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Press release from PR Newswire

Weyerhaeuser Reports Second Quarter Results

Friday, July 27, 2012

Weyerhaeuser Reports Second Quarter Results03:01 EDT Friday, July 27, 2012FEDERAL WAY, Wash., July 27, 2012 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported net earnings of $84 million for the second quarter, or 16 cents per diluted share, on net sales of $1.8 billion. This compares with net earnings of $10 million on net sales from continuing operations of $1.6 billion for the same period last year. (Logo:  http://photos.prnewswire.com/prnh/20120111/AQ34535LOGO) Earnings for the second quarter of 2012 include after-tax gains of $37 million from special items. Excluding these items, the company reported net earnings of $47 million, or 9 cents per diluted share. This compares with net earnings before special items of $32 million, or 6 cents per diluted share, in the second quarter of 2011. "We are seeing signs of a rebound in the U.S. housing market, and as markets strengthen, the operational improvements within our Wood Products business are yielding clear results," said Dan Fulton, president and chief executive officer. "Our ongoing work to improve performance across all businesses is positioning us to capture the full benefit of the market recovery as it unfolds."WEYERHAEUSER FINANCIAL HIGHLIGHTS201220122011(millions, except per share data)1Q2Q2QNet sales from continuing operations$1,494$1,793$1,610Net earnings (1)$41$84$10Weighted average shares outstanding, diluted540540541Earnings per diluted share (1)$0.08$0.16$0.02Net earnings before special items$9$47$32Earnings per diluted share before special items$0.02$0.09$0.06Net cash from operations($60)$267$114Net change in cash and cash equivalents($225)$133($582)Cash and cash equivalents at end of period$728$861$881(1) The second quarter of 2011 included a net loss of $13 million from discontinued operations, or ($0.02) per diluted share, on net sales of $163 million. Discontinued operations include Weyerhaeuser's hardwoods and Westwood Shipping Lines businesses, which were sold in the third quarter of 2011.Weyerhaeuser began reporting elimination of intersegment profit on inventory and the LIFO reserve as part of Unallocated Items during second quarter 2012. Previously these company-level adjustments were recorded in the business segments. This change provides a better understanding of business segment operating results. For consistency, segment contributions to pre-tax earnings for prior periods have been adjusted to classify these amounts as part of Unallocated Items. There was no change to Weyerhaeuser's consolidated net earnings.TIMBERLANDS FINANCIAL HIGHLIGHTS (millions)1Q 20122Q 2012ChangeNet sales$250$262$12Contribution to pre-tax earnings$70$77$72Q 2012 Performance - The segment's earnings increased $7 million compared with the first quarter, primarily due to seasonally higher fee harvest in the West and South and increased demand for domestic and export logs. Average selling prices for export logs declined, and domestic prices for Western and Southern logs rose slightly.3Q 2012 Outlook - Weyerhaeuser expects comparable earnings from the Timberlands segment in the third quarter. The company expects higher earnings from the disposition of non-strategic timberlands, partially offset by lower domestic selling prices for Western logs and a decline in Southern log price realizations due to mix.WOOD PRODUCTS FINANCIAL HIGHLIGHTS (millions)1Q 20122Q 2012ChangeNet sales$634$776$142Contribution (charge) to pre-tax earnings before special items(13)30$43Pre-tax special items?66GAAP contribution (charge) to pre-tax earnings($13)$36$492Q 2012 Performance - Results before special items improved $43 million compared with the first quarter, primarily due to higher selling prices for lumber and oriented strand board and operational improvements. Lumber prices increased 13 percent, and prices for oriented strand board improved 9 percent. Sales volumes increased substantially.Special items for the second quarter include a $6 million pre-tax gain on the sale of property.3Q 2012 Outlook - Weyerhaeuser anticipates lower earnings from the Wood Products segment in the third quarter. The company expects comparable sales volumes for most products and seasonally lower selling prices for lumber.CELLULOSE FIBERS FINANCIAL HIGHLIGHTS (millions)1Q 20122Q 2012ChangeNet sales$473$459($14)Contribution to pre-tax earnings$48$36($12)2Q 2012 Performance - The segment's earnings declined $12 million. Average selling prices for pulp were approximately flat compared with first quarter. Planned maintenance costs increased and sales volumes declined due to timing of shipments and reduced pulp production resulting from operational issues experienced during the quarter. First and second quarter