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      Weyerhaeuser reports third quarter results

      - Net earnings of $99 million, or $0.13 per diluted share

      - Net earnings before special items of $59 million, or $0.08 per diluted share

      - Announced agreement to sell 555,000 acres of Michigan timberlands for $300 million

      Weyerhaeuser Company logo. (PRNewsFoto/Weyerhaeuser Company)

      News provided by

      Weyerhaeuser Company

      Oct 25, 2019, 03:05 ET

      Share this article

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      SEATTLE, Oct. 25, 2019 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported third quarter net earnings of $99 million, or 13 cents per diluted share, on net sales of $1.7 billion. This compares with net earnings of $255 million, or 34 cents per diluted share, on net sales of $1.9 billion for the same period last year.

      View our earnings release and financial statements in a printer-friendly PDF.

      Excluding a net after-tax benefit of $40 million for special items, primarily relating to a product remediation insurance recovery, the company reported third quarter net earnings of $59 million, or eight cents per diluted share. This compares with net earnings before special items of $214 million for the same period last year and $123 million for the second quarter of 2019.

      Adjusted EBITDA for the third quarter of 2019 was $308 million compared with $505 million for the same period last year and $343 million for the second quarter of 2019.

      "In the third quarter, we again delivered strong operating performance despite challenging market conditions," said Devin W. Stockfish, president and chief executive officer. "We also announced the pending sale of 555,000 acres in Michigan, which will further optimize our timberlands portfolio. Looking forward, we continue to expect that U.S. housing activity will follow a modest growth trajectory. We remain intently focused on achieving operational excellence in every aspect of our business and fully capitalizing on every available market opportunity to drive value for our shareholders."

      WEYERHAEUSER FINANCIAL HIGHLIGHTS


      2019


      2019


      2018

      (millions, except per share data)


      Q2


      Q3


      Q3

      Net sales


      $1,692


      $1,671


      $1,910

      Net earnings


      $128


      $99


      $255

      Net earnings per diluted share


      $0.17


      $0.13


      $0.34

      Weighted average shares outstanding, diluted


      746


      747


      757

      Net earnings before special items(1)(2)


      $123


      $59


      $214

      Net earnings per diluted share before special items(1)


      $0.16


      $0.08


      $0.28

      Adjusted EBITDA(1)


      $343


      $308


      $505



      (1)

      Net earnings before special items is a non-GAAP measure that management believes provides helpful context in understanding the company's earnings performance. Additionally, Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, basis of real estate sold and special items. Net earnings before special items and Adjusted EBITDA should not be considered in isolation from, and are not intended to represent an alternative to, our GAAP results. Reconciliations of Net earnings before special items and Adjusted EBITDA to GAAP earnings are included within this release.



      (2)

      Second quarter 2019 after-tax special items include a $5 million benefit from finalizing the noncash settlement charge incurred in first quarter 2019 related to the transfer of pension assets and liabilities through the purchase of a group annuity contract. Third quarter 2019 after-tax special items include a $51 million benefit related to a product remediation insurance recovery and an $11 million legal charge. Third quarter 2018 after-tax special items include a $41 million tax benefit related to a voluntary contribution to our US qualified pension plan.

      TIMBERLANDS








      FINANCIAL HIGHLIGHTS


      2019


      2019



      (millions)


      Q2


      Q3


      Change

      Net sales


      $532


      $523


      ($9)

      Contribution to pretax earnings


      $102


      $72


      ($30)

      Adjusted EBITDA


      $175


      $154


      ($21)

      Q3 2019 Performance – In the West, average sales realizations for domestic and export logs declined and domestic sales volumes were seasonally lower. Log and haul costs increased as Western harvest activity shifted to higher elevation units. In the South, average sales realizations decreased slightly compared with the second quarter due to mix, and higher fee harvest volumes were partially offset by slightly higher forestry spending.

      Q4 2019 Outlook – Weyerhaeuser expects fourth quarter earnings will be comparable with the third quarter and Adjusted EBITDA will be slightly lower. In the South, the company anticipates lower fee harvest volumes and slightly lower average log sales realizations. In the West, the company expects seasonally lower road and unit logging costs and modestly higher average domestic sales realizations, partially offset by lower log sales volumes.

      In September 2019, the company announced an agreement to sell its 555,000 acres of Michigan timberlands. The transaction is subject to customary closing conditions and is expected to close in the fourth quarter of 2019.

      REAL ESTATE, ENERGY & NATURAL RESOURCES








      FINANCIAL HIGHLIGHTS


      2019


      2019



      (millions)


      Q2


      Q3


      Change

      Net sales


      $81


      $69


      ($12)

      Contribution to pretax earnings


      $35


      $32


      ($3)

      Adjusted EBITDA


      $71


      $60


      ($11)

      Q3 2019 Performance – Earnings and Adjusted EBITDA decreased due to lower real estate sales. The number of acres sold declined and the average price per acre increased due to geographic mix.

      Q4 2019 Outlook – Weyerhaeuser anticipates fourth quarter earnings and Adjusted EBITDA will be lower than the third quarter. The company continues to expect full year 2019 Adjusted EBITDA for the segment will be approximately $270 million.

