Newsroom
Weyerhaeuser Reports Second Quarter Net Earnings of $314 Million, or $1.26 Per Diluted Share, on Net Sales of $5.7 Billion
PRNewswire-FirstCall
FEDERAL WAY, Wash.
Jul 25, 2006
Weyerhaeuser Company (NYSE: WY) today reported second quarter net earnings of $314 million, or $1.26 per diluted share, on net sales of $5.7 billion. This compares with $420 million, or $1.71 per diluted share, on net sales of $5.7 billion for the second quarter 2005.
/Photo: http://www.newscom.com/cgi-bin/prnh/20040116/WYLOGO-a http://www.newscom.com/cgi-bin/prnh/20040116/WYLOGO-b Second quarter 2006 earnings include the following after-tax items: -- A charge of $12 million, or 5 cents per diluted share, related to the restructuring of the Containerboard, Packaging and Recycling business model. -- A charge of $11 million, or 4 cents per diluted share, related to the closure of facilities.
In addition, net earnings for second quarter 2006 include a one-time tax benefit of $48 million, or 19 cents per diluted share, related to a change in Texas state income tax law, a reduction in the Canadian federal income tax rate and a deferred tax adjustment related to the Medicare Part D subsidy.
Second quarter 2005 earnings include the following after-tax items:
-- A gain of $110 million, or 45 cents per diluted share, related to the
sale of the company's operations in coastal British Columbia.
-- A charge of $44 million, or 18 cents per diluted share, related to a
planned repatriation of $1.1 billion of eligible Canadian earnings
under the provisions of the American Jobs Creation Act of 2004.
-- The recognition of $37 million, or 15 cents per diluted share of a
deferred gain from previous timberlands sales.
-- A charge of $12 million, or 5 cents per diluted share, related to
litigation.
"The recovery in the paper markets was welcomed after a period of challenging quarters for those businesses," said Steven R. Rogel, chairman, president and chief executive officer. "At the same time, we can't rely on market conditions to improve our earnings performance. That's why we're being proactive and taking steps such as changing the business model of our integrated packaging business. This exciting initiative is starting to pay dividends and provides a glimpse into other changes we're making in how we go to market."
SUMMARY OF SECOND QUARTER FINANCIAL HIGHLIGHTS
Millions (except per share data)
2Q 2006 2Q 2005 Change
Net earnings $314 $420 ($106)
Earnings per diluted share $1.26 $1.71 ($0.45)
Net sales $5,687 $5,713 ($26)
SEGMENT RESULTS FOR SECOND QUARTER
(Contributions to Pre-Tax Earnings)
Millions 2Q 2006 2Q 2005 Change
Timberlands $224 $210 $14
Wood Products $131 $204 ($73)
Cellulose Fiber and White Papers $23 $16 $7
Containerboard, Packaging and
Recycling $74 $99 ($25)
Real Estate and Related Assets $123 $156 ($33)
TIMBERLANDS
2Q 2006 1Q 2006 Change
Contribution to pre-tax
earnings (millions) $224 $198 $26
Second quarter earnings improved from first quarter due to the realization of slightly higher log prices and the timing of portfolio improvement sales of non-strategic properties. Operating costs increased in both the West and South primarily due to higher fuel prices.
Third quarter earnings are expected to be lower than the second quarter due to seasonally reduced harvest and sales activity, softening domestic log prices and lower sales of non-strategic properties.
WOOD PRODUCTS
2Q 2006 1Q 2006 Change
Contribution to pre-tax
earnings (millions) $131 $117 $14
Earnings in the second quarter of 2006 improved from first quarter due to seasonal increases in shipment volumes for all major product lines despite a decline in residential construction activity. Average prices realized for oriented strand board and engineered lumber declined from the first quarter, partially offset by an increase for composite panels. Average prices realized for lumber were unchanged from first quarter.
Manufacturing costs for lumber and oriented strand board remained constant quarter to quarter, and manufacturing costs for composite products declined, primarily due to moderating natural gas and resin prices.
The company incurred $10 million in countervailing and anti-dumping duties and related costs on Canadian softwood lumber the company sold into the United States in the second quarter of 2006, compared with $11 million in the first quarter.
Weyerhaeuser expects substantially lower third quarter earnings from ongoing wood products operations compared with second quarter due to declining prices. The company expects to recognize a gain on the sale of the North American composite mills during the third quarter.
