Slide 1: Weyerhaeuser Earnings Results 2nd Quarter 2019
Pro Forma Draft - 3.26.2019 WEYERHAEUSER EARNINGS RESULTS 2ND QUARTER 2019 | July 26, 2019
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains statements and depictions that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, without limitation, with respect to future earnings, Adjusted EBITDA for each
Slide 3: 2019 Q2 Consolidated Results
2019 Q2 CONSOLIDATED RESULTS Chart 1 $ Millions 2019 2019 $ Millions (except EPS) 2019 2019 Adjusted EBITDA Q1 Q2 Change Consolidated Statement of Operations Q1 Q2 Before Special Items Timberlands $ 193 $ 175 $ (18) Net sales $ 1,643 $ 1,692 Real Estate, Energy & Natural 106 71 (35) Resources Costs
Slide 4: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS Chart 2 $ Millions (except EPS) 2019 Q1 2019 Q2 Pretax After-Tax Diluted Pretax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 94 $ 80 $ 0.11 $ 85 $ 123 $ 0.16 Special Items: Pension settlement charges1 (455) (345) (0.47) 6
Slide 5: Adjusted EBITDA
ADJUSTED EBITDA1 Chart 3 Total Company2 Real Estate & ENR $800 $150 $637 $ Millions $106 $ Millions $600 $544 $505 $100 $86 $90 $365 $71 $400 $346 $343 $41 $47 $50 $200 $0 $0 Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2.19 Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2.19 Real Estate 27 30 68 71 87 51 ENR 14 17 18 19 19 20 T
Slide 6: Timberlands Segment
TIMBERLANDS SEGMENT Chart 4 TIMBERLANDS ($ Millions) 2019 2019 TIMBERLANDS ($ Millions) 2019 2019 Adjusted EBITDA by Region Q1 Q2 Segment Statement of Operations Q1 Q2 West $ 97 $ 89 Third-party sales $ 431 $ 401 South 90 86 Intersegment sales 125 131 North 7 1 Total Sales 556 532 Other (1) (1) Cost
Slide 7: Sales Volumes, Realizations and Export Revenue
SALES VOLUMES, Chart 5 REALIZATIONS AND EXPORT REVENUE 3rd-Party Log Sales and Realizations - West1 3rd-Party Log Sales and Realizations - South 3,600 $131.59 $132.24 $150 7,000 $35.35 $35.45 $40 $125.67 $34.83 $34.55 $34.88 $34.38 Volumes (Thousands of tons) Volumes (Thousands of tons) 3,000 $112.5
Slide 8: Fee Harvest Volume and Intersegment Sales Volume
FEE HARVEST VOLUME Chart 6 AND INTERSEGMENT SALES VOLUME Fee Harvest Volume Intersegment Log Sales Volume 7,500 6,751 6,849 2,000 6,630 6,478 6,492 6,367 6,250 1,526 1,474 1,515 Thousands of tons 1,600 1,433 1,421 Thousands of tons 1,340 5,000 1,200 3,750 2,443 2,463 2,455 661 712 2,360 2,305 2,385
Slide 9: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & Chart 7 NATURAL RESOURCES (ENR) SEGMENT Real Estate & ENR ($ Millions) 2019 2019 Real Estate & ENR ($ Millions) 2019 2019 Adjusted EBITDA by Business Q1 Q2 Segment Statement of Operations Q1 Q2 Real Estate $ 87 $ 51 Total sales $ 118 $ 81 Energy & Natural Resources 19 20 Costs
Slide 10: Real Estate, Energy & Natural Resources (ENR) Segment: Acres Sold
REAL ESTATE, ENERGY & Chart 8 NATURAL RESOURCES (ENR) SEGMENT Acres Sold Average Price per Acre 75 $3,000 62 $2,479 $2,424 $2,500 $2,258 60 Acres (thousands) 47 Price per acre $2,000 45 39 32 $1,500 30 $1,539 22 $1,000 $1,209 16 $1,063 15 $500 0 $0 Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2.19 Q1.18 Q2.18 Q3.
