Weyerhaeuser (WY) 8-K Weyerhaeuser Reports Second Quarter Results

Weyerhaeuser Company										Exhibit 99.2
Q2.2018 Analyst Package
Preliminary results (unaudited)
Consolidated Statement of Operations
in millions	Q1			Q2						Year-to-Date
	March 31, 2018			June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017
Net sales	$	1,865		$	2,065		$	1,808		$	3,930		$	3,501
Cost of products sold	1,348			1,447			1,336			2,795			2,608
Gross margin	517			618			472			1,135			893
Selling expenses	23			23			22			46			44
General and administrative expenses	78			80			76			158			163
Research and development expenses	2			2			4			4			8
Charges for integration and restructuring, closures and asset impairments	2			—			151			2			164
Charges (recoveries) for product remediation, net	(20		)	20			50			—			50
Other operating costs (income), net	28			17			12			45			14
Operating income	404			476			157			880			450
Non-operating pension and other postretirement benefit costs	(24		)	(13		)	(8		)	(37		)	(30		)
Interest income and other	12			11			9			23			18
Interest expense, net of capitalized interest	(93		)	(92		)	(100		)	(185		)	(199		)
Earnings before income taxes	299			382			58			681			239
Income taxes	(30		)	(65		)	(34		)	(95		)	(58		)
Net earnings	$	269		$	317		$	24		$	586		$	181
Per Share Information
	Q1			Q2						Year-to-Date
	March 31, 2018			June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017
Earnings per share, basic and diluted	$	0.35		$	0.42		$	0.03		$	0.77		$	0.24
Dividends paid per common share	$	0.32		$	0.32		$	0.31		$	0.64		$	0.62
Weighted average shares outstanding (in thousands):
Basic	756,815			757,829			752,630			757,317			751,674
Diluted	759,462			760,533			756,451			759,992			755,625
Common shares outstanding at end of period (in thousands)	756,700			757,646			752,711			757,646			752,711
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization (Adjusted EBITDA)*
in millions	Q1			Q2						Year-to-Date
	March 31, 2018			June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017
Net earnings	$	269		$	317		$	24		$	586		$	181
Non-operating pension and other postretirement benefit costs	24			13			8			37			30
Interest income and other	(12		)	(11		)	(9		)	(23		)	(18		)
Interest expense, net of capitalized interest	93			92			100			185			199
Income taxes	30			65			34			95			58
Operating income	404			476			157			880			450
Depreciation, depletion and amortization	120			119			129			239			262
Basis of real estate sold	12			22			10			34			24
Unallocated pension service costs	—			—			—			—			2
Special items	8			20			210			28			222
Adjusted EBITDA*	$	544		$	637		$	506		$	1,181		$	960
*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, 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.

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Weyerhaeuser Company						Total Company Statistics
Q2.2018 Analyst Package
Preliminary results (unaudited)
Special Items Included in Net Earnings (Income Tax Affected)
in millions	Q1			Q2				Year-to-Date
	March 31, 2018			June 30, 2018		June 30, 2017		June 30, 2018		June 30, 2017
Net earnings	$	269		$	317	$	24	$	586	$	181
Plum Creek merger and integration-related costs	—			—		2		—		12
Restructuring, impairment and other charges	—			—		147		—		147
Environmental remediation charges (recoveries)	21			—		—		21		—
Countervailing and antidumping duties charges (credits)(1)	—			—		8		—		8
Product remediation charges (recoveries), net	(15		)	15		31		—		31
Net earnings before special items	$	275		$	332	$	212	$	607	$	379
	Q1			Q2				Year-to-Date
	March 31, 2018			June 30, 2018		June 30, 2017		June 30, 2018		June 30, 2017
Net earnings per diluted share	$	0.35		$	0.42	$	0.03	$	0.77	$	0.24
Plum Creek merger and integration-related costs	—			—		—		—		0.02
Restructuring, impairment and other charges	—			—		0.20		—		0.19
Environmental remediation charges (recoveries)	0.03			—		—		0.03		—
Countervailing and antidumping duties charges (credits)(1)	—			—		0.01		—		0.01
Product remediation charges (recoveries), net	(0.02		)	0.02		0.04		—		0.04
Net earnings per diluted share before special items	$	0.36		$	0.44	$	0.28	$	0.80	$	0.50
(1)As of first quarter 2018, countervailing and antidumping duties are no longer reported as a special item.

