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Weyerhaeuser Reports Third Quarter Results

FEDERAL WAY, Wash., Oct 28, 2011 (BUSINESS WIRE) --

Weyerhaeuser Company (NYSE: WY) today reported net earnings of $157 million for the third quarter, or 29 cents per diluted share, on net sales from continuing operations of $1.6 billion. This compares with net earnings of $1.116 billion on net sales from continuing operations of $1.5 billion for the same period last year.

Earnings for the third quarter of 2011 include after-tax gains of $91 million from special items, including an $83 million benefit related to foreign tax credits. Excluding these items, the company reported net earnings of $66 million, or 12 cents per diluted share. This compares with net earnings before special items of $81 million in the third quarter of 2010. Earnings for the third quarter of 2010 included special items of $1.035 billion, primarily income tax adjustments related to Weyerhaeuser's conversion to a real estate investment trust (REIT).

"All of our businesses faced challenging markets in the third quarter, as the U.S. housing market languished and we experienced a slowdown in demand from China," said Dan Fulton, president and chief executive officer. "We remain focused on improving performance with today's level of demand, while being prepared to flex all of our operations as markets improve."

WEYERHAEUSER FINANCIAL HIGHLIGHTS 2011 2010
(millions, except per share data) 2Q 3Q 3Q
Net sales
From continuing operations $1,610 $1,569 $1,514
From discontinued operations (1) $163 $83 $150
Total net sales $1,773 $1,652 $1,664
Net earnings
From continuing operations $23 $133 $1,112
From discontinued operations (1) ($13) $24 $4
Net earnings $10 $157 $1,116
Weighted average shares outstanding, diluted (2) 541 540 318
Earnings per diluted share
From continuing operations $0.04 $0.25 $3.49
From discontinued operations (1) ($0.02) $0.04 $0.01
Earnings per diluted share $0.02 $0.29 $3.50
Net earnings before special items $32 $66 $81
Earnings per diluted share before special items $0.06 $0.12 $0.25
Net cash from operations $114 $117 $97
Net change in cash and cash equivalents ($582) $90 ($478)
Cash and cash equivalents at end of period $881 $971 $1,368

(1) Discontinued operations include Weyerhaeuser's hardwoods and Westwood Shipping Lines businesses, which were sold in the third quarter of 2011.

(2) Weyerhaeuser's outstanding shares increased substantially during the third quarter of 2010 due to a special dividend of approximately 324 million shares of common stock and $560 million in cash, paid on Sept. 1, 2010 in conjunction with the company's conversion to a REIT.

TIMBERLANDS
FINANCIAL HIGHLIGHTS (millions) 2Q 2011 3Q 2011 Change
Net sales $288 $252 ($36)
Contribution to pre-tax earnings before special items $112 $62 ($50)
Pre-tax gain from special items $0 $0 $0
GAAP contribution to pre-tax earnings $112 $62 ($50)

3Q 2011 Performance - The segment's earnings declined $50 million in the third quarter compared with the second. Earnings from disposition of non-strategic timberlands declined to $4 million, compared with $32 million in the second quarter. Average selling prices for Western logs were lower due to weakening Chinese and domestic markets. Selling prices for Southern logs also declined. The segment's silviculture and road costs increased seasonally. Fee harvest increased slightly compared with the second quarter, as a decline in Western harvest volume was offset by increased volume in the South.

4Q 2011 Outlook - Excluding earnings from disposition of non-strategic timberlands, Weyerhaeuser expects lower earnings from the Timberlands segment in the fourth quarter due to reduced fee harvest volumes and lower selling prices for Western logs. The company also anticipates seasonally higher road and silviculture costs.

WOOD PRODUCTS
FINANCIAL HIGHLIGHTS (millions) 2Q 2011 3Q 2011 Change
Net sales
From continuing operations $605 $603 ($2)
From discontinued operations $97 $27 ($70)
Total net sales $702 $630 ($72)
Contribution (charge) to pre-tax earnings before special items
From continuing operations ($53) ($43) $10
From discontinued operations $1 ($4) ($5)
Total charge to pre-tax earnings before special items ($52) ($47) $5
Pre-tax charge from special items ($9) ($46) ($37)
GAAP charge to pre-tax earnings ($61) ($93) ($32)

3Q 2011 Performance - Results from continuing operations improved $10 million compared with the second quarter, as reduced log costs were partially offset by slightly lower sales volumes across most product lines. Operating results for the discontinued hardwoods operations declined $5 million compared with the second quarter. Weyerhaeuser completed the sale of the hardwoods operations in the third quarter.

Third quarter special charges of $46 million are primarily comprised of asset impairments due to the permanent closure of four engineered wood products facilities, restructuring costs, and charges related to the sale of the hardwoods operations. Second quarter included special charges of $9 million related to the sale of the hardwoods operations.

