Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q3 2024 Earnings Presentation
30 slides from Weyerhaeuser's earnings presentation, Oct 25, 2024
Slide 1: Earnings Results Third Quarter 2024
EARNINGS RESULTS THIRD 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 fourth quarter 2
Slide 3: 2024 Q3 Consolidated Results
2024 Q3 CONSOLIDATED RESULTS $ Millions 2024 2024 $ Millions (except EPS) 2024 2024 Adjusted EBITDA Q2 Q3 Change Consolidated Statement of Operations Q2 Q3 Timberlands $ 147 $ 122 $ (25) Net sales $ 1,939 $ 1,681 Real Estate, Energy & Natural Resources 102 77 (25) Costs of sales 1,535 1,431 Wood Pro
Slide 4: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS $ Millions (except EPS) 2024 Q2 2024 Q3 Pretax After-Tax Diluted Pretax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 181 $ 154 $ 0.21 $ 23 $ 35 $ 0.05 Special Items: Product remediation recovery 25 19 0.03 — — — (1) Restr
Slide 5: Adjusted EBITDA
ADJUSTED EBITDA1 TOTAL COMPANY2 REAL ESTATE & ENR $600 $120 $509 $102 $500 $469 $100 $94 $94 $89 $395 $410 $400 $80 $77 $352 $ Millions $ Millions $70 $67 $321 $300 $60 $236 $200 $40 $100 $20 $0 $0 Q1.23 Q2.23 Q3.23 Q4.23 Q1.24 Q2.24 Q3.24 Q1.23 Q2.23 Q3.23 Q4.23 Q1.24 Q2.24 Q3.24 Real Estate $ 63 4
Slide 6: Timberlands Segment
TIMBERLANDS SEGMENT TIMBERLANDS ($ Millions) 2024 2024 TIMBERLANDS ($ Millions) 2024 2024 Adjusted EBITDA by Region Q2 Q3 Segment Statement of Operations Q2 Q3 West $ 79 $ 54 Third-party sales $ 409 $ 357 South 70 72 Intersegment sales 146 136 North 1 (1) Total Sales 555 493 Other (3) (3) Costs of s
Slide 7: Timberlands Key Drivers: 2024 Q3 vs. 2024 Q2
TIMBERLANDS KEY DRIVERS: 2024 Q3 vs. 2024 Q2 REGION KEY DRIVERS WEST • Fee Harvest Volumes: Moderately lower, driven by higher elevation harvest operations and temporary harvest restrictions due to wildfire risk • Sales Volumes: Lower for domestic and export • Sales Realizations: Lower for domestic
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 $36.68 Volumes (Thousands of tons) Volumes (Thousands of tons) 3,000 5,600 $36 $160 $137.10 Realizat
Slide 9: Fee Harvest Volumes and Intersegment Sales Volumes
FEE HARVEST VOLUMES AND INTERSEGMENT SALES VOLUMES FEE HARVEST VOLUMES INTERSEGMENT LOG SALES VOLUMES 7,500 1,500 6,432 6,430 6,293 6,146 6,169 6,070 1,225 1,222 1,207 5,990 1,188 1,172 6,250 1,151 1,200 Thousands of tons Thousands of tons 1,098 5,000 859 855 900 793 821 753 779 745 3,750 600 2,245
Slide 10: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & NATURAL RESOURCES (ENR) SEGMENT REAL ESTATE & ENR ($ Millions) 2024 2024 REAL ESTATE & ENR ($ Millions) 2024 2024 Adjusted EBITDA by Business Q2 Q3 Segment Statement of Operations Q2 Q3 Real Estate $ 70 $ 51 Total sales $ 109 $ 89 Energy & Natural Resources 32 26 Costs of sales
Slide 11: Average Price Per Acre and Acres Sold
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 $2,808 $3,000 $3,227 $3,215 $3,241 $3,033 $1,992 $2,000 $1,501 $2,062 $1,381 $1,000 Q1.20 Q2.20 Q3.20 Q4.20 Q1
Slide 12: Wood Products Segment
