Weyerhaeuser Company · NYSE:WY

Weyerhaeuser — Investor Presentation (June 2022)

59 slides from Weyerhaeuser's investor presentation, Jun 3, 2022

  1. Slide 1: Weyerhaeuser Investor Presentation June 2022

    WEYERHAEUSER Investor Presentation June 2022 Exhibit 99.1

  2. Slide 2: 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 the following: future goals and prospects; business strategies; factors

  3. Slide 3: Weyerhaeuser Investment Thesis

    UNMATCHED PORTFOLIO INDUSTRY-LEADING PERFORMANCE STRONG ESG FOUNDATION DISCIPLINED CAPITAL ALLOCATION + + Superior Shareholder Value + WEYERHAEUSER INVESTMENT THESIS

  4. Slide 4: Key 2021 Accomplishments

    WE OPTIMIZED OUR TIMBERLANDS HOLDINGS THROUGH STRATEGIC TRANSACTIONS IN ALABAMA & WASHINGTON WE REDUCED DEBT BY $375 MILLION Resulting in Total Debt Reduction since 2020 Q3 of $1.2 BILLION WE SET A SCIENCE-BASED GHG REDUCTION TARGET At the Most Ambitious Level WE CAPTURED MORE THAN $70 MILLION Of Op

  5. Slide 5: 2025 Year-End Targets: Driving Growth and Shareholder Value

    UNMATCHED PORTFOLIO INDUSTRY-LEADING PERFORMANCE STRONG ESG FOUNDATION DISCIPLINED CAPITAL ALLOCATION + + + GROW OUR TIMBER PORTFOLIO with $1 BILLION of disciplined investments through 2025 GROW EBITDA FROM NATURAL CLIMATE SOLUTIONS to $100 MILLION by 2025 CAPTURE OPX of $175-250 MILLION across busi

  6. Slide 6: Fundamental Drivers Shaping Our Industry

    Rising Global Demand for Wood Fiber Increased Adoption of Wood-Based Building Increased Demand for Natural Climate Solutions Growing Demand for U.S. Housing 2 3 4 FUNDAMENTAL DRIVERS SHAPING OUR INDUSTRY We Are Well-Positioned to Capitalize on These Opportunities 1

  7. Slide 7: Unmatched Portfolio

    UNMATCHED PORTFOLIO Our Quality, Diversity and Scale Cannot Be Replicated

  8. Slide 8: Who We Are

    WHO WE ARE A Tax-Efficient REIT With Three Industry-Leading Businesses WOOD PRODUCTS We are a scale, low-cost wood products manufacturer TIMBERLANDS We are the largest private timberland owner in North America REAL ESTATE, ENERGY & NATURAL RESOURCES We deliver the most value from every acre (1) Appr

  9. Slide 9: Diverse customer mix and integrated value chain

    DIVERSE CUSTOMER MIX that fully values our quality, scale, reliability and sustainable practices PROPRIETARY SEEDLINGS yield superior growth, wood quality and survival characteristics CUSTOMIZED PLANTING deploys the best genetic material for each acre on our land base TARGETED SILVICULTURE generates

  10. Slide 10: How We Do It: Our Sustainability Strategy

    For more information, view our alignment with key ESG frameworks, and visit www.wy.com/sustainability. HOW WE DO IT Our Sustainability Strategy Sustainability Is a Core Value Sustainability Is a Core Value CLIMATE HOMES COMMUNITIES SUSTAINABILITY AMBITIONS Working to Solve 3 BIG CHALLENGES BY 2030 T

  11. Slide 11: Strong ESG Foundation

    ON AVERAGE WE USE 95% OF EVERY LOG WE PLANT 130-150 MILLION TREES EACH YEAR WE HARVEST ONLY 2% OF OUR FORESTS EACH YEAR, AND 100% OF OUR TIMBERLANDS ARE REFORESTED AFTER HARVESTING WE REMOVE THE EQUIVALENT OF 35 MILLION METRIC TONS of CO2 IN OUR FORESTS & WOOD PRODUCTS ANNUALLY Environmental Steward

