Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q3 2018 Earnings Presentation
23 slides from Weyerhaeuser's earnings presentation, Oct 26, 2018
Slide 1: Weyerhaeuser Earnings Results 3rd Quarter 2018
WEYERHAEUSER EARNINGS RESULTS 3RD QUARTER 2018 | October 26, 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, log and
Slide 3: 2018 Q3 Consolidated Results
2018 Q3 CONSOLIDATED RESULTS Chart 1 $ Millions 2018 2018 $ Millions EXCEPT EPS 2018 2018 Adjusted EBITDA Q2 Q3 Change Consolidated Statement of Operations Before Q2 Q3 Special Items Timberlands $ 240 $ 206 $ (34) Net sales $ 2,065 $ 1,910 Real Estate, Energy & Natural 47 86 39 Resources Cost of pro
Slide 4: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS Chart 2 $ Millions EXCEPT EPS 2018 Q2 2018 Q3 Pre-Tax After-Tax Diluted Pre-Tax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 402 $ 332 $ 0.44 $ 240 $ 214 $ 0.28 Special Items: Product remediation (charges) recoveries, net
Slide 5: Adjusted EBITDA
1 ADJUSTED EBITDA Chart 3 2 Adjusted EBITDA (millions) Adjusted EBITDA (millions) Total Company Real Estate & ENR $800 $100 $87 $86 $637 $569 $551 $544 $74 $600 $506 $505 $75 $454 $43 $47 $400 $50 $41 $37 $200 $25 $0 $0 Q1.17 Q2.17 Q3.17 Q4.17 Q1.18 Q2.18 Q3.18 Q1.17 Q2.17 Q3.17 Q4.17 Q1.18 Q2.18 Q3
Slide 6: Timberlands Segment
TIMBERLANDS SEGMENT Chart 4 TIMBERLANDS ($ Millions)1 2018 2018 TIMBERLANDS ($ Millions)1 2018 2018 Adjusted EBITDA by Region Q2 Q3 Segment Statement of Operations Q2 Q3 West $ 152 $ 121 Third party sales $ 476 $ 459 South 84 80 Intersegment sales 139 128 North 3 4 Total Sales 615 587 Other 1 1 Cost
Slide 7: Sales Volumes, Realizations and Export Sales
SALES VOLUMES, Chart 5 REALIZATIONS AND EXPORT SALES 1 3rd-Party Log Sales and Realizations - West 3rd-Party Log Sales and Realizations - South Volumes (Thousands of tons) Volumes (Thousands of tons) $131.59 $132.24 $150 7,000 $40 4,000 $125.67 $34.48 $34.48 $34.24 $34.53 $34.83 $34.55 $34.88 $121.4
Slide 8: Fee Harvest Volumes and Intersegment Sales Volumes
FEE HARVEST VOLUMES Chart 6 AND INTERSEGMENT SALES VOLUMES Fee Harvest Volume Intersegment Log Sales Volume 7,350 7,500 6,953 6,751 2,500 6,473 6,630 6,478 6,373 6,250 2,000 Thousands of tons Thousands of tons 5,000 1,502 1,487 1,500 1,561 1,526 1,474 1,500 1,340 3,750 2,657 2,652 2,544 2,443 1,000
Slide 9: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & Chart 7 NATURAL RESOURCES (ENR) SEGMENT Real Estate & ENR ($ Millions) 2018 2018 Real Estate & ENR ($ Millions) 2018 2018 Adjusted EBITDA by Business Q2 Q3 Segment Statement of Operations Q2 Q3 Real Estate $ 30 $ 68 Total sales $ 58 $ 96 Energy & Natural Resources 17 18 Cost of
Slide 10: Real Estate, Energy & Natural Resources (ENR) Segment: Acreage and Price
REAL ESTATE, ENERGY & Chart 8 NATURAL RESOURCES (ENR) SEGMENT Acreage Sold Average Price per Acre 75 $3,000 $2,714 62 $2,403 $2,500 $2,258 Price per acre Acres (thousands) 60 $2,076 $2,000 45 $1,784 36 38 $1,500 $1,539 $1,209 30 $1,000 22 16 15 13 $500 10 $0 0 Q1.17 Q2.17 Q3.17 Q4.17 Q1.18 Q2.18 Q3.
