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Press release from PR Newswire

Weyerhaeuser Reports Third Quarter Results

Friday, October 26, 2012

Weyerhaeuser Reports Third Quarter Results03:05 EDT Friday, October 26, 2012FEDERAL WAY, Wash., Oct. 26, 2012 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today reported net earnings of $117 million, or 22 cents per diluted share, for the third quarter. This compares with net earnings of $157 million, or 29 cents per diluted share, and net earnings before special items of $66 million, or 12 cents per diluted share, for the same period last year. Net sales for the third quarter of 2012 totaled $1.8 billion, compared with net sales from continuing operations of $1.6 billion for the third quarter of 2011.(Logo:  http://photos.prnewswire.com/prnh/20120111/AQ34535LOGO) "This month the Board of Directors increased our quarterly dividend by 13 percent to 17 cents per share," said Dan Fulton, president and chief executive officer. "As our third quarter performance indicates, the operational improvements within our businesses are demonstrating clear results, and we are capitalizing on an improving housing market to the benefit of our shareholders." WEYERHAEUSER FINANCIAL HIGHLIGHTS201220122011(millions, except per share data)2Q3Q3QNet sales from continuing operations$1,793$1,772$1,569Net earnings$84$117$157(1)Weighted average shares outstanding, diluted540542540Earnings per diluted share$0.16$0.22$0.29(1)Net earnings before special items$47$117$66Earnings per diluted share before special items$0.09$0.22$0.12Net cash from operations$267$122$117Net change in cash and cash equivalents$133($253)(2)$90Cash and cash equivalents at end of period$861$608$971(1) The third quarter of 2011 included net earnings of $24 million from discontinued operations, or $0.04 per diluted share, on net sales of $83 million. Discontinued operations include Weyerhaeuser's hardwoods and Westwood Shipping Lines businesses, which were sold in the third quarter of 2011.(2) Net change in cash and cash equivalents for the third quarter of 2012 includes $181 million for debt repayment and a $97 million payment on a note related to a timber monetization undertaken in 2002. Weyerhaeuser expects to receive cash of approximately $110 million when the related financial investment matures in the fourth quarter of 2012.TIMBERLANDSFINANCIAL HIGHLIGHTS (millions)2Q 20123Q 2012ChangeNet sales$262$267$5Contribution to pre-tax earnings$77$80$33Q 2012 Performance - The segment's earnings improved $3 million compared with the second quarter. Earnings from disposition of non-strategic timberlands increased $18 million. This was mostly offset by lower domestic selling prices for Western logs, and reduced export log realizations due to mix. Western fee harvest volumes declined slightly, and road costs increased seasonally. In the South, average selling prices for logs improved slightly compared with the second quarter, and fee harvest volumes were slightly higher.4Q 2012 Outlook - Weyerhaeuser expects comparable earnings from the Timberlands segment in the fourth quarter. The company expects seasonally higher fee harvest volumes and slightly improved selling prices for Western logs in export and domestic markets, offset by increased silviculture costs.WOOD PRODUCTSFINANCIAL HIGHLIGHTS (millions)2Q 20123Q 2012ChangeNet sales$776$816$40Contribution to pre-tax earnings before special items$30$59$29Pre-tax special items6?(6)GAAP contribution to pre-tax earnings$36$59$233Q 2012 Performance - The segment's earnings before special items improved $29 million compared with the second quarter due to strong markets and effective execution of performance improvement initiatives. Sales realizations were higher across nearly all product lines, most significantly in oriented strand board, which increased 25 percent. Sales volumes for engineered wood products increased, and volumes for lumber and oriented strand board declined slightly.4Q 2012 Outlook - Weyerhaeuser anticipates lower earnings from the Wood Products segment in the fourth quarter due to seasonal declines in pricing and demand for most products.CELLULOSE FIBERS FINANCIAL HIGHLIGHTS (millions)2Q 20123Q 2012ChangeNet sales$459$459$0Contribution to pre-tax earnings$36$78$423Q 2012 Performance - The segment's earnings improved $42 million compared with the second quarter due to significantly lower maintenance costs, increased production and strong operating performance. Average pulp prices were flat. The segment completed one scheduled annual maintenance outage in the third quarter, compared with two in the second quarter. 