News Room

Print News Release

Weyerhaeuser Reports Third Quarter Results

-- Completed divestiture of homebuilding business with nearly $1 billion gain

-- Increased quarterly dividend by 32 percent and repurchased $130 million of common shares

-- 31 percent increase in earnings from continuing operations before special items compared with prior year

Oct 31, 2014

FEDERAL WAY, Wash., Oct. 31, 2014 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported third quarter net earnings to common shareholders of $1,153 million, or $2.15 per diluted share, on net sales from continuing operations of $1.9 billion. This compares with net earnings of $157 million, or 27 cents per diluted share, on net sales from continuing operations of $1.9 billion for the same period last year.

Weyerhaeuser Company logo

Third quarter earnings include $966 million from discontinued operations related to the divestiture of Weyerhaeuser Real Estate Company and $9 million from special items. Excluding these items, the company reported net earnings of $178 million, or 33 cents per diluted share for the third quarter. This compares with net earnings from continuing operations before special items of $136 million for the same period last year and $234 million for second quarter 2014.

"We increased our quarterly dividend by 32 percent and repurchased $130 million of common shares in the third quarter, demonstrating our strong commitment to returning cash to shareholders," said Doyle Simons, president and chief executive officer. "Our relentless focus on operational excellence resulted in another very good quarter for earnings and cash flow generation, as we continue to drive sustainable performance improvements in each of our businesses."





WEYERHAEUSER FINANCIAL HIGHLIGHTS

2014

2014

2013

(millions, except per share data)

2Q 

3Q 

3Q 

Net sales from continuing operations

$1,964

$1,915

$1,857

Net earnings attributable to Weyerhaeuser common shareholders(1)

$280

$1,153

$157

Weighted average shares outstanding, diluted(2)

590

536

587

Earnings per diluted share

$0.47

$2.15

$0.27

Earnings per diluted share from continuing operations

$0.43

$0.35

$0.23

Net earnings from continuing operations before special items(3)

$234

$178

$136

Earnings per diluted share from continuing operations before special items

$0.40

$0.33

$0.23

Net change in cash and cash equivalents(4)

$68

$775

($966)

Cash and cash equivalents at end of period(5)

$845

$1,620

$1,392

(1) Includes net earnings from discontinued operations.

(2) Weyerhaeuser's weighted average common shares outstanding decreased during the third quarter of 2014 due to retirement of approximately 59 million shares tendered under the exchange offer associated with the divestiture of Weyerhaeuser Real Estate Company and repurchase of approximately 4 million common shares. At the end of the third quarter the company had approximately 525 million common shares outstanding.

(3) Special items for the second and third quarters of 2014 include gains on a postretirement plan amendment and restructuring charges related to the company's SG&A cost reduction initiative.

(4) Net change in cash and equivalents excludes discontinued operations for all quarters. Third quarter 2014 includes $707 million related to the divestiture of Weyerhaeuser Real Estate Company.

(5) Cash and cash equivalents excludes discontinued operations for all quarters. Third quarter 2013 includes cash and cash equivalents designated for the purchase of Longview Timber LLC and the repayment of their acquired debt.





TIMBERLANDS




FINANCIAL HIGHLIGHTS (millions)

2Q 2014

3Q 2014

Change

Net sales

$397

$364

($33)

Contribution to pre-tax earnings

$170

$136

($34)

3Q 2014 Performance - Sales volumes and realizations for Western logs declined due to seasonally softer  domestic market conditions and reduced Chinese demand. In the South, log sales volumes increased and realizations improved slightly.

Earnings from disposition of non-strategic timberlands decreased by $5 million compared with the second quarter.

4Q 2014 Outlook - Weyerhaeuser anticipates lower earnings from the Timberlands segment in the fourth quarter, primarily due to reduced earnings from disposition of non-strategic timberlands. In the West, the company expects improved log realizations and increased road maintenance costs. In the South, Weyerhaeuser anticipates higher silviculture costs.



