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Weyerhaeuser reports third quarter results

- Operating income increased over 30% compared with second quarter

- Adjusted EBITDA increased 12% on strong results in all businesses

- Completed sale of Uruguay operations for $402.5 million

Oct 27, 2017

SEATTLE, Oct. 27, 2017 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported third quarter net earnings of $130 million, or 17 cents per diluted share, on net sales of $1.9 billion. This compares with earnings from continuing operations of $162 million, or 21 cents per diluted share, on net sales of $1.7 billion for the same period last year. Adjusted EBITDA for the third quarter was $569 million compared with $434 million for the third quarter of last year. 

Weyerhaeuser Company logo. (PRNewsFoto/Weyerhaeuser Company)

Excluding after-tax special charges of $129 million, primarily comprised of previously announced charges for product remediation, the company reported net earnings of $259 million, or 34 cents per diluted share for the third quarter. This compares with net earnings from continuing operations before special items of $172 million for the same period last year and $212 million for the second quarter of 2017.

"I am very pleased with our third quarter performance, as each of our businesses delivered strong operating results despite various weather-related challenges in the quarter," said Doyle R. Simons, president and chief executive officer. "We also continued to simplify our business and strategically optimize our timberland portfolio by completing the sale of our Uruguay operations, and we redeemed our interest in the Twin Creeks joint venture in October. Looking forward, we remain focused on driving value for shareholders by delivering continued operational improvements and capturing the full benefit of improving market conditions."

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)

2Q


3Q


3Q


Net sales

$1,808


$1,872


$1,709


Earnings from continuing operations

$24


$130


$162


Net earnings

$24


$130


$227


Earnings per diluted share from continuing operations

$0.03


$0.17


$0.21


Net earnings per diluted share

$0.03


$0.17


$0.30









Weighted average shares outstanding, diluted

756


757


754


Net earnings from continuing operations before special items(1)

$212


$259


$172


Net earnings from continuing operations per diluted share before special items

$0.28


$0.34


$0.23









Adjusted EBITDA(2)

$506


$569


$434









(1) Third quarter 2017 includes after-tax special charges of $118 million for product remediation, $4 million for a non-cash impairment, $4 million for countervailing and antidumping duties on Canadian softwood lumber the company sold into the United States and $3 million for Plum Creek merger-related costs. Second quarter 2017 includes after-tax special charges of $147 million for a non-cash impairment of the Uruguay operations, $31 million for product remediation, $8 million for countervailing and antidumping duties and $2 million for Plum Creek merger-related costs. Third quarter 2016 includes after-tax special charges of $10 million for Plum Creek merger-related costs.

(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)

2Q 2017


3Q 2017


Change

Net sales

$632


$670


$38

Contribution to pre-tax earnings

($12)


$131


$143

Pre-tax charge for special items

$147


$0


($147)

Contribution to pre-tax earnings before special items

$135


$131


($4)

Adjusted EBITDA

$222


$220


($2)

3Q 2017 Performance - In the West, higher average sales realizations for domestic and export logs were more than offset by lower fee harvest volumes due to fire season related logging restrictions. In the South, log sales volumes increased, and average sales realizations were comparable to the second quarter, as slightly higher sawlog pricing was offset by a higher proportion of pulpwood sales. Forestry costs increased slightly.

4Q 2017 Outlook - Weyerhaeuser expects higher earnings and Adjusted EBITDA in the fourth quarter compared with the third quarter. In the West, the Company anticipates increased fee harvest volumes and slightly higher average log sales realizations, partially offset by higher road spending.  In the South, the company anticipates slightly higher fee harvest volumes, more than offset by higher forestry expense due to weather-related deferral of third quarter activities. Average log sales realizations should be comparable to the third quarter.

REAL ESTATE, ENERGY & NATURAL RESOURCES

FINANCIAL HIGHLIGHTS (millions)

2Q 2017


3Q 2017


Change

Net sales

$46


$82


$36

Contribution to pre-tax earnings

$23


$47


$24

Adjusted EBITDA

$37


$74


$37

3Q 2017 Performance - Earnings and Adjusted EBITDA increased compared with the second quarter due to seasonally higher Real Estate sales. Energy & Natural Resources royalties decreased slightly.

