Weyerhaeuser reports second quarter results

July 28, 2017 3:05 AM

SEATTLE, July 28, 2017 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported second quarter earnings from continuing operations of $24 million, or 3 cents per diluted share, on net sales of $1.8 billion. This compares with earnings from continuing operations of $130 million, or 16 cents per diluted share, on net sales of $1.7 billion for the same period last year. Adjusted EBITDA for the second quarter was $506 million compared to $413 million for the second quarter of last year.

Excluding after-tax special items of $188 million, which includes $147 million non-cash impairment for our Uruguay operations and $31 million for product remediation, the company reported net earnings of $212 million, or 28 cents per diluted share for the second quarter. This compares with net earnings from continuing operations before special items of $130 million for the same period last year and $167 million for first quarter of 2017.

"Each of our businesses delivered strong second quarter operating results, leveraging ongoing operational excellence initiatives to capitalize on improving markets," said Doyle R. Simons, president and CEO. "In the quarter, we also announced the pending sale of our Uruguay operations and completed the asset value optimization process for our Western timberlands. Looking forward, we are extremely well positioned to continue to capitalize on the improving housing market, and remain relentlessly focused on driving value for our shareholders through operational improvements and disciplined capital allocation."

WEYERHAEUSER FINANCIAL HIGHLIGHTS

During 2016, Weyerhaeuser sold its Cellulose Fibers businesses. Results for the Cellulose Fibers segment are presented as discontinued operations.

WEYERHAEUSER FINANCIAL HIGHLIGHTS	2017	2017	2016
(millions, except per share data)	1Q	2Q	2Q
Net sales	$1,693	$1,808	$1,655
Earnings from continuing operations	$157	$24	$130
Net earnings attributable to Weyerhaeuser common shareholders	$157	$24	$157
Earnings per diluted share from continuing operations	$0.21	$0.03	$0.16
Net earnings per diluted share	$0.21	$0.03	$0.21

Weighted average shares outstanding, diluted	755	756	748
Net earnings from continuing operations attributable to Weyerhaeuser common shareholders before special items(1)	$167	$212	$130
Net earnings from continuing operations per diluted share attributable to Weyerhaeuser common shareholders before special items	$0.22	$0.28	$0.17

Adjusted EBITDA(2)	$454	$506	$413

(1) First quarter 2017 after-tax special items include charges of $10 million for Plum Creek merger-related costs. Second quarter 2017 after-tax special items include a $147 million non-cash impairment charge for the Uruguay business, $31 million for product remediation and $8 million for countervailing and antidumping duties on Canadian softwood lumber the company sold into the United States and $2 million for Plum Creek merger-related costs. Second quarter 2016 after-tax special items include $4 million of Plum Creek merger related costs and $7 million of legal expense.

(2) 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, basis of real estate sold, unallocated pension service costs and special items. Adjusted EBITDA excludes results from joint ventures. Adjusted EBITDA should not be considered in isolation from and is not intended to represent an alternative to our GAAP results. A reconciliation of Adjusted EBITDA to GAAP earnings is included within this release.

TIMBERLANDS

FINANCIAL HIGHLIGHTS (millions)	1Q 2017	2Q 2017	Change
Net sales	$688	$632	($56)
Contribution to pre-tax earnings	$148	($12)	($160)
Pre-tax charge for special items	$0	$147	$147
Contribution to pre-tax earnings before special items	$148	$135	($13)
Adjusted EBITDA	$242	$222	($20)

2Q 2017 Performance - In the West, modestly higher average sales realizations for domestic and export logs were more than offset by seasonally higher road spending and forestry costs. In the South, average log sales realizations and volumes were comparable to first quarter. Second quarter results include a $147 million noncash impairment charge related to the pending sale of our Uruguay operations.

3Q 2017 Outlook - Weyerhaeuser expects third quarter earnings before special items and Adjusted EBITDA will be slightly lower than second quarter. In the West, the company anticipates slightly higher log sales realizations, lower fee harvest volumes, and increased road spending compared to the second quarter. In the South, the company anticipates seasonally higher fee harvest volumes, comparable log sales realizations and increased forestry and silviculture expense.

REAL ESTATE, ENERGY & NATURAL RESOURCES

FINANCIAL HIGHLIGHTS (millions)	1Q 2017	2Q 2017	Change
Net sales	$53	$46	($7)
Contribution to pre-tax earnings	$26	$23	($3)
Adjusted EBITDA	$43	$37	($6)

2Q 2017 Performance - Earnings and Adjusted EBITDA decreased as a result of lower Real Estate sales compared to the first quarter. Energy & Natural Resources royalties increased from first quarter levels.

