Weyerhaeuser reports third quarter results

Rhea-AI Summary

Weyerhaeuser Company (NYSE: WY) reported Q3 2022 net earnings of $310 million ($0.42 per diluted share) on net sales of $2.3 billion, down from $482 million ($0.64 per diluted share) in Q3 2021. Adjusted EBITDA was $583 million, a decrease from $746 million year-over-year. The decline is attributed to lower sales volumes in timberland, real estate, and wood products due to macroeconomic pressures and operational challenges. For Q4 2022, the company expects further declines in earnings and Adjusted EBITDA amid ongoing market softening.

Positive

• Strong balance sheet with significant cash flow from operations of $1,146 million.
• Year-to-date share repurchases of $404 million demonstrate commitment to returning value to shareholders.

Negative

• Q3 earnings and Adjusted EBITDA significantly lower compared to previous quarters.
• Softening demand leading to decreased sales volumes and realizations across timberland and wood products.
• Q4 2022 outlook indicates expected declines in earnings and Adjusted EBITDA.

• Achieved net earnings of $310 million, or $0.42 per diluted share
• Generated $583 million of Adjusted EBITDA
• Repurchased $404 million of common shares year to date, through the third quarter

SEATTLE, Oct. 27, 2022 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported third quarter net earnings of $310 million, or 42 cents per diluted share, on net sales of $2.3 billion. This compares with net earnings of $482 million, or 64 cents per diluted share, on net sales of $2.3 billion for the same period last year and net earnings of $788 million for the second quarter of 2022. There were no special items in third quarter or second quarter 2022. Net earnings before special items was $450 million for the same period last year.

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

Adjusted EBITDA for the third quarter of 2022 was $583 million compared with $746 million for the same period last year and $1.2 billion for the second quarter of 2022.

"In the third quarter, we delivered solid results across our businesses, despite increasing macroeconomic headwinds," said Devin W. Stockfish, president and chief executive officer. "Although near-term market conditions have moderated, we maintain a constructive longer-term outlook for the demand fundamentals that support our businesses. Looking ahead, our balance sheet is exceptionally strong, and we are well positioned to navigate through a range of market conditions. We remain focused on serving our customers and driving long-term value for our shareholders through an unmatched portfolio of assets, industry-leading performance and disciplined capital allocation."

WEYERHAEUSER FINANCIAL HIGHLIGHTS		2022		2022		2021
(millions, except per share data)		Q2		Q3		Q3
Net sales		$2,973		$2,276		$2,345
Net earnings		$788		$310		$482
Net earnings per diluted share		$1.06		$0.42		$0.64
Weighted average shares outstanding, diluted		746		741		751
Net earnings before special items(1)(2)		$788		$310		$450
Net earnings per diluted share before special items(1)		$1.06		$0.42		$0.60
Adjusted EBITDA(1)		$1,205		$583		$746
Net cash from operations		$1,146		$562		$659
Adjusted FAD(3)		$1,065		$468		$561

(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)		Q2		Q3		Change
Net sales		$671		$574		$(97)
Net contribution to pretax earnings		$153		$107		$(46)
Adjusted EBITDA		$219		$168		$(51)

Q3 2022 Performance – In the West, fee harvest volumes and domestic sales volumes were lower than the second quarter due to the work stoppage that commenced in mid-September, impacting a portion of our operations in the region. Domestic sales realizations were comparable and per unit log and haul costs were lower. Export sales realizations and volumes were significantly lower due to softening demand, and volumes were further affected by a reduction in export activity resulting from the work stoppage. In the South, fee harvest volumes, sales realizations, and per unit log and haul costs were all comparable to the second quarter. Forestry and road costs in the West and South were seasonally higher.

Q4 2022 Outlook – Weyerhaeuser anticipates fourth quarter earnings and Adjusted EBITDA will be significantly lower than third quarter 2022. In the West, the company expects lower fee harvest and sales volumes resulting from the work stoppage. Sales realizations are expected to be significantly lower due to softening demand. The company expects lower per unit log and haul costs and significantly lower forestry and road costs. In the South, fee harvest volumes and forestry and road costs are expected to be slightly higher, and per unit log and haul costs and sales realizations are expected to be comparable.

