Newsroom
Weyerhaeuser reports third quarter results
- Operating income increased over 30% compared with second quarter
- Adjusted EBITDA increased 12% on strong results in all businesses
- Completed sale of Uruguay operations for $402.5 million
Oct 27, 2017
SEATTLE, Oct. 27, 2017 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported third quarter net earnings of $130 million, or 17 cents per diluted share, on net sales of $1.9 billion. This compares with earnings from continuing operations of $162 million, or 21 cents per diluted share, on net sales of $1.7 billion for the same period last year. Adjusted EBITDA for the third quarter was $569 million compared with $434 million for the third quarter of last year.
Excluding after-tax special charges of $129 million, primarily comprised of previously announced charges for product remediation, the company reported net earnings of $259 million, or 34 cents per diluted share for the third quarter. This compares with net earnings from continuing operations before special items of $172 million for the same period last year and $212 million for the second quarter of 2017.
"I am very pleased with our third quarter performance, as each of our businesses delivered strong operating results despite various weather-related challenges in the quarter," said Doyle R. Simons, president and chief executive officer. "We also continued to simplify our business and strategically optimize our timberland portfolio by completing the sale of our Uruguay operations, and we redeemed our interest in the Twin Creeks joint venture in October. Looking forward, we remain focused on driving value for shareholders by delivering continued operational improvements and capturing the full benefit of improving market conditions."
WEYERHAEUSER FINANCIAL HIGHLIGHTS
During 2016, Weyerhaeuser sold its Cellulose Fibers businesses. Results for the Cellulose Fibers segment are presented as discontinued operations.
|
WEYERHAEUSER FINANCIAL HIGHLIGHTS |
2017 |
2017 |
2016 |
||||||
|
(millions, except per share data) |
2Q |
3Q |
3Q |
||||||
|
Net sales |
$1,808 |
$1,872 |
$1,709 |
||||||
|
Earnings from continuing operations |
$24 |
$130 |
$162 |
||||||
|
Net earnings |
$24 |
$130 |
$227 |
||||||
|
Earnings per diluted share from continuing operations |
$0.03 |
$0.17 |
$0.21 |
||||||
|
Net earnings per diluted share |
$0.03 |
$0.17 |
$0.30 |
||||||
|
Weighted average shares outstanding, diluted |
756 |
757 |
754 |
||||||
|
Net earnings from continuing operations before special items(1) |
$212 |
$259 |
$172 |
||||||
|
Net earnings from continuing operations per diluted share before special items |
$0.28 |
$0.34 |
$0.23 |
||||||
|
Adjusted EBITDA(2) |
$506 |
$569 |
$434 |
||||||
|
(1) Third quarter 2017 includes after-tax special charges of $118 million for product remediation, $4 million for a non-cash impairment, $4 million for countervailing and antidumping duties on Canadian softwood lumber the company sold into the United States and $3 million for Plum Creek merger-related costs. Second quarter 2017 includes after-tax special charges of $147 million for a non-cash impairment of the Uruguay operations, $31 million for product remediation, $8 million for countervailing and antidumping duties and $2 million for Plum Creek merger-related costs. Third quarter 2016 includes after-tax special charges of $10 million for Plum Creek merger-related costs. | |||||||||
|
(2) 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 of real estate sold, unallocated pension service costs 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) |
2Q 2017 |
3Q 2017 |
Change | ||
|
Net sales |
$632 |
$670 |
$38 | ||
|
Contribution to pre-tax earnings |
($12) |
$131 |
$143 | ||
|
Pre-tax charge for special items |
$147 |
$0 |
($147) | ||
|
Contribution to pre-tax earnings before special items |
$135 |
$131 |
($4) | ||
|
Adjusted EBITDA |
$222 |
$220 |
($2) |
3Q 2017 Performance - In the West, higher average sales realizations for domestic and export logs were more than offset by lower fee harvest volumes due to fire season related logging restrictions. In the South, log sales volumes increased, and average sales realizations were comparable to the second quarter, as slightly higher sawlog pricing was offset by a higher proportion of pulpwood sales. Forestry costs increased slightly.
4Q 2017 Outlook - Weyerhaeuser expects higher earnings and Adjusted EBITDA in the fourth quarter compared with the third quarter. In the West, the Company anticipates increased fee harvest volumes and slightly higher average log sales realizations, partially offset by higher road spending. In the South, the company anticipates slightly higher fee harvest volumes, more than offset by higher forestry expense due to weather-related deferral of third quarter activities. Average log sales realizations should be comparable to the third quarter.
REAL ESTATE, ENERGY & NATURAL RESOURCES
|
FINANCIAL HIGHLIGHTS (millions) |
2Q 2017 |
3Q 2017 |
Change | ||
|
Net sales |
$46 |
$82 |
$36 | ||
|
Contribution to pre-tax earnings |
$23 |
$47 |
$24 | ||
|
Adjusted EBITDA |
$37 |
$74 |
$37 |
3Q 2017 Performance - Earnings and Adjusted EBITDA increased compared with the second quarter due to seasonally higher Real Estate sales. Energy & Natural Resources royalties decreased slightly.
4Q 2017 Outlook - Weyerhaeuser expects significantly higher earnings and Adjusted EBITDA in the fourth quarter compared with third quarter. The company anticipates full year Adjusted EBITDA for the Real Estate, Energy & Natural Resources segment will be approximately $250 million.
WOOD PRODUCTS
|
FINANCIAL HIGHLIGHTS (millions) |
2Q 2017 |
3Q 2017 |
Change | ||
|
Net sales |
$1,293 |
$1,299 |
$6 | ||
|
Contribution to pre-tax earnings |
$177 |
$40 |
($137) | ||
|
Pre-tax charge for special items |
$61 |
$201 |
$140 | ||
|
Contribution to pre-tax earnings before special items |
$238 |
$241 |
$3 | ||
|
Adjusted EBITDA |
$274 |
$278 |
$4 |
3Q 2017 Performance - Average sales realizations improved compared with the second quarter, with oriented strand board realizations increasing 11 percent. Sales volumes for most products decreased slightly, operating rates declined, and per unit manufacturing costs increased due to downtime from fire season related operating constraints and planned maintenance.
Third quarter results include pre-tax special charges of $201 million, which are comprised of $190 million for product remediation, $6 million for a non-cash impairment and $5 million for softwood lumber countervailing and antidumping duties.
4Q 2017 Outlook - Weyerhaeuser anticipates fourth quarter earnings and Adjusted EBITDA will be comparable to the third quarter. The company expects modestly higher average sales realizations for lumber and oriented strand board will be partially offset by slightly higher Western log costs. In engineered wood products, the company anticipates seasonally lower sales volumes, higher input costs, and increased per unit manufacturing costs due to planned seasonal and maintenance downtime.
ABOUT WEYERHAEUSER
Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control nearly 13 million acres of timberlands in the U.S. and manage additional timberlands under long-term licenses in Canada. We manage these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. We are also one of the largest manufacturers of wood products. Our company is a real estate investment trust. In February 2016, we merged with Plum Creek Timber Company, Inc. In 2016, we generated $6.4 billion in net sales and employed approximately 10,400 people who serve customers worldwide. We are listed on the Dow Jones World Sustainability Index. Our common stock trades on the New York Stock Exchange under the symbol WY. Learn more at www.weyerhaeuser.com.
