Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q1 2020 Earnings Presentation
24 slides from Weyerhaeuser's earnings presentation, May 1, 2020
Slide 1: Weyerhaeuser Earnings Results First Quarter 2020
WEYERHAEUSER EARNINGS RESULTS FIRST QUARTER 2020 | May 1, 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 Q1 Consolidated Results
2020 Q1 CONSOLIDATED RESULTS $ Millions 2019 2020 $ Millions (except EPS) 2019 2020 Adjusted EBITDA Q4 Q1 Change Consolidated Statement of Operations Q4 Q1 Timberlands $ 158 $ 173 $ 15 Before Special Items Net sales $ 1,548 $ 1,728 Real Estate, Energy & Natural 37 101 64 Resources Costs of sales 1,3
Slide 4: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS $ Millions (except EPS) 2019 Q4 2020 Q1 Pretax After-Tax Diluted Pretax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 25 $ 23 $ 0.03 $ 135 $ 138 $ 0.18 Special Items: Gain on sale of nonstrategic timberlands 48 48 0.07 — —
Slide 5: Adjusted EBITDA
ADJUSTED EBITDA1 Total Company2 Real Estate & ENR $500 $150 $413 $400 $365 $106 $101 $ Millions $ Millions $343 $308 $100 $300 $260 $71 $60 $200 $50 $37 $100 $0 $0 Q1.19 Q2.19 Q3.19 Q4.19 Q1.20 Q1.19 Q2.19 Q3.19 Q4.19 Q1.20 Real Estate $ 87 51 37 18 86 ENR $ 19 20 23 19 15 Timberlands Wood Products
Slide 6: Timberlands Segment
TIMBERLANDS SEGMENT TIMBERLANDS ($ Millions) 2019 2020 TIMBERLANDS ($ Millions) 2019 2020 Adjusted EBITDA by Region Q4 Q1 Segment Statement of Operations Q4 Q1 West $ 73 $ 93 Third-party sales $ 388 $ 381 South 85 78 Intersegment sales 122 122 North 3 3 Total Sales 510 503 Other (3) (1) Costs of sal
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 $120 $99.07 $102.12 7,000 $35.35 $35.45 $35.03 $34.71 $34.27 $40 Volum es (Thousands of tons) Volum es (Thousands of tons) 2,400 5,60
Slide 8: Fee Harvest Volume and Intersegment Sales Volume
FEE HARVEST VOLUME AND INTERSEGMENT SALES VOLUME Fee Harvest Volume Intersegment Log Sales Volume 7,500 6,802 1,800 6,492 6,617 6,367 1,515 6,130 1,432 1,421 6,250 1,500 1,377 1,331 Thousands of tons Thousands of tons 5,000 1,200 3,750 900 712 687 700 720 661 2,385 2,455 2,310 2,183 2,214 2,500 600
Slide 9: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & NATURAL RESOURCES (ENR) SEGMENT Real Estate & ENR ($ Millions) 2019 2020 Real Estate & ENR ($ Millions) 2019 2020 Adjusted EBITDA by Business Q4 Q1 Segment Statement of Operations Q4 Q1 Real Estate $ 18 $ 86 Total sales $ 46 $ 112 Energy & Natural Resources 19 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) $2,000 Price per acre 30 $1,500 18 $1,000 15 $1,063 9 $500 0 $0 Q1.19 Q2.19 Q3.19 Q4.19 Q1.20 Q1.19 Q2.19 Q3.19 Q4.19 Q1.20 West 38% 5% 3
Slide 11: Wood Products Segment
WOOD PRODUCTS SEGMENT WOOD PRODUCTS ($ Millions) 2019 2020 WOOD PRODUCTS ($ Millions) 2019 2020 Adjusted EBITDA by Business Q4 Q1 Segment Statement of Operations Q4 Q1 Lumber $ 43 $ 79 Total sales $ 1,115 $ 1,235 OSB 19 45 Costs of sales 994 1,040 Engineered Wood Products 41 51 Gross margin 121 195
Slide 12: Third-Party Sales Volumes and Realizations
THIRD-PARTY SALES VOLUMES AND REALIZATIONS1 Lumber OSB $416 1,500 $300 2,000 $392 $388 $389 $389 $450 $246 Volum es (Millions of Square Ft.) Volum es (Millions of Board Ft.) $223 $213 $214 $216 Realizations ($/M 3/8") Realizations ($/MBF) 1,500 1,274 1,253 1,222 1,000 $200 1,133 1,197 $300 733 740 7
Slide 13: Unallocated Items
UNALLOCATED ITEMS 1 UNALLOCATED ITEMS ($ Millions) 2019 2020 UNALLOCATED ITEMS ($ Millions)1 2019 2020 Q4 Q1 Q4 Q1 Unallocated corporate function expenses and variable Costs of sales 3 $ (10) $ (19) $ (30) $ (19) compensation expense Liability classified share-based compensation (2) 10 G&A expense 4
Slide 14: Financial Items
