Weyerhaeuser reports second quarter results

Rhea-AI Summary

Weyerhaeuser Company (NYSE: WY) reported Q2 2022 financial results, achieving net earnings of $788 million or $1.06 per diluted share, alongside net sales of $3.0 billion. This marks a decline from $1.0 billion net earnings in Q2 2021. Adjusted EBITDA for the quarter was $1.2 billion, down from $1.6 billion year-over-year. The company anticipates lower Q3 earnings but remains confident in long-term demand despite macroeconomic challenges. Year-to-date, Weyerhaeuser generated $2.7 billion in Adjusted EBITDA.

Positive

• None.

Negative

• Net earnings decreased from $1.0 billion in Q2 2021 to $788 million in Q2 2022.
• Adjusted EBITDA fell from $1.6 billion in Q2 2021 to $1.2 billion in Q2 2022.
• Q3 2022 earnings before special items and Adjusted EBITDA expected to be lower than Q2 2022.

• Achieved net earnings of $788 million, or $1.06 per diluted share
• Generated record first half Adjusted EBITDA of $2.7 billion
• Enhanced portfolio with strategic timberlands acquisition in North and South Carolina

SEATTLE, July 29, 2022 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported second quarter net earnings of $788 million, or $1.06 per diluted share, on net sales of $3.0 billion. This compares with net earnings of $1.0 billion, or $1.37 per diluted share, on net sales of $3.1 billion for the same period last year and net earnings of $771 million for the first quarter of 2022. There were no special items in the second quarter of 2022 or the same period last year. Net earnings before special items was $978 million for the first quarter of 2022.

View our earnings release and financial statements in a printer-friendly PDF.

Adjusted EBITDA for the second quarter of 2022 was $1.2 billion compared with $1.6 billion for the same period last year and $1.5 billion for the first quarter of 2022.

"In the second quarter, our teams delivered strong results across each of our businesses," said Devin W. Stockfish, president and chief executive officer. "Year to date, we have generated $2.7 billion of Adjusted EBITDA and $1.9 billion of Adjusted Funds Available for Distribution. Looking forward, we remain constructive on long-term demand fundamentals that support our businesses, notwithstanding the recent macroeconomic headwinds. Our financial position is exceptionally strong, and we remain committed to delivering operational excellence across our unmatched portfolio of assets and enhancing shareholder value through disciplined capital allocation."

WEYERHAEUSER FINANCIAL HIGHLIGHTS		2022		2022		2021
(millions, except per share data)		Q1		Q2		Q2
Net sales		$3,112		$2,973		$3,144
Net earnings		$771		$788		$1,028
Net earnings per diluted share		$1.03		$1.06		$1.37
Weighted average shares outstanding, diluted		749		746		752
Net earnings before special items(1)(2)		$978		$788		$1,028
Net earnings per diluted share before special items(1)		$1.31		$1.06		$1.37
Adjusted EBITDA(1)		$1,497		$1,205		$1,573
Net cash from operations		$957		$1,146		$1,308
Adjusted FAD(3)		$850		$1,065		$1,236

(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)	Special items for prior periods presented are included in the reconciliation tables within this release.
(3)	Adjusted Funds Available for Distribution (Adjusted FAD) is a non-GAAP measure that management uses to evaluate the company's liquidity. Adjusted FAD, as we define it, is net cash from operations adjusted for capital expenditures and significant non-recurring items. Adjusted FAD measures cash generated during the period (net of capital expenditures and significant non-recurring items) that is available for dividends, repurchases of common shares, debt reduction, acquisitions, and other discretionary and nondiscretionary capital allocation activities. Adjusted FAD should not be considered in isolation from, and is not intended to represent an alternative to, our GAAP results. A reconciliation of Adjusted FAD to net cash from operations is included within this release.