4Q 2011 Outlook - Excluding special items, Weyerhaeuser anticipates a larger loss from continuing operations in the fourth quarter due to seasonally weaker market conditions. The company expects lower selling prices for lumber and oriented strand board and reduced sales volumes and operating rates across all product lines.

CELLULOSE FIBERS
FINANCIAL HIGHLIGHTS (millions) 2Q 2011 3Q 2011 Change
Net sales $526 $503 ($23)
Contribution to pre-tax earnings before special items $80 $135 $55
Pre-tax gain from special items $0 $0 $0
GAAP contribution to pre-tax earnings $80 $135 $55

3Q 2011 Performance - Third quarter earnings improved $55 million compared with second quarter. Maintenance costs decreased and production increased as the segment had no annual maintenance outages, compared with four planned outages in the second quarter. These improvements were partially offset by lower selling prices for pulp.

4Q 2011 Outlook - Weyerhaeuser expects slightly lower earnings from the Cellulose Fibers segment in the fourth quarter. The company anticipates lower selling prices for pulp and slightly higher shipment volumes.

REAL ESTATE
FINANCIAL HIGHLIGHTS (millions) 2Q 2011 3Q 2011 Change
Net sales $191 $211 $20
Contribution to pre-tax earnings before special items $8 $10 $2
Pre-tax gain from special items $0 $0 $0
GAAP contribution to pre-tax earnings $8 $10 $2

3Q 2011 Performance - The segment's earnings increased $2 million compared with the second quarter. Home closings increased 11 percent to 508 single-family homes. Average margins on homes closed improved due to mix. Third quarter included no earnings from the sale of land and lots, compared with $4 million in the second quarter.

4Q 2011 Outlook - Weyerhaeuser anticipates higher earnings from single-family homebuilding operations in the fourth quarter due to seasonally higher home closing volume.

CORPORATE AND OTHER
FINANCIAL HIGHLIGHTS (millions) 2Q 2011 3Q 2011 Change
Charge to pre-tax earnings before special items
From continuing operations ($11) ($16) ($5)
From discontinued operations ($11) ($4) $7
Total charge to pre-tax earnings before special items ($22) ($20) $2
Pre-tax gain from special items $0 $58 $58
GAAP contribution (charge) to pre-tax earnings ($22) $38 $60

Corporate and Other results from continuing operations declined $5 million, as foreign exchange losses reduced the segment's results by $18 million compared with the second quarter. This was offset primarily by $7 million of additional gains related to share-based compensation, as a decline in the company's stock price resulted in a larger mark-to-market adjustment.

Third quarter includes pre-tax gains of $58 million from special items, primarily the sale of Westwood Shipping Lines.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world's largest forest products companies, began operations in 1900. We grow and harvest trees, build homes and make a range of forest products essential to everyday lives. We manage our timberland on a sustainable basis in compliance with internationally recognized forestry standards. At the end of 2010, we employed approximately 14,000 employees in 10 countries. We have customers worldwide and generated $6.6 billion in sales in 2010. Our stock trades on the New York Stock exchange under the symbol WY. Additional information about us is available at http://www.weyerhaeuser.com.

EARNINGS CALL INFORMATION

Weyerhaeuser will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on Oct. 28 to discuss third quarter results.

To access the conference call from within North America, dial (877) 296-9413 (access code - 29869197) at least 15 minutes prior to the call. Those calling from outside North America should dial 1-(706) 679-2458 (access code - 29869197). Replays will be available for one week at (800) 642-1687 (access code - 29869197) from within North America and at 1-(706) 645-9291 (access code - 29869197) from outside North America.

The call is being webcast through Weyerhaeuser's Internet site at http://investor.weyerhaeuser.com and is accessible by selecting the "Q3 2011 Earnings Conference Call" link.

The webcast is available through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at http://www.fulldisclosure.com, Thomson's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson's password-protected site, StreetEvents (http://www.streetevents.com).

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 various assumptions and may not be accurate because of risks and uncertainties surrounding these assumptions. 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 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 terms.

This release contains forward-looking statements regarding the company's expectations for the fourth quarter of 2011, including reduced fee harvest volumes, lower selling prices for Western logs, seasonally higher road and silviculture expenses, and lower earnings in the Timberlands segment excluding earnings from disposition of non-strategic timberlands; seasonally weaker market conditions, lower selling prices for lumber and oriented strand board, reduced sales volumes and operating rates across all products lines, and a larger loss from continuing operations in the Wood Products segment excluding special items; lower selling prices for pulp, slightly higher shipment volumes, and slightly lower earnings in the Cellulose Fiber segment; and higher earnings from single-family homebuilding operations, and seasonally higher home closing volume in the Real Estate segment.

