SEATTLE, Jan. 31, 2020 /PRNewswire/ -- Weyerhaeuser Company WY today reported a fourth quarter net loss of $14 million, or two cents per diluted share, on net sales of $1.5 billion. This compares with a net loss of $93 million, or 12 cents per diluted share, on net sales of $1.6 billion for the same period last year and net earnings of $99 million for the third quarter of 2019.
View our earnings release and financial statements in a printer-friendly PDF.
Excluding net after-tax charges of $37 million for special items, the company reported fourth quarter net earnings of $23 million, or three cents per diluted share. This compares with net earnings before special items of $70 million for the same period last year and $59 million for the third quarter of 2019.
Adjusted EBITDA for the fourth quarter of 2019 was $260 million compared with $346 million for the same period last year and $308 million for the third quarter of 2019.
For the full year 2019, Weyerhaeuser reported a net loss of $76 million, or 10 cents per diluted share, on net sales of $6.6 billion. This compares with net earnings of $748 million on net sales of $7.5 billion for the full year 2018.
Full year 2019 includes net after-tax charges of $361 million for special items. Excluding these items, the company reported net earnings before special items of $285 million, or 39 cents per diluted share. This compares with net earnings before special items of $891 million for the full year 2018.
"Our 2019 performance reflects strong execution across all businesses despite significant headwinds from a sluggish housing market, global trade uncertainty, and persistently challenged commodity prices," said Devin W. Stockfish, president and chief executive officer. "Through our continued focus on operational excellence, we achieved record low cost performance in lumber and oriented strand board and delivered the highest EBITDA ever from our Real Estate & ENR business. Additionally, we reduced our pension obligations by $1.5 billion, strategically optimized a significant portion of our Northern timberlands portfolio, and returned over $1 billion of cash to shareholders. Entering 2020, we are encouraged by the recent pickup in U.S. housing activity, and we expect modest growth will drive improvement across our markets as the year progresses. We remain focused on creating value for shareholders through industry-leading operating performance and disciplined capital allocation."
WEYERHAEUSER FINANCIAL HIGHLIGHTS | 2019 | 2019 | 2018 | 2019 | 2018 | ||||
(millions, except per share data) | Q3 | Q4 | Q4 | Full Year | Full Year | ||||
Net sales | $1,671 | $1,548 | $1,636 | $6,554 | $7,476 | ||||
Net earnings (loss) | $99 | ($14) | ($93) | ($76) | $748 | ||||
Net earnings (loss) per diluted share | $0.13 | ($0.02) | ($0.12) | ($0.10) | $0.99 | ||||
Weighted average shares outstanding, diluted | 747 | 746 | 750 | 746 | 757 | ||||
Net earnings before special items(1)(2) | $59 | $23 | $70 | $285 | $891 | ||||
Net earnings per diluted share before special items(1) | $0.08 | $0.03 | $0.10 | $0.39 | $1.18 | ||||
Adjusted EBITDA(1) | $308 | $260 | $346 | $1,276 | $2,032 |
(1) | Net earnings before special items is a non-GAAP measure that management believes provides helpful context in understanding the company's earnings performance. Additionally, 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 and special items. Net earnings before special items and Adjusted EBITDA should not be considered in isolation from, and are not intended to represent an alternative to, our GAAP results. Reconciliations of Net earnings before special items and Adjusted EBITDA to GAAP earnings are included within this release. |
(2) | Fourth quarter 2019 after-tax special items include an $80 million noncash impairment charge related to the previously announced sale of our Montana timberlands, a $48 million gain on the sale of our Michigan timberlands and a $5 million pension settlement charge related to the transfer of Canadian pension assets and liabilities through purchases of group annuity contracts. Special items for other periods presented are included in the reconciliation tables following this release. |
TIMBERLANDS
FINANCIAL HIGHLIGHTS | 2019 | 2019 | |||
(millions) | Q3 | Q4 | Change | ||
Net sales | $523 | $510 | ($13) | ||
Net contribution to pretax earnings | $72 | $53 | ($19) | ||
Pretax charge for special items | $— | $32 | $32 | ||
Net contribution to pretax earnings before special items | $72 | $85 | $13 | ||
Adjusted EBITDA | $154 | $158 | $4 |
Q4 2019 Performance – In the West, average sales realizations for domestic and Japan export logs were modestly higher and fee harvest volumes increased slightly. Western road and forestry spending was seasonally lower. In the South, average log sales realizations declined slightly and fee harvest volumes were lower.
Fourth quarter special items include a $48 million gain on the sale of the company's Michigan timberlands, which closed in November, and an $80 million noncash impairment charge related to the previously announced sale of our Montana timberlands. The Montana transaction is subject to customary closing conditions and is expected to be completed in the second quarter.
Q1 2020 Outlook – Weyerhaeuser expects first quarter earnings and Adjusted EBITDA will be slightly higher than the fourth quarter. In the West, the company anticipates higher domestic and export log sales volumes, modestly higher average domestic log sales realizations and lower road spending. In the South, the company expects seasonally lower fee harvest volumes and average log sales realizations comparable with the fourth quarter average.
REAL ESTATE, ENERGY & NATURAL RESOURCES
FINANCIAL HIGHLIGHTS | 2019 | 2019 | |||
(millions) | Q3 | Q4 | Change | ||
Net sales | $69 | $46 | ($23) | ||
Net contribution to pretax earnings | $32 | $22 | ($10) | ||
Adjusted EBITDA | $60 | $37 | ($23) |
Q4 2019 Performance – Earnings and Adjusted EBITDA decreased due to fewer real estate sales and lower construction materials and energy royalties in our Energy & Natural Resources business. The segment reported full year Adjusted EBITDA of $274 million.
Q1 2020 Outlook – Weyerhaeuser anticipates first quarter earnings and Adjusted EBITDA will be significantly higher than the fourth quarter due to the timing of Real Estate transactions. The company expects full year 2020 Adjusted EBITDA for the segment will be approximately $255 million. This guidance incorporates the effect of fewer available real estate acres following the divestitures of our Montana and Michigan timberlands.
WOOD PRODUCTS
FINANCIAL HIGHLIGHTS | 2019 | 2019 | |||
(millions) | Q3 | Q4 | Change | ||
Net sales | $1,204 | $1,115 | ($89) | ||
Net contribution to pretax earnings | $143 | $60 | ($83) | ||
Pretax benefit for special items | ($68) | $— | $68 | ||
Net contribution to pretax earnings before special items | $75 | $60 | ($15) | ||
Adjusted EBITDA | $123 | $110 | ($13) |
Q4 2019 Performance – Sales volumes declined seasonally and Western and Canadian log costs increased compared with the third quarter. Per unit manufacturing costs improved due to strong operating performance and ongoing operational excellence initiatives.
Average sales realizations for oriented strand board improved slightly. In lumber, although the benchmark Framing Lumber Composite price improved modestly in the fourth quarter, published average pricing for wide-width Southern yellow pine lumber decreased. Weyerhaeuser's average lumber sales realizations were comparable with the third quarter average, reflecting the company's regional and product mix.
Q1 2020 Outlook – Weyerhaeuser anticipates first quarter earnings and Adjusted EBITDA will be slightly higher than the fourth quarter, before any improvement in average sales realizations. The company expects seasonally improved operating rates and manufacturing costs for engineered wood products and slightly higher sales volumes for lumber and oriented strand board.
UNALLOCATED
FINANCIAL HIGHLIGHTS | 2019 | 2019 | |||
(millions) | Q3 | Q4 | Change | ||
Net charge to pretax earnings | ($54) | ($59) | ($5) | ||
Pretax charge for special items | $15 | $6 | ($9) | ||
Net charge to pretax earnings before special items | ($39) | ($53) | ($14) | ||
Adjusted EBITDA | ($29) | ($45) | ($16) |
Q4 2019 Performance – Unallocated corporate function and variable compensation expense increased due to seasonally higher spending and a year-to-date adjustment for incentive compensation. Fourth quarter results also include a small expense from elimination of intersegment profit in inventory and LIFO compared with income from this item in the third quarter.
