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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Weyerhaeuser Company | NYSE:WY | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.41 | -1.30% | 31.05 | 32.01 | 30.81 | 32.01 | 3,616,663 | 01:00:00 |
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Washington
|
|
91-0470860
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification Number)
|
|
|
|
220 Occidental Avenue South
Seattle, Washington
|
|
98104-7800
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
PART I
|
FINANCIAL INFORMATION
|
|
ITEM 1.
|
FINANCIAL STATEMENTS:
|
|
|
||
|
||
|
||
|
||
|
||
|
||
ITEM 2.
|
||
ITEM 3.
|
||
ITEM 4.
|
||
|
|
|
PART II
|
OTHER INFORMATION
|
|
ITEM 1.
|
||
ITEM 1A.
|
||
ITEM 2.
|
||
ITEM 3.
|
||
ITEM 4.
|
||
ITEM 5.
|
||
ITEM 6.
|
||
|
|
QUARTER ENDED
|
|
YEAR-TO-DATE ENDED
|
||||||||||||
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
||||||||
Net sales
(Note 3)
|
$
|
1,910
|
|
|
$
|
1,872
|
|
|
$
|
5,840
|
|
|
$
|
5,373
|
|
Costs of products sold
|
1,452
|
|
|
1,374
|
|
|
4,247
|
|
|
3,982
|
|
||||
Gross margin
|
458
|
|
|
498
|
|
|
1,593
|
|
|
1,391
|
|
||||
Selling expenses
|
20
|
|
|
22
|
|
|
66
|
|
|
66
|
|
||||
General and administrative expenses
|
78
|
|
|
75
|
|
|
236
|
|
|
238
|
|
||||
Research and development expenses
|
2
|
|
|
4
|
|
|
6
|
|
|
12
|
|
||||
Charges for integration and restructuring, closures and asset impairments
(Note 15)
|
—
|
|
|
14
|
|
|
2
|
|
|
178
|
|
||||
Charges (recoveries) for product remediation, net
(Note 16)
|
—
|
|
|
190
|
|
|
—
|
|
|
240
|
|
||||
Other operating costs (income), net
(Note 17)
|
21
|
|
|
(12
|
)
|
|
66
|
|
|
2
|
|
||||
Operating income
|
337
|
|
|
205
|
|
|
1,217
|
|
|
655
|
|
||||
Non-operating pension and other postretirement benefit costs
|
(17
|
)
|
|
(16
|
)
|
|
(54
|
)
|
|
(46
|
)
|
||||
Interest income and other
|
13
|
|
|
12
|
|
|
36
|
|
|
30
|
|
||||
Interest expense, net of capitalized interest
|
(93
|
)
|
|
(98
|
)
|
|
(278
|
)
|
|
(297
|
)
|
||||
Earnings before income taxes
|
240
|
|
|
103
|
|
|
921
|
|
|
342
|
|
||||
Income taxes
(Note 18)
|
15
|
|
|
27
|
|
|
(80
|
)
|
|
(31
|
)
|
||||
Net earnings
|
$
|
255
|
|
|
$
|
130
|
|
|
$
|
841
|
|
|
$
|
311
|
|
Earnings per share, basic and diluted
(Note 5)
|
$
|
0.34
|
|
|
$
|
0.17
|
|
|
$
|
1.11
|
|
|
$
|
0.41
|
|
Dividends paid per share
|
$
|
0.34
|
|
|
$
|
0.31
|
|
|
$
|
0.98
|
|
|
$
|
0.93
|
|
Weighted average shares outstanding (in thousands)
(Note 5)
:
|
|
|
|
|
|
|
|
||||||||
Basic
|
754,986
|
|
|
753,535
|
|
|
756,531
|
|
|
752,301
|
|
||||
Diluted
|
757,389
|
|
|
756,903
|
|
|
759,116
|
|
|
756,058
|
|
|
QUARTER ENDED
|
|
YEAR-TO-DATE ENDED
|
||||||||||||
DOLLAR AMOUNTS IN MILLIONS
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
||||||||
Net earnings
|
$
|
255
|
|
|
$
|
130
|
|
|
$
|
841
|
|
|
$
|
311
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
15
|
|
|
24
|
|
|
(16
|
)
|
|
35
|
|
||||
Changes in unamortized actuarial loss, net of tax of $12, $12, $94, and $62
|
38
|
|
|
18
|
|
|
291
|
|
|
90
|
|
||||
Changes in unamortized net prior service credit, net of tax of $0, $0, $1, and $1
|
(2
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(5
|
)
|
||||
Unrealized gains on available-for-sale securities
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
||||
Total other comprehensive income
|
51
|
|
|
42
|
|
|
272
|
|
|
122
|
|
||||
Total comprehensive income
|
$
|
306
|
|
|
$
|
172
|
|
|
$
|
1,113
|
|
|
$
|
433
|
|
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA
|
SEPTEMBER 30,
2018 |
|
DECEMBER 31,
2017 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
348
|
|
|
$
|
824
|
|
Receivables, less discounts and allowances of $1 and $1
|
444
|
|
|
396
|
|
||
Receivables for taxes
|
140
|
|
|
14
|
|
||
Inventories
(Note 6)
|
389
|
|
|
383
|
|
||
Prepaid expenses and other current assets
|
140
|
|
|
98
|
|
||
Current restricted financial investments held by variable interest entities
(Note 7)
|
253
|
|
|
—
|
|
||
Total current assets
|
1,714
|
|
|
1,715
|
|
||
Property and equipment, less accumulated depreciation of $3,411 and $3,338
|
1,672
|
|
|
1,618
|
|
||
Construction in progress
|
255
|
|
|
225
|
|
||
Timber and timberlands at cost, less depletion
|
12,727
|
|
|
12,954
|
|
||
Minerals and mineral rights, less depletion
|
297
|
|
|
308
|
|
||
Goodwill
|
40
|
|
|
40
|
|
||
Deferred tax assets
|
71
|
|
|
268
|
|
||
Other assets
|
289
|
|
|
316
|
|
||
Restricted financial investments held by variable interest entities
(Note 7)
|
362
|
|
|
615
|
|
||
Total assets
|
$
|
17,427
|
|
|
$
|
18,059
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current maturities of long-term debt
(Note 10)
|
$
|
—
|
|
|
$
|
62
|
|
Current debt (nonrecourse to the company) held by variable interest entities
(Note 7)
|
511
|
|
|
209
|
|
||
Accounts payable
|
271
|
|
|
249
|
|
||
Accrued liabilities
(Note 9)
|
491
|
|
|
645
|
|
||
Total current liabilities
|
1,273
|
|
|
1,165
|
|
||
Long-term debt
(Note 10)
|
5,921
|
|
|
5,930
|
|
||
Long-term debt (nonrecourse to the company) held by variable interest entities
(Note 7)
|
—
|
|
|
302
|
|
||
Deferred pension and other postretirement benefits
(Note 8)
|
885
|
|
|
1,487
|
|
||
Other liabilities
|
291
|
|
|
276
|
|
||
Total liabilities
|
8,370
|
|
|
9,160
|
|
||
Commitments and contingencies
(Note 12)
|
|
|
|
|
|||
|
|
|
|
||||
Equity:
|
|
|
|
||||
Common shares: $1.25 par value; authorized 1,360,000,000 shares; issued and outstanding: 749,198,651 shares at September 30, 2018 and 755,222,727 shares at December 31, 2017
|
936
|
|
|
944
|
|
||
Other capital
|
8,234
|
|
|
8,439
|
|
||
Retained earnings
|
1,439
|
|
|
1,078
|
|
||
Accumulated other comprehensive loss
(Note 13)
|
(1,552
|
)
|
|
(1,562
|
)
|
||
Total equity
|
9,057
|
|
|
8,899
|
|
||
Total liabilities and equity
|
$
|
17,427
|
|
|
$
|
18,059
|
|
|
YEAR-TO-DATE ENDED
|
||||||
DOLLAR AMOUNTS IN MILLIONS
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
||||
Cash flows from operations:
|
|
|
|
||||
Net earnings
|
$
|
841
|
|
|
$
|
311
|
|
Noncash charges to earnings:
|
|
|
|
||||
Depreciation, depletion and amortization
|
361
|
|
|
394
|
|
||
Basis of real estate sold
|
80
|
|
|
48
|
|
||
Deferred income taxes, net
|
111
|
|
|
9
|
|
||
Pension and other postretirement benefits
(Note 8)
|
82
|
|
|
72
|
|
||
Share-based compensation expense
|
31
|
|
|
29
|
|
||
Charges for impairment of assets
(Note 15)
|
1
|
|
|
153
|
|
||
Change in:
|
|
|
|
||||
Receivables, less allowances
|
(55
|
)
|
|
(113
|
)
|
||
Receivables and payables for taxes
|
(109
|
)
|
|
(116
|
)
|
||
Inventories
|
(9
|
)
|
|
4
|
|
||
Prepaid expenses
|
(7
|
)
|
|
(9
|
)
|
||
Accounts payable and accrued liabilities
|
(133
|
)
|
|
184
|
|
||
Pension and postretirement benefit contributions and payments
|
(355
|
)
|
|
(59
|
)
|
||
Other
|
(19
|
)
|
|
(60
|
)
|
||
Net cash from operations
|
820
|
|
|
847
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures for property and equipment
|
(238
|
)
|
|
(213
|
)
|
||
Capital expenditures for timberlands reforestation
|
(45
|
)
|
|
(46
|
)
|
||
Proceeds from sale of assets and operations
|
2
|
|
|
423
|
|
||
Other
|
17
