Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Q3 2021 Earnings Presentation
28 slides from Weyerhaeuser's earnings presentation, Oct 29, 2021
Slide 1: Weyerhaeuser Earnings Results Third Quarter 2021
2021 WEYERHAEUSER EARNINGS RESULTS THIRD QUARTER 2021 | October 29, 2021
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 quarterly cas
Slide 3: 2021 Q3 Consolidated Results
2021 Q3 CONSOLIDATED RESULTS $ Millions 2021 2021 $ Millions (except EPS) 2021 2021 Adjusted EBITDA Q2 Q3 Change Consolidated Statement of Operations Q2 Q3 Timberlands $ 180 $ 165 $ (15) Before Special Items Real Estate, Energy & Natural Resources 91 60 (31) Net sales $ 3,144 $ 2,345 Wood Products 1
Slide 4: Earnings Before Special Items
EARNINGS BEFORE SPECIAL ITEMS $ Millions (except EPS) 2021 Q2 2021 Q3 Pretax After-Tax Diluted Pretax After-Tax Diluted Earnings Earnings EPS Earnings Earnings EPS Earnings Before Special Items $ 1,352 $ 1,028 $ 1.37 $ 534 $ 450 $ 0.60 Special Items: Gain on sale of timberlands — — — 32 32 0.04 Tota
Slide 5: Adjusted EBITDA
ADJUSTED EBITDA1 TOTAL COMPANY2 REAL ESTATE & ENR $150 $1,573 $1,650 $101 $ Millions $96 $91 $1,320 $1,101 $100 $ Millions $60 $60 $990 $745 $746 $57 $657 $50 $660 $413 $386 $23 $330 $0 $0 Q1.20 Q2.20 Q3.20 Q4.20 Q1.21 Q2.21 Q3.21 Q1.20 Q2.20 Q3.20 Q4.20 Q1.21 Q2.21 Q3.21 Real Estate $ 86 42 44 4 76
Slide 6: Timberlands Segment
TIMBERLANDS SEGMENT TIMBERLANDS ($ Millions) 2021 2021 TIMBERLANDS ($ Millions) 2021 2021 Adjusted EBITDA by Region Q2 Q3 Segment Statement of Operations Q2 Q3 West $ 103 $ 90 Third-party sales $ 405 $ 423 South 76 76 Intersegment sales 136 129 North 2 1 Total Sales 541 552 Other (1) (2) Costs of sa
Slide 7: Timberlands Key Drivers: 2021 Q3 vs. 2021 Q2
TIMBERLANDS KEY DRIVERS: 2021 Q3 vs. 2021 Q2 REGION KEY DRIVERS WEST • Fee Harvest Volumes: Modestly lower, continued salvage operations and fire-related operating restrictions • Domestic Sales Volumes: Modestly lower, reduced fee harvest volumes • Export Sales Realizations: Moderately higher • Per
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 $145.64 7,000 $40 $137.80 $34.50 $35.11 $35.56 $130.69 $150 $34.27 $33.68 $33.68 $33.69 Volumes (Thousands of tons) $124.37 Volumes (Thousands of tons) 3,000
Slide 9: Fee Harvest Volumes and Intersegment Sales Volumes
FEE HARVEST VOLUMES AND INTERSEGMENT SALES VOLUMES FEE HARVEST VOLUMES INTERSEGMENT LOG SALES VOLUMES 7,500 1,500 1,331 1,307 6,130 1,263 5,914 5,912 1,220 5,856 6,250 5,596 5,509 1,127 1,099 5,376 1,200 1,076 Thousands of tons Thousands of tons 5,000 900 761 720 737 741 733 3,750 646 652 2,310 2,23
Slide 10: Real Estate, Energy & Natural Resources (ENR) Segment
REAL ESTATE, ENERGY & NATURAL RESOURCES (ENR) SEGMENT REAL ESTATE & ENR ($ Millions) 2021 2021 REAL ESTATE & ENR ($ Millions) 2021 2021 Adjusted EBITDA by Business Q2 Q3 Segment Statement of Operations Q2 Q3 Real Estate $ 66 $ 38 Total sales $ 110 $ 69 Energy & Natural Resources 25 22 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 60 $7,000 $6,316 45 $5,700 45 Price per acre Acres (thousands) 35 $4,400 $4,005 31 30 $3,227 $3,803 $3,100 19 18 $1,992 15 11 $1,501 $1,800 1 $1,381 0 $500 Q1.20 Q2.20 Q3.20 Q4.20 Q1.21 Q2.21 Q3.21 Q1.20 Q2.20 Q3
