Weyerhaeuser(US:WY)2025-07-25 20:16Part I – Financial Information This section provides a comprehensive overview of the company's financial performance, statements, and disclosures Financial Statements Net sales and earnings decreased for Q2 and YTD 2025, with Q2 net earnings at $87 million and total assets slightly declining to $16.48 billion Consolidated Statement of Operations Highlights | DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE | Q2 2025 ($ millions) | Q2 2024 ($ millions) | YTD 2025 ($ millions) | YTD 2024 ($ millions) | | :--- | :--- | :--- | :--- | :--- | | Net sales | $1,884 | $1,939 | $3,647 | $3,735 | | Operating income | $178 | $270 | $357 | $466 | | Net earnings | $87 | $173 | $170 | $287 | | Earnings per share, diluted | $0.12 | $0.24 | $0.23 | $0.39 | Consolidated Balance Sheet Highlights | DOLLAR AMOUNTS IN MILLIONS | June 30, 2025 ($ millions) | Dec 31, 2024 ($ millions) | | :--- | :--- | :--- | | Total current assets | $1,758 | $1,748 | | Total assets | $16,478 | $16,536 | | Total current liabilities | $1,694 | $977 | | Total liabilities | $6,954 | $6,815 | | Total equity | $9,524 | $9,721 | Consolidated Statement of Cash Flows Highlights (Year-to-Date) | DOLLAR AMOUNTS IN MILLIONS | YTD June 2025 ($ millions) | YTD June 2024 ($ millions) | | :--- | :--- | :--- | | Net cash from operations | $466 | $556 | | Net cash from investing activities | $(208) | $(220) | | Net cash from financing activities | $(350) | $(503) | | Net change in cash | $(92) | $(167) | Note 2: Business Segments Q2 2025 segment earnings: Timberlands $88 million, Real Estate & ENR $106 million, Wood Products $46 million, with notable shifts from Q2 2024 Net Contribution to Earnings by Segment (Q2 2025 vs Q2 2024) | DOLLAR AMOUNTS IN MILLIONS | Q2 2025 ($ millions) | Q2 2024 ($ millions) | | :--- | :--- | :--- | | Timberlands | $88 | $81 | | Real Estate & ENR | $106 | $59 | | Wood Products | $46 | $196 | | Unallocated Items (Charge) | $(75) | $(63) | Total Assets by Segment | DOLLAR AMOUNTS IN MILLIONS | June 30, 2025 ($ millions) | Dec 31, 2024 ($ millions) | | :--- | :--- | :--- | | Timberlands and Real Estate & ENR | $12,455 | $12,545 | | Wood Products | $3,278 | $3,116 | | Unallocated items | $745 | $875 | | Consolidated | $16,478 | $16,536 | Note 4: Net Earnings Per Share and Share Repurchases The company completed its 2021 $1 billion share repurchase program and initiated a new $1 billion program in Q2 2025, repurchasing $100 million in shares - On May 8, 2025, the board approved a new $1 billion share repurchase program (the 2025 Repurchase Program), terminating the completed 2021 program38 - During Q2 2025, the company repurchased 3.9 million common shares for approximately $100 million Year-to-date 2025 repurchases totaled 4.7 million shares for $125 million39 Note 8: Long-Term Debt and Line of Credit The company repaid $210 million in debentures, secured a new $300 million term loan, and expanded its revolving credit facility to $1.75 billion - In Q1 2025, repaid $139 million 8.50% debentures and $71 million 7.95% debentures at maturity46 - Entered into a new $300 million senior unsecured term loan maturing in April 203046 - In June 2025, the revolving credit facility was amended, extending the expiration to June 2030 and increasing borrowing capacity to $1.75 billion No borrowings were outstanding as of June 30, 202547 Note 15 & 16: Acquisitions and Divestitures The company is acquiring 117,000 acres of timberlands for $375 million and divesting the Princeton lumber mill for $85 million - Announced the acquisition of 117,000 acres of timberlands in North Carolina and Virginia for approximately $375 million, expected to close in Q3 202565 - Agreed to sell the Princeton lumber mill for approximately $85 