EX-99.2 3 wy2017q4ex-992.htm EXHIBIT 99.2 Exhibit


Weyerhaeuser Company
 
 


 
 


 
 

Exhibit 99.2
 
Q4.2017 Analyst Package
 
 



 
 


 
 


 
Preliminary results (unaudited)
 
 


 
 




Consolidated Statement of Operations (1)(2)

 
 


 
 







in millions
Q1
 
Q2
 
Q3
 
Q4
 
Year-to-Date
 
Mar 31, 2017
 
Jun 30, 2017
 
Sep 30, 2017
 
Dec 31, 2017
 
Dec 31, 2016
 
Dec 31, 2017
 
Dec 31, 2016
Net sales
$
1,693

 
$
1,808

 
$
1,872

 
$
1,823

 
$
1,596

 
$
7,196

 
$
6,365

Cost of products sold
1,272

 
1,336

 
1,374

 
1,316

 
1,278

 
5,298

 
4,980

Gross margin
421

 
472

 
498

 
507

 
318

 
1,898

 
1,385

Selling expenses
22

 
22

 
22

 
21

 
22

 
87

 
89

General and administrative expenses
87

 
76

 
75

 
72

 
85

 
310

 
338

Research and development expenses
4

 
4

 
4

 
2

 
5

 
14

 
19

Charges for integration and restructuring, closures and asset impairments
13

 
151

 
14

 
16

 
29

 
194

 
170

Charges for product remediation
—

 
50

 
190

 
50

 
—

 
290

 
—

Other operating costs (income), net
2

 
12

 
(12
)
 
(130
)
 
3

 
(128
)
 
(53
)
Operating income from continuing operations
293

 
157

 
205

 
476

 
174

 
1,131

 
822

Equity earnings from joint ventures
—

 
—

 
1

 
—

 
1

 
1

 
22

Non-operating pension and other postretirement benefit (costs) credits
(22
)
 
(8
)
 
(16
)
 
(16
)
 
11

 
(62
)
 
48

Interest income and other
9

 
9

 
11

 
10

 
9

 
39

 
43

Interest expense, net of capitalized interest
(99
)
 
(100
)
 
(98
)
 
(96
)
 
(108
)
 
(393
)
 
(431
)
Earnings from continuing operations before income taxes
181

 
58

 
103

 
374

 
87

 
716

 
504

Income taxes
(24
)
 
(34
)
 
27

 
(103
)
 
(25
)
 
(134
)
 
(89
)
Earnings from continuing operations
157

 
24

 
130

 
271

 
62

 
582

 
415

Earnings (loss) from discontinued operations, net of income taxes
—

 
—

 
—

 
—

 
489

 
—

 
612

Net earnings
157

 
24

 
130

 
271

 
551

 
582

 
1,027

Dividends on preference shares
—

 
—

 
—

 
—

 
—

 
—

 
(22
)
Net earnings attributable to Weyerhaeuser common shareholders
$
157

 
$
24

 
$
130

 
$
271

 
$
551

 
$
582

 
$
1,005

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Discontinued operations, as presented herein, consist of the operations of our former Cellulose Fibers segment. The corresponding assets and liabilities were classified as discontinued operations on our balance sheet.
(2) Amounts presented reflect the results of operations acquired in our merger with Plum Creek Timber, Inc., beginning on the merger date of February 19, 2016.
 
Per Share Information


Q1
 
Q2
 
Q3
 
Q4
 
Year-to-Date
 
Mar 31, 2017
 
Jun 30, 2017
 
Sep 30, 2017
 
Dec 31, 2017
 
Dec 31, 2016
 
Dec 31, 2017
 
Dec 31, 2016
Earnings per share attributable to Weyerhaeuser common shareholders, basic:
 

 


 


 


 


Continuing operations
$
0.21

 
$
0.03

 
$
0.17

 
$
0.36

 
$
0.09

 
$
0.77

 
$
0.55

Discontinued operations
—

 
—

 
—

 
—

 
0.65

 
—

 
0.85

Net earnings per share
$
0.21

 
$
0.03

 
$
0.17

 
$
0.36

 
$
0.74

 
$
0.77

 
$
1.40

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share attributable to Weyerhaeuser common shareholders, diluted:
 
 

 


 


 


 


Continuing operations
$
0.21

 
$
0.03

 
$
0.17

 
$
0.36

 
$
0.08

 
$
0.77

 
$
0.55

Discontinued operations
—

 
—

 
—

 
—

 
0.65

 
—

 
0.84

Net earnings per share
$
0.21

 
$
0.03

 
$
0.17

 
$
0.36

 
$
0.73

 
$
0.77

 
$
1.39

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends paid per common share
$
0.31

 
$
0.31

 
$
0.31

 
$
0.32

 
$
0.31

 
$
1.25

 
$
1.24

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
750,665

 
752,630

 
753,535

 
755,409

 
748,835

 
753,085

 
718,560

Diluted
754,747

 
756,451

 
756,903

 
758,463

 
752,768

 
756,666

 
722,401

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common shares outstanding at end of period (in thousands)
751,411

 
752,711

 
753,051

 
755,223

 
748,528

 
755,223

 
748,528


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Page 1 of 9


Weyerhaeuser Company
 
 
 
 
 
 
 
 
 
 

 
Q4.2017 Analyst Package
 
 
 
 
 
 
 
 
 
 
Preliminary results (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization (Adjusted EBITDA)*
in millions
Q1
 
