Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Investor Presentation (March 2020)
57 slides from Weyerhaeuser's investor presentation, Mar 2, 2020
Slide 1: Weyerhaeuser Investor Presentation First Quarter 2020
Exhibit 99.1 Weyerhaeuser Investor Presentation First Quarter 2020
Slide 2: Forward Looking Statements and Non-GAAP Financial Measures
FORWARD LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES His esi mini ttc deca GE coi Totes Gk Seamer ii i esa he Pais Scant Rigi Matt At of 1885 Se ie ili without limitation, with 1 to: futur affecting market supply of lumber: key initiatives; adjusted EBITDA outlook: levels of demand and market
Slide 3: Weyerhaeuser Investment Thesis
WEYERHAEUSER INVESTMENT THESIS DISCIPLINED SUPERIOR UNMATCHED INDUSTRY-LEADING CAPITAL SHAREHOLDER PORTFOLIO PERFORMANCE ALLOCATION VALUE ay All [ ESG Strong ESG Foundation | Our Forests and Wood Products are Natural Climate Solutions
Slide 4: Unmatched Portfolio
UNMATCHED PORTFOLIO Our Quality, Diversity and Scale Cannot Be Replicated Wa Ba
Slide 5: Who We Are
WHO WE ARE A Tax-Efficient Timber REIT with Three Industry-Leading Businesses ome ge FS Te he | TIMBERLANDS "tf * We are the largest private timberland owner in North America AE Nie: St. Se = REAL ESTATE, ENERGY_ ~ 8 NATURALRESOURCES We deliver the most value from every acre’ ‘We area scale low;cost
Slide 6: What We Do
WHAT WE DO (je) Create and Capture Superior Value at Every Step Proprietary seedlings Customized planting Trgetedlsivicuture Healthy forests yield superior growth, deploys the best genetic ior are diverse, productive, wood ately sadlsinnel intrat ‘er aed piss abl vein and grown sustainably to charac
Slide 7: How We Do It: Strong ESG Foundation
osinaeg HOW WE DO IT ( Strong ESG Foundation > S) S ENVIRONMENTAL a) SOCIAL STEWARDSHIP RESPONSIBILITY 4 4 4 Sustainable Forest Safety & Human Capital Best Practices in Governance Management Workplace Culture 7 Environmental Impact . Board Composition Community Investment . . Carbon Footprint & Enga
Slide 8: Environmental Stewardship
ENVIRONMENTAL STEWARDSHIP Sustainable Forestry * Carbon Sequestration * Reduced Environmental Footprint Prac? & TIMBERLAN %& MANUFACTURING WE PLANT 150 ¥ MILLION TREES EVERY YEAR WE LEAVE TREE BUFFERS ALONG WATERWAYS TO PROTECT AQUATIC HABITAT » ~———ay ~ WE HARVEST ONLY 2% of our forests each year R
Slide 9: Social Responsibility & Governance
pebany, SOCIAL RESPONSIBILITY & GOVERNANCE © Human Capital Management « Ethics * Board Composition “ieee tw HUMAN CAPITAL MANAGEMENT 5]5 GOVERNANCE WE DRIVE SIGNIFICANT erigcpuine our SAFETY IMPROVEMENT 91 % Gate aey OW ORE OT GOVERNANCE 10.00, OF JOB OFFERS TURNOVER WORLD'S erin EXTENDED WERE REDUC
Slide 10: Timberlands
TIMBERLANDS v Unrivaled portfolio that cannot be replicated v Diversified holdings at scale "SUPERIOR - HOLDINGS CREATE VALUE TODAY AND TOMORROW v Unmatched timber-growing expertise v Superior supply chain v Enduring value across market cycles v Enhancing portfolio over time vlA
Slide 11: Our Timberlands Portfolio
oetbloves OUR TIMBERLANDS PORTFOLIO Unmatched Quality, Scale and Diversification om Es 3 High value Douglas-fir = Premium land west of the Cascade mountains MILLION ACHERIRTAE = Sawlogs are approximately 90% of harvest UNMATCHED = Unique Japan export presence | Premium Southern yellow pine 7 = Super
Slide 12: Timberlands Customers
TIMBERLANDS CUSTOMERS Capture Full Value Through a Diverse Customer Mix om TIMBERLANDS REVENUE BY END MARKET (2019) THIRD-PARTY WEYERHAEUSER EXPORT DOMESTIC CUSTOMERS MILLS CUSTOMERS We flex supply to meet dynamic customer demands and capture market opportunities rlA
