Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q2 2015 Earnings Presentation
24 slides from Weyerhaeuser's earnings presentation, Jul 31, 2015
Slide 1: Earnings Results | 2nd Quarter 2015
EARNINGS RESULTS | 2nd Quarter 2015 July 31, 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 Q2 Consolidated Results
2015 Q2 CONSOLIDATED RESULTS Chart 1 $ Millions 2015 2015 $ Millions EXCEPT EPS 2015 2015 Contribution to Earnings Q1 Q2 Change Consolidated Statement of Operations Q1 Q2 Before Special Items Before Special Items Timberlands $ 162 $ 127 $ (35) Net sales $ 1,721 $ 1,807 Wood Products 62 71 9 Cost of
Slide 5: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS Chart 2 $ Millions EXCEPT EPS 2015 Q1 2015 Q2 Pre-Tax After-Tax Diluted Pre-Tax After-Tax Diluted Earnings6 Earnings EPS Earnings6 Earnings EPS Earnings Before Special Items $ 133 $ 99 $ 0.19 $ 157 $ 133 $ 0.26 Special Items: Gain on postretirement plan amendment — — —
Slide 6: Timberlands Segment
TIMBERLANDS SEGMENT Chart 3 TIMBERLANDS ($ Millions)8 2015 2015 2nd Quarter Notes Segment Statement of Operations Q1 Q2 • Lower domestic and export log sales Third party sales $ 342 $ 334 realizations and higher sales Intersegment sales 150 138 volumes in the West Total Sales 492 472 Cost of product
Slide 7: Sales Volumes and Realizations
SALES VOLUMES AND REALIZATIONS Chart 4 13 13 2015 Q2 13. Export log revenues are net of freight expense, rebates and claims. 7 07/31/2015
Slide 8: Western/Southern Timberlands
WESTERN/SOUTHERN TIMBERLANDS Chart 5 South West $24 $19 $17 $4 $3 $5 HBU Sales, including Non- Strategic Timberlands $2 $4 $18 $3 $3 $3 Like Kind Exchange (IRC Section 1031) $2 $20 $1 $— $14 $2 8 07/31/2015
Slide 9: Wood Products Segment
WOOD PRODUCTS SEGMENT Chart 6 WOOD PRODUCTS ($ Millions) 2015 2015 WOOD PRODUCTS ($ Millions) 2015 2015 EBITDA by Business Q1 Q2 Segment Statement of Operations Q1 Q2 Lumber $ 65 $ 59 Third party sales $ 923 $ 1,004 OSB 4 — Intersegment sales 19 22 Engineered Wood Products 26 38 Total sales 942 1,02
Slide 10: 3rd-Party Sales Volumes and Realizations
3RD-PARTY SALES VOLUMES AND REALIZATIONS18 Chart 7 18. Sales volumes include sales of internally produced products and products purchased for resale primarily through our distribution business. 10 07/31/2015
Slide 11: Cellulose Fibers Segment
CELLULOSE FIBERS SEGMENT Chart 8 CELLULOSE FIBERS ($ Millions) 2015 2015 2nd Quarter Notes Segment Statement of Operations Q1 Q2 • Higher maintenance costs due to a Total Sales $ 447 $ 467 planned extended pulp mill outage Cost of products sold 394 417 Gross margin 53 50 • Lower average pulp sales S
Slide 12: Cellulose Fibers Segment
CELLULOSE FIBERS SEGMENT Chart 9 23 24 Pulp (ADMT) Liquid Packaging (metric tons)23 23. Beginning in first quarter 2015, liquid packaging volumes are reported in thousands of metric tons for all periods. 12 07/31/2015 24. Includes expenses for annual maintenance outages and other maintenance costs.
