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Weyerhaeuser Reports 3rd Quarter Net Earnings of $101 Million, or 47 Cents per Diluted Share, on Sales of $4.1 Billion
PRNewswire-FirstCall
FEDERAL WAY, Wash.
Oct 31, 2007
Weyerhaeuser Company (NYSE: WY) today reported net earnings of $101 million for the third quarter of 2007, or 47 cents per diluted share, on sales of $4.1 billion.
(Logo: http://www.newscom.com/cgi-bin/prnh/20040116/WYLOGO-a) (Logo: http://www.newscom.com/cgi-bin/prnh/20040116/WYLOGO-b) Third quarter 2007 earnings include the following after-tax items: * A charge of $17 million, or 8 cents per diluted share, for closures, restructuring and asset impairments in our Wood Products segment. * A charge of $17 million, or 8 cents per diluted share related to the restructuring of administrative functions, including a Canadian regional office, and one-time costs to transition to a new information technology provider. * A charge of $16 million, or 7 cents per diluted share, for the impairment of real estate assets; * A net gain of $26 million, or 12 cents per diluted share, related to legal settlements. * A gain of $7 million, or 3 cents per diluted share, on the sale of operations and previously closed plant sites.
Excluding these items, the company earned $118 million, or 55 cents per diluted share, in the third quarter of 2007.
Third 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 the new accounting pronouncement to expense planned major maintenance costs as incurred.
For third quarter 2006, Weyerhaeuser net earnings were $224 million, or 91 cents per diluted share, on net sales of $4.6 billion. Third quarter 2006 earnings include the following after-tax items:
* A gain of $31 million, or 13 cents per diluted share, from the sale of
the North American composites business.
* A gain of $15 million, or 6 cents per diluted share, due to a reduction
of the reserve for hardboard siding claims.
* A charge of $25 million, or 10 cents per diluted share, for the
additional impairment of assets related to the closure of the Prince
Albert, Saskatchewan facility and the write-off of additional goodwill
associated with the former BC Coastal business.
* A charge of $18 million, or 7 cents per diluted share, for asset
impairments and costs associated with facility closures or
curtailments, primarily in the Wood Products segment.
* A charge of $9 million, or 4 cents per diluted share, for impairment of
real estate assets.
* A charge of $6 million, or 2 cents per diluted share, related to the
previously announced acquisition of OrganicID, a research and
development company.
Excluding these items, the company earned $236 million, or 95 cents per diluted share, in the third quarter of 2006.
SUMMARY OF THIRD QUARTER BUSINESS PERFORMANCE
* Timberlands - The continued weakness in the wood products markets
resulted in lower log prices, but sales of non-strategic timberlands
increased.
* Wood Products - Demand for wood products continued to weaken.
* Cellulose Fibers - Prices continued to increase and productivity
improved.
* Containerboard Packaging and Recycling - Mill productivity improvements
and decreased annual scheduled maintenance downtime were partially
offset by seasonally-lower packaging shipments and higher costs for old
corrugated containers (OCC).
* Real Estate and Related Assets - Housing markets continued to decline.
Single-family closings increased seasonally and margins improved due to
mix.
"An already weak wood products market deteriorated further during the third quarter," said Steven R. Rogel, chairman, president and chief executive officer. "We were adjusting our production to meet our reduced order level, but we took additional action in the quarter as demand and prices slid. We will continually adjust our operating posture as necessary to balance production with demand.
"Meanwhile, the work we've done to operate more efficiently resulted in improved mill productivity in our Cellulose Fibers and Containerboard Packaging businesses. We expect improved price realizations in both businesses in the fourth quarter."
SUMMARY OF THIRD QUARTER FINANCIAL HIGHLIGHTS
Millions (except per
share data) 3Q 2007 3Q 2006 Change
Net earnings $101 $224 ($123)
Earnings per diluted share $0.47 $0.91 ($0.44)
Net sales $4,146 $4,554 ($408)
SEGMENT RESULTS FOR THIRD QUARTER
(Contributions to Pre-Tax
Earnings)
Millions 3Q 2007 3Q 2006 Change
Timberlands $165 $178 ($13)
Wood Products ($131) $11 ($142)
Cellulose Fibers $79 $66 $13
Fine Paper $0 $68 ($68)
Containerboard, Packaging and
Recycling $104 $97 $7
Real Estate and Related Assets $60 $135 ($75)
Timberlands
3Q 2007 2Q 2007 Change
Contribution to pre-tax
earnings (millions) $165 142 $23
3Q 2007 Performance - Export and domestic log prices declined in the West while log prices in the South were relatively unchanged. Total fee harvest declined slightly, but third party log sales volumes increased as fewer logs were consumed by company mills. Higher sales of non-strategic timberlands in the third quarter offset the effect of declining log prices.