million As of June 30, 2025, assets held for sale related to this divestiture totaled $65 million6768 Management's Discussion and Analysis (MD&A) Q2 2025 performance decline attributed to lower Wood Products and Timberlands sales, partially offset by Real Estate & ENR gains, while maintaining strong liquidity Economic and Market Conditions Q2 2025 saw a 5.3% decrease in U.S. housing starts and lower lumber/OSB prices due to elevated mortgage rates, though long-term housing fundamentals remain favorable - U.S. housing starts for Q2 2025 averaged 1.3 million units, a 5.3% decrease from Q1 2025 Single-family starts, a key driver for the business, decreased 9.5%75 - In Q2 2025, the Random Lengths Framing Lumber Composite price averaged $453/MBF, and the OSB Composite averaged $304/MSF, with both decreasing through the quarter77 - 30-year mortgage rates increased slightly from 6.7% in Q1 2025 to 6.8% in Q2 2025, impacting housing affordability82 Consolidated Results of Operations Q2 2025 consolidated net sales decreased 3% to $1.88 billion and net earnings dropped 50% to $87 million, driven by Wood Products and Timberlands declines Consolidated Results Summary (Q2 2025 vs Q2 2024) | DOLLAR AMOUNTS IN MILLIONS | Q2 2025 ($ millions) | Q2 2024 ($ millions) | Change ($ millions) | | :--- | :--- | :--- | :--- | | Net sales | $1,884 | $1,939 | $(55) | | Operating income | $178 | $270 | $(92) | | Net earnings | $87 | $173 | $(86) | - The $92 million decrease in operating income was primarily due to a $79 million decrease in consolidated gross income and a $25 million product remediation recovery recorded in Q2 202489 Segment Performance: Timberlands Timberlands segment earnings increased to $88 million in Q2 2025 despite a 9% decrease in net sales, driven by lower costs of sales Timberlands Segment Results (Q2 2025 vs Q2 2024) | DOLLAR AMOUNTS IN MILLIONS | Q2 2025 ($ millions) | Q2 2024 ($ millions) | Change ($ millions) | | :--- | :--- | :--- | :--- | | Total sales | $529 | $555 | $(26) | | Costs of sales | $416 | $450 | $(34) | | Operating income | $88 | $80 | $8 | - Net sales to unaffiliated customers decreased by $36 million (9%), primarily from a 14% decrease in Western log sales volumes and a 4% decrease in sales realizations96 Segment Performance: Real Estate, Energy & Natural Resources Real Estate & ENR segment operating income surged 80% to $106 million in Q2 2025, driven by a 41% increase in net sales from higher per-acre prices Real Estate Sales Statistics (Q2 2025 vs Q2 2024) | | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Acres sold | 24,103 acres | 37,665 acres | (13,562) acres | | Average price per acre | $4,757 | $2,062 | $2,695 | - Net sales increased by $45 million (41%) primarily due to the higher average price per acre106 Segment Performance: Wood Products Wood Products operating income fell 77% to $46 million in Q2 2025, mainly from lower OSB sales realizations, partially offset by structural lumber gains Wood Products Segment Results (Q2 2025 vs Q2 2024) | DOLLAR AMOUNTS IN MILLIONS | Q2 2025 ($ millions) | Q2 2024 ($ millions) | Change ($ millions) | | :--- | :--- | :--- | :--- | | Total Net Sales | $1,357 | $1,421 | $(64) | | Operating income | $46 | $196 | $(150) | - Oriented strand board sales decreased by $83 million due to a 31% decrease in sales realizations117 - Structural lumber sales increased by $82 million, driven by an 8% increase in sales realizations and a 7% increase in sales volumes114 Liquidity and Capital Resources The company maintains strong liquidity with $592 million cash and a $1.75 billion credit facility, projecting $400 million in 2025 capital expenditures - As of June 30, 2025, the company had $592 million in cash and cash equivalents and $1.75 billion of availability on