Weyerhaeuser reports second quarter results

Weyerhaeuser reports second quarter results

-- Net earnings increased 18% compared with first quarter

-- Earnings before special items increased 21% compared with first quarter and 57% compared with one year ago

-- Highest Wood Products EBITDA on record

PR Newswire

SEATTLE, July 27, 2018 /PRNewswire/ -- Weyerhaeuser Company WY today reported second quarter net earnings of $317 million, or 42 cents per diluted share, on net sales of $2.1 billion. This compares with earnings of $24 million, or 3 cents per diluted share, on net sales of $1.8 billion for the same period last year.

Weyerhaeuser Company logo. (PRNewsFoto/Weyerhaeuser Company)

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

Excluding net after-tax special charges of $15 million, the company reported net earnings of $332 million, or 44 cents per diluted share for the second quarter. This compares with net earnings before special items of $212 million for the same period last year and $275 million for the first quarter of 2018.  Adjusted EBITDA for the second quarter was $637 million compared with $506 million for the second quarter of last year and $544 million for the first quarter of 2018.

"I am very pleased with our second quarter financial results, as each of our businesses delivered solid operational performance and capitalized on market conditions to drive strong year-over-year improvement, including the highest Wood Products EBITDA on record," said Doyle R. Simons, president and chief executive officer. "In addition, we delivered Weyerhaeuser's highest EBITDA since 2006, when the company's operations were nearly three times larger than they are today. Looking forward, housing market fundamentals remain strong, and we remain relentlessly focused on driving operational excellence and fully capitalizing on market conditions to drive value for shareholders."

WEYERHAEUSER FINANCIAL HIGHLIGHTS

2018



2018



2017

(millions, except per share data)

Q1



Q2



Q2

Net sales

$1,865



$2,065



$1,808

Net earnings

$269



$317



$24

Net earnings per diluted share

$0.35



$0.42



$0.03

Weighted average shares outstanding, diluted

759



761



756

Net earnings before special items(1)

$275



$332



$212

Net earnings per diluted share before special items

$0.36



$0.44



$0.28

Adjusted EBITDA(2)

$544



$637



$506















(1)

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. Second quarter 2018 special items include $15 million of net after-tax charges for product remediation. Second quarter 2017 after-tax special items include a $147 million non-cash impairment charge for the Uruguay business, and charges of $31 million for product remediation, $8 million for countervailing and antidumping duties on Canadian softwood lumber the company sold into the United States and $2 million for Plum Creek merger-related costs. Beginning first quarter 2018, these 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)

Q1



Q2



Change

Net sales

$733



$667



($66)

Contribution to pre-tax earnings

$189



$161



($28)

Adjusted EBITDA

$268



$240



($28)

2Q 2018 Performance - In the South, log sales volumes were comparable with the first quarter and average realizations declined slightly due to a greater proportion of pulpwood sales. Unit logging costs increased seasonally due to additional thinning activity. In the West, slightly higher average log sales realizations were more than offset by seasonally higher forestry, road and unit logging costs. Fuel costs increased in both regions.

3Q 2018 Outlook - Weyerhaeuser expects third quarter earnings and Adjusted EBITDA will be lower than the second quarter, but slightly higher than the third quarter of 2017. The company anticipates seasonally higher road and forestry costs and higher fuel and unit logging costs. In the West, average sales realizations are expected to be slightly lower than the second quarter and fee harvest volumes will be comparable. In the South, the company anticipates higher fee harvest volumes and comparable average log sales realizations.



REAL ESTATE, ENERGY & NATURAL RESOURCES













FINANCIAL HIGHLIGHTS

2018



2018





(millions)

Q1



Q2



Change

Net sales

$51



$58



$7

Contribution to pre-tax earnings

$25



$22



($3)

Adjusted EBITDA

$41



$47



$6

2Q 2018 Performance - Real Estate sales increased slightly compared with the first quarter and Energy and Natural Resources royalties were modestly higher. Adjusted EBITDA increased, but earnings were slightly lower due to a higher average land basis on the mix of properties sold.

3Q 2018 Outlook - Weyerhaeuser anticipates third quarter earnings and Adjusted EBITDA will be higher than the second quarter. We continue to expect full year 2018 Adjusted EBITDA for the segment will be approximately $250 million.



