Weyerhaeuser Reports Third Quarter Results

- Achieved net earnings of $283 million, or $0.38 per diluted share

SEATTLE, Oct. 30, 2020 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported third quarter net earnings of $283 million, or 38 cents per diluted share, on net sales of $2.1 billion. This compares with net earnings of $99 million, or 13 cents per diluted share, on net sales of $1.7 billion for the same period last year.

Weyerhaeuser Company logo. (PRNewsFoto/Weyerhaeuser Company)

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Third quarter results include after-tax charges of $103 million for special items, primarily a non-cash timber casualty loss associated with Oregon fire damage. Excluding special items, the company reported third quarter net earnings of $386 million, or 52 cents per diluted share. This compares with net earnings before special items of $59 million for the same period last year and $77 million for the second quarter of 2020.

Adjusted EBITDA for the third quarter of 2020 was $745 million compared with $308 million for the same period last year and $386 million for the second quarter of 2020.

"In the third quarter, each of our businesses delivered outstanding operational and financial results despite disruptions from severe weather, unprecedented forest fires and the ongoing COVID-19 pandemic," said Devin W. Stockfish, president and chief executive officer. "We achieved record Wood Products Adjusted EBITDA, surpassing the previous high by nearly 60 percent. In addition, we redeemed $325 million of debt maturities and announced transactions to strategically upgrade our Oregon timberland holdings."

"Entering the fourth quarter, Weyerhaeuser is operating from a strong financial position, and we are increasingly confident that the recent strength in U.S. housing will continue notwithstanding ongoing macroeconomic headwinds," Stockfish continued. "Today, we are reinitiating a quarterly dividend and implementing a new dividend framework that will enhance our ability to return meaningful and appropriate amounts of cash to our shareholders across a variety of market conditions. This framework positions Weyerhaeuser to deliver superior long-term value creation through our unmatched portfolio, industry-leading performance and disciplined, prudent capital allocation."

 

WEYERHAEUSER FINANCIAL HIGHLIGHTS


2020


2020


2019

(millions, except per share data)


Q2


Q3


Q3

Net sales


$1,631


$2,110


$1,671

Net earnings


$72


$283


$99

Net earnings per diluted share


$0.10


$0.38


$0.13

Weighted average shares outstanding, diluted


747


748


747

Net earnings before special items(1)(2)


$77


$386


$59

Net earnings per diluted share before special items(1)


$0.11


$0.52


$0.08

Adjusted EBITDA(1)


$386


$745


$308



(1)

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

(2)

Third quarter 2020 after-tax special items include a $23 million charge related to the early extinguishment of debt and an $80 million non-cash timber casualty loss. Special items for other periods presented are included in the reconciliation tables following this release.

TIMBERLANDS

FINANCIAL HIGHLIGHTS


2020


2020



(millions)


Q2


Q3


Change

Net sales


$480


$452


($28)

Net contribution (charge) to pretax earnings


$75


($11)


($86)

Pretax charge for special items


$—


$80


$80

Net contribution to pretax earnings before special items


$75


$69


($6)

Adjusted EBITDA


$140


$130


($10)

Q3 2020 Performance – In the West, fee harvest volumes decreased 15 percent compared with the second quarter as wildfire conditions restricted harvest activity. This was largely offset by higher average sales realizations for domestic logs. Domestic log sales volumes decreased modestly compared with the second quarter, and export log sales volumes were significantly lower as the company shifted volume to the domestic market to take advantage of higher margin opportunities. In the South, fee harvest volumes decreased 5 percent as the company continued to implement the previously announced reduction in its 2020 fee harvest volumes. Average log sales realizations were comparable to the second quarter and forestry spending increased seasonally.

Third quarter special items consist of an $80 million timber casualty loss related to the Oregon wildfires. This non-cash charge represents the estimated book value of timber and related assets that will not be able to be salvaged based on currently available information.

Q4 2020 Outlook – Weyerhaeuser expects fourth quarter earnings and Adjusted EBITDA will be higher than the third quarter. In the West, the company anticipates higher average sales realizations for domestic and Japanese export logs and improved log sales volumes as Oregon harvest activity resumes and salvage operations begin. In the South, the company expects slightly higher forestry expense and slightly lower average log sales realizations due to mix.

In September 2020, the company announced an agreement to sell 149,000 acres of southern Oregon timberlands and a separate agreement to purchase 85,000 acres of mid-coastal Oregon timberlands. The two agreements are subject to customary closing conditions and are both expected to close in fourth quarter 2020.

