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Press release from Business Wire

Weyerhaeuser Reports First Quarter Results

Friday, April 29, 2011

Weyerhaeuser Reports First Quarter Results03:01 EDT Friday, April 29, 2011 FEDERAL WAY, Wash. (Business Wire) -- Weyerhaeuser Company (NYSE:WY) today reported net earnings of $99 million for the first quarter, or 18 cents per diluted share, on net sales of $1.6 billion. This compares with a net loss of $20 million on net sales of $1.4 billion for the same period last year. Earnings for the first quarter of 2011 include an after-tax gain of $96 million on the previously announced sale of 82,000 acres of non-strategic timberlands in southwest Washington. Excluding this special item, the company reported net earnings of $3 million. This compares to a net loss before special items of $15 million in the first quarter of 2010. “During the first quarter we continued to make progress in our drive to improve our financial performance despite anemic housing market conditions,” said Dan Fulton, president and chief executive officer. “We are leveraging our strength in the export markets to take advantage of increased demand from Asia. Our businesses are running more efficiently and our work to eliminate costs continues. We remain focused on making further improvements to achieve our goal of delivering superior returns.”                     WEYERHAEUSER FINANCIAL HIGHLIGHTS(millions, except per share data)1Q 20114Q 20101Q 2010   Net sales $1,578 $1,664 $1,419   Net earnings (loss) $99 $171 ($20) Weighted average shares outstanding, diluted 540 538 211 Earnings (loss) per diluted share $0.18 $0.32 ($0.10)   Net earnings (loss) before special items $3 $52 ($15) Earnings (loss) per diluted share before special items $0.00 $0.10 ($0.07)   Weyerhaeuser's outstanding shares increased substantially from the first quarter of 2010 due to a special dividend of approximately 324 million shares of common stock and $560 million in cash, paid on Sept. 1, 2010 in conjunction with the company's conversion to a REIT. TIMBERLANDS                     FINANCIAL HIGHLIGHTS (millions)1Q 20114Q 2010Change Net sales $230 $207 $23 Contribution to pre-tax earnings before special items $89 $56 $33 Pre-tax gain from special items $152 $0 $152 GAAP contribution to pre-tax earnings $241 $56 $185   1Q 2011 Performance – First quarter earnings before special items increased $33 million compared with fourth quarter, as strong export demand resulted in improved selling prices and volumes for western logs. Fee harvest volumes increased, resulting in lower per unit logging costs. These improvements were partially offset by higher fuel costs. First quarter results include a pre-tax gain of $152 million from the previously announced sale of 82,000 acres of non-strategic timberlands located in southwest Washington. 2Q 2011 Outlook – Excluding the disposition of non-strategic timberlands,Weyerhaeuser expects slightly higher earnings in the second quarter compared with the first. The company anticipates modestly improved selling prices for western logs and higher harvest volumes to be largely offset by higher fuel expenses and seasonally higher road and silviculture costs. WOOD PRODUCTS                     FINANCIAL HIGHLIGHTS (millions)1Q 20114Q 2010Change Net sales $624 $572 $52 Charge to pre-tax earnings before special items ($36) ($85) $49 Pre-tax gains (charges) from special items $0 ($103) $103 GAAP charge to pre-tax earnings ($36) ($188) $152   1Q 2011 Performance –The segment's results before special items improved $49 million compared with the fourth quarter. Selling prices increased across most product lines. Per unit manufacturing costs declined due to continued cost reductions and improved operating rates for lumber and oriented strand board. This was partially offset by increased log costs. Fourth quarter included special items of $103 million for asset impairments, closures and restructuring. 2Q 2011 Outlook – Weyerhaeuser anticipates a smaller loss from the segment in the second quarter due to seasonally higher sales volumes and improved operating rates. CELLULOSE FIBERS                     FINANCIAL HIGHLIGHTS (millions)1Q 20114Q 2010Change Net sales $506 $511 ($5) Contribution to pre-tax earnings before special items $86 $138 ($52) Pre-tax gains (charges) from special items $0 $0 $0 GAAP contribution to pre-tax earnings $86 $138 ($52)   1Q 2011 Performance – First quarter earnings declined $52 million compared with fourth quarter. Average selling prices for pulp were slightly lower. Maintenance costs increased and production declined as the segment completed two planned annual maintenance outages in the first quarter, compared with one in the fourth quarter. Chemical, energy and fiber costs also increased. 