each included two scheduled annual maintenance outages.3Q 2012 Outlook - Weyerhaeuser expects significantly higher earnings from the Cellulose Fibers segment in the third quarter. The company anticipates improved productivity, lower annual maintenance expense, and reduced chemical, energy and fiber costs, partially offset by slightly lower selling prices for pulp.REAL ESTATE FINANCIAL HIGHLIGHTS (millions)1Q 20122Q 2012ChangeNet sales$137$296$159Contribution (charge) to pre-tax earnings($8)$15$232Q 2012 Performance - The segment's earnings improved $23 million compared with the first quarter. Home closings increased seasonally to 508 single-family homes, and average margins on homes closed improved to nearly 20 percent due to mix. Second quarter results include earnings of $12 million from the sale of land and lots, compared with $1 million from the sale of lots in the first quarter. At the end of the second quarter the backlog of homes sold, but not closed, totaled 1,033 units, a 53 percent increase compared with one year ago.3Q 2012 Outlook - Weyerhaeuser expects slightly higher earnings from single-family homebuilding operations in the third quarter. The company anticipates seasonally higher home closings, partially offset by slightly lower average selling prices due to mix and slightly higher selling expenses due to the additional closing volume.OTHER ITEMSSpecial items for the second quarter include a pre-tax gain of $51 million from postretirement plan amendments. Weyerhaeuser expects no future gains related to these benefit changes, which were effective June 30, 2012.ABOUT WEYERHAEUSERWeyerhaeuser Company, one of the world's largest forest products companies, began operations in 1900. We grow and harvest trees, build homes and make a range of forest products essential to everyday lives. We manage our timberland on a sustainable basis in compliance with internationally recognized forestry standards. At the end of 2011, we employed approximately 12,800 employees in 11 countries. We have customers worldwide and generated $6.2 billion in sales from continuing operations in 2011. Our stock trades on the New York Stock exchange under the symbol WY. Learn more at www.weyerhaeuser.com.EARNINGS CALL INFORMATIONWeyerhaeuser will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on July 27 to discuss second quarter results. To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on July 27.To join the conference call from within North America, dial 877-296-9413 (access code ? 41406958) at least 15 minutes prior to the call. Those calling from outside North America should dial 706-679-2458 (access code ? 41406958). Replays will be available for one week at 855-859-2056 (access code ? 41406958) from within North America and at 404-537-3406 (access code ? 41406958) from outside North America.The webcast is available to both institutional and individual investors through the Thomson StreetEvents Network. Individual investors can listen to the call at www.fulldisclosure.com, Thomson's individual investor portal. Institutional investors can access the call via Thomson's password-protected site at www.streetevents.com.FORWARD LOOKING STATEMENTSThis 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 for the third quarter of 2012, including slightly lower export log realizations, lower domestic selling prices for Western logs, somewhat lower Southern log price realizations, higher earnings from the disposition of non-strategic timberlands, and comparable earnings from the Timberlands segment; flat to slightly lower sales volumes, seasonally softer sales realizations, increased log costs in Canada, flat log costs in the South, declining log costs in the West, and solidly profitable results from the Wood Products segment; weaker selling prices for pulp, higher pulp sales volumes, improved productivity, lower annual maintenance expense, reduced chemical and energy and fiber costs, slightly higher freight expense, and significantly higher earnings from the Cellulose Fibers segment; and higher home closing volume, slightly lower average selling prices, gross margins of approximately 20 percent, increased selling expenses, and increased earnings from single-family homebuilding operations in the Real Estate segment.Major risks, uncertainties and assumptions that affect the company's businesses and may cause actual results to differ from these forward-looking statements, include, but are not limited to:the effect of general economic conditions, including employment rates, housing starts, interest rate levels, availability of financing for home mortgages, and strength of the U.S. dollar; market demand for the company's products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions; performance of the company's manufacturing operations, including maintenance requirements; the successful