WOOD PRODUCTS













FINANCIAL HIGHLIGHTS

2018



2018





(millions)

Q1



Q2



Change

Net sales

$1,309



$1,525



$216

Contribution to pre-tax earnings

$270



$329



$59

Pre-tax charge (benefit) for special items

($20)



$20



$40

Contribution to pre-tax earnings before special items

$250



$349



$99

Adjusted EBITDA

$286



$385



$99

2Q 2018 Performance - Average sales realizations for lumber and oriented strand board improved significantly compared with the first quarter, and engineered wood products realizations increased modestly. Sales volumes rose seasonally for all product lines. These factors were partially offset by higher log, raw material and transportation costs.

Second quarter special items consist of a $20 million net pre-tax charge for finalization of product remediation costs.

3Q 2018 Outlook - Weyerhaeuser expects earnings before special items and Adjusted EBITDA will decrease compared with the second quarter. The company anticipates moderately lower average sales realizations for lumber and oriented strand board. As previously disclosed, sales volumes for oriented strand board will be lower due to an extended outage at our Grayling, Michigan mill for a scheduled press replacement.













UNALLOCATED













FINANCIAL HIGHLIGHTS

2018



2018





(millions)

Q1



Q2



Change

Contribution to pre-tax earnings

($92)



($38)



$54

Pre-tax charge for special items

$28



$ -



($28)

Contribution to pre-tax earnings before special items

($64)



($38)



$26

Adjusted EBITDA

($51)



($35)



$16

2Q 2018 Performance - Second quarter results include a small non-cash benefit from elimination of intersegment profit in inventory and LIFO due to reduced log and lumber inventories. This compares with a charge in the first quarter. Non-cash non-operating pension and post-retirement expense also decreased due to finalization of measurements of year-end pension plan assets and liabilities.

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 July 27, 2018, to discuss second quarter results.

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

To join the conference call from within North America, dial 855-223-0757 (access code: 5882807) at least 15 minutes prior to the call. Those calling from outside North America should dial 574-990-1206 (access code: 5882807). Replays will be available for two weeks at 855-859-2056 (access code: 5882807) from within North America and at 404-537-3406 (access code: 5882807) 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 third quarter of 2018: earnings and Adjusted EBITDA for each of our Timber and Real Estate, Energy & Natural Resources business segments; earnings before special items and Adjusted EBITDA for our Wood Products business segment; log sales realizations, fee harvest volumes, road and forestry costs and fuel and unit logging costs in our timber business; and sales realizations for lumber and oriented strand board and sales volumes for oriented strand board 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 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













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



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 environmental remediation.

The table below reconciles Adjusted EBITDA for the quarter ended June 30, 2018:

DOLLAR AMOUNTS IN MILLIONS

Timberlands



Real Estate

& ENR



Wood

Products



Unallocated

Items



Total

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 June 30, 2017:

DOLLAR AMOUNTS IN MILLIONS

Timberlands



Real Estate

& ENR



Wood

Products



Unallocated

Items



Total

Adjusted EBITDA by Segment:



















Net earnings

















$

24



Interest expense, net of capitalized interest

















100



Income taxes

















34



Net contribution to earnings

$

(12)





$

23





$

177





$

(30)





$

158



Non-operating pension and other postretirement benefit costs













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



Special items(1)

147









61





2





210



Adjusted EBITDA

$

222





$

37





$

274





$

(27)





$

506





(1)

Pre-tax special items include $147 million of impairment charges related to our Uruguayan operations; $50 million for product remediation; $11 million of countervailing and antidumping duties; and $2 million of Plum Creek merger-related costs.













Weyerhaeuser Company

Exhibit 99.2

Q2.2018 Analyst Package



Preliminary results (unaudited)





















Consolidated Statement of Operations





















in millions

Q1



Q2



Year-to-Date



March 31,

 2018



June 30,

 2018



June 30,

 2017



June 30,

 2018



June 30,

 2017

Net sales

$

1,865





$

2,065





$

1,808





$

3,930





$

3,501



Cost of products sold

1,348





1,447





1,336





2,795





2,608



Gross margin

517





618





472





1,135





893



Selling expenses

23





23





22





46





44



General and administrative expenses

78





80





76





158





163



Research and development expenses

2





2





4





4





8



Charges for integration and restructuring, closures and asset impairments

2









151





2





164



Charges (recoveries) for product remediation, net

(20)





20





50









50



Other operating costs (income), net

28





17





12





45





14



Operating income

404





476





157





880





450



Non-operating pension and other postretirement benefit costs

(24)





(13)





(8)





(37)





(30)



