EX-99.2 3 wy2016q3ex-992.htm EXHIBIT 99.2 Exhibit


Weyerhaeuser Company
 
 
 
 
Exhibit 99.2
 
Q3.2016 Analyst Package
 
 
 
 

 
Preliminary results (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statement of Operations(1)(2)
 
 
 
 
 
 
 
 
 
 
in millions
Q2
 
Q3
 
Year-to-date
 
June 30,
2016
 
September 30,
2016
 
September 30,
2015
 
September 30,
2016
 
September 30,
2015
Net sales
$
1,655

 
$
1,709

 
$
1,355

 
$
4,769

 
$
3,980

Cost of products sold
1,258

 
1,314

 
1,073

 
3,661

 
3,123

Gross margin
397

 
395

 
282

 
1,108

 
857

Selling expenses
22

 
22

 
24

 
67

 
73

General and administrative expenses
94

 
78

 
55

 
248

 
184

Research and development expenses
4

 
5

 
4

 
14

 
12

Charges for integration and restructuring, closures and asset impairments
14

 
16

 
2

 
141

 
16

Other operating costs (income), net
5

 
—

 
31

 
(47
)
 
56

Operating income from continuing operations
258

 
274

 
166

 
685

 
516

Equity earnings from joint ventures
7

 
9

 
—

 
21

 
—

Interest income and other
10

 
15

 
9

 
34

 
27

Interest expense, net of capitalized interest
(114
)
 
(114
)
 
(87
)
 
(323
)
 
(254
)
Earnings from continuing operations before income taxes
161

 
184

 
88

 
417

 
289

Income taxes
(31
)
 
(22
)
 
44

 
(64
)
 
36

Earnings from continuing operations
130

 
162

 
132

 
353

 
325

Earnings from discontinued operations, net of income taxes
38

 
65

 
59

 
123

 
111

Net earnings
168

 
227

 
191

 
476

 
436

Dividends on preference shares
(11
)
 
—

 
(11
)
 
(22
)
 
(33
)
Net earnings attributable to Weyerhaeuser common shareholders
$
157

 
$
227

 
$
180

 
$
454

 
$
403

(1) Discontinued operations as presented herein consist of the operations of our Cellulose Fibers segment. The corresponding assets and liabilities have been classified as held for sale on our balance sheet as of June 30, 2016. All periods presented have been revised to separate the results of discontinued operations from the results of our continuing operations. Detailed operating results of discontinued operations are presented on page 10.
(2) Amounts presented reflect the balances and results of operations acquired in our merger with Plum Creek Timber, Inc., beginning on the merger date of February 19, 2016.
 
Per Share Information
 
 
Q2
 
Q3
 
Year-to-date
 
June 30,
2016
 
September 30,
2016
 
September 30,
2015
 
September 30,
2016
 
September 30,
2015
Earnings per share attributable to Weyerhaeuser common shareholders, basic:
Continuing operations
$
0.16

 
$
0.22

 
$
0.24

 
$
0.47

 
$
0.56

Discontinued operations
0.05

 
0.08

 
0.11

 
0.17

 
0.22

Net earnings per share
$
0.21

 
$
0.30

 
$
0.35

 
$
0.64

 
$
0.78

 
 
 
 
 
 
 
 
 
 
Earnings per share attributable to Weyerhaeuser common shareholders, diluted:
Continuing operations
$
0.16

 
$
0.21

 
$
0.23

 
$
0.46

 
$
0.56

Discontinued operations
0.05

 
0.09

 
0.12

 
0.18

 
0.21

Net earnings per share
$
0.21

 
$
0.30

 
$
0.35

 
$
0.64

 
$
0.77

 
 
 
 
 
 
 
 
 
 
Dividends paid per common share
$
0.31

 
$
0.31

 
$
0.31

 
$
0.93

 
$
0.89

 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding (in thousands):
 
 
 
 
 
 
 
 
 
Basic
743,140

 
749,587

 
514,301

 
708,395

 
518,121

Diluted
747,701

 
754,044

 
517,088

 
712,205

 
521,455

 
 
 
 
 
 
 
 
 
 
Common shares outstanding at end of period (in thousands)
733,010

 
747,933

 
511,033

 
747,933

 
511,033

 
 
 
 
 
 
 
 
 
 

Page 1 of 10



Weyerhaeuser Company
 
 
 
 
 
 