Q2
 
Q3
 
Q4
 
Year-to-Date
 
Mar 31, 2017
 
Jun 30, 2017
 
Sep 30, 2017
 
Dec 31, 2017
 
Dec 31, 2016
 
Dec 31, 2017
 
Dec 31, 2016
Net earnings
$
157

 
$
24

 
$
130

 
$
271

 
$
551

 
$
582

 
$
1,027

Earnings from discontinued operations, net of income taxes
—

 
—

 
—

 
—

 
(489
)
 
—

 
(612
)
Equity earnings from joint ventures
—

 
—

 
(1
)
 
—

 
(1
)
 
(1
)
 
(22
)
Non-operating pension and other postretirement benefit costs (credits)
22

 
8

 
16

 
16

 
(11
)
 
62

 
(48
)
Interest income and other
(9
)
 
(9
)
 
(11
)
 
(10
)
 
(9
)
 
(39
)
 
(43
)
Interest expense, net of capitalized interest
99

 
100

 
98

 
96

 
108

 
393

 
431

Income taxes
24

 
34

 
(27
)
 
103

 
25

 
134

 
89

Operating income from continuing operations
293

 
157

 
205

 
476

 
174

 
1,131

 
822

Depreciation, depletion and amortization
133

 
129

 
132

 
127

 
137

 
521

 
512

Basis of real estate sold
14

 
10

 
24

 
33

 
60

 
81

 
109

Unallocated pension service costs
2

 
—

 
1

 
1

 
1

 
4

 
5

Special items
12

 
210

 
207

 
(86
)
 
28

 
343

 
135

Adjusted EBITDA*
$
454

 
$
506

 
$
569

 
$
551

 
$
400

 
$
2,080

 
$
1,583

 
 
 
 
 
 
 
 
 
 
 
 
 
 
*Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income from continuing operations adjusted for depreciation, depletion, amortization, basis of real estate sold, unallocated pension service costs and special items. Adjusted EBITDA excludes results from joint ventures. Our definition of Adjusted EBITDA may be different from similarly titled measures reported by other companies. Adjusted EBITDA should not be considered in isolation from and is not intended to represent an alternative to our GAAP results.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Special Items Included in Net Earnings (income tax affected)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
in millions
Q1
 
Q2
 
Q3
 
Q4
 
Year-to-Date
 
Mar 31, 2017
 
Jun 30, 2017
 
Sep 30, 2017
 
Dec 31, 2017
 
Dec 31, 2016
 
Dec 31, 2017
 
Dec 31, 2016
Net earnings attributable to Weyerhaeuser common shareholders
$
157

 
$
24

 
$
130

 
$
271

 
$
551

 
$
582

 
$
1,005

Plum Creek merger and integration-related costs
10

 
2

 
3

 
12

 
11

 
27

 
123

Restructuring, impairments and other charges
—

 
147

 
4

 
—

 
9

 
151

 
9

Gain on sale of timberlands and other nonstrategic assets
—

 
—

 
—

 
(99
)
 
—

 
(99
)
 
(22
)
Legal expense
—

 
—

 
—

 
—

 
—

 
—

 
7

Environmental remediation insurance recoveries
—

 
—

 
—

 
(26
)
 
—

 
(26
)
 
—

Product remediation
—

 
31

 
118

 
31

 
—

 
180

 
—

Countervailing and antidumping duties
—

 
8

 
4

 
(7
)
 
—

 
5

 
—

Tax adjustments, including enactment of tax legislation
—

 
—

 
—

 
52

 
24

 
52

 
24

Net earnings attributable to Weyerhaeuser common shareholders before special items
167

 
212

 
259

 
234

 
595

 
872

 
1,146

(Earnings) loss from discontinued operations, net of tax
—

 
—

 
—

 
—

 
(489
)
 
—

 
(612
)
Net earnings from continuing operations attributable to Weyerhaeuser common shareholders before special items
$
167

 
$
212

 
$
259

 
$
234

 
$
106

 
$
872

 
$
534

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q1
 
Q2
 
Q3
 
Q4
 
Year-to-Date
 
Mar 31, 2017
 
Jun 30, 2017
 
Sep 30, 2017
 
Dec 31, 2017
 
Dec 31, 2016
 
Dec 31, 2017
 
Dec 31, 2016
Net earnings per diluted share attributable to Weyerhaeuser common shareholders
$
0.21

 
$
0.03

 
$
0.17

 
$
0.36

 
$
0.73

 
$
0.77

 
$
1.39

Plum Creek merger and integration-related costs
0.01

 
—

 
—

 
0.02

 
0.01

 
0.03

 
0.17

Restructuring, impairments and other charges
—

 
0.20

 
0.01

 
—

 
0.01

 
0.21

 
0.01

Gain on sale of timberlands and other nonstrategic assets
—

 
—

 
—

 
(0.14
)
 
—

 
(0.14
)
 
(0.03
)
Legal expense
—

 
—

 
—

 
—

 
—

 
—

 
0.01

Environmental remediation insurance recoveries
—

 
—

 
—

 
(0.03
)
 
—

 
(0.03
)
 
—

Product remediation
—

 
0.04

 
0.15

 
0.04

 
—

 
0.23

 
—

Countervailing and antidumping duties
—

 
0.01

 
0.01

 
(0.01
)
 
—

 
0.01

 
—

Tax adjustments, including enactment of tax legislation
—

 
—

 
—

 
0.07

 
0.04

 
0.07

 
0.04

Net earnings per diluted share attributable to Weyerhaeuser common shareholders before special items
0.22

 
0.28

 
0.34

 
0.31

 
0.79

 
1.15

 
1.59

(Earnings) loss from discontinued operations, net of tax
—

 
—

 
—

 
—

 
(0.65
)
 