execution of internal performance plans, including restructurings and cost reduction initiatives; the level of competition from domestic and foreign producers; the effect of weather; the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters; raw material prices; energy prices; transportation costs; federal tax policies; the effect of forestry, land use, environmental and other governmental regulations; legal proceedings; performance of pension fund investments and related derivatives; the effect of timing of retirements and changes in the market price of company stock on charges for stock-based compensation; changes in accounting principles; and other factors described under "Risk Factors" in the Company's annual report on Form 10-K and quarterly reports on Form 10-Q.The company also is a large exporter and is affected by changes in economic activity in Europe and Asia, particularly Japan and China. It is affected by changes in currency exchange rates, particularly the relative value of the U.S. dollar to the euro and the Canadian dollar, and the relative value of the euro and the yen. Restrictions on international trade or tariffs imposed on imports also may affect the company.For more information contact:Analysts - Kathryn McAuley (253) 924-2058Media - Anthony Chavez (253) 924-7148Exhibit 99.2Weyerhaeuser CompanyQ2.2012 Analyst PackagePreliminary results, subject to auditConsolidated Statement of Operationsin millionsQ1Q2Year-to-dateMarch 31, 2012June 30, 2012June 30, 2011June 30, 2012June 30, 2011Net sales and revenues$             1,494$         1,793$         1,610$         3,287$         3,032Cost of products sold1,2901,5161,3432,8062,520Gross margin204277267481512Selling, general and administrative expenses150142145292317Research and development expenses7871514Charges for restructuring, closures and impairments12471611Other operating income, net(66)(53)(19)(119)(193)Operating income101176127277363Interest income and other121192320Interest expense, net of capitalized interest(87)(86)(117)(173)(210)Earnings from continuing operations before income taxes2610119127173Income taxes15(17)4(2)(52)Earnings from continuing operations418423125121Loss from discontinued operations, net of income taxes--(13)-(12)Net earnings attributable to Weyerhaeuser common shareholders$                  41$               84$               10$             125$             109Per Share InformationQ1Q2Year-to-dateMarch 31, 2012June 30, 2012June 30, 2011June 30, 2012June 30, 2011Earnings (loss) per share attributable to Weyerhaeuser common shareholders, basic and diluted:Continuing operations$                0.08$             0.16$             0.04$             0.23$             0.22Discontinued operations--(0.02)-(0.02)Net earnings per share$                0.08$             0.16$             0.02$             0.23$             0.20Dividends paid per share$                0.15$             0.15$             0.15$             0.30$             0.30Weighted average shares outstanding (in thousands):Basic537,368537,966538,599537,667537,873Diluted539,728540,033541,095539,880540,790Common shares outstanding at end of period (in thousands)537,409537,526538,640537,526538,640Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*in millionsQ1Q2Year-to-dateMarch 31, 2012June 30, 2012June 30, 2011June 30, 2012June 30, 2011Operating income$                101$             176$             127$             277$             363Depreciation, depletion and amortization113113118226239Special items(38)(57)-(95)(152)Capitalized interest included in cost of products sold31972212EBITDA, excluding special items*$                179$             251$             252$             430$             462Weyerhaeuser CompanyQ2.2012 Analyst PackagePreliminary results, subject to auditConsolidated Balance Sheetin millionsMarch 31, 2012June 30, 2012December 31, 2011ASSETSForest Products:Current assets:Cash and cash equivalents$                 726$              857$                       950Receivables, less allowances503494490Inventories517487476Prepaid expenses808668Deferred tax assets11310081Total current assets1,9392,0242,065Property and equipment, net2,8292,7702,901Construction in progress192208145Timber and timberlands at cost, less depletion charged to disposals3,9703,9633,978Investments in and advances to equity affiliates189187192Goodwill404040Other assets442435444Restricted assets held by special purpose entities91491691610,51510,54310,681Real Estate:Cash and cash equivalents243Receivables, less allowances303841Real estate in process of development and for sale606581555Land being processed for development943959936Investments in and advances to equity affiliates192021Deferred tax assets246238240Other assets11389113Consolidated assets not owned-381,9591,9321,917Total assets$            12,474$          