Weyerhaeuser Reports Third Quarter Results

- 35 percent increase in earnings compared with second quarter

- Increased quarterly dividend 7 percent

- Completed $700 million share repurchase program announced in 2014, authorized new $500 million program

30 Oct, 2015, 03:05 ET from Weyerhaeuser Company

FEDERAL WAY, Wash., Oct. 30, 2015 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported third quarter net earnings to common shareholders of $180 million, or 35 cents per diluted share. This compares with net earnings of $133 million, or 26 cents per diluted share, for second quarter 2015 and net earnings from continuing operations before special items of $178 million, or 33 cents per diluted share, for the same period last year. Third quarter 2014 net earnings of $1,153 million, or $2.15 per diluted share, included after-tax gains of $975 million from discontinued operations and special items, primarily related to the divestiture of Weyerhaeuser Real Estate Company.

Net sales for the third quarter 2015 totaled $1.8 billion, compared with net sales of $1.8 billion for the second quarter, and $1.9 billion for the third quarter 2014.

"I am very pleased with our third quarter performance, as each of our businesses leveraged operational excellence improvements to drive strong results despite market and global macroeconomic headwinds," said Doyle R. Simons, president and chief executive officer. "In addition, we delivered on our ongoing commitment to return cash to shareholders by increasing our quarterly dividend by 7 percent and have completed the $700 million share repurchase authorized in 2014. We remain relentlessly focused on driving value for our shareholders and fully capitalizing on an improving US housing market."

WEYERHAEUSER FINANCIAL HIGHLIGHTS

2015

2015

2014

(millions, except per share data)

2Q

3Q

3Q

Net sales from continuing operations

$1,807

$1,820

$1,915

Net earnings attributable to Weyerhaeuser common shareholders(1)

$133

$180

$1,153

Weighted average shares outstanding, diluted

520

517

536

Earnings per diluted share

$0.26

$0.35

$2.15

Earnings per diluted share from continuing operations

$0.26

$0.35

$0.35

Net earnings from continuing operations before special items(2)

$133

$180

$178

Earnings per diluted share from continuing operations before special items

$0.26

$0.35

$0.33

Cash and cash equivalents at end of period(3)

$1,121

$1,048

$1,620

(1)

Third quarter 2014 includes net earnings from discontinued operations of $966 million, primarily related to the gain on the divestiture of Weyerhaeuser Real Estate Company.

(2)

There were no special items for the second or third quarter of 2015. Special items for the third quarter of 2014 includes gains on a postretirement plan amendment and restructuring charges related to the company's SG&A cost reduction initiative.

(3)

Cash and cash equivalents at the end of the period exclude discontinued operations.

 

TIMBERLANDS

FINANCIAL HIGHLIGHTS (millions)

2Q 2015

3Q 2015

Change

Net sales

$336

$326

($10)

Contribution to pre-tax earnings

$127

$126

($1)

3Q 2015 Performance - In the West, fee harvest volumes declined due to fire season logging constraints and log sales realizations decreased due to a shift in mix from export to domestic markets. In the South, higher fee harvest volumes were offset by seasonally higher silviculture costs. Earnings from the disposition of non-strategic timberlands increased by $8 million compared with the second quarter.

4Q 2015 Outlook - Weyerhaeuser expects comparable earnings from the Timberlands segment in the fourth quarter. In the West, the company expects slightly higher fee harvest volumes and improved mix primarily due to increased shipments to Japan. In the South, the company anticipates comparable fee harvest volumes and higher logging costs.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS (millions)

2Q 2015

3Q 2015

Change

Net sales

$1,004

$1,023

$19

Contribution to pre-tax earnings

$71

$85

$14

3Q 2015 Performance - Sales volumes increased across most product lines, Western log costs declined, and manufacturing costs improved. Higher average sales realizations for oriented strand board were more than offset by lower average sales realizations for lumber.

4Q 2015 Outlook - Weyerhaeuser expects significantly lower earnings from the Wood Products segment in the fourth quarter. The company anticipates seasonally lower sales volumes, reduced operating rates, and additional planned maintenance primarily in oriented strand board. The company also expects lower average sales realizations for lumber and higher average sales realizations for oriented strand board.

