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Weyerhaeuser Reports First Quarter Results

- Merged with Plum Creek on February 19, 2016

- Net earnings before special items increased 24 percent compared with fourth quarter 2015

- Repurchased $863 million, or 31 million shares, at an average price of $27.49 in the quarter

May 6, 2016

FEDERAL WAY, Wash., May 6, 2016 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported first quarter net earnings to common shareholders of $70 million, or $0.11 per diluted share, on net sales of $1.8 billion. This compares with net earnings of $90 million, or $0.17 per diluted share, on net sales of $1.7 billion for the same period last year.

Weyerhaeuser Company logo.

Excluding after-tax charges of $80 million for special items, the company reported net earnings of $150 million, or $0.24 per diluted share for the first quarter. This compares with net earnings before special items of $99 million for the same period last year and $121 million for fourth quarter 2015.

Special items for the first quarter of 2016 are primarily comprised of $98 million of after-tax merger related costs, partially offset by a $22 million after-tax gain on the sale of the company's Federal Way headquarters campus.

"I am extremely proud of the work of our employees in the first quarter, as we closed the Plum Creek merger, delivered solid operating performance across each of our businesses, and completed about 35 percent of our $2.5 billion share repurchase authorization," said Doyle R. Simons, president and CEO. "These accomplishments, and the recently announced sale of our pulp mills to International Paper, illustrate our commitment to a focused portfolio, industry-leading performance and disciplined capital allocation. We are making solid progress on merger integration and synergies, and look forward to building on that strong foundation as we work together to be the world's premier timber, land, and forest products company and drive exceptional value for shareholders."

WEYERHAEUSER FINANCIAL HIGHLIGHTS

Weyerhaeuser merged with Plum Creek Timber Company, Inc. (Plum Creek) on February 19, 2016.  Consolidated results for the first quarter of 2016 as presented below include the results of Plum Creek for the period February 19, 2016 through March 31, 2016.  The financial statements included within this release do not include Plum Creek's financial results for any period prior to the merger date.

As a result of the merger and related organizational changes, we have revised our business segments. Results for fiscal periods prior to first quarter 2016 have been revised to conform to the new segments.  Additional information is included in segment Financial Highlights below.

WEYERHAEUSER FINANCIAL HIGHLIGHTS

2015


2016


2015


(millions, except per share data)

4Q


1Q


1Q


Net sales

$1,741


$1,835


$1,727


Adjusted EBITDA (1)

361


413


343









Net earnings attributable to Weyerhaeuser common shareholders

$59


$70


$90


Weighted average shares outstanding, diluted(2)

514


635


527


Earnings per diluted share

$0.11


$0.11


$0.17









Net earnings before special items (3)

$121


$150


$99


Earnings per diluted share before special items

$0.24


$0.24


$0.19









Cash and cash equivalents at end of period

$1,012


$415


$1,158









(1) 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, pension and postretirement costs not allocated to business segments and special items. Adjusted EBITDA excludes results from joint ventures. Adjusted EBITDA should not be considered in isolation from and is not intended to represent an alternative to our GAAP results. A reconciliation of Adjusted EBITDA to GAAP earnings is included within this release.


(2) In the first quarter of 2016, Weyerhaeuser issued approximately 279 million shares in conjunction with the Plum Creek merger transaction.  Following the completion of the merger, Weyerhaeuser repurchased approximately 31 million shares under the $2.5 billion repurchase program announced in conjunction with the merger transaction.  At the end of the first quarter of 2016, the company had approximately 759 million common shares outstanding.


(3) After-tax special items for first quarter 2016 include $98 million of Plum Creek merger related costs, a $22 million gain on the sale of the company's Federal Way headquarters campus, and $4 million of restructuring charges. Special items for fourth quarter 2015 include a non-cash charge for Weyerhaeuser's share of an asset impairment by the newsprint and publishing papers venture, Plum Creek merger related costs, a benefit from the expiration of the company's built-in gains tax period, and restructuring charges related to closing four distribution centers.  Special items for the first quarter 2015 include a non-cash charge for impairment on a nonstrategic asset.