      WOOD PRODUCTS








      FINANCIAL HIGHLIGHTS


      2019


      2019



      (millions)


      Q2


      Q3


      Change

      Net sales


      $1,210


      $1,204


      ($6)

      Contribution to pretax earnings


      $81


      $143


      $62

      Pretax benefit for special items


      $—


      ($68)


      ($68)

      Contribution to pretax earnings before special items


      $81


      $75


      ($6)

      Adjusted EBITDA


      $128


      $123


      ($5)

      Q3 2019 Performance – Seasonally higher sales volumes for most products were more than offset by higher unit manufacturing costs, primarily due to scheduled downtime in engineered wood products and modest hurricane-related downtime in the company's Southern lumber operations.

      Average sales realizations for oriented strand board and lumber were comparable with the second quarter average, reflecting the company's regional mix. Although the published North Central benchmark price for oriented strand board improved during the third quarter, published pricing for other regions trended lower. Similarly, third quarter price improvement for Southern yellow pine lumber trailed the benchmark Framing Lumber Composite.

      Third quarter special items consist of a $68 million pretax benefit from product remediation insurance proceeds.

      Q4 2019 Outlook – Weyerhaeuser anticipates fourth quarter earnings before special items and Adjusted EBITDA for Wood Products will be lower than the third quarter, but higher than the fourth quarter of 2018, before any improvement in average sales realizations. The company expects seasonally lower sales volumes across most products, higher Western log costs, and modest improvement in other operating costs.

      ABOUT WEYERHAEUSER

      Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control approximately 12 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 2018, we generated $7.5 billion in net sales and employed approximately 9,300 people who serve customers worldwide. We are listed on the Dow Jones Sustainability North America 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 conference call at 7 a.m. Pacific (10 a.m. Eastern) on October 25, 2019, 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 25, 2019.

      To join the conference call from within North America, dial 855-223-0757 (access code: 8899987) at least 15 minutes prior to the call. Those calling from outside North America should dial 574-990-1206 (access code: 8899987). Replays will be available for two weeks at 855-859-2056 (access code: 8899987) from within North America and at 404-537-3406 (access code: 8899987) 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: our earnings, earnings before special items, Adjusted EBITDA; average log sale realizations; log sale volumes; fee harvest volumes as well as road and logging costs in our timber business; sales volumes as well as log and manufacturing operating costs for Wood Products. 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 Japanese yen, the Chinese yuan and the Canadian dollar, and the relative value of the euro to the yen;
      • restrictions on international trade and tariffs imposed on imports or exports;
      • the availability and cost of shipping and transportation;
      • economic activity in Asia, especially Japan and China;
      • performance of our manufacturing operations, including maintenance and capital 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;
      • changes in global or regional climate conditions and governmental response to such changes;
      • the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;
      • energy prices;
      • our operational excellence 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;
      • the accuracy of our estimates of costs and expenses related to contingent liabilities;
      • changes in accounting principles; and
      • other matters described under "Risk Factors" in our annual reports 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 - Nancy Thompson (919) 861-0342

      RECONCILIATION OF ADJUSTED EBITDA TO NET EARNINGS (LOSS)

      We reconcile Adjusted EBITDA to net earnings (loss) for the consolidated company and to operating income (loss) 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 quarter ended June 30, 2019:

       (millions)


      Timberlands



      Real Estate

      & ENR



      Wood

      Products



      Unallocated

      Items



      Total


      Adjusted EBITDA by Segment:





















      Net earnings


















      $

      128


      Interest expense, net of capitalized interest



















      91


      Income taxes



















      (37)


      Net contribution to earnings (loss)


      $

      102



      $

      35



      $

      81



      $

      (36)



      $

      182


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



      —




      —




      —




      10




      10


      Interest income and other



      —




      —




      —




      (6)




      (6)


      Operating income (loss)



      102




      35




      81




      (32)




      186


      Depreciation, depletion and amortization



      73




      3




      47




      1




      124


      Basis of real estate sold



      —




      33




      —




      —




      33


      Adjusted EBITDA


      $

      175



      $

      71



      $

      128



      $

      (31)



      $

      343




      (1)

      Non-operating pension and other postretirement benefit costs includes a pretax special item consisting of a $6 million benefit from finalizing the noncash settlement charge incurred in first quarter 2019 related to the transfer of pension assets and liabilities through the purchase of a group annuity contract.

      The table below reconciles Adjusted EBITDA for the quarter ended September 30, 2019:

       (millions)


      Timberlands



      Real Estate

      & ENR



      Wood

      Products



      Unallocated

      Items



      Total


      Adjusted EBITDA by Segment:





















      Net earnings


















      $

      99


      Interest expense, net of capitalized interest



















      91


      Income taxes



















      3


      Net contribution to earnings (loss)


      $

      72



      $

      32



      $

      143



      $

      (54)



      $

      193


      Non-operating pension and other postretirement benefit costs



      —




      —




      —




      15




      15


      Interest income and other



      —




      —




      —




      (6)




      (6)


      Operating income (loss)



      72




      32




      143




      (45)




      202


      Depreciation, depletion and amortization



      82




      4




      48




      1




      135


      Basis of real estate sold



      —




      24




      —




      —




      24


      Special items included in operating income (loss)(1)



      —




      —




      (68)




      15




      (53)


      Adjusted EBITDA


      $

      154



      $

      60



      $

      123



      $

      (29)



      $

      308




      (1)

      Operating income (loss) includes pretax special items consisting of a $68 million product remediation insurance recovery and a $15 million legal charge.

