Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q1 2014 Earnings Presentation
26 slides from Weyerhaeuser's earnings presentation, Apr 25, 2014
Slide 1: Earnings Results: 1st Quarter 2014
WEYERHAEUSER EARNINGS RESULTS: 1st Quarter 2014 April 25, 2014 1 | 04/25/2014
Slide 2: Forward-Looking Statement
FORWARD-LOOKING STATEMENT 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 various assumptions and may not be acc
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: 2014 Q1 Consolidated Results
Chart 1 2014 Q1 CONSOLIDATED RESULTS $ Millions 2013 2014 $ Millions EXCEPT EPS 2013 2014 Contribution to Earnings Q4 Q1 Change Consolidated Statement of Operations Q4 Q1 Before Special Items Before Special Items Timberlands $134 $164 $30 Net sales $2,256 $1,984 Wood Products 58 64 6 Cost of product
Slide 5: Earnings Before Special Items
Chart 2 EARNINGS BEFORE SPECIAL ITEMS $ Millions EXCEPT EPS 2013 Q4 2014 Q1 Pre-Tax After-Tax Diluted Pre-Tax After-Tax Diluted Earnings1 Earnings EPS Earnings1 Earnings EPS Earnings Before Special Items $212 $157 $0.27 $201 $153 $0.26 Special Items: Gain on postretirement plan amendment -- -- -- 45
Slide 6: Timberlands Segment
Chart 3 TIMBERLANDS SEGMENT 1st Quarter Notes TIMBERLANDS ($ Millions) 2013 2014 Segment Statement of Operations Q4 Q1 • Higher export and domestic log prices Third party sales2 $359 $371 • Increased Western fee harvest Intersegment sales2 139 143 • Lower unit logging costs and Total sales 498 514 i
Slide 7: Sales Volumes and Realizations
Chart 4 SALES VOLUMES AND REALIZATIONS 3rd-Party Log Sales and Realizations - West1 3rd-Party Log Sales and Realizations - South $115 $114 3,000 $105 $105 $105 $120 2,500 $44 $45 $50 $43 $43 $43 Volumes (Thousands of m3) 2,500 $100 Volumes (Thousands of m3) 2,185 2,246 2,000 $40 Realizations ($/m3)
Slide 8: Western/Southern Timberlands
Chart 5 WESTERN/SOUTHERN TIMBERLANDS Intersegment Log Sales Volume1 Fee Harvest Volume2 2,000 3,500 1,619 1,596 1,612 1,574 2,928 3,007 1,487 2,833 2,828 2,866 3,000 (Thousands of m3) (Thousands of m3) 1,500 2,500 2,875 2,686 1,000 712 664 686 592 563 2,000 2,305 500 1,995 1,921 1,500 0 1,000 Q1 Q2
Slide 9: Wood Products Segment
Chart 6 WOOD PRODUCTS SEGMENT WOOD PRODUCTS ($ Millions) 2013 2014 WOOD PRODUCTS ($ Millions) 2013 2014 EBITDA by Business Q4 Q1 Segment Statement of Operations Q4 Q1 Lumber $59 $76 Third party sales $926 $898 OSB 24 14 Intersegment sales 16 19 Engineered Wood Products 11 8 Total sales 942 917 Distr
Slide 10: 3rd-Party Sales Volumes and Realizations
Chart 7 3RD-PARTY SALES VOLUMES AND REALIZATIONS1 Lumber OSB 2,000 $440 $500 1,600 $359 $400 $434 $432 $332 $404 $413 Volumes (Millions of Board Ft.) Volumes (Millions of Square Ft.) Realizations ($/M 3/8”) Realizations ($/MBF) 1,600 $400 1,200 $246 $300 $237 1,156 1,189 $230 1,200 1,025 1,066 $300
Slide 11: Cellulose Fibers Segment
Chart 8 CELLULOSE FIBERS SEGMENT 1st Quarter Notes CELLULOSE FIBERS ($ Millions) 2013 2014 Segment Statement of Operations Q4 Q1 • Strong operating performance despite harsh winter weather Total sales $478 $461 • Improved pulp price realizations Cost of products sold 397 390 • Lower sales volumes du
Slide 12: Cellulose Fibers Segment
Chart 9 CELLULOSE FIBERS SEGMENT 3rd-Party Sales Volumes and 3rd-Party Sales Volumes and Realizations – Pulp Realizations – Liquid Packaging 600 $1,000 600 $1,200 Volumes (Thousands of tons) Volumes (Thousands of ADMT) 500 $1,150 Realizations ($/ADMT) Realizations ($/ADMT) 550 $900 $818 $825 400 $1,
Slide 13: Real Estate Segment
Chart 10 REAL ESTATE SEGMENT 1st Quarter Notes REAL ESTATE ($ Millions) 2013 2014 Segment Statement of Operations Q4 Q1 • Seasonally fewer closings Total sales $488 $248 • Higher average closing prices • Lower margins, primarily due Cost of products sold 371 196 to mix Gross margin 117 52 • Lower se
Slide 14: Single-Family Homebuilding