Fourth quarter pretax special items consist of a $6 million noncash non-operating settlement charge related to the transfer of Canadian pension assets and liabilities through purchases of group annuity contracts.
ABOUT WEYERHAEUSER
Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control approximately 11 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 in America. Our company is a real estate investment trust. In 2019, we generated $6.6 billion in net sales and employed approximately 9,400 people who serve customers worldwide. We are listed on the Dow Jones Sustainability North America Index. 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 January 31, 2020 to discuss fourth quarter results.
To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on January 31, 2020.
To join the conference call from within North America, dial 855-223-0757 (access code: 2195447) at least 15 minutes prior to the call. Those calling from outside North America should dial 574-990-1206 (access code: 2195447). Replays will be available for two weeks at 855-859-2056 (access code: 2195447) from within North America and at 404-537-3406 (access code: 2195447) 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 with respect to the following: our earnings, earnings before special items, Adjusted EBITDA; average log sale realizations; log sale volumes; and fee harvest volumes in our timber business; sales volumes as well as manufacturing operating costs and operating rates for Wood Products. 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 Japanese yen, the Chinese yuan and the Canadian dollar, and the relative value of the euro to the yen;
- restrictions on international trade and tariffs imposed on imports or exports;
- 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;
- raw material availability and prices;
- the effect of weather;
- changes in global or regional climate conditions and governmental response to such changes;
- the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;
- energy prices;
- our operational excellence initiatives;
- the successful and timely execution and integration of our strategic acquisitions, including our ability to realize expected benefits and synergies, and the successful and timely execution of our strategic divestitures, each of which is subject to a number of risks and conditions beyond our control including, but not limited to, timing and required regulatory approvals;
- transportation and labor availability and costs;
- federal tax policies;
- the effect of forestry, land use, environmental and other governmental regulations;
- legal proceedings;
- performance of pension fund investments and related derivatives;
- the effect of timing of retirements and changes in the market price of our common stock on charges for share-based compensation;
- the accuracy of our estimates of costs and expenses related to contingent liabilities;
- changes in accounting principles; and
- other matters described under "Risk Factors" in our annual reports 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, 919-861-0342
RECONCILIATION OF ADJUSTED EBITDA TO NET EARNINGS (LOSS)
We reconcile Adjusted EBITDA to net earnings (loss) for the consolidated company and to operating income (loss) 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 year ended December 31, 2019:
(millions) | Timberlands | Real Estate & ENR | Wood Products | Unallocated Items | Total | |||||||||||||
Adjusted EBITDA by Segment: | ||||||||||||||||||
Net earnings (loss) | $ | (76) | ||||||||||||||||
Interest expense, net of capitalized interest(1) | 378 | |||||||||||||||||
Income taxes | (137) | |||||||||||||||||
Net contribution (charge) to earnings | $ | 347 | $ | 144 | $ | 353 | $ | (679) | $ | 165 | ||||||||
Non-operating pension and other postretirement benefit costs(2) | — | — | — | 516 | 516 | |||||||||||||
Interest income and other | — | — | — | (30) | (30) | |||||||||||||
Operating income (loss) | 347 | 144 | 353 | (193) | 651 | |||||||||||||
Depreciation, depletion and amortization | 301 | 14 | 191 | 4 | 510 | |||||||||||||
Basis of real estate sold | — | 116 | — | — | 116 | |||||||||||||
Special items included in operating income (loss)(3)(4)(5) | 32 | — | (68) | 35 | (1) | |||||||||||||
Adjusted EBITDA | $ | 680 | $ | 274 | $ | 476 | $ | (154) | $ | 1,276 | ||||||||
(1) | Interest expense, net of capitalized interest includes a pretax special item consisting of a $12 million charge related to the early extinguishment of debt. |
(2) | Non-operating pension and other postretirement benefit costs includes pretax special items consisting of $455 million of noncash settlement charges related to transfers of pension plan assets and liabilities to an insurance company through the purchase of group annuity contracts. |
(3) | Operating income (loss) for Timberlands includes pretax special items consisting of an $80 million noncash impairment charge related to the previously announced sale of our Montana timberlands and a $48 million gain on sale of our Michigan timberlands. |
(4) | Operating income (loss) for Wood Products includes a pretax special item consisting of a $68 million product remediation insurance recovery. |
(5) | Operating income (loss) for Unallocated Items includes pretax special items consisting of $35 million of legal charges. |
The table below reconciles Adjusted EBITDA for the year ended December 31, 2018:
(millions) | Timberlands | Real Estate & ENR | Wood Products | Unallocated Items | Total | |||||||||||||
Adjusted EBITDA by Segment: | ||||||||||||||||||
Net earnings | $ | 748 | ||||||||||||||||
Interest expense, net of capitalized interest | 375 | |||||||||||||||||
Income taxes(1) | 59 | |||||||||||||||||
Net contribution (charge) to earnings | $ | 583 | $ | 127 | $ | 838 | $ | (366) | $ | 1,182 | ||||||||
Non-operating pension and other postretirement benefit costs(2) | — | — | — | 272 | 272 | |||||||||||||
Interest income and other(3) | — | (1) | — | (59) | (60) | |||||||||||||
Operating income (loss) | 583 | 126 | 838 | (153) | 1,394 | |||||||||||||
Depreciation, depletion and amortization | 319 | 14 | 149 | 4 | 486 | |||||||||||||
Basis of real estate sold | — | 124 | — | — | 124 | |||||||||||||
Special items included in operating income (loss)(4) | — | — | — | 28 | 28 | |||||||||||||
Adjusted EBITDA | $ | 902 | $ | 264 | $ | 987 | $ | (121) | $ | 2,032 | ||||||||
(1) | Income taxes include special items consisting of a $41 million tax benefit related to our pension contribution and a $21 million tax adjustment charge. |
(2) | Non-operating pension and other postretirement benefit costs include a pretax special item consisting of a $200 million noncash settlement charge related to our U.S. qualified pension plan lump sum offer. |
