Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q3 2013 Earnings Presentation
26 slides from Weyerhaeuser's earnings presentation, Oct 25, 2013
Slide 1: Earnings Results: 3rd Quarter 2013
WEYERHAEUSER Earnings Results: 3rd Quarter 2013 1 | 07/27/2012
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: 2013 Q3 Consolidated Results
Chart 1 2013 Q3 CONSOLIDATED RESULTS $ Millions 2013 2013 $ Millions EXCEPT EPS 2013 2013 Contribution to Consolidated Statement of Operations Q2 Q3 Q2 Q3 Change Earnings Net sales $2,141 $2,181 Timberlands $114 $118 $4 Cost of products sold 1,664 1,728 Wood Products 136 79 (57) Gross margin 477 453
Slide 5: Timberlands Segment
Chart 2 TIMBERLANDS SEGMENT 3rd Quarter Notes TIMBERLANDS ($ Millions) 2013 2013 Segment Statement of Operations Q2 Q3 • Longview Timber acquisition closed on July 23 and contributed $26 million of Third party sales2 $332 $348 EBITDA1 in the quarter Intersegment sales2 123 131 • This contribution la
Slide 6: Sales Volumes and Realizations
Chart 3 SALES VOLUMES AND REALIZATIONS 3rd-Party Log Sales and Realizations - West1 3rd-Party Log Sales and Realizations - South 3,000 $115 $120 2,500 $50 $105 $105 $42 $43 $43 $43 $43 $99 $40 $41 Volumes (Thousands of m3) $94 $96 2,500 $89 $100 Volumes (Thousands of m3) 2,000 $40 Realizations ($/m3
Slide 7: Western/Southern Timberlands
Chart 4 WESTERN/SOUTHERN TIMBERLANDS Intersegment Log Sales Volume1 Fee Harvest Volume1,2 2,000 3,500 1,657 3,177 1,564 1,606 1,619 1,596 2,928 1,496 1,487 2,788 2,809 2,833 2,828 3,000 2,714 (Thousands of m3) (Thousands of m3) 1,500 2,500 1,000 757 577 539 592 563 2,000 2,305 548 477 500 1,995 1,92
Slide 8: Wood Products Segment
Chart 5 WOOD PRODUCTS SEGMENT WOOD PRODUCTS ($ Millions) 2013 2013 WOOD PRODUCTS ($ Millions) 2013 2013 EBITDA by Business Q2 Q3 Segment Statement of Operations Q2 Q3 Lumber $92 $66 Third party sales $1,065 $1,030 OSB 81 39 Intersegment sales 18 19 Engineered Wood Products 7 16 Total sales 1,083 1,0
Slide 9: 3rd-Party Sales Volumes and Realizations
Chart 6 3RD-PARTY SALES VOLUMES AND REALIZATIONS1 Lumber OSB 2,000 $500 1,600 $359 $400 $440 $434 $404 $332 Volumes (Millions of Board Ft.) Volumes (Millions of Square Ft.) Realizations ($/M 3/8”) $359 $366 $290 Realizations ($/MBF) 1,600 $350 $400 $268 $311 1,200 $246 $300 1,156 1,189 $214 1,200 $3
Slide 10: Cellulose Fibers Segment
Chart 7 CELLULOSE FIBERS SEGMENT 3rd Quarter Notes CELLULOSE FIBERS ($ Millions) 2013 2013 Segment Statement of Operations Q2 Q3 • Higher than anticipated costs associated with scheduled Total sales $476 $474 annual maintenance outage for Cost of products sold 394 406 liquid packaging operations • I
Slide 11: Cellulose Fibers Segment
Chart 8 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 $1,181 $1,176 $1,150 Realizations ($/ADMT) Realizations ($/ADMT) 550 $900 $1,
Slide 12: Real Estate Segment
Chart 9 REAL ESTATE SEGMENT REAL ESTATE ($ Millions) 2013 2013 3rd Quarter Notes Segment Statement of Operations Q2 Q3 • Seasonally higher closing volumes Total sales $267 $324 • Improved average margins due Cost of products sold 210 248 to mix Gross margin 57 76 • Earnings from land and lot sales i
Slide 13: Single Family Homebuilding
Chart 10 SINGLE FAMILY HOMEBUILDING Average Closing Price and Home Closings and Cancellation Rate Single-Family Gross Margin 1,200 20% 35% $450 18% 15% 16% 16% $405 $394 $397 Homes Closed (Units) 15% Cancellation Rate (%) Price ($ Thousands) 950 15% 30% $381 $400 Gross Margin (%) 842 12% $376 $374 $
Slide 14: Land and Lots
Chart 11 LAND AND LOTS Earnings from Sale of Land and Lots Controlled Lots as of September 30, 20131 80 20 $65 16.8 16 Controlled Lots (Thousands) 60 Earnings ($ Million) 12 40 8 20 $12 4 3.1 $9 2.1 1.8 1.4 1.2 $1 $2 $0 $0 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 AZ CA MD NV TX WA and VA 2012 2013 1. Lots are contr
