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Press release from Business Wire

Weyerhaeuser Reports Third Quarter Results

<ul class='bwmarginl2'> <li class='bwlistitemmargb'> <b>Net Earnings of $1.116 Billion, or $3.50 Per Share</b> </li> <li class='bwlistitemmargb'> <b>Includes Earnings of $1.035 Billion from Income Tax Adjustments</b> </li> <li class='bwlistitemmargb'> <b>Increase in Shares Outstanding due to Sept. 2010 Special Dividend</b> </li> </ul>

Friday, October 29, 2010

Weyerhaeuser Reports Third Quarter Results08:30 EDT Friday, October 29, 2010 FEDERAL WAY, Wash. (Business Wire) -- Weyerhaeuser Company (NYSE: WY) today reported net earnings of $1.116 billion for the third quarter, or $3.50 per diluted share, on net sales of $1.7 billion. This compares with essentially break-even results on net sales of $1.4 billion for the same period last year. Earnings for the third quarter of 2010 include $1.035 billion from income tax adjustments, primarily related to the reversal of deferred taxes as a result of Weyerhaeuser's conversion to a real estate investment trust (REIT). Excluding the income tax adjustments, the company reported net earnings of $81 million, or 25 cents per diluted share, in the third quarter of 2010, a $137 million increase compared with the $56 million loss before special items reported in the third quarter of 2009. Calculations of third quarter 2010 earnings per share are based upon approximately 318 million weighted average shares, on a diluted basis, compared with 212 million shares in second quarter 2010. Weyerhaeuser's shares outstanding increased to approximately 536 million shares as of the end of the third quarter, or 537 million shares on a diluted basis, following the company's Sept. 1 payment of a previously announced special dividend. The dividend consisted of approximately 324 million shares of common stock and $560 million in cash in conjunction with the company's conversion to a REIT. “Cellulose Fibers reported a record performance, as it benefited from stronger production levels, lower costs and higher prices,” said Dan Fulton, president and chief executive officer. “Meanwhile, the work done by our real estate business to restructure its operations and product offerings resulted in an operating profit despite challenging market conditions. It's obvious, however, that the overall housing market remains in an uncertain state as the expiration of the housing tax credit led to a precipitous drop in prices and volume for our Wood Products business. The housing market also affects our Timberlands business, where we continue to defer harvest due to lower log demand.” SUMMARY OF THIRD QUARTER FINANCIAL HIGHLIGHTS               Millions (except per share data)3Q 20103Q 2009Change Net earnings $1,116 $0 $1,116 Earnings per diluted share $3.50 $0 $3.50 Net sales $1,664 $1,407 $257   SEGMENT RESULTS FOR THIRD QUARTER(Contributions (Charges) to Pre-Tax Earnings)   Millions       3Q 2010     3Q 2009*     Change Timberlands $75 $219 ($144) Wood Products ($100) ($97) ($3) Cellulose Fibers $181 $166 $15 Real Estate $20 ($64) $84   * Segment earnings for the third quarter of 2009 included the following pre-tax items: Timberlands: a gain of $163 million on sale of 140,000 acres of non-strategic timberlands Cellulose Fibers: a gain of $122 million related to alternative fuel mixture credits Real Estate: charges of $55 million for asset impairments and restructuring TIMBERLANDS               3Q 20102Q 2010Change Contribution to pre-tax earnings (millions) $75 $70 $5   3Q 2010 Performance – The segment's earnings increased in the third quarter compared with the second, as increased income from disposition of non-strategic timberlands was partially offset by lower earnings from operations. Third quarter included pre-tax gains of $34 million from disposition of non-strategic timberlands, compared with $14 million in the second quarter. Earnings from operations declined due to lower log price realizations, primarily in the west, and seasonally higher road and silviculture expenses. Weyerhaeuser continues to defer timber harvest. 