EARNINGS CALL INFORMATION
Weyerhaeuser will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on October 27, 2017, to discuss third quarter results.
To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on October 27, 2017.
To join the conference call from within North America, dial 877-296-9413 (access code: 43730130) at least 15 minutes prior to the call. Those calling from outside North America should dial 706-679-2458 (access code: 43730130). Replays will be available for two weeks at 855-859-2056 (access code: 43730130) from within North America and at 404-537-3406 (access code: 43730130) from outside North America.
FORWARD LOOKING STATEMENTS
This news release contains statements concerning the company's future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, including without limitation with respect to the following for the fourth quarter of 2017: earnings and Adjusted EBITDA for each of our business segments; log sale realizations and fee harvest volumes and related forestry expense; sales volumes across Wood Products product lines, expected sales realizations and volumes for lumber and oriented strand board and various manufacturing costs; and real estate sales volumes. These statements generally are identified by words such as "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," and expressions such as "will be," "will continue," "will likely result," and similar words and expressions. These statements are based on our current expectations and assumptions and are not guarantees of future performance. The realization of our expectations and the accuracy of our assumptions are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to:
- the effect of general economic conditions, including employment rates, interest rate levels, housing starts, availability of financing for home mortgages and strength of the U.S. dollar;
- market demand for our products, including market demand for our timberland properties with higher and better uses, which is related to, among other factors, the strength of the various U.S. business segments and U.S. and international economic conditions;
- changes in currency exchange rates and restrictions on international trade;
- performance of our manufacturing operations, including maintenance requirements;
- potential disruptions in our manufacturing operations;
- the level of competition from domestic and foreign producers;
- raw material availability and prices;
- the effect of weather;
- the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;
- energy prices;
- the successful execution of our internal plans and strategic initiatives, including restructuring and cost reduction initiatives;
- the successful and timely execution and integration of our strategic acquisitions, including our ability to realize expected benefits and synergies, and the successful and timely execution of our strategic divestitures, each of which is subject to a number of risks and conditions beyond our control including, but not limited to, timing and required regulatory approvals;
- transportation and labor availability and costs;
- federal tax policies;
- the effect of forestry, land use, environmental and other governmental regulations;
- legal proceedings;
- performance of pension fund investments and related derivatives;
- the effect of timing of retirements and changes in the market price of our common stock on charges for share-based compensation;
- the accuracy of our estimates of costs and expenses related to contingent liabilities;
- changes in accounting principles; and
- other factors described under "Risk Factors" in our 2016 Annual Report on Form 10-K as well as those set forth from time to time in our other public statements and other reports and filings with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.
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For more information contact: |
Analysts - Beth Baum (206) 539-3907 | |
|
Media - Anthony Chavez (206) 539-4406 |
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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, 2017: | |||||||||||||||||||
|
DOLLAR AMOUNTS IN MILLIONS |
Timberlands |
Real Estate |
Wood |
Unallocated |
Total | ||||||||||||||
|
Adjusted EBITDA by Segment: |
|||||||||||||||||||
|
Net earnings |
$ |
24 |
|||||||||||||||||
|
Earnings from discontinued operations, net of income taxes |
— |
||||||||||||||||||
|
Interest expense, net of capitalized interest |
100 |
||||||||||||||||||
|
Income taxes |
34 |
||||||||||||||||||
|
Net contribution to earnings |
$ |
(12) |
$ |
23 |
$ |
177 |
$ |
(30) |
$ |
158 |
|||||||||
|
Equity (earnings) loss from joint ventures |
— |
— |
— |
— |
— |
||||||||||||||
|
Non-operating pension and other postretirement benefit (costs) credits |
— |
— |
— |
8 |
8 |
||||||||||||||
|
Interest income and other |
— |
— |
— |
(9) |
(9) |
||||||||||||||
|
Operating income (loss) |
(12) |
23 |
177 |
(31) |
157 |
||||||||||||||
|
Depreciation, depletion and amortization |
87 |
4 |
36 |
2 |
129 |
||||||||||||||
|
Basis of real estate sold |
— |
10 |
— |
— |
10 |
||||||||||||||
|
Unallocated pension service costs |
— |
— |
— |
— |
— |
||||||||||||||
|
Special items(1)(2)(3) |
147 |
— |
61 |
2 |
210 |
||||||||||||||
|
Adjusted EBITDA |
$ |
222 |
$ |
37 |
$ |
274 |
$ |
(27) |
$ |
506 |
|||||||||
|
(1) |
Pre-tax special items attributable to Timberlands include $147 million of impairment charges related to our Uruguayan operations. |
|
(2) |
Pre-tax special items attributable to Wood Products include: $50 million for product remediation and $11 million of countervailing and antidumping duties. |
|
(3) |
Pre-tax special items attributable to Unallocated Items include $2 million of Plum Creek merger-related costs. |
|
The table below reconciles Adjusted EBITDA for the quarter ended September 30, 2017 : | |||||||||||||||||||
|