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, housing starts, interest rate levels, availability of financing for home mortgages, and strength of the U.S. dollar;
  • market demand for the company's products, which is related to the strength of the various U.S. business segments and economic conditions;
  • performance of the company's manufacturing operations, including maintenance requirements;
  • the successful execution of internal performance plans, including restructurings and cost reduction initiatives;
  • the level of competition from domestic and foreign producers;
  • raw material prices;
  • energy prices;
  • transportation costs;
  • the effect of weather;
  • the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;
  • federal tax policies;
  • the effect of forestry, land use, environmental and other governmental regulations;
  • legal proceedings;
  • the effect of timing of retirements and changes in the market price of company stock on charges for stock-based compensation;
  • changes in accounting principles;
  • performance of pension fund investments and related derivatives; and
  • other factors described under "Risk Factors" in the Company's annual report on Form 10-K and quarterly reports on Form 10-Q.

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 and the Canadian dollar. Restrictions on international trade or tariffs imposed on imports also may affect the company.

Weyerhaeuser Company

Q3.2011 Analyst Package
Preliminary results, subject to audit

Consolidated Statement of Operations
in millions Q2 Q3 Year-to-date
June 30,
2011		 September 30,
2011		 September 30,
2010		 September 30,
2011		 September 30,
2010
Net sales and revenues $ 1,610 $ 1,569 $ 1,514 $ 4,601 $ 4,438
Cost of products sold 1,343 1,283 1,193 3,803 3,609
Gross margin 267 286 321 798 829
Selling, general and administrative expenses 145 135 161 452 479
Research and development expenses 7 7 8 21 24
Charges for restructuring, closures and impairments 7 41 16 52 22
Other operating costs (income), net (19 ) 3 (24 ) (190 ) (96 )
Operating income 127 100 160 463 400
Interest income and other 9 15 19 35 73
Interest expense, net of capitalized interest (117 ) (86 ) (95 ) (296 ) (356 )
Earnings from continuing operations before income taxes 19 29 84 202 117
Income taxes (1) 4 104 1,028 52 986
Earnings from continuing operations 23 133 1,112 254 1,103
Earnings (loss) from discontinued operations, net of income taxes (13 ) 24 4 12 9
Net earnings 10 157 1,116 266 1,112
Less: net earnings attributable to noncontrolling interests -- -- -- -- (2 )
Net earnings attributable to Weyerhaeuser common shareholders $ 10 $ 157 $ 1,116 $ 266 $ 1,110
(1) Year-to-date 2011 includes an $83 million tax benefit related to foreign tax credits. Year-to-date 2010 includes $1.043 billion income for the reversal of deferred tax liabilities associated with the conversion to REIT status partially offset by $39 million for tax charges related to the elimination of the ability to claim a tax deduction provided to retirees and reimbursed under the Medicare Part D subsidy beginning in 2013, state tax law and rate changes, unrecognized tax benefits and other adjustments.
Per Share Information
Q2 Q3 Year-to-date
June 30,
2011		 September 30,
2011		 September 30,
2010		 September 30,
2011		 September 30,
2010
Earnings (loss) per share attributable to Weyerhaeuser common shareholders, basic:
Continuing operations $ 0.04 $ 0.25 $ 3.51 $ 0.47 $ 4.45
Discontinued operations (0.02 ) 0.04 0.01 0.02 0.04
Net earnings per share $ 0.02 $ 0.29 $ 3.52 $ 0.49 $ 4.49
Earnings (loss) per share attributable to Weyerhaeuser common shareholders, diluted:
Continuing operations $ 0.04 $ 0.25 $ 3.49 $ 0.47 $ 4.44
Discontinued operations (0.02 ) 0.04 0.01 0.02 0.04
Net earnings per share $ 0.02 $ 0.29 $ 3.50 $ 0.49 $ 4.48
Dividends paid per share $ 0.15 $ 0.15 $ 26.46 $ 0.45 $ 26.56
Weighted average shares outstanding (in thousands):
Basic 538,599 537,969 317,369 537,906 247,192
Diluted 541,095 539,827 318,360 540,469 247,879
Common shares outstanding at end of period (in thousands) 538,640 537,210 535,935 537,210 535,935