4Q 2010 Outlook – Excluding the disposition of non-strategic timberlands, Weyerhaeuser expects fourth quarter operating earnings from the segment to be lower than third quarter. The company expects lower log price realizations, primarily in the west, and seasonally lower harvest volumes. The company also anticipates increased silviculture costs. WOOD PRODUCTS               3Q 20102Q 2010Change Charge to pre-tax earnings (millions) ($100) ($3) ($97)   3Q 2010 Performance – The dramatically weaker market conditions the company experienced in the latter half of the second quarter persisted throughout the third quarter. Quarterly average sales realizations for lumber declined 18 percent in the third quarter compared with the second, while oriented strand board realizations declined 30 percent. Sales volumes for engineered wood products fell by more than 20 percent. Operating rates for oriented strand board and engineered lumber mills declined. Second quarter results included pre-tax gains of $8 million from the sale of assets. Excluding this item, the segment's results declined by $89 million compared with the second quarter. 4Q 2010 Outlook – Weyerhaeuser expects a comparable loss from the segment in the fourth quarter compared with the third quarter. The company anticipates seasonally lower volumes across all product lines and modestly lower price realizations, offset by lower log costs. CELLULOSE FIBERS               3Q 20102Q 2010Change Contribution to pre-tax earnings (millions) $181 $74 $107   3Q 2010 Performance – The segment's earnings improved substantially in the third quarter compared with the second due to higher average price realizations, significantly lower maintenance costs and strong operating performance by all mills. There were no annual maintenance outages in the third quarter, compared with three in the second quarter. 4Q 2010 Outlook – Weyerhaeuser expects fourth quarter earnings from the segment to be lower than third quarter due to lower average pulp price realizations and increased scheduled maintenance. REAL ESTATE               3Q 20102Q 2010Change Contribution to pre-tax earnings (millions) $20 $27 ($7)   3Q 2010 Performance – Earnings from the segment declined in the third quarter compared with the second, as lower earnings from land and lot sales were partially offset by increased income from single-family homebuilding operations. Single-family homebuilding operations earned $16 million in the third quarter, compared with $14 million in the second quarter. These amounts include income from partnerships of $7 million in the third quarter and $3 million in the second quarter. Home sale closings declined 20 percent to 501 single-family homes. Margins on homes closed improved slightly due to mix. Third quarter included gains of $4 million on the sale of land and lots, compared with $13 million in the second quarter. 4Q 2010 Outlook – Weyerhaeuser expects slightly lower earnings from single-family homebuilding operations in the fourth quarter, with additional single-family home closings offset by somewhat lower margins. Weyerhaeuser does not anticipate any significant land and lot sales in the fourth quarter. 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 2009, we employed approximately 14,900 employees in 10 countries. We have customers worldwide and generated $5.5 billion in sales in 2009. Our stock trades on the New York Stock exchange under the symbol WY. Additional information about us 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. 