WOOD PRODUCTS SEGMENT WOOD PRODUCTS ($ Millions) 2024 2024 WOOD PRODUCTS ($ Millions) 2024 2024 Adjusted EBITDA by Business Q2 Q3 Segment Statement of Operations Q2 Q3 Lumber $ (8) $ (29) Total sales $ 1,421 $ 1,235 OSB 122 39 Costs of sales 1,185 1,132 Engineered Wood Products 92 61 Gross margin 23
Slide 13: Wood Products Key Drivers: 2024 Q3 vs. 2024 Q2
WOOD PRODUCTS KEY DRIVERS: 2024 Q3 vs. 2024 Q2 BUSINESS KEY DRIVERS LUMBER • Sales Realizations: Decreased 4% • Sales Volumes: Moderately lower, reduced production levels • Unit Manufacturing Costs: Moderately higher • Log Costs: Slightly lower ORIENTED • Sales Realizations: Decreased 25% STRAND BOA
Slide 14: Third-Party Sales Volumes and Realizations
THIRD-PARTY SALES VOLUMES AND REALIZATIONS1 Lumber OSB 2,800 $600 2,400 $500 $416 $407 $479 $481 Volumes (Millions of Square Ft.) 2,000 Volumes (Millions of Board Ft.) $450 $400 $429 $419 $359 2,100 $450 $344 Realizations ($/M 3/8") $413 $404 Realizations ($/MBF) 1,600 $299 $305 $269 $300 1,400 $300
Slide 15: Unallocated Items
UNALLOCATED ITEMS UNALLOCATED ITEMS ($ Millions)1 1 2024 2024 UNALLOCATED ITEMS ($ Millions) 2024 2024 Q2 Q3 Q2 Q3 Unallocated corporate function expenses and Costs of sales 3 $ — $ 6 $ (37) $ (32) variable compensation expense G&A expense4 (46) (51) Liability classified share-based compensation 3 (
Slide 16: Financial Items
FINANCIAL ITEMS KEY FINANCIAL METRICS ($ Millions) 2024 2024 Cash Flow from Operations $900 Q2 Q3 $750 Ending cash balance $ 997 $ 877 $600 $523 Total debt $ 5,072 $ 5,074 $ Millions $496 $432 $450 Net debt to Adjusted EBITDA (LTM)1 2.6 3.2 $288 Net debt to enterprise value2 16% 15% $300 $126 $234 $
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 Q4
OUTLOOK: 2024 Q4 EXPECTED EARNINGS1 SEGMENT KEY DRIVERS & ADJUSTED EBITDA TIMBERLANDS Comparable to 2024 Q3 West South North Fee Harvest Volumes: Fee Harvest Volumes: Fee Harvest Volumes: Moderately lower Slightly higher Moderately higher Sales Volumes: Sales Realizations: Sales Realizations: Compar
Slide 19: 2024 Outlook: Update
2024 OUTLOOK: UPDATE DRIVER UPDATED 2024 OUTLOOK PRIOR 2024 OUTLOOK Approximately 34.5 million tons Approximately 35.5 million tons • South: Slightly lower than 2023 • South: Slightly higher than 2023 FEE HARVEST VOLUME • West: Unchanged • West: Slightly higher than 2023 • North: Unchanged • North:
Slide 20: Wood Products Sales Realizations: Current vs. 2024 Q3
WOOD PRODUCTS SALES REALIZATIONS: CURRENT VS. 2024 Q3 WEYERHAEUSER’S AVERAGE SALES REALIZATIONS Approximate Change As of October 18, 2024 LUMBER1 Q4 QTD vs. WY’s +$30/MBF HIGHER SENSITIVITY Q3 AVERAGE CHANGE IN REALIZATIONS $10/MBF ≈ $50 million CURRENT vs. EBITDA +$30/MBF HIGHER ANNUALLY Q3 AVERAGE
Slide 21: Supplemental Timberlands Information
SUPPLEMENTAL TIMBERLANDS INFORMATION Adjusted EBITDA1 Per Acre WESTERN TIMBERLANDS 2022 2023 2024 SOUTHERN TIMBERLANDS 2022 2023 2024 FY FY Q1 Q2 Q3 YTD FY FY Q1 Q2 Q3 YTD 1 Adjusted EBITDA ($ Millions) $ 473 $ 344 $ 76 $ 79 $ 54 $ 209 1 Adjusted EBITDA ($ Millions) $ 307 $ 306 $ 69 $ 70 $ 72 $ 211