 

TIMBERLANDS

FINANCIAL HIGHLIGHTS		2022		2022
(millions)		Q1		Q2		Change
Net sales		$626		$671		$45
Net contribution to pretax earnings		$182		$153		$(29)
Adjusted EBITDA		$247		$219		$(28)

 

Q2 2022 Performance – In the West, fee harvest volumes were moderately lower than the first quarter due to unseasonably wet weather. Domestic sales realizations were moderately lower and per unit log and haul costs were significantly higher as harvesting operations transitioned to higher elevation units. Export sales realizations were moderately higher and export sales volumes were significantly higher, driven by strong demand in Japan. In the South, sales realizations for sawlogs and fiber logs were slightly higher, and fee harvest volumes increased moderately. Per unit log and haul costs were significantly higher, primarily due to fuel-related costs. Forestry and road costs in the West and South were seasonally higher.

Q3 2022 Outlook – Weyerhaeuser anticipates third quarter earnings before special items and Adjusted EBITDA will be lower than second quarter 2022, but moderately higher than third quarter 2021. In the West, the company expects comparable fee harvest volumes and significantly lower sales volumes due to export. Sales realizations are expected to be moderately lower, and per unit log and haul costs are expected to be lower. In the South, the company expects sales realizations and per unit log and haul costs to be comparable and fee harvest volumes to be moderately higher. Forestry and road costs in the West and South are expected to be seasonally higher.

REAL ESTATE, ENERGY & NATURAL RESOURCES

FINANCIAL HIGHLIGHTS		2022		2022
(millions)		Q1		Q2		Change
Net sales		$128		$117		$(11)
Net contribution to pretax earnings		$81		$65		$(16)
Adjusted EBITDA		$116		$107		$(9)

 

Q2 2022 Performance – Earnings and Adjusted EBITDA decreased from the first quarter due to lower real estate sales. The average price per acre decreased and the average basis as a percentage of sales increased due to the mix of properties sold.

Q3 2022 Outlook – Weyerhaeuser anticipates third quarter earnings and Adjusted EBITDA will be slightly lower than third quarter 2021, primarily due to a decrease in acres sold year over year. The company now expects full year 2022 Adjusted EBITDA for the segment will be approximately $325 million, a $25 million increase from previous guidance.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS		2022		2022
(millions)		Q1		Q2		Change
Net sales		$2,519		$2,341		$(178)
Net contribution to pretax earnings		$1,182		$863		$(319)
Adjusted EBITDA		$1,233		$912		$(321)

 

Q2 2022 Performance – Sales realizations for lumber and oriented strand board decreased 25 percent and 14 percent, respectively, compared with first quarter averages. Sales volumes for lumber were significantly higher due to seasonal inventory drawdown and improved production, while unit manufacturing costs and log costs were slightly higher. Sales volumes for oriented strand board were slightly higher. Unit manufacturing costs were moderately higher and fiber costs were comparable. Sales realizations and production volumes for most engineered wood products were significantly higher. This was partially offset by significantly higher raw material costs, primarily for oriented strand board webstock. Distribution commodity realizations were significantly lower.

Q3 2022 Outlook – Weyerhaeuser anticipates third quarter earnings and Adjusted EBITDA will be comparable to the second quarter, excluding the effect of changes in average sales realizations for lumber and oriented strand board. The company expects comparable sales volumes and unit manufacturing costs for lumber, as well as moderately lower log costs. For oriented strand board, the company expects slightly lower sales volumes, comparable fiber costs, and significantly higher unit manufacturing costs due to planned maintenance outages. Raw material costs for engineered wood products are expected to be significantly lower, primarily for oriented strand board webstock, partially offset by lower sales realizations, primarily for plywood. Sales volumes for engineered wood products are expected to be comparable.

UNALLOCATED

FINANCIAL HIGHLIGHTS		2022		2022
(millions)		Q1		Q2		Change
Net charge to pretax earnings		$(117)		$(44)		$73
Adjusted EBITDA		$(99)		$(33)		$66

 

Q2 2022 Performance – Second quarter results include an $18 million noncash benefit for the elimination of intersegment profit in inventory and LIFO due to a decrease in log and lumber inventories.

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 2021, we generated $10.2 billion in net sales and employed approximately 9,200 people who serve customers worldwide. 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 July 29, 2022 to discuss second quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on July 29, 2022.

