Weyerhaeuser reports third quarter results

-- Earnings increased approximately 45 percent compared with second quarter

-- Closed sale of liquid packaging board business for $285 million

-- Repurchased $306 million of common shares, completing $2 billion accelerated commitment

News provided by

Oct 28, 2016, 03:05 ET

SEATTLE, Oct. 28, 2016 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported third quarter net earnings to common shareholders of $227 million, or $0.30 per diluted share, on net sales of $1.7 billion. This compares with net earnings of $180 million, or $0.35 per diluted share, on net sales of $1.4 billion for the same period last year.

Third quarter results include after-tax earnings of $65 million from discontinued operations, which included a net gain of $41 million on the divestiture of the liquid packaging board business. Third quarter results also include net after-tax charges of $10 million from special items. Excluding discontinued operations and special items, the company reported net earnings of $172 million, or $0.23 per diluted share for the third quarter. This compares with net earnings from continuing operations before special items of $121 million for the same period last year and $130 million for second quarter of 2016.

"Our employees delivered strong results in the quarter as Timberlands drove improved performance through merger synergies and Wood Products reported its best third quarter in over a decade," said Doyle R. Simons, president and CEO. "We also completed our $2 billion accelerated share repurchase and closed the sale of our liquid packaging business. We remain committed to driving value for shareholders through a focused portfolio, industry leading performance, and disciplined capital allocation. The integration with Plum Creek continues to go very well and we are confident we will fully capture the cost and operational synergies from the merger."

WEYERHAEUSER FINANCIAL HIGHLIGHTS

Weyerhaeuser merged with Plum Creek Timber Company, Inc. (Plum Creek) on February 19, 2016. The financial statements presented within this release do not include Plum Creek financial results for any period prior to the February 19, 2016 merger date.

During 2016, Weyerhaeuser announced the sale of its Cellulose Fibers pulp mills, liquid packaging board business, and printing papers joint venture. Results for the Cellulose Fibers segment are presented as discontinued operations. All periods presented have been revised to separate results of discontinued operations from the results of our continuing operations.

WEYERHAEUSER FINANCIAL HIGHLIGHTS	2016	2016	2015
(millions, except per share data)	2Q	3Q	3Q
Net sales	$1,655	$1,709	$1,355

Net earnings attributable to Weyerhaeuser common shareholders	$157	$227	$180
Weighted average shares outstanding, diluted⁽¹⁾	748	754	517
Earnings per diluted share	$0.21	$0.30	$0.35

Net earnings from continuing operations attributable to Weyerhaeuser common shareholders before special items⁽²⁾	$130	$172	$121
Net earnings from continuing operations per diluted share attributable to Weyerhaeuser common shareholders before special items	$0.17	$0.23	$0.23

Adjusted EBITDA⁽³⁾	$413	$434	$245

(1) In the first quarter of 2016, Weyerhaeuser issued approximately 279 million shares in conjunction with the Plum Creek merger. During 2016, Weyerhaeuser has repurchased approximately 68 million shares to complete our $2 billion accelerated repurchase commitment, part of the $2.5 billion repurchase authorization that was announced in conjunction with the merger transaction. In the third quarter of 2016, the company issued approximately 23 million shares as a result of the conversion of its mandatory convertible preference shares. At the end of the third quarter of 2016, the company had approximately 748 million common shares outstanding.

(2) After-tax special items for the third quarter of 2016 represent $10 million of Plum Creek merger-related costs. There were no special items in the third quarter of 2015. After-tax special items from continuing operations for second quarter 2016 were $11 million.

(3) Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income from continuing operations, adjusted for depreciation, depletion, amortization, basis in real estate sold, pension and postretirement costs not allocated to business segments and special items. Adjusted EBITDA excludes results from joint ventures. Adjusted EBITDA should not be considered in isolation from and is not intended to represent an alternative to our GAAP results. A reconciliation of Adjusted EBITDA to GAAP earnings is included within this release.

TIMBERLANDS

FINANCIAL HIGHLIGHTS (millions)	2Q 2016	3Q 2016	Change
Net sales	$664	$700	$36
Contribution to pre-tax earnings	$125	$122	($3)
Adjusted EBITDA	$220	$223	$3

3Q 2016 Performance - Sales volumes for Southern and Northern logs increased seasonally. Western fee harvest volumes declined and average realizations for Western logs were comparable to the second quarter, as improved domestic realizations were offset by slightly lower realizations for export logs. Silviculture and road costs increased seasonally, and the business benefited from merger-related synergies and operational excellence initiatives.

4Q 2016 Outlook - Weyerhaeuser anticipates modestly higher earnings and Adjusted EBITDA from the Timberlands segment in the fourth quarter. In the West, the company expects slightly higher realizations for domestic and export logs, partially offset by lower fee harvest volumes. In the South, the company anticipates increased fee harvest volumes and seasonally lower silviculture expense.