2Q 2011 Outlook – Weyerhaeuser expects higher earnings from the Cellulose Fibers segment in the second quarter. The company anticipates higher selling prices, partially offset by increased maintenance costs due to an increase in the number of scheduled annual maintenance outages. REAL ESTATE                     FINANCIAL HIGHLIGHTS (millions)1Q 20114Q 2010Change Net sales $160 $305 ($145) Contribution (charge) to pre-tax earnings before special items ($1) $33 ($34) Pre-tax charges from special items $0 ($20) $20 GAAP contribution (charge) to pre-tax earnings ($1) $13 ($14)   1Q 2011 Performance – Earnings before special items declined $34 million compared with the fourth quarter due to seasonally fewer home sale closings and lower margins. Home sale closings decreased 40 percent compared with the fourth quarter to 363 single-family homes. Margins on homes closed declined due to mix. First quarter earnings included $1 million from the sale of land and lots, compared with $6 million from sale of land, lots and apartments in the fourth quarter. Fourth quarter included special items of $20 million for asset impairments and restructuring. 2Q 2011 Outlook – Weyerhaeuser anticipates a small profit from single-family homebuilding operations in the second quarter due to a seasonal increase in home sale closings. CORPORATE AND OTHER                     FINANCIAL HIGHLIGHTS (millions)1Q 20114Q 2010Change Contribution (charge) to pre-tax earnings before special items ($41) $2 ($43) Pre-tax gains from special items $0 $39 ($39) GAAP contribution (charge) to pre-tax earnings ($41) $41 ($82)   Earnings before special items declined $43 million compared with the fourth quarter, primarily due to non-cash pension and postretirement charges and higher share-based compensation expense. First quarter segment results included pension and postretirement charges of $12 million, as the company amortized actuarial losses deferred in prior years. Fourth quarter included pension and postretirement credits of $19 million. Share-based compensation expense for the segment increased $8 million compared with the fourth quarter, primarily due to a larger mark-to-market adjustment resulting from an increase in the company's stock price. Fourth quarter special items of $39 million included a gain on the sale of five short line railroads, partially offset by charges for restructuring, closures and impairments. 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 2010, we employed approximately 14,000 employees in 10 countries. We have customers worldwide and generated $6.6 billion in sales in 2010. 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 April 29 to discuss first quarter results. To access the conference call from within North America, dial 877-296-9413 (access code – 29868744) at least 15 minutes prior to the call. Those calling from outside North America should dial 1-706-679-2458 (access code – 29868744). Replays will be available for one week at 800-642-1687 (access code – 29868744) from within North America and at 1-706-645-9291 (access code – 29868744) 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 “Q1 2011 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 second quarter of 2011, including housing market conditions; market challenges for our Timberlands, Wood Products and Real Estate segments; higher selling prices for western logs and higher harvest volumes in Timberlands, partially offset by higher fuel expenses and seasonally higher road and silviculture costs; improved operating rates, higher selling prices and cost reductions in the Wood Products segment, partially offset by increased log costs; higher selling prices, partially offset by increased scheduled maintenance costs in the Cellulose Fiber segment; and a seasonal increase in home sale closings and lower margins and average prices 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 successful execution of internal performance plans, including restructurings and cost reduction initiatives; the level of competition from domestic and foreign producers; the effect of the Japanese disaster on demand for company products; 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; 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 CompanyQ1.2011 Analyst Package Preliminary results, subject to audit   Consolidated Statement of