4Q 2012 Outlook - Weyerhaeuser expects earnings from the Cellulose Fibers segment to be comparable to the third quarter. The company anticipates lower selling prices for fluff pulp, offset by increased sales volumes and slightly lower maintenance expense.REAL ESTATEFINANCIAL HIGHLIGHTS (millions)2Q 20123Q 2012ChangeNet sales$296$230($66)Contribution to pre-tax earnings$15$17$23Q 2012 Performance - The segment's earnings improved $2 million. Third quarter included earnings of $17 million from single-family homebuilding, compared with $3 million from single family homebuilding and $12 million from sale of land and lots in the second quarter. Home closings increased seasonally to 615 single-family homes, and average margins on homes closed were substantially higher due to mix. At the end of the third quarter the backlog of homes sold, but not closed, totaled 1,055 units, a 74 percent increase compared with one year ago.4Q 2012 Outlook - Excluding any earnings from potential land sales, Weyerhaeuser expects slightly lower earnings from single-family homebuilding operations in the fourth quarter. The company anticipates a seasonal increase in home closings, lower average margins due to mix and higher selling expenses due to the additional closing volume.ABOUT 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 October 26 to discuss third quarter results.To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on October 26.To join the conference call from within North America, dial 877-296-9413 (access code ? 41409566) at least 15 minutes prior to the call. Those calling from outside North America should dial 706-679-2458 (access code ? 41409566). Replays will be available for one week at 800-585-8367 (access code ? 41409566) from within North America and at 404-537-3406 (access code ? 41409566) from outside North America.The webcast is available to both institutional and individual investors through the Thomson StreetEvents Network. Individual investors can listen to the call at www.fulldisclosure.com, Thomson's individual investor portal. Institutional investors can access the call via Thomson's password-protected site at www.streetevents.com.FORWARD LOOKING 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 during the fourth quarter of 2012, including slightly improved selling prices and comparable sales volumes for Western logs, increased demand and slightly improved price realizations for export logs, slightly lower Southern log realizations due to mix and a small seasonal increase in fee harvest volume, increased silviculture costs, earnings from non-strategic land sales expected to be flat, and comparable earnings from the Timberlands segment; a seasonal decline in pricing and demand, and lower earnings from the Wood Products segment; lower selling prices for fluff pulp, increased sales volumes, lower maintenance expense, somewhat higher energy costs and comparable earnings from the Cellulose Fibers segment; and a seasonal increase in home closings, lower average margins due to mix, higher selling expenses due to additional volume, and slightly lower earnings from single-family homebuilding operations in the Real Estate segment.Major risks, uncertainties and assumptions that affect the company's businesses and may cause actual results to differ from these forward-looking statements, include, but are not limited to:the effect of general economic conditions, including employment rates, housing starts, interest rate levels, availability of financing for home mortgages, and strength of the U.S. dollar; market demand for the company's products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions; performance of the company's manufacturing operations, including maintenance requirements; the successful execution of internal performance plans, including restructurings and cost reduction initiatives; the level of competition from domestic and foreign producers; raw material prices; energy prices; transportation costs; the effect of weather; the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters; federal tax policies; the effect of forestry, land use, environmental and other governmental regulations; legal proceedings; performance of pension fund investments and related derivatives; the effect of timing of retirements and