Weyerhaeuser Reports Third Quarter Results

26 Oct, 2012, 03:05 ET from Weyerhaeuser Company

FEDERAL WAY, Wash., Oct. 26, 2012 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported net earnings of $117 million, or 22 cents per diluted share, for the third quarter. This compares with net earnings of $157 million, or 29 cents per diluted share, and net earnings before special items of $66 million, or 12 cents per diluted share, for the same period last year. Net sales for the third quarter of 2012 totaled $1.8 billion, compared with net sales from continuing operations of $1.6 billion for the third quarter of 2011.

(Logo:  http://photos.prnewswire.com/prnh/20120111/AQ34535LOGO)

"This month the Board of Directors increased our quarterly dividend by 13 percent to 17 cents per share," said Dan Fulton, president and chief executive officer. "As our third quarter performance indicates, the operational improvements within our businesses are demonstrating clear results, and we are capitalizing on an improving housing market to the benefit of our shareholders."

 

WEYERHAEUSER FINANCIAL HIGHLIGHTS

2012

2012

2011

(millions, except per share data)

2Q

3Q

3Q

Net sales from continuing operations

$1,793

$1,772

$1,569

Net earnings

$84

$117

$157(1)

Weighted average shares outstanding, diluted

540

542

540

Earnings per diluted share

$0.16

$0.22

$0.29(1)

Net earnings before special items

$47

$117

$66

Earnings per diluted share before special items

$0.09

$0.22

$0.12

Net cash from operations

$267

$122

$117

Net change in cash and cash equivalents

$133

($253)(2)

$90

Cash and cash equivalents at end of period

$861

$608

$971

(1) The third quarter of 2011 included net earnings of $24 million from discontinued operations, or $0.04 per diluted share, on net sales of $83 million. Discontinued operations include Weyerhaeuser's hardwoods and Westwood Shipping Lines businesses, which were sold in the third quarter of 2011.

(2) Net change in cash and cash equivalents for the third quarter of 2012 includes $181 million for debt repayment and a $97 million payment on a note related to a timber monetization undertaken in 2002. Weyerhaeuser expects to receive cash of approximately $110 million when the related financial investment matures in the fourth quarter of 2012.

TIMBERLANDS

FINANCIAL HIGHLIGHTS (millions)

2Q 2012

3Q 2012

Change

Net sales

$262

$267

$5

Contribution to pre-tax earnings

$77

$80

$3

3Q 2012 Performance - The segment's earnings improved $3 million compared with the second quarter. Earnings from disposition of non-strategic timberlands increased $18 million. This was mostly offset by lower domestic selling prices for Western logs, and reduced export log realizations due to mix. Western fee harvest volumes declined slightly, and road costs increased seasonally. In the South, average selling prices for logs improved slightly compared with the second quarter, and fee harvest volumes were slightly higher.

4Q 2012 Outlook - Weyerhaeuser expects comparable earnings from the Timberlands segment in the fourth quarter. The company expects seasonally higher fee harvest volumes and slightly improved selling prices for Western logs in export and domestic markets, offset by increased silviculture costs.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS (millions)

2Q 2012

3Q 2012

Change

Net sales

$776

$816

$40

Contribution to pre-tax earnings before special items

$30

$59

$29

Pre-tax special items

6

(6)

GAAP contribution to pre-tax earnings

$36

$59

$23

3Q 2012 Performance - The segment's earnings before special items improved $29 million compared with the second quarter due to strong markets and effective execution of performance improvement initiatives. Sales realizations were higher across nearly all product lines, most significantly in oriented strand board, which increased 25 percent. Sales volumes for engineered wood products increased, and volumes for lumber and oriented strand board declined slightly.

4Q 2012 Outlook - Weyerhaeuser anticipates lower earnings from the Wood Products segment in the fourth quarter due to seasonal declines in pricing and demand for most products.