Weyerhaeuser Company

Q3.2011 Analyst Package

Preliminary results, subject to audit

Consolidated Balance Sheet

in millions

June 30,

September 30,

December 31,

2011

2011

2010

ASSETS
Forest Products:
Current assets:
Cash and cash equivalents $ 877 $ 969 $ 1,466
Receivables, less allowances 533 467 451
Inventories 513 468 478
Prepaid expenses 115 81 81
Deferred tax assets 167 106 113
Total current assets 2,205 2,091 2,589
Property and equipment, net 3,083 2,943 3,217
Construction in progress 137 122 123
Timber and timberlands at cost, less depletion charged to disposals 3,987 3,997 4,035
Investments in and advances to equity affiliates 191 194 194
Goodwill 40 40 40
Other assets 511 558 363
Restricted assets held by special purpose entities 915 914 915
11,069 10,859 11,476
Real Estate:
Cash and cash equivalents 4 2 1
Receivables, less allowances 36 31 51
Real estate in process of development and for sale 535 549 517
Land being processed for development 988 989 974
Investments in and advances to equity affiliates 15 15 16
Deferred tax assets 263 260 266
Other assets 121 122 120
Consolidated assets not owned 8 8 8
1,970 1,976 1,953
Total assets $ 13,039 $ 12,835 $ 13,429

LIABILITIES AND EQUITY
Forest Products:
Current liabilities:
Current maturities of long-term debt $ --

$

11

$ --
Accounts payable 326 305 340
Accrued liabilities 712 672 734
Total current liabilities 1,038 988 1,074
Long-term debt 4,192 4,181 4,710
Deferred income taxes 533 440 366
Deferred pension and other postretirement benefits 835 797 930
Other liabilities 412 335 393
Liabilities (nonrecourse to Weyerhaeuser) held by special purpose entities 774 773 772
7,784 7,514 8,245
Real Estate:
Long-term debt 318 318 350
Other liabilities 193 196 212
Consolidated liabilities not owned 8 8 8
519 522 570
Total liabilities 8,303 8,036 8,815
Equity:
Total Weyerhaeuser shareholders' interest 4,734 4,795 4,612
Noncontrolling interests 2 4 2
Total equity 4,736 4,799 4,614
Total liabilities and equity $ 13,039 $ 12,835 $ 13,429

Weyerhaeuser Company

Q3.2011 Analyst Package

Preliminary results, subject to audit

Consolidated Statement of Cash Flows
in millions Q2 Q3 Year-to-date
June 30,
2011		 September 30,
2011		 September 30,
2010		 September 30,
2011		 September 30,
2010
Cash flows from operations:
Net earnings $ 10 $ 157 $ 1,116 $ 266 $ 1,112
Noncash charges (credits) to income:
Depreciation, depletion and amortization 120 120 124 363 376
Income taxes, net (13 ) (103 ) (1,030 ) (77 ) (940 )
Pension and other postretirement benefits 19 17 (8 ) 60 (19 )
Share-based compensation expense 3 2 4 19 16
Charges for impairment of assets 2 34 2 37 5
Net gains on dispositions of assets and operations (20 ) (51 ) (10 ) (227 ) (103 )
Foreign exchange transaction (gains) losses (1 ) 19 (4 ) 11 (4 )
Change in:
Receivables less allowances (10 ) 35 12 (34 ) (103 )
Receivable for taxes -- 6 (30 ) 7 521
Inventories 35 (9 ) (7 ) (40 ) (32 )
Real estate and land (32 ) (15 ) (6 ) (49 ) (43 )
Prepaid expenses (4 ) -- (1 ) (14 ) (8 )
Accounts payable and accrued liabilities 6 (61 ) (19 ) (106 ) (72 )
Deposits on land positions and other assets (4 ) (5 ) (10 ) (9 ) (13 )
Pension contributions (9 ) (17 ) (68 ) (32 ) (206 )
Other 12 (12 ) 32 (31 ) (23 )
Net cash from operations 114 117 97 144 464
Cash flows from investing activities:
Property and equipment (39 ) (62 ) (37 ) (136 ) (115 )
Timberlands reforestation (7 ) (4 ) (6 ) (23 ) (26 )
Redemption of short-term investments -- -- -- -- 47
Proceeds from sale of assets and operations 3 157 30 353 160
Repayments from pension trust -- -- -- -- 146
Other (10 ) (1 ) 14 (6 ) 3
Cash from investing activities (53 ) 90 1 188 215
Cash flows from financing activities:
Notes, commercial paper borrowings and revolving credit facilities, net -- -- -- -- (3 )
Cash dividends (80 ) (81 ) (560 ) (242 ) (581 )
Change in book overdrafts 1 (8 ) (15 ) (26 ) (27 )
Payments on debt (548 ) -- (2 ) (550 ) (567 )
Exercises of stock options 3 -- -- 37 --
Repurchase of common stock -- (24 ) -- (24 ) --
Other (19 ) (4 ) 1 (23 ) (2 )
Cash from financing activities (643 ) (117 ) (576 ) (828 ) (1,180 )
Net change in cash and cash equivalents (582 ) 90 (478 ) (496 ) (501 )
Cash and cash equivalents at beginning of period 1,463 881 1,846 1,467 1,869
Cash and cash equivalents at end of period $ 881 $ 971 $ 1,368 $ 971 $ 1,368
Cash paid (received) during the year for:
Interest, net of amount capitalized $ 91 $ 115 $ 133 $ 362 $ 406
Income taxes $ 13 $ 6 $ 1 $ 21 $ (444 )

