FEDERAL WAY, Wash., Aug. 1, 2014 /PRNewswire/ --Weyerhaeuser Company (NYSE: WY) reported second quarter net earnings to common shareholders of $280 million, or 47 cents per diluted share, on net sales from continuing operations of $2.0 billion. This compares with net earnings of $196 million, or 35 cents per diluted share, on net sales from continuing operations of $1.9 billion for the same period last year.

Earnings for second quarter 2014 include after-tax earnings of $22 million from discontinued operations. Discontinued operations relate to Weyerhaeuser Real Estate Company (WRECO), which was combined with TRI Pointe Homes, Inc. (TRI Pointe) through a Reverse Morris Trust transaction on July 7, 2014. Second quarter results also include net after-tax gains of $24 million from special items, primarily related to a postretirement plan amendment. Excluding discontinued operations and special items, the company reported net earnings of $234 million, or 40 cents per diluted share. This compares with net earnings from continuing operations before special items of $183 million, or 33 cents per diluted share, for second quarter 2013 and $143 million, or 24 cents per diluted share, for first quarter 2014.

"The strong results for each of our businesses in the second quarter reflect our relentless focus on operational excellence," said Doyle Simons, president and chief executive officer. "Through the recent divestiture of our homebuilding business and last year's Longview Timber acquisition, we have created a focused forest products company committed to driving operational improvements and fully capitalizing on the continued measured recovery in U.S. housing markets and the overall economy.

WEYERHAEUSER FINANCIAL HIGHLIGHTS

2014

2014

2013

(millions, except per share data)

1Q

2Q

2Q

Net sales from continuing operations

$1,736

$1,964

$1,874

Net earnings attributable to Weyerhaeuser common shareholders(1)

$183

$280

$196

Weighted average shares outstanding, diluted(2)

589

590

558

Earnings per diluted share

$0.31

$0.47

$0.35

Earnings per diluted share from continuing operations

$0.29

$0.43

$0.33

Net earnings from continuing operations before special items(3)

$143

$234

$183

Earnings per diluted share from continuing operations before special items

$0.24

$0.40

$0.33

Net change in cash and cash equivalents(4)

($53)

$68

$1,723

Cash and cash equivalents at end of period

$777

$845

$2,358

 

(1) Includes net earnings from discontinued operations.

(2) Weyerhaeuser's weighted average common shares outstanding increased during the third quarter of 2013 following the issuance of common shares in conjunction with the acquisition of Longview Timber LLC.

(3) Special items for the second quarter of 2014 include a gain on a postretirement plan amendment and restructuring charges related to the company's SG&A cost reduction initiative. First quarter included similar items as well as a gain on a non-strategic asset sale.

(4) Net change in cash and equivalents excludes discontinued operations for all quarters and for the second quarter of 2013 includes $1,450 million from issuance of common and mandatory convertible preference shares related to the acquisition of Longview Timber LLC.

 

TIMBERLANDS  

 

FINANCIAL HIGHLIGHTS (millions)

1Q 2014

2Q 2014

Change

Net sales

$377

$397

$20

Contribution to pre-tax earnings

$164

$170

$6

2Q 2014 Performance - Western sales volumes increased due to continued steady demand for domestic and Chinese export logs, partially offset by reduced Japanese demand. Average sales realizations for Western logs declined slightly in domestic and most export markets. Logging and road costs increased seasonally. In the South, slightly higher average log price realizations were partially offset by lower fee harvest volumes due to wet weather. Earnings from disposition of non-strategic timberlands increased by $20 million compared with the first quarter.

3Q 2014 Outlook - Weyerhaeuser anticipates significantly lower earnings from the Timberlands segment in the third quarter, primarily due to seasonality and lower earnings from disposition of non-strategic timberlands. In the West, the company expects seasonally lower sales volumes and prices for domestic and export logs. In the South, the company anticipates higher silviculture and road costs, largely offset by increased fee harvest volumes.

WOOD PRODUCTS

 

FINANCIAL HIGHLIGHTS (millions)

1Q 2014

2Q 2014

Change

Net sales

$898

$1,077

$179

Contribution to pre-tax earnings

$64

$102

$38

2Q 2014 Performance - Sales volumes rose seasonally across all product lines, and average selling prices for engineered wood products increased. These improvements were partially offset by lower average realizations for lumber and oriented strand board. Per unit manufacturing costs decreased compared with first quarter due to continued operational improvements and increased production volumes in lumber and engineered wood products. Earnings from engineered wood products improved significantly in the second quarter.

3Q 2014 Outlook - Weyerhaeuser expects comparable earnings from the Wood Products segment in the third quarter. The company anticipates slightly lower average realizations for lumber and oriented strand board, offset by lower Western log costs and improved price realizations for engineered wood products.

CELLULOSE FIBERS

 

FINANCIAL HIGHLIGHTS (millions)

1Q 2014

2Q 2014

Change

Net sales

$461

$490

$29

Contribution to pre-tax earnings

$54

$91

$37

 

2Q 2014 Performance - Average price realizations for pulp and liquid packaging board improved compared with the first quarter, and sales volumes increased. Mill operating performance was strong, and maintenance costs declined due to fewer scheduled annual outage days.

