Weyerhaeuser Investor Relations

Weyerhaeuser reports fourth quarter, full year results

- Generated full year net earnings of $748 million or $0.99 per diluted share

- Full year 2018 Adjusted EBITDA in excess of $2 billion

- Repurchased $75 million of common shares during the fourth quarter

- Reduced pension liabilities by over $660 million and incurred $0.20 per share non-cash charge following completion of lump sum offer

Feb 1, 2019

SEATTLE, Feb. 1, 2019 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported a fourth quarter net loss of $93 million, or 12 cents per diluted share, on net sales of $1.6 billion. This compares with net earnings of $271 million, or 36 cents per diluted share, on net sales of $1.8 billion for the same period last year and net earnings of $255 million for the third quarter of 2018.

Weyerhaeuser Company logo. (PRNewsFoto/Weyerhaeuser Company)

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

Fourth quarter includes net after-tax charges of $163 million for special items, primarily a non-cash settlement charge related to a previously announced action to reduce our pension liabilities. Excluding special items, the company reported net earnings of $70 million, or 10 cents per diluted share, for fourth quarter 2018. This compares with net earnings before special items of $234 million for the same period last year and $214 million for the third quarter of 2018.

For the full year 2018, Weyerhaeuser reported net earnings of $748 million, or 99 cents per diluted share, on net sales of $7.5 billion. This compares with net earnings of $582 million on net sales of $7.2 billion for the full year 2017.

Full year 2018 includes net after-tax charges of $143 million from special items. Excluding these items, the company reported net earnings before special items of $891 million, or $1.18 per diluted share. This compares with net earnings before special items of $872 million for the full year 2017.

"In 2018 we delivered strong results through a wide range of market conditions, generating over $2 billion of Adjusted EBITDA, returning nearly $1.4 billion to shareholders through dividends and share repurchases, and significantly reducing our pension liabilities," said Devin W. Stockfish, president and chief executive officer. "Entering 2019, U.S. economic fundamentals remain strong and we expect continued growth in U.S. housing. We remain focused on driving value for shareholders through operational excellence and disciplined capital allocation."

WEYERHAEUSER FINANCIAL HIGHLIGHTS

2018


2018


2017


2018


2017

(millions, except per share data)

Q3


Q4


Q4


Full Year

Net sales

$1,910


$1,636


$1,823


$7,476


$7,196

Net earnings (loss)

$255


$(93)


$271


$748


$582

Net earnings (loss) per diluted share

$0.34


$(0.12)


$0.36


$0.99


$0.77

Weighted average shares outstanding, diluted

757


750


758


757


757

Net earnings before special items(1)(2)

$214


$70


$234


$891


$872

Net earnings per diluted share before special items

$0.28


$0.10


$0.31


$1.18


$1.15

Adjusted EBITDA(3)

$505


$346


$551


$2,032


$2,080











(1) Fourth quarter 2018 after-tax special items include a $152 million non-cash settlement charge related to our U.S. qualified pension plan lump sum offer, a $21 million tax adjustment charge, and a $10 million gain on sale of a nonstrategic asset. Full year 2018 after-tax special items also include a $41 million tax benefit related to a contribution to our U.S. qualified pension plan and $21 million of environmental remediation expense. Beginning first quarter 2018, countervailing and antidumping duties are no longer reported as a special item.

 

(2) Fourth quarter 2017 after-tax special items include a $99 million gain on the sale of Southern timberlands, charges of $52 million for tax adjustments including enactment of tax legislation, $31 million for product remediation charges, $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. Full year 2017 after-tax special items also include $151 million of charges for impairment of Uruguay operations, and an additional: $149 million for product remediation charges; $15 million for Plum Creek merger-related costs; and $12 million for countervailing and antidumping duties.

 

(3) Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income from continuing operations, adjusted for depreciation, depletion, amortization, basis in real estate sold, unallocated pension service costs and special items. 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 with this release.

 

TIMBERLANDS


FINANCIAL HIGHLIGHTS

2018


2018



(millions)

Q3


Q4


Change

Net sales

$653


$664


$11

Contribution to pre-tax earnings

$126


$107


$(19)

Adjusted EBITDA

$206


$188


$(18)

4Q 2018 Performance - In the West, lower average log sales realizations were partially offset by higher sales volumes across domestic and export markets. Western road spending increased as favorable weather allowed the company to complete previously deferred activity. In the South, fee harvest volumes increased due to higher stumpage sales, and average log sales realizations were comparable to the third quarter.

1Q 2019 Outlook - Weyerhaeuser expects first quarter earnings and Adjusted EBITDA will be lower than the fourth quarter. In the South, the company anticipates seasonally lower fee harvest volumes and comparable average log sales realizations. In the West, the company expects lower fee harvest volumes and average log sales realizations moderately below the fourth quarter average, mostly offset by significantly lower road and forestry spending.

