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Weyerhaeuser Reports Second Quarter Results

-- Wood Products reports strongest second quarter earnings in over a decade

-- Announced sale of pulp and liquid packaging board facilities for approximately $2.5 billion; Cellulose Fibers reported as discontinued operations

-- Repurchased over $830 million of common shares

-- Includes full quarter of Plum Creek results

Aug 5, 2016

FEDERAL WAY, Wash., Aug. 5, 2016 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported second quarter net earnings to common shareholders of $157 million, or $0.21 per diluted share, on net sales from continuing operations of $1.7 billion. This compares with net earnings of $133 million, or $0.26 per diluted share, on net sales from continuing operations of $1.3 billion for the same period last year.

Weyerhaeuser Company logo

Second quarter results include after-tax earnings of $38 million from discontinued operations. Discontinued operations include the entirety of the company's Cellulose Fibers segment, which is comprised of pulp mills, a liquid packaging board facility, and a printing papers joint venture. Second quarter results also include net after-tax charges of $11 million from special items.  Excluding these items, the company reported net earnings of $130 million, or $0.17 per diluted share for the second quarter. This compares with net earnings from continuing operations before special items of $114 million for the same period last year and $126 million for first quarter of 2016.

"Our businesses delivered solid second quarter operating results, with Wood Products capitalizing on improving markets and ongoing operational excellence initiatives to report its strongest quarter in over a decade," said Doyle R. Simons, president and CEO. "During the quarter we also announced the sale of our pulp and liquid packaging board facilities, repurchased over $830 million of common shares, and made strong progress on merger integration activities. Going forward, we remain relentlessly focused on successfully integrating Plum Creek, and fully capturing cost and operational synergies to drive superior value for our shareholders."

WEYERHAEUSER FINANCIAL HIGHLIGHTS

Weyerhaeuser merged with Plum Creek Timber Company, Inc. (Plum Creek) on February 19, 2016.  Amounts presented below include the results of Plum Creek from the merger date of February 19, 2016, forward.  The financial statements presented within this release do not include Plum Creek's financial results for any period prior to the merger date.

During the second quarter of 2016, Weyerhaeuser announced the sale of its Cellulose Fibers pulp mills and Liquid Packaging Board business.  Results for the Cellulose Fibers segment are presented as discontinued operations. All periods presented have been revised to separate the results of discontinued operations from the results of our continuing operations.

WEYERHAEUSER FINANCIAL HIGHLIGHTS

2016


2016


2015


(millions, except per share data)

1Q


2Q


2Q


Net sales

$1,405


$1,655


$1,345









Net earnings attributable to Weyerhaeuser common shareholders

$70


$157


$133


Weighted average shares outstanding, diluted(1)

635


748


520


Earnings per diluted share

$0.11


$0.21


$0.26









Net earnings from continuing operations attributable to Weyerhaeuser common shareholders before special items(2)

$126


$130


$114


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

$0.20


$0.17


$0.22









Adjusted EBITDA(3)

$336


$413


$278









(1) 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 58 million common shares for $1.695 billion under the $2.5 billion repurchase program announced in conjunction with the merger transaction.  At the end of the second quarter of 2016, the company had approximately 733 million common shares outstanding.

(2) After-tax special items for second quarter 2016 include $4 million of Plum Creek merger-related costs and $7 million of legal expense.  Special items for first quarter 2016 include $98 million of Plum Creek merger-related costs and $22 million gain on the sale of the company's Federal Way headquarters campus.

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

TIMBERLANDS

FINANCIAL HIGHLIGHTS (millions)

1Q 2016


2Q 2016


Change

Net sales

$609


$664


$55

Contribution to pre-tax earnings

$129


$125


($4)

Adjusted EBITDA

$199


$220


$21

2Q 2016 Performance - Timberlands earnings declined slightly compared with first quarter. Adjusted EBITDA, however, improved by 10 percent primarily due to higher fee harvest volumes. Non-cash depletion and amortization expense increased following a full quarter of higher depletion rates resulting from acquisition accounting.

Average realizations for Western and Southern logs declined modestly, primarily due to mix.  In the West, domestic and China sales increased while Japan volumes decreased following an announced delay in a higher consumption tax. Southern silviculture expenses and Western logging costs increased seasonally.