 
Q3.2016 Analyst Package
 
 
 
 
 
 
 
 
 
Preliminary results (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization (Adjusted EBITDA)*
 
 
 
 
 
 
 
 
 
 
in millions
Q2
 
Q3
 
Year-to-date
 
June 30,
2016
 
September 30,
2016
 
September 30,
2015
 
September 30,
2016
 
September 30,
2015
Net earnings
$
168

 
$
227

 
$
191

 
$
476

 
$
436

Earnings from discontinued operations, net of income taxes
(38
)
 
(65
)
 
(59
)
 
(123
)
 
(111
)
Equity earnings from joint ventures
(7
)
 
(9
)
 
—

 
(21
)
 
—

Interest income and other
(10
)
 
(15
)
 
(9
)
 
(34
)
 
(27
)
Interest expense, net of capitalized interest
114

 
114

 
87

 
323

 
254

Income taxes
31

 
22

 
(44
)
 
64

 
(36
)
Operating income from continuing operations
258

 
274

 
166

 
685

 
516

Depreciation, depletion and amortization
133

 
138

 
79

 
375

 
243

Basis of real estate sold
13

 
19

 
2

 
49

 
13

Non-operating pension and postretirement credits
(10
)
 
(11
)
 
(2
)
 
(33
)
 
(8
)
Special items
19

 
14

 
—

 
107

 
13

Adjusted EBITDA*
$
413

 
$
434

 
$
245

 
$
1,183

 
$
777

 
 
 
 
 
 
 
 
 
 
*Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Beginning in the first quarter of 2016, we revised our definition of Adjusted EBITDA to add back the basis of real estate sold. We have revised our prior-period presentation to conform to our current reporting.
Adjusted EBITDA, as we define it, is operating income from continuing operations adjusted for depreciation, depletion, amortization, basis of real estate sold, pension and postretirement costs not allocated to business segments 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
Q2
 
Q3
 
Year-to-date
 
June 30,
2016
 
September 30,
2016
 
September 30,
2015
 
September 30,
2016
 
September 30,
2015
Net earnings attributable to Weyerhaeuser common shareholders
$
157

 
$
227

 
$
180

 
$
454

 
$
403

Plum Creek merger- and integration-related costs
4

 
10

 
—

 
112

 
—

Gain on sale of non-strategic asset
—

 
—

 
—

 
(22
)
 
—

Legal expense
7

 
—

 
—

 
7

 
—

Restructuring, impairments and other charges
—

 
—

 
—

 
—

 
9

Net earnings attributable to Weyerhaeuser common shareholders before special items
168

 
237

 
180

 
551

 
412

Earnings from discontinued operations, net of income taxes
(38
)
 
(65
)
 
(59
)
 
(123
)
 
(111
)
Net earnings from continuing operations attributable to Weyerhaeuser common shareholders before special items
$
130

 
$
172

 
$
121

 
$
428

 
$
301

 
 
 
 
 
 
 
 
 
 
per share
Q2
 
Q3
 
Year-to-date
 
June 30,
2016
 
September 30,
2016
 
September 30,
2015
 
September 30,
2016
 
September 30,
2015
Net earnings per diluted share attributable to Weyerhaeuser common shareholders
$
0.21

 
$
0.30

 
$
0.35

 
$
0.64

 
$
0.77

Plum Creek merger- and integration-related costs
—

 
0.02

 
—

 
0.16

 
—

Gain on sale of non-strategic asset
—

 
—

 
—

 
(0.03
)
 
—

Legal expense
0.01

 
—

 
—

 
0.01

 
—

Restructuring, impairments and other charges
—

 
—

 
—

 
—

 
0.02

Net earnings per diluted share attributable to Weyerhaeuser common shareholders before special items
0.22

 
0.32

 
0.35

 
0.78

 
0.79

Earnings from discontinued operations, net of income taxes
(0.05
)
 
(0.09
)
 
(0.12
)
 
(0.18
)
 
(0.21
)
Net earnings from continuing operations per diluted share attributable to Weyerhaeuser common shareholders before special items
$
0.17

 
$
0.23

 
$
0.23

 
$
0.60

 
$
0.58


Page 2 of 10



Weyerhaeuser Company
 
 
 
Q3.2016 Analyst Package
 
 

 
Preliminary results (unaudited)
 
 
 
 
 
Consolidated Balance Sheet
 
 
 