4Q 2007 Outlook - Weyerhaeuser expects Timberlands earnings to be lower in the fourth quarter compared with third quarter due to expectations that:
* The continued weakness in housing markets will result in lower prices
in both the export and domestic markets, and lower log sales volumes in
the West.
* The company will complete fewer non-strategic timberlands transactions
in the fourth quarter.
Wood Products
3Q 2007 2Q 2007 Change
Contribution to pre-tax
earnings (loss) (millions) ($131) ($123) ($8)
3Q 2007 Performance - Excluding the pre-tax items noted below, the segment's net loss increased $36 million from the second quarter, reflecting continued difficult market conditions.
Third quarter 2007 includes:
* Charges of $25 million for facility closures, asset impairments and
restructuring costs,
* A charge of $4 million for the settlement of alder litigation, and
* A gain of $7 million on the sale of a veneer facility and a previously
closed customer service center site.
Second quarter 2007 includes:
* Charges of $33 million for asset impairments, facility closures and the
sale of the Canadian distribution business, and
* A charge of $17 million for the settlement of alder litigation.
Declining housing starts continued to affect segment results. Average realized prices for plywood and oriented strand board increased slightly from the second quarter, but were offset by decreased lumber prices. Sales volumes declined for each of the segment's building products. The strengthening Canadian dollar unfavorably affected the earnings contribution from products manufactured in Canada.
4Q 2007 Outlook - The company expects the segment's operating loss to increase in fourth quarter compared with the third quarter due to the traditional seasonal slowdown and continuing pressures on volumes and prices.
On Oct. 18, the company announced indefinite curtailments at three mills and expects to continue actively adjusting operating posture to balance production with demand.
CELLULOSE FIBERS
3Q 2007 2Q 2007 Change
Contribution to pre-tax earnings
(millions) $79 $48 $31
3Q 2007 Performance - Market conditions continued to improve and pulp prices increased. Pulp shipment volumes declined in the third quarter, primarily due to changes in the brokerage relationship associated with the transition of mills to Domtar. Mill productivity improved while costs declined due to less downtime for annual maintenance.
4Q 2007 Outlook - Weyerhaeuser expects favorable market conditions to continue, resulting in slightly higher earnings from the segment in fourth quarter.
CONTAINERBOARD, PACKAGING AND RECYCLING
3Q 2007 2Q 2007 Change
Contribution to pre-tax earnings
(millions) $104 $112 ($8)
3Q 2007 Performance - Excluding the pre-tax items noted below, the segment's earnings increased $13 million from second quarter.
Third quarter 2007 includes:
* A gain of $3 million on the sale of a previously closed box plant site.
Second quarter 2007 included:
* A gain of $29 million on the sale of a previously closed box plant site
in California.
* Charges of $5 million related to a fire and subsequent closure of a box
plant.
Productivity improved and annual scheduled maintenance downtime decreased at the containerboard mills. OCC costs increased. Energy costs were seasonally lower. Average packaging price realizations decreased mainly due to product mix. Converting cost reductions partially offset decreased packaging price realizations and seasonally lower shipments.
4Q 2007 Outlook - Weyerhaeuser expects fourth quarter earnings for the segment to be comparable to third quarter due to expectations that:
* Packaging and containerboard price realizations will improve.
* OCC costs will moderate.
* Additional scheduled maintenance downtime and higher seasonal energy
costs will offset the improved price realizations.
REAL ESTATE AND RELATED ASSETS
3Q 2007 2Q 2007 Change
Contribution to pre-tax earnings
(millions) $60 $64 ($4)
3Q 2007 Performance - Excluding the pre-tax items noted below, the segment's earnings increased $19 million from second quarter.
Third quarter 2007 includes: * Gains of $30 million from land sales. * Asset impairment charges of $23 million. Second quarter 2007 includes: * A gain of $42 million on the sale of an apartment project. * Asset impairment charges of $12 million.
Single-family home closings increased compared with the second quarter. Average closing prices continued to decline. Margins increased due to mix. The backlog of homes sold, but not closed, declined to approximately four and one-half months.
4Q 2007 Outlook - Weyerhaeuser expects earnings from single-family home closings to be significantly lower than the third quarter due to declining market conditions. Land sales not yet under contract that may close in fourth quarter could offset some of this decline.
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 Oct. 31 to discuss third quarter results.
To access the conference call from within North America, dial 1-800-218-4007 at least 15 minutes prior to the call. Those calling from outside North America should dial 1-303-262-2075. Replays will be available for one week at 1-800-405-2236 (access code - 11098530#) from within North America and at 1-303-590-3000 (access code - 11098530#) from outside North America.