29 to discuss third quarter results. To access the conference call from within North America, dial (877) 296-9413 (access code – 53832852) at least 15 minutes prior to the call. Those calling from outside North America should dial 1-(706) 679-2458 (access code – 53832852). Replays will be available for one week at (800) 642-1687 (access code – 53832852) from within North America and at 1-(706) 645-9291 (access code – 53832852) from outside North America. The call is being webcast through Weyerhaeuser's Internet site at http://investor.weyerhaeuser.com and is accessible by selecting the “Q3 2010 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 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 2010, including lower log prices and harvest volumes in Timberlands; seasonally lower sales and realizations across product lines in the Wood Products segment; increased scheduled maintenance and lower average pulp price realizations in the Cellulose Fiber segment; and lower margins offset by seasonally higher home closings in our single-family homebuilding operations. 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 economic conditions; performance of the company's manufacturing operations, including maintenance requirements; raw material prices; energy prices; transportation costs; the level of competition from domestic and foreign producers; the effect of weather; the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters; the successful execution of internal performance plans, including restructurings and cost reduction initiatives; federal tax policies; the effect of forestry, land use, environmental and other governmental regulations; legal proceedings; 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; performance of pension fund investments and related derivatives; and other factors described under “Risk Factors” in the Company's annual report on Form 10-K. The company also is a large exporter and is affected by changes in economic activity in Europe and Asia, particularly Japan and China. It also is affected by changes in currency exchange rates, particularly the relative value of the U.S. dollar to the euro and the Canadian dollar. Restrictions on international trade or tariffs imposed on imports also may affect the company. WEYERHAEUSER COMPANY                       STATISTICAL INFORMATION (unaudited)CONSOLIDATED EARNINGS       (in millions, except per-share figures)Q3Year-to-dateQ2   Sept. 30,Sept. 30,Sept. 30,Sept. 30,June 30,2010     20092010     20092010 Net sales and revenues: Forest Products $ 1,454 $ 1,211 $ 4,270 $ 3,506 $ 1,548 Real Estate   210         196     618         567     257   Total net sales and revenues   1,664         1,407     4,888         4,073     1,805     Costs and expenses: Forest Products: Costs of products sold 1,065 965 3,235 2,978 1,169 Alternative fuel mixture credits - (122 ) - (229 ) - Depreciation, depletion and amortization 120 131 364 393 121 Selling expenses 33 33 103 109 36 General and administrative expenses 82 79 244 258 80 Research and development expenses 8 10 24 38 8 Charges for restructuring and closures 14 67 16 195 2 Impairment of goodwill and other assets 2 36 3 74 - Other operating income, net (1)   (24 )       (184 )   (103 )       (255 )   (8 )   1,300         1,015     3,886         3,561     1,408   Real Estate: Costs and operating expenses 158 172 468 487 189 Depreciation and amortization 4 3 12 11 5 Selling expenses 17 19 51 61 19 General and administrative expenses 19 16 52 61 17 Other operating costs (income), net (1 ) 13 2 20 2 Impairment of long-lived assets and other related charges   -         46     2         141     1     197         269     587         781     