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Weyerhaeuser reports first quarter results

- First quarter net earnings of $269 million, or $0.35 per diluted share

- Earnings before special items increased 65 percent compared with first quarter 2017

- Adjusted EBITDA increased 20 percent compared with first quarter 2017

- Highest first quarter Wood Products Adjusted EBITDA on record

Apr 27, 2018

SEATTLE, April 27, 2018 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported first quarter net earnings of $269 million, or 35 cents per diluted share, on net sales of $1.9 billion. This compares with earnings of $157 million, or 21 cents per diluted share, on net sales of $1.7 billion for the same period last year.

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

Excluding net after-tax special charges of $6 million, the company reported net earnings of $275 million, or 36 cents per diluted share for the first quarter. This compares with net earnings before special items of $167 million for the same period last year and $234 million for the fourth quarter of 2017.  Adjusted EBITDA for the first quarter was $544 million compared with $454 million for the first quarter of last year and $551 million for the fourth quarter of 2017.

"I am extremely pleased with our first quarter performance, as we fully capitalized on strong lumber, OSB and Western log markets to drive outstanding results, including the highest first quarter Wood Products EBITDA on record. This includes exceptional work by our teams to mitigate the effect of ongoing freight service disruptions," said Doyle R. Simons, president and chief executive officer. "Looking forward, we are relentlessly focused on capturing the full benefit of improving housing starts and favorable market dynamics to drive value for shareholders."

WEYERHAEUSER FINANCIAL HIGHLIGHTS

2017


2018


2017

(millions, except per share data)

Q4


Q1


Q1

Net sales

$1,823


$1,865


$1,693

Net earnings

$271


$269


$157

Net earnings per diluted share

$0.36


$0.35


$0.21

Weighted average shares outstanding, diluted

758


759


755

Net earnings before special items(1)

$234


$275


$167

Net earnings per diluted share before special items

$0.31


$0.36


$0.22

Adjusted EBITDA(2)

$551


$544


$454


(1) Fourth quarter 2017 after-tax special items include a $99 million gain on the sale of certain Southern timberlands, charges of $52 million for tax adjustments including enactment of tax legislation, charges of $31 million for product remediation, a benefit of $26 million for environmental remediation insurance recoveries, $12 million for Plum Creek merger-related costs, and a $7 million net benefit from an adjustment to accrued countervailing and antidumping duties on softwood lumber. First quarter 2018 after-tax special items include charges of $21 million for environmental remediation and a $15 million benefit from product remediation insurance proceeds. First quarter 2017 special items include after-tax 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, 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

2017


2018



(millions)

Q4


Q1


Change

Net sales

$714


$733


$19

Contribution to pre-tax earnings

$265


$189


($76)

Pre-tax charge (benefit) for special items

($99)


$0


$99

Contribution to pre-tax earnings before special items

$166


$189


$23

Adjusted EBITDA

$252


$268


$16

1Q 2018 Performance - In the West, domestic and export log sales realizations improved compared with the fourth quarter, and forestry costs declined seasonally. In the South, seasonally lower fee harvest volumes were offset by slightly higher average sales realizations, lower unit logging costs and reduced forestry expense.

2Q 2018 Outlook - Weyerhaeuser expects second quarter earnings and Adjusted EBITDA will be significantly higher than the second quarter of 2017, but lower than the first quarter of 2018. Compared with the first quarter, the company anticipates seasonally higher unit logging costs and increased road and forestry costs, partially offset by slightly higher Western log sales realizations. Average Southern log sales realizations are expected to be similar to the first quarter.

REAL ESTATE, ENERGY & NATURAL RESOURCES

FINANCIAL HIGHLIGHTS

2017


2018



(millions)

Q4


Q1


Change

Net sales

$100


$51


($49)

Contribution to pre-tax earnings

$50


$25


($25)

Adjusted EBITDA

$87


$41


($46)

1Q 2018 Performance - Earnings and Adjusted EBITDA decreased compared to the fourth quarter due to seasonally lower Real Estate sales.