|
|
|
28
|
|
||
Net cash from (used in) investing activities
|
(264
|
)
|
|
192
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Cash dividends on common shares
|
(741
|
)
|
|
(699
|
)
|
||
Proceeds from issuance of long-term debt
(Note 10)
|
—
|
|
|
225
|
|
||
Payments of long-term debt
(Note 10)
|
(62
|
)
|
|
(831
|
)
|
||
Proceeds from borrowings on line of credit
(Note 10)
|
—
|
|
|
100
|
|
||
Payments on line of credit
(Note 10)
|
—
|
|
|
(100
|
)
|
||
Repurchases of common shares
(Note 5)
|
(273
|
)
|
|
—
|
|
||
Proceeds from exercise of stock options
|
52
|
|
|
89
|
|
||
Other
|
(8
|
)
|
|
(2
|
)
|
||
Net cash used in financing activities
|
(1,032
|
)
|
|
(1,218
|
)
|
||
Net change in cash and cash equivalents
|
(476
|
)
|
|
(179
|
)
|
||
Cash and cash equivalents at beginning of period
|
824
|
|
|
676
|
|
||
Cash and cash equivalents at end of period
|
$
|
348
|
|
|
$
|
497
|
|
Cash paid during the period for:
|
|
|
|
||||
Interest, net of amount capitalized of $8 and $6
|
$
|
285
|
|
|
$
|
315
|
|
Income taxes
|
$
|
80
|
|
|
$
|
129
|
|
NOTE 1:
|
||
|
|
|
NOTE 2:
|
||
|
|
|
NOTE 3:
|
||
|
|
|
NOTE 4:
|
||
|
|
|
NOTE 5:
|
||
|
|
|
NOTE 6:
|
||
|
|
|
NOTE 7:
|
||
|
|
|
NOTE 8:
|
||
|
|
|
NOTE 9:
|
||
|
|
|
NOTE 10:
|
||
|
|
|
NOTE 11:
|
||
|
|
|
NOTE 12:
|
||
|
|
|
NOTE 13:
|
||
|
|
|
NOTE 14:
|
||
|
|
|
NOTE 15:
|
||
|
|
|
NOTE 16:
|
||
|
|
|
NOTE 17:
|
||
|
|
|
NOTE 18:
|
•
|
majority-owned domestic and foreign subsidiaries and
|
•
|
variable interest entities in which we are the primary beneficiary.
|
•
|
Timberlands – which includes logs, timber and leased recreational access;
|
•
|
Real Estate & ENR – which includes sales of timberlands; rights to explore for and extract hard minerals, oil and gas production and coal; and equity interests in our Real Estate Development Ventures; and
|
•
|
Wood Products – which includes softwood lumber, engineered wood products, structural panels, medium density fiberboard and building materials distribution.
|
|
QUARTER ENDED
|
|
YEAR-TO-DATE ENDED
|
||||||||||||
DOLLAR AMOUNTS IN MILLIONS
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
||||||||
Sales to unaffiliated customers:
|
|
|
|
|
|
|
|
||||||||
Timberlands
|
$
|
468
|
|
|
$
|
491
|
|
|
$
|
1,455
|
|
|
$
|
1,446
|
|
Real Estate & ENR
|
96
|
|
|
82
|
|
|
205
|
|
|
181
|
|
||||
Wood Products
|
1,346
|
|
|
1,299
|
|
|
4,180
|
|
|
3,746
|
|
||||
|
1,910
|
|
|
1,872
|
|
|
5,840
|
|
|
5,373
|
|
||||
Intersegment sales:
|
|
|
|
|
|
|
|
||||||||
Timberlands
|
185
|
|
|
179
|
|
|
598
|
|
|
544
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Total sales
|
2,095
|
|
|
2,051
|
|
|
6,438
|
|
|
5,917
|
|
||||
Intersegment eliminations
|
(185
|
)
|
|
(179
|
)
|
|
(598
|
)
|
|
(544
|
)
|
||||
Total
|
$
|
1,910
|
|
|
$
|
1,872
|
|
|
$
|
5,840
|
|
|
$
|
5,373
|
|
Net contribution to earnings:
|
|
|
|
|
|
|
|
||||||||
Timberlands
(1)
|
$
|
126
|
|
|
$
|
131
|
|
|
$
|
476
|
|
|
$
|
267
|
|
Real Estate & ENR
|
36
|
|
|
47
|
|
|
83
|
|
|
96
|
|
||||
Wood Products
(2)
|
213
|
|
|
40
|
|
|
812
|
|
|
389
|
|
||||
|
375
|
|
|
218
|
|
|
1,371
|
|
|
752
|
|
||||
Unallocated items
(3)
|
(42
|
)
|
|
(17
|
)
|
|
(172
|
)
|
|
(113
|
)
|
||||
Net contribution to earnings
|
333
|
|
|
201
|
|
|
1,199
|
|
|
639
|
|
||||
Interest expense, net of capitalized interest
|
(93
|
)
|
|
(98
|
)
|
|
(278
|
)
|
|
(297
|
)
|
||||
Earnings before income taxes
|
240
|
|
|
103
|
|
|
921
|
|
|
342
|
|
||||
Income taxes
|
15
|
|
|
27
|
|
|
(80
|
)
|
|
(31
|
)
|
||||
Net earnings
|
$
|
255
|
|
|
$
|
130
|
|
|
$
|
841
|
|
|
$
|
311
|
|
(1)
|
Net contribution to earnings for the Timberlands segment includes a noncash pretax impairment charge of
$147 million
, recorded during second quarter 2017. This impairment was a result of our agreement to sell our Uruguayan operations, as announced during June 2017. Refer to
Note 15: Charges for Integration and Restructuring, Closures and Asset Impairments
.
|
(2)
|
Net contribution to earnings for the Wood Products segment includes a
$25 million
recovery and a
$25 million
charge recorded in the year-to-date period ended September 30, 2018, and
$190 million
and
$240 million
charges recorded in the quarter and year-to-date period ended September 30, 2017, respectively. We did not receive any insurance recoveries or record additional charges in third quarter 2018. These changes were recorded to accrue for estimated costs to remediate an issue with certain I-joists coated with our former Flak Jacket® Protection product. Refer to
Note 16: Charges (Recoveries) for Product Remediation, Net
for additional details.
|
(3)
|
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 expenses, pension and postretirement costs, foreign exchange transaction gains and losses and the elimination of intersegment profit in inventory and LIFO.
|
|
QUARTER ENDED
|
|
YEAR-TO-DATE ENDED
|
||||||||||||
DOLLAR AMOUNTS IN MILLIONS
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
||||||||
Timberlands Segment
|
|
|
|
|
|
|
|
||||||||
Delivered logs
(1)
:
|
|
|
|
|
|
|
|
||||||||
West
|
|
|
|
|
|
|
|
||||||||
Domestic sales
|
$
|
125
|
|
|
$
|
102
|
|
|
$
|
398
|
|
|
$
|
347
|
|
Export sales
|
113
|
|
|
119
|
|
|
368
|
|
|
326
|
|
||||
Subtotal West
|
238
|
|
|
221
|
|
|
766
|
|
|
673
|
|
||||
South
|
157
|
|
|
155
|
|
|
472
|
|
|
451
|
|
||||
North
|
25
|
|
|
25
|
|
|
70
|
|
|
68
|
|
||||
Other
|
9
|
|
|
17
|
|
|
30
|
|
|
48
|
|
||||
Subtotal delivered logs sales
|
429
|
|
|
418
|
|
|
1,338
|
|
|
1,240
|
|
||||
Stumpage and pay-as-cut timber
|
13
|
|
|
23
|
|
|
39
|
|
|
52
|
|
||||
Recreational and other lease revenue
|
15
|
|
|
16
|
|
|
44
|
|
|
45
|
|
||||
Other
(2)
|
11
|
|
|
34
|
|
|
34
|
|
|
109
|
|
||||
Net sales attributable to Timberlands segment
|
468
|
|
|
491
|
|
|
1,455
|
|
|
1,446
|
|
||||
Real Estate & ENR Segment
|
|
|
|
|
|
|
|
||||||||
Real estate
|
76
|
|
|
64
|
|
|
148
|
|
|
128
|
|
||||
Energy and natural resources
|
20
|
|
|
18
|
|
|
57
|
|
|
53
|
|
||||
Net sales attributable to Real Estate & ENR segment
|
96
|
|
|
82
|
|
|
205
|
|
|
181
|
|
||||
Wood Products Segment
|
|
|
|
|
|
|
|
||||||||
Structural lumber
|
581
|
|
|
525
|
|
|
1,831
|
|
|
1,541
|
|
||||
Engineered solid section
|
132
|
|
|
131
|
|
|
400
|
|
|
378
|
|
||||
Engineered I-joists
|
91
|
|
|
93
|
|
|
261
|
|
|
251
|
|
||||
Oriented strand board
|
215
|
|
|
243
|
|
|
724
|
|
|
671
|
|
||||
Softwood plywood
|
53
|
|
|
45
|
|
|
158
|
|
|
136
|
|
||||
Medium density fiberboard
|
48
|
|
|
48
|
|
|
138
|
|
|
146
|
|
||||
Complementary building products
|
152
|
|
|
146
|
|
|
449
|
|
|
417
|
|
||||
Other
|
74
|
|
|
68
|
|
|
219
|
|
|
206
|
|
||||
Net sales attributable to Wood Products segment
|
1,346
|
|
|
1,299
|
|
|
4,180
|
|
|
3,746
|
|
||||
Total net sales
|
$
|
1,910
|
|
|
$
|
1,872
|
|
|
$
|
5,840
|
|
|
$
|
5,373
|
|
(1)
|
The West region includes Washington and Oregon. The South region includes Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas and Oklahoma. The North region includes West Virginia, Maine, New Hampshire, Vermont, Michigan, Wisconsin and Montana. Other includes our Canadian operations and former Twin Creeks Venture (terminated in December 2017).