Slide 22: Earnings Summary
EARNINGS SUMMARY $ Millions (except EPS) 2023 2024 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Q2 Q3 Timberlands $ 188 $ 172 $ 143 $ 143 $ 144 $ 147 $ 122 Real Estate, Energy & Natural Resources 89 70 94 67 94 102 77 Wood Products 148 270 328 159 184 225 91 Unallocated Items (30) (43) (56) (48) (70) (
Slide 23: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Diluted EPS Before Special Items $ 0.21 $ 0.32 $ 0.33 $ 0.16 $ 0.16 $ 0.21 $ 0.05 Special Items (Income Tax Affected): Environmental remediation charge — (0.01) — — — — — Gain on sale of timberlands — — — 0.12 — — — Insurance recovery
Slide 24: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION By Segment $ Millions 2021 2022 2023 2024 FY FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 LTM1 Timberlands $ 693 $ 784 $ 188 $ 172 $ 143 $ 143 $ 646 $ 144 $ 147 $ 122 $ 556 Real Estate & ENR 296 329 89 70 94 67 320 94 102 77 340 Wood Products 3,357 2,737 148 270 328 159 905 184 225 91 6
Slide 25: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION Timberlands $ Millions 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 West $ 105 $ 94 $ 72 $ 73 $ 76 $ 79 $ 54 South 81 79 73 73 69 70 72 North 4 — 1 1 2 1 (1) Other (2) (1) (3) (4) (3) (3) (3) 1 Total Timberlands Adjusted EBITDA $ 188 $ 172 $ 143 $ 143 $ 144 $ 147 $ 122 West (28) (29
Slide 26: Adjusted EBITDA Reconciliation: Real Estate, Energy & Natural Resources
ADJUSTED EBITDA RECONCILIATION Real Estate, Energy & Natural Resources $ Millions 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Real Estate $ 63 $ 40 $ 71 $ 32 $ 73 $ 70 $ 51 Energy & Natural Resources 26 30 23 35 21 32 26 1 Total Real Estate & ENR Adjusted EBITDA $ 89 $ 70 $ 94 $ 67 $ 94 $ 102 $ 77 Depletion, dep
Slide 27: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION Wood Products $ Millions 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Lumber $ 8 $ 51 $ 58 $ (34) $ (5) $ (8) $ (29) OSB 22 37 118 73 87 122 39 EWP 82 144 125 104 86 92 61 Distribution 22 34 31 16 20 18 14 Other 14 4 (4) — (4) 1 6 Total Wood Products Adjusted EBITDA1, 2 $ 148 $ 270
Slide 28: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION Unallocated $ Millions 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Total Unallocated Adjusted EBITDA1 $ (30) $ (43) $ (56) $ (48) $ (70) $ (64) $ (54) Total depletion, depreciation & amortization (2) (1) (2) (2) (2) (1) (3) Special items included in operating loss — (11) — (27) — —
Slide 29: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA RECONCILIATION $ Millions 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Net Debt to Adjusted EBITDA (LTM)1, 2 1.7 2.2 2.2 2.3 2.5 2.6 3.2 Total debt $ 5,053 $ 5,797 $ 5,679 $ 5,069 $ 5,071 $ 5,072 $ 5,074 Less: cash and cash equivalents and short-term investments 797 1,760 1,841 1,164 8
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 Q3 YTD Net cash from operations $ 3,159 $ 2,832 $ 1,433 $ 124 $ 432 $ 234 $ 790 Capital expenditures (441) (468) (447) (79) (91) (97) (267) 1 Funds Available for