FINANCIAL ITEMS 1 KEY FINANCIAL METRICS ($ Millions) 2019 2020 Cash Flow from Operations Q4 Q1 $600 Ending Cash Balance $ 139 $1,458 $396 $400 $292 2 Total Debt $6,377 $7,426 $ Millions 3,4 $200 $292 Net Debt to Adjusted EBITDA (LTM) 4.9 4.5 5 Net Debt to Enterprise Value 22% 32% $0 $86 ($14) -$200
Slide 15: Outlook: 2020 Q2 vs. 2020 Q1
OUTLOOK: 2020 Q2 vs. 2020 Q1 SEGMENT COMMENTS TIMBERLANDS • Lower domestic sawlog demand due to economic impact of COVID-19 • Lower average Western sales realizations, comparable domestic log sales volumes and seasonally higher road and forestry costs, partially offset by higher sales volumes for Ch
Slide 16: 2020 Outlook: Update
2020 OUTLOOK: UPDATE DRIVER UPDATED 2020 OUTLOOK PRIOR 2020 OUTLOOK Approximately 33-34 million tons: Slightly over 36 million tons: • South: 10% lower than 2019 • South: Comparable to 2019 FEE HARVEST VOLUME • West: Unchanged • West: Slightly lower than 2019 • North: Unchanged • North: Approximatel
Slide 17: Earnings Summary
EARNINGS SUMMARY $ Millions (except EPS) 2019 2020 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Timberlands $ 193 $ 175 $ 154 $ 158 $ 173 Real Estate, Energy & Natural Resources 106 71 60 37 101 Wood Products 115 128 123 110 184 Unallocated Items (49) (31) (29) (45) (45) Total Adjusted EBITDA1 $ 365 $
Slide 18: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION 2019 2020 Q1 Q2 Q3 Q4 Q1 Diluted EPS Before Special Items $ 0.11 $ 0.16 $ 0.08 $ 0.03 $ 0.18 Special Items: Pension settlement charges (0.47) 0.01 — (0.01) — Early extinguishment of debt charge (0.01) — — — — Legal (charges) benefits (0.02) — (0.02) — 0.02 Product r
Slide 19: Adjusted EBITDA Reconciliation by Segment
ADJUSTED EBITDA RECONCILIATION BY SEGMENT $ Millions 2019 2020 Q1 Q2 Q3 Q4 Q1 Timberlands $ 193 $ 175 $ 154 $ 158 $ 173 Real Estate & ENR 106 71 60 37 101 Wood Products 115 128 123 110 184 Unallocated Items (49) (31) (29) (45) (45) 1 Adjusted EBITDA $ 365 $ 343 $ 308 $ 260 $ 413 Depletion, depreciat
Slide 20: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION: TIMBERLANDS $ Millions 2019 2020 Q1 Q2 Q3 Q4 Q1 West $ 97 $ 89 $ 59 $ 73 $ 93 South 90 86 91 85 78 North 7 1 4 3 3 Other (1) (1) — (3) (1) Total Timberlands Adjusted EBITDA1 $ 193 $ 175 $ 154 $ 158 $ 173 West (29) (30) (27) (27) (28) South (40) (39) (51) (42) (37) Nor
Slide 21: Adjusted EBITDA Reconciliation: Real Estate, Energy & Natural Resources
ADJUSTED EBITDA RECONCILIATION: REAL ESTATE, ENERGY & NATURAL RESOURCES $ Millions 2019 2020 Q1 Q2 Q3 Q4 Q1 Real Estate $ 87 $ 51 $ 37 $ 18 $ 86 Energy & Natural Resources 19 20 23 19 15 1 Total Real Estate & ENR Adjusted EBITDA $ 106 $ 71 $ 60 $ 37 $ 101 Depletion, depreciation & amortization (3) (
Slide 22: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION: WOOD PRODUCTS $ Millions 2019 2020 Q1 Q2 Q3 Q4 Q1 Lumber $ 47 $ 44 $ 49 $ 43 $ 79 OSB 19 8 13 19 45 EWP 47 64 55 41 51 Distribution 4 11 10 8 12 Other (2) 1 (4) (1) (3) Total Wood Products Adjusted EBITDA1, 2 $ 115 $ 128 $ 123 $ 110 $ 184 Lumber (24) (25) (26) (26) (2
Slide 23: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION: UNALLOCATED $ Millions 2019 2020 Q1 Q2 Q3 Q4 Q1 1 Total Unallocated Adjusted EBITDA $ (49) $ (31) $ (29) $ (45) $ (45) Total depletion, depreciation & amortization (1) (1) (1) (1) (2) Special items included in operating income (loss) (20) — (15) — 12 Operating Income
Slide 24: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA RECONCILIATION $ Millions 2019 2020 Q4 Q1 1,2,3 Net Debt to Adjusted EBITDA (LTM) 4.9 4.5 Total debt 4 $ 6,377 $ 7,426 Less: cash and cash equivalents4 139 1,458 Net Debt $ 6,238 $ 5,968 Adjusted EBITDA (LTM) $ 1,276 $ 1,324 Depletion, depreciation & amortization (510) (5