3Q 2017 Outlook - Weyerhaeuser expects earnings and Adjusted EBITDA will be significantly higher than the second quarter. The company anticipates Real Estate sales in the third quarter will be about double second quarter levels. We continue to expect Adjusted EBITDA for the Real Estate, Energy & Natural Resources segment will exceed $250 million for full year 2017.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS (millions)	1Q 2017	2Q 2017	Change
Net sales	$1,154	$1,293	$139
Contribution to pre-tax earnings	$172	$177	$5
Pre-tax charge for special items	$0	$61	$61
Contribution to pre-tax earnings before special items	$172	$238	$66
Adjusted EBITDA	$207	$274	$67

2Q 2017 Performance - Average sales realizations increased across all product lines in the second quarter. Sales volumes were higher for lumber and engineered wood products while oriented strand board sales volumes were comparable to the first quarter. Second quarter results include pre-tax special items of $61 million, which are comprised of a $50 million charge for product remediation and $11 million of softwood lumber countervailing and antidumping duties.

3Q 2017 Outlook - Weyerhaeuser anticipates third quarter earnings before special items and Adjusted EBITDA will be comparable to the second quarter. The company expects average sales realizations and sales volumes for lumber will be comparable to the second quarter. For oriented strand board, the company anticipates slightly higher average sales realizations and modestly lower sales volumes.

ABOUT WEYERHAEUSERWeyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control more than 13 million acres of timberlands, primarily in the U.S., and manage additional timberlands under long-term licenses in Canada. We manage these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. We are also one of the largest manufacturers of wood products. Our company is a real estate investment trust. In February 2016, we merged with Plum Creek Timber Company, Inc. In 2016, we generated $6.4 billion in net sales and employed approximately 10,400 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 INFORMATIONWeyerhaeuser will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on July 28, 2017, to discuss second quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on https://www.weyerhaeuser.com on July 28, 2017.

To join the conference call from within North America, dial 877-296-9413 (access code: 43729080) at least 15 minutes prior to the call. Those calling from outside North America should dial 706-679-2458 (access code: 43729080). Replays will be available for two weeks at 855-859-2056 (access code: 43729080) from within North America and at 404-537-3406 (access code: 43729080) from outside North America.

FORWARD LOOKING STATEMENTSThis news release contains statements concerning the company's future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, including with respect to the following for the third quarter of 2017: earnings and Adjusted EBITDA for each of our business segments; log sale realizations and fee harvest volumes; sales volumes across Wood Products product lines, expected sales realizations and volumes for lumber and oriented strand board; and various logging, forestry and silviculture costs; and real estate sales volumes. These statements generally are identified by words such as "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," and expressions such as "will be," "will continue," "will likely result," and similar words and expressions. These statements are based on our current expectations and assumptions and are not guarantees of future performance. The realization of our expectations and the accuracy of our assumptions are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to:

the effect of general economic conditions, including employment rates, interest rate levels, housing starts, availability of financing for home mortgages and strength of the U.S. dollar;
market demand for our products, including market demand for our timberland properties with higher and better uses, which is related to, among other factors, the strength of the various U.S. business segments and U.S. and international economic conditions;
changes in currency exchange rates and restrictions on international trade;
performance of our manufacturing operations, including maintenance requirements;
potential disruptions in our manufacturing operations;
the level of competition from domestic and foreign producers;
raw material availability and prices;
the effect of weather;
the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;
energy prices;
the successful execution of our internal plans and strategic initiatives, including restructuring and cost reduction initiatives;
the successful and timely execution and integration of our strategic acquisitions, including our ability to realize expected benefits and synergies, and the successful and timely execution of our strategic divestitures, each of which is subject to a number of risks and conditions beyond our control including, but not limited to, timing and required regulatory approvals;
transportation and labor availability and costs;
federal tax policies;
the effect of forestry, land use, environmental and other governmental regulations;
legal proceedings;
performance of pension fund investments and related derivatives;
the effect of timing of retirements and changes in the market price of our common stock on charges for share-based compensation;
changes in accounting principles; and
other factors described under "Risk Factors" in our 2016 Annual Report on Form 10-K as well as those set forth from time to time in our other public statements and other reports and filings with the Securities and Exchange Commission.