DOLLAR AMOUNTS IN MILLIONS |
Timberlands |
Real Estate |
Wood |
Unallocated |
Total | ||||||||||||||
|
Adjusted EBITDA by Segment: |
|||||||||||||||||||
|
Net earnings |
$ |
130 |
|||||||||||||||||
|
Earnings from discontinued operations, net of income taxes |
— |
||||||||||||||||||
|
Interest expense, net of capitalized interest |
98 |
||||||||||||||||||
|
Income taxes |
(27) |
||||||||||||||||||
|
Net contribution to earnings |
$ |
131 |
$ |
47 |
$ |
40 |
$ |
(17) |
$ |
201 |
|||||||||
|
Equity earnings from joint ventures |
— |
(1) |
— |
— |
(1) |
||||||||||||||
|
Non-operating pension and other postretirement benefit (costs) credits |
— |
— |
— |
16 |
16 |
||||||||||||||
|
Interest income and other |
— |
— |
— |
(11) |
(11) |
||||||||||||||
|
Operating income (loss) |
131 |
46 |
40 |
(12) |
205 |
||||||||||||||
|
Depreciation, depletion and amortization |
89 |
4 |
37 |
2 |
132 |
||||||||||||||
|
Basis of real estate sold |
— |
24 |
— |
— |
24 |
||||||||||||||
|
Unallocated pension service costs |
— |
— |
— |
1 |
1 |
||||||||||||||
|
Special items(1)(2) |
— |
— |
201 |
6 |
207 |
||||||||||||||
|
Adjusted EBITDA |
$ |
220 |
$ |
74 |
$ |
278 |
$ |
(3) |
$ |
569 |
|||||||||
|
(1) |
Pre-tax special items attributable to Wood Products include: $190 million of product remediation, a $6 million impairment on a non-strategic asset and $5 million of countervailing and anti-dumping duties. |
|
(2) |
Pre-tax special items attributable to Unallocated Items include $6 million of Plum Creek merger-related costs. |
|
The table below reconciles Adjusted EBITDA for the quarter ended September 30, 2016: | |||||||||||||||||||
|
DOLLAR AMOUNTS IN MILLIONS |
Timberlands |
Real Estate |
Wood |
Unallocated |
Total | ||||||||||||||
|
Adjusted EBITDA by Segment: |
|||||||||||||||||||
|
Net earnings |
$ |
227 |
|||||||||||||||||
|
Earnings from discontinued operations, net of income taxes |
(65) |
||||||||||||||||||
|
Interest expense, net of capitalized interest |
114 |
||||||||||||||||||
|
Income taxes |
22 |
||||||||||||||||||
|
Net contribution to earnings |
$ |
122 |
$ |
15 |
$ |
170 |
$ |
(9) |
$ |
298 |
|||||||||
|
Equity earnings from joint ventures |
— |
(1) |
— |
(8) |
(9) |
||||||||||||||
|
Non-operating pension and other postretirement benefit (costs) credits |
— |
— |
— |
(13) |
(13) |
||||||||||||||
|
Interest income and other |
— |
— |
— |
(15) |
(15) |
||||||||||||||
|
Operating income (loss) |
122 |
14 |
170 |
(45) |
261 |
||||||||||||||
|
Depreciation, depletion and amortization |
101 |
4 |
33 |
— |
138 |
||||||||||||||
|
Basis of real estate sold |
— |
19 |
— |
— |
19 |
||||||||||||||
|
Unallocated pension service costs |
— |
— |
— |
2 |
2 |
||||||||||||||
|
Special items(1) |
— |
— |
— |
14 |
14 |
||||||||||||||
|
Adjusted EBITDA |
$ |
223 |
$ |
37 |
$ |
203 |
$ |
(29) |
$ |
434 |
|||||||||
|
(1) |
Pre-tax special items include $14 million of Plum Creek merger-related costs. |
|
Weyerhaeuser Company |
Exhibit 99.2 | ||||||||||||||||||
|
Q3.2017 Analyst Package |
|||||||||||||||||||
|
Preliminary results (unaudited) |
|||||||||||||||||||
|
Consolidated Statement of Operations(1)(2) | |||||||||||||||||||
|
in millions |
Q2 |
Q3 |
Year-to-date | ||||||||||||||||
|
June 30, |
September 30, |
September 30, |
September 30, |
September 30, | |||||||||||||||
|
Net sales |
$ |
1,808 |
$ |
1,872 |
$ |
1,709 |
$ |
5,373 |
$ |
4,769 |
|||||||||
|
Cost of products sold |
1,336 |
1,374 |
1,328 |
3,982 |
3,702 |
||||||||||||||
|
Gross margin |
472 |
498 |
381 |
1,391 |
1,067 |
||||||||||||||
|
Selling expenses |
22 |
22 |
22 |
66 |
67 |
||||||||||||||
|
General and administrative expenses |
76 |
75 |
80 |
238 |
253 |
||||||||||||||
|
Research and development expenses |
4 |
4 |
5 |
12 |
14 |
||||||||||||||
|
Charges for integration and restructuring, closures and asset impairments |
151 |
14 |
16 |
178 |
141 |
||||||||||||||
|
Charges for product remediation |
50 |
190 |
— |
240 |
— |
||||||||||||||
|
Other operating costs (income), net |
12 |
(12) |
(3) |
2 |
(56) |
||||||||||||||
|
Operating income from continuing operations |
157 |
205 |
261 |
655 |
648 |
||||||||||||||
|
Equity earnings from joint ventures |
— |
1 |
9 |
1 |
21 |
||||||||||||||
|
Non-operating pension and other postretirement benefit (costs) credits |
(8) |
(16) |
13 |
(46) |
37 |
||||||||||||||
|
Interest income and other |
9 |
11 |
15 |
29 |
34 |
||||||||||||||
|
Interest expense, net of capitalized interest |
(100) |
(98) |
(114) |
(297) |
(323) |
||||||||||||||
|
Earnings from continuing operations before income taxes |
58 |
103 |
184 |
342 |
417 |
||||||||||||||
|
Income taxes |
(34) |
27 |
(22) |
(31) |
(64) |
||||||||||||||
|
Earnings from continuing operations |
24 |
130 |
162 |
311 |
353 |
||||||||||||||
|
Earnings from discontinued operations, net of income taxes |
— |
— |
65 |
— |
123 |
||||||||||||||
|
Net earnings |
24 |
130 |
227 |
311 |
476 |
||||||||||||||
|
Dividends on preference shares |
— |
— |
— |
— |
(22) |
||||||||||||||
|
Net earnings attributable to Weyerhaeuser common shareholders |
$ |
24 |
$ |
130 |
$ |
227 |
$ |
311 |
$ |
454 |
|||||||||
|
(1) Discontinued operations as presented herein consist of the operations of our former Cellulose Fibers segment. The corresponding assets and liabilities were classified as discontinued operations on our balance sheet. | |||||||||||||||||||
|
(2) Amounts presented reflect the results of operations acquired in our merger with Plum Creek Timber, Inc., beginning on the merger date of February 19, 2016. | |||||||||||||||||||
|
Per Share Information | |||||||||||||||||||
|
Q2 |
Q3 |
Year-to-date | |||||||||||||||||
|
June 30, |
September 30, |
September 30, |
September 30, |
September 30, | |||||||||||||||
|
Earnings per share attributable to Weyerhaeuser common shareholders, basic: | |||||||||||||||||||
|
Continuing operations |
$ |
0.03 |
$ |
0.17 |