Slide 12: Wood Products Segment
WOOD PRODUCTS SEGMENT WOOD PRODUCTS ($ Millions) 2021 2021 WOOD PRODUCTS ($ Millions) 2021 2021 Adjusted EBITDA by Business Q2 Q3 Segment Statement of Operations Q2 Q3 Lumber $ 804 $ 118 Total sales $ 2,629 $ 1,853 OSB 472 344 Costs of sales 1,229 1,270 Engineered Wood Products 53 76 Gross margin 1,
Slide 13: Wood Products Key Drivers: 2021 Q3 vs. 2021 Q2
WOOD PRODUCTS KEY DRIVERS: 2021 Q3 vs. 2021 Q2 BUSINESS KEY DRIVERS LUMBER • Sales Realizations: Decreased 52% • Sales Volumes: Increased moderately, improved home center takeaway partially offset by weather-related downtime • Log Costs: Increased slightly, primarily for Canadian logs ORIENTED • Sal
Slide 14: Third-Party Sales Volumes and Realizations
THIRD-PARTY SALES VOLUMES AND REALIZATIONS1 Lumber $1,077 OSB $911 4,500 $1,100 5,000 $950 $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 $674 $609 2,700 $516 $660 $503 3,000 $570 $416 $438 $395 1,800
Slide 15: Unallocated Items
UNALLOCATED ITEMS UNALLOCATED ITEMS ($ Millions) 1 2021 2021 UNALLOCATED ITEMS ($ Millions)1 2021 2021 Q2 Q3 Q2 Q3 Unallocated corporate function expenses and variable Costs of sales 3 $ (42) $ (2) $ (36) $ (33) compensation expense G&A expense 4 (31) (35) Liability classified share-based compensati
Slide 16: Financial Items
FINANCIAL ITEMS Cash Flow from Operations KEY FINANCIAL METRICS ($ Millions) 2021 2021 $1,500 $1,308 Q2 Q3 $1,200 Ending Cash Balance $ 1,777 $ 2,326 $900 $ Millions $698 $659 $608 Total Debt 1 $ 5,250 $ 5,250 $600 $391 Net Debt to Adjusted EBITDA (LTM) 2 0.9 0.7 $300 $86 $444 Net Debt to Enterprise
Slide 17: Adjusted Funds Available for Distribution
ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION1 ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION ($ Millions) 2021 Q3 Q3 YTD TARGETED RETURN OF CASH Net Cash from Operations $ 659 $ 2,665 TO SHAREHOLDERS Capital Expenditures 2 (98) (223) Based on 2021 Results Adjustments to FAD — — Adjusted Funds Available for
Slide 18: Outlook: 2021 Q4 vs. 2021 Q3
OUTLOOK: 2021 Q4 vs. 2021 Q3 EXPECTED EARNINGS SEGMENT KEY DRIVERS & ADJUSTED EBITDA TIMBERLANDS Comparable to 2021 Q3 West South North Fee Harvest Volumes: Fee Harvest Volumes: Fee Harvest Volumes: Moderately higher Slightly higher Slightly lower Domestic Sales Realizations: Sales Realizations: Sal
Slide 19: Wood Products Sales Realizations: Current vs. 2021 Q3
WOOD PRODUCTS SALES REALIZATIONS: CURRENT VS. 2021 Q3 WEYERHAEUSER’S AVERAGE SALES REALIZATIONS Approximate Change As of October 22, 2021 LUMBER1 Q4 QTD vs. WY’s +$5/MBF HIGHER SENSITIVITY Q3 AVERAGE CHANGE IN REALIZATIONS $10/MBF ≈ $50 million CURRENT vs. EBITDA +$20/MBF HIGHER ANNUALLY Q3 AVERAGE
Slide 20: Earnings Summary
EARNINGS SUMMARY $ Millions (except EPS) 2020 2021 Adjusted EBITDA by Segment Q1 Q2 Q3 Q4 Q1 Q2 Q3 Timberlands $ 173 $ 140 $ 130 $ 167 $ 172 $ 180 $ 165 Real Estate, Energy & Natural Resources 101 57 60 23 96 91 60 Wood Products 184 198 615 530 889 1,386 565 Unallocated Items (45) (9) (60) (63) (56)