       The table below reconciles Adjusted EBITDA for the quarter ended September 30, 2018:

       (millions)


      Timberlands



      Real Estate

      & ENR



      Wood

      Products



      Unallocated

      Items



      Total


      Adjusted EBITDA by Segment:





















      Net earnings


















      $

      255


      Interest expense, net of capitalized interest



















      93


      Income taxes(1)



















      (15)


      Net contribution to earnings (loss)


      $

      126



      $

      36



      $

      213



      $

      (42)



      $

      333


      Non-operating pension and other postretirement benefit costs



      —




      —




      —




      17




      17


      Interest income and other



      —




      —




      —




      (13)




      (13)


      Operating income (loss)



      126




      36




      213




      (38)




      337


      Depreciation, depletion and amortization



      80




      4




      37




      1




      122


      Basis of real estate sold



      —




      46




      —




      —




      46


      Adjusted EBITDA


      $

      206



      $

      86



      $

      250



      $

      (37)



      $

      505




      (1)

      Income taxes includes a $41 million tax benefit related to our $300 million pension contribution. There were no pretax special items in third quarter 2018.

      RECONCILIATION OF NET EARNINGS BEFORE SPECIAL ITEMS TO NET EARNINGS

      We reconcile net earnings before special items to net earnings and net earnings per diluted share before special items to net earnings per diluted share, as those are the most directly comparable U.S. GAAP measures. We believe the measures provide meaningful supplemental information for investors about our operating performance, better facilitate period to period comparisons, and are widely used by analysts, lenders, rating agencies and other interested parties.

      The table below reconciles net earnings before special items to net earnings:



      2019


      2019


      2018

      (millions)


      Q2


      Q3


      Q3

      Net earnings


      $128


      $99


      $255

      Legal charge


      —


      11


      —

      Pension settlement charge


      (5)


      —


      —

      Product remediation recovery


      —


      (51)


      —

      Tax adjustment


      —


      —


      (41)

      Net earnings before special items


      $123


      $59


      $214

      The table below reconciles net earnings per diluted share before special items to net earnings per diluted share:



      2019


      2019


      2018



      Q2


      Q3


      Q3

      Net earnings per diluted share


      $0.17


      $0.13


      $0.34

      Legal charge


      —


      0.02


      —

      Pension settlement charge


      (0.01)


      —


      —

      Product remediation recovery


      —


      (0.07)


      —

      Tax adjustment


      —


      —


      (0.06)

      Net earnings per diluted share before special items


      $0.16


      $0.08


      $0.28

      Weyerhaeuser Company

      Exhibit 99.2

      Q3.2019 Analyst Package

      Preliminary results (unaudited)


      Consolidated Statement of Operations




      Q1



      Q2



      Q3



      Year-to-Date


      in millions


      March 31,

      2019



      June 30,

      2019



      September 30,

      2019



      September 30,

      2018



      September 30,

      2019



      September 30,

      2018


      Net sales


      $

      1,643



      $

      1,692



      $

      1,671



      $

      1,910



      $

      5,006



      $

      5,840


      Costs of sales



      1,322




      1,390




      1,399




      1,452




      4,111




      4,247


      Gross margin



      321




      302




      272




      458




      895




      1,593


      Selling expenses



      21




      21




      20




      20




      62




      66


      General and administrative expenses



      89




      80




      85




      78




      254




      236


      Research and development expenses



      1




      2




      1




      2




      4




      6


      Product remediation recoveries, net



      —




      —




      (68)




      —




      (68)




      —


      Other operating costs, net



      36




      13




      32




      21




      81




      68


      Operating income



      174




      186




      202




      337




      562




      1,217


      Non-operating pension and other

      postretirement benefit costs



      (470)




      (10)




      (15)




      (17)




      (495)




      (54)


      Interest income and other



      10




      6




      6




      13




      22




      36


      Interest expense, net of capitalized interest



      (107)




      (91)




      (91)




      (93)




      (289)




      (278)


      Earnings (loss) before income taxes



      (393)




      91




      102




      240




      (200)




      921


      Income taxes



      104




      37




      (3)




      15




      138




      (80)


      Net earnings (loss)


      $

      (289)



      $

      128



      $

      99



      $

      255



      $

      (62)



      $

      841



      Per Share Information





      Q1



      Q2



      Q3



      Year-to-Date




      March 31,

      2019



      June 30,

      2019



      September 30,

      2019



      September 30,

      2018



      September 30,

      2019



      September 30,

      2018


      Earnings (loss) per share, basic and diluted


      $

      (0.39)



      $

      0.17



      $

      0.13



      $

      0.34



      $

      (0.08)



      $

      1.11


      Dividends paid per common share


      $

      0.34



      $

      0.34



      $

      0.34



      $

      0.34



      $

      1.02



      $

      0.98


      Weighted average shares outstanding (in thousands):

























      Basic



      746,603




      745,486




      745,626




      754,986




      745,901




      756,531


      Diluted



      746,603




      746,232




      746,514




      757,389




      745,901




      759,116


      Common shares outstanding at end of period (in thousands)



      744,767




      744,905




      745,071




      749,199




      745,071




      749,199



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




      Q1



      Q2



      Q3



      Year-to-Date


      in millions


      March 31,

      2019



      June 30,

      2019



      September 30,

      2019



      September 30,

      2018



      September 30,

      2019



      September 30,

      2018


      Net earnings (loss)


