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Weyerhaeuser reports second quarter results

Jul 28, 2017

SEATTLE, July 28, 2017 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported second quarter earnings from continuing operations of $24 million, or 3 cents per diluted share, on net sales of $1.8 billion. This compares with earnings from continuing operations of $130 million, or 16 cents per diluted share, on net sales of $1.7 billion for the same period last year. Adjusted EBITDA for the second quarter was $506 million compared to $413 million for the second quarter of last year. 

Weyerhaeuser Company logo. (PRNewsFoto/Weyerhaeuser Company)

Excluding after-tax special items of $188 million, which includes $147 million non-cash impairment for our Uruguay operations and $31 million for product remediation, the company reported net earnings of $212 million, or 28 cents per diluted share for the second quarter. This compares with net earnings from continuing operations before special items of $130 million for the same period last year and $167 million for first quarter of 2017.

"Each of our businesses delivered strong second quarter operating results, leveraging ongoing operational excellence initiatives to capitalize on improving markets," said Doyle R. Simons, president and CEO. "In the quarter, we also announced the pending sale of our Uruguay operations and completed the asset value optimization process for our Western timberlands. Looking forward, we are extremely well positioned to continue to capitalize on the improving housing market, and remain relentlessly focused on driving value for our shareholders through operational improvements and disciplined capital allocation."

WEYERHAEUSER FINANCIAL HIGHLIGHTS

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

WEYERHAEUSER FINANCIAL HIGHLIGHTS

2017


2017


2016


(millions, except per share data)

1Q


2Q


2Q


Net sales

$1,693


$1,808


$1,655


Earnings from continuing operations

$157


$24


$130


Net earnings attributable to Weyerhaeuser common shareholders

$157


$24


$157


Earnings per diluted share from continuing operations

$0.21


$0.03


$0.16


Net earnings per diluted share

$0.21


$0.03


$0.21









Weighted average shares outstanding, diluted

755


756


748


Net earnings from continuing operations attributable to Weyerhaeuser common shareholders before special items(1)

$167


$212


$130


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

$0.22


$0.28


$0.17









Adjusted EBITDA(2)

$454


$506


$413










(1) First quarter 2017 after-tax special items include charges of $10 million for Plum Creek merger-related costs. Second quarter 2017 after-tax special items include a $147 million non-cash impairment charge for the Uruguay business, $31 million for product remediation and $8 million for countervailing and antidumping duties on Canadian softwood lumber the company sold into the United States and $2 million for Plum Creek merger-related costs. Second quarter 2016 after-tax special items include $4 million of Plum Creek merger related costs and $7 million of legal expense.


(2) 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)

1Q 2017


2Q 2017


Change

Net sales

$688


$632


($56)

Contribution to pre-tax earnings

$148


($12)


($160)

Pre-tax charge for special items

$0


$147


$147

Contribution to pre-tax earnings before special items

$148


$135


($13)

Adjusted EBITDA

$242


$222


($20)

2Q 2017 Performance - In the West, modestly higher average sales realizations for domestic and export logs were more than offset by seasonally higher road spending and forestry costs. In the South, average log sales realizations and volumes were comparable to first quarter. Second quarter results include a $147 million noncash impairment charge related to the pending sale of our Uruguay operations.

3Q 2017 Outlook - Weyerhaeuser expects third quarter earnings before special items and Adjusted EBITDA will be slightly lower than second quarter. In the West, the company anticipates slightly higher log sales realizations, lower fee harvest volumes, and increased road spending compared to the second quarter. In the South, the company anticipates seasonally higher fee harvest volumes, comparable log sales realizations and increased forestry and silviculture expense.

REAL ESTATE, ENERGY & NATURAL RESOURCES

FINANCIAL HIGHLIGHTS (millions)

1Q 2017


2Q 2017


Change

Net sales

$53


$46


($7)

Contribution to pre-tax earnings

$26


$23


($3)

Adjusted EBITDA

$43


$37


($6)

2Q 2017 Performance - Earnings and Adjusted EBITDA decreased as a result of lower Real Estate sales compared to the first quarter. Energy & Natural Resources royalties increased from first quarter levels.