REAL ESTATE, ENERGY AND NATURAL RESOURCES

FINANCIAL HIGHLIGHTS (millions)	2Q 2016	3Q 2016	Change
Net sales	$38	$48	$10
Contribution to pre-tax earnings	$12	$15	$3
Adjusted EBITDA	$28	$37	$9

3Q 2016 Performance - Earnings and Adjusted EBITDA improved compared to the second quarter. Real Estate sales increased, while contribution to earnings was impacted by higher land basis on the mix of properties sold. Earnings from Energy and Natural Resources operations were slightly higher.

4Q 2016 Outlook - Weyerhaeuser expects improved earnings and significantly higher Adjusted EBITDA from increased Real Estate sales in the fourth quarter.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS (millions)	2Q 2016	3Q 2016	Change
Net sales	$1,168	$1,194	$26
Contribution to pre-tax earnings	$156	$170	$14
Adjusted EBITDA	$189	$203	$14

3Q 2016 Performance - Average sales realizations for oriented strand board increased 7 percent and lumber sales realizations rose slightly compared to the second quarter. Lumber sales volumes and operating rates were slightly lower and log costs for Canadian and Western mills increased. Manufacturing costs for oriented strand board improved due to operational excellence initiatives and higher operating rates.

4Q 2016 Outlook - Weyerhaeuser expects seasonally lower earnings and Adjusted EBITDA from the Wood Products segment in the fourth quarter compared with the third quarter due to lower sales volumes across most product lines and seasonally weaker average sales realizations for oriented strand board. Fourth quarter Adjusted EBITDA, however, should be nearly double the fourth quarter of 2015.

DISCONTINUED OPERATIONS

Discontinued operations include the company's Cellulose Fibers segment, which consists of pulp mills, a liquid packaging board facility, and a printing papers joint venture. The sale of the liquid packaging board business closed on August 31, 2016. These results correspond to assets and liabilities that have been classified as discontinued operations on our balance sheet.

FINANCIAL HIGHLIGHTS (millions)	2Q 2016	3Q 2016	Change
Total net sales	$456	$420	($36)
Earnings from discontinued operations before income taxes	$52	$47	($5)
Income taxes	($14)	($23)	($9)
Net earnings from operations	$38	$24	($14)
Net gain on divestiture of Liquid Packaging Board	—	$41	$41
Net earnings from discontinued operations	$38	$65	$27

3Q 2016 Performance - Improved sales realizations for pulp were more than offset by increased maintenance expense due to additional scheduled maintenance outage days. Third quarter includes a net after tax gain of $41 million on the divestiture of the liquid packaging board business.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control more than 13 million acres of timberlands, primarily in the U.S., and manage additional timberlands under long-term licenses in Canada. We manage these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. We are also one of the largest manufacturers of wood and cellulose fibers products. Our company is a real estate investment trust. In February 2016, we merged with Plum Creek Timber Company, Inc. In 2015, Weyerhaeuser and Plum Creek, on a combined basis, generated approximately $8.5 billion in net sales and employed nearly 14,000 people who serve customers worldwide. We are listed on the Dow Jones World Sustainability Index. Our common stock trades on the New York Stock Exchange under the symbol WY. Learn more at www.weyerhaeuser.com.

EARNINGS CALL INFORMATION

Weyerhaeuser will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on October 28 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.

To join the conference call from within North America, dial 877-296-9413 (access code: 3192814) at least 15 minutes prior to the call. Those calling from outside North America should dial 706-679-2458 (access code: 3192814). Replays will be available for two weeks at 855-859-2056 (access code: 3192814) from within North America and at 404-537-3406 (access code: 3192814) 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. These statements are based on our current expectations and various assumptions that are subject to risks and uncertainties. Factors listed below, as well as other factors, may cause actual results to differ significantly from these forward-looking statements. There is no guarantee that any of the events anticipated by these forward-looking statements will occur. If any of the events occur, there is no guarantee what effect they will have on company operations or financial condition. The company will not update these forward-looking statements after the date of this news release.

Some forward-looking statements discuss the company's plans, strategies, expectations and intentions. They use words such as "expects," "may," "will," "believes," "should," "approximately," "anticipates," "estimates," and "plans." In addition, these words may use the positive or negative or other variations of those and similar words.

This release contains forward-looking statements regarding the company's expectations during the fourth quarter of 2016, including with respect to: earnings and Adjusted EBITDA; cost and operational synergies from the merger with Plum Creek; domestic and export log realizations, harvest volumes and silviculture expense; real estate sales; and sales volumes across Wood Products product lines and expected realizations for oriented strand board.