WOOD PRODUCTS


FINANCIAL HIGHLIGHTS (millions)

2Q 2014

3Q 2014

Change

Net sales

$1,077

$1,048

($29)

Contribution to pre-tax earnings

$102

$105

$3

3Q 2014 Performance - Average realizations for lumber and engineered wood products increased, and Western log costs declined. These improvements were largely offset by lower realizations for oriented strand board.

4Q 2014 Outlook - Weyerhaeuser expects earnings from the Wood Products segment in the fourth quarter to be significantly lower than the third quarter, and comparable to fourth quarter 2013. The company anticipates weaker realizations in lumber and oriented strand board, and seasonally lower sales volumes across all product lines.



CELLULOSE FIBERS


FINANCIAL HIGHLIGHTS (millions)

2Q 2014

3Q 2014

Change

Net sales

$490

$503

$13

Contribution to pre-tax earnings

$91

$59

($32)

3Q 2014 Performance - Maintenance costs increased as expected due to an extended planned outage at the company's liquid packaging board facility and additional maintenance outage days within the pulp mill system. These costs were partially offset by higher average price realizations for pulp and liquid packaging board and improved sales volumes.

4Q 2014 Outlook - Weyerhaeuser expects significantly higher earnings from the Cellulose Fibers segment in the fourth quarter due to reduced maintenance expense.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control nearly 7 million acres of timberlands, primarily in the U.S., and manage another 14 million acres 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 and cellulose fibers products. Our company is a real estate investment trust. In 2013, our continuing operations generated $7.3 billion in sales and employed approximately 13,000 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 31 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 31.

To join the conference call from within North America, dial 877-296-9413 (access code: 23991084) at least 15 minutes prior to the call. Those calling from outside North America should dial 706-679-2458 (access code: 23991084). Replays will be available for two weeks at 855-859-2056 (access code: 23991084) from within North America and at 404-537-3406 (access code: 23991084) 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. These statements are based on various assumptions and may not be accurate because of risks and uncertainties surrounding these assumptions. Factors listed below, as well as other factors, may cause actual results to differ significantly from these forward-looking statements. There is no guarantee that any of the events anticipated by these forward-looking statements will occur. If any of the events occur, there is no guarantee what effect they will have on company operations or financial condition. The company will not update these forward-looking statements after the date of this news release.

Some forward-looking statements discuss the company's plans, strategies and intentions. They use words such as "expects," "may," "will," "believes," "should," "approximately," "anticipates," "estimates," and "plans."  In addition, these words may use the positive or negative or other variations of those terms.

This release contains forward-looking statements regarding the company's expectations during the fourth quarter of 2014, including with respect to earnings, log realizations, road maintenance and silviculture costs, dispositions of non-strategic timberlands, sales volumes across the Wood Products product lines, realizations in lumber and oriented strand board, and maintenance expenses in Cellulose Fibers.

Major risks, uncertainties and assumptions that affect the company's businesses and may cause actual results to differ from these forward-looking statements, include, but are not limited to:

  • the effect of general economic conditions, including employment rates, housing starts, interest rate levels, availability of financing for home mortgages, and strength of the U.S. dollar;
  • market demand for the company's products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions;
  • performance of the company's manufacturing operations, including maintenance requirements;
  • the level of competition from domestic and foreign producers;
  • the successful execution of internal performance plans, including restructurings and cost reduction initiatives;
  • raw material prices;
  • energy prices;
  • the effect of weather;
  • the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;
  • transportation 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 company stock on charges for stock-based compensation;
  • changes in accounting principles; and
  • other factors described under "Risk Factors" in the Company's annual report on Form 10-K and quarterly reports on Form 10-Q.

The company also is a large exporter and is affected by changes in economic activity in Europe and Asia, particularly Japan and China. It is affected by changes in currency exchange rates, particularly the relative value of the U.S. dollar to the euro and the Canadian dollar, and the relative value of the euro and the yen. Restrictions on international trade or tariffs imposed on imports also may affect the company.