TIMBERLANDS

The Timberlands segment includes sales of logs, stumpage and pay-as-cut timber, recreational lease revenue, and our operations in Uruguay. Sales of higher and better use properties, non-core timberlands and royalties related to minerals and oil and gas assets are now reported as part of the Real Estate, Energy and Natural Resources segment.  Western Timberlands includes timberland operations in Washington and Oregon.  Southern Timberlands includes timberland operations for all Southern states.  Northern Timberlands includes timberland operations in Montana, the Lake States, New England and West Virginia.

FINANCIAL HIGHLIGHTS (millions)

4Q 2015


1Q 2016


Change

Net sales

$517


$609


$92

Adjusted EBITDA

$160


$199


$39

Contribution to pre-tax earnings

$107


$129


$22

1Q 2016 Performance - Western fee harvest increased due to higher volume from legacy Weyerhaeuser Timberlands and a partial quarter of Plum Creek harvest. Average Western log realizations declined slightly due to mix as a result of a higher proportion of domestic log sales.

In the South, fee harvest volumes increased as a partial quarter of Plum Creek harvest more than offset seasonally lower harvest volumes from legacy Weyerhaeuser lands, and silviculture expense declined due to wet weather. These factors were partially offset by lower average realizations for Southern logs due to a higher mix of pulpwood from Plum Creek operations. Average realizations for legacy Weyerhaeuser Southern logs were comparable to the fourth quarter.

2Q 2016 Outlook - Weyerhaeuser anticipates comparable earnings and higher Adjusted EBITDA from the Timberlands segment in the second quarter. Higher fee harvest volumes from a full quarter of Plum Creek operations will be offset by seasonally higher Southern silviculture costs, higher Western logging expenses and slightly lower average realizations for Western and Southern logs, primarily due to mix. Non-cash depletion and amortization charges will also be higher due to the increased basis associated with the acquisition accounting.

REAL ESTATE, ENERGY AND NATURAL RESOURCES

The Real Estate, Energy and Natural Resources Segment includes sales of higher and better use properties, non-core timberlands, and royalties related to minerals and oil and gas assets.  These results were formerly reported in Weyerhaeuser's Timberlands segment. The segment also includes the results from equity interest in Plum Creek Real Estate development joint ventures.

FINANCIAL HIGHLIGHTS (millions)

4Q 2015


1Q 2016


Change

Net sales

$32


$39


$7

Adjusted EBITDA

$33


$34


$1

Contribution to pre-tax earnings

$27


$15


($12)

1Q 2016 Performance - Seasonally lower legacy Weyerhaeuser Real Estate sales and lower oil and gas royalties were partially offset by earnings from Plum Creek operations.  Adjusted EBITDA improved slightly in the first quarter. The basis of Plum Creek Real Estate properties sold during the quarter approximated sales price as the land was marked to fair value as part of the merger's acquisition accounting.

2Q 2016 Outlook - Weyerhaeuser expects comparable earnings and Adjusted EBITDA from the Real Estate, Energy and Natural Resources segment in the second quarter.

WOOD PRODUCTS

The Wood Products segment includes sales of softwood lumber, engineered wood products, oriented strand board, plywood, medium density fiberboard and building materials distribution.

FINANCIAL HIGHLIGHTS (millions)

4Q 2015


1Q 2016


Change

Net sales

$943


$1,001


$58

Adjusted EBITDA

$75


$117


$42

Contribution to pre-tax earnings before special items

$48


$87


$39

Pre-tax charge for special items

($8)


$0


$8

Contribution to pre-tax earnings

$40


$87


$47

1Q 2016 Performance - Operating rates increased and unit manufacturing costs improved across most product lines in the quarter.  Higher sales realizations for lumber were partially offset by slightly lower sales realizations for oriented strand board.

2Q 2016 Outlook - Weyerhaeuser expects significantly higher earnings and Adjusted EBITDA from the Wood Products segment in the second quarter primarily due to higher sales realizations for lumber and oriented strand board.

CELLULOSE FIBERS

The Cellulose Fibers segment includes sales of pulp, liquid packaging board and results from an equity interest in a newsprint and publishing papers venture.

FINANCIAL HIGHLIGHTS (millions)

4Q 2015


1Q 2016


Change

Net sales

$475


$430


($45)

Adjusted EBITDA

$105


$68


($37)

Contribution to pre-tax earnings before special items

$64


$28


($36)

Pre-tax charge for special items

($84)


$0


$84

Contribution to pre-tax earnings

($20)


$28


$48

1Q 2016 Performance - Average sales realizations declined and pulp sales volumes decreased slightly. Maintenance costs rose due to additional scheduled outage days compared to the fourth quarter.