Major risks, uncertainties and assumptions that affect the company's businesses and may cause actual results to differ from these forward-looking statements, include, but are not limited to:

the effect of general economic conditions, including employment rates, interest rate levels, housing starts, availability of financing for home mortgages and strength of the U.S. dollar;
market demand for our products, including market demand for our timberland properties with higher and better uses, which is related to, among other factors, the strength of the various U.S. business segments and U.S. and international economic conditions;
performance of our manufacturing operations, including maintenance requirements;
potential disruptions in our manufacturing operations;
the level of competition from domestic and foreign producers;
raw material availability and prices;
the effect of weather;
the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;
energy prices;
market demand for the company's products, including market demand for our timberland properties that have 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;
the successful execution of our internal plans and strategic initiatives,
the successful and timely execution and integration of our strategic acquisitions, including our ability to realize expected benefits and synergies, and the successful and timely execution of our strategic divestitures, each of which is subject to a number of risks and conditions beyond our control including, but not limited to, timing and required regulatory approvals;
transportation and labor availability and costs;
federal tax policies;
the effect of forestry, land use, environmental and other governmental regulations;
legal proceedings;
performance of pension fund investments and related derivatives;
the effect of timing of retirements and changes in the market price of our common stock on charges for share-based compensation;
changes in accounting principles;
changes in implementation of acquisition accounting; and
other factors described under "Risk Factors" in our 2015 Annual Report on Form 10-K and in our Registration Statement on Form S-4/A filed on December 23, 2015.

The company also is a large exporter and is affected by changes in economic activity in Europe and Asia, particularly Japan and China. It is affected by changes in currency exchange rates, particularly the relative value of the U.S. dollar to the euro, yen and the Canadian dollar, and the relative value of the euro and the yen. Restrictions on international trade or tariffs imposed on imports and disruptions in shipping and transportation also may affect the company.

For more information contact:
Analysts - Beth Baum or Krista Kochivar (206) 539-3907
Media - Kate Tate (206) 539-4420

RECONCILIATION OF ADJUSTED EBITDA TO NET EARNINGS

We reconcile Adjusted EBITDA to net earnings for the consolidated company and to operating income for the business segments, as those are the most directly comparable U.S. GAAP measures for each.

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

DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items		Total
Adjusted EBITDA by Segment:
Net earnings									$	227
Earnings from discontinued operations, net of income taxes									(65)
Interest expense, net of capitalized interest									114
Income taxes									22
Net contribution to earnings	$	122	$	15	$	170	$	(9)	$	298
Equity (earnings) loss from joint ventures	—		(1)		—		(8)		(9)
Interest income and other	—		—		—		(15)		(15)
Operating income	122		14		170		(32)		274
Depreciation, depletion and amortization	101		4		33		—		138
Basis of real estate sold	—		19		—		—		19
Non-operating pension and postretirement credits	—		—		—		(11)		(11)
Special items⁽¹⁾	—		—		—		14		14
Adjusted EBITDA	$	223	$	37	$	203	$	(29)	$	434

(1) Pre-tax special items include $14 million of Plum Creek merger-related costs.

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

DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items		Total
Adjusted EBITDA by Segment:
Net earnings									$	168
Earnings from discontinued operations, net of income taxes									(38)
Interest expense, net of capitalized interest									114
Income taxes									31
Net contribution to earnings	$	125	$	12	$	156	$	(18)	$	275
Equity (earnings) loss from joint ventures	—		—		—		(7)		(7)
Interest income and other	—		—		—		(10)		(10)
Operating income	125		12		156		(35)		258
Depreciation, depletion and amortization	95		3		33		2		133
Basis of real estate sold	—		13		—		—		13
Non-operating pension and postretirement credits	—		—		—		(10)		(10)
Special items⁽¹⁾	—		—		—		19		19
Adjusted EBITDA	$	220	$	28	$	189	$	(24)	$	413


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

The table below reconciles Adjusted EBITDA for the quarter ended September 30, 2015:

DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items		Total
Adjusted EBITDA by Segment:
Net earnings									$	191
Earnings from discontinued operations, net of income taxes									(59)
Interest expense, net of capitalized interest									87
Income taxes									(44)
Net contribution to earnings	$	107	$	19	$	85	$	(36)	$	175
Equity (earnings) loss from joint ventures	—		—		—		—		—
Interest income and other	—		—		—		(9)		(9)
Operating income	107		19		85		(45)		166
Depreciation, depletion and amortization	51		—		26		2		79
Basis of real estate sold	—		2		—		—		2
Non-operating pension and postretirement credits	—		—		—		(2)		(2)
Adjusted EBITDA	$	158	$	21	$	111	$	(45)	$	245



Weyerhaeuser Company							Exhibit 99.2
Q3.2016 Analyst Package
Preliminary results (unaudited)

Consolidated Statement of Operations⁽¹⁾⁽²⁾

in millions	Q2		Q3				Year-to-date
	June 30, 2016		September 30, 2016		September 30, 2015		September 30, 2016		September 30, 2015
Net sales	$	1,655	$	1,709	$	1,355	$	4,769	$	3,980
Cost of products sold	1,258		1,314		1,073		3,661		3,123
Gross margin	397		395		282		1,108		857
Selling expenses	22		22		24		67		73
General and administrative expenses	94		78		55		248		184
Research and development expenses	4		5		4		14		12
Charges for integration and restructuring, closures and asset impairments	14		16		2		141		16
Other operating costs (income), net	5		—		31		(47)		56
Operating income from continuing operations	258		274		166		685		516
Equity earnings from joint ventures	7		9		—		21		—
Interest income and other	10		15		9		34		27
Interest expense, net of capitalized interest	(114)		(114)		(87)		(323)		(254)
Earnings from continuing operations before income taxes	161		184		88		417		289
Income taxes	(31)		(22)		44		(64)		36
Earnings from continuing operations	130		162		132		353		325
Earnings from discontinued operations, net of income taxes	38		65		59		123		111
Net earnings	168		227		191		476		436
Dividends on preference shares	(11)		—		(11)		(22)		(33)
Net earnings attributable to Weyerhaeuser common shareholders	$	157	$	227	$	180	$	454	$	403