REAL ESTATE, ENERGY & NATURAL RESOURCES

FINANCIAL HIGHLIGHTS


2020


2020



(millions)


Q2


Q3


Change

Net sales


$65


$69


$4

Net contribution to pretax earnings


$19


$17


($2)

Adjusted EBITDA


$57


$60


$3

Q3 2020 Performance – Real estate sales improved slightly compared with the second quarter as an increase in the number of acres sold was largely offset by a lower average price per acre due to mix. Adjusted EBITDA increased, but earnings decreased slightly due to a higher average land basis on the mix of properties sold. Energy & Natural Resources royalties increased due to seasonally higher production of construction materials.

Q4 2020 Outlook – Weyerhaeuser anticipates fourth quarter earnings and Adjusted EBITDA will be lower than the third quarter due to the timing of real estate transactions and average land basis will decrease due to the mix of properties sold. The company continues to expect full year 2020 Adjusted EBITDA for the segment will be approximately $235 million.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS


2020


2020



(millions)


Q2


Q3


Change

Net sales


$1,207


$1,696


$489

Net contribution to pretax earnings


$159


$566


$407

Pretax benefit for special items


($8)


$—


$8

Net contribution to pretax earnings before special items


$151


$566


$415

Adjusted EBITDA


$198


$615


$417

Q3 2020 Performance – Benchmark prices for lumber and oriented strand board reached record levels in the third quarter, and average sales realizations for lumber and oriented strand board improved 54 percent and 65 percent, respectively, compared with second quarter averages. Sales volumes for engineered wood products also increased significantly. These improvements were partially offset by higher raw material costs.

Q4 2020 Outlook – Excluding the effect of changes in average sales realizations, the company expects fourth quarter earnings and Adjusted EBITDA will be significantly lower than the third quarter, though both are expected to exceed previous record levels attained in 2018. The company expects a modest seasonal reduction in sales volumes, higher Western and Canadian log costs, and lower operating rates for some product lines due to planned maintenance outages.

UNALLOCATED

FINANCIAL HIGHLIGHTS


2020


2020



(millions)


Q2


Q3


Change

Net charge to pretax earnings


($18)


($69)


($51)

Adjusted EBITDA


($9)


($60)


($51)

Q3 2020 Performance – Third quarter results include a charge from elimination of intersegment profit in inventory and LIFO compared with a benefit in the second quarter. Unallocated corporate function and variable compensation expense also increased, primarily due to a year-to-date adjustment for performance-based incentive compensation.

REINITIATING COMMON DIVIDEND

On May 1, 2020, Weyerhaeuser's board of directors temporarily suspended the company's quarterly cash dividend to preserve financial flexibility in light of significant uncertainty regarding the duration and magnitude of the effects of the COVID-19 pandemic on the company's business conditions.

Since May, the board has continued to regularly review opportunities to reinitiate a quarterly cash dividend, taking into account the company's cash flow, liquidity, customer demand, market conditions, the broader macroeconomic environment and other factors, with the desire for a sustainable dividend framework that will drive long-term shareholder value across market cycles.

Over the past several months, demand for housing and wood products has proven resilient, and the company is increasingly confident that U.S. housing activity will remain strong even as the pandemic and macroeconomic headwinds continue. Weyerhaeuser has also meaningfully strengthened its financial position, having reduced gross debt by over $400 million on a year-to-date basis, announced the fourth quarter 2020 redemption of $500 million of additional maturities, and attained its target leverage ratio. The company maintains ample liquidity, including $787 million in cash and cash equivalents and $1.5 billion of undrawn revolver capacity as of September 30, 2020.

Based upon its most recent review of these and other factors, Weyerhaeuser's board of directors is reinitiating a quarterly cash dividend. The board is also implementing a new dividend framework to enhance Weyerhaeuser's ability to return meaningful and appropriate amounts of cash to shareholders across a variety of market conditions.

This new dividend framework includes two components:

  • Sustainable quarterly base cash dividend: This core mechanism for returning cash to shareholders is supported by cash flows from the company's Timberlands and Real Estate, Energy and Natural Resources segments and is positioned to grow sustainably over time. For the fourth quarter 2020, the board of directors has declared a quarterly base cash dividend of $0.17 per share.
  • Variable supplemental dividend: The company expects to supplement its quarterly base dividend with an additional return of cash, as appropriate, to achieve a targeted total annual return to shareholders of 75 to 80 percent of annual Adjusted Funds Available for Distribution(1). Weyerhaeuser expects this will occur primarily through a supplemental cash dividend. In certain circumstances, the company may also utilize opportunistic share repurchase. In general, the company expects a supplemental dividend will be declared and paid annually, with the first payment occurring in first quarter 2022.

Stockfish concluded, "This new dividend framework supports our commitment to returning a significant portion of free cash flow to shareholders, while ensuring that our return of cash is sustainable and appropriate across market cycles. Going forward, Weyerhaeuser remains focused on disciplined, prudent capital allocation to sustainably grow our base dividend and drive superior long-term value for shareholders."