CELLULOSE FIBERS

FINANCIAL HIGHLIGHTS (millions)

2Q 2015

3Q 2015

Change

Net sales

$467

$471

$4

Contribution to pre-tax earnings

$27

$79

$52

3Q 2015 Performance - Maintenance costs decreased significantly and production increased due to minimal scheduled maintenance outage days. Input costs declined, offset by lower average sales realizations for pulp and liquid packaging board.

4Q 2015 Outlook - Weyerhaeuser expects lower earnings from the Cellulose Fibers segment in the fourth quarter.  The company anticipates lower average pulp sales realizations, increased scheduled maintenance, and seasonally higher fiber costs.

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 additional timberlands under long-term licenses in Canada. We manage these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. We are also one of the largest manufacturers of wood and cellulose fibers products. Our company is a real estate investment trust. In 2014, our continuing operations generated $7.4 billion in sales and employed approximately 12,800 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. Learn more at www.weyerhaeuser.com.

EARNINGS CALL INFORMATION  Weyerhaeuser will hold a live webcast and conference call at 7 a.m. Pacific (10 a.m. Eastern) on October 30 to discuss third quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on October 30.

To join the conference call from within North America, dial 877-296-9413 (access code: 28175672) at least 15 minutes prior to the call. Those calling from outside North America should dial 706-679-2458 (access code: 28175672). Replays will be available for one week at 855-859-2056 (access code: 28175672) from within North America and at 404-537-3406 (access code: 28175672) 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 our current expectations and various assumptions that are subject to risks and uncertainties. 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, expectations 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 and similar words.

This release contains forward-looking statements regarding the company's expectations during the fourth quarter of 2015, including with respect to: earnings; harvest and shipment volumes, and costs in Timberlands; sales volumes, operating rates, planned maintenance, and average sales realizations in Wood Products; and pulp sales realizations, fiber costs, and scheduled maintenance in Cellulose Fibers.

For more information contact: Analysts - Beth Baum or Denise Merle, 253-924-2058 Media - Anthony Chavez, 253-924-7148

 

Weyerhaeuser Company

Exhibit 99.2

Q3.2015 Analyst Package

Preliminary results (unaudited)

Consolidated Statement of Operations

in millions

Q2

Q3

Year-to-date

June 30, 2015

September 30, 2015

September 30, 2014

September 30, 2015

September 30, 2014

Net Sales

$         1,807

$              1,820

$              1,915

$              5,348

$              5,615

Cost of products sold

1,474

1,445

1,504

4,304

4,364

Gross margin

333

375

411

1,044

1,251

Selling expenses

28

27

28

83

83

General and administrative expenses

71

60

73

205

249

Research and development expenses

6

6

5

17

19

Charges for restructuring, closures and impairments

2

10

16

37

Other operating costs (income), net

(15)

21

(23)

21

(163)

Operating income

243

259

318

702

1,026

Interest income and other

2

4

7

9

27

Interest expense, net of capitalized interest

(88)

(88)

(88)

(259)

(254)

Earnings from continuing operations before income taxes

157

175

237

452

799

Income tax (expense) benefit

(13)

16

(39)

(16)

(148)

Earnings from continuing operations

144

191

198

436

651

Earnings from discontinued operations, net of income taxes

966

998

Net earnings

144

191

1,164

436

1,649

Add: net loss attributable to noncontrolling interests

Dividends on preference shares

(11)

(11)

(11)

(33)

(33)

Net earnings attributable to Weyerhaeuser common shareholders

$            133

$                  180

$              1,153

$                  403

$              1,616

Per Share Information

Q2

Q3

Year-to-date

June 30, 2015

September 30, 2015

September 30, 2014

September 30, 2015

September 30, 2014

Earnings per share attributable to Weyerhaeuser common shareholders, basic:

Continuing operations

$            0.26

$                  0.35

$                  0.35

$                  0.78

$                  1.09

Discontinued operations

1.82

1.76

Net earnings per share

$            0.26

$                  0.35

$                  2.17

$                  0.78

$                  2.85

Earnings per share attributable to Weyerhaeuser common shareholders, diluted:

Continuing operations

$            0.26

$                  0.35

$                  0.35

$                  0.77

$                  1.08

Discontinued operations

1.80

1.75

Net earnings per share

$            0.26

$                  0.35

$                  2.15

$                  0.77

$                  2.83

Dividends paid per common share

$            0.29

$                  0.31

$                  0.29

$                  0.89

$                  0.73

Weighted average shares outstanding (in thousands):

Basic

516,626

514,301

531,913

518,121

567,436

Diluted

519,804

517,088

536,012

521,455

571,503

Common shares outstanding at end of period (in thousands)

514,121

511,033

525,485

511,033

525,485

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

in millions

Q2

Q3

Year-to-date

June 30, 2015

September 30, 2015

September 30, 2014

September 30, 2015

September 30, 2014

Net earnings

$             144

$                   191

$                1,164

$                   436

$                1,649

Earnings from discontinued operations, net of income taxes

(966)

(998)

Interest income and other

(2)

(4)

(7)

(9)

(27)

Interest expense, net of capitalized interest

88

88

88

259

254

Income tax expense (benefit)

13

(16)

39

16

148

Operating income

243

259

318

702

1,026

Depreciation, depletion and amortization

118

118

123

359

368

Non-operating pension and postretirement credits

(3)

(2)

(12)

(8)

(33)

Special items

(15)

13

(103)

Adjusted EBITDA*

$            358

$                  375

$                  414

$              1,066

$              1,258

* Non-GAAP measure - see page 8 for definition.

 

Weyerhaeuser Company

Q3.2015 Analyst Package

Preliminary results (unaudited)

Consolidated Balance Sheet

in millions

June 30, 2015

September 30, 2015

December 31, 2014

ASSETS

Current assets:

Cash and cash equivalents

$              1,121

$                1,048

$               1,580

Receivables, less allowances

537

545

525

Receivables for taxes

12

14

25

Inventories

603

590

595

Prepaid expenses

82

87

80

Deferred tax assets

162

218

228

Total current assets

2,517

2,502

3,033

Property and equipment, net

2,557

2,484

2,623

Construction in progress

171

231

131

Timber and timberlands at cost, less depletion charged to disposals

6,531

6,507

6,530

Investments in and advances to equity affiliates

176

174

188

Goodwill

40

40

40

Deferred tax assets

2

8

Other assets

274

267

289

Restricted financial investments held by variable interest entities

615

615

615

Total assets

$          12,883

$            12,820

$           13,457

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$                 343

$                   344

$                  331

Accrued liabilities

576

554

587

Total current liabilities

919

898

918

Long-term debt

4,891

4,891

4,891

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

511

511

511

Deferred income taxes

196

259

206

Deferred pension and other postretirement benefits

1,166

1,106

1,319

Other liabilities

275

277

308

Total liabilities

7,958

7,942

8,153

Total equity

4,925

4,878

5,304

Total liabilities and equity

$          12,883

$            12,820

$           13,457

 

Weyerhaeuser Company

Q3.2015 Analyst Package

Preliminary results (unaudited)

Consolidated Statement of Cash Flows

in millions

Q2

Q3

Year-to-date

June 30, 2015

September 30, 2015

September 30, 2014

September 30, 2015

September 30, 2014

Cash flows from operations:

Net earnings

$        144

$                   191

$                1,164

$             436

$          1,649

Noncash charges (credits) to income:

Depreciation, depletion and amortization

118

118

123

359

375

Deferred income taxes, net

3

(6)

45

10

170

Pension and other postretirement benefits

11

11

(13)

32

(104)

Share-based compensation expense

8

6

9

22

29

Charges for impairment of assets

1

14

1

Net gains on dispositions of assets

(5)

(9)

(1,002)

(30)

(1,048)

Foreign exchange transaction (gains) losses

(8)

20

13

41

15

Change in:

Receivables less allowances

(10)

(15)

20

(41)

(28)

Receivable for taxes

12

(3)

13

11

77

Inventories

42

6

8

(9)

(46)

Real estate and land

(26)

(133)