Fourth quarter special items included a non-cash charge for Weyerhaeuser's share of an asset impairment recorded by the newsprint and publishing papers venture.

2Q 2016 Outlook - Weyerhaeuser expects higher earnings and Adjusted EBITDA from the Cellulose Fibers segment in the second quarter. The company anticipates higher average sales realizations due to mix and slightly lower fiber and energy costs.

STRATEGIC REVIEW OF CELLULOSE FIBERS

On May 2, 2016, Weyerhaeuser announced an agreement to sell its Cellulose Fibers pulp mills to International Paper for $2.2 billion in cash.  This announcement completes the first phase of the company's strategic review of the Cellulose Fibers business. The transaction with International Paper does not include Weyerhaeuser's liquid packaging board facility or newsprint and publishing papers venture.  The company's review of those assets is ongoing.  Weyerhaeuser expects to use a substantial portion of the estimated $1.6 billion after-tax proceeds for repayment of term loans issued in conjunction with the company's previously announced $2.5 billion share repurchase program.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control more than 13 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 February 2016, we merged with Plum Creek Timber Company, Inc. In 2015, Weyerhaeuser and Plum Creek, on a combined basis, generated approximately $8.5 billion in net sales and employed nearly 14 thousand 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 May 6 to discuss first quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on May 6.

To join the conference call from within North America, dial 877-296-9413 (access code: 3192732) at least 15 minutes prior to the call. Those calling from outside North America should dial 706-679-2458 (access code: 3192732). Replays will be available for two weeks at 855-859-2056 (access code: 3192732) from within North America and at 404-537-3406 (access code: 3192732) 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 second quarter of 2016, including with respect to: earnings; log realizations and dispositions of non-core timberlands; sales volumes across Wood Products product lines, log and manufacturing costs and expected realizations for lumber and oriented strand board in Wood Products; and maintenance and capital costs, and realizations for pulp 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, 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;
  • 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;
  • market demand for the company's products, including market demand for our timberland properties that have 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;
  • the successful execution of our internal plans and strategic 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;
  • changes in implementation of acquisition accounting; and
  • other factors described under "Risk Factors" in our 2015 Annual Report on Form 10-K and in our Registration Statement on Form S-4/A filed on December 23, 2015.

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, yen and the Canadian dollar, and the relative value of the euro and the yen. Restrictions on international trade or tariffs imposed on imports and disruptions in shipping and transportation also may affect the company.

RECONCILIATION OF ADJUSTED EBITDA TO NET EARNINGS

We reconcile Adjusted EBITDA to net earnings for the consolidated company and to operating income for the business segments, as those are the most directly comparable U.S. GAAP measures for each.

The table below reconciles Adjusted EBITDA for the quarter ended March 31, 2016:

DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate & ENR


Wood Products


Cellulose Fibers


Unallocated Items


Total

Adjusted EBITDA by Segment:












Net earnings











$

81


Interest expense, net of capitalized interest











97


Income taxes











20


Net contribution to earnings

$

129



$

15



$

87



$

28



$

(61)



$

198


Equity (earnings) loss from joint ventures







2



(5)



(3)


Interest income and other









(9)



(9)


Operating income

129



15



87



30



(75)



186


Depreciation, depletion and amortization

70



2



30



38



2



142


Basis of real estate sold



17









17


Non-operating pension and postretirement credits









(12)



(12)


Special items(1)









80



80


Adjusted EBITDA

$

199



$

34



$

117



$

68



$

(5)



$

413




(1)

Pre-tax special items include: a $36 million gain on the sale of nonstrategic assets, $110 million of Plum Creek merger-related costs, and $6 million of charges for restructuring, closures and asset impairments.