For more information contact:


Analysts - Beth Baum or Denise Merle (253) 924-2058



Media - Anthony Chavez (253) 924-7148







Weyerhaeuser Company


Exhibit 99.2

Q3.2014 Analyst Package

Preliminary results, subject to audit

Consolidated Statement of Operations











in millions

Q2


Q3


Year-to-date


June 30, 2014


September 30,
2014


September 30,
2013


September 30,
2014


September 30,
2013

Net Sales

$ 1,964


$  1,915


$  1,857


$  5,615


$  5,486

Cost of products sold

1,499


1,504


1,479


4,364


4,304

Gross margin

465


411


378


1,251


1,182

Selling expenses

27


28


32


83


96

General and administrative expenses

88


73


98


249


299

Research and development expenses

7


5


8


19


23

Charges for restructuring, closures and impairments

8


10


1


37


7

Other operating income, net

(65)


(23)


(4)


(163)


(32)

Operating income

400


318


243


1,026


789

Interest income and other

11


7


21


27


39

Interest expense, net of capitalized interest

(83)


(88)


(94)


(254)


(256)

Earnings from continuing operations before income taxes

328


237


170


799


572

Income taxes

(59)


(39)


(24)


(148)


(99)

Earnings from continuing operations

269


198


146


651


473

Earnings from discontinued operations, net of income taxes

22


966


21


998


36

Net earnings

291


1,164


167


1,649


509

Dividends on preference shares

(11)


(11)


(10)


(33)


(12)

Net earnings attributable to Weyerhaeuser common shareholders

$     280


$  1,153


$      157


$  1,616


$      497


Per Share Information



Q2


Q3


Year-to-date


June 30, 2014


September 30, 2014


September 30, 2013


September 30, 2014


September 30, 2013

Earnings per share attributable to Weyerhaeuser common shareholders, basic:










Continuing operations

$     0.44


$      0.35


$      0.23


$      1.09


$      0.83

Discontinued operations

0.04


1.82


0.04


1.76


0.06

Net earnings per share

$     0.48


$      2.17


$      0.27


$      2.85


$      0.89

Earnings per share attributable to Weyerhaeuser common shareholders, diluted:










Continuing operations

$     0.43


$      0.35


$      0.23


$      1.08


$      0.82

Discontinued operations

0.04


1.80


0.04


1.75


0.06

Net earnings per share

$     0.47


$      2.15


$      0.27


$      2.83


$      0.88

Dividends paid per common share

$     0.22


$      0.29


$      0.22


$      0.73


$      0.59

Weighted average shares outstanding (in thousands):










Basic

586,061


531,913


582,828


567,436


560,505

Diluted

589,766


536,012


587,179


571,503


565,383

Common shares outstanding at end of period (in thousands)

586,698


525,485


582,578


525,485


582,578











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











in millions

Q2


Q3


Year-to-date


June 30,
2014


September 30, 2014


September 30, 2013


September 30, 2014


September 30, 2013

Net earnings

$      291


$    1,164


$       167


$    1,649


$       509

Earnings from discontinued operations, net of income taxes

(22)


(966)


(21)


(998)


(36)

Interest income and other

(11)


(7)


(21)


(27)


(39)

Interest expense, net of capitalized interest

83


88


94


254


256

Income taxes

59


39


24


148


99

Operating income

400


318


243


1,026


789

Depreciation, depletion and amortization

122


123


116


368


333

Non-operating pension and postretirement costs (credits)

(11)


(12)


11


(33)


31

Special items

(39)


(15)



(103)


Adjusted EBITDA*

$     472


$      414


$      370


$  1,258


$  1,153

* Non-GAAP measure - see page 8 for definition.









