Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q4 2021 Earnings Presentation
34 slides from Weyerhaeuser's earnings presentation, Jan 28, 2022
Slide 1: Weyerhaeuser Earnings Results Fourth Quarter 2021
2021 WEYERHAEUSER EARNINGS RESULTS FOURTH QUARTER 2021 | January 28, 2022
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 Consolidated Results
2021 CONSOLIDATED RESULTS $ Millions 2020 2021 $ Millions (except EPS) 2020 2021 Adjusted EBITDA FY FY Change Consolidated Statement of FY FY Timberlands $ 610 $ 693 $ 83 Operations Before Special Items Real Estate, Energy & Natural Resources 241 296 55 Net sales $ 7,532 $ 10,201 Wood Products 1,527
Slide 4: 2021 Q4 Consolidated Results
2021 Q4 CONSOLIDATED RESULTS $ Millions 2021 2021 $ Millions (except EPS) 2021 2021 Adjusted EBITDA Q3 Q4 Change Consolidated Statement of Q3 Q4 Timberlands $ 165 $ 176 $ 11 Operations Before Special Items Real Estate, Energy & Natural Resources 60 49 (11) Net sales $ 2,345 $ 2,206 Wood Products 565
Slide 5: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS $ Millions (except EPS) 2021 Q3 2021 Q4 Pretax After-Tax Diluted Pretax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 534 $ 450 $ 0.60 $ 463 $ 367 $ 0.49 Special Items: Legal benefit — — — 15 12 0.01 Product remediation re
Slide 6: Adjusted EBITDA
ADJUSTED EBITDA1 TOTAL COMPANY2 $1,573 REAL ESTATE & ENR $1,650 $150 $1,320 $ Millions $1,101 $101 $ Millions $96 $91 $990 $746 $100 $745 $674 $657 $57 $60 $60 $660 $49 $413 $386 $50 $330 $23 $0 $0 Q1.20 Q2.20 Q3.20 Q4.20 Q1.21 Q2.21 Q3.21 Q4.21 Q1.20 Q2.20 Q3.20 Q4.20 Q1.21 Q2.21 Q3.21 Q4.21 Real E
Slide 7: Timberlands Segment
TIMBERLANDS SEGMENT TIMBERLANDS ($ Millions) 2021 2021 TIMBERLANDS ($ Millions) 2021 2021 Adjusted EBITDA by Region Q3 Q4 Segment Statement of Operations Q3 Q4 West $ 90 $ 93 Third-party sales $ 423 $ 429 South 76 80 Intersegment sales 129 136 North 1 3 Total Sales 552 565 Other (2) — Costs of sales
Slide 8: Timberlands Key Drivers: 2021 Q4 vs. 2021 Q3
TIMBERLANDS KEY DRIVERS: 2021 Q4 vs. 2021 Q3 REGION KEY DRIVERS WEST • Fee Harvest Volumes: Slightly higher • Sales Volumes: Modestly lower for Domestic and Japan, significantly higher for China • Sales Realizations: Comparable for Domestic, slightly higher for Japan, slightly lower for China • Per
Slide 9: 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 $145.64 $146.39 7,000 $35.56 $36.55 $40 $137.80 $34.27 $33.68 $33.68 $33.69 $34.50 $35.11 Volum es (Thousands of tons) $130.69 $150 $124.37 Volumes (Thousand
Slide 10: Fee Harvest Volumes and Intersegment Sales Volumes
FEE HARVEST VOLUMES AND INTERSEGMENT SALES VOLUMES FEE HARVEST VOLUMES INTERSEGMENT LOG SALES VOLUMES 7,500 1,500 1,331 1,307 6,160 1,263 6,130 1,220 1,224 5,914 5,856 5,912 6,250 5,596 1,127 5,509 5,376 1,200 1,076 1,099 Thousands of tons Thousands of tons 5,000 900 761 779 720 737 741 733 3,750 64
Slide 11: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & NATURAL RESOURCES (ENR) SEGMENT REAL ESTATE & ENR ($ Millions) 2021 2021 REAL ESTATE & ENR ($ Millions) 2021 2021 Adjusted EBITDA by Business Q3 Q4 Segment Statement of Operations Q3 Q4 Real Estate $ 38 $ 27 Total sales $ 69 $ 59 Energy & Natural Resources 22 22 Costs of sales
Slide 12: Real Estate, ENR Segment: Acres Sold and Price per Acre
REAL ESTATE, ENERGY & NATURAL RESOURCES (ENR) SEGMENT ACRES SOLD AVERAGE PRICE PER ACRE 60 $7,000 $6,316 45 $5,700 45 $4,385 Price per acre Acres (thousands) 35 $4,400 31 30 $3,227 $4,005 $3,803 $3,100 19 18 $1,992 15 11 $1,501 $1,800 7 1 $1,381 0 $500 Q1.20 Q2.20 Q3.20 Q4.20 Q1.21 Q2.21 Q3.21 Q4.21
Slide 13: Wood Products Segment
WOOD PRODUCTS SEGMENT WOOD PRODUCTS ($ Millions) 2021 2021 WOOD PRODUCTS ($ Millions) 2021 2021 Adjusted EBITDA by Business Q3 Q4 Segment Statement of Operations Q3 Q4 Lumber $ 118 $ 195 Total sales $ 1,853 $ 1,718 OSB 344 176 Costs of sales 1,270 1,185 Engineered Wood Products 76 114 Gross margin 5
Slide 14: Wood Products Key Drivers: 2021 Q4 vs. 2021 Q3
WOOD PRODUCTS KEY DRIVERS: 2021 Q4 vs. 2021 Q3 BUSINESS KEY DRIVERS LUMBER • Sales Realizations: Increased 15% • Sales Volumes: Significantly lower, adverse weather conditions in Canada and lower inventory drawdown than 2021 Q3 • Production Volumes: Moderately lower, downtime at Princeton mill relat