To join the conference call from within North America, dial 877-407-0792 (access code: 13724915) at least 15 minutes prior to the call. Those calling from outside North America should dial 201-689-8263 (access code: 13724915). Replays will be available for two weeks at 844-512-2921 (access code: 13724915) from within North America, and at 412-317-6671 (access code: 13724915) 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, including, but not limited to, with respect to our outlook and expectations concerning the following: earnings and Adjusted EBITDA for the company and for each of our businesses; sales volumes and sales realizations for our Timberlands business; log and haul, forestry and road costs and expenses; fee harvest volumes; acres to be sold; sales volumes and unit manufacturing costs for our lumber and oriented strand board businesses; sales realizations and sales volumes for our engineered wood products business; materials costs for each of our Wood Products lines; long-term demand fundamentals affecting our businesses; and long-term shareholder value and returns. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often involve use of words and expressions such as "anticipate," "expect," "looking forward," "planned," "will," and similar words and expressions. They may use the positive, negative or another variation of those and similar words and expressions. These forward-looking statements are based on our current expectations and assumptions and are not guarantees of future events or 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, inflation, 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;
• the successful execution of our internal plans and strategic initiatives, including restructuring and cost reduction initiatives;
• our ability to hire and retain capable employees;
• 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 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 as it relates to the cost of pension benefits 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 the accuracy of our estimates of charges related to casualty losses;
• changes in accounting principles; and
• other risks and uncertainties identified in our 2021 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 March 31, 2022:

(millions)		Timberlands		Real Estate & ENR		Wood Products		Unallocated Items		Total
Adjusted EBITDA by Segment:
Net earnings										$771
Interest expense, net of capitalized interest										72
Loss on debt extinguishment(1)										276
Income taxes										209
Net contribution (charge) to earnings		$182		$81		$1,182		$(117)		$1,328
Non-operating pension and other post-employment benefit costs		—		—		—		15		15
Interest income and other		—		—		—		1		1
Operating income (loss)		182		81		1,182		(101)		1,344
Depreciation, depletion and amortization		65		4		51		2		122
Basis of real estate sold		—		31		—		—		31
Adjusted EBITDA		$247		$116		$1,233		$(99)		$1,497

(1)	Loss on debt extinguishment is a pretax special item related to the early extinguishment of $931 million of debt.

 

The table below reconciles Adjusted EBITDA for the quarter ended June 30, 2022:

(millions)		Timberlands		Real Estate & ENR		Wood Products		Unallocated Items		Total
Adjusted EBITDA by Segment:
Net earnings										$788
Interest expense, net of capitalized interest										65
Income taxes										184
Net contribution (charge) to earnings		$153		$65		$863		$(44)		$1,037
Non-operating pension and other post-employment benefit costs		—		—		—		11		11
Interest income and other		—		—		—		(1)		(1)
Operating income (loss)		153		65		863		(34)		1,047
Depreciation, depletion and amortization		66		3		49		1		119
Basis of real estate sold		—		39		—		—		39
Adjusted EBITDA		$219		$107		$912		$(33)		$1,205

 

The table below reconciles Adjusted EBITDA for the quarter ended June 30, 2021:

(millions)		Timberlands		Real Estate & ENR		Wood Products		Unallocated Items		Total
Adjusted EBITDA by Segment:
Net earnings										$1,028
Interest expense, net of capitalized interest										78
Income taxes										324
Net contribution (charge) to earnings		$113		$63		$1,338		$(84)		$1,430
Non-operating pension and other post-employment benefit costs		—		—		—		1		1
Interest income and other		—		—		—		(2)		(2)
Operating income (loss)		113		63		1,338		(85)		1,429
Depreciation, depletion and amortization		67		4		48		1		120
Basis of real estate sold		—		24		—		—		24
Adjusted EBITDA		$180		$91		$1,386		$(84)		$1,573

 

The table below reconciles Adjusted EBITDA for the year-to-date period ended June 30, 2022:

(millions)		Timberlands		Real Estate & ENR		Wood Products		Unallocated Items		Total
Adjusted EBITDA by Segment:
Net earnings										$1,559
Interest expense, net of capitalized interest										137
Loss on debt extinguishment(1)										276
Income taxes										393
Net contribution (charge) to earnings		$335		$146		$2,045		$(161)		$2,365
Non-operating pension and other post-employment benefit costs		—		—		—		26		26
Interest income and other		—		—		—		—		—
Operating income (loss)		335		146		2,045		(135)		2,391
Depreciation, depletion and amortization		131		7		100		3		241
Basis of real estate sold		—		70		—		—		70
Adjusted EBITDA		$466		$223		$2,145		$(132)		$2,702

(1)	Loss on debt extinguishment is a pretax special item related to the early extinguishment of $931 million of debt.

