Weyerhaeuser reports fourth quarter, full year results

-- Generated full year net earnings of $582 million or $0.77 per diluted share

-- Increased full year Adjusted EBITDA by 31% to $2.1 billion with improvements in all segments

-- Raised quarterly dividend

-- Completed sale of 100,000 acres of Southern timberlands for $202.5 million in the fourth quarter

News provided by

Weyerhaeuser Company

Feb 02, 2018, 03:05 ET

SEATTLE, Feb. 2, 2018 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported fourth quarter net earnings of $271 million or 36 cents per diluted share, on net sales of $1.8 billion. This compares with net earnings from continuing operations of $62 million, or 8 cents per diluted share, on net sales of $1.6 billion for the same period last year.

Excluding a net after-tax benefit of $37 million from special items, the company reported net earnings of $234 million or 31 cents per diluted share. This compares with net earnings from continuing operations before special items of $106 million for the same period last year and $259 million for third quarter 2017.

For the full year 2017, Weyerhaeuser reported net earnings of $582 million, or 77 cents per diluted share, on net sales of $7.2 billion. This compares with net earnings from continuing operations of $415 million on net sales of $6.4 billion for the same period last year.

Full year 2017 includes net after-tax charges of $290 million from special items. Excluding these items, the company reported net earnings from continuing operations before special items of $872 million, or $1.15 per diluted share. This compares with net earnings from continuing operations before special items of $534 million for the full year 2016.

"2017 was a year of strong financial and operational performance for Weyerhaeuser. We increased Adjusted EBITDA by over 30 percent to $2.1 billion, generated over $1 billion of EBITDA from Wood Products, achieved all targets for operational excellence, merger cost synergies and overhead cost reduction, and raised our dividend," said Doyle R. Simons, president and chief executive officer. "We also further simplified and optimized our portfolio by divesting our Uruguay operations, exiting the Twin Creeks joint venture and selling 100,000 acres of Southern timberland for collective proceeds of over $700 million. Going forward, we expect continued growth in the U.S. housing market and we remain relentlessly focused on improving performance through operational excellence, fully capitalizing on strengthening market conditions, and driving value for shareholders through disciplined capital allocation."

WEYERHAEUSER FINANCIAL HIGHLIGHTS

2017

2017

2016

2017

2016

(millions, except per share data)

Q3

Q4

Q4

Full Year

Net sales

$

1,872

$

1,823

$

1,596

$

7,196

$

6,365

Earnings from continuing operations

$

130

$

271

$

62

$

582

$

415

Net earnings attributable to Weyerhaeuser common shareholders

$

130

$

271

$

551

$

582

$

1,005

Earnings per diluted share from continuing operations

$

0.17

$

0.36

$

0.08

$

0.77

$

0.55

Net earnings per diluted share

$

0.17

$

0.36

$

0.73

$

0.77

$

1.39

Weighted average shares outstanding, diluted(1)

757

758

753

757

722

Net earnings from continuing operations attributable to Weyerhaeuser common shareholders before special items(2)

$

259

$

234

$

106

$

872

$

534

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

$

0.34

$

0.31

$

0.14

$

1.15

$

0.75










Adjusted EBITDA(3)

$

569

$

551

$

400

$

2,080

$

1,583










(1) During 2016, Weyerhaeuser issued approximately 279 million common shares in connection with the Plum Creek merger, issued 23 million common shares to effect the conversion of its mandatory convertible preference shares, and repurchased approximately 68 million common shares under the company's repurchase authorization program put in place in connection with the Plum Creek merger transaction.

(2) Fourth quarter 2017 after-tax special items include a $99 million gain on the sale of Southern timberlands, charges of $52 million for tax adjustments including enactment of tax legislation, $31 million for product remediation, $26 million for environmental remediation insurance recoveries, $12 million for Plum Creek merger-related costs, and a $7 million net benefit from an adjustment to accrued countervailing and antidumping duties on softwood lumber. Full year 2017 includes $290 million of after-tax special charges, primarily for product remediation and impairment of Uruguay operations. Full year 2016 includes after-tax special charges of $141 million, primarily for Plum Creek merger-related costs. Full year 2016 results also include a $612 million gain on the sale of the company's Cellulose Fiber businesses which is presented as discontinued operations.

(3) Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income from continuing operations, adjusted for depreciation, depletion, amortization, basis in real estate sold, unallocated pension service costs and special items. Adjusted EBITDA excludes results from joint ventures. Adjusted EBITDA should not be considered in isolation from and is not intended to represent an alternative to our GAAP results. A reconciliation of Adjusted EBITDA to GAAP earnings is included with this release.

Weyerhaeuser merged with Plum Creek Timber Company, Inc. (Plum Creek) on February 19, 2016.  The financial statements presented within this release do not include Plum Creek financial results for any period prior to the February 19, 2016 merger date.

During 2016, Weyerhaeuser sold its Cellulose Fibers businesses. Results for the Cellulose Fibers segment are presented as discontinued operations.

TIMBERLANDS

FINANCIAL HIGHLIGHTS (millions)

3Q 2017

4Q 2017

Change

Net sales

$

670

$

714

$

44

Contribution to pre-tax earnings

$

131

$

265

$

134

Pre-tax benefit from special items

$

—

$

(99)

$

(99)

Contribution to pre-tax earnings before special items

$

131

$

166

$

35

Adjusted EBITDA

$

220

$

252

$

32

4Q 2017 Performance - In the West, fee harvest volumes increased and average realizations for domestic and export logs improved compared with the third quarter. In the South, fee harvest increased due to seasonally higher volumes and favorable weather, and average sales realizations were comparable to the prior quarter.

Fourth quarter includes a $99 million gain on the previously announced sale of 100,000 acres of Southern timberlands.

The company redeemed its ownership interest in the Twin Creeks Timber, LLC joint venture in October 2017. Fourth quarter results include no earnings contribution from operation of the joint venture.