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control approximately 11 million acres of timberlands in the U.S. and manage additional timberlands under long-term licenses in Canada. We manage these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. We are also one of the largest manufacturers of wood products in North America. Our company is a real estate investment trust. In 2019, we generated $6.6 billion in net sales and employed approximately 9,400 people who serve customers worldwide. We are listed on the Dow Jones Sustainability North America Index. Our common stock trades on the New York Stock Exchange under the symbol WY. Learn more at www.weyerhaeuser.com.

EARNINGS CALL INFORMATION

Weyerhaeuser will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on October 30, 2020 to discuss third quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on October 30, 2020.

To join the conference call from within North America, dial 877-407-0792 (access code: 13710359) at least 15 minutes prior to the call. Those calling from outside North America should dial 201-689-8263 (access code: 13710359). Replays will be available for two weeks at 844-512-2921 (access code: 13710359) from within North America, and at 412-317-6671 (access code: 13710359) from outside North America.

FORWARD-LOOKING STATEMENTS

This news release contains statements concerning the company's future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, including, but not limited to, with respect to future quarterly and supplemental cash dividends and dividend framework, future share repurchases, the closing of previously announced Oregon timberland transactions and our outlook and expectations concerning the following: the future strength of U.S. housing activity; the company's liquidity position; earnings and Adjusted EBITDA for each of our businesses; log sales realizations and sales volumes; forestry expense; log costs and operating rates for our wood products business and sales volumes across our wood products lines. Forward-looking statements are generally identified by words such as "believe," "expect," "anticipate," "estimate," "future," "planned," "may," "will," "maintain," and similar words and expressions. Forward-looking statements are based on our current expectations and assumptions. The realization of our expectations and the accuracy of our assumptions are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to:

  • the effect of general economic conditions, including employment rates, interest rate levels, housing starts, general availability of financing for home mortgages and the relative strength of the U.S. dollar;
  • the effect of COVID-19 and other viral or disease outbreaks and their potential effects on our business, results of operations, cash flows, financial condition and future prospects;
  • market demand for the company's products, including market demand for our timberland properties with higher and better uses, which is related to, among other factors, the strength of the various U.S. business segments and U.S. and international economic conditions;
  • changes in currency exchange rates, particularly the relative value of the U.S. dollar to the Japanese yen, the Chinese yuan, and the Canadian dollar, and the relative value of the euro to the yen;
  • restrictions on international trade and tariffs imposed on imports or exports;
  • the availability and cost of shipping and transportation;
  • economic activity in Asia, especially Japan and China;
  • performance of our manufacturing operations, including maintenance and capital requirements;
  • potential disruptions in our manufacturing operations;
  • the level of competition from domestic and foreign producers;
  • our operational excellence initiatives;
  • the successful and timely execution and integration of our strategic acquisitions, including our ability to realize expected benefits and synergies, and the successful and timely execution of our strategic divestitures, each of which is subject to a number of risks and conditions beyond our control including, but not limited to, timing, required regulatory approvals or the occurrence of any event, change or other circumstances that could give rise to a termination of any acquisition or divestiture transaction under the terms of the governing transaction agreements;
  • raw material availability and prices;
  • the effect of weather;
  • changes in global or regional climate conditions and governmental response to such changes;
  • the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;
  • energy prices;
  • transportation and labor availability and costs;
  • federal tax policies;
  • the effect of forestry, land use, environmental and other governmental regulations;
  • legal proceedings;
  • performance of pension fund investments and related derivatives;
  • the effect of timing of employee retirements and changes in the market price of our common stock on charges for share-based compensation;
  • the accuracy of our estimates of costs and expenses related to contingent liabilities and charges related to casualty losses;
  • changes in accounting principles; and
  • other risks and uncertainties identified in our 2019 Annual Report on Form 10-K, as well as those set forth from time to time in our other public statements, reports, registration statements, prospectuses, information statements and other filings with the SEC.

It is not possible to predict or identify all risks and uncertainties that might affect the accuracy of our forward-looking statements and, consequently, our descriptions of such risks and uncertainties should not be considered exhaustive. There is no guarantee that any of the events anticipated by these forward-looking statements will occur, and if any of the events do occur, there is no guarantee what effect they will have on the company's business, results of operations, cash flows, financial condition and future prospects.

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

RECONCILIATION OF ADJUSTED EBITDA TO NET EARNINGS

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

The table below reconciles Adjusted EBITDA for the quarter ended June 30, 2020:

(millions)


Timberlands



Real Estate

& ENR



Wood

Products



Unallocated

Items



Total


Adjusted EBITDA by Segment:





















Net earnings


















$

72


Interest expense, net of capitalized interest(1)



















103


Income taxes



















60


Net contribution (charge) to earnings


$

75



$

19



$

159



$

(18)



$

235


Non-operating pension and other postretirement benefit costs












10




10


Interest income and other












(2)




(2)


Operating income (loss)



75




19




159




(10)




243


Depreciation, depletion and amortization



65




4




47




1




117


Basis of real estate sold






34










34


Special items included in operating income (loss)(2)









(8)







(8)


Adjusted EBITDA


$

140



$

57



$

198



$

(9)



$

386




(1)

Interest expense, net of capitalized interest includes a pretax special item consisting of an $11 million net charge related to the early extinguishment of $569 million of 4.7 percent notes due March 2021.

