EARNINGS RESULTS | 1st Quarter 2015 May 1, 2015
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 assumptions that are subject to risks and uncertainties. Factors listed below, as well as other factors, may cause actual results to differ significantly from these forward-looking statements. There is no guarantee that any of the events anticipated by these forward-looking statements will occur. If any of the events occur, there is no guarantee what effect they will have on company operations or financial condition. The company will not update these forward-looking statements after the date of this news release. Some forward- looking statements discuss the company's plans, strategies, expectations and intentions. They use words such as “expects,” “may,” “will,” “believes,” “should,” “approximately,” “anticipates,” “estimates,” and “plans.” In addition, these words may use the positive or negativ e or other variations of those and similar words. This presentation contains forward-looking statements regarding the company's expectations during the second quarter of 2015, including with respect to: earnings; log realizations and dispositions of non-strategic timberlands in Timberlands; sales volumes across Wood Products product lines, log and manufacturing costs and expected realizations for lumber and oriented strand board in Wood Products; and, maintenance and capital costs, and realizations for pulp in Cellulose Fibers. Major risks, uncertainties and assumptions that affect the company's businesses and may cause actual results to differ from these forward-looking statements, include, but are not limited to: • the effect of general economic conditions, including employment rates, housing starts, interest rate levels, availability of financing for home mortgages, and strength of the U.S. dollar; • market demand for the company's products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions; • performance of the company's manufacturing operations, including maintenance requirements; • the level of competition from domestic and foreign producers; • the successful execution of internal performance plans, including restructurings and cost reduction initiatives; • raw material prices; • energy prices; • the effect of weather; • the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters; • transportation availability and costs; • federal tax policies; • the effect of forestry, land use, environmental and other governmental regulations; • legal proceedings; • performance of pension fund investments and related derivatives; • the effect of timing of retirements and changes in the market price of company stock on charges for stock-based compensation; • changes in accounting principles; and • other factors described in the company's filings with the SEC, including the "Risk Factors" section in the company's annual report on Form 10-K for the year ended December 31, 2014. The company also is a large exporter and is affected by changes in economic activity in Europe and Asia, particularly Japan and China. It is affected by changes in currency exchange rates, particularly the relative value of the U.S. dollar to the euro, yen and the Canadian dollar, and the relative value of the euro and the yen. Restrictions on international trade or tariffs imposed on imports and disruptions in shipping and transportation also may affect the company. 2 05/01/2015
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 3 05/01/2015
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 Net sales $ 1,788 $ 1,721 Timberlands $ 143 $ 162 $ 19 Wood Products 56 62 6 Cost of products sold 1,399 1,385 Cellulose Fibers 87 33 (54 ) Gross margin 389 336 Unallocated Items (13 ) (41 ) (28 ) SG&A expenses 118 102 Total Contribution to Earnings Other (income) expense, net 2 (2 ) 18 $ 273 $ 216 $ (57 ) Before Special Items Total Contribution to Earnings Before $ 273 $ 216 Special Items Adjusted EBITDA 1 $ 376 $ 333 $ (43 ) Interest expense, net 3 (90 ) (83 ) Income taxes 4 (27 ) (23 ) 1. A reconciliation to GAAP is set forth on Chart 17. Dividends on preference shares (11 ) (11 ) 2. Other (income) expense, net includes: R&D expense, charges for Net Earnings to Common Shareholders restructuring, closures and impairments; other operating income, net; $ 145 $ 99 Before Special Items 5 interest income and other. Interest income and other includes approximately $8 million of income from special purpose entity (SPE) Special items, after-tax 21 (9 ) investments for each quarter presented. 3. Interest expense is net of capitalized interest and includes Net Earnings to Common Shareholders $ 166 $ 90 approximately $7 million of expense on special purpose entity (SPE) notes for each quarter presented. Diluted EPS Before Special Items 5 $ 0.27 $ 0.19 4. Income taxes attributable to special items are included in Special items, Diluted EPS $ 0.31 $ 0.17 after-tax. An explanation is set forth on Chart 2. 5. A reconciliation to GAAP is set forth on Chart 2. 4 05/01/2015
EARNINGS BEFORE SPECIAL ITEMS Chart 2 $ Millions EXCEPT EPS 2014 Q4 2015 Q1 Pre-Tax After-Tax Diluted Pre-Tax After-Tax Diluted Earnings 6 Earnings EPS Earnings 6 Earnings EPS Earnings Before Special Items $ 183 $ 145 $ 0.27 $ 133 $ 99 $ 0.19 Special Items: — — — Gain on postretirement plan amendment 38 25 0.05 Restructuring, impairments, and other charges 7 (7 ) (4 ) (0.01 ) (13 ) (9 ) (0.02 ) Total Special Items 31 21 0.04 (13 ) (9 ) (0.02 ) Earnings Including Special Items (GAAP) $ 214 $ 166 $ 0.31 $ 120 $ 90 $ 0.17 6. Earnings before income taxes and dividends on preference shares. 7. 2015 Q1 includes a noncash impairment charge related to a nonstrategic asset. 2014 Q4 includes restructuring charges related to the SG&A cost reduction initiative announced during 2013 Q4. 5 05/01/2015
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 products sold 336 316 Gross margin 162 176 • Seasonally lower fee harvest SG&A expenses 25 23 volumes and silviculture expenses in the South Other income, net 9 (6 ) (9 ) Contribution to Earnings $ 143 $ 162 • Higher earnings from the disposition Adjusted EBITDA 10 $ 196 $ 215 of nonstrategic timberlands Gross Margin Percentage 11 33 % 36 % Operating Margin Percentage 12 29 % 33 % 8. Amounts presented exclude Canadian Forestlands operations, which are operated as a cost center for the purpose of supplying Weyerhaeuser's Canadian manufacturing facilities and contribute no margin to the Timberlands segment. 9. Other income, net includes: R&D expense, charges for restructuring, closures and impairments; other operating income, net; interest income and other. 10. A reconciliation to GAAP is set forth on Chart 18. 11. Gross margin divided by total sales. 12. Contribution to earnings divided by total sales. 6 05/01/2015
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
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
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