233   Total costs and expenses   1,497         1,284     4,473         4,342     1,641     Operating income (loss) 167 123 415 (269 ) 164 Interest expense and other: Forest Products: Interest expense incurred (98 ) (107 ) (309 ) (322 ) (105 ) Less: interest capitalized 4 1 5 5 - Loss on early extinguishment of debt (1 ) - (50 ) - (49 ) Interest income and other 12 15 33 42 12 Equity in loss of equity affiliates - (4 ) (9 ) (1 ) (3 ) Real Estate: Interest expense incurred (6 ) (8 ) (18 ) (22 ) (6 ) Less: interest capitalized 6 6 16 20 5 Interest income and other - 3 3 5 - Equity in income of equity affiliates 7 1 46 14 3 Impairments of investments and other related charges   -         -     -         (32 )   -   Earnings (loss) before income taxes 91 30 132 (560 ) 21 Income tax benefit (provision) (2)   1,025         (35 )   980         173     (7 ) Net earnings (loss) 1,116 (5 ) 1,112 (387 ) 14 Less: (income) loss attributable to noncontrolling interests   -         5     (2 )       17     -   Net earnings (loss) attributable to Weyerhaeuser common shareholders $ 1,116       $ -   $ 1,110       $ (370 ) $ 14     Basic earnings (loss) per share attributable to Weyerhaeuser common shareholders $ 3.52       $ -   $ 4.49       $ (1.75 ) $ 0.07     Diluted earnings (loss) per share attributable to Weyerhaeuser common shareholders $ 3.50       $ -   $ 4.48       $ (1.75 ) $ 0.07     Dividends paid per share $ 26.46       $ 0.05   $ 26.56       $ 0.55   $ 0.05     Weighted average shares outstanding (in thousands): Basic 317,369 211,357 247,192 211,337 211,600 Diluted 318,360 211,357 247,879 211,337 212,103   Common shares outstanding at end of period (in thousands)   535,935         211,357     535,935         211,357     211,609     (1) Other operating income, net for third quarter and year-to-date 2009 includes $163 million gain on sale of 140,000 acres of non-strategic timberlands.   (2) (a) Third quarter and year-to-date 2009 include $21 million in net tax charges related to the true-up of previous tax liabilities, state tax law and rate changes and interest on unrecognized tax benefits. (b) Year-to-date 2010 includes $1,043 million income for the reversal of deferred tax liabilities associated with the conversion to REIT status partially offset by $39 million for tax charges related to the elimination of the ability to claim a tax deduction provided to retirees and reimbursed under the Medicare Part D subsidy beginning in 2013, state tax law and rate changes, unrecognized tax benefits and other adjustments.   WEYERHAEUSER COMPANY                       STATISTICAL INFORMATION (unaudited)NET SALES AND REVENUES       (in millions)Q3Year-to-dateQ2   Sept. 30,Sept. 30,Sept. 30,Sept. 30,June 30,2010     20092010     20092010 Timberlands: Logs: West $ 110 $ 84 $ 317 $ 253 $ 125 South 40 39 104 115 37 Canada   3       5   12       7   - Total logs 153 128 433 375 162 Pay as cut timber sales 8 10 25 24 9 Timberlands exchanges and non-strategic dispositions (1) 41 15 89 59 13 Higher and better use land sales (1) 6 5 18 10 7 Minerals, oil and gas 15 21 46 49 16 Products from international operations (2) 17 13 49 30 17 Other products   -       1   7       11   1   240       193   667       558   225 Wood Products: Structural lumber 254 216 803 644 308 Engineered solid section 68 67 213 184 79 Engineered I-Joists 39 47 136 123 49 Oriented strand board 80 63 262 176 116 Softwood plywood 19 17 58 45 23 Hardwood lumber 54 54 172 161 64 Other products produced 36 37 109 119 38 Other products purchased for resale   76       87   266       272   112   626       588   2,019       1,724   789 Cellulose Fibers: Pulp 412 297 1,087 833 354 Liquid packaging board 88 73 249 216 90 Other products   22       20   64       54   24   522       390   1,400       1,103   468 Real Estate: Single family housing 200 185 576 527 233 Land 9 10 39 37 23 Other   1       1   3       3   1   210       196   618       567   257   Corporate and Other 66 40 184 121 66                   $ 1,664     $ 1,407 $ 4,888     $ 4,073 $ 1,805   (1) Higher and better use timberlands and non-strategic dispositions are sold through Forest Products subsidiaries. (2) Includes logs, plywood and hardwood lumber harvested or produced by our international operations, primarily in South America.   