Weyerhaeuser reports first quarter results

Weyerhaeuser reports first quarter results

- First quarter net earnings of $269 million, or $0.35 per diluted share

- Earnings before special items increased 65 percent compared with first quarter 2017

- Adjusted EBITDA increased 20 percent compared with first quarter 2017

- Highest first quarter Wood Products Adjusted EBITDA on record

PR Newswire

SEATTLE, April 27, 2018 /PRNewswire/ -- Weyerhaeuser Company WY today reported first quarter net earnings of $269 million, or 35 cents per diluted share, on net sales of $1.9 billion. This compares with earnings of $157 million, or 21 cents per diluted share, on net sales of $1.7 billion for the same period last year.

View our earnings release and financial statements in a printer-friendly PDF.

Excluding net after-tax special charges of $6 million, the company reported net earnings of $275 million, or 36 cents per diluted share for the first quarter. This compares with net earnings before special items of $167 million for the same period last year and $234 million for the fourth quarter of 2017.  Adjusted EBITDA for the first quarter was $544 million compared with $454 million for the first quarter of last year and $551 million for the fourth quarter of 2017.

"I am extremely pleased with our first quarter performance, as we fully capitalized on strong lumber, OSB and Western log markets to drive outstanding results, including the highest first quarter Wood Products EBITDA on record. This includes exceptional work by our teams to mitigate the effect of ongoing freight service disruptions," said Doyle R. Simons, president and chief executive officer. "Looking forward, we are relentlessly focused on capturing the full benefit of improving housing starts and favorable market dynamics to drive value for shareholders."

WEYERHAEUSER FINANCIAL HIGHLIGHTS

2017



2018



2017

(millions, except per share data)

Q4



Q1



Q1

Net sales

$1,823



$1,865



$1,693

Net earnings

$271



$269



$157

Net earnings per diluted share

$0.36



$0.35



$0.21

Weighted average shares outstanding, diluted

758



759



755

Net earnings before special items(1)

$234



$275



$167

Net earnings per diluted share before special items

$0.31



$0.36



$0.22

Adjusted EBITDA(2)

$551



$544



$454



(1) Fourth quarter 2017 after-tax special items include a $99 million gain on the sale of certain Southern timberlands, charges of $52 million for tax adjustments including enactment of tax legislation, charges of $31 million for product remediation, a benefit of $26 million for environmental remediation insurance recoveries, $12 million for Plum Creek merger-related costs, and a $7 million net benefit from an adjustment to accrued countervailing and antidumping duties on softwood lumber. First quarter 2018 after-tax special items include charges of $21 million for environmental remediation and a $15 million benefit from product remediation insurance proceeds. First quarter 2017 special items include after-tax 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, 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

2017



2018





(millions)

Q4



Q1



Change

Net sales

$714



$733



$19

Contribution to pre-tax earnings

$265



$189



($76)

Pre-tax charge (benefit) for special items

($99)



$0



$99

Contribution to pre-tax earnings before special items

$166



$189



$23

Adjusted EBITDA

$252



$268



$16

1Q 2018 Performance - In the West, domestic and export log sales realizations improved compared with the fourth quarter, and forestry costs declined seasonally. In the South, seasonally lower fee harvest volumes were offset by slightly higher average sales realizations, lower unit logging costs and reduced forestry expense.

2Q 2018 Outlook - Weyerhaeuser expects second quarter earnings and Adjusted EBITDA will be significantly higher than the second quarter of 2017, but lower than the first quarter of 2018. Compared with the first quarter, the company anticipates seasonally higher unit logging costs and increased road and forestry costs, partially offset by slightly higher Western log sales realizations. Average Southern log sales realizations are expected to be similar to the first quarter.

REAL ESTATE, ENERGY & NATURAL RESOURCES

FINANCIAL HIGHLIGHTS

2017



2018





(millions)

Q4



Q1



Change

Net sales

$100



$51



($49)

Contribution to pre-tax earnings

$50



$25



($25)

Adjusted EBITDA

$87



$41



($46)

1Q 2018 Performance - Earnings and Adjusted EBITDA decreased compared to the fourth quarter due to seasonally lower Real Estate sales.

