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Weyerhaeuser Reports Second Quarter Results

- Earnings rise 34 percent compared with first quarter

- Repurchased over $150 million of common shares

Jul 31, 2015

FEDERAL WAY, Wash., July 31, 2015 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported second quarter net earnings to common shareholders of $133 million, or 26 cents per diluted share, on net sales of $1.8 billion. This compares with net earnings of $90 million, or 17 cents per diluted share, on net sales of $1.7 billion for first quarter 2015, and net earnings of $280 million, or 47 cents per diluted share, on net sales from continuing operations of $2.0 billion for the second quarter last year.

Weyerhaeuser Company logo

Excluding special items, second quarter net earnings of $133 million compares with net earnings from continuing operations before special items of $99 million for first quarter 2015, and $234 million for the second quarter last year.

"Each of our businesses delivered solid second quarter operating results, as operational excellence efforts helped mitigate the delayed arrival of the spring building season and the continuing challenge of a strong U.S. dollar," said Doyle Simons, president and chief executive officer. "In addition, we repurchased over $150 million of common shares in the quarter and neared completion of our existing authorization. Looking forward, we are well positioned to capitalize on the improving housing market, and we remain relentlessly focused on driving value for our shareholders through operational improvements and disciplined capital allocation."

View a printer-friendly PDF of our release and financials package.

WEYERHAEUSER FINANCIAL HIGHLIGHTS

2015

2015

2014

(millions, except per share data)

1Q

2Q

2Q

Net sales from continuing operations

$1,721

$1,807

$1,964

       

Net earnings attributable to Weyerhaeuser common shareholders(1)

$90

$133

$280

Weighted average shares outstanding, diluted(2)

527

520

590

Earnings per diluted share

$0.17

$0.26

$0.47

Earnings per diluted share from continuing operations

$0.17

$0.26

$0.43

       

Net earnings from continuing operations before special items(3)

$99

$133

$234

Earnings per diluted share from continuing operations before special items

$0.19

$0.26

$0.40

       

Cash and cash equivalents at end of period(4)

$1,158

$1,121

$845

(1) Second quarter 2014 includes net earnings from discontinued operations of $22 million.
(2) During the third quarter of 2014 Weyerhaeuser retired approximately 59 million shares tendered under the exchange offer associated with the divestiture of Weyerhaeuser Real Estate Company. Through second quarter 2015, Weyerhaeuser repurchased approximately 18 million common shares under the repurchase program announced in third quarter 2014. At the end of the second quarter the company had approximately 514 million common shares outstanding.
(3) There were no special items for the second quarter of 2015. Special items for the first quarter 2015 include a charge for impairment on a nonstrategic asset. Special items for the second quarter of 2014 include gains on a postretirement plan amendment and restructuring charges related to the company's SG&A cost reduction initiative.
(4) Cash and cash equivalents at the end of the period exclude discontinued operations.

TIMBERLANDS

       

FINANCIAL HIGHLIGHTS (millions)

1Q 2015

2Q 2015

Change

Net sales

$351

$336

($15)

Contribution to pre-tax earnings

$162

$127

($35)

2Q 2015 Performance - Western domestic and export log sales realizations declined, partially offset by seasonal increases in sales volumes. Earnings from the disposition of non-strategic timberlands decreased by $12 million compared with the first quarter.

3Q 2015 Outlook - Weyerhaeuser expects slightly lower earnings from the Timberlands segment in the third quarter. In the West, the company expects lower fee harvest volumes, partially offset by higher log sales realizations, as a result of a prolonged fire season. In the South, the company anticipates increased fee harvest volumes offset by seasonally higher silviculture costs.

WOOD PRODUCTS

       

FINANCIAL HIGHLIGHTS (millions)

1Q 2015

2Q 2015

Change

Net sales

$923

$1,004

$81

Contribution to pre-tax earnings

$62

$71

$9

2Q 2015 Performance - Sales volumes increased seasonally across all product lines. Manufacturing costs improved due to higher operating rates and operational excellence initiatives, and Western log costs were lower. These higher sales volumes and lower costs were partially offset by lower average sales realizations for lumber and oriented strand board.