3Q 2014 Outlook - Weyerhaeuser plans an extended outage at its liquid packaging board facility for scheduled maintenance and capital improvements. The company also expects increased scheduled maintenance outage days within its pulp mill system. As a result, Weyerhaeuser anticipates significantly lower earnings from the Cellulose Fibers segment.

DISCONTINUED OPERATIONS

 

 

 

 

 

 

 

FINANCIAL HIGHLIGHTS (millions)

1Q 2014

2Q 2014

Change

Net sales

$248

$317

$69

Earnings from discontinued operations, net of tax

$10

$22

$12

On July 7, 2014, Weyerhaeuser completed the divestiture of WRECO through the combination of WRECO and TRI Pointe in a Reverse Morris Trust transaction. Discontinued Operations includes certain items previously reported in the Real Estate segment and Unallocated Items.

2Q 2014 Performance - Earnings from discontinued operations improved compared with first quarter, primarily due to a seasonal increase in home closings.

3Q 2014 Outlook - Third quarter results will include a net gain of approximately $1 billion on the divestiture of WRECO.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control nearly 7 million acres of timberlands, primarily in the U.S., and manage another 14 million acres under long-term licenses in Canada. We manage these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. We are also one of the largest manufacturers of wood and cellulose fibers products. Our company is a real estate investment trust. In 2013, our continuing operations generated $7.3 billion in sales and employed approximately 13,000 people who serve customers worldwide. We are listed on the Dow Jones World Sustainability Index. Our common stock trades on the New York Stock Exchange under the symbol WY. Learn more at www.weyerhaeuser.com.

EARNINGS CALL INFORMATION

Weyerhaeuser will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on August 1 to discuss second quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on August 1.

To join the conference call from within North America, dial 877-296-9413 (access code: 23990484) at least 15 minutes prior to the call. Those calling from outside North America should dial 706-679-2458 (access code: 23990484). Replays will be available for two weeks at 855-859-2056 (access code: 23990484) from within North America and at 404-537-3406 (access code: 23990484) from outside North America.

FORWARD LOOKING STATEMENTS

This news release contains statements concerning the company's future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on various assumptions and may not be accurate because of risks and uncertainties surrounding these assumptions. Factors listed below, as well as other factors, may cause actual results to differ significantly from these forward-looking statements. There is no guarantee that any of the events anticipated by these forward-looking statements will occur. If any of the events occur, there is no guarantee what effect they will have on company operations or financial condition. The company will not update these forward-looking statements after the date of this news release.

Some forward-looking statements discuss the company's plans, strategies and intentions. They use words such as "expects," "may," "will," "believes," "should," "approximately," "anticipates," "estimates," and "plans."  In addition, these words may use the positive or negative or other variations of those terms.

This release contains forward-looking statements regarding the company's expectations during the third quarter of 2014, including with respect to earnings, domestic and export log prices, fee harvest levels and realizations, expenses, including road and silviculture costs, dispositions of non-strategic timberlands, prices and realizations across the Wood Products product lines, log costs, maintenance time and expenses, and gains on the divestiture of the WRECO business.

Major risks, uncertainties and assumptions that affect the company's businesses and may cause actual results to differ from these forward-looking statements, include, but are not limited to:

  • the effect of general economic conditions, including employment rates, housing starts, interest rate levels, availability of financing for home mortgages, and strength of the U.S. dollar;
  • market demand for the company's products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions;
  • performance of the company's manufacturing operations, including maintenance requirements;
  • the level of competition from domestic and foreign producers;
  • the successful execution of internal performance plans, including restructurings and cost reduction initiatives;
  • raw material prices;
  • energy prices;
  • the effect of weather;
  • the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;
  • transportation 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 company stock on charges for stock-based compensation;
  • changes in accounting principles; and
  • other factors described under "Risk Factors" in the Company's annual report on Form 10-K and quarterly reports on Form 10-Q.

The company also is a large exporter and is affected by changes in economic activity in Europe and Asia, particularly Japan and China. It is affected by changes in currency exchange rates, particularly the relative value of the U.S. dollar to the euro and the Canadian dollar, and the relative value of the euro and the yen. Restrictions on international trade or tariffs imposed on imports also may affect the company. 