Prepaid expenses

9

6

(2)

6

Accounts payable and accrued liabilities

66

(22)

21

(47)

(76)

Deposits on land positions and other assets

7

15

Pension and postretirement contributions

(19)

(20)

(22)

(59)

(85)

Other

(5)

4

(13)

(12)

(33)

Net cash from operations

366

282

353

725

784

Cash flows from investing activities:

Property and equipment

(99)

(106)

(105)

(276)

(239)

Timberlands reforestation

(9)

(6)

(7)

(33)

(32)

Acquisition of timberlands

(2)

(34)

Net proceeds from Real Estate Divestiture, net of cash divested

707

707

Proceeds from sale of assets

4

1

4

7

24

Other

12

25

12

25

Cash from investing activities

(92)

(113)

624

(324)

485

Cash flows from financing activities:

Net proceeds from issuance of Weyerhaeuser Real Estate Company (WRECO) debt

887

Deposit of WRECO debt proceeds into escrow

(887)

Cash dividends on common shares

(149)

(159)

(154)

(460)

(411)

Cash dividends on preference shares

(11)

(11)

(11)

(22)

(22)

Change in book overdrafts

(11)

(17)

Payments on debt

Exercises of stock options

4

4

30

29

84

Repurchase of common stock

(154)

(77)

(123)

(484)

(123)

Other

(1)

1

4

4

5

Cash from financing activities

(311)

(242)

(265)

(933)

(484)

Net change in cash and cash equivalents

(37)

(73)

712

(532)

785

Cash and cash equivalents at beginning of period

1,158

1,121

908

1,580

835

Cash and cash equivalents at end of period

$     1,121

$                1,048

$                1,620

$          1,048

$          1,620

Cash paid (received) during the year for:

Interest, net of amount capitalized

$          58

$                   118

$                   100

$             290

$             253

Income taxes

$            4

$                     (1)

$                       5

$                4

$             (40)

 

Weyerhaeuser Company

Total Company Statistics

Q3.2015 Analyst Package

Preliminary results (unaudited)

Special Items Included in Net Earnings

in millions

Q2

Q3

Year-to-date

June 30, 2015

September 30, 2015

September 30, 2014

September 30, 2015

September 30, 2014

Net earnings attributable to Weyerhaeuser common shareholders

$          133

$                  180

$              1,153

$                  403

$              1,616

Restructuring, impairments and other charges

6

9

24

Gain on sale of non-strategic asset

(14)

Gain on postretirement plan amendment

(15)

(73)

Net earnings attributable to Weyerhaeuser common shareholders before special items

133

180

1,144

412

1,553

Earnings from discontinued operations, net of income taxes

(966)

(998)

Net earnings from continuing operations attributable to Weyerhaeuser common shareholders before special items

$          133

$                  180

$                  178

$                  412

$                  555

Q2

Q3

Year-to-date

June 30, 2015

September 30, 2015

September 30, 2014

September 30, 2015

September 30, 2014

Net earnings per diluted share attributable to Weyerhaeuser common shareholders

$         0.26

$                 0.35

$                 2.15

$                 0.77

$                 2.83

Restructuring, impairments and other charges

0.01

0.02

0.04

Gain on sale of non-strategic asset

(0.02)

Gain on postretirement plan amendment

(0.03)

(0.13)

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

0.26

2.13

0.79

2.72

Earnings from discontinued operations, net of income taxes

(1.80)

(1.75)

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

$         0.26

$                 0.35

$                 0.33

$                 0.79

$                 0.97

Selected Total Company Items

in millions

Q2

Q3

Year-to-date

June 30, 2015

September 30, 2015

September 30, 2014

September 30, 2015

September 30, 2014

Depreciation, depletion and amortization:

Cost of products sold

$            116

$                   116

$                   117

$                   350

$                   351

Selling, general and administrative expenses

2

2

6

9

17

Total depreciation, depletion and amortization

$            118

$                   118

$                   123

$                   359

$                   368

Pension and postretirement costs:

Pension and postretirement costs allocated to business segments

$              14

$                     13

$                     11

$                     40

$                     33

Pension and postretirement credits not allocated

(3)

(2)

(12)

(8)

(33)

Total company pension and postretirement costs

$              11

$                     11

$                     (1)

$                     32

$                     —

Total decrease (increase) in working capital(1)

$            161

$                   (79)

$                   106

$                   (25)

$                   (15)

Cash spent for capital expenditures

$          (108)

$                 (112)

$                 (112)

$                 (309)

$                 (267)

(1) Working capital does not include cash balances.

