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Weyerhaeuser reports first quarter results

- Earnings from continuing operations more than doubled compared with fourth quarter

- Adjusted EBITDA increased 14%

- Achieved $125 million merger cost synergy target

Apr 28, 2017

SEATTLE, April 28, 2017 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported first quarter net earnings to common shareholders of $157 million, or 21 cents per diluted share, on net sales of $1.7 billion. This compares with earnings from continuing operations of $61 million, or 8 cents per diluted share, on net sales of $1.4 billion for the same period last year.

Excluding an after-tax special item of $10 million for merger-related costs, the company reported net earnings of $167 million, or 22 cents per diluted share for the first quarter. This compares with net earnings from continuing operations before special items of $126 million for the same period last year and $106 million for fourth quarter 2016.

"I am very pleased with our first quarter performance, as our employees capitalized on operational excellence improvements, merger-related synergies and strengthening market conditions to deliver outstanding results," said Doyle R. Simons, president and chief executive officer. "In addition, we achieved our increased $125 million run-rate merger cost synergy target. Looking forward, we remain relentlessly focused on leveraging merger synergies and operational improvements to drive industry leading performance and superior value for our shareholders."

WEYERHAEUSER FINANCIAL HIGHLIGHTS
Weyerhaeuser merged with Plum Creek Timber Company, Inc. (Plum Creek) on February 19, 2016. The financial statements presented within this release include Plum Creek financial results from February 19, 2016 forward.

During 2016, Weyerhaeuser sold its Cellulose Fibers businesses. Results for the Cellulose Fibers segment are presented as discontinued operations.

WEYERHAEUSER FINANCIAL HIGHLIGHTS

2016


2017


2016


(millions, except per share data)

4Q


1Q


1Q


Net sales

$1,596


$1,693


$1,405


Earnings from continuing operations

$62


$157


$61


Net earnings attributable to Weyerhaeuser common shareholders

$551


$157


$70


Earnings per diluted share from continuing operations

$0.08


$0.21


$0.08


Net earnings per diluted share

$0.73


$0.21


$0.11









Weighted average shares outstanding, diluted(1)

753


755


635


Net earnings from continuing operations attributable to Weyerhaeuser common shareholders before special items(2)

$106


$167


$126


Net earnings from continuing operations per diluted share attributable to Weyerhaeuser common shareholders before special items

$0.14


$0.22


$0.20









Adjusted EBITDA(3)

$400


$454


$336









(1) In first quarter 2016, Weyerhaeuser issued approximately 279 million shares in conjunction with the Plum Creek merger. During 2016, Weyerhaeuser repurchased approximately 68 million shares to complete our $2 billion accelerated repurchase commitment, part of the $2.5 billion repurchase authorization announced in conjunction with the merger transaction. In third quarter 2016, the company issued approximately 23 million shares as a result of the conversion of its mandatory convertible preference shares.

(2) Special items for first quarter 2017 include after-tax charges of $10 million for Plum Creek merger-related costs. Fourth quarter 2016 includes after-tax special charges of $24 million for a tax adjustment, $11 million for Plum Creek merger-related costs and non-cash charges of $9 million related to legacy real estate projects. First quarter 2016 after-tax special items include $98 million of Plum Creek merger related costs and a $22 million gain on the sale of the company's Federal Way headquarters campus.

(3) Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income from continuing operations, adjusted for depreciation, depletion, amortization, basis of real estate sold, unallocated pension service costs and special items. Adjusted EBITDA excludes results from joint ventures. Adjusted EBITDA should not be considered in isolation from and is not intended to represent an alternative to our GAAP results. A reconciliation of Adjusted EBITDA to GAAP earnings is included within this release.











TIMBERLANDS

FINANCIAL HIGHLIGHTS (millions)

4Q 2016


1Q 2017


Change

Net sales

$672


$688


$16

Contribution to pre-tax earnings

$123


$148


$25

Adjusted EBITDA

$223


$242


$19

1Q 2017 Performance - In the West, domestic and export sales realizations increased compared to the fourth quarter as wet weather limited domestic log supply and customer demand remained strong. Fee harvest volumes increased, and logging and road costs decreased as harvest activity shifted into lower elevation tracts. In the South, fee harvest volumes decreased and average sales realizations declined slightly due to a higher proportion of pulpwood sales. The Timberlands segment continued to benefit from merger-related operational synergies during the quarter.

