Weyerhaeuser Reports Fourth Quarter, Full Year Results

SEATTLE, Jan. 29, 2021 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported fourth quarter net earnings of $292 million, or 39 cents per diluted share, on net sales of $2.1 billion. This compares with a net loss of $14 million, or two cents per diluted share, on net sales of $1.5 billion for the same period last year and net earnings of $283 million for the third quarter of 2020.

View our earnings release and financial statements in a printer-friendly PDF.

Excluding net after-tax charges of $69 million for special items, the company reported fourth quarter net earnings of $361 million, or 48 cents per diluted share. This compares with net earnings before special items of $23 million for the same period last year and $386 million for the third quarter of 2020.

Adjusted EBITDA for the fourth quarter of 2020 was $657 million compared with $260 million for the same period last year and $745 million for the third quarter of 2020.

For the full year 2020, Weyerhaeuser reported net earnings of $797 million, or $1.07 per diluted share, on net sales of $7.5 billion. This compares with a net loss of $76 million on net sales of $6.6 billion for the full year 2019.

Full year 2020 includes net after-tax charges of $165 million for special items. Excluding these items, the company reported net earnings of $962 million, or $1.29 per diluted share. This compares with net earnings before special items of $285 million for the full year 2019.

Adjusted EBITDA for full year 2020 was $2.2 billion compared with $1.3 billion for full year 2019.

"In 2020 each of our businesses delivered remarkable results in the face of unprecedented operating and market challenges," said Devin W. Stockfish, president and chief executive officer. "Our teams delivered the highest Wood Products Adjusted EBITDA on record, achieved record low cost performance in lumber, and captured approximately $100 million of operational excellence improvements across our businesses, all while demonstrating an unwavering commitment to safety. In addition, we reduced gross debt by more than $900 million, implemented a new dividend framework, strategically upgraded our Oregon timberland holdings and launched a new sustainability strategy. As we embark on 2021, we are encouraged by the macroeconomic tailwinds that continue to bolster strong U.S. housing and repair and remodel markets, and we remain focused on creating value for shareholders through our unrivaled portfolio of assets, industry-leading operating performance and disciplined capital allocation."

TIMBERLANDS

Q4 2020 Performance – In the West, average sales realizations for domestic and Japan export logs increased from the third quarter, and export log sales volumes were significantly higher. Fee harvest volumes increased 9 percent as harvest operations fully resumed following third quarter wildfire activity. In the South, average log sales realizations were comparable to the third quarter, as higher average sawlog realizations were largely offset by lower realizations for fiber logs. Unit logging and hauling costs decreased, and log sales volumes were slightly lower.

Fourth quarter special items include a $182 million gain on the previously announced sale of certain southern Oregon timberlands, which was completed in November.

Q1 2021 Outlook – Weyerhaeuser expects first quarter earnings and Adjusted EBITDA will be slightly higher than the fourth quarter. In the West, the company anticipates higher export log sales volumes, slightly lower average domestic log sales realizations, slightly higher unit logging and hauling costs, and seasonally lower road spending. In the South, the company expects higher fee harvest volumes and comparable average log sales realizations.  

REAL ESTATE, ENERGY & NATURAL RESOURCES

Q4 2020 Performance – Earnings and Adjusted EBITDA decreased due to fewer real estate sales. Average land basis was significantly lower due to the mix of properties sold. The segment reported full year Adjusted EBITDA of $241 million.

Q1 2021 Outlook – Weyerhaeuser anticipates first quarter earnings will be slightly higher than first quarter 2020, and Adjusted EBITDA will be modestly lower than first quarter 2020 due to the timing and mix of real estate transactions. The company expects full year 2021 Adjusted EBITDA for the segment will be approximately $255 million.

WOOD PRODUCTS

Q4 2020 Performance – Sales volumes declined slightly across most product lines from the third quarter. Raw material costs increased significantly, primarily for Western and Canadian logs and oriented strand board webstock. Per unit manufacturing costs increased for oriented strand board due to planned maintenance outages.

Average sales realizations for oriented strand board improved 27 percent compared with the third quarter, as benchmark pricing remained near record levels. This was largely offset by a 10 percent decrease in average lumber sales realizations.

Q1 2021 Outlook – Excluding the effect of changes in average sales realizations for lumber and oriented strand board, the company expects first quarter earnings and Adjusted EBITDA will be significantly higher than the fourth quarter. The company expects improved manufacturing costs across product lines and slightly higher sales volumes, primarily for lumber and engineered wood products. To date, first quarter benchmark pricing for lumber and oriented strand board is significantly higher than the fourth quarter average.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control approximately 11 million acres of timberlands in the U.S. and manage additional timberlands under long-term licenses in Canada. We manage these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. We are also one of the largest manufacturers of wood products in North America. Our company is a real estate investment trust. In 2020, we generated $7.5 billion in net sales and employed approximately 9,400 people who serve customers worldwide. We are listed on the Dow Jones Sustainability North America Index. Our common stock trades on the New York Stock Exchange under the symbol WY. Learn more at www.weyerhaeuser.com.