Weyerhaeuser Company

Q3.2014 Analyst Package

Preliminary results, subject to audit

Consolidated Balance Sheet







in millions

June 30,
2014


September 30,
2014


December 31,
2013


ASSETS






Current assets:






Cash and cash equivalents

$        845


$            1,620


$              830

Receivables, less allowances

590


583


518

Receivables for taxes

37


23


101

Inventories

596


578


542

Prepaid expenses

106


97


117

Deferred tax assets

128


111


130

Current assets of discontinued operations

988



88

Total current assets

3,290


3,012


2,326

Property and equipment, net

2,599


2,534


2,689

Construction in progress

157


215


112

Timber and timberlands at cost, less depletion charged to disposals

6,571


6,546


6,580

Investments in and advances to equity affiliates

188


186


190

Goodwill

40


40


42

Deferred tax assets



5

Other assets

419


292


324

Restricted financial investments held by variable interest entities

615


615


615

Noncurrent assets of discontinued operations

1,827



1,694

Total assets

$ 15,706


$        13,440


$       14,577







LIABILITIES AND EQUITY






Current liabilities:






Notes payable

$          —


$                 —


$                  2

Accounts payable

335


351


343

Accrued liabilities

597


606


629

Current liabilities of discontinued operations

137



154

Total current liabilities

1,069


957


1,128

Long-term debt

4,891


4,891


4,891

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

511


511


511

Deferred income taxes

410


338


285

Deferred pension and other postretirement benefits

422


569


516

Other liabilities

334


318


382

Noncurrent liabilities of discontinued operations

926



32

Total liabilities

8,563


7,584


7,745

Equity:






Total Weyerhaeuser shareholders' interest

7,092


5,856


6,795

Noncontrolling interests

2



3

Noncontrolling interests in discontinued operations

49



34

Total equity

7,143


5,856


6,832

Total liabilities and equity

$ 15,706


$        13,440


$       14,577








Weyerhaeuser Company

Q3.2014 Analyst Package

Preliminary results, subject to audit

Consolidated Statement of Cash Flows











in millions

Q2


Q3


Year-to-date


June 30,
2014


September 30,
2014


September 30,
2013


September 30,
2014


September 30,
2013

Cash flows from operations:










Net earnings

$    291


$          1,164


$             167


$          1,649


$             509

Noncash charges (credits) to income:










Depreciation, depletion and amortization

126


123


120


375


343

Deferred income taxes, net

89


45


24


170


73

Pension and other postretirement benefits

(44)


(13)


27


(104)


79

Share-based compensation expense

11


9


12


29


34

Charges for impairment of assets

1



2


1


5

Net gains on dispositions of assets and operations

(21)


(1,002)


(21)


(1,048)


(42)

Foreign exchange transaction (gains) losses

(12)


13


(2)


15


6

Change in:










Receivables less allowances

(47)


20


8


(28)


(112)

Receivable for taxes

(3)


13


12


77


64

Inventories

34


8


36


(46)


Real estate and land

(35)


(26)


(58)


(133)


(179)

Prepaid expenses

(3)


6


(2)


6


(16)

Accounts payable and accrued liabilities

(17)


21


77


(76)


45

Deposits on land positions and other assets

(4)


7


(1)


15


(11)

Pension and postretirement contributions

(30)


(22)


(35)


(85)


(104)

Other

(14)


(13)


(23)


(33)


(38)

Net cash from operations

322


353


343


784


656











Cash flows from investing activities:










Property and equipment

(83)


(105)


(69)


(239)


(151)

Timberlands reforestation

(11)


(7)


(7)


(32)


(28)

Acquisition of Longview Timber LLC, net of cash acquired



(1,581)



(1,581)

Net proceeds from Real Estate Divestiture, net of cash divested


707



707


Proceeds from sale of assets

1


4


1


24


15

Net proceeds of investments held by special purpose entities





22

Other


25


9


25


5

Cash from investing activities

(93)


624


(1,647)


485


(1,718)











Cash flows from financing activities:










Net proceeds from issuance of common shares



116



897

Net proceeds from issuance of preference shares





669

Net proceeds from issuance of debt



494



494

Net proceeds from issuance of Weyerhaeuser Real Estate Company (WRECO) debt

887




887


Deposit of WRECO debt proceeds into escrow

(887)




(887)


Cash dividends on common shares

(128)


(154)


(128)


(411)


(330)

Cash dividends on preference shares

(11)


(11)



(22)


Change in book overdrafts


(11)


1


(17)


8

Payments on debt



(163)



(340)

Exercises of stock options

39


30


9


84


141

Repurchase of common stock


(123)



(123)


Other

(1)


