Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q1 2024 Earnings Presentation
29 slides from Weyerhaeuser's earnings presentation, Apr 26, 2024
Slide 1: Earnings Results First Quarter 2024
EARNINGS RESULTS FIRST QUARTER 2024
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: our second quarter 2
Slide 3: 2024 Q1 Consolidated Results
2024 Q1 CONSOLIDATED RESULTS $ Millions 2023 2024 $ Millions (except EPS) 2023 2024 Adjusted EBITDA Q4 Q1 Change Consolidated Statement of Operations Q4 Q1 Timberlands $ 143 $ 144 $ 1 Net sales $ 1,774 $ 1,796 Real Estate, Energy & Natural Resources 67 94 27 Costs of sales 1,432 1,441 Wood Products
Slide 4: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS $ Millions (except EPS) 2023 Q4 2024 Q1 Pretax After-Tax Diluted Pretax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 120 $ 121 $ 0.16 $ 134 $ 114 $ 0.16 Special Items: Gain on sale of timberlands 84 83 0.12 — — — Insuranc
Slide 5: Adjusted EBITDA
ADJUSTED EBITDA1 TOTAL COMPANY2 REAL ESTATE & ENR $600 $120 $509 $500 $469 $100 $94 $94 $89 $395 $80 $400 $ Millions $352 $70 $ Millions $67 $321 $300 $60 $200 $40 $100 $20 $0 $0 Q1.23 Q2.23 Q3.23 Q4.23 Q1.24 Q1.23 Q2.23 Q3.23 Q4.23 Q1.24 Real Estate $ 63 40 71 32 73 ENR $ 26 30 23 35 21 $240 TIMBER
Slide 6: Timberlands Segment
TIMBERLANDS SEGMENT TIMBERLANDS ($ Millions) 2023 2024 TIMBERLANDS ($ Millions) 2023 2024 Adjusted EBITDA by Region Q4 Q1 Segment Statement of Operations Q4 Q1 West $ 73 $ 76 Third-party sales $ 395 $ 387 South 73 69 Intersegment sales 139 134 North 1 2 Total Sales 534 521 Other (4) (3) Costs of sal
Slide 7: Timberlands Key Drivers: 2024 Q1 vs. 2023 Q4
TIMBERLANDS KEY DRIVERS: 2024 Q1 vs. 2023 Q4 REGION KEY DRIVERS WEST • Fee Harvest Volumes: Moderately higher • Domestic Sales Volumes: Significantly higher • Export Sales Volumes: Significantly lower, primarily for China – flexed volumes to the domestic market • Domestic Sales Realizations: Slightl
Slide 8: 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 3,600 $200 7,000 $45 $38.23 Volumes (Thousands of tons) $37.49 $36.92 $37.15 $36.93 Volumes (Thousands of tons) 3,000 $160 5,600 $36 $137.10 Realizations ($/ton) R
Slide 9: Fee Harvest Volumes and Intersegment Sales Volumes
FEE HARVEST VOLUMES AND INTERSEGMENT SALES VOLUMES FEE HARVEST VOLUMES INTERSEGMENT LOG SALES VOLUMES 7,500 1,500 6,432 6,430 6,146 6,169 1,225 5,990 1,188 6,250 1,172 1,151 1,200 1,098 Thousands of tons Thousands of tons 5,000 859 900 793 753 779 745 3,750 600 2,245 2,292 2,214 2,500 2,137 2,079 30
Slide 10: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & NATURAL RESOURCES (ENR) SEGMENT REAL ESTATE & ENR ($ Millions) 2023 2024 REAL ESTATE & ENR ($ Millions) 2023 2024 Adjusted EBITDA by Business Q4 Q1 Segment Statement of Operations Q4 Q1 Real Estate $ 32 $ 73 Total sales $ 77 $ 107 Energy & Natural Resources 35 21 Costs of sales
Slide 11: Real Estate, ENR Segment: Average Price per Acre
REAL ESTATE, ENERGY & NATURAL RESOURCES (ENR) SEGMENT AVERAGE PRICE PER ACRE $7,000 $6,316 $6,000 $5,550 $5,046 $4,790 $5,000 Price per acre $4,385 $4,202 $4,005 $3,785 $3,629 $4,000 $3,803 $3,000 $3,227 $3,215 $3,241 $3,033 $1,992 $2,000 $1,501 $1,381 $1,000 Q1.20 Q2.20 Q3.20 Q4.20 Q1.21 Q2.21 Q3.2
