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Press release from Business Wire

Weyerhaeuser Reports Second Quarter Results

Friday, July 29, 2011

Weyerhaeuser Reports Second Quarter Results06:00 EDT Friday, July 29, 2011 FEDERAL WAY, Wash. (Business Wire) -- Weyerhaeuser Company (NYSE: WY) today reported net earnings of $10 million for the second quarter, or 2 cents per diluted share, on net sales of $1.8 billion. This compares with net earnings of $14 million on net sales of $1.8 billion for the same period last year. Earnings for the second quarter of 2011 include after-tax charges of $22 million for special items. Excluding these items, the company reported net earnings of $32 million, or 6 cents per diluted share. This compares with net earnings before special items of $42 million in the second quarter of 2010. Net cash provided by operations for the second quarter of 2011 was $116 million, compared with $189 million for the second quarter of 2010. The company's cash balance decreased by $582 million in the second quarter, primarily due to repayment of debt. Weyerhaeuser ended the quarter with $881 million in cash and cash equivalents. “We are confident that our ongoing efforts to sharpen our focus and reduce costs are positioning us to achieve our goal of generating superior sustainable returns for our shareholders,” said Dan Fulton, president and chief executive officer. “The recently announced agreements to sell our hardwoods and Westwood Shipping Lines operations demonstrate the focus we are placing on our strategic direction.” WEYERHAEUSER FINANCIAL HIGHLIGHTS                   (millions, except per share data)2Q 20111Q 20112Q 2010   Net sales From continuing operations $1,610 $1,422 $1,641 From discontinued operations $163 $156 $164 Total net sales $1,773 $1,578 $1,805   Net earnings $10 $99 $14 Weighted average shares outstanding, diluted 541 540 212 Earnings per diluted share $0.02 $0.18 $0.07   Net earnings before special items $32 $3 $42 Earnings per diluted share before special items $0.06 $0.00 $0.20   Net cash from operations $116 ($109) $189 Net change in cash and cash equivalents ($582) ($4) ($314) Cash and cash equivalents at end of period $881 $1,463 $1,846   Net sales from discontinued operations include the net sales of Weyerhaeuser's hardwoods and Westwood Shipping Lines businesses. These operations are reported as discontinued due to the expected sale of the businesses. Weyerhaeuser's outstanding shares increased substantially from the second 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)2Q 20111Q 2011Change Net sales $288 $230 $58 Contribution to pre-tax earnings before special items $112 $89 $23 Pre-tax gain from special items $0 $152 ($152) GAAP contribution to pre-tax earnings $112 $241 ($129)   2Q 2011 Performance – The segment's earnings before special items improved $23 million in the second quarter compared with the first. Fee harvest volumes rose, and average selling prices for western logs increased due to strong Chinese export demand through the first half of the quarter. These improvements were partially offset by higher fuel costs. First quarter results included a special item pre-tax gain of $152 million from the sale of 82,000 acres of non-strategic timberlands. Excluding that transaction, earnings from dispositions of non-strategic timberlands totaled $19 million in the first quarter, compared with $34 million in the second quarter. 