Weyerhaeuser Company

Total Company Statistics

Q3.2011 Analyst Package

Preliminary results, subject to audit

Special Items Included in Net Earnings
in millions Q2 Q3 Year-to-date
June 30,
2011		 September 30,
2011		 September 30,
2010		 September 30,
2011		 September 30,
2010
Net earnings $ 10 $ 157 $ 1,116 $ 266 $ 1,110
Income tax adjustments -- (83 ) (1,035 ) (83 ) (1,004 )
Gain on sale of wood products assets -- -- -- -- (31 )
Loss on early extinguishment of debt 16 -- -- 16 33
Gain on sale of 82,000 acres of non-strategic timberlands -- -- -- (96 ) --
Charges for restructuring and impairments -- 24 -- 24 --
Charges related to the sale of hardwoods 6 8 -- 14 --
Gain on sale of properties -- (9 ) -- (9 ) --
Gain on sale of Westwood Shipping Lines -- (31 ) -- (31 ) --
Net earnings before special items $ 32 $ 66 $ 81 $ 101 $ 108
Q2 Q3 Year-to-date
June 30,
2011		 September 30,
2011		 September 30,
2010		 September 30,
2011		 September 30,
2010
Net earnings per diluted share $ 0.02 $ 0.29 $ 3.50 $ 0.49 $ 4.48
Income tax adjustments -- (0.15 ) (3.25 ) (0.15 ) (4.05 )
Gain on sale of wood products assets -- -- -- -- (0.13 )
Loss on early extinguishment of debt 0.03 -- -- 0.03 0.13
Gain on sale of 82,000 acres of non-strategic timberlands -- -- -- (0.18 ) --
Charges for restructuring and impairments -- 0.04 -- 0.04 --
Charges related to the sale of hardwoods 0.01 0.01 -- 0.03 --
Gain on sale of properties -- (0.01 ) -- (0.01 ) --
Gain on sale of Westwood Shipping Lines -- (0.06 ) -- (0.06 ) --
Net earnings before special items per diluted share $ 0.06 $ 0.12 $ 0.25 $ 0.19 $ 0.43
Selected Total Company Items, Excluding Discontinued Operations
in millions Q2 Q3 Year-to-date
June 30,
2011		 September 30,
2011		 September 30,
2010		 September 30,
2011		 September 30,
2010
Depreciation, depletion and amortization:
Cost of products sold $ 105 $ 108 $ 106 $ 318 $ 321
Selling, general and administrative expenses 13 12 16 41 49
Total depreciation, depletion and amortization $ 118 $ 120 $ 122 $ 359 $ 370
Pension and postretirement costs (credits):
Pension and postretirement costs allocated to business segments $ 16 $ 9 $ 8 $ 36 $ 32
Pension and postretirement costs (credits) retained by Corporate segment 3 6 (18 ) 21 (56 )
Total company pension and postretirement costs (credits) $ 19 $ 15 $ (10 ) $ 57 $ (24 )
Total decrease (increase) in Forest Products working capital $ (21 ) $ 69 $ 24 $ (110 ) $ 592
Cash spent for capital expenditures $ (44 ) $ (65 ) $ (43 ) $ (156 ) $ (141 )

Weyerhaeuser Company

Timberlands Segment

Q3.2011 Analyst Package
Preliminary results, subject to audit

Segment Statement of Operations
in millions Q2.2011 Q3.2011 Q3.2010 YTD.2011 YTD.2010
Trade sales and revenues (unaffiliated customers) $ 288 $ 252 $ 240 $ 770 $ 667
Intersegment sales 134 154 145 479 439
Total net sales and revenues 422 406 385 1,249 1,106
Cost of products sold 296 321 294 937 831
Gross margin 126 85 91 312 275
Selling, general and administrative expenses 24 23 20 70 63
Research and development expenses 4 4 5 12 14
Charges for restructuring, closures and impairments -- -- 1 -- 2
Other operating income, net (13 ) (3 ) (9 ) (182 ) (28 )
Operating income 111 61 74 412 224
Interest income and other 1 1 1 3 2
Net contribution to earnings $ 112 $ 62 $ 75 $ 415 $ 226

