Weyerhaeuser Reports Third Quarter Results

- Net earnings rise 34 percent compared with third quarter 2012 on 23 percent improvement in net sales

- Acquisition of Longview Timber LLC closed on July 23

Oct 25, 2013, 03:05 ET from Weyerhaeuser Company

FEDERAL WAY, Wash., Oct. 25, 2013 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported net earnings to common shareholders of $157 million, or 27 cents per diluted share, for the third quarter. This compares with net earnings of $117 million, or 22 cents per diluted share, for the same period last year. Net sales for the third quarter of 2013 totaled $2.2 billion, compared with net sales of $1.8 billion for the third quarter of 2012.

(Logo:  http://photos.prnewswire.com/prnh/20120111/AQ34535LOGO)

"Solid operating results in the quarter contributed to a significant improvement in our year-over-year earnings," said Doyle Simons, president and chief executive officer. "In the quarter, we also closed on our previously announced acquisition of Longview Timber and are actively engaged in leveraging our silviculture, logistics and marketing expertise to realize the full potential of this valuable asset. We will continue to focus on improving performance in all of our businesses and generating additional value for our shareholders."

WEYERHAEUSER FINANCIAL HIGHLIGHTS

2013

2013

2012

(millions, except per share data)

2Q

3Q

3Q

Net sales

$2,141

$2,181

$1,772

Net earnings attributable to Weyerhaeuser common shareholders

$196

$157

$117

Weighted average shares outstanding, diluted(1)

558

587

542

Earnings per diluted share

$0.35

$0.27

$0.22

Net cash from operations

$374

$343

$122

Net change in cash and cash equivalents(2)

$1,723

($965)

($253)

Cash and cash equivalents at end of period(2)

$2,362

$1,397

$608

(1) 

Weyerhaeuser's common shares outstanding increased to approximately 578 million basic shares, or 583 million shares on a diluted basis, during the second quarter of 2013 following the issuance of 29 million common shares in conjunction with the acquisition of Longview Timber LLC. The company also issued 13.8 million mandatory convertible preference shares. During the third quarter of 2013, the company issued an additional 4.35 million common shares in connection with the exercise of an overallotment option.

(2) 

During the second and third quarters of 2013, Weyerhaeuser received $2,060 million from the issuance of debt and common and mandatory convertible preference shares related to the acquisition of Longview Timber LLC. These funds are recorded as "Cash and cash equivalents designated for purchase of Longview Timber LLC and the repayment of their acquired debt" on the Consolidated Balance Sheet. During the third quarter of 2013, the company used a portion of these funds to complete the acquisition of Longview Timber LLC. Subsequent to the end of the third quarter, the company used the remaining funds for repayment of Longview Timber indebtedness assumed in the acquisition.

TIMBERLANDS

FINANCIAL HIGHLIGHTS (millions)

2Q 2013

3Q 2013

Change

Net sales to unaffiliated customers

$333

$353

$20

Intersegment sales

166

194

28

Total net sales

$499

$547

$48

Contribution to earnings

$114

$118

$4

3Q 2013 Performance – Seasonally lower earnings from the company's legacy Western timberlands were largely offset by a partial quarter of earnings from the Longview Timber acquisition and improved earnings from Southern timberlands. Earnings from disposition of non-strategic timberlands also increased.

In the West, selling prices declined across domestic and export markets, and road and silviculture expenses increased. Seasonally lower fee harvest from legacy Western timberlands was more than offset by a partial quarter of harvest from the Longview Timber acquisition. Southern log realizations were comparable to the second quarter, and fee harvest volumes rose seasonally.

4Q 2013 Outlook - Weyerhaeuser anticipates comparable earnings from the Timberlands segment in the fourth quarter. In the West, the company expects improved domestic log prices and increased fee harvest volumes due to a full quarter of harvest from the Longview Timber acquisition. In the South, Weyerhaeuser anticipates seasonally higher silviculture costs, partially offset by increased fee harvest volumes. The company also expects slightly lower earnings from disposition of non-strategic timberlands.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS (millions)

2Q 2013

3Q 2013

Change

Net sales to unaffiliated customers

$1,065

$1,030

($35)

Intersegment sales

18

19

1

Total net sales

$1,083

$1,049

($34)

Contribution to earnings

$136

$79

($57)

3Q 2013 Performance - Average selling prices for oriented strand board declined 26 percent compared with the second quarter, and selling prices for lumber fell 7 percent. These declines were partially offset by improved average selling prices for engineered wood products, higher sales volumes across all product lines, and lower Western log costs.