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

For more information contact:		Analysts - Krista Kochivar (206) 539-3907
		Media - Anthony Chavez (206) 539-4406

RECONCILIATION OF ADJUSTED EBITDA TO NET EARNINGSWe reconcile Adjusted EBITDA to net earnings for the consolidated company and to operating income 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 March 31, 2017:

DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items		Total
Adjusted EBITDA by Segment:
Net earnings									$	157
Earnings from discontinued operations, net of income taxes									—
Interest expense, net of capitalized interest									99
Income taxes									24
Net contribution to earnings	$	148	$	26	$	172	$	(66)	$	280
Equity (earnings) loss from joint ventures	—		—		—		—		—
Non-operating pension and other postretirement benefit (costs) credits	—		—		—		22		22
Interest income and other	—		—		—		(9)		(9)
Operating income (loss)	148		26		172		(53)		293
Depreciation, depletion and amortization	94		3		35		1		133
Basis of real estate sold	—		14		—		—		14
Unallocated pension service costs	—		—		—		2		2
Special items(1)	—		—		—		12		12
Adjusted EBITDA	$	242	$	43	$	207	$	(38)	$	454

(1) Pre-tax special items include: $12 million of Plum Creek merger-related costs.


The table below reconciles Adjusted EBITDA for the quarter ended June 30, 2017 :

DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items		Total
Adjusted EBITDA by Segment:
Net earnings									$	24
Earnings from discontinued operations, net of income taxes									—
Interest expense, net of capitalized interest									100
Income taxes									34
Net contribution to earnings	$	(12)	$	23	$	177	$	(30)	$	158
Equity earnings from joint ventures	—		—		—		—		—
Non-operating pension and other postretirement benefit (costs) credits	—		—		—		8		8
Interest income and other	—		—		—		(9)		(9)
Operating income (loss)	(12)		23		177		(31)		157
Depreciation, depletion and amortization	87		4		36		2		129
Basis of real estate sold	—		10		—		—		10
Unallocated pension service costs	—		—		—		—		—
Special items(1)	147		—		61		2		210
Adjusted EBITDA	$	222	$	37	$	274	$	(27)	$	506

(1) Pre-tax special items include: $147 million of impairment charges related to our Uruguayan operations; $50 million for product remediation; $11 million of countervailing and antidumping duties; and $2 million of Plum Creek merger-related costs.


The table below reconciles Adjusted EBITDA for the quarter ended June 30, 2016:

DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items		Total
Adjusted EBITDA by Segment:
Net earnings									$	168
Earnings from discontinued operations, net of income taxes									(38)
Interest expense, net of capitalized interest									114
Income taxes									31
Net contribution to earnings	$	125	$	12	$	156	$	(18)	$	275
Equity earnings from joint ventures	—		—		—		(7)		(7)
Non-operating pension and other postretirement benefit (costs) credits	—		—		—		(10)		(10)
Interest income and other	—		—		—		(10)		(10)
Operating income (loss)	125		12		156		(45)		248
Depreciation, depletion and amortization	95		3		33		2		133
Basis of real estate sold	—		13		—		—		13
Unallocated pension service costs	—		—		—		—		—
Special items(1)	—		—		—		19		19
Adjusted EBITDA	$	220	$	28	$	189	$	(24)	$	413

(1) Pre-tax special items include: $8 million of Plum Creek merger-related costs and $11 million of legal expense.

Weyerhaeuser Company							Exhibit 99.2
Q2.2017 Analyst Package
Preliminary results (unaudited)

Consolidated Statement of Operations(1)(2)

in millions	Q1		Q2				Year-to-date
	March 31, 2017		June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Net sales	$	1,693	$	1,808	$	1,655	$	3,501	$	3,060
Cost of products sold	1,272		1,336		1,271		2,608		2,374
Gross margin	421		472		384		893		686
Selling expenses	22		22		22		44		45
General and administrative expenses	87		76		94		163		173
Research and development expenses	4		4		4		8		9
Charges for integration and restructuring, closures and asset impairments	13		151		14		164		125
Other operating costs (income), net	2		62		2		64		(53)
Operating income from continuing operations	293		157		248		450		387
Equity earnings from joint ventures	—		—		7		—		12
Non-operating pension and other postretirement benefit (costs) credits	(22)		(8)		10		(30)		24
Interest income and other	9		9		10		18		19
Interest expense, net of capitalized interest	(99)		(100)		(114)		(199)		(209)
Earnings from continuing operations before income taxes	181		58		161		239		233
Income taxes	(24)		(34)		(31)		(58)		(42)
Earnings from continuing operations	157		24		130		181		191
Earnings from discontinued operations, net of income taxes	—		—		38		—		58
Net earnings	157		24		168		181		249
Dividends on preference shares	—		—		(11)		—		(22)
Net earnings attributable to Weyerhaeuser common shareholders	$	157	$	24	$	157	$	181	$	227

(1) Discontinued operations as presented herein consist of the operations of our former Cellulose Fibers segment. The corresponding assets and liabilities were classified as discontinued operations on our balance sheet.