—

 
(0.84
)
Net earnings from continuing operations attributable to Weyerhaeuser common shareholders before special items
$
0.22

 
$
0.28

 
$
0.34

 
$
0.31

 
$
0.14

 
$
1.15

 
$
0.75


Page 2 of 9


Weyerhaeuser Company
 
 
 
 



 
Q4.2017 Analyst Package
 
 
 
 


Preliminary results (unaudited)
 
 
 
 





Consolidated Balance Sheet










in millions
March 31,
2017

June 30,
2017

September 30,
2017

December 31,
2017

December 31,
2016
 


ASSETS









Current assets:









Cash and cash equivalents
$
455

 
$
701

 
$
497

 
$
824

 
$
676

Receivables, less allowances
472

 
442

 
485

 
396

 
390

Receivables for taxes
10

 
8

 
65

 
14

 
84

Inventories
386

 
349

 
340

 
383

 
358

Prepaid expenses and other current assets
142

 
177

 
130

 
98

 
114

Assets held for sale
—

 
411

 
—

 
—

 
—

Total current assets
1,465

 
2,088

 
1,517

 
1,715

 
1,622

Property and equipment, net
1,544

 
1,534

 
1,534

 
1,618

 
1,562

Construction in progress
230

 
190

 
225

 
225

 
213

Timber and timberlands at cost, less depletion
14,218

 
13,669

 
13,627

 
12,954

 
14,299

Minerals and mineral rights, net
317

 
314

 
312

 
308

 
319

Investments in and advances to equity affiliates
56

 
33

 
33

 
31

 
56

Goodwill
40

 
40

 
40

 
40

 
40

Deferred tax assets
287

 
261

 
240

 
268

 
293

Other assets
229

 
246

 
259

 
285

 
224

Restricted financial investments held by variable interest entities
615

 
615

 
615

 
615

 
615

Total assets
$
19,001

 
$
18,990

 
$
18,402

 
$
18,059

 
$
19,243


 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Current maturities of long-term debt
$
343

 
$
668

 
$
62

 
$
62

 
$
281

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

 
—

 
—

 
209

 
—

Accounts payable
227

 
252

 
259

 
249

 
233

Accrued liabilities
452

 
585

 
702

 
645

 
692

Liabilities held for sale
—

 
19

 
—

 
—

 
—

Total current liabilities
1,022

 
1,524

 
1,023

 
1,165

 
1,206

Long-term debt
6,263

 
5,936

 
5,933

 
5,930

 
6,329

Long-term debt (nonrecourse to the company) held by variable interest entities
511

 
511

 
511

 
302

 
511

Deferred pension and other postretirement benefits
1,287

 
1,230

 
1,201

 
1,487

 
1,322

Deposit received from contribution of timberlands to related party
422

 
419

 
416

 
—

 
426

Other liabilities
281

 
280

 
273

 
276

 
269

Total liabilities
9,786

 
9,900

 
9,357

 
9,160

 
10,063

Total equity
9,215

 
9,090

 
9,045

 
8,899

 
9,180

Total liabilities and equity
$
19,001

 
$
18,990

 
$
18,402

 
$
18,059

 
$
19,243


Page 3 of 9


Weyerhaeuser Company












 
Q4.2017 Analyst Package










Preliminary results (unaudited)













Consolidated Statement of Cash Flows
in millions
Q1

Q2

Q3

Q4

Year-to-Date
 
Mar 31, 2017

Jun 30, 2017

Sep 30, 2017

Dec 31, 2017

Dec 31, 2016

Dec 31, 2017

Dec 31, 2016
Cash flows from operations:













Net earnings
$
157

 
$
24

 
$
130

 
$
271

 
$
551

 
$
582

 
$
1,027

Noncash charges (credits) to income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation, depletion and amortization
133

 
129

 
132

 
127

 
137

 
521

 
565

Basis of real estate sold
14

 
10

 
24

 
33

 
60

 
81

 
109

Deferred income taxes, net
3

 
3

 
3

 
35

 
(255
)
 
44

 
(159
)
Pension and other postretirement benefits
32

 
15

 
25

 
25

 
—

 
97

 
5

Share-based compensation expense
10

 
9

 
10

 
11

 
7

 
40

 
60

Charges for impairment of assets
—

 
147

 
6

 
1

 
14

 
154

 
37

Equity (earnings) loss from joint ventures
—

 
—

 
(1
)
 
—

 
—

 
(1
)
 
(18
)
Net gains on disposition of discontinued and other operations
—

 
—

 
(1
)
 
—

 
(729
)
 
(1
)
 
(789
)
Net gains on sale of nonstrategic assets
(7
)
 
(2
)
 
(5
)
 
(2
)
 
(12
)
 
(16
)
 
(73
)
Net gains on sale of southern timberlands
—

 
—

 
—

 
(99
)
 
—

 
(99
)
 
—

Foreign exchange transaction (gains) losses
3

 
—

 
(3
)
 
(1
)
 
6

 
(1
)
 
(5
)
Change in:
 
 
 
 
 
 
 
 
 
 
 
 
 
Receivables less allowances
(70
)
 
(8
)
 
(35
)
 
78

 
42

 
(35
)
 
(54
)
Receivable/payable for taxes
(36
)
 
(17
)
 
(63
)
 
66

 
69

 
(50
)
 
106

Inventories
(28
)
 
21

 
11

 
(43
)
 
12

 
(39
)
 
61

Prepaid expenses
(9
)
 
(4
)
 
4

 
(3
)
 
8

 
(12
)
 
5

Accounts payable and accrued liabilities
(137
)
 
192

 
129

 
(78
)
 
(50
)
 
