Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q3 2016 Earnings Presentation
26 slides from Weyerhaeuser's earnings presentation, Oct 28, 2016
Slide 1: Earnings Results 3rd Quarter 2016
WEYERHAEUSER EARNINGS RESULTS | 3rd Quarter 2016 | October 28, 2016
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS 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 va
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 Q3 Consolidated Results
2016 Q3 CONSOLIDATED RESULTS Chart 1 $ Millions 2016 2016 $ Millions EXCEPT EPS 2016 2016 Adjusted EBITDA Q2 Q3 Change Consolidated Statement of Operations Before Q2 Q3 Special Items Timberlands $ 220 $ 223 $ 3 Net sales $ 1,655 $ 1,709 Real Estate, Energy & Natural Resources 28 37 9 Cost of product
Slide 5: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS Chart 2 $ Millions EXCEPT EPS 2016 Q2 2016 Q3 Pre-Tax After-Tax Diluted Pre-Tax After-Tax Diluted Earnings1 Earnings EPS Earnings1 Earnings EPS Earnings From Continuing Operations Before Special Items $ 180 $ 130 $ 0.17 $ 198 $ 172 $ 0.23 Special Items: Plum Creek merge
Slide 6: Timberlands Segment
TIMBERLANDS SEGMENT1 Chart 3 TIMBERLANDS ($ Millions) 2016 2016 TIMBERLANDS ($ Millions) 2016 2016 Adjusted EBITDA by Region Q2 Q3 Segment Statement of Operations Q2 Q3 West $ 114 $ 109 Third party sales $ 468 $ 478 South 99 108 Intersegment sales 154 149 North 4 7 Total Sales 622 627 Other 3 (1) Co
Slide 7: Sales Volumes and Realizations
SALES VOLUMES AND REALIZATIONS Chart 4 1 1 Volumes (Thousands of tons) Volumes (Thousands of tons) Volumes (Thousands of tons) 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 annu
Slide 8: Export Sales, Fee Harvest Volumes, and Intersegment Sales Volumes
EXPORT SALES, FEE HARVEST VOLUMES, Chart 5 AND INTERSEGMENT SALES VOLUMES 1 1,2 South West North 2016 Q3 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 9: Real Estate, Energy and Natural Resources (ENR) Segment
REAL ESTATE, ENERGY AND Chart 6 NATURAL RESOURCES (ENR) SEGMENT1 Real Estate & ENR ($ Millions) 2016 2016 Real Estate & ENR ($ Millions) 2016 2016 Adjusted EBITDA by Business Q2 Q3 Segment Statement of Operations Q2 Q3 Real Estate $ 17 $ 24 Total sales $ 38 $ 48 Energy & Natural Resources 11 13 Cost
Slide 10: Real Estate, Energy and Natural Resources (ENR) Segment Adjusted EBITDA
REAL ESTATE, ENERGY AND Chart 7 NATURAL RESOURCES (ENR) SEGMENT 1 Adjusted EBITDA (in millions) Real Estate $27 $6 $15 $25 $26 $17 $24 ENR $6 $5 $6 $8 $8 $11 $13 1. Our definition of Adjusted EBITDA and a reconciliation to GAAP are set forth on Chart 20. 10 10/28/2016
Slide 11: Wood Products Segment
WOOD PRODUCTS SEGMENT Chart 8 WOOD PRODUCTS ($ Millions) 2016 2016 WOOD PRODUCTS ($ Millions) 2016 2016 Adjusted EBITDA by Business Q2 Q3 Segment Statement of Operations Q2 Q3 Lumber $ 96 $ 85 Third party sales $ 1,146 $ 1,177 OSB 43 63 Intersegment sales 22 17 Engineered Wood Products 45 43 Total s
Slide 12: 3rd-Party Sales Volumes and Realizations
3RD-PARTY SALES VOLUMES AND REALIZATIONS1 Chart 9 1. Sales volumes include sales of internally produced products and products purchased for resale primarily through our Distribution business. 12 10/28/2016
Slide 13: Unallocated Items
UNALLOCATED ITEMS Chart 10 UNALLOCATED ITEMS ($ Millions)1 2016 2016 UNALLOCATED ITEMS ($ Millions) 2016 2016 Q2 Q3 By Natural Expense Q2 Q3 Unallocated corporate function expenses2 $ (24) $ (21) Credit to products sold3 $ 11 $ 14 Unallocated share-based compensation 1 (4) G&A expenses4 (25) (25) Un
Slide 14: Discontinued Operations
DISCONTINUED OPERATIONS Chart 11 Discontinued operations include the company’s Cellulose Fibers segment, which consists of pulp mills, a liquid packaging board facility, and a printing papers joint venture. The sale of the liquid packaging board business closed on August 31, 2016. These results corr
Slide 15: Financial Items