(3) | Interest income and other includes a pretax special item consisting of a $13 million gain on sale of a nonstrategic asset. |
(4) | Operating income (loss) includes a pretax special item consisting of $28 million of environmental remediation expense. |
The table below reconciles Adjusted EBITDA for the quarter ended December 31, 2019:
(millions) | Timberlands | Real Estate & ENR | Wood Products | Unallocated Items | Total | |||||||||||||
Adjusted EBITDA by Segment: | ||||||||||||||||||
Net earnings (loss) | $ | (14) | ||||||||||||||||
Interest expense, net of capitalized interest | 89 | |||||||||||||||||
Income taxes | 1 | |||||||||||||||||
Net contribution (charge) to earnings | $ | 53 | $ | 22 | $ | 60 | $ | (59) | $ | 76 | ||||||||
Non-operating pension and other postretirement benefit costs(1) | — | — | — | 21 | 21 | |||||||||||||
Interest income and other | — | — | — | (8) | (8) | |||||||||||||
Operating income (loss) | 53 | 22 | 60 | (46) | 89 | |||||||||||||
Depreciation, depletion and amortization | 73 | 4 | 50 | 1 | 128 | |||||||||||||
Basis of real estate sold | — | 11 | — | — | 11 | |||||||||||||
Special items included in operating income (loss)(2) | 32 | — | — | — | 32 | |||||||||||||
Adjusted EBITDA | $ | 158 | $ | 37 | $ | 110 | $ | (45) | $ | 260 | ||||||||
(1) | Non-operating pension and other postretirement benefit costs include a pretax special item consisting of a $6 million noncash settlement charge related to the transfer of Canadian pension assets and liabilities through purchases of group annuity contracts. |
(2) | Operating income (loss) for Timberlands includes pretax special items consisting of an $80 million noncash impairment charge related to the previously announced sale of our Montana timberlands and a $48 million gain on sale of our Michigan timberlands. |
The table below reconciles Adjusted EBITDA for the quarter ended September 30, 2019:
(millions) | Timberlands | Real Estate & ENR | Wood Products | Unallocated Items | Total | |||||||||||||
Adjusted EBITDA by Segment: | ||||||||||||||||||
Net earnings | $ | 99 | ||||||||||||||||
Interest expense, net of capitalized interest | 91 | |||||||||||||||||
Income taxes | 3 | |||||||||||||||||
Net contribution (charge) to earnings | $ | 72 | $ | 32 | $ | 143 | $ | (54) | $ | 193 | ||||||||
Non-operating pension and other postretirement benefit costs | — | — | — | 15 | 15 | |||||||||||||
Interest income and other | — | — | — | (6) | (6) | |||||||||||||
Operating income (loss) | 72 | 32 | 143 | (45) | 202 | |||||||||||||
Depreciation, depletion and amortization | 82 | 4 | 48 | 1 | 135 | |||||||||||||
Basis of real estate sold | — | 24 | — | — | 24 | |||||||||||||
Special items included in operating income (loss)(1) | — | — | (68) | 15 | (53) | |||||||||||||
Adjusted EBITDA | $ | 154 | $ | 60 | $ | 123 | $ | (29) | $ | 308 | ||||||||
(1) | Operating income (loss) includes pretax special items consisting of a $68 million product remediation insurance recovery and a $15 million legal charge. |
The table below reconciles Adjusted EBITDA for the quarter ended December 31, 2018:
(millions) | Timberlands | Real Estate & ENR | Wood Products | Unallocated Items | Total | |||||||||||||
Adjusted EBITDA by Segment: | ||||||||||||||||||
Net earnings (loss) | $ | (93) | ||||||||||||||||
Interest expense, net of capitalized interest | 97 | |||||||||||||||||
Income taxes(1) | (21) | |||||||||||||||||
Net contribution (charge) to earnings | $ | 107 | $ | 44 | $ | 26 | $ | (194) | $ | (17) | ||||||||
Non-operating pension and other postretirement benefit costs(2) | — | — | — | 218 | 218 | |||||||||||||
Interest income and other(3) | — | (1) | — | (23) | (24) | |||||||||||||
Operating income | 107 | 43 | 26 | 1 | 177 | |||||||||||||
Depreciation, depletion and amortization | 81 | 3 | 40 | 1 | 125 | |||||||||||||
Basis of real estate sold | — | 44 | — | — | 44 | |||||||||||||
Adjusted EBITDA | $ | 188 | $ | 90 | $ | 66 | $ | 2 | $ | 346 | ||||||||
(1) | Income taxes include a special item consisting of a $21 million tax adjustment charge. |
(2) | Non-operating pension and other postretirement benefit costs include a pretax special item consisting of a $200 million noncash settlement charge related to our U.S. qualified pension plan lump sum offer. |
(3) | Interest income and other includes a pretax special item consisting of a $13 million gain on sale of a nonstrategic asset. |
RECONCILIATION OF NET EARNINGS BEFORE SPECIAL ITEMS TO NET EARNINGS (LOSS)
We reconcile net earnings before special items to net earnings and net earnings per diluted share before special items to net earnings per diluted share, as those are the most directly comparable U.S. GAAP measures. We believe the measures provide meaningful supplemental information for investors about our operating performance, better facilitate period to period comparisons, and are widely used by analysts, lenders, rating agencies and other interested parties.
The table below reconciles net earnings before special items to net earnings (loss):
2019 | 2019 | 2018 | 2019 | 2018 | |||||
(millions) | Q3 | Q4 | Q4 | Full Year | Full Year | ||||
Net earnings (loss) | $99 | $(14) | $(93) | $(76) | $748 | ||||
Early extinguishment of debt charge | — | — | — | 9 | — | ||||
Environmental remediation charge | — | — | — | — | 21 | ||||
Gain on sale of timberlands and other nonstrategic assets | — | (48) | (10) | (48) | (10) | ||||
Legal charges | 11 | — | — | 26 | — | ||||
Pension settlement charges | — | 5 | 152 | 345 | 152 | ||||
Product remediation recoveries, net | (51) | — | — | (51) | — | ||||
Restructuring, impairments and other charges | — | 80 | — | 80 | — | ||||
Tax adjustments | — | — | 21 | — | (20) | ||||
Net earnings before special items | $59 | $23 | $70 | $285 | $891 |
The table below reconciles net earnings per diluted share before special items to net earnings (loss) per diluted share:
2019 | 2019 | 2018 | 2019 | 2018 | |||||
Q3 | Q4 | Q4 | Full Year | Full Year | |||||
Net earnings (loss) per diluted share | $0.13 | $(0.02) | $(0.12) | $(0.10) | $0.99 | ||||
Early extinguishment of debt charge | — | — | — | 0.01 | — | ||||
Environmental remediation charge | — | — | — | — | 0.03 | ||||
Gain on sale of timberlands and other nonstrategic assets | — | (0.07) | (0.01) | (0.07) | (0.01) | ||||
Legal charges | 0.02 | — | — | 0.04 | — | ||||
Pension settlement charges | — | 0.01 | 0.20 | 0.47 | 0.20 | ||||
Product remediation recoveries, net | (0.07) | — | — | (0.07) | — | ||||
Restructuring, impairments and other charges | — | 0.11 | — | 0.11 | — | ||||
Tax adjustments | — | — | 0.03 | — | (0.03) | ||||
Net earnings per diluted share before special items | $0.08 | $0.03 | $0.10 | $0.39 | $1.18 |
