EX-99.2 3 wy-ex992_9.htm EX-99.2 wy-ex992_9.htm

 

Weyerhaeuser Company

Exhibit 99.2

Q3.2019 Analyst Package

Preliminary results (unaudited)

 

Consolidated Statement of Operations

 

 

 

Q1

 

 

Q2

 

 

Q3

 

 

Year-to-Date

 

in millions

 

March 31,

2019

 

 

June 30,

2019

 

 

September 30,

2019

 

 

September 30,

2018

 

 

September 30,

2019

 

 

September 30,

2018

 

Net sales

 

$

1,643

 

 

$

1,692

 

 

$

1,671

 

 

$

1,910

 

 

$

5,006

 

 

$

5,840

 

Costs of sales

 

 

1,322

 

 

 

1,390

 

 

 

1,399

 

 

 

1,452

 

 

 

4,111

 

 

 

4,247

 

Gross margin

 

 

321

 

 

 

302

 

 

 

272

 

 

 

458

 

 

 

895

 

 

 

1,593

 

Selling expenses

 

 

21

 

 

 

21

 

 

 

20

 

 

 

20

 

 

 

62

 

 

 

66

 

General and administrative expenses

 

 

89

 

 

 

80

 

 

 

85

 

 

 

78

 

 

 

254

 

 

 

236

 

Research and development expenses

 

 

1

 

 

 

2

 

 

 

1

 

 

 

2

 

 

 

4

 

 

 

6

 

Product remediation recoveries, net

 

 

 

 

 

 

 

 

(68

)

 

 

 

 

 

(68

)

 

 

 

Other operating costs, net

 

 

36

 

 

 

13

 

 

 

32

 

 

 

21

 

 

 

81

 

 

 

68

 

Operating income

 

 

174

 

 

 

186

 

 

 

202

 

 

 

337

 

 

 

562

 

 

 

1,217

 

Non-operating pension and other

postretirement benefit costs

 

 

(470

)

 

 

(10

)

 

 

(15

)

 

 

(17

)

 

 

(495

)

 

 

(54

)

Interest income and other

 

 

10

 

 

 

6

 

 

 

6

 

 

 

13

 

 

 

22

 

 

 

36

 

Interest expense, net of capitalized interest

 

 

(107

)

 

 

(91

)

 

 

(91

)

 

 

(93

)

 

 

(289

)

 

 

(278

)

Earnings (loss) before income taxes

 

 

(393

)

 

 

91

 

 

 

102

 

 

 

240

 

 

 

(200

)

 

 

921

 

Income taxes

 

 

104

 

 

 

37

 

 

 

(3

)

 

 

15

 

 

 

138

 

 

 

(80

)

Net earnings (loss)

 

$

(289

)

 

$

128

 

 

$

99

 

 

$

255

 

 

$

(62

)

 

$

841

 

 

Per Share Information

 

 

 

Q1

 

 

Q2

 

 

Q3

 

 

Year-to-Date

 

 

 

March 31,

2019

 

 

June 30,

2019

 

 

September 30,

2019

 

 

September 30,

2018

 

 

September 30,

2019

 

 

September 30,

2018

 

Earnings (loss) per share, basic and diluted

 

$

(0.39

)

 

$

0.17

 

 

$

0.13

 

 

$

0.34

 

 

$

(0.08

)

 

$

1.11

 

Dividends paid per common share

 

$

0.34

 

 

$

0.34

 

 

$

0.34

 

 

$

0.34

 

 

$

1.02

 

 

$

0.98

 

Weighted average shares outstanding (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

746,603

 

 

 

745,486

 

 

 

745,626

 

 

 

754,986

 

 

 

745,901

 

 

 

756,531

 

Diluted

 

 

746,603

 

 

 

746,232

 

 

 

746,514

 

 

 

757,389

 

 

 

745,901

 

 

 

759,116

 

Common shares outstanding at end of period (in thousands)

 

 

744,767

 

 

 

744,905

 

 

 

745,071

 

 

 

749,199

 

 

 

745,071

 

 

 

749,199

 

 

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

 

 

 

Q1

 

 

Q2

 

 

Q3

 

 

Year-to-Date

 

in millions

 

March 31,

2019

 

 

June 30,

2019

 

 

September 30,

2019

 

 

September 30,

2018

 

 

September 30,

2019

 

 

September 30,

2018

 

Net earnings (loss)

 

$

(289

)

 

$

128

 

 

$

99

 

 

$

255

 

 

$

(62

)

 

$

841

 

Non-operating pension and other postretirement benefit costs

 

 

470

 

 

 

10

 

 

 

15

 

 

 

17

 

 

 

495

 

 

 

54

 

Interest income and other

 

 

(10

)

 

 

(6

)

 

 

(6

)

 

 

(13

)

 

 

(22

)

 

 

(36

)

Interest expense, net of capitalized interest

 