REAL ESTATE, ENERGY & NATURAL RESOURCES

FINANCIAL HIGHLIGHTS		2022		2022
(millions)		Q2		Q3		Change
Net sales		$117		$68		$(49)
Net contribution to pretax earnings		$65		$48		$(17)
Adjusted EBITDA		$107		$60		$(47)

Q3 2022 Performance – Earnings and Adjusted EBITDA decreased from the second quarter due to lower real estate sales, partially offset by an increase in royalty income from our Energy and Natural Resources business. The number of real estate acres sold decreased significantly due to the timing of transactions, partially offset by an increase in the average price per acre due to the mix of properties sold.

Q4 2022 Outlook – Weyerhaeuser anticipates fourth quarter earnings and Adjusted EBITDA will be lower than third quarter 2022 due to the timing and mix of real estate sales, as well as lower royalty income from our Energy and Natural Resources business. The company still expects full year 2022 Adjusted EBITDA of approximately $325 million and now expects basis as a percentage of real estate sales to be 35 to 40 percent for the full year.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS		2022		2022
(millions)		Q2		Q3		Change
Net sales		$2,341		$1,767		$(574)
Net contribution to pretax earnings		$863		$344		$(519)
Adjusted EBITDA		$912		$395		$(517)

Q3 2022 Performance – Sales realizations for lumber and oriented strand board decreased 28 percent and 41 percent, respectively, compared with second quarter averages. Sales and production volumes for lumber were moderately lower, largely due to the work stoppage at our mills in Washington and Oregon that commenced in mid-September. Unit manufacturing costs were higher, and log costs were moderately lower. Sales and production volumes for oriented strand board were slightly lower due to downtime for planned annual maintenance and transportation challenges in Canada. Unit manufacturing costs were higher, and fiber costs were comparable. Sales realizations were higher for most engineered wood products, while sales and production volumes were lower for most products due to downtime for planned annual maintenance, transportation challenges in Canada and labor constraints. Unit manufacturing costs for engineered wood products were higher, and raw material costs were significantly lower, primarily for oriented strand board webstock.

Q4 2022 Outlook – Weyerhaeuser anticipates fourth quarter earnings and Adjusted EBITDA will be lower than third quarter 2022, excluding the effect of changes in average sales realizations for lumber and oriented strand board. For lumber, the company expects significantly lower log costs, partially offset by lower sales volumes resulting from the work stoppage at our mills in Washington and Oregon. For oriented strand board, the company anticipates slightly higher sales volumes, comparable fiber costs, and significantly lower unit manufacturing costs due to less downtime for planned annual maintenance. Sales volumes and realizations are expected to be lower for most engineered wood products, partially offset by significantly lower raw material costs, primarily for oriented strand board webstock. For distribution, the company expects lower sales volumes and realizations for most products.

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 October 28, 2022 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 28, 2022.

To join the conference call from within North America, dial 1-877-407-0792 (access code: 13724916) at least 15 minutes prior to the call. Those calling from outside North America should dial 201-689-8263 (access code: 13724916). Replays will be available for two weeks at 1-844-512-2921 (access code: 13724916) from within North America, and at 1-412-317-6671 (access code: 13724916) 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; fee harvest and sales volumes and sales realizations for our Timberlands business; log and haul, forestry and road costs and expenses; basis for real estate acres to be sold; sales volumes for our lumber business; sales volumes and unit manufacturing costs for our oriented strand board business; sales realizations and sales volumes for our engineered wood products business; log and raw materials costs for each of our Wood Products lines; sales volumes and sales realizations for our Distribution business; long-term demand fundamentals affecting our businesses; and our future performance through changing market conditions. 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 ahead," "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 and cost 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 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 September 30, 2022:

(millions)		Timberlands		Real Estate & ENR		Wood Products		Unallocated Items		Total
Adjusted EBITDA by Segment:
Net earnings										$310
Interest expense, net of capitalized interest										67
Income taxes										77
Net contribution (charge) to earnings		$107		$48		$344		$(45)		$454
Non-operating pension and other post-employment benefit costs		—		—		—		12		12
Interest income and other		—		—		—		(9)		(9)
Operating income (loss)		107		48		344		(42)		457
Depreciation, depletion and amortization		61		5		51		2		119
Basis of real estate sold		—		7		—		—		7
Adjusted EBITDA		$168		$60		$395		$(40)		$583

 

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

(millions)		Timberlands		Real Estate & ENR		Wood Products		Unallocated Items		Total
Adjusted EBITDA by Segment:
Net earnings										$482
Interest expense, net of capitalized interest										79
Income taxes										84
Net contribution (charge) to earnings		$133		$45		$517		$(50)		$645
Non-operating pension and other post-employment benefit costs		—		—		—		5		5
Interest income and other		—		—		—		(1)		(1)
Operating income (loss)		133		45		517		(46)		649
Depreciation, depletion and amortization		64		4		48		2		118
Basis of real estate sold		—		11		—		—		11
Special items included in operating income (loss)(1)		(32)		—		—		—		(32)
Adjusted EBITDA		$165		$60		$565		$(44)		$746

(1)	Operating income (loss) includes a pretax special item consisting of a $32 million gain on the sale of timberlands.

 

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

(millions)		Timberlands		Real Estate & ENR		Wood Products		Unallocated Items		Total
Adjusted EBITDA by Segment:
Net earnings										$1,869
Interest expense, net of capitalized interest										204
Loss on debt extinguishment(1)										276
Income taxes										470
Net contribution (charge) to earnings		$442		$194		$2,389		$(206)		$2,819
Non-operating pension and other post-employment benefit costs		—		—		—		38		38
Interest income and other		—		—		—		(9)		(9)
Operating income (loss)		442		194		2,389		(177)		2,848
Depreciation, depletion and amortization		192		12		151		5		360
Basis of real estate sold		—		77		—		—		77
Adjusted EBITDA		$634		$283		$2,540		$(172)		$3,285

(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)		Q2		Q3		Q3
Net earnings		$788		$310		$482
Gain on sale of timberlands		—		—		(32)
Net earnings before special items		$788		$310		$450

 

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

		2022		2022		2021
		Q2		Q3		Q3
Net earnings per diluted share		$1.06		$0.42		$0.64
Gain on sale of timberlands		—		—		(0.04)
Net earnings per diluted share before special items		$1.06		$0.42		$0.60

 

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)		Q2		Q3		Q3		Q3 YTD
Net cash from operations		$1,146		$562		$659		$2,665
Capital expenditures		(81)		(94)		(98)		(245)
Adjustments to FAD(1)		—		—		—		(37)
Adjusted FAD		$1,065		$468		$561		$2,383

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

 

Weyerhaeuser Company																							Exhibit 99.2
Q3.2022 Analyst Package     Preliminary results (unaudited)
Consolidated Statement of Operations
		Q1				Q2				Q3								Year-to-Date
in millions		March 31, 2022				June 30, 2022				Sept 30, 2022				Sept 30, 2021				Sept 30, 2022				Sept 30, 2021
Net sales		$	3,112			$	2,973			$	2,276			$	2,345			$	8,361			$	7,995
Costs of sales			1,647				1,789				1,694				1,589				5,130				4,602
Gross margin			1,465				1,184				582				756				3,231				3,393
Selling expenses			23				23				24				24				70				68
General and administrative expenses			92				102				100				98				294				283
Other operating costs (income), net			6				12				1				(15)				19				8
Operating income			1,344				1,047				457				649				2,848				3,034
Non-operating pension and other post-employment benefit costs			(15)				(11)				(12)				(5)				(38)				(14)
Interest income and other			(1)				1				9				1				9				4
Interest expense, net of capitalized interest			(72)				(65)				(67)				(79)				(204)				(236)
Loss on debt extinguishment			(276)				—				—				—				(276)				—
Earnings before income taxes			980				972				387				566				2,339				2,788
Income taxes			(209)				(184)				(77)				(84)				(470)				(597)
Net earnings		$	771			$	788			$	310			$	482			$	1,869			$	2,191