      $

      (289)



      $

      128



      $

      99



      $

      255



      $

      (62)



      $

      841


      Non-operating pension and other postretirement benefit costs



      470




      10




      15




      17




      495




      54


      Interest income and other



      (10)




      (6)




      (6)




      (13)




      (22)




      (36)


      Interest expense, net of capitalized interest



      107




      91




      91




      93




      289




      278


      Income taxes



      (104)




      (37)




      3




      (15)




      (138)




      80


      Operating income



      174




      186




      202




      337




      562




      1,217


      Depreciation, depletion and amortization



      123




      124




      135




      122




      382




      361


      Basis of real estate sold



      48




      33




      24




      46




      105




      80


      Special items included in operating income



      20




      —




      (53)




      —




      (33)




      28


      Adjusted EBITDA(1)


      $

      365



      $

      343



      $

      308



      $

      505



      $

      1,016



      $

      1,686




      (1)

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

      Weyerhaeuser Company

      Total Company Statistics

      Q3.2019 Analyst Package

      Preliminary results (unaudited)


      Special Items Included in Net Earnings (Income Tax Affected)




      Q1



      Q2



      Q3



      Year-to-Date


      in millions


      March 31,

      2019



      June 30,

      2019



      September 30,

      2019



      September 30,

      2018



      September 30,

      2019



      September 30,

      2018


      Net earnings (loss)


      $

      (289)



      $

      128



      $

      99



      $

      255



      $

      (62)



      $

      841


      Early extinguishment of debt charge(1)



      9




      —




      —




      —




      9




      —


      Environmental remediation charge



      —




      —




      —




      —




      —




      21


      Legal charges



      15




      —




      11




      —




      26




      —


      Pension settlement charges



      345




      (5)




      —




      —




      340




      —


      Product remediation recoveries, net



      —




      —




      (51)




      —




      (51)




      —


      Tax adjustment



      —




      —




      —




      (41)




      —




      (41)


      Net earnings before special items(2)


      $

      80



      $

      123



      $

      59



      $

      214



      $

      262



      $

      821





      Q1



      Q2



      Q3



      Year-to-Date




      March 31,

      2019



      June 30,

      2019



      September 30,

      2019



      September 30,

      2018



      September 30,

      2019



      September 30,

      2018


      Net earnings (loss) per diluted share


      $

      (0.39)



      $

      0.17



      $

      0.13



      $

      0.34



      $

      (0.08)



      $

      1.11


      Early extinguishment of debt charge(1)



      0.01




      —




      —




      —




      0.01




      —


      Environmental remediation charge



      —




      —




      —




      —




      —




      0.03


      Legal charges



      0.02




      —




      0.02




      —




      0.04




      —


      Pension settlement charges



      0.47




      (0.01)




      —




      —




      0.46




      —


      Product remediation recoveries, net



      —




      —




      (0.07)




      —




      (0.07)




      —


      Tax adjustment



      —




      —




      —




      (0.06)




      —




      (0.06)


      Net earnings per diluted share before special items(2)


      $

      0.11



      $

      0.16



      $

      0.08



      $

      0.28



      $

      0.36



      $

      1.08




      (1)

      During first quarter 2019, we recorded a $12 million pretax ($9 million after-tax) charge related to the early extinguishment of debt. This charge is included in Interest expense, net of capitalized interest in the Consolidated Statement of Operations.

      (2)

      Net earnings before special items is a non-GAAP measure that management believes provides helpful context in understanding the company's earnings performance. Net earnings before special items should not be considered in isolation from, and is not intended to represent an alternative to, our GAAP results.


      Selected Total Company Items




      Q1



      Q2



      Q3



      Year-to-Date


      in millions


      March 31,

      2019



      June 30,

      2019



      September 30,

      2019



      September 30,

      2018



      September 30,

      2019



      September 30,

      2018


      Pension and postretirement costs:

























      Pension and postretirement service costs


      $

      8



      $

      8



      $

      8



      $

      10



      $

      24



      $

      28


      Non-operating pension and other postretirement benefit costs



      470




      10




      15




      17




      495




      54


      Total company pension and postretirement costs


      $

      478



      $

      18



      $

      23



      $

      27



      $

      519



      $

      82


      Weyerhaeuser Company

      Q3.2019 Analyst Package

      Preliminary results (unaudited)


      Consolidated Balance Sheet


      in millions


      March 31,

      2019



      June 30,

      2019



      September 30,

      2019



      December 31,

      2018


      ASSETS

















      Current assets:

















      Cash and cash equivalents


      $

      259



      $

      212



      $

      153



      $

      334


      Receivables, less discounts and allowances



      398




      408




      368




      337


      Receivables for taxes



      163




      157




      149




      137


      Inventories



      451




      425




      393




      389


      Assets held for sale



      —




      —




      251




      —


      Prepaid expenses and other current assets



      141




      132




      141




      152


      Current restricted financial investments held by variable interest entities



      362




      362




      362




      253


      Total current assets



      1,774




      1,696




      1,817




      1,602


      Property and equipment, net



      1,917




      1,901




      1,860




      1,857


      Construction in progress



      102




      134




      187




      136


      Timber and timberlands at cost, less depletion



      12,586




      12,516




      12,192




      12,671


      Minerals and mineral rights, less depletion



      291




      288




      284




      294


      Deferred tax assets



      18




      33




      31




      15


      Other assets



      444




      461




      461




      312


      Restricted financial investments held by variable interest entities



      —




      —




      —




      362


      Total assets


      $

      17,132



      $

      17,029



      $

      16,832



      $

      17,249



















      LIABILITIES AND EQUITY

















      Current liabilities:

