3Q 2017 Outlook - Weyerhaeuser expects earnings and Adjusted EBITDA will be significantly higher than the second quarter. The company anticipates Real Estate sales in the third quarter will be about double second quarter levels. We continue to expect Adjusted EBITDA for the Real Estate, Energy & Natural Resources segment will exceed $250 million for full year 2017.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS (millions)

1Q 2017


2Q 2017


Change

Net sales

$1,154


$1,293


$139

Contribution to pre-tax earnings

$172


$177


$5

Pre-tax charge for special items

$0


$61


$61

Contribution to pre-tax earnings before special items

$172


$238


$66

Adjusted EBITDA

$207


$274


$67

2Q 2017 Performance - Average sales realizations increased across all product lines in the second quarter. Sales volumes were higher for lumber and engineered wood products while oriented strand board sales volumes were comparable to the first quarter. Second quarter results include pre-tax special items of $61 million, which are comprised of a $50 million charge for product remediation and $11 million of softwood lumber countervailing and antidumping duties.

3Q 2017 Outlook - Weyerhaeuser anticipates third quarter earnings before special items and Adjusted EBITDA will be comparable to the second quarter. The company expects average sales realizations and sales volumes for lumber will be comparable to the second quarter. For oriented strand board, the company anticipates slightly higher average sales realizations and modestly lower 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 July 28, 2017, to discuss second quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on https://www.weyerhaeuser.com on July 28, 2017.

To join the conference call from within North America, dial 877-296-9413 (access code: 43729080) at least 15 minutes prior to the call. Those calling from outside North America should dial 706-679-2458 (access code: 43729080). Replays will be available for two weeks at 855-859-2056 (access code: 43729080) from within North America and at 404-537-3406 (access code: 43729080) 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 third quarter of 2017: earnings and Adjusted EBITDA for each of our business segments; log sale realizations and fee harvest volumes; sales volumes across Wood Products product lines, expected sales realizations and volumes for lumber and oriented strand board; and various logging, forestry and silviculture costs; and real estate sales volumes. 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;
  • 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 - 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) loss 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 June 30, 2017 :


DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate
& ENR


Wood
Products


Unallocated
Items


Total

Adjusted EBITDA by Segment:










Net earnings









$

24


Earnings from discontinued operations, net of income taxes










Interest expense, net of capitalized interest









100


Income taxes









34


Net contribution to earnings

$

(12)



$

23



$

177



$

(30)



$

158


Equity earnings from joint ventures










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







8



8


Interest income and other







(9)



(9)


Operating income (loss)

(12)



23



177



(31)



157


Depreciation, depletion and amortization

87



4



36



2



129


Basis of real estate sold



10







10


Unallocated pension service costs










Special items(1)

147





61



2



210


Adjusted EBITDA

$

222



$

37



$

274



$

(27)



$

506



(1) Pre-tax special items include: $147 million of impairment charges related to our Uruguayan operations; $50 million for product remediation; $11 million of countervailing and antidumping duties; and $2 million of Plum Creek merger-related costs.



The table below reconciles Adjusted EBITDA for the quarter ended June 30, 2016:


DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate
& ENR


Wood
Products


Unallocated
Items


Total

Adjusted EBITDA by Segment:










Net earnings









$

168


Earnings from discontinued operations, net of income taxes









(38)


Interest expense, net of capitalized interest









114


Income taxes









31


Net contribution to earnings

$

125



$

12



$

156



$

(18)



$

275


Equity earnings from joint ventures







(7)



(7)


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







(10)



(10)


Interest income and other







(10)



(10)


Operating income (loss)

125



12



156



(45)



248


Depreciation, depletion and amortization

95



3



33



2



133


Basis of real estate sold



13







13


Unallocated pension service costs










Special items(1)







19



19


Adjusted EBITDA

$

220



$

28



$

189



$

(24)



$

413



(1)  Pre-tax special items include: $8 million of Plum Creek merger-related costs and $11 million of legal expense.