 

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:

		2022		2022		2021
(millions)		Q1		Q2		Q2
Net earnings		$771		$788		$1,028
Loss on debt extinguishment		207		—		—
Net earnings before special items		$978		$788		$1,028

 

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

		2022		2022		2021
		Q1		Q2		Q2
Net earnings per diluted share		$1.03		$1.06		$1.37
Loss on debt extinguishment		0.28		—		—
Net earnings per diluted share before special items		$1.31		$1.06		$1.37

 

RECONCILIATION OF ADJUSTED FAD TO NET CASH FROM OPERATIONS

We reconcile Adjusted FAD to net cash from operations, as that is the most directly comparable U.S. GAAP measure. We believe the measure provides meaningful supplemental information for investors about our liquidity.

The table below reconciles Adjusted FAD to net cash from operations:

		2022		2022		2021		2022
(millions)		Q1		Q2		Q2		Q2 YTD
Net cash from operations		$957		$1,146		$1,308		$2,103
Capital expenditures		(70)		(81)		(72)		(151)
Adjustments to FAD(1)		(37)		—		—		(37)
Adjusted FAD		$850		$1,065		$1,236		$1,915

(1)	Adjustments to FAD include a $37 million product remediation insurance recovery received in first quarter 2022.

 

For more information contact:
Analysts – Andy Taylor (206) 539-3907
Media - Nancy Thompson (919) 861-0342

 

Weyerhaeuser Company																Exhibit 99.2
Q2.2022 Analyst Package
Preliminary results (unaudited)
Consolidated Statement of Operations
		Q1				Q2								Year-to-Date
in millions		March 31, 2022				June 30, 2022				June 30, 2021				June 30, 2022				June 30, 2021
Net sales		$	3,112			$	2,973			$	3,144			$	6,085			$	5,650
Costs of sales			1,647				1,789				1,583				3,436				3,013
Gross margin			1,465				1,184				1,561				2,649				2,637
Selling expenses			23				23				24				46				44
General and administrative expenses			92				102				95				194				185
Other operating costs, net			6				12				13				18				23
Operating income			1,344				1,047				1,429				2,391				2,385
Non-operating pension and other post-employment benefit costs			(15)				(11)				(1)				(26)				(9)
Interest income and other			(1)				1				2				—				3
Interest expense, net of capitalized interest			(72)				(65)				(78)				(137)				(157)
Loss on debt extinguishment			(276)				—				—				(276)				—
Earnings before income taxes			980				972				1,352				1,952				2,222
Income taxes			(209)				(184)				(324)				(393)				(513)
Net earnings		$	771			$	788			$	1,028			$	1,559			$	1,709

 

Per Share Information
		Q1				Q2								Year-to-Date
		March 31, 2022				June 30, 2022				June 30, 2021				June 30, 2022				June 30, 2021
Earnings per share, basic and diluted		$	1.03			$	1.06			$	1.37			$	2.09			$	2.28
Dividends paid per common share		$	1.63			$	0.18			$	0.17			$	1.81			$	0.34
Weighted average shares outstanding (in thousands):
Basic			747,507				744,542				750,127				746,017				749,429
Diluted			748,823				745,582				751,508				747,194				750,773
Common shares outstanding at end of period (in thousands)			745,442				741,738				749,782				741,738				749,782

 

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization (Adjusted EBITDA)
		Q1				Q2								Year-to-Date
in millions		March 31, 2022				June 30, 2022				June 30, 2021				June 30, 2022				June 30, 2021
Net earnings		$	771			$	788			$	1,028			$	1,559			$	1,709
Non-operating pension and other post-employment benefit costs			15				11				1				26				9
Interest income and other			1				(1)				(2)				—				(3)
Interest expense, net of capitalized interest			72				65				78				137				157
Loss on debt extinguishment			276				—				—				276				—
Income taxes			209				184				324				393				513
Operating income			1,344				1,047				1,429				2,391				2,385
Depreciation, depletion and amortization			122				119				120				241				238
Basis of real estate sold			31				39				24				70				51
Adjusted EBITDA(1)		$	1,497			$	1,205			$	1,573			$	2,702			$	2,674

(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.