4Q 2017 Outlook - Weyerhaeuser expects significantly higher earnings and Adjusted EBITDA in the fourth quarter compared with third quarter. The company anticipates full year Adjusted EBITDA for the Real Estate, Energy & Natural Resources segment will be approximately $250 million.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS (millions)

2Q 2017


3Q 2017


Change

Net sales

$1,293


$1,299


$6

Contribution to pre-tax earnings

$177


$40


($137)

Pre-tax charge for special items

$61


$201


$140

Contribution to pre-tax earnings before special items

$238


$241


$3

Adjusted EBITDA

$274


$278


$4

3Q 2017 Performance - Average sales realizations improved compared with the second quarter, with oriented strand board realizations increasing 11 percent. Sales volumes for most products decreased slightly, operating rates declined, and per unit manufacturing costs increased due to downtime from fire season related operating constraints and planned maintenance.

Third quarter results include pre-tax special charges of $201 million, which are comprised of $190 million for product remediation, $6 million for a non-cash impairment and $5 million for softwood lumber countervailing and antidumping duties.

4Q 2017 Outlook - Weyerhaeuser anticipates fourth quarter earnings and Adjusted EBITDA will be comparable to the third quarter. The company expects modestly higher average sales realizations for lumber and oriented strand board will be partially offset by slightly higher Western log costs.  In engineered wood products, the company anticipates seasonally lower sales volumes, higher input costs, and increased per unit manufacturing costs due to planned seasonal and maintenance downtime.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control nearly 13 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. 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 October 27, 2017, to discuss third quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on October 27, 2017.

To join the conference call from within North America, dial 877-296-9413 (access code: 43730130) at least 15 minutes prior to the call. Those calling from outside North America should dial 706-679-2458 (access code: 43730130). Replays will be available for two weeks at 855-859-2056 (access code: 43730130) from within North America and at 404-537-3406 (access code: 43730130) 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 without limitation with respect to the following for the fourth quarter of 2017: earnings and Adjusted EBITDA for each of our business segments; log sale realizations and fee harvest volumes and related forestry expense; sales volumes across Wood Products product lines, expected sales realizations and volumes for lumber and oriented strand board and various manufacturing 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;
  • the accuracy of our estimates of costs and expenses related to contingent liabilities;
  • 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 (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 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) loss 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)(2)(3)

147





61



2



210


Adjusted EBITDA

$

222



$

37



$

274



$

(27)



$

506




(1)

Pre-tax special items attributable to Timberlands include $147 million of impairment charges related to our Uruguayan operations.

(2)

Pre-tax special items attributable to Wood Products include: $50 million for product remediation and $11 million of countervailing and antidumping duties.

(3)

Pre-tax special items attributable to Unallocated Items include $2 million of Plum Creek merger-related costs.

 

The table below reconciles Adjusted EBITDA for the quarter ended September 30, 2017 :


DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate
& ENR


Wood
Products


Unallocated
Items


Total

Adjusted EBITDA by Segment:










Net earnings









$

130


Earnings from discontinued operations, net of income taxes










Interest expense, net of capitalized interest









98


Income taxes









(27)


Net contribution to earnings

$

131



$

47



$

40



$

(17)



$

201


Equity earnings from joint ventures



(1)







(1)


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







16



16


Interest income and other







(11)



(11)


Operating income (loss)

131



46



40



(12)



205


Depreciation, depletion and amortization

89



4



37



2



132


Basis of real estate sold



24







24


Unallocated pension service costs







1



1


Special items(1)(2)





201



6



207


Adjusted EBITDA

$

220



$

74



$

278



$

(3)



$

569




(1)

Pre-tax special items attributable to Wood Products include: $190 million of product remediation, a $6 million impairment on a non-strategic asset and $5 million of countervailing and anti-dumping duties.

(2)

Pre-tax special items attributable to Unallocated Items include $6 million of Plum Creek merger-related costs.

 

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


DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate
& ENR


Wood
Products


Unallocated
Items


Total

Adjusted EBITDA by Segment:










Net earnings









$

227


Earnings from discontinued operations, net of income taxes









(65)


Interest expense, net of capitalized interest









114


Income taxes









22


Net contribution to earnings

$

122



$

15



$

170



$

(9)



$

298


Equity earnings from joint ventures



(1)





(8)



(9)


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







(13)



(13)


Interest income and other







(15)



(15)


Operating income (loss)

122



14



170



(45)



261


Depreciation, depletion and amortization

101



4



33





138


Basis of real estate sold



19







19


Unallocated pension service costs







2



2


Special items(1)







14



14


Adjusted EBITDA

$

223



$

37



$

203



$

(29)



$

434




(1)

Pre-tax special items include $14 million of Plum Creek merger-related costs.