CELLULOSE FIBERS

FINANCIAL HIGHLIGHTS (millions)

2Q 2012

3Q 2012

Change

Net sales

$459

$459

$0

Contribution to pre-tax earnings

$36

$78

$42

3Q 2012 Performance - The segment's earnings improved $42 million compared with the second quarter due to significantly lower maintenance costs, increased production and strong operating performance. Average pulp prices were flat. The segment completed one scheduled annual maintenance outage in the third quarter, compared with two in the second quarter.

4Q 2012 Outlook - Weyerhaeuser expects earnings from the Cellulose Fibers segment to be comparable to the third quarter. The company anticipates lower selling prices for fluff pulp, offset by increased sales volumes and slightly lower maintenance expense.

REAL ESTATE

FINANCIAL HIGHLIGHTS (millions)

2Q 2012

3Q 2012

Change

Net sales

$296

$230

($66)

Contribution to pre-tax earnings

$15

$17

$2

3Q 2012 Performance - The segment's earnings improved $2 million. Third quarter included earnings of $17 million from single-family homebuilding, compared with $3 million from single family homebuilding and $12 million from sale of land and lots in the second quarter. Home closings increased seasonally to 615 single-family homes, and average margins on homes closed were substantially higher due to mix. At the end of the third quarter the backlog of homes sold, but not closed, totaled 1,055 units, a 74 percent increase compared with one year ago.

4Q 2012 Outlook - Excluding any earnings from potential land sales, Weyerhaeuser expects slightly lower earnings from single-family homebuilding operations in the fourth quarter. The company anticipates a seasonal increase in home closings, lower average margins due to mix and higher selling expenses due to the additional closing volume.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world's largest forest products companies, began operations in 1900. We grow and harvest trees, build homes and make a range of forest products essential to everyday lives. We manage our timberland on a sustainable basis in compliance with internationally recognized forestry standards. At the end of 2011, we employed approximately 12,800 employees in 11 countries. We have customers worldwide and generated $6.2 billion in sales from continuing operations in 2011. Our stock trades on the New York Stock exchange under the symbol WY. Learn more at www.weyerhaeuser.com.

EARNINGS CALL INFORMATION

Weyerhaeuser will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on October 26 to discuss third quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on October 26.

To join the conference call from within North America, dial 877-296-9413 (access code – 41409566) at least 15 minutes prior to the call. Those calling from outside North America should dial 706-679-2458 (access code – 41409566). Replays will be available for one week at 800-585-8367 (access code – 41409566) from within North America and at 404-537-3406 (access code – 41409566) from outside North America.

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

FORWARD LOOKING STATEMENTS

This news release contains statements concerning the company's future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on various assumptions and may not be accurate because of risks and uncertainties surrounding these assumptions. Factors listed below, as well as other factors, may cause actual results to differ significantly from these forward-looking statements. There is no guarantee that any of the events anticipated by these forward-looking statements will occur. If any of the events occur, there is no guarantee what effect they will have on company operations or financial condition. The company will not update these forward-looking statements after the date of this news release.

Some forward-looking statements discuss the company's plans, strategies and intentions. They use words such as "expects," "may," "will," "believes," "should," "approximately," "anticipates," "estimates," and "plans."  In addition, these words may use the positive or negative or other variations of those terms.

This release contains forward-looking statements regarding the company's expectations during the fourth quarter of 2012, including slightly improved selling prices and comparable sales volumes for Western logs, increased demand and slightly improved price realizations for export logs, slightly lower Southern log realizations due to mix and a small seasonal increase in fee harvest volume, increased silviculture costs, earnings from non-strategic land sales expected to be flat, and comparable earnings from the Timberlands segment; a seasonal decline in pricing and demand, and lower earnings from the Wood Products segment; lower selling prices for fluff pulp, increased sales volumes, lower maintenance expense, somewhat higher energy costs and comparable earnings from the Cellulose Fibers segment; and a seasonal increase in home closings, lower average margins due to mix, higher selling expenses due to additional volume, and slightly lower earnings from single-family homebuilding operations in the Real Estate segment.