2Q 2017 Outlook - Weyerhaeuser anticipates second quarter earnings and Adjusted EBITDA from the Timberlands segment will be comparable to the second quarter of 2016. In the West, the company expects average sales realizations to increase slightly in the second quarter compared with the first quarter, more than offset by lower harvest volumes and higher logging, road and silviculture costs. In the South, the company anticipates seasonally higher silviculture costs compared with first quarter, partially offset by higher harvest volumes. Average log sales realizations in the South are anticipated to be roughly comparable to first quarter levels.

REAL ESTATE, ENERGY & NATURAL RESOURCES

FINANCIAL HIGHLIGHTS (millions)

4Q 2016


1Q 2017


Change

Net sales

$102


$53


($49)

Contribution to pre-tax earnings

$13


$26


$13

Pre-tax charge for special items

$14


$0


($14)

Contribution to pre-tax earnings before special items

$27


$26


($1)

Adjusted EBITDA

$90


$43


($47)

1Q 2017 Performance - First quarter Real Estate sales decreased seasonally compared with the fourth quarter. Earnings before special items were comparable due to a lower average land basis on the mix of properties sold. Energy & Natural Resources earnings and Adjusted EBITDA were similar to the fourth quarter.

2Q 2017 Outlook - Weyerhaeuser anticipates second quarter earnings and Adjusted EBITDA from the Real Estate, Energy & Natural Resources segment will be comparable to the first quarter.  We continue to expect full year 2017 Adjusted EBITDA for the segment will exceed $250 million.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS (millions)

4Q 2016


1Q 2017


Change

Net sales

$1,039


$1,154


$115

Contribution to pre-tax earnings

$99


$172


$73

Adjusted EBITDA

$132


$207


$75

1Q 2017 Performance - Average realizations for lumber and oriented strand board increased compared with the fourth quarter, and sales volume rose across all product lines due to seasonally improved demand. Operating rates increased significantly as a result of reduced downtime for maintenance and capital projects. Per unit manufacturing costs decreased across all product lines due to strong mill performance and ongoing operational excellence initiatives.

2Q 2017 Outlook - Weyerhaeuser expects significantly higher earnings and Adjusted EBITDA from the Wood Products segment in the second quarter compared with the first quarter. The company expects higher average sales realizations for lumber, oriented strand board and engineered wood products as well as increased sales volumes.

ABOUT WEYERHAEUSER
Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control more than 13 million acres of timberlands, primarily 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. Our company is a real estate investment trust. In February 2016, we merged with Plum Creek Timber Company, Inc. In 2016, we generated $6.4 billion in net sales and employed approximately 10,400 people who serve customers worldwide. We are listed on the Dow Jones World Sustainability 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 April 28 to discuss first quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on April 28.

To join the conference call from within North America, dial 877-296-9413 (access code: 43727965) at least 15 minutes prior to the call. Those calling from outside North America should dial 706-679-2458 (access code: 43727965). Replays will be available for two weeks at 855-859-2056 (access code: 43727965) from within North America and at 404-537-3406 (access code: 43727965) 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 with respect to the following for the second quarter of 2017: earnings and Adjusted EBITDA; log realizations; sales volumes across Wood Products product lines, log and manufacturing costs and expected realizations for lumber, oriented strand board and engineered wood products; and various logging and forestry costs. These statements generally are identified by words such as "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," and expressions such as "will be," "will continue," "will likely result," and similar words and expressions. These statements are based on our current expectations and assumptions and are not guarantees of future performance.  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, availability of financing for home mortgages and strength of the U.S. dollar;
  • market demand for our 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 and restrictions on international trade;
  • performance of our manufacturing operations, including maintenance requirements;
  • potential disruptions in our manufacturing operations;
  • the level of competition from domestic and foreign producers;
  • raw material availability and prices;
  • the effect of weather;
  • the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;
  • energy prices;
  • market demand for the company's products, including market demand for our timberland properties that have 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;
  • the successful execution of our internal plans and strategic initiatives, including restructuring and cost reduction 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 and required regulatory approvals;
  • 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 retirements and changes in the market price of our common stock on charges for share-based compensation;
  • changes in accounting principles; and
  • other factors described under "Risk Factors" in our 2016 Annual Report on Form 10-K as well as those set forth from time to time in our other public statements and other reports and filings with the Securities and Exchange Commission.