      Current maturities of long-term debt


      $

      —



      $

      —



      $

      —



      $

      500


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



      302




      302




      —




      302


      Borrowings on line of credit



      245




      140




      440




      425


      Accounts payable



      243




      271




      242




      222


      Accrued liabilities



      411




      510




      487




      490


      Total current liabilities



      1,201




      1,223




      1,169




      1,939


      Long-term debt, net



      6,156




      6,153




      6,150




      5,419


      Deferred tax liabilities



      34




      17




      25




      43


      Deferred pension and other postretirement benefits



      542




      515




      506




      527


      Other liabilities



      398




      397




      383




      275


      Total liabilities



      8,331




      8,305




      8,233




      8,203


      Total equity



      8,801




      8,724




      8,599




      9,046


      Total liabilities and equity


      $

      17,132



      $

      17,029



      $

      16,832



      $

      17,249


      Weyerhaeuser Company

      Q3.2019 Analyst Package

      Preliminary results (unaudited)


      Consolidated Statement of Cash Flows




      Q1



      Q2



      Q3



      Year-to-Date


      in millions


      March 31,

      2019



      June 30,

      2019



      September 30,

      2019



      September 30,

      2018



      September 30,

      2019



      September 30,

      2018


      Cash flows from operations:

























      Net earnings (loss)


      $

      (289)



      $

      128



      $

      99



      $

      255



      $

      (62)



      $

      841


      Noncash charges to earnings (loss):

























      Depreciation, depletion and amortization



      123




      124




      135




      122




      382




      361


      Basis of real estate sold



      48




      33




      24




      46




      105




      80


      Deferred income taxes, net



      (123)




      (43)




      2




      86




      (164)




      111


      Pension and other postretirement benefits



      478




      18




      23




      27




      519




      82


      Share-based compensation expense



      9




      7




      7




      13




      23




      31


      Change in:

























      Receivables, less allowances



      (77)




      (10)




      40




      46




      (47)




      (55)


      Receivables and payables for taxes



      (31)




      6




      7




      (124)




      (18)




      (109)


      Inventories



      (60)




      28




      30




      27




      (2)




      (9)


      Prepaid expenses and other current assets



      (5)




      8




      2




      (6)




      5




      (7)


      Accounts payable and accrued liabilities



      (82)




      127




      (58)




      (63)




      (13)




      (133)


      Pension and postretirement benefit contributions and payments



      (14)




      (13)




      (9)




      (323)




      (36)




      (355)


      Other



      9




      (17)




      (10)




      (19)




      (18)




      (18)


      Net cash from operations


      $

      (14)



      $

      396



      $

      292



      $

      87



      $

      674



      $

      820


      Cash flows from investing activities:

























      Capital expenditures for property and equipment


      $

      (41)



      $

      (71)



      $

      (87)



      $

      (94)



      $

      (199)



      $

      (238)


      Capital expenditures for timberlands reforestation



      (18)




      (13)




      (11)




      (11)




      (42)




      (45)


      Proceeds from note receivable held by variable interest entities



      253




      —




      —




      —




      253




      —


      Other



      18




      1




      1




      (10)




      20




      19


      Net cash from investing activities


      $

      212



      $

      (83)



      $

      (97)



      $

      (115)



      $

      32



      $

      (264)


      Cash flows from financing activities:

























      Cash dividends on common shares


      $

      (254)



      $

      (253)



      $

      (253)



      $

      (256)



      $

      (760)



      $

      (741)


      Net proceeds from issuance of long-term debt



      739




      —




      —




      —




      739




      —


      Payments of long-term debt



      (512)




      —




      —




      —




      (512)




      (62)


      Proceeds from borrowings on line of credit



      245




      140




      490




      —




      875




      —


      Payments on line of credit



      (425)




      (245)




      (190)




      —




      (860)




      —


      Payments on debt held by variable interest entities



      —




      —




      (302)




      —




      (302)




      —


      Proceeds from exercise of stock options



      2




      2




      4




      4




      8




      52


      Repurchases of common shares



      (60)




      —




      —




      (273)




      (60)




      (273)


      Other



      (8)




      (4)




      (3)




      —




      (15)




      (8)


      Net cash from financing activities


      $

      (273)



      $

      (360)



      $

      (254)



      $

      (525)



      $

      (887)



      $

      (1,032)



























      Net change in cash and cash equivalents


      $

      (75)



      $

      (47)



      $

      (59)



      $

      (553)



      $

      (181)



      $

      (476)


      Cash and cash equivalents at beginning of period



      334




      259




      212




      901




      334




      824


      Cash and cash equivalents at end of period


      $

      259



      $

      212



      $

      153



      $

      348



      $

      153



      $

      348



























      Cash paid during the period for:

























      Interest, net of amount capitalized


      $

      127



      $

      59



      $

      124



      $

      113



      $

      310



      $

      285


      Income taxes


      $

      50



      $

      1



      $

      (5)



