Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q4 2020 Earnings Presentation
28 slides from Weyerhaeuser's earnings presentation, Jan 29, 2021
Slide 1: Weyerhaeuser Earnings Results Fourth Quarter 2020
WEYERHAEUSER EARNINGS RESULTS FOURTH QUARTER 2020 | January 29, 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, Section 27A of the Securities Act of 1933, and Section 21E of the S
Slide 3: 2020 Consolidated Results
2020 CONSOLIDATED RESULTS $ Millions 2019 2020 $ Millions (except EPS) 2019 2020 Adjusted EBITDA FY FY Change Consolidated Statement of Operations FY FY Timberlands $ 680 $ 610 $ (70) Before Special Items Real Estate, Energy & Natural Net sales $ 6,554 $ 7,532 274 241 (33) Resources Costs of sales 5
Slide 4: 2020 Q4 Consolidated Results
2020 Q4 CONSOLIDATED RESULTS $ Millions 2020 2020 $ Millions (except EPS) 2020 2020 Adjusted EBITDA Q3 Q4 Change Consolidated Statement of Operations Q3 Q4 Timberlands $ 130 $ 167 $ 37 Before Special Items Real Estate, Energy & Natural Net sales $ 2,110 $ 2,063 60 23 (37) Resources Costs of sales 1,
Slide 5: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS $ Millions (except EPS) 2020 Q3 2020 Q4 Pretax After-Tax Diluted Pretax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 495 $ 386 $ 0.52 $ 440 $ 361 $ 0.48 Special Items: Early extinguishment of debt charges (23) (23) (0.03)
Slide 6: Adjusted EBITDA
ADJUSTED EBITDA1 Total Company 2 Real Estate & ENR $800 $745 $150 $657 $ Millions $106 $101 $ Millions $600 $100 $413 $386 $71 $400 $365 $343 $60 $60 $308 $57 $260 $50 $37 $200 $23 $0 $0 Q1.19 Q2.19 Q3.19 Q4.19 Q1.20 Q2.20 Q3.20 Q4.20 Q1.19 Q2.19 Q3.19 Q4.19 Q1.20 Q2.20 Q3.20 Q4.20 Real Estate $ 87
Slide 7: Timberlands Segment
TIMBERLANDS SEGMENT TIMBERLANDS ($ Millions) 2020 2020 TIMBERLANDS ($ Millions) 2020 2020 Adjusted EBITDA by Region Q3 Q4 Segment Statement of Operations Q3 Q4 West $ 72 $ 102 Third-party sales $ 345 $ 381 South 62 64 Intersegment sales 107 121 North — 2 Total Sales 452 502 Other (4) (1) Costs of sa
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 3,000 $124.37 $140 7,000 $35.35 $35.45 $35.03 $34.71 $34.27 $40 Volum es (Thousands of tons) Volum es (Thousands of tons) $33.68 $33.68 $33.69 $106.92 $104.07 $102
Slide 9: Fee Harvest Volume and Intersegment Sales Volume
FEE HARVEST VOLUME AND INTERSEGMENT SALES VOLUME Fee Harvest Volume Intersegment Log Sales Volume 7,500 6,802 1,800 6,492 6,617 6,367 1,515 6,130 1,432 5,914 1,421 6,250 5,596 1,500 1,377 1,331 Thousands of tons 5,509 1,307 Thousands of tons 1,127 5,000 1,200 1,076 3,750 900 737 712 687 700 720 661
Slide 10: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & NATURAL RESOURCES (ENR) SEGMENT Real Estate & ENR ($ Millions) 2020 2020 Real Estate & ENR ($ Millions) 2020 2020 Adjusted EBITDA by Business Q3 Q4 Segment Statement of Operations Q3 Q4 Real Estate $ 44 $ 4 Total sales $ 69 $ 30 Energy & Natural Resources 16 19 Costs of sales 4
