Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q4 2017 Earnings Presentation
27 slides from Weyerhaeuser's earnings presentation, Feb 2, 2018
Slide 1: Weyerhaeuser Earnings Results 4th Quarter 2017
WEYERHAEUSER EARNINGS RESULTS 4TH QUARTER 2017 | February 2, 2018
Slide 2: Forward-Looking Statement
FORWARD-LOOKING STATEMENT 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, cash flow, adjusted EBITDA
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: 2017 Consolidated Results
2017 CONSOLIDATED RESULTS Chart 1 $ Millions 2016 2017 $ Millions EXCEPT EPS 2016 2017 Adjusted EBITDA Change Consolidated Statement of Operations Before Special Items Timberlands $ 865 $ 936 $ 71 Net sales $ 6,365 $ 7,196 Real Estate, Energy & Natural Resources 189 241 52 Cost of products sold 4,98
Slide 5: 2017 Q4 Consolidated Results
2017 Q4 CONSOLIDATED RESULTS Chart 2 $ Millions 2017 2017 $ Millions EXCEPT EPS 2017 2017 Adjusted EBITDA Q3 Q4 Change Consolidated Statement of Operations Before Q3 Q4 Special Items Timberlands $ 220 $ 252 $ 32 Net sales $ 1,872 $ 1,823 Real Estate, Energy & Natural Resources 74 87 13 Cost of produ
Slide 6: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS Chart 3 $ Millions EXCEPT EPS 2017 Q3 2017 Q4 Pre-Tax After-Tax Diluted Pre-Tax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 310 $ 259 $ 0.34 $ 288 $ 234 $ 0.31 Special Items: Plum Creek merger-and integration-related cos
Slide 7: Timberlands Segment
TIMBERLANDS SEGMENT1 Chart 4 TIMBERLANDS ($ Millions) 2017 2017 TIMBERLANDS ($ Millions) 2017 2017 Adjusted EBITDA by Region Q3 Q4 Segment Statement of Operations Q3 Q4 West $ 111 140 Third party sales $ 480 $ 483 South 95 101 Intersegment sales 125 140 North 4 9 Total Sales 605 623 Other 10 2 Cost
Slide 8: Sales Volumes and Realizations
SALES VOLUMES AND REALIZATIONS Chart 5 1 1. Western logs are primarily transacted in MBF but are converted to ton equivalents for external reporting purposes. 8 2/2/2018
Slide 9: Export Sales, Fee Harvest Volumes, and Intersegment Sales Volumes
EXPORT SALES, FEE HARVEST VOLUMES, Chart 6 AND INTERSEGMENT SALES VOLUMES 1 2 South West North 2017 Q4 Japan China Korea 1. Intersegment log sales volumes declined beginning in first quarter 2017 due to the divestiture of our Cellulose Fibers pulp mills and reclassification of certain third party lo
Slide 10: Real Estate, Energy and Natural Resources (ENR) Segment
REAL ESTATE, ENERGY AND Chart 7 NATURAL RESOURCES (ENR) SEGMENT1 Real Estate & ENR ($ Millions) 2017 2017 Real Estate & ENR ($ Millions) 2017 2017 Adjusted EBITDA by Business Q3 Q4 Segment Statement of Operations Q3 Q4 Real Estate $ 58 $ 71 Third party sales $ 82 $ 99 Energy & Natural Resources 16 1
Slide 11: Real Estate, Energy and Natural Resources Adjusted EBITDA
REAL ESTATE, ENERGY AND Chart 8 NATURAL RESOURCES (ENR) SEGMENT Adjusted EBITDA (in millions) Real Estate $26 $17 $24 $75 $29 $20 $58 $71 ENR $8 $11 $13 $15 $14 $17 $16 $16 1. Our definition of Adjusted EBITDA and a reconciliation to GAAP are set forth on Chart 21. 11 2/2/2018
Slide 12: Wood Products Segment
WOOD PRODUCTS SEGMENT Chart 9 WOOD PRODUCTS ($ Millions) 2017 2017 WOOD PRODUCTS ($ Millions) 2017 2017 Adjusted EBITDA by Business Q3 Q4 Segment Statement of Operations Q3 Q4 Lumber $ 117 $ 116 Total sales 1,299 1,228 OSB 102 $ 104 Cost of products sold 1,005 947 Engineered Wood Products 50 $ 34 Gr
Slide 13: 3rd-Party Sales Volumes and Realizations
3RD-PARTY SALES VOLUMES AND REALIZATIONS1 Chart 10 1. Sales volumes include sales of internally produced products and products purchased for resale primarily through our Distribution business. 13 2/2/2018
Slide 14: Unallocated Items
UNALLOCATED ITEMS Chart 11 UNALLOCATED ITEMS ($ Millions)1 2017 2017 UNALLOCATED ITEMS ($ Millions) 2017 2017 Q3 Q4 By Natural Expense Q3 Q4 Unallocated corporate function expenses $ (19) $ (18) Cost of products sold2 $ (2) $ (17) Unallocated share-based compensation (1) (2) G&A expenses3 (16) (16)
Slide 15: Operational Excellence Update