its line of credit133 - Announced a plan to invest approximately $500 million to build a new TimberStrand® facility in Monticello, Arkansas, with construction beginning in 2025137 - Anticipated capital expenditures for 2025 are approximately $400 million, excluding about $130 million for the Monticello facility investment138 Performance and Liquidity Measures (Non-GAAP) Consolidated Adjusted EBITDA for Q2 2025 was $336 million, down from $410 million, primarily due to Wood Products, while Adjusted FAD was $311 million Adjusted EBITDA by Segment (Q2 2025 vs Q2 2024) | DOLLAR AMOUNTS IN MILLIONS | Q2 2025 ($ millions) | Q2 2024 ($ millions) | Change ($ millions) | | :--- | :--- | :--- | :--- | | Timberlands | $152 | $147 | $5 | | Real Estate & ENR | $143 | $102 | $41 | | Wood Products | $101 | $225 | $(124) | | Unallocated Items | $(60) | $(64) | $4 | | Total Adjusted EBITDA | $336 | $410 | $(74) | Adjusted FAD Reconciliation (Q2) | DOLLAR AMOUNTS IN MILLIONS | Q2 2025 ($ millions) | Q2 2024 ($ millions) | | :--- | :--- | :--- | | Net cash from operations | $396 | $432 | | Capital expenditures | $(107) | $(91) | | Adjustments | $22 | $(25) | | Adjusted FAD | $311 | $316 | Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate exposure on its $5.2 billion long-term debt, comprising $4.66 billion fixed-rate and $550 million variable-rate Long-Term Debt Obligations as of June 30, 2025 | DOLLAR AMOUNTS IN MILLIONS | Total ($ millions) | Fair Value ($ millions) | | :--- | :--- | :--- | | Fixed-rate debt | $4,655 | $4,606 | | Variable-rate debt | $550 | $550 | Controls and Procedures As of June 30, 2025, disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - The company's principal executive and financial officers concluded that disclosure controls and procedures were effective as of June 30, 2025166 - No material changes occurred in the company's internal control over financial reporting during Q2 2025167 Part II – Other Information This section provides additional disclosures including legal proceedings, risk factors, equity security purchases, and other relevant information Legal Proceedings Management believes no current legal proceedings will have a material adverse effect on the company's financial condition or operations - Management does not believe any current legal proceedings will have a material adverse effect on the company's consolidated financial statements53 Risk Factors No material changes were reported regarding the risk factors disclosed in the 2024 Annual Report on Form 10-K - No material changes were reported with respect to the risk factors disclosed in the 2024 Annual Report on Form 10-K169 Issuer Purchases of Equity Securities In Q2 2025, the company repurchased 3.9 million shares for $100 million, completing its 2021 program and initiating a new $1 billion repurchase program Share Repurchases During Q2 2025 | Period | Total Shares Purchased | Average Price Paid ($) | | :--- | :--- | :--- | | April 1 – April 30 | 2,671,016 | $25.64 | | May 1 – May 31 | 944,400 | $25.90 | | June 1 – June 30 | 273,516 | $26.13 | | Total | 3,888,932 | $25.74 | - A new $1 billion share repurchase program was approved on May 8, 2025 As of June 30, 2025, $974 million remained authorized for repurchases171172 Other Information No director or officer adopted, modified, or terminated a Rule 10b5-1 trading plan during Q2 2025 - No director or officer adopted, modified, or terminated a Rule 10b5-1 trading plan in Q2 2025173 Exhibits The report includes key exhibits such as the Amended and Restated Revolving Credit Facility Agreement, CEO/CFO certifications, and XBRL data files - Key exhibits include the Amended and Restated Revolving Credit Facility Agreement (10.1), CEO and CFO certifications (31.1, 31.2), and XBRL filings174