 

107

 

 

 

91

 

 

 

91

 

 

 

93

 

 

 

289

 

 

 

278

 

Income taxes

 

 

(104

)

 

 

(37

)

 

 

3

 

 

 

(15

)

 

 

(138

)

 

 

80

 

Operating income

 

 

174

 

 

 

186

 

 

 

202

 

 

 

337

 

 

 

562

 

 

 

1,217

 

Depreciation, depletion and amortization

 

 

123

 

 

 

124

 

 

 

135

 

 

 

122

 

 

 

382

 

 

 

361

 

Basis of real estate sold

 

 

48

 

 

 

33

 

 

 

24

 

 

 

46

 

 

 

105

 

 

 

80

 

Special items included in operating income

 

 

20

 

 

 

 

 

 

(53

)

 

 

 

 

 

(33

)

 

 

28

 

Adjusted EBITDA(1)

 

$

365

 

 

$

343

 

 

$

308

 

 

$

505

 

 

$

1,016

 

 

$

1,686

 

 

(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.

Page 1 of 8

 


 

Weyerhaeuser Company

Total Company Statistics

Q3.2019 Analyst Package

Preliminary results (unaudited)

 

Special Items Included in Net Earnings (Income Tax Affected)

 

 

 

Q1

 

 

Q2

 

 

Q3

 

 

Year-to-Date

 

in millions

 

March 31,

2019

 

 

June 30,

2019

 

 

September 30,

2019

 

 

September 30,

2018

 

 

September 30,

2019

 

 

September 30,

2018

 

Net earnings (loss)

 

$

(289

)

 

$

128

 

 

$

99

 

 

$

255

 

 

$

(62

)

 

$

841

 

Early extinguishment of debt charge(1)

 

 

9

 

 

 

 

 

 

 

 

 

 

 

 

9

 

 

 

 

Environmental remediation charge

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21

 

Legal charges

 

 

15

 

 

 

 

 

 

11

 

 

 

 

 

 

26

 

 

 

 

Pension settlement charges

 

 

345

 

 

 

(5

)

 

 

 

 

 

 

 

 

340

 

 

 

 

Product remediation recoveries, net

 

 

 

 

 

 

 

 

(51

)

 

 

 

 

 

(51

)

 

 

 

Tax adjustment

 

 

 

 

 

 

 

 

 

 

 

(41

)

 

 

 

 

 

(41

)

Net earnings before special items(2)

 

$

80

 

 

$

123

 

 

$

59

 

 

$

214

 

 

$

262

 

 

$

821

 

 

 

 

Q1

 

 

Q2

 

 

Q3

 

 

Year-to-Date

 

 

 

March 31,

2019

 

 

June 30,

2019

 

 

September 30,

2019

 

 

September 30,

2018

 

 

September 30,

2019

 

 

September 30,

2018

 

Net earnings (loss) per diluted share

 

$

(0.39

)

 

$

0.17

 

 

$

0.13

 

 

$

0.34

 

 

$

(0.08

)

 

$

1.11

 

Early extinguishment of debt charge(1)

 

 

0.01

 

 

 

 

 

 

 

 

 

 

 

 

0.01

 

 

 

 

Environmental remediation charge

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.03

 

Legal charges

 

 

0.02

 

 

 

 

 

 

0.02

 

 

 

 

 

 

0.04

 

 

 

 

Pension settlement charges

 

 

0.47

 

 

 

(0.01

)

 

 

 

 

 

 

 

 

0.46

 

 

 

 

Product remediation recoveries, net

 

 

 

 

 

 

 

 

(0.07

)

 

 

 

 

 

(0.07

)

 

 

 

Tax adjustment

 

 

 

 

 

 

 

 

 

 

 

(0.06

)

 

 

 

 

 

(0.06

)

Net earnings per diluted share before special items(2)

 

$

0.11

 

 

$

0.16

 

 

$

0.08

 

 

$

0.28

 

 

$

0.36

 

 

$

1.08

 

 

(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

 

 

Year-to-Date

 

in millions

 

March 31,

2019

 

 

June 30,

2019

 

 

September 30,

2019

 

 

September 30,

2018

 

 

September 30,

2019

 

 

September 30,

2018

 

Pension and postretirement costs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension and postretirement service costs

 

$

8

 

 

$

8

 

 

$

8

 

 

$

10

 

 

$

24

 

 

$

28

 

Non-operating pension and other postretirement benefit costs

 

 

470

 

 

 

10

 

 

 

15

 

 

 

17

 

 

 

495

 

 

 

54

 

Total company pension and postretirement costs

 

$

478

 

 

$

18

 

 

$

23

 

 

$

27

 

 

$

519

 

 

$

82

 

 

Page 2 of 8

 


 

Weyerhaeuser Company

Q3.2019 Analyst Package

Preliminary results (unaudited)

 