2Q 2018 Outlook - Weyerhaeuser anticipates second quarter earnings and Adjusted EBITDA will be comparable to the first quarter. We continue to expect full year 2018 Adjusted EBITDA for the segment will be approximately $250 million.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS

2017



2018





(millions)

Q4



Q1



Change

Net sales

$1,228



$1,309



$81

Contribution to pre-tax earnings

$180



$270



$90

Pre-tax charge (benefit) for special items

$41



($20)



($61)

Contribution to pre-tax earnings before special items

$221



$250



$29

Adjusted EBITDA

$258



$286



$28

1Q 2018 Performance - Sales volumes increased across most product lines compared with the fourth quarter due to seasonally higher demand, and operating rates improved. Higher average sales realizations for lumber and engineered wood products were partially offset by lower average sales realizations for oriented strand board and increased Western log costs.

First quarter Adjusted EBITDA includes charges of $5 million for countervailing and anti-dumping duties on Canadian softwood lumber. These duties are no longer reported as a special item.

First quarter special items consist of a $20 million pre-tax benefit from product remediation insurance proceeds.

2Q 2018 Outlook - Weyerhaeuser expects significantly higher earnings before special items and Adjusted EBITDA in the second quarter compared with the first quarter. The company anticipates seasonally higher sales volumes and improved operating rates. Higher average sales realizations for lumber, oriented strand board and engineered wood products will be partially offset by higher Western log costs.

UNALLOCATED

FINANCIAL HIGHLIGHTS

2017



2018





(millions)

Q4



Q1



Change

Contribution to pre-tax earnings

($25)



($92)



($67)

Pre-tax charge (benefit) for special items

($28)



$28



$56

Contribution to pre-tax earnings before special items

($53)



($64)



($11)

Adjusted EBITDA

($46)



($51)



($5)

1Q 2018 Performance - Non-cash charges for elimination of intercompany profit in inventory and LIFO increased compared with the fourth quarter due to higher values and volume for softwood lumber and Western log inventories. Non-cash non-operating pension and post-retirement expense also increased.

First quarter special items consist of $28 million in pre-tax charges for environmental remediation associated with a formerly owned mill site.

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 www.weyerhaeuser.com.

EARNINGS CALL INFORMATION

Weyerhaeuser will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on April 27, 2018, to discuss first quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on April 27, 2018.

To join the conference call from within North America, dial 855-223-0757 (access code: 1693068) at least 15 minutes prior to the call. Those calling from outside North America should dial 574-990-1206 (access code: 1693068). Replays will be available for two weeks at 855-859-2056 (access code: 1693068) from within North America and at 404-537-3406 (access code: 1693068) 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 second quarter of 2018: earnings and Adjusted EBITDA for each of our business segments; log sale realizations, fee harvest volumes and logging, road and forestry costs in our timber business; and sales volumes and realizations and operating rates for our Wood Products business. 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, 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 and the availability and cost of shipping and transportation;
  • economic activity in Asia, especially Japan and China;
  • 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;
  • changes in accounting principles; and
  • other matters described under "Risk Factors" in our 2017 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.

For more information contact:

Analysts - Beth Baum, 206-539-3907

Media - Nancy Thompson, 919-760-3484

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 December 31, 2017:



DOLLAR AMOUNTS IN MILLIONS

Timberlands



Real Estate

& ENR



Wood

Products



Unallocated

Items



Total

Adjusted EBITDA by Segment:



















Net earnings

















$

271



Interest expense, net of capitalized interest

















96



Income taxes

















103



Net contribution to earnings

$

265





$

50





$

180





$

(25)





$

470



Non-operating pension and other postretirement benefit (costs) credits













16





16



Interest income and other













(10)





(10)



Operating income (loss)

265





50





180





(19)





476



Depreciation, depletion and amortization

86





4





37









127



Basis of real estate sold





33













33



Unallocated pension service costs













1





1



Special items(1)(2)(3)

(99)









41





(28)





(86)



Adjusted EBITDA

$

252





$

87





$

258





$

(46)





$

551





(1) Pre-tax special items included in Timberlands consist of a $99 million gain on the sale of certain Southern timberlands.

(2) Pre-tax special items included in Wood Products consist of $50 million of product remediation charges, partially offset by a $9 million benefit from an adjustment to accrued softwood lumber countervailing and antidumping duties.

(3) Pre-tax special items included in Unallocated Items consist of $42 million for environmental remediation insurance recoveries and $14 million for Plum Creek merger-related costs.

