Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q1 2013 Earnings Presentation
25 slides from Weyerhaeuser's earnings presentation, Apr 26, 2013
Slide 1: Earnings Results: 1st Quarter 2013
WEYERHAEUSER Earnings Results: 1st 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 Q1 Consolidated Results
Chart 1 2013 Q1 CONSOLIDATED RESULTS $ Millions 2012 2013 $ Millions EXCEPT EPS 2012 2013 Contribution to Consolidated Statement of Operations Q4 Q1 Q4 Q1 Change Earnings Net sales $2,000 $1,951 Timberlands $95 $104 $9 Cost of products sold 1,580 1,533 Wood Products 38 178 140 Gross margin 420 418 C
Slide 5: Timberlands Segment
Chart 2 TIMBERLANDS SEGMENT 1st Quarter Notes TIMBERLANDS ($ Millions) 2012 2013 Segment Statement of Operations Q4 Q1 • Strong demand for Western logs in domestic and export markets Third party sales $291 $285 • Improved selling prices and higher fee Intersegment sales 117 127 harvest volumes in th
Slide 6: Western/Southern Timberlands
Chart 3 WESTERN/SOUTHERN TIMBERLANDS 3rd-Party Log Sales and Realizations - West 3rd-Party Log Sales and Realizations - South 2,500 $125 2,500 $43 $50 $105 $42 $43 $99 $40 $41 $94 $96 $89 Volumes (Thousands of m3) 2,000 $100 2,000 $40 Volumes (Thousands of m3) 1,674 Realizations ($/m3) Realizations
Slide 7: Western/Southern Timberlands
Chart 4 WESTERN/SOUTHERN TIMBERLANDS Intersegment Log Sales Volume Fee Harvest Volume 2,000 3,500 1,657 1,619 3,177 1,564 1,606 1,496 2,788 2,809 2,833 3,000 2,714 (Thousands of m3) 1,500 (Thousands of m3) 2,500 1,000 577 539 548 592 2,000 477 500 1,995 1,500 1,831 1,784 1,876 1,679 0 1,000 Q1 Q2 Q3
Slide 8: Wood Products Segment
Chart 5 WOOD PRODUCTS SEGMENT WOOD PRODUCTS ($ Millions) 2012 2013 WOOD PRODUCTS ($ Millions) 2012 2013 EBITDA by Business Q4 Q1 Segment Statement of Operations Q4 Q1 Lumber $27 $101 Third party sales $832 $988 OSB 61 102 Intersegment sales 16 18 Engineered Wood Products (3) 11 Total sales 848 1,006
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 Volumes (Millions of Square Ft.) Volumes (Millions of Board Ft.) $359 $366 $290 Realizations ($/M 3/8”) 1,600 $350 $400 $268 Realizations ($/MBF) $311 1,200 $300 $214 1,200 $300 $197 937 1,056 1,013 1,025 1,
Slide 10: Cellulose Fibers Segment
Chart 7 CELLULOSE FIBERS SEGMENT 1st Quarter Notes CELLULOSE FIBERS ($ Millions) 2012 2013 Segment Statement of Operations Q4 Q1 • Slightly lower average price realizations for pulp Total sales $463 $474 • Increased maintenance expense Cost of products sold 385 424 and lower pulp mill productivity G
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 $1,181 $1,176 500 $1,155 $1,100 Volumes (Thousands of ADMT) Volumes (Thousands of ADMT) Realizations ($/ADMT) Realizations ($/ADMT) 550 $
Slide 12: Real Estate Segment
Chart 9 REAL ESTATE SEGMENT 1st Quarter Notes REAL ESTATE ($ Millions) 2012 2013 Segment Statement of Operations Q4 Q1 • Earnings from land and lot sales decreased $65 million compared Total sales $407 $196 with fourth quarter, which Cost of products sold 276 160 included unusually large transaction
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% $394 Cancellation Rate (%) 950 12% 15% 30% $381 $400 Price ($ Thousands) $376 $374 Gross Margin (%) 842 $372 Homes Closed (Units) 10% 700 615 10
Slide 14: Land and Lots
Chart 11 LAND AND LOTS Earnings from Sale of Land and Lots Controlled Lots as of March 31, 20131 80 20 17.7 $65 16 Controlled Lots (Thousands) 60 Earnings ($ Million) 12 40 8 20 $12 4 3.2 2.0 1.6 1.2 1.3 $1 $0 $0 0 0 Q1 Q2 Q3 Q4 Q1 AZ CA MD NV TX WA and VA 2012 2013 1. Lots are controlled through bo
