1 / 41

Deltic Timber Corporation

Deltic Timber Corporation. Annual Meeting – April 27, 2006. Forward-Looking Statements.

bernad
Download Presentation

Deltic Timber Corporation

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Deltic Timber Corporation Annual Meeting – April 27, 2006

  2. Forward-Looking Statements This presentation contains forward-looking statements. Such statements can be identified by the use of words such as “believes”, “expects”, “may”, “will”, “should”, “plans”, “intends”, “estimates”, or “anticipates”, and other comparable terminology. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those described in the forward-looking statements. These factors are discussed in greater detail in the Company’s Form 10-K as filed with the Securities Exchange Commission.

  3. 900 750 600 450 300 150 - 132% increase Dollar (millions) March 31, 2006 March 31, 1997 Market capitalization plus long-term debt, less cash and cash equivalents Enterprise Value

  4. $65.00 $55.00 $45.00 $35.00 $25.00 $15.00 01/02/97 12/31/98 12/31/00 12/31/02 12/31/04 3/31/06 Deltic Timber Share Price(NYSE – DEL)

  5. 350% 300% 250% 200% 150% 100% 50% 0% DEL Russell 2000 S&P 500 Paper & Forest Products S&P 500 Dividends reinvested Shareholder Return(1/1/1997 – 3/31/2006)

  6. Value of Landand Timber Ownership • Consistent earnings and cash flows • Integration with sawmills • Higher and better use potential • Hunting lease and oil & gas income

  7. 450 28% increase 400 Acres (thousands) 350 300 250 January 1, 1997 December 31, 2005 TimberlandOwnership

  8. Pine plantations 156,200 Hardwood forest 23,500 Other 41,900 Pine Forest 216,100 Timberland ProfileDecember 31, 2005 437,700 Acres

  9. 12 11 10 Tons (millions) 9 8 1997 1998 1999 2000 2001 2002 2003 2004 2005 Pine Sawtimber Inventory

  10. 4,000/acre 6,000/acre Thornburg 10,000/acre Hwy 9 Lake Maumelle 14.5 miles 21,200/acre 15,700/acre Ferguson Ranch Paron 39,000/acre 31,000/acre 235,000/acre Hwy 10 211,000/acre 9,000/acre 6,000/acre Chenal Pkwy Kanis Rd 41,000/acre 27,500/acre 13,000/acre 27,700/acre 15,000/acre 34,500/acre 21.5 miles Chenal Valley Comparable Sales Deltic Timberland (Approx. 58,000 acres) Deltic Sales Potential Higher and Better Use Lands

  11. 2,500 54% Increase 2,000 1,500 Dollars (thousands) 1,000 500 - 2005 2002 2003 2004 Hunting Lease andOil & Gas Income

  12. Generalized Boundary of Fayetteville Shale Play Surface Acres Owned: 0-5,000 5,000-10,000 10,000-15,000 15,000-20,000 >20,000 Deltic Timberlands Near the Fayetteville Shale Area

  13. Net Sales Operating Income 24 36 22 34 Dollars (millions) Dollars (millions) 20 32 18 30 16 28 2005 2004 2004 2005 Woodlands SegmentNet Sales and Operating Income

  14. Value of ManufacturingOperations • Value added to timberland ownership Logs must be converted into lumber Hedge against lower stumpage prices • Generally provides positive cash flow

  15. 450 425 400 375 350 325 300 275 250 $ per MBF 1Q99 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 Composite lumber price Trend line Source: RandomLengths Six-year average manufacturing cost of comparable mills Composite Lumber Price

  16. 18% increase 2005 2002 2003 2004 Average Log Cost 60 55 50 45 40 Dollars per ton

  17. Ola Mill ($6.5 million) J-hook sorter system Unscrambler & trimmer Trimmer optimizer Planermill tilt hoist Automated grading system Sawmill breakdown modification Waldo Mill ($12.4 million) J-hook sorter system Curve-sawing gang Third boiler Upgrade kilns Automated grading system Step feeder Mill ModernizationProjects (2003 – 2005)

