Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q4 2018 Earnings Presentation
25 slides from Weyerhaeuser's earnings presentation, Feb 1, 2019
Slide 1: Earnings Results 4th Quarter 2018
WEYERHAEUSER EARNINGS RESULTS 4TH QUARTER 2018 | February 1, 2019
Slide 2: Forward-Looking Statement
FORWARD-LOOKING STATEMENT 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 earnings, adjusted EBITDA, interest
Slide 3: 2018 Consolidated Results
2018 CONSOLIDATED RESULTS Chart 1 $ Millions 2017 2018 $ Millions (except EPS) 2017 2018 Adjusted EBITDA FY FY Change Consolidated Statement of Operations Before FY FY Special Items Timberlands $ 936 $ 902 $ (34) Net sales $ 7,196 $ 7,476 Real Estate, Energy & Natural Resources 241 264 23 Costs of s
Slide 4: 2018 Q4 Consolidated Results
2018 Q4 CONSOLIDATED RESULTS Chart 2 $ Millions 2018 2018 $ Millions (except EPS) 2018 2018 Adjusted EBITDA Q3 Q4 Change Consolidated Statement of Operations Before Q3 Q4 Special Items Timberlands $ 206 $ 188 $ (18) Net sales $ 1,910 $ 1,636 Real Estate, Energy & Natural Resources 86 90 4 Costs of s
Slide 5: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS Chart 3 $ Millions (except EPS) 2018 Q3 2018 Q4 Pre-Tax After-Tax Diluted Pre-Tax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings (Loss) Before Special Items $ 240 $ 214 $ 0.28 $ 73 $ 70 $ 0.10 Special Items: Tax adjustments1 — 41 0.06 — (21) (0.0
Slide 6: Adjusted EBITDA
ADJUSTED EBITDA1 Chart 4 2 Adjusted EBITDA (millions) Adjusted EBITDA (millions) Real Estate $ 29 20 58 71 27 30 68 71 ENR $ 14 17 16 16 14 17 18 19 Adjusted EBITDA (millions) Adjusted EBITDA (millions) West $ 133 124 111 140 165 152 121 94 Lumber $ 99 127 117 116 140 195 118 6 South $ 96 91 95 101
Slide 7: Timberlands Segment
TIMBERLANDS SEGMENT Chart 5 TIMBERLANDS ($ Millions) 2018 2018 TIMBERLANDS ($ Millions) 2018 2018 Adjusted EBITDA by Region Q3 Q4 Segment Statement of Operations Q3 Q4 West $ 121 $ 94 Third-party sales $ 459 $ 449 South 80 89 Intersegment sales 128 128 North 4 6 Total Sales 587 577 Other 1 (1) Costs
Slide 8: Sales Volumes, Realizations, and Export Revenue
SALES VOLUMES, Chart 6 REALIZATIONS, AND EXPORT REVENUE 1 1. Western logs are primarily transacted in MBF but are converted Japan 70% 65% 62% 68% 72% 68% 69% 67% to ton equivalents for external reporting purposes. China 24% 26% 29% 27% 23% 27% 22% 27% Korea 6% 9% 9% 5% 5% 5% 9% 6% 8 February 1, 2019
Slide 9: Fee Harvest Volume and Intersegment Sales Volume
FEE HARVEST VOLUME Chart 7 AND INTERSEGMENT SALES VOLUME South West North 9 February 1, 2019
Slide 10: Real Estate, Energy and Natural Resources (ENR) Segment
REAL ESTATE, ENERGY AND Chart 8 NATURAL RESOURCES (ENR) SEGMENT Real Estate & ENR ($ Millions) 2018 2018 Real Estate & ENR ($ Millions) 2018 2018 Adjusted EBITDA by Business Q3 Q4 Segment Statement of Operations Q3 Q4 Real Estate $ 68 $ 71 Total sales $ 96 $ 102 Energy & Natural Resources 18 19 Cost
Slide 11: Real Estate, Energy and Natural Resources (ENR) Segment
REAL ESTATE, ENERGY AND Chart 9 NATURAL RESOURCES (ENR) SEGMENT Price per acre 11 February 1, 2019
Slide 12: Wood Products Segment
WOOD PRODUCTS SEGMENT Chart 10 WOOD PRODUCTS ($ Millions) 2018 2018 WOOD PRODUCTS ($ Millions) 2018 2018 Adjusted EBITDA by Business Q3 Q4 Segment Statement of Operations Q3 Q4 Lumber $ 118 $ 6 Total sales $ 1,346 $ 1,075 OSB 77 31 Costs of sales 1,071 991 Engineered Wood Products 48 26 Gross margin
Slide 13: 3rd-Party Sales Volumes and Realizations
3RD-PARTY SALES VOLUMES AND REALIZATIONS1 Chart 11 1. Sales volumes include sales of internally produced products and products purchased for resale primarily through our Distribution business. 13 February 1, 2019
Slide 14: Unallocated Items
UNALLOCATED ITEMS Chart 12 UNALLOCATED ITEMS ($ Millions)1 2018 2018 UNALLOCATED ITEMS ($ Millions) 2018 2018 Q3 Q4 By Natural Expense Q3 Q4 Unallocated corporate function expenses and variable compensation expense $ (19) $ (28) Costs of sales5 $ (6) $ 27 Liability classified share-based compensatio