Interest income and other

12





11





9





23





18



Interest expense, net of capitalized interest

(93)





(92)





(100)





(185)





(199)



Earnings before income taxes

299





382





58





681





239



Income taxes

(30)





(65)





(34)





(95)





(58)



Net earnings

$

269





$

317





$

24





$

586





$

181





Per Share Information





Q1



Q2



Year-to-Date



March 31,

 2018



June 30,

 2018



June 30,

 2017



June 30,

 2018



June 30,

 2017

Earnings per share, basic and diluted

$

0.35





$

0.42





$

0.03





$

0.77





$

0.24



Dividends paid per common share

$

0.32





$

0.32





$

0.31





$

0.64





$

0.62



Weighted average shares outstanding (in thousands):



















Basic

756,815





757,829





752,630





757,317





751,674



Diluted

759,462





760,533





756,451





759,992





755,625



Common shares outstanding at end of period (in thousands)

756,700





757,646





752,711





757,646





752,711





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



in millions

Q1



Q2



Year-to-Date



March 31,

 2018



June 30,

 2018



June 30,

 2017



June 30,

 2018



June 30,

 2017

Net earnings

$

269





$

317





$

24





$

586





$

181



Non-operating pension and other postretirement benefit costs

24





13





8





37





30



Interest income and other

(12)





(11)





(9)





(23)





(18)



Interest expense, net of capitalized interest

93





92





100





185





199



Income taxes

30





65





34





95





58



Operating income

404





476





157





880





450



Depreciation, depletion and amortization

120





119





129





239





262



Basis of real estate sold

12





22





10





34





24



Unallocated pension service costs

















2



Special items

8





20





210





28





222



Adjusted EBITDA*

$

544





$

637





$

506





$

1,181





$

960























*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

Q2.2018 Analyst Package







Preliminary results (unaudited)























Special Items Included in Net Earnings (Income Tax Affected)





















in millions

Q1



Q2



Year-to-Date



March 31,

 2018



June 30,

 2018



June 30,

 2017



June 30,

 2018



June 30,

 2017

Net earnings

$

269





$

317





$

24





$

586





$

181



Plum Creek merger and integration-related costs









2









12



Restructuring, impairment and other charges









147









147



Environmental remediation charges (recoveries)

21













21







Countervailing and antidumping duties charges (credits)(1)









8









8



Product remediation charges (recoveries), net

(15)





15





31









31



Net earnings before special items

$

275





$

332





$

212





$

607





$

379

































































Q1



Q2



Year-to-Date



March 31,

 2018



June 30,

 2018



June 30,

 2017



June 30,

 2018



June 30,

 2017

Net earnings per diluted share

$

0.35





$

0.42





$

0.03





$

0.77





$

0.24



Plum Creek merger and integration-related costs

















0.02



Restructuring, impairment and other charges









0.20









0.19



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





0.04









0.04



Net earnings per diluted share before special items

$

0.36





$

0.44





$

0.28





$

0.80





$

0.50



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











































Selected Total Company Items



in millions

Q1



Q2



Year-to-Date



March 31,

 2018



June 30,

 2018



June 30,

 2017



June 30,

 2018



June 30,

 2017

Pension and postretirement costs:



















Pension and postretirement service costs

$

10





$

8





$

7





$

18





$

17



Non-operating pension and other postretirement benefit costs

24





13





8





37





30



Total company pension and postretirement costs

$

34





$

21





$

15





$

55





$

47



























Weyerhaeuser Company



Q2.2018 Analyst Package

Preliminary results (unaudited)





Consolidated Balance Sheet













in millions

March 31,

 2018



June 30,

 2018



December 31,

 2017



ASSETS











Current assets:











Cash and cash equivalents

$

598





$

901





$

824



Receivables, less discounts and allowances

481





491





396



Receivables for taxes

24





23





14



Inventories

445





414





383



Prepaid expenses and other current assets

118





146





98



Current restricted financial investments held by variable interest entities

253





253







Total current assets

1,919





2,228





1,715



Property and equipment, net

1,573





1,597





1,618



Construction in progress

275





282





225



Timber and timberlands at cost, less depletion

12,888





12,790





12,954



Minerals and mineral rights, less depletion

306





302





308



Goodwill

40





40





40



Deferred tax assets

244





168





268



Other assets

278





279





316



Restricted financial investments held by variable interest entities

362





362





615



Total assets

$

17,885





$

18,048





$

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





209



Accounts payable

245





270





249



Accrued liabilities

457





543





645



Total current liabilities

911





1,022





1,165



Long-term debt

5,928





5,924





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





1,487



Other liabilities

299





295





276



Total liabilities

8,894





8,767





9,160



Total equity

8,991





9,281





8,899



Total liabilities and equity

$

17,885





$

18,048





$

18,059



























Weyerhaeuser Company





Q2.2018 Analyst Package



Preliminary results (unaudited)