Slide 13: Unallocated Items
UNALLOCATED ITEMS Chart 10 UNALLOCATED ITEMS ($ Millions)25 2015 2015 UNALLOCATED ITEMS ($ Millions) 2015 2015 Q1 Q2 By Natural Expense Q1 Q2 Unallocated corporate function expenses $ (9) $ (7) Cost (credit) to products sold26 $ (6) $ 20 Unallocated share-based compensation 3 1 G&A expenses27 (9) (8
Slide 14: Financial Items
FINANCIAL ITEMS Chart 11 KEY FINANCIAL METRICS 2015 2015 including discontinued operations ($ Millions) Q1 Q2 Ending Cash Balance $ 1,158 $ 1,121 Long-Term Debt $ 4,891 $ 4,891 Gross Debt to Adjusted EBITDA (LTM)28 3.1 3.3 Net Debt to Enterprise Value29 18% 19% 2014: $1,088 million 2015 YTD: $443 mi
Slide 15: Share Repurchase
SHARE REPURCHASE Chart 12 • $700 million repurchase program announced August 2014 • Completed 87 percent of total authorization through second quarter 2015 SHARE REPURCHASES (millions) 2014 2015 Cumulative Q3 Q4 Q1 Q2 Total Common shares repurchased 3.9 2.2 7.3 4.8 18.2 Total repurchase of common st
Slide 16: Outlook: 2015 Q3
OUTLOOK: 2015 Q3 Chart 13 SEGMENT COMMENTS TIMBERLANDS ● Higher log sales realizations and lower fee harvest volumes in the West ● Seasonally higher fee harvest volumes and silviculture costs in the South ● Expect 2015 Q3 earnings to be slightly lower than 2015 Q2 WOOD ● Improved average sales reali
Slide 17: Appendix
APPENDIX APPENDIX 17 07/31/2015
Slide 18: Pension and Postretirement Cost
PENSION AND POSTRETIREMENT COST Chart 14 $ Millions 2014 2015 Net Pension and Postretirement Cost (Credit)30 Q1 Q2 Q3 Q4 Q1 Q2 Timberlands $ 3 $ 3 $ 2 $ 2 $ 3 $ 2 Wood Products 5 6 6 7 7 7 Cellulose Fibers 2 3 3 3 3 5 Unallocated Items (10) (11) (12) (12) (3) (3) Total Company Pension and Postretire
Slide 19: Earnings Summary
EARNINGS SUMMARY Chart 15 $ Millions EXCEPT EPS 2014 2015 Contribution to Earnings Before Special Items Q1 Q2 Q3 Q4 Q1 Q2 Timberlands $ 164 $ 170 $ 136 $ 143 $ 162 $ 127 Wood Products 64 102 105 56 62 71 Cellulose Fibers 54 91 59 87 33 27 Unallocated Items (14) 9 10 (13) (41) 20 Total Contribution t
Slide 20: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 16 $ Millions EXCEPT EPS 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Weighted Average Shares Outstanding, Diluted35 589 590 536 529 527 520 Diluted EPS from Continuing Operations Before Special Items $ 0.24 $ 0.40 $ 0.33 $ 0.27 $ 0.19 $ 0.26 Discontinued Operations 0.02 0.04
Slide 21: EBITDA Reconciliation by Segment
EBITDA RECONCILIATION BY SEGMENT Chart 17 $ MILLIONS 2015 Q1 2015 Q2 Wood Cellulose Unallocated Wood Cellulose Unallocated Timberlands Products Fibers Items Total Timberlands Products Fibers Items Total Adjusted EBITDA36 $ 215 $ 88 $ 78 $ (48) $ 333 $ 178 $ 98 $ 72 $ 10 $ 358 Depreciation, depletion
Slide 22: EBITDA Reconciliation - Timberlands
EBITDA RECONCILIATION - TIMBERLANDS Chart 18 $ MILLIONS 2015 Q1 2015 Q2 West South Other Total West South Other Total Adjusted EBITDA36 $ 139 $ 72 $ 4 $ 215 $ 107 $ 68 $ 3 $ 178 Depreciation, depletion & amortization (29) (17) (7) (53) (28) (17) (6) (51) Special items — — — — — — — — Operating Incom
Slide 23: EBITDA Reconciliation - Wood Products
EBITDA RECONCILIATION - WOOD PRODUCTS Chart 19 $ Millions 2015 Q1 2015 Q2 Lumber OSB EWP Distribution Other Total Lumber OSB EWP Distribution Other Total Adjusted EBITDA36, 37 $ 65 $ 4 $ 26 $ (3) $ (4) $ 88 $ 59 $ — $ 38 $ 2 $ (1) $ 98 Depreciation, depletion & amortization (11) (7) (7) (1) — (26) (
Slide 24: Gross Debt to EBITDA Reconciliation
GROSS DEBT TO EBITDA RECONCILIATION Chart 20 $ MILLIONS 2015 2015 Q1 Q2 Gross Debt to Adjusted EBITDA (LTM)38, 39 3.1 3.3 Long-Term Debt $ 4,891 $ 4,891 Adjusted EBITDA (LTM)39 $ 1,595 $ 1,481 Depreciation, depletion & amortization (493) (489) Non-operating pension & postretirement costs 38 30 Speci