Weyerhaeuser Company

 

 

 

 

Exhibit 99.2

Q2.2014 Analyst Package

 

 

 

 

 

Preliminary results, subject to audit

 

 

 

 

 

 

 

 

 

Consolidated Statement of Operations

 

 

 

 

 

 

 

 

 

 

in millions

Q1

 

Q2

 

Year-to-date

 

March 31,
2014

 

June 30,
2014

 

June 30,
2013

 

June 30,
2014

 

June 30,
2013

Net Sales

$ 1,736

 

$ 1,964

 

$ 1,874

 

$ 3,700

 

$ 3,629

Cost of products sold

1,361

 

1,499

 

1,453

 

2,860

 

2,825

Gross margin

375

 

465

 

421

 

840

 

804

Selling expenses

28

 

27

 

31

 

55

 

64

General and administrative expenses

88

 

88

 

96

 

176

 

201

Research and development expenses

7

 

7

 

8

 

14

 

15

Charges for restructuring, closures and impairments

19

 

8

 

3

 

27

 

6

Other operating income, net

(75)

 

(65)

 

(10)

 

(140)

 

(28)

Operating income

308

 

400

 

293

 

708

 

546

Interest income and other

9

 

11

 

8

 

20

 

18

Interest expense, net of capitalized interest

(83)

 

(83)

 

(80)

 

(166)

 

(162)

Earnings from continuing operations before income taxes

234

 

328

 

221

 

562

 

402

Income taxes

(50)

 

(59)

 

(36)

 

(109)

 

(75)

Earnings from continuing operations

184

 

269

 

185

 

453

 

327

Earnings from discontinued operations, net of income taxes

10

 

22

 

13

 

32

 

15

Net earnings

194

 

291

 

198

 

485

 

342

Dividends on preference shares

(11)

 

(11)

 

(2)

 

(22)

 

(2)

Net earnings attributable to Weyerhaeuser common shareholders

$     183

 

$     280

 

$     196

 

$     463

 

$     340

 

Per Share Information

 

 

Q1

 

Q2

 

Year-to-date

 

March 31,
2014

 

June 30,
2014

 

June 30,
2013

 

June 30,
2014

 

June 30,
2013

Earnings per share attributable to Weyerhaeuser common shareholders, basic:

 

 

 

 

 

 

 

 

 

Continuing operations

$     0.29

 

$     0.44

 

$     0.33

 

$     0.73

 

$     0.59

Discontinued operations

0.02

 

0.04

 

0.02

 

0.06

 

0.03

Net earnings per share

$     0.31

 

$     0.48

 

$     0.35

 

$     0.79

 

$     0.62

Earnings per share attributable to Weyerhaeuser common shareholders, diluted:

 

 

 

 

 

 

 

 

 

Continuing operations

$     0.29

 

$     0.43

 

$     0.33

 

$     0.73

 

$     0.58

Discontinued operations

0.02

 

0.04

 

0.02

 

0.06

 

0.03

Net earnings per share

$     0.31

 

$     0.47

 

$     0.35

 

$     0.79

 

$     0.61

Dividends paid per common share

$     0.22

 

$     0.22

 

$     0.20

 

$     0.44

 

$     0.37

Weighted average shares outstanding (in thousands):

 

 

 

 

 

 

 

 

 

Basic

584,915

 

586,061

 

552,855

 

585,491

 

549,159

Diluted

589,312

 

589,766

 

557,588

 

589,542

 

554,301

Common shares outstanding at end of period (in thousands)

584,961

 

586,697

 

577,874

 

586,698

 

577,874

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

in millions

Q1

 

Q2

 

Year-to-date

 

March 31,
2014

 

June 30,
2014

 

June 30,
2013

 

June 30,
2014

 

June 30,
2013

Net earnings

$      194

 

$      291

 

$      198

 

$      485

 

$      342

Earnings from discontinued operations, net of income taxes

(10)

 

(22)

 

(13)

 

(32)

 

(15)

Interest income and other

(9)

 

(11)

 

(8)

 

(20)

 

(18)

Interest expense, net of capitalized interest

83

 

83

 

80

 

166

 

162

Income taxes

50

 

59

 

36

 

109

 

75

Operating income

308

 

400

 

293

 

708

 

546

Depreciation, depletion and amortization

123

 

122

 

108

 

245

 

217

Non-operating pension and postretirement costs (credits)

(10)

 

(11)

 

10

 

(21)

 

20

Special items

(49)

 

(39)

 

 

(88)

 

Adjusted EBITDA*

$     372

 

$     472

 

$     411

 

$     844

 

$     783

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

 

 

 

 

 

 

 

 

 

 

Weyerhaeuser Company

 

 

 

Q2.2014 Analyst Package

 

 

 

 

 

Preliminary results, subject to audit

 

 

 

 

 

Consolidated Balance Sheet

 

 

 

 

 

 

in millions

March 31,
2014

 

June 30,
2014

 

December 31,
2013

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$        777

 

$        845

 

$              830

Receivables, less allowances

543

 

590

 

518

Receivables for taxes

34

 

37

 

101

Inventories

626

 

596

 

542

Prepaid expenses

101

 

106

 

117

Deferred tax assets

186

 

128

 

130

Current assets of discontinued operations

48

 

988

 

88

Total current assets

2,315

 

3,290

 

2,326

Property and equipment, net

2,596

 

2,599

 

2,689

Construction in progress

140

 

157

 

112

Timber and timberlands at cost, less depletion charged to disposals

6,574

 

6,571

 

6,580

Investments in and advances to equity affiliates

189

 

188

 