(2)

Operating income (loss) includes a pretax special item consisting of an $8 million product remediation insurance recovery.

The table below reconciles Adjusted EBITDA for the quarter ended September 30, 2020:

(millions)


Timberlands



Real Estate

& ENR



Wood

Products



Unallocated

Items



Total


Adjusted EBITDA by Segment:





















Net earnings


















$

283


Interest expense, net of capitalized interest(1)



















111


Income taxes



















109


Net contribution (charge) to earnings


$

(11)



$

17



$

566



$

(69)



$

503


Non-operating pension and other postretirement benefit costs












9




9


Interest income and other












(2)




(2)


Operating income (loss)



(11)




17




566




(62)




510


Depreciation, depletion and amortization



61




3




49




2




115


Basis of real estate sold






40










40


Special items included in operating income (loss)(2)



80













80


Adjusted EBITDA


$

130



$

60



$

615



$

(60)



$

745




(1)

Interest expense, net of capitalized interest includes a pretax special item consisting of a $23 million charge related to the early extinguishment of $325 million of 3.25 percent notes due March 2023.

(2)

Operating income (loss) includes a pretax special item consisting of an $80 million timber casualty loss.

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

(millions)


Timberlands



Real Estate

& ENR



Wood

Products



Unallocated

Items



Total


Adjusted EBITDA by Segment:





















Net earnings


















$

99


Interest expense, net of capitalized interest



















91


Income taxes



















3


Net contribution (charge) to earnings


$

72



$

32



$

143



$

(54)



$

193


Non-operating pension and other postretirement benefit costs












15




15


Interest income and other












(6)




(6)


Operating income (loss)



72




32




143




(45)




202


Depreciation, depletion and amortization



82




4




48




1




135


Basis of real estate sold






24










24


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









(68)




15




(53)


Adjusted EBITDA


$

154



$

60



$

123



$

(29)



$

308




(1)

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

RECONCILIATION OF NET EARNINGS BEFORE SPECIAL ITEMS TO NET EARNINGS

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

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



2020


2020


2019

(millions)


Q2


Q3


Q3

Net earnings


$72


$283


$99

Early extinguishment of debt charges


11


23


Legal charge




11

Product remediation recoveries


(6)



(51)

Timber casualty loss



80


Net earnings before special items


$77


$386


$59

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



2020


2020


2019



Q2


Q3


Q3

Net earnings per diluted share


$0.10


$0.38


$0.13

Early extinguishment of debt charges


0.02


0.03


Legal charge




0.02

Product remediation recoveries


(0.01)



(0.07)

Timber casualty loss



0.11


Net earnings per diluted share before special items


$0.11


$0.52


$0.08

 

 

Exhibit 99.2

Weyerhaeuser Company

Q3.2020 Analyst Package 

Preliminary results (unaudited)      


Consolidated Statement of Operations




Q1



Q2



Q3



Year-to-Date


in millions


March 31,

2020



June 30,

2020



Sept 30,

2020



Sept 30,

2019



Sept 30,

2020



Sept 30,

2019


Net sales


$

1,728



$

1,631



$

2,110



$

1,671



$

5,469



$

5,006


Costs of sales



1,382




1,283




1,390




1,399




4,055




4,111


Gross margin



346




348




720




272




1,414




895


Selling expenses



22




18




22




20




62




62


General and administrative expenses



74




84




96




85




254




254


Product remediation recoveries






(8)







(68)




(8)




(68)


Other operating costs, net



10




11




92




33




113




85


Operating income



240




243




510




202




993




562


Non-operating pension and other postretirement benefit costs



(9)




(10)




(9)




(15)




(28)




(495)


Interest income and other



1




2




2




6




5




22


Interest expense, net of capitalized interest



(85)




(103)




(111)




(91)




(299)




(289)


Earnings (loss) before income taxes



147




132




392




102




671




(200)


Income taxes



3




(60)




(109)




(3)




(166)




138


Net earnings (loss)


$

150



$

72



$

283



$

99



$

505



$

(62)


 

 

Per Share Information




Q1



Q2



Q3



Year-to-Date




March 31,

2020



June 30,

2020



Sept 30,

2020



Sept 30,

2019



Sept 30,

2020



Sept 30,

2019


Earnings (loss) per share, basic and diluted


$

0.20



$

0.10



$

0.38



$

0.13



$

0.68



$

(0.08)


