Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q2 2024 Earnings Presentation
30 slides from Weyerhaeuser's earnings presentation, Jul 26, 2024
Slide 1: Earnings Results Second Quarter 2024
EARNINGS RESULTS SECOND 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 third quarter 20
Slide 3: 2024 Q2 Consolidated Results
2024 Q2 CONSOLIDATED RESULTS $ Millions 2024 2024 $ Millions (except EPS) 2024 2024 Adjusted EBITDA Q1 Q2 Change Consolidated Statement of Operations Q1 Q2 Timberlands $ 144 $ 147 $ 3 Net sales $ 1,796 $ 1,939 Real Estate, Energy & Natural Resources 94 102 8 Costs of sales 1,441 1,535 Wood Products
Slide 4: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS $ Millions (except EPS) 2024 Q1 2024 Q2 Pretax After-Tax Diluted Pretax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 134 $ 114 $ 0.16 $ 181 $ 154 $ 0.21 Special Items: Product remediation recovery — — — 25 19 0.03 Total S
Slide 5: Adjusted EBITDA
ADJUSTED EBITDA1 TOTAL COMPANY2 REAL ESTATE & ENR $600 $120 $509 $102 $500 $469 $100 $94 $94 $89 $395 $410 $400 $352 $80 $ Millions $ Millions $70 $67 $321 $300 $60 $200 $40 $100 $20 $0 $0 Q1.23 Q2.23 Q3.23 Q4.23 Q1.24 Q2.24 Q1.23 Q2.23 Q3.23 Q4.23 Q1.24 Q2.24 Real Estate $ 63 40 71 32 73 70 ENR $ 2
Slide 6: Timberlands Segment
TIMBERLANDS SEGMENT TIMBERLANDS ($ Millions) 2024 2024 TIMBERLANDS ($ Millions) 2024 2024 Adjusted EBITDA by Region Q1 Q2 Segment Statement of Operations Q1 Q2 West $ 76 $ 79 Third-party sales $ 387 $ 409 South 69 70 Intersegment sales 134 146 North 2 1 Total Sales 521 555 Other (3) (3) Costs of sal
Slide 7: Timberlands Key Drivers: 2024 Q2 vs. 2024 Q1
TIMBERLANDS KEY DRIVERS: 2024 Q2 vs. 2024 Q1 REGION KEY DRIVERS WEST • Fee Harvest Volumes: Moderately higher, seasonally favorable operating conditions • Domestic Sales Volumes: Moderately higher • Export Sales Volumes: Significantly higher • Sales Realizations: Slightly higher, primarily due to in
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 $37.49 $36.92 $37.15 $36.93 $36.89 Volumes (Thousands of tons) Volumes (Thousands of tons) 3,000 5,600 $36 $160 $137.10 Realizations ($
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 6,293 6,146 6,169 1,225 1,222 5,990 1,188 6,250 1,172 1,151 1,200 Thousands of tons Thousands of tons 1,098 5,000 859 855 900 793 753 779 745 3,750 600 2,245 2,292 2,214 2,35
Slide 10: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & NATURAL RESOURCES (ENR) SEGMENT REAL ESTATE & ENR ($ Millions) 2024 2024 REAL ESTATE & ENR ($ Millions) 2024 2024 Adjusted EBITDA by Business Q1 Q2 Segment Statement of Operations Q1 Q2 Real Estate $ 73 $ 70 Total sales $ 107 $ 109 Energy & Natural Resources 21 32 Costs of sale
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 $4,005 $4,385 $4,202 $3,785 $3,629 $4,000 $3,803 $3,000 $3,227 $3,215 $3,241 $3,033 $1,992 $2,000 $1,501 $2,062 $1,381 $1,000 Q1.20 Q2.20 Q3.20 Q4.20 Q1.21 Q2.