1Q 2018 Outlook - Weyerhaeuser expects first quarter earnings before special items and Adjusted EBITDA to be comparable to the fourth quarter. In the West, the company anticipates improved average log sales realizations, partially offset by modestly lower fee harvest volumes. In the South, the company expects seasonally lower fee harvest volumes, comparable realizations, and higher trucking costs.

REAL ESTATE, ENERGY AND NATURAL RESOURCES

FINANCIAL HIGHLIGHTS (millions)

3Q 2017

4Q 2017

Change

Net sales

$

82

$

100

$

18

Contribution to pre-tax earnings

$

47

$

50

$

3

Adjusted EBITDA

$

74

$

87

$

13

4Q 2017 Performance - Earnings and Adjusted EBITDA increased compared with the third quarter due to seasonally higher Real Estate sales.

1Q 2018 Outlook - Weyerhaeuser anticipates significantly lower earnings and Adjusted EBITDA in the first quarter compared with the fourth quarter due to seasonally lower Real Estate sales and royalties from Energy & Natural Resources operations.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS (millions)

3Q 2017

4Q 2017

Change

Net sales

$

1,299

$

1,228

$

(71)

Contribution to pre-tax earnings

$

40

$

180

$

140

Pre-tax charge for special items

$

201

$

41

$

(160)

Contribution to pre-tax earnings before special items

$

241

$

221

$

(20)

Adjusted EBITDA

$

278

$

258

$

(20)

4Q 2017 Performance - Average sales realizations for all products increased compared with the third quarter. Sales volumes declined due to seasonality and weather-related transportation disruptions. Canadian and Western log costs increased, and raw material costs for oriented strand board and engineered wood products were also higher.

Fourth quarter net pre-tax special charges of $41 million include $50 million for product remediation and a $9 million net benefit primarily from an adjustment to the periods covered and rates associated with the softwood lumber countervailing and antidumping duties.

1Q 2018 Outlook - Weyerhaeuser anticipates first quarter earnings before special items and Adjusted EBITDA from the Wood Products segment will be comparable to the fourth quarter. The company expects higher sales volumes, improved operating rates, and slightly higher lumber sales realizations, offset by lower average sales realizations for oriented strand board.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control 12.4 million acres of timberlands in the U.S., and manage additional timberlands under long-term licenses in Canada. We manage these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. We are also one of the largest manufacturers of wood products. Our company is a real estate investment trust. In February 2016, we merged with Plum Creek Timber Company, Inc. In 2017, we generated $7.2 billion in net sales and employed approximately 9,300 people who serve customers worldwide. We are listed on the North American and World Dow Jones Sustainability Indices. 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 conference call at 7 a.m. Pacific (10 a.m. Eastern) on February 2, 2018 to discuss fourth quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on February 2, 2018.

To join the conference call from within North America, dial 855-223-0757 (access code: 3088989) at least 15 minutes prior to the call. Those calling from outside North America should dial 574-990-1206 (access code: 3088989). Replays will be available for two weeks at 855-859-2056 (access code: 3088989) from within North America and at 404-537-3406 (access code: 3088989) from outside North America.

FORWARD LOOKING STATEMENTS

This news release contains statements concerning the company's future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, including with respect to the following for the first quarter of 2018: earnings and Adjusted EBITDA for each of our business segments; log sale realizations and fee harvest volumes in our timber business; Wood Products sales volumes and realizations and operating rates; transportation costs; real estate sales volumes; and royalties from energy and natural resources operations. These statements generally are identified by words such as "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," and expressions such as "will be," "will continue," "will likely result," and similar words and expressions. These statements are based on our current expectations and assumptions and are not guarantees of future performance.  The realization of our expectations and the accuracy of our assumptions are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to:

  • the effect of general economic conditions, including employment rates, interest rate levels, housing starts, availability of financing for home mortgages and strength of the U.S. dollar;
  • market demand for our products, including market demand for our timberland properties with higher and better uses, which is related to, among other factors, the strength of the various U.S. business segments and U.S. and international economic conditions;
  • changes in currency exchange rates, particularly the relative value of the U.S. dollar to the yen and the Canadian dollar, and the relative value of the euro to the yen;
  • restrictions on international trade, tariffs imposed on imports and the availability and cost of shipping and transportation;
  • economic activity in Asia, especially Japan and China;
  • performance of our manufacturing operations, including maintenance requirements;
  • potential disruptions in our manufacturing operations;
  • the level of competition from domestic and foreign producers;
  • raw material availability and prices;
  • the effect of weather;
  • the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;
  • energy prices;
  • the successful execution of our internal plans and strategic initiatives, including restructuring and cost reduction initiatives;
  • the successful and timely execution and integration of our strategic acquisitions, including our ability to realize expected benefits and synergies, and the successful and timely execution of our strategic divestitures, each of which is subject to a number of risks and conditions beyond our control including, but not limited to, timing and required regulatory approvals;
  • transportation and labor availability and costs;
  • federal tax policies;
  • the effect of forestry, land use, environmental and other governmental regulations;
  • legal proceedings;
  • performance of pension fund investments and related derivatives;
  • the effect of timing of retirements and changes in the market price of our common stock on charges for share-based compensation;
  • changes in accounting principles; and
  • other matters described under "Risk Factors" in our 2016 Annual Report on Form 10-K, as well as those set forth from time to time in our other public statements and other reports and filings with the Securities and Exchange Commission.

Forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.

For more information contact:

Analysts - Beth Baum (206) 539-3907


Media - Anthony Chavez (206) 539-4406

RECONCILIATION OF ADJUSTED EBITDA TO NET EARNINGS

We reconcile Adjusted EBITDA to net earnings for the consolidated company and to operating income for the business segments, as those are the most directly comparable U.S. GAAP measures for each.