Slide 15: Financial Items
FINANCIAL ITEMS Chart 13 KEY FINANCIAL METRICS ($ Millions) 2018 2018 Q3 Q4 Ending Cash Balance $348 $334 Total Debt1 $5,921 $6,344 4 Net Debt to Adjusted EBITDA (LTM)2 2.5 3.0 Net Debt to Enterprise Value3 18% 27% 1. Total Debt includes $500 million for the current portion of long-term debt in 4. E
Slide 16: Outlook: 2019 Q1 vs. 2018 Q4
OUTLOOK: 2019 Q1 vs. 2018 Q4 Chart 14 SEGMENT COMMENTS TIMBERLANDS ● Seasonally lower fee harvest volumes and comparable average log sales realizations in the South ● Lower fee harvest volumes in the West, with average log sales realizations moderately below the fourth quarter average ● Significantl
Slide 17: Outlook: 2019
OUTLOOK: 2019 Chart 15 DRIVER FY 2019 OUTLOOK FEE HARVEST VOLUME Comparable to 2018, at approximately 38 million tons REAL ESTATE & ENR EBITDA $260 million BASIS OF REAL ESTATE SOLD 40-55% of real estate sales OPERATIONAL EXCELLENCE $40-50 million in Timberlands IMPROVEMENTS $40-50 million in Wood P
Slide 18: Earnings Summary
EARNINGS SUMMARY Chart 16 $ Millions 2017 2018 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Timberlands $ 242 $ 222 $ 220 $ 252 $ 268 $ 240 $ 206 $ 188 Real Estate, Energy & Natural Resources 43 37 74 87 41 47 86 90 Wood Products 207 274 278 258 286 385 250 66 Unallocated Items (38) (27) (3) (
Slide 19: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 17 $ Millions EXCEPT EPS 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Diluted EPS Before Special Items $ 0.22 $ 0.28 $ 0.34 $ 0.31 $ 0.36 $ 0.44 $ 0.28 $ 0.10 Special Items: Plum Creek merger and integration-related costs (0.01) — — (0.02) — — — — Restructuring, impairme
Slide 20: Adjusted EBITDA Reconciliation by Segment
ADJUSTED EBITDA RECONCILIATION Chart 18 BY SEGMENT $ Millions 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Timberlands $ 242 $ 222 $ 220 $ 252 $ 268 $ 240 $ 206 $ 188 Real Estate & ENR 43 37 74 87 41 47 86 90 Wood Products 207 274 278 258 286 385 250 66 Unallocated Items (38) (27) (3) (46) (51) (35) (37) 2 Adj
Slide 21: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION: Chart 19 TIMBERLANDS $ Millions 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 West $ 133 $ 124 $ 111 $ 140 $ 165 $ 152 $ 121 $ 94 South 96 91 95 101 98 84 80 89 North 8 2 4 9 6 3 4 6 Other 5 5 10 2 (1) 1 1 (1) Total Timberlands Adjusted EBITDA1 $ 242 $ 222 $ 220 $ 252 $ 268 $ 240
Slide 22: Adjusted EBITDA Reconciliation: Real Estate, Energy and Natural Resources
ADJUSTED EBITDA RECONCILIATION: REAL Chart 20 ESTATE, ENERGY AND NATURAL RESOURCES $ Millions 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Real Estate $ 29 $ 20 $ 58 $ 71 $ 27 $ 30 $ 68 $ 71 Energy & Natural Resources 14 17 16 16 14 17 18 19 Total Real Estate & ENR Adjusted EBITDA1 $ 43 $ 37 $ 74 $ 87 $ 41 $ 4
Slide 23: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION: Chart 21 WOOD PRODUCTS $ Millions 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Lumber1 $ 99 $ 127 $ 117 $ 116 $ 140 $ 195 $ 118 $ 6 OSB 66 87 102 104 92 129 77 31 EWP 37 52 50 34 45 58 48 26 Distribution 8 13 12 5 15 12 3 2 Other (3) (5) (3) (1) (6) (9) 4 1 Total Wood Products A
Slide 24: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION: Chart 22 UNALLOCATED $ Millions 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Total Unallocated Adjusted EBITDA1 $ (38) $ (27) $ (3) $ (46) $ (51) $ (35) $ (37) $ 2 Total depletion, depreciation, & amortization (1) (2) (2) — (1) (1) (1) (1) Unallocated pension service costs (2) —
Slide 25: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA Chart 23 RECONCILIATION $ MILLIONS 2018 2018 Q3 Q4 Net Debt to Adjusted EBITDA (LTM)1,2 2.5 3.0 Total Debt3 $ 5,921 $ 6,344 Less: Cash and Cash Equivalents 348 334 Net Debt $ 5,573 $ 6,010 Adjusted EBITDA (LTM) $ 2,237 $ 2,032 Depletion, depreciation & amortization (488)