News Room
Weyerhaeuser Reports Third Quarter Net Earnings of $285 Million, or $1.16 per Diluted Share, on Net Sales of $5.6 Billion
PRNewswire-FirstCall
FEDERAL WAY, Wash.
Oct 21, 2005
Weyerhaeuser Company (NYSE: WY) today reported third quarter net earnings of $285 million, or $1.16 per diluted share, on net sales of $5.6 billion. This compares with $594 million, or $2.45 per diluted share, on net sales of $5.7 billion for the third quarter of 2004.
(Logo: http://www.newscom.com/cgi-bin/prnh/20040116/WYLOGO-a http://www.newscom.com/cgi-bin/prnh/20040116/WYLOGO-b ) Third quarter 2005 earnings include the following after-tax items: * A gain of $75 million, or 31 cents per diluted share, for the sale of MAS Capital Management Partners, LP, a joint venture. * A charge of $19 million, or 8 cents per diluted share, for closure of facilities. * A loss of $14 million, or 6 cents per diluted share, for the early extinguishment of debt.
In addition, net earnings for third quarter 2005 include a one-time tax benefit of $14 million, or 6 cents per diluted share, related to a change in the Ohio state income tax law.
Third quarter 2004 earnings include the following after-tax items:
* A gain of $179 million, or 74 cents per diluted share, from a sale
of timberlands in Georgia.
* A gain of $16 million, or 7 cents per diluted share, from a tenure
reallocation agreement with the British Columbia government.
* A gain of $13 million, or 5 cents per diluted share, due to the
reduction of the reserve for hardboard siding claims.
* A charge of $7 million, or 3 cents per diluted share, related to the
sale or closure of facilities.
"Our results in the third quarter reflect the difficult business conditions we face in certain segments," said Steven R. Rogel, chairman, president and chief executive officer. "Although the recent hurricanes did not significantly affect our operations, we expect to experience residual effects of the storms in terms of higher energy, chemical and transportation costs. This will put additional pressure on our businesses in the fourth quarter."
Rogel said the company's strategic review of its business portfolio has resulted in the previously announced indefinite shutdown of the Prince Albert pulp and paper facility in Canada and the closure of two facilities -- a specialty pulp mill and a large-log sawmill -- in Washington.
"These are the first, but by no means the final steps," Rogel said. "We will continue to take the actions necessary to make Weyerhaeuser a more competitive company and generate greater returns while returning cash to our shareholders. To that end, we are pleased to have announced today that the board of directors authorized the repurchase of up to 18 million shares, or 7.4 percent of Weyerhaeuser's outstanding common stock."
SUMMARY OF THIRD QUARTER FINANCIAL HIGHLIGHTS
Millions (except per share data) 3Q 2005 3Q 2004 Change
Net earnings $285 $594 ($309)
Earnings per diluted share $1.16 $2.45 ($1.29)
Net sales $5,604 $5,679 ($75)
SEGMENT RESULTS FOR THIRD QUARTER
(Contributions to Pre-Tax Earnings)
Millions 3Q 2005 3Q 2004 Change
Timberlands $191 $450 ($259)
Wood Products $124 $362 ($238)
Cellulose Fiber and White Papers ($2) $80 ($82)
Containerboard, Packaging and Recycling $36 $82 ($46)
Real Estate and Related Assets $145 $155 ($10)
DISCUSSION AND OUTLOOK BY BUSINESS SEGMENT
TIMBERLANDS
3Q 2005 2Q 2005 Change
Contribution to earnings (millions) $191 $210 ($19)
Third quarter earnings decreased from the second quarter due to higher fuel prices that affected logging and hauling costs, and a $5 million pre-tax charge related to timber damage caused by Hurricane Katrina. In addition, second quarter results include $6 million earnings from the British Columbia Coastal operations, which were sold in May.
The segment expects fourth quarter earnings to be lower than the third quarter, reflecting decreased Western profits due to normal seasonal slowdowns, and expected lower domestic sales prices. Export log markets are expected to remain firm. In the South, the segment expects log prices to decline from third quarter. Costs are expected to increase due to hurricane salvage operations.
WOOD PRODUCTS
3Q 2005 2Q 2005 Change
Contribution to earnings (millions) $124 $204 ($80)
Earnings decreased from second quarter due primarily to lower average price realizations for lumber and oriented strand board. Second quarter earnings included $18 million in pre-tax charges related to litigation.
Demand for building products remained strong throughout the quarter. However, readily available supply caused prices to decline during the first two months of the quarter.
Despite temporary price increases in September following the hurricanes, average prices for the entire quarter were lower for Weyerhaeuser lumber and oriented strand board. Lumber realizations declined $31 per thousand board feet and oriented strand board declined $30 per thousand square feet (3/8" basis). Average price realizations for engineered products increased from the second quarter, partially offsetting the effects from lumber and oriented strand board. The hurricanes had a minimal effect on total production for the segment.
The segment incurred $19 million in countervailing and anti-dumping duties and related costs on Canadian softwood lumber the company sold into the United States in the third quarter, compared with $27 million in the second quarter.