4Q 2013 Outlook - Weyerhaeuser anticipates lower earnings from the Wood Products segment in the fourth quarter due to seasonally weaker sales volumes and higher log costs.

CELLULOSE FIBERS

FINANCIAL HIGHLIGHTS (millions)

2Q 2013

3Q 2013

Change

Net sales

$476

$474

($2)

Contribution to earnings

$57

$47

($10)

3Q 2013 Performance - Costs associated with completion of a scheduled annual maintenance outage for liquid packaging operations were higher than anticipated. Fiber costs rose due to wet weather in the South, and chemical costs also increased. These factors more than offset a slight improvement in average pulp price realizations due to mix.

4Q 2013 Outlook - Weyerhaeuser expects significantly higher earnings from the Cellulose Fibers segment in the fourth quarter. The company anticipates modestly higher average pulp sales realizations and volumes, lower chemical costs, improved productivity for liquid packaging operations, and slightly lower maintenance expense.

REAL ESTATE

FINANCIAL HIGHLIGHTS (millions)

2Q 2013

3Q 2013

Change

Net sales

$267

$324

$57

Contribution to earnings

$14

$33

$19

3Q 2013 Performance - Home closings increased seasonally to 768 single-family homes and average margins on homes closed improved, primarily due to mix. Third quarter results include earnings of $9 million from land and lot sales, compared with earnings of $2 million in the second quarter.

At the end of the third quarter the backlog of homes sold, but not closed, totaled 1,435 units, compared with 1,055 units one year ago.

4Q 2013 Outlook - Weyerhaeuser expects significantly higher earnings from single-family homebuilding in the fourth quarter. Single-family closing volumes should increase to over 1,100 homes. The company anticipates higher average closing prices and higher selling-related expenses due to the additional closing volumes.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control nearly 7 million acres of timberlands, primarily in the U.S., and manage another 14 million acres 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 and cellulose fibers products, and we develop real estate, primarily as a builder of single-family homes. Our company is a real estate investment trust. In 2012, we generated $7.1 billion in sales and employed approximately 13,200 people who serve customers worldwide. We are listed on the Dow Jones World Sustainability Index. Our common stock trades on the New York Stock Exchange under the symbol WY.

EARNINGS CALL INFORMATION

Weyerhaeuser will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on Oct. 25 to discuss third quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on Oct. 25.

To join the conference call from within North America, dial 877-296-9413 (access code – 86490025) at least 15 minutes prior to the call. Those calling from outside North America should dial 706-679-2458 (access code – 86490025). Replays will be available for two weeks at 855-859-2056 (access code – 86490025) from within North America and at 404-537-3406 (access code – 86490025) 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. These statements are based on various assumptions and may not be accurate because of risks and uncertainties surrounding these assumptions. Factors listed below, as well as other factors, may cause actual results to differ significantly from these forward-looking statements. There is no guarantee that any of the events anticipated by these forward-looking statements will occur. If any of the events occur, there is no guarantee what effect they will have on company operations or financial condition. The company will not update these forward-looking statements after the date of this news release.

Some forward-looking statements discuss the company's plans, strategies and intentions. They use words such as "expects," "may," "will," "believes," "should," "approximately," "anticipates," "estimates," and "plans."  In addition, these words may use the positive or negative or other variations of those terms.

This release contains forward-looking statements regarding the company's expectations during the fourth quarter of 2013, including with respect to earnings, domestic and export log prices, fee harvest levels and realizations, silviculture costs, dispositions of non-strategic timberlands, average selling prices and sales volumes across the Wood Products product lines, average sales realizations and volumes for pulp and liquid packaging board, chemical and maintenance costs, productivity for liquid packaging operations, single-family closing volumes, average home closing prices and mix, and selling-related expenses.

