Newsroom
Weyerhaeuser Reports 2nd Quarter Net Earnings of $32 Million, or 15 Cents per Diluted Share, on Sales of $4.3 Billion
PRNewswire-FirstCall
FEDERAL WAY, Wash.
Aug 3, 2007
Weyerhaeuser Company (NYSE: WY) today reported net earnings of $32 million for the second quarter of 2007, or 15 cents per diluted share, on sales of $4.3 billion.
(Logo: http://www.newscom.com/cgi-bin/prnh/20040116/WYLOGO-a) (Logo: http://www.newscom.com/cgi-bin/prnh/20040116/WYLOGO-b) Second quarter 2007 earnings include the following after-tax items: * A charge of $30 million, or 14 cents per diluted share, for asset impairments in the Wood Products and Real Estate and Related Assets segments, closures of Wood Products facilities and the sale of the Canadian distribution facilities. * A charge of $27 million, or 12 cents per diluted share, related to the early extinguishment of debt. * A charge of $25 million, or 12 cents per diluted share, related to legal settlements and a contract termination. * A charge of $5 million, or 2 cents per diluted share, for additional costs related to the fine paper business and related assets that were distributed to Weyerhaeuser shareholders in the first quarter 2007 Domtar transaction. * A net gain of $15 million, or 7 cents per diluted share, on the sale of a previously closed box plant site in California and charges related to a fire and subsequent closure of a New Jersey box plant.
Excluding these items, the company earned $104 million, or 48 cents per diluted share, in the second quarter of 2007.
Second quarter 2006 results have been recast to reflect the fine paper business and related assets included in the Domtar transaction as discontinued operations and to apply a new accounting pronouncement to expense planned major maintenance costs as incurred.
For second quarter 2006, Weyerhaeuser net earnings were $298 million, or $1.19 per diluted share, on net sales of $4.9 billion. Second quarter 2006 earnings included 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 included 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.
Excluding these items, the company earned $273 million, or $1.09 per diluted share, in the second quarter of 2006.
SUMMARY OF SECOND QUARTER BUSINESS PERFORMANCE
* Timberlands - Higher seasonal costs and lower sales of non-strategic
timberlands adversely affected earnings.
* Wood Products - Lumber, plywood and oriented strand board prices
increased slightly, but market conditions remained difficult.
* Cellulose Fibers - Prices continued to increase.
* Containerboard Packaging and Recycling - Normal seasonal upswing in
packaging shipments occurred and average price realizations for
packaging increased due to product mix, but fiber costs remain high.
* Real Estate and Related Assets - Market conditions remain challenging
and margins continue to decline.
"In response to continued challenging market conditions, we managed production and costs throughout the second quarter," said Steven R. Rogel, chairman, president and chief executive officer. "Our focus remains on the strategic initiatives we've been implementing to create more value for shareholders. In the coming quarter, we will look for ways to further reduce costs and improve performance as we face challenges produced by the continuing sluggish housing market. Meeting these challenges will require tough decisions and the focus of every employee."
SUMMARY OF SECOND QUARTER FINANCIAL HIGHLIGHTS
Millions (except per share
data) 2Q 2007 2Q 2006 Change
Net earnings $32 $298 ($266)
Earnings per diluted share $0.15 $1.19 ($1.04)
Net sales $4,334 $4,867 ($533)
SEGMENT RESULTS FOR SECOND QUARTER
(Contributions to Pre-Tax
Earnings)
Millions 2Q 2007 2Q 2006 Change
Timberlands $142 $224 ($82)
Wood Products ($123) $131 ($254)
Cellulose Fibers $48 $23 $25
Fine Paper $0 ($20) $20
Containerboard, Packaging and
Recycling $112 $69 $43
Real Estate and Related Assets $64 $123 ($59)
TIMBERLANDS
2Q 2007 1Q 2007 Change
Contribution to pre-tax
earnings (millions) $142 $175 ($33)
2Q 2007 Performance - Seasonal increases in road and silviculture costs, and a lower level of non-strategic timberland transactions, contributed to the decrease in earnings from the first quarter. In addition, the segment changed its method of accounting for oil and gas revenues and revenues associated with leasing the company's timberlands. The effect of this change was an $11 million decrease in second quarter earnings. Price and volume movements did not have a significant effect on the change from first quarter.
3Q 2007 Outlook - Weyerhaeuser expects non-strategic timberland transactions to be higher in the third quarter compared with second quarter. The continued weakness in the housing market is expected to result in lower volumes and prices.
WOOD PRODUCTS
2Q 2007 1Q 2007 Change
Contribution to pre-tax
earnings (loss) (millions) ($123) ($167) $44
2Q 2007 Performance - Excluding the items noted below, the segment's net loss decreased $38 million from the first quarter, but still reflects difficult market conditions.
* Second quarter 2007 includes pre-tax charges of $33 million for asset
impairments and other charges which include the sale of the Canadian
distribution business, the closure of the Miramichi, New Brunswick
oriented strand board mill and the announced closure of the Claresholm,
Alberta engineered lumber mill.
* Second quarter 2007 also includes a pre-tax charge of $17 million for
the expected settlement of litigation.
* First quarter 2007 includes pre-tax charges of $56 million for asset
impairment charges associated with the Canadian distribution business
and the Miramichi oriented strand board mill.