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.

For more information contact:


Analysts - Beth Baum or Krista Kochivar (206) 539-3907



Media - Anthony Chavez (206) 539-4406

 

RECONCILIATION OF ADJUSTED EBITDA TO NET EARNINGS


We reconcile Adjusted EBITDA to net earnings for the consolidated company and to operating income 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 quarter ended March 31, 2017 :


DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate & ENR


Wood Products


Unallocated Items


Total

Adjusted EBITDA by Segment:










Net earnings









$

157


Earnings from discontinued operations, net of income taxes










Interest expense, net of capitalized interest









99


Income taxes









24


Net contribution to earnings

$

148



$

26



$

172



$

(66)



$

280


Equity earnings from joint ventures










Non-operating pension and other postretirement benefit (costs) credits







22



22


Interest income and other







(9)



(9)


Operating income (loss)

148



26



172



(53)



293


Depreciation, depletion and amortization

94



3



35



1



133


Basis of real estate sold



14







14


Unallocated pension service costs







2



2


Special items(1)







12



12


Adjusted EBITDA

$

242



$

43



$

207



$

(38)



$

454



(1) Pre-tax special items include $12 million of Plum Creek merger-related costs.

 

The table below reconciles Adjusted EBITDA for the quarter ended December 31, 2016


DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate & ENR


Wood Products


Unallocated Items


Total

Adjusted EBITDA by Segment:










Net earnings









$

551


Earnings from discontinued operations, net of income taxes









(489)


Interest expense, net of capitalized interest









108


Income taxes









25


Net contribution to earnings

$

123



$

13



$

99



$

(40)



$

195


Equity (earnings) loss from joint ventures



(1)







(1)


Non-operating pension and other postretirement benefit (costs) credits







(11)



(11)


Interest income and other







(9)



(9)


Operating income (loss)

123



12



99



(60)



174


Depreciation, depletion and amortization

100



4



33





137


Basis of real estate sold



60







60


Unallocated pension service costs







1



1


Special items(1)



14





14



28


Adjusted EBITDA

$

223



$

90



$

132



$

(45)



$

400



(1)  Pre-tax special items include: $14 million Plum Creek merger-related costs and $14 million restructuring, impairments and other charges.

 

The table below reconciles Adjusted EBITDA for the quarter ended March 31, 2016:


DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate & ENR


Wood Products


Unallocated Items


Total

Adjusted EBITDA by Segment:










Net earnings









$

81


Earnings from discontinued operations, net of income taxes









(20)


Interest expense, net of capitalized interest









95


Income taxes









11


Net contribution to earnings

$

129



$

15



$

87



$

(64)



$

167


Equity earnings from joint ventures







(5)



(5)


Non-operating pension and other postretirement benefit (costs) credits







(14)



(14)


Interest income and other







(9)



(9)


Operating income (loss)

129



15



87



(92)



139


Depreciation, depletion and amortization

70



2



30



2



104


Basis of real estate sold



17







17


Unallocated pension service costs







2



2


Special items(1)







74



74


Adjusted EBITDA

$

199



$

34



$

117



$

(14)



$

336



(1)  Pre-tax special items include: $110 million Plum Creek merger-related costs and $36 million gain on sale of non-strategic assets.