Consolidated Balance Sheet

 

in millions

 

March 31,

2019

 

 

June 30,

2019

 

 

September 30,

2019

 

 

December 31,

2018

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

259

 

 

$

212

 

 

$

153

 

 

$

334

 

Receivables, less discounts and allowances

 

 

398

 

 

 

408

 

 

 

368

 

 

 

337

 

Receivables for taxes

 

 

163

 

 

 

157

 

 

 

149

 

 

 

137

 

Inventories

 

 

451

 

 

 

425

 

 

 

393

 

 

 

389

 

Assets held for sale

 

 

 

 

 

 

 

 

251

 

 

 

 

Prepaid expenses and other current assets

 

 

141

 

 

 

132

 

 

 

141

 

 

 

152

 

Current restricted financial investments held by variable interest entities

 

 

362

 

 

 

362

 

 

 

362

 

 

 

253

 

Total current assets

 

 

1,774

 

 

 

1,696

 

 

 

1,817

 

 

 

1,602

 

Property and equipment, net

 

 

1,917

 

 

 

1,901

 

 

 

1,860

 

 

 

1,857

 

Construction in progress

 

 

102

 

 

 

134

 

 

 

187

 

 

 

136

 

Timber and timberlands at cost, less depletion

 

 

12,586

 

 

 

12,516

 

 

 

12,192

 

 

 

12,671

 

Minerals and mineral rights, less depletion

 

 

291

 

 

 

288

 

 

 

284

 

 

 

294

 

Deferred tax assets

 

 

18

 

 

 

33

 

 

 

31

 

 

 

15

 

Other assets

 

 

444

 

 

 

461

 

 

 

461

 

 

 

312

 

Restricted financial investments held by variable interest entities

 

 

 

 

 

 

 

 

 

 

 

362

 

Total assets

 

$

17,132

 

 

$

17,029

 

 

$

16,832

 

 

$

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

 

 

 

425

 

Accounts payable

 

 

243

 

 

 

271

 

 

 

242

 

 

 

222

 

Accrued liabilities

 

 

411

 

 

 

510

 

 

 

487

 

 

 

490

 

Total current liabilities

 

 

1,201

 

 

 

1,223

 

 

 

1,169

 

 

 

1,939

 

Long-term debt, net

 

 

6,156

 

 

 

6,153

 

 

 

6,150

 

 

 

5,419

 

Deferred tax liabilities

 

 

34

 

 

 

17

 

 

 

25

 

 

 

43

 

Deferred pension and other postretirement benefits

 

 

542

 

 

 

515

 

 

 

506

 

 

 

527

 

Other liabilities

 

 

398

 

 

 

397

 

 

 

383

 

 

 

275

 

Total liabilities

 

 

8,331

 

 

 

8,305

 

 

 

8,233

 

 

 

8,203

 

Total equity

 

 

8,801

 

 

 

8,724

 

 

 

8,599

 

 

 

9,046

 

Total liabilities and equity

 

$

17,132

 

 

$

17,029

 

 

$

16,832

 

 

$

17,249

 

 

 

 

Page 3 of 8

 


 

Weyerhaeuser Company

Q3.2019 Analyst Package

Preliminary results (unaudited)

 

Consolidated Statement of Cash Flows

 

 

Q1

 

 

Q2

 

 

Q3

 

 

Year-to-Date

 

in millions

 

March 31,

2019

 

 

June 30,

2019

 

 

September 30,

2019

 

 

September 30,

2018

 

 

September 30,

2019

 

 

September 30,

2018

 

Cash flows from operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

(289

)

 

$

128

 

 

$

99

 

 

$

255

 

 

$

(62

)

 

$

841

 

Noncash charges to earnings (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

123

 

 

 

124

 

 

 

135

 

 

 

122

 

 

 

382

 

 

 

361

 

Basis of real estate sold

 

 

48

 

 

 

33

 

 

 

24

 

 

 

46

 

 

 

105

 

 

 

80

 

Deferred income taxes, net

 

 

(123

)

 

 

(43

)

 

 

2

 

 

 

86

 

 

 

(164

)

 

 

111

 

Pension and other postretirement benefits

 

 

478

 

 

 

18

 

 

 

23

 

 

 

27

 

 

 

519

 

 

 

82

 

Share-based compensation expense

 

 

9

 

 

 

7

 

 

 

7

 

 

 

13

 

 

 

23

 

 

 

31

 

Change in:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receivables, less allowances

 

 

(77

)

 

 

(10

)

 

 

40

 

 

 

46

 

 

 

(47

)

 

 

(55

)

Receivables and payables for taxes

 

 

(31

)

 

 

6

 

 

 

7

 

 

 

(124

)

 

 

(18

)

 

 

(109

)

Inventories

 

 

(60

)

 

 

28

 

 

 

30

 

 

 

27

 

 

 

(2

)

 

 

