Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Citi 2014 Global Property CEO Conference
29 slides from Weyerhaeuser's conference presentation, Mar 5, 2014
Slide 1: Growing a Truly Great Company
0 WEYERHAEUSER Growing a Truly Great Company Doyle Simons President & Chief Executive Officer Citi 2014 Global Property CEO Conference, Hollywood, FL March 4-5, 2014 0 Filed by Weyerhaeuser Company pursuant to Rule 425 under the Securities Act of 1933, as amended, and deemed filed pursuant to Rule 1
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
1 FORWARD-LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES This presentation contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, with respect to future prospects, developments, business s
Slide 3: Additional Information
2 ADDITIONAL INFORMATION Additional Information and Where to Find it: In connection with the proposed “Reverse Morris Trust” transaction between TRI Pointe Homes, Inc. and Weyerhaeuser Company, pursuant to which the homebuilding subsidiary of Weyerhaeuser, WRECO (with certain exclusions), will be co
Slide 4: Weyerhaeuser
3 WEYERHAEUSER TIMBERLANDS • 7 MM acres • $632 MM EBITDA* WOOD PRODUCTS • EBITDA* -Lumber: $317 MM -OSB**: $247 MM -ELP**: $45 MM - Distribution: $(33) MM CELLULOSE FIBERS • 6 mills • 2 converting facilities • $353 MM EBITDA* *2013 EBITDA Excluding Special Items. Unallocated items not included. See
Slide 5: Weyerhaeuser Structure
4 WEYERHAEUSER STRUCTURE Minerals and other non-qualifying activities Weyerhaeuser Company Timberlands (REIT) Taxable REIT Subsidiary Non-REIT Timber Business Wood Products Weyerhaeuser Real Estate Company (WRECO) Cellulose Fibers Approximately 7 million acres of timberlands Specialty Absorbent Pulp
Slide 6: Timberlands Uniquely Positioned
5 TIMBERLANDS UNIQUELY POSITIONED US West (Longview acquisition in red) US South LARGEST PACIFIC NORTHWEST TIMBERLAND OWNER – 2.6 million acres, including Longview acquisition – Douglas fir domestic and export value U.S. SOUTH – More than 4 million acres – Primarily Southern yellow pine URUGUAY – Mo
Slide 7: Housing Recovers to Trend
6 HOUSING RECOVERS TO TREND ~1.5 MM STARTS 0.0 0.5 1.0 1.5 2.0 2.5 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 *RISI *John Burns *Global Insight TOTAL U.S. HOUSING STARTS (Seasonally Adjusted Annual Rate) Source: Cen
Slide 8: Market Outlook
7 MARKET OUTLOOK • Higher demand and prices for US timber and wood products: – Rebound in US housing – Growing off-shore demand – Canadian timber supply shortage • Growing markets for fluff products driven by emerging country demand and global growth Overall Positive Trends for Weyerhaeuser Products
Slide 9: Path Forward
8 PATH FORWARD • LEVERS – Portfolio – Performance: Operational Excellence – Capital Allocation • KEY MEASURES – Relative EBITDA margin – Total Shareholder Return (TSR) • Relative to peers & S&P 500
Slide 10: Performance: Timberlands
9 PERFORMANCE: Timberlands STRATEGIC INITIATIVES • Maximize cash flow through Operational Excellence • Capture full value of the Longview Timber acquisition See appendix for detail on calculations. *See appendix for reconciliation to GAAP amounts. 0 20 40 60 80 2011 2012 2013 Annualized US South Del
Slide 11: Performance: Wood Products - Lumber
10 0 50 100 Current Benchmark* PERFORMANCE: Wood Products - Lumber STRATEGIC INITIATIVES • Reduce cost – achieve industry-leading cost structure • Maintain value added product mix OPERATIONAL EXCELLENCE** Controllable Manufacturing Cost $ / M B F EBITDA MARGIN* Closing the Gap = $100 MM **Note: Benc
Slide 12: Performance: Wood Products – OSB
11 PERFORMANCE: Wood Products – OSB STRATEGIC INITIATIVES • Drive down controllable costs by improving reliability • Grow higher margin products EBITDA MARGIN* 50 75 100 Current Benchmark $50 MM % Reli a b ilit y **Note: Reliability benchmark is mill Best in Class. Current is based on Q3 2013 YTD da
Slide 13: Performance: Wood Products – ELP & Distribution