3Q 2011 Outlook – Weyerhaeuser expects significantly lower earnings from the Timberlands segment in the third quarter. The company anticipates lower selling prices and harvest volumes in the West and seasonally higher silviculture and road expenses. The company also expects reduced earnings from dispositions of non-strategic timberlands. WOOD PRODUCTS                   FINANCIAL HIGHLIGHTS (millions)2Q 20111Q 2011Change Net sales $702 $624 $78 Charge to pre-tax earnings before special items ($52) ($36) ($16) Pre-tax charge from special items ($9) $0 ($9) GAAP charge to pre-tax earnings ($61) ($36) ($25)   2Q 2011 Performance –The segment's results before special items declined $16 million compared with the first quarter due to lower selling prices for lumber and oriented strand board and higher log costs. These factors were partially offset by improved sales volumes across nearly all product lines. Second quarter includes special charges of $9 million related to the expected sale of the hardwoods business. Second quarter results before special items include operating earnings of $1 million from that business, compared with breakeven results in the first quarter. 3Q 2011 Outlook – Excluding the hardwoods transaction, Weyerhaeuser anticipates a comparable loss from the segment in the third quarter. The company expects lower selling prices for lumber and oriented strand board and lower sales volumes across most product lines, offset by lower log costs and modest cost improvements. CELLULOSE FIBERS               FINANCIAL HIGHLIGHTS (millions)2Q 20111Q 2011Change Net sales $526 $506 $20 Contribution to pre-tax earnings before special items $80 $86 ($6) Pre-tax gain from special items $0 $0 $0 GAAP contribution to pre-tax earnings $80 $86 ($6)   2Q 2011 Performance – Second quarter earnings declined $6 million compared with first quarter. Maintenance costs increased and production declined as the segment completed four planned annual maintenance outages, compared with two in the first quarter. This was partially offset by improved average selling prices. Sales volumes declined slightly, as market demand weakened late in the second quarter. 3Q 2011 Outlook – Weyerhaeuser expects significantly higher earnings from the Cellulose Fibers segment in the third quarter. The company anticipates substantially lower maintenance costs and increased production, partially offset by lower selling prices for pulp. REAL ESTATE                   FINANCIAL HIGHLIGHTS (millions)2Q 20111Q 2011Change Net sales $191 $160 $31 Contribution (charge) to pre-tax earnings before special items $8 ($1) $9 Pre-tax gain from special items $0 $0 $0 GAAP contribution (charge) to pre-tax earnings $8 ($1) $9 2Q 2011 Performance – The segment's earnings increased $9 million compared with the first quarter, primarily due to seasonally higher home sale closings. Home sale closings increased 26 percent compared with the first quarter to 459 single-family homes. Average margins on homes closed improved slightly, but average prices declined due to mix. Second quarter earnings include $4 million from the sale of land and lots, compared with $1 million in the first quarter. 3Q 2011 Outlook – Weyerhaeuser anticipates slightly higher earnings from single-family homebuilding operations in the third quarter due to a seasonal increase in home sale closings. OTHER ITEMS Interest expense for the second quarter includes a pre-tax special charge of $26 million associated with the early extinguishment of approximately $518 million of long-term debt due March 2012. Second quarter results for the Corporate and Other segment include net pre-tax charges of $11 million for discontinued operations, including operating earnings of $2 million for Westwood Shipping Lines and charges of $13 million for other operations. First quarter results include operating earnings of $2 million for Westwood Shipping Lines. 