Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q1 2019 Earnings Presentation
23 slides from Weyerhaeuser's earnings presentation, Apr 26, 2019
Slide 1: Weyerhaeuser Earnings Results 1st Quarter 2019
Pro Forma Draft - 3.26.2019 WEYERHAEUSER EARNINGS RESULTS 1ST QUARTER 2019 | April 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, timing o
Slide 3: 2019 Q1 Consolidated Results
Chart 1 2019 Q1 CONSOLIDATED RESULTS $ Millions 2018 2019 $ Millions (except EPS) 2018 2019 Adjusted EBITDA Q4 Q1 Change Consolidated Statement of Operations Before Q4 Q1 Special Items Timberlands $ 188 $ 193 $ 5 Net sales $ 1,636 $ 1,643 Real Estate, Energy & Natural Resources 90 106 16 Costs of sa
Slide 4: Earnings Before Special Items
Chart 2 EARNINGS BEFORE SPECIAL ITEMS $ Millions (except EPS) 2018 Q4 2019 Q1 Pretax After-Tax Diluted Pretax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 73 $ 70 $ 0.10 $ 94 $ 80 $ 0.11 Special Items: Tax adjustment — (21) (0.03) — — — Gain on sale o
Slide 5: Adjusted EBITDA
Chart 3 ADJUSTED EBITDA1 2 $ Millions $ Millions Real Estate 27 30 68 71 87 ENR 14 17 18 19 19 $ Millions $ Millions West 165 152 121 94 97 Lumber 140 195 118 6 47 South 98 84 80 89 90 OSB 92 129 77 31 19 North 6 3 4 6 7 Engineered Wood 45 58 48 26 47 Other (1) 1 1 (1) (1) Distribution 15 12 3 2 4 O
Slide 6: Timberlands Segment
Chart 4 TIMBERLANDS SEGMENT TIMBERLANDS ($ Millions) 2018 2019 TIMBERLANDS ($ Millions) 2018 2019 Adjusted EBITDA by Region Q4 Q1 Segment Statement of Operations2 Q4 Q1 West $ 94 $ 97 Third party sales $ 448 $ 431 South 89 90 Intersegment sales 128 125 North 6 7 Total Sales 576 556 Other (1) (1) Cos
Slide 7: Sales Volumes, Realizations and Export Revenue
SALES VOLUMES, Chart 5 REALIZATIONS AND EXPORT REVENUE 1 Volumes (Thousands of tons) Volumes (Thousands of tons) Volumes (Thousands of tons) Japan 72% 68% 69% 67% 69% 1. Western logs are primarily transacted in MBF but are converted to ton equivalents for external reporting purposes. China 23% 27% 2
Slide 8: Fee Harvest Volume and Intersegment Sales Volume
FEE HARVEST VOLUME Chart 6 AND INTERSEGMENT SALES VOLUME South West North 8 April 26, 2019
Slide 9: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & Chart 7 NATURAL RESOURCES (ENR) SEGMENT Real Estate & ENR ($ Millions) 2018 2019 Real Estate & ENR ($ Millions) 2018 2019 Adjusted EBITDA by Business Q4 Q1 Segment Statement of Operations Q4 Q1 Real Estate $ 71 $ 87 Total sales $ 102 $ 118 Energy & Natural Resources 19 19 Costs
Slide 10: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & Chart 8 NATURAL RESOURCES (ENR) SEGMENT Price per acre West 6% 49% 6% 48% 38% South 29% 43% 31% 38% 54% North 65% 8% 63% 14% 8% 10 April 26, 2019
Slide 11: Wood Products Segment
WOOD PRODUCTS SEGMENT Chart 9 WOOD PRODUCTS ($ Millions) 2018 2019 WOOD PRODUCTS ($ Millions) 2018 2019 Adjusted EBITDA by Business Q4 Q1 Segment Statement of Operations2 Q4 Q1 Lumber $ 6 $ 47 Total sales $1,087 $ 1,094 OSB 31 19 Costs of sales 1,003 967 Engineered Wood Products 26 47 Gross margin 8
Slide 12: 3rd-Party Sales Volumes and Realizations
3RD-PARTY SALES VOLUMES AND REALIZATIONS1 Chart 10 1. Sales volumes include sales of internally produced products and products purchased for resale primarily through our Distribution business. These sales occur at market price. 12 April 26, 2019
Slide 13: Unallocated Items
UNALLOCATED ITEMS Chart 11 UNALLOCATED ITEMS ($ Millions)1 2018 2019 UNALLOCATED ITEMS ($ Millions) 2018 2019 Q4 Q1 By Natural Expense Q4 Q1 Unallocated corporate function expenses and variable compensation expense $ (28) $ (19) Costs of sales5 $ 27 $ (11) Liability classified share-based compensati
Slide 14: Financial Items
FINANCIAL ITEMS Chart 12 KEY FINANCIAL METRICS ($ Millions) 2018 2019 Q4 Q1 Ending Cash Balance $334 $259 Total Debt1 $6,344 $6,401 4 Net Debt to Adjusted EBITDA (LTM)2 3.0 3.3 Net Debt to Enterprise Value3 27% 24% 1. Total debt includes $425 million and $245 million of borrowings on our line of 4.
