Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q2 2021 Earnings Presentation
27 slides from Weyerhaeuser's earnings presentation, Jul 30, 2021
Slide 1: Weyerhaeuser Earnings Results Second Quarter 2021
2021 WEYERHAEUSER EARNINGS RESULTS SECOND QUARTER 2021 | July 30, 2021
Slide 2: Forward-Looking Statements
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 including, but not limited to, with respect to: future quarterly cas
Slide 3: 2021 Q2 Consolidated Results
2021 Q2 CONSOLIDATED RESULTS $ Millions 2021 2021 $ Millions (except EPS) 2021 2021 Adjusted EBITDA Q1 Q2 Change Consolidated Statement of Operations Q1 Q2 Timberlands $ 172 $ 180 $ 8 Net sales $ 2,506 $ 3,144 Real Estate, Energy & Natural Resources 96 91 (5) Costs of sales 1,430 1,583 Wood Products
Slide 4: Adjusted EBITDA
ADJUSTED EBITDA1 TOTAL COMPANY2 REAL ESTATE & ENR $150 $1,650 $1,573 $ Millions $101 $96 $100 $91 $1,320 $ Millions $1,101 $990 $57 $60 $745 $657 $50 $660 $23 $413 $386 $330 $0 Q1.20 Q2.20 Q3.20 Q4.20 Q1.21 Q2.21 $0 Real Estate $ 86 42 44 4 76 66 Q1.20 Q2.20 Q3.20 Q4.20 Q1.21 Q2.21 ENR $ 15 15 16 19
Slide 5: Timberlands Segment
TIMBERLANDS SEGMENT TIMBERLANDS ($ Millions) 2021 2021 TIMBERLANDS ($ Millions) 2021 2021 Adjusted EBITDA by Region Q1 Q2 Segment Statement of Operations Q1 Q2 West $ 101 $ 103 Third-party sales $ 379 $ 405 South 69 76 Intersegment sales 134 136 North 3 2 Total Sales 513 541 Other (1) (1) Costs of s
Slide 6: Timberlands Key Drivers: 2021 Q2 vs. 2021 Q1
TIMBERLANDS KEY DRIVERS: 2021 Q2 vs. 2021 Q1 REGION KEY DRIVERS WEST • Fee Harvest Volumes: Comparable, continued salvage operations • Export Sales Volumes: Modestly higher, particularly to China • Export Sales Realizations: Significantly higher in all markets • Forestry and Road Costs: Seasonally h
Slide 7: Sales Volumes, Realizations and Export Revenue
SALES VOLUMES, REALIZATIONS AND EXPORT REVENUE 3rd-Party Log Sales and Realizations - West1 3rd-Party Log Sales and Realizations - South 3,000 $137.80 $150 $130.69 7,000 $35.11 $40 $124.37 $34.27 $33.68 $33.68 $33.69 $34.50 Volum es (Thousands of tons) Volum es (Thousands of tons) 2,400 $104.91 $104
Slide 8: Fee Harvest Volumes and Intersegment Sales Volumes
FEE HARVEST VOLUMES AND INTERSEGMENT SALES VOLUMES FEE HARVEST VOLUMES INTERSEGMENT LOG SALES VOLUMES 7,500 1,800 6,130 5,914 5,856 6,250 5,596 5,509 1,500 1,331 5,376 1,307 1,220 1,263 Thousands of tons Thousands of tons 1,127 5,000 1,200 1,076 3,750 900 720 737 761 741 646 652 2,310 2,236 2,085 2,
Slide 9: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & NATURAL RESOURCES (ENR) SEGMENT REAL ESTATE & ENR ($ Millions) 2021 2021 REAL ESTATE & ENR ($ Millions) 2021 2021 Adjusted EBITDA by Business Q1 Q2 Segment Statement of Operations Q1 Q2 Real Estate $ 76 $ 66 Total sales $ 106 $ 110 Energy & Natural Resources 20 25 Costs of sale
Slide 10: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & NATURAL RESOURCES (ENR) SEGMENT ACRES SOLD AVERAGE PRICE PER ACRE 60 $7,000 $6,316 45 $5,700 45 Price per acre Acres (thousands) 35 $4,400 31 30 $3,227 $3,803 $3,100 19 18 $1,992 15 $1,800 $1,501 1 $1,381 0 $500 Q1.20 Q2.20 Q3.20 Q4.20 Q1.21 Q2.21 Q1.20 Q2.20 Q3.20 Q4.20 Q1.21