 
 
 
in millions
June 30,
2016
 
September 30,
2016
 
December 31,
2015
 
ASSETS
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and cash equivalents
$
485

 
$
769

 
$
1,011

Receivables, less allowances
409

 
412

 
276

Receivables for taxes
7

 
5

 
30

Inventories
387

 
368

 
325

Prepaid expenses and other current assets
132

 
150

 
63

Assets of discontinued operations
1,908

 
1,652

 
1,934

Total current assets
3,328

 
3,356

 
3,639

Property and equipment, net
1,462

 
1,476

 
1,233

Construction in progress
172

 
202

 
144

Timber and timberlands at cost, less depletion charged to disposals
14,474

 
14,424

 
6,479

Minerals and mineral rights, net
319

 
321

 
14

Investments in and advances to joint ventures
905

 
73

 
—

Goodwill
40

 
40

 
40

Deferred tax assets
250

 
122

 
254

Other assets
424

 
317

 
302

Restricted financial investments held by variable interest entities
615

 
615

 
615

Total assets
$
21,989

 
$
20,946

 
$
12,720

 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Current maturities of long-term debt
$
—

 
$
1,981

 
$
—

Notes payable
1

 
1

 
4

Accounts payable
300

 
234

 
204

Accrued liabilities
590

 
533

 
427

Liabilities of discontinued operations
666

 
578

 
690

Total current liabilities
1,557

 
3,327

 
1,325

Note payable to timberland venture
830

 
—

 
—

Long-term debt
8,013

 
6,329

 
4,787

Long-term debt (nonrecourse to the company) held by variable interest entities
511

 
511

 
511

Deferred pension and other postretirement benefits
926

 
875

 
987

Deposit received from contribution of timberlands to related party
437

 
429

 
—

Other liabilities
285

 
285

 
241

Total liabilities
12,559

 
11,756

 
7,851

Total equity
9,430

 
9,190

 
4,869

Total liabilities and equity
$
21,989

 
$
20,946

 
$
12,720


Page 3 of 10



Weyerhaeuser Company
 
 
 
 

 
Q3.2016 Analyst Package
 
 
 
 
 
 
 
 
 
Preliminary results (unaudited)
 
 
 
 
 
 
 
 
 
Consolidated Statement of Cash Flows
 
 
 
 
 
 
 
 
 
 
in millions
Q2
 
Q3
 
Year-to-date
 
June 30,
2016
 
September 30,
2016
 
September 30,
2015
 
September 30,
2016
 
September 30,
2015
Cash flows from operations:
 
 
 
 
 
 
 
 
 
Net earnings
$
168

 
$
227

 
$
191

 
$
476

 
$
436

Noncash charges (credits) to income:
 
 
 
 
 
 
 
 
 
Depreciation, depletion and amortization
147

 
139

 
118

 
428

 
359

Basis of real estate sold
13

 
19

 
2

 
49

 
13

Deferred income taxes, net
38

 
40

 
(6
)
 
96

 
10

Pension and other postretirement benefits
1

 
—

 
11

 
5

 
32

Other noncash charges (credits)
16

 
(57
)
 
23

 
(74
)
 
65

Change in:
 
 
 
 
 
 
 
 
 
Receivables less allowances
(43
)
 
(6
)
 
(15
)
 
(96
)
 
(41
)
Receivable for taxes
25

 
2

 
(3
)
 
37

 
11

Inventories
60

 
32

 
6

 
49

 
(9
)
Prepaid expenses
—

 
(2
)
 
—

 
(3
)
 
(2
)
Accounts payable and accrued liabilities
106

 
25

 
(22
)
 
61

 
(47
)
Pension and postretirement contributions
(12
)
 
(54
)
 
(20
)
 
(83
)
 
(59
)
Distributions received from joint ventures
—

 
—

 
—

 
5

 
—

Other
(27
)
 
(18
)
 
(3
)
 
(64
)
 
(32
)
Net cash from operations
492

 
347

 
282

 
886

 
736

 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Capital expenditures:
 
 
 
 
 
 
 
 
 
Purchases of property and equipment
(83
)
 
(120
)
 
(106
)
 
(260
)
 
(276
)
Timberlands reforestation costs
(18
)
 
(9
)
 
(6
)
 
(43
)
 
(33
)
Acquisition of timberlands
(2
)
 
(2
)
 
(2
)
 
(10
)
 