Weyerhaeuser Company | Exhibit 99.2 | |||||||||||||||||||||||||||
Q4.2019 Analyst Package | ||||||||||||||||||||||||||||
Preliminary results (unaudited) | ||||||||||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Year-to-Date | ||||||||||||||||||||||||
in millions | Mar 31, 2019 | Jun 30, 2019 | Sept 30, 2019 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2019 | Dec 31, 2018 | |||||||||||||||||||||
Net sales | $ | 1,643 | $ | 1,692 | $ | 1,671 | $ | 1,548 | $ | 1,636 | $ | 6,554 | $ | 7,476 | ||||||||||||||
Costs of sales | 1,322 | 1,390 | 1,399 | 1,301 | 1,345 | 5,412 | 5,592 | |||||||||||||||||||||
Gross margin | 321 | 302 | 272 | 247 | 291 | 1,142 | 1,884 | |||||||||||||||||||||
Selling expenses | 21 | 21 | 20 | 22 | 22 | 84 | 88 | |||||||||||||||||||||
General and administrative expenses | 89 | 80 | 85 | 94 | 82 | 348 | 318 | |||||||||||||||||||||
Charges for integration and restructuring, closures and asset impairments | — | — | — | 80 | — | 80 | 2 | |||||||||||||||||||||
Product remediation recoveries, net | — | — | (68) | — | — | (68) | — | |||||||||||||||||||||
Other operating costs (income), net | 37 | 15 | 33 | (38) | 10 | 47 | 82 | |||||||||||||||||||||
Operating income | 174 | 186 | 202 | 89 | 177 | 651 | 1,394 | |||||||||||||||||||||
Non-operating pension and other postretirement benefit costs | (470) | (10) | (15) | (21) | (218) | (516) | (272) | |||||||||||||||||||||
Interest income and other | 10 | 6 | 6 | 8 | 24 | 30 | 60 | |||||||||||||||||||||
Interest expense, net of capitalized interest | (107) | (91) | (91) | (89) | (97) | (378) | (375) | |||||||||||||||||||||
Earnings (loss) before income taxes | (393) | 91 | 102 | (13) | (114) | (213) | 807 | |||||||||||||||||||||
Income taxes | 104 | 37 | (3) | (1) | 21 | 137 | (59) | |||||||||||||||||||||
Net earnings (loss) | $ | (289) | $ | 128 | $ | 99 | $ | (14) | $ | (93) | $ | (76) | $ | 748 | ||||||||||||||
Per Share Information | ||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Year-to-Date | ||||||||||||||||||||||||
Mar 31, 2019 | Jun 30, 2019 | Sept 30, 2019 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2019 | Dec 31, 2018 | ||||||||||||||||||||||
Earnings (loss) per share, basic and diluted | $ | (0.39) | $ | 0.17 | $ | 0.13 | $ | (0.02) | $ | (0.12) | $ | (0.10) | $ | 0.99 | ||||||||||||||
Dividends paid per common share | $ | 0.34 | $ | 0.34 | $ | 0.34 | $ | 0.34 | $ | 0.34 | $ | 1.36 | $ | 1.32 | ||||||||||||||
Weighted average shares outstanding (in thousands): | ||||||||||||||||||||||||||||
Basic | 746,603 | 745,486 | 745,626 | 745,886 | 748,694 | 745,897 | 754,556 | |||||||||||||||||||||
Diluted | 746,603 | 746,232 | 746,514 | 745,886 | 750,025 | 745,897 | 756,827 | |||||||||||||||||||||
Common shares outstanding at end of period (in thousands) | 744,767 | 744,905 | 745,071 | 745,300 | 746,391 | 745,300 | 746,391 | |||||||||||||||||||||
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization (Adjusted EBITDA) | ||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Year-to-Date | ||||||||||||||||||||||||
in millions | Mar 31, 2019 | Jun 30, 2019 | Sept 30, 2019 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2019 | Dec 31, 2018 | |||||||||||||||||||||
Net earnings (loss) | $ | (289) | $ | 128 | $ | 99 | $ | (14) | $ | (93) | $ | (76) | $ | 748 | ||||||||||||||
Non-operating pension and other postretirement benefit costs | 470 | 10 | 15 | 21 | 218 | 516 | 272 | |||||||||||||||||||||
Interest income and other | (10) | (6) | (6) | (8) | (24) | (30) | (60) | |||||||||||||||||||||
Interest expense, net of capitalized interest | 107 | 91 | 91 | 89 | 97 | 378 | 375 | |||||||||||||||||||||
Income taxes | (104) | (37) | 3 | 1 | (21) | (137) | 59 | |||||||||||||||||||||
Operating income | 174 | 186 | 202 | 89 | 177 | 651 | 1,394 | |||||||||||||||||||||
Depreciation, depletion and amortization | 123 | 124 | 135 | 128 | 125 | 510 | 486 | |||||||||||||||||||||
Basis of real estate sold | 48 | 33 | 24 | 11 | 44 | 116 | 124 | |||||||||||||||||||||
Special items included in operating income | 20 | — | (53) | 32 | — | (1) | 28 | |||||||||||||||||||||
Adjusted EBITDA(1) | $ | 365 | $ | 343 | $ | 308 | $ | 260 | $ | 346 | $ | 1,276 | $ | 2,032 | ||||||||||||||
(1) | 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, and special items. 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 | |||||||||||||||||||||||||||||
Q4.2019 Analyst Package | ||||||||||||||||||||||||||||||
Preliminary results (unaudited) | ||||||||||||||||||||||||||||||
Special Items Included in Net Earnings (Income Tax Affected) | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Year-to-Date | ||||||||||||||||||||||||||
in millions | Mar 31, 2019 | Jun 30, 2019 | Sept 30, 2019 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2019 | Dec 31, 2018 | |||||||||||||||||||||||
Net earnings (loss) | $ | (289) | $ | 128 | $ | 99 | $ | (14) | $ | (93) | $ | (76) | $ | 748 | ||||||||||||||||
Early extinguishment of debt charge(1) | 9 | — | — | — | — | 9 | — | |||||||||||||||||||||||
Environmental remediation charge | — | — | — | — | — | — | 21 | |||||||||||||||||||||||
Gain on sale of timberlands and other nonstrategic assets | — | — | — | (48) | (10) | (48) | (10) | |||||||||||||||||||||||
Legal charges | 15 | — | 11 | — | — | 26 | — | |||||||||||||||||||||||
Pension settlement charges | 345 | (5) | — | 5 | 152 | 345 | 152 | |||||||||||||||||||||||
Product remediation recoveries, net | — | — | (51) | — | — | (51) | — | |||||||||||||||||||||||
Restructuring, impairments and other charges | — | — | — | 80 | — | 80 | — | |||||||||||||||||||||||
Tax adjustments | — | — | — | — | 21 | — | (20) | |||||||||||||||||||||||
Net earnings before special items(2) | $ | 80 | $ | 123 | $ | 59 | $ | 23 | $ | 70 | $ | 285 | $ | 891 | ||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Year-to-Date | ||||||||||||||||||||||||||
Mar 31, 2019 | Jun 30, 2019 | Sept 30, 2019 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2019 | Dec 31, 2018 | ||||||||||||||||||||||||
Net earnings (loss) per diluted share | $ | (0.39) | $ | 0.17 | $ | 0.13 | $ | (0.02) | $ | (0.12) | $ | (0.10) | $ | 0.99 | ||||||||||||||||
Early extinguishment of debt charge(1) | 0.01 | — | — | — | — | 0.01 | — | |||||||||||||||||||||||
Environmental remediation charge | — | — | — | — | — | — | 0.03 | |||||||||||||||||||||||
Gain on sale of timberlands and other nonstrategic assets | — | — | — | (0.07) | (0.01) | (0.07) | (0.01) | |||||||||||||||||||||||
Legal charges | 0.02 | — | 0.02 | — | — | 0.04 | — | |||||||||||||||||||||||
Pension settlement charges | 0.47 | (0.01) | — | 0.01 | 0.20 | 0.47 | 0.20 | |||||||||||||||||||||||
Product remediation recoveries, net | — | — | (0.07) | — | — | (0.07) | — | |||||||||||||||||||||||