Slide 11: Wood Products Segment
WOOD PRODUCTS SEGMENT WOOD PRODUCTS ($ Millions) 2021 2021 WOOD PRODUCTS ($ Millions) 2021 2021 Adjusted EBITDA by Business Q1 Q2 Segment Statement of Operations Q1 Q2 Lumber $ 513 $ 804 Total sales $ 2,021 $ 2,629 OSB 300 472 Costs of sales 1,124 1,229 Engineered Wood Products 42 53 Gross margin 89
Slide 12: Wood Products Key Drivers: 2021 Q2 vs. 2021 Q1
WOOD PRODUCTS KEY DRIVERS: 2021 Q2 vs. 2021 Q1 BUSINESS KEY DRIVERS LUMBER • Sales Volumes: Increased moderately, home center takeaway lower than expected • Sales Realizations: Increased 25% • Production Volumes: Increased slightly • Log Costs: Increased slightly, primarily for Canadian logs ORIENTE
Slide 13: Third-Party Sales Volumes and Realizations
THIRD-PARTY SALES VOLUMES AND REALIZATIONS1 Lumber $1,077 OSB $911 4,500 $1,100 5,000 $950 $864 Volumes (Millions of Board Ft.) Volumes (Millions of Square Ft.) 3,600 $880 Realizations ($/MBF) Realizations ($/M 3/8") 4,000 $760 $674 $614 $609 2,700 $660 $503 3,000 $570 $416 $438 $395 1,800 $440 2,00
Slide 14: Unallocated Items
UNALLOCATED ITEMS UNALLOCATED ITEMS ($ Millions)1 2021 2021 UNALLOCATED ITEMS ($ Millions)1 2021 2021 Q1 Q2 Q1 Q2 Unallocated corporate function expenses and variable Costs of sales 3 $ (23) $ (42) $ (25) $ (36) compensation expense G&A expense 4 (26) (31) Liability classified share-based compensati
Slide 15: Financial Items
FINANCIAL ITEMS Cash Flow from Operations KEY FINANCIAL METRICS ($ Millions) 2021 2021 $1,500 $1,308 Q1 Q2 $1,200 Ending Cash Balance $ 1,016 $ 1,777 $900 $ Millions $698 $608 Total Debt1 $ 5,475 $ 5,250 $600 $391 2 Net Debt to Adjusted EBITDA (LTM) 1.5 0.9 $300 $86 $444 Net Debt to Enterprise Value
Slide 16: Adjusted Funds Available for Distribution
ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION1 ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION ($ Millions) 2021 Q2 Q2 YTD TARGETED RETURN OF CASH Net Cash from Operations $ 1,308 $ 2,006 TO SHAREHOLDERS Capital Expenditures 2 (72) (125) Calculated on an Annual Basis Adjustments to FAD — — Adjusted Funds Avai
Slide 17: Outlook: 2021 Q3 vs. 2021 Q2
OUTLOOK: 2021 Q3 vs. 2021 Q2 EXPECTED EARNINGS SEGMENT KEY DRIVERS & ADJUSTED EBITDA TIMBERLANDS Significantly lower than West South North 2021 Q2 Fee Harvest Volumes: Fee Harvest Volumes: Fee Harvest Volumes: Slightly lower Significantly higher Significantly higher, coming out of Sales Realizations
Slide 18: 2021 Outlook: Update
2021 OUTLOOK: UPDATE DRIVER UPDATED 2021 OUTLOOK PRIOR 2021 OUTLOOK Approximately 34.5 million tons: • South: Approximately 10% higher than 2020 FEE HARVEST VOLUME Unchanged • West: Approximately 5% lower than 2020, attributable to Oregon salvage activity • North: Moderately lower than 2020 REAL EST
Slide 19: Earnings Summary