      $

      22



      $

      46



      $

      80


      Weyerhaeuser Company

      Timberlands Segment

      Q3.2019 Analyst Package

      Preliminary results (unaudited)


      Segment Statement of Operations (1)


      in millions


      Q1.2019



      Q2.2019



      Q3.2019



      Q3.2018



      YTD.2019



      YTD.2018


      Sales to unaffiliated customers


      $

      431



      $

      401



      $

      398



      $

      459



      $

      1,230



      $

      1,425


      Intersegment sales



      125




      131




      125




      128




      381




      409


      Total net sales



      556




      532




      523




      587




      1,611




      1,834


      Costs of sales



      413




      405




      429




      436




      1,247




      1,289


      Gross margin



      143




      127




      94




      151




      364




      545


      Selling expenses



      1




      —




      —




      1




      1




      2


      General and administrative expenses



      22




      25




      24




      23




      71




      69


      Research and development expenses



      1




      1




      1




      2




      3




      5


      Other operating income, net



      (1)




      (1)




      (3)




      (1)




      (5)




      (7)


      Operating income and Net contribution to earnings


      $

      120



      $

      102



      $

      72



      $

      126



      $

      294



      $

      476




      (1)

      In January 2019, we changed the way we report our Canadian Forestlands operations, which are primarily operated to supply Weyerhaeuser's Canadian Wood Products manufacturing facilities. As a result, we no longer report related intersegment sales in the Timberlands segment and we now record the minimal associated third-party log sales in the Wood Products segment. These collective transactions did not contribute any earnings to the Timberlands segment. We have conformed prior year presentations with the current year.


      Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(2)


      in millions


      Q1.2019



      Q2.2019



      Q3.2019



      Q3.2018



      YTD.2019



      YTD.2018


      Operating income


      $

      120



      $

      102



      $

      72



      $

      126



      $

      294



      $

      476


      Depreciation, depletion and amortization



      73




      73




      82




      80




      228




      238


      Adjusted EBITDA(2)


      $

      193



      $

      175



      $

      154



      $

      206



      $

      522



      $

      714




      (2)

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


      Selected Segment Items


      in millions


      Q1.2019



      Q2.2019



      Q3.2019



      Q3.2018



      YTD.2019



      YTD.2018


      Total decrease (increase) in working capital(3)


      $

      (24)



      $

      46



      $

      2



      $

      (32)



      $

      24



      $

      (2)


      Cash spent for capital expenditures


      $

      (26)



      $

      (25)



      $

      (28)



      $

      (25)



      $

      (79)



      $

      (82)




      (3)

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

      Segment Statistics(4)






      Q1.2019



      Q2.2019



      Q3.2019



      Q3.2018



      YTD.2019



      YTD.2018


      Third Party


      Delivered logs:

























      Net Sales


      West


      $

      205



      $

      194



      $

      172



      $

      238



      $

      571



      $

      766


      (millions)


      South



      159




      156




      168




      157




      483




      472




      North



      29




      17




      24




      25




      70




      70




      Total delivered logs



      393




      367




      364




      420




      1,124




      1,308




      Stumpage and pay-as-cut timber



      9




      10




      10




      13




      29




      39




      Recreational and other lease revenue



      15




      15




      15




      16




      45




      44




      Other revenue



      14




      9




      9




      10




      32




      34




      Total


      $

      431



      $

      401



      $

      398



      $

      459



      $

      1,230



      $

      1,425


      Delivered Logs


      West


      $

      106.92



      $

      104.07



      $

      99.07



      $

      125.67



      $

      103.50



      $

      129.91


      Third Party Sales


      South


      $

      35.35



      $

      35.45



      $

      35.03



      $

      34.88



      $

      35.27



      $

      34.75


      Realizations (per ton)


      North


      $

      59.68



      $

      62.10



      $

      57.35



      $

      60.97



      $

      59.37



      $

      62.00


      Delivered Logs


      West



      1,920




      1,864




      1,729




      1,897




      5,513




      5,900


      Third Party Sales


      South



      4,499




      4,400




      4,795




      4,521




      13,694




      13,591


      Volumes (tons, thousands)


      North



      494




      263




      429




      414




      1,186




      1,131


      Fee Harvest Volumes


      West



      2,385




      2,455




      2,183




      2,305




      7,023




      7,108


      (tons, thousands)


      South



      6,492




      6,367




      6,802




      6,478




      19,661




      19,859




      North



      627




      378




      560




      537




      1,565




      1,509




      (4)

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

      Weyerhaeuser Company

      Real Estate, Energy & Natural Resources Segment

      Q3.2019 Analyst Package

      Preliminary results (unaudited)


      Segment Statement of Operations


      in millions


      Q1.2019



      Q2.2019



      Q3.2019



      Q3.2018



      YTD.2019



      YTD.2018


      Net sales


      $

      118



      $

      81



      $

      69



      $

      96



      $

      268



      $

      205


      Costs of sales



      56




      39




      32




      54




      127




      103


      Gross margin



      62




      42




      37




      42




      141




      102


      General and administrative expenses



      7




      7




      6




      6




      20




      19


      Other operating income, net



      —




      —




      (1)




      —




      (1)




