Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q2 2014 Earnings Presentation
24 slides from Weyerhaeuser's earnings presentation, Aug 1, 2014
Slide 1: Earnings Results: 2nd Quarter 2014
WEYERHAEUSER EARNINGS RESULTS: 2nd Quarter 2014 August 1, 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 Q2 Consolidated Results
2014 Q2 CONSOLIDATED RESULTS Chart 1 $ Millions 2014 2014 $ Millions EXCEPT EPS 2014 2014 Contribution to Earnings Q1 Q2 Change Consolidated Statement of Operations Q1 Q2 Before Special Items Before Special Items Timberlands $ 164 $ 170 $ 6 Net sales $ 1,736 $ 1,964 Wood Products 64 102 38 Cost of p
Slide 5: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS Chart 2 $ Millions EXCEPT EPS 2014 Q1 2014 Q2 Pre-Tax After-Tax Diluted Pre-Tax After-Tax Diluted Earnings1 Earnings EPS Earnings1 Earnings EPS Earnings From Continuing Operations Before Special Items $ 185 $ 143 $ 0.24 $ 289 $ 234 $ 0.40 Special Items: Gain on postreti
Slide 6: Timberlands Segment
TIMBERLANDS SEGMENT Chart 3 TIMBERLANDS ($ Millions) 2014 2014 2nd Quarter Notes • Higher sales volumes and slightly Segment Statement of Operations Q1 Q2 lower realizations in the West Third party sales2 $ 371 $ 396 • Seasonally higher Western logging Intersegment sales2 143 143 and road costs Tota
Slide 7: Sales Volumes and Realizations
SALES VOLUMES AND REALIZATIONS Chart 4 1 1,2 1,2 2014 Q2 7 08/01/2014 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 $14 $3 $4 HBU Sales, including Non- Strategic Timberlands $2 $6 $3 $10 $2 $4 Like Kind Exchange (IRC Section 1031) $1 $8 $20 $10 $2 $20 1. Western volumes for 2013 Q3 and forward include results from the Longview Timber acquisition and
Slide 9: Wood Products Segment
WOOD PRODUCTS SEGMENT Chart 6 WOOD PRODUCTS ($ Millions) 2014 2014 WOOD PRODUCTS ($ Millions) 2014 2014 EBITDA by Business Q1 Q2 Segment Statement of Operations Q1 Q2 Lumber $ 76 $ 85 Third party sales $ 898 $ 1,077 OSB 14 14 Intersegment sales 19 21 Engineered Wood Products 8 30 Total sales 917 1,0
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 08/01/2014
Slide 11: Cellulose Fibers Segment
CELLULOSE FIBERS SEGMENT Chart 8 CELLULOSE FIBERS ($ Millions) 2014 2014 2nd Quarter Notes Segment Statement of Operations Q1 Q2 • Higher realizations and increased sales volumes for pulp and liquid Total Sales $ 461 $ 490 packaging board Cost of products sold 390 381 • Strong operating performance
Slide 12: Cellulose Fibers Segment
CELLULOSE FIBERS SEGMENT Chart 9 1 Pulp (ADMT) Liquid Packaging (tons) 12 08/01/2014 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 Q1 Q2 By Natural Expense Q1 Q2 Unallocated corporate function expenses $ (2) $ (1) (Cost of) credit to products sold3 $ (6) $ 12 Unallocated share-based compensation 3 (6) G&A expenses4 (5)
Slide 14: Discontinued Operations
DISCONTINUED OPERATIONS1 Chart 11 DISCONTINUED OPERATIONS ($ Millions) 2014 2014 2nd Quarter Notes Segment Statement of Operations Q1 Q2 • Includes items related to Total sales $ 248 $ 317 Weyerhaeuser Real Estate Company (WRECO), which was Income from operations $ 16 $ 27 divested on July 7 Income