Selected Segment Items
Q2.2011 Q3.2011 Q3.2010 YTD.2011 YTD.2010
Depreciation, depletion and amortization $ 35 $ 34 $ 30 $ 100 $ 88
Total decrease (increase) in working capital $ (40 ) $ 32 $ 20 $ (24 ) $ (4 )
Cash spent for capital expenditures $ (14 ) $ (12 ) $ (17 ) $ (40 ) $ (52 )

Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)
Q2.2011 Q3.2011 Q3.2010 YTD.2011 YTD.2010
Gain on sale of 82,000 acres of non-strategic timberlands $ -- $ -- $ -- $ 152 $ --

Segment Statistics
Q2.2011 Q3.2011 Q3.2010 YTD.2011 YTD.2010

Third Party Net Sales and Revenue (millions)

Logs:
West $ 152 $ 144 $ 110 $ 406 $ 317
South 49 53 40 143 104
Canada 1 4 3 12 12
Total Logs 202 201 153 561 433
Pay as cut timber sales 8 9 8 25 25
Timberlands exchanges and dispositions 39 2 41 62 89
Higher and better use land sales 2 5 6 11 18
Minerals, oil and gas 15 14 15 43 46
Products from international operations 21 21 17 59 49
Other products 1 -- -- 9 7
Total $ 288 $ 252 $ 240 $ 770 $ 667
Logs

Third Party Sales

Realizations

(per cubic meter)

West $ 109.42 $ 104.27 $ 91.45 $ 104.97 $ 91.78
South $ 40.59 $ 39.11 $ 43.63 $ 40.21 $ 43.78
Canada $ 42.79 $ 33.73 $ 29.94 $ 34.91 $ 32.83
International $ 21.41 $ 22.09 $ 17.96 $ 20.82 $ 19.30
Logs

Third Party Sales

Volumes

(cubic meters,

thousands)

West 1,391 1,385 1,205 3,871 3,456
South 1,211 1,336 903 3,552 2,364
Canada 23 116 92 333 366
International 79 88 63 239 209
Total 2,704 2,925 2,263 7,995 6,395
Logs

Fee Depletion

(cubic meters,

thousands)

West 1,747 1,604 1,444 4,962 4,279
South 2,355 2,535 2,060 7,070 6,081
International 221 270 89 589 270
Total 4,323 4,409 3,593 12,621 10,630

Weyerhaeuser Company

Wood Products Segment

Q3.2011 Analyst Package
Preliminary results, subject to audit

Segment Statement of Operations
in millions Q2.2011 Q3.2011 Q3.2010 YTD.2011 YTD.2010
Trade sales and revenues (unaffiliated customers) $ 605 $ 603 $ 537 $ 1,734 $ 1,737
Intersegment sales 21 20 17 61 47
Total net sales and revenues 626 623 554 1,795 1,784
Cost of products sold 629 620 587 1,785 1,762
Gross margin (3 ) 3 (33 ) 10 22
Selling, general and administrative expenses 49 47 62 146 192
Research and development expenses 1 1 1 3 4
Charges for restructuring, closures and impairments 4 38 9 44 11
Other operating income, net (4 ) (6 ) (3 ) (15 ) (48 )
Operating loss (53 ) (77 ) (102 ) (168 ) (137 )
Interest income and other -- 1 -- 3 2
Net contribution to earnings from continuing operations (53 ) (76 ) (102 ) (165 ) (135 )
Net contribution to earnings from discontinued hardwoods operations (8 ) (17 ) 2 (25 ) 13
Net contribution to earnings $ (61 ) $ (93 ) $ (100 ) $ (190 ) $ (122 )

Selected Segment Items, Excluding Hardwoods Operations

Q2.2011 Q3.2011 Q3.2010 YTD.2011 YTD.2010
Depreciation, depletion and amortization $ 35 $ 36 $ 42 $ 110 $ 128
Total decrease (increase) in working capital $ 43 $ 16 $ 59 $ (56 ) $ (10 )
Cash spent for capital expenditures $ (7 ) $ (8 ) $ (5 ) $ (21 ) $ (12 )

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

Q2.2011 Q3.2011 Q3.2010 YTD.2011 YTD.2010
Gain on sale of wood products assets $ -- $ -- $ -- $ -- $ 52
Charges for restructuring and impairments -- (38 ) -- (38 ) --
Gain on sale of properties -- 5 -- 5 --
Total special items from continuing operations -- (33 ) -- (33 ) 52
Charges related to the sale of discontinued hardwoods operations (9 ) (13 ) -- (22 ) --
Total $ (9 ) $ (46 ) $ -- $ (55 ) $ 52

Segment Statistics
in millions, except for third-party sales realizations Q2.2011 Q3.2011 Q3.2010 YTD.2011 YTD.2010
Structural Lumber

(board feet)