(2) Amounts presented reflect the results of operations acquired in our merger with Plum Creek Timber, Inc., beginning on the merger date of February 19, 2016.




Per Share Information

	Q1		Q2				Year-to-date
	March 31, 2017		June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Earnings per share attributable to Weyerhaeuser common shareholders, basic:
Continuing operations	$	0.21	$	0.03	$	0.16	$	0.24	$	0.25
Discontinued operations	—		—		0.05		—		0.08
Net earnings per share	$	0.21	$	0.03	$	0.21	$	0.24	$	0.33

Earnings per share attributable to Weyerhaeuser common shareholders, diluted:
Continuing operations	$	0.21	$	0.03	$	0.16	$	0.24	$	0.25
Discontinued operations	—		—		0.05		—		0.08
Net earnings per share	$	0.21	$	0.03	$	0.21	$	0.24	$	0.33

Dividends paid per common share	$	0.31	$	0.31	$	0.31	$	0.62	$	0.62

Weighted average shares outstanding (in thousands):
Basic	750,665		752,630		743,140		751,674		687,572
Diluted	754,747		756,451		747,701		755,625		691,060

Common shares outstanding at end of period (in thousands)	751,411		752,711		733,010		752,711		733,010




Weyerhaeuser Company
Q2.2017 Analyst Package
Preliminary results (unaudited)

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

in millions	Q1		Q2				Year-to-date
	March 31, 2017		June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Net earnings	$	157	$	24	$	168	$	181	$	249
Earnings from discontinued operations, net of income taxes	—		—		(38)		—		(58)
Equity earnings from joint ventures	—		—		(7)		—		(12)
Non-operating pension and other postretirement benefit costs (credits)	22		8		(10)		30		(24)
Interest income and other	(9)		(9)		(10)		(18)		(19)
Interest expense, net of capitalized interest	99		100		114		199		209
Income taxes	24		34		31		58		42
Operating income from continuing operations	293		157		248		450		387
Depreciation, depletion and amortization	133		129		133		262		237
Basis of real estate sold	14		10		13		24		30
Unallocated pension service costs	2		—		—		2		2
Special items	12		210		19		222		93
Adjusted EBITDA*	$	454	$	506	$	413	$	960	$	749

*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, basis of real estate sold, unallocated pension service costs and special items. Adjusted EBITDA excludes results from joint ventures. Our definition of Adjusted EBITDA may be different from similarly titled measures reported by other companies. Adjusted EBITDA should not be considered in isolation from and is not intended to represent an alternative to our GAAP results.




Special Items Included in Net Earnings (income tax affected)

in millions	Q1		Q2				Year-to-date
	March 31, 2017		June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Net earnings attributable to Weyerhaeuser common shareholders	$	157	$	24	$	157	$	181	$	227
Plum Creek merger- and integration-related costs	10		2		4		12		102
Uruguay impairment	—		147		—		147		—
Gain on sale of non-strategic asset	—		—		—		—		(22)
Legal expense	—		—		7		—		7
Product remediation	—		31		—		31		—
Countervailing and antidumping duties	—		8		—		8		—
Net earnings attributable to Weyerhaeuser common shareholders before special items	167		212		168		379		314
Earnings from discontinued operations, net of income taxes	—		—		(38)		—		(58)
Net earnings from continuing operations attributable to Weyerhaeuser common shareholders before special items	$	167	$	212	$	130	$	379	$	256

per share	Q1		Q2				Year-to-date
	March 31, 2017		June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Net earnings per diluted share attributable to Weyerhaeuser common shareholders	$	0.21	$	0.03	$	0.21	$	0.24	$	0.33
Plum Creek merger- and integration-related costs	0.01		—		—		0.02		0.14
Uruguay impairment	—		0.20		—		0.19		—
Gain on sale of non-strategic asset	—		—		—		—		(0.03)
Legal expense	—		—		0.01		—		0.01
Product remediation	—		0.04		—		0.04		—
Countervailing and antidumping duties	—		0.01		—		0.01		—
Net earnings per diluted share attributable to Weyerhaeuser common shareholders before special items	0.22		0.28		0.22		0.50		0.45
Earnings from discontinued operations, net of income taxes	—		—		(0.05)		—		(0.08)
Net earnings from continuing operations per diluted share attributable to Weyerhaeuser common shareholders before special items	$	0.22	$	0.28	$	0.17	$	0.50	$	0.37