Note: For more detailed information see Appendix B   WEYERHAEUSER COMPANY                       STATISTICAL INFORMATION (unaudited)NET CONTRIBUTION TO PRE-TAX EARNINGS   (in millions)       Q3Year-to-dateQ2Sept. 30,Sept. 30,Sept. 30,Sept. 30,June 30,2010     20092010     20092010 Timberlands $ 75 $ 219 $ 226 $ 325 $ 70 Wood Products (100 ) (97 ) (122 ) (525 ) (3 ) Cellulose Fibers 181 166 274 297 74 Real Estate 20 (64 ) 78 (210 ) 27 Corporate and Other   10         (81 )   30         (111 )   8   $ 186       $ 143   $ 486       $ (224 ) $ 176     WEYERHAEUSER COMPANY                       STATISTICAL INFORMATION (unaudited)FOOTNOTES TO NET CONTRIBUTION TO PRE-TAX EARNINGS (unaudited)(in millions)           Year-to-date   Timberlands includes: Q3 2010     Q3 2009Q3 2010     Q3 2009Q2 2010 Charges for restructuring and closures $ - $ (2 ) $ 1 $ (7 ) $ - Gain on sale of 140,000 acres of non-strategic timberlands - 163 - 163 - Sale of mineral royalties - 6 - 6 - International loss   (4 )       (4 )   (12 )       (17 )   (4 )           Year-to-date   Wood Products includes: Q3 2010     Q3 2009Q3 2010     Q3 2009Q2 2010 Charges for restructuring and closures $ (8 ) $ (1 ) $ (8 ) $ (64 ) $ - Goodwill impairments - - - (3 ) - Other asset impairments - (4 ) - (25 ) - Reserve for litigation - - - (19 ) - Gain on sale of operations - - 4 - - Gain on sale of property   4         -     52         1     8             Year-to-date   Cellulose Fibers includes: Q3 2010     Q3 2009Q3 2010     Q3 2009Q2 2010 Charges for restructuring and closures $ - $ - $ - $ (1 ) $ - Alternative fuel mixture credits - 122 - 229 - Gain on sale of previously closed mill   3         -     3         -     -             Year-to-date   Real Estate includes: Q3 2010     Q3 2009Q3 2010     Q3 2009Q2 2010 Charges for restructuring and closures $ - $ (13 ) $ - $ (19 ) $ - Impairment of assets and other related charges - attributable to Weyerhaeuser shareholders - (42 ) - (158 ) - Impairment of assets and other related charges - attributable to noncontrolling interests - (4 ) - (15 ) - Sale of partnership interests - - 33 9 - Partnership earnings 7 1 12 5 3 Gain on land and lot sales   4         -     20         13     13             Year-to-date   Corporate and Other includes: Q3 2010     Q3 2009Q3 2010     Q3 2009Q2 2010 Charges for restructuring and closures $ (6 ) $ (64 ) $ (6 ) $ (123 ) $ - Asset impairments - (31 ) - (45 ) - Net foreign exchange gains (losses) 4 17 5 33 (8 ) Pension and postretirement credits (1)   17         31     55         92     22     (1) Excludes pension and postretirement included in charges for restructuring and closures.   WEYERHAEUSER COMPANY                       STATISTICAL INFORMATION (unaudited)THIRD PARTY SALES VOLUMES           Q3Year-to-dateQ2Sept. 30,Sept. 30,Sept. 30,Sept. 30,June 30,2010     20092010     20092010 Timberlands (thousands): Logs - cubic meters: West 1,205 1,156 3,456 3,529 1,276 South 903 981 2,364 2,812 827 Canada 92 144 366 211 15 International 63 84 209 234 68   Wood Products (millions): Structural lumber - board feet 889 794 2,534 2,560 884 Engineered solid section - cubic feet 4 3 12 10 4 Engineered I-Joists - lineal feet 31 43 116 105 41 Oriented strand board - square feet (3/8") 428 363 1,199 1,084 