REAL ESTATE, ENERGY & NATURAL RESOURCES


FINANCIAL HIGHLIGHTS

2018


2018



(millions)

Q3


Q4


Change

Net sales

$96


$102


$6

Contribution to pre-tax earnings

$36


$44


$8

Adjusted EBITDA

$86


$90


$4

4Q 2018 Performance - Earnings and Adjusted EBITDA increased compared with the third quarter. Real Estate EBITDA was higher due to the regional mix of properties sold. Average land basis decreased modestly.

1Q 2019 Outlook - Weyerhaeuser anticipates earnings and Adjusted EBITDA will increase in the first quarter due to the timing of Real Estate transactions. Royalties from Energy and Natural Resources operations should be seasonally lower. The company anticipates full year 2019 Adjusted EBITDA for the segment of approximately $260 million.

WOOD PRODUCTS


FINANCIAL HIGHLIGHTS

2018


2018



(millions)

Q3


Q4


Change

Net sales

$1,346


$1,075


$(271)

Contribution to pre-tax earnings

$213


$26


$(187)

Adjusted EBITDA

$250


$66


$(184)

4Q 2018 Performance - Earnings and Adjusted EBITDA decreased compared with the third quarter, primarily due to a 21 percent decline in average sales realizations for lumber and oriented strand board. Sales volumes and operating rates for lumber and engineered wood products decreased seasonally, and unit manufacturing costs were higher. Sales volumes for oriented strand board were comparable to the third quarter. Third quarter volumes were lower than normal due to a scheduled press replacement at our Grayling, Michigan mill, which was completed in late October.

Fourth quarter results include a minimal benefit from lower Western and Canadian log prices as the costs of sales includes logs purchased in the third quarter when prices were higher.

1Q 2019 Outlook - Weyerhaeuser anticipates first quarter earnings and Adjusted EBITDA will be significantly higher than the fourth quarter. The company expects seasonally higher sales volumes, higher operating rates, improved unit manufacturing costs and additional benefit from the fourth quarter decrease in Western and Canadian log prices.

UNALLOCATED


FINANCIAL HIGHLIGHTS

2018


2018



(millions)

Q3


Q4


Change

Contribution to pre-tax earnings (loss)

$(42)


$(194)


$(152)

Pre-tax charge for special items

—


$187


$187

Contribution to pre-tax earnings (loss) before special items

$(42)


$(7)


$35

Adjusted EBITDA

$(37)


$2


$39








4Q 2018 Performance - Fourth quarter results include benefits from elimination of intersegment profit in inventory and LIFO, favorable year-end employee benefits adjustments and foreign exchange gains.

Fourth quarter pre-tax special items include a non-cash charge of $200 million related to completion of a previously announced terminated vested lump sum offer for our U.S. pension plan and a $13 million gain on the sale of a nonstrategic asset.

In January 2019, Weyerhaeuser transferred approximately $1.5 billion of U.S. pension assets and liabilities to an insurance carrier through the purchase of a group annuity contract. The transaction was funded with assets held by the U.S. pension plan and there will be no change to pension benefits for transferred participants. In connection with this transaction, the company expects to recognize a non-cash pre-tax pension settlement charge of approximately $450 million in the first quarter of 2019.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control 12.2 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 2018, we generated $7.5 billion in net sales and employed approximately 9,300 people who serve customers worldwide. We are listed on the Dow Jones Sustainability North America 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 February 1, 2019 to discuss fourth quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on February 1, 2019.

To join the conference call from within North America, dial 855-223-0757 (access code: 6872608) at least 15 minutes prior to the call. Those calling from outside North America should dial 574-990-1206 (access code: 6872608). Replays will be available for two weeks at 855-859-2056 (access code: 6872608) from within North America and at 404-537-3406 (access code: 6872608) from outside North America.

FORWARD LOOKING STATEMENTS

This news release contains statements concerning the company's future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, including with respect to the following for the first quarter of 2019: earnings and Adjusted EBITDA for each of our business segments; pension settlement charges; log sale realizations; fee harvest volumes and road and forestry spending in our timber business; Wood Products sales volumes and realizations and operating rates; real estate sales volumes; and royalties from energy and natural resources operations. 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 Japanese yen, the Chinese yuan and the Canadian dollar, and the relative value of the euro to the yen;
  • restrictions on international trade and tariffs imposed on imports or exports;
  • 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 annual reports 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, 919-861-0342

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 year ended December 31, 2018:


DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate & ENR


Wood Products


Unallocated Items


Total

Adjusted EBITDA by Segment:










Net earnings









$

748


Interest expense, net of capitalized interest









375


Income taxes(1)









59


Net contribution to earnings

$

583



$

127



$

838



$

(366)



$

1,182


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

—



—



—



272



272


Interest income and other (3)

—



(1)



—



(59)



(60)


Operating income

583



126



838



(153)



1,394


Depreciation, depletion and amortization

319



14



149



4



486


Basis of real estate sold

—



124



—



—



124


Unallocated pension service costs

—



—



—



—



—


Special items included in operating income(4)

—



—



—



28



28


Adjusted EBITDA

$

902



$

264



$

987



$

(121)



$

2,032



(1) Income taxes include special items consisting of a $41 million tax benefit related to our pension contribution and a $21 million tax adjustment charge.