 

Weyerhaeuser Company



Exhibit 99.2


Q1.2017 Analyst Package





Preliminary results (unaudited)








Consolidated Statement of Operations(1)(2)









in millions

Q4


Q1



December 31,
2016


March 31,
2017


March 31,
2016


Net sales

$

1,596



$

1,693



$

1,405



Cost of products sold

1,278



1,272



1,103



Gross margin

318



421



302



Selling expenses

22



22



23



General and administrative expenses

85



87



79



Research and development expenses

5



4



5



Charges for integration and restructuring, closures and asset impairments

29



13



111



Other operating costs (income), net

3



2



(55)



Operating income from continuing operations

174



293



139



Equity earnings from joint ventures

1





5



Non-operating pension and other postretirement benefit (costs) credits

11



(22)



14



Interest income and other

9



9



9



Interest expense, net of capitalized interest

(108)



(99)



(95)



Earnings from continuing operations before income taxes

87



181



72



Income taxes

(25)



(24)



(11)



Earnings from continuing operations

62



157



61



Earnings from discontinued operations, net of income taxes

489





20



Net earnings

551



157



81



Dividends on preference shares





(11)



Net earnings attributable to Weyerhaeuser common shareholders

$

551



$

157



$

70





(1) Discontinued operations as presented herein consist of the operations of our former Cellulose Fibers segment. The corresponding assets and liabilities were classified as held for sale on our balance sheet. All periods presented have been revised to separate the results of discontinued operations from the results of our continuing operations.




(2) Amounts presented reflect the balances and results of operations acquired in our merger with Plum Creek Timber, Inc., beginning on the merger date of February 19, 2016.




 


Per Share Information





Q4


Q1



December 31,
2016


March 31,
2017


March 31,
2016


Earnings per share attributable to Weyerhaeuser common shareholders, basic:


Continuing operations

$

0.09



$

0.21



$

0.08



Discontinued operations

0.65





0.03



Net earnings per share

$

0.74



$

0.21



$

0.11










Earnings per share attributable to Weyerhaeuser common shareholders, diluted:


Continuing operations

$

0.08



$

0.21



$

0.08



Discontinued operations

0.65





0.03



Net earnings per share

$

0.73



$

0.21



$

0.11










Dividends paid per common share

$

0.31



$

0.31



$

0.31










Weighted average shares outstanding (in thousands):







Basic

748,835



750,665



632,004



Diluted

752,768



754,747



634,872










Common shares outstanding at end of period (in thousands)

748,528



751,411



759,044










 


Weyerhaeuser Company







Q1.2017 Analyst Package







Preliminary results (unaudited)














Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization (Adjusted EBITDA)*









in millions

Q4


Q1



December 31,
2016


March 31,
2017


March 31,
2016


Net earnings

$

551



$

157



$

81



Earnings from discontinued operations, net of income taxes

(489)





(20)



Equity earnings from joint ventures

(1)





(5)



Non-operating pension and other postretirement benefit costs (credits)

(11)



22



(14)



Interest income and other

(9)



(9)



(9)



Interest expense, net of capitalized interest

108



99



95



Income taxes

25



24



11



Operating income from continuing operations

174



293



139



Depreciation, depletion and amortization

137



133



104



Basis of real estate sold

60



14



17



Unallocated pension service costs

1



2



2



Special items

28



12



74



Adjusted EBITDA*

$

400



$

454



$

336










*Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company.

 

Adjusted EBITDA, as we define it, is operating income from continuing operations adjusted for depreciation, depletion, amortization, basis of real estate sold, unallocated pension service costs and special items. Adjusted EBITDA excludes results from joint ventures.

 

Our definition of Adjusted EBITDA may be different from similarly titled measures reported by other companies. Adjusted EBITDA should not be considered in isolation from and is not intended to represent an alternative to our GAAP results.