 

Weyerhaeuser Company														Total Company Statistics
Q2.2022 Analyst Package
Preliminary results (unaudited)
Special Items Included in Net Earnings (Income Tax Affected)
		Q1				Q2								Year-to-Date
in millions		March 31, 2022				June 30, 2022				June 30, 2021				June 30, 2022				June 30, 2021
Net earnings		$	771			$	788			$	1,028			$	1,559			$	1,709
Loss on debt extinguishment(1)			207				—				—				207				—
Net earnings before special items(2)		$	978			$	788			$	1,028			$	1,766			$	1,709
		Q1				Q2								Year-to-Date
		March 31, 2022				June 30, 2022				June 30, 2021				June 30, 2022				June 30, 2021
Net earnings per diluted share		$	1.03			$	1.06			$	1.37			$	2.09			$	2.28
Loss on debt extinguishment(1)			0.28				—				—				0.28				—
Net earnings per diluted share before special items(2)		$	1.31			$	1.06			$	1.37			$	2.37			$	2.28

(1)	We recorded a total pretax loss on debt extinguishment of $276 million ($207 million after-tax) in first quarter 2022.
(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								Year-to-Date
in millions		March 31, 2022				June 30, 2022				June 30, 2021				June 30, 2022				June 30, 2021
Pension and post-employment costs:
Pension and post-employment service costs		$	10			$	8			$	10			$	18			$	21
Non-operating pension and other post-employment benefit costs			15				11				1				26				9
Total company pension and post-employment costs		$	25			$	19			$	11			$	44			$	30

 

Weyerhaeuser Company
Q2.2022 Analyst Package
Preliminary results (unaudited)
Consolidated Balance Sheet
in millions		March 31, 2022				June 30, 2022				December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents		$	1,205			$	1,723			$	1,879
Receivables, net			745				547				507
Receivables for taxes			8				6				24
Inventories			611				571				520
Prepaid expenses and other current assets			206				165				205
Total current assets			2,775				3,012				3,135
Property and equipment, net			2,026				2,000				2,057
Construction in progress			203				233				175
Timber and timberlands at cost, less depletion			11,469				11,706				11,510
Minerals and mineral rights, less depletion			252				248				255
Deferred tax assets			15				11				17
Other assets			376				370				503
Total assets		$	17,116			$	17,580			$	17,652
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable		$	310			$	283			$	281
Accrued liabilities			674				658				673
Total current liabilities			984				941				954
Long-term debt, net			5,053				5,053				5,099
Deferred tax liabilities			66				83				46
Deferred pension and other post-employment benefits			432				347				440
Other liabilities			344				340				346
Total liabilities			6,879				6,764				6,885
Total equity			10,237				10,816				10,767
Total liabilities and equity		$	17,116			$	17,580			$	17,652

 

