Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q1 2022 Earnings Presentation
29 slides from Weyerhaeuser's earnings presentation, Apr 29, 2022
Slide 1: 2022 Earnings Results: First Quarter 2022
2022 EARNINGS RESULTS FIRST QUARTER 2022 | April 29, 2022
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: 2022 Q1 Consolidated Results
2022 Q1 CONSOLIDATED RESULTS $ Millions 2021 2022 $ Millions (except EPS) 2021 2022 Adjusted EBITDA Q4 Q1 Change Consolidated Statement of Q4 Q1 Timberlands $ 176 $ 247 $ 71 Operations Before Special Items Real Estate, Energy & Natural Resources 49 116 67 Net sales $ 2,206 $ 3,112 Wood Products 517
Slide 4: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS $ Millions (except EPS) 2021 Q4 2022 Q1 Pretax After-Tax Diluted Pretax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 463 $ 367 $ 0.49 $ 1,256 $ 978 $ 1.31 Special Items: Loss on debt extinguishment — — — 276 207 0.28 Lega
Slide 5: Adjusted EBITDA
ADJUSTED EBITDA1 TOTAL COMPANY2 REAL ESTATE & ENR $1,650 $1,573 $1,497 $150 $1,320 $116 $ Millions $1,101 $ Millions $990 $100 $96 $91 $746 $674 $660 $60 $49 $50 $330 $0 $0 Q1.21 Q2.21 Q3.21 Q4.21 Q1.22 Q1.21 Q2.21 Q3.21 Q4.21 Q1.22 Real Estate $ 76 66 38 27 87 ENR $ 20 25 22 22 29 TIMBERLANDS $247
Slide 6: Timberlands Segment
TIMBERLANDS SEGMENT TIMBERLANDS ($ Millions) 2021 2022 TIMBERLANDS ($ Millions) 2021 2022 Adjusted EBITDA by Region Q4 Q1 Segment Statement of Operations Q4 Q1 West $ 93 $ 165 Third-party sales $ 429 $ 465 South 80 80 Intersegment sales 136 161 North 3 4 Total Sales 565 626 Other — (2) Costs of sale
Slide 7: Timberlands Key Drivers: 2022 Q1 vs. 2021 Q4
TIMBERLANDS KEY DRIVERS: 2022 Q1 vs. 2021 Q4 REGION KEY DRIVERS WEST • Fee Harvest Volumes: Significantly higher, seasonal transition to lower elevation harvest activity • Domestic Sales Volumes: Significantly higher • Export Sales Volumes: Significantly lower, primarily for China, with shift to dom
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 $180 7,000 $35.56 $36.55 $37.15 $40 $161.29 $34.50 $35.11 $146.39 Volumes (Thousands of tons) $145.64 $137.80 Volumes (Thousands of tons) 3,000 $130.69 $150
Slide 9: Fee Harvest Volumes and Intersegment Sales Volumes
FEE HARVEST VOLUMES AND INTERSEGMENT SALES VOLUMES FEE HARVEST VOLUMES INTERSEGMENT LOG SALES VOLUMES 7,500 1,500 6,160 1,263 1,220 1,224 1,189 5,856 5,912 5,842 6,250 5,376 1,200 1,099 Thousands of tons Thousands of tons 5,000 900 779 799 761 741 733 3,750 2,240 600 2,101 2,099 1,930 1,954 2,500 30
Slide 10: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & NATURAL RESOURCES (ENR) SEGMENT REAL ESTATE & ENR ($ Millions) 2021 2022 REAL ESTATE & ENR ($ Millions) 2021 2022 Adjusted EBITDA by Business Q4 Q1 Segment Statement of Operations Q4 Q1 Real Estate $ 27 $ 87 Total sales $ 59 $ 128 Energy & Natural Resources 22 29 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 40 $6,000 35 31 $5,000 Acres (thousands) Price per acre 30 $4,385 24 $4,000 $3,803 19 $4,005 20 18 $3,785 $3,000 $3,227 11 10 7 $1,992 $2,000 $1,501 1 $1,381 0 $1,000 Q1.20 Q2.20 Q3.20 Q4.20 Q
Slide 12: Wood Products Segment