 

The table below reconciles Adjusted EBITDA for the year ended December 31, 2017:

DOLLAR AMOUNTS IN MILLIONS

Timberlands

Real Estate & ENR

Wood Products

Unallocated Items

Total

Adjusted EBITDA by Segment:








Net earnings







$

582

Earnings from discontinued operations, net of income taxes







—

Interest expense, net of capitalized interest







393

Income taxes







134

Net contribution to earnings

$

532

$

146

$

569

$

(138)

1,109

Equity (earnings) loss from joint ventures

—

(1)

—

—

(1)

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

—

—

—

62

62

Interest income and other

—

—

—

(39)

(39)

Operating income

532

145

569

(115)

1,131

Depreciation, depletion and amortization

356

15

145

5

521

Basis of real estate sold

—

81

—

—

81

Unallocated pension service costs

—

—

—

4

4

Special items(1)(2)(3)

48

—

303

(8)

343

Adjusted EBITDA

$

936

$

241

$

1,017

$

(114)

$

2,080

(1) Pre-tax special items included in Timberlands consist of a $147 million non-cash impairment charge of the Uruguay operations and a $99 million gain on the sale of Southern timberlands.

(2) Pre-tax special items included in Wood Products consist of $290 million of product remediation charges, $7 million for countervailing and antidumping duties on softwood lumber, and a $6 million impairment on a non-strategic asset.

(3) Pre-tax special items included in Unallocated Items consist of $42 million for environmental remediation insurance recoveries and $34 million for Plum Creek merger-related costs.

The table below reconciles Adjusted EBITDA for the year ended December 31, 2016:

DOLLAR AMOUNTS IN MILLIONS

Timberlands

Real Estate & ENR

Wood Products

Unallocated Items

Total

Adjusted EBITDA by Segment:








Net earnings







$

1,027

Earnings from discontinued operations, net of income taxes







(612)

Interest expense, net of capitalized interest







431

Income taxes







89

Net contribution to earnings

$

499

$

55

$

512

$

(131)

$

935

Equity (earnings) loss from joint ventures

—

(2)

—

(20)

(22)

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

—

—

—

(48)

(48)

Interest income and other

—

—

—

(43)

(43)

Operating income

499

53

512

(242)

822

Depreciation, depletion and amortization

366

13

129

4

512

Basis of real estate sold

—

109

—

—

109

Unallocated pension service costs

—

—

—

5

5

Special items(1)(2)

—

14

—

121

135

Adjusted EBITDA

$

865

$

189

$

641

$

(112)

$

1,583


(1) Pre-tax special items included in Real Estate & ENR relate to non-cash charges recorded for legacy real estate projects.

(2) Pre-tax special items included in Unallocated Items consist of:  $146 million Plum Creek merger-related costs, $36 million gain on sale of non strategic assets, and $11 million of legal expense.

The table below reconciles Adjusted EBITDA for the quarter ended December 31, 2017:

DOLLAR AMOUNTS IN MILLIONS

Timberlands

Real Estate & ENR

Wood Products

Unallocated Items

Total

Adjusted EBITDA by Segment:








Net earnings







$

271

Interest expense, net of capitalized interest







96

Income taxes







103

Net contribution to earnings

$

265

$

50

$

180

$

(25)

$

470

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

—

—

—

16

16

Interest income and other

—

—

—

(10)

(10)

Operating income

265

50

180

(19)

476

Depreciation, depletion and amortization

86

4

37

—

127

Basis of real estate sold

—

33

—

—

33

Unallocated pension service costs

—

—

—

1

1

Special items(1)(2)(3)

(99)

—

41

(28)

(86)

Adjusted EBITDA

$

252

$

87

$

258

$

(46)

$

551

(1) Pre-tax special items included in Timberlands consist of a $99 million gain on the sale of Southern timberlands.

(2) Pre-tax special items included in Wood Products consist of $50 million of product remediation charges, partially offset by a $9 million benefit from an adjustment to accrued softwood lumber countervailing and antidumping duties.

(3) Pre-tax special items included in Unallocated Items consist of $42 million for environmental remediation insurance recoveries and $14 million for Plum Creek merger-related costs.

The table below reconciles Adjusted EBITDA for the quarter ended September 30, 2017:

DOLLAR AMOUNTS IN MILLIONS

Timberlands

Real Estate & ENR

Wood Products

Unallocated Items

Total

Adjusted EBITDA by Segment:








Net earnings







$

130

Interest expense, net of capitalized interest







98

Income taxes







(27)

Net contribution to earnings

$

131

$

47

$

40

$

(17)

$

201

Equity (earnings) loss from joint ventures

—

(1)

—

—

(1)

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

—

—

—

16

16

Interest income and other

—

—

—

(11)

(11)

Operating income

131

46

40

(12)

205

Depreciation, depletion and amortization

89

4

37

2

132

Basis of real estate sold

—

24

—

—

24

Unallocated pension service costs

—

—

—

1

1

Special items(1)(2)

—

—

201

6

207

Adjusted EBITDA

$

220

$

74

$

278

$

(3)

$

569

(1) Pre-tax special items included in Wood Products consist of $190 million of product remediation charges, a $6 million impairment on a non-strategic asset and $5 million of countervailing and anti-dumping duties on softwood lumber.

(2) Pre-tax special items included in Unallocated Items consist of $6 million of Plum Creek merger-related costs.

The table below reconciles Adjusted EBITDA for the quarter ended December 31, 2016:

DOLLAR AMOUNTS IN MILLIONS

Timberlands

Real Estate & ENR

Wood Products

Unallocated Items

Total

Adjusted EBITDA by Segment:








Net earnings







$

551

Earnings from discontinued operations, net of income taxes







(489)

Interest expense, net of capitalized interest







108

Income taxes







25

Net contribution to earnings

$

123

$

13

$

99

$

(40)

$

195

Equity (earnings) loss from joint ventures

—

(1)

—

—

(1)

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

—

—

—

(11)

(11)

Interest income and other

—

—

—

(9)

(9)

Operating income

123

12

99

(60)

174

Depreciation, depletion and amortization

100

4

33

—

137

Basis of real estate sold

—

60

—

—

60

Unallocated pension service costs

—

—

—

1

1

Special items(1)(2)

—

14

—

14

28

Adjusted EBITDA

$

223

$

90

$

132

$

(45)

$

400

(1) Pre-tax special items included in Real Estate & ENR relate to non-cash charges recorded for legacy real estate projects.