Major risks, uncertainties and assumptions that affect the company's businesses and may cause actual results to differ from these forward-looking statements, include, but are not limited to:

  • the effect of general economic conditions, including employment rates, housing starts, interest rate levels, availability of financing for home mortgages, and strength of the U.S. dollar;
  • market demand for the company's products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions;
  • performance of the company's manufacturing operations, including maintenance requirements;
  • the level of competition from domestic and foreign producers;
  • the successful execution of internal performance plans, including restructurings and cost reduction initiatives;
  • raw material prices;
  • energy prices;
  • the effect of weather;
  • the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;
  • transportation 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 company stock on charges for stock-based compensation;
  • changes in accounting principles; and
  • other factors described under "Risk Factors" in the Company's annual report on Form 10-K and quarterly reports on Form 10-Q.

The company also is a large exporter and is affected by changes in economic activity in Europe and Asia, particularly Japan and China. It is affected by changes in currency exchange rates, particularly the relative value of the U.S. dollar to the euro and the Canadian dollar, and the relative value of the euro and the yen. Restrictions on international trade or tariffs imposed on imports also may affect the company.

For more information contact: Analysts - Kathryn McAuley (253) 924-2058 Media - Anthony Chavez (253) 924-7148

Exhibit 99.2

Weyerhaeuser Company

Q3.2013 Analyst Package

Preliminary results, subject to audit

Consolidated Statement of Operations

in millions

Q2

Q3

Year-to-date

June 30,

2013

September 30,

2013

September 30,

2012

September 30,

2013

September 30,

2012

Net Sales

$    2,141

$   2,181

$   1,772

$   6,273

$   5,059

Cost of products sold

1,664

1,728

1,424

4,925

4,230

Gross margin

477

453

348

1,348

829

Selling expenses

54

56

49

161

138

General and administrative expenses

108

112

107

338

310

Research and development expenses

8

8

8

23

23

Charges for restructuring, closures and impairments

6

2

10

12

26

Other operating income, net

(10)

(2)

(28)

(30)

(147)

Operating income

311

277

202

844

479

Interest income and other

10

21

15

42

38

Interest expense, net of capitalized interest

(81)

(95)

(87)

(258)

(260)

Earnings before income taxes

240

203

130

628

257

Income taxes

(42)

(36)

(13)

(119)

(15)

Net earnings

198

167

117

509

242

Dividends on preference shares

(2)

(10)

(12)

Net earnings attributable to Weyerhaeuser common shareholders

$        196

$      157

$      117

$      497

$      242

Per Share Information

Q2

Q3

Year-to-date

June 30,

2013

September 30,

2013

September 30,

2012

September 30,

2013

September 30,

2012

Basic earnings per share attributable to Weyerhaeuser common shareholders

$        0.35

$       0.27

$       0.22

$       0.89

$       0.45

Diluted earnings per share attributable to Weyerhaeuser common shareholders

$        0.35

$       0.27

$       0.22

$       0.88

$       0.45

Dividends paid per common share

$        0.20

$       0.22

$       0.15

$       0.59

$       0.45

Weighted average shares outstanding (in thousands):

Basic

552,855

582,828

539,094

560,505

538,146

Diluted

557,588

587,179

542,311

565,383

540,694

Common shares outstanding at end of period (in thousands)

577,874

582,578

540,672

582,578

540,672

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*

in millions

Q2

Q3

Year-to-date

June 30,

2013

September 30,

2013

September 30,

2012

September 30,

2013

September 30,

2012

Net earnings

$         198

$        167

$        117

$        509

$        242

Interest income and other

(10)

(21)

(15)

(42)

(38)

Interest expense, net of capitalized interest

81

95

87

258

260

Income taxes

42

36

13

119

15

Operating income

311

277

202

844

479

Depreciation, depletion and amortization

111

120

112

343

338

Non-operating pension and postretirement costs

10

11

7

31

21

Special items

(95)

Capitalized interest included in cost of products sold

13

10

6

32

28

Adjusted EBITDA, excluding special items*

$        445

$      418

$      327

$   1,250

$      771

* Non-GAAP measure

Weyerhaeuser Company

Q3.2013 Analyst Package

Preliminary results, subject to audit

Consolidated Balance Sheet

in millions

June 30,

2013

September 30,

2013

December 31,

2012

ASSETS

Forest Products:

Current assets:

    Cash and cash equivalents

$        908

$               898

$             893

    Receivables, less allowances

589

586

474

    Receivables for taxes

43

31

95

    Inventories

561

533

531

    Prepaid expenses

96

114

83

    Deferred tax assets

144

113

65

    Restricted financial investments held by variable interest entities

184

        Total current assets

2,341

2,275

2,325

Property and equipment, net

2,706

2,709

2,859

Construction in progress

72

101

50

Timber and timberlands at cost, less depletion charged to disposals

3,949

6,603

3,961

Cash and cash equivalents designated for the purchase of Longview Timber LLC and the repayment of their acquired debt

1,450

494

Investments in and advances to equity affiliates

186

186

192

Goodwill

42

42

40

Deferred tax assets

64

66

189

Other assets

349

325

358

Restricted financial investments held by variable interest entities

615

615

615

11,774

13,416

10,589

Real Estate:

Cash and cash equivalents

4

5

5

Receivables, less allowances

74

77

72

Real estate in process of development and for sale

783

851

682

Land being processed for development

940

932

927

Investments in and advances to equity affiliates

20

20

21

Deferred tax assets

201

195

202

Other assets

112

113

94

2,134

2,193

2,003

Total assets

$ 13,908

$        15,609

$      12,592

LIABILITIES AND EQUITY

Forest Products:

Current liabilities:

    Notes payable

$            2

$                   2

$               —

    Current maturities of long-term debt

163

340

    Current maturities of long-term debt (nonrecourse to the company) held by variable interest entities

161

    Accounts payable

341

362

329

    Accrued liabilities

573

623

570

        Total current liabilities

1,079

987

1,400

Long-term debt

3,842

5,459

3,842

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

511

511

511

Deferred income taxes

38

44

Deferred pension and other postretirement benefits

1,785

1,727

1,930

Other liabilities

446

438

499

7,701

9,166

8,182

Real Estate:

Long-term debt

109

109

109

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

4

5

1

Other liabilities

188

212

187

301

326

297

Total liabilities

8,002

9,492

8,479

Equity:

Total Weyerhaeuser shareholders' interest

5,868

6,078

4,070

Noncontrolling interests

38

39

43

Total equity

5,906

6,117

4,113

Total liabilities and equity

$ 13,908

$        15,609

$      12,592

Weyerhaeuser Company

Q3.2013 Analyst Package

Preliminary results, subject to audit

Consolidated Statement of Cash Flows

in millions

Q2

Q3

Year-to-date

June 30,

2013

September 30,

2013

September 30,

2012

September 30,

2013

September 30,

2012

Cash flows from operations:

Net earnings

$    198

$            167

$            117

$             509

$            242

Noncash charges (credits) to income:

    Depreciation, depletion and amortization

111

120

112

343

338

    Deferred income taxes, net

23

24

62

73

69

    Pension and other postretirement benefits

28

27

19

79

(39)

    Share-based compensation expense

10

12

10

34

28

    Charges for impairment of assets

2

2

7

5

19

    Net gains on dispositions of assets

(14)

(21)

(22)

(42)

(39)

    Foreign exchange transaction (gains) losses

4

(2)

(10)

6

(8)

Change in:

    Receivables less allowances

45

8

(10)

(112)

(33)

    Receivable for taxes

22

12

(91)

64

(75)

    Inventories

32

36

(22)

(34)

    Real estate and land

(62)

(58)

(47)

(179)

(95)

    Prepaid expenses

(1)

(2)

2

(16)

(18)

    Accounts payable and accrued liabilities

34

77

14

45

23

    Deposits on land positions and other assets

(9)

(1)

(11)

(11)

11

Pension and postretirement contributions

(32)

(35)

(41)

(104)

(109)

Other

(17)

(23)

33

(38)

49

Net cash from operations

374

343

122

656

329

Cash flows from investing activities:

Property and equipment

(47)

(69)

(75)

(151)

(197)

Timberlands reforestation

(8)

(7)

(5)

(28)

(22)

Acquisition of Longview Timber LLC, net of cash acquired

(1,581)

(1,581)

Proceeds from sale of assets

8

1

12

15

36

Proceeds of investments (payments of liabilities) held by special purpose entities