4


10


5


22

Cash from financing activities

(101)


(265)


339


(484)


1,561











Net change in cash and cash equivalents

128


712


(965)


785


499

Cash and cash equivalents at beginning of period

780


908


2,362


835


898

Cash and cash equivalents at end of period

$    908


$          1,620


$          1,397


$          1,620


$          1,397

Cash paid (received) during the year for:










Interest, net of amount capitalized

$      52


$             100


$             109


$             253


$             275

Income taxes

$        5


$                 5


$                 2


$             (40)


$               (4)

Noncash investing and financing activity:










Acquisition of Longview Timber LLC, debt assumed

$      —


$               —


$          1,070


$               —


$          1,070

Common shares tendered in WRECO divestiture

$      —


$          1,954


$               —


$          1,954


$               —





















Weyerhaeuser Company


Total Company Statistics

Q3.2014 Analyst Package

Preliminary results, subject to audit

Special Items Included in Net Earnings











in millions

Q2


Q3


Year-to-date


June 30,
2014


September 30,
2014


September 30,
2013


September 30,
2014


September 30,
2013

Net earnings attributable to Weyerhaeuser common shareholders

$  280


$        1,153


$            157


$        1,616


$            497

Restructuring, impairments and other charges

5


6



24


Gain on sale of non-strategic asset




(14)


Gain on postretirement plan amendment

(29)


(15)



(73)


Net earnings attributable to Weyerhaeuser common shareholders before special items

256


1,144


157


1,553


497

Earnings from discontinued operations, net of income taxes

(22)


(966)


(21)


(998)


(36)

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

$  234


$            178


$            136


$            555


$            461












Q2


Q3


Year-to-date


June 30, 2014


September 30, 2014


September 30, 2013


September 30, 2014


September 30, 2013

Net earnings per diluted share attributable to Weyerhaeuser common shareholders

$ 0.47


$           2.15


$           0.27


$           2.83


$           0.88

Restructuring, impairments and other charges

0.01


0.01



0.04


Gain on sale of non-strategic asset




(0.02)


Gain on postretirement plan amendment

(0.04)


(0.03)



(0.13)


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

0.44


2.13


0.27


2.72


0.88

Earnings from discontinued operations, net of income taxes

(0.04)


(1.80)


(0.04)


(1.75)


(0.06)

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

$ 0.40


$           0.33


$           0.23


$           0.97


$           0.82


Selected Total Company Items


in millions

Q2


Q3


Year-to-date


June 30, 2014


September 30, 2014


September 30, 2013


September 30, 2014


September 30, 2013

Depreciation, depletion and amortization:










Cost of products sold

$    117


$             117


$             110


$             351


$             315

Selling, general and administrative expenses

5


6


6


17


18

Total depreciation, depletion and amortization

$    122


$             123


$             116


$             368


$             333











Pension and postretirement costs:










Pension and postretirement costs allocated to business segments

$      12


$               11


$               15


$               33


$               42

Pension and postretirement costs (credits) not allocated

(11)


(12)


11


(33)


31

Total company pension and postretirement costs

$        1


$               (1)


$               26


$               —


$               73











Total decrease (increase) in working capital(1)

$      49


$             106


$             138


$             (15)


$             (35)

Cash spent for capital expenditures

$    (92)


$           (112)


$             (71)


$           (267)


$           (170)

(1)Working capital does not include cash balances.
















Weyerhaeuser Company


Timberlands Segment

Q3.2014 Analyst Package

Preliminary results, subject to audit












Segment Statement of Operations












in millions


Q2.2014


Q3.2014


Q3.2013


YTD.2014


YTD.2013

Sales to unaffiliated customers

$      397


$      364


$      353


$    1,138


$       979

Intersegment sales

186


218


194


642


584

Total net sales

583


582


547


1,780


1,563

Cost of products sold

399


432


407


1,262


1,167

Gross margin

184


150


140


518


396

Selling expenses

2


2


3


6


8

General and administrative expenses

23


23


27


72


77

Research and development expenses

3


4


4


11


13

Charges for restructuring, closures and impairments


1



1


2

Other operating income, net

(14)


(16)


(11)


(42)


(37)

Operating income

170


136


117


470


333

Interest income and other



1



3

Net contribution to earnings

$     170


$     136


$     118


$     470


$     336












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












in millions


Q2.2014


Q3.2014


Q3.2013


YTD.2014


YTD.2013

Operating income

$     170


$     136


$     117


$     470


$     333

Depreciation, depletion and amortization

51


51


45


154


115

Adjusted EBITDA*

$     221


$     187


$     162


$     624


$     448

* Non-GAAP measure - see page 8 for definition.





















