EX-99.2 3 wy2018q3ex-992.htm EXHIBIT 99.2 Exhibit


Weyerhaeuser Company
 
 
 
 
 
 
Exhibit 99.2
 
Q3.2018 Analyst Package
 
 
 
 
 
 
 
 

 
Preliminary results (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statement of Operations
 
 
 
 
 
 
 
 
 
 
 
 
in millions
Q1
 
Q2
 
Q3
 
Year-to-Date
 
March 31,
2018
 
June 30,
2018
 
September 30,
2018
 
September 30,
2017
 
September 30,
2018
 
September 30,
2017
Net sales
$
1,865

 
$
2,065

 
$
1,910

 
$
1,872

 
$
5,840

 
$
5,373

Cost of products sold
1,348

 
1,447

 
1,452

 
1,374

 
4,247

 
3,982

Gross margin
517

 
618

 
458

 
498

 
1,593

 
1,391

Selling expenses
23

 
23

 
20

 
22

 
66

 
66

General and administrative expenses
78

 
80

 
78

 
75

 
236

 
238

Research and development expenses
2

 
2

 
2

 
4

 
6

 
12

Charges for integration and restructuring, closures and asset impairments
2

 
—

 
—

 
14

 
2

 
178

Charges (recoveries) for product remediation, net
(20
)
 
20

 
—

 
190

 
—

 
240

Other operating costs (income), net
28

 
17

 
21

 
(12
)
 
66

 
2

Operating income
404

 
476

 
337

 
205

 
1,217

 
655

Non-operating pension and other postretirement benefit costs
(24
)
 
(13
)
 
(17
)
 
(16
)
 
(54
)
 
(46
)
Interest income and other
12

 
11

 
13

 
12

 
36

 
30

Interest expense, net of capitalized interest
(93
)
 
(92
)
 
(93
)
 
(98
)
 
(278
)
 
(297
)
Earnings before income taxes
299

 
382

 
240

 
103

 
921

 
342

Income taxes
(30
)
 
(65
)
 
15

 
27

 
(80
)
 
(31
)
Net earnings
$
269

 
$
317

 
$
255

 
$
130

 
$
841

 
$
311

 
Per Share Information
 
 
Q1
 
Q2
 
Q3
 
Year-to-Date
 
March 31,
2018
 
June 30,
2018
 
September 30,
2018
 
September 30,
2017
 
September 30,
2018
 
September 30,
2017
Earnings per share, basic and diluted
$
0.35

 
$
0.42

 
$
0.34

 
$
0.17

 
$
1.11

 
$
0.41

Dividends paid per common share
$
0.32

 
$
0.32

 
$
0.34

 
$
0.31

 
$
0.98

 
$
0.93

Weighted average shares outstanding (in thousands):
 
 
 
 
 
 
 
 
 
 
 
Basic
756,815

 
757,829

 
754,986

 
753,535

 
756,531

 
752,301

Diluted
759,462

 
760,533

 
757,389

 
756,903

 
759,116

 
756,058

Common shares outstanding at end of period (in thousands)
756,700

 
757,646

 
749,199

 
753,051

 
749,199

 
753,051

 
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization (Adjusted EBITDA)*
 
in millions
Q1
 
Q2
 
Q3
 
Year-to-Date
 
March 31,
2018
 
June 30,
2018
 
September 30,
2018
 
September 30,
2017
 
September 30,
2018
 
September 30,
2017
Net earnings
$
269

 
$
317

 
$
255

 
$
130

 
$
841

 
$
311

Non-operating pension and other postretirement benefit costs
24

 
13

 
17

 
16

 
54

 
46

Interest income and other
(12
)
 
(11
)
 
(13
)
 
(12
)
 
(36
)
 
(30
)
Interest expense, net of capitalized interest
93

 
92

 
93

 
98

 
278

 
297

Income taxes
30

 
65

 
(15
)
 
(27
)
 
80

 
31

Operating income
404

 
476

 
337

 
205

 
1,217

 
655

Depreciation, depletion and amortization
120

 
119

 
122

 
132

 
361

 
394

Basis of real estate sold
12

 
22

 
46

 
24

 
80

 
48

Unallocated pension service costs
—

 
—

 
—

 
1

 
—

 
3

Special items
8

 
20

 
—

 
207

 
28

 
429

Adjusted EBITDA*
$
544

 
$
637

 
$
505

 
$
569

 
$
1,686

 
$
1,529

 
 
 
 
 
 
 
 
 
 
 
 
*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, 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.

