Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q1 2015 Earnings Presentation
24 slides from Weyerhaeuser's earnings presentation, May 1, 2015
Slide 1: Earnings Results | 1st Quarter 2015
EARNINGS RESULTS | 1st Quarter 2015 May 1, 2015
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS 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 our current expectations and various
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: 2015 Q1 Consolidated Results
2015 Q1 CONSOLIDATED RESULTS Chart 1 $ Millions 2014 2015 $ Millions EXCEPT EPS 2014 2015 Contribution to Earnings Q4 Q1 Change Consolidated Statement of Operations Q4 Q1 Before Special Items Before Special Items Timberlands $ 143 $ 162 $ 19 Net sales $ 1,788 $ 1,721 Wood Products 56 62 6 Cost of pr
Slide 5: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS Chart 2 $ Millions EXCEPT EPS 2014 Q4 2015 Q1 Pre-Tax After-Tax Diluted Pre-Tax After-Tax Diluted Earnings6 Earnings EPS Earnings6 Earnings EPS Earnings Before Special Items $ 183 $ 145 $ 0.27 $ 133 $ 99 $ 0.19 Special Items: Gain on postretirement plan amendment 38 25
Slide 6: Timberlands Segment
TIMBERLANDS SEGMENT Chart 3 TIMBERLANDS ($ Millions)8 2014 2015 1st Quarter Notes Segment Statement of Operations Q4 Q1 • Improved cost efficiencies due to Third party sales $ 348 $ 342 operational excellence Intersegment sales 150 150 Total Sales 498 492 • Lower Western log realizations Cost of pro
Slide 7: Sales Volumes and Realizations
SALES VOLUMES AND REALIZATIONS Chart 4 13 13 $152 $143 $131 $128 $93 2015 Q1 13. Export log revenues are net of freight expense, rebates and claims. 7 05/01/2015
Slide 8: Western/Southern Timberlands
WESTERN/SOUTHERN TIMBERLANDS Chart 5 South West $24 $19 $17 $4 $3 HBU Sales, including Non- Strategic Timberlands $2 $4 $18 $3 $3 Like Kind Exchange (IRC Section 1031) $2 $20 $1 $— $14 8 05/01/2015
Slide 9: Wood Products Segment
WOOD PRODUCTS SEGMENT Chart 6 WOOD PRODUCTS ($ Millions) 2014 2015 WOOD PRODUCTS ($ Millions) 2014 2015 EBITDA by Business Q4 Q1 Segment Statement of Operations Q4 Q1 Lumber $ 65 $ 65 Third party sales $ 947 $ 923 OSB 7 4 Intersegment sales 20 19 Engineered Wood Products 14 26 Total sales 967 942 Co
Slide 10: 3rd-Party Sales Volumes and Realizations
3RD-PARTY SALES VOLUMES AND REALIZATIONS18 Chart 7 18. Sales volumes include sales of internally produced products and products purchased for resale primarily through our distribution business. 10 05/01/2015
Slide 11: Cellulose Fibers Segment
CELLULOSE FIBERS SEGMENT Chart 8 CELLULOSE FIBERS ($ Millions) 2014 2015 1st Quarter Notes Segment Statement of Operations Q4 Q1 • Lower average pulp sales Total Sales $ 482 $ 447 realizations and volumes Cost of products sold 379 394 Gross margin 103 53 • Higher costs due to a scheduled SG&A expens
Slide 12: Cellulose Fibers Segment
CELLULOSE FIBERS SEGMENT Chart 9 23 24 Pulp (ADMT) Liquid Packaging (metric tons)23 23. Beginning in first quarter 2015, liquid packaging volumes are reported in thousands of metric tons for all periods. 12 05/01/2015 24. Includes expenses for annual maintenance outages and other maintenance costs.