Slide 15: 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 Square Ft.) Volumes (Millions of Board Ft.) $691 Realizations ($/MBF) 3,600 $880 4,000 $760 Realizations ($/M 3/8") $614 $674 $609 $592 2,700 $516 $660 $503 $490 3,000 $570 $416 $438
Slide 16: Unallocated Items
UNALLOCATED ITEMS 1 UNALLOCATED ITEMS ($ Millions) 2021 2021 UNALLOCATED ITEMS ($ Millions) 1 2021 2021 Q3 Q4 Q3 Q4 Unallocated corporate function expenses and variable Costs of sales 3 $ (2) $ (4) $ (33) $ (35) compensation expense 4 G&A expense (35) (49) Liability classified share-based compensati
Slide 17: Financial Items
FINANCIAL ITEMS KEY FINANCIAL METRICS ($ Millions) 2021 2021 Cash Flow from Operations Q3 Q4 $1,500 $1,308 Ending Cash Balance $ 2,326 $ 1,879 $1,200 1 Total Debt $ 5,250 $ 5,099 $ Millions $900 $698 $659 $608 2 Net Debt to Adjusted EBITDA (LTM) 0.7 0.8 $600 $391 3 $494 Net Debt to Enterprise Value
Slide 18: Adjusted Funds Available for Distribution: Allocation Framework
ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION Allocation Framework and Cash Return Calculation TARGETED RETURN OF CASH TO SHAREHOLDERS ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION1 Calculated on an Annual Basis ALLOCATION FRAMEWORK Return 75-80% of Adj. FAD to Shareholders Adjusted FAD SUSTAINABLE BASE DIV
Slide 19: Adjusted Funds Available for Distribution: Returning Over $2 Billion
ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION Returning Over $2 Billion of Cash Based on 2021 Results RETURNING 79% OF ADJUSTED FAD Adjusted Funds Available for Distribution1 TO SHAREHOLDERS BASED ON 2021 RESULTS ($ Millions) Q4 2021 79% Payout Net Cash from Operations $494 $3,159 $2,500 for 2021 Capita
Slide 20: Outlook: 2022 Q1 vs. 2021 Q4
OUTLOOK: 2022 Q1 vs. 2021 Q4 EXPECTED EARNINGS SEGMENT KEY DRIVERS & ADJUSTED EBITDA TIMBERLANDS Significantly higher West South North than 2021 Q4 Fee Harvest Volumes: Fee Harvest Volumes: Fee Harvest Volumes: Significantly higher Slightly lower Slightly lower Domestic Sales Realizations: Sales Rea
Slide 21: 2022 Outlook
2022 OUTLOOK DRIVER FY 2022 OUTLOOK Approximately 34.5 million tons • South: Moderately higher than 2021 FEE HARVEST VOLUME • West: Slightly higher than 2021 • North: Moderately lower than 2021 REAL ESTATE & ENR ADJUSTED EBITDA $300 million BASIS OF REAL ESTATE SOLD 35-45% of Real Estate sales INTER
Slide 22: Natural Climate Solutions
NATURAL CLIMATE SOLUTIONS Leveraging Our Unmatched Scale GROWING OUR CURRENT BUSINESS KEY UPDATES BUILDING A $100 MILLION BUSINESS • 2021 growth primarily from current Adjusted EBITDA1 Mitigation, Conservation and Renewable Energy businesses $100 Mitigation & Renewable • Announced first Forest Carbo
Slide 23: Wood Products Sales Realizations: Current vs. 2021 Q4
WOOD PRODUCTS SALES REALIZATIONS: CURRENT VS. 2021 Q4 WEYERHAEUSER’S AVERAGE SALES REALIZATIONS Approximate Change As of January 21, 2022 LUMBER1 Q1 QTD vs. WY’s +$345/MBF HIGHER SENSITIVITY Q4 AVERAGE CHANGE IN REALIZATIONS $10/MBF ≈ $50 million CURRENT vs. EBITDA +$395/MBF HIGHER ANNUALLY Q4 AVERA
Slide 24: Earnings Summary
EARNINGS SUMMARY $ Millions (except EPS) 2020 2021 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Timberlands $ 173 $ 140 $ 130 $ 167 $ 172 $ 180 $ 165 $ 176 Real Estate, Energy & Natural Resources 101 57 60 23 96 91 60 49 Wood Products 184 198 615 530 889 1,386 565 517 Unallocated Items (45) (9
Slide 25: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Diluted EPS Before Special Items $ 0.18 $ 0.11 $ 0.52 $ 0.48 $ 0.91 $ 1.37 $ 0.60 $ 0.49 Special Items: Pension settlement charge — — — (0.26) — — — — Early extinguishment of debt charges — (0.02) (0.03) (0.07) — — — — Legal benefit
Slide 26: Earnings Before Special Items Reconciliation
EARNINGS BEFORE SPECIAL ITEMS RECONCILIATION $ Millions (except EPS) 2020 2021 Pretax After-Tax Diluted Pretax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 1,205 $ 962 $ 1.29 $ 3,219 $ 2,526 $ 3.37 Special Items: Gain on sale of timberlands 182 182 0.
