Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q4 2019 Earnings Presentation
26 slides from Weyerhaeuser's earnings presentation, Jan 31, 2020
Slide 1: Weyerhaeuser Earnings Results 4th Quarter 2019
Pro Forma Draft - 3.26.2019 WEYERHAEUSER EARNINGS RESULTS 4TH QUARTER 2019 | January 31, 2020
Slide 2: Forward-Looking Statements
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 fourth quarter 2019 earnings, and Adjusted
Slide 3: 2019 Consolidated Results
Chart 1 2019 CONSOLIDATED RESULTS $ Millions 2018 2019 $ Millions (except EPS) 2018 2019 Adjusted EBITDA FY FY Change Consolidated Statement of Operations FY FY Before Special Items Timberlands $ 902 $ 680 $ (222) Net sales $ 7,476 $ 6,554 Real Estate, Energy & Natural 264 274 10 Costs of sales 5,59
Slide 4: 2019 Q4 Consolidated Results
Chart 2 2019 Q4 CONSOLIDATED RESULTS $ Millions 2019 2019 $ Millions (except EPS) 2019 2019 Adjusted EBITDA Q3 Q4 Change Consolidated Statement of Operations Q3 Q4 Before Special Items Timberlands $ 154 $ 158 $ 4 Net sales $ 1,671 $ 1,548 Real Estate, Energy & Natural 60 37 (23) Costs of sales 1,399
Slide 5: Earnings Before Special Items
Chart 3 EARNINGS BEFORE SPECIAL ITEMS $ Millions (except EPS) 2019 Q3 2019 Q4 Pretax After-Tax Diluted Pretax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 49 $ 59 $ 0.08 $ 25 $ 23 $ 0.03 Special Items: Gain on sale of timberlands and other nonstrategi
Slide 6: Adjusted EBITDA
Chart 4 ADJUSTED EBITDA1 Total Company2 Real Estate & ENR $800 $150 $637 $ Millions $ Millions $600 $544 $106 $505 $100 $86 $90 $365 $71 $400 $346 $343 $60 $308 $260 $47 $50 $41 $37 $200 $0 $0 Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2.19 Q3.19 Q4.19 Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2.19 Q3.19 Q4.19 Real Estate
Slide 7: Timberlands Segment
Chart 5 TIMBERLANDS SEGMENT TIMBERLANDS ($ Millions) 2019 2019 TIMBERLANDS ($ Millions) 2019 2019 Adjusted EBITDA by Region Q3 Q4 Segment Statement of Operations Q3 Q4 West $ 59 $ 73 Third-party sales $ 398 $ 388 South 91 85 Intersegment sales 125 122 North 4 3 Total Sales 523 510 Other — (3) Costs
Slide 8: Sales Volumes, Realizations and Export Revenue
SALES VOLUMES, Chart 6 REALIZATIONS AND EXPORT REVENUE 3rd-Party Log Sales and Realizations - West1 3rd-Party Log Sales and Realizations - South 3,600 $132.24 $150 $131.59 7,000 $34.83 $34.55 $34.88 $34.38 $35.35 $35.45 $35.03 $34.71 $40 Volumes (Thousands of tons) $125.67 Volumes (Thousands of tons
Slide 9: Fee Harvest Volume and Intersegment Sales Volume
FEE HARVEST VOLUME Chart 7 AND INTERSEGMENT SALES VOLUME Fee Harvest Volume Intersegment Log Sales Volume 7,500 6,751 6,849 6,802 2,000 6,630 6,478 6,492 6,617 6,367 1,526 1,515 Thousands of tons 6,250 1,474 1,600 1,433 1,421 1,432 1,377 Thousands of tons 1,340 5,000 1,200 3,750 661 712 687 700 2,44
Slide 10: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & Chart 8 NATURAL RESOURCES (ENR) SEGMENT Real Estate & ENR ($ Millions) 2019 2019 Real Estate & ENR ($ Millions) 2019 2019 Adjusted EBITDA by Business Q3 Q4 Segment Statement of Operations Q3 Q4 Real Estate $ 37 $ 18 Total sales $ 69 $ 46 Energy & Natural Resources 23 19 Costs o
Slide 11: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & Chart 9 NATURAL RESOURCES (ENR) SEGMENT Acres Sold Average Price per Acre 75 $3,000 $2,479 $2,424 62 $2,415 $2,500 $2,258 60 Acres (thousands) 47 $2,308 Price per acre $2,000 45 39 32 $1,500 $1,539 30 22 $1,000 $1,209 18 $1,063 16 15 9 $500 0 $0 Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2
Slide 12: Wood Products Segment
WOOD PRODUCTS SEGMENT Chart 10 WOOD PRODUCTS ($ Millions) 2019 2019 WOOD PRODUCTS ($ Millions) 2019 2019 Adjusted EBITDA by Business Q3 Q4 Segment Statement of Operations Q3 Q4 Lumber $ 49 $ 43 Total sales $ 1,204 $ 1,115 OSB 13 19 Costs of sales 1,067 994 Engineered Wood Products 55 41 Gross margin
Slide 13: Third-Party Sales Volumes and Realizations
THIRD-PARTY SALES VOLUMES Chart 11 AND REALIZATIONS1 Lumber OSB 2,500 $541 $600 2,000 $367 $400 $498 $491 $321 Volumes (Millions of Square Ft.) Volumes (Millions of Board Ft.) $314 2,000 Realizations ($/MBF) Realizations ($/M 3/8") $388 $392 $388 $389 $389 $450 1,500 $252 $300 $223 $213 $214 $216 1,
Slide 14: Unallocated Items