Slide 13: Unallocated Items
UNALLOCATED ITEMS25 Chart 10 UNALLOCATED ITEMS ($ Millions) 2014 2015 UNALLOCATED ITEMS ($ Millions) 2014 2015 Q4 Q1 By Natural Expense Q4 Q1 Unallocated corporate function expenses $ (7) $ (9) Credit to products sold26 $ 12 $ (6) Unallocated share-based compensation (7) 3 G&A expenses27 (15) (9) Un
Slide 14: Financial Items
FINANCIAL ITEMS Chart 11 KEY FINANCIAL METRICS 2014 2015 including discontinued operations ($ Millions) Q4 Q1 Ending Cash Balance $ 1,580 $ 1,158 Long-Term Debt $ 4,891 $ 4,891 Gross Debt to Adjusted EBITDA (LTM)28 3.0 3.1 Net Debt to Enterprise Value29 15% 18% 2014: $1,088 million 2015 YTD: $77 mil
Slide 15: Share Repurchase
SHARE REPURCHASE Chart 12 • $700 million repurchase program announced August 2014 • Completed 65 percent of total authorization through first quarter 2015 SHARE REPURCHASES (millions) 2014 2015 Cumulative 3Q 4Q 1Q Total Common shares repurchased 3.9 2.2 7.3 13.4 Total repurchase of common stock $ 13
Slide 16: Outlook: 2015 Q2
OUTLOOK: 2015 Q2 Chart 13 SEGMENT COMMENTS TIMBERLANDS ● Lower Western log realizations ● Lower earnings from the disposition of nonstrategic timberlands ● Expect 2015 Q2 earnings to be lower than 2015 Q1 WOOD ● Seasonally higher sales volumes across all product lines PRODUCTS ● Average sales realiz
Slide 17: Appendix
APPENDIX APPENDIX 17 05/01/2015
Slide 18: Pension and Postretirement Cost
PENSION AND POSTRETIREMENT COST Chart 14 $ Millions 2014 2015 Net Pension and Postretirement Costs30 Q1 Q2 Q3 Q4 Q1 Timberlands $ 3 $ 3 $ 2 $ 2 $ 3 Wood Products 5 6 6 7 7 Cellulose Fibers 2 3 3 3 3 Unallocated Items (10) (11) (12) (12) (3) Total Company Pension and Postretirement Costs $ — $ 1 $ (1
Slide 19: Earnings Summary
EARNINGS SUMMARY Chart 15 $ Millions EXCEPT EPS 2014 2015 Contribution to Earnings Before Special Items Q1 Q2 Q3 Q4 Q1 Timberlands $ 164 $ 170 $ 136 $ 143 $ 162 Wood Products 64 102 105 56 62 Cellulose Fibers 54 91 59 87 33 Unallocated Items (14) 9 10 (13) (41) Total Contribution to Earnings before
Slide 20: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 16 $ Millions EXCEPT EPS 2014 2015 Q1 Q2 Q3 Q4 Q1 Weighted Average Shares Outstanding, Diluted35 589 590 536 529 527 Diluted EPS from Continuing Operations Before Special Items $ 0.24 $ 0.40 $ 0.33 $ 0.27 $ 0.19 Discontinued Operations 0.02 0.04 1.80 — — Dilut
Slide 21: EBITDA Reconciliation by Segment
EBITDA RECONCILIATION BY SEGMENT Chart 17 $ MILLIONS 2014 Q4 2015 Q1 Wood Cellulose Unallocated Wood Cellulose Unallocated Timberlands Products Fibers Items Total Timberlands Products Fibers Items Total Adjusted EBITDA36 $ 196 $ 86 $ 126 $ (32) $ 376 $ 215 $ 88 $ 78 $ (48) $ 333 Depreciation, deplet
Slide 22: EBITDA Reconciliation - Timberlands
EBITDA RECONCILIATION - TIMBERLANDS Chart 18 $ MILLIONS 2014 Q4 2015 Q1 West South Other Total West South Other Total Adjusted EBITDA36 $ 131 $ 63 $ 2 $ 196 $ 139 $ 72 $ 4 $ 215 Depreciation, depletion & amortization (28) (18) (7) (53) (29) (17) (7) (53) Special items — — — — — — — — Operating Incom
Slide 23: EBITDA Reconciliation - Wood Products
EBITDA RECONCILIATION - WOOD PRODUCTS Chart 19 $ Millions 2014 Q4 2015 Q1 Lumber OSB EWP Distribution Other Total Lumber OSB EWP Distribution Other Total Adjusted EBITDA36, 37 $ 65 $ 7 $ 14 $ (1) $ 1 $ 86 $ 65 $ 4 $ 26 $ (3) $ (4) $ 88 Depreciation, depletion & amortization (10) (8) (10) (2) — (30)
Slide 24: Gross Debt to EBITDA Reconciliation
GROSS DEBT TO EBITDA RECONCILIATION Chart 20 $ MILLIONS 2014 2015 Q4 Q1 Gross Debt to Adjusted EBITDA (LTM)38, 39 3.0 3.1 Long-Term Debt $ 4,891 $ 4,891 Adjusted EBITDA (LTM)39 $ 1,634 $ 1,595 Depreciation, depletion & amortization (493) (493) Non-operating pension & postretirement costs 45 38 Speci