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| 8-K - FORM 8-K - WEYERHAEUSER CO | d8k.htm |
 WEYERHAEUSER COMPANY
UBS Global Paper and Forest Products Conference
September 14, 2010
Exhibit 99.1 |
 2
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
accurate
because
of
risks
and
uncertainties
surrounding
these
assumptions.
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
presentation.
Some
forward-looking
statements
discuss
the
company’s
plans,
strategies
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
negative
or
other
variations
of
those
terms.
This
presentation
contains
forward-looking
statements
regarding
the
company’s
expectations,
including
operating
values
from
timberlands,
returns
from
silviculture
practices,
effects
of
scale
on
timberlands
operating
costs,
expected
timber
harvests
and
demand
for
logs,
demand
for
biomass,
environmental
benefits,
growth
of
land
ownership
and
management,
and
sources
of
additional
values
in
our
Timberlands
segment;
demand
for
saw
timber,
Canadian
timber
supplies,
cash
flows
from
increased
volumes
and
improved
mix,
and
capacity
and
costs
in
the
Wood
Products
segment;
demand
for
fluff
pulp,
manufacturing
capabilities
and
cost
reductions
in
the
Cellulose
Fiber
segment;
increases
in
housing
starts
in
our
single-
family
homebuilding
operations;
and
the
benefits
of
REIT
conversion.
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 the level of interest
rates, availability of financing for home mortgages, strength of the U.S.
dollar, employment rates and housing starts;
market
demand
for
the
company’s
products,
which
is
related
to
the
strength
of
the
various
U.S.
business
segments
and
economic
conditions;
the successful execution of internal performance plans, including
restructurings and cost reduction initiatives; performance of the
company’s manufacturing operations, including maintenance requirements and operating efficiencies;
raw material, transportation and energy prices;
changes in the Company’s business support functions and support
costs; changes in legislation or tax rules;
the level of competition from domestic and foreign producers;
the effect of forestry, land use, environmental and other governmental
regulations; legal proceedings;
the risk of loss from fires, floods, windstorms, hurricanes, pest infestation
and other natural disasters; changes in accounting principles; and
other
factors
described
under
“Risk
Factors”
in
the
Company’s
annual
report
on
Form
10-K.
The company also is a large exporter and is affected by changes in economic
activity in Europe and Asia, particularly Japan, China and Korea. It
also is affected by changes in currency exchange rates, particularly the
relative value of the U.S. dollar to the euro and the Canadian dollar.
Restrictions on international trade or tariffs imposed on imports also may
affect the company. |
 Dan Fulton
President and Chief Executive Officer |
 4
Reasons to Own Weyerhaeuser
Valuable timberland holdings
Leader in adding and extracting value from timberlands
Uniquely positioned to benefit from the recovery
Focused on returning value to shareholders
Timberland-focused strategy
optimized by REIT structure |
 5
Timberland Asset
Over 6.5 million acres of timberlands
Over 7 million acres of mineral rights
Does not include 15.2 million acres of forestland under license in
Canada Timberlands
Acres (000)
%
US West
US South
Uruguay
China JV
Total
Core
1,850
3,720
341
45
5,956
90.7%
Non-Core
213
394
-
-
607
9.3%
TOTAL
2,063
4,114
341
45
6,563
100% |
 6
Timberland Strategy
Generate high returns on sustainably managed forests
Timberland focused on saw timber –
generates the
highest operating values
Proprietary silviculture practices generate highest return
from timberland
Scale operations create cost advantage
Capture additional value from timberlands
(minerals, oil & gas, environmental benefits)
Grow timberland holdings |
 7
Positive Outlook for US Timber Values
Saw timber demand expected to grow
Driven by housing starts returning to trend
Shortfall in future Canadian harvest due to
pine beetle infestation
Canada has historically provided approximately
one third of US lumber supply
Export market remains strong and likely to expand
|
 8
Weyerhaeuser Positioned to Capture Benefits
Harvest expected to increase 71% (2009 –
2019)
US will rise 60%; international to increase 4-fold
Cash flow driven by increased harvest volume,
mix and price recovery
Weyerhaeuser Global Fee Harvest Volume
0
5
10
15
20
25
30
35
0
1
2
3
4
5
6
7
8
9
International
North America
Fee Acres Owned |
 9
Weyerhaeuser Positioned to Capitalize on
Attractive Timberland Outlook
Attractive outlook
US trend log demand exceeds domestic supply
International demand for logs increasing
Demand is increasing for biomass and environmental solutions
from the forest
Weyerhaeuser well positioned
Saw timber focused
Proprietary silviculture practices result in greater productivity
and margin
Scale and logistics provide cost advantage
Export log market capability
Additional value from minerals, oil & gas, environmental benefits
Recognized for sustainable management |
 10
Recognized Leader in Sustainability |
 11
2009 Net Sales of $2.2 Billion
Wood Products |
   12
Cellulose Fibers
42%
20%
19%
14%
5%
Fluff Pulp for Disposable
Hygiene Products
Pulp for Premium Towel &
Tissue
Liquid Packaging
Board
Specialty Chemical Cellulose
Pulp
Other Products
2009 Net Sales of $1.5 Billion |
 13
WRECO (Weyerhaeuser Real Estate Co.)
2009 Net Sales of $900 million |
 Patty Bedient
Executive Vice President and
Chief Financial Officer |
 15
REIT structure best supports strategic direction
Benefit to the Company
Qualified earnings distributed to shareholders not taxed
at corporate level
Benefit to shareholders
Most dividends to shareholders taxed at capital gains rate
Benefits of REIT Conversion |
 16
Changed legal structure
Moved non-qualifying business activities to
taxable REIT subsidiary (TRS)
Met REIT tests
Distributed special dividend
Final step: Elect REIT status on 2010 tax return
Completion of Steps for REIT Conversion |
 17
Special Dividend Summary
$5.6 billion special dividend paid on September 1
$560 million in cash distributed
324.3 million common shares issued
535.9 million total common shares now outstanding
Shareholders who elected cash received
over 15% of the dividend in cash |
 18
Third Quarter Accounting Impact of
Special Dividend Distribution
Changes to balance sheet
Cash reduced by $560 million
Deferred tax liability reduced by approximately $1.0 billion
Shareholders’
equity increased by $440 million
Changes to income statement
Tax benefit of $1.0 billion, as a result of the elimination
of deferred taxes
2010 income tax expense recalculated to reflect REIT treatment
Stock portion of E&P dividend treated as share issuance,
and EPS will be adjusted on a prospective basis |
 19
Substantial Near-Term Liquidity
Cash Balance After
$1.3 billion
Special Dividend
Bank Revolving Credit Facility
$1.0 billion
(Expires 12/2011)
Total Debt (9/1/2010)
$5.1 billion
2010
2011
2012
2013
2014
2017-2033
$40
$30
$ 732
$433
$15
$3,891
Debt Maturity Schedule ($ millions) |
 20
Post REIT Conversion Dividend Considerations
Macroeconomic climate
Earning potential of the company
Target capital structure
Appropriate debt levels
Long term liquidity
Maintaining access to capital
Affordability
Future growth opportunities
Guidance to be provided in December 2010 |
 Dan Fulton
President and Chief Executive Officer |
 22
Reasons to Own Weyerhaeuser
Valuable timberland holdings
Leader in adding and extracting value from timberlands
Uniquely positioned to benefit from the recovery
Focused on returning value to shareholders
Timberland-focused strategy
optimized by REIT structure |
 |