 

Weyerhaeuser Company




Exhibit 99.2

Q3.2017 Analyst Package







Preliminary results (unaudited)
















Consolidated Statement of Operations(1)(2)











in millions

Q2


Q3


Year-to-date


June 30,
 2017


September 30,
 2017


September 30,
 2016


September 30,
 2017


September 30,
 2016

Net sales

$

1,808



$

1,872



$

1,709



$

5,373



$

4,769


Cost of products sold

1,336



1,374



1,328



3,982



3,702


Gross margin

472



498



381



1,391



1,067


Selling expenses

22



22



22



66



67


General and administrative expenses

76



75



80



238



253


Research and development expenses

4



4



5



12



14


Charges for integration and restructuring, closures and asset impairments

151



14



16



178



141


Charges for product remediation

50



190





240




Other operating costs (income), net

12



(12)



(3)



2



(56)


Operating income from continuing operations

157



205



261



655



648


Equity earnings from joint ventures



1



9



1



21


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

(8)



(16)



13



(46)



37


Interest income and other

9



11



15



29



34


Interest expense, net of capitalized interest

(100)



(98)



(114)



(297)



(323)


Earnings from continuing operations before income taxes

58



103



184



342



417


Income taxes

(34)



27



(22)



(31)



(64)


Earnings from continuing operations

24



130



162



311



353


Earnings from discontinued operations, net of income taxes





65





123


Net earnings

24



130



227



311



476


Dividends on preference shares









(22)


Net earnings attributable to Weyerhaeuser common shareholders

$

24



$

130



$

227



$

311



$

454



(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



Q2


Q3


Year-to-date


June 30,
 2017


September 30,
 2017


September 30,
 2016


September 30,
 2017


September 30,
 2016

Earnings per share attributable to Weyerhaeuser common shareholders, basic:

Continuing operations

$

0.03



$

0.17



$

0.22



$

0.41



$

0.47


Discontinued operations





0.08





0.17


Net earnings per share

$

0.03



$

0.17



$

0.30



$

0.41



$

0.64












Earnings per share attributable to Weyerhaeuser common shareholders, diluted:

Continuing operations

$

0.03



$

0.17



$

0.21



$

0.41



$

0.46


Discontinued operations





0.09





0.18


Net earnings per share

$

0.03



$

0.17



$

0.30



$

0.41



$

0.64












Dividends paid per common share

$

0.31



$

0.31



$

0.31



$

0.93



$

0.93












Weighted average shares outstanding (in thousands):










Basic

752,630



753,535



749,587



752,301



708,395


Diluted

756,451



756,903



754,044



756,058



712,205












Common shares outstanding at end of period (in thousands)

752,711



753,051



747,933



753,051



747,933






















Weyerhaeuser Company







Q3.2017 Analyst Package









Preliminary results (unaudited)



















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











in millions

Q2


Q3


Year-to-date


June 30,
 2017


September 30,
 2017


September 30,
 2016


September 30,
 2017


September 30,
 2016

Net earnings

$

24



$

130



$

227



$

311



$

476


Earnings from discontinued operations, net of income taxes





(65)





(123)


Equity earnings from joint ventures



(1)



(9)



(1)



(21)


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

8



16



(13)



46



(37)


Interest income and other

(9)



(11)



(15)



(29)



(34)


Interest expense, net of capitalized interest

100



98



114



297



323


Income taxes

34



(27)



22



31



64


Operating income from continuing operations

157



205



261



655



648


Depreciation, depletion and amortization

129



132



138



394



375


Basis of real estate sold

10



24



19



48



49


Unallocated pension service costs



1



2



3



4


Special items

210



207



14



429



107


Adjusted EBITDA*

$

506



$

569



$

434



$

1,529



$

1,183












*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

Q2


Q3


Year-to-date


June 30,
 2017


September 30,
 2017


September 30,
 2016


September 30,
 2017


September 30,
 2016

Net earnings attributable to Weyerhaeuser common shareholders

$

24



$

130



$

227



$

311



$

454


Plum Creek merger- and integration-related costs

2



3



10



15



112


Uruguay impairment

147







147




Gain on sale of non-strategic asset









(22)