|
(2)
|
Other Timberlands sales include sales of seeds and seedlings, chips, as well as sales from our former Uruguayan operations (sold during third quarter 2017). Our former Uruguayan operations included logs, plywood and hardwood lumber harvested or produced. Refer to
Note 4: Operations Divested
for further information.
|
•
|
$0.34
during
third
quarter
2018
and
$1.11
during year-to-date 2018;
|
•
|
$0.17
during
third
quarter
2017
and
$0.41
during year-to-date 2017.
|
|
QUARTER ENDED
|
|
YEAR-TO-DATE ENDED
|
||||||||
SHARES IN THOUSANDS
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
||||
Weighted average common shares outstanding – basic
|
754,986
|
|
|
753,535
|
|
|
756,531
|
|
|
752,301
|
|
Dilutive potential common shares:
|
|
|
|
|
|
|
|
||||
Stock options
|
1,370
|
|
|
2,437
|
|
|
1,560
|
|
|
2,754
|
|
Restricted stock units
|
629
|
|
|
551
|
|
|
570
|
|
|
529
|
|
Performance share units
|
404
|
|
|
380
|
|
|
455
|
|
|
474
|
|
Total effect of outstanding dilutive potential common shares
|
2,403
|
|
|
3,368
|
|
|
2,585
|
|
|
3,757
|
|
Weighted average common shares outstanding – dilutive
|
757,389
|
|
|
756,903
|
|
|
759,116
|
|
|
756,058
|
|
|
QUARTER ENDED
|
|
YEAR-TO-DATE ENDED
|
||||||||
SHARES IN THOUSANDS
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
||||
Stock options
|
1,166
|
|
|
1,381
|
|
|
1,166
|
|
|
1,381
|
|
Performance share units
|
830
|
|
|
556
|
|
|
830
|
|
|
556
|
|
DOLLAR AMOUNTS IN MILLIONS
|
SEPTEMBER 30,
2018 |
|
DECEMBER 31,
2017 |
||||
LIFO inventories:
|
|
|
|
|
|
||
Logs
|
$
|
16
|
|
|
$
|
17
|
|
Lumber, plywood, panels and fiberboard
|
63
|
|
|
66
|
|
||
Other products
|
13
|
|
|
10
|
|
||
FIFO or moving average cost inventories:
|
|
|
|
|
|
||
Logs
|
21
|
|
|
38
|
|
||
Lumber, plywood, panels, fiberboard and engineered wood products
|
107
|
|
|
91
|
|
||
Other products
|
80
|
|
|
77
|
|
||
Materials and supplies
|
89
|
|
|
84
|
|
||
Total
|
$
|
389
|
|
|
$
|
383
|
|
|
PENSION
|
||||||||||||||
|
QUARTER ENDED
|
|
YEAR-TO-DATE ENDED
|
||||||||||||
DOLLAR AMOUNTS IN MILLIONS
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
||||||||
Service cost
|
$
|
10
|
|
|
$
|
9
|
|
|
$
|
28
|
|
|
$
|
26
|
|
Interest cost
|
58
|
|
|
66
|
|
|
177
|
|
|
198
|
|
||||
Expected return on plan assets
|
(100
|
)
|
|
(101
|
)
|
|
(300
|
)
|
|
(306
|
)
|
||||
Amortization of actuarial loss
|
56
|
|
|
48
|
|
|
169
|
|
|
145
|
|
||||
Amortization of prior service cost
|
1
|
|
|
1
|
|
|
3
|
|
|
3
|
|
||||
Total net periodic benefit cost - pension
|
$
|
25
|
|
|
$
|
23
|
|
|
$
|
77
|
|
|
$
|
66
|
|
|
OTHER POSTRETIREMENT BENEFITS
|
||||||||||||||
|
QUARTER ENDED
|
|
YEAR-TO-DATE ENDED
|
||||||||||||
DOLLAR AMOUNTS IN MILLIONS
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
||||||||
Interest cost
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
6
|
|
Amortization of actuarial loss
|
2
|
|
|
2
|
|
|
6
|
|
|
6
|
|
||||
Amortization of prior service credit
|
(2
|
)
|
|
(2
|
)
|
|
(6
|
)
|
|
(6
|
)
|
||||
Total net periodic benefit cost - other postretirement benefits
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
6
|
|
•
|
be required to contribute approximately
$24 million
for our Canadian registered plan;
|
•
|
be required to contribute or make benefit payments for our Canadian nonregistered plans of
$2 million
;
|
•
|
make benefit payments of
$19 million
for our U.S. nonqualified pension plans; and
|
•
|
make benefit payments of
$19 million
for our U.S. and Canadian other postretirement plans.
|
DOLLAR AMOUNTS IN MILLIONS
|
SEPTEMBER 30,
2018 |
|
DECEMBER 31,
2017 |
||||
Accrued compensation and employee benefit costs
|
$
|
184
|
|
|
$
|
223
|
|
Accrued taxes payable
|
40
|
|
|
43
|
|
||
Customer rebates, volume discounts and deferred income
|
110
|
|
|
96
|
|
||
Interest
|
84
|
|
|
111
|
|
||
Product remediation accrual
|
4
|
|
|
98
|
|
||
Other
|
69
|
|
|
74
|
|
||
Total
|
$
|
491
|
|
|
$
|
645
|
|
|
SEPTEMBER 30,
2018 |
|
DECEMBER 31,
2017 |
||||||||||||
DOLLAR AMOUNTS IN MILLIONS
|
CARRYING
VALUE
|
|
FAIR VALUE
(LEVEL 2)
|
|
CARRYING
VALUE
|
|
FAIR VALUE
(LEVEL 2)
|
||||||||
Long-term debt (including current maturities)
(1)
:
|
|
|
|
|
|
|
|
||||||||
Fixed rate
|
$
|
5,697
|
|
|
$
|
6,378
|
|
|
$
|
5,768
|
|
|
$
|
6,823
|
|
Variable rate
|
224
|
|
|
225
|
|
|
224
|
|
|
225
|
|
||||
Total debt
|
$
|
5,921
|
|
|
$
|
6,603
|
|
|
$
|
5,992
|
|
|
$
|
7,048
|
|
(1)
|
Excludes nonrecourse debt held by our Variable Interest Entities (VIEs).
|
•
|
market approach – based on quoted market prices we received for the same types and issues of our debt; or
|
•
|
income approach – based on the discounted value of the future cash flows using market yields for the same type and comparable issues of debt.
|
•
|
are a party to various proceedings related to the cleanup of hazardous waste sites and
|
•
|
have been notified that we may be a potentially responsible party related to the cleanup of other hazardous waste sites for which proceedings have not yet been initiated.
|
|
|
|
PENSION
|
|
OTHER POSTRETIREMENT BENEFITS
|
|
|
|
|
||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS
|
Foreign currency translation adjustments
|
|
Actuarial loss
|
Prior service cost
|
|
Actuarial loss
|
Prior service credit
|
|
Unrealized gains on available-for-sale securities
|
|
Total
|
||||||||||||||
Beginning balance as of December 31, 2017
|
$
|
264
|
|
|
$
|
(1,802
|
)
|
$
|
(8
|
)
|
|
$
|
(48
|
)
|
$
|
23
|
|
|
$
|
9
|
|
|
$
|
(1,562
|
)
|
Other comprehensive income (loss) before reclassifications
(1)
|
(16
|
)
|
|
159
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
143
|
|
|||||||
Amounts reclassified from accumulated other comprehensive loss to earnings
(1)(2)
|
—
|
|
|
127
|
|
1
|
|
|
5
|
|
(4
|
)
|
|
—
|
|
|
129
|
|
|||||||
Total other comprehensive income (loss)
|
(16
|
)
|
|
286
|
|
1
|
|
|
5
|
|
(4
|
)
|
|
—
|
|
|
272
|
|
|||||||
Reclassification of certain tax effects due to tax law changes
(3)
|
—
|
|
|
(245
|
)
|
(1
|
)
|
|
(12
|
)
|
5
|
|
|
—
|
|
|
(253
|
)
|
|||||||
Reclassification of accumulated unrealized gains on available-for-sale securities
(4)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
|||||||
Net amounts reclassified from accumulated other comprehensive loss to retained earnings
|
—
|
|
|
(245
|
)
|
(1
|
)
|
|
(12
|
)
|
5
|
|
|
(9
|
)
|
|
(262
|
)
|
|||||||
Ending balance as of September 30, 2018
|
$
|
248
|
|
|
$
|
(1,761
|
)
|
$
|
(8
|
)
|
|
$
|
(55
|
)
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
(1,552
|
)
|
(1)
|
Amounts are presented net of tax.