(2) Pre-tax special items included in Unallocated items consist of $14 million of Plum Creek merger-related costs.

Weyerhaeuser Company






Exhibit 99.2

Q4.2017 Analyst Package








Preliminary results (unaudited)







Consolidated Statement of Operations (1)(2)















in millions

Q1

Q2

Q3

Q4

Year-to-Date

Mar 31, 2017

Jun 30, 2017

Sep 30, 2017

Dec 31, 2017

Dec 31, 2016

Dec 31, 2017

Dec 31, 2016

Net sales

$

1,693

$

1,808

$

1,872

$

1,823

$

1,596

$

7,196

$

6,365

Cost of products sold

1,272

1,336

1,374

1,316

1,278

5,298

4,980

Gross margin

421

472

498

507

318

1,898

1,385

Selling expenses

22

22

22

21

22

87

89

General and administrative expenses

87

76

75

72

85

310

338

Research and development expenses

4

4

4

2

5

14

19

Charges for integration and restructuring, closures and asset impairments

13

151

14

16

29

194

170

Charges for product remediation

—

50

190

50

—

290

—

Other operating costs (income), net

2

12

(12)

(130)

3

(128)

(53)

Operating income from continuing operations

293

157

205

476

174

1,131

822

Equity earnings from joint ventures

—

—

1

—

1

1

22

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

(22)

(8)

(16)

(16)

11

(62)

48

Interest income and other

9

9

11

10

9

39

43

Interest expense, net of capitalized interest

(99)

(100)

(98)

(96)

(108)

(393)

(431)

Earnings from continuing operations before income taxes

181

58

103

374

87

716

504

Income taxes

(24)

(34)

27

(103)

(25)

(134)

(89)

Earnings from continuing operations

157

24

130

271

62

582

415

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

—

—

—

—

489

—

612

Net earnings

157

24

130

271

551

582

1,027

Dividends on preference shares

—

—

—

—

—

—

(22)

Net earnings attributable to Weyerhaeuser common shareholders

$

157

$

24

$

130

$

271

$

551

$

582

$

1,005
















(1) Discontinued operations, as presented herein, consist of the operations of our former Cellulose Fibers segment. The corresponding assets and liabilities were classified as discontinued operations on our balance sheet.

(2) Amounts presented reflect the results of operations acquired in our merger with Plum Creek Timber, Inc., beginning on the merger date of February 19, 2016.


Per Share Information



Q1

Q2

Q3

Q4

Year-to-Date

Mar 31, 2017

Jun 30, 2017

Sep 30, 2017

Dec 31, 2017

Dec 31, 2016

Dec 31, 2017

Dec 31, 2016

Earnings per share attributable to Weyerhaeuser common shareholders, basic:







Continuing operations

$

0.21

$

0.03

$

0.17

$

0.36

$

0.09

$

0.77

$

0.55

Discontinued operations

—

—

—

—

0.65

—

0.85

Net earnings per share

$

0.21

$

0.03

$

0.17

$

0.36

$

0.74

$

0.77

$

1.40
















Earnings per share attributable to Weyerhaeuser common shareholders, diluted:






Continuing operations

$

0.21

$

0.03

$

0.17

$

0.36

$

0.08

$

0.77

$

0.55

Discontinued operations

—

—

—

—

0.65

—

0.84

Net earnings per share

$

0.21

$

0.03

$

0.17

$

0.36

$

0.73

$

0.77

$

1.39
















Dividends paid per common share

$

0.31

$

0.31

$

0.31

$

0.32

$

0.31

$

1.25

$

1.24
















Weighted average shares outstanding (in thousands):








Basic

750,665

752,630

753,535

755,409

748,835

753,085

718,560

Diluted

754,747

756,451

756,903

758,463

752,768

756,666

722,401
















Common shares outstanding at end of period (in thousands)

751,411

752,711

753,051

755,223

748,528

755,223

748,528














































Weyerhaeuser Company








Q4.2017 Analyst Package







Preliminary results (unaudited)










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

in millions

Q1

Q2

Q3

Q4

Year-to-Date

Mar 31, 2017

Jun 30, 2017

Sep 30, 2017

Dec 31, 2017

Dec 31, 2016

Dec 31, 2017

Dec 31, 2016

Net earnings

$

157

$

24

$

130

$

271

$

551

$

582

$

1,027

Earnings from discontinued operations, net of income taxes

—

—

—

—

(489)

—

(612)

Equity earnings from joint ventures

—

—

(1)

—

(1)

(1)

(22)

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

22

8

16

16

(11)

62

(48)

Interest income and other

(9)

(9)

(11)

(10)

(9)

(39)

(43)

Interest expense, net of capitalized interest

99

100

98

96

108

393

431

Income taxes

24

34

(27)

103

25

134

89

Operating income from continuing operations

293

157

205

476

174

1,131

822

Depreciation, depletion and amortization

133

129

132

127

137

521

512

Basis of real estate sold

14

10

24

33

60

81

109

Unallocated pension service costs

2

—

1

1

1

4

5

Special items

12

210

207

(86)

28

343

135

Adjusted EBITDA*

$

454

$

506

$

569

$

551

$

400

$

2,080

$

1,583
















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















Special Items Included in Net Earnings (income tax affected)















in millions

Q1

Q2

Q3

Q4

Year-to-Date

Mar 31, 2017

Jun 30, 2017

Sep 30, 2017

Dec 31, 2017

Dec 31, 2016

Dec 31, 2017

Dec 31, 2016

Net earnings attributable to Weyerhaeuser common shareholders

$

157

$

24

$

130

$

271

$

551

$

582

$

1,005

Plum Creek merger and integration-related costs

10

2

3

12

11

27

123

Restructuring, impairments and other charges

—

147

4

—

9

151

9

Gain on sale of timberlands and other nonstrategic assets

—

—

—

(99)

—

(99)

(22)

Legal expense

—

—

—

—

—

—

7

Environmental remediation insurance recoveries

—

—

—

(26)

—

(26)

—

Product remediation

—

31

118

31

—

180

—

Countervailing and antidumping duties

—

8

4

(7)