      —


      Operating income and Net contribution to earnings


      $

      55



      $

      35



      $

      32



      $

      36



      $

      122



      $

      83



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


      in millions


      Q1.2019



      Q2.2019



      Q3.2019



      Q3.2018



      YTD.2019



      YTD.2018


      Operating income


      $

      55



      $

      35



      $

      32



      $

      36



      $

      122



      $

      83


      Depreciation, depletion and amortization



      3




      3




      4




      4




      10




      11


      Basis of real estate sold



      48




      33




      24




      46




      105




      80


      Adjusted EBITDA(1)


      $

      106



      $

      71



      $

      60



      $

      86



      $

      237



      $

      174




      (1)

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


      Selected Segment Items


      in millions


      Q1.2019



      Q2.2019



      Q3.2019



      Q3.2018



      YTD.2019



      YTD.2018


      Cash spent for capital expenditures


      $

      —



      $

      —



      $

      —



      $

      —



      $

      —



      $

      —



























      Segment Statistics





      Q1.2019



      Q2.2019



      Q3.2019



      Q3.2018



      YTD.2019



      YTD.2018


      Net Sales

      Real Estate


      $

      96



      $

      59



      $

      45



      $

      76



      $

      200



      $

      148


      (millions)

      Energy and Natural Resources



      22




      22




      24




      20




      68




      57



      Total


      $

      118



      $

      81



      $

      69



      $

      96



      $

      268



      $

      205


      Acres Sold

      Real Estate



      38,834




      47,031




      18,057




      61,681




      103,922




      99,742


      Price per Acre

      Real Estate


      $

      2,424



      $

      1,063



      $

      2,415



      $

      1,209



      $

      1,806



      $

      1,452


      Basis as a Percent of Real Estate Net Sales

      Real Estate



      50

      %



      56

      %



      53

      %



      61

      %



      53

      %



      54

      %

      Weyerhaeuser Company

      Wood Products Segment

      Q3.2019 Analyst Package

      Preliminary results (unaudited)


      Segment Statement of Operations (1)


      in millions


      Q1.2019



      Q2.2019



      Q3.2019



      Q3.2018



      YTD.2019



      YTD.2018


      Net sales


      $

      1,094



      $

      1,210



      $

      1,204



      $

      1,355



      $

      3,508



      $

      4,210


      Costs of sales



      967




      1,070




      1,067




      1,080




      3,104




      3,225


      Gross margin



      127




      140




      137




      275




      404




      985


      Selling expenses



      19




      20




      20




      18




      59




      61


      General and administrative expenses



      35




      34




      35




      32




      104




      97


      Research and development expenses



      —




      1




      —




      —




      1




      1


      Product remediation recoveries, net



      —




      —




      (68)




      —




      (68)




      —


      Other operating costs, net



      4




      4




      7




      12




      15




      14


      Operating income and Net contribution to earnings


      $

      69



      $

      81



      $

      143



      $

      213



      $

      293



      $

      812




      (1)

      In January 2019, we changed the way we report our Canadian Forestlands operations, which are primarily operated to supply Weyerhaeuser's Canadian Wood Products manufacturing facilities. As a result, we now record the minimal associated third-party log sales in the Wood Products segment. These transactions do not contribute any earnings to the Wood Products segment. We have conformed prior year presentations with the current year.


      Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(2)


      in millions


      Q1.2019



      Q2.2019



      Q3.2019



      Q3.2018



      YTD.2019



      YTD.2018


      Operating income


      $

      69



      $

      81



      $

      143



      $

      213



      $

      293



      $

      812


      Depreciation, depletion and amortization



      46




      47




      48




      37




      141




      109


      Special items



      —




      —




      (68)




      —




      (68)




      —


      Adjusted EBITDA(2)


      $

      115



      $

      128



      $

      123



      $

      250



      $

      366



      $

      921




      (2)

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


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


      in millions


      Q1.2019



      Q2.2019



      Q3.2019



      Q3.2018



      YTD.2019



      YTD.2018


      Product remediation recoveries, net


      $

      —



      $

      —



      $

      68



      $

      —



      $

      68



      $

      —




























      Selected Segment Items


      in millions


      Q1.2019



      Q2.2019



      Q3.2019



      Q3.2018



      YTD.2019



      YTD.2018


      Total decrease (increase) in working capital(3)


      $

      (155)



      $

      75



      $

      32



      $

      71



      $

      (48)



      $

      (152)


      Cash spent for capital expenditures


      $

      (30)



      $

      (53)



      $

      (65)



      $

      (79)



      $

      (148)



      $

      (199)



      (3)

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

      Segment Statistics


      in millions, except for third party sales realizations


      Q1.2019



      Q2.2019



      Q3.2019



      Q3.2018



      YTD.2019



      YTD.2018


      Structural Lumber

      Third party net sales


      $

      444



      $

      495



      $

      487



      $

      581



      $

      1,426



      $

      1,831


      (volumes presented

      Third party sales realizations


      $

      392



      $

      388



      $

      389



      $

      491



      $

      390



      $

      511


      in board feet)

      Third party sales volumes(4)



      1,133




      1,274




      1,253




      1,184




      3,660




      3,585



      Production volumes



      1,145




      1,193




      1,189




      1,106




      3,527




      3,446


      Engineered Solid

      Third party net sales


      $

      116



      $

      134



      $

      138



      $

      132



      $

      388



      $

      400


      Section

      Third party sales realizations


      $

      2,218



      $

      2,214



      $

      2,188



      $

      2,208



      $

      2,206



      $

      2,150


      (volumes presented

      Third party sales volumes(4)



