Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q2 2020 Earnings Presentation
23 slides from Weyerhaeuser's earnings presentation, Jul 31, 2020
Slide 1: Weyerhaeuser Earnings Results Second Quarter 2020
WEYERHAEUSER EARNINGS RESULTS SECOND QUARTER 2020 | July 31, 2020
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, Section 27A of the Securities Act of 1933, and Section 21E of the S
Slide 3: 2020 Q2 Consolidated Results
2020 Q2 CONSOLIDATED RESULTS $ Millions 2020 2020 $ Millions (except EPS) 2020 2020 Adjusted EBITDA Q1 Q2 Change Consolidated Statement of Operations Q1 Q2 Timberlands $ 173 $ 140 $ (33) Before Special Items Net sales $ 1,728 $ 1,631 Real Estate, Energy & Natural 101 57 (44) Resources Costs of sales
Slide 4: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS $ Millions (except EPS) 2020 Q1 2020 Q2 Pretax After-Tax Diluted Pretax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 135 $ 138 $ 0.18 $ 135 $ 77 $ 0.11 Special Items: Early extinguishment of debt charge — — — (11) (11) (0
Slide 5: Adjusted EBITDA
ADJUSTED EBITDA1 Total Company2 Real Estate & ENR $500 $150 $413 $386 $400 $365 $106 $ Millions $ Millions $343 $101 $308 $100 $300 $260 $71 $60 $57 $200 $50 $37 $100 $0 $0 Q1.19 Q2.19 Q3.19 Q4.19 Q1.20 Q2.20 Q1.19 Q2.19 Q3.19 Q4.19 Q1.20 Q2.20 Real Estate $ 87 51 37 18 86 42 ENR $ 19 20 23 19 15 15
Slide 6: Timberlands Segment
TIMBERLANDS SEGMENT TIMBERLANDS ($ Millions) 2020 2020 TIMBERLANDS ($ Millions) 2020 2020 Adjusted EBITDA by Region Q1 Q2 Segment Statement of Operations Q1 Q2 West $ 93 $ 73 Third-party sales $ 381 $ 359 South 78 70 Intersegment sales 122 121 North 3 (1) Total Sales 503 480 Other (1) (2) Costs of s
Slide 7: 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 3,000 $106.92 $104.07 $104.91 $104.90 $120 $102.12 7,000 $35.35 $35.45 $35.03 $34.71 $40 Volum es (Thousands of tons) $99.07 $34.27 Volum es (Thousands of tons) $3
Slide 8: Fee Harvest Volume and Intersegment Sales Volume
FEE HARVEST VOLUME AND INTERSEGMENT SALES VOLUME Fee Harvest Volume Intersegment Log Sales Volume 7,500 6,802 1,800 6,492 6,617 6,367 1,515 6,130 1,432 5,914 1,421 6,250 1,500 1,377 1,331 Thousands of tons 1,307 Thousands of tons 5,000 1,200 3,750 900 737 712 687 700 720 661 2,385 2,455 2,310 2,183
Slide 9: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & NATURAL RESOURCES (ENR) SEGMENT Real Estate & ENR ($ Millions) 2020 2020 Real Estate & ENR ($ Millions) 2020 2020 Adjusted EBITDA by Business Q1 Q2 Segment Statement of Operations Q1 Q2 Real Estate $ 86 $ 42 Total sales $ 112 $ 65 Energy & Natural Resources 15 15 Costs of sales
Slide 10: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & NATURAL RESOURCES (ENR) SEGMENT Acres Sold Average Price per Acre 60 $3,000 $2,424 $2,415 47 $2,500 $2,308 45 45 $1,992 39 Acres (thousands) Price per acre $2,000 31 30 $1,500 $1,501 18 $1,000 15 $1,063 9 $500 0 $0 Q1.19 Q2.19 Q3.19 Q4.19 Q1.20 Q2.20 Q1.19 Q2.19 Q3.19 Q4.19 Q1.