⁽¹⁾ Discontinued operations as presented herein consist of the operations of our Cellulose Fibers segment. The corresponding assets and liabilities have been classified as held for sale on our balance sheet as of June 30, 2016. All periods presented have been revised to separate the results of discontinued operations from the results of our continuing operations. Detailed operating results of discontinued operations are presented on page 10.
⁽²⁾Amounts presented reflect the balances and results of operations acquired in our merger with Plum Creek Timber, Inc., beginning on the merger date of February 19, 2016.

Per Share Information

	Q2		Q3				Year-to-date
	June 30, 2016		September 30, 2016		September 30, 2015		September 30, 2016		September 30, 2015
Earnings per share attributable to Weyerhaeuser common shareholders, basic:
Continuing operations	$	0.16	$	0.22	$	0.24	$	0.47	$	0.56
Discontinued operations	0.05		0.08		0.11		0.17		0.22
Net earnings per share	$	0.21	$	0.30	$	0.35	$	0.64	$	0.78

Earnings per share attributable to Weyerhaeuser common shareholders, diluted:
Continuing operations	$	0.16	$	0.21	$	0.23	$	0.46	$	0.56
Discontinued operations	0.05		0.09		0.12		0.18		0.21
Net earnings per share	$	0.21	$	0.30	$	0.35	$	0.64	$	0.77

Dividends paid per common share	$	0.31	$	0.31	$	0.31	$	0.93	$	0.89

Weighted average shares outstanding (in thousands):
Basic	743,140		749,587		514,301		708,395		518,121
Diluted	747,701		754,044		517,088		712,205		521,455

Common shares outstanding at end of period (in thousands)	733,010		747,933		511,033		747,933		511,033

Weyerhaeuser Company
Q3.2016 Analyst Package
Preliminary results (unaudited)

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

in millions	Q2		Q3				Year-to-date
	June 30, 2016		September 30, 2016		September 30, 2015		September 30, 2016		September 30, 2015
Net earnings	$	168	$	227	$	191	$	476	$	436
Earnings from discontinued operations, net of income taxes	(38)		(65)		(59)		(123)		(111)
Equity earnings from joint ventures	(7)		(9)		—		(21)		—
Interest income and other	(10)		(15)		(9)		(34)		(27)
Interest expense, net of capitalized interest	114		114		87		323		254
Income taxes	31		22		(44)		64		(36)
Operating income from continuing operations	258		274		166		685		516
Depreciation, depletion and amortization	133		138		79		375		243
Basis of real estate sold	13		19		2		49		13
Non-operating pension and postretirement credits	(10)		(11)		(2)		(33)		(8)
Special items	19		14		—		107		13
Adjusted EBITDA*	$	413	$	434	$	245	$	1,183	$	777

*Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Beginning in the first quarter of 2016, we revised our definition of Adjusted EBITDA to add back the basis of real estate sold. We have revised our prior-period presentation to conform to our current reporting. Adjusted EBITDA, as we define it, is operating income from continuing operations adjusted for depreciation, depletion, amortization, basis of real estate sold, pension and postretirement costs not allocated to business segments and special items. Adjusted EBITDA excludes results from joint ventures. Our definition of Adjusted EBITDA may be different from similarly titled measures reported by other companies. Adjusted EBITDA should not be considered in isolation from and is not intended to represent an alternative to our GAAP results.



Special Items Included in Net Earnings (income tax affected)

in millions	Q2		Q3				Year-to-date
	June 30, 2016		September 30, 2016		September 30, 2015		September 30, 2016		September 30, 2015
Net earnings attributable to Weyerhaeuser common shareholders	$	157	$	227	$	180	$	454	$	403
Plum Creek merger- and integration-related costs	4		10		—		112		—
Gain on sale of non-strategic asset	—		—		—		(22)		—
Legal expense	7		—		—		7		—
Restructuring, impairments and other charges	—		—		—		—		9
Net earnings attributable to Weyerhaeuser common shareholders before special items	168		237		180		551		412
Earnings from discontinued operations, net of income taxes	(38)		(65)		(59)		(123)		(111)
Net earnings from continuing operations attributable to Weyerhaeuser common shareholders before special items	$	130	$	172	$	121	$	428	$	301