$ |
0.22 |
$ |
0.41 |
$ |
0.47 |
|||||||||
|
Discontinued operations |
— |
— |
0.08 |
— |
0.17 |
||||||||||||||
|
Net earnings per share |
$ |
0.03 |
$ |
0.17 |
$ |
0.30 |
$ |
0.41 |
$ |
0.64 |
|||||||||
|
Earnings per share attributable to Weyerhaeuser common shareholders, diluted: | |||||||||||||||||||
|
Continuing operations |
$ |
0.03 |
$ |
0.17 |
$ |
0.21 |
$ |
0.41 |
$ |
0.46 |
|||||||||
|
Discontinued operations |
— |
— |
0.09 |
— |
0.18 |
||||||||||||||
|
Net earnings per share |
$ |
0.03 |
$ |
0.17 |
$ |
0.30 |
$ |
0.41 |
$ |
0.64 |
|||||||||
|
Dividends paid per common share |
$ |
0.31 |
$ |
0.31 |
$ |
0.31 |
$ |
0.93 |
$ |
0.93 |
|||||||||
|
Weighted average shares outstanding (in thousands): |
|||||||||||||||||||
|
Basic |
752,630 |
753,535 |
749,587 |
752,301 |
708,395 |
||||||||||||||
|
Diluted |
756,451 |
756,903 |
754,044 |
756,058 |
712,205 |
||||||||||||||
|
Common shares outstanding at end of period (in thousands) |
752,711 |
753,051 |
747,933 |
753,051 |
747,933 |
||||||||||||||
|
Weyerhaeuser Company |
|||||||||||||||||||
|
Q3.2017 Analyst Package |
|||||||||||||||||||
|
Preliminary results (unaudited) |
|||||||||||||||||||
|
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization (Adjusted EBITDA)* | |||||||||||||||||||
|
in millions |
Q2 |
Q3 |
Year-to-date | ||||||||||||||||
|
June 30, |
September 30, |
September 30, |
September 30, |
September 30, | |||||||||||||||
|
Net earnings |
$ |
24 |
$ |
130 |
$ |
227 |
$ |
311 |
$ |
476 |
|||||||||
|
Earnings from discontinued operations, net of income taxes |
— |
— |
(65) |
— |
(123) |
||||||||||||||
|
Equity earnings from joint ventures |
— |
(1) |
(9) |
(1) |
(21) |
||||||||||||||
|
Non-operating pension and other postretirement benefit costs (credits) |
8 |
16 |
(13) |
46 |
(37) |
||||||||||||||
|
Interest income and other |
(9) |
(11) |
(15) |
(29) |
(34) |
||||||||||||||
|
Interest expense, net of capitalized interest |
100 |
98 |
114 |
297 |
323 |
||||||||||||||
|
Income taxes |
34 |
(27) |
22 |
31 |
64 |
||||||||||||||
|
Operating income from continuing operations |
157 |
205 |
261 |
655 |
648 |
||||||||||||||
|
Depreciation, depletion and amortization |
129 |
132 |
138 |
394 |
375 |
||||||||||||||
|
Basis of real estate sold |
10 |
24 |
19 |
48 |
49 |
||||||||||||||
|
Unallocated pension service costs |
— |
1 |
2 |
3 |
4 |
||||||||||||||
|
Special items |
210 |
207 |
14 |
429 |
107 |
||||||||||||||
|
Adjusted EBITDA* |
$ |
506 |
$ |
569 |
$ |
434 |
$ |
1,529 |
$ |
1,183 |
|||||||||
|
*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 of real estate sold, unallocated pension service costs 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 |
Q2 |
Q3 |
Year-to-date | ||||||||||||||||
|
June 30, |
September 30, |
September 30, |
September 30, |
September 30, | |||||||||||||||
|
Net earnings attributable to Weyerhaeuser common shareholders |
$ |
24 |
$ |
130 |
$ |
227 |
$ |
311 |
$ |
454 |
|||||||||
|
Plum Creek merger- and integration-related costs |
2 |
3 |
10 |
15 |
112 |
||||||||||||||
|
Uruguay impairment |
147 |
— |
— |
147 |
— |
||||||||||||||
|
Gain on sale of non-strategic asset |
— |
— |
— |
— |
(22) |
||||||||||||||
|
Legal expense |
— |
— |
— |
— |
7 |
||||||||||||||
|
Countervailing and antidumping duties |
8 |
4 |
— |
12 |
— |
||||||||||||||
|
Impairment of non-strategic asset |
— |
4 |
— |
4 |
— |
||||||||||||||
|
Product remediation |
31 |
118 |
— |
149 |
— |
||||||||||||||
|
Net earnings attributable to Weyerhaeuser common shareholders before special items |
212 |
259 |
237 |
638 |
551 |
||||||||||||||
|
Earnings from discontinued operations, net of income taxes |
— |
— |
(65) |
— |
(123) |
||||||||||||||
|
Net earnings from continuing operations attributable to Weyerhaeuser common shareholders before special items |
$ |
212 |
$ |
259 |
$ |
172 |
$ |
638 |
$ |
428 |
|||||||||
|
per share |
Q2 |
Q3 |
Year-to-date | ||||||||||||||||
|
June 30, |
September 30, |
September 30, |
September 30, |
September 30, | |||||||||||||||
|
Net earnings per diluted share attributable to Weyerhaeuser common shareholders |
$ |
0.03 |
$ |
0.17 |
$ |
0.30 |
$ |
0.41 |
$ |
0.64 |
|||||||||
|
Plum Creek merger- and integration-related costs |
— |
— |
0.02 |
0.02 |
0.16 |
||||||||||||||
|
Uruguay impairment |
0.20 |
— |
— |
0.19 |
— |
||||||||||||||
|
Gain on sale of non-strategic asset |
— |
— |
— |
— |
(0.03) |
||||||||||||||
|
Legal expense |
— |
— |
— |
— |
0.01 |
||||||||||||||
|
Countervailing and antidumping duties |
0.01 |
0.01 |
— |
0.01 |
— |
||||||||||||||
|
Impairment of non-strategic asset |
— |
0.01 |
— |
0.01 |
— |
||||||||||||||
|
Product remediation |
0.04 |
0.15 |
— |
0.20 |
— |
||||||||||||||
|
Net earnings per diluted share attributable to Weyerhaeuser common shareholders before special items |
0.28 |
0.34 |
0.32 |
0.84 |
0.78 |
||||||||||||||
|
Earnings from discontinued operations, net of income taxes |
— |
— |
(0.09) |
— |
(0.18) |
||||||||||||||
|
Net earnings from continuing operations per diluted share attributable to Weyerhaeuser common shareholders before special items |
$ |
0.28 |
$ |
0.34 |
$ |
0.23 |
$ |
0.84 |
$ |
0.60 |
|||||||||
|
Weyerhaeuser Company |
|||||||||||
|
Q3.2017 Analyst Package |
|||||||||||
|
Preliminary results (unaudited) |
|||||||||||
|
Consolidated Balance Sheet | |||||||||||
|
in millions |
June 30, |
September 30, |
December 31, | ||||||||
|
ASSETS |
|||||||||||
|
Current assets: |
|||||||||||
|
Cash and cash equivalents |
$ |
701 |
$ |
497 |
$ |
676 |
|||||
|
Receivables, less allowances |
442 |
485 |
390 |
||||||||
|
Receivables for taxes |
8 |
65 |
84 |
||||||||
|
Inventories |
349 |
340 |
358 |
||||||||
|
Prepaid expenses and other current assets |
177 |
130 |
114 |
||||||||
|
Assets held for sale |
411 |
— |
— |
||||||||
|
Total current assets |
2,088 |
1,517 |
1,622 |
||||||||
|
Property and equipment, net |
1,534 |
1,534 |