(34
)
Proceeds from sale of assets
13

 
296

 
1

 
379

 
7

Proceeds from contribution of timberlands to related party
440

 
—

 
—

 
440

 
—

Distributions received from joint ventures
3

 
7

 
—

 
34

 
—

Cash and cash equivalents acquired in the merger with Plum Creek
—

 
—

 
—

 
9

 
—

Other
(3
)
 
45

 
—

 
42

 
12

Cash from (used in) investing activities
350

 
217

 
(113
)
 
591

 
(324
)
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
Cash dividends on common shares
(228
)
 
(231
)
 
(159
)
 
(700
)
 
(460
)
Cash dividends on preference shares
(11
)
 
(11
)
 
(11
)
 
(22
)
 
(22
)
Proceeds from issuance of long-term debt
300

 
300

 
—

 
1,698

 
—

Payments of long-term debt
(3
)
 
—

 
—

 
(723
)
 
—

Repurchase of common stock
(831
)
 
(374
)
 
(77
)
 
(2,003
)
 
(484
)
Other
8

 
39

 
5

 
40

 
22

Cash used in financing activities
(765
)
 
(277
)
 
(242
)
 
(1,710
)
 
(944
)
 
 
 
 
 
 
 
 
 
 
Net change in cash and cash equivalents
77

 
287

 
(73
)
 
(233
)
 
(532
)
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents from continuing operations at beginning of period
411

 
485

 
1,117

 
1,011

 
1,577

Cash and cash equivalents from discontinued operations at beginning of period
4

 
7

 
4

 
1

 
3

Cash and cash equivalents at beginning of period
415

 
492

 
1,121

 
1,012

 
1,580

 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents from continuing operations at end of period
485

 
769

 
1,046

 
769

 
1,046

Cash and cash equivalents from discontinued operations at end of period
7

 
10

 
2

 
10

 
2

Cash and cash equivalents at end of period
$
492

 
$
779

 
$
1,048

 
$
779

 
$
1,048

 
 
 
 
 
 
 
 
 
 
Cash paid (received) during the year for:
 
 
 
 
 
 
 
 
 
Interest, net of amount capitalized
$
92

 
$
142

 
$
118

 
$
367

 
$
290

Income taxes
$
(12
)
 
$
(1
)
 
$
(1
)
 
$
(26
)
 
$
4

 
 
 
 
 
 
 
 
 
 
Noncash investing and financing activities:
 
 
 
 
 
 
 
 
 
Equity issued as consideration for our merger with Plum Creek
$
—

 
$
—

 
$
—

 
$
6,383

 
$
—


Page 4 of 10



Weyerhaeuser Company
 
 
 
 
Total Company Statistics
 
Q3.2016 Analyst Package
 
 
 
 

 
Preliminary results (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Total Company Items
 
in millions
Q2
 
Q3
 
Year-to-date
 
June 30,
2016
 
September 30,
2016
 
September 30,
2015
 
September 30,
2016
 
September 30,
2015
Pension and postretirement costs:
 
 
 
 
 
 
 
 
 
Pension and postretirement costs allocated to business segments
$
8

 
$
8

 
$
8

 
$
23

 
$
27

Pension and postretirement credits not allocated
(10
)
 
(11
)
 
(2
)
 
(33
)
 
(8
)
Accelerated pension costs included in Plum Creek merger-related costs (not allocated)
—

 
—

 
—

 
5

 
—

Total pension and postretirement costs for continuing operations
(2
)
 
(3
)
 
6

 
(5
)
 
19

Pension and postretirement service costs directly attributable to discontinued operations
3

 
3

 
5

 
10

 
13

Total company pension and postretirement costs
$
1

 
$
—

 
$
11

 
$
5

 
$
32

 
 
 
 
 
 
 
 
 
 
Cash spent for capital expenditures for continuing operations
$
(89
)
 
$
(100
)
 
$
(85
)
 
$
(240
)
 
$
(224
)

Page 5 of 10



Weyerhaeuser Company
Timberlands Segment
 
Q3.2016 Analyst Package
 
 
 
 
 

 
Preliminary results (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Statement of Operations
 
 
 
 
 
 
 
 
 
 
 
in millions
 
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Sales to unaffiliated customers
$
471

