Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q4 2015 Earnings Presentation
24 slides from Weyerhaeuser's earnings presentation, Feb 5, 2016
Slide 1: Earnings Results | 4th Quarter 2015
EARNINGS RESULTS | 4th Quarter 2015 February 5, 2016
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 our current expectations and various a
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 Q4 Consolidated Results
2015 Q4 CONSOLIDATED RESULTS Chart 1 $ Millions 2015 2015 $ Millions EXCEPT EPS 2015 2015 Contribution to Earnings Q3 Q4 Change Consolidated Statement of Operations Q3 Q4 Before Special Items Before Special Items Timberlands $ 126 $ 134 $ 8 Net sales $ 1,820 $ 1,734 Cost of products sold 1,445 1,390
Slide 5: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS Chart 2 $ Millions EXCEPT EPS 2015 Q3 2015 Q4 Pre-Tax After-Tax Diluted Pre-Tax After-Tax Diluted Earnings6 Earnings EPS Earnings6 Earnings EPS Earnings Before Special Items $ 175 $ 180 $ 0.35 $ 157 $ 121 $ 0.24 Special Items: Restructuring, impairments, and other charg
Slide 6: Timberlands Segment
TIMBERLANDS SEGMENT Chart 3 TIMBERLANDS ($ Millions)7 2015 2015 4th Quarter Notes Segment Statement of Operations Q3 Q4 • Increased Western fee harvest Third party sales $ 320 $ 329 volumes and log sales realizations Intersegment sales 139 133 Total Sales 459 462 • Decreased Southern fee harvest Cos
Slide 7: Sales Volumes and Realizations
SALES VOLUMES AND REALIZATIONS Chart 4 12 12 2015 Q4 12. Export log revenues are net of freight expense, rebates and claims. 7 2/5/2016
Slide 8: Western/Southern Timberlands
WESTERN/SOUTHERN TIMBERLANDS Chart 5 South West $24 $19 $17 $19 $13 $4 $3 $5 HBU Sales, including Non- Strategic Timberlands $2 $4 $18 $3 $3 $3 $5 $17 Like Kind Exchange (IRC Section 1031) $2 $20 $1 $— $14 $2 $8 $2 8 2/5/2016
Slide 9: Wood Products Segment
WOOD PRODUCTS SEGMENT Chart 6 WOOD PRODUCTS ($ Millions) 2015 2015 WOOD PRODUCTS ($ Millions) 2015 2015 EBITDA by Business Q3 Q4 Segment Statement of Operations Q3 Q4 Lumber $ 55 $ 33 Third party sales $ 1,023 $ 922 OSB 12 25 Intersegment sales 20 21 Engineered Wood Products 36 14 Total sales 1,043
Slide 10: 3rd-Party Sales Volumes and Realizations
3RD-PARTY SALES VOLUMES AND REALIZATIONS17 Chart 7 17. Sales volumes include sales of internally produced products and products purchased for resale primarily through our Distribution business. 10 2/5/2016
Slide 11: Cellulose Fibers Segment
CELLULOSE FIBERS SEGMENT Chart 8 CELLULOSE FIBERS ($ Millions) 2015 2015 4th Quarter Notes Segment Statement of Operations Q3 Q4 • Lower average sales realizations Total Sales $ 471 $ 475 for pulp Cost of products sold 371 393 Gross margin 100 82 • Higher maintenance costs due to additional schedule
Slide 12: Cellulose Fibers Segment: Maintenance
CELLULOSE FIBERS SEGMENT Chart 9 22 23 Days of Scheduled Annual Maintenance Total Maintenance Expense ($ Millions) 22 Pulp (ADMT) Liquid Packaging (metric tons) 22. Beginning in first quarter 2015, liquid packaging volumes are reported in thousands of metric tons for all periods. 12 2/5/2016 23. Inc
Slide 13: Unallocated Items
UNALLOCATED ITEMS Chart 10 UNALLOCATED ITEMS ($ Millions)24 2015 2015 UNALLOCATED ITEMS ($ Millions) 2015 2015 Q3 Q4 By Natural Expense Q3 Q4 Unallocated corporate function expenses $ (4) $ (7) Credit to products sold25 $ 10 $ 10 Unallocated share-based compensation 6 (4) G&A expenses26 (3) (15) Una