Restructuring, impairments and other charges | — | — | — | 0.11 | — | 0.11 | — | |||||||||||||||||||||||
Tax adjustments | — | — | — | — | 0.03 | — | (0.03) | |||||||||||||||||||||||
Net earnings per diluted share before special items(2) | $ | 0.11 | $ | 0.16 | $ | 0.08 | $ | 0.03 | $ | 0.10 | $ | 0.39 | $ | 1.18 | ||||||||||||||||
(1) | During first quarter 2019, we recorded a $12 million pretax ($9 million after-tax) charge related to the early extinguishment of debt. This charge is included in Interest expense, net of capitalized interest in the Consolidated Statement of Operations. |
(2) | Net earnings before special items is a non-GAAP measure that management believes provides helpful context in understanding the company's earnings performance. Net earnings before special items should not be considered in isolation from, and is not intended to represent an alternative to, our GAAP results. |
Selected Total Company Items | |||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Year-to-Date | |||||||||||||||||||||||||||
in millions | Mar 31, 2019 | Jun 30, 2019 | Sept 30, 2019 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2019 | Dec 31, 2018 | ||||||||||||||||||||||||
Pension and postretirement costs: | |||||||||||||||||||||||||||||||
Pension and postretirement service costs | $ | 8 | $ | 8 | $ | 8 | $ | 8 | $ | 9 | $ | 32 | $ | 37 | |||||||||||||||||
Non-operating pension and other postretirement benefit costs | 470 | 10 | 15 | 21 | 218 | 516 | 272 | ||||||||||||||||||||||||
Total company pension and postretirement costs | $ | 478 | $ | 18 | $ | 23 | $ | 29 | $ | 227 | $ | 548 | $ | 309 | |||||||||||||||||
Weyerhaeuser Company | ||||||||||||||||||||
Q4.2019 Analyst Package | ||||||||||||||||||||
Preliminary results (unaudited) | ||||||||||||||||||||
Consolidated Balance Sheet | ||||||||||||||||||||
in millions | March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | December 31, 2018 | |||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 259 | $ | 212 | $ | 153 | $ | 139 | $ | 334 | ||||||||||
Receivables, less discounts and allowances | 398 | 408 | 368 | 309 | 337 | |||||||||||||||
Receivables for taxes | 163 | 157 | 149 | 98 | 137 | |||||||||||||||
Inventories | 451 | 425 | 393 | 416 | 389 | |||||||||||||||
Assets held for sale | — | — | 251 | 140 | — | |||||||||||||||
Prepaid expenses and other current assets | 141 | 132 | 141 | 147 | 152 | |||||||||||||||
Current restricted financial investments held by variable interest entities | 362 | 362 | 362 | 362 | 253 | |||||||||||||||
Total current assets | 1,774 | 1,696 | 1,817 | 1,611 | 1,602 | |||||||||||||||
Property and equipment, net | 1,917 | 1,901 | 1,860 | 1,969 | 1,857 | |||||||||||||||
Construction in progress | 102 | 134 | 187 | 130 | 136 | |||||||||||||||
Timber and timberlands at cost, less depletion | 12,586 | 12,516 | 12,192 | 11,929 | 12,671 | |||||||||||||||
Minerals and mineral rights, less depletion | 291 | 288 | 284 | 281 | 294 | |||||||||||||||
Deferred tax assets | 18 | 33 | 31 | 72 | 15 | |||||||||||||||
Other assets | 444 | 461 | 461 | 414 | 312 | |||||||||||||||
Restricted financial investments held by variable interest entities | — | — | — | — | 362 | |||||||||||||||
Total assets | $ | 17,132 | $ | 17,029 | $ | 16,832 | $ | 16,406 | $ | 17,249 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Current maturities of long-term debt | $ | — | $ | — | $ | — | $ | — | $ | 500 | ||||||||||
Current debt (nonrecourse to the company) held by variable interest entities | 302 | 302 | — | — | 302 | |||||||||||||||
Borrowings on line of credit | 245 | 140 | 440 | 230 | 425 | |||||||||||||||
Accounts payable | 243 | 271 | 242 | 246 | 222 | |||||||||||||||
Accrued liabilities | 411 | 510 | 487 | 530 | 490 | |||||||||||||||
Total current liabilities | 1,201 | 1,223 | 1,169 | 1,006 | 1,939 | |||||||||||||||
Long-term debt, net | 6,156 | 6,153 | 6,150 | 6,147 | 5,419 | |||||||||||||||
Deferred tax liabilities | 34 | 17 | 25 | 6 | 43 | |||||||||||||||
Deferred pension and other postretirement benefits | 542 | 515 | 506 | 693 | 527 | |||||||||||||||
Other liabilities | 398 | 397 | 383 | 377 | 275 | |||||||||||||||
Total liabilities | 8,331 | 8,305 | 8,233 | 8,229 | 8,203 | |||||||||||||||
Total equity | 8,801 | 8,724 | 8,599 | 8,177 | 9,046 | |||||||||||||||
Total liabilities and equity | $ | 17,132 | $ | 17,029 | $ | 16,832 | $ | 16,406 | $ | 17,249 | ||||||||||
Weyerhaeuser Company | |||||||||||||||||||||||||||
Q4.2019 Analyst Package | |||||||||||||||||||||||||||
Preliminary results (unaudited) | |||||||||||||||||||||||||||
Consolidated Statement of Cash Flows | |||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Year-to-Date | |||||||||||||||||||||||
in millions | Mar 31, 2019 | Jun 30, 2019 | Sept 30, 2019 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2019 | Dec 31, 2018 | ||||||||||||||||||||
Cash flows from operations: | |||||||||||||||||||||||||||
Net earnings (loss) | $ | (289) | $ | 128 | $ | 99 | $ | (14) | $ | (93) | $ | (76) | $ | 748 | |||||||||||||
Noncash charges (credits) to earnings (loss): | |||||||||||||||||||||||||||
Depreciation, depletion and amortization | 123 | 124 | 135 | 128 | 125 | 510 | 486 | ||||||||||||||||||||
Basis of real estate sold | 48 | 33 | 24 | 11 | 44 | 116 | 124 | ||||||||||||||||||||
Deferred income taxes, net | (123) | (43) | 2 | (5) | (39) | (169) | 72 | ||||||||||||||||||||
Pension and other postretirement benefits | 478 | 18 | 23 | 29 | 227 | 548 | 309 | ||||||||||||||||||||
Share-based compensation expense | 9 | 7 | 7 | 7 | 11 | 30 | 42 | ||||||||||||||||||||
Charges for impairment of assets | — | — | — | 80 | — | 80 | 1 | ||||||||||||||||||||
Net gains on sale of nonstrategic timberlands | — | — | — | (48) | — | (48) | — | ||||||||||||||||||||
Change in: | |||||||||||||||||||||||||||
Receivables, less allowances | (77) | (10) | 40 | 60 | 117 | 13 | 62 | ||||||||||||||||||||
Receivables and payables for taxes | (31) | 6 | 7 | 51 | 6 | 33 | (103) | ||||||||||||||||||||
Inventories | (60) | 28 | 30 | (21) | (5) | (23) | (14) | ||||||||||||||||||||
Prepaid expenses and other current assets | (5) | 8 | 2 | 1 | (11) | 6 | (18) | ||||||||||||||||||||
Accounts payable and accrued liabilities | (82) | 127 | (58) | 50 | (21) | 37 | (154) | ||||||||||||||||||||
Pension and postretirement benefit contributions and payments | (14) | (13) | (9) | (9) | (26) | (45) | (381) | ||||||||||||||||||||
Other | 9 | (17) | (10) | (28) | (43) | (46) | (62) | ||||||||||||||||||||
Net cash from operations | $ | (14) | $ | 396 | $ | 292 | $ | 292 | $ | 292 | $ | 966 | $ | 1,112 | |||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||||||