3Q 2016 Outlook - Weyerhaeuser anticipates slightly lower earnings and Adjusted EBITDA from the Timberlands segment in the third quarter. In the West, the company expects comparable fee harvest volumes, seasonally higher per unit logging costs and slightly lower export prices. In the South, the company anticipates increased fee harvest volumes offset by seasonally higher silviculture expense.

REAL ESTATE, ENERGY AND NATURAL RESOURCES

FINANCIAL HIGHLIGHTS (millions)

1Q 2016


2Q 2016


Change

Net sales

$39


$38


($1)

Contribution to pre-tax earnings

$15


$12


($3)

Adjusted EBITDA

$34


$28


($6)

2Q 2016 Performance - Slightly lower Real Estate sales were partially offset by higher earnings from Energy and Natural Resources operations.

3Q 2016 Outlook - Weyerhaeuser expects significantly higher earnings and Adjusted EBITDA in the second half of 2016 with nearly all of the improvement coming from Real Estate sales in the fourth quarter.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS (millions)

1Q 2016


2Q 2016


Change

Net sales

$1,001


$1,168


$167

Contribution to pre-tax earnings

$87


$156


$69

Adjusted EBITDA

$117


$189


$72

2Q 2016 Performance - Average lumber realizations increased 10 percent and average realizations for oriented strand board increased 12 percent compared with first quarter. Sales volumes increased seasonally, log costs declined, and manufacturing costs improved in several product lines as a result of operational excellence initiatives.

3Q 2016 Outlook - Weyerhaeuser expects significantly higher earnings and Adjusted EBITDA from the Wood Products segment in the third quarter. The company anticipates improved price realizations across most product lines.

DISCONTINUED OPERATIONS

Discontinued operations include the company's Cellulose Fibers segment, which consists of pulp mills, a liquid packaging board facility, and a printing papers joint venture. These results correspond to assets and liabilities that have been reclassified as discontinued operations on our balance sheet as of June 30, 2016.

FINANCIAL HIGHLIGHTS (millions)

1Q 2016


2Q 2016


Change

Total net sales

$430


$456


$26

Earnings from discontinued operations before income taxes

$29


$52


$23

Income taxes

($9)


($14)


($5)

Net earnings from discontinued operations

$20


$38


$18

2Q 2016 Performance - Average sales realizations for pulp and liquid packaging increased, liquid packaging sales volume improved, and maintenance and energy costs declined.

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 14,000 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 August 5 to discuss second quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on August 5.

To join the conference call from within North America, dial 877-296-9413 (access code: 3192733) at least 15 minutes prior to the call. Those calling from outside North America should dial 706-679-2458 (access code: 3192733). Replays will be available for two weeks at 855-859-2056 (access code: 3192733) from within North America and at 404-537-3406 (access code: 3192733) 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.  The factors listed below, as well as factors described from time to time in our filings with the Securities and Exchange Commission, and other factors not described herein or therein, 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 risks materialize or if any of our assumptions proves to be inaccurate, our expectations may not be realized, and there is no guarantee what, if any, effect such risks or inaccurate assumptions will have on our results of operations, cash flow or financial condition.   Unless otherwise indicated, all forward-looking statements are as of the date they are made, and we undertake no obligation to update these forward-looking statements, whether as a result of new information, the occurrence of future events or otherwise.

Some of the forward-looking statements discuss the company's plans, strategies, expectations and intentions.  They include words such as "expects," "may," "will,"  "anticipates,"  and "plans," and phrases such as "going forward," and other variations of these and similar words and phrases, any one or more of which may be used in a positive or negative context.

This release specifically contains forward-looking statements regarding the company's expectations during the third quarter and second half of 2016, including without limitation with respect to: earnings; Adjusted EBITDA; price realizations across Wood Products lines; timber harvest volumes, logging costs and silviculture expenses; log export prices; real estate sales; and, more generally, cost and operational synergies.

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 and capital 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, including without limitation the realization of cost and operational synergies;
  • 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.