Slide 15: Outlook: 2019 Q2 vs. 2019 Q1
OUTLOOK: 2019 Q2 vs. 2019 Q1 Chart 13 SEGMENT COMMENTS TIMBERLANDS ● Modestly higher Western domestic log sales realizations, more than offset by lower export sales volumes due to the timing of vessel sailings ● Comparable average log sales realizations in the South ● Seasonally higher silviculture
Slide 16: Earnings Summary
EARNINGS SUMMARY Chart 14 $ Millions 2018 2019 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Timberlands $ 268 $ 240 $ 206 $ 188 $ 193 Real Estate, Energy & Natural Resources 41 47 86 90 106 Wood Products 286 385 250 66 115 Unallocated Items (51) (35) (37) 2 (49) Total Adjusted EBITDA1 $ 544 $ 637 $ 505
Slide 17: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 15 $ Millions (except EPS) 2018 2019 Q1 Q2 Q3 Q4 Q1 Diluted EPS Before Special Items $ 0.36 $ 0.44 $ 0.28 $ 0.10 $ 0.11 Special Items: Environmental remediation charge (0.03) — — — — Product remediation (charges) recoveries, net 0.02 (0.02) — — — Tax adjustmen
Slide 18: Adjusted EBITDA Reconciliation by Segment
ADJUSTED EBITDA RECONCILIATION Chart 16 BY SEGMENT $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Timberlands $ 268 $ 240 $ 206 $ 188 $ 193 Real Estate & ENR 41 47 86 90 106 Wood Products 286 385 250 66 115 Unallocated Items (51) (35) (37) 2 (49) Adjusted EBITDA1 $ 544 $ 637 $ 505 $ 346 $ 365 Depletion, deprec
Slide 19: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION: Chart 17 TIMBERLANDS $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 West $ 165 $ 152 $ 121 $ 94 $ 97 South 98 84 80 89 90 North 6 3 4 6 7 Other (1) 1 1 (1) (1) Total Timberlands Adjusted EBITDA1 $ 268 $ 240 $ 206 $ 188 $ 193 West (29) (29) (27) (30) (29) South (45) (45) (46) (46
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 Real Estate $ 27 $ 30 $ 68 $ 71 $ 87 Energy & Natural Resources 14 17 18 19 19 Total Real Estate & ENR Adjusted EBITDA1 $ 41 $ 47 $ 86 $ 90 $ 106 Depletion, depreciation & amortizatio
Slide 21: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION: Chart 19 WOOD PRODUCTS $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Lumber $ 140 $ 195 $ 118 $ 6 $ 47 OSB 92 129 77 31 19 EWP 45 58 48 26 47 Distribution 15 12 3 2 4 Other (6) (9) 4 1 (2) Total Wood Products Adjusted EBITDA1, 2 $ 286 $ 385 $ 250 $ 66 $ 115 Lumber (18) (19) (19
Slide 22: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION: Chart 20 UNALLOCATED $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Total Unallocated Adjusted EBITDA1 $ (51) $ (35) $ (37) $ 2 $ (49) Total depletion, depreciation, & amortization (1) (1) (1) (1) (1) Special items included in operating income (loss) (28) — — — (20) Operating In
Slide 23: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA Chart 21 RECONCILIATION $ Millions 2018 2019 Q4 Q1 Net Debt to Adjusted EBITDA (LTM)1,2 3.0 3.3 Total debt3 $ 6,344 $ 6,401 Less: cash and cash equivalents 334 259 Net Debt $ 6,010 $ 6,142 Adjusted EBITDA (LTM) $ 2,032 $ 1,853 Depletion, depreciation & amortization (486)