EARNINGS CALL INFORMATION

Weyerhaeuser will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on January 29, 2021 to discuss fourth quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on January 29, 2021.

To join the conference call from within North America, dial 877-407-0792 (access code: 13714046) at least 15 minutes prior to the call. Those calling from outside North America should dial 201-689-8263 (access code: 13714046). Replays will be available for two weeks at 844-512-2921 (access code: 13714046) from within North America, and at 412-317-6671 (access code: 13714046) from outside North America.

FORWARD-LOOKING STATEMENTS

This news release 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 Securities Exchange Act of 1934, including, but not limited to, with respect to our outlook and expectations concerning the following: earnings and Adjusted EBITDA for each of our businesses; log export sales volumes and domestic log sales realizations; forestry road expense and logging costs; fee harvest volumes; manufacturing costs for our wood products business and sales volumes for our lumber and engineered wood products lines. Forward-looking statements are generally identified by words such as "believe," "expect," "anticipate," "estimate," "future," "planned," "may," "will," "maintain," and similar words and expressions. Forward-looking statements are based on our current expectations and assumptions. The realization of our expectations and the accuracy of our assumptions are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to:

• the effect of general economic conditions, including employment rates, interest rate levels, housing starts, general availability of financing for home mortgages and the relative strength of the U.S. dollar;
• the effect of COVID-19 and other viral or disease outbreaks and their potential effects on our business, results of operations, cash flows, financial condition and future prospects;
• market demand for the company's products, including market demand for our timberland properties with higher and better uses, which is related to, among other factors, the strength of the various U.S. business segments and U.S. and international economic conditions;
• changes in currency exchange rates, particularly the relative value of the U.S. dollar to the Japanese yen, the Chinese yuan, and the Canadian dollar, and the relative value of the euro to the yen;
• restrictions on international trade and tariffs imposed on imports or exports;
• the availability and cost of shipping and transportation;
• economic activity in Asia, especially Japan and China;
• performance of our manufacturing operations, including maintenance and capital requirements;
• potential disruptions in our manufacturing operations;
• the level of competition from domestic and foreign producers;
• our operational excellence initiatives;
• the successful and timely execution and integration of our strategic acquisitions, including our ability to realize expected benefits and synergies, and the successful and timely execution of our strategic divestitures, each of which is subject to a number of risks and conditions beyond our control including, but not limited to, timing, required regulatory approvals or the occurrence of any event, change or other circumstances that could give rise to a termination of any acquisition or divestiture transaction under the terms of the governing transaction agreements;
• raw material availability and prices;
• the effect of weather;
• changes in global or regional climate conditions and governmental response to such changes;
• the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;
• energy prices;
• transportation and labor availability and costs;
• federal tax policies;
• the effect of forestry, land use, environmental and other governmental regulations;
• legal proceedings;
• performance of pension fund investments and related derivatives;
• the effect of timing of employee retirements and changes in the market price of our common stock on charges for share-based compensation;
• the accuracy of our estimates of costs and expenses related to contingent liabilities and charges related to casualty losses;
• changes in accounting principles; and
• other risks and uncertainties identified in our 2019 Annual Report on Form 10-K, as well as those set forth from time to time in our other public statements, reports, registration statements, prospectuses, information statements and other filings with the SEC.

It is not possible to predict or identify all risks and uncertainties that might affect the accuracy of our forward-looking statements and, consequently, our descriptions of such risks and uncertainties should not be considered exhaustive. There is no guarantee that any of the events anticipated by these forward-looking statements will occur, and if any of the events do occur, there is no guarantee what effect they will have on the company's business, results of operations, cash flows, financial condition and future prospects.

Forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.

RECONCILIATION OF ADJUSTED EBITDA TO NET EARNINGS

We reconcile Adjusted EBITDA to net earnings for the consolidated company and to operating income (loss) for the business segments, as those are the most directly comparable U.S. GAAP measures for each.

The table below reconciles Adjusted EBITDA for the year ended December 31, 2020:

The table below reconciles Adjusted EBITDA for the year ended December 31, 2019:

The table below reconciles Adjusted EBITDA for the quarter ended December 31, 2020:

The table below reconciles Adjusted EBITDA for the quarter ended September 30, 2020:

The table below reconciles Adjusted EBITDA for the quarter ended December 31, 2019:

RECONCILIATION OF NET EARNINGS BEFORE SPECIAL ITEMS TO NET EARNINGS (LOSS)

We reconcile net earnings before special items to net earnings and net earnings per diluted share before special items to net earnings per diluted share, as those are the most directly comparable U.S. GAAP measures. We believe the measures provide meaningful supplemental information for investors about our operating performance, better facilitate period to period comparisons and are widely used by analysts, lenders, rating agencies and other interested parties.

The table below reconciles net earnings before special items to net earnings (loss):

The table below reconciles net earnings per diluted share before special items to net earnings (loss) per diluted share:

For more information contact:
Analysts - Beth Baum, 206-539-3907
Media - Nancy Thompson, 919-861-0342

SOURCE Weyerhaeuser Company