per share	Q2		Q3				Year-to-date
	June 30, 2016		September 30, 2016		September 30, 2015		September 30, 2016		September 30, 2015
Net earnings per diluted share attributable to Weyerhaeuser common shareholders	$	0.21	$	0.30	$	0.35	$	0.64	$	0.77
Plum Creek merger- and integration-related costs	—		0.02		—		0.16		—
Gain on sale of non-strategic asset	—		—		—		(0.03)		—
Legal expense	0.01		—		—		0.01		—
Restructuring, impairments and other charges	—		—		—		—		0.02
Net earnings per diluted share attributable to Weyerhaeuser common shareholders before special items	0.22		0.32		0.35		0.78		0.79
Earnings from discontinued operations, net of income taxes	(0.05)		(0.09)		(0.12)		(0.18)		(0.21)
Net earnings from continuing operations per diluted share attributable to Weyerhaeuser common shareholders before special items	$	0.17	$	0.23	$	0.23	$	0.60	$	0.58



Weyerhaeuser Company
Q3.2016 Analyst Package
Preliminary results (unaudited)
Consolidated Balance Sheet

in millions	June 30, 2016		September 30, 2016		December 31, 2015

ASSETS
Current assets:
Cash and cash equivalents	$	485	$	769	$	1,011
Receivables, less allowances	409		412		276
Receivables for taxes	7		5		30
Inventories	387		368		325
Prepaid expenses and other current assets	132		150		63
Assets of discontinued operations	1,908		1,652		1,934
Total current assets	3,328		3,356		3,639
Property and equipment, net	1,462		1,476		1,233
Construction in progress	172		202		144
Timber and timberlands at cost, less depletion charged to disposals	14,474		14,424		6,479
Minerals and mineral rights, net	319		321		14
Investments in and advances to joint ventures	905		73		—
Goodwill	40		40		40
Deferred tax assets	250		122		254
Other assets	424		317		302
Restricted financial investments held by variable interest entities	615		615		615
Total assets	$	21,989	$	20,946	$	12,720

LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	—	$	1,981	$	—
Notes payable	1		1		4
Accounts payable	300		234		204
Accrued liabilities	590		533		427
Liabilities of discontinued operations	666		578		690
Total current liabilities	1,557		3,327		1,325
Note payable to timberland venture	830		—		—
Long-term debt	8,013		6,329		4,787
Long-term debt (nonrecourse to the company) held by variable interest entities	511		511		511
Deferred pension and other postretirement benefits	926		875		987
Deposit received from contribution of timberlands to related party	437		429		—
Other liabilities	285		285		241
Total liabilities	12,559		11,756		7,851
Total equity	9,430		9,190		4,869
Total liabilities and equity	$	21,989	$	20,946	$	12,720



Weyerhaeuser Company
Q3.2016 Analyst Package
Preliminary results (unaudited)
Consolidated Statement of Cash Flows

in millions	Q2		Q3				Year-to-date
	June 30, 2016		September 30, 2016		September 30, 2015		September 30, 2016		September 30, 2015
Cash flows from operations:
Net earnings	$	168	$	227	$	191	$	476	$	436
Noncash charges (credits) to income:
Depreciation, depletion and amortization	147		139		118		428		359
Basis of real estate sold	13		19		2		49		13
Deferred income taxes, net	38		40		(6)		96		10
Pension and other postretirement benefits	1		—		11		5		32
Other noncash charges (credits)	16		(57)		23		(74)		65
Change in:
Receivables less allowances	(43)		(6)		(15)		(96)		(41)
Receivable for taxes	25		2		(3)		37		11
Inventories	60		32		6		49		(9)
Prepaid expenses	—		(2)		—		(3)		(2)
Accounts payable and accrued liabilities	106		25		(22)		61		(47)
Pension and postretirement contributions	(12)		(54)		(20)		(83)		(59)
Distributions received from joint ventures	—		—		—		5		—
Other	(27)		(18)		(3)		(64)		(32)
Net cash from operations	492		347		282		886		736

Cash flows from investing activities:
Capital expenditures:
Purchases of property and equipment	(83)		(120)		(106)		(260)		(276)
Timberlands reforestation costs	(18)		(9)		(6)		(43)		(33)
Acquisition of timberlands	(2)		(2)		(2)		(10)		(34)
Proceeds from sale of assets	13		296		1		379		7
Proceeds from contribution of timberlands to related party	440		—		—		440		—
Distributions received from joint ventures	3		7		—		34		—
Cash and cash equivalents acquired in the merger with Plum Creek	—		—		—		9		—
Other	(3)		45		—		42		12
Cash from (used in) investing activities	350		217		(113)		591		(324)

Cash flows from financing activities:
Cash dividends on common shares	(228)		(231)		(159)		(700)		(460)
Cash dividends on preference shares	(11)		(11)		(11)		(22)		(22)
Proceeds from issuance of long-term debt	300		300		—		1,698		—
Payments of long-term debt	(3)		—		—		(723)		—
Repurchase of common stock	(831)		(374)		(77)		(2,003)		(484)
Other	8		39		5		40		22
Cash used in financing activities	(765)		(277)		(242)		(1,710)		(944)