Slide 11: Wood Products Segment
WOOD PRODUCTS SEGMENT Chart 9 WOOD PRODUCTS ($ Millions) 2018 2018 WOOD PRODUCTS ($ Millions) 2018 2018 Adjusted EBITDA by Business Q2 Q3 Segment Statement of Operations Q2 Q3 Lumber $ 195 $ 118 Total sales $1,525 $ 1,346 OSB 129 77 Cost of products sold 1,119 1,071 Engineered Wood Products 58 48 Gr
Slide 12: 3rd-Party Sales Volumes and Realizations
3RD-PARTY SALES VOLUMES Chart 10 AND REALIZATIONS1 Lumber OSB 2,400 $541 $600 2,000 $367 $400 Volumes (Millions of Square Ft.) $335 Volumes (Millions of Board Ft.) $498 $491 $328 Realizations ($/M 3/8") $466 $314 $321 Realizations ($/MBF) 2,000 $441 $448 $500 $295 $413 1,500 $263 $300 1,600 $400 1,2
Slide 13: Unallocated Items
UNALLOCATED ITEMS Chart 11 UNALLOCATED ITEMS ($ Millions)1 2018 2018 UNALLOCATED ITEMS ($ Millions) 2018 2018 Q2 Q3 By Natural Expense Q2 Q3 Unallocated corporate function expenses $ (19) $ (19) Cost of products sold2 $ (4) $ (6) and variable compensation expense Liability classified share-based (2)
Slide 14: Financial Items
FINANCIAL ITEMS Chart 12 KEY FINANCIAL METRICS 2018 2018 Cash Flow from Operations ($ Millions) Q2 Q3 Ending Cash Balance $901 $348 $600 $597 $489 Long-Term Debt $5,924 $5,921 $354 $ Millions $400 Net Debt to Adjusted EBITDA (LTM)1 2.2 2.5 $323 $200 1 $136 $87 Net Debt to Enterprise Value2 15% 18% $
Slide 15: Outlook: 2018 Q4 vs. 2018 Q3
OUTLOOK: 2018 Q4 vs. 2018 Q3 Chart 13 SEGMENT COMMENTS TIMBERLANDS ● Lower average sales realizations and moderately higher export log sales volumes in the West ● Slightly higher fee harvest volumes and comparable average log sales realizations in the South ● Expect earnings and Adjusted EBITDA will
Slide 16: Earnings Summary
EARNINGS SUMMARY Chart 14 $ Millions EXCEPT EPS 2017 2018 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Q2 Q3 Timberlands $ 242 $ 222 $ 220 $ 252 $ 268 $ 240 $ 206 Real Estate, Energy & Natural Resources 43 37 74 87 41 47 86 Wood Products 207 274 278 258 286 385 250 Unallocated Items (38) (27) (3) (46)
Slide 17: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 15 $ Millions EXCEPT EPS 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Diluted EPS Before Special Items $ 0.22 $ 0.28 $ 0.34 $ 0.31 $ 0.36 $ 0.44 $ 0.28 Special Items: Plum Creek merger and integration-related costs (0.01) — — (0.02) — — — Restructurings, impairments, and ot
Slide 18: Adjusted EBITDA Reconciliation by Segment
ADJUSTED EBITDA RECONCILIATION Chart 16 BY SEGMENT $ Millions 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Timberlands $ 242 $ 222 $ 220 $ 252 $ 268 $ 240 $ 206 Real Estate & ENR 43 37 74 87 41 47 86 Wood Products 207 274 278 258 286 385 250 Unallocated Items (38) (27) (3) (46) (51) (35) (37) Adjusted EBITDA1 $ 4
Slide 19: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION: Chart 17 TIMBERLANDS $ Millions 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 West $ 133 $ 124 $ 111 $ 140 $ 165 $ 152 $ 121 South 96 91 95 101 98 84 80 North 8 2 4 9 6 3 4 Other 5 5 10 2 (1) 1 1 Total Timberlands Adjusted EBITDA1 $ 242 $ 222 $ 220 $ 252 $ 268 $ 240 $ 206 West (31)
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 Q3 Real Estate $ 29 $ 20 $ 58 $ 71 $ 27 $ 30 $ 68 Energy & Natural Resources 14 17 16 16 14 17 18 Total Real Estate & ENR Adjusted EBITDA1 $ 43 $ 37 $ 74 $ 87 $ 41 $ 47 $ 86 Depl
Slide 21: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION: Chart 19 WOOD PRODUCTS $ Millions 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1 Lumber $ 99 $ 127 $ 117 $ 116 $ 140 $ 195 $ 118 OSB 66 87 102 104 92 129 77 EWP 37 52 50 34 45 58 48 Distribution 8 13 12 5 15 12 3 Other (3) (5) (3) (1) (6) (9) 4 2,3 Total Wood Products Adjusted EBIT
Slide 22: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION: Chart 20 UNALLOCATED $ Millions 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1 Total Unallocated Adjusted EBITDA $ (38) $ (27) $ (3) $ (46) $ (51) $ (35) $ (37) Total depletion, depreciation, & amortization (1) (2) (2) — (1) (1) (1) Unallocated pension service costs (2) — (1) (1) —
Slide 23: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA Chart 21 RECONCILIATION $ MILLIONS 2018 2018 Q2 Q3 1,2 Net Debt to Adjusted EBITDA (LTM) 2.2 2.5 Long-Term Debt $ 5,924 $ 5,921 Less: Cash and Cash Equivalents 901 348 Net Debt $ 5,023 $ 5,573 Adjusted EBITDA (LTM) $ 2,301 $ 2,237 Depletion, depreciation & amortization (4