Major risks, uncertainties and assumptions that affect the company's businesses and may cause actual results to differ from these forward-looking statements, include, but are not limited to:

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

The company also is a large exporter and is affected by changes in economic activity in Europe and Asia, particularly Japan and China. It is affected by changes in currency exchange rates, particularly the relative value of the U.S. dollar to the euro and the Canadian dollar, and the relative value of the euro and the yen. Restrictions on international trade or tariffs imposed on imports also may affect the company.

For more information contact: Media – Anthony Chavez, 253-924-7148 AnalystsKathryn McAuley, 253-924-2058

Exhibit 99.2

Weyerhaeuser Company

Q3.2012 Analyst Package

Preliminary results, subject to audit

Consolidated Statement of Operations

in millions

Q2

Q3

Year-to-date

June 30, 2012

September 30, 2012

September 30, 2011

September 30, 2012

September 30, 2011

Net sales and revenues

$         1,793

$      1,772

$        1,569

$       5,059

$         4,601

Cost of products sold

1,516

1,424

1,283

4,230

3,803

Gross margin

277

348

286

829

798

Selling, general and administrative expenses

142

156

135

448

452

Research and development expenses

8

8

7

23

21

Charges for restructuring, closures and impairments

4

10

41

26

52

Other operating costs (income), net

(53)

(28)

3

(147)

(190)

Operating income

176

202

100

479

463

Interest income and other

11

15

15

38

35

Interest expense, net of capitalized interest

(86)

(87)

(86)

(260)

(296)

Earnings from continuing operations before income taxes

101

130

29

257

202

Income taxes

(17)

(13)

104

(15)

52

Earnings from continuing operations

84

117

133

242

254

Earnings from discontinued operations, net of income taxes

-

-

24

-

12

Net earnings attributable to Weyerhaeuser common shareholders

$               84

$        117

$          157

$          242

$            266

Per Share Information

Q2

Q3

Year-to-date

June 30, 2012

September 30, 2012

September 30, 2011

September 30, 2012

September 30, 2011

Earnings per share attributable to Weyerhaeuser common shareholders, basic and diluted:

Continuing operations

$             0.16

$        0.22

$          0.25

$          0.45

$           0.47

Discontinued operations

-

-

0.04

-

0.02

Net earnings per share

$             0.16

$        0.22

$          0.29

$          0.45

$           0.49

Dividends paid per share

$             0.15

$        0.15

$          0.15

$          0.45

$           0.45

Weighted average shares outstanding (in thousands):

Basic

537,966

539,094

537,969

538,146

537,906

Diluted

540,033

542,311

539,827

540,694

540,469

Common shares outstanding at end of period (in thousands)

537,526

540,672

537,210

540,672

537,210

Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*

in millions

Q2

Q3

Year-to-date

June 30, 2012

September 30, 2012

September 30, 2011

September 30, 2012

September 30, 2011

Operating income

$             176

$           202

$          100

$           479

$            463

Depreciation, depletion and amortization

113

112

120

338

359

Special items

(57)

-

33

(95)

(119)

Capitalized interest included in cost of products sold

19

6

5

28

17

EBITDA, excluding special items*

$             251

$          320

$          258

$          750

$            720

 

Weyerhaeuser Company

Q3.2012 Analyst Package

Preliminary results, subject to audit

Consolidated Balance Sheet

in millions

June 30, 2012

September 30, 2012

December 31, 2011

ASSETS

Forest Products:

Current assets:

Cash and cash equivalents

$         857

$              602

$            950

Receivables, less allowances

488

504

468

Receivables for taxes

6

97

22

Inventories

487

512

476

Prepaid expenses

86

83

68

Deferred tax assets

100

117

81

Total current assets

2,024

1,915

2,065

Property and equipment, net

2,770

2,759

2,901

Construction in progress

208

220

145

Timber and timberlands at cost, less depletion charged to disposals

3,963

3,967

3,978

Investments in and advances to equity affiliates

187

188

192

Goodwill

40

40

40

Other assets

435

352

444

Assets held by variable interest entities

916

914

916

10,543

10,355

10,681

Real Estate:

Cash and cash equivalents

4

6

3

Receivables, less allowances

38

36

41

Real estate in process of development and for sale

581

602

555

Land being processed for development

959

982

936

Investments in and advances to equity affiliates

20

20

21

Deferred tax assets

238

233

240

Other assets

89

98

113

Assets held by variable interest entities

3

6

8

1,932

1,983

1,917

Total assets

$    12,475

$          12,338

$       12,598

LIABILITIES AND EQUITY

Forest Products:

Current liabilities:

Current maturities of long-term debt

$         184

$               340

$              12

Accounts payable

360

356

336

Accrued liabilities

576

558

593

Total current liabilities

1,120

1,254

941

Long-term debt

4,005

3,842

4,181

Deferred income taxes

92

68

93

Deferred pension and other postretirement benefits

1,429

1,378

1,467

Other liabilities

400

477

408

Liabilities (nonrecourse to the company) held by variable interest entities

778

680

776

7,824

7,699

7,866

Real Estate:

Long-term debt

283

109

285

Other liabilities

171

177

172

Liabilities (nonrecourse to the company) held by variable interest entities

-

-

8

454

286

465

Total liabilities

8,278

7,985

8,331

Equity:

Total Weyerhaeuser shareholders' interest

4,186

4,340

4,263

Noncontrolling interests

11

13

4

Total equity

4,197

4,353

4,267

Total liabilities and equity

$     12,475

$          12,338

$       12,598

Weyerhaeuser Company

Q3.2012 Analyst Package

Preliminary results, subject to audit

Consolidated Statement of Cash Flows

in millions

Q2

Q3

Year-to-date

June 30, 2012

September 30, 2012

September 30, 2011

September 30, 2012

September 30, 2011

Cash flows from operations:

Net earnings

$         84

$         117

$          157

$          242

$           266

Noncash charges (credits) to income:

Depreciation, depletion and amortization

113

112

120

338

363

Deferred income taxes, net

13

15

(103)

22

(77)

Pension and other postretirement benefits

(30)

19

17

(39)

60

Share-based compensation expense

8

10

2

28

19

Charges for impairment of assets

4

7

34

19

37

Net gains on dispositions of assets

(10)

(22)

(51)

(39)

(227)

Foreign exchange transaction (gains) losses

9

(10)

19

(8)

11

Change in:

Receivables less allowances

(18)

(10)

35

(33)

(34)

Receivable for taxes

18

(1)

8

15

(19)

Inventories

28

(22)

(9)

(34)

(40)

Real estate and land

7

(47)

(15)

(95)

(49)

Prepaid expenses

(12)

2

-

(18)

(14)

Accounts payable and accrued liabilities

65

1

(51)

10

(74)

Deposits on land positions and other assets

22

(11)

(5)

11

(9)

Pension and postretirement contributions

(33)

(41)

(27)

(109)

(64)

Other

(1)

3

(14)

19

(5)

Net cash from operations

267

122

117

329

144

Cash flows from investing activities:

Property and equipment

(68)

(75)

(62)

(197)

(136)

Timberlands reforestation

(7)

(5)

(4)

(22)

(23)

Proceeds from sale of assets

18

12

157

36

353

Payments of liabilities held by special purpose entities

-

(97)

-

(97)

-

Other

(1)

(1)

(1)

(1)

(6)

Cash from investing activities

(58)

(166)

90

(281)

188

Cash flows from financing activities:

Cash dividends

(80)

(81)

(81)

(242)

(242)

Change in book overdrafts

9

(12)

(8)

(32)

(26)

Payments on debt

(4)

(181)

-

(187)

(550)

Exercises of stock options

2

66

-

73

37

Repurchase of common stock

-

-

(24)

-

(24)

Other

(3)

(1)

(4)

(5)

(23)

Cash from financing activities

(76)

(209)

(117)

(393)

(828)

Net change in cash and cash equivalents

133

(253)

90

(345)

(496)

Cash and cash equivalents at beginning of period

728

861

881

953

1,467

Cash and cash equivalents at end of period

$       861

$         608

$          971

$          608

$          971

Cash paid (received) during the year for:

Interest, net of amount capitalized

$         57

$         117

$          115

$          290

$          362

Income taxes

$         (5)