437 Softwood plywood - square feet (3/8") 68 66 203 172 75 Hardwood lumber - board feet 65 66 208 193 76   Cellulose Fibers (thousands): Pulp - air-dry metric tons 445 450 1,280 1,254 413 Liquid packaging board - tons 80 74 230 215 83   Real Estate: Single-family homes sold 418 593 1,529 1,838 491 Single-family homes closed 501 506 1,519 1,399 625 Single-family homes sold but not closed at end of period (backlog) 660     997 660     997 743   Note: For more detailed information see Appendix B   WEYERHAEUSER COMPANY                       STATISTICAL INFORMATION (unaudited)PRODUCTION VOLUMES           Q3Year-to-dateQ2Sept. 30,Sept. 30,Sept. 30,Sept. 30,June 30,2010     20092010     20092010 Timberlands (thousands): Fee depletion - cubic meters: West 1,444 1,603 4,279 5,191 1,404 South 2,060 2,258 6,081 7,133 1,881 International 89 122 270 370 89   Wood Products (millions): Structural lumber - board feet 857 777 2,504 2,430 846 Engineered solid section - cubic feet 4 3 12 8 4 Engineered I-Joists - lineal feet 25 36 107 80 41 Oriented strand board - square feet (3/8") 446 390 1,292 1,094 468 Softwood plywood - square feet (3/8") 57 48 169 113 64 Hardwood lumber - board feet 60 54 180 157 61   Cellulose Fibers (thousands): Pulp - air-dry metric tons 470 429 1,321 1,212 414 Liquid packaging board - tons 82     71 232     213 81   Note: For more detailed information see Appendix B   WEYERHAEUSER COMPANY               STATISTICAL INFORMATION (unaudited)CONDENSED CONSOLIDATED BALANCE SHEETS(in millions)         AssetsSept. 30,June 30,Dec. 31,201020102009Forest Products Current assets: Cash and cash equivalents $ 1,366 $ 1,839 $ 1,862 Short-term investments - 3 49 Receivables, less allowances 477 481 370 Receivables for taxes 81 51 602 Receivable from pension trust - - 146 Inventories 479 472 447 Prepaid expenses 87 91 82 Deferred tax assets   122   136   109 Total current assets 2,612 3,073 3,667 Property and equipment, net 3,350 3,423 3,611 Construction in progress 86 77 52 Timber and timberlands at cost, less depletion charged to disposals 4,019 4,022 4,010 Investments in and advances to equity affiliates 193 192 197 Goodwill 40 40 40 Deferred pension and other assets 830 948 756 Restricted assets held by special purpose entities   914   915   915   12,044   12,690   13,248 Real Estate Cash and cash equivalents 2 7 7 Receivables, less allowances 34 42 32 Inventory 1,552 1,552 1,515 Investments in and advances to equity affiliates 18 18 17 Deferred tax assets 271 270 299 Other assets 132 123 126 Consolidated assets not owned   -   6   6   2,009   2,018   2,002 Total assets $ 14,053 $ 14,708 $ 15,250   Liabilities   Forest Products Current liabilities: Notes payable and commercial paper $ 1 $ 1 $ 4 Current maturities of long-term debt 24 3 3 Accounts payable 326 322 317 Accrued liabilities   656   663   631 Total current liabilities 1,007 989 955 Long-term debt 4,710 4,734 5,281 Deferred income taxes 704 1,642 1,538 Deferred pension, other postretirement benefits and other liabilities 1,644 1,854 2,000 Liabilities (nonrecourse to Weyerhaeuser) held by special purpose entities   769   770   768   8,834   9,989   10,542 Real Estate Long-term debt 390 390 402 Other liabilities   213   218   252   603   608   654 Total liabilities   9,437   10,597   11,196   Equity   Weyerhaeuser shareholders' interest 4,610 4,100 4,044 Noncontrolling interest   6   11   10 Total equity   4,616   4,111   4,054 Total liabilities and equity $ 14,053 $ 14,708 $ 15,250           Forest Products Working Capital by Business SegmentSept. 30,June 30,Dec. 31,201020102009 Timberlands $ 15 $ 39 $ 9 Wood Products 254 308 226 Cellulose Fibers 307 268 234 Corporate and Other (1)   1,029   1,469   2,243 $ 1,605 $ 2,084 $ 2,712   (1) Corporate and Other segment holds payroll and other liabilities related to the segments and income taxes receivable related to Real Estate.   