CELLULOSE FIBER AND WHITE PAPERS
2Q 2006 1Q 2006 Change
Contribution (charge) to
pre-tax earnings (millions) $23 ($763) $786
First quarter 2006 results included a $746 million impairment of fine paper goodwill. Second quarter included pre-tax charges of $11 million associated with the closure of the Prince Albert facility. Excluding these items, earnings improved $51 million from first quarter.
Fine paper and cellulose fiber products both experienced stronger market conditions, resulting in the realization of higher prices. Fine paper sales volumes reflected the closures of the Prince Albert and Dryden No.1 paper machine operations. Cellulose fiber sales volumes were flat compared to first quarter.
Second quarter manufacturing costs for fine paper increased significantly due to extended annual maintenance mill shutdowns and major power interruptions at Plymouth, N.C. Energy and chip costs improved across the segment; however this was partially offset by the continued negative effect of the Canadian exchange rate on the cost of Canadian operations.
Weyerhaeuser expects the segment to show continued improved performance in third quarter. The company expects to realize the full effect of price increases implemented during second quarter and the additional benefit of price increases announced for third quarter. Manufacturing costs are expected to decrease due to fewer scheduled maintenance shutdowns and improved operating performance.
CONTAINERBOARD, PACKAGING AND RECYCLING
2Q 2006 1Q 2006 Change
Contribution to pre-tax
earnings (millions) $74 $22 $52
Second quarter 2006 results included pre-tax charges of $18 million for charges associated with changes to the segment's business model and pre-tax charges of $5 million related to facility closures. Excluding these items, earnings improved $75 million compared with first quarter.
Second quarter earnings improved primarily due to the realization of containerboard and packaging price increases coupled with higher packaging shipments. Packaging shipments increased despite the closure of seven packaging facilities since December. Manufacturing costs declined from first quarter levels mainly due to moderating natural gas costs and increased asset utilization. The market conditions for OCC (old corrugated containers) drove costs significantly higher during the second quarter.
Weyerhaeuser expects continued earnings improvement from this segment in the third quarter due primarily to the full realization of previous price increases, partially offset by escalating OCC costs.
REAL ESTATE AND RELATED ASSETS
2Q 2006 1Q 2006 Change
Contribution to pre-tax
earnings (millions) $123 $172 ($49)
First quarter results included pre-tax land sales earnings of approximately $33 million and pre-tax gains related to insurance recoveries and partnership restructuring of $17 million. Excluding these items, total earnings were relatively unchanged from first quarter.
The number of single-family homes closed in second quarter increased seasonally compared with first quarter. Despite lower margins, single family earnings increased seasonally but were offset by higher operating costs. The backlog of homes sold, but not closed, at the end of the second quarter represents more than five months' sales.
Weyerhaeuser expects third quarter real estate and related earnings to approximate second quarter activity.
ABOUT WEYERHAEUSER
Weyerhaeuser Company, one of the world's largest integrated forest products companies, was incorporated in 1900. In 2005, sales were $22.6 billion. It has offices or operations in 18 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/ .
EARNINGS CALL INFORMATION
The company will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on July 25 to discuss second quarter results.
To access the conference call from within North America, dial 1-888-221-5699 at least 15 minutes prior to the call. Those calling from outside North America should dial 1-706-643-3795. Replays will be available for one week at 1-800-642-1687 (access code -- 2336060) from within North America and at 1-706-645-9291 (access code -- 2336060) from outside North America.