Capital expenditures for property and equipment | $ | (41) | $ | (71) | $ | (87) | $ | (128) | $ | (130) | $ | (327) | $ | (368) | |||||||||||||
Capital expenditures for timberlands reforestation | (18) | (13) | (11) | (15) | (14) | (57) | (59) | ||||||||||||||||||||
Proceeds from note receivable held by variable interest entities | 253 | — | — | — | — | 253 | — | ||||||||||||||||||||
Proceeds from sale of Michigan timberlands | — | — | — | 297 | — | 297 | — | ||||||||||||||||||||
Other | 18 | 1 | 1 | 1 | (32) | 21 | (13) | ||||||||||||||||||||
Net cash from investing activities | $ | 212 | $ | (83) | $ | (97) | $ | 155 | $ | (176) | $ | 187 | $ | (440) | |||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||||||
Cash dividends on common shares | $ | (254) | $ | (253) | $ | (253) | $ | (253) | $ | (254) | $ | (1,013) | $ | (995) | |||||||||||||
Net proceeds from issuance of long-term debt | 739 | — | — | — | — | 739 | — | ||||||||||||||||||||
Payments of long-term debt | (512) | — | — | — | — | (512) | (62) | ||||||||||||||||||||
Proceeds from borrowings on line of credit | 245 | 140 | 490 | 220 | 425 | 1,095 | 425 | ||||||||||||||||||||
Payments on line of credit | (425) | (245) | (190) | (430) | — | (1,290) | — | ||||||||||||||||||||
Payments on debt held by variable interest entities | — | — | (302) | — | (209) | (302) | (209) | ||||||||||||||||||||
Proceeds from exercise of stock options | 2 | 2 | 4 | 5 | — | 13 | 52 | ||||||||||||||||||||
Repurchases of common shares | (60) | — | — | — | (93) | (60) | (366) | ||||||||||||||||||||
Other | (8) | (4) | (3) | (3) | 1 | (18) | (7) | ||||||||||||||||||||
Net cash from financing activities | $ | (273) | $ | (360) | $ | (254) | $ | (461) | $ | (130) | $ | (1,348) | $ | (1,162) | |||||||||||||
Net change in cash and cash equivalents | $ | (75) | $ | (47) | $ | (59) | $ | (14) | $ | (14) | $ | (195) | $ | (490) | |||||||||||||
Cash and cash equivalents at beginning of period | 334 | 259 | 212 | 153 | 348 | 334 | 824 | ||||||||||||||||||||
Cash and cash equivalents at end of period | $ | 259 | $ | 212 | $ | 153 | $ | 139 | $ | 334 | $ | 139 | $ | 334 | |||||||||||||
Cash paid (received) during the period for: | |||||||||||||||||||||||||||
Interest, net of amounts capitalized | $ | 127 | $ | 59 | $ | 124 | $ | 60 | $ | 73 | $ | 370 | $ | 358 | |||||||||||||
Income taxes, net of refunds | $ | 50 | $ | 1 | $ | (5) | $ | (48) | $ | 15 | $ | (2) | $ | 95 | |||||||||||||
Weyerhaeuser Company | Timberlands Segment | |||||||||||||||||||||||||||
Q4.2019 Analyst Package | ||||||||||||||||||||||||||||
Preliminary results (unaudited) | ||||||||||||||||||||||||||||
Segment Statement of Operations (1) | ||||||||||||||||||||||||||||
in millions | Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | |||||||||||||||||||||
Sales to unaffiliated customers | $ | 431 | $ | 401 | $ | 398 | $ | 388 | $ | 448 | $ | 1,618 | $ | 1,873 | ||||||||||||||
Intersegment sales | 125 | 131 | 125 | 122 | 128 | 503 | 537 | |||||||||||||||||||||
Total net sales | 556 | 532 | 523 | 510 | 576 | 2,121 | 2,410 | |||||||||||||||||||||
Costs of sales | 413 | 405 | 429 | 402 | 446 | 1,649 | 1,735 | |||||||||||||||||||||
Gross margin | 143 | 127 | 94 | 108 | 130 | 472 | 675 | |||||||||||||||||||||
Selling expenses | 1 | — | — | — | — | 1 | 2 | |||||||||||||||||||||
General and administrative expenses | 22 | 25 | 24 | 23 | 24 | 94 | 93 | |||||||||||||||||||||
Charges for integration and restructuring, closures and asset impairments | — | — | — | 80 | — | 80 | — | |||||||||||||||||||||
Other operating income, net | — | — | (2) | (48) | (1) | (50) | (3) | |||||||||||||||||||||
Operating income and Net contribution to earnings | $ | 120 | $ | 102 | $ | 72 | $ | 53 | $ | 107 | $ | 347 | $ | 583 | ||||||||||||||
(1) | In January 2019, we changed the way we report our Canadian Forestlands operations, which are primarily operated to supply Weyerhaeuser's Canadian Wood Products manufacturing facilities. As a result, we no longer report related intersegment sales in the Timberlands segment and we now record the minimal associated third-party log sales in the Wood Products segment. These collective transactions did not contribute any earnings to the Timberlands segment. We have conformed prior year presentations with the current year. |
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(2) | ||||||||||||||||||||||||||||
in millions | Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | |||||||||||||||||||||
Operating income | $ | 120 | $ | 102 | $ | 72 | $ | 53 | $ | 107 | $ | 347 | $ | 583 | ||||||||||||||
Depreciation, depletion and amortization | 73 | 73 | 82 | 73 | 81 | 301 | 319 | |||||||||||||||||||||
Special items | — | — | — | 32 | — | 32 | — | |||||||||||||||||||||
Adjusted EBITDA(2) | $ | 193 | $ | 175 | $ | 154 | $ | 158 | $ | 188 | $ | 680 | $ | 902 | ||||||||||||||
(2) | See definition of Adjusted EBITDA (a non-GAAP measure) on page 1. |
Segment Special Items Included in Net Contribution to Earnings (Pretax) | ||||||||||||||||||||||||||||
in millions | Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | |||||||||||||||||||||
Gain on sale of timberlands and other nonstrategic assets | $ | — | $ | — | $ | — | $ | (48) | $ | — | $ | (48) | $ | — | ||||||||||||||
Restructuring, impairments and other charges | — | — | — | 80 | — | 80 | — | |||||||||||||||||||||
Selected Segment Items | ||||||||||||||||||||||||||||
in millions | Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | |||||||||||||||||||||
Total decrease (increase) in working capital(3) | $ | (24) | $ | 46 | $ | 2 | $ | (12) | $ | (7) | $ | 12 | $ | (9) | ||||||||||||||
Cash spent for capital expenditures | $ | (26) | $ | (25) | $ | (28) | $ | (33) | $ | (35) | $ | (112) | $ | (117) | ||||||||||||||
(3) | 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(4) | ||||||||||||||||||||||||||||||
Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | ||||||||||||||||||||||||
Third Party | Delivered logs: | |||||||||||||||||||||||||||||
Net Sales | West | $ | 205 | $ | 194 | $ | 172 | $ | 169 | $ | 221 | $ | 740 | $ | 987 | |||||||||||||||
(millions) | South | 159 | 156 | 168 | 157 | 153 | 640 | 625 | ||||||||||||||||||||||
North | 29 | 17 | 24 | 22 | 29 | 92 | 99 | |||||||||||||||||||||||
Total delivered logs | 393 | 367 | 364 | 348 | 403 | 1,472 | 1,711 | |||||||||||||||||||||||
Stumpage and pay-as-cut timber | 9 | 10 | 10 | 13 | 20 | 42 | 59 | |||||||||||||||||||||||
Recreational and other lease revenue | 15 | 15 | 15 | 16 | 15 | 61 | 59 | |||||||||||||||||||||||
Other revenue | 14 | 9 | 9 | 11 | 10 | 43 | 44 | |||||||||||||||||||||||
Total | $ | 431 | $ | 401 | $ | 398 | $ | 388 | $ | 448 | $ | 1,618 | $ | 1,873 | ||||||||||||||||
