Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Non-Deal Roadshow (March 2015)
36 slides from Weyerhaeuser's roadshow presentation, Mar 2, 2015
Slide 1: March 2015 Weyerhaeuser Investor Meetings
0 March 2015 WEYERHAEUSER INVESTOR MEETINGS
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, business strategies, rev
Slide 3: Driving Value for Shareholders
2 DRIVING VALUE FOR SHAREHOLDERS Growing a Truly Great Company Portfolio: Focused Forest Products Company Performance: Operational Excellence Capital Allocation
Slide 4: Focused Forest Products Company
3 FOCUSED FOREST PRODUCTS COMPANY Supporting a growing and sustainable dividend TIMBERLANDS Strong, productive asset base COMPLEMENTARY MANUFACTURING OPERATIONS Wood Products: Strong upside from US housing Cellulose Fibers: Strong cash flow and growing demand from global markets (100) 200
Slide 5: Performance
4 PERFORMANCE
Slide 6: Performance: Achieved 2014 Targets
5 Distribution Turnaround $35 million Cellulose Fibers $28 million Longview Timber Synergies $29 million SG&A Reductions $75 million run rate PERFORMANCE: Achieved 2014 Targets Timberlands $25 million Lumber $25 million OSB $10 million ELP Turnaround $34 million Focuse
Slide 7: Timberlands: OPX Performance
6 TIMBERLANDS: OPX Performance OPERATIONAL EXCELLENCE 0 25 50 75 2014 2015 Goal EBITDA $ m ill io ns $50-70 MM $25 MM $20-30 MM 2015 INITIATIVES Log marketing and merchandising Cost efficiencies: harvesting, transportation, silviculture Non-timber revenue
Slide 8: Timberlands: Current Relative Performance
7 TIMBERLANDS: Current Relative Performance EBITDA* / ACRE OWNED U.S. WEST Maintaining Top Position EBITDA* / ACRE OWNED U.S. SOUTH Maintaining Top Position Source for competitor data: public SEC filings, National Council of Real Estate Investment Fiduciaries (NCREIF). *See appendix for reconciliati
Slide 9: Lumber: OPX Performance
8 LUMBER: OPX Performance 2015 INITIATIVES Labor productivity Process efficiency Reliability Capital execution OPERATIONAL EXCELLENCE* Controllable Manufacturing Cost *Benchmark is mill Best in Class. Mfg cost = Cost Net of Logs, excluding depreciation and inflation. 0 50 100 2013 Base 201
Slide 10: Lumber: Current Relative Performance
9 LUMBER: Current Relative Performance EBITDA MARGIN* Closing the Gap to Take Top Position Source for competitor data: public SEC filings *See appendix for reconciliation to GAAP amounts. -5% 0% 5% 10% 15% 20% 2011 2012 2013 2014 Canfor Lumber Interfor Lumber West Fraser Lumber WY Lumber
Slide 11: OSB: OPX Performance
10 OSB: OPX Performance 2015 INITIATIVES Reliability Automation Enhanced product mix Transportation OPERATIONAL EXCELLENCE* 40 55 70 2013 Base 2014 2015 Goal *Reliability benchmark is mill Best in Class. 2013 Base = Q3 2013 YTD. % V al ue A dd ed P ro du ct 70 85 100 2013 Base 2014 2015 Be
Slide 12: OSB: Current Relative Performance
11 OSB: Current Relative Performance EBITDA MARGIN* Highly competitive results Source for competitor data: public SEC filings *See appendix for reconciliation to GAAP amounts. **Results for Ainsworth reflect 2014 Q3 LTM , as results for 2014 Q4 were not available at time of publication. -10% 0% 10%
Slide 13: ELP: Turnaround Performance
12 ELP: Turnaround Performance 2015 INITIATIVES Reliability Veneer recovery Supply chain performance ELP TURNAROUND 0 50 100 150 2013 2014 2015 Continue EBITDA Improvement* $ m ill io ns $15-20 MM *See appendix for reconciliation to GAAP amounts. $34 MM improvement vs. 2013
Slide 14: ELP: Current Relative Performance
13 ELP: Current Relative Performance EBITDA MARGIN* Significantly Improved Competitive Position Source for competitor data: public SEC filings *See appendix for reconciliation to GAAP amounts. -4% -2% 0% 2% 4% 6% 8% 10% 12% 2011 2012 2013 2014 Boise Wood Products LPX ELP WY ELP
Slide 15: Distribution: Turnaround Performance
14 DISTRIBUTION: Turnaround Performance 2015 INITIATIVES Warehouse efficiency Delivery cost Growth in excess of market DISTRIBUTION TURNAROUND Continue EBITDA Improvement* (50) 0 50 2013 2014 2015 $20-30 MM $ m ill io ns *See appendix for reconciliation to GAAP amounts. $35 MM improvement vs
Slide 16: Distribution: Current Relative Performance
15 DISTRIBUTION: Current Relative Performance EBITDA MARGIN* Closing the Gap Source for competitor data: public SEC filings *See appendix for reconciliation to GAAP amounts. -10% -8% -6% -4% -2% 0% 2% 4% 2011 2012 2013 2014 Boise Distribution Blue Linx Distribution WY Distribution
Slide 17: Cellulose Fibers: OPX Performance
16 CELLULOSE FIBERS: OPX Performance 2015 INITIATIVES Energy cost Reliability: predictive, preventive maintenance Liquid packaging board cost and quality OPERATIONAL EXCELLENCE 0 50 100 2014 2015 Goal Reduce Controllable Cost* $ m ill io ns $100 MM *Cost of Goods Sold, excluding inflation. $