Slide 11: Wood Products Segment
WOOD PRODUCTS SEGMENT Chart 9 WOOD PRODUCTS ($ Millions) 2019 2019 WOOD PRODUCTS ($ Millions) 2019 2019 Adjusted EBITDA by Business Q1 Q2 Segment Statement of Operations Q1 Q2 Lumber $ 47 $ 44 Total sales $ 1,094 $ 1,210 OSB 19 8 Costs of sales 967 1,070 Engineered Wood Products 47 64 Gross margin 1
Slide 12: 3rd-Party Sales Volumes and Realizations
3RD-PARTY SALES VOLUMES AND Chart 10 REALIZATIONS1 Lumber OSB 2,400 $541 $600 2,000 $367 $400 $498 $491 Volumes (Millions of Square Ft.) Volumes (Millions of Board Ft.) $314 $321 2,000 Realizations ($/M 3/8") Realizations ($/MBF) $388 $392 $388 $450 1,500 $252 $300 1,600 $223 $213 1,261 1,184 1,274
Slide 13: Unallocated Items
UNALLOCATED ITEMS Chart 11 1 UNALLOCATED ITEMS ($ Millions) 2019 2019 UNALLOCATED ITEMS ($ Millions) 2019 2019 Q1 Q2 By Natural Expense Q1 Q2 Unallocated corporate function expenses 4 $ (19) $ (12) Costs of sales $ (11) $ (7) and variable compensation expense Liability classified share-based 5 (4) —
Slide 14: Financial Items
FINANCIAL ITEMS Chart 12 Cash Flow from Operations KEY FINANCIAL METRICS ($ Millions) 2019 2019 $800 Q1 Q2 $597 $600 Ending Cash Balance $ 259 $ 212 $396 $ Millions $400 $292 1 Total Debt $6,401 $6,293 $200 2 Net Debt to Adjusted EBITDA (LTM) 3.3 3.9 $0 $136 3 $874 Net Debt to Enterprise Value 24% 2
Slide 15: Outlook: 2019 Q3 vs. 2019 Q2
OUTLOOK: 2019 Q3 vs. 2019 Q2 Chart 13 SEGMENT COMMENTS TIMBERLANDS • Seasonally lower Western harvest volumes, slightly higher road costs and modestly lower average sales realizations • Seasonally higher forestry costs in the South, largely offset by higher fee harvest volumes • Comparable average S
Slide 16: Earnings Summary
EARNINGS SUMMARY Chart 14 $ Millions 2018 2019 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Q2 Timberlands $ 268 $ 240 $ 206 $ 188 $ 193 $ 175 Real Estate, Energy & Natural Resources 41 47 86 90 106 71 Wood Products 286 385 250 66 115 128 Unallocated Items (51) (35) (37) 2 (49) (31) Total Adjusted EBIT
Slide 17: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 15 $ Millions (except EPS) 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Diluted EPS Before Special Items $ 0.36 $ 0.44 $ 0.28 $ 0.10 $ 0.11 $ 0.16 Special Items: Environmental remediation charge (0.03) — — — — — Product remediation (charges) recoveries, net 0.02 (0.02) — — — —
Slide 18: Adjusted EBITDA Reconciliation by Segment
ADJUSTED EBITDA RECONCILIATION Chart 16 BY SEGMENT $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Timberlands $ 268 $ 240 $ 206 $ 188 $ 193 $ 175 Real Estate & ENR 41 47 86 90 106 71 Wood Products 286 385 250 66 115 128 Unallocated Items (51) (35) (37) 2 (49) (31) 1 Adjusted EBITDA $ 544 $ 637 $ 505 $ 346 $
Slide 19: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION: Chart 17 TIMBERLANDS $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 West $ 165 $ 152 $ 121 $ 94 $ 97 $ 89 South 98 84 80 89 90 86 North 6 3 4 6 7 1 Other (1) 1 1 (1) (1) (1) 1 Total Timberlands Adjusted EBITDA $ 268 $ 240 $ 206 $ 188 $ 193 $ 175 West (29) (29) (27) (30) (29)
Slide 20: Adjusted EBITDA Reconciliation: Real Estate, Energy & Natural Resources
ADJUSTED EBITDA RECONCILIATION: REAL Chart 18 ESTATE, ENERGY & NATURAL RESOURCES $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Real Estate $ 27 $ 30 $ 68 $ 71 $ 87 $ 51 Energy & Natural Resources 14 17 18 19 19 20 1 Total Real Estate & ENR Adjusted EBITDA $ 41 $ 47 $ 86 $ 90 $ 106 $ 71 Depletion, depreciat
Slide 21: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION: Chart 19 WOOD PRODUCTS $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Lumber $ 140 $ 195 $ 118 $ 6 $ 47 $ 44 OSB 92 129 77 31 19 8 EWP 45 58 48 26 47 64 Distribution 15 12 3 2 4 11 Other (6) (9) 4 1 (2) 1 1, 2 Total Wood Products Adjusted EBITDA $ 286 $ 385 $ 250 $ 66 $ 115 $
Slide 22: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION: Chart 20 UNALLOCATED $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 1 Total Unallocated Adjusted EBITDA $ (51) $ (35) $ (37) $ 2 $ (49) $ (31) Total depletion, depreciation, & amortization (1) (1) (1) (1) (1) (1) Special items included in operating income (loss) (28) — — — (2
Slide 23: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA Chart 21 RECONCILIATION $ Millions 2019 Q1 Q2 1,2 Net Debt to Adjusted EBITDA (LTM) 3.3 3.9 3 Total debt $ 6,401 $ 6,293 Less: cash and cash equivalents 259 212 Net Debt $ 6,142 $ 6,081 Adjusted EBITDA (LTM) $ 1,853 $ 1,559 Depletion, depreciation & amortization (489) (49