Delivered Logs | West | $ | 106.92 | $ | 104.07 | $ | 99.07 | $ | 102.12 | $ | 112.58 | $ | 103.18 | $ | 125.59 | |||||||||||||||
Third Party Sales | South | $ | 35.35 | $ | 35.45 | $ | 35.03 | $ | 34.71 | $ | 34.38 | $ | 35.13 | $ | 34.66 | |||||||||||||||
Realizations (per ton) | North | $ | 59.68 | $ | 62.10 | $ | 57.35 | $ | 56.95 | $ | 57.27 | $ | 58.80 | $ | 60.55 | |||||||||||||||
Delivered Logs | West | 1,920 | 1,864 | 1,729 | 1,660 | 1,958 | 7,173 | 7,858 | ||||||||||||||||||||||
Third Party Sales | South | 4,499 | 4,400 | 4,795 | 4,538 | 4,417 | 18,232 | 18,008 | ||||||||||||||||||||||
Volumes (tons, thousands) | North | 494 | 263 | 429 | 372 | 497 | 1,558 | 1,628 | ||||||||||||||||||||||
Fee Harvest Volumes | West | 2,385 | 2,455 | 2,183 | 2,214 | 2,463 | 9,237 | 9,571 | ||||||||||||||||||||||
(tons, thousands) | South | 6,492 | 6,367 | 6,802 | 6,617 | 6,849 | 26,278 | 26,708 | ||||||||||||||||||||||
North | 627 | 378 | 560 | 477 | 620 | 2,042 | 2,129 | |||||||||||||||||||||||
(4) | Western logs are primarily transacted in MBF but are converted to ton equivalents for external reporting purposes. |
Weyerhaeuser Company | Real Estate, Energy & Natural Resources Segment | |||||||||||||||||||||||||||
Q4.2019 Analyst Package | ||||||||||||||||||||||||||||
Preliminary results (unaudited) | ||||||||||||||||||||||||||||
Segment Statement of Operations | ||||||||||||||||||||||||||||
in millions | Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | |||||||||||||||||||||
Net sales | $ | 118 | $ | 81 | $ | 69 | $ | 46 | $ | 102 | $ | 314 | $ | 307 | ||||||||||||||
Costs of sales | 56 | 39 | 32 | 18 | 52 | 145 | 155 | |||||||||||||||||||||
Gross margin | 62 | 42 | 37 | 28 | 50 | 169 | 152 | |||||||||||||||||||||
General and administrative expenses | 7 | 7 | 6 | 7 | 7 | 27 | 26 | |||||||||||||||||||||
Other operating income, net | — | — | (1) | (1) | — | (2) | — | |||||||||||||||||||||
Operating income | 55 | 35 | 32 | 22 | 43 | 144 | 126 | |||||||||||||||||||||
Interest income and other | — | — | — | — | 1 | — | 1 | |||||||||||||||||||||
Net contribution to earnings | $ | 55 | $ | 35 | $ | 32 | $ | 22 | $ | 44 | $ | 144 | $ | 127 | ||||||||||||||
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(1) | ||||||||||||||||||||||||||||
in millions | Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | |||||||||||||||||||||
Operating income | $ | 55 | $ | 35 | $ | 32 | $ | 22 | $ | 43 | $ | 144 | $ | 126 | ||||||||||||||
Depreciation, depletion and amortization | 3 | 3 | 4 | 4 | 3 | 14 | 14 | |||||||||||||||||||||
Basis of real estate sold | 48 | 33 | 24 | 11 | 44 | 116 | 124 | |||||||||||||||||||||
Adjusted EBITDA(1) | $ | 106 | $ | 71 | $ | 60 | $ | 37 | $ | 90 | $ | 274 | $ | 264 | ||||||||||||||
(1) | See definition of Adjusted EBITDA (a non-GAAP measure) on page 1. |
Selected Segment Items | |||||||||||||||||||||||||||||
in millions | Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | ||||||||||||||||||||||
Cash spent for capital expenditures | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
Segment Statistics | |||||||||||||||||||||||||||||
Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | |||||||||||||||||||||||
Net Sales | Real Estate | $ | 96 | $ | 59 | $ | 45 | $ | 25 | $ | 81 | $ | 225 | $ | 229 | ||||||||||||||
(millions) | Energy and Natural Resources | 22 | 22 | 24 | 21 | 21 | 89 | 78 | |||||||||||||||||||||
Total | $ | 118 | $ | 81 | $ | 69 | $ | 46 | $ | 102 | $ | 314 | $ | 307 | |||||||||||||||
Acres Sold | Real Estate | 38,834 | 47,031 | 18,057 | 9,394 | 31,833 | 113,315 | 131,575 | |||||||||||||||||||||
Price per Acre | Real Estate | $ | 2,424 | $ | 1,063 | $ | 2,415 | $ | 2,308 | $ | 2,479 | $ | 1,848 | $ | 1,701 | ||||||||||||||
Basis as a Percent of Real Estate Net Sales | Real Estate | 50 | % | 56 | % | 53 | % | 44 | % | 54 | % | 52 | % | 54 | % | ||||||||||||||
Weyerhaeuser Company | Wood Products Segment | |||||||||||||||||||||||||||
Q4.2019 Analyst Package | ||||||||||||||||||||||||||||
Preliminary results (unaudited) | ||||||||||||||||||||||||||||
Segment Statement of Operations (1) | ||||||||||||||||||||||||||||
in millions | Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | |||||||||||||||||||||
Net sales | $ | 1,094 | $ | 1,210 | $ | 1,204 | $ | 1,115 | $ | 1,087 | $ | 4,623 | $ | 5,297 | ||||||||||||||
Costs of sales | 967 | 1,070 | 1,067 | 994 | 1,003 | 4,098 | 4,228 | |||||||||||||||||||||
Gross margin | 127 | 140 | 137 | 121 | 84 | 525 | 1,069 | |||||||||||||||||||||
Selling expenses | 19 | 20 | 20 | 21 | 20 | 80 | 81 | |||||||||||||||||||||
General and administrative expenses | 35 | 34 | 35 | 35 | 33 | 139 | 130 | |||||||||||||||||||||
Product remediation recoveries, net | — | — | (68) | — | — | (68) | — | |||||||||||||||||||||
Other operating costs, net | 4 | 5 | 7 | 5 | 5 | 21 | 20 | |||||||||||||||||||||
Operating income and Net contribution to earnings | $ | 69 | $ | 81 | $ | 143 | $ | 60 | $ | 26 | $ | 353 | $ | 838 | ||||||||||||||
(1) | In January 2019, we changed the way we report our Canadian Forestlands operations, which are primarily operated to supply Weyerhaeuser's Canadian Wood Products manufacturing facilities. As a result, we now record the minimal associated third-party log sales in the Wood Products segment. These transactions do not contribute any earnings to the Wood Products segment. We have conformed prior year presentations with the current year. |
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(2) | ||||||||||||||||||||||||||||
in millions | Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | |||||||||||||||||||||
Operating income | $ | 69 | $ | 81 | $ | 143 | $ | 60 | $ | 26 | $ | 353 | $ | 838 | ||||||||||||||
Depreciation, depletion and amortization | 46 | 47 | 48 | 50 | 40 | 191 | 149 | |||||||||||||||||||||
Special items | — | — | (68) | — | — | (68) | — | |||||||||||||||||||||
Adjusted EBITDA(2) | $ | 115 | $ | 128 | $ | 123 | $ | 110 | $ | 66 | $ | 476 | $ | 987 | ||||||||||||||
(2) | See definition of Adjusted EBITDA (a non-GAAP measure) on page 1. |
Segment Special Items Included in Net Contribution to Earnings (Pretax) | ||||||||||||||||||||||||||||
in millions | Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | |||||||||||||||||||||
Product remediation recoveries, net | $ | — | $ | — | $ | 68 | $ | — | $ | — | $ | 68 | $ | — | ||||||||||||||
Selected Segment Items | ||||||||||||||||||||||||||||
in millions | Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | |||||||||||||||||||||
Total decrease (increase) in working capital(3) | $ | (155) | $ | 75 | $ | 32 | $ | 49 | $ | 83 | $ | 1 | $ | (69) | ||||||||||||||
Cash spent for capital expenditures | $ | (30) | $ | (53) | $ | (65) | $ | (109) | $ | (107) | $ | (257) | $ | (306) | ||||||||||||||