Consolidated Statements of Cash Flows





















in millions

Q1



Q2



Year-to-Date



March 31,

 2018



June 30,

 2018



June 30,

 2017



June 30,

 2018



June 30,

 2017

Cash flows from operations:



















Net earnings

$

269





$

317





$

24





$

586





$

181



Noncash charges (credits) to income:



















Depreciation, depletion and amortization

120





119





129





239





262



Basis of real estate sold

12





22





10





34





24



Deferred income taxes, net

10





15





3





25





6



Pension and other postretirement benefits

34





21





15





55





47



   Share-based compensation expense

9





9





9





18





19



   Charges for impairments of assets

1









147





1





147



Change in:



















Receivables, less allowances

(83)





(18)





(8)





(101)





(78)



Receivables and payables for taxes

5





10





(17)





15





(53)



Inventories

(66)





30





21





(36)





(7)



Prepaid expenses

(5)





4





(4)





(1)





(13)



Accounts payable and accrued liabilities

(173)





103





192





(70)





55



Pension and postretirement benefit contributions and payments

(16)





(16)





(15)





(32)





(37)



Other

19





(19)





(17)









(29)



Net cash from operations

$

136





$

597





$

489





$

733





$

524



Cash flows from investing activities:



















Capital expenditures for property and equipment

$

(61)





$

(83)





$

(74)





$

(144)





$

(126)



Capital expenditures for timberlands reforestation

(20)





(14)





(13)





(34)





(36)



Proceeds from sale of nonstrategic assets

2









4





2





12



Other

3





24





45





27





44



Cash from (used in) investing activities

$

(76)





$

(73)





$

(38)





$

(149)





$

(106)



Cash flows from financing activities:



















Cash dividends on common shares

$

(242)





$

(243)





$

(233)





$

(485)





$

(466)



Payments of long-term debt

(62)













(62)







Proceeds from exercise of stock options

25





23





26





48





81



Other

(7)





(1)





2





(8)





(8)



Cash from (used in) financing activities

$

(286)





$

(221)





$

(205)





$

(507)





$

(393)























Net change in cash and cash equivalents

$

(226)





$

303





$

246





$

77





$

25



Cash and cash equivalents at beginning of period

824





598





455





824





676



Cash and cash equivalents at end of period

$

598





$

901





$

701





$

901





$

701























Cash paid during the period for:



















Interest, net of amount capitalized

$

105





$

67





$

72





$

172





$

192



Income taxes

$

17





$

41





$

47





$

58





$

106



























Weyerhaeuser Company

Timberlands Segment



Q2.2018 Analyst Package







Preliminary results (unaudited)





Segment Statement of Operations



in millions



Q1.2018



Q2.2018



Q2.2017



YTD.2018



YTD.2017



Sales to unaffiliated customers

$

505





$

482





$

469





$

987





$

955





Intersegment sales

228





185





163





413





365





Total net sales

733





667





632





1,400





1,320





Cost of products sold

526





485





476





1,011





995





Gross margin

207





182





156





389





325





Selling expenses

1









1





1





2





General and administrative expenses

23





25





23





48





47





Research and development expenses

2





1





4





3





7





Charges for integration and restructuring, closures and asset impairments









147









147





Other operating costs (income), net

(8)





(5)





(7)





(13)





(14)





Operating income and Net contribution to earnings

$

189





$

161





$

(12)





$

350





$

136













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



in millions



Q1.2018



Q2.2018



Q2.2017



YTD.2018



YTD.2017



Operating income

$

189





$

161





$

(12)





$

350





$

136





Depreciation, depletion and amortization

79





79





87





158





181





Special items









147









147





Adjusted EBITDA*

$

268





$

240





$

222





$

508





$

464





*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



Q2.2017



YTD.2018



YTD.2017



Restructuring, impairment and other charges

$





$





$

(147)





$





$

(147)













Selected Segment Items



in millions



Q1.2018



Q2.2018



Q2.2017



YTD.2018



YTD.2017



Total decrease (increase) in working capital(1)