(9

)

Prepaid expenses and other current assets

 

 

(5

)

 

 

8

 

 

 

2

 

 

 

(6

)

 

 

5

 

 

 

(7

)

Accounts payable and accrued liabilities

 

 

(82

)

 

 

127

 

 

 

(58

)

 

 

(63

)

 

 

(13

)

 

 

(133

)

Pension and postretirement benefit contributions and payments

 

 

(14

)

 

 

(13

)

 

 

(9

)

 

 

(323

)

 

 

(36

)

 

 

(355

)

Other

 

 

9

 

 

 

(17

)

 

 

(10

)

 

 

(19

)

 

 

(18

)

 

 

(18

)

Net cash from operations

 

$

(14

)

 

$

396

 

 

$

292

 

 

$

87

 

 

$

674

 

 

$

820

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures for property and equipment

 

$

(41

)

 

$

(71

)

 

$

(87

)

 

$

(94

)

 

$

(199

)

 

$

(238

)

Capital expenditures for timberlands reforestation

 

 

(18

)

 

 

(13

)

 

 

(11

)

 

 

(11

)

 

 

(42

)

 

 

(45

)

Proceeds from note receivable held by variable interest entities

 

 

253

 

 

 

 

 

 

 

 

 

 

 

 

253

 

 

 

 

Other

 

 

18

 

 

 

1

 

 

 

1

 

 

 

(10

)

 

 

20

 

 

 

19

 

Net cash from investing activities

 

$

212

 

 

$

(83

)

 

$

(97

)

 

$

(115

)

 

$

32

 

 

$

(264

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends on common shares

 

$

(254

)

 

$

(253

)

 

$

(253

)

 

$

(256

)

 

$

(760

)

 

$

(741

)

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

 

 

 

 

 

 

875

 

 

 

 

Payments on line of credit

 

 

(425

)

 

 

(245

)

 

 

(190

)

 

 

 

 

 

(860

)

 

 

 

Payments on debt held by variable interest entities

 

 

 

 

 

 

 

 

(302

)

 

 

 

 

 

(302

)

 

 

 

Proceeds from exercise of stock options

 

 

2

 

 

 

2

 

 

 

4

 

 

 

4

 

 

 

8

 

 

 

52

 

Repurchases of common shares

 

 

(60

)

 

 

 

 

 

 

 

 

(273

)

 

 

(60

)

 

 

(273

)

Other

 

 

(8

)

 

 

(4

)

 

 

(3

)

 

 

 

 

 

(15

)

 

 

(8

)

Net cash from financing activities

 

$

(273

)

 

$

(360

)

 

$

(254

)

 

$

(525

)

 

$

(887

)

 

$

(1,032

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

$

(75

)

 

$

(47

)

 

$

(59

)

 

$

(553

)

 

$

(181

)

 

$

(476

)

Cash and cash equivalents at beginning of period

 

 

334

 

 

 

259

 

 

 

212

 

 

 

901

 

 

 

334

 

 

 

824

 

Cash and cash equivalents at end of period

 

$

259

 

 

$

212

 

 

$

153

 

 

$

348

 

 

$

153

 

 

$

348

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest, net of amount capitalized

 

$

127

 

 

$

59

 

 

$

124

 

 

$

113

 

 

$

310

 

 

$

285

 

Income taxes

 

$

50

 

 

$

1

 

 

$

(5

)

 

$

22

 

 

$

46

 

 

$

80

 

 

Page 4 of 8

 


 

Weyerhaeuser Company

Timberlands Segment

Q3.2019 Analyst Package

Preliminary results (unaudited)

 

Segment Statement of Operations (1)

 

in millions

 

Q1.2019

 

 

Q2.2019

 

 

Q3.2019

 

 

Q3.2018

 

 

YTD.2019

 

 

YTD.2018

 

Sales to unaffiliated customers

 

$

431

 

 

$

401

 

 

$

398

 

 

$

459

 

 

$

1,230

 

 

$

1,425

 

Intersegment sales

 

 

125

 

 

 

131

 

 

 

125

 

 

 

128

 

 

 

381

 

 

 

409

 

Total net sales

 

 

556

 

 

 

532

 

 

 

523

 

 

 

587

 

 

 

1,611

 

 

 

1,834

 

Costs of sales

 

 

413

 

 

 

405

 

 

 

429

 

 

 

436

 

 

 

1,247

 

 

 

1,289

 

Gross margin

 

 

143

 

 

 

127

 

 

 

94

 

 

 

151

 

 

 

364

 

 

 

545

 

Selling expenses

 

 

1

 

 

 

 

 

 

 

 

 

1

 

 

 

1

 

 

 

2

 

General and administrative expenses

 

 

22

 

 

 

25

 

 

 

24

 

 

 

23

 

 

 

71

 

 

 

69

 

Research and development expenses

 

 

1

 

 