Slide 18: Cellulose Fibers: Current Relative Performance
17 CELLULOSE FIBERS: Current Relative Performance EBITDA MARGIN* Narrowing the Gap to Take Top Position Source for competitor data: public SEC filings *See appendix for reconciliation to GAAP amounts. **Rayonier reflects Rayonier Performance Fibers segment for 2011-2013 and Rayonier Advanced Materia
Slide 19: Significant Runway Ahead
18 SIGNIFICANT RUNWAY AHEAD Improving US housing market Anticipate over 1.1 million starts in 2015 Accelerating single-family recovery Significant upside for US logs and wood products Domestic demand rises as housing strengthens Continued export demand Canadian timber supply shortage
Slide 20: Capital Allocation
19 CAPITAL ALLOCATION
Slide 21: Capital Allocation Priorities
20 CAPITAL ALLOCATION PRIORITIES Return cash to shareholders Invest in our businesses Maintain appropriate capital structure
Slide 22: Returning Cash to Shareholders: Sustainable and Growing Dividend
21 RETURNING CASH TO SHAREHOLDERS: Sustainable and Growing Dividend QUARTERLY DIVIDEND Up 93% since 2011 Increased by 32% to $0.29 per common share effective 2014 Q3 PAYOUT GUIDELINE 75% of Funds Available for Distribution (FAD) over the cycle* *Funds Available for Distribution: cash flow
Slide 23: Returning Cash to Shareholders: Share Repurchase
22 $700 million program authorized August 2014 Completed 30% of authorization within 5 months Share count reduced by approximately 6 million RETURNING CASH TO SHAREHOLDERS: Share Repurchase REPURCHASED AUG-DEC 2014 $203 MILLION SHARE REPURCHASE $700 MILLION APPROVED
Slide 24: Investing in Our Businesses
23 INVESTING IN OUR BUSINESSES Disciplined capital investment Focus: reduce cost structure and improve EBITDA 2015 CapEx approximating DD&A ($480-500 million) Opportunistic growth through acquisition Targeted, value-creating opportunities Responsible stewards of capital
Slide 25: Maintain Appropriate Capital Structure
24 MAINTAIN APPROPRIATE CAPITAL STRUCTURE Liquidity Long-term debt of approximately $4.9 billion* Investment grade rating *Amount as of 2014 Q4.
Slide 26: Summary
25 SUMMARY Focused forest products company Improving performance Delivering on priorities for capital allocation Growing earnings and shareholder value
Slide 27: Appendix
26 APPENDIX
Slide 28: Timberlands: Ownership
27 TIMBERLANDS: Ownership PACIFIC NORTHWEST Largest timberland holder in region 2.6 million acres west of Cascade mountains Douglas fir domestic and export value U.S. SOUTH More than four million acres Primarily Southern yellow pine URUGUAY More than 300,000 acres Loblolly pine a
Slide 29: Lumber Business
28 LUMBER BUSINESS Lumber mills – 18 Douglas Fir Hem-fir Spruce-Pine-Fir Southern Yellow Pine Production Capacity 4.6 billion board feet
Slide 30: OSB, Engineered Lumber & Distribution
29 OSB, ENGINEERED LUMBER & DISTRIBUTION OSB mills — 6 Production Capacity 3.0 billion square feet Distribution Centers — 21 ELP Mills — 6 Veneer/Plywood Supply Facilities — 3
Slide 31: Cellulose Fibers Business
30 CELLULOSE FIBERS BUSINESS GDANSK, POLAND Pulp Mills — 5 Capacity: 1.8 million metric tons Converting Facilities — 2 Liquid Packaging Board — 1 Capacity: 315,000 metric tons
Slide 32: 2014 EBITDA Reconciliation: By Segment
31 $ Millions 2014 Timberlands Lumber OSB ELP Distribution WP Other Wood Products Cellulose Fibers Unallocated Items Total Adjusted EBITDA1 $820 $319 $46 $79 $2 $-- $446 $447 ($79) $1,634 Depletion, Depreciation & Amortization (207) (41) (31) (41) (6) -- (119) (155) (12) (493) Non-Operating Pension
Slide 33: EBITDA Reconciliation: Timberlands
32 EBITDA RECONCILIATION: Timberlands $ Millions 2011 2012 2013 2014 West1 $273 $250 $361 $556 South 214 218 225 262 Other1 (15) (8) 46 2 Adjusted EBITDA2 $472 $460 $632 $820 Depletion, Depreciation & Amortization (137) (142) (166) (207) Special Items 152 -- -- -- Operating Income (GAAP) $487 $318 $
Slide 34: 2013 EBITDA Reconciliation: By Segment
33 2013 EBITDA RECONCILIATION: By Segment $ Millions 2013 Timberlands Lumber OSB ELP Distribution WP Other Wood Products Cellulose Fibers Unallocated Items Total Adjusted EBITDA1 $632 $317 $247 $45 ($33) ($2) $574 $353 ($61) $1,498 Depletion, Depreciation & Amortization (166) (40) (31) (46) (5) (1)
Slide 35: 2012 EBITDA Reconciliation: By Segment
34 2012 EBITDA RECONCILIATION: By Segment 1. Adjusted EBITDA 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 costs not allocated
Slide 36: 2011 EBITDA Reconciliation: By Segment
35 2011 EBITDA RECONCILIATION: By Segment $ Millions 2011 Timberlands Lumber OSB ELP Distribution WP Other Wood Products Cellulose Fibers Unallocated Items Total Adjusted EBITDA1 $472 ($7) ($4) $6 ($37) ($1) ($43) $597 ($108) $918 Depletion, Depreciation & Amortization (137) (47) (34) (61) (6) (3) (