Net change in cash and cash equivalents	77		287		(73)		(233)		(532)

Cash and cash equivalents from continuing operations at beginning of period	411		485		1,117		1,011		1,577
Cash and cash equivalents from discontinued operations at beginning of period	4		7		4		1		3
Cash and cash equivalents at beginning of period	415		492		1,121		1,012		1,580

Cash and cash equivalents from continuing operations at end of period	485		769		1,046		769		1,046
Cash and cash equivalents from discontinued operations at end of period	7		10		2		10		2
Cash and cash equivalents at end of period	$	492	$	779	$	1,048	$	779	$	1,048

Cash paid (received) during the year for:
Interest, net of amount capitalized	$	92	$	142	$	118	$	367	$	290
Income taxes	$	(12)	$	(1)	$	(1)	$	(26)	$	4

Noncash investing and financing activities:
Equity issued as consideration for our merger with Plum Creek	$	—	$	—	$	—	$	6,383	$	—



Weyerhaeuser Company					Total Company Statistics
Q3.2016 Analyst Package
Preliminary results (unaudited)

Selected Total Company Items

in millions	Q2		Q3				Year-to-date
	June 30, 2016		September 30, 2016		September 30, 2015		September 30, 2016		September 30, 2015
Pension and postretirement costs:
Pension and postretirement costs allocated to business segments	$	8	$	8	$	8	$	23	$	27
Pension and postretirement credits not allocated	(10)		(11)		(2)		(33)		(8)
Accelerated pension costs included in Plum Creek merger-related costs (not allocated)	—		—		—		5		—
Total pension and postretirement costs for continuing operations	(2)		(3)		6		(5)		19
Pension and postretirement service costs directly attributable to discontinued operations	3		3		5		10		13
Total company pension and postretirement costs	$	1	$	—	$	11	$	5	$	32

Cash spent for capital expenditures for continuing operations	$	(89)	$	(100)	$	(85)	$	(240)	$	(224)



Weyerhaeuser Company		Timberlands Segment
Q3.2016 Analyst Package
Preliminary results (unaudited)

Segment Statement of Operations

in millions		Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Sales to unaffiliated customers		$	471	$	484	$	310	$	1,342	$	961
Intersegment sales		193		216		210		631		625
Total net sales		664		700		520		1,973		1,586
Cost of products sold		509		559		398		1,527		1,176
Gross margin		155		141		122		446		410
Selling expenses		2		1		1		4		4
General and administrative expenses		32		20		21		80		61
Research and development expenses		4		4		3		12		10
Other operating income, net		(8)		(6)		(10)		(26)		(28)
Operating income and Net contribution to earnings		$	125	$	122	$	107	$	376	$	363

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

in millions		Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Operating income		$	125	$	122	$	107	$	376	$	363
Depreciation, depletion and amortization		95		101		51		266		155
Adjusted EBITDA*		$	220	$	223	$	158	$	642	$	518
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.

Selected Segment Items

		Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Total decrease (increase) in working capital ⁽¹⁾		$	28	$	(15)	$	(12)	$	(40)	$	14
Cash spent for capital expenditures		$	(31)	$	(26)	$	(17)	$	(77)	$	(58)
⁽¹⁾Working capital does not include cash balances. Represents the change in combined working capital of Timberlands and Real Estate & ENR.

Segment Statistics⁽²⁾

		Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Third Party Net Sales (millions)	Delivered logs:
	West	$	232	$	217	$	196	$	664	$	627
	South	154		160		64		415		180
	North	19		29		—		61		—
	Other	7		11		6		25		17
	Total delivered logs	412		417		266		1,165		824
	Stumpage and pay-as-cut timber	23		24		13		62		27
	Products from international operations	21		21		20		58		69
	Recreational and other lease revenue	8		15		7		29		18
	Other revenue	7		7		4		28		23
	Total	$	471	$	484	$	310	$	1,342	$	961
Delivered Logs Third Party Sales Realizations (per ton)	West	$	98.21	$	98.18	$	98.67	$	98.99	$	100.98
	South	$	35.54	$	35.27	$	37.60	$	35.64	$	37.23
	North	$	65.43	$	59.17	$	—	$	61.06	$	—
	International	$	23.29	$	24.27	$	16.97	$	20.48	$	18.41
Delivered Logs Third Party Sales Volumes (tons, thousands)⁽³⁾	West	2,363		2,209		1,992		6,705		6,207
	South	4,340		4,538		1,707		11,659		4,844
	North	292		503		—		1,005		—
	International	89		117		194		352		556
	Other	169		263		127		601		384
Fee Harvest Volumes (tons, thousands)⁽³⁾	West	2,980		2,744		2,548		8,525		7,967
	South	7,061		6,992		3,648		19,083		10,548
	North	454		678		—		1,392		—
	International	248		242		220		789		725
	Other	181		191		—		372		—
⁽²⁾The Western region includes Washington and Oregon. The Southern region includes Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas and Oklahoma. The Northern region includes West Virginia, Maine, New Hampshire, Vermont, Michigan, Wisconsin and Montana. Other includes our Canadian operations and managed Twin Creeks operations.
⁽³⁾ Beginning in first quarter 2016, we report log sales and fee harvest volumes in tons. Prior period volumes have been converted from cubic meters to tons using annualized 2015 conversion factors as follows: West: 1.056 m³ = 1 ton South: 0.818 m³ = 1 ton Canada (in Other): 1.244 m³ = 1 ton International: 0.907 m³ = 1 ton