12,475$                  12,598LIABILITIES AND EQUITYForest Products:Current liabilities:Current maturities of long-term debt$                 167$              184$                         12Accounts payable343360336Accrued liabilities536576593Total current liabilities1,0461,120941Long-term debt4,0264,0054,181Deferred income taxes1089293Deferred pension and other postretirement benefits1,4701,4291,467Other liabilities407400408Liabilities (nonrecourse to Weyerhaeuser) held by special purpose entities7757787767,8327,8247,866Real Estate:Long-term debt283283285Other liabilities154171172Consolidated liabilities not owned--8437454465Total liabilities8,2698,2788,331Equity:Total Weyerhaeuser shareholders' interest4,1974,1864,263Noncontrolling interests8114Total equity4,2054,1974,267Total liabilities and equity$          12,474$         12,475$                  12,598Weyerhaeuser CompanyQ2.2012 Analyst PackagePreliminary results, subject to auditConsolidated Statement of Cash Flowsin millionsQ1Q2Year-to-dateMarch 31, 2012June 30, 2012June 30, 2011June 30, 2012June 30, 2011Cash flows from operations:Net earnings$                   41$                84$                10$              125$              109Noncash charges (credits) to income:Depreciation, depletion and amortization113113120226243Deferred income taxes, net(6)13(13)726Pension and other postretirement benefits(28)(30)19(58)43Share-based compensation expense10831817Charges for impairment of assets842123Net gains on dispositions of assets(7)(10)(20)(17)(176)Foreign exchange transaction (gains) losses(7)9(1)2(8)Change in:Receivables less allowances(5)(18)(10)(23)(69)Receivable for taxes(2)18(7)16(27)Inventories(40)2835(12)(31)Real estate and land(55)7(32)(48)(34)Prepaid expenses(8)(12)(4)(20)(14)Accounts payable and accrued liabilities(56)65159(23)Deposits on land positions and other assets-22(4)22(4)Pension and postretirement contributions(35)(33)(18)(68)(37)Other17(1)19169Net cash from operations(60)26711420727Cash flows from investing activities:Property and equipment(54)(68)(39)(122)(74)Timberlands reforestation(10)(7)(7)(17)(19)Proceeds from sale of assets618324196Other1(1)(10)-(5)Cash from investing activities(57)(58)(53)(115)98Cash flows from financing activities:Cash dividends(81)(80)(80)(161)(161)Change in book overdrafts(29)91(20)(18)Payments on debt(2)(4)(548)(6)(550)Exercises of stock options523737Other(1)(3)(19)(4)(19)Cash from financing activities(108)(76)(643)(184)(711)Net change in cash and cash equivalents(225)133(582)(92)(586)Cash and cash equivalents at beginning of period9537281,4639531,467Cash and cash equivalents at end of period$                 728$              861$              881$              861$              881Cash paid (received) during the year for:Interest, net of amount capitalized$                 114$                54$                91$              168$              247Income taxes$                 (10)$                (5)$                13$              (15)$                15Weyerhaeuser CompanyTotal Company StatisticsQ2.2012 Analyst PackagePreliminary results, subject to auditSpecial Items Included in Net Earningsin millionsQ1Q2Year-to-dateMarch 31, 2012June 30, 2012June 30, 2011June 30, 2012June 30, 2011Net earnings$                  41$               84$               10$             125$             109Gain on sale of 82,000 acres of non-strategic timberlands----(96)Loss on early extinguishment of debt--16-16Restructuring, impairments and other charges10--10-Gain on postretirement plan amendment(34)(33)-(67)-Gain on sale of properties-(4)-(4)-Tax settlements(8)--(8)-Charges related to the sale of hardwoods--6-6Net earnings before special items$                    9$               47$               32$               56$               35Q1Q2Year-to-dateMarch 31, 2012June 30, 2012June 30, 2011June 30, 2012June 30, 2011Net earnings per diluted share$              0.08$            0.16$            0.02$            0.23$            0.20Gain on sale of 82,000 acres of non-strategic timberlands----(0.18)Loss on early extinguishment of debt--0.03-0.03Restructuring, impairments and other charges0.02--0.02-Gain on postretirement plan amendment(0.06)(0.06)-(0.12)-Gain on sale of properties-(0.01)-(0.01)-Tax settlements(0.02)--(0.02)-Charges related to the sale of hardwoods--0.01-0.01Net earnings before special items per diluted share$              0.02$            0.09$            0.06$            0.10$            0.06Selected Total Company Items, Excluding Discontinued Operationsin millionsQ1Q2Year-to-dateMarch 31, 2012June 30, 2012June 30, 2011June 30, 2012June 30, 2011Depreciation, depletion and amortization:Cost of products sold$                 102$              103$              105$              205$              210Selling, general and administrative expenses1110132129Total