Page 1 of 8



Weyerhaeuser Company
 
 
 
 
 
 
Total Company Statistics
 
Q3.2018 Analyst Package
 
 
 
 
 
 

 
Preliminary results (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Special Items Included in Net Earnings (Income Tax Affected)
 
 
 
 
 
 
 
 
 
 
 
 
in millions
Q1
 
Q2
 
Q3
 
Year-to-Date
 
March 31,
2018
 
June 30,
2018
 
September 30,
2018
 
September 30,
2017
 
September 30,
2018
 
September 30,
2017
Net earnings
$
269

 
$
317

 
$
255

 
$
130

 
$
841

 
$
311

Plum Creek merger and integration-related costs
—

 
—

 
—

 
3

 
—

 
15

Restructuring, impairment and other charges
—

 
—

 
—

 
4

 
—

 
151

Environmental remediation charges (recoveries)
21

 
—

 
—

 
—

 
21

 
—

Countervailing and antidumping duties charges (credits)(1)
—

 
—

 
—

 
4

 
—

 
12

Product remediation charges (recoveries), net
(15
)
 
15

 
—

 
118

 
—

 
149

Tax adjustments(2)
—

 
—

 
(41
)
 
—

 
(41
)
 
—

Net earnings before special items
$
275

 
$
332

 
$
214

 
$
259

 
$
821

 
$
638

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q1
 
Q2
 
Q3
 
Year-to-Date
 
March 31,
2018
 
June 30,
2018
 
September 30,
2018
 
September 30,
2017
 
September 30,
2018
 
September 30,
2017
Net earnings per diluted share
$
0.35

 
$
0.42

 
$
0.34

 
$
0.17

 
$
1.11

 
$
0.41

Plum Creek merger and integration-related costs
—

 
—

 
—

 
—

 
—

 
0.02

Restructuring, impairment and other charges
—

 
—

 
—

 
0.01

 
—

 
0.20

Environmental remediation charges (recoveries)
0.03

 
—

 
—

 
—

 
0.03

 
—

Countervailing and antidumping duties charges (credits)(1)
—

 
—

 
—

 
0.01

 
—

 
0.01

Product remediation charges (recoveries), net
(0.02
)
 
0.02

 
—

 
0.15

 
—

 
0.20

Tax adjustments(2)
—

 
—

 
(0.06
)
 
—

 
(0.06
)
 
—

Net earnings per diluted share before special items
$
0.36

 
$
0.44

 
$
0.28

 
$
0.34

 
$
1.08

 
$
0.84

(1)As of first quarter 2018, countervailing and antidumping duties are no longer reported as a special item.
(2)During third quarter 2018, we recorded a tax benefit related to our $300 million contribution to our U.S. qualified pension plan.
 
 
 
 
 
 
 
 
 
 
 
 
Selected Total Company Items
 
in millions
Q1
 
Q2
 
Q3
 
Year-to-Date
 
March 31,
2018
 
June 30,
2018
 
September 30,
2018
 
September 30,
2017
 
September 30,
2018
 
September 30,
2017
Pension and postretirement costs:
 
 
 
 
 
 
 
 
 
 
 
Pension and postretirement service costs
$
10

 
$
8

 
$
10

 
$
9

 
$
28

 
$
26

Non-operating pension and other postretirement benefit costs
24

 
13

 
17

 
16

 
54

 
46

Total company pension and postretirement costs
$
34

 
$
21

 
$
27

 
$
25

 
$
82

 
$
72



Page 2 of 8



Weyerhaeuser Company
 
 
 
 

 
Q3.2018 Analyst Package
 
 
 
 
Preliminary results (unaudited)
 
 
 
 
 
 
 
Consolidated Balance Sheet
 
 
 
 
 
