Weyerhaeuser reports third quarter results
SEATTLE, Oct. 26, 2018 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported third quarter net earnings of $255 million, or 34 cents per diluted share, on net sales of $1.9 billion. This compares with earnings of $130 million, or 17 cents per diluted share, on net sales of $1.9 billion for the same period last year.
View our earnings release and financial statements in a printer-friendly PDF.
Excluding a special tax benefit of $41 million, the company reported net earnings of $214 million, or 28 cents per diluted share for the third quarter. This compares with net earnings before special items of $259 million for the same period last year and $332 million for the second quarter of 2018. Adjusted EBITDA for the third quarter was $505 million compared with $569 million for the third quarter of last year and $637 million for the second quarter of 2018.
"In the third quarter, our business delivered solid operating performance despite significant headwinds from severe weather, trade policy and unusually volatile wood products markets," said Doyle R. Simons, president and chief executive officer. "During the quarter we demonstrated our ongoing commitment to disciplined capital allocation by increasing our quarterly dividend six percent, repurchasing $290 million of common shares, and announcing actions to reduce our pension liabilities. Going forward, we remain relentlessly focused on driving value for shareholders through industry-leading performance and disciplined capital allocation."
WEYERHAEUSER FINANCIAL HIGHLIGHTS 2018 2018 2017
(millions, except per share data) Q2 Q3 Q3
Net sales $2,065 $1,910 $1,872
Net earnings $317 $255 $130
Net earnings per diluted share $0.42 $0.34 $0.17
Weighted average shares outstanding, diluted 761 757 757
Net earnings before special items(1) $332 $214 $259
Net earnings per diluted share before special
items $0.44 $0.28 $0.34
Adjusted EBITDA(2) $637 $505 $569
(1) Second quarter 2018 special items
include $15 million of net after-
tax charges for product
remediation. Third quarter 2018
after-tax special items include a
$41 million tax benefit related to
the previously announced $300
million contribution to our U.S.
qualified pension plan. Third
quarter 2017 after-tax special
items include a $118 million
charge for product remediation, $4
million for countervailing and
antidumping duties on Canadian
softwood lumber the company sold
into the United States, $4 million
for restructuring, impairments,
and other charges, and $3 million
for Plum Creek merger-related
costs. Beginning first quarter
2018, countervailing and
antidumping duties are no longer
reported as a special item.
(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,
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 2018 2018
(millions) Q2 Q3 Change
Net sales $667 $653 ($14)
Contribution to pre-tax earnings $161 $126 ($35)
Adjusted EBITDA $240 $206 ($34)
3Q 2018 Performance - In the West, average sales realizations for domestic and Chinese export logs declined, domestic and export log sales volumes decreased, and road and unit logging costs increased seasonally. In the South, slightly higher average sales realizations were more than offset by moderately lower sales volumes due to weather, increased unit logging costs and seasonally higher forestry spending.
4Q 2018 Outlook - Weyerhaeuser expects fourth quarter earnings and Adjusted EBITDA will be lower than the third quarter. In the West, the company anticipates lower average sales realizations, partially offset by moderately higher export log sales volumes. In the South, the company anticipates slightly higher fee harvest volumes and comparable average log sales realizations.
REAL ESTATE, ENERGY & NATURAL RESOURCES
FINANCIAL HIGHLIGHTS 2018 2018
(millions) Q2 Q3 Change
Net sales $58 $96 $38
Contribution to pre-tax earnings $22 $36 $14
Adjusted EBITDA $47 $86 $39
3Q 2018 Performance - Earnings and Adjusted EBITDA increased compared to the second quarter due to seasonally higher real estate sales and a large acre transaction in Montana which accounted for approximately half of the acres sold in the third quarter. Average land basis increased modestly due to the mix of properties sold.
4Q 2018 Outlook - Weyerhaeuser anticipates fourth quarter earnings and Adjusted EBITDA will be comparable to the third quarter. The company expects full year 2018 Adjusted EBITDA for the segment will be approximately $260 million.