 

Special Items Included in Net Earnings (income tax affected)







in millions

Q4


Q1


December 31,
2016


March 31,
2017


March 31,
2016

Net earnings attributable to Weyerhaeuser common shareholders

$

551



$

157



$

70


Plum Creek merger- and integration-related costs

11



10



98


Gain on sale of non-strategic asset





(22)


Restructuring, impairments and other charges

9






Tax adjustment

24






Net earnings attributable to Weyerhaeuser common shareholders before special items

595



167



146


Earnings from discontinued operations, net of income taxes

(489)





(20)


Net earnings from continuing operations attributable to Weyerhaeuser common shareholders before special items

$

106



$

167



$

126








per share

Q4


Q1


December 31,
2016


March 31,
2017


March 31,
2016

Net earnings per diluted share attributable to Weyerhaeuser common shareholders

$

0.73



$

0.21



$

0.11


Plum Creek merger- and integration-related costs

0.01



0.01



0.15


Gain on sale of non-strategic asset





(0.03)


Restructuring, impairments and other charges

0.01






Tax adjustment

0.04






Net earnings per diluted share attributable to Weyerhaeuser common shareholders before special items

0.79



0.22



0.23


Earnings from discontinued operations, net of income taxes

(0.65)





(0.03)


Net earnings from continuing operations per diluted share attributable to Weyerhaeuser common shareholders before special items

$

0.14



$

0.22



$

0.20


 


Weyerhaeuser Company




Q1.2017 Analyst Package




Preliminary results (unaudited)






Consolidated Balance Sheet







in millions

December 31,
2016


March 31,
2017


March 31,
2016


ASSETS






Current assets:






Cash and cash equivalents

$

676



$

455



$

411


Receivables, less allowances

390



472



382


Receivables for taxes

84



10



25


Inventories

358



386



423


Prepaid expenses and other current assets

114



142



123


Assets of discontinued operations





1,929


Total current assets

1,622



1,465



3,293


Property and equipment, net

1,562



1,544



1,446


Construction in progress

213



230



151


Timber and timberlands at cost, less depletion charged to disposals

14,299



14,218



14,547


Minerals and mineral rights, net

319



317



325


Investments in and advances to joint ventures

56



56



938


Goodwill

40



40



40


Deferred tax assets

293



287



291


Other assets

224



229



409


Restricted financial investments held by variable interest entities

615



615



615


Total assets

$

19,243



$

19,001



$

22,055








LIABILITIES AND EQUITY






Current liabilities:






Current maturities of long-term debt

$

281



$

343



$


Accounts payable

233



227



284


Accrued liabilities

692



452



487


Liabilities of discontinued operations





674


Total current liabilities

1,206



1,022



1,445


Note payable to timberland venture





835


Long-term debt

6,329



6,263



7,715


Long-term debt (nonrecourse to the company) held by variable interest entities

511



511



511


Deferred pension and other postretirement benefits

1,322



1,287



983


Deposit received from contribution of timberlands to related party

426



422




Other liabilities

269



281



285


Total liabilities

10,063



9,786



11,774


Total equity

9,180



9,215



10,281


Total liabilities and equity

$

19,243



$

19,001



$

22,055


 


Weyerhaeuser Company




Q1.2017 Analyst Package






Preliminary results (unaudited)






Consolidated Statement of Cash Flows







in millions

Q4


Q1


December 31,
2016


March 31,
2017


March 31,
2016

Cash flows from operations:






Net earnings

$

551



$

157



$

81


Noncash charges (credits) to income:






Depreciation, depletion and amortization

137



133



142


Basis of real estate sold

60



14



17


Deferred income taxes, net

(255)



3



18


Gains on sales of discontinued operations

(729)






Gains on sales of non-strategic assets

(12)



(7)



(41)


Pension and other postretirement benefits



32



4


Other noncash charges (credits)

27



13



8


Change in:






Receivables less allowances

42



(70)



(47)


Receivable for taxes

69



(36)



10


Inventories

12



(28)



(43)


Prepaid expenses

8



(9)



(1)


Accounts payable and accrued liabilities

(50)



(137)



(70)


Pension and postretirement contributions

(16)



(22)



(17)


Distributions received from joint ventures

9





5


Other

(4)



(8)



(19)


Net cash from operations

(151)



35



47








Cash flows from investing activities:






Capital expenditures:






Purchases of property and equipment

(191)