 
 
 
in millions
March 31,
2018
 
June 30,
2018
 
September 30,
2018
 
December 31,
2017
 
ASSETS
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
598

 
$
901

 
$
348

 
$
824

Receivables, less discounts and allowances
481

 
491

 
444

 
396

Receivables for taxes
24

 
23

 
140

 
14

Inventories
445

 
414

 
389

 
383

Prepaid expenses and other current assets
118

 
146

 
140

 
98

Current restricted financial investments held by variable interest entities
253

 
253

 
253

 
—

Total current assets
1,919

 
2,228

 
1,714

 
1,715

Property and equipment, net
1,573

 
1,597

 
1,672

 
1,618

Construction in progress
275

 
282

 
255

 
225

Timber and timberlands at cost, less depletion
12,888

 
12,790

 
12,727

 
12,954

Minerals and mineral rights, less depletion
306

 
302

 
297

 
308

Goodwill
40

 
40

 
40

 
40

Deferred tax assets
244

 
168

 
71

 
268

Other assets
278

 
279

 
289

 
316

Restricted financial investments held by variable interest entities
362

 
362

 
362

 
615

Total assets
$
17,885

 
$
18,048

 
$
17,427

 
$
18,059

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

 
$
—

 
$
—

 
$
62

Current debt (nonrecourse to the company) held by variable interest entities
209

 
209

 
511

 
209

Accounts payable
245

 
270

 
271

 
249

Accrued liabilities
457

 
543

 
491

 
645

Total current liabilities
911

 
1,022

 
1,273

 
1,165

Long-term debt
5,928

 
5,924

 
5,921

 
5,930

Long-term debt (nonrecourse to the company) held by variable interest entities
302

 
302

 
—

 
302

Deferred pension and other postretirement benefits
1,454

 
1,224

 
885

 
1,487

Other liabilities
299

 
295

 
291

 
276

Total liabilities
8,894

 
8,767

 
8,370

 
9,160

Total equity
8,991

 
9,281

 
9,057

 
8,899

Total liabilities and equity
$
17,885

 
$
18,048

 
$
17,427

 
$
18,059


Page 3 of 8



Weyerhaeuser Company
 
 
 
 

 
Q3.2018 Analyst Package
 
 
 
Preliminary results (unaudited)
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Cash Flows
 
 
 
 
 
 
 
 
 
 
 
 
in millions
Q1
 
Q2
 
Q3
 
Year-to-Date
 
March 31,
2018
 
June 30,
2018
 
September 30,
2018
 
September 30,
2017
 
September 30,
2018
 
September 30,
2017
Cash flows from operations:
 
 
 
 
 
 
 
 
 
 
 
Net earnings
$
269

 
$
317

 
$
255

 
$
130

 
$
841

 
$
311

Noncash charges earnings:
 
 
 
 
 
 
 
 
 
 
 
Depreciation, depletion and amortization
120

 
119

 
122

 
132

 
361

 
394

Basis of real estate sold
12

 
22

 
46

 
24

 
80

 
48

Deferred income taxes, net
10

 
15

 
86

 
3

 
111

 
9

Pension and other postretirement benefits
34

 
21

 
27

 
25

 
82

 
72

Share-based compensation expense
9

 
9

 
13

 
10

 
31

 
29

Charges for impairments of assets
1

 
—

 
—

 
6

 
1

 
153

Change in:
 
 
 
 
 
 
 
 
 
 
 
Receivables, less allowances
(83
)
 
(18
)
 
46

 
(35
)
 
(55
)
 
(113
)
Receivables and payables for taxes
5

 
10

 
(124
)
 
(63
)
 
(109
)
 
(116
)
Inventories
(66
)
 
30

 
27

 
11

 
(9
)
 
4

Prepaid expenses
(5
)
 
4

 
(6
)
 
4

 
(7
)
 
(9
)
Accounts payable and accrued liabilities
(173
)
 
103

 
(63
)
 
129

 
(133
)
 
184

Pension and postretirement benefit contributions and payments
(16
)
 
(16
)
 
(323
)
 
(22
)
 
(355
)
 
(59
)
Other
19

 
(19
)
 
(19
)
 
(31
)
 
(19
)
 
(60
)
Net cash from operations
$
136

 
$
597

 
$
87

 
$
323

 
$
820

 
$
847

Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures for property and equipment
$
(61
)
 
$
(83
)
 
$
(94
)
 
$
(87
)
 
$
(238
)
 
$
(213
)
Capital expenditures for timberlands reforestation
(20
)
 
(14
)
 
(11
)
 
(10
)
 
(45
)
 