(2) Non-operating pension and other postretirement benefit (costs) credits include a pre-tax special item consisting of a $200 million non-cash settlement charge related to our U.S. qualified pension plan lump sum offer.

(3) Interest income and other includes a pre-tax special item consisting of a $13 million gain on sale of a nonstrategic asset.

(4) Operating income for Unallocated Items include pre-tax special items consisting of $28 million of environmental remediation expense.

 

The table below reconciles Adjusted EBITDA for the year ended December 31, 2017:


DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate & ENR


Wood Products


Unallocated Items


Total

Adjusted EBITDA by Segment:










Net earnings









$

582


Interest expense, net of capitalized interest









393


Income taxes









134


Net contribution to earnings

$

532



$

146



$

569



$

(138)



$

1,109


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

—



—



—



62



62


Interest income and other

—



(1)



—



(39)



(40)


Operating income

532



145



569



(115)



1,131


Depreciation, depletion and amortization

356



15



145



5



521


Basis of real estate sold

—



81



—



—



81


Unallocated pension service costs

—



—



—



4



4


Special items included in operating income(1)(2)(3)

48



—



303



(8)



343


Adjusted EBITDA

$

936



$

241



$

1,017



$

(114)



$

2,080



(1) Operating income for Timberlands include pre-tax special items consisting of a $147 million non-cash impairment charge of the Uruguay operations and a $99 million gain on the sale of Southern timberlands.

(2) Operating income for Wood Products include pre-tax special items consisting of $290 million of product remediation charges, $7 million for countervailing and antidumping duties on softwood lumber, and a $6 million impairment on a nonstrategic asset.

(3) Operating income for Unallocated Items include pre-tax special items consisting of $42 million for environmental remediation insurance recoveries and $34 million for Plum Creek merger-related costs.

 

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


DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate & ENR


Wood Products


Unallocated Items


Total

Adjusted EBITDA by Segment:










Net earnings (loss)









$

(93)


Interest expense, net of capitalized interest









97


Income taxes(1)









(21)


Net contribution to earnings

$

107



$

44



$

26



$

(194)



$

(17)


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

—



—



—



218



218


Interest income and other(3)

—



(1)



—



(23)



(24)


Operating income

107



43



26



1



177


Depreciation, depletion and amortization

81



3



40



1



125


Basis of real estate sold

—



44



—



—



44


Unallocated pension service costs

—



—



—



—



—


Special items included in operating income

—



—



—



—



—


Adjusted EBITDA

$

188



$

90



$

66



$

2



$

346



(1) Income taxes include a special item consisting of a $21 million tax adjustment charge.

(2) Non-operating pension and other postretirement benefit (costs) credits include a pre-tax special item consisting of a $200 million non-cash settlement charge related to our U.S. qualified pension plan lump sum offer.

(3) Interest income and other includes a pre-tax special item consisting of a $13 million gain on sale of a nonstrategic asset.

 

The table below reconciles Adjusted EBITDA for the quarter ended September 30, 2018:


DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate & ENR


Wood Products


Unallocated Items


Total

Adjusted EBITDA by Segment:










Net earnings









$

255


Interest expense, net of capitalized interest









93


Income taxes(1)









(15)


Net contribution to earnings

$

126



$

36



$

213



$

(42)



$

333


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

—



—



—



17



17


Interest income and other

—



—



—



(13)



(13)


Operating income

126



36



213



(38)



337


Depreciation, depletion and amortization

80



4



37



1



122


Basis of real estate sold

—



46



—



—



46


Adjusted EBITDA

$

206



$

86



$

250



$

(37)



$

505



(1) Income taxes include a special item consisting of a $41 million tax benefit related to our pension contribution.

 

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

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 included in operating income(1)(2)(3)

(99)



—



41



(28)



(86)


Adjusted EBITDA

$

252



$

87



$

258



$

(46)



$

551



(1) Operating income for Timberlands include a pre-tax special item consisting of a $99 million gain on the sale of Southern timberlands.

(2) Operating income for Wood Products include pre-tax special items consisting of $50 million of product remediation charges and a $9 million benefit from an adjustment to accrued softwood lumber countervailing and antidumping duties.

(3) Operating income for Unallocated Items include pre-tax special items consisting of $42 million for environmental remediation insurance recoveries and $14 million for Plum Creek merger-related costs.