Weyerhaeuser Company
Q2.2022 Analyst Package
Preliminary results (unaudited)
Consolidated Statement of Cash Flows
		Q1				Q2								Year-to-Date
in millions		March 31, 2022				June 30, 2022				June 30, 2021				June 30, 2022				June 30, 2021
Cash flows from operations:
Net earnings		$	771			$	788			$	1,028			$	1,559			$	1,709
Noncash charges (credits) to earnings:
Depreciation, depletion and amortization			122				119				120				241				238
Basis of real estate sold			31				39				24				70				51
Deferred income taxes, net			14				—				11				14				19
Pension and other post-employment benefits			25				19				11				44				30
Share-based compensation expense			8				9				8				17				15
Loss on debt extinguishment			276				—				—				276				—
Change in:
Receivables, net			(238)				198				(113)				(40)				(252)
Receivables and payables for taxes			110				(83)				116				27				236
Inventories			(87)				29				9				(58)				(51)
Prepaid expenses and other current assets			(1)				(2)				1				(3)				(1)
Accounts payable and accrued liabilities			(62)				47				125				(15)				65
Pension and post-employment benefit contributions and payments			(4)				(10)				(25)				(14)				(33)
Other			(8)				(7)				(7)				(15)				(20)
Net cash from operations		$	957			$	1,146			$	1,308			$	2,103			$	2,006
Cash flows from investing activities:
Capital expenditures for property and equipment		$	(50)			$	(71)			$	(62)			$	(121)			$	(93)
Capital expenditures for timberlands reforestation			(20)				(10)				(10)				(30)				(32)
Acquisition of timberlands			(18)				(265)				(149)				(283)				(149)
Other			1				—				1				1				1
Net cash from investing activities		$	(87)			$	(346)			$	(220)			$	(433)			$	(273)
Cash flows from financing activities:
Cash dividends on common shares		$	(1,218)			$	(134)			$	(128)			$	(1,352)			$	(255)
Net proceeds from issuance of long-term debt			881				—				—				881				—
Payments on long-term debt			(1,203)				—				(225)				(1,203)				(225)
Proceeds from exercise of stock options			12				2				28				14				45
Repurchases of common shares			(118)				(141)				—				(259)				—
Other			(18)				(1)				(2)				(19)				(16)
Net cash from financing activities		$	(1,664)			$	(274)			$	(327)			$	(1,938)			$	(451)
Net change in cash, cash equivalents and restricted cash		$	(794)			$	526			$	761			$	(268)			$	1,282
Cash, cash equivalents and restricted cash at beginning of period			1,999				1,205				1,016				1,999				495
Cash, cash equivalents and restricted cash at end of period		$	1,205			$	1,731			$	1,777			$	1,731			$	1,777
Cash paid during the period for:
Interest, net of amounts capitalized		$	78			$	71			$	79			$	149			$	154
Income taxes, net of refunds		$	85			$	269			$	197			$	354			$	263

 

Weyerhaeuser Company													Timberlands Segment
Q2.2022 Analyst Package
Preliminary results (unaudited)
Segment Statement of Operations
in millions		Q1.2022				Q2.2022				Q2.2021				YTD.2022				YTD.2021
Sales to unaffiliated customers		$	465			$	515			$	405			$	980			$	784
Intersegment sales			161				156				136				317				270
Total net sales			626				671				541				1,297				1,054
Costs of sales			423				495				407				918				790
Gross margin			203				176				134				379				264
General and administrative expenses			24				24				23				48				46
Other operating income, net			(3)				(1)				(2)				(4)				(3)
Operating income and Net contribution to earnings		$	182			$	153			$	113			$	335			$	221
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(1)
in millions		Q1.2022				Q2.2022				Q2.2021				YTD.2022				YTD.2021
Operating income		$	182			$	153			$	113			$	335			$	221
Depreciation, depletion and amortization			65				66				67				131				131
Adjusted EBITDA(1)		$	247			$	219			$	180			$	466			$	352

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

Selected Segment Items
in millions		Q1.2022				Q2.2022				Q2.2021				YTD.2022				YTD.2021
Total decrease (increase) in working capital(2)		$	(34)			$	57			$	2			$	23			$	(11)
Cash spent for capital expenditures(3)		$	(30)			$	(23)			$	(21)			$	(53)			$	(49)

(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.
(3)	Does not include cash spent for the acquisition of timberlands.

 

Segment Statistics(4)
			Q1.2022				Q2.2022				Q2.2021				YTD.2022				YTD.2021
Third Party		Delivered logs:
Net Sales		West	$	259			$	308			$	222			$	567			$	423
(millions)		South		154				160				145				314				276
		North		15				10				9				25				25
		Total delivered logs		428				478				376				906				724
		Stumpage and pay-as-cut timber		9				11				7				20				13
		Recreational and other lease revenue		17				16				16				33				32
		Other revenue		11				10				6				21				15
		Total	$	465			$	515			$	405			$	980			$	784
Delivered Logs		West	$	161.29			$	173.35			$	137.80			$	167.63			$	134.32
Third Party Sales		South	$	37.15			$	38.47			$	35.11			$	37.81			$	34.82
Realizations (per ton)		North	$	72.79			$	83.93			$	74.88			$	76.79			$	66.51
Delivered Logs		West		1,604				1,778				1,608				3,382				3,147
Third Party Sales		South		4,135				4,167				4,150				8,302				7,932
Volumes (tons, thousands)		North		210				118				115				328				376
Fee Harvest Volumes		West		2,240				2,085				2,099				4,325				4,200
(tons, thousands)		South		5,842				6,159				5,856				12,001				11,232
		North		278				180				199				458				536