For more information contact:


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



Media - Kate Tate (206) 467-3676

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 June 30, 2016:

DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate & ENR


Wood Products


Unallocated Items


Total

Adjusted EBITDA by Segment:










Net earnings









$

168


Earnings from discontinued operations, net of income taxes









(38


Interest expense, net of capitalized interest









114


Income taxes









31


Net contribution to earnings

$

125



$

12



$

156



$

(18)



$

275


Equity (earnings) loss from joint ventures







(7)



(7


Interest income and other







(10)



(10


Operating income

125



12



156



(35)



258


Depreciation, depletion and amortization

95



3



33



2



133


Basis of real estate sold



13







13


Non-operating pension and postretirement credits







(10)



(10


Special items(1)







19



19


Adjusted EBITDA

$

220



$

28



$

189



$

(24)



$

413


(1)

Pre-tax special items include $8 million of Plum Creek merger-related costs and $11 million of legal expense.

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

DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate & ENR


Wood Products


Unallocated Items


Total

Adjusted EBITDA by Segment:










Net earnings









$

81


Earnings from discontinued operations, net of income taxes









(20)


Interest expense, net of capitalized interest









95


Income taxes









11


Net contribution to earnings

$

129



$

15



$

87



$

(64)



$

167


Equity (earnings) loss from joint ventures







(5)



(5)


Interest income and other







(9)



(9)


Operating income

129



15



87



(78)



153


Depreciation, depletion and amortization

70



2



30



2



104


Basis of real estate sold



17







17


Non-operating pension and postretirement credits







(12)



(12)


Special items(1)







74



74


Adjusted EBITDA

$

199



$

34



$

117



$

(14)



$

336




(1)

Pre-tax special items include a $36 million gain on the sale of nonstrategic assets and $110 million of Plum Creek merger-related costs.

The table below reconciles Adjusted EBITDA for the quarter ended June 30, 2015:

DOLLAR AMOUNTS IN MILLIONS

Timberlands


Real Estate & ENR


Wood Products


Unallocated Items


Total

Adjusted EBITDA by Segment:










Net earnings









$

144


Earnings from discontinued operations, net of income taxes









(19)


Interest expense, net of capitalized interest









85


Income taxes









(1)


Net contribution to earnings

$

117



$

10



$

71



$

11



$

209


Equity (earnings) loss from joint ventures










Interest income and other







(9)



(9)


Operating income

117



10



71



2



200


Depreciation, depletion and amortization

51





27



2



80


Basis of real estate sold



1







1


Non-operating pension and postretirement credits







(3)



(3)


Adjusted EBITDA

$

168



$

11



$

98



$

1



$

278




Weyerhaeuser Company

Exhibit 99.2

Q2.2016 Analyst Package

Preliminary results (unaudited)











Consolidated Statement of Operations(1)(2)











in millions

Q1


Q2


Year-to-date


March 31,
 2016


June 30,
 2016


June 30,
 2015


June 30,
 2016


June 30,
 2015

Net sales

$

1,405



$

1,655



$

1,345



$

3,060



$

2,625


Cost of products sold

1,089



1,258



1,057



2,347



2,050


Gross margin

316



397



288



713



575


Selling expenses

23



22



24



45



49


General and administrative expenses

76



94



63



170



129


Research and development expenses

5



4



5



9



8


Charges for integration and restructuring, closures and asset impairments

111



14





125



14


Other operating costs (income), net

(52)



5



(4)



(47)



25


Operating income from continuing operations

153



258



200



411



350


Equity earnings from joint ventures

5



7





12




Interest income and other

9



10



9



19



18


Interest expense, net of capitalized interest

(95)



(114)



(85)



(209)



(167)


Earnings from continuing operations before income taxes

72



161



124



233



201


Income taxes

(11)



(31)



1



(42)



(8)


Earnings from continuing operations

61



130



125



191



193


Earnings from discontinued operations, net of income taxes

20



38



19



58



52


Net earnings

81



168



144



249



245


Dividends on preference shares

(11)



(11)



(11)



(22)



(22)


Net earnings attributable to Weyerhaeuser common shareholders

$

70



$

157



$

133



$

227



$

223



(1) Discontinued operations as presented herein consist of the operations of our Cellulose Fibers segment. The corresponding assets and liabilities have been classified as held for sale on our balance sheet as of June 30, 2016. All periods presented have been revised to separate the results of discontinued operations from the results of our continuing operations. Detailed operating results of discontinued operations are presented on page 10.