 

The table below reconciles Adjusted EBITDA for the quarter ended December 31, 2015:

DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate & ENR


Wood Products


Cellulose Fibers


Unallocated Items


Total

Adjusted EBITDA by Segment:












Net earnings











$

70


Interest expense, net of capitalized interest











88


Income taxes











(19)


Net contribution to earnings

$

107



$

27



$

40



$

(20)



$

(15)



$

139


Equity (earnings) loss from joint ventures







87





87


Interest income and other









(9)



(9)


Operating income

107



27



40



67



(24)



217


Depreciation, depletion and amortization

53



1



27



38



1



120


Basis of real estate sold



5









5


Non-operating pension and postretirement credits









(3)



(3)


Special items(1)





8





14



22


Adjusted EBITDA

$

160



$

33



$

75



$

105



$

(12)



$

361




(1)

Pre-tax special items include: $14 million of Plum Creek merger-related costs and $8 million of charges for restructuring, closures and asset impairments.

 

The table below reconciles Adjusted EBITDA for the quarter ended March 31, 2015:

DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate & ENR


Wood Products


Cellulose Fibers


Unallocated Items


Total

Adjusted EBITDA by Segment:












Net earnings











$

101


Interest expense, net of capitalized interest











83


Income taxes











19


Net contribution to earnings

$

139



$

23



$

62



$

33



$

(54)



$

203


Equity (earnings) loss from joint ventures







6





6


Interest income and other









(9)



(9)


Operating income

139



23



62



39



(63)



200


Depreciation, depletion and amortization

53





26



39



5



123


Basis of real estate sold



10









10


Non-operating pension and postretirement credits









(3)



(3)


Special items(1)









13



13


Adjusted EBITDA

$

192



$

33



$

88



$

78



$

(48)



$

343




(1)

Pre-tax special items include: a $13 million non-cash impairment charge related to a nonstrategic asset.

 

Weyerhaeuser Company



Exhibit 99.2

Q1.2016 Analyst Package




Preliminary results, subject to audit












The balances presented as of and for the quarter ended March 31, 2016 reflect the balances and results of operations acquired in our merger with Plum Creek Timber, Inc. for the period from the merger date of February 19, 2016 to March 31, 2016.







Consolidated Statement of Operations







in millions

Q4


Q1


December 31,

 2015


March 31,

 2016


March 31,

 2015

Net sales

$

1,741



$

1,835



$

1,727


Cost of products sold

1,390



1,475



1,385


Gross margin

351



360



342


Selling expenses

30



27



28


General and administrative expenses

84



85



74


Research and development expenses

7



6



5


Charges for integration and restructuring, closures and asset impairments

24



117



14


Other operating costs (income), net

(11)



(61)



21


Operating income

217



186



200


Equity earnings (loss) from joint ventures

(87)



3



(6)


Interest income and other

9



9



9


Interest expense, net of capitalized interest

(88)



(97)



(83)


Earnings before income taxes

51



101



120


Income taxes

19



(20)



(19)


Net earnings

70



81



101


Dividends on preference shares

(11)



(11)



(11)


Net earnings attributable to Weyerhaeuser common shareholders

$

59



$

70



$

90



Per Share Information



Q4


Q1


December 31,

 2015


March 31,

 2016


March 31,

 2015

Earnings per share attributable to Weyerhaeuser common shareholders, basic and diluted

$

0.11



$

0.11



$

0.17


Dividends paid per common share

$

0.31



$

0.31



$

0.29


Weighted average shares outstanding (in thousands):






Basic

511,175



632,004



523,426


Diluted

514,167



634,872



527,423


Common shares outstanding at end of period (in thousands)

510,483



759,044



518,735








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







in millions

Q4


Q1


December 31,

 2015


March 31,

 2016


March 31,

 2015

Net earnings

$

70



$

81



$

101


Equity (earnings) loss from joint ventures

87



(3)



6


Interest income and other

(9)



(9)



(9)


Interest expense, net of capitalized interest

88



97



83


Income taxes

(19)



20



19


Operating income

217



186



200


Depreciation, depletion and amortization

120



142



123


Basis of real estate sold

5



17



10


Non-operating pension and postretirement credits

(3)



(12)



(3)


Special items

22



80



13


Adjusted EBITDA*

$

361



$

413



$

343


*Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Effective for the quarter ended March 31, 2016, we have revised our definition of Adjusted EBITDA to add back the basis of real estate sold. We have revised our prior-period presentation to conform to our current reporting.

Adjusted EBITDA, as we define it, is operating income from continuing operations adjusted for depreciation, depletion, amortization, basis of real estate sold, pension and postretirement costs not allocated to business segments and special items. Adjusted EBITDA excludes results from joint ventures.