 

1

 

 

 

1

 

 

 

2

 

 

 

3

 

 

 

5

 

Other operating income, net

 

 

(1

)

 

 

(1

)

 

 

(3

)

 

 

(1

)

 

 

(5

)

 

 

(7

)

Operating income and Net contribution to earnings

 

$

120

 

 

$

102

 

 

$

72

 

 

$

126

 

 

$

294

 

 

$

476

 

 

(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

 

 

Q3.2018

 

 

YTD.2019

 

 

YTD.2018

 

Operating income

 

$

120

 

 

$

102

 

 

$

72

 

 

$

126

 

 

$

294

 

 

$

476

 

Depreciation, depletion and amortization

 

 

73

 

 

 

73

 

 

 

82

 

 

 

80

 

 

 

228

 

 

 

238

 

Adjusted EBITDA(2)

 

$

193

 

 

$

175

 

 

$

154

 

 

$

206

 

 

$

522

 

 

$

714

 

 

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

 

Selected Segment Items

 

in millions

 

Q1.2019

 

 

Q2.2019

 

 

Q3.2019

 

 

Q3.2018

 

 

YTD.2019

 

 

YTD.2018

 

Total decrease (increase) in working capital(3)

 

$

(24

)

 

$

46

 

 

$

2

 

 

$

(32

)

 

$

24

 

 

$

(2

)

Cash spent for capital expenditures

 

$

(26

)

 

$

(25

)

 

$

(28

)

 

$

(25

)

 

$

(79

)

 

$

(82

)

 

(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

 

 

Q3.2018

 

 

YTD.2019

 

 

YTD.2018

 

Third Party

 

Delivered logs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

West

 

$

205

 

 

$

194

 

 

$

172

 

 

$

238

 

 

$

571

 

 

$

766

 

(millions)

 

South

 

 

159

 

 

 

156

 

 

 

168

 

 

 

157

 

 

 

483

 

 

 

472

 

 

 

North

 

 

29

 

 

 

17

 

 

 

24

 

 

 

25

 

 

 

70

 

 

 

70

 

 

 

Total delivered logs

 

 

393

 

 

 

367

 

 

 

364

 

 

 

420

 

 

 

1,124

 

 

 

1,308

 

 

 

Stumpage and pay-as-cut timber

 

 

9

 

 

 

10

 

 

 

10

 

 

 

13

 

 

 

29

 

 

 

39

 

 

 

Recreational and other lease revenue

 

 

15

 

 

 

15

 

 

 

15

 

 

 

16

 

 

 

45

 

 

 

44

 

 

 

Other revenue

 

 

14

 

 

 

9

 

 

 

9

 

 

 

10

 

 

 

32

 

 

 

34

 

 

 

Total

 

$

431

 

 

$

401

 

 

$

398

 

 

$

459

 

 

$

1,230

 

 

$

1,425

 

Delivered Logs

 

West

 

$

106.92

 

 

$

104.07

 

 

$

99.07

 

 

$

125.67

 

 

$

103.50

 

 

$

129.91

 

Third Party Sales

 

South

 

$

35.35

 

 

$

35.45

 

 

$

35.03

 

 

$

34.88

 

 

$

35.27

 

 

$

34.75

 

Realizations (per ton)

 

North

 

$

59.68

 

 

$

62.10

 

 

$

57.35

 

 

$

60.97

 

 

$

59.37

 

 

$

62.00

 

Delivered Logs

 

West

 

 

1,920

 

 

 

1,864

 

 

 

1,729

 

 

 

1,897

 

 

 

5,513

 

 

 

5,900

 

Third Party Sales

 

South

 

 

4,499

 

 

 

4,400

 

 

 

4,795

 

 

 

4,521

 

 

 

13,694

 

 

 

13,591

 

Volumes (tons, thousands)

 

North

 

 

494

 

 

 

263

 

 

 

429

 

 

 

414

 

 

 

1,186

 

 

 

1,131

 

Fee Harvest Volumes

 

West

 

 

2,385

 

 

 

2,455

 

 

 

2,183

 

 

 

2,305

 

 

 

7,023

 

 

 

7,108

 

(tons, thousands)

 

South

 

 

6,492

 

 

 

6,367

 

 

 

6,802

 

 

 

6,478

 

 

 

19,661

 

 

 

19,859

 

 

 

North

 

 

627

 

 

 

378

 

 

 

560

 

 

 

537

 

 

 

1,565

 

 

 

1,509

 

 

(4) Western logs are primarily transacted in MBF but are converted to ton equivalents for external reporting purposes.