Slide 11: Wood Products Segment
WOOD PRODUCTS SEGMENT WOOD PRODUCTS ($ Millions) 2020 2020 WOOD PRODUCTS ($ Millions) 2020 2020 Adjusted EBITDA by Business Q1 Q2 Segment Statement of Operations Q1 Q2 Lumber $ 79 $ 103 Total sales $ 1,235 $ 1,207 OSB 45 41 Costs of sales 1,040 997 Engineered Wood Products 51 42 Gross margin 195 210
Slide 12: Third-Party Sales Volumes and Realizations
THIRD-PARTY SALES VOLUMES AND REALIZATIONS1 Lumber OSB $438 $416 1,500 $300 2,000 $392 $450 Volum es (Millions of Square Ft.) $388 $389 $389 $246 $240 Volum es (Millions of Board Ft.) $223 $213 $214 $216 Realizations ($/M 3/8") Realizations ($/MBF) 1,500 1,274 1,253 1,222 1,225 1,000 $200 1,133 1,19
Slide 13: Unallocated Items
UNALLOCATED ITEMS 1 UNALLOCATED ITEMS ($ Millions) 2020 2020 UNALLOCATED ITEMS ($ Millions)1 2020 2020 Q1 Q2 Q1 Q2 Unallocated corporate function expenses and variable Costs of sales 3 $ (19) $ 16 $ (19) $ (23) compensation expense Liability classified share-based compensation 10 (4) G&A expense 4 (
Slide 14: Financial Items
FINANCIAL ITEMS 1 KEY FINANCIAL METRICS ($ Millions) 2020 2020 Cash Flow from Operations Q1 Q2 $600 Ending Cash Balance $1,458 $ 643 $396 $391 $400 $292 2 Total Debt $7,426 $6,299 $ Millions 3 $200 $292 Net Debt to Adjusted EBITDA (LTM) 4.5 4.1 4 $0 Net Debt to Enterprise Value 32% 25% $86 ($14) -$2
Slide 15: Outlook: 2020 Q3 vs. 2020 Q2
OUTLOOK: 2020 Q3 vs. 2020 Q2 SEGMENT COMMENTS TIMBERLANDS • Slightly lower average Western log sales realizations, including higher domestic realizations, slightly lower export realizations, and a higher proportion of domestic log sales • Seasonally higher Western road, forestry and per unit logging
Slide 16: Earnings Summary
EARNINGS SUMMARY $ Millions (except EPS) 2019 2020 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Q2 Timberlands $ 193 $ 175 $ 154 $ 158 $ 173 $ 140 Real Estate, Energy & Natural Resources 106 71 60 37 101 57 Wood Products 115 128 123 110 184 198 Unallocated Items (49) (31) (29) (45) (45) (9) Total Adjus
Slide 17: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Diluted EPS Before Special Items $ 0.11 $ 0.16 $ 0.08 $ 0.03 $ 0.18 $ 0.11 Special Items: Pension settlement charges (0.47) 0.01 — (0.01) — — Early extinguishment of debt charges (0.01) — — — — (0.02) Legal (charges) benefits (0.02) — (0.
Slide 18: Adjusted EBITDA Reconciliation by Segment
ADJUSTED EBITDA RECONCILIATION BY SEGMENT $ Millions 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Timberlands $ 193 $ 175 $ 154 $ 158 $ 173 $ 140 Real Estate & ENR 106 71 60 37 101 57 Wood Products 115 128 123 110 184 198 Unallocated Items (49) (31) (29) (45) (45) (9) Adjusted EBITDA1 $ 365 $ 343 $ 308 $ 260 $ 413 $
Slide 19: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION: TIMBERLANDS $ Millions 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 West $ 97 $ 89 $ 59 $ 73 $ 93 $ 73 South 90 86 91 85 78 70 North 7 1 4 3 3 (1) Other (1) (1) — (3) (1) (2) Total Timberlands Adjusted EBITDA1 $ 193 $ 175 $ 154 $ 158 $ 173 $ 140 West (29) (30) (27) (27) (28) (27) Sout
Slide 20: Adjusted EBITDA Reconciliation: Real Estate, Energy & Natural Resources
ADJUSTED EBITDA RECONCILIATION: REAL ESTATE, ENERGY & NATURAL RESOURCES $ Millions 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Real Estate $ 87 $ 51 $ 37 $ 18 $ 86 $ 42 Energy & Natural Resources 19 20 23 19 15 15 Total Real Estate & ENR Adjusted EBITDA1 $ 106 $ 71 $ 60 $ 37 $ 101 $ 57 Depletion, depreciation & amo
Slide 21: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION: WOOD PRODUCTS $ Millions 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Lumber $ 47 $ 44 $ 49 $ 43 $ 79 $ 103 OSB 19 8 13 19 45 41 EWP 47 64 55 41 51 42 Distribution 4 11 10 8 12 13 Other (2) 1 (4) (1) (3) (1) 1, 2 Total Wood Products Adjusted EBITDA $ 115 $ 128 $ 123 $ 110 $ 184 $ 198
Slide 22: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION: UNALLOCATED $ Millions 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Total Unallocated Adjusted EBITDA1 $ (49) $ (31) $ (29) $ (45) $ (45) $ (9) Total depletion, depreciation & amortization (1) (1) (1) (1) (2) (1) Special items included in operating income (loss) (20) — (15) — 12 — Ope
Slide 23: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA RECONCILIATION $ Millions 2020 2020 Q1 Q2 1,2 Net Debt to Adjusted EBITDA (LTM) 4.5 4.1 Total debt 3 $ 7,426 $ 6,299 3 Less: cash and cash equivalents 1,458 643 Net Debt $ 5,968 $ 5,656 Adjusted EBITDA (LTM) $ 1,324 $ 1,367 Depletion, depreciation & amortization (510) (50