Our definition of Adjusted EBITDA may be different from similarly titled measures reported by other companies. Adjusted EBITDA should not be considered in isolation from and is not intended to represent an alternative to our GAAP results.

 

Weyerhaeuser Company



Q1.2016 Analyst Package





Preliminary results, subject to audit





Consolidated Balance Sheet






in millions


March 31,

 2016


December 31,

 2015


ASSETS





Current assets:





Cash and cash equivalents


$

415



$

1,012


Receivables, less allowances


578



487


Receivables for taxes


25



30


Inventories


677



568


Prepaid expenses and other current assets


135



77


Total current assets


1,830



2,174


Property and equipment, net


2,763



2,572


Construction in progress


223



195


Timber and timberlands at cost, less depletion charged to disposals


14,548



6,480


Minerals and mineral rights, net


325



14


Investments in and advances to joint ventures


1,011



74


Goodwill


40



40


Deferred tax assets


15



4


Other assets


409



302


Restricted financial investments held by variable interest entities


615



615


Total assets


$

21,779



$

12,470







LIABILITIES AND EQUITY





Current liabilities:





Notes payable


$

4



$

4


Accounts payable


385



326


Accrued liabilities


595



545


Total current liabilities


984



875


Note payable to timberland venture


835




Long-term debt


7,803



4,875


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


511



511


Deferred income taxes


71



86


Deferred pension and other postretirement benefits


983



987


Other liabilities


311



267


Total liabilities


11,498



7,601


Total equity


10,281



4,869


Total liabilities and equity


$

21,779



$

12,470


 

Weyerhaeuser Company




Q1.2016 Analyst Package






Preliminary results, subject to audit






Consolidated Statement of Cash Flows







in millions

Q4


Q1


December 31,

 2015


March 31,

 2016


March 31,

 2015

Cash flows from operations:






Net earnings

$

70



$

81



$

101


Noncash charges (credits) to income:






Depreciation, depletion and amortization

120



142



123


Basis of real estate sold

5



17



10


Deferred income taxes, net

(10)



18



13


Pension and other postretirement benefits

10



4



10


Share-based compensation expense

9



24



8


Charges for impairment of assets

1





13


Equity (earnings) loss from joint ventures

87



(3)



6


Net gains on dispositions of assets and operations

(8)



(41)



(16)


Foreign exchange transaction (gains) losses

6



(13)



29








Change in:






Receivables less allowances

58



(47)



(16)


Receivable for taxes

(16)



10



2


Inventories

19



(43)



(57)


Prepaid expenses

5



(1)



(11)


Accounts payable and accrued liabilities

12



(70)



(91)


Pension and postretirement contributions

(24)



(17)



(20)


Distributions received from joint ventures

15



5




Other

(20)



(19)



(17)


Net cash from operations

339



47



87








Cash flows from investing activities:






Capital expenditures:






Purchases of property and equipment

(167)



(57)



(71)


Timberlands reforestation costs

(7)



(16)



(18)


Acquisition of timberlands

(2)



(6)



(32)


Proceeds from sale of assets

12



70



2


Distributions received from joint ventures



24




Cash and cash equivalents acquired in the merger with Plum Creek



9




Other

1






Cash from (used in) investing activities

(163)



24



(119)








Cash flows from financing activities:






Cash dividends on common shares

(159)



(241)



(152)


Cash dividends on preference shares

(22)






Proceeds from issuance of long-term debt



1,098




Payments of long-term debt



(720)




Repurchase of common stock

(34)



(798)



(253)


Other

3



(7)



15


Cash from financing activities

(212)



(668)



(390)








Net change in cash and cash equivalents

(36)



(597)



(422)


Cash and cash equivalents at beginning of period

1,048



1,012



1,580


Cash and cash equivalents at end of period

$

1,012



$

415



$

1,158








Cash paid (received) during the year for:






Interest, net of amount capitalized

$

57



$

125



$

114


Income taxes

$

10



$

(13)



$

1








Noncash investing and financing activities:






Equity issued as consideration for our merger with Plum Creek

$



$

6,383



$


 