 
$
484

 
$
310

 
$
1,342

 
$
961

Intersegment sales
193

 
216

 
210

 
631

 
625

Total net sales
664

 
700

 
520

 
1,973

 
1,586

Cost of products sold
509

 
559

 
398

 
1,527

 
1,176

Gross margin
155

 
141

 
122

 
446

 
410

Selling expenses
2

 
1

 
1

 
4

 
4

General and administrative expenses
32

 
20

 
21

 
80

 
61

Research and development expenses
4

 
4

 
3

 
12

 
10

Other operating income, net
(8
)
 
(6
)
 
(10
)
 
(26
)
 
(28
)
Operating income and Net contribution to earnings
$
125

 
$
122

 
$
107

 
$
376

 
$
363

 
 
 
 
 
 
 
 
 
 
 
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*
 
 
 
 
 
 
 
 
 
 
 
in millions
 
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Operating income
$
125

 
$
122

 
$
107

 
$
376

 
$
363

Depreciation, depletion and amortization
95

 
101

 
51

 
266

 
155

Adjusted EBITDA*
$
220

 
$
223

 
$
158

 
$
642

 
$
518

*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Segment Items
 
 
 
 
 
 
 
 
 
 
 
 
 
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Total decrease (increase) in working capital (1)
$
28

 
$
(15
)
 
$
(12
)
 
$
(40
)
 
$
14

Cash spent for capital expenditures
$
(31
)
 
$
(26
)
 
$
(17
)
 
$
(77
)
 
$
(58
)
(1) Working capital does not include cash balances. Represents the change in combined working capital of Timberlands and Real Estate & ENR.
 
Segment Statistics(2)
 
 
 
 
 
 
 
 
 
 
 
 
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Third Party 
Net Sales
(millions)
Delivered logs:
 
 
 
 
 
 
 
 
 
West
$
232

 
$
217

 
$
196

 
$
664

 
$
627

South
154

 
160

 
64

 
415

 
180

North
19

 
29

 
—

 
61

 
—

Other
7

 
11

 
6

 
25

 
17

Total delivered logs
412

 
417

 
266

 
1,165

 
824

Stumpage and pay-as-cut timber
23

 
24

 
13

 
62

 
27

Products from international operations
21

 
21

 
20

 
58

 
69

Recreational and other lease revenue
8

 
15

 
7

 
29

 
18

Other revenue
7

 
7

 
4

 
28

 
23

Total
$
471

 
$
484

 
$
310

 
$
1,342

 
$
961

Delivered Logs
Third Party Sales
Realizations
(per ton)
West
$
98.21

 
$
98.18

 
$
98.67

 
$
98.99

 
$
100.98

South
$
35.54

 
$
35.27

 
$
37.60

 
$
35.64

 
$
37.23

North
$
65.43

 
$
59.17

 
$
—

 
$
61.06

 
$
—

International
$
23.29

 
$
24.27

 
$
16.97

 
$
20.48

 
$
18.41

Delivered Logs
Third Party Sales
Volumes
(tons, thousands)(3)
West
2,363

 
2,209

 
1,992

 
6,705

 
6,207

South
4,340

 
4,538

 
1,707

 
11,659

 
4,844

North
292

 
503

 
—

 
1,005

 
—

International
89

 
117

 
194

 
352

 
556

Other
169

 
263

 
127

 
601

 
384


Fee Harvest Volumes
(tons, thousands)(3)
West
2,980

 
2,744

 
2,548

 
8,525

 
7,967

South
7,061

 
6,992

 
3,648

 
19,083

 
10,548

North
454

 
678

 
—

 
1,392

 
—

International
248

 
242

 
220

 
789

 
725

Other
181

 
191

 
—

 
372

 
—

(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.
(3) Beginning in first quarter 2016, we report log sales and fee harvest volumes in tons. Prior period volumes have been converted from cubic meters to tons using annualized 2015 conversion factors as follows:
West: 1.056 m3 = 1 ton
South: 0.818 m3 = 1 ton
Canada (in Other): 1.244 m3 = 1 ton
International: 0.907 m3 = 1 ton

Page 6 of 10



Weyerhaeuser Company
 
 
 
 
Real Estate, Energy and Natural Resources Segment
 
Q3.2016 Analyst Package
 
 
 
 
 
Preliminary results (unaudited)
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
Segment Statement of Operations
 
 
 
 
 
 
 
 
 