22

(97)

22

(97)

Other

(4)

9

(1)

5

(1)

Cash from investing activities

(29)

(1,647)

(166)

(1,718)

(281)

Cash flows from financing activities:

Net proceeds from issuance of common shares(1)

781

116

897

Net proceeds from issuance of preference shares(1)

669

669

Net proceeds from issuance of debt(1)

494

494

Cash dividends on common shares

(109)

(128)

(81)

(330)

(242)

Change in book overdrafts

4

1

(12)

8

(32)

Payments on debt

(21)

(163)

(181)

(340)

(187)

Exercises of stock options

51

9

66

141

73

Other

3

10

(1)

22

(5)

Cash from financing activities

1,378

339

(209)

1,561

(393)

Net change in cash and cash equivalents

1,723

(965)

(253)

499

(345)

Cash and cash equivalents at beginning of period

639

2,362

861

898

953

Cash and cash equivalents at end of period

$ 2,362

$         1,397

$            608

$          1,397

$            608

Cash paid (received) during the year for:

    Interest, net of amount capitalized

$      55

$            109

$            122

$             275

$            290

    Income taxes

$      (4)

$                2

$                1

$               (4)

$             (14)

Noncash investing and financing activity: acquisition of Longview Timber LLC, debt assumed

$      —

$         1,070

$              —

$          1,070

$              —

(1)During second and third quarter 2013, we received $2,060 million in cash related to the issuance of common shares, mandatory convertible preference shares and debt related to the acquisition of Longview Timber LLC. We have recorded this cash as "Cash and cash equivalents designated for the purchase of Longview Timber LLC and the repayment of their acquired debt" on our Consolidated Balance Sheet.

Total Company Statistics

Weyerhaeuser Company

Q3.2013 Analyst Package

Preliminary results, subject to audit

Special Items Included in Net Earnings

in millions

Q2

Q3

Year-to-date

June 30,

2013

September 30,

2013

September 30,

2012

September 30,

2013

September 30,

2012

Net earnings attributable to Weyerhaeuser common shareholders

$   196

$            157

$      117

$            497

$            242

Restructuring, impairments and other charges

10

Gain on postretirement plan amendment

(67)

Tax settlements

(8)

Gain on sale of property

(4)

Net earnings attributable to Weyerhaeuser common shareholders before special items

$   196

$            157

$      117

$            497

$            173

Q2

Q3

Year-to-date

June 30,

2013

September 30,

2013

September 30,

2012

September 30,

2013

September 30,

2012

Net earnings per diluted share attributable to Weyerhaeuser common shareholders

$  0.35

$           0.27

$     0.22

$           0.88

$           0.45

Restructuring, impairments and other charges

0.02

Gain on postretirement plan amendment

(0.12)

Tax settlements

(0.02)

Gain on sale of property

(0.01)

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

$  0.35

$           0.27

$     0.22

$           0.88

$           0.32

Selected Total Company Items

in millions

Q2

Q3

Year-to-date

June 30,

2013

September 30,

2013

September 30,

2012

September 30,

2013

September 30,

2012

Depreciation, depletion and amortization:

Cost of products sold

$    102

$             110

$       102

$             315

$             307

Selling, general and administrative expenses

9

10

10

28

31

Total depreciation, depletion and amortization

$    111

$             120

$       112

$             343

$             338

Pension and postretirement costs:

Pension and postretirement costs allocated to business segments

$      16

$               16

$         12

$               46

$               39

Pension and postretirement costs not allocated

10

11

7

31

21

Total company pension and postretirement costs

$      26

$               27

$         19

$               77

$               60

Total decrease (increase) in Forest Products working capital(1)

$    161

$             138

$       (29)

$             (35)

$             (74)

Cash spent for capital expenditures

$    (55)

$             (76)

$       (80)

$           (179)

$           (219)

(1)Working capital does not include cash balances.