WEYERHAEUSER COMPANY                       STATISTICAL INFORMATION (unaudited)CONSOLIDATED STATEMENT OF CASH FLOWS(in millions)         Q3Year-to-dateQ2Sept. 30,Sept. 30,Sept. 30,Sept. 30,June 30,2010     20092010     20092010 Cash flows from operations: Net earnings (loss) $ 1,116 $ (5 ) $ 1,112 $ (387 ) $ 14 Noncash charges (credits) to income: Depreciation, depletion and amortization 124 134 376 404 126 Deferred income taxes, net (1,006 ) (22 ) (916 ) (20 ) 56 Pension and other postretirement benefits (8 ) 32 (19 ) 10 (10 ) Share-based compensation expense 4 7 16 18 6 Equity in (income) loss of equity affiliates (6 ) 3 (3 ) (4 ) - Litigation charges 3 - 14 20 11 Charges for impairment of assets 2 82 5 247 1 Loss on early extinguishment of debt 1 - 50 - 49 Net gains on dispositions of assets and operations (10 ) (162 ) (103 ) (194 ) (10 ) Foreign exchange transaction (gains) losses (4 ) (17 ) (4 ) (34 ) 10 Decrease (increase) in working capital: Receivables less allowances 12 54 (103 ) (164 ) (28 ) Receivable for taxes (30 ) - 521 - (17 ) Inventories, real estate and land (13 ) 36 (75 ) 247 39 Prepaid expenses 3 4 (4 ) 15 5 Accounts payable and accrued liabilities (10 ) (90 ) (75 ) (344 ) (22 ) Deposits on land positions and other assets (10 ) 10 (13 ) 13 (6 ) Pension contributions (63 ) - (191 ) - (1 ) Other   13         (32 )   (37 )       (103 )   20   Net cash from operations   118         34     551         (276 )   243     Cash flows from investing activities: Property and equipment (37 ) (43 ) (115 ) (132 ) (32 ) Timberlands reforestation (6 ) (7 ) (26 ) (29 ) (7 ) Acquisition of timberlands (10 ) (19 ) (30 ) (26 ) (11 ) Redemption of short-term investments - 14 47 92 - Distributions from (investments in and advances to) equity affiliates - (3 ) 1 (2 ) - Proceeds from sale of assets and operations 30 313 160 350 15 Repayments from (loan to) pension trust - - 146 (85 ) 96 Other   4         19     (5 )       32     (2 ) Cash from investing activities   (19 )       274     178         200     59     Cash flows from financing activities: Notes, commercial paper borrowings and revolving credit facilities, net - - (3 ) - - Cash dividends (560 ) (10 ) (581 ) (116 ) (10 ) Change in book overdrafts (15 ) (12 ) (27 ) (46 ) (8 ) Payments on debt (3 ) (403 ) (617 ) (422 ) (597 ) Exercise of stock options - - 3 - 2 Repurchase of common stock - - - (2 ) - Other   1         (1 )   (5 )       (4 )   (3 ) Cash from financing activities   (577 )       (426 )   (1,230 )       (590 )   (616 )   Net change in cash and cash equivalents (478 ) (118 ) (501 ) (666 ) (314 ) Cash and cash equivalents at beginning of period   1,846         1,746     1,869         2,294     2,160     Cash and cash equivalents at end of period $ 1,368       $ 1,628   $ 1,368       $ 1,628   $ 1,846     Cash paid (received) during the year for: Interest, net of amount capitalized $ 132       $ 168   $ 356       $ 381   $ 71     Income Taxes $ 2       $ (16 ) $ (576 )     $ 47   $ (2 )           Capital Expenditures by Business SegmentQ3Year-to-dateQ2Sept. 30,Sept. 30,Sept. 30,Sept. 30,June 30,Forest Products2010     20092010     20092010 Timberlands $ 17 $ 18 $ 52 $ 67 $ 15 Wood Products 5 4 12 33 5 Cellulose Fibers (1) 19 20 77 38 19 Corporate and Other   -         3     1         14     -   41 45 142 152 39 Real Estate   2         5     3         9     -   $ 43       $ 50   $ 145       $ 161   $ 39     (1) 2010 includes the exercise of an option to acquire liquid packaging board extrusion equipment for $21 million, including assumption of liabilities of $4 million. Weyerhaeuser CompanyMediaBruce Amundson, 253-924-3047orAnalystsKathryn McAuley, 253-924-2058