Slide 15: Unallocated Items
Chart 12 UNALLOCATED ITEMS1 2012 2013 UNALLOCATED ITEMS ($ Millions) 2012 2013 UNALLOCATED ITEMS ($ Millions) Q4 Q1 Unallocated Corporate Function Expenses ($8) ($3) By Natural Expense Q4 Q1 Unallocated Share-Based Compensation (3) (7) Cost of (credit to) products sold3 ($2) $26 Unallocated Pension
Slide 16: Outlook: 2013 Q2
OUTLOOK: 2013 Q2 Chart 13 SEGMENT • COMMENTS TIMBERLANDS • Improved selling prices for Western domestic and export logs, and slightly lower fee harvest volumes • Flat realizations and somewhat higher fee harvest volumes in the South • Seasonally higher silviculture expenses • Somewhat higher earning
Slide 17: Financial Items
FINANCIAL ITEMS Chart 14 Cash from Operations 300 KEY FINANCIAL METRICS 2012 2013 $267 $252 ($ Millions) Q4 Q1 200 ($ Millions) Ending Cash Balance $898 $639 100 $122 Long-Term Debt $4,291 $4,135 0 ($60) ($61) Gross Debt to Adjusted EBITDA (LTM)1 3.7 3.0 (100) Net Debt to Enterprise Value2 18% 17% (
Slide 18: Appendix
APPENDIX 18 | 04/26/2013
Slide 19: Pension and Postretirement Expense
Chart 15 PENSION AND POSTRETIREMENT EXPENSE $ Millions 2012 2013 Net Pension and Postretirement Costs1 Q1 Q2 Q3 Q4 Q1 Timberlands $1 $3 $2 $2 $2 Wood Products 8 5 6 6 7 Cellulose Fibers 3 4 3 4 4 Real Estate 1 2 1 -- 1 Unallocated Items 7 7 7 8 10 Total Company Pension and Postretirement Costs $20 $
Slide 20: Intersegment Profit / LIFO Adjustment
Chart 16 INTERSEGMENT PROFIT / LIFO ADJUSTMENT Weyerhaeuser began holding elimination of intersegment profit on inventory and the LIFO reserve as part of Unallocated Items during 2012 Q2. This change provides a better understanding of business segment operating results. Contributions to earnings for
Slide 21: Earnings Summary
EARNINGS SUMMARY Chart 17 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 prior periods have been adjusted to reflect this change. A reconciliation to contribution to earnings a
Slide 22: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 18 Millions EXCEPT EPS 2012 2013 Q1 Q2 Q3 Q4 Q1 Weighted Average Shares Outstanding, Diluted 540 540 542 547 551 Diluted EPS Before Special Items $0.02 $0.09 $0.22 $0.26 $0.26 Special Items: Net Gain on Sale of Assets, Operations -- 0.01 -- -- -- and Property
Slide 23: EBITDA Reconciliation by Segment
Chart 19 EBITDA RECONCILIATION BY SEGMENT $ Millions 2012 Q4 2013 Q1 Wood Cellulose Real Unallocated Wood Cellulose Real Unallocated Timberlands Products Fibers Estate Items Total Timberlands Products Fibers Estate Items Total Adjusted EBITDA Excluding $131 $71 $99 $91 ($1) $391 $139 $209 $70 $9 ($4
Slide 24: EBITDA Reconciliation – Wood Products
Chart 20 EBITDA RECONCILIATION – WOOD PRODUCTS $ Millions 2012 Q1 2012 Q2 2012 Q3 2012 Q4 Lumber Lumber Lumber Lumber TOTAL TOTAL TOTAL TOTAL Other Other Other Other EWP EWP EWP EWP OSB OSB OSB OSB Dist Dist Dist Dist Adjusted EBITDA Excluding Special $14 $12 $9 ($9) ($6) $20 $48 $19 $4 ($5) ($3) $6
Slide 25: Gross Debt to EBITDA Reconciliation
Chart 21 GROSS DEBT TO EBITDA RECONCILIATION $ Millions 2012 2013 Q4 Q1 Gross Debt to Adjusted EBITDA (LTM)1, 2 3.7 3.0 Long-Term Debt $4,291 $4,135 Adjusted EBITDA Excluding Special Items (LTM)1 $1,162 $1,363 Depletion, Depreciation & Amortization (456) (455) Non-Operating Pension & Postretirement