|
(2)
|
Amortization of actuarial loss and prior service (cost) credit are components of net periodic benefit cost (credit). See
Note 8: Pension and Other Postretirement Benefit Plans
.
|
(3)
|
We reclassified certain tax effects from tax law changes of
$253 million
from "Accumulated other comprehensive loss" to "Retained earnings" on our
Consolidated Balance Sheet
in accordance with ASU 2018-02. See
Note 1: Basis of Presentation
.
|
(4)
|
We reclassified accumulated unrealized gains from available-for-sale securities of
$9 million
from "Accumulated other comprehensive loss" to "Retained earnings" on our
Consolidated Balance Sheet
in accordance with ASU 2016-01. See
Note 1: Basis of Presentation
.
|
SHARES IN THOUSANDS
|
Granted
|
|
Vested
|
||
Restricted Stock Units (RSUs)
|
731
|
|
|
595
|
|
Performance Share Units (PSUs)
|
344
|
|
|
112
|
|
•
|
vest ratably over four years;
|
•
|
immediately vest in the event of death while employed or disability;
|
•
|
continue to vest upon retirement at an age of at least 62, but a portion of the grant is forfeited if retirement occurs before the one-year anniversary of the grant;
|
•
|
continue vesting for one year in the event of involuntary termination when the retirement criteria has not been met; and
|
•
|
will be entirely forfeited upon termination of employment in all other situations including early retirement prior to age 62.
|
•
|
our relative total shareholder return (TSR) ranking measured against the S&P 500 over a three year period and
|
•
|
our relative TSR ranking measured against an industry peer group of companies over a three year period.
|
•
|
vest 100 percent on the third anniversary of the grant date if the individual remains employed by the company;
|
•
|
fully vest in the event the participant dies or becomes disabled while employed;
|
•
|
continue to vest upon retirement at an age of at least 62, but a portion of the grant is forfeited if retirement occurs before the one year anniversary of the grant;
|
•
|
continue vesting for one year in the event of involuntary termination when the retirement criteria has not been met and the employee has met the second anniversary of the grant date; and
|
•
|
will be entirely forfeited upon termination of employment in all other situations including early retirement prior to age 62.
|
|
Performance Share Units
|
|||
Performance period
|
1/1/2018
|
|
–
|
12/31/2020
|
Valuation date average stock price
(1)
|
|
|
$34.14
|
|
Expected dividends
|
|
|
3.81%
|
|
Risk-free rate
|
1.75
|
%
|
–
|
2.34%
|
Expected volatility
|
17.30
|
%
|
–
|
21.52%
|
(1)
|
Calculated as an average of the high and low prices on grant date.
|
|
QUARTER ENDED
|
|
YEAR-TO-DATE ENDED
|
||||||||||||
DOLLAR AMOUNTS IN MILLIONS
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
||||||||
Integration and restructuring charges related to Plum Creek
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
20
|
|
Charges related to closures and other restructuring activities
|
—
|
|
|
2
|
|
|
1
|
|
|
5
|
|
||||
Impairments of long-lived assets
|
—
|
|
|
6
|
|
|
1
|
|
|
153
|
|
||||
Total charges for integration and restructuring, closures and asset impairments
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
2
|
|
|
$
|
178
|
|
•
|
includes both recurring and occasional income and expense items and
|
•
|
can fluctuate from year to year.
|
|
QUARTER ENDED
|
|
YEAR-TO-DATE ENDED
|
||||||||||||
DOLLAR AMOUNTS IN MILLIONS
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
||||||||
Gain on disposition of nonstrategic assets
|
$
|
(1
|
)
|
|
$
|
(5
|
)
|
|
$
|
(4
|
)
|
|
$
|
(14
|
)
|
Foreign exchange losses (gains), net
|
2
|
|
|
(3
|
)
|
|
2
|
|
|
—
|
|
||||
Litigation expense, net
|
10
|
|
|
8
|
|
|
23
|
|
|
14
|
|
||||
Other, net
(1)
|
10
|
|
|
(12
|
)
|
|
45
|
|
|
2
|
|
||||
Total other operating costs (income), net
|
$
|
21
|
|
|
$
|
(12
|
)
|
|
$
|
66
|
|
|
$
|
2
|
|
(1)
|
"Other, net" includes environmental remediation charges. See
Note 12: Legal Proceedings, Commitments, and Contingencies
for more information.
|
•
|
the effect of general economic conditions, including employment rates, interest rate levels, housing starts, general availability of financing for home mortgages and the relative strength of the U.S. dollar;
|
•
|
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 yen and the Canadian dollar, and the relative value of the euro to the yen;
|
•
|
restrictions on international trade, tariffs imposed on imports of our products and 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, and cost reduction initiatives;
|
•
|
raw material availability and prices;
|
•
|
the effect of weather;
|
•
|
the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;
|
•
|
energy prices;
|
•
|
transportation and labor availability and costs;
|
•
|
federal tax policies;
|
•
|
the effect of forestry, land use, environmental and other governmental regulations;
|
•
|
legal proceedings;
|
•
|
performance of pension fund investments and related derivatives;
|
•
|
the effect of timing of employee retirements and changes in the market price of our common stock on charges for share-based compensation;
|
•
|
the accuracy of our estimates of costs and expenses related to contingent liabilities;
|
•
|
changes in accounting principles; and
|
•
|
other risks and uncertainties identified in our
2017
Annual Report on Form 10-K, which are incorporated herein by reference, as well as those set forth from time to time in our other public statements and other reports and filings with the SEC.
|
•
|
Sales realizations for Timberlands and Wood Products refer to net selling prices. This includes selling price plus freight, minus normal sales deductions. Real Estate transactions are presented at the contract sales price before commissions and closing costs, net of any credits.
|
•
|
Net contribution to earnings does not include interest expense and income taxes.
|
|
QUARTER ENDED
|
|
AMOUNT OF CHANGE
|
|
YEAR-TO-DATE ENDED
|
|
AMOUNT OF CHANGE
|
||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017
|
||||||||||||
Net sales
|
$
|
1,910
|
|
|
$
|
1,872
|
|
|
$
|
38
|
|
|
$
|
5,840
|
|
|
$
|
5,373
|
|
|
$
|
467
|
|
Costs of products sold
|
1,452
|
|
|
1,374
|
|
|
78
|
|
|
4,247
|
|
|
3,982
|
|
|
265
|
|
||||||
Operating income
|
337
|
|
|
205
|
|
|
132
|
|
|
1,217
|
|
|
655
|
|
|
562
|
|
||||||
Net earnings
|
255
|
|
|
130
|
|
|
125
|
|
|
841
|
|
|
311
|
|
|
530
|
|
||||||
Earnings per share, basic and diluted
|
$
|
0.34
|
|
|
$
|
0.17
|
|
|
$
|
0.17
|
|
|
$
|
1.11
|
|
|
$
|
0.41
|
|
|
$
|
0.70
|
|
•
|
Wood Products sales to unaffiliated customers increased
$47 million
–
4 percent
– primarily due to increased sales realizations across all product lines except oriented strand board; and
|
•
|
Real Estate & ENR sales to unaffiliated customers increased
$14 million
–
17 percent
– primarily due to increased acres sold.
|
•
|
Wood Products segment costs of products sold increased
$66 million
–
7 percent
– primarily due to increased log and fiber costs across all product lines in the West and Canada; and
|
•
|
Real Estate & ENR segment costs of products sold increased
$23 million
–
74 percent
– primarily due to increased acres sold and higher per acre basis of real estate sold.
|
•
|
decreased charges of
$190 million
for product remediation (refer to
Note 16: Charges (Recoveries) for Product Remediation, Net
)
; and
|
•
|
decreased charges of $14 million for integration and restructuring, closures and asset impairments (refer to
Note 15: Charges for Integration and Restructuring, Closures and Asset Impairments
).
|
•
|
decreased consolidated gross margin of $40 million, as described above; and
|
•
|
increased expenses of $33 million in other operating income (costs) comprised of many smaller fluctuations such as a $5 million increase in foreign exchange losses.
|
•
|
increased operating income of
$132 million
, as described above; and
|
•
|
decreased interest expense of
$5 million
(refer to
Interest Expense
).