Slide 12: Wood Products Segment
WOOD PRODUCTS SEGMENT WOOD PRODUCTS ($ Millions) 2024 2024 WOOD PRODUCTS ($ Millions) 2024 2024 Adjusted EBITDA by Business Q1 Q2 Segment Statement of Operations Q1 Q2 Lumber $ (5) $ (8) Total sales $ 1,302 $ 1,421 OSB 87 122 Costs of sales 1,107 1,185 Engineered Wood Products 86 92 Gross margin 195
Slide 13: Wood Products Key Drivers: 2024 Q2 vs. 2024 Q1
WOOD PRODUCTS KEY DRIVERS: 2024 Q2 vs. 2024 Q1 BUSINESS KEY DRIVERS LUMBER • Sales Realizations: Decreased 2% • Sales Volumes: Moderately higher, partially due to increased production following Q1 winter weather disruptions • Unit Manufacturing Costs: Moderately lower • Log Costs: Slightly lower ORI
Slide 14: Third-Party Sales Volumes and Realizations
THIRD-PARTY SALES VOLUMES AND REALIZATIONS1 Lumber OSB 2,800 $600 2,400 $500 $416 $407 $481 Volumes (Millions of Square Ft.) $479 2,000 Volumes (Millions of Board Ft.) $450 $400 $429 $419 $359 2,100 $450 $344 Realizations ($/M 3/8") $413 Realizations ($/MBF) 1,600 $299 $269 $300 1,400 $300 1,200 1,1
Slide 15: Unallocated Items
UNALLOCATED ITEMS 1 1 UNALLOCATED ITEMS ($ Millions) 2024 2024 UNALLOCATED ITEMS ($ Millions) 2024 2024 Q1 Q2 Q1 Q2 Unallocated corporate function expenses and Costs of sales3 $ (12) $ — $ (38) $ (37) variable compensation expense 4 G&A expense (49) (46) Liability classified share-based compensation
Slide 16: Financial Items
FINANCIAL ITEMS KEY FINANCIAL METRICS ($ Millions) 2024 2024 Cash Flow from Operations $900 Q1 Q2 $750 Ending cash balance $ 871 $ 997 $600 $523 Total debt $ 5,071 $ 5,072 $ Millions $496 $432 $450 Net debt to Adjusted EBITDA (LTM) 1 2.5 2.6 $288 Net debt to enterprise value2 14% 16% $300 $126 $150
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: Timberlands Growth Strategy Update
TIMBERLANDS GROWTH STRATEGY UPDATE Disciplined Approach to Growing the Value of Our Timberlands TARGET ANNOUNCED ACQUISITIONS Approximate Location of Transaction Activity $1 Billion of Disciplined Western Timberlands Southern Timberlands Investments from 2022 to 2025 PROGRESS ~$775 Million1 Includin
Slide 19: Outlook: 2024 Q3
OUTLOOK: 2024 Q3 EXPECTED EARNINGS1 SEGMENT KEY DRIVERS & ADJUSTED EBITDA TIMBERLANDS Approximately $20-$30 West South North million lower than 2024 Q2 Fee Harvest Volumes: Fee Harvest Volumes: Fee Harvest Volumes: Slightly lower Moderately higher Significantly higher, seasonal Sales Volumes: Sales
Slide 20: Wood Products Sales Realizations: Current vs. 2024 Q2
WOOD PRODUCTS SALES REALIZATIONS: CURRENT VS. 2024 Q2 WEYERHAEUSER’S AVERAGE SALES REALIZATIONS Approximate Change As of July 19, 2024 LUMBER1 Q3 QTD vs. WY’s -$25/MBF LOWER SENSITIVITY Q2 AVERAGE CHANGE IN REALIZATIONS $10/MBF ≈ $50 million CURRENT vs. EBITDA -$20/MBF LOWER ANNUALLY Q2 AVERAGE OSB2
Slide 21: Supplemental Timberlands Information
SUPPLEMENTAL TIMBERLANDS INFORMATION Adjusted EBITDA1 Per Acre WESTERN TIMBERLANDS 2022 2023 2024 SOUTHERN TIMBERLANDS 2022 2023 2024 FY FY Q1 Q2 YTD FY FY Q1 Q2 YTD 1 1 Adjusted EBITDA ($ Millions) $ 473 $ 344 $ 76 $ 79 $ 155 Adjusted EBITDA ($ Millions) $ 307 $ 306 $ 69 $ 70 $ 139 2 2 Acres (Thous
Slide 22: Earnings Summary