190

Goodwill

40

 

40

 

42

Deferred tax assets

1

 

 

5

Other assets

354

 

419

 

324

Restricted financial investments held by variable interest entities

615

 

615

 

615

Noncurrent assets of discontinued operations

1,762

 

1,827

 

1,694

Total assets

$ 14,586

 

$ 15,706

 

$       14,577

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Notes payable

$            2

 

$          —

 

$                  2

Accounts payable

365

 

335

 

343

Accrued liabilities

582

 

597

 

629

Current liabilities of discontinued operations

123

 

137

 

154

Total current liabilities

1,072

 

1,069

 

1,128

Long-term debt

4,891

 

4,891

 

4,891

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

511

 

511

 

511

Deferred income taxes

387

 

410

 

285

Deferred pension and other postretirement benefits

471

 

422

 

516

Other liabilities

334

 

334

 

382

Noncurrent liabilities of discontinued operations

35

 

926

 

32

Total liabilities

7,701

 

8,563

 

7,745

Equity:

 

 

 

 

 

Total Weyerhaeuser shareholders' interest

6,852

 

7,092

 

6,795

Noncontrolling interests

3

 

2

 

3

Noncontrolling interests in discontinued operations

30

 

49

 

34

Total equity

6,885

 

7,143

 

6,832

Total liabilities and equity

$ 14,586

 

$ 15,706

 

$       14,577

 

Weyerhaeuser Company

 

 

 

 

 

Q2.2014 Analyst Package

 

 

 

 

 

 

 

 

 

Preliminary results, subject to audit

 

 

 

 

 

 

 

 

 

Consolidated Statement of Cash Flows

 

 

 

 

 

 

 

 

 

 

in millions

Q1

 

Q2

 

Year-to-date

 

March 31,
2014

 

June 30,
2014

 

June 30,
2013

 

June 30,
2014

 

June 30,
2013

Cash flows from operations:

 

 

 

 

 

 

 

 

 

Net earnings

$      194

 

$    291

 

$    198

 

$    485

 

$    342

Noncash charges (credits) to income:

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

126

 

126

 

111

 

252

 

223

Deferred income taxes, net

36

 

89

 

23

 

125

 

49

Pension and other postretirement benefits

(47)

 

(44)

 

28

 

(91)

 

52

Share-based compensation expense

9

 

11

 

10

 

20

 

22

Charges for impairment of assets

 

1

 

2

 

1

 

3

Net gains on dispositions of assets

(25)

 

(21)

 

(14)

 

(46)

 

(21)

Foreign exchange transaction (gains) losses

14

 

(12)

 

4

 

2

 

8

Change in:

 

 

 

 

 

 

 

 

 

Receivables less allowances

(1)

 

(47)

 

45

 

(48)

 

(120)

Receivable for taxes

67

 

(3)

 

22

 

64

 

52

Inventories

(88)

 

34

 

32

 

(54)

 

(36)

Real estate and land

(72)

 

(35)

 

(62)

 

(107)

 

(121)

Prepaid expenses

3

 

(3)

 

(1)

 

 

(14)

Accounts payable and accrued liabilities

(80)

 

(17)

 

34

 

(97)

 

(32)

Deposits on land positions and other assets

12

 

(4)

 

(9)

 

8

 

(10)

Pension and postretirement contributions

(33)

 

(30)

 

(32)

 

(63)

 

(69)

Other

(6)

 

(14)

 

(17)

 

(20)

 

(15)

Net cash from operations

109

 

322

 

374

 

431

 

313

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Property and equipment

(51)

 

(83)

 

(47)

 

(134)

 

(82)

Timberlands reforestation

(14)

 

(11)

 

(8)

 

(25)

 

(21)

Proceeds from sale of assets

19

 

1

 

8

 

20

 

14

Payments of liabilities held by special purpose entities

 

 

22

 

 

22

Other

 

 

(4)

 

 

(4)

Cash from investing activities

(46)

 

(93)

 

(29)

 

(139)

 

(71)

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Net proceeds from issuance of common shares

 

 

781

 

 

781

Net proceeds from issuance of preference shares

 

 

669

 

 

669

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

 

887

 

 

887

 

Deposit of WRECO debt proceeds into escrow

 

(887)

 

 

(887)

 

Cash dividends on common shares

(129)

 

(128)

 

(109)

 

(257)

 

(202)

Cash dividends on preference shares

 

(11)

 

 

(11)

 

Change in book overdrafts

(6)

 

 

4

 

(6)

 

7

Payments on debt

 

 

(21)

 

 

(177)

Exercises of stock options

15

 

39

 

51

 

54

 

132

Other

2

 

(1)

 

3

 

1

 

12

Cash from financing activities

(118)

 

(101)

 

1,378

 

(219)

 

1,222

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

(55)

 

128

 

1,723

 

73

 

1,464

Cash and cash equivalents at beginning of period

835

 

780

 

639

 

835

 

898

Cash and cash equivalents at end of period

$      780

 

$    908

 

$ 2,362

 