|
•
|
Wood Products sales to unaffiliated customers increased
$434 million
–
12 percent
– primarily due to increased sales realizations across all product lines;
|
•
|
Real Estate & ENR sales to unaffiliated customers increased
$24 million
–
13 percent
– primarily attributable to increased acres sold; and
|
•
|
Timberlands sales to unaffiliated customers increased
$9 million
–
1 percent
– primarily due to increased Western log sales realizations, offset by decreased revenue resulting from the divestiture of our Uruguayan operations in third quarter 2017.
|
•
|
Wood Products segment costs of products sold increased
$262 million
–
9 percent
– primarily due to increased log and fiber costs across all product lines in the West and Canada;
|
•
|
Real Estate & ENR segment costs of products sold increased
$36 million
–
54 percent
– primarily attributable to an increase in acres sold;
|
•
|
Unallocated costs of products sold increased $19 million – 95 percent – primarily due to an increase in LIFO and intercompany profit elimination; and
|
•
|
Timberlands segment costs of products sold increased
$4 million
– less than 1 percent – primarily due to increased external sourcing costs in Canada and the West, offset by a decrease in costs of products sold from the divestiture of our Uruguayan operations in third quarter 2017.
|
•
|
a
$240 million
decrease in charges for product remediation (refer to
Note 16: Charges (Recoveries) for Product Remediation, Net
for further details);
|
•
|
an increased consolidated gross margin of $202 million, as described above; and
|
•
|
a decrease in a noncash pretax impairment charge of
$147 million
. This impairment was a result of our agreement to sell our Uruguayan operations, as announced during June 2017 (refer to
Note 15: Charges for Integration and Restructuring, Closures and Asset Impairments)
.
|
•
|
increased operating income of $562 million, as described above; and
|
•
|
decreased interest expense, net of capitalized interest of $19 million.
|
|
QUARTER ENDED
|
|
AMOUNT OF CHANGE
|
|
YEAR-TO-DATE ENDED
|
|
AMOUNT OF CHANGE
|
||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
||||||||||||
Net sales to unaffiliated customers:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Delivered logs
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
West
|
$
|
238
|
|
|
$
|
221
|
|
|
$
|
17
|
|
|
$
|
766
|
|
|
$
|
673
|
|
|
$
|
93
|
|
South
|
157
|
|
|
155
|
|
|
2
|
|
|
472
|
|
|
451
|
|
|
21
|
|
||||||
North
|
25
|
|
|
25
|
|
|
—
|
|
|
70
|
|
|
68
|
|
|
2
|
|
||||||
Other
|
9
|
|
|
17
|
|
|
(8
|
)
|
|
30
|
|
|
48
|
|
|
(18
|
)
|
||||||
Subtotal delivered logs sales
|
429
|
|
|
418
|
|
|
11
|
|
|
1,338
|
|
|
1,240
|
|
|
98
|
|
||||||
Stumpage and pay-as-cut timber
|
13
|
|
|
23
|
|
|
(10
|
)
|
|
39
|
|
|
52
|
|
|
(13
|
)
|
||||||
Uruguay operations
(2)
|
—
|
|
|
23
|
|
|
(23
|
)
|
|
—
|
|
|
63
|
|
|
(63
|
)
|
||||||
Recreational and other lease revenue
|
15
|
|
|
16
|
|
|
(1
|
)
|
|
44
|
|
|
45
|
|
|
(1
|
)
|
||||||
Other
|
11
|
|
|
11
|
|
|
—
|
|
|
34
|
|
|
46
|
|
|
(12
|
)
|
||||||
Subtotal net sales to unaffiliated customers
|
468
|
|
|
491
|
|
|
(23
|
)
|
|
1,455
|
|
|
1,446
|
|
|
9
|
|
||||||
Intersegment sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States
|
128
|
|
|
125
|
|
|
3
|
|
|
409
|
|
|
381
|
|
|
28
|
|
||||||
Other
|
57
|
|
|
54
|
|
|
3
|
|
|
189
|
|
|
163
|
|
|
26
|
|
||||||
Subtotal intersegment sales
|
185
|
|
|
179
|
|
|
6
|
|
|
598
|
|
|
544
|
|
|
54
|
|
||||||
Total sales
|
$
|
653
|
|
|
$
|
670
|
|
|
$
|
(17
|
)
|
|
$
|
2,053
|
|
|
$
|
1,990
|
|
|
$
|
63
|
|
Costs of products sold
|
$
|
505
|
|
|
$
|
517
|
|
|
$
|
(12
|
)
|
|
$
|
1,516
|
|
|
$
|
1,512
|
|
|
$
|
4
|
|
Operating income and Net contribution to earnings
|
$
|
126
|
|
|
$
|
131
|
|
|
$
|
(5
|
)
|
|
$
|
476
|
|
|
$
|
267
|
|
|
$
|
209
|
|
(1)
|
The West region includes Washington and Oregon. The South region includes Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas and Oklahoma. The North region includes West Virginia, Maine, New Hampshire, Vermont, Michigan, Wisconsin and Montana. Other includes our Canadian operations and previously managed Twin Creeks Venture. Our former agreement for the Twin Creeks Venture was terminated in December 2017.
|
(2)
|
Includes logs, plywood and hardwood lumber harvested or produced by our former international operations in Uruguay. On June 2nd, 2017, we agreed to sell all of our equity interest in the subsidiaries that collectively own and operate our Uruguayan timberlands and manufacturing operations and recorded a
$147 million
impairment in operating income within the Timberlands business segment during second quarter 2017. Our Uruguayan operations were divested on September 1, 2017. Refer to
Note 4: Operations Divested
and
Note 15: Charges for Integration and Restructuring, Closures and Asset Impairments
for further information.
|
•
|
a $21 million decrease in costs of products sold resulting from the sale of our Uruguayan operations in third quarter 2017; and
|
•
|
a $17 million decrease in costs of products sold resulting from the termination of our management agreement for the Twin Creeks Venture in fourth quarter 2017.
|
•
|
a
$93 million
increase in Western log sales attributable to a 20 percent increase in Western log prices, partially offset by a 5 percent decrease in Western delivered log sales volumes.
|
•
|
a
$63 million
decrease in revenue from our Uruguayan operations, which were divested in third quarter 2017;
|
•
|
an
$18 million
decrease in Other delivered log sales primarily resulting from the termination of our management agreement for the Twin Creeks Venture in fourth quarter 2017; and
|
•
|
a
$13 million
decrease in Stumpage and pay-as-cut timber sales.
|
•
|
a $72 million increase in costs of products sold primarily attributable to external sourcing costs in the West as a result of increased log prices;
|
•
|
a $20 million increase in costs of products sold in Canada, primarily due to a 5 percent increase in sales volume and increased sourcing costs; and
|
•
|
a $19 million increase in costs of products sold in the South, primarily due to a 4 percent increase in log sales volumes.
|
•
|
a $70 million decrease in costs of products sold from our Uruguayan operations, which were divested in third quarter 2017; and
|
•
|
a $40 million decrease in costs of products sold resulting from the termination of our management agreement for the Twin Creeks Venture in fourth quarter 2017.
|
•
|
a decrease in a noncash pretax impairment charge of
$147 million
. This impairment was a result of our agreement to sell our Uruguayan operations, as announced during June 2017 (refer to
Note 15: Charges for Integration, Restructuring, Closures and Asset Impairments
);
and
|
•
|
increased gross margin of $59 million, as discussed above.
|
|
QUARTER ENDED
|
|
AMOUNT OF CHANGE
|
|
YEAR-TO-DATE ENDED
|
|
AMOUNT OF CHANGE
|
||||||||||
VOLUMES IN THOUSANDS
(1)(2)
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
||||||
Third party log sales – tons:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
West
|
1,897
|
|
|
1,910
|
|
|
(13
|
)
|
|
5,900
|
|
|
6,210
|
|
|
(310
|
)
|
South
|
4,521
|
|
|
4,527
|
|
|
(6
|
)
|
|
13,591
|
|
|
13,105
|
|
|
486
|
|
North
|
414
|
|
|
428
|
|
|
(14
|
)
|
|
1,131
|
|
|
1,135
|
|
|
(4
|
)
|
Other
|
154
|
|
|
424
|
|
|
(270
|
)
|
|
552
|
|
|
1,226
|
|
|
(674
|
)
|
Total
(3)
|
6,986
|
|
|
7,289
|
|
|
(303
|
)
|
|
21,174
|
|
|
21,676
|
|
|
(502
|
)
|
Fee harvest volumes – tons:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
West
|
2,305
|
|
|
2,230
|
|
|
75
|
|
|
7,108
|
|
|
7,539
|
|
|
(431
|
)
|
South
|
6,478
|
|
|
6,953
|
|
|
(475
|
)
|
|
19,859
|
|
|
19,799
|
|
|
60
|
|
North
|
537
|
|
|
565
|
|
|
(28
|
)
|
|
1,509
|
|
|
1,570
|
|
|
(61
|
)
|
Other
|
—
|
|
|
569
|
|
|
(569
|
)
|
|
—
|
|
|
1,384
|
|
|
(1,384
|
)
|
Total
(3)
|
9,320
|
|
|
10,317
|
|
|
(997
|
)
|
|
28,476
|
|
|
30,292
|
|
|
(1,816
|
)
|
(1)
|
The West region includes Washington and Oregon. The South region includes Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas and Oklahoma. The North region includes West Virginia, Maine, New Hampshire, Vermont, Michigan, Wisconsin and Montana. Other includes our Canadian operations and managed Twin Creeks Venture. Our management agreement for the Twin Creeks Venture began in April 2016 and terminated in December 2017.