(2) Amounts presented reflect the balances and results of operations acquired in our merger with Plum Creek Timber, Inc., beginning on the merger date of February 19, 2016.



Per Share Information



Q1


Q2


Year-to-date


March 31,
 2016


June 30,
 2016


June 30,
 2015


June 30,
 2016


June 30,
 2015

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

Continuing operations

$

0.08



$

0.16



$

0.22



$

0.25



$

0.33


Discontinued operations

0.03



0.05



0.04



0.08



0.10


Net earnings per share

$

0.11



$

0.21



$

0.26



$

0.33



$

0.43












Dividends paid per common share

$

0.31



$

0.31



$

0.29



$

0.62



$

0.58












Weighted average shares outstanding (in thousands):










Basic

632,004



743,140



516,626



687,572



520,008


Diluted

634,872



747,701



519,804



691,060



523,595












Common shares outstanding at end of period (in thousands)

759,044



733,010



514,121



733,010



514,121


















Weyerhaeuser Company

Q2.2016 Analyst Package

Preliminary results (unaudited)











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











in millions

Q1


Q2


Year-to-date


March 31,
 2016


June 30,
 2016


June 30,
 2015


June 30,
 2016


June 30,
 2015

Net earnings

$

81



$

168



$

144



$

249



$

245


Earnings from discontinued operations, net of income taxes

(20)



(38)



(19)



(58)



(52)


Equity earnings from joint ventures

(5)



(7)





(12)




Interest income and other

(9)



(10)



(9)



(19)



(18)


Interest expense, net of capitalized interest

95



114



85



209



167


Income taxes

11



31



(1)



42



8


Operating income from continuing operations

153



258



200



411



350


Depreciation, depletion and amortization

104



133



80



237



164


Basis of real estate sold

17



13



1



30



11


Non-operating pension and postretirement credits

(12)



(10)



(3)



(22)



(6)


Special items

74



19





93



13


Adjusted EBITDA*

$

336



$

413



$

278



$

749



$

532












*Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Beginning in the first quarter of 2016, we 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.



Special Items Included in Net Earnings (income tax affected)











in millions

Q1


Q2


Year-to-date


March 31,
 2016


June 30,
 2016


June 30,
 2015


June 30,
 2016


June 30,
 2015

Net earnings attributable to Weyerhaeuser common shareholders

$

70



$

157



$

133



$

227



$

223


Plum Creek merger- and integration-related costs

98



4





102




Gain on sale of non-strategic asset

(22)







(22)




Legal expense



7





7




Restructuring, impairments and other charges









9


Net earnings attributable to Weyerhaeuser common shareholders before special items

146



168



133



314



232


Earnings from discontinued operations, net of income taxes

(20)



(38)



(19)



(58)



(52)


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

$

126



$

130



$

114



$

256



$

180












per share

Q1


Q2


Year-to-date


March 31,
 2016


June 30,
 2016


June 30,
 2015


June 30,
 2016


June 30,
 2015

Net earnings per diluted share attributable to Weyerhaeuser common shareholders

$

0.11



$

0.21



$

0.26



$

0.33



$

0.43


Plum Creek merger- and integration-related costs

0.15







0.14




Gain on sale of non-strategic asset

(0.03)







(0.03)




Legal expense



0.01





0.01




Restructuring, impairments and other charges









0.01


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

0.23



0.22



0.26



0.45



0.44


Earnings from discontinued operations, net of income taxes

(0.03)



(0.05)



(0.04)



(0.08)



(0.10)


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

$

0.20



$

0.17



$

0.22



$

0.37



$

0.34










Weyerhaeuser Company

Q2.2016 Analyst Package

Preliminary results (unaudited)



Consolidated Balance Sheet







in millions

March 31,
 2016


June 30,
 2016


December 31,
 2015


ASSETS






Current assets:






Cash and cash equivalents

$

411



$

485



$

1,011


Receivables, less allowances

382



409



276


Receivables for taxes

25



7



30


Inventories

423



387



325


Prepaid expenses and other current assets

123



132



63


Assets of discontinued operations

1,929



1,908



1,934


Total current assets

3,293



3,328



3,639


Property and equipment, net

1,446



1,462



1,233


Construction in progress

151



172



144


Timber and timberlands at cost, less depletion charged to disposals

14,547



14,474



6,479


Minerals and mineral rights, net

325



319



14


Investments in and advances to joint ventures

938



905




Goodwill

40



40



40


Deferred tax assets

291



250



254


Other assets

409



424



302


Restricted financial investments held by variable interest entities

615



615



615


Total assets

$

22,055



$

21,989



$

12,720








LIABILITIES AND EQUITY






Current liabilities:






