Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q1 2023 Earnings Presentation
29 slides from Weyerhaeuser's earnings presentation, Apr 28, 2023
Slide 1: 2023 Earnings Results: First Quarter 2023
2023 EARNINGS RESULTS FIRST QUARTER 2023
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 cash dividend
Slide 3: 2023 Q1 Consolidated Results
2023 Q1 CONSOLIDATED RESULTS $ Millions 2022 2023 $ Millions (except EPS) 2022 2023 Adjusted EBITDA Q4 Q1 Change Consolidated Statement of Operations Q4 Q1 Timberlands $ 150 $ 188 $ 38 Net sales $ 1,823 $ 1,881 Real Estate, Energy & Natural Resources 46 89 43 Costs of sales 1,434 1,512 Wood Products
Slide 4: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS $ Millions (except EPS) 2022 Q4 2023 Q1 Pretax After-Tax Diluted Pretax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 181 $ 171 $ 0.24 $ 173 $ 151 $ 0.21 Special Items: Pension settlement charge 205 152 0.21 — — — 1 Restru
Slide 5: Adjusted EBITDA
ADJUSTED EBITDA1 $1,650 TOTAL COMPANY2 REAL ESTATE & ENR $1,497 $150 $1,320 $1,205 $116 $107 $ Millions $ Millions $990 $100 $89 $660 $583 $60 $50 $46 $369 $395 $330 $0 $0 Q1.22 Q2.22 Q3.22 Q4.22 Q1.23 Q1.22 Q2.22 Q3.22 Q4.22 Q1.23 Real Estate $ 87 83 24 12 63 ENR $ 29 24 36 34 26 $300 TIMBERLANDS $
Slide 6: Timberlands Segment
TIMBERLANDS SEGMENT TIMBERLANDS ($ Millions) 2022 2023 TIMBERLANDS ($ Millions) 2022 2023 Adjusted EBITDA by Region Q4 Q1 Segment Statement of Operations Q4 Q1 West $ 72 $ 105 Third-party sales $ 437 $ 462 South 77 81 Intersegment sales 111 142 North 5 4 Total Sales 548 604 Other (4) (2) Costs of sa
Slide 7: Timberlands Key Drivers: 2023 Q1 vs. 2022 Q4
TIMBERLANDS KEY DRIVERS: 2023 Q1 vs. 2022 Q4 REGION KEY DRIVERS WEST • Fee Harvest Volumes: Significantly higher, resulting from no work stoppage impacts, which affected one month of operations in 2022 Q4 • Sales Volumes: Significantly higher, primarily for China • Sales Realizations: Lower, primari
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 $173.35 $38.47 $38.59 $38.67 $38.23 Volumes (Thousands of tons) $37.15 Volumes (Thousands of tons) $161.29 $158.59 3,000 5,600 $36 $141.88 $16
Slide 9: Fee Harvest Volumes and Intersegment Sales Volumes
FEE HARVEST VOLUMES AND INTERSEGMENT SALES VOLUMES FEE HARVEST VOLUMES1 INTERSEGMENT LOG SALES VOLUMES1 7,500 1,500 6,432 6,159 6,112 6,216 1,206 5,842 1,189 1,186 1,188 6,250 1,200 1,106 Thousands of tons Thousands of tons 5,000 900 799 721 753 3,750 555 600 481 2,240 2,245 2,500 2,085 1,760 1,773
Slide 10: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & NATURAL RESOURCES (ENR) SEGMENT REAL ESTATE & ENR ($ Millions) 2022 2023 REAL ESTATE & ENR ($ Millions) 2022 2023 Adjusted EBITDA by Business Q4 Q1 Segment Statement of Operations Q4 Q1 Real Estate $ 12 $ 63 Total sales $ 55 $ 101 Energy & Natural Resources 34 26 Costs of sales
Slide 11: Real Estate, ENR Segment: Acres Sold and Price per Acre