WOOD PRODUCTS SEGMENT WOOD PRODUCTS ($ Millions) 2021 2022 WOOD PRODUCTS ($ Millions) 2021 2022 Adjusted EBITDA by Business Q4 Q1 Segment Statement of Operations Q4 Q1 Lumber $ 195 $ 648 Total sales $ 1,718 $ 2,519 OSB 176 392 Costs of sales 1,185 1,276 Engineered Wood Products 114 136 Gross margin
Slide 13: Wood Products Key Drivers: 2022 Q1 vs. 2021 Q4
WOOD PRODUCTS KEY DRIVERS: 2022 Q1 vs. 2021 Q4 BUSINESS KEY DRIVERS LUMBER • Sales Realizations: Increased 76% • Sales Volumes: Slightly lower, ongoing transportation disruptions • Production Volumes: Moderately higher, less weather-related downtime and planned maintenance • Unit Manufacturing Costs
Slide 14: Third-Party Sales Volumes and Realizations
THIRD-PARTY SALES VOLUMES AND REALIZATIONS1 Lumber OSB $1,077 $1,041 $911 4,500 $1,100 5,000 $950 $787 $864 Volumes (Millions of Square Ft.) Volumes (Millions of Board Ft.) 3,600 $880 $691 Realizations ($/MBF) 4,000 $760 Realizations ($/M 3/8") $614 2,700 $592 $660 3,000 $490 $570 $516 1,800 $440 2,
Slide 15: Unallocated Items
UNALLOCATED ITEMS UNALLOCATED ITEMS ($ Millions) 1 2021 2022 UNALLOCATED ITEMS ($ Millions)1 2021 2022 Q4 Q1 Q4 Q1 Unallocated corporate function expenses and variable Costs of sales 3 $ (4) $ (68) $ (35) $ (31) compensation expense G&A expense 4 (49) (27) Liability classified share-based compensati
Slide 16: Financial Items
FINANCIAL ITEMS KEY FINANCIAL METRICS ($ Millions) 2021 2022 Q4 Q1 Cash Flow from Operations $1,500 $1,308 Ending Cash Balance $ 1,879 $ 1,205 $1,200 Total Debt $ 5,099 $ 5,053 $957 $900 $ Millions $698 $659 Net Debt to Adjusted EBITDA (LTM)1 0.8 0.9 $600 Net Debt to Enterprise Value 2 9% 12% $300 $
Slide 17: Adjusted Funds Available for Distribution: Allocation Framework
ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION Allocation Framework and Cash Return Calculation TARGETED RETURN OF CASH ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION1 TO SHAREHOLDERS ALLOCATION FRAMEWORK Calculated on an Annual Basis Return 75-80% of Adj. FAD to Shareholders Adjusted FAD SUSTAINABLE BASE DIV
Slide 18: Adjusted Funds Available for Distribution: Cash Return Update
ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION1 Cash Return To Shareholders Update TARGETED RETURN OF CASH TO SHAREHOLDERS Based on 2022 Q1 Results and Activity ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION ($ Millions) 2022 Q1 $ MM Net Cash from Operations $ 957 2022 Q1 Adjusted FAD $850 Capital Expenditure
Slide 19: 2022 Q2 Outlook
2022 Q2 OUTLOOK EXPECTED EARNINGS1 SEGMENT KEY DRIVERS & ADJUSTED EBITDA TIMBERLANDS Significantly lower West South North than 2022 Q1, but Fee Harvest Volumes: Fee Harvest Volumes: Fee Harvest Volumes: higher than any other Comparable Moderately higher Significantly lower quarter since 2018 Q4 Sale
Slide 20: Wood Products Sales Realizations: Current vs. 2022 Q1
WOOD PRODUCTS SALES REALIZATIONS: CURRENT VS. 2022 Q1 WEYERHAEUSER’S AVERAGE SALES REALIZATIONS Approximate Change As of April 22, 2022 LUMBER1 Q2 QTD vs. WY’s -$130/MBF LOWER SENSITIVITY Q1 AVERAGE CHANGE IN REALIZATIONS $10/MBF ≈ $50 million CURRENT vs. EBITDA -$185/MBF LOWER ANNUALLY Q1 AVERAGE O