The call is being webcast through Weyerhaeuser's Internet site at http://investor.weyerhaeuser.com/ by clicking on the "Q2 2006 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/CCBN'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 STATEMENT
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 third quarter 2006; expected earnings and performance of the company's business segments during the third quarter 2006, demand and pricing for the company's products in the third quarter 2006, reduced harvest and sales activity from normal seasonal shutdowns, softening domestic log prices and lower sales of non-strategic properties in the third quarter 2006, lower prices for lumber, oriented strand board, and some engineered lumber products in the third quarter 2006, the expected closing of the sale of the North American composite mills during the third quarter 2006, reduction in scheduled annual maintenance outages and improved operating performance in the Cellulose Fiber and White Paper segment, 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;
-- Chemical prices;
-- Performance of the company's manufacturing operations including
unexpected maintenance requirements;
-- 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, and changes in accounting regulations;
-- The effect of weather;
-- The risk of loss from fires, floods, windstorms, hurricanes and other
natural disasters;
-- Transportation costs;
-- Legal proceedings;
-- The effect of timing of retirements and changes in the market price of
company stock on charges for stock-based compensation; 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 Year-to-date
March 26, March 27, June 25, June 26, June 25, June 26,
2006 2005 2006 2005 2006 2005
Net sales and revenues:
Weyerhaeuser (1) $4,596 $4,629 $4,941 $5,065 $9,537 $9,694
Real Estate and
Related Assets 690 655 746 648 1,436 1,303
Total net sales
and revenues 5,286 5,284 5,687 5,713 10,973 10,997
Costs and expenses:
Weyerhaeuser:
Costs of products
sold (2) 3,638 3,550 3,838 3,869 7,476 7,419
Depreciation,
depletion and
amortization 308 318 307 321 615 639
Selling expenses 110 116 126 117 236 233
General and
administrative
expenses 256 221 224 217 480 438
Research and
development
expenses 16 14 15 12 31 26
Taxes other than
payroll and
income taxes 44 46 46 48 90 94
Charges for
restructuring (3) -- 5 18 4 18 9
Charges for closure
of facilities 1 5 17 3 18 8
Impairment
of goodwill (4) 746 -- 3 -- 749 --
Other operating costs,
net (5) (6) 30 9 (23) (40) 7 (31)
5,149 4,284 4,571 4,551 9,720 8,835
Real Estate and Related Assets:
Costs and operating
expenses (7) 481 426 555 441 1,036 867
Depreciation
and amortization 3 3 4 4 7 7
Selling expenses 37 33 43 36 80 69
General and
administrative
expenses 30 24 34 25 64 49
Taxes other than
payroll and
income taxes 1 1 2 -- 3 1
Other operating
costs, net (3) -- 3 (2) -- (2)
Impairment of
long-lived assets -- -- -- -- -- --
549 487 641 504 1,190 991
Total costs
and expenses 5,698 4,771 5,212 5,055 10,910 9,826
Operating income (412) 513 475 658 63 1,171
Interest expense and other:
Weyerhaeuser:
Interest expense
incurred (8) (152) (196) (152) (179) (304) (375)
Less interest
capitalized (2) 16 -- 20 2 36 2
Interest income
and other 19 27 15 20 34 47
Equity in income
(loss) of
affiliates (9) 3 -- 6 4 9 4
Real Estate and
Related Assets:
Interest expense
incurred (14) (14) (14) (14) (28) (28)
Less interest
capitalized 14 14 14 14 28 28
Interest income
and other 10 5 3 (2) 13 3
Equity in income
of unconsolidated
entities (10) 21 10 15 13 36 23
Earnings before
income taxes (495) 359 382 516 (113) 875
Income taxes (11) (87) (125) (82) (225) (169) (350)
Earnings from
continuing
operations (582) 234 300 291 (282) 525
Earnings from
discontinued
operations, net
of taxes (12) 2 5 14 129 16 134
Net earnings $(580) $239 $314 $420 $(266) $659
Basic net earnings per share:
Continuing
operations $(2.37) $0.96 $1.21 $1.20 $(1.15) $2.15
Discontinued
operations 0.01 0.02 0.06 0.52 0.07 0.55
Net earnings
per share $(2.36) $0.98 $1.27 $1.72 $(1.08) $2.70
Diluted net earnings per share:
Continuing
operations $(2.37) $0.96 $1.20 $1.19 $(1.15) $2.15
Discontinued
operations 0.01 0.02 0.06 0.52 0.07 0.54
Net earnings
per share $(2.36) $0.98 $1.26 $1.71 $(1.08) $2.69
Dividends paid
per share $0.50 $0.40 $0.50 $0.50 $1.00 $0.90
Weighted average
shares outstanding (in thousands)
Basic 245,794 242,863 248,147 244,702 246,971 243,782
Diluted 245,794 244,185 249,194 245,881 246,971 244,959
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
CONSOLIDATED EARNINGS Q3 Q4 Year-to-date
(in millions) Sept. 25, Dec. 25, Dec. 25,
2005 2005 2005
Net sales and revenues:
Weyerhaeuser (1) $4,898 $4,764 $19,356
Real Estate and Related Assets 596 1,016 2,915
Total net sales and revenues 5,494 5,780 22,271
Costs and expenses:
Weyerhaeuser:
Costs of products sold (2) 3,833 3,894 15,146