Slide 13: Timberlands Export Markets
omhl hen TIMBERLANDS EXPORT MARKETS (o) Unrivaled Market Position and Supply Chain Expertise om UNIQUE JAPAN BUSINESS Multi-decade relationships supplying steady post & beam housing market Western timberlands ownership provides premium logs at unrivaled scale Largest log export facility in North EXP
Slide 14: Timberlands: Enduring Value Across Market Cycles
TIMBERLANDS Enduring Value Across Market Cycles NCREIF TIMBERLAND INDEX MARKET VALUE PER ACRE, BY REGION $ PER ACRE 1987 1991 1995 1999 2003 2007 —Northwest —=South ‘Source: NatoralCouncl of Real Estatelmestment Faucares (NCREF) Tinberand index 2011 2015 2019 ommetteo Perpetually Growing Asset wlA
Slide 15: Timberlands Portfolio Management
oetbloven 6 TIMBERLANDS PORTFOLIO MANAGEMENT Disciplined and Opportunistic Timberland Acres By Region 7.5 NEARLY 6.0 U.S. South 70% . . INCREASE | vi Continue to strategically 45 SINCE 2012. optimize and upgrade am portfolio 45% INCREASE SINCE 2012 v Strong deal sourcing, diligence and execution exp
Slide 16: Real Estate, Energy & Natural Resources
REAL ESTATE, ENERGY & NATURAL RESOURCES v Continually evaluate every acre v Deliver a significant premium to timber value MAXIMIZE \ z v Capture the full value of surface THE VALUE OF and subsurface assets EVERY ACRE . v Generate consistent and reliable cash flow l/s
Slide 17: Real Estate: Unlock Higher and Better Use Value
REAL ESTATE Unlock Higher and Better Use (HBU) Value Asset Value Optimization (AVO) PROCESS REAL ESTATE mn Nimble Business Model Low Operating Costs TIMBERLANDS Minimal Capital Investment CONTINUALLY EVALUATE EVERY ACRE ¥ 1.3 MILLION ACRES with HBU attributes 55-65% Premium to Timber Value SINCE INC
Slide 18: Energy & Natural Resources
ENERGY & NATURAL RESOURCES Maximize the Value of Surface and Sub-Surface Rights BALANCED Aggregates EBITDA MIX & Industrial Materials Aggregates & Industrial Materials
Slide 19: Real Estate, Energy & Natural Resources: Consistent Cash Generation
REAL ESTATE, ENERGY & NATURAL RESOURCES (a) Consistent, Reliable Cash Generation ADJUSTED EBITDA $in millions $264 $274 v Record Adjusted i : i I U » ono aueneteacts Michigan and Montana divestitures ADRBTFB>z=>#CWKY 2016 2017 2018 2019 2020 Outlook BB realestate |) energy & Natural Resources oy see
Slide 20: Wood Products
WOOD PRODUCTS MAXIMIZING © MARGIN | THROUGH THE _ BUSINESS Pee CYCLE y
Slide 21: Wood Products Portfolio
uy WOOD PRODUCTS PORTFOLIO (~) Industry-Leading Scale, Diversification and Quality one 2"4 largest producer in North America + 19 lumber mills LUMBER + 5.2 BBF capacity 4* largest producer Lumber TA Distribution in North America 44% * 6 oriented strand board mills ° + 3.0 BSF capacity wR 4 ‘i ) UNMA
Slide 22: Wood Products: Diverse Demand Drivers and Customer Mix
oetbloven WOOD PRODUCTS Diverse Demand Drivers and Customer Mix ommeve PERCENT OF SALES BY END MARKET (2019) NEW RESIDENTIAL: REPAIR & REMODEL: NON-RESIDENTIAL CONSTRUCTION SINGLE & MULTI-FAMILY PROFESSIONAL AND DIY AND INDUSTRIAL USES Customers value our quality, scale, reliability and sustainable
Slide 23: Wood Products: Positioned for Superior Performance
WOOD PRODUCTS eS Positioned for Superior Performance Through the Cycle Achieved Industry-Leading Cost Structure Improved EWP & Distribution EBITDA Through Market Headwinds ADJUSTED EBITDA” S240 Lumber 9 14% 15% Cost 100% Reduction $ in millions i 100% Cost Reduction 95% 95% 90% 90% $12 Z 2013 2014 «