Weyerhaeuser Company
Q2.2017 Analyst Package
Preliminary results (unaudited)
Consolidated Balance Sheet

in millions	March 31, 2017		June 30, 2017		December 31, 2016

ASSETS
Current assets:
Cash and cash equivalents	$	455	$	701	$	676
Receivables, less allowances	472		442		390
Receivables for taxes	10		8		84
Inventories	386		349		358
Prepaid expenses and other current assets	142		177		114
Assets held for sale	—		411		—
Total current assets	1,465		2,088		1,622
Property and equipment, net	1,544		1,534		1,562
Construction in progress	230		190		213
Timber and timberlands at cost, less depletion charged to disposals	14,218		13,669		14,299
Minerals and mineral rights, net	317		314		319
Investments in and advances to joint ventures	56		33		56
Goodwill	40		40		40
Deferred tax assets	287		261		293
Other assets	229		246		224
Restricted financial investments held by variable interest entities	615		615		615
Total assets	$	19,001	$	18,990	$	19,243

LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	343	$	668	$	281
Accounts payable	227		252		233
Accrued liabilities	452		585		692
Liabilities held for sale	—		19		—
Total current liabilities	1,022		1,524		1,206
Long-term debt	6,263		5,936		6,329
Long-term debt (nonrecourse to the company) held by variable interest entities	511		511		511
Deferred pension and other postretirement benefits	1,287		1,230		1,322
Deposit received from contribution of timberlands to related party	422		419		426
Other liabilities	281		280		269
Total liabilities	9,786		9,900		10,063
Total equity	9,215		9,090		9,180
Total liabilities and equity	$	19,001	$	18,990	$	19,243

Weyerhaeuser Company
Q2.2017 Analyst Package
Preliminary results (unaudited)
Consolidated Statement of Cash Flows

in millions	Q1		Q2				Year-to-date
	March 31, 2017		June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Cash flows from operations:
Net earnings	$	157	$	24	$	168	$	181	$	249
Noncash charges (credits) to income:
Depreciation, depletion and amortization	133		129		147		262		289
Basis of real estate sold	14		10		13		24		30
Deferred income taxes, net	3		3		38		6		56
Gains on sales of discontinued operations	—		—		—		—		—
Gains on sales of non-strategic assets	(7)		(2)		(10)		(9)		(51)
Pension and other postretirement benefits	32		15		1		47		5
Other noncash charges (credits)	13		156		26		169		34
Change in:
Receivables less allowances	(70)		(8)		(43)		(78)		(90)
Receivable for taxes	(36)		(17)		25		(53)		35
Inventories	(28)		21		60		(7)		17
Prepaid expenses	(9)		(4)		—		(13)		(1)
Accounts payable and accrued liabilities	(137)		192		106		55		36
Pension and postretirement contributions	(22)		(15)		(12)		(37)		(29)
Distributions of earnings received from joint ventures	—		—		—		—		5
Other	(8)		(15)		(27)		(23)		(46)
Net cash from operations	35		489		492		524		539

Cash flows from investing activities:
Capital expenditures:
Purchases of property and equipment	(52)		(74)		(83)		(126)		(140)
Timberlands reforestation costs	(23)		(13)		(18)		(36)		(34)
Acquisition of timberlands	—		—		(2)		—		(8)
Proceeds from sales of discontinued operations	—		—		—		—		—
Proceeds from sale of assets	8		4		13		12		83
Proceeds from contribution of timberlands to related party	—		—		440		—		440
Distributions of investment received from joint ventures	—		23		3		23		27
Cash and cash equivalents acquired in the merger with Plum Creek	—		—		—		—		9
Other	(1)		22		(3)		21		(3)
Cash from (used in) investing activities	(68)		(38)		350		(106)		374

Cash flows from financing activities:
Cash dividends on common shares	(233)		(233)		(228)		(466)		(469)
Cash dividends on preference shares	—		—		(11)		—		(11)
Proceeds from issuance of long-term debt	—		—		300		—		1,398
Payments of long-term debt	—		—		(3)		—		(723)
Repurchase of common stock	—		—		(831)		—		(1,629)
Other	45		28		8		73		1
Cash used in financing activities	(188)		(205)		(765)		(393)		(1,433)