 
 
in millions
 
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Total net sales
$
38

 
$
48

 
$
22

 
$
125

 
$
69

Cost of products sold
19

 
26

 
3

 
65

 
15

Gross margin
19

 
22

 
19

 
60

 
54

Selling expenses
—

 
—

 
—

 
—

 
—

General and administrative expenses
8

 
7

 
—

 
19

 
3

Charges for integration, restructuring, closures and asset impairments
1

 
—

 
—

 
1

 
—

Other operating costs (income), net
(2
)
 
1

 
—

 
(1
)
 
(1
)
Operating income
12

 
14

 
19

 
41

 
52

Equity earnings (loss) from joint ventures(1)
—

 
1

 
—

 
1

 
—

Net contribution to earnings
$
12

 
$
15

 
$
19

 
$
42

 
$
52

(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*
 
 
 
 
 
 
 
 
 
 
 
in millions
 
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Operating income
$
12

 
$
14

 
$
19

 
$
41

 
$
52

Depreciation, depletion and amortization
3

 
4

 
—

 
9

 
—

Basis of real estate sold
13

 
19

 
2

 
49

 
13

Adjusted EBITDA*
$
28

 
$
37

 
$
21

 
$
99

 
$
65

*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.
 
 
 
 
 
 
 
 
 
 
 
Selected Segment Items
 
 
 
 
 
 
 
 
 
 
 
 
 
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Cash spent for capital expenditures
$
(1
)
 
$
—

 
$
—

 
$
(1
)
 
$
—

 
 
 
 
 
 
 
 
 
 
 
Segment Statistics
 
 
 
 
 
 
 
 
 
 
 
 
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Net Sales
(millions)
Real Estate
$
26

 
$
31

 
$
15

 
$
87

 
$
50

Energy and natural resources
12

 
17

 
7

 
38

 
19

Total
$
38

 
$
48

 
$
22

 
$
125

 
$
69

Acres sold
Real Estate
10,020

 
12,853

 
5,030

 
38,098

 
20,625

Price per acre
Real Estate
$
2,555

 
$
2,354

 
$
2,635

 
$
2,271

 
$
2,175



Page 7 of 10



Weyerhaeuser Company
 
 
 
 
Wood Products Segment
 
Q3.2016 Analyst Package
 
 
 
 
 

 
Preliminary results (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Statement of Operations  
 
 
 
 
 
 
 
 
 
 
 
in millions
 
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Sales to unaffiliated customers
$
1,146

 
$
1,177

 
$
1,023

 
$
3,302

 
$
2,950

Intersegment sales
22

 
17

 
20

 
61

 
61

Total net sales
1,168

 
1,194

 
1,043

 
3,363

 
3,011

Cost of products sold
957

 
980

 
914

 
2,799

 
2,646

Gross margin
211

 
214

 
129

 
564

 
365

Selling expenses
20

 
21

 
23

 
63

 
69

General and administrative expenses
30

 
24

 
21

 
81

 
74

Research and development expenses
—

 
1

 
1

 
2

 
2

Charges for integration and restructuring, closures and asset impairments
4

 
1

 
1

 
6

 
1

Other operating costs (income), net
1

 
(3
)
 
(2
)
 
(1
)
 
1

Operating income and Net contribution to earnings
$
156

 
$
170

 
$
85

 
$
413

 
$
218

 
 
 
 
 
 
 
 
 
 
 
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*
 
 
 
 
 
 
 
 
 
 
 
in millions
 
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Operating income
$
156

 
$
170

 
$
85

 
$
413

 
$
218

Depreciation, depletion and amortization
33

 
33

 
26

 
96

 
79

Adjusted EBITDA*
$
189

 
$
203

 
$
111

 
$
509

 
$
297

*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Segment Items
 
 
 
 
 
 
 
 
 
 
 
 
 
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Total decrease (increase) in working capital (1)
$
35

 
$
49

 
$
23

 
$
(48
)
 
$
(34
)
Cash spent for capital expenditures
$
(52
)
 
$
(71
)
 
$
(68
)
 
$
(152
)
 
$
(165
)
(1) Working capital does not include cash balances.
 