Slide 24: Industry-Leading Performance
Slide 25: Operational Excellence 1.0
OPERATIONAL EXCELLENCE 1.0 Achieved $650 Million of Margin Improvements Since 2014 WOOD PRODUCTS CONTROLLABLE COSTS Efficient labor, maintenance & raw material usage TIMBERLANDS HARVEST & HAUL Increase efficiency and reduce cost WE ALSO SILVICULTURE COLLABORATED RELIABILITY Optimize site prep, thinn
Slide 26: Driving Superior Relative Performance
DRIVING SUPERIOR RELATIVE PERFORMANCE Our OpX Scorecard | TIMBERLANDS TJ ADJUSTED EBITDA".2) PER ACRE WEST 2011 2012" 2013" 214 2018 2016 2017. 218 2019 Weyerhaeuser Timberlands & ENR vs Peers SOUTH 2011 2012 2013 214" 2015" 26 2017 2018 2019 Weyerhaeuser Timberlands & ENR vs Peers Cd eee Rees “oro
Slide 27: OpX 2.0
OPX 2.0 Evolving Our Approach to Operational Excellence DELIVERING VALUE TO SHAREHOLDERS THROUGH SUPERIOR EXECUTION + ONGOING IMPROVEMENT IN 2020 TOP LINE Capture Maximum Value for Every Product BOTTOM LINE Deliver and Maintain Industry-Leading Cost Structure BLACK AT THE BOTTOM «+ #1IN EVERY BUSINE
Slide 28: Demonstrated Commitment to Balancing Three Key Priorities
Demonstrated Commitment to Balancing Three Key Priorities
Slide 29: Disciplined Capital Allocation
DISCIPLINED CAPITAL ALLOCATION Balanced Philosophy | Three Key Priorities RETURN CASH INVEST TO SHAREHOLDERS OUR BUSINESSES CORE ALLOCATION =) Sustainable (| .\ Disciplined Capital Wr Dividend Expenditures OPPORTUNISTIC ALLOCATION Share (jap) __ Value-Enhancing Repurchases _/ Growth Opportunities $1
Slide 30: Returning Cash to Shareholders
RETURNING CASH TO SHAREHOLDERS @ Demonstrated Commitment \_ DIVIDEND RETURNED NEARLY S) || $5 BILLION SINCE 2014 $8 BILLION SHARE REPURCHASE SINCE 2014 she $3 BILLION SINCE 2014 Quarterly Dividend of $0.34 Per Share Dividend declared onFebruary 14,2020. 30 | A
Slide 31: Disciplined Investments
DISCIPLINED INVESTMENTS Sustain and Enhance Our Operations CAPITAL EXPENDITURES $in millions $425 $419 $427 $384 $360 2016 2017 2018 2019 2020 Outlook 2020 OUTLOOK i Wood Products - $235 million * Maintenance capex Projects to improve costs and reliability i Timberlands - $120 million + Reforestatio
Slide 32: Maintain an Appropriate Capital Structure
MAINTAIN AN APPROPRIATE CAPITAL STRUCTURE @ Strong Balance Sheet and Financial Flexibility = AMPLE LIQUIDITY INVESTMENT GRADE STRONG ASSET © OPPORTUNISTIC COVERAGE LIABILITY MGMT CREDIT PROFILE $1.5 billion Reduced revolving line of credit || Nearly 85% future pension obligations of business assets
Slide 33: Capitalizing on Strong Portfolio and Operational Performance
Capitalizing on Strong Portfolio and Operational Performance S31lA
Slide 34: Improving Fundamentals Across Our Markets
Mion, IMPROVING FUNDAMENTALS ACROSS OUR MARKETS Driven by Continued Modest Growth in Residential Construction Activity a we BR } Strong economic fundamentals ff Increasing demand from rising 1 Rising domestic wood products } Favorable demographics construction activity production More focus on affor
Slide 35: Our Working Forests Are Part of the Climate Solution
OUR WORKING FORESTS ARE PART OF THE CLIMATE SOLUTION An Endlessly Renewable Resource that Absorbs and Stores Carbon OUR GROWING pORESTS WE PLANT-MORE TREES AS THEY GROW. WOOD IS THE ULTIMATE Green-Building Material STORE CARBON oo eee vy Endlessiighewable 3 & vy Lower’ GHG emissions ~* concrete & st
Slide 36: Weyerhaeuser Investment Thesis