The call is being webcast through Weyerhaeuser's Internet site at http://investor.weyerhaeuser.com/ by clicking on the "Q3 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 fourth quarter 2007 regarding the company's markets, earnings and performance of the company's business segments, price realizations, demand, sales volumes and pricing for the company's products, land sales, product mix, OCC and fiber costs, higher seasonal energy costs, operating postures and scheduled annual maintenance downtime, 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 Q3
(in millions) April 1, March 26, July 1, June 25, Sept. 30, Sept. 24,
2007 2006 2007 2006 2007 2006
Net sales and
revenues:
Weyerhaeuser $3,404 $3,761 $3,775 $4,121 $3,548 $3,805
Real Estate
and Related
Assets 487 690 559 746 598 749
Total net sales
and revenues 3,891 4,451 4,334 4,867 4,146 4,554
Costs and expenses:
Weyerhaeuser:
Costs of
products
sold (1) 2,785 2,947 3,085 3,190 2,845 3,038
Depreciation,
depletion and
amortization 232 233 223 231 230 231
Selling expenses 109 100 109 117 102 111
General and
administrative
expenses 200 235 199 205 184 214
Research and
development
expenses (2) 16 16 18 15 18 23
Charges
(reversals) for
restructuring (3) 3 (1) 2 18 16 4
Charges for
closure of
facilities (4) 5 2 19 5 19 15
Impairment of
goodwill (5) 22 - - - 1 -
Refund of
countervailing
and anti-dumping
duties - - - - - -
Other operating
costs (income),
net (6) (7) 21 31 5 (26) 1 (36)
3,393 3,563 3,660 3,755 3,416 3,600
Real Estate and
Related Assets:
Costs and
operating
expenses (8) 379 482 415 553 451 539
Depreciation and
amortization 6 3 5 4 6 10
Selling expenses 41 37 45 43 45 44
General and
administrative
expenses 28 30 27 35 26 30
Other operating
costs (income),
net (4) (3) 4 3 (4) (2)
Impairment of
long-lived
assets - - 12 3 23 14
450 549 508 641 547 635
Total costs and
expenses 3,843 4,112 4,168 4,396 3,963 4,235
Operating income 48 339 166 471 183 319
Interest expense and
other:
Weyerhaeuser:
Interest expense
incurred (9) (131) (128) (179) (129) (131) (126)
Less: interest
capitalized 30 16 29 20 29 21
Interest income
and other 20 19 25 15 20 17
Equity in income
(loss) of
affiliates (10) (1) 3 1 6 5 -
Real Estate and
Related Assets:
Interest expense
incurred (12) (14) (16) (14) (16) (12)
Less: interest
capitalized 12 14 16 14 16 12
Interest income
and other 3 10 1 3 1 7
Equity in income
of unconsolidated
entities 18 21 12 15 8 14
Earnings (loss) from
continuing
operations before
income taxes (13) 280 55 401 115 252
Income taxes (1)(11) (3) (100) (18) (92) (41) (86)
Earnings (loss) from
continuing
operations (16) 180 37 309 74 166
Earnings (loss) from
discontinued
operations, net of
taxes (12) 771 (756) (5) (11) 27 58
Net earnings (loss)
(1) $755 $(576) $32 $298 $101 $224
Basic net earnings
(loss) per share:
Continuing
operations $(0.07) $0.73 $0.17 $1.24 $0.34 $0.67
Discontinued
operations 3.31 (3.07) (0.02) (0.04) 0.13 0.24
Net earnings
(loss) per share $3.24 $(2.34) $0.15 $1.20 $0.47 $0.91
Diluted net earnings
(loss) per share:
Continuing
operations $(0.07) $0.73 $0.17 1.23 $0.34 $0.67
Discontinued
operations 3.31 (3.06) (0.02) (0.04) 0.13 0.24
Net earnings
(loss) per share $3.24 $(2.33) $0.15 $1.19 $0.47 $0.91
Dividends paid per
share $0.60 $0.50 $0.60 $0.50 $0.60 $0.60
Weighted average
shares outstanding
(in thousands):
Basic 233,242 245,794 217,688 248,147 215,154 247,428
Diluted 233,242 246,970 218,743 249,194 215,828 247,900
Common and
exchangeable shares
outstanding at end
of period (in