depreciation, depletion and amortization$                 113$              113$              118$              226$              239Pension and postretirement costs:Pension and postretirement costs allocated to business segments$                   13$                13$                15$                26$                25Pension and postretirement costs not allocated7731415Total company pension and postretirement costs$                   20$                20$                18$                40$                40Total decrease (increase) in Forest Products working capital (1)$               (148)$              103$              (46)$              (45)$            (240)Cash spent for capital expenditures$                 (64)$              (75)$              (44)$            (139)$              (91)(1)Working capital does not include cash balances.Weyerhaeuser CompanyTimberlands SegmentQ2.2012 Analyst PackagePreliminary results, subject to auditSegment Statement of Operationsin millionsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Sales to and revenues from unaffiliated customers$        250$        262$        288$        512$        518Intersegment sales190146134336325Total net sales and revenues440408422848843Cost of products sold353313290666610Gross margin8795132182233Selling, general and administrative expenses2523244847Research and development expenses45498Other operating income, net(11)(10)(13)(21)(179)Operating income6977117146357Interest income and other1-112Net contribution to earnings (see note 1)$         70$         77$       118$       147$       359Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*in millionsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Operating income$         69$         77$       117$       146$       357Depreciation, depletion and amortization3534366967Special items----(152)EBITDA, excluding special items*$       104$       111$       153$       215$       272Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)Q1.2012Q2.2012Q2.2011YTD.2012YTD.2011Gain on sale of 82,000 acres of non-strategic timberlands$           -$           -$           -$           -$        152Selected Segment ItemsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Total decrease (increase) in working capital (1)$          (9)$            6$        (71)$          (3)$        (80)Cash spent for capital expenditures$        (12)$        (15)$        (14)$        (27)$        (28)(1)Working capital does not include cash balances.Segment StatisticsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Third Party Net Sales and Revenue (millions)Logs:West$        130$        146$        152$        276$        262South50564910690Canada72198Total Logs187204202391360Pay as cut timber sales11982016Timberlands exchanges87391560Higher and better use land sales45296Minerals, oil and gas77151429Products from international operations2529215438Other products81199Total$        250$        262$        288$        512$        518 LogsThird Party SalesRealizations(per cubic meter)West$     99.10$     94.47$   109.42$     96.59$   105.36South$     40.48$     41.15$     40.59$     40.83$     40.88Canada$     36.35$     34.66$     42.79$     36.00$     35.55International$     22.97$     23.53$     37.78$     23.26$     30.36 LogsThird Party Sales Volumes(cubic meters,thousands)West1,3081,5511,3912,8592,486South1,2281,3541,2112,5822,216Canada2055423259217International788279160151Total2,8193,0412,7045,8605,070 LogsFee Harvest Volumes(cubic meters,thousands)West1,6791,8311,7473,5103,358South2,7142,7882,3555,5024,535International172161221333319Total4,5654,7804,3239,3458,212Weyerhaeuser CompanyWood Products SegmentQ2.2012 Analyst PackagePreliminary results, subject to auditSegment Statement of Operationsin millionsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Sales to and revenues from unaffiliated customers$         634$         776$         605$      1,410$      1,131Intersegment sales2020214041Total net sales and revenues6547966261,4501,172Cost of products sold6117086301,3191,162Gross margin4388(4)13110Selling, general and administrative expenses50504910099Research and development expenses11122Charges for restructuring, closures and impairments12436Other operating costs (income), net5(1)(4)4(9)Operating income (loss)(14)36(54)22(88)Interest income and other1--12Net contribution to earnings from continuing operations(13)36(54)23(86)Net contribution to earnings from discontinued hardwoods operations--(8)-(8)Net contribution to earnings (see note 1)$        (13)$          36$        (62)$          23$        (94)Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*in millionsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Operating income (loss)$        (14)$          36$        (54)$          22$        (88)Depreciation, depletion and amortization3433376778Special