      5.2




      6.1




      6.3




      6.0




      17.6




      18.6


      in cubic feet)

      Production volumes



      5.9




      6.0




      5.3




      6.3




      17.2




      19.0


      Engineered

      Third party net sales


      $

      70



      $

      86



      $

      90



      $

      91



      $

      246



      $

      261


      I-joists

      Third party sales realizations


      $

      1,709



      $

      1,662



      $

      1,665



      $

      1,668



      $

      1,676



      $

      1,629


      (volumes presented

      Third party sales volumes(4)



      41




      52




      54




      54




      147




      160


      in lineal feet)

      Production volumes



      44




      47




      48




      46




      139




      154


      Oriented Strand

      Third party net sales


      $

      160



      $

      156



      $

      159



      $

      215



      $

      475



      $

      724


      Board

      Third party sales realizations


      $

      223



      $

      213



      $

      214



      $

      321



      $

      217



      $

      335


      (volumes presented

      Third party sales volumes(4)



      717




      733




      740




      669




      2,190




      2,162


      in square feet 3/8")

      Production volumes



      729




      736




      747




      665




      2,212




      2,146


      Softwood Plywood

      Third party net sales


      $

      44



      $

      44



      $

      42



      $

      53



      $

      130



      $

      158


      (volumes presented

      Third party sales realizations


      $

      383



      $

      380



      $

      346



      $

      439



      $

      369



      $

      446


      in square feet 3/8")

      Third party sales volumes(4)



      115




      115




      121




      122




      351




      355



      Production volumes



      98




      104




      100




      106




      302




      308


      Medium Density

      Third party net sales


      $

      38



      $

      45



      $

      44



      $

      48



      $

      127



      $

      138


      Fiberboard

      Third party sales realizations


      $

      846



      $

      833



      $

      831



      $

      828



      $

      836



      $

      835


      (volumes presented

      Third party sales volumes(4)



      44




      55




      53




      59




      152




      165


      in square feet 3/4")

      Production volumes



      45




      61




      47




      61




      153




      168



      (4)

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


      Weyerhaeuser Company

      Unallocated Items

      Q3.2019 Analyst Package

      Preliminary results (unaudited)


      Unallocated items are gains or charges not related to, or allocated to, an individual operating segment. They include all or a portion of items such as share-based compensation, pension and postretirement costs, elimination of intersegment profit in inventory and LIFO, foreign exchange transaction gains and losses, interest income and other as well as legacy obligations.


      Contribution to Earnings


      in millions


      Q1.2019



      Q2.2019



      Q3.2019



      Q3.2018



      YTD.2019



      YTD.2018


      Unallocated corporate function and variable compensation expense


      $

      (19)



      $

      (12)



      $

      (19)



      $

      (19)



      $

      (50)



      $

      (56)


      Liability classified share-based compensation



      (4)




      —




      (1)




      4




      (5)




      2


      Foreign exchange gain (loss)



      (3)




      2




      (1)




      (2)




      (2)




      (2)


      Elimination of intersegment profit in inventory and LIFO



      (5)




      (5)




      6




      —




      (4)




      (18)


      Other, net



      (39)




      (17)




      (30)




      (21)




      (86)




      (80)


      Operating income (loss)



      (70)




      (32)




      (45)




      (38)




      (147)




      (154)


      Non-operating pension and other postretirement benefit costs



      (470)




      (10)




      (15)




      (17)




      (495)




      (54)


      Interest income and other



      10




      6




      6




      13




      22




      36


      Net contribution to earnings (loss)


      $

      (530)



      $

      (36)



      $

      (54)



      $

      (42)



      $

      (620)



      $

      (172)



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


      in millions


      Q1.2019



      Q2.2019



      Q3.2019



      Q3.2018



      YTD.2019



      YTD.2018


      Operating income (loss)


      $

      (70)



      $

      (32)



      $

      (45)



      $

      (38)



      $

      (147)



      $

      (154)


      Depreciation, depletion and amortization



      1




      1




      1




      1




      3




      3


      Special items



      20




      —




      15




      —




      35




      28


      Adjusted EBITDA(1)


      $

      (49)



      $

      (31)



      $

      (29)



      $

      (37)



      $

      (109)



      $

      (123)



      (1)

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



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


      in millions


      Q1.2019



      Q2.2019



      Q3.2019



      Q3.2018



      YTD.2019



      YTD.2018


      Environmental remediation insurance charge


      $

      —



      $

      —



      $

      —



      $

      —



      $

      —



      $

      (28)


      Legal charges



      (20)




      —




      (15)




      —




      (35)



      —


      Special items included in operating income (loss)



      (20)




      —




      (15)




      —




      (35)




      (28)


      Pension settlement charges(2)



      (455)




      6




      —




      —




      (449)



      —


      Special items included in net contribution to earnings (loss)


      $

      (475)



      $

      6



      $

      (15)



      $

      —



      $

      (484)



      $

      (28)




      (2)

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


      Unallocated Selected Items


      in millions


      Q1.2019



      Q2.2019



      Q3.2019



      Q3.2018



      YTD.2019



      YTD.2018


      Cash spent for capital expenditures


      $

      (3)



      $

      (6)



      $

      (5)



      $

      (1)



      $

      (14)



      $

      (2)



























      SOURCE Weyerhaeuser Company

      Modal title

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