Weak demand in housing continued to affect segment results. Average prices realized for lumber, plywood, and oriented strand board increased slightly from the first quarter, partially offset by decreased prices for engineered lumber. Sales volumes for lumber and engineered wood products increased, but plywood and oriented strand board volumes declined. The strengthening Canadian dollar had an unfavorable effect on the earnings contribution from products manufactured in Canada.
3Q 2007 Outlook - The company expects the segment to operate at a smaller loss in third quarter compared with the second quarter due primarily to higher prices for oriented strand board, and cost decreases for logs and overhead. Prices for softwood lumber and engineered wood products are expected to decrease. The company expects shipment volumes for lumber and engineered wood products to remain close to second quarter levels. Shipment volumes for oriented strand board are projected to decrease based on anticipated mill operating postures.
CELLULOSE FIBERS
2Q 2007 1Q 2007 Change
Contribution to pre-tax
earnings (millions) $48 $22 $26
2Q 2007 Performance - Market conditions continued to improve. Pulp shipment volumes were down in the second quarter due to the first quarter completion of the Domtar transaction. Maintenance costs declined and overall productivity improved as the segment completed annual maintenance outages at two mills in the second quarter, compared to three mill maintenance outages in the first quarter.
3Q 2007 Outlook - Weyerhaeuser expects stronger prices to result in increased earnings from the segment in third quarter. The company has less annual maintenance scheduled.
CONTAINERBOARD, PACKAGING AND RECYCLING
2Q 2007 1Q 2007 Change
Contribution to pre-tax
earnings (millions) $112 $67 $45
2Q 2007 Performance - The second quarter included a pre-tax gain of $29 million on the sale of a previously closed box plant site in California and $5 million in charges related to a fire and subsequent closure of the Closter, N.J. box plant. Excluding these items, segment earnings increased $21 million compared to first quarter.
Average packaging price realizations increased mainly due to product mix. Containerboard export prices were higher than first quarter. Increased packaging shipments and lower energy costs were partially offset by increased costs for old corrugated containers (OCC) and annual scheduled maintenance downtime at the containerboard mills.
3Q 2007 Outlook - Weyerhaeuser expects third quarter earnings for the segment to increase from second quarter levels. The company expects to benefit from higher packaging shipment volume, fewer scheduled maintenance outages and lower seasonal energy costs. OCC costs are expected to be higher.
REAL ESTATE AND RELATED ASSETS
2Q 2007 1Q 2007 Change
Contribution to pre-tax
earnings (millions) $64 $58 $6
2Q 2007 Performance - Single-family home closings increased slightly over the first quarter; however, average sales prices and margins continued to decline due to the weak housing market. Second quarter earnings included a gain of $42 million on the sale of an apartment project and charges of $12 million for asset impairments. The backlog of homes sold, but not closed, remained approximately five months.
3Q 2007 Outlook - Weyerhaeuser expects third quarter earnings from this segment to be lower than the second quarter. Margins continue to decline due to difficult market conditions. The company does not anticipate any significant gains from non-homebuilding activities in the third quarter.
ABOUT WEYERHAEUSER
Weyerhaeuser Company, one of the world's largest forest products companies, was incorporated in 1900. In 2006, sales were $21.9 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
Weyerhaeuser will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on Aug. 3 to discuss second quarter results.
To access the conference call from within North America, dial 1-800-218-0530 at least 15 minutes before the call. Those calling from outside North America should dial 1-303-205-0033. Replays will be available for one week at 1-800-405-2236 (access code - 11092363#) from within North America and at 1-303-590-3000 (access code - 11092363#) from outside North America. The call is being webcast through Weyerhaeuser's Internet site at http://investor.weyerhaeuser.com/ by clicking on the "Q2 2007 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 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 for third quarter 2007 regarding the company's markets, earnings and performance of the company's business segments,, demand and pricing for the company's products, non-strategic land sales, product mix, increases in OCC and fiber costs, lower seasonal energy costs and scheduled annual maintenance outages 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, pest
infestation 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. 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
(in millions) April 1, March 26, July 1, June 25, July 1, June 25,
2007 2006 2007 2006 2007 2006
Net sales and
revenues:
Weyerhaeuser $3,404 $3,761 $3,775 $4,121 $7,179 $7,882
Real Estate and
Related Assets 487 690 559 746 1,046 1,436
Total net sales
and revenues 3,891 4,451 4,334 4,867 8,225 9,318
Costs and expenses:
Weyerhaeuser:
Costs of products
sold (1) 2,785 2,947 3,085 3,190 5,870 6,137
Depreciation,
depletion and
amortization 232 233 223 231 455 464
Selling expenses 109 100 109 117 218 217
General and
administrative