Slide 15: Outlook: 2014 Q3
OUTLOOK: 2014 Q3 Chart 12 SEGMENT COMMENTS TIMBERLANDS ● Seasonally lower sales volumes for Western logs and lower realizations ● Decreased Western fee harvest ● Increased Southern fee harvest ● Seasonally higher silviculture and road costs ● Decreased earnings from disposition of non-strategic timb
Slide 16: Financial Items
FINANCIAL ITEMS Chart 13 KEY FINANCIAL METRICS 2014 2014 4 ($ Millions) Q1 Q2 Ending Cash Balance1 $ 777 $ 845 Long-Term Debt $ 4,891 $ 4,891 Gross Debt to Adjusted EBITDA (LTM)2 3.3 3.1 Net Debt to Enterprise Value3 19% 17% 2013: $1,004 million 2014: $431 million 4 Scheduled Debt Maturities as of J
Slide 17: Appendix
APPENDIX APPENDIX 17 08/01/2014
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 Timberlands $ 2 $ 3 $ 2 $ 3 $ 3 $ 3 Wood Products 7 6 8 7 5 6 Cellulose Fibers 4 5 5 4 2 3 Unallocated Items 10 10 11 9 (10) (12) Total Company Pension and Postretirement Costs $
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 Timberlands $ 104 $ 114 $ 118 $ 134 $ 164 $ 170 Wood Products 178 136 79 58 64 102 Cellulose Fibers 31 57 47 65 54 91 Unallocated Items (50) (6) 20 (30) (14) 9 Total Contribution
Slide 20: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 16 $ Millions EXCEPT EPS 2013 2014 Q1 Q2 Q3 Q4 Q1 Q2 Weighted Average Shares Outstanding, Diluted1 551 558 587 589 589 590 Diluted EPS Before Special Items $ 0.26 $ 0.35 $ 0.27 $ 0.27 $ 0.26 $ 0.44 Special Items: Gain on postretirement plan amendment — — — — 0
Slide 21: EBITDA Reconciliation by Segment
EBITDA RECONCILIATION BY SEGMENT Chart 17 $ MILLIONS 2014 Q1 2014 Q2 Wood Cellulose Unallocated Wood Cellulose Unallocated Timberlands Products Fibers Items Total Timberlands Products Fibers Items Total Adjusted EBITDA1 $ 216 $ 93 $ 92 $ (29) $ 372 $ 221 $ 132 $ 130 $ (11) $ 472 Depletion, depreciat
Slide 22: EBITDA Reconciliation - Timberlands
EBITDA RECONCILIATION - TIMBERLANDS Chart 18 $ MILLIONS 2014 Q1 2014 Q2 Longview Longview Legacy Timber Legacy Timber Timberlands acquisition Total Timberlands acquisition Total Adjusted EBITDA1 $ 163 $ 53 $ 216 $ 170 $ 51 $ 221 Depletion, depreciation & amortization (37) (15) (52) (35) (16) (51) Sp
Slide 23: EBITDA Reconciliation - Wood Products
EBITDA RECONCILIATION - WOOD PRODUCTS Chart 19 $ Millions 2014 Q1 2014 Q2 Lumber OSB EWP Distribution Other Total Lumber OSB EWP Distribution Other Total Adjusted EBITDA1 $ 76 $ 14 $ 8 $ (5) $ — $ 93 $ 85 $ 14 $ 30 $ 3 $ — $ 132 Depletion, depreciation & amortization (10) (8) (10) (1) — (29) (10) (8
Slide 24: Gross Debt to EBITDA Reconciliation
GROSS DEBT TO EBITDA RECONCILIATION Chart 20 $ MILLIONS 2014 2014 Q1 Q2 Gross Debt to Adjusted EBITDA (LTM)1,2 3.3 3.1 Long-Term Debt $ 4,891 $ 4,891 Adjusted EBITDA (LTM)1 $ 1,498 $ 1,559 Depletion, depreciation & amortization (472) (486) Non-operating pension & postretirement costs (20) 1 Special