Selected Segment Items














Q2.2014


Q3.2014


Q3.2013


YTD.2014


YTD.2013

Total decrease (increase) in working capital(1)

$      (15)


$        25


$        31


$       (19)


$        —

Cash spent for capital expenditures

$      (18)


$      (19)


$      (16)


$       (56)


$       (52)

(1)Working capital does not include cash balances.












Segment Statistics













Q2.2014


Q3.2014


Q3.2013


YTD.2014


YTD.2013

Third Party 
Net Sales 
(millions)

Logs:










West

$      261


$      227


$      213


$       745


$       598

South

60


69


66


191


192

Canada

1


5


6


12


15

Total logs

322


301


285


948


805

Chip sales

2


4


2


9


7

Timberlands exchanges

28


17


28


49


44

Higher and better use land sales

7


4


2


14


10

Minerals, oil and gas

8


10


9


25


26

Products from international operations

26


22


24


72


68

Other products

4


6


3


21


19

Total

$      397


$      364


$      353


$    1,138


$       979

Logs
Third Party Sales
Realizations
(per cubic meter)

West

$ 109.13


$ 102.23


$ 104.73


$  108.64


$  108.33

South

$   45.16


$   45.30


$   43.32


$    45.12


$    43.42

Canada

$   38.04


$   37.75


$   38.77


$    36.65


$    37.38

International

$   16.27


$   19.95


$   25.07


$    17.88


$    24.75

Logs
Third Party Sales
Volumes
(cubic meters, thousands)

West

2,390


2,223


2,037


6,859


5,523

South

1,339


1,500


1,514


4,224


4,420

Canada

30


152


141


338


383

International

139


170


100


456


245

Total

3,898


4,045


3,792


11,877


10,571

Logs
Fee Harvest Volumes
(cubic meters, thousands)

West

2,888


2,656


2,305


8,419


6,221

South

2,715


2,950


2,928


8,531


8,589

International

249


232


211


730


575

Total

5,852


5,838


5,444


17,680


15,385















Weyerhaeuser Company


Wood Products Segment

Q3.2014 Analyst Package

Preliminary results, subject to audit












Segment Statement of Operations  












in millions


Q2.2014


Q3.2014


Q3.2013


YTD.2014


YTD.2013

Sales to unaffiliated customers

$      1,077


$      1,048


$      1,030


$      3,023


$      3,083

Intersegment sales

21


20


19


60


55

Total net sales

1,098


1,068


1,049


3,083


3,138

Cost of products sold

939


910


905


2,640


2,559

Gross margin

159


158


144


443


579

Selling expenses

23


22


24


70


74

General and administrative expenses

30


31


37


98


109

Research and development expenses

2



2


3


4

Charges for restructuring, closures and impairments

2



1


2


2

Other operating costs (income), net



1


(1)


(3)

Operating income

102


105


79


271


393

Interest income and other





Net contribution to earnings

$        102


$        105


$          79


$        271


$        393












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












in millions


Q2.2014


Q3.2014


Q3.2013


YTD.2014


YTD.2013

Operating income

$        102


$        105


$          79


$        271


$        393

Depreciation, depletion and amortization

30


30


31


89


93

Adjusted EBITDA*

$        132


$        135


$        110


$        360


$        486

* Non-GAAP measure - see page 8 for definition.














Selected Segment Items














Q2.2014


Q3.2014


Q3.2013


YTD.2014


YTD.2013

Total decrease (increase) in working capital(1)

$           29


$           41


$           74


$         (67)


$         (45)

Cash spent for capital expenditures

$         (38)


$         (56)


$         (26)


$       (112)


$         (52)

(1)Working capital does not include cash balances.














