Weyerhaeuser Investor Relations

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

https://investor.weyerhaeuser.com/2017-10-27-Weyerhaeuser-reports-third-quarter-results