The segment expects normal seasonal slowing in the fourth quarter resulting in price decreases in commodity building products and reduced shipment volumes. The segment also expects to incur continued increased costs for energy, resin and transportation. As a result, fourth quarter earnings are expected to follow their normal seasonal decrease. In addition, the segment will be affected by an estimated $25 million pre-tax charge associated with the Big River sawmill in Saskatchewan.
CELLULOSE FIBER AND WHITE PAPERS
3Q 2005 2Q 2005 Change
Contribution (charge) to earnings
(millions) ($2) $16 ($18)
Segment earnings declined from second quarter due to a third quarter pre- tax charge of $22 million primarily related to the closure of the Cosmopolis, Wash., pulp facility.
Papergrade pulp prices declined during the quarter due to continued strong supply coupled with the normal seasonal slowdown in demand. Fluff pulp prices remained relatively stable. Fine paper prices declined due to lower demand in North America for fine paper products. Manufacturing costs were lower due to fewer scheduled third quarter maintenance shutdowns. The negative effects of the strengthening Canadian dollar and increased costs for transportation, energy and raw material partially offset this cost reduction.
The company expects fourth quarter results to decline due to lower fine paper prices, seasonally lower shipments, and higher transportation, chemical and energy costs. In addition, the segment will be affected by an estimated $350 to $375 million pre-tax charge associated with the previously announced indefinite closure of the Prince Albert pulp and paper facility as the company continues the portfolio improvement strategy in this segment.
CONTAINERBOARD, PACKAGING AND RECYCLING
3Q 2005 2Q 2005 Change
Contribution to earnings (millions) $36 $99 ($63)
Earnings decreased from second quarter levels primarily due to lower prices for containerboard and boxes, and increased transportation and energy costs. The hurricanes had a minimal effect on the segment's operating results for the third quarter.
The segment expects fourth quarter earnings to decrease to near break-even levels due to a continued decline in box prices resulting from earlier declines in containerboard prices, a seasonal decline in box shipments and higher energy costs, partially offset by lower costs for old corrugated containers. The recently announced containerboard and box price increase will not materially affect earnings in the fourth quarter.
REAL ESTATE AND RELATED ASSETS
3Q 2005 2Q 2005 Change
Contribution to earnings (millions) $145 $156 ($11)
Single-family home closings declined slightly from second quarter due to delays in providing utility services in Las Vegas, Hurricane Rita in Texas and fewer lot closings. The backlog of homes sold, but not closed, increased and represents slightly more than six months' sales.
The segment expects fourth quarter earnings to be significantly higher than third quarter due to seasonally stronger single-family closings, which will exceed the fourth quarter of 2004.
OTHER
The company will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on Oct. 21 to discuss the third quarter results.
To access the conference call, listeners calling from within North America should dial 1-888-221-5699 at least 15 minutes prior to the start of the conference call. Those wishing to access the call from outside North America should dial 1-706-643-3795. Replays of the call will be available for one week following completion of the live call and can be accessed at 1-800-642- 1687 (access code -- 1384562) within North America and at 1-706-645-9291 (access code -- 1384562) from outside North America.
The call is being webcast and can be accessed through Weyerhaeuser's Internet site at http://investor.weyerhaeuser.com/ by clicking on the "Q3 2005 Earnings Conference Call" link.
The webcast also is being distributed through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at http://www.fulldisclosure.com/, Thomson/CCBN's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson's password-protected event management site, StreetEvents (http://www.streetevents.com/).
Weyerhaeuser Company, one of the world's largest integrated forest products companies, was incorporated in 1900. In 2004, sales were $22.7 billion. It has offices or operations in 19 countries, with customers worldwide. Weyerhaeuser is principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate construction, development and related activities. Additional information about Weyerhaeuser's businesses, products and practices is available at http://www.weyerhaeuser.com/.
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. Some of these forward-looking statements can be identified by the use of forward-looking terminology such as "expects," "may," "will," "believes," "should," "approximately," anticipates," "estimates," and "plans," and the negative or other variations of those terms or comparable terminology or by discussions of strategy, plans or intentions. In particular, some of these forward-looking statements deal with expectations regarding the company's markets in the fourth quarter; expected earnings and performance of the company's business segments during the fourth quarter, demand and pricing for the company's products in the fourth quarter, raw material, energy and transportation costs, hurricane salvage costs, seasonal slowdowns in timber harvest in the fourth quarter, facility closings and related charges, new home sales, and related matters. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to:
* The effect of general economic conditions, including the level of
interest rates and housing starts;
* Market demand for the company's products, which may be tied to the
relative strength of various U.S. business segments;
* Energy prices;
* Raw material prices;
* Performance of the company's manufacturing operations;
* The successful execution of internal performance plans;
* The level of competition from domestic and foreign producers;
* The effect of forestry, land use, environmental and other
governmental regulations;
* The effect of weather;
* The risk of loss from fires, floods and other natural disasters;
* Transportation costs;
* Legal proceedings; and
* Performance of pension fund investments and related derivatives.