Segment Statistics












in millions, except for third-party sales realizations

Q2.2014


Q3.2014


Q3.2013


YTD.2014


YTD.2013

Structural Lumber
(board feet)

Third party net sales

$         515


$         500


$         480


$      1,442


$      1,433

Third party sales realizations

$         427


$         431


$         404


$         430


$         425

Third party sales volumes(1)

1,206


1,162


1,189


3,357


3,370

Production volumes

1,081


1,049


1,040


3,139


3,114

Outside purchase volumes

82


91


92


251


271

Engineered Solid
Section
(cubic feet)

Third party net sales

$         114


$         104


$           97


$         308


$         263

Third party sales realizations

$      1,976


$      2,031


$      1,963


$      1,989


$      1,913

Third party sales volumes(1)

5.8


5.1


4.9


15.5


13.7

Production volumes

5.7


5.2


4.6


15.8


13.8

Outside purchase volumes

0.5



0.3


2.3


1.6

Engineered
I-joists
(lineal feet)

Third party net sales

$           81


$           74


$           68


$         214


$         184

Third party sales realizations

$      1,470


$      1,540


$      1,428


$      1,489


$      1,364

Third party sales volumes(1)

55


49


48


144


135

Production volumes

55


50


44


149


130

Outside purchase volumes

3


1


2


5


6

Oriented Strand
Board
(square feet 3/8')

Third party net sales

$         159


$         157


$         188


$         464


$         648

Third party sales realizations

$         226


$         215


$         246


$         223


$         309

Third party sales volumes(1)

706


732


762


2,079


2,094

Production volumes

681


717


725


2,055


2,050

Outside purchase volumes

51


52


49


156


173

Softwood Plywood
(square feet 3/8')

Third party net sales

$           35


$           42


$           38


$         107


$         115

Third party sales realizations

$         348


$         381


$         344


$         355


$         364

Third party sales volumes(1)

102


110


108


302


315

Production volumes

60


72


62


191


186

Outside purchase volumes

36


31


40


100


115

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















Weyerhaeuser Company


Cellulose Fibers Segment

Q3.2014 Analyst Package

Preliminary results, subject to audit












Segment Statement of Operations












in millions


Q2.2014


Q3.2014


Q3.2013


YTD.2014


YTD.2013

Total net sales

$            490


$            503


$            474


$        1,454


$        1,424

Cost of products sold

381


427


406


1,198


1,224

Gross margin

109


76


68


256


200

Selling expenses

4


3


5


11


14

General and administrative expenses

20


18


21


58


62

Research and development expenses

2


1


2


5


6

Other operating income, net

(8)


(6)


(6)


(23)


(18)

Operating income

91


60


46


205


136

Interest income and other


(1)


1


(1)


(1)

Net contribution to earnings

$              91


$              59


$              47


$            204


$            135












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












in millions


Q2.2014


Q3.2014


Q3.2013


YTD.2014


YTD.2013

Operating income

$              91


$              60


$              46


$            205


$            136

Depreciation, depletion and amortization

39


39


38


116


116

Adjusted EBITDA*

$            130


$              99


$              84


$            321


$            252

* Non-GAAP measure - see page 8 for definition.














Selected Segment Items














Q2.2014


Q3.2014


Q3.2013


YTD.2014


YTD.2013

Total decrease (increase) in working capital(1)

$             (37)


$               39


$               19


$               33


$               24

Cash spent for capital expenditures

$             (35)


$             (36)


$             (28)


$             (97)


$             (62)

(1)Working capital does not include cash balances.