 

Weyerhaeuser Company




Exhibit 99.2

Q2.2017 Analyst Package







Preliminary results (unaudited)
















Consolidated Statement of Operations(1)(2)











in millions

Q1


Q2


Year-to-date


March 31,
 2017


June 30,
 2017


June 30,
 2016


June 30,
 2017


June 30,
 2016

Net sales

$

1,693



$

1,808



$

1,655



$

3,501



$

3,060


Cost of products sold

1,272



1,336



1,271



2,608



2,374


Gross margin

421



472



384



893



686


Selling expenses

22



22



22



44



45


General and administrative expenses

87



76



94



163



173


Research and development expenses

4



4



4



8



9


Charges for integration and restructuring, closures and asset impairments

13



151



14



164



125


Other operating costs (income), net

2



62



2



64



(53)


Operating income from continuing operations

293



157



248



450



387


Equity earnings from joint ventures





7





12


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

(22)



(8)



10



(30)



24


Interest income and other

9



9



10



18



19


Interest expense, net of capitalized interest

(99)



(100)



(114)



(199)



(209)


Earnings from continuing operations before income taxes

181



58



161



239



233


Income taxes

(24)



(34)



(31)



(58)



(42)


Earnings from continuing operations

157



24



130



181



191


Earnings from discontinued operations, net of income taxes





38





58


Net earnings

157



24



168



181



249


Dividends on preference shares





(11)





(22)


Net earnings attributable to Weyerhaeuser common shareholders

$

157



$

24



$

157



$

181



$

227



(1) Discontinued operations as presented herein consist of the operations of our former Cellulose Fibers segment. The corresponding assets and liabilities were classified as discontinued operations on our balance sheet.


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





Per Share Information



Q1


Q2


Year-to-date


March 31,
 2017


June 30,
 2017


June 30,
 2016


June 30,
 2017


June 30,
 2016

Earnings per share attributable to Weyerhaeuser common shareholders, basic:

Continuing operations

$

0.21



$

0.03



$

0.16



$

0.24



$

0.25


Discontinued operations





0.05





0.08


Net earnings per share

$

0.21



$

0.03



$

0.21



$

0.24



$

0.33












Earnings per share attributable to Weyerhaeuser common shareholders, diluted:

Continuing operations

$

0.21



$

0.03



$

0.16



$

0.24



$

0.25


Discontinued operations





0.05





0.08


Net earnings per share

$

0.21



$

0.03



$

0.21



$

0.24



$

0.33












Dividends paid per common share

$

0.31



$

0.31



$

0.31



$

0.62



$

0.62












Weighted average shares outstanding (in thousands):










Basic

750,665



752,630



743,140



751,674



687,572


Diluted

754,747



756,451



747,701



755,625



691,060












Common shares outstanding at end of period (in thousands)

751,411



752,711



733,010



752,711



733,010







































Weyerhaeuser Company







Q2.2017 Analyst Package









Preliminary results (unaudited)



















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











in millions

Q1


Q2


Year-to-date


March 31,
 2017


June 30,
 2017


June 30,
 2016


June 30,
 2017


June 30,
 2016

Net earnings

$

157



$

24



$

168



$

181



$

249


Earnings from discontinued operations, net of income taxes





(38)





(58)


Equity earnings from joint ventures





(7)





(12)


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

22



8



(10)



30



(24)


Interest income and other

(9)



(9)



(10)



(18)



(19)


Interest expense, net of capitalized interest

99



100



114



199



209


Income taxes

24



34



31



58



42


Operating income from continuing operations

293



157



248



450



387


Depreciation, depletion and amortization

133



129



133



262



237


Basis of real estate sold

14



10



13



24



30


Unallocated pension service costs

2







2



2


Special items

12



210



19



222



93


Adjusted EBITDA*

$

454



$

506



$

413



$

960



$

749












*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

Q1


Q2


Year-to-date


March 31,
 2017


June 30,
 2017


June 30,
 2016


June 30,
 2017


June 30,
 2016

Net earnings attributable to Weyerhaeuser common shareholders

$

157



$

24



$

157



$

181



$

227


Plum Creek merger- and integration-related costs

10



2



4



12



102


Uruguay impairment



147





147




Gain on sale of non-strategic asset









(22)


Legal expense





7





7


Product remediation



31





31




Countervailing and antidumping duties



8





8




Net earnings attributable to Weyerhaeuser common shareholders before special items

167



212



168



379



314


Earnings from discontinued operations, net of income taxes





(38)