Selected Total Company Items
in millions	Q1		Q2				Year-to-Date
	March 31, 2018		June 30, 2018		June 30, 2017		June 30, 2018		June 30, 2017
Pension and postretirement costs:
Pension and postretirement service costs	$	10	$	8	$	7	$	18	$	17
Non-operating pension and other postretirement benefit costs	24		13		8		37		30
Total company pension and postretirement costs	$	34	$	21	$	15	$	55	$	47

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Weyerhaeuser Company
Q2.2018 Analyst Package
Preliminary results (unaudited)
Consolidated Balance Sheet
in millions	March 31, 2018		June 30, 2018		December 31, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	598	$	901	$	824
Receivables, less discounts and allowances	481		491		396
Receivables for taxes	24		23		14
Inventories	445		414		383
Prepaid expenses and other current assets	118		146		98
Current restricted financial investments held by variable interest entities	253		253		—
Total current assets	1,919		2,228		1,715
Property and equipment, net	1,573		1,597		1,618
Construction in progress	275		282		225
Timber and timberlands at cost, less depletion	12,888		12,790		12,954
Minerals and mineral rights, less depletion	306		302		308
Goodwill	40		40		40
Deferred tax assets	244		168		268
Other assets	278		279		316
Restricted financial investments held by variable interest entities	362		362		615
Total assets	$	17,885	$	18,048	$	18,059
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	—	$	—	$	62
Current debt (nonrecourse to the company) held by variable interest entities	209		209		209
Accounts payable	245		270		249
Accrued liabilities	457		543		645
Total current liabilities	911		1,022		1,165
Long-term debt	5,928		5,924		5,930
Long-term debt (nonrecourse to the company) held by variable interest entities	302		302		302
Deferred pension and other postretirement benefits	1,454		1,224		1,487
Other liabilities	299		295		276
Total liabilities	8,894		8,767		9,160
Total equity	8,991		9,281		8,899
Total liabilities and equity	$	17,885	$	18,048	$	18,059

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Weyerhaeuser Company
Q2.2018 Analyst Package
Preliminary results (unaudited)
Consolidated Statements of Cash Flows
in millions	Q1			Q2						Year-to-Date
	March 31, 2018			June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017
Cash flows from operations:
Net earnings	$	269		$	317		$	24		$	586		$	181
Noncash charges (credits) to income:
Depreciation, depletion and amortization	120			119			129			239			262
Basis of real estate sold	12			22			10			34			24
Deferred income taxes, net	10			15			3			25			6
Pension and other postretirement benefits	34			21			15			55			47
Share-based compensation expense	9			9			9			18			19
Charges for impairments of assets	1			—			147			1			147
Change in:
Receivables, less allowances	(83		)	(18		)	(8		)	(101		)	(78		)
Receivables and payables for taxes	5			10			(17		)	15			(53		)
Inventories	(66		)	30			21			(36		)	(7		)
Prepaid expenses	(5		)	4			(4		)	(1		)	(13		)
Accounts payable and accrued liabilities	(173		)	103			192			(70		)	55
Pension and postretirement benefit contributions and payments	(16		)	(16		)	(15		)	(32		)	(37		)
Other	19			(19		)	(17		)	—			(29		)
Net cash from operations	$	136		$	597		$	489		$	733		$	524
Cash flows from investing activities:
Capital expenditures for property and equipment	$	(61	)	$	(83	)	$	(74	)	$	(144	)	$	(126	)
Capital expenditures for timberlands reforestation	(20		)	(14		)	(13		)	(34		)	(36		)
Proceeds from sale of nonstrategic assets	2			—			4			2			12
Other	3			24			45			27			44
Cash from (used in) investing activities	$	(76	)	$	(73	)	$	(38	)	$	(149	)	$	(106	)
Cash flows from financing activities:
Cash dividends on common shares	$	(242	)	$	(243	)	$	(233	)	$	(485	)	$	(466	)
Payments of long-term debt	(62		)	—			—			(62		)	—
Proceeds from exercise of stock options	25			23			26			48			81
Other	(7		)	(1		)	2			(8		)	(8		)
Cash from (used in) financing activities	$	(286	)	$	(221	)	$	(205	)	$	(507	)	$	(393	)
Net change in cash and cash equivalents	$	(226	)	$	303		$	246		$	77		$	25
Cash and cash equivalents at beginning of period	824			598			455			824			676
Cash and cash equivalents at end of period	$	598		$	901		$	701		$	901		$	701
Cash paid during the period for:
Interest, net of amount capitalized	$	105		$	67		$	72		$	172		$	192
Income taxes	$	17		$	41		$	47		$	58		$	106