 

Page 5 of 8

 


 

Weyerhaeuser Company

Real Estate, Energy & Natural Resources Segment

Q3.2019 Analyst Package

Preliminary results (unaudited)

 

Segment Statement of Operations

 

in millions

 

Q1.2019

 

 

Q2.2019

 

 

Q3.2019

 

 

Q3.2018

 

 

YTD.2019

 

 

YTD.2018

 

Net sales

 

$

118

 

 

$

81

 

 

$

69

 

 

$

96

 

 

$

268

 

 

$

205

 

Costs of sales

 

 

56

 

 

 

39

 

 

 

32

 

 

 

54

 

 

 

127

 

 

 

103

 

Gross margin

 

 

62

 

 

 

42

 

 

 

37

 

 

 

42

 

 

 

141

 

 

 

102

 

General and administrative expenses

 

 

7

 

 

 

7

 

 

 

6

 

 

 

6

 

 

 

20

 

 

 

19

 

Other operating income, net

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

 

 

 

Operating income and Net contribution to earnings

 

$

55

 

 

$

35

 

 

$

32

 

 

$

36

 

 

$

122

 

 

$

83

 

 

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(1)

 

in millions

 

Q1.2019

 

 

Q2.2019

 

 

Q3.2019

 

 

Q3.2018

 

 

YTD.2019

 

 

YTD.2018

 

Operating income

 

$

55

 

 

$

35

 

 

$

32

 

 

$

36

 

 

$

122

 

 

$

83

 

Depreciation, depletion and amortization

 

 

3

 

 

 

3

 

 

 

4

 

 

 

4

 

 

 

10

 

 

 

11

 

Basis of real estate sold

 

 

48

 

 

 

33

 

 

 

24

 

 

 

46

 

 

 

105

 

 

 

80

 

Adjusted EBITDA(1)

 

$

106

 

 

$

71

 

 

$

60

 

 

$

86

 

 

$

237

 

 

$

174

 

 

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

 

Selected Segment Items

 

in millions

 

Q1.2019

 

 

Q2.2019

 

 

Q3.2019

 

 

Q3.2018

 

 

YTD.2019

 

 

YTD.2018

 

Cash spent for capital expenditures

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

Segment Statistics

 

 

 

 

Q1.2019

 

 

Q2.2019

 

 

Q3.2019

 

 

Q3.2018

 

 

YTD.2019

 

 

YTD.2018

 

Net Sales

Real Estate

 

$

96

 

 

$

59

 

 

$

45

 

 

$

76

 

 

$

200

 

 

$

148

 

(millions)

Energy and Natural Resources

 

 

22

 

 

 

22

 

 

 

24

 

 

 

20

 

 

 

68

 

 

 

57

 

 

Total

 

$

118

 

 

$

81

 

 

$

69

 

 

$

96

 

 

$

268

 

 

$

205

 

Acres Sold

Real Estate

 

 

38,834

 

 

 

47,031

 

 

 

18,057

 

 

 

61,681

 

 

 

103,922

 

 

 

99,742

 

Price per Acre

Real Estate

 

$

2,424

 

 

$

1,063

 

 

$

2,415

 

 

$

1,209

 

 

$

1,806

 

 

$

1,452

 

Basis as a Percent of Real Estate Net Sales

Real Estate

 

 

50

%

 

 

56

%

 

 

53

%

 

 

61

%

 

 

53

%

 

 

54

%

 

 

 

Page 6 of 8

 


 

Weyerhaeuser Company

Wood Products Segment

Q3.2019 Analyst Package

Preliminary results (unaudited)

Segment Statement of Operations (1)

 

in millions

 

Q1.2019

 

 

Q2.2019

 

 

Q3.2019

 

 

Q3.2018

 

 

YTD.2019

 

 

YTD.2018

 

Net sales

 

$

1,094

 

 

$

1,210

 

 

$

1,204

 

 

$

1,355

 

 

$

3,508

 

 

$

4,210

 

Costs of sales

 

 

967

 

 

 

1,070

 

 

 

1,067

 

 

 

1,080

 

 

 

3,104

 

 

 

3,225

 

Gross margin

 

 

127

 

 

 

140

 

 

 

137

 

 

 

275

 

 

 

404

 

 

 

985

 

Selling expenses

 

 

19

 

 

 

20

 

 

 

20

 

 

 

18

 

 

 

59

 

 

 

61

 

General and administrative expenses

 

 

35

 

 

 

34

 

 

 

35

 

 

 

32

 

 

 

104

 

 

 

97

 

Research and development expenses

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

 

 

1

 

Product remediation recoveries, net

 

 

 

 

 

 

 

 

(68

)

 

 

 

 

 

(68

)

 

 

 

Other operating costs, net

 

 

4

 

 

 

4

 

 

 

7

 

 

 

12

 

 

 

15

 

 

 

14

 

Operating income and Net contribution to earnings

 

$

69

 

 

$

81

 

 

$

143

 

 

$

213

 

 

$

293

 

 

$

812

 

 

(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

 

 

Q3.2018

 

 

YTD.2019

 

 

YTD.2018

 

Operating income

 

$

69

 

 

