Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q4 2016 Earnings Presentation
29 slides from Weyerhaeuser's earnings presentation, Feb 3, 2017
Slide 1: Earnings Results 4th Quarter 2016
WEYERHAEUSER EARNINGS RESULTS | 4th Quarter 2016 | February 3, 2017
Slide 2: Forward-Looking Statement
FORWARD-LOOKING STATEMENT This slide 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 var
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: 2016 Consolidated Results
2016 CONSOLIDATED RESULTS Chart 1 $ Millions 2015 2016 $ Millions EXCEPT EPS 2015 2016 Adjusted EBITDA Change Consolidated Statement of Operations Before Special Items Timberlands $ 678 $ 865 $ 187 Net sales $ 5,246 $ 6,365 Real Estate, Energy & Natural Resources 98 189 91 Cost of products sold 4,12
Slide 5: 2016 Q4 Consolidated Results
2016 Q4 CONSOLIDATED RESULTS Chart 2 $ Millions 2016 2016 $ Millions EXCEPT EPS 2016 2016 Adjusted EBITDA Q3 Q4 Change Consolidated Statement of Operations Before Q3 Q4 Special Items Timberlands $ 223 $ 223 $ — Net sales $ 1,709 $ 1,596 Real Estate, Energy & Natural Resources 37 90 53 Cost of produc
Slide 6: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS Chart 3 $ Millions EXCEPT EPS 2016 Q3 2016 Q4 Pre-Tax After-Tax Diluted Pre-Tax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings From Continuing Operations Before Special Items $ 198 $ 172 $ 0.23 $ 115 $ 106 $ 0.14 Special Items: Plum Creek merger-
Slide 7: Timberlands Segment
TIMBERLANDS SEGMENT1 Chart 4 TIMBERLANDS ($ Millions) 2016 2016 TIMBERLANDS ($ Millions) 2016 2016 Adjusted EBITDA by Region Q3 Q4 Segment Statement of Operations Q3 Q4 West $ 109 $ 101 Third party sales $ 478 $ 455 South 108 112 Intersegment sales 149 144 North 7 7 Total Sales 627 599 Other (1) 3 C
Slide 8: Sales Volumes and Realizations
SALES VOLUMES AND REALIZATIONS Chart 5 1 1 1. Beginning in the first quarter of 2016, we report log sales and fee harvest volumes in tons. Prior period volumes have been converted from cubic meters to tons using annualized 2015 conversion factors. 1.056 m3 = 1 ton in the West and 0.818 m3 = 1 ton in
Slide 9: Export Sales, Fee Harvest Volumes, and Intersegment Sales Volumes
EXPORT SALES, FEE HARVEST VOLUMES, Chart 6 AND INTERSEGMENT SALES VOLUMES 1 1,2 South West North 2016 Q4 Japan China Korea 1. Beginning in the first quarter of 2016, we report log sales and fee harvest volumes in tons. Prior period volumes have been converted from cubic meters to tons using annualiz
Slide 10: Real Estate, Energy and Natural Resources (ENR) Segment
REAL ESTATE, ENERGY AND Chart 7 NATURAL RESOURCES (ENR) SEGMENT1 Real Estate & ENR ($ Millions) 2016 2016 Real Estate & ENR ($ Millions) 2016 2016 Adjusted EBITDA by Business Q3 Q4 Segment Statement of Operations Q3 Q4 Real Estate $ 24 $ 75 Third party sales $ 48 $ 101 Energy & Natural Resources 13
Slide 11: Real Estate, Energy and Natural Resources Segment Adjusted EBITDA
REAL ESTATE, ENERGY AND Chart 8 NATURAL RESOURCES (ENR) SEGMENT 1 Adjusted EBITDA (in millions) Real Estate $27 $6 $15 $25 $26 $17 $24 $75 ENR $6 $5 $6 $8 $8 $11 $13 $15 1. Our definition of Adjusted EBITDA and a reconciliation to GAAP are set forth on Chart 23. 11 2/3/2017
Slide 12: Wood Products Segment
WOOD PRODUCTS SEGMENT Chart 9 WOOD PRODUCTS ($ Millions) 2016 2016 WOOD PRODUCTS ($ Millions) 2016 2016 Adjusted EBITDA by Business Q3 Q4 Segment Statement of Operations Q3 Q4 Lumber $ 85 $ 57 Third party sales $ 1,177 $ 1,032 OSB 63 46 Intersegment sales 17 7 Engineered Wood Products 43 26 Total sa
Slide 13: 3rd-Party Sales Volumes and Realizations
3RD-PARTY SALES VOLUMES AND REALIZATIONS1 Chart 10 1. Sales volumes include sales of internally produced products and products purchased for resale primarily through our Distribution business. 13 2/3/2017
Slide 14: Unallocated Items
UNALLOCATED ITEMS Chart 11 UNALLOCATED ITEMS ($ Millions)1 2016 2016 UNALLOCATED ITEMS ($ Millions) 2016 2016 Q3 Q4 By Natural Expense Q3 Q4 Unallocated corporate function expenses2 $ (21) $ (25) Credit to products sold3 $ 14 $ 1 Unallocated share-based compensation (4) 2 G&A expenses4 (25) (24) Una
Slide 15: Discontinued Operations
DISCONTINUED OPERATIONS Chart 12 Discontinued operations include the company’s former Cellulose Fibers segment, which consisted of several pulp mills, a liquid packaging board facility, and a printing papers joint venture. Sales of the Cellulose Fibers pulp mills and printing papers business closed