WOOD PRODUCTS
FINANCIAL HIGHLIGHTS 2018 2018
(millions) Q2 Q3 Change
Net sales $1,525 $1,346 ($179)
Contribution to pre-tax earnings $329 $213 ($116)
Pre-tax charge (benefit) for
special items $20 ($20)
Contribution to pre-tax earnings
before special items $349 $213 ($136)
Adjusted EBITDA $385 $250 ($135)
3Q 2018 Performance - Average sales realizations for lumber declined nine percent and average sales realizations for oriented strand board were 13 percent lower compared to the second quarter. Operating rates and sales volumes declined and unit manufacturing costs increased, primarily due to mill downtime related to severe weather in the U.S. South and a scheduled press replacement at our Grayling, Michigan oriented strand board mill. Canadian log costs also increased.
4Q 2018 Outlook - Weyerhaeuser anticipates fourth quarter earnings and Adjusted EBITDA will be significantly lower than the third quarter. Based on current pricing, the company anticipates average sales realizations for lumber and oriented strand board will be substantially lower than third quarter averages. This will be partially offset by lower Western and Canadian log costs, improved unit manufacturing costs for lumber, and higher sales volumes for oriented strand board due to completion of the Grayling press replacement.
ABOUT WEYERHAEUSER
Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control 12.4 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 2017, we generated $7.2 billion in net sales and employed approximately 9,300 people who serve customers worldwide. We are listed on the North American and World Dow Jones Sustainability Indices. Our common stock trades on the New York Stock Exchange under the symbol WY. Learn more at https://www.weyerhaeuser.com/.
EARNINGS CALL INFORMATION
Weyerhaeuser will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on October 26, 2018, to discuss third quarter results.
To access the live webcast and presentation online, go to the Investor Relations section on https://www.weyerhaeuser.com/ on October 26, 2018.
To join the conference call from within North America, dial 855-223-0757 (access code: 6699896) at least 15 minutes prior to the call. Those calling from outside North America should dial 574-990-1206 (access code: 6699896). Replays will be available for two weeks at 855-859-2056 (access code: 6699896) from within North America and at 404-537-3406 (access code: 6699896) from outside North America.
FORWARD LOOKING STATEMENTS
This report contains statements concerning our 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. Forward-looking statements may appear throughout this report. These forward-looking 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 "going forward", "will be," "will continue," "will likely result," and similar words and expressions. Forward-looking 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 the content of these 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, general availability of financing
for home mortgages and the relative strength of the U.S. dollar;
-- market demand for the company's 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, particularly the relative value of
the U.S. dollar to the yen and the Canadian dollar, and the relative
value of the euro to the yen;
-- restrictions on international trade, tariffs imposed on imports of our
products and the availability and cost of shipping and transportation;
economic activity in Asia, especially Japan and China;
-- 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;
-- the successful execution of our internal plans and strategic
initiatives, and cost reduction initiatives;
-- 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;
-- 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 employee 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 risks and uncertainties identified in our 2017 Annual Report on
Form 10-K, which are incorporated herein by reference, as well as those
set forth from time to time in our other public statements and other
reports and filings with the SEC.
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.
For more information contact:
Analysts - Beth Baum, 206-539-3907
Media - Nancy Thompson, 919-861-0342
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, 2018:
DOLLAR AMOUNTS IN MILLIONS Timberlands Real Estate Wood Unallocated Total
& ENR Products Items
--- ---
Adjusted EBITDA by Segment:
Net earnings $
317
Interest expense, net of capitalized
interest 92
Income taxes 65
Net contribution to earnings $
161 $
22 $
329 $
(38) $
474
Non-operating pension and
other postretirement benefit
costs 13 13
Interest income and other (11) (11)
Operating income (loss) 161 22 329 (36) 476
Depreciation, depletion and
amortization 79 3 36 1 119
Basis of real estate sold 22 22
Special items(1) 20 20
Adjusted EBITDA $
240 $
47 $
385 $
(35) $
637
(1)
Pre-tax special items included in Wood Products consist of net charges of $20 million for finalization of product remediation costs.