12 -4% -2% 0% 2% 4% 6% 8% 10% 12% 2011 2012 2013 2014 Outlook Boise ELP LPX ELP WY ELP -10% -8% -6% -4% -2% 0% 2% 4% 2011 2012 2013 2014 Outlook Boise Distribution Blue Linx Distribution WY Distribution PERFORMANCE: Wood Products – ELP & Distribution TURNAROUND INITIATIVES ELP DISTRIBUTION • Close t
Slide 14: Performance: Cellulose Fibers
13 PERFORMANCE: Cellulose Fibers STRATEGIC INITIATIVES • Reduce cost • Grow with global customers • Innovate high-margin products EBITDA MARGIN* OPERATIONAL EXCELLENCE** Reduce Controllable Cost 625 675 725 Current Goal $ / T o n $100 MM **Cost of Goods Sold, excluding inflation. Current is based on
Slide 15: Performance: SG&A
14 PERFORMANCE: SG&A * Pro forma SG&A includes R&D and excludes WRECO direct SG&A. STRATEGIC INITIATIVE: Reduce Overhead Cost by $75 MM • Lowering cost essential to our success REDUCTION GOAL 200 250 300 350 400 450 500 550 600 2013 Pro-forma* 2014 Run Rate $75 MM $ M il li on s
Slide 16: Capital Allocation Priorities
15 CAPITAL ALLOCATION PRIORITIES • Return cash to shareholders • Invest in our businesses • Maintain appropriate capital structure
Slide 17: Returning Cash to Shareholders
16 RETURNING CASH TO SHAREHOLDERS • Two dividend increases during 2013 – Quarterly dividend per common share rose nearly 30% – Currently $0.22 per share • Target payout of 75% of Funds Available for Distribution (FAD) over cycle(1) – 2013 dividend payout approximately 80% of FAD (1) Funds Available
Slide 18: WRECO/TRI Pointe Combination
17 WRECO/TRI POINTE COMBINATION • WRECO to combine with TRI Pointe (TPH) in a tax-free transaction: – 129.7 million shares TPH stock – Approximately $700 million in cash • Expected to close early in the third quarter of 2014
Slide 19: WRECO/TRI Pointe Combination: Use of Proceeds
18 WRECO/TRI POINTE COMBINATION: Use of Proceeds • Stock: distributed to shareholders in either a spin-off or split-off – Spin: Similar to a dividend – Split: Similar to a share repurchase/exchange offer – Spin / Split decision to be determined by WY Board shortly before closing
Slide 20: Summary
19 SUMMARY • Goal – Grow Shareholder Value • Focus – Operational Excellence – Capital Allocation • Return cash to shareholders • Invest in our businesses • Maintain appropriate capital structure
Slide 21: Weyerhaeuser: Growing a Truly Great Company
20 WEYERHAEUSER Growing a Truly Great Company
Slide 22: Appendix
21 APPENDIX
Slide 23: Capital Structure and Liquidity
22 CAPITAL STRUCTURE AND LIQUIDITY • Cash balance as of December 31, 2013: $835 million • $1 Billion revolving credit facility: Expires in September 2018 • Long term debt: • Improving financial metrics support investment grade rating: (1) A reconciliation to GAAP is set forth in the appendix. (2) In
Slide 24: 2011 EBITDA Reconciliation by Segment
23 2011 EBITDA RECONCILIATION BY SEGMENT 1. Adjusted EBITDA excluding special items is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, pension and postretirem
Slide 25: 2012 EBITDA Reconciliation by Segment
24 2012 EBITDA RECONCILIATION BY SEGMENT 1. Adjusted EBITDA excluding special items is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, pension and postretirem
Slide 26: 2013 Q3 YTD EBITDA Reconciliation by Segment
25 2013 Q3 YTD EBITDA RECONCILIATION BY SEGMENT 1. Adjusted EBITDA excluding special items is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, pension and post
Slide 27: 2013 EBITDA Reconciliation by Segment
26 2013 EBITDA RECONCILIATION BY SEGMENT 1. Adjusted EBITDA excluding special items is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, pension and postretirem
Slide 28: EBITDA Reconciliation: Timberlands
27 EBITDA RECONCILIATION: TIMBERLANDS 1. Adjusted EBITDA excluding special items is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, pension and postretirement
Slide 29: Timberlands Benchmarking: EBITDA/Acre
28 TIMBERLANDS BENCHMARKING: EBITDA/Acre Based on publicly reported financials, plus National Council of Real Estate Investment Fiduciaries (NCREIF) data • WEST: – WY does not include Longview Timber – Pope Resources = Fee Timber Income from operations external + Fee Timber Depletion – NCREIF = Nort
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