Slide 21: Earnings Summary
EARNINGS SUMMARY $ Millions (except EPS) 2021 2022 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Timberlands $ 172 $ 180 $ 165 $ 176 $ 247 Real Estate, Energy & Natural Resources 96 91 60 49 116 Wood Products 889 1,386 565 517 1,233 Unallocated Items (56) (84) (44) (68) (99) Total Adjusted EBITDA1 $ 1,1
Slide 22: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION 2021 2022 Q1 Q2 Q3 Q4 Q1 Diluted EPS Before Special Items $ 0.91 $ 1.37 $ 0.60 $ 0.49 $ 1.31 Special Items: Loss on debt extinguishment — — — — 0.28 Legal benefit — — — 0.01 — Product remediation recovery — — — 0.04 — Gain on sale of timberlands — — 0.04 — — Insuran
Slide 23: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION By Segment $ Millions 2019 2020 2021 2022 FY FY Q1 Q2 Q3 Q4 FY Q1 LTM1 Timberlands $ 680 $ 610 $ 172 $ 180 $ 165 $ 176 $ 693 $ 247 $ 768 Real Estate & ENR 274 241 96 91 60 49 296 116 316 Wood Products 476 1,527 889 1,386 565 517 3,357 1,233 3,701 Unallocated Items (154
Slide 24: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION Timberlands $ Millions 2021 2022 Q1 Q2 Q3 Q4 Q1 West $ 101 $ 103 $ 90 $ 93 $ 165 South 69 76 76 80 80 North 3 2 1 3 4 Other (1) (1) (2) — (2) Total Timberlands Adjusted EBITDA1 $ 172 $ 180 $ 165 $ 176 $ 247 West (28) (28) (24) (25) (28) South (34) (37) (38) (38) (35) N
Slide 25: Adjusted EBITDA Reconciliation: Real Estate, Energy & Natural Resources
ADJUSTED EBITDA RECONCILIATION Real Estate, Energy & Natural Resources $ Millions 2021 2022 Q1 Q2 Q3 Q4 Q1 Real Estate $ 76 $ 66 $ 38 $ 27 $ 87 Energy & Natural Resources 20 25 22 22 29 Total Real Estate & ENR Adjusted EBITDA1 $ 96 $ 91 $ 60 $ 49 $ 116 Depletion, depreciation & amortization (3) (4)
Slide 26: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION Wood Products $ Millions 2021 2022 Q1 Q2 Q3 Q4 Q1 Lumber $ 513 $ 804 $ 118 $ 195 $ 648 OSB 300 472 344 176 392 EWP 42 53 76 114 136 Distribution 39 75 22 40 72 Other (5) (18) 5 (8) (15) Total Wood Products Adjusted EBITDA 1, 2 $ 889 $ 1,386 $ 565 $ 517 $ 1,233 Lumber (
Slide 27: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION Unallocated $ Millions 2021 2022 Q1 Q2 Q3 Q4 Q1 1 Total Unallocated Adjusted EBITDA $ (56) $ (84) $ (44) $ (68) $ (99) Total depletion, depreciation & amortization (2) (1) (2) — (2) Special items included in operating loss — — — 15 — Operating Loss (GAAP) $ (58) $ (85)
Slide 28: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA RECONCILIATION $ Millions 2021 2022 Q1 Q2 Q3 Q4 Q1 Net Debt to Adjusted EBITDA (LTM) 1,2 1.5 0.9 0.7 0.8 0.9 Total debt $ 5,475 $ 5,250 $ 5,250 $ 5,099 $ 5,053 Less: cash and cash equivalents 1,016 1,777 2,326 1,879 1,205 Net Debt $ 4,459 $ 3,473 $ 2,924 $ 3,220 $ 3,848 A
Slide 29: Funds Available for Distribution Reconciliation
FUNDS AVAILABLE FOR DISTRIBUTION RECONCILIATION ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION ($ Millions) 2019 2020 2021 2022 FY FY FY Q1 Net Cash from Operations $ 966 $ 1,529 $ 3,159 $ 957 Capital Expenditures (384) (281) (441) (70) Funds Available for Distribution 1 $ 582 $ 1,248 $ 2,718 $ 887 Cash