  12. Slide 12: Superior Timberlands Holdings Create Value

    SUPERIOR HOLDINGS CREATE VALUE TODAY AND TOMORROW Unrivaled portfolio that cannot be replicated Diversified holdings at scale Superior supply chain Enduring value across market cycles Enhancing portfolio value through disciplined investments Unmatched timber-growing expertise TIMBERLANDS 12

  13. Slide 13: Our Timberlands Portfolio

    Adjusted EBITDA(1) by Region (2021) (1) See appendix for reconciliation to GAAP amounts and definition of Adjusted EBITDA. Other is excluded. Approximate total acres as of December 31, 2021. High value Douglas fir Premium land west of the Cascade mountains Sawlogs are approximately 90% of harvest Un

  14. Slide 14: Timberlands Customers

    THIRD-PARTY DOMESTIC CUSTOMERS WEYERHAEUSER MILLS EXPORT CUSTOMERS TIMBERLANDS REVENUE BY END MARKET (2021) We Flex Supply To Meet Dynamic Customer Demands and Capture Market Opportunities TIMBERLANDS CUSTOMERS Capture Full Value Through a Diverse Customer Mix

  15. Slide 15: Timberlands Export Markets

    Percentages based on 2021 full year Timberlands export sales. TIMBERLANDS EXPORT MARKETS Unrivaled Market Position and Supply Chain Expertise Percentages based on 2021 full year Timberlands export sales. EXPORT REVENUE JAPAN CHINA KOREA 69% 21% 9% UNIQUE JAPAN BUSINESS Multi-decade relationships sup

  16. Slide 16: $1 Billion Investment to Grow Timber Portfolio

    DISCIPLINED INVESTMENTS OF $1 BILLION TO GROW OUR TIMBER PORTFOLIO GOALS TO DRIVE GROWTH Enhancing Timberlands Portfolio Value by 2025 Target investment zones in U.S. West and U.S. South Generate near-term cash yields comparable to 2020-21 transactions leveraging WY scale and expertise Positioning p

  17. Slide 17: Maximize the Value of Every Acre We Own

    MAXIMIZE THE VALUE OF EVERY ACRE WE OWN REAL ESTATE, ENERGY & NATURAL RESOURCES Continually evaluate every acre Deliver a significant premium to timber value Serve rising demand for natural climate solutions Capture the full value of surface and subsurface assets Generate consistent and reliable cas

  18. Slide 18: Unlock Higher and Better Use Value

    REAL ESTATE, ENERGY & NATURAL RESOURCES Unlock Higher and Better Use (HBU) Value PREMIUM LAND SALES Maximizing Value from Each Acre Via HBU Parcels STEADY ROYALTY & LEASE INCOME Maximizing Value from Surface & Subsurface Assets ENERGY & NATURAL RESOURCES Wind & Solar Infrastructure Rights of Way Cel

  19. Slide 19: Natural Climate Solutions

    NATURAL CLIMATE SOLUTIONS Leveraging Our Unmatched Scale Preserving Valuable Ecosystems Leasing Land for Wind and Solar Production MITIGATION & CONSERVATION RENEWABLE ENERGY FOREST CARBON CARBON CAPTURE & STORAGE Participating in the Emerging Offsets Market Growing Our Current Business Subsurface Le

  20. Slide 20: Natural Climate Solutions: Building a $100 Million Business

    NATURAL CLIMATE SOLUTIONS Growing EBITDA as Carbon Markets Develop Building a $100 Million Business Adjusted EBITDA(1) 2021 growth primarily from current Mitigation, Conservation and Renewable Energy businesses Announced first forest carbon pilot project in Maine Signed first Carbon Capture and Stor

  21. Slide 21: Real Estate, Energy & Natural Resources Cash Generation

    REAL ESTATE, ENERGY & NATURAL RESOURCES Consistent, Reliable Cash Generation – Growing Natural Climate Solutions (1) See appendix for definition of Adjusted EBITDA and reconciliation to GAAP amounts. The quantity of real estate HBU property was reduced by divestitures of the company’s Michigan and M

  22. Slide 22: Wood Products: Maximizing Margin Through the Cycle

    WOOD PRODUCTS MAXIMIZING MARGIN THROUGH THE BUSINESS CYCLE Unmatched scale, brand and reputation Diversified mix of high-quality products Relentless focus on industry-leading cost structure Diverse customer mix and demand drivers Superior returns through the cycle: “Black at the bottom” Organically