The table below reconciles Adjusted EBITDA for the quarter ended September 30, 2018:
DOLLAR AMOUNTS IN MILLIONS Timberlands Real Estate Wood Unallocated Total
& ENR Products Items
--- ---
Adjusted EBITDA by Segment:
Net earnings $
255
Interest expense, net of capitalized
interest 93
Income taxes(1) (15)
Net contribution to earnings $
126 $
36 $
213 $
(42) $
333
Non-operating pension and
other postretirement benefit
costs 17 17
Interest income and other (13) (13)
Operating income (loss) 126 36 213 (38) 337
Depreciation, depletion and
amortization 80 4 37 1 122
Basis of real estate sold 46 46
Adjusted EBITDA $
206 $
86 $
250 $
(37) $
505
(1) After tax special items included a $41 million tax benefit related to our $300 million pension contribution. There were no pre-tax special items in third quarter 2018.
The table below reconciles Adjusted EBITDA for the quarter ended September 30, 2017:
DOLLAR AMOUNTS IN MILLIONS Timberlands Real Estate Wood Unallocated Total
& ENR Products Items
--- ---
Adjusted EBITDA by Segment:
Net earnings $
130
Interest expense, net of capitalized
interest 98
Income taxes (27)
Net contribution to earnings $
131 $
47 $
40 $
(17) $
201
Non-operating pension and
other postretirement benefit
costs 16 16
Interest income and other (1) (11) (12)
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) 201 6 207
Adjusted EBITDA $
220 $
74 $
278 $
(3) $
569
(1) Special items attributable to Wood
Products includes: $190 million of
product remediation charges, $6
million of restructuring,
impairments and other charges and
$5 million of retroactive and
prospective countervailing and
antidumping duties. Special items
attributable to Unallocated Items
include $6 million of Plum Creek
merger-related costs.
Weyerhaeuser Company Exhibit 99.2
Q3.2018 Analyst Package
Preliminary results (unaudited)
Consolidated Statement of Operations
in millions Q1 Q2
Q3 Year-to-Date
March 31, June 30, September 30, September 30, September 30, September 30,
2018 2018 2018 2017 2018 2017
---
Net sales $
1,865 $
2,065 $
1,910 $
1,872 $
5,840 $
5,373
Cost of products
sold 1,348 1,447 1,452 1,374 4,247 3,982
Gross margin 517 618 458 498 1,593 1,391
Selling expenses 23 23 20 22 66 66
General and
administrative
expenses 78 80 78 75 236 238
Research and
development
expenses 2 2 2 4 6 12
Charges for
integration and
restructuring,
closures and asset
impairments 2 14 2 178
Charges (recoveries)
for product
remediation, net (20) 20 190 240
Other operating
costs (income), net 28 17 21 (12) 66 2
Operating income 404 476 337 205 1,217 655
Non-operating
pension and other
postretirement
benefit costs (24) (13) (17) (16) (54) (46)
Interest income and
other 12 11 13 12 36 30
Interest expense,
net of capitalized
interest (93) (92) (93) (98) (278) (297)
Earnings before
income taxes 299 382 240 103 921 342
Income taxes (30) (65) 15 27 (80) (31)
Net earnings $
269 $
317 $
255 $
130 $
841 $
311
Per Share Information
Q1 Q2
Q3 Year-to-Date
March 31, June 30, September 30, September 30, September 30, September 30,
2018 2018 2018 2017 2018 2017
---
Earnings per share,
basic and diluted $
0.35 $
0.42 $
0.34 $
0.17 $
1.11 $
0.41
Dividends paid per
common share $
0.32 $
0.32 $
0.34 $
0.31 $
0.98 $
0.93
Weighted average shares outstanding
(in thousands):
Basic 756,815 757,829 754,986 753,535 756,531 752,301
Diluted 759,462 760,533 757,389 756,903 759,116 756,058
Common shares
outstanding at end
of period (in
thousands) 756,700 757,646 749,199 753,051 749,199 753,051
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization (Adjusted EBITDA)*
in millions Q1 Q2
Q3 Year-to-Date
March 31, June 30, September 30, September 30, September 30, September 30,
2018 2018 2018 2017 2018 2017
---
Net earnings $
269 $
317 $
255 $
130 $
841 $
311
Non-operating
pension and other
postretirement
benefit costs 24 13 17 16 54 46
Interest income and
other (12) (11) (13) (12) (36) (30)
Interest expense,
net of capitalized
interest 93 92 93 98 278 297
Income taxes 30 65 (15) (27) 80 31
Operating income 404 476 337 205 1,217 655
Depreciation,
depletion and
amortization 120 119 122 132 361 394
Basis of real estate
sold 12 22 46 24 80 48
Unallocated pension
service costs - 1 3
Special items 8 20 207 28 429
Adjusted EBITDA* $
544 $
637 $
505 $
569 $
1,686 $
1,529
*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 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.