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 release second quarter 2011 results on July 29 before the market opens. The company will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on July 29 to discuss second quarter results. To access the conference call from within North America, dial (877) 296-9413 (access code – 29869015) at least 15 minutes prior to the call. Those calling from outside North America should dial 1-(706) 679-2458 (access code – 29869015). Replays will be available for one week at (800) 642-1687 (access code – 29869015) from within North America and at 1-(706) 645-9291 (access code – 29869015) 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 “Q2 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 third quarter of 2011, including lower selling prices and harvest volumes in the West, seasonally higher silviculture and road expenses, reduced earnings from dispositions of non-strategic timberlands, and significantly lower earnings in the Timberlands segment; lower selling prices for lumber and oriented strand board and lower sales volumes across most products lines, offset by lower log costs and modest cost improvements, and a comparable loss in the Wood Products segment excluding special items; substantially lower maintenance costs and improved production, partially offset by lower selling prices for pulp, somewhat higher shipment volumes, seasonally lower energy costs, and significantly higher earnings in the Cellulose Fiber segment; and slightly higher earnings from single-family homebuilding operations and a seasonal increase in home sale closings, continued strong margins, and flat to slightly lower selling prices 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 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 tsunami 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 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 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 CompanyQ2.2011 Analyst Package Preliminary results, subject to audit   Consolidated Statement of Operations               in millions Q1Q2Year-to-dateMarch 31,June 30,     June 30,June 30,     June 30,20112011201020112010Net sales and revenues$1,422$1,610$1,641$3,032$2,924 Cost of products sold 1,177   1,343   1,314   2,520   2,416   Gross margin245267327512508 Selling, general and administrative expenses 172 145 162 317 318 Research and development expenses 7 7 8 14 16 Charges for restructuring, closures and impairments 4 7 4 11 6 Other operating income, net (174 ) (19 ) (2 ) (193 ) (72 ) Operating income236127155363240 Interest income and other 11 9 12 20 54 Interest expense, net of capitalized interest (93 ) (117 ) (155 ) (210 ) (261 ) Earnings from continuing operations before income taxes 154 19 12 173 33 Income taxes (56 ) 4   (4 ) (52 ) (42 ) Earnings (loss) from continuing operations 98 23 8 121 (9 ) Earnings (loss) from discontinued operations, net of income taxes 1   (13 ) 6   (12 ) 5   Net earnings (loss) 99 10 14 109 (4 ) Less: net earnings attributable to noncontrolling interests —   —   —   —   (2 ) Net earnings (loss) attributable to Weyerhaeuser common shareholders$99   $10   $14   $109   $(6)   Per Share Information   Q1Q2Year-to-dateMarch 31,June 30,June 30,June 30,June 30,20112011201020112010 Earnings (loss) per share attributable to