(46
)
Proceeds from sale of assets and operations
2

 
—

 
—

 
411

 
2

 
423

Other
3

 
24

 
(10
)
 
(16
)
 
17

 
28

Cash from (used in) investing activities
$
(76
)
 
$
(73
)
 
$
(115
)
 
$
298

 
$
(264
)
 
$
192

Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
Cash dividends on common shares
$
(242
)
 
$
(243
)
 
$
(256
)
 
$
(233
)
 
$
(741
)
 
$
(699
)
Proceeds from issuance of long-term debt
—

 
—

 
—

 
225

 
—

 
225

Payments of long-term debt
(62
)
 
—

 
—

 
(831
)
 
(62
)
 
(831
)
Proceeds from borrowing on line of credit
—

 
—

 
—

 
100

 
—

 
100

Payments on line of credit
—

 
—

 
—

 
(100
)
 
—

 
(100
)
Proceeds from exercise of stock options
25

 
23

 
4

 
8

 
52

 
89

Repurchases of common shares
—

 
—

 
(273
)
 
—

 
(273
)
 
—

Other
(7
)
 
(1
)
 
—

 
6

 
(8
)
 
(2
)
Cash used in financing activities
$
(286
)
 
$
(221
)
 
$
(525
)
 
$
(825
)
 
$
(1,032
)
 
$
(1,218
)
Net change in cash and cash equivalents
$
(226
)
 
$
303

 
$
(553
)
 
$
(204
)
 
$
(476
)
 
$
(179
)
Cash and cash equivalents at beginning of period
824

 
598

 
901

 
701

 
824

 
676

Cash and cash equivalents at end of period
$
598

 
$
901

 
$
348

 
$
497

 
$
348

 
$
497

 
 
 
 
 
 
 
 
 
 
 
 
Cash paid during the period for:
 
 
 
 
 
 
 
 
 
 
 
Interest, net of amount capitalized
$
105

 
$
67

 
$
113

 
$
123

 
$
285

 
$
315

Income taxes
$
17

 
$
41

 
$
22

 
$
23

 
$
80

 
$
129

 
 
 
 
 
 
 
 
 
 
 
 

Page 4 of 8



Weyerhaeuser Company
 
 
 
Timberlands Segment
 
Q3.2018 Analyst Package
 
 
 
 
 
 
 

 
Preliminary results (unaudited)
 
 
 
 
 
 
Segment Statement of Operations
in millions
 
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Sales to unaffiliated customers
$
505

 
$
482

 
$
468

 
$
491

 
$
1,455

 
$
1,446

Intersegment sales
228

 
185

 
185

 
179

 
598

 
544

Total net sales
733

 
667

 
653

 
670

 
2,053

 
1,990

Cost of products sold
526

 
485

 
505

 
517

 
1,516

 
1,512

Gross margin
207

 
182

 
148

 
153

 
537

 
478

Selling expenses
1

 
—

 
1

 
1

 
2

 
3

General and administrative expenses
23

 
25

 
23

 
24

 
71

 
71

Research and development expenses
2

 
1

 
2

 
3

 
5

 
10

Charges for integration and restructuring, closures and asset impairments
—

 
—

 
—

 
—

 
—

 
147

Other operating costs (income), net
(8
)
 
(5
)
 
(4
)
 
(6
)
 
(17
)
 
(20
)
Operating income and Net contribution to earnings
$
189

 
$
161

 
$
126

 
$
131

 
$
476

 
$
267

 
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*
in millions
 
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Operating income
$
189

 
$
161

 
$
126

 
$
131

 
$
476

 
$
267

Depreciation, depletion and amortization
79

 
79

 
80

 
89

 
238

 
270

Special items
—

 
—

 
—

 
—

 
—

 
147

Adjusted EBITDA*
$
268

 
$
240

 
$
206

 
$
220

 
$
714

 
$
684

*See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.
 