Slide 15: Unallocated Items
Chart 12 UNALLOCATED ITEMS1 2013 2013 UNALLOCATED ITEMS ($ Millions) 2013 2013 UNALLOCATED ITEMS ($ Millions) Q2 Q3 Unallocated Corporate Function By Natural Expense Q2 Q3 ($3) ($2) Expenses Unallocated Share-Based Cost of (credit to) products sold3 ($5) ($22) 5 (1) Compensation G&A expenses 7 10 Un
Slide 16: Outlook: 2013 Q4
Chart 13 OUTLOOK: 2013 Q4 SEGMENT COMMENTS TIMBERLANDS • Improved domestic prices for Western logs • Increased Western fee harvest volumes due to a full quarter of harvest from the Longview Timber acquisition • Slightly lower Southern log realizations due to mix, and slightly higher fee harvest volu
Slide 17: Financial Items
Chart 14 FINANCIAL ITEMS Cash from Operations $374 $343 KEY FINANCIAL METRICS 2013 2013 400 ($ Millions) Q2 Q3 300 Ending Cash Balance1 $912 $903 $267 $252 ($ Millions) 200 Long-Term Debt2 $4,114 $5,568 100 $122 Gross Debt to Adjusted EBITDA 2.7 3.4 (LTM)3 0 Net Debt to Enterprise Value4 16% 20% ($6
Slide 18: Appendix
APPENDIX 18 | 10/25/2013
Slide 19: Explanation of Changes in Share Count
Chart 15 EXPLANATION OF CHANGES IN SHARE COUNT • During 2013 Q2, Weyerhaeuser issued 29 million common shares in conjunction with the acquisition of Longview Timber LLC. • Subsequent to the end of 2013 Q2, the company issued an additional 4.35 million common shares in connection with the exercise of
Slide 20: Pension and Postretirement Expense
Chart 16 PENSION AND POSTRETIREMENT EXPENSE $ Millions 2012 2013 Net Pension and Postretirement Costs1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Timberlands $1 $3 $2 $2 $2 $3 $2 Wood Products 8 5 6 6 7 6 8 Cellulose Fibers 3 4 3 4 4 5 5 Real Estate 1 2 1 -- 1 2 1 Unallocated Items 7 7 7 8 10 10 11 Total Company Pension
Slide 21: Earnings Summary
Chart 17 EARNINGS SUMMARY Weyerhaeuser began holding elimination of intersegment profit on inventory and the LIFO reserve as part of Unallocated Items during 2012 Q2. Contributions to earnings for 2012 Q1 have been adjusted to reflect this change. $ Millions EXCEPT EPS 2012 2013 Contribution to Earn
Slide 22: Earnings Per Share Reconciliation
Chart 18 EARNINGS PER SHARE RECONCILIATION Millions EXCEPT EPS 2012 2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Weighted Average Shares 540 540 542 547 551 558 587 Outstanding, Diluted1 Diluted EPS Before Special Items $0.02 $0.09 $0.22 $0.26 $0.26 $0.35 $0.27 Special Items: Net Gain on Sale of Assets, Operations --
Slide 23: EBITDA Reconciliation by Segment
Chart 19 EBITDA RECONCILIATION BY SEGMENT $ Millions 2013 Q2 2013 Q3 Wood Cellulose Real Unallocated Wood Cellulose Real Unallocated Timberlands Products Fibers Estate Items Total Timberlands Products Fibers Estate Items Total Adjusted EBITDA Excluding $147 $167 $98 $28 $5 $445 $162 $110 $84 $45 $17
Slide 24: EBITDA Reconciliation – Timberlands
Chart 20 EBITDA RECONCILIATION – TIMBERLANDS $ Millions 2013 Q2 2013 Q3 Longview Longview Legacy Timber Legacy Timber Timberlands acquisition Total Timberlands acquisition Total Adjusted EBITDA Excluding Special Items1 $147 -- $147 $136 $26 $162 Depletion, Depreciation & Amortization (34) -- (34) (3
Slide 25: EBITDA Reconciliation – Wood Products
Chart 21 EBITDA RECONCILIATION – WOOD PRODUCTS $ Millions 2013 Q2 2013 Q3 Lumber OSB EWP Distribution Other Total Lumber OSB EWP Distribution Other Total Adjusted EBITDA $92 $81 $7 ($13) -- $167 $66 $39 $16 ($11) -- $110 Excluding Special Items1 Depletion, Depreciation (11) (7) (11) (1) (1) (31) (9)
Slide 26: Gross Debt to EBITDA Reconciliation
Chart 22 GROSS DEBT TO EBITDA RECONCILIATION $ Millions 2013 2013 Q2 Q3 Gross Debt to Adjusted EBITDA (LTM)1, 2 2.7 3.4 Long-Term Debt3 $4,114 $5,568 Adjusted EBITDA Excluding Special Items (LTM)1 $1,550 $1,641 Depletion, Depreciation & Amortization (453) (461) Non-Operating Pension & Postretirement