 

Weyerhaeuser Company

Timberlands Segment

Q3.2015 Analyst Package

Preliminary results (unaudited)

Segment Statement of Operations

in millions

Q2.2015

Q3.2015

Q3.2014

YTD.2015

YTD.2014

Sales to unaffiliated customers

$         336

$         326

$           364

$        1,013

$        1,138

Intersegment sales

187

210

218

625

642

Total net sales

523

536

582

1,638

1,780

Cost of products sold

385

401

432

1,191

1,262

Gross margin

138

135

150

447

518

Selling expenses

1

1

2

4

6

General and administrative expenses

21

21

23

64

72

Research and development expenses

4

3

4

10

11

Charges for restructuring, closures and impairments

1

1

Other operating income, net

(15)

(16)

(16)

(46)

(42)

Operating income

127

126

136

415

470

Interest income and other

Net contribution to earnings

$        127

$        126

$          136

$          415

$          470

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

in millions

Q2.2015

Q3.2015

Q3.2014

YTD.2015

YTD.2014

Operating income

$        127

$        126

$          136

$          415

$          470

Depreciation, depletion and amortization

51

51

51

155

154

Adjusted EBITDA*

$        178

$        177

$          187

$          570

$          624

* Non-GAAP measure - see page 8 for definition.

Selected Segment Items

in millions

Q2.2015

Q3.2015

Q3.2014

YTD.2015

YTD.2014

Total decrease (increase) in working capital(1)

$           52

$          (12)

$             25

$             14

$           (19)

Cash spent for capital expenditures

$          (17)

$          (17)

$           (19)

$           (58)

$           (56)

(1) Working capital does not include cash balances.

Segment Statistics

Q2.2015

Q3.2015

Q3.2014

YTD.2015

YTD.2014

Third Party  Net Sales  (millions)

Logs:

West

$         221

$         196

$           227

$           627

$           745

South

58

64

69

180

191

Canada

3

6

5

17

12

Total logs

282

266

301

824

948

Chip sales

4

4

4

12

9

Timberlands exchanges

5

12

17

42

49

Higher and better use land sales

3

4

4

9

14

Minerals, oil and gas

5

7

10

19

25

Products from international operations

25

20

22

69

72

Other products

12

13

6

38

21

Total

$         336

$         326

$           364

$        1,013

$        1,138

Logs Third Party Sales Realizations (per cubic meter)

West

$      94.70

$      93.44

$      102.23

$        95.63

$      108.64

South

$      45.20

$      45.96

$        45.30

$        45.51

$        45.12

Canada

$      35.43

$      35.50

$        37.75

$        35.15

$        36.65

International

$      22.63

$      18.71

$        19.95

$        20.29

$        17.88

Logs Third Party Sales Volumes (cubic meters, thousands)

West

2,330

2,104

2,223

6,554

6,859

South

1,295

1,396

1,500

3,962

4,224

Canada

75

159

152

479

338

International

179

175

170

504

456

Total

3,879

3,834

4,045

11,499

11,877

Logs Fee Harvest Volumes (cubic meters, thousands)

West

2,811

2,666

2,656

8,388

8,419

South

2,912

3,008

2,950

8,652

8,531

International

219

200

232

658

730

Total

5,942

5,874

5,838

17,698

17,680

 

Weyerhaeuser Company

Wood Products Segment

Q3.2015 Analyst Package

Preliminary results (unaudited)