Legal expense









7


Countervailing and antidumping duties

8



4





12




Impairment of non-strategic asset



4





4




Product remediation

31



118





149




Net earnings attributable to Weyerhaeuser common shareholders before special items

212



259



237



638



551


Earnings from discontinued operations, net of income taxes





(65)





(123)


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

$

212



$

259



$

172



$

638



$

428












per share

Q2


Q3


Year-to-date


June 30,
 2017


September 30,
 2017


September 30,
 2016


September 30,
 2017


September 30,
 2016

Net earnings per diluted share attributable to Weyerhaeuser common shareholders

$

0.03



$

0.17



$

0.30



$

0.41



$

0.64


Plum Creek merger- and integration-related costs





0.02



0.02



0.16


Uruguay impairment

0.20







0.19




Gain on sale of non-strategic asset









(0.03)


Legal expense









0.01


Countervailing and antidumping duties

0.01



0.01





0.01




Impairment of non-strategic asset



0.01





0.01




Product remediation

0.04



0.15





0.20




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

0.28



0.34



0.32



0.84



0.78


Earnings from discontinued operations, net of income taxes





(0.09)





(0.18)


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

$

0.28



$

0.34



$

0.23



$

0.84



$

0.60



 

Weyerhaeuser Company



Q3.2017 Analyst Package


Preliminary results (unaudited)





Consolidated Balance Sheet







in millions

June 30,
 2017


September 30,
 2017


December 31,
 2016


ASSETS






Current assets:






Cash and cash equivalents

$

701



$

497



$

676


Receivables, less allowances

442



485



390


Receivables for taxes

8



65



84


Inventories

349



340



358


Prepaid expenses and other current assets

177



130



114


Assets held for sale

411






Total current assets

2,088



1,517



1,622


Property and equipment, net

1,534



1,534



1,562


Construction in progress

190



225



213


Timber and timberlands at cost, less depletion charged to disposals

13,669



13,627



14,299


Minerals and mineral rights, net

314



312



319


Investments in and advances to joint ventures

33



33



56


Goodwill

40



40



40


Deferred tax assets

261



240



293


Other assets

246



259



224


Restricted financial investments held by variable interest entities

615



615



615


Total assets

$

18,990



$

18,402



$

19,243








LIABILITIES AND EQUITY






Current liabilities:






Current maturities of long-term debt

$

668



$

62



$

281


Accounts payable

252



259



233


Accrued liabilities

585



702



692


Liabilities held for sale

19






Total current liabilities

1,524



1,023



1,206


Long-term debt

5,936



5,933



6,329


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

511



511



511


Deferred pension and other postretirement benefits

1,230



1,201



1,322


Deposit received from contribution of timberlands to related party

419



416



426


Other liabilities

280



273



269


Total liabilities

9,900



9,357



10,063


Total equity

9,090



9,045



9,180


Total liabilities and equity

$

18,990



$

18,402



$

19,243



 

Weyerhaeuser Company





Q3.2017 Analyst Package






Preliminary results (unaudited)









Consolidated Statement of Cash Flows











in millions

Q2


Q3


Year-to-date


June 30,
 2017


September 30,
 2017


September 30,
 2016


September 30,
 2017


September 30,
 2016

Cash flows from operations:










Net earnings

$

24



$

130



$

227



$

311



$

476


Noncash charges (credits) to income:










Depreciation, depletion and amortization

129



131



139



393



428


Basis of real estate sold

10



24



19



48



49


Deferred income taxes, net

3



3



40



9



96


Net gains on disposition of assets and operations

(2)



(6)



(70)



(15)



(121)


Pension and other postretirement benefits

15



25





72



5


Other noncash charges (credits)

156



12



13



181



47


Change in:










Receivables less allowances

(8)



(35)



(6)



(113)



(96)


Receivable for taxes

(17)



(63)



2



(116)



37


Inventories

21



11



32



4



49


Prepaid expenses

(4)



4



(2)



(9)



(3)


Accounts payable and accrued liabilities

192



129



25



184



61


Pension and postretirement contributions

(15)



(22)



(54)



(59)



(83)


Distributions of earnings received from joint ventures



1





1



5


Other

(15)