Weyerhaeuser Company

Total Company Statistics

Q1.2016 Analyst Package




Preliminary results, subject to audit






Special Items Included in Net Earnings (income tax affected)







in millions

Q4


Q1


December 31,

 2015


March 31,

 2016


March 31,

 2015

Net earnings attributable to Weyerhaeuser common shareholders

$

59



$

70



$

90


Plum Creek merger-related costs

14



98




Gain on sale of non-strategic asset



(22)




Restructuring, impairments and other charges

5



4



9


Impairment charge recorded by equity method affiliate

56






Tax adjustments

(13)






Net earnings attributable to Weyerhaeuser common shareholders before special items

$

121



$

150



$

99









Q4


Q1


December 31,

 2015


March 31,

 2016


March 31,

 2015

Net earnings per diluted share attributable to Weyerhaeuser common shareholders

$

0.11



$

0.11



$

0.17


Plum Creek merger-related costs

0.03



0.15




Gain on sale of non-strategic asset



(0.03)




Restructuring, impairments and other charges

0.01



0.01



0.02


Impairment charge recorded by equity method affiliate

0.12






Tax adjustments

(0.03)






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

$

0.24



$

0.24



$

0.19



Selected Total Company Items


in millions

Q4


Q1


December 31,

 2015


March 31,

 2016


March 31,

 2015

Pension and postretirement costs:






Pension and postretirement costs allocated to business segments

$

13



$

11



$

13


Pension and postretirement credits not allocated

(3)



(12)



(3)


Accelerated pension costs included in Plum Creek merger-related costs (not allocated)



5




Total company pension and postretirement costs

$

10



$

4



$

10








Cash spent for capital expenditures

$

(174)



$

(73)



$

(89)


 


Weyerhaeuser Company

Timberlands Segment

Q1.2016 Analyst Package




Preliminary results, subject to audit













Segment Statement of Operations








in millions


Q4.2015


Q1.2016


Q1.2015

Sales to unaffiliated customers

$

312



$

387



$

323


Intersegment sales

205



222



228


Total net sales

517



609



551


Cost of products sold

390



459



395


Gross margin

127



150



156


Selling expenses

1



1



2


General and administrative expenses

21



28



21


Research and development expenses

6



4



3


Other operating income, net

(8)



(12)



(9)


Operating income

107



129



139


Interest income and other






Net contribution to earnings

$

107



$

129



$

139









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








in millions


Q4.2015


Q1.2016


Q1.2015

Operating income

$

107



$

129



$

139


Depreciation, depletion and amortization

53



70



53


Adjusted EBITDA*

$

160



$

199



$

192


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








Selected Segment Items










Q4.2015


Q1.2016


Q1.2015

Total decrease (increase) in working capital (1)

$

4



$

(53)



$

(26)


Cash spent for capital expenditures

$

(17)



$

(20)



$

(24)


(1) Working capital does not include cash balances. Represents the change in combined working capital of Timberlands and Real Estate & ENR.



Segment Statistics(2)











Q4.2015


Q1.2016


Q1.2015

Third Party

Net Sales

(millions)

Delivered logs:







West


$

203



$

215



$

210


South


61



101



58


North




13




Canada


7



7



8


Total delivered logs

271



336



276


Stumpage and pay-as-cut timber

10



15



4


Products from international operations

18



16



24


Recreational and other lease revenue

7



6



6


Other


6



14



13


Total


$

312



$

387



$

323


Delivered Logs

Third Party Sales

Realizations

(per ton)

West


$

101.54



$

100.71



$

104.36


South


$

36.87



$

35.59



$

37.08


North


$



$

59.31



$


Canada


$

43.06



$

42.98



$

43.43


International


$

16.60



$

15.73



$

17.55


Delivered Logs

Third Party Sales

Volumes

(tons, thousands)

West 

(conversion factor of 1.056 m3 = 1 ton)

2,005



2,133



2,008


South

(conversion factor of 0.818 m3 = 1 ton)

1,636



2,844



1,555


North




210




Canada 

(conversion factor of 1.244 m3 = 1 ton)

167



169



196


International

(conversion factor of 0.907 m3 = 1 ton)

158



146



165


Total


3,966



5,502



3,924


Fee Harvest Volumes

(tons, thousands)

West 

(conversion factor of 1.056 m3 = 1 ton)

2,596



2,801



2,757


South 

(conversion factor of 0.818 m3 = 1 ton)

3,565



5,030



3,341


North




260




International

(conversion factor of 0.907 m3 = 1 ton)

255



299



263


Total


6,416



8,390



6,361


(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.