FINANCIAL ITEMS Chart 12 Includes discontinued operations KEY FINANCIAL METRICS 2016 2016 ($ Millions) Q2 Q3 Ending Cash Balance1 $ 485 $ 769 Long-Term Debt1 $ 8,013 $ 8,310 Gross Debt to Adjusted EBITDA (LTM)2 6.5 5.8 Net Debt to Enterprise Value3 26% 24% 2014: $1,088 million 2015: $1,074 million 2
Slide 16: Shares Outstanding
SHARES OUTSTANDING Chart 13 • $2.5 billion share repurchase program effective February 19, 2016 • Repurchased $306 million of common shares in the third quarter • Cumulative repurchases of $2 billion through September 30, 2016, or 80% of authorization, at an average price of $29.49 per share COMMON
Slide 17: Outlook: 2016 Q4
OUTLOOK: 2016 Q4 Chart 14 SEGMENT COMMENTS TIMBERLANDS ● In the West, slightly higher realizations for domestic and export logs offset by lower fee harvest volumes ● Increased fee harvest volumes and seasonally lower silviculture expense in the South ● Expect 2016 Q4 earnings and Adjusted EBITDA to
Slide 18: Appendix
APPENDIX APPENDIX 18 10/28/2016
Slide 19: Pension and Postretirement Expense
PENSION AND POSTRETIREMENT EXPENSE Chart 15 $ Millions 2015 2016 Net Pension and Postretirement Cost (Credit) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Timberlands $ 3 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 Real Estate, Energy & Natural Resources — — — — — — — Wood Products 7 7 6 7 5 6 6 Pension and postretirement credits not allocate
Slide 20: Earnings Summary
EARNINGS SUMMARY Chart 16 $ Millions 2015 2016 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Q2 Q3 Timberlands $ 192 $ 168 $ 158 $ 160 $ 199 $ 220 $ 223 Real Estate, Energy & Natural Resources 33 11 21 33 34 28 37 Wood Products 88 98 111 75 117 189 203 Unallocated Items (59) 1 (45) (20) (14) (24) (29) T
Slide 21: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 17 $ Millions EXCEPT EPS 2015 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Weighted Average Shares Outstanding, Diluted 527 520 517 514 635 748 754 Diluted EPS from Continuing Operations Before Special Items $ 0.13 $ 0.22 $ 0.23 $ 0.16 $ 0.20 $ 0.17 $ 0.23 Special Items: Gain on
Slide 22: EBITDA Reconciliation by Segment
EBITDA RECONCILIATION BY SEGMENT Chart 18 $ MILLIONS 2016 Q2 2016 Q3 Real Real Estate & Wood Unallocated Estate & Wood Unallocated Timberlands ENR Products Items Total Timberlands ENR Products Items Total Adjusted EBITDA1 $ 220 $ 28 $ 189 $ (24) $ 413 $ 223 $ 37 $ 203 $ (29) $ 434 Depletion, depreci
Slide 23: EBITDA Reconciliation - Timberlands
EBITDA RECONCILIATION - TIMBERLANDS Chart 19 $ MILLIONS 2016 Q2 2016 Q3 West South North Other Total West South North Other Total Adjusted EBITDA1 $ 114 $ 99 $ 4 $ 3 $ 220 $ 109 $ 108 $ 7 $ (1) $ 223 Depreciation, depletion & amortization (33) (47) (4) (11) (95) (31) (55) (7) (8) (101) Special items
Slide 24: EBITDA Reconciliation - Real Estate, Energy and Natural Resources
EBITDA RECONCILIATION - REAL ESTATE, Chart 20 ENERGY AND NATURAL RESOURCES $ Millions 2016 Q2 2016 Q3 Energy & Energy & Natural Natural Real Estate Resources Total Real Estate Resources Total Adjusted EBITDA1 $ 17 $ 11 $ 28 $ 24 $ 13 $ 37 Depletion, depreciation & amortization 1 (4) (3) — (4) (4) Ba
Slide 25: EBITDA Reconciliation - Wood Products
EBITDA RECONCILIATION - WOOD PRODUCTS Chart 21 $ Millions 2016 Q2 2016 Q3 Lumber OSB EWP Distribution Other Total Lumber OSB EWP Distribution Other Total Adjusted EBITDA1,2 $ 96 $ 43 $ 45 $ 9 $ (4) $ 189 $ 85 $ 63 $ 43 $ 7 $ 5 $ 203 Depletion, depreciation & amortization (13) (8) (11) (1) — (33) (14
Slide 26: Gross Debt to EBITDA Reconciliation
GROSS DEBT TO EBITDA RECONCILIATION Chart 22 $ MILLIONS 2016 2016 Q2 Q3 Gross Debt to Adjusted EBITDA (LTM)1,2 6.5 5.8 Long-Term Debt $ 8,013 $ 8,310 Adjusted EBITDA (LTM)2 $ 1,242 $ 1,431 Depletion, depreciation & amortization (398) (457) Basis of real estate sold (37) (54) Non-operating pension &