The company is also a large exporter and is affected by changes in economic activity in Europe and Asia, particularly Japan, and by changes in currency exchange rates, particularly the relative value of the U.S. dollar to the Euro and the Canadian dollar, and restrictions on international trade or tariffs imposed on imports, including the countervailing and anti-dumping duties imposed on the company's softwood lumber shipments from Canada to the United States. These and other factors could cause or contribute to actual results differing materially from such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will occur, or if any of them occurs, what effect they will have on the company's results of operations or financial condition. The company expressly declines any obligation to publicly revise any forward-looking statements that have been made to reflect the occurrence of events after the date of this news release.
For more information contact:
Media - Bruce Amundson (253) 924-3047
Analysts - Kathryn McAuley (253) 924-2058
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
CONSOLIDATED
EARNINGS Q1 Q2 Q3
(in millions) March March June June Sept. Sept.
27, 28, 26, 27, 25, 26,
2005 2004 2005 2004 2005 2004
Net sales and
revenues:
Weyerhaeuser (1) $4,749 $4,442 $5,190 $5,204 $5,008 $5,088
Real Estate and
Related Assets 655 469 648 524 596 591
Total net sales and
revenues 5,404 4,911 5,838 5,728 5,604 5,679
Costs and expenses:
Weyerhaeuser:
Costs of products
sold 3,652 3,432 3,974 3,790 3,934 3,758
Depreciation,
depletion and
amortization 325 317 326 318 329 316
Selling expenses 118 120 119 122 119 123
General and
administrative
expenses 223 239 218 233 236 226
Research and
development
expenses 14 12 12 13 18 13
Taxes other than
payroll and
income taxes 46 48 48 47 69 51
Charges for
integration and
restructuring 5 15 4 13 2 8
Charges for
closure of
facilities 5 4 3 -- 29 13
Other operating
costs, net (2) (3) 9 17 (40) 43 (147) (300)
4,397 4,204 4,664 4,579 4,589 4,208
Real Estate and
Related Assets:
Costs and
operating
expenses 426 321 441 381 401 414
Depreciation and
amortization 3 2 4 4 4 3
Selling expenses 33 27 36 30 36 31
General and
administrative
expenses 24 17 25 19 27 19
Taxes other than
payroll and
income taxes 1 1 -- -- 1 1
Other operating
costs, net -- 1 (2) 1 (2) (19)
487 369 504 435 467 449
Total costs and
expenses 4,884 4,573 5,168 5,014 5,056 4,657
Operating income 520 338 670 714 548 1,022
Interest expense and
other:
Weyerhaeuser:
Interest expense
incurred (4) (196) (195) (179) (218) (193) (184)
Less interest
capitalized -- 3 2 1 3 0
Equity in income
of affiliates -- -- 4 7 2 4
Interest income
and other 27 3 20 5 28 7
Real Estate and
Related Assets:
Interest expense
incurred (14) (15) (14) (14) (13) (14)
Less interest
capitalized 14 15 14 14 13 14
Equity in income
of unconsolidated
entities 10 9 13 20 14 12
Interest income
and other 5 11 (2) 9 4 1
Earnings before
income taxes 366 169 528 538 406 862
Income taxes (5) (128) (57) (229) (183) (120) (293)
Earnings from
continuing
operations 238 112 299 355 286 569
Earnings from
discontinued
operations, net of
taxes (6) 1 9 121 14 (1) 25
Net earnings $239 $121 $420 $369 $285 $594
Basic net earnings
per share:
Continuing
operations $0.98 $0.50 $1.23 $1.51 $1.16 $2.36
Discontinued
operations -- 0.04 0.49 0.06 -- 0.10
Net earnings per
share $0.98 $0.54 $1.72 $1.57 $1.16 $2.46
Diluted net earnings
per share:
Continuing
operations $0.98 $0.50 $1.22 $1.51 $1.16 $2.35
Discontinued
operations -- 0.04 0.49 0.06 -- 0.10
Net earnings per
share $0.98 $0.54 $1.71 $1.57 $1.16 $2.45
Dividends paid per
share $0.40 $0.40 $0.50 $0.40 $0.50 $0.40
Weighted average
shares outstanding
(in thousands)
Basic 242,863 223,728 244,702 234,494 245,009 241,621
Diluted 244,185 225,072 245,881 235,475 246,190 242,649
Year-to-
CONSOLIDATED EARNINGS Year-to-date Q4 date
(in millions) Sept. 25, Sept. 26, Dec. 26, Dec. 26,
2005 2004 2004 2004
Net sales and revenues:
Weyerhaeuser (1) $14,947 $14,734 $4,804 $19,538
Real Estate and Related Assets 1,899 1,584 911 2,495
Total net sales and revenues 16,846 16,318 5,715 22,033
Costs and expenses:
Weyerhaeuser:
Costs of products sold 11,560 10,980 3,735 14,715
Depreciation, depletion and
amortiz........ 980 951 320 1,271
Selling expenses 356 365 119 484
General and administrative
expenses 677 698 247 945
Research and development expenses 44 38 17 55
Taxes other than payroll and
income taxes 163 146 48 194
Charges for integration and
restructuring 11 36 3 39
Charges for closure of facilities 37 17 0 17
Other operating costs, net (2)
(3) (178) (240) 36 (204)
13,650 12,991 4,525 17,516
Real Estate and Related Assets:
Costs and operating expenses 1,268 1,116 647 1,763
Depreciation and amortization 11 9 5 14
Selling expenses 105 88 37 125
General and administrative
expenses 76 55 26 81
Taxes other than payroll and