Third Party Net Sales and Revenue $ 290 $ 281 $ 254 $ 831 $ 803
Third Party Sales Realizations $ 300.84 $ 300.74 $ 286.84 $ 305.18 $ 317.08
Third Party Sales Volumes 963 934 889 2,723 2,534
Production Volumes 903 890 857 2,686 2,504
Engineered Solid

Section

(cubic feet)

Third Party Net Sales and Revenue $ 71 $ 65 $ 68 $ 198 $ 213
Third Party Sales Realizations $ 1,904.83 $ 1,865.05 $ 1,848.76 $ 1,874.76 $ 1,782.89
Third Party Sales Volumes 4 4 4 11 12
Production Volumes 3 4 4 11 12
Engineered

I-joists

(lineal feet)

Third Party Net Sales and Revenue $ 48 $ 44 $ 39 $ 125 $ 136
Third Party Sales Realizations $ 1,258.14 $ 1,275.43 $ 1,246.02 $ 1,266.35 $ 1,161.32
Third Party Sales Volumes 38 34 31 98 116
Production Volumes 34 32 25 96 107
Oriented Strand

Board

(square feet 3/8')

Third Party Net Sales and Revenue $ 89 $ 97 $ 80 $ 271 $ 262
Third Party Sales Realizations $ 178.43 $ 176.33 $ 185.07 $ 181.75 $ 218.16
Third Party Sales Volumes 498 549 428 1,492 1,199
Production Volumes 518 574 446 1,586 1,292
Softwood Plywood (square feet 3/8') Third Party Net Sales and Revenue $ 16 $ 18 $ 19 $ 51 $ 58
Third Party Sales Realizations $ 271.01 $ 260.23 $ 280.78 $ 264.81 $ 287.69
Third Party Sales Volumes 61 69 68 193 203
Production Volumes 48 49 57 150 169
Hardwood Lumber (board feet) Third Party Net Sales and Revenue $ 63 $ 17 $ 54 $ 138 $ 172
Third Party Sales Realizations $ 858.51 $ 861.33 $ 836.60 $ 853.30 $ 828.12
Third Party Sales Volumes 73 20 65 162 208
Production Volumes 62 15 60 135 180

Weyerhaeuser Company

Cellulose Fibers Segment

Q3.2011 Analyst Package
Preliminary results, subject to audit

Segment Statement of Operations
in millions Q2.2011 Q3.2011 Q3.2010 YTD.2011 YTD.2010
Total net sales and revenues $ 526 $ 503 $ 522 $ 1,535 $ 1,400
Cost of products sold 422 349 326 1,171 1,068
Gross margin 104 154 196 364 332
Selling, general and administrative expenses 24 24 21 70 61
Research and development expenses 2 2 2 6 6
Other operating income, net (3 ) (4 ) (6 ) (12 ) (13 )
Operating income 81 132 179 300 278
Interest income and other (1 ) 3 2 1 (4 )
Net contribution to earnings $ 80 $ 135 $ 181 $ 301 $ 274

Selected Segment Items
Q2.2011 Q3.2011 Q3.2010 YTD.2011 YTD.2010
Depreciation, depletion and amortization $ 35 $ 37 $ 34 $ 108 $ 106
Total increase in working capital $ (32 ) $ (9 ) $ (39 ) $ (21 ) $ (73 )
Cash spent for capital expenditures $ (23 ) $ (43 ) $ (19 ) $ (92 ) $ (73 )

Segment Statistics
Q2.2011 Q3.2011 Q3.2010 YTD.2011 YTD.2010
Pulp

(air-dry metric

tons)

Third Party Net Sales and Revenue (millions) $ 409 $ 391 $ 412 $ 1,198 $ 1,087
Third Party Sales Realizations $ 960.04 $ 919.65 $ 926.28 $ 930.47 $ 849.47
Third Party Sales Volumes (thousands) 426 426 445 1,288 1,280
Production Volumes (thousands) 410 462 470 1,309 1,321
Liquid

Packaging

Board

(tons)

Third Party Net Sales and Revenue (millions) $ 93 $ 87 $ 88 $ 265 $ 249
Third Party Sales Realizations $ 1,194.46 $ 1,164.99 $ 1,103.48 $ 1,169.58 $ 1,083.95
Third Party Sales Volumes (thousands) 77 76 80 227 230
Production Volumes (thousands) 80 81 82 228 232

Weyerhaeuser Company

Real Estate Segment

Q3.2011 Analyst Package
Preliminary results, subject to audit

Segment Statement of Operations
in millions Q2.2011 Q3.2011 Q3.2010 YTD.2011 YTD.2010
Total net sales and revenues $ 191 $ 211 $ 210 $ 562 $ 618
Cost of products sold 147 164 158 437 468
Gross margin 44 47 52 125 150
Selling, general and administrative expenses 36 36 40 107 115
Charges for restructuring, closures and impairments 1 2 1 4 4
Other operating income, net -- -- (2 ) -- --
Operating income 7 9 13 14 31
Interest income and other 1 1 7 3 49
Loss attributable to noncontrolling interests -- -- -- -- (2 )
Net contribution to earnings $ 8 $ 10 $ 20 $ 17 $ 78