changes in the market price of company stock on charges for stock-based compensation; changes in accounting principles; and other factors described under "Risk Factors" in the Company's annual report on Form 10-K and quarterly reports on Form 10-Q.The company also is a large exporter and is affected by changes in economic activity in Europe and Asia, particularly Japan and China. It is affected by changes in currency exchange rates, particularly the relative value of the U.S. dollar to the euro and the Canadian dollar, and the relative value of the euro and the yen. Restrictions on international trade or tariffs imposed on imports also may affect the company.For more information contact:Media ? Anthony Chavez, 253-924-7148Analysts ? Kathryn McAuley, 253-924-2058Exhibit 99.2Weyerhaeuser CompanyQ3.2012 Analyst PackagePreliminary results, subject to auditConsolidated Statement of Operationsin millionsQ2Q3Year-to-dateJune 30, 2012September 30, 2012September 30, 2011September 30, 2012September 30, 2011Net sales and revenues$         1,793$      1,772$        1,569$       5,059$         4,601Cost of products sold1,5161,4241,2834,2303,803Gross margin277348286829798Selling, general and administrative expenses142156135448452Research and development expenses8872321Charges for restructuring, closures and impairments410412652Other operating costs (income), net(53)(28)3(147)(190)Operating income176202100479463Interest income and other1115153835Interest expense, net of capitalized interest(86)(87)(86)(260)(296)Earnings from continuing operations before income taxes10113029257202Income taxes(17)(13)104(15)52Earnings from continuing operations84117133242254Earnings from discontinued operations, net of income taxes--24-12Net earnings attributable to Weyerhaeuser common shareholders$               84$        117$          157$          242$            266Per Share InformationQ2Q3Year-to-dateJune 30, 2012September 30, 2012September 30, 2011September 30, 2012September 30, 2011Earnings per share attributable to Weyerhaeuser common shareholders, basic and diluted:Continuing operations$             0.16$        0.22$          0.25$          0.45$           0.47Discontinued operations--0.04-0.02Net earnings per share$             0.16$        0.22$          0.29$          0.45$           0.49Dividends paid per share$             0.15$        0.15$          0.15$          0.45$           0.45Weighted average shares outstanding (in thousands):Basic537,966539,094537,969538,146537,906Diluted540,033542,311539,827540,694540,469Common shares outstanding at end of period (in thousands)537,526540,672537,210540,672537,210Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*in millionsQ2Q3Year-to-dateJune 30, 2012September 30, 2012September 30, 2011September 30, 2012September 30, 2011Operating income$             176$           202$          100$           479$            463Depreciation, depletion and amortization113112120338359Special items(57)-33(95)(119)Capitalized interest included in cost of products sold19652817EBITDA, excluding special items*$             251$          320$          258$          750$            720 Weyerhaeuser CompanyQ3.2012 Analyst PackagePreliminary results, subject to auditConsolidated Balance Sheetin millionsJune 30, 2012September 30, 2012December 31, 2011ASSETSForest Products:Current assets:Cash and cash equivalents$         857$              602$            950Receivables, less allowances488504468Receivables for taxes69722Inventories487512476Prepaid expenses868368Deferred tax assets10011781Total current assets2,0241,9152,065Property and equipment, net2,7702,7592,901Construction in progress208220145Timber and timberlands at cost, less depletion charged to disposals3,9633,9673,978Investments in and advances to equity affiliates187188192Goodwill404040Other assets435352444Assets held by variable interest entities91691491610,54310,35510,681Real Estate:Cash and cash equivalents463Receivables, less allowances383641Real estate in process of development and for sale581602555Land being processed for development959982936Investments in and advances to equity affiliates202021Deferred tax assets238233240Other assets8998113Assets held by variable interest entities3681,9321,9831,917Total assets$    12,475$          12,338$       12,598LIABILITIES AND EQUITYForest Products:Current liabilities:Current maturities of long-term debt$         184$               340$              12Accounts payable360356336Accrued