REAL ESTATE, ENERGY & NATURAL RESOURCES (ENR) SEGMENT ACRES SOLD AVERAGE PRICE PER ACRE 50 $7,000 45 $6,316 $6,000 40 $5,550 35 $5,046 Acres (Thousands) Price per acre 31 $5,000 30 $4,385 27 $4,005 24 $4,000 $3,785 21 19 $3,803 20 18 $3,000 $3,227 $3,215 $3,241 11 10 $1,992 7 $2,000 5 $1,501 3 1 $1,
Slide 12: Wood Products Segment
WOOD PRODUCTS SEGMENT WOOD PRODUCTS ($ Millions) 2022 2023 WOOD PRODUCTS ($ Millions) 2022 2023 Adjusted EBITDA by Business Q4 Q1 Segment Statement of Operations Q4 Q1 Lumber $ 8$ 8 Total sales $ 1,331 $ 1,318 OSB 54 22 Costs of sales 1,116 1,159 Engineered Wood Products 110 82 Gross margin 215 159
Slide 13: Wood Products Key Drivers: 2023 Q1 vs. 2022 Q4
WOOD PRODUCTS KEY DRIVERS: 2023 Q1 vs. 2022 Q4 BUSINESS KEY DRIVERS LUMBER • Sales Realizations: Decreased 9% • Sales and Production Volumes: Significantly higher, resulting from no work stoppage impacts at Northwest mills, which affected one month of operations in 2022 Q4 • Unit Manufacturing Costs
Slide 14: Third-Party Sales Volumes and Realizations
THIRD-PARTY SALES VOLUMES AND REALIZATIONS1 4,500 Lumber2 $1,200 5,000 OSB $950 $1,041 Volumes (Millions of Square Ft.) $787 Volumes (Millions of Board Ft.) 3,600 4,000 $760 Realizations ($/M 3/8") $676 Realizations ($/MBF) $900 $776 2,700 3,000 $570 $556 $600 $401 $495 $450 1,800 2,000 $335 $380 $2
Slide 15: Unallocated Items
UNALLOCATED ITEMS UNALLOCATED ITEMS ($ Millions) 1 2022 2023 UNALLOCATED ITEMS ($ Millions)1 2022 2023 Q4 Q1 Q4 Q1 Unallocated corporate function expenses and variable $ (36) $ (27) Costs of sales 4 $ 20 $ 7 compensation expense Liability classified share-based compensation (1) — G&A expense5 (35) (
Slide 16: Financial Items
FINANCIAL ITEMS KEY FINANCIAL METRICS ($ Millions) 2022 2023 Cash Flow from Operations Q4 Q1 $1,500 Ending Cash Balance $ 1,581 $ 797 $1,200 $1,146 $957 Total Debt $ 5,053 $ 5,053 $ Millions $900 Net Debt to Adjusted EBITDA (LTM)1 1.0 1.7 $562 Net Debt to Enterprise Value2 13% 16% $600 $300 $167 ADJ
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: 2023 Q2
OUTLOOK: 2023 Q2 EXPECTED EARNINGS1 SEGMENT KEY DRIVERS & ADJUSTED EBITDA TIMBERLANDS Approximately $20 million West South North lower than 2023 Q1 Fee Harvest Volumes: Fee Harvest Volumes: Fee Harvest Volumes: Moderately higher Comparable Significantly lower, seasonal Sales Realizations: Sales Real
Slide 19: Wood Products Sales Realizations: Current vs. 2023 Q1
WOOD PRODUCTS SALES REALIZATIONS: CURRENT VS. 2023 Q1 WEYERHAEUSER’S AVERAGE SALES REALIZATIONS Approximate Change As of April 21, 2023 LUMBER1 Q2 QTD vs. WY’s +$35/MBF HIGHER SENSITIVITY Q1 AVERAGE CHANGE IN REALIZATIONS $10/MBF ≈ $50 million CURRENT vs. EBITDA +$35/MBF HIGHER ANNUALLY Q1 AVERAGE O
Slide 20: Supplemental Timberlands Information
SUPPLEMENTAL TIMBERLANDS INFORMATION Adjusted EBITDA1 Per Acre WESTERN TIMBERLANDS 2021 2022 2023 SOUTHERN TIMBERLANDS 2021 2022 2023 FY FY Q1 FY FY Q1 Adjusted EBITDA1 ($ Millions) $ 387 $ 473 $ 105 Adjusted EBITDA1 ($ Millions) $ 301 $ 307 $ 81 2 2 Acres (Thousands) 2,577 2,546 2,546 Acres (Thousa
Slide 21: Earnings Summary
