5 10 15 20 2004 2006 2008 2010 2012 2014 2016 2018 20
Slide 64: Lumber: Pricing Remains Strong
LUMBER: Pricing remains strong 64 Continued growth in U.S. housing and repair & remodel Declining Canadian lumber production Rising operating rates PRICING OUTLOOK FRAMING LUMBER COMPOSITE 150 200 250 300 350 400 450 500 2005 2007 2009 2011 2013 2015 2017 2019 $ / M B F QUARTERLYSources: Rando
Slide 65: Southern Sawlogs: Improving Demand and Pricing
20 30 40 50 60 70 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 $ / G R E E N T O N ANNUAL Forecast* Source: Timber Mart-South, *FEA, *RISI RISI FEA YTD Nov SOUTHERN SAWLOGS: Improving demand and pricing 65 Lumber production increasing in the U.S. South Constrained Canadian lu
Slide 66: Western Sawlogs: Strong Demand from Export and Domestic Markets
WESTERN SAWLOGS: Strong demand from export and domestic markets 66 Steady demand for premium Japanese logs ̶ Wooden housing starts up nearly 9% 2016 YTD ̶ Favorable mortgage rates Chinese economic growth supports continued demand for US logs Western domestic demand increasing 0 100 200 300 400
Slide 67: OSB: Continued Strong Markets
100 150 200 250 300 350 400 450 2005 2007 2009 2011 2013 2015 2017 2019 $ / M S F QUARTERLYSources: Random Lengths, *RISI, *FEA Forecast* RISI FEA OSB: Continued strong markets 67 Demand increasing steadily, driven by ̶ Single-family starts ̶ Repair & remodel Industry capacity additions will mee
Slide 68: Timberland Markets Remain Strong
TIMBERLAND MARKETS REMAIN STRONG 68 Investment in industrial timberlands remains competitive Continued interest from institutional investors and REITs Deal flow remains robust Recent transactions support continued solid timberland valuations
Slide 69: Capital Allocation
Capital Allocation 69 FINANCIAL ITEMS
Slide 70: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES 70 Sustainable and growing dividend Opportunistic share repurchases INVEST IN OUR BUSINESSES Timberlands ̶ Improve productivity ̶ Optimize portfolio Wood Products ̶ Reduce costs MAINTAIN APPROPRIATE CAPITAL STRUCTURE Committed to a solid investment grade ratin
Slide 71: Returning Cash to Shareholders: Sustainable and Growing Dividend
RETURNING CASH TO SHAREHOLDERS: Sustainable and growing dividend 71 $0.15 $0.17 $0.20 $0.22 $0.29 $0.31 2011 Q1 2012 Q4 2013 Q2 2013 Q3 2014 Q3 2015 Q3 QUARTERLY DIVIDEND PER SHARE SUSTAINABLE AND GROWING DIVIDEND Current yield approx. 3.8%* More than doubled since 2011 QUARTERLY DIVIDEND 75%
Slide 72: Returning Cash to Shareholders: Share Repurchase
RETURNING CASH TO SHAREHOLDERS: Share repurchase 72 $2.5 BILLION SHARE REPURCHASE $2 BILLION ACCELERATED Completed in less than 6 months Repurchased 68 million shares at an average price of $29.49 per share $500 MILLION REMAINING Complete on an opportunistic basis Evaluate in context of over
Slide 73: Investing in Our Businesses: Disciplined Capital Expenditures for 2017
INVESTING IN OUR BUSINESSES: Disciplined capital expenditures for 2017 73 TIMBERLANDS * Excludes $5 million for Corporate and Other Reduce costs and improve productivity Maintenance capex Silviculture Roads and infrastructure 2 0 1 7 C A P E X * FOCUS WOOD PRODUCTS REAL ESTATE, ENERGY & NATU
Slide 74: Optimize Timberland Portfolio
▪ Comprehensive review of timberland portfolio to identify ̶ Value of every acre ̶ Areas for strategic investment ̶ Non-strategic timberlands ▪ Continue to strategically upgrade portfolio ̶ Silvicultural investments to improve productivity ̶ Divest less productive or non-strategic timberlands ̶ Rein