106

 
11

Pension and postretirement contributions
(22
)
 
(15
)
 
(22
)
 
(19
)
 
(16
)
 
(78
)
 
(99
)
Distributions of earnings received from joint ventures
—

 
—

 
1

 
—

 
9

 
1

 
14

Other
(8
)
 
(15
)
 
(22
)
 
(48
)
 
(4
)
 
(93
)
 
(68
)
Net cash from (used in) operations
35

 
489

 
323

 
354

 
(151
)
 
1,201

 
735

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures:
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchases of property and equipment
(52
)
 
(74
)
 
(87
)
 
(145
)
 
(191
)
 
(358
)
 
(451
)
Timberlands reforestation costs
(23
)
 
(13
)
 
(10
)
 
(15
)
 
(16
)
 
(61
)
 
(59
)
Acquisition of timberlands
—

 
—

 
—

 
—

 
—

 
—

 
(10
)
Proceeds from sales of operations and nonstrategic assets
8

 
4

 
411

 
6

 
2,211

 
429

 
2,590

Proceeds from sale of southern timberlands
—

 
—

 
—

 
203

 
—

 
203

 
—

Proceeds from redemption of ownership in related party
—

 
—

 
—

 
108

 
—

 
108

 
—

Proceeds from contribution of timberlands to related party
—

 
—

 
—

 
—

 
—

 
—

 
440

Distributions received from joint ventures
—

 
23

 
—

 
2

 
—

 
25

 
46

Other
(1
)
 
22

 
(16
)
 
16

 
(36
)
 
21

 
3

Cash from (used in) investing activities
(68
)
 
(38
)
 
298

 
175

 
1,968

 
367

 
2,559

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash dividends on common shares
(233
)
 
(233
)
 
(233
)
 
(242
)
 
(232
)
 
(941
)
 
(932
)
Cash dividends on preference shares
—

 
—

 
—

 
—

 
—

 
—

 
(22
)
Proceeds from issuance of long-term debt
—

 
—

 
225

 
—

 
—

 
225

 
1,698

Payments on long-term debt
—

 
—

 
(831
)
 
—

 
(1,700
)
 
(831
)
 
(2,423
)
Proceeds from borrowing on line of credit
—

 
—

 
100

 
—

 
—

 
100

 
—

Payments on line of credit
—

 
—

 
(100
)
 
—

 
—

 
(100
)
 
—

Proceeds from exercise of stock options
55

 
26

 
8

 
39

 
—

 
128

 
61

Repurchase of common stock
—

 
—

 
—

 
—

 
—

 
—

 
(2,003
)
Other
(10
)
 
2

 
6

 
1

 
12

 
(1
)
 
(9
)
Cash from (used in) financing activities
(188
)
 
(205
)
 
(825
)
 
(202
)
 
(1,920
)
 
(1,420
)
 
(3,630
)
 
 
 
 
 
 
 
—

 
 
 
 
 
 
Net change in cash and cash equivalents
(221
)
 
246

 
(204
)
 
327

 
(103
)
 
148

 
(336
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash from continuing operations at beginning of period
$
676

 
$
455

 
$
701

 
$
497

 
$
769

 
$
676

 
$
1,011

Cash from discontinued operations at beginning of period
—

 
—

 
—

 
—

 
10

 
—

 
1

Cash and cash equivalents at beginning of period
$
676

 
$
455

 
$
701

 
$
497

 
$
779

 
$
676

 
$
1,012

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash from continuing operations at end of period
$
455

 
$
701

 
$
497

 
$
824

 
$
676

 
$
824

 
$
676

Cash from discontinued operations at end of period
—

 
—

 
—

 
—

 
—

 
—

 
—

Cash and cash equivalents at end of period
$
455

 
$
701

 
$
497

 
$
824

 
$
676

 
$
824

 
$
676

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash paid (received) during the year for:
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest, net of amount capitalized
$
120

 
$
72

 
$
123

 
$
66

 
$
79

 
$
381

 
$
446

Income taxes
$
59

 
$
47

 
$
23

 
$
40

 
$
511

 
$
169

 
$
485


Page 4 of 9


Weyerhaeuser Company
 
 
 
 
 
 
 
 
Total Company Statistics
 
Q4.2017 Analyst Package
 
 
 
 
 
 
 
 
 
 

 
Preliminary results (unaudited)
 
 
 
 
 
 
 
 
 


Selected Total Company Items

in millions
Q1
 
Q2
 
Q3

Q4

Year-to-Date
 
Mar 31, 2017
 
Jun 30, 2017
 
Sep 30, 2017

Dec 31, 2017

Dec 31, 2016

Dec 31, 2017

Dec 31, 2016
Pension and postretirement costs:
 
 
 
 
 










Pension and postretirement costs allocated to business segments
$
8

 
$
7

 
$
8

 
$
8

 
$
7

 
$
31

 
$
30

Pension and postretirement costs (credits) not allocated:
 
 
 
 
 
 
 
 
 
 
 
 
 
Unallocated pension service costs
2

 
—

 
1

 
1

 
1

 
4

 
5

Non-operating pension and other postretirement benefit costs (credits)
22

 
8

 
16

 
16

 
(11
)
 
62

 
(48
)
Accelerated pension costs included in Plum Creek merger-related costs (not allocated)
—

 
—

 
—

 
—

 
—

 
—

 
5

Total pension and postretirement costs for continuing operations
32

 
15

 
25

 
25

 
(3
)
 
97

 
(8
)
Pension and postretirement service costs directly attributable to discontinued operations
—