Net change in cash and cash equivalents	(221)		246		77		25		(520)

Cash and cash equivalents from continuing operations at beginning of period	$	676	$	455	$	411	$	676	1,011
Cash and cash equivalents from discontinued operations at beginning of period	—		—		4		—		1
Cash and cash equivalents at beginning of period	$	676	$	455	$	415	$	676	1,012

Cash and cash equivalents from continuing operations at end of period	$	455	$	701	$	485	$	701	485
Cash and cash equivalents from discontinued operations at end of period	—		—		7		—		7
Cash and cash equivalents at end of period	$	455	$	701	$	492	$	701	$	492

Cash paid (received) during the year for:
Interest, net of amount capitalized	$	120	$	72	$	92	$	192	$	225
Income taxes	$	59	$	47	$	(12)	$	106	$	(25)

Weyerhaeuser Company							Total Company Statistics
Q2.2017 Analyst Package
Preliminary results (unaudited)

Selected Total Company Items

in millions	Q1		Q2				Year-to-date
	March 31, 2017		June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Pension and postretirement costs:
Pension and postretirement costs allocated to business segments	$	8	$	7	$	8	$	15	$	15
Pension and postretirement credits not allocated:
Unallocated pension service costs	2		—		—		2		2
Non-operating pension and other postretirement benefit costs (credits)	22		8		(10)		30		(24)
Accelerated pension costs included in Plum Creek merger-related costs (not allocated)	—		—		—		—		5
Total pension and postretirement costs (credits) for continuing operations	32		15		(2)		47		(2)
Pension and postretirement service costs directly attributable to discontinued operations	—		—		3		—		7
Total company pension and postretirement costs	$	32	$	15	$	1	$	47	$	5

Cash spent for capital expenditures for continuing operations	$	(75)	$	(87)	$	(89)	$	(162)	$	(140)

Weyerhaeuser Company						Timberlands Segment
Q2.2017 Analyst Package
Preliminary results (unaudited)
Segment Statement of Operations

in millions		Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Sales to unaffiliated customers		$	486	$	469	$	471	$	955	$	858
Intersegment sales		202		163		193		365		415
Total net sales		688		632		664		1,320		1,273
Cost of products sold		519		476		509		995		968
Gross margin		169		156		155		325		305
Selling expenses		1		1		2		2		3
General and administrative expenses		24		23		32		47		60
Research and development expenses		3		4		4		7		8
Charges for integration and restructuring, closures and assets impairments		—		147		—		147		—
Other operating income, net		(7)		(7)		(8)		(14)		(20)
Operating income and Net contribution to earnings		$	148	$	(12)	$	125	$	136	$	254

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

in millions		Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Operating income		$	148	$	(12)	$	125	$	136	$	254
Depreciation, depletion and amortization		94		87		95		181		165
Special items		—		147		—		147		—
Adjusted EBITDA*		$	242	$	222	$	220	$	464	$	419

*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.

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

		Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Uruguay impairment		—		(147)		—		(147)		—
Selected Segment Items

		Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Total decrease (increase) in working capital (1)		$	(37)	$	(5)	$	28	$	(42)	$	(25)
Cash spent for capital expenditures		$	(30)	$	(25)	$	(31)	$	(55)	$	(51)

(1) Working capital does not include cash balances. Represents the change in combined working capital of Timberlands and Real Estate & ENR.

Segment Statistics(2)(3)

		Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Third PartyNet Sales(millions)	Delivered logs:
	West	$	225	$	227	$	232	$	452	$	447
	South	148		148		154		296		255
	North	27		16		19		43		32
	Other	20		11		7		31		14
	Total delivered logs	420		402		412		822		748
	Stumpage and pay-as-cut timber	12		17		23		29		38
	Products from international operations	19		21		21		40		37
	Recreational and other lease revenue	14		15		8		29		14
	Other revenue	21		14		7		35		21
	Total	$	486	$	469	$	471	$	955	$	858
Delivered Logs Third Party Sales Realizations (per ton)	West	$	104.27	$	105.84	$	98.21	$	105.06	$	99.39
	South	$	34.48	$	34.48	$	35.54	$	34.48	$	35.87
	North	$	59.57	$	63.49	$	65.43	$	60.97	$	62.95
	International	$	28.18	$	29.73	$	23.29	$	28.98	$	18.59
Delivered Logs Third Party Sales Volumes (tons, thousands)	West	2,157		2,143		2,363		4,300		4,496
	South	4,293		4,285		4,340		8,578		7,121
	North	454		253		292		707		502
	International	90		96		89		186		235
	Other	510		292		169		802		338
Fee Harvest Volumes (tons, thousands)	West	2,657		2,652		2,980		5,309		5,781
	South	6,373		6,473		7,061		12,846		12,091
	North	622		383		454		1,005		714
	International	265		319		248		584		547
	Other	371		444		181		815		181