EARNINGS SUMMARY $ Millions (except EPS) 2022 2023 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Timberlands $ 247 $ 219 $ 168 $ 150 $ 188 Real Estate, Energy & Natural Resources 116 107 60 46 89 Wood Products 1,233 912 395 197 148 Unallocated Items (99) (33) (40) (24) (30) Total Adjusted EBITDA 1 $ 1,4
Slide 22: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION 2022 2023 Q1 Q2 Q3 Q4 Q1 Diluted EPS Before Special Items $ 1.31 $ 1.06 $ 0.42 $ 0.24 $ 0.21 Special Items: Loss on debt extinguishment (0.28) — — — — Pension settlement charge — — — (0.21) — Restructuring, impairments, and other charges — — — (0.01) — Diluted EPS (
Slide 23: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION By Segment $ Millions 2020 2021 2022 2023 FY FY Q1 Q2 Q3 Q4 FY Q1 LTM1 Timberlands $ 610 $ 693 $ 247 $ 219 $ 168 $ 150 $ 784 $ 188 $ 725 Real Estate & ENR 241 296 116 107 60 46 329 89 302 Wood Products 1,527 3,357 1,233 912 395 197 2,737 148 1,652 Unallocated Items (17
Slide 24: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION Timberlands $ Millions 2022 2023 Q1 Q2 Q3 Q4 Q1 West $ 165 $ 144 $ 92 $ 72 $ 105 South 80 75 75 77 81 North 4 2 3 5 4 Other (2) (2) (2) (4) (2) Total Timberlands Adjusted EBITDA1 $ 247 $ 219 $ 168 $ 150 $ 188 West (28) (26) (24) (23) (28) South (35) (37) (36) (38) (38)
Slide 25: Adjusted EBITDA Reconciliation: Real Estate, ENR
ADJUSTED EBITDA RECONCILIATION Real Estate, Energy & Natural Resources $ Millions 2022 2023 Q1 Q2 Q3 Q4 Q1 Real Estate $ 87 $ 83 $ 24 $ 12 $ 63 Energy & Natural Resources 29 24 36 34 26 Total Real Estate & ENR Adjusted EBITDA1 $ 116 $ 107 $ 60 $ 46 $ 89 Depletion, depreciation & amortization (4) (3)
Slide 26: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION Wood Products $ Millions 2022 2023 Q1 Q2 Q3 Q4 Q1 Lumber $ 648 $ 359 $ 88 $ 8 $ 8 OSB 392 332 101 54 22 EWP 136 173 166 110 82 Distribution 72 48 41 23 22 Other (15) — (1) 2 14 1, 2 Total Wood Products Adjusted EBITDA $ 1,233 $ 912 $ 395 $ 197 $ 148 Lumber (28) (27) (2
Slide 27: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION Unallocated $ Millions 2022 2023 Q1 Q2 Q3 Q4 Q1 1 Total Unallocated Adjusted EBITDA $ (99) $ (33) $ (40) $ (24) $ (30) Total depletion, depreciation & amortization (2) (1) (2) (1) (2) Operating Loss (GAAP) $ (101) $ (34) $ (42) $ (25) $ (32) Non-operating pension and o
Slide 28: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA RECONCILIATION $ Millions 2022 2023 Q1 Q2 Q3 Q4 Q1 Net Debt to Adjusted EBITDA (LTM) 1, 2 0.9 0.8 0.8 1.0 1.7 Total debt $ 5,053 $ 5,053 $ 5,053 $ 5,053 $ 5,053 Less: cash and cash equivalents 1,205 1,723 1,920 1,581 797 Net Debt $ 3,848 $ 3,330 $ 3,133 $ 3,472 $ 4,256 Ad
Slide 29: Funds Available for Distribution Reconciliation
FUNDS AVAILABLE FOR DISTRIBUTION RECONCILIATION ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION ($ Millions) 2020 2021 2022 2023 FY FY FY Q1 Net Cash from Operations $ 1,529 $ 3,159 $ 2,832 $ 126 Capital Expenditures (281) (441) (468) (71) Funds Available for Distribution1 $ 1,248 $ 2,718 $ 2,364 $ 55 Cas