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Weyerhaeuser Company											Timberlands Segment
Q2.2018 Analyst Package
Preliminary results (unaudited)
Segment Statement of Operations
in millions		Q1.2018			Q2.2018			Q2.2017				YTD.2018			YTD.2017
Sales to unaffiliated customers		$	505		$	482		$	469			$	987		$	955
Intersegment sales		228			185			163				413			365
Total net sales		733			667			632				1,400			1,320
Cost of products sold		526			485			476				1,011			995
Gross margin		207			182			156				389			325
Selling expenses		1			—			1				1			2
General and administrative expenses		23			25			23				48			47
Research and development expenses		2			1			4				3			7
Charges for integration and restructuring, closures and asset impairments		—			—			147				—			147
Other operating costs (income), net		(8		)	(5		)	(7		)		(13		)	(14		)
Operating income and Net contribution to earnings		$	189		$	161		$	(12	)		$	350		$	136
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*
in millions		Q1.2018			Q2.2018			Q2.2017				YTD.2018			YTD.2017
Operating income		$	189		$	161		$	(12	)		$	350		$	136
Depreciation, depletion and amortization		79			79			87				158			181
Special items		—			—			147				—			147
Adjusted EBITDA*		$	268		$	240		$	222			$	508		$	464
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.
Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)
in millions		Q1.2018			Q2.2018			Q2.2017				YTD.2018			YTD.2017
Restructuring, impairment and other charges		$	—		$	—		$	(147	)		$	—		$	(147	)
Selected Segment Items
in millions		Q1.2018			Q2.2018			Q2.2017				YTD.2018			YTD.2017
Total decrease (increase) in working capital(1)		$	(40	)	$	70		$	(5	)		$	30		$	(42	)
Cash spent for capital expenditures		$	(28	)	$	(29	)	$	(25	)		$	(57	)	$	(55	)
(1) Represents the change in prepaid assets, accounts receivable, accounts payable, accrued liabilities and log inventory for the Timberlands and Real Estate & ENR segments combined.
Segment Statistics(2)(3)
		Q1.2018			Q2.2018			Q2.2017				YTD.2018			YTD.2017
Third Party  Net Sales (millions)	Delivered logs:
	West	$	266		$	262		$	227			$	528		$	452
	South	157			158			148				315			296
	North	25			20			16				45			43
	Other	14			7			11				21			31
	Total delivered logs	462			447			402				909			822
	Stumpage and pay-as-cut timber	15			11			17				26			29
	Products from international operations	—			—			21				—			40
	Recreational and other lease revenue	14			15			15				29			29
	Other revenue	14			9			14				23			35
	Total	$	505		$	482		$	469			$	987		$	955
Delivered Logs Third Party Sales Realizations (per ton)	West	$	131.59		$	132.24		$	105.84			$	131.91		$	105.06
	South	$	34.83		$	34.55		$	34.48			$	34.69		$	34.48
	North	$	60.79		$	64.92		$	63.49			$	62.59		$	60.97
Delivered Logs Third Party Sales Volumes (tons, thousands)	West	2,019			1,984			2,143				4,003			4,300
	South	4,510			4,560			4,285				9,070			8,578
	North	404			313			253				717			707
	Other	317			81			292				398			802
Fee Harvest Volumes (tons, thousands)	West	2,443			2,360			2,652				4,803			5,309
	South	6,751			6,630			6,473				13,381			12,846
	North	549			423			383				972			1,005
	Other	—			—			444				—			815
(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 (our management agreement for the Twin Creeks Venture began in April 2016 and terminated in December 2017).
(3) Western logs are primarily transacted in MBF but are converted to ton equivalents for external reporting purposes.