 

Per Share Information
		Q1				Q2				Q3								Year-to-Date
		March 31, 2022				June 30, 2022				Sept 30, 2022				Sept 30, 2021				Sept 30, 2022				Sept 30, 2021
Earnings per share, basic and diluted		$	1.03			$	1.06			$	0.42			$	0.64			$	2.51			$	2.92
Dividends paid per common share		$	1.63			$	0.18			$	0.18			$	0.17			$	1.99			$	0.51
Weighted average shares outstanding (in thousands):
Basic			747,507				744,542				740,058				750,105				743,990				749,657
Diluted			748,823				745,582				740,975				751,443				745,081				750,999
Common shares outstanding at end of period (in thousands)			745,442				741,738				737,547				749,037				737,547				749,037

 

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization (Adjusted EBITDA)
		Q1				Q2				Q3								Year-to-Date
in millions		March 31, 2022				June 30, 2022				Sept 30, 2022				Sept 30, 2021				Sept 30, 2022				Sept 30, 2021
Net earnings		$	771			$	788			$	310			$	482			$	1,869			$	2,191
Non-operating pension and other post-employment benefit costs			15				11				12				5				38				14
Interest income and other			1				(1)				(9)				(1)				(9)				(4)
Interest expense, net of capitalized interest			72				65				67				79				204				236
Loss on debt extinguishment			276				—				—				—				276				—
Income taxes			209				184				77				84				470				597
Operating income			1,344				1,047				457				649				2,848				3,034
Depreciation, depletion and amortization			122				119				119				118				360				356
Basis of real estate sold			31				39				7				11				77				62
Special items included in operating income			—				—				—				(32)				—				(32)
Adjusted EBITDA(1)		$	1,497			$	1,205			$	583			$	746			$	3,285			$	3,420

(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
Q3.2022 Analyst Package Preliminary results (unaudited)
Special Items Included in Net Earnings (Income Tax Affected)
		Q1				Q2				Q3								Year-to-Date
in millions		March 31, 2022				June 30, 2022				Sept 30, 2022				Sept 30, 2021				Sept 30, 2022				Sept 30, 2021
Net earnings		$	771			$	788			$	310			$	482			$	1,869			$	2,191
Gain on sale of timberlands			—				—				—				(32)				—				(32)
Loss on debt extinguishment(1)			207				—				—				—				207				—
Net earnings before special items(2)		$	978			$	788			$	310			$	450			$	2,076			$	2,159

 

		Q1				Q2				Q3								Year-to-Date
		March 31, 2022				June 30, 2022				Sept 30, 2022				Sept 30, 2021				Sept 30, 2022				Sept 30, 2021
Net earnings per diluted share		$	1.03			$	1.06			$	0.42			$	0.64			$	2.51			$	2.92
Gain on sale of timberlands			—				—				—				(0.04)				—				(0.04)
Loss on debt extinguishment(1)			0.28				—				—				—				0.28				—
Net earnings per diluted share before special items(2)		$	1.31			$	1.06			$	0.42			$	0.60			$	2.79			$	2.88

(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				Q3								Year-to-Date
in millions		March 31, 2022				June 30, 2022				Sept 30, 2022				Sept 30, 2021				Sept 30, 2022				Sept 30, 2021
Pension and post-employment costs:
Pension and post-employment service costs		$	10			$	8			$	9			$	11			$	27			$	32
Non-operating pension and other post-employment benefit costs			15				11				12				5				38				14
Total company pension and post-employment costs		$	25			$	19			$	21			$	16			$	65			$	46

 

