Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q3 2014 Earnings Presentation
24 slides from Weyerhaeuser's earnings presentation, Oct 31, 2014
Slide 1: Earnings Results: 3rd Quarter 2014
WEYERHAEUSER EARNINGS RESULTS: 3rd Quarter 2014 October 31, 2014
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: 2014 Q3 Consolidated Results
2014 Q3 CONSOLIDATED RESULTS Chart 1 $ Millions 2014 2014 $ Millions EXCEPT EPS 2014 2014 Contribution to Earnings Q2 Q3 Change Consolidated Statement of Operations Q2 Q3 Before Special Items Before Special Items Timberlands $ 170 $ 136 $ (34) Net sales $ 1,964 $ 1,915 Wood Products 102 105 3 Cost o
Slide 5: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS Chart 2 $ Millions EXCEPT EPS 2014 Q2 2014 Q3 Pre-Tax After-Tax Diluted Pre-Tax After-Tax Diluted Earnings1 Earnings EPS Earnings1 Earnings EPS Earnings From Continuing Operations Before Special Items $ 289 $ 234 $ 0.40 $ 222 $ 178 $ 0.33 Special Items: Gain on postreti
Slide 6: Timberlands Segment
TIMBERLANDS SEGMENT Chart 3 TIMBERLANDS ($ Millions) 2014 2014 3rd Quarter Notes Segment Statement of Operations Q2 Q3 • Lower sales volumes and Third party sales2 $ 396 $ 358 realizations in the West Intersegment sales2 143 141 • Higher sales volumes and slightly Total Sales 539 499 improved realiz
Slide 7: Sales Volumes and Realizations
SALES VOLUMES AND REALIZATIONS Chart 4 1 1,2 1,2 2014 Q3 7 10/31/2014 1.Beginning in 2013 Q3, Western log volumes and realizations include results from the Longview Timber acquisition. 2. Export log revenues are net of freight expense, rebates and claims.
Slide 8: Western/Southern Timberlands
WESTERN/SOUTHERN TIMBERLANDS Chart 5 1 2 South West $23 $24 $20 $19 $14 $3 $4 HBU Sales, including Non- Strategic Timberlands $2 $6 $3 $10 $2 $4 $18 Like Kind Exchange (IRC Section 1031) $1 $8 $20 $10 $2 $20 $1 1. Western volumes for 2013 Q3 and forward include results from the Longview Timber acqui
Slide 9: Wood Products Segment
WOOD PRODUCTS SEGMENT Chart 6 WOOD PRODUCTS ($ Millions) 2014 2014 WOOD PRODUCTS ($ Millions) 2014 2014 EBITDA by Business Q2 Q3 Segment Statement of Operations Q2 Q3 Lumber $ 85 $ 93 Third party sales $ 1,077 $ 1,048 OSB 14 11 Intersegment sales 21 20 Engineered Wood Products 30 27 Total sales 1,09
Slide 10: 3rd-Party Sales Volumes and Realizations
3RD-PARTY SALES VOLUMES AND REALIZATIONS1 Chart 7 1. Third party sales include sales of internally produced products and products purchased for resale, primarily through the Distribution business. 10 10/31/2014
Slide 11: Cellulose Fibers Segment
CELLULOSE FIBERS SEGMENT Chart 8 CELLULOSE FIBERS ($ Millions) 2014 2014 3rd Quarter Notes Segment Statement of Operations Q2 Q3 • Higher realizations for pulp and Total Sales $ 490 $ 503 liquid packaging board Cost of products sold 381 427 • Higher maintenance costs due to Gross margin 109 76 plann
Slide 12: Cellulose Fibers Segment
CELLULOSE FIBERS SEGMENT Chart 9 1 Pulp (ADMT) Liquid Packaging (tons) 12 10/31/2014 1. Includes expenses for annual maintenance outages and other maintenance costs.