$    908

 

$ 2,362

Cash paid (received) during the year for:

 

 

 

 

 

 

 

 

 

Interest, net of amount capitalized

$      101

 

$      52

 

$      55

 

$    153

 

$    166

Income taxes

$      (50)

 

$        5

 

$      (4)

 

$    (45)

 

$      (6)

 

 

Weyerhaeuser Company

 

 

 

 

Total Company Statistics

Q2.2014 Analyst Package

 

 

 

 

 

Preliminary results, subject to audit

 

 

 

 

 

 

 

 

 

Special Items Included in Net Earnings

 

 

 

 

 

 

 

 

 

 

in millions

Q1

 

Q2

 

Year-to-date

 

March 31,
2014

 

June 30,
2014

 

June 30,
2013

 

June 30,
2014

 

June 30,
2013

Net earnings attributable to Weyerhaeuser common shareholders

$  183

 

$  280

 

$  196

 

$  463

 

$  340

Restructuring, impairments and other charges

13

 

5

 

 

18

 

Gain on sale of non-strategic asset

(14)

 

 

 

(14)

 

Gain on postretirement plan amendment

(29)

 

(29)

 

 

(58)

 

Net earnings attributable to Weyerhaeuser common shareholders before special items

153

 

256

 

196

 

409

 

340

Earnings from discontinued operations, net of income taxes

(10)

 

(22)

 

(13)

 

(32)

 

(15)

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

$  143

 

$  234

 

$  183

 

$  377

 

$  325

 

 

 

 

 

 

 

 

 

 

 

Q1

 

Q2

 

Year-to-date

 

March 31,
2014

 

June 30,
2014

 

June 30,
2013

 

June 30,
2014

 

June 30,
2013

Net earnings per diluted share attributable to Weyerhaeuser common shareholders

$ 0.31

 

$ 0.47

 

$ 0.35

 

$ 0.79

 

$ 0.61

Restructuring, impairments and other charges

0.02

 

0.01

 

 

0.03

 

Gain on sale of non-strategic asset

(0.02)

 

 

 

(0.02)

 

Gain on postretirement plan amendment

(0.05)

 

(0.04)

 

 

(0.10)

 

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

0.26

 

44.00

 

0.35

 

0.70

 

0.61

Earnings from discontinued operations, net of income taxes

(0.02)

 

(0.04)

 

(0.02)

 

(0.06)

 

(0.03)

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

$ 0.24

 

$ 0.40

 

$ 0.33

 

$ 0.64

 

$ 0.58

 

Selected Total Company Items

 

in millions

Q1

 

Q2

 

Year-to-date

 

March 31,
2014

 

June 30,
2014

 

June 30,
2013

 

June 30,
2014

 

June 30,
2013

Depreciation, depletion and amortization:

 

 

 

 

 

 

 

 

 

Cost of products sold

$   117

 

$    117

 

$    102

 

$    234

 

$    205

Selling, general and administrative expenses

6

 

5

 

6

 

$      11

 

12

Total depreciation, depletion and amortization

$   123

 

$    122

 

$    108

 

$    245

 

$    217

 

 

 

 

 

 

 

 

 

 

Pension and postretirement costs:

 

 

 

 

 

 

 

 

 

Pension and postretirement costs allocated to business segments

$     10

 

$      12

 

$      14

 

$      22

 

$      27

Pension and postretirement costs (credits) not allocated

(10)

 

(12)

 

10

 

$    (22)

 

20

Total company pension and postretirement costs

$     —

 

$     —

 

$      24

 

$     —

 

$      47

 

 

 

 

 

 

 

 

 

 

Total increase in working capital(1)

$  (170)

 

$      49

 

$    161

 

$  (121)

 

$  (173)

Cash spent for capital expenditures

$    (63)

 

$    (92)

 

$    (53)

 

$  (155)

 

$    (99)

(1)Working capital does not include cash balances.

 

 

 

 

 

 

 

 

 

 

 

Weyerhaeuser Company

 

 

 

 

Timberlands Segment

Q2.2014 Analyst Package

 

 

 

 

 

Preliminary results, subject to audit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Statement of Operations

 

 

 

 

 

 

 

 

 

 

 

in millions

 

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Sales to unaffiliated customers

$   377

 

$      397

 

$      333

 

$       774

 

$       626

Intersegment sales

238

 

186

 

166

 

424

 

390

Total net sales

615

 

583

 

499

 

1,198

 

1,016

Cost of products sold

431

 

399

 

365

 

830

 

760

Gross margin

184

 

184

 

134

 

368

 

256

Selling expenses

2

 

2

 

2

 

4

 

5

General and administrative expenses

26

 

23

 

25

 

49

 

50

Research and development expenses

4

 

3

 

5

 

7

 

9

Charges for restructuring, closures and impairments

 

 

 

 

2

Other operating income, net

(12)

 

(14)

 

(11)

 

(26)

 

(26)

Operating income

164

 

170

 

113

 

334

 

216

Interest income and other

 

 

1

 

 