 
 
 
 
Segment Statistics
 
 
 
 
 
 
 
 
 
 
 
in millions, except for third-party sales realizations
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Structural Lumber
(board feet)
Third party net sales
$
498

 
$
495

 
$
455

 
$
1,412

 
$
1,339

Third party sales realizations
$
399

 
$
401

 
$
372

 
$
389

 
$
385

Third party sales volumes (2)
1,249

 
1,233

 
1,224

 
3,634

 
3,474

Production volumes
1,205

 
1,130

 
1,087

 
3,464

 
3,217

Engineered Solid
Section
(cubic feet)
Third party net sales
$
115

 
$
119

 
$
116

 
$
343

 
$
323

Third party sales realizations
$
1,922

 
$
1,916

 
$
2,043

 
$
1,935

 
$
2,016

Third party sales volumes (2)
6.0

 
6.2

 
5.6

 
17.7

 
16.0

Production volumes
5.9

 
5.7

 
5.2

 
17.2

 
15.8

Engineered
I-joists
(lineal feet)
Third party net sales
$
73

 
$
79

 
$
79

 
$
218

 
$
216

Third party sales realizations
$
1,471

 
$
1,475

 
$
1,520

 
$
1,483

 
$
1,511

Third party sales volumes (2)
50

 
53

 
52

 
147

 
143

Production volumes
46

 
49

 
50

 
141

 
141

Oriented Strand
Board
(square feet 3/8')
Third party net sales
$
182

 
$
199

 
$
151

 
$
544

 
$
435

Third party sales realizations
$
240

 
$
256

 
$
194

 
$
237

 
$
194

Third party sales volumes (2)
761

 
776

 
778

 
2,296

 
2,249

Production volumes
733

 
777

 
746

 
2,259

 
2,150

Softwood Plywood
(square feet 3/8')
Third party net sales
$
50

 
$
48

 
$
33

 
$
133

 
$
102

Third party sales realizations
$
382

 
$
378

 
$
330

 
$
369

 
$
349

Third party sales volumes (2)
131

 
127

 
100

 
368

 
290

Production volumes
111

 
105

 
67

 
304

 
191

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

Page 8 of 10



Weyerhaeuser Company
 
 
 
 
Unallocated Items
 
Q3.2016 Analyst Package
 
 
 
 

 
Preliminary results (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unallocated items are gains or charges not related to or allocated to an individual operating segment. They include a portion of items such as: share-based compensation, pension and postretirement costs, foreign exchange transaction gains and losses associated with financing and the elimination of intersegment profit in inventory, equity earnings from our timberland venture, and the LIFO reserve.
 
 
 
 
 
 
 
 
 
 
Contribution to Earnings
 
 
 
 
 
 
 
 
 
 
in millions
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Unallocated corporate function expenses
$
(24
)
 
$
(21
)
 
$
(14
)
 
$
(62
)
 
$
(48
)
Unallocated share-based compensation
1

 
(4
)
 
6

 
(5
)
 
10

Unallocated pension & postretirement credits
10

 
11

 
2

 
33

 
8

Foreign exchange gains (losses)
1

 
(1
)
 
(20
)
 
13

 
(40
)
Elimination of intersegment profit in inventory and LIFO
(2
)
 
2

 
3

 
(6
)
 
7

Gain on sale of non-strategic asset
8

 
1

 
—

 
45

 
2

Charges for integration and restructuring, closures and asset impairments:
 
 
 
 
 
 
 
 
     Plum Creek merger- and integration-related costs
(8
)
 
(14
)
 
—

 
(132
)
 
—

     Other restructuring, closures and asset impairments
(1
)
 
(1
)
 
(1
)
 
(2
)
 
(15
)
Other
(20
)
 
(5
)
 
(21
)
 
(29
)
 
(41
)
Operating income (loss)
(35
)
 
(32
)
 
(45
)
 
(145
)
 
(117
)
Equity earnings from joint venture (1)
7

 
8

 
—

 
20

 
—

Interest income and other
10

 
15

 
9

 
34

 
27

Net contribution to earnings
$
(18
)
 
$
(9
)
 
$
(36
)
 
$
(91
)
 
$
(90
)
(1) Equity earnings from joint venture included in Unallocated Items is generated from our investment in our timberland venture.
 