income taxes 2 2 0 2
Other operating costs, net (4) (17) 0 (17)
1,458 1,253 715 1,968
Total costs and expenses 15,108 14,244 5,240 19,484
Operating income 1,738 2,074 475 2,549
Interest expense and other:
Weyerhaeuser:
Interest expense incurred (4) (568) (597) (241) (838)
Less interest capitalized 5 4 5 9
Equity in income of affiliates 6 11 3 14
Interest income and other 75 15 9 24
Real Estate and Related Assets:
Interest expense incurred (41) (43) (14) (57)
Less interest capitalized 41 43 14 57
Equity in income of
unconsolidated entities 37 41 11 52
Interest income and other 7 21 10 31
Earnings before income taxes 1,300 1,569 272 1,841
Income taxes (5) (477) (533) (94) (627)
Earnings from continuing operations 823 1,036 178 1,214
Earnings from discontinued operations,
net of taxes (6) 121 48 21 69
Net earnings $944 $1,084 $199 $1,283
Basic net earnings per share:
Continuing operations $3.36 $4.45 $0.73 $5.16
Discontinued operations 0.50 0.20 0.09 0.29
Net earnings per share $3.86 $4.65 $0.82 $5.45
Diluted net earnings per share:
Continuing operations $3.36 $4.42 $0.73 $5.14
Discontinued operations 0.49 0.20 0.09 0.29
Net earnings per share $3.85 $4.62 $0.82 $5.43
Dividends paid per share $1.40 $1.20 $0.40 $1.60
Weighted average shares outstanding
(in thousands)
Basic 244,191 233,281 242,114 235,453
Diluted 245,354 234,356 243,472 236,546
(1) The first, second and third quarters of 2005 include charges of $22
million, $27 million and $19 million, respectively, or $68 million
year-to-date, for countervailing and anti-dumping duties and related
costs. The first, second, third and fourth quarters of 2004 include
charges of $26 million, $34 million, $31 million and $27 million,
respectively, or $118 million year-to-date, for countervailing and
anti-dumping duties and related costs.
(2) The first, second and third quarters of 2005 include net foreign
exchange gains (losses) of $13 million, ($13) million and $37
million, respectively, for a year-to-date net gain $37 million. The
first, second, third and fourth quarters of 2004 include net foreign
exchange gains (losses) of ($9) million, ($7) million, $16 million
and $27 million, respectively, for a total year-to-date net gain of
$27 million. These gains and losses result primarily from
fluctuations in Canadian and New Zealand exchange rates.
(3) The first quarter of 2005 includes a $12 million charge for the
settlement of a linerboard antitrust lawsuit. The second quarter of
2005 includes an $18 million charge related to alder litigation and
$57 million of income related to the recognition of a deferred gain
from previous timberlands sales. The third quarter of 2005 includes
a $115 million gain on the sale of an investment in a joint venture.
The first quarter of 2004 includes a $49 million charge for the
settlement of lawsuits involving the market for Pacific Northwest
alder logs and a $33 million gain on the sale of an oriented strand
board mill in Slave Lake, Alberta. The second quarter of 2004
includes a $16 million charge resulting from an adverse judgment in
a lawsuit involving the market for Pacific Northwest alder logs. The
third quarter of 2004 includes a $271 million gain on the sale of
timberlands in Georgia, a $25 million gain from a tenure
reallocation agreement with the British Columbia government, and a
$20 million gain due to the reduction of the reserve for hardboard
siding claims. The fourth quarter of 2004 includes a net gain of
$36 million on the sale of facilities, and charges of $29 million
for the impairment of assets in the company's European manufacturing
operations, $24 million recognized in connection with a change in
the method of estimating workers' compensation liabilities and $23
million for the net book value of technology donated to a
university.
(4) The third quarter of 2005 includes a charge of $21 million for the
early extinguishment of debt. The second and fourth quarters of
2004 include charges of $21 million and $52 million, respectively,
for the early extinguishment of debt.
(5) The second quarter of 2005 includes a charge of $44 million related
to the repatriation of $1.1 billion of eligible Canadian earnings
under the provisions of the American Jobs Creation Act of 2004. The
third quarter of 2005 includes a one-time tax benefit of $14 million
related to a change in the Ohio state income tax law.
(6) Includes the net operating results of the company's operations in
coastal British Columbia. The second quarter of 2005 also includes a
gain of $110 million, including a tax benefit of $46 million,
related to the sale of these operations. The third quarter of 2005
includes a $1 million charge related to the termination of pension
plans associated with these operations.
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
Net sales and revenues (in
millions): Q1 Q2 Q3
March March June June Sept. Sept.