Slide 12: Wood Products Segment
WOOD PRODUCTS SEGMENT WOOD PRODUCTS ($ Millions) 2023 2024 WOOD PRODUCTS ($ Millions) 2023 2024 Adjusted EBITDA by Business Q4 Q1 Segment Statement of Operations Q4 Q1 Lumber $ (34) $ (5) Total sales $ 1,302 $ 1,302 OSB 73 87 Costs of sales 1,127 1,107 Engineered Wood Products 104 86 Gross margin 17
Slide 13: Wood Products Key Drivers: 2024 Q1 vs. 2023 Q4
WOOD PRODUCTS KEY DRIVERS: 2024 Q1 vs. 2023 Q4 BUSINESS KEY DRIVERS LUMBER • Sales Realizations: Increased 4% • Sales Volumes: Slightly lower, partially driven by winter weather disruptions early in the quarter • Unit Manufacturing Costs: Slightly higher • Log Costs: Slightly lower ORIENTED • Sales
Slide 14: Third-Party Sales Volumes and Realizations
THIRD-PARTY SALES VOLUMES AND REALIZATIONS1 Lumber OSB 2,800 $600 $500 2,400 $416 $479 $481 Volumes (Millions of Square Ft.) Volumes (Millions of Board Ft.) $450 2,000 $400 $429 $359 2,100 $413 $450 $344 Realizations ($/M 3/8") Realizations ($/MBF) 1,600 $299 $269 $300 1,400 $300 1,196 1,184 1,200 1
Slide 15: Unallocated Items
UNALLOCATED ITEMS 1 1 UNALLOCATED ITEMS ($ Millions) 2023 2024 UNALLOCATED ITEMS ($ Millions) 2023 2024 Q4 Q1 Q4 Q1 Unallocated corporate function expenses and variable Costs of sales4 $ 6 $ (12) $ (35) $ (38) compensation expense 5 G&A expense (45) (49) Liability classified share-based compensation
Slide 16: Financial Items
FINANCIAL ITEMS Cash Flow from Operations KEY FINANCIAL METRICS ($ Millions) 2023 2024 $900 Q4 Q1 $750 Ending cash balance $ 1,164 $ 871 $600 $ Millions $523 Total debt $ 5,069 $ 5,071 $496 $450 Net debt to Adjusted EBITDA (LTM) 1 2.3 2.5 $288 Net debt to enterprise value 2 13% 14% $300 $126 $124 $1
Slide 17: Adjusted Funds Available for Distribution
ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION Allocation Framework and Cash Return Calculation ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION1 TARGETED RETURN OF Allocation Framework CASH TO SHAREHOLDERS Calculated on an Annual Basis Return 75-80% of Adjusted FAD to Shareholders SUSTAINABLE BASE DIVIDEND Adj
Slide 18: Outlook: 2024 Q2
OUTLOOK: 2024 Q2 EXPECTED EARNINGS1 SEGMENT KEY DRIVERS & ADJUSTED EBITDA TIMBERLANDS Slightly higher than 2024 Q1 West South North Fee Harvest Volumes: Fee Harvest Volumes: Fee Harvest Volumes: Moderately higher Moderately higher Significantly lower, seasonal Sales Realizations: Sales Realizations:
Slide 19: Wood Products Sales Realizations: Current vs. 2024 Q1
WOOD PRODUCTS SALES REALIZATIONS: CURRENT VS. 2024 Q1 WEYERHAEUSER’S AVERAGE SALES REALIZATIONS Approximate Change As of April 19, 2024 LUMBER1 Q2 QTD vs. WY’s +$10/MBF HIGHER SENSITIVITY Q1 AVERAGE CHANGE IN REALIZATIONS $10/MBF ≈ $50 million CURRENT vs. EBITDA +$5/MBF HIGHER ANNUALLY Q1 AVERAGE OS
Slide 20: Supplemental Timberlands Information
SUPPLEMENTAL TIMBERLANDS INFORMATION Adjusted EBITDA1 Per Acre WESTERN TIMBERLANDS 2022 2023 2024 SOUTHERN TIMBERLANDS 2022 2023 2024 FY FY Q1 FY FY Q1 1 1 Adjusted EBITDA ($ Millions) $ 473 $ 344 $ 76 Adjusted EBITDA ($ Millions) $ 307 $ 306 $ 69 2 2 Acres (Thousands) 2,546 2,539 2,539 Acres (Thous