3Q 2015 Outlook - Weyerhaeuser expects higher earnings from the Wood Products segment in the third quarter. The company anticipates seasonally higher sales volumes across most product lines and improved average sales realizations for lumber and oriented strand board.

CELLULOSE FIBERS

       

FINANCIAL HIGHLIGHTS (millions)

1Q 2015

2Q 2015

Change

Net sales

$447

$467

$20

Contribution to pre-tax earnings

$33

$27

($6)

2Q 2015 Performance - Average pulp sales realizations decreased and maintenance costs increased due to an extended pulp mill outage for scheduled maintenance and installation of energy-related capital improvements. These factors were partially offset by lower net energy costs primarily due to operational excellence initiatives.

3Q 2015 Outlook - Weyerhaeuser expects significantly higher earnings from the Cellulose Fibers segment in the third quarter primarily due to minimal scheduled maintenance outage days. Additionally, the company anticipates lower average pulp sales realizations, partially offset by increased sales volumes.

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 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 and cellulose fibers products. Our company is a real estate investment trust. In 2014, our continuing operations generated $7.4 billion in sales and employed approximately 12,800 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 July 31 to discuss second quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on July 31.

To join the conference call from within North America, dial 877-296-9413 (access code: 28347567) at least 15 minutes prior to the call. Those calling from outside North America should dial 706-679-2458 (access code: 28347567). Replays will be available for one week at 855-859-2056 (access code: 28347567) from within North America and at 404-537-3406 (access code: 28347567) 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 our current expectations and various assumptions that are subject to risks and uncertainties. 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, expectations 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 and similar words.

This release contains forward-looking statements regarding the company's expectations during the third quarter of 2015, including with respect to: earnings; harvest volumes, log realizations and costs in Timberlands; sales volumes and realizations across Wood Products product lines; and maintenance outages, pulp sales realizations and sales volumes in Cellulose Fibers.

For more information contact:
Analysts - Beth Baum or Denise Merle (253) 924-2058
Media - Anthony Chavez (253) 924-7148

 

Weyerhaeuser Company

     

Exhibit 99.2

Q2.2015 Analyst Package

       

Preliminary results, subject to audit

               

Consolidated Statement of Operations

                   

in millions

Q1

 

Q2

 

Year-to-date

 

March 31,
2015

 

June 30,
2015

 

June 30,
2014

 

June 30,
2015

 

June 30,
2014

Net Sales

$  1,721

 

$  1,807

 

$  1,964

 

$  3,528

 

$  3,700

Cost of products sold

1,385

 

1,474

 

1,499

 

2,859

 

2,860

Gross margin

336

 

333

 

465

 

669

 

840

Selling expenses

28

 

28

 

27

 

56

 

55

General and administrative expenses

74

 

71

 

88

 

145

 

176

Research and development expenses

5

 

6

 

7

 

11

 

14

Charges for restructuring, closures and impairments

14

 

 

8

 

14

 

27

Other operating costs (income), net

15

 

(15)

 

(65)

 

 

(140)

Operating income

200

 

243

 

400

 

443

 

708

Interest income and other

3

 

2

 

11

 

5

 

20

Interest expense, net of capitalized interest

(83)

 

(88)

 

(83)

 

(171)

 

(166)

Earnings from continuing operations before income taxes

120

 

157

 

328

 

277

 

562

Income taxes

(19)

 

(13)

 

(59)

 

(32)

 

(109)

Earnings from continuing operations

101

 

144

 

269

 

245

 

453

Earnings from discontinued operations, net of income taxes

 

 

22

 

 

32

Net earnings

101

 

144

 

291

 

245

 

485

Dividends on preference shares

(11)

 

(11)

 

(11)

 

(22)

 

(22)

Net earnings attributable to Weyerhaeuser common shareholders

$        90

 

$     133

 

$     280

 

$     223

 

$     463

 

Per Share Information

 
 

Q1

 

Q2

 

Year-to-date

 

March 31,
2015

 

June 30,
2015

 

June 30,
2014

 

June 30,
2015

 

June 30,
2014

Earnings per share attributable to Weyerhaeuser common shareholders, basic:

                 

Continuing operations

$      0.17

 

$      0.26

 