27, 28, 26, 27, 25, 26,
2005 2004 2005 2004 2005 2004
Timberlands:
Logs $182 $193 $195 $211 $188 $197
Other products 82 58 63 66 65 51
264 251 258 277 253 248
Wood Products:
Softwood lumber 892 819 1,032 1,106 889 1,089
Plywood 183 221 196 263 184 237
Veneer 13 11 10 12 9 11
Composite panels 120 108 132 133 122 138
OSB 288 338 306 456 267 341
Hardwood lumber 94 90 102 100 95 89
Engineered I-Joists 160 134 213 178 202 189
Engineered Solid Section 190 148 241 194 244 203
Logs 27 23 24 38 6 32
Other products 272 255 339 312 326 315
2,239 2,147 2,595 2,792 2,344 2,644
Cellulose Fiber and White
Papers:
Pulp 376 339 355 371 381 381
Paper 599 535 611 538 604 583
Coated groundwood 42 36 47 37 45 39
Liquid packaging board 47 49 52 53 50 53
Other products 14 10 12 13 16 15
1,078 969 1,077 1,012 1,096 1,071
Containerboard, Packaging
and Recycling:
Containerboard 117 81 101 80 86 94
Packaging 898 853 969 918 929 916
Recycling 92 80 92 91 87 87
Bags 22 19 21 18 20 20
Other products 34 33 40 34 47 43
1,163 1,066 1,223 1,141 1,169 1,160
Real Estate and Related
Assets 655 469 648 524 596 591
Corporate and Other 149 135 151 147 146 135
Less sales of discontinued
operations (144) (126) (114) (165) -- (170)
$5,404 $4,911 $5,838 $5,728 $5,604 $5,679
Contribution (charge) to
earnings: Q1 Q2 Q3
(in millions) March March June June Sept. Sept.
27, 28, 26, 27, 25, 26,
2005 2004 2005 2004 2005 2004
Timberlands (1) (2) $200 $159 $210 $201 $191 $450
Wood Products (3) (4) (5) (6) 131 173 204 448 124 362
Cellulose Fiber and White
Papers (7) 19 (25) 16 14 (2) 80
Containerboard, Packaging
and Recycling (8) (9) 48 24 99 62 36 82
Real Estate and Related
Assets (10) 183 120 156 118 145 155
Corporate and
Other (11) (12) (13) (17) (76) 99 (67) 101 (45)
$564 $375 $784 $776 $595 $1,084
Year-to-
Net sales and revenues (in millions): Year-to-date Q4 date
Sept. 25, Sept. 26, Dec. 26, Dec. 26,
2005 2004 2004 2004
Timberlands:
Logs $565 $601 $221 $822
Other products 210 175 105 280
775 776 326 1,102
Wood Products:
Softwood lumber 2,813 3,014 901 3,915
Plywood 563 721 208 929
Veneer 32 34 10 44
Composite panels 374 379 122 501
OSB 861 1,135 255 1,390
Hardwood lumber 291 279 86 365
Engineered I-Joists 575 501 177 678
Engineered Solid Section 675 545 189 734
Logs 57 93 32 125
Other products 937 882 280 1,162
7,178 7,583 2,260 9,843
Cellulose Fiber and White Papers:
Pulp 1,112 1,091 380 1,471
Paper 1,814 1,656 570 2,226
Coated groundwood 134 112 44 156
Liquid packaging board 149 155 53 208
Other products 42 38 16 54
3,251 3,052 1,063 4,115
Containerboard, Packaging and Recycling:
Containerboard 304 255 113 368
Packaging 2,796 2,687 897 3,584
Recycling 271 258 89 347
Bags 63 57 23 80
Other products 121 110 46 156
3,555 3,367 1,168 4,535
Real Estate and Related Assets 1,899 1,584 911 2,495
Corporate and Other 446 417 158 575
Less sales of discontinued operations (258) (461) (171) (632)
$16,846 $16,318 $5,715 $22,033
Contribution (charge) to earnings: Year-to-
(in millions) Q4 date
Sept. 25, Sept. 26, Dec. 26, Dec. 26,
2005 2004 2004 2004
Timberlands (1) (2) $601 $810 $217 $1,027
Wood Products (3) (4) (5) (6) 459 983 72 1,055
Cellulose Fiber and White Papers (7) 33 69 35 104
Containerboard, Packaging and
Recycling (8) (9) 183 168 81 249
Real Estate and Related Assets (10) 484 393 217 610
Corporate and Other (11) (12) (13) 183 (188) (83) (271)
$1,943 $2,235 $539 $2,774
(1) The 2004 third quarter includes a $271 million gain on the sale of
timberlands in Georgia and a $5 million gain from a tenure
reallocation agreement with the British Columbia government.
(2) The first quarter of 2005 includes $3 million of charges for the
closure of facilities. The third quarter of 2005 includes a $5
million loss related to hurricane damage.
(3) The first, second and third quarters of 2005 include charges of $22
million, $27 million and $19 million, respectively, or $68 million
year-to-date, for countervailing and anti-dumping duties and related
costs. The first, second, third and fourth quarters of 2004 include
charges of $26 million, $34 million, $31 million and $27 million,
respectively, or $118 million year-to-date, for countervailing and
anti-dumping duties and related costs.