(52)



(57)


Timberlands reforestation costs

(16)



(23)



(16)


Acquisition of timberlands





(6)


Proceeds from sales of discontinued operations

2,201






Proceeds from sale of assets

10



8



70


Other

(36)



(1)



33


Cash from (used in) investing activities

1,968



(68)



24








Cash flows from financing activities:






Cash dividends on common shares

(232)



(233)



(241)


Proceeds from issuance of long-term debt





1,098


Payments of long-term debt

(1,700)





(720)


Repurchase of common stock





(798)


Other

12



45



(7)


Cash used in financing activities

(1,920)



(188)



(668)








Net change in cash and cash equivalents

(103)



(221)



(597)








Cash and cash equivalents from continuing operations at beginning of period

$

769



$

676



$

1,011


Cash and cash equivalents from discontinued operations at beginning of period

10





1


Cash and cash equivalents at beginning of period

$

779



$

676



$

1,012








Cash and cash equivalents from continuing operations at end of period

$

676



$

455



$

411


Cash and cash equivalents from discontinued operations at end of period





4


Cash and cash equivalents at end of period

$

676



$

455



$

415








Cash paid (received) during the year for:






Interest, net of amount capitalized

$

79



$

120



$

125


Income taxes

$

511



$

59



$

(13)








 


Weyerhaeuser Company

Total Company Statistics

Q1.2017 Analyst Package




Preliminary results (unaudited)












Selected Total Company Items


in millions

Q4


Q1


December 31,
2016


March 31,
2017


March 31,
2016

Pension and postretirement costs:






Pension and postretirement costs allocated to business segments

$

7



$

8



$

7


Pension and postretirement credits not allocated:






Unallocated pension service costs

1



2



2


Non-operating pension and other postretirement benefit costs (credits)

(11)



22



(14)


Accelerated pension costs included in Plum Creek merger-related costs (not allocated)





5


Total pension and postretirement costs (credits) for continuing operations

(3)



32




Pension and postretirement service costs directly attributable to discontinued operations

3





4


Total company pension and postretirement costs

$



$

32



$

4








Cash spent for capital expenditures for continuing operations

$

(185)



$

(75)



$

(51)


 


Weyerhaeuser Company

Timberlands Segment

Q1.2017 Analyst Package





Preliminary results (unaudited)














Segment Statement of Operations








in millions


Q4.2016


Q1.2017


Q1.2016

Sales to unaffiliated customers

$

463



$

486



$

387


Intersegment sales

209



202



222


Total net sales

672



688



609


Cost of products sold

527



519



459


Gross margin

145



169



150


Selling expenses

1



1



1


General and administrative expenses

24



24



28


Research and development expenses

5



3



4


Other operating income, net

(8)



(7)



(12)


Operating income and Net contribution to earnings

$

123



$

148



$

129









Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*








in millions


Q4.2016


Q1.2017


Q1.2016

Operating income

$

123



$

148



$

129


Depreciation, depletion and amortization

100



94



70


Adjusted EBITDA*

$

223



$

242



$

199



*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.








Selected Segment Items










Q4.2016


Q1.2017


Q1.2016

Total decrease (increase) in working capital (1)

$

20



$

(37)



$

(53)


Cash spent for capital expenditures

$

(39)



$

(30)



$

(20)



(1) Working capital does not include cash balances. Represents the change in combined working capital of Timberlands and Real Estate & ENR.


Segment Statistics(2)(3)









Q4.2016


Q1.2017


Q1.2016

Third Party
Net Sales(millions)

Delivered logs:






West

$

201



$

225



$

215


South

151



148



101


North

30



27



13


Other

13



20



7


Total delivered logs

395



420



336


Stumpage and pay-as-cut timber

23



12



15


Products from international operations

21



19



16


Recreational and other lease revenue

15



14



6


Other revenue

9



21



14


Total

$

463



$

486



$

387


Delivered Logs

Third Party Sales

Realizations

(per ton)