Slide 14: Financial Items
FINANCIAL ITEMS Chart 11 KEY FINANCIAL METRICS 2015 2015 ($ Millions) Q3 Q4 2014 includes discontinued operations Ending Cash Balance $ 1,048 $ 1,012 Long-Term Debt $ 4,891 $ 4,891 Gross Debt to Adjusted EBITDA (LTM)27 3.4 3.4 Net Debt to Enterprise Value28 22% 20% 2014: $1,088 million 2015: $1,064
Slide 15: Outlook: 2016 Q1
OUTLOOK: 2016 Q1 Chart 12 SEGMENT COMMENTS TIMBERLANDS ● Higher log sales volumes and average realizations in the West ● Seasonally lower Southern fee harvest volumes and slightly decreased average log sales realizations due to mix ● Lower earnings from the disposition of nonstrategic timberlands ●
Slide 16: Operational Excellence
OPERATIONAL EXCELLENCE Chart 13 16 2/5/2016
Slide 17: Appendix
APPENDIX APPENDIX 17 2/5/2016
Slide 18: Pension and Postretirement Expense
PENSION AND POSTRETIREMENT EXPENSE Chart 14 $ Millions 2014 2015 Net Pension and Postretirement Cost (Credit)29 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Timberlands $ 3 $ 3 $ 2 $ 2 $ 3 $ 2 $ 2 $ 2 Wood Products 5 6 6 7 7 7 6 7 Cellulose Fibers 2 3 3 3 3 5 5 4 Unallocated Items (10) (11) (12) (12) (3) (3) (2) (3) Tot
Slide 19: Earnings Summary
EARNINGS SUMMARY Chart 15 $ Millions EXCEPT EPS 2014 2015 Contribution to Earnings Before Special Items Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Timberlands $ 164 $ 170 $ 136 $ 143 $ 613 $ 162 $ 127 $ 126 $ 134 $ 549 Wood Products 64 102 105 56 327 62 71 85 48 266 Cellulose Fibers 54 91 59 87 291 33 27 79 64 2
Slide 20: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 16 $ Millions EXCEPT EPS 2014 2015 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Weighted Average Shares Outstanding, Diluted34 589 590 536 529 561 527 520 517 514 520 Diluted EPS from Continuing Operations Before Special Items $ 0.24 $ 0.40 $ 0.33 $ 0.27 $ 1.25 $ 0.19 $ 0.26
Slide 21: EBITDA Reconciliation by Segment
EBITDA RECONCILIATION BY SEGMENT Chart 17 $ MILLIONS 2015 Q3 2015 Q4 Wood Cellulose Unallocated Wood Cellulose Unallocated Timberlands Products Fibers Items Total Timberlands Products Fibers Items Total Adjusted EBITDA35 $ 177 $ 111 $ 123 $ (36) $ 375 $ 188 $ 75 $ 105 $ (12) $ 356 Depletion, depreci
Slide 22: EBITDA Reconciliation - Timberlands
EBITDA RECONCILIATION - TIMBERLANDS Chart 18 $ MILLIONS 2015 Q3 2015 Q4 West South Other Total West South Other Total Adjusted EBITDA38 $ 103 $ 70 $ 4 $ 177 $ 118 $ 74 $ (4) $ 188 Depreciation, depletion & amortization (27) (17) (7) (51) (29) (19) (6) (54) Operating Income (GAAP) $ 76 $ 53 $ (3) $ 1
Slide 23: EBITDA Reconciliation - Wood Products
EBITDA RECONCILIATION - WOOD PRODUCTS Chart 19 $ Millions 2015 Q3 2015 Q4 Lumber OSB EWP Distribution Other Total Lumber OSB EWP Distribution Other Total Adjusted EBITDA39, 40 $ 55 $ 12 $ 36 $ 9 $ (1) $ 111 $ 33 $ 25 $ 14 $ 2 $ 1 $ 75 Depletion, depreciation & amortization (11) (7) (7) (1) — (26) (1
Slide 24: Gross Debt to EBITDA Reconciliation
GROSS DEBT TO EBITDA RECONCILIATION Chart 20 $ MILLIONS 2015 2015 Q3 Q4 Gross Debt to Adjusted EBITDA (LTM)41, 42 3.4 3.4 Long-Term Debt $ 4,891 $ 4,891 Adjusted EBITDA (LTM)42 $ 1,442 $ 1,422 Depletion, depreciation & amortization (484) (479) Non-operating pension & postretirement costs 20 11 Speci