WEYERHAEUSER INVESTMENT THESIS DISCIPLINED SUPERIOR UNMATCHED INDUSTRY-LEADING CAPITAL SHAREHOLDER PORTFOLIO PERFORMANCE ALLOCATION VALUE ay All [ ESG Strong ESG Foundation | Our Forests and Wood Products are Natural Climate Solutions
Slide 37: Appendix: Market Overview and Supplemental Information
APPENDIX Market Overview and Supplemental Information ar : TS * —
Slide 38: Fundamentals Support Continued Growth in U.S. Housing
FUNDAMENTALS SUPPORT CONTINUED GROWTH IN U.S. HOUSING * Solid economic fundamentals * Favorable consumer and homebuilder sentiment + Affordability boosted by historically low mortgage rates U.S. HOUSING STARTS SEASONALLY ADJUSTED ANNUAL RATE Single-family = Multi-family Millions of units 0 1970 1975
Slide 39: Level of Construction Remains Below Housing Need
LEVEL OF CONSTRUCTION REMAINS BELOW HOUSING NEED Millions Favorable demographics driving strong household formations Millennials entering prime homebuying years Growing housing “deficit” as current pace of building activity is not sufficient to meet demand U.S. POPULATION BY AGE AS OF JULY 1, 2018 M
Slide 40: New Home Sales Shifting Towards Lower Price Points
NEW HOME SALES SHIFTING TOWARDS LOWER PRICE POINTS Growing share of new home sales in lower price segments Builders adjusting product offerings to meet demand for affordable housing Labor, lots, and regulatory burdens remain headwinds in bringing affordable homes to market NEW HOME SALES CHANGE IN N
Slide 41: Steady Repair & Remodel Activity
STEADY REPAIR & REMODEL ACTIVITY Rising home equity supports home improvement activity + Expect continued growth in repair & remodel sales volumes U.S. HOUSING STOCK UNITS BY VINTAGE $Billions 0 2010s 2000s 1990s 1980s 1970s 1960s 1950s 1940s 1930s 1920s Pre-1920 YEAR OF CONSTRUCTION Source:U.S, Cen
Slide 42: Lumber Markets Strengthening
LUMBER MARKETS STRENGTHENING idential ion will drive it * Growing new + Steady repair and remodel activity + Industry closures have reduced available supply ing demand WEYERHAEUSER’S AVERAGE LUMBER SALES REALIZATIONS Approximate change AS OF FEBRUARY 21, 2020 + Rising focus on sustainable building p
Slide 43: Lumber: B.C. Mill Closures Have Reduced Industry Capacity
LUMBER 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 s
Slide 44: OSB Market Fundamentals Improving
OSB MARKET FUNDAMENTALS IMPROVING + Growing new resi i ion will drive i ing demand Steady repair and remodel activity Industry curtailments in 2019 have reduced available supply NORTH AMERICAN OSB ORIENTED STRAND BOARD PRICING NORTH CENTRAL OSB NNNOUNCE! INDUSTRY CURTAILMENTS, 2019 S/MSF Source: Com
Slide 45: Western Sawlogs
MBF WESTERN SAWLOGS Solid Demand and Improving Domestic Markets Largest driver of demand is growing U.S. housing activity Solid Japanese demand for premium logs Reduced China volume due to greater supply of European salvage logs Able to rapidly flex volume in response to changing markets WESTERN LOG
Slide 46: Southern Sawlogs
SOUTHERN SAWLOGS Rising Demand and Slowly Increasing Pricing . i ii i U.S. SOUTH CAPACITY ADDITIONS New Southern lumber capacity coming online pai + WY’s timberlands are well positi 1 to benefit from rising production across the South Future upside opportunity from Southern log exports SOUTHERN LOG
Slide 47: Well-Laddered Debt Profile
WELL-LADDERED DEBT PROFILE No Maturities Until 2021 DEBT MATURITY PROFILE™ $in millions Y $6.2 billion of long-term debt outstanding ™ 96% fixed rate ™ Weighted average maturity of 6.9 years ™ Weighted average interest rate of 5.9% V Revolver used for working 2020 2021 2022 2023 2024 2025 2026 2027