 

Weyerhaeuser Company

Real Estate, Energy and
Natural Resources Segment

Q1.2016 Analyst Package

Preliminary results, subject to audit











Segment Statement of Operations








in millions


Q4.2015


Q1.2016


Q1.2015

Total net sales

$

32



$

39



$

34


Cost of products sold

5



20



10


Gross margin

27



19



24


General and administrative expenses

3



4



1


Other operating income, net

(3)






Operating income

27



15



23


Equity earnings (loss) from joint ventures(1)






Interest income and other






Net contribution to earnings

$

27



$

15



$

23


(1) Equity earnings (loss) from joint ventures attributed to the Real Estate and ENR segment are generated from our investments in our real estate development ventures.








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








in millions


Q4.2015


Q1.2016


Q1.2015

Operating income

27



15



23


Depreciation, depletion and amortization

1



2




Basis of real estate sold

5



17



10


Adjusted EBITDA*

$

33



$

34



$

33


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








Selected Segment Items










Q4.2015


Q1.2016


Q1.2015

Cash spent for capital expenditures

$



$



$









Segment Statistics









Q4.2015


Q1.2016


Q1.2015

Net Sales

(millions)

Real Estate

$

25



$

30



$

27


Energy and natural resources

$

7



$

9



$

7


Acres sold

Real Estate

6,765



15,225



14,375


Price per acre

Real Estate

$

3,450



$

1,980



$

1,820


 

Weyerhaeuser Company

Wood Products Segment

Q1.2016 Analyst Package




Preliminary results, subject to audit













Segment Statement of Operations








in millions


Q4.2015


Q1.2016


Q1.2015

Sales to unaffiliated customers

$

922



$

979



$

923


Intersegment sales

21



22



19


Total net sales

943



1,001



942


Cost of products sold

841



862



829


Gross margin

102



139



113


Selling expenses

25



22



23


General and administrative expenses

28



27



27


Research and development expenses



1




Restructuring, closures and impairment

9



1




Other operating costs (income), net



1



1


Operating income

40



87



62


Interest income and other






Net contribution to earnings

$

40



$

87



$

62









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








in millions


Q4.2015


Q1.2016


Q1.2015

Operating income

$

40



$

87



$

62


Depreciation, depletion and amortization

27



30



26


Special items

8






Adjusted EBITDA*

$

75



$

117



$

88


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








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










Q4.2015


Q1.2016


Q1.2015

Restructuring, impairments, and other charges

$

(8)



$



$









Selected Segment Items










Q4.2015


Q1.2016


Q1.2015

Total decrease (increase) in working capital (1)

$

79



$

(132)



$

(99)


Cash spent for capital expenditures

$

(122)



$

(29)



$

(37)


(1) Working capital does not include cash balances.


Segment Statistics








in millions, except for third-party sales realizations

Q4.2015


Q1.2016


Q1.2015

Structural Lumber

(board feet)

Third party net sales

$

402



$

419



$

434


Third party sales realizations

$

360



$

364



$

403


Third party sales volumes(2)

1,114



1,152



1,075


Production volumes

1,035



1,129



1,043


Engineered Solid

Section

(cubic feet)

Third party net sales

$

105



$

109



$

94


Third party sales realizations

$

1,987



$

1,971



$

1,965


Third party sales volumes(2)

5.3



5.5



4.8


Production volumes

5.1



5.6



5.0


Engineered

I-joists

(lineal feet)

Third party net sales

$

68



$

66



$

61


Third party sales realizations

$

1,515



$

1,507



$

1,510


Third party sales volumes(2)

45



44



41


Production volumes

44



46



43


Medium Density

Fiberboard

(square feet 3/4')

Third party net sales

$



$

20



$


Third party sales realizations

$



$

660



$


Third party sales volumes(2)



30




Production volumes



25




Oriented Strand

Board

(square feet 3/8')

Third party net sales

$

160



$

163



$

137


Third party sales realizations

$

221



$

214



$

196


Third party sales volumes(2)

723



759



700


Production volumes

697



749



704


Softwood Plywood

(square feet 3/8')

Third party net sales

$

27



$

35



$

33


Third party sales realizations

$

308



$

317



$

366


Third party sales volumes(2)