(4) The second quarter of 2005 includes an $18 million charge related to
alder litigation. The third quarter of 2005 includes $9 million of
income related to the reduction of reserves for alder litigation and
an insurance settlement related to product liability claims. The
first quarter of 2004 includes a $49 million charge for the
settlement of lawsuits involving the market for Pacific Northwest
alder logs. The second quarter of 2004 includes a $16 million charge
resulting from an adverse judgment in a lawsuit involving the market
for Pacific Northwest alder logs. The third quarter of 2004 includes
a $20 million gain due to the reduction of the reserve for hardboard
siding claims.
(5) The second quarter of 2005 includes a $6 million gain related to a
tenure reallocation agreement with the British Columbia government.
The third quarter of 2004 includes a $20 million gain from a tenure
reallocation agreement with the British Columbia government.
(6) The first, second and third quarters of 2005 include charges of $1
million, $1 million and $6 million, respectively, associated with
the sale or closure of facilities. The first quarter of 2004
includes a credit of $2 million for the reversal of closure costs
accrued in prior years and a $33 million gain on the sale of an
oriented strand board mill in Slave Lake, Alberta. The second
quarter of 2004 includes a $5 million net loss on the sale of
facilities. The third quarter of 2004 includes a $2 million net gain
on the sale or closure of facilities. The fourth quarter of 2004
includes charges of $3 million for the closure of facilities and a
gain of $36 million on the sale of facilities.
(7) The third quarter of 2005 includes net charges of $22 million
related to facility closures. The second quarter of 2004 includes a
$2 million asset impairment charge related to assets held for sale.
(8) The first quarter of 2005 includes a $12 million charge associated
with the settlement of a linerboard antitrust lawsuit. The third
quarter of 2005 includes a $1 million loss related to hurricane
damage.
(9) The first, second and third quarters of 2005 include charges of $4
million, $2 million and $1 million, respectively, for the closure of
facilities. The first quarter of 2004 includes closure costs of $3
million. The second quarter of 2004 includes a net gain of $1
million on the sales of a facility and a joint venture investment.
The third quarter of 2004 includes closure costs of $12 million,
including a pension termination charge of $9 million related to a
closure that occurred in a previous year. The fourth quarter of
2004 includes a credit of $3 million for the reversal of closure
costs accrued in prior years.
(10) The first, second and third quarters of 2005 include net gains
(losses) on land and lot sales of $57 million, $21 million and ($1)
million, respectively. The first quarter of 2004 includes a $22
million gain on a land sale. The third quarter of 2004 includes a
gain of $18 million on the sale of a multi-family site. The fourth
quarter of 2004 includes a $24 million net gain on land and lot
sales.
(11) The second quarter of 2005 includes a $64 million pretax gain on the
sale of the company's operations in coastal British Columbia and $57
million of income related to the recognition of a deferred gain from
previous timberlands sales. The third quarter of 2005 includes a
$115 million gain on the sale of an investment in a joint venture.
The fourth quarter of 2004 includes a $7 million gain for the
settlement of an insurance claim relating to the Cemwood litigation.
(12) The fourth quarter of 2004 includes charges of $29 million for the
impairment of assets in the company's European manufacturing
operations, $24 million recognized in connection with a change in
the method of estimating workers' compensation liabilities and $23
million for the net book value of technology donated to a
university.
(13) The first, second and third quarters of 2005 include net foreign
exchange gains (losses) of $13 million, ($12) million and $38
million, respectively, for a year-to-date net gain of $39 million.
The first, second, third and fourth quarters of 2004 include net
foreign exchange gains (losses) of ($10) million, ($6) million, $16
million and $26 million, respectively, for a $26 million net gain
year-to-date. These gains and losses result primarily from
fluctuations in Canadian and New Zealand exchange rates.
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
Third party sales volumes: Q1 Q2 Q3
March March June June Sept. Sept.
27, 28, 26, 27, 25, 26,
2005 2004 2005 2004 2005 2004
Timberlands (thousands):
Logs - cunits 864 1,044 863 954 886 904
Wood Products (millions):
Softwood lumber - board
feet 2,057 2,054 2,355 2,393 2,179 2,299
Plywood - square feet
(3/8") 537 642 600 668 558 672
Veneer - square feet
(3/8") 60 55 59 60 51 55
Composite panels -
square feet (3/4") 299 301 317 324 308 315
Oriented strand board -
square feet (3/8") 908 981 1,041 1,143 1,008 1,078
Hardwood lumber - board
feet 102 103 114 117 105 102
Engineered I-Joists - LF 108 108 138 132 125 133
Engineered Solid Section
- CF 9 8 10 10 10 10
Logs - cunits (in
thousands) 187 170 177 279 41 237
Cellulose Fiber and White
Papers (thousands):
Pulp - air-dry metric
tons 629 624 587 642 653 633
Paper - tons 736 741 742 718 757 737
Coated groundwood - tons 58 59 62 61 56 60
Liquid packaging board
- tons 60 66 65 72 64 69
Paper converting - tons
- Restated 2005.2
excluding rolls 475 467 494 459 494 470
Containerboard, Packaging
and Recycling
(thousands):
Containerboard - tons 295 250 259 221 238 245
Packaging - MSF 17,354 18,146 18,600 18,917 18,560 18,287
Recycling - tons 692 678 695 701 665 645
Kraft bags and sacks -
tons 23 24 22 23 22 23
Real Estate and Related
Assets:
Single-family homes sold 1,378 1,506 1,525 1,564 1,608 1,313
Single-family homes
closed 1,189 1,065 1,279 1,216 1,257 1,345
Single-family homes sold
but not closed at end
of period 2,561 2,702 2,807 3,050 3,158 3,018
Total production volumes: Q1 Q2 Q3
March March June June Sept. Sept.