 

The table below reconciles Adjusted EBITDA for the quarter ended March 31, 2018:



DOLLAR AMOUNTS IN MILLIONS

Timberlands



Real Estate & ENR



Wood Products



Unallocated Items



Total

Adjusted EBITDA by Segment:



















Net earnings

















$

269



Interest expense, net of capitalized interest

















93



Income taxes

















30



Net contribution to earnings

$

189





$

25





$

270





$

(92)





$

392



Non-operating pension and other postretirement benefit (costs) credits













24





24



Interest income and other













(12)





(12)



Operating income (loss)

189





25





270





(80)





404



Depreciation, depletion and amortization

79





4





36





1





120



Basis of real estate sold





12













12



Unallocated pension service costs



















Special items(1)(2)









(20)





28





8



Adjusted EBITDA

$

268





$

41





$

286





$

(51)





$

544





(1)   Pre-tax special items attributable to Wood Products include a $20 million benefit from product remediation insurance proceeds.

(2)   Pre-tax special items included in Unallocated Items consist of charges of $28 million for environment remediation.

 

The table below reconciles Adjusted EBITDA for the quarter ended March 31, 2017:

DOLLAR AMOUNTS IN MILLIONS

Timberlands



Real Estate & ENR



Wood Products



Unallocated Items



Total

Adjusted EBITDA by Segment:



















Net earnings

















$

157



Interest expense, net of capitalized interest

















99



Income taxes

















24



Net contribution to earnings

$

148





$

26





$

172





$

(66)





$

280



Non-operating pension and other postretirement benefit (costs) credits













22





22



Interest income and other













(9)





(9)



Operating income (loss)

148





26





172





(53)





293



Depreciation, depletion and amortization

94





3





35





1





133



Basis of real estate sold





14













14



Unallocated pension service costs













2





2



Special items(1)













12





12



Adjusted EBITDA

$

242





$

43





$

207





$

(38)





$

454





(1)   Pre-tax special items include $12 million of Plum Creek merger-related costs.

 

Weyerhaeuser Company





Exhibit 99.2

Q1.2018 Analyst Package







Preliminary results (unaudited)

















Consolidated Statement of Operations













in millions

Q4



Q1



December 31,

2017



March 31,

 2018



March 31,

 2017

Net sales

$

1,823





$

1,865





$

1,693



Cost of products sold

1,316





1,348





1,272



Gross margin

507





517





421



Selling expenses

21





23





22



General and administrative expenses

72





78





87



Research and development expenses

2





2





4



Charges for integration and restructuring, closures and asset impairments

16





2





13



Charges (recoveries) for product remediation

50





(20)







Other operating costs (income), net

(130)





28





2



Operating income

476





404





293



Non-operating pension and other postretirement benefit (costs) credits

(16)





(24)





(22)



Interest income and other

10





12





9



Interest expense, net of capitalized interest

(96)





(93)





(99)



Earnings before income taxes

374





299





181



Income taxes

(103)





(30)





(24)



Net earnings

$

271





$

269





$

157





Per Share Information





Q4



Q1



December 31,

 2017



March 31,

 2018



March 31,

 2017

Earnings per share, basic and diluted

$

0.36





$

0.35





$

0.21



Dividends paid per common share

$

0.32





$

0.32





$

0.31



Weighted average shares outstanding (in thousands):











Basic

755,409





756,815





750,665



Diluted

758,463





759,462





754,747



Common shares outstanding at end of period (in thousands)

755,223





756,700





751,411















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













in millions

Q4



Q1



December 31,

 2017



March 31,

 2018



March 31,

 2017

Net earnings

$

271





$

269





$

157



Non-operating pension and other postretirement benefit costs (credits)

16





24





22



Interest income and other

(10)





(12)





(9)



Interest expense, net of capitalized interest

96





93





99



Income taxes

103





30





24



Operating income

476





404





293



Depreciation, depletion and amortization

127





120





133



Basis of real estate sold

33





12





14



Unallocated pension service costs

1









2



Special items

(86)





8





12



Adjusted EBITDA*

$

551





$

544





$

454















*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

Q1.2018 Analyst Package







Preliminary results (unaudited)

















Special Items Included in Net Earnings (Income Tax Affected)













in millions

Q4



Q1



December 31,

 2017



March 31,

 2018



March 31,

 2017

Net earnings

$

271





$

269





$

157



Plum Creek merger and integration-related costs

12









10



Gain on sale of timberlands

(99)











Environmental remediation charges (recoveries)

(26)





21







Countervailing and antidumping duties charges (credits)(1)

(7)











Product remediation charges (recoveries)

31





(15)