expenses 200 235 199 205 399 440
Research and
development
expenses (2) 16 16 18 15 34 31
Charges (reversals)
for
restructuring (3) 3 (1) 2 18 5 17
Charges for
closure
of facilities (4) 5 2 19 5 24 7
Impairment of
goodwill (5) 22 - - - 22 -
Refund of
countervailing and
anti-dumping
duties - - - - - -
Other operating
costs (income),
net (6) (7) 21 31 5 (26) 26 5
3,393 3,563 3,660 3,755 7,053 7,318
Real Estate and
Related Assets:
Costs and
operating
expenses (8) 379 482 415 553 794 1,035
Depreciation and
amortization 6 3 5 4 11 7
Selling expenses 41 37 45 43 86 80
General and
administrative
expenses 28 30 27 35 55 65
Other operating
costs (income),
net (4) (3) 4 3 - -
Impairment of
long-lived assets - - 12 3 12 3
450 549 508 641 958 1,190
Total costs and
expenses 3,843 4,112 4,168 4,396 8,011 8,508
Operating income 48 339 166 471 214 810
Interest expense
and other:
Weyerhaeuser:
Interest expense
incurred (9) (131) (128) (179) (129) (310) (257)
Less: interest
capitalized 30 16 29 20 59 36
Interest income
and other 20 19 25 15 45 34
Equity in income
(loss) of
affiliates (10) (1) 3 1 6 - 9
Real Estate and
Related Assets:
Interest expense
incurred (12) (14) (16) (14) (28) (28)
Less: interest
capitalized 12 14 16 14 28 28
Interest income
and other 3 10 1 3 4 13
Equity in income
of unconsolidated
entities 18 21 12 15 30 36
Earnings (loss) from
continuing operations
before income taxes (13) 280 55 401 42 681
Income taxes (1) (11) (3) (100) (18) (92) (21) (192)
Earnings (loss) from
continuing operations (16) 180 37 309 21 489
Earnings (loss) from
discontinued operations,
net of taxes (12) 771 (756) (5) (11) 766 (767)
Net earnings
(loss) (1) $755 $(576) $32 $298 $787 $(278)
Basic net earnings
(loss) per share:
Continuing
operations $(0.07) $0.73 $0.17 $1.24 $0.09 $1.98
Discontinued
operations 3.31 (3.07) (0.02) (0.04) 3.40 (3.11)
Net earnings
(loss) per share $3.24 $(2.34) $0.15 $1.20 $3.49 $(1.13)
Diluted net earnings
(loss) per share:
Continuing
operations $(0.07) $0.73 $0.17 1.23 $0.09 $1.97
Discontinued
operations 3.31 (3.06) (0.02) (0.04) 3.38 (3.09)
Net earnings
(loss) per share $3.24 $(2.33) $0.15 $1.19 $3.49 $(1.12)
Dividends paid
per share $0.60 $0.50 $0.60 $0.50 $1.20 $1.00
Weighted average
shares outstanding
(in thousands):
Basic 233,242 245,794 217,688 248,147 225,465 246,971
Diluted 233,242 246,970 218,743 249,194 226,711 248,082
Common and
exchangeable shares
outstanding at end
of period
(in thousands) 217,726 247,555 217,759 248,269 217,759 248,269
Q3 Q4 Year-to-date
Sept. 24, Dec. 31, Dec. 31,
2006 2006 2006
Net sales and
revenues:
Weyerhaeuser $3,805 $3,649 $15,336
Real Estate and
Related Assets 749 1,150 3,335
Total net sales
and revenues 4,554 4,799 18,671
Costs and expenses:
Weyerhaeuser:
Costs of products
sold (1) 3,038 3,007 12,182
Depreciation,
depletion and
amortization 231 252 947
Selling expenses 111 123 451
General and
administrative
expenses 214 241 895
Research and
development
expenses (2) 23 15 69
Charges (reversals)
for
restructuring (3) 4 - 21
Charges for
closure
of facilities (4) 15 50 72
Impairment of
goodwill (5) - - -
Refund of
countervailing and
anti-dumping
duties - (344) (344)
Other operating
costs (income),
net (6) (7) (36) (105) (136)
3,600 3,239 14,157
Real Estate and
Related Assets:
Costs and
operating
expenses (8) 539 764 2,338
Depreciation and
amortization 10 8 25
Selling expenses 44 56 180
General and
administrative
expenses 30 29 124
Other operating
costs (income),
net (2) (1) (3)
Impairment of
long-lived assets 14 19 36
635 875 2,700
Total costs and
expenses 4,235 4,114 16,857
Operating income 319 685 1,814
Interest expense
and other:
Weyerhaeuser:
Interest expense
incurred (9) (126) (136) (519)
Less: interest
capitalized 21 27 84
Interest income
and other 17 19 70
Equity in income
(loss) of
affiliates (10) - (2) 7
Real Estate and
Related Assets:
Interest expense
incurred (12) (15) (55)
Less: interest
capitalized 12 15 55
Interest income
and other 7 10 30
Equity in income
of unconsolidated
entities 14 8 58
Earnings (loss) from
continuing operations
before income taxes 252 611 1,544
Income taxes (1) (11) (86) (202) (480)
Earnings (loss) from
continuing operations 166 409 1,064
Earnings (loss) from
discontinued operations,
net of taxes (12) 58 98 (611)
Net earnings
(loss) (1) $224 $507 $453
Basic net earnings
(loss) per share:
Continuing
operations $0.67 $1.72 $4.35
Discontinued
operations 0.24 0.40 (2.50)
Net earnings
(loss) per share
Diluted net earnings
(loss) per share: $0.91 $2.12 $1.85
Continuing
operations $0.67 $1.72 $4.33
Discontinued
operations 0.24 0.40 (2.49)
Net earnings
(loss) per share $0.91 $2.12 $1.84
Dividends paid
per share $0.60 $0.60 $2.20
Weighted average
shares outstanding
(in thousands):
Basic 247,428 238,824 244,931
Diluted 247,900 239,525 245,780
Common and
exchangeable shares
outstanding at end
of period
(in thousands) 242,929 238,008 238,008
FOOTNOTES TO CONSOLIDATED EARNINGS
(in millions)
(1)The following adjustments were made to 2006 quarterly results to
apply a new accounting pronouncement to expense planned major
maintenance costs as incurred:
Year-to- Year-to-
date date
Q1 2006 Q2 2006 Q2 2006 Q3 2006 Q4 2006 2006
Cellulose Fibers $(5) $(10) $(15) $13 $2 $-
Fine Paper 7 (10) (3) 6 (3) -
Containerboard,
Packaging,
and Recycling 4 (5) (1) 1 - -
6 (25) (19) 20 (1) -
Income taxes (2) 9 7 (7) - -
Net earnings (loss) $4 $(16) $(12) $13 $(1) $-
(2) The third quarter of 2006 includes a $9 million charge related to the
acquisition of OrganicID, a research and development company.