Weyerhaeuser common shareholders, basic and diluted: Continuing operations $ 0.18 $ 0.04 $ 0.04 $ 0.22 $ (0.05 ) Discontinued operations —   (0.02 ) 0.03   (0.02 ) 0.02   Net earnings (loss) per share $ 0.18   $ 0.02   $ 0.07   $ 0.20   $ (0.03 ) Dividends paid per share $ 0.15 $ 0.15 $ 0.05 $ 0.30 $ 0.10 Weighted average shares outstanding (in thousands): Basic 537,140 538,599 211,600 537,873 211,521 Diluted 540,476 541,095 212,103 540,790 211,521 Common shares outstanding at end of period (in thousands) 538,408 538,640 211,609 538,640 211,609   Weyerhaeuser CompanyQ2.2011 Analyst Package Preliminary results, subject to audit   Consolidated Balance Sheet               in millions March 31,June 30,December 31,201120112010ASSETSForest Products: Current assets: Cash and cash equivalents $ 1,459 $ 877 $ 1,466 Receivables, less allowances 505 533 451 Inventories 544 513 478 Prepaid expenses 85 115 81 Deferred tax assets 155   167   113 Total current assets 2,748 2,205 2,589 Property and equipment, net 3,151 3,083 3,217 Construction in progress 149 137 123 Timber and timberlands at cost, less depletion charged to disposals 4,003 3,987 4,035 Investments in and advances to equity affiliates 192 191 194 Goodwill 40 40 40 Other assets 424 511 363 Restricted assets held by special purpose entities 914   915   915 11,621   11,069   11,476 Real Estate: Cash and cash equivalents 4 4 1 Receivables, less allowances 54 36 51 Real estate in process of development and for sale 515 535 517 Land being processed for development 978 988 974 Investments in and advances to equity affiliates 15 15 16 Deferred tax assets 266 263 266 Other assets 119 121 120 Consolidated assets not owned 8   8   8 1,959   1,970   1,953 Total assets$13,580   $13,039   $13,429   LIABILITIES AND EQUITYForest Products: Current liabilities: Accounts payable $ 359 $ 326 $ 340 Accrued liabilities 686   712   734 Total current liabilities 1,045 1,038 1,074 Long-term debt 4,710 4,192 4,710 Deferred income taxes 485 533 366 Deferred pension and other postretirement benefits 908 835 930 Other liabilities 405 412 393 Liabilities (nonrecourse to Weyerhaeuser) held by special purpose entities 771   774   772 8,324   7,784   8,245 Real Estate: Long-term debt 348 318 350 Other liabilities 196 193 212 Consolidated liabilities not owned 8   8   8 552   519   570 Total liabilities 8,876   8,303   8,815 Equity: Total Weyerhaeuser shareholders' interest 4,702 4,734 4,612 Noncontrolling interests 2   2   2 Total equity 4,704   4,736   4,614 Total liabilities and equity$13,580   $13,039   $13,429   Weyerhaeuser CompanyQ2.2011 Analyst Package Preliminary results, subject to audit   Consolidated Statement of Cash Flows               in millions Q1Q2Year-to-dateMarch 31,June 30,     June 30,June 30,     June 30,20112011201020112010Cash flows from operations: Net earnings (loss) $ 99 $ 10 $ 14 $ 109 $ (4 ) Noncash charges (credits) to income (loss): Depreciation, depletion and amortization 123 120 126 243 252 Deferred income taxes, net 39 (13 ) 56 26 90 Pension and other postretirement benefits 24 19 (10 ) 43 (11 ) Share-based compensation expense 14 3 6 17 12 Equity in loss of equity affiliates 2 1 — 3 3 Charges for impairment of assets 1 11 1 12 3 Net gains on dispositions of assets and operations (156 ) (29 ) (10 ) (185 ) (93 ) Foreign exchange transaction gains (7 ) (1 ) 10 (8 ) — Change in: Receivables less allowances (59 ) (10 ) (28 ) (69 ) (115 ) Receivable for taxes 1 — (17 ) 1 551 Inventories (66 ) 35 40 (31 ) (25 ) Real estate and land (2 ) (32 ) (1 ) (34 ) (37 ) Prepaid expenses (10 ) (4 ) 6 (14 ) (7 ) Accounts payable and accrued liabilities (78 ) 3 (6 ) (75 ) (53 ) Deposits on land positions and other assets — (4 ) (6 ) (4 ) (3 ) Pension contributions (1 ) (4 ) (6 ) (5 ) (138 ) Other (33 ) 11   14   (22 ) (58 ) Net cash from operations(109)116   189   7   367     Cash flows from investing activities: Property and equipment (35 ) (39 ) (32 ) (74 ) (78 ) Timberlands reforestation (12 ) (7 ) (7 ) (19 ) (20 ) Redemption of short-term investments — — — — 47 Proceeds from sale of assets and operations 193 3 15 196 130 Repayments from pension trust — — 96 — 146 Other 5   (10 ) (8 ) (5 ) (11 ) Cash from investing activities151   (53)64   98   214     Cash flows from financing activities: Notes, commercial paper borrowings and revolving credit facilities, net — — — — (3 ) Cash dividends (81 ) (80 ) (10 ) (161 ) (21 ) Change in book overdrafts 3 (1 ) (8 ) 2 (12 ) Payments on debt (2 ) (548 ) (548 ) (550 ) (565 ) Exercises of stock options 34 3 — 37 — Other —   (19 ) (1 ) (19 ) (3 ) Cash from financing activities(46)(645)(567)(691)(604)   Net change in cash and cash equivalents (4 ) (582 ) (314 ) (586 ) (23 ) Cash and cash equivalents at beginning of period 1,467   1,463   2,160   1,467   1,869   Cash and cash equivalents at end of period $ 1,463   $ 881   $ 1,846   $ 881   $ 1,846   Cash paid (received) during the year for: Interest, net of amount capitalized $ 156 $ 91 $ 120 $ 247 $ 273 Income taxes $ 2 $ 13 $ (1 ) $ 15 $ (445 )   Weyerhaeuser Company               Total Company StatisticsQ2.2011 Analyst Package Preliminary results, subject to audit   Special Items Included in Net Earnings   in millions Q1Q2Year-to-dateMarch 31,June 30,     June 30,June 30,     June 30,20112011201020112010Net earnings (loss)$99$10$14$109$(6) Income tax adjustments — — — — 31 Gain on sale of wood products assets — — (5 ) — (31 ) Loss on early extinguishment of debt — 16 33 16 33 Gain on sale of 82,000 acres of non-strategic timberlands (96 ) — — (96 ) — Charges for impairments —   6   —   6   —   Net earnings before special items$3   $32   $42   $35   $27     Q1Q2Year-to-dateMarch 31,June 30,June 30,June 30,June 30,20112011201020112010Net earnings (loss) per diluted share$0.18$0.02$0.07$0.20$(0.03) Income tax adjustments — — — — 0.15 Gain on sale of wood products assets — — (0.03 ) — (0.15 ) Loss on early extinguishment of debt — 0.03 0.16 0.03 0.16 Gain on sale of 82,000 acres of non-strategic timberlands (0.18 ) — — (0.18 ) — Charges for impairments —   0.01   —   0.01   —   Net earnings before special items per diluted share$—   $0.06   $0.20   $0.06   $0.13       Selected Total Company Items     in millions Q1Q2Year-to-dateMarch 31,June 30,June 30,June 30,June 30,20112011201020112010 Depreciation, depletion and amortization: Cost of products sold $ 107 $ 107 $ 109 $ 214 $ 219 Selling, general and administrative expenses 16   13   17   29   33   Total depreciation, depletion and amortization $ 123   $ 120   $ 126   $ 243   $ 252     Pension and postretirement credits (costs): Pension and postretirement costs allocated to business segments $ (11 ) $ (16 ) $ (12 ) $ (27 ) $ (24 ) Pension and postretirement credits (costs) retained by Corporate segment (12 ) (3 ) 22   (15 ) 38   Total company pension and postretirement credits (costs) $ (23 ) $ (19 ) $ 10   $ (42 ) $ 14     Total decrease (increase) in Forest Products working capital $ (192 ) $ (21 ) $ 159 $ (213 ) $ 564 Cash spent for capital expenditures $ (47 ) $ (46 ) $ (39 ) $ (93 ) $ (98 )   Weyerhaeuser Company       Timberlands