Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q3 2019 Earnings Presentation
23 slides from Weyerhaeuser's earnings presentation, Oct 25, 2019
Slide 1: Weyerhaeuser Earnings Results 3rd Quarter 2019
Pro Forma Draft - 3.26.2019 WEYERHAEUSER EARNINGS RESULTS 3RD QUARTER 2019 | October 25, 2019
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 Q3 Consolidated Results
Chart 1 2019 Q3 CONSOLIDATED RESULTS $ Millions 2019 2019 $ Millions (except EPS) 2019 2019 Adjusted EBITDA Q2 Q3 Change Consolidated Statement of Operations Q2 Q3 Before Special Items Timberlands $ 175 $ 154 $ (21) Net sales $ 1,692 $ 1,671 Real Estate, Energy & Natural 71 60 (11) Costs of sales 1,
Slide 4: Earnings Before Special Items
Chart 2 EARNINGS BEFORE SPECIAL ITEMS $ Millions (except EPS) 2019 Q2 2019 Q3 Pretax After-Tax Diluted Pretax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 85 $ 123 $ 0.16 $ 49 $ 59 $ 0.08 Special Items: Pension settlement adjustment 1 6 5 0.01 — — — L
Slide 5: Adjusted EBITDA
Chart 3 ADJUSTED EBITDA1 Total Company2 Real Estate & ENR $800 $150 $637 $ Millions $ Millions $600 $544 $505 $106 $100 $86 $90 $346 $365 $343 $71 $400 $308 $60 $41 $47 $50 $200 $0 $0 Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2.19 Q3.19 Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2.19 Q3.19 Real Estate $ 27 30 68 71 87 51
Slide 6: Timberlands Segment
Chart 4 TIMBERLANDS SEGMENT TIMBERLANDS ($ Millions) 2019 2019 TIMBERLANDS ($ Millions) 2019 2019 Adjusted EBITDA by Region Q2 Q3 Segment Statement of Operations Q2 Q3 West $ 89 $ 59 Third-party sales $ 401 $ 398 South 86 91 Intersegment sales 131 125 North 1 4 Total Sales 532 523 Other (1) — Costs
Slide 7: Sales Volumes, Realizations and Export Revenue
SALES VOLUMES, Chart 5 REALIZATIONS AND EXPORT REVENUE 3rd-Party Log Sales and Realizations - West1 3rd-Party Log Sales and Realizations - South 3,600 $131.59 $132.24 $150 7,000 $40 $125.67 $34.83 $34.55 $34.88 $34.38 $35.35 $35.45 $35.03 Volumes (Thousands of tons) Volumes (Thousands of tons) 3,000
Slide 8: Fee Harvest Volume and Intersegment Sales Volume
FEE HARVEST VOLUME Chart 6 AND INTERSEGMENT SALES VOLUME Fee Harvest Volume Intersegment Log Sales Volume 7,500 6,751 6,849 6,802 2,000 6,630 6,478 6,492 6,367 1,526 1,515 Thousands of tons 6,250 1,474 1,600 1,433 1,421 1,432 Thousands of tons 1,340 5,000 1,200 3,750 661 712 687 2,443 2,360 2,305 2,
Slide 9: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & Chart 7 NATURAL RESOURCES (ENR) SEGMENT Real Estate & ENR ($ Millions) 2019 2019 Real Estate & ENR ($ Millions) 2019 2019 Adjusted EBITDA by Business Q2 Q3 Segment Statement of Operations Q2 Q3 Real Estate $ 51 $ 37 Total sales $ 81 $ 69 Energy & Natural Resources 20 23 Costs o
Slide 10: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & Chart 8 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) Price per acre 47 $2,000 45 39 $1,500 32 $1,539 30 22 $1,000 $1,209 18 $1,063 16 15 $500 0 $0 Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2.19 Q3.19
Slide 11: Wood Products Segment
WOOD PRODUCTS SEGMENT Chart 9 WOOD PRODUCTS ($ Millions) 2019 2019 WOOD PRODUCTS ($ Millions) 2019 2019 Adjusted EBITDA by Business Q2 Q3 Segment Statement of Operations Q2 Q3 Lumber $ 44 $ 49 Total sales $ 1,210 $ 1,204 OSB 8 13 Costs of sales 1,070 1,067 Engineered Wood Products 64 55 Gross margin
Slide 12: Third-Party Sales Volumes and Realizations
THIRD-PARTY SALES VOLUMES AND Chart 10 REALIZATIONS1 Lumber OSB $541 2,000 $367 $400 2,500 $600 Volumes (Millions of Square Ft.) $498 $491 Volumes (Millions of Board Ft.) $314 $321 Realizations ($/M 3/8") Realizations ($/MBF) 2,000 $392 $388 $388 $389 $450 1,500 $252 $300 $223 $213 $214 1,500 1,261
Slide 13: Unallocated Items