$

(40)





$

70





$

(5)





$

30





$

(42)





Cash spent for capital expenditures

$

(28)





$

(29)





$

(25)





$

(57)





$

(55)





(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



Q2.2017



YTD.2018



YTD.2017



Third Party

Net Sales

(millions)

Delivered logs:





















  West

$

266





$

262





$

227





$

528





$

452





  South

157





158





148





315





296





  North

25





20





16





45





43





  Other

14





7





11





21





31





Total delivered logs

462





447





402





909





822





Stumpage and pay-as-cut timber

15





11





17





26





29





Products from international operations









21









40





Recreational and other lease revenue

14





15





15





29





29





Other revenue

14





9





14





23





35





Total

$

505





$

482





$

469





$

987





$

955





Delivered Logs

Third Party Sales

Realizations (per ton)

West

$

131.59





$

132.24





$

105.84





$

131.91





$

105.06





South

$

34.83





$

34.55





$

34.48





$

34.69





$

34.48





North

$

60.79





$

64.92





$

63.49





$

62.59





$

60.97





Delivered Logs

Third Party Sales

Volumes

(tons, thousands)

West

2,019





1,984





2,143





4,003





4,300





South

4,510





4,560





4,285





9,070





8,578





North

404





313





253





717





707





Other

317





81





292





398





802





Fee Harvest Volumes

(tons, thousands)

West

2,443





2,360





2,652





4,803





5,309





South

6,751





6,630





6,473





13,381





12,846





North

549





423





383





972





1,005





Other









444









815





(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



Q2.2018 Analyst Package





Preliminary results (unaudited)





















Segment Statement of Operations







in millions



Q1.2018



Q2.2018



Q2.2017



YTD.2018



YTD.2017



Net sales

$

51





$

58





$

46





$

109





$

99





Cost of products sold

19





30





16





49





36





Gross margin

32





28





30





60





63





General and administrative expenses

7





6





7





13





14





Other operating costs (income), net





















Operating income and net contribution to earnings

$

25





$

22





$

23





$

47





$

49













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







in millions



Q1.2018



Q2.2018



Q2.2017



YTD.2018



YTD.2017



Operating income

$

25





$

22





$

23





$

47





$

49





Depreciation, depletion and amortization

4





3





4





7





7





Basis of real estate sold

12





22





10





34





24





Adjusted EBITDA*

$

41





$

47





$

37





$

88





$

80





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



















Selected Segment Items







in millions



Q1.2018



Q2.2018



Q2.2017



YTD.2018



YTD.2017



Cash spent for capital expenditures

$





$





$

(1)





$





$

(1













Segment Statistics









Q1.2018



Q2.2018



Q2.2017



YTD.2018



YTD.2017



Net Sales

(millions)

Real Estate

$

34





$

38





$

27





$

72





$

64





Energy and Natural Resources

17





20





19





37





35





Total

$

51





$

58





$

46





$

109





$

99





Acres Sold

Real Estate

21,771





16,290





10,003





38,061





23,260





Price per Acre

Real Estate

$

1,539





$

2,258





$

2,714





$

1,847





$

2,537





















































Weyerhaeuser Company







Wood Products Segment

Q2.2018 Analyst Package







Preliminary results (unaudited)

























Segment Statement of Operations

in millions



Q1.2018



Q2.2018



Q2.2017



YTD.2018



YTD.2017

Net sales

$

1,309





$

1,525





$

1,293





$

2,834





$

2,447



Cost of products sold

1,005





1,119





1,002





2,124





1,928



Gross margin

304





406





291





710





519



Selling expenses

21





22





19





43





40



General and administrative expenses

34





31





32





65





64



Research and development expenses





1









1





1



Charges for integration and restructuring, closures and asset impairments

2









2





2





3



Charges (recoveries) for product remediation, net

(20)





20















Other operating costs (income), net

(3)





3





61









62



Operating income and Net contribution to earnings

$

270





$

329





$

177





$

599





$

349







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

in millions



Q1.2018



Q2.2018



Q2.2017



YTD.2018



YTD.2017

Operating income

$

270





$

329





$

177





$

599





$

349



Depreciation, depletion and amortization

36





36





36





72





71



Special items

(20)





20





61









61



Adjusted EBITDA*

$

286





$

385





$

274





$

671





$

481



*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



Q2.2017



YTD.2018



YTD.2017

Countervailing and antidumping duties (charges) credits(1)