(58)


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

$

167



$

212



$

130



$

379



$

256












per share

Q1


Q2


Year-to-date


March 31,
 2017


June 30,
 2017


June 30,
 2016


June 30,
 2017


June 30,
 2016

Net earnings per diluted share attributable to Weyerhaeuser common shareholders

$

0.21



$

0.03



$

0.21



$

0.24



$

0.33


Plum Creek merger- and integration-related costs

0.01







0.02



0.14


Uruguay impairment



0.20





0.19




Gain on sale of non-strategic asset









(0.03)


Legal expense





0.01





0.01


Product remediation



0.04





0.04




Countervailing and antidumping duties



0.01





0.01




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

0.22



0.28



0.22



0.50



0.45


Earnings from discontinued operations, net of income taxes





(0.05)





(0.08)


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

$

0.22



$

0.28



$

0.17



$

0.50



$

0.37


 

Weyerhaeuser Company




Q2.2017 Analyst Package




Preliminary results (unaudited)






Consolidated Balance Sheet







in millions

March 31,
 2017


June 30,
 2017


December 31,
 2016


ASSETS






Current assets:






Cash and cash equivalents

$

455



$

701



$

676


Receivables, less allowances

472



442



390


Receivables for taxes

10



8



84


Inventories

386



349



358


Prepaid expenses and other current assets

142



177



114


Assets held for sale



411




Total current assets

1,465



2,088



1,622


Property and equipment, net

1,544



1,534



1,562


Construction in progress

230



190



213


Timber and timberlands at cost, less depletion charged to disposals

14,218



13,669



14,299


Minerals and mineral rights, net

317



314



319


Investments in and advances to joint ventures

56



33



56


Goodwill

40



40



40


Deferred tax assets

287



261



293


Other assets

229



246



224


Restricted financial investments held by variable interest entities

615



615



615


Total assets

$

19,001



$

18,990



$

19,243








LIABILITIES AND EQUITY






Current liabilities:






Current maturities of long-term debt

$

343



$

668



$

281


Accounts payable

227



252



233


Accrued liabilities

452



585



692


Liabilities held for sale



19




Total current liabilities

1,022



1,524



1,206


Long-term debt

6,263



5,936



6,329


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

511



511



511


Deferred pension and other postretirement benefits

1,287



1,230



1,322


Deposit received from contribution of timberlands to related party

422



419



426


Other liabilities

281



280



269


Total liabilities

9,786



9,900



10,063


Total equity

9,215



9,090



9,180


Total liabilities and equity

$

19,001



$

18,990



$

19,243


 

Weyerhaeuser Company





Q2.2017 Analyst Package









Preliminary results (unaudited)









Consolidated Statement of Cash Flows











in millions

Q1


Q2


Year-to-date


March 31,
 2017


June 30,
 2017


June 30,
 2016


June 30,
 2017


June 30,
 2016

Cash flows from operations:










Net earnings

$

157



$

24



$

168



$

181



$

249


Noncash charges (credits) to income:










Depreciation, depletion and amortization

133



129



147



262



289


Basis of real estate sold

14



10



13



24



30


Deferred income taxes, net

3



3



38



6



56


Gains on sales of discontinued operations










Gains on sales of non-strategic assets

(7)



(2)



(10)



(9)



(51)


Pension and other postretirement benefits

32



15



1



47



5


Other noncash charges (credits)

13



156



26



169



34


Change in:










Receivables less allowances

(70)



(8)



(43)



(78)



(90)


Receivable for taxes

(36)



(17)



25



(53)



35


Inventories

(28)



21



60



(7)



17


Prepaid expenses

(9)



(4)





(13)



(1)


Accounts payable and accrued liabilities

(137)



192



106



55



36


Pension and postretirement contributions

(22)



(15)



(12)



(37)



(29)


Distributions of earnings received from joint ventures









5


Other

(8)



(15)



(27)



(23)



(46)


Net cash from operations

35



489



492



524



539












Cash flows from investing activities:










Capital expenditures:










Purchases of property and equipment

(52)



(74)



(83)



(126)



(140)


Timberlands reforestation costs

(23)



(13)



(18)



(36)



(34)