Weyerhaeuser Company
Total Company Statistics
Q3.2018 Analyst Package
Preliminary results (unaudited)
Special Items Included in Net Earnings (Income Tax Affected)
in millions Q1 Q2
Q3 Year-to-Date
March 31, June 30, September 30, September 30, September 30, September 30,
2018 2018 2018 2017 2018 2017
---
Net earnings $
269 $
317 $
255 $
130 $
841 $
311
Plum Creek merger and
integration-related costs - 3 15
Restructuring, impairment and
other charges - 4 151
Environmental remediation
charges (recoveries) 21 21
Countervailing and
antidumping duties charges
(credits)(1) - 4 12
Product remediation charges
(recoveries), net (15) 15 118 149
Tax adjustments(2) - (41) (41)
Net earnings before special
items $
275 $
332 $
214 $
259 $
821 $
638
Q1 Q2
Q3 Year-to-Date
March 31, June 30, September 30, September 30, September 30, September 30,
2018 2018 2018 2017 2018 2017
---
Net earnings per diluted
share $
0.35 $
0.42 $
0.34 $
0.17 $
1.11 $
0.41
Plum Creek merger and
integration-related costs - 0.02
Restructuring, impairment and
other charges - 0.01 0.20
Environmental remediation
charges (recoveries) 0.03 0.03
Countervailing and
antidumping duties charges
(credits)(1) - 0.01 0.01
Product remediation charges
(recoveries), net (0.02) 0.02 0.15 0.20
Tax adjustments(2) - (0.06) (0.06)
Net earnings per diluted
share before special items $
0.36 $
0.44 $
0.28 $
0.34 $
1.08 $
0.84
(1) As of first quarter 2018, countervailing and antidumping duties are no longer reported as a special item.
(2) During third quarter 2018, we recorded a tax benefit related to our $300 million contribution to our U.S. qualified pension plan.