Depreciation, depletion
and amortization 322 328 1,289
Selling expenses 117 350 457
General and
administrative expenses 235 222 895
Research and development expenses 18 17 61
Taxes other than
payroll and income taxes 69 16 179
Charges for restructuring (3) 2 10 21
Charges for closure of facilities 29 656 693
Impairment of goodwill (4) -- -- --
Other operating costs, net(5) (6) (32) 3 (60)
4,593 5,253 18,681
Real Estate and Related Assets:
Costs and operating expenses (7) 401 677 1,945
Depreciation and amortization 4 5 16
Selling expenses 360 46 151
General and
administrative expenses 27 28 104
Taxes other than
payroll and income taxes 1 1 3
Other operating costs, net (2) 1 (3)
Impairment of long-lived assets -- 33 33
467 791 2,249
Total costs and expenses 5,060 6,044 20,930
Operating income 434 (264) 1,341
Interest expense and other:
Weyerhaeuser:
Interest expense incurred (8) (193) (171) (739)
Less interest capitalized (2) 3 4 9
Interest income and other 143 24 214
Equity in income
(loss) of affiliates (9) 2 (12) (6)
Real Estate and Related Assets:
Interest expense incurred (13) (14) (55)
Less interest capitalized 13 14 55
Interest income and other 4 5 12
Equity in income of unconsolidated
entities (10) 14 20 57
Earnings before income taxes 407 (394) 888
Income taxes (11) (119) 151 (318)
Earnings from
continuing operations 288 (243) 570
Earnings from discontinued
operations, net of taxes (12) (3) 32 163
Net earnings $285 $(211) $733
Basic net earnings per share:
Continuing operations $2.47 $(0.99) $2.33
Discontinued operations (0.01) 0.13 0.67
Net earnings per share $2.46 $(0.86) $3.00
Diluted net earnings per share:
Continuing operations $2.46 $ (0.99) $2.32
Discontinued operations (0.01) 0.13 0.66
Net earnings per share $2.45 $(0.86) $2.98
Dividends paid per share $0.50 $0.50 $1.90
Weighted average shares outstanding (in thousands)
Basic 245,009 245,215 244,447
Diluted 246,190 246,198 245,559
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
FOOTNOTES TO CONSOLIDATED EARNINGS
(in millions)
YTD YTD
Q1 Q1 Q2 Q2 Q2 Q2 Q3 Q4 YE
2006 2005 2006 2005 2006 2005 2005 2005 2005
(1) Countervailing and
anti-dumping duties and
related costs per quarter
were charges of: $11 $22 $10 $27 $21 $49 $19 $16 $84
(2) Weyerhaeuser capitalized interest for the first and second quarters of
2006 include $14 million and $15 million, respectively, for the
capitalization of Weyerhaeuser interest on WRECO assets. Weyerhaeuser
cost of products sold includes $7 million in each of the first and
second quarters of 2006 to expense previously capitalized interest in
connection with the sale of the related real estate assets. See Note 6
for 2005 information.
(3) The second quarter of 2006 includes an $18 million dollar charge
related to the restructuring of the Containerboard, Packaging and
Recycling business model.
(4) The first and second quarters of 2006 include write-offs of goodwill
associated with the fine paper business of $746 million and $3
million, respectively.
YTD YTD
Q1 Q1 Q2 Q2 Q2 Q2 Q3 Q4 YE
2006 2005 2006 2005 2006 2005 2005 2005 2005
(5) Net foreign exchange
gains (losses),
primarily from
fluctuations in
Canadian and
New Zealand
exchange rates: $(26) $13 $21 $(13) $(5) $-- $37 $(21) $16
(6) 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 fourth quarter of 2005 includes a $38 million charge for the
settlement of linerboard antitrust litigation and $43 million of
income for the cumulative effect of a change to begin capitalizing
Weyerhaeuser interest to assets of Weyerhaeuser Real Estate Company.
(7) The first quarter of 2006 includes income of $8 million related to a
warranty insurance recovery.
(8) The third and fourth quarters of 2005 include charges of $21 million
and $15 million, respectively, for the early extinguishment of debt.
(9) The fourth quarter of 2005 includes a $15 million charge related to
the impairment of an investment in an equity affiliate.
(10) The first quarter of 2006 includes recognition of $9 million of
deferred income in connection with partnership restructurings.
(11) The second quarter of 2006 includes a one-time tax benefit of $48
million related to a change in Texas state income tax law, a
reduction in the Canadian federal income tax rate and a deferred tax
adjustment related to the Medicare Part D subsidy. 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.
(12) Includes the net operating results of the company's coastal British
Columbia operations and its North American and French composites
operations. The second quarter of 2005 includes a gain of $110
million, including a tax benefit of $46 million, related to the sale
of the coastal British Columbia operations. The fourth quarter of
2005 includes a pretax gain of $57 million and related tax expense of
$23 million associated with the sale of the French composites
operations.