EARNINGS SUMMARY $ Millions (except EPS) 2023 2024 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Q2 Timberlands $ 188 $ 172 $ 143 $ 143 $ 144 $ 147 Real Estate, Energy & Natural Resources 89 70 94 67 94 102 Wood Products 148 270 328 159 184 225 Unallocated Items (30) (43) (56) (48) (70) (64) Total Adjus
Slide 23: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Diluted EPS Before Special Items $ 0.21 $ 0.32 $ 0.33 $ 0.16 $ 0.16 $ 0.21 Special Items: Environmental remediation charge — (0.01) — — — — Gain on sale of timberlands — — — 0.12 — — Insurance recovery — — — 0.01 — — Legal benefit — — — 0
Slide 24: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION By Segment $ Millions 2021 2022 2023 2024 FY FY Q1 Q2 Q3 Q4 FY Q1 Q2 LTM1 Timberlands $ 693 $ 784 $ 188 $ 172 $ 143 $ 143 $ 646 $ 144 $ 147 $ 577 Real Estate & ENR 296 329 89 70 94 67 320 94 102 357 Wood Products 3,357 2,737 148 270 328 159 905 184 225 896 Unallocated
Slide 25: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION Timberlands $ Millions 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 West $ 105 $ 94 $ 72 $ 73 $ 76 $ 79 South 81 79 73 73 69 70 North 4 — 1 1 2 1 Other (2) (1) (3) (4) (3) (3) 1 Total Timberlands Adjusted EBITDA $ 188 $ 172 $ 143 $ 143 $ 144 $ 147 West (28) (29) (27) (27) (27) (29) Sou
Slide 26: Adjusted EBITDA Reconciliation: Real Estate, ENR
ADJUSTED EBITDA RECONCILIATION Real Estate, Energy & Natural Resources $ Millions 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Real Estate $ 63 $ 40 $ 71 $ 32 $ 73 $ 70 Energy & Natural Resources 26 30 23 35 21 32 Total Real Estate & ENR Adjusted EBITDA1 $ 89 $ 70 $ 94 $ 67 $ 94 $ 102 Depletion, depreciation & amort
Slide 27: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION Wood Products $ Millions 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Lumber $ 8 $ 51 $ 58 $ (34) $ (5) $ (8) OSB 22 37 118 73 87 122 EWP 82 144 125 104 86 92 Distribution 22 34 31 16 20 18 Other 14 4 (4) — (4) 1 Total Wood Products Adjusted EBITDA1, 2 $ 148 $ 270 $ 328 $ 159 $ 184 $ 2
Slide 28: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION Unallocated $ Millions 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 1 Total Unallocated Adjusted EBITDA $ (30) $ (43) $ (56) $ (48) $ (70) $ (64) Total depletion, depreciation & amortization (2) (1) (2) (2) (2) (1) Special items included in operating loss — (11) — (27) — — Operating Lo
Slide 29: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA RECONCILIATION $ Millions 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 1, 2 Net Debt to Adjusted EBITDA (LTM) 1.7 2.2 2.2 2.3 2.5 2.6 Total debt $ 5,053 $ 5,797 $ 5,679 $ 5,069 $ 5,071 $ 5,072 Less: cash and cash equivalents and short-term investments 797 1,760 1,841 1,164 871 997 Net Deb
Slide 30: Funds Available for Distribution Reconciliation
FUNDS AVAILABLE FOR DISTRIBUTION RECONCILIATION ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION ($ Millions) 2021 2022 2023 2024 FY FY FY Q1 Q2 YTD Net cash from operations $ 3,159 $ 2,832 $ 1,433 $ 124 $ 432 $ 556 Capital expenditures (441) (468) (447) (79) (91) (170) 1 Funds Available for Distribution $