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

 

Weyerhaeuser Company	Real Estate, Energy & Natural Resources Segment
Q2.2022 Analyst Package
Preliminary results (unaudited)
Segment Statement of Operations
in millions	Q1.2022				Q2.2022				Q2.2021				YTD.2022				YTD.2021
Net sales	$	128			$	117			$	110			$	245			$	216
Costs of sales		41				45				41				86				75
Gross margin		87				72				69				159				141
General and administrative expenses		6				7				6				13				12
Operating income and Net contribution to earnings	$	81			$	65			$	63			$	146			$	129
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(1)
in millions	Q1.2022				Q2.2022				Q2.2021				YTD.2022				YTD.2021
Operating income	$	81			$	65			$	63			$	146			$	129
Depreciation, depletion and amortization		4				3				4				7				7
Basis of real estate sold		31				39				24				70				51
Adjusted EBITDA(1)	$	116			$	107			$	91			$	223			$	187

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

Selected Segment Items

in millions

Q1.2022

Q2.2022

Q2.2021

YTD.2022

YTD.2021

Cash spent for capital expenditures

$

—

$

—

$

—

$

—

$

—

Segment Statistics
			Q1.2022				Q2.2022				Q2.2021				YTD.2022				YTD.2021
Net Sales	Real Estate		$	97			$	90			$	83			$	187			$	167
(millions)	Energy and Natural Resources			31				27				27				58				49
	Total		$	128			$	117			$	110			$	245			$	216
Acres Sold	Real Estate			24,126				26,906				18,415				51,032				37,870
Price per Acre	Real Estate		$	3,785			$	3,215			$	3,227			$	3,484			$	3,523
Basis as a Percent of Real Estate Net Sales	Real Estate			32	%			43	%			29	%			37	%			31	%

 

Weyerhaeuser Company							Wood Products Segment
Q2.2022 Analyst Package
Preliminary results (unaudited)
Segment Statement of Operations
in millions		Q1.2022				Q2.2022				Q2.2021				YTD.2022				YTD.2021
Net sales		$	2,519			$	2,341			$	2,629			$	4,860			$	4,650
Costs of sales			1,276				1,414				1,229				2,690				2,353
Gross margin			1,243				927				1,400				2,170				2,297
Selling expenses			21				21				21				42				40
General and administrative expenses			35				35				35				70				70
Other operating costs, net			5				8				6				13				9
Operating income and Net contribution to earnings		$	1,182			$	863			$	1,338			$	2,045			$	2,178
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(1)
in millions		Q1.2022				Q2.2022				Q2.2021				YTD.2022				YTD.2021
Operating income		$	1,182			$	863			$	1,338			$	2,045			$	2,178
Depreciation, depletion and amortization			51				49				48				100				97
Adjusted EBITDA(1)		$	1,233			$	912			$	1,386			$	2,145			$	2,275

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

Selected Segment Items
in millions		Q1.2022				Q2.2022				Q2.2021				YTD.2022				YTD.2021
Total decrease (increase) in working capital(2)		$	(371)			$	205			$	(49)			$	(166)			$	(261)
Cash spent for capital expenditures		$	(39)			$	(56)			$	(51)			$	(95)			$	(76)