OPERATIONAL EXCELLENCE UPDATE Chart 12 15 2/2/2018
Slide 16: Financial Items
FINANCIAL ITEMS Chart 13 Includes discontinued operations KEY FINANCIAL METRICS 2017 2017 ($ Millions) Q3 Q4 Ending Cash Balance $ 497 $ 824 Long-Term Debt1 $ 5,995 $ 5,992 Gross Debt to Adjusted EBITDA (LTM)2 3.1 2.9 Net Debt to Enterprise Value3 18% 16% Excluding $494 million of cash paid for inco
Slide 17: Outlook: 2018 Q1
OUTLOOK: 2018 Q1 Chart 14 SEGMENT COMMENTS TIMBERLANDS ● Higher Western log sales realizations, partially offset by modestly lower fee harvest volumes ● Seasonally lower Southern fee harvest volumes and comparable sales realizations ● Higher trucking costs ● Expect earnings and Adjusted EBITDA to be
Slide 18: Appendix
APPENDIX APPENDIX 18 2/2/2018
Slide 19: Pension and Postretirement Expense
PENSION AND POSTRETIREMENT EXPENSE Chart 15 $ Millions 2016 2017 Net Pension and Postretirement Cost (Credit) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Timberlands $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 1 Real Estate, Energy & Natural Resources — — — — — — — 1 Wood Products 5 6 6 5 6 5 6 6 Unallocated pension service costs 2
Slide 20: Earnings Summary
EARNINGS SUMMARY Chart 16 $ Millions 2016 2017 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Timberlands $ 199 $ 220 $ 223 $ 223 $ 242 $ 222 $ 220 $ 252 Real Estate, Energy & Natural Resources 34 28 37 90 43 37 74 87 Wood Products 117 189 203 132 207 274 278 258 Unallocated Items (14) (24) (29)
Slide 21: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 17 $ Millions EXCEPT EPS 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Weighted Average Shares Outstanding, Diluted 635 748 754 753 755 756 757 758 Diluted EPS from Continuing Operations Before Special Items $ 0.20 $ 0.17 $ 0.23 $ 0.14 $ 0.22 $ 0.28 $ 0.34 $ 0.31 Special
Slide 22: Adjusted EBITDA Reconciliation by Segment
ADJUSTED EBITDA RECONCILIATION BY Chart 18 SEGMENT $ MILLIONS 2016 2017 Real Real Estate & Wood Unallocated Estate & Wood Unallocated Timberlands ENR Products Items Total Timberlands ENR Products Items Total Adjusted EBITDA1 $ 865 $ 189 $ 641 $ (112) $ 1,583 $ 936 $ 241 $ 1,017 $ (114) $ 2,080 Deple
Slide 23: Adjusted EBITDA Reconciliation by Segment
ADJUSTED EBITDA RECONCILIATION BY Chart 19 SEGMENT $ MILLIONS 2017 Q3 2017 Q4 Real Real Estate & Wood Unallocated Estate & Wood Unallocated Timberlands ENR Products Items Total Timberlands ENR Products Items Total Adjusted EBITDA1 $ 220 $ 74 $ 278 $ (3) $ 569 $ 252 $ 87 $ 258 $ (46) $ 551 Depletion,
Slide 24: Adjusted EBITDA Reconciliation - Timberlands
ADJUSTED EBITDA RECONCILIATION - Chart 20 TIMBERLANDS $ MILLIONS 2017 Q3 2017 Q4 West South North Other Total West South North Other Total Adjusted EBITDA1 $ 111 $ 95 $ 4 $ 10 $ 220 $ 140 $ 101 $ 9 $ 2 $ 252 Depreciation, depletion & amortization (26) (49) (4) (10) (89) (28) (51) (5) (2) (86) Specia
Slide 25: Adjusted EBITDA Reconciliation - Real Estate, Energy and Natural Resources
ADJUSTED EBITDA RECONCILIATION - REAL Chart 21 ESTATE, ENERGY AND NATURAL RESOURCES $ Millions 2017 Q3 2017 Q4 Energy & Energy & Natural Natural Real Estate Resources Total Real Estate Resources Total Adjusted EBITDA1 $ 58 $ 16 $ 74 $ 71 $ 16 $ 87 Depletion, depreciation & amortization — (4) (4) — (
Slide 26: Adjusted EBITDA Reconciliation - Wood Products
ADJUSTED EBITDA RECONCILIATION - Chart 22 WOOD PRODUCTS $ Millions 2017 Q3 2017 Q4 Lumber OSB EWP Distribution Other Total Lumber OSB EWP Distribution Other Total Adjusted EBITDA1,2 $ 117 $ 102 $ 50 $ 12 $ (3) $ 278 $ 116 $ 104 $ 34 $ 5 $ (1) $ 258 Depletion, depreciation & amortization (17) (8) (12
Slide 27: Gross Debt to Adjusted EBITDA Reconciliation
GROSS DEBT TO ADJUSTED EBITDA Chart 23 RECONCILIATION $ MILLIONS 2017 2017 Q3 Q4 Gross Debt to Adjusted EBITDA (LTM)1,2 3.1 2.9 Long-Term Debt $ 5,995 $ 5,992 Adjusted EBITDA (LTM)2 $ 1,929 $ 2,080 Depletion, depreciation & amortization (531) (521) Basis of real estate sold (108) (81) Non-operating