 

Weyerhaeuser Company








Exhibit 99.2

Q4.2018 Analyst Package









Preliminary results (unaudited)






















Consolidated Statement of Operations
















Q1


Q2


Q3


Q4


Year-to-Date

in millions

Mar 31,
2018


Jun 30,
2018


Sep 30,
2018


Dec 31,
2018


Dec 31,
2017


Dec 31,
2018


Dec 31,
2017

Net sales

$

1,865



$

2,065



$

1,910



$

1,636



$

1,823



$

7,476



$

7,196


Costs of sales

1,348



1,447



1,452



1,345



1,316



5,592



5,298


Gross margin

517



618



458



291



507



1,884



1,898


Selling expenses

23



23



20



22



21



88



87


General and administrative expenses

78



80



78



82



72



318



310


Research and development expenses

2



2



2



2



2



8



14


Charges for integration and restructuring, closures and asset impairments

2



—



—



—



16



2



194


Charges (recoveries) for product remediation, net

(20)



20



—



—



50



—



290


Other operating costs (income), net

28



17



21



8



(130)



74



(128)


Operating income

404



476



337



177



476



1,394



1,131


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

(24)



(13)



(17)



(218)



(16)



(272)



(62)


Interest income and other

12



11



13



24



10



60



40


Interest expense, net of capitalized interest

(93)



(92)



(93)



(97)



(96)



(375)



(393)


Earnings (loss) before income taxes

299



382



240



(114)



374



807



716


Income taxes

(30)



(65)



15



21



(103)



(59)



(134)


Net earnings (loss)

$

269



$

317



$

255



$

(93)



$

271



$

748



$

582




Per Share Information



Q1


Q2


Q3


Q4


Year-to-Date


Mar 31,
2018


Jun 30,
2018


Sep 30,
2018


Dec 31,
2018


Dec 31,
2017


Dec 31,
2018


Dec 31,
2017

Earnings (loss) per share, basic and diluted

$

0.35



$

0.42



$

0.34



$

(0.12)



$

0.36



$

0.99



$

0.77


Dividends paid per common share

$

0.32



$

0.32



$

0.34



$

0.34



$

0.32



$

1.32



$

1.25


Weighted average shares outstanding (in thousands):














Basic

756,815



757,829



754,986



748,694



755,409



754,556



753,085


Diluted

759,462



760,533



757,389



750,025



758,463



756,827



756,666


Common shares outstanding at end of period (in thousands)

756,700



757,646



749,199



746,391



755,223



746,391



755,223
















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


Q1


Q2


Q3


Q4


Year-to-Date

in millions

Mar 31,
2018


Jun 30,
2018


Sep 30,
2018


Dec 31,
2018


Dec 31,
2017


Dec 31,
2018


Dec 31,
2017

Net earnings (loss)

$

269



$

317



$

255



$

(93)



$

271



$

748



$

582


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

24



13



17



218



16



272



62


Interest income and other

(12)



(11)



(13)



(24)



(10)



(60)



(40)


Interest expense, net of capitalized interest

93



92



93



97



96



375



393


Income taxes

30



65



(15)



(21)



103



59



134


Operating income

404



476



337



177



476



1,394



1,131


Depreciation, depletion and amortization

120



119



122



125



127



486



521


Basis of real estate sold

12



22



46



44



33



124



81


Unallocated pension service costs

—



—



—



—



1



—



4


Special items included in operating income

8



20



—



—



(86)



28



343


Adjusted EBITDA*

$

544



$

637



$

505



$

346



$

551



$

2,032



$

2,080
















*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. 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


Q4.2018 Analyst Package












Preliminary results (unaudited)













Special Items Included in Net Earnings (Income Tax Affected)


















Q1


Q2


Q3


Q4


Year-to-Date


in millions

Mar 31,
2018


Jun 30,
2018


Sep 30,
2018


Dec 31,
2018


Dec 31,
2017


Dec 31,
2018


Dec 31,
2017


Net earnings (loss)

$

269



$

317



$

255



$

(93)



$

271



$

748



$

582



Plum Creek merger and integration-related costs

—



—



—



—



12



—



27



Restructuring, impairments and other charges

—



—



—



—



—



—



151



Gain on sale of timberlands and other nonstrategic assets

—



—



—



(10)



(99)



(10)



(99)



Environmental remediation charges (recoveries)

21



—



—



—



(26)



21



(26)



Product remediation charges (recoveries), net

(15)



15



—



—



31



—



180



Countervailing and antidumping duties charges (credits)(1)

—



—



—



—



(7)



—



5



Tax adjustments(2)

—



—



(41)



21



52



(20)



52



Pension settlement charge(3)

—



—



—



152



—



152



—



Net earnings before special items

$

275



$

332



$

214



$

70



$

234



$

891



$

872

















































Q1


Q2


Q3


Q4


Year-to-Date



Mar 31,
2018


Jun 30,
2018


Sep 30,
2018


Dec 31,
2018


Dec 31,
2017


Dec 31,
2018


Dec 31,
2017


Net earnings (loss) per diluted share

$

0.35



$

0.42



$

0.34



$

(0.12)



$

0.36



$

0.99



$

0.77



Plum Creek merger and integration-related costs

—



—



—



—



0.02



—



0.03



Restructuring, impairments and other charges

—



—



—



—



—



—



0.21



Gain on sale of timberlands and other nonstrategic assets

—



—



—



(0.01)



(0.14)



(0.01)



(0.14)



Environmental remediation charges (recoveries)

0.03



—



—



—



(0.03)



0.03



(0.03)



Product remediation charges (recoveries), net

(0.02)



0.02



—



—



0.04



—



0.23



Countervailing and antidumping duties charges (credits)(1)

—



—



—



—



(0.01)



—



0.01



Tax adjustments(2)

—



—



(0.06)



0.03



0.07



(0.03)



0.07



Pension settlement charge(3)

—



—



—



0.20



—



0.20



—



Net earnings per diluted share before special items

$

0.36



$

0.44



$

0.28



$

0.10



$

0.31



$

1.18



$

1.15


















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


(2) During third quarter 2018, we recorded a tax benefit related to our contribution to our U.S. qualified pension plan. During fourth quarter 2018 and 2017, we recorded tax adjustment charges of $21 million and $52 million, respectively.