Weyerhaeuser Company

Timberlands Segment

Q3.2013 Analyst Package

Preliminary results, subject to audit

Segment Statement of Operations

in millions

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Sales to unaffiliated customers

$      333

$      353

$     267

$       979

$       779

Intersegment sales

166

194

162

584

498

Total net sales

499

547

429

1,563

1,277

Cost of products sold

365

407

336

1,167

1,002

Gross margin

134

140

93

396

275

Selling expenses

2

3

3

8

7

General and administrative expenses

25

27

21

77

65

Research and development expenses

5

4

4

13

13

Charges for restructuring, closures and impairments

2

Other operating income, net

(11)

(11)

(14)

(37)

(35)

Operating income

113

117

79

333

225

Interest income and other

1

1

1

3

2

Net contribution to earnings

$     114

$     118

$      80

$     336

$     227

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*

in millions

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Operating income

$     113

$     117

$      79

$     333

$     225

Depreciation, depletion and amortization

34

45

35

115

104

Adjusted EBITDA, excluding special items*

$     147

$     162

$   114

$     448

$     329

* Non-GAAP measure

Selected Segment Items

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Total decrease (increase) in working capital(1)

$      (21)

$        31

$       19

$        —

$         16

Cash spent for capital expenditures

$      (18)

$      (16)

$     (17)

$       (52)

$       (44)

(1)Working capital does not include cash balances.

Segment Statistics

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Third Party

Net Sales

(millions)

Logs:

    West

$      208

$      213

$     132

$       598

$       408

    South

65

66

60

192

166

    Canada

2

6

5

15

14

Total logs

275

285

197

805

588

Pay as cut timber sales

4

2

3

7

9

Chip sales

2

2

4

7

14

Timberlands exchanges

14

28

24

44

39

Higher and better use land sales

5

2

4

10

13

Minerals, oil and gas

9

9

8

26

22

Products from international operations

22

24

26

68

80

Other products

2

1

1

12

14

Total

$      333

$      353

$     267

$       979

$       779

Logs

Third Party Sales

Realizations

(per cubic meter)

West

$ 115.11

$ 104.73

$  89.28

$  108.33

$    94.09

South

$   43.47

$   43.32

$  42.04

$    43.42

$    41.26

Canada

$   36.38

$   38.77

$  35.23

$    37.38

$    35.74

International

$   25.00

$   25.07

$  23.76

$    24.75

$    23.45

Logs

Third Party Sales

Volumes

(cubic meters,

thousands)

West

1,812

2,037

1,480

5,523

4,339

South

1,507

1,514

1,430

4,420

4,012

Canada

38

141

133

383

392

International

77

100

99

245

259

Total

3,434

3,792

3,142

10,571

9,002

Logs

Fee Harvest Volumes

(cubic meters,

thousands)

West

1,921

2,305

1,784

6,221

5,294

South

2,828

2,928

2,809

8,589

8,311

International

167

415

198

779

531

Total

4,916

5,648

4,791

15,589

14,136

Wood Products Segment

Weyerhaeuser Company

Q3.2013 Analyst Package

Preliminary results, subject to audit

Segment Statement of Operations  

in millions

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Sales to unaffiliated customers

$  1,065

$  1,030

$    816

$    3,083

$    2,226

Intersegment sales

18

19

18

55

58

Total net sales

1,083

1,049

834

3,138

2,284

Cost of products sold

884

905

713

2,559

2,032

Gross margin

199

144

121

579

252

Selling expenses

24

24

23

74

65

General and administrative expenses

36

37

31

109

89

Research and development expenses

1

2

2

4

4

Charges for restructuring, closures and impairments

1

1

2

2

5

Other operating costs (income), net

1

1

4

(3)

8

Operating income

136

79

59

393

81

Interest income and other

1

Net contribution to earnings

$   136

$      79

$     59

$     393

$        82

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*

in millions

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Operating income

$   136

$      79

$     59

$     393

$        81

Depreciation, depletion and amortization

31

31

33

93

100

Special items

(6)

Adjusted EBITDA, excluding special items*

$   167

$   110

$     92

$     486

$     175

* Non-GAAP measure

Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)  

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Gain on sale of property

$      —

$      —

$      —

$        —

$           6

Total

$      —

$      —

$     —

$        —

$          6

Selected Segment Items

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Total decrease (increase) in working capital(1)

$       75

$       74

$    (21)

$       (45)

$     (128)

Cash spent for capital expenditures

$     (16)

$     (26)

$    (16)

$       (52)

$       (37)

(1)Working capital does not include cash balances.