liabilities576558593Total current liabilities1,1201,254941Long-term debt4,0053,8424,181Deferred income taxes926893Deferred pension and other postretirement benefits1,4291,3781,467Other liabilities400477408Liabilities (nonrecourse to the company) held by variable interest entities7786807767,8247,6997,866Real Estate:Long-term debt283109285Other liabilities171177172Liabilities (nonrecourse to the company) held by variable interest entities--8454286465Total liabilities8,2787,9858,331Equity:Total Weyerhaeuser shareholders' interest4,1864,3404,263Noncontrolling interests11134Total equity4,1974,3534,267Total liabilities and equity$     12,475$          12,338$       12,598Weyerhaeuser CompanyQ3.2012 Analyst PackagePreliminary results, subject to auditConsolidated Statement of Cash Flowsin millionsQ2Q3Year-to-dateJune 30, 2012September 30, 2012September 30, 2011September 30, 2012September 30, 2011Cash flows from operations:Net earnings$         84$         117$          157$          242$           266Noncash charges (credits) to income:Depreciation, depletion and amortization113112120338363Deferred income taxes, net1315(103)22(77)Pension and other postretirement benefits(30)1917(39)60Share-based compensation expense81022819Charges for impairment of assets47341937Net gains on dispositions of assets(10)(22)(51)(39)(227)Foreign exchange transaction (gains) losses9(10)19(8)11Change in:Receivables less allowances(18)(10)35(33)(34)Receivable for taxes18(1)815(19)Inventories28(22)(9)(34)(40)Real estate and land7(47)(15)(95)(49)Prepaid expenses(12)2-(18)(14)Accounts payable and accrued liabilities651(51)10(74)Deposits on land positions and other assets22(11)(5)11(9)Pension and postretirement contributions(33)(41)(27)(109)(64)Other(1)3(14)19(5)Net cash from operations267122117329144Cash flows from investing activities:Property and equipment(68)(75)(62)(197)(136)Timberlands reforestation(7)(5)(4)(22)(23)Proceeds from sale of assets181215736353Payments of liabilities held by special purpose entities-(97)-(97)-Other(1)(1)(1)(1)(6)Cash from investing activities(58)(166)90(281)188Cash flows from financing activities:Cash dividends(80)(81)(81)(242)(242)Change in book overdrafts9(12)(8)(32)(26)Payments on debt(4)(181)-(187)(550)Exercises of stock options266-7337Repurchase of common stock--(24)-(24)Other(3)(1)(4)(5)(23)Cash from financing activities(76)(209)(117)(393)(828)Net change in cash and cash equivalents133(253)90(345)(496)Cash and cash equivalents at beginning of period7288618819531,467Cash and cash equivalents at end of period$       861$         608$          971$          608$          971Cash paid (received) during the year for:Interest, net of amount capitalized$         57$         117$          115$          290$          362Income taxes$         (5)$             1$              6$          (14)$            21Weyerhaeuser CompanyTotal Company StatisticsQ3.2012 Analyst PackagePreliminary results, subject to auditSpecial Items Included in Net Earningsin millionsQ2Q3Year-to-dateJune 30, 2012September 30, 2012September 30, 2011September 30, 2012September 30, 2011Net earnings$              84$         117$          157$          242$            266Gain on sale of 82,000 acres of non-strategic timberlands----(96)Loss on early extinguishment of debt----16Restructuring, impairments and other charges--241024Gain on postretirement plan amendment(33)--(67)-Gain on sale of properties(4)-(9)(4)(9)Tax adjustments--(83)(8)(83)Charges related to the sale of hardwoods--8-14Gain on sale of Westwood Shipping Lines--(31)-(31)Net earnings before special items$            47$          117$           66$          173$            101Q2Q3Year-to-dateJune 30, 2012September 30, 2012September 30, 2011September 30, 2012September 30, 2011Net earnings per diluted share$         0.16$        0.22$         0.29$         0.45$          0.49Gain on sale of 82,000 acres of non-strategic timberlands----(0.18)Loss on early extinguishment of debt----0.03Restructuring, impairments and other charges--0.040.020.04Gain on postretirement plan amendment(0.06)--(0.12)-Gain on sale of properties(0.01)-(0.01)(0.01)(0.01)Tax adjustments--(0.15)(0.01)(0.15)Charges related to the sale of hardwoods--0.01-0.03Gain on sale of Westwood Shipping Lines--(0.06)-(0.06)Net earnings before special items per diluted share$        0.09$         0.22$         0.12$         0.33$           0.19Selected Total Company Items, Excluding Discontinued Operationsin millionsQ2Q3Year-to-dateJune 