$      0.44

 

$      0.43

 

$      0.73

Discontinued operations

 

 

0.04

 

 

0.06

Net earnings per share

$      0.17

 

$      0.26

 

$      0.48

 

$      0.43

 

$      0.79

Earnings per share attributable to Weyerhaeuser common shareholders, diluted:

                 

Continuing operations

$      0.17

 

$      0.26

 

$      0.43

 

$      0.43

 

$      0.73

Discontinued operations

 

 

0.04

 

 

0.06

Net earnings per share

$      0.17

 

$      0.26

 

$      0.47

 

$      0.43

 

$      0.79

Dividends paid per common share

$      0.29

 

$      0.29

 

$      0.22

 

$      0.58

 

$      0.44

Weighted average shares outstanding (in thousands):

                 

Basic

523,426

 

516,626

 

586,061

 

520,008

 

585,491

Diluted

527,423

 

519,804

 

589,766

 

523,595

 

589,542

Common shares outstanding at end of period (in thousands)

518,735

 

514,121

 

586,698

 

514,121

 

586,698

                   

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

                   

in millions

Q1

 

Q2

 

Year-to-date

 

March 31,
2015

 

June 30,
2015

 

June 30,
2014

 

June 30,
2015

 

June 30,
2014

Net earnings

$       101

 

$       144

 

$       291

 

$       245

 

$       485

Earnings from discontinued operations, net of income taxes

 

 

(22)

 

 

(32)

Interest income and other

(3)

 

(2)

 

(11)

 

(5)

 

(20)

Interest expense, net of capitalized interest

83

 

88

 

83

 

171

 

166

Income taxes

19

 

13

 

59

 

32

 

109

Operating income

200

 

243

 

400

 

443

 

708

Depreciation, depletion and amortization

123

 

118

 

122

 

241

 

245

Non-operating pension and postretirement credits

(3)

 

(3)

 

(11)

 

(6)

 

(21)

Special items

13

 

 

(39)

 

13

 

(88)

Adjusted EBITDA*

$     333

 

$     358

 

$     472

 

$     691

 

$     844

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

                 

 

Weyerhaeuser Company

     

Q2.2015 Analyst Package

         

Preliminary results, subject to audit

         

Consolidated Balance Sheet

           

in millions

March 31,
2015

 

June 30,
2015

 

December 31,
2014

 

ASSETS

         

Current assets:

         

Cash and cash equivalents

$     1,158

 

$     1,121

 

$           1,580

Receivables, less allowances

539

 

537

 

525

Receivables for taxes

23

 

12

 

25

Inventories

645

 

603

 

595

Prepaid expenses

95

 

82

 

80

Deferred tax assets

192

 

162

 

228

Total current assets

2,652

 

2,517

 

3,033

Property and equipment, net

2,524

 

2,557

 

2,623

Construction in progress

171

 

171

 

131

Timber and timberlands at cost, less depletion charged to disposals

6,552

 

6,531

 

6,530

Investments in and advances to equity affiliates

183

 

176

 

188

Goodwill

40

 

40

 

40

Deferred tax assets

3

 

2

 

8

Other assets

269

 

274

 

289

Restricted financial investments held by variable interest entities

615

 

615

 

615

Total assets

$ 13,009

 

$ 12,883

 

$       13,457

           

LIABILITIES AND EQUITY

         

Current liabilities:

         

Accounts payable

$        319

 

$        343

 

$              331

Accrued liabilities

533

 

576

 

587

Total current liabilities

852

 

919

 

918

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

195

 

196

 

206

Deferred pension and other postretirement benefits

1,249

 

1,166

 

1,319

Other liabilities

284

 

275

 

308

Total liabilities

7,982

 

7,958

 

8,153

Total equity

5,027

 

4,925

 

5,304

Total liabilities and equity

$ 13,009

 

$ 12,883

 

$       13,457

 

Weyerhaeuser Company

       

Q2.2015 Analyst Package

               

Preliminary results, subject to audit

               

Consolidated Statement of Cash Flows

                   

in millions

Q1

 

Q2

 

Year-to-date

 

March 31,
2015

 

June 30,
2015

 

June 30,
2014

 

June 30,
2015

 