27, 28, 26, 27, 25, 26,
2005 2004 2005 2004 2005 2004
Timberlands (thousands):
Fee Depletion - cunits 2,248 2,265 2,231 2,404 2,098 2,189
Wood Products (millions):
Softwood lumber - board
feet 1,821 1,760 1,869 1,881 1,651 1,819
Plywood - square feet
(3/8") 303 422 302 405 296 405
Veneer - square feet
(3/8") (1) 517 585 529 609 486 592
Composite panels -
square feet (3/4") 267 268 282 281 268 272
Oriented strand board -
square feet (3/8") 1,007 1,031 1,019 1,056 1,017 1,022
Hardwood lumber - board
feet 92 89 96 96 91 84
Engineered I-Joists - LF 133 110 132 124 108 136
Engineered Solid Section
- CF 11 9 10 11 10 11
Cellulose Fiber and White
Papers (thousands):
Pulp - air-dry metric
tons 621 619 614 636 663 652
Paper - tons (2) 763 743 752 736 765 766
Coated groundwood - tons 55 55 59 61 60 62
Liquid packaging board
- tons 60 61 64 67 69 71
Paper converting - tons
- Restated 2005.2
excluding rolls 475 460 487 442 483 471
Containerboard, Packaging
and Recycling
(thousands):
Containerboard - tons (3) 1,503 1,503 1,581 1,598 1,597 1,604
Packaging - MSF 18,628 19,493 19,915 20,208 19,416 19,473
Recycling - tons (4) 1,624 1,607 1,673 1,707 1,716 1,703
Kraft bags and sacks -
tons 23 24 22 23 21 23
Year-to-
Third party sales volumes: Year-to-date Q4 date
Sept. 25, Sept. 26, Dec. 26, Dec. 26,
2005 2004 2004 2004
Timberlands (thousands):
Logs - cunits 2,613 2,902 1,018 3,920
Wood Products (millions):
Softwood lumber - board feet 6,591 6,746 2,144 8,890
Plywood - square feet (3/8") 1,695 1,982 647 2,629
Veneer - square feet (3/8") 170 170 55 225
Composite panels - square feet
(3/4") 924 940 294 1,234
Oriented strand board - square
feet (3/8") 2,957 3,202 1,011 4,213
Hardwood lumber - board feet 321 322 95 417
Engineered I-Joists - LF 371 373 123 496
Engineered Solid Section - CF 29 28 9 37
Logs - cunits (in thousands) 405 686 248 934
Cellulose Fiber and White Papers
(thousands):
Pulp - air-dry metric tons 1,869 1,899 659 2,558
Paper - tons 2,235 2,196 680 2,876
Coated groundwood - tons 176 180 63 243
Liquid packaging board - tons 189 207 69 276
Paper converting - tons - Restated
2005.2 excluding rolls 1,463 1,396 443 1,839
Containerboard, Packaging and
Recycling (thousands):
Containerboard - tons 792 716 285 1,001
Packaging - MSF 54,514 55,350 17,535 72,885
Recycling - tons 2,052 2,024 670 2,694
Kraft bags and sacks - tons 67 70 25 95
Real Estate and Related Assets:
Single-family homes sold 4,511 4,383 992 5,375
Single-family homes closed 3,725 3,626 1,638 5,264
Single-family homes sold but not
closed at end of period 3,158 3,018 2,372 2,372
Total production volumes: Year-to-
Year-to-date Q4 date
Sept. 25, Sept. 26, Dec. 26, Dec. 26,
2005 2004 2004 2004
Timberlands (thousands):
Fee Depletion - cunits 6,577 6,858 2,155 9,013
Wood Products (millions):
Softwood lumber - board feet 5,341 5,460 1,727 7,187
Plywood - square feet (3/8") 901 1,232 396 1,628
Veneer - square feet (3/8") (1) 1,532 1,786 600 2,386
Composite panels - square feet
(3/4") 817 821 245 1,066
Oriented strand board - square
feet (3/8") 3,043 3,109 972 4,081
Hardwood lumber - board feet 279 269 80 349
Engineered I-Joists - LF 373 370 134 504
Engineered Solid Section - CF 31 31 10 42
Cellulose Fiber and White Papers
(thousands):
Pulp - air-dry metric tons 1,898 1,907 639 2,546
Paper - tons (2) 2,280 2,245 761 3,006
Coated groundwood - tons 174 178 62 240
Liquid packaging board - tons 193 199 67 266
Paper converting - tons - Restated
2005.2 excluding rolls 1,445 1,373 465 1,838
Containerboard, Packaging and
Recycling (thousands):
Containerboard - tons (3) 4,681 4,705 1,586 6,291
Packaging - MSF 57,959 59,174 18,648 77,822
Recycling - tons (4) 5,013 5,017 1,701 6,718
Kraft bags and sacks - tons 66 70 24 94
(1) Veneer production represents lathe production and includes volumes
that are further processed into plywood and engineered lumber
products by company mills.