Notes payable

$

4



$

1



$

4


Accounts payable

284



300



204


Accrued liabilities

483



590



427


Liabilities of discontinued operations

674



666



690


Total current liabilities

1,445



1,557



1,325


Note payable to timberland venture

835



830




Long-term debt

7,715



8,013



4,787


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

511



511



511


Deferred pension and other postretirement benefits

983



926



987


Deposit received from contribution of timberlands to related party



437




Other liabilities

285



285



241


Total liabilities

11,774



12,559



7,851


Total equity

10,281



9,430



4,869


Total liabilities and equity

$

22,055



$

21,989



$

12,720














Weyerhaeuser Company

Q2.2016 Analyst Package

Preliminary results (unaudited)

Consolidated Statement of Cash Flows











in millions

Q1


Q2


Year-to-date


March 31,
 2016


June 30,
 2016


June 30,
 2015


June 30,
 2016


June 30,
 2015

Cash flows from operations:










Net earnings

$

81



$

168



$

144



$

249



$

245


Noncash charges (credits) to income:










Depreciation, depletion and amortization

142



147



118



289



241


Basis of real estate sold

17



13



1



30



11


Deferred income taxes, net

18



38



3



56



16


Pension and other postretirement benefits

4



1



11



5



21


Other noncash charges (credits)

(33)



16



2



(17)



42


Change in:










Receivables less allowances

(47)



(43)



(10)



(90)



(26)


Receivable for taxes

10



25



12



35



14


Inventories

(43)



60



42



17



(15)


Prepaid expenses

(1)





9



(1)



(2)


Accounts payable and accrued liabilities

(70)



106



66



36



(25)


Pension and postretirement contributions

(17)



(12)



(19)



(29)



(39)


Distributions received from joint ventures

5







5




Other

(19)



(27)



(12)



(46)



(29)


Net cash from operations

47



492



367



539



454












Cash flows from investing activities:










Capital expenditures:










Purchases of property and equipment

(57)



(83)



(99)



(140)



(170)


Timberlands reforestation costs

(16)



(18)



(9)



(34)



(27)


Acquisition of timberlands

(6)



(2)





(8)



(32)


Proceeds from sale of assets

70



13



4



83



6


Proceeds from contribution of timberlands to related party



440





440




Distributions received from joint ventures

24



3





27




Cash and cash equivalents acquired in the merger with Plum Creek

9







9




Other



(3)



12



(3)



12


Cash from (used in) investing activities

24



350



(92)



374



(211)












Cash flows from financing activities:










Cash dividends on common shares

(241)



(228)



(149)



(469)



(301)


Cash dividends on preference shares



(11)



(11)



(11)



(11)


Proceeds from issuance of long-term debt

1,098



300





1,398




Payments of long-term debt

(720)



(3)





(723)




Repurchase of common stock

(798)



(831)



(154)



(1,629)



(407)


Other

(7)



8



2



1



17


Cash from financing activities

(668)



(765)



(312)



(1,433)



(702)












Net change in cash and cash equivalents

(597)



77



(37)



(520)



(459)












Cash and cash equivalents from continuing operations at beginning of period

1,011



411



1,151



1,011



1,577


Cash and cash equivalents from discontinued operations at beginning of period

1



4



7



1



3


Cash and cash equivalents at beginning of period

1,012



415



1,158



1,012



1,580












Cash and cash equivalents from continuing operations at end of period

411



485



1,117



485



1,117


Cash and cash equivalents from discontinued operations at end of period

4



7



4



7



4


Cash and cash equivalents at end of period

$

415



$

492



$

1,121



$

492



$

1,121












Cash paid (received) during the year for:










Interest, net of amount capitalized

$

133



$

92



$

58



$

225



$

172


Income taxes

$

(13)



$

(12)



$

4



$

(25)



$

5












Noncash investing and financing activities:










Equity issued as consideration for our merger with Plum Creek

$

6,383



$



$



$

6,383



$






Weyerhaeuser Company

Total Company Statistics

Q2.2016 Analyst Package






Preliminary results (unaudited)




















Selected Total Company Items


in millions

Q1


Q2


Year-to-date


March 31,
 2016


June 30,
 2016


June 30,
 2015


June 30,
 2016


June 30,
 2015

Pension and postretirement costs:










Pension and postretirement costs allocated to business segments

$

7



$

8



$

9



$

15



$

19


Pension and postretirement credits not allocated

(12)



(10)



(3)



(22)



(6)


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

5







5




Total pension and postretirement costs for continuing operations



(2)



6



(2)



13


Pension and postretirement service costs directly attributable to discontinued operations

4



3



5



7



8


Total company pension and postretirement costs

$

4



$

1



$

11



$

5



$

21












Cash spent for capital expenditures for continuing operations

$

(51)



$

(89)



$

(77)



$

(140)



$

(139)






Weyerhaeuser Company

Timberlands Segment

Q2.2016 Analyst Package

Preliminary results (unaudited)











Segment Statement of Operations











in millions

Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Sales to unaffiliated customers

$

387



$

471



$

328



$

858



$

651


Intersegment sales

222



193



187



415



415


Total net sales

609



664



515



1,273



1,066


Cost of products sold

459



509



383



968



778


Gross margin

150



155



132



305



288


Selling expenses

1



2



1



3



3


General and administrative expenses

28



32



19



60



40


Research and development expenses

4



4



4



8



7


Other operating income, net

(12)



(8)



(9)



(20)



(18)


Operating income and Net contribution to earnings

$

129



$

125



$

117



$

254



$

256












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











in millions

Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Operating income

$

129



$

125



$

117



$

254



$

256


Depreciation, depletion and amortization

70



95



51



165



104


Adjusted EBITDA*

$

199



$

220



$

168



$

419



$

360







*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.
















Selected Segment Items














Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Total decrease (increase) in working capital (1)

$

(53)



$

28



$

52



$

(25)



$

26


Cash spent for capital expenditures

$

(20)



$

(31)



$

(17)



$

(51)



$

(41)



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



Segment Statistics(2)

















Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Third Party
Net Sales
(millions)

Delivered logs:











West


$

215



$

232



$

221



$

447



$

431


South


101



154



58



255



116


North


13



19





32




Other


7



7



3



14



11


Total delivered logs


336



412



282



748



558


Stumpage and pay-as-cut timber


15



23



10



38



14


Products from international operations


16



21



25



37



49


Recreational and other lease revenue


6



8



5



14



11


Other revenue


14



7



6



21



19


Total


$

387



$

471



$

328



$

858



$

651


Delivered Logs

Third Party Sales

Realizations

(per ton)

West


$

100.71



$

98.21



$

100.00



$

99.39



$

102.08


South


$

36.39



$

35.54



$

36.98



$

35.87



$

37.02


North


$

59.31



$

65.43



$



$

62.95



$


International


$

15.73



$

23.29



$

20.53



$

18.59



$

19.17


Delivered Logs

Third Party Sales

Volumes

(tons, thousands)(3)

West


2,133



2,363



2,207



4,496



4,215


South


2,781



4,340



1,582



7,121



3,137


North


210



292





502




International


146



89



197



235



362


Other


169



169



61



338



257


 Fee Harvest Volumes

(tons, thousands)(3)

West


2,801



2,980



2,662



5,781



5,419


South


5,030



7,061



3,559



12,091



6,900


North


260



454





714




International


299



248



242



547



505


Other




181





181





(2) The Western region includes Washington and Oregon. The Southern region includes Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas and Oklahoma. The Northern region includes West Virginia, Maine, New Hampshire, Vermont, Michigan, Wisconsin and Montana. Other includes our Canadian operations and managed Twin Creeks operations.