thousands) 217,726 247,555 217,759 248,269 211,106 242,929
Year-to-
CONSOLIDATED EARNINGS Year-to-date Q4 date
(in millions) Sept. 30, Sept. 24, Dec. 31, Dec. 31,
2007 2006 2006 2006
Net sales and revenues:
Weyerhaeuser $10,727 $11,687 $3,649 $15,336
Real Estate and Related Assets 1,644 2,185 1,150 3,335
Total net sales and revenues 12,371 13,872 4,799 18,671
Costs and expenses:
Weyerhaeuser:
Costs of products sold (1) 8,715 9,175 3,007 12,182
Depreciation, depletion and
amortization 685 695 252 947
Selling expenses 320 328 123 451
General and administrative
expenses 583 654 241 895
Research and development
expenses (2) 52 54 15 69
Charges (reversals) for
restructuring (3) 21 21 - 21
Charges for closure of
facilities (4) 43 22 50 72
Impairment of goodwill (5) 23 - - -
Refund of countervailing and
anti-dumping duties - - (344) (344)
Other operating costs (income),
net (6) (7) 27 (31) (105) (136)
10,469 10,918 3,239 14,157
Real Estate and Related Assets:
Costs and operating
expenses (8) 1,245 1,574 764 2,338
Depreciation and amortization 17 17 8 25
Selling expenses 131 124 56 180
General and administrative
expenses 81 95 29 124
Other operating costs (income),
net (4) (2) (1) (3)
Impairment of long-lived assets 35 17 19 36
1,505 1,825 875 2,700
Total costs and expenses 11,974 12,743 4,114 16,857
Operating income 397 1,129 685 1,814
Interest expense and other:
Weyerhaeuser:
Interest expense incurred (9) (441) (383) (136) (519)
Less: interest capitalized 88 57 27 84
Interest income and other 65 51 19 70
Equity in income (loss) of
affiliates (10) 5 9 (2) 7
Real Estate and Related Assets:
Interest expense incurred (44) (40) (15) (55)
Less: interest capitalized 44 40 15 55
Interest income and other 5 20 10 30
Equity in income of
unconsolidated entities 38 50 8 58
Earnings (loss) from continuing
operations before income taxes 157 933 611 1,544
Income taxes (1) (11) (62) (278) (202) (480)
Earnings (loss) from continuing
operations 95 655 409 1,064
Earnings (loss) from discontinued
operations, net of taxes (12) 793 (709) 98 (611)
Net earnings (loss) (1) $888 $(54) $507 $453
Basic net earnings (loss)
per share:
Continuing operations $0.43 $2.65 $1.72 $4.35
Discontinued operations 3.57 (2.87) 0.40 (2.50)
Net earnings (loss) per share $4.00 $(0.22) $2.12 $1.85
Diluted net earnings (loss)
per share:
Continuing operations $0.43 $2.65 $1.72 $4.33
Discontinued operations 3.55 (2.87) 0.40 (2.49)
Net earnings (loss) per share $3.98 $(0.22) $2.12 $1.84
Dividends paid per share $1.80 $1.60 $0.60 $2.20
Weighted average shares outstanding
(in thousands):
Basic 222,028 247,123 238,824 244,931
Diluted 223,083 247,123 239,525 245,780
Common and exchangeable shares
outstanding at end of period (in
thousands) 211,106 242,929 238,008 238,008
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
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 Q3 2006 Q3 2006 Q4 2006 2006
Cellulose Fibers $(5) $(10) $13 $(2) $2 $-
Fine Paper 7 (10) 6 3 (3) -
Containerboard,
Packaging, and
Recycling 4 (5) 1 - - -
6 (25) 20 1 (1) -
Income taxes (2) 9 (7) - - -
Net earnings (loss) $4 $(16) $13 $1 $(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- Year-
to- to-
date date
Q1 Q1 Q2 Q2 Q3 Q3 Q3 Q3 Q4
2007 2006 2007 2006 2007 2006 2007 2006 2006 2006
$7 $(26) $29 $21 $2 $17 $38 $12 $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 2007
includes gains of $9 million on the sale of previously closed
facility sites, a $4 million charge for a legal settlement, and
charges of $13 million to transition to a new IT service provider.