2Q 2018 Outlook - Weyerhaeuser anticipates second quarter earnings and Adjusted EBITDA will be comparable to the first quarter. We continue to expect full year 2018 Adjusted EBITDA for the segment will be approximately $250 million.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS

2017


2018



(millions)

Q4


Q1


Change

Net sales

$1,228


$1,309


$81

Contribution to pre-tax earnings

$180


$270


$90

Pre-tax charge (benefit) for special items

$41


($20)


($61)

Contribution to pre-tax earnings before special items

$221


$250


$29

Adjusted EBITDA

$258


$286


$28

1Q 2018 Performance - Sales volumes increased across most product lines compared with the fourth quarter due to seasonally higher demand, and operating rates improved. Higher average sales realizations for lumber and engineered wood products were partially offset by lower average sales realizations for oriented strand board and increased Western log costs.

First quarter Adjusted EBITDA includes charges of $5 million for countervailing and anti-dumping duties on Canadian softwood lumber. These duties are no longer reported as a special item.

First quarter special items consist of a $20 million pre-tax benefit from product remediation insurance proceeds.

2Q 2018 Outlook - Weyerhaeuser expects significantly higher earnings before special items and Adjusted EBITDA in the second quarter compared with the first quarter. The company anticipates seasonally higher sales volumes and improved operating rates. Higher average sales realizations for lumber, oriented strand board and engineered wood products will be partially offset by higher Western log costs.

UNALLOCATED

FINANCIAL HIGHLIGHTS

2017


2018



(millions)

Q4


Q1


Change

Contribution to pre-tax earnings

($25)


($92)


($67)

Pre-tax charge (benefit) for special items

($28)


$28


$56

Contribution to pre-tax earnings before special items

($53)


($64)


($11)

Adjusted EBITDA

($46)


($51)


($5)

1Q 2018 Performance - Non-cash charges for elimination of intercompany profit in inventory and LIFO increased compared with the fourth quarter due to higher values and volume for softwood lumber and Western log inventories. Non-cash non-operating pension and post-retirement expense also increased.

First quarter special items consist of $28 million in pre-tax charges for environmental remediation associated with a formerly owned mill site.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control 12.4 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 2017, we generated $7.2 billion in net sales and employed approximately 9,300 people who serve customers worldwide. We are listed on the North American and World Dow Jones Sustainability Indices. Our common stock trades on the New York Stock Exchange under the symbol WY. Learn more at www.weyerhaeuser.com.

EARNINGS CALL INFORMATION

Weyerhaeuser will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on April 27, 2018, to discuss first quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on April 27, 2018.

To join the conference call from within North America, dial 855-223-0757 (access code: 1693068) at least 15 minutes prior to the call. Those calling from outside North America should dial 574-990-1206 (access code: 1693068). Replays will be available for two weeks at 855-859-2056 (access code: 1693068) from within North America and at 404-537-3406 (access code: 1693068) 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 second quarter of 2018: earnings and Adjusted EBITDA for each of our business segments; log sale realizations, fee harvest volumes and logging, road and forestry costs in our timber business; and sales volumes and realizations and operating rates for our Wood Products business. 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, particularly the relative value of the U.S. dollar to the yen and the Canadian dollar, and the relative value of the euro to the yen;
  • restrictions on international trade, tariffs imposed on imports and the availability and cost of shipping and transportation;
  • economic activity in Asia, especially Japan and China;
  • 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 matters described under "Risk Factors" in our 2017 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 - Nancy Thompson, 919-760-3484

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 December 31, 2017:


DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate
& ENR


Wood
Products


Unallocated
Items


Total

Adjusted EBITDA by Segment:










Net earnings









$

271


Interest expense, net of capitalized interest









96


Income taxes









103


Net contribution to earnings

$

265



$

50



$

180



$

(25)



$

470


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







16



16


Interest income and other







(10)



(10)


Operating income (loss)

265



50



180



(19)



476


Depreciation, depletion and amortization

86



4



37





127


Basis of real estate sold



33







33


Unallocated pension service costs







1



1


Special items(1)(2)(3)

(99)





41



(28)



(86)


Adjusted EBITDA

$

252



$

87



$

258



$

(46)



$

551



(1) Pre-tax special items included in Timberlands consist of a $99 million gain on the sale of certain Southern timberlands.

(2) Pre-tax special items included in Wood Products consist of $50 million of product remediation charges, partially offset by a $9 million benefit from an adjustment to accrued softwood lumber countervailing and antidumping duties.

(3) Pre-tax special items included in Unallocated Items consist of $42 million for environmental remediation insurance recoveries and $14 million for Plum Creek merger-related costs.