Slide 11: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & NATURAL RESOURCES (ENR) SEGMENT Acres Sold Average Price per Acre 60 $6,500 $6,316 47 45 45 39 $5,000 Acres (thousands) 35 Price per acre 31 30 $3,500 18 $2,424 $2,415 $2,308 15 $1,992 9 $2,000 $1,501 1 0 $1,381 Q1.19 Q2.19 Q3.19 Q4.19 Q1.20 Q2.20 Q3.20 Q4.20 $1,063 $500 Q1.19
Slide 12: Wood Products Segment
WOOD PRODUCTS SEGMENT WOOD PRODUCTS ($ Millions) 2020 2020 WOOD PRODUCTS ($ Millions) 2020 2020 Adjusted EBITDA by Business Q3 Q4 Segment Statement of Operations Q3 Q4 Lumber $ 363 $ 254 Total sales $ 1,696 $ 1,652 OSB 160 220 Costs of sales 1,075 1,109 Engineered Wood Products 58 37 Gross margin 62
Slide 13: Third-Party Sales Volumes and Realizations
THIRD-PARTY SALES VOLUMES AND REALIZATIONS1 Lumber OSB $674 $503 3,000 $609 $700 3,000 $520 Volum es (Millions of Square Ft.) Volum es (Millions of Board Ft.) $395 Realizations ($/M 3/8") Realizations ($/MBF) 2,250 $438 $525 2,250 $390 $392 $416 $388 $389 $389 $246 $240 $223 $213 $214 $216 1,500 1,2
Slide 14: Unallocated Items
UNALLOCATED ITEMS UNALLOCATED ITEMS ($ Millions)1 2020 2020 UNALLOCATED ITEMS ($ Millions)1 2020 2020 Q3 Q4 Q3 Q4 Unallocated corporate function expenses and variable $ (36) $ (31) Costs of sales 3 $ (18) $ (20) compensation expense Liability classified share-based compensation (5) (3) G&A expense 4
Slide 15: Financial Items
FINANCIAL ITEMS KEY FINANCIAL METRICS ($ Millions) 2020 2020 Cash Flow from Operations Q3 Q4 $750 $608 Ending Cash Balance $ 787 $ 495 $600 $396 Total Debt 1 $ 5,974 $ 5,475 $450 $391 $ Millions $292 $444 $300 Net Debt to Adjusted EBITDA (LTM) 2 2.9 2.3 $292 $150 Net Debt to Enterprise Value 3 20% 1
Slide 16: Adjusted Funds Available for Distribution and Capital Allocation
ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION 1 AND CAPITAL ALLOCATION ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION ($ Millions) 2020 Key Capital Allocation Items FY FY 2020 Net Cash from Operations $ 1,529 Capital Expenditures (281) Adjustments to FAD2 (8) Adjusted Funds Available for Distribution $ 1,240
Slide 17: Outlook: 2021 Q1 vs. 2020 Q4
OUTLOOK: 2021 Q1 vs. 2020 Q4 SEGMENT COMMENTS TIMBERLANDS • Higher Western export log sales volumes, slightly lower average domestic log sales realizations, slightly higher unit logging and hauling costs, and seasonally lower Western road spending • Higher Southern fee harvest volumes and comparable
Slide 18: 2021 Outlook
2021 OUTLOOK DRIVER FY 2021 OUTLOOK Approximately 34.5 million tons • South: Approximately 10% higher than 2020 FEE HARVEST VOLUME • West: Approximately 5% lower than 2020, attributable to Oregon salvage activity • North: Moderately lower than 2020 REAL ESTATE & ENR EBITDA $255 million BASIS OF REAL
Slide 19: Earnings Summary
EARNINGS SUMMARY $ Millions (except EPS) 2019 2020 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Timberlands $ 193 $ 175 $ 154 $ 158 $ 173 $ 140 $ 130 $ 167 Real Estate, Energy & Natural Resources 106 71 60 37 101 57 60 23 Wood Products 115 128 123 110 184 198 615 530 Unallocated Items (49) (31