  18. 40,000 36,000 32,000 28,000 24,000 44% increase 29% Increase Board Feet per Hour 2005 2006E 2002 2003 2004 Hourly Production Rate

  19. 325 300 275 250 225 200 175 53% Increase Million Board Feet 2002 2003 2004 2005 2006E Annual LumberProduction

  20. 4.35 4.30 4.25 4.20 4.15 Tons per MBF 2003 2004 2005 2006E Lumber RecoveryRatio(Tons of Logs Used to Produce each MBF of Lumber)

  21. Net Sales Operating Income 130 115 100 85 70 7 6 5 4 3 Dollars (millions) Dollars (millions) 2004 2005 2005 2004 Mills SegmentNet Sales and Operating Income

  22. Value of Real EstateDevelopment Prime example of higher and better use land Natural diversification for a timber company • Consistently generates income Attracts a broader class of shareholders

  23. 7.50% 7.00% 6.50% 6.00% 5.50% 5.00% Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Dec- 02 02 03 03 04 04 05 05 06 06E Source: Freddie Mac and National Association of Realtors Trend line Mortgage interest rate Mortgage Interest Rates30-Year Fixed Rate Mortgage

  24. U.S. Housing Starts 2.10 2.00 1.90 1.80 1.70 1.60 1.50 Units (millions) 2005 2006E 2003 2004 2002 Source: U.S. Bureau of the Census (Construction Reports) and National Association of Realtors

  25. 300 250 200 150 100 50 0 Lots 2005 2006E 2003 2004 2002 Residential Lot Sales

  26. 100,000 90,000 80,000 70,000 60,000 Dollars 2005 2006E 2003 2004 2002 Residential Lot Prices(Average per lot)

  27. 80 60 40 20 0 Acres 2005 2006E 2003 2004 2002 Commercial Acreage Sales

  28. 1,000 800 600 400 200 - Dollars (thousands) 2005 2006E 2002 2004 2003 CommercialAcreage Prices(Average per Acre)

  29. Chenal ValleyDevelopment (December 31, 2005) Commercial Residential 16 272 264 1.914 2,314 470 4,500 Lots* 750 Acres* Undeveloped Sold Developed/Unsold * Approximate

  30. RED Development Site Existing Commercial Village at Rahling Road Bank Site Future Commercial RED Development Area Chenal Valley Little Rock, Arkansas (15 Acres) Bank Site Village At Rahling Road Future Commercial (125 Acres) Promenade At Chenal GMAC

  31. Net Sales Operating Income 33 32 31 30 29 11 10 9 8 7 Dollars (millions) Dollars (millions) 2004 2005 2005 2004 Real Estate SegmentNet Sales and Operating Income

  32. 12 4 (4) (12) (20) Dollars (millions) 2005 2003 2004 2002 Operating Results Cash Flow Del-Tin FiberFinancial Performance

  33. 175 150 125 100 19% increase 5.3% increase Dollars (millions) 29% increase 2002 2003 2004 2005 Consolidated Net Sales

  34. 15 10 5 - (5) 31% increase 35% increase Dollars (millions) 2002* 2005 2003 2004 * Excludes write-off of Deltic’s investment in Del-Tin Fiber of $11.4 million net of income tax impact Consolidated Net Income

  35. 45 40 35 30 25 20 Dollars (millions) 2005 2003 2004 2002 Cash Flow Capital Expenditures Cash Flow versusCapital Expenditures

  36. Corporate 1% Woodlands 18% Real Estate 59% Mills 22% Capital Expenditures 2006 Budget

  37. 120 100 80 60 $29.4 million decrease $11.2 million decrease $3.5 million decrease Dollars (millions) 12/31/2002 12/31/2003 12/31/2004 12/31/2005 3/31/2006 Long-Term Debt

  38. 75% 50% 25% 0% DEL LPX PCH GEF TIN WY LFB PCL GP IP POP Debt to Capital EmployedDecember 31, 2005

  39. Net Sales Net Income 42 4.0 3.0 2.0 1.0 - 41 Dollars (millions) Dollars (millions) 40 39 38 1Q2005 1Q2006 1Q2005 1Q2006 First QuarterFinancial Results

More Related