$             1

$              6

$          (14)

$            21

Weyerhaeuser Company

Total Company Statistics

Q3.2012 Analyst Package

Preliminary results, subject to audit

Special Items Included in Net Earnings

in millions

Q2

Q3

Year-to-date

June 30, 2012

September 30, 2012

September 30, 2011

September 30, 2012

September 30, 2011

Net earnings

$              84

$         117

$          157

$          242

$            266

Gain on sale of 82,000 acres of non-strategic timberlands

-

-

-

-

(96)

Loss on early extinguishment of debt

-

-

-

-

16

Restructuring, impairments and other charges

-

-

24

10

24

Gain on postretirement plan amendment

(33)

-

-

(67)

-

Gain on sale of properties

(4)

-

(9)

(4)

(9)

Tax adjustments

-

-

(83)

(8)

(83)

Charges related to the sale of hardwoods

-

-

8

-

14

Gain on sale of Westwood Shipping Lines

-

-

(31)

-

(31)

Net earnings before special items

$            47

$          117

$           66

$          173

$            101

Q2

Q3

Year-to-date

June 30, 2012

September 30, 2012

September 30, 2011

September 30, 2012

September 30, 2011

Net earnings per diluted share

$         0.16

$        0.22

$         0.29

$         0.45

$          0.49

Gain on sale of 82,000 acres of non-strategic timberlands

-

-

-

-

(0.18)

Loss on early extinguishment of debt

-

-

-

-

0.03

Restructuring, impairments and other charges

-

-

0.04

0.02

0.04

Gain on postretirement plan amendment

(0.06)

-

-

(0.12)

-

Gain on sale of properties

(0.01)

-

(0.01)

(0.01)

(0.01)

Tax adjustments

-

-

(0.15)

(0.01)

(0.15)

Charges related to the sale of hardwoods

-

-

0.01

-

0.03

Gain on sale of Westwood Shipping Lines

-

-

(0.06)

-

(0.06)

Net earnings before special items per diluted share

$        0.09

$         0.22

$         0.12

$         0.33

$           0.19

Selected Total Company Items, Excluding Discontinued Operations

in millions

Q2

Q3

Year-to-date

June 30, 2012

September 30, 2012

September 30, 2011

September 30, 2012

September 30, 2011

Depreciation, depletion and amortization:

Cost of products sold

$          103

$         102

$          108

$          307

$            318

Selling, general and administrative expenses

10

10

12

31

41

Total depreciation, depletion and amortization

$          113

$         112

$          120

$         338

$           359

Pension and postretirement costs:

Pension and postretirement costs allocated to business segments

$            14

$           12

$              9

$            39

$             34

Pension and postretirement costs not allocated

7

7

6

21

21

Total company pension and postretirement costs

$            21

$           19

$            15

$           60

$             55

Total decrease (increase) in Forest Products working capital (1)

$           103

$          (29)

$            70

$          (74)

$          (170)

Cash spent for capital expenditures

$           (75)

$          (80)

$           (65)

$        (219)

$          (156)

(1)Working capital does not include cash balances.

 

Weyerhaeuser Company

Timberlands Segment

Q3.2012 Analyst Package

Preliminary results, subject to audit

Segment Statement of Operations

in millions

Q2.2012

Q3.2012

Q3.2011

YTD.2012

YTD.2011

Sales to and revenues from unaffiliated customers

$        262

$        267

$        252

$        779

$        770

Intersegment sales

146

162

154

498

479

Total net sales and revenues

408

429

406

1,277

1,249

Cost of products sold

313

336

322

1,002

932

Gross margin

95

93

84

275

317

Selling, general and administrative expenses

23

24

23

72

70

Research and development expenses

5

4

4

13

12

Other operating income, net

(10)

(14)

(3)

(35)

(182)

Operating income

77

79

60

225

417

Interest income and other

-

1

1

2

3

Net contribution to earnings

$         77

$         80

$         61

$       227

$       420

Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*

in millions

Q2.2012

Q3.2012

Q3.2011

YTD.2012

YTD.2011

Operating income

$         77

$         79

$         60

$       225

$       417

Depreciation, depletion and amortization

34

35

35

104

102

Special items

-

-

-

-

(152)