Chart 11 SINGLE-FAMILY HOMEBUILDING Average Closing Price and Home Closings and Cancellation Rate Single-Family Gross Margin 1,600 24% 35% $500 21% $476 Homes Closed (Units) Cancellation Rate (%) $442 Price ($ Thousands) 1,200 15% 18% 30% $450 1,072 Gross Margin (%) 15% 16% 12% $405 768 $394 $397 80
Slide 15: Land and Lots
Chart 12 LAND AND LOTS Earnings from Sale of Land and Lots Controlled Lots as of March 31, 20141 20 20 16.5 16 16 Controlled Lots (Thousands) Earnings ($ Million) 12 12 $9 8 $7 8 4 4 3.1 2.5 $2 $2 2.0 1.9 1.4 $0 0 0 Q1 Q2 Q3 Q4 Q1 AZ CA MD NV TX WA and VA 2013 2014 1. Lots are controlled through bot
Slide 16: Unallocated Items
Chart 13 UNALLOCATED ITEMS1 UNALLOCATED ITEMS ($ Millions) 2013 2014 UNALLOCATED ITEMS ($ Millions) 2013 2014 Q4 Q1 By Natural Expense Q4 Q1 Unallocated corporate function expenses ($7) ($2) (Cost of) credit to products sold3 $3 ($6) Unallocated share-based compensation (5) 3 G&A expenses4 (26) 1 Un
Slide 17: Outlook: 2014 Q2
Chart 14 OUTLOOK: 2014 Q2 SEGMENT COMMENTS TIMBERLANDS • Increased Chinese and domestic demand for Western logs, and lower realizations • Slightly higher Southern fee harvest volumes and realizations • Seasonally higher unit logging and transportation expenses in the West • Increased silviculture ex
Slide 18: Financial Items
Chart 15 FINANCIAL ITEMS Cash from Operations KEY FINANCIAL METRICS 2013 2014 Q4 Q1 $374 ($ Millions) 400 $343 $348 Ending Cash Balance $835 $780 300 ($ Millions) Long-Term Debt $4,891 $4,891 200 $109 Gross Debt to Adjusted EBITDA 2.9 2.9 100 (LTM)1 0 Net Debt to Enterprise Value2 18% 19% ($61) (100
Slide 19: Appendix
APPENDIX 19 | 04/25/2014
Slide 20: Pension and Postretirement Expense
PENSION AND POSTRETIREMENT Chart 16 EXPENSE $ MILLIONS 2013 2014 Net Pension and Postretirement Costs1 Q1 Q2 Q3 Q4 Q1 Timberlands $2 $3 $2 $3 $3 Wood Products 7 6 8 7 5 Cellulose Fibers 4 5 5 4 2 Real Estate 1 2 1 1 1 Unallocated Items 10 10 11 9 (10) Total Company Pension and Postretirement Costs $
Slide 21: Earnings Summary
Chart 17 EARNINGS SUMMARY $ Millions EXCEPT EPS 2013 2014 Contribution to Earnings Before Special Items Q1 Q2 Q3 Q4 Q1 Timberlands $104 $114 $118 $134 $164 Wood Products 178 136 79 58 64 Cellulose Fibers 31 57 47 65 54 Real Estate -- 14 33 71 12 Unallocated Items (46) -- 21 (28) (10) Total Contribut
Slide 22: Earnings Per Share Reconciliation
Chart 18 EARNINGS PER SHARE RECONCILIATION $ Millions EXCEPT EPS 2013 2014 Q1 Q2 Q3 Q4 Q1 Weighted Average Shares Outstanding, Diluted1 551 558 587 589 589 Diluted EPS Before Special Items $0.26 $0.35 $0.27 $0.27 $0.26 Special Items: Gain on postretirement plan amendment -- -- -- -- 0.05 Gain on sal
Slide 23: EBITDA Reconciliation by Segment
Chart 19 EBITDA RECONCILIATION BY SEGMENT $ MILLIONS 2013 Q4 2014 Q1 Wood Cellulose Real Unallocated Wood Cellulose Real Unallocated Timberlands Products Fibers Estate Items Total Timberlands Products Fibers Estate Items Total Adjusted EBITDA Excluding $184 $88 $101 $83 ($23) $433 $216 $93 $92 $19 (
Slide 24: EBITDA Reconciliation – Timberlands
Chart 20 EBITDA RECONCILIATION – TIMBERLANDS $ MILLIONS 2013 Q4 2014 Q1 Longview Longview Legacy Timber Legacy Timber Timberlands acquisition Total Timberlands acquisition Total Adjusted EBITDA Excluding Special Items1 $149 $35 $184 $163 $53 $216 Depletion, depreciation & amortization (36) (15) (51)
Slide 25: EBITDA Reconciliation – Wood Products
Chart 21 EBITDA RECONCILIATION – WOOD PRODUCTS $ Millions 2013 Q4 2014 Q1 Distributio Lumber OSB EWP n Other Total Lumber OSB EWP Distribution Other Total Adjusted EBITDA $59 $24 $11 ($6) -- $88 $76 $14 $8 ($5) -- $93 Excluding Special Items1 Depletion, depreciation (10) (8) (11) (1) -- (30) (10) (8
Slide 26: Gross Debt to EBITDA Reconciliation
Chart 22 GROSS DEBT TO EBITDA RECONCILIATION $ MILLIONS 2013 2014 Q4 Q1 Gross Debt to Adjusted EBITDA (LTM)1, 2 2.9 2.9 Long-Term Debt $4,891 $4,891 Adjusted EBITDA Excluding Special Items (LTM)1 $1,683 $1,692 Depletion, depreciation & amortization (472) (486) Non-operating pension & postretirement