 
—

 
—

 
—

 
3

 
—

 
13

Total company pension and postretirement costs
$
32

 
$
15

 
$
25

 
$
25

 
$
—

 
$
97

 
$
5


 
 
 
 
 
 
 
 
 
 
 
 
 
Cash spent for capital expenditures for continuing operations
$
(75
)
 
$
(87
)
 
$
(97
)
 
$
(160
)
 
$
(185
)
 
$
(419
)
 
$
(425
)

Page 5 of 9


Weyerhaeuser Company
 
 
 
 
 
 
 
 
Timberlands Segment
 
Q4.2017 Analyst Package
 
 
 
 


 
 
 


 
Preliminary results (unaudited)
 
 
 
 








 
 
 
 









Segment Statement of Operations


 
 
 
 









in millions

Q1.2017
 
Q2.2017
 
Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016
Sales to unaffiliated customers
$
486

 
$
469

 
$
491

 
$
496

 
$
463

 
$
1,942

 
$
1,805

Intersegment sales
202

 
163

 
179

 
218

 
209

 
762

 
840

Total net sales
688

 
632

 
670

 
714

 
672

 
2,704

 
2,645

Cost of products sold
519

 
476

 
517

 
531

 
527

 
2,043

 
2,054

Gross margin
169

 
156

 
153

 
183

 
145

 
661

 
591

Selling expenses
1

 
1

 
1

 
1

 
1

 
4

 
5

General and administrative expenses
24

 
23

 
24

 
19

 
24

 
90

 
104

Research and development expenses
3

 
4

 
3

 
2

 
5

 
12

 
17

Charges for integration and restructuring, closures and asset impairments
—

 
147

 
—

 
—

 
—

 
147

 
—

Other operating costs (income), net
(7
)
 
(7
)
 
(6
)
 
(104
)
 
(8
)
 
(124
)
 
(34
)
Operating income and Net contribution to earnings
$
148

 
$
(12
)
 
$
131

 
$
265

 
$
123

 
$
532

 
$
499



 
 
 
 












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


 
 
 
 












in millions

Q1.2017
 
Q2.2017
 
Q3.2017

Q4.2017

Q4.2016
 
YTD.2017
 
YTD.2016
Operating income
$
148

 
$
(12
)
 
$
131

 
$
265

 
$
123

 
$
532

 
$
499

Depreciation, depletion and amortization
94

 
87

 
89

 
86

 
100

 
356

 
366

Special items
—

 
147

 
—

 
(99
)
 
—

 
48

 
—

Adjusted EBITDA*
$
242

 
$
222

 
$
220

 
$
252

 
$
223

 
$
936

 
$
865

* See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.


 
 
 
 












Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
in millions
 
Q1.2017
 
Q2.2017
 
Q3.2017
 
Q4.2017
 
Q4.2016
 
YTD.2017
 
YTD.2016
Restructuring, impairments and other charges
$
—

 
$
(147
)
 
$
—

 
$
—

 
$
—

 
$
(147
)
 
$
—

Gain on sale of timberlands and other nonstrategic assets
$
—

 
$
—

 
$
—

 
$
99

 
$
—

 
$
99

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Segment Items


 
 
 
 












in millions

Q1.2017
 
Q2.2017
 
Q3.2017

Q4.2017

Q4.2016
 
YTD.2017
 
YTD.2016
Total decrease (increase) in working capital(1)
$
(18
)
 
$
38

 
$
—

 
$
(15
)
 
$
(10
)
 
$
5

 
$
7

Cash spent for capital expenditures
$
(30
)
 
$
(25
)
 
$
(24
)
 
$
(36
)
 
$
(39
)
 
$
(115
)
 
$
(116
)
(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)


 
 
 
 













Q1.2017
 
Q2.2017
 
Q3.2017

Q4.2017

Q4.2016
 
YTD.2017
 
YTD.2016
Third Party
Net Sales
(millions)
Logs:

 

 









West
$
225

 
$
227

 
$
221

 
$
242

 
$
201

 
$
915

 
$
865

South
148

 
148

 
155

 
165

 
151

 
616

 
566

North
27

 
16

 
25

 
27

 
30

 
95

 
91

Other
20

 
11

 
17

 
11

 
13

 
59

 
38

Total delivered logs
420

 
402

 
418

 
445

 
395

 
1,685

 
1,560

Stumpage and pay-as-cut timber
12

 
17

 
23

 
21

 
23

 
73

 
85

Products from international operations
19

 
21

 
23

 
—

 
21

 
63

 
79

Recreational and other lease revenue
14

 
15

 
16

 
14

 
15

 
59

 
44

Other revenue
21

 
14

 
11

 
16

 
9

 
62

 
37

Total
$
486

 
$
469

 
$
491

 
$
496

 
$
463

 
$
1,942

 
$
1,805

Delivered Logs
Third Party Sales
Realizations (per ton)
West
$
104.27

 
$
105.84

 
$
116.03

 
$
121.41

 
$
100.43

 
$
111.58

 
$
99.32

South
$
34.48

 
$
34.48

 
$
34.24

 
$
34.53

 
$
34.98

 
$
34.43

 
$
35.46

North
$
59.57

 
$
63.49

 
$
59.02

 
$
60.77

 
$
59.28

 
$
60.38

 
$
60.47

Delivered Logs
Third Party Sales
Volumes
(tons, thousands)
West
2,157

 
2,143

 
1,910

 
1,992

 
2,008

 
8,202

 
8,713

South
4,293

 
4,285

 
4,527

 
4,790

 
4,308

 
17,895

 
15,967

North
454

 
253

 
428

 
439

 
495

 
1,574

 
1,500

Other
510

 
292

 
424

 
232

 
342

 
1,458

 
943

Fee Harvest Volumes
(tons, thousands)
West
2,657

 
2,652

 
2,230

 
2,544

 
2,558

 
10,083

 
11,083

South
6,373

 
6,473

 
6,953

 
7,350

 
7,260

 
27,149

 
26,343

North
622

 
383

 
565

 
635

 
652

 
2,205

 
2,044

Other
371

 
444

 
569

 
—

 
329

 
1,384

 
701

(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.