Segment Statement of Operations  

in millions

Q2.2015

Q3.2015

Q3.2014

YTD.2015

YTD.2014

Sales to unaffiliated customers

$        1,004

$        1,023

$        1,048

$        2,950

$         3,023

Intersegment sales

22

20

20

61

60

Total net sales

1,026

1,043

1,068

3,011

3,083

Cost of products sold

903

914

910

2,646

2,640

Gross margin

123

129

158

365

443

Selling expenses

23

23

22

69

70

General and administrative expenses

26

21

31

74

98

Research and development expenses

1

1

2

3

Charges for restructuring, closures and impairments

1

1

2

Other operating costs (income), net

2

(2)

1

(1)

Operating income

71

85

105

218

271

Interest income and other

Net contribution to earnings

$            71

$            85

$          105

$         218

$           271

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

in millions

Q2.2015

Q3.2015

Q3.2014

YTD.2015

YTD.2014

Operating income

$            71

$            85

$          105

$         218

$           271

Depreciation, depletion and amortization

27

26

30

79

89

Adjusted EBITDA*

$            98

$          111

$          135

$         297

$           360

* Non-GAAP measure - see page 8 for definition.

Selected Segment Items

in millions

Q2.2015

Q3.2015

Q3.2014

YTD.2015

YTD.2014

Total decrease (increase) in working capital(1)

$             42

$             23

$             41

$           (34)

$             (67)

Cash spent for capital expenditures

(60)

(60)

(56)

(165)

(112)

(1) Working capital does not include cash balances.

Segment Statistics

in millions, except for third-party sales realizations

Q2.2015

Q3.2015

Q3.2014

YTD.2015

YTD.2014

Structural Lumber (board feet)

Third party net sales

$           450

$           455

$           500

$        1,339

$         1,442

Third party sales realizations

$           383

$           372

$           431

$           385

$            430

Third party sales volumes(1)

1,175

1,224

1,162

3,474

3,357

Production volumes

1,087

1,087

1,049

3,217

3,139

Outside purchase volumes

98

92

91

279

251

Engineered Solid Section (cubic feet)

Third party net sales

$           113

$           116

$           104

$           323

$            308

Third party sales realizations

$        2,032

$        2,043

$        2,031

$        2,016

$         1,989

Third party sales volumes(1)

5.6

5.6

5.1

16

15.5

Production volumes

5.6

5.2

5.2

15.8

15.8

Outside purchase volumes

2.3

Engineered I-joists (lineal feet)

Third party net sales

$             76

$             79

$             74

$           216

$            214

Third party sales realizations

$        1,502

$        1,520

$        1,540

$        1,511

$         1,489

Third party sales volumes(1)

50

52

49

143

144

Production volumes

48

50

50

141

149

Outside purchase volumes

1

2

1

4

5

Oriented Strand Board (square feet 3/8')

Third party net sales

$           147

$           151

$           157

$           435

$            464

Third party sales realizations

$           191

$           194

$           215

$           194

$            223

Third party sales volumes(1)

771

778

732

2,249

2,079

Production volumes

700

746

717

2,150

2,055

Outside purchase volumes

82

77

52

223

156

Softwood Plywood (square feet 3/8')

Third party net sales

$             36

$             33

$             42

$           102

$            107

Third party sales realizations

$           354

$           330

$           381

$           349

$            355

Third party sales volumes(1)

101

100

110

290

302

Production volumes

63

67

72

191

191

Outside purchase volumes

27

27

31

91

100

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

 

Weyerhaeuser Company

Cellulose Fibers Segment

Q3.2015 Analyst Package

Preliminary results (unaudited)

Segment Statement of Operations

in millions

Q2.2015

Q3.2015

Q3.2014

YTD.2015

YTD.2014

Total net sales

$        467

$        471

$        503

$         1,385

$         1,454

Cost of products sold

417

371

427

1,182

1,198

Gross margin

50

100

76

203

256

Selling expenses

4

3

3

10

11

General and administrative expenses

17

16

18

50

58

Research and development expenses

1

2

1

5

5

Other operating income, net

(6)

(5)

(6)

(19)

(23)

Operating income

34

84

60

157

205

Interest income and other

(7)

(5)

(1)

(18)

(1)

Net contribution to earnings

$          27

$          79

$          59

$            139

$            204

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

in millions

Q2.2015

Q3.2015

Q3.2014

YTD.2015

YTD.2014

Operating income

$           34

$           84

$           60

$             157

$             205

Depreciation, depletion and amortization

38

39

39

116

116

Adjusted EBITDA*

$          72

$        123

$          99

$            273

$            321

* Non-GAAP measure - see page 8 for definition.