(3) | 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 | Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | ||||||||||||||||||||||
Structural Lumber | Third party net sales | $ | 444 | $ | 495 | $ | 487 | $ | 466 | $ | 427 | $ | 1,892 | $ | 2,258 | ||||||||||||||
(volumes presented | Third party sales realizations | $ | 392 | $ | 388 | $ | 389 | $ | 389 | $ | 388 | $ | 389 | $ | 482 | ||||||||||||||
in board feet) | Third party sales volumes(4) | 1,133 | 1,274 | 1,253 | 1,197 | 1,099 | 4,857 | 4,684 | |||||||||||||||||||||
Production volumes | 1,145 | 1,193 | 1,189 | 1,178 | 1,095 | 4,705 | 4,541 | ||||||||||||||||||||||
Engineered Solid | Third party net sales | $ | 116 | $ | 134 | $ | 138 | $ | 122 | $ | 121 | $ | 510 | $ | 521 | ||||||||||||||
Section | Third party sales realizations | $ | 2,218 | $ | 2,214 | $ | 2,188 | $ | 2,166 | $ | 2,139 | $ | 2,196 | $ | 2,148 | ||||||||||||||
(volumes presented | Third party sales volumes(4) | 5.2 | 6.1 | 6.3 | 5.6 | 5.7 | 23.2 | 24.3 | |||||||||||||||||||||
in cubic feet) | Production volumes | 5.9 | 6.0 | 5.3 | 5.4 | 5.3 | 22.6 | 24.3 | |||||||||||||||||||||
Engineered | Third party net sales | $ | 70 | $ | 86 | $ | 90 | $ | 77 | $ | 75 | $ | 323 | $ | 336 | ||||||||||||||
I-joists | Third party sales realizations | $ | 1,709 | $ | 1,662 | $ | 1,665 | $ | 1,678 | $ | 1,696 | $ | 1,677 | $ | 1,643 | ||||||||||||||
(volumes presented | Third party sales volumes(4) | 41 | 52 | 54 | 45 | 44 | 192 | 204 | |||||||||||||||||||||
in lineal feet) | Production volumes | 44 | 47 | 48 | 43 | 37 | 182 | 191 | |||||||||||||||||||||
Oriented Strand | Third party net sales | $ | 160 | $ | 156 | $ | 159 | $ | 157 | $ | 167 | $ | 632 | $ | 891 | ||||||||||||||
Board | Third party sales realizations | $ | 223 | $ | 213 | $ | 214 | $ | 216 | $ | 252 | $ | 217 | $ | 315 | ||||||||||||||
(volumes presented | Third party sales volumes(4) | 717 | 733 | 740 | 726 | 665 | 2,916 | 2,827 | |||||||||||||||||||||
in square feet 3/8") | Production volumes | 729 | 736 | 747 | 757 | 691 | 2,969 | 2,837 | |||||||||||||||||||||
Softwood Plywood | Third party net sales | $ | 44 | $ | 44 | $ | 42 | $ | 31 | $ | 42 | $ | 161 | $ | 200 | ||||||||||||||
(volumes presented | Third party sales realizations | $ | 383 | $ | 380 | $ | 346 | $ | 337 | $ | 396 | $ | 363 | $ | 435 | ||||||||||||||
in square feet 3/8") | Third party sales volumes(4) | 115 | 115 | 121 | 94 | 104 | 445 | 459 | |||||||||||||||||||||
Production volumes | 98 | 104 | 100 | 84 | 96 | 386 | 404 | ||||||||||||||||||||||
Medium Density | Third party net sales | $ | 38 | $ | 45 | $ | 44 | $ | 39 | $ | 39 | $ | 166 | $ | 177 | ||||||||||||||
Fiberboard | Third party sales realizations | $ | 846 | $ | 833 | $ | 831 | $ | 826 | $ | 835 | $ | 834 | $ | 835 | ||||||||||||||
(volumes presented | Third party sales volumes(4) | 44 | 55 | 53 | 48 | 47 | 200 | 212 | |||||||||||||||||||||
in square feet 3/4") | Production volumes | 45 | 61 | 47 | 49 | 52 | 202 | 220 | |||||||||||||||||||||
(4) | Volumes include sales of internally produced products and products purchased for resale primarily through our distribution business. |
Weyerhaeuser Company | Unallocated Items | |||||||||||||||||||||||||||
Q4.2019 Analyst Package | ||||||||||||||||||||||||||||
Preliminary results (unaudited) | ||||||||||||||||||||||||||||
Unallocated items are gains or charges not related to, or allocated to, an individual operating segment. They include all or a portion of items such as share-based compensation, pension and postretirement costs, elimination of intersegment profit in inventory and LIFO, foreign exchange transaction gains and losses, interest income and other as well as legacy obligations. | ||||||||||||||||||||||||||||
Net Charge to Earnings | ||||||||||||||||||||||||||||
in millions | Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | |||||||||||||||||||||
Unallocated corporate function and variable compensation expense | $ | (19) | $ | (12) | $ | (19) | $ | (30) | $ | (28) | $ | (80) | $ | (84) | ||||||||||||||
Liability classified share-based compensation | (4) | — | (1) | (2) | 8 | (7) | 10 | |||||||||||||||||||||
Foreign exchange gain (loss) | (3) | 2 | (1) | — | 5 | (2) | 3 | |||||||||||||||||||||
Elimination of intersegment profit in inventory and LIFO | (5) | (5) | 6 | (1) | 24 | (5) | 6 | |||||||||||||||||||||
Other, net | (39) | (17) | (30) | (13) | (8) | (99) | (88) | |||||||||||||||||||||
Operating income (loss) | (70) | (32) | (45) | (46) | 1 | (193) | (153) | |||||||||||||||||||||
Non-operating pension and other postretirement benefit costs | (470) | (10) | (15) | (21) | (218) | (516) | (272) | |||||||||||||||||||||
Interest income and other | 10 | 6 | 6 | 8 | 23 | 30 | 59 | |||||||||||||||||||||
Net charge to earnings | $ | (530) | $ | (36) | $ | (54) | $ | (59) | $ | (194) | $ | (679) | $ | (366) | ||||||||||||||
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(1) | ||||||||||||||||||||||||||||
in millions | Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | |||||||||||||||||||||
Operating income (loss) | $ | (70) | $ | (32) | $ | (45) | $ | (46) | $ | 1 | $ | (193) | $ | (153) | ||||||||||||||
Depreciation, depletion and amortization | 1 | 1 | 1 | 1 | 1 | 4 | 4 | |||||||||||||||||||||
Special items | 20 | — | 15 | — | — | 35 | 28 | |||||||||||||||||||||
Adjusted EBITDA(1) | $ | (49) | $ | (31) | $ | (29) | $ | (45) | $ | 2 | $ | (154) | $ | (121) | ||||||||||||||
(1) | See definition of Adjusted EBITDA (a non-GAAP measure) on page 1. |
Unallocated Special Items Included in Net Charge to Earnings (Pretax) | ||||||||||||||||||||||||||||
in millions | Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | |||||||||||||||||||||
Environmental remediation charge | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (28) | ||||||||||||||
Legal charges | (20) | — | (15) | — | — | (35) | — | |||||||||||||||||||||
Special items included in operating income (loss) | (20) | — | (15) | — | — | (35) | (28) | |||||||||||||||||||||
Pension settlement charges | (455) | 6 | — | (6) | (200) | (455) | (200) | |||||||||||||||||||||
Gain on sale of timberlands and other nonstrategic assets | — | — | — | — | 13 | — | 13 | |||||||||||||||||||||
Special items included in net charge to earnings | $ | (475) | $ | 6 | $ | (15) | $ | (6) | $ | (187) | $ | (490) | $ | (215) | ||||||||||||||
Unallocated Selected Items | ||||||||||||||||||||||||||||
in millions | Q1.2019 | Q2.2019 | Q3.2019 | Q4.2019 | Q4.2018 | YTD.2019 | YTD.2018 | |||||||||||||||||||||
Cash spent for capital expenditures | $ | (3) | $ | (6) | $ | (5) | $ | (1) | $ | (2) | $ | (15) | $ | (4) | ||||||||||||||
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SOURCE Weyerhaeuser Company
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