Operations                 in millions Q4Q1Dec 31,March 31,     March 31,20102011     2010   Net sales and revenues$1,664$1,578$1,419   Cost of products sold   1,362     1,324         1,232   Gross margin302254187   Selling, general and administrative expenses 178 179 163 Research and development expenses 10 7 8 Charges for restructuring, closures and impairments 127 4 2 Other operating income, net   (66 )   (174 )       (70 ) Operating income5323884   Interest income and other 10 11 42 Impairments of investments and other related charges (3 ) - - Interest expense, net of capitalized interest   (96 )   (93 )       (106 ) Earnings (loss) before taxes (36 ) 156 20   Income tax benefit (provision)   207     (57 )       (38 ) Net earnings (loss) 171 99 (18 )   Less: net earnings attributable to noncontrolling interests   -     -         (2 ) Net earnings (loss) attributable to Weyerhaeuser common shareholders$171   $99       $(20)   Per Share Information           Q4Q1Dec 31,March 31,March 31,20102011     2010   Basic earnings (loss) per share attributable to Weyerhaeuser common shareholders $ 0.32 $ 0.18 $ (0.10 )   Diluted earnings (loss) per share attributable to Weyerhaeuser common shareholders $ 0.32 $ 0.18 $ (0.10 )   Dividends paid per share $ 0.05 $ 0.15 $ 0.05   Weighted average shares outstanding (in thousands): Basic 535,956 537,140 211,440 Diluted 538,376 540,476 211,440 Common shares outstanding at end of period (in thousands)   535,976     538,408         211,557           Weyerhaeuser CompanyQ1.2011 Analyst Package Preliminary results, subject to audit   Consolidated Balance Sheet     in millions March 31,Dec 31,20112010Assets   Forest Products Current assets: Cash and cash equivalents $ 1,459 $ 1,466 Receivables, less allowances 505 451 Inventories 544 478 Prepaid expenses 85 81 Deferred tax assets   155   113 Total current assets 2,748 2,589 Property and equipment, net 3,151 3,217 Construction in progress 149 123 Timber and timberlands at cost, less depletion charged to disposals 4,003 4,035 Investments in and advances to equity affiliates 192 194 Goodwill 40 40 Other assets 424 363 Restricted assets held by special purpose entities   914   915   11,621   11,476 Real Estate Cash and cash equivalents 4 1 Receivables, less allowances 54 51 Real estate in process of development and for sale 515 517 Land being processed for development 978 974 Investments in and advances to equity affiliates 15 16 Deferred tax assets 266 266 Other assets 119 120 Consolidated assets not owned   8   8 1,959 1,953         Total assets $ 13,580     $ 13,429     Liabilities   Forest Products Current liabilities: Accounts payable $ 359 $ 340 Accrued liabilities   686   734 Total current liabilities 1,045 1,074 Long-term debt 4,710 4,710 Deferred income taxes 485 366 Deferred pension and other postretirement benefits 908 930 Other liabilities 405 393 Liabilities (nonrecourse to Weyerhaeuser) held by special purpose entities   771   772   8,324   8,245 Real Estate Long-term debt 348 350 Other liabilities 196 212 Consolidated liabilities not owned   8   8   552   570 Total liabilities   8,876   8,815   Equity   Total Weyerhaeuser shareholders' interest 4,702 4,612 Noncontrolling interests   2   2 Total equity 4,704 4,614         Total liabilities and equity $ 13,580     $ 13,429             Weyerhaeuser CompanyQ1.2011 Analyst Package Preliminary results, subject to audit     Consolidated Statement of Cash Flows           in millions Q4Q1Dec 31,March 31,March 31,20102011     2010   Cash flows from operations: Net earnings (loss) $ 171 $ 99 $ (18 ) Noncash charges (credits) to income (loss): Depreciation, depletion and amortization 127 123 126 Deferred income taxes, net (341 ) 39 34 Pension and other postretirement benefits (2 ) 24 (1 ) Share-based compensation expense 8 14 6 Equity in loss of equity affiliates 3 2 3 Charges for impairment of assets 112 1 2 Net gains on dispositions of assets and operations (46 ) (156 ) (83 ) Foreign exchange transaction gains (4 ) (7 ) (10 ) Decrease (increase) in working capital: Receivables less allowances 36 (59 ) (87 ) Receivable for taxes 62 1 568 Inventories 2 (66 ) (65 ) Real estate and land 48 (2 ) (36 ) Prepaid expenses 14 (10 ) (13 ) Accounts payable and accrued liabilities (44 ) (78 ) (47 ) Deposits on land positions and other assets 3 - 3 Pension contributions (27 ) (1 ) (132 ) Other   87     (33 )       (72 ) Net cash from operations   209     (109)       178     Cash flows from investing activities: Property and equipment (79 ) (35 ) (46 ) Timberlands reforestation (10 ) (12 ) (13 ) Redemption of short-term investments 2 - 47 Proceeds from sale of assets and operations 53 193 115 Repayments from pension trust - - 50 Other   (17 )   5         (3 ) Cash from investing activities   (51)   151         150     Cash flows from financing activities: Notes, commercial paper borrowings and revolving credit facilities, net (1 ) - (3 ) Cash dividends (27 ) (81 ) (11 ) Change in book overdrafts 33 3 (4 ) Payments on debt (65 ) (2 ) (17 ) Exercises of stock options - 34 - Other   1     -         (2 ) Cash from financing activities   (59)   (46)       (37)   Net change in cash and cash equivalents 99 (4 ) 291 Cash and cash equivalents at beginning of period   1,368     1,467         1,869   Cash and cash equivalents at end of period $ 1,467   $ 1,463       $ 2,160     Cash paid (received) during the year for: Interest, net of amount capitalized $ 57   $ 156       $ 153     Income taxes $ (9 ) $ 2       $ (444 )             Weyerhaeuser CompanyTotal Company StatisticsQ1.2011 Analyst Package Preliminary results, subject to audit   Special Items Included in Net Earnings           in millions Q4Q1Dec 31,March 31,March 31,20102011     2010Net earnings (loss)$171$99$(20) Income tax adjustments (177 ) - 31 Gain on sale of wood products assets - - (26 ) Gain on sale of railroads (31 ) - - Gain on sale of 82,000 acres of non-strategic timberlands - (96 ) - Charges for closures, restructuring and impairments   89     -         -   Net earnings (loss) before special items$52   $3       $(15)           Q4Q1Dec 31,March 31,March 31,20102011     2010Net earnings (loss) per diluted share$0.32$0.18$(0.10) Income tax adjustments (0.33 ) - 0.15 Gain on sale of wood products assets - - (0.12 ) Gain on sale of railroads (0.06 ) - - Gain on sale of 82,000 acres of non-strategic timberlands - (0.18 ) - Charges for closures, restructuring and impairments   0.17     -         -   Net earnings (loss) before special items per diluted share$0.10   $-       $(0.07)   Selected Total Company Items           in millions Q4Q1Dec 31,March 31,March 31,20102011     2010 Depreciation, depletion and amortization: Cost of products sold $ 112 $ 107 $ 110 Selling, general and administrative expenses   15     16         16   Total depreciation, depletion and amortization $ 127   $ 123       $ 126   Pension and postretirement credits (costs): Pension and postretirement costs allocated to business segments $ (12 ) $ (12 ) $ (12 ) Pension and postretirement credits (costs) retained by Corporate segment   19     (12 )       16   Total company pension and postretirement credits (costs) $ 7   $ (24 )     $ 4     Total decrease (increase) in Forest Products working capital $ 98 $ (196 ) $ 169 Cash spent for capital expenditures $ (89 ) $ (47 )     $ (59 )     Weyerhaeuser CompanyTimberlands SegmentQ1.2011 Analyst Package         Preliminary results, subject to audit   Segment Statement of Operations in millions Q4.2010 Q1.2011     Q1.2010   Trade sales and revenues (unaffiliated customers) $ 207 $ 230 $ 202 Intersegment sales   164     191         171   Total net sales and revenues371421373 Cost of products sold   298     320         277   Gross margin7310196 Selling, general and administrative expenses 22 23 20 Research and development expenses 7 4 4 Charges for restructuring, closures and impairments - - 1 Other operating income, net   (11 )   (166 )       (10 ) Operating income   55     240         81   Interest income and other   1     1         -   Net contribution to earnings$56   $241       $81     Selected Segment Items Q4.2010 Q1.2011     Q1.2010 Depreciation, depletion and amortization $ 30   $ 31       $ 30   Total increase in working capital $ (4 ) $ (17 )     $ (15 ) Cash spent for capital expenditures $ (20 ) $ (14 )     $ (20 )   Segment Special Items Included in Net Contribution to Earnings (Pre-Tax) Q4.2010 Q1.2011     Q1.2010 Gain on sale of 82,000 acres of non-strategic timberlands $ -   $ 152       $ -     Segment Statistics         Q4.2010     Q1.2011     Q1.2010 Third Party NetSales and Revenue (millions) Logs:             West   $ 97   $ 110       $ 82   South     41     41         27   Canada     5     7         9   Total Logs     143     158         118   Pay as cut timber sales     8     8         8   Timberlands exchanges and dispositions     20     21         35   Higher and better use land sales     4     4         5   Minerals, oil and gas     14     14         15   Products from international operations     16     17         15   Other products     2     8         6     Total   $ 207   $ 230       $ 202   LogsThird Party SalesRealizations (per cubic meter) West   $ 95.30   $ 100.20       $ 84.17   South   $ 41.86   $ 41.22       $ 43.21   Canada   $ 33.84   $ 34.73       $ 34.02     International   $ 18.21   $ 18.61       $ 20.35   LogsThird Party SalesVolumes(cubic meters,thousands)   West     1,020     1,095         975   South     993     1,005         634   Canada     141     194         259   International     74     72         78     Total     2,228     2,366         1,946   LogsFee Depletion (cubic meters,thousands) West     1,290     1,611         1,431   South     2,116     2,180         2,140   International     79     98         92     Total     3,485         3,889         3,663       Weyerhaeuser CompanyWood Products SegmentQ1.2011 Analyst Package         Preliminary results, subject to audit   Segment Statement of Operations in millions Q4.2010 Q1.2011     Q1.2010   Trade sales and revenues (unaffiliated customers) $ 572 $ 624 $ 604 Intersegment sales   18     21         16   Total net sales and revenues590645620 Cost of products sold   613     630         616   Gross margin(23)154 Selling, general and administrative expenses 63 55 68 Research and development expenses 1 1 1 Charges for restructuring, closures and impairments 103 2 1 Other operating income, net   (1 )   (5 )       (46 ) Operating loss   (189)   (38)       (20) Interest income and other   1     2         1   Net contribution to earnings$(188)$(36)     $(19)   Selected Segment Items Q4.2010 Q1.2011     Q1.2010 Depreciation, depletion and amortization $ 43   $ 40       $ 45   Total decrease (increase) in working capital $ 40   $ (118 )     $ (134 ) Cash spent for capital expenditures $ (21 ) $ (6 )     $ (2 )   Segment Special Items Included in Net Contribution to Earnings (Pre-Tax) Q4.2010 Q1.2011     Q1.2010 Gain on sale of assets $ -   $ -       $ 44   Charges for restructuring, closures and impairments   (103 )   -         -   Total$(103)$-       $44     Segment Statistics in millions, except for third-party sales realizations   Q4.2010     Q1.2011     Q1.2010 Structural Lumber (board feet) Third Party Net Sales and Revenue   $ 241   $ 260       $ 241   Third Party Sales Realizations   $ 292.63   $ 315.26       $ 316.60   Third Party Sales Volumes     822     826         761     Production Volumes     785     893         801   Engineered SolidSection(cubic feet)   Third Party Net Sales and Revenue   $ 59   $ 62       $ 66   Third Party Sales Realizations   $ 1,853.91   $ 1,851.05       $ 1,718.25   Third Party Sales Volumes     3     3         4     Production Volumes     3     4         4   EngineeredI-joists(lineal feet)   Third Party Net Sales and Revenue   $ 35   $ 33       $ 48   Third Party Sales Realizations   $ 1,259.46   $ 1,266.51       $ 1,083.79   Third Party Sales Volumes     29     26         44     Production Volumes     26     30         41   Oriented StrandBoard(square feet 3/8')   Third Party Net Sales and Revenue   $ 72   $ 85       $ 66   Third Party Sales Realizations   $ 177.84   $ 192.16       $ 197.46   Third Party Sales Volumes     408     445         334     Production Volumes     429     494         378   Softwood Plywood(square feet 3/8')   Third Party Net Sales and Revenue   $ 15   $ 17       $ 16   Third Party Sales Realizations   $ 250.61   $ 263.83       $ 263.54   Third Party Sales Volumes     57     63         60     Production Volumes     43     53         48   Hardwood Lumber(square feet 3/8')   Third Party Net Sales and Revenue   $ 51   $ 58       $ 54   Third Party Sales Realizations   $ 833.75   $ 845.42       $ 814.00   Third Party Sales Volumes     61     69         67     Production Volumes     51         58         59               Weyerhaeuser CompanyCellulose Fibers SegmentQ1.2011 Analyst Package Preliminary results, subject to audit   Segment Statement of Operations in millions Q4.2010 Q1.2011     Q1.2010   Total net sales and revenues$511$506$410 Cost of products sold   356     400         367   Gross margin15510643 Selling, general and administrative expenses 21 22 20 Research and development expenses 2 2 2 Other operating income, net   (7 )   (5 )       (2 ) Operating income   139     87         23   Interest income and other   (1 )   (1 )       (4 ) Net contribution to earnings$138   $86       $19     Selected Segment Items Q4.2010 Q1.2011     Q1.2010 Depreciation, depletion and amortization $ 39   $ 36       $ 36   Total decrease (increase) in working capital $ 21   $ 21       $ (10 ) Cash spent for capital expenditures $ (46 ) $ (26 )     $ (35 )   Segment