Slide 13: Unallocated Items
UNALLOCATED ITEMS1 Chart 10 UNALLOCATED ITEMS ($ Millions) 2014 2014 UNALLOCATED ITEMS ($ Millions) 2014 2014 Q2 Q3 By Natural Expense Q2 Q3 Unallocated corporate function expenses $ (7) $ (3) Credit to products sold3 $ 12 $ 26 Unallocated share-based compensation (6) 1 G&A expenses4 (12) (3) Unallo
Slide 14: Outlook: 2014 Q4
OUTLOOK: 2014 Q4 Chart 11 SEGMENT COMMENTS TIMBERLANDS ● Higher realizations and increased road costs in the West ● Higher silviculture costs in the South ● Expect earnings from disposition of non-strategic timberlands and miscellaneous items to be approximately $15 million lower ● Excluding earning
Slide 15: Financial Items
FINANCIAL ITEMS Chart 12 KEY FINANCIAL METRICS 2014 2014 4 ($ Millions) Q2 Q3 Ending Cash Balance1 $ 845 $ 1,620 Long-Term Debt $ 4,891 $ 4,891 Gross Debt to Adjusted EBITDA (LTM)2 3.1 3.1 Net Debt to Enterprise Value3 17% 16% 2013: $1,004 million 2014 YTD: $784 million 4 Scheduled Debt Maturities a
Slide 16: Returning Cash to Shareholders
RETURNING CASH TO SHAREHOLDERS Chart 13 • Increased quarterly dividend by 32 percent to $0.29 per share • Reduced share count by over 10 percent • Retired approximately 59 million shares in conjunction with WRECO divestiture • Repurchased $130 million of common shares, 19 percent of August 2014 auth
Slide 17: Appendix
APPENDIX APPENDIX 17 10/31/2014
Slide 18: Pension and Postretirement Expense
PENSION AND POSTRETIREMENT EXPENSE Chart 14 $ Millions 2013 2014 Net Pension and Postretirement Costs1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Timberlands $ 2 $ 3 $ 2 $ 3 $ 3 $ 3 $ 2 Wood Products 7 6 8 7 5 6 6 Cellulose Fibers 4 5 5 4 2 3 3 Unallocated Items 10 10 11 9 (10) (11) (12) Total Company Pension and Postret
Slide 19: Earnings Summary
EARNINGS SUMMARY Chart 15 $ Millions EXCEPT EPS 2013 2014 Contribution to Earnings Before Special Items Q1 Q2 Q3 Q4 Q1 Q2 Q3 Timberlands $ 104 $ 114 $ 118 $ 134 $ 164 $ 170 $ 136 Wood Products 178 136 79 58 64 102 105 Cellulose Fibers 31 57 47 65 54 91 59 Unallocated Items (50) (6) 20 (30) (14) 9 10
Slide 20: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 16 $ Millions EXCEPT EPS 2013 2014 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Weighted Average Shares Outstanding, Diluted1,2 551 558 587 589 589 590 536 Diluted EPS Before Special Items $ 0.26 $ 0.35 $ 0.27 $ 0.27 $ 0.26 $ 0.44 $ 2.13 Special Items: Gain on postretirement plan ame
Slide 21: EBITDA Reconciliation by Segment
EBITDA RECONCILIATION BY SEGMENT Chart 17 $ MILLIONS 2014 Q2 2014 Q3 Wood Cellulose Unallocated Wood Cellulose Unallocated Timberlands Products Fibers Items Total Timberlands Products Fibers Items Total Adjusted EBITDA1 $ 221 $ 132 $ 130 $ (11) $ 472 $ 187 $ 135 $ 99 $ (7) $ 414 Depletion, depreciat
Slide 22: EBITDA Reconciliation - Timberlands
EBITDA RECONCILIATION - TIMBERLANDS Chart 18 $ MILLIONS 2014 Q2 2014 Q3 Longview Longview Legacy Timber Legacy Timber Timberlands acquisition Total Timberlands acquisition Total Adjusted EBITDA1 $ 170 $ 51 $ 221 $ 151 $ 36 $ 187 Depletion, depreciation & amortization (35) (16) (51) (37) (14) (51) Sp
Slide 23: EBITDA Reconciliation - Wood Products
EBITDA RECONCILIATION - WOOD PRODUCTS Chart 19 $ Millions 2014 Q2 2014 Q3 Lumber OSB ELP Distribution Other Total Lumber OSB ELP Distribution Other Total Adjusted EBITDA1 $ 85 $ 14 $ 30 $ 3 $ — $ 132 $ 93 $ 11 $ 27 $ 5 $ (1) $ 135 Depletion, depreciation & amortization (10) (8) (11) (1) — (30) (11)
Slide 24: Gross Debt to EBITDA Reconciliation
GROSS DEBT TO EBITDA RECONCILIATION Chart 20 $ MILLIONS 2014 2014 Q2 Q3 Gross Debt to Adjusted EBITDA (LTM)1,2 3.1 3.1 Long-Term Debt $ 4,891 $ 4,891 Adjusted EBITDA (LTM)1 $ 1,559 $ 1,603 Depletion, depreciation & amortization (486) (493) Non-operating pension & postretirement costs 1 24 Special It