June 30,
2014

Cash flows from operations:

                 

Net earnings

$      101

 

$    144

 

$    291

 

$    245

 

$    485

Noncash charges (credits) to income:

                 

Depreciation, depletion and amortization

123

 

118

 

126

 

241

 

252

Deferred income taxes, net

13

 

3

 

89

 

16

 

125

Pension and other postretirement benefits

10

 

11

 

(44)

 

21

 

(91)

Share-based compensation expense

8

 

8

 

11

 

16

 

20

Charges for impairment of assets

13

 

 

1

 

13

 

1

Net gains on dispositions of assets

(16)

 

(5)

 

(21)

 

(21)

 

(46)

Foreign exchange transaction (gains) losses

29

 

(8)

 

(12)

 

21

 

2

Change in:

                 

Receivables less allowances

(16)

 

(10)

 

(47)

 

(26)

 

(48)

Receivable for taxes

2

 

12

 

(3)

 

14

 

64

Inventories

(57)

 

42

 

34

 

(15)

 

(54)

Real estate and land

 

 

(35)

 

 

(107)

Prepaid expenses

(11)

 

9

 

(3)

 

(2)

 

Accounts payable and accrued liabilities

(91)

 

66

 

(17)

 

(25)

 

(97)

Deposits on land positions and other assets

 

 

(4)

 

 

8

Pension and postretirement contributions

(20)

 

(19)

 

(30)

 

(39)

 

(63)

Other

(11)

 

(5)

 

(14)

 

(16)

 

(20)

Net cash from operations

77

 

366

 

322

 

443

 

431

                   

Cash flows from investing activities:

                 

Property and equipment

(71)

 

(99)

 

(83)

 

(170)

 

(134)

Timberlands reforestation

(18)

 

(9)

 

(11)

 

(27)

 

(25)

Acquisition of timberlands

(32)

 

 

 

(32)

 

Proceeds from sale of assets

2

 

4

 

1

 

6

 

20

Other

 

12

 

 

12

 

Cash from investing activities

(119)

 

(92)

 

(93)

 

(211)

 

(139)

                   

Cash flows from financing activities:

                 

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

(152)

 

(149)

 

(128)

 

(301)

 

(257)

Cash dividends on preference shares

 

(11)

 

(11)

 

(11)

 

(11)

Change in book overdrafts

 

 

 

 

(6)

Exercises of stock options

21

 

4

 

39

 

25

 

54

Repurchase of common stock

(253)

 

(154)

 

 

(407)

 

Other

4

 

(1)

 

(1)

 

3

 

1

Cash from financing activities

(380)

 

(311)

 

(101)

 

(691)

 

(219)

                   

Net change in cash and cash equivalents

(422)

 

(37)

 

128

 

(459)

 

73

Cash and cash equivalents at beginning of period

1,580

 

1,158

 

780

 

1,580

 

835

Cash and cash equivalents at end of period

$   1,158

 

$ 1,121

 

$    908

 

$ 1,121

 

$    908

Cash paid (received) during the year for:

                 

Interest, net of amount capitalized

$      114

 

$      58

 

$      52

 

$    172

 

$    153

Income taxes

$          1

 

$        4

 

$        5

 

$        5

 

$    (45)

 

Weyerhaeuser Company

     

Total Company Statistics

Q2.2015 Analyst Package

       

Preliminary results, subject to audit

               

Special Items Included in Net Earnings

                   

in millions

Q1

 

Q2

 

Year-to-date

 

March 31,
2015

 

June 30,
2015

 

June 30,
2014

 

June 30,
2015

 

June 30,
2014

Net earnings attributable to Weyerhaeuser common shareholders

$       90

 

$  133

 

$  280

 

$  223

 

$  463

Restructuring, impairments and other charges

9

 

 

5

 

9

 

18

Gain on sale of non-strategic asset

 

 

 

 

(14)

Gain on postretirement plan amendment

 

 

(29)

 

 

(58)

Net earnings attributable to Weyerhaeuser common shareholders before special items

99

 

133

 

256

 

232

 

409

Earnings from discontinued operations, net of income taxes

 

 

(22)

 

 

(32)

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

$       99

 