Slide 75: Capital Structure
▪ $1.7 billion term loan balance repaid December 1, 2016 ▪ Solid investment grade credit rating of Baa2 / BBB- stable ▪ Target net debt / Adjusted EBITDA < 3.5x ▪ Net Debt to Enterprise Value 18%* CAPITAL STRUCTURE 75 $0 $400 $800 $1,200 $1,600 $2,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 202
Slide 76: Summary
SUMMARY 76 DOYLE SIMONS President and CEO
Slide 77: Headquarters Move to Seattle
HEADQUARTERS MOVE TO SEATTLE 77
Slide 78: Weyerhaeuser's Investment Thesis
WEYERHAEUSER’S INVESTMENT THESIS FOCUSED ON DRIVING VALUE FOR SHAREHOLDERS Operational excellence Most value from every acre Return cash to shareholders Invest in our businesses Maintain appropriate capital structure Premier timber, land, and wood products assets SUPERIOR RELATIVE TOTAL
Slide 79: Weyerhaeuser Investor Meeting
WEYERHAEUSER INVESTOR MEETING December 13, 2016 | New York
Slide 80: Biographies
BIOGRAPHIES 80
Slide 81: Doyle Simons, President and CEO
DOYLE SIMONS 81 President and CEO Doyle R. Simons has been President and Chief Executive Officer since August 1, 2013. He has been a director of the company since June 2012 and was appointed as Chief Executive Officer Elect and an executive officer of the company June 17, 2013. He served as Chairman
Slide 82: Rhonda Hunter, Senior Vice President, Timberlands
RHONDA HUNTER 82 Senior Vice President, Timberlands Rhonda D. Hunter has been Senior Vice President, Timberlands, since January 1, 2014. Prior to her current position, she was Vice President, Southern Timberlands, from 2010 to 2014. She held a number of leadership positions in the Southern Timberlan
Slide 83: James Kilberg, Senior Vice President, Real Estate, ENR
JAMES KILBERG 83 Senior Vice President, Real Estate, Energy and Natural Resources James A. Kilberg was named Weyerhaeuser's senior vice president, real estate, energy and natural resources in April 2016. In this position, he oversees the company’s non-timber businesses, including real estate develop
Slide 84: Adrian Blocker, Senior Vice President, Wood Products
ADRIAN BLOCKER 84 Senior Vice President, Wood Products Adrian M. Blocker has been Senior Vice President, Wood Products, since Jan. 1, 2015. Prior to this role, he was Senior Vice President, Lumber, from August 2013 to December 2014. He joined Weyerhaeuser in May 2013 as Vice President, Lumber. Befor
Slide 85: Russell Hagen, Senior Vice President and CFO
RUSSELL HAGEN 85 Senior Vice President and Chief Financial Officer Russell S. Hagen has been Senior Vice President and Chief Financial Officer since February 19, 2016. Previously, he was Senior Vice President, Business Development at Plum Creek, overseeing the company’s business development activiti
Slide 86: Appendix
APPENDIX 86
Slide 87: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION: TIMBERLANDS 87 $ Millions 2011 2012 2013 2014 2015 2016 Q3 LTM West $279 $258 $373 $571 $459 $447 South 226 298 328 410 430 418 North 29 28 32 47 41 28 Other (15) (8) 46 2 7 4 Adjusted EBITDA including Legacy Plum Creek operations1,3 $519 $576 $779 $1,030 $937 $897 Le
Slide 88: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION: WOOD PRODUCTS 88 $ Millions 2009 2010 2011 2012 2013 2014 2015 2016 Q3 YTD1 Lumber ($7) $130 $317 $319 $212 $232 OSB (4) 143 247 46 41 137 EWP 6 17 45 79 114 119 Distribution (37) (29) (33) 2 10 20 Other (1) (15) (2) - (5) 1 Adjusted EBITDA2 ($343) ($85) ($43) $246 $5