 

The table below reconciles Adjusted EBITDA for the quarter ended March 31, 2018:


DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate & ENR


Wood Products


Unallocated Items


Total

Adjusted EBITDA by Segment:










Net earnings









$

269


Interest expense, net of capitalized interest









93


Income taxes









30


Net contribution to earnings

$

189



$

25



$

270



$

(92)



$

392


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







24



24


Interest income and other







(12)



(12)


Operating income (loss)

189



25



270



(80)



404


Depreciation, depletion and amortization

79



4



36



1



120


Basis of real estate sold



12







12


Unallocated pension service costs










Special items(1)(2)





(20)



28



8


Adjusted EBITDA

$

268



$

41



$

286



$

(51)



$

544



(1)   Pre-tax special items attributable to Wood Products include a $20 million benefit from product remediation insurance proceeds.

(2)   Pre-tax special items included in Unallocated Items consist of charges of $28 million for environment remediation.

 

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


Interest expense, net of capitalized interest









99


Income taxes









24


Net contribution to earnings

$

148



$

26



$

172



$

(66)



$

280


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.

 

Weyerhaeuser Company



Exhibit 99.2

Q1.2018 Analyst Package




Preliminary results (unaudited)









Consolidated Statement of Operations







in millions

Q4


Q1


December 31,
2017


March 31,
 2018


March 31,
 2017

Net sales

$

1,823



$

1,865



$

1,693


Cost of products sold

1,316



1,348



1,272


Gross margin

507



517



421


Selling expenses

21



23



22


General and administrative expenses

72



78



87


Research and development expenses

2



2



4


Charges for integration and restructuring, closures and asset impairments

16



2



13


Charges (recoveries) for product remediation

50



(20)




Other operating costs (income), net

(130)



28



2


Operating income

476



404



293


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

(16)



(24)



(22)


Interest income and other

10



12



9


Interest expense, net of capitalized interest

(96)



(93)



(99)


Earnings before income taxes

374



299



181


Income taxes

(103)



(30)



(24)


Net earnings

$

271



$

269



$

157



Per Share Information



Q4


Q1


December 31,
 2017


March 31,
 2018


March 31,
 2017

Earnings per share, basic and diluted

$

0.36



$

0.35



$

0.21


Dividends paid per common share

$

0.32



$

0.32



$

0.31


Weighted average shares outstanding (in thousands):






Basic

755,409



756,815



750,665


Diluted

758,463



759,462



754,747


Common shares outstanding at end of period (in thousands)

755,223



756,700



751,411








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







in millions

Q4


Q1


December 31,
 2017


March 31,
 2018


March 31,
 2017

Net earnings

$

271



$

269



$

157


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

16



24



22


Interest income and other

(10)



(12)



(9)


Interest expense, net of capitalized interest

96



93



99


Income taxes

103



30



24


Operating income

476



404



293


Depreciation, depletion and amortization

127



120



133


Basis of real estate sold

33



12



14


Unallocated pension service costs

1





2


Special items

(86)



8



12


Adjusted EBITDA*

$

551



$

544



$

454








*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 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.


 


Weyerhaeuser Company

Total Company Statistics

Q1.2018 Analyst Package




Preliminary results (unaudited)









Special Items Included in Net Earnings (Income Tax Affected)







in millions

Q4


Q1


December 31,
 2017


March 31,
 2018


March 31,
 2017

Net earnings

$

271



$

269



$

157


Plum Creek merger and integration-related costs

12





10


Gain on sale of timberlands

(99)






Environmental remediation charges (recoveries)

(26)



21




Countervailing and antidumping duties charges (credits)(1)

(7)






Product remediation charges (recoveries)

31



(15)




Tax adjustments, including enactment of tax legislation

52






Net earnings before special items

$

234



$

275



$

167









Q4


Q1


December 31,
 2017


March 31,
 2018


March 31,
 2017

Net earnings per diluted share

$

0.36



$

0.35



$

0.21


Plum Creek merger and integration-related costs

0.02





0.01


Gain on sale of timberlands

(0.14)






Environmental remediation charges (recoveries)

(0.03)



0.03




Countervailing and antidumping duties charges (credits)(1)

(0.01)






Product remediation charges (recoveries)

0.04



(0.02)




Tax adjustments, including enactment of tax legislation

0.07






Net earnings per diluted share before special items

$

0.31



$

0.36



$

0.22


(1)As of first quarter 2018, countervailing and anti-dumping duties are no longer reported as a special item.