(21)



(18)



(44)



(64)


Net cash from operations

489



323



347



847



886












Cash flows from investing activities:










Capital expenditures:










Purchases of property and equipment

(74)



(87)



(120)



(213)



(260)


Timberlands reforestation costs

(13)



(10)



(9)



(46)



(43)


Acquisition of timberlands





(2)





(10)


Proceeds from sale of assets and operations

4



411



296



423



379


Proceeds from contribution of timberlands to related party









440


Distributions of investment received from joint ventures

23





7



23



34


Cash and cash equivalents acquired in the merger with Plum Creek









9


Other

22



(16)



45



5



42


Cash from (used in) investing activities

(38)



298



217



192



591












Cash flows from financing activities:










Cash dividends on common shares

(233)



(233)



(231)



(699)



(700)


Cash dividends on preference shares





(11)





(22)


Proceeds from issuance of long-term debt



225



300



225



1,698


Payments of long-term debt



(831)





(831)



(723)


Proceeds from borrowing on line of credit



100





100




Payments on line of credit



(100)





(100)




Repurchase of common stock





(374)





(2,003)


Other

28



14



39



87



40


Cash used in financing activities

(205)



(825)



(277)



(1,218)



(1,710)












Net change in cash and cash equivalents

246



(204)



287



(179)



(233)












Cash and cash equivalents from continuing operations at beginning of period

$

455



$

701



$

485



$

676



1,011


Cash and cash equivalents from discontinued operations at beginning of period





7





1


Cash and cash equivalents at beginning of period

$

455



$

701



$

492



$

676



1,012












Cash and cash equivalents from continuing operations at end of period

$

701



$

497



$

769



$

497



$

769


Cash and cash equivalents from discontinued operations at end of period





10





10


Cash and cash equivalents at end of period

$

701



$

497



$

779



$

497



$

779












Cash paid (received) during the period for:










Interest, net of amount capitalized

$

72



$

123



$

142



$

315



$

367


Income taxes

$

47



$

23



$

(1)



$

129



$

(26)


 

Weyerhaeuser Company

Total Company Statistics

Q3.2017 Analyst Package





Preliminary results (unaudited)
















Selected Total Company Items


in millions

Q2


Q3


Year-to-date


June 30,
 2017


September 30,
 2017


September 30,
 2016


September 30,
 2017


September 30,
 2016

Pension and postretirement costs:










Pension and postretirement costs allocated to business segments

$

7



$

8



$

8



$

23



$

23


Pension and postretirement credits not allocated:










Unallocated pension service costs



1



2



3



4


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

8



16



(13)



46



(37)


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









5


Total pension and postretirement costs (credits) for continuing operations

15



25



(3)



72



(5)


Pension and postretirement service costs directly attributable to discontinued operations





3





10


Total company pension and postretirement costs

$

15



$

25



$



$

72



$

5












Cash spent for capital expenditures for continuing operations

$

(87)



$

(97)



$

(100)



$

(259)



$

(240)


 

Weyerhaeuser Company





Timberlands Segment


Q3.2017 Analyst Package







Preliminary results (unaudited)








Segment Statement of Operations














in millions


Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016


Sales to unaffiliated customers

$

469



$

491



$

484



$

1,446



$

1,342



Intersegment sales

163



179



216



544



631



Total net sales

632



670



700



1,990



1,973



Cost of products sold

476



517



559



1,512



1,527



Gross margin

156



153



141



478



446



Selling expenses

1



1



1



3



4



General and administrative expenses

23



24



20



71



80



Research and development expenses

4



3



4



10



12



Charges for integration and restructuring, closures and assets impairments

 

147







147





Other operating income, net

(7)



(6)



(6)



(20)



(26)



Operating income and Net contribution to earnings

$

(12)



$

131



$

122



$

267



$

376















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














in millions


Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016


Operating income

$

(12)



$

131



$

122



$

267



$

376



Depreciation, depletion and amortization

87



89



101



270



266



Special items

147







147





Adjusted EBITDA*

$

222



$

220



$

223



$

684



$

642



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


















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
















Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016


Uruguay impairment

$

(147)



$



$



$

(147)



$



Selected Segment Items
















Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016


Total decrease (increase) in working capital (1)

$

(5)



$

(3)



$

(15)



$

(45)



$

(40)