(3)The second quarter of 2006 includes an $18 million charge related to
the restructuring of the Containerboard, Packaging, and Recycling
business model.
(4) See detail of closure charges by segment on page 4.
(5) The first quarter of 2007 includes a charge of $22 million for the
impairment of goodwill associated with Canadian wood products
distribution facilities.
(6) Includes net foreign exchange gains (losses), primarily from
fluctuations in Canadian and New Zealand exchange rates:
Year-to- Year-
date to-
Q1 Q1 Q2 Q2 Q2 Q2 Q3 Q4 date
2007 2006 2007 2006 2007 2006 2006 2006 2006
$7 $(26) $29 $21$36 $(5) $17 $15 $27
(7) The first and second quarters of 2007 include $34 million and $12
million, respectively, in asset impairments related to wood products
facilities. The second quarter also includes a $29 million gain on
the sale of a previously closed box plant site, a $40 million charge
for legal settlements and a contract termination, and $6 million in
additional charges related to the sale of Canadian Wood Products
distribution facilities. The third quarter of 2006 includes
$23 million of income related to a reduction of the reserve for
hardboard siding claims and charges of $7 million for the impairment
of fixed assets related to production curtailments. The fourth
quarter of 2006 includes $95 million of income related to a reversal
of the reserve for alder litigation claims.
(8)The first quarter of 2006 includes income of $8 million related to a
warranty insurance recovery.
(9) The second quarter of 2007 includes a $42 million charge related to
the early extinguishment of debt.
(10)The third quarter of 2006 includes a $2 million charge related to
the impairment of investments in equity affiliates.
(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.
(12)Discontinued operations includes the net operating results of the
operations of the fine paper business and related assets and the
North American and European composite panels operations. The first
quarter of 2007 includes a pretax gain of $682 million and related
tax benefit of $74 million and the second quarter of 2007 includes
pretax charges of $4 million related to the distribution of the fine
paper business and related assets to Weyerhaeuser shareholders. The
first and second quarters of 2006 include charges of $746 million and
$3 million, respectively, for the impairment of goodwill associated
with the fine paper business. The third quarter of 2006 includes a
pretax gain of $51 million and related tax expense of $18 million
associated with the sale of the North American composite panels
operations and an $8 million charge to write off additional goodwill
associated with the coastal British Columbia operations. The fourth
quarter of 2006 includes a pretax gain of $45 million and related tax
expense of $4 million associated with the sale of the Irish composite
panels operations.
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
Net sales and revenues
(in millions): (1)(2) Q1 Q2 Year-to-date
April 1, March 26, July 1, June 25, July 1, June 25,
2007 2006 2007 2006 2007 2006
Timberlands:
Logs $170 $201 $172 $198 $342 $399
Other products 63 62 39 71 102 133
233 263 211 269 444 532
Wood Products:
Softwood lumber 574 782 647 857 1,221 1,639
Plywood 100 135 106 147 206 282
Veneer 9 13 14 13 23 26
Composite panels 24 121 24 140 48 261
Oriented strand board 152 287 153 273 305 560
Hardwood lumber 90 99 99 105 189 204
Engineered I-Joists 117 169 147 202 264 371
Engineered solid
section 155 204 185 231 340 435
Logs 6 7 4 5 10 12
Other products 243 256 283 327 526 583
1,470 2,073 1,662 2,300 3,132 4,373
Cellulose Fibers:
Pulp 405 394 370 402 775 796
Liquid packaging
board 56 46 72 62 128 108
Other products 21 13 28 16 49 29
482 453 470 480 952 933
Fine Paper: (2)
Paper 432 613 - 601 432 1,214
Coated groundwood 26 40 - 44 26 84
Other products 1 1 - 1 1 2
459 654 - 646 459 1,300
Containerboard,
Packaging and
Recycling:
Containerboard 119 82 109 84 228 166
Packaging 951 911 1,043 1,002 1,994 1,913
Recycling 94 80 103 85 197 165
Bags 23 20 23 20 46 40
Other products 39 34 49 46 88 80
1,226 1,127 1,327 1,237 2,553 2,364
Real Estate and
Related Assets 487 690 559 746 1,046 1,436
-
Corporate and Other 97 116 105 117 202 233
Less: sales of
discontinued
operations (563) (925) - (928) (563) (1,853)
$3,891 $4,451 $4,334 $4,867 $8,225 $9,318
(1) The fourth quarter of 2006 includes 14 weeks of operations compared
to 13 weeks in all other quarters.