 







Selected Total Company Items


in millions

Q4


Q1


December 31,
 2017


March 31,
 2018


March 31,
 2017

Pension and postretirement costs:






Pension and postretirement service costs

$

9



$

10



$

10


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

16



24



22


Total company pension and postretirement costs

$

25



$

34



$

32


 


Weyerhaeuser Company




Q1.2018 Analyst Package



Preliminary results (unaudited)






Consolidated Balance Sheet







in millions

December 31,
 2017


March 31,
 2018


March 31,
 2017


ASSETS






Current assets:






Cash and cash equivalents

$

824



$

598



$

455


Receivables, less allowances

396



481



472


Receivables for taxes

14



24



10


Inventories

383



445



386


Prepaid expenses and other current assets

98



118



142


Current restricted financial investments held by variable interest entities



253




Total current assets

1,715



1,919



1,465


Property and equipment, net

1,618



1,573



1,544


Construction in progress

225



275



230


Timber and timberlands at cost, less depletion

12,954



12,888



14,218


Minerals and mineral rights, less depletion

308



306



317


Goodwill

40



40



40


Deferred tax assets

268



244



287


Other assets

316



278



285


Restricted financial investments held by variable interest entities

615



362



615


Total assets

$

18,059



$

17,885



$

19,001








LIABILITIES AND EQUITY






Current liabilities:






Current maturities of long-term debt

$

62



$



$

343


Current debt (nonrecourse to the company) held by variable interest entities

209



209




Accounts payable

249



245



227


Accrued liabilities

645



457



452


Total current liabilities

1,165



911



1,022


Long-term debt

5,930



5,928



6,263


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

302



302



511


Deferred pension and other postretirement benefits

1,487



1,454



1,287


Deposit received from contribution of timberlands to related party





422


Other liabilities

276



299



281


Total liabilities

9,160



8,894



9,786


Total equity

8,899



8,991



9,215


Total liabilities and equity

$

18,059



$

17,885



$

19,001


 

Weyerhaeuser Company


Q1.2018 Analyst Package

Preliminary results (unaudited)






Consolidated Statements of Cash Flows







in millions

Q4


Q1


December 31,
 2017


March 31,
 2018


March 31,
 2017

Cash flows from operations:






Net earnings

$

271



$

269



$

157


Noncash charges (credits) to income:






Depreciation, depletion and amortization

127



120



133


Basis of real estate sold

33



12



14


Deferred income taxes, net

35



10



3


Pension and other postretirement benefits

25



34



32


Share-based compensation expense

11



9



10


Charges for impairments of assets

1






Net gain on sale of southern timberlands

(99)






Foreign exchange transaction (gains) losses

(1)



2



3


Change in:






Receivables, less allowances

78



(83)



(70)


Receivables and payables for taxes

66



5



(36)


Inventories

(43)



(66)



(28)


Prepaid expenses

(3)



(5)



(9)


Accounts payable and accrued liabilities

(78)



(173)



(137)


Pension and postretirement benefit contributions and payments

(19)



(16)



(22)


Other

(50)



18



(15)


Net cash from operations

$

354



$

136



$

35








Cash flows from investing activities:






Purchases of property and equipment(1)

$

(145)



$

(61)



$

(52)


Timberlands reforestation costs(1)

(15)



(20)



(23)


Proceeds from sale of nonstrategic assets

6



2



8


Proceeds from sale of southern timberlands

 

203






Proceeds from redemption of ownership in related party

108






Other

18



3



(1)


Cash from (used in) investing activities

$

175



$

(76)



$

(68)








Cash flows from financing activities:






Cash dividends on common shares

$

(242)



$

(242)



$

(233)


Payments of long-term debt



(62)




Proceeds from exercise of stock options

39



25



55


Other

1



(7)



(10)


Cash from (used in) financing activities

$

(202)



$

(286)



$

(188)








Net change in cash and cash equivalents

$

327



$

(226)



$

(221)


Cash and cash equivalents at beginning of period

497



824



676


Cash and cash equivalents at end of period

$

824



$

598



$

455








Cash paid during the period for:






Interest, net of amount capitalized

$

66



$

105



$

120


Income taxes

$

40



$

17



$

59








(1) Purchases for property and equipment and Timberlands reforestation costs represent total Company cash spent for capital expenditures.