1,562 |
||||||||
|
Construction in progress |
190 |
225 |
213 |
||||||||
|
Timber and timberlands at cost, less depletion charged to disposals |
13,669 |
13,627 |
14,299 |
||||||||
|
Minerals and mineral rights, net |
314 |
312 |
319 |
||||||||
|
Investments in and advances to joint ventures |
33 |
33 |
56 |
||||||||
|
Goodwill |
40 |
40 |
40 |
||||||||
|
Deferred tax assets |
261 |
240 |
293 |
||||||||
|
Other assets |
246 |
259 |
224 |
||||||||
|
Restricted financial investments held by variable interest entities |
615 |
615 |
615 |
||||||||
|
Total assets |
$ |
18,990 |
$ |
18,402 |
$ |
19,243 |
|||||
|
LIABILITIES AND EQUITY |
|||||||||||
|
Current liabilities: |
|||||||||||
|
Current maturities of long-term debt |
$ |
668 |
$ |
62 |
$ |
281 |
|||||
|
Accounts payable |
252 |
259 |
233 |
||||||||
|
Accrued liabilities |
585 |
702 |
692 |
||||||||
|
Liabilities held for sale |
19 |
— |
— |
||||||||
|
Total current liabilities |
1,524 |
1,023 |
1,206 |
||||||||
|
Long-term debt |
5,936 |
5,933 |
6,329 |
||||||||
|
Long-term debt (nonrecourse to the company) held by variable interest entities |
511 |
511 |
511 |
||||||||
|
Deferred pension and other postretirement benefits |
1,230 |
1,201 |
1,322 |
||||||||
|
Deposit received from contribution of timberlands to related party |
419 |
416 |
426 |
||||||||
|
Other liabilities |
280 |
273 |
269 |
||||||||
|
Total liabilities |
9,900 |
9,357 |
10,063 |
||||||||
|
Total equity |
9,090 |
9,045 |
9,180 |
||||||||
|
Total liabilities and equity |
$ |
18,990 |
$ |
18,402 |
$ |
19,243 |
|||||
|
Weyerhaeuser Company |
|||||||||||||||||||
|
Q3.2017 Analyst Package |
|||||||||||||||||||
|
Preliminary results (unaudited) |
|||||||||||||||||||
|
Consolidated Statement of Cash Flows | |||||||||||||||||||
|
in millions |
Q2 |
Q3 |
Year-to-date | ||||||||||||||||
|
June 30, |
September 30, |
September 30, |
September 30, |
September 30, | |||||||||||||||
|
Cash flows from operations: |
|||||||||||||||||||
|
Net earnings |
$ |
24 |
$ |
130 |
$ |
227 |
$ |
311 |
$ |
476 |
|||||||||
|
Noncash charges (credits) to income: |
|||||||||||||||||||
|
Depreciation, depletion and amortization |
129 |
131 |
139 |
393 |
428 |
||||||||||||||
|
Basis of real estate sold |
10 |
24 |
19 |
48 |
49 |
||||||||||||||
|
Deferred income taxes, net |
3 |
3 |
40 |
9 |
96 |
||||||||||||||
|
Net gains on disposition of assets and operations |
(2) |
(6) |
(70) |
(15) |
(121) |
||||||||||||||
|
Pension and other postretirement benefits |
15 |
25 |
— |
72 |
5 |
||||||||||||||
|
Other noncash charges (credits) |
156 |
12 |
13 |
181 |
47 |
||||||||||||||
|
Change in: |
|||||||||||||||||||
|
Receivables less allowances |
(8) |
(35) |
(6) |
(113) |
(96) |
||||||||||||||
|
Receivable for taxes |
(17) |
(63) |
2 |
(116) |
37 |
||||||||||||||
|
Inventories |
21 |
11 |
32 |
4 |
49 |
||||||||||||||
|
Prepaid expenses |
(4) |
4 |
(2) |
(9) |
(3) |
||||||||||||||
|
Accounts payable and accrued liabilities |
192 |
129 |
25 |
184 |
61 |
||||||||||||||
|
Pension and postretirement contributions |
(15) |
(22) |
(54) |
(59) |
(83) |
||||||||||||||
|
Distributions of earnings received from joint ventures |
— |
1 |
— |
1 |
5 |
||||||||||||||
|
Other |
(15) |
(21) |
(18) |
(44) |
(64) |
||||||||||||||
|
Net cash from operations |
489 |
323 |
347 |
847 |
886 |
||||||||||||||
|
Cash flows from investing activities: |
|||||||||||||||||||
|
Capital expenditures: |
|||||||||||||||||||
|
Purchases of property and equipment |
(74) |
(87) |
(120) |
(213) |
(260) |
||||||||||||||
|
Timberlands reforestation costs |
(13) |
(10) |
(9) |
(46) |
(43) |
||||||||||||||
|
Acquisition of timberlands |
— |
— |
(2) |
— |
(10) |
||||||||||||||
|
Proceeds from sale of assets and operations |
4 |
411 |
296 |
423 |
379 |
||||||||||||||
|
Proceeds from contribution of timberlands to related party |
— |
— |
— |
— |
440 |
||||||||||||||
|
Distributions of investment received from joint ventures |
23 |
— |
7 |
23 |
34 |
||||||||||||||
|
Cash and cash equivalents acquired in the merger with Plum Creek |
— |
— |
— |
— |
9 |
||||||||||||||
|
Other |
22 |
(16) |
45 |
5 |
42 |
||||||||||||||
|
Cash from (used in) investing activities |
(38) |
298 |
217 |
192 |
591 |
||||||||||||||
|
Cash flows from financing activities: |
|||||||||||||||||||
|
Cash dividends on common shares |
(233) |
(233) |
(231) |
(699) |
(700) |
||||||||||||||
|
Cash dividends on preference shares |
— |
— |
(11) |
— |
(22) |
||||||||||||||
|
Proceeds from issuance of long-term debt |
— |
225 |
300 |
225 |
1,698 |
||||||||||||||
|
Payments of long-term debt |
— |
(831) |
— |
(831) |
(723) |
||||||||||||||
|
Proceeds from borrowing on line of credit |
— |
100 |
— |
100 |
— |
||||||||||||||
|
Payments on line of credit |
— |
(100) |
— |
(100) |
— |
||||||||||||||
|
Repurchase of common stock |
— |
— |
(374) |
— |
(2,003) |
||||||||||||||
|
Other |
28 |
14 |
39 |
87 |
40 |
||||||||||||||
|
Cash used in financing activities |
(205) |
(825) |
(277) |
(1,218) |
(1,710) |
||||||||||||||
|
Net change in cash and cash equivalents |
246 |
(204) |
287 |
(179) |
(233) |
||||||||||||||
|
Cash and cash equivalents from continuing operations at beginning of period |
$ |
455 |
$ |
701 |
$ |
485 |
$ |
676 |
1,011 |
||||||||||
|
Cash and cash equivalents from discontinued operations at beginning of period |
— |
— |
7 |
— |
1 |
||||||||||||||
|
Cash and cash equivalents at beginning of period |
$ |
455 |
$ |
701 |
$ |
492 |
$ |
676 |
1,012 |
||||||||||
|
Cash and cash equivalents from continuing operations at end of period |
$ |
701 |
$ |
497 |
$ |
769 |
$ |
497 |
$ |
769 |
|||||||||
|
Cash and cash equivalents from discontinued operations at end of period |
— |
— |
10 |
— |
10 |
||||||||||||||
|
Cash and cash equivalents at end of period |
$ |
701 |
$ |
497 |
$ |
779 |
$ |
497 |
$ |
779 |
|||||||||
|
Cash paid (received) during the period for: |