Page 6 of 9


Weyerhaeuser Company
 
 
Real Estate, Energy and Natural Resources Segment
 
Q4.2017 Analyst Package
 
 
 
 


 
 
 
 

 
Preliminary results (unaudited)
 
 
 
 








 
 
 
 









Segment Statement of Operations


 
 
 
 









in millions

Q1.2017
 
Q2.2017
 
Q3.2017
 
Q4.2017
 
Q4.2016
 
YTD.2017
 
YTD.2016
Sales to unaffiliated customers
$
53

 
$
46

 
$
82

 
$
99

 
$
101

 
$
280

 
$
226

Intersegment sales
—

 
—

 
—

 
1

 
1

 
1

 
1

Total net sales
53

 
46

 
82

 
100

 
102

 
281

 
227

Cost of products sold
20

 
16

 
31

 
43

 
69

 
110

 
134

Gross margin
33

 
30

 
51

 
57

 
33

 
171

 
93

Selling expenses
—

 
—

 
—

 
—

 
—

 
—

 
—

General and administrative expenses
7

 
7

 
6

 
6

 
7

 
26

 
26

Charges for integration and restructuring, closures and asset impairments
—

 
—

 
—

 
—

 
14

 
—

 
15

Other operating costs (income), net
—

 
—

 
(1
)
 
1

 
—

 
—

 
(1
)
Operating income
26

 
23

 
46

 
50

 
12

 
145

 
53

Equity earnings from joint ventures(1)
—

 
—

 
1

 
—

 
1

 
1

 
2

Net contribution to earnings
$
26

 
$
23

 
$
47

 
$
50

 
$
13

 
$
146

 
$
55

(1) Equity earnings (loss) from joint ventures attributed to the Real Estate and ENR segment are generated from our investments in our real estate development ventures.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization (Adjusted EBITDA)*


 
 
 
 












in millions

Q1.2017
 
Q2.2017
 
Q3.2017
 
Q4.2017
 
Q4.2016
 
YTD.2017
 
YTD.2016
Operating income
 
$
26

 
$
23

 
$
46

 
$
50

 
$
12

 
$
145

 
$
53

Depreciation, depletion and amortization
3

 
4

 
4

 
4

 
4

 
15

 
13

Basis of real estate sold
14

 
10

 
24

 
33

 
60

 
81

 
109

Special items
—

 
—

 
—

 
—

 
14

 
—

 
14

Adjusted EBITDA*
$
43

 
$
37

 
$
74

 
$
87

 
$
90

 
$
241

 
$
189

* See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.
 
Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
in millions
 
Q1.2017
 
Q2.2017
 
Q3.2017
 
Q4.2017
 
Q4.2016
 
YTD.2017
 
YTD.2016
Restructuring, impairments and other charges
$
—

 
$
—

 
$
—

 
$
—

 
$
(14
)
 
$
—

 
$
(14
)
 
Selected Segment Items


















in millions

Q1.2017
 
Q2.2017
 
Q3.2017
 
Q4.2017
 
Q4.2016
 
YTD.2017
 
YTD.2016
Cash spent for capital expenditures
$
—

 
$
(1
)
 
$
(1
)
 
$
—

 
$
—

 
$
(2
)
 
$
(1
)


 
 
 
 









Segment Statistics


 
 
 
 














Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016
 
YTD.2017
 
YTD.2016
Net Sales
(millions)
Real Estate
$
37

 
$
27

 
$
64

 
$
80

 
$
85

 
$
208

 
$
172

Energy and Natural Resources
16

 
19

 
18

 
19

 
16

 
72

 
54

Total
$
53

 
$
46

 
$
82

 
$
99

 
$
101

 
$
280

 
$
226

Acres sold
Real Estate
13,257

 
10,003

 
35,749

 
38,226

 
44,589

 
97,235

 
82,687

Price per acre
Real Estate
$
2,403

 
$
2,714

 
$
1,784

 
$
2,076

 
$
1,903

 
$
2,079

 
$
2,072



Page 7 of 9


Weyerhaeuser Company
 
 
 
 
 
 
 
 
Wood Products Segment
 
Q4.2017 Analyst Package
 
 
 
 


 
 
 
 

 
Preliminary results (unaudited)
 
 
 
 








 
 
 
 









Segment Statement of Operations  


 
 
 
 









in millions

Q1.2017
 
Q2.2017
 
Q3.2017
 
Q4.2017
 
Q4.2016
 
YTD.2017
 
YTD.2016
Sales to unaffiliated customers
$
1,154

 
$
1,293

 
$
1,299

 
$
1,228

 
$
1,032

 
$
4,974

 
$
4,334

Intersegment sales
—

 
—

 
—

 
—

 
7

 
—

 
68

Total net sales
1,154

 
1,293

 
1,299

 
1,228

 
1,039

 
4,974

 
4,402

Cost of products sold
926

 
1,002

 
1,005

 
947

 
889

 
3,880

 
3,688

Gross margin
228

 
291

 
294

 
281

 
150

 
1,094

 
714

Selling expenses
21

 
19

 
20

 
20

 
21

 
80

 
84

General and administrative expenses
32

 
32

 
30

 
32

 
28

 
126

 
109

Research and development expenses
1

 
—

 
1

 
—

 
—

 
2

 
2

Charges for integration and restructuring, closures and asset impairments
1

 
2

 
8

 
2

 
1

 
13

 
7

Charges for product remediation
—

 
50

 
190

 
50

 
—

 
290

 
—

Other operating costs (income), net
1

 
11

 
5

 
(3
)
 