Slide 21: Earnings Summary
EARNINGS SUMMARY $ Millions (except EPS) 2023 2024 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Timberlands $ 188 $ 172 $ 143 $ 143 $ 144 Real Estate, Energy & Natural Resources 89 70 94 67 94 Wood Products 148 270 328 159 184 Unallocated Items (30) (43) (56) (48) (70) Total Adjusted EBITDA1 $ 395 $ 46
Slide 22: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION 2023 2024 Q1 Q2 Q3 Q4 Q1 Diluted EPS Before Special Items $ 0.21 $ 0.32 $ 0.33 $ 0.16 $ 0.16 Special Items: Environmental remediation charge — (0.01) — — — Gain on sale of timberlands — — — 0.12 — Insurance recovery — — — 0.01 — Legal benefit — — — 0.03 — Legal expe
Slide 23: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION By Segment $ Millions 2021 2022 2023 2024 FY FY Q1 Q2 Q3 Q4 FY Q1 LTM1 Timberlands $ 693 $ 784 $ 188 $ 172 $ 143 $ 143 $ 646 $ 144 $ 602 Real Estate & ENR 296 329 89 70 94 67 320 94 325 Wood Products 3,357 2,737 148 270 328 159 905 184 941 Unallocated Items (252) (196)
Slide 24: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION Timberlands $ Millions 2023 2024 Q1 Q2 Q3 Q4 Q1 West $ 105 $ 94 $ 72 $ 73 $ 76 South 81 79 73 73 69 North 4 — 1 1 2 Other (2) (1) (3) (4) (3) 1 Total Timberlands Adjusted EBITDA $ 188 $ 172 $ 143 $ 143 $ 144 West (28) (29) (27) (27) (27) South (38) (37) (37) (37) (35)
Slide 25: Adjusted EBITDA Reconciliation: Real Estate, ENR
ADJUSTED EBITDA RECONCILIATION Real Estate, Energy & Natural Resources $ Millions 2023 2024 Q1 Q2 Q3 Q4 Q1 Real Estate $ 63 $ 40 $ 71 $ 32 $ 73 Energy & Natural Resources 26 30 23 35 21 Total Real Estate & ENR Adjusted EBITDA1 $ 89 $ 70 $ 94 $ 67 $ 94 Depletion, depreciation & amortization (3) (5) (
Slide 26: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION Wood Products $ Millions 2023 2024 Q1 Q2 Q3 Q4 Q1 Lumber $ 8 $ 51 $ 58 $ (34) $ (5) OSB 22 37 118 73 87 EWP 82 144 125 104 86 Distribution 22 34 31 16 20 Other 14 4 (4) — (4) Total Wood Products Adjusted EBITDA1, 2 $ 148 $ 270 $ 328 $ 159 $ 184 Lumber (30) (30) (30) (3
Slide 27: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION Unallocated $ Millions 2023 2024 Q1 Q2 Q3 Q4 Q1 Total Unallocated Adjusted EBITDA1 $ (30) $ (43) $ (56) $ (48) $ (70) Total depletion, depreciation & amortization (2) (1) (2) (2) (2) Special items included in operating loss — (11) — (27) — Operating Loss (GAAP) $ (32)
Slide 28: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA RECONCILIATION $ Millions 2023 2024 Q1 Q2 Q3 Q4 Q1 Net Debt to Adjusted EBITDA (LTM)1, 2 1.7 2.2 2.2 2.3 2.5 Total debt $ 5,053 $ 5,797 $ 5,679 $ 5,069 $ 5,071 Less: cash and cash equivalents and short-term investments 797 1,760 1,841 1,164 871 Net Debt $ 4,256 $ 4,037 $
Slide 29: Funds Available for Distribution Reconciliation
FUNDS AVAILABLE FOR DISTRIBUTION RECONCILIATION ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION ($ Millions) 2021 2022 2023 2024 FY FY FY Q1 Net Cash from Operations $ 3,159 $ 2,832 $ 1,433 $ 124 Capital Expenditures (441) (468) (447) (79) 1 Funds Available for Distribution $ 2,718 $ 2,364 $ 986 $ 45 Cash