—

5

—

Tax adjustments, including enactment of tax legislation

—

—

—

52

24

52

24

Net earnings attributable to Weyerhaeuser common shareholders before special items

167

212

259

234

595

872

1,146

(Earnings) loss from discontinued operations, net of tax

—

—

—

—

(489)

—

(612)

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

$

167

$

212

$

259

$

234

$

106

$

872

$

534

















Q1

Q2

Q3

Q4

Year-to-Date

Mar 31, 2017

Jun 30, 2017

Sep 30, 2017

Dec 31, 2017

Dec 31, 2016

Dec 31, 2017

Dec 31, 2016

Net earnings per diluted share attributable to Weyerhaeuser common shareholders

$

0.21

$

0.03

$

0.17

$

0.36

$

0.73

$

0.77

$

1.39

Plum Creek merger and integration-related costs

0.01

—

—

0.02

0.01

0.03

0.17

Restructuring, impairments and other charges

—

0.20

0.01

—

0.01

0.21

0.01

Gain on sale of timberlands and other nonstrategic assets

—

—

—

(0.14)

—

(0.14)

(0.03)

Legal expense

—

—

—

—

—

—

0.01

Environmental remediation insurance recoveries

—

—

—

(0.03)

—

(0.03)

—

Product remediation

—

0.04

0.15

0.04

—

0.23

—

Countervailing and antidumping duties

—

0.01

0.01

(0.01)

—

0.01

—

Tax adjustments, including enactment of tax legislation

—

—

—

0.07

0.04

0.07

0.04

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

0.22

0.28

0.34

0.31

0.79

1.15

1.59

(Earnings) loss from discontinued operations, net of tax

—

—

—

—

(0.65)

—

(0.84)

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

$

0.22

$

0.28

$

0.34

$

0.31

$

0.14

$

1.15

$

0.75


Weyerhaeuser Company





Q4.2017 Analyst Package




Preliminary results (unaudited)






Consolidated Balance Sheet










in millions

March 31,
 2017

June 30,
 2017

September 30,
 2017

December 31,
 2017

December 31,
 2016



ASSETS








Current assets:








Cash and cash equivalents

$

455

$

701

$

497

$

824

$

676

Receivables, less allowances

472

442

485

396

390

Receivables for taxes

10

8

65

14

84

Inventories

386

349

340

383

358

Prepaid expenses and other current assets

142

177

130

98

114

Assets held for sale

—

411

—

—

—

Total current assets

1,465

2,088

1,517

1,715

1,622

Property and equipment, net

1,544

1,534

1,534

1,618

1,562

Construction in progress

230

190

225

225

213

Timber and timberlands at cost, less depletion

14,218

13,669

13,627

12,954

14,299

Minerals and mineral rights, net

317

314

312

308

319

Investments in and advances to equity affiliates

56

33

33

31

56

Goodwill

40

40

40

40

40

Deferred tax assets

287

261

240

268

293

Other assets

229

246

259

285

224

Restricted financial investments held by variable interest entities

615

615

615

615

615

Total assets

$

19,001

$

18,990

$

18,402

$

18,059

$

19,243










LIABILITIES AND EQUITY








Current liabilities:








Current maturities of long-term debt

$

343

$

668

$

62

$

62

$

281

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

—

—

—

209

—

Accounts payable

227

252

259

249

233

Accrued liabilities

452

585

702

645

692

Liabilities held for sale

—

19

—

—

—

Total current liabilities

1,022

1,524

1,023

1,165

1,206

Long-term debt

6,263

5,936

5,933

5,930

6,329

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

511

511

511

302

511

Deferred pension and other postretirement benefits

1,287

1,230

1,201

1,487

1,322

Deposit received from contribution of timberlands to related party

422

419

416

—

426

Other liabilities

281

280

273

276

269

Total liabilities

9,786

9,900

9,357

9,160

10,063

Total equity

9,215

9,090

9,045

8,899

9,180

Total liabilities and equity

$

19,001

$

18,990

$

18,402

$

18,059

$

19,243

Weyerhaeuser Company







Q4.2017 Analyst Package






Preliminary results (unaudited)









Consolidated Statement of Cash Flows

in millions

Q1

Q2

Q3

Q4

Year-to-Date

Mar 31, 2017

Jun 30, 2017

Sep 30, 2017

Dec 31, 2017

Dec 31, 2016

Dec 31, 2017

Dec 31, 2016

Cash flows from operations:












Net earnings

$

157

$

24

$

130

$

271

$

551

$

582

$

1,027

Noncash charges (credits) to income:












Depreciation, depletion and amortization

133

129

132

127

137

521

565

Basis of real estate sold

14

10

24

33

60

81

109

Deferred income taxes, net

3

3

3

35

(255)

44

(159)

Pension and other postretirement benefits

32

15

25

25

—

97

5

Share-based compensation expense

10

9

10

11

7

40

60

Charges for impairment of assets

—

147

6

1

14

154

37

Equity (earnings) loss from joint ventures

—

—

(1)

—

—

(1)

(18)

Net gains on disposition of discontinued and other operations

—

—

(1)

—

(729)

(1)

(789)

Net gains on sale of nonstrategic assets

(7)

(2)

(5)

(2)

(12)

(16)

(73)

Net gains on sale of southern timberlands

—

—

—

(99)

—

(99)

—

Foreign exchange transaction (gains) losses

3

—

(3)

(1)

6

(1)

(5)

Change in:












Receivables less allowances

(70)

(8)

(35)

78

42

(35)

(54)

Receivable/payable for taxes

(36)

(17)

(63)

66

69

(50)

106

Inventories

(28)

21

11

(43)

12

(39)

61

Prepaid expenses

(9)

(4)

4

(3)

8

(12)

5

Accounts payable and accrued liabilities

(137)

192

129

(78)

(50)

106

11

Pension and postretirement contributions

(22)

(15)

(22)

(19)

(16)

(78)

(99)

Distributions of earnings received from joint ventures

—

—

1

—

9

1

14

Other

(8)