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
Net sales and revenues (in millions):
Q1 Q2 Year-to-date
March 26, March 27, June 25, June 26, June 25, June 26,
2006 2005 2006 2005 2006 2005
Timberlands:
Logs $201 $182 $198 $195 $399 $377
Other products 62 82 71 63 133 145
263 264 269 258 532 522
Wood Products:
Softwood lumber 782 892 857 1,032 1,639 1,924
Plywood 135 183 147 196 282 379
Veneer 13 13 13 10 26 23
Composite panels 121 120 140 132 261 252
OSB 287 288 273 306 560 594
Hardwood lumber 99 94 105 102 204 196
Engineered
I-Joists 183 160 216 213 399 373
Engineered
Solid Section 221 190 249 241 470 431
Logs 7 27 5 24 12 51
Other products 225 272 295 339 520 611
2,073 2,239 2,300 2,595 4,373 4,834
Cellulose Fiber and White Papers:
Pulp 394 376 402 355 796 731
Paper 613 599 601 611 1,214 1,210
Coated groundwood 40 42 44 47 84 89
Liquid
packaging board 46 47 62 52 108 99
Other products 14 14 16 12 30 26
1,107 1,078 1,125 1,077 2,232 2,155
Containerboard, Packaging and Recycling:
Containerboard 82 117 84 101 166 218
Packaging 911 898 1,002 969 1,913 1,867
Recycling 80 92 85 92 165 184
Bags 20 22 20 21 40 43
Other products 34 34 46 40 80 74
1,127 1,163 1,237 1,223 2,364 2,386
Real Estate
and Related Assets 690 655 747 648 1,437 1,303
Corporate and Other 116 149 117 151 233 300
Less sales
of discontinued
operations (90) (264) (108) (239) (198) (503)
$5,286 $5,284 $5,687 $5,713 $10,973 $10,997
Contribution (charge) to earnings:
(in millions)
Q1 Q2 Year-to-date
March 26, March 27, June 25, June 26, June 25, June 26,
2006 2005 2006 2005 2006 2005
Timberlands
(1) (2) (4) $198 $200 $224 $210 $422 $410
Wood Products
(1) (2) (5) 117 131 131 204 248 335
Cellulose Fiber
and White Papers
(1) (2) (6) (763) 19 23 16 (740) 35
Containerboard,
Packaging and
Recycling
(1) (2) (7) 22 48 74 99 96 147
Real Estate
and Related Assets
(2) (8) 172 183 123 156 295 339
Corporate and Other
(1) (2) (3) (9) (102) (17) (40) 99 (142) 82
$(356) $564 $535 $784 $179 $1,348
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
Net sales and revenues (in millions):
Q3 Q4 Year-to-date
Sept. 25, Dec. 25, Dec. 25,
2005 2005 2005
Timberlands:
Logs $188 $196 $761
Other products 65 76 286
253 272 1,047
Wood Products:
Softwood lumber 889 811 3,624
Plywood 184 172 735
Veneer 9 12 44
Composite panels 122 123 497
OSB 267 303 1,164
Hardwood lumber 95 99 390
Engineered I-Joists 202 181 756
Engineered Solid Section 244 221 896
Logs 6 5 62
Other products 326 290 1,227
2,344 2,217 9,395
Cellulose Fiber and White Papers:
Pulp 381 370 1,482
Paper 604 603 2,417
Coated groundwood 45 46 180
Liquid packaging board 50 54 203
Other products 16 12 54
1,096 1,085 4,336
Containerboard, Packaging and Recycling:
Containerboard 86 91 395
Packaging 929 914 3,710
Recycling 87 81 352
Bags 20 20 83
Other products 47 46 167
1,169 1,152 4,707
Real Estate and Related Assets 596 1,016 2,915
Corporate and Other 146 154 600
Less sales of
discontinued operations (110) (116) (729)
$5,494 $5,780 $22,271
Contribution (charge) to earnings:
(in millions) Q3 Q4 Year-to-date
Sept. 25, Dec. 25, Dec. 25,
2005 2005 2005
Timberlands (1) (2) (4) $191 $183 $784
Wood Products (1) (2) (5) 124 26 485
Cellulose Fiber and White Papers
(1) (2) (6) (2) (477) (444)
Containerboard, Packaging
and Recycling (1) (2) (7) 36 (188) (5)
Real Estate and
Related Assets (2) (8) 145 250 734
Corporate and Other
(1) (2) (3) (9) 101 33 216
$595 $(173) $1,770
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
FOOTNOTES TO CONTRIBUTION (CHARGE) TO EARNINGS
(in millions)
(1) Closure charges by segment:
YTD YTD
Q1 Q1 Q2 Q2 Q2 Q2 Q3 Q4 YE
2006 2005 2006 2005 2006 2005 2005 2005 2005
Timberlands $-- $3 $-- $-- $-- $3 $-- $3 $6
Wood Products -- 1 1 1 1 2 6 91 99
Cellulose Fiber
and White Papers (1) -- 11 -- 10 -- 22 427 449
Containerboard,
Packaging and
Recycling 2 4 5 2 7 6 1 130 137
Corporate and Other -- -- -- -- -- -- -- 5 5
$1 $8 $17 $3 $18 $11 $29 $656 $696
The above closure charges for the first quarter and full year 2005
include $3 million of costs incurred within the company's discontinued
operations.