items-(6)-(6)-EBITDA, excluding special items*$          20$          63$        (17)$          83$        (10)Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)Q1.2012Q2.2012Q2.2011YTD.2012YTD.2011Gain on sale of property$            -$             6$            -$             6$            -Total special items from continuing operations-6-6-Charges related to sale of discontinued hardwoods operations--(9)-(9)Total$           -$            6$           (9)$            6$           (9)Selected Segment ItemsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Total decrease (increase) in working capital (1)$       (112)$             5$           44$       (107)$         (75)Cash spent for capital expenditures$           (6)$         (15)$           (7)$         (21)$         (13)(1)Working capital does not include cash balances.Segment Statisticsin millions, except for third-party sales realizationsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Structural Lumber(board feet)Third Party Net Sales and Revenue$         291$         370$         290$         661$         550Third Party Sales Realizations$    311.00$    349.91$    300.84$    331.63$    307.50Third Party Sales Volumes9371,0569631,9931,789Production Volumes9581,0049031,9621,796Engineered SolidSection(cubic feet)Third Party Net Sales and Revenue$           65$           70$           64$         135$         117Third Party Sales Realizations$ 1,830.07$ 1,789.35$ 2,005.03$ 1,808.83$ 2,014.70Third Party Sales Volumes3.63.93.27.55.8Production Volumes3.73.83.77.57.3EngineeredI-joists(lineal feet)Third Party Net Sales and Revenue$           41$           49$           48$           90$           81Third Party Sales Realizations$ 1,284.98$ 1,210.80$ 1,258.14$ 1,243.80$ 1,261.55Third Party Sales Volumes3240387264Production Volumes3437347164Oriented StrandBoard(square feet 3/8')Third Party Net Sales and Revenue$         111$         138$           86$         249$         168Third Party Sales Realizations$    196.89$    213.97$    177.22$    205.98$    183.61Third Party Sales Volumes5656434841,208916Production Volumes6016265181,2271,012Softwood Plywood (square feet 3/8')Third Party Net Sales and Revenue$           23$           26$           15$           49$           30Third Party Sales Realizations$    309.26$    331.56$    264.54$    320.93$    260.32Third Party Sales Volumes738158154116Production Volumes515048101101Weyerhaeuser Company Cellulose Fibers SegmentQ2.2012 Analyst PackagePreliminary results, subject to auditSegment Statement of Operationsin millionsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Total net sales and revenues$        473$        459$        526$        932$    1,032Cost of products sold407404417811811Gross margin6655109121221Selling, general and administrative expenses2422244646Research and development expenses22244Other operating income, net(9)(4)(3)(13)(8)Operating income49358684179Interest income and other(1)1(1)-(2)Net contribution to earnings (see note 1)$          48$          36$          85$          84$        177Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*in millionsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Operating income$          49$          35$          86$          84$        179Depreciation, depletion and amortization3736367373EBITDA, excluding special items*$          86$          71$        122$        157$        252Selected Segment ItemsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Total decrease (increase) in working capital (1)$           45$           24$         (37)$           69$         (23)Cash spent for capital expenditures$         (45)$         (44)$         (23)$         (89)$         (49)(1)Working capital does not include cash balances.Segment StatisticsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Pulp(air-dry metric tons)Third Party Net Sales and Revenue (millions)$         367$         348$         409$         715$         807Third Party Sales Realizations$    818.42$    818.88$    960.04$    818.65$    935.81Third Party Sales Volumes (thousands)449425426874862Production Volumes (thousands)438417410855847LiquidPackagingBoard(tons)Third Party Net Sales and Revenue (millions)$           83$           90$           93$         173$         178Third Party Sales Realizations$ 1,181.34$ 1,176.32$ 1,194.46$ 1,178.72$ 1,171.86Third Party Sales Volumes (thousands)707677146151Production Volumes (thousands)657880143147Weyerhaeuser CompanyReal Estate SegmentQ2.2012 Analyst PackagePreliminary results, subject to auditSegment Statement of Operationsin millionsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Total net sales and revenues$       137$       296$       191$       433$       351Cost of products sold113248147361273Gross margin2448447278Selling, general and administrative expenses3234366671Charges