(15)

(22)

(48)

(4)

(93)

(68)

Net cash from (used in) operations

35

489

323

354

(151)

1,201

735














Cash flows from investing activities:












Capital expenditures:












Purchases of property and equipment

(52)

(74)

(87)

(145)

(191)

(358)

(451)

Timberlands reforestation costs

(23)

(13)

(10)

(15)

(16)

(61)

(59)

Acquisition of timberlands

—

—

—

—

—

—

(10)

Proceeds from sales of operations and nonstrategic assets

8

4

411

6

2,211

429

2,590

Proceeds from sale of southern timberlands

—

—

—

203

—

203

—

Proceeds from redemption of ownership in related party

—

—

—

108

—

108

—

Proceeds from contribution of timberlands to related party

—

—

—

—

—

—

440

Distributions received from joint ventures

—

23

—

2

—

25

46

Other

(1)

22

(16)

16

(36)

21

3

Cash from (used in) investing activities

(68)

(38)

298

175

1,968

367

2,559














Cash flows from financing activities:












Cash dividends on common shares

(233)

(233)

(233)

(242)

(232)

(941)

(932)

Cash dividends on preference shares

—

—

—

—

—

—

(22)

Proceeds from issuance of long-term debt

—

—

225

—

—

225

1,698

Payments on long-term debt

—

—

(831)

—

(1,700)

(831)

(2,423)

Proceeds from borrowing on line of credit

—

—

100

—

—

100

—

Payments on line of credit

—

—

(100)

—

—

(100)

—

Proceeds from exercise of stock options

55

26

8

39

—

128

61

Repurchase of common stock

—

—

—

—

—

—

(2,003)

Other

(10)

2

6

1

12

(1)

(9)

Cash from (used in) financing activities

(188)

(205)

(825)

(202)

(1,920)

(1,420)

(3,630)







—






Net change in cash and cash equivalents

(221)

246

(204)

327

(103)

148

(336)














Cash from continuing operations at beginning of period

$

676

$

455

$

701

$

497

$

769

$

676

$

1,011

Cash from discontinued operations at beginning of period

—

—

—

—

10

—

1

Cash and cash equivalents at beginning of period

$

676

$

455

$

701

$

497

$

779

$

676

$

1,012














Cash from continuing operations at end of period

$

455

$

701

$

497

$

824

$

676

$

824

$

676

Cash from discontinued operations at end of period

—

—

—

—

—

—

—

Cash and cash equivalents at end of period

$

455

$

701

$

497

$

824

$

676

$

824

$

676














Cash paid (received) during the year for:












Interest, net of amount capitalized

$

120

$

72

$

123

$

66

$

79

$

381

$

446

Income taxes

$

59

$

47

$

23

$

40

$

511

$

169

$

485

Weyerhaeuser Company




Total Company Statistics

Q4.2017 Analyst Package








Preliminary results (unaudited)










Selected Total Company Items


in millions

Q1

Q2

Q3

Q4

Year-to-Date

Mar 31,
2017

Jun 30,
2017

Sep 30, 2017

Dec 31,

2017

Dec 31,

2016

Dec 31,
2017

Dec 31,

2016

Pension and postretirement costs:













Pension and postretirement costs allocated to business segments

$

8

$

7

$

8

$

8

$

7

$

31

$

30

Pension and postretirement costs (credits) not allocated:













Unallocated pension service costs

2

—

1

1

1

4

5

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

22

8

16

16

(11)

62

(48)

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

—

—

—

—

—

—

5

Total pension and postretirement costs for continuing operations

32

15

25

25

(3)

97

(8)

Pension and postretirement service costs directly attributable to discontinued operations

—

—

—

—

3

—

13

Total company pension and postretirement costs

$

32

$

15

$

25

$

25

$

—

$

97

$

5
















Cash spent for capital expenditures for continuing operations

$

(75)

$

(87)

$

(97)

$

(160)

$

(185)

$

(419)

$

(425)

Weyerhaeuser Company





Timberlands Segment

Q4.2017 Analyst Package








Preliminary results (unaudited)






















Segment Statement of Operations















in millions

Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Sales to unaffiliated customers

$

486

$

469

$

491

$

496

$

463

$

1,942

$

1,805

Intersegment sales

202

163

179

218

209

762

840

Total net sales

688

632

670

714

672

2,704

2,645

Cost of products sold

519

476

517

531

527

2,043

2,054

Gross margin

169

156

153

183

145

661

591

Selling expenses

1

1

1

1

1

4

5

General and administrative expenses

24

23

24

19

24

90

104

Research and development expenses

3

4

3

2

5

12

17

Charges for integration and restructuring, closures and asset impairments

—

147

—

—

—

147

—

Other operating costs (income), net

(7)

(7)

(6)

(104)

(8)

(124)

(34)

Operating income and Net contribution to earnings

$

148

$

(12)

$

131

$

265

$

123

$

532

$

499















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















in millions

Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Operating income

$

148

$

(12)

$

131

$

265

$

123

$

532

$

499

Depreciation, depletion and amortization

94

87

89

86

100

356

366

Special items

—

147

—

(99)

—

48

—

Adjusted EBITDA*

$

242

$

222

$

220

$

252

$

223

$

936

$

865

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















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















in millions

Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Restructuring, impairments and other charges

$

—

$

(147)

$

—

$

—

$

—

$

(147)

$

—

Gain on sale of timberlands and other nonstrategic assets

$

—

$

—

$

—

$

99

$

—

$

99

$

—















Selected Segment Items















in millions

Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Total decrease (increase) in working capital(1)

$

(18)

$

38

$

—

$

(15)

$

(10)

$

5

$

7

Cash spent for capital expenditures

$

(30)

$

(25)

$

(24)

$

(36)

$

(39)

$

(115)

$

(116)

(1) Represents the change in prepaid assets, accounts receivable, accounts payable, accrued liabilities and log inventory for the Timberlands and Real Estate & ENR segments combined.