Tax adjustments, including enactment of tax legislation

52











Net earnings before special items

$

234





$

275





$

167

















Q4



Q1



December 31,

 2017



March 31,

 2018



March 31,

 2017

Net earnings per diluted share

$

0.36





$

0.35





$

0.21



Plum Creek merger and integration-related costs

0.02









0.01



Gain on sale of timberlands

(0.14)











Environmental remediation charges (recoveries)

(0.03)





0.03







Countervailing and antidumping duties charges (credits)(1)

(0.01)











Product remediation charges (recoveries)

0.04





(0.02)







Tax adjustments, including enactment of tax legislation

0.07











Net earnings per diluted share before special items

$

0.31





$

0.36





$

0.22



(1)As of first quarter 2018, countervailing and anti-dumping duties are no longer reported as a special item.

 













Selected Total Company Items



in millions

Q4



Q1



December 31,

 2017



March 31,

 2018



March 31,

 2017

Pension and postretirement costs:











Pension and postretirement service costs

$

9





$

10





$

10



Non-operating pension and other postretirement benefit costs (credits)

16





24





22



Total company pension and postretirement costs

$

25





$

34





$

32



 



Weyerhaeuser Company







Q1.2018 Analyst Package





Preliminary results (unaudited)











Consolidated Balance Sheet













in millions

December 31,

 2017



March 31,

 2018



March 31,

 2017



ASSETS











Current assets:











Cash and cash equivalents

$

824





$

598





$

455



Receivables, less allowances

396





481





472



Receivables for taxes

14





24





10



Inventories

383





445





386



Prepaid expenses and other current assets

98





118





142



Current restricted financial investments held by variable interest entities





253







Total current assets

1,715





1,919





1,465



Property and equipment, net

1,618





1,573





1,544



Construction in progress

225





275





230



Timber and timberlands at cost, less depletion

12,954





12,888





14,218



Minerals and mineral rights, less depletion

308





306





317



Goodwill

40





40





40



Deferred tax assets

268





244





287



Other assets

316





278





285



Restricted financial investments held by variable interest entities

615





362





615



Total assets

$

18,059





$

17,885





$

19,001















LIABILITIES AND EQUITY











Current liabilities:











Current maturities of long-term debt

$

62





$





$

343



Current debt (nonrecourse to the company) held by variable interest entities

209





209







Accounts payable

249





245





227



Accrued liabilities

645





457





452



Total current liabilities

1,165





911





1,022



Long-term debt

5,930





5,928





6,263



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

302





302





511



Deferred pension and other postretirement benefits

1,487





1,454





1,287



Deposit received from contribution of timberlands to related party









422



Other liabilities

276





299





281



Total liabilities

9,160





8,894





9,786



Total equity

8,899





8,991





9,215



Total liabilities and equity

$

18,059





$

17,885





$

19,001



 

Weyerhaeuser Company



Q1.2018 Analyst Package

Preliminary results (unaudited)











Consolidated Statements of Cash Flows













in millions

Q4



Q1



December 31,

 2017



March 31,

 2018



March 31,

 2017

Cash flows from operations:











Net earnings

$

271





$

269





$

157



Noncash charges (credits) to income:











Depreciation, depletion and amortization

127





120





133



Basis of real estate sold

33





12





14



Deferred income taxes, net

35





10





3



Pension and other postretirement benefits

25





34





32



Share-based compensation expense

11





9





10



Charges for impairments of assets

1











Net gain on sale of southern timberlands

(99)











Foreign exchange transaction (gains) losses

(1)





2





3



Change in:











Receivables, less allowances

78





(83)





(70)



Receivables and payables for taxes

66





5





(36)



Inventories

(43)





(66)





(28)



Prepaid expenses

(3)





(5)





(9)



Accounts payable and accrued liabilities

(78)





(173)





(137)



Pension and postretirement benefit contributions and payments

(19)





(16)





(22)



Other

(50)





18





(15)



Net cash from operations

$

354





$

136





$

35















Cash flows from investing activities:











Purchases of property and equipment(1)

$

(145)





$

(61)





$

(52)



Timberlands reforestation costs(1)

(15)





(20)





(23)



Proceeds from sale of nonstrategic assets

6





2





8



Proceeds from sale of southern timberlands

 

203











Proceeds from redemption of ownership in related party

108











Other

18





3





(1)



Cash from (used in) investing activities

$

175





$

(76)





$

(68)















Cash flows from financing activities:











Cash dividends on common shares

$

(242)





$

(242)





$

(233)



Payments of long-term debt





(62)







Proceeds from exercise of stock options

39





25





55



Other

1





(7)





(10)



Cash from (used in) financing activities

$

(202)





$

(286)





$

(188)















Net change in cash and cash equivalents

$

327





$

(226)





$

(221)



Cash and cash equivalents at beginning of period

497





824





676



Cash and cash equivalents at end of period

$

824





$

598





$

455















Cash paid during the period for:











Interest, net of amount capitalized

$

66





$

105





$

120



Income taxes

$

40





$

17





$

59















(1) Purchases for property and equipment and Timberlands reforestation costs represent total Company cash spent for capital expenditures.