Weyerhaeuser Company						Real Estate, Energy and Natural Resources Segment
Q3.2016 Analyst Package
Preliminary results (unaudited)

Segment Statement of Operations

in millions		Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Total net sales		$	38	$	48	$	22	$	125	$	69
Cost of products sold		19		26		3		65		15
Gross margin		19		22		19		60		54
Selling expenses		—		—		—		—		—
General and administrative expenses		8		7		—		19		3
Charges for integration, restructuring, closures and asset impairments		1		—		—		1		—
Other operating costs (income), net		(2)		1		—		(1)		(1)
Operating income		12		14		19		41		52
Equity earnings (loss) from joint ventures⁽¹⁾		—		1		—		1		—
Net contribution to earnings		$	12	$	15	$	19	$	42	$	52
⁽¹⁾Equity earnings (loss) from joint ventures attributed to the Real Estate and ENR segment are generated from our investments in our real estate development ventures.

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

in millions		Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Operating income		$	12	$	14	$	19	$	41	$	52
Depreciation, depletion and amortization		3		4		—		9		—
Basis of real estate sold		13		19		2		49		13
Adjusted EBITDA*		$	28	$	37	$	21	$	99	$	65
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.

Selected Segment Items

		Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Cash spent for capital expenditures		$	(1)	$	—	$	—	$	(1)	$	—

Segment Statistics

		Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Net Sales (millions)	Real Estate	$	26	$	31	$	15	$	87	$	50
	Energy and natural resources	12		17		7		38		19
	Total	$	38	$	48	$	22	$	125	$	69
Acres sold	Real Estate	10,020		12,853		5,030		38,098		20,625
Price per acre	Real Estate	$	2,555	$	2,354	$	2,635	$	2,271	$	2,175



Weyerhaeuser Company						Wood Products Segment
Q3.2016 Analyst Package
Preliminary results (unaudited)

Segment Statement of Operations

in millions		Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Sales to unaffiliated customers		$	1,146	$	1,177	$	1,023	$	3,302	$	2,950
Intersegment sales		22		17		20		61		61
Total net sales		1,168		1,194		1,043		3,363		3,011
Cost of products sold		957		980		914		2,799		2,646
Gross margin		211		214		129		564		365
Selling expenses		20		21		23		63		69
General and administrative expenses		30		24		21		81		74
Research and development expenses		—		1		1		2		2
Charges for integration and restructuring, closures and asset impairments		4		1		1		6		1
Other operating costs (income), net		1		(3)		(2)		(1)		1
Operating income and Net contribution to earnings		$	156	$	170	$	85	$	413	$	218

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

in millions		Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Operating income		$	156	$	170	$	85	$	413	$	218
Depreciation, depletion and amortization		33		33		26		96		79
Adjusted EBITDA*		$	189	$	203	$	111	$	509	$	297
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.

Selected Segment Items

		Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Total decrease (increase) in working capital ⁽¹⁾		$	35	$	49	$	23	$	(48)	$	(34)
Cash spent for capital expenditures		$	(52)	$	(71)	$	(68)	$	(152)	$	(165)
⁽¹⁾ Working capital does not include cash balances.

Segment Statistics

in millions, except for third-party sales realizations		Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Structural Lumber (board feet)	Third party net sales	$	498	$	495	$	455	$	1,412	$	1,339
	Third party sales realizations	$	399	$	401	$	372	$	389	$	385
	Third party sales volumes ⁽²⁾	1,249		1,233		1,224		3,634		3,474
	Production volumes	1,205		1,130		1,087		3,464		3,217
Engineered Solid Section (cubic feet)	Third party net sales	$	115	$	119	$	116	$	343	$	323
	Third party sales realizations	$	1,922	$	1,916	$	2,043	$	1,935	$	2,016
	Third party sales volumes ⁽²⁾	6.0		6.2		5.6		17.7		16.0
	Production volumes	5.9		5.7		5.2		17.2		15.8
Engineered I-joists (lineal feet)	Third party net sales	$	73	$	79	$	79	$	218	$	216
	Third party sales realizations	$	1,471	$	1,475	$	1,520	$	1,483	$	1,511
	Third party sales volumes ⁽²⁾	50		53		52		147		143
	Production volumes	46		49		50		141		141
Oriented Strand Board (square feet 3/8')	Third party net sales	$	182	$	199	$	151	$	544	$	435
	Third party sales realizations	$	240	$	256	$	194	$	237	$	194
	Third party sales volumes⁽²⁾	761		776		778		2,296		2,249
	Production volumes	733		777		746		2,259		2,150
Softwood Plywood (square feet 3/8')	Third party net sales	$	50	$	48	$	33	$	133	$	102
	Third party sales realizations	$	382	$	378	$	330	$	369	$	349
	Third party sales volumes⁽²⁾	131		127		100		368		290
	Production volumes	111		105		67		304		191
⁽²⁾Volumes include sales of internally produced products and products purchased for resale primarily through our distribution business.