|
(2)
|
Western logs are primarily transacted in thousand board feet (MBF) but are converted to ton equivalents for external reporting purposes.
|
(3)
|
Total volumes exclude third party log sales and fee harvest volumes from our former Uruguayan operations, which we sold during third quarter 2017. Refer to
Note 4: Operations Divested
for further information regarding this sale.
|
|
QUARTER ENDED
|
|
AMOUNT OF CHANGE
|
|
YEAR-TO-DATE ENDED
|
|
AMOUNT OF CHANGE
|
||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
||||||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real estate
|
$
|
76
|
|
|
$
|
64
|
|
|
$
|
12
|
|
|
$
|
148
|
|
|
$
|
128
|
|
|
$
|
20
|
|
Energy and natural resources
|
20
|
|
|
18
|
|
|
2
|
|
|
57
|
|
|
53
|
|
|
4
|
|
||||||
Total
|
$
|
96
|
|
|
$
|
82
|
|
|
$
|
14
|
|
|
$
|
205
|
|
|
$
|
181
|
|
|
$
|
24
|
|
Costs of products sold
|
$
|
54
|
|
|
$
|
31
|
|
|
$
|
23
|
|
|
$
|
103
|
|
|
$
|
67
|
|
|
$
|
36
|
|
Operating income and Net contribution to earnings
|
$
|
36
|
|
|
$
|
47
|
|
|
$
|
(11
|
)
|
|
$
|
83
|
|
|
$
|
96
|
|
|
$
|
(13
|
)
|
|
QUARTER ENDED
|
|
AMOUNT OF CHANGE
|
|
YEAR-TO-DATE ENDED
|
|
AMOUNT OF CHANGE
|
||||||||||||||||
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
||||||||||||
Acres sold
|
61,681
|
|
|
35,749
|
|
|
25,932
|
|
|
99,742
|
|
|
59,009
|
|
|
40,733
|
|
||||||
Average price per acre
|
$
|
1,209
|
|
|
$
|
1,784
|
|
|
$
|
(575
|
)
|
|
$
|
1,452
|
|
|
$
|
2,081
|
|
|
$
|
(629
|
)
|
|
QUARTER ENDED
|
|
AMOUNT OF CHANGE
|
|
YEAR-TO-DATE ENDED
|
|
AMOUNT OF CHANGE
|
||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
||||||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Structural lumber
|
$
|
581
|
|
|
$
|
525
|
|
|
$
|
56
|
|
|
$
|
1,831
|
|
|
$
|
1,541
|
|
|
$
|
290
|
|
Engineered solid section
|
132
|
|
|
131
|
|
|
1
|
|
|
400
|
|
|
378
|
|
|
22
|
|
||||||
Engineered I-joists
|
91
|
|
|
93
|
|
|
(2
|
)
|
|
261
|
|
|
251
|
|
|
10
|
|
||||||
Oriented strand board
|
215
|
|
|
243
|
|
|
(28
|
)
|
|
724
|
|
|
671
|
|
|
53
|
|
||||||
Softwood plywood
|
53
|
|
|
45
|
|
|
8
|
|
|
158
|
|
|
136
|
|
|
22
|
|
||||||
Medium density fiberboard
|
48
|
|
|
48
|
|
|
—
|
|
|
138
|
|
|
146
|
|
|
(8
|
)
|
||||||
Complementary building products
|
152
|
|
|
146
|
|
|
6
|
|
|
449
|
|
|
417
|
|
|
32
|
|
||||||
Other products produced
|
74
|
|
|
68
|
|
|
6
|
|
|
219
|
|
|
206
|
|
|
13
|
|
||||||
Total
|
$
|
1,346
|
|
|
$
|
1,299
|
|
|
$
|
47
|
|
|
$
|
4,180
|
|
|
$
|
3,746
|
|
|
$
|
434
|
|
Costs of products sold
|
$
|
1,071
|
|
|
$
|
1,005
|
|
|
$
|
66
|
|
|
$
|
3,195
|
|
|
$
|
2,933
|
|
|
$
|
262
|
|
Operating income and Net contribution to earnings
|
$
|
213
|
|
|
$
|
40
|
|
|
$
|
173
|
|
|
$
|
812
|
|
|
$
|
389
|
|
|
$
|
423
|
|
•
|
a
$56 million
increase in structural lumber sales, attributable to a 14 percent increase in average sales realizations and a 1 percent increase in sales volumes;
|
•
|
an
$8 million
increase in softwood plywood sales, attributable to a 14 percent increase in average sales realizations offset by a 10 percent decrease in sales volumes;
|
•
|
a
$6 million
increase in complementary building products sales due to higher market demand; and
|
•
|
a $
6 million
increase in other products produced sales due to higher sawmill production.
|
•
|
a $290 million increase in structural lumber sales attributable to an 18 percent increase in average sale realizations and a 1 percent increase in sales volumes;
|
•
|
a $53 million increase in oriented strand board sales attributable to a 14 percent increase in average sales realizations, partially offset by a 5 percent decrease in sales volumes;
|
•
|
a $32 million increase in complementary building products sales due to higher market demand;
|
•
|
a $22 million increase in engineered solid section sales attributable to a 9 percent increase in average sales realizations, partially offset by a 6 percent decrease in sales volumes;
|
•
|
a $22 million increase in softwood plywood sales attributable to a 17 percent increase in average sales realizations, partially offset by a 1 percent decrease in sales volumes;
|
•
|
a $10 million increase in engineered i-joists sales attributable to an 8 percent increase in average sales realizations, partially offset by a 4 percent decrease in sales volumes.
|
•
|
$240 million
decreased charges for product remediation (refer to
Note 16: Charges (Recoveries) for Product Remediation, Net
for further details); and
|
•
|
increased gross margin of $172 million, as discussed above.
|
|
QUARTER ENDED
|
|
AMOUNT OF CHANGE
|
|
YEAR-TO-DATE ENDED
|
|
AMOUNT OF CHANGE
|
||||||||||
VOLUMES IN MILLIONS
(1)
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
||||||
Structural lumber – board feet
|
1,184
|
|
|
1,172
|
|
|
12
|
|
|
3,585
|
|
|
3,548
|
|
|
37
|
|
Engineered solid section – cubic feet
|
6.0
|
|
|
6.4
|
|
|
(0.4
|
)
|
|
18.6
|
|
|
19.2
|
|
|
(0.6
|
)
|
Engineered I-joists – lineal feet
|
54
|
|
|
60
|
|
|
(6
|
)
|
|
160
|
|
|
166
|
|
|
(6
|
)
|
Oriented strand board – square feet (3/8”)
|
669
|
|
|
741
|
|
|
(72
|
)
|
|
2,162
|
|
|
2,274
|
|
|
(112
|
)
|
Softwood plywood – square feet (3/8”)
|
122
|
|
|
117
|
|
|
5
|
|
|
355
|
|
|
358
|
|
|
(3
|
)
|
Medium density fiberboard – square feet (3/4”)
|
59
|
|
|
58
|
|
|
1
|
|
|
165
|
|
|
177
|
|
|
(12
|
)
|
(1)
|
Sales volumes include sales of internally produced products and products purchased for resale primarily through our distribution business.