$  133

 

$  234

 

$  232

 

$  377

                   
 

Q1

 

Q2

 

Year-to-date

 

March 31,
2015

 

June 30,
2015

 

June 30,
2014

 

June 30,
2015

 

June 30,
2014

Net earnings per diluted share attributable to Weyerhaeuser common shareholders

$   0.17

 

$ 0.26

 

$ 0.47

 

$ 0.43

 

$ 0.79

Restructuring, impairments and other charges

0.02

 

 

0.01

 

0.01

 

0.03

Gain on sale of non-strategic asset

 

 

 

 

(0.02)

Gain on postretirement plan amendment

 

 

(0.04)

 

 

(0.10)

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

0.19

 

 

0.44

 

0.44

 

0.70

Earnings from discontinued operations, net of income taxes

 

 

(0.04)

 

 

(0.06)

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

$   0.19

 

$ 0.26

 

$ 0.40

 

$ 0.44

 

$ 0.64

 

Selected Total Company Items

 

in millions

Q1

 

Q2

 

Year-to-date

 

March 31,
2015

 

June 30,
2015

 

June 30,
2014

 

June 30,
2015

 

June 30,
2014

Depreciation, depletion and amortization:

                 

Cost of products sold

$      118

 

$    116

 

$    117

 

$    234

 

$    234

Selling, general and administrative expenses

5

 

2

 

5

 

7

 

11

Total depreciation, depletion and amortization

$      123

 

$    118

 

$    122

 

$    241

 

$    245

                   

Pension and postretirement costs:

                 

Pension and postretirement costs allocated to business segments

$        13

 

$      14

 

$      12

 

$      27

 

$      22

Pension and postretirement credits not allocated

(3)

 

(3)

 

(11)

 

(6)

 

(21)

Total company pension and postretirement costs

$        10

 

$      11

 

$        1

 

$      21

 

$        1

                   

Total decrease (increase) in working capital(1)

$    (212)

 

$    161

 

$      49

 

$    (51)

 

$  (121)

Cash spent for capital expenditures

$      (89)

 

$  (108)

 

$    (92)

 

$  (197)

 

$  (155)

(1) Working capital does not include cash balances.

                 

 

Weyerhaeuser Company

     

Timberlands Segment

Q2.2015 Analyst Package

       

Preliminary results, subject to audit

               
                     

Segment Statement of Operations

                     

in millions

 

Q1.2015

 

Q2.2015

 

Q2.2014

 

YTD.2015

 

YTD.2014

Sales to unaffiliated customers

$     351

 

$     336

 

$      397

 

$       687

 

$       774

Intersegment sales

228

 

187

 

186

 

415

 

424

Total net sales

579

 

523

 

583

 

1,102

 

1,198

Cost of products sold

405

 

385

 

399

 

790

 

830

Gross margin

174

 

138

 

184

 

312

 

368

Selling expenses

2

 

1

 

2

 

3

 

4

General and administrative expenses

22

 

21

 

23

 

43

 

49

Research and development expenses

3

 

4

 

3

 

7

 

7

Other operating income, net

(15)

 

(15)

 

(14)

 

(30)

 

(26)

Operating income

162

 

127

 

170

 

289

 

334

Interest income and other

 

 

 

 

Net contribution to earnings

$   162

 

$   127

 

$     170

 

$     289

 

$     334

                     

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

                     

in millions

 

Q1.2015

 

Q2.2015

 

Q2.2014

 

YTD.2015

 

YTD.2014

Operating income

$   162

 

$   127

 

$     170

 

$     289

 

$     334

Depreciation, depletion and amortization

53

 

51

 

51

 

104

 

103

Adjusted EBITDA*

$   215

 

$   178

 

$     221

 

$     393

 

$     437

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

                 
                     

Selected Segment Items

                     

in millions

 

Q1.2015

 

Q2.2015

 

Q2.2014

 

YTD.2015

 

YTD.2014

Total decrease (increase) in working capital(1)

$     (26)

 

$       52

 

$       (15)

 

$         26

 

$       (44)

Cash spent for capital expenditures

$     (24)

 

$     (17)

 

$       (18)

 

$       (41)

 

$       (37)

(1) Working capital does not include cash balances.