Weyerhaeuser Company Q3.2022 Analyst Package Preliminary results (unaudited)
Consolidated Balance Sheet
in millions		March 31, 2022				June 30, 2022				September 30, 2022				December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents		$	1,205			$	1,723			$	1,920			$	1,879
Receivables, net			745				547				425				507
Receivables for taxes			8				6				15				24
Inventories			611				571				542				520
Prepaid expenses and other current assets			206				165				146				205
Total current assets			2,775				3,012				3,048				3,135
Property and equipment, net			2,026				2,000				1,997				2,057
Construction in progress			203				233				245				175
Timber and timberlands at cost, less depletion			11,469				11,706				11,681				11,510
Minerals and mineral rights, less depletion			252				248				245				255
Deferred tax assets			15				11				10				17
Other assets			376				370				364				503
Total assets		$	17,116			$	17,580			$	17,590			$	17,652
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt		$	—			$	—			$	118			$	—
Accounts payable			310				283				272				281
Accrued liabilities			674				658				664				673
Total current liabilities			984				941				1,054				954
Long-term debt, net			5,053				5,053				4,935				5,099
Deferred tax liabilities			66				83				89				46
Deferred pension and other post-employment benefits			432				347				335				440
Other liabilities			344				340				339				346
Total liabilities			6,879				6,764				6,752				6,885
Total equity			10,237				10,816				10,838				10,767
Total liabilities and equity		$	17,116			$	17,580			$	17,590			$	17,652

 

Weyerhaeuser Company Q3.2022 Analyst Package Preliminary results (unaudited)
Consolidated Statement of Cash Flows
		Q1				Q2				Q3								Year-to-Date
in millions		March 31, 2022				June 30, 2022				Sept 30, 2022				Sept 30, 2021				Sept 30, 2022				Sept 30, 2021
Cash flows from operations:
Net earnings		$	771			$	788			$	310			$	482			$	1,869			$	2,191
Noncash charges (credits) to earnings:
Depreciation, depletion and amortization			122				119				119				118				360				356
Basis of real estate sold			31				39				7				11				77				62
Deferred income taxes, net			14				—				3				(3)				17				16
Pension and other post-employment benefits			25				19				21				16				65				46
Share-based compensation expense			8				9				8				8				25				23
Gain on sale of timberlands			—				—				—				(32)				—				(32)
Loss on debt extinguishment			276				—				—				—				276				—
Change in:
Receivables, net			(238)				198				121				205				81				(47)
Receivables and payables for taxes			110				(83)				(12)				(143)				15				93
Inventories			(87)				29				28				(4)				(30)				(55)
Prepaid expenses and other current assets			(1)				(2)				(4)				(20)				(7)				(21)
Accounts payable and accrued liabilities			(62)				47				(8)				51				(23)				116
Pension and post-employment benefit contributions and payments			(4)				(10)				(5)				(23)				(19)				(56)
Other			(8)				(7)				(26)				(7)				(41)				(27)
Net cash from operations		$	957			$	1,146			$	562			$	659			$	2,665			$	2,665
Cash flows from investing activities:
Capital expenditures for property and equipment		$	(50)			$	(71)			$	(86)			$	(91)			$	(207)			$	(184)
Capital expenditures for timberlands reforestation			(20)				(10)				(8)				(7)				(38)				(39)
Acquisition of timberlands			(18)				(265)				(3)				—				(286)				(149)
Proceeds from sale of timberlands			—				—				—				261				—				261
Other			1				—				—				2				1				3
Net cash from investing activities		$	(87)			$	(346)			$	(97)			$	165			$	(530)			$	(108)
Cash flows from financing activities:
Cash dividends on common shares		$	(1,218)			$	(134)			$	(133)			$	(127)			$	(1,485)			$	(382)
Net proceeds from issuance of long-term debt			881				—				—				—				881				—
Payments on long-term debt			(1,203)				—				—				—				(1,203)				(225)
Proceeds from exercise of stock options			12				2				1				1				15				46
Repurchases of common shares			(118)				(141)				(143)				(26)				(402)				(26)
Other			(18)				(1)				(1)				(3)				(20)				(19)
Net cash from financing activities		$	(1,664)			$	(274)			$	(276)			$	(155)			$	(2,214)			$	(606)
Net change in cash, cash equivalents and restricted cash		$	(794)			$	526			$	189			$	669			$	(79)			$	1,951
Cash, cash equivalents and restricted cash at beginning of period			1,999				1,205				1,731				1,777				1,999				495
Cash, cash equivalents and restricted cash at end of period		$	1,205			$	1,731			$	1,920			$	2,446			$	1,920			$	2,446
Cash paid during the period for:
Interest, net of amounts capitalized		$	78			$	71			$	62			$	83			$	211			$	237
Income taxes, net of refunds		$	85			$	269			$	92			$	231			$	446			$	494