2

Net contribution to earnings

$ 164

 

$     170

 

$     114

 

$     334

 

$     218

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

in millions

 

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Operating income

$ 164

 

$     170

 

$     113

 

$     334

 

$     216

Depreciation, depletion and amortization

52

 

51

 

34

 

103

 

70

Adjusted EBITDA*

$ 216

 

$     221

 

$     147

 

$     437

 

$     286

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Segment Items

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Total increase in working capital(1)

$   (29)

 

$      (15)

 

$      (21)

 

$       (44)

 

$       (31)

Cash spent for capital expenditures

$   (19)

 

$      (18)

 

$      (18)

 

$       (37)

 

$       (36)

(1)Working capital does not include cash balances.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Statistics

 

 

 

 

 

 

 

 

 

 

 

 

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Third Party 
Net Sales 
(millions)

Logs:

 

 

 

 

 

 

 

 

 

West

$   257

 

$      261

 

$      208

 

$       518

 

$       385

South

62

 

60

 

65

 

122

 

126

Canada

6

 

1

 

2

 

7

 

9

Total logs

325

 

322

 

275

 

647

 

520

Chip sales

3

 

2

 

2

 

5

 

5

Timberlands exchanges

4

 

28

 

14

 

32

 

16

Higher and better use land sales

3

 

7

 

5

 

10

 

8

Minerals, oil and gas

7

 

8

 

9

 

15

 

17

Products from international operations

24

 

26

 

22

 

50

 

44

Other products

11

 

4

 

6

 

15

 

16

Total

$   377

 

$      397

 

$      333

 

$       774

 

$       626

Logs
Third Party Sales
Realizations
(per cubic meter)

West

$  0.11

 

$ 109.13

 

$ 115.11

 

$  111.71

 

$  110.44

South

$  0.04

 

$   45.16

 

$   43.47

 

$    45.02

 

$    43.47

Canada

$  0.04

 

$   38.04

 

$   36.38

 

$    35.75

 

$    36.57

International

$  0.02

 

$   16.27

 

$   25.00

 

$    16.64

 

$    24.54

Logs
Third Party Sales
Volumes
(cubic meters, thousands)

West

2,246

 

2,390

 

1,812

 

4,636

 

3,486

South

1,385

 

1,339

 

1,507

 

2,724

 

2,906

Canada

156

 

30

 

38

 

186

 

242

International

147

 

139

 

77

 

286

 

145

Total

3,934

 

3,898

 

3,434

 

7,832

 

6,779

Logs
Fee Harvest Volumes
(cubic meters, thousands)

West

2.875

 

2.888

 

1,921

 

5,763

 

3,916

South

2.866

 

2.715

 

2,828

 

5,581

 

5,661

International

0.249

 

0.249

 

167

 

498

 

364

Total

5,990

 

5,852

 

4,916

 

11.842

 

9.941

 

Weyerhaeuser Company

 

 

 

 

Wood Products Segment

Q2.2014 Analyst Package

 

 

 

 

 

 

 

Preliminary results, subject to audit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Statement of Operations  

 

 

 

 

 

 

 

 

 

 

 

in millions

 

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Sales to unaffiliated customers

$    898

 

$ 1,077

 

$ 1,065

 

$    1,975

 

$    2,053

Intersegment sales

19

 

21

 

18

 

40

 

36

Total net sales

917

 

1,098

 

1,083

 

2,015

 

2,089

Cost of products sold

791

 

939

 

884

 

1,730

 

1,654

Gross margin

126

 

159

 

199

 

285

 

435

Selling expenses

25

 

23

 

24

 

48

 

50

General and administrative expenses

37

 

30

 

36

 

67

 

72

Research and development expenses

1

 

2

 

1

 

3

 

2

Charges for restructuring, closures and impairments

 

2

 

1

 

2

 

1

Other operating costs (income), net

(1)

 

 

1

 

(1)

 

(4)

Operating income

64

 

102

 

136

 

166

 

314

Interest income and other

 

 

 

 

Net contribution to earnings

$     64

 

$   102

 

$   136

 

$     166

 

$     314

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

in millions

 

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Operating income

$     64

 

$   102

 

$   136

 

$     166

 

$     314

Depreciation, depletion and amortization

29

 

30

 

31

 

59

 

62

Adjusted EBITDA*

$     93

 

$   132

 

$   167

 

$     225

 

$     376

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Segment Items

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Total decrease (increase) in working capital(1)

$  (137)

 

$      29

 

$      75

 

$     (108)

 

$     (119)

Cash spent for capital expenditures

$    (18)

 

$    (38)

 

$    (16)

 

$       (56)

 

$       (26)

(1)Working capital does not include cash balances.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Statistics

 

 

 

 

 

 

 

 

 

 

 

in millions, except for third-party sales realizations

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Structural Lumber
(board feet)

Third party net sales

$    427

 

$    515

 

$    502

 

$       942

 

$       953

Third party sales realizations

$    432

 

$    427

 

$    434

 

$       429

 