(2) Stock-based compensation charges (income) recognized by segment:
YTD YTD
Q1 Q1 Q2 Q2 Q2 Q2 Q3 Q4 YE
2006 2005 2006 2005 2006 2005 2005 2005 2005
Timberlands $1 $-- $-- $-- $1 $-- $-- $-- $--
Wood Products 2 -- -- -- 2 -- -- -- --
Cellulose Fiber
and White Papers 1 -- -- -- 1 -- -- -- --
Containerboard,
Packaging and
Recycling 2 -- (1) -- 1 -- -- -- --
Real Estate and
Related Assets -- -- 1 -- 1 -- -- -- --
Corporate and Other 15 2 (4) (6) 11 (4) 3 12 11
$21 $2 $(4) $(6) $17 $(4) $3 $12 $11
YTD YTD
Q1 Q1 Q2 Q2 Q2 Q2 Q3 Q4 YE
2006 2005 2006 2005 2006 2005 2005 2005 2005
(3) Net foreign
exchange gains (losses)
included in Corporate
and Other were: $(26) $13 $20 $(12) $(6) $1 $38 $(20) $19
(4) Additional Timberlands notes:
(a) Hurricane related losses were $5 million in third quarter 2005 and
$6 million in fourth quarter 2005.
(5) Additional Wood Products notes:
(a) Refer to footnote 1 to Consolidated Earnings regarding
countervailing duty and anti-dumping costs included in Wood
Products.
(b) 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.
(c) The second quarter of 2005 includes a $6 million gain related to a
tenure reallocation agreement with the British Columbia
government.
(6) Additional Cellulose Fiber and White Papers notes:
(a) The first and second quarters of 2006 include write-offs of
goodwill associated with the fine paper business of $746 million
and $3 million, respectively.
(7) Additional Containerboard, Packaging and Recycling notes:
(a) The second quarter of 2006 includes a charge of $18 million
related to the restructuring of the Containerboard, Packaging and
Recycling business model.
(b) The first and fourth quarters of 2005 include charges of $12
million and $38 million, respectively, associated with the
settlement of linerboard antitrust lawsuits.
(c) The third quarter of 2005 had a charge of $1 million related to
hurricane damage.
(8) Additional Real Estate and Related Assets notes:
(a) The first quarter of 2006 includes income of $8 million related to
a warranty insurance recovery and income of $9 million related to
recognition of deferred income in connection with partnership
restructurings.
(b) The first and second quarters of 2006 includes net gains (losses)
on land and lot sales of $33 million and ($1) million,
respectively. The first, second, third and fourth quarters of
2005 include net gains (losses) on land and lot sales of
$57 million, $21 million, ($1) and $2 million, respectively. The
fourth quarter of 2005 also includes a $33 million charge for the
impairment of unimproved land.
(9) Additional Corporate and Other notes:
(a) 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 2005 includes a $57 million
gain on the sale of the company's French composites operations and
$43 million of income for the cumulative effect of a change to
begin capitalizing Weyerhaeuser interest to assets of Weyerhaeuser
Real Estate Company.
(b) The fourth quarter of 2005 includes charges of $15 million related
to the impairment of an investment in an equity affiliate.