 

Weyerhaeuser Company																						Timberlands Segment
Q3.2022 Analyst Package Preliminary results (unaudited)
Segment Statement of Operations
in millions		Q1.2022				Q2.2022				Q3.2022				Q3.2021				YTD.2022				YTD.2021
Sales to unaffiliated customers		$	465			$	515			$	441			$	423			$	1,421			$	1,207
Intersegment sales			161				156				133				129				450				399
Total net sales			626				671				574				552				1,871				1,606
Costs of sales			423				495				442				428				1,360				1,218
Gross margin			203				176				132				124				511				388
Selling expenses			—				—				1				1				1				1
General and administrative expenses			24				24				25				23				73				69
Other operating income, net			(3)				(1)				(1)				(33)				(5)				(36)
Operating income and Net contribution to earnings		$	182			$	153			$	107			$	133			$	442			$	354

 

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(1)
in millions		Q1.2022				Q2.2022				Q3.2022				Q3.2021				YTD.2022				YTD.2021
Operating income		$	182			$	153			$	107			$	133			$	442			$	354
Depreciation, depletion and amortization			65				66				61				64				192				195
Special items			—				—				—				(32)				—				(32)
Adjusted EBITDA(1)		$	247			$	219			$	168			$	165			$	634			$	517

(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		Q1.2022				Q2.2022				Q3.2022				Q3.2021				YTD.2022				YTD.2021
Gain on sale of timberlands		$	—			$	—			$	—			$	32			$	—			$	32

 

Selected Segment Items
in millions		Q1.2022				Q2.2022				Q3.2022				Q3.2021				YTD.2022				YTD.2021
Total decrease (increase) in working capital(2)		$	(34)			$	57			$	14			$	1			$	37			$	(10)
Cash spent for capital expenditures(3)		$	(30)			$	(23)			$	(22)			$	(27)			$	(75)			$	(76)

(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				Q3.2022				Q3.2021				YTD.2022				YTD.2021
Third Party		Delivered logs:
Net Sales		West	$	259			$	308			$	224			$	226			$	791			$	649
(millions)		South		154				160				166				153				480				429
		North		15				10				15				13				40				38
		Total delivered logs		428				478				405				392				1,311				1,116
		Stumpage and pay-as-cut timber		9				11				10				9				30				22
		Recreational and other lease revenue		17				16				18				16				51				48
		Other revenue		11				10				8				6				29				21
		Total	$	465			$	515			$	441			$	423			$	1,421			$	1,207
Delivered Logs		West	$	161.29			$	173.35			$	158.59			$	145.64			$	164.97			$	138.06
Third Party Sales		South	$	37.15			$	38.47			$	38.59			$	35.56			$	38.08			$	35.08
Realizations (per ton)		North	$	72.79			$	83.93			$	83.84			$	64.93			$	79.26			$	65.97
Delivered Logs		West		1,604				1,778				1,411				1,555				4,793				4,702
Third Party Sales		South		4,135				4,167				4,310				4,304				12,612				12,236
Volumes (tons, thousands)		North		210				118				177				195				505				571
Fee Harvest Volumes		West		2,240				2,085				1,760				1,930				6,085				6,130
(tons, thousands)		South		5,842				6,159				6,112				5,912				18,113				17,144
		North		278				180				245				264				703				800

(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

Q3.2022 Analyst Package   Preliminary results (unaudited)