Segment Statistics(2)(3)
















Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Third Party
Net Sales
(millions)

Logs:












West

$

225

$

227

$

221

$

242

$

201

$

915

$

865

South

148

148

155

165

151

616

566

North

27

16

25

27

30

95

91

Other

20

11

17

11

13

59

38

Total delivered logs

420

402

418

445

395

1,685

1,560

Stumpage and pay-as-cut timber

12

17

23

21

23

73

85

Products from international operations

19

21

23

—

21

63

79

Recreational and other lease revenue

14

15

16

14

15

59

44

Other revenue

21

14

11

16

9

62

37

Total

$

486

$

469

$

491

$

496

$

463

$

1,942

$

1,805

Delivered Logs
Third Party Sales
Realizations (per ton)

West

$

104.27

$

105.84

$

116.03

$

121.41

$

100.43

$

111.58

$

99.32

South

$

34.48

$

34.48

$

34.24

$

34.53

$

34.98

$

34.43

$

35.46

North

$

59.57

$

63.49

$

59.02

$

60.77

$

59.28

$

60.38

$

60.47

Delivered Logs
Third Party Sales
Volumes
(tons, thousands)

West

2,157

2,143

1,910

1,992

2,008

8,202

8,713

South

4,293

4,285

4,527

4,790

4,308

17,895

15,967

North

454

253

428

439

495

1,574

1,500

Other

510

292

424

232

342

1,458

943

Fee Harvest Volumes
(tons, thousands)

West

2,657

2,652

2,230

2,544

2,558

10,083

11,083

South

6,373

6,473

6,953

7,350

7,260

27,149

26,343

North

622

383

565

635

652

2,205

2,044

Other

371

444

569

—

329

1,384

701

(2) The Western region includes Washington and Oregon. The Southern region includes Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas and Oklahoma. The Northern region includes West Virginia, Maine, New Hampshire, Vermont, Michigan, Wisconsin and Montana. Other includes our Canadian operations and managed Twin Creeks operations (our management agreement for the Twin Creeks Venture began in April 2016 and terminated in December 2017).

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

Weyerhaeuser Company

Real Estate, Energy and Natural Resources Segment

Q4.2017 Analyst Package








Preliminary results (unaudited)





















Segment Statement of Operations















in millions

Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Sales to unaffiliated customers

$

53

$

46

$

82

$

99

$

101

$

280

$

226

Intersegment sales

—

—

—

1

1

1

1

Total net sales

53

46

82

100

102

281

227

Cost of products sold

20

16

31

43

69

110

134

Gross margin

33

30

51

57

33

171

93

Selling expenses

—

—

—

—

—

—

—

General and administrative expenses

7

7

6

6

7

26

26

Charges for integration and restructuring, closures and asset impairments

—

—

—

—

14

—

15

Other operating costs (income), net

—

—

(1)

1

—

—

(1)

Operating income

26

23

46

50

12

145

53

Equity earnings from joint ventures(1)

—

—

1

—

1

1

2

Net contribution to earnings

$

26

$

23

$

47

$

50

$

13

$

146

$

55

(1) Equity earnings (loss) from joint ventures attributed to the Real Estate and ENR segment are generated from our investments in our real estate development ventures.















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















in millions

Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Operating income

$

26

$

23

$

46

$

50

$

12

$

145

$

53

Depreciation, depletion and amortization

3

4

4

4

4

15

13

Basis of real estate sold

14

10

24

33

60

81

109

Special items

—

—

—

—

14

—

14

Adjusted EBITDA*

$

43

$

37

$

74

$

87

$

90

$

241

$

189

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

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















in millions

Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Restructuring, impairments and other charges

$

—

$

—

$

—

$

—

$

(14)

$

—

$

(14)

Selected Segment Items















in millions

Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Cash spent for capital expenditures

$

—

$

(1)

$

(1)

$

—

$

—

$

(2)

$

(1)















Segment Statistics

















Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Net Sales
(millions)

Real Estate

$

37

$

27

$

64

$

80

$

85

$

208

$

172

Energy and Natural Resources

16

19

18

19

16

72

54

Total

$

53

$

46

$

82

$

99

$

101

$

280

$

226

Acres sold

Real Estate

13,257

10,003

35,749

38,226

44,589

97,235

82,687

Price per acre

Real Estate

$

2,403

$

2,714

$

1,784

$

2,076

$

1,903

$

2,079

$

2,072

Weyerhaeuser Company






Wood Products Segment

Q4.2017 Analyst Package









Preliminary results (unaudited)























Segment Statement of Operations
















in millions

Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Sales to unaffiliated customers

$

1,154

$

1,293

$

1,299

$

1,228

$

1,032

$

4,974

$

4,334

Intersegment sales

—

—

—

—

7

—

68

Total net sales

1,154

1,293

1,299

1,228

1,039

4,974

4,402

Cost of products sold

926

1,002

1,005

947

889

3,880

3,688

Gross margin

228

291

294

281

150

1,094

714

Selling expenses

21

19

20

20

21

80

84

General and administrative expenses

32

32

30

32

28

126

109

Research and development expenses

1

—

1

—

—

2

2

Charges for integration and restructuring, closures and asset impairments

1

2

8

2

1

13

7

Charges for product remediation

—

50

190

50

—

290

—

Other operating costs (income), net

1

11

5

(3)

1

14

—

Operating income and Net contribution to earnings

$

172

$

177

$

40

$

180

$

99

$

569

$

512















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















in millions

Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Operating income

$

172

$

177

$

40

$

180

$

99

$

569

$

512

Depreciation, depletion and amortization

35

36

37

37

33

145

129

Special items

—

61

201

41

—

303

—

Adjusted EBITDA*

$

207

$

274

$

278

$

258

$

132

$

1,017

$

641

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

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















in millions

Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Countervailing and antidumping duties

$

—

$

(11)

$

(5)

$

9

$

—

$

(7)

$

—

Restructuring, impairments and other charges

—

—

(6)

—

—

(6)

—

Product remediation

—

(50)

(190)

(50)

—

(290)

—

Total

$

—

$

(61)

$

(201)

$

(41)

$

—

$

(303)

$

—















Selected Segment Items















in millions

Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Total decrease (increase) in working capital(1)

$

(122)

$

113

$

150

$

(81)

$

32

$

60

$

(16)

Cash spent for capital expenditures

$

(44)

$

(61)

$

(71)

$

(123)

$

(145)

$

(299)

$

(297)

(1) Represents the change in prepaid assets, accounts receivable, accounts payable, accrued liabilities and inventory for the Wood Products segment.