(2) The Western region includes Washington and Oregon. The Southern region includes Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas and Oklahoma. The Northern region includes West Virginia, Maine, New Hampshire, Vermont, Michigan, Wisconsin and Montana. Other includes our Canadian operations and managed Twin Creeks operations.

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

Weyerhaeuser Company						Real Estate, Energy and Natural Resources Segment
Q2.2017 Analyst Package
Preliminary results (unaudited)

Segment Statement of Operations

in millions		Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Sales to unaffiliated customers		$	53	$	46	$	38	$	99	$	77
Intersegment sales		—		—		—		—		—
Total net sales		53		46		38		99		77
Cost of products sold		20		16		19		36		39
Gross margin		33		30		19		63		38
Selling expenses		—		—		—		—		—
General and administrative expenses		7		7		8		14		12
Charges for integration, restructuring, closures and asset impairments		—		—		1		—		1
Other operating costs (income), net		—		—		(2)		—		(2)
Operating income		26		23		12		49		27
Equity earnings (loss) from joint ventures(1)		—		—		—		—		—
Net contribution to earnings		$	26	$	23	$	12	$	49	$	27

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

in millions		Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Operating income		$	26	$	23	$	12	$	49	$	27
Depreciation, depletion and amortization		3		4		3		7		5
Basis of real estate sold		14		10		13		24		30
Adjusted EBITDA*		$	43	$	37	$	28	$	80	$	62
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.

Selected Segment Items

		Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Cash spent for capital expenditures		$	—	$	(1)	$	(1)	$	(1)	$	(1)

Segment Statistics

		Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Net Sales(millions)	Real Estate	$	37	$	27	$	26	$	64	$	56
	Energy and natural resources	16		19		12		35		21
	Total	$	53	$	46	$	38	$	99	$	77
Acres sold	Real Estate	13,257		10,003		10,020		23,260		25,245
Price per acre	Real Estate	$	2,403	$	2,714	$	2,555	$	2,537	$	2,210

Weyerhaeuser Company		Wood Products Segment
Q2.2017 Analyst Package
Preliminary results (unaudited)

Segment Statement of Operations
in millions		Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Sales to unaffiliated customers		$	1,154	$	1,293	$	1,146	$	2,447	$	2,125
Intersegment sales		—		—		22		—		44
Total net sales		1,154		1,293		1,168		2,447		2,169
Cost of products sold		926		1,002		957		1,928		1,819
Gross margin		228		291		211		519		350
Selling expenses		21		19		20		40		42
General and administrative expenses		32		32		30		64		57
Research and development expenses		1		—		—		1		1
Charges for integration and restructuring, closures and asset impairments		1		2		4		3		5
Other operating costs (income), net		1		61		1		62		2
Operating income and Net contribution to earnings		$	172	$	177	$	156	$	349	$	243

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

in millions		Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Operating income		$	172	$	177	$	156	$	349	$	243
Depreciation, depletion and amortization		35		36		33		71		63
Special items		—		61		—		61		—
Adjusted EBITDA*		$	207	$	274	$	189	$	481	$	306

*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.

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

		Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Countervailing and antidumping duties		$	—	$	(11)	$	—	$	(11)	$	—
Product remediation		—		(50)		—		(50)		—
Total		$	—	$	(61)	$	—	$	(61)	$	—

Selected Segment Items

		Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Total decrease (increase) in working capital (1)		$	(122)	$	113	$	35	$	(9)	$	(97)
Cash spent for capital expenditures		$	(44)	$	(61)	$	(52)	$	(105)	$	(81)

(1) Working capital does not include cash balances.