1

 
14

 
—

Operating income and Net contribution to earnings
$
172

 
$
177

 
$
40

 
$
180

 
$
99

 
$
569

 
$
512



 
 
 
 












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


 
 
 
 












in millions

Q1.2017
 
Q2.2017
 
Q3.2017
 
Q4.2017
 
Q4.2016
 
YTD.2017
 
YTD.2016
Operating income
$
172

 
$
177

 
$
40

 
$
180

 
$
99

 
$
569

 
$
512

Depreciation, depletion and amortization
35

 
36

 
37

 
37

 
33

 
145

 
129

Special items
—

 
61

 
201

 
41

 
—

 
303

 
—

Adjusted EBITDA*
$
207

 
$
274

 
$
278

 
$
258

 
$
132

 
$
1,017

 
$
641

* See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.

Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
in millions
 
Q1.2017
 
Q2.2017
 
Q3.2017
 
Q4.2017
 
Q4.2016
 
YTD.2017
 
YTD.2016
Countervailing and antidumping duties
$
—

 
$
(11
)
 
$
(5
)
 
$
9

 
$
—

 
$
(7
)
 
$
—

Restructuring, impairments and other charges
—

 
—

 
(6
)
 
—

 
—

 
(6
)
 
—

Product remediation
 
—

 
(50
)
 
(190
)
 
(50
)
 
—

 
(290
)
 
—

Total
 
$
—

 
$
(61
)
 
$
(201
)
 
$
(41
)
 
$
—

 
$
(303
)
 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Segment Items


 
 
 
 












in millions

Q1.2017
 
Q2.2017
 
Q3.2017
 
Q4.2017
 
Q4.2016
 
YTD.2017
 
YTD.2016
Total decrease (increase) in working capital(1)
$
(122
)
 
$
113

 
$
150

 
$
(81
)
 
$
32

 
$
60

 
$
(16
)
Cash spent for capital expenditures
$
(44
)
 
$
(61
)
 
$
(71
)
 
$
(123
)
 
$
(145
)
 
$
(299
)
 
$
(297
)
(1) Represents the change in prepaid assets, accounts receivable, accounts payable, accrued liabilities and inventory for the Wood Products segment.


 
 
 
 












Segment Statistics


 
 
 
 












in millions, except for third party sales realizations
Q1.2017
 
Q2.2017
 
Q3.2017
 
Q4.2017
 
Q4.2016
 
YTD.2017
 
YTD.2016
Structural Lumber
(board feet)
Third party net sales
$
478

 
$
538

 
$
525

 
$
517

 
$
427

 
$
2,058

 
$
1,839

Third party sales realizations
$
413

 
$
441

 
$
448

 
$
466

 
$
392

 
$
442

 
$
390

Third party sales volumes(2)
1,158

 
1,218

 
1,172

 
1,110

 
1,089

 
4,658

 
4,723

Production volumes
1,152

 
1,146

 
1,093

 
1,118

 
1,052

 
4,509

 
4,516

Engineered Solid
Section
(cubic feet)
Third party net sales
$
117

 
$
130

 
$
131

 
$
122

 
$
107

 
$
500

 
$
450

Third party sales realizations
$
1,881

 
$
1,979

 
$
2,047

 
$
2,076

 
$
1,930

 
$
1,995

 
$
1,934

Third party sales volumes(2)
6.2

 
6.6

 
6.4

 
5.9

 
5.6

 
25.1

 
23.3

Production volumes
6.3

 
6.6

 
6.4

 
5.8

 
5.6

 
25.1

 
22.8

Engineered
I-joists
(lineal feet)
Third party net sales
$
73

 
$
85

 
$
93

 
$
85

 
$
72

 
$
336

 
$
290

Third party sales realizations
$
1,481

 
$
1,522

 
$
1,529

 
$
1,561

 
$
1,485

 
$
1,524

 
$
1,484

Third party sales volumes(2)
49

 
57

 
60

 
54

 
48

 
220

 
195

Production volumes
50

 
53

 
58

 
52

 
43

 
213

 
184

Oriented Strand
Board
(square feet 3/8")
Third party net sales
$
203

 
$
225

 
$
243

 
$
233

 
$
163

 
$
904

 
$
707

Third party sales realizations
$
263

 
$
295

 
$
328

 
$
335

 
$
255

 
$
304

 
$
241

Third party sales volumes(2)
769

 
764

 
741

 
697

 
638

 
2,971

 
2,934

Production volumes
758

 
754

 
744

 
739

 
651

 
2,995

 
2,910

Softwood Plywood
(square feet 3/8")
Third party net sales
$
44

 
$
47

 
$
45

 
$
40

 
$
41

 
$
176

 
$
174

Third party sales realizations
$
377

 
$
380

 
$
386

 
$
417

 
$
364

 
$
389

 
$
368

Third party sales volumes(2)
118

 
123

 
117

 
95

 
113

 
453

 
481

Production volumes
97

 
99

 
88

 
86

 
92

 
370

 
396

Medium Density Fiberboard
(square feet 3/4")
Third party net sales
$
47

 
$
51

 
$
48

 
$
37

 
$
46

 
$
183

 
$
158

Third party sales realizations
$
795

 
$
845

 
$
821

 
$
829

 
$
779

 
$
822

 
$
769

Third party sales volumes(2)
59

 
60

 
58

 
45

 
58

 
222

 
206

Production volumes
56

 
63

 
63

 
50

 
54

 
232

 
209

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

Page 8 of 9


Weyerhaeuser Company
 
 
 
 
 
 
 
 
Unallocated Items
 
Q4.2017 Analyst Package
 
 
 
 


 
 
 
 

 
Preliminary results (unaudited)
 
 
 
 







 
 
 
 









Unallocated items are gains or charges not related to or allocated to an individual operating segment. They include a portion of items such as: share-based compensation, pension and postretirement costs, foreign exchange transaction gains and losses associated with financing, the elimination of intersegment profit in inventory, equity earnings in our timberland venture, and the LIFO reserve.