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
third quarter of 2007 includes pre-tax income of $43 million from
the settlement of litigation associated with an Ontario fine paper
mill. 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 Q3 Q3
April 1, March 26, July 1, June 25, Sept. 30, Sept. 24,
2007 2006 2007 2006 2007 2006
Timberlands:
Logs $170 $201 $172 $198 $168 $200
Other products 63 62 39 71 81 46
233 263 211 269 249 246
Wood Products:
Softwood
lumber 574 782 647 857 580 733
Plywood 100 135 106 147 89 134
Veneer 9 13 14 13 13 9
Composite
panels 24 121 24 140 20 71
Oriented
strand board 152 287 153 273 151 203
Hardwood lumber 90 99 99 105 89 96
Engineered
I-Joists 117 169 147 202 124 162
Engineered solid
section 155 204 185 231 155 190
Logs 6 7 4 5 3 5
Other products 243 256 283 327 225 302
1,470 2,073 1,662 2,300 1,449 1,905
Cellulose Fibers:
Pulp 405 394 370 402 345 404
Liquid packaging
board 56 46 72 62 61 59
Other products 21 13 28 16 30 19
482 453 470 480 436 482
Fine Paper: (2)
Paper 432 613 - 601 - 604
Coated groundwood 26 40 - 44 - 42
Other products 1 1 - 1 - 2
459 654 - 646 - 648
Containerboard,
Packaging
and Recycling:
Containerboard 119 82 109 84 99 92
Packaging 951 911 1,043 1,002 1,015 997
Recycling 94 80 103 85 106 89
Bags 23 20 23 20 23 23
Other products 39 34 49 46 50 44
1,226 1,127 1,327 1,237 1,293 1,245
Real Estate and
Related Assets 487 690 559 746 598 749
Corporate and Other 97 116 105 117 121 123
Less: sales of
discontinued
operations (563) (925) - (928) - (844)
$3,891 $4,451 $4,334 $4,867 $4,146 $4,554
Net sales and revenues
(in millions): (1) (2)
Year-to-date Q4 Year-to-date
Sept. 30, Sept. 24, Dec. 31, Dec. 31,
2007 2006 2006 2006
Timberlands:
Logs 510 $599 $182 $781
Other products 183 179 56 235
693 778 238 1,016
Wood Products:
Softwood lumber 1,801 2,372 625 2,997
Plywood 295 416 113 529
Veneer 36 35 7 42
Composite panels 68 332 25 357
Oriented strand board 456 763 176 939
Hardwood lumber 278 300 98 398
Engineered I-Joists 388 533 137 670
Engineered solid section 495 625 169 794
Logs 13 17 6 23
Other products 751 885 268 1,153
4,581 6,278 1,624 7,902
Cellulose Fibers:
Pulp 1,120 1,200 457 1,657
Liquid packaging board 189 167 62 229
Other products 79 48 22 70
1,388 1,415 541 1,956
Fine Paper: (2)
Paper 432 1,818 652 2,470
Coated groundwood 26 126 45 171
Other products 1 4 - 4
459 1,948 697 2,645
Containerboard, Packaging and
Recycling:
Containerboard 327 258 119 377
Packaging 3,009 2,910 1,021 3,931
Recycling 303 254 91 345
Bags 69 63 25 88
Other products 138 124 47 171
3,846 3,609 1,303 4,912
Real Estate and Related Assets 1,644 2,185 1,150 3,335
Corporate and Other 323 356 128 484
Less: sales of discontinued
operations (563) (2,697) (882) (3,579)
12,371 $13,872 $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) Q1 Q2 Q3
April 1, March 26, July 1, June 25, Sept. 30, Sept. 24,
2007 2006 2007 2006 2007 2006
Timberlands
(1) (2) $175 $198 $142 $224 $165 $178
Wood Products
(1) (2) (5) (167) 117 (123) 131 (131) 11
Cellulose Fibers
(1) (2) (4) 22 (5) 48 23 79 66
Fine Paper
(1) (2) (4) (6) 20 (756) - (20) - 68
Containerboard,
Packaging
and Recycling
(1) (2) (4) (7) 67 26 112 69 104 97
Real Estate
and Related
Assets (2) (8) 58 172 64 123 60 135
Corporate and Other
(1) (2) (3) (9) 633 (102) (44) (40) (16) (78)
$808 $(350) $199 $510 $261 $477
Contribution (charge) to
pre-tax earnings:
(in millions) Year-to-date Q4 Year-to-date
Sept. 30, Sept. 24, Dec. 31, Dec. 31,
2007 2006 2006 2006
Timberlands (1) (2) $482 $600 $167 $767
Wood Products (1) (2) (5) (421) 259 205 464
Cellulose Fibers (1) (2) (4) 149 84 58 142
Fine Paper (1) (2) (4) (6) 20 (708) 61 (647)
Containerboard, Packaging and
Recycling (1) (2) (4) (7) 283 192 71 263
Real Estate and Related Assets
(2) (8) 182 430 293 723
Corporate and Other
(1) (2) (3) (9) 573 (220) (3) (223)
$1,268 $637 $852 $1,489
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
FOOTNOTES TO CONTRIBUTION (CHARGE) TO PRE-TAX EARNINGS
(in millions)
(1) Closure charges by segment: Q1 Q1 Q2 Q2 Q3 Q3
2007 2006 2007 2006 2007 2006
Timberlands $- $- $- $- $- $-
Wood Products 3 - 15 1 19 10
Cellulose Fibers - (1) - - (1) 1
Fine Paper 2 - - 11 - 3
Containerboard, Packaging and
Recycling 2 2 3 5 - 3
Corporate and Other - - 1 - 1 26
$7 $1 $19 $17 $19 $43
Year-to-
Year-to-date date
Closure charges by segment: Q3 2007 Q3 2006 Q4 2006 2006
Timberlands $- $- $1 $1
Wood Products 37 11 48 59
Cellulose Fibers (1) - (3) (3)
Fine Paper 2 14 1 15
Containerboard, Packaging and
Recycling 5 10 4 14
Corporate and Other 2 26 - 26
$45 $61 $51 $112
The above closure charges include costs incurred within the
company's discontinued operations.