                 
                     

Segment Statistics

                     
 

Q1.2015

 

Q2.2015

 

Q2.2014

 

YTD.2015

 

YTD.2014

Third Party 
Net Sales 
(millions)

Logs:

                 

West

$     210

 

$     221

 

$      261

 

$       431

 

$       518

South

58

 

58

 

60

 

116

 

122

Canada

8

 

3

 

1

 

11

 

7

Total logs

276

 

282

 

322

 

558

 

647

Chip sales

4

 

4

 

2

 

8

 

5

Timberlands exchanges

25

 

5

 

28

 

30

 

32

Higher and better use land sales

2

 

3

 

7

 

5

 

10

Minerals, oil and gas

7

 

5

 

8

 

12

 

15

Products from international operations

24

 

25

 

26

 

49

 

50

Other products

13

 

12

 

4

 

25

 

15

Total

$     351

 

$     336

 

$      397

 

$       687

 

$       774

Logs
Third Party Sales
Realizations
(per cubic meter)

West

$  98.83

 

$  94.70

 

$ 109.13

 

$    96.67

 

$  111.71

South

$  45.33

 

$  45.20

 

$   45.16

 

$    45.27

 

$    45.02

Canada

$  34.84

 

$  35.43

 

$   38.04

 

$    34.98

 

$    35.75

International

$  19.35

 

$  22.63

 

$   16.27

 

$    21.14

 

$    16.64

Logs
Third Party Sales
Volumes
(cubic meters, thousands)

West

2,120

 

2,330

 

2,390

 

4,450

 

4,636

South

1,271

 

1,295

 

1,339

 

2,566

 

2,724

Canada

245

 

75

 

30

 

320

 

186

International

150

 

179

 

139

 

329

 

286

Total

3,786

 

3,879

 

3,898

 

7,665

 

7,832

Logs
Fee Harvest Volumes
(cubic meters, thousands)

West

2,911

 

2,811

 

2,888

 

5,722

 

5,763

South

2,732

 

2,912

 

2,715

 

5,644

 

5,581

International

239

 

219

 

249

 

458

 

498

Total

5,882

 

5,942

 

5,852

 

11,824

 

11,842

 

Weyerhaeuser Company

     

Wood Products Segment

Q2.2015 Analyst Package

       

Preliminary results, subject to audit

               
                     

Segment Statement of Operations  

                     

in millions

 

Q1.2015

 

Q2.2015

 

Q2.2014

 

YTD.2015

 

YTD.2014

Sales to unaffiliated customers

$     923

 

$  1,004

 

$  1,077

 

$    1,927

 

$    1,975

Intersegment sales

19

 

22

 

21

 

41

 

40

Total net sales

942

 

1,026

 

1,098

 

1,968

 

2,015

Cost of products sold

829

 

903

 

939

 

1,732

 

1,730

Gross margin

113

 

123

 

159

 

236

 

285

Selling expenses

23

 

23

 

23

 

46

 

48

General and administrative expenses

27

 

26

 

30

 

53

 

67

Research and development expenses

 

1

 

2

 

1

 

3

Charges for restructuring, closures and impairments

 

 

2

 

 

2

Other operating costs (income), net

1

 

2

 

 

3

 

(1)

Operating income

62

 

71

 

102

 

133

 

166

Interest income and other

 

 

 

 

Net contribution to earnings

$      62

 

$      71

 

$   102

 

$     133

 

$     166

                     

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

                     

in millions

 

Q1.2015

 

Q2.2015

 

Q2.2014

 

YTD.2015

 

YTD.2014

Operating income

$      62

 

$      71

 

$   102

 

$     133

 

$     166

Depreciation, depletion and amortization

26

 

27

 

30

 

53

 

59

Adjusted EBITDA*

$      88

 

$      98

 

$   132

 

$     186

 

$     225

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

                 
                     

Selected Segment Items

                     

in millions

 

Q1.2015

 

Q2.2015

 

Q2.2014

 

YTD.2015

 

YTD.2014

Total decrease (increase) in working capital(1)

$     (99)

 

$       42

 

$       29

 

$       (57)

 

$     (108)

Cash spent for capital expenditures

$     (37)

 

$     (60)

 

$     (38)

 

$       (97)

 

$       (56)

(1) Working capital does not include cash balances.

