Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q2 2018 Earnings Presentation
23 slides from Weyerhaeuser's earnings presentation, Jul 27, 2018
Slide 1: Weyerhaeuser Earnings Results 2nd Quarter 2018
WEYERHAEUSER EARNINGS RESULTS 2ND QUARTER 2018 | July 27, 2018
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS 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, operatin
Slide 3: 2018 Q2 Consolidated Results
Chart 1 2018 Q2 CONSOLIDATED RESULTS $ Millions 2018 2018 $ Millions EXCEPT EPS 2018 2018 Adjusted EBITDA Q1 Q2 Change Consolidated Statement of Operations Before Q1 Q2 Special Items Timberlands $ 268 $ 240 $ (28) Net sales $ 1,865 $ 2,065 Real Estate, Energy & Natural Resources 41 47 6 Cost of prod
Slide 4: Earnings Before Special Items
Chart 2 EARNINGS BEFORE SPECIAL ITEMS $ Millions EXCEPT EPS 2018 Q1 2018 Q2 Pre-Tax After-Tax Diluted Pre-Tax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 307 $ 275 $ 0.36 $ 402 $ 332 $ 0.44 Special Items: Environmental remediation (charges) recoverie
Slide 5: Adjusted EBITDA
Chart 3 ADJUSTED EBITDA1 2 Adjusted EBITDA (millions) Adjusted EBITDA (millions) Real Estate $ 29 20 58 71 27 30 ENR $ 14 17 16 16 14 17 Adjusted EBITDA (millions) Adjusted EBITDA (millions) West $ 133 124 111 140 165 152 Lumber $ 99 127 117 116 140 195 South $ 96 91 95 101 98 84 OSB $ 66 87 102 104
Slide 6: Timberlands Segment
Chart 4 TIMBERLANDS SEGMENT TIMBERLANDS ($ Millions)1 2018 2018 TIMBERLANDS ($ Millions)1 2018 2018 Adjusted EBITDA by Region Q1 Q2 Segment Statement of Operations Q1 Q2 West $ 165 $ 152 Third party sales $ 490 $ 476 South 98 84 Intersegment sales 142 139 North 6 3 Total Sales 632 615 Other (1) 1 Co
Slide 7: Sales Volumes, Realizations and Export Sales
SALES VOLUMES, Chart 5 REALIZATIONS AND EXPORT SALES 1 Volumes (Thousands of tons) Volumes (Thousands of tons) Volumes (Thousands of tons) Japan 70% 65% 62% 68% 72% 68% 1. Western logs are primarily transacted in MBF but are converted to ton equivalents for external reporting purposes. China 24% 26%
Slide 8: Fee Harvest Volumes and Intersegment Sales Volumes
FEE HARVEST VOLUMES Chart 6 AND INTERSEGMENT SALES VOLUMES South West North 8 July 27, 2018
Slide 9: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & Chart 7 NATURAL RESOURCES (ENR) SEGMENT Real Estate & ENR ($ Millions) 2018 2018 Real Estate & ENR ($ Millions) 2018 2018 Adjusted EBITDA by Business Q1 Q2 Segment Statement of Operations Q1 Q2 Real Estate $ 27 $ 30 Total sales $ 51 $ 58 Energy & Natural Resources 14 17 Cost of
Slide 10: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & Chart 8 NATURAL RESOURCES (ENR) SEGMENT Price per acre 10 July 27, 2018
Slide 11: Wood Products Segment
WOOD PRODUCTS SEGMENT Chart 9 WOOD PRODUCTS ($ Millions) 2018 2018 WOOD PRODUCTS ($ Millions) 2018 2018 Adjusted EBITDA by Business Q1 Q2 Segment Statement of Operations Q1 Q2 Lumber $ 140 $ 195 Total sales $1,309 $ 1,525 OSB 92 129 Cost of products sold 1,005 1,119 Engineered Wood Products 45 58 Gr
Slide 12: 3rd-Party Sales Volumes and Realizations
3RD-PARTY SALES VOLUMES Chart 10 AND REALIZATIONS1 1. Sales volumes include sales of internally produced products and products purchased for resale primarily through our Distribution business. 12 July 27, 2018
Slide 13: Unallocated Items
UNALLOCATED ITEMS Chart 11 UNALLOCATED ITEMS ($ Millions)1 2018 2018 UNALLOCATED ITEMS ($ Millions) 2018 2018 Q1 Q2 By Natural Expense Q1 Q2 Unallocated corporate function expenses and variable compensation expense $ (18) $ (19) Cost of products sold2 (29) (4) Liability classified share-based compen