(2) Share-based compensation charges
(income) recognized by segment:
Q1 Q1 Q2 Q2 Q3 Q3
2007 2006 2007 2006 2007 2006
Timberlands $1 $1 $- $- $1 $-
Wood Products 2 2 2 - 1 -
Cellulose Fibers 2 1 - - - -
Fine Paper - - - - - 1
Containerboard, Packaging and
Recycling 1 2 2 (1) 1 1
Real Estate and Related Assets 2 - 1 2 - -
Corporate and Other 14 15 5 (5) - 1
$22 $21 $10 $(4) $3 $3
Share-based compensation charges
(income) recognized by segment:
Year-to-
Year-to-date date
Q3 2007 Q3 2006 Q4 2006 2006
Timberlands $2 $1 $- $1
Wood Products 5 2 1 3
Cellulose Fibers 2 1 1 2
Fine Paper - 1 - 1
Containerboard, Packaging and
Recycling 4 2 - 2
Real Estate and Related Assets 3 2 - 2
Corporate and Other 19 11 7 18
$35 $20 $9 $29
(3) Net foreign exchange gains
(losses) included in
Corporate and Other:
Q1 Q1 Q2 Q2 Q3 Q3
2007 2006 2007 2006 2007 2006
$7 $(26) $34 $20 $2 $17
Net foreign exchange gains
(losses) included in
Corporate and Other:
Year-to-date Year-to-date
Q3 2007 Q3 2006 Q4 2006 2006
$43 $11 $14 $25
(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
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 2007 includes $7 million of income from the
sale of a veneer facility and a previously closed distribution
center site.
(e) The third quarter of 2007 includes charges of $4 million for the
settlement of litigation, $4 million for restructuring activities
and $1 million in goodwill impairment.
(f) The third quarter of 2006 includes $23 million of income related
to a reduction of the reserves for hardboard siding claims.
(g) The third quarter of 2006 includes a $51 million gain on the sale
of the company's North American composite panels operations.
(h) The third quarter of 2006 includes charges of $7 million for the
impairment of fixed assets related to production curtailments.
(i) The fourth quarter of 2006 includes $344 million of income from
the refund of countervailing and anti-dumping duties.
(j) 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 third quarter of 2007 includes $3 million of income related
to the sale of a previously closed box plant site.
(c) 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, second and third quarters of 2007 includes net gains
(losses) on land and lot sales of $3 million, $3 million, and
$30 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 and third quarters of 2007 include charges for the
impairment of assets of $12 million, $23 million, respectively,
or $35 million year-to-date. 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 2007 includes a $43 million gain on the
settlement of litigation.
(d) The third quarter of 2007 includes charges of $20 million for
restructuring activities and the transition to a new IT service
provider.
(e) The third quarter of 2006 includes an $8 million charge to write
off additional goodwill associated with the coastal British
Columbia operations.
(f) The third quarter of 2006 includes a $9 million charge related to
the acquisition of OrganicID, a research and development company.
(g) 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 Q3
April 1, March 26, July 1, June 25, Sept. 30, Sept. 24,
2007 2006 2007 2006 2007 2006
Timberlands
(thousands):
Logs - cunits 750 935 762 808 805 850
Wood Products
(millions):
Softwood lumber
- board feet 1,657 1,921 1,805 2,113 1,654 1,974
Plywood - square
feet (3/8") 310 389 305 458 240 437
Veneer - square
feet (3/8") 57 61 82 63 73 48
Composite panels
- square
feet (3/4") 36 302 35 324 29 139
Oriented strand
board - square
feet (3/8") 942 1,000 899 1,069 835 989
Hardwood lumber
- board feet 89 103 99 110 93 100
Engineered
I-Joists -
lineal feet 82 114 108 137 92 110
Engineered solid
section - cubic
feet 7 9 10 11 8 9
Logs - cunits (in
thousands) 46 55 33 46 34 26
Cellulose Fibers
(thousands):
Pulp - air-dry
metric tons 594 651 524 647 470 625
Liquid packaging
board - tons 67 56 82 71 72 72
Fine Paper (thousands):
(2)
Paper - tons 461 753 - 662 - 641
Coated groundwood
- tons 38 52 - 59 - 59
Paper converting
- tons 318 511 - 474 - 462
Containerboard,
Packaging
and Recycling
(thousands):
Containerboard