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Weyerhaeuser Company						Real Estate, Energy and Natural Resources Segment
Q2.2018 Analyst Package
Preliminary results (unaudited)
Segment Statement of Operations
in millions		Q1.2018		Q2.2018		Q2.2017			YTD.2018		YTD.2017
Net sales		$	51	$	58	$	46		$	109	$	99
Cost of products sold		19		30		16			49		36
Gross margin		32		28		30			60		63
General and administrative expenses		7		6		7			13		14
Other operating costs (income), net		—		—		—			—		—
Operating income and net contribution to earnings		$	25	$	22	$	23		$	47	$	49
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*
in millions		Q1.2018		Q2.2018		Q2.2017			YTD.2018		YTD.2017
Operating income		$	25	$	22	$	23		$	47	$	49
Depreciation, depletion and amortization		4		3		4			7		7
Basis of real estate sold		12		22		10			34		24
Adjusted EBITDA*		$	41	$	47	$	37		$	88	$	80
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.
Selected Segment Items
in millions		Q1.2018		Q2.2018		Q2.2017			YTD.2018		YTD.2017
Cash spent for capital expenditures		$	—	$	—	$	(1	)	$	—	$	(1	)
Segment Statistics
		Q1.2018		Q2.2018		Q2.2017			YTD.2018		YTD.2017
Net Sales (millions)	Real Estate	$	34	$	38	$	27		$	72	$	64
	Energy and Natural Resources	17		20		19			37		35
	Total	$	51	$	58	$	46		$	109	$	99
Acres Sold	Real Estate	21,771		16,290		10,003			38,061		23,260
Price per Acre	Real Estate	$	1,539	$	2,258	$	2,714		$	1,847	$	2,537

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Weyerhaeuser Company											Wood Products Segment
Q2.2018 Analyst Package
Preliminary results (unaudited)
Segment Statement of Operations
in millions		Q1.2018			Q2.2018			Q2.2017			YTD.2018			YTD.2017
Net sales		$	1,309		$	1,525		$	1,293		$	2,834		$	2,447
Cost of products sold		1,005			1,119			1,002			2,124			1,928
Gross margin		304			406			291			710			519
Selling expenses		21			22			19			43			40
General and administrative expenses		34			31			32			65			64
Research and development expenses		—			1			—			1			1
Charges for integration and restructuring, closures and asset impairments		2			—			2			2			3
Charges (recoveries) for product remediation, net		(20		)	20			—			—			—
Other operating costs (income), net		(3		)	3			61			—			62
Operating income and Net contribution to earnings		$	270		$	329		$	177		$	599		$	349
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*
in millions		Q1.2018			Q2.2018			Q2.2017			YTD.2018			YTD.2017
Operating income		$	270		$	329		$	177		$	599		$	349
Depreciation, depletion and amortization		36			36			36			72			71
Special items		(20		)	20			61			—			61
Adjusted EBITDA*		$	286		$	385		$	274		$	671		$	481
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.
Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)
in millions		Q1.2018			Q2.2018			Q2.2017			YTD.2018			YTD.2017
Countervailing and antidumping duties (charges) credits(1)		$	—		$	—		$	(11	)	$	—		$	(11	)
Product remediation (charges) recoveries, net		20			(20		)	(50		)	—			(50		)
Total		$	20		$	(20	)	$	(61	)	$	—		$	(61	)
(1) As of first quarter 2018, countervailing and antidumping duties are no longer reported as a special item.
Selected Segment Items
in millions		Q1.2018			Q2.2018			Q2.2017			YTD.2018			YTD.2017
Total decrease (increase) in working capital(2)		$	(226	)	$	3		$	113		$	(223	)	$	(9	)
Cash spent for capital expenditures		$	(52	)	$	(68	)	$	(61	)	$	(120	)	$	(105	)
(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		Q1.2018			Q2.2018			Q2.2017			YTD.2018			YTD.2017
Structural Lumber (volumes presented in board feet)	Third party net sales	$	569		$	681		$	538		$	1,250		$	1,016
	Third party sales realizations	$	498		$	541		$	441		$	521		$	427
	Third party sales volumes(3)	1,140			1,261			1,218			2,401			2,376
	Production volumes	1,160			1,180			1,146			2,340			2,298
Engineered Solid Section (volumes presented in cubic feet)	Third party net sales	$	129		$	139		$	130		$	268		$	247
	Third party sales realizations	$	2,088		$	2,156		$	1,979		$	2,123		$	1,931
	Third party sales volumes(3)	6.2			6.4			6.6			12.6			12.8
	Production volumes	6.3			6.4			6.6			12.7			12.9
Engineered I-joists (volumes presented in lineal feet)	Third party net sales	$	78		$	92		$	85		$	170		$	158
	Third party sales realizations	$	1,585		$	1,630		$	1,522		$	1,609		$	1,503
	Third party sales volumes(3)	49			57			57			106			106
	Production volumes	56			52			53			108			103
Oriented Strand Board (volumes presented in square feet 3/8")	Third party net sales	$	232		$	277		$	225		$	509		$	428
	Third party sales realizations	$	314		$	367		$	295		$	341		$	279
	Third party sales volumes(3)	739			754			764			1,493			1,533
	Production volumes	734			747			754			1,481			1,512
Softwood Plywood (volumes presented in square feet 3/8")	Third party net sales	$	50		$	55		$	47		$	105		$	91
	Third party sales realizations	$	438		$	461		$	380		$	450		$	379
	Third party sales volumes(3)	115			118			123			233			241
	Production volumes	97			105			99			202			196
Medium Density Fiberboard (volumes presented in square feet 3/4")	Third party net sales	$	43		$	47		$	51		$	90		$	98
	Third party sales realizations	$	839		$	839		$	845		$	839		$	820
	Third party sales volumes(3)	51			55			60			106			119
	Production volumes	50			57			63			107			119
(3) Volumes include sales of internally produced products and products purchased for resale primarily through our distribution business.