(3) During fourth quarter 2018, we recorded a $200 million non-cash pre-tax settlement charge related to our U.S. qualified pension plan lump sum offer.

 








Selected Total Company Items





Q1


Q2


Q3


Q4


Year-to-Date


in millions

Mar 31,
2018


Jun 30,
2018


Sep 30,
2018


Dec 31,
2018


Dec 31,
2017


Dec 31,
2018


Dec 31,
2017


Pension and postretirement costs:















Pension and postretirement service cost

$

10



$

8



$

10



$

9



$

9



$

37



$

35



Non-operating pension and other postretirement benefit costs

24



13



17



218



16



272



62



Total company pension and postretirement costs

$

34



$

21



$

27



$

227



$

25



$

309



$

97



















 

Weyerhaeuser Company








Q4.2018 Analyst Package







Preliminary results (unaudited)










Consolidated Balance Sheet












March 31,
 2018


June 30,
 2018


September 30,
 2018


December 31,
 2018


December 31,
 2017

in millions



ASSETS










Current assets:










Cash and cash equivalents

$

598



$

901



$

348



$

334



$

824


Receivables, less discounts and allowances

481



491



444



337



396


Receivables for taxes

24



23



140



137



14


Inventories

445



414



389



389



383


Prepaid expenses and other current assets

118



146



140



152



98


Current restricted financial investments held by variable interest entities

253



253



253



253



—


Total current assets

1,919



2,228



1,714



1,602



1,715


Property and equipment, net

1,573



1,597



1,672



1,857



1,618


Construction in progress

275



282



255



136



225


Timber and timberlands at cost, less depletion

12,888



12,790



12,727



12,671



12,954


Minerals and mineral rights, less depletion

306



302



297



294



308


Deferred tax assets

244



168



71



15



268


Other assets

318



319



329



312



356


Restricted financial investments held by variable interest entities

362



362



362



362



615


Total assets

$

17,885



$

18,048



$

17,427



$

17,249



$

18,059












LIABILITIES AND EQUITY










Current liabilities:










Current maturities of long-term debt

$

—



$

—



$

—



$

500



$

62


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

209



209



511



302



209


Borrowings on line of credit

—



—



—



425



—


Accounts payable

245



270



271



222



249


Accrued liabilities

457



543



491



490



645


Total current liabilities

911



1,022



1,273



1,939



1,165


Long-term debt

5,928



5,924



5,921



5,419



5,930


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

302



302



—



—



302


Deferred tax liabilities

—



—



—



43



—


Deferred pension and other postretirement benefits

1,454



1,224



885



527



1,487


Other liabilities

299



295



291



275



276


Total liabilities

8,894



8,767



8,370



8,203



9,160


Total equity

8,991



9,281



9,057



9,046



8,899


Total liabilities and equity

$

17,885



$

18,048



$

17,427



$

17,249



$

18,059



 

Weyerhaeuser Company









Q4.2018 Analyst Package








Preliminary results (unaudited)











Consolidated Statement of Cash Flows












Q1


Q2


Q3


Q4


Year-to-Date

in millions

Mar 31,
2018


Jun 30,
2018


Sep 30,
2018


Dec 31,
2018


Dec 31,
2017


Dec 31,
2018


Dec 31,
2017

Cash flows from operations:














Net earnings (loss)

$

269



$

317



$

255



$

(93)



$

271



$

748



$

582


Noncash charges (credits) to income:














Depreciation, depletion and amortization

120



119



122



125



127



486



521


Basis of real estate sold

12



22



46



44



33



124



81


Deferred income taxes, net

10



15



86



(39)



35



72



44


Pension and other postretirement benefits

34



21



27



227



25



309



97


Share-based compensation expense

9



9



13



11



11



42



40


Charges for impairment of assets

1



—



—



—



1



1



154


Net gains on disposition of discontinued and other operations

—



—



—



—



—



—



(1)


Net gains on sale of nonstrategic assets

(2)



—



—



(14)



(2)



(16)



(16)


Net gains on sale of southern timberlands

—



—



—



—



(99)



—



(99)


Change in:














Receivables, less allowances

(83)



(18)



46



117



78



62



(35)


Receivables and payables for taxes

5



10



(124)



6



66



(103)



(50)


Inventories

(66)



30



27



(5)



(43)



(14)