Slide 20: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Diluted EPS Before Special Items $ 0.11 $ 0.16 $ 0.08 $ 0.03 $ 0.18 $ 0.11 $ 0.52 $ 0.48 Special Items: Pension settlement charges (0.47) 0.01 — (0.01) — — — (0.26) Early extinguishment of debt charges (0.01) — — — — (0.02) (0.03) (
Slide 21: Earnings Before Special Items Reconciliation
EARNINGS BEFORE SPECIAL ITEMS RECONCILIATION $ Millions (except EPS) 2019 2020 Pretax After-Tax Diluted Pretax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 253 $ 285 $ 0.39 $ 1,205 $ 962 $ 1.29 Special Items: Gain on sale of timberlands 48 48 0.07 182
Slide 22: Adjusted EBITDA Reconciliation by Segment
ADJUSTED EBITDA RECONCILIATION BY SEGMENT $ Millions 2017 2018 2019 2020 FY FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Timberlands $ 936 $ 902 $ 193 $ 175 $ 154 $ 158 $ 680 $ 173 $ 140 $ 130 $ 167 $ 610 Real Estate & ENR 241 264 106 71 60 37 274 101 57 60 23 241 Wood Products 1,017 987 115 128 123 110 476 184
Slide 23: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION: TIMBERLANDS $ Millions 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 West $ 97 $ 89 $ 59 $ 73 $ 93 $ 73 $ 72 $ 102 South 90 86 91 85 78 70 62 64 North 7 1 4 3 3 (1) — 2 Other (1) (1) — (3) (1) (2) (4) (1) Total Timberlands Adjusted EBITDA1 $ 193 $ 175 $ 154 $ 158 $ 173 $ 140 $ 13
Slide 24: Adjusted EBITDA Reconciliation: Real Estate, Energy & Natural Resources
ADJUSTED EBITDA RECONCILIATION: REAL ESTATE, ENERGY & NATURAL RESOURCES $ Millions 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Real Estate $ 87 $ 51 $ 37 $ 18 $ 86 $ 42 $ 44 $ 4 Energy & Natural Resources 19 20 23 19 15 15 16 19 Total Real Estate & ENR Adjusted EBITDA1 $ 106 $ 71 $ 60 $ 37 $ 101 $ 57 $ 60 $ 2
Slide 25: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION: WOOD PRODUCTS $ Millions 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Lumber $ 47 $ 44 $ 49 $ 43 $ 79 $ 103 $ 363 $ 254 OSB 19 8 13 19 45 41 160 220 EWP 47 64 55 41 51 42 58 37 Distribution 4 11 10 8 12 13 37 24 Other (2) 1 (4) (1) (3) (1) (3) (5) Total Wood Products Adjusted EB
Slide 26: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION: UNALLOCATED $ Millions 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 Total Unallocated Adjusted EBITDA $ (49) $ (31) $ (29) $ (45) $ (45) $ (9) $ (60) $ (63) Total depletion, depreciation & amortization (1) (1) (1) (1) (2) (1) (2) (1) Special items included in operating income
Slide 27: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA RECONCILIATION $ Millions 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1,2 Net Debt to Adjusted EBITDA (LTM) 3.3 3.9 4.7 4.9 4.5 4.1 2.9 2.3 Total debt $ 6,401 $ 6,293 $ 6,590 $ 6,377 $ 7,426 $ 6,299 5,974 $ 5,475 Less: cash and cash equivalents 259 212 153 139 1,458 643 787 495 Net
Slide 28: Funds Available for Distribution Reconciliation
FUNDS AVAILABLE FOR DISTRIBUTION RECONCILIATION $ Millions 2017 2018 2019 2020 FY FY FY FY Net Cash from Operations $ 1,201 $ 1,112 $ 966 $ 1,529 Capital Expenditures (excluding discontinued operations) (419) (427) (384) (281) 1 Funds Available for Distribution $ 782 $ 685 $ 582 $ 1,248 Cash for pro