|||||||||||||||||||
|
Interest, net of amount capitalized |
$ |
72 |
$ |
123 |
$ |
142 |
$ |
315 |
$ |
367 |
|||||||||
|
Income taxes |
$ |
47 |
$ |
23 |
$ |
(1) |
$ |
129 |
$ |
(26) |
|||||||||
|
Weyerhaeuser Company |
Total Company Statistics | ||||||||||||||||||
|
Q3.2017 Analyst Package |
|||||||||||||||||||
|
Preliminary results (unaudited) |
|||||||||||||||||||
|
Selected Total Company Items | |||||||||||||||||||
|
in millions |
Q2 |
Q3 |
Year-to-date | ||||||||||||||||
|
June 30, |
September 30, |
September 30, |
September 30, |
September 30, | |||||||||||||||
|
Pension and postretirement costs: |
|||||||||||||||||||
|
Pension and postretirement costs allocated to business segments |
$ |
7 |
$ |
8 |
$ |
8 |
$ |
23 |
$ |
23 |
|||||||||
|
Pension and postretirement credits not allocated: |
|||||||||||||||||||
|
Unallocated pension service costs |
— |
1 |
2 |
3 |
4 |
||||||||||||||
|
Non-operating pension and other postretirement benefit costs (credits) |
8 |
16 |
(13) |
46 |
(37) |
||||||||||||||
|
Accelerated pension costs included in Plum Creek merger-related costs (not allocated) |
— |
— |
— |
— |
5 |
||||||||||||||
|
Total pension and postretirement costs (credits) for continuing operations |
15 |
25 |
(3) |
72 |
(5) |
||||||||||||||
|
Pension and postretirement service costs directly attributable to discontinued operations |
— |
— |
3 |
— |
10 |
||||||||||||||
|
Total company pension and postretirement costs |
$ |
15 |
$ |
25 |
$ |
— |
$ |
72 |
$ |
5 |
|||||||||
|
Cash spent for capital expenditures for continuing operations |
$ |
(87) |
$ |
(97) |
$ |
(100) |
$ |
(259) |
$ |
(240) |
|||||||||
|
Weyerhaeuser Company |
Timberlands Segment |
||||||||||||||||||||
|
Q3.2017 Analyst Package |
|||||||||||||||||||||
|
Preliminary results (unaudited) |
|||||||||||||||||||||
|
Segment Statement of Operations |
|||||||||||||||||||||
|
in millions |
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 |
||||||||||||||||
|
Sales to unaffiliated customers |
$ |
469 |
$ |
491 |
$ |
484 |
$ |
1,446 |
$ |
1,342 |
|||||||||||
|
Intersegment sales |
163 |
179 |
216 |
544 |
631 |
||||||||||||||||
|
Total net sales |
632 |
670 |
700 |
1,990 |
1,973 |
||||||||||||||||
|
Cost of products sold |
476 |
517 |
559 |
1,512 |
1,527 |
||||||||||||||||
|
Gross margin |
156 |
153 |
141 |
478 |
446 |
||||||||||||||||
|
Selling expenses |
1 |
1 |
1 |
3 |
4 |
||||||||||||||||
|
General and administrative expenses |
23 |
24 |
20 |
71 |
80 |
||||||||||||||||
|
Research and development expenses |
4 |
3 |
4 |
10 |
12 |
||||||||||||||||
|
Charges for integration and restructuring, closures and assets impairments
|
147 |
— |
— |
147 |
— |
||||||||||||||||
|
Other operating income, net |
(7) |
(6) |
(6) |
(20) |
(26) |
||||||||||||||||
|
Operating income and Net contribution to earnings |
$ |
(12) |
$ |
131 |
$ |
122 |
$ |
267 |
$ |
376 |
|||||||||||
|
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization* |
|||||||||||||||||||||
|
in millions |
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 |
||||||||||||||||
|
Operating income |
$ |
(12) |
$ |
131 |
$ |
122 |
$ |
267 |
$ |
376 |
|||||||||||
|
Depreciation, depletion and amortization |
87 |
89 |
101 |
270 |
266 |
||||||||||||||||
|
Special items |
147 |
— |
— |
147 |
— |
||||||||||||||||
|
Adjusted EBITDA* |
$ |
222 |
$ |
220 |
$ |
223 |
$ |
684 |
$ |
642 |
|||||||||||
|
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2. |
|||||||||||||||||||||
|
Segment Special Items Included in Net Contribution to Earnings (Pre-Tax) |
|||||||||||||||||||||
|
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 |
|||||||||||||||||
|
Uruguay impairment |
$ |
(147) |
$ |
— |
$ |
— |
$ |
(147) |
$ |
— |
|||||||||||
|
Selected Segment Items |
|||||||||||||||||||||
|
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 |
|||||||||||||||||
|
Total decrease (increase) in working capital (1) |
$ |
(5) |
$ |
(3) |
$ |
(15) |
$ |
(45) |
$ |
(40) |
|||||||||||
|
Cash spent for capital expenditures |
$ |
(25) |
$ |
(24) |
$ |
(26) |
$ |
(79) |
$ |
(77) |
|||||||||||
|
(1) Working capital does not include cash balances. Represents the change in combined working capital of Timberlands and Real Estate & ENR. |
|||||||||||||||||||||
|
Segment Statistics(2)(3) |
|||||||||||||||||||||
|
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 |
|||||||||||||||||
|
Third Party |
Delivered logs: |
||||||||||||||||||||
|
West |
$ |
227 |
$ |
221 |
$ |
217 |
$ |
673 |
$ |
664 |
|||||||||||
|
South |
148 |
155 |
160 |
451 |
415 |
||||||||||||||||
|
North |
16 |
25 |
29 |
68 |
61 |
||||||||||||||||
|
Other |
11 |
17 |
11 |
48 |
25 |
||||||||||||||||
|
Total delivered logs |
402 |
418 |
417 |
1,240 |
1,165 |
||||||||||||||||
|
Stumpage and pay-as-cut timber |
17 |
23 |
24 |
52 |
62 |
||||||||||||||||
|
Products from international operations |
21 |
23 |
21 |
63 |
58 |
||||||||||||||||
|
Recreational and other lease revenue |
15 |
16 |
15 |
45 |
29 |
||||||||||||||||
|
Other revenue |
14 |
11 |
7 |
46 |
28 |
||||||||||||||||
|
Total |
$ |
469 |
$ |
491 |
$ |
484 |
$ |
1,446 |
$ |
1,342 |
|||||||||||
|
Delivered Logs Third Party Sales Realizations (per ton) |
West |
$ |
105.84 |
$ |
116.03 |
$ |
98.18 |
$ |
108.43 |
$ |
98.99 |
||||||||||
|
South |
$ |
34.48 |
$ |
34.24 |
$ |
35.27 |
$ |
34.40 |
$ |
35.64 |
|||||||||||
|
North |
$ |
63.49 |
$ |
59.02 |
$ |
59.17 |
$ |
60.24 |
$ |
61.06 |
|||||||||||
|
Delivered Logs Third Party Sales Volumes (tons, thousands) |
West |
2,143 |
1,910 |
2,209 |
6,210 |
6,705 |
|||||||||||||||
|
South |
4,285 |
4,527 |
4,538 |
13,105 |
11,659 |
||||||||||||||||
|
North |
253 |
428 |
503 |
1,135 |
1,005 |
||||||||||||||||
|
Other |
292 |
424 |
263 |
1,226 |
601 |
||||||||||||||||
|
Fee Harvest Volumes (tons, thousands) |
West |
2,652 |
2,230 |
2,744 |
7,539 |
8,525 |
|||||||||||||||
|
South |
6,473 |
6,953 |
6,992 |
19,799 |
19,083 |