 
 
 
 
Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)
in millions
 
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Restructuring, impairment and other charges
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
(147
)
 
Selected Segment Items
in millions
 
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Total decrease (increase) in working capital(1)
$
(40
)
 
$
70

 
$
(32
)
 
$
(3
)
 
$
(2
)
 
$
(45
)
Cash spent for capital expenditures
$
(28
)
 
$
(29
)
 
$
(25
)
 
$
(24
)
 
$
(82
)
 
$
(79
)
(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)
 
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Third Party 
Net Sales
(millions)
Delivered logs:
 
 
 
 
 
 
 
 
 
 
 
West
$
266

 
$
262

 
$
238

 
$
221

 
$
766

 
$
673

South
157

 
158

 
157

 
155

 
472

 
451

North
25

 
20

 
25

 
25

 
70

 
68

Other
14

 
7

 
9

 
17

 
30

 
48

Total delivered logs
462

 
447

 
429

 
418

 
1,338

 
1,240

Stumpage and pay-as-cut timber
15

 
11

 
13

 
23

 
39

 
52

Products from international operations
—

 
—

 
—

 
23

 
—

 
63

Recreational and other lease revenue
14

 
15

 
15

 
16

 
44

 
45

Other revenue
14

 
9

 
11

 
11

 
34

 
46

Total
$
505

 
$
482

 
$
468

 
$
491

 
$
1,455

 
$
1,446

Delivered Logs
Third Party Sales
Realizations (per ton)
West
$
131.59

 
$
132.24

 
$
125.67

 
$
116.03

 
$
129.91

 
$
108.43

South
$
34.83

 
$
34.55

 
$
34.88

 
$
34.24

 
$
34.75

 
$
34.40

North
$
60.79

 
$
64.92

 
$
60.97

 
$
59.02

 
$
62.00

 
$
60.24

Delivered Logs
Third Party Sales
Volumes
(tons, thousands)
West
2,019

 
1,984

 
1,897

 
1,910

 
5,900

 
6,210

South
4,510

 
4,560

 
4,521

 
4,527

 
13,591

 
13,105

North
404

 
313

 
414

 
428

 
1,131

 
1,135

Other
317

 
81

 
154

 
424

 
552

 
1,226

Fee Harvest Volumes
(tons, thousands)
West
2,443

 
2,360

 
2,305

 
2,230

 
7,108

 
7,539

South
6,751

 
6,630

 
6,478

 
6,953

 
19,859

 
19,799

North
549

 
423

 
537

 
565

 
1,509

 
1,570

Other
—

 
—

 
—

 
569

 
—

 
1,384

(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.

Page 5 of 8



Weyerhaeuser Company
 
 
 
 
 
 
Real Estate, Energy and Natural Resources Segment
 
Q3.2018 Analyst Package
 
 
 
 
 
 
 
Preliminary results (unaudited)
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
Segment Statement of Operations
 
in millions
 
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Net sales
$
51

 
$
58

 
$
96

 
$
82

 
$
205

 
$
181

Cost of products sold
19

 
30

 
54

 
31

 
103

 
67

Gross margin
32

 
28

 
42

 
51

 
102

 
114

General and administrative expenses
7

 
6

 
6

 
6

 
19

 
20

Other operating costs (income), net
—

 
—

 
—

 
(1
)
 
—

 
(1
)
Operating income
25

 
22

 
36

 
46

 
83

 
95

Interest income and other
—

 
—

 
—

 
1

 
—

 
1

Operating income and net contribution to earnings
$
25

 
$
22

 
$
36

 
$
47

 
$
83

 
$
96

 
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*
 
in millions
 
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Operating income
$
25

 
$
22

 
$
36

 
$
46

 
$
83

 
$
95

Depreciation, depletion and amortization
4

 
3

 
4

 
4

 
11

 
11

Basis of real estate sold
12

 
22

 
46

 
24

 
80

 
48

Adjusted EBITDA*
$
41

 
$
47

 
$
86

 
$
74

 
$
174

 
$
154

*See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.
 
 
 
 
 
Selected Segment Items
 
in millions
 
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Cash spent for capital expenditures
$
—

 
$
—

 
$
—

 
$
(1
)
 
$
—

 
$
(2
)
 
Segment Statistics
 
 
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Net Sales
(millions)
Real Estate
$
34

 
$
38

 
$
76

 
$
64

 
$
148

 
$
128

Energy and Natural Resources
17

 
20

 
20

 
18

 
57

 
53

Total
$
51

 
$
58

 
$
96

 
$
82

 
$
205

 
$
181

Acres Sold
Real Estate
21,771

 
16,290

 
61,681

 
35,749

 
99,742

 
59,009

Price per Acre
Real Estate
$
1,539

 
$
2,258

 
$
1,209

 
$
1,784

 
$
1,452

 
$
2,081


Page 6 of 8



Weyerhaeuser Company
 
 
 