Slide 16: Operational Excellence
OPERATIONAL EXCELLENCE Chart 13 16 2/3/2017
Slide 17: Financial Items
FINANCIAL ITEMS Chart 14 KEY FINANCIAL METRICS 2016 2016 ($ Millions) Q3 Q4 Includes discontinued operations Ending Cash Balance1 $ 769 $ 676 Long-Term Debt1 $ 8,310 $ 6,610 Gross Debt to Adjusted EBITDA (LTM)2 5.8 4.2 Net Debt to Enterprise Value3 24% 21% Excluding $494 million of cash paid for inc
Slide 18: Shares Outstanding
SHARES OUTSTANDING Chart 15 • $2.5 billion share repurchase program effective February 19, 2016 • Cumulative repurchases of $2 billion through December 31, 2016, or 80% of authorization, at an average price of $29.49 per share COMMON SHARES OUTSTANDING (millions) 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Slide 19: Outlook: 2017 Q1
OUTLOOK: 2017 Q1 Chart 16 SEGMENT COMMENTS TIMBERLANDS • Modestly higher log sales volumes in West • Improved average Western sales realizations due to higher export mix • Lower Southern fee harvest volumes and comparable average sales realizations • Seasonally higher Southern forestry and silvicult
Slide 20: Appendix
APPENDIX APPENDIX 20 2/3/2017
Slide 21: Pension and Postretirement Expense
PENSION AND POSTRETIREMENT EXPENSE Chart 17 $ Millions 2015 2016 Net Pension and Postretirement Cost (Credit) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Timberlands $ 3 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 Real Estate, Energy & Natural Resources — — — — — — — — Wood Products 7 7 6 7 5 6 6 5 Pension and postretirement credits n
Slide 22: Earnings Summary
EARNINGS SUMMARY Chart 18 $ Millions 2015 2016 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Timberlands $ 192 $ 168 $ 158 $ 160 $ 199 $ 220 $ 223 $ 223 Real Estate, Energy & Natural Resources 33 11 21 33 34 28 37 90 Wood Products 88 98 111 75 117 189 203 132 Unallocated Items (59) 1 (45) (20)
Slide 23: Earnings per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 19 $ Millions EXCEPT EPS 2015 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Weighted Average Shares Outstanding, Diluted 527 520 517 514 635 748 754 753 Diluted EPS from Continuing Operations Before Special Items $ 0.13 $ 0.22 $ 0.23 $ 0.16 $ 0.20 $ 0.17 $ 0.23 $ 0.14 Special
Slide 24: EBITDA Reconciliation by Segment
EBITDA RECONCILIATION BY SEGMENT Chart 20 $ MILLIONS 2015 2016 Real Real Estate & Wood Unallocated Estate & Wood Unallocated Timberlands ENR Products Items Total Timberlands ENR Products Items Total Adjusted EBITDA1 $ 678 $ 98 $ 372 $ (123) $ 1,025 $ 865 $ 189 $ 641 $ (112) $ 1,583 Depletion, deprec
Slide 25: EBITDA Reconciliation by Segment
EBITDA RECONCILIATION BY SEGMENT Chart 21 $ MILLIONS 2016 Q3 2016 Q4 Real Real Estate & Wood Unallocated Estate & Wood Unallocated Timberlands ENR Products Items Total Timberlands ENR Products Items Total Adjusted EBITDA1 $ 223 $ 37 $ 203 $ (29) $ 434 $ 223 $ 90 $ 132 $ (45) $ 400 Depletion, depreci
Slide 26: EBITDA Reconciliation - Timberlands
EBITDA RECONCILIATION - TIMBERLANDS Chart 22 $ MILLIONS 2016 Q3 2016 Q4 West South North Other Total West South North Other Total Adjusted EBITDA1 $ 109 $ 108 $ 7 $ (1) $ 223 $ 101 $ 112 $ 7 $ 3 $ 223 Depreciation, depletion & amortization (31) (55) (7) (8) (101) (28) (52) (5) (15) (100) Special ite
Slide 27: EBITDA Reconciliation - Real Estate, Energy and Natural Resources
EBITDA RECONCILIATION - REAL ESTATE, Chart 23 ENERGY AND NATURAL RESOURCES $ Millions 2016 Q3 2016 Q4 Energy & Energy & Natural Natural Real Estate Resources Total Real Estate Resources Total Adjusted EBITDA1 $ 24 $ 13 $ 37 $ 75 $ 15 $ 90 Depletion, depreciation & amortization — (4) (4) — (4) (4) Ba
Slide 28: EBITDA Reconciliation - Wood Products
EBITDA RECONCILIATION - WOOD PRODUCTS Chart 24 $ Millions 2016 Q3 2016 Q4 Lumber OSB EWP Distribution Other Total Lumber OSB EWP Distribution Other Total Adjusted EBITDA1,2 $ 85 $ 63 $ 43 $ 7 $ 5 $ 203 $ 57 $ 46 $ 26 $ 5 $ (2) $ 132 Depletion, depreciation & amortization (14) (7) (12) — — (33) (14)
Slide 29: Gross Debt to EBITDA Reconciliation
GROSS DEBT TO EBITDA RECONCILIATION Chart 25 $ MILLIONS 2016 2016 Q3 Q4 Gross Debt to Adjusted EBITDA (LTM)1,2 5.8 4.2 Long-Term Debt $ 8,310 $ 6,610 Adjusted EBITDA (LTM)2 $ 1,431 $ 1,583 Depletion, depreciation & amortization (457) (512) Basis of real estate sold (54) (109) Non-operating pension &