30, 2012September 30, 2012September 30, 2011September 30, 2012September 30, 2011Depreciation, depletion and amortization:Cost of products sold$          103$         102$          108$          307$            318Selling, general and administrative expenses1010123141Total depreciation, depletion and amortization$          113$         112$          120$         338$           359Pension and postretirement costs:Pension and postretirement costs allocated to business segments$            14$           12$              9$            39$             34Pension and postretirement costs not allocated7762121Total company pension and postretirement costs$            21$           19$            15$           60$             55Total decrease (increase) in Forest Products working capital (1)$           103$          (29)$            70$          (74)$          (170)Cash spent for capital expenditures$           (75)$          (80)$           (65)$        (219)$          (156)(1)Working capital does not include cash balances. Weyerhaeuser CompanyTimberlands SegmentQ3.2012 Analyst PackagePreliminary results, subject to auditSegment Statement of Operationsin millionsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Sales to and revenues from unaffiliated customers$        262$        267$        252$        779$        770Intersegment sales146162154498479Total net sales and revenues4084294061,2771,249Cost of products sold3133363221,002932Gross margin959384275317Selling, general and administrative expenses2324237270Research and development expenses5441312Other operating income, net(10)(14)(3)(35)(182)Operating income777960225417Interest income and other-1123Net contribution to earnings?$         77$         80$         61$       227$       420Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*in millionsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Operating income$         77$         79$         60$       225$       417Depreciation, depletion and amortization343535104102Special items----(152)EBITDA, excluding special items*$       111$       114$         95$       329$       367Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)Q2.2012Q3.2012Q3.2011YTD.2012YTD.2011Gain on sale of 82,000 acres of non-strategic timberlands$           -$           -$           -$           -$        152Selected Segment ItemsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Total decrease (increase) in working capital (1)$            6$          19$          60$          16$        (20)Cash spent for capital expenditures$        (15)$        (17)$        (12)$        (44)$        (40)(1)Working capital does not include cash balances.Segment StatisticsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Third Party Net Sales and Revenue (millions)Logs:West$        146$        132$        144$        408$        406South566053166143Canada2541412Total Logs204197201588561Pay as cut timber sales9892825Timberlands exchanges72423962Higher and better use land sales5451311Minerals, oil and gas78142243Products from international operations2926218059Other products1--99Total$        262$        267$        252$        779$        770 LogsThird Party SalesRealizations(per cubic meter)West$     94.47$     89.28$   104.27$     94.09$   104.97South$     41.15$     42.04$     39.11$     41.26$     40.21Canada$     34.66$     35.23$     33.73$     35.74$     34.91International$     23.53$     23.76$     33.73$     23.45$     35.65 LogsThird Party SalesVolumes(cubic meters,thousands)West1,5511,4801,3854,3393,871South1,3541,4301,3364,0123,552Canada54133116392333International829988259239Total3,0413,1422,9259,0027,995 LogsFee Harvest Volumes(cubic meters,thousands)West1,8311,7841,6045,2944,962South2,7882,8092,5358,3117,070International161198270531589Total4,7804,7914,40914,13612,621Weyerhaeuser CompanyWood Products SegmentQ3.2012 Analyst PackagePreliminary results, subject to auditSegment Statement of Operations  in millionsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Sales to and revenues from unaffiliated customers$     776$     816$     603$    2,226$    1,734Intersegment sales2018205861Total net sales and revenues7968346232,2841,795Cost of products sold7087136242,0321,786Gross margin88121(1)2529Selling, general and administrative expenses505447154146Research and development expenses12143Charges for restructuring, closures and impairments2238544Other operating costs (income), net(1)4(6)8(15)Operating income (loss)3659(81)81(169)Interest income and other--113Net contribution to earnings from continuing operations3659(80)82(166)Net contribution to earnings from discontinued operations--(17)-(25)Net contribution to earnings?