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
Third party sales volumes: Q1 Q2 Year-to-date
March March June June June June
26, 27, 25, 26, 25, 26,
2006 2005 2006 2005 2006 2005
Timberlands (thousands):
Logs - cunits 935 864 808 863 1,743 1,727
Wood Products (millions):
Softwood lumber
- board feet 1,921 2,057 2,113 2,355 4,034 4,412
Plywood - square
feet (3/8") 389 537 458 600 847 1,137
Veneer - square
feet (3/8") 61 60 63 59 124 119
Composite panels
- square feet (3/4") 302 299 324 317 626 616
Oriented strand board
- square feet (3/8") 1,000 908 1,069 1,041 2,069 1,949
Hardwood lumber
- board feet 103 102 110 114 213 216
Engineered I-Joists
- lineal feet 114 108 137 138 251 246
Engineered Solid Section
- cubic feet 9 9 11 10 20 19
Logs - cunits
(in thousands) 55 187 46 177 101 364
Cellulose Fiber and White Papers (thousands):
Pulp - air-dry
metric tons 651 629 647 587 1,298 1,216
Paper - tons 753 736 662 742 1,415 1,478
Coated groundwood - tons 52 58 59 62 111 120
Liquid packaging
board - tons 56 60 71 65 127 125
Paper converting - tons 511 475 474 494 985 969
Containerboard, Packaging and Recycling (thousands):
Containerboard - tons 211 295 189 259 400 554
Packaging - MSF 18,342 17,354 19,168 18,600 37,510 35,954
Recycling - tons 733 692 719 695 1,452 1,387
Kraft bags and
sacks - tons 20 23 20 22 40 45
Real Estate and Related Assets:
Single-family
homes sold 1,472 1,378 1,325 1,525 2,797 2,903
Single-family
homes closed 1,161 1,189 1,483 1,279 2,644 2,468
Single-family
homes sold but not
closed at
end of period 3,105 2,561 2,947 2,807 2,947 2,807
Total production volumes: Q1 Q2 Year-to-date
March March June June June June
26, 27, 25, 26, 25, 26,
2006 2005 2006 2005 2006 2005
Timberlands (thousands):
Fee Depletion - cunits 2,132 2,248 2,083 2,231 4,215 4,479
Wood Products (millions):
Softwood lumber
- board feet 1,663 1,821 1,650 1,869 3,313 3,690
Plywood
- square feet (3/8") 241 303 245 302 486 605
Veneer - square
feet (3/8") (1) 455 517 455 529 910 1,046
Composite panels
- square feet (3/4") 278 267 288 282 566 549
Oriented strand board
- square feet (3/8") 1,073 1,007 1,062 1,019 2,135 2,026
Hardwood lumber
- board feet 82 92 83 96 165 188
Engineered
I-Joists - LF 121 133 136 132 257 265
Engineered Solid
Section - CF 11 11 12 10 23 21
Cellulose Fiber and White Papers (thousands):
Pulp - air-dry
metric tons 676 621 588 614 1,264 1,235
Paper - tons (2) 724 763 672 752 1,396 1,515
Coated groundwood - tons 56 55 56 59 112 114
Liquid packaging
board - tons 61 60 75 64 136 124
Paper converting - tons 498 475 461 487 959 962
Containerboard, Packaging and Recycling (thousands):
Containerboard
- tons (3) 1,575 1,503 1,533 1,581 3,108 3,084
Packaging - MSF 19,550 18,628 20,290 19,915 39,840 38,543
Recycling - tons (4) 1,716 1,624 1,684 1,673 3,400 3,297
Kraft bags and sacks
- tons 19 23 20 22 39 45
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
Third party sales volumes: Q3 Q4 Year-to-date
Sept. 25, Dec. 25, Dec. 25,
2005 2005 2005
Timberlands (thousands):
Logs - cunits 886 939 3,552
Wood Products (millions):
Softwood lumber - board feet 2,179 2,059 8,650
Plywood - square feet (3/8") 558 485 2,180
Veneer - square feet (3/8") 51 61 231
Composite panels - square feet (3/4") 308 305 1,229
Oriented strand board
- square feet (3/8") 1,008 991 3,948
Hardwood lumber - board feet 105 106 427
Engineered I-Joists - lineal feet 125 113 484
Engineered Solid Section - cubic feet 10 9 38
Logs - cunits (in thousands) 41 46 451
Cellulose Fiber and White Papers (thousands):
Pulp - air-dry metric tons 653 633 2,502
Paper - tons 757 761 2,996
Coated groundwood - tons 56 56 232
Liquid packaging board - tons 64 69 258
Paper converting - tons 494 501 1,964
Containerboard, Packaging and Recycling (thousands):
Containerboard - tons 238 254 1,046
Packaging - MSF 18,560 19,117 73,631
Recycling - tons 665 676 2,728
Kraft bags and sacks - tons 22 22 89
Real Estate and Related Assets:
Single-family homes sold 1,608 1,174 5,685
Single-family homes closed 1,257 1,922 5,647