- tons 259 211 230 189 205 202
Packaging
- MSF 17,754 18,342 18,965 19,168 18,751 18,425
Recycling
- tons 654 733 656 719 632 678
Kraft bags and
sacks - tons 25 20 23 20 25 22
Real Estate and
Related Assets:
Single-family
homes sold 1,684 1,472 1,139 1,325 734 906
Single-family
homes closed 976 1,161 1,062 1,483 1,145 1,439
Single-family
homes sold but
not closed at
end of period 2,207 3,105 2,284 2,947 1,873 2,414
Third party sales
volumes: (1) (2) Year-to-date Q4 Year-to-date
Sept. 30, Sept. 24, Dec. 31, Dec. 31,
2007 2006 2006 2006
Timberlands (thousands):
Logs - cunits 2,317 2,593 843 3,436
Wood Products (millions):
Softwood lumber
- board feet 5,116 6,008 1,863 7,871
Plywood - square
feet (3/8") 855 1,284 379 1,663
Veneer - square
feet (3/8") 212 172 43 215
Composite panels
- square feet (3/4") 100 765 37 802
Oriented strand board
- square feet (3/8") 2,676 3,058 1,038 4,096
Hardwood lumber
- board feet 281 313 99 412
Engineered I-Joists
- lineal feet 282 361 95 456
Engineered solid section
- cubic feet 25 29 7 36
Logs - cunits (in
thousands) 113 127 42 169
Cellulose Fibers (thousands):
Pulp - air-dry metric tons 1,588 1,923 698 2,621
Liquid packaging board
- tons 221 199 76 275
Fine Paper (thousands): (2)
Paper - tons 461 2,056 693 2,749
Coated groundwood - tons 38 170 64 234
Paper converting - tons 318 1,447 485 1,932
Containerboard, Packaging and
Recycling (thousands):
Containerboard - tons 694 602 254 856
Packaging - MSF 55,470 55,935 18,932 74,867
Recycling - tons 1,942 2,130 745 2,875
Kraft bags and sacks - tons 73 62 27 89
Real Estate and Related Assets:
Single-family homes sold 3,557 3,703 838 4,541
Single-family homes closed 3,183 4,083 1,753 5,836
Single-family homes sold
but not closed at end of
period 1,873 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 Q3
April 1, March 26, July 1, June 25, Sept. 30, Sept. 24,
2007 2006 2007 2006 2007 2006
Timberlands
(thousands):
Fee depletion
- cunits 2,140 2,132 2,038 2,083 2,029 2,040
Wood Products
(millions):
Softwood lumber
- board feet 1,427 1,663 1,451 1,650 1,405 1,559
Plywood - square
feet (3/8") 114 241 115 245 110 237
Veneer - square
feet (3/8") (3) 298 455 338 455 297 494
Composite panels
- square feet
(3/4") - 278 - 288 - 100
Oriented strand
board - square
feet (3/8") 968 1,073 847 1,062 834 1,009
Hardwood lumber
- board feet 73 82 75 83 80 82
Engineered
I-Joists -
lineal feet 87 121 114 136 91 130
Engineered
solid section
- cubic feet 6 11 9 12 8 10
Cellulose Fibers
(thousands):
Pulp - air-dry
metric tons 539 676 419 588 445 660
Liquid packaging
board - tons 60 61 77 75 72 73
Fine Paper
(thousands): (2)
Paper - tons (4) 444 724 - 672 - 675
Coated groundwood
- tons 43 56 - 56 - 59
Paper converting
- tons 318 498 - 461 - 485
Containerboard,
Packaging
and Recycling
(thousands):
Containerboard
- tons (5) 1,515 1,575 1,506 1,533 1,575 1,544
Packaging
- MSF 19,007 19,550 19,721 20,290 19,547 19,341
Recycling -
tons (6) 1,619 1,716 1,589 1,684 1,838 1,641
Kraft bags and
sacks - tons 23 19 23 20 23 18
Total production
volumes: (1) (2) Year-to-date Q4 Year-to-date
Sept. 30, Sept. 24, Dec. 31, Dec. 31,
2007 2006 2006 2006
Timberlands (thousands):
Fee depletion - cunits 6,207 6,255 2,195 8,450
Wood Products (millions):
Softwood lumber
- board feet 4,283 4,872 1,483 6,355
Plywood - square
feet (3/8") 339 723 177 900
Veneer - square feet
(3/8") (3) 933 1,404 335 1,739
Composite panels - square
feet (3/4") - 666 - 666
Oriented strand board
- square feet (3/8") 2,649 3,144 1,022 4,166
Hardwood lumber
- board feet 228 247 77 324
Engineered I-Joists
- lineal feet 292 387 86 473
Engineered solid section
- cubic feet 23 33 8 41
Cellulose Fibers (thousands):
Pulp - air-dry metric tons 1,403 1,924 664 2,588
Liquid packaging
board - tons 209 209 73 282
Fine Paper (thousands): (2)
Paper - tons (4) 444 2,071 725 2,796
Coated groundwood - tons 43 171 59 230
Paper converting - tons 318 1,444 487 1,931
Containerboard, Packaging and
Recycling (thousands):
Containerboard - tons (5) 4,596 4,652 1,608 6,260
Packaging - MSF 58,275 59,181 20,670 79,851
Recycling - tons (6) 5,046 5,041 1,788 6,829