 

Weyerhaeuser Company

Timberlands Segment



Q1.2018 Analyst Package





Preliminary results (unaudited)



Segment Statement of Operations



















in millions



Q4.2017



Q1.2018



Q1.2017



Sales to unaffiliated customers

$

496





$

505





$

486





Intersegment sales

218





228





202





Total net sales

714





733





688





Cost of products sold

531





526





519





Gross margin

183





207





169





Selling expenses

1





1





1





General and administrative expenses

19





23





24





Research and development expenses

2





2





3





Other operating income, net

(104)





(8)





(7)





Operating income and Net contribution to earnings

$

265





$

189





$

148





















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



















in millions



Q4.2017



Q1.2018



Q1.2017



Operating income

$

265





$

189





$

148





Depreciation, depletion and amortization

86





79





94





Special items

(99)













Adjusted EBITDA*

$

252





$

268





$

242





*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



Q4.2017



Q1.2018



Q1.2017



Gain on sale of timberlands

$

99





$





$









Selected Segment Items



















in millions



Q4.2017



Q1.2018



Q1.2017



Total decrease (increase) in working capital(1)

$

(15)





$

(40)





$

(18)





Cash spent for capital expenditures

$

(36)





$

(28)





$

(30)





(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)





















Q4.2017



Q1.2018



Q1.2017



Third Party Net Sales(millions)

Delivered logs:













West

$

242





$

266





$

225





South

165





157





148





North

27





25





27





Other

11





14





20





Total delivered logs

445





462





420





Stumpage and pay-as-cut timber

21





15





12





Products from international operations









19





Recreational and other lease revenue

14





14





14





Other revenue

16





14





21





Total

$

496





$

505





$

486





Delivered Logs

Third Party Sales

Realizations (per ton)

West

$

121.41





$

131.59





$

104.27





South

$

34.53





$

34.83





$

34.48





North

$

60.77





$

60.79





$

59.57





Delivered Logs

Third Party Sales

Volumes

(tons, thousands)

West

1,992





2,019





2,157





South

4,790





4,510





4,293





North

439





404





454





Other

232





317





510





Fee Harvest Volumes

(tons, thousands)

West

2,544





2,443





2,657





South

7,350





6,751





6,373





North

635





549





622





Other









371





(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 Resources Segment



Q1.2018 Analyst Package



Preliminary results (unaudited)



















Segment Statement of Operations



















in millions



Q4.2017



Q1.2018



Q1.2017



Net sales

$

100





$

51





$

53





Cost of products sold

43





19





20





Gross margin

57





32





33





General and administrative expenses

6





7





7





Other operating costs (income), net

1













Operating income and net contribution to earnings

$

50





$

25





$

26





















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



















in millions



Q4.2017



Q1.2018



Q1.2017



Operating income

$

50





$

25





$

26





Depreciation, depletion and amortization

4





4





3





Basis of real estate sold

33





12





14





Adjusted EBITDA*

$

87





$

41





$

43





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



















Selected Segment Items



















in millions



Q4.2017



Q1.2018



Q1.2017



Cash spent for capital expenditures

$





$





$





















Segment Statistics





















Q4.2017



Q1.2018



Q1.2017



Net Sales

(millions)

Real Estate

$

80





$

34





$

37





Energy and Natural Resources

20





17





16





Total

$

100





$

51





$

53





Acres Sold

Real Estate

38,226





21,771





13,257





Price per Acre

Real Estate

$

2,076





$

1,539





$

2,403





 

Weyerhaeuser Company

Wood Products Segment

Q1.2018 Analyst Package









Preliminary results (unaudited)





















Segment Statement of Operations

in millions



Q4.2017



Q1.2018



Q1.2017

Net sales

$

1,228





$

1,309





$

1,154



Cost of products sold

947





1,005





926



Gross margin

281





304





228



Selling expenses

20





21





21



General and administrative expenses

32





34





32



Research and development expenses









1



Charges for integration and restructuring, closures and asset impairments

2





2





1



Charges (recoveries) for product remediation

50





(20)