Slide 14: Financial Items
FINANCIAL ITEMS Chart 12 KEY FINANCIAL METRICS 2018 2018 ($ Millions) Q1 Q2 Ending Cash Balance $ 598 $ 901 Long-Term Debt $ 5,928 $ 5,924 Net Debt to Adjusted EBITDA (LTM)1 2.5 2.2 Net Debt to Enterprise Value2 17% 15% Scheduled Debt Maturities as of June 30, 2018 ($ Millions) 2018 2019 2020 2021 2
Slide 15: Outlook: 2018 Q3 vs. 2018 Q2
OUTLOOK: 2018 Q3 vs. 2018 Q2 Chart 13 SEGMENT COMMENTS TIMBERLANDS ● Slightly lower log sales realizations and comparable fee harvest volumes in the West ● Seasonally higher fee harvest volumes and comparable average log sales realizations in the South ● Seasonal increase in road and forestry costs
Slide 16: Earnings Summary
EARNINGS SUMMARY Chart 14 $ Millions EXCEPT EPS 2017 2018 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Q2 Timberlands $ 242 $ 222 $ 220 $ 252 $ 268 $ 240 Real Estate, Energy & Natural Resources 43 37 74 87 41 47 Wood Products 207 274 278 258 286 385 Unallocated Items (38) (27) (3) (46) (51) (35) Total
Slide 17: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 15 $ Millions EXCEPT EPS 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Diluted EPS Before Special Items $ 0.22 $ 0.28 $ 0.34 $ 0.31 $ 0.36 $ 0.44 Special Items: Plum Creek merger and integration-related costs (0.01) — — (0.02) — — Restructurings, impairments, and other charges
Slide 18: Adjusted EBITDA Reconciliation by Segment
ADJUSTED EBITDA RECONCILIATION Chart 16 BY SEGMENT $ Millions 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Timberlands $ 242 $ 222 $ 220 $ 252 $ 268 $ 240 Real Estate & ENR 43 37 74 87 41 47 Wood Products 207 274 278 258 286 385 Unallocated Items (38) (27) (3) (46) (51) (35) Adjusted EBITDA1 $ 454 $ 506 $ 569 $ 551
Slide 19: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION: Chart 17 TIMBERLANDS $ Millions 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 West $ 133 $ 124 $ 111 $ 140 $ 165 $ 152 South 96 91 95 101 98 84 North 8 2 4 9 6 3 Other 5 5 10 2 (1) 1 Total Timberlands Adjusted EBITDA1 $ 242 $ 222 $ 220 $ 252 $ 268 $ 240 West (31) (29) (26) (28) (29) (2
Slide 20: Adjusted EBITDA Reconciliation: Real Estate, Energy and Natural Resources
ADJUSTED EBITDA RECONCILIATION: REAL Chart 18 ESTATE, ENERGY AND NATURAL RESOURCES $ Millions 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Real Estate $ 29 $ 20 $ 58 $ 71 $ 27 $ 30 Energy & Natural Resources 14 17 16 16 14 17 Total Real Estate, Energy & Natural Resources Adjusted EBITDA1 $ 43 $ 37 $ 74 $ 87 $ 41 $ 4
Slide 21: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION: Chart 19 WOOD PRODUCTS $ Millions 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Lumber1 $ 99 $ 127 $ 117 $ 116 $ 140 $ 195 OSB 66 87 102 104 92 129 EWP 37 52 50 34 45 58 Distribution 8 13 12 5 15 12 Other (3) (5) (3) (1) (6) (9) Total Wood Products Adjusted EBITDA2,3 $ 207 $ 274 $ 278
Slide 22: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION: Chart 20 UNALLOCATED $ Millions 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Total Unallocated Adjusted EBITDA1 $ (38) $ (27) $ (3) $ (46) $ (51) $ (35) Total depletion, depreciation, & amortization (1) (2) (2) — (1) (1) Unallocated pension service costs (2) — (1) (1) — — Special item
Slide 23: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA Chart 21 RECONCILIATION $ MILLIONS 2018 2018 Q1 Q2 Net Debt to Adjusted EBITDA (LTM)1,2 2.5 2.2 Long-Term Debt $ 5,928 $ 5,924 Less: Cash and Cash Equivalents 598 901 Net Debt $ 5,330 $ 5,023 Adjusted EBITDA (LTM)2 $ 2,170 $ 2,301 Depletion, depreciation & amortization (5