Kraft bags and sacks - tons 69 57 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, Sept. 30, Dec. 31,
Assets 2007 2007 2007 2006
Weyerhaeuser
Current assets:
Cash and cash equivalents $1,172 $208 $72 $223
Receivables, less allowances 1,394 1,508 1,419 1,183
Inventories 1,437 1,308 1,323 1,355
Prepaid expenses 356 378 406 385
Assets held for sale 114 - - 105
Current assets of discontinued
operations - - - 870
Total current assets 4,473 3,402 3,220 4,121
Property and equipment 6,850 6,775 6,894 7,061
Construction in progress 467 544 412 395
Timber and timberlands at cost,
less fee stumpage charged to
disposals 3,705 3,721 3,736 3,681
Investments in and advances to
equity affiliates 498 510 497 499
Goodwill 2,158 2,181 2,200 2,185
Deferred pension and other assets 1,378 1,470 1,525 1,368
Restricted assets held by special
purpose entities 915 916 915 917
Noncurrent assets of discontinued
operations - - - 3,011
20,444 19,519 19,399 23,238
Real Estate and Related Assets
Cash and cash equivalents 13 7 8 20
Receivables, less allowances 77 75 72 144
Real estate in process of
development and for sale 1,540 1,561 1,587 1,449
Land being processed for
development 1,427 1,476 1,528 1,365
Investments in unconsolidated
entities, less reserves 81 83 77 72
Other assets 396 383 423 423
Consolidated assets not owned 264 287 277 151
3,798 3,872 3,972 3,624
Total assets $24,242 $23,391 $23,371 $26,862
Liabilities and Shareholders' Interest
Weyerhaeuser
Current liabilities:
Notes payable and commercial
paper $163 $92 $92 $72
Current maturities of long-term
debt 70 63 262 488
Accounts payable 920 1,010 894 948
Accrued liabilities 1,220 1,145 1,185 1,363
Current liabilities of
discontinued operations - - - 258
Total current liabilities 2,373 2,310 2,433 3,129
Long-term debt 6,849 5,980 6,428 7,069
Deferred income taxes 2,897 2,906 2,863 3,011
Deferred pension, other
postretirement benefits
and other liabilities 1,691 1,775 1,780 1,759
Liabilities (nonrecourse to
Weyerhaeuser) held by
special purpose entities 763 765 764 765
Noncurrent liabilities of
discontinued operations - - - 717
14,573 13,736 14,268 16,450
Real Estate and Related Assets
Notes payable and commercial paper 427 412 295 -
Long-term debt 605 605 605 606
Other liabilities 565 539 497 606
Consolidated liabilities not owned 232 246 237 115
1,829 1,802 1,634 1,327
Total liabilities 16,402 15,538 15,902 17,777
Shareholders' interest 7,840 7,853 7,469 9,085
Total liabilities and
shareholders' interest $24,242 $23,391 $23,371 $26,862
WEYERHAEUSER COMPANY
STATISTICAL INFORMATION
STATEMENT OF CASH FLOWS
SELECTED INFORMATION Q1 Q2 Q3
(unaudited) April 1, March 26, July 1, June 25, Sept. 30, Sept. 24,
(in millions) 2007 2006 2007 2006 2007 2006
(Weyerhaeuser only,
excludes Real
Estate & Related
Assets)
Net cash from
operations $(187) $(210) $271 $566 $157 $102
Cash paid for
property and
equipment $(114) $(182) $(140) $(184) $(176) $(173)
Cash paid for
timberlands
reforestation $(12) $(12) $(12) $(9) $(8) $(6)
Cash received
from issuances
of debt $- $- $- $- $451 $3
Revolving credit
facilities,
notes and
commercial paper
borrowings, net $10 $(68) $22 $19 $148 $195
Payments on debt $(638) $(158) $(918) $(10) $(54) $(58)
Proceeds from
the sale of
operations $1,350 $- $128 $- $7 $187
Repurchases of
common stock $- $- $(22) $- $(441) $(332)
Year-to-
STATEMENT OF CASH FLOWS Year-to-date Q4 date
SELECTED INFORMATION (unaudited) Sept. 30, Sept. 24, Dec. 31, Dec. 31,
(in millions) 2007 2006 2006 2006
(Weyerhaeuser only, excludes Real
Estate & Related Assets)
Net cash from operations $241 $458 $1,089 $1,547
Cash paid for property and
equipment $(430) $(539) $(273) $(812)
Cash paid for timberlands
reforestation $(32) $(27) $(10) $(37)
Cash received from issuances of
debt $451 $3 $1 $4
Revolving credit facilities,
notes and commercial paper
borrowings, net $180 $146 $(95) $51
Payments on debt $(1,610) $(226) $(5) $(231)
Proceeds from the sale of
operations $1,485 $187 $86 $273
Repurchases of common stock $(463) $(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: 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/