SegmentQ2.2011 Analyst Package Preliminary results, subject to audit   Segment Statement of Operations   in millions Q1.2011     Q2.2011     Q2.2010     YTD.2011     YTD.2010 Trade sales and revenues (unaffiliated customers) $ 230 $ 288 $ 225 $ 518 $ 427 Intersegment sales 191   134   123   325   294   Total net sales and revenues421422348843721 Cost of products sold 320   296   260   616   537   Gross margin10112688227184 Selling, general and administrative expenses 23 24 23 47 43 Research and development expenses 4 4 5 8 9 Charges for restructuring, closures and impairments — — — — 1   Other operating income, net (166 ) (13 ) (9 ) (179 ) (19 ) Operating income240   111   69   351   150   Interest income and other 1   1   1   2   1   Net contribution to earnings$241   $112   $70   $353   $151     Selected Segment Items   Q1.2011 Q2.2011 Q2.2010 YTD.2011 YTD.2010 Depreciation, depletion and amortization $ 31 $ 35 $ 28 $ 66 $ 58 Total increase in working capital $ (16 ) $ (40 ) $ (12 ) $ (56 ) $ (24 ) Cash spent for capital expenditures $ (14 ) $ (14 ) $ (15 ) $ (28 ) $ (35 )   Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)   Q1.2011 Q2.2011 Q2.2010 YTD.2011 YTD.2010 Gain on sale of 82,000 acres of non-strategic timberlands $ 152 $ — $ — $ 152 $ —   Segment Statistics   Q1.2011 Q2.2011 Q2.2010 YTD.2011 YTD.2010 Third Party NetSales andRevenue(millions)   Logs: West $ 110 $ 152 $ 125 $ 262 $ 207 South 41 49 37 90 64 Canada 7   1   —   8   9   Total Logs 158 202 162 360 280 Pay as cut timber sales 8 8 9 16 17 Timberlands exchanges and dispositions 21 39 13 60 48 Higher and better use land sales 4 2 7 6 12 Minerals, oil and gas 14 15 16 29 31 Products from international operations 17 21 17 38 32 Other products 8   1   1   9   7   Total $ 230   $ 288   $ 225   $ 518   $ 427   LogsThird Party SalesRealizations(per cubic meter) West $ 100.20 $ 109.42 $ 97.92 $ 105.36 $ 91.96 South $ 41.22 $ 40.59 $ 44.38 $ 40.88 $ 43.87 Canada $ 34.73 $ 42.79 $ 30.05 $ 35.55 $ 33.81 International $ 18.61 $ 21.41 $ 19.33 $ 20.08 $ 19.87 LogsThird Party SalesVolumes(cubic meters,thousands) West 1,095 1,391 1,276 2,486 2,251 South 1,005 1,211 827 2,216 1,461 Canada 194 23 15 217 274 International 72   79   68   151   146   Total 2,366   2,704   2,186   5,070   4,132   LogsFee Depletion(cubic meters,thousands) West 1,611 1,747 1,404 3,358 2,835 South 2,180 2,355 1,881 4,535 4,021 International 98   221   89   319   181   Total 3,889   4,323   3,374   8,212   7,037     Weyerhaeuser Company       Wood Products SegmentQ2.2011 Analyst Package Preliminary results, subject to audit   Segment Statement of Operations   in millions Q1.2011     Q2.2011     Q2.2010     YTD.2011     YTD.2010 Trade sales and revenues (unaffiliated customers) $ 624 $ 702 $ 789 $ 1,326 $ 1,393 Intersegment sales 21     24     20     45     36   Total net sales and revenues6457268091,3711,429 Cost of products sold 630     723     743     1,353     1,359   Gross margin153661870 Selling, general and administrative expenses 55 54 72 109 140 Research and development expenses 1 1 2 2 3 Charges for restructuring, closures and impairments 2 13 1 15 2 Other operating income, net (5 )   (4 )   (5 )   (9 )   (51 ) Operating loss(38)   (61)   (4)   (99)   (24) Interest income and other 2     —     1     2     2   Net contribution to earnings$(36)$(61)$(3)$(97)$(22)   Selected Segment Items   Q1.2011 Q2.2011 Q2.2010 YTD.2011 YTD.2010 Depreciation, depletion and amortization $ 40 $ 37 $ 45 $ 77 $ 90 Total decrease (increase) in working capital $ (117 ) $ 45 $ 51 $ (72 ) $ (83 ) Cash spent for capital expenditures $ (6 ) $ (8 ) $ (5 ) $ (14 ) $ (7 )   Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)   Q1.2011 Q2.2011 Q2.2010 YTD.2011 YTD.2010 Gain on sale of assets $ — $ — $ 8 $ — $ 52 Charges for impairments —     9     —     9     —   Total$—   $9   $8   $9   $52     Segment Statistics   in millions, except for third-party sales realizations Q1.2011 Q2.2011 Q2.2010   YTD.2011 YTD.2010 Structural Lumber(board feet)   Third Party Net Sales and Revenue $ 260 $ 290 $ 308 $ 550 $ 549 Third Party Sales Realizations $ 315.26 $ 300.84 $ 347.89 $ 307.50 $ 333.42 Third Party Sales Volumes 826 963 884 1,788 1,645 Production Volumes 893 903 846 1,796 1,647 Engineered SolidSection(cubic feet) Third Party Net Sales and Revenue $ 62 $ 71 $ 79 $ 133 $ 145 Third Party Sales Realizations $ 1,851.05 $ 1,904.83 $ 1,784.77 $ 1,879.54 $ 1,749.96 Third Party Sales Volumes 3 4 4 7 8 Production Volumes 4 3 4 7 8 EngineeredI-joists(lineal feet) Third Party Net Sales and Revenue $ 33 $ 48 $ 49 $ 81 $ 97 Third Party Sales Realizations $ 1,266.51 $ 1,258.14 $ 1,178.95 $ 1,261.55 $ 1,133.90 Third Party Sales Volumes 26 38 41 64 85 Production Volumes 30 34 41 64 82 Oriented StrandBoard(square feet 3/8') Third Party Net Sales and Revenue $ 85 $ 89 $ 116 $ 174 $ 182 Third Party Sales Realizations $ 192.16 $ 178.43 $ 266.28 $ 184.91 $ 236.50 Third Party Sales Volumes 445 498 437 943 771 Production Volumes 494 518 468 1,012 846 Softwood Plywood(square feet 3/8') Third Party Net Sales and Revenue $ 17 $ 16 $ 23 $ 33 $ 39 Third Party Sales Realizations $ 263.83 $ 271.01 $ 312.95 $ 267.37 $ 291.15 Third Party Sales Volumes 63 61 75 124 135 Production Volumes 53 48 64 101 112 Hardwood Lumber(board feet) Third Party Net Sales and Revenue $ 58 $ 63 $ 64 $ 121 $ 118 Third Party Sales Realizations $ 845.42 $ 858.51 $ 833.30 $ 852.15 $ 824.30 Third Party Sales Volumes 69 73 76 142 142 Production Volumes 58 62 61 120 120   Weyerhaeuser Company       Cellulose Fibers SegmentQ2.2011 Analyst Package Preliminary results, subject to audit   Segment Statement of Operations   in millions Q1.2011     Q2.2011     Q2.2010     YTD.2011     YTD.2010 Total net sales and revenues$506$526$468$1,032$878 Cost of products sold   400     422     375     822     742   Gross margin10610493210136 Selling, general and administrative expenses 22 24 20 46 40 Research and development expenses 2 2 2 4 4 Other operating income, net   (5 )   (3 )   (5 )   (8 )   (7 ) Operating income   87     81     76     168     99   Interest income and other   (1 )   (1 )   (2 )   (2 )   (6 ) Net contribution to earnings$86   $80   $74   $166   $93     Selected Segment Items   Q1.2011 Q2.2011 Q2.2010 YTD.2011 YTD.2010 Depreciation, depletion and amortization $ 36 $ 35 $ 36 $ 71 $ 72 Total decrease (increase) in working capital $ 20 $ (32 ) $ (24 ) $ (12 ) $ (34 ) Cash spent for capital expenditures $ (26 ) $ (23 ) $ (19 ) $ (49 ) $ (54 )   Segment Statistics   Q1.2011 Q2.2011 Q2.2010   YTD.2011 YTD.2010 Pulp(air-dry metrictons)   Third Party Net Sales and Revenue (millions) $ 398 $ 409 $ 354 $ 807 $ 675 Third Party Sales Realizations $ 912.12 $ 960.04 $ 856.22 $ 935.81 $ 808.56 Third Party Sales Volumes (thousands) 436 426 413 862 835 Production Volumes (thousands) 437 410 414 847 851 LiquidPackagingBoard(tons) Third Party Net Sales and Revenue (millions) $ 85 $ 93 $ 90 $ 178 $ 161 Third Party Sales Realizations $ 1,148.29 $ 1,194.46 $ 1,091.14 $ 1,171.86 $ 1,073.47 Third Party Sales Volumes (thousands) 74 77 83 151 150 Production Volumes (thousands) 67 80 81 147 150   Weyerhaeuser Company       Real Estate SegmentQ2.2011 Analyst Package Preliminary results, subject to audit   Segment Statement of Operations   in millions Q1.2011     Q2.2011     Q2.2010     YTD.2011     YTD.2010 Total net sales and revenues$160$191$257$351$408 Cost of products sold 126   147   189   273   310   Gross margin3444687898 Selling, general and administrative expenses 35 36 41 71 75 Charges for restructuring, closures and impairments 1 1 2 2 3 Other operating costs, net —   —   1   —   2   Operating income (loss)(2)7   24   5   18   Interest income and other 1 1 3 2 42 Loss attributable to noncontrolling interests —   —   —   —   (2 ) Net contribution to earnings$(1)$8   $27   $7   $58     Selected Segment Items   Q1.2011 Q2.2011 Q2.2010 YTD.2011 YTD.2010 Depreciation and amortization $ 3 $ 3 $ 5 $ 6 $ 8 Cash spent for capital expenditures $ (1 ) $ — $ — $ (1 ) $ (1 )   Segment Statistics   Q1.2011 Q2.2011 Q2.2010 YTD.2011 YTD.2010 Net sales and revenues: Single-family housing $ 152 $ 180 $ 233 $ 332 $ 376 Land 7 11 23 18 30 Other 1   —   1   1   2   Total net sales and revenue $ 160   $ 191   $ 257   $ 351   $ 408   Single-family homes sold 535 521 491 1,056 1,111 Single-family homes closed 363 459 625 822 1,018 Single-family homes sold but not closed (backlog) 611 673 743 673 743 Single-family average price of homes closed (in thousands) $ 419 $ 391 $ 371 $ 404 $ 369 Single-family home gross margin - excluding impairments (1) 21.7 % 22.4 % 23.9 % 22.0 % 22.2 %   (1) Single-family gross margin excluding impairments equals revenue less cost of sales and period costs (other than impairments and deposit write-offs).   Weyerhaeuser Company       Corporate & Other SegmentQ2.2011 Analyst Package Preliminary results, subject to audit   Segment Statement of Operations   in millions Q1.2011     Q2.2011     Q2.2010     YTD.2011     YTD.2010 Trade sales and revenues (unaffiliated customers) $ 58 $ 66 $ 66 $ 124 $ 118 Intersegment sales 3   5   5   8   9   Total net sales and revenues617171132127 Cost of products sold 63   71   48   134   90   Gross margin(2)—23(2)37 Selling, general and administrative expenses 44 14 13 58 34 Research and development expenses — — (1 ) — — Charges for restructuring, closures and impairments 1 2 1 3 — Other operating costs (income), net (1) 2   14   11   16   (2 ) Operating income (loss)(49)(30)(1)(79)5   Interest income and other 8   8   9   16   15   Net contribution to earnings$(41)$(22)$8   $(63)$20     (1) Other operating costs for second quarter and year-to-date 2011 include charges of $13 million related to businesses we have divested in prior years and are included in discontinued operations.   Selected Segment Items   Q1.2011 Q2.2011 Q2.2010 YTD.2011 YTD.2010 Depreciation, depletion and amortization $ 13 $ 10 $ 12 $ 23 $ 24 Total decrease (increase) in working capital $ (79 ) $ 6 $ 144 $ 73 $ 705 Cash spent for capital expenditures $ — $ (1 ) $ — $ (1 ) $ (1 ) Share-based compensation expense (income) $ 16 $ (5 ) $ (4 ) $ 11 $ (1 ) Foreign exchange gains (losses) $ 6 $ 1 $ (8 ) $ 7 $ 1 Pension and postretirement credits (costs) retained by Corporate segment $ (12 ) $ (3 ) $ 22 $ (15 ) $ 38   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. We entered into an agreement to sell Westwood Shipping Lines, our last transportation business, in a transaction that is subject to regulatory approval and is expected to close in the third quarter. Weyerhaeuser CompanyMedia ? Bruce Amundson, 253-924-3047Analysts ? Kathryn McAuley, 253-924-2058