(2) First quarter 2007 results include 9 weeks of operations for the fine
paper business and related assets, prior to the distribution of these
assets to Weyerhaeuser shareholders.
Contribution (charge) to pre-tax earnings:
(in millions)
Q1 Q2 Year-to-date
April 1, March 26, July 1, June 25, July 1, June 25,
2007 2006 2007 2006 2007 2006
Timberlands (1)(2) $175 $198 $142 $224 $317 $422
Wood
Products (1)(2)(5) (167) 117 (123) 131 (290) 248
Cellulose
Fibers(1)(2)4) 22 (5) 48 23 70 18
Fine Paper(1)(2)(4)(6) 20 (756) - (20) 20 (776)
Containerboard,
Packaging and
Recycling(1)(2)(4)(7) 67 26 112 69 179 95
Real Estate and
Related Assets(2)(8) 58 172 64 123 122 295
Corporate and
Other(1)(2)(3)(9) 633 (102) (44) (40) 589 (142)
$808 $(350) $199 $510 $1,007 $160
Net sales and revenues
(in millions): (1)(2) Q3 Q4 Year-to-date
Sept. 24, Dec. 31, Dec. 31,
2006 2006 2006
Timberlands:
Logs $200 $182 $781
Other products 46 56 235
246 238 1,016
Wood Products:
Softwood lumber 733 625 2,997
Plywood 134 113 529
Veneer 9 7 42
Composite panels 71 25 357
Oriented strand board 203 176 939
Hardwood lumber 96 98 398
Engineered I-Joists 162 137 670
Engineered solid
section 190 169 794
Logs 5 6 23
Other products 302 268 1,153
1,905 1,624 7,902
Cellulose Fibers:
Pulp 404 457 1,657
Liquid packaging
board 59 62 229
Other products 19 22 70
482 541 1,956
Fine Paper: (2)
Paper 604 652 2,470
Coated groundwood 42 45 171
Other products 2 - 4
648 697 2,645
Containerboard,
Packaging and
Recycling:
Containerboard 92 119 377
Packaging 997 1,021 3,931
Recycling 89 91 345
Bags 23 25 88
Other products 44 47 171
1,245 1,303 4,912
Real Estate and
Related Assets 749 1,150 3,335
Corporate and Other 123 128 484
Less: sales of
discontinued
operations (844) (882) (3,579)
$4,554 $4,799 $18,671
(1) The fourth quarter of 2006 includes 14 weeks of operations compared
to 13 weeks in all other quarters.
(2) First quarter 2007 results include 9 weeks of operations for the fine
paper business and related assets, prior to the distribution of these
assets to Weyerhaeuser shareholders.
Contribution (charge) to pre-tax earnings:
(in millions)
Q3 Q4 Year-to-date
Sept. 24, Dec. 31, Dec. 31,
2006 2006 2006
Timberlands (1)(2) $178 $167 $767
Wood
Products (1)(2)(5) 11 205 464
Cellulose
Fibers(1)(2)4) 66 58 142
Fine Paper(1)(2)(4)(6) 68 61 (647)
Containerboard,
Packaging and
Recycling(1)(2)(4)(7) 97 71 263
Real Estate and
Related Assets(2)(8) 135 293 723
Corporate and
Other(1)(2)(3)(9) (78) (3) (223)
$477 $852 $1,489
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
FOOTNOTES TO CONTRIBUTION (CHARGE) TO PRE-TAX EARNINGS
(in millions)
(1) Closure charges Year-to-date
by segment: Q1 2007 Q1 2006 Q2 2007 Q2 2006 Q2 2007 Q2 2006
Timberlands $- $- $- $- $- $-
Wood Products 3 - 15 1 18 1
Cellulose Fibers - (1) - - - (1)
Fine Paper 2 - - 11 2 11
Containerboard,
Packaging and
Recycling 2 2 3 5 5 7
Corporate and
Other - - 1 - 1 -
$7 $1 $19 $17 $26 $18
Closure charges Year-to-date
by segment: Q3 2006 Q4 2006 2006
Timberlands $- $1 $1
Wood Products 10 48 59
Cellulose Fibers 1 (3) (3)
Fine Paper 3 1 15
Containerboard,
Packaging and
Recycling 3 4 14
Corporate and
Other 26 - 26
$43 $51 $112
The above closure charges include costs incurred within the company's
discontinued operations.
(2) Share-based compensation charges (income)
recognized by Year-to-date
segment: Q1 2007 Q1 2006 Q2 2007 Q2 2006 Q2 2007 Q2 2006
Timberlands $1 $1 $- $- $1 $1
Wood Products 2 2 2 - 4 2
Cellulose Fibers 2 1 - - 2 1
Fine Paper - - - - - -
Containerboard,
Packaging and
Recycling 1 2 2 (1) 3 1
Real Estate and
Related Assets 2 - 1 2 3 2
Corporate and
Other 14 15 5 (5) 19 10
$22 $21 $10 $(4) $32 $17
Share-based compensation charges (income)
recognized by Year-to-date
segment: Q3 2006 Q4 2006 2006
Timberlands $- $- $1
Wood Products - 1 3
Cellulose Fibers - 1 2
Fine Paper 1 - 1
Containerboard,
Packaging and
Recycling 1 - 2
Real Estate and
Related Assets - - 2
Corporate and
Other 1 7 18
$3 $9 $29
(3) Net foreign exchange gains (losses) included in
Corporate and Year-to-date
Other: Q1 2007 Q1 2006 Q2 2007 Q2 2006 Q2 2007 Q2 2006
$7 $(26) $34 $20 $41 $(6)
Net foreign exchange gains (losses) included in
Corporate and Year-to-date
Other: Q3 2006 Q4 2006 2006
$17 $14 $25
(4) See detail of quarterly adjustments made to apply a new accounting
pronouncement to expense planned major maintenance costs as incurred
on page 2.