||||||||||||||||
|
North |
383 |
565 |
678 |
1,570 |
1,392 |
||||||||||||||||
|
Other |
444 |
569 |
191 |
1,384 |
372 |
||||||||||||||||
|
(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) Western logs are primarily transacted in MBF but are converted to ton equivalents for external reporting purposes. |
|||||||||||||||||||||
|
Weyerhaeuser Company |
Real Estate, Energy and Natural |
||||||||||||||||||||
|
Q3.2017 Analyst Package |
|||||||||||||||||||||
|
Preliminary results (unaudited) |
|||||||||||||||||||||
|
Segment Statement of Operations |
|||||||||||||||||||||
|
in millions |
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 |
||||||||||||||||
|
Sales to unaffiliated customers |
$ |
46 |
$ |
82 |
$ |
48 |
$ |
181 |
$ |
125 |
|||||||||||
|
Intersegment sales |
— |
— |
— |
— |
— |
||||||||||||||||
|
Total net sales |
46 |
82 |
48 |
181 |
125 |
||||||||||||||||
|
Cost of products sold |
16 |
31 |
26 |
67 |
65 |
||||||||||||||||
|
Gross margin |
30 |
51 |
22 |
114 |
60 |
||||||||||||||||
|
Selling expenses |
— |
— |
— |
— |
— |
||||||||||||||||
|
General and administrative expenses |
7 |
6 |
7 |
20 |
19 |
||||||||||||||||
|
Charges for integration, restructuring, closures and asset impairments |
— |
— |
— |
— |
1 |
||||||||||||||||
|
Other operating costs (income), net |
— |
(1) |
1 |
(1) |
(1) |
||||||||||||||||
|
Operating income |
23 |
46 |
14 |
95 |
41 |
||||||||||||||||
|
Equity earnings (loss) from joint ventures(1) |
— |
1 |
1 |
1 |
1 |
||||||||||||||||
|
Net contribution to earnings |
$ |
23 |
$ |
47 |
$ |
15 |
$ |
96 |
$ |
42 |
|||||||||||
|
(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 |
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 |
||||||||||||||||
|
Operating income |
$ |
23 |
$ |
46 |
$ |
14 |
$ |
95 |
$ |
41 |
|||||||||||
|
Depreciation, depletion and amortization |
4 |
4 |
4 |
11 |
9 |
||||||||||||||||
|
Basis of real estate sold |
10 |
24 |
19 |
48 |
49 |
||||||||||||||||
|
Adjusted EBITDA* |
$ |
37 |
$ |
74 |
$ |
37 |
$ |
154 |
$ |
99 |
|||||||||||
|
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2. |
|||||||||||||||||||||
|
Selected Segment Items |
|||||||||||||||||||||
|
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 |
|||||||||||||||||
|
Cash spent for capital expenditures |
$ |
(1) |
$ |
(1) |
$ |
— |
$ |
(2) |
$ |
(1) |
|||||||||||
|
Segment Statistics |
|||||||||||||||||||||
|
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 |
|||||||||||||||||
|
Net Sales |
Real Estate |
$ |
27 |
$ |
64 |
$ |
31 |
$ |
128 |
$ |
87 |
||||||||||
|
Energy and natural resources |
19 |
18 |
17 |
53 |
38 |
||||||||||||||||
|
Total |
$ |
46 |
$ |
82 |
$ |
48 |
$ |
181 |
$ |
125 |
|||||||||||
|
Acres sold |
Real Estate |
10,003 |
35,749 |
12,853 |
59,009 |
38,098 |
|||||||||||||||
|
Price per acre |
Real Estate |
$ |
2,714 |
$ |
1,784 |
$ |
2,354 |
$ |
2,081 |
$ |
2,271 |
||||||||||
|
Weyerhaeuser Company |
Wood Products Segment |
||||||||||||||||||||
|
Q3.2017 Analyst Package |
|||||||||||||||||||||
|
Preliminary results (unaudited) |
|||||||||||||||||||||
|
Segment Statement of Operations |
|||||||||||||||||||||
|
in millions |
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 |
||||||||||||||||
|
Sales to unaffiliated customers |
$ |
1,293 |
$ |
1,299 |
$ |
1,177 |
$ |
3,746 |
$ |
3,302 |
|||||||||||
|
Intersegment sales |
— |
— |
17 |
— |
61 |
||||||||||||||||
|
Total net sales |
1,293 |
1,299 |
1,194 |
3,746 |
3,363 |
||||||||||||||||
|
Cost of products sold |
1,002 |
1,005 |
980 |
2,933 |
2,799 |
||||||||||||||||
|
Gross margin |
291 |
294 |
214 |
813 |
564 |
||||||||||||||||
|
Selling expenses |
19 |
20 |
21 |
60 |
63 |
||||||||||||||||
|
General and administrative expenses |
32 |
30 |
24 |
94 |
81 |
||||||||||||||||
|
Research and development expenses |
— |
1 |
1 |
2 |
2 |
||||||||||||||||
|
Charges for integration and restructuring, closures and asset impairments |
2 |
8 |
1 |
11 |
6 |
||||||||||||||||
|
Charges for product remediation |
50 |
190 |
— |
240 |
— |
||||||||||||||||
|
Other operating costs (income), net |
11 |
5 |
(3) |
17 |
(1) |
||||||||||||||||
|
Operating income and Net contribution to earnings |
$ |
177 |
$ |
40 |
$ |
170 |
$ |
389 |
$ |
413 |
|||||||||||
|
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization* |
|||||||||||||||||||||
|
in millions |
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 |
||||||||||||||||
|
Operating income |
$ |
177 |
$ |
40 |
$ |
170 |
$ |
389 |
$ |
413 |
|||||||||||
|
Depreciation, depletion and amortization |
36 |
37 |
33 |
108 |
96 |
||||||||||||||||
|
Special items |
61 |
201 |
— |
262 |
— |
||||||||||||||||
|
Adjusted EBITDA* |
$ |
274 |
$ |
278 |
$ |
203 |
$ |
759 |
$ |
509 |
|||||||||||
|
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2. |
|||||||||||||||||||||
|
Segment Special Items Included in Net Contribution to Earnings (Pre-Tax) |
|||||||||||||||||||||
|
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 |
|||||||||||||||||
|
Countervailing and antidumping duties |
$ |
(11) |
$ |
(5) |
$ |
— |
$ |
(16) |
$ |
— |
|||||||||||
|
Impairment on non-strategic asset |
— |
(6) |
— |
(6) |
— |
||||||||||||||||
|
Product remediation |
(50) |
(190) |
— |
(240) |
|||||||||||||||||
|
Total |
$ |
(61) |
$ |
(201) |
$ |
— |
$ |
(262) |
$ |
— |
|||||||||||
|
Selected Segment Items |
|||||||||||||||||||||
|
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 |
|||||||||||||||||
|
Total decrease (increase) in working capital (1) |
$ |
113 |
$ |
150 |
$ |
49 |
$ |
141 |
$ |
(48) |
|||||||||||
|
Cash spent for capital expenditures |
$ |
(61) |
$ |
(71) |
$ |
(71) |
$ |
(176) |
$ |
(152) |
|||||||||||
|
(1) Working capital does not include cash balances. |
|||||||||||||||||||||
|
Segment Statistics |
|||||||||||||||||||||
|
in millions, except for third-party sales realizations |
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 |