Slide 21: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Diluted EPS Before Special Items $ 0.18 $ 0.11 $ 0.52 $ 0.48 $ 0.91 $ 1.37 $ 0.60 Special Items: Pension settlement charge — — — (0.26) — — — Early extinguishment of debt charges — (0.02) (0.03) (0.07) — — — Legal benefit 0.02 — — — —
Slide 22: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION By Segment $ Millions 2018 2019 2020 2021 FY FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 LTM1 Timberlands $ 902 $ 680 $ 173 $ 140 $ 130 $ 167 $ 610 $ 172 $ 180 $ 165 $ 684 Real Estate & ENR 264 274 101 57 60 23 241 96 91 60 270 Wood Products 987 476 184 198 615 530 1,527 889 1,386 565
Slide 23: Adjusted EBITDA Reconciliation: Timberlands
ADJUSTED EBITDA RECONCILIATION Timberlands $ Millions 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 West $ 93 $ 73 $ 72 $ 102 $ 101 $ 103 $ 90 South 78 70 62 64 69 76 76 North 3 (1) — 2 3 2 1 Other (1) (2) (4) (1) (1) (1) (2) Total Timberlands Adjusted EBITDA1 $ 173 $ 140 $ 130 $ 167 $ 172 $ 180 $ 165 West (28) (2
Slide 24: Adjusted EBITDA Reconciliation: Real Estate, ENR
ADJUSTED EBITDA RECONCILIATION Real Estate, Energy & Natural Resources $ Millions 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Real Estate $ 86 $ 42 $ 44 $ 4 $ 76 $ 66 $ 38 Energy & Natural Resources 15 15 16 19 20 25 22 Total Real Estate & ENR Adjusted EBITDA1 $ 101 $ 57 $ 60 $ 23 $ 96 $ 91 $ 60 Depletion, depre
Slide 25: Adjusted EBITDA Reconciliation: Wood Products
ADJUSTED EBITDA RECONCILIATION Wood Products $ Millions 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Lumber $ 79 $ 103 $ 363 $ 254 $ 513 $ 804 $ 118 OSB 45 41 160 220 300 472 344 EWP 51 42 58 37 42 53 76 Distribution 12 13 37 24 39 75 22 Other (3) (1) (3) (5) (5) (18) 5 Total Wood Products Adjusted EBITDA1, 2 $ 1
Slide 26: Adjusted EBITDA Reconciliation: Unallocated
ADJUSTED EBITDA RECONCILIATION Unallocated $ Millions 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1 Total Unallocated Adjusted EBITDA $ (45) $ (9) $ (60) $ (63) $ (56) $ (84) $ (44) Total depletion, depreciation & amortization (2) (1) (2) (1) (2) (1) (2) Special items included in operating income (loss) 12 — — —
Slide 27: Net Debt to Adjusted EBITDA Reconciliation
NET DEBT TO ADJUSTED EBITDA RECONCILIATION $ Millions 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Net Debt to Adjusted EBITDA (LTM) 1,2 4.5 4.1 2.9 2.3 1.5 0.9 0.7 Total debt $ 7,426 $ 6,299 $ 5,974 $ 5,475 $ 5,475 $ 5,250 $ 5,250 Less: cash and cash equivalents 1,458 643 787 495 1,016 1,777 2,326 Net Debt $ 5,9
Slide 28: Funds Available for Distribution Reconciliation
FUNDS AVAILABLE FOR DISTRIBUTION RECONCILIATION ADJUSTED FUNDS AVAILABLE FOR DISTRIBUTION ($ Millions) 2018 2019 2020 2021 FY FY FY Q1 Q2 Q3 YTD Net Cash from Operations $ 1,112 $ 966 $ 1,529 $ 698 $ 1,308 $ 659 $ 2,665 Capital Expenditures (427) (384) (281) (53) (72) (98) (223) Funds Available for