Statistics         Q4.2010     Q1.2011     Q1.2010 Pulp(air-dry metrictons)   Third Party Net Sales and Revenue (millions)   $ 402   $ 398       $ 321   Third Party Sales Realizations   $ 926.29   $ 912.12       $ 761.78   Third Party Sales Volumes (thousands)     434     436         422     Production Volumes (thousands)     453     437         437   Liquid PackagingBoard(tons)   Third Party Net Sales and Revenue (millions)   $ 88   $ 85       $ 71   Third Party Sales Realizations   $ 1,081.52   $ 1,148.29       $ 1,051.81   Third Party Sales Volumes (thousands)     81     74         67     Production Volumes (thousands)     84         67         69       Weyerhaeuser CompanyReal Estate SegmentQ1.2011 Analyst Package         Preliminary results, subject to audit   Segment Statement of Operations in millions Q4.2010 Q1.2011     Q1.2010   Total net sales and revenues$305$160$151 Cost of products sold   228     126         121   Gross margin773430 Selling, general and administrative expenses 45 35 34 Charges for restructuring, closures and impairments 17 1 1 Other operating (income) loss, net   (1 )   -         1   Operating income (loss)   16     (2)       (6) Interest income and other - 1 39 Impairments of investments and other related charges (3 ) - - Loss attributable to noncontrolling interests   -     -         (2 ) Net contribution to earnings$13   $(1)     $31     Selected Segment Items Q4.2010 Q1.2011     Q1.2010 Depreciation and amortization $ 4   $ 3       $ 3   Cash spent for capital expenditures $ (2 ) $ (1 )     $ (1 )   Segment Special Items Included in Net Contribution to Earnings (Pre-Tax) Q4.2010 Q1.2011     Q1.2010 Charges for restructuring, closures and impairments $ (20 ) $ -       $ -     Segment Statistics Q4.2010 Q1.2011     Q1.2010 Net sales and revenues:           Single-family housing $ 266   $ 152       $ 143   Land   25     7         7   Other   14     1         1   Total net sales and revenue $ 305   $ 160       $ 151             Single-family homes sold   385     535         620   Single-family homes closed   606     363         393   Single-family homes sold but not closed (backlog)   439     611         877   Single-family average price of homes closed (in thousands) $ 439   $ 419       $ 365   Single-family home gross margin - excluding impairments (1)   26.1 %   21.7 %       19.4 %   (1) Single-family gross margin excluding impairments equals revenue less cost of sales and period costs (other than impairments and deposit write-offs).             Weyerhaeuser CompanyCorporate & Other SegmentQ1.2011 Analyst Package Preliminary results, subject to audit   Segment Statement of Operations in millions Q4.2010 Q1.2011     Q1.2010   Trade sales and revenues (unaffiliated customers) $ 69 $ 58 $ 52 Intersegment sales   5     3         4   Total net sales and revenues746156 Cost of products sold   54     63         42   Gross margin20(2)14 Selling, general and administrative expenses 27 44 21 Research and development expenses - - 1 Charges for restructuring, closures and impairments 6 1 (1 ) Other operating (income) loss, net   (45 )   2         (13 ) Operating income (loss)   32     (49)       6   Interest income and other   9     8         6   Net contribution to earnings$41   $(41)     $12     Selected Segment Items Q4.2010 Q1.2011     Q1.2010 Depreciation, depletion and amortization $ 11   $ 13       $ 12   Total decrease (increase) in working capital $ 41   $ (82 )     $ 328   Cash spent for capital expenditures $ -   $ -       $ (1 ) Share-based compensation expense $ 8   $ 16       $ 3   Foreign exchange gains $ 4   $ 6       $ 9   Pension and postretirement credits (costs) retained by Corporate segment $ 19   $ (12 )     $ 16     Segment Special Items Included in Net Contribution to Earnings (Pre-Tax) Q4.2010 Q1.2011     Q1.2010 Charges for restructuring, closures and impairments $ (7 ) $ -       $ -   Gain on sale of railroads   46     -         -   Total$39   $-       $-     Corporate and Other includes results of our transportation operations, certain gains or charges that are not related to an individual operating segment and the portion of items such as share-based compensation, pension and postretirement costs, foreign exchange transaction gains and losses and other general and administrative expenses that are not allocated to the business segments. We sold our five short line railroads at the end of 2010 and transportation currently only consists of Westwood Shipping Lines. Weyerhaeuser CompanyMedia ? Bruce Amundson, 253-924-3047Analysts ? Kathryn McAuley, 253-924-2058