Single-family homes sold but
not closed at end of period 3,158 2,410 2,410
Total production volumes: Q3 Q4 Year-to-date
Sept. 25, Dec. 25, Dec. 25,
2005 2005 2005
Timberlands (thousands):
Fee Depletion - cunits 2,098 2,153 8,730
Wood Products (millions):
Softwood lumber - board feet 1,651 1,645 6,986
Plywood - square feet (3/8") 296 254 1,155
Veneer - square feet (3/8") (1) 486 447 1,979
Composite panels - square feet (3/4") 268 263 1,080
Oriented strand board
- square feet (3/8") 1,017 1,035 4,078
Hardwood lumber - board feet 91 85 364
Engineered I-Joists - LF 108 110 483
Engineered Solid Section - CF 10 10 41
Cellulose Fiber and White Papers (thousands):
Pulp - air-dry metric tons 663 604 2,502
Paper - tons (2) 765 780 3,060
Coated groundwood - tons 60 60 234
Liquid packaging board - tons 69 71 264
Paper converting - tons 483 505 1,950
Containerboard, Packaging and Recycling (thousands):
Containerboard - tons (3) 1,597 1,587 6,268
Packaging - MSF 19,416 20,130 78,089
Recycling - tons (4) 1,716 1,730 6,743
Kraft bags and sacks - tons 21 22 88
(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 26, June 25, Dec. 25,
Assets 2006 2006 2005
Weyerhaeuser
Current assets:
Cash and short-term investments $105 $113 $818
Receivables, less allowances 1,828 1,942 1,727
Inventories 2,050 1,911 1,899
Prepaid expenses 433 427 414
Assets of discontinued operations 136 134 136
Total current assets 4,552 4,527 4,994
Property and equipment 10,175 10,158 10,397
Construction in progress 640 607 528
Timber and timberlands at cost,
less fee stumpage
charged to disposals 3,702 3,696 3,705
Investments in and advances
to equity affiliates 475 479 486
Goodwill 2,235 2,243 2,982
Deferred pension
and other assets 1,284 1,303 1,314
Restricted assets held by
special purpose entities 914 916 916
23,977 23,929 25,322
Real Estate and Related Assets
Cash and short-term investments 39 36 286
Receivables, less allowances 143 141 42
Real estate and land for
sale and development 2,639 2,872 2,092
Other assets 413 486 357
Assets not owned,
consolidated under FIN 46R 170 154 130
3,404 3,689 2,907
Total assets $27,381 $27,618 $28,229
Liabilities and Shareholders' Interest
Weyerhaeuser
Current liabilities:
Notes payable
and commercial paper $1 $2 $3
Current maturities
of long-term debt 699 603 389
Accounts payable 1,193 1,222 1,241
Accrued liabilities 1,253 1,327 1,622
Total current liabilities 3,146 3,154 3,255
Long-term debt 6,938 7,025 7,404
Deferred income taxes 4,001 3,913 4,035
Deferred pension, other
postretirement benefits
and other liabilities 1,651 1,674 1,591
Liabilities (nonrecourse
to Weyerhaeuser) held by
special purpose entities 763 765 764
16,499 16,531 17,049
Real Estate and Related Assets
Notes payable and commercial paper 63 125 3
Long-term debt 878 628 851
Other liabilities 598 707 417
Liabilities not owned,
consolidated under FIN 46R 114 127 109
1,653 1,587 1,380
Total liabilities 18,152 18,118 18,429
Shareholders' interest 9,229 9,500 9,800
Total liabilities
and shareholders' interest $27,381 $27,618 $28,229
STATEMENT OF CASH FLOWS
SELECTED INFORMATION (unaudited)
(in millions)
(Weyerhaeuser only, excludes Real Estate & Related Assets)
Year-to-
Q1 Q2 Year-to-date Q3 Q4 date
March March June June June June Sept. Dec. Dec.
26, 27, 25, 26, 25, 26, 25, 25, 25,
2006 2005 2006 2005 2006 2005 2005 2005 2005
Net cash
from
operations $(209) $(203) $565 $723 $356 $520 $452 $648 $1,620
Cash paid
for property
and equipment (182) (117) (184) (196) (366) (313) (220) (310) (843)
Cash paid
for timberlands
reforestation (12) (12) (9) (6) (21) (18) (6) (8) (32)
Cash received
from issuances
of debt -- -- -- 1 -- 1 -- -- 1
Revolving credit
facilities,
notes and
commercial paper
borrowings, net (68) 19 19 23 (49) 42 (40) 170 172
Payments on debt (158) (404) (10) (206) (168) (610) (965) (603)(2,178)
Proceeds from
the sale
of operations -- -- -- 1,107 -- 1,107 -- 102 1,209
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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/