 
 
 
 
 
 
 
 
 
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*
 
 
 
 
 
 
 
 
 
 
in millions
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Operating income (loss)
$
(35
)
 
$
(32
)
 
$
(45
)
 
$
(145
)
 
$
(117
)
Depreciation, depletion and amortization
2

 
—

 
2

 
4

 
9

Non-operating pension and postretirement credits
(10
)
 
(11
)
 
(2
)
 
(33
)
 
(8
)
Special items
19

 
14

 
—

 
107

 
13

Adjusted EBITDA*
$
(24
)
 
$
(29
)
 
$
(45
)
 
$
(67
)
 
$
(103
)
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unallocated Special Items Included in Net Contribution to Earnings (Pre-Tax)
 
 
 
 
 
 
 
 
 
 
 
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Plum Creek merger- and integration-related costs
(8
)
 
(14
)
 
—

 
(132
)
 
—

Gain on sale of non-strategic asset
—

 
—

 
—

 
36

 
—

Legal expense
(11
)
 
—

 
—

 
(11
)
 
—

Restructuring, impairments and other charges
—

 
—

 
—

 
—

 
(13
)
Total
$
(19
)
 
$
(14
)
 
$
—

 
$
(107
)
 
$
(13
)
 
 
 
 
 
 
 
 
 
 
Unallocated Selected Items
 
 
 
 
 
 
 
 
 
 
 
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Cash spent for capital expenditures
$
(5
)
 
$
(3
)
 
$
—

 
$
(10
)
 
$
(1
)

Page 9 of 10



Weyerhaeuser Company
 
 
 
 
 
Discontinued Operations
 
Q3.2016 Analyst Package
 
 
 
 
 

 
Preliminary results (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discontinued operations consist of our Cellulose Fibers businesses, which were previously disclosed as a separate reportable business segment.
 
 
 
 
 
 
 
 
 
 
 
Discontinued Operations Statement of Operations
 
 
 
 
 
 
 
 
 
 
 
in millions
 
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Total net sales
$
456

 
$
420

 
$
471

 
$
1,306

 
$
1,385

Costs of products sold
374

 
350

 
372

 
1,110

 
1,181

Gross margin
82

 
70

 
99

 
196

 
204

Selling expenses
3

 
3

 
3

 
10

 
10

General and administrative expenses
8

 
7

 
5

 
24

 
21

Research and development expenses
2

 
—

 
2

 
3

 
5

Charges for integration and restructuring, closures and asset impairments
25

 
13

 
1

 
44

 
1

Other operating income, net
(10
)
 
(2
)
 
(5
)
 
(21
)
 
(19
)
Operating income
54

 
49

 
93

 
136

 
186

Equity loss from joint venture
(1
)
 
—

 
(5
)
 
(3
)
 
(18
)
Interest expense, net of capitalized interest
(1
)
 
(2
)
 
(1
)
 
(5
)
 
(5
)
Earnings from discontinued operations before income taxes
52

 
47

 
87

 
128

 
163

Income taxes
(14
)
 
(23
)
 
(28
)
 
(46
)
 
(52
)
Net earnings from operations
38

 
24

 
59

 
82

 
111

Net gain on divestiture of Liquid Packaging Board
—

 
41

 
—

 
41

 
—

Net earnings from discontinued operations
$
38

 
$
65

 
$
59

 
$
123

 
$
111

 
Discontinued Operations Selected Items
 
 
 
 
 
 
 
 
 
 
 
in millions
 
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Depreciation, depletion and amortization
$
15

 
$
—

 
$
39

 
$
53

 
$
116

Cash spent for capital expenditures
$
(12
)
 
$
(29
)
 
$
(27
)
 
$
(63
)
 
$
(85
)
 
 
 
 
 
 
 
 
 
 
 
Discontinued Operations Statistics
 
 
 
 
 
 
 
 
 
 
 
 
 
Q2.2016
 
Q3.2016
 
Q3.2015
 
YTD.2016
 
YTD.2015
Pulp
(air-dry metric tons)
Third party net sales (millions)
$
350

 
$
349

 
$
383

 
$
1,050

 
$
1,111

Third party sales realizations
$
762

 
$
780

 
$
818

 
$
766

 
$
831

Third party sales volumes (thousands)
460

 
446

 
468

 
1,370

 
1,337

Production volumes (thousands)
454

 
426

 
477

 
1,337

 
1,341

Liquid Packaging Board (metric tons)
Third party net sales (millions)
$
85

 
$
61

 
$
74

 
$
213

 
$
232

Third party sales realizations
$
1,127

 
$
1,144

 
$
1,168

 
$
1,112

 
$
1,194

Third party sales volumes (thousands)
76

 
53

 
63

 
192

 
194

Production volumes (thousands)
65

 
48

 
68

 
177

 
192



Page 10 of 10