  23. Slide 23: Wood Products Businesses: Lumber, OSB, Engineered Wood, Distribution

    LUMBER ORIENTED STRAND BOARD ENGINEERED WOOD PRODUCTS DISTRIBUTION 2nd largest producer in North America 19 lumber mills 5.4 BBF capacity 4th largest producer in North America 6 oriented strand board mills 3.1 BSF capacity Located in the largest homebuilding markets 19 distribution centers(1) Adjust

  24. Slide 24: Wood Products Diverse Demand Drivers and Customer Mix

    NEW RESIDENTIAL: SINGLE & MULTI-FAMILY REPAIR & REMODEL: PROFESSIONAL AND DIY PERCENT OF SALES BY END MARKET (2021) NON-RESIDENTIAL CONSTRUCTION, INDUSTRIAL AND OTHER USES WOOD PRODUCTS Diverse Demand Drivers and Customer Mix Percentages are approximate based on 2021 full year Wood Products net sale

  25. Slide 25: Prudent Investments to Serve Growing Demand

    WOOD PRODUCTS Prudent Investments to Serve Growing Demand for Wood-Based Building Growing production by 5% annually through 2025(1) Improving productivity and reliability of existing mills LUMBER ORIENTED STRAND BOARD ENGINEERED WOOD PRODUCTS DISTRIBUTION Optimizing production levels and mix as mark

  26. Slide 26: Industry-Leading Performance

    INDUSTRY-LEADING PERFORMANCE Significant, Sustainable Margin Improvement Through the Cycle

  27. Slide 27: Operational Excellence

    OPERATIONAL EXCELLENCE Delivering Sustainable Margin Improvement Through the Cycle SUSTAINABLE MARGIN IMPROVEMENT Our Ongoing Core OpX Focus EXPANDING OUR REACH WITH OPX 2.0 Finding Opportunity in Every Corner Future Value World Class Execution on Critical Activities That Generate Longer-Term Value

  28. Slide 28: Black at the Bottom Performance vs. Peers

    WE ACHIEVED Black at the Bottom PERFORMANCE IN MANUFACTURING DELIVERING SUPERIOR RELATIVE PERFORMANCE Industry-Leading Position TARGETING $175-250 MILLION OF ADDITIONAL OPX MARGIN IMPROVEMENTS FROM 2022-2025 Lumber and Oriented Strand Board WE CAPTURED MORE THAN $70 MILLION IN OPX IMPROVEMENTS IN 20

  29. Slide 29: Adjusted EBITDA vs. peers

    TIMBERLANDS ADJUSTED EBITDA(1,2) PER ACRE WEST LUMBER(4) ORIENTED STRAND BOARD SOUTH ENGINEERED WOOD PRODUCTS DISTRIBUTION Source for competitor data: public SEC filings, National Council of Real Estate Investment Fiduciaries (NCREIF). Results include only North American operations. See appendix for

  30. Slide 30: Disciplined Capital Allocation

    DISCIPLINED CAPITAL ALLOCATION Long-Term Commitment to Balancing Three Key Priorities

  31. Slide 31: Balanced Capital Allocation Philosophy

    INVEST IN OUR BUSINESSES RETURN CASH TO SHAREHOLDERS MAINTAIN AN APPROPRIATE CAPITAL STRUCTURE CORE ALLOCATION Investment Grade Credit Rating Disciplined Capital Expenditures Sustainable Base Dividend OPPORTUNISTIC ALLOCATION Value-Enhancing Growth Opportunities Liability Management Supplemental Div

  32. Slide 32: Returning Cash to Shareholders

    (1) See appendix for definition of Adjusted FAD and reconciliation to GAAP amounts. (2) Normally declared and paid annually in the first quarter, based on prior year results. RETURNING CASH TO SHAREHOLDERS Allocation Framework and Cash Return Calculation TARGETED RETURN OF CASH TO SHAREHOLDERS Calcu

  33. Slide 33: Cash Return Framework in Action

    CASH RETURN FRAMEWORK IN ACTION Returned Over $2 Billion of Cash To Shareholders Based on 2021 Results Returned $2.63 per share of dividends based on 2021 results Returned $100 million through opportunistic share repurchase Highest full year operating cash flow on record Record Wood Products results