Segment Statement of Operations

 

in millions		Q1.2022				Q2.2022				Q3.2022				Q3.2021				YTD.2022				YTD.2021
Net sales		$	128			$	117			$	68			$	69			$	313			$	285
Costs of sales			41				45				14				18				100				93
Gross margin			87				72				54				51				213				192
General and administrative expenses			6				7				6				6				19				18
Operating income and Net contribution to earnings		$	81			$	65			$	48			$	45			$	194			$	174

 

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(1)
in millions		Q1.2022				Q2.2022				Q3.2022				Q3.2021				YTD.2022				YTD.2021
Operating income		$	81			$	65			$	48			$	45			$	194			$	174
Depreciation, depletion and amortization			4				3				5				4				12				11
Basis of real estate sold			31				39				7				11				77				62
Adjusted EBITDA(1)		$	116			$	107			$	60			$	60			$	283			$	247

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

 

Selected Segment Items

in millions

Q1.2022

Q2.2022

Q3.2022

Q3.2021

YTD.2022

YTD.2021

Cash spent for capital expenditures

$

—

$

—

$

—

$

—

$

—

$

—

 

Segment Statistics
			Q1.2022				Q2.2022				Q3.2022				Q3.2021				YTD.2022				YTD.2021
Net Sales	Real Estate		$	97			$	90			$	30			$	45			$	217			$	212
(millions)	Energy and Natural Resources			31				27				38				24				96				73
	Total		$	128			$	117			$	68			$	69			$	313			$	285
Acres Sold	Real Estate			24,126				26,906				5,014				11,037				56,046				48,907
Price per Acre	Real Estate		$	3,785			$	3,215			$	5,046			$	4,005			$	3,624			$	3,632
Basis as a Percent of Real Estate Net Sales	Real Estate			32	%			43	%			23	%			24	%			35	%			29	%

 

Weyerhaeuser Company                                                                                                                                             Wood Products Segment
Q3.2022 Analyst Package Preliminary results (unaudited)
Segment Statement of Operations
in millions		Q1.2022				Q2.2022				Q3.2022				Q3.2021				YTD.2022				YTD.2021
Net sales		$	2,519			$	2,341			$	1,767			$	1,853			$	6,627			$	6,503
Costs of sales			1,276				1,414				1,360				1,270				4,050				3,623
Gross margin			1,243				927				407				583				2,577				2,880
Selling expenses			21				21				22				21				64				61
General and administrative expenses			35				35				36				34				106				104
Other operating costs, net			5				8				5				11				18				20
Operating income and Net contribution to earnings		$	1,182			$	863			$	344			$	517			$	2,389			$	2,695

 

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(1)
in millions		Q1.2022				Q2.2022				Q3.2022				Q3.2021				YTD.2022				YTD.2021
Operating income		$	1,182			$	863			$	344			$	517			$	2,389			$	2,695
Depreciation, depletion and amortization			51				49				51				48				151				145
Adjusted EBITDA(1)		$	1,233			$	912			$	395			$	565			$	2,540			$	2,840

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

 

Selected Segment Items
in millions		Q1.2022				Q2.2022				Q3.2022				Q3.2021				YTD.2022				YTD.2021
Total decrease (increase) in working capital(2)		$	(371)			$	205			$	136			$	249			$	(30)			$	(12)
Cash spent for capital expenditures		$	(39)			$	(56)			$	(68)			$	(70)			$	(163)			$	(146)