|
|
QUARTER ENDED
|
|
AMOUNT OF CHANGE
|
|
YEAR-TO-DATE ENDED
|
|
AMOUNT OF CHANGE
|
||||||||||
VOLUMES IN MILLIONS
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
||||||
Structural lumber – board feet:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Production
|
1,106
|
|
|
1,093
|
|
|
13
|
|
|
3,446
|
|
|
3,391
|
|
|
55
|
|
Outside purchase
|
55
|
|
|
52
|
|
|
3
|
|
|
151
|
|
|
152
|
|
|
(1
|
)
|
Total
|
1,161
|
|
|
1,145
|
|
|
16
|
|
|
3,597
|
|
|
3,543
|
|
|
54
|
|
Engineered solid section – cubic feet:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Production
|
6.3
|
|
|
6.4
|
|
|
(0.1
|
)
|
|
19
|
|
|
19.3
|
|
|
(0.3
|
)
|
Outside purchase
|
0.2
|
|
|
0.4
|
|
|
(0.2
|
)
|
|
1.3
|
|
|
1.4
|
|
|
(0.1
|
)
|
Total
|
6.5
|
|
|
6.8
|
|
|
(0.3
|
)
|
|
20.3
|
|
|
20.7
|
|
|
(0.4
|
)
|
Engineered I-joists – lineal feet:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Production
|
46
|
|
|
58
|
|
|
(12
|
)
|
|
154
|
|
|
161
|
|
|
(7
|
)
|
Outside purchase
|
4
|
|
|
6
|
|
|
(2
|
)
|
|
11
|
|
|
12
|
|
|
(1
|
)
|
Total
|
50
|
|
|
64
|
|
|
(14
|
)
|
|
165
|
|
|
173
|
|
|
(8
|
)
|
Oriented strand board – square feet (3/8”):
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Production
|
665
|
|
|
744
|
|
|
(79
|
)
|
|
2,146
|
|
|
2,256
|
|
|
(110
|
)
|
Outside purchase
|
82
|
|
|
105
|
|
|
(23
|
)
|
|
292
|
|
|
309
|
|
|
(17
|
)
|
Total
|
747
|
|
|
849
|
|
|
(102
|
)
|
|
2,438
|
|
|
2,565
|
|
|
(127
|
)
|
Softwood plywood – square feet (3/8”):
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Production
|
106
|
|
|
88
|
|
|
18
|
|
|
308
|
|
|
284
|
|
|
24
|
|
Outside purchase
|
19
|
|
|
21
|
|
|
(2
|
)
|
|
59
|
|
|
62
|
|
|
(3
|
)
|
Total
|
125
|
|
|
109
|
|
|
16
|
|
|
367
|
|
|
346
|
|
|
21
|
|
Medium density fiberboard – square feet (3/4"):
|
|
|
|
|
|
|
|
|
|||||||||
Production
|
61
|
|
|
63
|
|
|
(2
|
)
|
|
168
|
|
|
182
|
|
|
(14
|
)
|
Total
|
61
|
|
|
63
|
|
|
(2
|
)
|
|
168
|
|
|
182
|
|
|
(14
|
)
|
|
QUARTER ENDED
|
|
AMOUNT OF CHANGE
|
|
YEAR-TO-DATE ENDED
|
|
AMOUNT OF CHANGE
|
||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
||||||||||||
Unallocated corporate function and variable compensation expense
|
$
|
(19
|
)
|
|
$
|
(19
|
)
|
|
$
|
—
|
|
|
$
|
(56
|
)
|
|
$
|
(55
|
)
|
|
$
|
(1
|
)
|
Liability classified share-based compensation
|
4
|
|
|
(1
|
)
|
|
5
|
|
|
2
|
|
|
(7
|
)
|
|
9
|
|
||||||
Foreign exchange gain (loss)
|
(2
|
)
|
|
3
|
|
|
(5
|
)
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||
Elimination of intersegment profit in inventory and LIFO
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
(18
|
)
|
|
(6
|
)
|
|
(12
|
)
|
||||||
Charges for integration and restructuring, closures and asset impairments
|
—
|
|
|
(6
|
)
|
|
6
|
|
|
—
|
|
|
(20
|
)
|
|
20
|
|
||||||
Other
|
(21
|
)
|
|
8
|
|
|
(29
|
)
|
|
(80
|
)
|
|
(8
|
)
|
|
(72
|
)
|
||||||
Operating income (loss)
|
(38
|
)
|
|
(12
|
)
|
|
(26
|
)
|
|
(154
|
)
|
|
(96
|
)
|
|
(58
|
)
|
||||||
Non-operating pension and other postretirement benefit costs
|
(17
|
)
|
|
(16
|
)
|
|
(1
|
)
|
|
(54
|
)
|
|
(46
|
)
|
|
(8
|
)
|
||||||
Interest income and other
|
13
|
|
|
11
|
|
|
2
|
|
|
36
|
|
|
29
|
|
|
7
|
|
||||||
Net contribution to earnings
|
$
|
(42
|
)
|
|
$
|
(17
|
)
|
|
$
|
(25
|
)
|
|
$
|
(172
|
)
|
|
$
|
(113
|
)
|
|
$
|
(59
|
)
|
•
|
a $12 million increase in legal and environmental charges;
|
•
|
a
$5 million
increase in net foreign exchange losses; and
|
•
|
a
$3 million
increase in charges for elimination of intersegment profit in inventory and LIFO due to increased lumber and log inventory quantities.
|
•
|
a
$28 million
increase in charges during first quarter 2018 for environmental remediation (refer to
Note 12: Legal Proceedings, Commitments and Contingencies
);
|
•
|
a $30 million change in legal charges, primarily related to insurance recoveries received during year-to-date 2017, which resulted in a net credit of $20 million. No similar recoveries have been received during year-to-date 2018;
|
•
|
a
$12 million
increase in charges for elimination of intersegment profit in inventory and LIFO due to to increased lumber and log inventory quantities; and
|
•
|
an
$8 million
of increased charges for non-operating pension and other postretirement benefit costs primarily due to decreased expected return on plan assets (refer to
Note 8: Pension and Other Postretirement Benefit Plans
).
|
•
|
$93 million
for the
third
quarter
2018
and
$278 million
year-to-date
2018
; and
|
•
|
$98 million
for the
third
quarter
2017
and
$297 million
year-to-date
2017
.
|
•
|
$15 million
benefit for the
third
quarter
2018
and
$80 million
expense year-to-date
2018
; and
|
•
|
$27 million
benefit for the
third
quarter
2017
and
$31 million
expense year-to-date
2017
.
|
•
|
$820 million
for year-to-date
2018
; and
|
•
|
$847 million
for year-to-date
2017
.
|
•
|
increased cash flows generated from our businesses, excluding working capital changes, of $212 million;
|
•
|
a decrease in cash paid for income taxes of $49 million; and
|
•
|
a decrease in cash paid for interest of $30 million.
|
•
|
$264 million
used in investing activities for year-to-date
2018
; and
|
•
|
$192 million
provided by investing activities for year-to-date
2017
.
|
•
|
a $421 million decrease in proceeds received from the sale of assets and operations, which is primarily due to
$403 million
in proceeds received from the sale of our Uruguay operations in third quarter 2017; and
|
•
|
a net $24 million increase in cash used for capital expenditures.
|
|
YEAR-TO-DATE ENDED
|
||||||
DOLLAR AMOUNTS IN MILLIONS
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
||||
Timberlands
|
$
|
82
|
|
|
$
|
79
|
|
Real Estate & ENR
|
—
|
|
|
2
|
|
||
Wood Products
|
199
|
|
|
176
|
|
||
Unallocated Items
|
2
|
|
|
2
|
|
||
Total
|
$
|
283
|
|
|
$
|
259
|
|
•
|
$1,032 million
for year-to-date
2018
; and
|
•
|
$1,218 million
for year-to-date
2017
.
|
•
|
a
$273 million
increase in cash used for repurchases of common shares;
|
•
|
a $225 million decrease in proceeds from the issuance of long-term debt;
|
•
|
a $42 million increase in cash dividends paid on common shares; and
|
•
|
a $37 million decrease in proceeds from exercise of stock options.
|
•
|
$52 million
in year-to-date
2018
; and
|
•
|
$89 million
in year-to-date
2017
.
|
•
|
$741 million
in year-to-date
2018
; and
|
•
|
$699 million
in year-to-date
2017
.
|
|
QUARTER ENDED
|
|
AMOUNT OF CHANGE
|
|
YEAR-TO-DATE ENDED
|
|
AMOUNT OF CHANGE
|
||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
|
SEPTEMBER 2018
|
|
SEPTEMBER 2017
|
|
2018 VS.
2017 |
||||||||||||
Adjusted EBITDA by Segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Timberlands
|
$
|
206
|
|
|
$
|
220
|
|
|
$
|
(14
|
)
|
|
$
|
714
|
|
|
$
|
684
|
|
|
$
|
30
|
|
Real Estate & ENR
|
86
|
|
|
74
|
|
|
12
|
|
|
174
|
|
|
154
|
|
|
20
|
|
||||||
Wood Products
|
250
|
|
|
278
|
|
|
(28
|
)
|
|
921
|
|
|
759
|
|
|
162
|
|
||||||
|
542
|
|
|
572
|
|
|
(30
|
)
|
|
1,809
|
|
|
1,597
|
|
|
212
|
|
||||||
Unallocated Items
|
(37
|
)
|
|
(3
|
)
|
|
(34
|
)
|
|
(123
|
)
|
|
(68
|
)
|
|
(55
|
)
|
||||||
Adjusted EBITDA
|
$
|
505
|
|
|
$
|
569
|
|
|
$
|
(64
|
)
|
|
$
|
1,686
|
|
|
$
|
1,529
|
|
|
$
|
157
|
|
DOLLAR AMOUNTS IN MILLIONS
|
Timberlands
|
|
Real Estate & ENR
|
|
Wood Products
|
|
Unallocated Items
|
|
Total
|
||||||||||
Adjusted EBITDA by Segment:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings
|
|
|
|
|
|
|
|
|
$
|
255
|
|
||||||||
Interest expense, net of capitalized interest
|
|
|
|
|
|
|
|
|
93
|
|
|||||||||
Income taxes
(1)
|
|
|
|
|
|
|
|
|
(15
|
)
|
|||||||||
Net contribution to earnings
|
$
|
126
|
|
|
$
|
36
|
|
|
$
|
213
|
|
|
$
|
(42
|
)
|
|
$
|
333
|
|
Non-operating pension and other postretirement benefit cost
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
17
|
|
|||||
Interest income and other
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(13
|
)
|
|||||
Operating income (loss)
|
126
|
|
|
36
|
|
|
213
|
|
|
(38
|
)
|
|
337
|
|
|||||
Depreciation, depletion and amortization
|
80
|
|
|
4
|
|
|
37
|
|
|
1
|
|
|
122
|
|
|||||
Basis of real estate sold
|
—
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|||||
Unallocated pension service costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Adjusted EBITDA
|
$
|
206
|
|
|
$
|
86
|
|
|
$
|
250
|
|
|
$
|
(37
|
)
|
|
$
|
505
|
|
DOLLAR AMOUNTS IN MILLIONS
|
Timberlands
|
|
Real Estate & ENR
|
|
Wood Products
|
|
Unallocated Items
|
|
Total
|
||||||||||
Adjusted EBITDA by Segment:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings
|
|
|
|
|
|
|
|
|
$
|
130
|
|
||||||||
Interest expense, net of capitalized interest
|
|
|
|
|
|
|
|
|
98
|
|
|||||||||
Income taxes
|
|
|
|
|
|
|
|
|
(27
|
)
|
|||||||||
Net contribution to earnings
|
$
|
131
|
|
|
$
|
47
|
|
|
$
|
40
|
|
|
$
|
(17
|
)
|
|
$
|
201
|
|
Non-operating pension and other postretirement benefit cost
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
16
|
|
|||||
Interest income and other
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(11
|
)
|
|
(12
|
)
|
|||||
Operating income (loss)
|
131
|
|
|
46
|
|
|
40
|
|
|
(12
|
)
|
|
205
|
|
|||||
Depreciation, depletion and amortization
|
89
|
|
|
4
|
|
|
37
|
|
|
2
|
|
|
132
|
|
|||||
Basis of real estate sold
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||
Unallocated pension service costs
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Special items
(1)(2)
|
—
|
|
|
—
|
|
|
201
|
|
|
6
|
|
|
207
|
|
|||||
Adjusted EBITDA
|
$
|
220
|
|
|
$
|
74
|
|
|
$
|
278
|
|
|
$
|
(3
|
)
|
|
$
|
569
|
|
(1)
|
Special items attributable to Wood Products includes: $190 million of product remediation charges, a $6 million restructuring, impairments and other charges and $5 million of retroactive and prospective countervailing and antidumping duties.
