Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — UBS Global Paper & Forest Products Conference 2012
26 slides from Weyerhaeuser's conference presentation, Sep 12, 2012
Slide 1: Weyerhaeuser at UBS Global Paper & Forest Products Conference
1 | September 12, 2012 WEYERHAEUSER Patty Bedient Executive Vice President and Chief Financial Officer UBS Global Paper & Forest Products Conference New York | September 12, 2012
Slide 2: Forward-Looking Statement
2 | September 12, 2012 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 assumpt
Slide 3: Reasons to Own Weyerhaeuser
3 | September 12, 2012 REASONS TO OWN WEYERHAEUSER • Financially attractive, sustainably managed timberlands • Tax efficient REIT structure – Aligns with timberlands focused strategy – Significant cash flow benefits • Company positioned for strong EBITDA growth – Housing recovery is underway – Posit
Slide 4: Housing Recovery Is Underway
4 | September 12, 2012 HOUSING RECOVERY IS UNDERWAY Housing Will Return to Long-Term Trend Levels 0.0 0.5 1.0 1.5 2.0 2.5 2000 2002 2004 2006 2008 2010 2012 2014 *RISI *John Burns *Global Insight Total U.S. Housing Starts (Seasonally Adjusted Annual Rate) Million Units Quarterly Source: Census *Fore
Slide 5: Revenue by Segment
5 | September 12, 2012 REVENUE BY SEGMENT Timberlands $1.7 Wood Products $2.6 Cellulose Fibers $2.0 WRECO $0.9 Revenue Including Intersegment Sales (Last twelve months, LTM) $7.2 billion1 1 A reconciliation to GAAP is set forth on slide 23
Slide 6: Timberlands
6 | September 12, 2012 TIMBERLANDS • US West – Nearly two million acres – High-value Douglas fir – Well-located for export markets • US South – Over four million acres – Primarily loblolly pine • Uruguay – Over 300,000 acres – Loblolly pine and eucalyptus • North America 100% certified to sustainabl
Slide 7: Timberlands
7 | September 12, 2012 TIMBERLANDS • Positive long-term supply and demand dynamics – Growing domestic and global markets for logs – Canadian supply declining due to Mountain Pine beetle • Our competitive advantages – Increasing harvest volume and value – Sawlog focus – Innovative silviculture – Uniq
Slide 8: Canada: Diminishing Share of U.S. Market
8 | September 12, 2012 CANADA: DIMINISHING SHARE OF U.S. MARKET • Canadian lumber available to U.S. lower due to mountain pine beetle and growth in offshore exports Source: International Wood Markets, RISI Billion Board Feet 2005 2010 2015 2020 Canadian Lumber Production 35 24 29 28 Domestic Consump
Slide 9: Wood Products mix and market reach
9 | September 12, 2012 Lumber 48% Engineered Wood Products 19% OSB / Plywood Panels 17% Specialty Products & Other 16%WOOD PRODUCTS Export 6% Broad Market Reach (% of 2011 Sales) Diverse Product Mix (% of 2011 Sales) Non- Residential / Other 26% Residential 68% Business Facilities Capacity Softwood
Slide 10: Wood Products
10 | September 12, 2012 WOOD PRODUCTS • Positive business outlook – Significant leverage to US housing recovery – Mountain Pine beetle constrains supply of Canadian lumber • Our business focus – Improving operating performance – Reducing costs – Expanding customer base and market reach – Product inn
Slide 11: Real Estate
11 | September 12, 2012 REAL ESTATE • Top 20 builder of single-family homes • Operate in select markets with positive long-term trends • Industry-leading customer satisfaction and margins
Slide 12: Real Estate
12 | September 12, 2012 REAL ESTATE • US housing is recovering • Innovating with new products, features and buyer services • Controlling costs • Enhancing margins • Repositioning land portfolio REAL ESTATE Revenue (LTM)1. $0.9 billion EBITDA (LTM)2. $95 million Key Economic Indicators US single-fami
Slide 13: Cellulose Fibers
13 | September 12, 2012 CELLULOSE FIBERS Fluff 42% Specialty (Crosslink, Pearl) 25% Pulp for Premium Towel & Tissue 22% Liquid Packaging 17% N & S America 38% Asia (Non- Japan) 25% Japan 16% Europe 13% EMEA1. 8% Diverse Product Mix (% of 2011 Sales) Broad Market Reach (% of 2011 Sales) 1. EMEA = Eas