Dividends paid per common share


$

0.34



$



$



$

0.34



$

0.34



$

1.02


Weighted average shares outstanding (in thousands):

























Basic



746,534




746,896




746,996




745,626




746,809




745,901


Diluted



747,155




746,984




748,450




746,514




747,530




745,901


Common shares outstanding at end of period (in thousands)



746,206




746,251




746,398




745,071




746,398




745,071


 

 


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




Q1



Q2



Q3



Year-to-Date


in millions


March 31,

2020



June 30,

2020



Sept 30,

2020



Sept 30,

2019



Sept 30,

2020



Sept 30,

2019


Net earnings (loss)


$

150



$

72



$

283



$

99



$

505



$

(62)


Non-operating pension and other postretirement benefit costs



9




10




9




15




28




495


Interest income and other



(1)




(2)




(2)




(6)




(5)




(22)


Interest expense, net of capitalized interest



85




103




111




91




299




289


Income taxes



(3)




60




109




3




166




(138)


Operating income



240




243




510




202




993




562


Depreciation, depletion and amortization



123




117




115




135




355




382


Basis of real estate sold



62




34




40




24




136




105


Special items included in operating income



(12)




(8)




80




(53)




60




(33)


Adjusted EBITDA(1)


$

413



$

386



$

745



$

308



$

1,544



$

1,016




(1)  

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

 

 

Total Company Statistics

Weyerhaeuser Company

Q3.2020 Analyst Package

Preliminary results (unaudited)


Special Items Included in Net Earnings (Income Tax Affected)




Q1



Q2



Q3



Year-to-Date


in millions


March 31,

2020



June 30,

2020



Sept 30,

2020



Sept 30,

2019



Sept 30,

2020



Sept 30,

2019


Net earnings (loss)


$

150



$

72



$

283



$

99



$

505



$

(62)


Early extinguishment of debt charges(1)






11




23







34




9


Legal charges (benefits)



(12)










11




(12)




26


Pension settlement charges


















340


Product remediation recoveries






(6)







(51)




(6)




(51)


Timber casualty loss









80







80





Net earnings before special items(2)


$

138



$

77



$

386



$

59



$

601



$

262


 



Q1



Q2



Q3



Year-to-Date




March 31,

2020



June 30,

2020



Sept 30,

2020



Sept 30,

2019



Sept 30,

2020



Sept 30,

2019


Net earnings (loss) per diluted share


$

0.20



$

0.10



$

0.38



$

0.13



$

0.68



$

(0.08)


Early extinguishment of debt charges(1)






0.02




0.03







0.05




0.01


Legal charges (benefits)



(0.02)










0.02




(0.02)




0.04


Pension settlement charges


















0.46


Product remediation recoveries






(0.01)







(0.07)




(0.01)




(0.07)


Timber casualty loss









0.11







0.11





Net earnings per diluted share before special items(2)


$

0.18



$

0.11



$

0.52



$

0.08



$

0.81



$

0.36




(1)  

We recorded pretax charges of $12 million ($9 million after-tax), $11 million ($11 million after-tax) and $23 million ($23 million after-tax) related to the early extinguishment of debt in first quarter 2019, second quarter 2020 and third quarter 2020, respectively. These charges were included in Interest expense, net of capitalized interest in the Consolidated Statement of Operations.

(2)  

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

 

Selected Total Company Items




Q1



Q2



Q3



Year-to-Date


in millions


March 31,

2020



June 30,

2020



Sept 30,

2020



Sept 30,

2019



Sept 30,

2020



Sept 30,

2019


Pension and postretirement costs:

























Pension and postretirement service costs


$

10



$

8



$

9



$

8



$

27



$

24


Non-operating pension and other postretirement benefit costs



9




10




9




15




28




495


Total company pension and postretirement costs


$

19



$

18



$

18



$

23



$

55



$

519



 

 

Weyerhaeuser Company

Q3.2020 Analyst Package

Preliminary results (unaudited)


Consolidated Balance Sheet


in millions


March 31,

2020



June 30,

2020



September 30,

2020



December 31,

2019


ASSETS

















Current assets:

















Cash and cash equivalents


$

1,458



$

643



$

787



$

139


Receivables, net



390




420




500




309


Receivables for taxes



24




48




48




98


Inventories



480




409




411




416


Assets held for sale









199




140


Prepaid expenses and other current assets



141




131




101




147


Current restricted financial investments held by variable interest entities












362


Total current assets



2,493




1,651




2,046




1,611


Property and equipment, net



1,911




1,958




1,945




1,969


Construction in progress



153




110




119




130


Timber and timberlands at cost, less depletion



11,847




11,780




11,465




11,929


Minerals and mineral rights, less depletion



278




275




271




281


Deferred tax assets



147




65




44




72


Other assets



399




415




466




414


Total assets


$

17,228



$

16,254



$

16,356



$

16,406



















LIABILITIES AND EQUITY

















Current liabilities:

