Acquisition of timberlands





(2)





(8)


Proceeds from sales of discontinued operations










Proceeds from sale of assets

8



4



13



12



83


Proceeds from contribution of timberlands to related party





440





440


Distributions of investment received from joint ventures



23



3



23



27


Cash and cash equivalents acquired in the merger with Plum Creek









9


Other

(1)



22



(3)



21



(3)


Cash from (used in) investing activities

(68)



(38)



350



(106)



374












Cash flows from financing activities:










Cash dividends on common shares

(233)



(233)



(228)



(466)



(469)


Cash dividends on preference shares





(11)





(11)


Proceeds from issuance of long-term debt





300





1,398


Payments of long-term debt





(3)





(723)


Repurchase of common stock





(831)





(1,629)


Other

45



28



8



73



1


Cash used in financing activities

(188)



(205)



(765)



(393)



(1,433)












Net change in cash and cash equivalents

(221)



246



77



25



(520)












Cash and cash equivalents from continuing operations at beginning of period

$

676



$

455



$

411



$

676



1,011


Cash and cash equivalents from discontinued operations at beginning of period





4





1


Cash and cash equivalents at beginning of period

$

676



$

455



$

415



$

676



1,012












Cash and cash equivalents from continuing operations at end of period

$

455



$

701



$

485



$

701



485


Cash and cash equivalents from discontinued operations at end of period





7





7


Cash and cash equivalents at end of period

$

455



$

701



$

492



$

701



$

492












Cash paid (received) during the year for:










Interest, net of amount capitalized

$

120



$

72



$

92



$

192



$

225


Income taxes

$

59



$

47



$

(12)



$

106



$

(25)


 

Weyerhaeuser Company



Total Company Statistics

Q2.2017 Analyst Package





Preliminary results (unaudited)



















Selected Total Company Items


in millions

Q1


Q2


Year-to-date


March 31,
 2017


June 30,
 2017


June 30,
 2016


June 30,
 2017


June 30,
 2016

Pension and postretirement costs:










Pension and postretirement costs allocated to business segments

$

8



$

7



$

8



$

15



$

15


Pension and postretirement credits not allocated:










Unallocated pension service costs

2







2



2


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

22



8



(10)



30



(24)


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









5


Total pension and postretirement costs (credits) for continuing operations

32



15



(2)



47



(2)


Pension and postretirement service costs directly attributable to discontinued operations





3





7


Total company pension and postretirement costs

$

32



$

15



$

1



$

47



$

5












Cash spent for capital expenditures for continuing operations

$

(75)



$

(87)



$

(89)



$

(162)



$

(140)


 

Weyerhaeuser Company





Timberlands Segment

Q2.2017 Analyst Package






Preliminary results (unaudited)










Segment Statement of Operations












in millions


Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Sales to unaffiliated customers

$

486



$

469



$

471



$

955



$

858


Intersegment sales

202



163



193



365



415


Total net sales

688



632



664



1,320



1,273


Cost of products sold

519



476



509



995



968


Gross margin

169



156



155



325



305


Selling expenses

1



1



2



2



3


General and administrative expenses

24



23



32



47



60


Research and development expenses

3



4



4



7



8


Charges for integration and restructuring, closures and assets impairments

 



147





147




Other operating income, net

(7)



(7)



(8)



(14)



(20)


Operating income and Net contribution to earnings

$

148



$

(12)



$

125



$

136



$

254













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












in millions


Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Operating income

$

148



$

(12)



$

125



$

136



$

254


Depreciation, depletion and amortization

94



87



95



181



165


Special items



147





147




Adjusted EBITDA*

$

242



$

222



$

220



$

464



$

419







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
















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














Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Uruguay impairment



(147)





(147)




Selected Segment Items














Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Total decrease (increase) in working capital (1)

$

(37)



$

(5)



$

28



$

(42)



$

(25)


Cash spent for capital expenditures

$

(30)



$

(25)



$

(31)



$

(55)



$

(51)



(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)













Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Third Party
Net Sales(millions)

Delivered logs:










West

$

225



$

227



$

232



$

452



$

447


South

148



148



154



296



255


North

27



16



19



43



32


Other

20



11



7



31



14


Total delivered logs

420



402



412



822



748


Stumpage and pay-as-cut timber

12



17



23



29



38


Products from international operations

19



21



21



40



37


Recreational and other lease revenue

14



15



8



29



14


Other revenue

21



14



7



35



21


Total

$

486



$

469



$

471



$

955



$

858


Delivered Logs

Third Party Sales

Realizations

(per ton)

West

$

104.27



$

105.84



$

98.21



$

105.06



$

99.39


South

$

34.48



$

34.48



$

35.54



$

34.48



$

35.87


North

$

59.57



$

63.49



$

65.43



$

60.97



$

62.95


International

$

28.18



$

29.73



$

23.29



$

28.98



$

18.59


Delivered Logs

Third Party Sales

Volumes

(tons, thousands)

West

2,157



2,143



2,363



4,300



4,496


South

4,293



4,285



4,340



8,578



7,121


North

454



253



292



707



502


International

90



96



89



186



235


Other

510



292



169



802



338


Fee Harvest Volumes

(tons, thousands)

West

2,657



2,652



2,980



5,309



5,781


South

6,373



6,473



7,061



12,846



12,091


North

622



383



454



1,005



714


International

265



319



248



584



547


Other

371



444



181



815



181



(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

Q2.2017 Analyst Package




Preliminary results (unaudited)


















Segment Statement of Operations












in millions


Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Sales to unaffiliated customers

$

53



$

46



$

38



$

99



$

77


Intersegment sales










Total net sales

53



46



38



99



77


Cost of products sold

20



16



19



36



39


Gross margin

33



30



19



63



38


Selling expenses










General and administrative expenses

7



7



8



14



12


Charges for integration, restructuring, closures and asset impairments





1





1


Other operating costs (income), net





(2)





(2)


Operating income

26



23



12



49



27


Equity earnings (loss) from joint ventures(1)










Net contribution to earnings

$

26



$

23



$

12



$

49



$

27













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












in millions


Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Operating income

$

26



$

23



$

12



$

49



$

27


Depreciation, depletion and amortization

3



4



3



7



5


Basis of real estate sold

14



10



13



24



30


Adjusted EBITDA*

$

43



$

37



$

28



$

80



$

62


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
















Selected Segment Items














Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Cash spent for capital expenditures

$



$

(1)



$

(1)



$

(1)



$

(1)













Segment Statistics













Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Net Sales
(millions)

Real Estate

$

37



$

27



$

26



$

64



$

56


Energy and natural resources

16



19



12



35



21


Total

$

53



$

46



$

38



$

99



$

77


Acres sold

Real Estate

13,257



10,003



10,020



23,260



25,245


Price per acre

Real Estate

$

2,403



$

2,714



$

2,555



$

2,537



$

2,210


 

Weyerhaeuser Company

Wood Products Segment

Q2.2017 Analyst Package






Preliminary results (unaudited)





















Segment Statement of Operations

in millions


Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Sales to unaffiliated customers

$

1,154



$

1,293



$

1,146



$

2,447



$

2,125


Intersegment sales





22





44


Total net sales

1,154



1,293



1,168



2,447



2,169


Cost of products sold

926



1,002



957



1,928



1,819


Gross margin

228



291



211



519



350


Selling expenses

21



19



20



40



42


General and administrative expenses

32



32



30



64



57


Research and development expenses

1







1



1


Charges for integration and restructuring, closures and asset impairments

1



2



4



3



5


Other operating costs (income), net

1



61



1



62



2


Operating income and Net contribution to earnings

$

172



$

177



$

156



$

349



$

243













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












in millions


Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Operating income

$

172



$

177



$

156



$

349



$

243


Depreciation, depletion and amortization

35



36



33



71



63


Special items



61





61




Adjusted EBITDA*

$

207



$

274



$

189



$

481



$

306







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






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














Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Countervailing and antidumping duties

$



$

(11)



$



$

(11)



$


Product remediation



(50)





(50)




Total

$



$

(61)



$



$

(61)



$













Selected Segment Items














Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Total decrease (increase) in working capital (1)

$

(122)



$

113



$

35



$

(9)



$

(97)


Cash spent for capital expenditures

$

(44)



$

(61)



$

(52)



$

(105)



$

(81)







(1) Working capital does not include cash balances.