                 
                     

Segment Statistics

                     

in millions, except for third-party sales realizations

Q1.2015

 

Q2.2015

 

Q2.2014

 

YTD.2015

 

YTD.2014

Structural Lumber
(board feet)

Third party net sales

$     434

 

$     450

 

$     515

 

$       884

 

$       942

Third party sales realizations

$     403

 

$     383

 

$     427

 

$       393

 

$       429

Third party sales volumes(1)

1,075

 

1,175

 

1,206

 

2,250

 

2,195

Production volumes

1,043

 

1,087

 

1,081

 

2,130

 

2,090

Outside purchase volumes

89

 

98

 

82

 

187

 

160

Engineered Solid
Section
(cubic feet)

Third party net sales

$       94

 

$     113

 

$     114

 

$       207

 

$       204

Third party sales realizations

$  1,965

 

$  2,032

 

$  1,976

 

$    2,001

 

$    1,968

Third party sales volumes(1)

4.8

 

5.6

 

5.8

 

10.4

 

10.4

Production volumes

5.0

 

5.6

 

5.7

 

10.6

 

10.6

Outside purchase volumes

 

 

0.5

 

 

2.3

Engineered
I-joists
(lineal feet)

Third party net sales

$       61

 

$       76

 

$       81

 

$       137

 

$       140

Third party sales realizations

$  1,510

 

$  1,502

 

$  1,470

 

$    1,506

 

$    1,463

Third party sales volumes(1)

41

 

50

 

55

 

91

 

95

Production volumes

43

 

48

 

55

 

91

 

99

Outside purchase volumes

1

 

1

 

3

 

2

 

4

Oriented Strand
Board
(square feet 3/8')

Third party net sales

$     137

 

$     147

 

$     159

 

$       284

 

$       307

Third party sales realizations

$     196

 

$     191

 

$     226

 

$       193

 

$       228

Third party sales volumes(1)

700

 

771

 

706

 

1,471

 

1,347

Production volumes

704

 

700

 

681

 

1,404

 

1,338

Outside purchase volumes

65

 

81

 

51

 

146

 

104

Softwood Plywood
(square feet 3/8')

Third party net sales

$       33

 

$       36

 

$       35

 

$         69

 

$         65

Third party sales realizations

$     366

 

$     354

 

$     348

 

$       360

 

$       340

Third party sales volumes(1)

89

 

101

 

102

 

190

 

192

Production volumes

61

 

63

 

60

 

124

 

119

Outside purchase volumes

37

 

27

 

36

 

64

 

69

 

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

 

Weyerhaeuser Company

     

Cellulose Fibers Segment

Q2.2015 Analyst Package

       

Preliminary results, subject to audit

               
                     

Segment Statement of Operations

                     

in millions

 

Q1.2015

 

Q2.2015

 

Q2.2014

 

YTD.2015

 

YTD.2014

Total net sales

$   447

 

$   467

 

$   490

 

$     914

 

$     951

Cost of products sold

394

 

417

 

381

 

811

 

771

Gross margin

53

 

50

 

109

 

103

 

180

Selling expenses

3

 

4

 

4

 

7

 

8

General and administrative expenses

17

 

17

 

20

 

34

 

40

Research and development expenses

2

 

1

 

2

 

3

 

4

Other operating income, net

(8)

 

(6)

 

(8)

 

(14)

 

(17)

Operating income

39

 

34

 

91

 

73

 

145

Interest income and other

(6)

 

(7)

 

 

(13)

 

Net contribution to earnings

$      33

 

$      27

 

$      91

 

$        60

 

$     145

                     

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

                     

in millions

 

Q1.2015

 

Q2.2015

 

Q2.2014

 

YTD.2015

 

YTD.2014

Operating income

$      39

 

$      34

 

$      91

 

$        73

 

$     145

Depreciation, depletion and amortization

39

 

38

 

39

 

77

 

77

Adjusted EBITDA*

$      78

 

$      72

 

$   130

 

$     150

 

$     222

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

                 
                     

Selected Segment Items

                     

in millions

 

Q1.2015

 

Q2.2015

 

Q2.2014

 

YTD.2015

 

YTD.2014

Total decrease (increase) in working capital(1)

$       40

 

$         6

 

$     (37)

 

$         46

 

$         (6)

Cash spent for capital expenditures

$     (27)

 

$     (31)

 

$     (35)

 

$       (58)

 

$       (61)

(1) Working capital does not include cash balances.