Selected Segment Items
Q2.2011 Q3.2011 Q3.2010 YTD.2011 YTD.2010
Depreciation and amortization $ 3 $ 3 $ 4 $ 9 $ 12
Cash spent for capital expenditures $ -- $ (1 ) $ (2 ) $ (2 ) $ (3 )

Segment Statistics
Q2.2011 Q3.2011 Q3.2010 YTD.2011 YTD.2010
Net sales and revenues:
Single-family housing $ 180 $ 204 $ 200 $ 536 $ 576
Land 11 5 9 23 39
Other -- 2 1 3 3
Total net sales and revenue $ 191 $ 211 $ 210 $ 562 $ 618
Single-family homes sold 521 440 418 1,496 1,529
Single-family homes closed 459 508 501 1,330 1,519
Single-family homes sold but not closed (backlog) 673 605 660 605 660
Single-family average price of homes closed (in thousands) $ 391 $ 403 $ 400 $ 403 $ 379
Single-family home gross margin - excluding impairments (1) 22.4 % 23.0 % 24.3 % 22.4 % 22.9 %

(1) Single-family gross margin excluding impairments equals revenue less cost of sales and period costs (other than impairments and deposit write-offs).

Weyerhaeuser Company

Corporate & Other Segment

Q3.2011 Analyst Package
Preliminary results, subject to audit

Corporate and Other includes certain gains or charges that are not related to an individual operating segment and the portion of items such as share-based compensation, pension and postretirement costs, foreign exchange transaction gains and losses associated with financing and other general and administrative expenses that are not allocated to the business segments. Historically, Corporate and Other included the results of our transportation operations. This included our five short line railroads that were sold at the end of 2010 and Westwood Shipping Lines that was sold on September 30, 2011. Westwood results are included in our results of discontinued operations.

Segment Statement of Operations
in millions Q2.2011 Q3.2011 Q3.2010 YTD.2011 YTD.2010
Trade sales and revenues (unaffiliated customers) $ -- $ -- $ 5 $ -- $ 16
Intersegment sales -- -- 1 -- 2
Total net sales and revenues -- -- 6 -- 18
Cost of products sold 4 3 (9 ) 13 (32 )
Gross margin (4 ) (3 ) 15 (13 ) 50
Selling, general and administrative expenses 12 5 18 59 48
Charges for restructuring, closures and impairments 2 1 6 4 6
Other operating costs (income), net 1 16 (5 ) 19 (8 )
Operating income (loss) (19 ) (25 ) (4 ) (95 ) 4
Interest income and other 8 9 9 25 24
Net contribution to earnings from continuing operations (11 ) (16 ) 5 (70 ) 28
Net contribution to earnings from discontinued operations (1) (11 ) 54 5 45 2
Net contribution to earnings $ (22 ) $ 38 $ 10 $ (25 ) $ 30

(1) Third quarter 2011 includes a $9 million gain and second quarter 2011 includes charges of $13 million related to businesses we have divested in prior years. Third quarter 2011 also includes a $49 million gain on the sale of Westwood Shipping Lines.

Selected Segment Items, Excluding Westwood Shipping Lines
Q2.2011 Q3.2011 Q3.2010 YTD.2011 YTD.2010
Depreciation, depletion and amortization $ 10 $ 10 $ 12 $ 32 $ 36
Total decrease (increase) in working capital $ 8 $ 30 $ (16 ) $ (9 ) $ 679
Cash spent for capital expenditures $ -- $ (1 ) $ -- $ (1 ) $ (1 )
Share-based compensation expense (income) $ (5 ) $ (12 ) $ 8 $ (1 ) $ 7
Foreign exchange losses (gains) $ (1 ) $ 17 $ (4 ) $ 10 $ (5 )
Pension and postretirement costs (credits) retained by Corporate segment $ 3 $ 6 $ (18 ) $ 21 $ (56 )

Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)
Q2.2011 Q3.2011 Q3.2010 YTD.2011 YTD.2010
Gain on sale of property $ -- $ 9 $ -- $ 9 $ --
Gain on sale of Westwood Shipping Lines -- 49 -- 49 --
Total $ -- $ 58 $ -- $ 58 $ --

SOURCE: Weyerhaeuser Company 

Weyerhaeuser Company
Media
Bruce Amundson,253-924-3047
or
Analysts
Kathryn McAuley,253-924-2058
 
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