(5) Additional Wood Products notes:
(a) The first quarter of 2007 includes charges of $22 million for the
impairment of goodwill associated with Canadian distribution
facilities and $34 million in asset impairments related to wood
products facilities.
(b) The second quarter of 2007 includes a charge of $17 million for
the expected settlement of litigation
(c) The second quarter of 2007 includes charges of $12 million in
asset impairments related to wood products facilities and $6
million in additional charges related to the sale of Canadian
distribution facilities.
(d) The third quarter of 2006 includes $23 million of income related
to a reduction of the reserves for hardboard siding claims.
(e) The third quarter of 2006 includes a $51 million gain on the sale
of the company's North American composite panels operations.
(f) The third quarter of 2006 includes charges of $7 million for the
impairment of fixed assets related to production curtailments.
(g) The fourth quarter of 2006 includes $344 million of income from
the refund of countervailing and anti-dumping duties.
(h) The fourth quarter of 2006 includes $95 million of income related
to a reversal of the reserves for alder litigation claims.
(6) Additional Fine Paper notes:
(a) The first and second quarters of 2006 include charges of $746
million and $3 million, respectively, for the impairment of
goodwill associated with the fine paper business.
(7) Additional Containerboard, Packaging and Recycling notes:
(a) The second quarter of 2007 includes a $29 million gain on the
sale of a previously closed box plant site in California and
$3 million in charges related to a fire at the Closter, NJ box
plant.
(b) The second and third quarters of 2006 include charges of
$18 million and $3 million, respectively, related to the
restructuring of the Containerboard, Packaging and Recycling
business model.
(8) Additional Real Estate and Related Assets notes:
(a) The first and second quarters of 2007 includes net gains (losses)
on land and lot sales of $3 million and ($1) million,
respectively. The first, second, third and fourth quarters of
2006 include net gains (losses) on land and lot sales of
$33 million, ($1) million, $0, and $110 million, respectively, or
$142 million year-to-date.
(b) The second quarter of 2007 includes a gain of $42 million on the
sale of an apartment project. The fourth quarter of 2006 includes
a $28 million gain on the sale of an apartment building.
(c) The second quarter of 2007 includes charges for the impairment of
assets of $12 million. The second, third, and fourth quarters of
2006 include charges for the impairment of assets of $3 million,
$14 million, and $19 million, respectively, or $36 million
year-to-date.
(d) 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.
(9) Additional Corporate and Other notes:
(a) The first quarter of 2007 includes a $682 million pretax gain and
the second quarter includes charges of $4 million related to the
distribution of the fine paper business and related assets to
Weyerhaeuser shareholders.
(b) The second quarter of 2007 includes a $23 million charge for
legal settlements and a contract termination.
(c) The third quarter of 2006 includes an $8 million charge to write
off additional goodwill associated with the coastal British
Columbia operations.
(d) The third quarter of 2006 includes a $9 million charge related to
the acquisition of OrganicID, a research and development company.
(e) The fourth quarter of 2006 includes a $45 million pretax gain on
the sale of the company's Irish composite panels operations.