Segment Statistics












in millions, except for third-party sales realizations

Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Structural Lumber
(board feet)

Third party net sales

$

478



$

538



$

498



$

1,016



$

917


Third party sales realizations

$

413



$

441



$

399



$

427



$

382


Third party sales volumes (2)

1,158



1,218



1,249



2,376



2,401


Production volumes

1,152



1,146



1,205



2,298



2,334


Engineered Solid
Section
(cubic feet)

Third party net sales

$

117



$

130



$

115



$

247



$

224


Third party sales realizations

$

1,881



$

1,979



$

1,922



$

1,931



$

1,946


Third party sales volumes (2)

6.2



6.6



6.0



12.8



11.5


Production volumes

6.3



6.6



5.9



12.9



11.5


Engineered
I-joists
(lineal feet)

Third party net sales

$

73



$

85



$

73



$

158



$

139


Third party sales realizations

$

1,481



$

1,522



$

1,471



$

1,503



$

1,488


Third party sales volumes (2)

49



57



50



106



94


Production volumes

50



53



46



103



92


Oriented Strand
Board
(square feet 3/8")

Third party net sales

$

203



$

225



$

182



$

428



$

345


Third party sales realizations

$

263



$

295



$

240



$

279



$

227


Third party sales volumes (2)

769



764



761



1,533



1,520


Production volumes

758



754



733



1,512



1,482


Softwood Plywood

(square feet 3/8")

Third party net sales

$

44



$

47



$

50



$

91



$

85


Third party sales realizations

$

377



$

380



$

382



$

379



$

352


Third party sales volumes (2)

118



123



131



241



241


Production volumes

97



99



111



196



199


Medium Density
Fiberboard 
(square feet 3/4")

Third party net sales

$

47



$

51



$

47



$

98



$

64


Third party sales realizations

$

795



$

845



$

772



$

820



$

769


Third party sales volumes (2)

59



60



60



119



83


Production volumes

56



63



62



119



87



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

 

Weyerhaeuser Company

Unallocated Items

Q2.2017 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

Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Unallocated corporate function expenses

$

(19)



$

(17)



$

(24)



$

(36)



$

(41)


Unallocated share-based compensation

(6)





1



(6)



(1)


Unallocated pension service costs

(2)







(2)



(2)


Foreign exchange gains (losses)

(3)





1



(3)



14


Elimination of intersegment profit in inventory and LIFO

(6)



(3)



(2)



(9)



(8)


Gain on sale of non-strategic asset

3



1



8



4



44


Charges for integration and restructuring, closures and asset impairments:









   Plum Creek merger- and integration-related costs

(12)



(2)



(8)



(14)



(118)


  Other restructuring, closures and asset impairments





(1)





(1)


Other

(8)



(10)



(20)



(18)



(24)


Operating income (loss)

(53)



(31)



(45)



(84)



(137)


Equity earnings from joint venture (1)





7





12


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

(22)



(8)



10



(30)



24


Interest income and other

9



9



10



18



19


Net contribution to earnings

$

(66)



$

(30)



$

(18)



$

(96)



$

(82)



(1) 2016 results include equity earnings from our Timberland Venture, which was consolidated as a wholly-owned subsidiary effective August 31, 2016.


(2) During Q1 2017 we 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

Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Operating income (loss)

$

(53)



$

(31)



$

(45)



$

(84)



$

(137)


Depreciation, depletion and amortization

1



2



2



3



4


Unallocated pension service costs

2







2



2


Special items

12



2



19



14



93


Adjusted EBITDA*

$

(38)



$

(27)



$

(24)



$

(65)



$

(38)











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















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












Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Plum Creek merger- and integration-related costs

(12)



(2)



(8)



(14)



(118)


Gain on sale of non-strategic asset









36


Legal expense





(11)





(11)


Total

$

(12)



$

(2)



$

(19)



$

(14)



$

(93)












Unallocated Selected Items












Q1.2017


Q2.2017


Q2.2016


YTD.2017


YTD.2016

Cash spent for capital expenditures

$

(1)



$



$

(5)



$

(1)



$

(7)


 

SOURCE Weyerhaeuser Company


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