Slide 14: Cellulose Fibers
14 | September 12, 2012 CELLULOSE FIBERS • Expanding margins through focus on value-added products • Growing strategic customer relationships • World-class industry efficiency and highly competitive manufacturing costs • Innovating with new and “next generation” proprietary fibers CELLULOSE FIBERS R
Slide 15: Updated Outlook: 2012 Q3
15 | September 12, 2012 UPDATED OUTLOOK: 2012 Q3 (Changes Highlighted) SEGMENT COMMENTS Timberlands • Slightly lower export log realizations, and lower domestic prices for Western logs • Somewhat lower Southern log price realizations due to mix • Higher earnings from disposition of non-strategic tim
Slide 16: Priorities for Capital Allocation
16 | September 12, 2012 PRIORITIES FOR CAPITAL ALLOCATION • Returning cash to shareholders • Improving capital structure – Strong liquidity and reducing interest expense – Managing retirement liabilities • Investing in our businesses – Disciplined capital expenditures – Growth opportunities
Slide 17: Dividend Payout Policy
17 | September 12, 2012 DIVIDEND PAYOUT POLICY • Targeting a dividend payout ratio of 75% of Funds Available for Distribution (FAD) over cycle – FAD defined as cash flow before debt repayment and dividends – Will consider repurchasing shares • Current quarterly dividend of 15 cents per share, or 60
Slide 18: Committed to Strong Liquidity and Improving Capital Structure
18 | September 12, 2012 COMMITTED TO STRONG LIQUIDITY AND IMPROVING CAPITAL STRUCTURE • Strong liquidity – $1 billion credit facility, expires June 2015 – no borrowings outstanding – Cash balance as of 6/30/2012: $861 million Strong Capital Structure Supports Sustainability of Dividend $ millions 20
Slide 19: Reasons to Own Weyerhaeuser
19 | September 12, 2012 REASONS TO OWN WEYERHAEUSER • Financially attractive, sustainably managed timberlands • Tax efficient REIT structure – Aligns with timberlands focused strategy – Significant cash flow benefits • Company positioned for strong EBITDA growth – Housing recovery is underway – Posi
Slide 20: Appendix
20 | September 12, 2012 APPENDIX
Slide 21: Weyerhaeuser Third-Party Awards and Recognitions
21 | September 12, 2012 WEYERHAEUSER THIRD-PARTY AWARDS AND RECOGNITIONS Most Admired Companies FORTUNE Magazine, 2006–2012 World’s Most Ethical Companies Ethisphere Institute, 2009, 2010, 2012 Top 100 S&P 500 Clean Capitalism Ranking Corporate Knights, 2012 100 Best Corporate Citizens Corporate Res
Slide 22: Reconciliation to GAAP: Total Revenue
22 | September 12, 2012 RECONCILIATION TO GAAP: TOTAL REVENUE $ millions 2011 Q3 through 2012 Q2 Timberlands Wood Products Cellulose Fibers Real Estate Total Sales to and Revenues from Unaffiliated Customers (GAAP) $1,038 $2,555 $1,958 $920 $6,471 Intersegment Sales (GAAP) 657 79 0 0 736 Revenue Inc
Slide 23: Reconciliation to GAAP: EBITDA
23 | September 12, 2012 RECONCILIATION TO GAAP: EBITDA 1EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. EBITDA , as we define it, is operating income from continuing operations adjusted for depreciation, depletion, amortization, special items and interes
Slide 24: Reconciliation to GAAP: SG&A Expense
24 | September 12, 2012 RECONCILIATION TO GAAP: SG&A EXPENSE $ millions 2009 2010 2011 YTD 2012 SG&A Expense, Excluding Pension & OPEB $746 $653 $562 $273 Pension & Postretirement Costs (Credits) (65) (3) 39 19 SG&A Expense (GAAP) $681 $650 $601 $292
Slide 25: Patty Bedient
25 | September 12, 2012 PATTY BEDIENT Patty Bedient was named Executive Vice President and Chief Financial Officer in April 2007. She became senior vice president of Finance and Strategic Planning in February 2006 and from February 2003 to 2006 she served as vice president of Strategic Planning. Pri
Slide 26: Weyerhaeuser
26 | September 12, 2012 WEYERHAEUSER
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