91



110



89


Production volumes

57



88



61


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

 

Weyerhaeuser Company

Cellulose Fibers Segment

Q1.2016 Analyst Package




Preliminary results, subject to audit













Segment Statement of Operations








in millions


Q4.2015


Q1.2016


Q1.2015

Total net sales

$

475



$

430



$

447


Cost of products sold

393



386



394


Gross margin

82



44



53


Selling expenses

4



4



3


General and administrative expenses

17



18



17


Research and development expenses

1



1



2


Other operating income, net

(7)



(9)



(8)


Operating income

67



30



39


Equity loss from joint venture(1)

(87)



(2)



(6)


Net contribution to earnings

$

(20)



$

28



$

33


(1) Equity loss from joint ventures attributed to the Cellulose Fibers segment are generated from our investment in our newsprint and publishing papers venture. Q4 2015 includes an $84 million non-cash charge for our share of an asset impairment recorded by this venture.








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








in millions


Q4.2015


Q1.2016


Q1.2015

Operating income

67



30



39


Depreciation, depletion and amortization

38



38



39


Adjusted EBITDA*

$

105



$

68



$

78


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








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










Q4.2015


Q1.2016


Q1.2015

Impairment charge recorded by Newsprint Venture

$

(84)



$



$



Selected Segment Items










Q4.2015


Q1.2016


Q1.2015

Total decrease (increase) in working capital (2)

$

(13)



$

(2)



$

40


Cash spent for capital expenditures

$

(33)



$

(22)



$

(27)


(2) Working capital does not include cash balances.








Segment Statistics










Q4.2015


Q1.2016


Q1.2015

Pulp

(air-dry metric tons)

Third party net sales (millions)

$

388



$

351



$

360


Third party sales realizations

$

800



$

755



$

854


Third party sales volumes (thousands)

484



464



421


Production volumes (thousands)

481



457



442


Liquid

Packaging

Board

(metric tons)

Third party net sales (millions)

$

73



$

67



$

74


Third party sales realizations

$

1,203



$

1,068



$

1,194


Third party sales volumes (thousands)

61



63



62


Production volumes (thousands)

63



64



60


 

Weyerhaeuser Company

Unallocated Items

Q1.2016 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, equity earnings from our Timberland Venture, and the LIFO reserve.







Contribution to Earnings







in millions

Q4.2015


Q1.2016


Q1.2015

Unallocated corporate function expenses

$

(7)



$

(9)



$

(9)


Unallocated share-based compensation

(4)



(2)



3


Unallocated pension & postretirement credits

3



12



3


Foreign exchange gains (losses)

(6)



13



(29)


Elimination of intersegment profit in inventory and LIFO

1



(6)



(12)


Gain on sale of non-strategic asset



36




Plum Creek merger-related costs

(14)



(110)




Restructuring, impairments and other charges

(1)



(6)



(14)


Other

4



(3)



(5)


Operating income (loss)

(24)



(75)



(63)


Equity earnings from joint venture(1)



5




Interest income and other

9



9



9


Net contribution to earnings

$

(15)



$

(61)



$

(54)


(1) Equity earnings from joint venture included in Unallocated Items is generated from our investment in our timberland venture.







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







in millions

Q4.2015


Q1.2016


Q1.2015

Operating income (loss)

(24)



(75)



(63)


Depreciation, depletion and amortization

1



2



5


Non-operating pension and postretirement credits

(3)



(12)



(3)


Special items

14



80



13


Adjusted EBITDA*

$

(12)



$

(5)



$

(48)


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












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








Q4.2015


Q1.2016


Q1.2015

Gain on sale of non-strategic asset

$



$

36



$


Plum Creek merger-related costs

(14)



(110)




Restructuring, impairments and other charges



(6)



(13)


Total

$

(14)



$

(80)



$

(13)








Unallocated Selected Items








Q4.2015


Q1.2016


Q1.2015

Cash spent for capital expenditures

$

(2)



$

(2)



$

(1)








 

For more information contact: 

Analysts - Beth Baum or Krista Kochivar (253) 924-2058


Media - Kate Tate (206) 467-3676

Logo - http://photos.prnewswire.com/prnh/20120111/AQ34535LOGO

 

SOURCE Weyerhaeuser Company

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