Current maturities of long-term debt


$

577



$



$



$


Borrowings on line of credit



550










230


Accounts payable



241




199




215




246


Accrued liabilities



448




525




617




530


Total current liabilities



1,816




724




832




1,006


Long-term debt, net



6,299




6,299




5,974




6,147


Deferred tax liabilities



10




18




27




6


Deferred pension and other postretirement benefits



669




652




638




693


Other liabilities



352




359




358




377


Total liabilities



9,146




8,052




7,829




8,229


Total equity



8,082




8,202




8,527




8,177


Total liabilities and equity


$

17,228



$

16,254



$

16,356



$

16,406


 

 

Weyerhaeuser Company

Q3.2020 Analyst Package

Preliminary results (unaudited)


Consolidated Statement of Cash Flows




Q1



Q2



Q3



Year-to-Date


in millions


March 31,

2020



June 30,

2020



Sept 30,

2020



Sept 30,

2019



Sept 30,

2020



Sept 30,

2019


Cash flows from operations:

























Net earnings (loss)


$

150



$

72



$

283



$

99



$

505



$

(62)


Noncash charges (credits) to earnings (loss):

























Depreciation, depletion and amortization



123




117




115




135




355




382


Basis of real estate sold



62




34




40




24




136




105


Deferred income taxes, net



(82)




80




22




2




20




(164)


Pension and other postretirement benefits



19




18




18




23




55




519


Share-based compensation expense



7




8




7




7




22




23


Timber casualty loss









80







80





Change in:

























Receivables, less allowances



(82)




(30)




(80)




40




(192)




(47)


Receivables and payables for taxes



79




(18)




42




7




103




(18)


Inventories



(72)




74







30




2




(2)


Prepaid expenses and other current assets



(2)




7







2




5




5


Accounts payable and accrued liabilities



(91)




30




64




(58)




3




(13)


Pension and postretirement benefit contributions and payments



(10)




(6)




(5)




(9)




(21)




(36)


Other



(15)




5




22




(10)




12




(18)


Net cash from operations


$

86



$

391



$

608



$

292



$

1,085



$

674


Cash flows from investing activities:

























Capital expenditures for property and equipment


$

(47)



$

(55)



$

(56)



$

(87)



$

(158)



$

(199)


Capital expenditures for timberlands reforestation



(21)




(11)




(9)




(11)




(41)




(42)


Proceeds from note receivable held by variable interest entities



362













362




253


Proceeds from sale of Montana timberlands



145













145





Other



2




1







1




3




20


Net cash from investing activities


$

441



$

(65)



$

(65)



$

(97)



$

311



$

32


Cash flows from financing activities:

























Cash dividends on common shares


$

(254)



$



$



$

(253)



$

(254)



$

(760)


Net proceeds from issuance of long-term debt



732













732




739


Payments on long-term debt






(588)




(348)







(936)




(512)


Proceeds from borrowings on line of credit



550










490




550




875


Payments on line of credit



(230)




(550)







(190)




(780)




(860)


Payments on debt held by variable interest entities












(302)







(302)


Proceeds from exercise of stock options



6







3




4




9




8


Repurchases of common shares


















(60)


Other



(12)




(3)




(1)




(3)




(16)




(15)


Net cash from financing activities


$

792



$

(1,141)



$

(346)



$

(254)



$

(695)



$

(887)



























Net change in cash, cash equivalents and restricted cash


$

1,319



$

(815)



$

197



$

(59)



$

701



$

(181)


Cash, cash equivalents and restricted cash at beginning of period



139




1,458




643




212




139




334


Cash, cash equivalents and restricted cash at end of period


$

1,458



$

643



$

840



$

153



$

840



$

153



























Cash paid (received) during the period for:

























Interest, net of amounts capitalized


$

108



$

70



$

100



$

123



$

278



$

310


Income taxes, net of refunds


$



$

1



$

45



$

(5)



$

46



$

46


 

 

Timberlands Segment

Weyerhaeuser Company

Q3.2020 Analyst Package

Preliminary results (unaudited)


Segment Statement of Operations


in millions


Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Sales to unaffiliated customers


$

381



$

359



$

345



$

398



$

1,085



$

1,230


Intersegment sales



122




121




107




125




350




381


Total net sales



503




480




452




523




1,435




1,611


Costs of sales



375




383




358




429




1,116




1,247


Gross margin



128




97




94




94




319




364


Selling expenses






1










1




1


General and administrative expenses



24




22




24




24




70




71


Other operating costs (income), net



(1)




(1)




81




(2)




79




(2)


Operating income (loss) and Net contribution (charge) to earnings


$

105



$

75



$

(11)