Segment Statistics

in millions, except for third-party sales realizations		Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Structural Lumber(board feet)	Third party net sales	$	478	$	538	$	498	$	1,016	$	917
	Third party sales realizations	$	413	$	441	$	399	$	427	$	382
	Third party sales volumes (2)	1,158		1,218		1,249		2,376		2,401
	Production volumes	1,152		1,146		1,205		2,298		2,334
Engineered SolidSection (cubic feet)	Third party net sales	$	117	$	130	$	115	$	247	$	224
	Third party sales realizations	$	1,881	$	1,979	$	1,922	$	1,931	$	1,946
	Third party sales volumes (2)	6.2		6.6		6.0		12.8		11.5
	Production volumes	6.3		6.6		5.9		12.9		11.5
EngineeredI-joists (lineal feet)	Third party net sales	$	73	$	85	$	73	$	158	$	139
	Third party sales realizations	$	1,481	$	1,522	$	1,471	$	1,503	$	1,488
	Third party sales volumes (2)	49		57		50		106		94
	Production volumes	50		53		46		103		92
Oriented StrandBoard (square feet 3/8")	Third party net sales	$	203	$	225	$	182	$	428	$	345
	Third party sales realizations	$	263	$	295	$	240	$	279	$	227
	Third party sales volumes (2)	769		764		761		1,533		1,520
	Production volumes	758		754		733		1,512		1,482
Softwood Plywood (square feet 3/8")	Third party net sales	$	44	$	47	$	50	$	91	$	85
	Third party sales realizations	$	377	$	380	$	382	$	379	$	352
	Third party sales volumes (2)	118		123		131		241		241
	Production volumes	97		99		111		196		199
Medium DensityFiberboard (square feet 3/4")	Third party net sales	$	47	$	51	$	47	$	98	$	64
	Third party sales realizations	$	795	$	845	$	772	$	820	$	769
	Third party sales volumes (2)	59		60		60		119		83
	Production volumes	56		63		62		119		87

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

Weyerhaeuser Company	Unallocated Items
Q2.2017 Analyst Package
Preliminary results (unaudited)

Unallocated items are gains or charges not related to or allocated to an individual operating segment. They include a portion of items such as: share-based compensation, pension and postretirement costs, foreign exchange transaction gains and losses associated with financing and the elimination of intersegment profit in inventory, equity earnings from our timberland venture, and the LIFO reserve.

Contribution to Earnings

in millions	Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Unallocated corporate function expenses	$	(19)	$	(17)	$	(24)	$	(36)	$	(41)
Unallocated share-based compensation	(6)		—		1		(6)		(1)
Unallocated pension service costs	(2)		—		—		(2)		(2)
Foreign exchange gains (losses)	(3)		—		1		(3)		14
Elimination of intersegment profit in inventory and LIFO	(6)		(3)		(2)		(9)		(8)
Gain on sale of non-strategic asset	3		1		8		4		44
Charges for integration and restructuring, closures and asset impairments:
Plum Creek merger- and integration-related costs	(12)		(2)		(8)		(14)		(118)
Other restructuring, closures and asset impairments	—		—		(1)		—		(1)
Other	(8)		(10)		(20)		(18)		(24)
Operating income (loss)	(53)		(31)		(45)		(84)		(137)
Equity earnings from joint venture (1)	—		—		7		—		12
Non-operating pension and other postretirement benefit (costs) credits (2)	(22)		(8)		10		(30)		24
Interest income and other	9		9		10		18		19
Net contribution to earnings	$	(66)	$	(30)	$	(18)	$	(96)	$	(82)

(1) 2016 results include equity earnings from our Timberland Venture, which was consolidated as a wholly-owned subsidiary effective August 31, 2016.

(2) During Q1 2017 we adopted ASU 2017-07. This ASU requires us to show components of pension and other post retirement benefit costs (interest, expected return on plan assets, amortization of actuarial gains or losses, amortization of prior service credits or costs) on the Consolidated Statement of Operations as a line item outside of "Operating income." We reclassified these components for all periods shown above.

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

in millions	Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Operating income (loss)	$	(53)	$	(31)	$	(45)	$	(84)	$	(137)
Depreciation, depletion and amortization	1		2		2		3		4
Unallocated pension service costs	2		—		—		2		2
Special items	12		2		19		14		93
Adjusted EBITDA*	$	(38)	$	(27)	$	(24)	$	(65)	$	(38)

*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.

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

	Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Plum Creek merger- and integration-related costs	(12)		(2)		(8)		(14)		(118)
Gain on sale of non-strategic asset	—		—		—		—		36
Legal expense	—		—		(11)		—		(11)
Total	$	(12)	$	(2)	$	(19)	$	(14)	$	(93)

Unallocated Selected Items

	Q1.2017		Q2.2017		Q2.2016		YTD.2017		YTD.2016
Cash spent for capital expenditures	$	(1)	$	—	$	(5)	$	(1)	$	(7)

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Weyerhaeuser reports second quarter results

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