  34. Slide 34: Targeting 5% Annual Base Dividend Growth

    TARGETING 5% ANNUAL BASE DIVIDEND GROWTH Driven by Timberlands and Natural Climate Solutions (1) Assumes current quarterly base dividend of $0.18 per share. Timberlands: Targeted acquisitions & Business Development $0.72 2022 Pro Forma 2025 Outlook 2023 2024 Current base dividend(1) Future BASE divi

  35. Slide 35: $1 Billion Share Repurchase Authorization

    $1 BILLION SHARE REPURCHASE AUTHORIZATION Increased share repurchase authorization to $1 billion in 2021 Q3 Repurchased $100 million in 2021(1) Repurchased additional $121 million in 2022 Q1(2) Approximately $800 million of remaining capacity under current authorization(3) Will continue to deploy op

  36. Slide 36: Capital Expenditures

    CAPITAL EXPENDITURES Organic Investments to Sustain and Enhance Our Operations CAPITAL EXPENDITURES $ in millions Wood Products: $320 million in 2022 Maintenance capex is $150-200 million Projects to improve costs and reliability Strategic lumber mill modernization Timberlands: $110 million in 2022

  37. Slide 37: Maintain an Appropriate Capital Structure

    Maintain AN appropriate capital structure Operating from Strong Financial Position with Significant Flexibility NET DEBT TO ADJUSTED EBITDA (LTM)(1) 3.5x INVESTMENT GRADE CREDIT PROFILE Baa2 Moody’s BBB Standard & Poor’s AMPLE LIQUIDITY OPPORTUNISTIC LIABILITY MGMT STRONG ASSET COVERAGE Over 80% of

  38. Slide 38: Market Dynamics for Our Products

    LUMBER ORIENTED STRAND BOARD WESTERN LOGS SOUTHERN LOGS market dynamics for our products Improving sawlog demand Fiber log demand generally stable Log pricing showing notable gains across several geographic sub-areas Emerging log export opportunity Sustained, high level of demand from residential co

  39. Slide 39: Weyerhaeuser Investment Thesis

    WEYERHAEUSER INVESTMENT THESIS UNMATCHED PORTFOLIO INDUSTRY-LEADING PERFORMANCE STRONG ESG FOUNDATION DISCIPLINED CAPITAL ALLOCATION + + Superior Shareholder Value +

  40. Slide 40: Appendix

    APPENDIX

  41. Slide 41: Wood Products Sales Realizations

    LUMBER(1) OSB(2) WOOD PRODUCTS SALES REALIZATIONS: CURRENT VS. 2022 Q1 WEYERHAEUSER’S AVERAGE SALES REALIZATIONS Approximate Change As of May 27, 2022 (1) Changes in average realizations typically lag changes in industry benchmark pricing due to length of order files. (2) WY reports OSB realizations

  42. Slide 42: Long-Term Growth in U.S. Housing

    Generation Z and Millennials are the largest population cohort, and entering peak homebuying years Renewed preference for single family homes, which use roughly 3x as much wood as multifamily units Current homebuilding rates will not fully address current deficit resulting from a decade of underbuil

  43. Slide 43: Strong Repair & Remodel Activity

    STRONG REPAIR & REMODEL ACTIVITY Strong repair & remodel spending, including larger professional built projects and steady do-it-yourself activity Housing stock continues to age, with median age greater than 40 years Increased consumer savings and home equity U.S. HOUSING STOCK MEDIAN AGE OF OWNER-O

  44. Slide 44: Lumber Demand and Fundamentals Are Favorable

    LUMBER DEMAND AND FUNDAMENTALS ARE FAVORABLE LUMBER PRICING FRAMING LUMBER COMPOSITE NORTH AMERICAN LUMBER CONSUMPTION BY END USE, 2021 Source: FEA Source: Random Lengths Q2 QTD as of 5/27/2022 Strong new residential construction activity and solid home improvement demand Expect 13% increase in Nort

  45. Slide 45: B.C. Mill Closures Have Reduced Industry Capacity

    Log supply declining in British Columbia due to fires, pine beetle and lower allowable cut Canadian lumber exports to the U.S. remain subject to duties Canadian share of lumber market has decreased U.S. Southern lumber production gaining share NORTH AMERICAN CAPACITY(1) % SHARE BY REGION NORTH AMERI