EBITDA, excluding special items*

$       111

$       114

$         95

$       329

$       367

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

Q2.2012

Q3.2012

Q3.2011

YTD.2012

YTD.2011

Gain on sale of 82,000 acres of non-strategic timberlands

$           -

$           -

$           -

$           -

$        152

Selected Segment Items

Q2.2012

Q3.2012

Q3.2011

YTD.2012

YTD.2011

Total decrease (increase) in working capital (1)

$            6

$          19

$          60

$          16

$        (20)

Cash spent for capital expenditures

$        (15)

$        (17)

$        (12)

$        (44)

$        (40)

(1)Working capital does not include cash balances.

Segment Statistics

Q2.2012

Q3.2012

Q3.2011

YTD.2012

YTD.2011

Third Party  Net Sales and Revenue (millions)

Logs:

West

$        146

$        132

$        144

$        408

$        406

South

56

60

53

166

143

Canada

2

5

4

14

12

Total Logs

204

197

201

588

561

Pay as cut timber sales

9

8

9

28

25

Timberlands exchanges

7

24

2

39

62

Higher and better use land sales

5

4

5

13

11

Minerals, oil and gas

7

8

14

22

43

Products from international operations

29

26

21

80

59

Other products

1

-

-

9

9

Total

$        262

$        267

$        252

$        779

$        770

 

Logs Third Party Sales Realizations (per cubic meter)

West

$     94.47

$     89.28

$   104.27

$     94.09

$   104.97

South

$     41.15

$     42.04

$     39.11

$     41.26

$     40.21

Canada

$     34.66

$     35.23

$     33.73

$     35.74

$     34.91

International

$     23.53

$     23.76

$     33.73

$     23.45

$     35.65

 

Logs Third Party Sales Volumes (cubic meters, thousands)

West

1,551

1,480

1,385

4,339

3,871

South

1,354

1,430

1,336

4,012

3,552

Canada

54

133

116

392

333

International

82

99

88

259

239

Total

3,041

3,142

2,925

9,002

7,995

 

Logs Fee Harvest Volumes (cubic meters, thousands)

West

1,831

1,784

1,604

5,294

4,962

South

2,788

2,809

2,535

8,311

7,070

International

161

198

270

531

589

Total

4,780

4,791

4,409

14,136

12,621

Weyerhaeuser Company

Wood Products Segment

Q3.2012 Analyst Package

Preliminary results, subject to audit

Segment Statement of Operations  

in millions

Q2.2012

Q3.2012

Q3.2011

YTD.2012

YTD.2011

Sales to and revenues from unaffiliated customers

$     776

$     816

$     603

$    2,226

$    1,734

Intersegment sales

20

18

20

58

61

Total net sales and revenues

796

834

623

2,284

1,795

Cost of products sold

708

713

624

2,032

1,786

Gross margin

88

121

(1)

252

9

Selling, general and administrative expenses

50

54

47

154

146

Research and development expenses

1

2

1

4

3

Charges for restructuring, closures and impairments

2

2

38

5

44

Other operating costs (income), net

(1)

4

(6)

8

(15)

Operating income (loss)

36

59

(81)

81

(169)

Interest income and other

-

-

1

1

3

Net contribution to earnings from continuing operations

36

59

(80)

82

(166)

Net contribution to earnings from discontinued operations

-

-

(17)

-

(25)

Net contribution to earnings

$      36

$      59

$    (97)

$        82

$    (191)

Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*

in millions

Q2.2012

Q3.2012

Q3.2011

YTD.2012

YTD.2011

Operating income (loss)

$      36

$      59

$    (81)

$        81

$    (169)

Depreciation, depletion and amortization

33

33

38

100

116

Special items

(6)

-

33

(6)

33

EBITDA, excluding special items*

$      63

$      92

$    (10)

$     175

$      (20)