$      36$      59$    (97)$        82$    (191)Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*in millionsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Operating income (loss)$      36$      59$    (81)$        81$    (169)Depreciation, depletion and amortization333338100116Special items(6)-33(6)33EBITDA, excluding special items*$      63$      92$    (10)$     175$      (20)Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)  Q2.2012Q3.2012Q3.2011YTD.2012YTD.2011Gain on sale of property$         6$       -$         5$           6$           5Charges for restructuring and impairments$         -$       -$     (38)$       (38)Total special items from continuing operations6-(33)6(33)Charges related to sale of discontinued hardwoods operations--(13)-(22)Total$        6$       -$    (46)$          6$      (55)Selected Segment ItemsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Total decrease (increase) in working capital (1)$         5$     (21)$       34$     (128)$       (41)Cash spent for capital expenditures$     (15)$     (16)$       (8)$       (37)$       (21)(1)Working capital does not include cash balances.Segment Statisticsin millions, except for third-party sales realizationsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Structural Lumber(board feet)Third Party Net Sales and Revenue$     370$     363$     281$    1,024$       831Third Party Sales Realizations$     350$     359$     301$       341$       305Third Party Sales Volumes1,0561,0139343,0062,723Production Volumes1,0049458902,9072,686Engineered SolidSection(cubic feet)Third Party Net Sales and Revenue$       70$       76$       63$       211$       180Third Party Sales Realizations$  1,789$  1,800$  1,883$    1,806$    1,967Third Party Sales Volumes3.94.23.411.79.2Production Volumes3.84.33.411.810.7EngineeredI-joists(lineal feet)Third Party Net Sales and Revenue$       49$       53$       43$       143$       124Third Party Sales Realizations$  1,211$  1,248$  1,275$    1,246$    1,266Third Party Sales Volumes40433411598Production Volumes37393211096Oriented StrandBoard(square feet 3/8')Third Party Net Sales and Revenue$     138$     169$       96$       418$       264Third Party Sales Realizations$     214$     268$     176$       227$       181Third Party Sales Volumes6436305461,8381,462Production Volumes6266425741,8691,586Softwood Plywood (square feet 3/8')Third Party Net Sales and Revenue$       26$       34$       18$         83$         48Third Party Sales Realizations$     332$     356$     259$       334$       260Third Party Sales Volumes819569249185Production Volumes505449155150 Weyerhaeuser CompanyCellulose Fibers SegmentQ3.2012 Analyst PackagePreliminary results, subject to auditSegment Statement of Operationsin millionsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Total net sales and revenues$   459$   459$   503$  1,391$  1,535Cost of products sold4043643451,1751,156Gross margin5595158216379Selling, general and administrative expenses2223246970Research and development expenses22266Other operating income, net(4)(5)(4)(18)(12)Operating income3575136159315Interest income and other13331Net contribution to earnings?$      36$      78$   139$     162$     316Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*in millionsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Operating income$      35$      75$   136$     159$     315Depreciation, depletion and amortization363737110110EBITDA, excluding special items*$      71$   112$   173$     269$     425Selected Segment ItemsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Total decrease (increase) in working capital (1)$       24$     (20)$     (14)$         49$       (37)Cash spent for capital expenditures$     (44)$     (45)$     (43)$     (134)$       (92)(1)Working capital does not include cash balances.Segment StatisticsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Pulp(air-dry metrictons)Third Party Net Sales and Revenue (millions)$     348$     354$     391$    1,069$    1,198Third Party Sales Realizations$     819$     818$     920$       818$       930Third Party Sales Volumes (thousands)4254324261,3061,288Production Volumes (thousands)4174534621,3081,309LiquidPackagingBoard(tons)Third Party Net Sales and Revenue (millions)$       90$       84$       87$       257$       265Third Party Sales Realizations$  1,176$  1,155$  1,165$    1,171$    1,170Third Party Sales Volumes (thousands)767476220227Production Volumes (thousands)787781220228 Weyerhaeuser CompanyReal Estate SegmentQ3.2012 Analyst PackagePreliminary results, subject to auditSegment Statement of Operationsin millionsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Total net sales and revenues$   296$   230$   211$     663$     562Cost of products sold248175164536437Gross margin485547127125Selling, general and administrative expenses343636102107Charges for restructuring, closures and impairments13254Other operating income, net(1)--(1)-Operating income141692114Interest income and other11133Net contribution to earnings$      15$      17$      10$        24$        17Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*in millionsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Operating income$      14$      16$        9$        21$        14Depreciation, depletion and amortization33389Capitalized interest included in cost of products sold14532213EBITDA, excluding special items*$      31$      24$      15$        51$        36Selected Segment ItemsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Cash spent for capital expenditures$       -$       (1)$       (1)$         (2)$         (2)Segment StatisticsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Net sales and revenues:Single-family housing$     190$     229$     204$       550$       536Land1051510923Other1-243Total net sales and revenue$     296$     230$     211$       663$       562Single-family homes sold7646374402,0981,496Single-family homes closed5086155081,4721,330Single-family homes sold but not closed (backlog)1,0331,0556051,055605Single-family cancellation rate15.4 %18.3 %17.4 %14.6 %15.0 %Single-family buyer traffic17,67717,89411,80349,84339,592Single-family average price of homes closed (in thousands)$     374$     372$     403$       374$       403Single-family home gross margin - excluding impairments (1)19.5 %24.3 %23.0 %21.0 %22.4 %(1)Single-family gross margin excluding impairments equals revenue less cost of sales and period costs (other than impairments and deposit write-offs).Weyerhaeuser CompanyUnallocated ItemsQ3.2012 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 millionsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Unallocated corporate function expenses$       (3)$       (5)$     (10)$       (14)$       (36)Unallocated share-based compensation(1)(7)12(13)1Unallocated pension & postretirement costs(7)(7)(6)(21)(21)Foreign exchange gains (losses)(8)11(16)9(9)Elimination of intersegment profit in inventory and LIFO?(2)(10)1(24)(19)Other35(9)(5)56(30)Operating income (loss)14(27)(24)(7)(114)Interest income and other91092925Net contribution to earnings from continuing operations23(17)(15)22(89)Net contribution to earnings from discontinued operations--54-45Net contribution to earnings$      23$    (17)$      39$        22$      (44)?We began reporting the elimination of intersegment profit on inventory and the LIFO reserve in Unallocated Items in second quarter 2012. 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 millionsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Operating income (loss)$      14$    (27)$    (24)$        (7)$    (114)Depreciation, depletion and amortization7471622Special items(51)--(89)-Capitalized interest included in cost of products sold51264EBITDA, excluding special items*$    (25)$    (22)$    (15)$      (74)$      (88)Unallocated Special Items Included in Net Contribution to Earnings (Pre-Tax)Q2.2012Q3.2012Q3.2011YTD.2012YTD.2011Gain on postretirement plan amendment$       51$       -$          -$       103$            -Restructuring, impairments and other charges---(14)-Total special items from continuing operations$       51$       -$          -$         89$            -Gain on sale of property$          -$       -$          9$            -$           9Gain on sale of Westwood Shipping Lines$         -$       -$       49$           -$         49Total$      51$       -$       58$        89$         58Unallocated Selected ItemsQ2.2012Q3.2012Q3.2011YTD.2012YTD.2011Total decrease (increase) in working capital (1)$       68$       (7)$     (10)$       (11)$       (72)Cash spent for capital expenditures$       (1)$       (1)$       (1)$         (2)$         (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