Segment Statistics














Q2.2014


Q3.2014


Q3.2013


YTD.2014


YTD.2013

Pulp
(air-dry metric tons)

Third party net sales (millions)

$             383


$             408


$             371


$          1,154


$          1,111

Third party sales realizations

$             845


$             858


$             805


$             843


$             799

Third party sales volumes (thousands)

454


474


460


1,368


1,389

Production volumes (thousands)

467


465


457


1,391


1,365

Liquid
Packaging
Board
(tons)

Third party net sales (millions)

$               87


$               80


$               83


$             247


$             254

Third party sales realizations

$          1,165


$          1,185


$          1,082


$          1,157


$          1,080

Third party sales volumes (thousands)

75


68


76


214


235

Production volumes (thousands)

79


57


67


214


222


















Weyerhaeuser Company





Unallocated Items

Q3.2014 Analyst Package

Preliminary results, subject to audit











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 outstanding borrowings and the elimination of intersegment profit in inventory and the LIFO reserve.











Contribution to Earnings











in millions

Q2.2014


Q3.2014


Q3.2013


YTD.2014


YTD.2013

Unallocated corporate function expenses

$             (7)


$             (3)


$             (8)


$           (17)


$           (26)

Unallocated share-based compensation

(6)


1


(1)


(2)


(3)

Unallocated pension & postretirement credits (costs)

56


35


(11)


146


(31)

Foreign exchange gains (losses)

13


(14)


2


(16)


(6)

Elimination of intersegment profit in inventory and LIFO

(1)


12


25


(8)


9

Other

(18)


(14)


(5)


(23)


(16)

Operating income (loss)

37


17


2


80


(73)

Interest income and other

11


8


18


28


37

Net contribution to earnings from continuing operations(1)

$            48


$            25


$            20


$          108


$          (36)

(1)We have reclassified certain results from the prior periods to present the results of operations discontinued in 2014 separately. Our reclassifications had no effect on net earnings or Weyerhaeuser shareholders' interest.





















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











in millions

Q2.2014


Q3.2014


Q3.2013


YTD.2014


YTD.2013

Operating income (loss)

$            37


$            17


$              2


$            80


$          (73)

Depreciation, depletion and amortization

2


3


2


9


9

Non-operating pension and postretirement costs (credits)

(11)


(12)


11


(33)


31

Special items

(39)


(15)



(103)


Adjusted EBITDA*

$          (11)


$             (7)


$            15


$          (47)


$          (33)

* Non-GAAP measure - see below for definition.












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












Q2.2014


Q3.2014


Q3.2013


YTD.2014


YTD.2013

Gain on postretirement plan amendment

$             45


$             23


$             —


$           113


$             —

Restructuring, impairments and other charges

(6)


(8)



(32)


Gain on sale of non-strategic asset




22


Total

$            39


$            15


$            —


$          103


$            —











Unallocated Selected Items












Q2.2014


Q3.2014


Q3.2013


YTD.2014


YTD.2013

Total decrease (increase) in working capital(1)

$             72


$               1


$             14


$             38


$           (14)

Cash spent for capital expenditures

$             (1)


$             (1)


$             (1)


$             (2)


$             (4)

(1)Working capital does not include cash balances.













*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, pension and postretirement costs not allocated to business segments (primarily interest cost, expected return on plan assets, amortization of actuarial loss and amortization of prior service cost/credit), special items and discontinued operations. Adjusted EBITDA should not be considered in isolation from and is not intended to represent an alternative to our GAAP results.














Weyerhaeuser Company


Discontinued Operations

Q3.2014 Analyst Package

Preliminary results, subject to audit











Discontinued operations relate to WRECO, which was combined with TRI Pointe Homes, Inc. through a Reverse Morris Trust transaction on July 7, 2014. It was previously reported under the Real Estate segment and Unallocated Items.











Discontinued Operations Statement of Operations











in millions

Q2.2014


Q3.2014


Q3.2013


YTD.2014


YTD.2013

Total net sales

$              317


$                   8


$              324


$              573


$              787

Income (loss) from operations

$                 27


$                  (1)


$                 33


$                 42


$                 56

Income taxes

(5)


(5)


(12)


(16)


(20)

Net earnings (loss) from operations

22


(6)


21


26


36

Net gain on divestiture


972



972


Net earnings from discontinued operations

$                22


$              966


$                21


$              998


$                36











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SOURCE Weyerhaeuser Company

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