||||||||||||||||
|
Structural Lumber |
Third party net sales |
$ |
538 |
$ |
525 |
$ |
495 |
$ |
1,541 |
$ |
1,412 |
||||||||||
|
Third party sales realizations |
$ |
441 |
$ |
448 |
$ |
401 |
$ |
434 |
$ |
389 |
|||||||||||
|
Third party sales volumes (2) |
1,218 |
1,172 |
1,233 |
3,548 |
3,634 |
||||||||||||||||
|
Production volumes |
1,146 |
1,093 |
1,130 |
3,391 |
3,464 |
||||||||||||||||
|
Engineered Solid |
Third party net sales |
$ |
130 |
$ |
131 |
$ |
119 |
$ |
378 |
$ |
343 |
||||||||||
|
Third party sales realizations |
$ |
1,979 |
$ |
2,047 |
$ |
1,916 |
$ |
1,970 |
$ |
1,935 |
|||||||||||
|
Third party sales volumes (2) |
6.6 |
6.4 |
6.2 |
19.2 |
17.7 |
||||||||||||||||
|
Production volumes |
6.6 |
6.4 |
5.7 |
19.3 |
17.2 |
||||||||||||||||
|
Engineered |
Third party net sales |
$ |
85 |
$ |
93 |
$ |
79 |
$ |
251 |
$ |
218 |
||||||||||
|
Third party sales realizations |
$ |
1,522 |
$ |
1,529 |
$ |
1,475 |
$ |
1,512 |
$ |
1,483 |
|||||||||||
|
Third party sales volumes (2) |
57 |
60 |
53 |
166 |
147 |
||||||||||||||||
|
Production volumes |
53 |
58 |
49 |
161 |
141 |
||||||||||||||||
|
Oriented Strand |
Third party net sales |
$ |
225 |
$ |
243 |
$ |
199 |
$ |
671 |
$ |
544 |
||||||||||
|
Third party sales realizations |
$ |
295 |
$ |
328 |
$ |
256 |
$ |
295 |
$ |
237 |
|||||||||||
|
Third party sales volumes (2) |
764 |
741 |
776 |
2,274 |
2,296 |
||||||||||||||||
|
Production volumes |
754 |
744 |
777 |
2,256 |
2,259 |
||||||||||||||||
|
Softwood Plywood (square feet 3/8") |
Third party net sales |
$ |
47 |
$ |
45 |
$ |
48 |
$ |
136 |
$ |
133 |
||||||||||
|
Third party sales realizations |
$ |
380 |
$ |
386 |
$ |
378 |
$ |
381 |
$ |
369 |
|||||||||||
|
Third party sales volumes (2) |
123 |
117 |
127 |
358 |
368 |
||||||||||||||||
|
Production volumes |
99 |
88 |
105 |
284 |
304 |
||||||||||||||||
|
Medium Density |
Third party net sales |
$ |
51 |
$ |
48 |
$ |
49 |
$ |
146 |
$ |
113 |
||||||||||
|
Third party sales realizations |
$ |
845 |
$ |
821 |
$ |
761 |
$ |
820 |
$ |
765 |
|||||||||||
|
Third party sales volumes (2) |
60 |
58 |
64 |
177 |
147 |
||||||||||||||||
|
Production volumes |
63 |
63 |
68 |
182 |
155 |
||||||||||||||||
|
(2) Volumes include sales of internally produced products and products purchased for resale primarily through our distribution business. |
|||||||||||||||||||||
|
Weyerhaeuser Company |
Unallocated Items | ||||||||||||||||||
|
Q3.2017 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 |
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 | ||||||||||||||
|
Unallocated corporate function expenses |
$ |
(17) |
$ |
(19) |
$ |
(21) |
$ |
(55) |
$ |
(62) |
|||||||||
|
Unallocated share-based compensation |
— |
(1) |
(4) |
(7) |
(5) |
||||||||||||||
|
Unallocated pension service costs |
— |
(1) |
(2) |
(3) |
(4) |
||||||||||||||
|
Foreign exchange gains (losses) |
— |
3 |
(1) |
— |
13 |
||||||||||||||
|
Elimination of intersegment profit in inventory and LIFO |
(3) |
3 |
2 |
(6) |
(6) |
||||||||||||||
|
Gain on sale of non-strategic asset |
1 |
4 |
1 |
8 |
45 |
||||||||||||||
|
Charges for integration and restructuring, closures and asset impairments: |
|||||||||||||||||||
|
Plum Creek merger- and integration-related costs |
(2) |
(6) |
(14) |
(20) |
(132) |
||||||||||||||
|
Other restructuring, closures and asset impairments |
— |
— |
(1) |
— |
(2) |
||||||||||||||
|
Other |
(10) |
5 |
(5) |
(13) |
(29) |
||||||||||||||
|
Operating income (loss) |
(31) |
(12) |
(45) |
(96) |
(182) |
||||||||||||||
|
Equity earnings from joint venture (1) |
— |
— |
8 |
— |
20 |
||||||||||||||
|
Non-operating pension and other postretirement benefit (costs) credits (2) |
(8) |
(16) |
13 |
(46) |
37 |
||||||||||||||
|
Interest income and other |
9 |
11 |
15 |
29 |
34 |
||||||||||||||
|
Net contribution to earnings |
$ |
(30) |
$ |
(17) |
$ |
(9) |
$ |
(113) |
$ |
(91) |
|||||||||
|
(1) 2016 results include equity earnings from our Timberland Venture, which was consolidated as a wholly-owned subsidiary effective August 31, 2016. | |||||||||||||||||||
|
(2) During Q1 2017 we adopted ASU 2017-07. This ASU requires us to show components of pension and other post retirement benefit costs (interest, expected return on plan assets, amortization of actuarial gains or losses, amortization of prior service credits or costs) on the Consolidated Statement of Operations as a line item outside of "Operating income." We reclassified these components for all periods shown above. | |||||||||||||||||||
|
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization* | |||||||||||||||||||
|
in millions |
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 | ||||||||||||||
|
Operating income (loss) |
$ |
(31) |
$ |
(12) |
$ |
(45) |
$ |
(96) |
$ |
(182) |
|||||||||
|
Depreciation, depletion and amortization |
2 |
2 |
— |
5 |
4 |
||||||||||||||
|
Unallocated pension service costs |
— |
1 |
2 |
3 |
4 |
||||||||||||||
|
Special items |
2 |
6 |
14 |
20 |
107 |
||||||||||||||
|
Adjusted EBITDA* |
$ |
(27) |
$ |
(3) |
$ |
(29) |
$ |
(68) |
$ |
(67) |
|||||||||
|
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2. |
|||||||||||||||||||
|
Unallocated Special Items Included in Net Contribution to Earnings (Pre-Tax) | |||||||||||||||||||
|
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 | |||||||||||||||
|
Plum Creek merger- and integration-related costs |
(2) |
(6) |
(14) |
(20) |
(132) |
||||||||||||||
|
Gain on sale of non-strategic asset |
— |
— |
— |
— |
36 |
||||||||||||||
|
Legal expense |
— |
— |
— |
— |
(11) |
||||||||||||||
|
Total |
$ |
(2) |
$ |
(6) |
$ |
(14) |
$ |
(20) |
$ |
(107) |
|||||||||
|
Unallocated Selected Items | |||||||||||||||||||
|
Q2.2017 |
Q3.2017 |
Q3.2016 |
YTD.2017 |
YTD.2016 | |||||||||||||||
|
Cash spent for capital expenditures |
$ |
— |
$ |
(1) |
$ |
(3) |
$ |
(2) |
$ |
(10) |
|||||||||
SOURCE Weyerhaeuser Company