(39)


Prepaid expenses and other current assets

(5)



4



(6)



(11)



(3)



(18)



(12)


Accounts payable and accrued liabilities

(173)



103



(63)



(21)



(78)



(154)



106


Pension and postretirement contributions and payments

(16)



(16)



(323)



(26)



(19)



(381)



(78)


Other

21



(19)



(19)



(29)



(49)



(46)



(94)


Net cash from (used in) operations

$

136



$

597



$

87



$

292



$

354



$

1,112



$

1,201


Cash flows from investing activities:














Capital expenditures for property and equipment

 

$

(61)



$

(83)



$

(94)



$

(130)



$

(145)



$

(368)



$

(358)


Capital expenditures for timberlands reforestation

(20)



(14)



(11)



(14)



(15)



(59)



(61)


Proceeds from disposition of discontinued and other operations

—



—



—



—



—



—



403


Proceeds from sale of nonstrategic assets

2



—



—



2



6



4



26


Proceeds from sale of southern timberlands

—



—



—



—



203



—



203


Proceeds from redemption of ownership in related party

—



—



—



—



108



—



108


Other

3



24



(10)



(34)



18



(17)



46


Cash from (used in) investing activities

$

(76)



$

(73)



$

(115)



$

(176)



$

175



$

(440)



$

367


Cash flows from financing activities:














Cash dividends on common shares

$

(242)



$

(243)



$

(256)



$

(254)



$

(242)



$

(995)



$

(941)


Proceeds from issuance of long-term debt

—



—



—



—



—



—



225


Payments on long-term debt

(62)



—



—



—



—



(62)



(831)


Proceeds from borrowing on line of credit

—



—



—



425



—



425



100


Payments on line of credit

—



—



—



—



—



—



(100)


Payments on debt held by variable interest entities

—



—



—



(209)



—



(209)



—


Proceeds from exercise of stock options

25



23



4



—



39



52



128


Repurchase of common shares

—



—



(273)



(93)



—



(366)



—


Other

(7)



(1)



—



1



1



(7)



(1)


Cash from (used in) financing activities

$

(286)



$

(221)



$

(525)



$

(130)



$

(202)



$

(1,162)



$

(1,420)
















Net change in cash and cash equivalents

$

(226)



$

303



$

(553)



$

(14)



$

327



$

(490)



$

148


Cash and cash equivalents at beginning of period

824



598



901



348



497



824



676


Cash and cash equivalents at end of period

$

598



$

901



$

348



$

334



$

824



$

334



$

824
















Cash paid (received) during the year for:














Interest, net of amount capitalized

$

105



$

67



$

113



$

73



$

66



$

358



$

381


Income taxes

$

17



$

41



$

22



$

15



$

40



$

95



$

169



 

Weyerhaeuser Company







Timberlands Segment


Q4.2018 Analyst Package












Preliminary results (unaudited)











Segment Statement of Operations


















in millions


Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017


Sales to unaffiliated customers

$

505



$

482



$

468



$

460



$

496



$

1,915



$

1,942



Intersegment sales

228



185



185



204



218



802



762



Total net sales

733



667



653



664



714



2,717



2,704



Costs of sales

526



485



505



536



531



2,052



2,043



Gross margin

207



182



148



128



183



665



661



Selling expenses

1



—



1



—



1



2



4



General and administrative expenses

23



25



23



25



19



96



90



Research and development expenses

2



1



2



1



2



6



12



Charges for integration and restructuring, closures and asset impairments

—



—



—



—



—



—



147



Other operating costs (income), net

(8)



(5)



(4)



(5)



(104)



(22)



(124)



Operating income and Net contribution to earnings

$

189



$

161



$

126



$

107



$

265



$

583



$

532



















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


















in millions


Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017


Operating income

$

189



$

161



$

126



$

107



$

265



$

583



$

532



Depreciation, depletion and amortization

79



79



80



81



86



319



356



Special items

—



—



—



—



(99)



—



48



Adjusted EBITDA*

$

268



$

240



$

206



$

188



$

252



$

902



$

936



* 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


Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017


Restructuring, impairments and other charges

$

—



$

—



$

—



$

—



$

—



$

—



$

(147)



Gain on sale of timberlands and other nonstrategic assets

$

—



$

—



$

—



$

—



$

99



$

—



$

99



Total


$

—



$

—



$

—



$

—



$

99



$

—



$

(48)



















Selected Segment Items


















in millions


Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017


Total decrease (increase) in working capital(1)

$

(40)



$

70



$

(32)



$

(7)



$

(15)



$

(9)



$

5



Cash spent for capital expenditures

$

(28)



$

(29)



$

(25)



$

(35)



$

(36)



$

(117)



$

(115)



(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)



















Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017


Third Party
Net Sales
(millions)

Delivered logs:















West

$

266



$

262



$

238



$

221



$

242



$

987



$

915



South

157



158



157



153



165



625



616



North

25



20



25



29



27



99



95



Other

14



7



9



11



11



41



59



Total delivered logs

462



447



429



414



445



1,752



1,685



Stumpage and pay-as-cut timber

15



11



13



20



21



59



73



Products from international operations

—



—



—



—



—



—



63



Recreational and other lease revenue

14



15



15



15



14



59



59



Other revenue

14



9



11



11



16



45



62



Total

$

505



$

482



$

468



$

460



$

496



$

1,915



$

1,942



Delivered Logs
Third Party Sales
Realizations (per ton)

West

$

131.59



$

132.24



$

125.67



$

112.58



$

121.41



$

125.59



$

111.58



South

$

34.83



$

34.55



$

34.88



$

34.38



$

34.53



$

34.66



$

34.43



North

$

60.79



$

64.92



$

60.97



$

57.27



$

60.77



$

60.55



$

60.38



Delivered Logs
Third Party Sales
Volumes
(tons, thousands)

West

2,019



1,984



1,897



1,958



1,992



7,858



8,202



South

4,510



4,560



4,521



4,417



4,790



18,008



17,895



North

404



313



414



497



439



1,628



1,574



Other

317



81



154



204



232



756



1,458



Fee Harvest Volumes
(tons, thousands)

West

2,443



2,360



2,305



2,463



2,544



9,571



10,083



South

6,751



6,630



6,478



6,849



7,350



26,708



27,149



North

549



423



537



620



635



2,129



2,205



Other

—



—



—



—



—



—



1,384



(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 formerly 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

Q4.2018 Analyst Package











Preliminary results (unaudited)

























Segment Statement of Operations
















in millions


Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017

Net sales

$

51



$

58



$

96



$

102



$

100



$

307



$

281


Costs of sales

19



30



54



52



43



155



110


Gross margin

32



28



42



50



57



152



171


General and administrative expenses

7



6



6



7



6



26



26


Other operating costs (income), net

—



—



—



—



1



—



—


Operating income

25



22



36



43



50



126



145


Interest income and other

—



—



—



1



—



1



1


Net contribution to earnings

$

25



$

22



$

36



$

44



$

50



$

127



$

146

















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
















in millions


Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017

Operating income


$

25



$

22



$

36



$

43



$

50



$

126



$

145


Depreciation, depletion and amortization

4



3



4



3



4



14



15


Basis of real estate sold

12



22



46



44



33



124



81


Adjusted EBITDA*

$

41



$

47



$

86



$

90



$

87



$

264



$

241


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


Selected Segment Items
















in millions


Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017

Cash spent for capital expenditures

$

—



$

—



$

—



$

—



$

—



$

—



$

(2)

















Segment Statistics


















Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017


Net Sales
(millions)

Real Estate

$

34



$

38



$

76



$

81



$

80



$

229



$

208


Energy and Natural Resources

17



20



20



21



20



78



73


Total

$

51



$

58



$

96



$

102



$

100



$

307



$

281


Acres sold

Real Estate

21,771



16,290



61,681



31,833



38,226



131,575



97,235


Price per acre

Real Estate

$

1,539



$

2,258



$

1,209



$

2,479



$

2,076



$

1,701



$

2,079


 


Weyerhaeuser Company








Wood Products Segment

Q4.2018 Analyst Package











Preliminary results (unaudited)

























Segment Statement of Operations
















in millions


Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017

Net sales

$

1,309



$

1,525



$

1,346



$

1,075



$

1,228



$

5,255



$

4,974


Costs of sales

1,005



1,119



1,071



991



947



4,186



3,880


Gross margin

304



406



275



84



281



1,069



1,094


Selling expenses

21



22



18



20



20



81



80


General and administrative expenses

34



31



32



33



32



130



126


Research and development expenses

—



1



—



1



—



2



2


Charges for integration and restructuring, closures and asset impairments

2



—



—



—



2



2



13


Charges (recoveries) for product remediation, net

(20)



20



—



—



50



—



290


Other operating costs (income), net

(3)



3



12



4



(3)



16



14


Operating income and Net contribution to earnings

$

270



$

329



$

213



$

26



$

180



$

838



$

569

















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
















in millions


Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017

Operating income

$

270



$

329



$

213



$

26



$

180



$

838



$

569


Depreciation, depletion and amortization

36



36



37



40



37



149



145


Special items

(20)



20



—



—



41



—



303


Adjusted EBITDA*

$

286



$

385



$

250



$

66



$

258



$

987



$

1,017


* 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


Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017

Countervailing and antidumping duties (charges) credits(1)

$

—



$

—



$

—



$

—



$

9



$

—



$

(7)


Restructuring, impairments and other charges

—



—



—



—



—



—



(6)


Product remediation (charges) recoveries, net

20



(20)



—



—



(50)



—



(290)


Total


$

20



$

(20)



$

—



$

—



$

(41)



$

—



$

(303)


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

 
















Selected Segment Items
















in millions


Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017

Total decrease (increase) in working capital(2)

$

(226)



$

3



$

71



$

83



$

(81)



$

(69)



$

60


Cash spent for capital expenditures

$

(52)



$

(68)



$

(79)



$

(107)



$

(123)