$





$





$

(11)





$





$

(11)



Product remediation (charges) recoveries, net

20





(20)





(50)









(50)



Total

$

20





$

(20)





$

(61)





$





$

(61)



(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



Q2.2017



YTD.2018



YTD.2017

Total decrease (increase) in working capital(2)

$

(226)





$

3





$

113





$

(223)





$

(9)



Cash spent for capital expenditures

$

(52)





$

(68)





$

(61)





$

(120)





$

(105)



(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



Q2.2017



YTD.2018



YTD.2017

Structural Lumber

(volumes presented

in board feet)

Third party net sales

$

569





$

681





$

538





$

1,250





$

1,016



Third party sales realizations

$

498





$

541





$

441





$

521





$

427



Third party sales volumes(3)

1,140





1,261





1,218





2,401





2,376



Production volumes

1,160





1,180





1,146





2,340





2,298



Engineered Solid

Section

(volumes presented

in cubic feet)

Third party net sales

$

129





$

139





$

130





$

268





$

247



Third party sales realizations

$

2,088





$

2,156





$

1,979





$

2,123





$

1,931



Third party sales volumes(3)

6.2





6.4





6.6





12.6





12.8



Production volumes

6.3





6.4





6.6





12.7





12.9



Engineered

I-joists

(volumes presented

in lineal feet)

Third party net sales

$

78





$

92





$

85





$

170





$

158



Third party sales realizations

$

1,585





$

1,630





$

1,522





$

1,609





$

1,503



Third party sales volumes(3)

49





57





57





106





106



Production volumes

56





52





53





108





103



Oriented Strand

Board

(volumes presented

in square feet 3/8")

Third party net sales

$

232





$

277





$

225





$

509





$

428



Third party sales realizations

$

314





$

367





$

295





$

341





$

279



Third party sales volumes(3)

739





754





764





1,493





1,533



Production volumes

734





747





754





1,481





1,512



Softwood Plywood

(volumes presented

in square feet 3/8")

Third party net sales

$

50





$

55





$

47





$

105





$

91



Third party sales realizations

$

438





$

461





$

380





$

450





$

379



Third party sales volumes(3)

115





118





123





233





241



Production volumes

97





105





99





202





196



Medium Density

Fiberboard 

(volumes presented

in square feet 3/4")

Third party net sales

$

43





$

47





$

51





$

90





$

98



Third party sales realizations

$

839





$

839





$

845





$

839





$

820



Third party sales volumes(3)

51





55





60





106





119



Production volumes

50





57





63





107





119



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

Weyerhaeuser Company







Unallocated Items

Q2.2018 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



Q2.2017



YTD.2018



YTD.2017

Unallocated corporate function and variable compensation expense

$

(18)





$

(19)





$

(17)





$

(37)





$

(36)



Liability classified share-based compensation





(2)









(2)





(6)



Foreign exchange gains (losses)

(2)





2













(3)



Elimination of intersegment profit in inventory and LIFO

(21)





3





(3)





(18)





(9)



Charges for integration and restructuring, closures and asset impairments









(2)









(14)



Other

(39)





(20)





(9)





(59)





(16)



Operating income (loss)

(80)





(36)





(31)





(116)





(84)



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

(24)





(13)





(8)





(37)





(30



Interest income and other

12





11





9





23





18



Net contribution to earnings

$

(92)





$

(38)





$

(30)





$

(130)





$

(96)





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



in millions

Q1.2018



Q2.2018



Q2.2017



YTD.2018



YTD.2017

Operating income (loss)

$

(80)





$

(36)





$

(31)





$

(116)





$

(84)



Depreciation, depletion and amortization

1





1





2





2





3



Unallocated pension service costs

















2



Special items

28









2





28





14



Adjusted EBITDA*

$

(51)





$

(35)





$

(27)





$

(86)





$

(65)



*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



Q2.2017



YTD.2018



YTD.2017

Plum Creek merger and integration-related costs

$





$





$

(2)





$





$

(14)



Environmental remediation insurance (charges) recoveries

(28)













(28)







Total

$

(28)





$





$

(2)





$

(28)





$

(14)





Unallocated Selected Items



in millions

Q1.2018



Q2.2018



Q2.2017



YTD.2018



YTD.2017

Cash spent for capital expenditures

$

(1)





$





$





$

(1)





$

(1)



 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/weyerhaeuser-reports-second-quarter-results-300687665.html

SOURCE Weyerhaeuser Company

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