Cash spent for capital expenditures

$

(25)



$

(24)



$

(26)



$

(79)



$

(77)



(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)















Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016


Third Party
Net Sales
(millions)

Delivered logs:











West

$

227



$

221



$

217



$

673



$

664



South

148



155



160



451



415



North

16



25



29



68



61



Other

11



17



11



48



25



Total delivered logs

402



418



417



1,240



1,165



Stumpage and pay-as-cut timber

17



23



24



52



62



Products from international operations

21



23



21



63



58



Recreational and other lease revenue

15



16



15



45



29



Other revenue

14



11



7



46



28



Total

$

469



$

491



$

484



$

1,446



$

1,342



Delivered Logs

Third Party Sales

Realizations (per ton)

West

$

105.84



$

116.03



$

98.18



$

108.43



$

98.99



South

$

34.48



$

34.24



$

35.27



$

34.40



$

35.64



North

$

63.49



$

59.02



$

59.17



$

60.24



$

61.06



Delivered Logs

Third Party Sales

Volumes

(tons, thousands)

West

2,143



1,910



2,209



6,210



6,705



South

4,285



4,527



4,538



13,105



11,659



North

253



428



503



1,135



1,005



Other

292



424



263



1,226



601



Fee Harvest Volumes

(tons, thousands)

West

2,652



2,230



2,744



7,539



8,525



South

6,473



6,953



6,992



19,799



19,083



North

383



565



678



1,570



1,392



Other

444



569



191



1,384



372





(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


Q3.2017 Analyst Package





Preliminary results (unaudited)

















Segment Statement of Operations














in millions


Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016


Sales to unaffiliated customers

$

46



$

82



$

48



$

181



$

125



Intersegment sales











Total net sales

46



82



48



181



125



Cost of products sold

16



31



26



67



65



Gross margin

30



51



22



114



60



Selling expenses











General and administrative expenses

7



6



7



20



19



Charges for integration, restructuring, closures and asset impairments









1



Other operating costs (income), net



(1)



1



(1)



(1)



Operating income

23



46



14



95



41



Equity earnings (loss) from joint ventures(1)



1



1



1



1



Net contribution to earnings

$

23



$

47



$

15



$

96



$

42



(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


Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016


Operating income

$

23



$

46



$

14



$

95



$

41



Depreciation, depletion and amortization

4



4



4



11



9



Basis of real estate sold

10



24



19



48



49



Adjusted EBITDA*

$

37



$

74



$

37



$

154



$

99



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


















Selected Segment Items
















Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016


Cash spent for capital expenditures

$

(1)



$

(1)



$



$

(2)



$

(1)















Segment Statistics















Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016


Net Sales
(millions)

Real Estate

$

27



$

64



$

31



$

128



$

87



Energy and natural resources

19



18



17



53



38



Total

$

46



$

82



$

48



$

181



$

125



Acres sold

Real Estate

10,003



35,749



12,853



59,009



38,098



Price per acre

Real Estate

$

2,714



$

1,784



$

2,354



$

2,081



$

2,271



 

Weyerhaeuser Company

Wood Products Segment


Q3.2017 Analyst Package







Preliminary results (unaudited)








Segment Statement of Operations


in millions


Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016


Sales to unaffiliated customers

$

1,293



$

1,299



$

1,177



$

3,746



$

3,302



Intersegment sales





17





61



Total net sales

1,293



1,299



1,194



3,746



3,363



Cost of products sold

1,002



1,005



980



2,933



2,799



Gross margin

291



294



214



813



564



Selling expenses

19



20



21



60



63



General and administrative expenses

32



30



24



94



81



Research and development expenses



1



1



2



2



Charges for integration and restructuring, closures and asset impairments

2



8



1



11



6



Charges for product remediation

50



190





240





Other operating costs (income), net

11



5



(3)



17



(1)



Operating income and Net contribution to earnings

$

177



$

40



$

170



$

389



$

413















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


in millions


Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016


Operating income

$

177



$

40



$

170



$

389



$

413



Depreciation, depletion and amortization

36



37



33



108



96



Special items

61



201





262





Adjusted EBITDA*

$

274



$

278



$

203



$

759



$

509



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






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




Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016


Countervailing and antidumping duties

$

(11)



$

(5)



$



$

(16)



$



Impairment on non-strategic asset



(6)





(6)





Product remediation

(50)



(190)





(240)





Total

$

(61)



$

(201)



$



$

(262)



$















Selected Segment Items




Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016


Total decrease (increase) in working capital (1)

$

113



$

150



$

49



$

141



$

(48)



Cash spent for capital expenditures

$

(61)



$

(71)



$

(71)



$

(176)



$

(152)



(1) Working capital does not include cash balances.