for restructuring, closures and impairments11122Other operating income, net-(1)-(1)-Operating income (loss)(9)14755Interest income and other11122Net contribution to earnings$          (8)$         15$           8$           7$           7Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*in millionsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Operating income (loss)$          (9)$         14$           7$           5$           5Depreciation, depletion and amortization23356Capitalized interest included in cost of products sold31461710EBITDA, excluding special items*$          (4)$         31$         16$         27$         21Selected Segment ItemsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Cash spent for capital expenditures$          (1)$           -$           -$          (1)$          (1)Segment StatisticsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Net sales and revenues:Single-family housing$        131$        190$        180$        321$        332Land31051110818Other31-41Total net sales and revenue$        137$        296$        191$        433$        351Single-family homes sold6977645211,4611,056Single-family homes closed349508459857822Single-family homes sold but not closed (backlog)7771,0336731,033673Single-family cancellation rate10.1 %15.4 %16.2 %12.9 %13.9 %Single-family buyer traffic14,27217,67714,88531,94927,789Single-family average price of homes closed (in thousands)$        376$        374$        391$        375$        404Single-family home gross margin - excluding impairments (1)17.3 %19.5 %22.4 %18.6 %22.0 % (1)Single-family gross margin excluding impairments equals revenue less cost of sales and period costs (other than impairments and deposit write-offs).Weyerhaeuser CompanyUnallocated ItemsQ2.2012 Analyst PackagePreliminary results, subject to auditUnallocated items are gains or charges not related to or allocated to an individual operating segment. They include a portion of items such as: share-based compensation; pension and postretirement costs; foreign exchange transaction gains and losses associated with financing; and the elimination of intersegment profit in inventory and the LIFO reserve.Contribution to Earningsin millionsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Unallocated corporate function expenses$          (6)$          (3)$        (10)$          (9)$        (26)Unallocated share-based compensation(5)(1)5(6)(11)Unallocated pension & postretirement costs(7)(7)(3)(14)(15)Foreign exchange gains (losses)6(8)1(2)7Elimination of intersegment profit in inventory and LIFO (1)(12)(2)(10)(14)(20)Other3035(12)65(25)Operating income (loss)614(29)20(90)Interest income and other10981916Net contribution to earnings from continuing operations1623(21)39(74)Net contribution to earnings from discontinued operations--(11)-(9)Net contribution to earnings$         16$         23$       (32)$         39$       (83)(1)We now report the elimination of intersegment profit on inventory and the LIFO reserve in Unallocated Items. Previously these company-level adjustments were recorded in the business segments. This provides a better understanding of business operating results. Prior period results have been adjusted to reflect the change.Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*in millionsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Operating income (loss)$           6$         14$       (29)$         20$       (90)Depreciation, depletion and amortization5761215Special items(38)(51)-(89)-Capitalized interest included in cost of products sold-5152EBITDA, excluding special items*$       (27)$       (25)$       (22)$       (52)$       (73)Unallocated Special Items Included in Net Contribution to Earnings (Pre-Tax)Q1.2012Q2.2012Q2.2011YTD.2012YTD.2011Gain on postretirement plan amendment$          52$          51$           -$        103$           -Restructuring, impairments and other charges(14)--(14)-Total$         38$         51$          -$         89$          -Unallocated Selected ItemsQ1.2012Q2.2012Q2.2011YTD.2012YTD.2011Total decrease (increase) in working capital (1)$        (72)$          68$          18$          (4)$        (62)Cash spent for capital expenditures$            -$          (1)$            -$          (1)$            -(1)Working capital does not include cash balances.*EBITDA excluding special items is a non-GAAP measure that management uses to evaluate the performance of the company. EBITDA excluding special items, as we define it, is operating income from continuing operations adjusted for depreciation, depletion, amortization, special items and interest included in cost of products sold. EBITDA excluding special items should not be considered in isolation from and is not intended to represent an alternative to our results computed under GAAP. SOURCE Weyerhaeuser Company