Selected Segment Items

in millions

Q2.2015

Q3.2015

Q3.2014

YTD.2015

YTD.2014

Total decrease (increase) in working capital(1)

$             6

$         (24)

$           39

$               22

$               33

Cash spent for capital expenditures

(31)

(27)

(36)

(85)

(97)

(1) Working capital does not include cash balances.

Segment Statistics

Q2.2015

Q3.2015

Q3.2014

YTD.2015

YTD.2014

Pulp (air-dry metric tons)

Third party net sales (millions)

$         368

$         383

$         408

$          1,111

$          1,154

Third party sales realizations

$         823

$         818

$         858

$             831

$             843

Third party sales volumes (thousands)

448

468

474

1,337

1,368

Production volumes (thousands)

422

477

465

1,341

1,391

Liquid Packaging Board (metric tons)

Third party net sales (millions)

$           84

$           74

$           80

$             232

$             247

Third party sales realizations

$      1,218

$      1,168

$      1,307

$          1,194

$          1,275

Third party sales volumes (thousands)

69

63

62

194

194

Production volumes (thousands)

64

68

53

192

195

 

Weyerhaeuser Company

Unallocated Items

Q3.2015 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 and the elimination of intersegment profit in inventory and the LIFO reserve.

Contribution to Earnings

in millions

Q2.2015

Q3.2015

Q3.2014

YTD.2015

YTD.2014

Unallocated corporate function expenses

$          (7)

$           (4)

$          (3)

$           (20)

$           (17)

Unallocated share-based compensation

1

6

1

10

(2)

Unallocated pension & postretirement credits

3

2

35

8

146

Foreign exchange gains (losses)

9

(20)

(14)

(40)

(16)

Elimination of intersegment profit in inventory and LIFO

18

3

12

9

(8)

Other

(13)

(23)

(14)

(55)

(23)

Operating income (loss)

11

(36)

17

(88)

80

Interest income and other

9

9

8

27

28

Net contribution to earnings from continuing operations(1)

$        20

$        (27)

$        25

$          (61)

$         108

(1) We have reclassified certain results from the prior periods to present the results of operations discontinued in 2014 separately. Our reclassifications had no effect on net earnings or Weyerhaeuser shareholders' interest.

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

in millions

Q2.2015

Q3.2015

Q3.2014

YTD.2015

YTD.2014

Operating income (loss)

$        11

$        (36)

$        17

$          (88)

$            80

Depreciation, depletion and amortization

2

2

3

9

9

Non-operating pension and postretirement credits

(3)

(2)

(12)

(8)

(33)

Special items

(15)

13

(103)

Adjusted EBITDA*

$        10

$        (36)

$         (7)

$          (74)

$          (47)

* Non-GAAP measure - see below for definition.

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

in millions

Q2.2015

Q3.2015

Q3.2014

YTD.2015

YTD.2014

Gain on postretirement plan amendment

$         —

$           —

$         23

$            —

$           113

Restructuring, impairments and other charges

(8)

(13)

(32)

Gain on sale of non-strategic asset

22

Total

$         —

$          —

$        15

$          (13)

$         103

Unallocated Selected Items

in millions

Q2.2015

Q3.2015

Q3.2014

YTD.2015

YTD.2014

Total decrease (increase) in working capital(1)

$         61

$         (66)

$           1

$         (132)

$             38

Cash spent for capital expenditures

$         —

$           —

$          (1)

$             (1)

$             (2)

(1) Working capital does not include cash balances.

*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, pension and postretirement costs not allocated to business segments (primarily interest cost, expected return on plan assets, amortization of actuarial loss and amortization of prior service cost/credit), special items and discontinued operations. Adjusted EBITDA should not be considered in isolation from and is not intended to represent an alternative to our GAAP results.

 

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SOURCE Weyerhaeuser Company



RELATED LINKS

http://www.weyerhaeuser.com