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
Third party
sales volumes: (1)(2) Q1 Q2 Year-to-date
April 1, March 26, July 1, June 25, July 1, June 25,
2007 2006 2007 2006 2007 2006
Timberlands
(thousands):
Logs - cunits 750 935 762 808 1,512 1,743
Wood Products
(millions):
Softwood lumber
- board feet 1,657 1,921 1,805 2,113 3,462 4,034
Plywood- square
feet (3/8") 310 389 305 458 615 847
Veneer - square
feet (3/8") 57 61 82 63 139 124
Composite panels -
square feet (3/4") 36 302 35 324 71 626
Oriented strand
board - square
feet (3/8") 942 1,000 899 1,069 1,841 2,069
Hardwood lumber -
board feet 89 103 99 110 188 213
Engineered I-Joists
- lineal feet 82 114 108 137 190 251
Engineered solid
section -
cubic feet 7 9 10 11 17 20
Logs - cunits
(in thousands) 46 55 33 46 79 101
Cellulose Fibers
(thousands):
Pulp - air-dry
metric tons 594 651 524 647 1,118 1,298
Liquid packaging
board- tons 67 56 82 71 149 127
Fine Paper
(thousands): (2)
Paper - tons 461 753 - 662 461 1,415
Coated groundwood
- tons 38 52 - 59 38 111
Paper converting
- tons 318 511 - 474 318 985
Containerboard,
Packaging and
Recycling
(thousands):
Containerboard -
tons 259 211 230 189 489 400
Packaging - MSF 17,754 18,342 18,965 19,168 36,719 37,510
Recycling - tons 654 733 656 719 1,310 1,452
Kraft bags and
sacks - tons 25 20 23 20 48 40
Real Estate and
Related Assets:
Single-family
homes sold 1,684 1,472 1,139 1,325 2,823 2,797
Single-family
homes closed 976 1,161 1,062 1,483 2,038 2,644
Single-family
homes sold but
not closed at
end of period 2,207 3,105 2,284 2,947 2,284 2,947
Third party
sales volumes: (1)(2) Q3 Q4 Year-to-date
Sept. 24, Dec. 31, Dec. 31,
2006 2006 2006
Timberlands
(thousands):
Logs - cunits 850 843 3,436
Wood Products
(millions):
Softwood lumber -
board feet 1,974 1,863 7,871
Plywood- square
feet (3/8") 437 379 1,663
Veneer - square
feet (3/8") 48 43 215
Composite panels -
square feet (3/4") 139 37 802
Oriented strand
board - square
feet (3/8") 989 1,038 4,096
Hardwood lumber -
board feet 100 99 412
Engineered I-Joists
- lineal feet 110 95 456
Engineered solid
section -
cubic feet 9 7 36
Logs - cunits
(in thousands) 26 42 169
Cellulose Fibers
(thousands):
Pulp - air-dry
metric tons 625 698 2,621
Liquid packaging
board- tons 72 76 275
Fine Paper
(thousands): (2)
Paper - tons 641 693 2,749
Coated groundwood
- tons 59 64 234
Paper converting
- tons 462 485 1,932
Containerboard,
Packaging and
Recycling
(thousands):
Containerboard -
tons 202 254 856
Packaging - MSF 18,425 18,932 74,867
Recycling - tons 678 745 2,875
Kraft bags and
sacks - tons 22 27 89
Real Estate and
Related Assets:
Single-family
homes sold 906 838 4,541
Single-family
homes closed 1,439 1,753 5,836
Single-family homes
sold but not
closed at end
of period 2,414 1,499 1,499
(1) The fourth quarter of 2006 includes 14 weeks of operations compared
to 13 weeks in all other quarters.
(2) First quarter 2007 results include 9 weeks of operations for fine
paper and related assets, prior to the distribution of these assets
to Weyerhaeuser shareholders.
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION
Total production
volumes: (1)(2) Q1 Q2 Year-to-date
April 1, March 26, July 1, June 25, July 1, June 25,
2007 2006 2007 2006 2007 2006
Timberlands
(thousands):
Fee depletion
- cunits 2,140 2,132 2,038 2,083 4,178 4,215
Wood Products
(millions):
Softwood lumber -
board feet 1,427 1,663 1,451 1,650 2,878 3,313
Plywood - square
feet (3/8") 114 241 115 245 229 486
Veneer - square
feet (3/8") (3) 298 455 338 455 636 910
Composite panels -
square feet (3/4") - 278 - 288 - 566
Oriented strand
board - square
feet (3/8") 968 1,073 847 1,062 1,815 2,135
Hardwood lumber -
board feet 73 82 75 83 148 165
Engineered I-Joists
- lineal feet
87 121 114 136 201 257
Engineered solid
section - cubic feet 6 11 9 12 15 23
Cellulose Fibers
(thousands):
Pulp - air-dry
metric tons 539 676 419 588 958 1,264
Liquid packaging
board- tons 60 61 77 75 137 136
Fine Paper
(thousands): (2)
Paper - tons (4) 444 724 - 672 444 1,396
Coated groundwood
- tons 43 56 - 56 43 112
Paper converting
- tons 318 498 - 461 318 959
Containerboard,
Packaging and
Recycling
(thousands):
Containerboard
- tons (5) 1,515 1,575 1,506 1,533 3,021 3,108
Packaging - MSF 19,007 19,550 19,721 20,290 38,728 39,840
Recycling -
tons (6) 1,619 1,716 1,589 1,684 3,208 3,400
Kraft bags and
sacks - tons 23 19 23 20 46 39
Total production
volumes: (1)(2) Q3 Q4 Year-to-date
Sept. 24, Dec. 31, Dec. 31,
2006 2006 2006
Timberlands
(thousands):
Fee depletion
- cunits 2,040 2,195 8,450
Wood Products
(millions):
Softwood lumber -
board feet 1,559 1,483 6,355
Plywood - square
feet (3/8") 237 177 900
Veneer - square
feet (3/8") (3) 494 335 1,739
Composite panels -
square feet (3/4") 100 - 666
Oriented strand
board - square
feet (3/8") 1,009 1,022 4,166
Hardwood lumber -
board feet 82 77 324
Engineered I-Joists
- lineal feet
130 86 473
Engineered solid
section - cubic feet 10 8 41
Cellulose Fibers
(thousands):
Pulp - air-dry
metric tons 660 664 2,588
Liquid packaging
board- tons 73 73 282
Fine Paper
(thousands): (2)
Paper - tons (4) 675 725 2,796
Coated groundwood -
tons 59 59 230
Paper converting -
tons 485 487 1,931
Containerboard,
Packaging and
Recycling
(thousands):
Containerboard -
tons (5) 1,544 1,608 6,260
Packaging - MSF 19,341 20,670 79,851
Recycling -
tons (6) 1,641 1,788 6,829
Kraft bags and
sacks - tons 18 25 82
(1)The fourth quarter of 2006 includes 14 weeks of operations compared
to 13 weeks in all other quarters.