 

Weyerhaeuser Company

Timberlands Segment


Q1.2018 Analyst Package



Preliminary results (unaudited)


Segment Statement of Operations










in millions


Q4.2017


Q1.2018


Q1.2017


Sales to unaffiliated customers

$

496



$

505



$

486



Intersegment sales

218



228



202



Total net sales

714



733



688



Cost of products sold

531



526



519



Gross margin

183



207



169



Selling expenses

1



1



1



General and administrative expenses

19



23



24



Research and development expenses

2



2



3



Other operating income, net

(104)



(8)



(7)



Operating income and Net contribution to earnings

$

265



$

189



$

148











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










in millions


Q4.2017


Q1.2018


Q1.2017


Operating income

$

265



$

189



$

148



Depreciation, depletion and amortization

86



79



94



Special items

(99)







Adjusted EBITDA*

$

252



$

268



$

242



*See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.










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










in millions


Q4.2017


Q1.2018


Q1.2017


Gain on sale of timberlands

$

99



$



$





Selected Segment Items










in millions


Q4.2017


Q1.2018


Q1.2017


Total decrease (increase) in working capital(1)

$

(15)



$

(40)



$

(18)



Cash spent for capital expenditures

$

(36)



$

(28)



$

(30)



(1) Represents the change in prepaid assets, accounts receivable, accounts payable, accrued liabilities and log inventory for the Timberlands and Real Estate & ENR segments combined.










Segment Statistics(2)(3)











Q4.2017


Q1.2018


Q1.2017


Third Party Net Sales(millions)

Delivered logs:







West

$

242



$

266



$

225



South

165



157



148



North

27



25



27



Other

11



14



20



Total delivered logs

445



462



420



Stumpage and pay-as-cut timber

21



15



12



Products from international operations





19



Recreational and other lease revenue

14



14



14



Other revenue

16



14



21



Total

$

496



$

505



$

486



Delivered Logs

Third Party Sales

Realizations (per ton)

West

$

121.41



$

131.59



$

104.27



South

$

34.53



$

34.83



$

34.48



North

$

60.77



$

60.79



$

59.57



Delivered Logs

Third Party Sales

Volumes

(tons, thousands)

West

1,992



2,019



2,157



South

4,790



4,510



4,293



North

439



404



454



Other

232



317



510



Fee Harvest Volumes

(tons, thousands)

West

2,544



2,443



2,657



South

7,350



6,751



6,373



North

635



549



622



Other





371



(2) The Western region includes Washington and Oregon. The Southern region includes Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas and Oklahoma. The Northern region includes West Virginia, Maine, New Hampshire, Vermont, Michigan, Wisconsin and Montana. Other includes our Canadian operations and managed Twin Creeks operations (our management agreement for the Twin Creeks Venture began in April 2016 and terminated in December 2017).


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


 

Weyerhaeuser Company

Real Estate, Energy and Natural Resources Segment


Q1.2018 Analyst Package


Preliminary results (unaudited)










Segment Statement of Operations










in millions


Q4.2017


Q1.2018


Q1.2017


Net sales

$

100



$

51



$

53



Cost of products sold

43



19



20



Gross margin

57



32



33



General and administrative expenses

6



7



7



Other operating costs (income), net

1







Operating income and net contribution to earnings

$

50



$

25



$

26











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










in millions


Q4.2017


Q1.2018


Q1.2017


Operating income

$

50



$

25



$

26



Depreciation, depletion and amortization

4



4



3



Basis of real estate sold

33



12



14



Adjusted EBITDA*

$

87



$

41



$

43



*See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.










Selected Segment Items










in millions


Q4.2017


Q1.2018


Q1.2017


Cash spent for capital expenditures

$



$



$











Segment Statistics











Q4.2017


Q1.2018


Q1.2017


Net Sales
(millions)

Real Estate

$

80



$

34



$

37



Energy and Natural Resources

20



17



16



Total

$

100



$

51



$

53



Acres Sold

Real Estate

38,226



21,771



13,257



Price per Acre

Real Estate

$

2,076



$

1,539



$

2,403



 

Weyerhaeuser Company

Wood Products Segment

Q1.2018 Analyst Package





Preliminary results (unaudited)











Segment Statement of Operations

in millions


Q4.2017


Q1.2018


Q1.2017

Net sales

$

1,228



$

1,309



$

1,154


Cost of products sold

947



1,005



926


Gross margin

281



304



228


Selling expenses

20



21



21


General and administrative expenses

32



34



32


Research and development expenses





1


Charges for integration and restructuring, closures and asset impairments

2



2



1


Charges (recoveries) for product remediation

50



(20)




Other operating costs (income), net

(3)



(3)



1


Operating income and Net contribution to earnings

$

180



$

270



$

172









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

in millions


Q4.2017


Q1.2018


Q1.2017

Operating income

$

180



$

270



$

172


Depreciation, depletion and amortization

37



36



35


Special items

41



(20)




Adjusted EBITDA*

$

258



$

286



$

207


*See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.