$

72



$

169



$

294


 

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


in millions


Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Operating income (loss)


$

105



$

75



$

(11)



$

72



$

169



$

294


Depreciation, depletion and amortization



68




65




61




82




194




228


Special items









80







80





Adjusted EBITDA(1)


$

173



$

140



$

130



$

154



$

443



$

522



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

 

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


in millions


Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Timber casualty loss


$



$



$

(80)



$



$

(80)



$



























 

Selected Segment Items


in millions


Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Total decrease (increase) in working capital(2)


$

(3)



$

(2)



$

43



$

2



$

38



$

24


Cash spent for capital expenditures


$

(30)



$

(21)



$

(24)



$

(28)



$

(75)



$

(79)



(2) 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(3)






Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Third Party


Delivered logs:

























Net Sales


West


$

177



$

179



$

163



$

172



$

519



$

571


(millions)


South



150




145




141




168




436




483




North



17




7




13




24




37




70




Total delivered logs



344




331




317




364




992




1,124




Stumpage and pay-as-cut timber



5




5




5




10




15




29




Recreational and other lease revenue



15




16




16




15




47




45




Other revenue



17




7




7




9




31




32




Total


$

381



$

359



$

345



$

398



$

1,085



$

1,230


Delivered Logs


West


$

104.91



$

104.90



$

109.01



$

99.07



$

106.16



$

103.50


Third Party Sales


South


$

34.27



$

33.68



$

33.68



$

35.03



$

33.88



$

35.27


Realizations (per ton)


North


$

60.51



$

59.82



$

57.19



$

57.35



$

59.15



$

59.37


Delivered Logs


West



1,684




1,714




1,489




1,729




4,887




5,513


Third Party Sales


South



4,365




4,307




4,185




4,795




12,857




13,694


Volumes (tons, thousands)


North



284




113




234




429




631




1,186


Fee Harvest Volumes


West



2,310




2,236




1,911




2,183




6,457




7,023


(tons, thousands)


South



6,130




5,914




5,596




6,802




17,640




19,661




North



386




194




321




560




901




1,565



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

 

 

Real Estate, Energy & Natural Resources Segment

Weyerhaeuser Company

Q3.2020 Analyst Package

Preliminary results (unaudited)


Segment Statement of Operations


in millions


Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Net sales


$

112



$

65



$

69



$

69



$

246



$

268


Costs of sales



70




40




46




32




156




127


Gross margin



42




25




23




37




90




141


General and administrative expenses



6




6




6




6




18




20


Other operating income, net












(1)







(1)


Operating income and Net contribution to earnings


$

36



$

19



$

17



$

32



$

72



$

122


 

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


in millions


Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Operating income


$

36



$

19



$

17



$

32



$

72



$

122


Depreciation, depletion and amortization



3




4




3




4




10




10


Basis of real estate sold



62




34




40




24




136




105


Adjusted EBITDA(1)


$

101



$

57



$

60



$

60



$

218



$

237



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

 

Selected Segment Items


in millions


Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Cash spent for capital expenditures


$



$



$



$



$



$



























 

Segment Statistics





Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Net Sales

Real Estate


$

95



$

48



$

49



$

45



$

192



$

200


(millions)

Energy and Natural Resources



17




17




20




24




54




68



Total


$

112



$

65



$

69



$

69



$

246



$

268


Acres Sold

Real Estate



44,974




31,337




34,917




18,057




111,228




103,922


Price per Acre

Real Estate


$

1,992



$

1,501



$

1,381



$

2,415



$

1,662



$

1,806


Basis as a Percent of

Real Estate Net Sales

Real Estate



65

%



71

%



82

%



53

%



71

%



53

%

 

 

Wood Products Segment


Weyerhaeuser Company

Q3.2020 Analyst Package

Preliminary results (unaudited)

Segment Statement of Operations


in millions


Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Net sales


$

1,235



$

1,207



$

1,696



$

1,204



$

4,138



$

3,508


Costs of sales



1,040




997




1,075




1,067




3,112




3,104


Gross margin



195




210




621




137




1,026




404


Selling expenses



21




18




18




20




57




59


General and administrative expenses



36




33




33




35




102




104


Product remediation recoveries






(8)







(68)




(8)




(68)


Other operating costs, net



4




8




4




7




16




16


Operating income and Net contribution to earnings


$

134



$

159



$

566



$

143



$

859



$

293


 

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


in millions


Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Operating income


$

134



$

159



$

566



$

143



$

859



$

293


Depreciation, depletion and amortization



50




47




49




48




146




141


Special items






(8)







(68)




(8)




(68)


Adjusted EBITDA(1)


$

184



$

198



$

615



$

123



$

997



$

366



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

 

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


in millions


Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Product remediation recoveries


$



$

8



$



$

68



$

8



$

68



























 