Weyerhaeuser Company					Unallocated Items
Q3.2016 Analyst Package
Preliminary results (unaudited)

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

Contribution to Earnings

in millions	Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Unallocated corporate function expenses	$	(24)	$	(21)	$	(14)	$	(62)	$	(48)
Unallocated share-based compensation	1		(4)		6		(5)		10
Unallocated pension & postretirement credits	10		11		2		33		8
Foreign exchange gains (losses)	1		(1)		(20)		13		(40)
Elimination of intersegment profit in inventory and LIFO	(2)		2		3		(6)		7
Gain on sale of non-strategic asset	8		1		—		45		2
Charges for integration and restructuring, closures and asset impairments:
Plum Creek merger- and integration-related costs	(8)		(14)		—		(132)		—
Other restructuring, closures and asset impairments	(1)		(1)		(1)		(2)		(15)
Other	(20)		(5)		(21)		(29)		(41)
Operating income (loss)	(35)		(32)		(45)		(145)		(117)
Equity earnings from joint venture ⁽¹⁾	7		8		—		20		—
Interest income and other	10		15		9		34		27
Net contribution to earnings	$	(18)	$	(9)	$	(36)	$	(91)	$	(90)
⁽¹⁾Equity earnings from joint venture included in Unallocated Items is generated from our investment in our timberland venture.

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

in millions	Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Operating income (loss)	$	(35)	$	(32)	$	(45)	$	(145)	$	(117)
Depreciation, depletion and amortization	2		—		2		4		9
Non-operating pension and postretirement credits	(10)		(11)		(2)		(33)		(8)
Special items	19		14		—		107		13
Adjusted EBITDA*	$	(24)	$	(29)	$	(45)	$	(67)	$	(103)
*See definition of Adjusted EBITDA (a non-GAAP measure) on page 2.

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

	Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Plum Creek merger- and integration-related costs	(8)		(14)		—		(132)		—
Gain on sale of non-strategic asset	—		—		—		36		—
Legal expense	(11)		—		—		(11)		—
Restructuring, impairments and other charges	—		—		—		—		(13)
Total	$	(19)	$	(14)	$	—	$	(107)	$	(13)

Unallocated Selected Items

	Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Cash spent for capital expenditures	$	(5)	$	(3)	$	—	$	(10)	$	(1)



Weyerhaeuser Company						Discontinued Operations
Q3.2016 Analyst Package
Preliminary results (unaudited)

Discontinued operations consist of our Cellulose Fibers businesses, which were previously disclosed as a separate reportable business segment.

Discontinued Operations Statement of Operations

in millions		Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Total net sales		$	456	$	420	$	471	$	1,306	$	1,385
Costs of products sold		374		350		372		1,110		1,181
Gross margin		82		70		99		196		204
Selling expenses		3		3		3		10		10
General and administrative expenses		8		7		5		24		21
Research and development expenses		2		—		2		3		5
Charges for integration and restructuring, closures and asset impairments		25		13		1		44		1
Other operating income, net		(10)		(2)		(5)		(21)		(19)
Operating income		54		49		93		136		186
Equity loss from joint venture		(1)		—		(5)		(3)		(18)
Interest expense, net of capitalized interest		(1)		(2)		(1)		(5)		(5)
Earnings from discontinued operations before income taxes		52		47		87		128		163
Income taxes		(14)		(23)		(28)		(46)		(52)
Net earnings from operations		38		24		59		82		111
Net gain on divestiture of Liquid Packaging Board		—		41		—		41		—
Net earnings from discontinued operations		$	38	$	65	$	59	$	123	$	111

Discontinued Operations Selected Items

in millions		Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Depreciation, depletion and amortization		$	15	$	—	$	39	$	53	$	116
Cash spent for capital expenditures		$	(12)	$	(29)	$	(27)	$	(63)	$	(85)

Discontinued Operations Statistics

		Q2.2016		Q3.2016		Q3.2015		YTD.2016		YTD.2015
Pulp (air-dry metric tons)	Third party net sales (millions)	$	350	$	349	$	383	$	1,050	$	1,111
	Third party sales realizations	$	762	$	780	$	818	$	766	$	831
	Third party sales volumes (thousands)	460		446		468		1,370		1,337
	Production volumes (thousands)	454		426		477		1,337		1,341
Liquid Packaging Board (metric tons)	Third party net sales (millions)	$	85	$	61	$	74	$	213	$	232
	Third party sales realizations	$	1,127	$	1,144	$	1,168	$	1,112	$	1,194
	Third party sales volumes (thousands)	76		53		63		192		194
	Production volumes (thousands)	65		48		68		177		192