 
 
 
 
 
Wood Products Segment
 
Q3.2018 Analyst Package
 
 
 
 
 
 
 

 
Preliminary results (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Statement of Operations  
in millions
 
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Net sales
$
1,309

 
$
1,525

 
$
1,346

 
$
1,299

 
$
4,180

 
$
3,746

Cost of products sold
1,005

 
1,119

 
1,071

 
1,005

 
3,195

 
2,933

Gross margin
304

 
406

 
275

 
294

 
985

 
813

Selling expenses
21

 
22

 
18

 
20

 
61

 
60

General and administrative expenses
34

 
31

 
32

 
30

 
97

 
94

Research and development expenses
—

 
1

 
—

 
1

 
1

 
2

Charges for integration and restructuring, closures and asset impairments
2

 
—

 
—

 
8

 
2

 
11

Charges (recoveries) for product remediation, net
(20
)
 
20

 
—

 
190

 
—

 
240

Other operating costs (income), net
(3
)
 
3

 
12

 
5

 
12

 
17

Operating income and Net contribution to earnings
$
270

 
$
329

 
$
213

 
$
40

 
$
812

 
$
389

 
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*
in millions
 
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Operating income
$
270

 
$
329

 
$
213

 
$
40

 
$
812

 
$
389

Depreciation, depletion and amortization
36

 
36

 
37

 
37

 
109

 
108

Special items
(20
)
 
20

 
—

 
201

 
—

 
262

Adjusted EBITDA*
$
286

 
$
385

 
$
250

 
$
278

 
$
921

 
$
759

*See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.
 
 
 
 
 
Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)  
in millions
 
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Countervailing and antidumping duties (charges) credits(1)
$
—

 
$
—

 
$
—

 
$
(5
)
 
$
—

 
$
(16
)
Restructuring, impairments, and other charges
—

 
—

 
—

 
(6
)
 
—

 
(6
)
Product remediation (charges) recoveries, net
20

 
(20
)
 
—

 
(190
)
 
—

 
(240
)
Total
$
20

 
$
(20
)
 
$
—

 
$
(201
)
 
$
—

 
$
(262
)
(1) As of first quarter 2018, countervailing and antidumping duties are no longer reported as a special item.
 
Selected Segment Items
in millions
 
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Total decrease (increase) in working capital(2)
$
(226
)
 
$
3

 
$
71

 
$
150

 
$
(152
)
 
$
141

Cash spent for capital expenditures
$
(52
)
 
$
(68
)
 
$
(79
)
 
$
(71
)
 
$
(199
)
 
$
(176
)
(2) 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
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Structural Lumber
(volumes presented
in board feet)
Third party net sales
$
569

 
$
681

 
$
581

 
$
525

 
$
1,831

 
$
1,541

Third party sales realizations
$
498

 
$
541

 
$
491

 
$
448

 
$
511

 
$
434

Third party sales volumes(3)
1,140

 
1,261

 
1,184

 
1,172

 
3,585

 
3,548

Production volumes
1,160

 
1,180

 
1,106

 
1,093

 
3,446

 
3,391

Engineered Solid
Section
(volumes presented
in cubic feet)
Third party net sales
$
129

 
$
139

 
$
132

 
$
131

 
$
400

 
$
378

Third party sales realizations
$
2,088

 
$
2,156

 
$
2,208

 
$
2,047

 
$
2,150

 
$
1,970

Third party sales volumes(3)
6.2

 
6.4

 
6.0

 
6.4

 
18.6

 
19.2

Production volumes
6.3

 
6.4

 
6.3

 
6.4

 
19.0

 
19.3

Engineered
I-joists
(volumes presented
in lineal feet)
Third party net sales
$
78

 
$
92

 
$
91

 
$
93

 
$
261

 
$
251

Third party sales realizations
$
1,585

 
$
1,630

 
$
1,668

 
$
1,529

 
$
1,629

 
$
1,512

Third party sales volumes(3)
49

 
57

 
54

 
60

 
160

 
166

Production volumes
56

 
52

 
46

 
58

 
154

 
161

Oriented Strand
Board
(volumes presented
in square feet 3/8")
Third party net sales
$
232