(3) Beginning in first quarter 2016, we report log sales and fee harvest volumes in tons. Prior period volumes have been converted from cubic meters to tons using annualized 2015 conversion factors as follows:

     West: 1.056 m3 = 1 ton
     South:  0.818 m3 = 1 ton
     Canada (in Other):  1.244 m3 = 1 ton
     International:  0.907 m3 = 1 ton







Weyerhaeuser Company


Real Estate, Energy and
Natural Resources Segment

Q2.2016 Analyst Package


Preliminary results (unaudited)














Segment Statement of Operations














in millions



Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Total net sales


$

39



$

38



$

13



$

77



$

47


Cost of products sold


20



19



2



39



12


Gross margin


19



19



11



38



35


Selling expenses











General and administrative expenses


4



8



2



12



3


Charges for integration, restructuring, closures and asset impairments




1





1




Other operating income, net




(2)



(1)



(2)



(1


Operating income


15



12



10



27



33


Equity earnings (loss) from joint ventures(1)











Net contribution to earnings


$

15



$

12



$

10



$

27



$

33




(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



Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Operating income


$

15



$

12



$

10



$

27



$

33


Depreciation, depletion and amortization


2



3





5




Basis of real estate sold


17



13



1



30



11


Adjusted EBITDA*


$

34



$

28



$

11



$

62



$

44




*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.














Selected Segment Items

















Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Cash spent for capital expenditures


$



$

(1)



$



$

(1)



$














Segment Statistics
















Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Net Sales
(millions)

Real Estate


$

30



$

26



$

8



$

56



$

35


Energy and natural resources


9



12



5



21



12


Total


$

39



$

38



$

13



$

77



$

47


Acres sold

Real Estate


15,225



10,020



1,220



25,245



15,595


Price per acre

Real Estate


$

1,980



$

2,555



$

4,490



$

2,210



$

2,025














Weyerhaeuser Company

Wood Products Segment

Q2.2016 Analyst Package

Preliminary results (unaudited)












Segment Statement of Operations












in millions


Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Sales to unaffiliated customers

$

979



$

1,146



$

1,004



$

2,125



$

1,927


Intersegment sales

22



22



22



44



41


Total net sales

1,001



1,168



1,026



2,169



1,968


Cost of products sold

862



957



903



1,819



1,732


Gross margin

139



211



123



350



236


Selling expenses

22



20



23



42



46


General and administrative expenses

27



30



26



57



53


Research and development expenses

1





1



1



1


Restructuring, closures and impairment

1



4





5




Other operating costs, net

1



1



2



2



3


Operating income and Net contribution to earnings

$

87



$

156



$

71



$

243



$

133













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












in millions


Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Operating income

$

87



$

156



$

71



$

243



$

133


Depreciation, depletion and amortization

30



33



27



63



53


Adjusted EBITDA*

$

117



$

189



$

98



$

306



$

186







*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.
















Selected Segment Items














Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Total decrease (increase) in working capital (1)

$

(132)



$

35



$

42



$

(97)



$

(57)


Cash spent for capital expenditures

$

(29)



$

(52)



$

(60)



$

(81)



$

(97)







(1) Working capital does not include cash balances.







Segment Statistics














in millions, except for third-party sales realizations


Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Structural Lumber
(board feet)

Third party net sales


$

419



$

498



$

450



$

917



$

884


Third party sales realizations


$

364



$

399



$

383



$

382



$

393


Third party sales volumes (2)


1,152



1,249



1,175



2,401



2,250


Production volumes


1,129



1,205



1,087



2,334



2,130


Engineered Solid
Section
(cubic feet)

Third party net sales


$

109



$

115



$

113



$

224



$

207


Third party sales realizations


$

1,971



$

1,922



$

2,032



$

1,946



$

2,001


Third party sales volumes (2)


5.5



6.0



5.6



11.5



10.4


Production volumes


5.6



5.9



5.6



11.5



10.6


Engineered
I-joists
(lineal feet)

Third party net sales


$

66



$

73



$

76



$

139



$

137


Third party sales realizations


$

1,507



$

1,471



$

1,502



$

1,488



$

1,506


Third party sales volumes (2)


44



50



50



94



91


Production volumes


46



46



48



92



91


Oriented Strand
Board
(square feet 3/8')

Third party net sales


$

163



$

182



$

147



$

345



$

284


Third party sales realizations


$

214



$

240



$

191



$

227



$

193


Third party sales volumes (2)


759



761



771



1,520



1,471


Production volumes


749



733



700



1,482



1,404


Softwood Plywood

(square feet 3/8')

Third party net sales


$

35



$

50



$

36



$

85



$

69


Third party sales realizations


$

317



$

382



$

354



$

352



$

360


Third party sales volumes (2)