$

81

 

 

$

143

 

 

$

213

 

 

$

293

 

 

$

812

 

Depreciation, depletion and amortization

 

 

46

 

 

 

47

 

 

 

48

 

 

 

37

 

 

 

141

 

 

 

109

 

Special items

 

 

 

 

 

 

 

 

(68

)

 

 

 

 

 

(68

)

 

 

 

Adjusted EBITDA(2)

 

$

115

 

 

$

128

 

 

$

123

 

 

$

250

 

 

$

366

 

 

$

921

 

 

(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

 

 

Q3.2018

 

 

YTD.2019

 

 

YTD.2018

 

Product remediation recoveries, net

 

$

 

 

$

 

 

$

68

 

 

$

 

 

$

68

 

 

$

 

 

 

Selected Segment Items

 

in millions

 

Q1.2019

 

 

Q2.2019

 

 

Q3.2019

 

 

Q3.2018

 

 

YTD.2019

 

 

YTD.2018

 

Total decrease (increase) in working capital(3)

 

$

(155

)

 

$

75

 

 

$

32

 

 

$

71

 

 

$

(48

)

 

$

(152

)

Cash spent for capital expenditures

 

$

(30

)

 

$

(53

)

 

$

(65

)

 

$

(79

)

 

$

(148

)

 

$

(199

)

 

(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

 

 

Q3.2018

 

 

YTD.2019

 

 

YTD.2018

 

Structural Lumber

Third party net sales

 

$

444

 

 

$

495

 

 

$

487

 

 

$

581

 

 

$

1,426

 

 

$

1,831

 

(volumes presented

Third party sales realizations

 

$

392

 

 

$

388

 

 

$

389

 

 

$

491

 

 

$

390

 

 

$

511

 

in board feet)

Third party sales volumes(4)

 

 

1,133

 

 

 

1,274

 

 

 

1,253

 

 

 

1,184

 

 

 

3,660

 

 

 

3,585

 

 

Production volumes

 

 

1,145

 

 

 

1,193

 

 

 

1,189

 

 

 

1,106

 

 

 

3,527

 

 

 

3,446

 

Engineered Solid

Third party net sales

 

$

116

 

 

$

134

 

 

$

138

 

 

$

132

 

 

$

388

 

 

$

400

 

Section

Third party sales realizations

 

$

2,218

 

 

$

2,214

 

 

$

2,188

 

 

$

2,208

 

 

$

2,206

 

 

$

2,150

 

(volumes presented

Third party sales volumes(4)

 

 

5.2

 

 

 

6.1

 

 

 

6.3

 

 

 

6.0

 

 

 

17.6

 

 

 

18.6

 

in cubic feet)

Production volumes

 

 

5.9

 

 

 

6.0

 

 

 

5.3

 

 

 

6.3

 

 

 

17.2

 

 

 

19.0

 

Engineered

Third party net sales

 

$

70

 

 

$

86

 

 

$

90

 

 

$

91

 

 

$

246

 

 

$

261

 

I-joists

Third party sales realizations

 

$

1,709

 

 

$

1,662

 

 

$

1,665

 

 

$

1,668

 

 

$

1,676

 

 

$

1,629

 

(volumes presented

Third party sales volumes(4)

 

 

41

 

 

 

52

 

 

 

54

 

 

 

54

 

 

 

147

 

 

 

160

 

in lineal feet)

Production volumes

 

 

44

 

 

 

47

 

 

 

48

 

 

 

46

 

 

 

139

 

 

 

154

 

Oriented Strand

Third party net sales

 

$

160

 

 

$

156

 

 

$

159

 

 

$

215

 

 

$

475

 

 

$

724

 

Board

Third party sales realizations

 

$

223

 

 

$

213

 

 

$

214

 

 

$

321

 

 

$

217

 

 

$

335

 

(volumes presented

Third party sales volumes(4)

 

 

717

 

 

 

733

 

 

 

740

 

 

 

669

 

 

 

2,190

 

 

 

2,162

 

in square feet 3/8")

Production volumes

 

 

729

 

 

 

736

 

 

 

747

 

 

 

665

 

 

 

2,212

 

 

 

2,146

 

Softwood Plywood

Third party net sales

 

$

44

 

 

$

44

 

 

$

42

 

 

$

53

 

 

$

130

 

 

$

158

 

(volumes presented

Third party sales realizations

 

$

383

 

 

$

380

 

 

$

346

 

 

$

439

 

 

$

369

 

 

$

446

 

in square feet 3/8")

Third party sales volumes(4)

 

 

115

 

 

 

115

 

 

 

121

 

 

 

122

 

 

 

351

 

 

 

355

 

 

Production volumes

 

 

98

 

 

 

104

 

 

 

100

 

 

 

106

 

 

 

302

 

 

 

308

 

Medium Density

Third party net sales

 

$

38

 

 

$

45

 

 

$

44

 

 

$

48

 

 

$

127

 

 

$

138

 

Fiberboard

Third party sales realizations

 

$

846

 

 

$

833

 

 

$

831

 

 

$

828

 

 

$

836

 

 

$

835

 

(volumes presented

Third party sales volumes(4)

 

 

44

 

 

 

55

 

 

 

53

 

 

 

59

 

 

 

152

 

 

 

165

 

in square feet 3/4")

Production volumes

 

 

45

 

 

 

61

 

 

 

47

 

 

 

61

 

 

 

153

 

 

 

168

 

 

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

 

Page 7 of 8

 


 

Weyerhaeuser Company

Unallocated Items

Q3.2019 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.