Other operating costs (income), net

(3)





(3)





1



Operating income and Net contribution to earnings

$

180





$

270





$

172

















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

in millions



Q4.2017



Q1.2018



Q1.2017

Operating income

$

180





$

270





$

172



Depreciation, depletion and amortization

37





36





35



Special items

41





(20)







Adjusted EBITDA*

$

258





$

286





$

207



*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



Q4.2017



Q1.2018



Q1.2017

Countervailing and antidumping duties (charges) credits(1)

$

9





$





$



Product remediation (charges) recoveries

(50)





20







Total

$

(41)





$

20





$



(1)As of first quarter 2018, countervailing and anti-dumping duties are no longer reported as a special item.















Selected Segment Items















in millions



Q4.2017



Q1.2018



Q1.2017

Total decrease (increase) in working capital(1)

$

(81)





$

(226)





$

(122)



Cash spent for capital expenditures

$

(123)





$

(52)





$

(44)



(1) 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

Q4.2017



Q1.2018



Q1.2017

Structural Lumber

(volumes presented

in board feet)

Third party net sales

$

517





$

569





$

478



Third party sales realizations

$

466





$

498





$

413



Third party sales volumes(2)

1,110





1,140





1,158



Production volumes

1,118





1,160





1,152



Engineered Solid

Section

(volumes presented

in cubic feet)

Third party net sales

$

122





$

129





$

117



Third party sales realizations

$

2,076





$

2,088





$

1,881



Third party sales volumes(2)

5.9





6.2





6.2



Production volumes

5.8





6.3





6.3



Engineered

I-joists

(volumes presented

in lineal feet)

Third party net sales

$

85





$

78





$

73



Third party sales realizations

$

1,561





$

1,585





$

1,481



Third party sales volumes(2)

54





49





49



Production volumes

52





56





50



Oriented Strand

Board

(volumes presented

in square feet 3/8")

Third party net sales

$

233





$

232





$

203



Third party sales realizations

$

335





$

314





$

263



Third party sales volumes(2)

697





739





769



Production volumes

739





734





758



Softwood Plywood

(volumes presented

in square feet 3/8")

Third party net sales

$

40





$

50





$

44



Third party sales realizations

$

417





$

438





$

377



Third party sales volumes(2)

95





115





118



Production volumes

86





97





97



Medium Density

Fiberboard 

(volumes presented

in square feet 3/4")

Third party net sales

$

37





$

43





$

47



Third party sales realizations

$

829





$

839





$

795



Third party sales volumes(2)

45





51





59



Production volumes

50





50





56





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

 

Weyerhaeuser Company

Unallocated Items

Q1.2018 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

Q4.2017



Q1.2018



Q1.2017

Unallocated corporate function and variable compensation expense

$

(18)





$

(18)





$

(19)



Liability classified share-based compensation

(2)









(6)



Foreign exchange gains (losses)

1





(2)





(3)



Elimination of intersegment profit in inventory and LIFO

(14)





(21)





(6)



Charges for integration and restructuring, closures and asset impairments

(14)









(12)



Other

28





(39)





(7)



Operating income (loss)

(19)





(80)





(53)



Non-operating pension and other postretirement benefit (costs) credits

(16)





(24)





(22)



Interest income and other

10





12





9



Net contribution to earnings

$

(25)





$

(92)





$

(66)















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













in millions

Q4.2017



Q1.2018



Q1.2017

Operating income (loss)

$

(19)





$

(80)





$

(53)



Depreciation, depletion and amortization





1





1



Unallocated pension service costs

1









2



Special items

(28)





28





12



Adjusted EBITDA*

$

(46)





$

(51)





$

(38)



*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

Q4.2017



Q1.2018



Q1.2017

Plum Creek merger and integration-related costs

$

(14)





$





$

(12)



Environmental remediation insurance (charges) recoveries

42





(28)







Total

$

28





$

(28)





$

(12)















Unallocated Selected Items













in millions

Q4.2017



Q1.2018



Q1.2017

Cash spent for capital expenditures

$

(1)





$

(1)





$

(1)



 

Cision View original content:http://www.prnewswire.com/news-releases/weyerhaeuser-reports-first-quarter-results-300637855.html

SOURCE Weyerhaeuser Company

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