UNALLOCATED ITEMS Chart 11 UNALLOCATED ITEMS ($ Millions)1 2019 2019 UNALLOCATED ITEMS ($ Millions) 2019 2019 Q2 Q3 Q2 Q3 Unallocated corporate function expenses 4 $ (12) $ (19) Costs of sales $ (7) $ 4 and variable compensation expense Liability classified share-based — (1) G&A expenses 5 (14) (20)
Slide 14: Financial Items
FINANCIAL ITEMS Chart 12 Cash Flow from Operations KEY FINANCIAL METRICS ($ Millions) 2019 2019 $800 Q2 Q3 $597 $600 Ending Cash Balance $ 212 $ 153 $396 $ Millions $400 $292 Total Debt1 $ 6,293 $ 6,590 $200 $292 Net Debt to Adjusted EBITDA (LTM)2,3 3.9 4.7 $0 $136 5 4 $87 Net Debt to Enterprise Val
Slide 15: Outlook: 2019 Q4 vs. 2019 Q3
OUTLOOK: 2019 Q4 vs. 2019 Q3 Chart 13 SEGMENT COMMENTS TIMBERLANDS • Lower Southern fee harvest volumes and slightly lower average log sales realizations • Seasonally lower Western road and unit logging costs and modestly higher average domestic sales realizations, partially offset by lower log sale
Slide 16: Earnings Summary
EARNINGS SUMMARY Chart 14 $ Millions 2018 2019 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Q2 Q3 Timberlands $ 268 $ 240 $ 206 $ 188 $ 193 $ 175 $ 154 Real Estate, Energy & Natural Resources 41 47 86 90 106 71 60 Wood Products 286 385 250 66 115 128 123 Unallocated Items (51) (35) (37) 2 (49) (31) (29
Slide 17: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION Chart 15 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Diluted EPS Before Special Items $ 0.36 $ 0.44 $ 0.28 $ 0.10 $ 0.11 $ 0.16 $ 0.08 Special Items: Environmental remediation charge (0.03) — — — — — — Product remediation recoveries (charges), net 0.02 (0.02) — — — — 0.07 Tax ad
Slide 18: Adjusted EBITDA Reconciliation by Segment
ADJUSTED EBITDA RECONCILIATION Chart 16 BY SEGMENT $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Timberlands $ 268 $ 240 $ 206 $ 188 $ 193 $ 175 $ 154 Real Estate & ENR 41 47 86 90 106 71 60 Wood Products 286 385 250 66 115 128 123 Unallocated Items (51) (35) (37) 2 (49) (31) (29) 1 Adjusted EBITDA $ 54
Slide 19: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION: Chart 17 TIMBERLANDS $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 West $ 165 $ 152 $ 121 $ 94 $ 97 $ 89 $ 59 South 98 84 80 89 90 86 91 North 6 3 4 6 7 1 4 Other (1) 1 1 (1) (1) (1) — Total Timberlands Adjusted EBITDA1 $ 268 $ 240 $ 206 $ 188 $ 193 $ 175 $ 154 West (29)
Slide 20: Adjusted EBITDA Reconciliation: Real Estate, Energy & Natural Resources
ADJUSTED EBITDA RECONCILIATION: Chart 18 REAL ESTATE, ENERGY & NATURAL RESOURCES $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Real Estate $ 27 $ 30 $ 68 $ 71 $ 87 $ 51 $ 37 Energy & Natural Resources 14 17 18 19 19 20 23 Total Real Estate & ENR Adjusted EBITDA1 $ 41 $ 47 $ 86 $ 90 $ 106 $ 71 $ 60 Deple
Slide 21: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION: Chart 19 WOOD PRODUCTS $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Lumber $ 140 $ 195 $ 118 $ 6 $ 47 $ 44 $ 49 OSB 92 129 77 31 19 8 13 EWP 45 58 48 26 47 64 55 Distribution 15 12 3 2 4 11 10 Other (6) (9) 4 1 (2) 1 (4) 1, 2 Total Wood Products Adjusted EBITDA $ 286 $ 3
Slide 22: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION: Chart 20 UNALLOCATED $ Millions 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1 Total Unallocated Adjusted EBITDA $ (51) $ (35) $ (37) $ 2 $ (49) $ (31) $ (29) Total depletion, depreciation, & amortization (1) (1) (1) (1) (1) (1) (1) Special items included in operating income (loss)
Slide 23: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA Chart 21 RECONCILIATION $ Millions 2019 Q2 Q3 1,2,3 Net Debt to Adjusted EBITDA (LTM) 3.9 4.7 4 Total debt $ 6,293 $ 6,590 Less: cash and cash equivalents 212 153 Net Debt $ 6,081 $ 6,437 Adjusted EBITDA (LTM) $ 1,559 $ 1,362 Depletion, depreciation & amortization (494) (