(2) Paper production includes unprocessed rolls and converted paper
volumes.
(3) Containerboard production represents machine production and includes
volumes that are further processed into packaging and kraft bags and
sacks by company facilities.
(4) Recycling production includes volumes processed in Weyerhaeuser
recycling facilities that are consumed by company facilities and
brokered volumes.
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEET (unaudited)
(in millions)
March 27, June 26, Sept. 25, Dec. 26,
Assets 2005 2005 2005 2004
Weyerhaeuser
Current assets:
Cash and short-term investments $402 $1,704 $885 $1,044
Receivables, less allowances 1,840 2,008 1,966 1,558
Inventories 2,122 2,018 1,992 1,891
Prepaid expenses 634 612 581 592
Assets of business held for sale 1,119 -- -- 1,129
Total current assets 6,117 6,342 5,424 6,214
Property and equipment 11,447 11,175 11,093 11,672
Construction in progress 324 451 544 268
Timber and timberlands at cost,
less fee stumpage charged
to disposals 3,712 3,709 3,690 3,733
Investments in and advances to
equity affiliates 491 495 496 489
Goodwill 2,997 2,977 2,989 2,996
Deferred pension and other assets 1,197 1,249 1,309 1,201
Restricted assets held by special
purpose entities 914 916 914 909
27,199 27,314 26,459 27,482
Real Estate and Related Assets
Cash and short-term investments 5 11 4 153
Receivables, less allowances 60 57 49 43
Real estate and land for sale and
development 2,083 2,333 2,288 1,947
Other assets 323 278 357 329
2,471 2,679 2,698 2,472
Total assets $29,670 $29,993 $29,157 $29,954
Liabilities and Shareholders' Interest
Weyerhaeuser
Current liabilities:
Notes payable and commercial
paper $2 $2 $3 $3
Current maturities of long-term
debt 96 225 182 489
Accounts payable 1,150 1,225 1,167 1,159
Accrued liabilities 1,313 1,655 1,562 1,432
Liabilities of business held for
sale 308 -- -- 297
Total current liabilities 2,869 3,107 2,914 3,380
Long-term debt 9,263 8,926 8,010 9,277
Deferred income taxes 4,315 4,320 4,396 4,312
Deferred pension, other
postretirement benefits
and other liabilities 1,494 1,560 1,585 1,500
Liabilities not owned, consolidated
under FIN 46R 820 784 783 815
18,761 18,697 17,688 19,284
Real Estate and Related Assets
Notes payable and commercial paper 2 5 3 2
Long-term debt 869 854 852 867
Other liabilities 533 588 488 546
1,404 1,447 1,343 1,415
Total liabilities 20,165 20,144 19,031 20,699
Shareholders' interest 9,505 9,849 10,126 9,255
Total liabilities and shareholders'
interest $29,670 $29,993 $29,157 $29,954
STATEMENT OF CASH FLOWS Q1 Q2 Q3
March March June June Sept. Sept.
SELECTED INFORMATION (unaudited) 27, 28, 26, 27, 25, 26,
(in millions) 2005 2004 2005 2004 2005 2004
(Weyerhaeuser only, excludes Real
Estate & Related Assets)
Net cash from operations $(203) $(89) $713 $787 $441 $592
Cash paid for property and
equipment (117) (79) (196) (80) (220) (93)
Cash paid for timberlands
reforestation (12) (12) (6) (6) (6) (5)
Cash received from issuances of
debt -- -- 1 -- (1) --
Revolving credit facilities,
notes and commercial paper
borrowings, net 19 67 23 (80) (40) (6)
Payments on debt (404) (60) (206) (813) (965) (253)
Proceeds from equity offering -- -- -- 954 -- --
Proceeds from the sale of BC
Coastal operations -- -- 1,107 -- -- --
Year-to-
STATEMENT OF CASH FLOWS Year-to-date Q4 date
SELECTED INFORMATION (unaudited) Sept. 25, Sept. 26, Dec. 26, Dec. 26,
(in millions) 2005 2004 2004 2004
(Weyerhaeuser only, excludes Real
Estate & Related Assets)
Net cash from operations $951 $1,290 $745 $2,035
Cash paid for property and
equipment (533) (252) (222) (474)
Cash paid for timberlands
reforestation (24) (23) (7) (30)
Cash received from issuances of debt -- -- 1 1
Revolving credit facilities, notes
and commercial paper
borrowings, net 2 (19) 35 16
Payments on debt (1,575) (1,126) (742) (1,868)
Proceeds from equity offering -- 954 -- 954
Proceeds from the sale of BC
Coastal operations 1,107 -- -- --
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SOURCE: Weyerhaeuser Company
CONTACT: Media - Bruce Amundson, +1-253-924-3047, or Analysts - Kathryn
McAuley, +1-253-924-2058, both of Weyerhaeuser Company
Web site: http://www.weyerhaeuser.com/