 

Contribution to Earnings

 

in millions

 

Q1.2019

 

 

Q2.2019

 

 

Q3.2019

 

 

Q3.2018

 

 

YTD.2019

 

 

YTD.2018

 

Unallocated corporate function and variable compensation expense

 

$

(19

)

 

$

(12

)

 

$

(19

)

 

$

(19

)

 

$

(50

)

 

$

(56

)

Liability classified share-based compensation

 

 

(4

)

 

 

 

 

 

(1

)

 

 

4

 

 

 

(5

)

 

 

2

 

Foreign exchange gain (loss)

 

 

(3

)

 

 

2

 

 

 

(1

)

 

 

(2

)

 

 

(2

)

 

 

(2

)

Elimination of intersegment profit in inventory and LIFO

 

 

(5

)

 

 

(5

)

 

 

6

 

 

 

 

 

 

(4

)

 

 

(18

)

Other, net

 

 

(39

)

 

 

(17

)

 

 

(30

)

 

 

(21

)

 

 

(86

)

 

 

(80

)

Operating income (loss)

 

 

(70

)

 

 

(32

)

 

 

(45

)

 

 

(38

)

 

 

(147

)

 

 

(154

)

Non-operating pension and other postretirement benefit costs

 

 

(470

)

 

 

(10

)

 

 

(15

)

 

 

(17

)

 

 

(495

)

 

 

(54

)

Interest income and other

 

 

10

 

 

 

6

 

 

 

6

 

 

 

13

 

 

 

22

 

 

 

36

 

Net contribution to earnings (loss)

 

$

(530

)

 

$

(36

)

 

$

(54

)

 

$

(42

)

 

$

(620

)

 

$

(172

)

 

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(1)

 

in millions

 

Q1.2019

 

 

Q2.2019

 

 

Q3.2019

 

 

Q3.2018

 

 

YTD.2019

 

 

YTD.2018

 

Operating income (loss)

 

$

(70

)

 

$

(32

)

 

$

(45

)

 

$

(38

)

 

$

(147

)

 

$

(154

)

Depreciation, depletion and amortization

 

 

1

 

 

 

1

 

 

 

1

 

 

 

1

 

 

 

3

 

 

 

3

 

Special items

 

 

20

 

 

 

 

 

 

15

 

 

 

 

 

 

35

 

 

 

28

 

Adjusted EBITDA(1)

 

$

(49

)

 

$

(31

)

 

$

(29

)

 

$

(37

)

 

$

(109

)

 

$

(123

)

 

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

 

Unallocated Special Items Included in Net Contribution to Earnings (Pretax)

 

in millions

 

Q1.2019

 

 

Q2.2019

 

 

Q3.2019

 

 

Q3.2018

 

 

YTD.2019

 

 

YTD.2018

 

Environmental remediation insurance charge

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

(28

)

Legal charges

 

 

(20

)

 

 

 

 

 

(15

)

 

 

 

 

 

(35

)

 

 

Special items included in operating income (loss)

 

 

(20

)

 

 

 

 

 

(15

)

 

 

 

 

 

(35

)

 

 

(28

)

Pension settlement charges(2)

 

 

(455

)

 

 

6

 

 

 

 

 

 

 

 

 

(449

)

 

 

Special items included in net contribution to earnings (loss)

 

$

(475

)

 

$

6

 

 

$

(15

)

 

$

 

 

$

(484

)

 

$

(28

)

 

(2) During first quarter 2019, we recorded a $455 million pretax noncash settlement charge related to the transfer of pension assets and liabilities through the purchase of a group annuity contract. This charge was updated based on final pension asset and liability amounts during second quarter 2019, resulting in a $6 million pretax benefit for the quarter and a net $449 million pretax charge for year-to-date 2019.

 

Unallocated Selected Items

 

in millions

 

Q1.2019

 

 

Q2.2019

 

 

Q3.2019

 

 

Q3.2018

 

 

YTD.2019

 

 

YTD.2018

 

Cash spent for capital expenditures

 

$

(3

)

 

$

(6

)

 

$

(5

)

 

$

(1

)

 

$

(14

)

 

$

(2

)

 

Page 8 of 8