 
 
 
 









Contribution to Earnings

 
 
 
 









in millions
Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016
 
YTD.2017
 
YTD.2016
Unallocated corporate function expenses
$
(19
)
 
$
(17
)
 
$
(19
)
 
$
(18
)
 
$
(25
)
 
$
(73
)
 
$
(87
)
Unallocated share-based compensation
(6
)
 
—

 
(1
)
 
(2
)
 
2

 
(9
)
 
(3
)
Unallocated pension service costs
(2
)
 
—

 
(1
)
 
(1
)
 
(1
)
 
(4
)
 
(5
)
Foreign exchange gains (losses)
(3
)
 
—

 
3

 
1

 
(7
)
 
1

 
6

Elimination of intersegment profit in inventory and LIFO
(6
)
 
(3
)
 
3

 
(14
)
 
(12
)
 
(20
)
 
(18
)
Gain on sale of nonstrategic asset
3

 
1

 
4

 
1

 
5

 
9

 
50

Charges for integration and restructuring, closures and asset impairments:
 
 
 
 
 
 
 
 
 
 
 
 
 
     Plum Creek merger and integration-related costs
(12
)
 
(2
)
 
(6
)
 
(14
)
 
(14
)
 
(34
)
 
(146
)
     Other restructuring, closures and asset impairments
—

 
—

 
—

 
—

 
—

 
—

 
(2
)
Other
(8
)
 
(10
)
 
5

 
28

 
(8
)
 
15

 
(37
)
Operating income (loss)
(53
)
 
(31
)
 
(12
)
 
(19
)
 
(60
)
 
(115
)
 
(242
)
Equity earnings from joint venture(1)
—

 
—

 
—

 
—

 
—

 
—

 
20

Non-operating pension and other postretirement benefit (costs) credits(2)
(22
)
 
(8
)
 
(16
)
 
(16
)
 
11

 
(62
)
 
48

Interest income and other
9

 
9

 
11

 
10

 
9

 
39

 
43

Net contribution to earnings
$
(66
)
 
$
(30
)
 
$
(17
)
 
$
(25
)
 
$
(40
)
 
$
(138
)
 
$
(131
)
(1) 2016 results include equity earnings from our Timberland Venture, which was consolidated as a wholly-owned subsidiary effective August 31, 2016.
(2) During Q1 2017, we adopted ASU 2017-07. This ASU requires us to show components of pension and other post retirement benefit costs (interest, expected return on plan assets, amortization of actuarial gains or losses, amortization of prior service credits or costs) on the Consolidated Statement of Operations as a line item outside of "Operating income." We reclassified these components for all periods presented.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization (Adjusted EBITDA)*
 
 
 
 
 
 
 
 
 
 
 
 
 
 
in millions
Q1.2017
 
Q2.2017
 
Q3.2017
 
Q4.2017
 
Q4.2016
 
YTD.2017
 
YTD.2016
Operating income (loss)
$
(53
)
 
$
(31
)
 
$
(12
)
 
$
(19
)
 
$
(60
)
 
$
(115
)
 
$
(242
)
Depreciation, depletion and amortization
1

 
2

 
2

 
—

 
—

 
5

 
4

Unallocated pension service costs
2

 
—

 
1

 
1

 
1

 
4

 
5

Special items
12

 
2

 
6

 
(28
)
 
14

 
(8
)
 
121

Adjusted EBITDA*
$
(38
)
 
$
(27
)
 
$
(3
)
 
$
(46
)
 
$
(45
)
 
$
(114
)
 
$
(112
)
* See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unallocated Special Items Included in Net Contribution to Earnings (Pre-Tax)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
in millions
Q1.2017
 
Q2.2017
 
Q3.2017
 
Q4.2017
 
Q4.2016
 
YTD.2017
 
YTD.2016
Plum Creek merger and integration-related costs
$
(12
)
 
$
(2
)
 
$
(6
)
 
$
(14
)
 
$
(14
)
 
$
(34
)
 
$
(146
)
Gain on sale of timberlands and other nonstrategic assets
—

 
—

 
—

 
—

 
—

 
—

 
36

Legal expense
—

 
—

 
—

 
—

 
—

 
—

 
(11
)
Environmental remediation insurance recoveries
 
 
 
 
 
 
42

 
 
 
42

 
—

Total
$
(12
)
 
$
(2
)
 
$
(6
)
 
$
28

 
$
(14
)
 
$
8

 
$
(121
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unallocated Selected Items
 
 
 
 
 
 
 
 
 
 
 
 
 
 
in millions
Q1.2017
 
Q2.2017
 
Q3.2017
 
Q4.2017
 
Q4.2016
 
YTD.2017
 
YTD.2016
Cash spent for capital expenditures
$
(1
)
 
$
—

 
$
(1
)
 
$
(1
)
 
$
(1
)
 
$
(3
)
 
$
(11
)

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