Selected Total Company Items
in millions Q1 Q2
Q3 Year-to-Date
March 31, June 30, September 30, September 30, September 30, September 30,
2018 2018 2018 2017 2018 2017
---
Pension and postretirement costs:
Pension and postretirement
service costs $
10 $
8 $
10 $
9 $
28 $
26
Non-operating pension and
other postretirement benefit
costs 24 13 17 16 54 46
Total company pension and
postretirement costs $
34 $
21 $
27 $
25 $
82 $
72
Weyerhaeuser Company
Q3.2018 Analyst Package
Preliminary results (unaudited)
Consolidated Balance Sheet
in millions March 31, June 30, September 30, December 31,
2018 2018 2018 2017
---
ASSETS
---
Current assets:
Cash and cash equivalents $
598 $
901 $
348 $
824
Receivables, less discounts and
allowances 481 491 444 396
Receivables for taxes 24 23 140 14
Inventories 445 414 389 383
Prepaid expenses and other current
assets 118 146 140 98
Current restricted financial
investments held by variable
interest entities 253 253 253
Total current assets 1,919 2,228 1,714 1,715
Property and equipment, net 1,573 1,597 1,672 1,618
Construction in progress 275 282 255 225
Timber and timberlands at cost, less
depletion 12,888 12,790 12,727 12,954
Minerals and mineral rights, less
depletion 306 302 297 308
Goodwill 40 40 40 40
Deferred tax assets 244 168 71 268
Other assets 278 279 289 316
Restricted financial investments held
by variable interest entities 362 362 362 615
Total assets $
17,885 $
18,048 $
17,427 $
18,059
LIABILITIES AND EQUITY
---
Current liabilities:
Current maturities of long-term debt
$
$
$ $
62
Current debt (nonrecourse to the
company) held by variable interest
entities 209 209 511 209
Accounts payable 245 270 271 249
Accrued liabilities 457 543 491 645
Total current liabilities 911 1,022 1,273 1,165
Long-term debt 5,928 5,924 5,921 5,930
Long-term debt (nonrecourse to the
company) held by variable interest
entities 302 302 302
Deferred pension and other
postretirement benefits 1,454 1,224 885 1,487
Other liabilities 299 295 291 276
Total liabilities 8,894 8,767 8,370 9,160
Total equity 8,991 9,281 9,057 8,899
Total liabilities and equity $
17,885 $
18,048 $
17,427 $
18,059
Weyerhaeuser Company
Q3.2018 Analyst Package
Preliminary results (unaudited)
Consolidated Statements of Cash Flows
in millions Q1 Q2
Q3
Year-to-Date
March 31, June 30, September 30, September 30, September 30, September 30,
2018 2018 2018 2017 2018 2017
---
Cash flows from operations:
Net earnings $
269 $
317 $
255 $
130 $
841 $
311
Noncash charges earnings:
Depreciation, depletion and
amortization 120 119 122 132 361 394
Basis of real estate sold 12 22 46 24 80 48
Deferred income taxes, net 10 15 86 3 111 9
Pension and other postretirement
benefits 34 21 27 25 82 72
Share-based compensation expense 9 9 13 10 31 29
Charges for impairments of assets 1 6 1 153
Change in:
Receivables, less allowances (83) (18) 46 (35) (55) (113)
Receivables and payables for taxes 5 10 (124) (63) (109) (116)
Inventories (66) 30 27 11 (9) 4
Prepaid expenses (5) 4 (6) 4 (7) (9)
Accounts payable and accrued
liabilities (173) 103 (63) 129 (133) 184
Pension and postretirement benefit
contributions and payments (16) (16) (323) (22) (355) (59)
Other 19 (19) (19) (31) (19) (60)
Net cash from operations $
136 $
597 $
87 $
323 $
820 $
847
Cash flows from investing activities:
Capital expenditures for property and
equipment $
(61) $
(83) $
(94) $
(87) $
(238) $
(213)
Capital expenditures for timberlands
reforestation (20) (14) (11) (10) (45) (46)
Proceeds from sale of assets and
operations 2 411 2 423
Other 3 24 (10) (16) 17 28
Cash from (used in) investing
activities $
(76) $
(73) $
(115) $
298 $
(264) $
192
Cash flows from financing activities:
Cash dividends on common shares $
(242) $
(243) $
(256) $
(233) $
(741) $
(699)
Proceeds from issuance of long-term
debt - 225 225