West

$

100.43



$

104.27



$

100.71


South

$

34.98



$

34.48



$

36.39


North

$

59.28



$

59.57



$

59.31


International

$

25.72



$

28.18



$

15.73


Delivered Logs

Third Party Sales

Volumes

(tons, thousands)

West

2,008



2,157



2,133


South

4,308



4,293



2,781


North

495



454



210


International

118



90



146


Other

342



510



169


Fee Harvest Volumes

(tons, thousands)

West

2,558



2,657



2,801


South

7,260



6,373



5,030


North

652



622



260


International

330



265



299


Other

329



371





(2) The Western region includes Washington and Oregon. The Southern region includes Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas and Oklahoma. The Northern region includes West Virginia, Maine, New Hampshire, Vermont, Michigan, Wisconsin and Montana. Other includes our Canadian operations and managed Twin Creeks operations.

(3) Western logs are primarily transacted in MBF but are converted to ton equivalents for external reporting purposes.

 


Weyerhaeuser Company

Real Estate, Energy and Natural Resources Segment

Q1.2017 Analyst Package


Preliminary results (unaudited)












Segment Statement of Operations








in millions


Q4.2016


Q1.2017


Q1.2016

Sales to unaffiliated customers

$

101



$

53



$

39


Intersegment sales

1






Total net sales

102



53



39


Cost of products sold

69



20



20


Gross margin

33



33



19


Selling expenses






General and administrative expenses

7



7



4


Charges for integration, restructuring, closures and asset impairments

14






Other operating costs (income), net






Operating income

12



26



15


Equity earnings (loss) from joint ventures(1)

1






Net contribution to earnings

$

13



$

26



$

15



(1) Equity earnings (loss) from joint ventures attributed to the Real Estate and ENR segment are generated from our investments in our real estate development ventures.








Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*








in millions


Q4.2016


Q1.2017


Q1.2016

Operating income

$

12



$

26



$

15


Depreciation, depletion and amortization

4



3



2


Basis of real estate sold

60



14



17


Special items

14






Adjusted EBITDA*

$

90



$

43



$

34



*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.








Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)










Q4.2016


Q1.2017


Q1.2016

Restructuring, impairments and other charges

$

(14)



$



$









Selected Segment Items










Q4.2016


Q1.2017


Q1.2016

Cash spent for capital expenditures

$



$



$









Segment Statistics









Q4.2016


Q1.2017


Q1.2016

Net Sales

(millions)

Real Estate

$

85



$

37



$

30


Energy and natural resources

16



16



9


Total

$

101



$

53



$

39


Acres sold

Real Estate

44,589



13,257



15,225


Price per acre

Real Estate

$

1,903



$

2,403



$

1,980


 


Weyerhaeuser Company

Wood Products Segment

Q1.2017 Analyst Package





Preliminary results (unaudited)














Segment Statement of Operations








in millions


Q4.2016


Q1.2017


Q1.2016

Sales to unaffiliated customers

$

1,032



$

1,154



$

979


Intersegment sales

7





22


Total net sales

1,039



1,154



1,001


Cost of products sold

889



926



862


Gross margin

150



228



139


Selling expenses

21



21



22


General and administrative expenses

28



32



27


Research and development expenses



1



1


Charges for integration and restructuring, closures and asset impairments

1



1



1


Other operating costs (income), net

1



1



1


Operating income and Net contribution to earnings

$

99



$

172



$

87









Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*








in millions


Q4.2016


Q1.2017


Q1.2016

Operating income

$

99



$

172



$

87


Depreciation, depletion and amortization

33



35



30


Adjusted EBITDA*

$

132



$

207



$

117



*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.








Selected Segment Items










Q4.2016


Q1.2017


Q1.2016

Total decrease (increase) in working capital (1)

$

32



$

(122)



$

(132)


Cash spent for capital expenditures

$

(145)



$

(44)



$

(29)



(1) Working capital does not include cash balances.