$       437

Third party sales volumes(1)

989

 

1,206

 

1,156

 

2,195

 

2,181

Production volumes

1,009

 

1,081

 

1,053

 

2,090

 

2,074

Outside purchase volumes

78

 

82

 

77

 

160

 

179

Engineered Solid
Section
(cubic feet)

Third party net sales

$      90

 

$    114

 

$      84

 

$       204

 

$       166

Third party sales realizations

$ 1,959

 

$ 1,976

 

$ 1,920

 

$    1,968

 

$    1,885

Third party sales volumes(1)

4.6

 

5.8

 

4.4

 

10.4

 

8.8

Production volumes

4.9

 

5.7

 

4.6

 

10.6

 

9.2

Outside purchase volumes

1.8

 

0.5

 

0.4

 

2.3

 

1.3

Engineered
I-joists
(lineal feet)

Third party net sales

$      59

 

$      81

 

$      60

 

$       140

 

$       116

Third party sales realizations

$ 1,454

 

$ 1,470

 

$ 1,358

 

$    1,463

 

$    1,330

Third party sales volumes(1)

40

 

55

 

44

 

95

 

87

Production volumes

44

 

55

 

42

 

99

 

86

Outside purchase volumes

1

 

3

 

1

 

4

 

4

Oriented Strand
Board
(square feet 3/8')

Third party net sales

$    148

 

$    159

 

$    224

 

$       307

 

$       460

Third party sales realizations

$    230

 

$    226

 

$    332

 

$       228

 

$       345

Third party sales volumes(1)

641

 

706

 

675

 

1,347

 

1,332

Production volumes

657

 

681

 

663

 

1,338

 

1,325

Outside purchase volumes

53

 

51

 

56

 

104

 

124

Softwood Plywood
(square feet 3/8')

Third party net sales

$      30

 

$      35

 

$      41

 

$         65

 

$         77

Third party sales realizations

$    332

 

$    348

 

$    378

 

$       340

 

$       374

Third party sales volumes(1)

90

 

102

 

108

 

192

 

207

Production volumes

59

 

60

 

63

 

119

 

124

Outside purchase volumes

33

 

36

 

33

 

69

 

75

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

 

Weyerhaeuser Company

 

 

 

 

Cellulose Fibers Segment

Q2.2014 Analyst Package

 

 

 

 

 

 

 

Preliminary results, subject to audit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Statement of Operations

 

 

 

 

 

 

 

 

 

 

 

in millions

 

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Total net sales

$   461

 

$   490

 

$   476

 

$     951

 

$     950

Cost of products sold

390

 

381

 

394

 

771

 

818

Gross margin

71

 

109

 

82

 

180

 

132

Selling expenses

4

 

4

 

5

 

8

 

9

General and administrative expenses

20

 

20

 

21

 

40

 

41

Research and development expenses

2

 

2

 

2

 

4

 

4

Other operating income, net

(9)

 

(8)

 

(5)

 

(17)

 

(12)

Operating income

54

 

91

 

59

 

145

 

90

Interest income and other

 

 

(2)

 

 

(2)

Net contribution to earnings

$     54

 

$     91

 

$     57

 

$     145

 

$        88

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

in millions

 

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Operating income

$     54

 

$     91

 

$     59

 

$     145

 

$        90

Depreciation, depletion and amortization

38

 

39

 

39

 

77

 

78

Adjusted EBITDA*

$     92

 

$   130

 

$     98

 

$     222

 

$     168

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Segment Items

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Total decrease (increase) in working capital(1)

$      31

 

$    (37)

 

$      12

 

$         (6)

 

$           5

Cash spent for capital expenditures

$    (26)

 

$    (35)

 

$    (17)

 

$       (61)

 

$       (34)

(1)Working capital does not include cash balances.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Pulp
(air-dry metric tons)

Third party net sales (millions)

$    363

 

$    383

 

$    369

 

$       746

 

$       740

Third party sales realizations

$    825

 

$    845

 

$    797

 

$       835

 

$       797

Third party sales volumes (thousands)

440

 

454

 

462

 

894

 

929

Production volumes (thousands)

459

 

467

 

463

 

926

 

908

Liquid
Packaging
Board
(tons)

Third party net sales (millions)

$      80

 

$      87

 

$      86

 

$       167

 

$       171

Third party sales realizations

$ 1,122

 

$ 1,165

 

$ 1,079

 

$    1,144

 

$    1,079

Third party sales volumes (thousands)

71

 

75

 

81

 

146

 

159

Production volumes (thousands)

78

 

79

 

77

 

157

 

155

 

Weyerhaeuser Company

 

 

 

 

Unallocated Items

Q2.2014 Analyst Package

 

 

 

 

 

 

 

Preliminary results, subject to audit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 outstanding borrowings and the elimination of intersegment profit in inventory and the LIFO reserve.