Segment Statistics

in millions, except for third-party sales realizations

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Structural Lumber

(board feet)

Third party net sales

$     502

$     480

$    363

$    1,433

$    1,024

Third party sales realizations

$     434

$     404

$    359

$       425

$       341

Third party sales volumes(1)

1,156

1,189

1,013

3,370

3,006

Production volumes

1,053

1,040

945

3,114

2,907

Outside purchase volumes

77

92

69

271

148

Engineered Solid

Section

(cubic feet)

Third party net sales

$       84

$       97

$      76

$       263

$       211

Third party sales realizations

$  1,920

$  1,963

$ 1,800

$    1,913

$    1,806

Third party sales volumes(1)

4.4

4.9

4.2

13.7

11.7

Production volumes

4.6

4.6

4.3

13.8

11.8

Outside purchase volumes

0.4

0.3

0.4

1.6

1.6

Engineered

I-joists

(lineal feet)

Third party net sales

$       60

$       68

$      53

$       184

$       143

Third party sales realizations

$  1,358

$  1,428

$ 1,248

$    1,364

$    1,246

Third party sales volumes(1)

44

48

43

135

115

Production volumes

42

44

39

130

110

Outside purchase volumes

1

2

3

6

7

Oriented Strand

Board

(square feet 3/8')

Third party net sales

$     224

$     188

$    169

$       648

$       418

Third party sales realizations

$     332

$     246

$    268

$       309

$       227

Third party sales volumes(1)

675

762

630

2,094

1,838

Production volumes

663

725

642

2,050

1,869

Outside purchase volumes

56

49

60

173

140

Softwood Plywood

(square feet 3/8')

Third party net sales

$       41

$       38

$      34

$       115

$         83

Third party sales realizations

$     378

$     344

$    356

$       364

$       334

Third party sales volumes(1)

108

108

95

315

249

Production volumes

63

62

54

186

155

Outside purchase volumes

33

40

39

115

93

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

Weyerhaeuser Company

Cellulose Fibers Segment

Q3.2013 Analyst Package

Preliminary results, subject to audit

Segment Statement of Operations

in millions

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Total net sales

$   476

$   474

$   459

$  1,424

$  1,391

Cost of products sold

394

406

364

1,224

1,175

Gross margin

82

68

95

200

216

Selling expenses

5

5

4

14

13

General and administrative expenses

21

21

19

62

56

Research and development expenses

2

2

2

6

6

Other operating income, net

(5)

(6)

(5)

(18)

(18)

Operating income

59

46

75

136

159

Interest income and other

(2)

1

3

(1)

3

Net contribution to earnings

$     57

$     47

$     78

$     135

$     162

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*

in millions

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Operating income

$     59

$     46

$     75

$     136

$     159

Depreciation, depletion and amortization

39

38

37

116

110

Adjusted EBITDA, excluding special items*

$     98

$     84

$   112

$     252

$     269

* Non-GAAP measure

Selected Segment Items

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Total decrease (increase) in working capital(1)

$      12

$      19

$    (20)

$         24

$         49

Cash spent for capital expenditures

$    (17)

$    (28)

$    (45)

$       (62)

$     (134)

(1)Working capital does not include cash balances.

Segment Statistics

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Pulp

(air-dry  metric

tons)

Third party net sales (millions)

$    369

$    371

$    354

$    1,111

$    1,069

Third party sales realizations

$    797

$    805

$    818

$       799

$       818

Third party sales volumes (thousands)

462

460

432

1,389

1,306

Production volumes (thousands)

463

457

453

1,365

1,308

Liquid

Packaging

Board

(tons)

Third party net sales (millions)

$      86

$      83

$      84

$       254

$       257

Third party sales realizations

$ 1,079

$ 1,082

$ 1,155

$    1,080

$    1,171

Third party sales volumes (thousands)

81

76

74

235

220

Production volumes (thousands)

77

67

77

222

220

Weyerhaeuser Company

Real Estate Segment

Q3.2013 Analyst Package

Preliminary results, subject to audit

Segment Statement of Operations

in millions

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Total net sales

$   267

$   324

$   230

$     787

$     663

Cost of products sold

210

248

175

618

536

Gross margin

57

76

55

169

127

Selling expenses

23

24

19

65

53

General and administrative expenses

19

20

17

57

49

Charges for restructuring, closures and impairments

3

1

3

5

5

Other operating income, net

(1)