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

in millions


Q4.2017


Q1.2018


Q1.2017

Countervailing and antidumping duties (charges) credits(1)

$

9



$



$


Product remediation (charges) recoveries

(50)



20




Total

$

(41)



$

20



$


(1)As of first quarter 2018, countervailing and anti-dumping duties are no longer reported as a special item.








Selected Segment Items








in millions


Q4.2017


Q1.2018


Q1.2017

Total decrease (increase) in working capital(1)

$

(81)



$

(226)



$

(122)


Cash spent for capital expenditures

$

(123)



$

(52)



$

(44)


(1) Represents the change in prepaid assets, accounts receivable, accounts payable, accrued liabilities and inventory for the Wood Products segment.


Segment Statistics

in millions, except for third party sales realizations

Q4.2017


Q1.2018


Q1.2017

Structural Lumber
(volumes presented

in board feet)

Third party net sales

$

517



$

569



$

478


Third party sales realizations

$

466



$

498



$

413


Third party sales volumes(2)

1,110



1,140



1,158


Production volumes

1,118



1,160



1,152


Engineered Solid
Section
(volumes presented

in cubic feet)

Third party net sales

$

122



$

129



$

117


Third party sales realizations

$

2,076



$

2,088



$

1,881


Third party sales volumes(2)

5.9



6.2



6.2


Production volumes

5.8



6.3



6.3


Engineered
I-joists
(volumes presented

in lineal feet)

Third party net sales

$

85



$

78



$

73


Third party sales realizations

$

1,561



$

1,585



$

1,481


Third party sales volumes(2)

54



49



49


Production volumes

52



56



50


Oriented Strand
Board
(volumes presented

in square feet 3/8")

Third party net sales

$

233



$

232



$

203


Third party sales realizations

$

335



$

314



$

263


Third party sales volumes(2)

697



739



769


Production volumes

739



734



758


Softwood Plywood

(volumes presented

in square feet 3/8")

Third party net sales

$

40



$

50



$

44


Third party sales realizations

$

417



$

438



$

377


Third party sales volumes(2)

95



115



118


Production volumes

86



97



97


Medium Density
Fiberboard 
(volumes presented

in square feet 3/4")

Third party net sales

$

37



$

43



$

47


Third party sales realizations

$

829



$

839



$

795


Third party sales volumes(2)

45



51



59


Production volumes

50



50



56



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

 

Weyerhaeuser Company

Unallocated Items

Q1.2018 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 expense, pension and postretirement costs, foreign exchange transaction gains and losses and the elimination of intersegment profit in inventory and LIFO.







Contribution to Earnings







in millions

Q4.2017


Q1.2018


Q1.2017

Unallocated corporate function and variable compensation expense

$

(18)



$

(18)



$

(19)


Liability classified share-based compensation

(2)





(6)


Foreign exchange gains (losses)

1



(2)



(3)


Elimination of intersegment profit in inventory and LIFO

(14)



(21)



(6)


Charges for integration and restructuring, closures and asset impairments

(14)





(12)


Other

28



(39)



(7)


Operating income (loss)

(19)



(80)



(53)


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

(16)



(24)



(22)


Interest income and other

10



12



9


Net contribution to earnings

$

(25)



$

(92)



$

(66)








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







in millions

Q4.2017


Q1.2018


Q1.2017

Operating income (loss)

$

(19)



$

(80)



$

(53)


Depreciation, depletion and amortization



1



1


Unallocated pension service costs

1





2


Special items

(28)



28



12


Adjusted EBITDA*

$

(46)



$

(51)



$

(38)


*See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.












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







in millions

Q4.2017


Q1.2018


Q1.2017

Plum Creek merger and integration-related costs

$

(14)



$



$

(12)


Environmental remediation insurance (charges) recoveries

42



(28)




Total

$

28



$

(28)



$

(12)








Unallocated Selected Items







in millions

Q4.2017


Q1.2018


Q1.2017

Cash spent for capital expenditures

$

(1)



$

(1)



$

(1)


 

SOURCE Weyerhaeuser Company


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