|
(2)
|
Special items attributable to Unallocated Items include $6 million of Plum Creek merger-related costs.
|
DOLLAR AMOUNTS IN MILLIONS
|
Timberlands
|
|
Real Estate & ENR
|
|
Wood Products
|
|
Unallocated Items
|
|
Total
|
||||||||||
Adjusted EBITDA by Segment:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings
|
|
|
|
|
|
|
|
|
$
|
841
|
|
||||||||
Interest expense, net of capitalized interest
|
|
|
|
|
|
|
|
|
278
|
|
|||||||||
Income taxes
(1)
|
|
|
|
|
|
|
|
|
80
|
|
|||||||||
Net contribution to earnings
|
$
|
476
|
|
|
$
|
83
|
|
|
$
|
812
|
|
|
$
|
(172
|
)
|
|
$
|
1,199
|
|
Non-operating pension and other postretirement benefit cost
|
—
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|
54
|
|
|||||
Interest income and other
|
—
|
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
|
(36
|
)
|
|||||
Operating income (loss)
|
476
|
|
|
83
|
|
|
812
|
|
|
(154
|
)
|
|
1,217
|
|
|||||
Depreciation, depletion and amortization
|
238
|
|
|
11
|
|
|
109
|
|
|
3
|
|
|
361
|
|
|||||
Basis of real estate sold
|
—
|
|
|
80
|
|
|
—
|
|
|
—
|
|
|
80
|
|
|||||
Unallocated pension service costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Special items
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
28
|
|
|||||
Adjusted EBITDA
|
$
|
714
|
|
|
$
|
174
|
|
|
$
|
921
|
|
|
$
|
(123
|
)
|
|
$
|
1,686
|
|
(1)
|
After tax special items included a $41 million tax benefit related to our $300 million pension contribution.
|
(2)
|
Pretax special items include: $25 million product remediation insurance recoveries; $25 million product remediation charges; and $28 million of environmental remediation expense.
|
DOLLAR AMOUNTS IN MILLIONS
|
Timberlands
|
|
Real Estate & ENR
|
|
Wood Products
|
|
Unallocated Items
|
|
Total
|
||||||||||
Adjusted EBITDA by Segment:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings
|
|
|
|
|
|
|
|
|
$
|
311
|
|
||||||||
Interest expense, net of capitalized interest
|
|
|
|
|
|
|
|
|
297
|
|
|||||||||
Income taxes
|
|
|
|
|
|
|
|
|
31
|
|
|||||||||
Net contribution to earnings
|
$
|
267
|
|
|
$
|
96
|
|
|
$
|
389
|
|
|
$
|
(113
|
)
|
|
$
|
639
|
|
Non-operating pension and other postretirement benefit cost
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|
46
|
|
|||||
Interest income and other
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(29
|
)
|
|
(30
|
)
|
|||||
Operating income (loss)
|
267
|
|
|
95
|
|
|
389
|
|
|
(96
|
)
|
|
655
|
|
|||||
Depreciation, depletion and amortization
|
270
|
|
|
11
|
|
|
108
|
|
|
5
|
|
|
394
|
|
|||||
Basis of real estate sold
|
—
|
|
|
48
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|||||
Unallocated pension service costs
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|||||
Special items
(1)(2)(3)
|
147
|
|
|
—
|
|
|
262
|
|
|
20
|
|
|
429
|
|
|||||
Adjusted EBITDA
|
$
|
684
|
|
|
$
|
154
|
|
|
$
|
759
|
|
|
$
|
(68
|
)
|
|
$
|
1,529
|
|
(1)
|
Special items attributable to Timberlands include $147 million of impairment charges related to our Uruguayan operations.
|
(2)
|
Special items attributable to Wood Products includes: $240 million product remediation charges, $16 million of retroactive and prospective countervailing and antidumping duties and a $6 million restructuring, impairments and other charges.
|
(3)
|
Special items attributable to Unallocated Items include $20 million of Plum Creek merger-related costs.
|
•
|
scheduled principal repayments for the next five years and after;
|
•
|
weighted average interest rates for debt maturing in each of the next five years and after and
|
•
|
estimated fair values of outstanding obligations.
|
DOLLAR AMOUNTS IN MILLIONS
|
|
|
|
|
|
|||||||||||||||||||
|
2018
|
2019
|
2020
|
2021
|
2022
|
THEREAFTER
|
TOTAL
|
FAIR VALUE
|
||||||||||||||||
Fixed-rate debt
(1)(2)
|
$
|
—
|
|
$
|
500
|
|
$
|
—
|
|
$
|
719
|
|
$
|
—
|
|
$
|
4,450
|
|
$
|
5,669
|
|
$
|
6,378
|
|
Average interest rate
|
—
|
%
|
7.38
|
%
|
—
|
%
|
5.57
|
%
|
—
|
%
|
6.39
|
%
|
6.37
|
%
|
N/A
|
|
||||||||
Variable-rate debt
(1)(2)
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
225
|
|
$
|
225
|
|
$
|
225
|
|
Average interest rate
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
3.84
|
%
|
3.84
|
%
|
N/A
|
|
(1)
|
Excludes $27 million of unamortized discounts, capitalized debt expense and fair value step-up (related to Plum Creek merger).
|
(2)
|
Does not include nonrecourse debt held by our Variable Interest Entities (VIEs). See
Note 7: Special-Purpose Entities
in the
Notes to Consolidated Financial Statements
for further information on our VIEs and the related nonrecourse debt.
|
COMMON SHARE REPURCHASES DURING THIRD QUARTER
|
TOTAL NUMBER OF SHARES (OR UNITS) PURCHASED
|
|
AVERAGE PRICE PAID PER SHARE (OR UNIT)
|
|
TOTAL NUMBER OF SHARES (OR UNITS) PURCHASED AS PART OF PUBLICLY ANNOUNCED PLANS OR PROGRAMS
|
|
MAXIMUM NUMBER (OR APPROXIMATE DOLLAR VALUE) OF SHARES (OR UNITS) THAT MAY YET BE PURCHASED UNDER THE PLANS OR PROGRAMS
|
||||||
July 1 – July 31
|
2,742,118
|
|
|
$
|
34.63
|
|
|
2,742,118
|
|
|
$
|
404,943,899
|
|
August 1 – August 31
|
1,330,428
|
|
|
33.98
|
|
|
1,330,428
|
|
|
359,736,859
|
|
||
September 1 – September 30
|
4,510,698
|
|
|
33.28
|
|
|
4,510,698
|
|
|
209,612,429
|
|
||
Total repurchases during third quarter
|
8,583,244
|
|
|
$
|
33.82
|
|
|
8,583,244
|
|
|
$
|
209,612,429
|
|
|
WEYERHAEUSER COMPANY
|
|
|
Date:
|
October 26, 2018
|
|
|
|
|
By:
|
/s/ Jeanne M. Hillman
|
|
|
Jeanne M. Hillman
|
|
|
Vice President and Chief Accounting Officer
|
|
|
(Principal Accounting Officer)
|
1 Year Weyerhaeuser Chart |
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