 

 

 

 

 

 

 

 

 

 

Contribution to Earnings

 

 

 

 

 

 

 

 

 

 

in millions

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Unallocated corporate function expenses

$     (2)

 

$     (1)

 

$     (3)

 

$         (3)

 

$         (6)

Unallocated share-based compensation

3

 

(6)

 

5

 

(3)

 

(2)

Unallocated pension & postretirement credits (costs)

55

 

56

 

(10)

 

111

 

(20)

Foreign exchange gains (losses)

(15)

 

13

 

(4)

 

(2)

 

(8)

Elimination of intersegment profit in inventory and LIFO

(19)

 

(1)

 

8

 

(20)

 

(16)

Other

4

 

(24)

 

(12)

 

(20)

 

(23)

Operating income (loss)

26

 

37

 

(16)

 

63

 

(75)

Interest income and other

9

 

11

 

10

 

20

 

19

Net contribution to earnings from continuing operations(1)

$    35

 

$    48

 

$    (6)

 

$        83

 

$      (56)

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

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

in millions

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Operating income (loss)

$    26

 

$    37

 

$  (16)

 

$        63

 

$      (75)

Depreciation, depletion and amortization

4

 

2

 

4

 

6

 

7

Non-operating pension and postretirement costs (credits)

(10)

 

(11)

 

10

 

(21)

 

20

Special items

(49)

 

(39)

 

 

(88)

 

Adjusted EBITDA*

$  (29)

 

$  (11)

 

$    (2)

 

$      (40)

 

$      (48)

* Non-GAAP measure - see below for definition.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Gain on postretirement plan amendment

$     45

 

$     45

 

$    —

 

$         90

 

$        —

Restructuring, impairments and other charges

(18)

 

(6)

 

 

(24)

 

Gain on sale of non-strategic asset

22

 

 

 

22

 

Total

$    49

 

$    39

 

$    —

 

$        88

 

$        —

 

 

 

 

 

 

 

 

 

 

Unallocated Selected Items

 

 

 

 

 

 

 

 

 

 

 

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Total increase in working capital(1)

$   (35)

 

$     72

 

$     95

 

$         37

 

$       (28)

Cash spent for capital expenditures

$     —

 

$     (1)

 

$     (2)

 

$         (1)

 

$         (3)

(1)Working capital does not include cash balances.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income from continuing operations adjusted for depreciation, depletion, amortization, pension and postretirement costs not allocated to business segments (primarily interest cost, expected return on plan assets, amortization of actuarial loss and amortization of prior service cost/credit), special items and discontinued operations. Adjusted EBITDA should not be considered in isolation from and is not intended to represent an alternative to our GAAP results.

 

Weyerhaeuser Company

 

 

 

 

Discontinued Operations

Q2.2014 Analyst Package

 

 

 

 

 

Preliminary results, subject to audit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations relate to WRECO, which was combined with TRI Pointe Homes, Inc. through a Reverse Morris Trust transaction on July 7, 2014. It was previously reported under the Real Estate segment and Unallocated Items.

 

 

 

 

 

 

 

 

 

 

Discontinued Operations Statement of Operations

 

 

 

 

 

 

 

 

 

 

in millions

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Total net sales

$    248

 

$    317

 

$    267

 

$     565

 

$      463

Income from operations

$      16

 

$      27

 

$      19

 

$       43

 

$        23

Income taxes

(6)

 

(5)

 

(6)

 

(11)

 

(8)

Net earnings from discontinued operations

$      10

 

$      22

 

$      13

 

$        32

 

$        15

 

 

 

 

 

 

 

 

 

 

Discontinued Operations Selected Items

 

 

 

 

 

 

 

 

 

 

 

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Cash from operations

$     (28)

 

$     133

 

$     (56)

 

$       105

 

$     (127)

Cash spent for capital expenditures

$       (2)

 

$       (2)

 

$       (2)

 

$         (4)

 

$         (4)

 

 

 

 

 

 

 

 

 

 

Discontinued Operations Statistics

 

 

 

 

 

 

 

 

 

 

 

Q1.2014

 

Q2.2014

 

Q2.2013

 

YTD.2014

 

YTD.2013

Net sales:

 

 

 

 

 

 

 

 

 

Single-family housing

$     242

 

$     310

 

$     257

 

$       552

 

$       440

Land

3

 

7

 

10

 

10

 

21

Other

3

 

 

 

3

 

2

Total net sales

$     248

 

$     317

 

$     267

 

$       565

 

$       463

Single-family homes closed

508

 

628

 

636

 

1,136

 

1,099

Single-family average price of homes closed (in thousands)

$     476

 

$    493

 

$    405

 

$      485

 

$      400

Single-family gross margin(1)

20.9 %

 

21.6 %

 

21.6 %

 

21.3 %

 

20.7 %

(1)Single-family gross margin equals revenue less cost of sales and period costs.

 

 

 

 

 

For more information contact:

Analysts - Beth Baum or Denise Merle (253) 924-2058

 

Media - Anthony Chavez (253) 924-7148

Logo - http://photos.prnewswire.com/prnh/20120111/AQ34535LOGO

SOURCE Weyerhaeuser Company

 

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