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Weyerhaeuser Company										Unallocated Items
Q2.2018 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 expense, pension and postretirement costs, foreign exchange transaction gains and losses and the elimination of intersegment profit in inventory and LIFO.
Contribution to Earnings
in millions	Q1.2018			Q2.2018			Q2.2017			YTD.2018			YTD.2017
Unallocated corporate function and variable compensation expense	$	(18	)	$	(19	)	$	(17	)	$	(37	)	$	(36	)
Liability classified share-based compensation	—			(2		)	—			(2		)	(6		)
Foreign exchange gains (losses)	(2		)	2			—			—			(3		)
Elimination of intersegment profit in inventory and LIFO	(21		)	3			(3		)	(18		)	(9		)
Charges for integration and restructuring, closures and asset impairments	—			—			(2		)	—			(14		)
Other	(39		)	(20		)	(9		)	(59		)	(16		)
Operating income (loss)	(80		)	(36		)	(31		)	(116		)	(84		)
Non-operating pension and other postretirement benefit (costs) credits	(24		)	(13		)	(8		)	(37		)	(30		)
Interest income and other	12			11			9			23			18
Net contribution to earnings	$	(92	)	$	(38	)	$	(30	)	$	(130	)	$	(96	)
Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*
in millions	Q1.2018			Q2.2018			Q2.2017			YTD.2018			YTD.2017
Operating income (loss)	$	(80	)	$	(36	)	$	(31	)	$	(116	)	$	(84	)
Depreciation, depletion and amortization	1			1			2			2			3
Unallocated pension service costs	—			—			—			—			2
Special items	28			—			2			28			14
Adjusted EBITDA*	$	(51	)	$	(35	)	$	(27	)	$	(86	)	$	(65	)
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.
Unallocated Special Items Included in Net Contribution to Earnings (Pre-Tax)
in millions	Q1.2018			Q2.2018			Q2.2017			YTD.2018			YTD.2017
Plum Creek merger and integration-related costs	$	—		$	—		$	(2	)	$	—		$	(14	)
Environmental remediation insurance (charges) recoveries	(28		)	—			—			(28		)	—
Total	$	(28	)	$	—		$	(2	)	$	(28	)	$	(14	)
Unallocated Selected Items
in millions	Q1.2018			Q2.2018			Q2.2017			YTD.2018			YTD.2017
Cash spent for capital expenditures	$	(1	)	$	—		$	—		$	(1	)	$	(1	)

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