Payments of long-term debt (62) (831) (62) (831)
Proceeds from borrowing on line of
credit - 100 100
Payments on line of credit - (100) (100)
Proceeds from exercise of stock options 25 23 4 8 52 89
Repurchases of common shares - (273) (273)
Other (7) (1) 6 (8) (2)
Cash used in financing activities $
(286) $
(221) $
(525) $
(825) $
(1,032) $
(1,218)
Net change in cash and cash equivalents $
(226) $
303 $
(553) $
(204) $
(476) $
(179)
Cash and cash equivalents at beginning
of period 824 598 901 701 824 676
Cash and cash equivalents at end of
period $
598 $
901 $
348 $
497 $
348 $
497
Cash paid during the period for:
Interest, net of amount capitalized $
105 $
67 $
113 $
123 $
285 $
315
Income taxes $
17 $
41 $
22 $
23 $
80 $
129
Weyerhaeuser Company Timberlands Segment
Q3.2018 Analyst Package
Preliminary results (unaudited)
Segment Statement of Operations
in millions Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
Sales to unaffiliated customers $
505 $
482 $
468 $
491 $
1,455 $
1,446
Intersegment sales 228 185 185 179 598 544
Total net sales 733 667 653 670 2,053 1,990
Cost of products sold 526 485 505 517 1,516 1,512
Gross margin 207 182 148 153 537 478
Selling expenses 1 1 1 2 3
General and administrative expenses 23 25 23 24 71 71
Research and development expenses 2 1 2 3 5 10
Charges for integration and restructuring, closures
and asset impairments - 147
Other operating costs (income), net (8) (5) (4) (6) (17) (20)
Operating income and Net contribution to earnings $
189 $
161 $
126 $
131 $
476 $
267
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*
in millions Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
Operating income $
189 $
161 $
126 $
131 $
476 $
267
Depreciation, depletion and amortization 79 79 80 89 238 270
Special items - 147
Adjusted EBITDA* $
268 $
240 $
206 $
220 $
714 $
684
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.
Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)
in millions Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
Restructuring, impairment and other charges
$
$
$
$
$ $
(147)
Selected Segment Items
in millions Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
Total decrease (increase) in working capital(1) $
(40) $
70 $
(32) $
(3) $
(2) $
(45)
Cash spent for capital expenditures $
(28) $
(29) $
(25) $
(24) $
(82) $
(79)
(1) Represents the change in prepaid assets, accounts receivable, accounts payable, accrued liabilities and log inventory for the Timberlands and Real Estate & ENR segments combined.
Segment Statistics(2)(3)
Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
Third Party
Delivered logs:
Net Sales
(millions)
---
West $
266 $
262 $
238 $
221 $
766 $
673
South 157 158 157 155 472 451
North 25 20 25 25 70 68
Other 14 7 9 17 30 48
Total delivered
logs 462 447 429 418 1,338 1,240
Stumpage and pay-
as-cut timber 15 11 13 23 39 52
Products from
international
operations 23 63
Recreational and
other lease
revenue 14 15 15 16 44 45
Other revenue 14 9 11 11 34 46
Total $
505 $
482 $
468 $
491 $
1,455 $
1,446
Delivered Logs
West $
131.59 $
132.24 $
125.67 $
116.03 $
129.91 $
108.43
Third Party Sales
Realizations (per ton)
---
South $
34.83 $
34.55 $
34.88 $
34.24 $
34.75 $
34.40
North $
60.79 $
64.92 $
60.97 $
59.02 $
62.00 $
60.24
Delivered Logs
West 2,019 1,984 1,897 1,910 5,900 6,210
Third Party Sales
Volumes
(tons, thousands)
---
South 4,510 4,560 4,521 4,527 13,591 13,105
North 404 313 414 428 1,131 1,135
Other 317 81 154 424 552 1,226
Fee Harvest Volumes
West 2,443 2,360 2,305 2,230 7,108 7,539
(tons, thousands)
---
South 6,751 6,630 6,478 6,953 19,859 19,799
North 549 423 537 565 1,509 1,570
Other 569 1,384
(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 (our management
agreement for the Twin Creeks
Venture began in April 2016 and
terminated in December 2017).