Slide 48: Environmental, Social & Governance: External Recognition
ENVIRONMENTAL, SOCIAL & GOVERNANCE External Recognition LISTINGS ON ESG INDICES ESG RATINGS AND RANKINGS WE ARE THE ONLY North American forestry or wood products company MeMBen oF jw Jones | . Sustainability Indices BAM In collaboration With sicitm ECPI Ey MSCI = STOXD< innovative. tosat. inoices. B
Slide 49: We Are Timber-Growing Experts
WE ARE TIMBER-GROWING EXPERTS Deeply Committed to Environmental Stewardship CUSTOMIZED PLANTING PROPRIETARY, SEEDLINGS TARGETED SI We cultivate seedlings with superior survival, growth, and wood-quality characteristics We depidy thie best genetic Tnatetial for each acre. gnourland base Our practices
Slide 50: Our Timber Supply-Chain Expertise Is Unrivaled
OUR TIMBER SUPPLY-CHAIN EXPERTISE IS UNRIVALED We Capture Maximum Value At Each Step MATURE FORESTS SUSTAINABLE HARVESTING DATA-DRIVEN MARKETING OPTIMIZED TRANSPORTATION We grow diverse product Our experthan/¢st planning ‘Weimaximnize thévalue We offer dependable, year-round fferingsin scale quantit
Slide 51: Our Wood Products Supply Chain Is Efficient
OUR WOOD PRODUCTS SUPPLY CHAIN IS EFFICIENT We Drive Out Cost and Maximize Value From Raw Materials to End Use FIBER PROCUREMENT, LOW-COST MANUFACTURING We source the optimal mix of Our operational excellence and raw materials internally and Sd externally to maximize margins for lumber, OSB a WE MAX
Slide 52: Our Vision
Working together to be the world’s premier O U R Vi S | O N timber, land, and forest products company WHAT IT LOOKS LIKE 4 RELENTLESS WEYERHAEUSER FOCUS ATRULY GREAT COMPANY Develop our people HOW WE WIN » 4 Safety Integrity + ive operat excellence Citizenship Be courageous Deliver the most value |
Slide 53: Adjusted EBITDA Reconciliation: Total Company
ADJUSTED EBITDA RECONCILATION Total Company 2016 2017 2018 2019 1,583 $ 2,080 $ 2,032 $ 1,276 Depletion, depreciation & amortization (512) (21) (486) (510) Basis of real estate sold (109) (1) (124) (116) Unallocated pension service costs () 4 Special items included in operating income (135) (343) (2
Slide 54: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA RECONCILATION Total Company $ Millions 2016 2017 2019 ag gs as gs as at ts Net Debt to Adjusted EBITDA (LTM) 123 6761 5.3) 37) 36 3329 25,30) 3339 4749 Total debt $7,715] $8013, $8310) $6,610] $6,606, $6,604) $5,995 221 $6,344] $6401, $6,293] $6,590] $6377 Less: Cash and
Slide 55: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILATION Timberlands 2011 2012 2013 2014 2015 2016 2017 2018 2019 Western Timberlands and Energy & Natural Resources (ENR) $283 $263 $380 $579 $470 $449 $520 $544 $332 Less: EBITDA attributable to Western ENR’ 4 7 8 W 6 12 12 14 Western Timberlands 279 258 373 571 459 443 508 53
Slide 56: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILATION Wood Products 2011 2012 2013 2014 2015 2016" 2017 2018 2019 ($7) $130 $317 $319 $212 $289 $459 $459 $183 ) 143 247 46 4 183 359 329 59 EWP 6 7 45 79 114 145 173 177 207 Distribution @7) (29) 33) 2 10 25 38 32 33 Other a) (15) 2) = 6) qa) a2) (10) (6) Adjusted EBITDA? ($
Slide 57: Adjusted EBITDA Reconciliation: Real Estate, Energy & Natural Resources
ADJUSTED EBITDA RECONCILATION Real Estate, Energy & Natural Resources 2016 = 2017-— 2018 = .2019 Real Estate $142) $178) $196 $193 Energy & Natural Resources 47 63 68 81 Adjusted EBITDA' $189 $241 $264 $274 Depletion, Depreciation & (13) as) aay) ay Basis of Real Estate Sold (109) (81) (124) (116) S