  46. Slide 46: OSB Market Fundamentals Are Positive

    OSB MARKET FUNDAMENTALS ARE POSITIVE Strong demand from new residential construction activity Favorable industry operating rates Current pricing well above historic levels Source: FEA ORIENTED STRAND BOARD PRICING 7/16” NORTH CENTRAL NORTH AMERICAN OSB CONSUMPTION BY END USE, 2021 Source: Random Len

  47. Slide 47: Western Logs: Favorable Domestic and Export Demand

    Largest driver of demand is growing U.S. housing activity Favorable Japanese demand for premium logs China continues to have strong import needs but faces constraints from suppliers in Australia, Europe and Russia Able to rapidly flex volume in response to changing markets JAPAN HOUSING STARTS WOOD-

  48. Slide 48: Southern Logs: Improving Sawlog Demand

    Sawlog demand improving as capacity and operating rates increase WY fiber log demand generally stable Log pricing showing notable gains across several geographic sub-areas WY’s timberlands are well-positioned to benefit from rising lumber production and capacity across the South Additional upside op

  49. Slide 49: Our Carbon Record

    For more information on our carbon record methodology, please visit carbonrecord.Weyerhaeuser.com OUR CARBON RECORD Our Net Climate Impact Is Significantly Carbon Negative The world needs MORE OF THIS 35 million mtCO2e in 2021 CARBON REMOVALS 2.3 billion and 3.6 billion mtCO2e CARBON STORAGE An Ambi

  50. Slide 50: ESG Ratings and Indices

    ESG RATINGS AND INDICES Leading Performance CDP Climate (1) The S&P Global Corporate Sustainability Assessment (CSA) was formerly known as the Dow Jones Sustainability Index (DJSI). (2) Rating as of May 1, 2022. ISS QualityScore ratings are reported monthly. ISS QualitySCORE(2) (1=most favorable) c

  51. Slide 51: Well-Laddered Debt Profile

    WELL-LADDERED DEBT PROFILE (1) $860 million WestRock note maturing 2023 includes extension option. Revolving credit facility was undrawn as of March 31, 2022. This credit facility has a capacity of $1.5 billion and expires in January 2025. $5.1 billion of long-term debt outstanding(1) 100% fixed rat

  52. Slide 52: Our Company Vision

    OUR COMPANY VISION OUR VISION > tnveriandandYorest products company” ~At 3.2 x ~~ a eS HOW WE WIN, Vv RELENTL Focus Develop our people tmesrty | rvs operation zens Delve the most value Great place to work Sstainabity {rom every ac Great customer fous Cptimize capital wine reat community support stai

  53. Slide 53: Adjusted EBITDA Reconciliation: Total Company

    (1) Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, basis of real estate sold, unallocated pension service costs and special items. Adjuste

  54. Slide 54: Net Debt to Adjusted EBITDA Reconciliation

    (1) LTM = last twelve months. (2) Net debt to Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Net debt to Adjusted EBITDA, as we define it, is long-term debt and borrowings on line of credit, net of cash and cash equivalents divided by the last

  55. Slide 55: Adjusted EBITDA Reconciliation: Timberlands

    (1) Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, basis of real estate sold, unallocated pension service costs and special items. Adjuste

  56. Slide 56: Adjusted EBITDA Reconciliation: Wood Products

    (1) Amounts presented reflect the results of operations acquired in our merger with Plum Creek Timber, Inc. beginning on the merger date of February 19, 2016. (2) Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it,

  57. Slide 57: Adjusted EBITDA Reconciliation: Real Estate, Energy & Natural Resources

    (1) Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, basis of real estate sold, unallocated pension service costs and special items. Adjuste

  58. Slide 58: Adjusted EBITDA Reconciliation: Natural Climate Solutions

    (1) Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, basis of real estate sold and special items. Adjusted EBITDA should not be considered i

  59. Slide 59: Adjusted Funds Available for Distribution Reconciliation

    ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION (FAD) RECONCILIATION (1) Funds available for distribution (FAD) is a non-GAAP measure that management uses to evaluate the company's liquidity. FAD, as we define it, is net cash from operations adjusted for capital expenditures. FAD measures cash generated d

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