(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
Q3.2018 Analyst Package
Resources Segment
Preliminary results (unaudited)
Segment Statement of Operations
in millions Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
Net sales $
51 $
58 $
96 $
82 $
205 $
181
Cost of products sold 19 30 54 31 103 67
Gross margin 32 28 42 51 102 114
General and administrative expenses 7 6 6 6 19 20
Other operating costs (income), net - (1) (1)
Operating income 25 22 36 46 83 95
Interest income and other - 1 1
Operating income and net contribution
to earnings $
25 $
22 $
36 $
47 $
83 $
96
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*
in millions Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
Operating income $
25 $
22 $
36 $
46 $
83 $
95
Depreciation, depletion and
amortization 4 3 4 4 11 11
Basis of real estate sold 12 22 46 24 80 48
Adjusted EBITDA* $
41 $
47 $
86 $
74 $
174 $
154
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.
Selected Segment Items
in millions Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
Cash spent for capital expenditures
$
$
$ $
(1)
$ $
(2)
Segment Statistics
Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
Net Sales
Real Estate $
34 $
38 $
76 $
64 $
148 $
128
(millions)
---
Energy and
Natural
Resources 17 20 20 18 57 53
Total $
51 $
58 $
96 $
82 $
205 $
181
Acres
Sold
Real Estate 21,771 16,290 61,681 35,749 99,742 59,009
---
Price per
Acre
Real Estate $
1,539 $
2,258 $
1,209 $
1,784 $
1,452 $
2,081
---
Weyerhaeuser Company Wood Products Segment
Q3.2018 Analyst Package
Preliminary results (unaudited)
Segment Statement of Operations
in millions Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
Net sales $
1,309 $
1,525 $
1,346 $
1,299 $
4,180 $
3,746
Cost of products sold 1,005 1,119 1,071 1,005 3,195 2,933
Gross margin 304 406 275 294 985 813
Selling expenses 21 22 18 20 61 60
General and administrative expenses 34 31 32 30 97 94
Research and development expenses - 1 1 1 2
Charges for integration and restructuring, closures and
asset impairments 2 8 2 11
Charges (recoveries) for product remediation, net (20) 20 190 240
Other operating costs (income), net (3) 3 12 5 12 17
Operating income and Net contribution to earnings $
270 $
329 $
213 $
40 $
812 $
389
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*
in millions Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
Operating income $
270 $
329 $
213 $
40 $
812 $
389
Depreciation, depletion and amortization 36 36 37 37 109 108
Special items (20) 20 201 262
Adjusted EBITDA* $
286 $
385 $
250 $
278 $
921 $
759
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.
Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)
in millions Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
Countervailing and antidumping duties (charges) credits(1)
$
$
$ $
(5)
$ $
(16)
Restructuring, impairments, and other charges - (6) (6)
Product remediation (charges) recoveries, net 20 (20) (190) (240)
Total $
20 $
(20)
$ $
(201)
$ $
(262)
(1) As of first quarter 2018, countervailing and antidumping duties are no longer reported as a special item.
Selected Segment Items
in millions Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
Total decrease (increase) in working capital(2) $
(226) $
3 $
71 $
150 $
(152) $
141
Cash spent for capital expenditures $
(52) $
(68) $
(79) $
(71) $
(199) $
(176)
(2) Represents the change in prepaid assets, accounts receivable, accounts payable, accrued liabilities and inventory for the Wood Products segment.