Segment Statistics


in millions, except for third-party sales realizations

Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016


Structural Lumber
(board feet)

Third party net sales

$

538



$

525



$

495



$

1,541



$

1,412



Third party sales realizations

$

441



$

448



$

401



$

434



$

389



Third party sales volumes (2)

1,218



1,172



1,233



3,548



3,634



Production volumes

1,146



1,093



1,130



3,391



3,464



Engineered Solid
Section
(cubic feet)

Third party net sales

$

130



$

131



$

119



$

378



$

343



Third party sales realizations

$

1,979



$

2,047



$

1,916



$

1,970



$

1,935



Third party sales volumes (2)

6.6



6.4



6.2



19.2



17.7



Production volumes

6.6



6.4



5.7



19.3



17.2



Engineered
I-joists
(lineal feet)

Third party net sales

$

85



$

93



$

79



$

251



$

218



Third party sales realizations

$

1,522



$

1,529



$

1,475



$

1,512



$

1,483



Third party sales volumes (2)

57



60



53



166



147



Production volumes

53



58



49



161



141



Oriented Strand
Board
(square feet 3/8")

Third party net sales

$

225



$

243



$

199



$

671



$

544



Third party sales realizations

$

295



$

328



$

256



$

295



$

237



Third party sales volumes (2)

764



741



776



2,274



2,296



Production volumes

754



744



777



2,256



2,259



Softwood Plywood

(square feet 3/8")

Third party net sales

$

47



$

45



$

48



$

136



$

133



Third party sales realizations

$

380



$

386



$

378



$

381



$

369



Third party sales volumes (2)

123



117



127



358



368



Production volumes

99



88



105



284



304



Medium Density
Fiberboard 
(square feet 3/4")

Third party net sales

$

51



$

48



$

49



$

146



$

113



Third party sales realizations

$

845



$

821



$

761



$

820



$

765



Third party sales volumes (2)

60



58



64



177



147



Production volumes

63



63



68



182



155





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


 

Weyerhaeuser Company

Unallocated Items

Q3.2017 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

Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016

Unallocated corporate function expenses

$

(17)



$

(19)



$

(21)



$

(55)



$

(62)


Unallocated share-based compensation



(1)



(4)



(7)



(5)


Unallocated pension service costs



(1)



(2)



(3)



(4)


Foreign exchange gains (losses)



3



(1)





13


Elimination of intersegment profit in inventory and LIFO

(3)



3



2



(6)



(6)


Gain on sale of non-strategic asset

1



4



1



8



45


Charges for integration and restructuring, closures and asset impairments:









Plum Creek merger- and integration-related costs

(2)



(6)



(14)



(20)



(132)


 Other restructuring, closures and asset impairments





(1)





(2)


Other

(10)



5



(5)



(13)



(29)


Operating income (loss)

(31)



(12)



(45)



(96)



(182)


Equity earnings from joint venture (1)





8





20


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

(8)



(16)



13



(46)



37


Interest income and other

9



11



15



29



34


Net contribution to earnings

$

(30)



$

(17)



$

(9)



$

(113)



$

(91)



(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

Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016

Operating income (loss)

$

(31)



$

(12)



$

(45)



$

(96)



$

(182)


Depreciation, depletion and amortization

2



2





5



4


Unallocated pension service costs



1



2



3



4


Special items

2



6



14



20



107


Adjusted EBITDA*

$

(27)



$

(3)



$

(29)



$

(68)



$

(67)


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




















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












Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016

Plum Creek merger- and integration-related costs

(2)



(6)



(14)



(20)



(132)


Gain on sale of non-strategic asset









36


Legal expense









(11)


Total

$

(2)



$

(6)



$

(14)



$

(20)



$

(107)












Unallocated Selected Items












Q2.2017


Q3.2017


Q3.2016


YTD.2017


YTD.2016

Cash spent for capital expenditures

$



$

(1)



$

(3)



$

(2)



$

(10)


 

SOURCE Weyerhaeuser Company


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