(1)

(2)

(1)

Operating income

13

32

16

44

21

Interest income and other

1

1

1

3

3

Net contribution to earnings

$     14

$     33

$     17

$        47

$       24

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*

in millions

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Operating income

$     13

$     32

$     16

$        44

$       21

Depreciation, depletion and amortization

3

4

3

10

8

Capitalized interest included in cost of products sold

12

9

5

28

22

Adjusted EBITDA, excluding special items*

$     28

$     45

$     24

$        82

$       51

* Non-GAAP measure

Selected Segment Items

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Cash from operations

$    (56)

$      (2)

$    (24)

$     (129)

$       (13)

Cash spent for capital expenditures

$      (2)

$      (5)

$      (1)

$         (9)

$         (2)

Segment Statistics

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Net sales:

Single-family housing

$    257

$    305

$    229

$       745

$      550

Land

10

18

1

39

109

Other

1

3

4

Total net sales

$    267

$    324

$    230

$       787

$      663

Single-family homes sold

943

765

637

2,528

2,098

Single-family homes closed

636

768

615

1,867

1,472

Single-family homes sold but not closed (backlog)

1,438

1,435

1,055

1,435

1,055

Single-family cancellation rate

14.6 %

15.7 %

18.3 %

14.2 %

14.6 %

Single-family buyer traffic

20,080

16,370

17,894

54,214

49,843

Single-family average price of homes closed (in thousands)

$   405

$   397

$   372

$      399

$     374

Single-family gross margin(1)

21.6 %

22.3 %

23.3 %

21.4 %

20.5 %

(1)Single-family gross margin equals revenue less cost of sales and period costs.

Weyerhaeuser Company

Unallocated Items

Q3.2013 Analyst Package

Preliminary results, subject to audit

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 and the elimination of intersegment profit in inventory and the LIFO reserve.

Contribution to Earnings

in millions

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Unallocated corporate function expenses

$      (3)

$      (2)

$      (5)

$         (8)

$       (14)

Unallocated share-based compensation

5

(1)

(7)

(3)

(13)

Unallocated pension & postretirement costs

(10)

(11)

(7)

(31)

(21)

Foreign exchange gains (losses)

(4)

2

11

(6)

9

Elimination of intersegment profit in inventory and LIFO

8

25

(10)

9

(24)

Other

(6)

(10)

(9)

(23)

56

Operating income (loss)

(10)

3

(27)

(62)

(7)

Interest income and other

10

18

10

37

29

Net contribution to earnings

$     —

$     21

$   (17)

$      (25)

$        22

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*

in millions

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Operating income (loss)

$   (10)

$       3

$   (27)

$      (62)

$        (7)

Depreciation, depletion and amortization

4

2

4

9

16

Non-operating pension and postretirement costs

10

11

7

31

21

Special items

(89)

Capitalized interest included in cost of products sold

1

1

1

4

6

Adjusted EBITDA, excluding special items*

$       5

$     17

$   (15)

$      (18)

$      (53)

* Non-GAAP measure - see below for definition.

Unallocated Special Items Included in Net Contribution to Earnings (Pre-Tax)

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Gain on postretirement plan amendment

$      —

$      —

$      —

$        —

$       103

Restructuring, impairments and other charges

(14)

Total

$     —

$     —

$     —

$        —

$        89

Unallocated Selected Items

Q2.2013

Q3.2013

Q3.2012

YTD.2013

YTD.2012

Total decrease (increase) in working capital(1)

$      95

$      14

$      (7)

$       (14)

$       (11)

Cash spent for capital expenditures

$      (2)

$      (1)

$      (1)

$         (4)

$         (2)

(1)Working capital does not include cash balances.

*Adjusted EBITDA excluding special items is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA excluding special items, as we define it, is operating income adjusted for depreciation, depletion, amortization, special items and interest included in cost of products sold. Adjusted EBITDA excluding special items should not be considered in isolation from and is not intended to represent an alternative to our results computed under GAAP.

SOURCE Weyerhaeuser Company



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http://www.weyerhaeuser.com