Segment Statistics
in millions, except for third party sales realizations Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
---
Structural Lumber Third party net sales $
569 $
681 $
581 $
525 $
1,831 $
1,541
(volumes presented
in board feet)
---
Third party
sales
realizations $
498 $
541 $
491 $
448 $
511 $
434
Third party
sales
volumes(3) 1,140 1,261 1,184 1,172 3,585 3,548
Production
volumes 1,160 1,180 1,106 1,093 3,446 3,391
Engineered Solid Third party net sales $
129 $
139 $
132 $
131 $
400 $
378
Section
(volumes presented
in cubic feet)
---
Third party
sales
realizations $
2,088 $
2,156 $
2,208 $
2,047 $
2,150 $
1,970
Third party
sales
volumes(3) 6.2 6.4 6.0 6.4 18.6 19.2
Production
volumes 6.3 6.4 6.3 6.4 19.0 19.3
Engineered Third party net sales $
78 $
92 $
91 $
93 $
261 $
251
I-joists
(volumes presented
in lineal feet)
---
Third party
sales
realizations $
1,585 $
1,630 $
1,668 $
1,529 $
1,629 $
1,512
Third party
sales
volumes(3) 49 57 54 60 160 166
Production
volumes 56 52 46 58 154 161
Oriented Strand Third party net sales $
232 $
277 $
215 $
243 $
724 $
671
Board
(volumes presented
in square feet 3/8")
---
Third party
sales
realizations $
314 $
367 $
321 $
328 $
335 $
295
Third party
sales
volumes(3) 739 754 669 741 2,162 2,274
Production
volumes 734 747 665 744 2,146 2,256
Softwood Plywood Third party net sales $
50 $
55 $
53 $
45 $
158 $
136
(volumes presented
in square feet 3/8")
---
Third party
sales
realizations $
438 $
461 $
439 $
386 $
446 $
381
Third party
sales
volumes(3) 115 118 122 117 355 358
Production
volumes 97 105 106 88 308 284
Medium Density Third party net sales $
43 $
47 $
48 $
48 $
138 $
146
Fiberboard
(volumes presented
in square feet 3/4")
---
Third party
sales
realizations $
839 $
839 $
828 $
821 $
835 $
820
Third party
sales
volumes(3) 51 55 59 58 165 177
Production
volumes 50 57 61 63 168 182
(3) Volumes include sales of internally produced products and products purchased for resale primarily through our distribution business.
Weyerhaeuser Company Unallocated Items
Q3.2018 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 expense, pension and postretirement costs, foreign exchange transaction gains and losses and the
elimination of intersegment profit in inventory and LIFO.
Contribution to Earnings
in millions Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
---
Unallocated
corporate function
and variable
compensation
expense $
(18) $
(19) $
(19) $
(19) $
(56) $
(55)
Liability classified
share-based
compensation (2) 4 (1) 2 (7)
Foreign exchange
gains (losses) (2) 2 (2) 3 (2)
Elimination of
intersegment profit
in inventory and
LIFO (21) 3 3 (18) (6)
Charges for
integration and
restructuring,
closures and asset
impairments (6) (20)
Other (39) (20) (21) 8 (80) (8)
Operating income
(loss) (80) (36) (38) (12) (154) (96)
Non-operating
pension and other
postretirement
benefit (costs)
credits (24) (13) (17) (16) (54) (46)
Interest income and
other 12 11 13 11 36 29
Net contribution to
earnings $
(92) $
(38) $
(42) $
(17) $
(172) $
(113)
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*
in millions Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
---
Operating income
(loss) $
(80) $
(36) $
(38) $
(12) $
(154) $
(96)
Depreciation,
depletion and
amortization 1 1 1 2 3 5
Unallocated pension
service costs 1 3
Special items 28 6 28 20
Adjusted EBITDA* $
(51) $
(35) $
(37) $
(3) $
(123) $
(68)
*See definition of Adjusted EBITDA
(a non-GAAP measure) on page 1.
Unallocated Special Items Included in Net Contribution to Earnings (Pre-Tax)
in millions Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
---
Plum Creek merger
and integration-
related costs
$
$
$ $
(6)
$ $
(20)
Environmental
remediation
insurance (charges)
recoveries (28) (28)
Total $
(28)
$
$ $
(6) $
(28) $
(20)
Unallocated Selected Items
in millions Q1.2018 Q2.2018 Q3.2018 Q3.2017 YTD.2018 YTD.2017
---
Cash spent for
capital
expenditures $
(1)
$ $
(1) $
(1) $
(2) $
(2)
View original content to download multimedia:http://www.prnewswire.com/news-releases/weyerhaeuser-reports-third-quarter-results-300738536.html
SOURCE Weyerhaeuser Company