Segment Statistics








in millions, except for third-party sales realizations

Q4.2016


Q1.2017


Q1.2016

Structural Lumber

(board feet)

Third party net sales

$

427



$

478



$

419


Third party sales realizations

$

392



$

413



$

364


Third party sales volumes (2)

1,089



1,158



1,152


Production volumes

1,052



1,152



1,129


Engineered Solid

Section

(cubic feet)

Third party net sales

$

107



$

117



$

109


Third party sales realizations

$

1,930



$

1,881



$

1,971


Third party sales volumes (2)

5.6



6.2



5.5


Production volumes

5.6



6.3



5.6


Engineered

I-joists

(lineal feet)

Third party net sales

$

72



$

73



$

66


Third party sales realizations

$

1,485



$

1,481



$

1,507


Third party sales volumes (2)

48



49



44


Production volumes

43



50



46


Oriented Strand

Board

(square feet 3/8")

Third party net sales

$

163



$

203



$

163


Third party sales realizations

$

255



$

263



$

214


Third party sales volumes (2)

638



769



759


Production volumes

651



758



749


Softwood Plywood

(square feet 3/8")

Third party net sales

$

41



$

44



$

35


Third party sales realizations

$

364



$

377



$

317


Third party sales volumes (2)

113



118



110


Production volumes

92



97



88


Medium Density

Fiberboard 

(square feet 3/4")

Third party net sales

$

46



$

47



$

17


Third party sales realizations

$

779



$

795



$

763


Third party sales volumes (2)

58



59



23


Production volumes

54



56



25



(2) Volumes include sales of internally produced products and products purchased for resale primarily through our distribution business.

 


Weyerhaeuser Company

Unallocated Items

Q1.2017 Analyst Package






Preliminary results (unaudited)












Unallocated items are gains or charges not related to or allocated to an individual operating segment. They include a portion of items such as: share-based compensation, pension and postretirement costs, foreign exchange transaction gains and losses associated with financing and the elimination of intersegment profit in inventory, equity earnings from our timberland venture, and the LIFO reserve.







Contribution to Earnings







in millions

Q4.2016


Q1.2017


Q1.2016

Unallocated corporate function expenses

$

(25)



$

(19)



$

(17)


Unallocated share-based compensation

2



(6)



(2)


Unallocated pension service costs

(1)



(2)



(2)


Foreign exchange gains (losses)

(7)



(3)



13


Elimination of intersegment profit in inventory and LIFO

(12)



(6)



(6)


Gain on sale of non-strategic asset

5



3



36


Plum Creek merger- and integration-related costs

(14)



(12)



(110)


Other

(8)



(8)



(4)


Operating income (loss)

(60)



(53)



(92)


Equity earnings from joint venture (1)





5


Non-operating pension and other postretirement benefit (costs) credits (2)

11



(22)



14


Interest income and other

9



9



9


Net contribution to earnings

$

(40)



$

(66)



$

(64)



(1) First quarter 2016 includes equity earnings from our Timberland Venture, which effective August 31, 2016, is consolidated as a wholly-owned subsidiary.

(2) During Q1 2017 we have adopted ASU 2017-07. This ASU requires us to show components of pension and other post retirement benefit costs (interest, expected return on plan assets, amortization of actuarial gains or losses, amortization of prior service credits or costs) on the Consolidated Statement of Operations as a line item outside of "Operating income." We reclassified these components for all periods shown above.







Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*







in millions

Q4.2016


Q1.2017


Q1.2016

Operating income (loss)

$

(60)



$

(53)



$

(92)


Depreciation, depletion and amortization



1



2


Unallocated pension service costs

1



2



2


Special items

14



12



74


Adjusted EBITDA*

$

(45)



$

(38)



$

(14)








*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.







Unallocated Special Items Included in Net Contribution to Earnings (Pre-Tax)








Q4.2016


Q1.2017


Q1.2016

Plum Creek merger- and integration-related costs

(14)



(12)



(110)


Gain on sale of non-strategic asset





36


Total

$

(14)



$

(12)



$

(74)








Unallocated Selected Items








Q4.2016


Q1.2017


Q1.2016

Cash spent for capital expenditures

$

(1)



$

(1)



$

(2)


 

SOURCE Weyerhaeuser Company


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