Weyerhaeuser Co. (NYSE:WY) Q4 2014 Earnings Conference Call - Final Transcript

Jan 30, 2015 • 10:00 am ET

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Weyerhaeuser Co. (NYSE:WY) Q4 2014 Earnings Conference Call - Final Transcript

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Q & A
Operator
operator

(Operator Instructions) Mark Wilde, BMO Capital Markets.

Analyst
Mark Wilde

I wondered, if the two of you could talk a little bit about the impact of FX move across your overall portfolio, you made a couple of references to this in the commentary already this morning.

Executive
Doyle Simons

So, Mark let me talk generally about the effect of the stronger dollar across our businesses and then, Patty to fill in any of the details, but just generally you know stronger dollars generally is not a positive for Weyerhaeuser in terms of Japanese logs, what we seen is the demand is not been affected by the strong dollar as I referenced and Patty referenced in our comment, but if it continues, it could have potentially affect our price.

In terms of Chinese logs, what's happened there, weak Rouble is making Russian logs less expensive than U.S. logs that of course reduces the price that the Chinese are willing to pay. Now with that said, as you very well know there is a practical limit on just how much Russia can provide

Executive
Unidentified Speaker

and the other thing, we are at prices are not at desirable levels. We are able to redirect some of our logs to domestic markets there, in those domestic markets are holding up very well. In terms of wood products, the Canadian lumber mills are benefitting from the higher margins on shipments to the U.S. overall and then on Cellulose fibers as Patty alluded to the strong dollar at this point is not effected demand, but we do anticipate lower prices due to considerable pressure from Fluff pulp's customer primarily in Europe and currently India's K prices are under some pressure.

So that's kind of the big picture impact of what's happening because of the stronger dollar.

Executive
Patty Bedient

Sure, the only other thing that I would add, I think Doyle really went through all of the businesses, I would just call your attention to Chart 11 that I talked to in my comments and you notice there, that there is an FX loss both in the third quarter and the fourth quarter, that's really a function of U.S. Dollar denominated debt that it held by our Canadian subsidiaries. So as the Canadian Dollar depreciates as it did, again the fourth quarter that takes more Canadian Dollar pay off that loan, so that's what generates both of that loss there.

Now as you look forward into Q1, the Canadian Dollar to-date, I think has depreciated even more than it did in the fourth quarter, but that would be driven ultimately by whatever the exchange rate as of the end of the quarter.

Analyst
Mark Wilde

Okay and Patty if I could ask just one follow-on, I wondered if you could talk a little bit about sort of that big cash position you're sitting on, at the rationale for holding so much and kind of tied with that, how you think about the completing the remaining share repurchase authorization, you have about $500 million out there, yet.

Executive
Patty Bedient

Yes, so we are very