(2)First quarter 2007 results include 9 weeks of operations for fine
paper and related assets, prior to the distribution of these assets
to Weyerhaeuser shareholders.
(3)Veneer production represents lathe production and includes volumes
that are further processed into plywood and engineered lumber
products by company mills.
(4)Paper production includes unprocessed rolls and converted paper
volumes.
(5)Containerboard production represents machine production and includes
volumes that are further processed into packaging and kraft bags and
sacks by company facilities.
(6)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 SHEETS (unaudited)
(in millions)
April 1, July 1, Dec. 31,
Assets 2007 2007 2006
Weyerhaeuser
Current assets:
Cash and cash equivalents $1,172 $208 $223
Receivables, less
allowances 1,394 1,508 1,183
Inventories 1,437 1,308 1,355
Prepaid expenses 356 378 385
Assets held for sale 114 - 105
Current assets of
discontinued operations - - 870
Total current assets 4,473 3,402 4,121
Property and equipment 6,850 6,775 7,061
Construction in progress 467 544 395
Timber and timberlands
at cost, less fee stumpage
charged to disposals 3,705 3,721 3,681
Investments in and advances
to equity affiliates 498 510 499
Goodwill 2,158 2,181 2,185
Deferred pension and
other assets 1,378 1,470 1,368
Restricted assets held by
special purpose entities 915 916 917
Noncurrent assets of
discontinued operations - - 3,011
20,444 19,519 23,238
Real Estate and Related Assets
Cash and cash equivalents 13 7 20
Receivables, less allowances 77 75 144
Real estate in process of
development and for sale
1,540 1,561 1,449
Land being processed for
development 1,427 1,476 1,365
Investments in unconsolidated
entities, less reserves 81 83 72
Other assets 396 383 423
Consolidated assets not owned 264 287 151
3,798 3,872 3,624
Total assets $24,242 $23,391 $26,862
Liabilities and Shareholders'
Interest
Weyerhaeuser
Current liabilities:
Notes payable and
commercial paper $163 $92 $72
Current maturities of
long-term debt 70 63 488
Accounts payable 920 1,010 948
Accrued liabilities 1,220 1,145 1,363
Current liabilities of
discontinued operations - - 258
Total current liabilities 2,373 2,310 3,129
Long-term debt 6,849 5,980 7,069
Deferred income taxes 2,897 2,906 3,011
Deferred pension, other
postretirement benefits
and other liabilities 1,691 1,775 1,759
Liabilities (nonrecourse
to Weyerhaeuser) held by
special purpose entities 763 765 765
Noncurrent liabilities of
discontinued operations - - 717
14,573 13,736 16,450
Real Estate and Related Assets
Notes payable and
commercial paper 427 412 -
Long-term debt 605 605 606
Other liabilities 565 539 606
Consolidated liabilities
not owned 232 246 115
1,829 1,802 1,327
Total liabilities 16,402 15,538 17,777
Shareholders' interest 7,840 7,853 9,085
Total liabilities and
shareholders' interest $24,242 $23,391 $26,862
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION
STATEMENT OF CASH
FLOWS Q1 Q2 Year-to-date
SELECTED April 1, March 26, July 1, June 25, July 1, June 25,
INFORMATION 2007 2006 2007 2006 2007 2006
(unaudited)
(in millions)
(Weyerhaeuser only,
excludes Real Estate
& Related Assets)
Net cash from
operations $180 $(324) $227 $292 $407 $(32)
Cash paid for
property and
equipment $(114) $(182) $(140) $(184) $(254) $(366)
Cash paid for
timberlands
reforestation $(12) $(12) $(12) $(9) $(24) $(21)
Cash received from
issuances of debt $- $- $- $- $- $-
Revolving credit
facilities, notes
and commercial paper
borrowings, net $10 $(68) $22 $19 $32 $(49)
Payments on debt $(638) $(158) $(918) $(10) $(1,556) $(168)
Proceeds from the
sale of
operations $1,350 $- $- $- $1,350 $-
Repurchases of
common stock $- $- $(22) $- $(22) $-
STATEMENT OF CASH
FLOWS Q3 Q4 Year-to-date
SELECTED Sept. 24, Dec. 31, Dec. 31,
INFORMATION 2006 2006 2006
(unaudited)
(in millions)
(Weyerhaeuser only,
excludes Real Estate
& Related Assets)
Net cash from
operations $373 $887 $1,228
Cash paid for
property and
equipment $(173) $(273) $(812)
Cash paid for
timberlands
reforestation $(6) $(10) $(37)
Cash received from
issuances of debt $3 $1 $4
Revolving credit
facilities, notes
and commercial paper
borrowings, net $195 $(95) $51
Payments on debt $(58) $(5) $(231)
Proceeds from the
sale of
operations $187 $86 $273
Repurchases of
common stock $(332) $(340) $(672)
First Call Analyst:
FCMN Contact:
http://www.newscom.com/cgi-bin/prnh/20040116/WYLOGO-b
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com
SOURCE: Weyerhaeuser Company
CONTACT: Bruce Amundson, +1-253-924-3047, or Analysts, Kathryn McAuley,
+1-253-924-2058, both of Weyerhaeuser Company
Web site: http://www.weyerhaeuser.com/