Slide 27: Adjusted EBITDA Reconciliation: By Segment
ADJUSTED EBITDA RECONCILIATION By Segment $ Millions 2018 2019 2020 2021 FY FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Timberlands $ 902 $ 680 $ 173 $ 140 $ 130 $ 167 $ 610 $ 172 $ 180 $ 165 $ 176 $ 693 Real Estate & ENR 264 274 101 57 60 23 241 96 91 60 49 296 Wood Products 987 476 184 198 615 530 1,527 889
Slide 28: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION Timberlands $ Millions 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 West $ 93 $ 73 $ 72 $ 102 $ 101 $ 103 $ 90 $ 93 South 78 70 62 64 69 76 76 80 North 3 (1) — 2 3 2 1 3 Other (1) (2) (4) (1) (1) (1) (2) — Total Timberlands Adjusted EBITDA 1 $ 173 $ 140 $ 130 $ 167 $ 172 $ 180 $
Slide 29: Adjusted EBITDA Reconciliation: Real Estate, Energy & Natural Resources
ADJUSTED EBITDA RECONCILIATION Real Estate, Energy & Natural Resources $ Millions 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Real Estate $ 86 $ 42 $ 44 $ 4 $ 76 $ 66 $ 38 $ 27 Energy & Natural Resources 15 15 16 19 20 25 22 22 1 Total Real Estate & ENR Adjusted EBITDA $ 101 $ 57 $ 60 $ 23 $ 96 $ 91 $ 60 $ 49
Slide 30: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION Wood Products $ Millions 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Lumber $ 79 $ 103 $ 363 $ 254 $ 513 $ 804 $ 118 $ 195 OSB 45 41 160 220 300 472 344 176 EWP 51 42 58 37 42 53 76 114 Distribution 12 13 37 24 39 75 22 40 Other (3) (1) (3) (5) (5) (18) 5 (8) 1, 2 Total Wood Pro
Slide 31: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION Unallocated $ Millions 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 Total Unallocated Adjusted EBITDA $ (45) $ (9) $ (60) $ (63) $ (56) $ (84) $ (44) $ (68) Total depletion, depreciation & amortization (2) (1) (2) (1) (2) (1) (2) — Special items included in operating loss 12 —
Slide 32: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA RECONCILIATION $ Millions 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1,2 Net Debt to Adjusted EBITDA (LTM) 4.5 4.1 2.9 2.3 1.5 0.9 0.7 0.8 Total debt $ 7,426 $ 6,299 $ 5,974 $ 5,475 $ 5,475 $ 5,250 $ 5,250 $ 5,099 Less: cash and cash equivalents 1,458 643 787 495 1,016 1,777 2,326
Slide 33: Funds Available for Distribution Reconciliation
FUNDS AVAILABLE FOR DISTRIBUTION RECONCILIATION ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION ($ Millions) 2018 2019 2020 2021 FY FY FY FY Net Cash from Operations $ 1,112 $ 966 $ 1,529 $ 3,159 Capital Expenditures (427) (384) (281) (441) Funds Available for Distribution 1 $ 685 $ 582 $ 1,248 $ 2,718 Ca
Slide 34: Adjusted EBITDA Reconciliation: Natural Climate Solutions
ADJUSTED EBITDA RECONCILIATION Natural Climate Solutions $ Millions 2020 2021 FY FY 1 Total Natural Climate Solutions Adjusted EBITDA $ 22 $ 38 Depletion, depreciation & amortization (1) (1) Basis of real estate sold (9) (10) Operating Income (GAAP) $ 12 $ 27 1. Adjusted EBITDA is a non-GAAP measure