$

(306)



$

(299)


(2) 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

Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017

Structural Lumber
(board feet)

Third party net sales

$

569



$

681



$

581



$

427



$

517



$

2,258



$

2,058


Third party sales realizations

$

498



$

541



$

491



$

388



$

466



$

482



$

442


Third party sales volumes(3)

1,140



1,261



1,184



1,099



1,110



4,684



4,658


Production volumes

1,160



1,180



1,106



1,095



1,118



4,541



4,509


Engineered Solid
Section
(cubic feet)

Third party net sales

$

129



$

139



$

132



$

121



$

122



$

521



$

500


Third party sales realizations

$

2,088



$

2,156



$

2,208



$

2,139



$

2,076



$

2,148



$

1,995


Third party sales volumes(3)

6.2



6.4



6.0



5.7



5.9



24.3



25.1


Production volumes

6.3



6.4



6.3



5.3



5.8



24.3



25.1


Engineered
I-joists
(lineal feet)

Third party net sales

$

78



$

92



$

91



$

75



$

85



$

336



$

336


Third party sales realizations

$

1,585



$

1,630



$

1,668



$

1,696



$

1,561



$

1,643



$

1,524


Third party sales volumes(3)

49



57



54



44



54



204



220


Production volumes

56



52



46



37



52



191



213


Oriented Strand
Board
(square feet 3/8")

Third party net sales

$

232



$

277



$

215



$

167



$

233



$

891



$

904


Third party sales realizations

$

314



$

367



$

321



$

252



$

335



$

315



$

304


Third party sales volumes(3)

739



754



669



665



697



2,827



2,971


Production volumes

734



747



665



691



739



2,837



2,995


Softwood Plywood

(square feet 3/8")

Third party net sales

$

50



$

55



$

53



$

42



$

40



$

200



$

176


Third party sales realizations

$

438



$

461



$

439



$

396



$

417



$

435



$

389


Third party sales volumes(3)

115



118



122



104



95



459



453


Production volumes

97



105



106



96



86



404



370


Medium Density Fiberboard

(square feet 3/4")

Third party net sales

$

43



$

47



$

48



$

39



$

37



$

177



$

183


Third party sales realizations

$

839



$

839



$

828



$

835



$

829



$

835



$

822


Third party sales volumes(3)

51



55



59



47



45



212



222


Production volumes

50



57



61



52



50



220



232


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


 

Weyerhaeuser Company








Unallocated Items

Q4.2018 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, interest income and other, and the elimination of intersegment profit in inventory and LIFO.















Contribution to Earnings















in millions

Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017

Unallocated corporate function and variable compensation expenses

$

(18)



$

(19)



$

(19)



$

(28)



$

(18)



$

(84)



$

(73)


Liability classified share-based compensation

—



(2)



4



8



(2)



10



(9)


Foreign exchange gains (loss)

(2)



2



(2)



5



1



3



1


Elimination of intersegment profit in inventory and LIFO

(21)



3



—



24



(14)



6



(20)


Charges for integration and restructuring, closures and asset impairments

—



—



—



—



(14)



—



(34)


Other

(39)



(20)



(21)



(8)



28



(88)



20


Operating income (loss)

(80)



(36)



(38)



1



(19)



(153)



(115)


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

(24)



(13)



(17)



(218)



(16)



(272)



(62)


Interest income and other

12



11



13



23



10



59



39


Net contribution to earnings (loss)

$

(92)



$

(38)



$

(42)



$

(194)



$

(25)



$

(366)



$

(138)
















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















in millions

Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017

Operating income (loss)

$

(80)



$

(36)



$

(38)



$

1



$

(19)



$

(153)



$

(115)


Depreciation, depletion and amortization

1



1



1



1



—



4



5


Unallocated pension service costs

—



—



—



—



1



—



4


Special items

28



—



—



—



(28)



28



(8)


Adjusted EBITDA*

$

(51)



$

(35)



$

(37)



$

2



$

(46)



$

(121)



$

(114)


* 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

Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017

Plum Creek merger and integration-related costs

$

—



$

—



$

—



$

—



$

(14)



$

—



$

(34)


Environmental remediation insurance (charges) recoveries

(28)



—



—



—



42



(28)



42


Special items included in operating income (loss)

(28)



—



—



—



28



(28)



8


Pension settlement charge

—



—



—



(200)



—



(200)



—


Gain on sale of nonstrategic assets

—



—



—



13



—



13



—


Special items included in net contribution to earnings (loss)

$

(28)



$

—



$

—



$

(187)



$

28



$

(215)



$

8
















Unallocated Selected Items















in millions

Q1.2018


Q2.2018


Q3.2018


Q4.2018


Q4.2017


YTD.2018


YTD.2017

Cash spent for capital expenditures

$

(1)



$

—



$

(1)



$

(2)



$

(1)



$

(4)



$

(3)


 

SOURCE Weyerhaeuser Company

https://investor.weyerhaeuser.com/2019-02-01-Weyerhaeuser-reports-fourth-quarter-full-year-results