                 
                     

Segment Statistics

                     
   

Q1.2015

 

Q2.2015

 

Q2.2014

 

YTD.2015

 

YTD.2014

Pulp
(air-dry metric tons)

Third party net sales (millions)

$     360

 

$     368

 

$     383

 

$       728

 

$       746

Third party sales realizations

$     854

 

$     823

 

$     845

 

$       838

 

$       835

Third party sales volumes (thousands)

421

 

448

 

454

 

869

 

894

Production volumes (thousands)

442

 

422

 

467

 

864

 

926

Liquid
Packaging
Board
(metric tons)

Third party net sales (millions)

$       74

 

$       84

 

$       87

 

$       158

 

$       167

Third party sales realizations

$  1,194

 

$  1,218

 

$  1,284

 

$    1,206

 

$    1,261

Third party sales volumes (thousands)

62

 

69

 

67

 

131

 

132

Production volumes (thousands)

60

 

64

 

72

 

124

 

142

 

Weyerhaeuser Company

 

Unallocated Items

Q2.2015 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 financing and the elimination of intersegment profit in inventory and the LIFO reserve.

                   

Contribution to Earnings

                   

in millions

Q1.2015

 

Q2.2015

 

Q2.2014

 

YTD.2015

 

YTD.2014

Unallocated corporate function expenses

$       (9)

 

$       (7)

 

$       (7)

 

$       (16)

 

$       (14)

Unallocated share-based compensation

3

 

1

 

(6)

 

4

 

(3)

Unallocated pension & postretirement credits

3

 

3

 

56

 

6

 

111

Foreign exchange gains (losses)

(29)

 

9

 

13

 

(20)

 

(2)

Elimination of intersegment profit in inventory and LIFO

(12)

 

18

 

(1)

 

6

 

(20)

Other

(19)

 

(13)

 

(18)

 

(32)

 

(9)

Operating income (loss)

(63)

 

11

 

37

 

(52)

 

63

Interest income and other

9

 

9

 

11

 

18

 

20

Net contribution to earnings from continuing operations(1)

$    (54)

 

$      20

 

$      48

 

$      (34)

 

$        83

 

(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

Q1.2015

 

Q2.2015

 

Q2.2014

 

YTD.2015

 

YTD.2014

Operating income (loss)

$    (63)

 

$      11

 

$      37

 

$      (52)

 

$        63

Depreciation, depletion and amortization

5

 

2

 

2

 

7

 

6

Non-operating pension and postretirement credits

(3)

 

(3)

 

(11)

 

(6)

 

(21)

Special items

13

 

 

(39)

 

13

 

(88)

Adjusted EBITDA*

$    (48)

 

$      10

 

$    (11)

 

$      (38)

 

$      (40)

* Non-GAAP measure - see below for definition.

                 
                   

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

                   

in millions

Q1.2015

 

Q2.2015

 

Q2.2014

 

YTD.2015

 

YTD.2014

Gain on postretirement plan amendment

$      —

 

$      —

 

$       45

 

$        —

 

$         90

Restructuring, impairments and other charges

(13)

 

 

(6)

 

(13)

 

(24)

Gain on sale of non-strategic asset

 

 

 

 

22

Total

$    (13)

 

$      —

 

$      39

 

$      (13)

 

$        88

                   

Unallocated Selected Items

                   

in millions

Q1.2015

 

Q2.2015

 

Q2.2014

 

YTD.2015

 

YTD.2014

Total decrease (increase) in working capital(1)

$   (127)

 

$       61

 

$       72

 

$       (66)

 

$         37

Cash spent for capital expenditures

$       (1)

 

$       —

 

$       (1)

 

$         (1)

 

$         (1)

(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.

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SOURCE Weyerhaeuser Company

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