(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			Q1.2022				Q2.2022				Q2.2021				YTD.2022				YTD.2021
Structural Lumber	Third party net sales		$	1,206			$	998			$	1,349			$	2,204			$	2,339
(volumes presented	Third party sales realizations		$	1,041			$	776			$	1,077			$	901			$	975
in board feet)	Third party sales volumes(3)			1,157				1,289				1,252				2,446				2,397
	Production volumes			1,203				1,232				1,234				2,435				2,445
Oriented Strand	Third party net sales		$	564			$	497			$	605			$	1,061			$	1,043
Board	Third party sales realizations		$	787			$	676			$	911			$	731			$	757
(volumes presented	Third party sales volumes(3)			717				735				663				1,452				1,377
in square feet 3/8")	Production volumes			739				758				683				1,497				1,425
Engineered Solid	Third party net sales		$	196			$	247			$	166			$	443			$	308
Section	Third party sales realizations		$	3,433			$	3,863			$	2,533			$	3,660			$	2,412
(volumes presented	Third party sales volumes(3)			5.7				6.4				6.6				12.1				12.8
in cubic feet)	Production volumes			5.7				6.4				6.2				12.1				12.2
Engineered	Third party net sales		$	137			$	168			$	104			$	305			$	187
I-joists	Third party sales realizations		$	2,969			$	3,432			$	1,980			$	3,207			$	1,882
(volumes presented	Third party sales volumes(3)			46				49				53				95				100
in lineal feet)	Production volumes			44				50				51				94				95
Softwood Plywood	Third party net sales		$	58			$	53			$	69			$	111			$	125
(volumes presented	Third party sales realizations		$	783			$	746			$	902			$	765			$	733
in square feet 3/8")	Third party sales volumes(3)			75				70				77				145				171
	Production volumes			66				67				62				133				142
Medium Density	Third party net sales		$	48			$	53			$	43			$	101			$	91
Fiberboard	Third party sales realizations		$	1,082			$	1,174			$	869			$	1,129			$	855
(volumes presented	Third party sales volumes(3)			44				45				50				89				107
in square feet 3/4")	Production volumes			44				48				52				92				108

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

 

Weyerhaeuser Company																				Unallocated Items
Q2.2022 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 post-employment 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		Q1.2022				Q2.2022				Q2.2021				YTD.2022				YTD.2021
Unallocated corporate function and variable compensation expense		$	(31)			$	(36)			$	(36)			$	(67)			$	(61)
Liability classified share-based compensation			1				2				—				3				(1)
Foreign exchange gain (loss)			—				3				(1)				3				(3)
Elimination of intersegment profit in inventory and LIFO			(59)				18				(28)				(41)				(45)
Other, net			(12)				(21)				(20)				(33)				(33)
Operating loss			(101)				(34)				(85)				(135)				(143)
Non-operating pension and other post-employment benefit costs			(15)				(11)				(1)				(26)				(9)
Interest income and other			(1)				1				2				—				3
Net charge to earnings		$	(117)			$	(44)			$	(84)			$	(161)			$	(149)
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(1)
in millions		Q1.2022				Q2.2022				Q2.2021				YTD.2022				YTD.2021
Operating loss		$	(101)			$	(34)			$	(85)			$	(135)			$	(143)
Depreciation, depletion and amortization			2				1				1				3				3
Adjusted EBITDA(1)		$	(99)			$	(33)			$	(84)			$	(132)			$	(140)

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

Unallocated Selected Items
in millions		Q1.2022				Q2.2022				Q2.2021				YTD.2022				YTD.2021
Cash spent for capital expenditures		$	(1)			$	(2)			$	—			$	(3)			$	—

 

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FAQ

What were Weyerhaeuser's net earnings for Q2 2022?

Weyerhaeuser reported net earnings of $788 million for Q2 2022.

How did Weyerhaeuser's Adjusted EBITDA perform in Q2 2022?

Adjusted EBITDA for Q2 2022 was $1.2 billion, down from $1.6 billion in Q2 2021.

What is Weyerhaeuser's outlook for Q3 2022?

Weyerhaeuser expects Q3 2022 earnings before special items and Adjusted EBITDA to be lower than in Q2 2022.

How does Weyerhaeuser's Q2 2022 performance compare to Q2 2021?

Net earnings decreased from $1.0 billion in Q2 2021 to $788 million in Q2 2022.

What is the significance of the timberlands acquisition mentioned in the press release?

The timberlands acquisition is part of Weyerhaeuser's strategy to enhance its portfolio, although no immediate financial impact was detailed.