 
$
277

 
$
215

 
$
243

 
$
724

 
$
671

Third party sales realizations
$
314

 
$
367

 
$
321

 
$
328

 
$
335

 
$
295

Third party sales volumes(3)
739

 
754

 
669

 
741

 
2,162

 
2,274

Production volumes
734

 
747

 
665

 
744

 
2,146

 
2,256

Softwood Plywood
(volumes presented
in square feet 3/8")
Third party net sales
$
50

 
$
55

 
$
53

 
$
45

 
$
158

 
$
136

Third party sales realizations
$
438

 
$
461

 
$
439

 
$
386

 
$
446

 
$
381

Third party sales volumes(3)
115

 
118

 
122

 
117

 
355

 
358

Production volumes
97

 
105

 
106

 
88

 
308

 
284

Medium Density
Fiberboard
(volumes presented
in square feet 3/4")
Third party net sales
$
43

 
$
47

 
$
48

 
$
48

 
$
138

 
$
146

Third party sales realizations
$
839

 
$
839

 
$
828

 
$
821

 
$
835

 
$
820

Third party sales volumes(3)
51

 
55

 
59

 
58

 
165

 
177

Production volumes
50

 
57

 
61

 
63

 
168

 
182

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

Page 7 of 8



Weyerhaeuser Company
 
 
 
 
 
 
 
 
Unallocated Items
 
Q3.2018 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 expense, pension and postretirement costs, foreign exchange transaction gains and losses and the elimination of intersegment profit in inventory and LIFO.
 
Contribution to Earnings
 
in millions
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Unallocated corporate function and variable compensation expense
$
(18
)
 
$
(19
)
 
$
(19
)
 
$
(19
)
 
$
(56
)
 
$
(55
)
Liability classified share-based compensation
—

 
(2
)
 
4

 
(1
)
 
2

 
(7
)
Foreign exchange gains (losses)
(2
)
 
2

 
(2
)
 
3

 
(2
)
 
—

Elimination of intersegment profit in inventory and LIFO
(21
)
 
3

 
—

 
3

 
(18
)
 
(6
)
Charges for integration and restructuring, closures and asset impairments
—

 
—

 
—

 
(6
)
 
—

 
(20
)
Other
(39
)
 
(20
)
 
(21
)
 
8

 
(80
)
 
(8
)
Operating income (loss)
(80
)
 
(36
)
 
(38
)
 
(12
)
 
(154
)
 
(96
)
Non-operating pension and other postretirement benefit (costs) credits
(24
)
 
(13
)
 
(17
)
 
(16
)
 
(54
)
 
(46
)
Interest income and other
12

 
11

 
13

 
11

 
36

 
29

Net contribution to earnings
$
(92
)
 
$
(38
)
 
$
(42
)
 
$
(17
)
 
$
(172
)
 
$
(113
)
 
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*
 
in millions
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Operating income (loss)
$
(80
)
 
$
(36
)
 
$
(38
)
 
$
(12
)
 
$
(154
)
 
$
(96
)
Depreciation, depletion and amortization
1

 
1

 
1

 
2

 
3

 
5

Unallocated pension service costs
—

 
—

 
—

 
1

 
—

 
3

Special items
28

 
—

 
—

 
6

 
28

 
20

Adjusted EBITDA*
$
(51
)
 
$
(35
)
 
$
(37
)
 
$
(3
)
 
$
(123
)
 
$
(68
)
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.
 
 
 
 
 
 
 
 
 
 
 
 
Unallocated Special Items Included in Net Contribution to Earnings (Pre-Tax)
 
in millions
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Plum Creek merger and integration-related costs
$
—

 
$
—

 
$
—

 
$
(6
)
 
$
—

 
$
(20
)
Environmental remediation insurance (charges) recoveries
(28
)
 
—

 
—

 
—

 
(28
)
 
—

Total
$
(28
)
 
$
—

 
$
—

 
$
(6
)
 
$
(28
)
 
$
(20
)
 
Unallocated Selected Items
 
in millions
Q1.2018
 
Q2.2018
 
Q3.2018
 
Q3.2017
 
YTD.2018
 
YTD.2017
Cash spent for capital expenditures
$
(1
)
 
$
—

 
$
(1
)
 
$
(1
)
 
$
(2
)
 
$
(2
)

Page 8 of 8