UNALLOCATED ITEMS Chart 12 1 UNALLOCATED ITEMS ($ Millions)1 2019 2019 UNALLOCATED ITEMS ($ Millions) 2019 2019 Q3 Q4 Q3 Q4 Unallocated corporate function expenses 3 $ (19) $ (30) Costs of sales $ 4$ (10) and variable compensation expense Liability classified share-based 4 (1) (2) G&A expense (20) (
Slide 15: Financial Items
FINANCIAL ITEMS Chart 13 Cash Flow from Operations KEY FINANCIAL METRICS ($ Millions) 2019 2019 $800 Q3 Q4 $597 $600 Ending Cash Balance $ 153 $ 139 $396 $ Millions $400 $292 $292 1 Total Debt $ 6,590 $ 6,377 $200 $292 Net Debt to Adjusted EBITDA (LTM) 2,3 4.7 4.9 $0 $136 5 4 $87 Net Debt to Enterpr
Slide 16: Outlook: 2020 Q1 vs. 2019 Q4
OUTLOOK: 2020 Q1 vs. 2019 Q4 Chart 14 SEGMENT COMMENTS TIMBERLANDS • Higher Western domestic and export log sales volumes, modestly higher average domestic log sales realizations and lower Western road spending • Seasonally lower Southern fee harvest volumes and comparable average log sales realizat
Slide 17: Outlook: 2020
OUTLOOK: 2020 Chart 15 DRIVER FY 2020 OUTLOOK Slightly over 36 million tons: • South: Comparable to 2019 FEE HARVEST VOLUME • West: Slightly lower than 2019 • North: Approximately 40% lower than 2019 due to Michigan and Montana divestitures REAL ESTATE & ENR EBITDA $255 million BASIS OF REAL ESTATE
Slide 18: Earnings Summary
EARNINGS SUMMARY Chart 16 $ Millions (except EPS) 2018 2019 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Timberlands $ 268 $ 240 $ 206 $ 188 $ 193 $ 175 $ 154 $ 158 Real Estate, Energy & Natural Resources 41 47 86 90 106 71 60 37 Wood Products 286 385 250 66 115 128 123 110 Unallocated Items (
Slide 19: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 17 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Diluted EPS Before Special Items $ 0.36 $ 0.44 $ 0.28 $ 0.10 $ 0.11 $ 0.16 $ 0.08 $ 0.03 Special Items: Environmental remediation charge (0.03) — — — — — — — Product remediation recoveries (charges), net 0.02 (0.02) — — — —
Slide 20: Earnings Before Special Items Reconciliation
EARNINGS BEFORE SPECIAL ITEMS Chart 18 RECONCILIATION $ Millions (except EPS) 2018 2019 Pretax After-Tax Diluted Pretax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 1,022 $ 891 $ 1.18 $ 253 $ 285 $ 0.39 Special Items: Environmental remediation charge
Slide 21: Adjusted EBITDA Reconciliation: By Segment
ADJUSTED EBITDA RECONCILIATION: Chart 19 BY SEGMENT $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Timberlands $ 268 $ 240 $ 206 $ 188 $ 193 $ 175 $ 154 $ 158 Real Estate & ENR 41 47 86 90 106 71 60 37 Wood Products 286 385 250 66 115 128 123 110 Unallocated Items (51) (35) (37) 2 (49) (31) (29) (45)
Slide 22: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION: Chart 20 TIMBERLANDS $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 West $ 165 $ 152 $ 121 $ 94 $ 97 $ 89 $ 59 $ 73 South 98 84 80 89 90 86 91 85 North 6 3 4 6 7 1 4 3 Other (1) 1 1 (1) (1) (1) — (3) 1 Total Timberlands Adjusted EBITDA $ 268 $ 240 $ 206 $ 188 $ 193 $ 17
Slide 23: Adjusted EBITDA Reconciliation: Real Estate, Energy & Natural Resources
ADJUSTED EBITDA RECONCILIATION: REAL Chart 21 ESTATE, ENERGY & NATURAL RESOURCES $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Real Estate $ 27 $ 30 $ 68 $ 71 $ 87 $ 51 $ 37 $ 18 Energy & Natural Resources 14 17 18 19 19 20 23 19 Total Real Estate & ENR Adjusted EBITDA1 $ 41 $ 47 $ 86 $ 90 $ 106 $ 71
Slide 24: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION: Chart 22 WOOD PRODUCTS $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Lumber $ 140 $ 195 $ 118 $ 6 $ 47 $ 44 $ 49 $ 43 OSB 92 129 77 31 19 8 13 19 EWP 45 58 48 26 47 64 55 41 Distribution 15 12 3 2 4 11 10 8 Other (6) (9) 4 1 (2) 1 (4) (1) 1, 2 Total Wood Products Adjus
Slide 25: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION: Chart 23 UNALLOCATED $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 Total Unallocated Adjusted EBITDA $ (51) $ (35) $ (37) $ 2 $ (49) $ (31) $ (29) $ (45) Total depletion, depreciation, & amortization (1) (1) (1) (1) (1) (1) (1) (1) Special items included in operating
Slide 26: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA Chart 24 RECONCILIATION $ Millions 2019 Q3 Q4 1,2,3 Net Debt to Adjusted EBITDA (LTM) 4.7 4.9 4 Total debt $ 6,590 $ 6,377 Less: cash and cash equivalents 153 139 Net Debt $ 6,437 $ 6,238 Adjusted EBITDA (LTM) $ 1,362 $ 1,276 Depletion, depreciation & amortization (507) (