(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				Q3.2022				Q3.2021				YTD.2022				YTD.2021
Structural Lumber	Third party net sales		$	1,206			$	998			$	676			$	681			$	2,880			$	3,020
(volumes presented	Third party sales realizations		$	1,041			$	776			$	556			$	516			$	786			$	812
in board feet)	Third party sales volumes(3)			1,157				1,289				1,216				1,320				3,662				3,717
	Production volumes			1,203				1,232				1,140				1,222				3,575				3,667
Oriented Strand	Third party net sales		$	564			$	497			$	287			$	470			$	1,348			$	1,513
Board	Third party sales realizations		$	787			$	676			$	401			$	691			$	622			$	735
(volumes presented	Third party sales volumes(3)			717				735				715				681				2,167				2,058
in square feet 3/8")	Production volumes			739				758				735				715				2,232				2,140
Engineered Solid	Third party net sales		$	196			$	247			$	233			$	183			$	676			$	491
Section	Third party sales realizations		$	3,433			$	3,863			$	3,946			$	3,092			$	3,754			$	2,628
(volumes presented	Third party sales volumes(3)			5.7				6.4				5.9				5.9				18.0				18.7
in cubic feet)	Production volumes			5.7				6.4				6.0				5.8				18.1				18.0
Engineered	Third party net sales		$	137			$	168			$	166			$	128			$	471			$	315
I-joists	Third party sales realizations		$	2,969			$	3,432			$	3,525			$	2,600			$	3,312			$	2,119
(volumes presented	Third party sales volumes(3)			46				49				47				49				142				149
in lineal feet)	Production volumes			44				50				47				49				141				144
Softwood Plywood	Third party net sales		$	58			$	53			$	47			$	45			$	158			$	170
(volumes presented	Third party sales realizations		$	783			$	746			$	632			$	653			$	720			$	710
in square feet 3/8")	Third party sales volumes(3)			75				70				74				69				219				240
	Production volumes			66				67				64				61				197				203
Medium Density	Third party net sales		$	48			$	53			$	50			$	52			$	151			$	143
Fiberboard	Third party sales realizations		$	1,082			$	1,174			$	1,274			$	943			$	1,173			$	885
(volumes presented	Third party sales volumes(3)			44				45				40				55				129				162
in square feet 3/4")	Production volumes			44				48				38				55				130				163

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

 

Weyerhaeuser Company	Unallocated Items
Q3.2022 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				Q3.2022				Q3.2021				YTD.2022				YTD.2021
Unallocated corporate function and variable compensation expense		$	(31)			$	(36)			$	(36)			$	(33)			$	(103)			$	(94)
Liability classified share-based compensation			1				2				2				(1)				5				(2)
Foreign exchange gain			—				3				9				5				12				2
Elimination of intersegment profit in inventory and LIFO			(59)				18				2				12				(39)				(33)
Other, net			(12)				(21)				(19)				(29)				(52)				(62)
Operating loss			(101)				(34)				(42)				(46)				(177)				(189)
Non-operating pension and other post-employment benefit costs			(15)				(11)				(12)				(5)				(38)				(14)
Interest income and other			(1)				1				9				1				9				4
Net charge to earnings		$	(117)			$	(44)			$	(45)			$	(50)			$	(206)			$	(199)

 

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(1)
in millions		Q1.2022				Q2.2022				Q3.2022				Q3.2021				YTD.2022				YTD.2021
Operating loss		$	(101)			$	(34)			$	(42)			$	(46)			$	(177)			$	(189)
Depreciation, depletion and amortization			2				1				2				2				5				5
Adjusted EBITDA(1)		$	(99)			$	(33)			$	(40)			$	(44)			$	(172)			$	(184)

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

 

Unallocated Selected Items
in millions		Q1.2022				Q2.2022				Q3.2022				Q3.2021				YTD.2022				YTD.2021
Cash spent for capital expenditures		$	(1)			$	(2)			$	(4)			$	(1)			$	(7)			$	(1)

 

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

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FAQ

What were Weyerhaeuser's net earnings and sales for Q3 2022?

Weyerhaeuser reported net earnings of $310 million and net sales of $2.3 billion for Q3 2022.

How did Weyerhaeuser's Q3 2022 earnings compare to Q3 2021?

In Q3 2021, Weyerhaeuser had net earnings of $482 million, indicating a decrease of $172 million in Q3 2022.

What is Weyerhaeuser's outlook for Q4 2022 earnings?

Weyerhaeuser anticipates that Q4 2022 earnings and Adjusted EBITDA will be significantly lower than in Q3 2022.

What is the significance of Weyerhaeuser's share repurchase program?

Weyerhaeuser has repurchased $404 million of common shares year to date, reflecting a strong commitment to shareholder value.