Selected Segment Items


in millions


Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Total decrease (increase) in working capital(2)


$

(186)



$

56



$

(68)



$

32



$

(198)



$

(48)


Cash spent for capital expenditures


$

(38)



$

(45)



$

(41)



$

(65)



$

(124)



$

(148)



(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


Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Structural Lumber

Third party net sales


$

508



$

538



$

819



$

487



$

1,865



$

1,426


(volumes presented

Third party sales realizations


$

416



$

438



$

674



$

389



$

509



$

390


in board feet)

Third party sales volumes(3)



1,222




1,225




1,216




1,253




3,663




3,660



Production volumes



1,209




1,108




1,170




1,189




3,487




3,527


Oriented Strand

Third party net sales


$

190



$

179



$

290



$

159



$

659



$

475


Board

Third party sales realizations


$

246



$

240



$

395



$

214



$

293



$

217


(volumes presented

Third party sales volumes(3)



770




747




736




740




2,253




2,190


in square feet 3/8")

Production volumes



777




742




759




747




2,278




2,212


Engineered Solid

Third party net sales


$

127



$

111



$

135



$

138



$

373



$

388


Section

Third party sales realizations


$

2,149



$

2,151



$

2,128



$

2,188



$

2,142



$

2,206


(volumes presented

Third party sales volumes(3)



5.9




5.2




6.3




6.3




17.4




17.6


in cubic feet)

Production volumes



6.1




5.3




5.4




5.3




16.8




17.2


Engineered

Third party net sales


$

78



$

70



$

83



$

90



$

231



$

246


I-joists

Third party sales realizations


$

1,667



$

1,645



$

1,638



$

1,665



$

1,650



$

1,676


(volumes presented

Third party sales volumes(3)



47




42




51




54




140




147


in lineal feet)

Production volumes



47




38




43




48




128




139


Softwood Plywood

Third party net sales


$

39



$

34



$

55



$

42



$

128



$

130


(volumes presented

Third party sales realizations


$

348



$

356



$

507



$

346



$

405



$

369


in square feet 3/8")

Third party sales volumes(3)



113




95




107




121




315




351



Production volumes



97




76




94




100




267




302


Medium Density

Third party net sales


$

44



$

33



$

47



$

44



$

124



$

127


Fiberboard

Third party sales realizations


$

841



$

825



$

864



$

831



$

845



$

836


(volumes presented

Third party sales volumes(3)



52




40




55




53




147




152


in square feet 3/4")

Production volumes



56




35




57




47




148




153



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

 

 

Unallocated Items

Weyerhaeuser Company

Q3.2020 Analyst Package

Preliminary results (unaudited)


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


Net Charge to Earnings


in millions


Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Unallocated corporate function and variable compensation expense


$

(19)



$

(23)



$

(36)



$

(19)



$

(78)



$

(50)


Liability classified share-based compensation



10




(4)




(5)




(1)




1




(5)


Foreign exchange gain (loss)



(8)




3




2




(1)




(3)




(2)


Elimination of intersegment profit in inventory and LIFO



(13)




18




(9)




6




(4)




(4)


Other, net



(5)




(4)




(14)




(30)




(23)




(86)


Operating loss



(35)




(10)




(62)




(45)




(107)




(147)


Non-operating pension and other postretirement benefit costs



(9)




(10)




(9)




(15)




(28)




(495)


Interest income and other



1




2




2




6




5




22


Net charge to earnings


$

(43)



$

(18)



$

(69)



$

(54)



$

(130)



$

(620)


 

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


in millions


Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Operating loss


$

(35)



$

(10)



$

(62)



$

(45)



$

(107)



$

(147)


Depreciation, depletion and amortization



2




1




2




1




5




3


Special items



(12)










15




(12)




35


Adjusted EBITDA(1)


$

(45)



$

(9)



$

(60)



$

(29)



$

(114)



$

(109)



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

 

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


in millions


Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Legal benefits (charges)


$

12



$



$



$

(15)



$

12



$

(35)


Special items included in operating loss



12










(15)




12




(35)


Pension settlement charges


















(449)


Special items included in net charge to earnings


$

12



$



$



$

(15)



$

12



$

(484)


 

Unallocated Selected Items


in millions


Q1.2020



Q2.2020



Q3.2020



Q3.2019



YTD.2020



YTD.2019


Cash spent for capital expenditures


$



$



$



$

(5)



$



$

(14)



























 


1 Adjusted Funds Available for Distribution (Adjusted FAD), a non-GAAP measure, is defined by Weyerhaeuser as net cash from operations adjusted for capital expenditures and significant non-recurring items.

For more information contact:
Analysts - Beth Baum, 206-539-3907
Media - Nancy Thompson, 919-861-0342

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/weyerhaeuser-reports-third-quarter-results-301163687.html

SOURCE Weyerhaeuser Company

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