110



131



101



241



190


Production volumes


88



111



63



199



124




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














Weyerhaeuser Company

Unallocated Items

Q2.2016 Analyst Package

Preliminary results (unaudited)











Unallocated items are gains or charges not related to or allocated to an individual operating segment. They include a portion of items such as: share-based compensation, 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

Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Unallocated corporate function expenses

$

(17)



$

(24)



$

(16)



$

(41)



$

(34)


Unallocated share-based compensation

(2)



1



1



(1)



4


Unallocated pension & postretirement credits

12



10



3



22



6


Foreign exchange gains (losses)

13



1



9



14



(20)


Elimination of intersegment profit in inventory and LIFO

(6)



(2)



18



(8)



4


Gain on sale of non-strategic asset

36



8





44




Charges for integration and restructuring, closures and asset impairments:









     Plum Creek merger- and integration-related costs

(110)



(8)





(118)




     Other restructuring, closures and asset impairments



(1)





(1)



(14)


Other

(4)



(20)



(13)



(24)



(18)


Operating income (loss)

(78)



(35)



2



(113)



(72)


Equity earnings from joint venture (1)

5



7





12




Interest income and other

9



10



9



19



18


Net contribution to earnings

$

(64)



$

(18)



$

11



$

(82)



$

(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

Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Operating income (loss)

$

(78)



$

(35)



$

2



$

(113)



$

(72)


Depreciation, depletion and amortization

2



2



2



4



7


Non-operating pension and postretirement credits

(12)



(10)



(3)



(22)



(6)


Special items

74



19





93



13


Adjusted EBITDA*

$

(14)



$

(24)



$

1



$

(38)



$

(58)







*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.











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












Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Plum Creek merger- and integration-related costs

(110)



(8)





(118)




Gain on sale of non-strategic asset

36







36




Legal expense



(11)





(11)




Restructuring, impairments and other charges









(13)


Total

$

(74)



$

(19)



$



$

(93)



$

(13)












Unallocated Selected Items












Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Cash spent for capital expenditures

$

(2)



$

(5)



$



$

(7)



$

(1)

















Weyerhaeuser Company

Discontinued Operations

Q2.2016 Analyst Package

Preliminary results (unaudited)














Discontinued operations consist of our Cellulose Fibers businesses, which were previously disclosed as a separate reportable business segment.












Discontinued Operations Statement of Operations












in millions


Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Total net sales

$

430



$

456



$

467



$

886



$

914


Costs of products sold

386



374



417



760



809


Gross margin

44



82



50



126



105


Selling expenses

4



3



4



7



7


General and administrative expenses

9



8



8



17



16


Research and development expenses

1



2



1



3



3


Charges for integration and restructuring, closures and asset impairments

6



25





31




Other operating income, net

(9)



(10)



(6)



(19)



(14


Operating income

33



54



43



87



93


Equity loss from joint venture

(2)



(1)



(7)



(3)



(13


Interest expense, net of capitalized interest

(2)



(1)



(3)



(3)



(4


Earnings from discontinued operations before income taxes

29



52



33



81



76


Income taxes

(9)



(14)



(14)



(23)



(24


Net earnings from discontinued operations

$

20



$

38



$

19



$

58



$

52













Discontinued Operations Selected Items












in millions


Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Depreciation, depletion and amortization

$

38



$

15



$

38



$

53



$

77


Cash spent for capital expenditures

$

(22)



$

(12)



$

(31)



$

(34)



$

(58













Discontinued Operations Statistics

















Q1.2016


Q2.2016


Q2.2015


YTD.2016


YTD.2015

Pulp

(air-dry metric tons)

Third party net sales (millions)


$

351



$

350



$

368



$

701



$

728


Third party sales realizations


$

755



$

762



$

823



$

758



$

838


Third party sales volumes (thousands)


464



460



448



924



869


Production volumes (thousands)


457



454



422



911



864


Liquid Packaging Board
(metric tons)

Third party net sales (millions)


$

67



$

85



$

84



$

152



$

158


Third party sales realizations


$

1,068



$

1,127



$

1,218



$

1,100



$

1,206


Third party sales volumes (thousands)


63



76



69



139



131


Production volumes (thousands)


64



65



64



129



124


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SOURCE Weyerhaeuser Company

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