EARNINGS SUMMARY $ Millions (except EPS) 2020 2021 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Q2 Timberlands $ 173 $ 140 $ 130 $ 167 $ 172 $ 180 Real Estate, Energy & Natural Resources 101 57 60 23 96 91 Wood Products 184 198 615 530 889 1,386 Unallocated Items (45) (9) (60) (63) (56) (84) Total Adju
Slide 20: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Diluted EPS Before Special Items $ 0.18 $ 0.11 $ 0.52 $ 0.48 $ 0.91 $ 1.37 Special Items: Pension settlement charge — — — (0.26) — — Early extinguishment of debt charges — (0.02) (0.03) (0.07) — — Legal benefit 0.02 — — — — — Product reme
Slide 21: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION By Segment $ Millions 2018 2019 2020 2021 FY FY Q1 Q2 Q3 Q4 FY Q1 Q2 LTM Timberlands $ 902 $ 680 $ 173 $ 140 $ 130 $ 167 $ 610 $ 172 $ 180 $ 649 Real Estate & ENR 264 274 101 57 60 23 241 96 91 270 Wood Products 987 476 184 198 615 530 1,527 889 1,386 3,420 Unallocated
Slide 22: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION Timberlands $ Millions 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 West $ 93 $ 73 $ 72 $ 102 $ 101 $ 103 South 78 70 62 64 69 76 North 3 (1) — 2 3 2 Other (1) (2) (4) (1) (1) (1) Total Timberlands Adjusted EBITDA 1 $ 173 $ 140 $ 130 $ 167 $ 172 $ 180 West (28) (27) (25) (26) (28) (28)
Slide 23: Adjusted EBITDA Reconciliation: Real Estate, ENR
ADJUSTED EBITDA RECONCILIATION Real Estate, Energy & Natural Resources $ Millions 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Real Estate $ 86 $ 42 $ 44 $ 4 $ 76 $ 66 Energy & Natural Resources 15 15 16 19 20 25 Total Real Estate & ENR Adjusted EBITDA 1 $ 101 $ 57 $ 60 $ 23 $ 96 $ 91 Depletion, depreciation & amort
Slide 24: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION Wood Products $ Millions 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Lumber $ 79 $ 103 $ 363 $ 254 $ 513 $ 804 OSB 45 41 160 220 300 472 EWP 51 42 58 37 42 53 Distribution 12 13 37 24 39 75 Other (3) (1) (3) (5) (5) (18) 1, 2 Total Wood Products Adjusted EBITDA $ 184 $ 198 $ 615 $ 530
Slide 25: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION Unallocated $ Millions 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 1 Total Unallocated Adjusted EBITDA $ (45) $ (9) $ (60) $ (63) $ (56) $ (84) Total depletion, depreciation & amortization (2) (1) (2) (1) (2) (1) Special items included in operating income (loss) 12 — — — — — Operating
Slide 26: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA RECONCILIATION $ Millions 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 1,2 Net Debt to Adjusted EBITDA (LTM) 4.5 4.1 2.9 2.3 1.5 0.9 Total debt $ 7,426 $ 6,299 $ 5,974 $ 5,475 $ 5,475 $ 5,250 Less: cash and cash equivalents 1,458 643 787 495 1,016 1,777 Net Debt $ 5,968 $ 5,656 $ 5,187 $
Slide 27: Funds Available for Distribution Reconciliation
FUNDS AVAILABLE FOR DISTRIBUTION RECONCILIATION ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION ($ Millions) 2018 2019 2020 2021 FY FY FY Q1 Q2 YTD Net Cash from Operations $ 1,112 $ 966 $ 1,529 $ 698 $ 1,308 $ 2,006 Capital Expenditures (427) (384) (281) (53) (72) (125) 1 Funds Available for Distribution