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

Q2.2012

Q3.2012

Q3.2011

YTD.2012

YTD.2011

Gain on sale of property

$         6

$       -

$         5

$           6

$           5

Charges for restructuring and impairments

$         -

$       -

$     (38)

$       (38)

Total special items from continuing operations

6

-

(33)

6

(33)

Charges related to sale of discontinued hardwoods operations

-

-

(13)

-

(22)

Total

$        6

$       -

$    (46)

$          6

$      (55)

Selected Segment Items

Q2.2012

Q3.2012

Q3.2011

YTD.2012

YTD.2011

Total decrease (increase) in working capital (1)

$         5

$     (21)

$       34

$     (128)

$       (41)

Cash spent for capital expenditures

$     (15)

$     (16)

$       (8)

$       (37)

$       (21)

(1)Working capital does not include cash balances.

Segment Statistics

in millions, except for third-party sales realizations

Q2.2012

Q3.2012

Q3.2011

YTD.2012

YTD.2011

Structural Lumber (board feet)

Third Party Net Sales and Revenue

$     370

$     363

$     281

$    1,024

$       831

Third Party Sales Realizations

$     350

$     359

$     301

$       341

$       305

Third Party Sales Volumes

1,056

1,013

934

3,006

2,723

Production Volumes

1,004

945

890

2,907

2,686

Engineered Solid Section (cubic feet)

Third Party Net Sales and Revenue

$       70

$       76

$       63

$       211

$       180

Third Party Sales Realizations

$  1,789

$  1,800

$  1,883

$    1,806

$    1,967

Third Party Sales Volumes

3.9

4.2

3.4

11.7

9.2

Production Volumes

3.8

4.3

3.4

11.8

10.7

Engineered I-joists (lineal feet)

Third Party Net Sales and Revenue

$       49

$       53

$       43

$       143

$       124

Third Party Sales Realizations

$  1,211

$  1,248

$  1,275

$    1,246

$    1,266

Third Party Sales Volumes

40

43

34

115

98

Production Volumes

37

39

32

110

96

Oriented Strand Board (square feet 3/8')

Third Party Net Sales and Revenue

$     138

$     169

$       96

$       418

$       264

Third Party Sales Realizations

$     214

$     268

$     176

$       227

$       181

Third Party Sales Volumes

643

630

546

1,838

1,462

Production Volumes

626

642

574

1,869

1,586

Softwood Plywood (square feet 3/8')

Third Party Net Sales and Revenue

$       26

$       34

$       18

$         83

$         48

Third Party Sales Realizations

$     332

$     356

$     259

$       334

$       260

Third Party Sales Volumes

81

95

69

249

185

Production Volumes

50

54

49

155

150

 

Weyerhaeuser Company

Cellulose Fibers Segment

Q3.2012 Analyst Package

Preliminary results, subject to audit

Segment Statement of Operations

in millions

Q2.2012

Q3.2012

Q3.2011

YTD.2012

YTD.2011

Total net sales and revenues

$   459

$   459

$   503

$  1,391

$  1,535

Cost of products sold

404

364

345

1,175

1,156

Gross margin

55

95

158

216

379

Selling, general and administrative expenses

22

23

24

69

70

Research and development expenses

2

2

2

6

6

Other operating income, net

(4)

(5)

(4)

(18)

(12)

Operating income

35

75

136

159

315

Interest income and other

1

3

3

3

1

Net contribution to earnings

$      36

$      78

$   139

$     162

$     316

Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*

in millions

Q2.2012

Q3.2012

Q3.2011

YTD.2012

YTD.2011

Operating income

$      35

$      75

$   136

$     159

$     315

Depreciation, depletion and amortization

36

37

37

110

110

EBITDA, excluding special items*

$      71

$   112

$   173

$     269

$     425

Selected Segment Items

Q2.2012

Q3.2012

Q3.2011

YTD.2012

YTD.2011

Total decrease (increase) in working capital (1)

$       24

$     (20)

$     (14)

$         49

$       (37)

Cash spent for capital expenditures

$     (44)

$     (45)

$     (43)

$     (134)

$       (92)

(1)Working capital does not include cash balances.<