Segment Statistics















in millions, except for third party sales realizations

Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Structural Lumber
(board feet)

Third party net sales

$

478

$

538

$

525

$

517

$

427

$

2,058

$

1,839

Third party sales realizations

$

413

$

441

$

448

$

466

$

392

$

442

$

390

Third party sales volumes(2)

1,158

1,218

1,172

1,110

1,089

4,658

4,723

Production volumes

1,152

1,146

1,093

1,118

1,052

4,509

4,516

Engineered Solid
Section
(cubic feet)

Third party net sales

$

117

$

130

$

131

$

122

$

107

$

500

$

450

Third party sales realizations

$

1,881

$

1,979

$

2,047

$

2,076

$

1,930

$

1,995

$

1,934

Third party sales volumes(2)

6.2

6.6

6.4

5.9

5.6

25.1

23.3

Production volumes

6.3

6.6

6.4

5.8

5.6

25.1

22.8

Engineered
I-joists
(lineal feet)

Third party net sales

$

73

$

85

$

93

$

85

$

72

$

336

$

290

Third party sales realizations

$

1,481

$

1,522

$

1,529

$

1,561

$

1,485

$

1,524

$

1,484

Third party sales volumes(2)

49

57

60

54

48

220

195

Production volumes

50

53

58

52

43

213

184

Oriented Strand
Board
(square feet 3/8")

Third party net sales

$

203

$

225

$

243

$

233

$

163

$

904

$

707

Third party sales realizations

$

263

$

295

$

328

$

335

$

255

$

304

$

241

Third party sales volumes(2)

769

764

741

697

638

2,971

2,934

Production volumes

758

754

744

739

651

2,995

2,910

Softwood Plywood

(square feet 3/8")

Third party net sales

$

44

$

47

$

45

$

40

$

41

$

176

$

174

Third party sales realizations

$

377

$

380

$

386

$

417

$

364

$

389

$

368

Third party sales volumes(2)

118

123

117

95

113

453

481

Production volumes

97

99

88

86

92

370

396

Medium Density Fiberboard

(square feet 3/4")

Third party net sales

$

47

$

51

$

48

$

37

$

46

$

183

$

158

Third party sales realizations

$

795

$

845

$

821

$

829

$

779

$

822

$

769

Third party sales volumes(2)

59

60

58

45

58

222

206

Production volumes

56

63

63

50

54

232

209

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

Weyerhaeuser Company





Unallocated Items

Q4.2017 Analyst Package








Preliminary results (unaudited)





















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














Contribution to Earnings














in millions

Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Unallocated corporate function expenses

$

(19)

$

(17)

$

(19)

$

(18)

$

(25)

$

(73)

$

(87)

Unallocated share-based compensation

(6)

—

(1)

(2)

2

(9)

(3)

Unallocated pension service costs

(2)

—

(1)

(1)

(1)

(4)

(5)

Foreign exchange gains (losses)

(3)

—

3

1

(7)

1

6

Elimination of intersegment profit in inventory and LIFO

(6)

(3)

3

(14)

(12)

(20)

(18)

Gain on sale of nonstrategic asset

3

1

4

1

5

9

50

Charges for integration and restructuring, closures and asset impairments:












     Plum Creek merger and integration-related costs

(12)

(2)

(6)

(14)

(14)

(34)

(146)

     Other restructuring, closures and asset impairments

—

—

—

—

—

—

(2)

Other

(8)

(10)

5

28

(8)

15

(37)

Operating income (loss)

(53)

(31)

(12)

(19)

(60)

(115)

(242)

Equity earnings from joint venture(1)

—

—

—

—

—

—

20

Non-operating pension and other postretirement benefit (costs) credits(2)

(22)

(8)

(16)

(16)

11

(62)

48

Interest income and other

9

9

11

10

9

39

43

Net contribution to earnings

$

(66)

$

(30)

$

(17)

$

(25)

$

(40)

$

(138)

$

(131)

(1) 2016 results include equity earnings from our Timberland Venture, which was consolidated as a wholly-owned subsidiary effective August 31, 2016.

(2) During Q1 2017, we adopted ASU 2017-07. This ASU requires us to show components of pension and other post retirement benefit costs (interest, expected return on plan assets, amortization of actuarial gains or losses, amortization of prior service credits or costs) on the Consolidated Statement of Operations as a line item outside of "Operating income." We reclassified these components for all periods presented.














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














in millions

Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Operating income (loss)

$

(53)

$

(31)

$

(12)

$

(19)

$

(60)

$

(115)

$

(242)

Depreciation, depletion and amortization

1

2

2

—

—

5

4

Unallocated pension service costs

2

—

1

1

1

4

5

Special items

12

2

6

(28)

14

(8)

121

Adjusted EBITDA*

$

(38)

$

(27)

$

(3)

$

(46)

$

(45)

$

(114)

$

(112)

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














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














in millions

Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Plum Creek merger and integration-related costs

$

(12)

$

(2)

$

(6)

$

(14)

$

(14)

$

(34)

$

(146)

Gain on sale of timberlands and other nonstrategic assets

—

—

—

—

—

—

36

Legal expense

—

—

—

—

—

—

(11)

Environmental remediation insurance recoveries





42



42

—

Total

$

(12)

$

(2)

$

(6)

$

28

$

(14)

$

8

$

(121)














Unallocated Selected Items














in millions

Q1.2017

Q2.2017

Q3.2017

Q4.2017

Q4.2016

YTD.2017

YTD.2016

Cash spent for capital expenditures

$

(1)

$

—

$

(1)

$

(1)

$

(1)

$

(3)

$

(11)

SOURCE Weyerhaeuser Company

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